Securities and Exchange Commission Sec Form 17-A

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A

ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES

1. For the fiscal year ended December 31, 2012

2. SEC Identification Number 157912 3. BIR Identification No. 000-551-890-000

4. Exact name of the issuer as specified in its charter: CEBU HOLDINGS, INC.

5. Province, Country or other jurisdiction of incorporation or organization: Cebu, Philippines

6. Industry Classification Code: ______(SEC Use Only)

7. Address of principal office: 7/F, Cebu Holdings Center, Cardinal Rosales Avenue, Cebu Business Park, Cebu City Postal code: 6000

8. Issuer’s telephone number: (032) 231-5301

9. Former name, former address, former fiscal year: not applicable

10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sections 4 and 8 of the RSA:

Title of each class Number of shares of common stock outstanding Common shares 1,920,073,623 shares P1,920,073,623

Amount of debt outstanding: The Company has no registered debt.

11. Are any or all of these securities listed on a Stock Exchange? Yes [x] No [ ]

Name of Stock Exchange: Philippine Stock Exchange Class of securities listed: Common stocks

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 preceeding 12 months (or for such shorter period that the registrant was required to file such reports): Yes [x] No [ ]

(b) has been subject to such filing requirements for the past 90 days: Yes [x] No [ ]

13. Aggregate market value of the voting stock held by non-affiliates: P 7.680 billion (as of end-Dec.2012)

No. of Shares % Market Value (P4.00/share) Ayala Land, Inc. (Parent Company) 956,241,738 49.80% 3,824,966,952.00 Non-affiliate (Public) 963,831,885 50.20% 3,855,327,540.00 Total 1,920,073,623 100.00% 7,680,294,492.00

APPLICABLE ONLY TO ISSUERS INVOLVED IN INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS DURING THE PRECEEDING FIVE YEARS

1. 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.

Not applicable.

DOCUMENTS INCORPORATED BY REFERENCE

2. Briefly describe documents incorporated by reference and identify the part of the SEC Form 17-A into which the document is incorporated:

2012 Audited Consolidated Financial Statements (incorporated as reference for Item 7 of SEC Form 17-A)

TABLE OF CONTENTS

Page No.

PART I - BUSINESS AND GENERAL INFORMATION

Item 1. Business 1 Item 2. Properties 25 Item 3. Legal Proceedings 26 Item 4. Submission of Matters to a Vote of Security Holders 26

PART II – OPERATIONAL AND FINANCIAL INFORMATION

Item 5. Market for Issuer’s Common Equity and Related Stockholder Matters 26 Item 6. Management’s Discussion and Analysis or Plan of Operation 28 Item 7. Financial Statements 36 Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 36

PART III – CONTROL AND COMPENSATION INFORMATION

Item 9. Directors and Executive Officers of the Issuer 36 Item 10. Executive Compensation 41 Item 11. Security Ownership of Certain Beneficial Owners and Management 43 Item 12. Certain Relationships and Related Transactions 44 Item 13. Compliance with Leading Practice on Corporate Governance 46

PART IV - EXHIBITS AND SCHEDULES

Item 14. Exhibits and Reports on SEC Form 17-C

(a) Exhibits 47 (b) Reports on SEC Form 17-C 47 Item 14. Additional Disclosures Data 48

SIGNATURES 52

INDEX TO EXHIBITS

INDEX TO SUPPLEMENTARY SCHEDULES

PART I - BUSINESS AND GENERAL INFORMATION

Item 1. Business (Part I, Paragraph (A) of SRC Rule 12)

(A) Description of the Business (The Company)

(1) Business Development.

Cebu Holdings, Inc. is a publicly listed company engaged in real property ownership, development, marketing, management. It was registered with the Securities and Exchange Commission on December 9, 1988 with an authorized capitalization of P1 Billion.

It is an affiliate company of ALI (49.80%). Other partners include BPI Capital Corp. (15.29%), a wholly- owned real estate subsidiary of the Bank of the Philippine Islands, First Metro Investment Corporation, (11.52%), and the Public (23.39%). The Company's operations consist of seven (7) types of activities: rental of retail space commercial land sales office and residential condominium sales sale of proprietary sports club shares sale of residential subdivisions lease of office space (e-office / eBloc) via a subsidiary CPVDC hotel development/operations via an affiliate Cebu Insular Hotel Co. Inc.

The Company owns and manages the Cebu Business Park (CBP), a 50-hectare business and commercial subdivision in Cebu City, and, to date, the single largest urban development project in Southern Philippines. CBP is master-planned to be the central business district in Cebu that integrates business, high-rise residential, shopping, and sports and recreational facilities. CBP is complete with world-class utilities and is home to some of the top local and international companies.

CBP is strategically located to co-exist with the development plans and directions of Cebu City’s urban growth. CBP’s major streets serve as a vital part of Cebu City’s radial road network in the northern district.

CBP was officially proclaimed as a PEZA-accredited IT Park pursuant to Presidential Proclamation 2053 (2010). According to the Special Economic Zone Act of 1995 (as amended in R.A. 7916), all investors and locators in PEZA-accredited IT Parks are now entitled to fiscal and non-fiscal incentives. Among the benefits of an IT Park are improvement in international competitiveness, increase in direct investments and capital formation, employment of job creation, and an improved of quality of life

This development allows Cebu to maximize its advantages as a preferred business and tourist destination in the country.

There are currently 25 buildings in CBP, with 12 ongoing constructions.

This development is noteworthy not only for its scale but also because of its environment and urban development aspects. Its roadways have become integral to Cebu City’s road network, and therefore contribute to the easy flow of vehicular traffic and to daytime population distribution. The master plan allows for generous open spaces (20 percent of CBP is devoted to open green space and greenery), and makes allowances for the growing demands of a modern urban commercial community.

The Cebu Business Park and Cebu IT Park, the flagship project of CHI’s subsidiary CPVDC, are unified through an integrated brand identity as Cebu Park District, which was launched in 2011 Each one is a complete destination comprising a dynamic whole. Their respective strengths will be highlighted as a representation of shared growth. The Cebu Park District’s identity will serve to magnify each park’s best- in-class positioning and unify both park’s value proposition of being the premier district for business, leisure

- 1 - and living. This integrated brand also serves to sustain continuing build up and promote investment in both developments.

Ayala Center Cebu is the shopping and lifestyle destination of the region. Nestled at the heart of the vibrant metropolis, it showcases the most sought-after retail brands as well as promising concepts clustered in specialized zones. It has also a collection of popular dining and hangout places for fun, bonding, and nurturing relationship activities.

Since 1994, Ayala Center has continuously offered the most unique and rewarding shopping and dining experiences to both its local and tourist patrons. It is the preferred mall of the AB market, gated villages, and office workers with its wide selection of foreign and local brands. It is a masterpiece of retail innovation.

Strategically located at the center of CBP, it is only 20 minutes away from the Mactan Cebu International Airport, and is just a walk away from some of Cebu’s best hotels, including Cebu City Marriott Hotel. It is also just 10 minutes away from the nearest seaports for that quick island getaway.

In 2011, the Company embarked on the expansion project of Ayala Center Cebu to address the market gap and strengthen its landmark as the lifestyle and retail destination in Metro Cebu. The expansion will add four levels of retail stores with over 36,000 square meters of gross leasable space in a gross floor area of approximately 50,000 square meters. Rustan’s Fresh will transfer to an area twice its existing space at the basement of the mall. Rustan’s Department Store will likewise expand to a three-storey area four times its current size to bring in their full line-up in product and brand offerings. The expansion is expected to open in the last quarter of 2013 and with its seamless connectivity to the existing mall and The Terraces, it will complete the full-circle architecture of the mall.

The Company also developed the City Sports Club Cebu (CSCC), an exclusive urban resort equipped with state-of-the-art health and fitness equipment. This project is in partnership with ALI. In 2004, CSCC signed reciprocity agreements with American Club in Singapore and United Services Recreation Club in Hongkong.

In 2010, CHI partnered with Ayala Land Premier (ALP), the high-end product category of Ayala Land, for the development of a premier residential condominium project within CBP. 1016 Residences will provide 109 units of country club living in Cebu’s address of choice. Located beside the City Sports Club Cebu, residents will be entitled to club usage rights.

With the success of 1016 Residences, CHI and ALP unveiled another 38-storey residential tower, the first of its kind in ALP’s residential portfolio in the region. Primed to rise on top of the mall’s soon-to-be-completed wing, Park Point Residences is said to mark the beginning of sophisticatedly modern and integrated convenient living in the district since its location will offer private access to future destinations in Ayala Center Cebu.

CHI also partnered with Alveo Land for the development of Sedona Parc in 2010. This residential condominium of 114 units will offer upscale lifestyle inspired by style, design, and nature. It is set to rise in a tranquil and highly- accessible parkside location in Cebu Business Park.

The following year, CHI and Alveo Land showcased its residential innovation through Solinea—its first multi-tower Alveo project in Cebu that upholds a city-resort living experience through its overall design while reminiscent of a vacation destination.

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CBP is also the site of the Cebu City Marriott Hotel, the first businessman's hotel managed by world- renowned Marriott International in Visayas-Mindanao. Amara is Cebu Holdings Inc.’s premier residential development in Catarman, Liloan, which carries the Ayala Land Premier (ALP) label and follows the standards of the brand. ALP is set exclusively for the most well-appointed addresses—the likes of renowned communities such as Ayala Alabang, Forbes Park, and Dasmariñas Village in Luzon.

Amara offers a master-planned community nestled by the sea and undulating hills accentuated by the eternal warmth of a historical lighthouse. It provides a safe haven for families and a luxurious seaside living experience with first-class facilities.

Amara Phase 1 has an esplanade and the grand clubhouse with infinity pools, jacuzzi, social hall, function room, a beach bar, and view decks with spectacular views of the Mactan channel. Amenities in Phase 2 include a Serenity Park with floating gazebos and a Sports and Recreation Center with covered basketball and badminton courts and a fitness gym that overlooks the sea. Picnic Groves will be located in Phase 3 of the sprawling Amara development.

Amara continues to lead the high-end residential open lot category in Cebu at 51 percent market share for 2010. The opening of the North Coastal Road and the Cansaga Bridge in March 2010 reduced travel time from the city to the luxury seaside community by half, bringing the opulent Ayala Land Premier lifestyle closer to the central business district.

In 2010, the Company opened a new phase Amara North. It is the best choice for luxurious seaside living for a privileged few with its enviable sea access through an existing wharf for yachts and speed boats in an exclusive enclave at the Catarman headland with an infinity view of the sea. This phase is designed to complement active lifestyle through five seamlessly connected open parks that are designed to heighten the sense of adventure as residents will be encouraged to explore the natural terrain and enjoy an enviable lifestyle.

A CHI subsidiary, Cebu Property Ventures and Development Corporation, has also developed a 24-hectare property not far from the CBP. This project is called Cebu I.T. Park (formerly Asiatown I.T. Park).

Cebu I.T. Park is a well-planned IT economic zone and modern trading hub with global gateway. The 24- hectare integrated mixed-use I.T. Park obtained accreditation from the Philippine Economic Zone Authority (PEZA) as an IT Park in 2000. The PEZA accreditation is the first such distinction accorded a property development project in the Visayas and Mindanao.

In September 22, 2011, Asiatown I.T. Park was officially re-named Cebu I.T. Park – strengthening the emphasis the queen city of the South which has today become one of the top BPO destinations globally.

Home to over a hundred IT companies and related services, Cebu I.T. Park is host to over 70 percent of Cebu’s business process outsourcing (BPO) industry. It hosts a good mix of software research and development, BPOs, and contact centers, bringing in millions of pesos in investments and employing thousands of people. In fact, by end of 2011, it has provided employment to almost 23,000 – a mixture of engineers, and information and communication technology professionals.

Cebu’s thriving IT and BPO industry is most evident in the bullish build-up within Cebu I.T. Park with seven buildings under construction which will be an addition to the existing 13 buildings at the I.T. Park. eOffice One, a one-storey modular building (11,370 sqm), now hosts BPOs, I.T. firms, conveyor design and software research multinational companies. e-Office One is due for redevelopment this year. This will be a very exciting addition to Cebu IT Park. e-Bloc Tower 1 is 12-storey mid-rise office condominium with retail provision at the ground floor. It is a project of Asian I-Office Properties, a joint venture between CPVDC and Ayala Land, Inc. The building has redundant power and water supply, optimum telecommunications facilities, centralized sewage and a secure location within the heart of the city.

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With its first tower fully leased out, AiO started the development, e-Bloc Tower 2, a 16-level office building with a total gross floor area of 34,762sqm located in Phase 2 of Cebu I.T. Park, launched in June 2010. e-Bloc Tower 2 is proud manifestation of sustainable design practices. It addresses the increasing demand for office/IT/BPO space in Metro Cebu. The office building is fully leased out to some of the big players in the BPO/IT industry.

To accommodate the increase in demand for office spaces, e-Bloc Tower 3 was launched last February 2012. It is a 12-level office building with a total gross floor area of 15,760sqm. Estimated completion will be 4th quarter of 2013.

Seeing the demand for residential spaces within this bustling IT park, AiO in partnership with Avida Land (Ayala Land’s best value brand offering affordable living at its best) launched Avida Towers Cebu in June of 2010. The first Ayala Land affordable condominium outside Luzon, Avida redefines life with exciting options for future residents to enjoy the benefits of home, office, and play inside the most vibrant address in town for young professionals and families. The first tower of over 500 units was sold in an unprecedented rate, prompting the launch of the second tower after only three months since it was first offered to the market.

The Avida brand further expanded its portfolio in Cebu with the multi-tower Avida Towers Riala. The said development will seamlessly include spaces for retail and dining in its masterplan, furthering the lifestyle options that are already present in its location.

The Walk. The Walk steadily remains to be a strong retail magnet in the ever-busy Cebu IT Park. Heavily frequented by BPO workers, young professionals, tourists, families, and sports enthusiasts, it has emerged from simply being a hangout haven into popular venue for showcasing recreational activities like sports, music, photography, and even luxury vehicle collections.

The magnitude and significance of its projects make CHI the leading real estate company in Cebu; a positive contribution towards the attainment of its mission as part of ALI's Visayas-Mindanao Division - to become the premier multi-lined real estate organization in the Vis-Min region, and it continues to create landmarks, set standards, and build lasting relationships with its customers. The Company has definitely changed the physical landscape of Cebu, bringing with it a distinctive lifestyle for a market that aspires “world class”.

SUBSIDIARIES AND ASSOCIATE % Ownership Nature of Projects

CBP Theater Management, Inc. 100% Theater management (Pre-operating) Cebu Leisure Company, Inc. 100% Entertainment facilities management Cebu Property Ventures and Devt. Corp. 76% Mixed-use development Cebu Insular Hotel Company, Inc. 37% Hotel development/operations

(2) Business of the Issuer (Operations).

(A) Description of Registrant

(i) CHI’s operations consist of seven types of activities:

• rental of retail space • commercial land sales • office and residential condominium sales • sale of proprietary sports club shares • sale of residential lots • lease of office space (e-office/eBloc) via a subsidiary Cebu Property Ventures & Development Corp. • hotel development/operations via an affiliate Cebu Insular Hotel Co. Inc.

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(ii) The following spells out CHI’s operating (real estate) revenues by category of activity for the periods indicated:

For the years ended 31 December 2012 2011 2010 P Mn % P Mn % P Mn %

Commercial land sales 120.2 7 131.3 10 174.4 12 Residential lot (Amara) 19.2 1 63.6 4 272.9 19 Residential Condo(1016, 169.6 11 51.2 4 Sedona Parc, Park Point & Avida Riala Tower) City Sport Club shares .7 0 0 0 0.8 0 Rental Income Ayala Center Cebu 750.0 46 699.8 48 632.8 40 Cebu Leisure Co., Inc. 53.9 3 50.2 3 44.5 3 AITP Retail (The Walk) 21.5 1 21.8 1 19.5 1 e-Office 29.5 2 66.4 5 49.3 4 Others 0 0 0 0 1.5 0 Theater income 96.0 6 80.3 6 77.9 5 Equity in net earnings of 73.9 5 28.5 2 29.0 2 an associate Interest and other income 298.5 18 249.6 17 219.3 14 1,633.0 100 1,442.7 100 1,521.9 100

Commercial Land Sales

Cebu Business Park. CBP is a 50-hectare master-planned development and the first in the VisMin region that integrates business, high-rise residential, shopping and sports/recreational uses.

It is strategically located to co-exist with the development plans and directions of Cebu City’s urban growth. Cebu Business Park’s major streets serve as a vital part of Cebu City’s radial road network in the northern district. Situated at the center of Cebu City, the CBP is bounded by Archbishop Reyes Avenue in the west, Juan Luna Avenue to the north, M.J. Cuenco Avenue to the east and Gorordo Avenue to the South. The Park is located approximately three (3) kilometers from residential subdivisions in the north, and fifteen (15) kilometers from the Mactan International Airport.

Lot owners at CBP include various prestigious companies such as A. Soriano Corporation, Asian Bank Corporation, Phinma Properties & Holding Co., Philippine National Bank, Insular Life Insurance Co., China Bank, Metropolitan Bank & Trust Co., Bank of the Philippine Islands, Bigfoot Properties Phils., Inc., Adelaida Ghassemi, Alveo Land, Corp., Repro Optima Center for Reproductive Health, Inc., Ms. Lina Danaque Ong, Ahava Realty & Development Corporation and Contempo Property Holdings, Inc.

A number of vertical construction project started since the Company initiated the construction of Cebu Holdings Center in 1992. Other CHI-owned projects include Ayala Center Cebu, Park Tower One and Park Tower Two, Ayala Life FGU Center (jointly with Ayala Life Assurance, Inc. and FGU Insurance Corp.), Cebu City Marriott Hotel (the 303-room businessman’s hotel jointly with Ayala Hotels, Inc.), Ayala Center Phase 2b, 1016 Residences & Park Point Residences (jointly with Ayala Land Premier) and Sedona Parc & Solinea (jointly with Alveo Corp.). Other lot owners who count among the early builders are Keppel Center, First Abacus Financial Tower (owned by the Prosperity Properties and Management Corporation) and the HDMF / WTI Tower owned by Pag-ibig Fund and WTI, Metro Bank, Union Bank and Taft Financial Center, - 5 -

Security Bank, Pioneer House, 8990 Housing and Development Building, Cebu IT Tower, Lexmark Building 1, 2&3, China Bank, Insular Building and Pagoda Realty Corp. In 2012, Avalon Building was completed. The Apple One Property, Calyx, Creativo building, 2-Quad & China Bank expansion building, were still under construction during the period. Others are expected to begin construction within the next five years, thus hastening the pace of full development in the area.

Apart from the office/residential condominium projects and the City Sports Club Cebu, CBP also has a luxury hotel. This is in accordance with the plan of making CBP a world class mixed-use commercial property designed to meet the demands of the 21st century.

Residential Lot Sales

Amara is Cebu Holdings Inc.’s premier residential development in Catarman, Liloan, which carries the Ayala Land Premier (ALP) label and follows the standards of the brand. ALP is set exclusively for the most well-appointed addresses—the likes of renowned communities such as Ayala Alabang, Forbes Park, and Dasmariñas Village in Luzon.

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City Sports Club Shares

Residential Condominium Sales (Cebu Business Park)

Rental of Retail Space

Ayala Center Cebu plays host to a number of popular foreign brands such as Marks & Spencer, Lacoste, Guess, Mango, Promod, Esprit, Topshop, Etam, Samsonite, Geox, Rockport, Levi’s, Benetton, Penguin, Nautica, Dockers, The Body Shop, Naturalizer, Nine West, Springfield, Steve Madden, Girbaud, Converse, Crocs, and Call It Spring.

Popular national brands like Plains & Prints, Maldita, Kashieca, Folded and Hung, Bench, Penshoppe, Oxygen, Hot Pink, Lava, Kamiseta, Bayo, ForMe, Memo, Freeway, Artwork, Celine, Officine, CMG, Bratpack, and Restoerun can also be found in the mall. Cebu home-grown fashion concepts include What a Girl Wants, Isis, Cocoon, Sunny Side Up, July and Simon.

To respond to the increasing need of the Cebuanos to be physically fit and active, a section of the mall was redeveloped. The Active Zone features two levels of performance sports brands, fitness equipments, wellness gadgets, and other related concepts to cater to the need of shoppers who engage in an active

- 7 - lifestyle. This included first-in-Cebu concepts like R.O.X., Phiten, Puma, Skechers, Merrell, Wellness Concepts, R. Options, Runnr, as well as the staple popular sports brands like Nike and Adidas with Rudy Project and Empire Golf opening in 2012. A special nook at the center of the Active Zone’s second level was created with a good selection of food kiosks. The popular and well-patronized pretzels of Auntie Anne’s, the local chocolate bar at Tablea and the Japanese inspired dessert at Mochiko, are names that have drawn traffic towards this area of the mall.

With Metro Gaisano as its anchor department store and supermarket – which introduced major renovations in their area in 2012, the mall also houses Healthy Options, Rustan’s Fresh, and Rustan’s Department Store. The mall also provides for a wide offering for IT, appliances, home furnitures, and specialty stores. To ease convenience of shoppers, an old cinema was converted into a Service hub – a destination zone where one can transact travelling and ticketing requirements, payments for utility bills, money changer exchangem and even tutorial language services. For Entertainment, the fourth floor offers four theaters, one of which is equipped with 3D digital technology.

Food offerings in the mall range from the popular national fast food names like Jollibee, McDonald’s, Chowking, Greenwich, Pizza Hut, KFC, and Kenny Rogers, to the casual homegrown food concepts of Cebu like Oh George, Idea Italia, Harbour City, Orange Brutus, and My Joy. For a more relaxed dining atmosphere, shoppers may conveniently head out to The Terraces and enjoy its al fresco ambiance, carefully maintained landscaping and water features.

The Terraces at Ayala Center Cebu aims to strengthen the mall’s ambiance-driven dining component with a cohesive and comprehensive mix of established Manila restaurants like BonChon Chicken which recently opened in 2012 and Cebu dining concepts like Casa Verde and Mooon Café to name a few. It hosts popular, trendy and al fresco dining like TGIFridays, Banana Leaf, Cyma, Café Laguna, Big Mao, Gerry’s Grill, Pancake House, Hukad (by Golden Cowrie), Gelatissimo, Yellowcab, The Dessert Factory, Lemon Grass, and Bread Talk. Here, coffee lovers have a handful of choices including Starbucks, Figaro, Seattle’s Best, Coffee Bean & Tea Leaf, and UCC. To complement the development with nightlife offerings, Red Box offers a big capacity to host a variety of parties and functions. Set at the center of this area is the outdoor activity area surrounded by vibrant greeneries and soothing water features that provides distinctive sun up to sun down experience in dining and entertainment. The Terraces strengthens Ayala Center Cebu’s position as the landmark of unsurpassed shopping, dining, and entertainment in the region.

For the period ended 31 December 2012 the mall registered total revenues of P= 750.0 million. This is 7% higher than same period of last year due to higher lease occupancy. Net operating income is 7% higher also than same period of last year.

The right mix of affordable cuisine and elegant ambiance enables restaurants like Blue Elephant, Mooon Café, Casa Verde, La Marea, Shakeys, and Barbecue Joe to remain a favorite in the area. Favoring the proximity to popular jogging trails, The Sports Warehouse opened at the second level, offering the best sports brands at affordable prices. Additional service offerings were made available in Xchange (for currency exchange), and Smile Dental Care Center (for dental services). With its convenient surface parking, wide open spaces, safe environment, and its strategic location, the Walk becomes vibrant at night.

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Rental of Office Space eOffice One, a one-storey modular building (11,370 sqm), now hosts BPOs, I.T. firms, conveyor design and software research multinational companies, namely: NKC Conveyors Philippines Corporation, Academic Forward Thinking, Inc., Advance World Solutions, Inc. and Ameeratel, Inc. e-Bloc Tower 1 is 12-storey mid-rise office condominium with retail provision at the ground floor. It is a project of Asian I-Office Properties, a joint venture between CPVDC and Ayala Land, Inc. The building has redundant power and water supply, optimum telecommunications facilities, centralized sewage and a secure location within the heart of the city. The project is fully leased out to two big companies. NCR Corporation (NYSE:NCR), a leading global IT business solutions company with world-class offerings in the areas of financial self-service, store automation, business consumables and IT support service, was the first to move into e-Bloc Tower 1 and occupying 6,974sqm.

Another locator is JP Morgan Chase Bank, NA- Philippine Customer Care Center, one of the largest banks in the US and one of the oldest financial firms in the world. The company occupies 12,404sqm of office space for their Philippine Customer Care Center.

Residential Condominium Sales (Cebu I.T. Park)

The company and its subsidiaries had no material Reclassification, Merger, Consolidation or Purchase of a Significant Amount of Assets during the last three years.

The company and its subsidiaries have not filed any bankruptcy, Receivership or similar proceedings during the last three years.

Business Development of CHI’s subsidiaries/affiliate:

Cebu Property Ventures & Development Corp. (76% owned subsidiary)

Cebu Property Ventures and Development Corporation was registered with the Securities and Exchange Commission (SEC) on August 2, 1990 and started commercial operation on September 1, 1996. The Company started as a joint venture corporation between the Province of Cebu and Ayala Land, Inc. CPVDC is now 76% owned by Cebu Holdings, Inc. (CHI) after a successful tender offering undertaken in 1995.

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CPVDC is a publicly listed company engaged in real property ownership, marketing, management and development. The Company's operations consist of five types of activities:

• commercial land sales (Cebu I.T. Park) • development and leasing of office space (eOffice one / eBloc) • residential subdivision sales (Garden Ridge Village – sold out) • rental of retail space (The Walk) • residential condominium sales (Avida Towers Cebu / Avida Riala Tower)

CPVDC is the owner and developer of Cebu I.T. Park (formerly Asiatown I.T. Park), a 24-hectare prime property complementing the Cebu Business Park. It is ideally located in the former Lahug Airport, now Cebu's primest area.

Competition:

The Company has no known competitor in the area of commercial land sales. With respect to residential subdivision sales CPVDC competes for purchasers primarily on the basis of reputation, price, availability of attractive in-house financing terms, reliability, and the quality and location of the community in which the relevant site is located.

CPVDC’s THREE YEAR RESULTS OF OPERATIONS

2012 vs. 2011 Results of Operations

Cebu Property Ventures and Development Corporation (CPVDC) posted total revenues of P= 242.2 million, 7% lower than last year’s P= 261.5 million. The decline was mainly due to sale of commercial lot at Cebu IT Park in 2011 and lower rental income from e-Office. Net Income for the period amounted to P= 132.1 million, 23% lower than the previous year’s P= 171.3 million.

Earnings before Interest and Taxes (EBIT) showed a 54% decrease from P 106.9 million in 2011 to P 48.8 million in 2012.

Stock price increased from a closing of P2.80 per share in 2011 to P5.00 per share in 2012 resulting to a total shareholder return (TSR) of 81.52%.

In 2012, CPVDC declared cash dividend from the unappropriated retained earnings of the company as of December 31, 2011, of P0.12 per share to all shareholders as of record date December 07, 2012 and paid on December 21, 2012.

Revenues amounted to P= 242.2 million, 7% lower than last year’s P= 261.5 million.

• Cebu I.T. Park‘s revenues registered at P= 34.0 million, a 54% decline versus last year’s P= 73.3 million.

• Rental from e-Office contributed total revenues of P= 29.5 million, a 56% decline compared to the P= 66.4 million in 2011. The decrease was due to management decision not to renew lease contracts at e-Office to allow redevelopment of the area.

• The Walk posted total revenues of P= 21.1 million, 3% lower than last year of P= 21.8 million. As of December 2012, lease occupancy is 83.2%.

• Revenue from the sale of condominium units at Avida Riala Tower stood at P= 3.9 million.

• Interest and other Income reached P= 119.5 million, 44% higher than the 2011 level of P= 82.8 million. The increase was mainly due to sale of services.

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• CPVDC generated P= 33.7 million in equity in net earnings from an associate, Asian I-Office Properties, Inc. (AiO. This is 95% higher than the P= 17.3 million of the previous year.

Cost and Expenses reached P= 73.8 million, 3% higher than the P= 71.9 million of the previous year. The bulk of which was primarily of dues & fees, repairs & maintenance and ad & promo expenses.

Net Income registered at P= 132.1 million, 23% lower than the previous year’s P= 171.3 million.

Financial Condition

The company’s financial position remained strong as its total assets stood at P= 1.567 billion as of December 31, 2012. Current ratio registered at 5.25: 1 lower compared to December 31, 2011 level of 6.44: 1. Current assets stood at P= 988.7 million, P= 430.0 million of which is cash while total liabilities stood only at P= 188.3 million. The bulk of the company’s liabilities consist of reserve provision for the development of Phase 2 of Cebu IT Park and newly acquired property amounting to P= 24.6 million. Debt-to-equity ratio stood at 0.14: 1 higher than December 2011 level of .09: 1.

Key Performance Indicators

The table below sets forth the comparative key performance indicators of the Company:

Indicators 2012 2011 Current Ratio 1 5.25: 1 6.44: 1 Total Debt to Equity Ratio 2 0.14: 1 0.09: 1 Bank Debt to Equity Ratio 3 No Bank Loans No Bank Loans Return on Assets (ROA) 4 8.65% 11.64% Return on Equity (ROE) 5 9.65% 12.88%

1Current Asserts / Current Liabilities 2Total Liabilities / Stockholders’ Equity 3Total Bank Debt / Stockholders’ Equity 4Net Income / Average Total Assets (Assets beginning of the year plus Assets end of the year divide by two) 5Net Income / Average Stockholders’ Equity (Stockholders’ Equity beginning of the year plus Stockholders’ Equity end of the year divide by two)

Causes for Material Changes from Period to Period of Financial Statements

Cash and Cash Equivalents amounted to P430.0 million, 19% higher than the P360.2 million in December 2011 mainly due to collection of receivables, rental income and service income during the period.

Short-term Investments decreased by 100% in comparison to the P560 thousand in 2011.

Accounts Receivable reached P271.3 million, 55% higher than the P174.8 million of December 2011 due to reclassification of accounts from non-current to current. This is mainly the sale of CITP lots to an affiliate Asian I-Office Properties, Inc. (AiO) on installment in 2009 & 2011 and advances to contractors during the period.

Inventories reached P= 286.3 million, 6% higher than last year’s P= 269.9 million. The increase was due to the company’s investment in the development of Avida Riala Tower. This is new residential condominium project of CPVDC in partnership with Avida Land Corporation.

Other Current Assets is 100% or P1.0 million higher than year ago level caused by recognition of prepaid taxes and other various charges.

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Investment in an Associate showed a 26% improvement versus last year’s level of P188.8 million as it reached to P238.0 million. The increase was due to higher income for the period.

Property & Equipment-Net reached P= 1.5 million, 24% higher than last year’s P= 1.2 million. The increase was mainly due to purchase of new office equipment for the period.

Deferred Tax Assets showed an 11% (P930k) decrease compared to the P8.7 million in December 2011 mainly due to interest accretion during the period. Noncurrent Accounts Receivable totaled P= 840 thousand showing a 99% (P= 147.6m) decline due to reclassification of accounts from non-current to current.

Other Noncurrent Assets stood at P254 thousand, 82% lower than the year ago level of P1.4 million. The decrease was mainly due to reclassification of suspense accounts.

Accounts and Other Payables showed a 76% or P60.7 million increase compared to the P79.6 million in December 2011 mainly due to Accrued DOE & GAE, retention payable, dividends payable, taxes payable and advance payment to Avida Land Corporation during the period.

Deposits and Other Liabilities posted an 5% or P2.0 million decrease mainly due to the application of advance rent from various e-Office locators.

Income Tax Payable reached P11.2 million, 66% higher compared to the December 2011 level of P6.7 million primarily due to provision for income tax during the period. Deposits and Other Noncurrent Liabilities decreased by 100% (P= 2.2m) due to reclassification of tenants’ deposit from non-current to current portion.

Retained Earnings showed a 5% or P= 19.2 million improvement as a result of the 2012 Net Income net of cash dividend paid in December 2012 amounted to P= 112.8 million.

• Due to the Company’s sound financial condition, there is no foreseeable trend or event which may have material impact on its short-term or long-term liquidity.

• Funding will be sourced from internally-generated funds.

• There is no material commitment for capital expenditures other than those performed in the ordinary course of trade or business.

• There is no known trend, event or uncertainty that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations.

• There is no significant element of income arising from continuing operations.

• There is no material change from period to period in one or more line items of the financial statements.

