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, 2023

2. SEC Identification Number: 39745 3. BIR Tax Identification No.: 002-837-461

4. Exact name of registrant as specified in its charter: CROWN EQUITIES, INC.

5. Philippines 6. (SEC Use Only)

Province, Country or other jurisdiction of Industry Classification Code:
incorporation or organization

7. Crown Center, 158 N. Garcia corner Jupiter Street, Bel-Air, Makati City 1209
Address of principal office Postal Code

8. (632) 8899-0081, (632) 8899-0455

Registrant's telephone number, including area code

9. Not applicable
Former name, former address, and former fiscal year, if changed since last report.

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

Number of Shares of Common Stock

Title of Each Class Outstanding and Amount of Debt Outstanding

Common shares 14,959,999,950 shares

11. Are any or all of these securities listed on the Philippine Stock Exchange.

Yes [ X ] No [ ]

12. Check whether the registrant:

(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 Revised Securities Act (RSA) and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of
The Corporation Code of the Philippines during the preceding 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: P219,965,729.12 (2,749,571,614
CEI common shares at P0.08/share price as of March 27, 2024)

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 Table of Contents

Page No.

PART I – BUSINESS AND GENERAL INFORMATION

Item 1 Business 3
Item 2 Properties 8
Item 3 Legal Proceedings 8
Item 4 Submission of Matters to a Vote of Security Holders 8

PART II – OPERATIONAL AND FINANCIAL INFORMATION

Item 5 Market for Issuer’s Common Equity and Related Stockholders 9

Matters
Item 6 Management Discussion and Analysis 10
Item 7 Financial Statements 16
Item 8 Changes in and Disagreements with Accountants on Accounting 17
And Financial Disclosures

PART III – CONTROL AND COMPENSATION INFORMATION

Item 9 Directors and Executive Officers of the Corporation 18

Item 10 Executive Compensation 21
Item 11 Security Ownership of Certain Record and Beneficial Owners and 22
Management
Item 12 Certain Relationships and Related Transactions 24

PART IV – CORPORATE GOVERNANCE

Item 13 Corporate Governance 25

PART V - EXHIBITS AND SCHEDULES

Item 14 Exhibits and Reports on SEC Form 17-C 26

(a) Exhibits
(b) Reports on SEC Form 17-C (Current Report)

SIGNATURES 27

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 PART I - BUSINESS AND GENERAL INFORMATION

Item 1. Business

(1) Business Development

Crown Equities, Inc. (CEI or the Corporation) was incorporated and registered with the
Philippine Securities and Exchange Commission (SEC) on October 24, 1969 as Leyte Base
Metal Corporation. On May 22, 1995, the stockholders approved the strategic shift in the
Corporation’s primary business activity to investment holding. The Corporation started its
healthcare business by operating its ambulatory care clinic in Makati City in 1997 and in Sta.
Rosa, Laguna in 1998. Also in 1998, the Corporation started the development of a property in
Biñan, Laguna into a middle-class residential subdivision called Palma Real. The following
year, the Corporation acquired a significant interest in a toll road project, which was
eventually divested in 2005. In 2003, by virtue of an agreement with Sta. Lucia Realty and
Development, Inc., development of the Palma Real project was pursued. Marketing and sales
started in 2004.

The Corporation started the development of Cypress Towers, a mid-rise residential

condominium project in joint venture with DM Consunji Inc. in 2005. By 2007, the Cypress
Towers started marketing and selling condominium units. The cash flows from Palma Real
and Cypress Towers projects, coupled with the proceeds from the divestment of the toll road
project, allowed the Corporation to start construction in 2009 of its own office building called
Crown Center, the corporate offices of the Corporation and FortMed Clinics. In 2010, the
Corporation started leasing out excess office spaces of Crown Center.

The Corporation did not make any significant business acquisition during the past three
years. Its major investments are still in the healthcare and in real estate businesses, the latter
via joint venture with major companies in the industry. The Corporation’s land bank
continues to appreciate in value.

(2) Business of Issuer

The Corporation is a Filipino-owned publicly-listed investment holding corporation.

Through its subsidiaries, the Corporation acquired various real estate properties to be
developed into commercial, industrial, residential, or mixed-use areas. The Corporation also
has investments in healthcare business particularly in two medical ambulatory care clinics.

The subsidiaries of the Corporation that are already in operation are FortMed Medical Clinics
Makati Inc., Crown Central Properties Corporation, Healthcare Systems of Asia Philippines,
Inc., and Argent Capital Holdings Corporation. Parkfield Land Holdings, Inc. is still in the
pre-operating stage.

The Corporation’s main business is investment holding. It acquires, develop and sell real
estate properties, either through its own subsidiaries or through tie-ups with major real estate
and property development companies. The Corporation markets the real estate properties
either through its in-house marketing group or through third party brokers and agents. The
Corporation also delivers medical and health care services to outpatients through its
ambulatory care centers. All of the Corporation’s revenues are generated locally.

There are several players in the real estate industry competing for developments in prime

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areas. Historically, the industry has been led by highly-capitalized firms. Although these
companies have been leading the industry, the Corporation has been focusing on residential
development through niche markets. The Corporation aims to continue developing real estate
where opportunities for growth are identified. At present, the location and price of the
residential units offered by the Corporation give it an edge in the competition. The previous
pandemic, however, dampened the market as a result of declining buyer power.

Property development businesses involve significant risks including the risks that
construction may not be completed on schedule or within the allocated budget; and that such
projects may not achieve the anticipated sales. In addition, real estate development projects
typically require substantial capital expenditure during construction and it may take years
before the projects generate cash flows.

Increasing threat from competition has been the main risk in the healthcare business. Growth
in the number of healthcare providers delivering similar services has been affecting
profitability across companies. Moreover, the business is characterized by substantial
recurring capital expenditure for medical technology in order to provide a comprehensive
healthcare service. However, being a basic necessity, the healthcare business could likewise
provide sustainable revenues.

As a business in the real estate and health care services, the Corporation does not rely on a
few customers ensuring the continuity of revenue streams for the company. Furthermore, the
Corporation does not rely on a limited number of suppliers in providing products and
services that may contribute to risks of non-performance of the Corporation. The Corporation
also does not have any major supply contracts.

The Corporation does not have any patents, trademarks, copyrights, licenses, franchises,
concessions, or royalty agreements held. As it currently stands, there are no government
regulations specifically covering the Corporation’s business. There is a possibility that the
government may impose certain regulations which may include securing special permits,
imposing regulatory fees and controls over the Corporation’s products and services but these
types of regulations would not be a hindrance to the Corporation’s business. Furthermore,
the costs incurred for purposes of complying with environmental laws consist primarily of
payments for mandated fees for the issuance of business permits which are standard in the
industry and is minimal.

The Corporation did not spend significant amount on developmental activities during the last
three fiscal years.

The Corporation and its subsidiaries currently employ 68 officers and staff, including 41
medical and administrative officers and staff in the healthcare operations. There is no existing
Collective Bargaining Agreement between the Corporation and its employees. There are no
supplemental benefits or incentive arrangements with the employees, aside from those
provided by law.

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a. Real Estate and Property Development

1. Crown Equities, Inc.

The Cypress Tower is a residential condominium complex composed of three

buildings: the Altiva Tower, the Belmira Tower, and the Celesta Tower. Residents enjoy
a good view of the Laguna Lake to the east as well as the Manila Bay to the west. The
Cypress Tower boasts of its perfect accessibility from either the north or the south of
Metro Manila via the Circumferential Road 5. The Corporation likewise sell house units
in Palma Real Residential Estate.

The Corporation also owns real estate property in Sto. Tomas, Batangas. Some of the
properties are still in the process of titling. The properties are mostly located in Brgy.
San Miguel, Sto. Tomas, Batangas, about 56 kilometers from the central business district
of Makati City. It is accessible by any land transport from Manila via the South Luzon
Expressway and the Maharlika highway. The Corporation also has over 6 hectares of
property in Taguig.

For the year ended December 31, 2023, the Corporation as a separate entity generated
revenue of =P62.4 million, representing 37% of total revenue of CEI and its subsidiaries,
the Group, P23.9 million of which came from recognized sale of real estate units and
P19.9 million from rental income.

2. Crown Central Properties Corporation

Crown Central Properties Corporation (CCPC) was incorporated on September 3, 1996

as a joint venture between the Corporation and Solid Share Holdings, Inc., now Federal
Land, Inc., an affiliate of a major banking group. In October 2003, CCPC entered into a
Memorandum of Agreement with Sta. Lucia Realty and Development, Inc. whereby
the former shall contribute land and its improvements while the latter shall be
responsible for completing the development of a subdivision project. The agreement
called for a 60%-40% sharing of revenues in favor of CCPC. The project was completed
and marketing is on-going.

The subdivision, named Palma Real Residential Estates, is strategically located near the
boundary of Sta. Rosa and Biñan, in the province of Laguna, a few minutes away from
educational institutions in the area such as Don Bosco and De La Salle University.
Among residential subdivisions in its class, Palma Real is one of those nearest to these
educational institutions. Although competition is considered tight given the number
of residential subdivisions within its five-kilometer radius, Palma Real enjoys an
advantage given its proximity to these schools, the industrial park, the commercial
district in the area, and access via the Mamplasan exit of the South Luzon Expressway
connecting to the Sta. Rosa-Tagaytay highway. The subdivision is also accessible via
the Cavite-Laguna Expressway (CALAX).

CCPC contributed 28% to the total revenue of the Group in 2023 having aggregate
revenue of P
=48.2 million from Palma Real Residential Estates sales.
.

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 3. Parkfield Land Holdings, Inc.

Parkfield Land Holdings, Inc. (PLHI), a 75%-owned subsidiary of the Corporation, was
incorporated on April 11, 2001 primarily to acquire, develop, and sell real estate
properties. PLHI owns 92 hectares of land located in San Jose del Monte, Bulacan.

PLHI has not started its commercial operations and has no significant business
developments involving the properties. PLHI does not intend to develop its properties
within the next twelve months.

b. Healthcare

Healthcare System of Asia Phils., Inc.

Healthcare System of Asia, Phils. (HSAPI), Inc. was established on July 26, 1996 to
deliver medical and health care services and healthcare systems, in general. Presently,
HSAPI has two operational ambulatory care clinics: the FortMED Medical Clinics –
Makati, which started operations in 1997, and FortMED Medical Clinics – Sta. Rosa,
which started operations in 1998.

The two FortMED Clinics provide a wide range of medical services at reasonable
prices. These clinics house diagnostic and ambulatory treatment apparatus including
ultrasound machines and modern laboratory equipment. The clinics offer cardio-
pulmonary testing, radiologic procedures, laboratory blood chemistry and
hematology, and sub-specialist consultation.

Competition in this type of business is generally dictated by factors such as the

reputation of doctors associated with and actually practicing in the clinic, availability
of highly effective facilities, and quality of professional health service. Location and
accessibility are also critical competitive factors in this industry.

FortMED-Makati is strategically located in Bel-Air Village, Makati which is easily

accessible to both residents and employees in the Makati business district. FortMED-
Sta. Rosa is in Greenfield Business Park, Sta. Rosa, a booming commercial district in
the vicinity of a light industrial park which is home to multinational companies.

The clinics offer a fast one-stop shop type of professional service and easy accessibility
to results through the clinics’ proprietary clinic information system and computerized
processes. The clinics also provide private duty nurses to address the need for
professional health care in clients’ premises.

The FortMED Clinics are accredited by the Department of Health (DOH). Necessary
licenses have been secured from the DOH to operate the various facilities of the clinics
including the radiology and laboratory facilities which is also licensed by the
Dangerous Drug Board (DDB). License to operate is secured from the Department of
Health on a regular basis.

The unique focus of medical practice at FortMED is to assist the patient and family in
obtaining comprehensive interdisciplinary health care that is both accessible and
acceptable. The concepts of patient participation, patient education, health promotion
and illness prevention are basic parts of the integrated treatment plan. The professional

6
 staff recognizes the importance of technological and cultural dimensions of health and
their influences on the individual, families, and communities serviced. The physicians
also recognize their responsibility to respect each patient without bias, assisting the
patient to make sound decisions about their health care.

FortMED Clinics generated aggregate revenue of P68.7 million in 2023 representing

40% of the Group’s revenues.

c. Investment Holding

Argent Capital Holdings Corporation

Argent Capital Holdings Corporation (ACHC) was incorporated and registered with
the SEC on August 28, 2019. A wholly-owned subsidiary, ACHC was established to
engage in investing activities.

(3) Related Party Transactions

Transactions with related parties are made on arms-length basis in a manner similar to
transactions with non-related parties. During the year, the Group did not have significant
account balances with related parties as of December 31, 2023.

(4) Risks Relating to Business

Risk management rests on the Board of Directors who is responsible for establishing and
maintaining a sound risk management system. The Board of Directors assumes oversight over
the entire risk management process. The Group has exposure to the following financial risks:

a. Credit Risk

Credit risk is a risk of financial loss to the Group if a customer or counterparty to a

financial instrument fails to meet its contractual obligations, and arises principally from
the Group’s receivables. Counterparties such as banks and customers who pay on or
before due date have minimum risk exposure because default in settling its obligations is
remote. The Group deals only with reputable banks and customers to limit this risk.
Generally, the maximum credit risk exposure of financial assets is the carrying amount of
the financial assets as shown on the face of the consolidated statements of financial
position.

b. Liquidity Risk

Liquidity risk arises from the possibility that the Group may encounter difficulties in
raising funds to meet commitments from financial instruments. It may result from either
the inability to sell assets quickly at fair values or failure to collect from counterparty. The
Group’s objective is to maintain a balance between continuity of funding and flexibility
and aims to manage liquidity: (a.) to ensure that adequate funding is available at all times;
(b.) to meet commitments as they arise without recurring unnecessary costs; and (c.) to be
able to access funding when needed at the least possible cost.

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 c. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk comprises three types of risk:
interest rate risk, foreign currency risk and other price risk, such as equity price risk and
commodity risk. Financial instruments affected by market risk include cash and cash
equivalents and equity investments.

The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimizing return. The Group’s market risk is limited
to its investments carried at fair value through profit or loss. The Group manages its risk
arising from changes in value of investments carried at fair value through profit of loss by
monitoring the changes in the market price of the investments.

The financial risks of the Group as of December 31, 2023 are further discussed in the notes
of the accompanying audited financial statements.

Item 2. Properties

The Corporation owns a real estate property located at the corner of Jupiter and N. Garcia Streets
in Makati City where the Crown Center, now a six-storey office building, stands as the main office
of the Corporation and its subsidiaries. Crown Center also houses other tenants.

The Corporation indirectly owns the FortMED Clinic Building, a two-storey building located in
Greenfield Business Park, Santa Rosa, Laguna, which houses FortMED-Santa Rosa and other
tenants.

The investment properties of the Group include a 4,907-square meter of prime property in
Greenfield Business Park where the FortMED Clinic Building stands. The Group also owns six
hectares of land in Taguig City, Metro Manila, over 30 hectares of land in Santo Tomas, Batangas,
and 92 hectares of land in San Jose Del Monte, Bulacan. However, no major land developments
are being done currently on these properties.

The Corporation does not lease other real properties it uses for its business and operations.

Some of the properties of the Corporation are still in the process of titling and are free from liens
or mortgages. Except when there is a very good opportunity, the Corporation does not intend to
acquire any other property in the next twelve months other than to complete the consolidation of
its existing land bank.

Item 3. Legal Proceedings

In the ordinary course of business, the Group has pending legal proceedings, which are in various
stages with the courts and relevant third parties. Management believes that the bases of the
Group’s position are legally valid and the ultimate resolution of these proceedings would not
have a material effect on Group’s financial position and results of operations. On the basis of the
information furnished by its legal counsel, management believes that none of these contingencies
will materially affect the Group’s financial position and financial performance.

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

There is no matter submitted to a vote of security holders during the fourth quarter of the fiscal
year covered by this report.

PART II - OPERATIONAL AND FINANCIAL INFORMATION

Item 5. Market for Issuer's Common Equity and Related Stockholder Matters

(1) Market Information

The Corporation’s securities are traded only in the Philippine Stock Exchange (PSE) and no
market for the shares is expected to be developed outside the Philippines. For the last two
years, the highs and lows of stock market closing prices for CEI’s equity shares are as follows:

HIGH LOW
2023 October – December 0.079 0.056
July – September 0.085 0.073
April – June 0.087 0.073
January – March 0.100 0.073

2022 October – December 0.081 0.073

July – September 0.091 0.079
April – June 0.099 0.081
January – March 0.107 0.087

As of March 27, 2024, the closing price of the Corporation’s common shares was 0.08 per share.

(2) Holders

There were 363 shareholders of CEI as of March 27, 2024. The top 20 stockholders on record
as of March 27, 2024 are as follows:

TOTAL
NAME CITIZENSHIP %
SHARES
1 PCD NOMINEE CORP. Filipino / Others 13,985,882,879 93.4885
2 TONG, MARIE LOUISE Y. Filipino 245,905,000 1.6438
3 TONG, ROBIN Y. Filipino 245,905,000 1.6438
4 TONG, WELLINGTON Y. Filipino 245,905,000 1.6438
5 DAVID GO SECURITIES, CORP. Filipino 30,800,000 0.2059
GCV MANAGEMENT & CONSULTING
6 Filipino 24,085,600 0.1610
CORPORATION
7 ACUNA, EMMANUEL E. Filipino 20,213,600 0.1351
8 PINPIN, ELISA T. Filipino 13,200,000 0.0882
9 ALCANTARA, EDITHA Filipino 8,800,000 0.0588
10 ONG, RODERICK PHILIP Filipino 8,800,000 0.0588
11 RIEZA, RENE DANIEL S. Filipino 8,800,000 0.0588
12 KATSUTOSHI, SHIMIZU Filipino 6,160,000 0.0412
13 ONGSIAKO, MARGARITA Filipino 5,438,400 0.0364
14 LEE II, ANTHONY PETER BRYAN TIONG Filipino 5,280,000 0.0353
15 PO, ALFONSO L. &/OR LETTY PO Filipino 4,400,000 0.0294
16 REYES, MICHAEL Filipino 4,400,000 0.0294

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 17 TE, LUIS SOW Filipino 4,400,000 0.0294
18 WARD MANAGEMENT CORPORATION Filipino 4,400,000 0.0294
19 JOCELYN N. YUJUICO ITF CHILDREN Filipino 3,520,000 0.0235
20 ACUNA, ROSARIO Filipino 3,080,000 0.0206

As of March 31, 2024, the number of lodged common shares owned and held by non-
Philippine nationals is 110,852,020.

(3) Dividends

(a) On February 26, 2019, the Board of Directors declared ten percent (10%) stock dividends
to be distributed to the shareholders, subject to the necessary corporate and regulatory
approvals, if any.

(b) There were no stock dividends declared on common shares prior to 2019.

(c) Except for the availability of retained earnings, there are no restrictions that limit the
ability of the Corporation to pay dividends on common equity and no such restriction is
expected to arise in the future.

(4) Recent Sales of Unregistered or Exempt Securities including Recent Issuance of

Securities Constituting an Exempt Transaction

The Corporation did not sell nor offer for sale any unregistered or exempt securities including
issuance of securities constituting an exempt transaction for the last three (3) years.

Item 6. Management's Discussion and Analysis

Management's discussion of the Corporation's financial condition and results of operation

presented below should be read in conjunction with the attached audited consolidated
financial statements of the Corporation and its subsidiaries.

The Corporation is not aware of any events that will trigger direct or contingent financial
obligation that is material to the Corporation, including any default or acceleration of an
obligation.

There are no material off-balance sheet transactions, arrangements, obligations (including

contingent obligation), and other relationships of the Corporation with unconsolidated entities
or other persons created during the recent fiscal year.

As of the date of this report, the Corporation has no material commitment for capital
expenditure. Management is not aware of any trends, event or uncertainties that have or will
have material impact on net sales or revenues or income from continuing operations neither
of its operating subsidiaries nor any seasonal aspects that a material effect on the financial
condition or results of operation of the Corporation.

The Corporation has adopted all the relevant Philippine Financial Reporting Standards (PFRS)
in its financial statements. The Corporation's financial statements for 2023 and the
comparatives presented for 2022 and 2021 comply with all presentation and disclosure
requirements.

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(1) Changes in Financial Position and Results of Operation

Calendar Year Ended December 31, 2023 and 2022

Total assets as of year-end 2023 amounted to P2.55 billion consisting of P1.06 billion total current
assets and P1.49 billion in non-current assets. Cash constitutes 31% of total assets while
Investment Properties makes up 42%.

Next to Cash and Cash Equivalents of P785.5 million, Investment in Quoted Shares is a major
component of current assets amounting to P85.9 million. Inventories come in third largest
amounting to P77.8 million which is mainly composed of the house units and lot units inventory
of Palma Real and a few in Cypress Towers. Receivables of P75.2 million include installment
contracts receivable which pertain to real estate sales. These are collectible in various installment
periods of between one to 15 years and earn interest at 10% to 16% per annum.

Out of the total P1.49 billion non-current assets, P1.07 billion pertains to investment properties
consisting mostly of properties in Taguig, Batangas, and Bulacan.

Total liabilities amounted to P204 million of which P157 million represent customers’ deposits,
closing fees, and trade liabilities including liabilities to doctors, contractors, and suppliers.

There were no other significant movements in the equity accounts during the year except for
changes in retained earnings coming from the net income for the year.

Results of Operation

Total consolidated revenues amounted to P170 million of which P79.4 million or 47% came from
realized real estate sales and related interest on installment contracts receivable while P68.7
million or 40% came from sale of medical services. Rental income and dividend income accounted
for 9% and 3% of revenues, respectively.

The total revenues for 2023 was lower than that of the previous year. Revenue mix changed
during the year with real estate sales decreasing to 44% of total revenue and sale of medical
services increased to 5% of total revenue. Rental and dividend income accounted for 11% of total
revenue.

Meanwhile, total costs and expenses in 2023 amounted to P151.8 million with direct costs
decreasing by 25% to P53 million, owing to volume of real estate sales. Direct costs for real estate
sales were at P18 million, 50% decrease from last year while direct costs for services remained the
same as last year at P32 million. General operating expenses decreased from P104.4 million to
P98.7 million in 2023.

Net other income for 2023 amounted to P44 million including interest income on bank placements
amounting to P33.7 million. For 2022, net other income amounted to P35.6 million including
interest income on bank placements amounting to P11 million

Net income for the year 2023 amounted to P53 million compared to P68.5 million in the previous
year.

Calendar Year Ended December 31, 2022 and 2021

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Total assets as of year-end 2022 amounted to P2.50 billion consisting of P1.01 billion total current
assets and P1.49 billion in non-current assets. Cash constitutes 26% of total assets while
Investment Properties makes up 43%.

Next to Cash and Cash Equivalents of P646 million, Investment in Quoted Shares is a major
component of current assets amounting to P162 million. Inventories come in third largest
amounting to P89 million which is mainly composed of the house units and lot units inventory
of Palma Real and a few in Cypress Towers. Receivables of P71 million include installment
contracts receivable which pertains to real estate sales. These are collectible in various installment
periods of between one to 15 years and earn interest at 10% to 16% per annum.

Out of the total P1.49 billion non-current assets, P1.07 billion pertains to investment properties
consisting mostly of properties in Taguig, Batangas, and Bulacan.

Total liabilities amounted to P201 million of which P156 million represent customers’ deposits,
closing fees, and trade liabilities including liabilities to doctors, contractors, and suppliers.

There were no other significant movements in the equity accounts during the year except for
changes in retained earnings coming from the net income for the year.

Results of Operation

Total consolidated revenues amounted to P223 million of which P132 million or 59% came from
realized real estate sales and related interest on installment contracts receivable while P65 million
or 29% came from sale of medical services Rental income and dividend income accounted for 6%
and 5% of revenues, respectively.

The total revenues for 2022 was higher than that of the previous year. Revenue mix changed
during the year with real estate sales decreasing to 51% of total revenue and sale of medical
services increased to 29% of total revenue. Rental and dividend income accounted for 11% of total
revenue.

Meanwhile, total costs and expenses in 2022 amounted to P175 million with direct costs increasing
by 9% to P71 million, owing to higher volume of real estate sales and sale of medical service.
Direct costs for real estate sales was at P36 million while direct costs for services increased by 19%
to P35 million. General operating expenses increased from P90 million to P104 million in 2022.

Net other income for 2022 amounted to P36 million including interest income on loans and bank
placements amounting to P12 million. For 2021, net other income amounted to P56 million
including interest income on loans and bank placements amounting to P3.2 million

Net income for the year 2022 amounted to P68.5 million compared to P94.7 million in the previous
year.

Calendar Year Ended December 31, 2021 and 2020

Total assets as of year-end 2021 amounted to P2.46 billion consisting of P975 million total current
assets and P1.48 billion in non-current assets. Cash constitutes 21% of total assets while
Investment Properties makes up 44%.

Next to Cash and Cash Equivalents of P523 million, Investment in Quoted Shares is a major
component of current assets amounting to P216 million. Inventories come in third largest

12
amounting to P107 million which is mainly composed of the house units and lot units inventory
of Palma Real and a few in Cypress Towers. Receivables of P83 million include P20 million
secured loan to a third party over a 6-month period earning 10% interest per annum.

Out of the total P1.48 billion non-current assets, P1.08 billion pertains to investment properties
consisting mostly of properties in Taguig, Batangas, and Bulacan.

Total liabilities amounted to P201 million of which P165 million represent customers’ deposits,
closing fees, and trade liabilities including liabilities to doctors, contractors, and suppliers.

There were no other significant movements in the equity accounts during the year except for
changes in retained earnings coming from the net income for the year.

Results of Operation

Total consolidated revenues amounted to P210 million of which P130 million or 62% came from
realized real estate sales and related interest on installment contracts receivable while P51 million
or 24% came from sale of medical services. Rental income and dividend income accounted for 6%
and 7% of revenues, respectively.

The total revenues for 2021 was higher than that of the previous year. Revenue mix changed
during the year with real estate sales increasing to 53% of total revenue and sale of medical
services increased to 24% of total revenue. Rental and dividend income accounted for 13% of total
revenue.

Meanwhile, total costs and expenses in 2021 amounted to P155 million with direct costs increasing
by 4% to P65 million, owing to higher volume of real estate sales and sale of medical service.
Direct costs for real estate sales was at P35 million while direct costs for services increased by 11%
to P30 million. General operating expenses increased from P82 million to P90 million in 2021.

Net other income for 2021 amounted to P56.4 million including interest income on loans and bank
placements amounting to P3.2 million. For 2020, net other income amounted to P13.4 million
including interest income on loans and bank placements amounting to P10.7 million

Net income for the year 2021 amounted to P94.7 million compared to P35.9 million in the previous
year.

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Key Performance Indicators

The Corporation measures its performance based on the utilization of assets and the return on its
investments.

As of
Indicator Formula
Dec 2023 Dec 2022 Dec 2021
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
Current Ratio 6.67x 6.39x 5.85x 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐶𝑎𝑠ℎ 𝑒𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠
Cash Ratio 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
4.97x 4.09x 3.13x
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Debt-Equity 0.09x 0.09x 0.09x
Ratio 𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦

Debt-Asset 0.08x 0.08x 0.08x 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Ratio 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡
Asset-Equity 1.09x 1.09x 1.09x
Ratio 𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦

Interest 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑏𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥𝑒𝑠

Coverage n/a n/a n/a 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒
Ratio

Net Profit 31.11% 30.73% 45.18% 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒

Margin 𝑁𝑒𝑡 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑠

Investment 𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑎𝑛𝑑 𝐴𝑑𝑣𝑎𝑛𝑐𝑒𝑠

0.42x 0.43x 0.44x 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
Ratio
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒
Return on
2.10% 2.77% 3.91% 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
Assets

Earnings Per 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑎𝑓𝑡𝑒𝑟 𝑀𝑖𝑛𝑜𝑟𝑖𝑡𝑦 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡

0.00264 0.00339 0.00506 𝑇𝑜𝑡𝑎𝑙 𝑆ℎ𝑎𝑟𝑒𝑠 𝑆𝑢𝑏𝑠𝑐𝑟𝑖𝑏𝑒𝑑
Share

Liquidity

In 2023, current ratio increased to 6.67x as of December 31, 2023 compared to 6.39x as of
December 31, 2022 resulting from increase in cash and cash equivalents. Cash ratio likewise
increased to 4.97x as of December 31, 2023 from 4.09x as of December 31, 2022.

Current ratio increased to 6.39x as of December 31, 2022 compared to 5.85x as of December
31, 2021 resulting from increase in cash and cash equivalents and decrease in accounts and
other payables. Cash ratio increased to 4.09x as of December 31, 2022 from 3.13x as of
December 31, 2021.

14
Solvency/Leverage

As of December 31, 2023, debt-equity ratio remained at 0.09x from last year. Also, debt-asset
ratio remained at 0.08x from the same ratio December 31, 2022. Asset-equity ratio also
remained at 1.09x as of December 31, 2023 as there is unusual movement in both assets and
equity. The Company has a nil interest coverage ratio as it has zero loans and therefore no
interest expense was incurred in 2023.

Debt-equity ratio in December 31, 2022 remained at 0.09x from the same ratio as of December
31, 2021. Also, debt-asset ratio remained at 0.08x from the same ratio December 31, 2021.
Asset-equity ratio also remained at 1.09x as of December 31, 2022 as there is unusual
movement in both assets and equity. The Company has a nil interest coverage ratio as it has
zero loans and therefore no interest expense was incurred in 2022.

Investment Ratio

Investment ratio decreased to 0.42x as of December 31, 2023 from 0.43x as of December 31,
2022 due to depreciation of asset for lease.

Investment ratio decreased to 0.43x as of December 31, 2022 from 0.44x as of December 31,
2021 due to sale of investment property in Batangas and depreciation of asset for lease.

Profitability

Net income margin for the year 2023 was higher than the previous year, increasing to 31.11%
compared to 30.73% in 2022 due to gain on sale of marketable securities and higher interest
income on placements.

Net income margin for the year 2022 was lower than the previous year, decreasing to 30.73%
compared to 45.18% in 2021 due to decrease in market value on marketable securities.

Return on Assets

Return on assets decreased to 2.10% as of December 31, 2023 from 2.77% as of December 31,
2022 as a result of lower net income in 2023.

There was a decrease in net income as of December 31, 2022 resulting to a lower return on
assets at 2.77% from 3.91% as of December 31, 2021.

Earnings Per Share

Earnings per share decreased to =

P0.00264 as of December 31, 2023 compared to =
P0.00339 as of
December 31, 2022. Income attributable to shareholders of the Corporation decreased while
Corporation’s average number of outstanding shares remained the same from the previous
year.

Earnings per share decreased to =

P0.00339 as of December 31, 2022 compared to =
P0.00506 as of
December 31, 2021. Income attributable to shareholders of the Corporation decreased while
Corporation’s average number of outstanding shares remained the same from the previous
year.

15
(i) Past and Future Financial Condition with Particular Emphasis on the Prospects for the
Future

The Corporation continues to generate revenues from its real estate projects, particularly Cypress
Towers and Palma Real Residential Estates. Aggregate revenue of real estate sales amounted to
P79.4 million. The healthcare business, on the other hand, generated P68.7 million during the year
from the previous year’s P65.5 million.

The Palma Real Residential Estates is expected to continue selling. The project continues to
market house and lot packages intended to promote community build-up. The project realized
P70.8 million revenues in 2023 accounting for 42% of total revenue. Future sales are still expected
to be realized as Palma Real is now accessible both from the Sta. Rosa-Tagaytay road and from
the Mamplasan exit of the South Luzon Expressway via the Cavite-Laguna Expressway.

The FortMED clinics have seen improvements in earnings backed by stable revenue for the past
two years. The clinics operations are looking forward to sustaining this level of profitability as a
result of efforts in streamlining processes for optimal efficiency.

The Corporation has no known trends, demands, commitments, events or uncertainties in the
present operations of the Company that is likely to result in the Company’s liquidity increasing
or decreasing in any material way. It is not aware of any events that will trigger direct or
contingent financial obligation that is material to the company, including any default or breach
of any note, loan, lease, or other indebtedness or other financing arrangements requiring to make
payments. Furthermore, there is no significant amount in trade payables that has not been paid
within the stated trade terms. There are no material off-balance sheet transactions, arrangements,
obligations (including contingent obligation), and other relationships of the company with
unconsolidated entities or other persons created during the reporting period.

The Corporation has no material commitment for capital expenditure. Management is not aware
of any trends, events or uncertainties that have or will have material impact on net sales or
revenues or income from continuing operations neither of its operating subsidiaries nor of any
seasonal aspects that had a material effect on the financial condition or results of operation of the
Company.

The Corporation and its subsidiaries have neither issued nor invested in any financial
instruments or complex securities that will make them susceptible to the effects of any global
financial condition. It has neither foreign currency denominated nor local peso denominated
loans. The Corporation's financial risk exposure is limited to its investments in the equities market
reported as "Financial Assets at Fair Value through Profit and Loss" in its balance sheet though
insignificant compared to the Corporation's total asset base. Moreover, these investments are
always marked to market thus reflecting the most verifiable values available. The Corporation's
risk management policies are religiously observed and fair values of investments are reviewed
by the Executive Committee on a regular basis.

Item 7. Financial Statements

The audited financial statements of the Corporation are included in this report as Annex A.

16
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

The Corporation engaged the auditing firm, Reyes Tacandong & Co. to handle the independent
audit of the Corporation for 2023. They also previously handled the independent audit of the
Corporation since 2018. There were no disagreements with the independent auditor on
accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

For the audit of the Corporation’s financial statements, the aggregate fee billed by the
independent auditors was P1.25 million in 2023, P1.14 million in 2022 and P1.13 million in 2021.
There were no other professional fees billed by the independent auditors during the year. The
Audit Committee reviews all proposals for services to be rendered by the independent auditor.
In the last two (2) years, the Corporation did not engage the independent public accountants for
any services other than the regular conduct of independent audit of the year-end financial
statements.

The members of the Audit Committee are as follows:

Mr. Conrado G. Marty – Chairman

Mr. Rodolfo B. Fernandez – Member
Mr. Ramon A. Recto – Member

17
 PART III - CONTROL AND COMPENSATION INFORMATION

Item 9. Directors and Executive Officers of the Corporation

a. Directors and Executive Officers

Mr. George L. Go, 82 years old, Filipino, is presently the Chairman of the Board of Directors
of the Corporation. He has been a Director of the Corporation since 1995. He is also the
Chairman of the Nominations Committee and a Member of the Executive Committee,
Investment Committee and the Compensation and Remuneration Committee. Mr. Go is also
the Chairman of the Board of Healthcare Systems of Asia Philippines, Inc., Fortmed Medical
Clinics Makati, Inc. Mr. Go earned his bachelor’s degree in Economics from Youngstown
University, U.S.A and completed an Advanced Management Program in Harvard Business
School, U.S.A.

Mr. Wilfrido V. Vergara, 79 years old, Filipino, has been the Vice Chairman of the Board of
Directors of the Corporation since May 2002. He is the Chairman of the Executive Committee,
the Investment Committee and the Compensation and Remunerations Committee. Mr. W.V.
Vergara is the Chairman of the Board of Directors of Argent Capital Holdings Corporation
and also the Vice Chairman of Fortmed Medical Clinics Makati, Inc. and Healthcare Systems
Asia Philippines, Inc. He is also a Director of Parkfield Land Holdings, Inc. Mr. Vergara
obtained his Bachelor’s Degree in Economics from the Ateneo de Manila University.

Mr. Romuald Dy Tang, 72 years old, Filipino, has been a member of the Board of Directors
of the Corporation since 2008 and was elected President of the Corporation in May 2010. Mr.
Dy Tang is also a Member of the Executive Committee, Nominations Committee, the
Compensation and Remuneration Committee and Investment Committee. He is likewise a
Director and President of Argent Capital Holdings, Inc. and a member of the Board of
Directors of Healthcare Systems of Asia Philippines, FortMED Medical Clinics Makati, Inc.
and Parkfield Landholdings, Inc. Mr. Dy Tang earned his Bachelor of Science in Business
Administration from De La Salle University, Manila.

Mr. Patrick D. Go, 56 years old, Filipino, has been a Director of the Corporation since 1995.
He is the Treasurer and the Compliance Officer of the Corporation. He also serves as the
Treasurer of Healthcare Systems of Asia Philippines, Inc., Fortmed Medical Clinics Makati,
Inc. He is a director and the Treasurer of Argent Capital Holdings Corp. Mr. Go is an
Independent Director of Encash Inc. Prior to that, he was Vice President at Banco De Oro. Mr.
Go is a graduated from San Francisco State University, U.S.A in 1992 earning a Bachelor of
Science degree in both Finance and Real Estate. He is the son of Mr. George L. Go.

Mr. Eugene B. Macalalag, 56 years old, Filipino, has been a member of the Board of Directors
of the Corporation since May 2003. He is the First Vice President of the Corporation. Mr.
Macalalag is also the President and Director of Healthcare Systems of Asia Philippines, Inc.
and FortMED Medical Clinics Makati, Inc. He is the President of Crown Central Properties
Corp. and Parkfield Landholdings, Inc. Mr. Macalalag is a director of Argent Capital
Holdings Corporation. He joined Crown Equities, Inc., in April 1996. Mr. Macalalag
graduated Magna cum Laude from the Divine Word University of Tacloban and holds a
Bachelor of Science degree in Commerce – Accounting. He earned his Masters degree in
Business Administration from the De La Salle University, Manila.

18
Mr. Ramon A. Recto 91 years old, Filipino, has been an Independent Director of the
Corporation since May 2002. He is a Member of the Audit Committee and the Nominations
Committee. Mr. Recto was the President of Marcventures Holdings, Inc. and Lepanto
Consolidated Mining Corporation. Mr. Recto obtained both of his Bachelor’s Degrees in
Electrical Engineering and in Mechanical Engineering from the University of the Philippines.
He also earned his Master’s Degree in Industrial Management from the same University.

Mr. Conrado G. Marty 78 years old, Filipino, has been a member of the Board of Directors of
the Corporation since 2006. Mr. Marty is also a member of the Audit Committee of the
Corporation. He is the President of Universal LMS Finance and Leasing Corporation and is
also the Vice Chairman of Hariphil Asia Resources Inc. Mr. Marty holds a Bachelor in
Business Administration Major in Accounting from University of the East and is a Certified
Public Accountant. He obtained his Master in Business Administration major in Finance from
the Wharton School, University of Pennsylvania.

Mr. Manuel E. Dimaculangan, 57 years old, Filipino, serve as an independent director of the
corporation since 2022. He is the President and CEO of Pacific World Security and
Investigation. Mr. Dimaculangan graduated from University of Sto. Tomas and holds a
Bachelor’s degree in Architecture.

Mr. Melvin O. Vergara, 52 years old, Filipino, has been a member of the Board of Directors
since May 2011. He is also currently a Director of Healthcare Systems of Asia Philippines, Inc.
and FortMED Clinics Makati. He was a Consultant of the same company from 2000 to 2002.
He earned his Degree in Business Administration from the University of Sto. Tomas. He is
the son of Wilfrido V. Vergara.

Mr. Christopher Brian C. Dy, 39 years old, Filipino, is the Assistant Vice President of the
Corporation. Mr. Dy has been a member of the Board of Directors of the Corporation since
May 2011. He is also the Vice President of Crown Central Properties Corporation. He also
served as the purchasing officer of FortMED Medical Clinics in 2010. He took up securities
training in Guild Securities, Inc. from 2009 to 2010 and worked for 3M Philippines for the
Projections Systems and Optical Systems divisions. He was also a Property Specialist of Ayala
Land Premier in 2006. He earned his Bachelor of Science in Management, Major in
Management Communications Technology from the Ateneo de Manila University. He is the
son of Mr. Romuald U. Dy Tang.

Mr. Nixon Y. Lim, 53 years old, Filipino, graduated B.S Physics at De la Salle University,
Manila in 1991. He is currently the Chairman of the Related Party Transaction Committee of
the Corporation, a Member of the Board Risk Oversight Committee and Investments
Committee. He is the President of Greenstone Packaging Corporation, Lamitek Systems, Inc.
and Greenkraft Corporation. In addition, he is also the President of GreenSiam Resources
Corporation, Steniel Mindanao Packaging Corporation, Steniel Cavite Packaging Corp., and
Chairman and CEO of Steniel Manufacturing Corporation.

Atty. Rodolfo B. Fernandez, 67 years old, Filipino, is an independent director of the

Corporation. He is also the Chairman of the Corporate Governance Committee and member
of the Audit Committee and Board Risk Oversight Committee. Atty. Fernandez is currently
an independent director of Medco Holdings, Inc. and sits in the board of Reference Group
Financial Services, Inc. He is also a director and corporate secretary of The Organization of
Property Stakeholders. He was formerly Chief Compliance and AMLA Officer of BPI Family
Savings Bank, Head of Compliance and Legal of BPI Asset Management and Trust Group

19
(AMTG) and BPI Mutual Fund Companies, Head of the BPI Account Management 4, Chief
Legal Counsel of Far East Bank and Trust Co., and Head of Legal and Product Development
of FEBTC – Trust Department. An expert and lecturer on estate planning, he obtained his
Bachelor of Laws from the UP College of Law and his AB Political Science from the University
of Santo Tomas.

Mr. Reynaldo V. Reyes, 81 years old, is an independent director of both the Corporation and
Argent Capital Holdings, Inc. He is also a Member of the Corporate Governance Committee,
Related Party Transaction Committee, and Investments Committee. Mr. Reyes spent his most
productive years as a military serviceman from age 17 to compulsory retirement at age 56. He
served as a PAF line pilot, Squadron Commander, Wing Commander and went on to become
Air Division Commander stationed in Zamboanga, Mindanao after which he was placed in
command of the Western Command (WESCOM) in charge of Palawan and the West
Philippine Sea. He had modest exposure in business management while detailed at the
Defense Department as head of the Defense Management Division and Deputy Assistant
Secretary for Comptrollership. There he served in concurrent capacity as Senior Vice
President of the AFP pension fund performing a wide range of functions from lending,
treasury management and managing property holdings of the fund. He was a member of the
Philippine Stock Exchange from 1999 to 2006, being then the Chairman and President of stock
brokerage firm Public Securities Corporation. He was at the same time President and CEO of
an investment house, Resources and Investments Corporate House Inc. (RICH). He served as
Director of the Securities Clearing Corporation (SCCP), and also as member of the PSE Listing
Committee. Mr. Reyes graduated from the Philippine Military Academy in 1964 with a
Bachelor’s Degree. His in-service career training included courses in Resource Management
at the US Naval Post Graduate School in Monterey, USA; Industrial College of the US Armed
Forces; Command and Staff Course at the Air University, Montgomery, Alabama, USA and
ADMU MBA off-campus course.

Mr. Emilio S. de Quiros, Jr., 75 years old, is an Independent Director of the Corporation. He
is also a Member of the Compensation and Remuneration Committee, Board Risk Oversight
Committee, Related Party Transaction Committee, and Investments Committee. Mr. De
Quiros is also an independent director of Atlas Consolidated Mining and Development
Corporation, an independent director of Sunlife Investment Management & Trust
Corporation and an Independent Director of Capital Markets Integrity Corporation. He was
previously the President and Chief Executive Officer of the Social Security System (SSS) and
also served as a Director of Belle Corporation, UnionBank of the Philippines, Philex Mining
Corporation and Philhealth Insurance Corporation. Prior to his appointment as President of
SSS, he served as Executive Vice President of Bank of the Philippine Islands and President of
Ayala Life Insurance Inc., Ayala Plans Inc. and a director of BPI Bancassurance, Inc. Mr. De
Quiros graduated from Ateneo de Naga with a Bachelor of Arts in Economics degree (Cum
Laude), and holds a Master of Arts in Economics degree from University of the Philippines.

Ms. Clare D. Alvarez, 49 years old, has been a member of the Board of Directors of the
Corporation since 2022. She is the President, CEO and Nominee of Guild Securities, Inc. and
a Assoc. Director in Globe Telecom, Inc. Ms. Alvarez graduated from University of Asia and
the Pacific and holds a bachelor degree in Arts major in Humanities and Business
Administration. She obtained her Master’s Degree in Business Management from Asian
Institute of Management.

20
Directorships in other reporting companies:

Within the last five (5) years, the following directors are also directors of other reporting
companies as listed below:

Mr. Emilio S. De Quiros, Jr., Lead independent director of Atlas Consolidated Mining &
Development Corporation.

Mr. Nixon Y. Lim, Chairman, President and CEO of Steniel Manufacturing Corporation.

Atty. Rodolfo B. Fernandez, independent director of Medco Holdings, Inc.

b. Significant Employees

The Corporation has no employee who is not an executive officer but is expected to make a
significant contribution to the business.

c. Family Relationships

Mr. Patrick D. Go, Compliance Officer and member of the Board of Directors, is the son of Mr.
George L. Go, Chairman of the Board of Directors. Mr. Melvin O. Vergara is the son of Mr.
Wilfrido V. Vergara, Vice Chairman of the Board of Directors while Mr. Christopher Brian C. Dy
is the son of Mr. Romuald U. Dy Tang, President. Aside from the foregoing, no other directors or
executive officer are related up to the fourth civil degree either by consanguinity or affinity.

The Corporation has no controlling or parent company.

d. Involvement in Certain Legal Proceedings

The Corporation has no knowledge of the involvement of the current directors and executive
officers, in any legal proceedings as defined in the Securities Regulation Code for the last five
years up to the date of this report.

Item 10. Executive Compensation

In 2023, the Corporation’s Executive Officers consisted only of the following key personnel: the
Chairman, the Vice-Chairman, the President, First Vice-President and the Treasurer.

The aggregate compensation paid or incurred during the last two fiscal years and estimated to be
paid in the ensuing fiscal year to the Executive Officers and Directors of the Corporation are as
follows:

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Name and Principal Position Year Salary/Fees Bonus Other Annual Total
Compensation
Compensation of Executive Officers*
George L. Go, Chairman 2024 (Est.) P13.50 million P5.50 million P19.00 million
Wilfrido V. Vergara, Vice Chairman
Romuald U. Dy Tang, President 2023 P10.10 million P5.50 million P 15.60 million
Eugene B. Macalalag, First VP P 15.60 million
Patrick D. Go, Treasurer 2022
P 9.55 million P 6.05 million
All Other Directors and Officers as a 2024 (Est.) P 3.50 million P 2.50 million P 6.00 million
Group 2023 P 3.20 million P 2.50 million P 5.70 million
2022 P 3.02 million P 1.70 million P 4.72 million

21
Compensation of Directors

The members of the Board of Directors who are not executive officers are elected for a term of
one year.

