COVER SHEET D O U B L E D R A G O N P R O P E R T I E S C O R P.

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2 COVER SHEET C S S.E.C. Registration Number D O U B L E D R A G O N P R O P E R T I E S C O R P. A N D S U B S I D I A R I E S ( F o r m e r l y I n j a p L a n d C o r p o r a t i o n ) (Company's Full Name) D D M E R I D I A N P A R K A R E A C O R. M A C A P A G A L A V E. A N D E D S A E X T. B L V D. S A N R A F A E L, P A S A Y C I T Y (Business Address : No. Street Company / Town / Province) Rizza Marie Joy Sia Contact Person Company Telephone Number Q Month Day FORM TYPE Month Day Annual Meeting Secondary License Type, If Applicable Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document I.D. Cashier S T A M P S Remarks = pls. use black ink for scanning purposes.

3 SEC No File No. DOUBLEDRAGON PROPERTIES CORP. (Company s Full Name) DD Meridian Park Bay Area corner Macapagal Avenue and EDSA Extension Boulevard Brgy 76 Zone 10 San Rafael Pasay City 1302 (Company s Address) (Telephone Number) December 31 (Fiscal Year ending) Form 17-Q for the Second Quarter of 2017 (Form Type) N/A Amendment Designation N/A Period Ended Date N/A (Secondary License Type and File Number)

4 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER 1. For the quarterly period ended June 30, Commission identification number CS BIR Tax Identification No Exact name of issuer as specified in its charter: DoubleDragon Properties Corp. 5. Province, country or other jurisdiction of incorporation or organization: Republic of the Philippines 6. Industry Classification Code: (SEC Use Only) 7. Address of issuer's principal office and Postal Code: DD Meridian Park Bay Area corner Macapagal Avenue and EDSA Extension Boulevard Brgy 76 Zone 10 San Rafael Pasay City Issuer's telephone number, including area code: (632) Former name, former address and former fiscal year, if changed since last report: 5th Floor People's Hotel Fuentes and Delgado Sts., Iloilo City Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA Title of each Class amount outstanding Number of shares of common stock outstanding and of debt Common Shares 2,229,730,000 Preferred Shares 100,000, Are any or all of the securities listed on a Stock Exchange? Yes [ x ] No [ ] If yes, state the name of such Stock Exchange and the class/es of securities listed therein: Stock Exchange: Philippine Stock Exchange Securites Listed: Common Shares and Preferred Shares 12. Indicate by check mark whether the registrant: (a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines, during the preceding twelve (12) months (or for such shorter period the registrant was required to file such reports) Yes [ x ] No [ ] N/A (b) has been subject to such filing requirements for the past ninety (90) days. Yes [ x ] No [ ] N/A

5 PART I--FINANCIAL INFORMATION Item 1. Financial Statements. The following financial statements are submitted as part of this report: a) Unaudited Consolidated Statements of Comprehensive Income for the three months ended June 30, 2017 and June 30, 2016; b) Consolidated Statements of Financial Position as of June 30, 2017 (unaudited) and December 31, 2016 (audited); c) Unaudited Consolidated Statements of Changes in Equity for the six months ended June 30, 2017 and June 30, 2016; and d) Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and June 30, 2016.

