cover sheet...cover sheet 6 0 5 6 6 s.e.c. registration number c e n t u r y p r o p e r t i e s g r...

COVER SHEET

6 0 5 6 6S.E.C. Registration Number

C E N T U R Y P R O P E R T I E S G R O U P

I N C .(FORMERLY EAST ASIA POWER RESOURCES CORPORATION)

(Company’s Full Name)

21st FLOOR, PACIFIC STAR BUILDING, SEN. GIL PUYAT CORNER MAKATIAVE., MAKATI CITY

(Business Address: No. Street City / Town / Province)

Isabelita Ching-Sales (632) 7938220Contact Person Company Telephone

Number

(SEC FORM 17-A)1 2 3 1Month Day FORM TYPE Month

DayFiscal Year Annual

Meeting

Secondary License Type, If Applicable

Dept. Requiring this Doc. Amended ArticlesNumber/Section

Total Amount of Borrowings

---------------------------------------------------------------------------------------------------------------------------------------------------------------------

To be accomplished by SEC Personnel concerned

File Number LCU

Document I.D. Cashier

STAMPS

Remarks = pls. use black ink for scanning purposes.

SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT PURSUANT TO SECTION 17

SEC FORM 17-A

OF THE SECURITIES REGULATION CODE AND SECTION 141

OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended: December 31, 2015 2. SEC Identification Number: 60566 3. BIR Tax Identification No.: 004-504-281-000 4. Exact name of issuer as specified in its charter:

CENTURY PROPERTIES GROUP INC. 5. Province, Country or other jurisdiction of incorporation or organization: Philippines 6. Industry Classification Code: (SEC Use Only) 7. Address of principal office/Postal Code: 21

st Floor, Pacific Star Building, Sen Gil Puyat

Avenue corner Makati Avenue, Makati City 8. Issuer's telephone number, including area code: (632) 7935500 9. Former name, former address, and former fiscal year, if changed since last report: 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA:

Title of Each Class COMMON (12/31/2015)

No. of Shares of Common Stock Outstanding and as Issued of December 31, 2015 11,599,600,690 shares of stock outstanding 100,123,000 treasury shares

11. Are any or all of these securities listed on a Stock Exchange. Yes [ X ] 4,285,040,062 common shares No [ ] If yes, state the name of such stock exchange and the classes of securities listed therein: Philippine Stock Exchange, Inc. Common Shares

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CENTURY PROPERTIES GROUP INC. Page 2 of 74

SEC Form 17-A

12. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports); Yes [ X ] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days. Yes [ X ] No [ ] 13. State the aggregate market value of the voting stock held by non-affiliates of the registrant.

P2,123,974,972.00 billion as of December 31, 2015

APPLICABLE ONLY TO ISSUERS INVOLVED IN

INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

14. Check whether the issuer has filed all documents and reports required to be filed by Section 17 of the Code subsequent to the distribution of securities under a plan confirmed by a court or the Commission. Yes [ ] No [X] DOCUMENTS INCORPORATED BY REFERENCE 15. If any of the following documents are incorporated by reference, briefly describe them and identify the part of SEC Form 17-A into which the document is incorporated:

Consolidated Financial Statements as of and for year ended December 31, 2015

(Incorporated as reference for Item 7 to 12 of SEC Form 17-A)

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SEC Form 17-A

TABLE OF CONTENTS – DOUBLE CHECK AFTER FINAL COMMENTS

PART I. BUSINESS AND GENERAL INFORMATION 5

Item 1 Business……………………………………………………………………………………………... Item 1.1 Overview………………………………………………………………………….. Item 1.2 Recent Transactions…………………………………………………………….. Item 1.3 Subsidiaries and Associate………..……………………………………………. Item 1.4 Operations………………………………………………………………………... Item 1.5 Regulations………………………………………………………………………. Item 1.6 Risks………………………………………………………………………………. Item 1.7 Corporate Social Responsibility………………………………………………...

5 5 6 7 8 15 18 30

Item 2. Properties……………………………………………………………………………………………. Item 2.1 Overview………………………………………………………………………….. Item 2.2 Completed Projects as of December 31, 2015………………………………. Item 2.3 Properties under Management as of December 31, 2015………………….. Item 2.4 Project Updates as of December 31, 2015…………………………………… Item 2.5 Company Owned Properties…………………………………………………… Item 3. Legal Proceedings………………………………………………………………………………….. Item 4. Submission of Matters to a Vote of Security Holders……………………………………………

31 31 32 33 35 36 36 36

PART II. OPERATIONAL AND FINANCIAL INFORMATION…………………………………………. 37

Item 5. Company‟s Common Equity and Related Stockholders Matters……………………………… Item 5.1 Market Information………………………………………………………………. Item 5.2 Stockholders……………………………………………………………………... Item 5.3 Dividends…………………………………………………………………………. Item 5.4 Recent Sales of Unregistered or Exempt Securities, including Recent Issuance of Securities Constituting an Exempt Transaction………………...

37 37 38 39 39

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SEC Form 17-A

Item 6. Management Discussion and Analysis or Plan of Operation…………………………………... Item 7. Financial Statements……………………………………………………………………………….. Item 8. Information on Independent Accountants and Other Related Matters………………………...

40 55 56

PART III. CONTROL AND COMPENSATION INFORMATION……………………………………...... 57

Item 9. Directors and Executive Officers of the Company……………………………………………… Item 10. Executive Compensation………………………………………………………………………….. Item 11. Security Ownership of Certain Beneficial Owners and Management………………………... Item 11.1 Security Ownership of Certain Persons and Beneficial Owners…………… Item 11.2 Security Ownership of Management……………………………………….….. Item 11.3 Voting Trust Holders of 5% or More…………………………………………… Item 11.4 Changes in Control……………………………………………………………… Item 12 Certain Relationships and Related Transactions………………………………………………..

57 62 63 63 63 64 64 64

PART IV. CORPORATE GOVERNANCE………………………………………………………………... 66

PART V. EXHIBITS AND SCHEDULES………………………………………………………………….. 67

SIGNATURES………………………………………………………………………………………………... 73

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

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SEC Form 17-A

PART I. BUSINESS AND GENERAL INFORMATION ITEM 1. BUSINESS 1.1 OVERVIEW Century Properties Group, Inc., (“CPGI”) is one of the leading real estate companies in the Philippines with a 30-year track record. The Company is primarily engaged in the development, marketing, and sale of mid- and high-rise condominiums and single detached homes, leasing of retail and office space, and property management. Currently, the Company has five principal wholly-owned subsidiaries, namely, Century City Development Corporation, Century Limitless Corporation, Century Communities Corporation, Century Properties Management, Inc. and Century Properties Hotel and Leisure, Inc. (collectively known as the “Subsidiaries”). Through its Subsidiaries, the Company develops, markets and sells residential, office, medical and retail properties in the Philippines, as well as manages residential and commercial properties in the Philippines. As of December 31, 2015, the Company completed the following: 10 residential condominium buildings, consisting of 7,120 units with a total gross floor area (GFA) of 513,656 sq.m. (with parking); a retail commercial building with 52,233 sq.m. of GFA (with parking); and a medical office building, comprised of 547 units and 74,103 sq.m. of GFA (with parking). This is in addition to the 19 buildings totaling 3,768 units and 518,634 sq.m. of GFA that were completed prior to 2010 by the founding principals‟ prior development companies, the Meridien Group of Companies. Noteworthy developments are the Essensa East Forbes and South of Market in Fort Bonifacio, SOHO Central in the Greenfield District of Mandaluyong City, Pacific Place in Ortigas, Le Triomphe, Le Domaine and Le Metropole in Makati City, and the Gramercy Residences in Century City in Makati City.

Residential Projects

Location

Type

GFA in sq.m.

(with parking)

Units

Year Completed

Gramercy Residences Makati City Residential 121,595 1,428 2012

Knightsbridge Residences Makati City Residential 87,717 1,328 2013

Rio Parañaque City Residential 42,898 756 2013

Santorini Parañaque City Residential 36,126 553 2013

St. Tropez Parañaque City Residential 36,260 580 2013

Milano Makati City Residential 64,304 511 2015

Positano Parañaque City Residential 34,817 597 2015

Niagara Mandaluyong

City

Residential 33,709 474 2015

Sutherland Mandaluyong City


Osmeña West Quezon City Residential 14,525 158 2015

Total 513,656 7,120

Commercial/Office

Projects

Location

Type

GFA in sq.m.

(with parking)

Units

Year Completed

Century City Mall Makati City Retail 52,233 N/A 2013

Centuria Medical Makati Makati City Medical Office 74,103 547 2014

Total 126,336

Note: Excludes projects completed by Meridien

In addition, the Company has agreed to purchase 50% of the usage and leasehold rights of Asian Century Center, an office building in Bonifacio Global City. Asian Century Center is currently being developed by Asian Carmakers Corporation.

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SEC Form 17-A

The Company‟s land bank for future development consists of properties in Quezon City, Mandaluyong City, San Vicente, Palawan, and Batulao, Batangas that cover a total site area of 1.44 million square meters. The Company, through subsidiary Century Properties Management, Inc., also engages in a wide range of property management services, from facilities management and auction services, to lease and secondary sales. Through CPMI, the Company endeavors to ensure the properties it manages maintain and improve their asset value, and are safe and secure. CPMI manages 48 projects as of December 31, 2015 with 2.57 million sq.m of GFA (with parking) under management. Of the total, 82% of the projects CPMI manages were developed by third-parties. Notable third-party developed projects under management include the Asian Development Bank in Ortigas, Makati Medical Center, BPI Buendia Center and Pacific Star Building in Makati City, Philippine National Bank Financial Center in Pasay City, and three Globe Telecom buildings in Cebu, Mandaluyong City and Makati City. The Company‟s aim is to enhance the overall quality of life for its Filipino and foreign clients by providing distinctive, high-quality and affordable properties. The Company focuses on differentiation to drive demand, increase its margins and grow market share. In particular, the Company identifies what it believes are the best global residential standards and adapts them to the Filipino market. The Company believes that it has earned a reputation for pioneering new housing concepts in the Philippines. One of the Company‟s significant contributions is the Fully-Fitted and Fully-Furnished (“FF/FF”) concept, which is now an industry standard in the Philippines. The Company also employs a branding strategy that focuses on strategic arrangements with key global franchises to help capture and sustain consumers‟ awareness. To date, the Company has entered into agreements with Gianni Versace S.P.A., The Trump Organisation, Paris Hilton, Missoni Homes, Yoo by Philippe Starck, Forbes Media Group LLC and Giorgio Armani S.P.A, among others. The Company has marketed and sold to clients in more than 50 countries and, as a result, a significant portion of its residential properties are sold to Filipinos living abroad. International pre-sales accounted for approximately two-thirds of the total pre-sales, in terms of value, for each of the last three years. The Company conducts its sales and marketing through the Company‟s extensive domestic and international network of 510 exclusive agents who receive monthly allowances and commissions and 3,700 non-exclusive commission based agents and brokers as of December 31, 2015. For 2013, 2014 and 2015, revenue (including other income) was P10,809.1 million, P12,760.8 million and P10,381.3 million, respectively, and our net income was P1,844.7 million, P2,158.9 million and P1,519.0 million, respectively. As of December 31, 2015, we had total assets of P37,478.9 million, and total equity of P14,633.9 million.

1.2 RECENT TRANSACTIONS Joint Venture with Mitsubishi Corporation In September 2015, Century Properties, through wholly-owned subsidiary, Century City Development II Corporation, and global business enterprise Mitsubishi Corporation announced their partnership to develop, lease out, and maintain the world‟s first Forbes-branded commercial building through a joint venture agreement. The Forbes Media Tower will be located in Century Properties‟ flagship Century City in Makati City. It will to have a total gross floor area of approximately 95,000 square meters and will feature a wide range of premium amenities for businesses. Expected completion is 2019. On November 12, 2015, the partners signed a P2.2 billion loan facility with Bank of the Philippine Islands (BPI) as lender. Proceeds from the ten year P2.2 billion senior loan facility will be used to partly finance the P4.5 billion Forbes Media Tower. The balance of P2.3 billion will be funded

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SEC Form 17-A

through equity contributions of 60 percent from Century Properties and 40 percent from Mitsubishi Corporation. Launch of first hotel development On August 27, 2015, the Company announced that it has secured a term loan facility that will partly fund the construction of the sixth tower of its Acqua Private Residences project in Mandaluyong City. The project will feature a hybrid of residential units for sale, hotel suites, and preferred shares as fractional ownership of hotel units. Century‟s first hotel development is a strategic partnership with AccorHotels and will be called Novotel Suites Manila at Acqua, in line with its plans to diversify into the allied real estate segments of leisure and tourism to strengthen its portfolio. The 5-year facility was led by mandated lead arranger and book runner, Standard Chartered Bank. This is the third facility arranged by Standard Chartered for Century, the first being a dual-currency secured term loan of P4.2 billion in 2013, which matures in 2018, and the second, bilateral facility of P500 million, which was fully paid in 2015. Acqua 6 is the final tower to be launched at the 2.4-hectare property. Niagara, the first tower, has been completed and is currently undergoing unit turnover. The second tower, Sutherland, is scheduled for turnover this year. Two additional towers, Dettifoss and Livingstone, will be completed next year and the fifth tower, Iguazu, will be completed in 2018. Integrated Resort Project in Palawan On April 21, 2015, the Company announced that it had signed a memorandum of agreement to acquire 56 hectares of property to develop a beachfront lifestyle destination development in the municipality of San Vicente in Palawan. 1.3 SUBSIDIARIES AND ASSOCIATE

Below is the Company’s percentage of ownership in its Subsidiaries and Associate as of the filing of

this report.

Percentage of Ownership as of the Filing of this Report

Direct Indirect

Century Communities Corporation (CCC)

100%

Century City Development Corporation (CCDC)

100%

Century Limitless Corporation (CLC) 100%

Century Properties Management Inc. (CPMI)

100%

Century Properties Hotel and Leisure, Inc. (CPHLI)

100%

A2Global Inc. 49% -

Currently, the Company has five wholly-owned subsidiaries namely Century Communities Corporation (CCC), Century City Development Corporation (CCDC), Century Limitless Corporation (CLC), Century Properties Management Inc. (CPMI) and Century Properties Hotel and Leisure, Inc. (CPHLI). Through these Subsidiaries, CPGI develops, markets and sells residential, office, medical and retail properties in the Philippines, as well as manages residential and commercial properties in the Philippines. Century Communities Corporation CCC, incorporated in 1994, is focused on horizontal house and lot developments. From the conceptualization to the sellout of a project, CCC provides experienced specialists who develop and

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SEC Form 17-A

execute the right strategy to successfully market a project. CCC is currently developing Canyon Ranch, a 25-hectare house and lot development located in Carmona, Cavite. Century City Development Corporation CCDC, incorporated in 2006, is focused on developing mixed-use communities that include residences, office and retail properties. CCDC is currently developing Century City, a 3.4-hectare mixed-use development along Kalayaan Avenue in Makati City. Century Limitless Corporation CLC, incorporated in 2008, is Century‟s brand category that focuses on developing high-quality, affordable residential projects. Projects under CLC will cater to first-time home buyers, start-up families and investors seeking safe, secure and convenient homes. Century Properties Management, Inc. Incorporated in 1989, CPMI is one of the largest property management companies in the Philippines, as measured by total gross floor area under management. CPMI currently has 48 projects in its portfolio, covering a total gross floor area of 2.57 million sq.m. CPMI has been awarded 18 safety and security distinctions from the Safety Organization of the Philippines. Century Properties Hotel and Leisure Inc. Incorporated in 2014, CPHLI shall operate, conduct and engage in hotel and leisure and related business ventures. A2Global Inc. Incorporated in 2013, CPGI has a 49% shareholdings stake in associate, A2 Global, Inc., a company shall act as a sub-lessee for the project initiatives of Asian Carmakers Corporation (ACC) and Century Properties Group Inc. in the development and construction of commercial office in Bonifacio Global City. 1.4 OPERATIONS Employees CPGI and its Subsidiaries had 3,487 employees as of December 31, 2015, compared to 3,391 employees as of December 31, 2014. Its employees are primarily engaged in development operations, construction, property management, as well as sales and marketing. CPGI and its Subsidiaries‟ local and international marketing and distribution network consist of 5,127 agents as of December 31, 2015. CPGI and its Subsidiaries have entered into an Expense Allocation Agreement to pay the costs of such services and record such costs in general, administrative and selling expenses.

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SEC Form 17-A

The following table shows the distribution of the Company and its Subsidiaries’ employees across

our core function areas:

As of December 31,

2015 2014

Development operations.............................................

411 404

Sales and marketing................................................... 10 9

Construction……………………………………………... Property management.................................................

2,411 267

2,701 277

Total............................................................................ 3,487 3,391

Agents

Subsidized Agents………………………………………. 426 510

Agents on Commission…………………………………. 4,701 3,700

Total……………………………………………………… 5,127 4,210

In order to fulfill the manpower requirements, the Company subscribes to local and international job portals, job fairs, executive search, and advertise job postings in leading newspapers and internet sites. The Company practices equal opportunity employment to all qualified talents in terms of hiring, and salary job offers and promotion to hired employees. CPGI employees are empowered to take proactive roles with active learning and development plans, regular training opportunities and real career progression to ensure the continuity of the Company‟s vision. Managers and staff are routinely given feedback on their job performance and CPGI takes other steps to ensure the continuous development of its employees. The total employee remuneration program provided by the Company has been designed to help compete in the marketplace for quality employees and the Company believes that these packages are in line with the industry standard in the Philippines. CPGI shall provide and enhance long term incentive programs such as housing program, employees‟ stock option plan and retirement program. The Company conducts annual performance reviews and reward employees with annual salary increases if merited. The Company‟s goal is to position itself as an employer of choice in the Philippines. The employees are not covered by a collective bargaining agreement and no employee belongs to a labor union. There has not been any loss of work due to any labor disputes. Land Acquisition The Company sources land for development through joint venture agreements with land owners, or through direct purchases. Direct purchases can either be paid for in cash or on installment basis. The land acquisition process consists of three main steps: identifying, assessing and executing. First, the Company identifies the land. At this stage, the Company checks the title of the property to ensure that there are no encumbrances that will prevent development. Zoning and floor to area considerations are also examined at this stage. The sources of land in the Philippines include

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SEC Form 17-A

privately owned undeveloped property, government owned property, foreclosed bank assets and redevelopment of existing properties as certain industries migrate outside of Metro Manila. Second, the Company assesses the physical and financial suitability of the land. The land must be topographically amenable to condominium or house and lot developments. The Company also analyzes the macro demand and competing developments to develop a marketing plan for the project, as well as run pro forma cash flows and profit and loss statements for the project. Third, the Executive Committee of CPGI approves the project internally and commences with the acquisition of the land. The Company has historically entered into joint venture agreements with land owners, including commercial banks, for several of its development projects. By entering into these types of joint venture agreements, the Company foregoes spending a large sum of capital on land acquisition and can, therefore, increase its return on equity. Historically, Century has not experienced material difficulties in finding joint venture partners to supply land and currently does not expect to experience difficulties in the future. The Company believes in its track record as an innovative and reputable property developer giving its joint venture partners confidence that their project will be handled successfully. Further, the Company believes that there is an abundant supply of land owners in the Philippines who wish to develop their land but who may not have the resources, both financial and expertise, to do so. The Company‟s joint venture arrangements typically require the joint venture partner to contribute land to the project, while Century bears all costs relating to land development and the construction of the planned property. The joint venture agreement also stipulates the allocation of interest in property sales in accordance with its respective joint venture interests. The joint venture agreements specify the allocation of sales and marketing expenses between the Company and the joint venture partner. However, the Company is responsible for organizing and conducting actual sales and marketing activities. CPGI requires its joint venture partners to warrant their title over the land and, if necessary, to clear the land of tenants and informal occupants before the Company commences development work on the land. Project Design The project design process involves the planning of the potential project, including determination as to the suitable market segment, master planning, design of property and landscape design. Development timetables vary from project to project, as each project differs in scale and design. Typically, project planning begins after land acquisition and takes at least nine months, during which time CPGI prepares both the master plan for the entire project (which can take several months and may be revised over the course of the project) and detailed plans for each project phase. The Company utilizes its in-house design capabilities and market research data to plan developments as often as possible. Aside from determining the feasibility of a project, the objective of the study is to determine the property type to develop (i.e., residential, office, retail, medical, etc.). The Company believes that its expertise in, and innovative approach to, residential real estate development allows it to reduce costs, maintain competitive prices, create distinctive properties and increase sales. From time to time, the Company hires highly-regarded third-parties to design and plan projects. The work performed by these third-parties must comply with specifications that Century provides and, in all cases, their work is subject to Century‟s final review and approval. In particular, the Company hires third-parties, including international firms, to design projects which are complex and require specific technical expertise and to design specific high-end projects. Congruent with Century‟s overall strategy of creating distinctive developments, the Company also develops and implements specific design parameters for its projects. This helps Century market

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SEC Form 17-A

each project based on a particular design aesthetic and its own unique characteristic and personality. Project Development and Construction Project development and construction involves obtaining the required Government regulatory approvals and executing upon the Company‟s plans. Typically, once the Company has completed the project planning phase, it obtains the necessary Government approvals and permits to conduct pre-marketing activities. For residential projects, once the project has received a development permit from the relevant local government unit or the Housing and Land Use Regulatory Board (“HLURB”), as the case may be, and a permit to sell from the latter, pre-sales of the residential unit can, and initial development work on the project site may commence. Before the site development process can begin, the Company must also obtain clearances from various Government departments, principally the Department of Environment and Natural Resources (“DENR”) and the Department of Agrarian Reform (“DAR”), as well as the local government. The Company finances the development of projects through a combination of pre-sales (primarily for residential projects) and internally-generated funds. Century also routinely obtains project financing loans from financial institutions. CPGI expects this financing model to continue going forward. Project development and construction work for the vertical projects is primarily conducted by Century Project Management & Construction Corporation (“CPMCC”), which is owned and managed by Mr. Ricardo P. Cuerva, one of Century‟s Directors and, together with members of his family, a beneficial shareholder of the parent company, CPI. CPMCC enters into a construction management agreement with the relevant CPGI subsidiary for each project, and Mr. Cuerva functions as a construction manager by subcontracting specialty services to third parties to ensure that prices are competitive, managing construction laborers, and procuring raw and finishing materials for the project directly from suppliers to minimize costs. Marketing and Sales The Company utilizes the group‟s local and international marketing network and believes it is one of the most active industry players when it comes to sales and marketing. The local and international marketing and distribution network consists of 426 subsidized agents who receive monthly allowances and commissions, 4,701 agents on commission as of December 31, 2015. The Company believes that the members of its sales and marketing team receive competitive remuneration package and commission incentives. The Company has offices and selling partners in the United Kingdom, Italy, Germany, Singapore, Hong Kong, Indonesia, Japan, Malaysia, Canada, United States, United Arab Emirates, Kingdom of Saudi Arabia, and Australia. These efforts are in response to the ever-growing demand of its international clients. In recent periods, a significant percentage of CPGI‟s revenue has been attributable to Overseas Filipino Workers (OFWs), expatriate Filipinos and other overseas buyers. The Company‟s advertising and promotional campaigns include the use of show rooms, print and outdoor advertising, fliers, leaflets and brochures designed specifically for the particular target market. The advertising and promotional campaigns are carefully conceptualized and managed by Century‟s Corporate Communications Department. The Company uses strategic partnerships with prominent international brands and local and international celebrities to attract interest in our properties. In addition, CPGI also uses non-traditional marketing efforts such as sponsorship of conventions and other events and corporate presentations. Furthermore, the Company partners with local TV stations and local artists to further increase brand awareness.

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SEC Form 17-A

Sales and Customer Financing CPGI usually conducts pre-selling of its projects prior to construction. Customers generally start with the payment of a non-refundable, non-transferable pre-sale fee that is valid for 30 calendar days from the date of payment. Within this period, the customer is required to submit complete post-dated checks covering the monthly amortizations and the final turnover balance. Notwithstanding certain buyers who opt to pay the total contract price in full and in cash, CPGI requires 20% to 50% of the total purchase price to be paid during the construction stage, of between three to five years. On the turnover date, the buyers would have fully paid the required 20% to 50% of the total purchase price, and would be then required to either pay the balance of 50% to 80% in cash or apply for a bank-financed loan. CPGI assists qualified homebuyers in obtaining mortgage financing from government-sponsored mortgage lenders and from commercial banks. Sales Cancellations Defaults and cancellations are subject to a variety of circumstances beyond the Company‟s control, such as adverse economic and market conditions, as well as an increase in interest rates. The Company has not encountered material losses resulting from breaches in buyers‟ purchase agreements. After-sales Services CPGI provides maintenance services through its subsidiary CPMI on projects that are fully turned over to owners. The Company believes that CPMI‟s management of completed projects increases their asset values. The Company aims to continuously strive to improve its services, as well as develop long-term relationships with unit owners and this is done by obtaining feedback from owners. As an added feature, the Company, likewise, has an in-house leasing team to handle the leasing and re-sale needs of its clients. Insurance The Company believes that it has sufficient insurance coverage as required by Philippine regulations for real and personal property. Subject to customary deductibles and exclusions, CPGI‟s insurance policies include coverage for, among other things, building and improvements, machinery and equipment, furniture, fixtures and fittings against damage from fire and natural perils, machinery breakdown, third-party liability to the public and construction works. CPGI is not covered by business interruption insurance. Competition The Philippine real estate industry is highly competitive. CPGI‟s primary competitors are companies that also focus on developing residential and commercial buildings in the Philippines. Century believes that customers choose among competing real estate companies based on design, amenities, price, location, developer reputation, quality of finishes, after-sales support services, unit sizes, monthly amortization and financing terms. Century‟s competitors vary depending on the target market. The main competitors are Ayala Land, Inc., DMCI Homes, Filinvest Land Inc., Megaworld Corp., Robinson Land Corp., Rockwell Land Corporation, and Vista Land & Lifescapes, Inc. CPGI believes that it can effectively compete with other companies in its industry through innovative branding strategies to effectively enhance brand visibility and product appeal, while attempting to reinforce credibility as a leading developer in the Philippines. The Company is also developing properties in partnership with global brand names and has set up various marketing offices abroad to cater to foreign customers, Filipinos based abroad and OFWs.

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SEC Form 17-A

Suppliers The Company has a broad base of suppliers, both local and international. The Company is not dependent on one or limited number of suppliers. Customers The Company has a broad market base including local and foreign individual and institutional clients. Intellectual Property The Company, through its subsidiaries, has several trademarks/trade name and logos registered with the intellectual Property Office of the Philippines. These trademarks have registration licenses and Management has continuously maintained its renewal after such registration anniversary for exclusive use of trademarks, names and logos. The following are significant trademarks and logos of the Company‟s subsidiaries registered which Management projects and secure licenses in updating its rights to use exclusively for its operations:

Century City Development Corporation

Trademark Title Registration No. Registration Date Status

The Knightsbridge Residences at Century 4-2008-002251 07/07/2009 Active

Quatropod and Device 4-2008-006270 01/05/2009 Active

Treopod and Device 4-2008-006271 01/05/2009 Active

Duopod and Device 4-2008-006272 01/05/2009 Active

Podular 4-2008-006273 01/05/2009 Active

Condovision 4-2008-006274 01/05/2009 Active

The Gramercy Residences 4-2007-003346 08/13/2007 Active

Century City Development Corporation 4-2007-003034 08/13/2007 Active

The Gramercy Residences at Century City 4-2007-003343 08/13/2007 Active

MOMA the Modern Makati 4-2007-004279 10/29/2007 Active

Moderno 4-2007-003352 03/31/2008 Active

Century City 4-2007-003035 08/13/2007 Active

Century City Mall 4-2013-001793 02/18/2013 Active

Century City Mall 4-2013-001794 07/25/2013 Active

Century Limitless Corporation


The Sanctuary Cove 4-2009-006601 05/20/2010 Active

Sanctuary Cove (Stylized) 4-2009-006622 05/20/2010 Active

Acqua Private Residences 4-2010-009211 09/15/2011 Active

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SEC Form 17-A

Acqua Private Residences and Design 4-2010-009212 09/15/2011 Active

The Pebble 4-2011-003766 09/15/2011 Active

Niagara Tower 4-2011-003771 09/15/2011 Active

Sutherland Tower 4-2011-003772 09/15/2011 Active

Dettifoss Tower 4-2011-003770 09/15/2011 Active

Yosemite Tower 4-2011-003767 09/15/2011 Active

Acqua Victoria Tower 4-2011-003768 09/15/2011 Active

Iguazu Tower 4-2011-003769 09/15/2011 Active

The Atlantis Residences 4-2009-004741 11/19/2009 Active

The Atlantis 4-2009-004742 11/19/2009 Active

Azure Urban Resort Residences 4-2009-010680 05/20/2010 Active

Azure Urban Resort Residences with a Rectangle 4-2009-010681 05/20/2010 Active

Azure Urban Resort Residences with a Rectangle Active 4-2009-010682 05/20/2010 Active

Acqua Livingstone Interior Designed by Missoni Home 4-2011-014337 05/03/2012 Active

Acqua Iguazu Yoo Inspired by Starck 4-2011-014335 12/01/2011 Active

The Residences at Commonwealth by Century and Logo 4-2012-009282 07/27/2012 Active

Nova by Century 4-2013-00009720 08/14/2013 Active

Novacity by Century 4-2013-00009728 08/14/2013 Active

Century Communities Corporation


Century Communities and Device 4-2007-003036 08/13/2007 Active

Mt. Batulao by Century 4-2015-001992 11/05/2015 Active

Century Properties Hotel and Leisure, Inc.


Narra Hotels & Resorts and Logo 4-2014-006411 05/21/2014 Awaiting

Certificate

Crib by Narra and Design 4-2014-006413 05/21/2014 Awaiting

Certificate

Crib Hotels 4-2014-006412 05/21/2014 Awaiting Certificate

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SEC Form 17-A

Century Properties Group Inc.


Cape San Vicente 4-2015-001994 02/24/2015 New

A Censo Homes 4-2015-001995 02/24/2015 New

Censo Homes 4-2015-001993 02/24/2015 New

Government Approvals/Regulations The Company secures various government approvals such as the Environmental Compliance Certificates (ECC), development permits, licenses to sell, etc. as part of the normal course of its business. The Company has no principal product that has pending government approval as of December 31, 2015. As of December 31, 2015, the Company is not aware of any existing or probable governmental regulations that will have an impact on the Company‟s operations. As a percentage of total revenues (including other income), the Company spent 83.51% for capital expenditures in 2015, compared to 67.3% in 2014, and 84.0% in 2013. The Group is undertaking to increase expenditures in order to help in the preservation of the environment as part of its social corporate responsibility. 1.5 REGULATIONS Housing and Land Projects PD 957 and BP 220 are the principal statutes that regulate the development and sale of real property as part of a condominium project or subdivision. PD 957 and BP 220 cover subdivision projects for residential, commercial, industrial or recreational purposes and condominium projects for residential or commercial purposes. The Housing and Land Use Regulatory Board is the administrative agency of the Government which, together with local government units, enforces these statutes and has jurisdiction to regulate the real estate trade and business. Real Estate Sales on Installments The Maceda Law applies to all transactions or contracts involving the sale or financing of real estate on installment payments (including residential condominium units, but excluding industrial lots, commercial buildings and sales under the agrarian reform laws). Under the Maceda Law, where a buyer of real estate has paid at least two years of installments, the buyer is entitled to the following rights in case he/she defaults in the payment of succeeding installments: (a) To pay, without additional interest, the unpaid installments due within the total grace period earned by him, which is fixed at the rate of one month for every one year of installment payments made. However, the buyer may exercise this right only once every five years during the term of the contract and its extensions, if any (b) if the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to 50% of the total payments made, and in cases where five years of installments have been paid, an additional 5% every year (but with a total not to exceed 90% of the total payments), or (c) buyers who have paid less than two years of installments are given a 60-day grace period to pay all unpaid installments before the sale can be cancelled, but without right of refund. If a buyer fails to pay the installments

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SEC Form 17-A

due at the expiration of the grace period, the seller may cancel the contract after thirty (30) days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act from the seller. Zoning and Land Use

Land use may be limited by zoning ordinances enacted by local government units. Once enacted, land use may be restricted in accordance with a comprehensive land use plan approved by the relevant local government unit. Land may be classified under zoning ordinances as commercial, industrial, residential or agricultural. While a procedure for change of allowed land use is available, this process may be lengthy and cumbersome. Special Economic Zone The Philippine Economic Zone Authority is the government agency that operates, administers and manages designated special economic zones. An Ecozone is a comprehensive land use plan generally created by proclamation of the President of the Philippines. These are areas earmarked by the Government for development into balanced agricultural, industrial, commercial, and tourist/recreational regions. An Ecozone may contain any or all of the following: industrial estates, export processing zones, free trade zones, and tourist/recreational centers. PEZA-registered enterprises located in an Ecozone are entitled to fiscal and non-fiscal incentives such as income tax holidays and duty free importation of equipment, machinery and raw materials. Enterprises offering IT services (such as call centers and other BPO firms using electronic commerce) are entitled to fiscal and non-fiscal incentives if they are PEZA-registered locators in a PEZA-registered IT Park, IT Building, or Ecozone. An IT Park is an area which has been developed into a complex capable of providing infrastructure and support facilities required by IT enterprises, as well as amenities required by professionals and workers involved in IT enterprises, or easy access to such amenities. An IT Building is an edifice, a portion or the whole of which, provides such infrastructure, facilities and amenities. PEZA requirements for the registration of an IT Park or IT Building differ depending on whether it is located in or outside of Metro Manila. These PEZA requirements include clearances or certifications issued by the city or municipal legislative council, the Department of Agrarian Reform, the National Water Resources Board and the Department of Environment and Natural Resources (DENR). Certain properties of the Company are proclaimed Ecozones. Tenants in those properties may register with PEZA to avail of significant benefits under RA 7916 and its Implementing Rules and Regulations. They can, for example, take advantage of income tax incentives such as income tax holidays or 5% gross income taxation, thereby making tenancy in our buildings located in Ecozones potentially more attractive. Environmental Laws Development projects that are classified by law as environmentally critical or projects within statutorily defined environmentally critical areas are required to obtain an ECC prior to commencement. The DENR, through its regional offices or through the Environmental Management Bureau (EMB), determines whether a project is environmentally critical or located in an environmentally critical area. As a requisite to the issuance of an ECC, the proponent of an environmentally critical project is required to submit an Environmental Impact Statement (EIS) to the EMB while the proponent of a project in an environmentally critical area is generally required to submit an Initial Environmental Examination (IEE) to the proper DENR regional office. In the case of an environmentally critical project within an environmentally critical area, an EIS is required. The construction of major roads and bridges are considered environmentally critical projects for which EISs and ECCs are mandatory.

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SEC Form 17-A

The EIS refers to both the document and the study of a project‟s environmental impact, including a discussion of the direct and indirect consequences to human welfare and ecological as well as environmental integrity. The IEE refers to the document and the study describing the environmental impact, including mitigation and enhancement measures, for projects in environmentally critical areas. While the EIS or an IEE may vary from project to project, at a minimum, it must contain all relevant information regarding the project‟s environmental effects. The entire process of organization, administration and assessment of the effects of any project on the quality of the physical, biological and socio-economic environment, as well as the design of appropriate preventive, mitigating and enhancement measures is known as the EIS System. The EIS System successfully culminates in the issuance of an ECC. The issuance of an ECC is a Government certification that the proposed project or undertaking will not cause a significant negative environmental impact; that the proponent has complied with all the requirements of the EIS System and that the proponent is committed to implement its approved Environmental Management Plan in the EIS or, if an IEE was required, that it shall comply with the mitigation measures provided therein. Project proponents that prepare an EIS are required to establish an Environmental Guarantee Fund (EGF) when the ECC is issued for projects determined by the DENR to pose a significant public risk to life, health, property and the environment or where the project requires rehabilitation or restoration. The EGF is intended to cover damages caused by such a project as well as any rehabilitation and restoration measures. Project proponents that prepare an EIS are required to include a commitment to establish an Environmental Monitoring Fund (EMF) when an ECC is eventually issued. In any case, the establishment of an EMF must not be later than the initial construction phase of the project. The EMF shall be used to support the activities of a multi-partite monitoring team which will be organized to monitor compliance with the ECC and applicable laws, rules and regulations. Current regulations provide that residential condominiums and mixed-use buildings with a total or gross floor area (including parking and other areas) of at least 25,000 sq.m. generally fall under Category B, i.e., projects that are not categorized as environmentally critical but which may cause negative environmental impact because they are located in an environmentally critical area and are required to obtain an ECC. Residential condominiums and mixed-use buildings with a total or gross floor area (including parking and other areas) of less than 25,000 sq.m. but at least 10,000 sq.m. also generally fall under Category B and are required to obtain an ECC. Residential condominium projects with a total or gross floor area of less than 10,000 sq.m. generally fall under Category D, i.e., projects unlikely to cause adverse environmental effects, and the project‟s proponent may obtain a certificate of non-coverage from the EMB. Aside from the EIS and IEE, engineering geological and geo-hazard assessments are also required for ECC applications covering subdivisions, housing and other land development and infrastructure projects. Building Permits Under the Building Code, in order for a person or corporation to erect, construct, alter, repair, move, convert, or demolish any building or structure, a building permit must first be secured from the Building Official assigned at the place where the building work is to be done. A building permit is a written authorization granted by the Building Official to an applicant allowing him to proceed with the construction of a building after plans, specifications, and other pertinent documents required for the construction of the structure have been found to be in conformity with the Building Code. To obtain a building permit, the applicant must submit the architectural and structural plans (for example, plumbing or sanitary installation plans, mechanical plans, electrical plans, etc.) of the building for the approval of the Building Official.

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SEC Form 17-A

Business Permits Before any company may commence operations in the territory of a local government, it must secure the permits, clearances and licenses from such local government. Usually, it is assumed that a corporation has complied with all of the permitting requirements of the local government if it is issued a business permit (also referred to as a mayor‟s permit in certain jurisdictions). These permits, clearances and licenses must be renewed on an annual basis. Without these permits, clearances or licenses, the local government may shut down the operations of a business establishment until these are obtained and the corresponding fees and penalties are settled. 1.6 RISKS RISKS RELATING TO OUR BUSINESS The Company derives a significant portion of its revenue from Oversea Filipino Workers (“OFWs”), expatriate Filipinos, former Filipino citizens who have returned to the Philippines (“Balikbayans”) and other overseas buyers, which exposes the Company to risks relating to the performance of the economies where they are located. The Company generates a significant portion of its revenues, particularly sales of its affordable and middle-income projects, from OFWs, expatriate Filipinos, Balikbayans and other overseas buyers. A number of factors could reduce the number of OFWs, remittances from OFWs or the purchasing power of expatriate Filipinos, Balikbayans and other overseas buyers. These include:

• a downturn in the economic performance of the countries and regions where a significant number of these potential customers are located, such as the United States, France, Italy, the United Kingdom, Hong Kong, Japan, Korea, Taiwan, Singapore, the United Arab Emirates, Qatar and Bahrain, among others;

• a change in Government regulations that currently exempt the income of OFWs from taxation in the Philippines;

• the imposition of Government restrictions on the deployment of OFWs to particular countries or regions, such as the Middle East; and

• restrictions imposed by other countries on the entry or the continued employment of foreign workers. Any of these events could adversely affect demand for the Company‟s projects from OFWs, expatriate Filipinos, Balikbayans and other overseas buyers, which could materially and adversely affect its business, financial condition or results of operations. All of the Company’s properties are in the Philippines and it derives a material portion of its revenues from customers located in the Philippines and, as a result, it is exposed to risks associated with the Philippines, including the performance of the Philippine economy. All of the Company‟s properties are in the Philippines and it derives a material portion of its revenues from customers located in the Philippines. Accordingly, the Company is significantly influenced by the general state of the Philippine economy. In the past, the Philippines experienced periods of slow or negative growth, high inflation, significant devaluation of the peso and the imposition of exchange controls. For companies in the real estate sector, demand for, and prevailing prices of, commercial and residential properties are affected by the strength of the Philippine economy (including overall growth levels and interest rates), the overall levels of business activity in the Philippines and the amount of remittances received from OFWs.

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SEC Form 17-A

Demand for commercial and residential developments is also affected by social trends and changing spending patterns in the Philippines, which in turn are influenced by economic, political and security conditions in the Philippines. Moreover, extensive construction of condominium and housing units and other factors could lead to the risk of formation of asset bubbles in real estate. The Philippine residential housing industry is cyclical and sensitive to changes in general economic conditions in the Philippines such as levels of employment, consumer confidence and income, availability of financing for property acquisitions, construction and mortgages, interest rate levels, inflation and demand for housing. When the Philippines underwent financial and political crises in the past, demand for real estate dropped and consequently led to an oversupply in the market and reduced demand for new residential projects. The global financial crises, which resulted in a general slowdown of the global economy, likewise, led to a decline in property sales in the Philippines. If changes in the Philippine property market or the Philippine economy cause a decrease in revenues from the sale of properties, significant expenditures associated with investment in real estate, such as real estate taxes, maintenance costs and debt payments, generally cannot be correspondingly reduced and therefore could materially and adversely affect the Company‟s business, financial condition and results of operations. The Company is exposed to geographic portfolio concentration risks. Properties located in Metro Manila, the commercial capital of the Philippines, account for a substantial portion of the Company‟s real estate assets. Further, its current projects are primarily located within Metro Manila and, in particular, within relatively short distances from the traditional main business districts of Makati City, Ortigas Center and Bonifacio Global City. Due to the concentration of its property portfolio in Metro Manila, a decrease in property values in Metro Manila would have a material adverse effect on its business, financial condition and results of operations. Its portfolio of residential real estate property development projects exposes the Company to sector-specific risks. The Company‟s business is concentrated in the Philippine residential market. Therefore, reduced levels of economic growth, adverse changes in the country‟s political or security situation or weak performance of the country‟s property development market generally could materially and adversely affect its profitability. The Company‟s results of operations are dependent on the continued success of its development projects. Additionally, the Philippine real estate industry is highly competitive. The Company‟s projects are largely dependent on the popularity of its development when compared to similar types of developments in similar geographic areas, as well as on its ability to gauge correctly the market for its developments. Important factors that could affect the Company‟s ability to effectively compete include a development‟s relative location versus that of its competitors, particularly with regards to proximity to transportation facilities and commercial centers, as well as the quality of the developments and related facilities that it offers, pricing and the overall attractiveness of the development. The Company‟s inability to develop attractive projects could materially and adversely affect its business, financial conditions and results of operations. Since the Company operates in a competitive industry, it might not be able to maintain or increase its market share, profitability and ability to acquire land for new projects. The Company operates in a competitive business environment. The entry of new competitors could also reduce the Company‟s sales and profit margins. The Company faces significant competition in connection with the acquisition of land for its real estate projects. Its growth depends significantly on its ability to acquire or enter into agreements to develop additional land suitable for its real estate projects. The Company may experience difficulty acquiring land of suitable size in locations and at acceptable prices, particularly land located in and near Metro Manila and in other urban areas in the Philippines. If it is unable to acquire suitable land at acceptable prices or to enter into agreements

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SEC Form 17-A

with joint venture partners to develop suitable land with acceptable returns, its growth prospects could be limited and its business, financial condition and results of operations could be adversely affected. The interests of joint venture partners and landowners for development projects may differ from the interests of the Company, and such joint venture partners and landowner may take actions that can adversely affect the Company. The Company entered into joint venture agreements and Contracts to Sell with various parties as part of its overall land acquisition strategy, property development and property management, and intends to continue to do so. Under the terms of the joint venture agreements, the Company is responsible for project development, project sales and project management, while its joint venture partners typically supply the project land. Under the terms of the Contracts to Sell, the Company shall pay the purchase value of the land on staggered basis, and in certain transactions, pay in addition proportionate payments dependent on generated sales. A joint venture or acquisition of land via Contracts to Sell involve additional risks where the joint venture partners or landowners may have economic or business interests or goals that differ from the Company‟s. For example, the joint venture partners or landowners may withhold certain key information relating to the land that the Company may not be able to discover after conducting due diligence and such information could affect its right to possess and develop such land. Titles over the land, although already in the name of the joint venture partners or landowners, may still be contested by third parties. The joint venture partners or landowners may also take actions contrary to the Company‟s instructions or requests, or in direct opposition to its policies or objectives with respect to its investments or with respect to the project land, or dispute the distribution of joint venture shares or installment payments. The joint venture partner may also not meet its obligations under the joint venture agreement. Disputes between the Company and its joint venture partners or the landowner could arise after significant capital investments in a project have been made, which could result in the loss of some or all of the Company‟s investments in the project. Any of the foregoing could have a material adverse effect on the Company‟s business, financial condition and results of operations. The Company uses celebrities and international brands to design, market and sell some of its properties. The Company depends on its relationships with celebrities and international brands to design, market and sell some of its properties. It frequently enters into design or licensing agreements with celebrities and well-known brands in which the celebrities provide branding, promotional and design expertise and the Company agrees to pay design and licensing fees, and sometimes enters into revenue sharing plans. Circumstances beyond the Company‟s control could decrease the popularity of the celebrities and brands with whom it partners, which could, in turn, adversely affect the Company‟s marketing and sales efforts and its reputation. The Company may not be able to successfully manage its growth. The Company intends to continue to pursue an aggressive growth strategy by increasing the amount of properties it develops and manages and by expanding into new market segments. However, the Company might experience capital constraints, construction delays, operational difficulties at new locations or difficulties operating existing businesses and training personnel to manage and operate its business. Any inability to adapt effectively to growth, including strains on management and logistics, could result in losses or development costs that are not recovered as quickly as anticipated or at all. These problems could have a material adverse effect on the business, financial condition and results of operations of the Company.

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SEC Form 17-A

The Company is involved in a cyclical industry and is affected by changes in general and local economic conditions. The real estate development industry is cyclical and is significantly affected by changes in general and local economic conditions, including employment levels, availability of financing for property acquisitions, construction and mortgages, interest rates, consumer confidence and income, demand and supply of residential or commercial developments. The Philippine property market has in the past been cyclical and property values have been affected by the supply of and the demand for properties, the rate of economic growth and political and social developments in the Philippines. Furthermore, the real estate industry may experience rapid and unsustainable rises in valuations of real property followed by abrupt declines in property values, as was experienced in the United States housing bubble from 1997 to 2006. Such real estate bubbles may occur periodically, either locally, regionally or globally, which may result in a material adverse effect on the business, financial condition and results of operations of the Company. The Company might not be able to generate sufficient funds internally or through external financing to operate and grow its business as planned.

The real estate business is capital intensive and requires significant capital expenditures to develop and implement new projects and complete existing projects. Historically, while the Company has funded a significant portion of its capital expenditure requirements internally from the pre-sales of its development projects, it has periodically utilized external sources of financing. However, it might not be able to continue funding its capital expenditure requirements internally or obtain sufficient funds externally on acceptable terms or at all. Its ability to raise additional equity financing from non-Philippine investors is subject to foreign ownership restrictions imposed by the Philippine Constitution and applicable laws. Its access to debt financing is subject to many factors, many of which are outside the Company‟s control. For example, political instability, an economic downturn, social unrest or changes in the Philippine regulatory environment could increase the Company‟s costs of borrowing or restrict its ability to obtain debt financing. In addition, the disruptions in the capital and credit markets may continue indefinitely, which could adversely affect its access to financing. Inability to obtain financing on acceptable terms would adversely affect the Company‟s ability to operate and execute its growth strategies.

The cancellation of sales of housing or condominium units could adversely affect business, financial condition and results of operations. As a developer and seller of residential real estate, the Company‟s business, financial condition and results of operations could be adversely affected if a material number of housing or condominium unit sales are cancelled. Under Republic Act No. 6552 (the Maceda Law), which applies to all transactions or contracts involving the sale or financing of real estate through installment payments, buyers who have paid at least two years of installments are granted a grace period of one month for every year of paid installments to cure any payment default. During the grace period, the buyer may pay the unpaid installments due, without additional interest. If the contract is cancelled, the buyer is entitled to receive a refund of at least 50% of the total payments made by the buyer, with an additional 5% per annum in cases where at least five years of installments have been paid (but with the total not to exceed 90% of the total payments). Buyers who have paid less than two years of installments and who have defaulted on installment payments are given a 60 day grace period to pay all unpaid installments before the sale can be cancelled, but without any right of refund. The Company could experience a material number of cancellations, particularly during slowdowns or downturns in the Philippine economy, periods when interest rates are high or similar situations. If the Company experiences a material number of cancellations, it may not have enough funds on hand to pay the necessary cash refunds to buyers, in which case it may have to incur indebtedness to pay such cash refunds, but it might not be able to obtain debt financing on reasonable terms or at all. In

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SEC Form 17-A

addition, particularly during an economic slowdown or downturn, it might not be able to able to resell the same property at an acceptable price or at all. Any of these events could have a material adverse effect on its business, financial condition and results of operations. If the Company experiences a material number of sales cancellations, investors are cautioned that its historical revenue from its real estate sales would have been overstated because such historical revenues would not have accurately reflected subsequent customer defaults or sales cancellations. Investors are also cautioned not to rely on the Company‟s historical statements of income as indicators of future revenues or profits. The Company is controlled by Century Properties, Inc. (CPI), which is in turn, controlled by the Antonio family. Hence, the interests of the Antonio family may differ significantly from the interests of the other shareholders. Members of the Antonio family indirectly own a majority of the Company‟s issued and outstanding shares. Accordingly, the Antonio family will be able to elect a majority of the Board and determine the outcome of many significant matters voted on by shareholders. Members of the Antonio family also serve as directors and executive officers. The Antonio family could also take advantage of business opportunities that may otherwise be attractive to the Company. The interests of the Antonio family may differ significantly from or compete with the interests of the Company and the other shareholders, and the Antonio family may vote their shares in a manner that is contrary to the interests of the Company or the interests of the other shareholders. The Company is highly dependent on certain directors and members of senior management. The Company‟s directors and members of senior management have been an integral part of its success and the experience, knowledge, business relationships and expertise that would be lost if any such persons depart or take on reduced responsibilities could be difficult to replace and may adversely affect its operating efficiency and financial performance. In particular, members of the Antonio family fill certain key executive positions and the Company may not be successful in attracting and retaining executive talent to replace these family members if they depart or take on reduced responsibilities. Such executives include: Jose E.B. Antonio, Chairman, President and Chief Executive Officer; John Victor R. Antonio, Director and Co-Chief Operating Officer; Jose Marco R. Antonio, Director and Co-Chief Operating Officer; Jose Roberto R. Antonio, Managing Director and Co-Chief Operating Officer; Jose Carlo R. Antonio, Director and Chief Financial Officer; Rafael G. Yaptinchay, Director and Treasurer; and Ricardo P. Cuerva, Director of the Company and President of Century Project Management and Construction Corporation (CPMCC), the company exclusively charged with managing the construction projects for the Company‟s vertical developments. The Company does not carry insurance for the loss of the services of any of the members of its management. If the Company loses the services of any such person and are unable to fill any vacant key executive or management positions with qualified candidates, it could have a material adverse effect on its business, financial condition and results of operations. The Company may be unable to attract and retain skilled professionals, such as architects and engineers. The Company believes that there is significant demand for its skilled professionals from its competitors. Its ability to retain and attract highly skilled personnel, particularly architects, engineers and sales and marketing professionals, affects its ability to plan, design, execute, market and sell projects. In particular, any inability on the Company‟s part to hire and retain qualified personnel could impair its ability to undertake project design, planning, execution and sales and marketing activities in-house and could require it to incur additional costs by having to engage third parties to perform these activities.

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SEC Form 17-A

The Company may not be able to hire independent contractors that meet its requirements. The Company relies on independent contractors to provide various services, including land clearing and infrastructure development, construction works and building and property fitting-out works. It selects independent contractors principally by conducting tenders and taking into consideration factors such as the contractor‟s experience and track record, its financial and construction resources, any previous relationships with the Company and its reputation for quality. However, the Company might not be able to find a suitable independent contractor who is willing to undertake a particular project within its budget and schedule. This may result in increased costs for the Company or delays in the project. Also, the services independent contractors render might not be satisfactory or match the Company‟s requirements for quality. Contractors may also experience financial or other difficulties, such as shortages in, or increases in the price of, construction materials, which in turn could delay the completion of the project or increase the costs for the Company. Any of these factors could have a material adverse effect on the Company‟s business, financial condition, and results of operations. Construction defects and building-related claims may be asserted against the Company, and it may be involved in litigation, which could result in financial losses or harm to its business. Under Philippine law, the engineer or architect responsible for the plans and specifications for a building is liable for damages if, within 15 years from the completion of the structure, it collapses by reason of a defect in those plans and specifications or due to the defects in the ground. The action must commence within 10 years following the collapse of the building. Thus, if the architect or engineer is one of the Company‟s employees, it may be held liable for damages if any of its buildings collapse. It may also be held responsible for hidden (that is, latent or non-observable) defects in the housing and condominium units it sells if such hidden defects render a unit unfit for the use for which it was intended or if its fitness for such use is diminished to the extent that the buyer would not have acquired it or would have paid a lower price had the buyer been aware of the hidden defect. This warranty may be enforced within six months from the delivery of the house to the buyer. In addition, the National Building Code of the Philippines (the Building Code), which governs, among others, the design and construction of buildings, sets certain requirements and standards that the Company must comply with. The Company may be held liable for administrative fines or criminal penalties in case of any violation of the Building Code. Likewise, it could be held liable for the damages mentioned above, the cost of repairs and the expense of litigation surrounding such claims. Claims could also arise out of uninsurable events or circumstances not covered by the Company‟s insurance. Significant claims arising from structural or construction defects could have a material adverse effect on the Company‟s reputation and business, financial condition and results of operations. It may also be implicated in lawsuits on an ongoing basis. Litigation could result in substantial costs to, and a diversion of effort by, the Company and subject it to significant liabilities, including potential defaults under its present debt covenants. Legal proceedings could materially harm its business and reputation, and it may be unable to recover any losses incurred from third parties, regardless of whether or not the Company is at fault. Losses relating to litigation could have a material adverse effect on the Company‟s business, financial condition and results of operation, and provisions made for litigation related losses might not be sufficient to cover losses. Third parties may contest the Company’s titles to its properties. While the Philippines has adopted the Torrens System, a system of land registration which is intended to conclusively confirm land ownership by providing a state guarantee of indefeasible title to those in the register, and which is binding on all persons (including the Government), it is not uncommon for third parties to claim ownership of land which has already been registered in favor of another. In particular, Quezon City, Metro Manila and the province of Cavite, have been known to experience problems with syndicates of squatters (informal settlers) and forged or false title holders. There have been cases where third parties have produced false or forged title certificates over land and there are difficulties in obtaining title guarantees with respect to property in the Philippines. Title to land is often fragmented and land may have multiple owners. Land may also have irregularities in

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SEC Form 17-A

title, such as non-execution or non-registration of conveyance deeds, and may be subject to liens, encumbrances or claims of which the Company may be unaware. The difficulty of obtaining title guarantees in the Philippines means that title records provide only for presumptive rather than guaranteed title. As each transfer in a chain of title may be subject to a variety of defects, the Company‟s title and development rights over land may be subject to various defects of which it is unaware. For these and other reasons, title insurance is not readily available in the Philippines. Title defects may result in the loss of the Company‟s title over land. From time to time, the Company may be required to defend itself against third parties who claim to be the rightful owners of land that it acquires. If third-party claims for title are brought against the Company, or if any such claim involves land that is material to its projects, it may have to devote significant time and incur significant costs in defending itself against such claims. Such claims could also affect its ability to develop land for particular projects by causing the relevant governmental authority to delay or prevent continued business operations on the property or withhold required permits or clearances until such claim is definitively resolved. In addition, if any such claims are successful, the Company may have to either incur additional costs to settle such third-party claims or surrender title to land that may be material for its projects. In addition, title claims made by third-parties against the Company or its joint venture partners may have an adverse effect on its reputation. Any of the foregoing circumstances could have a material adverse effect on the Company‟s business, financial condition and results of operations, as well as on the Company‟s reputation. Any successful claim against the Company or its joint venture partners may affect its ability to deliver its developments on time and free and clear of any liens or encumbrances. The Company faces risks relating to its property development, including risks relating to project costs, completion time frame and development rights. The property development business involves significant risks distinct from those involved in the ownership and operation of established properties, including the risk that it may invest significant time and money in a project that may not attract sufficient levels of demand in terms of anticipated sales and which may not be commercially viable. In addition, obtaining required Government approvals and permits may take substantially more time and resources than anticipated or construction of projects may not be completed on schedule and within budget. In addition, the time and costs involved in completing the development and construction of real estate projects can be adversely affected by many factors, including shortages of materials, equipment and labor, adverse weather conditions, depreciation of the peso, natural disasters, disputes with contractors and subcontractors, accidents, changes in laws, land zoning, use and classification, or In Government priorities and other unforeseen problems or circumstances, and each of these could have an adverse effect on the Company‟s revenues. Where land to be used for a project is occupied by tenants or squatters, the Company may have to take steps, and incur additional costs, to remove such occupants and, if required by law, to provide relocation facilities for them. Any of these factors could result in project delays and cost overruns, which could negatively affect margins and delay when it recognizes revenue. Further, failure to complete construction of a project to its planned specifications or schedule may result in contractual liabilities to purchasers and lower returns. In addition, orders of the Department of Agrarian Reform allowing conversion of agricultural land for development may require a project to begin by a prescribed deadline. These events could materially and adversely affect the Company‟s business, financial condition or results of operations.