As provided in the Corporation’s by-laws, directors shall receive a reasonable per diem allowance
for their attendance at each meeting. Further, as compensation, the Board shall receive and
allocate an amount of not more than ten percent (10%) of the net income before income tax of the
Corporation during the preceding year. Such compensation shall be determined and apportioned
among the Directors in such manner as the Board may deem proper.

Other Arrangements

On May 31, 2002, the stockholders approved a stock option plan for directors and executive
officers of the Corporation as may be designated by the Board.

The Corporation’s stock option plan entitles, on grant date, the directors and executive officers of
the Corporation to purchase shares of stock of the Corporation at par value or book value,
whichever is higher. The underlying shares subject to the stock option plan covers 2,400,000,000
common shares representing 10% of the authorized capital stock of the Corporation. The stock
option shall be subject to vesting according to such schedule as shall be approved by the Board
of Directors, provided that vesting shall lapse after five years from entitlement date, and provided
further that with respect to executive officers, vesting shall expire upon their resignation from the
Corporation. The number of underlying common shares in respect of outstanding options and/or
the exercise price shall be correspondingly adjusted in the event of any stock dividend
declaration, stock split, merger, consolidation, or the similar or analogous change in the corporate
structure or capitalization of the Group. The terms and conditions of the stock option plan may
be amended by the resolution of the Board of Directors, except that any increase in the maximum
number of shares or any decrease in the exercise price shall require the approval of stockholders
representing at least two-thirds of the outstanding capital stock.

No stock option has been granted from the time the stock option plan was approved.

Item 11. Security Ownership of Certain Record and Beneficial Owners and Management

(1) Security Ownership of Certain Record and Beneficial Owners

As of March 31, 2024, the following stockholders own more than 5% of the Corporation’s
outstanding capital stocks:

Amount of shares
Title of Class Name and Address of Stockholders [Record (r)/Beneficial % Ownership
(b) Ownership]

Common PCD Nominee Corp. ¹ 13,985,882,879 93.49%

shares 37/F Tower 1 Enterprise Center
Ayala Ave. cor. Paseo de Roxas,
Makati City

1 PCD Nominee Corp. (PCD), a wholly-owned subsidiary of Philippine Central Depository, Inc., is the registered owner of certain shares in the

books of the Corporation’s transfer agents in the Philippines. The beneficial owners of such shares are PCD’s participants, who hold shares on

22
 their behalf or in behalf of their clients. PCD is a private Corporation organized by the major institutions actively participating in the Philippine
capital markets to implement an automated book-entry system of handling securities transactions in the Philippines. The beneficial owners of
PCD shares that owns 5% and above are indicated as follows:

Guild Securities, Inc. (Filipino) 9,682,278,110 69.23%

Unit 1215 Tower One and Exchange Plaza
Ayala Avenue, Makati City

Marian Securities, Inc. (Filipino) 1,074,772,600 7.68%

Unit 1710-1711, 7th Floor, Philippine Stock Exchange Tower,
5th Avenue cor. 28th Street
Bonifacio Global City, Taguig City

The following have the right to vote or direct the voting or disposition of the CEI shares beneficially held by the Corporations they respectively
represent: Clare D. Alvarez for Guild Securities, Inc. and Conrado G. Marty for Marian Securities, Inc.

To the best knowledge of the Corporation, no security holder has created a voting trust for the
purpose of conferring upon a trustee the right to vote pertaining to shares of stock of the
Corporation.

(2) Security Ownership of Directors and Management

Security ownership of Management and Directors as of March 31, 2024 is as follows:

Amount and Nature

of Beneficial Percent of
Title of Class Names of Beneficial Owner Ownership Citizenship Ownership

A. Directors
Common Shares George L. Go 774,638,380 db1 Filipino 5.178%
Common Shares Clare D. Alvarez 663,539,302 db2 Filipino 4.435%
Common Shares Nixon Y. Lim 431,948,000 d Filipino 2.887%
Common Shares Patrick D. Go 476,408,760 db3 Filipino 3.185%
Common Shares Wilfrido V. Vergara 24,833,600 db4 Filipino 0.166%
Common Shares Ramon A. Recto 11,968,000 db5 Filipino 0.080%
Common Shares Christopher Brian C. Dy 8,582,000 d Filipino 0.057%
Common Shares Reynaldo V. Reyes 550,000 db6 Filipino 0.004%
Common Shares Manuel E. Dimaculangan 500,000 db7 Filipino 0.003%
Common Shares Conrado G. Marty 88,008 d Filipino 0.001%
Common Shares Melvin O. Vergara 11,000 d Filipino nil
Common Shares Emilio S. De Quiros, Jr. 11,000 d Filipino nil
Common Shares Rodolfo B. Fernandez 10,088 d Filipino nil

B. Executive Officers
Common Shares Romuald Dy Tang 86,992,000 db8 Filipino 0.581%
Common Shares Eugene B. Macalalag 20,000,088 db9 Filipino 0.133%

All Directors and Officers as a 2,500,080,226 16.711%

Group

d – these are directly owned by the aforementioned director or officer

db1 – 132,950,000 of these are registered in one of the PCD member companies but beneficially owned by the director while 623,992,500
are indirectly beneficially owned by the director through Mrs. Rosie D. Go.
db2 – 181,412,000 of these are registered in one of the PCD member companies but beneficially owned by the director
db3 – 22,536,000 of these are registered in one of the PCD member companies but beneficially owned by the director

db4 – 10,000,000 of these are registered in one of the PCD member companies but beneficially owned by the director

db5 – 500,000 of these are registered in one of the PCD member companies but beneficially owned by the director

db6 – 86,970,000 of these are registered in one of the PCD member companies but beneficially owned by the director

db7 – 18,740,000 of these are registered in one of the PCD member companies but beneficially owned by the director

db8 – 86,992,000 of these are registered in one of the PCD member companies but beneficially owned by the director

db9 – 20,000,088 of these are registered in one of the PCD member companies but beneficially owned by the director

23
(2) Voting Trust Holders of 5% or More

No persons known to the Corporation hold more than 5% of the common shares under a
voting trust or similar agreement.

(3) Changes in Control

There are no arrangements which may result in a change in control of the Corporation.

Item 12. Certain Relationships and Related Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and
operating decisions. Parties are also considered to be related if they are subject to common control
or common significant influence over the other party in making financial and operating decisions.
Parties are also considered to be related if they are subject to common control or common
significant influence. Related parties may be individuals or corporate entities. Transactions
between related parties are on arm’s length basis in a manner similar to transactions with non-
related parties.

During the last three years, there were no transactions or series of similar transactions with or
involving the Corporation or any of its subsidiaries in which a director, executive officer, nominee
for election as a director or stockholder owning ten percent (10%) or more of total outstanding
shares and members of their immediate family, had or is to have a direct or indirect material
interest.

24
 PART IV – CORPORATE GOVERNANCE

Item 13. Corporate Governance

(1) Evaluation System

Since the implementation of its Manual on Corporate Governance in 2003, compliance with it has
been satisfactory and no sanction has been imposed on any member of the organization for
deviating from the Manual.

The Corporation adopted and implemented its Manual on Corporate Governance in 2003 to
institutionalize the principles of good corporate governance in the entire organization and to
supplement its By-Laws. The Corporation maintains three (3) independent directors in its Board
and has designated a Compliance Officer to oversee the implementation of the Manual. Pursuant
to the Manual, the Corporation created a Nomination Committee to pre-screen and shortlist all
candidates nominated to become a member of the Board. A Compensation and Remuneration
Committee was also formed to develop policies on executive remuneration; and an Audit
Committee to check all financial reports and to provide oversight on financial management
functions.

In addition to the foregoing committees, the Corporation has a five-member Executive Committee
that regularly meets to discuss the Corporation’s day-to-day operation.

(2) Measures on leading practices of good corporate governance

The Board of Directors shall review the Manual from time to time and recommend the
amendment thereof with the goal of achieving better transparency and accountability. The
Compliance Officer continues to evaluate the compliance of the Corporation, its directors,
officers, and employees with its existing Manual, which may be amended from time to time.

(3) Any Deviation from the Manual

There was no material deviation in compliance with the Manual for the year 2023.

(4) Improvement

In 2017, the Corporation amended its Manual to comply with the Revised Code of Corporate
Governance.

The Corporation has adopted the policy of reviewing its Manual on an annual basis at the Board
level with the aim of constantly improving its corporate governance.

25
 PART V - EXHIBITS AND SCHEDULES

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

(1) Exhibits

Audited Financial Statements Annex A

Sustainability Report Annex B

(2) Reports on SEC Form 17-C from January 1, 2023 to present

Date of Disclosure Subject

Feb. 28, 2023 Results of the meeting of the regular meeting of the Board of Crown
Equities held on February 28, 2023.
1. Setting the annual stockholders’ meeting on May 23, 2023;
2. Setting the record date to April 14, 2023.
3. Preliminary approval of stock dividends declaration, subject to
the regulations of the Securities and Exchange Commission and
the Exchange.
May 23, 2023 Results of the Annual Stockholders’ Meeting and Organizational Board
Meeting of Crown Equities held on May 23, 2023 via Remote
Communication (Zoom).
May 31, 2023 Submission of the Integrated Annual Corporate Governance Report
February 27, 2024 Results of the meeting of the regular meeting of the Board of Crown
Equities held on February 27, 2024.
1. Setting the annual stockholders’ meeting on May 28, 2024;
2. Setting the record date to April 19, 2024.

26
 SICNATURES

Pursuant to the requirements of Section 17 of the Code and Srtion 141 of the Corporation Code,
this report is signed on behalf of the issuer by the undersigned, thereunto duly authorized, in the
City of Makati.

By,

-/l^, / li U
ROMUALD U, TANG PATRICKWARREN D. GO
President Treasurer

EUG CALALAG ARK O. V

F Vice-President ate t'$"

SUBSCRIBED AND SWORN to before me this APit i5 2C21, affiant exhibiting to me

their Tax ldentilication Number, as follows:

NAMES TIN
Romuald U. Dy Tang 175-327-304
Eugene B. Macalalag 11.7-667-674
Patrick Warren D. Go 149-511-050
Mark O. Vergara 153-189-5i11

I IA ltULD \,. PASION

ApporntrneD( 2025\
Doc. No. No, Nout, Public for Pasig atrd PatEms
Page No. Lf Uoril December 31,2025
Anomey Roll No. 90844
Book No. IUP OR No 100904; 01.02.24;RSM
Series of 2024. l,l R L)R No 1634521. 0l .02.24; Pasig City
3,1rd Flr., The Onent Square
F onrgas, Jr. Road. Onigas Center
t'asrg City, MeFo Manila I600
,trimrnr'd tn thc Bar in 202-1

27
 REPUBLIC OF THE PHILIPPINES
ANNEX A
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE

FILING REFERENCE NO.

TIN : 002-837-461-000
Name : CROWN EQUITIES INC
RDO : 049
Form Type : 1702
Reference No. : 462400059018484
Amount Payable
: -28,569,929.00
(Over Remittance)
Accounting Type : C - Calendar
For Tax Period : 12/31/2023
Date Filed : 04/08/2024
Tax Type : IT

[ BIR Main | eFPS Login | User Menu | Help ]

 Reference No : 462400059018484
Date Filed : April 08, 2024 04:32 PM
Batch Number : 0

Republic of the Philippines

Department of Finance
For BIR
Use Only:
BCS/
Item: Bureau of Internal Revenue

BIR Form No. Annual Income Tax Return

1702-RT For Corporation, Partnership and Other Non-Individual
Taxpayer Subject Only to REGULAR Income Tax Rate
January 2018(ENCS) Enter all required information in CAPITAL LETTERS. Mark applicable boxes with an "X".
Page 1 Two Copies MUST be filed with the BIR and one held by the taxpayer.
1702-RT 01/18ENCS P1

1 For 5 Alphanumeric Tax Code (ATC)

Calendar Fiscal 3 Amended Return? 4 Short Period Return?
IC055 Minimum Corporate Income Tax (MCIT)
2 Year Ended (MM/20YY) Yes No Yes No
12/2023 IC010

Part I - Background Information

6 Taxpayer Identification Number (TIN) 002 - 837 - 461 - 000 7 RDO Code 049
8 Registered Name (Enter only 1 letter per box using CAPITAL LETTERS)
CROWN EQUITIES INC

9A Registered Address (Indicate complete registered address)

CROWN CENTER 158 JUPITER ST BEL-AIR CITY OF MAKATI, NCR, FOURTH DI

9B Zipcode 1209
10 Date of Incorporation/Organization (MM/DD/YYYY)
11 Contact Number 12 Email Address
8990455 mbc@crownequitiesinc.com

13 Method of Deductions Itemized Deductions [Section 34 Optional Standard Deduction (OSD) - 40% of Gross Income [Section 34(L),
(A-J), NIRC] NIRC as amended by RA No. 9504]

Part II - Total Tax Payable (Do NOT enter Centavos)

14 Total Income Tax Due (Overpayment) (From Part IV Item 43) 912,092
15 Less: Total Tax Credits/Payments (From Part IV Item 55) 29,482,021
16 Net Tax Payable (Overpayment) (Item 14 Less Item 15) (From Part IV Item 56) (28,569,929)
Add Penalties
17 Surcharge 0
18 Interest 0
19 Compromise 0
20 Total Penalties (Sum of Items 17 to 19) 0
21 TOTAL AMOUNT PAYABLE (Overpayment) (Sum of Item 16 and 20) (28,569,929)
If Overpayment, mark "X" one box only (Once the choice is made, the same is irrevocable)

To be refunded To be issued a Tax Credit Certificate (TCC) To be carried over as tax credit next year/quarter
We declare under the penalties of perjury, that this annual return has been made in good faith, verified by us, and to the best of our knowledge and belief, is true and correct pursuant to the provisions of the National
Internal Revenue Code, as amended, and the regulations issued under authority thereof. (If Authorized Representative, attach authorization letter and indicate TIN)

22 Number of
Signature over printed name of President/Principal Officer/Authorized Representative Signature over printed name of Treasurer/Assistant Treasurer Attachments

Title of Title of
Signatory TIN Signatory TIN 4

Part III - Details of Payment

Particulars Drawee Bank/Agency Number Date (MM/DD/YYYY) Amount
23 Cash/Bank Debit Memo 0
24 Check 0
25 Tax Debit Memo 0
26 Others (Specify Below)
0

Machine Validation/Revenue Official Receipts Details (if not filed with an Authorized Agent Bank) Stamp of receiving Office/AAB and Date of
Receipt (RO's Signature/Bank Teller's Initial)
 BIR Form No.
1702-RT Annual Income Tax Return
Corporation, Partnership and Other Non-Individual Taxpayer Subject Only to
January 2018(ENCS) REGULAR Income Tax Rate
Page 2
1702-RT 01/18ENCS P2
Taxpayer Identification Number (TIN) Registered Name
002 - 837 - 461 - 000 CROWN EQUITIES INC

Part IV - Computation of Tax (Do NOT enter Centavos)

27 Sales/Receipts/Revenues/Fees 62,929,900
28 Less: Sales Returns, Allowances and Discounts 0
29 Net Sales/Receipts/Revenues/Fees (Item 27 Less Item 28) 62,929,900
30 Less: Cost of Sales/Services 22,342,452
31 Gross Income from Operation (Item 29 Less Item 30) 40,587,448
32 Add: Other Taxable Income Not Subjected to Final Tax 20,218,681
33 Total Taxable Income (Sum of Items 31 and 32) 60,806,129

Less: Deductions Allowable under Existing Law

34 Ordinary Allowable Itemized Deductions (From Part VI
57,862,057
Schedule I Item 18)
35 Special Allowable Itemized Deductions (From Part VI
0
Schedule II Item 5)
36 NOLCO (only for those taxable under Sec. 27(A to C);
Sec. 28(A)(1) & (A)(6)(b) of the tax Code) (From Part VI 0
Schedule III Item 8)
37 Total Deductions (Sum of Items 34 to 36) 57,862,057
OR [in case taxable under Sec 27(A) & 28(A)(1)]
38 Optional Standard Deduction (40% of Item 33) 0

39 Net Taxable Income/(Loss) (If Itemized: Item 33 Less Item 37; If OSD: Item 33 Less Item 38) 2,944,072

40 Applicable Income Tax Rate 25 %

41 Income Tax Due other than Minimum Corporate Income Tax (MCIT) (Item 39 x Item 40) 736,018
42 MCIT Due (2% of Item 33) 912,092
43 Tax Due (Normal Income Tax Due in Item 41 OR the MCIT Due in Item 42, whichever is higher)
912,092
(To Part II Item 14)

Less: Tax Credits/Payments (attach proof)

44 Prior Year's Excess Credits Other Than MCIT 26,054,135
45 Income Tax Payment under MCIT from Previous Quarter/s 0
46 Income Tax Payment under Regular/Normal Rate from Previous Quarter/s 0
47 Excess MCIT Applied this Current Taxable Year (From Part VI Schedule IV Item 4) 0
48 Creditable Tax Withheld from Previous Quarter/s per BIR Form No. 2307 2,779,354
49 Creditable Tax Withheld per BIR Form No. 2307 for the 4th Quarter 648,532
50 Foreign Tax Credits, if applicable 0
51 Tax Paid in Return Previously Filed, if this is an Amended Return 0
52 Special Tax Credits (To Part V Item 58) 0
Other Credits/Payments (Specify)
53 0
54 0

55 Total Tax Credits/Payments (Sum of Items 44 to 54) (To Part II Item 15) 29,482,021
56 Net Tax Payable / (Overpayment) (Item 43 Less Item 55) ) (To Part II Item 16) (28,569,929)

Part V - Tax Relief Availment

57 Special Allowable Itemized Deductions (Item 35 of Part IV x Applicable Income Tax Rate) 0
58 Add: Special Tax Credits (From Part IV Item 52) 0
59 Total Tax Relief Availment (Sum of Items 57 and 58) 0
 BIR Form No.
1702-RT Annual Income Tax Return
Corporation, Partnership and Other Non-Individual Taxpayer Subject Only to
January 2018(ENCS) REGULAR Income Tax Rate
Page 3
1702-RT 01/18ENCS P3
Taxpayer Identification Number (TIN) Registered Name
002 - 837 - 461 - 000 CROWN EQUITIES INC

Schedule I - Ordinary Allowable Itemized Deductions (Attach additional sheet/s, if necessary)

1 Amortizations 0
2 Bad Debts 0
3 Charitable Contributions 0
4 Depletion 0
5 Depreciation 1,292,865
6 Entertainment, Amusement and Recreation 0
7 Fringe Benefits 0
8 Interest 0
9 Losses 0
10 Pension Trust 0
11 Rental 5,400
12 Research and Development 0
13 Salaries, Wages and Allowances 16,137,600
14 SSS, GSIS, Philhealth, HDMF and Other Contributions 0
15 Taxes and Licenses 760,443
16 Transportation and Travel 1,179,968
17 Others (Deductions Subject to Withholding Tax and Other Expenses) [Specify below; Add additional
sheet(s), if necessary]
a Janitorial and Messengerial Services 448,846
b Professional Fees 2,085,036
c Security Services 6,638,715
d DIRECTORS AND PROFIT SHARING RENUMERATION 8,938,479
e MEETINGS AND SEMINARS 5,465,762
f COMMISSION 2,120,965
g SUPPLIES 2,289,208
h REPAIRS AND MAINTENANCE 1,873,840
i OTHERS 8,624,930

i.1 UTILITIES 1,861,166

i.2 INSURANCE 1,695,125
i.3 DIRECTOR'S FEES 1,644,444
i.4 COMMITTEE MEETINGS 515,000
i.5 COMMISSION ON MARKETABLE SECURITIES 413,351
i.6 LISTING FEES 256,875
i.7 ADS AND PROMOTIONS 156,200
i.8 PHOTOCOPY AND PRINTING 113,216
i.9 ASSOCIATION DUES 79,446
i.10 BANK CHARGES 40,213
i.11 MARKETING EXPENSES 28,689
i.12 DUES AND MEMBERSHIP 21,000
i.13 MAGAZINES AND PERIODICALS 5,794
i.14 MISCELLANEOUS 1,794,411

18 Total Ordinary Allowable Itemized Deductions (Sum of Items 1 to 17i) (To Part IV Item 34) 57,862,057

Schedule II - Special Allowable Itemized Deductions (Attach additional sheet/s, if necessary)

Description Legal Basis Amount
1 0
2 0
3 0
4 0

5 Total Special Allowable Itemized Deductions (Sum of Items 1 to 4) (To Part IV Item 35) 0
 BIR Form No.
1702-RT Annual Income Tax Return
Corporation, Partnership and Other Non-Individual Taxpayer Subject Only to
January 2018(ENCS) REGULAR Income Tax Rate 1702-RT 01/18ENCS P4
Page 4
Taxpayer Identification Number (TIN) Registered Name
002 - 837 - 461 - 000 CROWN EQUITIES INC

Schedule III - Computation of Net Operating Loss Carry Over (NOLCO)

1 Gross Income (From Part IV Item 33) 0
2 Less: Ordinary Allowable Itemized Deductions (From Part VI Schedule I Item 18) 0
3 Net Operating Loss(Item 1 Less Item 2) (To Schedule IIIA, Item 7A) 0

Schedule IIIA - Computation of Available Net Operating Loss Carry Over (NOLCO) (DO NOT enter Centavos; 49 Centavos or Less drop
down; 50 or more round up)

Net Operating Loss

B) NOLCO Applied Previous Year
Year Incurred A) Amount

4 0 0
5 0 0
6 0 0
7 0 0

Continuation of Schedule IIIA (Item numbers continue from table above)

E) Net Operating Loss (Unapplied)

C) NOLCO Expired D) NOLCO Applied Current Year
[ E = A Less (B + C + D) ]
4 0 0 0
5 0 0 0
6 0 0 0
7 0 0 0
8 Total NOLCO (Sum of Items 4D to 7D) (To Part IV,
0
Item 36)

Schedule IV - Computation of Minimum Corporate Income Tax (MCIT)

C) Excess MCIT over Normal Income
Year A) Normal Income Tax as adjusted B) MCIT
Tax

1 2022 0 209,446 209,446

2 2021 0 446,319 446,319
3 2020 0 728,221 728,221

Continuation of Schedule IV (Item numbers continue from table above)

G) Balance of Excess MCIT Allowable

D) Excess MCIT Applied/Used in F) Excess MCIT Applied this
E) Expired Portion of Excess MCIT as Tax Credit for Succeeding Year/s
Previous Years Current Taxable Year
[ G = C Less (D + E + F) ]

1 0 0 0 209,446
2 0 0 0 446,319
3 0 728,221 0 0
Total Excess MCIT Applied (Sum of Items 1F to 3F) (To Part IV Item 47) 0

Schedule V - Reconciliation of Net Income per Books Against Taxable Income (attach additional sheet/s, if necessary)

1 Net Income/(Loss) per books 13,626,833

Add: Non-deductible Expenses/Taxable Other Income
2 GROSS PROFIT FROM INSTALLMENT SALES 847,636
3 OTHERS 19,454,773

3.1 SALARIES, WAGES AND OTHER BENEFITS 2,987,486

3.2 DEPRECIATION AND AMORTIZATION 2,119,018
3.3 ASSOCIATION DUES 401,341
3.4 MISCELLANEOUS 3,294,927
3.5 UNREALIZED LOSS ON CHANGES IN FV OF MS 6,449,322
3.6 UNREALIZED GAIN ON CHANGES IN FOREX 4,202,679

4 Total (Sum of Items 1 to 3) 33,929,242

Less: A) Non-Taxable Income and Income Subjected to Final Tax
5 DIVIDEND INCOME 1,798,795
6 OTHERS 29,186,375

6.1 DIRECTORS PROFIT SHARING AND RENUMERATION 2,049,975

6.2 COMMISSION 942,975
6.3 INTEREST INCOME SUBJECT TO FINAL TAX 25,722,189
6.4 GAIN ON REVERSAL OF ALLOWANCE FOR IMPAIRMENT LOSS 471,236
B) Special Deductions
7 0
8 0

9 Total (Sum of Items 5 to 8) 30,985,170

10 Net Taxable Income/(Loss) (Item 4 Less Item 9) 2,944,072
 CRO\XN EOUITIES
INCORPORATED
STATEMENTS
STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL

The Management of cRowl\ EQUITIES, NC. AND SUBSIDIARIES

is responsible for the
schedules attached therein
preparation and fair presentation of the financial statements including the
prescribed financial
for the years ended l)ecember 31, 2023 and 2022, in accordance with the
determines is
reponin! framework indicated therein, and for such internal control as management
free from material misstatsment'
necessary to enable the preparation of financial statements that are
whether due to fraud or error.

assessing the Company's ability

In prryaring the financial statements, managernent is responsible for
to going concern and using
to continue as a going concern, disclosing, as applicable matters related
intends to liquidate the Company or
the going concern basis of accounting unless management either
to cease operations, or has no realistic alternative but to do so.

the company's financial reporting

The Board of Directors (Trustees) is responsible in overseeing
process.

statements including the

The Board of Directors (Trustees) reviews and approves the financial
or members'
schedules attached therein, and submits the same to the stockholders

Reyes Tacandong & co., the independent auditors appointed by the stockholders in2023 and2022'
have audited the financial statements of the company in accordance
with Philippine Standards on
opinions on the fairness of
Auditing and in their report to the stockholders, have expressed their
presentation upon completion of such audit'

-/1,*{ hr*
President
\ Treasurer
*
the Board
{
exhibiting to me their Tax
suBscRrBED Ar\rD SWORN to before -. hPfii.fi2fl2fmant
Identification Number, as follows

NAMES TIN
George L. Go 100-929-738

Romuald U. DY Tang 115-321-304

Patrick D. Go 149-51 l-050

Doc No. JI
PageNo, 3-
BookNo. JL-
Series af W
 COVER SHEET
for
AUDITED FINANCIAL STATEMENTS SEC Registration Number

I0 I0 I0 I0 I0 I3 I9 I7 I4 I5 I
COMPANY NAME

C R O W N E Q U I T I E S , 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)

5 t h F l o o r C r o w n C e n t e r , 1 5 8 J u p i t e r c o r

. N . G a r c i a S t s . , B e l - A i r M a k a t i C i t y

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

IA IA IC IF IS I IC IR IM ID I IN I/ IA I
COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number/s Mobile Number

ebm@crownequitiesinc.com (632) 8-899-0081 +63 919 076 1391

No. of Stockholders Annual Meeting (Month / Day) Calendar Year (Month / Day)
th
363 4 Tuesday of May December 31

CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation

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

Mr. Eugene B. Macalalag ebm@crownequitiesinc.com (632) 8-899-0081 +63 919 076 1391

CONTACT PERSON’S ADDRESS

5th Floor Crown Center, 158 Jupiter cor. N. Garcia Sts., Bel-air Makati City
NOTE 1: In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to 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 shall not excuse the corporation from liability for its deficiencies.
 BOA/PRC Accreditation No. 4782 BDO Towers Valero
August 16, 2021, valid until April 13, 2024 8741 Paseo de Roxas

REYES T ACANDO c & Co.

FIRM PRINCIPLES. WISE SOLUTIONS.
SEC Registration No. PP201007009 Makati City 1226 Philippines
Phone
Fax
: +632 8 982 9100
: +632 8 982 9111
Website : www.reyestacandong.com

INDEPENDENT AUDITORS’ REPORT

The Stockholders and the Board of Directors

CROWN EQUITIES, INC. AND SUBSIDIARIES
5th Floor Crown Center
158 Jupiter cor. N. Garcia Sts.
Bel-Air Makati City

Opinion

We have audited the consolidated financial statements of CROWN EQUITIES, INC. AND SUBSIDIARIES
(the “Group”), which comprise the consolidated statements of financial position as at December 31, 2023 and
2022, and the consolidated statements of comprehensive income, consolidated statements of changes in
equity and consolidated statements of cash flows for the years ended December 31, 2023, 2022 and 2021,
and notes to consolidated financial statements, including a summary of material accounting policy
information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of the Group as at December 31, 2023 and 2022, and its financial performance and its cash
flows for the years ended December 31, 2023, 2022 and 2021, in accordance with Philippine Financial
Reporting Standards (PFRSs), as modified by the application of financial reporting relief issued and approved
by the Securities and Exchange Commission.

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities
under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the Code of
Ethics for Professional Accountants in the Philippines (Code of Ethics) together with the ethical requirements
that are relevant to the audit of the consolidated financial statements in the Philippines, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context
of our audits of the consolidated financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. We have determined the matter described below to be
the key audit matter to be communicated in our report.

Determining the Fair Value and Assessing the Impairment of Investment Properties
The Group’s investment properties, which are carried at cost, amounted to P =1,072.6 million as at
December 31, 2023, or approximately 42% of the total consolidated assets.

The valuation of investment properties account is significant to our audit because it involves significant
management judgment when selecting the appropriate valuation techniques and inputs used to determine
fair value for disclosure purposes and in assessing events or circumstances that may indicate the impairment
of the assets.

■--
THE POWER OF BEING UNOERSTOOO
AUOIT I TAX I CONSULTING
RSM
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
IBia REYES T ACANDo· G & Co.
• FIRM PRJNCIPLES. WISE SOLUTIONS.

-2-

The Group did not obtain an appraisal valuation as at December 31, 2023 because the Group has assessed
that the fair value of the investment properties as at December 31, 2022 did not materially differ from the
amounts reported as at December 31, 2023. The latest independent appraiser’s report was dated in October
2022.

We obtained management’s basis of its assessment that the fair value of investment properties did not
materially differ as at December 31, 2023. We have reviewed the reasonableness of the management’s basis
by performing independent calculations, including (1) testing raw land’s fair value by comparison with the fair
value of similar properties, (2) testing condominium units and parking slots with the current selling price and
(3) recalculating the current replacement cost of the ambulatory clinic less deductions for physical
deterioration.

Other Information

Management is responsible for the other information. The other information comprises the information
included in SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report for the year
ended December 31, 2023, but does not include the consolidated financial statements and our auditors’
report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report for
the year ended December 31, 2023 are expected to be made available to us after the date of this auditors’
report.

Our opinion on the consolidated financial statements does not cover the other information and we will not
express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the other
information identified above when it becomes available and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.
IBia REYES T ACANDo· G & Co.
• FIRM PRJNCIPLES. WISE SOLUTIONS.

-3-

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
these could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:

▪ Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

▪ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

▪ Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Group to cease to continue as a
going concern.

▪ Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

▪ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audits.
IBia REYES T ACANDo· G & Co.
• FIRM PRJNCIPLES. WISE SOLUTIONS.

-4-

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors’ report is Wilson P. Teo.

REYES TACANDONG & CO.

WILSON P. TEO
Partner
CPA Certificate No. 92765
Tax Identification No. 191-520-944-000
BOA Accreditation No. 4782; Valid until April 13, 2024
BIR Accreditation No. 08-005144-014-2023
Valid until January 24, 2026
PTR No. 10072414
Issued January 2, 2024, Makati City

March 26, 2024

Makati City, Metro Manila
 CROWN EQUITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 31
Note 2023 2022

ASSETS

Current Assets
Cash and cash equivalents 4 P
=785,507,527 =P645,994,640
Investments in quoted shares 5 85,865,768 161,851,145
Receivables 6 65,200,713 71,206,861
Inventories 7 77,831,881 88,990,602
Other current assets 8 41,134,039 40,846,876
Total Current Assets 1,055,539,928 1,008,890,124

Noncurrent Assets
Noncurrent portion of installment contracts receivable 6 81,243,140 84,951,745
Noncurrent portion of loans receivable 6 10,032,911 –
Investment properties 9 1,072,639,762 1,070,106,650
Property and equipment 10 271,392,417 270,121,934
Goodwill 11 21,740,604 21,740,604
Deferred tax assets 24 20,745,448 21,012,556
Other noncurrent assets 12 17,888,476 17,841,253
Total Noncurrent Assets 1,495,682,758 1,485,774,742

P
=2,551,222,686 =2,494,664,866
P

LIABILITIES AND EQUITY

Current Liabilities
Accounts and other payables 13 P
=157,039,145 =156,181,308
P
Income tax payable 1,162,508 1,747,040
Total Current Liabilities 158,201,653 157,928,348

Noncurrent Liabilities
Net retirement benefits liability 14 26,979,499 23,954,096
Deferred tax liabilities 24 14,721,131 15,375,782
Security deposits 23 4,402,933 3,839,825
Total Noncurrent Liabilities 46,103,563 43,169,703
Total Liabilities P
=204,305,216 =201,098,051
P

(Forward)
 -2-

December 31
Note 2023 2022

Equity
Capital stock 15 P
=1,977,523,246 =P1,977,523,246
Additional paid-in capital 15 118,570,274 118,570,274
Retained earnings 581,666,853 542,137,569
Other comprehensive loss (18,771,021) (19,038,931)
2,658,989,352 2,619,192,158
Treasury stock - at cost 15 (481,523,251) (481,523,251)
Equity attributable to equity holders of the Parent
Company 2,177,466,101 2,137,668,907
Non-controlling interests 15 169,451,369 155,897,908
Total Equity 2,346,917,470 2,293,566,815

P
=2,551,222,686 =2,494,664,866
P

See accompanying Notes to Consolidated Financial Statements.

 CROWN EQUITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31

Note 2023 2022 2021

REVENUE 16
Sale of services P
=68,697,725 =P65,470,038 =P51,259,195
Real estate sales 63,181,118 112,671,264 110,123,650
Rental income 23 16,622,127 14,455,349 13,578,759
Interest income from installment contracts
receivable 4 16,170,301 19,571,409 20,118,526
Dividend income 5 5,757,732 10,611,771 14,420,616
170,429,003 222,779,831 209,500,746

DIRECT COSTS 17 53,084,260 70,858,102 66,409,339

GROSS INCOME 117,344,743 151,921,729 143,091,407

SELLING AND ADMINISTRATIVE EXPENSES 18 (98,679,608) (104,435,330) (88,312,928)

OTHER INCOME - Net 20 44,332,582 35,622,109 56,379,721

INCOME BEFORE INCOME TAX 62,997,717 83,108,508 111,158,200

PROVISION FOR (BENEFIT FROM) INCOME

TAX 24
Current 10,466,961 13,660,694 11,050,834
Deferred (495,632) 978,169 5,455,386
9,971,329 14,638,863 16,506,220

NET INCOME 53,026,388 68,469,645 94,651,980

OTHER COMPREHENSIVE INCOME (LOSS)

Items that will not be reclassified
subsequently to profit or loss:
Remeasurement gain on net retirement
benefits liability, net of tax effect 14 324,267 1,824,004 7,248,295
Unrealized fair value loss on financial assets
at fair value through other
comprehensive income (FVOCI) – – (32,000,000)

TOTAL COMPREHENSIVE INCOME P

=53,350,655 =70,293,649
P =69,900,275
P

NET INCOME ATTRIBUTABLE TO:

Equity holders of the Parent Company P
=39,529,284 =50,664,302
P P
=75,709,746
Non-controlling interests 13,497,104 17,805,343 18,942,234
P
=53,026,388 =68,469,645
P =94,651,980
P
 -2-

Years Ended December 31

Note 2023 2022 2021

TOTAL COMPREHENSIVE INCOME

ATTRIBUTABLE TO:
Equity holders of the Parent Company P
=39,797,194 =P52,436,950 =P50,683,623
Non-controlling interests 13,553,461 17,856,699 19,216,652
P
=53,350,655 =70,293,649
P =69,900,275
P

BASIC/DILUTED EARNINGS PER SHARE

ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT COMPANY 22 P
=0.00264 =0.00339
P =0.00506
P

See accompanying Notes to Consolidated Financial Statements.

 CROWN EQUITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Years Ended December 31

Note 2023 2022 2021

EQUITY ATTRIBUTABLE TO EQUITY

HOLDERS OF THE PARENT COMPANY

CAPITAL STOCK 15 P
=1,977,523,246 P
=1,977,523,246 P
=1,977,523,246

ADDITIONAL PAID-IN CAPITAL 15 118,570,274 118,570,274 118,570,274

RETAINED EARNINGS
Balance at beginning of year 542,137,569 491,473,267 415,763,521
Net income 39,529,284 50,664,302 75,709,746
Balance at end of year 581,666,853 542,137,569 491,473,267

OTHER COMPREHENSIVE INCOME (LOSS)

Items that will not be reclassified
subsequently to profit or loss:
Cumulative Unrealized Fair Value Losses on
Financial Assets at FVOCI
Balance at beginning of year (32,000,000) (32,000,000) –
Unrealized loss on fair value changes – – (32,000,000)
Balance at end of year (32,000,000) (32,000,000) (32,000,000)

Cumulative Remeasurement Gains on Net

Retirement Benefits Liability 14
Balance at beginning of year 12,961,069 11,188,421 4,214,544
Remeasurement gain, net of tax 267,910 1,772,648 6,973,877
Balance at end of year 13,228,979 12,961,069 11,188,421
(18,771,021) (19,038,931) (20,811,579)

TREASURY STOCK - at cost 15 (481,523,251) (481,523,251) (481,523,251)

2,177,466,101 2,137,668,907 2,085,231,957

NON-CONTROLLING INTERESTS 15
Balance at beginning of year 155,897,908 169,195,055 163,478,403
Total comprehensive income 13,553,461 17,856,699 19,216,652
Dividends declared by a subsidiary – (31,153,846) (13,500,000)
Balance at end of year 169,451,369 155,897,908 169,195,055

P
=2,346,917,470 P
=2,293,566,815 P
=2,254,427,012

See accompanying Notes to Consolidated Financial Statements.

 CROWN EQUITIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31

Note 2023 2022 2021

CASH FLOWS FROM OPERATING

ACTIVITIES
Income before income tax P
=62,997,717 =83,108,508
P =111,158,200
P
Adjustments for:
Interest income from: 4
Cash in banks and short-term
placements (33,708,244) (11,013,535) (3,065,228)
Installment contracts receivable (16,170,301) (19,571,409) (20,118,526)
Loans receivable (41,167) (999,999) (118,056)
Depreciation and amortization 9 14,820,039 12,205,647 11,929,797
Unrealized loss (gain) on the changes in
fair value of investments in quoted
shares 5 6,069,675 2,871,773 (39,914,761)
Dividend income 5 (5,757,732) (10,611,771) (14,420,616)
Retirement benefits cost 14 3,800,306 9,786,814 5,635,251
Unrealized foreign exchange gain 20 (970,289) (5,172,968) (585,074)
Reversal of allowance for impairment
losses on receivables 20 (523,257) (112,289) –
Gain on sale of investment properties 9 – (26,401,480) –
Operating income before working capital
changes 30,516,747 34,089,291 50,500,987
Decrease (increase) in:
Investments in quoted shares 69,915,702 51,558,127 6,760,691
Receivables 10,500,474 (15,827,373) (19,960,412)
Inventories 10,310,938 22,832,603 25,154,635
Other assets 1,716,748 8,706,914 8,066,316
Increase (decrease) in:
Accounts and other payables 857,837 (8,536,929) 15,160,722
Security deposits 563,108 434,928 215,317
Net cash generated from operations 124,381,554 93,257,561 85,898,256
Interest received 49,919,712 31,584,943 23,301,810
Income taxes paid (13,102,627) (16,806,138) (9,313,875)
Dividends received 5,757,732 10,611,771 14,420,616
Payments of retirement benefits 14 (342,547) (3,712,500) –
Net cash flows from operating activities 166,613,824 114,935,637 114,306,807

(Forward)
 -2-

Years Ended December 31

Note 2023 2022 2021

CASH FLOWS FROM INVESTING

ACTIVITIES
Acquisitions of and additions to:
Property and equipment 10 (P
=14,581,251) (P
=15,122,225) (P
=25,481,633)
Investment properties 9 (3,194,600) (1,985,256) –
Loans granted to a third party 6 (10,310,872) – (20,000,000)
Collections of loans receivable 6 15,497 20,000,000 25,000,000
Proceeds from sale of investment
properties 9 – 31,432,500 –
Net cash flows from (used in) investing
activities (28,071,226) 34,325,019 (20,481,633)

CASH FLOW FROM A FINANCING

ACTIVITY
Payments of dividends to non-controlling
interests 15 – (31,153,846) (13,500,000)

EFFECT OF FOREIGN EXCHANGE RATE

CHANGES ON CASH AND CASH
EQUIVALENTS 970,289 5,172,968 585,074

NET INCREASE IN CASH AND CASH

EQUIVALENTS 139,512,887 123,279,778 80,910,248

CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR 645,994,640 522,714,862 441,804,614

CASH AND CASH EQUIVALENTS AT END

OF YEAR P
=785,507,527 P
=645,994,640 =522,714,862
P

SUPPLEMENTARY INFORMATION ON
NONCASH ACTIVITY 7
Reclassification from inventories to
investment property P
=847,783 =–
P =–
P
Reclassification from investment
property to inventories – 4,742,400 –

COMPONENTS OF CASH AND CASH

EQUIVALENTS 4
Cash on hand P
=20,000 =P20,000 =P24,208
Cash in banks 179,794,515 103,478,463 50,518,939
Short-term placements 605,693,012 542,496,177 472,171,715
P
=785,507,527 =645,994,640
P =522,714,862
P

See accompanying Notes to Consolidated Financial Statements.

 CROWN EQUITIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2023 AND 2022
AND FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

1. General Information

Corporate Information
Crown Equities, Inc. (“CEI” or the “Parent Company”), a public corporation under Section 17.2 of the
Securities Regulation Code (SRC), was incorporated in the Philippines and registered with the
Securities and Exchange Commission (SEC) on October 24, 1969. The registration was extended for
another 50 years in 2018. Under the Revised Corporation Code of the Philippines (the “RCC”), which
was signed into law on February 20, 2019, a corporation with certificate of incorporation issued
prior to the effective date of the RCC and which continues to exist shall have perpetual existence.
Accordingly, the Parent Company has perpetual corporate term. The Parent Company is an
investment holding company, currently engaged in the business of real estate development and
healthcare through its subsidiaries. Its shares of stock are listed on the Philippine Stock Exchange
(PSE).

The Parent Company’s registered office address is located at the 5th Floor Crown Center, 158 Jupiter
cor. N. Garcia Sts., Bel-Air Makati City.

Subsidiaries
The consolidated financial statements include the accounts of CEI and the following subsidiaries
(collectively referred herein as the “Group”) as at December 31, 2023, 2022 and 2021:

% of Nature of Principal Place

Name of Subsidiary Ownership Business of Business
Crown Central Properties, Corp. (CCPC) 48% Real Estate Biñan, Laguna
Parkfield Land Holdings, Inc. (PLHI) 75% Real Estate Makati City
Healthcare Systems of Asia Phils., Inc (HSAPI) 97% Holding Makati City
Fortmed Medical Clinics Makati, Inc. (FMCMI) (a) 97% Healthcare Makati City
Argent Capital Holdings Corporation (ACHC) 100% Holding Makati City
(a) Indirectly owned through HSAPI.

CCPC. CCPC was incorporated and registered with the SEC on September 3, 1996 and is engaged in
acquiring, developing and selling real estate properties. CCPC has completed projects in Palma Real
Residential Estates, located in Biñan, Laguna (see Note 23).

Management has determined that the Parent Company has control over the financial and operating
policies of CCPC through representation on the Board of Directors (BOD) (see Note 3).

PLHI. PLHI was incorporated and registered with the SEC on April 11, 2001 and is engaged in
acquiring, developing and selling real estate properties. As at December 31, 2023 and 2022, PLHI
only holds parcels of land for undeterminable future use.

HSAPI. HSAPI was incorporated and registered with the SEC on July 26, 1996 as an investment
holding company. HSAPI owns 100% interest ownership in FMCMI.
 -2-

FMCMI. FMCMI was incorporated and registered with the SEC on January 21, 1997 and is engaged in
providing and delivering medical and health care services. FMCMI has two clinics located in Makati
City and Sta. Rosa City, Laguna.

ACHC. ACHC was incorporated and registered with the SEC on August 28, 2019 and is engaged in
investing activities.

Approval of Consolidated Financial Statements

The consolidated financial statements as at December 31, 2023 and 2022 and for the years ended
December 31, 2023, 2022 and 2021 were approved and authorized for issuance by the Executive
Committee on March 26, 2024, as authorized by the Board of Directors (BOD) on February 27, 2024
and endorsed by the Audit Committee on March 18, 2024.

2. Summary of Material Accounting Policy Information

The material accounting policy information used in the preparation of the consolidated financial
statements have been consistently applied to all years presented, unless otherwise stated.

Basis of Preparation and Statement of Compliance

The consolidated financial statements of the Group have been prepared in accordance with
Philippine Financial Reporting Standards (PFRSs) issued by the Philippine Financial and Sustainability
Reporting Standards Council and adopted by the SEC, including SEC pronouncements. This financial
reporting framework includes PFRSs, Philippine Accounting Standards (PASs) and Philippine
Interpretations on International Financial Reporting Interpretations Committee (IFRIC).

On December 15, 2020, the SEC issued Memorandum Circular (MC) No. 34, Series of 2020, which
further extends the deferral of application of the provision of the Philippine Interpretations
Committee (PIC) Question & Answer (Q&A) No. 2018-12 with respect to accounting for significant
financing component and exclusion of land in the calculation of percentage of completion (POC) and
IFRIC Agenda Discussion on over time transfers of construction goods under PAS 23, Borrowing
Costs, for another period of three years or until 2023.

The Group opted to avail the relief in connection with the accounting for significant financing
component, exclusion of land in calculation of POC, and borrowing cost. The impact of the
application of such financial reporting relief is discussed in “Amended PFRSs and PIC Issuances in
Issue but Not Yet Effective or Adopted” section of the notes to the consolidated financial
statements.

Bases of Measurement
The consolidated financial statements are presented in Philippine Peso (Peso), the Group’s
functional currency. All values are rounded to the nearest Peso except when otherwise indicated.