6 DOUBLEDRAGON PROPERTIES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Unaudited Audited Note June 30, 2017 December 31, 2016 ASSETS Current Assets Cash and cash equivalents 6,28 927,045,928 5,466,874,377 Receivables net 7,28 2,093,316,398 1,712,247,793 Inventories 8 3,398,525,537 3,186,344,243 Due from related parties 9 101,808, ,808,489 Prepaid expenses and other current 3,441,776,073 3,251,281,534 assets - net 10,14,23,28 Total Current Assets 9,962,472,425 13,718,556,436 Noncurrent Assets Receivables - net of current portion 7,28 956,723, ,323,007 Property and equipment - net 11 1,478,577,689 1,459,841,829 Goodwill and intangible assets ,648, ,035,031 Investment property 13 36,056,922,921 32,535,137,136 Deferred tax assets ,515,677 15,519,784 Other noncurrent assets 14, 23, 28 1,798,587,953 1,001,210,584 Total Noncurrent Assets 40,579,976,707 35,825,067,371 50,542,449,132 49,543,623,807 LIABILITIES AND EQUITY Current Liabilities Accounts payable and other liabilities 8, 15, 28 2,192,545,843 2,639,958,858 Short-term notes payable 16, 28 4,792,708,418 3,486,004,312 Due to related parties 22, ,305,852 1,081,038,940 Current portion of customers 148,579, ,924,165 deposits 17 Dividends payable 161,945, ,945,000 Income tax payable 19,430,530 1,128,130 Total Current Liabilities 8,044,514,879 7,589,999,405 Noncurrent Liabilities Long-term notes payable - net of debt issue costs 16, 28 14,957,750,490 15,027,837,523 Bonds payable net of issue cost 5,220,831,408 5,217,658,399 Deferred tax liabilities 25 1,080,001, ,715,869 Retirement benefits liability 24 5,864,403 6,121,432 Customers deposits - net of current portion Other noncurrent liabilities 18, ,027, ,155,052 Total Noncurrent Liabilities 22,246,475,149 21,994,488,275 Total Liabilities 30,290,990,028 29,584,487,680 Forward

7 Equity Equity Attributable to Equity Holders of the Parent Company Capital stock ,973, ,973,000 Preferred Shares 27 10,000,000,000 10,000,000,000 Additional paid-in capital 27 1,358,237,357 1,358,237,357 Retained earnings 27 1,574,575,507 1,574,129,905 Retirement benefits liability (2,602,254) (2,602,254) 13,153,183,610 13,152,738,008 Non-controlling Interest 2 7,098,275,494 6,806,398,119 Total Equity 20,251,459,104 19,959,136,127 Total Liabilities and Equity 50,542,449,132 49,543,623,807 See Notes to the Consolidated Financial Statements.

8 DOUBLEDRAGON PROPERTIES CORP. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the quarters ended June 30, 2017 and June 30, 2016 June 30, 2017 June 30, 2016 REVENUES Real estate sales 356,783, ,788,785 Leasehold rights' sales - 3,126,785 Rental income 163,895,970 46,819,505 Hotel revenues 115,232,935 - Interest income 317,903,400 24,029,484 Other income from forfeiture 3,456,616 4,361,907 Others 24,088,856 28,376, ,351, ,502,920 COST AND EXPENSES Cost of real estate sales 148,621, ,412,593 Cost of leasehold rights - 516,706 Cost of hotel operations 46,748,626 - Selling and marketing expenses 7,247,977 26,218,048 General and administrative expenses 195,796, ,534,887 Interest expense 351,002,289 20,616, ,417, ,298,901 INCOME BEFORE INCOME TAX 231,933, ,204,019 INCOME TAX EXPENSE 21,198,543 3,660,346 NET INCOME/TOTAL COMPREHENSIVE INCOME 210,735, ,543,671 Attributable to: Equity holders of the Parent Company 175,319,026 92,517,115 Non-controlling interest 35,416,133 8,026, ,735, ,543,671 Earnings per share Basic Diluted See Notes to the Consolidated Financial Statements.

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10 DOUBLEDRAGON PROPERTIES CORP. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, 2017 and 2016 June 30, June 30, CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax 420,164, ,583,534 Adjustments for: Interest expense 366,812,086 48,749,496 Depreciation and amortization 33,503,387 10,835,873 Interest income (327,156,353) (25,056,634) Operating income before working capital changes 493,323, ,112,269 Decrease (increase) in: Receivables (381,068,605) (494,326,690) Real estate inventories (212,181,294) (189,233,326) Due from related parties - (101,915,516) Prepaid expenses and other current assets (190,494,538) (363,273,687) Increase (decrease) in: Accounts payable and other liabilities (447,413,015) 348,840,194 Customers' deposits (71,344,929) 32,414,516 Due to related parties (351,733,088) 32,728,353 Cash absorbed by operations (1,160,912,129) (526,653,887) Interest received 7,347,908 25,056,634 Interest paid (551,016,649) (373,930,487) Net cash used in operating activities (1,704,580,870) (875,527,740) CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment (50,462,699) (7,257,743) Additions to intangible assets (1,173,050) (14,464,676) Additions to investment property (3,185,784,943) (5,780,770,080) Increase in other noncurrent assets (797,377,369) (136,924,701) Net cash used in investing activities (4,034,798,061) (5,939,417,200) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of capital stock - 9,862,878,668 Proceeds from loans and note issuance 3,029,258,750 4,000,000,000 Payments of loans (1,805,635,809) (3,400,000,000) Increase in other noncurrent payable 137,872,541 75,262,059 Cash dividends paid (161,945,000) - Net cash provided by financing activities 1,199,550,482 10,538,140,727 NET DECREASE IN CASH (4,539,828,449) 3,723,195,787 CASH AT BEGINNING OF QUARTER 5,466,874, ,459,833 CASH AT END OF QUARTER 927,045,928 4,683,655,620

