CREATE. ACHIEVE. EXCEL.

Our Winning Culture

2018 Annual Report

TABLE OF CONTENTS

2
4
Financial Highlights
At a Glance
CREATE. ACHIEVE. EXCEL.
6 Growth Chart
Awards and accolades attest to concrete achievements.
7 Corporate Values
8 Chairman’s Message The cover of the 2018 Vista Land Annual Report shows
10 President’s Report how the laurels it received during the year are reflected
16 Numbers at a Glance in the brick and mortar structures for which they have
Review of Operations
been bestowed. The cover is an affirmation of actual
18 Brittany
20 Crown Asia achievements, of the fruits of solid hard work, and
22 Camella unwavering focus to attain the Company’s vision of
24 Communities Philippines building not just houses, but Communicities.
26 Vista Residences
28 Starmall
Features
30 2018 Agora Awards Marketing Company of the Year
36 Vista Malls: Achieving the Ultimate Philippine Mall Experience
44 Vista Residences: A Decade of Ideal Urban Living
Corporate Social Responsibility
48 Villar SIPAG: The CSR Arm of Vista Land
51 Villar SIPAG Youth Poverty Reduction Challenge
52 Championing Clean Water & Environment
54 DENR Recognition for Manila Bay Cleanup
56 Building Up Skills of Construction Workers
58 Continuing Support to OFWs & Their Families
60 Festivals
62 Corporate Governance
64 Board of Directors
66 Management Committee
68 Management Discussion & Analysis
75 Financial Statements
211 Shareholder Information

2018 ANNUAL REPORT 1

 FINANCIAL HIGHLIGHTS

2016
FINANCIAL HIGHLIGHTS (in Php M) 2017 2018
INCOME STATEMENT 2016 2017 2018
Total Revenues 31,834 36,042 41,487
Real Estate Revenues 25,025 27,594 31,856
Recurring Revenues 4,671 6,003 6,972
Others 2,138 2,445 2,659
Operating Expenses 7,595 8,081 9,559
EBITDA 12,988 15,963 18,232
Net Income 8,100 9,063 10,534

BALANCE SHEET
Cash and Investments 37,933 40,159 47,645
Total Assets 174,768 199,935 238,262
Total Borrowings 79,500 94,061 121,547
Net Debt 37,679 50,142 71,118
Total Liabilities 98,273 115,927 146,355
Equity 76,495 84,008 91,907

Financial Ratios
Current Ratio 3.28 4.67 3.77
Net debt to equity 0.49 0.60 0.77
Debt to equity 0.99 1.07 1.29
Return on Equity 10.59% 10.79% 11.46%
Return on Assets 4.63% 4.53% 4.42%

Cashflows
Net Cash provided by operating activities 5,772.18 1,986.06 3,066.59
Net Cash used in investing activities (10,875.84) (6,149.5) (10,347.86)
Net Cash provided by financing activities 7,988.82 6,755.26 15,803.73

2018 ANNUAL REPORT 3

 AT A GLANCE

A Leading Integrated Property Developer Launched 57 projects with an estimated

& The Philippines’ Largest Homebuilder total value of about P51.7 billion

Owner, developer and operator of retail malls that

Develops luxury houses in masterplanned communities, Caters to the upper middle market housing Servicing the affordable and middle-income housing Offers residential properties outside the Mega Manila area in Builds both mid and high-rise vertical target mass market retail consumers and develops
catering to the high-end market segment in Mega segment in Mega Manila. segment in the Mega Manila area. the affordable and middle market segments primarily under developments. and operates BPO commercial centers.
Manila. the “Camella” and “Lessandra” brands.

Established: 1993 Established: 1995 Established: 1977 Established: 1991 Acquired: 2009 Acquired: 2015

La Posada (Sucat, Muntinlupa) Valenza (Sta. Rosa, Laguna) Camella Verra (Caloocan City) Camella Cagayan (Tuguegarao City) Wil Tower (Eugenio Lopez Drive, Quezon City) Starmall Las Piñas Annex (Zapote, Las Piñas City
Portofino South (Daang Hari, Alabang) Fortezza (Cabuyao, Laguna) Camella Ellisande (Taguig City) Camella Subic (Subic, Bataan) Symphony Tower (South Triangle, Quezon City) Vista Mall Las Piñas (Zapote, Las Piñas City)
Portofino Courtyards (Daang Hari, Alabang) Marina Heights (Sucat, Muntinlupa) Camella Dasma At the IslandS (Dasmariñas, Cavite) Provence (Malolos, Bulacan) Avant at the Fort (Bonifacio Global City) Starmall EDSA Shaw (Wack-wack, Mandaluyong City)
PORTFOLIO

Amore (Daang Hari, Alabang) Citta Italia (Bacoor, Cavite) Tierra Nevada (General Trias, Cavite) Camella Pinecrest (Bacolod, City) Vista Heights (Quiapo,Manila) Worldwide Corporate Center (Mandaluyong City)
PROJECT

Georgia Club (Sta. Rosa, Laguna) Augustine Grove (Dasmariñas, Cavite) Camella Silang (Silang, Cavite) Camella Prima Butuan (Butuan City) Vista Brenthill (Baguio City) Starmall Alabang, (Alabang, Muntinlupa City)
Augusta (Sta. Rosa, Laguna) Ponticelli (Daang Hari ) Cerritos Heights (Daang Hari) Camella Taal (Taal, Batangas) Vista Suarez Cebu (Cebu City) Starmall San Jose del Monte (San Jose del Monte, Bulacan)
Crosswinds (Tagaytay City) Maia Alta (Antipolo, Rizal) Camella Dos Rios Trails (Cabuyao, Laguna) Camella Palawan (Puerto Princesa, Palawan) The Currency (Mandaluyong City) Vista Mall Daang Hari (Daang Hari)
Alpine Tower (Tagaytay City) Brescia (Commonwealth, Quezon City) Camella East Winds (Pillila, Rizal) The Crest at Gran Europa (Cagayan de Oro City) Vista Shaw (Mandaluyong City) Vista Mall Sta. Rosa (Sta. Rosa, Laguna)
DIVISIONAL INFORMATION

2018 2017 % Change 2018 2017 % Change 2018 2017 % Change 2018 2017 % Change 2018 2017 % Change 2018 2017 % Change

725.87 1,151.53 -37.0% Reservation Sales 1,337.10 1,500.58 -10.9% Reservation Sales 23,723.30 21,215.13 11.8% Reservation Sales 41,108.15 32,700.71 25.7% Reservation Sales 8,218.44 7,979.24 3.0% Reservation Sales — —
Reservation Sales
(in Php Millions)

Revenues 979.47 1,178.70 -16.9% Revenues 9,731.46 8,158.34 19.3% Revenues 15,358.13 13,090.68 17.3% Revenues 5,305.58 4,262.66 24.5% Revenues 6,285.70 5,297.20 18.7%
Revenues 481.44 903.98 -46.7%
Gross Profit 585.17 636.57 -8.1% Gross Profit 5,082.28 3,503.36 45.1% Gross Profit 8,084.13 7,613.18 6.2% Gross Profit 2,622.42 1,919.61 36.6% Gross Profit — —
Gross Profit 304.92 618.06 -50.7%
EBITDA 269.05 310.80 -13.4% EBITDA 3,621.89 1,951.87 85.6% EBITDA 5,296.11 5,299.19 -0.1% EBITDA 1,527.40 1,134.01 34.7% EBITDA 4,511.80 3,939.70 14.5%
EBITDA 194.21 234.94 –17.3%

4 VISTA LAND 2018 ANNUAL REPORT 5

 GROWTH CHART CORPORATE VALUES

Unrivalled nationwide presence in 146 cities and municipalities

Competitive Spirit
in 48 provinces across the Philippines Everyday, we step into the battlefield knowing we
are well-equipped.
We are a crack team. Better trained.
Better skilled. Better motivated.
The competition is there for two reasons:
1 Agusan del Norte To learn from and to knock out. Cost Consciousness
2 Agusan del Sur We owe it to ourselves to keep building muscle, Cost is not a question of numbers, but a
3 Aklan and we owe it to our question of value. It is not what we can cut out,
4 Albay customers to keep fighting. but what we can save on.
5 Bataan We are lean because we know athat success does
6 Batangas not depend on the number of people, but on the number
7 Benguet of ideas, and the brilliance of those ideas.
8 Bohol We are not cost conscious to increase our profit
9 Bulacan margins, but to guarantee that we have sufficient
10 Bukidnon resources for tomorrow.
11 Cagayan It is not just the cost to us that we
12 Camarines Sur
must concern ourselves
13 Camarines Norte
with, but the cost to our
14 Capiz
customers as well.
15 Cavite
16 Cebu Honesty
17 Compostela Valley We need to be trustworthy, and we need
18 Davao del Norte to be trusted.
19 Davao del Sur There must be integrity and reliability in
20 Guimaras
our word, and our character.
21 Ilocos Norte
22 Ilocos Sur Honesty necessitates dependability,
23 Iloilo fairness, probity,
24 Isabela and holding on to high principles.
25 Laguna It is the only way we can believe in each
26 La Union other and our customers
27 Leyte
can believe in us.
28 Masbate
29 Metro Manila
30 Misamis Occidental Closeness To Customers
31 Misamis Oriental Our future is wrapped up in our
32 Negros Occidental
customers — along with their dreams, their
33 Negros Oriental
hopes, their lives.
34 North Cotabato
We must become part of their community —
35 Nueva Ecija
36 Nueva Viscaya and their family.
37 Palawan What they need is as important as what we do.
38 Pampanga It is what drives what we do.
39 Pangasinan To them, we will always listen. From them,
40 Quezon we will always learn.
41 Rizal Teamwork They are the reason we exist.
42 Sorsogon
43 South Cotabato Synergy is one of a corporation’s greatest assets.
44 Tarlac The solitary genius is nice, but teams are stronger.
45 Western Samar We have a common goal, and we need each
46 Zambales other to get there.
47 Zamboanga Peninsula We have each other’s back.
48 Zamboanga del Sur We have the company’s back.

6 VISTA LAND 2018 ANNUAL REPORT 7

 CHAIRMAN’S MESSAGE

Dear Fellow Shareholders,

The idiom “We will not rest on our laurels” may sound cliché. It easily can, when given – and taken – at face
value. For us at Vista Land, however, our laurels are both a motivation and a commitment -- the essence
that keeps us going.

In 2018, Vista Land got 11 major industry citations.

We were named Agora Marketing Company of the Year by the Philippine Marketing Association; Best
Investor Relations Company by Corporate Governance Asia at the Asian Excellence Awards; Homebuilder of
the Year by APAC Insider at the Philippine Business Awards; one of the Top Ten Developers in the Philippines
at the BCI Asia Awards; Most Innovative Community Developer – Philippines at the International Finance
Awards; an Award of Excellence for "Buksan ang Bagong Bukas" by the International Association of Business
Communicators-Philippines at the Anvil Awards and a Silver Anvil from the Public Relations Society of the
Philippines. In addition, our Starmalls, Inc, was recognized as one of Asia’s Most Trusted Companies by the
International Brand Consulting Corporation, USA.

Our CEO, Manuel Paolo A. Villar was recognized as the Best CEO in the Philippines at the Asian Excellence
Awards, along with Mr. Brian N. Edang who was named Best Investor Relations Officer in the Philippines by
the same body. I was honored to be named the Property Man of the Year by FIABC Philippines at the Prix
d’Excellence Awards.

These awards and accolades serve as our inspiration, but I know that you all will agree that the best award
we can get are the smiles from our satisfied homebuyers. We have always judged ourselves on our ability
to fulfill every Filipino’s dream for a home in a well-planned integrated community. We can confidently say
that over the years, we have succeeded in accomplishing this as can be attested by the sustained growth
of our various businesses.

Our overall corporate and business strategy has been evolving through the years and we have stayed true
to our vision of providing not just houses but the Vista Land standard of living in homes situated in our
integrated Communicities across the Philippines. I thank all of you for sharing this vision and working with
us to achieve my personal target of delivering a million homes during my lifetime.

Along with our successful business performance in 2018, we have strengthened Vista Land’s position as a
company that cares and is a prime partner in national development.The care of our environment and the
various socio-economic development projects of VILLAR SIPAG remain the focus of our Corporate Social
Responsibility programs. Vista Land recognizes that it is part of a greater national and global community
and strives to do its share in alleviating adverse environmental conditions and contributing to a healthy
economic balance through its corporate social responsibility programs.

Create. Achieve. Excel. We have used these words to describe Vista Land’s winning culture. Our awards
and citations attest to the success of our efforts. In our quest to continuously improve our company, we
have made a commitment and a solemn promise to our countrymen. It behooves us to stay true to this
promise in our pursuit of excellence, thereby enabling Vista Land to be the paradigm for future generations
of Filipinos.

I thank all of you, our shareholders and stakeholders, and to all our employees at Vista Land, for your hard
work and support in moving towards the attainment of this goal.

Manuel B. Villar, Jr .
Chairman
8 VISTA LAND 2018 ANNUAL REPORT 9
 PRESIDENT’S REPORT

Dear Fellow Shareholders,

We started 2018 with optimism. We closed it with better than expected results and achievements.
A year ago, we anticipated that having greater access to low-cost, longer-maturity capital
with lower coupon rates will be the key to our evolution as a multi-use developer in a dynamic,
and demographic-driven real estate market.

True enough, growth in both our residential and leasing business, each fueled by different
factors but centered on the strong macro fundamentals of the Philippine economy resulted
in a robust demand. The residential market faces a shortage of quality housing stock and a
backlog of over 4 to 6 million units. Leasing is propelled by the steady growth in Filipinos’
disposable income and overseas Filipino remittances as well as infrastructure development.
Our stable financial position has allowed us to take advantage of these opportunities.

In summary, 2018 is another banner year for the company, we registered record performance
brought about by the better than expected growth of our residential business; sustained double
digit growth in our leasing portfolio where we ended the year with 1.4 million square meter of
gross floor area (GFA). We also saw some challenges during the year as inflation and interest
rate went up but having all of our existing debt at fixed rates, we have limited the impact to
only borrowings during the year. We also ended the year with a solid residential pipeline, with
over P50 billion worth of projects launched across the country.

I am pleased to report that our head line numbers registered mid-teens growth. Total revenue
was up 15% to P41.5 billion; Earnings before interest, taxes, depreciation and amortization
(EBITDA) reached P18.2 billion or 14% growth and as a result our net income grew 16% to a
record P10.5 billion.

Looking at some details, our consolidated total revenues grew 15.1 percent to P41.5 billion last
year from P36.0 billion in 2017 was brought about by the real estate revenues increasing by
15.4% to P31.9 billion and our leasing revenues ending the year with P6.9 billion or a growth of
15.2%. We have improved the gross margin of our residential sales to 52.4% from 51.8% a year
ago as we are able to sell at a premium especially in areas where Vista Land is the only national
housing brand that is available.

In terms of real estate revenue contribution per brand, Camella was 79% (of which 48% from
Communities Philippines or sales outside Greater Manila and 31% from Camella Homes, our
sales within Greater Manila), Vista Residences added 16% to the total while Crown Asia and
Brittany contributed 3% and 2%, respectively.
10 VISTA LAND 2018 ANNUAL REPORT 11
 PRESIDENT’S REPORT

FINANCIAL HIGHLIGHTS SUSTAINED RESIDENTIAL GROWTH

75.1 Sales
15% X 41.5B REVENUE 2018 48.6
31.8
64.5 Unbooked Revenue
14% X 18.2B EBITDA 2017
27.6
42.0

57.8 Revenue
16% X 10.5B NET INCOME 2016 36.6
25.0

REAL ESTATE CONTRIBUTION COMMERCIAL SPACE

2018 2017 ROLL OUT (SQM)
84:16
Mall vs BPO
Vista
Residences
Vista
Residences
80:20 79:21
16% Camella, 15% Camella, 79:21 Mall vs BPO
Mall vs BPO 1,404,762
BPO
31% Crown Asia 5% 30% Mall vs BPO
Crown Asia 3% 1,060,495
Brittanty 3% 631,073 882,009 MALLS and Retail Stores
Brittanty 2%
1,178,535
Comm. Phils., 834,268
Comm. Phils., 500,073 701,220
48% 47%
131,000 180,789 226,227 226,227

2015A 2016A 2017A 2018A

SEGMENT CONTRIBUTION With a sustained growth in our leasing portfolio, it now residential projects. We have to revise our target for
accounts for a significant portion of our operations. As reservation sales growth we set at the beginning of the
of end 2018 leasing segment now accounts for 17% of year of 12% to 15% to 17% when we saw second quarter
revenues, 28% of EBITDA and 24% of net income. pre sales to be stronger than the first quarter and was
83 % 17 % 72 % 28 % 76 % 24 % sustained in the remaining quarters of the year. Given
2018 REVENUE NET INCOME
EBITDA Rising purchasing power in the provinces, not just in the strong growth momentum of our sales we have
Metro Manila and first-tier provincial cities, has fuelled launched residential projects with an estimated project
the need for housing and incentives for real estate value of P51.7 billion mostly in the low and affordable
developers to establish a presence in less well-known segment and outside metro manila area. These projects
regions. Over 10m overseas Filipino workers whose will serve as a solid project pipeline for the coming
income is not correlated with the economic development years. We launched a total of 57 projects of which 45
83 % 17 % 72 % 28 % 76 % 24 % of their regions have provided the purchasing power for are in the low and affordable segment, 11 condominium
2017 REVENUE EBITDA NET INCOME
affordable or low-cost housing products in relatively projects and 1 project in the upper middle income
underdeveloped areas. Our reservation sales surged market. 39 of the projects were located in areas outside
16% to P75 billion, showing the strong demand for Metro Manila.
RESIDENTIAL LEASING
12 VISTA LAND 2018 ANNUAL REPORT 13
 PRESIDENT’S REPORT

On the commercial front, prospects are also very

good in the provinces due to strong consumption
PROJECT LAUNCHES DEBT PROFILE P238.3 billion in 2018. Cash and investments were at
P47.6 billion; Total receivables at P53.6 billion. By the
demand and increasing purchasing power, albeit from end of 2018 our real estate inventories and investment
a smaller base. Due to the lack of quality commercial LOW & AFFORDABLE Funding Sources properties stood at P41.9 billion and P73.9 billion
retail stock, the provinces offer massive growth areas respectively. Gross interest bearing debt by end of the
for the development of retail malls and facilities.
The challenge in establishing large commercial and
45 year amounted to about P118.8 billion and a net debt of
P71.1 billion. Debt to equity was 1.29 to 1.00 while our
residential centers in the provincial areas is inadequate 1 11 net debt to equity was at 0.77 to 1.00.
infrastructure which is being addressed by the
government’s drive to accelerate economic activities
31% 37% Looking at our debt profile, all of our debts have fixed
UPPER MID CONDOMINIUMS
and infrastructure development outside Metro Manila.

57
maturity interest rates; dollar-denominated debts are
fully-hedged on the principal and majority are maturing
We ended 2018 with 1.4 million sq.m. in GFA under our 15% 2022 and beyond. We have a diverse funding sources
leasing portfolio, with the additions to our malls of 17% with 37% of our total debts coming from bilateral loans;
344,267 sqm for the year. Our leasing business now Launched 31% from dollar bonds; 15% from peso corporate notes
projects with an estimated
covers 31 malls, 52 commercial centers, and seven and 17% from retail bonds.
total value of about P 51.7B
office buildings. We have exceeded our target GFA we Bank Loans
committed to investors when we acquired Starmalls in In one of my interviews, I said that Vista Land had a
Retail Peso Bond
2015. We were looking at ending 2018 with a GFA of 1.3 “good” year in 2018. On hindsight, I now realize how
million sqm from about 630 thousand sqm in 2015 and Corporate Note much of an understatement that was. We, all of us at
exceeding such by 100 thousand sqm to end 2018 with 1.4 LAND BANK LOCATION (in HAS) Vista Land, did GREAT in 2018!
million sqm. In terms of investment property type, 84% USD Bonds
of our GFA are retail malls and 16% office space. We Our efforts haven’t gone unnoticed by the industry and
will see sustained growth and increasing contribution
from our leasing business next year as we increase
occupancy of the malls added during the year.
41% Debt Maturity Profile
our peers. We received no less than 11 major industry
citations in 2018. Among these is the highly-coveted
Provincial Agora Marketing Company of the Year Award from the
Philippine Marketing Association.
Our land bank continues to be one of our greatest
strengths. By end-2018, we had more than 2,800
hectares, 59% of which are in Metro Manila and
8% As we move forward, I am confident that all of our
stakeholders will continue to share the vision of
the neighboring provinces of Cavite, Laguna, Rizal, our Chairman, Manuel B. Villar, Jr., in nation building
Batangas, and Bulacan. We are now present in 146 cities by providing quality, affordable and well-planned
and municipalities nationwide. Communicities around the country for present and
92% future generations of Filipinos .
For 2018 our operations entailed a capital expenditure
spent of P45 billion. We have spent P32.4 billion for
construction of both residential and commercial
projects; P5.7 billion to land development costs and
P6.9 billion for land acquisition.
59% Long Term
Manuel Paolo A. Villar, Jr .
Mega Manila- Metro Manila and Mega Manila President and Chief Executive Officer
Neighboring Provinces of Cavite, Short Term
We continue to maintain a strong balance sheet and Laguna, Rizal, Batangas and Bulacan
healthy financial ratios. Our total asset base rose to

14 VISTA LAND 2018 ANNUAL REPORT 15

 NUMBERS AT A GLANCE

Vista land , as one of the leading integrated property developers and the largest homebuilder Vista Land continues to benefit from the sustained demand from
in the Philippines, reaches new heights of success in the Philippine real estate industry with its Overseas Filipino Workers, as OFWs account between 50% to 60% of Vista
record performance in 2018. Its residential business posted better than expected growth while Land’s sales. OFW sales are basically end users. OFW remittances remain
its leasing portfolio continues to deliver in double-digit earnings growth. It remains the market stable which registered at $32.2 billion as of December 31, 2018.
leader in horizontal residential sector targeted towards end users with strong housing brand
recognition across the country and has well-implemented its expansion into mass market retail
malls and office space with its 1.4 square meter gross floor area (GFA) leasing portfolio.

Vista Land is the Philippines’ foremost homebuilder in

the horizontal market having built about 400,000
houses, with 45% of market in the house & lot
market. It has fostered strong brand recognition, with
its Camella, Crown Asia, Brittany and Vista Residences Vista Land has the widest geographically diverse portfolio, with unrivalled nationwide presence

brands being four of the most recognized brands in the in 146 cities and municipalities across 48 provinces in the Philippines. Vista Land’s landbank

Philippine real estate industry. In a survey by PSRC, is about 2,801.8 hectares – mainly situated in areas in close proximity to major areas and
Camella has a brand awareness of 99% -- similar to a primary infrastructure, of which 59% is located in Mega Manila.

“fast moving good” – which is not usual for a house and

lot brand that caters to a niche market. Vista Land has a strong and experienced management team with
an average of 25 years of sound operational and management
experience in real estate, particularly housing, mass market
retail and BPO markets.

VISTA

Vista Land is well positioned to benefit from

LAND
14

CONS &
OLIDAT LIFESCAPE
ED ST S, INC.
ATEM AND SU
ENTS BSID

Vista Land remains prudent, maintaining a favorable net debt to equity

OF FIN
ANCIAL IARIES
POSI TIO
N

favorable Philippine demographic, with almost

ASSE
TS

0.77x . The current gearing provides more flexibility on funding

Curre
nt
Cash andAssets
Short-te cash equ

ratio of
iva Decem
Av aila rm cash inv lents (Notes 2018 ber 31
ble-for-sa estme
Held-t le fina nts (No 9, 30 and 2017
o-m nci tes 10, 31)
Current aturity invest al assets

73% of the population aged 39 and below boosted

30 and
portion ments (No 31)
Receivab of: (Notes tes 10, 30 and P
= 20,022
10, 30 ,186,3
Contract les (Notes and 31) 31) 139,94 87 P = 11,494
assets 11, 30 2,752 ,511,4
Cost (No and 31) 345 42

strategy to support expansion plans.

Receivab to obtain con te 7) − ,63
6,491, 9,559
Real est les from rela tract (Note − 361,77
6
ted par 7) 8,133,
Other ate inventorie ties (No 21,849 258,59
2
curren s (Note tes 28, ,774,5

by low mortgage penetration at 3.4% compared to

t ass 14,456 01 35,

Vista Land through its subsidiary, Starmalls, a major

12) 30 and
Total Cu ets (Note 13) 31) ,428,2
16 355,75
rrent 747 0,913
Noncurr Assets ,48
Inv est ent Assets 4,706, 9,877 −
ments 908,26
41,946 6 −
Inv est at amorti ,86 4,987,
ments
at fair zed cost (No 6,012, 6,699 39, 930
(Notes tes 3, 109,88 527,034 700,02 ,489
Av aila 3, 10, value 10, 30 4,0 9,385
ble-for-sa 30 and 31) through oth 2,123,
and 31) 732 110 17,873,28
er com 4

its regional peers. The rising middle class bodes

Held-t le fina ,526,3

developer, owner and operator of mass market

o-m nci prehen 55,440
Receivab aturity invest al assets siv e inc 27,483
(No ,090,5
Contract les - net of ments (Notes tes 10, 30 ome 64
ass cur rent por 10, and 31)
Cost to ets 30 and
obtain - net of curren tion (Notes 31) 106,49
9,183 −
Projec
t dev elo contract - net t portion (No 11, 30 and
Proper pment of te 7) 31) −
ty and costs (No current por 121,58 −
Inv est equipm tion (No 8,481, − 13, 0,343
me ent (No te 16) te 7) 261,70 694,03
Goodw nt properties

well for the company, as GDP per capita in 2018

te 15) 8,853, 8 8,826, 0,855

retail malls and business process outsourcing (BPO)

ill (Note 547
Pension (Note 8) 14) 529,02 ,856 716,92
2
ass
Deferred ets (No
te 26) 4,465, 4,635 −
tax ass 254,16
Other ets - 1,613, 4 −
noncur 4,034,
rent ass net (Notes 6 73,930
945,66
0 282,86

$3,104.
ets (No and 27) ,638,9 6
Total No te 17) 147,27 58 59, 885,818,633
ncurre 2,020 101,36
nt Ass 213,26 0,671
ets

stood at
1,296 147,27

commercial centers, strengthens its position as one

846,68 2,020
87,
LIABIL 1,709, 0,663 660
ITIES
AND EQ 437,97 802,14 ,881
Curre 128,37 5 1,707, 5,997
UITY 9,9
nt
Accou Liabilities = 238,26 14,682 89,
P 506,43
7
nts 2,038, 408,37
Custome and other 414 P= 199,93 5,625
pay
Incom rs’ adv ances ables (No 4,731,
065
e tes 18,
Divide tax payable and deposi 30 and

of the top four integrated property developers in the

nds pay ts (No 31)
Current abl te 19)
portion e (Note 23)
Contract of: P
= 15,736
liabiliti ,89
Notes es (No 1,297, 0,359 P
pay 839,41 = 13,274,95
Bank loa able (Notes te 7) 44,362 8 3,617, 4,736
Loans ns (Notes 20, 21, 30 and 33,368
,283 888,80
3
payabl 30 31) ,139 53,215
Total Cu es (Notes 20,and 31) 28,959
,024
rrent Lia 30 and 1,617, ,615

Philippines. The Company’s current portfolio includes

(Forwa bilities 31) 322,39
rd) 4,760, 5
986,56
5,332, 3 −
822,50 60,890
336,72 9 3,620, ,732
29,160 6,340 352,95
,318,0 3
06 21, 644,355,649

31 strategically located malls, 7 BPO offices and

300,61
7,512

Vista land intends to focus on the development COMMUNICITIES , an integrated *SGVFS03

4680*

52 community centers. This brings Vista Land’s total urban developments combining lifestyle retail, prime office space, university town, healthcare,
GFA of commercial space to 1,404,762 square
themed residential developments and leisure components, and already identified
meters as of December 31, 2018.
24 innovative masterplanned communicities spread all over the country.
16 VISTA LAND 2018 ANNUAL REPORT 17
 REVIEW OF OPERATIONS
Market:
High-end
Offering:
House & Lot (Mega Manila)
Price:
Above Php12M
Real Estate Revenues
(in Php Million):
• Php 481.4 (2018)
• Php 904.0 (2017)
Revenue Contribution:
Brittany still is the standard when it comes to high end living with its • 1% (2018)
signature developments in Muntinlupa, Laguna and Cavite. Brittany is the • 3% (2017)
Group’s “most innovative” housing brand bringing house and lot packages
to the high end segments which are typically dominated by personalized
developments and the high end vertical projects. Brittany spells elegance
at is finest with its offerings - Italian inspired developments Portofino
and Amore; Southern American appeal Georgia Club and Augusta and the
Swiss-styled residences of Crosswinds and Alpine Villas.

With the shift of demand to the low and affordable market segment,
Brittany is faced with such challenge but it continued to sustain brand
building of its flagship developments. The Group believe that it is just
a matter of time when the demand would shift back to the high end
developments as we see continued rise of the Philippines’ middle class.
Having developed an expertise in luxury housing development, Brittany
will always be ready to expand once there will be a demand shift.

In 2018, Brittany registered P481.4million revenue coming from its

developments.

Crosswinds, Tagaytay

Portofino South, Vista Alabang

Portofino Heights, Vista Alabang

Promenade Eliot, Sta. Rosa

18 VISTA LAND 2018 ANNUAL REPORT 19
 REVIEW OF OPERATIONS
Market:
Middle - income
Offering:
House & Lot (Mega Manila)
Price:
Php 4M to Php 12m
Real Estate Revenues
(in Php Million):
• Php 979.5 (2018)
Presedio, Sucat • Php1,178.7 (2017)
Revenue Contribution:
• 3% (2018)
• 3% (2017)

Crown Asia is the group’s developments of choice for upper middle

market. The company operates on the philosophy that its buyers
deserve elegant, comfortable homes that reflect refined tastes,
inspired by the various themed architecture and design.

2018 was still the year of affordable housing market, but Crown
Asia held its ground and continued to promote its flagship
developments, namely: Ponticelli in Daang Hari, and Valenza in
Sta. Rosa, Laguna. As we see sustained growth momentum of the
country, Crown Asia is poised to take advantage of the potential
shift of demand in the future.

Crown Asia delivered P979.5million sales for year.

Valenza, Sta. Rosa

Franco, Model Unit Ponticelli, Daang Hari

20 VISTA LAND 2018 ANNUAL REPORT 21

 REVIEW OF OPERATIONS

For over 40 years of existence, Camella has been able to create a strong
brand position through its affordable pricing, excellent build quality,
ideal locations, and aggressive marketing campaigns. Camella, the Most
Preferred Brand among any housing brands in the country continues to
lead the way in sales, which accounts 31% of Vista Land’s real estate sales
in 2018.

Real Estate industry in the Philippines is becoming more and more

competitive by the day that’s why the Company makes sure to keep tract
of the ever changing needs and preference of the customers. In 2018, we
saw that the level of affordability of the customers were affected by
the inflation and increase in borrowing costs, thus, Camella created and
introduced housing packages that would match the level of affordability
of Camella’s target market, the L-Series which offers housing packages
from 1M to 1.8M or 36 sq.m to 50 sq.m. This move pushed the sales Market:
significantly over previous periods. Affordable
Offering:
House & Lot (Mega Manila)
Price:
Php 4M and below
Real Estate Revenues
(in Php Million):
• Php 9,731.5 (2018)
• Php 8,158.3 (2017)
Revenue Contribution:
• 26% (2018)
• 25% (2017)

22 VISTA LAND 2018 ANNUAL REPORT 23

 REVIEW OF OPERATIONS
Camella Tanza, Cavite Camella Quezon

Communities Philippines is the Group’s subsidiary that brings the

various housing brands to areas outside Metro Manila. Over last
5 years the Company have been carrying the Camella brand as the
group expands its presence around the country.

Communities Philippines has been the choice of housing for most

of our Overseas Filipino as we bring developments closer to their
hometown. In addition, we have seen infrastructure developments
favoring areas outside of Metro Manila which bodes well for the
Company.

Market:
All price points: Camella Brand
Offering:
House & Lot (Outside Mega Manila)
Price:
Php 4M and below
Real Estate Revenues
(in Php Million):
• Php 15,358.1 (2018)
• Php13,090.7 (2017) Gran Europa, Cagayan de Oro City
Revenue Contribution:
• 40% (2018)
• 40% (2017)

24 VISTA LAND 2018 ANNUAL REPORT 25

 REVIEW OF OPERATIONS

Avant, Makati

2018 was the year we saw a significant contribution to real estate

revenues coming from our vertical developments. The company
Market:
increased its real estate revenues by 24.5% to P5.3 billion which Low to High-end
accounted to 16% of the consolidated real estate revenues. Offering:
Vertical projects Price:
The key differentiator of Vista Residences against competition Php 1.9M to Php 16M
is location. It has established a strong foothold in high-density, Real Estate Revenues
student-oriented locations with the creation of its University (in Php Million):
Series, which includes Crown Tower along the University Belt in • Php 5,305.6 (2018)
Manila and Vista Pointe in Katipunan, to name a few. It also offers • Php 4,262.7 (2017)
developments that have quick access to key transit hubs through Revenue Contribution:
its Transit-Oriented Developments. The Company also has a • 14% (2018)
collection of exquisitely designed and skillfully engineered towers • 13% (2017)
servings as both residential homes and business headquarters
within the country’s central business districts being offered under
its The Prime Series.

26 VISTA LAND 2018 ANNUAL REPORT 27

 REVIEW OF OPERATIONS
Market:
Commercial
Offering:
Mass Market Retail

Rental Reveue
(in Php Million):
• Php 6,285.7 (2018)
• Php 5,297.2 (2017)
Revenue Contribution:
• 16% (2018)
• 16% (2017)

Starmalls provides majority of the group’s leasing revenues.

For 2018 Starmalls increased its rental revenue by 19.5% or
P6.3 billion. The group ended the year with 1.4 million square Vista Mall, Naga
meters of Gross Floor Area with the addition of 9 malls with a
GFA of 344 thousand.

Starmalls and Vistamalls provide the commercial components

to the Vista Land Communities. The new malls opened during
the year carries the distinct feature of the Vista malls that
carries state-of-the art cinemas, lifestyle oriented tenants
and a world class mall experience.

As of end 2018, the group has 31 malls, 7 office buildings and 52

Vista Mall, Daang Hari
commercial centers of investment properties.

Vista Mall, Sta. Rosa

Vista Mall,General Trias Vista Mall, Tanza

28 VISTA LAND 2018 ANNUAL REPORT 29

 Feature
“We from Vista Land & Lifescapes, Inc. would
not be here if we were not inspired by the same
passion, hard work, and undying brand love that
my father has continuously demonstrated and
given to us this past 40 years.” - Camille Villa r

2018 Agora Awards

Marketing Company of the Year
Vista Land & Lifescapes, Inc., a first-time category
nominee, took home the most coveted prize -- The Agora
Marketing Company of the Year Award -- at the 39th
Agora Awards of the Philippine Marketing Association
(PMA) held at the Okada Manila Grand Ballroom, Pasay
City on October 19, 2018.

Considered the most prestigious celebration of

marketing excellence in the country, the Agora Awards
have been honoring individuals and companies who
have done exceptional work in the field of marketing
for almost four decades. The Marketing Company of
the Year category is its highest level and the Award is
bestowed only upon a rigorous screening by the PMA of
nominees who are deemed best in their class based on
their past and current records.

Vista Land aggressively pursues its vision of helping

fulfill every Filipino family’s dream of owning a
home. As of 2018, it has built about 400,000 homes, in Vista Land Director and Managing Director of Vista Land
projects located across 48 provinces in 146 cities and Commercial Division, Ms. Camille A. Villar accepts the Agora
Marketing Company of the Year award for Vista Land.
municipalities all over the Philippines. Its commercial
leasing portfolio has grown to more than 1 million
square meters of gross floor area.
The 2018 Marketing Company of the Year award is a
“We from Vista Land & Lifescapes, Inc. would not be testament to the groundbreaking work that Vista Land
here if we were not inspired by the same passion, does to outpace all competition. With its companies
hard work, and undying brand love that my father has and brands boasting over four decades of industry
continuously demonstrated and given to us this past 40 leadership, Vista Land brings with it a proven track
years,” said Vista Land Director and Managing Director record in building complete communities through its
of Commercial Division Camille Villar as she paid tribute COMMUNICITY model - providing Filipinos with homes
to Vista Land Chairman Manny Villar who received the surrounded by modern work and lifestyle features
Agora Award for Outstanding Achievement in Marketing including retail complexes, leisure amenities, offices,
Management in 1989. schools, and places of remembrance and worship.
30 VISTA LAND 2018 ANNUAL REPORT 31
 Feature

Manuel B. Villar, Jr., Property Man of the Year IFA Most Innovative Community
FIABCI-Philippines Developer- Philippines
FIABCI Prix d'Excellence Award
Vista Land was named Most Innovative Community
The Property Man of the Year Award recognizes Developer - Philippines in the 6th International Finance
individuals whose contribution to the Real Estate Awards 2018 during ceremonies held at the Grand Hyatt
Industry of the Country satisfies the FIABCI ideal Erawan, Thailand last January 25, 2019.
of "providing society with the optimal solution to
its property needs".
The International Finance Awards (IFA) recognizes industry
talent, leadership skills, industry net worth and capability
FIABCI is the French acronym for "Federation
on an international platform. After careful consideration
Internationale des Administrateurs de Bien-
of nominations by a qualified research team, winners in
Conselis Immobiliers", which means "The
various categories are declared on the strength of their
International Real Estate Federation". FIABCI “The Most Innovative Community Developer award
application and past accomplishments.
represents the world's real estate professions conferred to us by the International Finance Awards is a
through its Special Consultative Status with the testament to the outstanding innovations we are doing in
Economic and Social Council of the United Nations. The IFA Real Estate Awards category honors excellence the Philippines -- like our Communicities,” said Vista Land
With chapters currently operating in more than in the Residential and Commercial property space in Chief Financial Officer and Head Investor Relations, Mr.
60 countries, FIABCI represents every discipline emerging markets. It cites real estate companies who Brian N. Edang. “This illustrious recognition propels us in
in the industry and links thousands of real estate strive to provide a relentlessly engaging and valuable Vista Land to continue in our constant pursuit of growth
professionals worldwide. experience for customers. and development.”

Best Investor Relations Company

Manuel Paolo A. Villar, Best CEO (Philippines)
Brian N. Edang, Best Investor Relations Officer (Philippines)
Corporate Governance Asia Asian Excellence Awards
The Asian Excellence Awards conferred by Hong Kong-based publication Corporate
Governance Asia are designed to recognize the achievements and excellence in
management acumen, financial performance, corporate social responsibility,
environmental practices and investor relations. This is the fourth consecutive year
the Vista Land won in these three major categories.

32 VISTA LAND 2018 ANNUAL REPORT 33

 Feature

Homebuilders of the Year

APAC Insider
Starmalls, Inc., Asia's Most Trusted Company 2018
The APAC Insider-Philippine Business Awards
International Brand Consulting Corporation, USA The APAC Insider-Philippine Business Awards recognize truly outstanding and innovative enterprises
Asia’s Most Trusted Companies Awards and business ventures, which have been instrumental in providing the best products and services in an
increasingly competitive business environment. Managed by the APAC Insider Magazine, the Awards
bring together firms who, through their commitment, enthusiasm, expertise and willingness to do things
differently, are rewriting their industry's rule book while achieving incredible results, both for their clients
Asia’s Most Trusted Companies and themselves.
Awards honor a company’s
innovation, international scalability,
differentiation and strategic “Ako Naman Ngayon”, Silver Anvil Award
investment in the Asian economy.
Hundreds of Asian companies are The Public Relations Society of the Philippines
evaluated by the International Brand
Consulting Corporation, USA and the
The 2018 Anvil Awards
top 50 winners are selected based on Camella’s 2018 video campaign bagged the Silver Anvil during the 54th
an Asia wide quantitative qualified Anvil Awards. “Ako Naman Ngayon”, an inspiring tribute to the families of
consumer survey, expert analysis and Overseas Filipino Workers (OFWs), was recognized as an excellent public
attributes-based qualitative brand relations tool in capturing the interest of potential millennial home buyers
research. while celebrating the perseverance of OFWs -- Camella's primary market.

Presented annually by the Public Relations Society of the Philippines,

the ANVIL is the symbol of excellence in public relations. It is awarded to
outstanding public relations programs, tools and practitioners after careful
screening by select PR professionals and judging by a distinguished multi-
sectoral jury. The Bronze, Silver and Gold Anvil Awards are given to the best
Top Ten Developers 2018 (Philippines) programs and tools that meet the highest standards set in each category.

BCI Asia Among the most coveted awards for Asian building "Buksan ang Bagong Bukas", Award of Excellence
BCI Asia Awards design and industry, the BCI Top Ten Awards
recognize the ten leading design and development International Association of BusinessCommunicators Philippines
enterprises that are shaping the built environment Philippine Quill Awards
of tomorrow and their impact on society and the
environment. The annual awards are held in seven
Asian territories—Hong Kong SAR, Indonesia, The Philippine Quill is the country’s most prestigious awards program in the field
Malaysia, the Philippines, Singapore, Thailand of business communication. It bestows the seal of approval to the most reputable
and Vietnam. The BCI Media Group is the leading organizations and corporations that use excellent communication to achieve business
provider of building and construction information goals, and to make a difference in society.
across the Asia Pacific region with 20 offices
across 10 countries and reporting on construction The Quill Awards are given annually by the International Association of Business
projects across 13 countries. Communicators (IABC) Philippines, the national professional association of top
business, industrial and organizational communicators. Established in 1983, it is the
first chapter of IABC outside North America.
34 VISTA LAND 2018 ANNUAL REPORT 35
 Feature

Vista Malls: Achieving the Ultimate

Philippine Mall Experience
Vista Malls have become a byword in terms of destinations of choice for shopping,
leisure and entertainment. With 31 Malls, 52 commercial centers and 7 BPO Offices,
Vista Land’s growth in the mall business make a significant contribution to total
Group revenues. But more than just a profitable business, Vista Malls give life to
Vista Land’s vision of integrated COMMUNICITIES.

Evia, Vista Alabang

Starmall, Alabang Vista Mall, Bataan AllHome, Kawit

StarMall, EDSA Shaw

36 VISTA LAND 2018 ANNUAL REPORT 37

 Feature

Starmall, EDSA Shaw Starmall, Las Piñas

Vista Mall, Taguig Starmall, Las Piñas Annex Vista Mall, Iloilo Vista Mall, General Trias
StarMall, EDSA Shaw

38 VISTA LAND 2018 ANNUAL REPORT 39

 Feature

Village Center, Antipolo by Vista Malls Vista Mall, Tanza Vista Mall, Sta. Rosa The Coffee Bean & Tea Leaf, Crosswinds Tagaytay

VistaMall, Sta. Rosa

AllHome, C5 Extension Las Piñas Starmall, San Jose Delmonte Vista Mall, Naga

AllHome, Libis Quezon City Cafe Voi La AllHome, Antipolo AllHome, Imus

40 VISTA LAND 2018 ANNUAL REPORT 41

 Feature

Vista Mall, Pampanga Vista Mall, Daang Hari

Boardwalk Lakefront 515 Shaw Lakefront, Sucat

42 VISTA LAND 2018 ANNUAL REPORT 43

 Feature

VISTA RESIDENCES:
A DECADE OF IDEAL URBAN LIVING

Group studies are now more fun at Vista Taft.

Metro Manila’s skyline has continually changed due to the high urbanization and
rapid development of residential and commercial properties. Growing population,
worsening traffic, increasing number of foreign investors and tourists have raised
the demand for vertical developments – a challenge being met by Vista Residences,
the condominium development arm of Vista Land.

Since 2009, Vista Residences has provided hundreds of families, professionals

and students the opportunity to live the ideal urban lifestyle with condominium
developments that cater to their specific needs.

Vista Residences are utilized for end-use or investments. Depending on location,

the properties can be used as modern family homes, initial abodes for young Studio unit
professionals, learning nests for students, even vacation getaways.

44 VISTA LAND 2018 ANNUAL REPORT 45

 Feature

Gym

Study area. Have great tasting coffee with friends without leaving your condo home.

Multiple unit options -- studio, one-bedroom, two- It is a short walk to and from the universities, easily on Nepomuceno Street corner C. Aguila in Manila, Vista Shaw caters to an upscale market in search
bedroom and three-bedroom – along with amenities and accessible to public and mass transport and close to near San Beda College, Centro Escolar University and of a relaxing lifestyle in a highly urbanized setting.
facilities designed for multiple interests and activities, major commercial, leisure and historical landmarks. La Consolacion College. It stands out from the other It has immediate access to Shangri-La Plaza Mall,
allow residents to sustain a comfortable and active cramped and crowded student residential options SM Megamall, Star Mall, as well as the busy Shaw
lifestyle. As the actual clients of Vista Taft are the parents of common in the area. Vista Heights has a wide frontage MRT Station and EDSA thoroughfare. It is also near
the students, security is a prime feature. As with other easily accessible via public transport. Other features major medical institutions Lourdes Hospital, Medical
“Vista Residences make the difference between developments in the University Series, Vista Residences include An All Day Convenience Store and Coffee City and Cardinal Santos Hospital; and schools La
subsistence and true, existential experience,” said Karl Taft has CCTV and round-the-clock security. The Project, a fully-equipped gym and study hall, and a roof Salle Greenhills, Xavier School and the Immaculate
Tabucal, Vista Land International Sales Head. “We not studio and one-bedroom units are designed to create deck that holds the multi-purpose function room and a Concepcion Academy. The ground floor caters to
only want our owners to love their units but also to be a conducive environment for studying and relaxation. meditation garden. several commercial establishments — a casual dining
proud of where they live.” Standard amenities include a swimming pool and outlet, two coffee shops, and a convenience store.
lounge, a study and library area, an outdoor rooftop Vista Shaw is located on Shaw Boulevard in Mandaluyong
The Vista Residences University Series meet the demand garden and a function room. Four high speed elevators City, in the site of the residence of former President Vista Residences recently launched four developments
for high-quality, comfortable yet affordable housing serve the residential and amenity floors. Jose P. Laurel. Its historic location is matched by Vista within the University Belt, a cosmopolitan building
near and around educational institutions, particularly Shaw’s grand and opulent design with strong influences within the Ortigas Business District in Pasig, a mixed-
in Metro Manila. At the Ground Floor, Vista Taft features a fully-loaded of old world charm and grace. The wide driveway opens use complex in Malate, a vacation sanctuary in Baguio
All Day Convenience Store, a Coffee Project outlet and up to a high-ceilinged lobby reminiscent of golden era and a residential address along Timog Avenue and Tomas
Vista Residences Taft, a 39-storey mixed-use premium an automated utility and bills payment kiosk. architecture. Sandstone claddings give the building an Morato in Quezon City. Another twenty-one projects
development located along Taft Avenue is now home to imposing image of strength and stability. The amenities with over 31,000 units and valued at P60B are set to be
many students of De La Salle University Manila, De La Like Vista Residences Taft, Vista Heights is surrounded are in the roof deck: gym, function room and the announced in the next three years.
Salle College of St. Benilde, St. Scholastica’s College by some of the country’s most prominent colleges and swimming pool overlooking one of the most notable
Manila, Adamson University and other nearby schools. universities. An eight-storey, mid-rise, it is located golf courses and country clubs in the country and the
Metro Manila landscape.
46 VISTA LAND 2018 ANNUAL REPORT 47
 CORPORATE SOCIAL RESPONSIBILITY

Villar SIPAG:
The CSR arm of Vista Land
The Villar Social Institute for Poverty Alleviation and Governance or Villar SIPAG is the Corporate Social
Responsibility (CSR) arm of Vista Land. It was established through the efforts of Vista Land Founding
Chairman Manuel B. Villar, Jr., and his wife, Senator Cynthia A. Villar, to help empower Filipinos to
overcome poverty in all its forms and manifestations.

It is anchored on ‘sipag’ or hard work coupled with ‘tiyaga’ or perseverance, which are values that the
Villar family holds in high regard in themselves and in other people as well. There are the same values
that they believe can uplift the lives of Filipinos.

Villar SIPAG’s key advocacies are livelihood generation, jobs creation, environment protection,
assistance to overseas Filipino workers (OFWs), development of community enterprises, church-
building, agricultural training through the Villar Farm Schools, and recently construction training
schools to address the shortage of skilled workers in the construction sector.

When it comes to awards and achievements, Villar SIPAG is both a recipient of many and an award-
giving organization, too. It has been recognized for its programs and projects over the years. Likewise,
in its aim to encourage the participation and involvement of individuals and groups in its poverty
reduction initiatives, Villar SIPAG has been giving out awards year in year out as well.