• There have not been any seasonal aspects that had a material effect on the financial condition or results of the Company’s operations.

• There were no known events and uncertainties that will trigger direct or contingent financial obligation that is material to the company, including any default or acceleration of an obligation.

• There were no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationship of the company with unconsolidated entities or other persons created during the reporting period.

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2011 vs. 2010 Results of Operations

Cebu Property Ventures and Development Corporation (CPVDC) registered a total revenue of P 261.5 million, a 1% decline vis-à-vis last year’s P= 263.4 million primarily due to lower land sales, and interest and other income. Net Income during the period reached 171.3 million a 4% increase vis-à-vis the previous year’s 164.4 million.

Earnings before Interest and Taxes (EBIT) posted a 20% increase from P 89.1 million in 2010 to P 106.9 million in 2011.

Stock price increased from a closing of P2.00 per share in 2010 to P2.80 per share in 2011 resulting to a total shareholder return (TSR) of 46.00%.

Last year, CPVDC declared cash dividend from the unappropriated retained earnings of the Company as of December 31, 2010 of P0.12 per share to all shareholders as of record date November 18, 2011 and paid on December 14, 2011.

Revenues stood at P= 261.5 million, 1% lower than last year’s P= 263.4 million.

• Cebu I.T. Park’s (formerly Asiatown I.T. Park) total sales stood at P= 105.7 million derived from the sale of one (1) office lot (3,304 sqm) to AiO, an associate, with a price of P= 32k per square meter. It was 25% lower versus the 2010 level of P= 140.3 million where one (1) lot was sold (4,383 sqm.) with a price of P= 32k per square meter. Revenue recognized out of the sale was P= 73.3 million.

• Revenue generated from e-Office reached P= 66.4 million, 37% higher than last year (P= 48.5m).

• The Walk contributed a total revenue of P= 21.8 million, a 12% improvement compared to the P= 19.5 million of last year. Lease occupancy for the period is 98.3%.

• Interest and other Income reached P= 82.8 million, a 9% decline vis-à-vis last year’s P= 90.7 million.

• CPVDC generated P= 17.3 million in equity in net earnings from AiO. This was 46% higher than the P= 11.8 million of the previous year.

Cost and Expenses totaled P= 71.9 million, 14% lower than the P= 84.0 million of the previous year, the bulk of which was due to the cost of sale of the lots sold last year.

Net Income for the period amounted to P= 171.3 million, representing a 4% growth compared to the 2010 level of P= 164.4 million.

Financial Condition

The Company’s financial position remained strong as its total assets stood at P= 1.487 billion as of December 31, 2011. Current ratio registered at 6.44: 1 higher compared to December 31, 2010 level of 4.72: 1. Current assets stood at P= 805.5 million, P= 360.8 million of which was cash while total liabilities stood only at P= 127.3 million. The bulk of the Company’s liabilities consisted of the reserve provision for the development of Phase 2 of Cebu IT Park amounting to P= 42.9 million. Debt-to-equity ratio stood at 0.09: 1 lower than December 2010 level of .12: 1.

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Key Performance Indicators

The table below sets forth the comparative key performance indicators of the Company:

Indicators 2011 2010 Current Ratio 1 6.44: 1 4.72: 1 Total Debt to Equity Ratio 2 0.09: 1 0.12: 1 Bank Debt to Equity Ratio 3 No Bank Loans No Bank Loans Return on Assets (ROA) 4 11.64% 11.56% Return on Equity (ROE) 5 12.88% 12.89% 1Current Assets / Current Liabilities 2Total Liabilities / Stockholders’ Equity 3Total Bank Debt / Stockholders’ Equity 4Net Income / Average Total Assets (Assets beginning of the year plus Assets end of the year divided by two) 5Net Income / Average Stockholders’ Equity (Stockholders’ Equity beginning of the year plus Stockholders’ Equity end of the year divided by two)

Causes for Material Changes from Period to Period of Financial Statements

Cash and Cash Equivalents (Note 3) reached P= 360.2 million, showing a decrease of 21% vis-a-vis the P= 456.1 million in 2010 mainly due to purchase of a parcel of lot.

Short-term Cash Investments of P= 560 thousand were money market placement with maturity of more than three months.

Receivables reached P174.8 million, indicating a 112% improvement versus the P82.3 million of December 2010 due to reclassification of accounts from non-current to current for the sale of CITP lot to AiO on installment in 2011.

Subdivided Land for Sale & Development stood at P= 269.9 million, representing an increase of 85% versus last year’s P= 145.8 million. The increase was mainly due to reclassification of purchase of newly acquired property at CITP from Land & Improvements to subdivided land for sale. Other Current Assets decreased by 100% in comparison to the P= 3.6 million in 2010 mainly caused by recognition of value-added tax (VAT) output and other various charges.

Property & Equipment-Net reached P= 1.2 million, 25% lower than last year’s P= 1.6 million. The decrease was mainly brought about by the depreciation of equipment.

Deferred Tax Assets showed a 6% decrease on account of deferred income from sold lot to AiO on installment in 2011 and provision for doubtful accounts.

Non-current Portion of Trade Receivables totaled P= 148.4 million showing a 30% (P= 65.1 million) decline due to reclassification of accounts from non-current to current.

Other Non-current Assets amounted to P1.4 million, lower by 68% versus December 2010’s P 4.4 million. The decline was mainly on account of the payment to various contractors during the period.

Accounts and Other Payables decreased by 31% from P= 115.4 million in 2010 to P= 79.6 million due to settlements made during the year.

Customers’ Deposits & Deferred Credits posted a 54% or P12.3 million increase mainly due to rental deposit from various e-Office locators.

Income Tax Payable amounted to P= 6.7 million, 26% lower vis-à-vis the December 2010 level of P= 9.2 million due to payment of income taxes for 2010.

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Customers’ Deposits and Deferred Credits amounted to P= 2.2 million, a 75% decline versus that of December 2010 due to reclassification of tenants’ deposit from non-current to current portion.

Retained Earnings showed a 16% or P= 58.5 million improvement as a result of the 2011 Net Income net of cash dividend paid in December 2011 that amounted to P= 112.8 million.

• Due to the Company’s sound financial condition, there was no foreseeable trend or event which could have material impact on its short-term or long-term liquidity.

• Funding would be sourced from internally-generated funds.

• There was no material commitment for capital expenditures other than those performed in the ordinary course of trade or business.

• There was no known trend, event, or uncertainty that has had or that was reasonably expected to have a material impact on the net sales or revenues or income from continuing operations.

• There was no significant element of income arising from continuing operations.

• There was no material change from period to period in one or more line items of the financial statements.

• There were no seasonal aspects that had a material effect on the financial condition or results of the Company’s operations.

• There were no known events and uncertainties that would trigger direct or contingent financial obligation that was material to the Company, including any default or acceleration of an obligation.

• There were no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationship of the Company with unconsolidated entities or other persons created during the reporting period.

Cebu Insular Hotel Company, Inc. (37% owned affiliate)

Cebu City Marriott Hotel. The company was incorporated in April 6, 1995 with the primary purpose of hotel development and management. In September 1996, the Company began work on the 303-room businessman’s hotel called the Cebu City Marriott Hotel. It is situated within the superblock of CBP and a walking distance from ACC and the nearby business establishments. The project is owned by Cebu Insular Hotel Company, Inc., a 63%-37% joint venture between Ayala Hotels, Inc. and the Company.

In January 1997, CHI and AHI announced the appointment of Marriott International as manager and operator of the hotel. Marriott International is one of the world’s largest hotel chains with over 2,900 establishments in its portfolio including properties in the United States and in 67 other countries. Cebu City Marriott Hotel was formally opened in February, 1998 amidst uncertainties in the tourism market. Even in its infancy, the hotel acquired a market niche with its own distinctive brand of service. It is fast becoming a preferred destination of transient businessmen and the favorite venue for conferences, parties and banquets. After a year of operation, the Cebu City Marriott Hotel ranked first in guest satisfaction surveys among Marriott hotels in Asia Pacific, and second worldwide. In 1999, Cebu City Marriott Hotel was cited as number one in market share among city hotels in Cebu and highest in revenue per available room, twice as much compared to its nearest competitors.

The company generated a total revenue of P423 million, P388 million and P410 million, for the years 2012, 2011 and 2010, respectively. Furthermore, during the same periods, the company posted a net income of P37.3 million, P34.4 million and P46.4 million, respectively.

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Cebu Leisure Company, Inc.

Cebu Leisure Company, Inc. was formed in 1994, engaged in business of ownership, management and leasing entertainment facilities. It was a joint venture company between Fun Corporation and Cebu Holdings Incorporated. The first venture was Glico’s Imaginature. It was registered with the Securities and Exchange Commission on January 31, 1994, with an authorized capital of P100 Million and a subscribed & paid up capital of P70 Million.

In its first year of operations as “Glicos Imaginature”, the business was not doing well. Fun Corporation sold its shares to Cebu Holdings Incorporated thus the latter gaining control over the company. Cebu Leisure Company, Inc. is a wholly owned subsidiary of Cebu Holdings Incorporated.

Cebu Leisure Company, Inc changed the concept of Glico’s Imaginature into an Entertainment Center. The first mall to have an entertainment (including cinema) and food center within its premises. The new Ayala Food & Entertainment Center was launched in August 18, 2001. It has definitely captured the market being the top destination for entertainment in Cebu. It redefined the lifestyle of the Cebuanos and made Ayala Center Cebu as the trail blazer not only in shopping but also in dining & entertainment.

In 2012, Active Zone and Food Choices posted growth in sales performance versus last year, which is 16% and 8%, respectively. Ayala Cinemas on the other hand posted an occupancy rate of 18.4% which is higher by 3%pts versus last year. Food Choices is due for renovation next year to enable it to complement to the mall’s new expansion.

For the period ended 31 December 2012, total revenue is P= 150.0 million showing a 15% growth versus last year. Net operating income is higher than last year by 18% due to the high financial performance of the Active Zone.

CBP Theater Management, Inc., founded on February 1, 1994 is still in the pre-operating stage.

(iii) Distribution Method;

The Marketing and Sales Department Ayala Land Sales, Inc.(ALSI), and its accredited real estate brokers handle the selling/distribution of the Company’s product under CHI-ALSI partnership.

(iv) Status of Any Publicly-Announced Product;

The company has no new products other than the above mentioned Cebu Business Park (CBP) and Cebu I.T. Park office lots, Sports Club Shares, Amara residential lots, 1016 Residences, Sedona Parc & Park Point Residences (Residential Condo), e-office, AITP Retail (The Walk), eBloc (BPO Office Building) and Avida Tower Cebu & Avida Riala Tower (Residential Condo).

(v) Competitive Business Condition;

CHI’s Position in Cebu Real Estate Market 2012

Market Assessment

The Philippine economy grew by +6.0% in 2012, exceeding previous market expectations and making the Philippines one of the fastest growing economies in Asia. The service sector remained a major contributor to growth, comprising almost half of the country’s total GDP. It grew by +7.4% in 2012, driven by the strong performances of subsectors such as Real Estate at +18.9%. The growing BPO industry and the steady inflow of Overseas Filipino remittances facilitated growth in the Real Estate sector as take-ups were high particularly for commercial and residential properties. Meanwhile, remittances from OFW’s reached USD 19.4 B last year, or +6.0% from the previous year.

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In Cebu, the number of IT-BPO companies is up by +24% from the previous years and now registers a total of 126 companies. Cebu continues to be one of the top outsourcing locations for IT and voice services in the world, mainly due to continued investments in infrastructure, improvements in policies, and effective efforts of key industry stakeholders. Tourism also continued to be resilient with the number of foreign visitors increasing by +8.0% from 2011, reaching 4.2 Mio.

Cebu also experienced resiliency in its tourism sector with the launch of its Tourism Roadmap (Sept 2012) and with the support of the National DOT campaign, “It’s more Fun in the Philippines”. Under the next five years, advocates of the tourism road map intend to enhance Cebu’s strengths as a prime tourism center in the country, develop new sustainable and authentic tourism products that cater to the current and new market demands, and create more linkages among local destinations and businesses with different products and services.

In 2012, Cebu achieved 1.7 M in tourist arrivals, +11% growth vs. the previous year. It also ranked as the 7th best island destination in Asia (based on the Conde Nast Traveler).

Also fueling the economy’s growth were consumer and government spending, both of which increased by +6.1% and +11.1% respectively. With strong domestic spending and preparations for the 2013 election underway, analysts perceive this bullish growth to be sustained in the year ahead.

CEBU RESIDENTIAL MARKET

Aside from the BPO and Tourism industries, the Cebu Real Estate industry remained robust in 2012, posting an all-time high in take-up and number of units launched in the Vertical market. The number of units launched in 2012 (7,188 Units) was +35% higher than the previous year. Take-up was also at an all time high at Php 15.3 B, ending the year at +23% vs. the previous year.

High growth was attributed to the growing BPO sector with a total of 17 new companies generating 11,000 new jobs, as well as the continuous interest of investors and major developers in Cebu’s property market and the steady inflow of OFW remittances, leading to rapid expansion of developments across and beyond the central business districts. Simultaneously, government projects, mainly infrastructure, and improvements in policies were continuously underway in support of the area’s actively growing economy. The data below illustrates the vertical real estate competitive market. • Park Point Residences from CHI - Ayala Land Premiere is a 255-unit tower with 41% sales take up. • CHI – Alveo, launched Solinea in Q4 under Ayala’s Mig-High brand and was recognized as the fastest selling condominium in Cebu, with 75% offtake out of its 591 units. • Sedona Parc, also from CHI – Alveo, was launched with 114 units and 83% sold out. • 1016 Residences from CHI - Ayala Land Premiere is a 109-unit tower with sales take up reaching 66% as of year end. • Primary Homes launched a series of condominiums since 2008 with Avalon being its first project having a sales offtake of 91%. The four hundred forty La Guardia condominium units is already 100% sold out while the 236-unit Mabolo Garden Flats launched in 2011 is only at 28% sales take up. Among its subdivision projects, only the 166-unit Woodcrest Residences did well at 93% offtake with the rest only generating a sales take up of 36% out of 306 units. • Grand Land launched 2 condominium projects, Grand Residences 1 and 2 along Archbishop Reyes Avenue with a total number of 496 units. Only Grand Residences 1 showed a considerable offtake at 84%. • Fuente Triangle launched Ultima Residences, Prime Residences, and City Loft in the years 2007 and 2008 with a total of 1,110 units. However, among the three projects, take up had been sluggish except for Ultima Residences with 99% of its units already sold out.

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• Gold Peach: (Gaisano) One Pavillion with two towers containing 550 units had a sales take up of 79% in both its North Tower and South Tower. City Soho is another condo with 135 units and sales take up of 44%. • Filinvest Land, Inc., launched three new multi-tower condominiums (One Oasis Bldg 4 with 647 units across four towers, SanRemo with 592 units across two towers, and Amalfi Oasis with 300 units across two towers) all in the South Reclamation Properties (SRP). One Oasis had a sales take up of 95%, 100%, 58% and 31% in its Towers 1 to 4, respectively. SanRemo sold out 98% of its units in Building 3 while Buildings 5,6, and 7 sales take up reached 85%, 54% and 88%, respectively. Amalfi Oasis had an offtake of 89% and 77% across it two towers. • AboitizLand also launched a new resort inspired condominium, Hanaya in Canduman, Mandaue City. It is a mid-rise building with 94 units and only 14% sold out by year end. Persimmon Studios was launched 3rd quarter of 2012 generating a total of 950 Persimmon units. A total of 89% of the existing Persimmon units were sold by year end while the sales take up of the newly launched Persimmon studios stood at only 13%. • Following the launch of 238-unit Calyx Center in Cebu IT Park, Innoland Development Corporation launched Calyx Residences with the same number of units in June 2011 in Cebu Business Park and experienced significant take up particularly amongst its studio units with reported sales of 100% and 95%, respectively. • Federal Land, Inc., launches yet another tower, Marco Polo Parkview with 396 units, also under the Marco Polo brand. It had a sales take up of 65%. Its first two towers, Marco Polo Residences and Two Residences had sold out 87% out of 171 units and 37% out of 270 units already. • Taft Properties was also active launching the tallest condominiums in Cebu, Horizons 101 Towers 1 and 2 in the heart of Mango Avenue. As of year end, 83% of Tower One 847 units had already been sold while only 3% of the 649 units from Tower 2 were sold. • Robinsons Land Corporation introduced another high rise condominium, Robinland Residences in April 2012 with 79% of its 90 units already sold. Azalea Place which is closely situated to Cebu’s main business district, has one tower with 407 units and a sales take up of 46%. Amisa Condominiums with a total number of 478 units had a sales take up of 73%. • New entrant Mega World launched the first of many planned residential developments in their township, Mactan Newtown Center. The 1,137-unit, multi-tower development, caters specifically to the Japanese retiree market and had a sales take up of 96%. • Amara under Cebu Holdings, Inc., is a 44-hectare project with its North Phase already 99% sold. Its new phase The Parks launched in September 2011, is at 20% take up. • Ma. Luisa Properties launched a new high end, 13.6-hectare residential subdivision, Heritage, in Jagobiao, Mandaue City late in 2011. Given its less desirable location, take up has been sluggish. • AboitizLand, Inc.’s successful project Ajoya continued to do well in 2011. Lot offer was sold out and house and lot offers did well in this 15.64-hectare project. .

Amara Amara, the only premier seaside residential community in Cebu, continues to remain unrivaled as competitors offer less attractive developments despite positioning themselves as high-end. The completion of the North Coastal Road and the Cansaga Bridge continued to benefit the project as more consumers make Amara their primary home now that it is made more accessible. Amara sells outs its North Phase in 2012. To sustain consumer demand, Amara launched its most spacious phase, “The Parks” at Amara, which to date is 19% sold.

CEBU COMMERCIAL (BPO/IT) The IT-BPO sector is seen as a long term growth driver. The industry will continue to offer opportunities and will carry on to contribute significantly to the nation’s economy year after year. The Philippine BPO industry targets to reach $ 25 Billion in export sales by 2016, and increase direct employment to at least 1 million. In Cebu, 17 new BPO companies opened in 2012, generating 11,000 new jobs. The industry now employs over 95,000 workers, +12% vs. last year. Cebu continues to be one of the top outsourcing locations for IT and voice services in the world, mainly due to continued investments in infrastructure, improvements in policies, and effective efforts of key industry stakeholders. Cebu is now the 8th best outsourcing destination in the world (based on the Study), an improvement in ranking from previous years

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OVERALL MARKET Industry experts forecast that the Residential demand will stay strong for all Real Estate segments. The unfulfilled demand brought by the housing backlog will continue to fuel residential sales in the country. Moreover, the low interest rate environment will also encourage greater take-up particularly for first home buyers.

Cebu’s property market is expected to remain strong as remittances from overseas workers are expected to remain resilient in 2013 and the IT-BPO industry is expected to strengthen as it expands beyond voice services. The expanding labor market brought about by growth in the IT-BPO and off-shoring industries will continue to fuel the demand for entry-level condominium units particularly for developments located within or near the business districts. Similarly, as the leasing market continues to gain ground, the demand for expatriate housing from the requirements of BPO companies will also rise. Such bright prospects will continue to encourage developers to introduce new and more attractive real estate products. Moreover, Cebu’s main attraction will continue to be its livability. As the province continues to progress, Cebu will offer a wider range of residential facilities and a good combination of urban and resort facilities, making it a desirable destination city for years to come.

Top performers in the Cebu real estate segment continue to be Ayala-CHI, ending the year as market leader in the vertical segment at 24% value share. Its solid performance was attributed to the strong take-up behind Ayala Land’s 3 brands, Ayala Land Premier, Alveo and Avida, which all launched new projects in 2012 and collectively garnering Php 3.7 B in sales.

Also performing well are new entrant, Mega World, which ended the year at 23% value share due to the strong market acceptance of its new township project in Mactan, and long time player Federal Land, which ended the year at third place with 12% share of the market.

CEBU MALL LEASING

Ayala Center Cebu is the centerpiece of Cebu Business Park, a fully-integrated shopping center. Built on a 9-hectare property, this shopping center is ideally situated at the crossroads of connecting avenues that link up with the rest of Cebu City.

Since its inception in 1994, Ayala Center Cebu has surged on with remarkable excellence in all areas of the business. Through the years, it has set forth groundbreaking innovations in shopping, dining and entertainment in this side of the Philippines. Ayala Center Cebu has become the preferred lifestyle destination in Cebu for its growing market. It is an agora for new products, a venue for community interaction and the trendsetter for new attitudes and lifestyle.

Ayala Center Cebu | 2012 Performance

For 2012, the retail industry had become more dynamic and competitive with the presence of big players announcing its major developments in Cebu. The local conglomerates and some corporations have also embarked on developing retail concepts and commercial play in their own real estate developments. But, the market remains upbeat and excited on the upcoming expansion of Ayala Center Cebu.

The retail market remains strong and growing especially within the primary trade area of Ayala Center Cebu. Across the ABC market, the mall continued to enjoy its no. 1 position in terms of market leadership with consistent and significant increase in shares from gated villages and office workers. This manifestation in terms of growth from office workers with higher incidence of mall visits can be attributed to the opening of more office buildings around Cebu Business Park and Cebu IT Park.

Retail is a growing industry fueled by the continuous growth in the BPO and Tourism industry. The tourist market recognized as a secondary target market for malls remained to be strong and was seen apparent also with Ayala Center Cebu, as more business hotels opened its doors in 2012 which locations are just a cross road away from Cebu Business Park. The same factor on convenient location remains to be reason considered by the guests of Cebu City Marriott Hotel which is seamlessly connected to Ayala Center Cebu.

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With the growing local economy, more retailers are coming in with new concepts in the market. The retail sector is seen to continue to grow in the coming years with the entry of new brands that are ready to set foot on Cebu through the expansion developments of the retail players.

Consumers will see heightened retail experience with more options in terms of retail offerings, mall developments sprouting in the area. Local players have managed to grow and become competitive in terms of customer service, store concept and merchandising. With the increasing competition, Ayala Center Cebu sets new ways to be differentiated and to stay relevant to the market it serves – making it the top of mind for shoppers.

Aggressive Retail Expansion in Cebu

It was a vibrant year for Cebu’s retail industry in 2012. Retail grew strong despite intense market competition. Strong overseas remittances, high spending power of young consumers, business expansions and sustained tourism arrivals bolstered growth in the industry despite continuing global challenges.

Malls have been mushrooming here in Cebu City and in the Cebu province. Still, a Cebuano economist predicted that in the next five years, more malls would be constructed on Cebu island, which stretches 225 km from north to south and had a total population of 4.17 million in 2010. The reason: Increase in spending power of those living and working in Cebu. The growth has come from remittances of overseas Filipino workers, business process outsourcing companies and tourism. Competition has forced industry players to identify and focus on their market.

For this year, several malls and retail stores opened; among them are SM Consolacion, Gaisano Capital SRP, Gaisano Talamban, One Pavilion Mall, Escario Central and Insular Square in Mandaue City. Entry of imported brands and the expansion of national players in Cebu were also noted in 2012; among them are 7Eleven, Ministop, BonChon Chicken and Chatime. Operators of these brands have expressed interest in growing their chain in Cebu in the coming years.

Another growth indicator for Cebu’s aggressive retail expansion is the current trend of a hypermarket-type of development. A hypermarket occupies an area of about 2,000 to 4,000 square meters. It has a grocery as its main highlight that is surrounded with stalls and booths rented by tenants. According to the president of the Philippines Allied Chamber of Real Estate Brokers and Licensed Salesperson (PhilACRE, Inc.), 64 new hypermarkets will be developed in Cebu. Currently, there are about eight (8) hypermarket players in Cebu namely: SM Hypermarket, Savemore, Fooda Saversmart, Shopwise, Insular Square, Collanade, H- Mall and Shang Mactan Town Center.

Major Players in Cebu’s Retail Industry

Ayala Center Cebu (ACC) has an existing GLA of 94,247sqm and is undergoing a P2-billion expansion, bringing in an additional GLA of 36,000sqm, which will be completed in 2013. In the case of ACC, it targets the A, B and C markets—office workers and those living in gated residences and villages. With this kind of market mix, ACC provides not just a mere shopping mall but a wide array of options on dining, shopping and relaxation. Condominiums, hotels and office buildings create a natural market for Ayala Center Cebu. Tourists and regional visitors are part of the second market.

SM City Cebu still competes head-on with Ayala Center Cebu. It has a total of 177,000sqm of GLA and caters to the A, B and broad C, D, E markets. SM recently opened this year its second mall in the province in the town of Consolacion in northern Cebu while construction of SM Seaside City at the South Road Properties is on-going. SM Prime Holdings Inc. is leasing a five-hectare property from Everjust Realty for its SM City Consolacion with a GLA of 57,000sqm and caters mostly to the broad C, D and E market.

J Mall opened in Mandaue City opened in November 2011 with a GLA of 70,000sqm and caters to the ABC market. New player J Mall does not rely on the local market to survive. It plans to take advantage of Cebu’s position as transportation, education, financial and commercial hub in the Visayas and Mindanao. This is the reason J Center—where J Mall is located—has decided to create an integrated development that addresses the needs of the MICE (meetings, incentives, conferences and exhibitions) market and tourists. J

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Center will also house a hotel, a theater, a convention center, service apartments and BPO offices. J Center is the first foray of Everjust Realty Development Corp. into the real estate business.

The Gaisano group has joined the bandwagon with its simultaneous construction of at least four malls in the province namely: Metro Gaisano Basak, Metro Gaisano Lapu-Lapu, Gaisano Grand Mall Cordova and Gaisano Grand Mall Dumajug. They are putting up their malls in the towns to corner the market there and prevent it from going to Cebu City proper. It recently opened Gaisano Capital SRP, Gaisano Talamban and One Pavilion Mall this year.

Cebu City alone has 16 malls. These are Banilad Town Center, Robinson’s Place Cebu, Robinson’s Cybergate, JY Square Mall, Elizabeth Mall, SM City Cebu, Ayala Center Cebu, Raintree Mall, Coco Mall, Colonade Mall, Gaisano Main, Gaisano Capital-South (which was gutted by fire in December last year), Gaisano Capital Tisa, Gaisano Grand Talamban, Gaisano Country Mall and Gaisano Metro Colon.

In Mandaue, there are six—Parkmall, Bridges Town Square, North Atrium, J Mall, Gaisano Pacific Mall and Gaisano Grand Mall.

The three malls in Lapu-Lapu City are Mactan Marina Mall, Gaisano Mactan Island Mall and the Gaisano Grand Mall.

Other malls are located in Talisay City (Gaisano Grand Fiesta Mall), Minglanilla town (Gaisano Grand Minglanilla), Consolacion (Fooda Mall), Carcar City (Gaisano Grand Carcar), Toledo City (Gaisano Grand Toledo and Metro Plaza Toledo), Balamban town (Gaisano Balamban), Bogo City (Gaisano) and Danao City (Gaisano Capital).

(vi) Sources and Availability of Raw Materials and the Names of Principal Suppliers;

The Company engaged the services of the following contractors for the development of its on-going projects. * Makati Development Corp. - Amara The Parks, 1016 Residences, Sedona Parc, Park Point Residences, Solinea and Cebu IT Park (eBloc, Avida Tower Cebu & Avida Riala Tower).

(vii) Dependence on One or Few Major Customers and Identify Any Such Major Customers;

The Company is not dependent on one particular segment or group of customers in the real estate market.

(viii) Dependence on One or Few Materials and the Names of Principal Suppliers;

The Company is not dependent on one or few suppliers/contractors. There are a number of eligible and reliable contractors in the country today which can serve the Company’s requirements.

(ix) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty, Agreements, or Labor Contracts;

The Company has engaged the services of various contractors or agencies for the maintenance of its projects. Among these are the security and janitorial services, with terms of one year for each contractor or agency.

(x) Need for Any Government Approval of Principal Products or Services.

The Company secures various government approvals such as the ECC, development permits, license to sell, etc. as part of the normal course of its business. CHI has obtained the following government approvals for the development of its projects:

1. Provisional Approval and Locational Clearance (PALC) - Office of the Mayor 2. Development Permit - Office of the Mayor 3. Environmental Compliance Certificate - DENR 4. License to Sell - HLURB - 21 -

(xi) Effects of Existing or Probable Government regulations on the Business;

The Company operates a material part of its business in a highly regulated environment. The introduction of inconsistent or unpredictable application of, or changes in, regulations may from time to time materially affect the Company’s operations.

(xii) Research and Development;

The Company has not allocated any amount for research and development for the last three (3) fiscal years.

(xiii) Cost and Effect of Compliance with Environmental Laws

The Company’s projects (CBP/Cebu I.T. Park) are designed to be environment-friendly commercial communities with amenities such as the Sewage Treatment Plant (STP), tree-lined avenues and parks. It is a standard operating procedure of any CHI project to comply with environmental laws, the cost of which is already incorporated in the total development cost of the project.

(xiv) Number of Employees;

The company has a total of eighty-six (86) employees as of year-end, four (4) of which are Ayala Land, Inc. employees seconded to Cebu Holdings, Inc. • Senior Personnel-(ALI seconded to CHI) 4 • Senior Personnel-CHI 17 • Supervisors 24 • Non Senior Personnel – Technical 35 • Non Senior Personnel – Clerical 6

There is no union nor CBA in the Company and its subsidiaries. Employees receive above industry compensation and benefits (ie. hospitalization, medical allowance, clothing, commodities check, 13th and 14th month and other government mandated benefits) plus performance bonus. Annual salary increases are also given. There have been no strike in the past three years nor threat to strike as there are no dispute between management and employees.

Enterprise-Wide Risk Management (ERM)

Risk management is an essential component in the strategic management of Cebu Holdings, Inc. Launched in 2009, the Enterprise-wide Risk Management Program of the Company continues to put in place robust risk management capabilities to protect and enhance shareholder value amidst a rapidly changing business environment.

The Framework

The ERM framework involves the systematic approach of identifying, managing, monitoring and reporting of its key risks. It takes into consideration the organizational structure, policy, scope and process methodology that enables it to identify and effectively manage key risks early on, while directing & highlighting the Organization to possible opportunities to more effectively achieve its business strategy. The scope of the ERM covers each step of the Value Delivery Chain, from the identification of the customer needs all the way to the satisfactory delivery of those needs with the complete contribution of each of the Business and Support Groups. The ERM Process

The ERM is an ongoing and cyclical process that requires involvement from each of the Business and Support Groups. The process is comprised of coordinated activities of identification, analysis, and treatment and monitoring of risks. To ensure that risk analysis and risk assessments are relevant and up-to- date, periodic risk refresher sessions with the executive management and with each of the business units

- 22 - will be conducted. These sessions aim to identify new and emerging risks on the account of changes in the external and internal operating environment.

ERM Activities

In 2011, a top-down driven, bottom-focused approach was adopted to update the ERM program of the Company. Facilitated sessions were conducted by the ERM committee, together with the various Business Groups, to review and update the existing list of identified key business risks, control strategies and improvement plans. Separate meetings with the Management Committee and the Audit and Risk Committee were held to present the outcomes of the facilitated sessions for their review, evaluation and approval.

In 2012, the updated ERM program was rolled-out to the rest of the organization. As a systematic and proactive process, the status of key risks, indicators and mitigation strategies were updated, monitored as a regular part of operations and reported on at least on a quarterly basis to determine whether these significant risks are appropriately and adequately addressed by the responsible Business Units.

Results of the monitoring of the ERM process were presented to the Audit & Risk Committee at least quarterly, in the Committee’s oversight capacity, to gain assurance that management is monitoring and managing risks within acceptable levels. As a result of periodic reviews with the Chief Risk Officer, the Organization has observed an increased awareness and integrated view of the corporate business strategy, its associated risks and the systematic mitigation approach for each. Management and key personnel have taken on an active role in the risk management processes, allowing for a more inclusive and proactive process, leading to risks being identified and addressed early both at the day to day tactical and management strategic level for 2012:

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1. Protecting the Balance Sheet through Financial Risk Management – The Company takes advantage of the current low –interest rate business environment by taking on debt, allowing the lock-in of favorable long-term rates to fund the construction of its leasing projects.

2. Optimization of Existing Assets - the company extends and enhances the usefulness of its existing assets through redevelopment. This is evident in projects such as the revitalization of the Cebu Park Districts, including the expansion of Ayala Center Cebu and the integrated planning of the residential developments in CBP and the upcoming redevelopment of the Cebu I.T. Park, to include retail and hotel operations.