The consolidated financial statements of the Group have been prepared on a historical cost basis
except for investments in quoted shares designated as financial assets at fair value through profit or
loss (FVPL), investment in unquoted shares designated as financial assets at fair value through other
comprehensive income (FVOCI), and net retirement benefits liability which is carried at the present
value of the defined benefit obligation net of the fair value of plan assets. Historical cost is generally
based on the fair value of the consideration given in exchange for an asset and the fair value of the
consideration received in exchange for incurring a liability.
 -3-

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

The Group uses market observable data to the extent possible when measuring the fair value of an
asset or a liability. Fair values are categorized into different levels in a fair value hierarchy based on
inputs used in the valuation techniques as follows:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different
levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the
same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the
following notes to consolidated financial statements:

• Note 3 – Significant Judgments, Accounting Estimates and Assumptions

• Note 5 – Investments in Quoted Shares
• Note 9 – Investment Properties
• Note 12 – Investment in Unquoted Shares under “Other Noncurrent Assets”
• Note 25 – Fair Value of Financial Assets and Liabilities

Adoption of Amendments to PFRSs

The accounting policies adopted are consistent with those of the previous financial year, except for
the adoption of the following amendments to PFRSs effective January 1, 2023:

• Amendments to PAS 1, Presentation of Financial Statements, and PFRS Practice

Statement 2, Making Materiality Judgments – Disclosure Initiative – Accounting Policies – The
amendments require an entity to disclose its material accounting policies, instead of its
significant accounting policies and provide guidance on how an entity applies the concept of
materiality in making decisions about accounting policy disclosures. In assessing the materiality
of accounting policy information, entities need to consider both the size of the transactions,
other events or conditions and its nature. The amendments clarify (1) that accounting policy
information may be material because of its nature, even if the related amounts are immaterial,
(2) that accounting policy information is material if users of an entity’s financial statements
would need it to understand other material information in the financial statements, and (3) if an
entity discloses immaterial accounting policy information, such information should not obscure
material accounting policy information. In addition, PFRS Practice Statement 2 is amended by
adding guidance and examples to explain and demonstrate the application of the ‘four-step
materiality process’ to accounting policy information.
 -4-

• Amendments to PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors –

Definition of Accounting Estimates – The amendments clarify the distinction between changes in
accounting estimates and changes in accounting policies, and the correction of errors. Under the
new definition, accounting estimates are “monetary amounts in financial statements that are
subject to measurement uncertainty”. An entity develops an accounting estimate if an
accounting policy requires an item in the financial statements to be measured in a way that
involves measurement uncertainty. The amendments clarify that a change in accounting
estimate that results from new information or new developments is not a correction of an error,
and that the effects of a change in an input or a measurement technique used to develop an
accounting estimate are changes in accounting estimates if they do not result from the
correction of prior period errors. A change in an accounting estimate may affect only the profit
or loss in the current period, or the profit or loss of both the current and future periods.

• Amendments to PAS 12, Income Taxes – Deferred Tax Related Assets and Liabilities from a Single
Transaction – The amendments require companies to recognize deferred tax on transactions
that, on initial recognition, give rise to equal amounts of taxable and deductible temporary
differences.

• Amendments to PAS 1, Classification of Liabilities as Current or Noncurrent – The amendments

clarify the requirements for an entity to have the right to defer settlement of the liability for at
least 12 months after the reporting period. The amendments also specify and clarify the
following: (i) an entity’s right to defer settlement must exist at the end of the reporting period,
(ii) the classification is unaffected by management’s intentions or expectations about whether
the entity will exercise its right to defer settlement, (iii) how lending conditions affect
classification, and (iv) requirements for classifying liabilities where an entity will or may settle by
issuing its own equity instruments.

The adoption of the amendments to PFRSs did not materially affect the consolidated financial
statements of the Group. Additional disclosures were included in the consolidated financial
statements, as applicable.

Amended PFRSs and PIC Issuances in Issue but Not Yet Effective or Adopted
Relevant amended PFRSs and PIC issuances, which are not yet effective as at December 31, 2023
and have not been applied in preparing the consolidated financial statements, are summarized
below.

Effective for annual periods beginning on or after January 1, 2024:

• Amendments to PAS 1, Noncurrent Liabilities with Covenants – The amendments clarified that
covenants to be complied with after the reporting date do not affect the classification of debt as
current or noncurrent at the reporting date. Instead, the amendments require the entity to
disclose information about these covenants in the notes to financial statements. The
amendments must be applied retrospectively. Earlier application is permitted. If applied in
earlier period, the Group shall also apply Amendments to PAS 1 – Classification of Liabilities as
Current or Noncurrent for that period.

• PIC Q&A 2018-12-D, PFRS 15, Implementing Issues Affecting the Real Estate Industry
(as amended by PIC Q&A 2020-4) – On December 15, 2020, the SEC issued SEC MC No. 34-2020
providing relief to the real estate industry by deferring the application of “assessing if the
transaction price includes a significant financing component as discussed in PIC Q&A 2018-12-D
(with an addendum in PIC Q&A 2020-04)” until December 31, 2023.
 -5-

• PIC Q&A 2018-12-E, Treatment of Land in the Determination of the POC – The PIC Q&A clarified
that the cost of the land should be excluded in measuring the POC of performance obligation
and should be accounted for as fulfillment cost.

The Group availed of the SEC relief with respect to accounting for significant financing
component and treatment of land in the determination of POC. Management assessed that the
adoption of this PIC on January 1, 2024 will not have a significant impact considering that the
Group ’s ongoing project is estimated to be completed in 2024 / are already completed and
available for sale. Management also assessed that the adoption will not have a significant
impact on any new projects that the Group will start in 2024.

Effective for annual periods beginning on or after January 1, 2025 -

• Amendments to PAS 21, The Effects of Changes in Foreign Exchange Rates - Lack of
Exchangeability – The amendments clarify when a currency is considered exchangeable into
another currency and how an entity determines the exchange rate for currencies that lack
exchangeability. The amendments also introduce new disclosure requirements to help users of
consolidated financial statements assess the impact when a currency is not exchangeable. An
entity does not apply the amendments retrospectively. Instead, an entity recognizes any effect
of initially applying the amendments as an adjustment to the opening balance of retained
earnings when the entity reports foreign currency transactions. When an entity uses a
presentation currency other than its functional currency, it recognizes the cumulative amount of
translation differences in equity. Earlier application is permitted.

Deferred effectivity -

• Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28 - Sale or Contribution
of Assets Between an Investor and its Associate or Joint Venture – The amendments address a
conflicting provision under the two standards. It clarifies that a gain or loss shall be recognized
fully when the transaction involves a business, and partially if it involves assets that do not
constitute a business. The effective date of the amendments, initially set for annual periods
beginning on or after January 1, 2016, was deferred indefinitely in December 2015 but earlier
application is still permitted.

Under prevailing circumstances, the adoption of the foregoing amendments to PFRSs and PIC
issuances is not expected to have any material effect on the consolidated financial statements of the
Group. Additional disclosures will be included in the consolidated financial statements, as
applicable.

Basis of Consolidation
The consolidated financial statements of the Group comprise the financial statements of the Parent
Company and its subsidiaries.

Subsidiaries. Subsidiaries are entities in which the Group has control. The Group controls a
subsidiary if it is exposed or has rights to variable returns from its involvement with the subsidiary
and has the ability to affect those returns through its power over the subsidiary. Control is generally
accompanied by a shareholding of more than one-half of the voting rights. The existence and effect
of potential voting rights that are substantive are considered when assessing whether the Group
controls an entity. The Group reassesses whether or not it controls an entity if facts and
circumstances indicate that there are changes to one or more of the three elements of control.
 -6-

The financial statements of the subsidiaries are included in the consolidated financial statements
from the date when the Group obtains control and continue to be consolidated until the date when
such control ceases. The results of operations of the subsidiaries acquired or disposed of are
included in the consolidated statements of comprehensive income from the date of acquisition or
up to the date of disposal, as appropriate.

The financial statements of the subsidiaries are prepared using the same reporting period of the
Parent Company. Consolidated financial statements are prepared using uniform accounting policies
for like transactions and other events in similar circumstances. Intercompany balances and
transactions, including intercompany profits and unrealized profits and losses, are eliminated in full.

A change in the ownership interest of a subsidiary, without a change in control, is accounted for as
an equity transaction. Upon the loss of control, the Group derecognizes the assets (including
goodwill) and liabilities of the subsidiary, any non-controlling interests and the other components of
equity related to the subsidiary. Gain or loss arising from the loss of control is recognized in profit or
loss. If the Group retains an interest in the previous subsidiary, then such interest is measured at
fair value at the date control is lost. Subsequently, it is accounted for as an equity-accounted
investee or as financial assets at FVOCI depending on the level of interest retained.

Non-controlling Interests. Non-controlling interests represent the portion of profit or loss and net
assets not held by the Group, presented within equity in the consolidated statements of financial
position, separately from equity attributable to equity holders of the Parent Company. Non-controlling
interests represent the interests of minority shareholders of CCPC, PLHI, HSAPI and FMCMI.

Business Combination and Goodwill

Acquisitions of businesses are accounted for using the acquisition method. The acquisition cost is
measured as the sum of the considerations transferred, measured at acquisition date fair value and
the amount of any non-controlling interests in the acquiree. For each business combination,
the Group elects whether it measures the non-controlling interests in the acquiree either at fair
value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs
incurred are expensed and included in selling and administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances, and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.

When the business combination is achieved in stages, any previously held non-controlling interests
is re-measured at the date of obtaining control and a gain or loss is recognized in profit or loss.

If the initial accounting for a business combination is incomplete as at the reporting date in which
the combination occurs, the Group reports in its consolidated financial statements provisional
amounts for the items for which the accounting is incomplete. During the measurement period, the
Group retrospectively adjusts the provisional amounts and recognizes additional assets or liabilities
to reflect new information obtained about facts and circumstances that existed as of the acquisition
date. The measurement period ends at the date the Group receives the information about facts and
circumstances that existed as of the acquisition date or learns that more information is not
obtainable but should not exceed one year from the acquisition date.
 -7-

Goodwill, which arose from the acquisitions of controlling shares in HSAPI in 2014, is initially measured
at the acquisition date as the sum of the fair value of consideration transferred; the recognized
amount of any non-controlling interests in the acquiree; and, if the business combination is achieved
in stages, the fair value of existing equity interest in the acquiree less the fair value of net identifiable
assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net
assets of the subsidiary acquired, the bargain purchase gain is recognized directly in profit or loss. The
consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the entity’s cash-generating units or group of cash-generating units that are
expected to benefit from the synergies of the combination, irrespective of whether other assets or
liabilities of the entity are assigned to those units or groups of units. Each unit or group of units to
which goodwill is allocated represents the lowest level within the entity at which goodwill is
monitored for internal management purposes.

Where goodwill has been allocated to a cash-generating unit or group of cash generating units and
part of the operation within that unit is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the operation in determining the gain or loss on
disposal. Goodwill disposed in this circumstance is measured based on the relative values of the
disposed operation and the portion of the cash-generating unit retained.

Financial Assets and Liabilities

Recognition and Measurement

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

Initial Recognition and Measurement. Financial instruments are recognized initially at fair value,
which is the fair value of the consideration given (in case of an asset) or received (in case of a
liability). The initial measurement of financial instruments, except for those designated at FVPL,
includes transaction cost.

“Day 1” Difference. Where the transaction in a non-active market is different from the fair value of
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” difference) in profit or loss.
In cases where there is no observable data on inception, the Group deems the transaction price as
the best estimate of fair value and recognizes “Day 1” difference in profit or loss 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” difference.
 -8-

Classification
The Group classifies its financial assets at initial recognition under the following categories:
(a) financial assets at FVPL, (b) financial assets at amortized cost and (c) financial assets at FVOCI.
Financial liabilities, on the other hand, are classified as either financial liabilities at FVPL or financial
liabilities at amortized cost. The classification of a financial instrument largely depends on the
Group’s business model and its contractual cash flow characteristics.

As at December 31, 2023 and 2022, the Group does not have financial liabilities at FVPL.

Financial Assets at FVPL. Financial assets at FVPL are either classified as held for trading or
designated at FVPL. A financial instrument is classified as held for trading if it meets either of the
following conditions:

• it is acquired or incurred principally for the purpose of selling or repurchasing it in the near
term;

• on initial recognition, it is part of a portfolio of identified financial instruments that are managed
together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

• it is a derivative (except for a derivative that is a financial guarantee contract or a designated

and effective hedging instrument).

This category includes equity instruments which the Group had not irrevocably elected to classify at
FVOCI at initial recognition. This category includes debt instruments whose cash flows are not
“solely for payment of principal and interest” assessed at initial recognition of the assets, or which
are not held within a business model whose objective is either to collect contractual cash flows, or
to both collect contractual cash flows and sell.

The Group may, at initial recognition, designate a financial asset meeting the criteria to be classified
at amortized cost or at FVOCI, as a financial asset or financial liability at FVPL, if doing so eliminates
or significantly reduces accounting mismatch that would arise from measuring these assets or
liabilities.

After initial recognition, financial assets at FVPL are subsequently measured at fair value. Unrealized
gains or losses arising from the fair valuation of financial assets at FVPL are recognized in profit or
loss.

As at December 31, 2023 and 2022, the Group designated its investments in quoted shares as
financial assets at FVPL.

Financial Assets at Amortized Cost. Financial assets shall be measured at amortized cost if both of
the following conditions are met:
• the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise, on specified dates, to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
 -9-

After initial recognition, financial assets at amortized cost are subsequently measured at amortized
cost using the effective interest method, less allowance for impairment, if any. 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. Gains and losses are recognized in profit or loss when the
financial assets are derecognized and through an amortization process. Financial assets at amortized
cost are included under current assets if realizability or collectibility is within 12 months after the
reporting period. Otherwise, these are classified as noncurrent assets.

As at December 31, 2023 and 2022, the Group’s cash and cash equivalents, receivables, refundable
deposits and construction bond (both presented under “Other assets”) are classified under this
category.

Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash with original maturities of three months or less from dates of placement and which
are subject to an insignificant risk of changes in value.

Financial Assets at FVOCI. For debt instruments that meet the contractual cash flow characteristic
and are not designated at FVPL under the fair value option, the financial assets shall be measured at
FVOCI if both of the following conditions are met:

• the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows and selling the financial assets; and

• the contractual terms of the financial asset give rise, on specified dates, to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

For equity instruments, the Group may irrevocably designate the financial asset to be measured at
FVOCI in case the above conditions are not met.

Financial assets at FVOCI are initially measured at fair value plus transaction costs. After initial
recognition, interest income (calculated using the effective interest rate method), foreign currency
gains or losses and impairment losses of debt instruments measured at FVOCI are recognized directly
in profit or loss. When the financial asset is derecognized, the cumulative gains or losses previously
recognized in other comprehensive income are reclassified from equity to profit or loss as a
reclassification adjustment.

Dividends from equity instruments held at FVOCI are recognized in profit or loss when the right to
receive payment is established, unless the dividend clearly represents a recovery of part of the cost
of the investment. Foreign currency gains or losses and unrealized gains or losses from equity
instruments are recognized in other comprehensive income and presented in the equity section of
the consolidated statement of financial position. These fair value changes are recognized in equity
and are not reclassified to profit or loss in subsequent periods, even if the asset is sold or impaired.
The cumulative fair value adjustment is transferred to retained earnings when the asset is sold.

As at December 31, 2023 and 2022, the Group designated its investment in unquoted shares as a
financial asset at FVOCI.

Financial Liabilities at Amortized Cost. Financial liabilities are categorized as financial liabilities at
amortized cost when 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 settle the obligation
other than by the exchange of a fixed amount of cash or another financial asset for a fixed number
of its own equity instruments.
 - 10 -

These financial liabilities are initially recognized at fair value less any directly attributable transaction
costs. After initial recognition, these 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 effective interest rate.
Gains and losses are recognized in profit or loss when the liabilities are derecognized or through the
amortization process.

As at December 31, 2023 and 2022, the Group’s accounts and other payables (excluding contract
liabilities, statutory payable, deposits for document processing, and unearned rental income) and
security deposits are classified under this category.

Reclassification
The Group reclassifies its financial assets when, and only when, it changes its business model for
managing those financial assets. The reclassification is applied prospectively from the first day of
the first reporting period following the change in the business model (reclassification date).

For a financial asset reclassified out of the financial assets at amortized cost category to financial
assets at FVPL, any gain or loss arising from the difference between the previous amortized cost of
the financial asset and fair value is recognized in profit or loss.

For a financial asset reclassified out of the financial assets at amortized cost category to financial
assets at FVOCI, any gain or loss arising from a difference between the previous amortized cost of
the financial asset and fair value is recognized in other comprehensive income.

For a financial asset reclassified out of the financial assets at FVPL category to financial assets at
amortized cost, its fair value at the reclassification date becomes its new gross carrying amount.

For a financial asset reclassified out of the financial assets at FVOCI category to financial assets at
amortized cost, any gain or loss previously recognized in other comprehensive income is removed
from equity and adjusted against the fair value of the financial asset. The financial asset is measured
at the reclassification day as if it had always been measured at amortized cost.

In the case of a financial asset that does not have a fixed maturity, the gain or loss shall be
recognized in profit or loss when the financial asset is sold or disposed of. If the financial asset is
subsequently impaired, any previous gain or loss that has been recognized in other comprehensive
income is reclassified from equity to profit or loss.

For a financial asset reclassified out of the financial assets at FVPL category to financial assets at
FVOCI, its fair value at the reclassification date becomes its new gross carrying amount. Meanwhile,
for a financial asset reclassified out of the financial assets at FVOCI category to financial assets at
FVPL, the cumulative gain or loss previously recognized in other comprehensive income is
reclassified from equity to profit or loss as a reclassification adjustment at the reclassification date.

Impairment
The Group records an allowance for expected credit losses (ECL) which is based on the difference
between the contractual cash flows due in accordance with the contract and all the cash flows that
the Group expects to receive. The difference is then discounted at an approximation to the asset’s
original effective interest rate.

For trade receivables (excluding installment contracts receivable), the Group has applied the
simplified approach and has calculated ECL based on the lifetime ECL. The Group has established a
provision matrix that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.
 - 11 -

For installment contracts receivable and other financial assets at amortized cost, the ECL is based on
the 12-month ECL, which pertains to the portion of lifetime ECL that results from default events on a
financial instrument that are possible within 12 months after the reporting date. However, when there
has been a significant increase in credit risk since initial recognition, the allowance will be based on the
lifetime ECL. When determining whether the credit risk of a financial asset has increased significantly
since initial recognition, the Group compares the risk of a default occurring on the financial instrument
as at the reporting date with the risk of a default occurring on the financial instrument as at the date
of initial recognition and consider reasonable and supportable information, that is available without
undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.

Derecognition

Financial Assets. A financial asset (or where applicable, a part of a financial asset or part of a group
of similar financial assets) is derecognized when:

• the right to receive cash flows from the asset has expired;

• the Group retains the right to receive cash flows from the financial asset, but has assumed an
obligation to pay them in full without material delay to a third party under a “pass-through”
arrangement; or

• the Group has transferred its right to receive cash flows from the financial asset and either
(a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its right to receive cash flows from a financial asset or has entered
into a pass-through arrangement, and has neither transferred nor retained substantially all the risks
and rewards of ownership of the financial asset nor transferred control of the financial asset,
the financial asset is recognized to the extent of the Group’s continuing involvement in the financial
asset. Continuing involvement that takes the form of a guarantee over the transferred financial
asset is measured at the lower of the original carrying amount of the financial asset and the
maximum amount of consideration that the Group could be required to repay.

Financial Liabilities. A financial liability is derecognized when the obligation under the liability is
discharged, cancelled or has expired. When 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 statements of comprehensive income.

Offsetting
Financial assets and financial liabilities are offset and the net amounts reported in the consolidated
statements 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 statements of financial
position.
 - 12 -

Classification of Financial Instrument between Liability and Equity

A financial instrument is classified as liability if it provides for a contractual obligation to:

• Deliver cash or another financial asset to another entity;

• Exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Company; or

• Satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.

If the Group does not have an unconditional right to avoid delivering cash or another financial asset
to settle its contractual obligation, the obligation meets the definition of a financial liability.

Inventories
Inventories are initially measured at cost. Subsequently, inventories are stated at the lower of cost and
net realizable value (NRV).

Real Estate Inventories. Real estate inventories include constructed houses, lots, condominium units
and parking slots which are for sale in the ordinary course of business rather than to be held for
rental or capital appreciation. Costs include the acquisition cost of the land plus costs incurred for
development and improvement of the properties. NRV is the estimated selling price in the ordinary
course of business less estimated costs to complete and sell. Cost represents price using a specific
identification method.

Medical Supplies. Medical supplies pertain to medical, laboratory and pharmacy supplies. Costs comprise
purchase price determined using the first-in, first-out method plus other costs that have been
incurred in bringing the inventories to their present location and condition. NRV is the estimated
selling price less costs to sell. In determining the NRV, the Group considers any adjustment
necessary for obsolescence.

When the NRV of the inventories is lower than the cost, the Group provides for an allowance for the
decline in the value of inventories and recognizes the write-down as an expense in profit or loss.
The amount of any reversal of any write-down of inventories, arising from an increase in NRV,
is recognized as a reduction in the amount of inventories recognized as an expense in the period in
which the reversal occurs. When inventories are sold or used in operations, the carrying amount of
those inventories is recognized as an expense in the period in which the related revenue is
recognized.

When inventories are sold, the carrying amount of those inventories is recognized to profit or loss in
the year when the related revenue is recognized.

Creditable Withholding Taxes (CWTs)

CWTs represent the amount withheld by the Group’s customers in relation to its income. CWTs can
be carried forward to the succeeding year when in excess of income tax payable and utilized as
payment for income taxes provided that these are properly supported with certificates of creditable
tax withheld at source. CWTs are stated at face amount less any impairment in value.
 - 13 -

Investment Properties
Investment properties are properties held either to earn rental income or for capital appreciation or
both, but not for sale in the ordinary course of business or for administrative purposes.

Investment properties, except land, are measured at cost less accumulated depreciation and any
impairment in value. Land is stated at cost less any impairment in value. The carrying amount
includes the cost of replacing part of existing investment properties at the time that cost is incurred
if the recognition criteria are met and excludes the costs of day-to-day servicing of investment
properties.

Depreciation are calculated on a straight-line basis over the estimated useful life of 30 years.

The estimated useful life and depreciation method are reviewed periodically to ensure that these
are consistent with the expected pattern of economic benefits from items of investment properties.

Transfers are made to investment properties when, and only when, there is a change in use,
evidenced by the end of owner-occupation or 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 the commencement of owner-occupation or commencement of development
with a view to sell.

Investment properties are derecognized when either these have been disposed of or when the
investment properties are permanently withdrawn from use and no future economic benefit is
expected from its disposal. Any gains or losses on the retirement or disposal of investment
properties are recognized in profit or loss in the year of retirement or disposal.

Property and Equipment

Property and equipment, except land and construction-in-progress (CIP), are stated at cost less
accumulated depreciation and amortization and any impairment in value. Land is stated at cost less any
impairment in value.

The initial cost of property and equipment comprises its purchase price, after deducting trade discounts
and rebates, and any directly attributable costs of bringing the asset to its working condition and location
for its intended use.

CIP represents the on-going construction of the additional floor of the building and is stated at cost
including costs of construction and other direct costs. This is not depreciated until such time that the
relevant assets are completed and ready for operational use.

Expenditures incurred after the property and equipment have been put into operation, such as
repairs, maintenance and overhaul costs, are normally recognized in profit or loss in the year the
costs are incurred. In situations where it can be clearly demonstrated that the expenditures have
resulted in an increase in the future economic benefits expected to be obtained from the use of an
item of property and equipment beyond its originally assessed standard of performance, the
expenditures are capitalized as additional costs of property and equipment. The cost of replacing a
component of an item of property and equipment is recognized if it is probable that the future
economic benefits embodied within the component will flow to the Group, and its cost can be
measured reliably. The carrying amount of the replaced component is derecognized.

When significant parts of an item of property and equipment have different useful lives, these are
accounted for as separate items (major components) of property and equipment.
 - 14 -

Depreciation and amortization are calculated on a straight-line basis over the following estimated
useful lives:

Asset type Useful Life in Years

Building and building improvements 10 to 30
Medical equipment 5 to 7
Transportation equipment 5
Office furniture, fixtures and equipment 3 to 5

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

Fully depreciated and amortized assets are retained in the accounts until they are no longer in use
and no further charge for depreciation and amortization is made in respect of those assets.

When assets are retired or otherwise disposed of, the cost and the related accumulated
depreciation, amortization and any impairment in value are removed from the accounts. Any
resulting gain or loss is recognized in profit or loss.

Interests in Joint Operations

A joint arrangement is an arrangement whereby the parties are bound by a contractual
arrangement and such contractual arrangement gives two or more of those parties joint control of
the arrangement. A joint arrangement is either a joint operation or joint venture.

Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require the unanimous consent of the parties sharing
control.

The considerations made in determining significant influence or joint control are similar to those
necessary to determine control over subsidiaries.

The Group accounted for its interests in Santa Lucia Realty and Development Inc. (SLRDI) and David
M. Consunji, Inc. (DMCI) as joint operations (see Note 23).

A joint operation involves the use of assets and other resources of the Group and other venturers
rather than the establishment of a corporation, partnership or other entity. The Group accounts for
the assets it controls, and the liabilities and expenses it incurs, and the share of the income that it
earns from the sale of goods, properties or services by the joint operation. The assets contributed
to the joint operation are measured at the lower of cost or NRV.

Impairment of Nonfinancial Assets

The carrying amounts of nonfinancial assets are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable. If any such indication
exists and when the carrying amounts exceed the estimated recoverable amounts, the assets or
cash-generating units are written down to their recoverable amounts. The recoverable amount of
the asset is the greater of the fair value less cost to sell or value in use. The fair value less cost to sell
is the amount obtainable from the sale of an asset in an arm’s-length transaction. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pretax discount
rate that reflects current market assessments of the time value of money and the risks specific to
the asset. For an asset that does not generate largely independent cash inflows, the recoverable
amount is determined for the cash-generating unit to which the asset belongs. Impairment losses
are recognized in profit or loss.
 - 15 -

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. In such instance, the carrying amount of the asset is
increased to its recoverable amount. However, that increased amount cannot exceed the carrying
amount that would have been determined (net of depreciation and amortization for investment
properties and property and equipment) had no impairment loss been recognized for the asset in
prior years. Such reversal is recognized in profit or loss. After such reversal, the depreciation and
amortization is adjusted in future years to allocate the asset’s revised carrying amount, on a
systematic basis over its remaining useful life.

Employee Benefits

Short-term Benefits. Short-term employee benefits are recognized as an expense in the period when
the economic benefits are given. Unpaid benefits at the end of the accounting period are recognized
as accrued expense while benefits paid in advance are recognized as prepayment to the extent that
it will lead to a reduction in future payments. Short-term benefits given by the Group to its
employees include salaries and wages, social security contributions, short-term compensated
absences and non-monetary benefits.

Retirement Benefits. The retirement benefit costs are actuarially determined using the projected
unit credit method. This method reflects services rendered by employees to the date of valuation
and incorporates assumptions concerning employees’ projected salaries. The calculation of defined
benefit liability is performed by a qualified actuary.

The Group recognizes current service costs, past service costs and interest expense on the
retirement benefits liability in profit or loss. Interest expense is calculated by applying the discount
rate to the retirement benefits liability at the beginning of the year, taking into account any changes
in the defined obligation during the period as a result of benefit payments.

Remeasurements of the net retirement benefits liability, which pertains to actuarial gains and
losses, are recognized immediately in other comprehensive income in the period in which they arise.

Remeasurements are not reclassified to profit or loss in subsequent periods.

Plan assets are assets that are held in trust and managed by a trustee bank. Plan assets are not
available to the creditors of the Group, nor can they be paid directly to the Group. The fair value of
the plan assets is based on the market price information. When no market price is available, the fair
value of plan assets is estimated by discounting expected future cash flows using a discount rate
that reflects both the risk associated with the plan assets and the maturity or expected disposal date
of those assets (or, if they have no maturity, the expected period until the settlement of the related
obligations). If the fair value of the plan assets is higher than the present value of the defined
benefit obligation, the measurement of the resulting defined benefit asset is limited to the present
value of economic benefits available in the form of refunds from the plan or reductions in future
contributions to the plan.

The net retirement benefits liability recognized by the Group is the present value of the defined
benefit obligation reduced by the fair value of plan assets. The present value of defined benefit
obligation is determined by discounting the estimated future cash outflows using risk-free interest
rates of government bonds that have terms to maturity approximating the terms of the related
retirement benefits liability.
 - 16 -

Actuarial valuations are made with sufficient regularity so that the amounts recognized in the
consolidated financial statements do not differ materially from the amounts that would be
determined at the reporting date.

Equity

Capital Stock and Additional Paid-in Capital (APIC). Capital stock is measured at par value for all
shares subscribed and/or issued. Incremental costs, net of tax, incurred that are directly attributable
to the issuance of new shares are recognized in equity as a reduction from related APIC or retained
earnings. Excess of proceeds or fair value of the consideration received over par value is recognized
as APIC.

Retained Earnings. Retained earnings represent the cumulative balance of the Group’s results of
operations, net of dividends. Retained earnings may also include the effect of changes in accounting
policy as may be required by the standard’s transitional provision.

Dividend Distribution. Dividends are recognized as a liability and deducted from equity when
declared by the BOD and the shareholders of the Parent Company. Dividends for the year that are
declared after the reporting date are dealt with as an event after the reporting date.

Other Comprehensive Loss. This pertains to the cumulative unrealized fair value losses on financial
assets at FVOCI and cumulative remeasurement gain on the Group’s net retirement benefits liability
arising from experience adjustments and changes in financial assumptions. Unrealized fair value
loss on financial assets at FVOCI and remeasurements of net retirement benefits liability, and the
corresponding deferred tax component of the remeasurements of net retirement benefits liability,
are recognized immediately in other comprehensive income and are included in equity. These are
not reclassified to profit or loss in subsequent periods.

Treasury Stock. Own equity instruments which are reacquired are recognized at cost and deducted
from equity. No gain or loss is recognized in the consolidated statements of comprehensive income
on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference
between the carrying amount and the consideration, if reissued, is recognized in APIC. Voting rights
related to treasury stock are nullified for the Group and no dividends are allocated to them.

Revenue Recognition
The Group generates revenue primarily from real estate sales and sale of premium quality healthcare
services. Other revenue sources include rental income from investment properties.

Revenue from Contracts with Customers. Revenue from contract with customers is recognized when
the performance obligation in the contract has been satisfied, either at a point in time or over time.
Revenue is recognized over time if one of the following criteria is met: (a) the customer simultaneously
receives and consumes the benefits as the Group performs its obligations; (b) the Group’s
performance creates or enhances an asset that the customer controls as the asset is created or
enhanced; or (c) the Group’s performance does not create an asset with an alternative use to the
Group and the Group has an enforceable right to payment for performance completed to date.
Otherwise, revenue is recognized at a point in time.

The Group also assesses its revenue arrangements to determine if it is acting as a principal or as an
agent. The Group has assessed that it acts as a principal in all of its revenue sources.
 - 17 -

The following specific recognition criteria must also be met before revenue is recognized.

▪ Real Estate Sales. The Group assesses whether it is probable that the economic benefits will
flow to the Group when the contract price is collectible. Collectibility of the contract price is
demonstrated by the buyer’s commitment to pay, which is supported by the buyer’s initial and
continuous investments that motivate the buyer to honor its obligation. Collectibility is also
assessed by considering factors such as collections and credit standing of the buyer.

The collectibility of the sales price is considered reasonably assured when a substantial portion
of the contract price is received and continuing payment is made by the buyer giving the buyer a
substantial stake in the property sufficient to motivate the buyer to fulfill its purchase
commitment.

Revenue from sales of completed real estate projects is generally accounted for using the full
accrual method.

Pending recognition of sale, cash received from buyers are presented as “Contract liabilities”
account in the consolidated statements of financial position. Collections for processing of deed
of sale and other documents necessary in transferring titles to real estate buyers are presented
as “Deposits for document processing” under “Accounts and other payables” in the consolidated
statements of financial position.

For tax purposes, full recognition is applied when more than 25% of the selling price has been
collected in the year of sale. Otherwise, the installment method is applied.

▪ Sale of Services. Revenue is recognized when the performance of contractually agreed

healthcare services has been rendered. Revenue from healthcare services is gross of physician’s
fee.

Revenue from Other Sources. Revenue from other sources is recognized as follows:

▪ Rental Income. Rental income is recognized on a straight-line basis over the lease term. Income
collected in advance is deferred and is included as “Unearned rental income” in “Accounts and
other payables” account in the consolidated statements of financial position.

▪ Dividend Income. Dividend income is recognized on the date when the Group’s right to receive
payment is established.

▪ Interest Income. Interest income from financial assets at FVPL is included in the net fair value
gains (losses) on these assets. Interest income on financial assets at amortized cost calculated
using the effective interest method is recognized as interest income under revenue. Interest
income is calculated by applying the effective interest rate to the gross carrying amount of a
financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired
financial assets, the effective interest rate is applied to the net carrying amount of the financial
asset (after deduction of the loss allowance). Interest income is presented as such where it is
earned from financial assets that are held for cash management purposes. Any other interest
income is included in other income.
 - 18 -

Other Income
The Group’s other sources of income, which are mainly from gains on disposal of assets, forfeiture
of customer deposits, surcharges, and other fees, are recognized as income when earned.

Contract Balances

• Receivables. A receivable represents the Group’s right to an amount of consideration that is

unconditional (i.e., only the passage of time is required before payment of the consideration is
due).

• Contract Assets. A contract asset is the right to a consideration in exchange for goods or
services transferred to a customer. If the Group performs by transferring goods or services to a
customer before the customer pays a consideration or before payment is due, a contract asset is
recognized for the earned consideration that is conditional.
As at December 31, 2023 and 2022, the Group does not have outstanding contract assets.

• Contract Liabilities. A contract liability is the obligation to transfer goods or services to a

customer for which the Group has received a consideration (or an amount of consideration is
due) from the customer. If a customer pays a consideration before the Group transfers goods or
services to the customer, a contract liability is recognized when the payment is made by the
customer or when the payment is due (whichever is earlier). Contract liabilities are recognized
as revenue as the Group performs its obligation under the contract. Contract liabilities also
include payments received by the Group from customers for which revenue recognition has not
yet commenced and payments in excess of revenue recognized based on percentage of
completion.

As at December 31, 2023 and 2022, the balances of contract liabilities are disclosed in Note 13.

• Cost to Obtain a Contract. If the Group expects to recover the incremental costs of obtaining a
contract with a customer, the costs are recognized as an asset. The Group has determined that
commissions paid to brokers and marketing agents on the sale of pre-completed real estate
units are deferred when recovery is reasonably expected and are charged to expense in the
period in which the related revenue is recognized as earned. Commission expense is included in
the “Selling and administrative expenses” account in the consolidated statements of
comprehensive income. Costs incurred prior to obtaining contract with customer are not
capitalized but are expensed as incurred.

• Contract Fulfillment Asset. Contract fulfillment costs are divided into: (i) costs that give rise to
an asset; and (ii) costs that are expensed as incurred. When determining the appropriate
accounting treatment for such costs, the Group first considers any other applicable standards. If
those standards preclude capitalization of a particular cost, then an asset is not recognized
under PFRS 15. If other standards are not applicable to contract fulfillment costs, the Group
applies the following criteria which, if met, result in capitalization: (i) the costs directly relate to
a contract or to a specifically identifiable anticipated contract; (ii) the costs generate or enhance
resources of the entity that will be used in satisfying (or in continuing to satisfy) performance
obligations in the future; and (iii) the costs are expected to be recovered. The assessment of
these criteria requires the application of judgment, in particular when considering if costs
generate or enhance resources to be used to satisfy future performance obligations and
whether costs are expected to be recoverable.
 - 19 -

As at December 31, 2023 and 2022, the Group does not have cost to obtain a contract and
contract fulfillment asset.

Cost and Expense Recognition

Costs and expenses are recognized in profit or loss when a decrease in future economic benefits
related to a decrease in an asset or an increase in a liability has arisen that can be measured reliably.

Cost of Real Estate Sold. Cost of real estate sold is recognized in profit or loss upon sale and is
determined with reference to the specific costs incurred on the property, allocated to saleable areas
based on relative size and takes into account the percentage of completion used for revenue
recognition purposes.

Cost of Services. Cost of services is recognized as expense when the related services are rendered.

Selling and Administrative Expenses. Selling and administrative expenses constitute costs incurred to
sell and market the goods and costs of administering the business. These are recognized as expenses
in the period when these are incurred.

Foreign Currency Transactions and Translation

Transactions in currencies other than Peso are initially recorded using the exchange rate at the date
of the transactions. Monetary assets and liabilities denominated in foreign currencies are restated
using the closing exchange rate prevailing at the reporting date. Exchange gains or losses arising
from foreign exchange transactions are credited to or charged against operations for the year.

For income tax reporting purposes, foreign exchange gains or losses are treated as taxable income
or deductible expenses in the year such are realized.

Leases
The Group assesses whether the contracts are, or contains a lease. To assess whether a contract
conveys the right to control the use of an identified assets for a period of time, the Group assesses
whether, throughout the period of use, it has both of the following:

i. the right to obtain substantially all of the economic benefits from the use of the identified asset;
and

ii. the right to direct the use of the identified asset.

If the Group has the right to control the use of an identified asset for only a portion of the term of
the contract, the contract contains a lease for that portion of the term.

The Group also assesses whether a contract contains a lease for each potential separate lease
component.

Leases where the Group retains substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added
to the carrying amount of the leased asset and recognized on a straight-line basis over the lease
term on the same basis as rental income. Contingent rents are recognized as revenue in the period
in which these are earned.

The Group as a Lessee. At the commencement date, the Group recognizes right-of-use (ROU) assets
and lease liabilities for all leases, except for leases with lease terms of 12 months or less (short-term
leases) and leases for which the underlying asset is of low value in which case the lease payments
associated with those leases are recognized as an expense on a straight-line basis.
 - 20 -

Income Taxes

Current Tax. Current tax assets and liabilities 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. Deferred tax is provided on all temporary differences at the reporting date between
the tax bases of assets and liabilities and their 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 net operating loss
carryover (NOLCO) and excess minimum corporate income tax (MCIT) over regular corporate
income tax (RCIT), to the extent that it is probable that future taxable profit will be available against
which the deductible temporary differences and carryforward benefits of NOLCO and excess MCIT
over RCIT can be utilized within the period allowed by the tax regulations.

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

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

Offsetting. Current tax assets and current tax liabilities are offset, or deferred tax assets and
deferred tax liabilities are offset if, and only if, an enforceable right exists to set off the amounts and
it can be demonstrated without undue cost or effort that the Group plans either to settle on a net
basis or to realize the asset and settle the liability simultaneously.

Related Party Relationships and Transactions

Related party relationships exist when one party has the ability to control, directly or indirectly
through one or more intermediaries, the other party or exercise significant influence over the other
party in making financial and operating decisions. Such relationships also exist between and/or
among entities that are under common control with the reporting enterprise, or between and/or
among the reporting enterprise and its key management personnel, directors, or its stockholders.

A related party transaction is a transfer of resources, services or obligations between a reporting

entity and a related party, regardless of whether a price is charged.

Related party transactions are considered material and/or significant if (i) these transactions amount
to 10% or higher of the Group’s total assets or, (ii) there are several transactions or a series of
transactions over a 12-month period with the same related party amounting to 10% or higher of the
Group’s total assets. Details of transactions entered into by the Group with related parties are
reviewed by independent directors in accordance with the Group's related party transactions policy.
 - 21 -

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. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessment
of the time value of money and, where appropriate, the risks specific to the liability. Where
discounting is used, the increase due to the passage of time is recognized as interest expense.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

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

Events after the Reporting Date

Post year-end events that provide additional information about the Group’s financial position as 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 consolidated financial
statements when material.

Earnings Per Share (EPS)

The Group presents basic and diluted EPS data for its common shares.

Basic EPS is calculated by dividing the net income attributable to Parent Company by the weighted
average number of common shares issued and outstanding during the year. The Parent Company
does not have potential dilutive shares.

Operating Segments
For management purposes, the Group is divided into operating segments per products/services,
(real estate, healthcare services, and investment holdings) according to the nature of the products
and services provided. The Group’s identified operating segments are consistent with the segments
reported to the BOD which is the Group’s chief operating decision maker. Financial information on
operating segments is presented in Note 27.

3. Significant Judgments, Accounting Estimates and Assumptions

The preparation of the Group’s consolidated financial statements requires management to exercise
judgments, make accounting estimates and use assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. The judgments and accounting
estimates used in the consolidated financial statements are based on management’s evaluation of
relevant facts and circumstances as at the reporting date.

While the Group believes that the assumptions are reasonable and appropriate, significant
differences in the actual experience or significant changes in the assumptions may materially affect
the estimated amounts. Actual results could differ from such estimates.
 - 22 -

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting
estimates are recognized in the year in which the estimate is revised if the change affects only that
year or in the year of the revision and future periods if the change affects both current and future
years.

The Group believes that the following represent a summary of these significant judgments, accounting
estimates and assumptions and the related impact and associated risks in the consolidated financial
statements:

Classifying Financial Instruments. The classification of a financial instrument largely depends on the
Group’s business model and its contractual cash flow characteristics.

Management has determined that the Group’s investments in quoted shares are acquired
principally for the purpose of selling in the near term; hence, the Group classified its investments in
quoted shares as financial assets at FVPL.

Management has determined that the Group’s investments in unquoted shares is to be held
indefinitely and will be sold in response to liquidity requirements; hence, the Group classified its
investments as financial assets at FVOCI.

Classifying a Property. The Group determines whether a property is classified as real estate
inventories, investment properties, or property and equipment:

• Real estate inventories comprise properties that are held for sale in the ordinary course of
business. Principally, these are condominium units and residential properties that the Group
develops and intends to sell before or on completion of construction.

• Investment properties consist of properties which are not occupied substantially for use by, or
in the operations of, the Group, nor for sale in the ordinary course of business, but are held
primarily to earn rental income and capital appreciation.

• Property and equipment are tangible items that are held for use in the delivering or supply of
goods or services and are expected to be used for more than one period. These are properties
which are owner-occupied and are substantially for use of the Group or in the operations.

Assessing Contingencies. The Group is a party to certain lawsuits or claims arising from the ordinary
course of business. However, the Group’s management and legal counsel believe that the eventual
liabilities under these lawsuits or claims, if any, will not have a material effect on the consolidated
financial statements. Accordingly, no liability for probable losses arising from contingencies was
recognized in the consolidated financial statements as at December 31, 2023 and 2022.

Classifying Lease Commitments. The Group as lessor has entered into lease agreements for its office
building and condominium units. The Group has determined, based on the evaluation of terms and
conditions of agreement, that as lessor it retains all the significant risks and benefits of ownership
related to the leased properties. Accordingly, the agreements are accounted for as operating leases.

The amount of rental income earned is disclosed in Note 23.

Determining Control over Investee Companies. Control over an investee is presumed to exist when
an investor is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee.
 - 23 -

Management has determined that the Parent Company has control over the financial and operating
policies of CCPC through representation on the BOD of CCPC. Accordingly, CCPC is considered as a
subsidiary.

Identifying Performance Obligation. The Group has various contracts to sell covering (a) houses and
lots and (b) condominium units. The Group concluded that there is one performance obligation in
each of these contracts because, for houses and lots, the Group integrates the lots it sells with the
associated infrastructure to be able to transfer the lot promised in the contract. For the contract
covering condominium units, the Group has the obligation to deliver the condominium unit duly
constructed in a specific lot and fully integrated into the land in accordance with the approved plan.
Included also in this performance obligation is the Group’s service to transfer the title of the real
estate unit to the customer.

Determining Revenue and Cost Recognition. Selecting an appropriate revenue recognition method
for a particular real estate transaction requires certain judgments based on the buyer’s commitment
on the sale which may be ascertained through the significance of the buyer’s initial investment and
completion of development. The Group concluded that revenue for real estate sales for completed
real estate projects is to be recognized at a point in time, when control is transferred. The control is
transferred when the customer has accepted the asset and the customer acceptance of an asset
may indicate that it has obtained the ability to direct the use of, and obtain substantially all of the
remaining benefits from, the asset.

The amounts of real estate sales and cost of real estate sold are disclosed in Notes 16 and 17,
respectively.

Determining Reportable Operating Segments. The Group has determined that it has reportable
segments based on the following thresholds:

a. Its reported revenue, including both sales to external customers and intersegment sales or transfers,
is 10% or more of the combined revenue, internal and external, of all operating segments.

b. The absolute amount of its reported profit or loss is 10% or more, in absolute amount, of
(i) the combined reported profit of all operating segments that did not report a loss and
(ii) the combined reported loss of all operating segments that reported a loss.

c. Its assets are 10% or more of the combined assets of all operating segments.

Assessing ECL. While cash and cash equivalents, refundable deposits and construction bond are also
subject to the impairment requirements of PFRS 9, the assessed impairment loss is not material.

Trade Receivables (Excluding Installment Contracts Receivable). The Group applies the simplified
approach in measuring ECL which uses a lifetime expected loss allowance for all trade receivables.
To measure the ECL, trade receivables have been grouped based on shared credit risk characteristics
and the days past due.

The expected loss rates are initially based on the Group’s historical default rates. These historical
default rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle their payables to the Group. The Group has
identified macroeconomic factors (i.e. gross domestic product growth rates, foreign exchange rates,
inflation rate, etc.) that are relevant, and accordingly adjusts the historical loss rates based on
expected changes in these factors.
 - 24 -

The assessment of the correlation between historical default rates, forecast economic conditions
and ECL is a significant estimate. The amount of ECL is sensitive to changes in circumstances and of
forecast economic conditions. The Group’s historical credit loss experience and forecast of economic
conditions may also not be representative of the customer’s actual default in the future.

Installment Contracts Receivable and Other Financial Assets at Amortized Cost. The Group applies
the general approach in measuring ECL which uses a 12-month or lifetime ECL for all installment
contracts receivable and other financial assets at amortized cost. To measure the ECL, these have
been grouped based on shared credit risk characteristics and the days past due.

The information about the ECL on the Group’s financial assets at amortized cost is disclosed in
Note 26. The amount of impairment loss on receivables is disclosed in Note 6. The carrying amounts of
these financial assets are disclosed in Notes 4, 6, 8 and 12.

Estimating the Fair Value of Financial Instruments. When the fair values of financial assets and
financial liabilities recorded in the consolidated statements of financial position cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques,
including the net asset method. The inputs to this method are based on net asset value on the
consolidated statements of financial position, but where these are not feasible, a degree of
judgment is required in establishing fair values. Judgments include considerations of inputs such as
liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect
the reported fair value of financial instruments.

The information on fair value measurement of financial assets and liabilities is disclosed in Note 25.

Estimating the NRV of Inventories. The Group determines the NRV of inventories annually in
accordance with the accounting policy stated in Note 2. In determining the NRV, the Group
considers the current selling price of the inventories for sale and estimated costs to complete and
sell. The Group writes down the carrying amount of the inventories when the NRV becomes lower
than the carrying amount.