11 DOUBLEDRAGON PROPERTIES CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Reporting Entity DoubleDragon Properties Corp., ( DD or the Parent Company ), was incorporated and registered with the Philippine Securities and Exchange Commission (SEC) on December 9, 2009 primarily to engage in the business of real estate development including but not limited to residential and condominium projects, to acquire by purchase or lease land and interest in land, to own, hold, impose, promote, develop, subdivide and manage any land owned, held or occupied by the Parent Company, to construct, manage or administer buildings such as condominiums, apartments, hotels, restaurants, stores or other structures and to mortgage, sell, lease or otherwise dispose of land, interests in land and buildings or other structures at any time. The Parent Company s shares are listed in the Philippine Stock Exchange ( PSE ) on April 7, 2014 under the stock symbol DD. On June 23, 2015, the SEC approved the change in the Parent Company s registered office address to DD Meridian Park Bay Area, Corner Macapagal Avenue and EDSA Extension Boulevard, Brgy. 76 Zone 10, San Rafael, Pasay City, Metro Manila. The Parent Company also maintains its corporate office at 16 th Floor, 6750 Building, Ayala Avenue, Makati City. 2. Basis of Preparation Statement of Compliance The accompanying consolidated financial statements have been prepared in compliance with Philippine Financial Reporting Standards (PFRS). PFRS are based on International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). PFRS consist of PFRS, Philippine Accounting Standards (PAS), and Philippine Interpretations. Basis of Measurement The consolidated financial statements of the Group have been prepared using the historical cost basis of accounting except for investment property which is measured at fair value. Functional and Presentation Currency The consolidated financial statements are presented in Philippine peso, which is the Parent Company s functional currency. All financial information presented in Philippine peso has been rounded off to the nearest peso, unless otherwise stated

12 Basis of Consolidation The consolidated financial statements include the accounts of the Parent Company and the following subsidiaries (collectively referred to as the Group ): Percentage of Ownership Subsidiaries DoubleDragon Sales Corp. (DDSC) (a) DoubleDragon Property Management Corp. (DDPMC) (a) Iloilo-Guimaras Ferry Terminal Corp. (IGFTC) (b) DD-Meridian Park Development Corp. (DD-MPDC) (c) DD HappyHomes Residential Centers Inc. (DDHHRCI) (d) Hotel of Asia, Inc. (HOA) (e) CityMall Commercial Centers Inc. (CMCCI) (f) Piccadilly Circus Landing Inc. (PCLI) (g) (a) Consolidated effective January 1, (b) Incorporated and consolidated effective June 10, (c) Consolidated effective October 27, (d) Consolidated effective May 23, (e) Consolidated effective October 12, (f) Consolidated effective December 27, (g) Consolidated effective August 1, DDSC DDSC was incorporated and registered with the SEC on November 12, 2012 primarily to engage in the business of selling or marketing real estate products, including but not limited to land, buildings, condominium units, town houses, apartments, house and lot packages and all other forms of real estate products. DDSC has not started its commercial operations as at June 30, DDPMC DDPMC was incorporated and registered with the SEC on January 17, 2012 primarily to engage in maintaining, preserving, preparing and cleaning buildings, condominiums, townhouses, hotels, amusement or recreational places, counters, office premises, factories, shops, equipment and facilities. DDPMC started its commercial operations in IGFTC IGFTC was incorporated and registered with the SEC on June 10, 2016, primarily to finance, design, construct, develop, operate and maintain Iloilo City-Guimaras Ferry Terminal and the surrounding areas and to provide a safe, efficient and modern ferry terminal for commuters going to and arriving from Guimaras Island. IGFTC has not started its commercial operations as at December 31, DD-MPDC DD-MPDC was incorporated and registered with the SEC on October 27, 2014 primarily to engage in the business of real estate development including but not limited to residential and condominium projects, to acquire by purchase or lease land and interest in land, to own, hold, impose, promote, develop, subdivide and manage any land owned, held or occupied by the entity, to construct, manage or administer buildings such as condominiums, apartments, hotels, restaurants, stores or other structures and to mortgage, sell, lease or otherwise dispose of land, interests in land and buildings or other structures at any time. DD-MPDC has not started its commercial operations as at June 30, 2016.