3. Monitoring of Leading Market Indicators – industry reports, forecasts and Sales Reports are regularly prepared, summarized and presented to the Management & project teams as inputs to decision-making and operational processes. Market needs and preferences, particularly those of the local market, are identified and applied in the design of the Company’s products. This enables the company to address its market’s needs as evidenced by garnering twenty-four percent (24%) of the local vertical residential market share in 2012.

4. Continued Partnership with ALI on Development Projects – diversification of risk through a healthy and strong partnership with ALI, allowing the Company to use the strength of ALI (sales, construction, and property management) to expand its product portfolio through advance master planning, branding and knowledge of the market. This enables the Company to better coordinate its projects at a faster pace, enable the career advancement of its people and effectively manage costs. As of year-end 2012, twelve (12) projects have been launched with three (3) projects ongoing.

Structure, Roles and Functions

The Board of Directors, through its Audit & Risk Committee, continues to oversee the Enterprise-wide Risk Management program of the Company. The Chief Risk Officer (CRO) reports functionally to the Audit & Risk Committee, and administratively to the President and the Management Committee. The CRO heads the cross-functional ERM Committee and is primarily responsible for enabling the efficient and effective governance of the company’s key risks and controls. Integrated into their day to day operations, members of the cross-functional ERM Committee monitor the Company’s adherence to the risk management policies and procedures. The ERM Committee ensures that the Company’s processes are functioning within normal operating standards and the business is operating within acceptable risk metrics or limits. The Internal Audit Department, apart from functionally reporting to the Audit & Risk Committee, also provides administrative support to the Chief Risk Officer in the discharge of his ERM-related functions.

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Item 2. Properties (Part I, Paragraph (B) of SRC Rule 12)

a. Cebu Business Park , a 50-hectare property strategically located at the center of Cebu City. The CBP is bounded by Archbishop Reyes Avenue in the west, Juan Luna Avenue to the north, M. J. Cuenco Avenue to the east and Gorordo Avenue to the south. The business park is located approximately three (3) kilometers from residential subdivisions in the north, fifteen (15) kilometers from the Mactan International Airport, a kilometer from Fuente Osmeña, and is two (2) kilometers from the downtown commercial area. Because of its strategic location, Cebu Business Park’s major streets now serve as a vital part of City’s road network. The property is free from any lien and encumbrances. CBP was officially proclaimed as a PEZA-accredited IT Park pursuant to Presidential Proclamation 2053 (2010). According to the Special Economic Zone Act of 1995 (as amended in R.A. 7916), all investors and locators in PEZA-accredited IT Parks are now entitled to fiscal and non-fiscal incentives. Among the benefits of an IT Park are improvement in international competitiveness, increase in direct investments and capital formation, employment of job creation and an improved of quality of life.

b. Ayala Center Cebu (ACC) a shopping complex built on a nine-hectare property located at the heart of CBP and serves as the centerpiece of one of the largest and fully integrated business and commercial areas in Cebu City. This property sits on a lot with total area of 88,412 square meters which is subject to mortgage trust indenture. The carrying value (lodged under “Land and Improvements” and Investments in Real Properties” accounts in the consolidated balance sheets) amounted to P2.011 billion in 2012 and P2.060 billion in 2011.

c. The Company also developed the City Sports Club Cebu (CSCC), an exclusive urban resort equipped with state-of-the-art health and fitness equipment. This project is in partnership with ALI. In 2004, CSCC signed reciprocity agreements with American Club in Singapore and United Services Recreation Club in Hongkong.

d. Cebu I.T. Park- a 24-hectare mixed-use community that will host office and residential buildings, a hotel, as well as retail and recreational facilities. The property was proclaimed as a special economic zone by virtue of Proclamation No. 12 singed on 27 February 2001 by the President of the Republic. The property is situated at Salinas Drive, Lahug, Cebu City. Phase 1 covering 18 hectares was completed in 1999. Horizontal development on the remaining phase is ongoing. The property is free from any lien and encumbrances. The property is owned by Cebu Property Ventures Development Corporation (CPVDC), a 76% owned subsidiary of Cebu Holdings, Incorporated.

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e. eOffice One, a one-storey modular building (11,370 sqm), now hosts BPOs, I.T. firms, conveyor design and software research multinational companies.

f. The Walk. The Walk steadily remains to be a strong retail magnet in the ever-busy Cebu IT Park. Heavily frequented by BPO workers, young professionals, tourists, families, and sports enthusiasts, it has emerged from simply being a hangout haven into popular venue for showcasing recreational activities like sports, music, photography, and even luxury vehicle collections.

CHI is a leasee of three Condominium Units:

Condominium Units at Cebu Holdings Center: CHI leased two office units (Units 201 and 704) at Cebu Holdings Center located at Cardinal Rosales Avenue, Cebu Business Park, Cebu City.

• Unit 201 has a total area of 232.90 sqm. With monthly rental of P74,311.40 (Non-vat) payable in advance within the first five days of the month. The term of the lease shall be a period of five years, commencing from December 1, 2010 to November 30, 2015. This is may be renewed under the same terms and conditions except for an annual increase in the rental rate of 5%. CHI discontinued renting the unit since December 2012 due to the transfer of Projects Department to another CHI- owned unit. • Unit 704 has a total area of 93.13 sqm. with monthly rental of P56,678.74 (inclusive of VAT). The term of the lease is one (1) year, commencing on 1 January 2012 and expiring 31 December 2012. The lease maybe renewed under the same terms and condition except for the rental rate which is subject to re-negotiation and mutual agreement of both parties.

The company has no plan to acquire or plan to lease any property in the next 12 months.

Item 3. Legal Proceedings (Part I, Paragraph (C) of SRC Rule 12)

Cebu Holdings, Inc. and its subsidiaries and affiliate do not have any pending litigation in any court or administrative agency of the government. There are no material pending legal proceedings to which the property of the registrant or any of its subsidiaries or associate is the subject.

Item 4. Submission of Matter to a Vote of Security Holders

Except for the matters taken up during the Annual Meeting of Stockholders, there was no other matter submitted to a vote of security holders during the period covered by this report.

PART II - OPERATIONAL AND FINANCIAL INFORMATION

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters (Part II, Paragraph (A)(1) through (4) of SRC Rule 12)

(1) Market Information

Price Information of CHI Shares

The issued and outstanding shares of stock of the Company have been listed on the Makati Stock Exchange and the Manila Stock Exchange, predecessors of the Philippine Stock Exchange.

The following table shows the closing prices (in PHP) of Cebu Holdings, Inc.’s shares in the Philippine Stock Exchange for the year 2012 and 2011:

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2012 High Low Close 1st Quarter 8.70 8.38 8.38 2nd Quarter 6.00 5.55 5.55 3rd Quarter 5.18 5.16 5.16 4th Quarter 4.19 4.00 4.00

2011 High Low Close 1st Quarter 2.98 2.20 2.25 2nd Quarter 2.45 2.24 2.28 3rd Quarter 2.45 2.26 2.29 4th Quarter 2.70 2.33 2.50

The market capitalization of the Company as of end-2012 based on the closing price of P4.00/share was approximately P7.68 billion.

The price information as of the close of the latest practicable trading date, March 20, 2013, is P4.50 per share.

(2) Holders

There are approximately 4,498 registered holders of common equity security of the Company as of January 31, 2013. The following are the top 20 registered holders of the common equity securities of the Company:

Stockholder Name No. of Shares Percentage 1. Ayala Land, Inc. 956,241,738 49.80% 2. PCD Nominee Corp. (Filipino) 469,016,200 24.43% 3. PCD Nominee Corp. (Non-Filipino) 238,514,086 12.42% 4. First Metro Investment Corporation 186,695,363 9.72% 5. Makati Supermarket Corporation 3,013,265 0.16% 6. Laguna Properties Holdings, Inc. 1,875,000 0.10% 7. Alfonso Lao 1,750,000 0.09% 8. Jose C. Lee 1,000,000 0.05% 8. Jennifer C. Lee &/or Josephine C. Lim 1,000,000 0.05% 8. Jennifer C. Lee 1,000,000 0.05% 8. Josephine C. Lim 1,000,000 0.05% 9. Aurora E. Panlilio 937,500 0.05% 10. Vicente Jayme, Jr. 767,500 0.04% 11. Fermin P. Angcao 670,000 0.03% 12. Victor G. Sy 625,000 0.03% 13. Jose E. Suarez 618,750 0.03% 14. Maximo S. Uy 470,000 0.02% 15. Alejandra R. Malaya 385,000 0.02% 16. Pua Yok Bing 382,127 0.02% 17. Alberto Mendoza &/or Jeanie C. Mendoza 376,250 0.02% 18. Salvador Mariposa 375,000 0.02% 18 Mercedes A. Tuason 375,000 0.02% 18. Vincent Y. Tan 375,000 0.02% 18. Carolyn Chua 375,000 0.02% 19. Robert Tan 358,750 0.02% 20. Teodora Chuan &/or Irene C. Limtao 350,000 0.02%

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(3) Dividend

(A) Dividend History Stock Dividend (per share) Percent Record Date Payment Date 50% August 5, 1994 August 31, 1994 25% October 2, 1997 November 12, 1997

Cash Dividend (per share) Peso Amount Declaration Date Record Date Payment Date P0.05 20 September 2006 13 October 2006 27 October 2006 0.05 19 November 2007 04 December 2007 18 December 2007 0.07 08 October 2008 06 November 2008 28 November 2008 0.07 16 November 2009 01 December 2009 22 December 2009 0.07 27 October 2010 25 November 2010 17 December 2010 0.07 20 October 2011 18 November 2011 14 December 2011 0.10 22 November 2012 07 December 2012 21 December 2012

(B) Dividend Restrictions

There are no restrictions that limit the ability to pay dividends except those provided under Section 43 of the Corporation Code and other existing laws. To the extent feasible, it is the policy of the Company to declare periodically a portion of its unrestricted retained earnings as dividends to shareholders, either in the form of stock or cash, or both. The payment of dividends in the future will depend on the Company’s earnings, cash flow, investment program and other factors.

(4) Recent Sales of Unregistered Securities

The company has no unregistered securities nor has engaged in any sale of unregistered securities for the period covered in this report.

Item 6. Management’s Discussion and Analysis or Plan of Operation. (Part III, Paragraph (A) of SRC Rule 12)

2012 vs. 2011 Results of Operations

Cebu Holdings, Inc. registered consolidated revenues of P= 1.633 billion exceeding its 2011 performance by 13%. The improvement in revenue was mainly on account of the higher rental income from Ayala Center Cebu, sale of condominium units (1016 Residencies, Sedona Parc, Park Point Residences & Avida Riala Tower) and interest and other income. Net income reached P= 441.3 million, 4% higher compared to P= 424.3 million last year.

Consolidated revenues were derived from commercial land sales, lease income from commercial center, sale of Amara residential lots, condominium units and sports club shares. Other revenue contributors are rental from e-office & The Walk and sale of condominium units from Avida Riala Tower, projects of 76% owned subsidiary - Cebu Property Ventures & Development Corporation. The company also derived income from Interest earnings from short-term investments and interest and other income.

Earnings before Interest and Taxes (EBIT) showed a slight increase from P 385.0 million in 2011 to P386.3 million in 2012.

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Stock price increased from a closing of P2.50 per share in 2011 to P4.00 per share in 2012 resulting in a total shareholder return (TSR) of 62.78%.

In 2012, CHI declared cash dividend from the unappropriated retained earnings of the company as of December 31, 2011, of P0.10 per share to all shareholders as of record date December 7, 2012 and paid on December 21, 2012.

Rental Income

Ayala Center Cebu as the ultimate lifestyle icon in Cebu.

The company’s commercial business hinges on the fact that Cebu is one of the major retail and IT destinations in the South, with burgeoning that cater to IT and BPO locators.

As more office buildings are constructed in Cebu’s premier district – Cebu Business Park and Cebu I.T. Park, the steady incline of mall visits from the working segment is expected to persist. Aside from the office buildings, more hotels have opened its doors just within the vicinity of the mall thereby increasing Ayala Center Cebu’s secondary target – the tourist market.

In an effort to continuously complement the mall in terms of retail concepts, there were stores that have been relocated and put in place where they can be easily found by the mall’s target markets.

Cebu Leisure Company, Inc. (CLCI-a wholly owned subsidiary)

The Walk posted total revenues of P= 21.5 million, slightly lower than last year of P= 21.8 million. As of December 2012, lease occupancy is 83.2%.

Rental from e-Office contributed a total revenues of P= 29.5 million, a 56% decline compared to the P= 66.4 million in 2011. The decrease was due to management decision not renew lease contracts at e-office to allow the redevelopment of the area to commence in 2013.

Real Estate Income

Commercial Land Sales registered the sale of two (2) CBP lots with a total area of 2,334 sqm. contributing P= 120.2 million in revenue (net of the P= 3.6 million discounting loss). Compared to last year’s figure of P= 131.3 million, revenue is lower by 8%. In 2011, there were two (2) lots (1 CBP and 1 CITP) sold.

Amara’s current year sales of two (2) lots with prior years’ sales computed based on percentage of completion brought in total revenue of P= 19.2 million, which is 70% lower than last year’s P= 63.6 million due to lower lots sold. Percentage of completion at Amara, The Parks, as of December 2012 stood at 77.00%.

1016 Residences registered total rental revenues of P= 94.8 million from the sale of two residential condominium units and prior year’s sale computed based on percentage of completion. Compared to last year’s figure of P= 36.0 million, it registered an increase of 163%. Percentage of completion as of December 2012 stood at 50.88%.

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From the sale of one (1) unit and four (4) parking slots and prior year’s sale computed based on percentage of completion, Sedona Parc posted total revenues of P= 56.3 million, which is 270% higher than last year’s P= 15.2 million. As of end of 2012, percentage of completion was at 79.94%.

Park Point Residences contributed total revenues of P= 14.6 million from the sale of twenty-eight (28) condominium units computed based on percentage of completion. Percentage of completion as of December 2012 stood at 5.00%. Total of seven (7) units were reserved during the period.

Revenue from the sale of twelve (12) condominium units at Avida Riala Tower stood at P= 3.9 million computed based on percentage of completion. Avida Riala was already 15.50% completed as of December 2012. Total of twenty-three (23) units were reserved for the period.

Sports Club Shares registered P= 660 thousand in total revenue.

The company also generated interest and other income primarily from the sale of services, well placed short-term investments, water & utility charges and penalty imposed to a locator due to construction violation amounting to P= 298.5 million, exceeding last year’s level of P= 249.6 million by 20%.

Equity in net earnings of affiliates (Cebu Insular Hotel Co., Inc., Asian I-Office Properties, Inc. (AiO) and Solinea, Inc., reached P= 73.9 million, 159% higher compared to the previous year’s level of P= 28.5 million.

Financial Condition

The company’s balance sheet remained strong as its total assets stood at P= 9.749 billion as of December 31, 2012. Current assets stood at P= 3.742 billion, P= 1.864 billion of which is cash. It has current ratio of 1.37:1 compared to 2.28:1 in December 2011. Total liabilities as of the period stood at P4.467 billion, P= 2.728 billion of which is current. Debt-to-equity ratio stood at 0.90:1 compared to 0.45:1 in December 2011. Bank Debt to equity ratio stood at 0.37:1 compared to December 2011 of 0.20:1.

Key Performance Indicators

The table below shows the comparative key performance indicators of the Company:

Indicators 2012 2011 Current Ratio 1 1.37: 1 2.28: 1 Total Debt to Equity Ratio 2 0.90: 1 0.45: 1 Bank Debt to Equity Ratio 3 0.37: 1 0.20: 1 Return on Assets (ROA) 4 5.23% 6.44% Return on Equity (ROE) 5 9.14% 9.31%

Cause for Material Changes from Period to Period of the Financial Statements

Increase in consolidated revenues (real estate & rental income) by 8% or P96.0 million: • Sale of 2 CBP lots with a total area of 2,334 sq. m. to Ahava Realty & Development Corp. & Contempo Property Holdings, Inc. • Increase in revenue from residential condo (1016 Res, Sedona Parc, Park Point Res & Avida Riala Tower) • Increase in revenue from Sports Club Share

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• Increase in rental income from ACC • Increase in rental and theater revenue from Cebu Leisure Company, Inc. • Decrease in revenue from residential lot (Amara) • Decrease in rental income from The Walk • Decrease in rental income from e-office building

Increase in interest and other income by 20% or P48.9 million: • Primarily due to sale of services amounting P55 million.

Increase in equity in net earnings of associates by 159% or P45.4 million • Cebu Insular Hotel Co., Inc. (Marriott Hotel), Asian I-Office Properties, Inc. & Solinea’s income improved during the year.

Increase in real estate cost and expenses by 19% or P158.8 million • Due to the cost from commercial lots sold during the year • Rising costs of direct operating expenses (ex. Light and power, water charges, repairs and maintenance, aircon, security & janitorial, dues & fees, ad & promo and other utilities). • Higher interest expense due to availment of additional bank loans

Increase in cash and cash equivalents by 54% or P649.8 million • Collection of receivables from Ayala Center Cebu (ACC) and The Walk. • Loan proceeds during the period. • Collections from sale of Commercial & Amara lots and condo units.

Increase in accounts receivable by 38% or P150.3 million • Due to sale of condo units and residential (Amara) lots. • Due to receivables from Ayala Center Cebu merchants. • Due to advances from various contractors.

Increase in Inventories by 27% or P270.8 million • Primarily due to Inventory of Amara, The Parks lots. • Mainly due to the company’s investment in the development of Park Point Residences and increase in percentage of completion of 1016 Residences and Sedona Parc projects.

Increase in other current assets by 339% or P60.9 million • Due to booking of various taxes (Vat Input, Creditable Withholding Tax and Others).

Decrease in non-current accounts receivable by 6% or P32.8 million • Mainly due to reclassification from non-current to current accounts

Decrease in deferred tax assets of 10% or P941 thousand o Pertains to the unrealized gain on intercompany sale of CPVDC’s lot to AiO and interest accretion.

Increase in property and equipment by P9.8 million or 25% • The increase was primarily due to purchase of new office equipments.

Increase in investment in associates by 12% or P82.9 million • The increase was mainly due to equity in net earnings during the period.

Increase in investment properties by P1.465 billion or 46% • Primarily due to construction in progress of Ayala Center Cebu-Phase 2b project.

Decrease in other non-current assets by 40% or P34.7 million • Mainly on account of deferred VAT input and from affiliate-Cebu Insular Hotel Company (CIHC) dividends receivable.

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Increase in accounts and other payables by P1.392 billion or 213% • Mainly due to various accruals of operating expenses (additional estimated liability for the new projects), contractor’s payable and retention payable.

Increase in current portion of long term debt by P108.3 million or 197% • Reclassification of non-current to current.

Decrease in income tax payable by 56% or P20.3 million • Mainly due to payment of quarterly income tax and lower creditable withholding tax during the period

Increase in other current liabilities by 25% or P100.2 million • Primarily to due to various deposits from condo unit buyers and escalated rates & various deposits made by new merchants of Ayala Center Cebu.

Increase in long term debt by P786.1 million or 88% • Mainly due to additional availment of loan during the period.

Increase in deferred tax liabilities by 16% or P4.5 million • The increase was primarily brought about by additional provision deferred tax during the period.

Decrease in other non-current liabilities by 41% or P5.2 million • Mainly on account of rental deposits from the new merchants of Ayala Center Cebu & the Walk.

Retained Earnings showed a growth of P249.3 million as a result of the 2012 Net Income net of P192 million cash dividend.

• Due to the Company’s sound financial condition, there is no foreseeable trend or event which may have material impact on its short-term or long-term liquidity.

• Funding will be sourced from internally-generated funds and bank loans.

• There is no material commitment for capital expenditures other than those performed in the ordinary course of trade or business.

• There is no known trend, event or uncertainty that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations.

• There is no significant element of income arising from continuing operations.

• There have not been any seasonal aspects that had a material effect on the financial condition or results of the Company’s operations.

• There were no known events and uncertainties that will trigger direct or contingent financial obligation that is material to the company, including any default or acceleration of an obligation.

2011 vs. 2010 Results of Operation

For the period ended December 2011, Cebu Holdings, Inc.’s consolidated revenue reached P= 1.443 billion, 5% lower compared to P= 1.522 billion of the same period last year. Net income of P= 424.3 million increased versus the 2010 level performance by 4%. The decrease in revenue was mainly on account of the higher residential and commercial lots in 2010.

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Consolidated Revenue was derived from commercial land sales, lease income from commercial center, sale of Amara residential lots, and condominium units from 1016 Residencies & Sedona Parc. Other revenue contributors were the office lots from Cebu IT Park (formerly Asiatown IT Park) and rental from e- office & The Walk, projects of 76% owned subsidiary Cebu Property Ventures & Development Corporation. The Company also derived income from interest earnings from short-term investments, interest, and other income.

Earnings before Interest and Taxes (EBIT) posted a 1% decrease from P 388.6 million in 2010 to P385.0 million in 2011.

Stock price closed at P2.50 per share in 2011.

In 2011, CHI declared cash dividend from its unappropriated retained earnings as of December 31, 2010 of P0.07 per share to all shareholders as of record date November 18, 2011 and paid on December 14, 2011.

Rental Income

Ayala Center Cebu as the ultimate lifestyle icon in Cebu.

Ayala Center Cebu has continuously offered the most unique and rewarding shopping and dining experiences to both its local and tourist patrons.

The mall fuses popular and fast-fashion international and local brands, a wide selection of established to home-grown dining concepts, as well as high-energy entertainment outlets in varied ambient settings, making each visit a delightful treat.

The verdant landscaping and refreshing water features provide a dramatic counterpoint for bonding, perfect for unwinding and celebrating blockbuster and important events.

The mall further captivates the hearts of the Cebuanos with its showcase of world-class Ayala signature shows and engaging local events. It is a destination favored by local and foreign guests strengthened by tourist-oriented programs reflecting the genuine Cebuano hospitality.

With the leasing program that resulted to the accelerated opening of big spaces such as Payless, People ‘R People, and Terranova, it further improved the lease occupancy of the mall while providing the needs of the target markets.

For the period ended December 31, 2011, Ayala Center Cebu posted total revenue of P= 699.8 million. This was 11% higher than last year due to higher lease occupancy. Net operating income was 13% higher than same period of last year.

Cebu Leisure Company, Inc. (CLCI-a wholly owned subsidiary)

The Active Zone maintained its significant sales per square meter growth at 9% versus last year, which could be attributed to its unique sports and wellness merchandise offerings. Food Choices also realized a 15% increase against last year. Ayala Cinemas’ occupancy rate of 15.8% was lower by 3% points versus last year’s rate.

For the period ended December 31, 2011, the total revenue was at P= 130.4 million. This was 7% higher than last year’ total revenue. The net operating income was also 21% higher than last year’s net operating income due to the high financial performance of the Active Zone.

The Walk contributed a total revenue of P= 21.8 million, which indicated a 12% increase from the P= 19.5 million total revenue of last year. Lease occupancy for the period was at 98.3%.

Revenue generated from e-Office reached P= 66.4 million, which was 37% higher than last year’s P= 48.5 million.

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Real Estate Income

Commercial Land Sales posted the sale of one (1) Cebu Business Park lot with an area of 1,573 square meters and one (1) Cebu IT Park lot with a total area of 3,304 square meters, which contributed P= 131.3 million in revenue (net of the P= 3.7 million discounting loss). Compared to last year’s figure of P= 174.4 million, revenue was lower by 25%. During the same period last year, there were three (3) lots (2 Cebu Business Park and 1 Cebu IT Park) sold.

Amara revenue stood at P= 63.6 million derived from the current year’s sale and the previous year’s sale computed based on percentage of completion. Compared to last year’s figure of P= 272.9 million, it registered a decrease of 77% due to deferred launch of the next phase in Amara.

1016 Residences & Sedona Parc, residential condominium projects of the Company in partnership with ALI and Alveo Land Corp. registered P= 51.2 million in total revenue.

The Company also derived interest and other investment income amounting to P= 249.6 million, which was 14% higher than previous year’s P= 219.3 million.

Associates Cebu Insular Hotel Co., Inc. and Asian I-Office Properties, Inc. (AiO) contributed P= 28.5 million in equity in net earnings, indicating a 2% decrease compared to P= 29 million net earnings of the previous year.

Financial Condition

The Company’s balance sheet remained strong as its total assets stood at P= 7.131 billion as of December 31, 2011. Current assets stood at P= 2.613 billion, P= 1.217 billion of which was cash. It has current ratio of 2.28:1 compared to 1.84:1 ratio in December 2010. Total liabilities as of the period stood at P2.103 billion, P= 1.148 billion of which was considered current. Debt-to-equity ratio stood at 0.45:1 compared to 0.30:1 in December 2010. Bank debt to equity ratio stood at 0.20:1 compared to 0.04:1 of December 2010.

Key Performance Indicators

The table below sets forth the comparative key performance indicators of the Company:

Indicators 2011 2010 Current Ratio 1 2.28: 1 1.84: 1 Total Debt to Equity Ratio 2 0.45: 1 0.30: 1 Bank Debt to Equity Ratio 3 0.20: 1 0.04: 1 Return on Assets (ROA) 4 6.44% 6.88% Return on Equity (ROE) 5 9.31% 9.49%

1Current Assets / Current Liabilities 2Total Liabilities / Stockholders’ Equity 3Total Bank Debt / Stockholders’ Equity 4Net Income / Average Total Assets (Assets beginning of the year plus Assets end of the year divided by two) 5Net Income / Average Stockholders’ Equity (Stockholders’ Equity beginning of the year plus Stockholders’ Equity end of the year divided by two)

Cause for Material Changes from Period to Period of the Financial Statements

Decline in consolidated revenues by 9% or P108.9 million: • Decline in commercial lots revenue due to lower number of lots sold in 2011 • Decline in revenue from residential project (Amara) • Increase in revenue from residential condo (1016 and Sedona Parc)

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• Increase in rental income from Ayala Center Cebu • Increase in rental income from The Walk • Increase in rental and theater revenue from Cebu Leisure Company, Inc. • Increase in rental income from e-office building

Increase in interest and other income by 14% or P30.3 million: • Mainly due to interest income from money market placement and charges (water and sewer) from various locators.

Decrease in equity in net earnings of associates by 2% or P.5 million • Cebu Insular Hotel Co., Inc. (Marriott Hotel) lower income during the year.

Decrease in real estate cost and expenses by 11% or P106.5 million • Mainly due to lower commercial and residential lots sold in 2011.

Increase in cash and cash equivalents by 32% or P294 million • Collections from sale of commercial and Amara lots, and condominium units. • Collection of receivables from Ayala Center Cebu and The Walk. • Loan proceeds during the period.

Increase in receivables by 49% or P128.6 million • Due to sale of commercial (Cebu Business Park and Cebu IT Park) and residential (Amara) lots, and condominium units. • Due to reclassification of accounts from non-current to current for the sale of Cebu IT Park lot to an affiliate Asian I-Office Properties, Inc. (AiO) on installment in 2011.

Decrease in subdivided land for sale and development by 7% or P43.1 million • Mainly due to sale of two (2) commercial lots at Cebu Business Park and Cebu IT Park.

Increase in condominium units for sale by 100% or P36.4 million • Mainly on account of the Company’s investment in the development of 1016 Residences and Sedona Parc. These are new residential condominiums project of CHI in partnership with ALI and Alveo Land Corporation.

Increase in other current assets by 34% or P4.6 million • Due to booking of broker’s commission and various taxes (business tax, creditable withholding tax, prepaid tax, and other taxes).

Decrease in deferred tax assets of 12% or P1.4 million • Pertains to the unrealized gain on intercompany sale of CPVDC’s lot to AiO and interest accretion.

Decrease in property and equipment by P3.6 million or 6% • The decrease was primarily due to depreciation of equipment.

Increase in investment in associates by 75% or P296.8 million • The increase was mainly due to investments in Solinea Inc. and equity in net earnings during the period.

Increase in other non-current assets by 295% or P288.5 million • Primarily on account of advances to contractors and deferred value-added tax input.

Decrease in accounts and other payables by P19.5 million or 2% • Mainly due to settlements made during the period.

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Increase in current customers’ deposits and deferred credits by 14% or P38.5 million • Primarily to due to escalated rates and various deposits made by new merchants of Ayala Center Cebu and The Walk.

Increase in income tax payable by 37% or P9.8 million • Due to provision for 2011 income tax.

Decrease in current portion of long term debt by P55 million or 50% • This is caused by the payment made during the period amounting to P55 million.

Decrease in customers’ deposits and deferred credits by 58% or P17.9 million • Mainly on account of rental deposits from the new merchants of Ayala Center Cebu and The Walk.

Decrease in deferred tax liabilities by 21% or P7.5 million • Primarily brought about by unrealized gain on Amara lots during the period.

Increase in long term debt by P840.7 million or 1,529% • Mainly due to additional availment of loan during the period.

Retained Earnings showed a growth of P289.9 million as a result of the 2011 Net Income net of P134 million cash dividend.

• Due to the Company’s sound financial condition, there is no foreseeable trend or event which may have material impact on its short-term or long-term liquidity.

• Funding will be sourced from internally-generated funds and bank loans.

• There is no material commitment for capital expenditures other than those performed in the ordinary course of trade or business.

• There is no known trend, event, or uncertainty that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations.

• There is no significant element of income arising from continuing operations.

• There have not been seasonal aspects that had a material effect on the financial condition or results of the Company’s operations.

• There is no known events, and uncertainties that will trigger direct or contingent financial obligation that is material to the Company, including any default or acceleration of an obligation.

• There is no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationship of the Company with unconsolidated entities or other persons created during the reporting period.

Item 7. Financial Statements (see annex audited financial statements and supplementary schedules)

The consolidated financial statements and schedules listed in the accompanying Index to Financial Statements and Supplementary Schedules are filed as part of this Form 17-A.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure (Part III, Paragraph (B) of SRC Rule 12)

There are no changes in and disagreements with accountants on accounting and financial disclosures.

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PART III - CONTROL AND COMPENSATION INFORMATION

Item 9. Directors and Executive Officers of the Registrant (Part IV, Paragraph (A) of SRC Rule 12)

(1) (A-E) Directors and Executive Officers

Board of Directors Executive Committee Members Antonino T. Aquino Chairman Emilio J. Tumbocon - Chairman Francis O. Monera President Antonino T. Aquino Maria Theresa M. Javier Treasurer Francis O. Monera Antonio S. Abacan, Jr. Maria Theresa M. Javier Emilio J. Tumbocon Jaime E. Ysmael Jaime E. Ysmael Enrique L. Benedicto* Fr. Roderick Salasar, Jr., SVD* Hernando O. Streegan* * Independent Directors

BOARD OF DIRECTORS

The members of the Board of Directors are elected at the general meeting of stockholders, who shall hold office for the term of one (1) year or until their successors shall have been elected and qualified. The following are the directors and officers’ brief description of their business experiences during the past five years.

Antonino T. Aquino, Filipino, 65, has served as Chairman of CHI since 2009. He also holds the following positions: Senior Managing Director of Ayala Corporation; Chairman of Alveo Land Corp., Cebu Property Ventures & Development Corp., Ayala Hotels, Inc., Makati Development Corp., North Triangle Depot Commercial Corp. and Station Square East Commercial Corp.; Presidentof Fort Bonifacio Development Corp., Alabang Commercial Corp., Accendo Commercial Corp., Aurora Properties, Inc., Ceci Realty, Inc., and Vesta Property Holdings, Inc.; Director of Manila Water Company, Inc. He also serves as a member of the board of various corporate social responsibility foundations such as Ayala Foundation, Inc., Makati Commercial Estate Association, Inc., Hero Foundation and Bonifacio Arts Foundation, Inc. He also served as President of Manila Water Company, Inc., and Ayala Property Management Corporation and a Business Unit Manager in IBM Philippines, Inc. He was named “Co-Management Man of the Year 2009” by the Management Association of the Philippines for his leadership role in a very successful waterworks privatization and public-private sector partnership.

Francis O. Monera, Filipino, 58, has served as director of Cebu Holdings, Inc. and Cebu Property Ventures & Development Corp. since April 2006. He is currently the President of CHI and CPVDC. He was the Chief Operating Officer of CHI before he was elected president of the Company effective January 1, 2007. He also holds the position of Vice President of Ayala Land, Inc. Before joining ALI, he was the senior AVP/Corporate Controller of Philippine National Construction Corporation. He served as president of the Cebu Chamber of Commerce and Industry from February 2006 to 2008. He is currently the vice president for Visayas of Philippine Chamber of Commerce and Industry.

