SEC Form 17-A: Annual Report - the solid group inc website

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Borrowing costs incurred from loans availed by Fil-Dragon were capitalized as part of
its Property development costs. Borrowing cost incurred in 2012 and 2011 relating to
these loans amounted to RMB5.0 million (P32.9 million) and RMB1.5 million
(P9.7 million) respectively, and are capitalized as part of Real Estate Inventories
(see Notes 15 and 26.8).
The allowance for impairment recognized in 2005 pertains to the estimated cost of
parcels of land and land development costs which may not be fully realized as a result of
the Group’s long-outstanding claims against the seller for the transfer of title to the
name of LIIP. There were no additional impairment losses recognized since then.
Under its registration with the Board of Investments, Starworld shall develop
118 hectares of land in its development project located in Calamba Premiere
International Park (CPIP) in Bo. Prinza, Calamba City, Laguna. As of
December 31, 2012, lot areas totalling 83 hectares (65 hectares for Phase 1 and
18 hectares for Phase 2) were acquired and fully developed.
The Group, through ZTC, has initiated the planning and construction of the
Tri Towers condominium building. The construction was started by SMC in 2005.
The accumulated construction costs (including cost of the land) were eventually
transferred to ZTC. The construction of Tower 1 and Tower 2 was completed in
completed in 2008 and 2012, respectively, while the construction of Tower 3 has not yet
started as of December 31, 2012.
In addition, the balances of Property Development Costs as of December 31, 2012 and
2011 include costs incurred in the construction of the Group’s Golden Hill Project
through Fil-Dragon (see Note 28.7). The Golden Hill Project involves the development
of multi-storey residential and commercial condominium units within the ASEAN
Commercial Park in Nanning City, Guangxi Province, PRC. In 2010, Fil-Dragon has
obtained sales permit for selling the property from the local government of the PRC.
Customer deposits received as of December 31, 2012 and 2011 amounting to
P840.1 million and P686.3 million, respectively, are shown as part of Customers’
Deposits in the consolidated statements of financial position.
Fil-Dragon’s right to use the land, included as part of the Property Development Costs
account, with a carrying amount of RMB15.2 million (P103.3 million) as of
December 31, 2010, was pledged as collateral for interest-bearing loans obtained by
Fil-Dragon in 2009. The interest-bearing loans were paid in full in 2011 (see Note 15).
There were no movements in the Estimated Liability for Land and Land Development
Costs account in 2012 and 2011 which was established for the fulfilment of Starworld’s
projects in the development and marketing of CPIP (see Note 28.4).