Villar SIPAG Awards on Poverty Reduction

Villar SIPAG recognizes outstanding community is held every December and each of the most In 2018, there were 22 outstanding cooperatives who They help bridge the gap between communities
enterprises from all over the country through the outstanding community enterprises receives were awarded for their significant contributions in and the government. They complement the efforts
yearly Villar SIPAG Awards on Poverty Reduction. a plaque and P250,000 in cash prizes. The poverty reduction and economic growth in their of the local government units and the national
winners are selected for their effectiveness, respective communities. Cooperatives play an government. They deal directly with affected
Nominations for the award are accepted from significance, financial viability, sustainability important role in the government’s continued fight families to improve the quality of their lives.
eligible community-based enterprises from Luzon, and adaptability. against poverty.
Visayas and Mindanao. The awarding ceremony

48 VISTA LAND 2018 ANNUAL REPORT 49

 CORPORATE SOCIAL RESPONSIBILITY

The recipients of the 2018 Villar SIPAG Awards on Poverty Reduction are:

1. Kapatiran-Kaunlaran Foundation Inc. of NCR;

2. Mission to Seafarers Philippines Family Network of NCR;
3. Piwong Multipurpose Cooperative of Ifugao;
4. Sarrat Namnama Multipurpose Cooperative of Ilocos Norte;
5. San Fabian Pangasinan Council of Women Inc. Multipurpose Cooperative of Pangasinan;
6. Magapuy Farmers Multi-Purpose Cooperative of Nueva Vizcaya;
7. Nueva Ecija Seed Grower Multipurpose Cooperative;
8. St. Jude Multi-Purpose Cooperative from Quezon Province;
9. Kabalikat Para Sa Diyos at Bayan Multi-Purpose Cooperative from Romblon; The youth (with age ranging from 15 to 29) a key component in the growth and development of the Philippines. Villar SIPAG encourages them to get
involved in poverty reduction efforts.
10. Labo Progressive Multi-Purpose Cooperative from Camarines Norte;
11. Pavia Entrepreneurs Multi-Purpose Cooperative from Iloilo,
12.
13.
Compostela Market Vendors from Cebu;
Santa Barbara Katilingbanong Credit Cooperative from Siquijor; Villar SIPAG Youth Poverty Reduction Challenge
14. Maripipi Multi-Purpose Cooperative from Biliran;
15. Aurora Integrated Multi-Purpose Cooperative from Zamboanga del Sur; Villar SIPAG launched the Villar SIPAG Youth Poverty 6. Tigbao 4H Club
Reduction Challenge on September 2016. It is a friendly 7. Youth First Initiative Philippines, Inc.
16. Malinao Community Services Multi-Purpose Cooperative from Lanao del Norte;
competition among Filipino youth and their social 8. Youthlead Philippines, Inc.
Pantukan Chess Club Cooperative from Compostela Valley;
enterprises or community organizations that help 9. Monteverde 4H Club
17. Davao Oriental Seed Producers from Davao, 10. New Leyte National High School 4H Club
alleviate the poverty situation in the country.
18. City Food Terminal Multi-Purpose Cooperative from General Santos City;
19. Kankitap Consumers Cooperative from Sulu. The youth are a key component in the growth and The Youth Poverty Reduction challenge is open to
development of the Philippines. They comprise 27 16 to 29 year-old college students, out-of-school
percent of the Philippine population. As such, they have youth, young professionals, social enterprise groups,
one of the highest potentials in breaking the cycle of young entrepreneurs, youth organizations and other
Two community enterprises were given Special Villar SIPAG also publishes a book containing the community organizations. The social enterprises must
inter-generational poverty.
Awards of P150,000 each for their poverty reduction success stories of the yearly winners to inspire have at least two youth members and must have been in
initiatives. These were the Bohol Dairy Cooperative and empower others. It also provides trainings That is among the driving forces why Villar SIPAG is operation for a minimum of one year.
and the Tarlac Okra Growers Primary Multi-Purpose and workshops to the people running the award- engaging the youth through the yearly competition.
Cooperative. winning community enterprises. It aims to inspire and empower the youth to really be The focus of social enterprises should be on food or
the change that they want to see and not to be mere agricultural products, recycling waste materials or
agricultural waste products; green or environment-
The winners in the 2nd Villar SIPAG Youth awards bystanders as changes unfold around them. Instead, be
change-makers. friendly inventions or technology; water/waste/energy
10 outstanding youth groups (seated from L-R): Rayjand Gellamucho - Youth first initiative Philippines Inc., Ma. Arlene P. Toledo - Tigbao solutions; rural and urban innovations, information
4th Club 3, Rafael Dionisio - The circle hostels tribes and treks and the plastic solution, Reymark P. Marcos- Monteverde 4-H Club, Kyle Ten (10) Most Outstanding Social Enterprises with technology and livelihood development.
Isaac Tan Kua - Adopt A Barangay, Metodia B. Maraguinot- Youthlead Philippine, Brian Justin E. Sta Ana - Gubat Young Farmers Association,
Gil Anthony Lafuente- Soldiers of God, Crisner Lagazo-Sulbec 4H Club, Pasuquiz, Ilocos Norte and Jay S. Cutanda- New Leyte National High existing poverty alleviation programs are chosen as
School 4th Club. Also in the photo are (Standing L-R): Justice Usec, ex-Rep. Em Aglipay Villar and daughter Emma Therese Villar, Camille winners every year and provided with P150,000 each. The Each entry will go through rigid evaluation,
Villar and son Tristan, Sen. Cynthia Villar and former Senate President Manny Villar. The Villar SIPAG Youth Poverty Reduction Challenge winners were selected from among the 150 nominees comprehensive screenings and rational project defense.
recognizes outstanding youth organizations for their unique and innovative solutions and undertakings to address in poor communities. from all over the country. The winners in 2018 are as Entries will be judged and selected by a panel of social
follows: entrepreneurs and socio-civic specialists. The criteria
for judging are: originality and uniqueness of the entry,
1. Soldiers of God 25%; adaptability and flexibility in adapting to any
2. Sulbec 4H Club given community situation, 25%; sustainability, 25%;
3. The Circle Hostel: Tribes & Treks, and The and community upliftment or the ability of the social
Plastic Solution enterprise to improve the condition of the poor and
4. Adopt-A-Barangay: Brgy. Puray, Rodriguez, Rizal disadvantaged communities, 25%. Social enterprises
5. Gubat Young Farmers Association must creatively demonstrate how they have solved or
will solve the poverty problem in their communities.
50 VISTA LAND 2018 ANNUAL REPORT 51
 CORPORATE SOCIAL RESPONSIBILITY

Championing Clean Water & Environment

One of the most memorable and cherished awards
received by the Villar Social Institute for Poverty
Alleviation and Governance (Villar SIPAG) was the
United Nations (UN) Water for Life Best Water
Management Practices, which was given during
World Water Day celebration in 2011. It was even
received by Vista Land Chairman Manny Villar and
Senator Cynthia Villar in Zaragosa, Spain. Villar
SIPAG’s river rehabilitation program (Sagip Ilog)
bested 38 countries.

Seven years after, Villar SIPAG once again

received recognition during the 2018 World
Water Day celebration. Senator Cynthia Villar Villar SIPAG’s Sagip-Ilog Program bested similar programs
received the “Kampeon ng Katubigan” award for from 38 countries
unrelenting efforts in saving bodies of water
including the Manila Bay and the Las Piñas Zapote Then, until now, water-related problems persist
River. The award was given by the Department of in many parts of the Philippines and worldwide
Environment and Natural Resources—National in fact. According to the World Economic Forum,
Capital Region (DENR-NCR) and the Manila Bay water crisis that includes water scarcity, flooding
Site Coordinating Management Office. and pollution remain the biggest threats to global

economy. Thus, it is a must to continue and even livelihood generation for poor communities and
intensify efforts to protect waterways and bodies of solving the problem of wastes, especially those
water to ensure they are safe, clean, and healthy for reaching and polluting waterways and bodies
the people’s own safety, health and survival. of water. Villar SIPAG conducts regular coastal
“Kampeon ng Katubigan” award for unrelenting efforts in saving bodies of water including the Manila Bay and the Las Piñas Zapote Bay
cleanups in Manila Bay, Las Piñas Parañaque
River. The award was given by the Department of Environment and Natural Resources-National Capital (DENR-NCR) and the Manila Bay Site Thus, environment protection remains an important Wetland Park, Baseco in Tondo and other areas all
Coordinating Mangement Office. aspect of Villar SIPAG’s advocacies, especially in over the country.

52 VISTA LAND 2018 ANNUAL REPORT 53

 CORPORATE SOCIAL RESPONSIBILITY

DENR Recognition for Manila Bay Cleanup

Senator Cynthia Villar received from Department of Environment and Natural Resources a plaque of appreciation in recognition of the senator's work in
the clean up and rehabilitation of Manila Bay. Environment protection is a key advocacy of Villar SIPAG

Environment protection is among the key advocacies Villar SIPAG also conducts similar activities in Tondo,
of Villar SIPAG. It is active in the regular cleanup Manila. On a monthly basis, clean-up drive and
and continuous rehabilitation of Manila Bay. Villar mangrove-planting activity are also held at Barangay
SIPAG’s managing director Senator Cynthia Villar was 649 Gasangan in order to inculcate cleanliness and
recognized by the Department of Environment and environmental protection to the residents. BFAR and
Natural Resources (DENR) for “her unwavering support Cavitex provide the seedlings.
and relentless effort in championing the Manila Bay
Rehabilitation cause.” Toilet facilities were also built for the residents to
stop the practice of open defecation, which pollutes
Villar SIPAG has ongoing projects in Manila Bay that the waters of Manila Bay. Villar SIPAG addressed a most
serve as models in cleaning the area. These include the basic sanitation and hygiene requirement. Communal
Las Piñas-Parañaque Wetland Park where a monthly septic tanks were built and 5,000 toilet bowls will be
coastal cleanup and tree planting activity are held. distributed in tranches to households.

54 VISTA LAND 2018 ANNUAL REPORT 55

 CORPORATE SOCIAL RESPONSIBILITY

Building Up Skills of Construction Workers

To complement the Build Build Build program of the government On top of those mobile schools, Villar SIPAG also established
and to ensure that more Filipinos will benefit from it, Villar SIPAG five physical schools located in Cavite, Bulacan, Cagayan
is helping in the efforts to train skilled construction workers. de Oro, Iloilo and Davao. The Technical Education and Skills
Development Authority (TESDA) provides the trainors.
The government needs to increase its number of newly-trained
construction workers by an average of 30,000 per year to meet The trainees are also assisted by Villar SIPAG to get
increasing demand. According to the Department of Labor and employment after undergoing one and a half months of
Employment (DOLE), the construction industry would continue training. To date, construction trainees from Baseco, Tondo
to generate thousands of jobs up to 2022. Vista Land alone needs have been deployed in one of Vista Land’s construction sites
15,000 construction workers yearly. in Calamba. They stay in on-site dormitories during working
days and go home to their families on weekends.
Villar SIPAG is bringing construction training courses to the
communities via ten mobile construction schools that can be
deployed to different areas in the country to teach courses on
masonry for men and painting for women.

The Construction School will not only provide

employable skills to trainers, it will also help
address the need for skilled workers in the
real estate & construction industry.

56 VISTA LAND 2018 ANNUAL REPORT 57

 CORPORATE SOCIAL RESPONSIBILITY

Continuing Support to OFWs & Their Families

Villar SIPAG has been consistent in providing assistance to Family Summit, like the previous ones, was attended by OFWs
Overseas Filipino Workers (OFWs), who hold a special place in and their beneficiaries, such as spouse, children, parents or
Founding Chairman Manuel B. Villar Jr.’s heart. The first ever siblings. The theme for 2018 was “OFW: Perang Pinaghirapan,
customer of Camella Homes was seafarer Emil Magtibay and Palaguin”.
until now, a significant number of homebuyers of Vista Land are
OFWs. Experts were invited to discuss various subjects such as
financial literacy; business start-ups and financing facilities;
Villar SIPAG’s assistance to OFWs and OFW returnees includes new business opportunities such as farming, franchising and
repatriation of distressed OFWs; medical/financial assistance; online selling; career development program; and OFW-turned-
livelihood assistance; skills-up training on employable skills entrepreneur success stories.
such as housekeeping, commercial cooking and bartending;
workshops or symposia on relevant topics such as financial The summit also features exhibits or booths of various
literacy, how to avoid investment scams among others; and the enterprises to give OFWs and their families, options or ideas on
yearly OFW and Family Summit. how to start their own businesses. The highlight of the summit
is the raffle draw with big prizes including grocery packages
Vista Land is the principal sponsor the yearly OFW and Family from AllDay Supermarket and the grand prize of a house and
Summit, which was launched in 2011 to help displaced OFWs or lot from Camella Homes, this year’s winner was Edmundo C.
returnees re-establish themselves as productive members of Enguero of Cabuyao City Laguna, an OFW from Qatar.
Philippine society through entrepreneurship. The 8th OFW and

Senator Cynthia A. Villar and Vista

Land Director Camille Villar led
the ribbon-cutting ceremony
during the opening of the 8th OFW
and Family Summit 2018 at the
World Trade Center in Pasay City.
The summit aims to provide our
OFWs and their family the tools
to guide them in protecting their
hard-earned money and savings
to ensure a better future. The
senator was joined by (L-R) Engr.
Albert Paredes, Pasay Mayor Tony
Calixto COS, Trade Sec. Ramon
Lopez, Pasay Rep. Emy Calixto-
Rubiano and Fr. Anton Pascual of
Radio Veritas.

58 VISTA LAND 2018 ANNUAL REPORT 59

 CORPORATE SOCIAL RESPONSIBILITY

Festivals
Villar SIPAG also supports various festivals that do not
only celebrate the rich history and colorful culture of the
place but also highlight the Filipinos’ talents, enterprising
spirit, artistry and concern for the environment.

Yearly Festivals: Chorale Festival (April), Food Festival (May), Water

Lily Festival (July) and Parol Festival (December)

60 VISTA LAND 2018 ANNUAL REPORT 61

 CORPORATE GOVERNANCE T. Coloma, and Ruben O. Fruto. This committee formulates This committee is responsible for the oversight of the
screening policies to enable the committee to effectively Corporation’s Enterprise Risk Management system to
review the qualification of the nominees for independent ensure its functionality and effectiveness.
directors; and conducts nominations for independent
directors prior to the stockholders’ meeting in accordance Related Party Transactions Committee. The Related Party
with the procedures set forth in Rule 38 of the Amended Transactions Committee is composed of three (3) non-
The Vista Land "Manual on Corporate Governance," which Independent Directors) in order that no Director or small Implementing Rules and Regulations of the Securities executive members, two (2) of which are Independent
was formalized in March of 2007, guides the Company's group of Directors can dominate the decision making Regulation Code, as the same may be amended from time Directors: Chairman Ruben O. Fruto, Frances Rosalie T.
strategies towards management and investor relations. It process. to time. Coloma, and Marilou O. Adea. This committee is tasked
ensures that the Company and its employees adhere to set with reviewing all material related party transactions of
standards and ethics, and requires regular assessments The Non-executive Directors should possess such Compensation and Remuneration Committee. Three (3) the Corporation.
and benchmarking. The Governance Code evolves to adapt qualifications and stature that would enable them to Directors comprise the Compensation and Remuneration
to changes within the organization and the industry. participate effectively in the deliberations of the Board. Committee, one of whom is an Independent Director: Management
Chairman Manuel Paolo A. Villar, Camille A. Villar, and
The Vista Land Governance Code Chairman Marilou O. Adea. This committee establishes the formal and Management is primarily responsible for the day-to-
transparent procedure for developing a policy on executive day operations and business of the Company. The annual
Board of Directors The Chairman of the Board, and President and Chief remunerations, and fixing remuneration packages compensation of the Chairman, CEO, and the top five
Executive Officer have been separated to ensure balance of Corporate Officers and Directors. It also provides (5) Senior Executives of the Company are set out in
The Board of Directors (the "Board") shall be primarily of power, increased accountability, and better capacity oversight over remuneration of senior management and the Definitive Information Statement distributed to
responsible for the governance of the Corporation. In for independent decision making by the Board. other key personnel, ensuring that compensation is Shareholders.
addition to setting the policies for the accomplishment of consistent with the Corporation's culture, strategy, and
corporate objectives, it shall provide independent checks Board Performance control environment. Compliance Monitoring
on Management. The term "Management," as used herein,
shall refer to the body given authority by the Board to The Board holds regular meetings. To assist the Directors Audit Committee. The Audit Committee is composed of The Compliance Officer is responsible for monitoring
implement the policies it has laid down in conducting of in the discharge of their duties, each Director is given three (3) members, two (2) of which are Independent compliance by the Company with the provisions and
the business of the Corporation. access to the Corporate Secretary and Assistant Corporate Directors: Chairman Marilou O. Adea, Cynthia J. Javarez, requirements of good Corporate Governance.
Secretary, who serve as counsel to the Board and at the and Ruben O. Fruto. This committee assists the Board in
Composition same time communicate with the company shareholders providing oversight for the financial reporting process, On May of 2017, the Board of Directors amended its "Manual
and investing public. system of internal control, audit process, and monitoring of Corporate Governance" in compliance with the revised
The Board shall be composed of at least five (5), but not of compliance with applicable laws, rules, and regulations. code of Corporate Governance issued by the Securities and
more than fifteen (15) members who are elected by the Board Committees It also provides oversight over Management's activities Exchange Commission.
stockholders, and at least two (2) Independent Directors in managing credit, the market, liquidity, operations,
or such number of Independent Directors that constitute To comply with the principles of good corporate legal, and other risks of the Corporation. This includes Annual Corporate Governance Report
twenty percent (20%) of the members of the Board, governance, the Board created six (6) Committees. regularly receiving information on risk exposures and risk
whichever is lesser but in no case less than two (2). management activities from Management. In compliance with SEC Memorandum Circular No. 15
Nomination Committee. Three (3) Directors comprise the Series of 2017, the Company submits an Integrated Annual
The membership of the Board may be a combination of Nomination Committee, one of whom is an Independent In compliance with SEC Memo Circular No. 4 series of 2012, Corporate Governance Report (I-ACGR) to the Securities
Executive and Non-executive Directors (which include Director: Chairman Manuel B. Villar, Jr., Frances Rosalie the Board approved and adopted the Audit Committee and Exchange Commission and Philippine Stock Exchange
Charter. The Audit Committee will hereafter meet to every year. This report shall contain the Company’s
assess its compliance with the aforementioned SEC Memo compliance/ non-compliance with the recommendation
In 2018, the Board held 15 meetings. The record of attendance is indicated in the chart below: Circular. provided under the Code of Corporate Governance for
publicly-listed companies (PLCs).
Board Meeting Attendance
Corporate Governance Committee. The Corporate
Governance Committee is composed of three (3) members, http://www.vistaland.com.ph/corporate_governance.php
Jan Jan Feb Mar Apr May May Jun Jul Aug Sep Sep Nov Nov Dec
two (2) of which are Independent Directors: Chairman
Director's Name 10 29 26 27 16 09 28 18 11 10 28 30 05 13 03 Ruben O. Fruto, Manuel B. Villar, Jr., and Marilou O. Adea. Website
Manuel B. Villar, Jr. P P P P P P P A P P P P P P P This committee assists the Board in the performance of
its corporate governance responsibilities. It shall also Up-to-date information on the Company's corporate
Manuel Paolo A. Villar P P P P P P P P P P P P P P P be tasked with ensuring compliance with and proper structure, products and services, results of business
Cynthia J. Javarez P A P P P P P P P P P P P P P observance of corporate governance principles and operations, financial statements, career opportunities,
practices. and other relevant information on the Company may be
Camille A. Villar P P P P P P P A P P P P P P P
found on its official website: www.vistaland.com.ph.
Frances Rosalie T. Coloma P P P P P P P P P P P P P P P Board Risk Oversight Committee. The Board Risk Oversight
Committee is composed of three (3) members, two (2) To view the Manual on Corporate Governance please refer
Marilou Adea P P P P P P P P P P P P P P P
of which are Independent Directors: Chairman Marilou to the link below.
Ruben O. Fruto P P P P P P P P P P P P P P P O. Adea, Manuel Paolo A. Villar, and Ruben O. Fruto. http://www.vistaland.com.ph/corporate_governance.php
Legend: (A) Absent, (P) Present
62 VISTA LAND 2018 ANNUAL REPORT 63
 BOARD OF DIRECTORS

Manuel B. Villar, Jr. Manuel Paolo A. Villar Cynthia J. Javarez Camille A. Villar
Chairman of the Board Vice Chairman of the Board and President & Director and Chief Operating Officer Director and Managing Director,
Chief Executive Officer Vista Land Commercial

Frances Rosalie T. Coloma Ruben O. Fruto Marilou O. Adea Gemma M. Santos

64 VISTA LAND Director Independent Director Independent Director Corporate Secretary
 BOARD OF DIRECTORS

Manuel B. Villar, Jr. Chairman of the Board. Mr. Villar, 69, was Senator of the Frances Rosalie T. Coloma, Director. Ms. Coloma, 56, graduated cum laude from the
Philippines from 2001 to June 2013. He served as Senate President from 2006 to University of the Philippines with the degree of Bachelor of Science in Business
2008. He also served as a Congressman from 1992 to 2001 and as Speaker of the Administration and Accountancy. She is a Certified Public Accountant. She was
House of Representatives from 1998 to 2000. A Certified Public Accountant, Mr. previously the Finance Manager of Alcatel Philippines, Inc. and Intel Philippines,
Villar graduated from the University of the Philippines in 1970 with the degree Inc., Country Controller of Ericsson Telecommunications Philippines, Inc., and
of Bachelor of Science in Business Administration and in 1973 with the degree Deal Finance Manager of Accenture Delivery Center, Philippines. She was also
of Masters in Business Administration. He founded Camella Homes in the early the Assistant General Manager of Maersk Global Services, Philippines, and is
1970s and successfully managed said company over the years, to become one currently the Chief Financial Officer of Golden Bria Holdings, Inc.
of the leading integrated property developers in the country and the largest
homebuilder in the Philippines now known as the Vista Land Group. Mr. Villar is Ruben O. Fruto, Independent Director. Mr. Fruto, 80, graduated with the degree of
also Chairman of the Board of Starmalls, Inc. and Golden Bria Holdings, Inc. Bachelor of Laws from the Ateneo de Manila University in 1961. He was formerly
a partner in the law firm of Feria, Feria, Lugtu & La O’ and the Oben, Fruto &
Manuel Paolo A. Villar, Vice Chairman of the Board and President & Chief Executive Ventura Law Office. In February 1987, he was the Chief Legal Counsel and Senior
Officer. Mr. Villar, 42, graduated from the Wharton School of the University of Vice President of the Development Bank of the Philippines and Director from
Pennsylvania, Philadelphia, USA with a Bachelor of Science in Economics and 1991 to 1998. He was the Undersecretary of Finance from March 1990 to May 15,
Bachelor of Applied Science in 1999. He was a consultant for McKinsey &Co. in 1991. Presently aside from private practice in corporate and civil litigation, he is
the United States from 1999 to 2001. He joined Crown Asia in 2001 as Head of also Of Counsel of Feria Tantoco Daos Law Office. He is also currently General
Corporate Planning. He was elected President and Chief Executive Officer of the Counsel of Wallem Philippines Shipping, Inc. and Wallem Maritime Services,
Company in July 2011. In addition he is the CEO and Chairman of St. Augustine Inc.; Vice-Chairman of Toyota Balintawak, Inc.; and Director and Chairman of
Gold and Copper Limited from October 2012 and Chairman of TVI Resources Padre Burgos Realty, Inc.
Development Philippines, Inc. from December 2013. Mr. Villar also is the majority
shareholder of Prime Asset Ventures, Inc. Marilou O. Adea, Independent Director. Ms. Adea, 67, is currently a consultant
for FBO Management Network, Inc. and is Independent Director for Malarayat
Cynthia J. Javarez, Director, Chief Operating Officer, Treasurer and Chief Risk Rural Bank. She was until recently the Court Appointed Rehabilitation Receiver
Officer. Ms. Javarez, 55, graduated from the University of the East with a degree of Anna-Lynns, Inc. and Manuela Corporation. Ms. Adea served previously as
in Bachelor of Science in Business Administration major in Accounting. She is a Project Director for Site Acquisition of Digital Telecommunications Phils.
Certified Public Accountant. She took a Management Development Program at Inc. from 2000 to 2002, Executive Director for FBO Management Network, Inc.
the Asian Institute of Management. She was the Controllerand Chief Financial from 1989 to 2000 and BF Homes Inc. in Receivership from 1988 to 1994 and
Officer of Vista Land since 2013 until she was elected as Chief Operating Officer Vice President for Finance & Administration for L&H Resources Management
in November 2018 and Head of the Tax and Audit group of Vista Land after holding Corporation from 1986 to 1988. Ms. Adea worked with the Home Development
various other positions in the MB Villar Group of Companies since 1985. She is Mutual Fund from 1978 to 1986. Ms. Adea holds a Degree in Bachelor of Science
also the President of Fine Properties, Inc. in Business Administration Major in Marketing Management from the University
of the Philippines.
Camille A. Villar, Managing Director, Vista Land Commercial. Ms. Villar, 33,
graduated from Ateneo de Manila University with a degree in Bachelor of Science Gemma M. Santos, Corporate Secretary. Atty. Santos, 56, graduated cum laude
in Management. She took Management in Business Administration, Global with the degree of Bachelor of Arts, Major in History from the University of
Executive MBA Program in IESE Business School, Barcelona, Spain. She joined the Philippines in 1981, and with the degree of Bachelor of Laws also from the
the Corporate Communications Group of Brittany in 2007 until she assumed the University of the Philippines in 1985. She is a practicing lawyer and Senior
position of Managing Director of Vista Land Commercial. She is also a Director of Partner of Picazo Buyco Tan Fider & Santos Law Offices.
Starmalls, Inc., Golden Bria Holdings, Inc. and AllValue Holdings Corp.

66 VISTA LAND 2018 ANNUAL REPORT 67

 MANAGEMENT COMMITTEE

Manuel Paolo A. Villar Cynthia J. Javarez Brian N. Edang Camille A. Villar Benjamarie Therese N. Serrano
President & Chief Executive Officer Chief Operating Officer Chief Financial Officer & Head, Investor Relations Managing Director- Vista Land Commercial President-Starmall, Inc.

Ma. Nalen S.J. Rosero Estrellita S.Tan Lorelyn D. Mercado Eduardo T. Aguilar Eva Rose D. Estampador
68 VISTA LAND
Asst. Corporate Secretary President-Prima Casa Controller Vice President–Sales Chief Technology Officer
 MANAGEMENT DISCUSSION AND ANALYSIS

Management’s Discussion and Analysis

REVIEW OF YEAR END 2018 VS YEAR END 2017

RESULTS OF OPERATIONS Rental income
_
Rental income increased by 15% from P 5,625.2 million for the year
. _
an increase in depreciation and amortization from P1,350.2
_ assets (excluding equity securities), held-to-maturity
_ million for the year ended December 31, 2017 to P1,480.1 investments and investments at amortized costs increased
Revenues ended December 31, 2017 to P6,464.7 million for the year ended million in the year ended December 31, 2018 due to the
_
December 31, 2018. The increase was primarily attributable to the increase in investment properties and additions to property
_by 19% from P40,158.8 million as of December 31, 2017 to
P47,645.2 million as of December 31, 2018 primarily due to
Real Estate additional gross floor area leased out of our investment properties and equipment for the year. the higher internal cash generated and net proceeds from
_The Company recorded revenue from real estate sales amounting to
P 31,856.1 million for the year ended December 31, 2018, an increase
_
of 15% from P 27,594.4 million in same period last year. This was
as well as increase in rental rates of our existing malls.

Interest income from installment contract receivable

. _
an occupancy costs from P 898.3 million for the year ended
_
December 31, 2017 to P1,173.1 million for the year ended .
the debt issuance for the year.

Available-for-sale financial assets (equity securities) in

primarily attributable to the increase in the overall completion and investments December 31, 2018 due to increase in the number of malls as December 31, 2017 now classified as Investments at fair
rate of sold inventories of its business units. The Company uses the Interest income from installment contract receivable and well as projects during the year, value through other comprehensive income decreased by
Percentage of completion method of revenue recognition where
_
investments increased by 9% from P1,746.2 million for the year _ _
_ 12% from P 121.6 million as of December 31, 2017 to P 106.5
revenue is recognized in reference to the stages of development ended December 31, 2017 to P1,905.8 million for the year ended Interest and other financing charges million as of December 31, 2018 due to disposals during the

. .
of the properties. December 31, 2018. The increase was primarily attributable to the
_
slight increase in interest income from investments of 2% to P1,225.8 _Interest and other financing charges increased by 23% from
_
P3,384.2 million for the year ended December 31, 2017 to P4,169.8
year.

Real estate revenue from Vista Residences increased by 24% million for the year ended December 31, 2018 and the increase in the million for the year ended December 31, 2018. The increase was Receivables and contract assets including non-current
_
to P 5,305.6 million for the year ended December 31, 2018
_
interest income from receivables of 25% to P680.1 million for the _
primarily attributable to the increase in the interest bearing debt of portion thereof increased by 21% from P44,182.5 million as
from P 4,262.7 million for the year ended December 31, 2017. year ended December 31, 2018 primarily due to the increase in the the Company for the year and reduced capitalization for qualifying
_
of December 31, 2017 to P53,641.0 million as of December
This increase was principally attributable to the increase in interest income from leasing related receivables. assets that are already completed during the year. 31, 2018 due to an increase in the installment contracts
the number of sold condominium units completed or under receivables and contract assets from the current year sale,
construction during the year. The Company is currently Miscellaneous Income Provision for Income Tax increase in other non-trade receivables and the a decrease
_

.
delivering a number of condominium projects launched from Miscellaneous income increased by 17% from P1,076.6 million for the in the receivable from tenants.
2-3 years ago. Vista Residences is the business unit of Vista
_
year ended December 31, 2017 to P1,260.5 million for the year ended _
Provision for income tax decreased by 7% from P2,210.8 million for
Land that develops and sells vertical projects across the December 31, 2018. The increase was primarily attributable to the _
the year ended December 31, 2017 to P2,047.3 million for the year
_Receivables from related parties decreased by 6% from
_

.
Philippines. 19% increase of the other operating income and parking fees from ended December 31, 2018 primarily due to a lower taxable base for P4,987.9 million as of December 31, 2017 to P4,706.9 million
_
our malls to P453.1 million for the year ended December 31, 2018 the year. as of December 31, 2018 due to settlements made by
_

.
_Real estate revenue of Camella Homes increased by 19% to
P 9,731.5 million for the year ended December 31, 2018 from
and the increase of 17% to P807.4 million pertaining to forfeited
reservation fees and partial payments from customers whose
affiliates during the year.
Net Income
_P 8,158.3 million for the year ended December 31, 2017. This sales contracts are cancelled before completion of required down Real estate inventories including raw land for residential
was principally attributable to the higher number of sold payment. As a result of the foregoing, the Company’s net income increased by development which was reclassified increased by 6%
homes completed or under construction in the Mega Manila _
area in the low-cost and affordable housing segment during Costs and Expenses
_16% to P10,534.5 million for the year ended December 31, 2018 from
P9,062.8 million for the year ended December 31, 2017.
from P39,700.0 million as of December 31, 2017 to P41,946.9
million as of December 31, 2018 due primarily to the

.
the year. increase in the project launched and land acquired for
_

.
Cost and expenses increased by 16% to P24,735.7 million for the year For the year ended December 31, 2018, there were no seasonal housing development during the year.
Real estate revenue of Communities Philippines increased by
_
ended December 31, 2018 from P21,384.5 million for the year ended aspects that had a material effect on the financial condition or
_

.
17% to P 15,358.1 million for the year ended December 31, 2018 December 31, 2017. results of operations of the Company. Neither were there any Project development costs increased by 11% from P4,043.3
from P 13,090.7 million for the year ended December 31, 2017. trends, events or uncertainties that have had or that are reasonably
_
million as of December 31, 2017 to P4,465.3 million as of
This was principally attributable to the higher number of sold
_
Cost of real estate sales increased by 14% from P13,303.6 expected to have a material impact on the net sales or revenues or December 31, 2018 due primarily to the advances made
homes completed or under construction outside the Mega
_
million for the year ended December 31, 2017 to P15,177.2 income from continuing operations. The Company is not aware of during the year for to joint venture partners for land

.
Manila area in the low-cost and affordable housing segment million for the year ended December 31, 2018 primarily due events that will cause a material change in the relationship between development.

.
during the year. to the increase in the overall recorded sales of Vista Land’s the costs and revenues.
_

.
business units. Property and equipment increased by 82% from P885.8
Real estate revenue of Crown Asia decreased by 17% to P979.5 There are no significant elements of income or loss that did not
_
million as of December 31, 2017 to P1,613.9 million as
million for the year ended December 31, 2018 from P1,178.7
_
Operating expenses increased by 18% from P8,080.9 million
_ arise from the Company’s continuing operations. of December 31, 2018 due primarily to acquisitions of
million for the year ended December 31, 2017. The decrease for the year ended December 31, 2017 to P9,558.5 million equipment and furniture and the additions to building and
was principally attributable to the decrease in the number for the year ended December 31, 2018 primarily due to the improvements pertaining to the Mella hotel building the
FINANCIAL CONDITION

.
of completed units sold for the year of projects in the Mega following: second hotel of the group.

.
Manila area in the middle-income housing segment.
_
Real estate revenue of Brittany decreased by 47% to P481.4
. _
an increase in commissions from P 1,482.5 million for the
_
year ended December 31, 2017 to P 1,692.3 million for the
As of December 31, 2018 vs. December 31, 2017
Investment properties including raw land for commercial
_
million for the year ended December 31, 2018 from P 904.0 year ended December 31, 2018 resulting from increase in
Total assets as of December 31, 2018 were 199,934.7 million compared
_ _development which was reclassified increased by 25% from
_
P59,101.4 million as of December 31, 2017 to P73,930.6 million
to P 238,262 million as of December 31, 2017, or a 19% increase. This
million in the same period last year. The decrease was sales of the Company during the year and the adoption of

.
was due to the following: as of December 31, 2018 due primarily to the additions to
principally attributable to the decrease in the number of the new accounting standards on recording commission. commercial developments and acquisition of land for
completed sold units for the year of projects in the Mega commercial development during the year.
Cash and cash equivalents including short term and
Manila area in the high-end housing segment.
long-term cash investments, available-for-sale financial
70 VISTA LAND 2018 ANNUAL REPORT 71
 MANAGEMENT DISCUSSION AND ANALYSIS

. _
_
Pension assets increased by 143% to P213.3 million as of
December 31, 2018 from P87.7 million as of December 31,
. _Deferred tax liabilities – net increased by 27% from
_
P2,414.2 million as of December 31, 2017 to P3,073.6 million
Liability-to-equity ratio increased due to the increase in the total
liabilities brought by the proceeds from bank loans and notes
_
Property and equipment increased by 82% from P885.8 million as
_
of December 31, 2017 to P1,613.9 million as of December 31, 2018
2017 as a result of actuarial adjustment for the company’s as of December 31, 2018 due to the additional deferred payable and increase in accounts and other payables. due primarily to acquisitions of equipment and furniture and the

. .
retirement program. liabilities recognized for the year. additions to building and improvements pertaining to the Mella hotel
Interest expense as a percentage of income before interest expense building the second hotel of the group.
Other assets, cost to obtain contract including current
_
Other noncurrent liabilities decreased by 13% from P1,674.1 increased in the year ended December 31, 2018 compared to the ratio
_
portion thereof increased by 57% from P5,725.4 million as _ for the year ended December 31, 2017 due to the higher interest Investment properties including raw land for commercial
_ million as of December 31, 2017 to P1,450.5 million as of
expense for the year.
_
development which was reclassified increased by 25% from P59,101.4
of December 31, 2017 to P8,998.5 million as of December 31, December 31, 2018 due to the settlements for the period. _
2018 due primarily to the recognition of the cost to obtain million as of December 31, 2017 to P73,930.6 million as of December
contract (commission due to sales agent) P1,276.5 million Total stockholder’s equity increased by 9% from P84,007.9 million
_ Return on asset remained constant for December 31, 2018 compared 31, 2018 due primarily to the additions to commercial developments
of as a result of the adoption of the PFRS 15, increase in _
as of December 31, 2017 to P91,906.6 million as of December 31, 2017 to that on December 31, 2017. and acquisition of land for commercial development during the year.
input vat coming from mall constructions, increase in due to the net income recorded for the year ended December 31, _
creditable withholding taxes and constructions materials Return on equity increased due primarily to the higher net income Pension assets increased by 143% to P213.3 million as of December
2018, increase in non-controlling interest with a reduction due to
reported for the year ended December 31, 2018.
_
31, 2018 from P87.7 million as of December 31, 2017 as a result of
as the company shifted to in-house constructions for its the acquisition of treasury shares for the year.

.
housing development. actuarial adjustment for the company’s retirement program.

_
Total liabilities as of December 31, 2018 were P146,355.4 million Material Changes to the Company’s Balance Sheet as of December Other assets, cost to obtain contract including current
Considered as the top five key performance indicators of the
_ 31, 2018 compared to December 31, 2017 (increase/decrease of 5% portion thereof increased by 57% from P5,725.4 million as
compared to P115,926.8 million as of December 31, 2017, or a 26% Company as shown below: _

.
increase. This was due to the following: or more) of December 31, 2017 to P8,998.5 million as of December 31,
2018 due primarily to the recognition of the cost to obtain
_ Key Performance _
contract (commission due to sales agent) P1,276.5 million
Accounts and other payables increased by 19% to P15,736.9 12/31/2018 12/31/2017
_
million as of December 31, 2018 from P13,275.0 million as Indicators Cash and cash equivalents including short term and long-term of as a result of the adoption of the PFRS 15, increase in
of December 31, 2017 due to the increase in trade payables cash investments, available-for-sale financial assets (excluding input vat coming from mall constructions, increase in
Current ratio (a) 3.77:1 equity securities), held-to-maturity investments and investments creditable withholding taxes and constructions materials
and other payables specifically commission payable as a
5.19:1 _

.
result of the adoption of PFRS 15. at amortized costs increased by 19% from P40,158.8 million as of as the company shifted to in-house constructions for its
_
December 31, 2017 to P47,645.2 million as of December 31, 2018 housing development.
Liability-to-equity ratio (b) 1.59:1 1.38:1
Customers’ advances and deposit including contract primarily due to the higher internal cash generated and net proceeds
_ _
liabilities was flat to P3,622.7 million as of December 31, Interest expense/Income from the debt issuance for the year. Accounts and other payables increased by 19% to P15,736.9 million
_
_ 24.9% 23.1%
.
2018 from P3,617.9 million as of December 31, 2017. as of December 31, 2018 from P13,275.0 million as of December
before Interest expense (c) Available-for-sale financial assets (equity securities) in December 31, 2017 due to the increase in trade payables and other payables
_ Return on assets (d) 4.4% 4.5% 31, 2017 now classified as Investments at fair value through other specifically commission payable as a result of the adoption of PFRS
Income tax payable decreased by 17% from P53.2 million
_ _
comprehensive income decreased by 12% from P121.6 million as of 15.
as of December 31, 2017 to P44.4 million as of December 31, _

.
2018 due primarily to a settlements during the year. Return on equity (e) 11.5% 10.8% December 31, 2017 to P106.5 million as of December 31, 2018 due to
disposals during the year. Customers’ advances and deposit including contract liabilities was
_ _ _
flat to P3,622.7 million as of December 31, 2018 from P3,617.9 million
Dividend payable increased by 15% million from P29.0

.
_ Receivables and contract assets including non-current portion as of December 31, 2017.
million as of December 31, 2017 to P33.4 million as of Notes:
(a) Current Ratio: This ratio is obtained by dividing the Current Assets of the Company
_
thereof increased by 21% from P44,182.5 million as of December 31,
December 31, 2018 due primarily to the dividend declared _ _

.
by its Current liabilities. This ratio is used as a test of the Company’s liquidity.
during the year. 2017 to P53,641.0 million as of December 31, 2018 due to an increase Income tax payable decreased by 17% from P53.2 million
(b) Liability-to-equity ratio: This ratio is obtained by dividing the Company’s Total
in the installment contracts receivables and contract assets from
_
as of December 31, 2017 to P44.4 million as of December 31,
Liabilities by its Total Equity. The ratio reveals the proportion of liability and equity
Notes payable including non-current portion increased a company is using to finance its business. It also measures a company’s borrowing the current year sale, increase in other non-trade receivables and 2018 due primarily to a settlements during the year.
_ capacity. the a decrease in the receivable from tenants.
_by 36% from P54,501.0 million as of December 31, 2017 to (c) Interest expense/Income before interest expense: This ratio is obtained by dividing _
Dividend payable increased by 15% million from P29.0 million as
P74,287.0 million as of December 31, 2018 due primarily to interest expense for the period by its income before interest expense. This ratio shows
Receivables from related parties decreased by 6%
_
from P4,987.9
_
of December 31, 2017 to P33.4 million as of December 31, 2018 due
the issuance of peso corporate notes and retail bond for whether a company is earning enough profits before interest to pay its interest cost
_

.
the year. comfortably million as of December 31, 2017 to P4,706.9 million as of December primarily to the dividend declared during the year.
(d) Return on assets: This ratio is obtained by dividing the Company’s net income by its
31, 2018 due to settlements made by affiliates during the year.
total assets. This measures the Company’s earnings in relation to all of the resources
Bank loans including non-current portion increased by
_ it had at its disposal.
(e) Return on equity: This ratio is obtained by dividing the Company’s net income by Real estate inventories including raw land for residential
_Notes payable including non-current portion increased by 36% from
_
P54,501.0 million as of December 31, 2017 to P74,287.0 million as of
_24% from P35,799.8 million as of December 31, 2017 to
its total equity. This measures the rate of return on the ownership interest of the _
development which was reclassified increased by 6% from P39,700.0 December 31, 2018 due primarily to the issuance of peso corporate
P44,476.1 million as of December 31, 2018 due primarily to _

.
Company’s stockholders. Because there are various calculation methods for the
the issuance of bilateral loans. performance indicators above, the Company’s presentation of such may not be
million as of December 31, 2017 to P41,946.9 million as of December notes and retail bond for the year.
comparable to similarly titled measures used by other companies. 31, 2018 due primarily to the increase in the project launched and
land acquired for housing developement during the year.
Loans payable including non-current portion decreased
_ Current ratio as of December 31, 2018 decreased from that of _Bank loans including non-current portion increased by 24% from
_
P35,799.8 million as of December 31, 2017 to P44,476.1 million as of
_by 26% from P3,760.5 million as of December 31, 2017 to
December 31, 2017 due primarily to the decrease in the current _
Project development costs increased by 11% from P4,043.3 million December 31, 2018 due primarily to the issuance of bilateral loans.
P2,784.2 million as of December 31, 2018 due settlement
portion of AFS and HTM investments and the increase in current _
as of December 31, 2017 to P4,465.3 million as of December 31, 2018
for the year.
liabilities. due primarily to the advances made during the year for to joint
venture partners for land development.
_Loans payable including non-current portion decreased by 26% from
_
P3,760.5 million as of December 31, 2017 to P2,784.2 million as of

72 VISTA LAND 2018 ANNUAL REPORT 73

 MANAGEMENT DISCUSSION AND ANALYSIS

December 31, 2018 due settlement for the year.

_
Cost of real estate sales increased by 14% from P13,303.6 million
_
for the year ended December 31, 2017 to P15,177.2 million for the year
_
Deferred tax liabilities – net increased by 27% from P2,414.2 million ended December 31, 2018 primarily due to the increase in the overall
_
as of December 31, 2017 to P3,073.6 million as of December 31, 2018 recorded sales of Vista Land’s business units.
due to the additional deferred liabilities recognized for the year.
_
Operating expenses increased by 18% from P8,080.9 million for
_
Other noncurrent liabilities decreased by 13% from P1,674.1 million
_
the year ended December 31, 2017 to P9,558.5 million for the year
_
as of December 31, 2017 to P1,450.5 million as of December 31, 2018 ended December 31, 2018 primarily due to the following an increase
due to the settlements for the period.
_
in commissions from P1,482.5 million for the year ended December
_
31, 2017 to P1,692.3 million for the year ended December 31, 2018
_
Total stockholder’s equity increased by 9% from P84,007.9 million resulting from increase in sales of the Company during the year

FI N AN CI AL
_
as of December 31, 2017 to P91,906.6 million as of December 31, 2017 and the adoption of the new accounting standards on recording
due to the net income recorded for the year ended December 31,
2018, increase in non-controlling interest with a reduction due to
_commission, an increase in depreciation and amortization from
_
P1,350.2 million for the year ended December 31, 2017 to P1,480.1
the acquisition of treasury shares for the year. million in the year ended December 31, 2018 due to the increase

S TAT EM EN T
in investment properties and additions to property and equipment
Material Changes to the Company’s Statement of Income for the year
_
for the year and an occupancy costs from P898.3 million for the
ended December 31, 2018 compared to the year ended December 31,
_
year ended December 31, 2017 to P1,173.1 million for the year ended
2017 (increase/decrease of 5% or more) December 31, 2018 due to increase in the number of malls as well as

2018
projects during the year,
_
Real estate sales amounting to P31,856.1 million for the year ended
_
December 31, 2018, an increase of 15% from P27,594.4 million in same
period last year. This was primarily attributable to the increase in
_Interest and other financing charges increased by 23% from
_
P3,384.2 million for the year ended December 31, 2017 to P4,169.8
the overall completion rate of sold inventories of its business units. million for the year ended December 31, 2018. The increase was
primarily attributable to the increase in the interest bearing debt of
_
Rental income increased by 15% from P5,625.2 million for the year the Company for the year and reduced capitalization for qualifying
_
ended December 31, 2017 to P6,464.7 million for the year ended assets that are already completed during the year.
December 31, 2018. The increase was primarily attributable to the
additional gross floor area leased out of our investment properties
_
Provision for income tax decreased by 7% from P2,210.8 million for
as well as increase in rental rates of our existing malls.
_
the year ended December 31, 2017 to P2,047.3 million for the year
ended December 31, 2018 primarily due to a lower taxable base for
Interest income from installment contract receivable and the year.
_
investments increased by 9% from P1,746.2 million for the year
_
ended December 31, 2017 to P1,905.8 million for the year ended As a result of the foregoing, the Company’s net income increased by
December 31, 2018. The increase was primarily attributable to the
_
_
slight increase in interest income from investments of 2% to P1,225.8
_16% to P10,534.5 million for the year ended December 31, 2018 from
P9,062.8 million for the year ended December 31, 2017.
million for the year ended December 31, 2018 and the increase in the
_
76 Statement of management’s 87 Consolidated statements of
interest income from receivables of 25% to P680.1 million for the For the year ended December 31, 2018, there were no seasonal responsibility for consolidated comprehensive income
year ended December 31, 2018 primarily due to the increase in the aspects that had a material effect on the financial condition or
financial statements
interest income from leasing related receivables. results of operations of the Company. Neither were there any
_ trends, events or uncertainties that have had or that are reasonably 89 Consolidated statements of changes
Miscellaneous income increased by 17% from P1,076.6 million for the
_ expected to have a material impact on the net sales or revenues 77 Independent auditors’ report in equity
year ended December 31, 2017 to P1,260.5 million for the year ended or income from continuing operations. The Company is not aware
December 31, 2018. The increase was primarily attributable to the of events that will cause a material change in the relationship
19% increase of the other operating income and parking fees from
_ between the costs and revenues. 85 Consolidated statements of 91 Consolidated statements of cash flows
our malls to P453.1 million for the year ended December 31, 2018
_ financial position
and the increase of 17% to P807.4 million pertaining to forfeited There are no significant elements of income or loss that did not
reservation fees and partial payments from customers whose arise from the Company’s continuing operations. 92 Notes to consolidated financial statements
sales contracts are cancelled before completion of required down
payment.

74 VISTA LAND 2018 ANNUAL REPORT 75

 STATEMENT OF MANAGEMENT’S RESPONSIBILITY SyCip Gorres Velayo & Co.
SyCip Gorres
6760 Ayala
6760
Velayo & Co.
Avenue
Ayala Avenue
Tel: (632) 891 0307
Tel:
Fax:(632)
Fax:
(632)891
8190307
0872
(632) 819 0872
BOA/PRC Reg. No. 0001,
BOA/PRC Reg.
October 4,
October
No.valid
2018, 0001,
4, 2018, No.
until August 24, 2021
valid0012-FR-5
until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation (Group A),
FOR CONSOLIDATED FINANCIAL STATEMENTS 1226 Makati City
Philippines
Philippines
ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
November 6, 2018, valid until November 5, 2021
November 6, 2018, valid until November 5, 2021

The Management of Vista Land & Lifescapes, Inc. and Subsidiaries (the “Group”) is responsible
for the preparation and fair presentation of the consolidated financial for the years ended December INDEPENDENT AUDITOR’S
INDEPENDENT AUDITOR’S REPORT
REPORT
31, 2018 and 2017, in accordance with the prescribed financial reporting framework indicated therein,
and for such internal control as management determines is necessary to enable the preparation of the
financial statements that are free from material misstatement, whether to fraud or error.
The Stockholders
The Stockholders and
and the
the Board
Board of
of Directors
Directors
In preparing the consolidated financial statements, management is responsible for assessing the Group’s Vista Land & Lifescapes, Inc.
Vista Land & Lifescapes, Inc.
ability to continue as a going concern, disclosing, as applicable matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so. Opinion
Opinion

The Board of Directors is responsible for overseeing the Group’s financial reporting process. We have
We have audited
audited the
the consolidated
consolidated financial
financial statements
statements of
of Vista
Vista Land
Land and
and Lifescapes,
Lifescapes, Inc.
Inc. and
and its
its
subsidiaries (the Group), which comprise the consolidated statements of financial position
subsidiaries (the Group), which comprise the consolidated statements of financial position as at as at
The Board of Directors reviews and approves the consolidated financial statements and submits the December 31, 2018 and 2017, and the consolidated statements of comprehensive
December 31, 2018 and 2017, and the consolidated statements of comprehensive income, income,
same to the stockholders or members.
consolidated statements
consolidated statements ofof changes
changes inin equity
equity and
and consolidated
consolidated statements
statements of of cash
cash flows
flows for
for each
each
of the three years in the period ended December 31, 2018, and notes to the consolidated
of the three years in the period ended December 31, 2018, and notes to the consolidated financial financial
statements, including
statements, including a a summary
summary ofof significant
significant accounting
accounting policies.
policies.
SyCip Gorres Velayo & Co., the independent auditor appointed by the stockholders, has audited the
consolidated financial statements of the Group in accordance with Philippine Standards on Auditing, and
In our
In our opinion,
opinion, the
the accompanying
accompanying consolidated
consolidated financial
financial statements
statements present
present fairly,
fairly, in
in all
all material
material
in its report to the stockholders or members, has expressed its opinion on the fairness of presentation
respects, the consolidated financial position of the Group as at December 31, 2018
respects, the consolidated financial position of the Group as at December 31, 2018 and 2017, and 2017,
upon completion of such audit.
and its consolidated financial performance and its consolidated cash flows for each of
and its consolidated financial performance and its consolidated cash flows for each of the three the three
years in
years in the
the period
period ended
ended December
December 31,31, 2018
2018 in
in accordance
accordance with
with Philippine
Philippine Financial
Financial Reporting
Reporting
Standards (PFRSs).
Standards (PFRSs).
Basis for
Basis for Opinion
Opinion

We conducted
We conducted our our audits
audits in
in accordance
accordance withwith Philippine
Philippine Standards
Standards on on Auditing
Auditing (PSAs).
(PSAs). OurOur
MANUEL B. VILLAR, JR. responsibilities under those standards are further described in the Auditor’s Responsibilities
responsibilities under those standards are further described in the Auditor’s Responsibilities for for
Chairman of the Board the Audit of the Consolidated Financial Statements section of our report. We are
the Audit of the Consolidated Financial Statements section of our report. We are independent of independent of
the Group in accordance with the Code of Ethics for Professional Accountants in
the Group in accordance with the Code of Ethics for Professional Accountants in the Philippines the Philippines
(Code of
(Code of Ethics)
Ethics) together
together with
with the
the ethical
ethical requirements
requirements thatthat are
are relevant
relevant to to our
our audit
audit of
of the
the
consolidated financial statements in the Philippines, and we have fulfilled our
consolidated financial statements in the Philippines, and we have fulfilled our other ethical other ethical
responsibilities in
responsibilities in accordance
accordance with
with these
these requirements
requirements andand the
the Code
Code of
of Ethics.
Ethics. We We believe
believe that
that
the audit evidence we have obtained is sufficient and appropriate to provide
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our a basis for our
opinion.
opinion.
MANUEL PAOLO A. VILLAR BRIAN N. EDANG Key Audit
Audit Matters
Matters
Key
President and Chief Executive Officer Chief Financial Officer and Head Investor Relations
Key audit
Key audit matters
matters are
are those
those matters
matters that,
that, in
in our
our professional
professional judgment,
judgment, were
were of
of most
most significance
significance
in our audit of the consolidated financial statements of the current period. These matters
in our audit of the consolidated financial statements of the current period. These matters were were
addressed in the context of our audit of the consolidated financial statements as a whole,
addressed in the context of our audit of the consolidated financial statements as a whole, and in and in
forming our opinion thereon, and we do not provide a separate opinion on these
forming our opinion thereon, and we do not provide a separate opinion on these matters. For matters. For
each matter
each matter below,
below, our
our description
description of
of how
how our
our audit
audit addressed
addressed the the matter
matter isis provided
provided in
in that
that
context.
context.