Antonio S. Abacan, Jr., Filipino, 69, has served as Director of CHI since November 1993. Concurrently, he is the Vice Chairman of the Metrobank Group of Companies. Involved in the management of all allied and non-allied businesses of the Group, he chairs companies within the Group such as Toyota Financial Services (Phils) Inc. (TFS), Sumisho Motor Finance, Manila Medical Services Inc., Circa 2000 Homes,Inc. and Manila-GT Medical Center. He holds other significant positions such as Chairman of the Advisory Board of Metropolitan Bank & Trust Company, Executive Vice Chairman of Global Business Power Corporation and Vice Chairman/Director of Panay Energy Development Corporation. He likewise sits at the Board of Cebu Energy Development Corporation, Panay Power Corporation, Panay Power Holdings,

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ARB Power Ventures, Inc., GBH Power Resources, Inc., Global Formosa Power Holdings, Inc and Global Eneregy Supply Corporation. He is also a member of the Advisory Boards of First Metro Investment Corp., Philippine AXA Life Insurance Corporation, Metrobank Foundation, Inc., Toyota Manila Bay Corporation and Toyota Cubao, Inc. and a member of the Board of Trustees of Manila Tytana Colleges and GT Metro Foundation. He also holds key positions with various affiliate institutions. He is the Chairman of the Committee on Banking of the Philippine Chamber of Commerce and Industry, Director Corporate Secretary and Treasurer of the LGU Guarantee Corporation and a member of the Board of Governors of Makati Commercial Estate Association (MACEA). For his personal accomplishments, he was awarded The Outstanding Filipino Award (TOFIL) for Banking by the Philippine Jaycee Senate in 2008 and Huwarang Anak ng Bulacan/Outstanding Bulakeno Achievers by Club Bulakeno, Inc. in 2011. He was also the recipient of the 1987 Outstanding Alumnus of Mapua Institute of Technology, 1999 Communications and Leadership Award by Toastmasters International, 2006 CEO Excel award given by the International Association of Business Communicators (IABC) and 2007 Outstanding Alumnus Award of the Far Eastern University.

Ma. Theresa M. Javier, Filipino, 42, has served as a director of Cebu Holdings, Inc. as of July 2012. She is the Group Head of the Asset Management and Trust Group of Bank of the Philippine Islands. She also holds the following postions: Director of BPI Investment Management, Inc., McCann World Group Philippines, Inc., Fintec Holdings, Inc., Phase II Holdings, Inc., Roxas Land Corporation and various mutual fund companies of BPI (ALFM Peso Bond Fund, ALFM Dollar Bond Fund, ALFM Euro Bond Fund, ALFM Money Market Fund, ALFM Growth Fund, and Philippine Stock Index Fund). She is also a member of the Board of Senior Advisers of the Fund Managers Association of the Philippines and the Trust Officers Association of the Philippines and served as President of both associations. She graduated cum laude from the University of the Philippines Los Banos in 1990 with a B.S. Economics degree and finished her Masters Degree in Economics in 1994 at the University of the Philippines School of Economics Diliman. She took up the CFA Institute Investment Management Workshop at the Harvard Business School in Boston, Massachusetts in 2006 and completed the Advanced Management Program also at the Harvard Business School in 2010.

Enrique L. Benedicto, Filipino, 71, has served as an independent director of CHI since 2003. He is currently the honorary consul of Belgium. His other regular directorships include: chairman of Mabuhay Filcement, Inc., Enrison Land, Inc., Enrison Holdings, Inc., Berbenwood Industries, Inc., Benedict Ventures, Inc., Vice-Chairman of Bernardo Benedicto Foundation, Inc. He received the following awards: ‘Officer in the Order of Leopold II’ by his Majesty Baudowin King of the Belgians; ‘Officer in the Order of Leopold’ by His Majesty King Albert II of the Kingdom of Belgium, the highest award that can be given to civilians, Belgian or non-Belgian; Garbo sa Sugbu Awardee given by the Province of Cebu for his outstanding achievement in International Relations as Honorary Consul of Belgium; Most Outstanding Cebuano Citizen per Cebu City Council Resolution dated February 18, 1991, Great Cebuano Award conferred by the Province of Cebu, Sugbuanong Kumintaristang Nagpakabana (SUKNA), Kapisanan Ng Mga Brodkaster Ng Pilipinas (KBP) and Mandaue Chamber of Commerce and Industry, Inc; ‘Most Outstanding Alumnus’ award given by the University of San Jose-Recoletos.

Fr. Roderick C. Salazar Jr. SVD, Filipino, 65, has served as an independent director of CHI since 2005. He is currently the chairman of the board of trustees of St. Jude Catholic School in Manila and of St. Agnes Academy in Legazpi City. He is a member of the board of trustees of St. Paul University in Dumaguete City, Cebu Technological University, and Center for Educational Measurement (CEM). He is the regional secretary for Asia, and the president of the Office Internationale de l’Enseignement Catholique (OIEC) while concurrently serving as the executive secretary of the Office of Education and Faith Formation of the Federation of Asian Bishops Conferences (FABC- OEFF). He worked at the University of San Carlos for 34 years in various academic and administrative offices. He was USC president for twelve years (four 3-year terms) between 1987 and 2008. From 1992 to 2008, he was also president of the Catholic Educational Association of the Philippines (CEAP). Before being elected OIEC president in October 2011, he was vice president for Asia of the same organization. Outside USC, he was member of various groups like: FILIPINO, Inc. (Filipino Institute for the Promotion of Integrity and Nobility); San Carlos Community Development Foundation; Divine Word Educational Association (DWEA); Philippine Accrediting Association of Schools, Colleges, and Universities (PAASCU); Private Education Advisory Council (PEAC); Word Broadcasting Corporation. As CEAP president, he served three terms as chair of the Coordinating Council of Private Educational Associations (COCOPEA). He has also been chairman of the board of trustees of

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St. Scholastica’s Academy in Talisay City, Cebu; Divine Word University (now Liceo del Verbo Divino) in Tacloban City; and Divine Word College of Tagbilaran (now Holy Name University). He was a member of the board of trustees of St. Paul University in Tuguegarao, and, at different times, of the St Paul Colleges in Pasig, Iloilo, and Surigao, as well as of the Visayas Cluster of the Daughters of Charity Schools. He was a board director of People’s Television Network (PTV4), and of First Metro Asset Management, Inc. He has two honorary Doctorates in the Humanities, the first given in March 2010 by St Paul University, Tuguegarao City; the second, awarded by Aquinas University, Legazpi City on April 8, 2011. On August 14, 2010 he received the Papal Award Croce Pro Ecclesia et Pontifice for his years of service to Catholic Education.

Hernando O. Streegan, Filipino, 78, has served as an Independent Director of CHI since 2006. His other significant positions include: regular Director of Charmaine Corp., Cebu City Youth Center, Inc.; chairman of the Cebu Council-Boy Scouts of the Phils.; former president of the Cebu Chamber of Commerce & Industry and Casino Español de Cebu; former governor of the Philippine South District of Kiwanis International; former charter president of the Philippines Foundation, Inc. and member of the Kiwanis Club of Cebu. He was the chief executive officer of Rhine Marketing Corporation before his retirement on August 31, 2010. He was chosen as one of the Outstanding Council Chairman of the Boy Scouts of the Philippines; he was also awarded as one of the Outstanding Families of Cebu City and given the Signum Commercio Meriti of University of Cebu. In 2013, he will receive the Silver Tamaraw Award.

Emilio J. Tumbocon, Filipino, 56, has served as a Director of CHI since 2008. He is a Senior Vice- President at Ayala Land, Inc., and a member of its Management Committee. He heads the ALI-VisMin Group and concurrently Technical Services Director of Superblock Projects since 2008. His other significant positions are Director of the following companies: Cebu Property Ventures & Development Corporation, Cebu Insular Hotel Co., Inc., Accendo Commercial Corporation, Cagayan de Oro Gateway Corp., Makati Development Corporation, MDC Buildplus, Inc., Direct Power Services, Inc., Ecozone Power Management, Laguna Technopark, Inc., Anvaya Cove Golf & Sports Club, Inc., Asian-I Office Properties, Inc., Northgate Hotel Ventures, Inc., Southcrest Hotel Ventures, Inc., and Crest View E-Office Corporation. He graduated at the University of the Philippines with a degree of Bachelor of Science in Civil Engineering in 1979 and finished his Masters in Business Administration in the same university in 1985. He also took the Construction Executive Program (CEPS '87) at Stanford University, California, U.S.A., the Senior Business Executive Program (SBEP ‘91) at the University of Asia and the Pacific, and The Executive Program (TEP ‘97) at Darden Graduate School of Business Administration, University of Virginia, Virginia, U.S.A. He is a certified Project Management Professional (PMP) of the Project Management Institute since 2006. He has 32 years of extensive work experience in the construction and real estate industry.

Jaime E. Ysmael, Filipino, 52, has served as Director of CHI since April 2008. He is a Senior Vice President, Chief Finance Officer, Compliance Officer and member of the Management Committee of Ayala Land, Inc. Concurrently, he is a Managing Director of Ayala Corporation. His other significant positions include: Chairman of the Board of Directors and Chief Executive Officer of Aprisa Business Process Solutions, Inc.; Director and President of CMPI Holdings, Inc. and CMPI Land, Inc.; Director and President of South Gateway Development Corporation; President of Tower One & Exchange Plaza Condominium Corporation; Director and Treasurer of Ayala Land International Sales, Inc., Ayala Land Sales, Inc., Alveo Land Corp., Laguna Technopark, Inc., Serendra, Inc., Ayala Hotels and Resorts Corporation and Anvaya Cove Beach & Nature Club, Inc.; Director, Treasurer and ExCom Member of Ayala Hotels, Inc. and Enjay Hotels, Inc.; Director of Alabang Commercial Corp., Avida Land Corp., Cebu Insular Hotel Company, Inc., North Triangle Depot Commercial Corp., Station Square East Commercial Corp., Philippine Integrated Energy Solutions, Inc, Ceci Realty, Inc., Aurora Properties, Inc. and Vesta Properties Holdings, Inc. He is also a Director of the Asia Pacific Real Estate Association Ltd. and Chairman of the Board of Directors of its Philippine Chapter.

Nominees to the Board of Directors for election at the stockholders’ meeting

All the nominees who are named above are incumbent directors.

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Executive Officers

Antonino T. Aquino* Chairman of the Board Francis O. Monera* President Ma. Theresa M. Javier* Treasurer Enrique B. Manuel Jr. Chief Finance Officer and Compliance Officer Ma. Clavel G. Tongco VisMin Assistant Vice President, Commercial Business Group Jose Maria D. Lopez Division Head, Business Development Group Ma. Cecilia Crispina T. Urbina Senior Division Manager, Human Resource and Administration Sheila Marie U. Tan Corporate Secretary Ma. Carlota Christina Laiño- Assistant Corporate Secretary Santiago * Members of the Board of Directors

Enrique B. Manuel Jr., Filipino, 39, is the Chief Financial Officer and Chief Compliance Officer of Cebu Holdings, Inc. Concurrently, he is also the Chief Financial Officer and Chief Compliance Officer of Cebu Property Ventures & Development Corporation, and Cebu Leisure Company, Inc.; Assistant Vice President and Group Chief Finance Officer of Ayala Land Inc., Visayas and Mindanao Group. His other significant positions include: Treasurer of Accendo Commercial Corp., Cagayan De Oro Gateway Corp., and Solinea, Inc. Prior to joining the Ayala Group of Companies in 2007, he was a Senior Manager in the Risk Management Group of Ernst & Young LLP, based out of New York City, USA. He was appointed as member of the Management Committee (Mancom) of the Company in March 2011.

Ma. Clavel G. Tongco, CPA, Filipino, 45, serves as the Commercial Business Group’s Assistant Vice President for Visayas and Mindanao of ALI and Cebu Holdings, Inc. Concurrently, she is also the General Manager of Abreeza (Davao), Centrio (Cagayan de Oro) and The District North Point in Talisay City Negros Occidental. Prior to being named VisMin Assitant Vice President, she headed the Commercial Center Business Group of CHI and was responsible for sustaining the Company’s growth in retail operations, specifically for Ayala Center Cebu, its successive expansions, including Phase 2A, The Terraces, and The Walk in Cebu IT Park. Prior to joining CHI, she was the Assistant Comptroller of Alegre Beach Resort. Previously, she was the General Accountant of Cebu Plaza Hotel (Pathfinder Holdings, Inc.). She was appointed as member of the Management Committee (Mancom) of the Company in May 11, 2009.

Jose Maria D. Lopez, Filipino, 55, is currently the Head of the Business Development Group of Cebu Holdings, Inc. and Cebu Property Ventures & Development Corporation. Concurrently, he serves as an Assistant Vice President of ALI overseeing business development in Visayas and Mindanao. He joined ALI in 1993 and has since then participated in the development of several ALI office, retail, residential, and mixed-use projects. He was appointed as member of the Management Committee (Mancom) of the Company in May 11, 2009.

Ma. Cecilia Crispina T. Urbina, Filipino, 43, is the Senior Division Manager of the Human Resource and Administration Division, the QEHS MS Champion at the Mancom level, and the Health and Safety Chairperson for Cebu Holdings, Inc. and Cebu Property Ventures & Development Corp. She joined the Company in October 1997 as Personnel Officer. In 1998, she was formally appointed as the Company’s HR and Administration Manager. She was appointed as member of the Management Committee (Mancom) of the Company in August 12, 2010. Prior to joining the Company, she was connected with China Banking Corporation.

Sheila Marie U. Tan, Filipino, 45, is the Corporate Secretary of Cebu Holdings, Inc. since April 2009. Currently, she also holds the Position of Corporate Secretary of Integrated Micro-Electronics, Inc., Cebu Property Ventures & Development Corp., Alveo Land Corp., Avida Land Corporation, Amaia Land Corp., Alabang Commercial Corporation, North Triangle Depot Commercial Corporation, Laguna Technopark, Inc., Makati Development Corporation: and Ayala Property Management Corporation. She is also the Assistant Corporate Secretary of Ayala Corporation and Ayala Land, Inc. She graduated Cum Laude from the University of the Philippines where she finished BS Economics. She pursued her Bachelor of Laws in the same university in March 1992. She joined Sycip, Salazar, Hernandez & Gatmaitan Law Firm as Associate until she joined Ayala Land, Inc. in 1995. She was a former head of the Legal Department of Ayala Land,

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Inc. She is an Associate Director in Ayala Corporation from January 1, 2009 to July 1, 2012. She is now the Managing Director and Corporate Secretary of AG Counselors Corporation (Ayala Group Legal).

Ma. Carlota Christina G. Laiño-Santiago, Filipino, 39, is the Assistant Corporate Secretary of Cebu Holdings, Inc. since April 2011. Currently, she also holds the position of Assistant Corporate Secretary of Cebu Property Ventures and Development Corporation, Ayala Foundation, Inc., Columbus Holdings, Inc., Berkshire Holdings, Inc., Emerging City Holdings, Inc., Fort Bonifacio Development Corporation, Sonoma Services, Inc., Mermac, Inc., Aprisa Business Process Solutions, Inc., Bonifacio Land Corporation, and Corporate Secretary of Hero Foundation, Inc., Amicassa Process Solutions, Inc., Bonifacio Estate Services Corporation, Bonifacio Global City Estate Association, Inc., and Bonifacio Transport Corporation.

(2) Significant Employees

The Corporation considers its entire work force as significant employees. Everyone is expected to work together as a team to achieve the Corporation’s goals and objectives.

(3) Family Relationship

None of the Directors or Executive Officers is related to another by affinity or consanguinity.

(4) Legal Proceedings

None of the Directors or Executive Officers is involved in any material pending legal proceeding in any court or administrative agency of the Government in the last five years.

Item 10. Executive Compensation (of Directors & Officers) (Part V, Paragraph (b) of RSA 3-3)

Directors. Article IV Section 10 of the Company’s Amended By-Laws provides:

“Section 10 - The Chairman and members of the Board shall receive such remuneration as may be fixed by the Board of Directors each year.”

Officers Annual Compensation

The total annual compensation paid to the top five (5) Officers of the Corporation, including the President for the year 2012 amounted to P 21.7 million. During the previous year, the total compensation paid of the Corporation amounted to P 25.8 million. For the current year, it is projected that the total annual compensation will total P22.8 million.

Name and Principal Position Year Salary Other Variable Pay Francis O. Monera President Enrique B. Manuel Jr. Chief Finance Officer and Compliance Officer Ma. Clavel G. Tongco VisMin Assistant Vice President, Commercial Business Group Jose Maria D. Lopez Division Head, Business Development Group

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Ma. Cecilia Crispina T. Urbina Senior Division Manager Human Resource and Administration All above-named Officers as a Actual 2011 P 18.2 M P 7.6 M group Actual 2012 P 17.1 M P 4.6 M Projected 2013 P 18.0 M P 4.8 M All other officers* as a group Actual 2011 P 13.5M P 7.2M unnamed Actual 2012 P 12.9M P 7.7M Projected 2013 P 13.5M P 8.1M * Senior Personnel with pay class of SP-C.

The total annual compensation was all paid in cash. The total annual compensation included the basic salary and other variable pay (performance bonus).

The Company has no other arrangement with regard to the remuneration of its existing directors and officers aside from the compensation received as herein stated.

The executive officers are composed of regular employees of the Company and four (4) are seconded personnel from Ayala Land, Inc.

Compensation of Directors

The members of the Board of Directors are entitled to receive a reasonable per diem for attendance at each meeting of the Board of Directors. Other than such per diem, there is no other arrangement pursuant to which any amount or compensation is due to the directors for services rendered as such.

Employment Contracts, Termination of Employment and Change-in-Control Arrangements

An employment contract between the Registrant and a named executive officer will normally include a compensation package, duties and responsibilities and term of employment. The Registrant has not entered into any compensatory plan or arrangement with any named executive officer which would entitle such named executive officer to receive any amount under such plan or arrangement as a result of, or which will result from, the resignation, retirement or any other termination of such executive officer’s employment with the Registrant and its subsidiaries or from a change in control of the Registrant or a change in the executive officer’s responsibilities following a change in control of the Registrant.

Warrants and Options Outstanding

Other than options to purchase shares of the authorized capital stock of the Registrant in their capacity as stockholders of the Registrant pursuant to their pre-emptive right granted by the Articles of Incorporation, there are no outstanding warrants or options held by the chief executive officer, named executive officers and other officers or directors of the Registrant.

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Item 11. Security Ownership of Certain Beneficial Owners and Management (Part IV, Paragraph (C) of SRC Rule 12)

1. Security Ownership of Certain Record and Beneficial Owners (of more than 5%) of Common Shares as of January 31, 2013.

Title of Name, address of Name of Beneficial Citizenship No. of Percent Class Record Owner and Owner and Shares Held Relationship with Relationship with Issuer Record Owner Common Ayala Land, Inc.1 Ayala Land, Inc.2 Filipino 956,241,73849.8023% 31/F Tower One & Exchange Plaza Ayala Triangle, Ayala Ave. Makati City Common PCD Nominee Corp. PCD participants Filipino 434,511,199 22.6299% (Filipino)4 acting for themselves G/F MSE Bldg. or for their customers5 Ayala Ave., Makati City Common PCD Nominee Corp. Aberdeen Asset Singaporean 298,979,000 15.5712% (Non-Filipino)4 Management Asia G/F MSE Bldg. Limited6 Ayala Ave., Makati City Common PCD Nominee Corp. Aberdeen International Hong Kong 201,221,000 10.4798% (Non-Filipino)4 Fund Managers G/F MSE Bldg. Limited6 Ayala Ave., Makati City Common First Metro Investment First Metro Investment Filipino 186,695,363 9.7233% Corporation7 Corporation8 45/F G.T. Tower International, Ayala Ave. cor. H.V. Dela Costa St. Makati City

1 Ayala Land, Inc. (ALI) is a major shareholder of CHI. 2 Pursuant to the By-Laws of ALI and the Corporation Code, the Board of Directors of ALI has the power to decide how ALI shares in CHI are to be voted. Mr. Antonino T. Aquino has been named and appointed to exercise the voting power. 4 The PCD is not related to the Company. 5 Each beneficial owner of shares through a PCD participant is the beneficial owner to the extent of the number of shares in his account with the PCD participants. Out of the 434,511,199 shares registered in the name of PCD Nominee Corporation (Filipino), 113,805,123 (5.9271%) are for the account of BPI Securities Corporation and 307,660,000 (16.0233% ) are for the account of Hongkong and Shanghai Banking Corporation (“HSBC”). The Company has no record relating to the power to decide how the shares held by PCD are to be voted. As advised to the Company, none of BPI Securities, or any of their customers beneficially owns more than 5% of the Company’s common shares. One of the clients of HSBC owns 9.5% of the Company’s outstanding shares. 6 As stated in the Statements of Changes in Beneficial Ownership of Securities (SEC Form 23-B) filed on February 1, 2013, Aberdeen Asset Management Asia Limited and Aberdeen International Fund Managers Limited (“Aberdeen Companies”) are clients of a PCD participant. The Company has no record on how Aberdeen Companies exercise the power to decide how their shares in the Company are to be voted. 7 First Metro Investment Corp. (First Metro) is not related to the Company. 8 The Board of Directors of First Metro has the power to decide how First Metro’s shares in CHI are to be voted. Mr. Antonio S. Abacan, Jr. is usually appointed to exercise the voting power.

- 43 -

2. Security Ownership of Directors and Management (Executive Officers) as of January 31, 2013.

Title of Name of Beneficial Owner Amount and Citizenship Percent of Class Nature of Class Beneficial Ownership Directors Common Antonino T. Aquino 1 (direct) Filipino 0.0000% Common Francis O. Monera 1 (direct) Filipino 0.0000% Common Antonio S. Abacan Jr. 18,751 (direct) Filipino 0.0010% Common Maria Theresa M. Javier 1 (direct) Filipino 0.0000% Common Emilio J. Tumbocon 112,500 (direct) Filipino 0.0059% Common Enrique L. Benedicto 1 (direct) Filipino 0.0000% Common Fr. Roderick C. Salazar Jr. 1 (direct) Filipino 0.0000% Common Hernando O. Streegan 1 (direct) Filipino 0.0000% Common Jaime E. Ysmael 16,875 (direct & Filipino 0.0009% indirect) President and Highly Compensated Officers Common Francis O. Monera 1 (direct) Filipino 0.0000% Common Enrique B. Manuel Jr. 0 Filipino n/a Common Ma. Clavel G. Tongco 6,250 (direct) Filipino 0.0003% Common Jose Maria D. Lopez 1,875 (direct) Filipino 0.0001% Common Ma. Cecilia Crispina T. 0 Filipino n/a Urbina Other Executive Officers Common Sheila Marie U. Tan 0 Filipino n/a Common Ma. Carlota Christina 0 Filipino n/a Laiño-Santiago All Directors and Officers as a 156,257 group 0.0081%

None of the members of the Company’s directors and management owns 2.0% or more of the outstanding capital stock of the Company.

No change of control in the Corporation has occurred since the beginning of its last fiscal year.

(3) Voting Trust Holders of 2% or More

No Director, Executive Officer, or stockholder holds more than 2% of a class under a voting trust or similar agreement.

(4) Changes in Control

As of the date hereof, there is no agreement or arrangement which may result in a change in control of the Company.

Item 12. Certain Relationships and Related Transactions (Part IV, Paragraph (D) of SRC Rule 12)

CHI and its subsidiaries (the “Group”), in its regular conduct of business has entered into transactions with related parties. Parties are considered to be related if, among others, one party has the ability, directly or indirectly, to control the other party in making financial and operating decisions, the parties are subject to common control or the party is an associate or a joint venture. Except as otherwise indicated, the outstanding accounts with related parties shall be settled in cash. The transactions are

- 44 - made at terms and prices agreed upon by the parties.

The following tables provide the total amount of transactions that have been entered into with related parties for the relevant financial year (in thousands):

Amounts owed by related Amount owed to related parties parties 2012 2011 2012 2011 Associates Solinea P=84,387 P=55,075 P=– P=– AiO 28,339 5,099 – – Joint Venture Partner VH Properties 9,394 – – – Shareholder ALI 3,049 1,836 44,672 3,419 Subsidiaries of ALI Avida 7,865 836 51,041 – Alveo 376 788 18,132 15,180 Others 2,451 – 1,052 – Total P=135,861 P=63,634 P=114,897 P=18,599

Revenues Expenses 2012 2011 2012 2011 Associate AiO P=19,752 P=114,702 P=– P=39,481 Shareholder ALI ––58,925 58,888 Joint Venture VH Properties Philippines, Inc. (VH) 55,261 – – – Total P=99,801 P=83,949 P=73,401 P=87,668

Receivables from/payables to Solinea, Avida and Alveo pertain mostly to advances and reimbursements of operating expenses related to joint venture agreements including development costs and land acquisitions. Other related party receivables and payables pertain to advances and reimbursements arising from the Group’s ordinary course of business. These are generally trade related, non-interest bearing and payable within one year.

The following describes the nature of the material transactions of the Group with related parties as of December 31, 2012 and 2011:

Income and expenses from AiO pertain to management fees, utility charges and sales of commercial lots.

Management fees charged to AiO amounted to P=15.8 million and P=5.9 million in 2012 and 2011, respectively.

In 2011, CPVDC sold commercial lots to AiO with total selling price of P=105.7 million. Related cost of sales from the transaction amounted to P=63.4 million. Receivables from these sales are noninterest- bearing and collectible in annual installments starting 2009 until 2013. The Group’s “Accounts Receivable” account includes the receivable from sale of lot to AiO amounting to P=204.4 million and P= 307.7 million as of December 31, 2012 and 2011, respectively.

The Group also recognized income from utility charges to AiO amounting to P=3.9 million and P=3.1 million in 2012 and 2011, respectively.

- 45 -

Expenses to ALI pertain to management fees, professional fees and systems costs.

Management and service agreement with ALI, amounted to P=44.4 million and P=43.1 million in 2012 and 2011, respectively. Payable to ALI as of December 31, 2012 and 2011 arising from this transaction amounted to P=42.9 million and P=24.3 million, respectively.

Professional fees to ALI amounted to P=0.6 million and nil in 2012 and 2011, respectively. Systems costs which were included in the Group’s manpower costs amounted to P=13.9 million and P=15.8 million in 2012 and 2011, respectively.

Income from VH pertains to service income from joint venture agreements.

Included in the Group’s other noncurrent assets is a dividend receivable from CIHCI amounting to P=27.9 million and P=33.7 million as of December 31, 2012 and 2011, respectively which is collectible until 2015.

Compensation of key management personnel by benefit type follows:

2012 2011 2010 (In Thousands) Short-term employee benefits P=18,832 P=20,376 P=17,388 Post-employment pension and other benefits 2,807 5,412 3,847 P=21,639 P=25,788 P=21,235

Terms and conditions of transactions with related parties There have been no guarantees provided or received for any related party receivables or payables. These accounts are noninterest-bearing and are generally unsecured except for those indicated under Note 6. Impairment assessment is undertaken each financial year through a review of the financial position of the related party and the market in which the related party operates.

Item 13. Compliance with Leading Practice on Corporate Governance

Compliance with leading practice on Corporate Governance

a. The evaluation system which was established to measure or determine the level of compliance of the Board of Directors and top level management with its Revised Manual of Corporate Governance consists of a Customer Satisfaction Survey form that is filled out by the various functional groups indicating the compliance rating of certain institutional units and their activities. The evaluation process also includes a Board Performance Assessment that is accomplished by the Board of Directors indicating the compliance ratings. The aformentioned forms are submitted to the Compliance Officer who issues the required certificate of compliance with the Company’s Revised Manual of Corporate Governance to the Securities and Exchange Commission.

b. To ensure good governance, the Board establishes the vision, strategic objectives, key policies, and procedures for the management of the Company, as well as the mechanism for monitoring and evaluating Management’s performance. The Board also ensures the presence and adequacy of internal control mechanisms for good governance.

c. There was no deviation committed by any of the Company’s directors and officers on the Revised Manual of Corporate Governance during the period covered in this report. The Company adopted the Revised Manual of Corporate Governance, and full compliance with the same has been made since the adoption of the Revised Manual.

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d. The Company is taking further steps to enhance adherence to principles and practices of good corporate governance. Below are some of the initiatives being undertaken by the Company to ensure adherence to corporate governance. o Adoption of Risks Management System o Adherence to Organizational and Procedural Controls o Independent Audit Mechanism o Regular Reporting to Audit Committee o Creation of Board Committees o Financial and Operational Reporting o Compliance to government regulatory and reportorial requirements o Disclosure and Transparency to the Public

There was no deviation committed by any of the Company’s directors’ and officers on the Manual of Corporate Governance during the period covered in this report.

List of all parents of the registrant showing the basis of control and as to each parent, the percentage of voting securities owned or the basis of control by its immediate parent, if any.

* Ayala Land, Inc. (ALI) 49.80% owner (956,241,738 shares) ALI is majority owned by Ayala Corporation.

PART IV EXIBITS AND SCHEDULES

Item 14. Exhibits and Reports on SEC Form 17-C

(a) Exhibits - See accompanying Index to Exhibits The following exhibit is incorporated by reference in this report:

2012 Consolidated Financial Statements

The other exhibits, as indicated in the Index to Exhibits are either not applicable to the Company or require no answer.

(b) Reports on Sec Form 17-C

The following current reports have been reported by Cebu Holdings during the year 2012 through official disclosure letters dated:

January 10, 2012 Cebu Holdings, Inc. has adopted the Manual of Corporate Governance practices & principles, and compliance therewith started since the adoption of the manual up to the present.

January 13, 2012 Cebu Holdings, Inc. certified the attendance of the Board of Directors in all meetings of the corporation’s Board of Directors in 2011.

April 23, 2012 CHI announced the Results of the Annual Stockholders’ Meeting and Organizational Board of Directors’ Meeting.

May 22, 2012 Cebu Holdings, Inc. submitted the enclosed certification of its Independent Directors in compliance with the notice of the Securities & Exchange Commission implementing Section 38 of the Securities Regulation Code (SRC).

- 47 -

July 16, 2012 CHI accepted the resignation of Mrs. Natividad N. Alejo as director and Treasurer and correspondingly elected Ms. Maria Theresa Marcial-Javier to assume the positions.

November 22, 2012 Cebu Holdings, Inc. Board of Directors (BOD) approved the declaration and payment of a cash dividend of P0.10 per share to all outstanding shares of the company as of record date December 7, 2012, payable on December 21, 2012.

Item 14. Additional Disclosures Data:

a. External Audit Fees: Independent Public Accountants

Audit and Audit-Related Fees

The Company paid its external auditor the following fees in the past two years:

Audit & Audit-related Fees Tax Fees Other Fees 2012 P 531 k* None None 2011 P 472 k* None None * Exclusive of value-added tax and out of pocket expenses

SGV & Co. was engaged by the Company to audit its annual financial statements.

b. Tax Fees

No tax fees or other consultancy services were secured from external auditors, specifically SGV & Co.

c. The audit committee’s approval policies and procedures for the above services:

As indicated in the Audit & Risk Committee Charter, the Committee is responsible for the recommendation on the appointment of the external auditors and the fixing of their remuneration to the full Board. The Audit & Risk Committee reviews and approves the appointment &/or renewal of external auditors (SGV & Co.) for the fiscal year. A presentation of the scope of services to be rendered by external auditors and its corresponding professional fees are presented to the Committee for its approval during the 1st Quarter regular Audit & Risk Committee meeting. The Committee, through its Chairman, recommends to the board en banc the approval of the external auditor appointment.