The amount of inventories carried at the lower of cost and NRV is disclosed in Note 7.

Estimating the Useful Lives of Investment Properties and Property and Equipment. The useful lives of
the Group’s investment properties (excluding land) and property and equipment (excluding land and
CIP) are estimated based on the period over which the assets are expected to be available for use.
The estimation of the useful lives of investment properties and property and equipment is also
based on a collective assessment of industry practices, internal technical valuation and experience
with similar assets. The estimated useful life is reviewed and updated if expectations differ from
previous estimates due to physical wear and tear, technical or commercial obsolescence, or legal or
other limitations on the use of the assets. It is possible, however, that future results of operations
could be materially affected by changes in estimates brought about by changes in these factors and
circumstances.

There were no changes in the estimated useful lives of these assets in 2023, 2022 and 2021.
The carrying amounts of investment properties and property and equipment are disclosed in Notes
9 and 10, respectively.
 - 25 -

Determining the Fair Value of Investment Properties. Investment properties are measured at cost
but fair values are disclosed. The Group engaged external qualified appraiser to determine the fair
value of its investment properties. The fair values of investment properties were based on the
valuation performed in 2022 using appropriate valuation techniques. The fair values of land and
condominium units and parking slots were determined using market data approach while fair values
of ambulatory were determined using depreciated replacement cost. Market data approach involves
the comparison of the land to those that are more or less located within the vicinity of the appraised
property and are subject of recent sales and offerings. If there is limited data within the area, the
independent appraiser considers the expansion of the research on properties considered
comparable. Adjustments were made to arrive at the market value by considering the location, size,
shape, utility, desirability and time element. Depreciated replacement cost involves calculating the
current replacement cost of the assets less deductions for physical deterioration and all relevant
forms of obsolescence. The valuation techniques and inputs used in the fair value measurement of
investment properties are disclosed in Note 9 to the consolidated financial statements.

The Group did not obtain an appraisal valuation as at December 31, 2023 because the Group has
assessed that the fair value of the investment properties as at December 31, 2022 did not materially
differ from the amounts reported as at December 31, 2023. The latest independent appraiser’s
report was dated in October 2022.

For the purpose of fair value disclosures, the Group has determined the nature, characteristics and
risks of the investment properties and the level of the fair value hierarchy.

Details of investment properties are disclosed in Note 9 to the consolidated financial statements.

Assessing the Impairment of Nonfinancial Assets and Goodwill. The Group assesses impairment on
its nonfinancial assets (excluding goodwill) whenever events or changes in circumstances indicate
that the carrying amount of the assets or group of assets may not be recoverable. The relevant
factors that the Group considers in deciding whether to perform an asset impairment review include
the following:

• significant underperformance of a business in relation to expectations;

• significant negative industry or economic trends; and
• significant changes or planned changes in the use of the assets.

Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is
recognized. Recoverable amounts are estimated for individual assets or, if it is not possible, for the
cash-generating unit to which the asset belongs. Recoverable amount represents the greater of the
fair value less cost to sell and the value in use.

Goodwill is tested for impairment annually and more frequently, when circumstances indicate that
the carrying amount may be impaired.

No provision for impairment loss was recognized on nonfinancial assets (except investment
properties) and goodwill. The carrying values of the Group’s other assets (excluding refundable
deposits and construction bond), property and equipment and goodwill are disclosed in Notes 8, 10,
11 and 12.

Provision for losses on and carrying amount of investment properties are disclosed in Note 9.
 - 26 -

Determining the Net Retirement Benefits Liability. The determination of the obligation and costs of
retirement benefits is dependent on the assumptions used by the actuary in calculating such
amounts. The assumptions are described in Note 14 to the consolidated financial statements and
include, among others, discount rates and salary increase rates.

The amount of retirement benefits costs recognized and the carrying amount of net retirement
benefits liability are disclosed in Note 14.

Assessing the Recognition of Deferred Tax Assets. The Group reviews the carrying amounts of
deferred tax assets at each reporting date and reduces deferred tax assets to the extent that it is no
longer probable that sufficient future taxable profit will be available to allow all or part of the
deferred tax assets to be utilized within the period allowed by the tax regulations. The Group’s
assessment on the recognition of deferred tax assets is based on the forecasted taxable income of
the subsequent reporting periods. This forecast is based on the Group’s past results and future
expectations on revenue and expenses.

The amounts of recognized and unrecognized deferred tax assets are disclosed in Note 24.

4. Cash and Cash Equivalents

This account consists of cash on hand, cash in banks and short-term placements.

Cash in banks earn interest at prevailing bank deposit rates.

Short-term placements are made for varying periods of between one day and three months
depending on the immediate cash requirements of the Group and earn interest at prevailing
short-term placement rates.

Interest income earned is from the following:

Note 2023 2022 2021

Cash in banks and short-term
placements 20 P
=33,708,244 P
=11,013,535 P
=3,065,228
Installment contracts receivable 6 16,170,301 19,571,409 20,118,526
Loans receivable 6 41,167 999,999 118,056
P
=49,919,712 =31,584,943
P =23,301,810
P

5. Investments in Quoted Shares

This account pertains to marketable equity shares that are listed and traded in the PSE and the
Singapore Stock Exchange, which are classified as financial assets at FVPL. The fair value of the
marketable equity securities amounted to P
=85.9 million and P
=161.9 million as at December 31, 2023
and 2022, respectively.
The fair values were determined based on the closing bid prices at the reporting date (Level 1
hierarchy) (see Note 25).

Unrealized gain (loss) on the changes in fair value on investments in quoted shares amounted to
(P
=6.1 million), (P
=2.9 million) and P
=39.9 million in 2023, 2022 and 2021, respectively (see Note 20).
 - 27 -

Sale of investments in quoted shares resulted in a realized gain (loss) of P

=11.9 million, (P
=9.3 million),
=9.3 million in 2023, 2022, and 2021, respectively (see Note 20).
P

Dividend income was derived from the following (see Note 16):

Note 2023 2022 2021

Quoted shares P
=5,757,732 =10,611,771
P =10,784,429
P
Unquoted shares 12 – – 3,636,187
P
=5,757,732 =10,611,771
P =14,420,616
P

6. Receivables

This account consists of:

Note 2023 2022

Installment contracts receivable P
=99,505,963 P
=104,746,824
Due from a Project Developer 23 30,808,394 32,434,289
Receivables from:
Patient services 17,049,403 16,284,549
Contractors 12,741,843 12,741,843
Real estate buyers 1,927,834 5,183,994
Loans receivable 10,295,375 –
Billed rentals 23 1,879,676 1,707,535
Others 4,323,913 5,950,300
Total receivables 178,532,401 179,049,334
Allowance for impairment losses (22,055,637) (22,890,728)
Net receivables 156,476,764 156,158,606
Less noncurrent portion of installment
contracts receivable 81,243,140 84,951,745
Noncurrent portion of loans receivable 10,032,911 –
P
=65,200,713 =71,206,861
P

Installment Contracts Receivable

Installment contracts receivable pertain to real estate sales. These are collectible in various
installment periods of between one to 15 years and earn interest at 10% to 16% per annum.

Interest income earned from installment contracts receivable amounted to P =16.2 million,
=19.6 million and P
P =20.1 million in 2023, 2022 and 2021, respectively (see Note 4).

Other Receivables
Due from a Project Developer relates to collections of installment receivables by a developer.
These are to be remitted to the Group.

Receivables from patient services are noninterest-bearing and are normally collectible within 30 to
60 days.

Receivables from contractors pertain to advance payments made to contractors. These are fully
impaired and provided with allowance for impairment loss.

Receivable from real estate buyers includes processing fees paid by the Group that are necessary to
transfer the title to the buyers which are chargeable to the buyers.
 - 28 -

Loans Receivable
The Parent Company granted loans receivable to third parties.

In 2023, the Parent Company entered into a loans and security agreement with a third party (the
“Borrower”). The loans has a term of 20 years, payable monthly with an annual interest at 6.50%
and is secured by a real estate.

In 2022, the Parent Company fully collected the outstanding loans receivable as at December 31,
2021 from a third party. The loan bore interest at 10% per annum and was secured by a surety of an
individual and pledged shares (common shares listed in the PSE) approximating 200% of the loan
amount.

Movements in this account are as follows:

2023 2022
Balance at beginning of year P
=– P
=20,000,000
Loans granted 10,310,872 –
Collections (15,497) (20,000,000)
Balance at end of year 10,295,375 –
Less current portion 262,464 –
Noncurrent portion P
=10,032,911 =–
P

Interest income earned from the loans amounted to P

=41,167, P
=1.0 million, and P
=118,056 in 2023,
2022 and 2021, respectively (see Note 4).

Allowance for Impairment Losses

Details of allowance for impairment losses on receivables are as follows:

Note 2023 2022

Balance at beginning of year P
=22,890,728 =23,522,760
P
Write-off (311,834) (519,743)
Reversal 20 (523,257) (112,289)
Balance at end of year P
=22,055,637 =22,890,728
P

7. Inventories

Inventories stated at cost consist of:

2023 2022
Houses and lots P
=57,816,134 =66,893,733
P
Condominium units and parking slots 17,808,900 20,030,807
Medical supplies 2,206,847 2,066,062
P
=77,831,881 =88,990,602
P
 - 29 -

Houses and lots pertain to units in Palma Real Residential Estates with movements as follows:

Note 2023 2022

Balance at beginning of year P
=66,893,733 =86,103,554
P
Construction costs 6,900,968 11,949,105
Recovery from cancelled contracts 476,367 –
74,271,068 98,052,659
Cost of houses and lots sold 17 (16,454,934) (31,158,926)
Balance at end of year P
=57,816,134 =66,893,733
P

Condominium units pertain to units in Cypress Towers with movements as follows:

Note 2023 2022

Balance at beginning of year P
=20,030,807 =18,979,294
P
Cost of condominium units and parking slots
sold 17 (1,495,181) (4,506,887)
Transfer to investment properties 9 (847,783) –
Additions for renovation 121,057 –
Reclassification from investment properties 9 – 4,742,400
Addition from cancellations – 816,000
Balance at end of year P
=17,808,900 =20,030,807
P

Inventories charged to direct costs are as follows (see Note 17):

2023 2022 2021
House and lots P
=16,454,934 =31,158,926
P P
=32,036,126
Medical supplies 5,896,490 6,189,931 5,473,978
Condominium units and parking slots 1,495,181 4,506,887 3,400,000
P
=23,846,605 =41,855,744
P =40,910,104
P

8. Other Current Assets

This account consists of:

2023 2022
CWTs P
=33,150,258 =34,515,932
P
Prepayments 5,068,839 1,630,382
Construction bond 1,131,900 1,131,900
Refundable deposits 980,731 937,381
Input VAT 473,308 1,920,937
Advances to officers and employees 279,846 514,294
Current portion of deferred input VAT 49,157 196,050
P
=41,134,039 =40,846,876
P

Prepayments mainly pertain to rent, tax and insurance.

Construction bond pertains to payments made by the Group for building renovation.

Advances to officers and employees are advances for various business-related expenses and are
subject to liquidation within 30 days.
 - 30 -

9. Investment Properties

The composition of and movements in this account are as follows:

2023
Condominium Leasable Space
Units and for Ambulatory
Land Parking Slots Clinic Total
Cost
Balance at beginning of year P
=1,098,153,690 P
=2,117,973 P
=41,889,186 P
=1,142,160,849
Additions 3,194,600 – – 3,194,600
Reclassification 7 – 847,783 – 847,783
Balance at end of year 1,101,348,290 2,965,756 41,889,186 1,146,203,232
Accumulated Depreciation
Balance at beginning of year – 1,291,135 15,249,991 16,541,126
Depreciation – 112,964 1,396,307 1,509,271
Balance at end of year – 1,404,099 16,646,298 18,050,397
Allowance for Losses
Balance at beginning and end of year 55,513,073 – – 55,513,073
Carrying Amount P
=1,045,835,217 P
=1,561,657 P
=25,242,888 P
=1,072,639,762

2022
Condominium
Units and Leasable Space for
Land Parking Slots Ambulatory Clinic Total
Cost
Balance at beginning of year P
=1,101,199,454 P
=7,907,867 P
=41,889,186 P
=1,150,996,507
Additions 1,985,256 – – 1,985,256
Reclassification 7 – (5,789,894) – (5,789,894)
Disposal (5,031,020) – – (5,031,020)
Balance at end of year 1,098,153,690 2,117,973 41,889,186 1,142,160,849
Accumulated Depreciation
Balance at beginning of year – 1,691,067 13,853,684 15,544,751
Reclassification – (1,047,494) – (1,047,494)
Depreciation – 647,562 1,396,307 2,043,869
Balance at end of year – 1,291,135 15,249,991 16,541,126
Allowance for Probable Losses
Balance at beginning and end of year 55,513,073 – – 55,513,073
Carrying Amount P
=1,042,640,617 P
=826,838 P
=26,639,195 P
=1,070,106,650

The Group’s investment properties pertain to several parcels of land which are held for capital
appreciation and are located in Taguig, Batangas and Bulacan. Investment properties also include a
number of condominium units, parking slot and a leasable space for ambulatory clinic in Cypress
Towers which earn rental income.

In 2023, a real estate inventory amounted to P

=847,783 was reclassified to investment property.
(see Note 7).

In 2022, certain investment properties with aggregate carrying amount of P

=4.7 million were
reclassified to real estate inventories (see Note 7).

In 2022, the Parent Company sold a property in Batangas for P

=31.4 million resulting in a gain on sale
amounting to P=26.4 million (see Note 20).
 - 31 -

Fair Values
The Group’s investment properties have fair values aggregating P=5,224.9 million as at December 31,
2023 and 2022. The latest independent appraiser’s report was dated in October 2022. The Group has
assessed that the fair value of the investment properties as at December 31, 2023 did not materially
differ from the amounts reported as at December 31, 2022.

The fair values of the investment properties are categorized into Level 2 fair value hierarchy for land
and condominium units and Level 3 fair value hierarchy for leasable space for ambulatory clinic.

Description of valuation techniques used and key inputs to valuation on investment properties are
as follows:

Market Data Approach. Market data approach is used to estimate valuation of land and
condominium units. It involves the comparison of the land and condominium units to those that are
more or less located within the vicinity of the appraised properties and are subject of recent sales
and offerings. Adjustments were made to the valuation of land to arrive at the market value by
considering the location, size, shape, utility, desirability and time element.

The key inputs to fair valuation are as follows:

• Price per sqm – estimated value prevailing in the real estate market depending on the location,
area, shape and time element.

• Value adjustments – adjustments are made to bring the comparative values in approximation to
the investment properties taking into account the location, size, time element, and terrain
among others.

Sensitivity Analysis. Significant increase (decrease) in price per square meter would result in a
significantly higher (lower) fair value measurement. Significant increase (decrease) in value
adjustments would result in a lower (higher) fair value measurement.

Depreciated Replacement Cost Method. Depreciated replacement cost method is used to estimate
the leasable space for ambulatory clinic by calculating the current replacement cost of the assets
less deductions for physical deterioration and all relevant forms of obsolescence.

Sensitivity Analysis. Generally, significant increases (decreases) in useful life of assets would result
in a significantly higher (lower) fair value measurement. Significant increases (decreases) in factors
that contributed in the physical deterioration and all relevant forms of obsolescence in isolation
would result in a significantly lower (higher) fair value measurement.

Allowance for Probable Losses

The allowance for probable losses of P=55.5 million as at December 31, 2023 and 2022 represents
provision to cover losses on potential claims on certain parcels of land.

Amounts Recognized in Profit or Loss

Rental income amounted to P =16.6 million, P=14.5 million and P=13.6 million in 2023, 2022 and 2021,
respectively (see Note 16). The related direct costs incurred pertain to depreciation expense and real
property taxes aggregating P
=3.1 million in 2023, and P
=3.7 million in 2022 and 2021, respectively.
 - 32 -

Depreciation and amortization are recognized from the following:

Note 2023 2022 2021

Property and equipment 10 P
=13,310,768 P
=10,161,778 =10,092,924
P
Investment properties 1,509,271 2,043,869 1,836,873
P
=14,820,039 =12,205,647
P =11,929,797
P

Depreciation and amortization are charged to:

Note 2023 2022 2021

Direct costs 17 P
=4,273,960 P
=4,560,708 =4,255,643
P
Selling and administrative
expenses 18 10,546,079 7,644,939 7,674,154
P
=14,820,039 =12,205,647
P =11,929,797
P
 - 33 -

10. Property and Equipment

The composition of and movements in this account are as follows:

2023
Building and Office Furniture,
Building Medical Transportation Fixtures and
Note Land Improvements Equipment Equipment Equipment CIP Total
Cost
Balance at beginning of year P
=120,132,721 P
=190,189,497 P
=65,360,900 P
=44,659,478 P
=37,074,036 P
=27,101,692 P
=484,518,324
Additions – 414,717 2,804,401 10,218,850 626,274 517,009 14,581,251
Retirement, disposal and reclassification – 27,538,169 (57,998) (21,152,885) 176,611 (27,618,701) (21,114,804)
Balance at end of year 120,132,721 218,142,383 68,107,303 33,725,443 37,876,921 – 477,984,771
Accumulated Depreciation and
Amortization
Balance at beginning of year – 80,795,421 61,424,053 35,948,964 36,227,952 – 214,396,390
Depreciation and amortization 9 – 8,291,812 1,333,100 3,068,834 617,022 – 13,310,768
Retirement, disposal and reclassification – 10,150 (4,351) (20,954,907) (165,696) – (21,114,804)
Balance at end of year – 89,097,383 62,752,802 18,062,891 36,679,278 – 206,592,354
Carrying Amount P
=120,132,721 P
=129,045,000 P
=5,354,501 P
=15,662,552 P
=1,197,643 P
=– P
=271,392,417

2022
Building and Office Furniture,
Building Medical Transportation Fixtures and
Note Land Improvements Equipment Equipment Equipment CIP Total
Cost
Balance at beginning of year P
=120,132,721 P
=189,133,067 P
=63,229,693 P
=37,792,514 P
=36,350,432 P
=22,757,672 P
=469,396,099
Additions – 1,056,430 2,131,207 6,866,964 723,604 4,344,020 15,122,225
Balance at end of year 120,132,721 190,189,497 65,360,900 44,659,478 37,074,036 27,101,692 484,518,324

Accumulated Depreciation and

Amortization
Balance at beginning of year – 75,386,798 60,208,182 32,995,737 35,643,895 – 204,234,612
Depreciation and amortization 9 – 5,408,623 1,215,871 2,953,227 584,057 – 10,161,778
Balance at end of year – 80,795,421 61,424,053 35,948,964 36,227,952 – 214,396,390
Carrying Amount P
=120,132,721 P
=109,394,076 P
=3,936,847 P
=8,710,514 P
=846,084 P
=27,101,692 P
=270,121,934
 - 34 -

Cost of fully depreciated and amortized assets still in use amounted to P

=113.4 million and
=123.0 million as at December 31, 2023 and 2022, respectively.
P

In 2023, The Group retired and disposed fully depreciated and amortized property and equipment
with cost of P
=21.1 million.

CIP
The Group’s CIP pertains to costs incurred for the construction of additional floor of the building
which was completed in 2023.

The retention payable under the “Accounts payable” account related to CIP amounted to
=2.2 million will be paid on subsequent period.
P

11. Goodwill

Goodwill resulted from the acquisition of 97% ownership of HSAPI by the Parent Company in 2014.
As a result of the acquisition, the Parent Company acquired control over FMCMI, a wholly-owned
subsidiary of HSAPI. The goodwill arising from the acquisition amounted to P
=21.7 million.

Based on the Group’s annual impairment test using a discounted cash flow model covering a
five-year period, the Group has assessed that goodwill is not impaired as at December 31, 2023, and
2022. The principal assumptions used in determining the recoverable amount (value in use) are
discount rate of 5% and growth rate of 12% in 2023 and 2022.

Management determined the five-year projected cash flows based on past performance, existing
contracts and expectations on market development such as average price, revenue growth range
and expected costs to generate such revenue. Growth rates and operating margins used to estimate
future performance are equally based on past performance and experience of growth rates and
operating margins achievable in the relevant industry. The discount rate used imputes the risk of the
cash-generating unit compared to the respective risk of the overall market and equity risk premium.

12. Other Noncurrent Assets

This account consists of:

2023 2022
Investment in unquoted shares P
=15,344,659 =15,344,659
P
Refundable deposits 940,165 940,165
Noncurrent portion of deferred input VAT 94,218 46,995
Others 1,509,434 1,509,434
P
=17,888,476 =17,841,253
P

Investment in Unquoted Shares

This account consists of the Group’s investment in the unquoted shares of Asian Alliance Holdings &
Development Corp, which are classified as financial assets at FVOCI. The fair value amounting to
=15.3 million as at December 31, 2023, and 2022, has been determined using the net asset method
P
as valuation technique. The Group’s investment represents only a minority interest in the investee
company.
 - 35 -

There are no fair value changes in 2023 and 2022.

Dividend income from investment in unquoted shares is disclosed in Note 5.

Management does not plan to sell or dispose of the shares within one year from the reporting date.

Sensitivity Analysis. Significant increase (decrease) in the net asset would result in a significantly
higher (lower) fair value measurement.

13. Accounts and Other Payables

This account consists of:

Note 2023 2022

Accounts payable P
=99,408,415 =P95,096,134
Contract liabilities 13,570,934 17,047,490
Accrued expenses 12,153,116 14,830,223
Statutory payable 8,323,841 6,363,427
Payable to directors and officers 21 6,888,504 8,936,037
Deposits for document processing 5,927,623 4,842,960
Unearned rental income 23 3,219,404 1,520,056
Others 7,547,308 7,544,981
P
=157,039,145 =156,181,308
P

Accounts payable are normally noninterest-bearing and settled on 30- to 60-day credit terms.

Contract liabilities represent advances from customers and nonrefundable reservation fees received
from prospective buyers. The Group requires buyers to pay a minimum percentage of the total
selling price before they enter into a sale transaction. Collections from buyers which have not
reached the minimum required percentage are also treated as contract liabilities.

The amount of revenue recognized in 2023 and 2022 from contract liabilities as at December 31,
2023 and 2022 amounted to P
=10.1 million and P
=30.2 million, respectively.

Accrued expenses consist mainly of utilities, communication, outsourced services, and professional
fees which are normally settled in the following month.

Statutory payable includes amounts payable to government agencies such as BIR, Social Security
System, Home Development Mutual Fund and Philippine Health Insurance Corporation which are
normally settled in the following month.

Deposits for document processing represent collections for processing deed of sale and other
documents necessary in transferring titles to real estate buyers.
 - 36 -

14. Net Retirement Benefits Liability

The Group values its defined benefit obligation using the projected unit credit method. This plan
provides for a minimum benefit of one-half month of final salary per year of credited service.
The benefit shall be payable to employees with at least five years of continuous service and attained
age of:

▪ 60 years;

▪ 50 years with completion of at least 10 years of service; or

▪ More than 60, on a case-to-case and year-to-year extension basis.

The last actuarial valuation report obtained was for as at December 31, 2023.

Retirement benefit costs are presented as part of “Salaries, wages and other benefits” account
under “Selling and administrative expenses” in the consolidated statements of comprehensive
income (see Note 18).

Details of retirement benefit costs are as follows:

2023 2022 2021

Current service cost P
=2,085,415 =2,336,164
P =4,683,981
P
Interest expense 1,991,619 1,445,417 1,091,585
Return on plan assets (276,728) (179,983) (140,315)
Past service cost due to plan amendment – 6,185,216 –
P
=3,800,306 =9,786,814
P =5,635,251
P

Net retirement benefits liability presented in the consolidated statements of financial position is as
follows:

2023 2022
Retirement benefits liability P
=30,778,652 =27,799,094
P
Fair value of plan assets (3,799,153) (3,844,998)
P
=26,979,499 =23,954,096
P

Movements in the present value of retirement benefits liability are as follows:

2023 2022
Balance at beginning of year P
=27,799,094 =24,436,548
P
Current service cost 2,085,415 2,336,164
Interest expense 1,991,619 1,445,417
Remeasurement gain (754,929) (2,891,751)
Benefits paid out of operating fund (342,547) (3,712,500)
Past service cost due to plan amendment – 6,185,216
Balance at end of year P
=30,778,652 =27,799,094
P
 - 37 -

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

2023 2022
Balance at beginning of year P
=3,844,998 =3,547,992
P
Return on plan assets 276,728 179,983
Remeasurement gain (loss) (322,573) 117,023
Balance at end of year P
=3,799,153 =3,844,998
P

The Group does not have any plans for contributions in the next reporting year.

The analysis of the fair value of plan assets as at December 31, 2023 and 2022 is as follows:

2023 2022
Deposit in banks P
=2,484,185 =2,197,898
P
Equity securities 1,305,772 1,648,948
Other assets 17,745 4,375
Other accountabilities (8,549) (6,223)
P
=3,799,153 =3,844,998
P

The principal assumptions used for the actuarial valuations were as follows:

2023 2022
Discount rate 6.09% 7.21%
Expected rate of salary increases 5.00% 5.00%

Maturity analysis of the undiscounted benefit payments:

2023 2022
Less than five years P
=29,906,992 =23,718,864
P
Five years but less than 10 years 3,799,288 6,909,950
More than 10 years 166,649,059 163,402,828

The average duration of the net retirement benefits liability is 20 years as at December 31, 2023 and
2022, respectively.

The plan exposes the Group to the following risks:

• Salary risk – any increase in the retirement plan participants’ salary will increase the retirement
plan’s liability

• Longevity risk – any increase in the plan participants’ life expectancy will increase the retirement
plan’s liability

• Interest rate risk – a decrease in bond interest rate will increase the present value of retirement
liability. However, this is partially counterbalanced by an increase in the return on the plan
assets.
 - 38 -

Sensitivity Analysis
The sensitivity analysis on net retirement benefits liability based on reasonably possible changes of
the assumptions is as follows:

Change in
assumption 2023 2022
Discount rate 0.5% (P
=502,134) (P
=390,822)
-0.5% 558,151 433,151
Expected salary growth rate 1.0% 1,150,549 902,626
-1.0% (950,250) (748,452)

Remeasurement Gain
The cumulative remeasurement gain on net retirement benefits recognized in equity as at
December 31 are as follows:

Accumulated
Remeasurement
Gain (Loss) Deferred Tax Net of Tax
Balance as at December 31, 2020 =6,020,777
P =1,806,233
P =P4,214,544
Remeasurement gain 8,495,371 1,861,086 6,634,285
Effect of change in tax rate – (339,592) 339,592
Balance as at December 31, 2021 14,516,148 3,327,727 11,188,421
Remeasurement gain 2,432,005 608,001 1,824,004
Balance as at December 31, 2022 16,948,153 3,935,728 13,012,425
Remeasurement gain 432,356 108,089 324,267
Balance as at December 31, 2023 =17,380,509
P =4,043,817
P =13,336,692
P

Remeasurement gain, net of tax, on net retirement benefits recognized in the consolidated
statements of comprehensive income is as follows:

2023 2022 2021

Equity holders of the Parent Company P
=267,910 =1,772,648
P =6,973,877
P
Non-controlling interests 56,357 51,356 274,418
P
=324,267 1,824,004 7,248,295

Deferred tax asset (liability) on net retirement benefits recognized in the consolidated statements of
comprehensive income is as follows:

2023 2022 2021

Equity holders of the Parent Company (P=93,999) (P
=595,162) (P
=1,443,782)
Non-controlling interests (14,090) (12,839) (77,712)
(P
=108,089) (P
=608,001) (P
=1,521,494)
 - 39 -

15. Equity

Capital Stock
Details of the Parent Company’s capital stock with P=0.10 par value as at December 31, 2023 and
2022 are as follows:

Shares Amount

Authorized 24,000,000,000 =2,400,000,000

P

Issued and Outstanding

Balance at beginning and end
of year 19,775,232,460 =1,977,523,246
P

Treasury stock - at cost (4,815,232,510) (481,523,251)

14,959,999,950 =1,495,999,995
P

APIC amounted to P
=118.6 million as at December 31, 2023 and 2022.

The Parent Company has 363 and 365 shareholders as at December 31, 2023 and 2022, respectively.

On February 28, 2023, the Parent Company’s BOD approved the declaration of stock dividends
amounting to P
=150.0 million, subject to compliance with regulatory requirements.

Non-controlling Interests
The Group’s non-controlling interests represent 3%, 3%, 52% and 25% ownership of non-controlling
interests shareholders of HSAPI, FMCMI, CCPC and PLHI, respectively. Non-controlling interests
amounted to P=169.5 million and P
=155.9 million as at December 31, 2023 and 2022, respectively.

The dividends declared allocated to non-controlling interests amounted to P =31.2 million and
=13.5 million in 2022 and 2021, respectively. Payments of dividends to non-controlling interests
P
amounted to P=31.2 million and P
=13.5 million in 2022 and 2021 respectively.

The summarized financial information of subsidiary with significant non-controlling interest as at

and for the years ended December 31, 2023, 2022 and 2021 follows:

2023 2022 2021

Current assets P
=224,037,343 =P194,683,336 =P219,687,333
Noncurrent assets 46,041,859 43,913,787 44,401,390
Current liabilities 69,789,723 64,391,097 64,712,288
Noncurrent liabilities 9,884,503 9,370,231 8,390,325
Revenue 48,282,636 70,418,792 77,992,434
Net income 25,476,701 33,807,083 36,648,787
Total comprehensive income 25,569,181 33,849,685 36,858,963

Capital Management
The primary objective of the Group’s capital management is to ensure that it maintains a strong
credit standing and stable capital ratios in order to support its business and maximize shareholder
value. The Group maintains its current capital structure and will make adjustments, if necessary, in
order to generate a reasonable level of returns to stockholders over the long term. No changes
were made in the objectives, policies or processes during the year.
 - 40 -

The Group considers the equity presented in the consolidated statements of financial position as its
core capital.

The Group monitors capital using debt to equity ratio, which is total debt divided by total equity.
The debt-to-equity ratio as at December 31, 2023 and 2022, are as follows:

2023 2022
Debt P
=204,305,216 P=201,098,051
Equity 2,346,917,470 2,293,566,815
Debt-to-Equity Ratio 0.09:1 0.09:1

Debt is composed of all liabilities while equity includes capital stock, APIC, retained earnings, other
comprehensive loss and non-controlling interests, less treasury stock.

Pursuant to the PSE's rules on minimum public ownership, at least 10% of the issued and
outstanding shares of a listed company must be owned and held by the public. The public ownership
is about 18.4% and 19.2% as at December 31, 2023 and 2022, respectively.

The Group reviews its capital structure on an annual basis. As part of this review, the Group
considers the cost of capital and the risks associated with it.

16. Revenue

This account consists of:

2023
Real estate Health care Investing
Note activities activities activities Total
Recognized at a point in time:
Real estate sales:
Sale of houses and lots P
=56,786,475 P
=– P
=– P
=56,786,475
Sale of condominium
units and parking
slots 6,394,643 – – 6,394,643
Sale of services – 68,697,725 – 68,697,725
Recognized over time -
Interest income 4 16,170,301 – – 16,170,301
Recognized from other sources:
Dividend income 5 – – 5,757,732 5,757,732
Rental income 23 16,622,127 – – 16,622,127
P
=95,973,546 P=68,697,725 P
=5,757,732 P=170,429,003
 - 41 -

2022
Real estate Health care Investing
Note activities activities activities Total
Recognized at a point in time:
Real estate sales:
Sale of houses and lots =95,706,264
P =–
P =– P
P =95,706,264
Sale of condominium
units and parking
slots 16,965,000 – – 16,965,000
Sale of services – 65,470,038 – 65,470,038
Recognized over time -
Interest income 4 19,571,409 – – 19,571,409
Recognized from other sources:
Dividend income 5 – – 10,611,771 10,611,771
Rental income 23 14,455,349 – – 14,455,349
=146,698,022 P
P =65,470,038 =P10,611,771 =P222,779,831

2021
Real estate Health care Investing
Note activities activities activities Total
Recognized at a point in time:
Real estate sales:
Sale of houses and lots =97,883,285
P =–
P =–
P =97,883,285
P
Sale of condominium
units and parking
slots 12,240,365 – – 12,240,365
Sale of services 51,259,195 – 51,259,195
Recognized over time -
Interest income 4 20,118,526 – – 20,118,526
Recognized from other sources:
Dividend income 5 – – 14,420,616 14,420,616
Rental income 23 13,578,759 – – 13,578,759
=143,820,935
P =51,259,195
P =14,420,616 P
P =209,500,746

17. Direct Costs

This account consists of:

2023 2022 2021

Cost of real estate sold P
=17,950,115 =35,665,813
P P
=35,436,126
Cost of services 35,134,145 35,192,289 30,973,213
P
=53,084,260 =70,858,102
P =66,409,339
P
 - 42 -

Cost of real estate sold consists of:

Note 2023 2022 2021

Cost of:
Houses and lots sold 7 P
=16,454,934 =31,158,926
P P
=32,036,126
Condominium units and parking
slots sold 7 1,495,181 4,506,887 3,400,000
P
=17,950,115 =35,665,813
P =35,436,126
P

Cost of services consists of:

Note 2023 2022 2021

Contracted services P
=13,405,152 =12,852,549
P P
=11,064,586
Salaries, wages and other benefits 19 6,869,579 7,632,264 7,726,338
Supplies used 7 5,896,490 6,189,931 5,473,978
Depreciation and amortization 9 4,273,960 4,560,708 4,255,643
Others 4,688,964 3,956,837 2,452,668
P
=35,134,145 =35,192,289
P =30,973,213
P

Others mainly consist of utilities, on-site medical cost and real property tax.

18. Selling and Administrative Expenses

This account consists of:

Note 2023 2022 2021

Salaries, wages and other benefits 19 P
=29,149,615 =35,104,079
P P
=28,658,540
Depreciation and amortization 9 10,546,079 7,644,939 7,674,154
Outside services 8,840,402 8,807,394 6,870,928
Taxes and licenses 7,139,462 5,904,211 6,732,418
Directors’ and officers’ profit-sharing
remuneration 21 6,888,504 8,938,479 4,823,256
Meetings and seminars 5,773,764 4,447,399 4,037,446
Commissions 23 3,623,952 6,807,281 6,587,152
Professional fees 3,467,737 3,940,000 2,942,423
Supplies 2,733,908 2,951,116 2,664,280
Repairs and maintenance 2,615,644 2,009,470 2,183,367
Utilities 2,423,373 2,182,267 1,983,665
Insurance 2,113,950 1,492,286 1,737,746
Transportation and travel 1,748,036 3,119,709 1,944,138
Director’s fees 21 1,644,444 1,816,889 1,661,333
Postage and communication 655,630 650,097 699,985
Committee meetings 515,000 500,000 625,000
Advertising 205,208 279,442 156,587
Others 8,594,900 7,840,272 6,330,510
P
=98,679,608 =104,435,330
P =88,312,928
P

Other expenses pertain mainly to unrecoverable input VAT.

 - 43 -

19. Personnel Costs

Personnel costs consist of:

Note 2023 2022 2021

Salaries and wages P
=26,308,531 P
=27,531,203 =25,382,219
P
Retirement benefit costs 14 3,800,306 9,786,814 5,635,251
Other employee benefits 5,910,357 5,418,326 5,367,408
P
=36,019,194 =42,736,343
P =36,384,878
P

Personnel costs are charged to:

Note 2023 2022 2021

Direct costs 17 P=6,869,579 P
=7,632,264 =P7,726,338
Selling and administrative expenses 18 29,149,615 35,104,079 28,658,540
P
=36,019,194 =42,736,343
P =36,384,878
P

Other employee benefits include the profit share of the officers of the Group.

20. Other Income (Charges)

This account consists of:

Note 2023 2022 2021

Interest income from: 4
Cash in banks and short term
placements P
=33,708,244 P
=11,013,535 =3,065,228
P
Loans receivables 41,167 999,999 118,056
Gain (loss) on:
Sale of investments in quoted
shares 5 11,921,494 (9,346,831) 9,328,343
Reversal of impairment losses on
receivables 6 523,257 112,289 –
Cancelled contracts and forfeited
customer deposits (220,531) (105,448) 1,019,822
Sale of investment properties 9 – 26,401,480 –
Unrealized gain (loss) on the changes
in:
Fair value of investments in
quoted shares 5 (6,069,675) (2,871,773) 39,914,761
Foreign exchange rates 970,289 5,172,968 585,074
Others 3,458,337 4,245,890 2,348,437
P
=44,332,582 =35,622,109
P =56,379,721
P

Other income pertains to surcharges, association dues and maintenance fees.

 - 44 -

21. Related Party Transactions

The following table summarizes the Group’s significant transactions and balances with related parties as at
December 31, 2023 and 2022:

Amounts of Transactions Outstanding Balances

Related Parties Note Nature of Transactions 2023 2022 2023 2022
Accounts and other payables
Directors and officers 18 Directors and officers
profit-sharing
remuneration P
=6,888,504 P
=8,938,479
18 Director’s fees 1,644,444 1,816,889
Payments (10,580,481) (9,572,889) P
=6,888,504 P
=8,936,037

Terms and Conditions of Transactions with Related Parties

The outstanding balances are unsecured, noninterest-bearing, payable upon demand and to be
settled in cash.

The directors and officers are entitled to receive profit sharing based on the performance by the
Group.

Compensation of Key Management Personnel

Compensation of key management personnel, consisting of short-term and long-term salaries and
government mandated benefits, amounted to P
=12.7 million, P
=13.2 million and P
=12.0 million in 2023,
2022 and 2021, respectively.

22. Earnings Per Share

The calculation of the basic EPS is based on the following data:

2023 2022 2021

Net income attributable to Parent Company P
=39,529,284 P
=50,664,302 P
=75,709,746
Weighted average number of common shares
issued and outstanding 14,959,999,950 14,959,999,950 14,959,999,950
P
=0.00264 =0.00339
P =0.00506
P

The weighted average number of shares refers to shares in circulation during the period that is after
the effect of treasury stock.

As at December 31, 2023, 2022 and 2021, the Parent Company has no dilutive or potential dilutive
share.

23. Significant Agreements

Lease Agreements
The Group leased out certain commercial spaces of its building to several parties under various
cancellable and noncancellable operating lease agreements for periods between one to ten years.
All leases include an annual escalation clause based on rental rates.

Security deposits amounting to P =4.4 million and P =3.8 million as at December 31, 2023 and 2022,
respectively, are noninterest-bearing and will be refunded at the end of the lease term.
 - 45 -

Unearned rental income amounted to P

=3.2 million and P
=1.5 million as at December 31, 2023 and
2022, respectively (see Note 13).

Rental income recognized amounted to P =16.6 million, P

=14.5 million and P
=13.6 million in 2023, 2022
and 2021, respectively (see Note 16). Billed rental amounted to P =1.9 million and P=1.7 million as at
December 31, 2023 and 2022, respectively (see Note 6).

Future minimum lease receivables to be collected based on existing contracts are as follows:

2023 2022
Not later than one year P
=13,546,707 =9,590,207
P
Later than one year but not later than five years 28,316,937 22,865,953
Beyond five years 10,436,914 22,440,571
P
=52,300,558 =54,896,731
P

Joint Operation Arrangement with Santa Lucia Realty and Development Inc. (SLRDI)
On October 23, 2003, CCPC entered into a Memorandum of Agreement (the “Agreement”) with
SLRDI (the “Project Developer”) wherein CCPC contributed land and the improvements thereon,
while the Developer completed the development of the Palma Real Residential Estates project in
Biñan, Laguna (the “Project”) and handles all the expenses necessary in preparing the lots into
saleable units.

The Agreement has the following significant provisions, among others:

a. The Developer shall be solely liable for any and all expenses to be incurred in the construction
and development to be introduced by SLRDI on the Project, government agency,
sub-contractor, supplier or third party in connection with the development of the Project;

b. CCPC shall be paid 60% of the sales proceeds while SLRDI shall be paid 40% of the sales
proceeds. CCPC and SLRDI shall shoulder the corresponding taxes of their respective share
of the proceeds;

c. The proceeds from the sale of lots shall be deposited in the joint bank account of the CCPC
and SLRDI; and

d. CCPC and SLRDI shall nominate a marketing manager that will handle the sale of lots in the
Project. The marketing manager shall present a marketing plan to CCPC and SLRDI.

The development of the residential lots was completed, and the Project started selling lots in 2004.

The revenue and the corresponding cost of real estate sold from the joint operation arrangement
with SLRDI, which are included as part of “Sale of houses and lots” and “Cost of houses and lots
sold”, respectively, are as follows:

2023 2022 2021

Sale of houses and lots P
=39,310,947 =P60,645,294 =P67,683,685
Cost of houses and lots sold 8,561,847 15,558,454 16,933,451

Installment contracts receivable related to the Agreement amounted to P =51.3 million and
=49.9 million as at December 31, 2023 and 2022, respectively. Due to SLRDI relating to the share of
P
the Group amounting to P =31.3 million and P =23.9 million as at December 31, 2023 and 2022,
respectively, is included as part of “Accounts and other payables”. Titles to the sold houses and lots
are transferred to the buyer only upon full payment of the contract price.
 - 46 -

The “Due from a Project Developer” under the “Receivables” account in the consolidated statements
of financial position pertains to the unremitted collections amounting to P =30.5 million and
=32.2 million as at December 31, 2023 and 2022, respectively (see Note 6). Collections are
P
deposited to the joint bank account of the Developer and CCPC.

Joint Operation Arrangement with DMCI

In 2005, the Parent Company and Fort Bonifacio Medical Center, Inc. (FBMCI) entered into a
Memorandum of Agreement (the “Agreement”) with DMCI for the development and construction of
three condominium buildings called the Cypress Towers.

The Agreement has the following significant provisions, among others:

(a) The Group and FBMCI shall contribute the land;

(b) DMCI shall be responsible for the development, construction and sale of condominium units; and

(c) The Group and FBMCI’s share in the project is equivalent to 15.6% of the total condominium
units and parking slots.

The development and construction of the condominium buildings were completed and selling started
in 2008. The amounts of sales of condominium units and parking slots and cost of condominium units
and parking slots sold are disclosed in Notes 16 and 17, respectively.

Installment contracts receivable related to the Agreement amounted to =10.4 million and
P
=12.3 million as at December 31, 2023 and 2022, respectively.
P

As at December 31, 2023 and 2022, there were no outstanding contingent liabilities and
commitments with respect to the joint operations arrangements.

Marketing Agreement
Marketing of the projects is handled by several brokers and agents at various commission rates
based on the selling price.

The Group incurred commission expense amounting to P

=3.6 million, P
=6.8 million and P
=6.6 million in
2023, 2022 and 2021, respectively (see Note 18).

24. Income Taxes

Components of provision for (benefit from) income tax are as follows:

2023 2022 2021
Current:
RCIT P
=9,554,869 =12,908,812
P =10,844,661
P
MCIT 912,092 751,882 206,173
10,466,961 13,660,694 11,050,834
Deferred (495,632) 978,169 5,455,386
P
=9,971,329 =14,638,863
P =16,506,220
P
 - 47 -

Provision for (benefit from) income tax is presented in the consolidated statements of
comprehensive income as follows:
2023 2022 2021
Profit or loss:
Current P
=10,466,961 P
=13,660,694 =11,050,834
P
Deferred (495,632) 978,169 5,545,386
Other comprehensive income -
Deferred (108,009) (608,001) (1,599,206)
P
=9,863,320 =14,030,862
P =14,997,014
P

Deferred Taxes
The components of the Group’s deferred taxes are as follows:

2023 2022
Deferred tax assets:
Allowance for probable losses on investment properties P
=6,365,152 =P6,365,152
Retirement benefits liability 6,744,875 5,988,524
Allowance for impairment losses on receivables 5,513,909 5,722,682
Payable to directors and officers 1,722,126 2,234,620
Accrued expenses 399,386 701,578
P
=20,745,448 =21,012,556
P

Deferred tax liabilities:

Excess gross profit over collections P
=14,478,559 =14,082,540
P
Unrealized foreign exchange gain 242,572 1,293,242
P
=14,721,131 =15,375,782
P

Details of unrecognized deferred tax assets are as follows:

2023 2022
Allowance for probable loss on investment properties P
=7,513,117 =7,513,117
P
MCIT 835,017 1,387,165
NOLCO 595,221 345,312
Unearned rental income 53,865 63,883
P
=8,997,220 =9,309,477
P

The details of the Group’s NOLCO and MCIT, which can be claimed as deduction from future taxable
income and as tax credit against future income tax due, respectively, are as follows:

NOLCO

Inception Year Amount Incurred Applied Balance Expiry Year

2023 =–
P =1,158,362
P =–
P =1,158,362
P 2026
2022 474,182 – – 474,182 2025
2021 350,674 – – 350,674 2026
2020 637,270 – – 637,270 2025
=1,462,126
P =1,158,362
P =–
P =2,620,488
P
 - 48 -

Under Revenue Regulations No. 25-2020, NOLCO incurred for the taxable years 2021 and 2020 will
be carried over for the next five (5) consecutive taxable years immediately following the year of such
loss and NOLCO incurred for taxable year 2022 and beyond can be carried over for the next three
consecutive years.

MCIT

Expired/
Inception Year Amount Incurred Derecognized Balance Expiry Year
2023 =–
P =176,073
P =–
P =P176,073 2026
2022 210,030 – – 210,030 2025
2021 448,914 – – 448,914 2024
2020 728,221 – (728,221) – 2023
=1,387,165
P =176,073
P (P
=728,221) =835,017
P

Under the “Corporate Recovery and Tax Incentives for Enterprises (the “Act”) which took effect on
July 1, 2020, domestic corporations are subject to 25% or 20% RCIT depending on the amount of
total assets and total amount of taxable income. In addition, MCIT shall be computed at 1% of gross
income for a period of three years until June 30, 2023 and will revert to 2% starting July 1, 2023.

The effect of the reduction in tax rates in 2020 was recognized as part of the 2021 income tax
expense, as required by PAS 12, Income Taxes. Details of adjustments are as follows:

Current Deferred Total

Income tax expense =11,752,279
P =P1,218,067 =12,970,346
P
Effect of change in tax rate (701,445) 4,237,319 3,535,874
Adjusted current income tax expense =11,050,834
P =5,455,386
P =16,506,220
P

The effect of change in tax rate for the unrecognized deferred tax assets amounted to P
=4.7 million.

