COVER SHEET. (Company s Full Name) E X P O R t B A n k P l a Z a, C h i n o R O c e S A v E. n u E, C O R. S e n. G i l P u y a t A v e n u e,

Transcription

1 COVER SHEET SEC Registration Number A R T H A L A N D C O R P O R A T I O N (Company s Full Name) E X P O R t B A n k P l a Z a, C h i n o R O c e S A v E n u E, C O R. S e n. G i l P u y a t A v e n u e, M A k A t i C i t y (Business Address: No. Street City/Town/Province) Froilan Q. Tejada (Contact Person) (Company Telephone Number) Q Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) (Secondary License Type, If Applicable) Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier

2 ARTHALAND, CORPORATION (Company s Full Name) ExportBank Plaza, Chino Roces Avenue Cor. Gil Puyat Ave., Makati City (Company s Address) / (Telephone Number) December 31 (Fiscal year ending) (month & day) Any Day in April (Annual Meeting) SEC FORM 17 Q QUARTERLY REPORT (Form Type) Amendment Designation (If applicable) MARCH 31, 2009 (Period Ended Date) (Secondary License Type & File Number) LCU (Cashier) DTU ASO (SEC Number) Central Receiving Unit File Number Document I.D. 2

3 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 11 OF THE REVISED SECURITIES ACT AND RSA RULE 11(a)-1 (b)(2) THEREUNDER 1. For the quarterly period ended March 31, Commission Identification No. AS BIR TIN Exact name of registrant as specified in its character ARTHALAND, CORPORATION 5. Incorporated in Metro Manila, Philippines on August 10, Industry Classification Code. 7. Address of registrant s principal office Postal Code ExportBank Plaza, Chino Roces Avenue Cor. Gil Puyat Ave., Makati City Registrant s Telephone Number : / / / Former name, former address and former fiscal year, if changed since last report: NA 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of each class Common Shares Number of shares common stock outstanding or amount of debt outstanding. 1,368,095,199 common shares 11. Are any or all of the securities listed on the Philippine Stock Exchange? YES [ X ] NO [ ] 12. Indicate by check mark whether the registrant : 3

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5 ITEM 1. Financial Statements Required under SRC RULE Basic and Diluted Earnings per Share (See attached Income Statement) 2. The accompanying consolidated interim financial statements of Arthaland, Corporation were prepared in accordance with accounting principles generally accepted in the Philippines as set forth in Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS). 3. Notes to Financial Statements: a. The accompanying financial statements of Arthaland Corporation and its subsidiaries Urban Property Holdings. Inc. (UPHI), Cazneau Inc., Technopod, Irmo. were prepared in accordance with PFRS. The financial statements have been prepared using the historical cost basis and are presented in Philippine Pesos. b. There is no significant seasonality or cycle of interim operations. c. There are no material events subsequent to the end of the interim period. d. There are no changes in the composition of the issuer during the interim period including business combinations, acquisition or disposal of subsidiaries and long-term investments, restructurings and discontinuing operations. e. There are no material changes in the contingent liabilities or contingent assets since the last annual balance sheet date. f. There are no material contingencies and any other events or transactions that are material to an understanding of the current interim period. 5