13 DDHHRCI DDHHRCI was incorporated and registered with the SEC on September 15, 2011 primarily to engage, operate and hold or manage real estate business, to acquire by purchase, lease, donation or otherwise, own, use, improve, develop, subdivide, sell, mortgage, exchange, lease, and hold for investment or otherwise, real estate of all kinds, whether improved, managed or otherwise, deal in or dispose of buildings, houses, apartments, townhouses, condominiums, and other structure of whatever kind, together with the appurtenances or improvements found thereon. DDHHRCI started its commercial operations in HOA HOA was incorporated and registered with the SEC on June 8, 2011 primarily to engage in the business of real estate development including but not limited to residential and condominium projects, to acquire by purchase or lease land and interest in land, to own, hold, impose, promote, develop, subdivide and manage any land owned, held or occupied by HOA, to construct, manage or administer buildings such as condominiums, apartments, hotels, restaurants, stores or other structures and to mortgage, sell, lease or otherwise dispose of land, interests in land and buildings or other structures at any time. HOA started its commercial operations in HOA has the following subsidiaries which are also engaged in the hotel industry and are included in the consolidated financial statements: Percentage of Ownership Subsidiaries 2017 Hotel 101 Management Corporation (h) 100 CSI Hotels Incorporated (h) 50 (h) Consolidated effective October 12, CMCCI CMCCI was incorporated and registered with the SEC on December 27, 2013 primarily to engage in the business of commercial shopping centers or malls, and for the attainment of this purpose, to construct, build, develop, operate and maintain commercial center or malls and to perform all acts or trades necessary for its operation and maintenance, including but not limited to the preservation of commercial spaces for rent, amusement centers, movie theater, performing arts center, children s play area and hobby or gaming centers, parking lots and other service facilities, within the compound or premises of the shopping centers. CMCCI started its commercial operations in 2015.

14 CMCCI has the following subsidiaries which are also engaged in the real estate investment industry and are included in the consolidated financial statements: Percentage of Ownership Subsidiaries CM-Northtown Davao Inc. (i) Prime DDG Commercial Centers Inc. (j) CM-Goldenfields Bacolod Inc. (k) CM-Tarlac MacArthur Inc. (l) CM-Danao Cebu Inc. (m) CM-Mandalagan Bacolod Inc. (m) CM-Dipolog Zamboanga Inc. (n) (i) Incorporated and consolidated effective December 5, (j) Incorporated and consolidated effective April 28, (k) Incorporated and consolidated effective March 2, (l) Incorporated and consolidated effective April 24, (m) Incorporated and consolidated effective July 21, (n) Incorporated and consolidated effective October 8, PCLI PCLI was incorporated and registered with the SEC on October 10, 2012 primarily to engage in owning, using, improving, developing, subdividing, selling, exchanging, leasing and holding for investment or otherwise, real estate of all kinds, including buildings, houses, apartments and other structures. PCLI started its commercial operations in A subsidiary is an entity controlled by the Group. The Group controls an entity if, and only if, the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. When the Group has less than majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including the contractual arrangement with the other vote holders of the investee, rights arising from other contractual arrangements and the Group s voting rights and potential voting rights. 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 financial statements of the subsidiaries are prepared for the same reporting period as the Parent Company, using uniform accounting policies for like transactions and other events in similar circumstances. Intergroup balances and transactions, including intergroup unrealized profits and losses, are eliminated in preparing the consolidated financial statements. Non-controlling interests represent the portion of profit or loss and net assets not attributable to the equity holders of the Parent Company and are presented in the consolidated statements of comprehensive income and within equity in the consolidated statements of financial position, separately from the equity attributable to equity holders of the Parent Company.