The reconciliation of provision for income tax computed at the statutory income tax rate and at
effective income tax rates is as follows:

2023 2022 2021

Income tax expense computed at statutory tax
rate P
=15,749,432 =20,777,127
P =27,266,985
P
Tax effects of:
Income subject to a final tax and exempt
from income tax (7,744,084) (5,782,268) (16,247,627)
Nondeductible expenses 1,512,841 3,118,479 679,434
Effects of consolidation 37,176 (7,779) (14,910)
Nontaxable income – (561,611) –
Expired NOLCO – 88,557 13,937,457
Expired MCIT 728,221 1,179,663 1,092,212
Changes in unrecognized deferred tax assets (312,257) (2,913,607) (18,460,774)
Change in tax rate – (1,259,698) 8,253,443
P
=9,971,329 =14,638,863
P =16,506,220
P
 - 49 -

25. Fair Value of Financial Assets and Liabilities

The table below presents the carrying amounts and fair value of the Group’s financial assets and
financial liabilities.

2023 2022
Carrying Carrying
Amount Fair Value Amount Fair Value
Financial Assets
At amortized cost:
Cash and cash equivalents P
=785,507,527 P
=785,507,527 P
=645,994,640 P
=645,994,640
Receivables 156,476,764 156,476,764 156,158,606 156,158,606
Refundable deposits and
construction bond* 2,072,065 2,072,065 2,072,065 2,072,065
At FVPL -
Investment in quoted shares 85,865,768 85,865,768 161,851,145 161,851,145
At FVOCI -
Investment in unquoted
shares 15,344,659 15,344,659 15,344,659 15,344,659
P
=1,045,266,783 P
=1,045,266,783 P
=981,421,115 P
=981,421,115

2023 2022
Carrying Carrying
Amount Fair Value Amount Fair Value
Financial Liabilities
At amortized cost:
Accounts and other payables** P
=125,997,343 P
=125,997,343 P
=126,407,375 P
=126,407,375
Security deposits 4,402,933 4,402,933 3,839,825 3,839,825
P
=130,400,276 P
=130,400,276 =130,247,200
P =130,247,200
P
*Included in “Other current assets” and “Other noncurrent assets” accounts
**Excluding contract liabilities, deposits for document processing, statutory payable and unearned rental income

The Group has determined that the carrying amounts of cash and cash equivalents, receivables,
accounts and other payables (excluding contract liabilities, deposits for document processing,
statutory payable and unearned rental income) approximate their fair values because these are
mostly short term in nature.

The fair value of installment contracts receivable approximates its carrying amount as its interest
rate approximates the market rate for a similar instrument.

The fair value of refundable deposits, construction bond and security deposits approximates its
carrying amount. The management believes that the effect of discounting the future
receipts/payments from these financial instruments using the prevailing market rates is not
significant.

The fair values of investments in quoted shares are based on quoted price in active market (Level 1
hierarchy).

The fair values of investments in unquoted shares are determined using the net asset method
(Level 3).

The fair value hierarchy groups the financial instruments into Levels 1 to 3 based on the degree to
which the fair value is observable. There were no transfers to other levels in 2023 and 2022.
 - 50 -

26. Financial Instruments Risk Management Policies and Objectives

The Group’s financial assets comprise of cash and cash equivalents, receivables, refundable
deposits, construction bond and investments in quoted and unquoted shares. The Group’s financial
liabilities comprise accounts and other payables (excluding contract liabilities, deposits for
document processing, statutory payable and unearned rental income) and security deposits. The
main purpose of these financial instruments is to finance the Group’s operations.

The main risks arising from the Group’s financial instruments are market risk, credit risk and liquidity
risk. The Group’s BOD and management review and approve the policies for managing each of the
risks summarized below.

Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. The Group is exposed to market risk specifically to foreign
currency risk and equity price risk. Financial instruments affected by market risk include cash and
cash equivalents and equity investments.

The sensitivity analyses in the following sections relate to the consolidated statements of financial
position as at December 31, 2023 and 2022.

The sensitivity of the relevant items in the consolidated statements of comprehensive income is the
effect of the assumed changes in respective market risks. This is based on the financial assets and
financial liabilities held at December 31, 2023 and 2022.

Foreign Currency Risk. Foreign currency risk is the risk that the fair value or future cash flows of an
exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the
risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when
revenue or expense is denominated in a foreign currency).

The Group has transactional currency exposures arising from purchase denominated in currencies
other than the functional currency. The Group does not enter into forward contracts to hedge
currency exposures. To mitigate the Group’s exposure to foreign currency risk, foreign currency
cash flows and fluctuations in the foreign exchange rates are monitored.

The carrying amounts of the Group’s foreign currency denominated monetary assets are as follows:

2023 2022
Philippine Peso Foreign Currency Philippine Peso Foreign Currency
Cash in banks P
=138,699,901 US$2,504,965 =70,825,209
P US$1,262,032
Investments in quoted shares 37,608,876 SG$896,730 92,728,378 SG$2,232,536

For purposes of translating the outstanding balance of the Group’s foreign currency-denominated
monetary assets, the exchange rates applied were P
=55.37 per U.S. Dollar (USD) US$1 and P
=41.94 per
Singapore Dollar (SGD) SG$1 as at December 31, 2023 and P=56.12 per US$1 and P =41.58 per SG$1 as
at December 31, 2022.

Foreign Currency Sensitivity Analysis. The sensitivity analysis includes all of the Group’s foreign
currency denominated monetary assets and liabilities. A positive number indicates an increase in
income before tax when the USD and the SGD strengthen by 7% and 12%, respectively, against the
relevant currency. For a 7% and 12% weakening of the USD and the SGD, respectively, against the
Peso, there would be an equal and opposite impact on the income before tax.
 - 51 -

The following table demonstrates the sensitivity to a 7% and 12% change in USD and SGD exchange
rates, respectively, with all other variables held constant:

Effect on Income Before Tax

2023 2022
Cash in banks P
=9,708,993 =2,833,008
P
Investments in quoted shares 4,513,065 927,284
P
=14,222,058 =3,760,292
P

Equity Price Risk. Equity price risk exposure relates to fluctuation in fair values as a result of changes
in market prices of investments in quoted shares arising from factors affecting all shares of stocks
traded in the market. The Group’s market risk policy requires it to manage such risk by setting and
monitoring objectives and constraints on investments.

The following table demonstrates the sensitivity to a reasonably possible change in the stock price
of shares, with all other variables held constant, of the Group’s unrealized gain and loss on
investments in quoted shares:

Listed domestic shares Listed foreign shares

Change in Stock Effect on Income Change in Stock Effect on Income
Price Before Tax Price Before Tax
December 31, 2023 2% P
=206,511 3% P
=796,000
-2% (206,511) -3% (796,000)
December 31, 2022 8% 5,758,955 9% 6,676,443
-8% (5,758,955) -9% (6,676,443)

Credit Risk
Credit risk is the risk when a counterparty fails to fulfill its obligations to the Group. Counterparties
such as banks and customers who pay on or before due date have minimum risk exposure because
default in settling its obligations is remote. The Group deals only with reputable banks and
customers to limit this risk.

The table below shows the gross maximum exposure of the Group to credit risk before taking into
consideration collateral and other credit enhancements:

2023 2022
Cash and cash equivalents P
=785,487,527 =P645,974,640
Receivables 156,476,764 156,158,606
Refundable deposits 1,920,896 1,877,546
Construction bond 1,131,900 1,131,900
P
=945,017,087 =805,142,692
P
 - 52 -

Maximum Exposure to Credit Risk after Credit Enhancements

Maximum exposure to credit risk of financial assets is equivalent to their carrying values except for
installment contracts receivable and loans receivable. The table below shows the maximum
exposures to credit risk of the Group for installment contracts receivable and loans receivable, after
considering the effects of credit enhancements:

Maximum
Fair Value of Exposure to Financial Effect
December 31, 2023 Credit Collateral or Credit Risk of Collateral or
risk exposure relating to Carrying Credit after Credit Credit
balance sheet assets Amount Enhancement Enhancements Enhancement
Installment contracts
receivable P
=99,505,963 P
=111,019,575 P
=– P
=111,019,575
Loans receivable 10,295,375 7,912,000 2,383,375 7,912,000
P
=109,801,338 P
=118,931,575 P
=2,383,375 P
=118,931,575

Maximum
Fair Value of Exposure to Financial Effect
December 31, 2022 Credit Collateral or Credit Risk of Collateral or
risk exposure relating to Carrying Credit after Credit Credit
balance sheet assets Amount Enhancement Enhancements Enhancement
Installment contracts
receivable =104,694,803
P =120,241,914
P =–
P =120,241,914
P

Credit Enhancements. For installment contracts receivable, title to condominium units, houses and
lots is not transferred to the buyer until full payment has been made.

The loans receivable are secured by a pledge of a property. And upon default and breach of contract
by the borrower the Company has the rights to encumber the said property to satisfy the loans (see
Note 6).

Risk Management. Credit risk is managed on a group basis. The Group deals only with reputable
banks and customers to limit this risk. If customers are independently rated, these ratings are used.
Otherwise, if there is no independent rating, the Group assesses the credit quality of the customer,
taking into account its financial position, past experience and other factors. Individual risk limits are
set based on internal or external ratings in accordance with limits set by the management.
The compliance with credit limits by customers is regularly monitored by management.

There are no significant concentrations of credit risk, whether through exposure to individual
customers, specific industry sectors and/or regions.
 - 53 -

As at December 31, 2023 and 2022, the amount of cash and cash equivalents, refundable deposits,
and construction bond are neither past due nor impaired and were classified as “High Grade”;
installment contracts receivable and other receivables (excluding impairment) were classified as
“Standard Grade”; and impaired installment contracts receivables and other receivables were
classified as “Substandard Grade”. The credit quality of such financial assets at amortized cost is
managed by the Group using the internal credit quality ratings as follows:

▪ High Grade. Pertains to counterparty who is not expected by the Group to default in
settling its obligations, thus credit risk exposure is minimal. This normally includes large
prime financial institutions and companies. Credit quality was determined based on the
credit standing of the counterparty.

▪ Standard Grade. Pertains to counterparty with performance rating ranging from satisfactory
to acceptable and repayment capacity has to be monitored. These accounts are typically not
impaired as the counterparties generally respond to credit actions and update their
payments accordingly.

▪ Substandard Grade. Substandard grade financial assets are those which are considered
worthless. These are accounts which have the probability of impairment based on historical
trends.

Impairment of Receivables (excluding Installment Contracts Receivable). An impairment analysis is

performed at each reporting date using a provision matrix to measure ECL. The provision rates are
based on days past due for groupings of customer segments with similar loss patterns.
The calculation reflects the probability-weighted outcome, the time value of money and reasonable
and supportable information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions.

Impairment of Installment Contracts Receivable and Other Financial Assets at Amortized Cost.
It is the Group’s policy to measure ECL on these instruments on a 12-month basis. However, when
there has been a significant increase in credit risk since origination, the allowance will be based on
the lifetime ECL.

The Group limits its exposure to credit risk by investing its cash and cash equivalents only with banks
that have good credit standing and reputation in the local and international banking industry.
For installment contracts receivable, loan receivable, refundable deposits and construction bond,
credit risk is low since the Group only transacted with reputable companies with respect to these
financial assets or the financial assets have credit enhancements.

The tables below show the credit quality of financial assets as at December 31, 2023 and 2022:

2023
Past Due but Impaired
Neither Past Due nor Impaired Not Impaired Total
Standard Substandard
High Grade Grade Grade
Cash and cash
equivalents P
=785,507,527 P
=– P
=– P
=– P
=– P=785,507,527
Receivables – 156,476,764 – – 22,055,637 178,532,401
Refundable deposits – 1,920,896 – – – 1,920,896
Construction bond – 1,131,900 – – – 1,131,900
P
=785,507,527 P
=159,529,560 P
=– P
=– P=22,055,637 P=967,092,724
 - 54 -

2022
Past Due but Impaired
Neither Past Due nor Impaired Not Impaired Total
Standard Substandard
High Grade Grade Grade
Cash and cash
equivalents P
=645,994,640 P
=– P
=– P
=– P
=– P=645,994,640
Receivables – 156,158,606 – – 22,890,728 179,049,334
Refundable deposits – 1,877,545 – – – 1,877,545
Construction bond – 1,131,901 – – – 1,131,901
P
=645,994,640 P
=159,168,052 P
=– P
=– P=22,890,728 P=828,053,420

Using the ECL allowance, the credit risk exposure on the Group’s impairment of receivables
amounted to P =22.1 million and P
=22.9 million as at December 31, 2023 and 2022, respectively
(see Note 6).

Liquidity Risk
Liquidity risk arises from the possibility that the Group may encounter difficulties in raising funds to
meet commitments from financial instruments. It may result from either the inability to sell assets
quickly at fair values or failure to collect from counterparty.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through
related party advances and aims to manage liquidity as follows:

a. To ensure that adequate funding is available at all times;

b. To meet commitments as they arise without recurring unnecessary costs; and
c. To be able to assess funding when needed at the least possible cost.
The tables below summarize the maturity profile of the Group’s financial liabilities based on
undiscounted cash flows:

2023
Payable on 120 Days
Demand 30 Days 60 Days 90 Days and More Total
Accounts payable and other
liabilities* P
=6,888,504 P
=19,700,424 P
=99,408,415 P
=– P
=– P
=125,997,343
Security deposits – – – – 4,402,933 4,402,933
P
=6,888,504 P
=19,700,424 P
=99,408,415 P
=– P
=4,402,933 P=130,400,276
*Excluding contract liabilities, deposits for document processing, statutory payable and unearned rental income.

2022
Payable on 120 Days
Demand 30 Days 60 Days 90 Days and More Total
Accounts payable and other
liabilities* P
=8,936,037 P
=22,375,204 P
=95,096,134 P
=– P
=– P
=126,407,375
Security deposits – – – – 3,839,825 3,839,825
P
=8,936,037 P
=22,375,204 P
=95,096,134 P
=– P
=3,839,825 P=130,247,200
*Excluding contract liabilities, deposits for document processing, statutory payable and unearned rental income.
 - 55 -

27. Operating Segment Information

Business Segments
For management purposes, the Group is organized into three major business segments, namely real
estate, healthcare services and investment holdings. These are also the bases of the Group in
reporting its primary segment information.

(a) The real estate segment involves acquisition of land, planning and developing residential
communities such as development and sale of condominium units and parking slots, residential
lots and housing units.

(b) Healthcare services involve delivering outpatient health care services through ambulatory care
centers. These include the sale of goods and services.

(c) The investment holding creates project investments and later disposes these investments after
creating value. This also includes acquisition and sale of equity securities. Included in this
segment are the Group’s transactions or investments in associates and trading of financial
assets at fair value through profit or loss.

Segment Assets and Liabilities

Segment assets include all operating assets used by a segment and consist principally of cash and
cash equivalents, receivables, inventories, property and equipment, and investment properties.
Segment liabilities include all operating liabilities and consist principally of accounts payable and
accrued expenses and payable to non-controlling interests.

Financial information about reportable segments follows (in thousands):

2023
Healthcare Investment Eliminating
Real Estate Services Holdings Entries Total
Segment revenue P
=100,192 P
=68,698 P
=1,539 P=– P
=170,429
Inter-segment revenue 11,851 – – (11,851) –
Net revenue P
=112,043 P
=68,698 P
=1,539 (P
=11,851) P
=170,429

Segment results
Income before income tax P
=45,229 P
=15,082 P
=2,687 P
=– P
=62,998
Provision for income tax (6,421) (3,551) – – (9,972)
Net income P
=38,808 P
=11,531 P
=2,687 P
=– P
=53,026

Total assets as at end of year P

=3,074,495 P
=62,717 P
=56,641 (P
=642,630) P
=2,551,223

Total liabilities as at end of year P

=275,028 P
=12,220 P
=58 (P
=83,000) P
=204,306
Additions to -
Property and equipment P
=11,777 P
=2,804 P
=– P
=– P
=14,581

Other information -
Depreciation and amortization P
=13,487 P
=1,333 P
=– P
=– P
=14,820
 - 56 -

2022
Healthcare Investment Eliminating
Real Estate Services Holdings Entries Total
Segment revenue =154,615
P =65,470
P =2,695
P =–
P =222,780
P
Inter-segment revenue 38,573 – – (38,573) –
Net revenue =193,188
P =65,470
P =2,695
P (P
=38,573) =222,780
P
Segment results
Income before income tax =313,954
P =12,786
P (P
=2,721) (P
=240,910) =83,109
P
Provision for income tax (12,449) (2,151) (39) – (14,639)
Net income (loss) =301,505
P =10,635
P (P
=2,760) (P
=240,910) =68,470
P
Total assets as at end of year =3,032,178
P =50,980
P =53,997
P (P
=642,490) =2,494,665
P
Total liabilities as at end of year =271,461
P =12,290
P =100
P (P
=82,753) =201,098
P
Additions to:
Property and equipment =12,991
P =2,131
P =–
P =–
P 15,122

Other information -
Depreciation and amortization =10,661
P =1,545
P =–
P =–
P =12,206
P

2021
Healthcare Investment Eliminating
Real Estate Services Holdings Entries Total
Segment revenue =155,886
P =51,259
P =2,356
P =–
P =209,501
P
Inter-segment revenue 9,697 – 12,500 (22,197) –
Net revenue =165,583
P =51,259
P =14,856
P (P
=22,197) =209,501
P
Segment results
Income before income tax =113,558
P =2,172
P =7,928
P (P
=12,500) =111,158
P
Provision for (benefit from)
income tax (13,524) (2,980) (2) – (16,506)
Net income (loss) =100,034
P (P
=808) =7,926
P (P
=12,500) =94,652
P
Total assets as at end of year =2,414,315
P =44,274
P =427,264
P (P
=430,194) P
=2,455,659
Total liabilities as at end of year =184,547
P =17,191
P =76,697
P (P
=77,203) =201,232
P

Additions to -
Property and equipment =25,400
P =82
P =–
P =–
P =25,482
P
Other information -
Depreciation and amortization =9,034
P =1,584
P =1,312
P =–
P =11,930
P

Major Customer
The Group does not have a single external customer from which sales revenue generated amounted
to 10% or more of the total revenue of the Group.
 BOA/PRC Accreditation No. 4782 BDO Towers Valero
August 16, 2021, valid until April 13, 2024 8741 Paseo de Roxas

REYES TACANDONG & Co.

FIRM PRINCIPLES. WISE SOLUTION S.
SEC Registration No. PP201007009 Makati City 1226 Philippines
Phone
Fax
: +632 8 982 9100
: +632 8 982 9111
Website : www.reyestacandong.com

INDEPENDENT AUDITORS’ REPORT ON

COMPONENTS OF FINANCIAL SOUNDNESS INDICATORS

The Stockholders and the Board of Directors

CROWN EQUITIES, INC. AND SUBSIDIARIES
5th Floor Crown Center
158 Jupiter cor. N. Garcia Sts.
Bel-Air Makati City

We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements
of CROWN EQUITIES, INC. AND SUBSIDIARIES (the “Group”) as at December 31, 2023 and 2022 and for the
years ended December 31, 2023, 2022 and 2021, and have issued our report thereon dated March 26, 2024.
Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The Supplementary Schedule on Financial Soundness Indicators, including their definitions,
formulas, calculation, and their appropriateness or usefulness to the intended users, are the responsibility of
the Group’s management. These financial soundness indicators are not measures of operating performance
defined by Philippine Financial Reporting Standards (PFRSs) and may not be comparable to similarly titled
measures presented by other companies. This schedule is presented for purposes of complying with the
Revised Securities Regulation Code Rule 68 issued by the Securities and Exchange Commission and is not a
required part of the basic consolidated financial statements prepared in accordance with PFRSs.
The components of these financial soundness indicators have been traced to the Group’s consolidated
financial statements as at December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022
and 2021 and no material exceptions were noted.

REYES TACANDONG & CO.

WILSON P. TEO
Partner
CPA Certificate No. 92765
Tax Identification No. 191-520-944-000
BOA Accreditation No. 4782; Valid until April 13, 2024
BIR Accreditation No. 08-005144-014-2023
Valid until January 24, 2026
PTR No. 10072414
Issued January 2, 2024, Makati City

March 26, 2024

Makati City, Metro Manila

THE POWER OF BEING UNDERSTOOD

AUDIT I TAX I CONSULTING ■--
RSM
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
 CROWN EQUITIES, INC. AND SUBSIDIARIES
FINANCIAL SOUNDNESS INDICATORS

Below is a schedule showing financial soundness indicators of the Group.

Ratio Formula 2023 2022 2021

Current ratio
Current assets P
=1,055,539,928 P
=1,008,890,124 P
=975,294,826
Divide by current liabilities 158,201,653 157,928,348 166,809,798
Current Ratio 6.67 6.39 5.85

Acid test ratio

Current assets P
=1,055,539,928 =1,008,890,124
P =975,294,826
P
Less:
Inventories 77,831,881 88,990,602 107,080,805
Other current assets 41,134,039 40,846,876 46,233,320
Quick assets 936,574,008 879,052,646 821,980,701
Divide by current liabilities 158,201,653 157,928,348 166,809,798
Acid Test Ratio 5.92 5.57 4.93

Solvency ratio
Income before tax P
=62,997,717 =83,108,508
P =111,158,200
P
Add depreciation and
amortization 14,820,039 12,205,647 11,929,797
Net income before
depreciation and
amortization 77,817,756 95,314,155 123,087,997
Divide by total liabilities 204,305,216 201,098,051 201,232,080
Solvency Ratio 0.38 0.47 0.61

Debt-to-equity ratio
Total liabilities P
=204,305,216 =P201,098,051 =P201,232,080
Divide by total equity 2,346,917,470 2,293,566,815 2,254,427,012
Debt-to-Equity Ratio 0.09 0.09 0.09

Asset-to-equity ratio
Total assets P
=2,551,222,686 =P2,494,664,866 P
=2,455,659,092
Divide by total equity 2,346,917,470 2,293,566,815 2,254,427,012
Asset-to-Equity Ratio 1.09 1.09 1.09

Interest rate coverage

ratio
Income before tax P
=62,997,717 =83,108,508
P =111,158,200
P
Add interest expense – – –
Pretax income before
interest 62,997,717 83,108,508 111,158,200
Divide by interest expense – – –
Interest Rate Coverage
Ratio n/a n/a n/a
 -2-

Ratio Formula 2023 2022 2021

Return on equity
Net income attributable to
equity holders of the
Parent Company P
=39,529,284 =50,664,302
P P
=75,709,746
Equity:
Beginning of year 2,293,566,815 2,254,427,012 2,198,026,737
End of year 2,346,917,470 2,293,566,815 2,254,427,012
4,640,484,285 4,547,993,827 4,452,453,749
Divide by 2 2 2
Average equity 2,320,242,143 2,273,996,914 2,226,226,875
Return on Equity 1.70% 2.23% 3.40%

Return on assets
Net income P
=53,026,388 P
=68,469,645 P
=94,651,980
Total assets:
Beginning of year 2,494,664,866 2,455,659,092 2,384,809,648
End of year 2,551,222,686 2,494,664,866 2,455,659,092
5,045,887,552 4,950,323,958 4,840,468,740
Divide by 2 2 2
Average assets 2,522,943,776 2,475,161,979 2,420,234,370
Return on Assets 2.10% 2.77% 3.91%

Net profit margin

Net income P
=53,026,388 P
=68,469,645 P
=94,651,980
Revenue 170,429,003 222,779,831 209,500,746
Net Profit Margin 0.31 0.31 0.45
 BOA/PRC Accreditation No. 4782 BDO Towers Valero
August 16, 2021, valid until April 13, 2024 8741 Paseo de Roxas

REYES TACANDONG & Co.

FIRM PRINCIPLES. WISE SOLUTION S.
SEC Registration No. PP201007009 Makati City 1226 Philippines
Phone
Fax
: +632 8 982 9100
: +632 8 982 9111
Website : www.reyestacandong.com

REPORT OF INDEPENDENT AUDITORS’

ON SUPPLEMENTARY SCHEDULES

The Stockholders and the Board of Directors

CROWN EQUITIES, INC. AND SUBSIDIARIES
5th Floor Crown Center
158 Jupiter cor. N. Garcia Sts.
Bel-Air Makati City

We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements
of CROWN EQUITIES, INC. AND SUBSIDIARIES (the “Group”) as at and for the year ended December 31, 2023
and have issued our report thereon dated March 26, 2024.

Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The accompanying Supplementary Schedules are the responsibility of the Group’s
management. These supplementary schedules include the following:

• Reconciliation of Retained Earnings Available for Dividend Declaration of the Parent Company as at
December 31, 2023
• Supplementary Schedules as Required by Part II of the Revised Securities Regulation Code (SRC) Rule
68 as at December 31, 2023
• Conglomerate Map as at December 31, 2023

These schedules are presented for the purpose of complying with the Revised SRC Rule 68 and are not part of
the basic consolidated financial statements. The information in these supplementary schedules have been
subjected to the auditing procedures applied in our audits of the basic consolidated financial statements and,
in our opinion, are fairly stated in all material respects in relation to the basic consolidated financial
statements taken as a whole.

REYES TACANDONG & CO.

WILSON P. TEO
Partner
CPA Certificate No. 92765
Tax Identification No. 191-520-944-000
BOA Accreditation No. 4782; Valid until April 13, 2024
BIR Accreditation No. 08-005144-014-2023
Valid until January 24, 2026
PTR No. 10072414
Issued January 2, 2024, Makati City

March 26, 2024

Makati City, Metro Manila

THE POWER OF BEING UNDERSTOOD

AUDIT I TAX I CONSULTING ■--
RSM
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
 RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION
FOR THE REPORTING PERIOD ENDED DECEMBER 31, 2023

CROWN EQUITIES, INC.

5th Floor Crown Center, 158 Jupiter cor. N. Garcia Sts., Bel-Air Makati City

Amount
Retained earnings, beginning of reporting period P
=204,966,428

Add net income for the current year 13,880,522

Add: Category C.1: Unrealized income recognized in the profit or loss

during the reporting period (net of tax)
Unrealized fair value adjustment (mark to market gains) of
financial instruments at fair value through profit or loss (FVPL) 6,449,322
Add: Category C.2: Unrealized income recognized in the profit or loss
during the reporting period (net of tax)
Realized fair value adjustment (mark to market gains) of financial
instruments at fair value through profit or loss (FVPL) 12,278,632
Add/Less: Category F: Other items that should be excluded from the
determination of the amount of available for dividends
distribution
Net movement in deferred tax recognized in profit or loss (1,165,781)
Total retained earnings, end of the reporting period available for
dividend P
=236,409,123
 CROWN EQUITIES, INC. AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULES AS REQUIRED BY PART II OF THE REVISED SRC RULE 68
DECEMBER 31, 2023

Schedule Description Page

A Financial Assets 1

Amounts Receivable from Directors, Officers, Employees, Related Parties

B
and Principal Stockholders (Other than Related Parties) N/A

Amounts Receivable from Related Parties which are Eliminated During the
C
Consolidation of the Financial Statements 4

D Long-Term Debt N/A

E Indebtedness to Related Parties (Long-Term Loans from Related Companies)

N/A

F Guarantees of Securities of Other Issuers N/A

G Capital Stock 5
 SCHEDULE A
-1-

CROWN EQUITIES, INC. AND SUBSIDIARIES

Financial Assets
DECEMBER 31, 2023

Values based on
Number of shares Amount market quotation at
Name of issuing entity & association of or principal amount shown on the end of reporting Income received
each issue of bonds and notes balance sheet period and accrued

Fair Value Through Profit or Loss

ABOITIZ POWER 100,000 3,780,000 3,780,000 =187,000
P
AC ENERGY PHILIPPINES, INC. 30,090 131,794 131,794 1,204
AREIT INC. 40,000 1,336,000 1,336,000 84,800
ASIA UNITED BANK 13,500 441,450 441,450 20,970
BASIC ENERGY CORP. 3,333 590 590 –
BELLE CORPORATION 75 88 88 4
BGF ASIAN HIGH YIELD 14,393 3,761,507 3,761,507 400,133
BYD COMPANY 8,640 13,131,933 13,131,933 69,033
CAPITALAND ASCENDAS REIT – – – 221,675
CEMEX HOLDINGS PHILIPPINES, INC. 576 542 542 –
CHINA BANKING CORPORATION 17,972 554,436 554,436 34,147
CITICORE ENERGY REIT CORP. 1,028,800 2,633,728 2,633,728 224,901
COSCO CAPITAL 27,000 124,740 124,740 5,130
CYBERBAY CORPORATION 1,200,000 – – –
D&L INDUSTRIES, INC. 11,000 69,410 69,410 3,300
DOUBLEDRAGON PROPERTIES CORP
23,200 2,157,600 2,157,600 187,488
EASTWEST 68,617 584,617 584,617 28,133
EMPIRE EAST LAND INC. 400,000 50,400 50,400 –
 -2-

Values based on
Number of shares Amount market quotation at
Name of issuing entity & association of or principal amount shown on the end of reporting Income received
each issue of bonds and notes balance sheet period and accrued
ESR REIT SG 265,935 3,570,871 3,570,871 254,487
EXPORT AND INDUSTRY BANK 3,310,000 – – –
FILINVEST LAND INC. - REIT 427,200 1,102,176 1,102,176 121,325
GLOBE TELECOM 1,382 2,377,040 2,377,040 175,700
GMA NETWORK INC. 271,500 2,280,600 2,280,600 332,200
IP E-GAME VENTURES INC. 10,000,000 – – –
KEPPEL DC REIT – – – 146,542
MANILA ELECTRIC COMPANY 16,000 6,384,000 6,384,000 312,768
MANILA MINING 8,988 41 41 –
MANILA WATER COMPANY, INC.
289,100 5,377,260 5,377,260 178,953
MAPLETREE INDUSTRIAL TRUST 100,000 10,532,280 10,532,280 503,153
MAPPLETREE LOGISTICS – – – 198,158
MREIT INC. 81,500 1,002,450 1,002,450 80,196
NEXTGENESIS CORP 15,000 – – –
NICKEL ASIA CORPORATION 303,700 1,664,276 1,664,276 72,888
OCCIDENTAL PETROLEUM COR. 2,000 6,612,285 6,612,285 21,212
ORIENTAL PETROLEUM & MINERAL "A"
117,021,003 936,168 936,168 58,511
ORIENTAL PETROLEUM & MINERAL "B"
30,000,000 243,000 243,000 15,000
PETRON CORP. – – – 2,200
PLDT 9,520 12,176,080 12,176,080 1,082,160
SHANG PROPERTIES INC 367,277 1,347,907 1,347,907 114,040
SHELL PROPERTIES INC. 93,700 1,025,078 1,025,078 –
SINGAPORE TELECOM. LTD – – – 242,077
SPC POWER CORP 10,000 70,000 70,000 2,000
UNION BANK OF THE PHILS 6,374 320,931 320,931 12,748
 -3-

Values based on
Number of shares Amount market quotation at
Name of issuing entity & association of or principal amount shown on the end of reporting Income received
each issue of bonds and notes balance sheet period and accrued
– –
WESTPAC BANKING CORP.
– 363,496
ZEUS HOLDINGS 1,190,000 84,490 84,490 –
166,777,375 =85,865,768
P =85,865,768
P P
=5,757,732
 -4-

SCHEDULE C

CROWN EQUITIES, INC. AND SUBSIDIARIES

Amounts Receivable from Related Parties which are Eliminated
During the Consolidation of the Financial Statements
DECEMBER 31, 2023

Balance at
Name of and Designation of Beginning of Amounts Amounts Balance at End
Debtor Year Additions collected Written–off Current Noncurrent of Year
Healthcare Systems Asia Phils. Inc. =72,189,862
P =–
P =–
P =–
P =72,189,862
P =–
P =72,189,862
P
 -5-
SCHEDULE G

CROWN EQUITIES, INC. AND SUBSIDIARIES

Capital Stock
DECEMBER 31, 2023

Number of shares held by

Number of shares Number of
issued and shares reserved
outstanding as shown for options,
Number of under the related warrants, Directors,
shares statement of financial conversion and Related officers and
Title of issue authorized position caption other rights parties employees* Others
Common
Stock 24,000,000,000 14,959,999,950 – – 2,500,080,226 12,459,919,724
*includes indirectly held but beneficially owned shares
 -6-

CROWN EQUITIES, INC. AND SUBSIDIARIES

CONGLOMERATE MAP
DECEMBER 31, 2023

CROWN EQUITIES, INC.

(Parent)

Subsidiaries

_I I I
HEALTHCARE SYSTEMS OF ARGENT CAPITAL HOLDINGS
CROWN CENTRAL PARKFIELD LAND HOLDINGS,
ASIA PHILS., INC CORP.
PROPERTIES CORP. (CCPC) INC. (PLHI)
(HSAPI) (ACHC)
48% 75%
97% 100%

I
FORTMED MEDICAL CLINICS
MAKATI, INC.
(FMCMI)
100%
 CRO\XA] E,OUITIES
INCORPORATED
STATEMENTS
STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL
preparation and fair
The Management of cRowN EQUITIES, NC. is responsible for the
therein for the years ended
presentation of the financial statements including the schedules attached
reporting framework
I)ecember 31, 2023 ,lnil 2022, in accordance with the prescribed financial
is necessary to enable the
indicated therein, and for such internal control as management determines
whether due to fraud or
preparation of financial statements that are free from material misstatement,
eITOr.

the Company's ability

In preparing the financial statements, management is responsible for assessing
to going concern and using
to continue as a going concern, disclosing, as applicable matters related
intends to liquidate the Company or
the going concern basis of accounting unless management either
to cease operations, or has no realistic alternative but to do so'

furancial reportlng
The Board of Directors (Trustees) is responsible in overseeing the company's
process.

staternents including the

The Board of Directors (Trustees) reviews and approves the financial
or mernbers'
schedules attached therein, and submits the same to the stoctfiolders

2023 and 2022,

Reyes Tacandong & Co., the independent auditors appointed by the stockholders in
with Philippine Standards on
have audited the financial statements of the company in accordance
on the fairness of
Auditing and in their report to the stockholders, have expressed their opinions
presentation upon completion of such audit'

//^-r,t t9*
ROMUALD ti. DY TANG PATRTCKD. GO
the Board
q President \l= Treasurer

MPR 0 r nzuarffiant exhibiting to me their Tax

SUBSCRIBED A}{D SWORN tO bCfOTC me this
Identitication Number, as tbllows :

NAMES TIN
George L. Go 100-929-738

Romuald U. DY Tang
tl5-321-304
149-51 l-050
Patrick D. Go

DocNo. -tr
PageNo ? t{'
BookNo. Z- {
I
Series af 26U
L
 COVER SHEET
for
AUDITED FINANCIAL STATEMENTS SEC Registration Number

I0 I0 I0 I0 I0 I0 I0 I3 I9 I7 I4 I5 I
COMPANY NAME

C R O W N E Q U I T I E S , I N C .

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

5 t h F l o o r C r o w n C e n t e r , 1 5 8 J u p i t e r c o r

. N . G a r c i a S t s . , B e l - A i r M a k a t i C i t y

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

IA IA IS IF IS I IC IR IM ID I IN I/ IA I
COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number/s Mobile Number

ebm@crownequitiesinc.com (632) 8-899-0081 +63 919 076 1391

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

363 4th Tuesday of May December 31

CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation

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

Mr. Eugene B. Macalalag ebm@crownequitiesinc.com (632) 8-899-0081 –

CONTACT PERSON’S ADDRESS

5th Floor Crown Center, 158 Jupiter cor. N. Garcia Sts., Bel-air Makati City
NOTE 1: In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission
within
thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
NOTE 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 shall not excuse the corporation from liability for its deficiencies.
 BOA/PRC Accreditation No. 4782 BDO Towers Valero
August 16, 2021, valid until April 13, 2024 8741 Paseo de Roxas

REYES TACANDONG & Co.

FIRM PRINCIPLES. WISE SOLUTION S.
SEC Registration No. PP201007009 Makati City 1226 Philippines
Phone
Fax
: +632 8 982 9100
: +632 8 982 9111
Website : www.reyestacandong.com

INDEPENDENT AUDITORS' REPORT

The Stockholders and the Board of Directors

CROWN EQUITIES, INC.
5th Floor Crown Center
158 Jupiter cor. N. Garcia Sts.
Bel-Air Makati City

Opinion

We have audited the separate financial statements of CROWN EQUITIES, INC. (the “Company”), which
comprise the separate statements of financial position as at December 31, 2023 and 2022, and the
separate statements of comprehensive income, separate statements of changes in equity and separate
statements of cash flows for the years ended December 31, 2023, 2022 and 2021, and notes to separate
financial statements, including a summary of material accounting policy information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2023 and 2022, and its financial performance
and its cash flows for the years ended December 31, 2023, 2022 and 2021, in accordance with Philippine
Financial Reporting Standards (PFRSs), as modified by the application of financial reporting relief issued
and approved by the Securities and Exchange Commission.

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities
under those standards are further described in the Auditors’ Responsibilities for the Audit of the Separate
Financial Statements section of our report. We are independent of the Company in accordance with the
Code of Ethics for Professional Accountants in the Philippines (Code of Ethics) together with the ethical
requirements that are relevant to the audit of the separate financial statements in the Philippines, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Separate Financial Statements

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

THE POWER OF BEING UNDERSTOOD

AUDIT I TAX I CONSULTING ■--
RSM
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
IBia REYES T ACANDo· G & Co.
• FIRM PRJNCIPLES. WISE SOLUTIONS.

-2-

In preparing the separate financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting
process.

Auditors’ Responsibilities for the Audit of the Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the separate financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, these could reasonably be expected to influence the economic decisions of users taken
on the basis of these separate financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

▪ Identify and assess the risks of material misstatement of the separate financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

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

▪ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

▪ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditors’ report to the related disclosures in the separate financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditors’ report. However, future events or conditions may cause the Company
to cease to continue as a going concern.

▪ Evaluate the overall presentation, structure and content of the separate financial statements,
including the disclosures, and whether the separate financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
IBia REYES T ACANDo· G & Co.
• FIRM PRJNCIPLES. WISE SOLUTIONS.

-3-

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

REYES TACANDONG & CO.

WILSON P. TEO
Partner
CPA Certificate No. 92765
Tax Identification No. 191-520-944-000
BOA Accreditation No. 4782; Valid until April 13, 2024
BIR Accreditation No. 08-005144-014-2023
Valid until January 24, 2026
PTR No. 10072414
Issued January 2, 2024, Makati City

March 26, 2024

Makati City, Metro Manila
 CROWN EQUITIES, INC.
SEPARATE STATEMENTS OF FINANCIAL POSITION

December 31
Note 2023 2022

ASSETS

Current Assets
Cash and cash equivalents 4 P
=580,605,738 =P505,749,261
Investments in quoted shares 5 60,931,520 127,152,069
Receivables 6 19,395,983 23,353,392
Real estate inventories 7 29,376,823 32,661,494
Due from subsidiaries 16 72,477,186 72,540,431
Other current assets 8 33,689,271 31,052,303
Total Current Assets 796,476,521 792,508,950

Noncurrent Assets
Noncurrent portion of installment contracts receivable 6 38,470,836 44,338,092
Noncurrent portion of loans receivable 6 10,032,911 –
Investments in subsidiaries 11 563,270,422 563,270,422
Investment properties 9 975,901,013 979,421,836
Property and equipment 10 16,320,453 9,238,932
Deferred tax assets 23 14,327,967 14,410,170
Other noncurrent assets 12 19,521,687 19,474,464
Total Noncurrent Assets 1,637,845,289 1,630,153,916

P
=2,434,321,810 =2,422,662,866
P

LIABILITIES AND EQUITY

Current Liabilities
Accounts and other payables 13 P
=81,284,188 P
=85,533,142

Noncurrent Liabilities
Retirement benefits liability 14 21,793,745 19,023,114
Security deposits 22 4,665,501 4,102,393
Deferred tax liabilities 23 5,023,222 6,285,801
Total Noncurrent Liabilities 31,482,468 29,411,308
Total Liabilities 112,766,656 114,944,450

(Forward)
 -2-

December 31
Note 2023 2022

Equity
Capital stock 15 P
=1,977,523,246 P =1,977,523,246
Additional paid-in capital 15 118,570,274 118,570,274
Retained earnings 734,746,902 720,866,380
Other comprehensive loss (27,762,017) (27,718,233)
2,803,078,405 2,789,241,667
Treasury stock - at cost 15 (481,523,251) (481,523,251)
Total Equity 2,321,555,154 2,307,718,416

P
=2,434,321,810 =2,422,662,866
P

See accompanying Notes to Separate Financial Statements.

 CROWN EQUITIES, INC.
SEPARATE STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31

Note 2023 2022 2021

REVENUE
Real estate sales 17 P
=23,870,171 P
=52,025,970 P
=42,439,965
Rental income 22 19,939,282 15,647,904 14,741,314
Management fees 17 7,200,000 7,200,000 7,200,000
Interest income 4 7,198,612 9,797,911 9,809,777
Dividend income 11 4,218,762 36,763,257 25,898,809
62,426,827 121,435,042 100,089,865

DIRECT COSTS
Cost of real estate sold 18 9,388,268 20,107,359 18,502,675
Depreciation and amortization 9 8,369,490 6,147,173 6,432,387
Taxes and licenses 3,130,462 3,217,153 3,227,551
20,888,220 29,471,685 28,162,613

GROSS INCOME 41,538,607 91,963,357 71,927,252

SELLING AND ADMINISTRATIVE EXPENSES 19 (63,671,879) (70,577,864) (52,642,227)

OTHER INCOME – Net 20 35,760,105 248,326,798 47,035,694

INCOME BEFORE INCOME TAX 13,626,833 269,712,291 66,320,719

PROVISION FOR (BENEFIT FROM) INCOME

TAX 23
Current 912,092 751,318 203,578
Deferred (1,165,781) 833,974 2,732,077
(253,689) 1,585,292 2,935,655

NET INCOME P
=13,880,522 =268,126,999
P =63,385,064
P
 -2-

Years Ended December 31

Note 2023 2022 2021

OTHER COMPREHENSIVE LOSS

Items that will not be reclassified

subsequently to profit or loss
Unrealized fair value loss on financial assets at
fair value through other comprehensive
income (FVOCI) 12 P
=– =–
P (P
=32,000,000)
Remeasurement gain (loss) on retirement
benefits, net of tax effect 14 (43,784) 808,015 1,533,922
(43,784) 808,015 (30,466,078)

TOTAL COMPREHENSIVE INCOME P

=13,836,738 P
=268,935,014 =32,918,986
P

BASIC/DILUTED EARNINGS PER SHARE

ATTRIBUTABLE TO EQUITY HOLDERS OF
THE PARENT COMPANY 21 P
=0.00093 =0.01792
P =0.00424
P

See accompanying Notes to Separate Financial Statements.

 CROWN EQUITIES, INC.
SEPARATE STATEMENTS OF CHANGES IN EQUITY

Years Ended December 31

Note 2023 2022 2021

CAPITAL STOCK 15
Balance at beginning and end of year P
=1,977,523,246 P
=1,977,523,246 P
=1,977,523,246

ADDITIONAL PAID-IN CAPITAL

Balance at beginning and end of year 15 118,570,274 118,570,274 118,570,274

RETAINED EARNINGS
Balance at beginning of year 720,866,380 452,739,381 389,354,317
Net income 13,880,522 268,126,999 63,385,064
Balance at end of year 734,746,902 720,866,380 452,739,381

OTHER COMPREHENSIVE INCOME

Not to be reclassified to profit or loss in

subsequent periods

Cumulative Unrealized Fair Value Loss on

Financial Assets at FVOCI
Balance at beginning of year (32,000,000) (32,000,000) –
Unrealized loss on fair value changes 12 – – (32,000,000)
Balance at end of year (32,000,000) (32,000,000) (32,000,000)

Cumulative Remeasurement Gain on

Retirement Benefits Liability, Net of
Tax Effect 14
Balance at beginning of year 4,281,767 3,473,752 1,939,830
Remeasurement gain (loss) on retirement
benefits liability (43,784) 808,015 1,533,922
Balance at end of year 4,237,983 4,281,767 3,473,752

(27,762,017) (27,718,233) (28,526,248)

TREASURY STOCK
Balance at beginning and end of year 15 (481,523,251) (481,523,251) (481,523,251)

P
=2,321,555,154 P
=2,307,718,416 P
=2,038,783,402

See accompanying Notes to Separate Financial Statements.

 CROWN EQUITIES, INC.
SEPARATE STATEMENTS OF CASH FLOWS

Years Ended December 31

Note 2023 2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax P
=13,626,833 =269,712,291
P =66,320,719
P
Adjustments for:
Interest income from: 4
Cash and cash equivalents (25,722,189) (8,775,362) (2,533,355)
Installment contract receivable (7,198,612) (9,797,911) (9,809,777)
Loans receivable (41,167) (999,999) (118,056)
Depreciation and amortization 9 11,781,373 9,317,273 8,812,859
Unrealized loss (gain) on changes in:
Fair value of investments in
quoted shares 20 6,449,322 (5,307,031) (32,450,740)
Foreign exchange rates 20 (970,289) (5,172,968) (585,074)
Dividend income 11 (4,218,762) (36,763,257) (25,898,809)
Retirement benefits cost 14 2,712,252 8,541,494 2,142,442
Gain on reversal of allowance for
impairment losses on:
Receivables 20 (471,236) (112,289) –
Investment in subsidiaries 20 – (212,063,980) –
Loss (gain) on contract cancellations
and forfeitures 20 (8,459) 1,396,098 (505,833)
Gain on sale of investment properties 9 – (26,401,480) –
Operating income (loss) before working
capital changes (4,060,934) (16,427,121) 5,374,376
Decrease (increase) in:
Investments in quoted shares 59,771,227 54,645,527 36,733,150
Receivables 10,558,365 (15,277,555) (2,173,588)
Real estate inventories 2,436,888 9,233,093 9,684,136
Other assets (168,397) 5,843,987 3,823,845
Increase (decrease) in:
Accounts and other payables (4,177,250) (9,917,747) (703,235)
Security deposits 563,108 294,224 215,317
Net cash generated from operations 64,923,007 28,394,408 52,954,001
Interest received 32,961,968 19,573,272 12,461,188
Dividends received 4,218,762 36,763,257 25,898,809
Income taxes paid (3,427,886) (5,603,061) (4,097,459)
Net cash flows from operating activities 98,675,851 79,127,876 87,216,539

(Forward)
 -2-

Years Ended December 31

Note 2023 2022 2021

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of:
Property and equipment 10 (P
=10,493,404) (P
=7,421,458) (P
=2,978,721)
Investment properties 9 (4,000,884) (6,655,706) (22,421,529)
Loans receivable: 6
Grant (10,310,872) – –
Collections 15,497 20,000,000 25,000,000
Extension – – (20,000,000)
Collections from due from subsidiaries 16 – – 3,893,033
Proceeds from sale of investment properties 9 – 31,432,500 –
Addition to investments in subsidiaries 11 – – (25,000,000)
Net cash flows from investing activities (24,789,663) 37,355,336 (41,507,217)

EFFECT OF FOREIGN EXCHANGE RATE

CHANGES ON CASH AND CASH
EQUIVALENTS 970,289 5,172,968 585,074

NET INCREASE IN CASH AND CASH

EQUIVALENTS 74,856,477 121,656,180 46,294,396

CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR 505,749,261 384,093,081 337,798,685

CASH AND CASH EQUIVALENTS AT

END OF YEAR P
=580,605,738 =505,749,261
P =384,093,081
P

SUPPLEMENTARY INFORMATION ON
NONCASH ACTIVITY 7
Reclassification from inventories to
investment property P
=847,783 =–
P =–
P
Offsetting of due from related parties and
accounts payable 63,245 – –

COMPONENTS OF CASH AND CASH

EQUIVALENTS 4
Cash in banks P
=143,626,624 =P78,749,261 =P42,186,366
Short-term placements 436,979,114 427,000,000 341,906,715
P
=580,605,738 =505,749,261
P =384,093,081
P

See accompanying Notes to Separate Financial Statements.