76 VISTA LAND 2018 ANNUAL REPORT 77

 2 3

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We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the The adoption of PFRS 15 resulted to transition adjustments resulting to increase in the opening
Consolidated Financial Statements section of our report, including in relation to these matters. balance of retained earnings of P
= 145.10 million as of January 1, 2018.
Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the consolidated financial statements. The The disclosures related to the adoption of PFRS 15, including available practical expedients
results of our audit procedures, including the procedures performed to address the matters below, applied by the Group, are included in Note 3 to the consolidated financial statements.
provide the basis for our audit opinion on the accompanying consolidated financial statements. Audit Response
Adoption of PFRS 15, Revenue from Contracts with Customers We obtained an understanding of the Group’s revenue recognition process, including the process
Effective January 1, 2018, the Group adopted the new revenue recognition standard, PFRS 15, of implementing the new revenue recognition standard. We reviewed the PFRS 15 adoption
Revenue from Contracts with Customers, under modified retrospective approach. The adoption papers and accounting policies prepared by management, including revenue streams
of PFRS 15 resulted in significant changes in the Group’s revenue process, policies and identification and scoping, and contract analysis.
procedures and revenue recognition accounting policy. The following matters are significant to For the identification of the alternative documentation for sale of real estate property (in the
our audit because these involve application of significant judgment and estimation: (1) absence of a signed contract to sell) that would meet the requirements of PFRS 15, our audit
identification of the contract for sale of real estate property that would meet the requirements of
procedures include, among others, involvement of our internal specialist in reviewing the Group’s
PFRS 15; (2) assessment of the probability that the entity will collect the consideration from the legal basis regarding the enforceability of the alternative documentation against previous court
buyer; (3) determination of the transaction price; (4) application of input method as the measure decisions, buyers’ behavior and industry practices.
of progress in determining real estate revenue; (5) determination of the actual costs incurred as
cost of sales; and (6) recognition of cost to obtain a contract. For the buyers’ equity, we evaluated management’s basis of the buyer’s equity by comparing this
to the historical analysis of sales collections from buyers with accumulated payments above the
The Group identifies the contract that meets all the criteria required under PFRS 15 for a valid collection threshold. We traced the analysis to supporting documents such as official receipts,
revenue contract. In the absence of a signed contract to sell, the Group identifies alternative deposit slips, and bank statements.
documentation that are enforceable and that contains each party’s rights regarding the real estate
property to be transferred, the payment terms and the contract’s commercial substance. For the determination of the transaction price, we obtained an understanding of the nature of other
fees charged to the buyers. For selected contracts, we agreed the amounts excluded from the
In evaluating whether collectability of the amount of consideration is probable, the Group transaction price against the expected amounts required to be remitted to the government based
considers the significance of the buyer’s initial payments in relation to the total contract price (or on existing tax rules and regulations (e.g., documentary stamp taxes, transfer taxes and real
buyer’s equity). Collectability is also assessed by considering factors such as past history with property taxes).
the buyer, age and pricing of the property. Management regularly evaluates the historical sales
cancellations and back-outs if these would still support its current threshold of buyers’ equity For the application of the input method in determining real estate revenue and for determining
before commencing revenue recognition. cost of sales, we obtained an understanding of the Group’s processes for determining the POC,
including the cost accumulation process, and for determining and updating of total estimated
In determining the transaction price, the Group considers the selling price of the real estate costs, and performed tests of the relevant controls on these processes. We assessed the
property and other fees and charges collected from the buyers that are not held on behalf of other competence and objectivity of the project engineers by reference to their qualifications,
parties. experience and reporting responsibilities. For selected projects, we traced costs accumulated,
In measuring the progress of its performance obligation over time, the Group uses input method. including those incurred but not yet billed costs, to the supporting documents such as construction
Under this method, progress is measured based on actual costs incurred on materials, labor, and contracts, subsequent billings, and other documents evidencing receipt of materials and services
actual overhead relative to the total estimated development costs of the real estate project. The from contractors. We visited selected project sites and made relevant inquiries with project
Group uses the cost accumulated by the accounting department to determine the actual costs engineers. We performed test computation of the percentage of completion calculation of
incurred. The estimation of the total costs of the real estate project requires technical inputs by management. For selected projects, we obtained the approved total estimated costs and any
project engineers. revisions thereto and the supporting details such opening fact sheet and addendum thereof for
revisions. We likewise performed inquiries with the project engineers for the revisions.
In determining the actual costs incurred to be recognized as cost of sales, the Group estimates
costs incurred on materials, labor and overhead which have not yet been billed by the contractor. For the recognition of cost to obtain a contract, we obtained an understanding of the sales
commission process. For selected contracts, we agreed the basis for calculating the sales
The Group identifies sales commission after contract inception as the cost of obtaining the commission capitalized and portion recognized in profit or loss, particularly (a) the percentage of
contract. For contracts which qualified for revenue recognition, the Group capitalizes the total commission due against contracts with sales agents, (b) the total commissionable amount (e.g.,
sales commission due to sales agent as cost to obtain contract and recognizes the related net contract price) against the related contract to sell, and, (c) the POC against the POC used in
commission payable. The Group uses percentage of completion method in amortizing sales recognizing the related revenue from real estate sales.
commission consistent with the Group’s revenue recognition policy.

78 VISTA LAND
*SGVFS034680* *SGVFS034680*
2018 ANNUAL REPORT 79
A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited
 4 5

-4- -5-

We test computed the transition adjustments and evaluated the disclosures made in the financial The application of the ECL model increased retained earnings by P = 232.71 million as of
statements on the adoption of PFRS 15. January 1, 2018. There was no provision for credit losses in 2018 using the ECL model.

Adoption of PFRS 9, Financial Instruments Refer to Notes 3 and 11 of the financial statements for the disclosure on the transition adjustments
and details of the allowance for credit losses using the ECL model, respectively.
On January 1, 2018, the Group adopted Philippine Financial Reporting Standards (PFRS) 9,
Financial Instruments. PFRS 9, which replaced PAS 39, Financial Instruments: Recognition and Audit Response
Measurement, provides revised principles for classifying financial assets and introduces a
forward-looking expected credit loss model to assess impairment on debt financial assets not We obtained an understanding of the methodologies and models used for the Group’s different
measured at fair value through profit or loss and loan commitments and financial guarantee credit exposures and assessed whether these considered the requirements of PFRS 9 to reflect
contracts. The Group adopted the modified retrospective approach in adopting PFRS 9. an unbiased and probability-weighted outcome, the time value of money, and the best available
forward-looking information. We also inspected and considered the results of PFRS 9 model
Classification of Financial Assets validation performed by management.

As at January 1, 2018, the Group classified its financial assets based on its business models for We (a) assessed the Group’s segmentation of its credit risk exposures based on homogeneity of
managing these financial assets and the contractual cash flow characteristics of the financial credit risk characteristics; (b) compared the definition of default against historical analysis of
assets. This resulted in transition adjustments that increased retained earnings and decreased accounts and credit risk management policies and practices in place, (c) checked the
other comprehensive income by P = 703.03 million. Thereafter, the financial assets were accounted methodology used in applying the simplified approach by evaluating the key inputs, assumption
for based on the transition date classification, while newly originated or acquired financial assets and formula used, (d) tested historical loss rates by inspecting historical recoveries including the
were also classified based on the PFRS 9 classification criteria. timing, related direct costs and write-offs; (e) checked the classification of outstanding exposures
to their corresponding aging buckets; (f) checked the forward-looking information used for overlay
The Group’s application of the PFRS 9 classification criteria is significant to our audit as the through statistical test and corroboration using publicly available information and our
classification determines how financial assets are measured and accounted for in the financial understanding of the Group’s receivable portfolios and industry practices, and; (g) tested the
statements. effective interest rate, or an approximation thereof, used in discounting the expected loss.

The disclosures in relation to the adoption of the PFRS 9 classification criteria are included in Further, we checked the data used in the ECL models, such as the historical aging analysis and
Note 3 to the consolidated financial statements. default and recovery data, by reconciling data from source system reports to the data warehouse
and from the data warehouse to the loss allowance analysis/models and financial reporting
Audit Response systems. To the extent that the loss allowance analysis is based on credit exposures that have
been disaggregated into subsets with similar risk characteristics, we traced or re-performed the
We obtained an understanding of the Group’s contracts review process to establish the disaggregation from source systems to the loss allowance analysis. We also assessed the
contractual cash flow characteristics of financial assets, including the identification of standard assumptions used where there are missing or insufficient data.
and non-standard contracts, and reviewed the assessment made by management by inspecting
underlying contracts on a sample basis. We obtained the approved business models for the We recalculated impairment provisions on a sample basis. We test computed the transition
Group’s portfolios of financial assets. We compared the parameters set within the business adjustments and evaluated the disclosures made in the financial statements on allowance for
models with the investment/risk management policies of the Group. For significant portfolios, we credit losses using the ECL model.
assessed frequency and relative amount of sales in the past, understood how the business
performance is measured and evaluated performance measurement reports. We involved our internal specialists in the performance of the above procedures.

We test computed the transition adjustments and evaluated the disclosures on the adoption of Other Information
the PFRS 9 classification criteria made in the financial statements.
Management is responsible for the other information. The other information comprises the
Expected Credit Loss (ECL) information included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A
and Annual Report for the year ended December 31, 2018, but does not include the consolidated
The Group’s adoption of the expected credit loss (ECL) model is significant to our audit as it financial statements and our auditor’s report thereon. The SEC Form 20-IS, SEC Form 17-A and
involves the exercise of significant management judgment. Key areas of judgment include: Annual Report for the year ended December 31, 2018 are expected to be made available to us
segmenting the Group’s credit risk exposures; defining default; determining assumptions to be after the date of this auditor’s report.
used in the ECL model such as timing and amounts of expected net recoveries from defaulted
accounts; incorporating forward-looking information (called overlays) in calculating ECL.

80 VISTA LAND
*SGVFS034680* *SGVFS034680*
2018 ANNUAL REPORT 81
A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited
 6 7

-6- -7-

Our opinion on the consolidated financial statements does not cover the other information and we ∂ Evaluate the appropriateness of accounting policies used and the reasonableness of
will not express any form of assurance conclusion thereon. accounting estimates and related disclosures made by management.

In connection with our audits of the consolidated financial statements, our responsibility is to read ∂ Conclude on the appropriateness of management’s use of the going concern basis of
the other information identified above when it becomes available and, in doing so, consider accounting and, based on the audit evidence obtained, whether a material uncertainty exists
whether the other information is materially inconsistent with the consolidated financial statements related to events or conditions that may cast significant doubt on the Group’s ability to continue
or our knowledge obtained in the audits, or otherwise appears to be materially misstated. as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated financial
Responsibilities of Management and Those Charged with Governance for the Consolidated statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
Financial Statements based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with PFRSs, and for such internal control as management determines ∂ Evaluate the overall presentation, structure and content of the consolidated financial
is necessary to enable the preparation of consolidated financial statements that are free from statements, including the disclosures, and whether the consolidated financial statements
material misstatement, whether due to fraud or error. represent the underlying transactions and events in a manner that achieves fair presentation.
In preparing the consolidated financial statements, management is responsible for assessing the ∂ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going or business activities within the Group to express an opinion on the consolidated financial
concern and using the going concern basis of accounting unless management either intends to statements. We are responsible for the direction, supervision and performance of the audit.
liquidate the Group or to cease operations, or has no realistic alternative but to do so. We remain solely responsible for our audit opinion.
Those charged with governance are responsible for overseeing the Group’s financial reporting We communicate with those charged with governance regarding, among other matters, the
process. planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
We also provide those charged with governance with a statement that we have complied with
Our objectives are to obtain reasonable assurance about whether the consolidated financial relevant ethical requirements regarding independence, and to communicate with them all
statements as a whole are free from material misstatement, whether due to fraud or error, and to relationships and other matters that may reasonably be thought to bear on our independence,
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of and where applicable, related safeguards.
assurance, but is not a guarantee that an audit conducted in accordance with PSAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and From the matters communicated with those charged with governance, we determine those
are considered material if, individually or in the aggregate, they could reasonably be expected to matters that were of most significance in the audit of the consolidated financial statements of the
influence the economic decisions of users taken on the basis of these consolidated financial current period and are therefore the key audit matters. We describe these matters in our auditor’s
statements. report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain because the adverse consequences of doing so would reasonably be expected to outweigh the
professional skepticism throughout the audit. We also: public interest benefits of such communication.
∂ Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

∂ Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.

82 VISTA LAND
*SGVFS034680* *SGVFS034680*
2018 ANNUAL REPORT 83
A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited
 14

VISTA LAND & LIFESCAPES, INC. AND SUBSIDIARIES

8

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

-8-

December 31
The engagement partner on the audit resulting in this independent auditor’s report is 2018 2017
Cyril Jasmin B. Valencia.
ASSETS
Current Assets
SYCIP GORRES VELAYO & CO. Cash and cash equivalents (Notes 9, 30 and 31) P
= 20,022,186,387 P
= 11,494,511,442
Short-term cash investments (Notes 10, 30 and 31) 139,942,752 345,639,559
Available-for-sale financial assets (Notes 10, 30 and 31) − 6,491,361,776
Held-to-maturity investments (Notes 10, 30 and 31) − 8,133,258,592
Current portion of:
Receivables (Notes 11, 30 and 31) 21,849,774,501 35,355,750,913
Cyril Jasmin B. Valencia
Contract assets (Note 7) 14,456,428,216 −
Partner Cost to obtain contract (Note 7) 747,489,877 −
CPA Certificate No. 90787 Receivables from related parties (Notes 28, 30 and 31) 4,706,908,266 4,987,930,489
SEC Accreditation No. 1737-A (Group A), Real estate inventories (Note 12) 41,946,866,699 39,700,029,385
January 24, 2019, valid until January 23, 2022 Other current assets (Note 13) 6,012,527,034 4,017,873,284
Tax Identification No. 162-410-623 Total Current Assets 109,882,123,732 110,526,355,440
BIR Accreditation No. 08-001998-74-2018,
February 26, 2018, valid until February 25, 2021 Noncurrent Assets
Investments at amortized cost (Notes 3, 10, 30 and 31) 27,483,090,564 −
PTR No. 7332622, January 3, 2019, Makati City
Investments at fair value through other comprehensive income
(Notes 3, 10, 30 and 31) 106,499,183 −
April 2, 2019 Available-for-sale financial assets (Notes 10, 30 and 31) − 121,580,343
Held-to-maturity investments (Notes 10, 30 and 31) − 13,694,030,855
Receivables - net of current portion (Notes 11, 30 and 31) 8,481,261,708 8,826,716,922
Contract assets - net of current portion (Note 7) 8,853,547,856 −
Cost to obtain contract - net of current portion (Note 7) 529,024,635 −
Project development costs (Note 16) 4,465,254,164 4,034,282,866
Property and equipment (Note 15) 1,613,945,660 885,818,633
Investment properties (Note 14) 73,930,638,958 59,101,360,671
Goodwill (Note 8) 147,272,020 147,272,020
Pension assets (Note 26) 213,261,296 87,660,881
Deferred tax assets - net (Notes 6 and 27) 846,680,663 802,145,997
Other noncurrent assets (Note 17) 1,709,437,975 1,707,506,437
Total Noncurrent Assets 128,379,914,682 89,408,375,625
P= 238,262,038,414 P
= 199,934,731,065

LIABILITIES AND EQUITY

Current Liabilities
Accounts and other payables (Notes 18, 30 and 31) P
= 15,736,890,359 P
= 13,274,954,736
Customers’ advances and deposits (Note 19) 1,297,839,418 3,617,888,803
Income tax payable 44,362,283 53,215,024
Dividends payable (Note 23) 33,368,139 28,959,615
Current portion of:
Contract liabilities (Note 7) 1,617,322,395 −
Notes payable (Notes 21, 30 and 31) 4,760,986,563 60,890,732
Bank loans (Notes 20, 30 and 31) 5,332,822,509 3,620,352,953
Loans payables (Notes 20, 30 and 31) 336,726,340 644,355,649
Total Current Liabilities 29,160,318,006 21,300,617,512
(Forward)

84 VISTA LAND
*SGVFS034680* *SGVFS034680*
2018 ANNUAL REPORT 85
A member firm of Ernst & Young Global Limited
 16

VISTA LAND & LIFESCAPES, INC. AND SUBSIDIARIES

15
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
-2-

December 31 Years Ended December 31

2018 2017 2018 2017 2016
Noncurrent Liabilities REVENUE
Contract liabilities - net of current portion P
= 707,564,686 P
=− Real estate (Notes 6 and 7) P
= 31,856,087,078 P
= 27,594,357,784 P
= 25,025,209,355
Notes payable - net of current portion (Notes 21, 30 and 31) 69,526,008,960 54,440,151,506 Rental income (Notes 6 and 7) 6,464,740,183 5,625,226,916 4,375,326,206
Bank loans - net of current portion (Notes 20, 30 and 31) 39,143,230,006 32,179,459,075 Interest income from installment contracts
Loans payable - net of current portion (Notes 20, 30 and 31) 2,447,444,225 3,116,110,334 receivable (Notes 6 and 11) 680,058,436 543,523,766 642,642,195
Deferred tax liabilities - net (Notes 6 and 27) 3,920,324,321 3,216,367,742 Miscellaneous income (Notes 6 and 24) 1,260,519,593 1,076,585,595 952,508,345
Other noncurrent liabilities (Notes 22 and 31) 1,450,547,615 1,674,082,315
40,261,405,290 34,839,694,061 30,995,686,101
Total Noncurrent Liabilities 117,195,119,813 94,626,170,972
Total Liabilities 146,355,437,819 115,926,788,484
COSTS AND EXPENSES
Equity (Note 23) Costs of real estate sales (Notes 6, 12, and 25) 15,177,160,125 13,303,578,388 12,320,996,040
Attributable to equity holders of the Parent Company Operating expenses (Notes 6 and 25) 9,558,527,842 8,080,888,177 7,594,509,417
Common stock 13,114,136,376 13,114,136,376 24,735,687,967 21,384,466,565 19,915,505,457
Preferred stock 33,000,000 33,000,000
Additional paid-in capital 30,655,429,349 30,655,429,349 OTHER INCOME (EXPENSES)
Treasury shares (Note 4) (7,184,331,182) (6,980,294,580) Interest income from investments and other
Retained earnings 52,736,780,731 44,136,812,797 income (Notes 10, 21, 24 and 25) 1,225,783,467 1,202,632,812 864,375,335
Other comprehensive income (Notes 10 and 26) 534,538,519 1,280,960,358 Interest and other financing charges (Note 24) (4,169,762,915) (3,384,244,575) (2,261,952,641)
89,889,553,793 82,240,044,300 (2,943,979,448) (2,181,611,763) (1,397,577,306)
Non-controlling interest (Note 29) 2,017,046,802 1,767,898,281
Total Equity 91,906,600,595 84,007,942,581 INCOME BEFORE INCOME TAX 12,581,737,875 11,273,615,733 9,682,603,338
P
= 238,262,038,414 P
= 199,934,731,065
PROVISION FOR INCOME TAX (Note 27) 2,047,274,160 2,210,845,245 1,582,235,418
See accompanying Notes to Consolidated Financial Statements.
NET INCOME P
= 10,534,463,715 P
= 9,062,770,488 P
= 8,100,367,920

NET INCOME ATTRIBUTABLE TO:

Equity holders of the Parent Company (Note 29) P
= 10,238,356,840 P
= 8,803,658,211 P
= 7,906,941,679
Non-controlling interest (Note 29) 296,106,875 259,112,277 193,426,241

NET INCOME P
= 10,534,463,715 P
= 9,062,770,488 P
= 8,100,367,920

BASIC/DILUTED EARNINGS PER SHARE

(Notes 4, 8 and 29) P
= 0.798 P
= 0.686 P
= 0.615

(Forward)

86 VISTA LAND
*SGVFS034680*
2018 ANNUAL REPORT 87

*SGVFS034680*
 88VISTA LAND
TOTAL
OTHER
(LOSS)
17

NET INCOME

Cumulative
(Note 4)
fair value

Non-controlling interest
ATTRIBUTABLE TO:
subsequent periods:
subsequent periods:

translation
COMPREHENSIVE

through

COMPREHENSIVE
TOTAL COMPREHENSIVE INCOME

Equity holders of the Parent Company

sale financial assets (Note 10)

obligation - net of tax (Note 26)

comprehensive income (Note 10)

Changes in fair value of available-for-

reclassified to profit or loss in

reclassified to profit or loss in

Remeasurement gain on defined benefit

Changes in fair value of investments at
other
INCOME

adjustments
Other comprehensive gain (loss) to be

Other comprehensive income not to be

INCOME

P
P
P
P
-2-

See accompanying Notes to Consolidated Financial Statements.

297,209,456
2018

= 10,492,175,038
= 10,194,965,582
= 10,492,175,038
80,423,397
23,000,000
= 10,534,463,715

−
(145,712,074)

(42,288,677)

P
P
P
P

258,923,410
169,765,162
147,240,947
250,341,800
2017

= 9,232,535,650
= 8,973,612,240
= 9,232,535,650
= 9,062,770,488

(227,817,585)

P
P
P
P
Years Ended December 31

189,199,383
483,960,812
479,370,673
2016

= 8,584,328,732
= 8,395,129,349
= 8,584,328,732
= 8,100,367,920

30,275,144
−

(25,685,005)

*SGVFS034680*
VISTA LAND & LIFESCAPES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Other Comprehensive Income

Remeasurement
Gains (Losses) on Cumulative Other
Capital Stock (Note 23) Additional Paid-in Retained Retirement Translation Comprehensive Treasury Non-Controlling
Common Preferred Capital Earnings Obligation Adjustments Income Shares Interest
Stock Stock (Notes 8 and 23) (Notes 3 and 23) (Note 26) (Note 4) (Notes 3, 10 and 23) (Notes 8 and 23) (Note 8) Total

Balances as at January 1, 2018, as previously presented P

= 13,114,136,376 P
= 33,000,000 P
= 30,655,429,349 P
= 44,136,812,797 P
= 435,606,599 (P
= 228,414,387) P
= 1,073,768,146 (P
= 6,980,294,580) P
= 1,767,898,281 P
= 84,007,942,581
Effect of adoption of new standards (Notes 3, 10 and 11) − − − 1,080,837,556 − − (703,030,581) − − 377,806,975

Balances as at January 1, 2018, as restated 13,114,136,376 33,000,000 30,655,429,349 45,217,650,353 435,606,599 (228,414,387) 370,737,565 (6,980,294,580) 1,767,898,281 84,385,749,556
Net income − − − 10,238,356,840 − − − − 296,106,875 10,534,463,715
Other comprehensive income − − − − 79,320,816 − 23,000,000 − 1,102,581 103,423,397
Cumulative translation adjustments − − − − − (145,712,074) − − − (145,712,074)
Total comprehensive income (loss) for the year − − − 10,238,356,840 79,320,816 (145,712,074)) 23,000,000 − 297,209,456 10,492,175,038
Treasury shares − − − − − − − (204,036,602) − (204,036,602)
Cash dividend declared − − − (2,719,226,462) − − − − (48,060,935) (2,767,287,397)

Balances as at December 31, 2018 P

= 13,114,136,376 P
= 33,000,000 P
= 30,655,429,349 P
= 52,736,780,731 P
= 514,927,415 (P
= 374,126,461) P
= 393,737,565 (P
= 7,184,331,182) P
= 2,017,046,802 P
= 91,906,600,595

Balances as at January 1, 2017 P

= 13,114,136,376 P
= 33,000,000 P
= 30,655,429,349 P
= 36,953,581,723 P
= 288,176,785 (P
= 596,802) P
= 823,426,346 (P
= 6,917,014,956) P
= 1,545,167,378 P
= 76,495,306,199
Net income − − − 8,803,658,211 − − − − 259,112,277 9,062,770,488
Other comprehensive income − − − − 147,429,814 − 250,341,800 − (188,867) 397,582,747
Cumulative translation adjustments − − − − − (227,817,585) − − − (227,817,585)
Total comprehensive income (loss) for the year − − − 8,803,658,211 147,429,814 (227,817,585) 250,341,800 − 258,923,410 9,232,535,650
Treasury shares − − − − − − − (63,279,624) − (63,279,624)
Cash dividend declared − − − (1,620,427,137) − − − − (36,192,507) (1,656,619,644)

Balances as at December 31, 2017 P

= 13,114,136,376 P
= 33,000,000 P
= 30,655,429,349 P
= 44,136,812,797 P
= 435,606,599 (P
= 228,414,387) P
= 1,073,768,146 (P
= 6,980,294,580) P
= 1,767,898,281 P
= 84,007,942,581

Balances as at January 1, 2016 P

= 12,654,891,753 P
= 33,000,000 P
= 29,470,640,861 P
= 30,483,778,682 P
= 254,701,182 P
= 25,088,203 P
= 462,740,871 (P
= 6,297,793,026) P
= 2,878,040,833 P= 69,965,089,359
Net income – – – 7,906,941,679 – − − − 193,426,241 8,100,367,920
Other comprehensive income – – – – 34,502,002 – 479,370,673 − (4,226,858) 509,645,817
Cumulative translation adjustments – – – – – (25,685,005) – – – (25,685,005)
Total comprehensive income (loss) for the year – – – 7,906,941,679 34,502,002 (25,685,005) 479,370,673 − 189,199,383 8,584,328,732
Treasury shares – – – – – – – (619,221,930) – (619,221,930)
Cash dividend declared – – – (1,437,138,638) – – – – (21,367,435) (1,458,506,073)
Issuance (acquisition) of additional shares (Notes 8 and 23) 459,244,623 – 1,184,788,488 – (1,026,399) – (118,685,198) – (1,500,705,403) 23,616,111

Balances as at December 31, 2016 P

= 13,114,136,376 P
= 33,000,000 P
= 30,655,429,349 P
= 36,953,581,723 P
= 288,176,785 (P
= 596,802) P
= 823,426,346 (P
= 6,917,014,956) P
= 1,545,167,378 P
= 76,495,306,199

See accompanying Notes to Consolidated Financial Statements.

2018 ANNUAL REPORT

*SGVFS028606*
89
 VISTA LAND & LIFESCAPES, INC. AND SUBSIDIARIES
2

-2-
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31
2018 2017 2016
Decrease (increase) in:
Years Ended December 31
Project development costs (P
= 430,971,298) (P
= 801,971,626) (P
= 377,386,114)
2018 2017 2016 Receivables from related parties (1,070,156,204) (1,071,261,031) (491,051,066)
Other noncurrent assets 35,141,452 (445,466,574) (385,875,522)
CASH FLOWS FROM OPERATING ACTIVITIES Net cash flows used in investing activities (10,347,860,325) (6,149,745,462) (10,875,839,800)
Income before income tax P
= 12,581,737,875 P= 11,273,615,733 P
= 9,682,603,338
Adjustments for: CASH FLOWS FROM FINANCING ACTIVITIES
Interest and other financing charges (Note 24) 4,169,762,915 3,384,244,575 2,236,266,176 Proceeds from:
Depreciation and amortization Notes payable (Note 21) 18,069,798,418 15,844,753,409 12,478,282,420
(Notes 14, 15, 17 and 25) 1,480,129,055 1,305,156,158 1,043,631,634 Bank loans (Note 20) 11,880,116,880 6,618,873,486 6,966,686,959
Retirement expense (Note 26) 42,072,681 76,494,102 91,276,855 Loans payable (Note 20) 1,727,577,197 2,318,488,025 2,243,998,245
Unrealized foreign exchange loss (gain) (5,206,818) (397,643) 25,686,466 Payments of:
Interest income and other income from Interest paid (including capitalized cost)
installment contracts receivable (Notes 12 and 14) (6,882,568,034) (6,182,038,605) (4,759,217,196)
and investments (Note 24) (2,038,341,481) (1,746,156,578) (1,507,017,530) Notes payable (Note 21) (193,056,183) (777,150,342) (724,398,603)
Operating income before working capital changes 16,230,154,227 14,292,956,347 11,572,446,939 Dividends paid (Note 23) (2,762,878,873) (1,652,811,607) (1,453,656,460)
Increase in: Loans payable (Note 20) (2,703,872,615) (2,445,274,649) (2,051,634,740)
Receivables and contract assets (10,711,162,105) (6,549,131,508) (3,167,563,600) Bank loans (Note 20) (3,203,876,393) (6,906,303,750) (4,076,861,331)
Real estate inventories (679,224,356) (3,836,302,453) (671,399,126) Acquisitions of:
Other current assets and cost to obtain Non-controlling interest (Note 8) − − (15,152,473)
contract (3,919,745,252) (1,295,943,803) (1,085,417,762) Treasury shares (Note 23) (127,506,826) (63,279,624) (619,221,930)
Increase (decrease) in: Net cash flows provided by financing activities 15,803,733,571 6,755,256,343 7,988,824,891
Accounts and other payables 2,983,828,071 (1,385,654,543) 179,476,714
Customers’ advances and deposits and
EFFECT OF CHANGE IN EXCHANGE RATES
contract liabilities (61,432,429) 946,143,256 (458,787,618)
ON CASH AND CASH EQUIVALENTS 5,206,818 397,643 (25,686,466)
Other noncurrent liabilities (Note 22) (223,534,700) 286,041,944 (400,002,077)
Plan assets contributions paid (Note 26) (52,782,529) (51,624,792) (39,636,583)
Net cash flows generated from operations 3,566,100,927 2,406,484,448 5,929,116,887 NET INCREASE IN CASH AND
Income tax paid (499,506,046) (420,419,468) (156,934,010) CASH EQUIVALENTS 8,527,674,945 2,591,973,504 2,859,481,502
Net cash flows provided by operating activities 3,066,594,881 1,986,064,980 5,772,182,877
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 11,494,511,442 8,902,537,938 6,043,056,436
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Maturity of held-to-maturity investments CASH AND CASH EQUIVALENTS
(Note 10) 9,260,928,462 3,061,266,532 − AT END OF YEAR (Note 9) P
= 20,022,186,387 P
= 11,494,511,442 P
= 8,902,537,938
Disposal of investments in FVTPL (Note 10) 6,623,861,354 − −
Disposal of investments in FVOCI (Note 10) 38,081,160 − − See accompanying Notes to Consolidated Financial Statements.
Disposal of investment in AFS (Note 10) − 2,211,910,556 ‒
Short-term cash investments 205,696,807 − 2,097,301,354
Interest received 1,970,178,086 1,486,957,249 1,387,371,148
Acquisitions of:
AFS financial assets (Note 10) − (7,288,847) (386,727,521)
System development costs (Note 17) (67,917,997) (43,315,656) (48,198,547)
Property and equipment (Note 15) (817,353,180) (115,872,259) (277,907,204)
Short-term cash investments − (245,640,997) (99,998,562)
Investments at amortized cost (Note 10) (13,825,193,654) − −
HTM investments (Note 10) − (4,127,777,173) (7,330,048,203)
Investment properties (Note 14) (12,270,155,313) (6,051,285,636) (4,963,319,563)

(Forward)

90 VISTA LAND
*SGVFS034680* *SGVFS034680*
2018 ANNUAL REPORT 91
 VISTA LAND & LIFESCAPES, INC. AND SUBSIDIARIES -2-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
∂ The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights result in control. To support
1. Corporate Information this presumption and when the Group 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
Vista Land & Lifescapes, Inc. (the Parent Company) was incorporated in the Republic of the
it has power over an investee, including:
Philippines and registered with the Securities and Exchange Commission (SEC) on
∂ The contractual arrangement with the other vote holders of the investee
February 28, 2007 with a corporate life of 50 years. The Parent Company’s registered office
∂ Rights arising from other contractual arrangements
address is at Lower Ground Floor, Building B, EVIA Lifestyle Center, Vista City, Daanghari,
Almanza II, Las Piñas City. Formerly, the registered office address is at 3rd Level Starmall ∂ The Group’s voting rights and potential voting rights
Las Piñas, CV Starr Avenue, Philamlife Village, Pamplona, Las Piñas City. The change in
address was approved by the Board of Directors (BOD) and SEC on May 15, 2017 and on The Group re-assesses whether or not it controls an investee if facts and circumstances
December 29, 2017, respectively. The Parent Company is a publicly-listed investment holding indicate that there are changes to one or more of the three elements of control. Consolidation
company which is 52.01% owned by Fine Properties, Inc., (Ultimate Parent Company), of a subsidiary begins when the Group obtains control over the subsidiary and ceases when
47.99% owned by PCD Nominee Corporations and the other entities and individuals. the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included or excluded in the
The Parent Company is the holding company of the Vista Group (the Group) which is engaged consolidated financial statements from the date the Group gains control or until the date the
in real estate industry. The Group has six (6) wholly-owned subsidiaries, namely: Brittany Group ceases to control the subsidiary.
Corporation (Brittany), Crown Asia Properties, Inc. (CAPI), Vista Residences Inc. (VRI),
Camella Homes, Inc. (CHI), Communities Philippines, Inc. (CPI) and VLL International Inc. Profit or loss and each component of other comprehensive income (OCI) are attributed to the
(VII), and an 88.34% owned subsidiary, Starmalls, Inc. The Group is divided into horizontal, equity holders of the Parent Company and to the noncontrolling interests (NCI), even if this
vertical and commercial and others segment. The Group caters on the development and sale results in the NCI having a deficit balance. The consolidated financial statements are
of residential lots and units and residential high-rise condominium through its horizontal and prepared using uniform accounting policies for like transactions and other similar events.
vertical projects, respectively. Its commercial and others segment focuses on the When necessary, adjustments are made to the financial statements of subsidiaries to bring
development, leasing and management of shopping malls and commercial centers all over their accounting policies into line with the Group’s accounting policies. All intra-group assets
the Philippines and hotel operations. and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for
2. Basis of Preparation
as an equity transaction. If the Group loses control over a subsidiary, it derecognizes the
related assets (including goodwill), liabilities, non-controlling interest and other components
The accompanying consolidated financial statements of the Group have been prepared on a
of equity, while any resultant gain or loss is recognized in profit or loss. Any investment
historical cost basis, except for the financial assets measured at fair value through other
retained is recognized at fair value.
comprehensive income (FVOCI) in 2018 and available-for-sale financial assets in 2017 which
have been measured at fair value. The consolidated financial statements are presented in
The consolidated financial statements include the financial statements of the Parent Company
Philippine Peso (P
= ) which is the functional and presentation currency of the Parent Company,
and the following subsidiaries. The voting rights held by the Group in these subsidiaries are
and all amounts are rounded to the nearest Philippine Peso unless otherwise indicated.
in proportion of their ownership interest.
Statement of Compliance Percentage of Ownership
The consolidated financial statements of the Group have been prepared in compliance with 2018 2017 2016
Philippine Financial Reporting Standards (PFRS). Brittany 100.00% 100.00% 100.00%
Balmoral Resources Corporation* 36.93 36.93 ‒
Basis of Consolidation CAPI 100.00 100.00 100.00
The consolidated financial statements comprise the financial statements of the Parent Balmoral Resources Corporation* 16.93 16.93 ‒
Company and its subsidiaries as of December 31, 2018 and 2017, and for each of the three VRI 100.00 100.00 100.00
years in the period ended December 31, 2018. Vista Leisure Club Corporation (VLCC) 100.00 100.00 100.00
Malay Resorts Holdings, Inc. (MRHI) 100.00 100.00 100.00
Control is achieved when the Group is exposed, or has rights, to variable returns from its Mella Hotel, Inc. 100.00 ‒ ‒
involvement with the investee and has the ability to affect those returns through its power over Balmoral Resources Corporation* 37.22 37.22 ‒
the investee. Specifically, the Group controls an investee if and only if the Group has:
(Forward)
∂ Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee)
∂ Exposure, or rights, to variable returns from its involvement with the investee, and

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Percentage of Ownership Noncontrolling Interests

2018 2017 2016 Noncontrolling interests represent the portion of profit or loss and net assets not owned,
CHI directly or indirectly, by the Group.
Household Development Corporation
(HDC) 100.00 100.00 100.00 Noncontrolling interests are presented separately in the consolidated statement of income,
Balmoral Resources Corporation* 8.92 8.92 ‒
consolidated statement of comprehensive income, and within equity in the consolidated
Mandalay Resources Corp. 100.00 100.00 100.00
C&P International Limited 100.00 100.00 100.00 statement of financial position, separately from parent shareholder’s equity. Any losses
Brittany Estates Corporation 100.00 100.00 100.00 applicable to the noncontrolling interests are allocated against the interests of the
Camella Sales Specialists, Inc. 100.00 100.00 ‒ noncontrolling interest even if this results to the noncontrolling interest having a deficit
Prima Casa Land & Houses, Inc. (PCLHI) 100.00 100.00 100.00 balance. The acquisition of an additional ownership interest in a subsidiary without a change
CPI 100.00 100.00 100.00 of control is accounted for as an equity transaction. Any excess or deficit of consideration
Communities Batangas, Inc. 100.00 100.00 100.00 paid over the carrying amount of the noncontrolling interest is recognized in equity of the
Communities Bulacan, Inc. 100.00 100.00 100.00 parent in transactions where the noncontrolling interest are acquired or sold without loss of
Communities Cebu, Inc. 100.00 100.00 100.00 control.
Communities Cagayan, Inc. 100.00 100.00 100.00
Communities Davao, Inc. 100.00 100.00 100.00 As at December 31, 2018 and 2017, percentage of noncontrolling interests pertaining to
Communities General Santos, Inc. 100.00 100.00 100.00 Starmalls, Inc. and its subsidiaries amounted to 11.66%. The voting rights held by the
Communities Isabela, Inc. 100.00 100.00 100.00
noncontrolling interests are in proportion of their ownership interest.
Communities Leyte, Inc. 100.00 100.00 100.00
Communities Naga, Inc. 100.00 100.00 100.00
Communities Iloilo, Inc. 100.00 100.00 100.00
Starmalls, Inc. was incorporated in the Republic of the Philippines and duly registered with
Communities Negros, Inc. 100.00 100.00 100.00 the Securities and Exchange Commission (SEC) on October 16, 1969, originally to pursue
Communities Pampanga, Inc. 100.00 100.00 100.00 mineral exploration. After obtaining SEC approval on November 10, 2004, it later changed its
Communities Pangasinan, Inc. 100.00 100.00 100.00 primary business and is now presently engaged in holding investments in shares of stock and
Communities Tarlac, Inc. 100.00 100.00 100.00 real estate business.
Communities Zamboanga, Inc. 100.00 100.00 100.00
Communities Ilocos, Inc. 100.00 100.00 100.00 The Parent and the subsidiaries are all domiciled and incorporated in the Philippines and are
Communities Bohol, Inc. 100.00 100.00 100.00 in the business of real estate development, leasing of commercial spaces and buildings and
Communities Quezon, Inc. 100.00 100.00 100.00 hotel and resorts operation, except for VII and C&P International Limited. The latter are
Communities Palawan, Inc. 100.00 100.00 100.00
incorporated in Grand Cayman Island and domiciled in Hong Kong and operates as holding
Communities Panay, Inc. 100.00 100.00 100.00
VII 100.00 100.00 100.00
companies.
Starmalls, Inc. 88.34 88.34 88.34
Manuela Corporation 98.40 98.40 98.40
Masterpiece Asia Properties, Inc. 100.00 100.00 100.00 3. Changes in Accounting Policies
*The Group effectively owns 100% of Balmoral Resources Corporation through Brittany, CAPI, VRI and HDC.
The Group applied PFRS 15 and PFRS 9 for the first time effective January 1, 2018. The
Acquisition of Balmoral Resources Corporation (BRC) nature and effect of the changes as a result of adoption of these new accounting standards
On October 16, 2017, in a Deed of Exchange, Brittany, VRI, CAPI, HDC, (Vista subsidiaries are described below.
for the purpose of this note) purchased from United Coconut Planters Bank (UCPB) the entire
outstanding shares of BRC representing 100% ownership. The respective ownership in the Unless otherwise stated, several other amendments and interpretations apply for the first time
shares of BRC of each of the Vista subsidiaries are disclosed above. in 2018, but do not have an impact on the consolidated financial statements of the Group.
The Group has not early adopted any standards, interpretations or amendments that have
The Group paid UCPB real estate inventories of the Group with cost of P = 983.24 million and been issued but are not yet effective.
paid cash of P= 575.45 million aggregating to P= 1,558.69 in exchange for the above shares of
BRC. Inventories given up are composed of condominium units, parking units, house and lot PFRS 15, Revenue from Contracts with Customers
and lot only properties of the Vista Subsidiaries. The above transaction was treated as sale PFRS 15 supersedes PAS 11, Construction Contracts, PAS 18, Revenue and related
of inventories in the normal course of business with the resulting gross profit of P = 867.32 Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with
million. As at the time of acquisition of BRC shares, the net assets in the books of BRC are its customers.
inventories with fair value of P= 2,469.01 million. These are composed of various raw and PFRS 15 establishes a five-step model to account for revenue arising from contracts with
developed lots in Dasmariñas and Bacoor, Cavite areas which will complement the overall customers and requires that revenue be recognized at an amount that reflects the
plans of the Group and will integrate the related land holdings and developments in the area. consideration to which an entity expects to be entitled in exchange for transferring goods or
services to a customer.

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PFRS 15 requires entities to exercise judgement, taking into consideration all of the relevant c. Upon sales cancellation, the repossessed inventory would be recorded at fair value plus
facts and circumstances when applying each step of the model to contracts with their cost to repossess (or fair value less cost to repossess if this would have been opted). This
customers. The standard also specifies the accounting for the incremental costs of obtaining would have increased retained earnings as at January 1, 2018 and gain from repossession
a contract and the costs directly related to fulfilling a contract. In addition, the standard in 2018. Currently, the Group records the repossessed inventory at original cost.
requires extensive disclosures.
The Group adopted PFRS 15 using the modified retrospective method of adoption with the
On February 14, 2018, the Philippines Interpretation Committee (PIC) issued PIC Q&A 2018- date of initial application of January 1, 2018. Under the modified retrospective method, the
12 (PIC Q&A) which provides guidance on some implementation issues of PFRS 15 affecting standard can be applied either to all contracts at the date of initial application or only to
real estate industry. On October 25, 2018 and February 8, 2019, the Philippine SEC issued contracts that are not completed at this date. The Group elected to apply the standard to
SEC Memorandum Circular No. 14 Series of 2018 and SEC Memorandum Circular No. 3 those contracts not completed as at January 1, 2018. The cumulative effect of initially
Series of 2019, respectively, providing relief to the real estate industry by deferring the applying PFRS 15 is recognized at the date of initial application as an adjustment to the
application of the following provisions of the above PIC Q&A for a period of three (3) years: opening balance of retained earnings. Therefore, the comparative information was not
a. Exclusion of land and uninstalled materials in the determination of percentage of restated and continues to be reported under PAS 11, PAS 18 and related Interpretations.
completion (POC) discussed in PIC Q&A No. 2018-12-E
b. Accounting for significant financing component discussed in PIC Q&A No. 2018-12-D The effect of adopting PFRS 15 at January 1, 2018 follows:
c. Accounting to Common Usage Service Area (CUSA) Charges discussed in PIC Q&A
December 31,
No. 2018-12-H 2017
d. Accounting for Cancellation of Real Estate Sales discussed in PIC Q&A No. 2018-14. As previously January 1, 2018
reported Reference Adjustment As restated
The SEC Memorandum Circular also provided the mandatory disclosure requirements should Current Assets
Current portion of:
an entity decide to avail of any relief. Disclosures should include: Receivables P
= 37,664,761,951 (c) (P
= 16,510,880,873) P
= 21,153,881,078
a. Discussion of the deferral of the subject implementation issues in the PIC Q&A Contract assets − (a, c, d) 11,185,439,860 11,185,439,860
b. Qualitative discussion of the impact to the financial statements had the concerned Cost to obtain contract − (b) 569,073,606 569,073,606
Real estate inventories 61,050,860,792 (d) 99,004,029 61,149,864,821
application guideline in the PIC Q&A has been adopted. Other current assets 4,017,873,284 (b) (621,906,747) 3,395,966,537
c. Should any of the deferral options result into a change in accounting policy (e.g., when an Noncurrent Assets
entity excludes land and/or uninstalled materials in the POC calculation under the previous Receivables - net of current portion 6,517,705,884 (c) − 6,517,705,884
standard but opted to include such components under the relief provided by the circular), Contract assets - net of current portion − (c) 5,630,150,751 5,630,150,751
Cost to obtain contract - net of current portion − (b) 384,776,659 384,776,659
such accounting change will have to be accounted for under PAS 8, Accounting Policies, Total Assets 109,251,201,911 735,657,285 109,986,859,196
Changes in Accounting Estimates and Errors, i.e., retrospectively, together with the Current Liabilities
corresponding required quantitative disclosures. Accounts and other payables 13,274,954,736 (b) 462,104,499 13,737,059,235
Customers’ advances and deposits 3,617,888,803 (c) (2,403,352,854) 1,214,535,949
Current portion of contract liabilities − (c, d) 1,586,991,914 1,586,991,914
Effective January 1, 2021, real estate companies will adopt PIC Q&A No. 2018-12 and PIC Noncurrent Liabilities
Q&A No. 2018-14 and any subsequent amendments thereof retrospectively or as the SEC Contract liabilities - net of current portion − (c) 882,631,065 882,631,065
will later prescribe. Deferred tax liabilities - net 3,216,367,742 (d) 62,184,799 3,278,552,541
Total Liabilities 20,109,211,281 590,559,423 20,699,770,704
Equity
The Group availed of the deferral of adoption of the above specific provisions of PIC Q&A, Retained earnings 44,136,812,797 (a, b, d) 145,097,864 44,281,910,661
except for the treatment of CUSA charges as discussed under PIC Q&A No. 2018-12-H Non-controlling interest 1,767,898,281 − 1,767,898,281
wherein the current accounting policy of the Group is consistent with the conclusion of PIC Total Equity 45,904,711,078 145,097,864 46,049,808,942
Q&A. Had these deferred provisions been adopted, it would have the following impact to the
Set out below, are the amounts by which each financial statement line item is affected as at
financial statements:
and for the year ended December 31, 2018 as a result of adoption of PFRS 15. The adoption
a. The exclusion of land and uninstalled materials in the determination of POC would reduce
of PFRS 15 did not have a material impact on OCI or the Group’s operating, investing and
the percentage of completion of real estate projects resulting to the decrease in retained
financing cash flows.
earnings as at January 1, 2018 as well as a decrease in the revenue from real estate sales
in 2018.
b. The mismatch between the POC of the real estate projects and right to an amount of
consideration based on the schedule of payments explicit in the contract to sell would
constitute a significant financing component. Interest income is recognized for contract
assets and interest expense for contract liabilities using effective interest rate method
which would have impacted retained earnings as at January 1, 2018 and impacted the
revenue from real estate sales in 2018. Currently, any significant financing component
arising from the mismatch discussed above is not considered for revenue recognition
purposes.

