FLI 17A and FS Combined File
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C O V E R S H E E T SEC Registration Number 1 7 0 9 5 7 C O M P A N Y N A M E F I L I N V E S T L A N D , I N C . A N D S U B S I D I A R I E S PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province ) 7 9 E D S A , B r g y . H i g h w a y H i l l s , M a n d a l u y o n g C i t y Form Type Department requiring the report Secondary License Type, If Applicable 1 7 - A C O M P A N Y I N F O R M A T I O N Company’s Email Address Company’s Telephone Number Mobile Number 918-8188 No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day) 5,735 Every 2nd Friday of 12/31 April Each Year CONTACT PERSON INFORMATION The designated contact person MUST be an Officer of the Corporation Name of Contact Person Email Address Telephone Number/s Mobile Number Ms. Venus A. Mejia venus.mejia@filinvestg 918-8188 roup.com CONTACT PERSON’s ADDRESS 79 EDSA, Brgy. Highway Hills, Mandaluyong City NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated 2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies. i APPLICABLE ONLY TO ISSUERS INVOLVED IN INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS DURING THE PRECEDING FIVE YEAR: 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 of the Commission. Not Applicable Yes No If any of the following documents are incorporated by reference, briefly describe them and identify the part of SEC Form 17-1 into which the document is incorporated. a) Any annual report to security holders; b) Any proxy or information statement filed pursuant to SRC Rule 20 and 17.1(b); c) Any prospectus filed pursuant to SRC Rule 8.1-1 iii TABLE OF CONTENTS Part 1 – BUSINESS AND GENERAL INFORMATION Item 1. BUSINESS 1.1. Brief Description and Recent Developments 1 1.2. Form and Date of Organization 2 1.3. Subsidiaries 3 1.4. Equity Investment in Filinvest Alabang, Inc. (FAI) 5 1.5. Business Groups, Product Categories, Target Markets & Revenue Contribution 1.5.1 Real Estate Sales Segment 5 1.5.2. Leasing Segment 11 1.6. Marketing and Sales 1.6.1 Real Estate Sales Segment 14 1.6.2 Leasing Segment 16 1.7. Customer Financing for Real Estate Projects 15 1.8. Real Estate Development 16 1.9. Competition 1.9.1. Real Estate Sales Segment 16 1.9.2. Leasing Segment 17 1.10. Related-Party Transactions 17 1.11. Intellectual Property 18 1.12. Government and Environmental Regulations 22 1.13. Employees and Labor 23 1.14. Major Risk Factors 23 Item 2. PROPERTIES 2.1. Land Bank 24 2.2. Current Development Projects 25 2.3. Investment Properties 25 2.4. Property and Equipment 30 Item 3. LEGAL PROCEEDINGS 30 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 31 Part II – OPERATIONAL AND FINANCIAL INFORMATION Item 5. MARKET FOR ISSUER’S COMMON EQUITY & RELATED STOCKHOLDER MATTERS 32 Item 6. BOND ISSUANCES 33 Item 7. MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION 34 Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE 44 PART III – CONTROL AND COMPENSATION INFORMATION Item 9. DIRECTORS AND PRINCIPAL OFFICERS OF THE REGISTRANT 45 Item 10. EXECUTIVE COMPENSATION 45 Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 11.1. Security Ownership of Certain Beneficial Owners as of December 31, 2016 47 11.2. Security Ownership of Management as of December 31, 2016 48 11.3. Voting Trust Holders of 5% or more Changes in Control 49 11.4. Changes in Control 49 Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 49 PART lV – COMPLIANCE WITH LEADING PRACTICES ON CORPORATE GOVERNANCE Item 13. Corporate Governance 50 PART V – EXHIBITS AND SCHEDULES Item 14. EXHIBITS AND REPORTS ON SEC Form 17-C 50 INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES 52 iv Part 1 – BUSINESS AND GENERAL INFORMATION Item 1. BUSINESS 1. 