6 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) BALANCE SHEETS AS OF MARCH 31, 2009 & DECEMBER 31, 2008 MARCH 31, 2009 DECEMBER 31, 2008 INCREASE % UNAUDITED AUDITED (DECREASE) A S S E T S CURRENT ASSETS Cash 19,442,685 6,268,100 13,174, % Receivables- net 284,491, ,745,842 30,745,896 12% Other current assets 18,729,130 15,201,995 3,527,135 23% Total Current Assets 322,663, ,215,937 47,447,616 17% - NON-CURRENT ASSETS - Investment properties - net 3,169,656,361 3,174,560,787 (4,904,426) 0% Investments in and advances to subsidiaries - net (0) - (0) Property and equipment - net 12,942,868 12,732, ,081 2% Other non-current assets - net 186,691, ,497, ,800 0% Total Non-current Assets 3,369,290,359 3,373,790,904 (4,500,545) 0% TOTAL ASSETS 3,691,953,912 3,649,006,841 42,947,071 1% LIABILITIES AND EQUITY CURRENT LIABILITIES Loans payable 255,439, ,720,025 40,719,880 19% Accounts payable, accrued expenses and 335,359, ,868,432 (23,508,966) -7% Total Current Liabilities 590,799, ,588,457 17,210,914 3% NON-CURRENT LIABILITIES Accounts payable, accrued expenses and 2,573,603,472 2,532,853,066 40,750,406 2% Total Non-Current Liabilities 2,573,603,472 2,532,853,066 40,750,406 2% Total Liabilities 3,164,402,843 3,106,441,523 57,961,320 2% EQUITY Capital stock 415,037, ,037,518 (0) Retained earnings 122,597, ,424, ,030 Net Income (14,784,277) 172,313 (14,956,590) - Minority Interest 4,700,675 4,931,364 (230,689) Total Equity 527,551, ,565,318 (15,014,249) -3% TOTAL LIABILITIES AND EQUITY 3,691,953,912 3,649,006,841 42,947,071 1% 6

7 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) BALANCE SHEETS MARCH 31, 2009 & MARCH 31, 2008 A S S E T S MARCH 31, 2009 MARCH 31, 2008 INCREASE UNAUDITED UNAUDITED (DECREASE) CURRENT ASSETS Cash 19,442,685 2,244,041 17,198,644 Receivables- net 284,491, ,215, ,276,443 Other current assets 18,729,130 18,729,130 Total Current Assets 322,663, ,459, ,204,217 NON-CURRENT ASSETS 0 Investment properties - net 3,169,656,361 3,106,397,172 63,259,189 Investments in and advances to subsidiar 0 0 Property and equipment - net 12,942, ,406 11,963,462 Other non-current assets - net 186,691,130 15,587, ,103,996 Total Non-current Assets 3,369,290,359 3,122,963, ,326,647 TOTAL ASSETS 3,691,953,912 3,244,423, ,530,864 LIABILITIES AND EQUITY CURRENT LIABILITIES Loans payable 255,439, ,439,905 Accounts payable, accrued expenses and 335,359, ,586, ,772,877 Total Current Liabilities 590,799, ,586, ,212,782 NON-CURRENT LIABILITIES 0 Accounts payable, accrued expenses and 2,573,603,472 2,688,234, ,631,220 Total Non-Current Liabilities 2,573,603,472 2,688,234, ,631,220 Total Liabilities 3,164,402,843 2,817,821, ,581,562 EQUITY Capital stock 415,037, ,257, ,780,382 Advances from a stockholder with indefinite repayment term 54,000,000-54,000,000 Retained earnings 122,597, ,424, ,030 Net Income -14,784,277-1,654,835-13,129, Minority interest 4,700,675 5,575, , Total Equity 527,551, ,601, ,949,302 TOTAL LIABILITIES AND EQUITY 3,691,953,912 3,244,423, ,530,864 7

8 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) Notes to Financial Statements As of March 31, Cash and Cash Equivalent includes: Cash in Bank 19,434,685 Petty Cash Fund 8,000 19,442,685 2 Receivables include: Accounts Receivable Tenants 3,536,544 Accounts Receivable - Others 280,955, ,491,738 3 Investment Properties include: Davao Property 9,000,000 Fort Bonifacio 574,680,372 Tagaytay Project 10,866,950 Batangas 34,152,985 Building 2,540,956,054 3,169,656,361 4 Property and Equipment Office Equipment 2,268,160 Furniture, Fixture and Equipment 830,000 Leasehold Rights and Improvements 874,813 Transportation Equipment 8,969,895 12,942,868 5 Other Assets-Current Input Tax 270,559 Prepaid Expenses 2,734,796 Deferred Charges-Brokerage 4,544,450 Miscellaneous Asset 11,179,325 18,729,130 6 Accounts Payable and Accrued Expenses-Current Accounts Payable 107,194,445 Accrued Expense Payable 182,653,816 Advance Rental 33,335,669 Unearned Rental 2,208,916 Checks Payable 346,415 Output Tax Payable 8,578,213 Withholding Tax Payable 1,041, ,359,466 8