15 Non-controlling interests include the interests not held by the Parent Company in DD-MPDC, DDHHRCI, CMCCI and its subsidiaries, PCLI and HOA and its subsidiaries in 2016 and A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, the Group: (i) derecognizes the assets (including goodwill) and liabilities of the subsidiary, the carrying amount of any non-controlling interests and the cumulative transaction differences recorded in equity; (ii) recognizes the fair value of the consideration received, the fair value of any investment retained and any surplus or deficit in profit or loss; and (iii) reclassify the Parent Company s share of components previously recognized in other comprehensive income to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities. 3. Summary of Significant Accounting Policies The accounting policies set out below have been applied consistently to all the years presented in these consolidated financial statements, except for the changes in accounting policies as explained below. Adoption of Amendments to Standards The Group has adopted the following amendments to standards starting January 1, 2016 and accordingly, changed its accounting policies. The adoption of these amendments to standards did not have any significant impact on the Group s consolidated financial statements. Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to PAS 16 and PAS 38). The amendments to PAS 38 Intangible Assets introduce a rebuttable presumption that the use of revenue-based amortization methods for intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are highly correlated, or when the intangible asset is expressed as a measure of revenue. The amendments to PAS 16 Property, Plant and Equipment explicitly state that revenue-based methods of depreciation cannot be used for property, plant and equipment. This is because such methods reflect factors other than the consumption of economic benefits embodied in the asset - e.g., changes in sales volumes and prices. Annual Improvements to PFRSs Cycle. This cycle of improvements contains amendments to four standards. The following are the said improvements or amendments to PFRSs, none of which has a significant effect on the consolidated financial statements of the Group: Offsetting disclosures in condensed interim financial statements (Amendment to PFRS 7). PFRS 7 is also amended to clarify that the additional disclosures required by Disclosures: Offsetting Financial Assets and Financial Liabilities (Amendments to PFRS 7) are not specifically required for inclusion in condensed interim financial statements for all interim periods; however, they are required if the general requirements of PAS 34 Interim Financial Reporting require their inclusion.

16 Disclosure of information elsewhere in the interim financial report (Amendment to PAS 34). PAS 34 is amended to clarify that certain disclosures, if they are not included in the notes to interim financial statements, may be disclosed elsewhere in the interim financial report - i.e., incorporated by cross-reference from the interim financial statements to another part of the interim financial report (e.g. management commentary or risk report). The interim financial report is incomplete if the interim financial statements and any disclosure incorporated by cross-reference are not made available to users of the interim financial statements on the same terms and at the same time. Disclosure Initiative (Amendments to PAS 1) addresses some concerns expressed about existing presentation and disclosure requirements and to ensure that entities are able to use judgment when applying PAS 1. The amendments clarify that: Information should not be obscured by aggregating or by providing immaterial information. Materiality considerations apply to all parts of the financial statements, even when a standard requires a specific disclosure. The list of line items to be presented in the statement of financial position and statement of profit or loss and other comprehensive income can be disaggregated and aggregated as relevant and additional guidance on subtotals in these statements. An entity s share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified to profit or loss. New Standards, Amendments to Standards and Interpretation Issued Not Yet Adopted A number of new standards, amendments to standards and interpretation are effective for annual periods beginning after January 1, However, the Group has not applied the following new standards, amendments to standards and interpretation in preparing these consolidated financial statements. Management is in the process of assessing the impact of these new standards, amendments to standards and interpretation which may be relevant on the consolidated financial statements upon adoption in their respective effective dates. Effective January 1, 2017 Disclosure initiative (Amendments to PAS 7). The amendments address financial statements users requests for improved disclosures about an entity s net debt relevant to understanding an entity s cash flows. The amendments require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes - e.g., by providing a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities. Early adoption is permitted. When an entity first applies the amendments, it is not required to provide comparative information for preceding periods.