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The consolidated statement of comprehensive income for the year ended December 31, 2018 The nature of the adjustments as at January 1, 2018 and the reasons for the significant
follows: changes in the consolidated statement of financial position as at December 31, 2018 and the
consolidated statement of comprehensive income for the year ended December 31, 2018 are
Amounts prepared under
described below:
Increase
Reference PFRS 15 Previous PFRS (Decrease)
Revenue a. The Group has determined that there is only one performance obligation in the contract to
Real estate sales (a) P
= 31,856,087,078 P
= 31,677,014,965 P
= 179,072,113 sell. The Group has determined that each of its contracts to sell covering subdivision land,
Rental income 6,464,740,183 6,464,740,183 −
Interest income from installment contracts
condominium units and residential house units has a single performance obligation
receivable 680,058,436 680,058,436 − together with the services to transfer the title of real estate property upon full payment of
Miscellaneous income 1,260,519,593 1,260,519,593 − the buyer. Input method was used for the measure of progress. Before the adoption of
40,261,405,290 40,082,333,177 179,072,113 PFRS 15, the Group has treated the serviced land and land improvements (condominium
Cost and expenses
Cost of real estate sales (d) 15,177,160,125 15,127,058,296 50,101,829 and residential house units) as two separate performance obligations. The previous basis
Operating expenses (b) 9,558,527,842 9,558,527,842 − of measurement of progress was input method for serviced land and output method for
24,735,687,967 24,685,586,138 50,101,829 land improvements. In addition, revenue from the service for title transfer was recognized
Other income (expense) as revenue at a point in time when the transfer of the title happened.
Interest income 1,225,783,467 1,225,783,467 −
Interest and other financing charges (4,169,762,915) (4,169,762,915) −
(2,943,979,448) (2,943,979,448) − The above resulted to increase in Contract assets and Retained earnings by P
=238.44
Income before income tax 12,581,737,875 12,452,767,591 128,970,284 million as of January 1, 2018.
Provision for income tax (d) 2,047,274,160 2,039,535,943 7,738,217
Net income = 10,534,463,715 P
P = 10,413,231,648 P
= 121,232,067 This also resulted to increase in Contract assets and Retained earnings by P
=417.51 million
Attributable to: as of December 31, 2018 and increase in Real estate sales by P = 179.07 million for the year
Equity holders of the Parent Company = 10,238,356,840 P
P = 10,117,124,773 P
= 121,232,067
ended December 31, 2018.
Non-controlling interest 296,106,875 296,106,875 −
Basic / Diluted Earnings per Share (Note 29) P
= 0.798 P
= 0.789 P
= 0.009
b. The Group has sales agents who are responsible for the marketing and sale of its real
estate projects. These real estate sales agents typically receive sales commissions
The consolidated statement of financial position as of December 31, 2018 follows:
equivalent to a certain percentage of the total contract price, paid based on milestone of
Amounts prepared under payments by the customers. These are recorded as contract cost and are fully accrued
Increase/ based on the total expected payments. Contract cost is amortized using the percentage
Reference PFRS 15 Previous PFRS (Decrease) of completion method consistent with the measure of progress for revenue recognition.
ASSETS
Current Assets
Before PFRS 15, the sales commissions are recorded as prepayment but accrual for the
Receivables (c) P
= 21,849,774,501 P
= 44,711,907,887 (P
= 22,862,133,386) unpaid portion is done only after a certain payment milestone and not during meeting the
Contract assets (a, c, d) 14,456,428,216 − 14,456,428,216 criteria of a contract. The prepaid commission was previously amortized using percentage
Cost to obtain contract (b) 747,489,877 − 747,489,877
of completion, consistent with the requirements of PFRS 15.
Real estate inventories (d) 63,297,698,106 63,248,795,906 48,902,200
Other current assets (b) 6,071,421,411 6,960,570,611 (889,149,200)
Noncurrent Assets The above resulted to increase in Commission payable under “Accounts and other
Receivables - net of current portion (c) 8,481,261,708 8,481,261,708 − payables” by P=462.10 million, increase in Cost to obtain contract by P
= 953.85 million,
Contract assets - net of current portion (c) 8,853,547,856 − 8,853,547,856 decrease in Prepaid commission under “Other current assets” by P =621.91 million and
Cost to obtain contract - net of current portion (b) 529,024,635 − 529,024,635
Total Assets P
= 124,286,646,310 P
= 123,402,536,112 P
= 884,110,198
decrease in Retained earnings by P =130.16 million as of January 1, 2018 in the
LIABILITIES AND EQUITY
consolidated statements of financial position.
Current Liabilities
Accounts and other payables (b) P
= 15,736,890,359 P
= 15,219,364,067 P
= 517,526,292 This also resulted to increase in Commission payable under “Accounts and other
Customers’ advances and deposits (c) 1,297,839,418 3,592,395,540 (2,294,556,122) payables” by P
=517.53 million, increase in Cost to obtain contract by P
= 1,276.51 million,
Current portion of contract liabilities (c, d) 1,617,322,395 − 1,617,322,395 decrease in Prepaid commission under “Other current assets” by P =889.15 million, and
Noncurrent Liabilities decrease in Retained earnings by P=130.16 million as of December 31, 2018.
Contract liabilities - net of current portion (c) 707,564,686 − 707,564,686
Deferred tax liabilities - net (d) 3,820,591,845 3,750,668,829 69,923,016
Total Liabilities 23,180,208,703 22,562,428,436 617,780,267 c. The Group records any excess of progress of work over the right to an amount of
Equity consideration that is unconditional, recognized as installment contracts receivable, as
Retained earnings (a, b, d) 52,836,513,207 52,570,183,277 266,329,930 contract asset while the excess of collection or receivable over progress of work is
Non-controlling interest 2,017,046,802 2,017,046,802 − recorded as contract liability.
Total Equity P
= 54,853,560,009 P
= 54,587,230,079 P
= 266,329,930

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Before the adoption of PFRS 15, contract asset is not presented separately from ∂ As comparative information is not restated, the Group is not required to provide a third
installment contracts receivables while contract liabilities are presented as customer statement of financial information at the beginning of the earliest comparative period in
deposit. For those receivables with interest rate explicit in the contract, the Group records accordance with PAS 1, Presentation of Financial Statements.
interest income based on the principal amount multiplied by the applicable interest rate
while for those receivables without explicit interest rate stated in the contract were As of January 1, 2018, the Group has reviewed and assessed all of its existing financial
recorded at fair value at initial recognition and the related interest is accreted using assets, and financial liabilities. The table below illustrates the classification and measurement
effective interest rate method. of financial assets and financial liabilities under PFRS 9 and PAS 39 at the date of initial
application. The accounting policies adopted by the Group in its evaluation of the
The above resulted to reclassification of Installment contracts receivable under classification and measurement categories under PFRS 9 are discussed in a separate section
“Receivables” by P= 16,510.88 million to Contract assets and reclassification of Customers’ of this note.
advances and deposits of P =2,403.35 million to Contract liabilities in the consolidated
statements of financial position as of January 1, 2018. Classification and measurement
The measurement category and the carrying amount of financial assets and liabilities in
This also resulted to increase in Contract asset by P
=22,862.13 million, increase in Contract accordance with PAS 39 and PFRS 9 as of January 1, 2018 are compared as follows:
liabilities by P
= 2,294.56 million, decrease in Installment contracts receivable under
“Receivables” by P = 22,862.13 million, and decrease in Customers’ advances and deposits Original Original
by P= 2,294.56 million as of December 31, 2018. Measurement Carrying New Measurement New Carrying
Category under Amount under Category under Amount under
d. In addition to the adjustments described above, other items in the consolidated financial Financial Assets PAS 39 PAS 39 PFRS 9 PFRS 9
Cash in banks Loans and Financial assets at
statements were adjusted to increase Contract assets, Real estate inventories, Contract receivables P
= 10,642,888,364 amortized cost P
= 10,642,888,364
liabilities, Deferred tax liabilities and Retained earnings by P =66.27 million, P
= 99.00 million, Cash equivalents Loans and Financial assets at
P
= 66.27 million, P= 62.18 million and P = 36.82 million, respectively, as at January 1, 2018. receivables 836,501,312 amortized cost 836,501,312
Short-term cash Loans and Financial assets at
investments receivables 345,639,559 amortized cost 345,639,559
Additional adjustments also resulted to increase in Contract assets by P = 30.33 million, Restricted cash Loans and Financial assets at
increase in Contract liabilities by P= 30.33 million, increase in Deferred tax liabilities by receivables 934,220,201 amortized cost 934,220,201
P
= 69.92 million, and decrease in Retained earnings by P = 21.02 million as of Quoted debt securities Financial assets at fair
December 31, 2018. The adoption further resulted to increase in Cost of real estate sales Available for sale value through profit or
financial assets 6,491,361,776 loss 6,491,361,776
by P
= 50.10 million, increase Provision for income tax by P= 7.74 million, and increase in Real Quoted and unquoted Financial assets at fair
estate inventories by P= 48.90 million for the year ended December 31, 2018. equity securities Available for sale value through other
financial assets 121,580,343 comprehensive income 121,580,343
The adoption of PFRS 15 did not have a material impact on OCI or the Group’s operating, Held-to-maturity Held-to-maturity Financial assets at
investments financial assets 21,827,289,447 amortized cost 21,827,289,447
investing and financing cash flows. Installment contracts Loans and Financial assets at
receivables receivables 30,943,358,823 amortized cost 30,943,358,823
PFRS 9, Financial Instruments Accounts receivables Loans and Financial assets at
PFRS 9 replaces PAS 39, Financial Instruments: Recognition and Measurement, for annual receivables 7,449,417,822 amortized cost 7,449,417,822
Receivable from Loans and Financial assets at
periods beginning on or after 1 January 1, 2018, bringing together all three aspects of the related parties receivables 4,987,930,489 amortized cost 4,987,930,489
accounting for financial instruments: classification and measurement; impairment; and hedge
accounting. The classification of quoted debt securities to FVTPL, previously from AFS, resulted to the
transfer of accumulated unrealized gain on changes in fair value of P = 703.03 million from
The Group applied PFRS 9 using modified retrospective approach, with an initial application accumulated OCI to retained earnings beginning as at January 1, 2018.
date of January 1, 2018. The Group chose not to restate comparative figures as permitted by
the transitional provisions of PFRS 9, thereby resulting in the following impact: There were no changes to the classification and measurement of financial liabilities.
∂ Comparative information for prior periods will not be restated. The classification and
measurement requirements previously applied in accordance with PAS 39 and The Group does not have financial assets and financial liabilities which had previously been
disclosures required in PFRS 7 will be retained for the comparative periods. Accordingly, designated at FVPL to reduce an accounting mismatch in accordance with PAS 39 which had
the information presented for 2017 does not reflect the requirements of PFRS 9. been reclassified to amortized cost or FVOCI upon transition to PFRS 9.
∂ The Group will disclose the accounting policies for both the current period and the
comparative periods, one applying PFRS 9 beginning January 1, 2018 and one applying Impairment testing under expected credit loss (ECL) model
PAS 39 as of December 31, 2017. There is no re-measurement loss recognized in retained earnings as at January 1, 2018. The
∂ There was no difference between the previous carrying amount and the carrying amount use of ECL upon adoption of PFRS 9 as explained below, did not result to any additional
at the beginning of the annual reporting period that includes the date of initial application impairment loss. The adoption resulted to reversal of allowance for impairment losses of
that was recognized in the opening ‘Retained earnings’ or other component of equity, as P
= 332.44 million of the Group’s receivables as at January 1, 2018 resulting to increase in
appropriate.

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retained earnings beginning as at January 1, 2018 of P

= 232.71 million and deferred tax assets The resulting recovery rate coming from the above process, resulted to zero loss given default,
of P
= 99.73 million. thus resulting to no recognized impairment loss.

The adoption of PFRS 9 has fundamentally changed the Group’s accounting for impairment For other financial assets such as cash and cash equivalents, accounts receivables and
losses for financial assets by replacing PAS 39’s incurred loss approach with a forward- receivable from ultimate parent, ECLs are recognized in two stages. For credit exposures for
looking ECL approach. PFRS 9 requires the Group to record an allowance for impairment which there has not been a significant increase in credit risk since initial recognition, ECLs are
losses for all loans and other debt financial assets not held at fair value through profit or loss provided for credit losses that result from default events that are possible within the next 12-
(FVPL). ECLs are based on the difference between the contractual cash flows due in months (a 12-month ECL). For those credit exposures for which there has been a significant
accordance with the contract and all the cash flows that the Group expects to receive. The increase in credit risk since initial recognition, a loss allowance is required for credit losses
shortfall is then discounted at an approximation to the asset’s original effective interest rate. expected over the remaining life of the exposure, irrespective of the timing of the default (a
The expected cash flows will include net cash flows from the sale of collateral held or other lifetime ECL).
credit enhancements that are integral to the contractual terms.
For cash and cash equivalents, the Group applies the low credit risk simplification in
For installment contracts receivables (ICR) presented under receivables and contract assets, determining significant increase in credit risk since initial recognition. The probability of default
the Group has applied the standard’s simplified approach and has calculated ECLs based on and loss given defaults are publicly available and are considered to be low credit risk
lifetime expected credit losses. Therefore, the Group does not track changes in credit risk, investments. It is the Group’s policy to measure ECLs on such instruments on a 12-month
but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The basis. However, when there has been a significant increase in credit risk since origination,
Group has established a provision matrix that is based on its historical credit loss experience, the allowance will be based on the lifetime ECL. The Group uses the ratings from Standard
adjusted for forward-looking factors specific to the debtors and the economic environment. and Poor’s (S&P), Moody’s and Fitch to determine whether the debt instrument has
significantly increased in credit risk and to estimate ECLs.
The Group used the vintage analysis accounts for expected credit losses by calculating the
cumulative loss rates of a given ICR and contract asset pool. It derives the probability of Further, upon implementation of PFRS 9, all financial assets (i.e. debt investments at FVOCI,
default from the historical data of a homogenous portfolio that share the same origination financial assets at amortized cost and nontrade receivables) except installment contracts
period. The information on the number of defaults during fixed time intervals of the accounts receivable, are assessed for 12-month ECL (Stage 1, General Approach). Accordingly, the
is utilized to create the probability model. It allows the evaluation of the loan activity from its ECL for these financial assets are assessed to be insignificant.
origination period until the end of the contract period.
PIC Q&A on Advances to Contractors and PIC Q&A on Land Classification
In addition to life of loan loss data, primary drivers like macroeconomic indicators of qualitative The Group adopted PIC Q&A 2018-11, Classification of Land by Real Estate Developer and
factors such as forward-looking data on inflation rates, purchasing power, gross domestic PIC Q&A 2018-15, PAS 1- Classification of Advances to Contractors in the Nature of
product (GDP) growth rate and GDP were added to the expected loss calculation to reach a Prepayments: Current vs. Non-current starting January 1, 2018. The impact of adoption is
forecast supported by both quantitative and qualitative data points. applied retrospectively which resulted to the following reclassifications in the consolidated
statement of financial position as of December 31, 2017 and January 1, 2017.
The key inputs in the model include the Group’s definition of default and historical data of nine
years for the origination, maturity date and default date. The Group considers an ICR and As of December 31, 2017
contract asset in default when the Group forfeits and repossesses the property from the
customer through cancellation. However, in certain cases, the Group may also consider a As previously
financial asset to be in default when internal or external information indicates that the Group Reference reported Adjustment As restated
is unlikely to receive the outstanding contractual amounts in full before taking into account Current assets
any credit enhancements held by the Group. Real estate inventories (a) P
= 26,333,859,417 P
= 13,366,169,968 P= 39,700,029,385
Advances to contractors and 5,235,913,291 (2,309,011,038) 2,926,902,253
suppliers (b)
The probability of default is applied to the estimate of the loss arising on default which is based
on the difference between the contractual cash flows due and those that the Group would (Forward)
expect to receive, including from the repossession of the subject real estate property, net of Noncurrent assets
cash outflows. For purposes of calculating loss given default, accounts are segmented based Land and improvements (a) 35,029,871,677 (35,029,871,677) −
on facility/collateral type and completion. In calculating the recovery rates, the Group Investment properties (a) 37,437,658,962 21,663,701,709 59,101,360,671
considered collections of cash and/or cash from resale of real estate properties after Advances to contractors and
foreclosure, net of direct costs of obtaining and selling the real estate properties after the suppliers (b) − 2,309,011,038 2,309,011,038
default event such as commission, association dues, refurbishment, payment required under
Maceda law and cost to complete (for incomplete units). As these are future cash flows, these
are discounted back to the reporting date using the appropriate effective interest rate, usually
being the original EIR or an approximation thereof.

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As of January 1, 2017 On adoption, entities are required to apply the amendments without restating prior periods,
but retrospective application is permitted if elected for all three amendments and if other
As previously criteria are met. Early application of the amendments is permitted.
Reference reported Adjustment As restated
Current assets Adoption of these amendments did not have any impact to the Group because it does not
Real estate inventories (a) P
= 22,954,662,398 P
= 11,217,743,850 P
= 34,172,406,248 have share-based payment transactions.
Advances to contractors and
suppliers (b) 3,570,126,329 (357,772,814) 3,212,353,515
Noncurrent assets ∂ Amendments to PFRS 4, Insurance Contracts, Applying PFRS 9, Financial Instruments,
Land and improvements (a) 30,486,623,405 (30,486,623,405) − with PFRS 4
Investment properties (a) 35,855,803,306 19,268,879,555 55,124,682,861
Advances to contractors and The amendments address concerns arising from implementing PFRS 9, the new financial
suppliers (b) − 357,772,814 357,772,814 instruments standard before implementing the new insurance contracts standard. The
amendments introduce two options for entities issuing insurance contracts: a temporary
a. Land and improvements includes land which are composed of land properties previously exemption from applying PFRS 9 and an overlay approach. The temporary exemption is
approved by the Board of Directors upon purchase, to be develop into either (1) real estate first applied for reporting periods beginning on or after January 1, 2018. An entity may
development for sale, (2) property, plant and equipment for hotel operations and (3) elect the overlay approach when it first applies PFRS 9 and apply that approach
commercial properties for leasing and for capital appreciation. Before the adoption of PIC retrospectively to financial assets designated on transition to PFRS 9. The entity restates
Q&A 2018-11, these were classified as one line item under land and land improvements comparative information reflecting the overlay approach if, and only if, the entity restates
and the classification into current and non-current asset was based on the Group’s timing comparative information when applying PFRS 9.
to start the development of the property. Upon adoption of PIC Q&A 2018-11 effective
January 1, 2018, these were classified accordingly into real estate inventories or The amendments are not applicable to the Group since the Group has no activities that
investment property as applicable; and the related current and non-current classification are connected with insurance contracts.
based on the eventual classification of the asset in the balance sheet.
∂ Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value (Part of
b. Advances to contractors and suppliers previously presented under current assets, Annual Improvements to PFRSs 2014 - 2016 Cycle)
representing prepayments for the construction of investment property was reclassified to
non-current asset. Before the adoption of PIC Q&A 2018-15, the classification of the The amendments clarify that an entity that is a venture capital organization, or other
Group is based the timing of application of these advances against billings and timing of qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to
delivery of goods and services. This interpretation aims to classify the prepayment based measure its investments in associates and joint ventures at fair value through profit or
on the actual realization of such advances based on the determined usage/realization of loss. They also clarify that if an entity that is not itself an investment entity has an interest
the asset to which it is intended for (e.g. inventory, investment property, property plant and in an associate or joint venture that is an investment entity, the entity may, when applying
the equity method, elect to retain the fair value measurement applied by that investment
equipment).
entity associate or joint venture to the investment entity associate’s or joint venture’s
interests in subsidiaries. This election is made separately for each investment entity
The restatement did not result to the presentation of the third statement of financial
associate or joint venture, at the later of the date on which (a) the investment entity
position given the limited accounts affected. associate or joint venture is initially recognized; (b) the associate or joint venture becomes
an investment entity; and (c) the investment entity associate or joint venture first becomes
The effect of adoption of these PIC Q&As resulted to retrospective reclassification on the a parent.
Group’s operating and investing cash flows as disclosed in Note 33.
The amendments are not applicable to the Group since the Group is not a venture capital
∂ Amendments to PFRS 2, Share-based Payment, Classification and Measurement of organization or alike.
Share-based Payment Transactions
∂ Amendments to PAS 40, Investment Property, Transfers of Investment Property
The amendments to PFRS 2 address three main areas: the effects of vesting conditions
on the measurement of a cash-settled share-based payment transaction; the classification The amendments clarify when an entity should transfer property, including property under
of a share-based payment transaction with net settlement features for withholding tax construction or development into, or out of investment property. The amendments state
obligations; and the accounting where a modification to the terms and conditions of a that a change in use occurs when the property meets, or ceases to meet, the definition of
share-based payment transaction changes its classification from cash settled to equity investment property and there is evidence of the change in use. A mere change in
settled. management’s intentions for the use of a property does not provide evidence of a change
in use. The amendments should be applied prospectively to changes in use that occur on
or after the beginning of the annual reporting period in which the entity first applies the

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amendments. Retrospective application is only permitted if this is possible without the use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be
of hindsight. required to separately recognize the interest expense on the lease liability and the
depreciation expense on the right-of-use asset.
The Group applied the amendments prospectively for all transfer into or out of investment
property. Lessees will be also required to remeasure the lease liability upon the occurrence of
certain events (e.g., a change in the lease term, a change in future lease payments
∂ Philippine Interpretation IFRIC-22, Foreign Currency Transactions and Advance resulting from a change in an index or rate used to determine those payments). The lessee
Consideration will generally recognize the amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
The interpretation clarifies that, in determining the spot exchange rate to use on initial
recognition of the related asset, expense or income (or part of it) on the derecognition of Lessor accounting under PFRS 16 is substantially unchanged from today’s accounting
a non-monetary asset or non-monetary liability relating to advance consideration, the date under PAS 17. Lessors will continue to classify all leases using the same classification
of the transaction is the date on which an entity initially recognizes the nonmonetary asset principle as in PAS 17 and distinguish between two types of leases: operating and finance
or non-monetary liability arising from the advance consideration. If there are multiple leases.
payments or receipts in advance, then the entity must determine a date of the transactions
for each payment or receipt of advance consideration. Entities may apply the PFRS 16 also requires lessees and lessors to make more extensive disclosures than
amendments on a fully retrospective basis. Alternatively, an entity may apply the under PAS 17.
interpretation prospectively to all assets, expenses and income in its scope that are initially
recognized on or after the beginning of the reporting period in which the entity first applies Early application is permitted, but not before an entity applies PFRS 15. A lessee can
the interpretation or the beginning of a prior reporting period presented as comparative choose to apply the standard using either a full retrospective or a modified retrospective
information in the financial statements of the reporting period in which the entity first approach. The standard’s transition provisions permit certain reliefs.
applies the interpretation.
The new lease standard will impact its operating lease agreements with its branch offices
The adoption of the interpretation did not have any significant impact to the Group. which are currently accounted for as operating leases, which will now require to be
recorded as right of use asset and the related lease liability. There is no significant impact
Pronouncements issued but not yet effective are listed below. Unless otherwise indicated, the to the Group as a lessor for its investment portfolio. There will be more disclosures as
Group does not expect that the future adoption of the said pronouncements will have a required by the new standard.
significant impact on its consolidated financial statements. The Group intends to adopt the
following pronouncements when they become effective. ∂ Amendments to PAS 28, Long-term Interests in Associates and Joint Ventures

Effective beginning on or after January 1, 2019 The amendments to PAS 28 clarify that entities should account for long-term interests in
an associate or joint venture to which the equity method is not applied using PFRS 9. An
∂ Amendments to PFRS 9, Prepayment Features with Negative Compensation entity shall apply these amendments for annual reporting periods beginning on or after
January 1, 2019. Earlier application is permitted.
The amendments to PFRS 9 allow debt instruments with negative compensation
prepayment features to be measured at amortized cost or fair value through other The Group does not expect this amendment to have significant impact to the consolidated
comprehensive income. financial statements because it does not currently have interests in associates and joint
An entity shall apply these amendments for annual reporting periods beginning on or after ventures.
January 1, 2019. Earlier application is permitted.
∂ Philippine Interpretation IFRIC-23, Uncertainty over Income Tax Treatments
The Group will apply this amendment if there are transactions of this nature in the future.
None of its current transactions will fall under this feature. The interpretation addresses the accounting for income taxes when tax treatments involve
uncertainty that affects the application of PAS 12 and does not apply to taxes or levies
∂ PFRS 16, Leases outside the scope of PAS 12, nor does it specifically include requirements relating to
interest and penalties associated with uncertain tax treatments.
PFRS 16 sets out the principles for the recognition, measurement, presentation and
disclosure of leases and requires lessees to account for all leases under a single on- The interpretation specifically addresses the following:
balance sheet model similar to the accounting for finance leases under PAS 17, Leases. o Whether an entity considers uncertain tax treatments separately
The standard includes two recognition exemptions for lessees – leases of ’low-value’ o The assumptions an entity makes about the examination of tax treatments by taxation
assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of authorities
12 months or less). At the commencement date of a lease, a lessee will recognize a liability o How an entity determines taxable profit (tax loss), tax bases, unused tax losses,
to make lease payments (i.e., the lease liability) and an asset representing the right to use unused tax credits and tax rates

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o How an entity considers changes in facts and circumstances beginning of the first annual reporting period beginning on or after January 1, 2019, with
early application permitted. These amendments are currently not applicable to the Group
An entity must determine whether to consider each uncertain tax treatment separately or but may apply to future transactions.
together with one or more other uncertain tax treatments. The approach that better
predicts the resolution of the uncertainty should be followed. ∂ Amendments to PAS 12, Income Tax Consequences of Payments on Financial
Instruments Classified as Equity
The Group is currently assessing the impact of adopting this interpretation.
The amendments clarify that the income tax consequences of dividends are linked more
∂ Amendments to PAS 19, Employee Benefits, Plan Amendment, Curtailment or Settlement directly to past transactions or events that generated distributable profits than to
distributions to owners. Therefore, an entity recognizes the income tax consequences of
The amendments to PAS 19 address the accounting when a plan amendment, curtailment dividends in profit or loss, other comprehensive income or equity according to where the
or settlement occurs during a reporting period. The amendments specify that when a plan entity originally recognized those past transactions or events.
amendment, curtailment or settlement occurs during the annual reporting period, an entity
is required to: An entity applies those amendments for annual reporting periods beginning on or after
January 1, 2019, with early application is permitted. These amendments are not relevant
∂ Determine current service cost for the remainder of the period after the plan to the Group because dividends declared by the Group do not give rise to tax obligations
amendment, curtailment or settlement, using the actuarial assumptions used to under the current tax laws.
remeasure the net defined benefit liability (asset) reflecting the benefits offered under
the plan and the plan assets after that event ∂ Amendments to PAS 23, Borrowing Costs, Borrowing Costs Eligible for Capitalization
∂ Determine net interest for the remainder of the period after the plan amendment,
curtailment or settlement using: the net defined benefit liability (asset) reflecting the The amendments clarify that an entity treats as part of general borrowings any borrowing
benefits offered under the plan and the plan assets after that event; and the discount originally made to develop a qualifying asset when substantially all of the activities
rate used to remeasure that net defined benefit liability (asset). necessary to prepare that asset for its intended use or sale are complete.

The amendments also clarify that an entity first determines any past service cost, or a gain An entity applies those amendments to borrowing costs incurred on or after the beginning
or loss on settlement, without considering the effect of the asset ceiling. This amount is of the annual reporting period in which the entity first applies those amendments. An entity
recognized in profit or loss. An entity then determines the effect of the asset ceiling after applies those amendments for annual reporting periods beginning on or after January 1,
the plan amendment, curtailment or settlement. Any change in that effect, excluding 2019, with early application permitted.
amounts included in the net interest, is recognized in other comprehensive income.
Since the Group’s current practice is in line with these amendments, the Group does not
The amendments apply to plan amendments, curtailments, or settlements occurring on or expect any effect on its consolidated financial statements upon adoption.
after the beginning of the first annual reporting period that begins on or after January 1,
2019, with early application permitted. These amendments will apply only to any future Effective beginning on or after January 1, 2020
plan amendments, curtailments, or settlements of the Group.
∂ Amendments to PFRS 3, Definition of a Business
∂ Amendments to PFRS 3, Business Combinations, and PFRS 11, Joint Arrangements,
Previously Held Interest in a Joint Operation The amendments to PFRS 3 clarify the minimum requirements to be a business, remove
the assessment of a market participant’s ability to replace missing elements, and narrow
The amendments clarify that, when an entity obtains control of a business that is a joint the definition of outputs. The amendments also add guidance to assess whether an
operation, it applies the requirements for a business combination achieved in stages, acquired process is substantive and add illustrative examples. An optional fair value
including remeasuring previously held interests in the assets and liabilities of the joint concentration test is introduced which permits a simplified assessment of whether an
operation at fair value. In doing so, the acquirer remeasures its entire previously held acquired set of activities and assets is not a business.
interest in the joint operation.
An entity applies those amendments prospectively for annual reporting periods beginning
A party that participates in, but does not have joint control of, a joint operation might obtain on or after January 1, 2020, with earlier application permitted.
joint control of the joint operation in which the activity of the joint operation constitutes a
business as defined in PFRS 3. The amendments clarify that the previously held interests These amendments will apply on future business combinations of the Group.
in that joint operation are not remeasured.

An entity applies those amendments to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning on or after
January 1, 2019 and to transactions in which it obtains joint control on or after the

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∂ Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting not constitute a business, however, is recognized only to the extent of unrelated investors’
Policies, Changes in Accounting Estimates and Errors, Definition of Material interests in the associate or joint venture.

The amendments refine the definition of material in PAS 1 and align the definitions used On January 13, 2017, the Financial Reporting Standards Council deferred the original
across PFRSs and other pronouncements. They are intended to improve the effective date of January 1, 2017 of the said amendments until the International
understanding of the existing requirements rather than to significantly impact an entity’s Accounting Standards Board (IASB) completes its broader review of the research project
materiality judgements. on equity accounting that may result in the simplification of accounting for such
transactions and of other aspects of accounting for associates and joint ventures.
An entity applies those amendments prospectively for annual reporting periods beginning
on or after January 1, 2020, with earlier application permitted.
4. Summary of Significant Accounting Policies
The amendments will apply on future disclosures of the Group.
Current and Noncurrent Classification
Effective beginning on or after January 1, 2021 The Group presents assets and liabilities in consolidated statement of financial position based
on current/noncurrent classification.
∂ PFRS 17, Insurance Contracts
PFRS 17 is a comprehensive new accounting standard for insurance contracts covering An asset is current when:
recognition and measurement, presentation and disclosure. Once effective, PFRS 17 will ∂ Expected to be realized or intended to be sold or consumed in normal operating cycle;
replace PFRS 4, Insurance Contracts. This new standard on insurance contracts applies ∂ Held primarily for the purpose of trading;
to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), ∂ Expected to be realized within 12 months after reporting date; or
regardless of the type of entities that issue them, as well as to certain guarantees and ∂ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability
financial instruments with discretionary participation features. A few scope exceptions will for at least 12 months after reporting date.
apply.
All other assets are classified as noncurrent.
The overall objective of PFRS 17 is to provide an accounting model for insurance contracts
that is more useful and consistent for insurers. In contrast to the requirements in PFRS A liability is current when:
4, which are largely based on grandfathering previous local accounting policies, PFRS 17 ∂ It is expected to be settled in the normal operating cycle;
provides a comprehensive model for insurance contracts, covering all relevant accounting ∂ It is held primarily for the purpose of trading;
aspects. The core of PFRS 17 is the general model, supplemented by: ∂ It is due to be settled within 12 months after reporting date; or
∂ There is no unconditional right to defer the settlement of the liability for at least 12 months
∂ A specific adaptation for contracts with direct participation features (the variable fee after reporting date.
approach)
∂ A simplified approach (the premium allocation approach) mainly for short-duration The Group classifies all other liabilities as noncurrent.
contracts
PFRS 17 is effective for reporting periods beginning on or after January 1, 2021, with Deferred tax assets and liabilities are classified as noncurrent assets and liabilities,
comparative figures required. Early application is permitted. respectively.

The Group is not engaged in the business of insurance; hence, this standard is not Fair Value Measurement
applicable to the Group. The Group measures financial assets at FVOCI and FVTPL at fair values at each reporting
date. Also, fair values of loans and receivables, other financial liabilities and non-financial
Deferred effectivity assets measured at cost such as investment properties are disclosed in Notes 12 and 36.

∂ Amendments to PFRS 10 and PAS 28, Sale or Contribution of Assets between an Investor Fair value is the price that would be received to sell an asset or paid to transfer a liability in
and its Associate or Joint Venture 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
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the liability takes place either:
loss of control of a subsidiary that is sold or contributed to an associate or joint venture.
∂ In the principal market for the asset or liability, or
The amendments clarify that a full gain or loss is recognized when a transfer to an
∂ In the absence of a principal market, in the most advantageous market for the asset or
associate or joint venture involves a business as defined in PFRS 3, Business
liability.
Combinations. Any gain or loss resulting from the sale or contribution of assets that does
The principal or the most advantageous market must be accessible to by the Group.

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The fair value of an asset or a liability is measured using the assumptions that market asset not at fair value through profit or loss, transaction costs. Trade receivables are
participants would use when pricing the asset or liability, assuming that market participants measured at the transaction price determined under PFRS 15. Refer to the accounting
act in their economic best interest. policies for Revenue from contracts with customers.

A fair value measurement of a non-financial asset takes into account a market participant’s In order for a financial asset to be classified and measured at amortized cost or fair value
ability to generate economic benefits by using the asset in its highest and best use or by through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and
selling it to another market participant that would use the asset in its highest and best use. interest’ (SPPI) on the principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level.
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 The Group’s business model for managing financial assets refers to how it manages its
inputs and minimizing the use of unobservable inputs. financial assets in order to generate cash flows. The business model determines whether
All assets and liabilities for which fair value is measured or disclosed in the consolidated cash flows will result from collecting contractual cash flows, selling the financial assets, or
financial statements are categorized within the fair value hierarchy based on the lowest level both.
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 Purchases or sales of financial assets that require delivery of assets within a time frame
liabilities established by regulation or convention in the market place (regular way trades) are
∂ Level 2 - Valuation techniques for which the lowest level input that is significant to the fair recognized on the trade date, i.e., the date that the Group commits to purchase or sell the
value measurement is directly or indirectly observable asset.
∂ Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
For assets and liabilities that are recognized in the consolidated financial statements at fair ∂ Financial assets at amortized cost (debt instruments)
value on a recurring basis, the Group determines whether transfers have occurred between ∂ Financial assets at fair value through OCI with recycling of cumulative gains and losses
Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is (debt instruments)
significant to the fair value measurement as a whole) at the end of each reporting period. ∂ Financial assets designated at fair value through OCI with no recycling of cumulative gains
and losses upon derecognition (equity instruments)
Cash and Cash Equivalents ∂ Financial assets at fair value through profit or loss
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 Financial assets at amortized cost (debt instruments)
three (3) months or less from dates of placement and that are subject to an insignificant risk This category is the most relevant to the Group. The Group measures financial assets at
of changes in value. amortized cost if both of the following conditions are met:
∂ The financial asset is held within a business model with the objective to hold financial
Short-term Cash Investments assets in order to collect contractual cash flows and the contractual terms of the financial
Short-term cash investments consist of money market placements made for varying periods asset give rise on specified dates to cash flows that are solely payments of principal and
of more than three (3) months and up to twelve (12) months. These investments earn interest interest on the principal amount outstanding.
at the respective short-term rates. ∂ Financial assets at amortized cost are subsequently measured using the effective interest
(EIR) method and are subject to impairment. Gains and losses are recognized in profit or
Financial Instruments loss when the asset is derecognized, modified or impaired.

Financial Instruments effective January 1, 2018 The Group’s financial assets at amortized cost includes cash and cash equivalents, short-
A financial instrument is any contract that gives rise to a financial asset of one entity and a term cash investments, receivables (except for advances to contractors, suppliers and
financial liability or equity instrument of another entity. brokers), receivable from related parties, and restricted cash under “Other current assets”,
and “Other noncurrent assets” and investments at amortized cost.
Financial assets
Initial recognition and measurement Financial assets at fair value through OCI (debt instruments)
Financial assets are classified, at initial recognition, as subsequently measured at amortized The Group measures debt instruments at fair value through OCI if both of the following
cost, fair value through other comprehensive income (OCI), and fair value through profit or conditions are met:
loss. (a) The financial asset is held within a business model with the objective of both holding to
collect contractual cash flows and;
The classification of financial assets at initial recognition depends on the financial asset’s
(b) Selling and the contractual terms of the financial asset give rise on specified dates to cash
contractual cash flow characteristics and the Group’s business model for managing them. flows that are solely payments of principal and interest on the principal amount outstanding
The Group initially measures a financial asset at its fair value plus, in the case of a financial

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For debt instruments at fair value through OCI, interest income, foreign exchange revaluation A derivative embedded within a hybrid contract containing a financial asset host is not
and impairment losses or reversals are recognized in the consolidated statement of accounted for separately. The financial asset host together with the embedded derivative is
comprehensive income and computed in the same manner as for financial assets measured required to be classified in its entirety as a financial asset at FVTPL.
at amortized cost. The remaining fair value changes are recognized in OCI. Upon
derecognition, the cumulative fair value change recognized in OCI is recycled to profit or loss. The Group’s quoted debt securities are classified as financial assets at FVTPL (Note 10).

The Group does not have debt instruments classified as financial assets at FVOCI. Impairment of Financial Assets
PFRS 9 introduces the single, forward-looking “expected loss” impairment model, replacing
Financial assets designated at fair value through OCI (equity instruments) the “incurred loss” impairment model under PAS 39.
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as
equity instruments designated at fair value through OCI when they meet the definition of equity The Group recognizes expected credit losses (ECL) for the following financial assets that are
under not measured at FVTPL:
PAS 32, Financial Instruments: Presentation and are not held for trading. The classification ∂ debt instruments that are measured at amortized cost and FVOCI;
is determined on an instrument-by-instrument basis. ∂ loan commitments; and
∂ financial guarantee contracts.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are
recognized as other income in the consolidated statement of comprehensive income when No ECL is recognized on equity investments.
the right of payment has been established, except when the Group benefits from such
proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are ECLs are measured in a way that reflects the following:
recorded in OCI. Equity instruments designated at fair value through OCI are not subject to ∂ an unbiased and probability-weighted amount that is determined by evaluating a range of
impairment assessment. possible outcomes;
∂ the time value of money; and
The Group’s equity instruments classified as financial assets designated at FVOCI includes ∂ reasonable and supportable information that is available without undue cost or effort at
investments in golf club shares and preferred shares of utility companies (Note 10). the reporting date about past events, current conditions and forecasts of future economic
conditions.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets at FVTPL include financial assets held for trading, financial assets Financial assets migrate through the following three stages based on the change in credit
designated upon initial recognition at fair value through profit or loss, or financial assets quality since initial recognition:
mandatorily required to be measured at fair value. Financial assets are classified as held for
trading if they are acquired for the purpose of selling or repurchasing in the near term. Stage 1: 12-month ECL
Derivatives, including separated embedded derivatives, are also classified as held for trading For credit exposures where there have not been significant increases in credit risk since initial
unless they are designated as effective hedging instruments. Financial assets with cash flows recognition and that are not credit-impaired upon origination, the portion of lifetime ECLs that
that are not solely payments of principal and interest are classified and measured at fair value represent the ECLs that result from default events that are possible within the 12-months after
through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt the reporting date are recognized.
instruments to be classified at amortized cost or at fair value through OCI, as described above,
debt instruments may be designated at fair value through profit or loss on initial recognition if Stage 2: Lifetime ECL - not credit-impaired
doing so eliminates, or significantly reduces, an accounting mismatch. For credit exposures where there have been significant increases in credit risk since initial
recognition on an individual or collective basis but are not credit-impaired, lifetime ECLs
Financial assets at FVTPL are carried in the consolidated statements of financial position at representing the ECLs that result from all possible default events over the expected life of the
fair value with net changes in fair value recognized in the consolidated statement of financial asset are recognized.
comprehensive income.
Stage 3: Lifetime ECL - credit-impaired
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is Financial assets are credit-impaired when one or more events that have a detrimental impact
separated from the host and accounted for as a separate derivative if: the economic on the estimated future cash flows of those financial assets have occurred. For these credit
characteristics and risks are not closely related to the host; a separate instrument with the exposures, lifetime ECLs are recognized and interest revenue is calculated by applying the
same terms as the embedded derivative would meet the definition of a derivative; and the credit-adjusted effective interest rate to the amortized cost of the financial asset.
hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognized in profit or loss. Reassessment
only occurs if there is either a change in the terms of the contract that significantly modifies
the cash flows that would otherwise be required or a reclassification of a financial asset out of
the fair value through profit or loss category.

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Loss Allowance Simplified Approach

Loss allowances are recognized based on 12-month ECL for debt investment securities that The simplified approach, where changes in credit risk are not tracked and loss allowances are
are assessed to have low credit risk at the reporting date. A financial asset is considered to measured at amounts equal to lifetime ECL, is applied to installment contracts receivable and
have low credit risk if: contract assets. The Group has established a provision matrix for accounts receivable and a
∂ the financial instrument has a low risk of default vintage analysis for installment contracts receivable that is based on historical credit loss
∂ the borrower has a strong capacity to meet its contractual cash flow obligations in the near experience, adjusted for forward-looking factors specific to the debtors and the economic
term environment.
∂ adverse changes in economic and business conditions in the longer term may, but will not
necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations. Financial liabilities
Initial recognition and measurement
The loss allowance recognized in the period is impacted by a variety of factors, as described Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
below: through profit or loss, loans and borrowings, payables, or as derivatives designated as
∂ Transfers between Stage 1 and Stage 2 and 3 due to the financial instruments hedging instruments in an effective hedge, as appropriate.
experiencing significant increases (or decreases) of credit risk or becoming credit-
impaired in the period, and the consequent “step up” (or “step down”) between 12-month All financial liabilities are recognized initially at fair value and, in the case of loans and
and lifetime ECL. borrowings and payables, net of directly attributable transaction costs.
∂ Additional allowances for new financial instruments recognized during the period, as well
as releases for financial instruments derecognized in the period; The Group’s financial liabilities include accounts and other payables, dividends payable, notes
∂ Impact on the measurement of ECL due to changes in PDs, LGDs and EADs in the period, payable, bank loans, loans payable, “Other noncurrent liabilities” (except for deferred output
arising from regular refreshing of inputs to models; tax and other statutory liabilities).
∂ Impacts on the measurement of ECL due to changes made to models and assumptions;
Subsequent measurement
∂ Discount unwind within ECL due to passage of time, as ECL is measured on a present
The measurement of financial liabilities depends on their classification, as described below:
value basis;
∂ Financial assets derecognized during the period and write-offs of allowances related to
Financial liabilities at fair value through profit or loss
assets that were written off during the period.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
The Group considers a debt investment security to have low credit risk when its credit risk
rating is equivalent to the globally understood definition of ‘investment grade’.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments
Determining the stage for impairment
entered into by the Group that are not designated as hedging instruments in hedge
At each reporting date, the Group assesses whether there has been a significant increase in
relationships as defined by PFRS 9. Separated embedded derivatives are also classified as
credit risk for financial assets since initial recognition by comparing the risk of default occurring
held for trading unless they are designated as effective hedging instruments.
over the expected life between the reporting date and the date of initial recognition. The
Group considers reasonable and supportable information that is relevant and available without
undue cost or effort for this purpose. This includes quantitative and qualitative information Gains or losses on liabilities held for trading are recognized in the consolidated statements of
and forward-looking analysis. comprehensive income.

An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a Financial liabilities designated upon initial recognition at fair value through profit or loss are
subsequent period, asset quality improves and also reverses any previously assessed designated at the initial date of recognition, and only if the criteria in PFRS 9 are satisfied. The
significant increase in credit risk since origination, then the loss allowance measurement Group has not designated any financial liability as at fair value through profit or loss.
reverts from lifetime ECL to 12-months ECL.
Loans and borrowings
General Approach This is the category most relevant to the Group. After initial recognition, interest-bearing loans
Under the general approach, at each reporting date, the Group recognizes a loss allowance and borrowings are subsequently measured at amortized cost using the EIR method. Gains
based on either 12-month ECLs or Lifetime ECLs, depending on whether there has been a and losses are recognized in profit or loss when the liabilities are derecognized as well as
significant increase in credit risk on the financial instrument since initial recognition. The through the EIR amortization process.
changes in the loss allowance balance are recognized in profit or loss as an impairment gain
or loss. This approach was applied to the ECL calculation of cash and cash equivalents, short Amortized cost is calculated by taking into account any discount or premium on acquisition
term cash investments, restricted cash, accounts receivable, investments at amortized cost and fees or costs that are an integral part of the EIR. The EIR amortization is included as
and receivables from related parties. finance costs in the consolidated statement of comprehensive income.

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This category generally applies to accounts and other payables, dividends payable, notes Loans and receivables
payable, bank loans, loans payable and “Other noncurrent liabilities” (except for deferred Loans and receivables are nonderivative financial assets with fixed or determinable payments
output tax and other statutory liabilities) presented in the consolidated statement of financial that are not quoted in an active market. They are not entered into with the intention of
position. immediate or short-term resale and are not classified as financial assets held-for-trading,
designated as AFS or as financial assets at FVPL. Receivables are recognized initially at fair
Financial Instruments prior to January 1, 2018 value. After initial measurement, loans and receivables are subsequently measured at cost
or at amortized cost using the effective interest method, less allowance for impairment losses.
Date of recognition Amortized cost is calculated by taking into account any discount or premium on acquisition
The Group recognizes a financial asset or a financial liability in the consolidated statement of and fees that are an integral part of the effective interest rate (EIR). The amortization, if any,
financial position when it becomes a party to the contractual provisions of the instrument. is included in profit or loss. The losses arising from impairment of receivables are recognized
Purchases or sales of financial assets that require delivery of assets within the time frame in profit or loss. These financial assets are included in current assets if maturity is within
established by regulation or convention in the marketplace are recognized on the trade date, twelve (12) months from the financial reporting date. Otherwise, these are classified as
which is the date when the Group commits to purchase or sell the asset. noncurrent assets.

Initial recognition of financial instruments This accounting policy applies primarily to the Group’s cash and cash equivalents, short-term
All financial assets and financial liabilities are initially recognized at fair value. Except for cash investments, receivables (except for advances to private companies, brokers and
financial assets and liabilities at fair value through profit or loss (FVPL), the initial contractors), receivables from related parties and cash restricted for use included in other
measurement of financial assets and liabilities include transaction costs. The Group classifies current and noncurrent assets.
its financial assets in the following categories: financial assets at FVPL, held-to-maturity
(HTM) investments, AFS financial assets, and loans and receivables. HTM investments
HTM investments are quoted non-derivative financial assets with fixed or determinable
The Group classifies its financial liabilities as financial liabilities at FVPL or other financial payments and fixed maturities for which management has the positive intention and ability to
liabilities. hold to maturity. Where the Group sells or reclassifies other than an insignificant amount of
HTM investments, the entire category would be tainted and reclassified at fair value as AFS
The classification depends on the purpose for which the investments were acquired and financial assets. After initial measurement, these financial assets are subsequently measured
whether these are quoted in an active market. The financial assets of the Group are of the at amortized cost using the effective interest method, less allowance for impairment.
nature of loans and receivable, AFS financial assets and HTM financial assets, while its Amortized cost is calculated by taking into account any discount or premium on acquisition
financial liabilities are of the nature of other financial liabilities. Management determines the and fees that are an integral part of the EIR. The amortization is included as part of interest
classification at initial recognition and re-evaluates such designation, where allowed and and other income from investments in the consolidated statement of comprehensive income.
appropriate, at every reporting date. Gains and losses are recognized in profit or loss in the consolidated statement of
comprehensive income when the HTM investments are derecognized. Any impairment losses
Financial instruments are classified as liability or equity in accordance with the substance of are charged to current operations.
the contractual arrangement. Interest, dividends, gains and losses relating to a financial
instrument or a component that is a financial liability, are reported as expense or income. As of December 31, 2017, the Group has investments in HTM (Note 9).
Distributions to holders of financial instruments classified as equity are charged directly to
equity, net of any related income tax benefits. AFS financial assets
AFS financial assets are nonderivative financial assets that are designated as such or do not
“Day 1” difference qualify to be classified or designated as financial assets at FVPL, HTM investments or loans
Where the transaction price in a non-active market is different from the fair value from other and receivables. These are purchased and held indefinitely, and may be sold in response to
observable current market transactions in the same instrument or based on a valuation liquidity requirements or changes in market conditions.
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 profit or After initial measurement, AFS financial assets are subsequently measured at fair value with
loss under “Interest income” and “Interest and other financing charges” accounts unless it unrealised gains or losses recognized in OCI and credited to the OCI until the investment is
qualifies for recognition as some other type of asset or liability. In cases where fair value is derecognized, at which time, the cumulative gain or loss is recognized in other operating
determined using data which is not observable, the difference between the transaction price income, or the investment is determined to be impaired, when the cumulative loss is
and model value is only recognized in profit or loss when the inputs become observable or reclassified from the OCI to the consolidated statement of comprehensive income in interest
when the instrument is derecognized. For each transaction, the Group determines the and other financing charges. Interest earned whilst holding AFS financial assets is reported
appropriate method of recognizing the “Day 1” difference amount. as interest income using the EIR method.

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When the investment is disposed of, the cumulative gain or loss previously recognized in OCI Financial assets carried at amortized cost
is recognized as gain or loss on disposal in profit or loss. Where the Group holds more than The Group first assesses whether an objective evidence of impairment exists individually for
one investment in the same security these are deemed to be disposed of on a first-in first-out financial assets that are individually significant. If there is objective evidence that an
basis. Interest earned on holding AFS financial assets are reported as interest and other impairment loss on a financial asset carried at amortized cost (i.e., loans and receivables or
income from investments using the EIR. Dividends earned on holding AFS financial assets HTM investments) has been incurred, the amount of the loss is measured as the difference
are recognized in profit or loss as part of miscellaneous income when the right to receive between the assets’ carrying amount and the present value of the estimated future cash flows
payment has been established. The losses arising from impairment of such investments are discounted at the assets original EIR (excluding future credit losses that have not been
recognized as provisions for impairment losses in profit or loss. incurred). If it is determined that no objective evidence of impairment exists for an individually
assessed financial asset, the asset, together with the other assets that are not individually
When the fair value of AFS equity financial assets cannot be measured reliably because of significant and were thus not individually assessed for impairment, is included in a group of
lack of reliable estimates of future cash flows and discount rates necessary to calculate the financial assets with similar credit risk characteristics and that group of financial assets is
fair value of unquoted equity instruments, these investments are carried at cost, less any collectively assessed for impairment.
impairment losses.
Assets that are individually assessed for impairment and for which an impairment loss is or
As of December 31, 2017 and 2016, AFS financial assets comprise of quoted and unquoted continues to be recognized are not included in a collective assessment of impairment.
equity securities and quoted debt instruments. The quoted and unquoted equity securities
are reclassified as FVOCI as at January 1, 2018. The quoted debt securities are reclassified For the purpose of a collective evaluation of impairment, financial assets are grouped on the
as FVTPL as at January 1, 2018. basis of credit risk characteristics such as selling price of the lots and residential houses, past-
due status and term.
Other financial liabilities
Other financial liabilities are initially recognized at the fair value of the consideration received Future cash flows in a group of financial assets that are collectively evaluated for impairment
less directly attributable transaction costs. are estimated on the basis of historical loss experience for assets with credit risk
characteristics similar to those in the group. Historical loss experience is adjusted on the
After initial recognition, other financial liabilities are subsequently measured at amortized cost basis of current observable data to reflect the effects of current conditions that did not affect
using the effective interest method. Amortized cost is calculated by taking into account any the period on which the historical loss experience is based and to remove the effects of
discount or premium on the issue and fees that are an integral part of the EIR. Gains and conditions in the historical period that do not exist currently. The methodology and
losses are recognized in profit or loss when the liabilities are derecognized (redemption is a assumptions used for estimating future cash flows are reviewed regularly by the Group to
form of derecognition), as well as through the amortization process. Any effects of reduce any differences between loss estimates and actual loss experience.
restatement of foreign currency-denominated liabilities are recognized in profit or loss.
The carrying amount of the asset is reduced through the use of an allowance account and the
The financial liabilities measured at cost are accounts and other payables and other amount of loss is charged to profit or loss. Financial assets carried at amortized costs,
noncurrent liabilities. The financial liabilities measured at amortized cost are notes payable, together with the associated allowance accounts, are written off when there is no realistic
bank loans and loans payable (except for deferred output tax and other statutory liabilities). prospect of future recovery and all collateral has been realized. If, in a subsequent year, the
amount of the estimated impairment loss decreases because of an event occurring after the
Impairment of Financial Assets impairment was recognized, the previously recognized impairment loss is reversed. Any
The Group assesses at each financial reporting date whether there is objective evidence that subsequent reversal of an impairment loss is recognized in profit or loss, to the extent that the
a financial asset or group of financial assets is impaired. A financial asset or a group of carrying value of the asset does not exceed its amortized cost at the reversal date.
financial assets is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition of AFS financial assets carried at fair value
the asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the For AFS financial assets, the Group assesses at each reporting date whether there is
estimated future cash flows of the financial asset or the group of financial assets that can be objective evidence that an investment or a group of investments is impaired. In the case of
reliably estimated. The fact that title of the real estate properties are transferred only to the equity investments classified as AFS, objective evidence would include a significant or
buyer upon full payment of the contract price is considered in the evaluation of impairment. prolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated
Evidence of impairment may include indications that the borrower or a group of borrowers is against the original cost of the investment and ‘prolonged’ against the period in which the fair
experiencing significant financial difficulty, default or delinquency in interest or principal value has been below its original cost. When there is evidence of impairment, the cumulative
payments, and where observable data indicate that there is measurable decrease in the loss - measured as the difference between the acquisition cost and the current fair value, less
estimated future cash flows, such as changes in arrears or economic conditions that correlate any impairment loss on that investment previously recognized in the consolidated statement
with defaults. of comprehensive income is removed from OCI and recognized in the statement of profit or
loss. Impairment losses on equity investments are not reversed through profit or loss;
increases in their fair value after impairment are recognized in OCI.

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The determination of what is ‘significant’ or ‘prolonged’ requires judgement. In making this Offsetting Financial Instruments under PFRS 9 and PAS 39
judgement, the Group evaluates, among other factors, the duration or extent to which the fair Financial assets and financial liabilities are offset and the net amount reported in the
value of an investment is less than its cost. In the case of debt instruments classified as AFS, consolidated statement of financial position if, and only if, there is a currently enforceable legal
the impairment is assessed based on the same criteria as financial assets carried at amortized right to offset the recognized amounts and there is an intention to settle on a net basis, or to
cost. However, the amount recorded for impairment is the cumulative loss measured as the realize the asset and settle the liability simultaneously.
difference between the amortized cost and the current fair value, less any impairment loss on
that investment previously recognized in the statement of profit or loss. Real Estate Inventories
Real estate inventories consist of subdivision land, residential houses and lots and
Future interest income continues to be accrued based on the reduced carrying amount of the condominium units for sale and development. These are properties acquired or being
asset, using the rate of interest used to discount the future cash flows for the purpose of constructed for sale in the ordinary course of business rather than to be held for rental or
measuring the impairment loss. The interest income is recorded as part of finance income. If, capital appreciation. These are held as inventory and are measured at the lower of cost and
in a subsequent year, the fair value of a debt instrument increases and the increase can be net realizable value (NRV).
objectively related to an event occurring after the impairment loss was recognized in the
statement of profit or loss, the impairment loss is reversed through the statement of profit or Cost includes:
loss. ∂ Acquisition cost of subdivision land;
∂ Amounts paid to contractors for construction and development of subdivision land,
AFS financial assets carried at cost residential houses and lots and condominium units; and
If there is an objective evidence that an impairment loss on an unquoted equity instrument ∂ Capitalized borrowing costs, planning and design costs, cost of site preparation,
that is not carried at fair value because its fair value cannot be reliably measured, the amount professional fees for legal services, property transfer taxes, construction overheads and
of the loss is measured as the difference between the carrying amount and the present value other related costs.
of estimated future cash flows discounted at the current market rate of return for a similar
financial asset. NRV is the estimated selling price in the ordinary course of the business, based on market
prices at the reporting date, less costs to complete and the estimated costs of sale. The
Derecognition of Financial Assets and Financial Liabilities under PFRS 9 and PAS 39 carrying amount of inventories is reduced through the use of allowance account and the
Financial asset amount of loss is charged to profit or loss.
A financial asset (or, where applicable, a part of a group of financial assets) is derecognized
where: (a) the rights to receive cash flows from the assets have expired; (b) the Group retains The cost of inventory recognized in profit or loss on disposal is determined with reference to
the right to receive cash flows from the asset, but has assumed an obligation to pay them in the specific costs incurred on the property sold and an allocation of any non-specific costs.
full without material delay to a third-party under a “pass-through” arrangement; or (c) the The total costs are allocated pro-rata based on the relative size of the property sold.
Group has transferred its right to receive cash flows from the asset and either: (i) has
transferred substantially all the risks and rewards of the asset, or (ii) has neither transferred Creditable Withholding Tax
nor retained the risks and rewards of the asset but has transferred control of the asset. Creditable withholding tax pertains to taxes withheld on income payments and may be applied
against income tax due. The balance of taxes withheld is recovered in future period.
Where the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, and has neither transferred nor retained substantially all the Value-Added Tax
risks and rewards of the asset nor transferred control of the asset, the asset is recognized to Input tax represents the VAT due or paid on purchases of goods and services subjected to
the extent of the Group’s continuing involvement in the asset. Continuing involvement that VAT that the Group can claim against any future liability to the BIR for output VAT on sale of
takes the form of a guarantee over the transferred asset is measured at the lower of the goods and services subjected to VAT. The input tax can also be recovered as tax credit under
original carrying amount of the asset and the maximum amount of consideration that the certain circumstances against future income tax liability of the Group upon approval of the BIR
Group could be required to repay. and/or Bureau of Customs. Input tax is stated at its estimated net realizable values. A
valuation allowance is provided for any portion of the input tax that cannot be claimed against
Financial liability output tax or recovered as tax credit against future income tax liability. Input tax is recorded
A financial liability is derecognized when the obligation under the liability is discharged or under current assets in the statement of financial position.
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 For its VAT-registered activities, when VAT from sales of goods and/or services (output VAT)
substantially modified, such an exchange or modification is treated as a derecognition of the exceeds VAT passed on from purchases of goods or services (input VAT), the excess is
original liability and the recognition of a new liability, and the difference in the respective recognized as payable in the consolidated statement of financial position. When VAT passed
carrying amounts is recognized in profit or loss. on from purchases of goods or services (input VAT) exceeds VAT from sales of goods and/or
services (output VAT), the excess is recognized as an asset in the consolidated statement of
financial position up to the extent of the recoverable amount.