9 ARTHALAND, CORPORATION (Formerly, EIB Realty Developers, Inc.) CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS January to March 31, 2009 AND December 31, 2008 REVENUES Jan-Mar 31, 2009 Jan-Dec 31, 2008 UNAUDITED AUDITED Rental 58,693, ,189,678 Recovery of impairment loss - 52,700,000 Reversal of provision - 15,000,000 Interest 19, ,348 Realized gain on sale of properties - 0 Others 5,358 6,034,478 - TOTAL INCOME 58,717, ,377,504 - OPERATING EXPENSES - Depreciation and amortization 16,701,688 64,828,479 Taxes and licenses 11,821,366 37,391,265 Employee benefits 7,739,248 23,569,341 Management and professional fees 1,841,371 17,476,366 Representation 53,970 8,004,320 Equity share in net loss - 0 Insurance 985,908 2,616,360 Brokerage fees 369,750 2,328,652 Association dues 923,244 1,985,856 Power, light and water 674,135 1,969,893 Transportation and travel 140,870 1,379,726 Security services 416,076 1,065,120 Supplies 337, ,185 Communications 276, ,612 Advertising 64, ,231 Annual dues and fees 154, ,548 Janitorial and clerical services 17, ,359 Impairment losses - 0 Provision for liabilities - 0 Others 274,509 3,752,298 TOTAL EXPENSES 42,793, ,502,611 OPERATING INCOME (LOSS) 15,924, ,874,893 FINANCE COSTS 30,939, ,358,922 INCOME (LOSS) BEFORE TAX -15,014, ,029 TAX EXPENSE 125,701 NET INCOME (LOSS) -15,014, ,730 - Equity holders of Parent (14,784,277) 172,313 Minority interest (230,690) -782,043 9

10 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) CONSOLIDATED STATEMENTS OF INCOME FOR THE PERIODS January to March 31, 2009 AND January to March 31, 2008 Jan-Mar 31, 2009 Jan-Mar 31, 2008 Increase % UNAUDITED UNAUDITED (Decrease) REVENUES Rental 58,693,327 58,105, , % Recovery of impairment loss - Reversal of provision - Interest 19, , % Realized gain on sale of properties - Others 5,358 4,581,378 (4,576,020) % - TOTAL INCOME 58,717,767 62,687,118 (3,969,351) -6.33% - OPERATING EXPENSES - - Depreciation and amortization 16,701,688 15,983, , % Taxes and licenses 11,821,366 7,973,721 3,847, % Salaries and Wages 7,739, ,655 7,052, % Management and professional fees 1,841,371 1,750,750 90, % Representation 53, ,397 (311,427) % Equity share in net loss - Insurance 985,908 1,475,543 (489,635) % Brokerage fees 369, ,184 (399,435) % Association dues 923, , , % Power, light and water 674, , , % Transportation and travel 140, ,173 (102,302) % Security services 416, , , % Supplies 337,652 6, , % Communications 276, ,437 72, % Advertising 64,768 14,850 49, % Annual dues and fees 154, ,778 (648,807) % Janitorial and clerical services 17,784 75,725 (57,940) % Impairment losses -168, , % Provision for liabilities - Others 274,509 2,250,660 (1,976,151) % TOTAL EXPENSES 42,793,440 33,416,928 9,376, % OPERATING INCOME (LOSS) 15,924,327 29,270,191 (13,345,864) % FINANCE COSTS 30,939,294 31,063,091 (123,797) -0.40% INCOME (LOSS) BEFORE TAX -15,014,967-1,792,901 (13,222,067) % TAX EXPENSE - NET INCOME (LOSS) -15,014,967-1,792,901 (13,222,067) % Attributable to: - Equity holders of Parent (14,784,277.10) -1,654,835 (13,129,442) % Minority interest (230,690) -138,066 (92,624) 67.09% EARNINGS (LOSS) PER SHARE (0.01) (0.00) (0.01)

