COVER SHEET C S 2 0 0 3 2 1 2 4 0 SEC REGISTRATION NUMBER C E B U L A N D M A S T E R S , I N C . (Company Name) 1 0 T H F L O O R , P A R K C E N T R A L E , B 2 L 3 , J O S E M A . D E L M A R S T . , C E B U I T P A R K , A P A S , C E B U C I T Y (Business Address: No. Street/City/Province) Atty. Larri-Nil Veloso 032-231-4870 Contact Person Company Telephone Number 1 2 3 1 17-A 0 5 3 0 Month Day Form Type Month Day Annual Meeting Secondary License Type, If Applicable Dept. Requiring this Doc Amended Articles Number/Section Total Amount of Borrowings Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document I.D. Cashier 1 SEC Number: CS200321240 File Number: ________ CEBU LANDMASTERS, INC. ___________________________________ (Company’s Full Name) 10TH FLOOR, PARK CENTRALE, B2 L3, JOSE MA. DEL MAR ST., CEBU IT PARK, APAS, CEBU CITY ___________________________________ (Company Address) (032) 231-4914 ___________________________________ (Telephone Number) December 31, 2018 ___________________________________ (Fiscal Year Ended) SEC Form 17-A Annual Report ___________________________________ (Form Type) - ___________________________________ (Amendments) 2 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended December 31, 2018 2. SEC Identification Number CS200321240 3. BIR Tax Identification No. 227-599-320 4. Exact name of issuer as specified in its charter CEBU LANDMASTERS, INC 5. Province, Country or other jurisdiction of incorporation or organization CEBU CITY, CEBU, PHILIPPINES 6. Industry Classification Code (SEC Use Only) 7. Address of principal office 10th FLOOR, PARK CENTRALE, B2 L3, JOSE MA. DEL MAR ST., CEBU IT PARK, APAS, CEBU CITY Postal Code 6000 8. Issuer's telephone number, including area code (032) 231-4914 9. Former name, former address, and former fiscal year, if changed since last report not applicable 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Number of shares issued and Title of each class outstanding COMMON SHARES 1,667,500,000 11. Are any or all of these securities listed on a Stock Exchange. Yes [ X] No [ ] If yes, state the name of such stock exchange and the classes of securities listed therein: Stock Exchange: Philippine Stock Exchange Securities listed: Common shares 12. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports); Yes [X] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days. Yes [X] No [ ] 13. Aggregate market value of the voting stock held by non-affiliates: P2,111,342,040 as of December 31, 2018 3 TABLE OF CONTENTS PART I – BUSINESS AND GENERAL INFORMATION Item 1 Business 5 Item 2 Properties 27 Item 3 Legal Proceedings 32 Item 4 Submission of Matters to a Vote of Security Holders 32 PART II – OPERATIONAL AND FINANCIAL INFORMATION Item 5 Market for Registrant’s Common Equity and Related Stockholder Matters 35 Item 6 Management’s Discussion and Analysis or Plan of Operation 38 Item 7 Financial Statements 47 Item 8 Changes in and Disagreements with Accountants and Financial Disclosure 47 PART III – CONTROL AND COMPENSATION INFORMATION Item 9 Directors and Executive Officers of the Registrant 48 Item 10 Executive Compensation 52 Item 11 Security Ownership of Certain Beneficial Owners and Management 53 Item 12 Certain Relationships and Related Transactions 54 PART IV – CORPORATE GOVERNANCE Item 13 Corporate Governance 55 PART V – EXHIBITS AND SCHEDULES Item 14 Exhibits 60 Item 15 Reports on SEC Form 17-C 60 SIGNATURES 61 4 PART I – BUSINESS AND GENERAL INFORMATION Item 1 Business BACKGROUND Cebu Landmasters, Inc. (“CLI” or “the Company”) was incorporated in September 26, 2003. In June 2, 2017, the company was officially listed in the Philippine stock market with “CLI” as its ticker symbol. 430,000,000 shares were issued and fully subscribed at P5.00 per share. After 15 years of operations, the company has diversified its portfolio to match the different demands of the property sector. As of 2018, CLI has a total of 55 projects in different stages of development, of which 15 are Residential Subdivisions, 20 Residential Condominiums, 5 Offices, 3 Hotels, 6 Retails, 5 Mixed-use and an estate development which was recently launched. In a 2017 study made by the research firm, Santos Knight Frank, Cebu Landmasters leads the VisMin property sector for both horizontal and vertical developments. The research covers cities of Cebu, Davao and Cagayan de Oro. In Cebu, CLI is number one in the house and lot segment accounting for 18% of the supply and takes up 12% share of