- 48 - d. Financial Ratios (SRC Rule 68, Amended) Cebu Holdings Inc. and Subsidiaries

Financial Soundness Indicator 2012 2011 a. Current/ liquidity ratios Current ratios 137.1% 227.6% Quick ratios 137.1% 227.6%

b. Solvency/ Debt-to-Equity Ratios Debt-to equity ratios 37.2% 20.2% Net debt-to equity ratios -0.38% -5.66%

c. Asset -to equity ratios 196.8% 151.6%

d. Interest rate coverage ratios 8.73 18.30

e. Profitability ratios Net Income Margin 27.02% 29.41% Return on total assets 5.23% 6.44% Return on equity 9.14% 9.31%

f. Other relevant ratios None None

- 49 -

Cebu Holdings Inc. and Subsidiaries a. Current/ liquidity ratios 2012 2011 Current asset 3,741,663 2,612,801 Current Liabilities 2,728,180 1,147,859 Current ratios 137% 228%

Current Asset 2,483,899 1,625,865 Inventory 1,257,764 986,936 Quick Assets 3,741,663 2,612,801 Current Liabilities 2,728,180 1,147,859 Quick Ratios 137% 228% b. Solvency/Debt-to-Equity Ratios Short term Debt - - Current Portion of Long Term Debt 163,315 55,000 Long-term Debt - net of current portion 1,681,747 895,675 Bank Debt 1,845,062 950,675 Equity 5,282,246 5,028,391 Less: Noncontrolling interest 327,892 323,322 Equity attributable to parent 4,954,354 4,705,069 Less: Unrealized gain- AFS - - Equity, net of unrealized gain 4,954,354 4,705,069 Debt to-equity ratios 37% 20%

Bank Debt 1,845,062 950,675 Cash and cash equivalent 1,864,017 1,214,231 Short term investments - 2,956 Financial Assets at FV through P&L - - Net Debt (18,955) (266,512) Equity 4,954,354 4,705,069 Net Debt ot equity ratios -0.38% -5.66% c. Asset -to equity ratios Total Asset 9,749,063 7,131,313 Total Equity 4,954,354 4,705,069 Asset to Equity Ratio 197% 152% d. Interest rate coverage ratios 8.73 18.30 e. Profitability ratios Net Income after tax 441,292 424,333 Revenue 1,633,034 1,442,701 Net Income Margin 27% 29%

Net Income after tax 441,292 424,333 Total Assets CY 9,749,063 7,131,313 Total Assets PY 7,131,313 6,038,390 Average Total Assets 8,440,188 6,584,851 Return on total assets 5.23% 6.44%

Net Income after tax 441,292 424,333 Total Equity- CY 4,954,354 4,705,069 Total Equity- PY 4,705,069 4,415,142 Average total equity 4,829,712 4,560,106 Return on Equity 9.14% 9.31% - 50 -

Cebu Holdings Inc. and Subsidiaries

2012 2011

Interest Rate Coverage Ratios =EBITDA/Interest Expense

Net Income after tax 441,291,589.25 424,333,467.49 Add: Provision for income tax 167,033,217.07 143,117,000.00 Interest expense and other financing charges 45,073,000.00 26,489,000.00 212,106,217.07 169,606,000.00 Less: Interest and investment income 298,481,836.01 249,571,000.00 Other income - - 298,481,836.01 249,571,000.00 EBIT 354,915,970.31 344,368,467.49 Add: Depreciation & Amortization 12,466,681.73 12,046,080.00 EBITDA 367,382,652.04 356,414,547.49 Interest Expense - Loan 42,071,196.10 19,473,439.90 Interest Rate Coverage Ratio 8.73 18.30

- 51 -

Cebu Holdings, Inc. and Subsidiaries

Consolidated Financial Statements December 31, 2012 and 2011 and Years ended December 31, 2012, 2011 and 2010 and

Independent Auditors’ Report

SyCip Gorres Velayo & Co. SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines

Phone: (632) 891 0307 Fax: (632) 819 0872 www.sgv.com.ph

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015 SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015

INDEPENDENT AUDITORS’ REPORT

The Stockholders and the Board of Directors Cebu Holdings, Inc.

We have audited the accompanying consolidated financial statements of Cebu Holdings, Inc. and its subsidiaries, which comprise the consolidated statements of financial position as at December 31, 2012 and 2011, and the consolidated statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2012, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 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 control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

*SGVMG100137*

A member firm of Ernst & Young Global Limited

- 2 -

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Cebu Holdings, Inc. and its subsidiaries as at December 31, 2012 and 2011, and their financial performance and their cash flows for each of the three years in the period ended December 31, 2012 in accordance with Philippine Financial Reporting Standards.

SYCIP GORRES VELAYO & CO.

Jessie D. Cabaluna Partner CPA Certificate No. 36317 SEC Accreditation No. 0069-AR-3 (Group A), February 14, 2013, valid until February 13, 2016 Tax Identification No. 102-082-365 BIR Accreditation No. 08-001998-10-2012, April 11, 2012, valid until April 10, 2015 PTR No. 3669666, January 2, 2013, Makati City

March 7, 2013

*SGVMG100137*

CEBU HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Amounts in Thousands)

December 31 2012 2011

ASSETS

Current Assets Cash and cash equivalents (Notes 4 and 23) P=1,864,017 P=1,214,231 Short-term investments (Notes 5 and 23) – 2,956 Accounts receivable (Notes 6, 16 and 23) 541,004 390,697 Inventories (Note 7) 1,257,764 986,936 Other current assets (Note 8) 78,878 17,981 Total Current Assets 3,741,663 2,612,801

Noncurrent Assets Noncurrent accounts receivable (Notes 6, 16 and 23) 489,701 522,526 Property and equipment (Note 9) 49,265 39,432 Investments in associates (Note 10) 773,260 690,354 Investment properties (Note 11) 4,635,201 3,170,576 Deferred tax assets - net (Note 21) 8,638 9,579 Other noncurrent assets (Note 12) 51,335 86,045 Total Noncurrent Assets 6,007,400 4,518,512 P=9,749,063 P=7,131,313

LIABILITIES AND EQUITY

Current Liabilities Accounts and other payables (Notes 13, 16 and 23) P=2,046,332 P=654,135 Current portion of long-term debt (Notes 14 and 23) 163,315 55,000 Income tax payable 16,259 36,609 Other current liabilities (Notes 15 and 23) 502,274 402,115 Total Current Liabilities 2,728,180 1,147,859

Noncurrent Liabilities Long-term debt - net of current portion (Notes 14 and 23) 1,681,747 895,675 Pension liabilities (Note 20) 16,239 18,044 Deferred tax liabilities - net (Note 21) 33,094 28,556 Other noncurrent liabilities (Note 23) 7,557 12,788 Total Noncurrent Liabilities 1,738,637 955,063 Total Liabilities 4,466,817 2,102,922

(Forward)

*SGVMG100137*

- 2 -

December 31 2012 2011

Equity (Note 24) Equity attributable to equity holders of Cebu Holdings, Inc. Paid-in capital P=2,776,758 P=2,776,758 Retained earnings 2,177,596 1,928,311 4,954,354 4,705,069 Non-controlling interests 327,892 323,322 Total Equity 5,282,246 5,028,391 P=9,749,063 P=7,131,313

See accompanying Notes to Consolidated Financial Statements.

*SGVMG100137*

CEBU HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands, except Earnings Per Share)

Years Ended December 31 2012 2011 2010

REVENUE Real estate (Note 17) P=1,260,651 P=1,164,625 P=1,273,515 Equity in net earnings of associates (Note 10) 73,901 28,505 29,020 Interest income (Note 18) 83,179 59,384 52,240 Other income (Note 18) 215,303 190,187 167,095 1,633,034 1,442,701 1,521,870

COSTS AND EXPENSES Real estate (Note 19) 751,590 617,901 740,346 General and administrative expenses (Notes 16, 19 and 20) 196,682 190,180 173,541 Interest and other financing charges (Notes 16 and 19) 43,545 22,409 25,347 Other charges 1,528 4,080 1,824 993,345 834,570 941,058

INCOME BEFORE INCOME TAX 639,689 608,131 580,812

PROVISION FOR INCOME TAX (Note 21) Current 161,570 150,066 124,615 Deferred 5,463 (6,949) 10,934 167,033 143,117 135,549

NET INCOME P= 472,656 P=465,014 P=445,263

Net Income Attributable to: Equity holders of Cebu Holdings, Inc. P= 441,292 P=424,333 P=406,200 Non-controlling interests 31,364 40,681 39,063 P=472,656 P=465,014 P=445,263

Basic/Diluted Earnings Per Share (Note 22) Net income attributable to equity holders of Cebu Holdings, Inc. P=0.23 P=0.22 P=0.21

See accompanying Notes to Consolidated Financial Statements.

*SGVMG100137*

CEBU HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thousands)

Years Ended December 31 2012 2011 2010

Net income P=472,656 P=465,014 P=445,263

Other comprehensive income − − −

Total comprehensive income P=472,656 P=465,014 P=445,263

Total comprehensive income attributable to: Equity holders of Cebu Holdings, Inc. P=441,292 P=424,333 P=406,200 Non-controlling interests 31,364 40,681 39,063 P=472,656 P=465,014 P=445,263

See accompanying Notes to Consolidated Financial Statements.

*SGVMG100137*

CEBU HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in Thousands, except Cash Dividends Per Share)

Years Ended December 31 2012 2011 2010

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF CEBU HOLDINGS, INC.

Capital Stock - P=1 par value (Note 24) Balance at beginning and end of year P=1,920,073 P=1,920,073 P=1,920,073

Additional Paid-in Capital Balance at beginning and end of year 856,685 856,685 856,685

Total Paid-in Capital 2,776,758 2,776,758 2,776,758

Retained Earnings (Note 24) Appropriated for future expansion 1,300,000 – – Unappropriated: At beginning of year 1,928,311 1,638,384 1,366,590 Net income 441,292 424,333 406,200 Cash dividends - P=0.10 per share in 2012 and P=0.07 per share in 2011 and 2010 (192,007) (134,406) (134,406) Appropriations during the year (1,300,000) – – At end of year 877,596 1,928,311 1,638,384 2,177,596 1,928,311 1,638,384

NON-CONTROLLING INTERESTS At beginning of year 323,322 309,435 297,183 Net income 31,364 40,681 39,063 Dividends paid to non-controlling interests (26,794) (26,794) (26,811) At end of year 327,892 323,322 309,435 P=5,282,246 P=5,028,391 P=4,724,577

See accompanying Notes to Consolidated Financial Statements.

*SGVMG100137*

CEBU HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands)

Years Ended December 31 2012 2011 2010

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax P=639,689 P=608,131 P=580,812 Adjustments for: Depreciation and amortization (Notes 9, 11 and 19) 138,362 137,054 126,355 Interest and other financing charges (Note 19) 43,545 22,409 25,347 Unrealized foreign exchange losses 1,531 4,099 1,903 Provision for doubtful accounts (Note 6) − 1,000 151 Loss (gain) on disposal of property and equipment (217) 155 (129) Realized profit from downstream sale (Notes 10 and 29) (9,005) (16,920) − Equity in net earnings of associates (Note 10) (73,901) (28,505) (29,020) Interest income (Note 18) (83,179) (59,384) (52,240) Operating income before working capital changes 656,825 668,039 653,179 Decrease (increase) in: Accounts receivable (98,241) (381,532) (90,034) Inventories (Note 29) 75,610 (130,755) 30,343 Other current assets (60,897) (4,608) 11,479 Increase (decrease) in: Accounts and other payables (Note 29) 213,284 (180,962) (3,926) Other liabilities 93,454 20,588 26,704 Pension liabilities (1,805) 15,332 160 Net cash generated from operations 878,230 6,102 627,905 Interest received 63,938 58,249 39,773 Interest paid (38,099) (21,387) (19,473) Income taxes paid (181,920) (140,227) (123,698) Net cash provided by (used in) operating activities 722,149 (97,263) 524,507

CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of: Investment properties (Notes 11 and 29) (757,864) (223,071) (100,916) Property and equipment (Note 9) (22,886) (11,626) (34,874) Investments in associates (Notes 10 and 29) – – (90,454) Decrease (increase) in: Short-term investments 2,956 22,864 211,690 Other noncurrent assets 34,710 5,588 (7,358) Proceeds from sale of property and equipment 803 10 295 Net cash used in investing activities (742,281) (206,235) (21,617)

(Forward)

*SGVMG100137*

- 2 -

Years Ended December 31 2012 2011 2010

CASH FLOWS FROM FINANCING ACTIVITIES Payments of long-term debt (P=55,000) (P=110,000) (P=110,000) Availments of long-term debt 945,250 895,675 − Dividends paid to: Non-controlling interests (26,794) (26,794) (26,811) Equity holders of Cebu Holdings, Inc. (192,007) (134,406) (134,406) Net cash provided by (used in) financing activities 671,449 624,475 (271,217)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1,531) (4,099) (1,903)

NET INCREASE IN CASH AND CASH EQUIVALENTS 649,786 316,878 229,770

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (Note 4) 1,214,231 897,353 667,583

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4) P=1,864,017 P=1,214,231 P=897,353

See accompanying Notes to Consolidated Financial Statements

*SGVMG100137*

CEBU HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Group Information

Cebu Holdings, Inc. (the Parent Company) was incorporated in the Republic of the Philippines on December 9, 1988 and is engaged in real estate development, sale of subdivided land, residential and office condominium units, sports club shares, and lease of commercial spaces. The registered office address of the Parent Company is at 7th Floor, Cebu Holdings Center, Cebu Business Park, Cebu City, Philippines.

Cebu Property Ventures and Development Corporation (CPVDC), a subsidiary, is engaged in real estate development and sale of subdivision land and residential units. The registered office address of the CPVDC is at 7th Floor, Cebu Holdings Center, Cebu Business Park, Cebu City, Philippines.

Asian I-Office Properties, Inc. (AiO) is 40%-owned by CPVDC starting in 2008. Its purpose is to engage in all aspects of real estate development and in leasing of corporate spaces. The registered office address of AiO is at 7th Floor, Cebu Holdings Center, Cebu Business Park, Cebu City, Philippines. AiO was incorporated on September 24, 2007 and has commenced its operations in May 2009.

Cebu Leisure Company, Inc. (CLCI), a wholly owned subsidiary, is engaged in subleasing of commercial spaces, food courts and entertainment facilities. The registered office address of CLCI is at 7/F Cebu Holdings Center, Cebu Business Park, Cebu City, Philippines.

CBP Theatre Management Company, Inc. (CBP Theatre), a subsidiary, was registered with the Securities and Exchange Commission to engage in all aspects of the theatrical and cinematographic entertainment business, including theatre management and other related undertakings. The registered office address of CBP Theatre is at 7th Floor, Cebu Holdings Center, Cebu Business Park, Cebu City, Philippines. CBP Theatre has not yet started its operations as of December 31, 2012.

The consolidated financial statements of Cebu Holdings, Inc. and its subsidiaries (the Group) as of December 31, 2012 and 2011 and for each of the three years ended December 31, 2012 were authorized for issue by the Executive Committee of the Board of Directors (BOD) on March 7, 2013.

2. Summary of Significant Accounting Policies

Basis of Preparation The accompanying consolidated financial statements of the Group have been prepared on a historical cost basis. The consolidated financial statements are presented in Philippine Peso (P=), which is the functional currency of the Parent Company. All values are rounded to the nearest thousand (P=000) except when otherwise indicated.

Statement of Compliance The consolidated financial statements of the Group have been prepared in compliance with Philippine Financial Reporting Standards (PFRS).

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Basis of Consolidation The consolidated financial statements comprise the financial statements of the Parent Company and the following wholly owned and majority owned subsidiaries (the Group) as of December 31, 2012 and 2011:

Effective Percentages of Ownership CLCI 100% CBP Theatre 100 CPVDC 76

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date such control ceases. The financial statements of the subsidiaries are prepared for the same reporting year as the Parent Company, using consistent accounting policies. All intercompany balances and transactions, including income, expenses and dividends, are eliminated in full.

Non-controlling interests represent the portion of profit or loss and net assets in CPVDC not held by the Parent Company and are presented separately in the consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in equity and within equity in the consolidated statements of financial position, separately from the equity attributable to the Parent Company.

The excess of the Parent Company’s cost of investment in CPVDC over its proportionate share in the underlying net assets at date of acquisition was allocated to “Inventories” and “Investment properties” accounts in the consolidated statement of financial position. The purchase premium is amortized in proportion to the area of lots (in square meters) sold by CPVDC.

Adoption of New and Amended Accounting Standards and Interpretations The accounting policies adopted in the preparation of the Group’s consolidated financial statements are consistent with those of the previous financial year except for the adoption of the following amended PFRS and Philippine Accounting Standard (PAS) which became effective January 1, 2012. Except as otherwise indicated, the adoption of the new and amended standards did not have any significant impact on the Group’s financial statements.

• PFRS 7, Financial Instruments: Disclosures - Transfers of Financial Assets (Amendments) The amendments require additional disclosures about financial assets that have been transferred but not derecognized to enhance the understanding of the relationship between those assets that have not been derecognized and their associated liabilities. In addition, the amendments require disclosures about continuing involvement in derecognized assets to enable users of financial statements to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognized assets. The amendments affect disclosures only and do not have significant impact on the Group’s financial position or performance since the Group does not engage in these types of transfers of financial assets.

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• PAS 12, Income Taxes - Deferred Tax: Recovery of Underlying Assets (Amendments) This amendment to PAS 12 clarifies the determination of deferred tax on investment property measured at fair value. The amendment introduces a rebuttable presumption that the carrying amount of investment property measured using the fair value model in PAS 40, Investment Property, will be recovered through sale and, accordingly, requires that any related deferred tax should be measured on a ‘sale’ basis. The presumption is rebutted if the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits in the investment property over time (‘use’ basis), rather than through sale. Furthermore, the amendment introduces the requirement that deferred tax on non-depreciable assets measured using the revaluation model in PAS 16, Property, Plant and Equipment, always be measured on a sale basis of the asset. The amendments have no impact on the Group’s financial position or performance since the Group does not have property and equipment and investment properties measured at fair value.

Future Changes in Accounting Policies The Group will adopt the following amended standards and Philippine Interpretations enumerated below when these become effective. Except as otherwise indicated, the Group does not expect the adoption of these new and amended PFRS and Philippine Interpretations to have significant impact on the consolidated financial statements.

Effective 2013

• PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities These amendments require an entity to disclose information about rights of set-off and related arrangements (such as collateral agreements). The new disclosures are required for all recognized financial instruments that are set off in accordance with PAS 32, Financial Instruments: Presentation and Disclosure. These disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or ‘similar agreement’, irrespective of whether they are set-off in accordance with PAS 32. The amendments require entities to disclose, in a tabular format unless another format is more appropriate, the following minimum quantitative information. This is presented separately for financial assets and financial liabilities recognized at the end of the reporting period:

a) The gross amounts of those recognized financial assets and recognized financial liabilities; b) The amounts that are set off in accordance with the criteria in PAS 32 when determining the net amounts presented in the statement of financial position; c) The net amounts presented in the statement of financial position; d) The amounts subject to an enforceable master netting arrangement or similar agreement that are not otherwise included in (b) above, including: i. Amounts related to recognized financial instruments that do not meet some or all of the offsetting criteria in PAS 32; and ii. Amounts related to financial collateral (including cash collateral); and e) The net amount after deducting the amounts in (d) from the amounts in (c) above.

The amendments to PFRS 7 are to be retrospectively applied for annual periods beginning on or after January 1, 2013. The amendment affects disclosures only on the Group’s financial position or performance since the Group does not have financial instruments that are set off in accordance with the criteria in PAS 32.

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• PFRS 10, Consolidated Financial Statements PFRS 10 replaces the portion of PAS 27, Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also includes the issues raised in SIC-12, Consolidation - Special Purpose Entities. PFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by PFRS 10 will require management to exercise significant judgment to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the requirements that were in PAS 27.

• PFRS 11, Joint Arrangements PFRS 11 replaces PAS 31, Interests in Joint Ventures and SIC13, Jointly controlled Entities (JCEs) - Non-monetary Contributions by Venturers. PFRS 11 removes the option to account for JCEs using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. The application of this new standard will have no impact on the financial position of the Group since the Group does not have JCEs. The Group will adopt the standard when it enters into joint arrangements.

• PFRS 12, Disclosure of Interests with Other Entities PFRS 12 includes all of the disclosures that were previously in PAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in PAS 31, Interest in Joint Ventures and PAS 28, Investment in Associates. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. The adoption of PFRS 12 will affect disclosures only and has no impact on the Group’s financial position or performance since the Group assessed that there will be no significant changes in the disclosures required by PAS 27, 28 and 31.

• PFRS 13, Fair Value Measurement PFRS 13 establishes a single source of guidance under PFRS for all fair value measurements. PFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under PFRS when fair value is required or permitted. This Standard should be applied prospectively as of the beginning of the annual period in which it is initially applied. Its disclosure requirements need not be applied in comparative information provided for periods before initial application of PFRS 13.

The Group does not consider that the definition of fair value that is applied in PFRS 13 differs in a material way from its current approach and consequently anticipates there will not be any impact from this standard on its financial position. However, PFRS 13 does expand the disclosure requirements in respect of fair value measurement.

• PAS 1, Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income or OCI (Amendments) The amendments to PAS 1 change the grouping of items presented in OCI. Items that can be reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon derecognition or settlement) will be presented separately from items that will never be recycled. The amendments affect presentation only and have no impact on the Group’s financial position or performance. The amendment becomes effective for annual periods beginning on or after July 1, 2012. The amendments will be applied retrospectively and will result to the modification of the presentation of items of OCI including unrealized gains on AFS financial assets and cumulative translation adjustments.

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• PAS 19, Employee Benefits (Revised) Amendments to PAS 19 range from fundamental changes such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and rewording. The revised standard also requires new disclosures such as, among others, a sensitivity analysis for each significant actuarial assumption, information on asset-liability matching strategies, duration of the defined benefit obligation, and disaggregation of plan assets by nature and risk. Once effective, the Group has to apply the amendments retroactively to the earliest period presented. The effects are detailed below:

Increase (decrease) As at As at As at December December January 1, 31, 2012 31, 2011 2011 (In Thousands) Consolidated Statements of Financial Position Net defined benefit obligation P=8,408 P=586 P=17,997 Other comprehensive loss (15,366) (7,858) (13,517) Retained earnings (220) 8,294 (2,825)

Increase (decrease) 2012 2011 (In thousands) Consolidated Statements of Income Net benefit cost P=314 (P=11,849) Income tax expense 94 (3,555) Profit (loss) for the year Attributable to the equity holders of Cebu Holdings, Inc. (220) 8,294

• PAS 27, Separate Financial Statements (as revised in 2011) As a consequence of the new PFRS 10, Consolidated Financial Statements, and PFRS 12, Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. The adoption of the amended PAS 27 will not have a significant impact on the separate financial statements of the entities in the Group since the Group’s accounting policy is already consistent with the revised PAS 27.

• PAS 28, Investments in Associates and Joint Ventures (as revised in 2011) As a consequence of the new PFRS 11, Joint Arrangements and PFRS 12, PAS 28 has been renamed PAS 28, Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates.

Effective 2014

• PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial liabilities (Amendments) These amendments to PAS 32 clarify the meaning of “currently has a legally enforceable right to set-off” and also clarify the application of the PAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The amendments affect presentation only on the Group’s financial position or performance. The amendments to PAS 32 are to be retrospectively applied for annual periods beginning on or after January 1, 2014.

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Effective 2015

• PFRS 9, Financial Instruments PFRS 9, as issued, reflects the first phase on the replacement of PAS 39, Financial Instruments: Recognition and Measurement and applies to the classification and measurement of financial assets and liabilities as defined in PAS 39. Work on impairment of financial instruments and hedge accounting is still ongoing, with a view to replacing PAS 39 in its entirety. PFRS 9 requires all financial assets to be measured at fair value at initial recognition. A debt financial asset may, if the fair value option (FVO) is not invoked, be subsequently measured at amortized cost if it is held within a business model that has the objective to hold the assets to collect the contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding. All other debt instruments are subsequently measured at fair value through profit or loss. All equity financial assets are measured at fair value either through OCI or profit or loss. Equity financial assets held for trading must be measured at fair value through profit or loss. For FVO liabilities, the amount of change in the fair value of a liability that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of the liability’s credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. All other PAS 39 classification and measurement requirements for financial liabilities have been carried forward into PFRS 9, including the embedded derivative separation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will potentially have no impact on the classification and measurement of financial liabilities.

• Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate This Interpretation covers accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors. The Interpretation requires that revenue on construction of real estate be recognized only upon completion, except when such contract qualifies as construction contract to be accounted for under PAS 11, Construction Contracts, or involves rendering of services in which case revenue is recognized based on stage of completion. Contracts involving provision of services with the construction materials and where the risks and reward of ownership are transferred to the buyer on a continuous basis will also be accounted for based on stage of completion. The SEC and the Financial Reporting Standards Council (FRSC) have deferred the effectivity of this Interpretation until the final Revenue standard is issued by International Accounting Standards Board (IASB) and an evaluation of the requirements of the final Revenue standard against the practices of the Philippine real estate industry is completed.

The adoption of this Philippine Interpretation may significantly affect the determination of the revenue from real estate sales and the corresponding costs, and the related trade receivables, deferred tax liabilities and retained earnings accounts. The Group is in the process of quantifying the impact of adoption of this Interpretation.

Improvements to PFRSs Improvements to PFRSs, an omnibus of amendments to standards, deal primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The amendments are effective for annual periods beginning on or after January 1, 2013 and are applied retrospectively. Earlier application is permitted.

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• PFRS 1, First-time Adoption of PFRS - Borrowing Costs The amendment clarifies that, upon adoption of PFRS, an entity that capitalized borrowing costs in accordance with its previous generally accepted accounting principles, may carry forward, without any adjustment, the amount previously capitalized in its opening statement of financial position at the date of transition. Subsequent to the adoption of PFRS, borrowing costs are recognized in accordance with PAS 23, Borrowing Costs. The amendment does not apply to the Group as it is not a first-time adopter of PFRS.

• PAS 1, Presentation of Financial Statements - Clarification of the requirements for comparative information The amendments clarify the requirements for comparative information that are disclosed voluntarily and those that are mandatory due to retrospective application of an accounting policy, or retrospective restatement or reclassification of items in the financial statements. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The additional comparative period does not need to contain a complete set of financial statements. On the other hand, supporting notes for the third balance sheet (mandatory when there is a retrospective application of an accounting policy, or retrospective restatement or reclassification of items in the financial statements) are not required. The amendments affect disclosures only and have no impact on the Group’s financial position or performance. The amendment will not have significant impact on the Group’s consolidated financial statements since the comparative information disclosures are in accordance with the requirements of PAS 1.

• PAS 16, Property, Plant and Equipment - Classification of servicing equipment The amendment clarifies that spare parts, stand-by equipment and servicing equipment should be recognized as property, plant and equipment when they meet the definition of property, plant and equipment and should be recognized as inventory if otherwise. The amendment will not have any significant impact on the Group’s financial position or performance.

• PAS 32, Financial Instruments: Presentation - Tax effect of distribution to holders of equity instruments The amendment clarifies that income taxes relating to distributions to equity holders and to transaction costs of an equity transaction are accounted for in accordance with PAS 12, Income Taxes. The Group expects that this amendment will not have any impact on its financial position or performance.

• PAS 34, Interim Financial Reporting - Interim financial reporting and segment information for total assets and liabilities The amendment clarifies that the total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amount disclosed in the entity’s previous annual financial statements for that reportable segment. The amendment affects disclosures only on the Group’s financial position or performance.

Cash and Cash Equivalents and Short-term Investments Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amount of cash with original maturities of three (3) months or less from date of placement and that are subject to an insignificant risk of changes in value. Cash investments with original maturities beyond three months but within one year are classified as short-term investments.

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Financial Assets and Financial Liabilities Date of recognition The Group recognizes a financial asset or a financial liability in the consolidated statement of financial position when it becomes a party to the contractual provisions of the instrument. In the case of a regular way purchase or sale of financial assets, recognition and derecognition, as applicable, is done using the settlement date accounting.

Initial recognition Financial assets and financial liabilities are recognized initially at fair value. Transaction costs are included in the initial measurement of all financial assets and liabilities, except for financial instruments measured at fair value through profit or loss (FVPL).

Financial assets within the scope of PAS 39 are classified as either financial assets at FVPL, loans and receivables, held-to-maturity financial assets, or available-for-sale (AFS) financial assets, as appropriate. Financial liabilities are classified as either financial liabilities at FVPL or other financial liabilities. The Group’s financial assets and financial liabilities are of the nature of loans and receivables and other financial liabilities, respectively. The classification depends on the purpose for which the investments were acquired or liabilities were incurred and whether they are quoted in an active market. Management determines the classification of its financial instruments at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date.

Determination of fair value The fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. When current bid and ask prices are not available, the price of the most recent transaction provides evidence of the current fair value as long as there has not been a significant change in economic circumstances since the time of the transaction.

For all other financial instruments not listed in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models, and other relevant valuation models.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 23.

“Day 1” profit Where the transaction price in a non-active market is different to the fair value from other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable market, the Group recognizes the difference between the transaction price and fair value (a “Day 1” profit) in the consolidated statement of income unless it qualifies for recognition as some other type of asset. In cases where variables used are made of data which is not observable, the difference between the transaction price and model value is only recognized in the consolidated statement of income when the inputs become observable or when the instrument is derecognized. For each transaction, the Group determines the appropriate method of recognizing the “Day 1” profit amount.

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Loans and receivables Loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. They are not entered into with the intention of immediate or short-term resale and are not designated as AFS financial assets or financial assets at FVPL. This accounting policy relates to the consolidated statement of financial position captions “Cash and cash equivalents”, “Short-term investments” and “Accounts receivable” except advances to contractors.

After initial measurement, the loans and receivables are subsequently measured at amortized cost using the effective interest method, less allowance for impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate (EIR). The amortization is included in “Interest income” account in the consolidated statement of income. The losses arising from impairment of such loans and receivables are recognized under “General and administrative expenses” account in the consolidated statement of income. Loans and receivables are included in current assets if maturity is within twelve months from the reporting date. Otherwise, these are classified as noncurrent assets.

Other financial liabilities Other financial liabilities are financial liabilities not designated as at FVPL where the substance of the contractual arrangement results in the Group having an obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation other than by the exchange of a fixed amount of cash. After initial measurement, other financial liabilities are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on the issue and fees that are an integral part of the EIR. The amortization is included in the “Interest and other financing charges” account in the consolidated statement of income.

This accounting policy applies primarily to the Group’s “Accounts and other payables”, “Long- term debt” and other obligations that meet the above definition (other than liabilities covered by other accounting standards, such as income tax payable).

Other Liabilities Other liabilities which include customers’ deposits are measured initially at fair value. The difference between the cash received and the fair value of customers’ deposits is recognized as deferred credits (included in “Other liabilities” in the consolidated statement of financial position) and amortized using the straight-line method under the “Real estate” account in the consolidated statement of income. After initial recognition, customers’ deposits are subsequently measured at amortized cost using effective interest method. Accretion of discount is recognized under “Interest and other financing charges” in the consolidated statement of income.

Derecognition of Financial Assets and Financial Liabilities Financial asset A financial asset (or, where applicable, a part of a group of financial assets) is derecognized when: (a) the right to receive cash flows from the assets 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 right to receive cash flows from the asset and either: (i) has transferred substantially all the risks and rewards of the asset; or (ii) has neither transferred nor retained the risks and rewards of the asset but has transferred control of the asset.

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Where the Group has transferred its right 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 and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Financial liability A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the consolidated statement of income.

Impairment of Financial Assets The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in economic conditions that correlate with defaults.

Loans and receivables For loans and receivables carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses for impairment. Those characteristics are relevant to the estimation of future cash flows for groups of such assets by being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment for impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between 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 is reduced through use of an allowance account and the amount of loss is charged to the consolidated statement of income. Interest income continues to be recognized based on the original effective interest rate (EIR) of the asset. Loans and receivables, together with the associated allowance accounts, are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. Any *SGVMG100137* - 11 -

subsequent reversal of an impairment loss is recognized in consolidated statement of income, to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date.

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

Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group. The methodology and assumptions used for estimating future cash flows are reviewed regularly by the Group to reduce any differences between loss estimates and actual loss experience.

Offsetting Financial Instruments Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. This is not generally the case with master netting agreements, and the related assets and liabilities are presented gross in the consolidated statement of financial position.

Inventories Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory and is valued at the lower of cost or net realizable value (NRV). NRV is the estimated selling price in the ordinary course of business, less estimated costs to complete and sell. Cost includes those incurred for the acquisition and development of the properties and is measured using the average cost method.

Cost includes: • Land cost • Amount paid to contractors for construction • Borrowing costs, planning and design costs, cost of site preparation, professional fees, property transfer taxes, construction overheads and other related costs

The cost of inventory recognized in profit or loss in disposal is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific cost based on the relative size of the property sold.

Club shares are valued at the lower of cost or NRV. Cost comprise of acquisition and actual development cost incurred plus the estimated development cost to complete the project based on the estimates as determined by in-house engineers, adjusted with the actual cost incurred as the development progresses. NRV is the estimated selling price in the ordinary course of business, less estimated costs to sell. Cost is determined using the average cost method.

Property and Equipment Property and equipment are carried at cost less accumulated depreciation and amortization and any impairment in value. The initial cost of property and equipment comprises its purchase price and any directly attributable costs of bringing the property and equipment to its intended location and working condition, including borrowing costs.