17 Recognition of Deferred Tax Assets for Unrealized Losses (Amendments to PAS 12). The amendments clarify that: the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset; the calculation of future taxable profit in evaluating whether sufficient taxable profit will be available in future periods excludes tax deductions resulting from the reversal of the deductible temporary differences; the estimate of probable future taxable profit may include the recovery of some of an entity's assets for more than their carrying amount if there is sufficient evidence that it is probable that the entity will achieve this; and an entity assesses a deductible temporary difference related to unrealized losses in combination with all of its other deductible temporary differences, unless a tax law restricts the utilization of losses to deduction against income of a specific type. Early adoption is permitted. On initial application, the change in the opening equity of the earliest comparative period may be recognized in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. If an entity applies the relief, it shall disclose that fact. Effective January 1, 2018 PFRS 9 Financial Instruments (2014). PFRS 9 (2014) replaces PAS 39 Financial Instruments: Recognition and Measurement and supersedes the previously published versions of PFRS 9 that introduced new classifications and measurement requirements (in 2009 and 2010) and a new hedge accounting model (in 2013). PFRS 9 includes revised guidance on the classification and measurement of financial assets, including a new expected credit loss model for calculating impairment, guidance on own credit risk on financial liabilities measured at fair value and supplements the new general hedge accounting requirements published in PFRS 9 incorporates new hedge accounting requirements that represent a major overhaul of hedge accounting and introduces significant improvements by aligning the accounting more closely with risk management. The new standard is to be applied retrospectively for annual periods beginning on or after January 1, 2018, with early adoption permitted. Classification and Measurement of Share-based Payment Transactions (Amendments to PFRS 2). The amendments cover the following areas: Measurement of cash-settled awards. The amendments clarifies that a cashsettled share-based payment is measured using the same approach as for equity-settled share-based payments - i.e., the modified grant date method.

18 Classification of awards settled net of tax withholdings. The amendments introduce an exception stating that, for classification purposes, a sharebased payment transaction with employees is accounted for as equity-settled if: o o the terms of the arrangement permit or require a company to settle the transaction net by withholding a specified portion of the equity instruments to meet the statutory tax withholding requirement (the net settlement feature); and the entire share-based payment transaction would otherwise be classified as equity-settled if there were no net settlement feature. The exception does not apply to equity instruments that the company withholds in excess of the employee s tax obligation associated with the share-based payment. Modification of awards from cash-settled to equity settled. The amendments clarify that when a share-based payment is modified from cash-settled to equity-settled, at modification date, the liability for the original cash-settled share-based payment is derecognized and the equity-settled share-based payment is measured at its fair value, recognized to the extent that the goods or services have been received up to that date. The difference between the carrying amount of the liability derecognized, and the amount recognized in equity, is recognized in profit or loss immediately. As a practical simplification, the amendments can be applied prospectively. Retrospective or early application is permitted. PFRS 15 Revenue from Contracts with Customers replaces PAS 11 Construction Contracts, PAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 18 Transfer of Assets from Customers and SIC-31 Revenue - Barter Transactions Involving Advertising Services. The new standard introduces a new revenue recognition model for contracts with customers which specifies that revenue should be recognized when (or as) a company transfers control of goods or services to a customer at the amount to which the company expects to be entitled. Depending on whether certain criteria are met, revenue is recognized over time, in a manner that best reflects the company s performance, or at a point in time, when control of the goods or services is transferred to the customer. The standard does not apply to insurance contracts, financial instruments or lease contracts, which fall in the scope of other PFRSs. It also does not apply if two companies in the same line of business exchange nonmonetary assets to facilitate sales to other parties. Furthermore, if a contract with a customer is partly in the scope of another IFRS, then the guidance on separation and measurement contained in the other PFRS takes precedence. The new standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. Transfers of Investment Property (Amendments to PAS 40) amends the requirements on when an entity should transfer a property asset to, or from, investment property. A transfer is made when and only when there is an actual change in use - i.e., an asset meets or ceases to meet the definition of investment property and there is evidence of the change in use. A change in management intention alone does not support a transfer.