The Company’s reputation may be adversely affected if it does not complete projects on time

or to customers’ requirements. If the Company‟s projects experience construction or infrastructure failures, design flaws, significant project delays, quality control issues or other problems, this could have a negative effect on its reputation and make it more difficult to attract new customers to new and existing development projects. Any negative effect on its reputation could also adversely affect its ability to pre-sell its development projects. This in turn could adversely impact its capital investment requirements. Any of these events could adversely affect the Company‟s business, results of operations or financial condition.

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SEC Form 17-A

The Company operates in a highly-regulated environment and must obtain and maintain

various permits, licenses and other government approvals.

The Philippines rates in a highly-regulated environment and must obtain development of subdivision

and other residential projects is subject to a wide range of government regulations, which, while

varying from one locality to another, typically include zoning considerations as well as the

requirement to procure a variety of environmental and construction-related permits. In addition,

projects that are to be located on agricultural land must get clearance from the Department of

Agrarian Reform so that the land can be reclassified as nonagricultural land and, in certain cases,

tenants occupying agricultural land may have to be relocated at the developer‟s expense.

Presidential Decree No. 957, as amended, (PD 957), Republic Act No. 4726 (RA 4726) and Batas

Pambansa Blg. 220 (BP 220) are the principal statutes which regulate the development and sales of

real property as part of a condominium project or subdivision. PD 957, RA 4726 and BP 220 cover

subdivision projects for residential, commercial, industrial or recreational purposes and condominium

projects for residential or commercial purposes. The Housing and Land Use Regulatory Board

(HLURB) is the administrative agency of the Government which enforces these statutes. Regulations

applicable to its operations include standards regarding:

• the suitability of the site;

• road access;

• necessary community facilities

• open spaces;

• water supply

• sewage disposal systems;

• electricity supply;

• lot sizes;

• the length of the housing blocks;

• house construction;

• sale of subdivision lots or condominium units; and

• time of completion of construction projects.

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SEC Form 17-A

All subdivision and condominium development plans are required to be filed with and approved by the local government unit (LGU) with jurisdiction over the area where the project is located and by the HLURB. Approval of development plans is conditioned on, among other things, completion of the acquisition of the project site and the developer‟s financial, technical and administrative capabilities. Alterations of approved plans that affect significant areas of the project, such as infrastructure and public facilities, also require the prior approval of (1) the relevant LGU; (2) the HLURB; (3) for subdivisions, the duly organized homeowners association, or if none, the majority of the lot buyers; and (4) for condominiums, a majority of the registered owners. In addition, owners of or dealers in real estate projects are required to obtain licenses to sell before making sales or other dispositions of subdivision lots and housing and condominium units. The HLURB can suspend, cancel or revoke project permits and licenses to sell based on its own findings or upon complaint from an interested party. The Company is in the process of obtaining licenses to sell and building permits for some of its current projects. It may not be able to obtain these licenses and permits within the time period expected or at all. Any of the foregoing circumstances or events could impair the Company‟s ability to complete projects on time, within budget or at all, or sell units in its projects, which in turn could materially and adversely affect its business, financial condition and results of operations. Environmental laws applicable to the Company’s projects could have a material adverse effect on its business, financial condition or results of operations.

In general, developers of real estate projects are required to submit project descriptions to regional offices of the Department of Environment and Natural Resources (DENR). For environmentally-critical projects or for projects located in environmentally-critical areas as identified by the DENR, a detailed Environmental Impact Assessment (EIA) may be required and the developer will be required to obtain an Environmental Compliance Certificate (ECC) to certify that the project will not have an unacceptable environmental impact. Current or future environmental laws and regulations applicable to the Company could increase the costs of conducting its business above currently projected levels or require future capital expenditures. In addition, if a first violation of an ECC occurs or if environmental hazards on land where its projects are located cause damage or injury to buyers or any third party, the Company may be required to pay a fine, to incur costs in order to cure the violation and to compensate its buyers and any affected third parties, however, on subsequent violations, an ECC may be revoked and operations may be stopped. The Company cannot predict what environmental legislation or regulations will be amended or enacted in the future, how existing or future laws or regulations will be enforced, administered or interpreted, or the amount of future expenditures that may be required to comply with these environmental laws or regulations or to respond to environmental claims. The introduction or inconsistent application of, or changes in, laws and regulations applicable to the business could materially and adversely affect the Company‟s business, financial condition or results of operations. Natural or other catastrophes, including severe weather conditions, may materially disrupt operations, affect the ability to complete projects and result in losses not covered by insurance. The Philippines has experienced a number of major natural catastrophes over the years, including typhoons, floods, droughts, volcanic eruptions and earthquakes. Natural catastrophes may disrupt business operations and impair the economic conditions in the affected areas, as well as the overall Philippine economy. These factors could have significant adverse effects on the Company‟s development projects, which may be susceptible to damage. Damages resulting from natural catastrophes could also give rise to claims against the Company from third parties or from customers, for example, for physical injury or loss of property. As a result, the occurrence of natural or other catastrophes or severe weather conditions may adversely affect its business, financial condition and results of operations. Furthermore, the Company cannot obtain insurance at a reasonable cost or at all for certain types of losses from natural and other catastrophes. Neither does it carry any business interruption

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SEC Form 17-A

insurance. If an uninsured loss or a loss in excess of insured limits occurs, it could lose all or a portion of the capital invested in a property, as well as the anticipated revenue from such property, and incurs liabilities for any project costs or other financial obligations related to the business. Any material uninsured loss could materially and adversely affect the Company‟s business, financial condition and results of operations.

The Company uses third-party non-exclusive brokers to market and sell some of its projects. Although exclusive sales agents are responsible for a significant portion of the Company‟s sales, it also uses third-party non-exclusive brokers to market and sell some of its residential housing developments to potential customers inside and outside the Philippines. These brokers may also act as brokers for other developers in the same markets in which the Company operates, and they may favor the interests of their other clients over the Company‟s interests in sale opportunities, or otherwise fail to act in the Company‟s best interests. There is competition for the services of third-party brokers in the Philippines, and many of the Company‟s competitors either use the same brokers as it does or attempt to recruit brokers away from it. If a large number of these third-party brokers were to terminate or breach their brokerage agreements, the Company would need to seek other third-party brokers and it may not be able to do so quickly or in sufficient numbers. This could disrupt its business and negatively affect the Company‟s business, financial condition or results of operation.

The Company is exposed to risks relating to the ownership and operation of commercial real estate. The Company is subject to risks relating to ownership and management of commercial real estate. Specifically, the performance of its subsidiary CPMI could be affected by a number of factors, including:

• the national and international economic climate;

• trends in the commercial property industry;

• changes in laws and governmental regulations in relation to real estate;

• Increased operating costs;

• the inability to collect rent due to bankruptcy of tenants or otherwise;

• competition for tenants;

• changes in market rental rates;

• the need to periodically renovate, repair and re-let space and the costs thereof;

• the quality and strategy of management; and

• the Company‟s ability to provide adequate maintenance and insurance The Company could be further affected by tenants failing to comply with the terms of their leases or commitments to lease, declining sales turnover of tenants, oversupply of or reduced demand for commercial space or changes in laws and governmental regulations relating to real estate including those governing usage, zoning, taxes, and government charges. If the Company is unable to lease the properties that it owns or manages in a timely manner, or collect rent at profitable rates or at all, this could have a material adverse effect on its business, financial condition and results of operations. The change of policy regarding transactions subject to VAT could adversely affect the sales of the Company. Sales of residential lots with a gross selling price of P1,915,500 or less and sales of residential houses and lots with a gross selling price of P3,199,200 or less are currently not subject to VAT of 12%. If these sales become subject to VAT, the purchase prices for the Company‟s residential lots and housing units will increase, which could adversely affect its sales. Because VAT affects general

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SEC Form 17-A

levels of spending in the Philippines and the prices of subdivision lots and houses, any adverse change in the Government‟s VAT-exemption policy could have an adverse effect on the Company‟s results of operations. Increases in interest rates and changes in Government borrowing patterns and Government policies could adversely affect the Company’s and its customers’ ability to obtain financing. Increases in interest rates, and factors that otherwise impair the availability of credit, such as the Government‟s fiscal policy, could have a material adverse effect on the Company‟s business and demand for its property developments. For example:

• Higher interest rates make it more expensive for the Company to borrow funds to finance current projects or to obtain financing for new projects.

• Access to capital and the cost of financing are also affected by restrictions, such as the single borrower limit imposed by the BSP on bank lending. The total amount of loans, credit accommodations and guarantees that may be extended by a bank to any person, partnership, association, corporation or other entity shall at no time exceed 25% of the net worth of such bank. This may be increased by an additional 10% of the net worth of the bank provided that the additional liabilities are secured by trust receipts, shipping documents, warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-perishable goods which must be fully covered by insurance. If the Company reaches the single borrower limit with respect to any bank, it may have difficulty obtaining financing with reasonable interest rates from other banks.

• Because a substantial portion of customers procure financing to fund their property purchases, higher interest rates make financing, and therefore purchases of real estate, more expensive, which could adversely affect demand for the Company‟s residential developments.

• Increases in Government borrowing in the domestic currency market could increase the interest rates banks and other financial institutions charge and reduce the amount of financing available to the Company and prospective property purchasers of its property.

• Increased inflation in the Philippines could result in an increase in the costs of raw materials, which the Company may not be able to pass on to customers through increased prices.

• Increases in the Government‟s budget deficit could increase interest rates and inflation, which could in turn have a material adverse effect on its customers‟ ability to obtain financing on attractive terms. The occurrence of any of the foregoing events could have a material adverse effect on the Company‟s business, financial condition and results of operations.

Any restriction or prohibition on the Company’s Subsidiaries’ ability to distribute dividends would have a negative effect on its financial condition and results of operations. As a holding company, the Company conducts its operations through its Subsidiaries. As a result, it derives substantially all of its revenues from dividends from its Subsidiaries. It relies on these funds for compliance with its own obligations and for financing its Subsidiaries. Further, the ability of its Subsidiaries to upstream dividends is subject to applicable laws and may be subject to restrictions contained in loan agreements and other debt instruments they are party to. Any restriction or prohibition on the ability of any of the Subsidiaries to distribute dividends or make other distributions to the Company, either due to regulatory restrictions, debt covenants, operating difficulties or other limitations, could have a negative effect on its cash flow or therefore may adversely impact its financial condition and results of operations.

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SEC Form 17-A

A new accounting rule on the recognition of revenue may materially change the way the Company records revenue from the construction of real estate in its financial statements and could result in its revenue being lower and more volatile than under its current reporting method. Under PFRS, real estate companies such as the Company are allowed to recognize revenues from construction of real estate based on a percentage of completion method, wherein a portion of the sales price is recognized as revenue once a certain percentage of payment has been received from buyers, but before the real estate project‟s construction has been completed. The International Accounting Standards Board issued International Financial Reporting Standards (IFRS) 15, Revenue from Contracts with Customers, which is expected to be adopted by the Financial Reporting Standards Council. The new revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under PFRS. IFRS 15 could impact real estate companies to recognize, subject to certain exceptions, revenue from real estate only when construction of the real estate asset has been completed. If IFRS 15 is adopted, its application would be required beginning on 1 January 2017. If IFRS 15 takes effect, revenue and certain other items in the Company‟s financial statements may vary significantly from previously recorded amounts using its current revenue recognition policy. In addition, for periods in which it applies the new revenue recognition policy, the Company would expect that it would not count revenue recognized in previous periods under its current revenue recognition policy. Accordingly, its revenue in some future periods could be lower than they would otherwise be under IFRS 15 because it would have previously recognized revenue from pre-completion sales under its current policy. The adoption of IFRS 15 will also likely result in greater fluctuations in the Company‟s revenues in a given period, depending on the number of properties it is able to actually complete within such period. As a result, IFRS 15 may also affect the comparability of its future financial statements with those relating to prior periods. The adoption of IFRS 15 may also result in restatements to the Company‟s financial statements disclosed prior to the adoption of IFRS 15. As a result, there may be significant differences between its previously disclosed financial statements and any restated financial statements. These changes would adversely affect the comparability of its future financial statements with those relating to prior periods.

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SEC Form 17-A

The Company is subject to certain debt covenants. The Company has certain loan agreements, which contain covenants that limit its ability to, among other things:

• Incur additional long-term debt to the extent that such additional indebtedness results in a breach of the required debt-to-equity ratios;

• Materially change its nature of business;

• Encumber, mortgage or pledge some of its assets; and

• Pay out dividends in the event debt payments are in arrears and such debt payments will result in the breach of its required current and debt-to-equity ratios. Complying with these covenants may cause the Company to take actions that it otherwise would not take or not take actions that it otherwise would take. The Company‟s inability and/or failure to comply with these covenants would cause a default, which, if not waived could result in the debt becoming immediately due and payable. In the likelihood of this event, the Company may not be able to repay or refinance such debt on terms that are acceptable to it or at all.

The Company shall, at any given time, consider business combination alternatives. Although some of the Company‟s debt covenants contain certain restrictions on business combinations, it may consider engaging in certain types of business combinations. Business combinations involve financial and operational risks and could result in critical changes to the Company‟s business, management and financial condition.

The Company is exposed to interest rate, liquidity, credit and commodity risks. The Company‟s principal financial instruments consist of cash on hand and in banks, cash equivalents, receivables from installment sales and due from and to affiliated companies and credit facilities from commercial banks. It uses these financial instruments to fund its business operations. The Company has entered into Master Agreements under the International Swaps and Derivatives Association Inc. with third parties. The Company believes that the principal risks arising from its financial instruments are interest rate risk, liquidity risk, credit risk, commodity risk and currency risk. Interest Rate Fluctuations in interest rates could negatively affect the potential margins in respect of the Company sales of receivables and could make it more difficult for the Company to procure new debt on attractive terms or at all. The Company does not engage in interest rate derivative or swap activities to hedge its exposure to increases in interest rates. Fluctuations in interest rates also have an effect on demand for the Company‟s products. As most of its customers obtain some form of financing for their real estate purchases, increases in interest rate levels could adversely affect the affordability and desirability of the Company‟s subdivision lots and housing and condominium units. Liquidity The Company faces the risk that it will not have sufficient cash flows to meet its operating requirements and financing obligations when they become due. The Company manages its liquidity profile by pre-selling housing projects. In addition, the Company‟s receivables backed credit facilities with banks and other financial institutions under the terms of which the Company, from time to time, assign installment contract receivables on a “with recourse” basis. The Company is typically required to replace receivables assigned on a “with recourse” basis if the property buyer fails to pay three

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SEC Form 17-A

consecutive installments or when the sale is otherwise cancelled. If the Company is unable to maintain its credit lines with banks and other financial institutions, it may not have sufficient funds to meet its operational requirements. Credit Risk The Company is exposed to credit risk from defaults by purchasers on their mortgages during the pre-sale periods for its properties. In 2007, the Company began to guarantee the mortgages of purchasers of uncompleted projects. Accordingly, if a purchaser who has a mortgage on an uncompleted project defaults on the mortgage, and the Company is not able to find a replacement purchaser, or if the Company fails in an undertaking with the bank, including delivering the property and title to such property within the mutually agreed period, the Company is obligated to pay the mortgage. Commodity Risk The Company is exposed to the risk that prices for construction materials used to build its properties (including timber, cement and steel) will increase. These materials are global commodities whose prices are cyclical in nature and fluctuate in accordance with global market conditions. The Company and its Subsidiaries are exposed to the risk that they may not be able to pass increased commodities costs to customers, which would lower their margins. The Company does not engage in commodity hedging. Currency Risk Financial assets and credit facilities of the Group, as well as major contracts entered into for the purchase of raw materials, are mainly denominated in Philippine Peso. There are only minimal placements in foreign currencies and most of the Group‟s foreign currency-denominated debt are hedged. As such, the Group‟s foreign currency risk is minimal. The Company may suffer losses that are not covered by its insurance. The Company may be negatively affected due to the occurrence of typhoons, severe storms, earthquakes, floods, fires or other natural disasters or similar events. Although the Company carries an all-risk insurance policy for all its current and ongoing projects against catastrophic events and business interruption insurance for Century City Mall, in amounts and with deductibles that the Company believes are in line with general real estate industry practice, not all risks can be insured against. There are losses for which the Company cannot obtain insurance at a reasonable cost or at all. Should an uninsured loss or a loss in excess of insured limits occur, the Company could lose all or a portion of the capital invested in a property as well as the anticipated future turnover from the property. Any material uninsured loss could materially and adversely affect the Company‟s business, financial condition and results of operations.

1.7 CORPORATE SOCIAL RESPONSIBILITY Century Properties‟ corporate social responsibility activities for 2015 focused on providing shelters for the underprivileged. The Company has partnered with the non-profit organization Gawad Kalinga Community Development Foundation, Inc. (GK) to build the GK-Century Properties Village, a resettlement community in Hinahon Street, Barangka Drive, Mandaluyong City. Century Properties donated P5.0 million to GK to build thirty (30) housing units on a property donated by the Mandaluyong city government, for the benefit of the informal settler families of

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SEC Form 17-A

Hinahon. Construction started in November 2014 and went on until 2015. Target completion of the project is within 2016. GK Executive Director Jose Luis Oquinema said that the housing project marks a fresh start for the community. “The GK-Century Properties Village will not only bring positive changes in the community but will also serve as a symbol of a new beginning for residents of Hinahon.” In order to cultivate a sense of ownership and appreciation for the housing among beneficiaries, GK makes sure that they provide a minium of 1,000 man-hours in sweat equity before each unit is awarded to a family. Ed Crisostomo, Head GK Volunteer for Mandaluyong City and the GK-Century Properties Village construction said that sweat equity is important as it gives the beneficiaries a sense of price and encouragement to take good care of the homes that they had built. In addition to providing the funding for the housing construction, Century also pledged to work hand-in-hand with GK by sending employee volunteers to help with the building activities on site. Century Properties also continues to support Operation Smile, a private, not-for-profit volunteer medical services organization and worldwide children‟s medical charity headquartered in Norfolk, Virginia, U.S.A that provides reconstructive surgery and related health care to indigent children and young adults. Operation Smile‟s medical volunteers repair cleft lip, cleft palate and other childhood facial deformities while building public and private partnerships to provide training to health care professional and improve local capacity in partner countries. Century has donated more than P1.75 million to the cause, and continues to assist Operation Smile in raising funds to cover the cost of surgeries for Filipino children with cleft deformities. ITEM 2. PROPERTIES 2.1 OVERVIEW The Company is currently developing six master-planned communities that are expected to have 28 residential condominium buildings, three commercial buildings for lease, and 934 landed houses, with a total expected GFA (with parking) of 1,671,339 sq.m. In addition, the Company has agreed to purchase 50% of the usage and leasehold rights of Asian Century Center, an office building in Bonifacio Global City. Asian Century Center is currently being developed by Asian Carmaker Corporation. The six master-planned communities are:

• Century City – Century City is a 3.4-hectare mixed-use project in Makati City with eight buildings covering a total planned GFA (with parking) of 598,753 sq.m. and targets the middle income and luxury markets. As of December 2015, the Company has completed the Gramercy Residences, the Knightsbridge Residences, Century City Mall, Centuria Medical Makati, and The Milano Residences with interiors designed by Versace Home. Ongoing projects at Century City are Trump Tower, Century Spire and The Forbes Media Tower. These projects have estimated completion dates through 2019.

• Acqua Private Residences – Acqua Private Residences is located in Mandaluyong City and comprises six towers with a total planned GFA (with parking) of 227,502 sq.m. The development targets the middle income market. Its amenities will include a country club with fitness, retail, dining and entertainment facilities, as well as what is expected to be the first river walk promenade in the Philippines. This project has estimated completion dates from 2015 up to 2019.

• Azure Urban Resort Residences – Azure Urban Resort Residences is the Company‟s first project in the affordable market segment. It is a nine building residential property located in Parañaque City. The development covers a total planned GFA (with parking) of 332,665 sq.m. and features the first manmade beach in an urban residence of its scale in the Philippines and a beach

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SEC Form 17-A

club designed by Paris Hilton. The first three buildings have been completed, and the remaining six buildings are estimated to be completed through 2018.

• Commonwealth – Commonwealth is the Company‟s first master-planned residential community on a 4.4 hectare property in Quezon City and is comprised of eight towers. The development targets the affordable market segment. It has a total planned GFA (with parking) of 192,245 sq.m. It is within close proximity to a shopping centre, top schools, technology hubs, churches and major thoroughfares. This project has completion dates ranging from 2015 to 2019.

• Canyon Ranch – Canyon Ranch is a 25-hectare house and lot community that is part of the 77-hectare San Lazaro Leisure Park in Cavite City and targets middle-income buyers. The total planned GFA (with parking) is 280,300 sq.m. The community features a clubhouse with sports and leisure facilities and offers residents views of the Leisure Park which includes one of only two operating horse racing tracks in the Philippines. As of December 31, 2015, 848 units have been completed while construction of the remaining 28 units is on-going. In addition, there are 33 lots remaining out of 50 lots that are available for sale.

• Azure North – Azure North is the Company‟s first foray outside of Metro Manila. The project, located within the San Fernando Interchange on Jose Abad Santos and the North Luzon Expressway, is envisioned as a town center project. It will have residential towers, as well as office and retail components. Two towers have been launched at the site to date, with total GFA of 82,409 sq.m. (with parking), which is comprised of 1,360 units.

2.2 COMPLETED PROJECTS AS OF DECEMBER 31, 2015

Residential Projects

Location

Type

GFA in sq.m. (with parking)

Units

Year

Completed

Gramercy Residences Makati City Residential 121,595 1,428 2012

Knightsbridge Residences Makati City Residential 87,717 1,328 2013

Rio Parañaque City Residential 42,898 756 2013

Santorini Parañaque City Residential 36,126 553 2013

St. Tropez Parañaque City Residential 36,260 580 2013

Milano Makati City Residential 64,304 511 2015

Positano Parañaque City Residential 34,817 597 2015

Niagara Mandaluyong City


Sutherland Mandaluyong City


Osmeña West Quezon City Residential 14,525 158 2015

Total 513,656 7,120

Commercial / Office Projects

Location

Type

GFA in sq.m. (with parking)

Units

Year Completed

Century City Mall Makati City Retail 52,233 N/A 2013

Centuria Medical Makati Makati City Medical Office 74,103 584 2014

Total 126,336

Note: Excluding projects completed by Meridien

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SEC Form 17-A

2.3 PROPERTIES UNDER MANAGEMENT AS OF DECEMBER 31, 2015

The Company manages both residential and commercial properties. The following table sets forth information regarding residential properties under our management. RESIDENTIAL PROPERTIES

Project Location Developer

GFA

(sq.m.)

Astoria Plaza Condominium Pasig Millennium Properties & Brokerage 53,767

Acqua Private Residences Mandaluyong Century Limitless Corporation 26,410

Azure Urban Residences Parañaque Century Limitless Corporation 79,196

Bel-Air Soho Condominium Makati City Meridien East Realty & Development Corp. 9,468

BSA Suites Condominium Makati City ASB Development Corp. 22,925

Canyon Ranch Estate Carmona, Cavite Century Communities Corporation 83,889

Essensa East Forbes Taguig Meridien East Realty & Development Corp. 115,000

Golden Empire Tower Manila Moldex Land Holdings 129,514

Goldland Plaza Condominium San Juan Goldland Development & Realty Group 54,524

Grand Soho Makati Condominium Makati City Century Properties, Inc. 29,628

Knightsbridge Condominium Makati City Century City Development Corporation 43,414

Le Triomphe Condominium Makati City Meridien East Realty & Development Corp. 20,239

Paragon Plaza Mandaluyong Fil Estate Properties, Inc. 71,631

Pioneer Highlands North Mandaluyong Universal Rightfield Property Holdings, Inc. 89,990

Skyway Twin Towers Pasig Amberland Corporation 95,417

Soho Central Condominium Mandaluyong Meridien East Realty & Development Corp. 64,816

South of Market Condominium Taguig Meridien East Realty & Development Corp. 62,246

The Gramercy Residences Makati City Century City Development Corporation 121,595

Tiffany Place Condominium Makati City River Oaks Realty Corporation 24,702

Two Lafayette Square Makati City Megaworld Properties & Holdings, Inc. 17,189

West of Ayala Condominium Makati City Meridien East Realty & Development Corp. 57,752

Subtotal 1,273,312

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SEC Form 17-A

COMMERCIAL PROPERTIES

Project Location Developer

GFA (sq.m.)

139 Corporate Center Makati City Antel Realty & Development Corporation 24,426

88 Corporate Condominium Makati City Belgen Realty Development, Inc. 37,677

Asian Development Bank – Clark Pampanga Asian Development Bank 2,000

Asian Development Bank – Headquarters Mandaluyong Asian Development Bank 204,092

AvecShares Asia, Inc. Taguig Avecshares Asia, Inc. 12,232

BPI Buendia Center Makati City Bank of the Philippine Islands 61,262

Century City Lifestyle Mall Makati City Century City Development Corporation 52,233

Centuria Medical Makati City Centuria Medical Development Corporation 45,103

Fisher-Rosemount Systems, Inc. Pasig Amberland Corporation 7,378

Globe IT Plaza Cebu Cebu Globe Telecom, Inc. 12,678

Globe Telecom Avatar Cavite Globe Telecom, Inc. 3,085

Globe Telecom Valero Makati City Globe Telecom, Inc. 29,340

Innove Plaza Condominium Cebu Prosperity Properties & Management

Corporation 12,031

Makati Cinema Square Makati City MCS Condominium Corporation 20,000

Makati Medical Center Makati City Medical Doctors, Inc. 90,467

Medical Plaza Ortigas Pasig Meridien Property Ventures, Inc. 34,642

One Corporate Center Ortigas Pasig Amberland Corporation 117,799

One Corporate Plaza Makati City Inchport Realty Corporation 12,034

One Magnificent Mile Condominium Pasig Meridien Far East Properties 23,105

One San Miguel Avenue Condominium Pasig Amberland Corporation 64,577

Pacific Star Building Makati City Penta Pacific Realty Corporation 95,302

PNB Financial Center Pasay Philippine National Bank 151,435

Prestige Tower Condominium Pasig Amberland Corporation 58,698

Singapore Embassy Taguig 4,900

Solar Century Tower Makati City Solar Entertainment Corporation 5,265

Times Plaza Condominium Makati City RHL Properties & Development 35,820

Union Bank Plaza Pasig 76,893

Subtotal 1,294,474

TOTAL GFA 2,567,786

TOTAL PROJECTS 48

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SEC Form 17-A

2.4 PROJECT UPDATES AS OF DECEMBER 31, 2015

Project Company Type

Target

Market Location

Total GFA

(sq.m.)

Projected

Turnover

Gramercy Residences

CCDC Residential Middle-

Income

Kalayaan

Avenue, Makati City

121,595 2012

Knightsbridge Residences

CCDC Residential Middle- Income

Kalayaan Avenue, Makati City

87,717 2013

The Milano Residences

CCDC Residential Luxury Kalayaan Avenue,

Makati City

64,304 2015

Centuria Medical Makati

CCDC Office Middle-

Income

Kalayaan

Avenue, Makati City

74,103 2014

Trump Tower Manila CCDC Residential Luxury Kalayaan

Avenue, Makati City

55,504 2016

Century Spire CCDC Residential Luxury Kalayaan

Avenue, Makati City

100,762 2018

Century City Mall CCDC

Retail N/A Kalayaan Avenue, Makati City

52,233 2013

Acqua Private Residences

CLC Residential Middle- Income

Banrangay Hulo, Mandaluyong City

227,502 2015 - 2018

Azure Urban Resort Residences

CLC Residential Affordable Barangay Marcelo, Bicutan,

Parañaque City

332,665 2013 - 2018

The Resort Residences at

Azure North(1)

CLC Residential Affordable San Fernando Pampanga

82,409 2019

The Residences at Commonwealth

CLC Residential Affordable Commonwealth, Quezon City

192,245 2015 – 2019

Canyon Ranch CCC Residential Middle-

Income Carmona, Cavite

280,300 Ongoing per house

Total 1,671,339

(1) Represents first two (2) buildings only.

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SEC Form 17-A

2.5 COMPANY OWNED PROPERTIES The Company does not have any property other than its equity participation in its subsidiaries. The Company‟s subsidiaries, on the other hand, owns assets mainly land and buildings in property development. ITEM 3. LEGAL PROCEEDINGS As of December 31, 2015, the directors and key officers of the Company have no material pending civil or criminal cases filed by or against them. From time to time, the Company and its Subsidiaries, its Board of Directors and Key Officers are subject to various civil, criminal and administrative lawsuits and other legal actions arising in the ordinary course of our business. Typical cases include adverse claims over title to land, claims for recovery of money and damages and claims for cancellations of sales agreements and refund of deposits. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Other than those stated herein, there are no other matters submitted to a vote of security holders during the fiscal year covered by this report.

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SEC Form 17-A

PART II. OPERATIONAL AND FINANCIAL INFORMATION ITEM 5. MARKET FOR COMPANYCOMPANY INFORMATIONORMATIONther matters submitte 5.1 MARKET INFORMATION The shares of the Company consist solely of common shares, which are presently being traded in the Philippine Stock Exchange, Inc. The high and low sales prices for the shares of the Company for each quarter within the last three (3) fiscal years are as follows:

2015 High Low

First quarter P1.04 P0.92

Second quarter 0.96 0.79

Third quarter 0.86 0.55

Fourth quarter 0.65 0.54

2014

High Low





2013

High Low





As of December 29, 2015, the last trading day of the Company‟s shares for the fourth (4

th) quarter of

the year 2015, the Company‟s closing share price is P0.56 per share.

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SEC Form 17-A

5.2 STOCKHOLDERS The number of shareholders of the Company of record as of December 31, 2015 was Four Hundred Eighty Four (484). The number of issued and outstanding common shares of the Company as of December 31, 2015 are Eleven Billion Six Hundred Ninety Nine Million Seven Hundred Twenty Three Thousand Six Hundred Ninety (11,699,723,690). All shares of the Company are common stock. The top 20 stockholders as of December 31, 2015 are as follows:

Name Number of Shares Held % to Total

1. Century Properties Inc. 7,806,788,243 67.302

2. PCD Nominee Corporation ( Non-Filipino ) 2,118,073,267 18.260

3. PCD Nominee Corporation ( Filipino ) 1,652,997,712 14.250

4. Ernesto B. Lim 12,669,508 0.109

5. Victor S. Chiongbian 4,022,064 0.035

6. Antonio Andres Chua 1,447,943 0.012

7. Antonio A. Inductivo 723,959 0.006

8. Vicente Goquiolay & Co., Inc. 395,288 0.003

9. Magdaleno B. Delmar, Jr. 361,458 0.003

10. Quality Investments & Securities Corporation 301,654 0.003

11. Pacifico B. Tacub 150,661 0.001

12. Roman T. Yap 144,794 0.001

13. Antonio C. Cuyos 139,223 0.001

14. Alfredo B. Chia 120,661 0.001

15. Milagros Ileto 120,661 0.001

16. Orifiel Y. Barredo 79,272 0.001

17. Tee Ling Kiat &/or Lee Lin Ho 72,397 0.001

18. Roberto Melo 52,125 0.000

19. Milagros Cicio 48,264 0.000

20. Marcelo E. Ayes 36,198 0.000

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SEC Form 17-A

5.3 DIVIDENDS The Company declares dividends yearly, either through Cash or Stock, to shareholders of record, which are paid from the Company‟s unrestricted retained earnings. Below is the summary of CPGI‟s dividend declaration for fiscal year 2012 and 2013.

Cash Dividends

Fiscal Year Total Amount of Dividends

Amount of dividends per share

Date of Declaration

Date of Payment

2012 PhP184,436,193 0.019024 per share April 15, 2013 May 16, 2013

2013 PhP184,471,576 0.0190 per share April 30, 2014 June 5, 2014

2014 PhP201,158,909 0.0173418822 per share

June 15, 2015 July 16, 2015

Stock Dividends

Fiscal Year Total Number of Shares

Dividend rate Date of Declaration

Date of Payment

2013 1,999,999,993

shares

20.661985% October 13, 2014 November 14, 2014

Dividend Policy CPGI intends to maintain an annual cash dividend payment ratio for the issued and outstanding common shares of the Company of approximately 10% of its consolidated net income from the preceding fiscal year, subject to the requirements of applicable laws and regulations, availability of unrestricted retained earnings and the absence of circumstances which may restrict the payment of such dividends. 5.4 RECENT SALES OF UNREGISTERED OR EXEMPT SECURITIES, INCLUDING RECENT ISSUANCE OFSECURITIES CONSTITUTING AN EXEMPT TRANSACTION On March 05, 2013, the Company entered into a Placement and Subscription transaction with its Parent Company, wherein CPI sold 800,000,000 million shares of stock in CPGI to investors (“Placing Transaction”) and subscribe for an additional 800,000,000 CPGI shares (“Subscription Transaction”) of stock at closing date on March 11, 2013.

________________________________________________________________________


SEC Form 17-A

ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RESULTS OF OPERATIONS Real Estate The Group accounts for real estate revenue from completed housing and condominium units and lots using the full accrual method. The Group uses the percentage of completion method, on a unit by unit basis, to recognize income from sales where the Group has material obligations under the sales contract to complete after the property is sold. Under this method, revenue is recognize as the related obligations are fulfilled, measured principally in relation to actual costs incurred to date over the total estimated costs. The Group typically requires payment of 20% to 50% of the total contract price, depending on the type of property being purchased, and buyers are given the duration of the construction period to complete such payment. For the year ended December 31, 2015, the Group recorded revenue from real estate sales amounting to P7,751.3 million compared to P10,822.9 million in 2014. The decrease in real estate sales is attributable to less revenue recognized in 2015 for projects that turned over in 2015 and prior years. A significant portion of revenue from these projects were already recognized in 2014 and prior years. In addition, there were less project launches in 2015. Interest and Other Income, including Gain from change in fair value Interest and other income increased by 39.8% to P2,020.8 million in the year ended December 31, 2015 from P1,445.1 million in the year ended December 31, 2014. This increase was due primarily to non-cash accretion of unamortized discounts reflecting increased revenue from real estate sales during the year. Moreover, gain from change in fair value of investment properties amounting to P755.6 million was recognized during the year. Investment properties are stated at fair value, which has been determined based on valuations performed by Cuervo Appraisers, Inc. and Colliers International, an accredited independent valuers, as of December 31, 2015 and 2014. Property management fee and other services Property management fee and other services increased by 4.1% to P297.4 million in the year ended December 31, 2015 from P285.7 million in the year ended December 31, 2014. The increase was primarily due building decreased from 55 to 54 and management fee rate escalations for some of the projects under management ranging from 5% to 10%. The number of buildings under management as of December 31, 2015 is 54 from 55 as of December 31, 2014. Leasing Revenue Leasing revenue increased to P311.7 million in the period ended December 31, 2015 from P207.0 million in the same period ended December 31, 2014 since operation of Century City Mall started only subsequent to March 2014. A full year of mall operations was recognized in 2015. Costs and Expenses Cost and expenses decreased by 14.0% to P8,251.0 million during 2015 from P9,589.7 million for the year ended December 31, 2014. • Cost of real estate sales decreased by 24.2% from P6,342.6 million in the year ended December

31, 2014 to P4,808.6 million in the year ended December 31, 2015. This is directly related to the decrease in real estate revenue.

• Cost of leasing increased by 41.2% to P153.5 million for the year ended December 31, 2015 from P108.7 million in the year ended December 31, 2014. This is the direct cost incurred in relation to the operation of the Century City Mall, which is also directly related to the increase in mall operating months.

• Interest and other financing charges increased by 68.4% to P340.6 million for the year ended

December 31, 2015 from P202.2 million for 2014. This was primarily due to bank fees and other

________________________________________________________________________


SEC Form 17-A

financing charges paid other than capitalized borrowing costs during the year. Unrealized foreign exchange loss amounting to P114.8 million in 2015 also contributed to such increase.

Provision for Income Tax Provision for income tax decreased by 39.6% to P611.3 million in the year ended December 31, 2015 from P1,012.2 million in the year ended December 31, 2014. The decrease was primarily due to relative decrease in the revenue generated from real estate sale during the year ended December 31, 2015 as compared to prior year ended December 31, 2014. Net Income As a result of the foregoing, net income decreased by 29.6% to P1,519.0 million for the year ended December 31, 2015 from P2,158.9 million in the year ended December 31, 2014.

________________________________________________________________________


SEC Form 17-A

FINANCIAL CONDITION As of December 31, 2015 vs. December 31, 2014 Total assets as of December 31, 2015 were P37,478.9 million compared to P31,650.2 million as of December 31, 2014, or a 18.4% increase. This was due to the following: • Cash and cash equivalents increased by P579.1 million from P1,429.2 million as of December

31, 2014 to P2,008.3 million as of December 31, 2015 primarily due to collections from real estate receivables and availments of short-term and long-term debts and improvement on the operating cash flows during the year.

• Receivables increased by 11.7% from P11,936.0 million as of December 31, 2014 to P13,337.8 million as of December 31, 2015 million due to the revenue recognized during for the period pursuant to increase in pre-sales, in addition to the policies and estimates pursuant to the collectability of sales price and percentage of completion methods.

• During the year ended December 31, 2015, real estate inventories increased by 37.6% from P8,083.6 million to P11,124.8 million due to development of various projects during the period.

• Investment properties posted an increase of 19.9% to P5,260.1 million as of December 31, 2015 as compared to P4,387.8 million as of December 31, 2014 primarily due to other costs incurred for Forbes and Fort Projects. Increase in fair value of these assets also contributes to the increase in investment property.

Total liabilities as of December 31, 2015 were P22,845.0 million compared to P18,345.8 million as of December 31, 2014, or a 24.5% increase. This was due to the following: • Accounts and other payables creased by 25.4% from P1,730.2 million as of December 31, 2014

to P2,169.0 million as of December 31, 2015 due to accruals made at the end of the year. • Short-term and long-term debt representing the sold portion of the Company‟s installment

contracts receivables with recourse, syndicated loans and bi-lateral term loans increased by 35.9% from P8,274.2 million as of December 31, 2014 to P11,248.5 million as of December 31, 2015 due to increased net availments or net draw down from existing and new lines during the 2015.

• Pension liabilities increased by 8.1% from P191.3 million as of December 31, 2014 to P206.7

million as of December 31, 2015 as a result accrual of pension expense during the period. • Income tax payable increased by 732.1% from P16.9 million as of December 31, 2014 to P140.5

million as of December 31, 2015 primarily due to creditable withholding taxes that were not yet reflected as part of tax payments in 2015.

Total stockholder‟s equity net increased by 10.0% to P14,633.9 million as of December 31, 2015 from P13,304.4 million as of December 31, 2014 due to the net income recorded during the year net of CPGI‟s cash dividend declarations during the year.

________________________________________________________________________


SEC Form 17-A

Notes:

(1) Return on assets is calculated by dividing net income for the period by average total assets (beginning plus end of the period divided by two).

(2) Return on equity is calculated by dividing net income for the period by average total equity (beginning plus end of the

period divided by two). (3) EBIT is calculated as net income after adding back interest expense and provision for income tax. EBITDA is

calculated as net income after adding back interest expense, depreciation and amortization and provision for income

tax. (4) Net debt is calculated as total debt less cash and cash equivalents as of the end of the period. (5) Gross profit from real estate sales margin is calculated as the sum of real estate sales and accretion of unamortized

discount (which we record under interest and other income), less the cost of real estate sales, as a percentage of the sum of real estate sales and accretion of unamortized discount, for the period. We believe that including accretion of unamortized discount in this calculation is a useful measure of the profitability of our real estate operations because

such unamortized discount forms part of the original contract price of the sales contracts. (6) Net margin is calculated as net income as a percentage of revenue for the period. (7) Net debt-to-equity ratio is calculated as net debt divided by total equity as of the end of the period.

(8) Debt-to-EBITDA ratio is calculated as total debt as of the end of the period divided by EBITDA for the period calculated on an annualized basis.

(9) Net debt to EBITDA ratio is calculated as net debt as of the end of the period divided by EBITDA for the period

calculated on an annualized basis. (10) This ratio is obtained by dividing the Current Assets of the Group by its Current liabilities. This ratio is used as a test of

the Group’s liquidity.

2015 2014 2013

Current Ratio 2.8x 2.7x 2.0x

Debt to Equity Ratio 1.0x 0.8x 0.5x

Asset to Equity Ratio 2.6x 2.4x 2.3x

2015 2014 2013

Return on Assets 4.4% 7.5% 8.2%

Return on Equity 10.9% 17.5% 18.8%

EBIT 2,202.3 3,187.8 2,746.5

EBITDA 2,259.0 3,249.0 2,810.0

Total Debt 13,916.0 10,931.5 6,039.1

Net Debt 11,907.7 9,502.2 4,600.3

Gross Profit from Real Estate Sales Margin 43.8% 45.6% 42.1%

Net Income Margin 14.6% 16.9% 17.1%

Net debt-to-equity ratio 0.8x 0.7x 0.4x

Debt-to-EBITDA ratio 6.2x 3.4x 2.1x

Net debt-to-EBITDA ratio 5.3x 2.9x 1.6x

As of December 31

For the year ended December 31

________________________________________________________________________


SEC Form 17-A

Material Changes to the Company’s Balance Sheet as of December 31, 2015 compared to December 31, 2014 (increase/decrease of 5% or more) Cash and cash equivalents increased by P579.08 million from P1,429.2 million as of December 31, 2014 to P2,008.3 million as of December 31, 2015 primarily due to availments of short-term and long-term debts and improvement on the operating cash flows during the year. Receivables increased by 11.7% from P11,936.0 million as of December 31, 2014 to P13,337.8 million as of December 31, 2015 million due to the revenue recognized during for the period pursuant to increase pre-sales, in addition to the policies and estimates pursuant to the collectability of sales price and percentage of completion methods. During the year ended December 31, 2015, real estate inventories increased by 37.6% from P8,083.6 million to P11,124.8 million due to development of various projects during the period. Land held for future development decreased by 9.1% from P474.6 million as of December 31, 2014 to P431.3 million as of December 31, 2015 due to transfer of current portion of land held for future development on Acqua 6 to real estate inventory. Advances to suppliers and contractors increased by 19.7% from P1,014.9 million as of December 31, 2014 to P1,214.4 million as of December 31, 2015 primarily due to advances made by the Group to its suppliers at the end of the period. Prepayments and other current assets (including derivative assets) increased by 7% from P1,609.0 million as of December 31, 2014 to P1,721.3 million as of December 31, 2015 mainly due to change in fair value of derivative asset. Deposits for purchased land increased by 24% from P710.9 million as of December 31, 2014 to P881.4 million as of December 31, 2015 due to payments made to property owners for the acquisition of parcels of land in Quezon City, Metro Manila, San Fernando, Pampanga, Novaliches, Metro Manila and Batulao, Batangas. Investment properties posted an increase of 19.9% to P5,260.1 million as of December 31, 2015 as compared to P4,387.8 million as of December 31, 2014 primarily due to other costs incurred for Forbes and Fort Projects. Increase in fair value of these assets also contributes to the increase in investment property. Property and equipment increased by 57.2% from P121.8 million as of December 31, 2014 to P191.5 million as of December 31, 2015 due the transfer of real estate inventories to property and equipment as part of construction-in-progress during the year. Other non-current assets decreased by 43.6% from P1,203.8 million as of December 31, 2014 to P679.4 million as of December 31, 2015 due to amortization of expenses associated with projects with no completion in 2014 which commenced construction in 2015. Accounts and other payables creased by 23.8% from P1,730.2 million as of December 31, 2014 to P2,142.7 million as of December 31, 2015 due to accruals made at the end of the year. Short-term and long-term debt representing the sold portion of the Company‟s installment contracts receivables with recourse, syndicated loans and bi-lateral term loans increased by 35.9% from P8,274.2 million as of December 31, 2014 to P11,248.5 million as of December 31, 2015 due to increased net availments or net draw down from existing and new lines during the 2015. Liability from purchased land increased by P606.8 million from P33.6 million as of December 31, 2014 to P640.4 million as of December 31, 2015 due to recognition of land and its corresponding liability of San Fernando, Pampanga property as well as the recognition of liability from Azure Project.

________________________________________________________________________


SEC Form 17-A

Pension liabilities increased by 8.1% from P191.3 million as of December 31, 2014 to P206.7 million as of December 31, 2015 as a result accrual of pension expense during the period. Income tax payable increased by 732.1% from P16.9 million as of December 31, 2014 to P140.5 million as of December 31, 2015 primarily due to creditable withholding taxes that were not yet reflected as part of tax payments in 2015. Deferred tax liabilities (net of deferred tax assets) increased 14.9% from P2,160.0 million as of December 31, 2014 to P2,481.7 million as of December 31, 2015 due to additional future taxable items during the period. Total stockholder‟s equity net increased by 10.0% to P14,633.9 million as of December 31, 2015 from P13,304.4 million as of December 31, 2014 due to the net income recorded during the year net of CPGI‟s cash dividend declarations during the year.

________________________________________________________________________


SEC Form 17-A

Material Changes to the Company’s Statement of income for the year ended December 31, 2015 compared to the year ended December 31, 2014 (increase/decrease of 5% or more) Real estate revenue posted a decrease by 17.0% for the year ended December 31, 2015 from P10,822.9 million in 2014 to P7,751.3 million in 2015.The decrease in real estate sales is attributable to less revenue recognized in 2015 for projects turned over in 2015 and prior years. A significant portion of revenue from these projects were already recognized in 2014 and prior years. In addition, there were less new project launches in 2015. Interest and other income increased by 39.8% to P2,020.8 million in the year ended Decembercember.8% to P2,020.8 million in the year ended Decemberoj 31, 2014. This increase was due primarily to non-cash accretion of unamortized discounts reflecting increased revenue from real estate sales during the year. Moreover, gain from change in fair value of investment properties amounting to P755.6 million was recognized during the year. Investment properties are stated at fair value, which has been determined based on valuations performed by Cuervo Appraisers, Inc. and Colliers International, an accredited independent valuers, as of December 31, 2015 and 2014. Property management fee and other services increased by 4.1% to P297.4 million in the year ended December 31, 2015 from P285.7 million in the year ended December 31, 2014. The increase was primarily due building decreased from 55 to 54 and management fee rate escalations for some of the projects under management ranging from 5% to 10%. The number of buildings under management as of December 31, 2015 is 54 from 55 as of December 31, 2014. Leasing revenue increased to P311.7 million in the period ended December 31, 2015 from P207.0 million in the same period ended December 31, 2014 since operation of Century City Mall started only subsequent to March 2014. Full year of mall operation were recognized during 2015. Cost and expenses decreased by 14.0% to P8,251.0 million during 2015 from P9,589.7 million for the year ended December 31, 2014. Cost of real estate sales decreased by 24.2% from P6,342.6 million in the year ended December 31, 2014 to P4,808.6 million in the year ended December 31, 2015. This is directly related to the decrease in real estate revenue. Cost of leasing increased by 41.2% to P153.5 million for the year ended December 31, 2015 from P108.7 million in the year ended December 31, 2014. This is the direct cost incurred in relation to the operation of the Century City Mall which is also directly related to the increase in mall operating months.

Interest and other financing charges increased by 68.4% to P34.59 million for the year ended December 31, 2015 from P202.2 million for 2014. This was primarily due to bank fees and other financing charges paid other than capitalized borrowing costs during the year. Unrealized foreign exchange loss amounting to P114.8 million also contributed to such increase. Provision for income tax decreased by 39.6% to P611.3 million in the year ended December 31, 2015 from P1,012.2 million in the year ended December 31, 2014. The decrease was primarily due to relative decrease in the revenue generated from real estate sale during the year ended December 31, 2015 as compared to prior year ended December 31, 2014.

As a result of the foregoing, net income decreased by 29.6% to P1,519.0 million for the year ended December 31, 2015 from P2,158.9 million in the year ended December 31, 2014.

________________________________________________________________________


SEC Form 17-A

REVIEW OF YEAR END 2014 VS YEAR END 2013 RESULTS OF OPERATIONS Real Estate The Group account for real estate revenue from completed housing and condominium units and lots using the full accrual method. The Group uses the percentage of completion method, on a unit by unit basis, to recognize income from sales where the Group has material obligations under the sales contract to complete after the property is sold. Under this method, revenue is recognize as the related obligations are fulfilled, measured principally in relation to actual costs incurred to date over the total estimated costs. The Group typically requires payment of 20% to 50% of the total contract price, depending on the type of property being purchased, and buyers are given the duration of the construction period to complete such payment. For the year ended December 31, 2014, the Group recorded revenue from real estate sales amounting to P10,822.9 million and posted an increase of 16.3% from P9,304.2 million in 2013. The increase in revenue is attributable to increased sales among its projects, and during the year, the Group completed building the St. Tropez Tower of Azure Residences. Increased construction accomplishments of other Century City Towers such as Milano Residences, Trump Tower Manila, Positano, Miami, Maldives and Maui Buildings of Azure Project; Niagara, Sutherland, Dettifoss and Livingstone Buildings of Acqua Project; and, Osmeña West, Quezon North, Osmeña East and Roxas East Buildings of Commonwealth Project also contributed to the growth in revenues. Furthermore, in the process of applying the Company‟s accounting policies, management has made certain judgments and estimates. One of these estimates is the collectability of the sales prices, which prompts the recognition of the Company‟s sales. As of December 31, 2014, in determining whether the sales price is collectible, the Company considers that the initial and continuing investments by a buyer of 5% of the sales price would demonstrate such buyer‟s commitment to pay. This threshold was changed from 10% as of December 31, 2013. Buyers‟ credit standings, past due amounts, sales returns, as well as adopting equity requirements closer to prevailing industry practices in recognizing realized sales prompted the Company to revise the basis of estimating the level of buyers‟ payments wherein it is probable that economic benefits will flow to the Company. The change in this estimate resulted to an increased in the Company‟s real estate sales by P1,770.9 million (with an additional P452.9 million interest income from accretion) for the year ended December 31, 2014. The effect of this change in future periods cannot be estimated. Interest and Other Income Interest and other income increased by 15.6% to P1,445.1 million in the year ended Decembercember.6% to P1,445.1 million in the year endnded December 31, 2013. This increase was due primarily to non-cash accretion of unamortized discounts reflecting increased revenue from real estate sales during the year. Moreover, gain from change in fair value of investment properties amounting to P147.3 million was recognized during the year. Investment properties are stated at fair value, which has been determined based on valuations performed by Cuervo Appraisers, Inc., an accredited independent valuer, as of December 31, 2014 and 2013. Property management fee and other services Property management fee and other services increased by 12.3% to P285.7 million in the year ended December 31, 2014 from P254.4 million in the year ended December 31, 2013. The increase was primarily due to the additional buildings under management and management fee rate escalations for some of the projects under management ranging from 5% to 10%. The number of buildings under management as of December 31, 2014 is 58 from 55 as of December 31, 2013. Leasing Revenue In 2014, Century City Mall commenced its operations. This contributed additional revenue amounting to P207.0 million on the Group‟s total revenue for the year ended December 31, 2014.

________________________________________________________________________


SEC Form 17-A

Costs and Expenses Cost and expenses increased by 18.5% to P9,589.7 million during 2014 from P8,091.9 million for the year ended December 31, 2013. • Cost of real estate sales increased by 10.0% from P5,766.9 million in the year ended December

31, 2013 to P6,342.6 million in the year ended December 31, 2014. This was primarily due to the corresponding growth in revenue from real estate sales.

• Cost of services increased by 16.0% to P215.4 million for the year ended December 31, 2014

from P185.6 million in the year ended December 31, 2013. This was primarily due to corresponding growth in property management and other service fees.

• Cost of leasing amounting to P108.7 million is the direct cost incurred in relation to the operation of the Century City Mall in the year 2014.

• General, administrative and selling expenses increased by 33.2% to P2,720.7 million in the year

ended December 31, 2014 from P2,041.9 million in the year ended December 31, 2013. The increase was primarily due to increased amortization of deferred marketing expenses given more projects are undergoing construction and development.

• Interest and other financing charges increased by 107.5% to P202.2 million for the year ended

December 31, 2014 from P97.5 million for 2013. This was primarily due to bank fees and other financing charges paid other than capitalized borrowing costs during the year. Unrealized foreign exchange loss amounting to P77.5 million also contributed to such increase.

Provision for Income Tax Provision for income tax increased by 16.0% to P1,012.2 million in the year ended December 31, 2014 from P872.5 million in the year ended December 31, 2013. The increase was primarily due to collections on new sales during the period as well as from amortization of accounts sold in previous year. Also, the increase is due to additional taxable income generated from the Century City Mall during the period. Net Income As a result of the foregoing, net income increased by 17.0% to P2,158.9 million for the year ended December 31, 2014 from P1,844.7 million in the year ended December 31, 2013. FINANCIAL CONDITION As of December 31, 2014 vs. December 31, 2013 Total assets as of December 31, 2014 were P31,650.2 million compared to P26,166.0 million as of December 31, 2013, or a 21.0% increase. This was due to the following: • Cash and cash equivalents slightly decreased by P9.6 million from P1,438.9 million as of

December 31, 2013 to P1,429.2 million as of December 31, 2014 primarily due to repayment of accounts and other payables and operational activities during the year.

• Receivables increased by 31.3% from P9,093.8 million as of December 31, 2013 to P11,936.0

million as of December 31, 2014 million due to the revenue recognized during for the period pursuant to higher pre-sales, in addition to the policies and estimates pursuant to the collectability of sales price and percentage of completion methods.

• During the year ended December 31, 2014, Real estate inventories increased by 15.0% from

P7,026.9 million to P8,083.6 million due to development of various projects during the period.

________________________________________________________________________


SEC Form 17-A

• Investment properties posted an increase of 7.5% to P4,387.8 million as of December 31, 2014

as compared to P4,080.8 million as of December 31, 2013 primarily due to completion of Century City Mall and other costs incurred for Forbes and Spire Buildings.

Total liabilities as of December 31, 2014 were P18,345.8 million compared to P14,731.0 million as of December 31, 2013, or a P24.5% increase. This was due to the following: • Accounts and other payables decreased by 59.1% from P4,228.4 million as of December 31,

2013 to P1,730.2 million as of December 31, 2014 due to payments made to suppliers and contractors during the period.

• Short-term and long-term debt representing the sold portion of the Company‟s installment

contracts receivables with recourse, syndicated loans and bi-lateral term loans increased by 37.0% from P6,039.1 million as of December 31, 2013 to P8,274.2 million as of December 31, 2014 due to increased net availments or net draw down from existing and new lines during the 2014.

• The Company issued a P2,700.0 million bond during the year increasing the total liabilities of the Group.

• Pension liabilities increased by 34.0% from P142.7 million as of December 31, 2013 to P191.3

million as of December 31, 2014 as a result accrual of pension expense during the period. • Income tax payable increased by 189.5% from P5.8 million as of December 31, 2013 to P16.9

million as of December 31, 2014 primarily due to higher taxable income during the year 2014 as compared to the year ended December 31, 2013.

Total stockholder‟s equity net increased by 16.3% to P13,304.4 million as of December 31, 2014 from P11,435.0 million as of December 31, 2013 due to the net income recorded during the year net of CPGI‟s cash dividend declarations and acquisition of treasury shares during the period.

2014 2013 2012

Current Ratio 2.7x 2.0x 2.5x

Debt to Equity Ratio 0.8x 0.5x 0.4x

Asset to Equity Ratio 2.4x 2.3x 2.3x

2014 2013 2012

Return on Assets 7.5% 8.2% 12.9%

Return on Equity 17.5% 18.8% 29.4%

EBIT 3,187.8 2,746.5 2,539.2

EBITDA 3,249.0 2,810.0 2,602.6

Total Debt 10,931.5 6,039.1 3,661.0

Net Debt 9,502.2 4,600.3 2,759.2

Gross Profit from Real Estate Sales Margin 45.6% 42.1% 44.5%

Net Income Margin 16.9% 17.1% 19.2%

Net debt-to-equity ratio 0.7x 0.4x 0.3x

Debt-to-EBITDA ratio 3.4x 2.1x 1.4x

Net debt-to-EBITDA ratio 2.9x 1.6x 1.1x

As of December 31


________________________________________________________________________


SEC Form 17-A

Notes: (1) Return on assets is calculated by dividing net income for the period by average total assets (beginning plus end of the

period divided by two). (2) Return on equity is calculated by dividing net income for the period by average total equity (beginning plus end of the

period divided by two).

(3) EBIT is calculated as net income after adding back interest expense and provision for income tax. EBITDA is calculated as net income after adding back interest expense, depreciation and amortization and provision for income tax.

(4) Net debt is calculated as total debt less cash and cash equivalents as of the end of the period. (5) Gross profit from real estate sales margin is calculated as the sum of real estate sales and accretion of unamortized

discount (which we record under interest and other income), less the cost of real estate sales, as a percentage of the

sum of real estate sales and accretion of unamortized discount, for the period. We believe that including accretion of unamortized discount in this calculation is a useful measure of the profitability of our real estate operations because such unamortized discount forms part of the original contract price of the sales contracts.

(6) Net margin is calculated as net income as a percentage of revenue for the period. (7) Net debt-to-equity ratio is calculated as net debt divided by total equity as of the end of the period. (8) Debt-to-EBITDA ratio is calculated as total debt as of the end of the period divided by EBITDA for the period calculated

on an annualized basis. (9) Net debt to EBITDA ratio is calculated as net debt as of the end of the period divided by EBITDA for the period

calculated on an annualized basis.

(10) This ratio is obtained by dividing the Current Assets of the Group by its Current liabilities. This ratio is used as a test of the Group‟s liquidity.