11 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIODS January to March 31, 2009 AND January to March 31, 2008 Jan-March 2009 Jan-March 2008 CASH FLOW FROM OPERATING ACTIVITIES Income (Loss) Before Income Tax (14,784,277) (1,654,835) Adjustments to reconcile income (loss) before income tax to net cash generated from (used in) operations: Interest Expense 30,939,294 - Provision for Probable Losses (168,747) Equity in Net Losses (Earnings) of an Affiliate Depreciation and Amortization 16,701,688 15,983,935 Interest Income (18,365) (429) Benefit from Deferred Income Tax - Changes in operating assets and liabilities: Decrease (increase) in: Receivables (30,745,179) (62,956,378) Investment Properties 4,904,426 15,458,245 Property and Equipment (16,911,769) 60,585 Other Assets (3,951,624) (20,224,507) Increase (decrease) in: Accounts Payable and Accrued Expenses 57,961,320 42,250,568 Net Cash Generated from (used in) Operations 44,095,514 (11,251,563) Interest Received 18,365 - Income Tax Paid - Interest Paid (30,939,294) Net Cash Provided by (used in) Operating Activities 13,174,585 (11,389,629) CASH FLOWS FROM INVESTING ACTIVITY Decrease in Equity Investments and Advances - - CASH FLOWS FROM FINANCING ACTIVITIES Increase/(Decrease) in Notes Payable - Decrease in Contract Payable - - Net Cash Provided by Financing Activities - - NET INCREASE (DECREASE) IN CASH AND CASH 13,174,585 (11,389,629) EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 6,268,100 13,633,670 CASH AND CASH EQUIVALENTS AT END OF YEAR 19,442,685 2,244,041 11

12 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIODS January to March 31, 2009 AND January to March 31, 2008 MARCH 31, 2009 MARCH 31, 2008 UNAUDITED UNAUDITED EQUITY- PHP1 par value Authorized - 2,000,000,000 shares Issued - 1,368,095,199 shares Capital Stock 415,037, ,257,136 Advances from Stochholder with Indefinite Repayment Term 54,000,000 Retained Earnings (Deficit) 122,597, ,424,123 Net Income (Loss) (14,784,277) (1,654,835) 522,850, ,026,424 Minority Interest in a Consolidated Subsidiary 4,700,675 5,575,343 TOTAL EQUITY 527,551, ,601,767 12

13 ARTHALAND CORPORATION (Formerly, EIB Realty Developers, Inc.) AGING OF RECEIVABLES AS OF March 31, 2009 Type of Accounts Receivable Total Within 6 Mos. Within 6 Mos. - 1 year a) TRADE RECEIVABLE 1. Tenants 3,536, ,281, ,255, Sub Total 3,536, ,281, ,255, Less: Allow. For Doubtful Accounts 0.00 NET TRADE RECEIVABLE 3,536, ,281, ,255, b) NON TRADE RECEIVABLES 1. Others 4,677, , ,734, Sub Total 4,677, , ,734, Less: Allow. For Doubtful Accounts NET NON-TRADE RECEIVABLE 4,677, , ,734, NET RECEIVABLES (A+B) 8,213, ,224, ,989, ACCOUNTS RECEIVABLE DESCRIPTION: Type of Receivable Nature / Description Colletion Period 1. Tenants Rentals Regular billings are made 2. Others Advances and Working Fund Regular billings are made / monthly for daily & emergency exp. reimbursement / replenishment. 13