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Major repairs are capitalized as property and equipment only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the items can be measured reliably. All other repairs and maintenance are charged against current operations as incurred.

Depreciation and amortization of assets commence once the property and equipment are available for their intended use and is computed on a straight-line basis over the estimated useful lives of the property and equipment as follows:

Years Buildings and improvements 40 Furniture, fixtures and equipment 3 - 10 Transportation equipment 3 - 5

The useful lives and depreciation and amortization method are reviewed periodically to ensure that the period and method of depreciation and amortization are consistent with the expected pattern of economic benefits from items of property and equipment.

When property and equipment are retired or otherwise disposed of, the cost of the related accumulated depreciation and amortization and accumulated provision for impairment losses, if any, are removed from the accounts and any resulting gain or loss is credited or charged against current operations.

Fully depreciated property ad equipment are retained in the accounts while still in use although no further depreciation is credited or charged to current operations.

Investments in Associates Investment in associates is accounted for under the equity method of accounting. An associate is an entity in which the Group has significant influence.

Under the equity method, the investment in associates is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Group’s share in the net assets of the investee companies. Cost includes all amounts provided to the associate which are intended to be the associate’s capital. The consolidated statement of income includes the Group’s share in the results of the operations of the associate. Profit and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.

The reporting date of the associate and the Group are identical and the associate’s accounting policies conform to those used by the Group for like transactions and events in similar circumstances.

Investment Properties Investment properties consist of properties that are held to earn rentals and for capital appreciation or both. Investment properties, except for land, are carried at cost less accumulated depreciation and amortization and any impairment in value. Land is carried at cost less any impairment in value. The initial cost of investment properties consists of any directly attributable costs of bringing the investment properties to its intended location and working condition, including borrowing costs.

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Depreciation and amortization is computed using the straight-line method over its useful life. The estimated lives of investment properties under buildings and improvements are 5 to 40 years.

Construction in progress is stated at cost. This includes cost of construction, equipment and other direct costs. Construction in progress is not depreciated until such time that the relevant assets are available for their intended use.

Investment properties are derecognized when either they have been disposed of or when they are is permanently withdrawn from use and no future economic benefit is expected from its disposal.

Any gains or losses on the retirement or disposal of an investment property are recognized in the consolidated statement of income in the year of retirement or disposal.

Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner-occupation and commencement of an operating lease to another party. Transfers are made from investment properties when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale.

Transfers between investment properties, owner-occupied properties and inventories do not change the carrying amount of the property transferred and they do not change the cost of that property for measurement or disclosure purposes.

Impairment of Nonfinancial Assets Investment properties, property and equipment and noncurrent assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses of continuing operations are recognized in the consolidated statement of income in those expense categories consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation and amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of income unless the asset is carried at revalued amount, in which case, the reversal is treated as a revaluation increase. After such reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. *SGVMG100137* - 14 -

Investments in associates After application of the equity method, the Group determines whether it is necessary to recognize any additional impairment loss with respect to the Group’s net investment in the investee companies. The Group determines at each reporting date whether there is any objective evidence that the investment in associates is impaired. If this is the case, the Group calculates the amount of impairment as being the difference between the fair value of the investee company and the carrying value, and recognizes the amount in the consolidated statement of income.

Borrowing Costs Interest and other financing costs incurred during the construction period on borrowings used to finance property development are capitalized as part of development costs of the specific asset. Capitalization of borrowing costs commences when the activities to prepare the asset are in progress, and expenditures and borrowing costs are being incurred. Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the asset for its intended use or sale are complete. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recorded. Capitalized borrowing cost is based on applicable weighted average borrowing rate. Capitalization rate ranged from 1.3% to 6.5% in 2012, 2011, and 2010 (see Note 14).

Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of the provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a borrowing cost. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimates.

Interest in Joint Venture For joint ventures, the Group accounts for its transactions under jointly-controlled operations. The Group recognizes its own assets that it controls and the liabilities that it incurs rather than establishment of a corporation, partnership or other entity; and the expenses that it incurs and the revenue that it earns from real estate sales.

Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception date whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

Group as lessor Leases where the Group does not transfer substantially all the risk and benefits of ownership of the assets are classified as operating leases. Lease payments received are recognized as an income in the consolidated statement of income on a straight-line basis over the lease term. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as the rental income. Contingent rents are recognized as revenue in the period in which they are earned.

*SGVMG100137* - 15 -

Revenue and Cost Recognition Revenue from sales of completed subdivision land and sports club shares are accounted for under the full accrual method. The percentage of completion method is used to recognize revenue from sales of projects where the Group have material obligations under the sales contract to complete the project after the property is sold. Under this method, revenue is recognized as the related obligations 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 “Other current liabilties” account in the liabilities section of the consolidated statement of financial position.

When a sale of real estate does not meet the requirements for revenue recognition, the sale is accounted for under the deposit method. Under this method, revenue is not recognized, and the receivable from the buyer is not recorded. Cash received is recognized under “Other current liabilities” account in the consolidated statement of financial position.

Cost of real estate sales include land and development costs. Expected losses are recognized immediately when it is probable that the cost will exceed the related contract price. Revisions in estimated costs are accounted for starting in the year the change is made. Commissions for pre- completed real estate units are deferred and are charged to expense when the related revenue is recognized.

Rental income from noncancellable and cancellable leases are recognized in the consolidated statement of income on a straight-line basis and the terms of the lease, respectively, or based on a certain percentage of the gross revenue of the tenants, as provided for under the terms of the lease contract.

Theater income is recognized when earned.

Interest income is recognized as it accrues (using the effective interest method that is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial assets).

Recoveries are recognized as they accrue.

Service income is recognized when the services are rendered.

Pension Cost Pension cost is actuarially determined using the projected unit credit method. This method reflects services rendered by employees up to the date of valuation and incorporates assumptions concerning employees’ projected salaries. Actuarial valuations are conducted with sufficient regularity, with option to accelerate when significant changes to underlying assumptions occur. Pension cost includes current service cost, interest cost, expected return on any plan assets, actuarial gains and losses and the effect of any curtailment or settlement.

The liability recognized in the consolidated statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date less fair value of the plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by using risk-free interest rates of long-term government bonds that have terms to maturity approximating the terms of the related pension liabilities or applying a single weighted average discount rate that reflects the estimated timing and amount of benefit payments. *SGVMG100137* - 16 -

Actuarial gains and losses is recognized as income or expense if the cumulative unrecognized actuarial gains and losses at the end of the previous reporting period exceeded the greater of 10% of the present value of defined benefit obligation or 10% of the fair value of plan assets. These gains and losses are recognized over the expected average remaining working lives of the employees participating in the plans.

Income Tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.

Deferred tax is provided, using the liability method, on all temporary differences with certain exceptions, at the reporting date between the tax bases of assets and liabilities and its carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences and carryforward benefits of unused tax credits from excess of minimum corporate income tax (MCIT) over the regular corporate income tax and unused net operating loss carryover (NOLCO), to the extent that it is probable that taxable income will be available against which the deductible temporary differences and carryforward benefits of unused MCIT and NOLCO can be utilized.

Deferred tax liabilities are not provided on nontaxable temporary differences associated with investments in associates.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted as of reporting date.

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

Foreign Currency Denominated Transactions/Translations The consolidated financial statements are presented in Philippine Peso, which is the Group’s functional and presentation currency. Each entity in the group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded using the exchange rate, based on the Philippine Dealing System (PDS) rate, at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are restated using the closing PDS rate prevailing at reporting dates. Exchange gains or losses arising from foreign exchange transactions are credited to or charged against operations for the year.

*SGVMG100137* - 17 -

Earnings Per Share (EPS) Basic EPS is computed by dividing net income for the year attributable to common stockholders by the weighted average number of common shares issued and outstanding during the year adjusted for any subsequent stock dividends declared. Diluted EPS is computed by dividing net income for the year by the weighted average number of common shares issued and outstanding during the year after giving effect to assumed conversion of potential common shares, if any.

Contingencies Contingent liabilities are not recognized in the consolidated financial statements. These are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the consolidated financial statements but disclosed when an inflow of economic benefits is probable.

Events after the Reporting Date Post year-end events up to the date the financial statements were authorized for issue that provide additional information about the Group’s position at the reporting date (adjusting events) are reflected in the consolidated financial statements. Post year-end events that are not adjusting events are disclosed in the notes to the consolidated financial statements when material.

3. Significant Accounting Judgments and Estimates

The preparation of the consolidated financial statements of the Group in conformity with PFRS requires management to make judgments and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. The judgments and estimates used in the consolidated financial statements are based upon management’s evaluation of relevant facts and circumstances as of the date of the consolidated financial statements. Actual results could differ from such estimates.

Judgments In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognized in the consolidated financial statements:

Operating lease commitments - Group as lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined that it retains all significant risks and rewards of ownership of these properties. The Group considered, among others, the length of the lease term as compared with the estimated life of the assets. A number of the Group’s operating lease contracts are accounted for as non-cancellable operating leases and the rest are cancellable. In determining whether a lease contract is cancellable or not, the Group considered, among others, the significance of the penalty, including economic consequence to the lessee.

Club shares Being a real estate developer, the Group determines how these shares shall be accounted for. In determining whether these shares shall be accounted for as inventories or as financial instruments, the Group considers its role in the development of the Club and its intent for holding these shares.

The Group classifies such shares as inventories when the Group acted as the developer and its intent is to sell a developed property.

*SGVMG100137* - 18 -

Distinction between investment properties and owner-occupied properties The Group determines whether a property qualifies as investment property. In making its judgment, the Group considers whether the property generates cash flows largely independent of the other assets held by an entity. Owner-occupied properties generate cash flows that are attributable not only to property but also to the other assets used in the production or supply process.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of services or for administrative purposes. If these portions cannot be sold separately as of reporting date, the property is accounted for as investment property only if an insignificant portion is held for use in the supply of services or for administrative purposes. Judgment is applied in determining whether ancillary services are so significant that a property does not qualify as investment property. The Group considers each property separately in making its judgment.

Management’s Use of Estimates The key assumptions concerning the future and other key sources of estimation and uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are discussed below.

Revenue and cost recognition The Group’s revenue recognition policies require management to make use of estimates and assumptions that may affect the reported amounts of revenues and costs. The Group’s revenue from real estate is recognized based on the percentage of completion measured principally on the basis of the estimated completion of a physical proportion of the contract work, and by reference to the actual costs incurred to date over the estimated total costs of the project.

As of December 31, 2012 and 2011, the outstanding net trade receivable from real estate sales amounted to P=450.1 million and P=459.9 million, respectively (see Note 6).

Estimating allowance for impairment losses The Group maintains allowance for impairment losses based on the result of the individual and collective assessment under PAS 39. Under the individual assessment, the Group is required to obtain the present value of estimated cash flows using the receivable’s original EIR. Impairment loss is determined as the difference between the receivables’ carrying balance and 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 group its receivables based on the credit risk characteristics (customer type, credit history, past-due status and term) of the customers. Impairment loss is then determined based on historical loss experience of the receivables grouped per credit risk profile. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. The methodology and assumptions used for the individual 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 on the judgments and estimates made for the year.

As of December 31, 2012 and 2011, receivables, net of allowance for impairment losses, amounted to P=1,030.7 million and P=913.2 million, respectively (see Note 6).

*SGVMG100137* - 19 -

Estimating useful lives of property and equipment and investment properties The Group estimates the useful lives of its property and equipment and investment properties based on the period over which these assets are expected to be available for use. The estimated useful lives of property and equipment and investment properties are reviewed at least annually and are updated if expectations differ from previous estimates due to physical wear and tear and technical or commercial obsolescence on the use of these assets. It is possible that future results of operations could be materially affected by changes in estimates brought about by changes in factors mentioned above. See Notes 9 and 11 for the related balances.

Evaluating impairment of nonfinancial assets The Group reviews investments in associates, property and equipment, investment properties and other noncurrent assets (other than financial assets, such as dividends receivable) for impairment of value. This includes considering certain indications of impairment such as significant changes in asset usage, significant decline in assets’ market value, obsolescence or physical damage of an asset, plans in the real estate projects, significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends.

As described in the accounting policy, the Group estimates the recoverable amount as the higher of an asset’s fair value less costs to sell and value in use. In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the Group is required to make estimates and assumptions that may affect investments in associates, investment properties, property and equipment and other noncurrent assets. See Notes 9, 10, 11 and 12 for the related balances.

Deferred tax assets The Group reviews the carrying amounts of deferred taxes at each reporting date and reduces deferred tax assets to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax assets to be utilized. However, there is no assurance that the Group will generate sufficient taxable income to allow all or part of deferred tax assets to be utilized. The Group looks at its projected performance in assessing the sufficiency of future taxable income.

As of December 31, 2012 and 2011, deferred tax assets recognized amounted to P=27.5 million and P=26.5 million, respectively (see Note 21).

Estimating pension obligation and other retirement benefits The determination of the Group’s obligation and cost for pension and other retirement benefits is dependent on selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions are described in Note 20 and include among others, discount rates, expected return on plan assets and salary increase rate. While the Group believes that the assumptions are reasonable and appropriate, significant differences in actual experience or significant changes in assumptions materially affect retirement obligations.

As of December 31, 2012 and 2011, the net pension liabilities amounted to P=16.2 million and P=18.0 million, respectively (see Note 20).

*SGVMG100137* - 20 -

Fair value of financial instruments PFRS requires certain financial assets and liabilities to be carried at fair value or have the fair values disclosed in the notes, which requires use of extensive accounting estimates and judgments. While significant components of fair value measurement were determined using verifiable objective evidence (i.e., foreign exchange rates and interest rates), the amount of changes in fair value would differ if the Group utilized different valuation methodology. Any changes in fair value of these financial assets and liabilities would affect directly the consolidated statement of income and consolidated statement of changes in equity. Certain financial assets and liabilities of the Group were initially recorded at its fair value by using the discounted cash flow methodology. See Note 23 for the related balances.

Contingencies The Group is contingently liable arising from various claims. The estimate of the probable costs for the resolution of these claims has been developed in consultation with the legal counsels and based upon an analysis of potential results. The Group currently does not believe these proceedings will have a material adverse effect on the Group’s financial position. It is possible, however, that the results of operations could be materially affected by changes in the estimates.

4. Cash and Cash Equivalents

This account consists of:

2012 2011 (In Thousands) Cash on hand and in banks P=63,323 P=68,173 Cash equivalents 1,800,694 1,146,058 P=1,864,017 P=1,214,231

Cash in banks earns interest at the respective bank deposit rates. Cash equivalents are short-term, highly liquid investments that are made for varying periods of up to three (3) months depending on the immediate cash requirements of the Group, and earn interest at the respective short-term rates. Total interest income earned from cash and cash equivalents amounted to P=51.7 million, P=34.8 million and P=38.6 million in 2012, 2011 and 2010, respectively (see Note 18).

5. Short-term Investments

This account consists of money market placements made for varying periods of more than three (3) months and up to six (6) months and earn interest at the respective short-term investment rates. Interest income earned from short-term investments amounted to P=0.4 million, P=0.8 million and P=0.3 million in 2012, 2011 and 2010, respectively (see Note 18).

*SGVMG100137* - 21 -

6. Accounts Receivable

This account consists of:

2012 2011 (In Thousands) Trade Residential development P=365,540 P=374,757 Commercial development 84,517 85,124 Shopping centers 71,548 40,126 Corporate business 1,186 12,590 Others 1,178 426

Advances to contractors (Note 16) 342,405 300,385 Receivable from related parties (Note 16) 135,861 63,634 Receivables from employees 27,162 17,804 Others 14,885 31,954 1,044,282 926,800 Less allowance for impairment losses 13,577 13,577 1,030,705 913,223 Less noncurrent portion 489,701 522,526 P=541,004 P=390,697

The classes of trade receivables of the Group are as follows:

• Residential development pertains to receivables arising from sale of high-end residential lots and condominium units. • Commercial development pertains to receivables arising from sale of commercial lots and club shares. • Shopping centers pertain to receivables arising from lease of retail space and land therein, movie theaters, food courts, entertainment facilities and carparks. • Corporate business pertains to receivables arising from lease of office buildings. • Others pertain substantially to advances to joint venture partners (see Note 27).

Terms and conditions of receivables are as follows:

• The sales contract receivables, included under residential development, are noninterest- bearing and are collectible in monthly installments over a period of one to two years. • Receivables from sale of commercial lots, included under commercial development are noninterest-bearing and are collectible in monthly or quarterly installments over a period ranging from two to four years. Titles to real estate properties are not transferred to buyers until full payment has been made. • The lease of retail space and land therein, included under shopping centers, are noninterest- bearing and are collectible monthly based on the terms of the lease contracts. • The leases of office spaces, included under corporate business, are noninterest-bearing and are collectible monthly based on the terms of the lease contracts. • Advances to contractors are recouped upon every progress billing payment depending on the percentage of accomplishment. • Receivables from related parties are noninterest-bearing and collectible within one year. • Receivable from employees are generally noninterest-bearing and are collectible over a period of one year. • Other receivables are noninterest-bearing and collectible over a period of one to ten years. *SGVMG100137* - 22 -

As of December 31, 2012 and 2011, commercial development and residential development trade receivables, receivable from employees and others (included in other receivables) with a nominal amount of P=422.5 million and P=553.7 million, respectively, were initially recorded at fair value. The fair value of the receivables was obtained by discounting future cash flows using the applicable rates of similar types of instruments ranging from 5.1% to 11.9% and 6.1% to 11.9% in 2012 and 2011, respectively.

The aggregate unamortized discount amounted to P=17.8 million and P=33.7 million as of December 31, 2012 and 2011, respectively.

Movements in the unamortized discount as of December 31, 2012 and 2011 are as follows:

2012 2011 (In Thousands) Balance at beginning of the year P=33,678 P=39,222 Additions 15,203 18,204 Accretion (Note 18) (31,037) (23,748) Balance at end of the year P=17,844 P=33,678

Movements in the allowance for impairment losses are as follows:

2012

Shopping Centers Others Total (In Thousands) At January 1 P=7,611 P=5,966 P=13,577 Provisions – – – Write offs – – – At December 31 P=7,611 P=5,966 P=13,577 Gross amounts of individually impaired receivables P=7,611 P=5,966 P=13,577

2011

Shopping Centers Others Total (In Thousands) At January 1 P=9,347 P=5,966 P=15,313 Provisions 1,000 – 1,000 Write offs (2,736) – (2,736) At December 31 P=7,611 P=5,966 P=13,577 Gross amounts of individually impaired receivables P=7,611 P=5,966 P=13,577

As of December 31, 2012 and 2011, the Group has not recognized impairment on receivables based on collective assessment.

*SGVMG100137* - 23 -

7. Inventories

This account consists of:

2012 2011 (In Thousands) Subdivision land for sale and development P=735,083 P=592,648 Club shares 357,340 357,864 Condominium units under development 165,341 36,424 P=1,257,764 P=986,936

The rollforward of inventories follows:

2012 2011 (In Thousands) At January 1 P=986,936 P=993,638 Construction cost incurred 476,618 129,309 Transfers from investment properties (Note 11) 14,108 – Cost of real estate from downstream sales (Note 16) 14,476 28,780 Disposals (recognized in cost of real estate sales) (234,374) (164,791) At December 31 P=1,257,764 P=986,936

8. Other Current Assets

This account consists of:

2012 2011 (In Thousands) Value-added input tax P=55,360 P=189 Prepaid expenses 21,721 15,956 Creditable withholding tax 1,306 1,462 Others 491 374 P=78,878 P=17,981

The value-added input tax is applied against value-added output tax. The balance is recoverable in future periods.

Prepaid expenses consist of advance payments for project management fees, business taxes, office supplies, rentals, commissions and employee benefits of the Group.

*SGVMG100137* - 24 -

9. Property and Equipment

The rollforward analyses of this account follow:

2012

Buildings Furniture, and Fixtures and Transportation Improvements Equipment Equipment Total (In Thousands) Cost At January 1 P=88,338 P=82,793 P=28,438 P=199,569 Additions 1,016 16,647 5,223 22,886 Disposals – (1,337) (676) (2,013) At December 31 P=89,354 P=98,103 P=32,985 P=220,442 Accumulated Depreciation and Amortization At January 1 74,911 65,557 19,669 160,137 Depreciation and amortization (Note 19) 2,432 7,300 2,735 12,467 Disposals – (1,166) (261) (1,427) At December 31 77,343 71,691 22,143 171,177 Net Book Value P=12,011 P=26,412 P=10,842 P=49,265

2011

Buildings Furniture, and Fixtures and Transportation Improvements Equipment Equipment Total (In Thousands) Cost At January 1 P=87,014 P=79,110 P=23,117 P=189,241 Additions 1,324 4,602 5,700 11,626 Disposals – (919) (379) (1,298) At December 31 88,338 82,793 28,438 199,569 Accumulated Depreciation and Amortization At January 1 71,495 58,559 16,131 146,185 Depreciation and amortization (Note 19) 3,416 7,883 3,786 15,085 Disposals – (885) (248) (1,133) At December 31 74,911 65,557 19,669 160,137 Net Book Value P=13,427 P=17,236 P=8,769 P=39,432

Depreciation and amortization charged to general and administrative expenses amounted to P=12.5 million, P=15.1 million and P=12.6 million for the years ended December 31, 2012, 2011 and 2010, respectively (see Note 19).

As of December 31, 2012 and 2011, there are no capital commitments for property and equipment.

*SGVMG100137* - 25 -

10. Investments in Associates

This account consists of:

2012 2011 (In Thousands) Acquisition cost P=800,819 P=800,819 Accumulated equity in net income: At beginning of year (110,465) (54,458) Equity in net earnings for the year 73,901 28,505 Realized profit for the year (Note 16) 9,005 16,920 Elimination of intercompany profit for the year – (101,432) At end of year (27,559) (110,465) P=773,260 P=690,354

The Group’s equity in net assets of associates and the related percentages of ownership are shown below.

Percentages of Ownership Carrying Amounts 2012 2011 2012 2011 (In Thousands) Solinea, Inc. (Solinea) 35% 35% P=316,673 P=289,534 AiO 40 40 263,670 221,716 Cebu Insular Hotel Company, Inc. (CIHCI) 37 37 192,917 179,104 P=773,260 P=690,354

In 2011, CHI purchased 35% stake in Solinea amounting to P=291.1 million. The remaining shares equivalent to 65% of ownership were purchased by Alveo Land Corporation (Alveo), a subsidiary of ALI.

In 2010, CPVDC infused additional investment in AiO amounting to P=90.5 million which is equivalent to 40% in AiO’s total increase of capital stock. AiO’s capital stock increased by 226,135,100 common shares with a par value of P=100 per share. The remaining shares equivalent to 60% of ownership were subscribed by Ayala Land, Inc (ALI).

The following table presents the summarized financial information for equity investment in Solinea, AiO and CIHCI as of and for the years ended December 31, 2012 and 2011:

Solinea

2012 2011 (In Thousands) Current assets P=861,961 P=377,139 Noncurrent assets 659,466 584,214 Total assets P=1,521,427 P=961,353

Current liabilities P=1,415,208 P=295,281 Noncurrent liabilities 14,298 651,274 Equity 91,921 14,798 Total liabilities and equity P=1,521,427 P=961,353

(Forward) *SGVMG100137* - 26 -

2012 2011 (In Thousands) Revenue P=315,782 P=– Costs and expenses 238,242 4,369 Net income (loss) P=77,540 (P=4,369)

AiO

2012 2011 (In Thousands) Current assets P=371,756 P=304,341 Noncurrent assets 2,427,233 2,263,985 Total assets P=2,798,989 P=2,568,326

Current liabilities P=689,547 P=524,104 Noncurrent liabilities 1,283,747 1,302,087 Equity 825,695 742,135 Total liabilities and equity P=2,798,989 P=2,568,326

Revenue P=427,198 P=226,076 Costs and expenses 342,833 195,369 Net income P=84,365 P=30,707

CIHCI

2012 2011 (In Thousands) Current assets P=158,391 P=156,834 Noncurrent assets 696,665 706,216 Total assets P=855,056 P=863,050

Current liabilities P=87,706 P=68,482 Noncurrent liabilities 258,581 323,122 Equity 508,769 471,446 Total liabilities and equity P=855,056 P=863,050

Revenue P=423,385 P=387,965 Costs and expenses 386,113 353,623 Net income P=37,272 P=34,342

*SGVMG100137* - 27 -

11. Investment Properties

The rollforward analyses of this account follow:

2012

Buildings and Construction Land Improvements in Progress Total (In Thousands) Cost At January 1 P=802,317 P=3,351,832 P=232,022 P=4,386,171 Additions 2,435 59,580 1,542,613 1,604,628 Transfers (Note 29) (14,108) – – (14,108) At December 31 790,644 3,411,412 1,774,635 5,976,691 Accumulated Depreciation and Amortization At January 1 – 1,215,595 – 1,215,595 Depreciation and amortization (Note 19) – 125,895 – 125,895 At December 31 – 1,341,490 – 1,341,490 Net Book Value P=790,644 P=2,069,922 P=1,774,635 P=4,635,201

2011

Buildings and Construction Land Improvements in Progress Total (In Thousands) Cost At January 1 P=802,317 P=3,302,375 P=84,910 P=4,189,602 Additions – 69,750 153,321 223,071 Transfers/disposals – (20,293) (6,209) (26,502) At December 31 802,317 3,351,832 232,022 4,386,171 Accumulated Depreciation and Amortization At January 1 – 1,120,128 – 1,120,128 Depreciation and amortization (Note 19) – 121,969 – 121,969 Transfers/disposals – (26,502) – (26,502) At December 31 – 1,215,595 – 1,215,595 Net Book Value P=802,317 P=2,136,237 P=232,022 P=3,170,576

The Group’s investment properties are currently held for commercial leasing.

Depreciation and amortization on buildings and improvements charged to operations amounted to P=125.9 million, P=122.0 million and P=113.7 million for the years ended December 31, 2012, 2011 and 2010, respectively (see Note 19).

Total rental income from investment properties amounted to P=854.9 million, P=838.1 million and P=746.8 million for the years ended December 31, 2012, 2011 and 2010, respectively (see Note 17). Total operating expenses related to investment properties that generated rental income amounted to P=280.1 million, P=248.5 million and P=240.3 million for the years ended December 31, 2012, 2011 and 2010, respectively.

*SGVMG100137* - 28 -

The aggregate fair value of the Group’s investment properties amounted to P=7,508.2 million and P=7,324.1 million as of December 31, 2012 and 2011, respectively.

The fair values of the investment properties were determined by independent professionally qualified appraisers. The fair value represents the amount at which the assets could be exchanged between a knowledgeable, willing buyer and knowledgeable, willing seller in an arm’s length transaction at the date of valuation.

The value of the investment properties was arrived using the Market Data Approach. In this approach, the value of the investment properties is based on sales and listings of comparable property registered within the vicinity. The technique of this approach requires the establishing of comparable property by reducing reasonable comparative sales and listings to a common denominator. This is done by adjusting the differences between the subject property and those actual sales and listings regarded as comparable. The properties used as basis of comparison are situated within the immediate vicinity of the subject property.

As of December 31, 2012 and 2011, capital commitments for investment properties amounted to P=1.9 billion.

12. Other Noncurrent Assets

This account consists of:

2012 2011 (In Thousands) Dividends receivable (Note 16) P=27,943 P=33,677 Deferred input tax 20,699 47,908 Deposits 2,154 2,324 Others 539 2,136 P=51,335 P=86,045

Deferred input tax arises from purchase of capital goods and is recoverable in future periods.

13. Accounts and Other Payables

This account consists of:

2012 2011 (In Thousands) Accrued project costs P=1,260,184 P=81,090 Accounts payable (Note 27) 290,724 140,560 Accrued expenses 194,784 262,115 Retentions payable 140,928 54,328 Payable to related parties (Note 16) 114,897 18,899 Taxes payable 24,206 82,481 Dividends payable (Note 24) 16,434 5,277 Interest payable 1,562 1,726 Others 2,613 7,659 P=2,046,332 P=654,135 *SGVMG100137* - 29 -

Accrued project costs arise from progress billings or unbilled completed work on the development of residential and commercial projects.

Accounts payable consists of estimated liabilities or costs to complete.

Accrued expenses consist mainly of direct operating and administrative expenses, payroll, systems cost and marketing expenses.

Retentions payable pertains to the portion of the progress billings of constructions retained by the Group.

Taxes payable pertains to amusement taxes and net output tax payable.

Dividends payable pertain to dividends declared by CPVDC in 2012 and 2011 (see Note 24).

Accounts payable and accrued expenses are noninterest-bearing and are normally settled on 30 to 180-day terms.

Other payables are noninterest-bearing and are normally settled within one year.

14. Long-term Debt

This account consists of long-term bank loans availed by the Parent Company as follows:

2012 2011 (In Thousands) At 0.60% per annum spread over the floating rate of average 91-day treasury bill rate P=1,840,000 P=890,000 At 0.60% per annum spread over the fixed rate of average 5-year treasury bond rate 10,000 10,000 At 0.50% per annum spread over the fixed rate based on PDST-R1 rate – 30,000 At 0.50% per annum spread over the fixed rate of average 5-year treasury bond rate – 25,000 1,850,000 955,000 Less unamortized debt issue cost 4,938 4,325 1,845,062 950,675 Less current portion of long-term debt 163,315 55,000 P=1,681,747 P=895,675

Portion of the loans, which were availed from a local bank, are secured by mortgage trust indenture on Ayala Center Cebu and other prime lots in the Cebu Business Park (included under “Investment properties” account in the consolidated statements of financial position) with carrying value of P=4,116.0 million and P=2,638.0 million as of December 31, 2012 and 2011, respectively (see Note 11). Such loans have been fully paid and the related indenture has been terminated as of December 31, 2012.

The loan agreements provide for certain restrictions and requirements with respect to, among others, major disposal of property, pledge of assets, liquidation, merger or consolidation and maintenance of ratio between debt and the tangible net worth not to exceed 3:1. These restrictions and requirements were complied with by the Parent Company as of December 31, 2012 and 2011. *SGVMG100137* - 30 -

As of December 31, 2012 and 2011, the Group has capitalized interest as part of the investment properties account amounting to P=12.0 million and P=3.0 million, respectively.

The rollforward of unamortized debt issue cost follows:

2012 2011 (In Thousands) At beginning of year P=4,325 P=– Additions 4,750 4,500 Accretions (4,137) (175) At end of year P=4,938 P=4,325

15. Other current liabilities

This account consists of advances from customers of real estate transactions, tenants’ deposits and construction bonds which are to be refunded by the Group. Total other current liabilities amounted to P=502.3 million and P=402.1 million as of December 31, 2012 and 2011, respectively.

16. Related Party Transactions

The Group in its regular conduct of business has entered into transactions with related parties. Parties are considered to be related if, among others, one party has the ability, directly or indirectly, to control the other party in making financial and operating decisions, the parties are subject to common control or the party is an associate or a joint venture. Except as otherwise indicated, the outstanding accounts with related parties shall be settled in cash. The transactions are made at terms and prices agreed upon by the parties.

The following tables provide the total amount of transactions that have been entered into with related parties for the relevant financial year (in thousands):

*SGVMG100137* - 31 -

Revenues Expenses 2012 2011 2012 2011 Associate AiO P=19,752 P=114,702 P=– P=39,481 Shareholder ALI – – 58,925 58,888 Joint Venture VH Properties Philippines, Inc. (VH) 55,261 – – – Total P=99,801 P=83,949 P=73,401 P=87,668

The following describes the nature of the material transactions of the Group with related parties as of December 31, 2012 and 2011:

Income and expenses from AiO pertain to management fees, utility charges and sales of commercial lots.

Management fees charged to AiO amounted to P=15.8 million and P=5.9 million in 2012 and 2011, respectively.

In 2011, CPVDC sold commercial lots to AiO with total selling price of P=105.7 million. Related cost of sales from the transaction amounted to P=63.4 million. Receivables from these sales are noninterest-bearing and collectible in annual installments starting 2009 until 2013. The Group’s “Accounts Receivable” account includes the receivable from sale of lot to AiO amounting to P=204.4 million and P=307.7 million as of December 31, 2012 and 2011, respectively.

The Group also recognized income from utility charges to AiO amounting to P=3.9 million and P=3.1 million in 2012 and 2011, respectively.

Expenses to ALI pertain to management fees, professional fees and systems costs.

Income from VH pertains to service income from joint venture agreements.