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SEC Form 17-A

Material Changes to the Company’s Balance Sheet as of December 31, 2014 compared to December 31, 2013 (increase/decrease of 5% or more) Cash and cash equivalents slightly decreased by P9.6 million from P1,438.9 million as of December 31, 2013 to P1,429.2 million as of December 31, 2014 primarily due to repayment of accounts and other payables and operational activities during the year. Receivables increased by 31.3% from P9,093.8 million as of December 31, 2013 to P11,936.0 million as of December 31, 2014 million due to the revenue recognized during for the period pursuant to higher pre-sales, in addition to the policies and estimates pursuant to the collectability of sales price and percentage of completion methods. During the year ended December 31, 2014, Real estate inventories increased by 15.0% from P7,026.9 million to P8,083.6 million due to development of various projects during the period. Due from related parties decreased by 17.9% from P177.3 million as of December 31, 2013 to P145.6 million as of December 31, 2014 due to payments made during the year to the stockholders and other affiliates. Advances to suppliers and contractors decreased by 22.8% from P1,314.9 million as of December 31, 2013 to P1,014.9 million as of December 31, 2014 primarily due to the reclassification of advances to suppliers and contractors to real estate inventory. Also various recoupment of down payments made based on construction progress transpired during the year. Prepayments and other current assets increased by 25.1% from P1,265.9 million as of December 31, 2013 to P1,583.5 million as of December 31, 2014 due to additional in marginal deposits, deferral of marketing and other expenses and higher input taxes recognized during the year. Derivative asset decreased by 14.7% from P29.9 million as of December 31, 2013 to P25,5million as of December 31, 2014 due to settlement of CCDC forward hedged contract. Investment properties posted an increase of 7.5% to P4,387.8 million as of December 31, 2014 as compared to P4,080.8 million as of December 31, 2013 primarily due to completion of Century City Lifestyle Center and other costs incurred for Forbes and Spire Buildings. Deposits for purchased land increased by 360.0% from P154.5 million as of December 31, 2013 to P710.9 million as of December 31, 2014 due to payments made to property owners for the acquisition of parcels of land in Quezon City, Metro Manila, San Fernando, Pampanga, Novaliches, Metro Manila and Batulao, Batangas. Intangible assets increased by 74.1% from P18.0 million as of December 31, 2013 to P31.3 million as of December 31, 2014 due to acquisition of certain application software and intellectual property licenses during the year. Investment in and advances to joint venture increased by 693.4% from P48.8 million as of December 31, 2013 to P387.0 as of December 31, 2014 due to additional advances to A2Global Inc. and investments made in One Pacstar Realty Corporation and Two Pacstar Realty Corporation. Property and equipment decreased by 22.8% from P157.8 million as of December 31, 2013 to P121.8 million as of December 31, 2014 due to provision of depreciation during the year. Other non-current assets increased by 53.5% from P758.1 million as of December 31, 2013 to P1,163.6 million as of December 31, 2014 due to rentals and other security deposits made during the year as well as non-current portion of deferred marketing expenses for newly launched projects with no percentage-of-completion as of December 31, 2014.

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SEC Form 17-A

Total liabilities as of December 31, 2014 were P18,345.8 million compared to P14,731.0 million as of December 31, 2013, or a 24.5% increase. This was due to the following: Accounts and other payables decreased by 59.1% from P4,228.4 million as of December 31, 2013 to P1,730.2 million as of December 31, 2014 due to payments made to suppliers and contractors during the period. Customers‟ advances and deposits increased by 37.8% from P2,222.7 million as of December 31, 2013 to P3,063.0 million as of December 31, 2014. Balances as of December 31, 2014 represents collection from customers which do not meet the revenue recognition criteria. Short-term and long-term debt representing the sold portion of the Company‟s installment contracts receivables with recourse, syndicated loans and bi-lateral term loans increased by 37.0% from P6,039.1 million as of December 31, 2013 to P8,274.2 million as of December 31, 2014 due to increased net availments or net draw down from existing and new lines during 2014. The Company issued a P2,700.0 million bond during the year increasing the total liabilities of the Group. Pension liabilities increased by 34.0% from P142.7 million as of December 31, 2013 to P191.3 million as of December 31, 2014 as a result of accrual of pension expense during the period. Income tax payable increased by 189.5% from P5.8 million as of December 31, 2013 to P16.9 million as of December 31, 2014 primarily due to higher taxable income during the year 2014 as compared to the year ended December 31, 2013. Donation payable increased by 100.0% from nil as of December 31, 2013 to P41.8 million as of December 31, 2014 due to recognition of liability to Makati City Office in line with the donation of parcel of land from the purchased of IS land. Deferred tax liabilities (net of deferred tax assets) increased 43.6% from P1,504.1 million as of December 31, 2013 to P2,160.0 million as of December 31, 2014 due to additional future taxable items during the period. Total stockholder‟s equity net increased by 16.3% to P13,304.4 million as of December 31, 2014 from P11,435.0 million as of December 31, 2013 due to the net income recorded during the year net of CPGI‟s cash dividend declaration and acquisition of treasury shares during the period.

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SEC Form 17-A

Material Changes to the Company’s Statement of income for the year ended December 31, 2014 compared to the year ended December 31, 2013 (increase/decrease of 5% or more) Real estate revenue posted an increase by 16.3% for the year ended December 31, 2014 from P9,304.2 million in 2013 to P10,822.9 million in 2014. The increase in revenue is attributable to increased sales among its projects, and during the year, the Group completed the St. Tropez Tower of Azure Residences. Increased construction accomplishments of other Century City Towers such as Milano Residences, Trump Tower Manila, Positano, Miami, Maldives and Maui Buildings of Azure Project; Niagara, Sutherland, Dettifoss and Livingstone Buildings of Acqua Project; and Osmeña West, Quezon North, Osmeña East and Roxas East Buildings of Commonwealth Project also contributed to the growth in revenues. Furthermore, in the process of applying the Company‟s accounting policies, management has made certain judgments and estimates. One of these estimates is the collectability of the sales prices, which prompts the recognition of the Company‟s sales. As of December 31, 2014, in determining whether the sales price is collectible, the Company considers that the initial and continuing investments by a buyer of 5% of the sales price would demonstrate such buyer‟s commitment to pay. This threshold was changed from 10% as of December 31, 2013. Buyers‟ credit standings, past due amounts, sales returns, as well as adopting equity requirements closer to prevailing industry practices in recognizing realized sales prompted the Company to revise the basis of estimating the level of buyers‟ payments wherein it is probable that economic benefits will flow to the Company. The change in this estimate resulted to an increased in the Company‟s real estate sales by P1,770.9 million (with an additional P452.9 million interest income from accretion) for the year ended December 31, 2014. The effect of this change in future periods cannot be estimated. Interest and other income increased by 15.6% to P1,445.1 million in the year ended December 31, 2014 from P1,250.5 million in the year ended December 31, 2013. This increase was due primarily to non-cash accretion of unamortized discounts reflecting increased revenue from real estate sales during the year. Moreover, gain from change in fair value of investment properties amounting to P147.3 million was recognized during the year. Investment properties are stated at fair value, which has been determined based on valuation performed by Cuervo Appraisers, Inc. an accredited independent valuer, as of December 31, 2014 and 2013. Property management fee and other services increased by 12.3% to P285.7 million in the year ended December 31, 2014 from P254.4 million in the year ended December 31, 2013. The increase was primarily due to the additional buildings under management and management fee rate escalations for some of the projects under management ranging from 5% to 10%. The number of buildings under management as of December 31, 2014 is 58 from 55 as of December 31, 2013. In 2014, Century City Mall commenced its operations. This contributed additional revenue amounting to P207.0 million on the Group‟s total revenue for the year ended December 31, 2014. Cost and expenses increased by 18.5% to P9,589.7 million during 2014 from P8,091.9 million for the year ended December 31, 2013. Cost of real estate sales increased by 10.0% from P5,766.9 million in the year ended December 31, 2013 to P6,342.6 million in the year ended December 31, 2014. This was primarily due to the corresponding growth in revenue from real estate sales. Cost of services increased by 16.0% to P215.4 million for the year ended December 31, 2014 from P185.6 million in the year ended December 31, 2013. This was primarily due to corresponding growth in property management and other service fees. Cost of leasing amounting to P108.7 million is the direct cost incurred in relation to the operation of the Century City Mall in the year 2014.

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SEC Form 17-A

General, administrative and selling expenses increased by 33.2% to P2,720.7 million in the year ended December 31, 2014 from P2,041.9 million in the year ended December 31, 2013. The increase was primarily due to increased amortization of deferred marketing expenses given more projects are undergoing construction and development. Interest and other financing charges increased by 107.5% to P202.2 million for the year ended December 31, 2014 from P97.5 million for 2013. This was primarily due to bank fees and other financing charges paid other than capitalized borrowing costs during the year. Unrealized foreign exchange loss amounting to P77.5 million also contributed to such increase. Provision for income tax increased by 16.0% to P1,012.2 million in the year ended December 31, 2014 from P872.5 million in the year ended December 31, 2013. The increase was primarily due to collections on new sales during the period as well as from amortization of accounts sold in previous year. The Group also excluded certain expenses for income tax deductibility purposes, pending compliance with withholding tax requirements as mandated by BIR. As a result of the foregoing, net income increased by 17.0% to P2,158.9 million for the year ended December 31, 2014 from P1,844.7 million in the year ended December 31, 2013. Factors which may have material impact in Company’s operations Economic factors The economic situation in the Philippines significantly affects the performance of the Company‟s business. For the residential products, the Group is sensitive to changes in domestic interest and inflation rates. Higher interest rates tend to discourage potential buyers of residential units as mortgages become unaffordable to them. An inflationary environment will adversely affect the Group, as well as the real estate industry, by increases in costs such as land acquisition, labor and material. Although the Group may pass on the additional costs to buyers, there is no assurance that this will not significantly affect the Group‟s sales. Competition Please refer to the discussion on Competition found in Item 1.4 of this report. Capital Expenditures The table below sets out our actual capital expenditures in 2010, 2011, 2012, 2013, 2014 and 2015. Expenditure (in millions) 2010 P 2,105.3 2011 3,608.4 2012 7,267.7 2013 9,074.5 2014 8,588.1 2015 8,668.9 The Group has historically sourced funding for capital expenditures through internally-generated funds and credit facilities from commercial banks.

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SEC Form 17-A

Components of our capital expenditures for the periods indicated are summarized below:

For the years ended December 31

2013 2014 2015

Advances and payments to joint

venture partners P 621.6 P 1,303.8 P 416.4 Acquisition of property and equipment

and investment property 905.5 226.7 793.5

Construction 7,547.4 7,057.6 7,458.9 Total P 9,074.5 P 8,588.1 P 8,668.9

The Company expects to fund budgeted capital expenditures principally through the existing cash and cash from operations, through borrowings and through Offering. The Company‟s capital expenditure plans are based on management‟s estimates, and are subject to a number of variables, including: possible cost overruns; construction and development delays; the receipt of Government approvals; availability of financing on acceptable terms; changes in management‟s views of the desirability of current plans; the identification of new projects and potential acquisitions; and macroeconomic factors such as the Philippines‟ economic performance and interest rates. Accordingly, we might not execute our capital expenditure plans as contemplated or at or below estimated cost.

ITEM 7. FINANCIAL STATEMENTS The consolidated financial statements of the Company and its subsidiaries are filed as part of this Form 17-A.

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SEC Form 17-A

ITEM 8. INFORMATION ON INDEPENDENT ACCOUNTANTS Changes in and Disagreements with Accountants on Accounting and Financial Disclosures On June 26, 2015 the Company held its Annual Stockholders Meeting wherein SGV and Co. was appointed as the external auditors of the Company for the years 2014 and 2015, and to serve as such until their successor shall have been appointed and qualified. SGV and Company was also the external auditors of the Company and its subsidiaries for 2013 and 2014. There have been no disagreements with the current and previous accountants on accounting and financial disclosures. External Audit Fees For the audits of the financial statements of CPGI and all its subsidiaries, the aggregate fees for the audit services of SGV and Co. for 2015 inclusive of VAT amounted to P3.0 million. Fees for the years 2014 and 2013, inclusive of VAT, amounted to P3.0 million and P2.9 million respectively. In addition, SGV & Co. has performed special audit engagement in 2014 with total fees of P3.7 million. The Audit Committee recommends to the Board of Directors the discharge or nomination of the external auditor to be proposed for shareholder approval at CPGI‟s annual shareholders meeting, approve all audit engagement fees and terms of the external auditor, and review its performance. It also reviews and discusses with management and the external auditors the results of the audit, including any difficulties encountered. This review includes any restrictions on the scope of the external auditor‟s activities or on access to requested information, and any significant disagreements with Management. The Audit Committee also evaluates, determines and pre-approves any non-audit service provided to the Company and its subsidiaries by the external auditors and keeps under review the non-audit fees paid to the external auditors both in relation to their significance to the auditor and in relation to the total expenditure on consultancy. No engagement for other services from SGV and Co. either for professional services, tax accounting compliance, advise and planning nor any services rendered for products and services other than the aforementioned audit services reported in 2015.

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SEC Form 17-A

PART III. CONTROL AND COMPENSATION INFORMATION ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY Directors and Executive Officers The directors of the Company are elected at the regular annual stockholders‟ meeting. They hold office for a term of one (1) year until the next succeeding annual meeting and until their respective successors have been elected and qualified. The executive officers hold office until their respective successors have been elected and qualified. The directors and executive officers of the Company as of December 31, 2015 are as follows:

Name of Director Position Age

Jose E.B. Antonio Chairman of the Board, President and CEO 69

John Victor R. Antonio Director and Co. COO 43

Jose Marco R. Antonio Director and Co. COO 41

Jose Roberto R. Antonio Co-Managing Director 39

Jose Carlo R. Antonio Director and Chief Financial Officer 32

Ricardo Cuerva Director 71

Rafael G. Yaptinchay* Co-Managing Director 65

Amb. Jose L. Cuisa, Jr. Independent Director 69

Stephen T. CuUnjieng Independent Director 56

Carlos C. Ejercito Independent Director 69

Atty. Camille Kristine I. Aromas*

Corporate Secretary 30

Domie S. Eduvane Senior Vice President for Legal and Corporate Affairs

51

Gerry Joseph Albert Ilagan Senior Vice President for Human Resources and Sales Management

36

Carlos Benedict K. Rivilla, IV Vice President for Corporate Affairs and Assistant Corporate Secretary

44

Maria Theresa Fucanan – Yu Vice President for Corporate Communications 35

Kristina I. Garcia Director for Investor Relations 42

Erickson Y. Manzano** Senior Vice President / Development Director 43

Tim Hallett Chief Operating Officer for Hospitality 56

Rhoel Alberto Nolido** Business Unit Head 42

Patrick Carague Senior Vice President – Head of Risk Management and Decision Support Services

44

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SEC Form 17-A

Atty. Isabelita Ching Sales Chief Information Officer and Compliance Officer 36

Atty. Jeffrey R. Balmores VP – Tax Director 38

John Paul Flores Comptroller 33

Gerardo A. Morales* Treasurer 54

*Mr.. Gerardo A. Morales was appointed as Treasurer of the Company last August 13, 2015 while Mr. Rafael Yaptinchay was appointed Co-Managing Director of the Company last August 13, 2015. Atty. Camille Kristine I. Aromas was appointed Corporate Secretary last November 15, 2015 following the resignation of Atty. Mary Jude Cantorias effective on even date.

was appointed Corporate Secretary on October 02, 2014. **Mr. Erickson Manzano resigned on October 15, 2015 and Mr. Rhoel Alberto Nolido resigned on November 15, 2015

Mr. Jose E.B. Antonio, 69years old, Filipino, is one of the founders and Chairman of the Company and its subsidiaries. He graduated cum laude from San Beda College, Manila in 1966 with a Bachelor‟s Degree in Commercial Science (major in Marketing) and received a Masters Degree in Business Management in 1968 from Ateneo de Manila‟s Graduate School of Business. Chairman Antonio also graduated from Harvard University‟s Owner/President Management Program in 2003. Chairman Antonio served as the Philippines Special Envoy for Trade and Economics to the People‟s Republic of China in 2005 and is currently the Chairman of Century Asia Corporation, Prestige Cars, Inc. and Philtranco Service Enterprises. He is also the founder and Chairman of the Philippine-China Business Council Inc. In addition, he serves as the Vice Chairman of Penta Pacific Realty Corporation and Subic Air Charter, Inc. Mr. John Victor R. Antonio, 43 years old, Filipino, is Co-Chief Operating Officer and a Managing Director of the Company. He has been with the Company for 17 years and is involved in managing projects in the Company‟s middle income and affordable product lines, including Gramercy Residences and Azure Urban Residences. He graduated magna cum laude with a Bachelor‟s Degree in Economics (major in Marketing) from the University of Pennsylvania‟s Wharton School in 1993 and received his Masters Degree in Business Administration from the Wharton School in 2003. Mr. Jose Marco R. Antonio, 41years old, Filipino, is Co-Chief Operating Officer and a Managing Director of the Company. Prior to joining us, he worked at Blackstone Real Estate Partners as a financial analyst. He has been with the Company for 16 years and is involved in managing projects in the Company‟s middle income and affordable product lines, including Canyon Ranch, Knightsbridge Residences and Acqua Private Residences. He graduated summa cum laude with a Bachelor‟s Degree in Economics (dual major in Finance and Entrepreneurial Management) from the University of Pennsylvania‟s Wharton School in 1995 and received his Masters Degree in Business Administration from the Wharton School in 2004. Mr. Jose Roberto R. Antonio, 39 years old, Filipino, is a Managing Director of the Company. He is involved in managing projects in the Company‟s luxury product line, including Milano Residences and Trump Tower Manila. He graduated with a Bachelor‟s Degree in Economics from Northwestern University and obtained his Masters Degree in Business Administration from Stanford University. He joined the Company in 2009 after spearheading Antonio Development in New York City, which developed the luxury condominium Centurion, located on 56th Street between 5th and 6th Avenue, steps from Central Park. Mr. Jose Carlo R. Antonio, 32years old, Filipino, is the CFO of the Company and a member of our Board. Prior to joining the Company in 2007, he worked in the investment banking groups of Citigroup and Goldman Sachs. He graduated magna cum laude with a Bachelor‟s Degree in Economics (major in Finance) from the University of Pennsylvania‟s Wharton School in 2005. Mr. Ricardo Cuerva, 71years old, Filipino, is a member of our Board. Mr. Cuerva was a co-founder of Meridien and served as Meridien‟s president from 1988 to 1996. He also currently serves as a member of the Rotary Club of Makati City. Mr. Cuerva graduated from San Beda College in 1961

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SEC Form 17-A

with a Bachelor of Science Degree in Business Administration and obtained his Masters Degree in Business Administration from Ateneo De Manila in 1971. Mr. Cuerva is the President and owner of Century Project Management and Construction Corporation, which oversees the construction of our vertical developments. Mr. Rafael G. Yaptinchay, 65years old, Filipino, is the Co-Managing Director of the Company and a member of our Board. Mr. Yaptinchay was a co-founder of Meridien and served as Meridien‟s president from 1996 to 2009. He has previously served as the Assistant Treasurer and Head of Business Development/Corporate Planning of Philippine National Construction Corporation. Mr. Yaptinchay is a member of the Rotary Club of Ortigas and the Association of Asian Manager, Inc. Mr. Yaptinchay graduated from Ateneo de Manila University in 1971 with a Bachelor‟s Degree (major Economics) and received his Masters Degree in Business Administration from Asian Institute of Management in 1974. Amb. Jose L. Cuisia Jr., 69 years old, Filipino citizen, is the incumbent Ambassador Extraordinary and Plenipotentiary of the Republic of the Philippines to the United States. Ambassador Cuisia is also well-respected figure in Philippine business, with over 32 years in financial services, most recently as the President & CEO of the largest and most profitable non-bank financial institution on the Philippines. He serves on the boards of many of the Philippines‟ most important private and listed companies, and has shared his expertise as Trustee on various academic institutions and non-government organizations espousing good governance and corporate social responsibility, including the Asian Institute of Management. Ambassador Cuisia has over 10 years of experience in public service, having served Filipinos as the Governor of the Central Bank of the Philippines and Chairman of its Monetary Board as well as President and CEO of the Philippine Social Security System in the 1980s and 1990s. At the Central Bank, Ambassador Cuisia oversaw the liberalization of foreign exchange controls, resulting in, among others, the entry of more substantial foreign direct investment that strengthened the Philippine Peso and the country‟s foreign exchange reserves. The Ambassador also led the efforts in establishing what is now the Bangko Sentral ng Pilipinas, allowing it to become a more effective guardian of monetary policy and ensuring the stability of the banking system. Amb. Cuisia also serves as Director to various companies namely: Investment & Capital Corporation of the Philippines, Asian Institute of Management, Phinma Corporation, SM Prime Holdings Inc., Philippine Investment Management, Inc.. He likewise serves as an Independent Director of Manila Water Company, Inc. Mr. Stephen T. CuUnjieng, 56 years old, Filipino citizen, is a prominent investment banker, and currently serves as an Independent Director, Aboitiz Equity Ventures, Inc. He has a long and extensive experience in investment banking with several major financial institutions including HFS Capital LLC and Evercore Partners, Inc. is the Chairman of Evercore Asia Limited. He is an advisor to a number of Asia's most prominent companies like San Miguel Corporation, Samsung Electronics, Tiger Airways, among others. He finished his undergraduate and law degree from Ateneo De Manila University and later on, earned his MBA degree from the Wharton School of Business at the University of Pennsylvania. Mr. Carlos C. Ejercito, 69 years old, Filipino, is the former Chairman of the United Coconut Planters Bank and currently the Chairman and CEO of Nortern Access Mining, Inc, Forum Cebu Coal Corporation and Kaipara Mining and Development Corporation. He graduated Cum Laude from the University of the East where he finished his Bachelor‟s Degree in Business Administration. He became a Certified Public Accountant in 1966. He received his Master‟s Degree in Business Administration at the Ateneo Graduate School of Business in 1976 and graduated from his Management Development Program in 1983 at the Harvard Business School. As of date, he serves as an Independent Director at Aboitiz Power Corporation, Bloomberry Resorts Corporation and Monte Oro resources and Energy Corporation. Mr. Domie S. Eduvane, 51 years old, Filipino, is the Senior Vice-President for Legal and Corporate Affairs of the Company. He graduated magna cum laude from Far Eastern University, Manila with a

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SEC Form 17-A

Bachelor of Arts Degree in Economics and obtained his law degree from San Beda College of Law, Manila in 1994. Prior to joining the Company, he served as the Vice-President for Legal and Corporate Affairs and Human Resources for Empire East Properties, Inc., an affiliate of Megaworld Corporation. He also worked as Court Attorney with the Court of Appeals, Manila and was an Associate with Bengzon Zarraga Cudala Liwanag & Jimenez Law Offices as well as a Partner of Yrreverre Rondario & Associates Law Office. Mr. Gerry Joseph Albert L. Ilagan, 36years old, Filipino, is the Senior Vice-President for Human Resources and Sales Management. In October 2015, he was appointed as fulltime group head of Century World Sales Operations. He graduated with academic distinction from San Beda College with a Bachelor‟s Degree in Human Resources Development and Philosophy. He also attended De La Salle College of St. Benilde‟s School of Professional and Continuing Education where he received a diploma in Organizational Development and a diploma in Human Resources. He is a licensed Real Estate Broker with more than 10 years of human resources and sales management experience gained from several multinational and Philippine companies. Mr. Ilagan also worked with Sun Microsystems Philippines Inc. and Crown Asia Properties Inc. prior to joining the Company. Mr. Carlos Benedict K. Rivilla IV, 44 years old, Filipino, is the Vice-President for Corporate Affairs of the Company. As part of his experience in the business sector, he served as Corporate Compliance Officer and Vice-President for Finance in a corporation engaged in mass media for four years in Cebu City and also previously handled Corporate Affairs for the Company and served as Director and Corporate Secretary of various businesses in Makati City. He joined the Company in 2007. Mr. Rivilla is a graduate of University of San Jose Recoletos. Mr. Rivilla was appointed Assistant Corporate Secretary on August 17, 2011. Ms. Teresita Fucanan Yu, 36 years old, Filipino, is the Vice-President for Corporate Communications of the Company. As part of her corporate background, she served as Assistant Vice-President and Public Relations Manager of the Company. Prior to joining the Company in 2007, she served as an editor and reporter for various sections of The Manila Times. Ms. Fucanan graduated cum laude with a Bachelor‟s Degree in Journalism from the University of Santo Tomas in 2001.

Kristina I. Garcia, 42 years old, Filipino, is Director For Investor Relations of Century Properties Group, Inc. (CPGI). Before joining the Company, she subsequently headed the Investor Relations divisions at Alliance Global Group, Inc. and Megaworld Corporation. Prior to that, Ms. Garcia was with the tax services department Isla Lipana & Co./PricewaterhouseCoopers where she assisted multinational companies set-up operations in the Philippines and avail of tax incentives.

Erickson Y. Manzano, 44years old, serves as Senior Vice President / Development Director of Century Properties Group Inc. (CPGI). Prior to joining CPGI in 2012, Mr. Manzano has worked for 20 years in the real estate industry in the fields of project development, corporate planning, construction management, and property management in the Country‟s biggest conglomerates. He graduated from the University of the Philippines with a BS in Civil Engineering degree. He later took his Masters of Science in Civil Engineering at De La Salle University, and his MBA, Major in Finance at the Asian Institute of Management, and spent his last semester as an exchange student to the Ivey Business School, University of Western Ontario. Tim Hallett, 56 years old, serves as the Company‟s COO for Hospitality. Mr. Hallett is an experienced Hospitality and Hospitality Real Estate professional at MD and COO level, working at the leading edge of hospitality development, innovation and value value creation with specific expertise Asian Pacific and emerging markets. Tim was the MD of The Sinar Mas Group Hospitality Business based in Singapore, before joining the privately held Cinnovation Group or Companies as CEO to build out a multiple asset/brand Hospitality business that included Alila Hotels & Reports, Taj Asia Ltd, Taj Safaris and Zinc Hospitality. Prior to joint Century Properties, Tim was one of the founding members of Silverneedle Hospitality a division of the Nadathur Group Family Investment Office, heading the Acquisition and Development business unit, instrumental in acquiring assets and

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SEC Form 17-A

hospitality missed use developments in Australia, Sri Lanka and Thailand. Tim is a Hotel Management Graduate and gained is Master in Hospitality Real Estate from Cornell in 2004. Rhoel Alberto Nolido, 43years old, is the Business Unit Head of CPGI. He has been in the real estate industry for the past 18 years. Mr. Nolido first started at Ayala Land, Inc. where he worked for 10 years handling project development. He eventually moved on as General Manager of Northpine Land for 5 years before he transferred to Eton Properties as a Senior Vice President for Business Management. He graduated from Ateneo de Manila University with a Bachelor of Science in Management degree and later took his MBA in Asian Institute of Management, Major in Finance. lsabelita Ching-Sales, 36 years old, serves as the Company‟s Chief Information Officer. Atty. Ching-Sales was the Chief Legal Counsel, Head for Credit Support, Chief Information Officer and Corporate Secretary of Asiatrust Development Bank where she worked for 5 years. She likewise worked as Head for Operations of China Banking Corporation‟s Acquired Assets Division. She graduated from the University of Sto. Tomas with a Bachelor‟s Degree in Legal Management and obtained her degree in Bachelor of Laws at San Sebastian College Recoletos Manila, Institute of Law and San Beda College of Law.

Atty. Camille Khristine I. Aromas, 30 years old, Filipino, is the Corporate Secretary of the Company. She is likewise a Senior Associate at Divina Law Offices. Previously, Ms. Aromas was a Mid-level Associate at Baker & McKenzie‟s Manila office and a consultant for the Asian Development Bank. She obtained her law degree at the University of the Philippines College of Law with a Bachelor‟s degree in Economics, graduating cum laude, from the same university. Ms. Aromas has extensive work experience in the field of arbitration, dispute resolution and corporate legal affairs.

Mr. Patrick Carague, 44 years old, is the Senior Vice President – Head of Risk Management and Decision Support Services worked as a finance and risk management professional for over 18 years, eleven of which were spent working in the U.S. for notable companies like Capital One, and Freddie Mac. He graduated from Ateneo de Manila University with a Bachelor of Arts degree in Management Economics. He later took his MBA at Kellogg Graduate School of Management, with majors in Finance, Decision Sciences, and Management & Strategy. Atty. Jeffrey R. Balmores, CPA, 38 years old, Filipino, is the VP – Tax Director of the Company. He graduated from the De La Lalle University, Manila with a Bachelor of Science Degree in Accountancy and obtained his law degree from San Beda College of Law, Manila. Prior to joining the Company, he served as the Head of Tax & Corporate Governance for Philex Mining Corporation/ Philex Group. He also worked as a Corporate Tax Director for Jollibee Foods Corporation /JFC Group Of Companies. He was also part of Tax Department of Smart Communications Inc. (SMART), and has worked for the Bureau of Internal Revenue (BIR) – National Office under the Office of the Deputy Commission – Legal & Inspection Group, and SGV & Co. under Tax Compliance Group early in his career. Mr. John Paul Flores, 33 years old, Filipino, is the Comptroller of the Company. He graduated from the Laguna College with a Bachelor of Science Degree in Accountancy. Prior to joining the Company, he served as a Senior Auditor of Punongbayan and Araullo Auditing Firm. Mr. Gerardo A. Morales, 54 years old, Filipino, serves as the Company‟s Treasurer. He, was the former President of Optimum Development Bank. He has been involved in varying capacities with several banks (Planters Development Bank, Union Bank of the Philippines and the East Bank) for more than 25 years.m Development Bank. He hAteneo de Manila University in 1981 with a Bachelor of Science Degree, Major in Business Management.

All the directors and members of the senior management of the Company possess a high degree of integrity and character and are fully capable and able to perform their duties as directors and members of senior management, respectively.

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SEC Form 17-A

Family Relationships Except for Messrs. Jose E.B. Antonio, John Victor R Antonio, Jose Marco R. Antonio, Jose Roberto R. Antonio and Jose Carlo R. Antonio, none of the above indicated Directors and Senior Officers are bound by any familial relationships with one another up to the fourth civil degree, either by consanguinity or affinity. Messrs. John Victor R Antonio, Jose Marco R. Antonio, Jose Roberto R. Antonio and Jose Carlo R. Antonio are brothers while Mr. Jose E.B. Antonio is their father. Involvement in Certain Legal Proceedings The Company is not aware of the occurrence of any of the following events during the five (5) years immediately preceding the filing of this Annual Report for the year 2012: (a) any bankruptcy petition filed by or against any business of which any director or executive officer was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (b) any conviction by final judgment, of any director or executive officer in a criminal proceeding, domestic or foreign, or being subject to a pending criminal proceeding, domestic or foreign, excluding traffic violations and other minor offenses; (c) of any director or executive officer being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, domestic or foreign permanently or temporarily enjoining, barring, suspending or otherwise limiting such director‟s or executive officer‟s involvement in any type of business, securities, commodities or banking activities; and (d) any director or executive officer being found by a domestic or foreign court of competent jurisdiction (in a civil action), the Commission or comparable foreign body, or a domestic or foreign exchange or electronic marketplace or self-regulatory organization, to have violated a securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

ITEM 10. EXECUTIVE COMPENSATION Information as to the aggregate compensation paid or accrued during the last two fiscal years and to be paid in the ensuing fiscal year to the executive officers and senior management follows:

Name and Principal

Position

Year Salary Bonus Other Annual

Compensation

Aggregate executive compensation for CEO

and Top 5 Most Highly Compensated Officers/Directors

Actual 2015

Projected 2016

P55,836,341.46

P60,108,719.04

P4,347,665.86

P4,580,137.57

0

Aggregate executive compensation all other officers unnamed

Actual 2015 Projected

P57,991,634.80 P61,925,806.94

P4,303,102.24 P5,538,973.52

0

The Company does not have any standard arrangement or other arrangements with its executive directors and, as previously mentioned, the executive directors of the Company do not receive any compensation for acting in such capacity, except for the independent directors who receives a monthly fee of One Hundred Thousand Pesos (P100,000.00) for board meetings, special meetings and board committee meetings.. As regards the employment contracts between the Company and the executive officers, the Company employs the same standard employment contract applicable to all its officers and employees. The Company has not issued and/or granted stock warrants or options in favor of its officers and employees.

________________________________________________________________________


SEC Form 17-A

ITEM 11. SECURITY OWNERSHIP OF CERTAIN RECORD AND BENEFICIAL OWNERS AND MANAGEMENT 11.1 Security Ownership of Certain Record and Beneficial Owners As of December 31, 2015, the Company knows of no one who owns in excess of 5% of the Company‟s common stock other than those set forth in the table below.

Title of Class

Name and Address of Record

Owner and relationship with Issuer

Name of Beneficial Owner and

relationship with Record Owner

Citizenship

No. of Shares Held

Percent

Common

Century Properties Inc. ( 21st

Floor, Pacific Star Building, Sen Gil Puyat corner Makati Avenue

Makati City)

-CPI-

Jose Carlo R. Antonio

Duly authorized representative

R

Filipino

7,806,788,243 67.3%

11. 2 Security Ownership of Management The amount and nature of the ownership of the Company‟s shares by the Company‟s directors and officers, as of December 31, 2015, is set forth in the table below.

Title of Class

Name of Beneficial Owner

Amount and Nature of Beneficial

Ownership

Citizenship

% of

Class

Common Jose E.B. Antonio 1 Filipino 0.00

Common John Victor R. Antonio 1 Filipino 0.00

Common Jose Marco R. Antonio 1 Filipino 0.00

Common Jose Roberto R. Antonio 1 Filipino 0.00

Common Jose Carlo R. Antonio 1 Filipino 0.00

Common Rafael G. Yaptinchay 1 Filipino 0.00

Common Ricardo Cuerva 1 Filipino 0.00

Common Jose L. Cuisia, Jr 1 Filipino 0.00

Common Stephen T. CuUnjieng 1 Filipino 0.00

Common Carlos C. Ejrecito 1 Filipino 0.00

- Domie S. Eduvane - Filipino -

- Atty. Camille Kristine I. Aromas - Filipino -

- Carlos Benedict K. Rivilla, IV - Filipino -

- Gerry Joseph Ilagan - Filipino -

- Maria Theresa Fucanan ucu - Filipino -

________________________________________________________________________


SEC Form 17-A

- Kristina I. Garcia - Filipino -

- Erickson Y. Manzano - Filipino -

- Tim Hallett - Filipino -

- Rhoel Alberto Nolido - Filipino -

- Isabelita Ching Sales - Filipino -

- Patrick C. Carague - Filipino -

- Jeffrey R. Balmores - Filipino -

- John Paul C. Flores - Filipino -

- Gerardo A. Morales - Filipino -

Common Aggregate Amount of Ownership of

all Directors and Officers as a Group Unnamed

10 -

11.3 Voting Trust Holders of 5% or More As of December 31, 2015, the Company does not know of any person who holds more than 5% of its common shares of stock under a voting trust or similar agreement. 11.4 Changes in Control

On May 31, 2011, the Company has been made aware that El Paso Philippines Energy Company,

Inc.‟s (EPPECI) entered into an agreement with Century Properties, Inc. (CPI), providing for the

terms and conditions for the purchase by CPI of EPPECI‟s 284,250,000 issued and outstanding

fully-paid and preferred shares of stocks of EPHE and 67,096,092 issued and outstanding fully-paid

common shares of stock in the Company, which will thereby effect a change in the ownership and

control of the Company.

On July 11, 2011, the Company further disclosed that CPI has commenced a negotiated purchase thru a Deed of Assignment of Shares of Stock dated May 31, 2011 with EPPECI for the following acquisitions: (1) 67,096,092 common shares (Public Sale Shares) of the Company equivalent to 1.888% of the Company and (2) 284,250,000 common and preferred shares (Private Sale Shares) of EPHE resulting to an indirect acquisition of equivalent to 91.695% of the total issued and outstanding capital stock of the Company. The purchase price for the Public and Private Sale Shares amounts to a total consideration of Php127,406,794.31 (the Private Sale Consideration) allocated as follows: Php2,569,732.51 for the Public Sale Shares and Php124,837,061.80 for the Private Sale Shares. On the same date, CPI and the Company executed and signed two (2) Deeds of Assignment of Shares of Stock effectively superseding the May 31, 2011 Deed of Assignment to finally close the above-mentioned acquisitions (1) Public Sale Shares and (2) Private Sale Shares. The July 11, 2011 Deeds of Assignment contained the same terms and conditions as stated in the May 31, 2011 Deed of Assignment thereby effecting a change in the ownership and control of the Company. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Other than the above and those disclosed in this annual report and in the consolidated financial statements, there are no other transaction entered into by the Company on one hand, with any of its directors, officers or stockholders on the other.

________________________________________________________________________


SEC Form 17-A

A complete description and the balances of the related party transactions are outlined in notes of the accompanying consolidated financial statements.

________________________________________________________________________


SEC Form 17-A

PART IV. CORPORATE GOVERNANCE Evaluation system to measure or determine level of compliance with the Manual of Corporate Governance The Company has undertaken constant self-rating assessment (SRA) and performance evaluation exercises in relations to its Corporate Governance policies both for the purpose of monitoring compliance and instill deeper awareness and observance. Measures undertaken to comply with leading practices The Compliance Officer has been tasked to keep abreast of such developments and to constantly disseminaterelevant information in this regard. Deviations from the Manual on Corporate Governance No deviation has been noted to date. Plans to improve Possible improvement in the Company‟s corporate governance policies and practices are being constantly studied and reviewed. The company undertakes to comply with all SEC and PSE mandated CG revisions and memorandums. For 2014, the Company‟s submitted to the Honorable Commission the certification of compliance on corporate governance and the Annual Corporate Governance Report (ACGR). CPG has also complied with the memorandum circular of the Philippine Stock Exchange on the submission of the CG Guidelines for listed corporations. Changes were implemented on the company‟s website to improve the monitoring of updates, disclosures and its corporate governance section.

________________________________________________________________________


SEC Form 17-A

PART V. EXHIBITS AND SCHEDULES

ITEM 14.EXHIBITS AND REPORTS ON SEC FORM 17-C Exhibits

EXHIBIT

Statement of Management‟s Responsibility

Consolidated Financial Statements

Supplementary Schedules

________________________________________________________________________


SEC Form 17-A

REPORTS ON SEC FORM 17-C FOR PERIOD FY 2015 REPORTS ON SEC FORM 17-C PERIOD SY 2015

January 8, 2015 Official Press Release entitled: Century Properties sells out 6 projects slated for 2015 completion

January 9, 2015 SEC Filing of Amended Articles of Incorporation and Bylaws of CPGI

January 30, 2015 1. Resolution for the approval of the Public Offering and sale of US Dollar denominated bonds/notes: RESOLVED, that the Board of Directors of Century Properties Group Inc. (the “Corporation”)

hereby approves the public offering and sale of US Dollar denominated Bonds/Notes in the aggregate amount of up to US$150,000,000.00 (the “Bonds/Notes”) by the Company as the Issuer. The Board has been informed that the Notes may only be offered to not more than

nineteen (19) non-qualified buyers and to any number of qualified buyers as defined in the Philippine‟s Securities Regulations Code. Accordingly, the offer and sale of the Notes will not be registered with the Securities and Exchange Commission in the Philippines.

“RESOLVED, that the Board of Directors of the Corporation authorize, as it hereby authorizes the listing of the Bonds /Notes with the Singapore Stock Exchange (“SGX”); however, there can be no assurance in respect of: (i) whether the Company would issue such debt securities at all; (ii) the

size or timing of any individual issuance or the total issuance of such debt securities; or (iii) the specific terms and conditions of any such issuance. Any decision by the Company to offer such debt securities will depend on a number of factors at the relevant time, many of which are not

within the Company‟s control, including but not limited to: prevailing interest rates, the financing requirements of the Company, market liquidity, and the state of the Philippine, regional and global capital markets and economies”

“RESOLVED, that the Board of Directors of the Corporation authorize, as it hereby authorizes, the Corporation to engage the services of advisors, legal counsel, trustee, paying agent, receiving agent/bank, underwriters, issue manager and other agents as may be necessary, proper, or

desirable to effect and implement the offer for sale of the Bonds/Notes, the registration and licensing of its Notes and the listing of its shares with the SGX under such terms and conditions as the authorized representatives named herein may deem to be fair and reasonable and in the best interest of the Corporation;

“RESOLVED, that the Board of Directors of the Corporation authorize, as it hereby authorizes, the Corporation to sign, execute, deliver and perform its obligations under any and all documents, contracts, agreements and instruments as may be necessary, convenient or appropriate in

connection with the offer for sale of the Bonds/Notes, the listing of the Bonds/Notes with the SGX;“RESOLVED, that the Board of Directors of the Corporation authorize, as it hereby authorizes, the Corporation to perform such further acts and deeds as may be necessary,

convenient or appropriate to give force and effect to these resolutions; “RESOLVED, that any of the following, acting singly, be designated as the authorized representatives and signatories of the Corporation to sign, execute, endorse and deliver, for and

on behalf and in the name of the Corporation, all applications, registration forms, deeds, documents, contracts, agreements and instruments, and to perform such further acts and deeds as may be necessary, convenient or appropriate, to give force and effect to these resolutions:

JOSE E.B. ANTONIO JOHN VICTOR R. ANTONIO

JOSE MARCO R. ANTONIO JOSE CARLO R. ANTONIO RAFAEL G. YAPTINCHAY

“RESOLVED FINALLY, that the Board of Directors of the Corporation ratify, as it hereby ratifies, any and all previous acts by the aforesaid representatives in connection with the authority hereby

conferred to them.” 2. Resolution on the approval for disclosures of certain information in the Offering Circular

February 2, 2015 US Denominated Bond Offering

February 2, 2015 Official Press Release entitled: Trump Tower® in Makati, Philippines successfully surpasses sales

targets with still two years before completion, project already pre-sold 94% of its total inventory

February 10, 2015 Official Press Release entitled: Century Properties Group to sell prime Makati commercial space with Century Spire offices

________________________________________________________________________


SEC Form 17-A

March 16, 2015 In compliance to the rules and regulations for publicly listed corporations, Century Properties Group Inc. (CPGI or the "Company") would like to inform the Securities and Exchange

Commission and the Philippine Stock Exchange that at a meeting held on March 16, 2015, the following were unanimously approved:

1. Resolution on the board approval for the appointment of the following officers effective March 17, 2015: JOHN PAUL FLORES - Comptroller

ATTY. JEFFREY BALMORES - Tax Director 2. Resignation of Mr. Ramon S. Villanueva III as VP for Accounting.

The following named officers undertakes to submit their individual Statement of Beneficial Ownership under SEC Form 23A/B as required by the Commission.

April 14, 2015 In compliance to the rules and regulations for publicly listed corporations, Century Properties Group Inc. (CPGI or the "Company") would like to inform the Securities and Exchange Commission and the Philippine Stock Exchange that at a special meeting of Board of Directors

and Audit Committee meeting held on March 14, 2014, the following resolutions were unanimously approved:

“RESOLVED, That the Board of Directors of CENTURY PROPERTIES GROUP INC. (the “Corporation” or „CPGI‟) hereby approves the review and endorsement of the Audit Committee on the Consolidated Financial Statements and Separate Financial Statements of Century Properties

Group Inc. for fiscal year 2014.” RESOLVED, FINALLY That the Corporation hereby approves the Consolidated Financial

Statements of CPGI for fiscal year ending December 31, 2014 and the Separate Financial Statements of CPGI for fiscal year 2014 audited by the Company‟s current external auditors, Sycip Gorres and Velayo (SGV), as reviewed and endorsed by the Audit Committee, in the same form

and substance as the draft presented to the Board during this meeting, and further directs that copies of the said Financial Statements be attached to the minutes of the meeting as integral Annexes thereto.”

April 21, 2015 Press Release entitled: Century Properties developing integrated resort project in Palawan Property developer purchases 56-hectares of beachfront land to develop an integrated resort and real estate destination in San Vicente town

April 23, 2015 Further to the disclosures made by Century Properties Group Inc. (“CPGI”) relative to the case

against the Okada Group, CPGI would like to inform the Honorable Commission and the Honorable Exchange that the Company was notified by its legal counsel today, April 23, 2015, of a Court Order issued by the Court Of Appeals dated March 27, 2015 granting Okada‟s Petition for

Review, thus setting aside the Court Order dated July 25, 2014 issued by the Regional Trial Court of Makati, Branch 66 which ordered in favor of Century Properties Group. Inc.‟s (“CPGI”) the preliminary prohibitory injunction against the Okada. CPGI‟s counsels are now studying the legal

options the Company will take anent to this order. Likewise, CPGI would like to inform the Honorable Exchange that it has filed a Notice of Arbitration

dated April 17, 2015 before the Hong Kong International Arbitration Center pursuant to the Dispute Resolution clause in the Investment Agreement executed between CPGI and Okada.

________________________________________________________________________


SEC Form 17-A

April 30, 2015 In compliance to the rules and regulations for publicly listed corporations, Century Properties Group Inc. (CPGI or the "Company") would like to inform the Securities and Exchange

Commission and the Philippine Stock Exchange that at a meeting held on April 30, 2015, the following were unanimously approved:

1. Resolution on the board approval for the appointment of the following officers effective May 01, 2015:

ATTY. ISABELITA CHING-SALES – Compliance Officer and Chief Information Officer

2. Resignation of Ms. Neko Lyree U.Cruz as Compliance Officer. The following named officers undertakes to submit their individual Statement of Beneficial

Ownership under SEC Form 23A/B as required by the Commission.

May 5, 2015 Notice of Analysts' Briefing on Financial Results for Fiscal Year ending December 31, 2014

May 11, 2015 BOARD APPROVAL OF THE FOLLOWING: I. Nomination, Remuneration and Compensation Committee endorsement for the selection and nominees for independent directors and regualr directors II. Annual Stockholder's Meeting

May 11, 2015 Notice of Annual Stockholder's Meeting

May 13, 2015 Clarification of the news article entitled “Century Properties embarks on P60-B spending program”

May 14, 2015 News Release:

Century Properties withdraws case against the Okada Group

May 14, 2015 Resolution of the Audit Committee on the endorsement of SGV as the Company‟s external auditors for 2015-2016

“RESOLVED, AS IT IS HEREBY RESOLVED, that the Audit Committee of Century Properties Group Inc. (the “Corporation”) hereby names, constitute and recommends the auditing firm of SGV and Company to be the corporation‟s auditors for the year 2015 for appointment, approval and

ratification of the Company‟s shareholders in its next Annual Stockholders Meeting” On the same day, the Board of Directors held a Special Board Meeting at 1:00pm to approve the

endorsement of SGV as external auditors by the Audit Committee. The following resolution was unanimously approved:

“RESOLVED that the Board of Directors of Century Properties Group Inc. (the Corporat ion) upon endorsement of majority of the Board Committee on Audit hereby approves the endorsement of SGV as external auditors for the year 2015-2016, for appointment, approval and ratification by the

shareholders of the Corporation during the next Annual Stockholders Meeting.

May 19, 2015 Amendment of the FIFTH Article of the Articles of Incorporation

June 10, 2015 Clarification and/or confirmation regarding the news article entitled “Clark prospect lures property majors” posted in BusinessWorld Online on June 9, 2015

June 10, 2015 Century Properties to Complete Over P15-B of Residential Projects in 2015

June 15, 2015 Declaration of Cash Dividend from CPGI's unrestricted retained earnings as of 31 December 2014

June 22, 2015 Results of the Annual Stockholders Meeting dated June 22, 2015

June 22, 2015 Results of the Organizational Meeting of the Board of Directors

June 22, 2015 Amendment of the FIFTH Article of the Articles of Incorporation

June 23, 2015 Century Properties announces partnership with Accor Hotels to open Novotel Suites Manila at Acqua Private Residences in 2019

June 23, 2015 SEC Filing of Amended Articles of Incorporation and Bylaws of CPGI

________________________________________________________________________


SEC Form 17-A

June 23, 2015 SEC Filing of CPGI Amended By-laws to change address

June 24, 2015 Declaration of Cash Dividend from CPGI's unrestricted retained earnings as of 31 December 2014

July 13, 2015 Declaration of Cash Dividend from CPGI's unrestricted retained earnings as of 31 December 2014

August 13, 2015 I. APPOINTMENT OF A NEW TREASURER “RESOLVED, That the Board of Directors of Century Properties Group Inc. ( the “Corporation”) be authorized, as it is hereby authorized to appoint Mr. Gerardo A. Morales as the Company‟s

Treasurer, to serve as such until his successor shall have been duly appointed and qualified.” “The Board of Directors have duly noted that prior to joining CPGI, Mr. Gerardo A. Morales, was

the former President of Optimum Development Bank. He has been involved in varying capacities with several banks (Planters Development Bank, Union Bank of the Philippines and Far East Bank) for more than 25 years. He graduated from the Ateneo de Manila University in 1981 with a

Bachelor of Science Degree, Major in Business Management. “RESOLVED FURTHER, that the Board of Directors of Century Properties Group Inc. ( the

“Corporation”) be authorized, as it is hereby authorized to appoint Mr. Rafael G. Yaptinchay as the Company‟s Co-Managing Director, to serve as such until his successor shall have been duly appointed and qualified.

II. APPROVAL OF QUARTERLY REPORT “RESOLVED, That the Board of Directors of Century Properties Group Inc. ( the “Corporation”) be

authorized, as it is hereby authorized to approve the Second Quarter Financial Report of the Company and the release of the same.”

August 13, 2015 Appointment of New Treasurer and Change in Designation of Mr. Rafael Yaptinchay from Treasurer to Co-Managing Director

August 27, 2015 Century Properties secures term loan facility with Standard Chartered Bank for the construction of its first hotel development

September 1, 2015 Century Properties Group Inc. would like to inform the Honorable Commission that the Company has seeded today, 01 September 2015, a press release entitled:

Century Properties‟ Pre-sales Up 46%

September 4, 2015 Clarification and/or confirmation regarding the news article entitled “Besides Chinese security

issue, tax problem besets Big Boy‟s power listing” posted in Money-Go-Round column of The Philippine Star on September 4, 2015

September 7, 2015 Notice of Analysts' Briefing

September 8, 2015 Century Properties and Mitsubishi Corporation sign joint venture partnership to develop the $100M Forbes Media Tower in the Philippines, a first in the world

October 9, 2015 In compliance with the rules and regulations for publicly listed corporations, Century Properties

Group Inc. (CPGI or the "Company") would like to inform the Honorable Philippine Stock Exchange and the Securities and Exchange Commission that on 09 October 2015, the Company held its Special Board of Directors Meeting accepting the resignation of Mr. Erickson Manzano as Senior

Vice President and Development Director effective October 15, 2015.

November 12, 2015 • Acceptance of the resignation of Mr. Rhoel Albert Nolido

• Appointment of a new Corporate Secretary

November 12, 2015 In compliance to the rules and regulations for publicly listed corporations, Century Properties Group Inc. (CPGI or the "Company") would like to inform the Securities and Exchange Commission and the Philippine Stock Exchange that at the Regular meeting of the Board of

Directors on November 12, 2015, the following were unanimously approved: I. APPROVAL OF QUARTERLY REPORT

The Chairman informed the Board that there is a need to approve the Third Quarter Financial Report of the Company. Upon motion made and duly seconded, the following resolution was unanimously approved and adopted by the Board:

“RESOLVED, That the Board of Directors of Century Properties Group Inc. ( the “Corporation”) be authorized, as it is hereby authorized to approve the Third Quarter Financial Report of the

Company and the release of the same.” II. PRESENTATION OF KEY BUSINESS TREND

The Executive Committee presented the Company‟s Key Business Updates which the Board duly noted.

________________________________________________________________________


SEC Form 17-A

III. OTHER BUSINESS

• ACCEPTANCE OF THE RESIGNATION OF MR. RHOEL ALBERT NOLIDO The Chairman informed the Board that there is a need to accept the resignation of MR. RHOEL ALBERT NOLIDO, Senior Vice President and Business Unit Head effective November 15, 2015.

Upon motion made and duly seconded, the following resolution was unanimously approved and adopted by the Board:

“ RESOLVED, That the Board of Directors of Century Properties Group Inc. ( the “Corporation”) be authorized, as it is hereby authorized to accept the resignation of MR. RHOEL ALBERT NOLIDO, Senior Vice President and Business Unit Head

effective November 15, 2015.” • APPOINTMENT OF A NEW CORPORATE SECRETARY

The Chairman informed the Board that there is a need accept the resignation of ATTY. MARY JUDE CANTORIAS, the Company‟s Corporate Secretary effective November 15, 2015 and to appoint a new Corporate Secretary to replace her. Upon motion made and duly seconded, the

following resolution was unanimously approved and adopted by the Board: “RESOLVED, That the Board of Directors of Century Properties Group Inc. ( the “Corporation”) be

authorized, as it is hereby authorized to to accept the resignation of ATTY. MARY JUDE CANTORIAS, the Company‟s Corporate Secretary effective November 15, 2015 and to appoint Atty. Camille Khristine I. Aromas as the Company‟s new Corporate Secretary, to serve as such

until his successor shall have been duly appointed and qualified.” “The Board of Directors have duly noted that Atty. Camille Khristine I. Aromas is a Senior

Associate at Divina Law Offices. Previously, Ms. Aromas was a Mid-level Associate at Baker & McKenzie‟s Manila office and a consultant for the Asian Development Bank. She obtained her law degree at the University of the Philippines College of Law with a Bachelor‟s degree in Economics,

graduating cum laude, from the same university. Ms. Aromas has extensive work experience in the field of arbitration, dispute resolution and corporate legal affairs.” The Company fully undertakes that it shall furnish the Honorable Exchange all material

documentation and filings for the aforementioned resolutions.

November 17, 2015 Press Release today entitled CENTURY PROPERTIES, MITSUBISHI CORPORATION SIGN P2.2B LOAN FACILITY with BPI

November 24, 2015 Notice of Analysts' Briefing

*SGVFS017065*

C O V E R S H E E Tfor

AUDITED FINANCIAL STATEMENTS

SEC Registration Number

0 0 0 0 0 6 0 5 6 6

C O M P A N Y N A M E

C E N T U R Y P R O P E R T I E S G R O U P I N C .

A N D S U B S I D I A R I E S

PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province )

2 1 s t F l o o r P a c i f i c S t a r B u i l d i

n g , S e n . G i l P u y a t c o r n e r M a k a

t i A v e n u e , M a k a t i C i t y

Form Type Department requiring the report Secondary License Type, If Applicable

A A F S S E C N / A

C O M P A N Y I N F O R M A T I O N

Company’s Email Address Company’s Telephone Number Mobile Number

N/A (02)793-5526 N/A

No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)

466 07/22 12/31

CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation

Name of Contact Person Email Address Telephone Number/s Mobile Number

John Paul C. Flores [email protected]

(02) 793-8981 0917-3244071

CONTACT PERSON’s ADDRESS

21st Floor Pacific Star Building Sen. Gil Puyat corner Makati Avenue, Makati City

NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to theCommission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact persondesignated.

2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records withthe Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation fromliability for its deficiencies.

*SGVFS017065*

INDEPENDENT AUDITORS’ REPORT

The Stockholders and the Board of DirectorsCentury Properties Group Inc.21st Floor Pacific Star BuildingSen. Gil Puyat corner Makati AvenueMakati City

We have audited the accompanying consolidated financial statements of Century Properties Group Inc.and its subsidiaries, which comprise the consolidated statements of financial position as atDecember 31, 2015 and 2014, and the consolidated statements of comprehensive income, consolidatedstatements of changes in equity and consolidated statements of cash flows for each of the three years inthe period ended December 31, 2015, and a summary of significant accounting policies and otherexplanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financialstatements in accordance with Philippine Financial Reporting Standards, and for such internal controlas management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud and error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on ouraudits. We conducted our audits in accordance with Philippine Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the consolidated financial statements. The procedures selected depend on the auditor’s judgment,including the assessment of the risks of material misstatement of the consolidated financial statements,whether due to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the entity’s preparation and fair presentation of the consolidated financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the consolidatedfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph

BOA/PRC Reg. No. 0001, December 14, 2015, valid until December 31, 2018SEC Accreditation No. 0012-FR-4 (Group A), November 10, 2015, valid until November 9, 2018

A member firm of Ernst & Young Global Limited

*SGVFS017065*

- 2 -

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, thefinancial position of Century Properties Group Inc. and its subsidiaries as at December 31, 2015 and2014, and their financial performance and their cash flows for each of the three years in the periodended December 31, 2015 in accordance with Philippine Financial Reporting Standards.

SYCIP GORRES VELAYO & CO.