14 ARTHALAND, CORPORATION ITEM 2. Management s Discussion and Analysis of Financial Condition and Results of Operation Comparable Discussion of Interim Period as of 31 March 2009 The consolidated net loss of the Group for the 1 st Quarter of 2009 increased to P Mn compared to a net loss of P Mn for the same period in This is primarily due to a decrease in revenues and increase in expenditures. For the 1 st Quarter of 2009, total expenses increased by P 9.37Mn to P 42.79Mn from P Mn in the same period in This increase in expenses is primarily due to salaries and wages which increased by approximately P 7.05 Mn and Taxes and Licenses which increased by P 3.8 Mn. As of March 31, 2009, ALCO has 17 employees compared to 2 during the same period in If not for the reversal of payables worth P 4.58 Mn in the 1 st Quarter of 2008, ALCO would not have posted a 6% decline in revenues for the 1 st Quarter of 2009 against the same period in FINANCIAL CONDITION The Group s aggregate resources was P3.691 Bn as of 31 March This approximates the total resources as of end Impact of New Amendments and Interpretations to Existing Standards (a) Effective in 2008 There are standards and interpretations to published standards that are mandatory for accounting periods beginning on or after 01 January These standards and interpretations, however, are not currently relevant to the Group s operations. Philippine Interpretation Financial Reporting Interpretations Committee (IFRIC) 14: PAS 39 and PFRS 7 (Amendments): Philippine Accounting Standards (PAS) 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction PAS 39, Financial Instruments: Recognition and Measurement and PFRS 7, Financial Instruments: Disclosures 14

15 Philippine Interpretation IFRIC 11: Philippine Interpretation IFRIC 12: Group and Treasury Share Transactions Service Concession Arrangements The first time application of the standard and the amendment has not resulted in any prior period adjustments of cash flows, net income or balance sheet line items. (b) Effective Subsequent to 2008 There are new and amended standards that are effective for periods subsequent to The following new standards, effective for annual periods beginning on or after 01 January 2009 are relevant to the Group, and which the Group will apply in accordance with their transitional provisions. PAS 1 (Revised 2007): PAS 40 (Amendment): Presentation of Financial Statements PAS 40, Investment Property Below is a discussion of the possible impact of these accounting standards. (i) PAS 1 (Revised 2007), Presentation of Financial Statements (effective from January 1, 2009). The amendment requires an entity to present all items of income and expense recognized in the period in a single statement of comprehensive income or in two statements: a separate income statement and a statement of comprehensive income. The income statement shall disclose income and expense recognized in profit and loss in the same way as the current version of PAS 1. The statement of comprehensive income shall disclose profit or loss for the period, plus each component of income and expense recognized outside of profit and loss classified by nature (e.g., gains or losses on available for-sale assets or translation differences related to foreign operations). Changes in equity arising from transactions with owners are excluded from the statement of comprehensive income (e.g., dividends and capital increase). An entity would also be required to include in its set of financial statements a statement showing its financial position (or balance sheet) at the beginning of the previous period when the entity retrospectively applies an accounting policy or makes a retrospective restatement. The Group will apply PAS 1 (Revised 2007) in its 2009 financial statements. (ii) PAS 40 (Amendment), Investment Property. This standard is amended to include property under construction or development for future use as investment property in its definition of investment property. This results in such property being within the scope of PAS 40; previously, it was within the scope of PAS 16. Also, if an entity s policy is to measure investment property at fair value, but during construction or development of an investment property the entity is unable to reliably measure its fair value, then the entity would be permitted to measure the investment property at cost until construction or development is complete. At such time, the entity would be able to measure the investment property at fair value. Minor amendments are made to several other standards; however, those amendments are not expected to have any material impact on the Company s financial statements 15

16 RISK MANAGEMENT OBJECTIVES AND POLICIES The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Group s risk management is coordinated with its Parent, in close cooperation with the Board of Directors, and focuses on actively securing the Group s short- to medium-term cash flows by minimizing the exposure to financial markets. Long-term financial investments are managed to generate lasting returns. The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group is exposed to as described below. Credit Risk Analysis The Group and the Parent s exposure to credit risk is limited to the carrying amount of financial assets recognized as of 31 March Generally, the maximum credit risk exposure of financial assets is the carrying amount of the financial assets as shown on the face of the balance sheet. Credit risk, therefore, is only disclosed in circumstances where the maximum potential loss differs significantly from the financial asset s carrying amount. For advances to subsidiaries and associate, the Group is not exposed to significant risk more than the carrying amount of the advances since such net assets of the subsidiary and associate are sufficient to cover the Group s investments and advances. Liquidity Risk Liquidity risk is the risk that there are insufficient funds available to adequately meet the credit demands of the Group s customers and repay liabilities on maturity. The Group closely monitors the current and prospective maturity structure of its resources and liabilities and the market condition to guide pricing and asset/liability allocation strategies to manage its liquidity risks. 16