19 The amendments are effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. An entity may apply the amendments to transfers that occur after the date of initial application and also reassess the classification of property assets held at that date or apply the amendments retrospectively, but only if it does not involve the use of hindsight. Effective January 1, 2019 PFRS 16 Leases supersedes PAS 17 Leases and the related Philippine Interpretations. The new standard introduces a single lease accounting model for lessees under which all major leases are recognized on-balance sheet, removing the lease classification test. Lease accounting for lessors essentially remains unchanged except for a number of details including the application of the new lease definition, new sale-and-leaseback guidance, new sub-lease guidance and new disclosure requirements. Practical expedients and targeted reliefs were introduced including an optional lessee exemption for short-term leases (leases with a term of 12 months or less) and low-value items, as well as the permission of portfolio-level accounting instead of applying the requirements to individual leases. New estimates and judgmental thresholds that affect the identification, classification and measurement of lease transactions, as well as requirements to reassess certain key estimates and judgments at each reporting date were introduced. PFRS 16 is effective for annual periods beginning on or after January 1, Earlier application is permitted for entities that apply PFRS 15 Revenue from Contracts with Customers at or before the date of initial application of PFRS 16. The Group is currently assessing the potential impact of PFRS 16 and plans to adopt this new standard on leases on the required effective date. Deferral of the Local Implementation of Amendments to PFRS 10 and PAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to PFRS 10 and PAS 28). The amendments address an inconsistency between the requirements in PFRS 10 and in PAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The amendments require that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. Originally, the amendments apply prospectively for annual periods beginning on or after January 1, 2016 with early adoption permitted. However, on January 13, 2016, the FRSC decided to postpone the effective date of these amendments until the IASB has completed its broader review of the research project on equity accounting that may result in the simplification of accounting for such transactions and of other aspects of accounting for associates and joint ventures.

20 Deferral of the Local Implementation of Philippine Interpretation IFRIC 15 Agreements for the Construction of Real Estate Philippine Interpretation IFRIC 15 Agreements for the Construction of Real Estate applies to the accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors. It provides guidance on the recognition of revenue among real estate developers for sales of units, such as apartments or houses, off plan ; i.e., before construction is completed. It also provides guidance on how to determine whether an agreement for the construction of real estate is within the scope of PAS 11 Construction Contracts, or PAS 18 Revenue, and the timing of revenue recognition. The SEC issued a Notice dated August 5, 2011 to further defer the implementation of Philippine Interpretation IFRIC 15 Agreements for the Construction of Real Estate until the final Revenue standard is issued by the International Accounting Standards Board (IASB) and after an evaluation on the requirements and guidance in the said standard vis-à-vis the practices and regulations in the Philippine real estate industry is completed. Financial Instruments Date of Recognition The Group recognizes a financial asset or financial liability in the consolidated statements of financial position when it becomes a party to the contractual provisions of the instrument. In the case of a regular way purchase or sale of financial assets, recognition is done using settlement date accounting. Initial Recognition of Financial Instruments Financial instruments are recognized initially at fair value. The initial measurement of financial instruments, except for those designated as at fair value through profit or loss (FVPL), includes transaction costs. Financial Assets The Group classifies its financial assets, at initial recognition, in the following categories: financial assets at FVPL, loans and receivables, available-for-sale (AFS) financial assets and held-to-maturity (HTM) investments. The classification depends on the purpose for which the investments are acquired and whether they are quoted in an active market. The Group determines the classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date. The Group has no HTM investments, AFS financial assets and financial assets at FVPL as at June 30, 2017 and December 31, Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments and maturities that are not quoted in an active market. They are not entered into with the intention of immediate or short-term resale and are not designated as AFS financial assets or financial assets at FVPL.