John T. VillaPartnerCPA Certificate No. 94065SEC Accreditation No. 0783-AR-2 (Group A), May 1, 2015, valid until April 30, 2018Tax Identification No. 901-617-005BIR Accreditation No. 08-001998-76-2015, February 27, 2015, valid until February 26, 2018PTR No. 5321708, January 4, 2016, Makati City

March 28, 2016


*SGVFS017065*

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 312015 2014

ASSETS

Current AssetsCash and cash equivalents (Note 4) P=2,008,325,122 P=1,429,245,106Receivables (Note 5) 9,734,826,538 7,555,891,411Real estate inventories (Note 6) 11,124,797,950 8,083,615,926Due from related parties (Note 28) 149,414,158 145,606,224Advances to suppliers and contractors (Note 8) 1,214,360,002 1,014,896,505Prepayments and other current assets (Note 9) 1,721,282,183 1,652,341,046Total Current Assets 25,953,005,953 19,881,596,218

Noncurrent AssetsInstallment contracts receivables (ICR) - net of current portion (Note 5) 3,602,989,572 4,380,143,446Land held for future development - net of current

portion (Note 7) 431,333,944 431,333,944Deposits for purchased land (Note 10) 881,439,583 710,851,147Investments in and advances to joint ventures (Note 11) 386,986,800 386,986,800Investment properties (Note 12) 5,260,119,239 4,387,823,554Property and equipment (Note 13) 191,506,908 121,821,944Deferred tax assets - net (Note 27) 92,132,290 145,823,268Other noncurrent assets (Note 14) 679,357,450 1,203,827,192Total Noncurrent Assets 11,525,865,786 11,768,611,295

TOTAL ASSETS P=37,478,871,739 P=31,650,207,513

LIABILITIES AND EQUITY

Current LiabilitiesAccounts and other payables (Note 15) P=2,142,720,591 P=1,730,205,301Short-term debt (Note 17) 961,608,054 673,323,310Customers’ advances and deposits (Note 16) 3,127,052,118 3,062,974,853Current portion of:

Long-term debt (Note 17) 2,635,258,214 1,924,309,151Liability from purchased land (Note 19) 62,899,428 2,899,428

Due to related parties (Note 28) 29,625,509 31,760,098Income tax payable 140,510,859 16,886,288Total Current Liabilities 9,099,674,773 7,442,358,429

(Forward)

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December 312015 2014

Noncurrent LiabilitiesLong-term debt - net of current portion (Note 17) P=7,651,676,408 P=5,676,518,437Bonds payable (Note 18) 2,667,496,067 2,657,325,062Liability from purchased land - net of current portion

(Note 19) 577,512,408 30,741,161Pension liabilities (Note 29) 206,687,957 191,284,766Deferred tax liabilities - net (Note 27) 2,573,867,641 2,305,775,463Other noncurrent liabilities (Note 33) 68,086,440 41,763,183Total Noncurrent Liabilities 13,745,326,921 10,903,408,072Total Liabilities 22,845,001,694 18,345,766,501

Equity (Note 20)Capital stock - P=0.53 par value Authorized - 18,000,000,000 shares Issued - 11,699,723,690 shares 6,200,853,553 6,200,853,553Additional paid-in capital 2,639,742,141 2,639,742,141Treasury shares - 100,123,000 shares (109,674,749) (109,674,749)Other components of equity (11,795,550) (10,664,177)Retained earnings 5,975,821,590 4,657,974,323Remeasurement loss on defined benefit plan (Note 29) (61,076,940) (73,790,079)Total Equity 14,633,870,045 13,304,441,012

TOTAL LIABILITIES AND EQUITY P=37,478,871,739 P=31,650,207,513

See accompanying Notes to Consolidated Financial Statements.

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CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 312015 2014 2013

REVENUEReal estate sales P=7,751,321,206 P=10,822,921,089 P=9,304,192,652Leasing revenue (Note 12) 311,668,777 206,988,490 –Property management fee and other services

(Note 22) 297,445,480 285,728,465 254,410,4688,360,435,463 11,315,638,044 9,558,603,120

COSTSCost of real estate sales (Note 6) 4,808,587,411 6,342,613,886 5,766,890,843Cost of leasing (Note 12) 153,494,504 108,693,945 –Cost of services (Note 24) 216,513,767 215,390,743 185,645,271

5,178,595,682 6,666,698,574 5,952,536,114

GROSS PROFIT 3,181,839,781 4,648,939,470 3,606,067,006

GENERAL, ADMINISTRATIVE AND SELLING EXPENSES (Note 25) (2,731,809,872) (2,720,747,064) (2,041,863,818)

OTHER INCOME (EXPENSES)Interest and other income (Note 23) 1,146,764,821 1,290,651,023 1,220,578,939Gain from change in fair value of investment properties (Note 12) 755,601,280 147,298,665 –Gain from change in fair value of derivatives 118,462,120 7,190,515 29,925,021Interest and other financing charges (Note 26) (225,747,902) (124,710,365) (97,452,966)Unrealized foreign exchange loss (114,841,683) (77,528,993) –

1,680,238,636 1,242,900,845 1,153,050,994

INCOME BEFORE INCOME TAX 2,130,268,545 3,171,093,251 2,717,254,182

PROVISION FOR INCOME TAX(Note 27)

Current 294,927,700 348,967,006 419,634,157Deferred 316,334,669 663,238,492 452,904,271

611,262,369 1,012,205,498 872,538,428

NET INCOME 1,519,006,176 2,158,887,753 1,844,715,754

OTHER COMPREHENSIVE INCOME(LOSS)

Item that will not be reclassified to profit or loss in subsequent periods:Remeasurement gain (loss) on defined benefit plan and others (Note 29) 11,581,766 (17,862,166) (24,307,013)

TOTAL COMPREHENSIVE INCOME P=1,530,587,942 P=2,141,025,587 P=1,820,408,741

Basic/diluted earnings per share (Note 21) P=0.130 P=0.185 P=0.160


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CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE YEARS ENDED DECEMBER 31, 2015, 2014, AND 2013

CapitalStock

(Note 20)

AdditionalPaid-inCapital

(Note 20)

TreasuryShares

(Note 20)

OtherComponents

of Equity

RetainedEarnings(Note 20)

RemeasurementLoss on Defined

Benefit Plan(Note 20) Total

At January 1, 2015 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) (P=10,664,177) P=4,657,974,323 (P=73,790,079) P=13,304,441,012Net income – – – – 1,519,006,176 – 1,519,006,176Cash dividends declared (Note 20) – – – – (201,158,909) – (201,158,909)Others – – – (1,131,373) – 12,713,139 11,581,766At December 31, 2015 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) (P=11,795,550) P=5,975,821,590 (P=61,076,940) P=14,633,870,045

At January 1, 2014 P=5,140,853,731 P=2,639,742,141 (P=22,521,542) (P=10,162,739) P=3,743,557,967 (P=56,429,351) P=11,435,040,207Net income – – – – 2,158,887,753 – 2,158,887,753Dividends declared (Note 20) Cash – – – – (184,471,575) – (184,471,575) Stock (Note 35) 1,059,999,822 – – – (1,059,999,822) – –Others – – – (501,438) – (17,360,728) (17,862,166)Acquisition of treasury shares (Note 20) – – (87,153,207) – – – (87,153,207)At December 31, 2014 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) (P=10,664,177) P=4,657,974,323 (P=73,790,079) P=13,304,441,012

At January 1, 2013 P=4,716,853,731 P=1,483,184,722 P=– (P=11,707,728) P=2,083,278,407 (P=30,577,349) P=8,241,031,783Net income – – – – 1,844,715,754 – 1,844,715,754Cash dividends declared (Note 20) – – – – (184,436,194) – (184,436,194)Others – – – 1,544,989 – (25,852,002) (24,307,013)Additional issuance of shares (Note 20) 424,000,000 1,156,557,419 – – – – 1,580,557,419Acquisition of treasury shares (Note 20) – – (22,521,542) – – – (22,521,542)At December 31, 2013 P=5,140,853,731 P=2,639,742,141 (P=22,521,542) (P=10,162,739) P=3,743,557,967 (P=56,429,351) P=11,435,040,207


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CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS


CASH FLOWS FROM OPERATINGACTIVITIES

Income before income tax P=2,130,268,545 P=3,171,093,251 P=2,717,254,182Adjustments for:

Interest expense (Note 26) 71,992,593 16,703,757 29,215,760Unrealized foreign exchange loss 114,841,683 77,528,993 –Retirement expense (Note 29) 34,523,333 26,449,214 24,496,953Depreciation and amortization (Note 25) 27,844,831 26,972,348 39,377,153Provision for impairment losses on

receivables (Note 5) 83,287 281,862 830,245Interest income (Note 23) (815,059,617) (945,533,614) (698,616,432)Gain from change in fair value of

investment properties (Note 12) (755,601,280) (147,298,665) –Gain from change in fair value of

derivatives (Note 31) (118,462,120) (7,190,515) (29,925,021)Operating income before working capital changes 690,431,255 2,219,006,631 2,082,632,840Decrease (increase) in:

Receivables (600,114,249) (2,016,750,725) (1,660,230,501)Real estate inventories (1,401,577,409) (509,762,069) (2,220,726,790)Advances from suppliers and contractors (199,463,497) 299,984,498 (389,579,537)Prepayments and other current assets (422,710,232) (317,622,440) 418,459,397Other noncurrent assets 949,050,201 (383,265,954) (47,864,100)

Increase (decrease) in:Accounts and other payables 412,515,290 (2,498,202,823) 1,172,587,388Customers’ advances and deposits 64,077,265 840,225,372 (65,612,162)

Cash used in operations (507,791,376) (2,366,387,510) (710,333,465)Interest received (Note 23) 13,309,323 119,887,408 43,852,421Interest paid (Note 6 and 26) (414,520,053) (481,485,295) (444,203,654)Income tax paid (176,438,734) (337,914,611) (522,963,866)Retirement benefits paid (958,063) (2,675,966) –Net cash used in operating activities (1,086,398,903) (3,068,575,974) (1,633,648,564)

CASH FLOWS FROM INVESTINGACTIVITIES

Decrease (increase) in due from related parties (3,807,935) 31,716,454 (11,096,901)Additions to:

Deposits for purchased land (Note 10) (170,588,436) (556,309,060) (154,542,087)Investment properties (Note 12) (771,527,820) (201,466,886) (875,835,909)Property and equipment (Note 13) (21,978,935) (25,251,396) (29,669,803)Investments in and advances to joint ventures – (338,211,064) (48,775,736)Land held for future development (Note 7) – (8,333,944) (380,000,000)

Net cash used in investing activities (967,903,126) (1,097,855,896) (1,499,920,436)

(Forward)

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CASH FLOWS FROM FINANCINGACTIVITIES

Net availment of short-term and long-term debts P=2,810,352,280 P=2,169,070,221 P=2,378,147,631Proceeds from deposits for preferred shares

(Note 33) 26,323,263 – –Payment of cash dividends (Note 20) (201,158,909) (184,471,576) (184,436,193)Payments of:

Due to related parties (2,134,590) (149,394) (81,116,274)Liability from purchased land – (397,831,910) –

Issuance of bonds payable (Note 18) – 2,657,325,062 –Re-acquisition of shares into treasury (Note 20) – (87,153,207) (22,521,542)Issuance of shares (Note 20) – – 1,580,557,419Net cash provided by financing activities 2,633,382,044 4,156,789,196 3,670,631,041

NET INCREASE (DECREASE) IN CASHAND CASH EQUIVALENTS 579,080,016 (9,642,674) 537,062,041

CASH AND CASH EQUIVALENTS ATBEGINNING OF YEAR 1,429,245,106 1,438,887,780 901,825,739

CASH AND CASH EQUIVALENTS ATEND OF YEAR (Note 4) P=2,008,325,122 P=1,429,245,106 P=1,438,887,780


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CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

Century Properties Group Inc. (the Parent Company or CPGI), a publicly-listed company, wasincorporated and registered with the Philippine Securities and Exchange Commission (SEC) onMay 6, 1975. The Parent Company is a 67.30%-owned subsidiary of Century Properties Inc.(CPI; the ultimate Parent) and the rest by the public. The Parent Company and its subsidiaries areprimarily engaged in the development and construction of residential and commercial real estateprojects.

The registered office address of the Parent Company is 21/F Pacific Star Building, Sen. Gil Puyatcorner Makati Avenue, Makati City.

The Parent Company and its subsidiaries are collectively referred to herein as the “Group”.

The accompanying consolidatedfinancial statements as at andfor theyears endedDecember 31, 2015and 2014 were approved and authorized for issue by the Board of Directors (BOD) onMarch 28, 2016.

2. Summary of Significant Accounting Policies

Basis of PreparationThe accompanying consolidated financial statements include the financial statements of the ParentCompany and its subsidiaries.

The accompanying consolidated financial statements have been prepared on a historical cost basis,except for investment properties and derivative assets that are measured at fair value. Theconsolidated financial statements are presented in Philippine Peso (P=), the Parent Company’sfunctional currency. Philippine peso is also the functional currency of all subsidiaries. All valuesare rounded to the nearest peso except when otherwise indicated.

Statement of ComplianceThe consolidated financial statements of the Group have been prepared in compliance withPhilippine Financial Reporting Standards (PFRS).

Basis of ConsolidationThe consolidated financial statements comprise the financial statements of the Parent Companyand the following wholly owned subsidiaries:

Percentage Ownership2015 2014 2013

Century Limitless Corporation (CLC) 100 100 100Century Acqua Lifestyle Corporation (CALC) 100 100 –

Century Properties Management, Inc. (CPMI) 100 100 100Siglo Suites, Inc. (SSI) 100 – –

Century Communities Corporation (CCC) 100 100 100Century City Development Corporation (CCDC) 100 100 100

Century City Development Corporation II 100 100 100Centuria Medical Development Corporation (CMDC) 100 100 100Knightsbridge Residences Development Corporation* 100 100 100

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Percentage Ownership2015 2014 2013

Milano Development Corporation (MDC) 100 100 100Century City Development Corporation VII* 100 100 100Century City Development Corporation VIII* 100 100 100Century City Development Corporation X* 100 100 100Century City Development Corporation XI* 100 100 100Century City Development Corporation XII* 100 100 100Century City Development Corporation XIV* 100 100 100Century City Development Corporation XV* 100 100 100Century City Development Corporation XVI* 100 100 100Century City Development Corporation XVII* 100 100 100Century City Development Corporation XVIII* 100 100 100

Century Properties Hotel and Leisure Inc. (CPHLI) 100 100 –*Non-operating CCDC subsidiaries

On July 22, 2015, SSI, a wholly owned subsidiary of CPMI, was incorporated. SSI was organizedprimarily to provide professional leasing and management services to condominium unit owners.

CPHLI was incorporated on March 27, 2014. CPHLI was organized with a primary purpose ofengaging in real estate and hospitality activities.

On November 6, 2014, CALC, a wholly owned subsidiary of CLC, was incorporated. CALC wasorganized primarily to acquire by purchase, own, hold, manage, administer, lease or operatecondominium units of the planned Acqua 6 Tower of Acqua Private Residences for the benefit ofits shareholders.

On September 23, 2014, the BOD approved cessation of operations of the non-operating CCDCsubsidiaries. On the same date, the BOD approved the dissolution of these subsidiaries.Accordingly, these subsidiaries changed their basis of accounting from a going concern basis to aliquidation basis. Final dissolution will take place after the approval of the subsidiaries’application with the Bureau of Internal Revenue (BIR). As of December 31, 2015, thesubsidiaries have not yet filed their application for dissolution with the BIR.

Control is achieved when the Group is exposed, or has rights, to variable returns from itsinvolvement with the investee and has the ability to affect that return through its power over theinvestee. Specifically, the Group controls an investee if and only if the Group has:· Power over the investee (i.e. existing rights that give it the current ability to direct the relevant

activities of the investee)· Exposure, or rights, to variable returns from its involvement with the investee, and· The ability to use its power over the investee to affect its returns

Generally, there is a presumption that a majority of voting rights result in control. To support thispresumption and when the Group has less than a majority of the voting or similar rights of aninvestee, the Group considers all relevant facts and circumstances in assessing whether it haspower over an investee including:· The contractual arrangement with the other vote holders of the investee· Rights arising from other contractual arrangements· The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicatethat there are changes to one or more of the three elements of control. Consolidation of asubsidiary begins when the Group obtains control over the subsidiary and ceases when the Group

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loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired ordisposed during the year are included or excluded in the consolidated financial statements fromthe date the Group gains control or until the date the Group ceases to control the subsidiary.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Groupobtains control, and continue to be consolidated until the date when such control ceases. Thefinancial statements of the subsidiaries are prepared for the same reporting period as the ParentCompany, using consistent accounting policies. All intra-group balances, transactions, unrealizedgains and losses resulting from intra-group transactions and dividends are eliminated in full.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as anequity transaction. If the Group loses control over a subsidiary, it:· Derecognizes the assets (including goodwill) and liabilities of the subsidiary, the carrying

amount of any NCI and the cumulative translation differences recorded in equity.· Recognizes the fair value of the consideration received, the fair value of any investment

retained and any surplus or deficit in profit or loss.· Reclassifies the parent’s share of components previously recognized in other comprehensive

income to profit or loss or retained earnings, as appropriate.

Changes in Accounting Policies and Disclosures

Amended Standard and Improved PFRS Adopted in Calendar Year 2015The accounting policies adopted are consistent with those of the previous financial year, except forthe adoption of the following new and amended standards and Philippine Interpretations fromInternational Financial Reporting Interpretations Committee (IFRIC) and improved PFRS whichthe Group has adopted starting January 1, 2015. Unless otherwise indicated, the adoption did nothave any significant impact on the financial statements of the Group.

Amendments to PAS 19, Employee Benefits - Defined Benefit Plans: Employee ContributionsPAS 19 requires an entity to consider contributions from employees or third parties whenaccounting for defined benefit plans. Where the contributions are linked to service, they should beattributed to periods of service as a negative benefit. These amendments clarify that, if the amountof the contributions is independent of the number of years of service, an entity is permitted torecognize such contributions as a reduction in the service cost in the period in which the service isrendered, instead of allocating the contributions to the periods of service.

Improvements to PFRSThe Annual Improvements to PFRS contains non-urgent but necessary amendments to thefollowing standards:

2010-2012 cycle· PFRS 2, Share-based Payment - Definition of Vesting Condition· PFRS 3, Business Combinations - Accounting for Contingent Consideration in a Business

Combination· PFRS 8, Operating Segments - Aggregation of Operating Segments and Reconciliation

of the Total of the Reportable Segments’ Assets to the Entity’s Assets· PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets - Revaluation

Method - Proportionate Restatement of Accumulated Depreciation and Amortization· PAS 24, Related Party Disclosures - Key Management Personnel

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2011-2013 cycle· PFRS 3, Business Combinations - Scope Exceptions for Joint Arrangements· PFRS 13, Fair Value Measurement - Portfolio Exception· PAS 40, Investment Property

New Accounting Standards, Interpretations and Amendments Effective Subsequent to December 31, 2015The Group will adopt the following standards and interpretations enumerated below when thesebecome effective. Except as otherwise indicated, the Group does not expect the adoption of thesenew, revised and amended standards and new Philippine Interpretations from IFRIC to have asignificant impact on its financial statements.

Effective in 2016:

Amendments to PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets -Clarification of Acceptable Methods of Depreciation and Amortization

The amendments clarify the principle in PAS 16 and PAS 38 that revenue reflects a pattern ofeconomic benefits that are generated from operating a business (of which the asset is part) ratherthan the economic benefits that are consumed through use of the asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used invery limited circumstances to amortize intangible assets.

Amendments to PAS 16, Property, Plant and Equipment, and PAS 41, Agriculture - Bearer PlantsThe amendments change the accounting requirements for biological assets that meet the definitionof bearer plants. Under the amendments, biological assets that meet the definition of bearer plantswill no longer be within the scope of PAS 41. Instead, PAS 16 will apply. After initialrecognition, bearer plants will be measured under PAS 16 at accumulated cost (before maturity)and using either the cost model or revaluation model (after maturity). The amendments alsorequire that produce that grows on bearer plants will remain in the scope of PAS 41 measured atfair value less costs to sell. For government grants related to bearer plants, PAS 20, Accounting forGovernment Grants and Disclosure of Government Assistance, will apply.

Amendments to PAS 27, Separate Financial Statements - Equity Method in Separate Financial StatementsThe amendments will allow entities to use the equity method to account for investments insubsidiaries, joint ventures and associates in their separate financial statements. Entities alreadyapplying PFRS and electing to change to the equity method in its separate financial statements willhave to apply that change retrospectively. For first-time adopters of PFRS electing to use theequity method in its separate financial statements, they will be required to apply this method fromthe date of transition to PFRS.

PFRS 10, Consolidated Financial Statements and PAS 28, Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint VentureThese amendments address an acknowledged inconsistency between the requirements in PFRS 10and those in PAS 28 (2011) in dealing with the sale or contribution of assets between an investorand its associate or joint venture. The amendments require that a full gain or loss is recognizedwhen a transaction involves a business (whether it is housed in a subsidiary or not). A partial gainor loss is recognized when a transaction involves assets that do not constitute a business, even ifthese assets are housed in a subsidiary.

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Amendments to PFRS 11, Joint Arrangements - Accounting for Acquisitions of Interests in Joint OperationsThe amendments to PFRS 11 require that a joint operator accounting for the acquisition of aninterest in a joint operation, in which the activity of the joint operation constitutes a business mustapply the relevant PFRS 3 principles for business combinations accounting. The amendments alsoclarify that a previously held interest in a joint operation is not remeasured on the acquisition of anadditional interest in the same joint operation while joint control is retained. In addition, a scopeexclusion has been added to PFRS 11 to specify that the amendments do not apply when theparties sharing joint control, including the reporting entity, are under common control of the sameultimate controlling party. The amendments apply to both the acquisition of the initial interest in ajoint operation and the acquisition of any additional interests in the same joint operation.

PFRS 14, Regulatory Deferral AccountsPFRS 14 is an optional standard that allows an entity, whose activities are subject to rate-regulation, to continue applying most of its existing accounting policies for regulatory deferralaccount balances upon its first-time adoption of PFRS. Entities that adopt PFRS 14 must presentthe regulatory deferral accounts as separate line items on the statement of financial position andpresent movements in these account balances as separate line items in the statement of profit orloss and other comprehensive income. The standard requires disclosures on the nature of, andrisks associated with, the entity’s rate-regulation and the effects of that rate-regulation on itsfinancial statements.

Improvements to PFRSThe Annual Improvements to PFRS (2012-2014 cycle) contains non-urgent but necessaryamendments to the following standards:· PFRS 5, Non-current Assets Held for Sale and Discontinued Operations - Changes in

Methods of Disposal· PFRS 7, Financial Instruments: Disclosures - Servicing Contracts· PFRS 7 - Applicability of the Amendments to PFRS 7 to Condensed Interim Financial

Statements· PAS 19, Employee Benefits - Regional Market Issue Regarding Discount Rate· PAS 34, Interim Financial Reporting - Disclosure of Information ‘Elsewhere in the Interim

Financial Report’

Effective in 2018:

PFRS 9, Financial Instruments (2014 or final version)In July 2014, the final version of PFRS 9, Financial Instruments, was issued. PFRS 9 reflects allphases of the financial instruments project and replaces PAS 39, Financial Instruments:Recognition and Measurement, and all previous versions of PFRS 9. The standard introduces newrequirements for classification and measurement, impairment, and hedge accounting. PFRS 9 iseffective for annual periods beginning on or after January 1, 2018, with early applicationpermitted. Retrospective application is required, but comparative information is not compulsory.Early application of previous versions of PFRS 9 is permitted if the date of initial application isbefore February 1, 2015.

The adoption of PFRS 9 will have an effect on the classification and measurement of the Group’sfinancial assets and impairment methodology for financial assets, but will have no impact on theclassification and measurement of the Group’s financial liabilities. The adoption will also have aneffect on the Group’s application of hedge accounting. The Group is currently assessing theimpact of adopting this standard.

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In addition, the International Accounting Standards Board has issued the following new standardsthat have not yet been adopted locally by the SEC and FRSC. The Group is currently assessing theimpact of these new standards and plans to adopt them on their required effective dates onceadopted locally.

· International Financial Reporting Standards (IFRS) 15, Revenue from Contracts with Customers (effective January 1, 2018)

· IFRS 16, Leases (effectivity January 1, 2019)

Deferred Effectivity:

· Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate

Cash and Cash EquivalentsCash includes cash on hand and in banks. Cash equivalents are short-term, highly liquidinvestments that are readily convertible to known amounts of cash with original maturities ofthree months or less from dates of placement and are subject to an insignificant risk of change invalue.

Financial InstrumentsDate of recognitionThe Group recognizes a financial asset or a financial liability in the consolidated statement offinancial position when it becomes a party to the contractual provisions of the instrument.Purchases or sales of financial assets that require delivery of assets within the time frameestablished by regulation or convention in the marketplace are recognized on the trade date, i.e.,the date that the Group commits to purchase or sell the asset.

Initial recognitionFinancial instruments are initially recognized at fair value, in the case of financial assets notrecorded at fair value through profit or loss, transaction costs that are attributable to the acquisitionof the financial asset.

The Group classifies its financial assets in the following categories: financial assets at FVPL, held-to-maturity (HTM) investments, AFS financial assets and loans and receivable. The Groupclassifies its financial liabilities into financial liabilities at FVPL and other financial liabilities.The classification depends on the purpose for which the investments were acquired and whetherthey are quoted in an active market. The Group determines the classification of its investment atinitial recognition and, where allowed and appropriate, re-evaluates such designation at everyreporting date.

Financial instruments are classified as liability or equity in accordance with the substance of thecontractual arrangement. Interest, dividends, gains and losses relating to a financial instrument ora component that is a financial liability, are reported as expense or income. Distributions toholders of financial instruments classified as equity are charged directly to equity net of anyrelated income tax benefits.

As of December 31, 2015 and 2014, the Group’s financial instruments are of the nature of loansand receivables, financial assets at FVPL, AFS financial assets and other financial liabilities.

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Determination of fair valueThe fair value for financial instruments traded in active markets at the reporting date is based ontheir quoted market price or dealer price quotations (bid price for long positions and ask price forshort positions), without any deduction for transaction costs. When current bid and ask prices arenot available, the price of the most recent transaction provides evidence of the current fair value aslong as there has been no significant change in economic circumstances since the time of thetransaction.

For all other financial instruments not listed in an active market, the fair value is determined byusing appropriate valuation techniques. Valuation techniques include net present valuetechniques, comparison with similar instruments for which market observable prices exist, optionpricing models, and other relevant valuation models.

"Day 1" differenceWhere the transaction price in a non-active market is different than the fair value from otherobservable current market transactions of the same instrument or based on a valuation techniquewhose variables include only data from observable market, the Group recognizes the differencebetween the transaction price and fair value (a “Day 1” difference) in statement of comprehensiveincome unless it qualifies for recognition as some other type of asset or liability. In cases whereuse is made of data which is not observable, the difference between the transaction price andmodel value is only recognized in profit or loss when the inputs become observable or when theinstrument is derecognized. For each transaction, the Group determines the appropriate method ofrecognizing the “Day 1” difference amount.

Loans and receivablesLoans and receivables are nonderivative financial assets with fixed or determinable payments andfixed maturities that are not quoted in an active market. These are not entered into with theintention of immediate or short-term resale and are not designated as AFS or financial assets atFVPL. This accounting policy relates to the consolidated statements of financial position captions“Cash and cash equivalents”, “Receivables, except for “Receivable from employees”, and “Duefrom related parties.”

After initial measurement, loans and receivables are measured at amortized cost using theeffective interest rate method (EIR), less allowance for impairment losses. Amortized cost iscalculated by taking into account any discount or premium on acquisition and fees that are anintegral part of the effective interest rate. The amortization, if any, is included in profit or loss.The losses arising from impairment of loans and receivables are recognized in profit or loss under“Miscellaneous” in “General, administrative and selling expenses” account.

AFS financial assetsAFS financial assets are those which are designated as such or do not qualify to be classified as atFVPL, HTM instruments, or loans and receivables.

Financial assets may be designated at initial recognition as AFS if they are purchased and heldindefinitely, and may be sold in response to liquidity requirements or changes in marketconditions. The Group’s AFS financial assets include equity investments.

After initial measurement, AFS financial assets are measured at fair value. The unrealized gainsand losses arising from the fair valuation of AFS financial assets are recognized in othercomprehensive income in the consolidated statement of financial position.

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When the security is disposed of, the cumulative gain or loss previously is recognized in profit orloss. Where the Group holds more than one investment in the same security, these are deemed tobe disposed of on a first-in first-out basis. The losses arising from impairment of such investmentsare recognized in profit or loss under the under “Miscellaneous” in “General, administrative andselling expenses” account.

Other financial liabilitiesOther financial liabilities pertain to issued financial instruments that are not classified ordesignated as financial liabilities at FVPL and contain contractual obligations to deliver cash orother financial assets to the holder or to settle the obligation other than the exchange of a fixedamount of cash or another financial asset for a fixed number of own equity shares. After initialmeasurement, other financial liabilities are measured at amortized cost using the effective interestrate method. Amortized cost is calculated by taking into account any discount or premium on theissue and fees that are an integral part of the effective interest rate.

This accounting policy applies primarily to the Group’s “Accounts and other payables”, “Due torelated parties”, “Short-term debt”, “Long-term debt”, “Liability from purchased land”, “Bondspayable” and other obligations that meet the above definition (other than liabilities covered byother accounting standards, such as income tax payable and pension liabilities).

Derivative instrumentsThe Group enters into short-term nondeliverable currency forwards contracts and interest andcurrency swap to manage its currency exchange exposure related to short-term foreign currency-denominated monetary liabilities.

Derivative financial instruments recorded under “Prepayments and other current assets” areinitially recognized at fair value on the date on which a derivative contract is entered into and aresubsequently remeasured at fair value. Derivatives are carried as financial assets when the fairvalue is positive and as financial liabilities when the fair value is negative. The method ofrecognizing the resulting gain or loss depends on whether the derivative is designated as a hedgeof an identified risk and qualifies for hedge accounting treatment. The objective of hedgeaccounting is to match the impact of the hedged item and the hedging instrument in profit or loss.To qualify for hedge accounting, the hedging relationship must comply with strict requirementssuch as the designation of the derivative as a hedge of an identified risk exposure, hedgedocumentation, probability of occurrence of the forecasted transaction in a cash flow hedge,assessment (both prospective and retrospective bases) and measurement of hedge effectiveness,and reliability of the measurement bases of the derivative instruments. The Group did not usehedge accounting for its derivatives.

Impairment of Financial AssetsThe Group assesses at each reporting date whether there is objective evidence that a financial assetor group of financial assets is impaired. A financial asset or a group of financial assets is deemedto be impaired if, and only if, there is objective evidence of impairment as a result of one or moreevents that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and thatloss event (or events) has an impact on the estimated future cash flows of the financial asset or thegroup of financial assets that can be reliably estimated. Evidence of impairment may includeindications that the borrower or a group of borrowers is experiencing significant financialdifficulty, default or delinquency in interest or principal payments, the probability that they willenter bankruptcy or other financial reorganization and where observable data indicate that there ismeasurable decrease in the estimated future cash flows, such as changes in arrears or economicconditions that correlate with defaults.

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Loans and receivablesFor loans and receivables carried at amortized cost, the Group first assesses whether objectiveevidence of impairment exists individually for financial assets that are individually significant, orcollectively for financial assets that are not individually significant. If there is objective evidencethat an impairment loss has been incurred, the amount of the loss is measured as the differencebetween the asset’s carrying amount and the present value of the estimated future cash flows(excluding future credit losses that have not been incurred). The carrying amount of the asset isreduced through the use of an allowance account and the amount of loss is charged to profit orloss. Interest income continues to be recognized based on the original effective interest rate of theasset. Receivables, together with the associated allowance accounts, are written off when there isno realistic prospect of future recovery and all collateral has been realized. If, in a subsequentyear, the amount of the estimated impairment loss decreases because of an event occurring afterthe impairment was recognized, the previously recognized impairment loss is reversed. Anysubsequent reversal of an impairment loss is recognized in profit or loss, to the extent that thecarrying value of the asset does not exceed its amortized cost at the reversal date.

If the Group determines that no objective evidence of impairment exists for individually assessedfinancial asset, whether significant or not, it includes the asset in a group of financial assets withsimilar credit risk characteristics and collectively assesses for impairment. Those characteristicsare relevant to the estimation of future cash flows for groups of such assets by being indicative ofthe debtors’ ability to pay all amounts due according to the contractual terms of the assets beingevaluated. Assets that are individually assessed for impairment and for which an impairment lossis, or continues to be recognized are not included in a collective assessment for impairment.

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basisof such credit risk characteristics as type of counterparty, credit history, past due status and term.

Future cash flows in a group of financial assets that are collectively evaluated for impairment areestimated on the basis of historical loss experience for assets with credit risk characteristics similarto those in the Group. Historical loss experience is adjusted on the basis of current observabledata to reflect the effects of current conditions that did not affect the period on which the historicalloss experience is based and to remove the effects of conditions in the historical period that do notexist currently. The methodology and assumptions used for estimating future cash flows arereviewed regularly by the Group to reduce any differences between loss estimates and actual lossexperience.

AFS financial assetsFor AFS financial assets, the Group assesses at each reporting date whether there is objectiveevidence that a financial asset or group of financial assets is impaired. In case of equityinvestments classified as AFS, this would include a significant or prolonged decline in the fairvalue of the investments below its cost. Where there is evidence of impairment, the cumulativeloss - measured as the difference between the acquisition cost and the current fair value, less anyimpairment loss on that financial asset previously recognized in profit or loss - is removed fromother comprehensive income and recognized in profit or loss. Impairment losses on equityinvestments are not reversed through the consolidated statement of income.

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Derecognition of Financial Assets and LiabilitiesFinancial assetA financial asset (or, where applicable a part of a financial asset or part of a group of financialassets) is derecognized when:a. the Group’s right to receive cash flows from the asset has expired;b. the Group retains the right to receive cash flows from the asset, but has assumed an obligation

to pay them in full without material delay to a third party under a “pass-through” arrangement;or

c. the Group has transferred its rights to receive cash flows from the asset and either (i) hastransferred substantially all the risks and rewards of the asset; or (ii) has neither transferrednor retained the risks and rewards of the asset but has transferred the control of the asset

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 risks andrewards of the asset nor transferred control of the asset, the asset is recognized to the extent of theGroup’s continuing involvement in the asset. Continuing involvement that takes the form of aguarantee over the transferred asset is measured at the lower of original carrying amount of theasset and the maximum amount of consideration that the Group could be required to repay.

Financial liabilityA financial liability is derecognized when the obligation under the liability is discharged,cancelled, or has expired. Where an existing financial liability is replaced by another from thesame lender on substantially different terms, or the terms of an existing liability are substantiallymodified, such an exchange or modification is treated as a derecognition of the original liabilityand the recognition of a new liability, and the difference in the respective carrying amounts isrecognized in profit or loss.

Offsetting of Financial InstrumentsFinancial assets and financial liabilities are offset and the net amount reported in the consolidatedstatements of financial position if, and only if, there is a currently enforceable legal right to offsetthe recognized amounts and there is an intention to settle on a net basis, or to realize the asset andsettle the liability simultaneously.

Fair Value MeasurementFair value is the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. The fair valuemeasurement is based on the presumption that the transaction to sell the asset or transfer theliability takes place either:· In the principal market for the asset or liability, or· In the absence of a principal market, in the most advantageous market for the asset or liability· The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participantswould use when pricing the asset or liability, assuming that market participants act in theireconomic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s abilityto generate economic benefits by using the asset in its highest and best use or by selling it toanother market participant that would use the asset in its highest and best use.

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The Group uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, maximizing the use of relevant observableinputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the consolidated financialstatements are categorized within the fair value hierarchy, described as follows, based on thelowest level input that is significant to the fair value measurement as a whole:· Level 1 - Quoted (unadjusted) market prices in active markets for identical assets

or liabilities· Level 2 - Valuation techniques for which the lowest level input that is significant

to the fair value measurement is directly or indirectly observable· Level 3 - Valuation techniques for which the lowest level input that is significant to the fair

value measurement is unobservable

For assets and liabilities that are recognized in the consolidated financial statements on a recurringbasis, the Group determines whether transfers have occurred between Levels in the hierarchy byre-assessing categorization (based on the lowest level input that is significant to the fair valuemeasurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilitieson the basis of the nature, characteristics and risks of the asset or liability and the level of the fairvalue hierarchy as explained above.

Real Estate InventoriesProperty acquired or being constructed for sale in the ordinary course of business, rather than to beheld for rental or capital appreciation, is held as inventory and is measured at the lower of cost andnet realizable value (NRV).Cost includes:· Land cost· Land improvement cost· Borrowing cost· Amounts paid to contractors for construction and development· Planning and design costs, costs of site preparation, professional fees, property transfer taxes,

construction overheads and other related costs.

NRV is the estimated selling price in the ordinary course of business, based on market prices atthe reporting date, less estimated costs of completion and the estimated costs of sale.

The cost of inventory recognized in the consolidated statement of income on disposal isdetermined with reference to the specific costs incurred on the property and allocated to saleablearea based on relative size.

Land Held for Future DevelopmentLand held for future development consists of properties for future development that are carried atthe lower of cost or NRV. Cost includes those costs incurred for development and improvementof the properties while NRV is the estimated selling price in the ordinary course of business, lessestimated cost of completion and estimated costs necessary to make the sale. Uponcommencement of development, the subject land is transferred to “Real estate inventories”.

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Deposits for Purchased landThis represents deposits made to land owners for the purchase of certain parcels of land that areintended for future development. The Group normally makes deposits before a Contract to Sell(CTS) or Deed of Absolute Sale (DOAS) is executed between the Group and the land owner.These are recognized at cost.

Borrowing costsBorrowing costs directly attributable to the acquisition or construction of an asset that necessarilytakes a substantial period of time to get ready for its intended use or sale are capitalized as part ofthe cost of the respective assets. All other borrowing costs are expensed in the period they occur.Borrowing costs consist of interest and other costs that an entity incurs in connection with theborrowing of funds.

The interest capitalized is calculated using the Group’s weighted average cost of borrowings afteradjusting for borrowings associated with specific developments. Where borrowings are associatedwith specific developments, the amounts capitalized is the gross interest incurred on thoseborrowings less any investment income arising on their temporary investment. Interest iscapitalized as from the commencement of the development work until the date of practicalcompletion. The capitalization of finance costs is suspended if there are prolonged periods whendevelopment activity is interrupted. Interest is also capitalized on the purchase cost of a site ofproperty acquired specifically for redevelopment, but only where activities necessary to preparethe asset for redevelopment are in progress.

Investments in and Advances to Joint VentureInvestments in and advances to joint venture (investee companies) are accounted for under theequity method of accounting. A joint venture is a contractual arrangement whereby two or moreparties undertake an economic activity that is subject to joint control, and a jointly controlledentity is a joint venture that involves the establishment of a separate entity in which each venturerhas an interest.

An investment is accounted for using the equity method from the day it becomes a joint venture.On acquisition of investment, the excess of the cost of investment over the investor’s share in thenet fair value of the investee’s identifiable assets, liabilities and contingent liabilities is accountedfor as goodwill and included in the carrying amount of the investment and not amortized. Anyexcess of the investor’s share of the net fair value of the investee’s identifiable assets, liabilitiesand contingent liabilities over the cost of the investment is excluded from the carrying amount ofthe investment, and is instead included as income in the determination of the share in the earningsof the investees.

Under the equity method, the investments in the investee companies are carried in the consolidatedstatement of financial position at cost plus post-acquisition changes in the Group’s share in the netassets of the investee companies, less any impairment in values. The consolidated statement ofincome reflects the share of the results of the operations of the investee companies, if there’s any.The Group’s share of post-acquisition movements in the investee’s equity reserves is recognizeddirectly in equity. Profits and losses resulting from transactions between the Group and theinvestee companies are eliminated to the extent of the interest in the investee companies and forunrealized losses to the extent that there is no evidence of impairment of the asset transferred.Dividends received are treated as a reduction of the carrying value of the investment.

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The Group discontinues applying the equity method when their investments in investee companiesare reduced to zero. Accordingly, additional losses are not recognized unless the Group hasguaranteed certain obligations of the investee companies. When the investee companiessubsequently report net income, the Group will resume applying the equity method but only afterits share of that net income equals the share of net losses not recognized during the period theequity method was suspended.

The reporting dates of the investee companies and the Group are identical and the investeecompanies’ accounting policies conform to those used by the Group for like transactions andevents in similar circumstances.

Upon loss of significant influence over the joint venture, the Group measures and recognizes anyretaining investment at its fair value. Any difference between the carrying amount of the jointventure upon loss of significant influence and the fair value of the retaining investment andproceeds from disposal is recognized in the consolidated statement of income.

Investment PropertiesInitially, investment properties are measured at cost including certain transaction costs.Subsequent to initial recognition, investment properties are stated at fair value, which reflectsmarket conditions at the reporting date. The fair value of investment properties is determined byindependent real estate valuation experts based on recent real estate transactions with similarcharacteristics and location to those of the Group’s investment properties. Gains or losses arisingfrom changes in the fair values of investment properties are included in profit or loss in the periodin which they arise.

Investment properties are derecognized when either they have been disposed of or when theinvestment property is permanently withdrawn from use and no future economic benefit isexpected from its disposal. The difference between the net disposal proceeds and the carryingamount of the asset is recognized in profit or loss in the period of derecognition.

Transfers are made to or from investment property only when there is a change in use. For atransfer from investment property to owner’s occupied property, the deemed cost for subsequentaccounting is the fair value at the date of change in use. If owner’s occupied property becomes aninvestment property, the Group accounts for such property in accordance with the policy statedunder property and equipment up to the date of change in use.

For a transfer from investment property to inventories, the change in use is evidenced bycommencement of development with a view to sale. When the Group decides to dispose of aninvestment property without development, it continues to treat the property as an investmentproperty until it is derecognized and does not treat it as inventory. Similarly, if an entity begins toredevelop an existing investment property for continued future use as investment property, theproperty remains an investment property and is not reclassified as owner-occupied property duringthe redevelopment. For a transfer from investment property carried at fair value to inventories, theproperty's deemed cost for subsequent accounting shall be its fair value at the date of change inuse.

Property and EquipmentProperty and equipment are carried at cost less accumulated depreciation and amortization and anyimpairment in value.

The initial cost of property and equipment consists of its purchase price, including import duties,taxes and any directly attributable costs of bringing the asset to its working condition and location

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for its intended use. Expenditures incurred after the property and equipment have been put intooperation, such as repairs and maintenance, are normally charged against operations in the periodin which the costs are incurred. When significant parts of property and equipment are required tobe replaced in intervals, the Group recognizes such parts as individual assets with specific usefullives and depreciation and amortization, respectively. Likewise, when a major inspection isperformed, its cost is recognized in the carrying amount of the equipment as a replacement if therecognition criteria are satisfied. All other repair and maintenance costs are recognized in profit orloss as incurred.

Depreciation and amortization of property and equipment commences once the property andequipment are put into operational use and is computed on a straight-line basis over the estimateduseful life (EUL) of the property and equipment as follows:

YearsOffice equipment 3 - 5Computer equipment 3 - 5Furniture and fixtures 3 - 5Transportation equipment 5Leasehold improvements 5 or lease term, whichever is shorterConstruction equipment 5

The useful lives and depreciation and amortization method are reviewed at financial year end toensure that the period and method of depreciation and amortization are consistent with theexpected pattern of economic benefits from items of property and equipment. When property andequipment are retired or otherwise disposed of, the cost and the related accumulated depreciationand amortization and accumulated provision for impairment losses, if any, are removed from theaccounts and any resulting gain or loss is credited to or charged against current operations.

Fully depreciated property and equipment are retained in the accounts until they are no longer inuse and no further depreciation and amortization is charged against current operations.

Intangible AssetsIntangible assets acquired separately are measured on initial recognition at cost. Following initialrecognition, intangible assets are carried at cost less any accumulated amortization and anyaccumulated impairment losses. Internally generated intangible assets, excluding capitalizeddevelopment costs, are not capitalized and expenditure is reflected in profit or loss in the year inwhich the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assetswith finite lives are amortized over the useful economic life and assessed for impairmentwhenever there is an indication that the intangible asset may be impaired. The amortization periodand the amortization method for an intangible asset with a finite useful life is reviewed at least ateach financial year end. Changes in the expected useful life or the expected pattern ofconsumption of future economic benefits embodied in the asset is accounted for by changing theamortization period or method, as appropriate, and are treated as changes in accounting estimates.The amortization expense on intangible assets with finite lives is recognized in the expensecategory of profit or loss consistent with the function of the intangible asset.

Gains or losses arising from derecognition of an intangible asset are measured as the differencebetween the net disposal proceeds and the carrying amount of the asset and are recognized inprofit or loss.

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As of December 31, 2015 and 2014, the Group’s intangible assets consist of software costs andtrademarks.

Software costCosts that are directly associated with identifiable and unique software controlled by the Groupand will generate economic benefits exceeding costs beyond one year, are recognized as intangibleassets to be measured at cost less accumulated amortization and accumulated impairment, if any.Otherwise, such costs are recognized as expense as incurred.

Expenditures which enhance or extend the performance of computer software programs beyondtheir original specifications are recognized as capital improvements and added to the original costof the software. System development costs, recognized as assets, are amortized using the straight-line method over their useful lives, but not exceeding a period of 5 years. Where an indication ofimpairment exists, the carrying amount of computer system development costs is assessed andwritten down immediately to its recoverable amount.

TrademarksLicenses for use of intellectual property have been granted for a period of 10 years by the relevantgovernment agency. The trademarks provide the option of renewal at little or no cost to theGroup. Accordingly, these licenses are assessed as having indefinite useful life.

Impairment of Nonfinancial AssetsThe Group assesses as at reporting date whether there is an indication that its nonfinancial assets(e.g. deposits for purchase land, property and equipment and intangible assets) may be impaired.If any such indication exists, or when annual impairment testing for an asset is required, the Groupmakes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is calculatedas the higher of the asset’s or cash-generating unit’s fair value less costs to sell and its value in useand is determined for an individual asset, unless the asset does not generate cash inflows that arelargely independent of those from other assets or groups of assets. Where the carrying amount ofan asset exceeds its recoverable amount, the asset is considered impaired and is written down to itsrecoverable amount. In assessing value in use, the estimated future cash flows are discounted totheir present value using a pre-tax discount rate that reflects current market assessment of the timevalue of money and the risks specific to the asset. Impairment losses are recognized in theexpense categories of profit or loss consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previouslyrecognized impairment losses may no longer exist or may have decreased. If such indicationexists, the recoverable amount is estimated. A previously recognized impairment loss is reversedonly if there has been a change in the estimates used to determine the asset’s recoverable amountsince the last impairment loss was recognized. If that is the case, the carrying amount of the assetis increased to its recoverable amount. That increased amount cannot exceed the carrying amountthat would have been determined, net of accumulated depreciation and amortization, had noimpairment loss been recognized for the asset in prior years. Such reversal is recognized in profitor loss unless the asset is carried at revalued amount, in which case the reversal is treated asrevaluation increase. After such a reversal, the depreciation charge is adjusted in future periods toallocate the asset’s revised carrying amount, less any residual value, on a systematic basis over itsremaining useful life.

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EquityCapital stock and additional paid-in capitalThe Group records common stocks at par value and additional paid-in capital in excess of the totalcontributions received over the aggregate par values of the equity share. Incremental costsincurred directly attributable to the issuance of new shares are shown in equity as a deductionfrom proceeds, net of tax.

Retained earningsRetained earnings represent accumulated earnings of the Group less any dividends declared, ifany.

Treasury sharesTreasury shares are own equity instruments which are reacquired and are recognized at cost anddeducted from equity. No gain or loss is recognized in the profit or loss on the purchase, sale,issue or cancellation of the Parent Company’s own equity instruments. Any difference betweenthe carrying amount and the consideration, if reissued, is recognized in additional paid-in capital.Voting rights related to treasury shares are nullified for the Parent Company and no dividends areallocated to them respectively. When the shares are retired, the capital stock account is reduced byits par value and the excess of cost over par value upon retirement is debited to additional paid-incapital when the shares were issued and to retained earnings for the remaining balance.

Revenue RecognitionRevenue is recognized to the extent that it is probable that the economic benefits will flow to theGroup and the amount of revenue can be reliably measured. The Group assesses its revenuearrangements against specific criteria in order to determine if it is acting as principal or agent. TheGroup has concluded that it is acting as principal in all of its revenue arrangements. Thefollowing specific recognition criteria must also be met before revenue is recognized:

Real estate salesFor real estate sales, the Group assesses whether it is probable that the economic benefits will flowto the Group when the sales prices are collectible. Collectibility of the sales price is demonstratedby the buyer’s commitment to pay, which in turn is supported by substantial initial and continuinginvestments that give the buyer a stake in the property sufficient that the risk of loss throughdefault motivates the buyer to honor its obligation to the seller. Collectibility is also assessed byconsidering factors such as the credit standing of the buyer, age and location of the property.Revenue from sales of completed real estate projects is accounted for using the full accrualmethod. In accordance with Philippine Interpretations Committee (PIC) Q&A No. 2006-01, thepercentage-of-completion method is used to recognize income from sales of projects where theGroup has material obligations under the sales contract to complete the project after the property issold, the equitable interest has been transferred to the buyer, construction is beyond preliminarystage (i.e., engineering, design work, construction contracts execution, site clearance andpreparation, excavation and the building foundation are finished), and the costs incurred or to beincurred can be measured reliably. Under this method, revenue is recognized as the relatedobligations are fulfilled, measured principally on the basis of the estimated completion of a physical proportion of the contract work.

Any excess of collections over the recognized receivables are included in the “Customers’advances and deposits” account in the “Liabilities” section of the consolidated statement offinancial position.

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If any of the criteria under the full accrual or percentage-of-completion method is not met, thedeposit method is applied until all the conditions for recording a sale are met. Pending recognitionof sale, cash received from buyers are presented under the “Customers’ advances and deposits”account in the “Liabilities” section of the consolidated statement of financial position.

Leasing revenueThe Group leases its commercial real estate properties to others through operating leases. Rentalincome on leased properties is recognized on a straight-line basis over the lease term, or based ona certain percentage of the gross revenue of the tenants, as provided under the terms of the leasecontract. Contingent rents are recognized as revenue in the period in which they are earned.

Property management fee and other servicesRevenue from property management and other services is recognized when the related services arerendered. Property management fee and other services consist of revenue arising frommanagement contracts, auction services and technical services.

Interest incomeInterest income is recognized as it accrues, taking into account the effective yield on the asset.

Income from forfeited collectionsIncome from forfeited collections recorded under “Interest and other income” is recognized whenthe deposits from potential buyers are deemed nonrefundable due to prescription of the period forentering into a contracted sale. Such income is also recognized, subject to the provisions ofRepublic Act 6552, Realty Installment Buyer Act, upon prescription of the period for the paymentof required amortizations from defaulting buyers.

Other incomeOther customer-related fees such as penalties and surcharges are recognized when collected.

Cost and Expense RecognitionCost of real estate salesCost of real estate sales is recognized consistent with the revenue recognition method applied.Cost of residential house and lots and condominium units sold before the completion of thedevelopment is determined on the basis of the acquisition cost of the land plus its full developmentcosts, which include estimated costs for future development works, as determined by theCompany’s in-house technical staff.

Cost of leasingCost of leasing pertains to direct costs of leasing the Group’s commercial properties. These costsare expensed as incurred.

Cost of servicesCost of services pertains to direct costs of property management fee and other services. Thesecosts are expensed as incurred.Commission and other selling expensesSelling expenses such as commissions paid to sales or marketing agents on the sale of pre-completed real estate units are deferred when recovery is reasonably expected and are charged toexpense in the period in which the related revenue is recognized as earned. These are recorded as“Deferred selling expenses” under “Prepayments and other current assets” and “Other noncurrentassets” accounts. Accordingly, when the percentage of completion method is used, commissionsare likewise charged to expense in the period the related revenue is recognized.

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General and administrative expensesGeneral and administrative expenses constitute costs of administering the business and areexpensed as incurred.

Pension CostPension cost is computed using the projected unit credit method. This method reflects servicesrendered by employees up to the date of valuation and incorporates assumptions concerningemployees’ projected salaries. Actuarial valuations are conducted with sufficient regularity, withan option to accelerate when significant changes to underlying assumptions occur.

Pension cost includes a) current service cost, interest cost, past service cost; b) gains and losses,and curtailment and non - routine settlement; and c) net interest cost on benefit obligation.

The liability recognized by the Group in respect of the unfunded defined benefit pension plan isthe present value of the defined benefit obligation at the reporting date together with adjustmentsfor unrecognized actuarial gains or losses and past service costs that shall be recognized in laterperiods. The defined benefit obligation is calculated by independent actuaries using the projectedunit credit method. The present value of the defined benefit obligation is determined bydiscounting the estimated future cash outflows using risk-free interest rates of government bondsthat have terms to maturity approximating the terms of the related pension liabilities or applying asingle weighted average discount rate that reflects the estimated timing and amount of benefitpayments.

Remeasurements, comprising of actuarial gains or losses, the effect of the asset ceiling, excludingnet interest cost and the return on plan assets (excluding net interest), are recognized immediatelyin the statement of financial position with a corresponding debit or credit to OCI in the period inwhich they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Operating LeasesThe determination of whether an arrangement is, or contains, a lease is based on the substance ofthe arrangement at inception date, whether fulfillment of the arrangement is dependent on the useof a specific asset or assets or the arrangement conveys a right to use the asset. A reassessment ismade after inception of the lease only if one of the following applies:

(a) There is a change in contractual terms, other than a renewal or extension of the arrangement;(b) A renewal option is exercised or extension granted, unless the term of the renewal or

extension was initially included in the lease term;(c) There is a change in the determination of whether fulfillment is dependent on a specified

asset; or(d) There is substantial change to the asset.

Where a reassessment is made, lease accounting shall commence or cease from the date when thechange in circumstances gave rise to the reassessment for scenarios (a), (c), or (d) and at the dateof renewal or extension period for scenario (b).Leases where the lessor retains substantially all the risks and benefits of the ownership of the assetare classified as operating leases. Fixed lease payments are recognized on a straight-line basisover the lease while the variable rent is recognized as an expense based on the terms of the leasecontract.

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Income TaxesCurrent taxCurrent tax assets and liabilities for the current and prior periods are measured at the amountexpected to be recovered from or paid to the taxation authorities. The tax rates and tax laws usedto compute the amount are those that have been enacted or substantively enacted as of thereporting date.

Deferred taxDeferred tax is provided using the liability method on temporary differences, with certainexceptions, at the reporting date between the tax bases of assets and liabilities and their carryingamounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, including assetrevaluations. Deferred tax assets are recognized for all deductible temporary differences, carryforward benefit of unused tax credits from the excess of minimum corporate income tax (MCIT)over regular corporate income tax (RCIT), and unused net operating loss carryover (NOLCO), tothe extent that it is probable that sufficient taxable income will be available against which thedeductible temporary differences and the carry forward of unused tax credits from MCIT andunused NOLCO can be utilized. Deferred tax, however, is not recognized on temporarydifferences that arise from the initial recognition of an asset or liability in a transaction that is not abusiness combination and, at the time of the transaction, affects neither the accounting income nortaxable income.

Deferred tax liabilities are not provided on non-taxable temporary differences associated withinvestments in domestic subsidiaries and associates.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to theextent that it is no longer probable that sufficient taxable income will be available to allow all orpart of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed ateach reporting date and are recognized to the extent that it has become probable that future taxableprofit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theyear when the asset is realized or the liability is settled, based on tax rates (and tax laws) that havebeen enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to setoff current tax assets against current tax liabilities and the deferred taxes relate to the same taxableentity and the same taxation authority.

Foreign Currency TransactionsTransactions denominated in foreign currencies are initially recorded using the exchange ratesprevailing at transaction dates. Foreign currency-denominated monetary assets and liabilities areretranslated using the closing exchange rates at reporting date. Exchange gains or losses arisingfrom foreign currency transactions are credited to or charged against current operations.

Segment ReportingThe Group’s operating businesses are organized and managed separately according to the natureof the products and services provided, with each segment representing a strategic business unitthat offers different products and serves different markets. Financial information on the Group’sbusiness segments is presented in Note 32 to the consolidated financial statements.

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Earnings Per ShareBasic earnings per share (EPS) is computed by dividing net income attributable to commonstockholders by the weighted average number of common shares issued and outstanding duringthe year and adjusted to give retroactive effect to any stock dividends declared during the period.Diluted EPS is computed by dividing net income attributable to common equity holders by theweighted average number of common shares issued and outstanding during the year plus theweighted average number of common shares that would be issued on conversion of all the dilutivepotential common shares. The calculation of diluted EPS does not assume conversion, exercise orother issue of potential common shares that would have an antidilutive effect on earnings pershare.

As of December 31, 2015 and 2014, the Group has no dilutive potential common shares.

ContingenciesContingent liabilities are not recognized in the consolidated financial statements but are disclosedunless the possibility of an outflow of resources embodying economic benefits is remote.Contingent assets are not recognized in the consolidated financial statements but disclosed whenan inflow of economic benefits is probable.

Events After the Reporting DatePost year-end events up to the date of auditors’ report that provide additional information aboutthe Group’s position at the reporting date (adjusting events) are reflected in the consolidatedfinancial statements. Post year-end events that are not adjusting events are disclosed in theconsolidated financial statements when material.

3. Significant Accounting Judgments and Estimates

The preparation of the consolidated financial statements in compliance with PFRS requires theGroup to make judgments and estimates that affect the amounts reported in the consolidatedfinancial statements and accompanying notes. The judgments, estimates and assumptions used inthe accompanying consolidated financial statements are based upon management’s evaluation ofrelevant facts and circumstances as of the date of the consolidated financial statements. Futureevents may occur which will cause the judgments and assumptions used in arriving at theestimates to change. The effects of any change in judgments and estimates are reflected in theconsolidated financial statements as they become reasonably determinable.

Judgments and estimates are continually evaluated and are based on historical experience andother factors, including expectations of future events that are believed to be reasonable under thecircumstances.

JudgmentsIn the process of applying the Group’s accounting policies, management has made the followingjudgments, apart from those involving estimations, which have the most significant effect on theamounts recognized in the consolidated financial statements.