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For its non-VAT registered activities, the amount of VAT passed on from its purchases of Investment properties are derecognized when either they have been disposed of or when the
goods or service is recognized as part of the cost of goods/asset acquired or as part of the investment property is permanently withdrawn from use and no future economic benefit is
expense item, as applicable. expected from its disposal. Any gain or loss on the retirement or disposal of an investment
property is recognized in profit or loss in the year of retirement or disposal.
Prepaid Expenses
Prepaid expenses are carried at cost less the amortized portion. These typically comprise Transfers are made to investment property when there is a change in use, evidenced by
prepayments for marketing fees, taxes and licenses, rentals and insurance. ending of owner-occupation, commencement of an operating lease to another party or ending
of construction or development. Transfers are made from investment property when, and only
Construction Materials and Others when, there is a change in use, evidenced by commencement of owner-occupation or
Construction materials are valued at the lower of cost or NRV. Cost is determined using the commencement of development with a view to sale. Transfers between investment property,
moving average method. NRV is the replacement cost. owner-occupied property and inventories do not change the carrying amount of the property
transferred and they do not change the cost of the property for measurement or for disclosure
Hotel Inventories purposes.
Hotel inventories consists of food and beverage and hotel suppliers and are carried at the
lower of cost or NRV. Property and Equipment
Property and equipment are carried at cost less accumulated depreciation and any
Deposit for Real Estate Purchases and Others impairment in value. The initial cost of property and equipment consists of its purchase price,
Deposit for real estate purchases and others consist of advance payments to land owners including import duties, taxes and any directly attributable costs of bringing the asset to its
which will be applied against the selling price of the real properties that will be acquired. The working condition and location for its intended use.
application is expected to be within 12 months after the reporting date.
Depreciation and amortization of property and equipment commences once the property and
Project Development Costs equipment are available for use and computed using the straight-line basis over the estimated
Project development costs pertain to costs incurred on various on-going projects under a Land useful life of property and equipment as follows:
Development Agreements (LDAs) entered into by the Group with individuals, private
companies and entities under common control. Years
Building and building improvements 10 to 40
Investment Properties Transportation equipment 2 to 5
Investment properties comprise completed property and property under construction or Office furniture, fixtures and equipment 2 to 5
re-development that are held to earn rentals or for capital appreciation or both. Investment Construction equipment 2 to 5
properties, except for land, are carried at cost less accumulated depreciation and amortization Other fixed assets 1 to 5
and any impairment in value. Land is carried at cost less any impairment in value.
Building improvements are amortized on a straight-line basis over the term of the lease or the
Expenditures incurred after the investment property has been put in operation, such as repairs EUL of the asset, whichever is shorter.
and maintenance costs, are normally charged against income in the period in which the costs
are incurred. The useful lives and depreciation and amortization method are reviewed annually to ensure
that the period and method of depreciation and amortization are consistent with the expected
Construction-in-progress (CIP) is stated at cost. This includes cost of construction and other pattern of economic benefits from items of property and equipment.
direct costs. CIP is not depreciated until such time as the relevant assets are completed and
put into operational use. Construction-in-progress are carried at cost and transferred to the When property and equipment are retired or otherwise disposed of, the cost of the related
related investment property account when the construction and related activities to prepare accumulated depreciation and amortization and accumulated provision for impairment losses,
the property for its intended use are complete, and the property is ready for occupation. if any, are removed from the accounts and any resulting gain or loss is credited to or charged
against current operations.
Depreciation and amortization are computed using the straight-line method over the estimated
useful lives (EUL) of the assets, regardless of utilization. The EUL and the depreciation and Fully depreciated and amortized property and equipment are retained in the accounts until
amortization method are reviewed periodically to ensure that the period and method of they are no longer in use. No further depreciation and amortization is charged against current
depreciation and amortization are consistent with the expected pattern of economic benefits operations.
from items of investment properties.
Systems Development Costs
The EUL of buildings and building improvements is 10 to 40 years. Costs associated with developing or maintaining computer software programs are recognized
as expense as incurred. Costs that are directly associated with identifiable and unique
software controlled by the Group and will generate economic benefits exceeding costs beyond

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one year, are recognized as intangible assets to be measured at cost less accumulated Own equity instruments which are reacquired (treasury shares) are recognized at cost and
amortization and provision for impairment losses, if any. deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale,
issue or cancellation of the Group’s own equity instruments. Any difference between the
System development costs recognized as assets are amortized using the straight-line method carrying amount and the consideration, if reissued, is recognized in additional paid-in capital.
over their useful lives, but not exceeding a period of three years. Where an indication of Voting rights related to treasury shares are nullified for the Group and no dividends are
impairment exists, the carrying amount of computer system development costs is assessed allocated to them respectively. When the shares are retired, the capital stock account is
and written down immediately to its recoverable amount. reduced by its par value and the excess of cost over par value upon retirement is debited to
additional paid-in capital to the extent of the specific or average additional paid-in capital when
Impairment of Nonfinancial Assets the shares were issued and to retained earnings for the remaining balance.
This accounting policy relates to property and equipment, investment properties, project
development costs, deposits, model house accessories, systems development costs and The retained earnings is restricted to payments of dividends to the extent of the cost of
other assets. treasury shares.
The Group assesses as at reporting date whether there is an indication that nonfinancial Business Combinations and Goodwill
assets may be impaired. If any such indication exists, or when annual impairment testing for Business combinations are accounted for using the acquisition method. The cost of an
an asset is required, the Group makes an estimate of the asset’s recoverable amount. An acquisition is measured as the aggregate of the consideration transferred, measured at
asset’s recoverable amount is calculated as the higher of the asset’s or cash-generating unit’s acquisition date fair value and the amount of any NCI in the acquiree. For each business
fair value less costs to sell and its value in use and is determined for an individual asset, combination, the acquirer measures the NCI in the acquiree either at fair value or at the
unless the asset does not generate cash inflows that are largely independent of those assets proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are
or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, expensed and included in operating expenses. When the Group acquires a business, it
the asset is considered impaired and is written down to its recoverable amount. In assessing assesses the financial assets and liabilities assumed for appropriate classification and
value in use, the estimated future cash flows are discounted to their present value using a designation in accordance with the contractual terms, economic circumstances and pertinent
pre-tax discount rate that reflects current market assessment of the time value of money and conditions as at the acquisition date. This includes the separation of embedded derivatives
the risks specific to the asset. Impairment losses of continuing operations are recognized in in host contracts by the acquiree.
profit or loss in those expense categories consistent with the function of the impaired asset.
If the business combination is achieved in stages, the acquisition date fair value of the
An assessment is made at each financial reporting date as to whether there is an indication acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the
that previously recognized impairment losses may no longer exist or may have decreased. If acquisition date through consolidated statement of income. Any contingent consideration to
such indication exists, the recoverable amount is estimated. A previously recognized be transferred by the acquirer will be recognized at fair value at the acquisition date.
impairment loss is reversed only if there has been a change in the estimates used to determine Subsequent changes to the fair value of the contingent consideration, which is deemed to be
the asset’s recoverable amount since the last impairment loss was recognized. If that is the an asset or liability, will be recognized in accordance with PAS 39 either in consolidated
case, the carrying amount of the asset is increased to its recoverable amount. That increased statement of income or as a change to OCI. If the contingent consideration is not within the
amount cannot exceed the carrying amount that would have been determined, net of scope of PAS 39, it is measured in accordance with the appropriate PFRS. Contingent
depreciation and amortization, had no impairment loss been recognized for the asset in prior consideration that is classified as equity is not measured and subsequent settlement is
years. Such reversal is recognized in profit or loss unless the asset is carried at revalued accounted for within equity.
amount, in which case the reversal is treated as revaluation increase in OCI. After such
reversal, the depreciation and amortization charge is adjusted in future periods to allocate the Goodwill is initially measured at cost being the excess of the aggregate of the consideration
asset’s revised carrying amount, less any residual value, on a systematic basis over its transferred and the amount recognized for NCI and any previous interest held over the net
remaining useful life. identifiable assets acquired and liabilities assumed. If the consideration is lower than the fair
value of the net assets of the subsidiary acquired, the difference is recognized in consolidated
Equity statement of income.
Capital stock is measured at par value for all shares subscribed, issued and outstanding.
When the shares are sold at premium, the difference between the proceeds at the par value After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
is credited to “Additional paid-in capital” account. Direct costs incurred related to equity For the purpose of impairment testing, goodwill acquired in a business combination is, from
issuance are chargeable to “Additional paid-in capital” account. If additional paid-in capital is the acquisition date, allocated to each of the Group’s cash-generating units that are expected
not sufficient, the excess is charged against retained earnings. When the Group issues more to benefit from the combination, irrespective of whether other assets or liabilities of the
than one class of stock, a separate account is maintained for each class of stock and the acquiree are assigned to those units.
number of shares issued.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit
Retained earnings represent accumulated earnings of the Group less dividends declared. It is disposed of, the goodwill associated with the operation disposed of is included in the
includes the accumulated equity in undistributed earnings of consolidated subsidiaries which carrying amount of the operation when determining the gain or loss on disposal of the
are not available for dividends until declared by the subsidiaries.

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operation. Goodwill disposed of in this circumstance is measured based on the relative values form part of total project costs on a prospective basis and is allocated between costs of sales
of the operation disposed of and the portion of the cash-generating unit retained. and real estate inventories.

If the initial accounting for a business combination can be determined only provisionally by Any excess of progress of work over the right to an amount of consideration that is
the end of the period in which the combination is effected because either the fair values to be unconditional, recognized as installment contracts receivable, under trade receivables, are
assigned to the acquiree’s identifiable assets, liabilities or contingent liabilities or the cost of included in the “contract asset” account in the asset section of the consolidated statement of
the combination can be determined only provisionally, the acquirer shall account for the financial position.
combination using those provisional values. The acquirer shall recognize any adjustments to
those provisional values as a result of completing the initial accounting within twelve months Any excess of collections over the total of recognized installment contracts receivable and
of the acquisition date as follows: (i) the carrying amount of the identifiable asset, liability or contract asset are included in the “contract liabilities” account in the liabilities section of the
contingent liability that is recognized or adjusted as a result of completing the initial accounting consolidated statement of financial position.
shall be calculated as if its fair value at the acquisition date had been recognized from that
date; (ii) goodwill or any gain recognized shall be adjusted by an amount equal to the Cost of real estate sales
adjustment to the fair value at the acquisition date of the identifiable asset, liability or The Group recognizes costs relating to satisfied performance obligations as these are
contingent liability being recognized or adjusted; and (iii) comparative information presented incurred. These include costs of land, land development costs, building costs, professional
for the periods before the initial accounting for the combination is complete shall be presented fees, depreciation, permits and licenses and capitalized borrowing costs. These costs are
as if the initial accounting has been completed from the acquisition date. allocated to the saleable area, with the portion allocable to the sold area being recognized as
costs of sales while the portion allocable to the unsold area being recognized as part of real
Revenue and Cost Recognition for Real Estate Sales Effective January 1, 2018 estate inventories.

Revenue from Contract with Customers In addition, the Group recognizes as an asset only costs that give rise to resources that will
The Group primarily derives its real estate revenue from the sale of developed horizontal and be used in satisfying performance obligations in the future and that are expected to be
vertical real estate projects. Revenue from contracts with customers is recognized when recovered.
control of the goods or services are transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those goods or Contract Balances
services. The Group has generally concluded that it is the principal in its revenue
arrangements, except for the provisioning of water and electricity services in its mall retail Receivables
spaces and office leasing activities, wherein it is acting as agent. A receivable represents the Group’s right to an amount of consideration that is unconditional
(i.e., only the passage of time is required before payment of the consideration is due).
The disclosures of significant accounting judgements, estimates and assumptions relating to
revenue from contracts with customers are provided in Note 5. Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to
Real estate sales the customer. If the Group performs by transferring goods or services to a customer before
The Group derives its real estate revenue from sale of developed house and lot and the customer pays consideration or before payment is due, a contract asset is recognized for
condominium units. Revenue from the sale of these real estate project spread over time the earned consideration that is conditional.
across the course of the construction since the Group’s performance does not create an asset
with an alternative use and the Group has an enforceable right for performance completed to Contract liabilities
date. A contract liability is the obligation to transfer goods or services to a customer for which the
Group has received consideration (or an amount of consideration is due) from the customer.
In measuring the progress of performance obligation over time, the Group uses input method. If a customer pays consideration before the Group transfers goods or services to the
input methods recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction customer, a contract liability is recognized when the payment is made or the payment is due
of a performance obligation. Progress is measured based on actual resources consumed (whichever is earlier). Contract liabilities are recognized as revenue when the Group performs
such as materials, labor hours expended and actual overhead incurred relative to the total under the contract.
expected inputs to the satisfaction of that performance obligation. The Group uses the cost
accumulated by the accounting department to determine the actual resources used. Input The contract liabilities also include payments received by the Group from the customers for
method exclude the effects of any inputs that do not depict the entity’s performance in which revenue recognition has not yet commenced.
transferring control of goods or services to the customer.
Costs to obtain contract
Estimated development costs include costs of land, land development, house construction The incremental costs of obtaining a contract with a customer are recognized as an asset if
costs, building costs, professional fees, depreciation of equipment directly used in the the Group expects to recover them. The Group has determined that commissions paid to
construction, payments for permits and licenses. Revisions in estimated development costs brokers and marketing agents on the sale of pre-completed real estate units are deferred
brought about by increases in projected costs in excess of the original budgeted amounts, when recovery is reasonably expected and are charged to expense in the period in which the

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related revenue is recognized as earned. Commission expense is included in the “Real estate where the Group has material obligations under the sales contract to complete the project
costs and expenses” account in the consolidated statement of comprehensive income. after the property is sold, the equitable interest has been transferred to the buyer, construction
is beyond preliminary stage (i.e., engineering, design work, construction contracts execution,
Costs incurred prior to obtaining contract with customer are not capitalized but are expensed site clearance and preparation, excavation and the building foundation are finished, and the
as incurred. costs incurred or to be incurred can be measured reliably). Under this method, revenue is
recognized as the related obligations are fulfilled, measured principally on the basis of the
Amortization, derecognition and impairment of capitalized costs to obtain a contract estimated completion of a physical proportion of the contract work.
The Group amortizes capitalized costs to obtain a contract to cost of sales over the expected
construction period using percentage of completion following the pattern of real estate Any excess of collections over the recognized receivables are included in the “Customers’
revenue recognition. The amortization is included within operating expenses. advances and deposits” account in the liabilities section of the consolidated statement of
financial position.
Capitalized costs to obtain a contract is derecognized either when it is disposed of or when
no further economic benefits are expected to flow from its use or disposal. When a sale of real estate does not meet the requirements for revenue recognition, the sale
is accounted for under the deposit method. Under this method, revenue is not recognized,
At each reporting date, the Group determines whether there is an indication that cost to obtain and the receivable from the buyer is not recorded. The real estate inventories continue to be
a contract maybe impaired. If such indication exists, the Group makes an estimate by reported on the consolidated statement of financial position as “Real estate inventories” and
comparing the carrying amount of the assets to the remaining amount of consideration that the related liability as deposits under “Customers’ advances and deposits”.
the Group expects to receive less the costs that relate to providing services under the relevant
contract. In determining the estimated amount of consideration, the Group uses the same Cost of real estate sales is recognized consistent with the revenue recognition method
principles as it does to determine the contract transaction price, except that any constraints applied. Cost of subdivision land and condominium units sold before the completion of the
used to reduce the transaction price will be removed for the impairment test. 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
Where the relevant costs or specific performance obligations are demonstrating marginal determined by the Group’s in-house technical staff.
profitability or other indicators of impairment, judgement is required in ascertaining whether or
not the future economic benefits from these contracts are sufficient to recover these assets. Income from forfeited reservations and collections
In performing this impairment assessment, management is required to make an assessment Income from forfeited reservation and collections is recognized when the deposits from
of the costs to complete the contract. The ability to accurately forecast such costs involves potential buyers are deemed nonrefundable due to prescription of the period for entering into
estimates around cost savings to be achieved over time, anticipated profitability of the a contracted sale. Such income is also recognized, subject to the provisions of Republic Act
contract, as well as future performance against any contract-specific performance indicators 6552, Realty Installment Buyer Act, upon prescription of the period for the payment of required
that could trigger variable consideration, or service credits. Where a contract is anticipated to amortizations from defaulting buyers.
make a loss, there judgements are also relevant in determining whether or not an onerous
contract provision is required and how this is to be measured. Rental income
Rental income from investment property is accounted for on a straight-line basis over the
Revenue Recognition for Real Estate Sales Prior to January 1, 2018 lease term.
Revenue is recognized to the extent that it is probable that the economic benefits will flow and
the amount of revenue can be reliably measured. The Parent Company assesses its revenue Interest income
arrangements against specific criteria in order to determine if it is acting as principal or agent. Interest is recognized using the effective interest method, i.e, the rate, that exactly discounts
The Parent Company has concluded that it is acting as principal in certain revenue estimated future cash receipts through the expected life of the financial instrument to the net
arrangements and as agent in certain transactions. carrying amount of the financial asset.

Real estate revenue Unearned discount is recognized as income over the terms of the financial assets at amortized
For real estate sales, the Group assesses whether it is probable that the economic benefits cost (i.e., loans and receivables or HTM investments) using the effective interest method and
will flow to the Group when the sales prices are collectible. Collectability of the sales price is is shown as deduction for the financial assets.
demonstrated by the buyer’s commitment to pay, which in turn is supported by substantial
initial and continuing investments that give the buyer a stake in the property sufficient that the Dividend and miscellaneous income
risk of loss through default motivates the buyer to honor its obligation to the seller. Dividend and miscellaneous income are recognized when the Group’s right to receive
Collectability is also assessed by considering factors such as the credit standing of the buyer, payment is established.
age and location of the property.
Pension Cost
Revenue from sales of completed real estate projects is accounted for using the full accrual Defined benefit plan
method. In accordance with Philippine Interpretations Committee, Q&A 2006-01, the The net defined benefit liability or asset is the aggregate of the present value of the defined
percentage-of-completion (POC) method is used to recognize income from sales of projects benefit obligation at the end of the reporting period reduced by the fair value of plan assets,

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adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset Deferred tax liabilities are recognized for all taxable temporary differences, with certain
ceiling is the present value of any economic benefits available in the form of refunds from the exceptions. Deferred tax liabilities shall be recognized for all taxable temporary differences
plan or reductions in future contributions to the plan. associated with investments in subsidiaries, associates and interests in joint ventures when
the timing of reversal of the temporary differences can be controlled and it is probable that the
The cost of providing benefits under the defined benefit plans is actuarially determined using temporary differences will not reverse in foreseeable future. Otherwise, no deferred tax
the projected unit credit (PUC) method. liability is set up.

Defined benefit costs comprise the following: Deferred tax assets are recognized for all deductible temporary differences, carryforward
benefit of unused tax credits from excess of minimum corporate income tax (MCIT) over the
(a) service cost; regular corporate income tax and unused net operating loss carryover (NOLCO), to the extent
(b) net interest on the net defined benefit liability or asset; and that it is probable that taxable income will be available against which the deductible temporary
(c) remeasurements of net defined benefit liability or asset. differences and carryforward benefits of unused tax credits from MCIT and NOLCO can be
utilized.
Service costs which include current service costs, past service costs and gains or losses on
non-routine settlements are recognized as expense in profit or loss. Past service costs are Deferred tax assets shall be recognized for deductible temporary differences associated with
recognized when plan amendment or curtailment occurs. investments in subsidiaries, associates and interests in joint ventures only to the extent that it
is probable that the temporary differences will reverse in the foreseeable future and taxable
Net interest on the net defined benefit liability or asset is the change during the period in the profit will be available against which the temporary differences can be utilized.
net defined benefit liability or asset that arises from the passage of time which is determined
by applying the discount rate based on high quality corporate bonds to the net defined benefit The carrying amount of deferred tax assets is reviewed at each financial reporting date and
liability or asset. Net interest on the net defined benefit liability or asset is recognized as reduced to the extent that it is no longer probable that sufficient taxable income will be
expense or income in profit or loss. available to allow the deferred tax assets to be utilized. Unrecognized deferred tax assets are
reassessed at each financial reporting date and are recognized to the extent that it has
Remeasurements comprising actuarial gains and losses, return on plan assets and any become probable that future taxable income will allow the deferred tax asset to be recovered.
change in the effect of the asset ceiling (excluding net interest on defined benefit liability) are
recognized immediately in OCI in the period in which they arise. Remeasurements are not Deferred tax assets and liabilities are measured at the tax rate that is expected to apply in the
reclassified to profit or loss in subsequent periods. period when the asset is realized or the liability is settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the reporting date.
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 Deferred tax relating to items recognized outside profit or loss is recognized outside profit or
be paid directly to the Group. Fair value of plan assets is based on market price information. loss in the consolidated statement of comprehensive income. Deferred tax items recognized
When no market price is available, the fair value of plan assets is estimated by discounting in correlation to the underlying transaction either in other comprehensive income or directly in
expected future cash flows using a discount rate that reflects both the risk associated with the equity.
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). Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to
set off current tax assets against current tax liabilities, and the deferred taxes relate to the
The Group’s right to be reimbursed of some or all of the expenditure required to settle a same taxable entity and the same taxation authority.
defined benefit obligation is recognized as a separate asset at fair value when and only when
reimbursement is virtually certain. Commissions
The Group recognizes commissions as contract costs for services rendered by the broker and
Income Taxes are fully accrued based on the total expected payment. Contract cost is amortized using the
Current tax percentage-of-completion method consistent with the measure of progress for revenue
Current tax assets and liabilities for the current and prior periods are measured at the amount recognition.
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted by the Borrowing Costs
reporting date. Borrowing costs directly attributable to the acquisition or construction of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are
Deferred tax capitalized as part of the cost of the respective assets (included in “Real estate inventories”
Deferred tax is provided using the liability method on temporary differences, with certain and “Investment properties” accounts in the consolidated statement of financial position). All
exceptions, at the reporting date between the tax bases of assets and liabilities and their other borrowing costs are expensed in the period in which they occur. Borrowing costs consist
carrying amounts for financial reporting purposes. of interest and other costs that an entity incurs in connection with the borrowing of funds.

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The interest capitalized is calculated using the Group’s weighted average cost of borrowings Foreign Currency Translation
after adjusting for borrowings associated with specific developments. Where borrowings are Each entity in the Group determines its own functional currency and items included in the
associated with specific developments, the amounts capitalized is the gross interest incurred financial statements of each entity are measured using that functional currency. Transactions
on those borrowings less any investment income arising on their temporary investment. in foreign currencies are initially recorded in the functional currency rate ruling at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are
Interest is capitalized from the commencement of the development work until the date of retranslated at the functional currency rate of exchange ruling at the reporting date. Exchange
practical completion. The capitalization of finance costs is suspended if there are prolonged gains or losses arising from foreign exchange transactions are credited to or charged against
periods when development activity is interrupted. Interest is also capitalized on the purchase operations for the period.
cost of a site of property acquired specifically for redevelopment but only where activities
necessary to prepare the asset for redevelopment are in progress. The functional currency of C&P International Limited and VII is the US Dollar. As of reporting
date, the assets and liabilities of foreign subsidiaries, with functional currencies other than the
Operating Expenses functional currency of the Parent Company, are translated into the presentation currency of
Operating expenses constitute costs of administering the business. These are recognized as the Group using the closing foreign exchange rate prevailing at the reporting date, and their
expenses when incurred. respective income and expenses at the weighted average rates for the year. The exchange
differences arising on the translation are recognized in OCI under “Cumulative Translation
Leases Adjustment”. On disposal of a foreign operation, the component of OCI relating to that
The determination of whether an arrangement is, or contains a lease is based on the particular foreign operation shall be recognized in profit or loss in the consolidated statement
substance of the arrangement at inception date, and requires an assessment of whether the of comprehensive income.
fulfillment of the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset. A reassessment is made after inception of the Basic and Diluted Earnings Per Share (EPS)
lease only if one of the following applies: Basic EPS is computed by dividing net income attributable to equity holders of the Parent
Company by the weighted average number of common shares issued and outstanding during
(a) there is a change in contractual terms, other than a renewal or extension of the the year adjusted for any subsequent stock dividends declared. Diluted EPS is computed by
arrangement; a renewal option is exercised or extension granted, unless that term of the dividing net income attributable to the equity holders of the Parent Company by the weighted
renewal or extension was initially included in the lease term; average number of common shares issued and outstanding during the year after giving effect
(b) there is a change in the determination of whether fulfillment is dependent on a specified to assumed conversion of potential common shares. The calculation of diluted EPS does not
asset; or assume conversion, exercise, or other issue of potential common shares that would have an
(c) there is a substantial change to the asset. antidilutive effect on earnings per share.

Where a reassessment is made, lease accounting shall commence or cease from the date As of December 31, 2018, 2017 and 2016, the Group has no potential dilutive common shares
when the change in circumstances gave rise to the reassessment for any of the scenarios (Note 29).
above, and at the date of renewal or extension period for the second scenario.
Segment Reporting
Group as a lessee The Group’s operating businesses are organized and managed separately according to the
Leases where the lessor retains substantially all the risks and benefits of ownership of the nature of the products and services provided, with each segment representing a strategic
asset are classified as operating leases. Operating lease payments are recognized as an business unit that offers different products and serves different markets. Financial information
expense in profit or loss in the consolidated statement of comprehensive income on a straight- on operating segments is presented in Note 6 to the consolidated financial statements.
line basis over the lease term. Indirect costs incurred in negotiating an operating lease are
added to the carrying value of the leased asset and recognized over the lease term on the Provisions
same bases as the lease income. Minimum lease payments are recognized on a straight-line Provisions are recognized when the Group has a present legal or constructive obligation as a
basis while the variable rent is recognized as an expense based on the terms of the lease result of past events, it is more likely than not that an outflow of resources will be required to
contract. settle the obligation, and the amount can be reliably estimated. Provisions are not recognized
for future operating losses.
Group as a lessor
Leases where the lessor does not transfer substantially all the risks and benefits of ownership Provisions are measured at the present value of the expenditures expected to be required to
of the assets are classified as operating leases. Initial direct costs incurred in negotiating settle the obligation using a pre-tax rate that reflects the current market assessment of the
operating leases are added to the carrying amount of the leased asset and recognized over time value of money and the risk specific to the obligation. Where discounting is used, the
the lease term on the same basis as the rental income. Contingent rents are recognized as increase in the provision due to the passage of time is recognized as interest expense. Where
revenue in the period in which they are earned. the Group expects some or all of a provision to be reimbursed, the reimbursement is
recognized only when the reimbursement is virtually certain. The expense relating to any
provision is presented in consolidated statement of comprehensive income net of any
reimbursement.

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Contingencies Revenue recognition method and measure of progress

Contingent liabilities are not recognized in the consolidated financial statements. These are The Group concluded that revenue for real estate sales is to be recognized over time because
disclosed unless the possibility of an outflow of resources embodying economic benefits is (a) the Group’s performance does not create an asset with an alternative use and; (b) the
remote. Contingent assets are not recognized in the consolidated financial statements but Group has an enforceable right for performance completed to date. The promised property is
disclosed when an inflow of economic benefits is probable. specifically identified in the contract and the contractual restriction on the Group’s ability to
direct the promised property for another use is substantive. This is because the property
Events After the Financial Reporting Date promised to the customer is not interchangeable with other properties without breaching the
Post year-end events that provide additional information about the Group’s position at the contract and without incurring significant costs that otherwise would not have been incurred
reporting date (adjusting events) are reflected in the consolidated financial statements. Any in relation to that contract. In addition, under the current legal framework, the customer is
post year-end events that are not adjusting events are disclosed in the consolidated financial contractually obliged to make payments to the developer up to the performance completed to
statements when material. date.

The Group has determined that input method used in measuring the progress of the
5. Significant Accounting Judgments and Estimates performance obligation faithfully depicts the Group’s performance in transferring control of
real estate development to the customers.
The preparation of accompanying consolidated financial statements in compliance with PFRS
Principal versus agent considerations
requires management to make estimates and assumptions that affect the amounts reported
The contract for the mall retail spaces and office spaces leased out by the Group to its tenants
in the consolidated financial statements and accompanying notes. The estimates and
includes the right to charge for the electricity usage, water usage, air conditioning charges
assumptions used in the consolidated financial statements are based upon management’s
and CUSA like maintenance, janitorial and security services.
evaluation of relevant facts and circumstances as at the date of the consolidated financial
statements. Actual results could differ from such estimates. For the electricity and water usage, the Group determined that it is acting as an agent because
Judgments and estimates are continually evaluated and are based on historical experience the promise of the Group to the tenants is to arrange for the electricity and water supply to be
and other factors, including expectations of future events that are believed to be reasonable provided by a utility company. The utility company, and not the real estate developer, is
under the circumstances. primary responsible for the provisioning of the utilities while the Group, administers the leased
spaces and coordinates with the utility companies to ensure that tenants have access to these
Judgments utilities. The Group does not have the discretion on the pricing of the services provided since
In the process of applying the Group’s accounting policies, management has made the the price is based on the actual rate charged by the utility providers.
following judgments, apart from those involving estimations, which have the most significant
effect on the amounts recognized in the consolidated financial statements: For the provision of air conditioning and services in the CUSA, the Group acts as a principal.
This is because it is the Group who retains the right to direct the service provider of CUSA as
Real estate revenue recognition upon adoption of PFRS 15 it chooses and the party responsible to provide proper ventilation and air conditioning to the
leased premises. The right to the services mentioned never transfers to the tenant and the
Existence of a contract Group has the discretion on how to price the CUSA and air conditioning charges.
The Group’s primary document for a contract with a customer is a signed contract to sell. It
has determined however, that in cases wherein contract to sell are not signed by both parties, Real estate revenue recognition prior to adoption of PFRS 15
the combination of its other signed documentation such as reservation agreement, official
receipts, quotation sheets and other documents, would contain all the criteria to qualify as Revenue and cost recognition
contract with the customer under PFRS 15. Selecting an appropriate revenue recognition method for a particular real estate sale
transaction requires certain judgments based on, among others:
In addition, part of the assessment process of the Group before revenue recognition is to
assess the probability that the Group will collect the consideration to which it will be entitled ∂ Buyer’s commitment on the sale which may be ascertained through the significance of the
in exchange for the real estate property that will be transferred to the customer. In evaluating buyer’s initial investment; and
whether collectability of an amount of consideration is probable, an entity considers the ∂ Stage of completion of the project.
significance of the customer’s initial payments in relation to the total contract price.
Collectability is also assessed by considering factors such as history of customer, age and Collectability of the sales price
pricing of the property. Management regularly evaluates the historical cancellations and back- For real estate sales, the buyer’s commitment is evaluated based on collections, credit
outs if it would still support its current threshold of customers’ equity before commencing standing and historical collection from buyers. In determining whether the sales prices are
revenue recognition. collectible, the Group considers that initial and continuing investments by the buyer of about
5% would demonstrate the buyer’s commitment to pay.

Impairment testing of financial assets and contract assets upon adoption of PFRS 9

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Definition of default and credit-impaired installment contracts receivable and contract assets Classification of financial instruments prior to adoption of PFRS 9
The Group defines the account as in default, which is fully aligned with the definition of credit- The Group classifies certain quoted nonderivative financial assets with fixed or determinable
impaired, when it meets one or more of the following criteria: payments and fixed maturities as HTM investments. This classification required significant
judgment. In making this judgment, the group evaluates its intention and ability to hold such
∂ Quantitative criteria investments to maturity. If the Group fails to keep these investments to maturity other than in
The customer receives a notice of cancellation and does not continue the payments. certain specific circumstances, the Group will be required to reclassify the entire portfolio as
AFS financial assets. Consequently, the investment would therefore be measured at fair value
∂ Qualitative criteria and not at amortized cost.
The customer meets unlikeliness to pay criteria, which indicates the customer is in
significant financial difficulty. These are instances where: Operating lease commitments - the Group as lessee
a. The customer is experiencing financial difficulty or is insolvent The Group has entered into contract of lease for some of the office space it occupies. The
b. The customer is in breach of financial covenant(s) Group has determined that all significant risks and benefits of ownership on these properties
c. An active market for that financial assets has disappeared because of financial will be retained by the lessor. In determining significant risks and benefits of ownership, the
difficulties Group considered, among others, the significance of the lease term as compared with the
d. Concessions have been granted by the Group, for economic or contractual reasons EUL of the related asset. The Group accordingly accounted for these as operating leases.
relating to the customer’s financial difficulty
e. It is becoming probable that the customer will enter bankruptcy or other financial Operating lease commitments - the Group as lessor
reorganization The Group has entered into commercial property leases on its investment property portfolio.
The Group has determined that it retains all significant risks and rewards of ownership of
The criteria above have been applied to the financial instruments held by the Group and are these properties as the Group considered among others the length of the lease term as
consistent with the definition of default used for internal credit risk management purposes. compared with the EUL of the assets.
The default definition has been applied consistently to model the Probability of Default (PD),
Loss Given Default (LGD) and Exposure at Default (EAD) throughout the Group’s expected Classification of property as investment property or real estate inventories
loss calculation. The Group determines whether a property is classified as investment property or real estate
inventory as follows:
Classification of financial instruments upon adoption of PFRS 9
Management exercises certain judgments in determining the cash flow characteristics of its ∂ Investment property comprises land and buildings (principally offices, commercial and
financial assets and the Group’s business model for managing them. The Group’s business retail property) which are not occupied substantially for use by, or in the operations of, the
model determines whether cash flows will result from collecting contractual cash flows, selling Group, nor for sale in the ordinary course of business, but are held primarily to earn rental
the financial assets, or both. income and capital appreciation.
∂ Real estate inventory comprises property that is held for sale in the ordinary course of
Business models business. Principally, this is residential and commercial property that the Group develops
The Group determines its business model at the level that best reflects how it manages groups and intends to sell before or on completion of construction.
of financial assets and contract assets to achieve its business objective. The Group’s
business model is not assessed on an instrument-by-instrument basis, but at a higher level of Business Combination
aggregated portfolios and is based on observable factors such as: The Group determined that Starmalls and its subsidiaries are under common control and
∂ How the performance of the business model and the financial assets and contract assets accounted the acquisition of Starmalls Group under the pooling of interest method. No
held within that business model are evaluated and reported to the entity's key goodwill is recognized (Note 8).
management personnel;
∂ The risks that affect the performance of the business model (and the financial assets and The Group determined that Malay Resorts is not under common control and accounted the
contract assets held within that business model) and, in particular, the way those risks are acquisition of Malay Resorts under the acquisition method. The Group determines whether
managed; and there are separate intangible assets and contingent liabilities and assessed that there are
∂ The expected frequency, value and timing of sales are also important aspects of the none at acquisition date. Goodwill arising from this business combination amounted to P =
Group’s assessment. 147.27 million (Note 8).

The business model assessment is based on reasonably expected scenarios without taking Management’s Use of Estimates
'worst case' or 'stress case’ scenarios into account. If cash flows after initial recognition are The key assumptions concerning the future and other key sources of estimation uncertainty
realized in a way that is different from the Group's original expectations, the Group does not at the reporting date, that have a significant risk of causing a material adjustment to the
change the classification of the remaining financial assets and contract assets held in that carrying amounts of assets and liabilities within the next financial year are discussed below.
business model, but incorporates such information when assessing newly originated or newly
purchased financial assets going forward.

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Revenue recognition upon adoption of PFRS 15 Inputs, assumptions and estimation techniques
The Group’s real estate sales is recognized overtime and the percentage-of-completion is The ECL is measured on either a 12-month or lifetime basis depending on whether a
determined using input method measured principally based on total actual cost of resources significant increase in credit risk has occurred since initial recognition or whether an asset is
consumed such as materials, labor hours expended and actual overhead incurred over the considered to be credit-impaired. Expected credit losses are the discounted product of the
total expected project development cost. Actual costs also include incurred costs but not yet Probability of Default (PD), Loss Given Default (LGD), and Exposure at Default (EAD), defined
billed which are estimated by the project engineers. Expected project development costs as follows:
include costs of land, land development, building costs, professional fees, depreciation of
equipment directly used in the construction, payments for permits and licenses. Revisions in ∂ Probability of default
estimated development costs brought about by increases in projected costs in excess of the The PD represents the likelihood of a customer defaulting on its financial obligation, either
original budgeted amounts, form part of total project costs on a prospective basis and is over the next 12 months, or over the remaining life of the obligation. PD estimates are
allocated between costs of sales and real estate inventories. estimates at a certain date, which are calculated based on statistical rating models, and
assessed using rating tools tailored to the various categories of counterparties and
Revenue recognition prior to adoption of PFRS 15 exposures. These statistical models are based on internally compiled data comprising
both quantitative and qualitative factors. Where it is available, market data may also be
Revenue and cost recognition used to derive the PD for large corporate counterparties. If a counterparty or exposure
The assessment process for the percentage of completion (POC) and the estimated project migrates between rating classes, then this will lead to a change in the estimate of the
development costs requires technical determination by management’s specialists (project associated PD. PDs are estimated considering the contractual maturities of exposures
engineers) and involves significant management judgment. The Group applies the POC and estimated prepayment rates.
method in determining real estate revenue and costs. For residential house and lots and
condominium units, the POC is based the physical proportion of work determined based on The 12-months and lifetime PD represent the expected point-in-time probability of a
the bill of quantities applied to the construction. The cost of sales is determined based on the default over the next 12 months and remaining lifetime of the financial instrument,
estimated project development costs applied with the respective project’s POC. respectively, based on conditions existing at the reporting date and future economic
conditions that affect credit risk.
The related balances from real estate transactions follow:
∂ Loss given default
2018 2017 Loss Given Default represents the Group’s expectation of the extent of loss on a defaulted
Contract assets (Note 7) P
= 23,309,976,072 P
=− exposure, taking into account the mitigating effect of collateral, its expected value when
Installment contracts receivable (Note 11) 14,491,282,897 30,943,358,823 realized and the time value of money. LGD varies by type of counterparty, type of seniority
Real estate inventories (Note 12) 41,946,866,699 39,700,029,385 of claim and availability of collateral or other credit support. LGD is expressed as a
Customers’ deposits (Note 19) − 2,531,778,443 percentage loss per unit of exposure at the time of default (EAD). LGD is calculated on a
Contract liabilities (Note 7) 2,324,887,081 − 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be
made if the default occurs in the next 12 months and lifetime LGD is the percentage of
Impairment testing of financial assets and contract assets upon adoption of PFRS 9 loss expected to be made if the default occurs over the remaining expected lifetime of the
loan.
Measurement of expected credit losses
ECLs are derived from unbiased and probability-weighted estimates of expected loss, and are ∂ Exposure at default
measured as follows: EAD is based on the amounts the Group expects to be owed at the time of default, over
the next 12 months or over the remaining lifetime. For example, for a revolving
∂ Financial assets and contract assets that are not credit-impaired at the reporting date: as commitment, The Group includes the current drawn balance plus any further amount that
the present value of all cash shortfalls over the expected life of the financial asset is expected to be drawn up to the current contractual limit by the time of default, should it
discounted by the effective interest rate. The cash shortfall is the difference between the occur.
cash flows due to the Group in accordance with the contract and the cash flows that the
Group expects to receive. The ECL is determined by projecting the PD, LGD, and EAD for each future month and
∂ Financial assets and contract assets that are credit-impaired at the reporting date: as the for each individual exposure or collective segment. These three components are multiplied
difference between the gross carrying amount and the present value of estimated future together and adjusted for the likelihood of survival (i.e. the exposure has not prepaid or
cash flows discounted by the effective interest rate. defaulted in an earlier month). This effectively calculates an ECL for each future month,
which is then discounted back to the reporting date and summed. The discount rate used
Except for installment contracts receivable and contract assets, the Group uses low credit risk in the ECL calculation is the original effective interest rate or the customer’s borrowing
operational simplification to identify whether the credit risk of financial assets has significantly rates.
increased.

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The lifetime PD is developed by applying a maturity profile to the current 12-month PD. The assessment of the relationship between historical observed default rates, forecast
The maturity profile looks at how defaults develop on a portfolio from the point of initial economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to
recognition throughout the lifetime of the loans. The maturity profile is based on historical changes in circumstances and of forecast economic conditions. The Group’s historical credit
observed data and is assumed to be the same across all assets within a portfolio. This is loss experience and forecast of economic conditions may also not be representative of
supported by historical analysis. customer’s actual default in the future.

The 12-month and lifetime EADs are determined based on the contractual repayments Incorporation of forward-looking information
owed by the customer. Early repayment/refinance assumptions, when allowed, are also The Group incorporates forward-looking information into both its assessment of whether the
incorporated into the calculation. credit risk of an instrument has increased significantly since its initial recognition and its
measurement of ECL.
The 12-month and lifetime LGDs are determined based on the factors which impact the
recoveries made post default. These vary by product type. To do this, the Group considers a range of relevant forward-looking macro-economic
∂ For installment contracts receivables, this is primarily based on collateral type and assumptions for the determination of unbiased general industry adjustments and any related
projected collateral values, historical discounts to market/book values due to forced specific industry adjustments that support the calculation of ECLs. Based on the Group’s
sales, time to repossession and recovery costs observed. evaluation and assessment and after taking into consideration external actual and forecast
∂ For unsecured products, LGDs are typically set at product level due to the limited information, the Group formulates a ‘base case’ view of the future direction of relevant
differentiation in recoveries achieved across different borrowers. These LGD’s are economic variables as well as a representative range of other possible forecast scenarios.
influenced by collection strategies including contracted debt sales and price. This process involves developing two or more additional economic scenarios and considering
the relative probabilities of each outcome. External information includes economic data and
General approach for cash and cash equivalents, short term investments, accounts forecasts published by governmental bodies, monetary authorities and selected private-sector
receivable, investments at amortized cost, receivables from related parties and restricted cash and academic institutions.
The Group recognizes a loss allowance based on either 12-month ECLs or Lifetime ECLs,
depending on whether there has been a significant increase in credit risk on the financial The base case represents a most-likely outcome and is aligned with information used by the
instrument since initial recognition. The changes in the loss allowance balance are recognized Group for other purposes such as strategic planning and budgeting. The other scenarios
in profit or loss as an impairment gain or loss. The Group uses external credit rating approach represent more optimistic and more pessimistic outcomes. Periodically, the Group carries out
to calculate ECL for cash and cash equivalents, accounts receivable, receivables from related stress testing of more extreme shocks to calibrate its determination of these other
parties and restricted cash. This approach leverages on available market data (i.e., S&P and representative scenarios.
Moody’s and Fitch credit ratings for default rates). S&P, Moody’s, Fitch and Reuters are
reliable market data sources that provide default and recovery rate data. These information The Group has identified and documented key drivers of credit risk and credit losses of each
are widely used by investors and stakeholders in decision-making in terms of investment, portfolio of financial instruments and, using an analysis of historical data, has estimated
credit activities, etc. relationships between macro-economic variables and credit risk and credit losses.

As of December 31, 2018, the Group calculated the loss allowance of cash and cash The economic scenarios used as at December 31, 2018 and January 1, 2018 included the
equivalents, accounts receivable, receivables from related parties and restricted cash based following ranges of key indicators and the expected movements within the overlay period for
on 12-month ECLs. the Philippines:

Simplified approach for installment contracts receivable and contract assets December 31, 2018 January 1, 2018
The Group uses vintage analysis to calculate ECLs for installment contracts receivable and Inflation rate Base 4.70% Base 3.60%
contract assets. The PD rates using vintage analysis are based on default counts of contract Range between 3.76% and 5.64% Range between 2.88% and 4.32%
issuances in a given period for groupings of various customer segments that have similar loss Purchasing Power Base 0.85 Base 0.90
patterns (i.e., by customer’s type of financing and employment). Range between 0.68 and 1.02 Range between 0.72 and 1.08
GDP growth rate Base 6.50% Base 6.20%
The vintage analysis is initially based on the Group’s historical observed default rates. The Range between 5.20% and 7.80% Range between 4.96% and 7.44%
Group will calibrate the matrices to adjust the historical credit loss experience with forward- GDP Base 1.06 Base 1.06
looking information. For instance, if forecast economic conditions (i.e., gross domestic Range between 0.85 and 1.28 Range between 0.85 and 1.28
product) are expected to deteriorate over the next year which can lead to an increased number
of defaults in the real estate sector, the historical default rates are adjusted. At every reporting Predicted relationship between the key indicators and default and loss rates on various
date, the historical observed default rates are updated and changes in the forward-looking portfolios of financial assets have been developed based on analyzing historical data over the
estimates are analyzed. past nine years. The methodologies and assumptions including any forecasts of future
economic conditions are reviewed regularly.

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The Group has not identified any uncertain event that it has assessed to be relevant to the payment behavior and known market factors. The Group reviews the age and status of
risk of default occurring but where it is not able to estimate the impact on ECL due to lack of receivables, and identifies individually significant accounts that are to be provided with
reasonable and supportable information. allowance.