 CROWN EQUITIES, INC.
NOTES TO SEPARATE FINANCIAL STATEMENTS
AS AT AND FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

1. Corporate Information

CROWN EQUITIES, INC. (CEI or the “Company”), a public corporation under Section 17.2 of the
Securities Regulation Code (SRC), was incorporated in the Philippines and registered with the
Securities and Exchange Commission (SEC) on October 24, 1969. The Company is an investment
holding company, currently engaged in the business of real estate development and healthcare
through its subsidiaries. Its shares are listed on the Philippine Stock Exchange (PSE).

The Company’s registered office address is 5th Floor Crown Center, 158 Jupiter cor. N. Garcia Sts.,
Bel-Air Makati City.

As at December 31, 2023 and 2022, the Company has ownership interests in the following
subsidiaries, all incorporated in the Philippines:

% of Nature of Principal Place

Name of Subsidiary Ownership Business of Business
Crown Central Properties, Corp. (CCPC) (a) 48% Real Estate Biñan, Laguna
Parkfield Land Holdings, Inc. (PLHI) 75% Real Estate Makati City
Healthcare Systems of Asia Phils., Inc (HSAPI) 97% Holding Makati City
Fortmed Medical Clinics Makati, Inc. (FMCMI) (b) 97% Healthcare Makati City
Argent Capital Holdings Corporation (ACHC) 100% Holding Makati City
(a) Management has determined that the Parent Company has control over the financial and operating policies of CCPC
through representation on the Board of Directors (BOD) (see Note 3).
(b) Indirectly owned through HSAPI.

Approval of Separate Financial Statements

The separate financial statements as at December 31, 2023 and 2022 and for the years ended
December 31, 2023, 2022 and 2021 were approved and authorized for issuance by the Executive
Committee on March 26, 2024, as authorized by the Board of Directors (BOD) on February 27, 2024.

2. Summary of Material Accounting Policy Information

The material accounting policies used in the preparation of the separate financial statements have
been consistently applied to all years presented, unless otherwise stated.

Basis of Preparation and Statement of Compliance

The separate financial statements have been prepared in accordance with Philippine Financial
Reporting Standards (PFRSs). This financial reporting framework includes PFRS, Philippine
Accounting Standards (PASs) and Philippine Interpretation from International Financial Reporting
Interpretations Committee issued by the Philippine Financial and Sustainability Reporting Standards
Council and adopted by the SEC, including SEC pronouncements.

The Company also prepares consolidated financial statements for the same period, as the separate
financial statements presented in accordance with PFRSs. These may be obtained at the registered
office address of the Company or at the SEC.
 -2-

On December 15, 2020, the SEC issued Memorandum Circular (MC) No. 34, Series of 2020, which
further extends the deferral of application of the provision of the Philippine Interpretations
Committee (PIC) Question & Answer (Q&A) No. 2018-12 with respect to accounting for significant
financing component and exclusion of land in the calculation of percentage of completion (POC) and
IFRIC Agenda Discussion on over time transfers of construction goods under PAS 23, Borrowing
Costs, for another period of three years or until 2023.

The Company opted to avail the relief in connection with the accounting for significant financing
component, exclusion of land in calculation of POC, and borrowing cost. The impact of the
application of such financial reporting relief is discussed in “Amendments to PFRSs and PIC Issuances
in Issue But Not Yet Effective or Adopted” section of notes to the financial statements.

Bases of Measurement
The separate financial statements are presented in Philippine Peso (Peso), the Company’s functional
currency. All values are rounded to the nearest Peso except when otherwise indicated.

The separate financial statements of the Company have been prepared on a historical cost basis
except for investments in quoted shares designated at fair value through profit or loss (FVPL) and
investment in unquoted shares designated at fair value through other comprehensive income
(FVOCI). Historical cost is generally based on the fair value of the consideration given in exchange
for an asset and the fair value of the consideration received in exchange for incurring a liability.

Fair value is the price that would be received to sell an asset or be paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

The Company uses observable market data to the extent possible when measuring the fair value of
an asset or a liability. Fair values are categorized into different levels in a fair value hierarchy based
on inputs used in the valuation techniques as follows:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different
levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the
same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the
following notes to separate financial statements:

• Note 3 - Significant Judgments, Accounting Estimates and Assumptions

• Note 5 - Investments in Quoted Shares
 -3-

• Note 9 - Investment Properties

• Note 12 - Investment in Unquoted Shares under “Other Noncurrent Assets”
• Note 25 - Fair Value of Financial Assets and Liabilities

Adoption of Amendments to PFRSs

The accounting policies adopted are consistent with those of the previous financial year, except for
the adoption of the following amendments to PFRSs effective January 1, 2023:

• Amendments to PAS 1, Presentation of Financial Statements, and PFRS Practice

Statement 2, Making Materiality Judgments - Disclosure Initiative - Accounting Policies – The
amendments require an entity to disclose its material accounting policies, instead of its
significant accounting policies and provide guidance on how an entity applies the concept of
materiality in making decisions about accounting policy disclosures. In assessing the materiality
of accounting policy information, entities need to consider both the size of the transactions,
other events or conditions and its nature. The amendments clarify (1) that accounting policy
information may be material because of its nature, even if the related amounts are immaterial,
(2) that accounting policy information is material if users of an entity’s financial statements
would need it to understand other material information in the financial statements, and (3) if an
entity discloses immaterial accounting policy information, such information should not obscure
material accounting policy information. In addition, PFRS Practice Statement 2 is amended by
adding guidance and examples to explain and demonstrate the application of the ‘four-step
materiality process’ to accounting policy information.

• Amendments to PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors -

Definition of Accounting Estimates – The amendments clarify the distinction between changes in
accounting estimates and changes in accounting policies, and the correction of errors. Under the
new definition, accounting estimates are “monetary amounts in financial statements that are
subject to measurement uncertainty”. An entity develops an accounting estimate if an
accounting policy requires an item in the financial statements to be measured in a way that
involves measurement uncertainty. The amendments clarify that a change in accounting
estimate that results from new information or new developments is not a correction of an error,
and that the effects of a change in an input or a measurement technique used to develop an
accounting estimate are changes in accounting estimates if they do not result from the
correction of prior period errors. A change in an accounting estimate may affect only the profit
or loss in the current period, or the profit or loss of both the current and future periods.

• Amendments to PAS 12, Income Taxes - Deferred Tax Related Assets and Liabilities from a Single
Transaction – The amendments require companies to recognize deferred tax on transactions
that, on initial recognition, give rise to equal amounts of taxable and deductible temporary
differences.

• Amendments to PAS 1, Classification of Liabilities as Current or Noncurrent – The amendments

clarify the requirements for an entity to have the right to defer settlement of the liability for at
least 12 months after the reporting period. The amendments also specify and clarify the
following: (i) an entity’s right to defer settlement must exist at the end of the reporting period,
(ii) the classification is unaffected by management’s intentions or expectations about whether
the entity will exercise its right to defer settlement, (iii) how lending conditions affect
classification, and (iv) requirements for classifying liabilities where an entity will or may settle by
issuing its own equity instruments.
 -4-

The adoption of the amendments to PFRSs did not materially affect the separate financial
statements of the Company. Additional disclosures were included in the separate financial
statements, as applicable.

Amendments to PFRSs and PIC Issuances in Issue but Not Yet Effective or Adopted
Relevant amendments to PFRSs and PIC issuances, which are not yet effective as at December 31,
2023 and have not been applied in preparing the separate financial statements, are summarized
below.

Effective for annual periods beginning on or after January 1, 2024:

• Amendments to PAS 1, Noncurrent Liabilities with Covenants – The amendments clarified that
covenants to be complied with after the reporting date do not affect the classification of debt as
current or noncurrent at the reporting date. Instead, the amendments require the entity to
disclose information about these covenants in the notes to the financial statements. The
amendments must be applied retrospectively. Earlier application is permitted. If applied in
earlier period, the Company shall also apply Amendments to PAS 1 - Classification of Liabilities
as Current or Noncurrent for that period.

• PIC Q&A 2018-12-D, PFRS 15, Implementing Issues Affecting the Real Estate Industry
(as amended by PIC Q&A 2020-4) – On December 15, 2020, the SEC issued SEC MC No. 34-2020
providing relief to the real estate industry by deferring the application of “assessing if the
transaction price includes a significant financing component as discussed in PIC Q&A 2018-12-D
(with an addendum in PIC Q&A 2020-04)” until December 31, 2023.

PIC Q&A 2018-12-E, Treatment of Land in the Determination of the POC – The PIC Q&A clarified
that the cost of the land should be excluded in measuring the POC of performance obligation
and should be accounted for as fulfillment cost.

Company availed of the SEC relief with respect to accounting for significant financing
component and treatment of land in the determination of the POC. Management assessed that
the adoption of this PIC on January 1, 2024 will not have a significant impact considering that
the Company’s ongoing project is estimated to be completed in 2024 or are already completed
and available for sale. Management also assessed that the adoption will not have a significant
impact on any new projects that the Company will start in 2024.

Effective for annual periods beginning on or after January 1, 2025 –

• Amendments to PAS 21, The Effects of Changes in Foreign Exchange Rates - Lack of
Exchangeability – The amendments clarify when a currency is considered exchangeable into
another currency and how an entity determines the exchange rate for currencies that lack
exchangeability. The amendments also introduce new disclosure requirements to help users of
financial statements assess the impact when a currency is not exchangeable. An entity does not
apply the amendments retrospectively. Instead, an entity recognizes any effect of initially
applying the amendments as an adjustment to the opening balance of retained earnings when
the entity reports foreign currency transactions. When an entity uses a presentation currency
other than its functional currency, it recognizes the cumulative amount of translation
differences in equity. Earlier application is permitted.
 -5-

Under prevailing circumstances, the adoption of the foregoing amendments to PFRSs and PIC
issuances is not expected to have any material effect on the separate financial statements of the
Company. Additional disclosures will be included in the separate financial statements, as applicable.

Financial Assets and Liabilities

Recognition and Measurement

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

Initial Recognition and Measurement. Financial instruments are recognized initially at fair value,
which is the fair value of the consideration given (in case of an asset) or received (in case of a
liability). The initial measurement of financial instruments, except for those designated at FVPL,
includes transaction cost.

“Day 1” Difference. Where the transaction in a non-active market is different from the fair value of
other observable current market transactions in the same instrument or based on a valuation
technique whose variables include only data from observable market, the Company recognizes the
difference between the transaction price and fair value (a “Day 1” difference) in profit or loss.
In cases where there is no observable data on inception, the Company deems the transaction price
as the best estimate of fair value and recognizes “Day 1” difference in profit or loss when the inputs
become observable or when the instrument is derecognized. For each transaction, the Company
determines the appropriate method of recognizing the “Day 1” difference.

Classification
The Company classifies its financial assets at initial recognition under the following categories:
(a) financial assets at FVPL, (b) financial assets at amortized cost and (c) financial assets at FVOCI.
Financial liabilities, on the other hand, are classified as either financial liabilities at FVPL or financial
liabilities at amortized cost. The classification of a financial instrument largely depends on the
Company’s business model and its contractual cash flow characteristics.

As at December 31, 2023 and 2022, the Company does not have financial liabilities at FVPL.

Classification of Financial Instruments between Liability and Equity. A financial instrument is

classified as liability if it provides for a contractual obligation to:

• deliver cash or another financial asset to another entity;

• exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Company; or

• satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.

If the Company does not have an unconditional right to avoid delivering cash or another financial
asset to settle its contractual obligation, the obligation meets the definition of a financial liability.
 -6-

Financial Assets at FVPL. Financial assets at FVPL are either classified as held for trading or
designated at FVPL. A financial instrument is classified as held for trading if it meets either of the
following conditions:

• it is acquired or incurred principally for the purpose of selling or repurchasing it in the near
term;

• on initial recognition, it is part of a portfolio of identified financial instruments that are managed
together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

• it is a derivative (except for a derivative that is a financial guarantee contract or a designated

and effective hedging instrument).

This category includes equity instruments which the Company had not irrevocably elected to classify
at FVOCI at initial recognition. This category includes debt instruments whose cash flows are not
“solely for payment of principal and interest” assessed at initial recognition of the assets, or which
are not held within a business model whose objective is either to collect contractual cash flows, or
to both collect contractual cash flows and sell.

The Company may, at initial recognition, designate a financial asset meeting the criteria to be
classified at amortized cost or at FVOCI, as a financial asset or financial liability at FVPL, if doing so
eliminates or significantly reduces accounting mismatch that would arise from measuring these
assets or liabilities.

After initial recognition, financial assets at FVPL are subsequently measured at fair value. Unrealized
gains or losses arising from the fair valuation of financial assets at FVPL are recognized in profit or
loss.

As at December 31, 2023 and 2022, the Company designated its investments in quoted shares as
financial assets at FVPL.

Financial Assets at Amortized Cost. Financial assets shall be measured at amortized cost if both of
the following conditions are met:

• the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise, on specified dates, to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

After initial recognition, financial assets at amortized cost are subsequently measured at amortized
cost using the effective interest method, less any 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. Gains and losses are recognized in profit or loss when the
financial assets are derecognized and through amortization process. Financial assets at amortized
cost are included under current assets if realizability or collectibility is within 12 months after the
reporting period. Otherwise, these are classified as noncurrent assets.

As at December 31, 2023 and 2022, the Company’s cash and cash equivalents, receivables, due from
subsidiaries, construction bond and refundable deposits (presented under “Other current assets”
account) are classified under this category.
 -7-

Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash with original maturities of three months or less from dates of placement and which
are subject to an insignificant risk of changes in value.

Financial Assets at FVOCI. For debt instruments that meet the contractual cash flow characteristic
and are not designated at FVPL under the fair value option, the financial assets shall be measured at
FVOCI if both of the following conditions are met:

• the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows and selling the financial assets; and

• the contractual terms of the financial asset give rise, on specified dates, to cash flows that are
solely payments of principal and interest on the principal amount outstanding.

For equity instruments, the Company may irrevocably designate the financial asset to be measured
at FVOCI in case the above conditions are not met.

Financial assets at FVOCI are initially measured at fair value plus transaction costs. After initial
recognition, interest income (calculated using the effective interest rate method), foreign currency
gains or losses and impairment losses of debt instruments measured at FVOCI are recognized directly
in profit or loss. When the financial asset is derecognized, the cumulative gains or losses previously
recognized in other comprehensive income are reclassified from equity to profit or loss as a
reclassification adjustment.

Dividends from equity instruments held at FVOCI are recognized in profit or loss when the right to
receive payment is established, unless the dividend clearly represents a recovery of part of the cost
of the investment. Foreign currency gains or losses and unrealized gains or losses from equity
instruments are recognized in other comprehensive income and presented in the equity section of
the separate statement of financial position. These fair value changes are recognized in equity and
are not reclassified to profit or loss in subsequent periods, even if the asset is sold or impaired.
The cumulative fair value adjustment is transferred to retained earnings when the asset is sold.

As at December 31, 2023 and 2022, the Company designated its investment in unquoted shares
(presented as part of “Other noncurrent assets” account) as financial asset at FVOCI.

Financial Liabilities at Amortized Cost. Financial liabilities are categorized as financial liabilities at
amortized cost when the substance of the contractual arrangement results in the Company having
an obligation either to deliver cash or another financial asset to the holder, or to settle the
obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed
number of its own equity instruments.

These financial liabilities are initially recognized at fair value less any directly attributable transaction
costs. After initial recognition, these 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 effective interest rate.
Gains and losses are recognized in profit or loss when the liabilities are derecognized or through the
amortization process.

As at December 31, 2023 and 2022, the Company’s accounts and other payables (excluding contract
liabilities, deposits for document processing and statutory payable) and security deposits are classified
under this category.
 -8-

Reclassification
The Company reclassifies its financial assets when, and only when, it changes its business model for
managing those financial assets. The reclassification is applied prospectively from the first day of
the first reporting period following the change in the business model (reclassification date).

For a financial asset reclassified out of the financial assets at amortized cost category to financial
assets at FVPL, any gain or loss arising from the difference between the previous amortized cost of
the financial asset and fair value is recognized in profit or loss.

For a financial asset reclassified out of the financial assets at amortized cost category to financial
assets at FVOCI, any gain or loss arising from a difference between the previous amortized cost of
the financial asset and fair value is recognized in other comprehensive income.

For a financial asset reclassified out of the financial assets at FVPL category to financial assets at
amortized cost, its fair value at the reclassification date becomes its new gross carrying amount.

For a financial asset reclassified out of the financial assets at FVOCI category to financial assets at
amortized cost, any gain or loss previously recognized in other comprehensive income is removed
from equity and adjusted against the fair value of the financial asset. The financial asset is measured
at the reclassification day as if it had always been measured at amortized cost.

In the case of a financial asset that does not have a fixed maturity, the gain or loss shall be recognized in
profit or loss when the financial asset is sold or disposed of. If the financial asset is subsequently
impaired, any previous gain or loss that has been recognized in other comprehensive income is
reclassified from equity to profit or loss.

For a financial asset reclassified out of the financial assets at FVPL category to financial assets at
FVOCI, its fair value at the reclassification date becomes its new gross carrying amount. Meanwhile,
for a financial asset reclassified out of the financial assets at FVOCI category to financial assets at
FVPL, the cumulative gain or loss previously recognized in other comprehensive income is
reclassified from equity to profit or loss as a reclassification adjustment at the reclassification date.

Impairment of Financial Assets at Amortized Cost

The Company records an allowance for expected credit losses (ECL) which is based on the difference
between the contractual cash flows due in accordance with the contract and all the cash flows that
the Company expects to receive. The difference is then discounted at an approximation to the
asset’s original effective interest rate.

For receivables (excluding installment contracts receivable), the Company has applied the simplified
approach and has calculated ECL based on the lifetime ECL. The Company has established a
provision matrix that is based on its historical credit loss experience, adjusted for forward-looking
factors specific to the debtors and the economic environment.

For installment contracts receivable and other financial assets at amortized cost, the ECL is based on
the 12-month ECL, which pertains to the portion of lifetime ECL that results from default events on a
financial instrument that are possible within 12 months after the reporting date. However, when there
has been a significant increase in credit risk since initial recognition, the allowance will be based on the
lifetime ECL. When determining whether the credit risk of a financial asset has increased significantly
since initial recognition, the Company compares the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default occurring on the financial instrument as
at the date of initial recognition and consider reasonable and supportable information, that is available
without undue cost or effort, that is indicative of significant increases in credit risk since initial
recognition.
 -9-

Derecognition

Financial Assets. A financial asset (or where applicable, a part of a financial asset or part of a group
of similar financial assets) is derecognized when:

• The right to receive cash flows from the asset has expired;

• The Company retains the right to receive cash flows from the financial asset, but has assumed
an obligation to pay them in full without material delay to a third party under a “pass-through”
arrangement; or

• The Company has transferred its right to receive cash flows from the financial asset and either
(a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.

When the Company has transferred its right to receive cash flows from a financial asset or has
entered into a pass-through arrangement, and has neither transferred nor retained substantially all
the risks and rewards of ownership of the financial asset nor transferred control of the financial
asset, the financial asset is recognized to the extent of the Company’s continuing involvement in the
financial asset. Continuing involvement that takes the form of a guarantee over the transferred
financial asset is measured at the lower of the original carrying amount of the financial asset and the
maximum amount of consideration that the Company could be required to repay.

Financial Liabilities. A financial liability is derecognized when the obligation under the liability is
discharged, cancelled or has expired. When 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 separate statement of comprehensive income.

Offsetting
Financial assets and liabilities are offset and the net amount is reported in the separate 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 separate statement of financial position.

Classification of Financial Instrument between Liability and Equity

A financial instrument is classified as liability if it provides for a contractual obligation to:

• Deliver cash or another financial asset to another entity;

• Exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Company; or

• Satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.

If the Company does not have an unconditional right to avoid delivering cash or another financial
asset to settle its contractual obligation, the obligation meets the definition of a financial liability.
 - 10 -

Real Estate Inventories

Real estate inventories include properties being constructed for sale in the ordinary course of business
rather than to be held for rent or capital appreciation. Real estate inventories are initially measured at
cost. Subsequently, real state inventories are stated at the lower of cost and net realizable value (NRV).

Costs include the acquisition cost of the land plus costs incurred for development and improvement of
the properties. NRV is the estimated selling price in the ordinary course of business less estimated costs
to complete and sell. Cost represents price using specific identification method.

At each reporting date, real estate inventories are assessed for impairment. If real estate inventories
are impaired, the carrying amount is reduced to its NRV. The impairment loss is recognized
immediately in profit or loss.

When real estate inventories are sold, the carrying amount of those real estate inventories is
recognized to profit or loss in the year when the related revenue is recognized.

Creditable Withholding Taxes (CWTs)

CWTs represent the amount withheld by the Company’s customers in relation to its income. CWTs
can be carried forward to the succeeding year when in excess of income tax payable and utilized as
payment for income taxes provided that these are properly supported with certificates of creditable
tax withheld at source. CWTs are stated at face amount less any impairment in value.

Investments in Subsidiaries
The Company’s investments in subsidiaries are carried at cost, less any impairment in value.
A subsidiary is an entity in which the Company has control.

Control is presumed to exist when the Company holds between more than 50% of the voting power
of another entity. An investor controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee.

The investment is derecognized when it is sold or disposed. Gains or losses arising from
derecognition of an investment in a subsidiary are measured as the difference between the net
proceeds and the carrying amount of the asset and are recognized in the profit or loss when the
asset is derecognized.

Investment Properties
Investment properties are properties held either to earn rental income or for capital appreciation or
both, but not for sale in the ordinary course of business or for administrative purposes.

Building and building improvements, except land and construction-in-progress (CIP), are measured
at cost less accumulated depreciation and amortization and any impairment in value. Land is stated
at cost less any impairment in value. The carrying amount includes the cost of replacing part of an
existing investment property at the time that cost is incurred if the recognition criteria are met and
excludes the costs of day-to-day servicing of an investment property.

CIP represents the on-going construction of the additional floor of the building and is stated at cost
including costs of construction and other direct costs. This is not depreciated until such time that the
relevant assets are completed and ready for operational use.
 - 11 -

Depreciation and amortization on building and building improvements are computed using the
straight-line method over the estimated useful life of 30 years. The estimated useful life and
depreciation and amortization method are reviewed periodically to ensure that these are consistent
with the expected pattern of economic benefits from items of investment properties.

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

Investment properties are derecognized when either these have been disposed of or when the
investment properties are permanently withdrawn from use and no future economic benefit is
expected from its disposal. Any gains or losses on the retirement or disposal of investment
properties are recognized in profit or loss in the year of retirement or disposal.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and any accumulated
impairment in value.

The initial cost of property and equipment comprises its purchase price, after deducting trade
discounts and rebates, and any directly attributable costs of bringing the asset to its working
condition and location for its intended use.

Expenditures incurred after the property and equipment have been put into operation, such as
repairs, maintenance and overhaul costs, are normally recognized in profit or loss in the year the
costs are incurred. In situations where it can be clearly demonstrated that the expenditures have
resulted in an increase in the future economic benefits expected to be obtained from the use of an
item of property and equipment beyond its originally assessed standard of performance, the
expenditures are capitalized as additional costs of property and equipment. The cost of replacing a
component of an item of property and equipment is recognized if it is probable that the future
economic benefits embodied within the component will flow to the Company, and its cost can be
measured reliably. The carrying amount of the replaced component is derecognized.

Depreciation is calculated on a straight-line basis over the following estimated useful lives of the
property and equipment:

Asset Type Useful Life in Years

Office furniture, fixtures and equipment 3 to 5
Transportation and other equipment 5

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

Fully depreciated assets are retained in the accounts until they are no longer in use and no further
charge for depreciation is made in respect of those assets.

When assets are retired or otherwise disposed of, the cost and the related accumulated
depreciation and any impairment in value are removed from the accounts. Any resulting gain or loss
is recognized in profit or loss.
 - 12 -

Interest in a Joint Operation

A joint arrangement is an arrangement whereby the parties are bound by a contractual
arrangement and such contractual arrangement gives two or more of those parties joint control of
the arrangement. A joint arrangement is either a joint operation or joint venture.

Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require the unanimous consent of the parties sharing
control.

The considerations made in determining significant influence or joint control are similar to those
necessary to determine control over subsidiaries.

The Company accounted for its interest in David M. Consunji, Inc. (DMCI or the “Developer”) as joint
operation, whereby it contributed parcel of land for development into residential units (see Note
22).

A joint operation involves the use of assets and other resources of the Company and other venturers
rather than the establishment of a corporation, partnership or other entity. The Company accounts
for the assets it controls, and the liabilities and expenses it incurs, and the share of the income that
it earns from the sale of goods, properties or services by the joint operation. The assets contributed
to the joint operation are measured at the lower of cost or NRV.

Impairment of Nonfinancial Assets

The carrying amounts of nonfinancial assets are reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable. If any such indication
exists and when the carrying amounts exceed the estimated recoverable amounts, the assets or
cash-generating units are written down to their recoverable amounts. The recoverable amount of
the asset is the greater of the fair value less cost to sell or value in use. The fair value less cost to sell
is the amount obtainable from the sale of an asset in an arm’s-length transaction. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pretax discount
rate that reflects current market assessments of the time value of money and the risks specific to
the asset. For an asset that does not generate largely independent cash inflows, the recoverable
amount is determined for the cash-generating unit to which the asset belongs. Impairment losses
are recognized in profit or loss.

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. In such instance, the carrying amount of the asset is
increased to its recoverable amount. However, that increased amount cannot exceed the carrying
amount that would have been determined (net of depreciation and amortization for investment
properties and property and equipment) had no impairment loss been recognized for the asset in
prior years. Such reversal is recognized in profit or loss. After such reversal, the depreciation and
amortization are adjusted in future years to allocate the asset’s revised carrying amount, on a
systematic basis over its remaining useful life.
 - 13 -

Employee Benefits

Short-term Benefits. Short-term employee benefits are recognized as expense in the period when
the economic benefits are given. Unpaid benefits at the end of the accounting period are recognized
as accrued expense while benefits paid in advance are recognized as prepayment to the extent that
it will lead to a reduction in future payments. Short-term benefits given by the Company to its
employees include salaries and wages, social security contributions, short-term compensated
absences and non-monetary benefits.

Retirement Benefits. The retirement benefits cost is actuarially determined using the projected unit
credit method. This method reflects services rendered by employees to the date of valuation and
incorporates assumptions concerning employees’ projected salaries. The calculation of defined
benefit liability is performed by a qualified actuary.

The Company recognizes current service costs, past service costs and interest expense on the
retirement benefits liability in profit or loss. Interest expense is calculated by applying the discount
rate to the retirement benefits liability at the beginning of the year, taking into account any changes
in the defined liability during the period as a result of benefit payments.

Remeasurements of the retirement benefits liability, which pertains to actuarial gains and losses,
are recognized immediately in other comprehensive income in the period in which they arise.

Remeasurements are not reclassified to profit or loss in subsequent periods.

Plan assets are assets that are held in trust and managed by a trustee bank. Plan assets are not
available to the creditors of the Company, nor can they be paid directly to the Company. The fair
value of the plan assets is based on the market price information. When no market price is
available, the fair value of plan assets is estimated by discounting expected future cash flows using a
discount rate that reflects both the risk associated with the plan assets and the maturity or expected
disposal date of those assets (or, if they have no maturity, the expected period until the settlement
of the related obligations). If the fair value of the plan assets is higher than the present value of the
defined benefit obligation, the measurement of the resulting defined benefit asset is limited to the
present value of economic benefits available in the form of refunds from the plan or reductions in
future contributions to the plan.

The net retirement benefits liability recognized by the Company is the present value of the defined
benefit obligation reduced by the fair value of plan asset. The present value of defined benefit
obligation is determined by discounting the estimated future cash outflows using risk-free interest
rates of government bonds that have terms to maturity approximating the terms of the related
retirement benefits liability.

Actuarial valuations are made with sufficient regularity so that the amounts recognized in the
separate financial statements do not differ materially from the amounts that would be determined
at the reporting date.
 - 14 -

Equity

Capital Stock and Additional Paid-in Capital (APIC). Capital stock is measured at par value for all
shares subscribed and/or issued. The subscribed capital stock is reported in equity at par less the
related subscription receivable not collectible currently. Incremental costs, net of tax, incurred that
are directly attributable to the issuance of new shares are recognized in equity as a reduction from
related APIC or retained earnings. Excess of proceeds or fair value of the consideration received over
par value is recognized as APIC.

Retained Earnings. Retained earnings represent the cumulative balance of the Company’s results of
operations, net of dividends. Retained earnings may also include the effect of changes in accounting
policy as may be required by the standard’s transitional provision.

Other Comprehensive Loss. This pertains to the cumulative unrealized fair value loss on financial
assets at FVOCI and cumulative remeasurement gain or loss on the Company’s retirement benefits
liability arising from experience adjustments and changes in financial assumptions. Unrealized fair
value loss on financial assets at FVOCI and remeasurements of retirement benefits liability, and the
corresponding deferred tax component of the remeasurements of retirement benefits liability, are
recognized immediately in other comprehensive income and are included in equity. These are not
reclassified to profit or loss in subsequent periods.

Treasury Stock. Own equity instruments which are reacquired are recognized at cost and deducted
from equity. No gain or loss is recognized in the separate statement of comprehensive income on
the purchase, sale, issue or cancellation of the Company’s own equity instruments. Any difference
between the carrying amount and the consideration, if reissued, is recognized in APIC. Voting rights
related to treasury stock are nullified for the Company and no dividends are allocated to them.

Revenue Recognition
The Company generates revenue primarily from real estate sales. Other revenue sources include
rental income from investment properties and income from investing activities of the Company.

Revenue from Contracts with Customers. Revenue from contract with customers is recognized when
the performance obligation in the contract has been satisfied, either at a point in time or over time.
Revenue is recognized over time if one of the following criteria is met: (a) the customer simultaneously
receives and consumes the benefits as the Company performs its obligations; (b) the Company’s
performance creates or enhances an asset that the customer controls as the asset is created or
enhanced; or (c) the Company’s performance does not create an asset with an alternative use to the
Company and the Company has an enforceable right to payment for performance completed to date.
Otherwise, revenue is recognized at a point in time.

The Company also assesses its revenue arrangements to determine if it is acting as a principal or as
an agent. The Company has assessed that it acts as a principal in all of its revenue sources.

The following specific recognition criteria must also be met before revenue is recognized.

• Real Estate Sales. The Company assesses whether it is probable that the economic benefits will
flow to the Company when the contract price is collectible. Collectibility of the contract price is
demonstrated by the buyer’s commitment to pay, which is supported by the buyer’s initial and
continuous investments that motivate the buyer to honor its obligation. Collectibility is also
assessed by considering factors such as collections and credit standing of the buyer.
 - 15 -

The collectibility of the sales price is considered reasonably assured when a substantial portion
of the contract price is received and continuing payment is made by the buyer giving the buyer a
substantial stake in the property sufficient to motivate the buyer to fulfill its purchase
commitment.

Revenue from sales of completed real estate projects is generally accounted for using the full
accrual method.

Pending recognition of sale, cash received from buyers are presented as “Contract liabilities”
under “Accounts and other payables” account in the separate statements of financial position.
Collections for processing of deed of sale and other documents necessary in transferring titles to
real estate buyers are presented as “Deposits for document processing” under “Accounts and
other payables” in the separate statements of financial position.

For tax purposes, full recognition is applied when more than 25% of the selling price has been
collected in the year of sale. Otherwise, the installment method is applied.

• Management Fees. Management fees are recognized when related services are rendered.

Revenue from Other Sources. Revenue from other sources is recognized as follows:

• Rental Income. Rental income is recognized on a straight-line basis over the lease term.
Unearned rental income is included as part of “Others” under “Accounts and other payables”
account in the separate statements of financial position.

• Dividend Income. Dividend income is recognized on the date when the Company’s right to
receive payment is established.

• Interest Income. Interest income from financial assets at FVPL is included in the net fair value
gains (losses) on these assets. Interest income on financial assets at amortized cost calculated
using the effective interest method is recognized as interest income under revenue. Interest
income is calculated by applying the effective interest rate to the gross carrying amount of a
financial asset except for financial assets that subsequently become credit-impaired. For credit-
impaired financial assets, the effective interest rate is applied to the net carrying amount of the
financial asset (after deduction of the loss allowance). Interest income is presented as such
where it is earned from financial assets that are held for cash management purposes. Any other
interest income is included in other income.

Other Income
The Company’s other sources of income are recognized as income when earned.

Contract Balances

• Receivables. A receivable represents the Company’s right to an amount of consideration that is

unconditional (i.e., only the passage of time is required before payment of the consideration is
due).

• Contract Assets. A contract asset is the right to a consideration in exchange for goods or services
transferred to a customer. If the Company performs by transferring goods or services to a
customer before the customer pays a consideration or before payment is due, a contract asset is
recognized for the earned consideration that is conditional.
 - 16 -

As at December 31, 2023 and 2022, the Company does not have outstanding contract assets.

• Contract Liabilities. A contract liability is the obligation to transfer goods or services to a

customer for which the Company has received consideration (or an amount of consideration is
due) from the customer. If a customer pays a consideration before the Company transfers goods
or services to the customer, a contract liability is recognized when the payment is made by the
customer or when the payment is due (whichever is earlier). Contract liabilities are recognized
as revenue as the Company performs its obligations under the contract. Contract liabilities also
include payments received by the Company from customers for which revenue recognition has
not yet commenced and payments in excess of revenue recognized based on POC.

As at December 31, 2023 and 2022, balances of contract liabilities are disclosed in Note 13.

• Cost to Obtain a Contract. If the Company expects to recover the incremental costs of obtaining
a contract with a customer, the costs are recognized as an asset. The Company has determined
that commissions paid to brokers and marketing agents on the sale of pre-completed real estate
units are deferred when recovery is reasonably expected and are charged to expense in the
period in which the related revenue is recognized as earned. Commission expense is included in
the “Selling and administrative expenses” account in the separate statements of comprehensive
income. Costs incurred prior to obtaining contract with customer are not capitalized but are
expensed as incurred.

• Contract Fulfillment Asset. Contract fulfillment costs are divided into: (i) costs that give rise to
an asset; and (ii) costs that are expensed as incurred. When determining the appropriate
accounting treatment for such costs, the Company first considers any other applicable
standards. If those standards preclude capitalization of a particular cost, then an asset is not
recognized under PFRS 15. If other standards are not applicable to contract fulfillment costs,
the Company applies the following criteria which, if met, result in capitalization: (i) the costs
directly relate to a contract or to a specifically identifiable anticipated contract; (ii) the costs
generate or enhance resources of the entity that will be used in satisfying (or in continuing to
satisfy) performance obligations in the future; and (iii) the costs are expected to be recovered.
The assessment of these criteria requires the application of judgment, in particular when
considering if costs generate or enhance resources to be used to satisfy future performance
obligations and whether costs are expected to be recoverable.

As at December 31, 2023 and 2022, the Company does not have cost to obtain a contract and
contract fulfillment asset.

Cost and Expense Recognition

Costs and expenses are recognized in profit or loss when a decrease in future economic benefits
related to a decrease in an asset or an increase in a liability has arisen that can be measured reliably.

Cost of Real Estate Sold. Cost of real estate sold is recognized in profit or loss upon sale and is
determined with reference to the specific costs incurred on the property, allocated to saleable area
based on relative size and takes into account the percentage of completion used for revenue
recognition purposes.

Selling and Administrative Expenses. Selling and administrative expenses constitute costs incurred to
sell and market the goods and costs of administering the business. These are recognized as expense
in the period when these are incurred.
 - 17 -

Foreign Currency Transactions and Translation

Transactions in currencies other than Peso are initially recorded using the exchange rate at the date
of the transactions. Monetary assets and liabilities denominated in foreign currencies are restated
using the closing exchange rate prevailing at the reporting date. Exchange gains or losses arising
from foreign exchange transactions are credited to or charged against operations for the year.

For income tax reporting purposes, foreign exchange gains or losses are treated as taxable income
or deductible expenses in the year such are realized.

Leases
The Company assesses whether the contracts is, or contains, a lease. To assess whether a contract
conveys the right to control the use of an identified assets for a period of time, the Company
assesses whether, throughout the period of use, it has both of the following:

i. The right to obtain substantially all of the economic benefits from the use of the identified asset;
and

ii. The right to direct the use of the identified asset.

If the Company has the right to control the use of an identified asset for only a portion of the term
of the contract, the contract contains a lease for that portion of the term.

The Company also assesses whether a contract contains a lease for each potential separate lease
component.

Leases where the Company retains substantially all the risks and benefits of ownership of the asset
are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are
added to the carrying amount of the leased asset and recognized on a straight-line basis over the
lease term on the same basis as rental income. Contingent rents are recognized as revenue in the
period in which these are earned.

Income Taxes

Current Tax. Current tax assets and liabilities 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. Deferred tax is provided on all temporary differences at the reporting date between
the tax bases of assets and liabilities and their 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, excess minimum corporate income tax (MCIT)
and net operating loss carryover (NOLCO) to the extent that it is probable that future taxable profit
will be available against which the deductible temporary differences, excess MCIT and NOLCO can
be utilized within the period allowed by the tax regulations.

The carrying amount of a deferred tax asset is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilized within the period allowed by the tax regulations. Unrecognized
deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has
become probable that future taxable profit will allow the deferred tax assets to be recovered.
 - 18 -

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

Offsetting. Current tax assets and current tax liabilities are offset, or deferred tax assets and
deferred tax liabilities are offset if, and only if, an enforceable right exists to set off the amounts and
it can be demonstrated without undue cost or effort that the Company plans either to settle on a
net basis or to realize the asset and settle the liability simultaneously.

Current and deferred tax are recognized in profit or loss, except when they relate to items that are
recognized in OCI or directly in equity, in which case, the current and deferred tax are also
recognized in OCI or directly in equity respectively.

Related Party Relationships and Transactions

Related party relationships exist when one party has the ability to control, directly or indirectly
through one or more intermediaries, the other party or exercise significant influence over the other
party in making financial and operating decisions. Such relationships also exist between and/or
among entities that are under common control with the reporting enterprise, or between and/or
among the reporting enterprise and its key management personnel, directors, or its stockholders.

A related party transaction is a transfer of resources, services or obligations between a reporting

entity and a related party, regardless of whether a price is charged.

Related party transactions are considered material and/or significant if i) these transactions amount
to 10% or higher of the Company’s total assets or, ii) there are several transactions or a series of
transactions over a 12-month period with the same related party amounting to 10% or higher of the
Company’s total assets. Details of transactions entered into by the Company with related parties are
reviewed by independent directors in accordance with the Company's related party transactions
policy.

Provisions

Provisions are recognized when the Company 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. Provisions are reviewed at each reporting date and adjusted to reflect the current best
estimate.

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

Events after the Reporting Date

Events after the reporting date that provide additional information about the Company’s separate
financial position as at the reporting date (adjusting events) are reflected in the separate financial
statements. Events after the reporting date that are not adjusting events are disclosed in the notes
to separate financial statements when material.
 - 19 -

Earnings Per Share (EPS)

The Company presents basic and diluted EPS data for its common shares.

Basic EPS is calculated by dividing the net income attributable to common shareholders of the
Company by the weighted average number of common shares issued and outstanding during the
year. There are no potential dilutive shares.

3. Significant Judgments, Accounting Estimates and Assumptions

The preparation of the Company’s separate financial statements requires management to make
judgments and estimates that affect the amounts reported in the separate financial statements and
accompanying notes. The judgments and estimates used in the separate financial statements are
based on management’s evaluation of relevant facts and circumstances as at the reporting date.

While the Company believes that the assumptions are reasonable and appropriate, significant
differences in the actual experience or significant changes in the assumptions may materially affect
the estimated amounts. Actual results could differ from such estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting
estimates are recognized in the year in which the estimate is revised if the change affects only that
year or in the year of the revision and future years if the change affects both current and future
years.

The Company believes that the following represent a summary of these significant judgments,
estimates and assumptions and the related impact and associated risks in the separate financial
statements:

Classifying Financial Instruments. The classification of a financial instrument largely depends on the
Company’s business model and its contractual cash flow characteristics.

Management has determined that the Company’s investments in quoted shares are acquired
principally for the purpose of selling in the near term; hence, the Company classified its investment
as financial asset at FVPL.

Management has determined that the Company’s investments in unquoted shares is to be held
indefinitely and will be sold in response to liquidity requirements; hence, the Company classified its
investment as financial asset at FVOCI.

Classifying Interest in a Joint Operation. The Company has, after considering the structure and form
of the arrangement by the parties in the contractual arrangement and the Company’s rights and
obligations arising from the arrangement, classified its interest in a joint arrangement with the
Developer under PFRS 11, Joint Arrangements, as a joint operation. As a consequence, the
Company accounts for the assets, liabilities, revenues and expenses relating to its interest in the
joint operation only to the extent of the Company’s interest in the joint operation (see Note 22).

Determining Control over Investee Companies. Control over an investee is presumed to exist when
an investor is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee.

Management has determined that the Parent Company has control over the financial and operating
policies of CCPC through representation on the BOD.
 - 20 -

Classifying a Property. The Company determines whether a property is classified as real estate
inventories, investment properties or property and equipment:

• Real estate inventories comprise properties that are held for sale in the ordinary course of
business. Principally, these are condominium units and residential properties that the Company
develops and intends to sell before or on completion of construction.

• Investment properties consist of properties which are not occupied substantially for use by, or
in the operations of, the Company, nor for sale in the ordinary course of business, but are held
primarily to earn rental income and capital appreciation.

• Property and equipment are tangible items that are held for use in the production or supply of
goods or services and are expected to be used for more than one period. These are properties
which are owner-occupied and are substantially for use of the Company or in the operations.

Determining the Highest and Best Use of Investment Properties. The Company determines the
highest and best use of its investment properties when measuring fair value. In making its judgment,
the Company takes into account the use of the investment properties that is physically possible,
legally permissible and financially feasible. The Company has determined that the highest and best
use of the investment properties is their current use.

The fair value of the investment properties is disclosed in Note 9.

Assessing Contingencies. The Company is a party to certain lawsuits or claims arising from the
ordinary course of business. However, the Company’s management and legal counsel believe that
the eventual liabilities under these lawsuits or claims, if any, will not have a material effect on the
separate financial statements. Accordingly, no liability for probable losses arising from contingencies
was recognized in the separate financial statements as at December 31, 2023 and 2022.

Identifying Performance Obligation. The Company has various contracts to sell covering houses and
condominium units. The Company concluded that there is one performance obligation in each of
these contracts because the Company has the obligation to deliver the house and the condominium
units duly constructed in a specific lot and fully integrated into the land in accordance with the
approved plan. Included also in this performance obligation is the Company’s service to transfer the
title of the real estate unit to the customer.

Determining Revenue and Cost Recognition. Selecting an appropriate revenue recognition method
for a particular real estate transaction requires certain judgments based on the buyer’s commitment
on the sale which may be ascertained through the significance of the buyer’s initial investment and
completion of development. The Company concluded that revenue for real estate sales for
completed real estate projects is to be recognized at a point in time, when control is transferred.
The control is transferred when the customer has accepted the asset and the customer acceptance
of an asset may indicate that it has obtained the ability to direct the use of, and obtain substantially
all of the remaining benefits from, the asset.

The amounts of real estate sales and cost of real estate sold are disclosed in Notes 17 and 18,
respectively.

Classifying Lease Commitment. The Company has entered into lease agreements for its office
building and condominium units. The Company has determined, based on the evaluation of terms
and conditions of agreement, that the lessor retains all the significant risks and benefits of
ownership related to the leased properties. Accordingly, the agreements are accounted for as
operating leases.
 - 21 -

The amount of rental income is disclosed in Note 22.

Assessing ECL. While cash and cash equivalents, refundable deposits and construction bond are also
subject to the impairment requirements of PFRS 9, the assessed impairment loss is not material.

Trade Receivables (Excluding Installment Contracts Receivable). The Company applies the simplified
approach in measuring ECL which uses a lifetime expected loss allowance for all trade receivables.
To measure the ECL, trade receivables have been grouped based on shared credit risk characteristics
and the days past due.

The expected loss rates are initially based on the Company’s historical default rates. These historical
default rates are adjusted to reflect current and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle the receivables. The Company has identified
macroeconomic factors that are relevant, and accordingly adjusts the historical loss rates based on
expected changes in these factors.

The assessment of the correlation between historical default rates, forecast economic conditions
and ECL is a significant estimate. The amount of ECL is sensitive to changes in circumstances and of
forecast economic conditions. The Company’s historical credit loss experience and forecast of
economic conditions may also not be representative of customer’s actual default in the future.

Installment Contracts Receivable and Other Financial Assets at Amortized Cost. The Company applies
the general approach in measuring ECL which uses a 12-month or lifetime ECL for all installment
contracts receivable and other financial assets at amortized cost. To measure the ECL, these have
been grouped based on shared credit risk characteristics and the days past due.

The information about the ECL on the Company’s financial assets at amortized cost is disclosed in
Note 24. The amount of impairment loss on receivables is disclosed in Note 6. The carrying amounts
of these financial assets are disclosed in Notes 6 and 16.