Operating lease commitments - Group as lesseeThe Group has entered into contracts of lease with La Costa Development Corporation (formerlyPenta Pacific Realty Corporation) and other unit owners of the Pacific Star Building for itsadministrative office location and model units for ongoing projects. The Group has determinedthat these are operating leases since they do not bear substantially all the significant risks and

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rewards of ownership of these properties. In determining significant risks and benefits ofownership, the Group considered, among others, the significance of the lease term as comparedwith the estimated useful life of the related asset.

Operating lease commitments - Group as lessorThe Group has entered into commercial property leases on its investment property portfolio.Based on an evaluation of the terms and conditions of the arrangements, the Group has determinedthat it retains all the significant risks and rewards of ownership of these properties and accountsfor them as operating leases.

A number of the Group’s operating lease contracts are accounted for as noncancellable operatingleases and the rest are cancellable. In determining whether a lease contract is cancellable or not,the Group considers, among others, the significance of the penalty, including the economicconsequence to the lessee.

Distinction between investment properties and land held for future developmentThe Group determines a property as investment property if such is not intended for sale in theordinary course of business, but are held primarily to earn rental income and capital appreciation.Land held for future development comprises property that is held for sale in the ordinary course ofbusiness. Principally, this is residential property that the Group develops and intends to sell beforeor on completion of construction.

Distinction between real estate inventories and land held for future developmentThe Group determines whether a land qualifies as land held for future development once theGroup has a concrete plan on how the land shall be developed the succeeding years. The Groupshall then classify the land as part of the real estate inventories upon the commencement of theactual development of the land.

Receivable financingThe Group has entered into various receivable financing transactions with local banks to assign itscontracts receivables. The Group has determined that it has retained substantially all the risks andrewards of ownership of these receivables because the agreements provide that the Group willsubstitute defaulted contracts to sell with other contracts to sell of equivalent value.

Thus, the Group still retains the assigned receivables in the receivables account and records theproceeds from these sales as long-term debt (see Note 17). The gross amount of ICRs used ascollateral amounted to P=6,213.25 million and P=1,369.87 million as of December 31, 2015 and2014, respectively (see Note 5).

ContingenciesThe Group is currently involved in various legal proceedings. The estimate of the probable costsfor the resolution of these claims has been developed in consultation with outside counselhandling the defense in these matters and is based upon an analysis of potential results. TheGroup currently does not believe that these proceedings will have a material effect on the Group’sfinancial position. It is possible, however, that future results of operations could be materiallyaffected by changes in the estimates or in the effectiveness of the strategies relating to theseproceedings.

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Deferred selling expenses recoverabilityThe Group defers recognition of its direct selling expenses and charges these to profit or loss inthe period the related revenue is recognized. The Group assesses its projected performance indetermining the sufficiency of future revenues against which these expenses can be deductedfrom.

As of December 31, 2015 and 2014, carrying values of deferred selling expenses areP=1,082.19 million and P=1,594.43 million, respectively (see Note 9 and 14).

Current and noncurrent distinction for deferred selling expensesThe Group presents current and noncurrent portions of its deferred selling expenses. The Groupestimates that the current portion pertains to the amount that will be expensed out within one year,with reference to the expected percentage of completion in the following year. The portion that isexpected to be expensed out more than one year from the balance sheet date is presented undernoncurrent assets.

As of December 31, 2015 and 2014, current portions of deferred selling expenses areP=623.93 million and P=653.46 million, respectively while noncurrent portions are P=458.26 millionand P= 940.97 million (see Note 9 and 14).

Interest in joint arrangements The Group has assessed that its joint arrangement is a joint venture since because it has rights to the net assets of the arrangement.

Management’s Use of Estimates and AssumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at thereporting date, that have a significant risk of causing a material adjustment to the carryingamounts of assets and liabilities within the next financial year are discussed below.

Revenue and cost recognitionThe Group’s revenue recognition policies require management to make use of estimates andassumptions that may affect the reported amounts of revenue and costs. The Group’s revenuefrom real estate recognized based on the percentage of completion is measured principally on thebasis of the estimated completion of a physical proportion of the contract work. The rate ofcompletion is estimated by third party to determine whether it approximates the actual completionrate. Changes in estimate may affect the reported amounts of revenue and cost of real estate salesand receivables. The carrying values of the installment contracts receivable amounted toP=12,433.55 million and P=11,553.02 million as of December 31, 2015 and 2014, respectively(see Note 5).

Collectibility of the sales priceIn determining whether the sales price is collectible, the Group considers that the initial andcontinuing investments by the buyer of 5% would demonstrate the buyer’s commitment to pay.The carrying values of the installment contracts receivable arising from these sales contractsamounted to P=12,433.55 million and P=11,553.02 million as of December 31, 2015 and 2014,respectively (see Note 5).

Fair value of investment propertiesThe Group discloses the fair values of its investment properties in accordance with PAS 40. TheGroup carries its investment properties at fair value, with changes in fair value being recognized inprofit or loss. The Group engages independent valuation specialists to determine the fair value.For the investment property, the appraisers used a valuation technique based on comparable

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market data available for such properties. Gain on changes in fair value of investment propertiesamounted to P=755.60 million and P=147.30 million in 2015 and 2014, respectively (see Note 12).

Carrying values of the investment properties amounted to P=5,260.12 million and P=4,387.82million as of December 31, 2015 and 2014, respectively (see Note 12).

Impairment losses on receivables and due from related partiesThe Group reviews its loans and receivables at each reporting date to assess whether an allowancefor impairment should be recorded in the consolidated statement of financial position and anychanges thereto in profit or loss. In particular, judgment by management is required in theestimation of the amount and timing of future cash flows when determining the level of allowancerequired. Such estimates are based on assumptions about a number of factors. Actual results mayalso differ, resulting in future changes to the allowance.

The Group maintains allowance for impairment losses based on the result of the individual andcollective assessment under PAS 39. Under the individual assessment, the Group is required toobtain the present value of estimated cash flows using the receivable’s original effective interestrate. Impairment loss is determined as the difference between the receivables’ carrying balanceand the computed present value. Factors considered in individual assessment are payment history,past-due status and term. The collective assessment would require the Group to classify itsreceivables based on the credit risk characteristics (customer type, payment history, past due statusand term) of the customers. Impairment loss is then determined based on historical lossexperience of the receivables grouped per credit risk profile. Historical loss experience is adjustedon the basis of current observable data to reflect the effects of current conditions that did not affectthe period on which the historical loss experience is based and to remove the effects of conditionsin the historical period that do not exist currently. The methodology and assumptions used for theindividual and collective assessments are based on management’s judgment and estimate.

Therefore, the amount and timing of recorded expense for any period would differ depending onthe judgments and estimates made for the year.

As of December 31, 2015 and 2014, the allowance for impairment losses on receivables of theGroup amounted to P=10.98 million and P=12.70 million, respectively (see Note 5).

The carrying values of these assets are as follows:

2015 2014Receivables (Note 5) P=13,337,816,110 P=11,936,034,857Due from related parties (Note 28) 149,414,158 145,606,224

Estimating NRV of real estate inventories and land held for future developmentThe Group reviews the NRV of real estate inventories and land held for future development andcompares it with the cost since assets should not be carried in excess of amounts expected to berealized from sale. Real estate inventories and land held for future development are written downbelow cost when the estimated NRV is found to be lower than the cost.

NRV for completed real estate inventories and land held for future development is assessed withreference to market conditions and prices existing at the reporting date and is determined by theGroup having taken suitable external advice and in light of recent market transactions.

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NRV in respect of inventory under construction is assessed with reference to market prices at thereporting date for similar completed property, less estimated costs to complete construction less anestimate of the time value of money to the date of completion. The estimates used took intoconsideration fluctuations of price or cost directly relating to events occurring after the end of theperiod to the extent that such events confirm conditions existing at the end of the period.

The carrying values of these assets are as follows:

2015 2014Real estate inventories (see Note 6) P=11,124,797,950 P=8,083,615,926Land held for future development

(see Notes 7 and 9) 431,333,944 474,647,129

Impairment of nonfinancial assetsThe Group assesses impairment on its nonfinancial assets (e.g. property and equipment andintangible assets) and considers the following important indicators:

· Significant changes in asset usage;· Significant decline in assets’ market value;· Obsolescence or physical damage of an asset;· Significant underperformance relative to expected historical or projected future operating

results;· Significant changes in the manner of usage of the acquired assets or the strategy for the

Group’s overall business; and· Significant negative industry or economic trends.

The Group’s intangible assets with indefinite life are tested for impairment annually.If such indications are present and where the carrying amount of the asset exceeds its recoverableamount, the asset is considered impaired and is written down to its recoverable amount. Therecoverable amount is the asset’s fair value less cost to sell. The fair value less cost to sell is theamount obtainable from the sale of an asset in an arm’s length transaction while value in use is thepresent value of estimated future cash flows expected to be generated from the continued use ofthe asset. The Group is required to make estimates and assumptions that can materially affect thecarrying amount of the asset being assessed.

The carrying values of the nonfinancial assets follow:

2015 2014Advances to suppliers and contractors (Note 8) P=1,214,360,002 P=1,014,896,505Prepayments and other current assets (Note 9)* 876,359,287 855,537,191Deposits for purchased land (Note 10) 881,439,583 710,851,147Investment in and advances to joint ventures (Note 11) 386,986,800 386,986,800Property and equipment (See Note 13) 191,506,908 121,821,944Other noncurrent assets (Note 14) 679,357,450 1,203,827,192Excluding deposits

No impairment was recognized for the Group’s nonfinancial assets as of December 31, 2015 and2014.

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Estimating EUL of property and equipment and intangible assetsThe Group estimates the useful lives of its property and equipment and intangible assets other thanthose with indefinite lives based on the period over which the assets are expected to be availablefor use. The Group reviews annually the estimated useful lives of property and equipment basedon factors that include asset utilization, internal technical evaluation, technological changes,environmental and anticipated use of the assets tempered by related industry benchmarkinformation. It is possible that future results of operations could be materially affected by changesin these estimates brought about by changes in the factors mentioned. A reduction in theestimated useful lives of property and equipment would increase depreciation and amortizationexpense and decrease noncurrent assets. Property and equipment amounted to P=191.51 millionand P=121.82 million as of December 31, 2015 and 2014, respectively (see Note 13).

Recognition of deferred tax assetsThe Group reviews the carrying amounts of deferred tax assets at each reporting date and reducesthe amounts to the extent that it is no longer probable that sufficient taxable income will beavailable to allow all or part of the deferred tax assets to be utilized. Significant judgment isrequired to determine the amount of deferred tax assets that can be recognized based upon thelikely timing and level of future taxable income together with future planning strategies. TheGroup assessed its projected performance in determining the sufficiency of the future taxableincome. As of December 31, 2015 and 2014, carrying values of these assets are P=731.39 millionand P=528.36 million, respectively (see Note 27). The Group has an unrecognized deferred taxasset amounting to P=2.56 million and P=0.35 million in 2015 and 2014, respectively (see Note 27).

Estimating pension obligationThe determination of the Group’s pension obligations and cost of retirement benefits is dependenton the selection of certain assumptions used by actuaries in calculating such amounts. Thoseassumptions are described in Note 29 to the consolidated financial statements and include amongothers, discount rates, rate of expected return on plan assets, and salary increase rates. While theGroup believes that the assumptions are reasonable and appropriate, significant differences in theactual experience or significant changes in the assumptions may materially affect the pensionobligations. The Group’s net pension liabilities amounted to P=206.69 million and P=191.28 millionas of December 31, 2015 and 2014, respectively (see Note 29).

Capitalization of borrowing costsThe Group capitalizes the interest incurred on their borrowings that are directly attributable to theconstruction of its projects. These capitalized borrowing costs form part of the real estateinventories and are expensed out to cost of real estate sales. The amount of borrowing costscapitalized amounted to P=401.90 million and P=464.78 million in 2015 and 2014, respectively(see Note 6).

Fair value of financial instrumentsWhere the fair values of financial instruments recorded in the consolidated statement of financialposition or disclosed in the notes cannot be derived from active markets, they are determinedusing internal valuation techniques using generally accepted market valuation models. The inputsto these models are taken from observable markets where possible, but where this is not feasible,estimates are used in establishing fair values. These estimates may include considerations ofliquidity, volatility, and correlation. See Note 31 for the related fair value disclosures.

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4. Cash and Cash Equivalents

This account consists of:

2015 2014Cash on hand P=126,651 P=126,651Cash in banks 1,675,712,245 855,586,174Cash equivalents 332,486,226 573,532,281

P=2,008,325,122 P=1,429,245,106

Cash in banks earns interest at the prevailing bank deposit rates.

Cash equivalents are short-term, highly liquid investments that are made for varying periods of upto three months depending on the immediate cash requirements of the Group and earn interest atthe prevailing short-term rates ranging from 0.8% to 3.00% and 0.5% to 2.63% in 2015 and 2014,respectively.

Interest income on cash and cash equivalents amounted to P=13.31 million and P=119.89 million in2015 and 2014, respectively (see Note 23).

5. Receivables


2015 2014Trade receivables

ICR P=12,433,551,954 P=11,553,022,779Related parties (see Note 28) 383,188,639 163,559,540Leasing receivable 85,688,816 55,560,319Management fees 63,269,993 66,395,787Auction fee and commissions − 2,392,406

Receivable from employees 155,345,412 61,680,116Advances to customers 38,567,901 35,687,597Other receivables 189,182,818 10,432,114

13,348,795,533 11,948,730,658Less allowance for impairment losses 10,979,423 12,695,801

13,337,816,110 11,936,034,857Less noncurrent portion of ICRs 3,602,989,572 4,380,143,446

P=9,734,826,538 P=7,555,891,411

ICRs pertain to receivables from the sale of real estate properties. These are collectible in monthlyinstallments over a period of one to five years, bear no interest and with lump sum collection uponproject turnover. Titles to real estate properties are not transferred to the buyer until full paymenthas been made.

Unamortized discountAs of December 31, 2015 and 2014, installment contracts receivable with a nominal amount ofP=14,855.35 million and P=12,973.16 million were recorded at amortized cost of P=12,433.55million and P=11,553.02 million, respectively. These receivables are noninterest-bearing and aredue to be collected within one to five-year time. The fair value upon initial recognition is derived

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using the discounted cash flow model using discount rates ranging from 2.67% to 5.43% and2.75% to 6.20%, in 2015 and 2014, respectively.

Movements in the unamortized discount on installment contracts receivables follow:

2015 2014At January 1 P=1,420,136,218 P=147,612,347Additions 1,803,412,604 2,098,170,077Accretion for the year (Note 23) (801,750,294) (825,646,206)At December 31 P=2,421,798,528 P=1,420,136,218

Receivable financingIn 2015 and 2014, the Group entered into various agreements with a local bank whereby theGroup assigned its ICRs at average interest rates of 5.26% to 8.50% and 6.00% to 8.50%,respectively (see Note 17). The agreements provide that the Group will substitute defaultedcontracts to sell with other contracts to sell of equivalent value.

The Group still retains the assigned receivables in the receivables account and records theproceeds from these sales as long-term debt (see Note 17). The gross amount of ICRs used ascollateral amounted to P=6,213.25 million and P=1,369.87 million as of December 31, 2015 and2014, respectively.

Leasing receivable pertains to receivables arising from leasing revenue. These receivables arebilled to tenants and are expected to be collected within one (1) year.

Management fees are revenues arising from property management contracts. These are collectibleon a 15- to 30-day basis depending on the terms of the management service agreement.

Auction fees and commissions are revenues earned by the Group in facilitating auction ofproperties and in marketing real estate properties developed by third parties and affiliates.Receivable from auction fees and commissions are due within 30 days upon billing.

Receivable from employees pertain to cash advances for retitling costs and other operational andcorporate-related expenses. This also includes salary and other loans granted to the employeesand are recoverable through salary deductions.

Advances to customers pertain to expenses paid by the Group in behalf of the customers for thetaxes and other costs incurred in securing the title in the name of the customers. These receivablesare billed separately to the respective buyers and are expected to be collected within one (1) year.

Other receivables pertain to the amount collectible from customers related to accruals made by theGroup for VAT on real estate sales. These will be collected along with the monthly installmentsfrom customers over a period of one to five years. This also includes advances made tocondominium corporation of turned over projects which are due and demandable and bear nointerest.

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Movements in the Group’s allowance for impairment losses follow:

2015

Managementfee

Auction feeand

commissions

Receivablefrom

employees TotalAt January 1 P=3,827,294 P=981,058 P=7,887,449 P=12,695,801Provision 67,668 15,619 – 83,287Accounts written-off (802,988) (996,677) – (1,799,665)At December 31 P=3,091,974 P=– P=7,887,449 P=10,979,423Individually impaired P=3,091,974 P=– P=– P=3,091,974Collectively impaired – – 7,887,449 7,887,449Total P=3,091,974 P=– P=7,887,449 P=10,979,423

2014

Managementfee

Auction feeand

commissions

Receivablefrom

employees TotalAt January 1 P=3,545,432 P=981,058 P=7,887,449 P=12,413,939Provision 281,862 − – 281,862At December 31 P=3,827,294 P=981,058 P=7,887,449 P=12,695,801Individually impaired P=3,827,294 P=− P=– P=3,827,294Collectively impaired − P=981,058 7,887,449 8,868,507Total P=3,827,294 P=981,058 P=7,887,449 P=12,695,801

6. Real Estate Inventories

This account represents the real estate projects for which the Group has been granted license tosell by the Housing and Land Use Regulatory Board of the Philippines. Details of this accountfollow:

2015 2014Condominium units P=10,630,194,367 P=7,633,630,083Residential house and lots 494,603,583 449,985,843

P=11,124,797,950 P=8,083,615,926

The rollforward of this account follows:

2015 2014At January 1 P=8,083,615,926 P=7,026,881,612Construction costs incurred 6,825,211,459 6,817,160,408Transfers from investment properties

(see Note 12) 654,833,415 41,763,183Borrowing costs capitalized (see Notes 17 and 18) 401,896,282 464,781,538Transfer from land held for future development

(see Note 9) 43,313,185 –Depreciation of construction equipment (see Note 13) 32,376,473 40,427,524Transfer to property and equipment (see Note 13) (107,861,379) –Cost of real estate sales (4,808,587,411) (6,342,613,886)At December 31 P=11,124,797,950 P=8,083,615,926

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Investment properties transferred to inventories amounting to P=654.83 million relates to Spiretower, following the change in project plan from leasing to sale of office spaces in 2015.

General and specific borrowings were used to finance the Group’s ongoing real estate projects.The related borrowing costs were capitalized as part of real estate inventories. The capitalizationrate used to determine the borrowings eligible for capitalization ranges from 5.26% to 8.50% in2015 and 4.85% to 8.75% in 2014.

Transfer to real estate inventories from land held for future development during the year amountedto P=43.31 million. This pertains to the Acqua 6 property which commenced construction in 2015.Transfer to property and equipment amounting to P=107.86 million pertains to construction costsincurred for the development of CLC’s hotel project.

Real estate inventories recognized as “Cost of real estate sales” amounted to P=4,808.59 million,P=6,342.61 million and P= 5,766.89 million in 2015, 2014 and 2013, respectively.

The carrying values of inventories mortgaged for trust receipts payable and bank loans wereP=2,648.93 million and P=1,153.65 million as of December 31, 2015 and 2014, respectively.

7. Land Held for Future Development

Land held for future development consists of parcels of land acquired by the Group for future realestate development.


2015 2014Land held by CCC P=388,333,944 P=388,333,944Land held by CLC 43,000,000 43,000,000

P=431,333,944 P=431,333,944

Land held by CCCThis pertains to a property with an area of 200,000 square meters (sq.m.) located in Novaliches,Quezon City which was acquired by the Group intended for development into a mixeddevelopment housing project.

Land held by CLCOn April 5, 2011, CLC acquired an industrial lot located in Mandaluyong City with an area of14,271 sq.m. under the registered name of Noah’s Ark Sugar Refinery for P=43.00 million. SeeNote 9 for the current portion.

8. Advances to Suppliers and Contractors

Advances to suppliers and contractors amounting to P=1,214.36 million and P=1,014.90 million as ofDecember 31, 2015 and 2014, respectively, are recouped upon every progress billing paymentdepending on the percentage of accomplishment.

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9. Prepayments and Other Current Assets

2015 2014Deferred selling expenses P=623,928,665 P=653,457,362Creditable withholding taxes 408,905,010 315,229,919Input taxes 388,306,265 336,764,206Derivative assets 143,984,118 25,521,998Advances to land owners 68,060,005 31,154,551Marginal deposits 47,711,621 144,809,730Prepaid expenses 21,933,242 78,939,795Current portion of land held for future

development (Note 7) – 43,313,185Others 18,453,257 23,150,300

P=1,721,282,183 P=1,652,341,046

Deferred selling expenses pertain to costs incurred in selling real estate projects. These capitalizedcosts shall be charged to expense in the period in which the related revenue is recognized. SeeNote 14 for noncurrent portion.

Creditable withholding taxes are attributable to taxes withheld by third parties arising from realestate sale, property management fees and leasing revenues.

Input taxes are fully realizable and will be applied against output VAT.

Derivative assets pertain to cross currency and interest rate swaps with a notional amount of$58.57 million and $7.31 million as of December 31, 2015 and 2014, respectively. As ofDecember 31, 2014, this also includes currency forwards with a fair value of P=3.59 million.Advances to land owners represent the minimum share of the land owners in relation to the jointventure projects of the Group. In accordance with the respective joint venture agreements, CCCadvanced its share in significant installments throughout the term of the project. The advancesshall be deducted from the proceeds of the sales and collection of the land owners’ units.Management has assessed that the settlement of these advances is within one year based on thepre-selling and development activities that are currently in progress.

Marginal deposits represent cash hold-out for short-term loans which will be applied as paymentsof the related loans.

Prepaid expenses mostly pertain to prepayments of insurance premiums which will be appliedthroughout the remaining term of the related contracts.

The current portion of land held for future development pertains to the 24,837 sq.m. of industriallot situated in Mandaluyong City amounting to P=43.31 million. This land was transferred to “realestate inventories” account in 2015 as it already started its development (see Note 6). See Note 7for the noncurrent portion.

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10. Deposits for Purchased Land

This account pertains to payments made to property owners for the acquisition of parcels of landin Quezon City, Metro Manila, Novaliches, Metro Manila and Batulao, Batangas. This representsdeposits made to land owners for the purchase of certain parcels of land that are intended forfuture development. The Group normally makes deposits before a contract to sell (CTS) or deedof absolute sale (DOAS) is executed between the Group and the land owner. These are recognizedat cost.

Deposits for purchased land amounted to P=881.44 million and P=710.85 million as ofDecember 31, 2015 and 2014, respectively.

11. Investments in and Advances to Joint Ventures

The Group’s investments in and advances to joint ventures are shown below:

Percentages ofOwnership Carrying Amounts

2015 2014 2015 2014A2Global, Inc. (A2 Global) 48.88% 48.88% P=162,887,995 P=162,887,995One Pacstar Realty Corporation (One Pacstar) 50% 50% 184,399,960 184,399,960Two Pacstar Realty Corporation (Two Pacstar) 50% 50% 39,698,845 39,698,845

P=386,986,800 P=386,986,800

Investment in A2Global Inc. As of December 31, 2015, A2Global is still in its preoperating stage.

In 2013, the Parent Company entered into an agreement with Asian Carmakers Corp. (ACC) andother individuals which aim to create an entity with the primary purpose to develop, own andmanage properties of all kinds and nature and to develop them into economic and tourism zones,golf course, theme parks and all other forms of leisure estates.

On February 26, 2013, the Parent Company acquired 122,200 shares in A2Global with acquisitionprice of P=3.06 million, for a 48.88% ownership. A2Global has six (6) directors, three from theParent Company and three from ACC.

A2 Global’s principal place of business is 5th Floor, Pacific Star Building, Gil Puyat Avenuecorner Makati Avenue, Makati City.

According to its by-laws, most of the major business decisions of A2Global shall require themajority decision of the board. Because the BOD is equally represented, the arrangement isconsidered a joint venture and is measured using the equity method.Total investments in and advances made by the Parent Company to A2Global amounted toP=3.06 million and P=159.83 million, respectively as of December 31, 2015 and 2014.

Investments in One Pacstar Realty Corporation and Two Pacstar Realty CorporationOn October 22, 2014, CLC entered into an agreement with La Costa Development Corporation,Inc. (La Costa) to take out the loan of La Costa with Union Bank of the Philippines in its nameand for its sole account.

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For and in consideration of the loan take out, La Costa transferred, ceded, and conveyed196,250 shares of One Pacstar Realty Corporation (One Pacstar) and 42,250 shares of Two PacstarRealty Corporation (Two Pacstar).

Provisions in the agreement grant CLC to vote using the owned shares in the meetings of thestockholders of One Pacstar and Two Pacstar. The Group currently owns 50% of the total votingshares with the remaining 50% owned by La Costa for both One Pacstar and Two Pacstar. Theprimary purpose of One Pacstar and Two Pacstar is to acquire, own, lease, and manage lands andall other kinds of real estate properties.

One Pacstar and Two Pacstar’s principal place of business is 5th Floor, Pacific Star Building, High Rise Tower, Gil Puyat cor. Makati Avenue, Makati City.

Following are the significant financial information of the significant joint ventures as ofDecember 31, 2015 and 2014 which includes adjustments made by the entity when using theequity method, such as fair value adjustments made at the time of acquisition and adjustments fordifferences in accounting policies:

One Pacstar

2015 2014Total assets P=369,532,692 P=369,512,623Total liabilities 50,000 712,703Total equity 369,482,692 368,799,920

Carrying amount of investment 184,399,960 184,399,960

Total revenue P=72 P=123Total expenses 782,844 4,078,215Net income (loss) (782,772) (4,078,092)

Two Pacstar

2015 2014Total assets P=79,051,418 P=79,222,690Total liabilities 50,000 175,000Total equity 79,001,418 79,397,690

Carrying amount of investment 39,698,845 39,698,845

Total revenue P=81 P=123Total expenses 148,217 737,777Net income (loss) (148,136) (737,210)

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12. Investment Properties

The Group’s investment properties are classified as follows:

2015 2014Buildings P=2,609,762,235 P=2,149,926,278Land 2,426,872,187 1,731,443,210Construction-in-progress 223,484,817 506,454,066

P=5,260,119,239 P=4,387,823,554

Construction-in-progress pertains to properties being constructed that are intended to be leased out. Movements in this account follow:

2015

Building LandConstruction-in-progress Total

Balance at January 1 P=2,149,926,278 P=1,731,443,210 P=506,454,066 P=4,387,823,554Additions 399,663,654 − 371,864,166 711,527,820Transfer to inventories − − (654,833,415) (654,833,415)Gain from change in fair

value of investmentproperties 60,172,303 695,428,977 − 755,601,280

Balance at December 31 P=2,609,762,235 P=2,426,872,187 P=223,484,817 P=5,260,119,239

2014

Building LandConstruction-in-progress Total

Balance at January 1 P=− P=505,044,182 P=3,575,777,004 P=4,080,821,186Additions − − 201,466,886 201,466,886Building completion 2,096,422,269 1,132,604,372 (3,229,026,641) −Transfer to inventories − − (41,763,183) (41,763,183)Gain from change in fair

value of investmentproperties 53,504,009 93,794,655 − 147,298,665

Balance at December 31 P=2,149,926,278 P=1,731,443,210 P=506,454,066 P=4,387,823,554

Land with an original cost of P=170.83 million represents the portions of the International Schoolof Manila, Inc. (ISMI) property that is intended to be developed for commercial and retailpurposes and to be subsequently leased out to third parties.

Investment properties are stated at fair value, which has been determined based on valuationsperformed by Cuervo Appraisers, Inc., an accredited independent valuer, as of December 31, 2015and 2014. Cuervo Appraisers, Inc. is an industry specialist in valuing these types of investmentproperties.

The fair value of the investment properties was estimated by using the Sales ComparisonApproach (SCA) and the Depreciated Replacement Cost (DRC). SCA is an approach to value thatconsiders the sales of similar or substitute properties and related market data and establishes avalue estimate by processes involving comparison. On the other hand, DRC determines thereplacement cost of each replaceable asset in accordance with current market prices of materials,labor, contractor’s overhead, profit and fees, and all other attendant costs associated with itsacquisition and installation in place but without provision for overtime or bonuses for labor andpremiums for material. This replacement cost is adjusted for accrued depreciation as evidenced byobserved condition and extent, character and utility of the property.

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The fair value of the investment properties disclosed in the consolidated financial statements iscategorized within level 3 of the fair value hierarchy.

Description of valuation techniques used and key inputs to valuation follows:

Property Valuationtechnique

Significant unobservable inputs Range

Buildings DRC Replacement cost of the same propertyadjusted for depreciation based onestimated useful lives

Estimated useful lives usedrange from 40-50 years

Land SCA Selling price for the land adjusted forexternal factors and internal factors

External factors pertain to negativeexternalities outside the property limitsthat influence the value namely: social,economic, environmental andgovernmental.

Internal factors include adjustments dueto location, use, size and time elements

External factors: -5% to -10%

Internal factors: -2% to 10%

For DRC, the higher the replacement cost, the higher the fair value. In the same way, the higherthe remaining economic useful life, the higher the fair value.

For SCA, the higher the price per sq.m., the higher the fair value. Also, the higher the externaland internal factors adjustments, the higher the fair value.

The historical cost of the investment properties stated at fair value amounted to P=3,157.85 million.

In 2015 and 2014, the Group recognized leasing revenue from the use of the said real propertiesamounting P=311.67 million and P=206.99 million, respectively and incurred direct cost of leasingamounting to P=153.49 million and P=108.69 million, respectively in relation to these investmentproperties.

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13. Property and Equipment

The composition and movements of this account are as follows:

2015Office

EquipmentComputer

EquipmentFurniture

and FixturesTransportation

EquipmentLeasehold

ImprovementsConstruction

EquipmentConstruction-in-Progress Total

CostAt January 1 P=14,658,875 P=24,204,146 P=21,873,370 P=63,385,442 P=45,536,929 P=251,475,480 P=– P=421,134,242Additions 611,707 8,791,521 4,958,039 5,615,615 1,985,107 16,946 – 21,978,935Transfers from real estate inventories (see Note 6) – – – – – – 107,861,379 107,861,379Disposals (3,007,059) (7,227,509) (4,105,170) (52,679) (810,102) – – (15,202,519)At December 31 12,263,523 25,768,158 22,726,239 68,948,378 46,711,934 251,492,426 107,861,379 535,772,037Accumulated Depreciation and AmortizationAt January 1 10,381,850 14,287,948 14,268,402 37,042,909 27,596,279 195,734,910 – 299,312,298Depreciation and amortization (see Note 25) 1,095,186 4,262,590 4,245,955 8,499,257 6,234,352 32,376,473

–56,713,813

Disposals (2,359,014) (5,578,953) (3,631,561) (12,418) (179,036) – – (11,760,982)At December 31 9,118,022 12,971,585 14,882,796 45,529,748 33,651,595 228,111,383 – 344,265,129Net Book Value at December 31 P=3,145,501 P=12,796,573 P=7,843,443 P=23,418,630 P=13,060,339 P=23,381,043 P=107,861,379 P=191,506,908

2014Office

EquipmentComputer

EquipmentFurniture

and FixturesTransportation

EquipmentLeasehold

ImprovementsConstruction

EquipmentConstruction-in Progress Total

CostAt January 1 P=14,438,034 P=19,107,649 P=18,921,723 P=50,628,014 P=41,311,946 P=251,475,480 P=– P=395,882,846Additions 220,841 5,096,497 2,951,647 12,757,428 4,224,983 – – 25,251,396At December 31 14,658,875 24,204,146 21,873,370 63,385,442 45,536,929 251,475,480 – 421,134,242Accumulated Depreciation and AmortizationAt January 1 9,935,742 11,785,976 12,757,729 28,347,730 19,968,307 155,326,665 – 238,122,149Depreciation and amortization (see Note 25) 446,108 2,501,972 1,510,673 8,695,179 7,627,972 40,408,245

–61,190,149

At December 31 10,381,850 14,287,948 14,268,402 37,042,909 27,596,279 195,734,910 – 299,312,298Net Book Value at December 31 P=4,277,025 P=9,916,198 P=7,604,968 P=26,342,533 P=17,940,650 P=55,740,570 P=– P=121,821,944

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Transfer from real estate inventories amounting to P=107.86 million pertains to construction costsincurred for the development of CLC’s hotel project

The depreciation and amortization from property and equipment are recognized as:

2015 2014 2013Real estate inventories (see Note 6) P=32,376,473 P=40,427,524 P=26,459,969General, administrative and selling

expenses (see Note 25) 24,337,340 20,762,625 37,093,656P=56,713,813 P=61,190,149 P=63,553,625

14. Other Noncurrent Assets


2015 2014Deferred selling expenses P=458,258,955 P=940,970,227Rental deposits 83,980,166 94,242,086Land 41,763,183 41,763,183Intangible assets 39,339,745 31,280,785Deferred financing costs 41,894,459 76,848,277Miscellaneous deposits 8,290,781 8,290,781Others 5,830,161 10,431,853

P=679,357,450 P=1,203,827,192

Deferred selling expenses pertain to costs incurred in selling real estate projects. These capitalizedcosts shall be charged to expense in the period in which the construction begins and the relatedrevenue is recognized. See Note 9 for current portion.

Rental deposits mostly pertain to security deposits held and applied in relation to the Group’s leasecontracts for their administrative and sales offices. The deposits are noninterest-bearing and arerecoverable through application of rentals at the end of the lease term.

Land pertains to a 2,000 sq.m. lot that is intended to be donated in favor of the City Governmentof Makati.

Intangible assets include software costs and trademarks. Software cost includes applicationsoftware and intellectual property licenses owned by the Group. Trademarks are licenses acquiredseparately by the Group. These licenses arising from the Group’s marketing activities have beengranted for a minimum of 10 years by the relevant government agency with the option to renew atthe end of the period at little or no cost to the Group. Previous licenses acquired have beenrenewed and enabled the Group to determine that these assets have an indefinite useful life. As ofDecember 31, 2015 and 2014, no impairment has been recognized on these assets.

Amortization expense of intangible assets recognized in net income amounted to P=3.21 millionand P=6.21 million in 2015 and 2014, respectively (see Note 25).

Deferred financing costs pertain to transaction costs incurred in obtaining certain loan facility.These deferred financing costs will be amortized upon drawdown from the loan facility(see Note 17).

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Miscellaneous deposits pertain primarily to utility deposits related to the construction activities ofthe Group and AFS investments in quoted and unquoted shares of stock.

15. Accounts and Other Payables


2015 2014Accounts payable P=1,847,309,084 P=1,499,632,272Retentions payable 144,577,246 110,257,696Accrued expenses 119,172,653 91,435,080Payable to related parties (see Note 28) 17,226,525 17,226,525Other payables 14,435,083 11,653,728

P=2,142,720,591 P=1,730,205,301

“Accounts payable” pertains to the construction costs incurred by the Company which arenoninterest-bearing and due within one (1) year.

Retentions payable are noninterest-bearing and are normally settled on a 30-day term uponcompletion of the relevant contracts.

Accrued expenses consist mainly of utilities, marketing costs, professional fees, communication,transportation and travel, security, insurance, representation and taxes payable.

16. Customers’ Advances and Deposits

Customer advances pertain to funding from buyers of real estate for future application against transferand registration fees and other taxes to be incurred upon transfer of properties to the buyer.

Customers’ deposits represent collections fromthe buyers which have not reached the minimumrequired percentage of collections and receipt from buyers in excess of real estate sales based on thePOC method.

As of December 31, 2015 and 2014, customers’advances anddeposits amounted to P=3,127.05 millionand P=3,062.97 million, respectively.

17. Short-term and Long-term Debts

Short-term DebtShort-term debt consists of:

2015 2014Trust receipts P=956,608,054 P=668,133,860Bank loans - Philippine Peso 5,000,000 5,189,450

P=961,608,054 P=673,323,310

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Trust receipts (TRs) are obtained from various banks to finance purchases of constructionmaterials for CCDC, CLC and MDC’s projects. The banks pay these companies suppliers thenrequire these companies to execute trust receipts over the goods purchased. The TRs have aweighted average interest rate 6.23% and 5.92% per annum in 2015 and 2014, respectively. Theseare payable monthly or quarterly in arrears with full payment of principal balance at maturity ofone year with option to prepay. In 2015, the Company obtained a new LTCR facility from aforeign bank with an interest rate of 5.20% per annum. This facility is mainly used for importedfinishing materials and equipment.

Bank loans pertain to short-term promissory note (PN) amounting to P=5.00 million which wasobtained from a local bank for CPMI's additional working capital requirements. This line wasrenewed in 2015 with an increase from P5 million to P15 million. The PN has a term of one (1)year with a fixed interest rate of 6.50% per annum (p.a.) and principal repayment of which is to bemade at maturity date.

Long-term DebtLong-term debt consists of:

2015 2014Payable under CTS financing P=5,375,041,996 P=2,167,862,915Bank loans 4,862,521,188 5,372,750,024Car loan financing 49,371,438 60,214,649

10,286,934,622 7,600,827,588Less: current portion 2,635,258,214 1,924,309,151

P=7,651,676,408 P=5,676,518,437

Payable under CTS financingIn 2015 and 2014, the Parent Company, CCDC and CLC obtained additional CTS financing fromlocal banks amounting to P=2,546.52 million and P=1,357.25 million, respectively. These loans bearfixed interest rates ranging from 5.26% to 8.50% and 6.00% to 8.50% in 2015 and 2014,respectively. As of December 31, 2015 and 2014, the facility has outstanding balance amountingto P=2,933.61 million with interest rates ranging from 5.26% to 8.00% and P=1,942.93 million, withinterest ranging 6.00% to 8.5%, respectively.

In 2015, CLC and MDC also entered into a new CTS Purchase Agreement with a local bank in theamount of P=948.78 million and P=1,027.81 million, respectively. Outstanding balance from thisfacility amounted to P=1,517.87 million as of December 31, 2015. These loans bear interest ratesranging from to 5.63% to 6.00% per annum.

Moreover, in 2014, CLC entered into a Contract to Sell Purchase Agreement with a local bank fora Contract to Sell Purchase Facility (CTSPF). As of December 31, 2015 and 2014, the totalamount availed from the facility amounted to P=957.58 million and P=224.93 million, respectively.This loan has an interest rate of 5.50% per annum. Outstanding balance from this facility as ofDecember 31, 2015 and 2014 amounted to P=923.55 million and P=224.93 million, respectively.

For payables under CTS financing, the proceeds of the loans were used in the construction of itsreal estate projects. The related promissory notes have terms ranging from thirty-six (36) to forty-eight (48) months and are secured by the buyer’s post-dated checks, the corresponding CTS, andparcels of land held by the Parent Company. CCDC, MDC and CLC retained the assignedreceivables in the “Trade receivables” account and recorded the proceeds from these assignmentsas “Long-term debt”.

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Bank loanParent CompanyOn June 11, 2013, the Parent Company entered into a loan syndication agreement with StandardChartered Bank (SCB) to finance the planned construction and development of its properties. Thisloan has a facility is up to P=4,200.00 million or its USD equivalent. Under this agreement, theutilization of the loan shall be subjected to the provisions of the USD Facility agreement and PHPFacility agreement. The interest rate per annum for loans pertaining to the USD facility agreementis the LIBOR rate on the determined quotation day plus a 4.00% margin. For loans pertaining tothe PHP facility agreement, the interest rate per annum is the higher of(i) the rate of interest determined at the specified time on the relevant quotation day for the loanbased on 3 month PDST-F plus a 4.00% margin or (ii) the rate of interest determined at thespecified time on the relevant quotation day for the loan based on BSP overnight borrowing rateplus a 2.50% margin. As of December 31, 2015 and 2014, the loan balance amounted toP=2,833.90 million and P=3,435.22 million, respectively.

In2012, theParent Company obtained additional loan from a local bank amounting to P=60.00 million.This loan bears interest rate at three months PDST-based rate plus 5% spread payable quarterly.Principal repayment of P=3.75 million is scheduled to start at the fifteenth month after the date ofthe initial borrowing. Repayments of principal balance amounted to P=15.00 million andP=3.75 million in 2014 and 2013, respectively. As of December 31, 2015 and 2014, the loanoutstanding balance amounted to P=26.25 million and P=41.25 million, respectively.

SubsidiariesOn June 13, 2014, CCDC signed a $30.00 million Secured Facility Agreement with Golden FirstCentury Pte. Ltd., a company affiliated with Phoenix Property Investors. Proceeds from the facilityshall be used to partly finance one of the Company’s projects located in Century City, Makati. Nodrawdown was made in 2014. As of December 31, 2015, drawdown from this facility amounted to$15.00 million. Outstanding balance as of December 31, 2015 amounted to P=659.10 million.

Also in 2014, CCDC obtained a loan from a local bank amounting to P=500.00 million which shallbe used to finance the construction of its projects. Principal repayment is provided with a graceperiod of one year, thereafter, an equal yearly amortization of P=50.00 million to commence on itssecond year up to the fifth year. The remaining P=250.00 million shall be paid upon its maturity.Interest payment shall be computed on the outstanding principal amount of the loan at a fixed rateof 6.00% per annum. Outstanding balance from this facility as of December 31, 2015 andDecember 31, 2014 amounted to P=450.00 million and P=500.00 million, respectively.

In 2014, CLC obtained additional loan amounting to P=479.25 million to finance the constructionof its project, at an interest rate of 8.5%. As of December 31, 2015 and 2014, the outstandingbalance of the facility amounted to P=139.00 million and P=272.18 million, respectively.

Moreover in 2014, CLC also entered into an agreement with La Costa Development Corporation,Inc. (La Costa) to take out the loan of La Costa with a local bank in its name and for its soleaccount. This loan is subject to an interest rate of 8.0% per annum with a term of five years. Thetotal outstanding balance of this loan as of December 31, 2015 and 2014 amounted toP=179.28 million and P=224.10 million, respectively.

In 2013 and 2012, CCDC obtained peso-denominated loans a local bank amounting toP=300.00 million and P=500.00 million, respectively to finance the construction costs of its projectsat interest rate ranging from 6.25% payable in three to five years. As of December 31, 2015 and2014, loans from these local banks amounted to P=575.00 million and P=750.00 million,respectively.

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Also in 2012, CCDC obtained a P=500.00 million secured transferrable term loan facility at interestrate of 4.85% per annum plus bank’s cost of funds. Principal payment is scheduled within threeyears from the date of the agreement. In 2015 and 2014, principal repayments of these loansamounted to P=150.00 million and P=300.00 million, respectively. As of December 31, 2014, theunpaid principal amount of these loans amounted P=150.00 million. In 2015, this term loan hasbeen paid in full.

Car loan financingA local bank has also extended a leasing facility to the Group for the purpose of renting vehicles tobe used in the conduct of business. Under this facility, the lease guarantees the Company (thelessee or renter) the use of vehicles and in return, the bank (the property owner) is guaranteedregular payments for a specific period.

As of December 31, 2015 and 2014, CPGI, CCDC and CLC’s outstanding balance under thisfacility amounted to P=49.37 million and P=60.21 million, respectively. The lease facility bearsinterest ranging from 7.00% to 8.50% in 2015 and 6.88% to 8.8% in 2014.

Security and Debt CovenantsCertain bi-lateral, trust receipts, payables under CTS financing and bank loans have mortgagedproperty wherein such property can no longer be allowed to be separately used as collateral foranother credit facility, grant loans to directors, officers and partners, and act as guarantor or suretyin favor of banks. As of December 31, 2015, the carrying values of the properties mortgaged fortrust receipts, payables under CTS financing and bank loans totaled to P=8,862.18 million.

Certain bi-laterals have the covenants to include maintenance of a debt-to-equity ratio of not morethan 2.33 and 3.00, and a debt service coverage ratio of at least 1.5x. The syndicated term loanhas a covenant, specific to the projects it is financing, of having loan to security value of no morethan 50.00% and loan to gross development value of no more than 20.00%. Security valueincludes, among other things, valuation appraised by independent appraisers and takes intoaccount the sold and unsold sales and market value of the properties. The Loan Agreementsrequire submission of the valuation of each mortgage properties on an annual basis or uponrequest of the facility agent. The bank loans contain negative covenant that the Group’s paymentof dividend is subject to certain financial ratios.

As of December 31, 2015 and 2014, the Group has complied with the loan covenants.

Borrowing CostsThe total borrowing costs incurred by the Group from its short-term, long-term debts and bondspayable as of December 31, 2015 and 2014 amounted to P=473.89 million and P=481.48 million,respectively. Borrowing cost capitalized amounted to P=401.90 million and P=464.78 million in2015 and 2014, respectively (see Note 6).

Interest Expense and Other Finance ChargesInterest and other financing charges for the short-term, long-term debts and bonds payable in 2015and 2014 amounted to P=225.75 million and P=124.71 million, respectively (see Note 26).

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18. Bonds Payable

Bonds payable consists of the following:

2015 2014Three-year bond P=1,187,360,000 P=1,187,360,000Five-and-half year bond 1,393,530,000 1,393,530,000Seven-year bond 119,110,000 119,110,000

2,700,000,000 2,700,000,000Less: Unamortized transaction costs 32,503,933 42,674,938

P=2,667,496,067 P=2,657,325,062

In 2014, CPGI raised P=2.70 billion worth of SEC-registered unsecured fixed rate peso retail bondsdue on September 2, 2017 for the three-year bonds, on March 2, 2020 for the five-and-half yearbonds and on September 2, 2021 for the seven-year bonds.

The CPGI bonds which were listed at the Philippine Dealing & Exchange Corp. (PDEx) onSeptember 2, 2014, have interest rates of 6% p.a. for the three-year bonds, 6.6878% p.a. for thefive-and-a-half year bonds, and 6.9758 % p.a. for the seven-year bonds.

19. Liability from Purchased Land

This account pertains to the outstanding payable of the Company for the cost of land purchasesrecognized under “Real estate inventories” and “Land held for future development”. Theseamounted to P=640.41 million and P=33.64 million as of December 31, 2015 and 2014, respectively.

20. Equity

Capital stockThe details of the Parent Company’s capital stock follow:

2015 2014Par value per share P=0.53 P=0.53Authorized shares 18,000,000,000 18,000,000,000Issued 11,699,723,690 11,699,723,690

The rollforward analysis of the issued number of common shares follows:

2015 2014At beginning of the year 11,699,723,690 9,699,724,027Stock dividends declared − 1,999,999,663At end of year 11,699,723,690 11,699,723,690

On March 28, 1996 and November 23, 1999, SEC issued the Parent Company Registration to SellSecurities. On February 09, 2000, the Parent Company was listed with the Philippine StockExchange with a total of 3,554.72 million common shares, issued, paid and outstanding. Theoffering of the shares was at P=1.00 per share.

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On November 11, 2014, the Philippine Stock Exchange, Inc. approved the application of theCompany to list additional 730.32 million common shares, with a par value of P=0.53 per share, tocover the Company’s 20.62% stock dividend declaration to stockholders of record as ofOctober 27, 2014 which was paid on November 14, 2014.

As of December 31, 2015, there are 484 holders of the Parent Company’s common stock.

Placement and Subscription Agreement between the Parent Company and CPIOn March 5, 2013, the Parent Company entered into a Subscription and Placement Agreementwith CPI, Standard Chartered Securities (Singapore) Pte. Limited (Standard Chartered) andMacquarie Capital (Singapore) Pte. Limited (Macquarie) wherein CPI has appointed StandardChartered and Macquarie to offer 800,000,000 existing common shares (the Offer Shares) of theParent Company at P=2.05 per share (the Offer Price) outside the United States in reliance onRegulation S under the U.S. Securities Act. On the same day, the Parent Company and CPIentered into a Subscription Agreement wherein CPI has agreed to subscribe for the new commonshares to be issued by the Parent Company in an amount equal to the number of the Offer Sharessold by CPI at a price equal to the Offer Price.

Increase in authorized capital stock and declaration of stock dividendAt a special meeting of the Board of Directors held on June 23, 2014, the Board of Directors ofCentury Properties Group Inc. approved the following resolutions:

(1) Approval of the increase in the authorized capital stock of Century Properties Group Inc.(the “Corporation”) from Five Billion Three Hundred Million Pesos (P=5,300.00 million),divided into 10,000.00 million common shares, par value of P=0.53 Peso per share, to NineBillion Five Hundred Forty Million Pesos (P=9,540.00 million) divided into 18,000.00 millioncommon shares with par value of P=0.53 per share.

(2) Approval, ratification and confirmation subject to the consents and approvals, of the increasein the authorized capital stock of the Corporation at a price of P=0.53 per share or at anaggregate price equivalent to Four Billion Two Hundred Forty Million Pesos(P=4,240.00 million) and the corresponding payment thereof by way of the declaration of stockdividends equivalent to Two Billion (2,000.00 million) common shares amounting to OneBillion Sixty Million Pesos (P=1,060.00 million) to be taken out of the Corporation’s retainedearnings. This amount represents at least the minimum 25% subscribed and paid-up capitalrequirement for the increase of the authorized capital stock from Ten Billion common sharesto Eighteen Billion common shares with par value of P=0.53 per share.

The aforesaid resolutions were approved by the Stockholders during the Annual Stockholders’Meeting held last July 23, 2014.

On October 8, 2014, the Securities and Exchange Commission (SEC) approved the increase in theauthorized capital stock of the Parent Company from Five Billion Three Hundred Million Pesos(P=5,300.00 million), divided into Ten Billion (10,000.00 million) common shares, par value ofP=0.53 per share, to Nine Billion Five Hundred Forty Million Pesos (P=9,540.00 million) dividedinto Eighteen Billion (18,000.00 million) common shares with par value of P=0.53 per share.

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Treasury sharesOn January 7, 2013, the BOD of the Parent Company approved a share buyback program for thoseshareholders who opt to divest of their shareholdings in the Parent Company. A total ofP=800.00 million worth of shares will be up for buyback for a time period of up to 24 months.In 2014 and 2013, a total of 85.68 million shares and 14.44 million shares were reacquired at atotal cost of P=87.15 million and P=22.52 million, respectively.

Treasury shares amounted to P=109.67 million as of December 31, 2015 and 2014.

Retained earningsRetained earnings include the accumulated equity in undistributed net earnings of consolidatedsubsidiaries amounting to P=5,563.76 million and P=4,234.53 million as of December 31, 2015, and2014, respectively. These amounts are not available for dividend declaration until these aredeclared by the subsidiaries.

Cash dividend declarationOn June 15, 2015, the BOD of the Parent Company approved the declaration of P=0.02 per sharecash dividends amounting to P=201.16 million for distribution to the stockholders of the ParentCompany of record as of July 3, 2015 which was paid on July 16, 2015.

On April 4, 2014, the BOD of the Parent Company approved the declaration of P=0.02 per sharecash dividends amounting to P=184.47 million for distribution to the stockholders of the ParentCompany of record as of May 15, 2014 which was paid on June 5, 2014.

On April 15, 2013, the BOD of the Parent Company approved the declaration of P=0.02 per sharecash dividends amounting to P=184.44 million for distribution to the stockholders of the ParentCompany of record as of April 29, 2013.

Capital managementThe primary objective of the Group’s capital management is to ensure that it maintains a strongand healthy consolidated statement of financial position to support its current business operationsand drive its expansion and growth in the future.

The Group undertakes to establish the appropriate capital structure for each business line, to allowit sufficient financial flexibility, while providing it sufficient cushion to absorb cyclical industryrisks.

The Group considers debt as a stable source of funding. The Group attempts to continuallylengthen the maturity profile of its debt portfolio and makes it a goal to spread out its debtmaturities by not having a significant percentage of its total debt maturing in a single year.

The Group manages its capital structure and makes adjustments to it, in the light of changes ineconomic conditions. It monitors capital using leverage ratios on both a gross debt and net debtbasis. As of December 31, 2015 and 2014, the Group had the following ratios:

2015 2014Debt to equity 76.49% 62.38%Net debt to equity 62.78% 50.44%

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Debt consists of short-term and long-term debts. Net debt includes short-term and long-term debtless cash and cash equivalents, short-term investments and AFS financial assets. Equity, which theGroup considers as capital, pertains to the equity attributable to equity holders of the ParentCompany excluding other component of equity, and remeasurement loss on defined benefit plan,amounting to a total of P=14,706.74 million and P=13,388.90 million as of December 31, 2015 and2014, respectively.

The Group is subject to externally imposed capital requirements due to loan covenants(see Note 17). No changes were made in the objectives, policies or processes for managing capitalduring the years ended December 31, 2015 and 2014. The Group has complied with the abovecovenants as of December 31, 2015 and 2014.

21. Earnings Per Share

Basic/diluted earnings per share amounts attributable to equity holders of the Parent Company for2015, 2014 and 2013 follow:

2015 2014 2013Net income attributable to the owners

of the Parent Company P=1,519,006,176 P=2,158,887,753 P=1,844,715,754Weighted average number of shares 11,599,600,690 11,679,931,964 11,546,408,840Basic/diluted earnings per share P=0.130 P=0.185 P=0.160

Earnings per share are calculated using the consolidated net income attributable to the equityholders of Parent Company divided by the weighted average number of shares. To determine theweighted average number of shares, the stock dividend declaration was retroactively adjusted.Stock dividend declaration was approved by the BOD on June 23, 2014 and was paid onNovember 14, 2014 to stockholders of record as of October 27, 2014 (see Note 20).

22. Property Management Fee and Other Services


2015 2014 2013Property management fee P=297,307,587 P=284,410,803 P=253,287,494Other services 137,893 1,317,662 1,122,974

P=297,445,480 P=285,728,465 P=254,410,468

Property management fee pertains mostly to facilities management and consultancy fees ofcondominium corporations, corporate facilities and prior projects of the Group, which have beenturned over to the respective buyers.

Other services pertain to various services such as plan evaluation, consultation and projectmanagement.

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23. Interest and Other Income

This account consists of:2015 2014 2013

Interest income:Accretion of unamortized

discount (Note 5) P=801,750,294 P=825,646,206 P=654,764,011Cash and cash equivalents (Note 4) 13,309,323 119,887,408 43,852,421

Income from forfeited collections 176,463,096 274,209,468 416,344,118Other income 155,242,108 70,907,941 105,618,389

P=1,146,764,821 P=1,290,651,023 P=1,220,578,939

Income from forfeited collections pertain to forfeited collections from reservation fees whoseallowable period of completion has prescribed and terminated sales contracts.

Other income consists mostly of penalties and other surcharges collected from defaulted salescontract installments. Real estate buyers are normally charged a penalty of 3.00% of the monthlyinstallment in arrears from the time the installment becomes due and payable.

24. Cost of Services


2015 2014 2013Salaries, wages and employee

benefits P=216,513,767 P=215,390,743 P=176,468,314Outside services − – 9,176,957

P=216,513,767 P=215,390,743 P=185,645,271

25. General, Administrative and Selling Expenses


2015 2014 2013Marketing and promotions P=938,813,253 P=892,938,561 P=708,139,512Commission 570,196,139 492,781,146 445,754,644Salaries, wages and employee benefits

(Notes 28 and 29) 504,007,220 508,662,050 395,108,425Taxes and licenses 196,122,280 184,242,066 102,180,689Professional fees 110,607,722 116,212,968 148,138,526Rent (Note 30) 56,031,453 50,636,460 41,346,102Entertainment, amusement and recreation 50,043,392 46,993,341 42,122,234Utilities 38,773,162 38,788,206 15,713,041Depreciation and amortization (Note 13 and 14) 27,844,831 26,972,348 39,377,153Communication 20,692,204 21,122,487 23,623,844Transportation and travel 20,046,342 27,792,308 48,693,068Outside services 18,627,753 5,970,801 3,097,121Supplies 14,479,123 10,657,467 11,428,189Miscellaneous 165,524,998 296,976,855 17,141,270

P=2,731,809,872 P=2,720,747,064 P=2,041,863,818

Miscellaneous expenses pertain mostly to repairs and maintenance and insurance.

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26. Interest and Other Financing Charges

Details of this account follow:

2015 2014 2013Interest expense (Notes 17 and 18) P=71,992,593 P=16,703,757 P=29,215,760Other financing charges (Notes 17 and 18) 153,755,309 108,006,608 68,237,206

P=225,747,902 P=124,710,365 P=97,452,966

Other financing charges mostly include charges from interbank transfers other banking servicefees and amortization of deferred transaction costs.

27. Income Tax

The provision for income tax consists of:

2015 2014 2013Current

RCIT/MCIT P=292,645,074 P=347,258,406 P=415,572,363Final 2,282,626 1,708,600 4,061,794

294,927,700 348,967,006 419,634,157Deferred 316,334,669 663,238,492 452,904,271

P=611,262,369 P=1,012,205,498 P=872,538,428

Income taxes include RCIT paid at the rate of 30% and final taxes paid at the rate of 20%, whichis a final withholding tax on gross interest income from debt instruments and other depositsubstitutes.

Interest allowed as a deductible expense is reduced by an amount equivalent to 33% of interestincome subjected to final tax starting January 1, 2009.

The NIRC of 1997 also provides for rules on the imposition of a 2% MCIT on the gross income asof the end of the taxable year beginning on the fourth taxable year immediately following thetaxable year in which the Group commenced its business operations. Any excess MCIT over theRCIT can be carried forward on an annual basis and credited against the RCIT for the three (3)immediately succeeding taxable years.

In addition, the NIRC of 1997 allows the Group to deduct from its taxable income for the currentyear its accumulated NOLCO from the immediately preceding three (3) consecutive taxable years.