the condo market. In Davao and CDO, the company posts the highest take-up with an absorption rate of 97.96% and 93% respectively. CLI’s proven track record covers a diverse range of real estate product offerings. It caters to the high- end, mid-market, economic and socialized housing segments. This ability to tailor-fit its projects to the best use of each site has enabled the company to maximize the favorable supply and demand indicators in Cebu, CDO, Davao, Dumaguete, Bacolod and soon in Iloilo and Bohol. As of December 31, 2018, Cebu Landmasters, Inc. has a total market capitalization of ₱6.9 billion. based on the closing price of 4.14 per common share on December 28, 2018, the last trading day of the said month. For the three years ended December 31, 2016, 2017 and 2018, CLI’s consolidated revenues amounted to ₱2.36 billion, ₱3.93 billion and ₱6.76 billion, respectively. The company has posted outstanding growth in recent years, with consolidated net income increasing from ₱767 million in 2016 to ₱2.17 billion in 2018, representing a CAGR of 68.16%. Net income attributable to parent on the other hand grew with a compounded annual rate of 46.38% from ₱778 million in 2016 to ₱1.67 billion in 2018. Cebu Landmasters is on track from its goal to be the leading and most preferred local developer in the VisMin Region by 2020. 5 Real estate development overview Cebu Landmasters, Inc.is the fastest growing and leading local housing developer in the Visayas and Mindanao Region. The company is primarily focused to develop projects and provide housing to Visayas and Mindanao where the high potential growth areas are located. The company is currently present in 8 key cities of the region namely, Metro Cebu, Metro Mandaue, Bohol, Iloilo, Dumaguete, Bacolod, Cagayan de Oro and Davao. This year, Cebu Landmasters, Inc. will be rolling out its projects in newly acquired sites in Bohol and Iloilo. The company has also on-going negotiations with land owners in future expansion areas of Roxas City, Ormoc City and General Santos City. CLI Visayas-Mindanao Presence 7 Since its incorporation, Cebu Landmasters, Inc. has diversified its portfolio to Residential Subdivision and Condominium, Office, Hotel, Retail and recently, mixed-use and estate development. The company designs its projects to meet the needs of the different market segments. Its brands are carefully planned and priced to provide excellent product for the particular segment it serves. The Premier series such as Asia Premier and Baseline Prestige were designed to meet the tastes of the high-end market, the Garden Series projects like Midori Garden Residences and Velmiro Heights are 6 for the Mid-market. While the Casa Mira brand on the other hand is for the Economic segment and Villa Casita is to match the socialized housing needs. Below are the details of the company’s projects under the different product type. In 2018, Cebu Landmasters, Inc. formally launched the Davao Global Township (DGT), a 22-hectare estate located in Matina, Davao. DGT will be the first township to be developed by CLI. The company has on-going negotiations with land owners in Cebu and CDO for future estate projects. 7 Completed projects The Company has currently 22 completed projects in its portfolio. Its completed projects are composed of horizonal and vertical residential developments and the company’s office building which was turned over last 2015. Below is a list of the Company’s completed projects as of December 31, 2018: Market No. of Sold Project Location Type Segment Units Units San Jose Maria Balamban, Mid-Market 1 Horizontal 231 194 Village – Balamban Cebu Housing San Jose Maria Minglanilla, Mid-Market 2 Horizontal 145 145 Village – Minglanilla Cebu Housing San Jose Maria Talisay City, Mid-Market 3 Horizontal 96 96 Village – Talisay Cebu Housing San Jose Maria Toledo City, Mid-Market 4 Horizontal 144 95 Village – Toledo Cebu Housing Balamban, Socialized 5 Villa Casita Horizontal 101 96 Cebu Housing Minglanilla, Mid-Market 6 Midori Plains Horizontal 370 370 Cebu Housing Asia Premier 7 Cebu City Vertical High-End 88 88 Residences Mandaue 8 Midori Residences Vertical Mid-Market 396 396 City, Cebu 9 Park Centrale Tower Cebu City Vertical Office Condo 50 50 Mivesa Garden 10 Cebu City Vertical Mid-Market 479 468 Residences (Phase 1) Mivesa Garden 11 Cebu City Vertical Mid-Market 459 438 Residences (Phase 2) Velmiro Heights Minglanilla, Mid-Market 12 Horizontal 348 344 (Phase 1) Cebu Housing Minglanilla,