*SGVMG100137* - 32 -

Compensation of key management personnel by benefit type follows:

2012 2011 2010 (In Thousands) Short-term employee benefits P=18,832 P=20,376 P=17,388 Post-employment pension and other benefits 2,807 5,412 3,847 P=21,639 P=25,788 P=21,235

17. Real Estate Revenue

This account consists of:

2012 2011 2010 (In Thousands) Rental income P=854,939 P=838,133 P=746,781 Real estate sales 309,682 246,235 448,868 Theater income 96,030 80,257 77,866 P=1,260,651 P=1,164,625 P=1,273,515

18. Interest and Other Income

Interest income consists of:

2012 2011 2010 (In Thousands) Interest income: Cash in banks (Note 4) P=239 P=205 P=257 Cash equivalents (Note 4) 51,503 34,624 38,386 Short-term investments (Note 5) 400 807 266 Accretion of receivables (Note 6) 31,037 23,748 13,331 P=83,179 P=59,384 P=52,240

Other income consists of:

2012 2011 2010 (In Thousands) Recoveries P=110,785 P=109,700 P=90,704 Service income 79,210 27,831 21,260 Penalties 15,300 40,597 46,100 Beverage 4,533 4,723 4,310 Others 5,475 7,336 4,721 P=215,303 P=190,187 P=167,095

*SGVMG100137* - 33 -

Recoveries pertain to income from sewer, light and power and water charges from its rental operations. These are recognized when earned.

Service income pertains to various management fees charged by the Group.

Penalties represent payments made by a lot buyer in relation to certain construction violations. The lot buyer has agreed to comply with the specified restrictions. Penalties are based on the contractual terms of the agreement.

19. Cost and Expenses

Real estate, rental and theater expenses consist of:

2012 2011 2010 (In Thousands) Cost of real estate sales (Notes 7 and 16) P=234,374 P=164,791 P=296,090 Depreciation and amortization (Note 11) 125,895 121,969 113,737 Marketing and management fees (Note 16) 91,969 78,200 71,426 Rental 27,714 26,386 24,036 Manpower cost (Notes 16 and 20) 10,494 10,010 10,344 Direct operating expenses: Light and water 92,856 82,255 53,591 Security and janitorial 44,189 40,246 30,711 Taxes and licenses 41,504 34,492 37,925 Repairs and maintenance 30,268 25,220 45,134 Dues and fees 17,351 5,830 7,246 Commission 12,635 8,475 13,227 Insurance 8,598 9,096 8,470 Professional fees 610 346 18,273 Transportation and travel 475 548 214 Entertainment, amusement and recreation 227 836 192 Others 12,431 9,201 9,730 P=751,590 P=617,901 P=740,346

Direct operating expenses consist of direct costs charged to the Group’s operations.

General and administrative expenses consist of:

2012 2011 2010 (In Thousands) Manpower cost (Notes 16 and 20) P=123,961 P=118,238 P=107,782 Depreciation and amortization (Note 9) 12,467 15,085 12,618 Stockholders' meeting 7,807 6,327 5,536 Professional fees 7,643 4,584 5,347 Transportation and travel 6,938 7,514 7,333 Repairs and maintenance 6,813 4,074 3,176 Utilities 4,495 5,723 4,090 Postal and communication 4,304 3,851 3,458

(Forward) *SGVMG100137* - 34 -

2012 2011 2010 (In Thousands) Advertising P=3,973 P=8,667 P=5,880 Security and janitorial 3,265 2,491 2,424 Insurance 2,591 430 405 Supplies 2,251 2,221 2,265 Rental 1,507 1,735 1,733 Entertainment, amusement and recreation 1,304 1,107 1,330 Dues and fees 1,287 1,219 1,306 Taxes and licenses 285 325 242 Others 5,791 6,589 8,616 P=196,682 P=190,180 P=173,541

Interest expense and other financing charges consist of:

2012 2011 2010 (In Thousands) Interest expense on long-term debt (Note 14) P=29,959 P=17,650 P=19,473 Other financing charges 13,586 4,759 5,874 P=43,545 P=22,409 P=25,347

20. Pension Plan

The Group has a funded, noncontributory retirement plan covering all its regular employees. The benefits are based on the employees’ years of service and final monthly salary. Retirement costs charged to operations amounted to P=10.5 million, P=18.3 million and P=3.4 million for the years ended December 31, 2012, 2011 and 2010, respectively.

The principal actuarial assumptions used to determine retirement benefits with respect to the discount rate, salary increases and return on plan assets were based on historical and projected normal rates. Actuarial valuations are made at least every three years. The Group’s annual contribution to the retirement plan consists of a payment covering the current service cost for the year plus a payment toward funding the actuarial accrued liability.

The components of pension expense (included in manpower costs under “General and administrative expenses”) in the consolidated statements of income are as follows:

2012 2011 2010 (In Thousands) Current service cost P=2,003 P=4,934 P=3,295 Interest cost on benefit obligation 2,676 3,099 1,640 Expected return − (1,413) (1,118) Past service cost 226 226 − Net actuarial loss (gain) (540) 11,476 (457) Adjustment due to curtailment 6,135 − − Total pension expense P=10,500 P=18,322 P=3,360

*SGVMG100137* - 35 -

The amounts recognized as pension liabilities in the consolidated statements of financial position for the pension plan as of December 31, 2012 and 2011 are as follows:

2012 2011 (In Thousands) Benefit obligation P=24,647 P=39,358 Plan assets − (20,728) Unrecognized actuarial gain (loss) (4,887) 3,161 Unrecognized past service cost (3,521) (3,747) Net pension liabilities P=16,239 P=18,044

Changes in the present value of the defined benefit obligation are as follows:

2012 2011 (In Thousands) At January 1 P=39,358 P=41,607 Current service cost 2,003 4,934 Interest cost 2,676 3,099 Actuarial gain (13,220) (5,322) Benefits paid (12,305) (4,960) Curtailment 6,135 − At December 31 P=24,647 P=39,358

Changes in the fair value of plan assets are as follows:

2012 2011 (In Thousands) At January 1 P=20,728 P=20,938 Expected return − 1,413 Contributions 12,305 3,000 Benefits paid (12,305) (4,960) Actuarial gain (loss) (20,728) 337 At December 31 P= − P=20,728 Actual return on plan assets (P=20,728) P=1,750

The Group expects to make P=3.8 million contributions to its retirement fund in 2013.

The rollforward analysis of unrecognized actuarial gains (losses) follows:

2012 2011 (In Thousands) Balance at beginning of year P=3,161 (P=13,974) Actuarial gain (loss) (8,048) 17,135 Balance at end of year (P=4,887) P=3,161

The allocations of the fair value of plan assets are as follows:

2012 2011 2010 Investment in trust funds 99.9% 99.9% 99.9% Others 0.1 0.1 0.1 *SGVMG100137* - 36 -

The assumptions used to determine pension benefits for the Group for the years ended December 31, 2012, 2011 and 2010 are as follows:

2012 2011 2010 Discount rate 6.8% 6.8% 7.4% Expected return on plan assets 8.8 8.8 6.7 Salary increase rate 7.0 7.0 7.0

Amounts for the current and the previous periods are as follows:

2012 2011 2010 2009 2008 (In Thousands) Defined benefit obligation P=24,647 P=39,358 P=41,607 P=17,322 P=21,979 Plan assets − (20,728) (20,938) (15,965) (20,076) P=24,647 P=18,630 P=20,669 P=1,357 P=1,903 Experience adjustments on plan liabilities (P=17,408) P=1,389 P=14,008 P=1,324 P=1,405 Experience adjustments on plan assets (P=20,728) P=337 P=1,773 P=6,399 P=171

21. Income Taxes

Reconciliation between the statutory income tax rate and the effective income tax rate follows:

2012 2011 2010 Statutory income tax rate 30.00% 30.00% 30.00% Tax effect of: Income subjected to lower income tax rates (1.47) (5.42) (6.12) Equity in net earnings of associates (3.47) (1.41) (1.50) Interest income and capital gains taxed at lower rates (0.83) (2.10) (0.70) Others 1.88 2.46 1.65 Effective income tax rate 26.11% 23.53% 23.33%

The components of net deferred tax assets as of December 31, 2012 and 2011 follow:

2012 2011 (In Thousands) Deferred tax assets on: Difference between tax and book basis of accounting for real estate transactions P=3,750 P=5,143 Allowance for probable losses 2,102 1,894 Advance rent 1,175 563 Unrealized foreign exchange loss 923 1,071 Accrued expenses 295 295 Others 422 897 8,667 9,863 Deferred tax liability on deferred credits 29 284 P=8,638 P=9,579

*SGVMG100137* - 37 -

The components of net deferred tax liabilities as of December 31, 2012 and 2011 are as follows:

2012 2011 (In Thousands) Deferred tax assets on: Discounting losses P=6,325 P=4,994 Allowance for probable losses 4,623 4,539 Retirement benefits 4,555 4,127 Unrealized foreign exchange loss 3,309 2,945 18,812 16,605 Deferred tax liabilities on: Capitalized interest and other expenses 21,477 20,238 Excess of acquisition cost over the net assets of a subsidiary 15,441 15,705 Difference between tax and book basis of accounting for real estate transactions 13,759 8,042 Others 1,229 1,176 51,906 45,161 P=33,094 P=28,556

22. Earnings Per Share

The following table presents information necessary to compute EPS:

2012 2011 2010 (In Thousands, except EPS) a. Net income attributable to the equity holders of the Parent Company P=441,292 P=424,333 P=406,200 b. Weighted average number of outstanding shares 1,920,073 1,920,073 1,920,073 c. Earnings per share (a/b) P=0.23 P=0.22 P=0.21

*SGVMG100137* - 38 -

23. Financial Instruments

Fair Value Information The following tables set forth the carrying values and estimated fair values of all of the Group’s financial instruments recognized as of December 31:

2012 2011 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) FINANCIAL ASSETS Loans and Receivables Cash and cash equivalents (excluding cash on hand) P=1,862,914 P=1,862,914 P=1,213,981 P=1,213,981 Short-term investments – – 2,956 2,956 Trade receivables Residential development 365,540 408,431 374,757 373,076 Commercial development 84,517 94,352 85,124 85,124 Shopping centers 63,937 63,937 32,515 32,515 Corporate business 1,186 1,186 12,590 12,590 Others 1,178 1,178 426 426 Receivable from related parties 135,861 135,861 63,634 63,634 Dividends receivable 27,943 27,943 33,677 33,677 Receivables from employees 27,162 27,162 17,804 17,804 Others 8,919 8,919 25,988 25,988 Total Financial Assets P=2,579,157 P=2,631,883 P=1,863,452 P=1,861,771

OTHER FINANCIAL LIABILITIES Accounts and other payables Accrued project costs P=1,260,184 P=1,260,184 P=81,090 P=81,090 Accounts payable 290,724 290,724 140,560 140,560 Accrued expenses 194,784 194,784 262,115 262,115 Retentions payable 140,928 140,928 54,328 54,328 Payable to related parties 114,897 114,897 18,899 18,899 Dividends payable 16,434 16,434 5,277 5,277 Interest payable 1,562 1,562 1,726 1,726 Others 2,613 2,613 7,659 7,659 Long-term debt 1,845,062 1,796,763 950,675 935,766 Other liabilities 509,831 509,264 414,903 418,392 Total Financial Liabilities P=4,377,019 P=4,328,153 P=1,937,232 P=1,925,812

The methods and assumptions used by the Group in estimating the fair value of the financial instruments are as follows:

Cash and cash equivalents, short-term investments and current accounts receivable - The carrying amounts approximate fair values due to the relatively short-term maturities of these instruments.

Noncurrent accounts and dividends receivable - The fair values are estimated based on the discounted cash flow methodology using the applicable discount rates for similar types of instruments. The discount rates used ranged from 1.4% to 2.8% and 4.3% to 5.3% as of December 31, 2012 and 2011, respectively.

Accounts and other payables and current portion of other liabilities and long-term debt - The fair values approximate the carrying amounts due to the short-term nature of these accounts.

*SGVMG100137* - 39 -

Noncurrent portion of other liabilities and long-term debt - The fair value of fixed rate instruments are estimated using the discounted cash flow methodology using the Group’s current incremental borrowing rates for similar borrowings with maturities consistent with those remaining for the liability being valued. The discount rates used ranged from 2.1% to 4.8% and 2.2% to 7.2% as of December 31, 2012 and 2011, respectively.

Fair Value Hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of the financial instruments by valuation technique:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: inputs other than quoted prices included within Level 1 that are observable for assets or liabilities, either directly or indirectly

Level 3: inputs for the asset or liability that are not based on observable market data

As of December 31, 2012, the Group has no financial instruments recorded at fair value.

Financial Risk Management Objectives and Policies The Group’s principal financial instruments comprise of cash and cash equivalents, short-term investments and long-term debt. The main purpose of the Group’s financial instruments is to fund its operations, capital expenditures and finance the projects. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

Exposure to credit risk, liquidity risk and market risk (i.e., foreign currency risk and interest rate risk) arises in the normal course of the Group’s business activities. 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 financing and treasury function operates as a centralized service for managing financial risks and activities as well as providing optimum investment yield and cost-efficient funding for the Group. The Group’s BOD reviews and approves policies for managing each of these risks.

Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Group’s credit risks are primarily attributable to financial assets such as cash and cash equivalents, short-term cash investments and receivables. To manage credit risk, the Group maintains defined credit policies and monitors on a continuous basis the Group’s exposure to credit risks.

*SGVMG100137* - 40 -

Cash and cash equivalents and short-term investments. The Group adheres to fixed limits and guidelines in its dealing with counterparty banks and its investment in financial instruments. Bank limits are established on the basis of the Group’s rating that covers the area of liquidity, capital adequacy and financial stability. Given the high credit standing of its accredited counterparty banks, management does not expect any of these financial institutions to fail in meeting their obligation. The Group’s exposure to credit risk from these financial assets arise from the default of the counterparty, with a maximum exposure equal to the carrying amounts of these instruments.

Commercial development, corporate business and residential development trade receivables. With respect to trade receivables from the sale of real estate properties, credit risk is managed primarily through credit reviews and monitoring of receivables on a continuous basis. The Group undertakes supplemental credit review procedures to ensure the adequacy of provisioning for certain installment payment structures. Customer payments are facilitated through various collection modes including the use of post-dated checks and auto-debit arrangements. Exposure to bad debts is not significant and the requirement for remedial procedures is minimal given the profile of buyers. As for the sale of lots, the Group includes in the contract to sell provisions that the title to the properties will only be transferred to the buyers upon full payment of the contract price.

Shopping center trade receivables. Credit risk arising from rental income from leasing properties is primarily managed through a tenant selection process. Prospective tenants are evaluated on the basis of payment track record and other credit information. In accordance with the provisions of the lease contracts, the lessees are required to deposit with the Group security deposits and advance rentals which help reduce the Group’s credit risk exposure in case of defaults by the tenants. For existing tenants, the Group has put in place a monitoring and follow-up system. Receivables are aged and analyzed on a continuous basis to minimize credit risk associated with these receivables. Regular meetings with tenants are also undertaken to provide opportunities for counseling and further assessment of paying capacity.

As for the receivables from related parties, receivable from employees, dividends receivable and other receivables, the maximum exposure to credit risk from these financial assets arise from the default of the counterparty with a maximum exposure equal to their carrying amounts.

An analysis of the maximum exposure to credit risk from the Group’s trade receivables and the fair values of the related collaterals are shown below:

2012 Financial effect of Maximum exposure Fair value of collateral or credit to credit risk collaterals Net Exposure enhancement (In Thousands) Trade receivables Residential development P=365,540 P=879,084 P=18,726 P=346,814 Commercial development 84,517 328,291 – 84,517 Shopping centers 63,937 58,576 7,767 56,170 Corporate business 1,186 7,563 198 988 Total P=515,180 P=1,273,514 P=26,691 P=488,489

*SGVMG100137* - 41 -

2011 Financial effect of Maximum exposure Fair value of collateral or credit to credit risk collaterals Net Exposure enhancement (In Thousands) Trade receivables Residential development P=374,757 P=489,585 P=– P=374,757 Commercial development 85,124 369,658 – 85,124 Shopping centers 32,515 60,150 11,041 21,474 Corporate business 12,590 – 12,590 – Total P=504,986 P=919,393 P=23,631 P=481,355

The table below shows the credit quality by class of the Group’s financial assets (gross of allowance for impairment losses):

2012

Neither Past Due nor Impaired Past Due or High Grade Medium Grade Low Grade Impaired Total (In Thousands) Cash and cash equivalents (excluding cash on hand) P=1,862,914 P=– P=– P=– P=1,862,914 Short-term investments – – – – – Trade Residential development 365,540 – – – 365,540 Commercial development 84,517 84,517 Shopping centers 43,788 14,552– 5,597 7,611 71,548 Corporate business – – – 1,186 1,186 Others 1,178 – – – 1,178 Receivable from related parties 135,861 – – – 135,861 Dividends receivable 27,943 – – – 27,943 Receivables from employees 27,162 – – – 27,162 Others 8,919 – – 5,966 14,885 P=2,557,822 P=14,552 P=5,597 P=14,763 P=2,592,734

2011

Neither Past Due nor Impaired Past Due or High Grade Medium Grade Low Grade Impaired Total (In Thousands) Cash and cash equivalents (excluding cash on hand) P=1,213,981 P=− P=− P=− P=1,213,981 Short-term cash investments 2,956 − − − 2,956 Trade Residential development 374,757 − − − 374,757 Commercial development 85,124 − − − 85,124 Shopping centers 4,303 1,877 5,449 28,497 40,126 Corporate business 12,590 − − − 12,590 Others 426 − − − 426 Receivable from related parties 63,634 − − − 63,634 Dividends receivable 33,677 − − − 33,677 Receivables from employees 17,804 − − − 17,804 Others 25,988 − − 5,966 31,954 P=1,835,240 P=1,877 P=5,449 P=34,463 P=1,877,029

Others includes non-trade receivables from sewer and management fees, receivable from SSS and accrued interest receivable from money market placements. *SGVMG100137* - 42 -

The credit quality of the financial assets was determined as follows:

Cash and cash equivalents and short-term investments - based on the nature of the counterparty and the Company’s rating procedure. These are held by counterparty banks with minimal risk of bankruptcy and are therefore classified as high grade..

Accounts and dividends receivables - high grade pertains to receivables with no default in payment; medium grade pertains to receivables with up to 3 defaults in payment; and low grade pertains to receivables with more than 3 defaults in payment.

As of December 31, 2012 and 2011, the Group does not have restructured financial assets.

The Group has no significant credit risk concentrations on its receivables. Policies are in place to ensure that lease contracts and contract to sell are made with customers with good credit history.

Given the Group’s diverse base of counterparties, it is not exposed to large concentration of credit risk. As of December 31, 2012 and 2011, the aging analysis of receivables presented per class, is as follows:

2012

Neither Past Due nor Past Due but not Impaired Individually Impaired <30 days 30-60 days 60-90 days 90-120 days >120 days Impaired Total (In Thousands) Trade Residential development P=365,540 P= − P= − P= − P= − P= − P= − P=365,540 Commercial development 84,517 − − − − − − 84,517 Shopping centers 43,788 6,453 3,946 4,153 344 5,253 7,611 71,548 Corporate business − 1,186 − − − − − 1,186 Others 1,178 − − − − − − 1,178 Receivable from employees 135,861 − − − − − − 135,861 Dividends receivable 27,943 − − − − − − 27,943 Receivable from related parties 27,162 − − − − − − 27,162 Others 8,919 − − − − − 5,966 14,885 Total P=694,908 P=7,639 P=3,946 P=4,153 P=344 P=5,253 P=13,577 P=729,820

2011

Neither Past Due nor Past Due but not Impaired Individually Impaired <30 days 30-60 days 60-90 days 90-120 days >120 days Impaired Total (In Thousands) Trade Residential development P=374,757 P=− P=− P=− P=− P=− P=− P=374,757 Commercial development 85,124 − − − − − − 85,124 Shopping centers 11,629 8,261 3,147 1,290 885 7,303 7,611 40,126 Corporate business 12,590 − − − − − − 12,590 Others 426 − − − − − − 426 Receivable from related parties 63,634 − − − − − − 63,634 Dividends receivable 33,677 − − − − − − 33,677 Receivable from employees 17,804 − − − − − − 17,804 Others 25,988 − − − − − 5,966 31,954 Total P=625,629 P=8,261 P=3,147 P=1,290 P=885 P=7,303 P=13,577 P=660,092

The Group has no collaterals held for the past due or impaired financial assets as of December 31, 2012 and 2011.

*SGVMG100137* - 43 -

Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from either the inability to sell financial assets quickly at their fair values; or the counterparty failing on repayment of a contractual obligation; or inability to generate cash inflows as anticipated.

The Group monitors its cash flow position, debt maturity profile and overall liquidity position in assessing its exposure to liquidity risk. The Group maintains a level of cash and cash equivalents deemed sufficient to finance operations and to mitigate the effects of fluctuation in cash flows. Accordingly, its loan maturity profile is regularly reviewed to ensure availability of funding through an adequate amount of credit facilities with financial institutions.

As of December 31, 2012, current ratio is 1.4:1.0, with cash and cash equivalents and short-term investments of P=1,864.0 million accounting for 49.8% of the total current assets, and resulting in a net working capital of P=1,013.5 million.

As of December 31, 2011, current ratio is 2.3:1.0, with cash and cash equivalents and short-term investments of P=1,217.2 million accounting for 46.6% of the total current assets, and resulting in a net working capital of P=1,464.9 million.

Overall, the Group’s funding arrangements are designed to keep an appropriate balance between equity and debt, to give financing flexibility while continuously enhancing the Group’s businesses.

The table below summarizes the maturity profile of the Group’s financial assets and financial liabilities at December 31, 2012 and 2011 based on contractual undiscounted payments.

2012

< 1 year 1 to < 2 years 2 to < 3 years > 3 years Total (In Thousands) Cash and cash equivalents (excluding cash on hand) P=1,862,914 P=– P=– P=– P=1,862,914 Short-term investments – – – – – Accounts receivable 618,813 198,032 – – 816,845 Dividends receivable 1,591 1,525 24,827 – 27,943 Total financial assets P=2,483,318 P=199,557 P=24,827 P=– P=2,707,702 Accounts and other payables P=2,022,126 P= − P= − P= − P=2,022,126 Long-term debt 218,815 447,029 435,136 744,082 1,845,062 Other liabilities 502,274 7,557 – – 509,831 Total other financial liabilities P=2,743,215 P=454,586 P=435,136 P=744,082 P=4,377,019 Interest payable P=139 P=335 P=335 P=753 P=1,562

*SGVMG100137* - 44 -

2011

< 1 year 1 to < 2 years 2 to < 3 years > 3 years Total (In Thousands) Cash and cash equivalents (excluding cash on hand) P=1,213,981 P=− P=− P=− P=1,213,981 Short-term investments 2,956 − − − 2,956 Accounts receivable 425,525 271,402 75,031 − 771,958 Dividends receivable 1,967,007 1,911,153 1,812,945 27,986,190 33,677,295 Total financial assets P=3,609,469 P=2,182,555 P=1,887,976 P=27,986,190 P=35,666,190 Accounts and other payables P=571,654 P=− P=− P=− P=571,654 Long-term debt 55,000 51,259 191,810 652,606 950,675 Other liabilities 402,116 12,788 − − 414,904 Total other financial liabilities P=1,028,770 P=64,047 P=191,810 P=652,606 P=1,937,233 Interest payable P=154 P=370 P=370 P=832 P=1,726

Cash and cash equivalents, short-term investments, accounts receivable and dividends receivable are used for the Group's liquidity requirements. Please refer to the terms and maturity profile of these financial assets under the maturity profile of the interest-bearing financial assets and liabilities disclosed under interest rate risk section.

Foreign currency risk Majority of the Group’s transactions are denominated in Philippine Peso. There are only minimal placements in foreign currencies and the Group does not have any foreign currency denominated debt. As such, the Group’s foreign currency risk is minimal.

The following table shows the Group’s consolidated foreign currency-denominated monetary assets and their peso equivalents as of December 31, 2012 and 2011:

2012 2011 US Dollar Php Equivalent US Dollar Php Equivalent (In Thousands) Cash and cash equivalents $516 P=21,818 $723 P=31,708 Short-term investments – – 67 2,945 $516 P=21,818 $790 P=34,653

In translating the foreign currency-denominated monetary assets into peso amounts, the exchange rates used were P=41.05 to US$1.00 and P=43.84 to US$1.00, the Philippine Peso-US Dollar exchange rates as at December 31, 2012 and 2011.

The following table demonstrates the sensitivity to a reasonably possible change in the US dollar rate, with all variables held constant, of the Group’s profit before tax (due to changes in the peso equivalent of the dollar denominated cash and cash equivalents and short-term investments). There is no other impact on the Group’s equity other than those already affecting the profit or loss.

Increase (Decrease) Effect on Profit in US $ Before Tax (In Thousands) 2012 P=1.00 P=516 (P=1.00) (P=516) 2011 P=1.00 P=790 (P=1.00) (P=790)

*SGVMG100137* - 45 -

Interest rate risk The Group’s interest rate exposure management policy centers on reducing the Group’s overall interest expense and exposure to changes in interest rates. Changes in market interest rates relate primarily to the Group’s interest-bearing debt obligations with floating interest rate as it can cause a change in the amount of interest payments.

The Group manages its interest rate risk by leveraging on its premier credit rating and maintaining a debt portfolio mix of both fixed and floating interest rates. The portfolio mix is a function of historical, current trend and outlook of interest rates, volatility of short term interest rates, the steepness of the yield curve and degree of variability of cash flows.

The floating portion of the loan portfolio comprises the newly availed loan with which the Group has the option to convert from floating to fixed rate within one year from drawdown date. The current trend of interest rate is at its low and is forecasted to stay low during the duration of the loan term.

The following tables demonstrate the sensitivity of the Group’s profit before tax and equity to a reasonably possible change in interest rates on December 31, 2012 and 2011, with all variables held constant, (through the impact on floating rate borrowings):

2012

Effect on income before income tax Increase (decrease) Change in basis points + 100 basis points - 100 basis points (In Thousands) Floating rate borrowings (P=12,880) P=12,880

2011

Effect on income before income tax Increase (decrease) Change in basis points + 100 basis points - 100 basis points (In Thousands) Floating rate borrowings (P=885) P=885

*SGVMG100137* - 46 -

The terms and maturity profile of the interest-bearing financial assets and liabilities, together with its corresponding nominal amounts and carrying values (in thousands) are shown in the following table:

2012

Interest terms (p.a.) Rate Fixing Period Nominal Amount < 1 year 1 to 5 years Carrying Value Group Cash and cash equivalents Fixed at the date of investment Various P=1,862,914 P=1,862,914 P=– P=1,862,914 Accounts receivable Fixed at the date of sale Date of sale 397,330 151,893 198,032 349,925 P=2,260,244 P=2,014,807 P=198,032 P=2,212,839 Parent Company Long-term debt Fixed Peso Fixed rate of average 5-year treasury bond + 0.60% spread Maturity date P=10,000 P=– P=11,435 P=9,969 Floating Peso Floating rate of average 91-day treasury bill rate + 0.60% spread Maturity date 1,840,000 218,815 1,616,278 1,835,093 P=1,850,000 P=218,815 P=1,627,713 P=1,845,062

2011

Interest terms (p.a.) Rate Fixing Period Nominal Amount < 1 year 1 to 5 years Carrying Value Group Cash and cash equivalents Fixed at the date of investment Various P=1,214,231 P=1,214,231 P=– P=1,214,231 Short-term investments Fixed at the date of investment Various 2,956 2,956 – 2,956 Accounts receivable Fixed at the date of sale Date of sale 652,508 323,446 281,978 605,424 P=1,869,695 P=1,540,633 P=281,978 P=1,822,611

(Forward)

*SGVMG100137* - 47 -

Interest terms (p.a.) Rate Fixing Period Nominal Amount < 1 year 1 to 5 years Carrying Value Parent Company Long-term debt Fixed Peso Fixed rate based on 5-years T-bill + 0.50% spread Maturity date P=25,000 P=25,000 P=– P=25,000 Peso Fixed rate based on PDST-R1 + 0.50% spread Maturity date 30,000 30,000 – 30,000 Peso Fixed rate of average 5-year treasury bond + 0.60% spread Maturity date 10,000 – 9,958 9,958 Floating Peso Floating rate of average 91-day treasury bill rate + 0.60% spread Maturity date 889,842 – 885,717 885,717 P=954,842 P=55,000 P=895,675 P=950,675

*SGVMG100137* - 48 -

24. Equity

Capital Stock The details of the Parent Company’s common shares are as follows:

2012 2011 Authorized shares 3,000,000,000 3,000,000,000 Par value per share P=1.0 P=1.0 Shares issued and outstanding 1,920,073,623 1,920,073,623

In accordance with SRC Rule 68, as Amended (2011), Annex 68-D, below is a summary of the Company’s track record of registration of securities.

2012 2011 Number of Number of holders of holders of Number of shares securities as of securities as of registered Issue/offer price Date of approval December 31 December 31 Common shares 3,000,000,000 P=1.00 par value February 14, 1994 4,498 4,698 P=4.00 issue price

Retained Earnings The retained earnings available for dividend distribution amounted to P=619.7 million and P=1,739.7 million as of December 31, 2012 and 2011, respectively. Retained earnings include undistributed net earnings of subsidiaries and associates amounting P=508.2 million and P=539.1 million as of December 31, 2012 and 2011, respectively.

On November 7, 2012, the Parent Company’s BOD declared P=0.10 per share cash dividends from unappropriated retained earnings to all its issued and outstanding shares as of record date December 7, 2012, and paid on December 21, 2012. On October 20, 2011, the BOD declared P=0.07 per share cash dividends to all issued and outstanding shares as of record date November 18, 2011, and paid on December 14, 2011.

In 2012 and 2011, the BOD of CPVDC declared P=0.12 per share cash dividends from unappropriated retained earnings of which P=16.4 million and P=5.3 million remained outstanding as of December 31, 2012 and 2011, respectively.

On November 22, 2012, the Parent Company’s BOD approved the appropriaton of retained earnings amounting to P=1,300.0 million for future expansion. In the normal course of business of the Group, it represents continuing appropriation for land banking activities, planned building construction projects. Each year, the Group incurs residential capital expenditures for property development which includes among others land banking and building construction projects. The annual appropriation is being fully utilized to cover part of the annual expenditure requirement of the Group. In 2013, it is expected that the capital expenditure requirement will exceed the P=1,300.0 million appropriations, hence the Group will provide future appropriation as the need arises.

Capital Management The primary objective of the Group’s capital management policy is to ensure that debt and equity capital are mobilized efficiently to support business objectives and maximize shareholder value. The Group establishes the appropriate capital structure for each business line that properly reflects

*SGVMG100137* - 49 -

its premier credit rating and allows it the financial flexibility, while providing it sufficient cushion to absorb cyclical industry risks.

The Parent Company is not subject to externally imposed capital requirements. No changes were made in the objectives, policies and processes from the previous years.

The Group monitors its capital structure using leverage ratios on both a gross and net basis, and makes adjustments to it in light of economic conditions. Debt consists of long-term debt. Net debt includes long-term debt less cash and cash equivalents and short-term investments. The Group considers as capital the equity attributable to equity holders of the Parent Company.

As of December 31, 2012 and 2011, the Group had the following ratios:

2012 2011 (In Thousands) Long-term debt P=1,845,062 P=950,675 Less: Cash and cash equivalents 1,864,017 1,214,231 Short-term investments – 2,956 Net debt (18,955) (266,512) Equity attributable to equity holders of Cebu Holdings, Inc. P=4,954,354 P=4,705,069 Debt to equity 37.24% 20.21% Net debt to equity (0.38%) (5.66%)

25. Segment Information

The business segments where the Group operates are as follows:

Core business: • Commercial development - sale of commercial lots and club shares • Residential development - sale of high-end residential lots and condominium units • Shopping centers - development of shopping centers and lease to third parties of retail space and land therein; operation of movie theaters, food courts, entertainment facilities and carparks in these shopping centers; management and operation of malls • Corporate business - development and lease of office buildings • Others - other investing activities such as investment in joint ventures and sale of non-core assets

No business segments have been aggregated to form the reportable business segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The accounting and measurement policies used are consistent with the policies used in preparing general-purpose financial statements.

Sales, costs and expenses include amounts that are directly attributable to each segment. Items that are not directly identified are allocated based on the segment’s proportionate share on the total revenue. Starting 2010, intersegment accounts of the reportable business segments are reported on a gross basis, this resulted in the increase of the amounts under the reportable business segments. *SGVMG100137* - 50 -

Business Segments

The following tables regarding business segments present assets and liabilities as of December 31, 2012 and 2011 and revenue and expense information for the three years period ended December 31, 2012.