As of December 31, 2015, carryover NOLCO and MCIT that can be claimed as deduction fromfuture taxable income or used as deductions against income tax liabilities are as follows:

NOLCO:

Year Incurred Amount Used/Expired Balance Expiry Year2012 P=14,911,594 (P=14,911,594) P=– 20152013 649,970,775 – 649,970,775 20162014 754,697,325 – 754,697,325 20172015 609,502,255 – 609,502,255 2018

P=2,029,081,949 (P=14,911,594) P=2,014,170,355

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MCIT:

Year Incurred Amount Used/Expired Balance Expiry Year2012 P=12,113,246 (P=12,113,246) P=− 20152013 33,912,924 (25,023,190) 8,889,734 20162014 25,810,874 − 25,810,875 20172015 27,856,068 − 27,856,068 2018

P=99,693,113 (P=37,136,436) P=62,556,677

The components of the Company’s deferred tax assets and deferred tax liabilities are as follows:

2015 2014Recognized in the consolidated statements of

comprehensive income:Deferred tax assets on:

NOLCO P=603,482,319 P=425,873,908MCIT 62,556,677 41,293,369Accrued retirement costs 62,060,292 57,385,430Provisions for impairment losses 3,293,827 3,808,741

731,393,115 528,361,448Deferred tax liabilities on:

Effect of difference between revenue recognized for tax and accounting (1,765,079,915) (1,417,818,095)

Change in fair value of investment Properties (813,910,660) (631,419,875)

Deferred selling expenses (324,656,286) (478,328,277)Effect of discounting of financial instruments (221,502,062) (92,473,619)Valuation gain on derivative assets (43,195,235) (1,606,327)Capitalized borrowing costs, net of

amortization (55,441,926) (69,031,011)Others (15,518,213) (29,260,758)

(3,239,304,297) (2,719,937,962)(2,507,911,182) (2,191,576,514)

Recognized directly in equity:Deferred tax asset on re-measurement loss on retirement obligation 26,175,831 31,624,319

(P=2,481,735,351) (P=2,159,952,195)

The above deferred tax assets and liabilities are presented in the consolidated statements offinancial position as follows:

2015 2014Deferred tax assets - net P=92,132,290 P=145,823,268Deferred tax liabilities - net 2,573,867,641 2,305,775,463

Unrecognized deferred tax assetsThe Group has NOLCO that are available for offset against future taxable income or tax payablefor which deferred tax assets have not been recognized. Unrecognized NOLCO amounted toP=2.56 million and P=0.35 million for December 31, 2015 and 2014, respectively.

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Statutory reconciliationThe reconciliation of the provision for income tax computed at statutory income tax rate to theprovision for income tax shown in profit or loss follows:

2015 2014 2013Provision for income tax computed

at statutory rate P=639,080,563 P=951,327,975 P=815,176,255Adjustments for:

Income tax holiday – (6,329,439) 35,472,590Nondeductible interest and other

expenses 28,450,454 72,646,896 7,753,508Change in unrecognized deferred tax assets 663,078 345,405 251,203,454Interest income subjected to final tax (3,992,797) (5,785,339) (7,822,013)Non-taxable income on cancelled sales (52,938,929) – –Recognition of previously

unrecognized DTA – – (229,291,175)Expired MCIT – – 45,809

P=611,262,369 P=1,012,205,498 P=872,538,428

Board of Investments (BOI) incentivesOn January 6, 2010, the BOI issued in favor of the Group a Certificate of Registration as a NewDeveloper of Low-Cost Mass Housing Project for Azure Urban Residences in accordance with theOmnibus Investment Code of 1987. Pursuant thereto, the projects has been granted an IncomeTax Holiday (ITH) for a period of four (4) years from December 2012 or the actual start ofcommercial operations or selling, whichever is earlier and importation of capital equipment, spareparts and accessories at zero percent duty from date of registration up to June 16, 2011.

28. Related Party Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control theother party or exercise significant influence over the other party in making financial and operatingdecisions. Parties are also considered to be related if they are subject to common control orcommon significant influence which include affiliates.

Terms and Conditions of Transactions with Related PartiesThe Group in their regular conduct of business has entered into transactions with related partiesprincipally consisting of advances and reimbursement of expenses, development, management,marketing, leasing and administrative service agreements.

There have been no guarantees provided or received for any related party receivables or payables.The Group does not provide allowance relating to receivable from related parties. This assessmentis undertaken each financial year through examining the financial position of the related partiesand the markets in which the related parties operate.

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The effects of the related party transactions are shown under the following accounts in theconsolidated financial statements:

2015Amount/Volume Receivables

Due fromrelated parties

Managementfees Terms Conditions

Ultimate Parent P=219,615,100 P=368,825,635 P=− P=−Noninterest bearing,due and demandable

Unsecured, noimpairment

Stockholders 1,522,692 − 126,537,363 −Noninterest bearing,due and demandable


Other affiliates 464,010 14,363,004 22,876,795 −Noninterest bearing,due and demandable


P=221,601,802 P=383,188,639 P=149,414,158 P=−Amount/Volume

Accounts andother payables

Due to relatedparties Other payables Terms Conditions

Stockholders P=− P=− P=19,979,821 P=−Noninterest bearing,due and demandable


Other affiliates 3,456,154 17,226,525 9,645,688 11,653,728Noninterest bearing,due and demandable


P=3,456,154 P=17,226,525 P=29,625,509 P=11,653,728

2014Amount/Volume Receivables

Due fromrelated parties Management fees Terms Conditions

Ultimate Parent P=− P=149,210,535 P=− P=−Noninterest bearing,due and demandable


Stockholders − − 125,014,671 −Noninterest bearing,due and demandable




P=46,423,425 P=163,559,540 P=145,606,224 P=1,835,231Amount/Volume

Accounts andother payables

Due to relatedparties Other payables Terms Conditions

Stockholders P=− P=− P=25,570,564 P=−Noninterest bearing,due and demandable




P=1,299,702 P=17,226,525 P=31,760,098 P=11,653,728

Significant transactions of the Group with related parties are described below:

Receivables from and accounts and other payable to related parties mostly pertain to advances andreimbursement of expenses related to the operations of the Group. These are generally trade-related, noninterest-bearing and payable within one year.

Due from related parties pertains to advances provided by the Group to the Stockholders and otheraffiliates. These are generally unsecured, noninterest-bearing, and are due and demandable andare not impaired.

Due to related parties pertains to advances made by the Group for the capital expenditure of theaffiliates. These are generally noninterest bearing and are due and demandable.

Construction management contractThe Group has contracted Century Properties Management Construction Corporation (CPMCC) asthe project manager that will handle the construction activities of the Group. CPMCC is owned byone of the key management personnel of the Group. As of December 31, 2015 and 2014,advances made to CPMCC recognized under the “Advances to suppliers and contractors” accountamount to P=621.41 million and P=420.85 million, respectively.

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Key Management CompensationThe key management personnel of the Group include all directors, executive, and seniormanagement. The details of compensation and benefits of key management personnel in 2015,2014 and 2013 follow:

2015 2014 2013Short-term employee benefits P=113,827,976 P=116,601,070 P=79,641,947Post-employment benefits (Note 29) 8,696,457 6,456,171 4,409,754

P=122,524,433 P=123,057,241 P=84,051,701

Terms and Condition of Transactions with Related PartiesOutstanding balances at year-end are unsecured interest free and expected to be settled within oneyear after the reporting date. There have been no guarantees provided or received for any relatedparty receivables or payables. As of December 31, 2015 and 2014, the Group has not made anyprovision for probable losses relating to amounts owed by related parties. This assessment isundertaken each financial year by examining the financial position of the related party and themarket in which the related party operates.

29. Pension Cost

The Group has an unfunded, noncontributory, defined benefit pension plan covering substantiallyall of its regular employees. The benefits are based on the projected retirement benefit of22.5 days pay per year of service in accordance with Republic Act 7641. The benefits are basedon current salaries and years of service and compensation on the last year of employment. Anindependent actuary conducts an actuarial valuation of the retirement benefit obligation using theprojected unit credit method.

The components of retirement expense included under “Salaries, wages and employee benefits”under general, administrative and selling expenses follow:

2015 2014 2013Current service cost P=25,701,214 P=17,690,784 P=11,093,410Interest cost on benefit obligation 8,952,601 8,758,430 5,704,761Return on plan asset (130,482) − −Effect of settlement/curtailment – – (2,681,155)Retirement expense P=34,523,333 P=26,449,214 P=14,117,016

Remeasurement costs recognized in OCI follow:

2015 2014 2013Balance at beginning of year P=105,414,398 P=80,613,355 P=43,681,926Experience adjustments (28,735,064) (14,872,042) 14,992,913Change in assumptions 10,582,382 39,673,085 21,938,519Balance at end of the year 87,261,716 105,414,398 80,613,358Deferred income tax effect (26,184,776) (31,624,319) (24,184,007)Balance at end of year P=61,076,940 P=73,790,079 P=56,429,351

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Changes in the present value of the defined benefit obligation are as follows:

2015 2014Balance at January 1 P=191,284,766 P=142,710,476Current service cost 25,701,214 17,690,784Interest cost 8,952,601 8,758,430Benefits paid (958,063) (2,676,416)Actuarial losses (gains) (18,292,561) 24,801,492Settlement/curtailment − −Balance at December 31 P=206,687,957 P=191,284,766

The sensitivity analysis below has been determined based on reasonably possible changes of eachsignificant assumptions on the defined benefit obligation as of the end of the reporting period,assuming if all other assumptions were held constant.

December 31, 2015Effect on DBO

Discount rate 6.00% 1.0 % decrease P=29,915,416Discount rate 4.00% 1.0 % increase (24,299,135)Rate of salary increase 7.00% 1.0 % increase 27,468,383Rate of salary increase 5.00% 1.0 % decrease (22,965,473)

The assumptions used to determine pension benefits for the Group for the years endedDecember 31, 2015, 2014 and 2013 are as follows:

2015 2014 2013Discount rate 4.86% to 5.55% 4.46% to 6.37% 5.37% to 6.38%Salary increase rate 6.00% to 7.00% 5.00% to 7.00% 5.00% to 7.00%

Shown below is the maturity analysis of the undiscounted benefit payments:

Year ending:December 31, 2015 P=45,279,358December 31, 2016 1,687,892December 31, 2017 3,414,173December 31, 2018 3,776,371December 31, 2019 17,462,328December 31, 2020 through December 31, 2024 77,812,083

30. Operating Lease Agreements

Operating lease - Group as a LesseeThe Group is a lessee under operating leases covering the sales and administrative offices includingthe model units for prospective buyers. The leases have terms ranging from two to three years, withrenewal options. Monthly rent payment is computedusing a fix rateper sq.m. Rental expensecharged to operations amounted to P=56.03 million, P=50.64 million and P=41.35 million and in2015, 2014 and 2013, respectively (see Note 25).

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Future minimum rentals payable under operating leases follow:

2015 2014 2013Within one year P=64,197,913 P=72,672,390 P=64,951,325After one year but not more than five years 28,079,096 84,255,049 88,144,150

P=92,277,009 P=156,927,439 P=153,095,475

Operating lease – Group as a LessorThe Group entered into lease agreements with third parties covering its investment properties.These leases generally provide for either (a) fixed monthly rent, or (b) minimum rent or a certainpercentage of gross revenue, whichever is higher.

2015 2014Within one year P=156,353,501 P=198,424,473After one year but not more than five years 171,112,070 398,484,516More than five years 27,949,000 60,421,575

P=355,414,571 P=657,330,564

31. Financial Instruments

Fair Value InformationThe table below presents the carrying amounts and fair value of the Group’s financial assets andliabilities are as follows:

2015 2014Carrying Value Fair Value Carrying Value Fair Value

Loans and receivablesCash and cash equivalents P=2,008,325,122 P=2,008,325,122 P=1,429,245,106 P=1,429,245,106Receivables Trade receivables Real estate 12,433,551,954 12,840,610,882 11,553,022,779 11,945,185,806 Related parties 383,188,639 383,188,639 163,559,540 163,559,540 Leasing receivable 85,688,816 85,688,816 55,560,319 55,560,319 Management fee 63,269,993 63,269,993 66,395,787 66,395,787 Auction fee and

commissions − − 2,392,406 2,392,406 Advances to customers 38,567,901 38,567,901 35,687,597 35,687,597 Other receivables 189,182,818 189,182,818 10,432,114 10,432,114Due from related parties 149,414,158 149,414,158 145,606,224 145,606,224

15,351,189,401 15,758,248,329 13,461,901,872 13,854,064,899Derivative assets 143,984,118 143,984,118 25,521,998 25,521,998

P=15,495,173,519 P=15,902,232,447 P=13,487,425,870 P=13,879,586,897

Other financial liabilitiesAccounts and other payables Accounts payable P=1,847,309,084 P=1,847,309,084 P=1,499,632,272 P=1,499,632,272 Retentions payable 144,577,246 144,577,246 110,257,696 110,257,696 Accrued expenses 119,172,653 119,172,653 91,435,080 91,435,080 Payable to related parties 17,226,525 17,226,525 17,226,525 17,226,525 Other payables 14,435,083 14,435,083 11,653,728 11,653,728Due to related parties 29,625,509 29,625,509 31,760,098 31,760,098Short-term debt 961,608,054 961,608,054 673,323,310 673,323,310Long-term debt 10,286,934,622 11,333,023,257 7,600,827,588 9,125,627,864Bonds payable 2,667,496,067 3,396,550,542 2,657,325,062 3,420,044,813Liability from purchased

land 640,411,836 640,411,836 33,640,589 33,640,589P=16,728,796,679 P=18,503,939,789 P=12,727,081,948 P=15,014,601,975

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Fair Value of Financial InstrumentsThe methods and assumptions used by the Group in estimating the fair value of the financialinstruments are as follows:

Financial assetsCash and cash equivalents, receivables (excluding ICRs with more than one year tenor) and duefrom related parties - Carrying amounts approximate fair values due to the short-term maturities ofthese instruments.

Noncurrent ICRs - Fair value is based on undiscounted value of future cash flows using theprevailing interest rates for similar types of receivables as of the reporting date using theremaining terms of maturity. The discount rate used ranged from 3.20% to 8.00% in 2015 and2014, respectively.

Derivative assets - The fair value is determined using valuation techniques with inputs andassumptions that are based on market observable data and conditions and reflect appropriate riskadjustments that market participants would make for credit and liquidity risks existing at the endeach of reporting period.

Other financial liabilitiesThe fair values of accounts and other payables, due to related parties and short-term debtapproximate the carrying amount due to the short-term maturities of these instruments.

Liability from purchased land, which are subject to normal credit terms, approximates fair value.The fair value of long-term debt and bonds payable are estimated using the discounted cash flowmethodology using the Group’s current incremental borrowing rates for similar borrowings withmaturities consistent with those remaining for the liability being valued. The discount rates usedfor long-term debt ranged from 2.60% to 5.55% as of December 31, 2015 and 2014, respectively.The discount rates used for bonds payable ranged from 6.00% to 6.98% as of December 31, 2015and 2014.

Fair Value HierarchyThe Group uses the following hierarchy for determining and disclosing the fair value of thefinancial instruments by valuation technique:

Level 1: quoted (unadjusted prices) in active markets for identical assets and liabilitiesLevel 2:other techniques for which all inputs which have a significant effect on the recorded fair

value are observable, either directly or indirectlyLevel 3:techniques which use inputs which have a significant effect on the recorded fair value that

are not based on observable market data

The Group held freestanding derivatives which are measured at fair value under Level 2.

The Group has no financial instruments measured under Level 1 and 3.

In 2015 and 2014, the Group did not have transfers between Level 1 and 2 fair valuemeasurements and no transfers into and out of Level 3 fair value measurements.

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Financial Risk Management Policies and ObjectivesThe Group has various financial assets and liabilities such as cash and cash equivalents,receivables, due from related parties, derivative assets, accounts and other payables and due torelated parties, which arise directly from its operations. The Group has availed of short-term,long-term debts and bonds payable for financing purposes.

Exposure to credit, interest rate, liquidity and foreign currency risks arise in the normal course ofthe Group’s business activities. In 2013, the Group also entered into derivative transactions, thepurpose of which is to manage the currency and interest rate risk arising from its financialinstruments.

The main objectives of the Group’s financial risk management are as follows:· to identify and monitor such risks on an ongoing basis;· to minimize and mitigate such risks; and· to provide a degree of certainty about costs.

The Group’s BOD reviews and approves the policies for managing each of these risks and they aresummarized below:

Credit riskCredit risk is the risk that counterparty will not meet its obligations under a financial instrument orcustomer contract, leading to a financial loss. The Group trades only with recognized,creditworthy third parties. The Group’s receivables are monitored on an ongoing basis resulting tomanageable exposure to bad debts. Real estate buyers are subject to standard credit checkprocedures which are calibrated based on the payment scheme offered. The Group’s respectivecredit management units conduct a comprehensive credit investigation and evaluation of eachbuyer to establish creditworthiness.

Receivable balances are being monitored on a regular basis to ensure timely execution ofnecessary intervention efforts. In addition, the credit risk for ICRs is mitigated as the Group hasthe right to cancel the sales contract without the need for any court action and take possession ofthe subject house or unit in case of refusal by the buyer to pay on time the due installmentcontracts receivable. This risk is further mitigated by the fact that the corresponding title to theunits sold is transferred to the buyers only upon full payment of the contract price.

With respect to credit risk arising from the other financial assets of the Group, which comprisecash and cash equivalents, the Group’s exposure to credit risk arises from default of thecounterparty, with a maximum exposure equal to the carrying amount of these instruments. TheGroup transacts only with institutions or banks which have demonstrated financial soundness forthe past 5 years.

The Group has no significant concentrations of credit risk.

The Group’s maximum exposure to credit risk as of December 31, 2015 and 2014 is equal to thecarrying values of its financial assets, except for ICRs with carrying values of P=12,433.55 millionand P=11,553.02 million, respectively and fair value of collateral amounting to P=25,904.16 millionin both years.

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The table below shows the credit quality of the Group’s financial assets:

2015Neither past due nor impaired

Past due butnot Impaired Impaired TotalHigh grade

MediumGrade Low Grade

Cash and cash equivalent P=2,008,325,122 P=– P=– P=– P=– P=2,008,325,122Receivables Trade ICR 12,300,020,775 – – 133,531,179 – 12,433,551,954 Related parties 383,188,639 – – – – 383,188,639 Leasing receivable 85,688,816 − − − − 85,688,816 Management fee 60,178,019 – – – 3,091,974 63,269,993 Auction fee and

commissions – – – – – – Advances to customers 38,567,901 – – – – 38,567,901 Others 189,182,818 – – – – 189,182,818Due from related parties 149,414,158 – – – – 149,414,158

15,214,566,248. – – 133,531,179 3,091,974 15,351,189,401Derivative assets 143,984,118 – – – – 143,984,118Total P= 15,358,550,366 P=– P=– P=133,531,179 P=3,091,974 P=15,495,173,519

2014Neither past due nor impaired

Past due butnot Impaired Impaired TotalHigh grade

MediumGrade Low Grade

Cash and cash equivalent P=1,429,245,106 P=– P=– P=– P=– P=1,429,245,106Receivables Trade ICR 11,435,588,327 – – 117,434,452 – 11,553,022,779 Related parties 163,559,540 – – – – 163,559,540 Leasing receivables 55,560,319 – – – – 55,560,319 Management fee 62,568,493 – – – 3,827,294 66,395,787 Auction fee and

commissions 1,411,348 – – – 981,058 2,392,406 Advances to customers 35,687,597 – – – – 35,687,597 Others 10,432,114 – – 10,432,114Due from related parties 145,606,224 – 145,606,224

13,394,576,819 – – 117,434,452 4,808,352 13,461,901,872Derivative assets 25,521,998 – – – – 25,521,998Total P=13,420,098,817 P=– P=– P=117,434,452 P=4,808,352 P=13,487,425,870

The credit quality of the financial assets was determined as follows:

Cash and cash equivalents and derivative assets - These are considered as high grade financialassets as these are entered into with highly reputable counterparties.

Receivables - high grade pertains to receivables with no default in payments; medium gradepertains to receivables with up to 3 defaults in payment; and low grade pertains to receivables withmore than 3 defaults in payment.

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As of December 31, 2015 and 2014, the aging analysis of the Group’s receivables presented perclass is as follows:

2015Neither

PastDue nor Impaired

Impaired Past due but not impaired Financial<30 days 30-60 days 60-90 days 90-120 days >120 days Assets Total

Receivables Trade receivables ICR P=12,300,020,775 P=20,080,657 P=24,624,808 P=18,330,727 P=70,494,987 P=– P=12,433,551,954 Related parties 383,188,639 – – – – – 383,188,639 Leasing receivable 85,688,816 – – – – – 85,688,816 Management fee 60,178,018 – – – – 3,091,975 63,269,993 Advances to customers 38,567,901 – – – – – 38,567,901 Other receivables 189,182,818 – – – – – 189,182,818Due from related parties 149,414,158 – – – – – 149,414,158Total P=13,206,241,125 P=20,080,657 P=24,624,808 P=18,330,727 P=70,494,987 P=3,091,975 P=13,342,864,279

2014Neither

PastDue nor Impaired

Impaired Past due but not impaired Financial<30 days 30-60 days 60-90 days 90-120 days >120 days Assets Total

Receivables Trade receivables ICR P=11,435,588,327 P=9,226,558 P=19,828,048 P=11,251,523 P=77,128,323 P=– P=11,553,022,779 Related parties 163,559,540 – – – – – 163,559,540 Leasing receivable 55,560,319 – – – – – 55,560,319 Management fee 62,568,493 – – – – 3,827,294 66,395,787 Auction fee and

commissions 1,411,348 – – – – 981,058 2,392,406 Advances to customers 35,687,597 – – – – – 35,687,597 Other receivables 10,432,114 – – – – – 10,432,114Due from related parties 145,606,224 – – – – – 145,606,224Total P=11,910,413,962 P=9,226,558 P=19,828,048 P=11,251,523 P=77,128,323 P=4,808,352 P=12,032,656,766

Liquidity riskLiquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitmentsassociated with financial instruments. Liquidity risk may result from either the inability to sellfinancial assets quickly at their fair values; or the counterparty failing on repayment of a contractualobligation; or inability to generate cash inflows as anticipated.

The Group’s objective is to maintain a balance between continuity of funding and flexibilitythrough the use of bank loans and advances from related parties. The Group considers its availablefunds and its liquidity in managing its long-term financial requirements. It matches its projectedcash flows to the projected amortization of long-term borrowings. For its short-term funding, theGroup’s policy is to ensure that there are sufficient operating inflows to match repayments ofshort-term debt.

The following table shows the maturity profile of the Group’s financial assets used for liquiditypurposes and liabilities based on contractual undiscounted payments:

2015Within 1 Year 1-5 years Total - Gross

Financial assetsCash and cash equivalents P=2,008,325,122 P=– P=2,008,325,122

ReceivablesTrade receivablesICR 8,830,562,382 3,602,989,572 12,433,551,954Related parties 383,188,639 – 383,188,639Leasing receivables 85,688,816 − 85,688,816

(Forward)

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2015Within 1 Year 1-5 years Total - Gross

Management fee P=63,269,993 P=– P=63,269,993Advances to customers 38,567,901 – 38,567,901Other receivables 189,182,818 – 189,182,818Due from related parties 149,414,158 – 149,414,158

P=11,748,199,829 P=3,602,989,572 P=15,351,189,401

Financial liabilitiesAccounts and other payables

Accounts payable P=1,847,309,084 – P=1,847,309,084Accrued expenses 119,172,653 – 119,172,653Payable to related parties 17,226,525 – 17,226,525Retentions payable 144,577,246 – 144,577,246

Other payables 14,435,083 – 14,435,083Donation payable 41,763,183 – 41,763,183Due to related parties 29,525,799 – 29,525,799Short-term debt 961,608,054 – 961,608,054Long-term debt

Principal 3,639,843,615 6,647,091,007 10,286,934,622Interest 370,139,325 675,949,310 1,046,088,635

Bonds payablePrincipal – 2,667,496,066 2,667,496,066Interest – 32,503,934 32,503,934

Liability from purchased land 62,899,428 577,512,408 640,411,836P=7,248,499,995 P=10,600,552,725 P=17,849,052,720

2015Within 1 Year 1-5 years Total – Gross

Financial assetsCash and cash equivalents P=1,429,245,106 P=– P=1,429,245,106

ReceivablesTrade receivablesICR 7,172,879,333 4,380,143,446 11,553,022,779Related parties 163,559,540 – 163,559,540Leasing receivables 55,560,319 55,560,319Management fee 66,395,787 – 66,395,787Auction fee and commissions 2,392,406 – 2,392,406Advances to customers 35,687,597 – 35,687,597Other receivables 10,432,114 – 10,432,114Due from related parties 145,606,224 – 145,606,224

P=9,081,758,426 P=4,380,143,446 P=13,461,901,872

Financial liabilitiesAccounts and other payables

Accounts payable P=1,499,632,272 P=– P=1,499,632,272Accrued expenses 91,435,080 – 91,435,080Payable to related parties 17,226,525 – 17,226,525Retentions payable 110,257,696 – 110,257,696

Other payables 11,653,728 – 11,653,728Donation payable 41,763,183 – 41,763,183Due to related parties 31,760,098 – 31,760,098Short-term debt 673,323,310 – 673,323,310

(Forward)

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2015Within 1 Year 1-5 years Total – Gross

Long-term debtPrincipal P=1,924,309,151 P=5,676,518,437 P=7,600,827,588Interest 386,035,217 1,138,765,059 1,524,800,276

Bonds payablePrincipal – 2,657,325,062 2,657,325,062Interest – 762,719,751 762,719,751

Liability from purchased land – 33,640,589 33,640,589P=4,787,396,260 P=10,268,968,898 P=15,056,365,158

Foreign currency riskFinancial assets and credit facilities of the Group, as well as major contracts entered into for thepurchase of raw materials, are mainly denominated in Philippine Peso.

The following table shows the Group’s consolidated foreign currency-denominated monetaryassets and their peso equivalents as of December 31, 2015 and 2014:

2015 2014Original Peso Original Peso

Currency Equivalent Currency EquivalentAssetsCash and cash equivalents

US Dollar $1,425,632 P=67,090,242 $3,368,306 P=149,552,786Euro €22,761 1,177,654 €226,535 13,854,881

LiabilitiesAccounts payable

Euro €5,302,936 274,373,909 €7,534,133 460,787,574Loans payable

US Dollar $60,788,519 2,860,707,704 $58,265,600 2,586,992,640Net foreign currency denominated instruments (P=3,066,813,717) (P=3,211,187,881)The spot exchange rates used were P=47.06 to US$1 and P=51.74 to €1 in 2015; P=44.40 to US$1 and P=61.16 to €1 in 2014

2015 2014Increase

(decrease) inforeign

exchange ratesEffect on profit

before tax

Increase(decrease) in

foreignexchange rates

Effect on profitbefore tax

Dollar 5% (P=139,680,873) 5% (P=121,871,993)(5%) 139,680,873 (5%) 121,871,993

Euro 5% (13,659,813) 5% (22,346,635) (5%) 13,659,813 (5%) 22,346,635

Interest rate riskInterest rate risk is the risk that changes in the market interest rates will reduce the Group’s currentor future earnings and/or economic value. The Group’s interest rate risk management policycenters on reducing the overall interest expense and exposure to changes in interest rates. Changesin market interest rates relate primarily to the Group’s interest bearing debt obligations withfloating interest rates or rates subject to repricing as it can cause a change in the amount of interestpayments.

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The following table sets out the carrying amount, by maturity, of the Group’s long term debt thatare exposed to interest rate risk.

Interest terms (p.a.) Rate fixing period <1 year 1 to 5 years2015 6.5-8% Monthly; Annually P=2,635,258,214 P=7,651,676,4082014 6.5-8% Monthly; Annually P=1,924,309,151 P=5,676,518,437

The following table demonstrates the sensitivity to a reasonably possible change in interest rates,with all variables held constant, of the Group’s income before tax and equity (through the impacton floating rate borrowings).

2015 2014Increase (decrease)

in interest ratesEffect on profit

before taxIncrease (decrease)

in interest ratesEffect on profit

before taxBasis points 0.33% (P=9,351,868) 0.33% (18,604,250)

(0.33%) 9,351,868 (0.33%) 18,604,250

There is no other impact on the Group’s total comprehensive income other than those alreadyaffecting the net income.

Financial Risk Management Policies and ObjectivesThe Group’s freestanding derivative financial instruments are accounted for as transactions notdesignated as hedges. The table below sets out information about the Group’s derivative financialinstruments and the related fair values as of December 31, 2015 and 2014:

2015 2014Notional Amount Fair Value Notional Amount Fair Value

Cross currency and interest rate swap $58,570,000 P=143,984,118 $7,312,775 P=21,932,665Currency forwards – – €9,035,000 3,589,333

P=143,984,118 P=25,521,998

32. Segment Information

Business segment information is reported on the basis that is used internally for evaluatingsegment performance and deciding how to allocate resources among operating segments.Accordingly, the segment information is reported based on the nature of service the Group isproviding.

The segments where the Group operate follow:· Real estate development - sale of high-end, upper middle-income and affordable residential

lots and units and lease of residential developments under partnership agreements· Leasing -lease of the Group’s retail mall· Property management - facilities management of the residential and corporate developments

of the Group and other third party projects, including provision of technical and relatedconsultancy services.

Segment performance is evaluated based on operating profit or loss and is measured consistentlywith operating profit or loss in the consolidated financial statements.

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Details of the Group’s operating segments as of December 31, 2015 and 2014 are as follows:

2015Real Estate

DevelopmentProperty

Management LeasingAdjustments and

Elimination ConsolidatedRevenue P=7,866,970,500 P=297,445,480 P=311,668,777 (P=115,649,294) P=8,360,435,463Costs and expensesCost of real estate sales and services 4,808,587,411 216,513,767 153,494,504.00 5,178,595,682General, administrative and selling

expenses 2,658,814,848 67,323,870 113,532,531 (107,861,377) 2,731,809,872Operating income 399,568,241 13,607,843 44,641,742 (7,787,917) 450,029,909Other income (expenses)Interest and other income 2,588,424,407 439,698 755,601,281 (1,438,478,848) 1,905,986,538Interest and other financing charges (623,711,721) (329,465) (31,801,523) 430,094,807 (225,747,902)Income before income tax 2,364,280,928 13,718,076 768,441,500 (1,016,171,958) 2,130,268,545Provision for income tax 536,363,048 5,205,589 69,693,732 – 611,262,369Net income P=1,827,917,880 P=8,512,487 P=698,747,768 (P=1,016,171,958) P=1,519,006,176Other informationSegment assets P=50,344,096,329 P=146,790,462 P=5,578,938,674 (P=18,683,086,016) P=37,386,739,449Deferred tax assets 77,204,006 14,928,284 – – 92,132,290Total Assets P=50,421,300,335 P=161,718,746 P=5,578,938,674 (P=18,683,086,016) P=37,478,871,739

Segment liabilities P=31,913,197,327 P=129,580,707 P=1,444,653,298 (P=13,216,297,279) P=20,271,134,053Deferred tax liabilities 2,397,331,508 – 176,536,133 – 2,573,867,641Total Liabilities P=34,310,528,835 P=129,580,707 P=1,621,189,431 (P=13,216,297,279) P=22,845,001,694

2014Real Estate

DevelopmentProperty

Management LeasingAdjustments and

Elimination ConsolidatedRevenue P=10,822,921,089 P=285,728,465 P=206,988,490 P=– P=11,315,638,044Costs and expensesCost of real estate sales and services 6,342,613,886 215,390,743 108,693,945 – 6,666,698,574General, administrative and selling

expenses 3,363,638,093 59,023,255 20,781,584 (722,695,868) 2,720,747,064Operating income 1,116,669,110 11,314,467 77,512,961 722,695,868 1,928,192,406Other income (expenses)Interest and other income 1,784,352,899 71,248 – (339,283,944) 1,445,140,203Interest and other financing charges (396,845,320) (761,676) (28,397,033) 223,764,671 (202,239,358)Income before income tax 2,504,176,689 10,624,039 49,115,928 607,176,595 3,171,093,251Provision for income tax 1,009,017,681 3,187,817 – – 1,012,205,498Net income P=1,495,159,008 P=7,436,222 P=49,115,928 P=607,176,595 P=2,158,887,753

Other informationSegment assets P=43,262,391,620 P=118,491,162 P=2,535,912,948 (P=14,412,411,485) P=31,504,384,245Deferred tax assets 131,895,218 13,928,050 – – 145,823,268Total Assets P=43,394,286,838 P=132,419,212 P=2,535,912,948 (P=14,412,411,485) P=31,650,207,513

Segment liabilities P=23,904,000,187 P=109,197,602 P=1,187,778,790 (P=9,160,985,541) P=16,039,991,038Deferred tax liabilities 2,305,775,463 – – – 2,305,775,463Total Liabilities P=26,209,775,650 P=109,197,602 P=1,187,778,790 (P=9,160,985,541) P=18,345,766,501

33. Contracts and Commitments

CALCCALC’s deposit for preferred shares subscription presented under “Other noncurrent liabilities”pertains to deposits received by CALC from buyers of its preferred shares. On June 17, 2015,CALC’s preferred shares divided into Class A, Class B, Class C and Class D have been registeredwith SEC for public offering.

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The preferred shares have the following features, rights, privileges and obligations which can beavailed by the preferred shareholders upon full payment:

a. All classes of the preferred shares are non-voting.

b. Preferred shareholders are entitled to use and occupy, for twenty-eight (28) nights per year,the rooms to be owned by the Company in the planned Acqua 6 Tower of the Acqua PrivateResidences (upon its completion and only when such rooms are ready for occupancy).

c. The preferred shareholders shall be entitled to a share in Net Room Rental Revenue at the rateof 40% for all of the 152 rooms to be owned by the Company. The share of a preferredshareholder in the Net Room Rental Revenue shall be payable annually.

d. The preferred shareholders shall no longer participate in any dividend declaration of theCompany.

Upon full payment and when the rights indicated above vest, the amounts received from the preferred shareholders will be allocated between the equity and liability components.

However, prior to full payment, about 3 years based on their amortization schedules, CALCaccounts for the amounts received from the buyers of preferred shares as deposits for preferredshares subscription. This is based on the terms of the contract which states that unpaid preferredshares shall not be entitled to any of the rights and benefits as stated above. These deposits will beclassified as part of long-term liabilities where bulk of the subscription, once fully paid, will beclassified.

As of December 31, 2015, out of the P=300.01 million shares subscribed, only P=26.32 million havebeen paid. None of the shares have been fully paid.

CCDC IIOn August 7, 2015, CCDC entered into an agreement with Mitsubishi Corporation (MC) to dilute40% of its ownership with CCDC II. To do this, CCDC II will apply for an increase in its capitalstock with the SEC. As of December 31, 2015, CCDC II is still in the process of increasing itscapital stock.

On November 12, 2015, CCDC II, with its shareholders partners, CCDC and MC, signed aP=2,200 million loan facility with BPI. Proceeds from the ten-year senior loan will be used topartly finance the P=4,500 million Forbes Media Tower project. The balance of P=2,300 millionwill be funded through equity contributions of 60% from CCDC and 40% from MC.

CCDCIn 2013, CCDC entered into a contract with Giorgio Armani S.P.A, a company incorporated underthe Laws of the Italian Republic for the interior design of CCDC’s Century Spire project. CenturySpire is a landmark project of CCDC in partnership with Armani/Casa Interior Design Studio. Itwill sell “residential units characterized by elegant spaces and graceful interiors, not to mentionamazing views of the Makati Skyline”.

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On September 2, 2013, CCDC partnered with Forbes Media to launch the Forbes Media Tower, acommercial office building “designed to serve the world’s business leaders by providing anenvironment to conduct business with premium amenities.” This Tower will offer approximately60,000 sq.m. of premium office space which will be available for rent to business owners,entrepreneurs and companies. In addition to office space, the building will provide meeting andevent space with plans for a fine dining restaurant, fitness center and exhibition facilities.

CPHLIOn April 21, 2015, CPHLI signed a memorandum of agreement to acquire 56 hectares of propertyto develop a beachfront lifestyle destination development in the municipality of San Vicente inPalawan.

The Company will follow a phased development plan for the said project over the next 3-5 years.The pace and timing of subsequent phases will, in large part, be driven by the take up of the sale ofhotel villas and residential investment properties, which will form a significant part of returnsfrom the project.

34. Contingencies

The Group is contingently liable for lawsuits or claims filed by third parties (substantially civilcases that are either pending decision by the courts or are under negotiation, the outcomes ofwhich are not presently determinable). In the opinion of management and its legal counsels, theeventual liability under these lawsuits or claims, if any, will not have a material or adverse effecton the Group's financial position and results of operations. The information usually required byPAS 37, Provisions, Contingent Liabilities and Contingent Assets, is not disclosed on the groundsthat it can be expected to prejudice the outcome of these lawsuits, claims or assessments. Noprovisions were made in 2015 and 2014 with respect of the foregoing matters.

35. Notes to Consolidated Statements of Cash Flows

Below are the non-cash operating, investing and financing transactions for the year ended in 2015,2014 and 2013:

a. Accrual of liabilities for purchased land amounting to P=606.77 million in 2015 (see Note 19).

b. Transfer of P=107.86 million worth of real estate inventories to property and equipment in 2015(see Notes 6 and 13).

c. Transfer of P=43.13 million worth of land held for future development to real estate inventoriesin 2015 (see Notes 6 and 7).

d. Accretion of unamortized discount for noninterest-bearing contracts receivable amounting toP=801.75 million, P=825.65 million and P=654.76 million in 2015, 2014 and 2013, respectively(see Note 23).

e. Transfer of P=654.83 million, P=41.76 million and P=549.10 million worth of investmentproperties to real estate inventories in 2015, 2014 and 2013, respectively (see Notes 6 and 12).

f. Capitalization of borrowing costs amounting to P=401.90 million, P=464.78 million andP=414.99 million in 2015, 2014 and 2013, respectively (see Note 6).

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g. Declaration of stock dividends amounting to P=1,060.00 million in 2014 (see Note 20).

h. Transfer of P=1,040.28 million worth of land held for future development to investmentproperties in 2013 (see Note 7).

i. Transfer of P=568.10 million worth of real estate inventories to investment property in 2013(see Notes 6 and 12).

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INDEPENDENT AUDITORS’ REPORTON SUPPLEMENTARY SCHEDULE


We have audited in accordance with Philippine Standards on Auditing, the financial statements ofCentury Properties Group Inc. and its subsidiaries as at and for the years ended December 31, 2015and 2014 and have issued our report thereon dated March 28, 2016. Our audits were made forthe purpose of forming an opinion on the basic financial statements taken as a whole. Theaccompanying supplementary schedule of all effective standards and interpretations effective as ofDecember 31, 2015 is the responsibility of the Company’s management. This schedule is presentedfor the purpose of complying with Securities Regulation Code Rule 68, As Amended (2011) and is notpart of the basic financial statements. This schedule has been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, in our opinion, fairly states, in all materialrespects, the information required to be set forth therein in relation to the basic financial statementstaken as a whole.



March 28, 2016


Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph



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INDEPENDENT AUDITORS’ REPORT


We have audited the financial statements of Century Properties Group Inc. and its subsidiaries as ofDecember 31, 2015 and 2014 on which we have rendered the attached report dated March 28, 2016.

In compliance with Securities Regulation Code Rule No. 68, we are stating that the Company has fourhundred sixty-six (466) stockholders owning more than one hundred (100) shares each.



March 28, 2016


Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph



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INDEX TO THE FINANCIAL STATEMENTS AND SUPPLEMENTARYSCHEDULES

Schedule Contents

A Financial Assets

B Amounts Receivable from Directors, Officers, Employees, RelatedParties, and Principal Stockholders (Other than Related parties)

C Amounts Receivable from Related Parties which are Eliminatedduring the Consolidation of Financial Statements

D Intangible Assets - Other Assets

E Long-Term Debt

F Indebtedness to Related Parties

G Guarantees of Securities of Other Issuers

H Capital Stock

I Reconciliation of Retained Earnings Available for Dividend Declaration

J Map Showing the Relationships Between and Among the Companies in theGroup, its Ultimate Parent Company and Co-subsidiaries

K Schedule of All Effective Standards and Interpretations Under PhilippineFinancial Reporting Standards

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SCHEDULE A

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF FINANCIAL ASSETSDECEMBER 31, 2015

Number of shares orprincipal amount of

bonds and notesAmount shown in the

balance sheetIncome received or

accruedCash and cash equivalents

Cash on hand P=− P=126,651 P=−Cash in bank − 1,675,712,245 13,309,323

ReceivablesTrade receivables

Real estate − 12,433,551,954 801,750,294Related parties − 383,188,639 −Leasing receivable − 85,688,816 −Management fee − 63,269,993 −Auction fee and

commissions− −

Advances to customers − 38,567,901 −Other receivables − 189,182,818 −

Due from related parties − 149,414,158 −− 15,351,189,401 815,059,617

Derivative assets − 143,984,118 −P=− P=15,495,173,519 P=815,059,617

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SCHEDULE B

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF AMOUNTS RECEIVABLE FROMDIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES, ANDPRINCIPAL STOCKHOLDERS (OTHER THAN RELATED PARTIES)DECEMBER 31, 2015

Name and Designation ofdebtor

Balance atbeginning of

period AdditionsAmountscollected Current Not Current

Balance atthe end ofthe period

Officers, Directors andEmployees P=3,919,983 P=19,240,171 (P=18,855,367) P=4,304,786 P=– P=4,304,786

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SCHEDULE C

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF AMOUNTS RECEIVABLE FROMRELATED PARTIES WHICH ARE ELIMINATED DURING THECONSOLIDATION OF FINANCIAL STATEMENTSDECEMBER 31, 2015

ReceivableBalance Payable Balance

CurrentPortion

CPGI P=3,468,191,827 P=– P=3,468,191,827CCDC and 12 subs − (517,481,890) (517,481,890)CLC − (602,164,238) (602,164,238)CCC − (1,638,274,409) (1,638,274,409)MDC − (72,957,154) (72,957,154)CMDC − (637,314,136) (637,314,136)Total Eliminated Receivables/Payables P=3,468,191,827 (P=3,468,191,827) P=–

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SCHEDULE D

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF INTANGIBLE ASSETS - OTHERASSETSDECEMBER 31, 2015

DescriptionBeginningBalance

Additions atcost

Charged tocost andexpenses

Charged toother

accounts

Other changesadditions

(deductions)EndingBalance

Trademark P=2,048,792 P=17,453 P=– P=– P=– P=2,066,245

Software Cost 41,133,102 11,556,600 15,416,201 – – 37,273,501

P=43,181,894 P=11,574,053 (P=15,416,201) P=– P=– P=39,339,746

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SCHEDULE E

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF LONG-TERM DEBTDECEMBER 31, 2014

Long-term Debt

Title of Issue and type ofobligation

Amountauthorized byindenture

Amount shownunder caption"current portion oflong-term” inrelated balancesheet

Amount shownunder caption“long-term debt” inrelated balancesheet

Payable under CTS financing P=5,375,041,996 P=819,070,046 P=4,555,971,950Term loan 4,862,521,188 1,806,022,522 3,056,498,666Chattel Mortgage 49,371,438 10,165,646 39,205,792Bonds payable 2,667,496,067 − 2,667,496,067

P=12,954,430,689 P=2,635,258,214 P=10,319,172,475

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SCHEDULE F

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF INDEBTEDNESS TO RELATEDPARTIES (LONG-TERM LOANS FROM RELATED COMPANIES)DECEMBER 31, 2015

Indebtedness to related parties (Long-term loans from Related Companies)Name of related party Balance at beginning of period Balance at end of period

N/A

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SCHEDULE G

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF GUARANTEES OF SECURITIES OFOTHER ISSUERSDECEMBER 31, 2015

Guarantees of Securities of Other IssuersName of issuing entity ofsecurities guaranteed bythe company for whichthis statement is filed

Title of issue ofeach class of

securitiesguaranteed

Total amountguaranteed and

outstanding

Amount ownedby person for

which statementis file

Nature ofguarantee

N/A

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SCHEDULE H

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF CAPITAL STOCKDECEMBER 31, 2015

Capital Stock

Title of Issue

Number ofshares

authorized

Number ofshares issued

and outstandingas shown underrelated balancesheet caption

Number ofshares reserved

for optionswarrants,

conversion andother rights

Number ofshares held byrelated parties

Directors,officers andemployees Others

Capital Stock 18,000,000,000 11,599,600,690 – – 9 –*All nine (9) directors have one (1) nominal common shares issued

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SCHEDULE ICENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSUPPLEMENTARY SCHEDULE OF RETAINED EARNINGSAVAILABLE FOR DIVIDEND DECLARATIONDECEMBER 31, 2015

Unappropriated Retained Earnings, beginning P=373,656,148

Net income based on face of AFS194,333,571

Less: Non-actual/unrealized income net of tax

Equity in net income of associate/joint venture –Unrealized foreign exchange gain – net (except those

attributable to Cash and Cash Equivalents) Unrealized gain –

Fair value adjustment (M2M gains) (122,051,454)Fair value adjustment of Investment Property resulting to

gain adjustment due to deviation from PFRS/GAAP - gain –Other unrealized gains or adjustments to the retained

earnings as a result of certain transactions accounted for under the PFRS –

Add: Non-actual lossesDepreciation on revaluation increment (after tax) –Adjustment due to deviation from PFRS/GAAP – loss –Loss on fair value adjustment of investment

property (after tax) –Deferred tax asset (decrease) 5,514,178

Net Income Actual/Realized 77,796,295

Less: Other adjustmentsDividend declarations during the period (201,158,909)

Unappropriated Retained Earnings, as adjusted, ending P=250,293,534

*SGVFS017217*

CENTURY PROPERTIES GROUP INC.

67.3% CPI 32.7 Public

Century PropertiesManagement, Inc.

(CPMI)100% CPGI

CenturyCommunities Corp

(CCC)100% CPGI

Century LimitlessCorporation

(CLC)100% CPGI

Century CityDevelopment Corp

(CCDC)100% CPGI

CenturyPropertiesHotel and

Leisure, Inc.(CPHLI)

100% CPGI

A2Global,Inc.

(A2Global)49% CPGI

Century AcquaLifestyle Corp

(CALC)100% CLC

MilanoDevelopment Corp

(MDC)100% CCDC

Centuria MedicalDevelopment Corp

(CMDC)100% CCDC

Siglo Suites, Inc.(SSI)

100% CLC

SCHEDULE JCENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESMAP SHOWING THE RELATIONSHIPS BETWEEN AND AMONG THECOMPANIES IN THE GROUP, ITS ULTIMATE PARENT COMPANY ANDCO-SUBSIDIARIESDECEMBER 31, 2015

Century Properties Group Inc. (CPGI) – incorporated in March 23, 1975, CPGI is the listedCompany of CPI with property development corporations as subsidiaries.

CPGI SubsidiariesCentury Properties Management Inc. (CPMI) – incorporated in 1989, is one of the largest propertymanagement companies in the Philippines, as measured by total gross floor area under management.100% owned by CPGI after acquisition of the shares of Mr. Romig

CENTURY PROPERTIES GROUP INC.CORPORATE STRUCTURE

*SGVFS017065*

Century Communities Corporation – incorporated in 1994, is focused on horizontal house and lotdevelopments. From the conceptualization to the sellout of a project, CCC provides experiencedspecialists who develop and execute the right strategy to successfully market a project. CCC iscurrently developing Canyon Ranch, a 25-hec house and lot development located in Carmona, Cavite.100% owned by CPGI

Century Limitless Corporation (CLC) – incorporated in 2008, is Century’s newest brand categorythat focuses on developing high-quality, affordable residential projects. Projects under CLC caters tofirst-time home buyers, start-up families and investors seeking safe, secure and convenient homes. Ithas one internal branch office in Singapore namely CLC Singapore. CLC is 100%owned by CPGI.

Century Acqua Lifestyle Corporation - incorporated on November 6, 2014, a wholly ownedsubsidiary of CLC, was organized primarily to acquire by purchase, own, hold, manage, administer,lease or operate condominium units of the planned Acqua 6 Tower of Acqua Private Residences forthe benefit of its shareholders.

Century City Development Corporation (CCDC) – incorporated in 2006, is focused on developingmixed-use communities that contain residences, office and retail properties. CCDC is currentlydeveloping Century City, a 3.4 hectare mixed-use development along Kalayaan Avenue, Makati City.CCDC has fourteen local subsidiaries.

Milano Development Corporation (MDC) & Centuria Medical Development Corporation(CMDC) – is a wholly owned subsidiary of CCDC. Affiliated company under CCDC includes CCDCII.

Century Properties Hotel and Leisure Inc. - CPHLI, incorporated in March 27, 2014, is a newlyformed wholly-owned subsidiary of CPGI. CPHLI shall operate, conduct and engage in hotel businessand related business ventures.

A2Global Inc. - A2Global Inc., incorporated in 2013, is a newly formed company wherein CPGI hasa 49% shareholdings stake. A2Global shall act as a sub-lessee for the project initiatives of AsianCarmakers Corporation (ACC) and Century Properties Group Inc. in the development andconstruction commercial office in Fort Bonifacio.

*SGVFS017065*

CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIESSCHEDULE OF ALL THE EFFECTIVE STANDARDS AND INTERPRETATIONSAS OF DECEMBER 31, 2015

PHILIPPINE FINANCIAL REPORTING STANDARDS ANDINTERPRETATIONSEffective as of December 31, 2015

Adopted NotAdopted

NotApplicable

Framework for the Preparation and Presentation of Financial StatementsConceptual Framework Phase A: Objectives and qualitative characteristics

4

PFRSs Practice Statement Management Commentary 4

Philippine Financial Reporting Standards

PFRS 1(Revised)

First-time Adoption of Philippine Financial Reporting Standards 4

Amendments to PFRS 1 and PAS 27: Cost of an Investment in aSubsidiary, Jointly Controlled Entity or Associate

4

Amendments to PFRS 1: Additional Exemptions for First-timeAdopters

4

Amendment to PFRS 1: Limited Exemption from ComparativePFRS 7 Disclosures for First-time Adopters

4

Amendments to PFRS 1: Severe Hyperinflation and Removal ofFixed Date for First-time Adopters

4

Amendments to PFRS 1: Government Loans* 4

PFRS 2 Share-based Payment 4

Amendments to PFRS 2: Vesting Conditions and Cancellations 4

Amendments to PFRS 2: Group Cash-settled Share-basedPayment Transactions

4

PFRS 3(Revised)

Business Combinations 4

PFRS 4 Insurance Contracts 4

Amendments to PAS 39 and PFRS 4: Financial GuaranteeContracts

4

PFRS 5 Non-current Assets Held for Sale and Discontinued Operations 4

PFRS 6 Exploration for and Evaluation of Mineral Resources 4

PFRS 7 Financial Instruments: Disclosures 4

Amendments to PAS 39 and PFRS 7: Reclassification ofFinancial Assets

4

Amendments to PAS 39 and PFRS 7: Reclassification ofFinancial Assets - Effective Date and Transition

4

Amendments to PFRS 7: Improving Disclosures about FinancialInstruments

4

Amendments to PFRS 7: Disclosures - Transfers of FinancialAssets

4

Amendments to PFRS 7: Disclosures - Offsetting FinancialAssets and Financial Liabilities

4

Amendments to PFRS 7: Mandatory Effective Date of PFRS 9and Transition Disclosures

4

PFRS 8 Operating Segments 4

- 2 -

*Effective subsequent to December 31, 2015+Deferred effectivity

*SGVFS017065*


Adopted NotAdopted

NotApplicable

PFRS 9 Financial Instruments See footnote *

Amendments to PFRS 9: Classification and Measurement See footnote *

PFRS 10 Consolidated Financial Statements 4

Amendments to PFRS 10 and PAS 28: Sale or Contribution ofAssets Between an Investor and its Associate or Joint Venture See footnote *

PFRS 11 Joint Arrangements 4

Amendments to PFRS 11: Accounting for Acquisitions ofInterest in Joint Operations See footnote *

PFRS 12 Disclosure of Interests in Other Entities 4

PFRS 13 Fair Value Measurement 4

PFRS 14 Regulatory Deferral Accounts See footnote *

Philippine Accounting Standards

PAS 1(Revised)

Presentation of Financial Statements 4

Amendment to PAS 1: Capital Disclosures 4

Amendments to PAS 32 and PAS 1: Puttable FinancialInstruments and Obligations Arising on Liquidation

4

Amendments to PAS 1: Presentation of Items of OtherComprehensive Income

4

PAS 2 Inventories 4

PAS 7 Statement of Cash Flows 4

PAS 8 Accounting Policies, Changes in Accounting Estimates andErrors

4

PAS 10 Events after the Reporting Period 4

PAS 11 Construction Contracts 4

PAS 12 Income Taxes 4

Amendment to PAS 12 - Deferred Tax: Recovery of UnderlyingAssets

4

PAS 16 Property, Plant and Equipment 4

Amendments to PAS 16 and PAS 38: Intangible Assets -Clarification of Acceptable Methods of Depreciation andAmortization

See footnote *

Amendments to PAS 16 and PAS 41: Bearer Plants See footnote *

PAS 17 Leases 4

PAS 18 Revenue 4

PAS 19 Employee Benefits 4

Amendments to PAS 19: Actuarial Gains and Losses, GroupPlans and Disclosures 4

PAS 19(Amended)

Employee Benefits 4

Amendments to PAS 19: Defined Benefit Plans, EmployeeContributions 4

- 3 -


*SGVFS017065*


Adopted NotAdopted

NotApplicable

PAS 20 Accounting for Government Grants and Disclosure ofGovernment Assistance

4

PAS 21 The Effects of Changes in Foreign Exchange Rates 4

Amendment: Net Investment in a Foreign Operation 4

PAS 23(Revised)

Borrowing Costs 4

PAS 24(Revised)

Related Party Disclosures 4

PAS 26 Accounting and Reporting by Retirement Benefit Plans 4

PAS 27 Consolidated and Separate Financial Statements 4

PAS 27(Amended)

Separate Financial Statements 4

Amendments to PAS 27: Equity Method in Separate FinancialStatements See footnote *

PAS 28 Investments in Associates 4

PAS 28(Amended)

Investments in Associates and Joint Ventures 4

Amendments to PFRS 10 and PAS 28: Sale or Contribution ofAssets Between an Investor and its Associate or Joint Venture See footnote *

PAS 29 Financial Reporting in Hyperinflationary Economies 4

PAS 31 Interests in Joint Ventures 4

PAS 32 Financial Instruments: Disclosure and Presentation 4

Amendments to PAS 32 and PAS 1: Puttable FinancialInstruments and Obligations Arising on Liquidation

4

Amendment to PAS 32: Classification of Rights Issues 4

Amendments to PAS 32: Offsetting Financial Assets andFinancial Liabilities

4

PAS 33 Earnings per Share 4

PAS 34 Interim Financial Reporting 4

PAS 36 Impairment of Assets 4

PAS 37 Provisions, Contingent Liabilities and Contingent Assets 4

PAS 38 Intangible Assets 4

Amendments to PAS 16 and PAS 38: Intangible Assets -Clarification of Acceptable Methods of Depreciation andAmortization

See footnote *

PAS 39 Financial Instruments: Recognition and Measurement 4

Amendments to PAS 39: Transition and Initial Recognition ofFinancial Assets and Financial Liabilities

4

Amendments to PAS 39: Cash Flow Hedge Accounting ofForecast Intragroup Transactions

4

Amendments to PAS 39: The Fair Value Option 4

Amendments to PAS 39 and PFRS 4: Financial GuaranteeContracts

4

- 4 -


*SGVFS017065*


Adopted NotAdopted

NotApplicable

Amendments to PAS 39 and PFRS 7: Reclassification ofFinancial Assets

4

Amendments to PAS 39 and PFRS 7: Reclassification ofFinancial Assets - Effective Date and Transition

4

Amendments to Philippine Interpretation IFRIC–9 and PAS 39:Embedded Derivatives

4

Amendments to PAS 39: Eligible Hedged Items 4

Amendments to PAS 39: Recognition and Measurement:Novation of Derivatives and Continuation of Hedge Accounting

4

PAS 40 Investment Property 4

PAS 41 Agriculture 4

Amendments to PAS 16 and PAS 41: Bearer Plants See footnote *

Philippine Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and SimilarLiabilities

4

IFRIC 2 Members’ Share in Co-operative Entities and SimilarInstruments

4

IFRIC 4 Determining Whether an Arrangement Contains a Lease 4

IFRIC 5 Rights to Interests arising from Decommissioning, Restorationand Environmental Rehabilitation Funds

4

IFRIC 6 Liabilities arising from Participating in a Specific Market -Waste Electrical and Electronic Equipment

4

IFRIC 7 Applying the Restatement Approach under PAS 29 FinancialReporting in Hyperinflationary Economies

4

IFRIC 8 Scope of PFRS 2 4

IFRIC 9 Reassessment of Embedded Derivatives 4

Amendments to Philippine Interpretation IFRIC-9 and PAS 39:Embedded Derivatives

4

IFRIC 10 Interim Financial Reporting and Impairment 4

IFRIC 11 PFRS 2 - Group and Treasury Share Transactions 4

IFRIC 12 Service Concession Arrangements 4

IFRIC 13 Customer Loyalty Programmes 4

IFRIC 14 The Limit on a Defined Benefit Asset, Minimum FundingRequirements and their Interaction

4

Amendments to Philippine Interpretations IFRIC - 14:Prepayments of a Minimum Funding Requirement

4

IFRIC 15 Agreements for the Construction of Real Estate See footnote +

IFRIC 16 Hedges of a Net Investment in a Foreign Operation 4

IFRIC 17 Distributions of Non-cash Assets to Owners 4

IFRIC 18 Transfers of Assets from Customers 4

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments 4

- 5 -


*SGVFS017065*


Adopted NotAdopted

NotApplicable

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 4

IFRIC 21 Levies 4

SIC-7 Introduction of the Euro 4

SIC-10 Government Assistance - No Specific Relation to OperatingActivities

4

SIC-12 Consolidation - Special Purpose Entities 4

Amendment to SIC - 12: Scope of SIC 12 4

SIC-13 Jointly Controlled Entities - Non-Monetary Contributions byVenturers

4

SIC-15 Operating Leases - Incentives 4

SIC-25 Income Taxes - Changes in the Tax Status of an Entity or itsShareholders

4

SIC-27 Evaluating the Substance of Transactions Involving the LegalForm of a Lease

4

SIC-29 Service Concession Arrangements: Disclosures. 4

SIC-31 Revenue - Barter Transactions Involving Advertising Services 4

SIC-32 Intangible Assets - Web Site Costs 4

Century Properties Group, Inc.Financial Ratios

2015 2014 2013Current Ratio 2.8x 2.7x 2.0xDebt to Equity Ratio 1.0x 0.8x 0.5xAsset to Equity Ratio 2.6x 2.4x 2.3x

2015 2014 2013Return on Assets 4.4% 7.5% 8.2%Return on Equity 10.9% 17.5% 18.8%EBIT 2,202.3 3,187.8 2,746.5EBITDA 2,259.0 3,249.0 2,810.0Total Debt 13,916.0 10,931.5 6,039.1Net Debt 11,907.7 9,502.2 4,600.3Gross Profit from Real Estate Sales Margin 43.8% 45.6% 42.1%Net Income Margin 14.6% 16.9% 17.1%Net debt-to-equity ratio 0.8x 0.7x 0.4xDebt-to-EBITDA ratio 6.2x 3.4x 2.1xNet debt-to-EBITDA ratio 5.3x 2.9x 1.6x

As of December 31


Century Properties Group, Inc.Other Financial Data

Financial Ratios[Amount in millions] 2012 2013 20141. Return on Assets 12.9% 8.2% 7.5% 4.4%

Net income [Annualized] 1,849.8 1,844.7 2,158.9 1,519.0Total Assets [Average] 14,294.8 22,361.3 28,908.1 34,564.5

2. Return on Equity 29.4% 18.8% 17.5% 10.9%Net income [Annualized] 1,849.8 1,844.7 2,158.9 1,519.0Total Equity [Average] 6,281.9 9,838.0 12,369.7 13,969.2

3. EBIT 2,539.2 2,746.5 3,187.8 2,202.3Net Income 1,849.8 1,844.7 2,158.9 1,519.0Interest 49.1 29.2 16.7 72.0Provision for income tax 640.2 872.5 1,012.2 611.3

4. EBITDA 2,602.6 2,810.0 3,249.0 2,259.0Net Income 1,849.8 1,844.7 2,158.9 1,519.0Interest 49.1 29.2 16.7 72.0Provision for income tax 640.2 872.5 1,012.2 611.3Depreciation and amortization 63.4 63.6 61.2 56.7

5. Total Debt 3,661.0 6,039.1 10,931.5 13,916.0Short-term debt 351.4 579.7 673.3 961.6Current portion of long-term debt 387.4 1,178.2 1,924.3 2,635.3Long-term debt - net of current portion 2,922.2 4,281.2 5,676.5 7,651.7Bonds 0.0 0.0 2,657.3 2,667.5

6. Net Debt 2,759.2 4,600.3 9,502.2 11,907.7Total Debt 3,661.0 6,039.1 10,931.5 13,916.0Cash and cash equivalents (901.8) (1,438.9) (1,429.2) (2,008.3)

7. Gross Margin 44.5% 42.1% 45.6% 43.8%Real estate sales 8,582.0 9,304.2 10,822.9 7,751.3Interest accretion 320.9 654.8 825.6 801.8Total 8,902.9 9,959.0 11,648.6 8,553.1Cost of real estate sales 4,940.7 5,766.9 6,342.6 4,808.6Gross profit with accretion 3,962.2 4,192.1 5,306.0 3,744.5

8. Net Margin 19.2% 17.1% 16.9% 14.6%Net Income 1,849.8 1,844.7 2,158.9 1,519.0Total revenue 9,611.2 10,809.1 12,760.8 10,381.3

9. Net debt-to-equity ratio 0.3x 0.4x 0.7x 0.8xNet Debt 2,759.2 4,600.3 9,502.2 11,907.7Total equity 8,241.0 11,435.0 13,304.4 14,633.9

9. Total debt-to equity ratio 44.4% 52.8% 82.2% 1.0xTotal Debt 3,661.0 6,039.1 10,931.5 13,916.0Total equity 8,241.0 11,435.0 13,304.4 14,633.9

9. Debt-to-total capitalization ratioTotal Debt 3,661.0 6,039.1 10,931.5 13,916.0

10. Debt-to-EBITDA ratio 1.4x 2.1x 3.4x 6.2xTotal Debt 3,661.0 6,039.1 10,931.5 13,916.0EBITDA 2,602.6 2,810.0 3,249.0 2,259.0

11. Net debt-to-EBITDA ratio 1.1x 1.6x 2.9x 5.3xNet Debt 2,759.2 4,600.3 9,502.2 11,907.7EBITDA 2,602.6 2,810.0 3,249.0 2,259.0

12. Net Liabilities-to-Equity ratio 1.3x 1.3x 1.4x 1.6xTotal Liabilities 10,315.5 14,731.0 18,345.8 22,845.0Equity 8,241.0 11,435.0 13,304.4 14,633.9

As of or for the year ended December 31 FY 2015

1

COVER SHEET

6 0 5 6 6

S.E.C. Registration Number

C E N T U R Y P R O P E R T I E S G R O U P

I N C .