Grouping of instruments for losses measured on collective basis For the purpose of a collective evaluation of impairment, loans are grouped on the basis of
For expected credit loss provisions modelled on a collective basis, a grouping of exposures is such credit risk characteristics as type of borrower, collateral type, past-due status and term.
performed on the basis of shared risk characteristics, such that risk exposures within a group
are homogenous. In performing this grouping, there must be sufficient information for The The amount and timing of recorded expenses for any period would differ if the Group made
Group to be statistically credible. Where sufficient information is not available internally, the different judgments or utilized different estimates. An increase in allowance for impairment
Group has considered benchmarking internal/external supplementary data to use for would increase recorded expenses and decrease net income.
modelling purposes. The characteristics and any supplementary data used to determine
groupings are outlined below. Loans and receivables, net of allowance for impairment losses, amounted to P
=44,182.47
million as of December 31, 2017. The allowance for impairment on loans and receivables
∂ Installment contracts receivable and contract assets - Groupings for collective amounted to P =397.03 million as of December 31, 2017 (Note 11).
measurement
a. Bank Determining fair values of financial assets and liabilities
b. In-house financing - locally employed Fair value determinations for financial assets and liabilities are based generally on listed
c. In-house financing - overseas Filipinos market prices or broker or dealer quotations. If prices are not readily determinable or if
d. In-house financing - self-employed liquidating the positions is reasonably expected to affect market prices, fair value is based on
∂ Corporate - Groupings for collective measurement either internal valuation models or management’s estimate of amounts that could be realized
a. Industry under current market condition, assuming an orderly liquidation over a reasonable period of
b. Credit risk rating band time. Fair value disclosures are provided in Note 30.
c. Geographical region of risk exposures
Evaluation of net realizable value of real estate inventories and land and improvements
The appropriateness of groupings is monitored and reviewed on a periodic basis by the Group. Real estate inventories and land and improvements are valued at the lower of cost or NRV.
In 2018, the total gross carrying amount of installment contracts receivable, contract assets This requires the Group to make an estimate of the real estate for sale inventories and land
and accounts receivable for which lifetime ECLs have been measured on a collective basis and improvements’ estimated selling price in the ordinary course of business, cost of
amounted to P =14,491.28 million, P
= 23,309.98 million, and P= 5,870.48 million, respectively completion and costs necessary to make a sale to determine the NRV. The Group adjusts
(Notes 7 and 11). the cost of its real estate inventories and land and improvements to NRV based on its
assessment of the recoverability of these assets. In determining the recoverability of these
Installment contracts receivable amounted to P
= 14,491.28 million and P
= 30,943.36 million as of assets, management considers whether these assets are damaged, if their selling prices have
December 31, 2018 and 2017, respectively (Note 11). Contract assets amounted to declined and management’s plan in discontinuing the real estate projects. Estimated selling
P
= 23,309.98 million as of December 31, 2018 (Note 7). price is derived from publicly available market data and historical experience, while estimated
selling costs are basically commission expense based on historical experience. Management
As of December 31, 2018, no expected credit losses were recognized for all financial assets would also obtain the services of an independent appraiser to determine the fair value of
subject to impairment testing. undeveloped land based on the latest selling prices of the properties of the same
characteristics of the land and improvements.
Exposures that have not deteriorated significantly since origination, or where the deterioration
remains within the Group’s investment grade criteria are considered to have a low credit risk. Real estate inventories amounted to P=41,946.87 million and P
=39,700.03 million as of
The provision for credit losses for these financial assets is based on a 12-month ECL. The December 31, 2018 and 2017, respectively (Note 12).
low credit risk exemption has been applied on debt investments that meet the investment
grade criteria of The Group in accordance with externally available ratings. Fair value of financial instruments
Where the fair values of financial assets and financial liabilities recorded in the consolidated
Impairment of loans and receivables prior to adoption of PFRS 9 statements of financial position cannot be derived from active markets, they are determined
The Group reviews its receivables on a periodic basis to assess impairment of receivables at using internal valuation techniques using generally accepted market valuation models. The
an individual and collective level. In assessing for impairment, the Group determines whether inputs to these models are taken from observable markets where possible, but where this is
there is any objective evidence indicating that there is a measurable decrease in the estimated not feasible estimates are used in establishing fair values. These estimates may include
future cash flows of its loans and receivables. This evidence may include observable data considerations of liquidity, volatility, and correlation. Certain financial assets and liabilities
indicating that there has been an adverse change in the payment status of borrowers, or were initially recorded at its fair value by using the discounted cash flow methodology. See
industry-wide or local economic conditions that correlate with defaults on receivables. These Note 30 to the consolidated financial statements for the related balances.
factors include, but are not limited to age of balances, financial status of counterparties,

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Impairment of goodwill on the acquisition of MRHI (previously AFS financial assets), investments at amortized cost (previously HTM
Goodwill impairment testing requires an estimation of the recoverable amount which is the fair investments) and deferred taxes. Segment liability are presented separately from the deferred
value less cost to sell or value in use of the cash-generating units to which the goodwill is tax liabilities.
allocated. Estimating value in use amount requires management to make an estimate of the
expected future cash flows for the cash-generating unit and also to choose a suitable discount The financial information about the operations of these operating segments is summarized
rate in order to calculate the present value of cash flows. below:
December 31, 2018
The Group’s impairment test for goodwill related to the acquisition of MRHI through VLCC is Commercial Intersegment
Horizontal Vertical and Others Adjustments Consolidated
based on value in use calculations using a discounted cash flow model. Major assumptions (Amounts in thousands)
used in the calculation of value in use include annual growth rate of 10% and discount rate of Real estate revenue P
= 25,946,584 P
= 5,909,503 P=− P
=− P= 31,856,087
7.2%. Rental income − − 6,511,882 (47,142) 6,464,740
Miscellaneous income 235,129 47,909 977,482 − 1,260,520
26,181,713 5,957,412 7,489,364 (47,142) 39,581,347
The carrying value of goodwill on the acquisition of MRHI in the consolidated statements of Costs and operating expenses 16,181,477 4,118,920 3,002,304 (47,142) 23,255,559
Segment income (loss) before income tax 10,000,236 1,838,492 4,487,060 − 16,325,788
financial position amounted to P= 147.27 million as of December 31, 2018 and 2017. No Interest income from investments and other income
impairment loss was recognized as a result of the impairment testing performed. (Note 24) 660,056 32,935 1,212,850 − 1,905,841
EBITDA 10,660,292 1,871,427 5,699,910 − 18,231,629
Interest and other financing charges (Note 24) (46,398) (27,658) (4,095,707) − (4,169,763)
Depreciation and amortization (Notes 14, 15, 17
and 25) (129,558) (13,786) (1,336,785) − (1,480,129)
6. Segment Information Income before income tax 10,484,336 1,829,983 267,418 − 12,581,737
Provision for income tax (Note 27) 1,809,577 122,472 115,225 − 2,047,274
For management purposes, the Group’s operating segments are organized and managed Net income P
= 8,674,759 P
= 1,707,511 P
= 152,193 P
=− P
= 10,534,463
separately according to the nature of the products provided, with each segment representing Other Information
Segment assets P
= 98,130,017 P = 20,553,705 P = 86,487,493 (P
= 52,356) P
= 205,118,859
a strategic business unit that offers different products and serves different markets. The Receivables from related parties (Notes 28, 30 and
Group has three reportable operating segments as follows: (16,469,743) (8,327,542) 29,504,193 − 4,706,908
Investments at FVOCI (Note 10) − − 106,499 − 106,499
Investments at amortized cost (Note 10) − − 27,483,091 − 27,483,091
Horizontal Projects Deferred tax assets - net (Note 27) 613,613 − 233,068 − 846,681
This segment pertains to the development and sale of residential lots and units across the Total Assets P
= 82,273,887 P = 12,226,163 P= 143,814,344 (P
= 52,356) P
= 238,262,038
Philippines. Segment liabilities P
= 113,320,393 P
= 5,908,655 P = 23,258,421 (P
= 52,356) P
= 142,435,113
Deferred tax liabilities - net (Note 27) 1,808,103 147,207 1,965,014 − 3,920,324
Total Liabilities P
= 115,128,496 P
= 6,055,862 P = 25,223,435 (P
= 52,356) P
= 146,355,437
Vertical Projects Capital expenditures P
= 23,202,166 P
= 5,284,444 P = 16,564,230 P
=− P = 45,050,840
This segment caters on the development and sale of residential high-rise condominium
December 31, 2017
projects across the Philippines. Commercial Intersegment
Horizontal Vertical and Others Adjustments Consolidated
Commercial and others (Amounts in thousands)
Real estate revenue P
= 22,694,640 P
= 4,899,718 P
=− P
=− P= 27,594,358
This segment pertains to rental of malls and commercial spaces and activities of holding Rental income − 189,619 5,511,922 (76,314) 5,625,227
companies. Miscellaneous income 745,083 101,196 423,320 (193,014) 1,076,585
23,439,723 5,190,533 5,935,242 (269,328) 34,296,170
Costs and operating expenses 15,011,849 3,539,109 1,660,692 (132,339) 20,079,311
Management monitors the operating results of its business units separately for the purpose Segment income (loss) before income tax 8,427,874 1,651,424 4,274,551 (136,989) 14,216,859
of making decisions about resource allocation and performance assessment. Segment Interest income from investment and other income
performance is evaluated based on segment operating income or loss before income tax and (Note 24) 983,334 26,814 1,227,779 (491,770) 1,746,157
EBITDA 9,411,208 1,678,238 5,502,330 (628,759) 15,963,016
earnings before income tax, depreciation and amortization (EBITDA). Segment operating Interest and other financing charges (Note 24) (3,115,027) (157,875) (111,343) − (3,384,245)
income or loss before income tax is based on the same accounting policies as consolidated Depreciation and amortization (Notes 14, 15, 17
and 25) (138,434) (43,169) (1,123,553) − (1,305,156)
operating income or loss. No operating segments have been aggregated to form the above Income before income tax P
= 6,157,747 P
= 1,477,194 P
= 4,267,434 (P
= 628,759) P
= 11,273,615
reportable operating business segments. The chief operating decision-maker (CODM) has Provision for income tax (Note 27) 947,229 386,448 877,168 − 2,210,845
Net income P
= 5,210,518 P
= 1,090,746 P
= 3,390,266 (P
= 628,759) P= 9,062,770
been identified as the chief executive officer. The CODM reviews the Group’s internal reports
Other Information
in order to assess performance of the Group. Segment assets P
= 98,032,243 P
= 21,125,737 P= 60,004,261 (P
= 13,457,817) P
= 165,704,424
Receivables from related parties (Notes 28, 30 and 31) (25,710,011) (6,991,721) 37,689,662 − 4,987,930
Transfer prices between operating segments are on an arm’s length basis in a manner similar AFS financial assets (Note 10) − − 6,612,942 − 6,612,942
HTM investments (Note 10) − − 21,827,289 − 21,827,289
to transactions with third parties. Deferred tax assets - net (Note 27) 349,669 39,124 413,353 − 802,146
Total Assets P
= 72,671,901 P
= 14,173,140 P
= 126,547,506 (P
= 13,457,817) P
= 199,934,731
The amount of segment assets and liabilities are based on the measurement principles that Segment liabilities P
= 94,725,639 P
= 6,422,508 P= 12,979,064 (P= 1,416,791) P
= 112,710,420
Deferred tax liabilities - net (Note 27) 1,416,792 315,877 1,483,699 − 3,216,368
are similar with those used in measuring the assets and liabilities in the consolidated Total Liabilities P
= 97,506,478 P
= 6,738,385 P= 14,462,764 (P= 1,416,791) P
= 115,926,788
statements of financial position which is in accordance with PFRS. The segment assets are Capital expenditures P
= 24,074,040 P
= 4,248,360 P= 9,072,600 P
=− P = 37,395,000
presented separately from the receivables from related parties, investments at FVOCI Provision for impairment losses (Note 25) − − 3,683 − 3,683

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December 31, 2016 All of the Group’s real estate sales are revenue from contracts with customers that are
Commercial Intersegment
Horizontal Vertical and Others Adjustments Consolidated recognized over time except for hotel operation’s sale of food and beverages which is at
(Amounts in Thousands) point in time. There are no inter-segment eliminations among revenue from contracts with
Real estate revenue P
= 21,218,234 P
= 3,806,975 P
=– P
=– P= 25,025,209
Rental income ‒ ‒ 4,432,991 (57,665) 4,375,326 customers, as there are all sold to external customers as disclosed in the segment
Miscellaneous income 742,807 147,574 120,868 (58,741) 952,508 information in 2018, 2017 and 2016 (see Note 6).
21,961,041 3,954,549 4,553,859 (116,406) 30,353,043
Costs and operating expenses 14,548,731 2,947,945 1,481,222 (92,373) 18,885,525
Segment income (loss) before income tax 7,412,310 1,006,604 3,072,637 (24,033) 11,467,518 Contract Balances
Interest income (Note 24) 1,485,720 35,697 3,063,399 (3,077,799) 1,507,017
EBITDA 8,898,030 1,042,301 6,136,036 (3,101,832) 12,974,535
Interest and other financing charges (Note 24) (2,740,776) (222,901) (298,276) 1,000,000 (2,261,953) December 31,
Depreciation and amortization (Notes 14, 15, 17 2018
and 25) (222,185) (34,513) (773,282) ‒ (1,029,980) Installment contracts receivable (Note 11) P
= 14,491,282,897
Income before income tax 5,935,069 784,887 5,064,478 (2,101,832) 9,682,602
Provision for income tax (Note 27) 932,733 (55,373) 704,875 ‒ 1,582,235 Contract assets 23,309,976,072
Net income P
= 5,002,336 P
= 840,260 P
= 4,359,603 (P
= 2,101,832) P
= 8,100,367 Cost to obtain contract 1,276,514,512
Other Information Contract liabilities 2,324,887,081
Segment assets P
= 58,039,357 P
= 6,275,771 P
= 31,912,438 P= 45,090,158 P = 141,317,724
Receivables from related parties (Notes 28, 30 and 31) 8,148,875 (4,565,888) 333,682 ‒ 3,916,669
AFS financial assets (Note 10) ‒ ‒ 11,968,496 (3,723,431) 8,245,065 Installment contracts receivable from real estate sales which are collectible in equal
HTM investments (Note 10) ‒ ‒ 20,851,608 ‒ 20,851,608 monthly principal installments with various terms up to a maximum of 10 years. These
Deferred tax assets - net (Note 27) ‒ ‒ 437,179 ‒ 437,179
Total Assets P
= 66,188,232 P
= 1,709,883 P
= 65,503,403 P= 41,366,727 P = 174,768,245 are recognized at amortized cost using the effective interest method. Interest ranges from
Segment liabilities P
= 88,733,513 (P
= 6,231,300) P
= 13,702,551 P
= 2,532 P = 96,207,296 4.35% to 7.56% per annum, 3.08% to 4.90% per annum and 2.82% to 5.04% per annum
Deferred tax liabilities - net (Note 27) 1,552,865 24,281 843,589 (355,093) 2,065,642
Total Liabilities P
= 90,286,378 (P
= 6,207,019) P
= 14,546,140 (P
= 352,561) P = 98,272,938
in 2018, 2017 and 2016, respectively. The corresponding titles to the residential units sold
Capital expenditures P
= 20,106,300 P
= 3,388,000 P
= 7,429,020 P
=‒ P = 30,923,320 under this arrangement are transferred to the customers only upon full payment of the
Provision for impairment losses (Note 27) ‒ ‒ 1,974 ‒ 1,974 contract price.

Capital expenditures consists of construction costs, land acquisition and land development Contract assets represent the right to consideration that was already delivered by the
costs. Group in excess of the amount recognized as installment contracts receivable. This is
reclassified as installment contracts receivable when the monthly amortization of the
The Group has no revenue from transactions with a single external customer amounting to customer is already due for collection. The movement in contract asset is mainly due to
10% or more of the Group’s revenue. new real estate sales contract recognized during the period increase in percentage of
completion, less reclassification to installment contracts receivables.
7. Revenue from Contracts with Customers Contract liabilities consist of collections from real estate customers which have not
reached the equity threshold to qualify for revenue recognition and excess of collections
a. Disaggregated Revenue Information over the good and services transferred by Group based on percentage of completion. The
movement in contract liability is mainly due to reservation sales and advance payment of
The Group derives revenue from the transfer of services and goods over time and at a buyers less real estate sales recognized upon reaching the equity threshold and from
point in time, respectively, in different product types and other geographical location within increase in percentage of completion.
the Philippines.
The amount of revenue recognized in 2018 from amounts included in contract liabilities at
The Group’s disaggregation of each sources of revenue from contracts with customers the beginning of the year amounted to P
= 1,473.13 million.
are presented below:
b. Performance obligations
2018 2017 2016
(Amounts in thousands)
Type of Product Information about the Group’s performance obligations are summarized below:
Real estate sales
Horizontal P
= 25,946,584 P
= 22,694,640 P
= 21,218,234 Real estate sales
Vertical 5,909,503 4,899,718 3,806,975 The Group entered into contracts to sell with one identified performance obligation which
31,856,087 27,594,358 25,025,209 is the sale of the real estate unit together with the services to transfer the title to the buyer
Hotel operations 644,396 443,005 371,533 upon full payment of contract price. The amount of consideration indicated in the contract
P
= 32,500,483 P
= 28,037,363 P
= 25,396,742 to sell is fixed and has no variable consideration.

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The sale of real estate unit covers subdivision land, condominium units and residential c. Cost to Obtain Contract
house units and the Group concluded that there is one performance obligation in each of
these contracts. The Group recognizes revenue from the sale of these real estate projects The balances below pertain to the cost to obtain contract presented in consolidated
under pre-completed contract over time during the course of the construction. statements of financial position:

Payment commences upon signing of the contract to sell and the consideration is payable December 31,
in cash or under various financing schemes entered with the customer. The financing 2018
scheme would include payment of 10% - 20% of the contract price to be paid over a Balance at the beginning of the year P
= 953,850,266
maximum of 18 months at a fixed monthly payment with remaining balance payable (a) in Additions 2,297,695,402
full at the end of the period either through cash or external financing; or (b) through in- Amortization (Note 25) (1,759,339,528)
house financing which ranges from 2 to 15 years with fixed monthly payment. The amount Derecognition (215,691,628)
due for collection under the amortization schedule for each of the customer does not P
= 1,276,514,512
necessarily coincide with the progress of construction, which results to either a contract
asset or contract liability.
8. Business Combinations
After the delivery of the completed real estate unit, the Group provides one year warranty
to repair minor defects on the delivered serviced lot and house and condominium unit. Acquisition of Starmalls Group
This is assessed by the Group as a quality assurance warranty and not treated as a Starmalls, Inc. was incorporated in the Philippines and duly registered with the SEC on
separate performance obligation. October 16, 1969, originally to pursue mineral exploration. After obtaining SEC approval,
Starmalls, Inc. later changed its primary business and is now presently engaged in holding
The transaction price allocated to the remaining performance obligations (unsatisfied or investments in shares of stock and real estate business. Prior to the acquisition of VLLI,
partially satisfied) as at December 31, 2018 are, as follows: Starmalls, Inc. is 30.50% owned by Fine Properties, Inc. (Fine) and 69.50% owned by PCD
Nominee Corporation and other entities and individuals. The shares of stock of Starmalls,
December 31, Inc. are listed at the PSE.
2018
Within one year P
= 17,337,098,730 On November 10, 2015, VLLI signed an agreement with the existing shareholders of Starmalls
More than one year 13,001,812,877 Group and acquired approximately 88.34% or 7,443.19 million shares of the outstanding
P
= 30,338,911,607 capital stock of Starmalls, Inc. for a total consideration of P
= 33,537.36 million. Starmalls, Inc.
has subsidiaries namely Manuela Corporation and Masterpiece Asia Properties, Inc. with the
The remaining performance obligations expected to be recognized within one year and in following percentages of ownership:
more than one year relate to the continuous development of the Group’s real estate
projects. The Group’s condominium units are completed within three years and five years, Masterpiece Asia Properties, Inc. (MAPI) 100.00%
respectively, from start of construction while serviced lots and serviced lots and house are Manuela Corporation (Manuela) 98.36%
expected to be completed within two to three years from start of development.
Upon execution of the agreement, VLLI paid P =2,681.25 million to Fine. As a condition to the
Rental agreements acquisition of Starmalls Group, Fine invested the 97.50% of the total consideration from the
The Group entered into lease agreements for its mall retail spaces and office spaces with disposal or P= 32,698.93 million representing 4,573.28 million shares of VLLI at P = 7.15 per
the following identified performance obligations: (a) lease of space (b) provisioning of share. The shares were issued out of VLLI’s increase in its authorized capital stock which
water and electricity and (c) provision of air conditioning and CUSA services (d) was approved by the SEC on November 11, 2015.
administration fee. Revenue from lease of space is recognized on a straight-line basis
over the lease term while revenue for the remaining performance obligations are Starmalls, Inc. and its subsidiaries became subsidiaries of VLLI as at December 31, 2015.
recognized when services are rendered. The tenant is required to settle within 30 days
upon receipt of the bill. In case of delay in payments, a penalty of 5% is charged for the Both VLLI and Starmalls Group are entities under common control of Fine. Accordingly, VLLI
amount due and shall be charged another 5% the following month of delay and every accounted for the acquisition of Starmalls Group under the pooling-of-interest method of
month thereafter inclusive of penalties previously charged. The lease arrangement would accounting.
typically require a tenant to pay advance rental equivalent to three months and a security
deposit equivalent to three months rental to cover any breakages after the rental period, Under the pooling-of-interest method, VLLI accounted the acquisition as follows:
with the excess returned to the tenant.
∂ Assets and liabilities reflected as at reporting date is the combined assets and liabilities of
Starmalls Group and Vista Group using their existing historical carrying values prior to the
acquisition;

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∂ Retained earnings reflects the accumulated earnings of Vista Group and the earnings of 10. Investments
Starmalls Group as if the entities had always been combined;
∂ Capital stock represents the legal capital of VLLI; Short-term cash investments
∂ The difference between the consideration for the acquisition and the legal capital of Short-term cash investments consist of money market placements with maturities of more
Starmalls that amounted to P= 22,859.08 million is accounted for as “equity reserve” which than three months up to one year and earn annual interest at the respective short-term
was eventually closed to additional paid-in capital. investment rates, as follows:

The P =752.21 million VLLI shares in the amount of P

=5,378.29 million issued to Manuela which 2018 2017 2016
it held as of December 31, 2015 have been presented as treasury shares in the consolidated Philippine Peso 2.50% to 3.00% 2.00% to 2.50% 1.38% to 2.50%
statements of financial position and consolidated statements of changes in equity as of and US Dollar 1.50% to 2.50% 1.62% to 2.25% 0.50%
for the year ended December 31, 2015. Manuela still holds the VLLI shares as of December
31, 2018. As of December 31, 2018, and 2017, short-term cash investments amounted to P
= 139.94
million and P
= 345.64 million, respectively.
Acquisition of Malay Resorts Holdings, Inc.
On December 29, 2015, VLCC, a wholly owned subsidiary of VRI, acquired 100% ownership Interest earned from short-term cash investments for the years ended December 31, 2018,
of MRHI for a total cash consideration of P = 157.00 million. MRHI owns and operates the 2017 and 2016 amounted to P = 8.57 million, P
= 23.16 million and P
= 2.21 million, respectively
Boracay Sands Hotel. The transaction was accounted for as a business combination under (Note 24).
acquisition method. Fair values of identifiable net assets of MRHI amounted to P
= 9.71 million,
which resulted to recognition of goodwill of P
= 147.27 million. Quoted and unquoted equity securities
The classification of quoted and unquoted equity securities prior to January 1, 2018 is
available-for-sale financial assets. The entire P
=121.58 million carrying value was reclassified
9. Cash and Cash Equivalents to investments at fair value through other comprehensive income (FVOCI) as at January 1,
2018.
This account consists of:
Quoted debt securities
2018 2017 The classification of quoted debt securities prior to January 1, 2018 is available-for-sale
Cash on hand P
= 14,185,301 P
= 15,121,766 financial assets. The entire P
= 6,691.36 million carrying value was reclassified to investments
Cash in banks 4,886,166,662 10,642,888,364 at fair value through profit or loss (FVTPL) as at January 1, 2018. Upon transition, the
Cash equivalents 15,121,834,424 836,501,312 unrealized gain on changes in fair value of P = 703.03 million, which had been previously
P
= 20,022,186,387 P= 11,494,511,442 recognized under accumulated OCI, was reclassified to retained earnings as at
January 1, 2018.
Cash in banks earn interest at the prevailing bank deposit rates. Cash equivalents are short-
term, highly liquid investments that are made for varying periods of up to three (3) months In 2018, the Group redeemed its quoted debt securities at P= 6,623.86 million with realized fair
depending on the immediate cash requirements of the Group and earn interest as follows: value gain amounting to P
= 132.45 million recorded in the profit or loss (Note 24).

2018 2017 2016 In 2017 (prior to adoption of PFRS 9), the Group disposed AFS financial assets amounting to
Philippine Peso 0.60% to 5.50% 0.10% to 2.75% 0.10% to 5.00% US$36.53 million (P = 1,830.92 million). The unrealized gain amounting to P =322.16 million
US Dollar 0.10% to 2.50% 0.10% to 2.50% 0.13% to 3.00% previously recognized under other comprehensive income were reclassified to profit or loss
upon realization (Note 24).
Interest earned from cash in banks and cash equivalents for the years ended December 31,
2018, 2017 and 2016 amounted to P =249.21 million, P
= 51.70 million and P
= 115.45 million, Unquoted debt securities
respectively (Note 24). The classification of unquoted debt securities prior to January 1, 2018 is held-to-maturity
investments (HTM). The entire carrying value of P = 21,827.29 million was reclassified to
No cash and cash equivalents are used to secure the obligations of the Group. investments at amortized cost as at January 1, 2018.

This account consists of the Group’s investments in various US dollar-denominated debt

securities with nominal interest rates ranging from 3.75% to 4.25%.

In 2018 and 2017, the Group acquired additional investments amounting to US$263.98 million
(P
= 13,825.19 million) and US$79.30 million (P= 4,121.78 million), respectively, with effective
interest ranging from 2.69% to 5.56% and 2.82% to 4.80%, respectively.

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Investments in unquoted debt securities amounting to $432.61 million (P = 22,768.26 million) 11. Receivables
and $383.50 million (P
=20,183.61 million) are used to secure the bank loans of the Parent
Company amounting to P =20,966.90 million and P
=17,625.30 million as of December 31, 2018 This account consists of:
and 2017, respectively.
2018 2017
The fair values of the investments used as collateral amounted to P = 23,917.39 million and Installment contracts receivable (Note 20) P
= 14,491,282,897 P
= 30,943,358,823
P
= 19,135.67 million as of December 31, 2018 and 2017, respectively (Note 20). Accrued interest receivable 294,415,702 274,834,603
Accounts receivable:
Interest income from these investments including amortization of premium amounted to Tenants (Note 28) 5,067,642,155 5,944,584,625
P
= 827.86 million, P
= 800.88 million and P
= 721.02 million in 2018, 2017 and 2016, respectively Buyers 310,210,593 360,536,823
(Note 24). Home Development Mutual Fund (HDMF) 107,269,705 231,038,059
Others 90,942,600 638,423,712
In 2018 and 2017, no impairment losses were recognized on these investments. Advances to:
Contractors 7,718,015,755 4,623,934,231
The following presents the breakdown of unquoted debt securities by contractual maturity Private companies 936,235,521 695,538,326
dates as of December 31, 2018 and 2017. Suppliers 1,129,772,954 611,979,060
Brokers 249,833,178 255,266,011
2018 2017 30,395,621,060 44,579,494,273
Due in one (1) year or less P
=− P= 8,133,258,592 Less allowance for impairment losses 64,584,851 397,026,438
Due after one (1) year through five (5) years 27,483,090,564 13,694,030,855 30,331,036,209 44,182,467,835
P
= 27,483,090,564 P
= 21,827,289,447 Less noncurrent portion (see Note 3) 8,481,261,708 8,826,716,922
P
= 21,849,774,501 P
= 35,355,750,913
The rollforward analysis of investments in financial asset at amortized cost FVOCI, and FVTPL
follows: Collective allowances for impairment losses on receivables prior to January 1, 2018 were
based on incurred loss approach which was replaced with the forward-looking ECL approach
December 31, 2018 subsequent to January 1, 2018. The transition resulted to zero ECL, as such, the allowance
At amortized HTM
cost FVTPL FVOCI AFS for impairment losses of P
= 332.44 million arising from collective assessment based on incurred
Balances at beginning of loss approach was reversed which resulted to increase in retained earnings as at January 1,
year, as previously 2018.
reported P
=− P
=− P
=− P
= 6,612,942,119 P= 21,827,289,447
Impact of PFRS 9 adoption 21,827,289,447 6,491,361,776 121,580,343 (6,612,942,119) (21,827,289,447)
Balances at beginning of January 1, 2018
year, as restated 21,827,289,447 6,491,361,776 121,580,343 − − Balances at beginning of year, as previously reported P
= 44,182,467,835
Additions 13,825,193,654 − − − −
Redemptions and disposal (9,260,928,462) (6,623,861,354) (38,081,160) − − Impact of PFRS 9 adoption 332,441,587
Realized / Unrealized fair Balances at beginning of year, as restated P
= 44,514,909,422
value gain during the
year − 132,499,578 23,000,000 − −
Amortization of premium (170,328,866) Installment Contracts Receivable
Cumulative translation
adjustment 1,261,864,791 − − − −
Installment contracts receivable consist of accounts collectible in equal monthly installments
Balances at end of year P
= 27,483,090,564 P
=− P
= 106,499,183 P
=− P
=− with various terms up to a maximum of 15 years. These are carried at amortized cost. The
corresponding titles to the subdivision or condominium units sold under this arrangement are
December 31, 2017 transferred to the buyers only upon full payment of the contract price. The installment
AFS HTM contracts receivables are interest-bearing except for those with installment terms within two
Balances at beginning of year P
= 8,245,064,853 P= 20,851,608,454 years. Annual interest rates on installment contracts receivables range from 12.00% to
Additions 7,288,847 4,127,777,173 19.00%. Total interest income recognized amounted to P = 574.07 million, P
= 476.09 million and
Redemptions (1,882,464,534) (3,061,266,532)
P
= 609.08 million in 2018, 2017 and 2016, respectively (Note 24).
Unrealized fair value gain (loss)
during the year 243,052,953 −
Amortization of premium − (154,623,071) In 2018 and 2017, installment contracts receivables with a total nominal amount of
Cumulative translation adjustment − 63,793,423 P
= 1,668.34 million and P =1,614.72 million, respectively, were recorded at amortized cost
Balances at end of year P
= 6,612,942,119 21,827,289,447 amounting to P=1,556.65 million and P = 1,519.82 million, respectively. These are installment
contracts receivables that are to be collected in two years which are noninterest-bearing. The
fair value upon initial recognition is derived using discounted cash flow model using the

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discount rates ranging from 4.35% to 7.56% for those recognized in 2018 and 3.08% to 4.90% Advances to brokers
for those recognized in 2017. Advances to brokers are cash advances for operating use. These are applied to subsequent
commission payout to brokers.
Interest income recognized from these receivables amounted to P = 105.99 million, P
= 67.43
million, and P
=33.56 million in 2018, 2017 and 2016, respectively (Note 24). The unamortized Advances to suppliers
discount amounted to P= 76.06 million and P
= 70.36 million as of December 31, 2018 and 2017, Advances to suppliers are advance payments to suppliers for the purchase of owner supplied
respectively. materials. These will be applied to billings of deliveries within one year.

Rollforward in unamortized discount arising from noninterest-bearing receivables is as follows: Advances to contractors
Advances to contractors are advance payments in relation to the Group’s construction
2018 2017 activities and are recouped through reduction against progress billings as the construction
Balance at beginning of year P
= 70,363,904 P
= 42,896,377 progresses which are expected to occur within one year from the date the receivables arose.
Additions 111,693,184 94,896,359
Accretion (Note 24) (105,992,683) (67,428,832) Receivables amounting to P = 397.03 million as of December 31, 2017 are provided with
impairment losses. The rollforward of the doubtful accounts follow:
Balance at end of year P
= 76,064,405 P
= 70,363,904

Installment Accounts Accounts Advances to

Accounts Receivable: Contracts Receivable Receivable Private
The accounts receivables are non-interest bearing and collectible within one year. Receivable from Tenants from Buyers Companies Total
At December 31, 2016 P
= 120,290,254 P
= 52,629,873 P
= 155,838,116 P
= 64,584,851 P= 393,343,094
This consists of the following: Provision for the year (Note 25) − 2,759,667 923,677 − 3,683,344
Balances at beginning of year, as
previously reported (Note 3) P= 120,290,254 P
= 55,389,540 P
= 156,761,793 P
= 64,584,851 P
= 397,026,438
Receivable from tenants Impact of PFRS 9 adoption
Receivables from tenants represent the outstanding receivables arising from the lease of (Note 3) (120,290,254) (55,389,540) (156,761,793) − (332,441,587)
commercial spaces relating to the Group’s mall and BPO operations and are collectible within Balances at beginning of year, as
restated P
=− P
=− P
=− P
= 64,584,851 P
= 64,584,851
30 days from billing date. These are covered by security deposit of tenants’ equivalent to
three-month rental and three-month advance rental paid by the lessees. This includes both
The impairment losses above resulted from performing collective impairment test.
the fixed and contingent portion of lease.
Receivable from buyers In 2018 and 2017, the Group entered into various purchase agreements with financial
Receivables from buyers represent the share of the joint venture partners from the sold real institutions whereby the Group sold its installment contracts receivables on a with recourse
estate inventories that are yet to be collected. The arrangement is covered by a marketing basis. These receivables are used as collateral to secure the corresponding loans payable
agreement that is separate and distinct from LDA. These sales do not form part of the Group's obtained. The purchase agreements provide substitution of contracts which defaults. The
revenue and has a corresponding recorded liability. Collections from buyers are remitted to Group still retains the sold receivables in the installment contracts receivables account and
the joint venture partners net of any marketing fees agreed by the parties under the LDA. records the proceeds from these sales as loans payable (Note 20).
Receivable from HDMF As of December 31, 2018, the carrying value of installment contracts receivables sold and the
Receivable from HDMF pertains to amounts retained by HDMF from the proceeds of loans corresponding loans payable amounted to P = 2,364.99 million and P = 2,784.17 million,
availed by real estate buyers. This amount is released by HDMF upon the release of the respectively.
related title to the property by the Group to HDMF within a six-month to one year period from
loan takeout date. As of December 31, 2017, the carrying value of installment contracts receivables sold and the
corresponding loans payable amounted to P = 4,396.53 million and P = 3,760.47 million,
Others respectively.
Other receivables consist mainly of nontrade receivables from private entities and various
individuals. These are non-interest bearing and are due and demandable.

Advances to private companies

Advances to private companies pertain to advances made by the Group to third parties to
facilitate the transfer of title to the buyers. These include expected charges for documentary
stamp taxes, transfer fees, registration fees, city and business tax and notarial expenses.
These advances are liquidated by the private companies once the purpose for which the
advances were made had been accomplished and accordingly will be charged to
miscellaneous customer charges.

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12. Real Estate Inventories 13. Other Current Assets

The rollforward of the account follows: This account consists of:

2018 2017 2018 2017

Balance at beginning of year P
= 39,700,029,385 P = 22,954,662,398 Input value added tax (VAT) P
= 2,261,887,759 P
= 1,548,759,336
Reclassification from land Creditable withholding taxes 1,615,080,346 924,833,503
and improvements (Note 3) − 11,217,743,850 Construction materials and others 1,277,003,318 314,767,438
Balance at beginning of year, as restated 39,700,029,385 34,172,406,248 Prepaid expenses 823,074,410 1,196,323,940
Construction/development costs incurred 13,277,227,909 8,449,761,735 Restricted cash 25,148,297 42,016
Additions to land 2,678,160,601 6,196,949,722 Hotel inventories 4,343,836 2,104,413
Borrowing costs capitalized (Note 24) 1,468,608,929 2,035,746,218 Deposits for real estate purchases and others 5,989,068 31,042,638
Reclassification from land and improvements − 2,148,426,118 P
= 6,012,527,034 P
= 4,017,873,284
Cost of real estate sales (Note 25) (15,177,160,125) (13,303,578,388)
P
= 41,946,866,699 P = 39,700,029,385 Input VAT is a tax imposed on purchases of goods, professional and consulting services and
The real estate inventories are carried at cost. No inventories are recorded at amounts lower construction costs. These are available for offset against output VAT in future periods.
than cost in 2018 and 2017.
Creditable withholding taxes pertain to taxes withheld by the customer and are recoverable
This account consists of: and can be applied against income tax in future periods. As of December 31, 2018 and 2017,
the Group applied to income tax payable creditable withholding taxes amounting to
2018 2017 P
= 980.52 million and P
= 1,085.41 million, respectively.
Subdivision land for sale and development P
= 36,187,748,730 P
= 33,766,390,942
Condominium units for sale and development 4,817,110,823 4,704,409,287 Construction materials pertain to supplies used in the construction and development.
Residential house units for sale and
development 942,007,146 1,229,229,156 Prepaid expenses mainly include commission, marketing fees, taxes and licenses, rentals and
P
= 41,946,866,699 P
= 39,700,029,385 insurance. As at January 1, 2018, prepaid commission was reclassified as cost to obtain
contract in the consolidated statements of financial position amounting to P
= 953.85 million
Subdivision land for sale and development represents real estate subdivision projects in which (Note 3).
the Group has been granted License to Sell (LTS) by the Housing and Land Use Regulatory
Board of the Philippines. It also includes raw land inventories that are under development Cash restricted for use are deposits restricted solely for payment of the principal amortization
and those that are about to undergo development. and interest of certain bank loans. These deposits bear prevailing interest rates and will be
retained as deposits until the bank loans are fully paid. Deposit balance should be equivalent
Real estate inventories recognized as cost of sales amounted to P = 15,177.16 million in 2018, to two quarters of debt amortization. Interest income from cash restricted for use amounted
P
= 13,303.58 million in 2017 and P = 12,321.00 million in 2016, and are included as cost of real to P= 7.64 million, P
= 6.20 million and P
=4.73 million in 2018, 2017 and 2016, respectively
estate sales in the consolidated statements of comprehensive income (Note 25). Cost of real (Note 24).
estate sales includes acquisition cost of subdivision land, amount paid to contractors,
development costs, capitalized borrowing costs and other costs directly attributable to bringing Deposits for real estate purchases represent the Group’s advances to real estate property
the real estate inventories to its intended condition. owners for the acquisition of real estate properties which will be applied against the selling
price once the Group attains control over the property.
Construction and development costs represent approximately 80.00% to 90.00% of the cost
of sales.

Borrowing cost capitalized to inventories in 2018, 2017 and 2016 amounted to

P
= 1,468.61 million, P= 2,035.75 million and P=1,439.59 million, respectively (Note 24). The
capitalization rate used to determine the borrowing costs eligible for capitalization is 6.48% in
2018, 6.15% in 2017 and 6.47% in 2016.

Except as stated, the inventories are not used to secure the borrowing of the Group (Note 20).

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14. Investment Properties The reclassification of P

= 4,366.50 million in 2018 from construction in progress to building and
improvements represents completed retail malls in Iloilo, Naga, Cagayan De Oro, General
The rollforward of analysis of this account follows: Trias, Tanza and Talisay Cebu, with gross floor area of 211,892 sqm.

2018 Rental income earned from investment properties amounted to P = 6,464.74 million,
Building and P
= 5,625.23 million and P
=4,375.33 million in 2018, 2017 and 2016, respectively. Repairs and
Building Construction in
Land Improvements Progress Total maintenance costs recognized under “Operating expenses” arising from investment
Cost properties amounted to P = 218.00 million, P
= 149.46 million and P= 107.12 million for the years
Balance at beginning of year, as ended December 31, 2018, 2017 and 2016, respectively (Note 25). Cost of property
restated P
= 35,043,673,703 P
= 24,565,082,729 P
= 4,390,487,543 P= 63,999,243,975 operations amounted to P = 1,625.38 million, P= 1,420.42 million and P
= 1,874.25 million for the
Additions 5,182,397,087 654,626,295 10,268,528,084 16,105,551,466
Reclassifications − 4,366,500,122 (4,366,500,122) − years ended December 31, 2018, 2017 and 2016. For the terms and conditions on the lease,
Retirement − − − − refer to Note 32.
Balances at end of year 40,226,070,790 29,586,209,146 10,292,515,505 80,104,795,441
Accumulated Depreciation
and Amortization
Except as stated, the investment properties are not used to secure the borrowings of the
Balances at beginning of year − 4,897,883,304 − 4,897,883,304 Group (Note 20).
Depreciation and amortization
(Note 25) − 1,276,273,179 − 1,276,273,179 The Group has no restrictions on the realizability of its investment properties and no
Retirement − − − −
Balances at end of year − 6,174,156,483 − 6,174,156,483
contractual obligations to either purchase or construct or develop investment properties or for
Net Book Value P
= 40,226,070,790 P
= 23,412,052,663 P
= 10,292,515,505 P
= 73,930,638,958 repairs, maintenance and enhancements.

2017 The fair value of the land amounted to P = 35,333.39 million and P = 33,230.71 million as of
Building and December 31, 2018 and 2017, respectively. This is based on the most recent selling price of
Building Construction in similar property. The parcels of land are located in cities and municipalities like Mandaluyong,
Land Improvements Progress Total
Cost
Las Piñas, Taguig, Naga, Imus, San Jose del Monte, Sta. Rosa, Alabang and Kawit.
Balances at beginning of year P
= 11,847,065,023 P
= 20,548,325,279 P
= 3,460,413,004 P
= 35,855,803,306
Reclassification adjustment (Note 3) 19,268,879,555 − − 19,268,879,555 As of December 31, 2018 and 2017, the aggregate fair values of investment properties
Balance at beginning of year, as amounted to P=77,759.23 million and P
=63,489.77 million, respectively. The most recent fair
restated 31,115,944,578 20,548,325,279 3,460,413,004 55,124,682,861
Additions 3,890,669,696 951,880,581 4,032,068,694 8,874,618,971 value was determined on September 30, 2018 by a third-party appraiser.
Reclassifications 37,059,429 3,064,934,726 (3,101,994,155) −
Retirement − (57,857) − (57,857) The valuation techniques adopted for the measurement of fair values are the market approach
Balances at end of year 35,043,673,703 24,565,082,729 4,390,487,543 63,999,243,975 for the land and cost approach for the buildings and land improvements.
Accumulated Depreciation
and Amortization
Balances at beginning of year − 3,790,270,632 − 3,790,270,632 The market price per square meter of the land ranged P =1,258 to P
=173,017, while building and
Depreciation and amortization improvements ranged from P = 17,701 to P= 209,304. The fair value measurement using
(Note 25) − 1,107,670,529 − 1,107,670,529 unobservable data in active market is Level 3 of the fair value hierarchy. The estimated useful
Retirement − (57,857) − (57,857)
Balances at end of year – 4,897,883,304 – 4,897,883,304
life of the investment properties other than land is 40 years.
Net Book Value P
= 35,043,673,703 P
= 19,667,199,425 P
= 4,390,487,543 P
= 59,101,360,671
Borrowing cost capitalized to investment properties in 2018, 2017 and 2016 amounted to
The investment properties consist mainly of land and commercial centers that are held to earn P
= 1,319.45 million, P= 846.20 million and P= 1,167.18 million, respectively (Note 24). The
rental income. These include Vista Malls and Starmalls that are located in key cities and capitalization rate used to determine the borrowing costs eligible for capitalization is 6.48% in
municipalities in the Philippines and five BPO commercial centers. The construction in 2018, 6.15% in 2017 and 6.47% in 2016.
progress represents capitalized costs arising from a construction of commercial center that is
located in Taguig City, Las Piñas City, Cavite, Iloilo, Davao, Naga and Cagayan de Oro which
is due to be completed in 2018 to 2020. The percentage of completion of various
constructions in progress ranges from 5.00% to 95.00% in 2018 and from 5.00% to 90.00%
in 2017.

On September 28, 2018, the Group acquired land for commercial project from Fine Properties,
Inc. its ultimate parent company amounting to P =4,525.94 million. The consideration of
P
= 2,515.94 million was paid in cash while the remaining P
=2,010.00 million was offset against
the receivables of the Group from Fine Properties Inc.

160 VISTA LAND

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15. Property and Equipment 16. Project Development Costs

The rollforward analyses of this account follow: Project development costs mainly pertain to cash advances to Bria Homes, Inc., a real estate
developer of affordable house and lot, contracted by the Group for the construction of
Office
Building and Furniture, socialized housing units as required by the Housing and Land Use Regulatory Board (HLURB)
Building Transportation Fixtures and Construction
Land Improvements Equipment Equipment Equipment
Other Fixed
Assets Total
(Note 28). These advances for project development costs are included in the total cost of
Cost project development which eventually forms part of the cost of sales. This account also
Balances at beginning of year P
= 83,333,600 P
= 577,461,291 P
= 703,902,500 P
= 639,723,804 P
= 369,203,710 P
= 192,345,413 P
= 2,565,970,318
Additions − 345,847,699 116,390,649 156,997,803 214,584,049 67,317,696 901,137,896 includes advances made to joint venture partners.
Balances at end of year 83,333,600 923,308,990 820,293,149 796,721,607 583,787,759 259,663,109 3,467,108,214
Accumulated Depreciation
and Amortization The following are the subsidiaries with outstanding LDAs accounted for as project
Balances at beginning of year
Depreciation and amortization
P
=− P
= 350,905,699 P
= 490,935,263 P
= 583,505,422 P
= 124,567,131 P
= 130,238,170 P
= 1,680,151,685
development costs:
(Note 25) − 9,580,338 46,056,252 65,721,795 35,469,826 16,182,658 173,010,869
Balances at end of year − 360,486,037 536,991,515 649,227,217 160,036,957 146,420,828 1,853,162,554
Net Book Value P
= 83,333,600 P
= 562,822,953 P
= 283,301,634 P
= 147,494,390 P
= 423,750,802 P
= 113,242,281 P
= 1,613,945,660 Entity Project 2018 2017
PCLHI Horizontal P
= 1,357,175,068 P
= 1,143,046,937
2017 CPI Horizontal 857,272,589 731,731,397
Office Brittany Horizontal 843,187,193 830,384,147
Building and Furniture,
Building Transportation Fixtures and Construction Other Fixed HDC Horizontal 681,863,120 556,424,966
Land Improvements Equipment Equipment Equipment Assets Total CAPI Horizontal 601,959,880 598,534,852
Cost
Balances at beginning of year P
= 83,333,600 P
= 573,959,560 P
= 554,066,534 P
= 615,859,385 P
= 330,953,472 P
= 185,540,984 P
= 2,343,713,535 VRI Vertical 123,796,314 174,160,567
Additions − 3,501,731 149,835,966 23,864,419 38,250,238 6,804,429 222,256,783 P
= 4,465,254,164 P
= 4,034,282,866
Balances at end of year 83,333,600 577,461,291 703,902,500 639,723,804 369,203,710 192,345,413 2,565,970,318
Accumulated Depreciation
and Amortization
Balances at beginning of year P
=− P
= 339,283,586 P
= 426,696,953 P
= 541,397,280 P
= 105,995,347 P
= 108,090,161 P
= 1,521,463,327
Depreciation and amortization
(Note 25) − 11,622,113 64,238,310 42,108,142 18,571,784 22,148,009 158,688,358
17. Other Noncurrent Assets
Balances at end of year − 350,905,699 490,935,263 583,505,422 124,567,131 130,238,170 1,680,151,685
Net Book Value P
= 83,333,600 P
= 226,555,592 P
= 212,967,237 P
= 56,218,382 P
= 244,636,579 P
= 62,107,243 P
= 885,818,633
This account consists of:
In 2018, additions to building and building improvements amounting to P
=345.85 million 2018 2017
pertains to hotel building of Mella Hotels, Inc. Cash restricted for use - net P
= 769,308,969 P = 934,178,185
Deposits 698,795,169 583,774,070
Depreciation and amortization expense charged to operations amounted to P = 173.01 million,
Model house accessories at cost 170,285,124 168,438,707
P
= 158.69 million and P
= 256.63 million for the years ended December 31, 2018, 2017 and 2016,
Systems development costs 55,250,228 18,177,238
respectively (Note 25).
Other assets 15,798,485 2,938,237
As of December 31, 2018 and 2017, fully depreciated assets that are still actively in use P
= 1,709,437,975 P
= 1,707,506,437
amounted to P
=468.66 million and P
= 331.29 million, respectively.
Noncurrent portion of deposits include deposits for real estate purchases and deposits to utility
The Group’s transportation equipment with a carrying value of P = 129.73 million and companies which will either be applied or recouped against future billings or refunded upon
P
= 212.97 million as of December 31, 2018 and 2017, respectively, were pledged as collateral completion of the real estate projects. These deposits are necessary for the continuing
under chattel mortgage to secure the car loans of the Group with various financial institutions construction and development of real estate projects of the Group.
(Note 20).
Model house accessories pertain to the furniture and fixture and other interior decorations
Borrowing cost capitalized to property and equipment in 2018 amounted to P
=83.78 million used and displayed in the model house inventory.
(Note 24). The capitalization rate used to determine the borrowing costs eligible for
The rollforward analysis of system development costs follow:
capitalization is 6.48% in 2018.
2018 2017
Except as stated, the property and equipment are not used to secure the borrowings of the
Balance at beginning of year P
= 18,177,238 P
= 22,695,623
Group (Note 20).
Additions 67,917,997 34,278,886
Amortization (Note 25) (30,845,007) (38,797,271)
Balance at end of year P
= 55,250,228 P
= 18,177,238

162 VISTA LAND

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2018 ANNUAL REPORT 163
 - 73 - - 74 -

Amortization of system development costs amounted to P = 30.85 million, P

= 38.80 million and Accrued expenses
P
= 45.71 million for the years ended December 31, 2018, 2017 and 2016, respectively. These Accrued expenses consist mainly of accruals for project cost which are incurred but not yet
are included in the “Depreciation and amortization” account under “Operating expenses” in billed, interest on bonds and bank loans, light and power, marketing costs, professional fees,
the consolidated statements of comprehensive income (Note 25). postal and communication, supplies, repairs and maintenance, transportation and travel,
security and insurance. These are noninterest- bearing. Details of accrued expenses as
follow:
18. Accounts and Other Payables
2018 2017
This account consists of: Accrued expenses
Interest P
= 545,978,645 P
= 386,940,966
2018 2017 Rental 461,826,333 247,941,900
Current portion of liabilities for purchased land Marketing 125,455,584 230,017,952
(Note 22) P
= 4,962,974,544 P= 4,526,299,339 Subdivision maintenance 48,569,686 18,689,068
Accounts payable Security 61,501,095 11,998,348
Contractors 2,094,809,983 2,378,231,392 Professional fees 14,374,115 8,644,842
Suppliers 1,318,689,133 1,481,099,089 Power, light and power 20,265,900 3,682,479
Buyers 764,326,887 416,607,741 Repairs and maintenance 43,317,896 3,076,537
Incidental costs 1,257,661,607 237,708,812 13th month/bonus 1,217,704 2,952,991
Commissions payable 1,933,634,673 836,870,044 Management fees 1,860,876 1,895,262
Accrued expenses 1,344,027,138 923,148,155 Others 19,659,304 7,307,810
Current portion of deferred output tax (Note P
= 1,344,027,138 P
= 923,148,155
22) 1,147,063,010 849,966,969
Current portion of retention payable (Note 22) 780,372,681 652,518,032 Current portion of deferred output tax
Other payables 133,330,703 972,505,163 Deferred output tax pertains to the VAT charged to the buyers on installment upon contracting
P
= 15,736,890,359 P
= 13,274,954,736 of real estate sale but were not yet collected as of reporting date. Further, upon collection of
the installment receivables, the equivalent output tax from collected installment receivables
Current portion of liabilities for purchased land are included in the current VAT payable of the month when collection is made. Deferred
Liabilities for purchased land are payables to various real estate property sellers. Under the output VAT pertaining to installment receivables that are beyond one year after report date
terms of the agreements executed by the Group covering the purchase of certain real estate are presented as noncurrent liabilities (Note 22).
properties, the titles of the subject properties shall be transferred to the Group only upon full
payment of the real estate payables. Liabilities for purchased land that are payable beyond Commissions payable
one year from year end date are reported as noncurrent liabilities (Note 22). Commissions payable pertain to fees due to brokers for services rendered which are expected
to be settled within one year.
Accounts payable - contractors
Accounts payable - contractors pertain to contractors’ billings for construction services related Current portion of retention payable
to the development of various projects of the Group. These are expected to be settled within Retention payable pertains to 10.00% retention from the contractors’ progress billings which
a year after the financial reporting date. will be released after the completion of contractors’ project. The 10.00% retention serves as
a holdout amount withheld from the contractor to cover for back charges that may arise from
Accounts payable - suppliers quality issues in affected projects. Retention payables that are payable beyond one year from
Accounts payable - suppliers represent construction materials, marketing collaterals, office year end date are presented as noncurrent liability (Note 22).
supplies and property and equipment ordered and delivered but not yet due. These are
expected to be settled within a year from recognition date. Other payables
Other payables include dues from remittance to Social Security System, Philippine Health
Accounts payable - buyers Insurance Corporation, Home Development Mutual Fund, withholding taxes, payables to JV
Accounts payable - buyers pertain to refunds arising from the cancellation of contract to sell partners and various payables. These are noninterest-bearing and are normally settled within
agreement which is determined based on the required refund under the Maceda Law. one year.

Accounts payable - incidental costs

Accounts payable - incidental costs pertain to liabilities incurred in relation to land acquisitions.
This includes payable for titling costs, clearing, security and such other additional costs
incurred.

164 VISTA LAND

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2018 ANNUAL REPORT 165
 166
VISTA LAND
Total

purposes.
receivable.

Payment
Availment
Security deposits

the succeeding years.

Less current portion

This account consists of:

Balance at end of the year

Customer’s deposits (Note 3)

20. Bank Loans and Loans Payable

19. Customers’ Advances and Deposits

Balance at the beginning of the year

- 75 -

The rollforward analysis of this account follows:

P
P
P
P

lease term or applied to unpaid rentals and damages.