Estimating Fair Value of Financial Instruments. When the fair values of financial assets and financial
liabilities recorded in the separate statement of financial position cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques, including
the net asset method. The inputs to this method are based on net asset value on the separate
statement of financial position, but where these are not feasible, a degree of judgment is required in
establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk
and volatility. Changes in assumptions relating to these factors could affect the reported fair value
of financial instruments.

The information on fair value measurement of financial assets and liabilities is disclosed in Note 25.

Estimating the NRV of Real Estate Inventories. The Company determines the NRV of real estate
inventories annually in accordance with the accounting policy stated in Note 2. In determining the
NRV, the Company considers the current selling price of the real estate inventories for sale and
estimated costs to complete and sell. The Company writes down the carrying amount of the real
estate inventories when the NRV becomes lower than the carrying amount.

The amount of real estate inventories carried at the lower of cost and NRV is disclosed in Note 7.
 - 22 -

Estimating the Useful Lives of Investment Properties and Property and Equipment. The useful lives
of these assets (excluding land and CIP) are estimated based on the period over which the assets are
expected to be available for use. The estimation of the useful lives is also based on a collective
assessment of industry practices, internal technical valuation and experience with similar assets.

The estimated useful lives are reviewed and updated if expectations differ from previous estimates
due to physical wear and tear, technical or commercial obsolescence, or legal or other limitations on
the use of the assets. It is possible, however, that future results of operations could be materially
affected by changes in estimates brought about by changes in these factors and circumstances.

There were no changes in the estimated useful lives of these assets in 2023 and 2022. The carrying
amounts of investment properties and property and equipment are disclosed in Notes 9 and 10,
respectively.

Determining the Fair Value of Investment Properties. Investment properties are measured at cost
but fair values are disclosed. The Group engaged external qualified appraiser to determine the fair
value of its investment properties. The fair values of investment properties were based on the
valuation performed in 2022 using appropriate valuation techniques. The fair values of land and
condominium units and parking slots were determined using market data approach while fair values
of ambulatory clinic were determined using depreciated replacement cost. Market data approach
involves the comparison of the land to those that are more or less located within the vicinity of the
appraised property and are subject of recent sales and offerings. If there is limited data within the
area, the independent appraiser considers the expansion of the research on properties considered
comparable. Adjustments were made to arrive at the market value by considering the location, size,
shape, utility, desirability and time element. Depreciated replacement cost involves calculating the
current replacement cost of the assets less deductions for physical deterioration and all relevant
forms of obsolescence. The valuation techniques and inputs used in the fair value measurement of
investment properties are disclosed in Note 9 to the separate financial statements.

The Company did not obtain an appraisal valuation as at December 31, 2023 because the Company
has assessed that the fair value of the investment properties as at December 31, 2022 did not
materially differ from the amounts reported as at December 31, 2023. The latest independent
appraiser’s report was dated in October 2022.

For the purpose of fair value disclosures, the Company has determined the nature, characteristics
and risks of the investment properties and the level of the fair value hierarchy.

Details of investment properties are disclosed in Note 9.

Assessing the Impairment of Nonfinancial Assets. The Company assesses impairment on its
nonfinancial assets whenever events or changes in circumstances indicate that the carrying amount
of the assets or group of assets may not be recoverable. The relevant factors that the Company
considers in deciding whether to perform an asset impairment review include the following:

• Significant underperformance of a business in relation to expectations;

• Significant negative industry or economic trends; and
• Significant changes or planned changes in the use of the assets.

Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is
recognized. Recoverable amounts are estimated for individual assets or, if it is not possible, for the
cash-generating unit to which the asset belongs. Recoverable amount represents the greater of the
fair value less cost to sell and the value in use.
 - 23 -

No provision for impairment loss was recognized on nonfinancial assets in 2023, 2022 and 2021.
The carrying amounts of the Company’s property and equipment, investments in subsidiaries, and
other assets (excluding construction bond and refundable deposits) are disclosed in Notes 8, 10, 11
and 12.

Allowance for losses on and carrying amount of investment properties are disclosed in Note 9.

Reversal of allowance for impairment losses of investments in subsidiaries in 2022 is disclosed in

Note 11.

Determining the Retirement Benefits Liability. The determination of the obligation and costs of
retirement benefits is dependent on the assumptions used by the actuary in calculating such
amounts. These assumptions are described in Note 14 to the separate financial statements and
include, among others, discount rates and salary increase rates.

The amount of retirement benefits costs recognized and the carrying amount of retirement benefits
liability are disclosed in Note 14.

4. Cash and Cash Equivalents

This account consists of:

2023 2022
Cash in banks P
=143,626,624 =P78,749,261
Short-term placements 436,979,114 427,000,000
P
=580,605,738 =505,749,261
P

Cash in banks earn interest at prevailing bank deposit rates.

Short-term placements are made for varying periods of between one day and three months
depending on the immediate cash requirements of the Company, and earn interest at prevailing
short-term placement rates.

Interest income was derived from the following:

Note 2023 2022 2021

Cash and cash equivalents 20 P
=25,722,189 =8,775,362
P P
=2,533,355
Installment contracts receivable 6 7,198,612 9,797,911 9,809,777
Loans receivable 6 41,167 999,999 118,056
P
=32,961,968 =19,573,272
P =12,461,188
P
 - 24 -

5. Investments in Quoted Shares

This account pertains to marketable equity shares that are listed and traded in the PSE and
Singapore Stock Exchange, which are classified as financial assets at FVPL. The fair value of the
marketable equity securities amounted to P
=60.9 million and P
=127.2 million as at December 31, 2023
and 2022, respectively.

The fair values were determined based on the closing bid prices at the reporting date (Level 1
hierarchy).

Changes in fair value on investments in quoted shares resulted in unrealized loss of P

=6.4 million in
2023, and unrealized gain of P =5.3 million and P=32.5 million in 2022 and 2021, respectively
(see Note 20).

Sale of investments in quoted shares resulted in a realized gain of P =12.3 million and P
=9.3 million in
2023 and 2021, respectively, and a realized loss of P
=12.1 million in 2022 (see Note 20).

Dividend income from these securities amounted to P

=4.2 million, P
=7.9 million and P
=9.8 million in
2023, 2022 and 2021, respectively (see Note 11).

6. Receivables

This account consists of:

Note 2023 2022

Installment contracts receivable P
=48,194,476 =54,884,812
P
Loans receivable 10,295,375 –
Receivable from real estate buyers 1,743,562 5,144,792
Billed rental 22 1,707,535 1,707,535
Due from project developers 270,326 270,326
Others 7,779,545 8,558,178
69,990,819 70,565,643
Allowance for impairment losses (2,091,089) (2,874,159)
Total 67,899,730 67,691,484
Less noncurrent portion of installment
contracts receivable 38,470,836 44,338,092
Noncurrent portion of loans receivable 10,032,911 –
P
=19,395,983 =23,353,392
P

Installment Contracts Receivable

Installment contracts receivable pertain to real estate sales. These are collectible in various
installment periods of between one to 15 years and earn interest at 10% to 16%per annum.

Interest income earned from installment contracts receivable amounted to P

=7.2 million, P
=9.8 million
and P
=9.8 million in 2023, 2022 and 2021, respectively (see Note 4).

Receivable from Real Estate Buyers

Receivable from real estate buyers includes processing fees paid by the Company that are necessary
to transfer the title to the buyers which are chargeable to the buyers.
 - 25 -

Due from Project Developers

Due from project developers relates to collections of installment receivables by the project
developer which are not yet remitted to the Company.

Loans Receivable
The Company granted loans receivable to third parties.

In 2023, the Company entered into a loans and security agreement with a third party
(the “Borrower”). The loan has a term of 20 years, payable monthly with an annual interest at 6.50%
and is secured by a real estate.

In 2022, the Company fully collected the outstanding loans receivable as at December 31, 2021 from
a third party. The loan bore interest at 10% per annum and was secured by a surety of an individual
and pledged shares (common shares listed in the PSE) approximating 200% of the loan amount.

Movements in this account are as follows:

2023 2022
Balance at beginning of year P
=– P
=20,000,000
Loans granted 10,310,872 –
Collections (15,497) (20,000,000)
Balance at end of year 10,295,375 –
Less current portion 262,464 –
Noncurrent portion P
=10,032,911 =–
P

Interest income earned from the loans amounted to P

=41,167, P
=999,999, and P
=118,056 in 2023, 2022
and 2021, respectively (see Note 4).

Others
Others pertain to pass-through expenses paid by the Company to be collected from the relevant
third party.

Allowance for Impairment Losses

Details of allowance for impairment losses on receivables are as follows:

Note 2023 2022

Balance at beginning of year P
=2,874,159 P
=3,153,988
Write-off (311,834) (167,540)
Gain on recovery of receivables 20 (471,236) (112,289)
Balance at end of year P
=2,091,089 =2,874,159
P

7. Real Estate Inventories

Real estate inventories stated at cost consist of:

2023 2022
Houses P
=11,567,923 P
=12,630,687
Condominium units and parking slots 17,808,900 20,030,807
P
=29,376,823 =32,661,494
P
 - 26 -

Houses pertain to units in Palma Real Residential Estates with movements as follows:

Note 2023 2022

Balance at beginning of year P
=12,630,687 P
=18,172,893
Construction costs 6,830,323 10,058,266
19,461,010 28,231,159
Cost of houses sold 18 (7,893,087) (15,600,472)
Balance at end of year P
=11,567,923 =12,630,687
P

Condominium units and parking slots pertain to units in Cypress Towers with movements as follows:

Note 2023 2022

Balance at beginning of year P
=20,030,807 P
=18,979,294
Cost of condominium units and parking slots
sold 18 (1,495,181) (4,506,887)
Reclassification to investment properties 9 (847,783) –
Additions for renovation 121,057 –
Reclassification from investment properties 9 – 4,742,400
Addition from cancellations – 816,000
Balance at end of year P
=17,808,900 =20,030,807
P

8. Other Current Assets

This account consists of:

2023 2022
CWTs P
=28,569,929 P
=26,054,135
Prepayments:
Real property tax 1,585,501 1,089,108
Insurance 1,182,540 1,076,225
Others 111,920 154,263
Construction bond 1,131,900 1,131,900
Refundable deposits 980,731 937,381
Deferred input VAT 49,157 196,050
Advances to employees 77,593 264,968
Input VAT – 148,273
P
=33,689,271 =31,052,303
P
 - 27 -

9. Investment Properties

The composition of and movements in this account are as follows:

2023
Building and
Building
Land Improvements CIP Total
Cost
Balance at beginning of year P
=855,737,929 P
=190,436,177 P
=27,101,692 P
=1,073,275,798
Additions 3,194,601 289,274 517,009 4,000,884
Reclassification from inventory – 847,783 – 847,783
Reclassifications - others – 27,618,701 (27,618,701) –
Balance at end of year 858,932,530 219,191,935 – 1,078,124,465
Accumulated Depreciation and
Amortization
Balance at beginning of year – 68,393,356 – 68,393,356
Depreciation and amortization – 8,369,490 – 8,369,490
Balance at end of year – 76,762,846 – 76,762,846
Allowance for Losses 25,460,606 – – 25,460,606
Carrying Amount P
=833,471,924 P
=142,429,089 P
=– P
=975,901,013

2022
Building and
Building
Land Improvements CIP Total
Cost
Balance at beginning of year =858,783,693
P =195,899,641
P =22,757,672
P =1,077,441,006
P
Additions 1,985,256 326,430 4,344,020 6,655,706
Disposal (5,031,020) – – (5,031,020)
Reclassification – (5,789,894) – (5,789,894)
Balance at end of year 855,737,929 190,436,177 27,101,692 1,073,275,798
Accumulated Depreciation and
Amortization
Balance at beginning of year – 63,293,677 – 63,293,677
Depreciation and amortization – 6,147,173 – 6,147,173
Reclassification – (1,047,494) – (1,047,494)
Balance at end of year – 68,393,356 – 68,393,356
Allowance for Probable Losses 25,460,606 – – 25,460,606
Carrying Amount =830,277,323
P =122,042,821
P =27,101,692
P =979,421,836
P

The Company’s investment properties pertain to several parcels of land which are held for capital
appreciation and are located in Taguig and Batangas. Investment properties also include building
and building improvements located in Makati, which earn rental income.

In 2022, certain investment properties with aggregate carrying amount of P

=4.7 million were
reclassified to real estate inventories (see Note 7).

In 2022, the Company sold a property in Batangas for P

=31.4 million resulting in a gain on sale
amounting to P
=26.4 million (see Note 20).
 - 28 -

CIP
The Company’s CIP pertains to costs incurred for the construction of additional floor of the building
which was completed in 2023.

The retention payable under the “Accounts payable” account related to CIP amounted to
=2.2 million will be paid on subsequent period.
P

Fair Values
The Company’s investment properties have fair values aggregating P =4,967.9 million as at
December 31, 2023 and 2022. The Company did not obtain an appraisal valuation as at
December 31, 2023 because the Company has assessed that the fair value of the investment
properties as at December 31, 2022 did not materially differ from the amounts reported as at
December 31, 2023. The latest independent appraiser’s report was dated October 2022.

The fair values of the investment properties are categorized into Level 2 fair value hierarchy for land
and condominium units and Level 3 fair value hierarchy for building and building improvements.

Description of valuation techniques used and key inputs to valuation on investment properties are
as follows:

Market Data Approach. Market data approach is used to estimate valuation of land and
condominium units. It involves the comparison of the land and condominium units to those that are
more or less located within the vicinity of the appraised properties and are subject of recent sales
and offerings.

Adjustments were made to arrive at the market value by considering the location, size, shape,
utility, desirability and time element.

The key inputs to fair valuation are as follows:

• Price per sqm - estimated value prevailing in the real estate market depending on the location,
area, shape and time element.

• Value adjustments – adjustments are made to bring the comparative values in approximation to
the investment properties taking into account the location, size, time element, and terrain
among others.

Sensitivity Analysis. Significant increase (decrease) in price per square meter would result in a
significantly higher (lower) fair value measurement. Significant increase (decrease) in value
adjustments would result in a lower (higher) fair value measurement.

Depreciated Replacement Cost Method. Depreciated replacement cost method is used to estimate
the building and building improvements by calculating the current replacement cost of the assets
less deductions for physical deterioration and all relevant forms of obsolescence.

Sensitivity Analysis. Generally, significant increases (decreases) in useful life of assets would result
in a significantly higher (lower) fair value measurement. Significant increases (decreases) in factors
that contributed in the physical deterioration and all relevant forms of obsolescence in isolation
would result in a significantly lower (higher) fair value measurement.
 - 29 -

Allowance for Probable Losses

The allowance for probable losses of P=25.5 million as at December 31, 2023 and 2022 represents
provision to cover losses on potential claims on certain parcels of land.

Amounts Recognized in Profit or Loss

Rental income amounted to P =19.9 million, P
=15.6 million and P=14.7 million in 2023, 2022 and 2021,
respectively (see Note 17). The related direct costs incurred pertain to depreciation and amortization
expense and real property taxes aggregating P=11.5 million, P=9.4 million and P
=9.7 million in 2023, 2022
and 2021, respectively.

Depreciation and amortization are recognized from the following:

Note 2023 2022 2021

Investment properties P
=8,369,490 =6,147,173
P =6,432,387
P
Property and equipment 10 3,411,883 3,170,100 2,380,472
P
=11,781,373 =9,317,273
P =8,812,859
P

Depreciation and amortization on investment properties and property and equipment are
recognized under “Direct costs” and “Selling and administrative expenses”, respectively.

10. Property and Equipment

The composition of and movements in this account are as follows:

2023
Office Furniture, Transportation
Fixtures and and Other
Note Equipment Equipment Total
Cost
Balance at beginning of year P
=9,494,519 P
=48,566,075 P
=58,060,594
Additions 443,086 10,050,318 10,493,404
Retirement – (16,481,986) (16,481,986)
Disposal – (4,008,929) (4,008,929)
Balance at end of year 9,937,605 38,125,478 48,063,083
Accumulated Depreciation
Balance at beginning of year 8,883,755 39,937,907 48,821,662
Depreciation 9 382,844 3,029,039 3,411,883
Retirement – (16,481,986) (16,481,986)
Disposal (4,008,929) (4,008,929)
Balance at end of year 9,266,599 22,476,031 31,742,630
Carrying Amount P
=671,006 P
=15,649,447 P
=16,320,453
 - 30 -

2022
Office
Furniture, Transportation
Fixtures and & Other
Note Equipment Equipment Total
Cost
Balance at beginning of year =8,940,025
P =41,699,111
P =50,639,136
P
Additions 554,494 6,866,964 7,421,458
Balance at end of year 9,494,519 48,566,075 58,060,594
Accumulated Depreciation
Balance at beginning of year 8,594,881 37,056,681 45,651,562
Depreciation 9 288,874 2,881,226 3,170,100
Balance at end of year 8,883,755 39,937,907 48,821,662
Carrying Amount =610,764
P =8,628,168
P =9,238,932
P

In 2023, the Company retired and disposed fully depreciated property and equipment with cost of
=20.5 million.
P

Cost of fully depreciated assets still in use amounted to P

=27.2 million and P
=43.3 million as at
December 31, 2023 and 2022, respectively.

11. Investments in Subsidiaries

Details of this account are as follows:

2023 2022
Cost
Balance at beginning and end of year P
=563,270,422 =563,270,422
P
Allowance for Impairment Losses
Balance at beginning of year – (212,063,980)
Reversal of allowance for impairment losses – 212,063,980
Balance at end of year – –
Carrying Amount P
=563,270,422 =563,270,422
P

ACHC. ACHC was incorporated and registered with the SEC on August 28, 2019 and is engaged in
investing activities.

CCPC. CCPC was incorporated and registered with the SEC on September 3, 1996 and is engaged in
acquiring, developing and selling real estate properties. CCPC has completed projects in Palma Real
Residential Estates, located in Biñan, Laguna.

PLHI. PLHI was incorporated and registered with the SEC on April 11, 2001 and is engaged in
acquiring, developing and selling real estate properties. As at December 31, 2023, PLHI only holds
parcels of land for undeterminable future use.

HSAPI. HSAPI was incorporated and registered with the SEC on July 26, 1996 as an investment
holding company. HSAPI owns 100% interest ownership in FMCMI.
 - 31 -

FMCMI. FMCMI was incorporated and registered with the SEC on January 21, 1997 and is engaged in
providing and delivering medical and health care services. FMCMI has two clinics located in Makati
City and Sta. Rosa, Laguna.

The aggregate summarized financial information of the Company’s subsidiaries are as follows:

2023 2022 2021

Current assets P
=336,075,290 =P293,145,467 =P313,159,400
Noncurrent assets 423,563,160 421,346,516 422,466,875
Current liabilities 154,074,894 149,305,045 149,554,611
Noncurrent liabilities 20,464,062 19,601,362 22,754,856
Revenue 119,853,517 139,917,684 131,607,622
Net income 39,145,866 41,252,780 43,766,916
Total comprehensive income 39,513,917 42,268,768 49,481,289

In 2022, the management has assessed that the recoverable amount of the investments in
subsidiaries is higher than its original cost resulting to the reversal of allowance for impairment
losses of P
=212.1 million (see Note 20).

The recoverable amount pertains to the fair value less cost to sell of investments in subsidiaries as at
December 31, 2022, which is based on the most recent valuation of the subsidiaries’ investment
properties made by an independent appraiser in October 2022. Valuations were derived on the
basis of recent sales of comparable properties in the same area as the investment properties and
taking into account the economic conditions prevailing at the time the valuations are made and
comparability of similar properties sold with the property being valued. The fair value of
subsidiaries’ investment properties was measured using Level 2 category.

Dividend income was derived from the following:

Note 2023 2022 2021

Quoted shares 5 P
=4,218,762 =7,917,103
P =9,762,622
P
Subsidiaries – 28,846,154 12,500,000
Unquoted shares 12 – – 3,636,187
P
=4,218,762 =36,763,257
P =25,898,809
P

12. Other Noncurrent Assets

This account consists of:

Note 2023 2022

Investment in unquoted shares P
=15,344,659 =15,344,659
P
Deposits for stock subscription 16 2,866,376 2,866,376
Deferred input VAT 94,218 46,995
Others 1,216,434 1,216,434
P
=19,521,687 =19,474,464
P
 - 32 -

Investment in Unquoted Shares

This account consists of the Company’s investment in the unquoted shares of stock of Asian Alliance
Holdings & Development Corp, which are classified as financial assets at FVOCI. The fair value
amounting to P =15.3 million as at December 31, 2023 and 2022, respectively, has been determined
using the net asset method as valuation technique. The Company’s investment represents only a
minority interest in the investee company. Dividend income from investment in unquoted shares is
disclosed in Note 11.

There are no fair value changes in 2023 and 2022.

Management does not plan to sell or dispose of the shares within one year from the reporting date.

Sensitivity Analysis. Significant increase (decrease) in the net asset would result in a significantly
higher (lower) fair value measurement.

13. Accounts and Other Payables

This account consists of:

Note 2023 2022

Accounts payable P
=40,993,495 =40,875,164
P
Accrued expenses 11,007,240 14,578,950
Contract liabilities 8,563,846 11,307,616
Payable to directors and officers 16 6,888,504 8,936,037
Deposits for document processing 5,927,623 4,842,960
Statutory payable 4,209,348 3,614,864
Others 3,694,132 1,377,551
P
=81,284,188 =85,533,142
P

Accounts payable are normally noninterest-bearing and settled on 30 to 60-day credit term.

Accrued expenses consist mainly of utilities, communication, outsourced services and professional
fees which are normally settled in the following month.

Contract liabilities represent advances from customers and nonrefundable reservation fees received
from prospective buyers. The Company requires buyers to pay a minimum percentage of the total
selling price before they enter into a sale transaction. Collections from buyers which have not
reached the minimum required percentage are also treated as contract liabilities.

The amount of revenue recognized in 2023 and 2022 from contract liabilities as at December 31,
2022 and 2021 amounted to P
=3.4 million and P
=11.9 million, respectively.

Deposits for document processing represent collections for processing deed of sale and other
documents necessary in transferring titles to real estate buyers.

Statutory payable includes amounts payable to government agencies such as BIR, SSS, PhilHealth
and Pag-IBIG which are normally settled in the following month.
 - 33 -

14. Retirement Benefits Liability

The Company values its defined benefit obligation using the projected unit credit method. This plan
provides for a minimum benefit of one-half month of final salary per year of credited service.
The benefit shall be payable to employees with at least five years of continuous service and attained
age of:

▪ 60 years;

▪ 50 years with completion of at least 10 years of service; or

▪ More than 60, on a case-to-case and year-to-year extension basis.

The last actuarial valuation report obtained was for as at December 31, 2023.

Retirement benefits costs presented as part of “Salaries, wages and other benefits” account under
“Selling and administrative expenses” in the separate statements of comprehensive income are as
follows:
2023 2022 2021
Interest cost P
=1,524,074 =P1,082,411 =P526,984
Current service cost 1,346,393 1,376,754 1,695,872
Return on asset (158,215) (102,887) (80,414)
Past service cost due to plan
amendment – 6,185,216 –
P
=2,712,252 =P8,541,494 =2,142,442
P

Net retirement benefits liability presented in the separate statements of financial position is as
follows:
2023 2022
Retirement benefits liability P
=23,970,785 =21,226,660
P
Fair value of plan assets (2,177,040) (2,203,546)
P
=21,793,745 =19,023,114
P

Movements in the present value of the retirement benefits liability are as follows:
2023 2022
Balance at beginning of year P
=21,226,660 P
=13,592,307
Interest cost 1,524,074 1,082,411
Current service cost 1,346,393 1,376,754
Remeasurement gain (126,342) (1,010,028)
Past service cost due to plan amendment – 6,185,216
Balance at end of year P
=23,970,785 =21,226,660
P

The fair value of plan assets as at December 31, 2023 is as follows:

2023 2022
Balance at beginning of year P
=2,203,546 =2,033,333
P
Return on asset 158,215 102,887
Remeasurement gain (loss) (184,721) 67,326
Balance at end of year P
=2,177,040 =2,203,546
P
 - 34 -

The principal assumptions used for the purposes of the actuarial valuations were as follows:

2023 2022
Discount rate 6.07% 7.18%
Expected rate of salary increases 5.00% 5.00%

Maturity analysis of the undiscounted benefit payments:

2023 2022
Less than five years P
=26,474,989 P
=23,283,353
Five years but less than 10 years – 1,435,291
More than 10 years 74,805,923 70,693,824

The retirement plan assets pertains to cash in bank amounting to P

=2.2 million as at December 31, 2023
and 2022.

The average duration of the retirement benefits liability is 18 years as at December 31, 2023 and
2022.

The plan exposes the Company to the following risks:

• Salary risk - any increase in the retirement plan participants’ salary will increase the retirement
plan’s liability

• Longevity risk - any increase in the plan participants’ life expectancy will increase the retirement
plan’s liability

• Interest rate risk - a decrease in bond interest rate will increase the present value of retirement
liability. However, this is partially counterbalanced by an increase in the return on the plan
assets

Sensitivity Analysis
The sensitivity analysis on retirement benefits liability based on reasonably possible changes of the
assumptions is as follows:

Change in assumption 2023 2022

Expected salary growth rate 1% P
=467,531 =301,296
P
-1% (379,396) (243,647)
Discount rate 0.5% (200,106) (127,279)
-0.5% 224,442 142,839
 - 35 -

Remeasurement Gain
The cumulative remeasurement gain on retirement benefits liability recognized in equity are as
follows:

Accumulated
Remeasurement Deferred Tax
Gain (see Note 23) Net
Balance as at December 31, 2020 =2,771,185
P =831,355
P =P1,939,830
Remeasurement gain 1,860,482 465,120 1,395,362
Change in tax rate – (138,560) 138,560
Balance as at December 31, 2021 4,631,667 1,157,915 3,473,752
Remeasurement gain 1,077,354 269,339 808,015
Balance as at December 31, 2022 5,709,021 1,427,254 4,281,767
Remeasurement loss (58,379) (14,595) (43,784)
Balance as at December 31, 2023 P
=5,650,642 P
=1,412,659 P
=4,237,983

15. Equity

Capital Stock
Details of the Company’s capital stock with P
=0.10 par value as at December 31, 2023 and 2022 are
as follows:

Shares Amount

Authorized 24,000,000,000 =2,400,000,000

P

Issued and Outstanding

Balance at beginning and end
of year 19,775,232,460 =1,977,523,246
P

Treasury stock - at cost

Balance at beginning and end
of year (4,815,232,510) (481,523,251)

14,959,999,950 =1,495,999,995
P

APIC amounted to P
=118.6 million as at December 31, 2023 and 2022.

The Company has 363 and 365 shareholders as at December 31, 2023 and 2022, respectively.

On February 28, 2023, the Company’s BOD approved the declaration of stock dividends amounting to
=150.0 million, subject to compliance with regulatory requirements.
P

Capital Management
The primary objective of the Company’s capital management is to ensure that it maintains a strong
credit standing and stable capital ratios in order to support its business and maximize shareholder
value. The Company maintains its current capital structure and will make adjustments, if necessary,
in order to generate a reasonable level of returns to stockholders over the long term. No changes
were made in the objectives, policies or processes during the year.
 - 36 -

The Company considers the equity presented in the separate statements of financial position as its
core capital.

The Company monitors capital using debt to equity ratio, which is total debt divided by total equity.
The debt-to-equity ratio as at December 31, 2023 and 2022, are as follows:

2023 2022
Debt P
=112,766,656 =114,944,450
P
Equity 2,321,555,154 2,307,718,416
Debt-to-Equity Ratio 0.05:1 0.05:1

Debt is composed of all liabilities while equity includes capital stock, additional paid-in capital,
retained earnings and other comprehensive loss, less treasury stock.

Pursuant to the PSE's rules on minimum public ownership, at least 10% of the issued and
outstanding shares of a listed company must be owned and held by the public. The public ownership
is about 18.4% and 19.2% as at December 31, 2023 and 2022, respectively.

The Company reviews its capital structure on an annual basis. As part of this review, the Company
considers the cost of capital and the risks associated with it.

16. Related Party Transactions

The following table summarizes the Company’s transactions with its related parties and outstanding
balances as at and for the years ended December 31, 2023 and 2022:

Amounts of Transactions Outstanding Balances

Note Nature of Transactions 2023 2022 2023 2022
Related Party

Advances for working

Due from Subsidiaries capital P
=– P
=– P
=72,477,186 P
=72,540,431

Deposits for Stock

Subscription
PLHI 12 Deposits P
=– P
=– P
=2,866,376 P
=2,866,376

Accounts and Other Payables 13

Directors and officers Directors and officers
profit sharing
19 remuneration P
=6,888,504 P
=8,938,479
Payments (8,936,037) (7,756,000) P
=6,888,504 P
=8,936,037

Terms and Conditions of Transactions with Related Parties

The outstanding balances are unsecured, noninterest-bearing, collectible or payable upon demand
and settled in cash.

The directors and officers are entitled to receive profit sharing based on the performance by the
Company.
 - 37 -

Deposits for Stock Subscription

Deposits for stock subscription are to be capitalized into investment in subsidiaries once shares are
issued and received from PLHI.

Compensation of Key Management Personnel

Compensation of key management personnel, consisting of short-term and long-term salaries and
government mandated benefits, amounted to P
=9.8 million, P
=9.7 million and P
=8.7 million in 2023,
2022, and 2021, respectively.

17. Revenue

This account consists of:

2023
Investing Real Estate
Note Activities Activities Services Total
Recognized at a point in time:
Real estate sales P
=– P
=23,870,171 P
=– P
=23,870,171
Management fees 22 – – 7,200,000 7,200,000
Recognized over time -
Interest income 4 7,198,612 – – 7,198,612
Recognized from other sources:
Rental income 22 19,939,282 – – 19,939,282
Dividend income 11 4,218,762 – – 4,218,762
P
=31,356,656 P
=23,870,171 P
=7,200,000 P
=62,426,827

2022
Investing Real Estate
Note Activities Activities Services Total
Recognized at a point in time:
Real estate sales =P– P
=52,025,970 =–
P =52,025,970
P
Management fees 22 – – 7,200,000 7,200,000
Recognized over time -
Interest income 4 9,797,911 – – 9,797,911
Recognized from other sources:
Dividend income 11 36,763,257 – – 36,763,257
Rental income 22 15,647,904 – – 15,647,904
=62,209,072
P =52,025,970
P =7,200,000 P
P =121,435,042

2021
Investing Real Estate
Note Activities Activities Services Total
Recognized at a point in time:
Real estate sales =P– P
=42,439,965 =–
P =42,439,965
P
Management fees 22 – – 7,200,000 7,200,000
Recognized over time -
Interest income 4 9,809,777 – – 9,809,777
Recognized from other sources:
Dividend income 11 25,898,809 – – 25,898,809
Rental income 22 14,741,314 – – 14,741,314
=50,449,900
P =42,439,965
P =7,200,000 P
P =100,089,865
 - 38 -

18. Cost of Real Estate Sold

This account consists of:

Note 2023 2022 2021
Houses 7 P
=7,893,087 P
=15,600,472 P
=15,102,675
Condominium units and parking slots 7 1,495,181 4,506,887 3,400,000
P
=9,388,268 =20,107,359
P =18,502,675
P

19. Selling and Administrative Expenses

This account consists of:

Note 2023 2022 2021

Salaries, wages and other benefits P
=19,125,086 P
=23,842,953 P
=16,589,443
Outside services 7,087,561 7,398,604 5,547,387
Directors and officers profit sharing
remuneration 16 6,888,504 8,938,479 4,823,256
Meetings and seminars 5,465,762 4,126,661 3,331,977
Depreciation and amortization 9 3,411,883 3,170,100 2,380,472
Supplies 2,289,208 2,455,885 2,220,062
Professional fees 2,085,036 2,959,418 1,868,517
Repairs and maintenance 1,873,840 1,352,026 1,523,206
Utilities 1,861,166 1,680,621 1,629,869
Transportation and travel 1,179,968 2,618,432 1,164,356
Commissions 22 1,177,990 2,316,292 2,233,013
Insurance 1,695,125 1,414,624 1,608,888
Director’s fees 1,644,444 1,788,889 1,633,333
Taxes and licenses 760,443 725,899 1,199,241
Committee meetings 515,000 500,000 625,000
Listing fees 256,875 250,000 253,000
Others 6,353,988 5,038,981 4,011,207
P
=63,671,879 =70,577,864
P =52,642,227
P

Others pertain mainly to unrecoverable input VAT and association dues.

 - 39 -

20. Other Income (Charges)

This account consists of:

Note 2023 2022 2021

Interest income on: 4
Cash in banks and short-term
placements P
=25,722,189 =8,775,362
P =2,533,355
P
Loan receivable 41,167 999,999 118,056
Gain (loss) on:
Sale of investments in quoted
shares 5 12,278,632 (12,112,261) 9,325,360
Contract cancellations and
forfeitures 8,459 (1,396,098) 505,833
Sale of investment properties 9 – 26,401,480 –
Unrealized gain (loss) on changes in:
Fair value of investments in quoted
shares 5 (6,449,322) 5,307,031 32,450,740
Foreign exchange rates 970,289 5,172,968 585,074
Gain on reversal of allowance for
impairment losses on:
Receivables 6 471,236 112,289 –
Investment in subsidiaries – 212,063,980 –
Surcharge income 596,338 1,366,123 482,566
Others 2,121,117 1,635,925 1,034,710
P
=35,760,105 =248,326,798
P =47,035,694
P

Other income pertains to association dues and maintenance fees which are individually insignificant.

21. Earnings Per Share (EPS)

The calculation of the basic and diluted EPS is based on the following data:

2023 2022 2021

Net income for the year P
=13,880,522 P
=268,126,999 P
=63,385,064
Weighted average number of
ordinary shares outstanding 14,959,999,950 14,959,999,950 14,959,999,950
P
=0.00093 =0.01792
P =0.00424
P

The weighted average number of shares refers to shares in circulation during the period that is after
the effect of treasury stock.

As at December 31, 2023 and 2022, the Company has no dilutive or potential dilutive share.
 - 40 -

22. Significant Agreements

Operating Lease Agreements

The Company leased out certain commercial spaces of its building to several parties under various
cancellable and noncancellable operating lease agreements for periods between one to 10 years.
All leases include an annual escalation clause based on rental rates.

Security deposits amounting to P =4.7 million and P =4.1 million as at December 31, 2023 and 2022,
respectively, are noninterest-bearing and will be refunded at the end of the lease term.

Rental income recognized amounted to P=19.9 million, P

=15.6 million, and P
=14.7 million in 2023, 2022
and 2021 respectively, (see Note 17). Billed rental receivable amounted to P=1.7 million as at
December 31, 2023 and 2022 (see Note 6).

Future minimum lease receivables to be collected based on existing contracts are as follows:

2023 2022
Not later than one year P
=13,546,707 =P9,590,207
Later than one year but not later than five years 28,316,937 22,865,953
Beyond five years 10,436,914 22,440,571
P
=52,300,558 =54,896,731
P

Joint Operation Arrangement with DMCI

In 2005, the Company and Fort Bonifacio Medical Center, Inc. (FBMCI) entered into a Memorandum
of Agreement (the “Agreement”) with DMCI for the development and construction of three
condominium buildings to be called the Cypress Towers.

The Agreement has the following significant provisions, among others:

(a) The Company and FBMCI shall contribute the land;

(b) DMCI shall be responsible for the development, construction and sale of condominium units; and
(c) The Company and FBMCI’s share in the project is equivalent to 15.6% of the total condominium
units and parking slots.

The development and construction of the condominium buildings were completed and started selling
in 2008. Sales of condominium units and parking slots amounted to P =6.4 million, P
=17.0 million and
=12.2 million in 2023, 2022 and 2021, respectively. Cost of condominium units and parking slots sold is
P
disclosed in Note 7.

As at December 31, 2023 and 2022, there were no contingent liabilities and commitments with
respect to the joint venture agreements.

Marketing Agreement
Marketing of the projects is handled by several brokers and agents at various commission rates
based on the selling price.

The Company incurred commission expense amounting to P

=1.2 million, P
=2.3 million and P
=2.2 million
in 2023, 2022 and 2021 respectively (see Note 19).
 - 41 -

Management Services Agreement

The Company entered into management services agreement with a subsidiary to cover the cost of
backroom personnel and the related overhead. Under the terms, the Company shall bill the
subsidiary for the services rendered. Management fees amounted to P
=7.2 million in 2023, 2022
and 2021 (see Note 17).

23. Income Taxes

Current Tax
The Company’s current income tax expense represents MCIT in 2023, 2022 and 2021.

Deferred Tax
The components of the Company’s deferred tax assets and liability are as follows:

2023 2022
Deferred Tax Assets
Allowance for losses on:
Investment properties P
=6,365,152 =6,365,152
P
Receivables 522,772 718,540
Retirement benefits liability 5,448,437 4,755,779
Payable to directors and officers 1,722,126 2,234,620
Others 269,480 336,079
P
=14,327,967 =14,410,170
P

Deferred Tax Liabilities

Unrealized gross profit P
=4,780,650 =P4,992,559
Unrealized foreign exchange gain 242,572 1,293,242
P
=5,023,222 =6,285,801
P

The Company’s unrecognized deferred tax assets amounting P =831,859 and P =1.4 million as at
December 31, 2023 and 2022, respectively, pertaining to MCIT, which can be claimed as tax credit
against future income tax due, are as follows:

MCIT

Year Beginning Incurred Expired Balance Expiry Date

2023 =–
P =176,074
P =–
P =176,074
P 2026
2022 209,466 – – 209,466 2025
2021 446,319 – – 446,319 2024
2020 728,221 – (728,221) – 2023
=1,384,006
P =176,074
P (P
=728,221) =831,859
P

The presentation of provision for (benefits from) deferred income tax are as follows:

2023 2022 2021

Through profit or loss (P
=1,165,781) =833,974
P =2,732,077
P
Through other comprehensive income 14,595 269,339 326,560
(P
=1,151,186) =1,103,313
P =3,058,637
P
 - 42 -

The reconciliation between the provision for income tax based on statutory tax rate and the
effective income tax rate on income before income tax is as follows:

2023 2022 2021

Provision for income tax computed at
statutory tax rate P
=3,406,708 =67,428,073
P =16,580,180
P
Tax effects of:
Income subject to a final tax and
exempt from income tax (6,880,246) (11,824,794) (17,552,066)
Nondeductible expenses 3,043,775 734,927 645,504
Reversal of allowance for impairment
loss on investment in subsidiaries – (53,015,995) –
Nontaxable income – (561,611) –
Expired NOLCO – – 13,807,783
Expired MCIT 728,221 1,171,450 1,090,354
Changes in unrecognized deferred tax assets (552,147) (2,346,758) (16,686,453)
Change in tax rate – – 5,050,353
Provision for (benefit from) income tax
computed at effective tax rate (P
=253,689) =1,585,292
P 2,935,655

Under the “Corporate Recovery and Tax Incentives for Enterprises (the “Act”) which took effect on
July 1, 2020, domestic corporations are subject to 25% or 20% RCIT depending on the amount of
total assets and total amount of taxable income. In addition, MCIT shall be computed at 1% of gross
income for a period of three years until June 30, 2023 and will revert to 2% starting July 1, 2023.

24. Financial Instruments Risk Management Policies and Objectives

The Company’s financial assets comprise of cash and cash equivalents, receivables, due from
subsidiaries, refundable deposits and construction bond (presented under “Other current assets”
account in the separate statements of financial position) and investments in quoted and unquoted
shares. The Company’s financial liabilities comprise of accounts and other payables (excluding contract
liabilities, deposits for document processing and statutory payable), and security deposits. The main
purpose of these financial instruments is to finance the Company’s operations.

The main risks arising from the Company’s financial instruments are market risk, credit risk and
liquidity risk. The Company’s BOD and management review and approve the policies for managing
each of the risks summarized below.

Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. The Company is exposed to market risk specifically to foreign
currency risk and equity price risk. Financial instruments affected by market risk include cash and
cash equivalents, loans payable and equity investments.

The sensitivity analyses in the following sections relate to the financial position as at December 31,
2023 and 2022.
 - 43 -

The sensitivity of the relevant items in the separate statements of comprehensive income is the
effect of the assumed changes in respective market risks. This is based on the financial assets and
liabilities held as at December 31, 2023 and 2022.

Foreign Currency Risk. Foreign currency risk is the risk that the fair value or future cash flows of an
exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to
the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities
(when revenue or expense is denominated in a foreign currency).

The Company has transactional currency exposures arising from purchase and construction contract
transactions denominated in currencies other than the functional currency. The Company does not
enter into forward contracts to hedge currency exposures. To mitigate the Company’s exposure to
foreign currency risk, foreign currency cash flows and fluctuations in the foreign exchange rates are
monitored.

The carrying amounts of the Company’s foreign currency denominated monetary assets are as follows:

2023 2022
Philippine Peso Foreign Currency Philippine Peso Foreign Currency
Cash in banks P
=138,699,901 US$2,504,965 =70,825,209 US$1,262,032
P
Investments in quoted shares 37,608,876 SG$896,730 92,728,378 SG$2,230,923

For purposes of translating the outstanding balance of the Company’s foreign currency-
denominated monetary assets, the exchange rates applied were P
=55.37 per U.S. Dollar (USD) US$1
and P
=41.94 per Singapore Dollar (SGD) SG$1 as at December 31, 2023 and P =56.12 per US$1 and
=41.58 per SG$1 as at December 31, 2022.
P

Foreign Currency Sensitivity Analysis. The sensitivity analysis includes all of the Company’s foreign
currency denominated monetary assets. A positive number indicates an increase in income before
tax when the U.S. Dollar (USD) and the Singapore Dollar (SGD) strengthen by 7% and 12%,
respectively, against the relevant currency. For a 7% and 12% weakening of the USD and the SGD,
respectively, against the Peso, there would be an equal and opposite impact on the income before
tax.

The following table demonstrates the sensitivity to a 7% and 12% change in USD and SGD exchange
rates, respectively, with all other variables held constant:

Effect on Income Before Tax

2023 2022
Cash in banks P
=9,708,993 =2,833,008
P
Investments in quoted shares 4,513,065 927,284
P
=14,222,058 =3,760,292
P

Equity Price Risk. Equity price risk exposure relates to fluctuation in fair values as a result of changes
in market prices of investments in quoted shares arising from factors affecting all shares of stocks
traded in the market. The Company’s market risk policy requires it to manage such risk by setting
and monitoring objectives and constraints on investments.
 - 44 -

The following table demonstrates the sensitivity to a reasonably possible change in the stock price
of shares, with all other variables held constant, of the Company’s unrealized gain and loss on
investments in quoted shares:

Listed Domestic Shares Listed Foreign Shares

Change in Stock Effect on Income Change in Stock Effect on Income
Price Before Tax Price Before Tax
December 31, 2023 2% P
=206,511 3% P
=796,000
-2% (206,511) -3% (796,000)
December 31, 2022 8% =5,758,955
P 9% =6,676,443
P
-8% (5,758,955) -9% (6,676,443)

Credit Risk
Credit risk is the risk when a counterparty fails to fulfill its obligations to the Company.
Counterparties such as banks and customers who pay on or before due date have minimum risk
exposure because default in settling its obligations is remote. The Company deals only with
reputable banks and customers to limit this risk.

The table below shows the gross maximum exposure of the Company to credit risk before taking
into consideration collateral and other credit enhancements:

2023 2022
Cash and cash equivalents P
=580,605,738 P
=505,749,261
Receivables 69,990,819 70,565,643
Due from subsidiaries 72,477,186 72,540,431
Refundable lease deposit 980,731 937,381
Construction bond 1,131,900 1,131,900
P
=725,186,374 =650,924,616
P

Maximum Exposure to Credit Risk after Credit Enhancements

Maximum exposure to credit risk of financial assets is equivalent to their carrying values except for
installment contracts receivable and loans receivable. The table below shows the maximum
exposures to credit risk of the Company for installment contracts receivable and loans receivable,
after considering the effects of credit enhancements:

Maximum
Fair Value of Exposure to Financial Effect
December 31, 2023 Credit risk Collateral or Credit Risk of Collateral or
exposure relating to Carrying Credit after Credit Credit
balance sheet assets Amount Enhancement Enhancement Enhancement
Installment contracts
receivable P
=48,194,476 P
=65,988,000 P
=– P
=65,988,000
Loans receivable 10,295,375 7,912,000 2,383,375 7,912,000
P
=58,489,851 P
=73,900,000 P
=2,383,375 P
=73,900,000

Maximum
Fair Value of Exposure to Financial Effect
December 31, 2022 Credit risk Collateral or Credit Risk after of Collateral or
exposure relating to balance Carrying Credit Credit Credit
sheet assets Amount Enhancement Enhancement Enhancement
Installment contracts
receivable =54,884,812
P =75,210,339
P =–
P =75,210,339
P
 - 45 -

Credit Enhancements. For installment contracts receivable, title to condominium units and houses is
not transferred to the buyer until full payment has been made.

The loans receivable are secured by a pledge of a property. And upon default and breach of contract
by the borrower the Company has the rights to encumber the said property to satisfy the loans
(see Note 6).

Risk Management. Credit risk is managed on a group basis. The Company deals only with reputable
banks and customer to limit this risk. If customers are independently rated, these ratings are used.
Otherwise, if there is no independent rating, the Company assesses the credit quality of the
customer, taking into account its financial position, past experience and other factors. Individual
risk limits are set based on internal or external ratings in accordance with limits set by the
management. The compliance with credit limits by customers is regularly monitored by
management.

There are no significant concentrations of credit risk, whether through exposure to individual
customers, specific industry sectors and/or regions.

As at December 31, 2023 and 2022, the amount of cash and cash equivalents, refundable deposits
and construction bond are neither past due nor impaired and were classified as “High Grade”; due
from subsidiaries and receivables (excluding impaired) were classified as “Standard Grade”; and
impaired receivables were classified as “Substandard Grade”. The credit quality of such financial
assets at amortized cost is managed by the Company using the internal credit quality ratings as
follows:

▪ High Grade. Pertains to counterparty who is not expected by the Company to default in settling
its obligations, thus credit risk exposure is minimal. This normally includes large prime financial
institutions and companies. Credit quality was determined based on the credit standing of the
counterparty.

▪ Standard Grade. Pertains to counterparty with performance rating ranging from satisfactory to
acceptable and repayment capacity has to be monitored. These accounts are typically not
impaired as the counterparties generally respond to credit actions and update their payments
accordingly.