(FORMERLY EAST ASIA POWER RESOURCES CORPORATION)(Company’s Full Name)

21st FLOOR, PACIFIC STAR BUILDING, SEN. GIL PUYAT CORNER MAKATI AVE., MAKATI CITY(Business Address: No. Street City / Town / Province)

ATTY. ISABELITA CHING-SALES (632) 7938905

Contact Person Company Telephone Number

SEC FORM – ACGR-1Consolidated Report for 2015

1 2 3 1 0 6 2 7

Month Day FORM TYPE Month Day

Fiscal Year Annual Meeting

Secondary License Type, If Applicable

Dept. Requiring Amended Articles Number/Section

Total Amount of Borrowings

------------------------------------------------------------------------------------------------------------------------

To be accomplished by SEC Personnel concerned

File Number LCU

Document I.D. Cashier

STAMPS

Remarks = pls. use black ink for scanning purposes.

2

SECURITIES AND EXCHANGE COMMISSION

SEC FORM – ACGR-1

ANNUAL CORPORATE GOVERNANCE REPORT

1. Date of Report (Date of earliest event reported): 2015

2. SEC Identification Number: 60566

3. BIR Tax Identification No. : 004-504-281-000

4. Exact name of issuer as specified in its charter:

CENTURY PROPERTIES GROUP INC.

5. Province, country or other jurisdiction of incorporation: Metro Manila

6. Industry Classification Code: (SEC Use Only)

7. Address of principal office/Postal Code: 21st Floor, Pacific Star Building, Sen. Gil PuyatAvenue corner Makati Avenue, Makati City

8. Issuer's telephone number, including area code: (632) 793-8905

3

TABLE OF CONTENTSA. BOARD MATTERS………………………………………………………………………………………………………………………….……….4

1) BOARD OF DIRECTORS

(a) Composition of the Board………………………………………………………………………………….………4

(b) Corporat Governance Policy/ies……………………………………………………………………………….4

(c) Review and Approval of Vision and Vision………………….……………………………………........5

(d) Directorship in Other Companies…………………………………………………………………………….6

(e) Shareholding in the Company………………………………………………………………………………….7

2) CHAIRMAN AND CEO…………………………………………………………………………………………………………………7

3) PLAN FOR SUCCESSION OF CEO/MANAGING DIRECTOR/PRESIDENT AND TOP KEY POSITIONS…7

4) OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS……………………………………….8

5) CHANGES IN THE BOARD OF DIRECTORS……………………………………………………………………………………86) ORIENTATION AND EDUCATION PROGRAM……………………………………………………..……………………….9

B. CODE OF BUSINESS CONDUCT & ETHICS……………………………………………………………………………………………….9

1) POLICIES………………………………………………………………………………………………………………………………….11

2) DISSEMINATION OF CODE……………………………………………………………………………………………….………11

3) COMPLIANCE WITH CODE……………………………………………………………………………………………………….11

4) RELATED PARTY TRANSACTIONS……………………………………………………………………………………………..12

(a) Policies and Procedures…………………………………………………………………………………………..12

(b) Conflict of Interest…………………………………………………………………………………………………13

5) FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS………………………………………………….……13

6) ALTERNATIVE DISPUTE RESOLUTION……………………………………………………………………………………….14

C. BOARD MEETINGS & ATTENDANCE…………………………………………………………………………………………….…….15

1) SCHEDULE OF MEETINGS…………………………………………………………………………………………………………15

2) DETAILS OF ATTENDANCE OF DIRECTORS………………………………………………………………………………..15

3) SEPARATE MEETING OF NON-EXECUTIVE DIRECTORS……………………………………………………………15

4) QUORUM REQUIREMENT ……………………………………………………………………………………………………….15

5) ACCESS TO INFORMATION…………………………………………………………………………………………………….15

6) EXTERNAL ADVICE……………………………………………………………………………………………………………………16

7) CHANGES IN EXISTING POLICIES…………………………………………………………………………………………….16

D. REMUNERATION MATTERS………………………………………………………………………………………………………………17

1) REMUNERATION PROCESS…………………………………………………………………………………………………….17

2) REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS…………………………………………………….17

3) AGGREGATE REMUNERATION ………………………………………………………………………………………………18

4

4) STOCK RIGHTS, OPTIONS AND WARRANTS………………………………………………………………………………19

5) REMUNERATION OF MANAGEMENT………………………………………………………………………………….….19

E. BOARD COMMITTEES…………………………………………………………………………………………………………………….20

1) NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES………………………………………………..20

2) COMMITTEE MEMBERS…………………………………………………………………………………………………………21

3) CHANGES IN COMMITTEE MEMBERS…………………………………………………………………………………….22

4) WORK DONE AND ISSUES ADDRESSED………………………………………………………………………………… 22

5) COMMITTEE PROGRAM…………………………………………………………………………………………………………22

F. RISK MANAGEMENT SYSTEM…………………………………………………………………………………………………………23

1) STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM………………………………………..23

2) RISK POLICY…………………………………………………………………………………………………………………………..24

3) CONTROL SYSTEM……………………………………………………………………………………………………………………27

G. INTERNAL AUDIT AND CONTROL……………………………………………………………………………………………………29

1) STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM………………………………………..30

2) INTERNAL AUDIT

(a) Role, Scope and Internal Audit Function………………………………………………………………..30

(b) Appointment/Removal of Internal Auditor………………………………………………………………31

(c) Reporting Relationship with the Audit Committee…………………………………………………..31

(d) Resignation, Re-assignment and Reasons…………………………..……………………………………31(e) Progress against Plans, Issues, Findings andExamination Trends………………………………………………………..….……………………………………32

(f) Audit Control Policies and Procedures…………………………………………………………………..32

(g) Mechanisms and Safeguards………………………………………………………………………………...32

H. ROLE OF STAKEHOLDERS….…………………………………………………………………………………………………………...33I. DISCLOSURE AND TRANSPARENCY………………………………………………………………………………………………..…34J. RIGHTS OF STOCKHOLDERS……………………………………………………………………………………………………………35

1) RIGHT TO PARTICIPATE EFFECTIVELY IN STOCKHOLDERS’ MEETINGS…………………………………….36

2) TREATMENT OF MINORITY STOCKHOLDERS…………………………………………………………………………….37K. INVESTORS RELATIONS PROGRAM…………………………………………………………………………………………………..41

L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES………………………………………………………………………….41

M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL…………………………………………………………………….41

N. INTERNAL BREACHES AND SANCTIONS…………………………………………………………………………………………….42

5

A. BOARD MATTERS

1) Board of Directors

Number of Directors per Articles of Incorporation Ten (10)

Actual number of Directors for the year Ten (10)

(a) Composition of the Board

Complete the table with information on the Board of Directors:

Director’s Name

Type [Executive(ED), Non-

Executive (NED)or IndependentDirector (ID)]

Ifnominee,identifythe

principal

Nominator in thelast election (ifID, state therelationship withthe nominator)

Date firstelected

Date lastelected (if ID,state thenumber ofyears servedas ID)

Electedwhen(Annual/SpecialMeeting)

No. ofyearsserved asdirector

Jose E.B. Antonio ED CPI Janna MaeTecson –None

07/11/2011 06/22/2015 Annual 5

Jose L. Cuisia, Jr. ID CPI Janna MaeTecson – None

06/22/2015 06/22/2015,1yr

Annual 1

Stephen T. CuUnjieng ID CPI Janna MaeTecson – None

06/22/2015 06/22/2015,1yr

Annual 1

Carlos C. Ejercito ID CPI Dindin Cruz –None

06/22/2015 06/22/2015,1yr

Annual 1

John Victor R. Antonio ED CPI Janna MaeTecson –None

07/11/2011 06/22/2015 Annual 5

Jose Marco R. Antonio ED CPI Janna MaeTecson – None

07/11/2011 06/22/2015 Annual 5

Jose Roberto R. Antonio ED CPI Janna MaeTecson –None

07/11/2011 06/22/2015 Annual 5

Jose Carlo R. Antonio ED CPI Janna MaeTecson – None

07/11/2011 06/22/2015 Annual 5

Rafael G. Yaptinchay ED CPI Janna MaeTecson –None

07/11/2011 06/22/2015 Annual 5

Ricardo P. Cuerva NED CPI Janna MaeTecson - None

07/11/2011 06/22/2015 Annual 5

(b) Provide a brief summary of the corporate governance policy that the board of directors has adopted.Please emphasize the policy/ies relative to the treatment of all shareholders, respect for the rights of

6

minority shareholders and of other stakeholders, disclosure duties, and board responsibilities.

The Board of Directors of CPGI believes that corporate governance is a necessary component of what constitutessound strategic business management. CPGI undertakes every effort necessary to create awareness and promotebest governance standards. The Company’s Articles of Incorporation and By-laws, including its amendments,constitute the basic structures of governance, primary duties of the Board of Directors and Officers while theManual of Corporate Governance supplements these Articles of Incorporation and By-laws in setting forth theprinciples of good and transparent governance. The company has only one class of shares and each share carriesone vote.

The Board of Directors and the Officers ensures adherence to mandated regulatory compliances, corporateprinciples and best practices. The corporate powers, business and property of the corporation are exercised andcontrolled by the Board of Directors. The Company follows and adheres to the following policies under the revisedAmended Corporate Governance Manual as submitted to the Honorable Commission on July 2014 in compliancewith SEC Memo 9 series 2014.

It is the primary duty of the Board of Directors to promote shareholders’ rights. The Management on the otherhand is responsible for guiding the Company towards its goals. The Chief Compliance Officer oversees theCorporate Compliance Program, functioning as an independent and objective body that reviews and evaluatescompliance issues and concerns within the Company. The Compliance Officer ensures that relevant and accurateinformation are timely disclosed to the stockholders, the investing public and regulatory agencies, and ensuresthat the Board of Directors, management and employees are in compliance with the rules and regulations ofregulatory agencies, that company policies and procedures are being followed, and that behavior in theorganization meets the company’s Standards of Conduct.

The Company respects all rights of shareholders, especially the minority shareholders which are provided in itsArticles of Incorporation, as follows:

ARTICLE 6: STOCKHOLDERS’ RIGHTS AND PROTECTION OF MINORITY STOCKHOLDERS’ INTERESTS

The Company recognizes that the most cogent proof of corporate governance is that which is visible to the eyes of its shareholders.Therefore, the provisions hereunder are issued for the guidance of all internal and external parties concerned, as governance covenantbetween the Company and all its shareholders.

A. For the protection of shareholders and minority interests, the Board shall be committed to respect the following rights of thestockholders:

(1) Voting Right(a) Shareholders shall have the right to elect, remove and replace directors and vote on certain corporateacts, in accordance with the Corporation Code.(b) Cumulative voting shall be used in the election of directors.(c) A director shall not be removed without cause, if it will deny minority shareholders of representation inthe Board.

(2) Pre-Emptive Right

All stockholders shall have pre-emptive rights, unless the same is denied in the Articles of Incorporation, or anamendment thereto, of the Company. All stockholders shall have the right to subscribe to the capital stock of theCompany. The Articles of Incorporation shall lay down the specific rights and powers of the shareholders withrespect to the particular shares they hold, all of which shall be protected by law so long as they shall not be inconflict with the Corporation Code.

(3) Power of InspectionSubject to reasonable restrictions in accordance with the Corporation Code and jurisprudence, all shareholdersshall be allowed to inspect the corporate books and records of the Company, including minutes of Board meetingsand stock registries, and shall be furnished with annual reports, including financial statements, without cost.

(4) Right to Information(a) The shareholders shall be provided, upon request, with periodic reports which disclose personal andprofessional information about the directors and officers of the Company, and certain other matters such as the

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directors’ and officers’ holdings of the Company’s shares, dealings with the Company, relationships amongdirectors and key officers of the Company, and the aggregate compensation of the directors and officers.(b) The minority shareholders shall have the right to propose the holding of stockholder’s meeting, and theright to propose items in the agenda of the meeting, provided that the items in the agenda are for legitimate

business purposes. Legitimate business purposes shall include information on matters under theimmediately succeeding subsection.(c) The minority shareholders shall have access to any and all information relating to matters for which themanagement is accountable for and should disclose to the shareholders.

5. Right to Dividends(a) All shareholders shall have the right to receive dividends, subject to the discretion of the Board.(b) The Company shall be compelled to declare dividends when its retained earnings shall be in excess ofone hundred percent (100%) of its paid-in capital stock except in the following cases:

(b.1) When justified by definite corporate expansion projects or programs approved by the Board,or(b.2)When the Company is prohibited under any loan agreement with any financial institution orcreditor, whether local or foreign, from declaring dividends without its consent, and such consent hasnot been secured, or(b.3) When it can be clearly shown that such retention is necessary under special circumstancesobtaining in the Company, such as when there is a need for a special reserve for probablecontingencies.

6. Appraisal RightThe shareholders shall have appraisal right or the right to dissent and demand payment of the fair value of theirshares in the manner provided for under Section 82 of the Corporation Code of the Philippines, under any of thefollowing circumstances:

(a) In case an amendment to the Articles of Incorporation of the Company has the effect of changing orrestricting the rights of any stockholders or class of shares, or of authorizing preferences in any respectssuperior to those of outstanding shares of any class, or of extending or shortening the term of corporateexistence;

(b) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all ofthe corporate property and assets as provided in the Corporation Code; and

(c) In case of merger or consolidation.

B. It shall be the duty of the Board to promote shareholder rights, remove impediments to exercise of shareholders’ rights, andallow possibilities to seek redress for violation of their rights. The Board shall encourage the exercise of shareholders’ votingrights and the solution of collective action problems through appropriate mechanisms. The Board shall pave the way for theelectronic filing and distribution of shareholder information necessary to make informed decisions, subject to legalconstraints.

The Company likewise has adopted a Governance Self-rating form and important regulations on CorporateGovernance Policies, as follows:

ARTICLE 7: GOVERNANCE SELF-RATING FORM

The Board shall create an internal self-rating system that can measure the performance of the Board and Management in accordancewith the criteria provided for in this Code.

The creation and implementation of such self-rating form, including its salient features, may be disclosed in the corporation’s annualreport.

ARTICLE 8: REPORTORIAL OR DISCLOSURE SYSTEM OF COMPANY’S CORPORATE GOVERNANCE POLICIES

The essence of corporate governance is transparency. The more transparent the internal workings of the Company are, the moredifficult it will be for Management and dominant stockholders to mismanage the Company or misappropriate its assets.

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It is therefore essential that all material information about the corporation which could adversely affect the viability or the interest of theCompany’s stockholders and other stakeholders shall be publicly and timely disclosed. Information shall include but not limited toearnings results, acquisition or disposition of assets, off balance sheet transactions, related party transactions and direct and indirectremuneration of the Board and Management.

The Board shall therefore commit at all times to full disclosure of materials information dealings. It shall cause the filings of all requiredinformation through the appropriate Exchange mechanisms for listed companies and submissions to the Commission for the interest ofits stockholders and other stakeholders. (as amended on July 31, 2014)

The following are the guidelines of the Company’s disclosure system:

A. The reports or disclosures required under this Manual shall be prepared and submitted to the Commissionby the responsible committee or officer through the Company’s Compliance Officer

B. All material information shall be publicly disclosed. Material information shall be anything that couldpotentially affect share price, and shall include earnings results, acquisition or disposal of assets, boardchanges, related party transactions, shareholdings of directors and changes in ownership.

C. Other information that shall always be disclosed includes remuneration, including stock options, of alldirectors and senior management and off-balance sheets transactions.

D. All disclosed information shall be released via the approved stock exchange procedure for companyannouncements, as well as through the current and annual reports.

E. The Board shall commit at all times to fully disclose material information dealings. The Board shall causethe filing of all required information for the interest of the stakeholders.

ARTICLE 9: COMMITMENT TO GOOD CORPORATE GOVERNANCE

The Board of Directors and its Senior Management shall establish and implement this Manual on Corporate Governance in accordancewith the SEC Revised Code of Corporate Governance. The rules embodied in this manual shall be used as reference by the members ofthe Board and Management.

The following are the guidelines for the effective implementation of this Manual:

A. COMMUNICATION PROCESS

(1) This Manual shall be available for inspection by any stockholder of the Company at reasonablehours on business days.

(2) All directors, executives, and division and department heads of the Company are tasked to ensurethe thorough dissemination and communication of this Manual to all employees and relatedparties and to enjoin compliance in the process.

(3) An adequate number of printed copies of this Manual must be reproduced by the HumanResources Department, or its equivalent, of the Company, with a minimum of at least one (1) hardcopy of the Manual for every department.

B. TRAINING PROCESS

(1) If necessary, funds shall be allocated for the purposes of conducting an orientation program orworkshop to operationalize this Manual

(2) A director shall, before assuming as such, be required to attend a seminar on corporategovernance which shall be conducted by a duly recognized private or government institute.

C. MONITORING AND ASSESSMENT

(1) Each Committee shall report regularly to the Board of Directors.(2) The Compliance Officer shall establish an evaluation system todetermine and measure compliance with this Manual. Any violation thereof shall subject the responsible officer to

employee to the penalty provided under Article 11 of this Manual.

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(3) The establishment of such evaluation system, including the featuresthereof, shall be disclosed in the Company’s Annual Report (SEC Form 17-A). The adoption of such performance

evaluation system must be covered by Board approval.(4) This Manual shall be subject to annual review, unless the same frequency is amended by the Board.(5) All business processes and practices being performed within any department or business unit of the

Company that are not consistent with any portion of this Manual shall be revoked, unless upgraded to compliant extent.

ARTICLE 10: REGULAR REVIEW OF THE MANUAL AND SCORECARD

To monitor the compliance of CPGI with this Manual, Commission shall require the Company to accomplish annually a scorecard onthe scope, nature and extent of the actions of the Board and Senior Management to meet the objectives of this Manual.

The Commission shall periodically review this Code to ensure that it meets its objectives.

(c) How often does the Board review and approve the vision and mission?

The Board of Directors gives the essential chart of the vision and mission of the company in line with thecorporate objectives of Management. The Board of Directors endeavor to review the Company’s vision andmission, corporate governance practices on an annual basis and provide for necessary revisions andimprovements, as maybe needed.

(d) Directorship in Other Companies

(i) Directorship in the Company’s Group1

Identify, as and if applicable, the members of the company’s Board of Directors who hold the office ofdirector in other companies within its Group:

Director’s Name Corporate Name of theGroup Company

Type of Directorship (Executive,Non-Executive, Independent).Indicate if director is also the

Chairman.

Jose E.B. Antonio Century Properties Inc. (CPI,Parent Company)

Century City DevelopmentCorporation (CCDC)

Century City Corporation (CCC)

Century Limitless Corporation(CLC)

Century PropertiesManagement Inc. (CPMI)

Executive, Chairman

Executive, Chairman

Executive, Chairman

Executive, Chairman

Executive, Chairman

John Victor R. Antonio CPICCDCCCCCLCCPMI

ExecutiveExecutiveExecutiveExecutiveExecutive

1 The Group is composed of the parent, subsidiaries, associates and joint ventures of the company.

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Jose Marco R. Antonio CPICCDCCCCCLCCPMI

ExecutiveExecutiveExecutiveExecutiveExecutive

Jose Roberto R. Antonio CPICCCCLC

ExecutiveExecutiveExecutive

Jose Carlo R. Antonio CPICLCCPMI

ExecutiveExecutiveExecutive

Rafael G. Yaptinchay CPI Executive

Ricardo P. Cuerva CPI Executive

(ii) Directorship in Other Listed Companies

Identify, as and if applicable, the members of the company’s Board of Directors who are also directorsof publicly-listed companies outside of its Group:

Director’s Name Name of Listed Company

Type of Directorship(Executive, Non-Executive,Independent). Indicate ifdirector is also the Chairman.

Rafael G. Yaptinchay Marc Ventures Inc. Independent

Jose L. Cuisia, Jr Phinma CorporationSM Prime Holdings Inc.Manila Water Company, Inc.

IndependentIndependentIndependent

Stephen T. CuUnjieng Aboitiz Equity Ventures, Inc. Independent

Carlos C. Ejercito Aboitiz Power CorporationBloomberry Resorts Corporation

IndependentIndependent

(iii) Relationship within the Company and its Group

Provide details, as and if applicable, of any relation among the members of the Board of Directors,which links them to significant shareholders in the company and/or in its group:

Director’s Name Name of theSignificant Shareholder Description of the relationship

Jose E.B. Antonio CPI Majority Shareholder

John Victor R. Antonio CPI Shareholder, son of Jose E.B.Antonio

Jose Marco R. Antonio CPI Shareholder, son of Jose E.B.Antonio

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Jose Roberto R. Antonio CPI Shareholder, son of Jose E.B.Antonio

Jose Carlo R. Antonio CPI Shareholder, son of Jose E.B.Antonio

(iv) Has the company set a limit on the number of board seats in other companies (publicly listed,ordinary and companies with secondary license) that an individual director or CEO may holdsimultaneously? In particular, is the limit of five board seats in other publicly listed companiesimposed and observed? If yes, briefly describe other guidelines:

GuidelinesMaximum Number of

Directorships in other companies

Executive Director No limits placed N.A.

Non-Executive Director No limits placed N.A.

CEO No limits placed N.A.

(e) Shareholding in the Company

Complete the following table on the members of the company’s Board of Directors who directly andindirectly own shares in the company:

Name of Director Number ofDirect shares

Number ofIndirect shares / Through(name of record owner)

% of CapitalStock

Jose E.B. Antonio 1 nominal 3,805,810,011/CPI 32.81Jose Victor R. Antonio 1 nominal 634,300,898/CPI 5.47Jose Marco R. Antonio 1 nominal 634,300,898/CPI 5.47Jose Roberto R. Antonio 1 nominal 634,300,898/CPI 5.47Jose Carlo R. Antonio 1 nominal 634,300,898/CPI 5.47Rafael G. Yaptinchay 1 nominal 146,377,557/CPI 1.26Ricardo P. Cuerva 1 nominal 1,317,395,239/CPI 11.36TOTAL 7 6,538,186,453 67.30

2) Chairman and CEO

(a) Do different persons assume the role of Chairman of the Board of Directors and CEO? If no, describe thechecks and balances laid down to ensure that the Board gets the benefit of independent views.

Yes No x

Identify the Chair and CEO:

Chairman of the Board Jose E.B. Antonio

CEO/President Jose E.B. Antonio

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The Chairman and CEO of the Company is held by one individual. Mr. Jose E.B. Antonio is the current Chairmanof the Board and Chief Executive Officer of the Company who has the moral integrity and excellent businessacumen to effectively manage the Company in its corporate goals and objectives. The Board having a mix ofnon-executive and independent directors are separate from Management and gives the assurance of a balancedview and perspective with regards to matters pertaining to board decisions.

(b) Roles, Accountabilities and Deliverables

Define and clarify the roles, accountabilities and deliverables of the Chairman and CEO.

Chairman Chief Executive Officer

Role Foster long term growth Manages company operations

Accountabilities Policies formulation and expressedfiduciary duties towards shareholdersInitiate and develop corporateobjectives and implement policies

Deliverables Comply with principles of goodgovernance Meet revenue and growth targets

3) Explain how the board of directors plan for the succession of the CEO/Managing Director/President and thetop key management positions?

The board looks for suitable candidates within the organization and provides training and opportunities forgrowth and development to identified potential candidates who could fill positions once vacant.

4) Other Executive, Non-Executive and Independent Directors

Does the company have a policy of ensuring diversity of experience and background of directors in the board?Please explain.

The company strives to promote diversity within the Board. Positions which are not taken up by the majorshareholders are filled by members who have relevant experience and can bring ideas and opinions that is bothbeneficial for the Company and its shareholders.

The qualifications of directors shall be in accordance with the qualifications for membership provided for in theCorporation Code, Securities Regulation Code and other relevant laws which include among others, the following:

(1) The candidate shall be a holder of at least one (1) share of stock of the Company;

(2) The candidate shall at least be a college graduate or shall have sufficient experience inmanaging the business of the Company to substitute and compensate for such formaleducation;

(3) The candidate shall be at least twenty-one (21) years of age;

(4) The candidate shall possess proven integrity and probity;

Does it ensure that at least one non-executive director has an experience in the sector or industry the companybelongs to? Please explain.

The company’s independent directors are well versed in corporate matters, experts in the field of financial, law

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and industry matters. They have the adequate understanding of the real estate industry and competence inmanaging relevant industry and professional organizations. Other non executive directors are experts in their ownsector or industry.

Define and clarify the roles, accountabilities and deliverables of the Executive, Non-Executive and IndependentDirectors:

Executive Non-Executive Independent Director

Role Represents Management Represents majorshareholders’ interestsProvides neutralobservations

Accountabilities Management of businessaffairsEnsures sustainablegrowth

Setting high standards forbest practice

Deliverables Meet corporateobjectives

Monitors companyprogress

Safeguard interest of allshareholders

Provide the company’s definition of "independence" and describe the company’s compliance to the definition.

An independent director shall mean a person other than an officer or employee of the corporation, its parent or itssubsidiaries, or any other individual having a relationship with the corporation as would interfere with the exercise ofindependent judgment in carrying out the responsibilities of a director. The Company’s Independent Directors haveconfirmed to the Corporate Secretary that they do not hold any interests affiliated with the Company, or any of thecontrolling shareholders at the time of their appointment and election.

Does the company have a term limit of five consecutive years for independent directors? If after two years, thecompany wishes to bring back an independent director who had served for five years, does it limit the term for nomore than four additional years? Please explain.

In compliance with the SEC Memorandum circular no 9 series of 2011, the Company’s independent director has a termlimit of five years. After the 5 year term limit, a two year (2) grace period is implemented with no term limits.

5) Changes in the Board of Directors (Executive, Non-Executive and Independent Directors)

(a) Resignation/Death/Removal

Indicate any changes in the composition of the Board of Directors that happened during the period:

Name Position Date of Cessation Reason

Washington Sycip Independent Director 06/22/2015 Retirement

Atty. Monico Jacob V.Jacob Independent Director 06/22/2015 Retirement

(b) Selection/Appointment, Re-election, Disqualification, Removal, Reinstatement and Suspension

Describe the procedures for the selection/appointment, re-election, disqualification, removal,reinstatement and suspension of the members of the Board of Directors. Provide details of the processesadopted (including the frequency of election) and the criteria employed in each procedure:

Procedure Process Adopted Criteria

a. Selection/Appointment

(i) Executive Directors Nominated/Elected Ex-officio – CEO

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(ii) Non-ExecutiveDirectors Nominated/Elected Major Shareholders

(iii) IndependentDirectors Nominated/Elected Expertise in industry;

Experience and knowledge

b. Re-appointment

(i) Executive Directors Election at Annual StockholdersMeeting One vote for one share

(ii) Non-ExecutiveDirectors

Election at Annual StockholdersMeeting One vote for one share

(iii) IndependentDirectors

Election at Annual StockholdersMeeting One vote for one share

c. Permanent Disqualification – No Directors Permanently Disqualified

(i) Executive Directors NA NA

(ii) Non-ExecutiveDirectors NA NA

(iii) IndependentDirectors NA NA

d. Temporary Disqualification – No Directors Temporarily Disqualified




e. Removal – No Directors removed from office




f. Re-instatement – No Directors Removed from or re-instated into office




g. Suspension – No Directors Suspended



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The qualifications of directors shall be in accordance with the qualifications for membership which includeamong others, the following:

(1) The candidate shall be a holder of at least one (1) share of stock of the Company;

(2) The candidate shall at least be a college graduate or shall have sufficient experience inmanaging the business of the Company to substitute and compensate for such formaleducation;

(3) The candidate shall be at least twenty-one (21) years of age;

(4) The candidate shall possess proven integrity and probity;

Disqualification of Directors

I. Permanent Disqualification

The following shall be grounds for the permanent disqualification of a director:

a. Any person finally convicted judicially of any offense involving moral turpitude or fraudulentacts or transgressions;

b. Any person finally found by the Commission or court of law or administrative body to havewilfully violated, or wilfully aided, abetted, counselled, induced or procured the violation of,any provision of the Securities Regulation Code, the Corporation Code, or any other lawadministered by the Commission or the Bangko Sentral ng Pilipinas, or any rule, regulation ororder of the Commission or the Bangko Sentral ng Pilipinas;

c. Any person judicially declared to be insolvent;

d. Any person finally found guilty by a foreign court or tribunal or equivalent financial regulatoryauthority of acts, violations or misconduct similar to any of the acts, violations or misconductenumerated in the foregoing paragraphs a, b, and c;

e. Conviction by final judgment of an offense punishable by imprisonment for a period exceedingsix (6) years, or a violation of the Securities Regulation Code or the Corporation Codecommitted within five (5) years prior to the date of the director’s nomination, election orappointment; and

f. If the independent director becomes an officer or employee of the Company, such independentdirector shall be automatically disqualified from being an independent director.

II. Temporary Disqualification

Any of the following shall be a ground for the temporary disqualification of a director:

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a. Refusal to fully disclose the extent of his business interests as required by the SecuritiesRegulation Code and its implementing Rules and Regulations. This disqualification shall be ineffect as long as the director’s refusal persists;

b. Absence or non-participation for whatever reason for more than fifty percent (50%) of all Boardmeetings, both regular or special, of a member of the Board of Directors during hisincumbency, or any twelve (12) month period during said incumbency, unless the absence isdue to illness, death in the immediate family or serious accident. The disqualification appliesfor purposes of the succeeding election;

c. Dismissal or termination from directorship in another listed corporation for cause. Thisdisqualification shall be in effect until he has cleared himself of any involvement in the allegedirregularity;

d. Being under preventive suspension by the Company, if and executive director;

e. Conviction of any of the grounds for the disqualification of directors that has not yet becomefinal; and

f. Beneficial equity ownership of an independent director in the corporation or its subsidiariesand affiliates of more than two percent (2%) of its subscribed capital stock. The disqualificationshall be lifted if the limit is later complied with.

A temporarily disqualified director shall, within sixty (60) business days from such disqualification,take the appropriate action to remedy or correct the disqualification. Failure to do so for unjustifiedreasons shall disqualify the director permanently.

Voting Result of the last Annual General Meeting

Name of Director Votes Received

Jose E.B. Antonio 7,867,513,968 shares or 67.83%

Jose L. Cuisia, Jr 8,897,771,440 shares or 76.71%

Stephen T. CuUnjieng 8,897,771,440 shares or 76.71%

Carlos C. Ejercito 8,897,771,440 shares or 76.71%

John Victor R. Antonio 7,867,513,968 shares or 67.83%

Jose Marco R. Antonio 7,867,513,968 shares or 67.83%

Jose Roberto R. Antonio 8,897,771,440 shares or 76.71%

Jose Carlo R. Antonio 7,868,877,543 shares or 67.84%

Rafael G. Yaptinchay 8,897,771,440 shares or 76.71%

Ricardo P. Cuerva 7,890,044,068 shares or 68.02%

6) Orientation and Education Program

(a) Disclose details of the company’s orientation program for new directors, if any.

Under the Company’sCorporate Governance manual and best practice, all new directors and senior officers

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are required to take the orientation on good governance and risk management. The Board of Directors shalltake note on the need to implement a policy program for new directors. The current board members, savefor the three new Independent Directors, are all on their 5th year in office since CPGI has changed itManagement from East Asia Power Resources last 2011.

(b) State any in-house training and external courses attended by Directors and Senior Management2 for thepast three (3) years:

1. Corporate Governance Orientation Course for Directors and Officers – August 2011,conducted by Sycip Gorres and Velayo

2. ISO Training Seminar for Systems and Data – May 2012, Neville Clark Inc.3. Strategic Planning Seminar – July 2012, In-house, Corporate Planning Group4. Risk Management Seminar – October 2012, Ateneo Graduate School of Business5. Corporate Governance Seminar for Directors and Key Officers – November 2014,

Philippine Stock Exchange

(c) Continuing education programs for directors: programs and seminars and roundtables attended during theyear.

The directors of the company were not able to attend any seminars for the year 2015.

B. CODE OF BUSINESS CONDUCT & ETHICS

1) Discuss briefly the company’s policies on the following business conduct or ethics affecting directors, seniormanagement and employees:

Business Conduct &Ethics Directors Senior Management Employees

(a) Conflict of Interest

Does not vote onactivities in whichthere is a conflict of

interest

Are not allowed to beinvolved in the decisionmaking process if conflictof interest is present

Are not allowed to beinvolved in the decisionmaking process if conflict ofinterest is present

(b) Conduct ofBusiness and FairDealings

Should follow bestpractices and company

policies

Should follow bestpractices and company

policies

Should follow best practicesand company policies

(c) Receipt of gifts fromthird parties

Based on The Code ofConduct & Discipline,and Offenses &CorrespondingPenalties

Based on The Code ofConduct & Discipline, andOffenses & Corresponding

Penalties


Penalties

(d) Compliance withLaws & Regulations

Monitored by thecompliance officer andother officers



(e) Respect for TradeSecrets/Use of Non-public Information

Policy on non-disclosure in place.Discouraged from

using such information

Policy on non-disclosurein place. Discouragedfrom using suchinformation

Policy on non-disclosure inplace. Discouraged fromusing such information

(f) Use of CompanyFunds, Assets and

Regulated throughManual on Corporate

Regulated throughManual on Corporate

Regulated through Manualon Corporate Governance

2 Senior Management refers to the CEO and other persons having authority and responsibility for planning, directingand controlling the activities of the company.

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Information Governance Governance(g) Employment &Labor Laws &Policies

Meet at least theminimum criteria setby the labor authorities

Meet at least theminimum criteria set bythe labor authorities

Meet at least the minimumcriteria set by the labor

authorities

(h) Disciplinary actionBased on Manual ofCorporate Governance

Based on Manual ofCorporate Governanceand Company policy

Based on Manual ofCorporate Governance and

Company policy

(i) Conflict Resolution

Based on The Code ofConduct & Discipline,and Offenses &CorrespondingPenalties


Penalties


Penalties

1.) Has the code of ethics or conduct been disseminated to all directors, senior management and employees?

Yes, the rules and procedures have been disseminated to management and employees under the Company’s codeof conduct and ethics.

2.) Discuss how the company implements and monitors compliance with the code of ethics or conduct.

The Company is committed to provide an encouraging work environment to its employees, and be an engagingbusiness partner to its clients and service providers. It is the policy of CPGI to promote discipline in theorganization by taking corrective action as may be needed for the protection of all employees and clients, CPGI’sproperties and interests. These rules were prepared to ensure fair and consistent treatment and constructiveactions of any employee who has made a mistake.

The responsibility of ensuring that discipline exists in CPGI is jointly vested upon HRD, Department Heads andSupervisors. All supervisors and Department Heads should encourage the development of an environment wherepositive discipline comes naturally.

Policy measures will be promulgated as the need arises to supplement, implement and amend any of theprovisions contained herein.

3.) Related Party Transactions

(a) Policies and Procedures

Describe the company’s policies and procedures for the review, approval or ratification, monitoring andrecording of related party transactions between and among the company and its parent, joint ventures,subsidiaries, associates, affiliates, substantial stockholders, officers and directors, including their spouses,children and dependent siblings and parents and of interlocking director relationships of members of theBoard.

Related Party Transactions Policies and Procedures

(1) Parent Company All related party transactions have to be on an arms-lengthbasis if the company gets the most competitive product froma related party. Contracts are reviewed by seniormanagement, approved by the majority of the board,monitored and recorded accordingly by the Complianceofficer such contracts are deemed material for disclosure andaffects directly the shareholders of the company and otherofficers in charge for other contracts as the case may be.

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(2) Joint Ventures All related party transactions have to be on an arms-lengthbasis if the company gets the most competitive product froma related party. Contracts are reviewed by seniormanagement, approved by the majority of the board,monitored and recorded accordingly by the Complianceofficer such contracts are deemed material for disclosure andaffects directly the shareholders of the company and otherofficers in charge for other contracts as the case may be.

(3) Subsidiaries All related party transactions have to be on an arms-lengthbasis if the company gets the most competitive product froma related party. Contracts are reviewed by seniormanagement, approved by the majority of the board,monitored and recorded accordingly by the Complianceofficer such contracts are deemed material for disclosure andaffects directly the shareholders of the company and otherofficers in charge for other contracts as the case may be.

(4) Entities Under Common Control All related party transactions have to be on an arms-lengthbasis if the company gets the most competitive product froma related party. Contracts are reviewed by seniormanagement, approved by the majority of the board,monitored and recorded accordingly by the Complianceofficer such contracts are deemed material for disclosure andaffects directly the shareholders of the company and otherofficers in charge for other contracts as the case may be.

(5) Substantial Stockholders All related party transactions have to be on an arms-lengthbasis if the company gets the most competitive product froma related party. Contracts are reviewed by seniormanagement, approved by the majority of the board,monitored and recorded accordingly by the Complianceofficer such contracts are deemed material for disclosure andaffects directly the shareholders of the company

(6) Officers includingspouse/children/siblings/parents No such related party transaction

(7) Directors includingspouse/children/siblings/parents No such related party transaction

(8) Interlocking director relationshipof Board of Directors

The board member has to have knowledge of industry ifhe/she serves on the board of subsidiary etc.

(b) Conflict of Interest

(i) Directors/Officers and 5% or more Shareholders

Identify any actual or probable conflict of interest to which directors/officers/5% or more shareholdersmay be involved.

Details of Conflictof Interest (Actual or Probable)

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Name of Director/sJose E.B. AntonioJohn Victor R. AntonioJose Marco R. AntonioJose Roberto R. AntonioJose Carlo R. Antonio

Ricardo P Cuerva

No actual conflict of interest involved.Jose E.B. Antonio is the father of siblingsMessrs. John Victor R. Antonio, JoseMarco R. Antonio, Jose Carlo R. Antonioand Jose Roberto R. Antonio. ThroughCPI, of which all are shareholders, theyown the majority shares of CPGI.

Mr. Cuerva is one of the shareholders ofCPI. No actual nor probable conflict of

interest as of to date

Name of Officer/s N.A.

Name of Significant ShareholdersPCD Nominee Corporation Foreign andFilipino

PCD Nominee corporation owns beneficialshares of more than 5%. No actual norprobable conflict of interest is involvedsince these shares are publicly held and

traded.

(ii) Mechanism

Describe the mechanism laid down to detect, determine and resolve any possible conflict of interestbetween the company and/or its group and their directors, officers and significant shareholders.

The control environment of the Company consists of (a) the Board which ensures that the Company isproperly and effectively managed and supervised; (b) a Management that actively manages and operates theCompany in a sound and prudent manner; (c) the organizational and procedural controls supported byeffective management information and risk management reporting systems; and (d) an independent auditmechanism to monitor the adequacy and effectiveness of the corporation’s governance, operations, andinformation systems, including the reliability and integrity of financial and operational information, theeffectiveness and efficiency of operations, the safeguarding of assets, and compliance with laws, rules,regulations and contracts.

The minimum internal control mechanisms for the performance of the Board’s and Managament’s oversightresponsibility include review of conflict of interest situations.

The personal interest of directors, key officers and employees should never prevail over the interest of theCompany. If an actual or potential conflict of interest should arise on the part of directors, it should be fullydisclosed and the concerned director should not participate in the decision-making. If a director has aninterest in a matter under consideration by the board, then the director should not participate in thosediscussions and the board should follow any further appropriate processes. Individual directors should beconscious of shareholder and public perceptions and seek to avoid situations where there might be anappearance of conflict of interest.

4.) Family, Commercial and Contractual Relations

(a) Indicate, if applicable, any relation of a family,3 commercial, contractual or business nature that existsbetween the holders of significant equity (5% or more), to the extent that they are known to the company:

Names of RelatedSignificant Shareholders Type of Relationship Brief Description of the

Relationship

3 Family relationship up to the fourth civil degree either by consanguinity or affinity.

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Jose E.B. AntonioJohn Victor R. AntonioJose Marco R. AntonioJose Roberto R. AntonioJose Carlo R. Antonio

Family

Jose E.B. Antonio is the fatherof siblings Messrs. John VictorR. Antonio, Jose Marco R.Antonio, Jose Carlo R. Antonioand Jose Roberto R. Antonio.Through CPI, of which all areshareholders, they own themajority shares of CPGI.

Ricardo P. Cuerva

Shareholder of Parent Companyof CPGI and indirect beneficialowner of shares of CPGI.Business partner of thesubsidiaries for constructionunder Century PropertiesConstruction Group

Mr. Cuerva is one of thebusiness partners of the CPGIsubsidiaries for constructionunder Century PropertiesConstruction Group

(b) Indicate, if applicable, any relation of a commercial, contractual or business nature that exists betweenthe holders of significant equity (5% or more) and the company:

Names of RelatedSignificant Shareholders Type of Relationship Brief Description

Ricardo P. Cuerva Indirect shareholder of theparent company CPI and CPGI

Mr. Cuerva is the Chairman ofPinehill Corporation, which owns11% of CPI and indirectly thebeneficial owner of CPGI. Healso manages the constructionof projects of the subsidiaries

(c) Indicate any shareholder agreements that may impact on the control, ownership and strategic direction ofthe company:

There are no such shareholders agreements in place that may impact control, ownership and strategicdirection of the company

Name of Shareholders % of Capital Stock affected(Parties)

Brief Description of theTransaction

NA NA NA

5.) Alternative Dispute Resolution

Describe the alternative dispute resolution system adopted by the company for the last three (3) years inamicably settling conflicts or differences between the corporation and its stockholders, and the corporation andthird parties, including regulatory authorities.

It is the Board’s responsibility to foster the long-term success of the Company and secure its sustainedcompetitiveness in a manner consistent with the Board’s fiduciary responsibility, including the means toeffectively Management’s performance, which the Board shall exercise in the best interest of the Company, itsshareholders and other stakeholders. The Board shall conduct itself with utmost honesty and integrity in thedischarge of its duties, functions and responsibilities.

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To ensure a high standard of best practice for the Company, its shareholders and stakeholders, the Board shall:(as amended on July 31, 2014)

a. Install, through the Nomination and Remuneration Committee, a process of selection thatwill ensure a mix of competent directors and officers;

b. Determine the Company’s purpose, its mission and vision, and strategies to carry out theCompany’s objectives;

c. Ensure that the Company complies with all relevant laws, rules and regulations, and codesof best business practices;

d. Appoint a Compliance Officer who shall have the rank of at least vice president, In theabsence of such appointment, the Corporate Secretary and/or the Assistant CorporateSecretary shall act as Compliance Officer.

e. Identify the Company’s major and other stakeholders, and formulate a clear policy oncommunicating or relating with them through an effective investor relations program; (asamended on July 31, 2014)

f. Establish and maintain an investor relations program that will keep the stockholdersinformed of important developments in the corporation. If feasible, the corporation’sCEO or Chief Financial Officer shall exercise oversight responsibility over this program

g. Adopt a system of internal checks and balances;

h. Formulate and implement policies and procedures that would ensure the integrity andtransparency of related party transactions between and among the corporation and itsparent company, joint venture, subsidiaries, associates, affiliates, major stockholders,officers and directors, including their spouses, children and dependent siblings andparents, and of interlocking director relationships by members of the Board.

i. Identify key risk areas and key performance indicators, and monitor these factors withdue diligence;

j. Constitute an Audit Committee and such other committees it deems necessary to assistthe Board in the performance of its duties and responsibilities.

k. Proper discharge Board functions by meeting regularly. Independent views during theBoard meetings shall be given due consideration and all such meetings shall be dulyminuted; and

l. Keep Board authority within its powers, as prescribed in the Articles of Incorporation andBy-Laws of the Company and in relevant laws, rules and regulations.

m. Establish and maintain an alternative dispute resolution system in the Company that canamicably settle conflicts or differences between the Company and its stockholders, andthe Company and third parties, including the regulatory authorities.

The company has not had disputes in the last 3 years with the stockholders, regulatory authorities andthird parties.

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B.) BOARD MEETINGS & ATTENDANCE

1) Are Board of Directors’ meetings scheduled before or at the beginning of the year?

Regular Board meetings are held once in every quarter. The meetings are scheduled before the beginning of theyear. For this year, the Regular Board Meetings are scheduled as follows:

First Quarter – March 28

Second Quarter – May 9

Third Quarter – August 8

Fourth Quarter – November 8

There are also special board meetings that are held from time to time, as the need to discuss important businessmatters and updates from the Company arise. These special meetings are scheduled a week ahead of thescheduled dates.

2) Attendance of Directors – All directors were re-elected and elected, respectively in June 2015.

Board Name Date of Election

No. ofMeetings Heldduring theyear

No. ofMeetingsAttended

%

Chairman Jose Eduardo B. Antonio June 2015 10 10 100%

Member John Victor R. Antonio June 2015 10 7 70%

Member Jose Marco R. Antonio June 2015 10 10 100%

Member Jose Carlo R. Antonio June 2015 10 10 100%

Member Jose Roberto R. Antonio June 2015 10 8 80%

Member Ricardo P. Cuerva June 2015 10 10 100%

Member Rafael G. Yaptinchay June 2015 10 10 100%

Independent Jose L. Cuisia, Jr* June 2015 5 5 100%

Independent Stephen T. CuUnjieng* June 2015 5 5 100%

Independent Carlos C. Ejercito* June 2015 5 5 100%

• The three (3) new Independent Directors assumed office and attended meeting upon their election last June 22, 2015.

3) Do non-executive directors have a separate meeting during the year without the presence of any executive? Ifyes, how many times?

Yes, theNon-executive directors endeavor to have separate meeting, without the presence of any executive, atleast once during the year.

4) Is the minimum quorum requirement for Board decisions set at two-thirds of board members? Please explain.

Under the Corporation’s By-laws, a majority of the number of directors constitutes a quorum for the transaction

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of corporate business and every decision of at least majority of the directors present in the meeting at whichthere is a quorum is valid as a corporate act except for the election of officers and other corporate acts expresslystated in the SEC and PSE requiring the vote of the majority of all members of the Board.

5) Access to Information

(a) How many days in advance are board papers4 for board of directors meetings provided to the board?

Generally, all board papers are sent at least one week prior to the meeting.

(b) Do board members have independent access to Management and the Corporate Secretary?

Yes. All board members have independent access through landline, mobile, email, fax and other means ofcommunication.

(c) State the policy of the role of the company secretary. Does such role include assisting the Chairman inpreparing the board agenda, facilitating training of directors, keeping directors updated regarding anyrelevant statutory and regulatory changes, etc?

Under the company’s manual of corporate governance, the Corporate Secretary must be a licensed lawyerand the role of the corporate secretary is expressly stated in the manual. He is basically the individual whokeeps the official records of the company, particularly the minutes and transactions of the meetings held bythe Board and shareholders. Apart from the principal function, and as required by the Company’s By-laws, heis the custodian of record books showing details required by law with respect to stockholdings of thecorporation, attends to the giving and serving of notices of the corporation; certifies to corporate acts andcountersigns corporate documents or certificates; and makes reports or statements as may be required bylaw or rules.

Such role includes assisting the Chairman in preparing the board agenda, facilitating training of directors,keeping directors updated regarding any relevant statutory and regulatory changes, etc.

(d) Is the company secretary trained in legal, accountancy or company secretarial practices? Please explainshould the answer be in the negative.

The corporate secretary is a licensed a attorney with expertise in legal and corporate law.

(e) Committee Procedures

Disclose whether there is a procedure that Directors can avail of to enable them to get information necessaryto be able to prepare in advance for the meetings of different committees:

Yes x No

Committee Details of the procedures

Executive Copies of presentations and matters in the Agenda are providedby Management and distributed to the Board at least one week

Audit

4 Board papers consist of complete and adequate information about the matters to be taken in the board meeting.Information includes the background or explanation on matters brought before the Board, disclosures, budgets,forecasts and internal financial documents.

25

Nomination,Remuneration and Compensation

prior to the scheduled Committee Meeting. These presentationsor materials consist of complete and adequate information aboutthe matters to be taken in the meeting. Information includes thebackground or explanation on matters brought before the Board,disclosures, budgets, forecasts and internal financial documents.

Risk Management Committee

6) External Advice

Indicate whether or not a procedure exists whereby directors can receive external advice and, if so, providedetails:

Procedures Details

The Company’s External Counsel, Atty. Nilo S.Divina is requested to attend all regular andspecial board meetings. The Corporate Secretary islikewise a licensed attorney. As the need arises,directors reserve the right to avail of externaladvise.

During some meetings, directors get the opinionof the external counsel on some legal matters.

7) Change/s in existing policies

Indicate, if applicable, any change/s introduced by the Board of Directors (during its most recent term) onexisting policies that may have an effect on the business of the company and the reason/s for the change:

Existing Policies Changes Reason

N.A No changes made N.A.

B.) REMUNERATION MATTERS

1) Remuneration Process

Disclose the process used for determining the remuneration of the CEO and the four (4) most highlycompensated management officers:

Process CEO Top 4 Highest Paid ManagementOfficers

(1) Fixed remuneration

Based on industry standards, asdetermined by the Board ofDirectors (without the thepresence of the concernedOfficer/Executive Director) andrecommended by the

Nomination and CompensationCommittee

Based on industry standards, asdetermined by the Board ofDirectors (without the thepresence of the concernedOfficer/Executive Director) andrecommended by the


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(2) Variable remuneration

As determined by the Board ofDirectors (without the thepresence of the concerned

Officer/Executive Director) andrecommended by the


As determined by the Board ofDirectors (without the thepresence of the concerned

Officer/Executive Director) andrecommended by the ExecutiveCommittee and the Nominationand Compensation Committee

(3) Per diem allowance Not provided

Per diem allowance is given toManagement officers who are onduty travel abroad for sales

events

(4) Bonus

Based on annual profitability, Asdetermined by the Board ofDirectors (without the thepresence of the concerned



Based on annual profitability, Asdetermined by the Board ofDirectors (without the thepresence of the concerned



(5) Stock Options andother financialinstruments

As determined by the Board ofDirectors (without the thepresence of the concernedOfficer/Executive Director) andrecommended by the


As determined by the Board ofDirectors (without the thepresence of the concernedOfficer/Executive Director) andrecommended by the


(6) Others (specify) - -

2) Remuneration Policy and Structure for Executive and Non-Executive Directors

Disclose the company’s policy on remuneration and the structure of its compensation package. Explain how thecompensation of Executive and Non-Executive Directors is calculated.

RemunerationPolicy

Structure ofCompensation Packages

How Compensationis Calculated

Executive Directors Fixed annualpayment

Basic Pay, performancebonus depending onprofitability

Based on Industrystandard, as

determined by theBoard of Directors(without the thepresence of theconcerned

Officer/ExecutiveDirector) andrecommended bythe Nomination andCompensationCommittee

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Non-Executive DirectorsPer diem forIndependentDirectors

Per diem ofPhp100,000.00 for

Independent Directors foreach board andcommittee meeting

Based on Industrystandard, as

determined by theExecutive Directorsand recommendedby the Nominationand CompensationCommittee

Do stockholders have the opportunity to approve the decision on total remuneration (fees, allowances,benefits-in-kind and other emoluments) of board of directors? Provide details for the last three (3) years.

Remuneration Scheme Date ofStockholders’ Approval

Executive Directors are given their regularcompensation and benefits similar to the

compensation structure of other Officers of theCompany.

Non-Executive Directors and IndependentDirectors do not have regular compensation orbenefits. They are only given per diem based on

their attendance per meeting.

Stockholder’s approval for remuneration ofExecutive Directors is not required. Per

Company’s Manual on Corporate Governance,the Company shall establish a formal and

transparent procedure for the development ofa policy on executive remuneration ordetermination of remuneration levels forindividual directors or officers depending onthe particular needs of the Company. Nodirector should participate in deciding on his

remuneration.

The current per diem rate was approved by theBoard of Directors last June 22, 2015.