2012

Eliminations Commercial Residential Shopping Corporate and Development Development Centers Business Others Adjustments Total (In Thousands) Revenue Sales to external customers P=86,876 P=283,587 P=886,581 P=29,508 P=– (P=25,901) P=1,260,651 Equity in net earnings of associates – – – – 194,026 (120,125) 73,901 Total revenue 86,876 283,587 886,581 29,508 194,026 (146,026) 1,334,552 Operating expenses (59,137) (279,090) (470,989) (8,425) (151,251) 20,620 (948,272) Operating profit (loss) 27,739 4,497 415,592 21,083 42,775 (125,406) 386,280 Interest income 4,461 15,331 – – 63,387 – 83,179 Other income – 24,562 11,056 1,387 264,346 (86,048) 215,303 Interest and other financing charges – – – – (43,545) – (43,545) Other charges – – – – (1,528) – (1,528) Benefit from (provision for) income tax – (23,228) (81,915) (3,876) (58,278) 264 (167,033) Net income (loss) P=32,200 P=21,162 P=344,733 P=18,594 P=267,157 (P=211,190) P=472,656 Net income (loss) attributable to: Equity holders of Cebu Holdings, Inc, P=32,200 P=14,410 P=342,906 P=14,176 P=248,790 (P=211,190) P=441,292 Non-controlling interests 6,752 1,827 4,418 18,367 – 31,364 P=32,200 P=21,162 P=344,733 P=18,594 P=267,157 (P=211,190) P=472,656 Other Information Segment assets P=718,012 P=1,339,559 P=4,262,438 P=520,031 P=1,903,994 P=215,874 P=8,959,908 Investments in associates – – – – 2,213,957 (1,433,440) 780,517 Deferred tax assets – – 849 – 7,789 – 8,638 Total assets P=718,012 P=1,339,559 P=4,263,287 P=520,031 P=4,125,740 (P=1,217,566) P=9,749,063 Segment liabilities P=– P=197,090 P=135,404 P=22,285 P=4,056,629 P=22,315 P=4,433,723 Deferred tax liabilities – 13,759 (4,623) – 8,517 15,441 33,094 Total liabilities P=– P=210,849 P=130,781 P=22,285 P=4,065,146 P=37,756 P=4,466,817 Segment additions to property and equipment and investment properties P=– P=– P=1,604,628 P=– P=22,886 P=– P=1,627,514 Depreciation and amortization P=– P=– P=125,660 P=235 P=12,467 P= P=138,362

*SGVMG100137* - 51 -

2011

Eliminations Commercial Residential Shopping Corporate and Development Development Centers Business Others Adjustments Total (In Thousands) Revenue Sales to external customers P=131,333 P=114,902 P=855,273 P=88,133 P=– (P=25,016) P=1,164,625 Equity in net earnings of associates – – – – 17,307 11,198 28,505 Total revenue 131,333 114,902 855,273 88,133 17,307 (13,818) 1,193,130 Operating expenses (62,485) (118,302) (433,050) (15,287) (187,776) 8,819 (808,081) Operating profit (loss) 68,848 (3,400) 422,223 72,846 (170,469) (4,999) 385,049 Interest income – – 1,863 – 57,521 – 59,384 Other income 32,300 16,769 85,833 – 141,332 (86,047) 190,187 Interest and other financing charges – – (462) – (21,947) – (22,409) Other charges – – – – (4,080) – (4,080) Benefit from (provision for) income tax (9,500) (4,011) (157,342) (5,581) 32,449 868 (143,117) Net income (loss) P=91,648 P=9,358 P=352,115 P=67,265 P=34,806 (P=90,178) P=465,014 Net income (loss) attributable to: Equity holders of Cebu Holdings, Inc, 74,555 9,358 352,115 51,283 27,200 (90,178) P=424,333 Non-controlling interests 17,093 – – 15,982 7,606 – 40,681 P=91,648 P=9,358 P=352,115 P=67,265 P=34,806 (P=90,178) P=465,014 Other Information Segment assets P=1,168,464 P=209,983 P=2,982,013 P=515,093 P=1,345,467 P=210,360 P=6,431,380 Investments in associates − − − − 2,247,998 (1,557,644) 690,354 Deferred tax assets 2,813 − 843 3,893 2,030 − 9,579 Total assets P=1,171,277 P=209,983 P=2,982,856 P=518,986 P=3,595,495 (P=1,347,284) P=7,131,313 Segment liabilities (assets) P=277,453 P=208,005 P=1,406,168 P=39,812 P=208,896 (P=65,968) P=2,074,366 Deferred tax liabilities (assets) − 20,968 (15,740) − 7,623 15,705 28,556 Total liabilities (assets) P=277,453 P=228,973 P=1,390,428 P=39,812 P=216,519 (P=50,263) P=2,102,922 Segment additions to property and equipment and investment properties P=− P=29 P=222,294 P=1,684 P=10,690 P=− P=234,697 Depreciation and amortization P=− P=3 P=116,363 P=5,603 P=15,085 P=− P=137,054 Provision for impairment losses P=− P=− P=− P=1,000 P=− P=− P=1,000

*SGVMG100137* - 52 -

2010

Eliminations Commercial Residential Shopping Corporate and Development Development Centers Business Others Adjustments Total (In Thousands) Revenue Sales to external customers P=174,356 P=272,852 P=784,406 P=69,432 P=29,219 (P=56,750) P=1,273,515 Equity in net earnings of associates – – – – 11,831 17,189 29,020 Total revenue 174,356 272,852 784,406 69,432 41,050 (39,561) 1,302,535 Operating expenses (84,368) (239,923) (395,378) (198,876) (32,659) 37,317 (913,887) Operating profit (loss) 89,988 32,929 389,028 (129,444) 8,391 (2,244) 388,648 Interest income 13,331 – – 17,081 21,828 – 52,240 Other income 48,580 1,998 77,556 108,989 16,019 (86,047) 167,095 Interest and other financing charges – – – (25,347) – – (25,347) Other charges – – – – (1,824) – (1,824) Benefit from (provision for) income tax (5,774) – (6,897) (116,262) (7,244) 628 (135,549) Net income (loss) P=146,125 P=34,927 P=459,687 (144,983) P=37,170 (P=87,663) P=445,263 Net income (loss) attributable to: Equity holders of Cebu Holdings, Inc, P=127,236 P=34,927 P=459,687 (P=149,625) P=21,638 (P=87,663) P=406,200 Non-controlling interests 18,889 – – 4,642 15,532 – 39,063 P=146,125 P=34,927 P=459,687 (P=144,983) P=37,170 (P=87,663) P=445,263 Other Information Segment assets P=2,137,099 P=354,916 P=4,984,372 P=268,599 (P=857,925) (P=1,253,184) P=5,633,877 Investments in associates 393,575 – – – – – 393,575 Deferred tax assets 3,277 – – 4,758 2,903 – 10,938 Total assets P=2,533,951 P=354,916 P=4,984,372 P=273,357 (P=855,022) (P=1,253,184) P=6,038,390 Segment liabilities P=452,905 (P=30,366) P=572,958 P=47,075 P=290,868 (P=55,675) P=1,277,765 Deferred tax liabilities – – – – 19,475 16,573 36,048 Total liabilities P=452,905 (P=30,366) P=572,958 P=47,075 P=310,343 (P=39,102) P=1,313,813 Segment additions to property and equipment and investment properties P=– P=– P=68,114 P=37,034 P=30,642 P=– P=135,790 Depreciation and amortization P=5,960 P=– P=108,753 P=1,270 P=14,526 P=– P=130,509 Provision for impairment losses P=– P=– P=151 P=– P=– P=– P=151

Commercial development sales made to a significant customer amounted to P=319.1 million.

*SGVMG100137* - 53 -

26. Leases

Operating Leases - Group as Lessor The Group enters into lease agreements with third parties covering rentals of commercial and office spaces and land therein. These leases generally provide for either (a) fixed monthly rent, or (b) minimum rent on a certain percentage of gross revenue, whichever is higher. All leases include a clause to enable upward revision on its rental charge on annual basis based on prevailing market conditions.

Future minimum rentals receivable under non-cancellable operating leases of the Group are as follows:

2012 2011 (In Thousands) Within one year P=12,005 P=21,719 After one year but not more than five years – 1,584 P=12,005 P=23,303

Contingent rent recognized in 2012, 2011 and 2010 amounted to P=52.1 million, P=92.9 million and P=85.5 million, respectively.

Operating Leases - Group as Lessee The Group entered into lease agreements with third parties. These leases generally provide for either (a) fixed monthly rent, or (b) minimum rent or a certain percentage of gross revenue, whichever is higher.

27. Interest in Joint Ventures

The Group has entered into joint venture agreements with various landowners which include related parties. The Group’s share in the joint ventures ranges from 25% to 34%. These joint venture agreements relate to the development and sale of subdivision lots and condominium projects with certain specified lots or units allocated to the joint venture partner. The Group’s joint venture arrangements typically require the joint venture partner to contribute the land free from any lien, encumbrance and tenants or informal settlers to the project with the Group bearing costs related to land development and the construction of subdivision and condominium facilities. Sales and marketing costs are allocated to both the Group and the joint venture partners. The projects covering the joint venture agreements are expected to be completed in 2014.

The amounts disclosed in segment information under residential development relate to the joint venture agreements. Capital commitments amounted to P=924.0 million and P=726.1 million as of December 31, 2012 and 2011, respectively.

*SGVMG100137* - 54 -

28. Philippine Economic Zone Authority (PEZA) Registration

CPVDC was registered with PEZA on April 6, 2000 as an Information Technology (IT) Park developer or operator and was granted approval by PEZA on October 10, 2001. The PEZA registration entitled CPVDC to a four-year tax holiday from the start of approval of registered activities. At the expiration of its four-year tax holiday, CPVDC pays income tax at the special rate of 5% on its gross income earned from sources within the PEZA economic zone in lieu of paying all national and local income taxes.

29. Notes to Consolidated Statements of Cash Flows

Noncash activities of the Group pertain to:

• Transfers from investment properties to inventories amounting to P=14.1 million in 2012. • Elimination of intercompany profit arising from a downstream sale transaction amounting to P=101.4 million in 2011. • Equity in realized profit from an associate amounting to P=9.0 million and P=16.9 million in 2012 and 2011, respectively. • Accrued construction billings (included in accounts and other payables) recognized under inventories amounted to P=332.1 million and P=146.0 million in 2012 and 2011, respectively. Accrued construction billings under investment properties amounted to P=846.8 million in 2012.

*SGVMG100137*

INDEX TO THE FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

Schedule I : Reconciliation of retained earnings available for dividend declaration Schedule II : Map showing the relationships between and among the companies in the Group, its ultimate parent company and co-subsidiaries Schedule III : Schedule of all effective standards and interpretations under Philippine Financial Reporting Standards

*SGVMG100137*

SCHEDULE I

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2012

Unappropriated Retained Earnings, beginning P=1,851,753,309 Adjustments: (See adjustments in previous year’s Reconciliation) (112,035,688) Unappropriated Retained Earnings, as adjusted, beginning 1,739,717,621 Net income based on the face of AFS 367,233,353 Less: Non-actual / unrealized income net of tax – Equity in net income of associate/joint venture – Other unrealized gains or adjustments to the retained earnings as a result of certain transactions accounted for under the PFRS – Net income actually earned during the year 367,233,353 Other adjustments: Amount of provision for deferred tax during the year 4,802,973 Dividends declared (192,007,362) Appropriation during the year (1,300,000,000) (1,487,204,389) Unappropriated Retained Earnings, end available for dividend distribution P=619,746,585

*SGVMG100137*

SCHEDULE II

CEBU HOLDINGS INC. AND SBUBSIDIARIES MAP SHOWING THE RELATIONSHIPS BETWEEN AND AMONG THE COMPANIES IN THE GROUP, ITS ULTIMATE PARENT COMPANY AND CO-SUBSIDIARIES

PCD PCD Nominee First Metro Ayala Land, Nominee Corporation Investment Inc. Others Corporation (Non-Filipino) Corp. 49.80% 4.10% (Filipino) 14.36% 9.72% 22.02%

CEBU HOLDINGS, INC.

Cebu Cebu Cebu

CBP Theatre

Property Leisure Insular

Management

Ventures, Company, Hotel, Solinea, Inc.

Company,

Inc. Inc. Company, 35.00%

Inc.

76.26% 100.00% Inc.

100.00%

37.06%

Asian I-

Office

Properties,

Inc.

40.00%

*SGVMG100137*

SCHEDULE III

Cebu Holdings, Inc. and Subsidiaries List of Applicable Standards and Interpretations December 31, 2012

PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 Framework for the Preparation and Presentation of Financial Statements Conceptual Framework Phase A: Objectives and qualitative characteristics ü PFRSs Practice Statement Management Commentary ü Philippine Financial Reporting Standards PFRS 1 First-time Adoption of Philippine Financial Reporting (Revised) Standards ü Amendments to PFRS 1 and PAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate ü Amendments to PFRS 1: Additional Exemptions for First- time Adopters ü Amendment to PFRS 1: Limited Exemption from Comparative PFRS 7 Disclosures for First-time Adopters ü Amendments to PFRS 1: Severe Hyperinflation and Removal of Fixed Date for First-time Adopters ü Amendments to PFRS 1: Government Loans ü PFRS 2 Share-based Payment ü Amendments to PFRS 2: Vesting Conditions and Cancellations ü Amendments to PFRS 2: Group Cash-settled Share-based Payment Transactions ü PFRS 3 Business Combinations (Revised) ü PFRS 4 Insurance Contracts ü Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts ü PFRS 5 Non-current Assets Held for Sale and Discontinued Operations ü PFRS 6 Exploration for and Evaluation of Mineral Resources ü PFRS 7 Financial Instruments: Disclosures ü Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets ü Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition ü

*SGVMG100137*

- 2 -

PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 Amendments to PFRS 7: Improving Disclosures about Financial Instruments ü Amendments to PFRS 7: Disclosures - Transfers of Financial Assets ü Amendments to PFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities ü Amendments to PFRS 7: Mandatory Effective Date of PFRS 9 and Transition Disclosures ü PFRS 8 Operating Segments ü PFRS 9 Financial Instruments ü Amendments to PFRS 9: Mandatory Effective Date of PFRS 9 and Transition Disclosures ü PFRS 10 Consolidated Financial Statements ü PFRS 11 Joint Arrangements ü PFRS 12 Disclosure of Interests in Other Entities ü PFRS 13 Fair Value Measurement ü Philippine Accounting Standards PAS 1 Presentation of Financial Statements ü (Revised) Amendment to PAS 1: Capital Disclosures ü Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation ü Amendments to PAS 1: Presentation of Items of Other Comprehensive Income ü PAS 2 Inventories ü PAS 7 Statement of Cash Flows ü PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ü PAS 10 Events after the Reporting Date ü PAS 11 Construction Contracts ü PAS 12 Income Taxes ü Amendment to PAS 12 - Deferred Tax: Recovery of Underlying Assets ü PAS 16 Property, Plant and Equipment ü PAS 17 Leases ü PAS 18 Revenue ü PAS 19 Employee Benefits ü Amendments to PAS 19: Actuarial Gains and Losses, Group Plans and Disclosures ü

*SGVMG100137*

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Adopted Not Not PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Applicable INTERPRETATIONS Effective as of December 31, 2012 PAS 19 Employee Benefits (Amended) ü PAS 20 Accounting for Government Grants and Disclosure of Government Assistance ü PAS 21 The Effects of Changes in Foreign Exchange Rates ü Amendment: Net Investment in a Foreign Operation ü PAS 23 Borrowing Costs (Revised) ü PAS 24 Related Party Disclosures (Revised) ü PAS 26 Accounting and Reporting by Retirement Benefit Plans ü PAS 27 Consolidated and Separate Financial Statements ü PAS 27 Separate Financial Statements (Amended) ü PAS 28 Investment in Associates ü PAS 28 Investments in Associates and Joint Ventures (Amended) ü PAS 29 Financial Reporting in Hyperinflationary Economies ü PAS 31 Interests in Joint Ventures ü PAS 32 Financial Instruments: Disclosure and Presentation ü Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation ü Amendment to PAS 32: Classification of Rights Issues ü Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities ü PAS 33 Earnings per Share ü PAS 34 Interim Financial Reporting ü PAS 36 Impairment of Assets ü PAS 37 Provisions, Contingent Liabilities and Contingent Assets ü PAS 38 Intangible Assets ü PAS 39 Financial Instruments: Recognition and Measurement ü Amendments to PAS 39: Transition and Initial Recognition of Financial Assets and Financial Liabilities ü Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions ü Amendments to PAS 39: The Fair Value Option ü

*SGVMG100137*

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PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts ü Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets ü Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition ü Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives ü Amendment to PAS 39: Eligible Hedged Items ü PAS 40 Investment Property ü PAS 41 Agriculture ü Philippine Interpretations IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities ü IFRIC 2 Members' Share in Co-operative Entities and Similar Instruments ü IFRIC 4 Determining Whether an Arrangement Contains a Lease ü IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds ü IFRIC 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment ü IFRIC 7 Applying the Restatement Approach under PAS 29 Financial Reporting in Hyperinflationary Economies ü IFRIC 8 Scope of PFRS 2 ü IFRIC 9 Reassessment of Embedded Derivatives ü Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives ü IFRIC 10 Interim Financial Reporting and Impairment ü IFRIC 11 PFRS 2- Group and Treasury Share Transactions ü IFRIC 12 Service Concession Arrangements ü IFRIC 13 Customer Loyalty Programmes ü IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction ü Amendments to Philippine Interpretations IFRIC- 14, Prepayments of a Minimum Funding Requirement ü IFRIC 16 Hedges of a Net Investment in a Foreign Operation ü IFRIC 17 Distributions of Non-cash Assets to Owners ü IFRIC 18 Transfers of Assets from Customers ü

*SGVMG100137*

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PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments ü IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine ü SIC-7 Introduction of the Euro ü SIC-10 Government Assistance - No Specific Relation to Operating Activities ü SIC-12 Consolidation - Special Purpose Entities ü Amendment to SIC - 12: Scope of SIC 12 ü SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers ü SIC-15 Operating Leases - Incentives ü SIC-25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders ü SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease ü SIC-29 Service Concession Arrangements: Disclosures. ü SIC-31 Revenue - Barter Transactions Involving Advertising Services ü SIC-32 Intangible Assets - Web Site Costs ü

*SGVMG100137*

SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines

Phone: (632) 891 0307 Fax: (632) 819 0872 www.sgv.com.ph

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015 SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015

INDEPENDENT AUDITORS’ REPORT ON THE SUPPLEMENTARY SCHEDULES

The Stockholders and the Board of Directors Cebu Holdings, Inc. 7th Floor, Cebu Holdings Center Cebu Business Park, Cebu City

We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements of Cebu Holdings, Inc. and its subsidiaries (the Group) as at December 31, 2012 and 2011 and for each of the three years in the period ended December 31, 2012 included in this Form 17-A and have issued our report thereon dated March 7, 2013. Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The schedules A to K listed in the Index to the Consolidated Financial Statements and Supplementary Schedules are the responsibility of the Group’s management. These schedules are presented for purposes of complying with Securities Regulation Code Rule 68, as Amended (2011) and are not part of the basic consolidated financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly state, in all material respects, the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

SYCIP GORRES VELAYO & CO.

March 7, 2013

A member firm of Ernst & Young Global Limited INDEX TO THE FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

Schedule Contents

A Financial Assets

B Amounts Receivable from Directors, Officers, Employees, Related Parties, and Principal Stockholders (Other than Related parties)

C Amounts Receivable from Related Parties which are Eliminated during 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 the Group, its Ultimate Parent Company and Co-subsidiaries

K Schedule of All Effective Standards and Interpretations Under Philippine Financial Reporting Standards

SCHEDULE A

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF FINANCIAL ASSETS DECEMBER 31, 2012

Number of shares or principal Amount shown Name of Issuing entity and association of amount of bonds in the balance Income received each issue and notes sheet or accrued

Not Applicable The Group does not have financial assets at fair value through profit or loss.

SCHEDULE B

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES, AND PRINCIPAL STOCKHOLDERS (OTHER THAN RELATED PARTIES) DECEMBER 31, 2012

Balance at Balance at Name and Designation of beginning of Amounts the end of debtor period Additions collected Current Not Current the period ALAJID, ROMULO M P=241,716 P=– P=73,017 P= 73,017 P= 95,682 P= 168,699 ALFANTE, ERNESTO T 111,461 376,994 149,161 75,399 263,895 339,294 ALICAYA, NOEL F 355,784 80,000 112,567 140,275 182,942 323,217 BOHOLST, JUDILYNE L 692,494 – 692,494 – – – CADIZ, LEONARD B 284,159 – 75,399 75,399 133,362 208,760 CASINILLO, RIZALITO S 4,170 – 4,170 – – – DEL ROSARIO, CLEMENT GERALD G 1,272,327 – 132,780 132,780 1,006,768 1,139,547 DEE, JOSEPH FRANCISCO – 150,773 94,853 55,920 – 55,920 DELIMA, JOSIE – 62,813 20,938 41,875 – 41,875 DY, CELESTE BERNARDINE K 356,875 – 86,999 86,999 182,878 269,877 GO, SUZETTE T 1,531,424 76,663 263,962 163,040 1,181,086 1,344,126 GONZALES, WILFREDO W 331,907 83,750 170,749 86,999 157,910 244,909 JAPZON, JEANETTE A 287,301 – 75,399 75,399 136,503 211,902 LOPEZ, LEVI L – 422,730 79,262 105,683 237,786 343,468 MANANQUIL, RAUL S 2,445,657 – 331,117 331,117 1,783,424 2,114,541 MAWE, ELVIRA G 1,835,753 – 257,918 257,918 1,319,918 1,577,836 POLLOSO, JOY R – 3,000,000 290,907 290,907 2,418,186 2,709,093 PARRENO, JANICE – 376,994 56,549 75,399 245,046 320,444 REUYAN, RUDY I 53,020 129,709 67,659 92,090 22,979 115,070 REY, DOMINADOR M 31,788 – 31,788 – – – SIA, JENNIFER – 347,994 26,100 69,599 252,296 321,894 SUAN, JONAS – 376,994 37,699 75,399 263,895 339,294 TRACES, FRANCISCO GIOVANNI O 249,601 – 75,399 75,399 98,804 174,203 URBINA, MA. CECILIA T 1,134,561 45,000 279,738 267,238 632,584 899,822 TOTAL P=11,219,999 P=5,530,412 P=3,486,620 P= 2,647,847 P=10,615,944 P=13,263,791

SCHEDULE C

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF AMOUNTS RECEIVABLE FROM RELATED PARTIES WHICH ARE ELIMINATED DURING THE CONSOLIDATION OF FINANCIAL STATEMENTS DECEMBER 31, 2012

Receivable Payable Balance Balance per per CHI Current CHI Parent Subsidiaries Portion CPVDC P=372,803 P=372,803 P=372,803 CLCI 460,905 460,905 460,905 CBPTMI 25,993 25,993 25,993 Total Eliminated Receivables P=859,701 P=859,701 P=859,701

SCHEDULE D

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF INTANGIBLE ASSETS - OTHER ASSETS DECEMBER 31, 2012

Intangible Assets - Other Assets Other Charged to Charged to changes Beginning Additions at cost and other additions Ending Description Balance cost expenses accounts (deductions) Balance

Not Applicable The Group does not have intangible assets in its statements of financial position.

SCHEDULE E

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF LONG-TERM DEBT DECEMBER 31, 2012

Long-term Debt Amount shown under caption "current Amount shown under Amount portion of long-term” caption “long-term authorized by in related balance debt” in related Title of Issue and type of obligation indenture sheet balance sheet PN - BPI – P=163,314,602 P=1,681,747,061

SCHEDULE F

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF INDEBTEDNESS TO RELATED PARTIES (LONG-TERM LOANS FROM RELATED COMPANIES) DECEMBER 31, 2012

Indebtedness to related parties (Long-term loans from Related Companies) Name of related party Balance at beginning of period Balance at end of period

Not Applicable The Group does not have long-term loans from related companies in its statements of financial position.

SCHEDULE G

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF GUARANTEES OF SECURITIES OF OTHER ISSUERS DECEMBER 31, 2012

Guarantees of Securities of Other Issuers Name of issuing entity of Title of issue of Amount owned securities guaranteed by each class of Total amount by person for the company for which securities guaranteed and which statement Nature of this statement is filed guaranteed outstanding is file guarantee

Not Applicable The Group does not have any guarantees of securities of other issuing entities by the issuer for which the statement is filed.

SCHEDULE H

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF CAPITAL STOCK DECEMBER 31, 2012

Capital Stock Number of Number of shares issued shares reserved and outstanding for options Number of as shown under warrants, Number of Directors, shares related balance conversion and shares held by officers and Title of Issue authorized sheet caption other rights related parties employees Others Capital Stock 3,000,000,000 1,920,073,623 – 1,841,461,681 231,105 78,611,942

SCHEDULE I

CEBU HOLDINGS, INC AND SUBSIDIARIES SUPPLEMENTARY SCHEDULE OF RETAINED EARNINGS DECEMBER 31, 2012

SCHEDULE J

CEBU HOLDINGS INC. AND SUBSIDIARIES MAP SHOWING THE RELATIONSHIPS BETWEEN AND AMONG THE COMPANIES IN THE GROUP, ITS ULTIMATE PARENT COMPANY AND CO-SUBSIDIARIES DECEMBER 31, 2012

PCD PCD Nominee First Metro Ayala Land, Nominee Corporation Investment Inc. Others Corporation (Non-Filipino) Corp. 49.80% 4.10% (Filipino) 14.36% 9.72% 22.02%

CEBU HOLDINGS, INC.

Cebu Cebu

CBP Theatre

Leisure Insular

Cebu

Management

Company, Hotel, Solinea, Inc.

Property

Company,

Inc. Company, 35.00%

Ventures and

Inc.

100.00% Inc.

Development

100.00%

37.06%

Corporation

76.26%

Asian I-

Office

Properties,

Inc.

40.00%

SCHEDULE K

CEBU HOLDINGS INC. AND SUBSIDIARIES LIST OF EFFECTIVE STANDARDS AND INTERPRETATIONS DECEMBER 31, 2012

PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 Framework for the Preparation and Presentation of Financial Statements Conceptual Framework Phase A: Objectives and qualitative characteristics  PFRSs Practice Statement Management Commentary  Philippine Financial Reporting Standards PFRS 1 First-time Adoption of Philippine Financial Reporting (Revised) Standards  Amendments to PFRS 1 and PAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate  Amendments to PFRS 1: Additional Exemptions for First- time Adopters  Amendment to PFRS 1: Limited Exemption from Comparative PFRS 7 Disclosures for First-time Adopters  Amendments to PFRS 1: Severe Hyperinflation and Removal of Fixed Date for First-time Adopters  Amendments to PFRS 1: Government Loans  PFRS 2 Share-based Payment  Amendments to PFRS 2: Vesting Conditions and Cancellations  Amendments to PFRS 2: Group Cash-settled Share-based Payment Transactions  PFRS 3 Business Combinations (Revised)  PFRS 4 Insurance Contracts  Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts  PFRS 5 Non-current Assets Held for Sale and Discontinued Operations  PFRS 6 Exploration for and Evaluation of Mineral Resources  PFRS 7 Financial Instruments: Disclosures  Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets  Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition 

- 2 -

PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 Amendments to PFRS 7: Improving Disclosures about Financial Instruments  Amendments to PFRS 7: Disclosures - Transfers of Financial Assets  Amendments to PFRS 7: Disclosures – Offsetting Financial Not Early Adopted Assets and Financial Liabilities Amendments to PFRS 7: Mandatory Effective Date of Not Early Adopted PFRS 9 and Transition Disclosures PFRS 8 Operating Segments  PFRS 9 Financial Instruments Not Early Adopted Amendments to PFRS 9: Mandatory Effective Date of Not Early Adopted PFRS 9 and Transition Disclosures PFRS 10 Consolidated Financial Statements Not Early Adopted PFRS 11 Joint Arrangements Not Early Adopted PFRS 12 Disclosure of Interests in Other Entities Not Early Adopted PFRS 13 Fair Value Measurement Not Early Adopted Philippine Accounting Standards PAS 1 Presentation of Financial Statements  (Revised) Amendment to PAS 1: Capital Disclosures  Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation  Amendments to PAS 1: Presentation of Items of Other Not Early Adopted Comprehensive Income PAS 2 Inventories  PAS 7 Statement of Cash Flows  PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors  PAS 10 Events after the Reporting Date  PAS 11 Construction Contracts  PAS 12 Income Taxes  Amendment to PAS 12 - Deferred Tax: Recovery of Underlying Assets  PAS 16 Property, Plant and Equipment  PAS 17 Leases  PAS 18 Revenue  PAS 19 Employee Benefits  Amendments to PAS 19: Actuarial Gains and Losses, Group Plans and Disclosures 

- 3 -

Adopted Not Not PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Applicable INTERPRETATIONS Effective as of December 31, 2012 PAS 19 Employee Benefits Not Early Adopted (Amended) PAS 20 Accounting for Government Grants and Disclosure of Government Assistance  PAS 21 The Effects of Changes in Foreign Exchange Rates  Amendment: Net Investment in a Foreign Operation  PAS 23 Borrowing Costs (Revised)  PAS 24 Related Party Disclosures (Revised)  PAS 26 Accounting and Reporting by Retirement Benefit Plans  PAS 27 Consolidated and Separate Financial Statements  PAS 27 Separate Financial Statements Not Early Adopted (Amended) PAS 28 Investment in Associates  PAS 28 Investments in Associates and Joint Ventures Not Early Adopted (Amended) PAS 29 Financial Reporting in Hyperinflationary Economies  PAS 31 Interests in Joint Ventures  PAS 32 Financial Instruments: Disclosure and Presentation  Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation  Amendment to PAS 32: Classification of Rights Issues  Amendments to PAS 32: Offsetting Financial Assets and Not Early Adopted Financial Liabilities PAS 33 Earnings per Share  PAS 34 Interim Financial Reporting  PAS 36 Impairment of Assets  PAS 37 Provisions, Contingent Liabilities and Contingent Assets  PAS 38 Intangible Assets  PAS 39 Financial Instruments: Recognition and Measurement  Amendments to PAS 39: Transition and Initial Recognition of Financial Assets and Financial Liabilities  Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions  Amendments to PAS 39: The Fair Value Option 

- 4 -

PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts  Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets  Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets – Effective Date and Transition  Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives  Amendment to PAS 39: Eligible Hedged Items  PAS 40 Investment Property  PAS 41 Agriculture  Philippine Interpretations IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities  IFRIC 2 Members' Share in Co-operative Entities and Similar Instruments  IFRIC 4 Determining Whether an Arrangement Contains a Lease  IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds  IFRIC 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment  IFRIC 7 Applying the Restatement Approach under PAS 29 Financial Reporting in Hyperinflationary Economies  IFRIC 8 Scope of PFRS 2  IFRIC 9 Reassessment of Embedded Derivatives  Amendments to Philippine Interpretation IFRIC–9 and PAS 39: Embedded Derivatives  IFRIC 10 Interim Financial Reporting and Impairment  IFRIC 11 PFRS 2- Group and Treasury Share Transactions  IFRIC 12 Service Concession Arrangements  IFRIC 13 Customer Loyalty Programmes  IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction  Amendments to Philippine Interpretations IFRIC- 14, Prepayments of a Minimum Funding Requirement  IFRIC 16 Hedges of a Net Investment in a Foreign Operation  IFRIC 17 Distributions of Non-cash Assets to Owners  IFRIC 18 Transfers of Assets from Customers 

- 5 -

PHILIPPINE FINANCIAL REPORTING STANDARDS AND Adopted Not Not INTERPRETATIONS Adopted Applicable Effective as of December 31, 2012 IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments  IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine Not Early Adopted SIC-7 Introduction of the Euro  SIC-10 Government Assistance - No Specific Relation to Operating Activities  SIC-12 Consolidation - Special Purpose Entities  Amendment to SIC - 12: Scope of SIC 12  SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers  SIC-15 Operating Leases - Incentives  SIC-25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders  SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease  SIC-29 Service Concession Arrangements: Disclosures.  SIC-31 Revenue - Barter Transactions Involving Advertising Services  SIC-32 Intangible Assets - Web Site Costs 