17 Key Performance Indicators March 2009 December 2008 Capital Adequacy Ratio Total Equity to Total Assets Ratio 14.49% 13.16% Liquidity Liquid to Total Assets Ratio 0.53%.17% Profitability Return on Average Equity -2.81%.13% Cost Efficiency Cost to Income 45.05% 76.04% The Group s Capital Adequacy Ratio (CAR) stood at 14.49%, a minimal increase of 1.33% compared to last year s level of %. CAR is computed by dividing the Total Average Stockholder s Equity over the Total Assets: Total Average Stockholder s Equity P Mn 14.49% P Mn 13.16% Total Assets P 3, Mn P 3, Mn Ratio Liquidity ratio indicates the proportion of total assets which can be readily converted into cash. It also measures the extent to which the assets can be converted into cash to meet its liquidity requirements. Liquid assets include cash and other cash items. Below is the computation for the Liquidity Ratio: Total Liquid Assets (P) P Mn 0.53% P Mn 0.17% Total Assets P 3, Mn P 3, Mn Ratio The ratio of the Group s return on average equity (ROE) decreased from negative 0.13% in December 2008 to negative 2.81 % in March The Return on Average Equity Ratio is calculated as follows: Total Income (Loss) (P) P ( Mn) -2.81% P (629 Mn) -0.13% Total Average Stockholders Equity P Mn Ratio P Mn 17

18 Cost to income ratio pertains to the ratio of expenses to gross income. Expenses include taxes and licenses, management and professional fees, and miscellaneous expenses. Below is the computation of the said ratio: Total Expenses (P) P Mn 45.05% P Mn 76% Total Gross Income P Mn P Mn Ratio Discussion and Analysis of Materials Events (1) i. The proposed increase in ALCO s authorized capital stock was approved on 24 December This gave way to additional capital infusion by investors which will enable the Company to generate the liquidity required for future developments. ii. There are no other known trends, commitments, events or uncertainties that will have a material impact on EIBR s liquidity within the next twelve (12) months except for those mentioned above. (2) i. There are no material commitments as of the date of this Report for capital expenditures. ii. There are no events that will trigger any direct or contingent financial obligation that is material to the Group or any default or acceleration of an obligation for the period. (3) There is nothing to disclose regarding any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of EIBR with unconsolidated entities or other persons created during the reporting period. (4) There are no other significant elements of income or loss that did not arise from EIBR s operations or borrowings for its projects. (5) The causes of the material changes of 5% or more from period to period of the following accounts are as follows: Balance Sheet Accounts March 31, 2009 versus end 2008 (i) (ii) (iii) 210% increase in Cash and Cash Equivalent largely due to proceeds from short term notes payable 12% increase in Receivables primarily due to outstanding rent from various tenants. 23% increase in Other Non-Current Assets mainly due to Creditable Withholding taxes deducted by Tenants. 18

19 (iv) 7% decrease in Accounts Payable and Accrued Expenses due to settlement of various outstanding payables Income statement - Q versus Q (i) 6% decline in Gross income primarily due to the one time reversal of provisions in 2008 amounting to P Mn (ii) (iii) (iv) 33% decline in Insurance expenses - due to decrease in amount of insurance premium of the building. Substantial increase in Salaries and Wages, and related expenses as Transportation and Office Supplies - due to increase in personnel from 2 in 2008 to 17 in % increase in Management and Professional fees - due to engagement of consultants related to operations - nothing follows - 19