1. Brief Description and Recent Developments Filinvest Land Inc. (“FLI” or “the Parent Company”) is one of the leading real estate developers in the country, providing a wide range of real estate products to residential and commercial customers. FLI (including its predecessor’s operations) has over 50 years of real estate expertise and has developed over 2500 hectares of land, having provided home/home sites for over 200,000 families. FLI is one of the largest nationwide residential developers in 45 cities and towns in 18 provinces in the Philippines. It is also one of the largest mid-rise building (MRB) developers in the country today and a market leader in the affordable and middle-income residential segments. It currently owns a land bank of 2,410 hectares for sustainable future growth. In 2006, FLI acquired three strategic investment properties, Festival Supermall and a 60% ownership interest in each of Filinvest Asia Corp. (FAC) and Cyberzone Properties, Inc. (CPI). In 2006, FLI also entered into a joint venture agreement with Africa-Israel Investments (Phils.), Inc. (“AIIPI”) and incorporated Filinvest AII Philippines Inc. to undertake the development of Timberland Sports and Nature Club (“TSNC”) and approximately 50 hectares of land comprising Phase 2 of FLI’s Timberland Heights township project. TSNC started its commercial operations in October 2008. In February 2010, FLI acquired the remaining 40.0% interest of Africa-Israel Properties (Phils.), Inc. in CPI and 40.0% interest of Africa-Israel Investments (Phils.), Inc. in FAPI to obtain full ownership of the previous joint ventures. The sale by Africa-Israel of its interests in the two companies was part of Africa-Israel’s global portfolio rebalancing and consolidation activity. On the other hand, the acquisition of Africa-Israel’s interests enabled FLI to consolidate its share in the strong and stable recurring revenue streams from the two companies as well as provide incremental development potential to FLI’s existing revenue streams. CPI owns and operates the IT buildings in Northgate Cyberzone, a PEZA registered BPO park located on a 10-hectare parcel of land within Filinvest City. FLI generates revenues from leasable space in sixteen office buildings with a gross leasable area of 212,527 sq.m. as of December 31, 2016. As of the date of this report, FLI owns 60% of FAC, which owns 50% of the 52-storey, PBCom Tower which is located in the Makati’s business district. PBCom Tower is a Grade A, PEZA- registered I.T./office building in Ayala Avenue, Makati City, Metro Manila with approximate GLA of 36,000 sq.m. Festival Supermall is a four-storey premier shopping complex situated on a total land area of 10 hectares and located within FAI’s Filinvest City development in Alabang, Muntinlupa City. FLI has leased from FAI the 10 hectares of land on which the mall and its adjoining structures (such as parking lots) are situated. The lease is for a term of 50 years from October 1, 2006, renewable for another 25 years, with FLI required to pay monthly rent equivalent to 10% of the monthly gross rental revenue generated by the mall. As of this date, FLI has no plans to acquire any additional shopping malls, but intends to undertake commercial and retail projects to complement its residential developments in selected areas. In 2009, the Parent Company signed an agreement with the Cebu City Government to develop 50.6 hectares of the South Road Properties, a 300-hectare reclaimed land project located in Cebu City. The agreement involves purchase by FLI of the 10.6 hectares of the property to be developed into a modern urban center consisting of residential, office, commercial, hotel and leisure buildings and a public promenade which is a one kilometer long waterfront lifestyle strip that will offer a range of 1 seaside leisure activities and the development of the remaining 40 hectares of the property under a profit-sharing arrangement with the Cebu City Government. On February 4, 2014, Filinvest Cyberparks, Inc. (FCI), a wholly-owned subsidiary of FLI was incorporated to manage FLI’s BPO leasing operations in Cebu, Pasay, Quezon City and Pasig City. In July 2015, Filinvest Land, Inc. (FLI), including its subsidiaries and affiliates won the bidding for a 19.20-hectare lot in Cebu’s South Road Properties. The property will be developed and owned by FLI together with its wholly owned subsidiary Cyberzone Properties, Inc. (CPI), its affiliate Filinvest Alabang, Inc. (FAI) and other strategic partners. However, in a letter to the Cebu City Mayor dated February 7, 2017, the Filinvest Consortium expressed its decision to rescind the Deed of Sale on Installment (DSI) covering its acquisition of the 19.2-hectare SRP lot. Under the DSI, Cebu City undertook to comply with several covenants, undertakings and obligations no later than February 7, 2016 (or 180 days from the execution of the DSI).