5,332,822,509
44,476,052,515
11,880,116,880
2018
2018

= 1,297,839,418 P
= 1,297,839,418 P

= 39,143,230,006 P
= 35,799,812,028 P
as contract liabilities effective January 1, 2018 upon adoption of PFRS 15 (Note 3).
− 2,531,778,443
2017

= 3,617,888,803
= 1,086,110,360

= 32,179,459,075
= 36,087,242,892

3,620,352,953
35,799,812,028
6,618,873,487
2017

(3,203,876,393) (6,906,304,351)
In 2017, this account consists of customers’ reservation fees, down payments and excess of

*SGVFS034680*
The excess of collections over the recognized revenue is applied against the receivables in
the lessees as required under lease contracts, which will be refunded upon termination of the

not reached the minimum required percentage are presented as customers’ advances and

These bank loans are obtained to finance capital expenditures and for general corporate
The Group requires buyers of real estate units to pay a minimum percentage of the total selling
Security deposits pertain to the three-month rental and three-month advance rental paid by

Bank loans pertain to the borrowings of the Group from various local financial institutions.
and these deposits and down payments are applied against the related installment contracts
deposits. When the level of required payment is reached by the buyer, a sale is recognized
price before the two parties enter into a sale transaction. Payments from buyers which have
collections over the recognized revenue for a specific customer’s account. This is presented

- 76 -

Details of the bank loans as of December 31, 2018 and 2017 follow:
Loan Type Date of Availment 2018 2017 Maturity Interest Rate Payment Terms Covenants/Collaterals
VLLI
Bank loan June 2013 P
=− P
= 666,666,667 June 2018 5.75% to Interest and principal payable Current ratio at least
5.90% quarterly 1.75:1.00 and DSCR not
less than 1:1.00; unsecured
Bank loan Renewed in October 2018; 1,500,000,000 1,500,000,000 July 2019; renewable 4.25% Interest payable quarterly, principal With collateral
Originally availed in upon maturity subject to payable upon maturity
September 2014 change in interest rate
Bank loan September 2016 2,174,307,549 2,587,834,482 September 2023 5.00% Interest and principal payable Current ratio of at least
quarterly 1:1.00; Debt to Equity
maximum of 2.50:1.00 and
DSCR 1:1.00; unsecured
Bank loan October 2016 3,800,000,000 4,600,000,000 October 2023 5.00% Interest and principal payable Current ratio of at least
quarterly 1:1.00; Debt to Equity
maximum of 2.50:1.00 and
DSCR 1:1.00; unsecured
Bank loan Availed in 2017 and 1,038,211,200 2,500,000,000 Various maturities in 3.88% to Interest payable monthly, principal With collateral
renewed in various dates 2018, renewed upon 4.00% payable upon maturity
in 2018 maturity subject to
change in interest rate
Bank loan Availed in 2017 and 28,403,987,950 13,625,299,000 Various maturities in 3.75% to Interest payable monthly, principal Current ratio of at least
renewed in various dates 2018 and 2019, 4.00% payable upon maturity 1:1.00; Debt to Equity
in 2018 renewed upon maturity maximum of 2.50:1.00 and
subject to change in DSCR 1:1.00; with
interest rate collateral
36,916,506,699 25,479,800,149
MAPI
Bank loan Availed in various dates in 841,154,139 1,321,884,709 August 2020 5.75% to Interest and principal payable Current ratio of at least
2013 and 2014 6.12% quarterly 1:25:1.00 and debt to
Equity maximum of
3:00:1.00; with collateral
Bank loan December 2014 91,500,000 182,342,446 December 2019 6.25% Interest and principal payable With collateral
monthly
Bank loan Availed in various dates in 1,477,853,905 1,932,578,183 March 2022 5.46% Interest and principal payable With collateral
2015 monthly
Bank loan July 2018 500,000,000 500,000,000 June 2027 6.23% Interest and principal payable Current ratio of at least
monthly 1:1.00; Debt to Equity
maximum of 2.50:1.00 and
DSCR 1:1.00; with
collateral
2,910,508,044 3,936,805,338
MC
Bank loan Availed in various dates in − 122,126,194 Various maturities in 7.00% to Interest and principal payable With collateral
2012 and 2013 2017 to 2018 7.25% monthly
(Forward)

*SGVFS034680*
2018 ANNUAL REPORT
167
 - 78 -

*SGVFS034680*
Covenants/Collaterals
VLLI
In June 2013, the Parent Company obtained unsecured P = 1,000.00 million and unsecured

Chattel mortgage

Chattel mortgage

Chattel mortgage

Chattel mortgage

Chattel mortgage
Chattel mortgage
P
= 5,000.00 million peso-denominated bank loans from local banks which bear annual fixed
With collateral
With collateral

Unsecured

Unsecured

Unsecured

Unsecured
interest rate of 5.90% and 5.75%, respectively. The loans will mature in June 2018. The
principal balance of the loans are paid in twelve (12) and twenty (20) equal quarterly
installments, respectively. The unsecured P = 5,000.00 million peso-denominated bank loan
requires the Parent Company to maintain current ratio of 1:1.75 and debt-service coverage

Interest payable quarterly, principal

ratio (DSCR) of 1:1.00. These restrictions and requirements were complied with by the Parent
Company as at December 31, 2018 and 2017. The loans matured June 28, 2018 and were
Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

Interest and principal payable

fully paid.

payable upon maturity

On September 11, 2014, the Parent Company obtained a peso-denominated bank loan from
Payment Terms

a local bank amounting P= 1,500.00 million with fixed interest of 4.25% per annum. The bank
loan matured and was renewed on October 3, 2018 with no change in the fixed interest rate
quarterly

quarterly

quarterly

quarterly
quarterly

monthly

monthly

monthly

monthly

monthly
monthly
of 4.25% per annum and will mature on July 2019. The loan is secured by the HTM
investments of VII amounting US$31.60 million. As at December 31, 2018 and 2017,
outstanding balance of the loans amounted to P = 1,500.00 million.
Interest Rate

10.50%

10.50%

10.50%

10.75%

10.50%

various
5.75%

5.50%

5.50%

5.50%
5.75%

6.70% On September 23, 2016, the Parent Company obtained a 7-year unsecured peso-
denominated loan from a local bank amounting P =3,500.00 million which bears annual fixed
interest rate of 5.00% payable quarterly. The principal balance of the loan will be paid in
twenty eight (28) equal quarterly installments commencing on the first interest payment date.
The loan requires the Parent Company to maintain a current ratio of at least 1.00:1.00, a
Various maturities in

maximum debt-to-equity ratio of 2.50:1.00 and a debt-service coverage ratio (DSCR) of at

December 2018

December 2019

December 2019

December 2020
December 2024

least 1.00:100. These were complied with by the Parent Company as at December 31, 2018
August 2019

August 2020
- 77 -

March 2020

and 2017. In 2018 and 2017, the Parent Company paid principal payments amounting to
April 2019

April 2019
July 2022
Maturity

P
= 500.00 million and P= 500.00 million , respectively. As at December 31, 2018 and 2017,
2019

outstanding balance of the loans amounted to P = 2,174.31 million and P= 2,587.83 million,
respectively.
2017

166,145

891,446

5,067,422
176,535,983

19,114,655

11,159,339
177,427,429

529,411,765

1,176,779
= 151,764,706

3,318,971,627

3,592,862,527

1,056,820,480

1,075,935,135

990,000,000

35,799,812,028
3,620,352,953
= 32,179,459,075
1,520,588,544

On October 5, 2016, the Parent Company obtained a 7-year unsecured peso-denominated

loan from a local bank amounting P = 5,000.00 million which bears annual fixed interest rate of
P

5.00% payable quarterly. The principal balance of the loan will be paid in twenty five (25)
P

equal quarterly installments commencing on the fourth interest payment date. The loan
2018

779,632

58,823,529

262,190

6,721,123
59,085,719
= 71,764,706

587,362,953

10,304,386

13,268,505
597,667,339

176,470,588
2,874,136,603

847,142,857

2,000,700
2,945,901,309

44,476,052,515
5,332,822,509
= 39,143,230,006
1,025,614,145

requires Parent Company to maintain a current ratio of at least 1.00:1.00, a maximum debt-
to-equity ratio of 2.50:1.00 and a DSCR of at least 1.00:100. These were complied with by
the Parent Company as at December 31, 2018 and 2017. In 2018 and 2017, the Parent
P

Company paid P = 800.00 million and P=400.00 million principal payments, respectively. As at
P

December 31, 2018 and 2017, outstanding balance of the loans amounted to P = 3,800.00
Availed in various dates in

million and P
= 4,600.00 million, respectively.
Date of Availment

In 2017, the Parent Company obtained new peso-denominated bank loans from local banks
November 2010

December 2011

December 2017
February 2010

February 2010

February 2013

totaling P
=2,500.00 million with interests ranging from 3.875% to 4.00% per annum payable
March 2016

Bank loans, net of current portion

April 2014

April 2014

monthly. The loans matured in 2018 and were renewed in various dates in 2018. The loans
May 2010
July 2016

are secured by a hold-out on the identifiable investments at amortized cost of VII totaling
2014

US$51.80 million. As at December 31, 2018 and 2017, outstanding balance of the loans
amounted to P=1,038.21 million and P = 2,500.00 million, respectively.
Less current portion

The Parent Company has various peso-denominated bank loans from different local banks
Loan Type
Bank loan

Bank loan

Bank loan

Bank loan

Bank loan

Bank loan

Bank loan

Bank loan

Bank loan

Bank loan

Bank loan
Bank loan

with fixed interest-rates ranging from 3.75% to 4.00% per annum. These bank loans are
Brittany

PCLHI

renewable upon maturity subject to change in interest rates and/or hold-out amount of the
CAPI

CHI

CPI

VRI

investments at amortized cost of VII. These loans are secured by hold-out of the investments

168 VISTA LAND

*SGVFS034680*
2018 ANNUAL REPORT 169
 - 79 - - 80 -

at amortized cost of VII amounting to US$300.10 million. The loans require the Group to of five years from the date of drawdown and bear fixed annual interest rate of 5.75%. As of
maintain a current ratio of at least 1.00:1.00, a maximum debt-to-equity ratio of 2.50:1.00 and December 31, 2018 and 2017, outstanding balance of loans amounted to P = 71.76 million and
a DSCR of at least 1.00:100. These were complied with by the Parent Company as at P
= 151.76 million, respectively.
December 31, 2018 and 2017. As at December 31, 2018 and 2017, outstanding balance of In July 2016, MC obtained a loan from a local bank worth P = 4,000.00 million which was used
the loans amounted to P = 28,403.99 million and P = 13,625.30 million, respectively. solely for capital expenditure and general corporate purposes and has a maturity of seven
years from the date of drawdown and bears an annual fixed interest rate of 5.75%. Real
MAPI estate contracts of MC as well as investment properties in Starmall Alabang are used as a
In 2013, MAPI entered into a secured term loan agreements with a local bank for a total credit mortgage for this loan. As of December 31, 2018 and 2017, outstanding balance of loans
line of P
= 2,700.00 million. As of December 31, 2018, a total of P =2,300.00 million has been amounted to P =2,874.14 million and P
= 3,318.97 million, respectively.
drawn from this secured facility to finance the construction of various ongoing projects of
MAPI. The loans have maturities beginning December 2015 to August 2020 and bear annual MC is also required to maintain a reserve fund for its future principal and interest loan
interest rates ranging from 5.75% to 6.12%. The loan requires MAPI to maintain a current repayments. In accordance with the loan agreement with the bank, MC is required to maintain
ratio of not lower than 1.25:1:00 and debt-equity ratio of not higher than 3.00:1.00. These a reserve fund for its future principal and interest loan repayments amounting to
were complied with by MAPI as at December 31, 2018 and 2017. As of December 31, 2018 P
= 231.82 million and P
= 126.15 million as of December 31, 2018 and 2017, respectively. The
and 2017, outstanding balance of the loans amounted to P = 841.15 million and P= 1,321.88 reserve fund is presented as “Restricted cash” under “Other noncurrent assets” account in the
million, respectively. consolidated statements of financial position (Note 17).

MAPI is also required to maintain a reserve fund for its future loan and interest repayments. The rollforward analysis of debt issue costs on bank loans follow:
In accordance with the agreement, MAPI maintains a reserve fund amounting to P = 537.49
million and P
= 808.02 million as of December 31, 2018 and 2017, respectively, which is 2018 2017
presented as “Restricted cash” under “Other noncurrent assets” account in the consolidated Balance at the beginning of the year P
= 318,873,286 P= 444,408,825
statements of financial position (Note 17). Additions 26,000,000 −
Amortizations (Note 24) (95,055,027) (125,535,539)
In December 2014, MAPI entered into a secured term loan agreement with a local bank Balance at end of the year P
= 249,818,259 P= 318,873,286
amounting to P =366.00 million also primarily to finance various ongoing mall constructions.
The loan has maturities beginning December 2014 to December 2019 and bears annual Residential Subsidiaries
interest of 6.25%. As of December 31, 2018, outstanding balance of the loans amounted to The Group’s residential subsidiaries have various peso-denominated bank loans from
P
= 91.50 million and P
= 182.34 million, respectively. different banks with fixed interest-rates ranging from 5.50% to 10.75% per annum. These
bank loans are renewed annually upon maturity. As at December 31, 2018 and 2017,
In 2015, MAPI entered into a secured term loan agreement with a local bank amounting to outstanding balance of the loans amounted to P = 1,703.14 million and P = 2,790.34 million,
P
= 2,273.62 million primarily to finance various ongoing mall constructions. The loans have respectively. Of the total bank loans, P =33.33 million and P = 37.58 million were secured by
maturities of seven years from the date of drawdown and bear an annual fixed interest rate of chattel mortgages on the Group’s transportation equipment as at December 31, 2018 and
5.46%. As of December 31, 2018 and 2017, outstanding balance of the loans amounted to 2017, respectively (Note 15).
P
= 1,477.85 million and P
=1,932.58 million, respectively.
Bank loan covenants
In July 2018, MAPI obtained a 10-year unsecured peso denominated loan from a local bank In addition to financial covenants, unless otherwise stated, the bank loans of the Group
amounting to P =500.00 million which bears annual fixed interest rate of 6.23%. The principal provide for certain restrictions and requirements with respect to, among others, payment of
balance of the loan will be paid in thirty two (32) equal quarterly installments commencing on dividends, incurrence of additional liabilities, investment and guaranties, mergers or
the ninth interest payment date. The loan requires MAPI to maintain a current ratio of at least consolidations or other material changes in their ownership, corporate set-up or management,
1.00:1.00, a maximum debt-to-equity ratio of 2.50:1.00 and a DSCR of at least 1.00:100. acquisition of treasury stock, disposition and mortgage of assets. These restrictions and
These were complied with by MAPI as at December 31, 2018. The outstanding balance as requirements were complied with by the Group as at December 31, 2018 and 2017.
at December 31, 2018 amounted to P = 500.00 million.
Loans Payable
MC As stated in Note 10 to the consolidated financial statements, loans payable pertains to the
In 2012 and 2013, MC obtained various term loans from local banks to finance the upgrade remaining balance of “Installment contracts receivable” of subsidiaries that were sold on a
of the air conditioning systems of Starmall EDSA - Shaw and Starmall Alabang. The loans with recourse basis. These loans bear annual fixed interest rates ranging from 5.50% to
have maturities from October 2014 to February 2020 and bear an annual fixed interest rates 7.50% and 7.00% to 12.00% in 2018 and 2017, respectively, payable on equal monthly
ranging from 7.00% to 7.25%. These were fully paid as of December 31, 2018. installments over a maximum period of 3 to 15 years. The installment contracts receivables
serve as the collateral for the loans payable. These will mature on various dates up to
In 2014, MC obtained various unsecured loans from a local bank to finance the upgrade of December 2027.
the air conditioning systems of Starmall Las Piñas - Main and Starmall Las Piñas - Annex and
the acquisition of generator set upgrades for all the malls of MC. The loans have maturities

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2018 ANNUAL REPORT 171
 172
P

VISTA LAND
to P
Payments
Availments

Less current portion

= 2,124.64 million and P

= 239.82 million and P

Balance at beginning of year
Movement of loans payable follows:
- 81 -

= 318.87 million, respectively.

P
P

336,726,340
2018

= 2,447,444,225 P
= 3,760,465,983 P

Interest expense on bank loans and loans payable amounted to P

644,355,649
2,784,170,565 3,760,465,983
1,727,577,197 2,318,488,025
2017

= 3,116,110,334
= 3,887,252,607

(2,703,872,615) (2,445,274,649)

*SGVFS034680*
December 31, 2018 and 2017, the balance of unamortized issue cost on bank loans amounted
=821.46 million in 2018, 2017 and 2016, respectively (Note 24). As of
= 3,386.51 million,

- 82 -

Details of the loans payable as of December 31, 2018 and 2017 follow:

Date of Interest Covenants/

Entity Availment 2018 2017 Maturity Rate Payment Terms Collaterals
CHI
Interest and principal payable
Loans payable various P
= 189,784,197 P
= 285,526,707 March 2029 various monthly With recourse
Brittany
Interest and principal payable
Loans payable various − 93,098,784 April 2018 various monthly With recourse
VRI
Interest and principal payable
Loans payable various 1,304,021,311 2,170,644,649 December 2029 various monthly With recourse
CAPI
Interest and principal payable
Loans payable various − 33,459,339 March 2028 various monthly With recourse
CPI
Interest and principal payable
Loans payable various 457,875,817 606,399,802 October 2028 various monthly With recourse
PCLHI
Interest and principal payable
Loans payable various 832,489,240 571,336,702 June 2030 various monthly With recourse
2,784,170,565 3,760,465,983
Less current portion 336,726,340 644,355,649
Loans payable, net of
current portion P = 3,116,110,334
= 2,447,444,225 P
2018 ANNUAL REPORT

*SGVFS034680*
173
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21. Notes Payable b. US$425.00 million Notes (Due June 2022)

On June 18, 2015, VII (the Issuer) issued US$300.00 million notes (“Notes”) with a
This account consists of: term of seven years from initial draw down date. The interest rate is 7.375% per
annum payable semi-annually in arrears on June 18 and December 17 of each year
2018 2017 beginning on December 17, 2015. Said notes were used to refinance notes issued
Dollar denominated bonds P
= 36,859,221,848 P
= 34,881,714,167 October 2013 due 2018 and April 2014 due 2019. As of December 31, 2018 and 2017,
Retail bonds 19,790,521,707 9,892,318,736 outstanding balance of note amounted to US$238.83 million (P = 12,557.80 million) and
Corporate note facility 17,637,251,968 9,727,009,335 US$234.34 million (P
= 11,700.74 million), respectively. There are no properties owned
74,286,995,523 54,501,042,238 by the Group that were pledged as collateral to this note.
Less current portion 4,760,986,563 60,890,732
P
= 69,526,008,960 P
= 54,440,151,506 On February 2, 2016, an additional unsecured note, with the same terms and
conditions with the above notes, were issued by the Group amounting to US$125.0
million. The notes were issued at 102% representing yield to maturity of 6.979%. As
A. Dollar Denominated Bonds
of December 31, 2018, and 2017, outstanding balance of note amounted to
US$121.63 million (P = 6,395.11 million) and US$124.54 million (P
= 6,218.33 million),
a. US$350.00 million Notes (Due November 2024)
respectively. There are no properties owned by the Group that were pledged as
On November 28, 2017, VII (the Issuer) issued US$350.00 million notes (“Notes”) with
collateral to this note.
a term of seven years from initial draw down date. The interest rate is 5.75% per
annum payable semi-annually in arrears on May 28 and November 28 of each year
Redemption at the option of the issuer
beginning on November 28, 2017. The notes were used to fund tender offer for
At any time, the Issuer may on any one or more occasions redeem all or part of the
existing Notes due October 4, 2018 and April 29, 2019 and proceeds was used to
Notes, by giving notice, at a redemption price equal to 100% of the principal amount
refinance existing debt and for general corporate purposes. There are no properties
of the Notes redeemed, plus the Applicable Premium as of, and accrued and unpaid
owned by the Group that were pledged as collateral to this note. As of
interest, if any, to the date of redemption, subject to the rights of the person in whose
December 31, 2018 and 2017, outstanding balance of note amounted to
name the Notes is registered on the relevant record date to receive interest due on the
US$340.55 million (P= 17,906.31 million) and US$339.73 million (P
= 16,962.64 million),
relevant interest payment date.
respectively.
Covenants
Redemption at the option of the issuer
The Notes provide for the Group to comply with certain covenants including, among
At any time, the Issuer may on any one or more occasions redeem all or a part of the
others, incurrence of additional debt; grant of security interest; payment of dividends;
Notes on any business day or after November 28, 2021 and up to but excluding the
mergers and acquisitions and disposals; and disposals, and certain other covenants.
Maturity date, the Issuer may on one or more occasions redeem all or part of the
The incurrence test for additional debt requires the Group to have a proforma FCCR
Notes, at the redemption price (expressed in percentages of principal amount on the
of not less than 2.5x. These were complied with by the Group as at December 31,
date of redemption), plus accrued and unpaid interest, if any, to (but not including) the
2018.
date of redemption, if redeemed during the 12-month period commencing on
November 28 of the years set forth below:
On September 29, 2016, VII repurchased US$54.54 million out of the US$425.00
million notes outstanding balance prior to the repurchase date.
Period Price
2021 102.8750%
On January 10, 2018, the Issuer announce a solicitation of consent to holders of the
2022 101.4375%
Notes to approve proposed amendments to certain terms and conditions of the Notes
2023 and thereafter 100.0000%
with the intention of aligning those terms and conditions of the Notes issued in
November 28, 2017. Amendment include among others the proforma FCCR to be not
Covenants
less than 2.25x from the previous requirement of not less than 2.5x. In a meeting of
The Notes provide for the Group to comply with certain covenants including, among
Noteholders on February 1, 2018, Noteholders holding 90.12% of the aggregate
others, incurrence of additional debt; grant of security interest; payment of dividends;
amount of principal amount of the Notes outstanding voted in favor and approved the
mergers, acquisitions and disposals; and certain other covenants. The incurrence test
amendments of the terms of the Notes. The consent solicitation cost amounted to
for additional debt requires the Group to have a proforma (Fixed Charge Coverage
US$1.95 million (P= 99.45 million) was adjusted to the carrying amount of the liability
Ratio) FCCR of not less than 2.25x. These were complied with by the Group as at
and amortized over the remaining life of the modified liability.
December 31, 2018.

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c. US$350.00 million Notes (Due April 2019) The exercise of make whole redemption for Notes due in April 2019 resulted to
On April 29, 2014, VII (the Issuer) issued unsecured US$225.00 million (P
= 10,021.50 payment of premium of P = 364.00 million and interest of P
= 57.02 million which are
million) notes (“Notes”) due April 29, 2019 to refinance its debt and for general recorded in interest and other financing charges of the consolidated statements of
corporate purposes. The interest rate of 7.45% per annum is payable semi-annually comprehensive income.
in arrears on April 29 and October 29 of each year commencing on October 29, 2014.
d. US$100.00 million Notes
On September 11, 2014, an additional unsecured note, with the same terms and On October 4, 2013, VII (the Issuer) issued unsecured US$100.00 million bonds with
conditions with the above notes, were issued by the Issuer amounting to US$125.00 a term of five years from the issue date. The interest rate is 6.75% per annum payable
million. The notes were issued at 102% representing a yield to maturity of 6.935%. semi-annually in arrears on April 4 and October 4 of each year commencing on
April 4, 2014.
As at December 31, 2018 and 2017, outstanding balance of the notes amounted to
nil. The Notes are unconditionally and irrevocably guaranteed by the Parent Company
and its subsidiaries. Other pertinent provisions of the Notes follow:
The Notes are unconditionally and irrevocably guaranteed by the Parent Company
and its subsidiaries. Other pertinent provisions of the Notes follow: Redemption at the option of the issuer - equity clawback
At any time prior to September 30, 2013, the Group may redeem up to 35% of the
Redemption at the option of the issuer aggregate principal amount of the US Notes originally issued at a redemption price
At any time the Group may redeem all or part of the Notes, at a redemption price equal equal to 106.75% of the principal amount, plus accrued and unpaid interest, if any, to
to 100% of the principal amount of the notes redeemed, plus the applicable premium the date of redemption with the net cash proceeds of an equity offering; provided that:
as of, and accrued and unpaid interest, if any, to the date of the redemption, subject (i) at least 65% of the aggregate principal amount of US Notes originally issued
to the rights of note holders on the relevant record date to receive interest due on the remains outstanding immediately after the occurrence of such redemption and (ii) the
relevant interest payment date. redemption occurs within 60 days of the date of the closing of such equity offering. The
Notes contains an equity clawback option.
Redemption upon a change in control
Unless the Notes are previously redeemed, repurchased and cancelled, the issuer will, Redemption at the option of the issuer - early redemption
no later than 30 days following a change of control make an offer to purchase all At any time the Group may redeem all or part of the Notes, at a redemption price equal
outstanding Notes at a purchase price equal to 101% of their principal amount together to 100% of the principal amount of the notes redeemed, plus the applicable premium
with accrued and unpaid interest, if any. Change of control includes the sale of all or as of, and accrued and unpaid interest, if any, to the date of the redemption, subject
substantially all the properties or assets of the issuer or its restricted subsidiaries. to the rights of note holders on the relevant record date to receive interest due on the
relevant interest payment date.
Covenants
The Notes provide for the Group to comply with certain covenants including, among Covenants
others, incurrence of additional debt; grant of security interest; payment of dividends; The Notes provide for the Group to comply with covenants including, among others,
mergers, acquisitions and disposals; and certain other covenants. The incurrence test incurrence of additional debt; grant of security interest; payment of dividends; mergers,
for additional debt requires the Group to have a proforma FCCR of not less than acquisitions and disposals; and certain other covenants. The incurrence test for
2.5x. These were complied with by the Group as at redemption date. additional debt requires the Group to have a proforma (FCCR) of not less than
2.5x. These were complied with by the Group as at redemption date.
On November 10, 2017, the Issuer launched a tender offer to purchase any and all of
the Notes due 2019 as part of its liability management. On November 21, 2017 the On September 29, 2016, VII repurchased US$10.70 million out of the remaining
end of tender offer period, the Group has accepted valid tender offers representing US$62.51 million notes outstanding prior to the repurchase date.
41.92% of the total outstanding Notes or an aggregate of $75.78 million in nominal
amount. The settlement was made on November 29, 2017 at 107.241% purchase On November 21, 2017, the issuer elected the Make Whole Redemption option to
price. The outstanding balance after the tender offer amounted to $105.01 million. redeem and pay the remaining outstanding balance of the Notes after the Tender Offer
period.
On November 21, 2017, the issuer elected the Make Whole Redemption option to
redeem and pay the remaining outstanding balance of the Notes after the Tender Offer On December 21, 2017, the issuer redeemed and paid $47.26 million remaining
period. balance of the Notes at 103.522% redemption price. The notes were fully paid as of
December 31, 2017.
On December 21, 2017, the issuer redeemed and paid $105.01 million remaining
balance of the Notes at 106.869% redemption price. The notes were fully paid as of
December 31, 2017.

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 - 87 - - 88 -

The exercise of make whole redemption for Notes due in April 2019 resulted to Covenants
payment of premium of P = 84.00 million and interest of P
= 34.44 million which are The Corporate Notes Facility requires the Parent Company to maintain the pari passu
recorded in interest and other financing charges of the consolidated statements of ranking with all and future unsecured and unsubordinated indebtedness except for
comprehensive income. obligations mandatorily preferred or in respect of which a statutory preference is
established by law. The Parent Company is also required to maintain at all times the
B. Corporate Note Facility following financial ratios: Current ratio at 1.00, debt to equity at 2.50 and debt service
coverage ratio of at least 1.00. These were complied with by the Group as at December
P
= 8,200.00 million Corporate Notes 31, 2018.
On July 11, 2018, the Parent Company (the Issuer) entered into a Corporate Notes
Facility Agreement for the issuance of a long term corporate notes consisting of Seven- = 10,000.00 million Corporate Notes
P
Year Corporate Notes due 2025 amounting to P = 1,700.00 million at a fixed rate of 7.4913% On December 28, 2016, the Parent Company (the Issuer) entered into a Corporate Notes
per annum and Ten-Year Corporate Notes due 2028 amounting to P = 6,000.00 million at a Facility Agreement with China Bank Capital Corporation for the issuance of a long term
fixed rate of 7.7083% per annum. corporate notes with a principal amount of up to P = 8,000.0 million. On April 21, 2017, a
consent solicitation was made for amendments to include among others, increasing the
On July 25, 2018, an additional issuance of Corporate Notes was made in the amount of corporate notes principal amount to up to P = 10,000.00 million and the appointment of
P
= 500.00 million due 2025, at a fixed interest of 7.4985% per annum. RCBC Capital Corporation as Co-Lead Arranger together with the China Bank Capital
Corporation in respect to the second draw down. Such amendments were consented by
The proceeds of the corporate notes were utilized for the 2018 capital expenditures for Note Holders representing at least fifty one percent (51%) of the outstanding corporate
commercial property projects, and to fund other general corporate expenses. The issue notes. On April 27, 2017, the Group made such amendments to the Corporate Note
cost amounted to P = 105.30 million. This was capitalized as debt issue cost and amortized Facility dated December 28, 2016. The first drawdown was at P =5,150.00 million in
over the life of the liability and was offset to the carrying value of the liability. As of 2016. On May 3, 2017, the Issuer made its second drawdown at P = 4,850.00 million.
December 31, 2018, the outstanding balance of the corporate note is P = 8,103.15 million.
The proceeds for the first and second drawdown were utilized for the 2017 capital
The corporate notes provide early redemption at the option of the Issuer as follows: expenditures, refinancing of existing indebtedness and to fund other general corporate
expenses. The interests at the first drawdown at 6.1879% per annum and 6.2255% per
a. Seven Year Notes: annum for the second drawdown are payable quarterly in arrears while the principal
amounts are payable in 2.00% annual amortizations on each principal repayment date
Early with 82.00% to be repaid on maturity date. In case of default on the notes, interest and
Redemption any amount payable due the lender, the borrower will pay a default interest. The issue
Early Redemption Date Amount cost amounted to P = 38.72 million. This was capitalized as debt issue cost and amortized
5th anniversary from issue date and interest payment over the life of the liability and was offset to the carrying value of the liability.
thereafter 101.00%
6th anniversary from issue date and interest payment As of December 31, 2018 and 2017, the outstanding balance of the corporate note is
thereafter 100.50% P
= 9,534.10 million and P
=9,727.01 million, respectively.

b. Ten Year Notes: The corporate notes provide early redemption at the option of the Issuer as follows:

Early Early
Redemption Redemption
Early Redemption Date Amount Early Redemption Date Amount
7th anniversary from issue date and interest payment 7th anniversary from issue date and interest payment
thereafter 102.00% thereafter 102.00%
8th anniversary from issue date and interest payment 8th anniversary from issue date and interest payment
thereafter 101.00% thereafter 101.00%
9th anniversary from issue date and interest payment 9th anniversary from issue date and interest payment
thereafter 100.50% thereafter 100.50%

As part of the issuance of the corporate notes, the subsidiaries of the Parent Company The corporate notes requires the Group to maintain the pari passu ranking with all and future
that acted as guarantors, irrevocably and unconditionally, are: Brittany Corporation, unsecured and unsubordinated indebtedness except for obligations mandatorily preferred or
Camella Homes, Inc., Crown Asia Properties, Inc., Communities Philippines, Inc., in respect of which a statutory preference is established by law.
Starmalls, Inc. and Vista Residences Inc.

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 - 89 - - 90 -

The Group is also required to maintain at all times the following financial ratios: Current ratio Redemption at the option of the issuer
at 1.00, debt to equity at 2.50 and debt service coverage ratio of at least 1.0. No dividends The Issuer may redeem in whole, the outstanding Retail Bonds on the following
may be declared or paid if the Parent Company is in default and it will not provide any loans relevant dates. The amount payable to the bondholders upon the exercise of the early
or advances to third parties nor issue guarantees other than the benefit of any of its redemption option by the Issuer shall be calculated, based on the principal amount of
subsidiaries and in the ordinary course of business. These were complied with by the Group Retail Bonds being redeemed, as the sum of: (i) accrued interest computed from the
as at December 31, 2018 and 2017. last interest payment date up to the relevant early redemption option date; and (ii) the
product of the principal amount of the Retail Bonds being redeemed and the early
As part of the issuance of the corporate notes, the subsidiaries of the Parent Company that redemption price in accordance with the following schedule:
acted as guarantors, irrevocably and unconditionally, are: Brittany Corporation, Camella
Homes, Inc., Crown Asia Properties, Inc., Communities Philippines, Inc., Starmalls, Inc. and a) Five Year Bonds:
Vista Residences Inc. i. Three (3) years from issue date at early redemption price of 101.00%
ii. Four (4) years from issue date at early redemption price of 100.50%
On April 20, 2012, the Parent Company secured a Peso Corporate Note Facility of up to P = b) Seven Year Bonds:
4,500.00 million from certain financial institutions to fund the Group’s on-going real estate i. Five (5) years from issue date at early redemption price of 101.00%
development projects, to refinance or replace existing borrowings and for general corporate ii. Six (6) years from issue date at early redemption price of 100.50%
purposes. The Corporate Notes shall bear annual fixed interest rate based on applicable
bench mark rate on drawdown date plus a certain spread and will mature five (5) years from Covenants
drawdown date. The Retail Bonds provide for the Group to comply with covenants including, among
others, incurrence or guarantee of additional indebtedness; prepayment or redemption
The notes were paid by the Parent Company on April 25, 2017 upon maturity. of subordinate debt and equity; making certain investments and capital expenditures;
consolidation or merger with other entities; and certain other covenants. The Retail
Covenants Bonds requires the Group to maintain a current ratio of at least 1.00:1.00, a maximum
The April 20, 2012 Corporate Note Facility provides for the Group to comply with certain debt-to-equity ratio of 2.50:1.00 and a DSCR of at least 1.00:100. These were
covenants including, among others, incurrence of additional debt; dividend restrictions; complied with by the Group as at December 31, 2018.
maintenance of financial ratios; granting of loans; and certain other covenants. The financial
ratios are current ratio, debt to equity ratio, debt service coverage ratio and fixed charge b. 2017 Fixed-rate Peso Retail Bonds
coverage ratio which are to be maintained at 1.75, 1.50, 100 and 2.50, respectively. On August 8, 2017, the Group issued unsecured fixed-rate Peso Retail Bonds with an
aggregate principal amount of P = 5,000.00 million. The proceeds of the issuance was
C. Retail Bonds used to partially finance certain commercial development projects of the Group and
for general corporate purposes. There are no securities pledged as collateral for these
a. 2018 Fixed-rate Peso Retail Bonds bonds. The issue costs amounted to P = 64.87 million. This was capitalized as debt
On December 21, 2018, the Group issued unsecured fixed-rate Peso Retail Bonds issue cost and amortized over the life of the liability and was offset to the carrying
with an aggregate principal amount of P = 10,000.00 million. The proceeds of the value of the liability.
issuance was used to fund the construction and completion of the various malls and
for general corporate purposes. There are no securities pledged as collateral for these The offer is comprised of 7-year fixed rate bonds due on August 8, 2024 and 10-year
bonds. The issue costs amounted to P = 130.20 million. This was capitalized as debt fixed rate bonds due on August 9, 2027 with interest rates of 5.75% and 6.23% per
issue cost and amortized over the life of the liability and was offset to the carrying annum, respectively. This is the initial tranche offered out of the shelf registration of
value of the liability. fixed rate bonds in the aggregate principal amount of up to P =20,000.00 million to be
offered within a period of three (3) years. Interest on the Retail Bonds is payable
The offer is comprised of 5-year fixed rate bonds due on December 21, 2023 and 7- quarterly in arrears starting on November 8, 2017 for the first interest payment date
year fixed rate bonds due on December 21, 2025 with interest rates of 8.00% and and on February 8, May 8, August 8 and November 8 each year for each subsequent
8.25% per annum, respectively. This is the second tranche offered out of the shelf payment date.
registration of fixed rate bonds in the aggregate principal amount of up to P= 20,000.00
million to be offered within a period of three (3) years. Interest on the Retail Bonds is As of December 31, 2018 and 2017, outstanding balance of the bonds amounted to
payable quarterly in arrears starting on March 21, 2019 for the first interest payment P
= 4,944.34 million and P
=4,937.67 million, respectively.
date and on March 21, June 21, September 21 and December 21 each year for each
subsequent payment date. Redemption at the option of the issuer
The Issuer may redeem in whole, the outstanding Retail Bonds on the following
As of December 31, 2018, outstanding balance of the bonds amounted to relevant dates. The amount payable to the bondholders upon the exercise of the early
P
= 9,869.80 million. redemption option by the Issuer shall be calculated, based on the principal amount of
Retail Bonds being redeemed, as the sum of: (i) accrued interest computed from the
last interest payment date up to the relevant early redemption option date; and (ii) the

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product of the principal amount of the Retail Bonds being redeemed and the early product of the principal amount of the Retail Bonds being redeemed and the early
redemption price in accordance with the following schedule: redemption price in accordance with the following schedule:

c) Seven Year Bonds: a) Five Year Bonds:

iii. Five (5) years and six (6) months from issue date at early redemption price of i. Three (3) years and six (6) months from issue date at early redemption price
101.00% of 101.00%
iv. Six (6) years from issue date at early redemption price of 100.50% ii. Four (4) years from issue date at early redemption price of 100.50%
d) Ten Year Bonds: b) Seven Year Bonds:
i. Seven (7) years from issue date at early redemption price of 102.00% i. Five (5) years and six (6) months from issue date at early redemption price of
ii. Eight (8) years from issue date at early redemption price of 101.00% 101.00%
iii. Nine (9) years from issue date at early redemption price of 100.50% ii.Six (6) years from issue date at early redemption price of 100.50%

Covenants Covenants
The Retail Bonds provide for the Group to comply with covenants including, among The Retail Bonds provide for the Group to comply with covenants including, among
others, incurrence or guarantee of additional indebtedness; prepayment or redemption others, incurrence or guarantee of additional indebtedness; prepayment or redemption
of subordinate debt and equity; making certain investments and capital expenditures; of subordinate debt and equity; making certain investments and capital expenditures;
consolidation or merger with other entities; and certain other covenants. The Retail consolidation or merger with other entities; and certain other covenants. The Retail
Bonds requires the Group to maintain a current ratio of at least 1.00:1.00, a maximum Bonds requires the Group to maintain a current ratio of at least 1.00:1.00, a maximum
debt-to-equity ratio of 2.50:1.00 and a DSCR of at least 1.00:100. These were debt-to-equity ratio of 2.50:1.00 and a debt-service coverage ratio (DSCR) of at least
complied with by the Group as at December 31, 2018. 1.00:100. These were complied with by the Group as at December 31, 2018 and 2017.

c. 2014 Fixed-rate Peso Retail Bonds The rollforward analysis of debt issue costs on notes payable follow:
On May 9, 2014, the Parent Company (the Issuer) offered and issued unsecured fixed-
rate Peso Retail Bonds with an aggregate principal amount of P =3,000.00 million and 2018 2017
an overallotment option of up to P
= 2,000.00 million. The proceeds of the issuance were Balance at the beginning of the year P
= 1,271,375,773 P = 983,159,850
used to partially finance certain commercial development projects of CPI and its Additions 335,479,320 641,012,070
subsidiaries. There are no securities pledged as collateral for these bonds. The Amortizations (Note 24) (273,719,771) (352,877,980)
Bonds are unconditionally and irrevocably guaranteed by Brittany Corporation, Crown Translation adjustments 61,498,215 81,833
Asia Properties, Inc., Camella Homes, Inc., Communities Philippines, Inc. and Vista Balance at end of the year P
= 1,394,633,537 P
= 1,271,375,773
Residences Inc.

The offer is comprised of five-year fixed rate bonds due on November 9, 2019 and 22. Other Noncurrent Liabilities
seven-year fixed rate bonds due on May 9, 2021 with interest rates of 5.65% and
5.94% per annum, respectively. Interest on the Retail Bonds shall be payable This account consists of:
quarterly in arrears starting on August 9, 2014 for the first interest payment date and
on February 9, May 9, August 9 and November 9 each year for each subsequent 2018 2017
interest payment date. Liabilities for purchased land - net of current
portion (Note 18) P
= 340,743,267 P
= 818,805,840
The Retail Bonds shall be repaid at maturity at par plus any outstanding interest,
Retentions payable - net of current portion
unless the Group exercises its early redemption option. The maturity date for the Five-
(Note 18) 853,308,728 718,286,908
Year Bonds and Seven-Year Bonds shall be on November 9, 2019 and on
Deferred output tax - net of current portion
May 9, 2021, respectively.
(Note 18) 256,495,620 136,989,567
P
= 1,450,547,615 P
= 1,674,082,315
As of Decemebr 31, 2018 and 2017, outstanding balance of bonds amounted to
P
= 4,976.38 million and P
=4,954.65 million, respectively.

Redemption at the option of the issuer

The Issuer may redeem in whole, the outstanding Retail Bonds on the following
relevant dates. The amount payable to the bondholders upon the exercise of the early
redemption option by the Issuer shall be calculated, based on the principal amount of
Retail Bonds being redeemed, as the sum of: (i) accrued interest computed from the
last interest payment date up to the relevant early redemption option date; and (ii) the

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23. Equity Below is the summary of the Parent Company’s track record of registration of securities with
the SEC as of December 31, 2018:
Capital Stock
The details of the Parent Company’s capital stock follow: Number of Shares Number of holders of
Registered securities as of year end
2018 2017 2016 December 31, 2016 13,114,136,376 971
Common Add/(Deduct) Movement − (11)
Authorized shares 17,900,000,000 17,900,000,000 17,900,000,000 December 31, 2017 13,114,136,376 960
Par value per share P
= 1.00 P
= 1.00 P
= 1.00 Add/(Deduct) Movement (4)
Issued shares 13,114,136,376 13,114,136,376 13,114,136,376 December 31, 2018 13,114,136,376 956
Outstanding shares 12,035,916,361 12,074,717,861 12,087,242,961
Treasury shares (P
= 7,184,331,182) (P= 6,980,294,580) (P= 6,917,014,956)
Value of shares issued P
= 13,114,136,376 P = 13,114,136,376 P = 13,114,136,376 Treasury Shares
Treasury shares totaling 326,011,800 in 2018 and 287,210,300 in 2017 of the Parent
Preferred Company amounting to P = 1,806.04 million and P
=1,602.00 million, respectively, represents the
Authorized shares 10,000,000,000 10,000,000,000 10,000,000,000 shares of stock held by the Parent Company, while treasury shares (752,208,215) amounting
Par value per share P
= 0.01 P
= 0.01 P
= 0.01 to P
= 5,378.29 million represents Parent Company stocks held by Manuela. These treasury
Issued and outstanding shares 3,300,000,000 3,300,000,000 3,300,000,000 shares are recorded at cost.
Value of shares issued P
= 33,000,000 P
= 33,000,000 P
= 33,000,000
On March 17, 2015, the BOD of the Parent Company approved the buyback of its common
Common shares shares up to the extent of the total purchase price of P
= 1,500.00 million subject to the prevailing
In February 2016, the Parent Company issued 459.24 million new common shares out of the market price at the time of the buyback over a 24-month period but subject to periodic review
unissued portion of its authorized capital stock at issue price of P
= 7.15 per share or P
= 3,283.60 by the management.
million, out of which additional paid-in capital amounted to P= 2,824.36 million. Costs related to
issuance of shares amounted to P = 123.72 million and is presented as reduction to additional On November 5, 2018, the BOD of the Parent Company approved the extension of the Share
paid-in capital in the consolidated statements of changes in equity. Buyback Program up to November 5, 2020 subject to the prevailing market price at the time
of the buyback over a 24-month period but subject to periodic review by the management.
The movement in the Parent Company’s common stock and amounts involved follows:

2018 2017 2016

As at December 31, 2018 and 2017, the Parent Company has bought back from the market
Shares Amount Shares Amount Shares Amount a total of 38,801,500 shares or P
= 204.04 million and 12,525,100 shares or P
= 63.28 million in
At January 1 13,114,136,376 P= 13,114,136,376 13,114,136,376 P
= 13,114,136,376 12,654,891,753 P
= 12,654,891,753 value, respectively.
Issuances − − − − 459,244,623 459,244,623
At December 31 13,114,136,376 P = 13,114,136,376 13,114,136,376 P
= 13,114,136,376 13,114,136,376 P
= 13,114,136,376
The movement in the Parent Company’s treasury shares follows:
Preferred shares 2018 2017 2016
On March 21, 2013, the Parent Company issued in favor of Fine Properties, 3,300.00 million Shares Amount Shares Amount Shares Amount
new preferred shares out of the unissued portion of its authorized capital stock at par or an At January 1
Additions
1,039,418,515
38,801,500
P
= 6,980,294,580
204,036,602
1,026,893,415
12,525,100
P
= 6,917,014,956
63,279,624
900,075,315
126,818,100
P
= 6,297,793,026
619,221,930
aggregate issue price of P
= 33.00 million. The subscription price was fully paid on the same At December 31 1,078,220,015 P
= 7,184,331,182 1,039,418,515 P
= 6,980,294,580 1,026,893,415 P
= 6,917,014,956
date. The preferred shares are voting, non-cumulative, non-participating, non-convertible and
non-redeemable. The BOD may determine the dividend rate which shall in no case be more Retained Earnings
than 10% per annum. The retained earnings available for dividend declaration, after reconciling items, as at and for
the year ended December 31, 2018 amounted to P = 847.18 million, which is below the paid-up
Registration Track Record capital of P
= 62,311.72 million. The paid-up capital includes capital stock and additional paid-
On July 26, 2007, the Parent Company launched its follow-on offer where a total of in capital of the Parent Company.
8,538,740,614 common shares were offered at an offering price of P
=6.85 per share. The
registration statement was approved on June 25, 2007. Retained earnings include the accumulated equity in undistributed earnings of consolidated
subsidiaries of P
=50,083.56 million, P
= 40,448.07 million and P
= 31,754.61 million in 2018, 2017
and 2016, respectively. These are not available for dividends until declared by the
subsidiaries.

Also, the retained earnings are restricted to payments of dividends to the extent of cost of
treasury shares in the amount of P= 1,806.04 million, P
= 1,602.01 million and P
=1,538.73 as at
and for the years ended December 31, 2018, 2017 and 2016, respectively.

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On September 28, 2018, the BOD approved the declaration of a regular cash dividend The Group manages its capital structure and makes adjustments to it, in the light of changes
amounting P
= 2,719.23 million or P
=0.2252 per share, in favor of all stockholders of record as at in economic conditions. It monitors capital using leverage ratios on both a gross debt and net
October 15, 2018, payable on October 29, 2018. debt basis. As of December 31, 2018, 2017 and 2016, the Group had the following ratios:

On September 29, 2017, the BOD approved the declaration of a regular cash dividend 2018 2017 2016
amounting to P
=1,620.43 million or P
=0.1342 per share, in favor of all stockholders of record as Current ratio 377% 519% 468%
of October 16, 2018, with payment date on October 30, 2017. Debt-to-equity ratio 129% 107% 99%
Net debt-to-equity ratio 77% 60% 49%
On September 28, 2016, the BOD approved the declaration of a regular cash dividend Asset-to-equity ratio 259% 238% 230%
amounting to P
=1,437.14 million or P
=0.1185 per share, in favor of all stockholders of record as
of September 28, 2017, with payment date on October 28, 2016. As of December 31, 2018, 2017 and 2016, the Group had complied with all externally imposed
capital requirements (Notes 20 and 21). No changes were made in the objectives, policies or
Non-Controlling Interest processes for managing capital during the years ended December 31, 2018, 2017 and 2016.
In 2016, the Vista Group acquired additional 750,265,955 shares of Starmalls, Inc. for a total
consideration of P = 3,383.70 million. The transaction was accounted for as an equity The Group considers as capital the equity attributable to equity holders of the Parent
transaction since there was no change in control. The movements within equity are accounted Company.
as follows:
The following table shows the component of the Group’s equity which it manages as capital
Fair value of consideration paid P
= 3,383,699,457 as of December 31, 2018, 2017 and 2016:
Book value of shares 1,500,705,403
2018 2017 2016
Difference charged to equity 1,882,994,054 Total paid-up capital P
= 43,802,565,725 P
= 43,802,565,725 P
= 43,802,565,725
Attributable to OCI 119,711,596 Retained earnings 52,736,780,731 44,136,812,797 36,953,581,723
Equity reserves recognized in additional paid in capital P
= 1,763,282,458 Treasury shares (7,184,331,182) (6,980,294,580) (6,917,014,956)
Other comprehensive income 534,538,519 1,280,960,358 1,111,006,329
Additional Paid-in Capital (APIC) P
= 89,889,553,793 P
= 82,240,044,300 P
= 74,950,138,821
Below is the summary of movement of APIC in 2016. There are no movements in APIC in
2017 and 2018. Financial Risk Assessment
The Group’s financial condition and operating results would not be materially affected by the
Balance as at January 1, 2016 P
= 29,470,640,861 current changes in liquidity, credit, interest, currency and market conditions.
Issuance of common shares 2,824,360,000
Cost related to issuance of common shares 123,720,000 Credit risks continue to be managed through defined credit policies and continuing monitoring
Treasury shares acquisition of Starmalls, Inc. (1,763,291,512) of exposure to credit risks. The Group’s base of counterparties remains diverse. As such, it
Balance as at December 31, 2016 P
= 30,655,429,349 is not exposed to large concentration of credit risk.

Exposure to changes in interest rates is reduced by regular availment of short-term loans as

Capital Management
it relates to its sold installment contracts receivables in order to cushion the impact of potential
The primary objective of the Group’s capital management policy is to ensure that debt and
increase in loan interest rates.
equity capital are mobilized efficiently to support business objectives and maximize
shareholder value. The Group establishes the appropriate capital structure for each business Exposure to foreign currency holdings are as follows:
line that properly reflects its premier credit rating and allows it the financial flexibility, while
providing it sufficient cushion to absorb cyclical industry risks. 2018 2017
Cash and cash equivalents US$142,190,319 US$93,191,602
The Group considers debt as a stable source of funding. The Group lengthened the maturity AFS financial assets − 130,009,248
profile of its debt portfolio and makes it a point to spread out its debt maturities by not having Investments in amortized cost 522,690,958 −
a significant percentage of its total debt maturing in a single year. HTM investments − 437,157,810
Notes payable 701,012,207 (695,856,089)

Liquidity risk is addressed with long-term funding already locked in, while funds are placed on
a short-term placement.

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24. Interest and Other Income from Investments and Interest and Other Financing Charges Operating expenses
This account consists of:
Interest and other income from investments consists of:
2018 2017 2016
2018 2017 2016 Commissions P
= 1,759,339,528 P
= 1,482,466,386 P
= 1,376,399,761
Installment contracts receivable Depreciation and amortization
(Note 11) P
= 574,065,753 P
= 476,094,934 P
= 609,080,060 (Notes 14, 15 and 17) 1,480,129,055 1,305,156,158 1,029,980,066
Accretion of unamortized discount Salaries, wages and employees
(Note 11) 105,992,683 67,428,832 33,562,135 benefits (Note 26) 1,197,692,866 1,163,127,363 1,281,718,370
Occupancy costs
680,058,436 543,523,766 642,642,195
(Note 32) 1,173,064,414 898,250,603 715,360,838
Cash and cash equivalents, short- Advertising and promotions 1,064,275,880 900,933,561 1,129,111,882
term investments and cash Repairs and maintenance
restricted for use (Note 14) 1,144,118,499 899,791,273 836,619,978
(Notes 9, 10 and 13) 265,422,693 79,593,675 143,350,393 Taxes and licenses 658,148,818 489,237,432 461,211,182
Gain on disposal of investment in Professional fees 486,865,898 460,787,673 300,101,628
FVTPL (Note 10) 132,499,578 − − Transportation and travel 143,105,154 105,271,689 73,495,820
Gain on disposal of investment in Representation and entertainment 64,429,190 88,696,519 86,656,689
AFS (Note 10) − 322,157,176 ‒ Office expenses 59,897,743 43,205,134 39,597,211
Investments at amortized cost Provision for impairment losses
(Note 10) 827,861,196 on receivables (Note 11) − 3,683,344 1,974,771
HTM investments (Note 10) − 800,881,961 721,024,942 Miscellaneous 327,460,797 240,281,042 262,281,221
1,225,783,467 1,202,632,812 864,375,335 P
= 9,558,527,842 P
= 8,080,888,177 P
= 7,594,509,417
P
= 1,905,841,903 P
= 1,746,156,578 P
= 1,507,017,530
Operating expenses represent the cost of administering the business of the Group. These
Interest and other financing charges consist of: are recognized when the related services and costs have been incurred.