▪ Substandard Grade. Substandard grade financial assets are those which are considered
worthless. These are accounts which have the probability of impairment based on historical
trend.

Impairment of Trade Receivables (excluding Installment Contracts Receivable). An impairment

analysis is performed at each reporting date using a provision matrix to measure ECL. The provision
rates are based on days past due for groupings of customer segments with similar loss patterns. The
calculation reflects the probability-weighted outcome, the time value of money and reasonable and
supportable information that is available at the reporting date about past events, current conditions
and forecasts of future economic conditions.

Impairment of Installment Contracts Receivable and Other Financial Assets at Amortized Cost.
It is the Company’s policy to measure ECL on the above instruments on a 12-month basis. However,
when there has been a significant increase in credit risk since origination, the allowance will be
based on the lifetime ECL.
 - 46 -

The Company limits its exposure to credit risk by investing its cash and cash equivalents only with
banks that have good credit standing and reputation in the local and international banking industry.

For installment contracts receivable, loans receivable, dividend receivable, due from project
developer, due from subsidiaries, refundable deposits, construction bond, and other receivables,
credit risk is low since the Company only transacted with reputable companies with respect to these
financial assets or the financial assets have credit enhancements.

Using the ECL allowance, the credit risk exposure on the Company’s impairment of receivables
amounted to P
=2.1 million and P
=2.9 million in 2023 and 2022, respectively (see Note 6).

Liquidity Risk
Liquidity risk arises from the possibility that the Company may encounter difficulties in raising funds
to meet commitments from financial instruments. It may result from either the inability to sell
assets quickly at fair values or failure to collect from counterparty.

The Company’s objective is to maintain a balance between continuity of funding and flexibility
through related party advances and aims to manage liquidity as follows:

a. To ensure that adequate funding is available at all times;

b. To meet commitments as they arise without recurring unnecessary costs; and
c. To be able to assess funding when needed at the least possible cost.

The tables below summarize the maturity profile of the Company’s financial liabilities based on
undiscounted cash flows:

2023
Payable on 120 Days
Demand 30 Days 60 Days 90 Days and More Total
Accounts payable and other
liabilities* P
=6,888,504 P
=14,067,397 P
=40,993,495 P
=– P
=– P
=61,949,396
Security deposits – – – – 4,665,501 4,665,501
P
=6,888,504 P
=14,067,397 P
=40,993,495 P
=– P
=4,665,501 P
=66,614,897
*Excluding contract liabilities, deposits for document processing and statutory payable as at December 31, 2023.

2022
Payable on 120 Days
Demand 30 Days 60 Days 90 Days and More Total
Accounts payable and other
liabilities* P
=8,936,037 P=15,956,501 P
=40,875,164 P
=– P
=– P
=65,767,702
Security deposits – – – – 4,102,393 4,102,393
P
=8,936,037 P=15,956,501 P=40,875,164 P
=– P
=4,102,393 P
=69,870,095
*Excluding contract liabilities, deposits for document processing and statutory payable as at December 31, 2022.
 - 47 -

25. Fair Value of Financial Assets and Liabilities

The table below presents the carrying amounts and fair values of the Company’s financial assets and
financial liabilities.

2023 2022
Carrying Carrying
Amount Fair Value Amount Fair Value
Financial Assets
At amortized cost:
Cash and cash equivalents P
=580,605,738 P
=580,605,738 P
=505,749,261 P
=505,749,261
Receivables 67,899,730 67,899,730 67,691,484 67,691,484
Due from subsidiaries 72,477,186 72,477,186 72,540,431 72,540,431
Refundable deposits and
construction bond* 2,112,631 2,112,631 2,069,281 2,069,281
At FVPL -
Investments in quoted shares 60,931,520 60,931,520 127,152,069 127,152,069
At FVOCI -
Investments in unquoted shares 15,433,659 15,433,659 15,344,659 15,344,659
P
=799,460,464 P
=799,460,464 =790,547,185
P =790,547,185
P

Financial Liabilities
At amortized cost:
Accounts and other payables** P
=61,949,396 P
=61,949,396 P
=65,767,702 P
=65,767,702
Security deposits 4,665,501 4,665,501 4,102,393 4,102,393
P
=66,614,897 P
=66,614,897 =69,870,095
P =69,870,095
P
*Included under “Other current assets” account.
**Excluding contract liabilities, deposits for document processing and statutory payable.

The Company has determined that the carrying amounts of cash and cash equivalents, receivables,
due from subsidiaries, accounts and other payables (excluding contract liabilities, deposits for
document processing and statutory payable) reasonably approximate their fair values because these
are mostly short term in nature.

The fair values of installment contract receivables approximate its carrying amount as its interest
rate approximates the market rate for a similar instrument.

The fair value of refundable deposits, construction bond and security deposit approximates its
carrying amount. The management believes that the effect of discounting the future
receipts/payments from these financial instruments using the prevailing market rates is not
significant.

The fair values of investments in quoted shares are based on quoted price in active market (Level 1
hierarchy).

The fair value of investments in unquoted shares are determined using the net asset method
(Level 3 hierarchy).

The fair value hierarchy groups the financial instruments into Levels 1 to 3 based on the degree to
which the fair value is observable. There were no transfers to other levels in 2023 and 2022.
 BOA/PRC Accreditation No. 4782 BDO Towers Valero
August 16, 2021, valid until April 13, 2024 8741 Paseo de Roxas

REYES TACANDONG & Co.

FIRM PRINCIPLES. WISE SOLUTION S.
SEC Registration No. PP201007009 Makati City 1226 Philippines
Phone
Fax
: +632 8 982 9100
: +632 8 982 9111
Website : www.reyestacandong.com

REPORT OF INDEPENDENT AUDITORS

TO ACCOMPANY SEPARATE FINANCIAL STATEMENTS FOR FILING WITH THE
SECURITIES AND EXCHANGE COMMISSION

The Stockholders and the Board of Directors

CROWN EQUITIES, INC.
5th Floor Crown Center
158 Jupiter cor. N. Garcia Sts.
Bel-Air, Makati City

We have audited the accompanying separate financial statements of CROWN EQUITIES, INC.
(the “Company”) as at December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022
and 2021, on which we have rendered our report dated March 26, 2024.

In compliance with the Revised Securities Regulation Code Rule 68, we are stating that the Company has
three hundred fifty-two (352) and three hundred fifty-four (354) stockholders owning one hundred (100)
or more shares each as at December 31, 2023 and 2022, respectively.

REYES TACANDONG & CO.

WILSON P. TEO
Partner
CPA Certificate No. 92765
Tax Identification No. 191-520-944-000
BOA Accreditation No. 4782; Valid until April 13, 2024
BIR Accreditation No. 08-005144-014-2023
Valid until January 24, 2026
PTR No. 10072414
Issued January 2, 2024, Makati City

March 26, 2024

Makati City, Metro Manila

THE POWER OF BEING UNDERSTOOD

AUDIT I TAX I CONSULTING ■--
RSM
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
 BOA/PRC Accreditation No. 4782 BDO Towers Valero
August 16, 2021, valid until April 13, 2024 8741 Paseo de Roxas

REYES TACANDONG & Co.

FIRM PRINCIPLES. WISE SOLUTION S.
SEC Registration No. PP201007009 Makati City 1226 Philippines
Phone
Fax
: +632 8 982 9100
: +632 8 982 9111
Website : www.reyestacandong.com

REPORT OF INDEPENDENT AUDITORS

ON SUPPLEMENTARY SCHEDULE OF RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR
DIVIDEND DECLARATION

The Stockholders and the Board of Directors

CROWN EQUITIES, INC.
5th Floor Crown Center
158 Jupiter cor. N. Garcia Sts.
Bel-Air Makati City

We have audited in accordance with Philippine Standards on Auditing, the separate financial statements of
CROWN EQUITIES, INC. (the “Company”) as at December 31, 2023 and 2022 and for the years ended
December 31, 2023, 2022 and 2021 and have issued our report thereon dated March 26, 2024. Our audits
were made for the purpose of forming an opinion on the basic separate financial statements taken as a
whole. The accompanying Supplementary Schedule of Reconciliation of Retained Earnings Available for
Dividend Declaration is the responsibility of the Company’s management. This schedule is presented for
purposes of complying with the Revised Securities Regulation Code Rule 68, and is not part of the basic
separate financial statements. The information in this schedule has been subjected to the auditing
procedures applied in our audits of the basic separate financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic separate financial statements taken as a whole.

REYES TACANDONG & CO.

WILSON P. TEO
Partner
CPA Certificate No. 92765
Tax Identification No. 191-520-944-000
BOA Accreditation No. 4782; Valid until April 13, 2024
BIR Accreditation No. 08-005144-014-2023
Valid until January 24, 2026
PTR No. 10072414
Issued January 2, 2024, Makati City

March 26, 2024

Makati City, Metro Manila

THE POWER OF BEING UNDERSTOOD

AUDIT I TAX I CONSULTING ■--
RSM
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
 RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION
FOR THE REPORTING PERIOD ENDED DECEMBER 31, 2023

CROWN EQUITIES, INC.

5th Floor Crown Center, 158 Jupiter cor. N. Garcia Sts., Bel-Air Makati City

Amount
Retained earnings, beginning of reporting period P
=204,966,428

Add net income for the current year 13,880,522

Add: Category C.1: Unrealized income recognized in the profit or loss

during the reporting period (net of tax)
Unrealized fair value adjustment (mark to market gains) of
financial instruments at fair value through profit or loss (FVPL) 6,449,322
Add: Category C.2: Unrealized income recognized in the profit or loss
during the reporting period (net of tax)
Realized fair value adjustment (mark to market gains) of financial
instruments at fair value through profit or loss (FVPL) 12,278,632
Add/Less: Category F: Other items that should be excluded from the
determination of the amount of available for dividends
distribution
Net movement in deferred tax recognized in profit or loss (1,165,781)
Total retained earnings, end of the reporting period available for
dividend P
=236,409,123
 ANNEX B

2023 ANNUAL
SUSTAINABILITY
REPORT

CROWN EQUITIES, INC.

An annex to SEC Form 17-A in compliance with SEC Requirement

for Publicly Listed Companies
 ANNUAL SUSTAINABILITY REPORT 2023

CONTENTS

CONTENTS ....................................................................................................... 1
GENERAL INFORMATION ....................................................................................... 2
Contextual Information ....................................................................................... 2
Materiality Process ............................................................................................ 2
ECONOMIC ....................................................................................................... 5
Economic Performance ........................................................................................ 5
Direct Economic Value Generated and Distributed .................................................... 5
Anti – Corruption ............................................................................................... 7
Training on Anti – Corruption Policies and Procedures ................................................ 7
Incidents of Corruption ..................................................................................... 8
ENVIRONMENT .................................................................................................11
Solid and Hazardous Wastes .................................................................................11
Solid Waste ..................................................................................................11
Hazardous Waste ...........................................................................................12
Effluents........................................................................................................14
Environmental Compliance ..................................................................................16
Non – Compliance with Environmental Laws and Regulations .......................................16
SOCIAL ..........................................................................................................18
Employee Management.......................................................................................18
Employee Hiring and Benefits ............................................................................18
Employee Data ........................................................... Error! Bookmark not defined.
Employee Benefits .........................................................................................18
Employee Training and Development ......................................................................20
Labor – Management Relations ..............................................................................21
Diversity and Equal Opportunity ............................................................................22
Workplace Conditions, Labor Standards, and Human Rights ...........................................23
Labor Laws and Human Rights ............................................................................23
Customer Management .......................................................................................25
Customer Satisfaction .....................................................................................25
Customer Privacy ...........................................................................................26
Data Security................................................................................................27

1|Page
 ANNUAL SUSTAINABILITY REPORT 2023

GENERAL INFORMATION

Contextual Information

Company Details
Name of Organization Crown Equities, Inc.
Location of Headquarters Crown Center
158 Jupiter Corner N. Garcia Street, Makati City

Location of Operations Makati City and Sta. Rosa, Laguna

Report Boundary: This report covers the holding company, Crown Equities, Inc., as well
Legal Entities (e.g. Subsidiaries) as the following subsidiaries:
included in this Report
FortMED Medical Clinics Makati, Inc.
Crown Central Properties Corporation

Business Model, including Residential Property Development, Ambulatory Medical Services,

Primary Activities, Brands, Clinic Management, Laboratory & Diagnostic Services, Home Medical
Products, and Services Services, Executive Check – Up, and Corporate Onsite Medical
Services

Reporting Period FY 2023

Contact Person for this Eugene B. Macalalag
Report First Vice President

Materiality Process

Explain how you applied the materiality principle (or the materiality process) in identifying
your material topics.*
*
See GRI 102 – 46 (2016) for more guidance.

In preparing its Sustainability Report, the Organization made reference to the Global Reporting
Initiative (GRI) Standards, as well as the Securities and Exchange Commission (SEC)
Memorandum Circular No. 4, Series of 2019.

The Organization adopted the subsequent approach to identify material topics:

2|Page
 ANNUAL SUSTAINABILITY REPORT 2023

Material topics are identified

based on activities that are
critical to the operations of
Crown Equities, Inc. as a holding
company operating different
businesses.
Identified topics are assessed
and prioritized based on our
interpretation of what is
important to our stakeholders
Crown Equities, Inc. and to the Company.
performance with respect to
identified material aspects (also
known as our “Core Drivers”)
will be reviewed regularly by
the Board of Directors.

The identified material aspects

are vetted with and approved
by the Board of Directors to
Based on the agreed material
topics, management actions will
be identified and triggered as
4 Focus ensure alignment with the
Group’s Vision and Mission.
part of the business plan.

Figure 1 Materiality Assessment Approach

The organization has identified and prioritized the following Core Drivers for the Company and
its Stakeholders as duly reflected in its Sustainability Framework based on the Materiality
Assessment:

Investment Direct Economic Value Generated

Management Direct Economic Value Distributed

Good Anti – Corruption (2)

Governance Labor – Management Relations

Risk Occupational Health & Safety

Management Customer Privacy
Data Security

Responsible Solid & Hazardous Waste

Business Effluents
Environmental Compliance
Diversity, Equal Opportunity, & Anti – Discrimination

Customer Customer Satisfaction

Experience Customer Health & Safety

Employee Employee Hiring & Benefits

Welfare Employee Training & Development
Labor Standards & Human Rights

Figure 2 Sustainability Framework

3|Page
 ANNUAL SUSTAINABILITY REPORT 2023

Direct Economic Value Generated

Direct Economic Value Distributed
Labor Standards & Human Rights
Customer Satisfaction
Customer Privacy
Data Security
INFLUENCE ON STAKEHOLDERS

Anti – Corruption (2)

Solid & Hazardous Waste
Climate – Related Risks &
Effluents
Opportunities
Environmental Compliance
Air Pollutants (NOX, SOX, PM)
Employee Hiring & Benefits
Occupational Health & Safety
Employee Training & Development
Rights of Indigenous People
Labor - Management Relations
Customer Health & Safety
Diversity, Equal Opportunity, & Anti
– Discrimination

Proportion of Spending on Local

Suppliers Significant Impacts on Local
Resource Management (4) Communities
Ecosystem & Biodiversity Socio – Economic Compliance
GHG Public Policy LEGEND:
Marketing & Labeling
High
Medium
Moderate
IMPACT Low
Figure 3 Materiality Assessment Matrix

Data for some disclosure topics in this report are from specific subsidiary(ies) of the
Organization and not all Companies within the Group. This is reflective of its materiality and
relevance to the operation of the Organization and the maturity of data collection systems that
are currently in place. We have provided specific information on such disclosures in the coming
sections.

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 ANNUAL SUSTAINABILITY REPORT 2023

ECONOMIC

Economic Performance

Direct Economic Value Generated and Distributed

Disclosure Amount Units
Direct Economic Value Generated (Revenue) 204,190,367 PHP
Direct Economic Value Distributed:
a. Operating Costs 78,510,842 PHP
b. Employee Wages and Benefits 36,019,193 PHP
c. Payments to Suppliers, Other Operating Costs 29,931,021 PHP
d. Dividends given to Stockholders and Interest Payments
PHP
to Loan Providers
e. Taxes given to Government 17,769,896 PHP
f. Investments to Community (e.g. Donations, CSR) PHP

What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?
The impact of the economic The Stakeholders affected are: The Organization has
performance happens at The Shareholders and undertaken the initiative to
multiple levels including Investors of the conduct regular Executive
influence on the shareholder Organization; Committee (ExeCom)
value, amount of money The Employees of the meetings as part of the
spent to develop local Organization; and Organization’s performance
businesses (suppliers), The Community where the management system.
develop local community business operates. Similarly, the Organization
(CSR), and most importantly regularly conducts
ability to support nation Management Committee
building through taxes. (ManCom) meetings to
ensure issues raised to the
ExeCom have been clearly
identified and presented.

The Organization further

undertakes the initiative to
conduct regular engagement
with its Customers and
Employees to ensure a clear
and better understanding of
their needs and
expectations.

5|Page
 ANNUAL SUSTAINABILITY REPORT 2023

What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?

The revenue performance of The Stakeholders affected are: The Organization has
the Organization can be The Shareholders and undertaken multiple risk
affected by multiple factors, Investors of the management initiatives to
which include: Organization; overcome these risks. The
Market Volatility that The Employees of the Organization thoroughly
affects the investment plan Organization; and study and discuss proposed
of the Organization; The Community where the investment based on
Use of social media in business operates. collected empirical data.
expressing Customer and
Employee dissatisfaction; The Organization has
and undertaken the initiative to
Poor peer industry review regularly monitor and
resulting in low Client evaluate Customer and
engagement and retention. Employee satisfaction. The
Organization endeavors to
maintain its professional staff
through their continuous
professional education and
provision of incentives based
on their performance
appraisal.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?

There are opportunities to The Stakeholders affected are: The Organization has
further enhance the revenue The Shareholders and undertaken the initiative to
performance of the Investors of the carefully review collected
Organization based on: Organization; empirical data to ensure
Continuous market review The Employees of the sound judgement on
and study; and Organization; and proposed business
Benchmarking with relevant The Community where the investments.
top industry performers. business operates.
The Organization exploits the
opportunities presented
during the benchmark study
to ensure the Organization
retains its professional staff
and meet and exceed the
needs and expectations of its
Customers and Employees.

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Anti – Corruption

Training on Anti – Corruption Policies and Procedures

Disclosure Quantity Units
Percentage of Employees to whom the Organization’s Anti – Corruption
100.0 %
Policies and Procedures have been communicated to
Percentage of Business Partners to whom the Organization’s Anti –
100.0 %
Corruption Policies and Procedures have been communicated to
Percentage of Directors and Management that have received Anti –
100.0 %
Corruption Training
Percentage of Employees that have received Anti – Corruption Training 100.0 %

What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?

Acts of corruption has The Stakeholders affected are: The Organization has
significant impact on the The Shareholders and undertaken the initiative to
reputation, competitiveness, Investors of the establish and implement anti
and morale of the Organization; – corruption practices
Organization. The Employees of the through an Anti – Corruption
Organization; Policy incorporated in the
On the other hand, this can The Suppliers of the Avoiding Conflict of Interest
also impact performance of Organization; and Policy on Accountability,
suppliers with ethical The Customers of the Integrity, and Vigilance of
practices, diminish Organization; and the Code of Business Conduct
shareholder value, and lead to The Government and Ethics.
irreparable damage. Regulators.
These practices have been
reinforced through regular
training for the Employees
and annual review of the
Suppliers.

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What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?
While working with Small to The Stakeholders affected are: The Organization strives to
Medium Enterprises (SMEs) as The Shareholders and ensure the strict
Suppliers, the Organization Investors of the implementation of its
carries the risk of ensuring the Organization; Supplier accreditation
integrity of the adherence to The Employees of the process and more
the Organization’s anti – Organization; importantly, find ways to
corruption practices. The Suppliers of the reinforce it through trainings
Organization; and Supplier orientation.
The Customers of the
Organization; and
The Government
Regulators.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?
There is an opportunity to The Stakeholders affected are: The Organization has
intensify training on the anti – The Shareholders and undertaken the initiative to
corruption policies and Investors of the firmly entrench, regularly
practices of the Organization. Organization; practice, and regularly update
The Employees of the its anti – corruption policies
Organization; and practices. As such, the
The Suppliers of the Organization has further
Organization; undertaken the initiative to
The Customers of the intensify its training programs
Organization; and on anti – corruption.
The Government
Regulators.

The policy of the Organization on anti – corruption is embedded in the Code of Business Conduct and
Ethics (https://www.crownequitiesinc.com/code-of-business-conduct-and-ethics-2/), as well as
in the Conflict of Interest Policy (https://www.crownequitiesinc.com/company-policies-2/).

Incidents of Corruption
Disclosure Quantity Units
Number of Incidents in which Directors were Removed or Disciplined
0 #
for Corruption
Number of Incidents in which Employees were Dismissed or Disciplined
0 #
for Corruption
Number of Incidents when Contracts with Business Partners were
0 #
Terminated due to Incidents of Corruption

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What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?

Acts of corruption has The Stakeholders affected are: The Organization has
significant impact on the The Shareholders and undertaken the initiative to
reputation, competitiveness, Investors of the establish and implement anti
and morale of the Organization; – corruption practices
Organization. The Employees of the through an Anti – Corruption
Organization; Policy incorporated in the
On the other hand, this can The Suppliers of the Avoiding Conflict of Interest
also impact performance of Organization; and Policy on Accountability,
suppliers with ethical The Customers of the Integrity, and Vigilance of
practices, diminish shareholder Organization; and the Code of Business Conduct
value, and lead to irreparable The Government and Ethics.
damage. Regulators.
These practices have been
reinforced through regular
training for the Employees
and annual review of the
Suppliers.

What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?
While working with Small to The Stakeholders affected are: The Organization strives to
Medium Enterprises (SMEs) as The Shareholders and ensure the strict
Suppliers, the Organization Investors of the implementation of its
carries the risk of ensuring the Organization; Supplier accreditation
integrity of the adherence to The Employees of the process and more
the Organization’s anti – Organization; importantly, find ways to
corruption practices. The Suppliers of the reinforce it through trainings
Organization; and Supplier orientation.
The Customers of the
Organization; and
The Government
Regulators.

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What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?
There is an opportunity to The Stakeholders affected are: The Organization has
intensify training on the anti – The Shareholders and undertaken the initiative to
corruption policies and Investors of the firmly entrench, regularly
practices of the Organization. Organization; practice, and regularly
The Employees of the update its anti – corruption
Organization; policies and practices. As
The Suppliers of the such, the Organization has
Organization; further undertaken the
The Customers of the initiative to intensify its
Organization; and training programs on anti –
The Government corruption.
Regulators.

The policy of the Organization on anti – corruption is embedded in the Code of Business Conduct and
Ethics (https://www.crownequitiesinc.com/code-of-business-conduct-and-ethics-2/), as well as
in the Conflict of Interest Policy (https://www.crownequitiesinc.com/company-policies/).

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ENVIRONMENT

Solid and Hazardous Wastes

Solid Waste
Disclosure Quantity Units
Total Solid Waste Generated 3,300 Kg
Reusable 48 Kg
Recyclable 3,189 Kg
Composted Kg
Incinerated Kg
Residuals / Landfilled 63 Kg

What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?

The operations of the The Stakeholders affected are: The Organization has
Organization and its The Shareholders and undertaken the initiative to
Subsidiaries inevitably Investors of the manage the various waste
generates solid and hazardous Organization; streams of the Organization
wastes that, if improperly The Employees of the through the proper
managed, present potential Organization; and implementation of waste
impacts to human health and The Community where the segregation schemes that is
the immediate surroundings of business operates. suitable for the Organization.
the Community where the
Organization operates. The Organization has further
undertaken the initiative to
designate a dedicated
Pollution Control Officer
(PCO) who fulfills the
responsibility of managing
the Organization’s
compliance to all applicable
environmental laws and
regulations and of ensuring
the consistent
implementation of good
environmental practices in
handling and managing solid
and hazardous wastes.

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What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?

The incidental exposure of the The Stakeholders affected are: The Organization ensure its
Community where the The Shareholders and compliance to all applicable
Organization operates to Investors of the environmental laws and
improperly managed solid and Organization; regulations and has
hazardous wastes due to road The Employees of the undertaken the initiative to
traffic accident and accidental Organization; and designate a dedicated
release or spill may result into The Community where the Pollution Control Officer
long – term ill – health effects business operates. (PCO).
for exposed individuals and
may eventually lead into The designated PCO monitors
limited access to decent life / and ensures that good
livelihood. environmental practices are
being consistently
implemented in handling and
managing the generated solid
and hazardous wastes.

The designated PCO further

ensures that all generated
solid and hazardous wastes
are appropriately
transported, treated, and
disposed.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?

Exploring opportunities to The Stakeholders affected are: The Organization has

divert wastes away from the The Shareholders and undertaken the initiative to
landfill supports the aim of the Investors of the manage the various waste
Organization to minimize its Organization; streams of the Organization
environmental footprint. The Employees of the through the proper
Organization; and implementation of waste
The Community where the segregation schemes that is
business operates. suitable for the Organization.

Hazardous Waste
Disclosure Quantity Units
Total Weight of Hazardous Waste Generated 1,342 Kg
Total Weight of Hazardous Waste Transported 1,342 Kg

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What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?
The operations of the The Stakeholders affected are: The Organization has
Organization and its The Shareholders and undertaken the initiative to
Subsidiaries inevitably Investors of the manage the various waste
generates solid and hazardous Organization; streams of the Organization
wastes that, if improperly The Employees of the through the proper
managed, present potential Organization; and implementation of waste
impacts to human health and The Community where the segregation schemes that is
the immediate surroundings of business operates. suitable for the Organization.
the Community where the
Organization operates. The Organization has further
undertaken the initiative to
designate a dedicated
Pollution Control Officer
(PCO) who fulfills the
responsibility of managing
the Organization’s
compliance to all applicable
environmental laws and
regulations and of ensuring
the consistent
implementation of good
environmental practices in
handling and managing solid
and hazardous wastes.

What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?
The incidental exposure of the The Stakeholders affected are: The Organization ensures its
Community where the The Shareholders and compliance to all applicable
Organization operates to Investors of the environmental laws and
improperly managed solid and Organization; regulations and has
hazardous wastes due to road The Employees of the undertaken the initiative to
traffic accident and accidental Organization; and designate a dedicated
release or spill may result into The Community where the Pollution Control Officer
long – term ill – health effects business operates. (PCO).
for exposed individuals and
may eventually lead into The designated PCO monitors
limited access to decent life / and ensures that good
livelihood. environmental practices are
being consistently
implemented in handling and
managing the generated solid
and hazardous wastes.

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The designated PCO further

ensures that all generated
solid and hazardous wastes
are appropriately
transported, treated, and
disposed.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?
Exploring opportunities to The Stakeholders affected are: The Organization has
divert wastes away from the The Shareholders and undertaken the initiative to
landfill supports the aim of the Investors of the manage the various waste
Organization to minimize its Organization; streams of the Organization
environmental footprint. The Employees of the through the proper
Organization; and implementation of waste
The Community where the segregation schemes that is
business operates. suitable for the Organization.

Effluents

Disclosure Quantity Units

Total Volume of Water Discharges 3,168 Cubic Meters
Percent of Wastewater Recycled 100.0 %

What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?
Improperly managed effluents The Stakeholders affected are: The Organization ensures its
affects the Organization at The Shareholders and compliance to all applicable
multiple levels including the Investors of the environmental laws and
potential loss in revenues due Organization; regulations and has
to imposition of monetary The Employees of the undertaken the initiative to
fines and non – monetary Organization; and designate a dedicated
sanctions, the potential loss of The Community where the Pollution Control Officer
reputation of the Organization business operates. (PCO).
due to potential revocation of
Environmental Compliance The dedicated PCO monitors
Certificate (ECC) and License the water consumption of the
to Operate (LTO), and the Organization and ensures
potential impacts to the health that good environmental

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and safety of the Community practices are consistently

where the Organization being implemented.
operates.
The Organization has also
undertaken the initiative of
conducting regular
maintenance and monthly
cleaning of all sewage tanks,
as well as quarterly sampling
and analysis of its effluents
based on the requirements of
the Department of
Environment and Natural
Resources (DENR).

What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?

Scarcity of water supply in the The Stakeholders affected are: The Organization has
Community where the The Shareholders and undertaken the initiative to
Organization operates leading Investors of the recycle its generated
into limited access to clean Organization; wastewater for watering
and safe water. The Employees of the plants and disallow the use of
Organization; and pressurized water spray in
The Community where the cleaning its surroundings.
business operates.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?

Exploring opportunities to The Stakeholders affected are: The Organization has

increase the percentage of The Shareholders and undertaken the initiative of
wastewater being recycled by Investors of the conducting regular
the Organization. Organization; maintenance and monthly
The Employees of the cleaning of all sewage tanks,
Organization; and as well as quarterly sampling
The Community where the and analysis of its effluents
business operates. based on the requirements of
the Department of
Environment and Natural
Resources (DENR).

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Environmental Compliance

Non – Compliance with Environmental Laws and Regulations

Disclosure Quantity Units
Total Amount of Monetary Fines for Non – Compliance with
0.00 PHP
Environmental Laws and / or Regulations
No. of Non – Monetary Sanctions for Non – Compliance with
0 #
Environmental Laws and / or Regulations
No. of Cases Resolved through Dispute Resolution Mechanism 0 #

What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?

Compliance to all applicable The Stakeholders affected are: The Organization has
environmental laws and The Shareholders and undertaken the initiative to
regulations is imperative Investors of the ensure its compliance to all
license to operate as a Organization; applicable environmental
business. Failure to do so will The Employees of the laws and regulations by
impact the Organization’s Organization; and regularly cleaning of all
reputation, financial The Community where the sewage tanks, as well as
performance, livelihood of the business operates. effluent sampling and
Small and Medium Enterprise analysis in compliance to the
(SME) Suppliers, and the requirements of the
extended Community. Department of Environment
and Natural Resources
(DENR).

The Organization has also

undertaken preventive
actions of conducting regular
maintenance and monthly
cleaning of all sewage tanks,
as well as regular sampling
and analysis of its effluents
based on DENR requirements.

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What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?

Incidence of non – compliance The Stakeholders affected are: The Organization ensures its
to any applicable The Shareholders and compliance to all applicable
environmental laws and Investors of the environmental laws and
regulations affects the Organization; regulations and has
Organization at multiple levels The Employees of the undertaken the initiative to
including the potential loss in Organization; and designate a dedicated
revenues due to imposition of The Community where the Pollution Control Officer
monetary fines and non – business operates. (PCO).
monetary sanctions, the
potential loss of reputation of The dedicated PCO ensures
the Organization due to that good environmental
potential revocation of practices are consistently
Environmental Compliance being implemented.
Certificate (ECC) and License
to Operate (LTO), and the
potential impacts to the health
and safety of the Community
where the Organization
operates.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?

Benchmarking with the The Stakeholders affected are: The Organization ensures its
relevant industry top The Shareholders and compliance to all applicable
performers to identify means Investors of the environmental laws and
to further enhance the Organization; regulations and has
compliance of the Organization The Employees of the undertaken the initiative to
to all applicable environmental Organization; and designate a dedicated
laws and regulations. The Community where the Pollution Control Officer
business operates. (PCO).

The Organization further

undertakes the initiative to
safeguard its water and
wastewater systems and
pipelines through the inter-
connection to the sewer
treatment facility of Manila
Water.

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SOCIAL

Employee Management

Employee Hiring and Benefits

Disclosure Quantity Units
Total Number of Employees*
a. Number of Female Employees 41 #
b. Number of Male Employees 23 #
Attrition Rate** -62.42% Rate
Ratio of Lowest Paid Employee Against Minimum Wage 1:1.06 Ratio
*
Employees are individuals who are in employment relationship with the organization, according to national law or its application (GRI
Standards 2016 Glossary)
**
Attrition Rate = (No. of New Hires – No. of Turnover) / (Average of Total Number of Employees of Previous Year and Total Number of
Employees of Current Year)

Employee Benefits
% Female Employees % Male Employees Who
Disclosure Y/N
Who Availed this Year Availed this Year
SSS Y 34% 17%
PhilHeath Y
PAG – IBIG Y 22% 9%
Parental Leaves Y
Vacation Leaves Y 85% 83%
Sick Leaves Y 85% 83%
Medical Benefits Y 27% 26%
(Aside from PhilHealth)

Housing Assistance N 0 0
(Aside from PAG - IBIG)

Recruitment Fund N 0 0
(Aside from SSS)

Further Education Support N 0 0

Company Stock Options N 0 0
Telecommuting N 0 0
Flexible Working Arrangement
Y 0 0
(FWA)

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What is the Impact and

Where does it Occur? Which Stakeholders are
Management Approach
What is the Organization’s Affected?
Involvement in the Impact?

Non – competitive employment The Stakeholders affected are: The Organization ensures its
benefits limits the access to The Employees of the compliance to all applicable
decent life / livelihood for the Organization; and laws, rules and regulations of
Employees and may eventually The Community where the the Department of Labor and
result in a declining trend for business operates. Employment (DOLE) and all
the employment rate in the appropriate government
Community where the entities.
Organization operates its
business In addition, the Organization
has undertaken the initiative
for incentives and merit
increases based on the
annual performance review
of the Employee and the
Organization against set
goals.

What are the Risk/s Which Stakeholders are

Management Approach
Identified? Affected?

The overall competitiveness of The Stakeholders affected is The Organization has

the Organization is affected by the Employees of the undertaken the initiative to
Employees’ dissatisfaction and Organization. proactively allocate an
attrition / loss of Employees to annual budget for Employee
competition. engagement programs.

What are the Opportunity/ies Which Stakeholders are

Management Approach
Identified? Affected?
Benchmarking with the The Stakeholders affected are: The Organization has
relevant industry top The Employees of the undertaken the initiative to
performers to identify means Organization; and conduct an annual
to further enhance the The Community where the organizational climate survey
competitiveness of the business operates. for the periodic assessment
Organization. of Employees’ satisfaction.

The policy of the Organization on rewards / compensation for employees is embedded in the Manual on
Corporate Governance (https://www.crownequitiesinc.com/manual-on-corporate-governance/).

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Employee Training and Development

Disclosure Quantity Units

Total Training Hours Provided to Employees
a. Female Employees 0 Hours
b. Male Employees 0 Hours
Average Training Hours Provided to Employees
a. Female Employees Hours / Employee
b. Male Employees Hours / Employee

What is the Impact and Where does it Occur?

What is the Organization’s Involvement in Management Approach
the Impact?
Appropriately trained Employees increases the The Organization ensures that learning and
ability of the Organization to operate at the development opportunities are continuously
highest standard of business ethics, sustains being provided to all Employees. As such, the
data privacy, ensures a safe and healthy Organization has undertaken the initiative to
workplace, and improves customer include Training, Personal Development, &
satisfaction. Membership in Outside Organization in its
Code of Conduct & Policy Manual.

The management of the Organization ensures

that an approved budget is allocated for
training. However, due to the pandemic,
there were no appropriate training sessions
during the period.

What are the Risk/s Identified? Management Approach

The lack of commitment from Employees to The Organization ensures that learning and
proactively participate in the provided development opportunities are continuously
training. being provided to all Employees. As such, the
Organization has undertaken the initiative to
include Training, Personal Development, &
Membership in Outside Organization in its
Code of Conduct & Policy Manual.

What are the Opportunity/ies Identified? Management Approach

Appropriately trained Employees enhance the The management of the Organization ensures
operations of the Organization thru the that an approved budget is allocated for
establishment and implementation of training.
innovative work process.

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The policy of the Organization on training and development is embedded in the Policy and Data
relating to Health, Safety and Welfare of Employees, including Company Sponsored Trainings
(https://www.crownequitiesinc.com/company-policies/), as well as in the Manual on Corporate
Governance (https://www.crownequitiesinc.com/corporate-governance/).

Labor – Management Relations

Disclosure Quantity Units

% of Employees Covered with Collective Bargaining Agreements 0 %
No. of Consultations Conducted with Employees Concerning Employee –
0 #
related Policies

What is the Impact and Where does it Occur?

What is the Organization’s Involvement in Management Approach
the Impact?
The process of consulting Employees enhances The Organization ensures its compliance to all
access to decent life / livelihood of the applicable laws, rules and regulations of the
Employees and may eventually result in an Department of Labor and Employment (DOLE)
increasing trend for the employment rate in and all appropriate government entities.
the Community where the Organization
operates its business. In addition, the Organization has undertaken
the initiative to establish a grievance
procedure for the management of Employees
concern.

The Organization has also undertaken the

initiative to conduct an annual organizational
climate survey for the periodic assessment of
Employees’ satisfaction.

What are the Risk/s Identified? Management Approach

The overall competitiveness of the The Organization has undertaken the
Organization is affected by Employees’ initiative to proactively allocate an annual
dissatisfaction and attrition / loss of budget for Employee engagement programs.
Employees to competition.

What are the Opportunity/ies Identified? Management Approach

Benchmarking with the relevant industry top The Organization has undertaken the
performers to identify means to further initiative to conduct an annual organizational
enhance the competitiveness of the climate survey for the periodic assessment of
Organization. Employees’ satisfaction.

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The policy of the Organization on labor management is embedded in the Manual on Corporate
Governance (https://www.crownequitiesinc.com/corporate-governance/).
Diversity and Equal Opportunity

Disclosure Quantity Units

% of Female Workers in the Workplace 64 %
% of Male Workers in the Workplace 36 %
No. of Employees from Indigenous Community and / or Vulnerable
1 #
Sector*
*
Vulnerable sector includes elderly, persons with disabilities, vulnerable women, refugees, migrants, internally displaced persons, people
living with HIV and other diseases, solo parents, and the poor or the base of the pyramid (BOP: Class D and E).

What is the Impact and Where does it Occur?

What is the Organization’s Involvement in Management Approach
the Impact?
Diverse and equal employment opportunities The Organization ensures its compliance to all
enhances access to decent life / livelihood of applicable laws, rules and regulations of the
the Employees and may eventually result in an Department of Labor and Employment (DOLE)
increasing trend for the employment rate in and all appropriate government entities.
the Community where the Organization
operates its business. In addition, the Organization has undertaken
the initiative to establish and implement anti
– discrimination, anti – harassment, and
human rights policies and practices
embedded in its Code of Business Conduct
and Ethics, including employee training and
awareness programs.

What are the Risk/s Identified? Management Approach

Incidents of discrimination and harassment The Organization has undertaken the
may lead into the voluntary separation of initiative to establish and implement anti –
Employees. discrimination, anti – harassment, and human
rights policies and practices embedded in the
Support for Diversity and Non – Discrimination
and Employee Welfare of the Code of
Business Conduct and Ethics.

What are the Opportunity/ies Identified? Management Approach

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Appropriately informed Employees provides The Organization has undertaken the

assurance that the Organization is operating at initiative to establish and implement
a highest standard of business ethics. Employee training and awareness programs
on anti – discrimination, anti – harassment,
and human rights policies and practices
reflected in the Support for Diversity and Non
– Discrimination and Employee Welfare of the
Code of Business Conduct and Ethics.

The policy of the Organization on diversity and equal opportunity employment is embedded in the Code
of Business Conduct and Ethics (https://www.crownequitiesinc.com/code-of-ethics/), as well as in the
Manual on Corporate Governance (https://www.crownequitiesinc.com/corporate-governance/).

Workplace Conditions, Labor Standards, and Human Rights

Labor Laws and Human Rights

Disclosure Quantity Units
No. of Legal Actions or Employee Grievance involving Forced or Child
0 #
Labor

The organization has policies that explicitly disallow violations of labor laws and human rights
(e.g. harassment, bullying) in the workplace which is embodied in its code of ethics.
https://www.crownequitiesinc.com/code-of-ethics/

Topic Y/N If YES, Cite Reference in Company Policy

Forced Labor Y Employee Welfare of the Code of Business Conduct and Ethics
Child Labor N
Support for Diversity and Non – Discrimination of the Code of
Human Rights Y Business Conduct and Ethics
Employee Welfare of the Code of Business Conduct and Ethics

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What is the Impact and Where does it occur?

What is the Organization’s Involvement in Management Approach
the Impact?

Compliance to labor rules and regulations is The Organization ensures its compliance to
imperative license to do business. Failure to the laws, rules and regulations of the
do so will impact the Organization’s Department of Labor and Employment (DOLE)
reputation, financial performance, livelihood and all appropriate government entities. As
of the Small and Medium Enterprise (SME) such, the Organization has undertaken the
Suppliers and the extended Community. initiative to establish and implement a Code
of Business Conduct and Ethics.

The Organization has further undertaken the

initiative to establish and implement
Employees’ grievance mechanisms that will
enable the organization to collect and
analyze data for work – related issues and
concerns of the Employees.

What are the Risk/s Identified? Management Approach

Failure to comply with the relevant and The Organization ensures its compliance to
existing labor rules and regulations may result the laws, rules and regulations of the
into the loss of confidence of the Community Department of Labor and Employment (DOLE)
where the Organization operates and may and all appropriate government entities. As
eventually lead into the closure of business. such, the Organization has undertaken the
initiative to establish and implement a Code
of Business Conduct and Ethics.

What are the Opportunity/ies Identified? Management Approach

Benchmarking with other relevant organization The Organization has undertaken the
to ensure the implementation of the relevant initiative to establish and implement
industry’s good labor practices. Employees’ grievance mechanisms that will
enable the organization to collect and
analyze data for work – related issues and
concerns of the Employees.

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Customer Management

Customer Satisfaction
Did a Third Party Conduct the
Disclosure Score Customer Satisfaction Study
(Y/N)?
Customer Satisfaction Outstanding N

What is the Impact and Where does it Occur?

What is the Organization’s Involvement in Management Approach
the Impact?

The overall performance of the Organization is The Organization ensures the satisfaction of
affected by the satisfaction of its Customers. its Customers and has undertaken the
Customers experiencing inconvenience may initiative to internally measure patients’
become physically or verbally abusive that satisfaction for the services provided by
affects the servicing Employee(s) and exposed FortMed Medical Clinics Makati Inc.
them to physical, mental, and / or emotional
stress. The Organization further undertakes the
initiative to:
Establish and implement an internal
tracking system for timely resolution and
periodic verification of Customer
feedback;
Establish and implement Employee training
and awareness programs on Customer
engagement and complaints management;
and
Improve its Customer engagement and
complaints management processes and
procedures.

What are the Risk/s Identified? Management Approach

The overall business reputation of the The Organization has undertaken the
Organization is affected by the dissatisfied initiative to establish and implement an
Customers. internal tracking system for timely resolution
and periodic verification of Customer
feedback.

What are the Opportunity/ies Identified? Management Approach

Motivated and appropriately informed The Organization has undertaken the

Employees manifest excellent Customer initiative to establish and implement a

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service and provides assurance that the Customer service culture, including
Organization is operating at a highest standard conducting Employee training and awareness
of business ethics. programs on Customer engagement and
complaints management.

Customer Privacy
Disclosure Quantity Units
No. of Substantiated Complaints on Customer Privacy* 0 #
No. of Complaints Addressed 0 #
No. of Customers, Users, and Account Holders whose Information is
0 #
Used for Secondary Purposes
*
Substantiated complaints include complaints from Customers that went through the Organization’s formal communication channels and
grievance mechanisms as well as complaints that were lodged to and acted upon by government agencies.

What is the Impact and Where does it Occur?

What is the Organization’s Involvement in Management Approach
the Impact?

The Organization values the privacy of its The Organization ensures its compliance to
Clients and take it seriously to immediately the Data Privacy Act of 2012 (RA 10173) and
address incident(s) of breach(es) to Customer has undertaken initiatives to establish and
privacy as it affects the confidence of the implement Data Privacy statements and Data
Community where the Organization operates. Security practices, including the appointment
of a dedicated Data Privacy Officer (DPO).

The Organization has undertaken initiative to

ensure Customer and Client information is
only made available to the parties concerned
and is not being shared between and among
the companies within the Organization.

In addition, the Organization undertakes the

initiative to establish and implement
Employee training and awareness programs
on Customer privacy.

What are the Risk/s Identified? Management Approach

The overall business reputation of the The Organization has undertaken the
Organization is affected by the loss of trust initiative to appoint a dedicated Data Privacy
and confidence from the Organization’s Officer (DPO).
Shareholders, Investors, Employees,
Customers, Suppliers, and Government The Organization further undertakes the
Regulators. initiative to continually keep abreast with
appropriate data privacy regulations.

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What are the Opportunity/ies Identified? Management Approach

Appropriately informed Employees provides The Organization has undertaken the

assurance that the Organization is operating at initiative to establish and implement Data
a highest standard of business ethics. Privacy statements and Data Security
practices.

The Organization further undertakes the

initiative to establish and implement
Employee training and awareness programs
on Customer privacy.

In addition, the Organization also undertakes

the initiative to ensure that implemented
data privacy practices are periodically
reviewed.

Data Security
Disclosure Quantity Units
No. of Data Breaches, including Leaks, Thefts, and Losses of Data 0 #

What is the Impact and Where does it Occur?

What is the Organization’s Involvement in Management Approach
the Impact?

The business confidence of the Organization’s The Organization ensures its compliance to
Shareholders, Investors, Employees, the Data Privacy Act of 2012 (RA 10173) and
Customers, Suppliers, and Government has undertaken initiatives to establish and
Regulators linked to unreported incident(s) of implement Data Privacy statements and Data
data security breach(es) and / or data loss(es) Security practices, including the appointment
of the Organization. of a dedicated Data Privacy Officer (DPO).

The Organization has undertaken initiative to

continuously improve its Data Security
practices, including its periodic review.

The Organization further undertakes the

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initiative to establish and implement

Employee training and awareness programs
on data protection.

What are the Risk/s Identified? Management Approach

The overall business reputation of the The Organization has undertaken the
Organization is affected by the loss of trust initiative to appoint a dedicated Data Privacy
and confidence from the Organization’s Officer (DPO).
Shareholders, Investors, Employees,
Customers, Suppliers, and Government The Organization further undertakes the
Regulators. initiative to ensure that implemented data
privacy practices are periodically reviewed.

The Organization has also undertaken

initiatives to employ IT Staff who keep
abreast with data privacy regulations

What are the Opportunity/ies Identified? Management Approach

Appropriately informed Stakeholders of the The Organization has undertaken the

Organization (Shareholders, Investors, initiative to establish and implement Data
Employees, Customers, Suppliers, and Privacy statements and Data Security
Government Regulators) provides assurance practices.
that the Organization is operating at a highest
standard of business ethics. The Organization further undertakes the
initiative to establish and implement
Employee training and awareness programs
on data protection, as well as training
programs for IT Staff development.

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