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Notes to Consolidated Financial Statements - 43 -

In 2013, litigation ensued between the Alphaland Group and the Wenceslao Group because of the Wenceslao Group’s attempts to delay the construction and development of the Alphaland Group’s Marina Club project (see Note 28). The definitive agreement signed by the major shareholders of ALPHA discussed in Note 1 includes the transfer of the Group’s interest in ABCC and the settlement of the dispute with the Wenceslao Group. Thus, the Group’s investment in ABCC is recoverable. ii. AMPI and BSP (Joint Operation)

On June 30, 2008, AMPI and BSP entered into a Joint Venture Agreement to develop the Malugay Property into a first class commercial development to be known as Alphaland Makati Place (the “Project”) whereby BSP shall contribute the Malugay Property while AMPI shall contribute the improvements (the “development costs”) and its exclusive rights (the “leasehold rights”) over the Malugay Property, as well as to provide all necessary funds, equipment, materials, construction works, expertise and related undertakings for the development of the Project. The Project consists of three high-end residential towers atop an upscale six-storey podium, the bottom half of which is a shopping center and the top half a City Club for urban sports and leisure. The Project also includes a Boy Scout Convention Center as provided in the Joint Venture Agreement. AMPI and BSP agreed to share at 85% and 15%, respectively, of the total gross floor area of completed and disposable units in the Project. The 85% share of AMPI shall include the City Club and the 15% share of BSP shall include the Boy Scout Convention Center. As provided in the Joint Venture Agreement, AMPI shall submit progress reports of the development works in the Project on a regular basis to BSP. On June 2, 2011, BSP sold the Malugay Property to AMPI for a total consideration of = P600.0 million. The amount of consideration paid to BSP was then contributed by BSP to the Project which is being held by AMPI in trust for the development of the Project. The leasehold right was effectively terminated when AMPI acquired the land from BSP in June 2011. Pursuant to the Joint Venture Agreement, ALPHA has issued a corporate guaranty in favor of BSP whereby, in the event AMPI is unable to complete the Project (for reasons attributable to the fault of AMPI), ALPHA shall pay BSP the amount of = P600.0 million in exchange for BSP’s 15% share in the sharing scheme as defined in the Joint Venture Agreement. The Group accounts for the joint venture agreement as a joint operation. As of December 31, 2013 and 2012, the Group recognized its share in the development costs of the Project (excluding the costs related to the City Club - see Note 11) in the following accounts: Land and development costs (see Note 8) Investment properties (see Note 12)

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2013 P =1,786,169,791 1,673,143,182 P =3,459,312,973

2012 =913,880,042 P 2,332,536,420 =3,246,416,462 P

*SGVFS003458*

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