2018 2017 2016 Occupancy cost

Interest expense on: Occupancy cost consists of rent, light and power and other utility expenses.
Bank loans and loans payable
(Note 20) P
= 3,368,505,643 P
= 2,124,642,569 P
= 821,461,360 The Group entered into various lease agreements for administrative purposes which are
Notes payable (Note 21) 3,357,845,704 3,558,160,865 3,866,156,523 renewed on an annual basis with advanced deposits. Also, the Group is a lessee under
6,726,351,347 5,682,803,434 4,687,617,883 various operating leases covering parcels of land for completed and ongoing construction of
Make whole premium (Note 21) − 448,002,457 − commercial establishments. These leases have terms ranging from 20 to 25 years with rental
Other bank charges 315,254,366 135,390,226 181,103,575 escalation clauses and renewal options.
7,041,605,713 6,266,196,117 4,868,721,458
Amounts capitalized Rent expenses included under “Occupancy costs” amounted to P =468.82 million,
(Notes 12, 14 and 15) (2,871,842,798) (2,881,951,542) (2,606,768,817) P
= 214.12 million and P
= 136.74 million in 2018, 2017 and 2016, respectively (Note 32).
P
= 4,169,762,915 P
= 3,384,244,575 P
= 2,261,952,641
Miscellaneous expenses
Miscellaneous income is comprised of forfeiture fees, mall collaterals and parking fees Miscellaneous expenses include dues and subscriptions, donations and other expenditures.
amounting to P= 1,260.52 million, P
= 1,076.59 million and P
= 952.51 million for the year ended
December 31, 2018, 2017 and 2016, respectively.
26. Retirement Plan

25. Costs and Expenses The Group has noncontributory defined benefit pension plan covering substantially all of its
regular employees. The benefits are based on current salaries and years of service and
Cost of real estate sales related compensation on the last year of employment. The retirement is the only long-term
Cost includes acquisition cost of subdivision land, construction and development cost and employee benefit.
capitalized borrowing costs. Cost of real estate sales recognized for the years ended
December 31, 2018, 2017 and 2016 amounted to P = 15,177.16 million, P
= 13,303.58 million and The principal actuarial assumptions used to determine the pension benefits with respect to
P
= 12,321.00 million, respectively (Note 12). the discount rate, salary increases and return on plan assets were based on historical and
projected normal rates.

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The components of pension expense follow: The movements in the combined net pension (assets) liabilities follow:

2018 2017 2016 2018 2017 2016

Current service cost P
= 48,241,302 P
= 67,902,138 P
= 83,952,065 Balance at beginning of year (P= 87,660,881) P
= 98,133,829 P
= 114,472,861
Interest cost (6,168,621) 8,591,964 7,324,790 Pension expense 42,072,681 76,444,102 91,276,855
Total pension expense P
= 42,072,681 P
= 76,494,102 P
= 91,276,855 Transfer in − (13,215,359)
Total amount recognized in
Funded status and amounts recognized in the consolidated statements of financial position OCI (114,890,567) (210,614,020) (54,763,945)
for the pension plan follow: Contributions (52,782,529) (51,624,792) (39,636,583)
Balance at end of year (P
= 213,261,296) (P
= 87,660,881) P
= 98,133,829
2018 2017 2016
Plan assets P
= 537,582,047 P
= 506,700,526 P
= 434,496,381 The assumptions used to determine the pension benefits for the Group are as follows:
Defined benefit obligation (324,320,751) (419,039,645) (532,630,210)
Pension Assets (Liability) 2018 2017 2016
recognized in the Discount rates 7.53% 5.80% 5.51%
consolidated statements of Salary increase rate 7.75% 7.75% 7.75%
financial position P
= 213,261,296 P
= 87,660,881 (P
= 98,133,829)
The turn-over rate used to compute the retirement liability is ranging from 10% at age 18 to
Changes in the combined present value of the combined defined benefit obligation are as 0% at age 60 in 2018 and 2017.
follows:

2018 2017 2016 The distribution of the plan assets at year-end follows:
Balance at beginning of year P
= 419,039,645 P= 532,630,210 P
= 491,637,680
2018 2017 2016
Transfer in − − (13,215,360)
Current service cost 48,241,302 67,902,138 83,952,065 Assets
Interest cost 23,371,962 33,287,822 22,847,291 Cash and cash equivalents P
= 96,090,930 P
= 47,525,181 P
= 213,444,809
Benefits paid (39,870,064) − − Investments in private
Actuarial gain (126,462,094) (214,780,525) (52,591,466) companies 429,071,376 434,951,416 198,399,874
Balance at end of year P
= 324,320,751 P= 419,039,645 P
= 532,630,210 Investments in government
securities 8,905,188 20,731,584 21,091,661
Receivables 4,244,718 4,127,012 2,112,871
Changes in the fair value of the combined plan assets are as follows:
538,312,212 507,335,193 435,049,215
Liability
2018 2017 2016
Trust fee payables 730,165 634,667 552,834
Balance at beginning of year P
= 506,700,526 P
= 434,496,381 P
= 377,164,819
Net plan assets P
= 537,582,047 P
= 506,700,526 P
= 434,496,381
Interest income included in net
interest cost 29,540,583 24,745,858 15,522,501
Actual gain (loss) excluding The carrying amounts disclosed above reasonably approximate fair value at year-end. The
amount included in net overall expected rate of return on assets is determined based on the market prices prevailing
interest cost (11,571,527) (4,166,505) 2,172,478 on that date, applicable to the period over which the obligation is to be settled.
Benefits paid (39,870,064) − −
Contributions 52,782,529 51,624,792 39,636,583 The net unrealized gains on investments in government securities amounted to P
=1.11 million,
Balance at end of year P
= 537,582,047 P= 506,700,526 P= 434,496,381 P
= 0.35 million and P
= 1.82 million in 2018, 2017 and 2016, respectively.

The Group expects to contribute P

= 53.96 million to its retirement fund in 2019.

The composition of the fair value of the Fund includes:

∂ Cash - include savings and time deposit with various banks and special deposit account.

∂ Investments in private companies - include investments in long-term debt notes and

corporate bonds.

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∂ Investments in government securities - include investment in Philippine RTBs. It should be noted that the changes assumed to be reasonably possible at the valuation date
are open to subjectivity, and do not consider more complex scenarios in which changes other
∂ Receivables - includes interest and dividends receivable generated from investments than those assumed may be deemed to be more reasonable.
included in the plan.
Impact on Defined Benefit
∂ Trust fee payable - pertain mainly to charges of trust or in the management of the plan. Obligation
Rates 2018 2017
The Group retirement benefit fund is in the form of a trust being maintained by a trustee bank. +1% 154,772,004 307,615,096
Discount rate
The fund includes investment in the form of fixed-rate peso retail bonds issued by the Parent -1% (209,209,012) (431,392,602)
Company due 2019, 2021 and 2027 with interest rates of 5.65%, 5.94% and 6.23%, +1% 207,248,390 432,358,754
Salary increase
respectively. As of December 31, 2018 and 2017, the fair value of investment amounts to -1% (156,169,488) (306,432,651)
P
= 509.38 million and P= 331.05 million, respectively. Interest income earned from the
investments in bonds amounted to P = 1.32 million and P = 3.84 million in 2018 and 2017, Each year, an Asset-Liability Matching Study (ALM) is performed with the result being
respectively. analyzed in terms of risk-and-return profiles. Union Bank’s (UB) current strategic investment
strategy consists of 9.36% of cash, 4.09% of investments in government securities, 85.73%
The allocation of the fair value of plan assets follows: of investment in private companies and 0.81% receivables. For the Group other than UB, the
principal technique of the Group’s ALM is to ensure the expected return on assets to be
2018 2017 sufficient to support the desired level of funding arising from the defined benefit plans.
Deposits 18.56% 9.29%
Corporate bonds 79.65 84.98
Government bonds 1.65 4.93 27. Income Tax

The funds are administered by a trustee bank under the supervision of the Board of Directors Provision for income tax consists of:
of the plan. The Board of Directors is responsible for investment of the assets. It defines the
investment strategy as often as necessary, at least annually, especially in the case of 2018 2017 2016
significant market developments or changes to the structure of the plan participants. When Current:
defining the investment strategy, it takes account of the plans’ objectives, benefit obligations RCIT/MCIT P
= 1,458,477,330 P
= 1,443,448,108 P
= 1,218,757,113
and risk capacity. Final 12,696,484 7,583,382 7,914,896
Deferred 576,100,346 759,813,755 355,563,409
Shown below is the maturity analysis of the undiscounted benefit payments: P
= 2,047,274,160 P
= 2,210,845,245 P
= 1,582,235,418

Plan Year 2018 2017 Creditable withholding tax offset against income tax payable are disclosed in Note 13.
Less than 1 year P
= 1,059,734 P
= 970,250
More than 1 year to 5 years 32,908,956 19,150,032 The components of the Group’s deferred taxes are as follows:
More than 5 years to 10 years 42,581,794 83,271,320
More than 10 years to 15 years 170,954,616 345,093,667 Net deferred tax assets:
More than 15 years to 20 years 253,885,704 1,042,839,430
20 years and beyond 3,004,020,965 4,919,929,008 2018 2017 2016
Deferred tax assets on:
P
= 3,505,411,769 P= 6,411,253,707
Excess of tax basis over
book basis of deferred
The average duration of the expected benefit payments at the end of the reporting period is gross profit on real estate
29 years. sales P
= 891,537,645 P
= 772,753,971 P
= 397,686,311
Accrual of retirement costs 12,143,979 29,534,710 21,649,338
Sensitivity analysis on the actuarial assumptions NOLCO − − 2,911,709
Each sensitivity analysis on the significant actuarial assumptions was prepared by Unrealized foreign exchange
remeasuring the Defined Benefit Obligation (DBO) at the reporting date after adjusting one of losses − 21,589,604 20,826,711
the current assumptions according to the applicable sensitivity increment or decrement (based Deferred tax component of
OCI 19,036,200 17,832,879 10,427,970
on changes in the relevant assumption that were reasonably possible at the valuation date)
Unamortized discount
while all other assumptions remained unchanged. The sensitivities were expressed as the on receivables 9,695,728 9,152,109 4,075,483
corresponding change in the DBO.
(Forward)

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2018 2017 2016 Out of the P

= 703.96 million movement in net deferred tax liabilities, P
=127.86 million was booked
Allowance for probable losses P
=− P
= 6,614,982 P
= 6,614,982 as movement in OCI.
932,413,552 857,478,255 464,192,504
Deferred tax liabilities on: As of December 31, 2018, 2017 and 2016, the Group has deductible temporary differences,
Accrual of retirement costs 4,669,105 26,587,741 − NOLCO and MCIT that are available for offset against future taxable income for which no
Deferred tax component of OCI 35,567,808 26,386,386 15,825,541
deferred tax assets have been recognized as follows:
Excess of book basis over tax
basis of deferred gross profit
on real estate sales − 2,358,131 2,358,131 2018 2017 2016
Capitalized interest and other NOLCO P= 6,167,447,174 P
= 5,421,683,434 P
= 4,503,058,091
expenses 45,495,976 − 8,829,861 Accrual of retirement cost − 19,605,535 30,476,159
85,732,889 55,332,258 27,013,533 MCIT 13,529,550 14,067,939 6,545,367
P
= 846,680,663 P
= 802,145,997 P
= 437,178,971 Post-employment benefit
obligation − − 1,497,145
Net deferred tax liabilities: Allowance on probable losses − − 26,742,003
Unrealized foreign exchange
2018 2017 2016 loss − − 11,925,344
Deferred tax assets on: P= 6,180,976,724 P
= 5,455,356,908 P
= 4,580,244,109
Accrual of retirement costs P
= 51,549,200 P
= 109,169,751 P
= 70,267,721
Allowance for probable losses 19,375,455 103,522,011 105,145,815 The related unrecognized deferred tax assets on these deductible temporary differences
Straight line lease adjustment 136,504,044 89,443,348 83,357,101
amounted to
Allowance for impairment
losses on land and P
= 1,863.76 million, P
= 1,646.45 million and P
=1,378.65 million as of December 31, 2018, 2017
improvements − 56,259,059 56,259,059 and 2016, respectively. These are mostly coming from holding companies, VLL and STR.
NOLCO 66,578,426 50,582,310 50,582,310
Carryforward benefit of MCIT 1,907,452 14,914,385 14,914,385 Deferred tax assets are recognized only to the extent that taxable income will be available
Unrealized foreign exchange against which the deferred tax assets can be used. The subsidiaries will recognize a
losses − 11,518,188 − previously unrecognized deferred tax asset to the extent that it has become probable that
Unamortized discount future taxable income will allow the deferred tax asset to be recovered.
on receivables 5,353,242 4,809,550 7,487,835
Excess of book basis over tax As of December 31, 2018, the details of the unused tax credits from the excess of the MCIT
basis of deferred gross profit
over RCIT and NOLCO, which are available for offset against future income tax payable and
on real estate sales − − 559,451
281,267,819 440,218,602 388,573,677
taxable income, respectively, over a period of three (3) years from the year of inception, follow:
Deferred tax liabilities on:
Excess of book basis over tax
basis of deferred gross profit NOLCO
on real estate sales 1,203,927,153 1,185,535,156 1,320,017,722
Capitalized interest and other Inception Year Amount Used/Expired Balance Expiry Year
expenses 1,339,552,546 1,157,735,547 410,868,230 2015 P
= 1,562,731,542 (P
= 1,562,731,542) P
=− 2018
Straight line lease adjustment 1,367,601,517 1,145,999,197 615,532,454 2016 1,589,720,373 − 1,589,720,373 2019
2017 2,457,099,740 − 2,457,099,740 2020
2018 2,342,555,150 − 2,342,555,150 2021
(Forward) P
= 7,952,106,805 (P
= 1,562,731,542) P
= 6,389,375,263
Deferred tax component of
OCI 136,750,578 61,407,113 38,618,296
Retirement expense 51,565,520 29,935,113 9,630,024 MCIT
Fair Value Adjustments from
Inception Year Amount Used/Expired Balance Expiry Year
business combination 23,619,214 23,619,214 23,619,214
2015 P
= 20,696,410 (P
= 20,696,410) P
=− 2018
Unamortized bond transaction 2016 6,570,554 − 6,570,554 2019
cost 62,843,488 22,604,672 13,809,483 2017 1,715,360 − 1,715,360 2020
Discount on rawlands payable 14,170,079 21,373,197 21,373,197 2018 7,151,088 − 7,151,088 2021
Unrealized foreign exchange P
= (P
=) P
= 15,437,002
gain 1,562,045 8,377,135 747,265
4,201,592,140 3,656,586,344 2,454,215,885
(P
= 3,920,324,321) (P
= 3,216,367,742) (P
= 2,065,642,208)

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The reconciliation of the provision for income tax computed at the statutory income tax rate to December 31, 2018
the provision for income tax shown in profit or loss follows:
Amount/ Outstanding
Relationship Nature of Transaction Volume Balance Terms Conditions
2018 2017 2016 Receivable from tenants (Note 11)
Provision for income tax computed at the P
= P
=
With guarantee from
Fine Properties Inc.,
statutory income tax rate 30.00% 30.00% 30.00% Entities under Common Control a) Rental of mall spaces 2,729,250,430 1,213,048,135 Non-interest bearing No impairment
Additions to (reductions in) income tax Advances in project development
cost (Note 16)
resulting from: b) Purchase of housing P
= Unsecured,
Entities under Common Control credits P
= 424,593,351 2,657,711,675 Non-interest bearing No impairment
Nondeductible interest and other Receivable from related parties
expenses 3.32 3.28 5.65 P
= Unsecured,
Ultimate Parent c) Advances P
= 677,823,084 4,258,255,927 Non-interest bearing No impairment
Change in unrecognized deferred Unsecured,
tax assets 0.52 3.15 17.65 Entities under Common Control c) Advances (16,668,354) 448,652,339 Non-interest bearing No impairment
P
=
Tax-exempt income (8.5) (9.13) (29.42) P
= 661,154,730 4,706,908,266
Expired MCIT and NOLCO (1.14) (4.25) (3.95) Dividends Declared
Interest income already subjected Stockholders c) Dividends
P
=
2,719,226,462 P
= 33,368,139
to final tax (0.19) (0.14) (0.04)
Others (7.74) (3.30) (3.56)
Provision for income tax 16.27% 19.61% 16.33% December 31, 2017
Amount/ Outstanding
Board of Investments (BOI) Incentives Relationship
Receivable from tenants (Note 11)
Nature of Transaction Volume Balance Terms Conditions

The BOI issued in favor of certain subsidiaries in the Group a Certificate of Registration as Unsecured,
Entities under Common Control a) Rental of mall spaces P
= 208,896,936 P
= 1,471,135,449 Non-interest bearing No impairment
Developer of Mass Housing Projects for its 14 projects in 2018, 43 projects in 2017 and 11 Advances in project development cost
projects in 2016, in accordance with the Omnibus Investment Code of 1987. Pursuant thereto, (Note 16)
b) Purchase of housing Unsecured,
the projects have been granted an Income Tax Holiday for a period of either three years for Entities under Common Control credits P
= 775,367,103 P
= 2,233,118,324 Non-interest bearing No impairment
Receivable from related parties
new projects, or four years for expansion projects, commencing from the date of issuance of Unsecured,
the Certificate of Registration. Ultimate Parent c) Advances P
= 700,392,700 P
= 3,580,432,843 Non-interest bearing No impairment
Unsecured,
Entities under Common Control c) Advances 584,383,046 1,407,497,646 Non-interest bearing No impairment
P
= 1,284,775,746 P
= 4,987,930,489
The Group availed of tax incentive in the form of ITH on its income under registered activities Dividends Declared
amounting to P=656.92 million, P
=625.68 million and P = 453.27 million in 2018, 2017 and 2016, Stockholders c) Dividends P
= 1,620,427,137 28,959,615

respectively.
a) The Group has operating lease agreements with All Value Group, anchor tenant, which is
comprised of AllHome Corp., AllDay Marts, Inc., Family Shoppers Unlimited, Inc., and CM
28. Related Party Transactions Star Management, Inc. for the leases of commercial spaces. All Value Group is engaged
in retail businesses covering supermarkets, retail of apparel, construction materials and
Parties are considered to be related if one party has the ability, directly or indirectly, to control home/building appliances and furnishings. The lease agreements are renewable annually
the other party in making financial and operating decisions or the parties are subject to and contains escalation clauses. Rental income from All Value Group amounted to
common control or common significant influence. Entities under common control are those P
= 2,662.41 million and P
=1,250.14 million as of December 31, 2018 and 2017, respectively.
entities outside the Group but are related parties of Fine Properties, Inc. Related parties may The receivables from All Value Group are non-interest bearing, unsecured and are not
be individuals or corporate entities. impaired.

The Group in their regular conduct of business has entered into transactions with related In September 2018, Fine Properties, Inc. assumed certain liabilities of All Value Group
parties principally consisting of trade transactions from mall leasing, advances, from the Group in relation to its lease agreement amounting P = 2,010.00 million. The
reimbursement of expenses and purchase and sale of real estate properties. Except as liabilities assumed were under accounts receivable from tenants.
otherwise indicated, the outstanding accounts with related parties shall be settled in cash.
The transactions are made at terms and prices agreed upon by the parties. On October 30, 2017, Manuela Corporation (MC) and Masterpiece Asia Properties, Inc.
(MAPI) entered into a memorandum of agreement with AllHome Corp. wherein MC and
The consolidated statements of financial position include the following amounts resulting from MAPI will offset its receivables from AllHome Corp. relating to mall rental and other
the foregoing transactions which represent amounts receivable (payable) to related parties as charges, against billings of AllHome Corp to MC and MAPI for the supply of construction
of December 31, 2018 and 2017: materials and home/building appliances and furnishings. Amount offset with receivables
amounted to P=5.00 million in 2017.

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b) On December 23, 2017, the Group entered into a Memorandum of Agreement with Bria 29. Earnings Per Share and Non-Controlling Interest
Homes, Inc., a developer of socialized housing projects located in various areas in the
Philippines, to assign portions of the socialized housing projects to various entities in the The following table presents information necessary to compute the EPS:
Group in compliance with the requirements of Republic Act No. 7279 (Urban Development
and Housing Act of 1992). As such, the Group makes cash advances to Bria Homes, Inc. 2018 2017 2016
for the construction of socialized housing units which are recorded under project Net income attributable to equity
development costs (Note 16). holders of Parent P
= 10,238,356,840 P= 8,803,658,211 P= 7,906,941,679
Weighted average common
c) These are advances for working capital and investment requirements of the related parties shares* 12,823,692,618 12,828,153,168 12,863,273,832
and are due and demandable. Basic/Diluted Earnings per share P
= 0.798 P
= 0.686 P
= 0.615
*Weighted average common shares consider the effect of treasury shares
On December 28,2018, payable to contractors amounting to P =1,340.13 million was
assumed by Fine Properties, Inc. This resulted to recognition of payable to Fine The basic and dilutive earnings per share are the same due to the absence of potentially
Properties, Inc. of the same amount. dilutive common shares for the years ended December 31, 2018, 2017 and 2016.

Details of dividends declared to stockholders are discussed in Note 23. The summarized financial information of Starmalls, Inc. and Manuela Corporation are
provided below. The information is based on amounts before inter-company eliminations
The US$300.00 million Notes payable on June 18, 2015, the US$125.00 million Notes
payable on February 2, 2016, and the US$350.00 million Notes payable on November 28, Starmalls, Inc.
2017, all issued by VLL International, Inc. are unconditionally and irrevocably guaranteed by
the Parent Company and its subsidiaries. No fees are charged for these guarantee 2018 2017 2016
agreements. Assets P
= 11,763,219,655 P
= 20,681,388,427 P= 14,644,553,738
Liabilities 185,310,558 9,338,750,136 2,985,097,679
Equity 11,577,909,097 11,342,638,291 11,659,456,059
The Parent Company issued P =7,700.00 million Corporate Notes on July 13, 2018 and P = Net income 653,136,592 (10,010,996) (54,447,401)
500.00 million Corporate Notes on July 27, 2018 and P= 5,150.00 million Corporate Notes on
December 28, 2017 and the P = 4,850.00 million Corporate Notes on May 3, 2018 are Manuela Corporation
unconditionally and irrevocably guaranteed by Brittany Corporation, Camella Homes, Inc.,
Crown Asia Properties, Inc. Communities Philippines, Inc. Starmalls, Inc. and Vista 2018 2017 2016
Residences, Inc. No fees are charged for these guarantee agreements. Assets P
= 17,731,469,292 P
= 18,585,354,938 P
= 16,824,043,137
Liabilities 5,269,735,439 6,645,464,795 6,962,575,187
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash, Equity 12,461,733,854 11,942,890,233 9,861,467,950
unless otherwise stated. As of December 31, 2018 and 2017, the Group has not made any Net income 962,549,506 1,292,005,785 872,459,129
provision for impairment loss relating to amounts owed by related parties. This assessment
is undertaken each financial year by examining the financial position of the related party and As of December 31, 2018, 2017 and 2016, the accumulated balances of and net income
the market in which the related party operates. attributable to non-controlling interests follows:

Except as discussed above and in Notes 20 and 21 to the consolidated financial statements, 2018 2017 2016
there have been no guarantees provided or received for any related party receivables or Accumulated balances:
payables. Starmalls Group P
= 1,672,764,657 P
= 1,549,986,619 P
= 1,348,688,755
Manuela 344,282,145 217,911,662 196,478,623
As of December 31, 2018 and 2017, the plan asset includes investment in fixed-rate peso Share in dividend
Starmalls Group 48,060,935 36,192,507 21,367,435
retail bonds of the Parent Company with fair value amounting to P
= 19.56 million and P
= 20.06 Net income attributable to:
million, respectively (Note 26). Starmalls Group 170,268,543 237,835,848 179,100,462
Manuela 128,838,332 21,276,429 14,325,779
The compensation of key management personnel by benefit type follows: Other comprehensive income (loss)
attributable to:
2018 2017 2016 Starmalls Group 570,430 (345,477) (934,178)
Short-term employee benefits P
= 136,832,739 P
= 134,720,076 P
= 129,966,238 Manuela 532,151 156,610 (3,292,680)
Post-employment benefits 27,638,019 27,161,537 39,221,549
P
= 164,470,758 P
= 161,881,613 P
= 169,187,787

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30. Fair Value Determination The following table provides the fair value measurement and the hierarchy of the Group’s
financial assets and liabilities recognized as of December 31, 2018 and 2017:
The Group uses the following hierarchy for determining and disclosing the fair value of
December 31, 2018
financial instruments by valuation technique:
Fair Value
Quoted prices
∂ Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities; in active Significant
markets for offer Significant
∂ Level 2: Valuation techniques involving inputs other than quoted prices included in identical observable unobservable
Level 1 that are observable for the asset or liability, either directly or indirectly; Carrying assets inputs inputs
and values Total (Level 1) (Level 2) (Level 3)
Assets
∂ Level 3: Other valuation techniques involving inputs for the asset or liability that are not Financial assets measured at fair
based on observable market data (unobservable inputs). value:
Investments at FVOCI P
= 106,499,183 P= 106,499,183 P
=− P
= 106,499,183 P
=−
Financial assets for which fair values
The following methods and assumptions were used to estimate the fair value of each class of are
financial instrument for which it is practicable to estimate such value: disclosed:
Installment contracts receivable 14,491,282,897 14,567,347,302 − − 14,567,347,302
Investments at amortized cost 27,483,090,564 27,451,401,740 − 27,451,401,740 −
Cash and cash equivalents short-term cash investments, installment contracts receivable Liabilities
(effective January 1, 2018), accrued interest receivable, receivables from tenants, buyers and Financial liabilities for which fair
values are disclosed
others, receivables from related parties and accounts and other payables except for deferred Bank loans 44,476,052,515 34,981,749,890 − − 34,981,749,890
output VAT and other statutory payables: Due to the short-term nature of the accounts, the Notes payable 74,286,995,523 58,033,910,204 − − 58,033,910,204
fair value approximate the carrying amounts in the consolidated statements of financial Loans payable 2,784,170,565 1,940,017,202 − − 1,940,017,202

position.
December 31, 2017
Fair Value
Installment contracts receivable (prior to January 1, 2018): Estimated fair value of long-term Quoted prices in
portion of installment contracts receivable is based on the discounted value of future cash active markets Significant offer Significant
for identical observable unobservable
flows using the prevailing interest rates for similar types of receivables as of the reporting date assets inputs inputs
using the remaining terms of maturity. The discount rate used ranged from 4.35% to 7.56% Carrying values Total (Level 1) (Level 2) (Level 3)
in 2018 and 3.08% to 4.90% in 2017. Assets
Financial assets measured at fair value:
AFS financial assets P
= 6,568,238,766 P
= 6,568,238,766 P
=− P
= 6,568,238,766 P
=−
Investments at FVOCI (on or after January 1, 2018): Fair values of equity securities are based Financial assets for which fair values are
on quoted market prices. disclosed:
Installment contracts receivable 30,943,358,823 31,013,722,727 − − 31,013,722,727
HTM investments 21,827,289,447 21,874,926,636 − 21,874,926,636 −
AFS financial assets: Fair values of debt and equity securities are based on quoted market Liabilities
Financial liabilities for which fair values
prices. For AFS investment in unquoted equity securities, these are carried and presented at are disclosed
cost since fair value is not reasonably determinable due to the unpredictable nature of future Bank loans 35,799,812,028 26,305,509,403 − − 26,305,509,403
cash flows and without any other suitable methods of arriving at a reliable fair value. Notes payable 54,501,042,238 38,247,956,919 − − 38,247,956,919
Loans payable 3,760,465,983 2,916,312,620 − − 2,916,312,620

Investments at amortized cost (on or after January 1, 2018): The fair value of these listed
In 2018 and 2017, there were no transfers between Levels of fair value measurements.
bonds is determined by reference to quoted market bid prices, at the close of business on the
reporting date.
Significant increases (decreases) in discount rate would result in significantly higher (lower)
fair value of the installment contracts receivable, notes payable, loans payable, bank loans,
HTM investments: The fair value of HTM investments that are actively traded in organized
retention payable and liabilities for purchased land.
financial markets is determined by reference to quoted market bid prices, at the close of
business on the reporting date. Description of significant unobservable inputs to valuation follows:
Bank loans, loans payable, notes payable and retention payable: Significant Unobservable
Estimated fair values are based on the discounted value of future cash flows using the Account Valuation Technique Inputs
Discounted cash flow
applicable rates for similar types of loans. Interest rates used in discounting cash flows ranged Installment contracts receivable analysis Discount rate
from 5.41% to 7.07% in 2018 and 3.88% to 5.75% in 2017 using the remaining terms to Discounted cash flow
maturity. Bank loans analysis Discount rate
Discounted cash flow
Notes payable analysis Discount rate
Discounted cash flow
Loans payable analysis Discount rate

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December 31, 2017

31. Financial Assets and Liabilities
Effective
Interest Rate Amount
Financial Risk Management Objectives and Policies Financial assets
Financial risk Fixed rate
Cash and cash equivalents in Philippine Peso (excluding cash on hand) 0.10% to 2.75% P
= 6,826,332,988
The Group’s principal financial liabilities comprise of bank loans, loans payable, notes Cash and cash equivalents in US Dollar 0.10% to 2.50% 4,653,056,688
payable, accounts and other payables (except for deferred output VAT and other statutory Short-term cash investments 1.62% to 2.50% 345,639,559
HTM investments 2.82% to 4.80% 21,827,289,447
payables) and liabilities for purchased land. The main purpose of the Group’s financial Installment contracts receivable 4.32% to 4.90% 30,943,358,823
liabilities is to raise financing for the Group’s operations. The Group has various financial P
= 64,595,677,505
assets such as installment contracts receivable, cash and cash equivalents and short-term,
Financial liabilities
long-term cash investments, investments at fair value through other comprehensive income Fixed rate
and investments at amortized cost which arise directly from its operations. The main risks Notes payable 5.00% to 7.45% P
= 54,501,042,238
Bank loans 3.75% to 10.50% 35,799,812,028
arising from the use of financial instruments are interest rate risk, foreign currency risk, credit Loans payable 7.00% to12.00% 3,760,465,983
risk and liquidity risk. P
= 94,061,320,249

The BOD reviews and approves with policies for managing each of these risks. The Group As of December 31, 2018 and 2017, the Group’s leasing income and operating cash flows
monitors market price risk arising from all financial instruments and regularly report financial are substantially independent of changes in market interest rates.
management activities and the results of these activities to the BOD.
Foreign exchange risk
The Group’s risk management policies are summarized below. The exposure to risk and how The Group’s foreign exchange risk results primarily from movements of the Philippine Peso
they arise, as well as the Group’s objectives, policies and processes for managing the risk against the United States Dollar (USD). Approximately 37.11% and 36.56% of the debt of the
and the methods used to measure the risk did not change from prior years. Group, and 37.37% and 40.53% of the cash and cash equivalents of the Group are
denominated in USD as of December 31, 2018 and 2017, respectively. The Group’s foreign
Cash flow interest rate risk currency-denominated debt comprises of the notes payable in 2018 and 2017.
The Group’s exposure to market risk for changes in interest rates, relates primarily to its
financial assets and liabilities that are interest-bearing. Below are the carrying values and the amounts in US$ of these foreign currency denominated
financial assets and liabilities:
The Group’s policy is to manage its interest cost by entering into fixed rate debts. The Group
also regularly enters into short-term loans as it relates to its sold installment contracts December 31, 2018
receivables to cushion the impact of potential increase in loan interest rates. Peso US$
Assets
Cash and cash equivalents P
= 7,476,366,979 $142,190,319
The table below shows the financial assets and liabilities that are interest-bearing: Investments at amortized cost 27,483,090,564 522,690,958
34,959,457,543 664,881,277
December 31, 2018 Liability
Effective Notes payable (36,859,221,848) (701,012,207)
Interest Rate Amount Net foreign currency position (P
= 1,899,764,305) ($36,130,930)
Financial assets
Fixed rate
Cash and cash equivalents in Philippine Peso December 31, 2017
(excluding cash on hand) 0.60% to 5.50% P
= 12,531,634,107 Peso US$
Cash and cash equivalents in US Dollar 0.10% to 2.50% 7,476,366,979 Assets
Short-term cash investments 1.50% to 3.00% 139,942,752 Cash and cash equivalents P
= 4,653,056,688 $93,191,602
Investments at amortized cost 2.69% to 5.56% 27,483,090,564 AFS financial assets 6,491,361,776 130,009,248
Installment contracts receivable 4.35% to 7.56% 14,491,282,897 HTM investments 21,827,287,456 437,157,770
P
= 62,122,317,299 32,971,705,920 660,358,620
Financial liabilities Liability
Fixed rate Notes payable (34,907,625,160) (699,131,287)
Notes payable 5.65% to 8.25% P
= 74,286,995,523 Net foreign currency position (P
= 1,935,919,240) ($38,772,667)
3.88% to
Bank loans 10.75% 44,476,052,515
Loans payable 5.50% to 7.50% 2,784,170,565 In translating the foreign currency- denominated monetary assets and liabilities in peso
P
= 121,547,218,603 amounts, the Philippine Peso - US dollar exchange rates as at December 31, 2018 and 2017
used were P = 52.58 to US$1.00 and P
= 49.93 to US$1.00.

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In addition, the assets and liabilities of VII, composed of the dollar denominated investments For installment contracts receivable and contract assets, exposure to credit risk is not
in FVTPL (previously AFS), investments at amortized cost (previously HTM) and notes significant given that title of the real estate property is only transferred to the customer if the
payable with US$ functional currency, are translated into presentation currency of the Group consideration had been fully paid. In case of default, after enforcement activities, the Group
using the closing foreign exchange rate prevailing at the reporting date, and the respective has the right to cancel the sale and enter into another contract to sell to another customer
income and expenses at the weighted average rates for the period. The exchange differences after certain proceedings (e.g. grace period, referral to legal, cancellation process,
arising on the translation are recognized in OCI under “Cumulative Translation Adjustments” reimbursement of previous payments) had been completed.
(CTA).
The Group evaluates the concentration of risk with respect to trade receivables and contract
The following table demonstrates the sensitivity to a reasonably possible change in the US assets as low, as its customers are located in several jurisdictions and various income
dollar exchange rate until its next annual reporting date, with all other variables held constant, brackets, and operate in largely independent markets.
of the Group’s 2018 and 2017 profit before tax (due to changes in the fair value of monetary
assets and liabilities denominated in US Dollar) as of December 31, 2018 and 2017: Credit risk arising from receivable from tenants - third parties is primarily managed through a
screening of tenants based on credit history and financial information submitted. Tenants are
December 31, 2018 required to pay security deposits equivalent to 3-months lease payment to cover any
Increase/ Effect on defaulting amounts and advance rentals also equivalent to 3-month rent.
Decrease income
in US Dollar rate before tax
Cash and cash Credit risk arising from receivable from tenants - related parties, aside from the same terms
equivalents +1.34% P
= 432,780 of security deposit and advance rental, is minimal due to the guarantee provided by Fine
-1.34% (432,780) Properties, Inc., ultimate parent company.
Investments at
amortized cost +1.34% −
Credit risk arising from receivables from related parties is minimal as they have a low risk of
-1.34% −
Notes payable +1.34% − default and have a strong capacity to meet their contractual cash flows in the near term.
-1.34% −
Credit risk from balances with banks and financial institutions is managed by the Group’s
December 31, 2017 treasury department in accordance with the Group’s policy. Investments of surplus funds are
Increase/ Effect on made only with approved counterparties and within credit limits assigned to each
Decrease income
in US Dollar rate before tax
counterparty. Counterparty credit limits are reviewed by the Group’s Board of Directors on an
Cash and cash annual basis, and may be updated throughout the year subject to approval of the Group’s
equivalents +2.14% P
= 1,729,428 Finance Committee. The limits are set to minimize the concentration of risks and therefore
-2.14% (1,729,428) mitigate financial loss through a counterparty’s potential failure to make payments.
HTM investments +2.14% −
-2.14% −
Notes payable +2.14% −
The Group’s maximum exposure to credit risk as of December 31, 2018 and 2017 is equal to
-2.14% − the carrying values of its financial assets.

The impact of foreign currency changes in Investments at amortized cost, Notes payable and Applying the expected credit risk model did not result in the recognition of an impairment loss
AFS financial assets is recognized as part of cumulative translation adjustments in equity. for all financial assets at amortized cost in 2018.
The assumed movement in basis points for foreign exchange sensitivity analysis is based on
the management’s forecast of the currently observable market environment, showing no
material movements as in prior years.

Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial
instrument or customer contract, leading to a financial loss. The Group is exposed to credit
risk from its operating activities (primarily installment contracts receivables and receivables
from tenants) and from its investing activities, including deposits with banks and financial
institutions.

Customer credit risk is managed by each business unit subject to the Group’s established
policy, procedures and control relating to customer credit risk management. Credit quality of
a customer is assessed based on an extensive credit rating scorecard and individual credit
limits are defined in accordance with this assessment. Receivables and contract assets are
regularly monitored.

204 VISTA LAND

*SGVFS034680* *SGVFS034680*
2018 ANNUAL REPORT 205
 *SGVFS034680*
- 116 -

6,491,361,776
Total

345,639,559

13,636,135,450
30,943,358,823

76,876,990
44,703,353
56,404,523,508
21,827,289,447
= 11,479,389,676

= 84,844,755,074
The table below shows the credit quality of the Group’s financial assets as of December 31, 2017, gross of allowance for impairment losses: Liquidity Risk
The Group monitors its cash flow position, debt maturity profile and overall liquidity position in

P
assessing its exposure to liquidity risk. The Group maintains a level of cash deemed sufficient

–
–

–
−
=–

276,736,184
Impaired

120,290,254

397,026,438

= 397,026,438
to finance its cash requirements. Operating expenses and working capital requirements are

P
sufficiently funded through cash collections. The Group’s loan maturity profile is regularly
reviewed to ensure availability of funding through adequate credit facilities with banks and
other financial institutions.

P
The extent and nature of exposures to liquidity risk and how they arise as well as the Group’s
–

–
–

–
−
5,307,869,583
5,363,591,589
=–
Past due but
not impaired

10,671,461,172

= 10,671,461,172
P

objectives, policies and processes for managing the risk and the methods used to measure
the risk are the same for 2018 and 2017.

P
Maturity Profile Financial Liabilities
The tables below summarize the maturity profile of the Group’s financial liabilities as of
December 31, 2018 and 2017 based on undiscounted contractual payments, including
8,051,529,683

6,491,361,776
Total

345,639,559

76,876,990
25,459,476,980

44,703,353
45,336,035,898
21,827,289,447
= 11,479,389,676

= 73,776,267,464

interest payable.

December 31, 2018

P

1 to 3 to 1 to
On Demand 3 Months 12 Months 5 Years Total
–

−
–
–
–
−

–
−
=–

=−
Low grade

Financial Liabilities
Financial liabilities at amortized cost
Bank loans P
= 6,000,682 P
= 1,331,705,457 P
= 3,995,116,370 P
= 39,143,230,006 P
= 44,476,052,515
Loans payable 35,509,536 39,591,194 261,625,610 2,447,444,225 2,784,170,565
- 115 -

Liabilities for purchased land 739,726,481 2,154,363,011 2,068,885,052 340,743,267 5,303,717,811

Neither past due nor impaired

Accounts payable and other payables* 7,428,634,752 593,282,437 1,604,935,616 853,308,728 10,480,161,533
Notes payable − − 4,760,986,563 69,526,008,960 74,286,995,523
Total undiscounted financial liabilities P
= 8,209,871,451 P
= 4,118,942,099 P
= 12,691,549,211 P
= 112,310,735,186 P
= 137,331,097,947
–

–
–

–
−
2,464,355,932
2,676,747,290

5,141,103,222
=–
Medium grade

= 5,141,103,222
P

*excluding statutory payables

December 31, 2017

P

1 to 3 to 1 to
On Demand 3 Months 12 Months 5 Years Total
5,587,173,751

6,491,361,776
High grade

345,639,559

76,876,990
44,703,353
= 11,479,389,676

22,782,729,690

40,194,932,676
21,827,289,447

= 68,635,164,242

Financial Liabilities
Financial liabilities at amortized cost
Bank loans P
= 4,073,750 P
= 904,069,801 P
= 2,712,209,402 P
= 32,179,459,075 P
= 35,799,812,028
Loans payable 100,847,102 112,439,017 431,069,530 3,116,110,334 3,760,465,984
Liabilities for purchased land 674,640,471 1,964,807,957 1,886,850,911 818,805,840 5,345,105,179
Accounts payable and other payables* 6,095,083,465 486,779,347 1,316,825,616 718,286,908 8,616,975,336
P

Notes payable − − 60,890,732 54,440,151,506 54,501,042,238

Total undiscounted financial liabilities P
= 6,874,644,788 P
= 3,468,096,122 P
= 6,407,846,191 P
= 91,272,813,663 P
= 108,023,400,765
*excluding statutory payables
Cash and cash equivalents (excluding cash on hand)

32. Lease Commitments

The Group as Lessee

Investments in unquoted equity shares
Investments in quoted debt securities

The Group has entered into non-cancellable operating lease agreements for its several
Installment contracts receivable

branch offices with terms of one to 25 years and land where its commercial projects are
Short-term cash investments

situated for 25 years. The lease agreements include escalation clauses that allow a
reasonable increase in rates. The leases are payable on a monthly basis and are renewable
Total loans and receivables

under certain terms and conditions.

Loans and Receivables

AFS Financial Assets

December 31, 2017

HTM investments
Receivables

Others

206 VISTA LAND

*SGVFS034680*
2018 ANNUAL REPORT 207
 - 117 - - 118 -

Future minimum rentals payable under non-cancellable operating leases as of December 31, Non-cash Change
Foreign
2018 and 2017 follow: December 31, exchange Fair value December 31,
2016 Cash Flows Acquisition movement changes 2017
Loans payable P
= 3,887,252,607 (P
= 126,786,624) P
=− P=− P
=− P
= 3,760,465,983
2018 2017 Bank loans 36,087,242,292 (287,430,264) − − − 35,799,812,028
Notes payable 39,525,115,572 14,673,096,492 − 302,830,174 − 54,501,042,238
Within one year P
= 310,251,640 P = 199,541,551 Total liabilities from
After 1 year but not more than five years 1,465,930,104 929,679,349 financing activities P
= 79,499,610,471 P
= 14,258,879,604 P
=− P
= 302,830,174 P
=− P
= 94,061,320,249
More than five years 4,230,000,227 1,679,928,540
P
= 6,006,181,971 P
= 2,809,149,440 The Group’s noncash investing and financing activities pertain to the following:

Rent expense included in the consolidated statements of comprehensive income for the years a) Transfers from property and equipment to investment property amounting to
ended December 31, 2018, 2017 and 2016 amounted to P = 214.12 million, P
= 136.74 million and P
= 62.72 million in 2016. There are no transfers in 2017 and 2018.
P
= 142.71 million, respectively (Note 25). b) Purchase of land that are payable from one to three years amounting to P = 41.39 million,
P
= 1,807.43 million and P=609.93 million in 2018, 2017 and 2016, respectively.
The Group as Lessor c) In 2017, pension liability amounting to P
=13.22 million was transferred to a related party.
The Group has entered into non-cancellable property leases on its investment property d) Unpaid acquisition costs of treasury shares amounting to P= 76.53 million in 2018
portfolio, consisting of retail mall spaces and BPO commercial centers which generally provide
for either (a) fixed monthly rent, or (b) minimum rent or a certain percentage of gross revenue, Under the receivable discounting arrangements, the Group applies collections from
whichever is higher. All leases include a clause to enable upward revision of the rental charge installment contracts receivables against loans payable. The group considers the turnover of
on an annual basis based on prevailing market conditions. the receipts and payments under this type of arrangement as quicker and relatively shorter.
Where the Group considers a quick turnaround, the receipts and payments are reported on a
Future minimum rentals receivable under non-cancellable operating leases as of December net basis. The effects on the cash flows arising from financing activities presented on a net
31, 2018 and 2017 follow: basis follow:

2018 2017 2018 2017 2016

Proceeds from loans payable P
= 1,727,577,197 P
= 2,318,488,026 P
= 2,243,997,645
Within one year P
= 4,584,963,785 P= 3,348,432,254
Collection of installment contract
After one year but not more than five years 15,293,680,078 12,282,694,490 receivables (1,131,594,316) (1,817,597,657) (1,839,906,656)
More than five years 11,048,916,139 6,298,639,191 Proceeds from loans payable -net P
= 595,982,881 P
= 500,890,369 P
= 404,090,989
P
= 30,927,560,002 P
= 21,929,765,935
2018 2017 2016
Rental income included in the consolidated statements of comprehensive income for the years Payments of loans payable (P
= 1,131,594,316) (P
= 1,817,597,657) (P
= 1,839,906,656)
ended Collection of installment contract
December 31, 2018, 2017 and 2016 amounted to P = 6,464.74 million, P
= 5,625.23 million and receivables 1,131,594,316 1,817,597,657 1,839,906,656
P
= 4,375.33 million, respectively. Payments of loans payable - net P
=− P
=− P
=−

Contingent rent included in rental income for the years ended December 31, 2018, 2017 and The Group made certain reclassifications to the consolidated statements of cash flows for
2016 amounted to P = 987.09 million, P
= 663.81 million and P
= 454.91 million, respectively. 2017 and 2016 to align with 2018 classification and to reflect the more appropriate nature of
the sources and uses of cash. Below is the summary of reclassifications:

33. Notes to Consolidated Statements of Cash Flows Operating Investing Financing

Activities Activities Activities
For the year ended December 31,
Details of the movement in cash flows from financing activities follow: 2017, as previously reported P
= 3,829,244,608 (P
= 14,174,963,695) P
= 12,937,294,948
Interest and other financing charges
Non-cash Change
including capitalized borrowing
Foreign
December 31, exchange Fair value December 31, cost 6,182,038,605 − (6,182,038,605)
2017 Cash Flows Acquisition movement changes 2018 Interest received (1,486,957,249) 1,486,957,249 −
Loans payable P
= 3,760,465,983 (P
= 976,295,418) P
=− P
=− P
=− P
= 2,784,170,565 Reclassification of land and
Bank loans 35,799,812,028 8,676,240,487 − − − 44,476,052,515
Notes payable 54,501,042,238 17,876,742,235 − 1,909,211,050 − 74,286,995,523
improvements (Note 3) (6,538,260,984) 6,538,260,984 −
Total liabilities from For the year ended December 31,
financing activities P
= 94,061,320,249 P
= 25,576,687,304 P
=− P
= 1,909,211,050 P
=− P
= 121,547,218,603 2017, as restated P
= 1,986,064,980 (P
= 6,149,745,462) P
= 6,755,256,343

208 VISTA LAND

*SGVFS034680* *SGVFS034680*2018 ANNUAL REPORT 209
 - 119 - SHAREHOLDER INFORMATION
Operating Investing Financing
Activities Activities Activities
For the year ended December 31,
2016, as previously reported P
= 6,064,474,531 (P
= 15,927,348,650) P
= 12,748,042,087
VISTA LAND & LIFESCAPES, INC. CAMELLA HOMES, INC.
Interest and other financing charges Registered Address Head Office
including capitalized borrowing Lower Ground Floor, Building B, Evia Lifestyle Center, UGF Worldwide Corporate Center
cost 4,759,217,196 − (4,759,217,196) Vista City, Daanghari, Almanza II, Las Piñas City, Shaw Boulevard
Interest received (1,387,371,148) 1,387,371,148 − Philippines 1552 Mandaluyong City
Reclassification of land and Office Address Philippines
improvements (Note 3) (3,664,137,702) 3,664,137,702 − UGF Worldwide Corporate Center Tel +63 2 CAMELLA
For the year ended December 31,
2016, as restated P
= 5,772,182,877 (P
= 10,875,839,800) P
= 7,988,824,891
Shaw Boulevard +63 2 2263552
1552 Mandaluyong City Mega Manila-based Communities
Philippines 3rd Level Starmall Alabang
Tel +63 2 CAMELLA Alabang, Muntinlupa City
34. Commitments and Contingencies +63 2 2263552 Philippines
Fax +63 2 CAMELLA Tel +63 2 CAMELLA
The Group has entered into several contracts with contractors for the development of its real +63 2 2263552 ext. 0065 +63 2 2263552
estate properties. As of December 31, 2018 and 2017, these contracts have an estimated www.vistaland.com.ph www.camella.com.ph
aggregate cost of P= 16,007.81 million and P
= 13,077.46 million, respectively. These contracts
are due to be completed on various dates up to December 2020.
BRITTANY CORPORATION VISTA RESIDENCES, INC.
The progress billings are settled within one year from date of billings. These are unsecured Lower Ground Floor, Building B, Evia Lifestyle Center, UGF Worldwide Corporate Center
obligations and carried at cost. Vista City, Daanghari, Almanza II, Las Piñas City, Shaw Boulevard
Philippines 1552 Mandaluyong City
The Group has various contingent liabilities from legal cases arising from the ordinary course Tel +63 2 8827696 Philippines
of business which are either pending decision by the courts or are currently being contested www.brittany.com.ph Tel +63 2 5841183
by the Group, the outcome of which are not presently determinable. Fax +63 2 5841178 ext. 1039
www.vistaresidences.com.ph
In the opinion of the management and its legal counsel, the eventual liability under these
CROWN ASIA PROPERTIES, INC.
Lower Ground Floor, Building B, Evia Lifestyle Center,
lawsuits or claims, if any, will not have a material or adverse effect in the Group’s financial Vista City, Daanghari, Almanza II, Las Piñas City, STARMALLS, INC.
position and results of operations. Philippines Lower Ground Floor, Building B, Evia Lifestyle Center,
Tel +63 2 88CROWN Vista City, Daanghari, Almanza II, Las Piñas City,
+63 2 8827696 Philippines
35. Approval of the Financial Statements www.crownasia.com.ph
Office Address
The consolidated financial statements of the Group as of December 31, 2018 and 2017 and 4th Flr. Worldwide Corporate Center
for each of the three years in the period ended December 31, 2018 were authorized for issue COMMUNITIES PHILIPPINES, INC. Shaw Boulevard, Highway Hills
by the BOD on April 2, 2019. UGF Worldwide Corporate Center 1502 Mandaluyong City, Philippines
Shaw Boulevard Tel +63 2 571-5948
1552 Mandaluyong City Fax +63 2 571-5949
Philippines Email investor.relations@starmalls.com.ph
Tel +63 2 CAMELLA www.starmallsinc.com.ph
+63 2 2263552 www.starmalls.com.ph
www.camella.com.ph

210 VISTA LAND

*SGVFS034680* 2018 ANNUAL REPORT 211
 SHAREHOLDER INFORMATION

INSTITUTIONAL INVESTOR INQUIRIES

UGF Worldwide Corporate Center
Shaw Boulevard
1552 Mandaluyong City
Philippines
Tel +63 2 CAMELLA
+63 2 2263552 ext 0088/0064
Fax +63 2 CAMELLA
+63 2 2263552 ext 0065/ 0046
Email brian_edang@vistaland.com.ph
tzarroda_borinaga@camella.com.ph
gillian_guarina@vistaland.com.ph

SHAREHOLDER SERVICES
AND ASSISTANCE
For inquiries regarding dividend payments,
change of address and account status, lost or
damaged stock certificates, please write or call:
BDO Unibank, Inc. - Trust and Investments Group
15th Floor, South Tower,
BDO Corporate Center
7899 Makati Avenue,
Makati City 0726
Tel +63 2 8784965
Fax +63 2 8784056

Concept, Content Design and Layout

Photography
Portraiture and Operations A.G De Mesa
Digital Painting Ronald Lopez

Cover: Printed on FEDRIGONI Stucco Acquerello g/m2 300

212 VISTA LAND

 Lower Ground Floor, Building B, Evia Lifestyle Center,
Vista City, Daang Hari Almanza II Las Pi–as City, Philippines

Tel: +63 2 CAMELLA Fax: +63 2 CAMELLA ext.0065

2263552 2263552
www.vistaland.com.ph