MORNBFI Vol. 1 - Planters Development Bank

§ 4394Q.1508.12.31(3) Relationship of the QB with thedeveloper, if any;(4) List and brief description of theproperties to be contributed by the QBincluding their market values, book valuesand the valuation agreed upon under theproposed JVA;(5) Certification by the QB’s presidentor officer of equivalent rank that the JVA isstrictly in compliance or will strictly complywith the requirements of this Subsection;and(6) Such other documents/informationthat the concerned department of the SESmay require.f. Non-financial allied undertakingAll types of QBs are hereby authorizedto invest in the equities of companiesengaged in real estate development as anon-financial allied undertaking, subjectto the following conditions:(1) Investments shall be limited toROPAs and other properties acquired asa consequence of a QB’s merger/consolidation with another QB/FI;(2) Investments shall be subject toexisting BSP requirements applicable toinvestments in non-financial alliedundertakings; and(3) If there is already an existingsubsidiary or affiliate relationship betweenthe QB and the investee corporation priorto the investment, the QB shall not recognizeincome out of its invested properties. Theexcess of the value of the capital stockreceived by the QB over the book value ofits invested properties shall be booked as“Deferred Credits”.g. Accounting treatment. Accountingtreatment of the properties contributed bya QB to a joint venture or invested in theequities of developers.(1) In a joint venture in the form of ajointly controlled operations/undertaking,which does not involve the establishmentof a corporation or other entity, the QBshall continue to recognize in its booksthe properties contributed to theundertaking. However, the regularprovisioning against probable lossesrequired under existing regulations maybe discontinued upon execution andimplementation of the JVA.(2) In a joint venture in which acorporation is created, the QB shall bookthe properties contributed to the undertakingas investment pursuant to the provisions ofPAS 31. It shall also recognize its interest inthe corporation using the proportionateconsolidation method or the equity methodas long as it continues to have joint controlover the corporation: Provided, That the QBshall not recognize income out of itscontribution to the joint venture. The excessof the value of the capital stock received bythe QB over the book value of thecontributed properties shall be credited tothe account “Deferred Credits”.(3) Properties invested in equities ofdevelopers shall be booked in accordancewith the PAS: Provided, That the QB shallnot recognize income out of the propertiesinvested if there is already an existingsubsidiary or affiliate relationship betweenthe QB and the investee corporation priorto the investment, regardless of the agreedvaluation of said properties. The excess ofthe agreed valuation of said properties overtheir book value shall be booked as“Deferred Credits”.h. Coverage. The provisions of thisSubsection shall apply to ROPAs existing,as well as those which may be acquiredby QBs in settlement of non-performingor past due loans and advancesoutstanding, as of 09 March 2006 and toproperties acquired as a consequence ofmerger or consolidation which areoutstanding in the books of QBs as of saiddate.i. Sanctions. Any violation of theprovisions of this Subsection and/or anyQ RegulationsPart III - Page 38Manual of Regulations for Non-Bank Financial Institutions