21 Subsequent to initial measurement, loans and receivables are carried at amortized cost using the effective interest rate method, less any impairment in value. Any interest earned on loans and receivables is recognized as part of Interest income account in the consolidated statements of comprehensive income on an accrual basis. 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. The periodic amortization is also included as part of Interest income account in the consolidated statements of comprehensive income. Gains or losses are recognized in profit or loss when loans and receivables are derecognized or impaired. Cash includes cash on hand and in banks which are stated at face value. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. The Group s cash and cash equivalents, receivables, due from related parties and refundable deposits under Prepaid expenses and other current assets - net and Other noncurrent assets accounts are included in this category (Notes 6, 7, 9 and 13). Financial Liabilities The Group classifies its financial liabilities, at initial recognition, in the following categories: financial liabilities at FVPL and other financial liabilities. The Group determines the classification of its financial liabilities at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group has no financial liabilities at FVPL as at June 30, 2017 and December 31, Other Financial Liabilities This category pertains to financial liabilities that are not designated or classified as at FVPL. After initial measurement, other financial liabilities are carried at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any premium or discount and any directly attributable transaction costs that are considered an integral part of the effective interest rate of the liability. The effective interest rate amortization is included in Interest expense account in the consolidated statements of comprehensive income. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the amortization process. The Group s accounts payable and other current liabilities, due to related parties, notes payable, bonds payable and other noncurrent liabilities (excluding payables to government agencies and unearned rent income) accounts are included in this category (Notes 14, 15 and 17). Derecognition of Financial Assets and Financial Liabilities Financial Assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when: the rights to receive cash flows from the asset have expired; or

22 the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; 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 rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group s continuing involvement. In that case, the Group also recognizes the associated liability. The transferred asset and the associated liability are measured on the basis that reflects the rights and obligations that the Group has retained. Financial Liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires. 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. The difference in the respective carrying amounts is recognized in profit or loss. Impairment of Financial Assets The Group assesses, at the reporting date, whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. For financial assets carried at amortized cost such as loans and receivables, the Group first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If no objective evidence of impairment has been identified for a particular financial asset that was individually assessed, the Group includes the asset as part of a group of financial assets with similar credit risk characteristics and collectively assesses the group for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognized, are not included in the collective impairment assessment. Evidence of impairment for specific impairment purposes may include indications that the borrower or a group of borrowers is experiencing financial difficulty, default or delinquency in principal or interest payments, or may enter into bankruptcy or other form of financial reorganization intended to alleviate the financial condition of the borrower. For collective impairment purposes, evidence of impairment may include observable data on existing economic conditions or industry-wide developments indicating that there is a measurable decrease in the estimated future cash flows of the related assets.

23 If there is objective evidence of impairment, the amount of loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows (excluding future credit losses) discounted at the financial asset s original effective interest rate (i.e., the effective interest rate computed at initial recognition). Time value is generally not considered when the effect of discounting the cash flows is not material. If a loan or receivable has a variable rate, the discount rate for measuring any impairment loss is the current effective interest rate, adjusted for the original credit risk premium. For collective impairment purposes, impairment loss is computed based on their respective default and historical loss experience. The carrying amount of the asset is reduced either directly or through the use of an allowance account. The impairment loss for the period is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in profit or loss, to the extent that the carrying amount of the asset does not exceed its amortized cost at the reversal date. Classification of Financial Instruments between Debt and Equity From the perspective of the issuer, a financial instrument is classified as debt instrument 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 Group; 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. Debt Issue Costs Debt issue costs are considered as an adjustment to the effective yield of the related debt and are deferred and amortized using the effective interest rate method. When a loan is paid, the related unamortized debt issue costs at the date of repayment are recognized in profit or loss. Offsetting Financial Instruments Financial assets and financial liabilities are offset and the net amount is 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 assets and settle the liabilities 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. Fair Value Measurements 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 fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or most advantageous market must be accessible to the Group.

24 The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: inputs for the asset or liability that are not based on observable market data. For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing the categorization at the end of each reporting period. For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy. Inventories Real Estate Inventories Real estate inventories are properties that are acquired and developed or constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation. They consist of acquisition cost of land and other related development costs, capitalized borrowings and other capitalized costs. These are carried at the lower of cost or net realizable value (NRV). NRV is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs to make the sale. The cost of real estate inventories recognized in profit or loss is determined with reference to the specific costs incurred on the property and allocated to saleable area based on relative size. Hotel Inventories Hotel inventories are valued at the lower of cost and NRV. The cost of hotel inventories is determined using the weighted average method and includes all expenditures incurred in acquiring the inventories and in bringing them to their existing location and condition. NRV is the estimated selling price in the ordinary course of business less the estimated costs of marketing and distribution necessary to make the sale.