3) Aggregate Remuneration

Complete the following table on the aggregate remuneration accrued during the most recent year:

Remuneration Item ExecutiveDirectors

Non-Executive Directors(other than independent

directors)

IndependentDirectors

(a) Fixed Remuneration 55,836,341.46 0 0

(b) Variable Remuneration 0 0 0

(c) Per diem Allowance 0 0 1,800,000.00

(d) Bonuses 4,347,665.86 0 0

(e) Stock Options and/orother financialinstruments

0 0 0

(f) Others (Specify) 0 0 0

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Total 60,184,007.32 0 1,800,000.00

Other BenefitsExecutiveDirectors

Non-Executive Director(other than independent

directors)

IndependentDirectors

1) Advances 0 0 0

2) Credit granted 0 0 0

3) Pension Plan/sContributions

0 0 0

(d) Pension Plans,Obligations incurred

0 0 0

(e) Life Insurance Premium 1,500,000.00

(f) Hospitalization Plan MaxicareCoverage

0 0

(g) Car Plan 0 0 0

(h) Others (Specify) 0 0 0

Total 1,500,000.00

4) Stock Rights, Options and Warrants

(a) Board of Directors

Complete the following table, on the members of the company’s Board of Directors who own or areentitled to stock rights, options or warrants over the company’s shares:

Director’s NameNumber of DirectOption/Rights/Warrants

Number ofIndirect

Option/Rights/Warrants

Number ofEquivalent Shares

Total % fromCapital Stock

NA NA NA NA NA

(b) Amendments of Incentive Programs

Indicate any amendments and discontinuation of any incentive programs introduced, including the criteriaused in the creation of the program. Disclose whether these are subject to approval during the AnnualStockholders’ Meeting:

Incentive Program Amendments Date ofStockholders’ Approval

NA NA NA

5) Remuneration of Management

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Identify the five (5) members of management who are not at the same time executive directors and indicatethe total remuneration received during the financial year:

Name of Officer/Position Total Remuneration

Domie S. Eduvane

Gerardo A. Morales

Kristina Lowella I. Garcia

Gerry Joseph Albert L. Ilagan

Paul Patrick A. carague

B. BOARD COMMITTEES

1) Number of Members, Functions and Responsibilities

Provide details on the number of members of each committee, its functions, key responsibilities and thepower/authority delegated to it by the Board:

Committee

No. of Members

CommitteeCharter Functions

KeyResponsibiliti

esPowerExecutive

Director(ED)

Non-executiveDirector(NED)

Independent Director(ID)

Executive 6 00

Develop atransparentbusiness andorganizationalmanagementsystem

Oversees theimplementation ofpolicies andcorporate matters

Perform oversightmanagementfunctions anddecisions d forboard

Managementof overallsystem ofoperation forCPGI andsubsidiaries

Audit 2 0 2

Develop atransparentfinancialmanagementsystem

Check all financialreports against itscompliance;monitors externalaudit

Performsoversight financialmanagementfunctions

Pre-approveall auditplans andscope ofwork

NominationRemunerationandCompensation

2 1

2

Determinepersonnel thatcan act as guidesto the company’sfutureundertakings.

Pre-screen andshortlist candidates

Define role dutiesandresponsibilities

Decide ifcandidatespossess therightqualifications

Compensatecompetentpersonneladequately forretention

Establishprocedures todevelop policy onexecutiveremuneration

Provide oversightoverremuneration ofseniormanagement andother keypersonnel

Designateamount ofremuneration to attractand retainthe rightindividuals

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RiskManagement

3 0 2

Safeguard thecompany frompotentional andadherent risks

Establishprocedures tosafeguardmanagement fromexposed risks andprevention ofpotential risks

Provides oversighton riskmanagement

Toimplementproceduresandresolutionsforaddressingrisks

2) Committee Members

(a) Executive Committee

Office Name Date ofAppointment

No. ofMeetingsHeld


%

Length ofService inthe

Committee

Chairman Jose E.B. Antonio June 22, 2015 4 4 100 1 yr

Member (ED) John Victor R. Antonio June 22 4 4 100 1 yr

Member (ED) Jose Marco R. Antonio June 22 4 4 100 1 yr

Member (ED) Jose Roberto R. Antonio June 22 4 4 100 1 yr

Member (ED) Jose Carlo R. Antonio June 22 4 4 100 1 yr

Member (ED) Rafael G. Yaptinchay June 22 4 4 100 1 yr

(b) Audit Committee


No. ofMeetingsHeld

No. ofMeetings

Attended

%


Committee

Chairman (ID) Stephen CuUnjieng* June 22, 2015 2 2 100 6 months

Member (ID) Carlos C. Ejercito* June 22, 2015 2 2 100 6 months

Member (ED) Jose Carlo R. Antonio June 22, 2015 4 4 100 1 yr

Member (ED) Jose Marco R. Antonio June 22, 2015 4 4 100 1 yr

* The Independent Directors assumed office only after their election last June 22, 2015.

Disclose the profile or qualifications of the Audit Committee members.

Mr. Stephen T. CuUnjieng, 56 years old, Filipino citizen, is a prominent investment banker, and currently servesas an Independent Director, Aboitiz Equity Ventures, Inc. He has a long and extensive experience ininvestment banking with several major financial institutions including HFS Capital LLC and Evercore Partners,Inc. is the Chairman of Evercore Asia Limited. He is an advisor to a number of Asia's most prominentcompanies like San Miguel Corporation, Samsung Electronics, Tiger Airways, among others. He finished hisundergraduate and law degree from Ateneo De Manila University and later on, earned his MBA degree from

31

the Wharton School of Business at the University of Pennsylvania.

Mr. Carlos C. Ejercito, 69 years old, Filipino, is the former Chairman of the United Coconut Planters Bank andcurrently the Chairman and CEO of Nortern Access Mining, Inc, Forum Cebu Coal Corporation and KaiparaMining and Development Corporation. He graduated Cum Laude from the University of the East where hefinished his Bachelor’s Degree in Business Administration. He became a Certified Public Accountant in 1966. Hereceived his Master’s Degree in Business Administration at the Ateneo Graduate School of Business in 1976 andgraduated from his Management Development Program in 1983 at the Harvard Business School. As of date, heserves as an Independent Director at Aboitiz Power Corporation, Bloomberry Resorts Corporation and MonteOro resources and Energy Corporation.

Describe the Audit Committee’s responsibility relative to the external auditor.

The Audit Committee shall have the following functions:

(a) Check all financial reports against its compliance with both the internal financialmanagement handbook and pertinent accounting standards, including regulatory requirements;(b) Perform oversight financial management functions specifically in the areas of managingcredit, market, liquidity, operational, legal and other risks of the Company, and crisismanagement;(c) Pre-approve all audit plans, scope and frequency one (1) month before the conduct ofexternal audit;(d) Perform direct interface functions with internal and external auditors;(e) Elevate to prevalent international standard the accounting and auditing processes,practices and methodologies of the Company, and develop the following in relation to this duty:(f) A definitive timetable within which the accounting system of the Company will be onehundred percent (100%) compliant with the International Accounting Standards (IAS); and(g) An accountability statement that will specifically identify officers and personnel directlyresponsible for the accomplishment of such task;(h) Regularly review and improve, if necessary, the Company’s Controller’s Policies andProcedures Manual, in order to provide for a transparent financial management system that willensure the integrity of internal control activities throughout the Company and the entireorganization; and(i) Recommend to the stockholder s the external auditor of the Company.

(c) Nomination, Compensation and Remuneration Committee


No. ofMeetingsHeld


%


Committee

Chairman Jose E.B. Antonio June 22, 2015 4 4 100 1 yr

Member (ED) John Victor R. Antonio June 22, 2015 4 3 80 1 yr

Member (ID) Jose L. Cuisia, Jr.* June 22, 2015 2 2 100 6 months

Member (ID) Carlos C. Ejercito* June 22, 2015 2 2 100 6 months

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* The Independent Directors assumed office only after their election last June 22, 2015.

(e) Risk Management Committee

Provide the same information on all other committees constituted by the Board of Directors:


No. ofMeetingsHeld


%


Committee

Chairman Jose E.B. Antonio June 22, 2015 1 1 100 100

Member (ED) Jose Carlo R. Antonio June 22, 2015 1 1 100 100

Member (ID) Jose L. Cuisia, Jr. * June 22, 2015 0 0 100 50

Member (ID) Stephen T. CuUnjieng* June 22, 2015 0 0 100 50

Member (ED) Jose Marco R. Antonio June 22, 2015 1 1 100 100

* The Independent Directors assumed office only after their election last June 22, 2015.The meeting was held prior to their appointment

3) Changes in Committee Members

Indicate any changes in committee membership that occurred during the year and the reason for the changes:

Name of Committee Name Reason

Executive Inclusion of Rafael G. Yaptinchay asmember

Mr. Rafael Yaptinchay is also anExecutive Director

Audit Appointment of the 2 newIndependent Directors Stephen T.CuUnjieng as Chairman and Carlos C.Ejercito as member

Retirement of Atty. Monico Jacob

Nomination,Compensation andRemuneration

Appointment of the 2 newIndependent Directors Jose L. CuisiaJr as member and Carlos C. Ejercito asmember

Retirement of Atty. Monico Jacob

Risk Management Appointment of the 2 newIndependent Directors Jose L. CuisiaJr as member and Stephen T.CuUnjieng as member, and inclusionof Jose Marco R. Antonio who is theCo-COO of the company as member

Retirement of Atty. Monico Jacoband Mr. Washington Sycip

Mr. Jose Marco R. Antonio is the Co-COO of the Company

4) Work Done and Issues Addressed

Describe the work done by each committee and the significant issues addressed during the year.

33

Name of Committee Work Done Issues Addressed

Executive Approval of JV’s, acquisition of land, availment of loans and real estatemortgage/s, approval of several project alunchesand endorsement to theboard of placement and subscription transactions

Audit

Assisted the Board in its oversightfunctions specifically relating to thefinancial reports, statements andsoundness of the Company andcompliance with legal and regulatoryrequirements.

Reviewed and approved the 2014Audited FinancialStatements of theCompany as prepared by the externalauditors Sycip, Gorres, Velayo & Co.(SGV), as well as the quarterlyunaudited financial statements. TheCommittee gave its recommendationon the reappointment of SGV as theCompany’s external auditors for 2015and the corresponding audit feestructure. The Committee likewisereviewed and/or approvedspecific matters presented by theInternal Audit Division and SGV.

Nomination,Compensation andRemuneration

The Committee pre-screened andshortlisted all candidates nominatedto become a member of the Board ofDirectors, in accordance with theminimum qualifications anddisqualifications set forth in theCompany’s Regulations.

The Nomination and RemunerationCommittee considered the followingin the determination of the numberof directorships in other corporationsfor the members of the Board:

(a) The nature of the businessof the corporation in whichthe director is also amember of the board;

(b) The age of the director;(c) The number of

directorships or activememberships andofficerships in othercorporations ororganizations; and

(d) Possible conflict of interest.Nominate competent members only

Risk Management

It reviewed departmental policies, aswell as the adequacy andeffectiveness of the Company’senterprise risk management process.

The Risk Management Committeeprovided a report to the Board on itsassessment of the effectiveness ofthe risk management process andreviews reports from Internal Audit(IA) with regard to the independentvalidation of compliance with theapproved ERM Policy and assessmentof current state of ERM framework.

34

5) Committee Program

Provide a list of programs that each committee plans to undertake to address relevant issues in theimprovement or enforcement of effective governance for the coming year.

Name of Committee Planned Programs Issues to be Addressed

Executive The Board has created an internal self-rating system that can measure theperformance of the Board and Management in accordance with thecriteria provided for in it Corporate Governance Manual.

The Board of Directors and its Senior Management has established andimplemented this Manual on Corporate Governance in accordance with the

Audit

Nomination

Remuneration

35

Risk Managment SEC Revised Code of Corporate Governance. The rules embodied in thismanual has been used as reference by the members of the Board andManagement.

The following are the guidelines for the effective implementation of thisManual:

A. COMMUNICATION PROCESS

(1) The Manual shall be available for inspection by any stockholder ofthe Company at reasonable hours on business days.

(2) All directors, executives, and division and department heads of theCompany are tasked to ensure the thorough dissemination andcommunication of the Manual to all employees and related parties and toenjoin compliance in the process.(3) An adequate number of printed copies of this Manual must bereproduced by the Human Resources Department, or its equivalent, of theCompany, with a minimum of at least one (1) hard copy of the Manual forevery department.

B. TRAINING PROCESS

(1) If necessary, funds shall be allocated for the purposes of conductingan orientation program or workshop to operationalize this Manual(2) A director shall, before assuming as such, be required to attend aseminar on corporate governance which shall be conducted by a dulyrecognized private or government institute.

C. MONITORING AND ASSESSMENT

(1) Each Committee shall report regularly to the Board of Directors.(2) The Compliance Officer shall establish an evaluation system todetermine and measure compliance with this Manual. Any violation thereofshall subject the responsible officer to employee to the penalty providedunder Article 11 of the Manual.(3) The establishment of such evaluation system, including the featuresthereof, shall be disclosed in the Company’s Annual Report (SEC Form 17-A).The adoption of such performance evaluation system must be covered byBoard approval.(4) This Manual shall be subject to annual review, unless the samefrequency is amended by the Board.(5) All business processes and practices being performed within anydepartment or business unit of the Company that are not consistent with anyportion of this Manual shall be revoked, unless upgraded to compliantextent.

C. RISK MANAGEMENT SYSTEM

36

1) Disclose the following:

(a) Overall risk management philosophy of the company:

The Company's philosophy of risk management has its foundation in the concept that taking material risks isrequired in order to seek rewards and to fulfill the Company’s multi‐faceted mission. However, these risksshould be assessed in order to insure that effective mitigation strategies are employed to the greatest extentpossible. Mitigation strategies should consider transferring or insuring risk, reducing the likelihood of the riskoccurring, reducing the severity of the risk should it occur, avoiding the risk altogether, or accepting the risk,while continuing to monitor it to ensure it stays within the Company’s risk appetite.

(b) A statement that the directors have reviewed the effectiveness of the risk management system andcommenting on the adequacy thereof:

“The Risk Management Committee assists the Board of Directors (Board) in fulfilling its responsibility foroversight of the organization’s risk management processes. It reviews and endorses to the Board changes oramendments to the ERM Policy, as well as the adequacy and effectiveness of the Company’s enterprise riskmanagement process. The Risk Management Committee provides a report to the Board on its assessment ofthe effectiveness of the risk management process and reviews reports from Internal Audit (IA) with regard tothe independent validation of compliance with the approved ERM Policy and assessment of current state ofERM framework”

(c) Period covered by the review:

CY 2015. The Committee shall endeavor to conduct review of internal processes quarterly for the ensuingyear.

(d) How often the risk management system is reviewed and the directors’ criteria for assessing itseffectiveness:

The ERM framework, policy and plan shall be reviewed periodically given the company’s current internal andexternal environment. Based on results of monitoring and reviews, decisions shall be made on the corporate-wide desired state of the ERM framework and how the risk management framework, policy and plan can beimproved. These decisions shall lead to improvements in the Company’s management of risk and its riskmanagement culture. Action plans to bridge the gaps between the current and desired states of the ERMframework shall be developed.

The Committee shall endeavor to conduct review of internal processes quarterly for the ensuing year.

(e) Where no review was conducted during the year, an explanation why not.

NOT APPLICABLE.

2) Risk Policy

(a) Company

Give a general description of the company’s risk management policy, setting out and assessing the risk/scovered by the system (ranked according to priority), along with the objective behind the policy for each kindof risk:

The Company's philosophy of risk management has its foundation in the concept that taking material risks isrequired in order to seek rewards and to fulfill the Company’s multi‐faceted mission. However, these risksshould be assessed in order to insure that effective mitigation strategies are employed to the greatest extentpossible. Mitigation strategies should consider transferring or insuring risk, reducing the likelihood of the risk

37

occurring, reducing the severity of the risk should it occur, avoiding the risk altogether, or accepting the risk,while continuing to monitor it to ensure it stays within the Company’s risk appetite.

The Risk Management Committee assists the Board of Directors in fulfilling its responsibility for oversight ofthe organization’s risk management processes. It reviews and endorses to the Board changes or amendmentsto the ERM Policy, as well as the adequacy and effectiveness of the Company’s enterprise risk managementprocess. The Risk Management Committee provides a report to the Board on its assessment of theeffectiveness of the risk management process and reviews reports from Internal Audit (IA) with regard to theindependent validation of compliance with the approved ERM Policy and assessment of current state of ERMframework.

Risk Exposure Risk Management Policy Objective

Business Development:•ComplianceRequirements•Meet demand andexpansionrequirements

• Adequate checklist of items:Zoning, legally permissible,financially viable, andnegotiation tie-up withCorporate Legal

• Continuous improvement onthe Business Development’ssystems processes andprocedures.

Site Acquisition

Project and ProductDevelopment/Design:Actual over budget• Timely delivery of theProduct• Quality Product• Actual Productcommensurate withthe Marketed product

• Adequate planning,monitoring, execution (e.g.especially on securingpermits and licenses).• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe Project and Productsystems processes andprocedures.

Timely and QualityProject Delivery

Pre-Sales Management:• Timely deployment ofSales Agents• Sales Support(Training, financial,actual deployment)• Achieve targeted Sales

• Adherence to Company’ssystems processes andprocedures.• Discovering and penetratingnew markets (e.g. Locallyand Internationally)• Continuous improvement onthe Pre-Sales systemsprocesses and procedures.

Generate/Produce Sales

38

Documents andCollections:•Completeness andtimely acquisition andavailability(to client) ofrequired documents•Completeness andtimely collection ofpayments

• Adherence to Company’ssystems processes andprocedures.• Adequate monitoring ofdocuments and collections• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe Documents andCollections systemsprocesses and procedures.

Complete documents

Timely collection ofpayments

Inventory Management:• Monitoring ofinventory per Project

• Timely holding andbooking of Units

• Adherence to Company’ssystems processes andprocedures.• Adequate monitoring andupdating of inventory data• Continuous improvement onthe Inventory systemsprocesses and procedures.


After-SalesManagement:• Complete and timelysubmission ofrequired Notices (toClients)• Proper turn-over ofUnits• Manage clientcomplaints

• Adherence to Company’ssystems processes andprocedures.• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe After-Sales systemsprocesses and procedures.

Client Satisfaction

Supporting Functions:• Inefficiencies andineffectiveness invarious supportingbusiness processes

• Adherence to Company’ssystems processes andprocedures.• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe Company’s systemsprocesses and procedures.

Various businessobjectives relating tocompliance, reportingand operations

Inherent Risks:• Significant down-turnof economy of certaintargeted Markets• Virus epidemicbreakthrough• Economic down-turnof the Philippines• Natural Calamitiesand EnvironmentalIssues

• Adequate planning to ensureinherent risk is manage andminimize based on the riskappetite of the Company• Timely monitoring ofsignificant events which mayaffect the production ofsales.• Business continuity andflexibility to run operationsto other targeted Markets

Sustainability andBusiness Continuity

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(b) Group

Give a general description of the Group’s risk management policy, setting out and assessing the risk/scovered by the system (ranked according to priority), along with the objective behind the policy for eachkind of risk:

Risk Exposure Risk Management Policy Objective

Business Development:•ComplianceRequirements•Meet demand andexpansionrequirements


• Continuous improvement onthe Business Development’ssystems processes andprocedures.

Site Acquisition

Project and ProductDevelopment/Design:Actual over budget• Timely delivery of theProduct• Quality Product• Actual Productcommensurate withthe Marketed product

• Adequate planning,monitoring, execution (e.g.especially on securingpermits and licenses).• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe Project and Productsystems processes andprocedures.

Timely and QualityProject Delivery

Pre-Sales Management:• Timely deployment ofSales Agents• Sales Support(Training, financial,actual deployment)• Achieve targeted Sales

• Adherence to Company’ssystems processes andprocedures.• Discovering and penetratingnew markets (e.g. Locallyand Internationally)• Continuous improvement onthe Pre-Sales systemsprocesses and procedures.


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Documents andCollections:•Completeness andtimely acquisition andavailability(to client) ofrequired documents•Completeness andtimely collection ofpayments

• Adherence to Company’ssystems processes andprocedures.• Adequate monitoring ofdocuments and collections• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe Documents andCollection’s systemsprocesses and procedures.

Complete documents

Timely collection ofpayments

Inventory Management:• Monitoring ofinventory per Project

• Timely holding andbooking of Units

• Adherence to Company’ssystems processes andprocedures.• Adequate monitoring andupdating of inventory data• Continuous improvement onthe Inventory systemsprocesses and procedures.


After-SalesManagement:• Complete and timelysubmission ofrequired Notices (toClients)• Proper turn-over ofUnits• Manage clientcomplaints

• Adherence to Company’ssystems processes andprocedures.• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe After-Sales systemsprocesses and procedures.

Client Satisfaction

Supporting Functions:• Inefficiencies andineffectiveness invarious supportingbusiness processes

• Adherence to Company’ssystems processes andprocedures.• Adherence toInternational/BestStandards/Practices• Continuous improvement onthe Company’s systemsprocesses and procedures.

Various businessobjectives relating tocompliance, reportingand operations

Inherent Risks:• Significant down-turnof economy of certaintargeted Markets• Virus epidemicbreakthrough• Economic down-turnof the Philippines• Natural Calamitiesand EnvironmentalIssues

• Adequate planning to ensureinherent risk is manage andminimize based on the riskappetite of the Company• Timely monitoring ofsignificant events which mayaffect the production ofsales.• Business continuity andflexibility to run operationsto other targeted Markets

Sustainability andBusiness Continuity

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(c) Minority Shareholders

Indicate the principal risk of the exercise of controlling shareholders’ voting power.

Risk to Minority Shareholders

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The Company recognizes that the most cogent proof of corporate governance is that which isvisible to the eyes of its shareholders. Therefore, the provisions hereunder are issued for theguidance of all internal and external parties concerned, as governance covenant between theCompany and all its shareholders.

A. For the protection of shareholders and minority interests, the Board shall be committed torespect the following rights of the stockholders:

(1) Voting Right

(a) Shareholders shall have the right to elect, remove and replace directors and voteon certain corporate acts, in accordance with the Corporation Code.(b) Cumulative voting shall be used in the election of directors.(c) A director shall not be removed without cause, if it will deny minority shareholders ofrepresentation in the Board.

(2) Pre-Emptive Right

All stockholders shall have pre-emptive rights, unless the same is denied in the Articles ofIncorporation, or an amendment thereto, of the Company. All stockholders shall have the right tosubscribe to the capital stock of the Company. The Articles of Incorporation shall lay down thespecific rights and powers of the shareholders with respect to the particular shares they hold, all ofwhich shall be protected by law so long as they shall not be in conflict with the Corporation Code.

(3) Power of InspectionSubject to reasonable restrictions in accordance with the Corporation Code and jurisprudence, allshareholders shall be allowed to inspect the corporate books and records of the Company,including minutes of Board meetings and stock registries, and shall be furnished with annualreports, including financial statements, without cost.

(4) Right to Information(a) The shareholders shall be provided, upon request, with periodic reports whichdisclosepersonal and professional information about the directors and officers of the Company, andcertain other matters such as the directors’ and officers’ holdings of the Company’s shares,

dealings with the Company, relationships among directors and key officers of theCompany, and the aggregate compensation of the directors and officers.(b) The minority shareholders shall have the right to propose the holding of astockholder’s meeting, and the right to propose items in the agenda of the meeting,provided that the items in the agenda are for legitimate business purposes. Legitimatebusiness purposes shall include information on matters under the immediately succeedingsubsection.(c) The minority shareholders shall have access to any and all information relating to mattersfor which the management is accountable for and should disclose to the shareholders.

5. Right to Dividends(a) All shareholders shall have the right to receive dividends, subject to the discretion of theBoard.(b) The Company shall be compelled to declare dividends when its retained earnings shall bein excess of one hundred percent (100%) of its paid-in capital stock except in the following cases:

(b.1) When justified by definite corporate expansion projects or programs approved bythe Board, or

(b.2)When the Company is prohibited under any loan agreement with any financialinstitution or creditor, whether local or foreign, from declaring dividends without its consent, andsuch consent has not been secured, or

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(b.3) When it can be clearly shown that such retention is necessary under specialcircumstances obtaining in the Company, such as when there is a need for a special reserve forprobable contingencies.

6. Appraisal RightThe shareholders shall have appraisal right or the right to dissent and demand payment of the fairvalue of their shares in the manner provided for under Section 82 of the Corporation Code of thePhilippines, under any of the following circumstances:

(d) In case an amendment to the Articles of Incorporation of the Company has the effect ofchanging or restricting the rights of any stockholders or class of shares, or of authorizingpreferences in any respects superior to those of outstanding shares of any class, or ofextending or shortening the term of corporate existence;

(e) In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all orsubstantially all of the corporate property and assets as provided in the CorporationCode; and

(f) In case of merger or consolidation.

B. It shall be the duty of the Board to promote shareholder rights, remove impediments toexercise of shareholders’ rights, and allow possibilities to seek redress for violation of their rights.The Board shall encourage the exercise of shareholders’ voting rights and the solution of collectiveaction problems through appropriate mechanisms. The Board shall pave the way for the electronicfiling and distribution of shareholder information necessary to make informed decisions, subject tolegal constraints.

All shareholders have one vote per share; so, minority shareholders voting power is nottruncated.

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3) Control System Set Up

(a) Company

Briefly describe the control systems set up to assess, manage and control the main issue/s faced by thecompany:

Risk Exposure Risk Assessment(Monitoring and Measurement Process)

Risk Management and Control(Structures, Procedures, Actions Taken)

BusinessDevelopment

Inability to meet the demands ofthe Market and requirements forexpansion which may result toopportunity loss.


• Continuous improvement on theBusiness Development’s systemsprocesses and procedures.

Project/Productdevelopment anddesign

Potential issues on the costs,schedules and actual productwhich may result to increase inexpenses.

• Adequate planning, monitoring,execution (e.g. especially onsecuring permits and licenses).

• Adherence to International/BestStandards/Practices

• Continuous improvement on theProject and Product systemsprocesses and procedures.

Pre-salesManagement

Potential loss of production/saleswhich may result to negative net-income.

• Adherence to Company’s systemsprocesses and procedures.• Discovering and penetrating newmarkets (e.g. Locally andInternationally)• Continuous improvement on thePre-Sales systems processes andprocedures.

Documents andCollections

Potential issues on completenessand accuracy of documents andcollection of payments

• Adherence to Company’s systemsprocesses and procedures.• Adequate monitoring andupdating of inventory data• Continuous improvement on theDocument and Collection’ssystems processes andprocedures.

InventoryManagement

Potential issues on the efficiencyand effectiveness on the inventoryof projects

• Adherence to Company’s systemsprocesses and procedures.• Adequate monitoring andupdating of inventory data• Continuous improvement on theInventory systems processes andprocedures.

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After-SalesManagement

Potential issues on clientsatisfaction


Supporting Functions

Potential issues on the efficiencyand effectiveness of variousbusiness processes


(b) Group

Briefly describe the control systems set up to assess, manage and control the main issue/s faced by thecompany:

Risk Exposure Risk Assessment(Monitoring and Measurement Process)

Risk Management and Control(Structures, Procedures, Actions Taken)

BusinessDevelopment

Inability to meet the demands ofthe Market and requirements forexpansion which may result toopportunity loss.


• Continuous improvement on theBusiness Development’s systemsprocesses and procedures.

Project/Productdevelopment anddesign

Potential issues on the costs,schedules and actual productwhich may result to increase inexpenses.

• Adequate planning, monitoring,execution (e.g. especially onsecuring permits and licenses).

• Adherence to International/BestStandards/Practices

• Continuous improvement on theProject and Product systemsprocesses and procedures.

Pre-salesManagement

Potential loss of production/saleswhich may result to negative net-income.

• Adherence to Company’s systemsprocesses and procedures.• Discovering and penetrating newmarkets (e.g. Locally andInternationally)• Continuous improvement on thePre-Sales systems processes andprocedures.

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Documents andCollections

Potential issues on completenessand accuracy of documents andcollection of payments

• Adherence to Company’s systemsprocesses and procedures.• Adequate monitoring andupdating of inventory data• Continuous improvement on theDocument and Collection’ssystems processes andprocedures.

InventoryManagement

Potential issues on the efficiencyand effectiveness on the inventoryof projects


After-SalesManagement

Potential issues on clientsatisfaction


Supporting Functions

Potential issues on the efficiencyand effectiveness of variousbusiness processes


(c) Committee

Identify the committee or any other body of corporate governance in charge of laying down andsupervising these control mechanisms, and give details of its functions:

Committee/Unit Control Mechanism Details of its Functions

Risk Management Committee Oversight Control by assistingthe Board of Directors

1. Oversight function2. Formulate, review andendorse to the Board anERM Policy (thru the helpof the Risk ManagementDepartment)

3. Review adequacy andeffectiveness of RiskManagement Processes(thru the help of theindependent validation ofInternal Audit Department)

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Audit Committee Financial Oversight Control byassisting the Board of Directors

Perform oversight financialmanagement functionsspecifically in the areasof managing credit,market, liquidity,operational, legal andother risks oftheCompany, and crisismanagement

D. INTERNAL AUDIT AND CONTROL

1) Internal Control System

Disclose the following information pertaining to the internal control system of the company:

(a) Explain how the internal control system is defined for the company:

“Internal control is a process, effected by the Company’s board of directors, management, and otherpersonnel, designed to provide reasonable assurance regarding the achievement of objectives relating tooperations, reporting, and compliance.”• Geared to the achievement of objectives in one or more categories – operations, reporting and compliance• A process consisting of ongoing tasks and activities – a means to an end, not an end itself• Effected by people – not merely about policy and procedure manuals, systems, and forms, but aboutpeople and the actions they take at every level of an organization to affect internal control• Able to provide reasonable assurance – but not absolute assurance, to the Company’s Board of Directors,Executive Committee and Senior Management• Adaptable to the Company structure – flexible in application for the Company or for a particular subsidiary,group, operating unit, or business process

(b) A statement that the directors have reviewed the effectiveness of the internal control system andwhether they consider them effective and adequate:

“The Audit Committee assists the Board of Directors fulfill its responsibility for oversight of the Company’scorporate governance processes. This entails an understanding of the risks, control and financial reporting issuesinherent to the Company”

The Board is primarily accountable to the stockholders. It should provide them with a balanced andcomprehensible assessment of the corporation’s performance, position and prospects on a quarterly basis,including interim and other reports that could adversely affect its business, as well as reports to regulators thatare required by law.

Thus, it is essential that Management provide all members of the Board with accurate and timely information thatwould enable the Board to comply with its responsibilities to the stockholders.

Management shall formulate, under the supervision of the Audit Committee, the rules and procedures onfinancial reporting and internal control in accordance with the following guidelines:

(1) The extent of its responsibility in the preparation of the financial statements of the corporation, with thecorresponding delineation of the responsibilities that pertain to the external auditor, should be clearlyexplained;

(2) An effective system of internal control that will ensure the integrity of the financial reports and protection ofthe assets of the Company for the benefit of all stockholders and other stakeholders shall be maintained;(as amended on July 31, 2014)

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(3) On the basis of the approved audit plans, internal audit examinations should cover, at the minimum, theevaluation of the adequacy and effectiveness of controls that cover the corporation’s governance,operations and information systems, including the reliability and integrity of financial and operationalinformation, effectiveness and efficiency of operations, protection of assets, and compliance with contracts,laws, rules and regulations;

(4) The Company shall consistently comply with the financial requirements of the Commission;(5) The external auditor should be rotated or changed every five (5) years or earlier, or the signing partner of

the external auditing firm assigned to the Company, should be changed with the same frequency.

(c) Period covered by the review:

CY 2015. The Committee endeavors to conduct quarterly review for the ensuing year.

(d) How often internal controls are reviewed and the directors’ criteria for assessing the effectiveness of theinternal control system:

At least annually, the Audit Committee, to obtain management’s assurance on the state of internal controls, riskmanagement and corporate governance processes, the Committee relies on the expertise and knowledge ofManagement, the Internal Auditors and External (independent) Auditors.

The Committee endeavors to conduct quarterly review for the ensuing year.

(e) Where no review was conducted during the year, an explanation why not.

NOT APPLICABLE.

2) Internal Audit

(a) Role, Scope and Internal Audit Function

Give a general description of the role, scope of internal audit work and other details of the internal auditfunction.

Role Scope

Indicate whetherIn-house orOutsourceInternal AuditFunction

Name of ChiefInternal

Auditor/AuditingFirm

Reporting process

To provideindependent andobjective assuranceand consultingservices to addvalue and improvethe Company’soperations,reporting andcompliance.

To assist the Boardof Directors thruthe establishedBoard AuditCommittee on theassessment andevaluation of theadequacy andeffectiveness of theCompany’sgovernance, riskmanagementprocess and systemof internal controls.

In-house InternalAudit

Edwin A. Aquino • Directlyreporting to theBoard AuditCommittee

• Administratively to theCEO/Presidentor CFO (as thecase maybe)

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(b) Do the appointment and/or removal of the Internal Auditor or the accounting /auditing firm orcorporation to which the internal audit function is outsourced require the approval of the auditcommittee?

Yes. As explicitly stated in the Board Audit Committee Charter:

“Set up the Internal Audit Department (“IAD”), including the appointment of the Chief Audit Executive(“CAE”). The Committee, having appointed the CAE, shall also concur in his/her replacement, re-assignmentor dismissal.”

(c) Discuss the internal auditor’s reporting relationship with the audit committee. Does the internal auditorhave direct and unfettered access to the board of directors and the audit committee and to all records,properties and personnel?

The Board Audit Committee Charter provides:

The Committee shall establish and identify the reporting lines of the CAE so that the reporting levels allow theIAD to fulfill its responsibilities and maintain its independence (e.g. IAD functionally and administrativelyreports to the Committee and President or CFO, respectively).”

Ensure that the Internal Auditors have free and full access to all Company’s records, properties and personnelrelevant to and required by its function and that the IAD shall be free from interference in determining itsscope, performing its work and communicating its results.

(d) Resignation, Re-assignment and Reasons

Disclose any resignation/s or re-assignment of the internal audit staff (including those employed by the third-party auditing firm) and the reason/s for them.

Name of Audit Staff Reason

N/A N/A

(e) Progress against Plans, Issues, Findings and Examination Trends

State the internal audit’s progress against plans, significant issues, significant findings and examinationtrends.

Progress Against Plans Risk Management Audit Plan

Issues

• Varying execution of Management on theestablished policies and procedures• Varying assumptions Management of soundinternal controls/best practices• Varying interpretations and implementation ofManagement on international standards.

Findings

• Business Process Improvement (encompassinginternal controls and risk managementembedded within the Business process)• Lack of formal policies and procedures

Examination Trends Year to Year basis

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The relationship among progress, plans, issues and findings should be viewed as an internal control reviewcycle which involves the following step-by-step activities:

1) Preparation of an audit plan inclusive of a timeline and milestones;2) Conduct of examination based on the plan;3) Evaluation of the progress in the implementation of the plan;4) Documentation of issues and findings as a result of the examination;5) Determination of the pervasive issues and findings (“examination trends”) based on single year

result and/or year-to-year results;6) Conduct of the foregoing procedures on a regular basis.

(f) Audit Control Policies and Procedures

Disclose all internal audit controls, policies and procedures that have been established by the company andthe result of an assessment as to whether the established controls, policies and procedures have beenimplemented under the column “Implementation.”

Policies & Procedures Implementation

Various policies, procedures, memorandum andimplementing guidelines on reporting, complianceand operations (w/c includes authorization,receipts and disbursements and safe guarding ofassets).

Implemented

(g) Mechanisms and Safeguards

State the mechanism established by the company to safeguard the independence of the auditors, financialanalysts, investment banks and rating agencies (example, restrictions on trading in the company’s sharesand imposition of internal approval procedures for these transactions, limitation on the non-audit servicesthat an external auditor may provide to the company):

Auditors(Internal and External) Financial Analysts Investment Banks Rating Agencies

External Auditorsdirectly reports to theBoard Audit Committee

Internal Auditorsdirectly reports to theBoard Audit Committeeand administratively tothe President/CEO (asthe case maybe)

All requestedinformation areprovided with utmostcare and honesty; theCompany does notinterfere to influencethe Analyst’sconclusions

All requestedinformation areprovided with utmostcare and honesty; theCompany does notinterfere to influencethe Bank’s conclusions

The Companyundertook an ISO-QMSexercise last 2012 withNeville Clarke and is on-going with the processto achieve certification.

(h) State the officers (preferably the Chairman and the CEO) who will have to attest to the company’s fullcompliance with the SEC Code of Corporate Governance. Such confirmation must state that alldirectors, officers and employees of the company have been given proper instruction on theirrespective duties as mandated by the Code and that internal mechanisms are in place to ensure thatcompliance.

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The Chairman and Compliance Officer of the Company shall attest to the Company’s compliance with the SECCode of Corporate Governance.

The Board of Directors, Management, Officers and employees of commit themselves to the principles andbest practices of governance contained in our Manual of Corporate Governance as a guide in the attainmentof its corporate goals. The Corporation shall make a continuing effort to create awareness of good corporategovernance within the organization.

The Board of Directors is the supreme authority in matters of governance and managing the regular andordinary business of the Corporation. Within their chartered authority, the directors acting as a board havethe fullest powers to regulate the concerns of the Corporation according to their best judgment.

H. ROLE OF STAKEHOLDERS

1) Disclose the company’s policy and activities relative to the following:

Policy Activities

Customers' welfare Commit to producing high qualityreal estate that is of global quality Sales Events

Supplier/contractor selectionpractice

Ability to deliver quality products ina timely manner

Major purchases are generallysent out for bids before decision

making

Environmentally friendly value-chain

Adhere to best practices, timely andhigh quality product services CSR and sales activities

Community interaction Involve local stakeholders wherepossible CSR activities

Anti-corruption programmes andprocedures

The company as a rule does notindulge in corrupt practices

The company as a rule does notindulge in corrupt practices

Safeguarding creditors' rights Transparency in financial dealings Meet financial & other covenantsset by creditors

2) Does the company have a separate corporate responsibility (CR) report/section or sustainabilityreport/section?

Yes, the CSR is part of the Company’s annual report.

3) Performance-enhancing mechanisms for employee participation.

(a) What are the company’s policy for its employees’ safety, health, and welfare?

The company provides a broad competitive range of benefits in order to promote the health and general wellbeing of its employees. Besides the government mandated benefits, the company offers insurance and otherabove-industry standard benefits such as transportation allowance, communication allowances, bonuses andother incentives.

(b) Show data relating to health, safety and welfare of its employees.

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On top of the benefits provided for under government policies, the Company provides the following benefitsto all its employees:

Benefits Executive Directors Management Professionals (Rank &File) Employees

HMO (under Maxicare) Up to Php500,000 persickness per year

Up to Php300,000 persickness per year

Up to Php120,000 persickness per year

Life Insurance (underSun Life Insurance)

Php1,500,000.00 perofficer

Php 750,000.00 perofficer

Php 150,000.00 perofficer

(c) State the company’s training and development programmes for its employees. Show the data.

Training Program Department In Charge forTraining

Attendees

Job Orientation and On-boardingSeminar

Human Resources All newly-hired employees

Code of Conduct and Ethics andupdates

Human Resources / Legal All Employees

Project Awareness Seminar Human Resources All sales and documentationsemployees

Sales Documentation Legal All sales and documentationsemployees

Titling Process Seminar Title Management Group All sales and documentationsemployees

(d) State the company’s reward/compensation policy that accounts for the performance of the companybeyond short-term financial measures

The company’s compensation policy is based on the firm’s profitability. For rewards and adjustments incompensation, the company implements KPI’s KRA’s to facilitate the rate of adjustments based onperformance

4) What are the company’s procedures for handling complaints by employees concerning illegal (includingcorruption) and unethical behaviour? Explain how employees are protected from retaliation.

Our Company requires that we comfort ourselves in accordance with a high standard corporate conductappropriate to our Company’s standing in the corporate community.

It is the policy of the Company to promote discipline in the organization by taking corrective action as may beneeded for the protection of all employees and clients, Company’s properties and interests.

These rules were prepared to ensure fair and consistent treatment and constructive actions any employee whohas made a mistake.

OBJECTIVES1. To instill awareness on proper behavior, attitude, and conduct as employees of Century Properties Group, Inc.2. To serve as guidelines in handling disciplinary cases to ensure fair, consistent, and uniform imposition ofdisciplinary actions.

GENERAL POLICIES AND PROCEDURES

1. Procedures

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1.1 The Manager is responsible for reporting to HRD any offenses committed by th employee. No employeeshall be excused from appropriate actions or penalties contained herein, on the reason of ignorance of therules and regulations stated in this Code, as well as any revisions in the future.

1.2 Upon receipt of the report, HRD shall issue a memorandum indicating the nature of the charge to theemployee concerned. The employee shall explain his side or defend himself in writing within 72 hours.Failure or refusal of the employee to comply within 72 hours shall be deemed as a waiver of his right topresent evidence on his behalf. The company may then proceed to take on appropriate action/s without suchemployee's evidence.

1.3 Upon receipt of the employee's explanation, the HR Administrative & Discipline Committee shallconduct an impartial and thorough investigation. The HR Administrative & Discipline Committee shall becomposed of representatives from HRD, Audit, Legal, Department Head/Manager, the employee's immediatesuperior. The HRD Head or his designate shall act as Chairperson of the Committee. For cases involvingproperty and security, there shall be additional members representing Finance and Security.

1.4 A hearing of the case shall be scheduled within reasonable time from issuance of the memorandum.

1.5 During the hearing, the erring employee shall be given ample opportunity to answer the allegationsagainst him, to confront any or all the witness, and to present evidence that may strengthen his explanations.The employee may avail of the assistance of any representative of his choice to defend him, if he so desires.

1.6 The HR Administrative & Discipline Committee shall document the proceedings and the document shallform part of the record case. After having ascertained all relevant facts of the case and evaluated theevidences presented, the Committee will submit its report to Management within 7 working days afterconclusion of the investigation for final resolution.

1.7 All cases involving pilferage of Company property or gross dishonesty or misuse of office/position orother criminal offenses shall be under the jurisdiction of the HR Head or his designate in close coordinationwith Security and the erring employee's Head. The employee concerned shall be placed under preventivesuspension immediately if warranted by the circumstances and if his continuous presence poses a serious andimminent threat to the life or property of the company or his co-employees.

1.7.1 Preventive suspension shall be for 30-day but not more than 120 working days depending onthe gravity of the offense.

1.7.2 Upon service of the preventive suspension or suspension notices, the employee shall turn-overall tools and equipment to his immediate superior. The employee shall prepare himself an inventoryof items turned over and duly confirmed by his immediate superior and the HR Head or hisdesignate.

1.8 Suspended employees shall be prohibited from entering the Company premises during the period ofsuspension. In case of important/emergency matters which the employee has to attend to inside theCompany premises, a prior clearance must be secured from the HR Head or his designate concerned.Management reserves its rights to provide a Security escort, if necessary.

1.10 All documents/records pertaining to the case shall be included in the 201 file of the employee.

I. DISCLOSURE AND TRANSPARENCY

1) Ownership Structure

(a) Holding 5% shareholding or more

Number of Shares Percent Beneficial Owner

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PCD Nominee 2,118,073,267 18.26% Standard CharteredBank

Deutsche Bank

Name of SeniorManagement Number of Direct shares

Number ofIndirect shares / Through(name of record owner)

% ofCapitalStock

NA NA NA NA

TOTAL

2) Does the Annual Report disclose the following:

Key risks Yes

Corporate objectives Yes

Financial performance indicators Yes

Non-financial performance indicators Yes

Dividend policy Yes

Details of whistle-blowing policy Yes

Biographical details (at least age, qualifications, date of first appointment, relevant experience, and any otherdirectorships of listed companies) of directors/commissioners Yes

Training and/or continuing education programme attended by each director/commissioner Yes

Number of board of directors/commissioners meetings held during the year Yes

Attendance details of each director/commissioner in respect of meetings held Yes

Details of remuneration of the CEO and each member of the board of directors/commissioners Yes

3) External Auditor’s feeB.

Name of auditor Audit Fee Non-audit FeeSGV and Co. Php 3,264,800.00 N.A.

1) Medium of Communication

List down the mode/s of communication that the company is using for disseminating information.

The investing public can reach us through our Investor Relations department for information and assistance.

• Quarterly Briefings and One-on-one Meetings

• Property Tours and Site Visits

• Roadshows and Conferences

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• Media Briefings

The Board commits at all times to full disclosure of materials information dealings. It shall cause the filings of allrequired information through the appropriate Exchange mechanisms for listed companies and submissions to theCommission for the interest of its stockholders and other stakeholders.

2) Date of release of audited financial report:

Audited Financial Statement – April 15, 2014

3) Company Website

Does the company have a website disclosing up-to-date information about the following?

Business operations yes

Financial statements/reports (current and prior years) Yes

Materials provided in briefings to analysts and media Yes

Shareholding structure Yes

Group corporate structure Yes

Downloadable annual report Yes

Notice of AGM and/or EGM Yes

Company's constitution (company's by-laws, memorandum and articles of association) yes

4) Disclosure of RPT

RPT Relationship Nature Value

None NA NA NA

When RPTs are involved, what processes are in place to address them in the manner that will safeguard theinterest of the company and in particular of its minority shareholders and other stakeholders?

All related party transactions are fully disclosed to the Board of Directors and are done in the regular course ofbusiness and conducted on an arm’s length basis, negotiated based on prevailing competitive commercial terms.None of the Company’s shareholders are granted special privileges or concessions.

J. RIGHTS OF STOCKHOLDERS

1) Right to participate effectively in and vote in Annual/Special Stockholders’ Meetings

(a) Quorum

Give details on the quorum required to convene the Annual/Special Stockholders’ Meeting as set forth inits By-laws.

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Quorum Required 2/3 total shareholdings present/majority of capital stock present

(b) System Used to Approve Corporate Acts

Explain the system used to approve corporate acts.

System Used

By Poll.

Notice is given to all stockholders;Presentation of corporate acts;Discussion through question and answer.

Description

Stockholders shall vote by ballot and each stockholder is entitled to castvotes in accordance with the number of shares he owns. One share isequivalent to one vote.

Stockholders are apprised of corporate acts requiring stockholders approvalin the notice and agenda of meeting and information statement;During the meeting itself, proposed corporate acts on which stockholderapproval is sought are presented and explained to te stockholders, andquestions/comments are solicited, received and entertained.

(c) Stockholders’ Rights

List any Stockholders’ Rights concerning Annual/Special Stockholders’ Meeting that differ from those laiddown in the Corporation Code.

All Stockholders’ Rights are consistent with what is indicated in the Corporation Code.

Stockholders’ Rights underThe Corporation Code

Stockholders’ Rights not inThe Corporation Code

NA NA

Dividends

Declaration Date Record Date Payment Date

April 13, 2012 cash dividends April 27, 2012 May 24, 2012

April 15, 2013 cash dividends April 29, 2013 May 16, 2013

April 30, 2014 cash dividends May 15, 2014 June 05, 2014

October 13, 2014 stockdividends

October 27, 2014 November 14, 2014

June 15, 2015 cash dividends July 3, 2015 July 16, 2015

(d) Stockholders’ Participation

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1. State, if any, the measures adopted to promote stockholder participation in the Annual/SpecialStockholders’ Meeting, including the procedure on how stockholders and other parties interested maycommunicate directly with the Chairman of the Board, individual directors or board committees.Include in the discussion the steps the Board has taken to solicit and understand the views of thestockholders as well as procedures for putting forward proposals at stockholders’ meetings.

Measures Adopted Communication Procedure

Open Forum Via Question and Answer

Motion to second Stockholders are given the right to move themotion and a corresponding second of the motion

2. State the company policy of asking shareholders to actively participate in corporate decisionsregarding:

a. Amendments to the company's constitution

The stockholders, by the affirmative vote of a majority of the stocks issued, outstanding and entitled tovote, may make, alter or amend these By-Laws at any regular meeting or any special meeting called forthat purpose as well as the majority of the members of the Board also in a meeting duly called for thatpurpose.

b. Authorization of additional shares

The stockholders, by the affirmative vote of a majority of the stocks issued, outstanding and entitledto vote, may authorize additional shares at a regular or special meeting called for that purpose aswell as the majority of the members of the Board also in a meeting duly called for that purpose.

c.

d. Transfer of all or substantially all assets, which in effect results in the sale of the company

The stockholders, by the affirmative vote of a majority of the stocks issued, outstanding and entitledto vote, may authorize the transfer of all or substantially all assets of the Company at a regular orspecial meeting called for that purpose as well as the majority of the members of the Board also in ameeting duly called for that purpose.

3. Does the company observe a minimum of 21 business days for giving out of notices to the AGM whereitems to be resolved by shareholders are taken up?

The Company sends out notices to the AGM at least 21 business days prior to the scheduled meeting.

a. Date of sending out notices: May 8, 2015

b. Date of the Annual/Special Stockholders’ Meeting: June 22, 2015

4. State, if any, questions and answers during the Annual/Special Stockholders’ Meeting.

There was no material question in relation to the Meeting Agenda that was noted during the lastAnnual Stockholder’s Meeting.

5. Result of Annual/Special Stockholders’ Meeting’s Resolutions

Resolution Approving Dissenting Abstaining

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Approval ofManagement report for2014

8,897,771,440 shares or76.71%8 of the sharesfrom outstanding capitalstock

None none

Approval of minutes ofmeeting for Specialstockholders June 2014

8,897,771,440 shares or76.71% None none

Confirmation of all actsof the board

8,897,771,440 shares or76.71% None none

Election of Directors 7,867,513,966 shares or76.71% 21,964,100 1,008,293,372

Appointment of externalauditors

8,531,405,744 shares or73.55% 366,365,696 none

Amendment of Articlesof Incorporation

8,897,771,440 shares or76.71%

none none

6. Date of publishing of the result of the votes taken during the most recent AGM for all resolutions:

The results of voting during the most recent AGM were disclosed in the Minutes which have beendisclosed before the PSE last June 22, 2015.

(e) Modifications

State, if any, the modifications made in the Annual/Special Stockholders’ Meeting regulations during themost recent year and the reason for such modification:

Modifications Reason for Modification

None NA

(f) Stockholders’ Attendance

(i) Details of Attendance in the Annual/Special Stockholders’ Meeting Held:

Type ofMeeting

Names of Boardmembers /

Officers presentDate ofMeeting

Voting Procedure(by poll, show ofhands, etc.)

% of SHAttendingin Person

% of SHinProxy

Total % of SHattendance

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Annual

Jose EB Antonio;Jose Marco R.Antonio; JoseCarlo R.Antonio; ; JoseRoberto R.Antonio; RicardoCuerva; RafaelG. Yaptinchay;Carlos BenedictK. Rivilla; Atty.Mary JudeCantorias,Stephen T.CuUnjieng,Carlos C. Ejercito

June 22,2015,

Motion andseconding;solicitation ofobjections

.03 76.71 76.74

(ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes atthe ASM/SSMs?

Yes. For the recent ASM, we have appointed SGV and Co. to tabulate and validate the votes.

Should there be a voting by ballot, the external auditors, who are expected to attend shall beauthorized to count the votes.

Yes

(iii) Do the company’s common shares carry one vote for one share? If not, disclose and give reasons forany divergence to this standard. Where the company has more than one class of shares, describe thevoting rights attached to each class of shares.

One Common Share is equivalent to One Vote.

(g) Proxy Voting Policies

State the policies followed by the company regarding proxy voting in the Annual/Special Stockholders’Meeting.

Company’s Policies

Execution and acceptance of proxies Conform with by laws

Notary Proxies not required

Submission of Proxy Should be to the corporate secretary on or before thedeadline set, as disclosed in the Notice

Several Proxies Allowed upon confirmation by the Corporate Secretary

Validity of Proxy Validated by the Corporate Secretary

Proxies executed abroad Must be consularized in the place where executed

Invalidated Proxy Vote/s not considered

Validation of Proxy Conducted by the Corporate Secretary

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Violation of Proxy Vote/s not considered

(h) Sending of Notices

State the company’s policies and procedure on the sending of notices of Annual/Special Stockholders’Meeting.

Policies Procedure

Send notices at least 21 days prior to meetingNotices are sent by post to the last known postal

address, Notice is also disclosedbefore the PSE

(i) Definitive Information Statements and Management Report

Number of Stockholders entitled to receiveDefinitive Information Statements andManagement Report and Other Materials

All shareholders entitled to receive notices

Date of Actual Distribution of DefinitiveInformation Statement and Management Reportand Other Materials held by marketparticipants/certain beneficial owners

At least 15 days prior to AGM

Date of Actual Distribution of DefinitiveInformation Statement and Management Reportand Other Materials held by stockholders

At least 15 days prior to AGM

State whether CD format or hard copies weredistributed

CD Format are sent by post and Hard copies aremade available during the meeting itself, and sentto requesting shareholders

If yes, indicate whether requesting stockholderswere provided hard copies Yes.

(j) Does the Notice of Annual/Special Stockholders’ Meeting include the following:

Each resolution to be taken up deals with only one item. Yes

Profiles of directors (at least age, qualification, date of first appointment,experience, and directorships in other listed companies) nominated forelection/re-election.

Yes

The auditors to be appointed or re-appointed. Yes

An explanation of the dividend policy, if any dividend is to be declared. Yes

The amount payable for final dividends. Yes

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Documents required for proxy vote. Yes

2) Treatment of Minority Stockholders

(a) State the company’s policies with respect to the treatment of minority stockholders.

Policies Implementation

Recognizes rights of the minority to influenceBoard composition by cumulative voting

Notice of meeting/Information Statementexpressly states set of procedures for cumulativevoting

Equal treatment of shareholders holding sameclass of shares One share one vote

(b) Do minority stockholders have a right to nominate candidates for board of directors?

Yes. Under the Company’s Articles of Incorporation, the minority stockholders have the right to nominatecandidates for the board of directors.

K. INVESTORS RELATIONS PROGRAM

1) Discuss the company’s external and internal communications policies and how frequently they are reviewed.Disclose who reviews and approves major company announcements. Identify the committee with thisresponsibility, if it has been assigned to a committee.

The company uses email as the primary medium for all internal communication. Emails are directed only to theconcerned and specific recipients, no dissemination to external addresses. All corporate records, customer data,personnel resources and legal and business records and documents are considered as classified informationwhich the employees are prohibited from disseminating, unless in the ordinary course of the company’sbusiness or where approval from Department Heads are secured.

All press releases, official media statements and public disclosures are approved and authorized by theExecutive Committee. The Company’s internal and external communication processes and policies are reviwedby the Human Resources Department, IT Department and Risk Management.

2) Describe the company’s investor relations program including its communications strategy to promote effectivecommunication with its stockholders, other stakeholders and the public in general. Disclose the contactdetails (e.g. telephone, fax and email) of the officer responsible for investor relations.

Details

(1) Objectives The Company implements an Investor Relations Program thatreaches out to all shareholders and fully discloses all corporatematerial acts and activities. The IR Officers is committed toeffectively, accurate and timely communicate to the investingpublic relevant corporate information with the objective ofassisting investors in making appropriate investment decisions.

(2) Principles The Company upholds transparency and is committed to thehighest standards of disclosure. The information disseminated tothe investing public are accurate and timely. All corporate actsmaterial and may have an impact on the company’s financial andstock price valuation are properly disclosed and supported by

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proper reports.

(3) Modes of Communications • Quarterly Briefings and One-on-one Meetings

• Property Tours and Site Visits

• Roadshows and Conferences

• Media Briefings

The Board

(4) Investors Relations Officer Kristina Lowella GarciaInvestor Relations HeadDirect Line: (632) 7938928Mobile: +63920-9145510Email: [email protected]

3) What are the company’s rules and procedures governing the acquisition of corporate control in the capitalmarkets, and extraordinary transactions such as mergers, and sales of substantial portions of corporate assets?

Under the Company’s By-laws, the Biard of Directors may:

a. Purchase, receive, take or otherwise acquire, in any lawful manner, for and in the name of thecorporation, any and all properties, rights, priveleges, including securities and bonds of otherCorporations, as the transaction or business of the Company may reasonably or necessarily require forsuch consideration and upon such terms as the Board may deem proper or convenient.

b. Invest funds of the Corporation in another corporation or business or any other purpose other those forwhich the corporation was organized, whenever upon the judgement of the Board, the interest of theCorporation would thereby be promoted, subject to stockholders’ approval as may be required by law.

Pursuant to the Corporation Code, shareholders may exercise appraisal rights in case of sale, lease,exchange, transfer, mortgage, pledge or other dispositions of all or substantially all of the corporateproperty and assets.

In case of mergers and acquisitions, the board appoints independent party/ies, as may be approved by thestockholders, to evaluate the fairness of transaction price, as maybe necessary.

Name of the independent party the board of directors of the company appointed to evaluate the fairness of thetransaction price.

The Company has not entered into any mergers or acquisition of assets in the past 3 years.

L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Discuss any initiative undertaken or proposed to be undertaken by the company.

Initiative Beneficiary

For 2014, the Company focused on providing sheltersfor the underprivileged by building the GK-CenturyProperties Village, a resettlement community locatedin Barangka, Madaluyong City

Gawad Kalinga Community Development Foundation,Inc.

Adopt a community or charity association Operation Smile organization

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M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL

Disclose the process followed and criteria used in assessing the annual performance of the board and itscommittees, individual director, and the CEO/President.

Process Criteria

Board of Directors Periodic self appraisal Board discussion andparticipation

Board Committees Periodic self-appraisal Meeting targets set by thecommittee

Individual Directors Periodic self appraisal Board discussions andparticipation

CEO/President Periodic review of managementand the CEO/President

Attainment of corporateobjectives

N. INTERNAL BREACHES AND SANCTIONS

Discuss the internal policies on sanctions imposed for any violation or breach of the corporate governancemanual involving directors, officers, management and employees

Violations Sanctions

First Violation Verbal reprimand / Memo

Second violationSuspension

Third reprimand Council for employee actions; removal from office