ali annual report 2011a

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    About this Integrated Annual and Sustainability ReportThis fully integrated Annual and Sustainability Report is a testament to our

    commitment to sustainable business practices. This year, we continue to report

    our financial performance together with the sustainability initiatives that we have

    adopted, as we believe these two are invariably linked.

    More and more, sustainability has become relevant to our business, and your

    Company has likewise progressed in assimilating various systems to ensure that

    our business will continue through the years and that our buildings make the

    least impact to the environment. For this reporting period, we tracked our

    performance on 79 Global Reporting Initiative (GRI) indicators, 39% more than

    the indicators tracked in 2010, making this self-declared report compliant

    with GRI application level A guidelines.

    The sustainability section of this report covers the performance of Ayala Land,

    Inc., Alveo Land Corporation, Avida Land Corporation, and Ayala Property

    Management Corporation. This report, together with our past publications,

    may be downloaded from our websites at www.ayalaland.com.ph and

    ir.ayalaland.com.ph. We would appreciate any feedback you may want to share

    in order for us to further improve our sustainability practices. You may also

    contact us about this report via e-mail at integratedreport@ayalaland.com.ph.

    About the coverOur cover quote is taken from the Message of our President, Antonino T.

    Aquino, which begins on page 8.

    From residential homes to office buildings, from shopping districts to hotelsand resorts, our cover image illustrates the focus of our development

    process. While every undertaking in Ayala Land begins with a vision, rigorous

    planning and a firm commitment to deliver quality in everything we do

    ensures that we remain the largest and most diversified property developer in

    the Philippines.

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    Enhancing Land and Enriching Lives, for More PeopleOur vision is to enhance our standing and reputation as the Philippines

    leading real estate developer and to be a strong partner in nation building.

    By developing integrated, masterplanned and sustainable mixed-use

    communities in vibrant growth centers all over the country, we strive tocontinually elevate the quality of life for all of our customers.

    We shall be a responsible corporate citizen and act with integrity, foresight and

    prudence. We shall empower our employees to deliver products that exceed

    our customers expectations and build long-term value for our shareholders.

    Table of Contents

    2011 in Review 2 Year in Summary

    6 Chairmans Letter 8 Presidents Message

    16 CFO and Compliance

    Officers Report

    Our Businesses 22 Property Development

    28 Commercial Leasing

    30 Hotels and Resorts

    32 Services

    Corporate Governance 36 Board of Directors

    40 Management Committee

    42 Corporate Governance Report

    48 Risk Management Report

    Sustainability Report 52 Letter from the Sustainability Committee

    53 Management Approach55 Sustainability Framework

    56 Environmental Stewardship

    and Impact Reduction

    63 Community Stewardship

    and Social Development

    67 Personnel Development, Health,

    and Safety

    71 Market Shaping

    73 Awards and Recognition

    74 Stakeholders Commentaries 75 GRI Index

    Financial Review 80 Managements Discussion

    and Analysis of Financial Results

    83 Report of the Audit and Risk Committee

    84 Statement of Managements

    Responsibility

    85 Report of Independent Auditors

    86 Financial Statements 93 Notes to Financial Statements

    160 Subsidiaries and Affiliates

    162 Key Officers and Consultants

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    year in summary

    How did we do?

    1

    3

    return on equity12%

    Net Income After TaxP 7.1Bnet income capexP29.9B

    4,368 4,812 4,039

    5,458

    7,140

    15,41318,893

    16,23320,055

    29,914

    10% 10% 10%

    12%

    8%

    We increased our cash

    dividend by 58% and thedividend payout ratio from

    30% to 35%.

    We achieved a record

    net income of P7.1

    billion, 31% higher

    than 2010.

    We spent P29.9 billion

    in capital expenditure(CAPEX), a new record

    that was 49% higher

    than 2010.

    2 2011 Integrated Annual and Sustainability Report

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    NUmber of residentialunits launched

    SQUARE METERS OFGROSS LEASABLE AREA

    (GLA)

    residential Units Launched

    20,613

    5,182 4,2382,229

    10,115

    20,613ShoppingCenters

    Offices

    1,080 449

    397

    359

    1,007

    993

    975 216

    138972

    We expect an additional

    274,000 sqm. of shopping

    center GLA and 91,000

    sqm. of BPO office GLA

    to come on stream in the

    next two years.

    We doubled

    our number of

    residential units

    launched, setting a

    new all-time high.

    sustainability reportA-LevelWe progressed to A-level,

    reporting this year with 79

    sustainability indicators, 22(or 39%) more than 2010.

    we continued to build on our initial gainsas we posted another record year in

    terms of net income and revenues.

    16

    2337

    57

    79

    1.5M

    3Ayala Land, Inc.

    yearinSumma

    ry

    essages

    urBusinesses

    governance

    sustainability

    financialreview

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    6 NEWGROWTH CENTERSADDED TO THE PORTFOLIO

    The Companys growth objectives are anchored along the

    three elements of geographic expansion, product diversity,

    and market diversification. Last year, we entered into and

    strengthened our presence in six new areas out of the 31 growth

    centers that we identified. These include prime locations within

    Metro Manila and nearby areas, as well as strategic properties

    in the provinces. These new growth centers will soon showcase

    Ayala Lands mixed-use projects where we integrate our diverse

    portfolio of residential, leasing, and hotel products within a

    single development.

    In line with our 5-10-15 Plan, we launched a total of 67 projects worth

    P70 billion in 2011. We likewise continued to innovate as we unveiled

    new product concepts in our residential business to diversify our

    portfolio. The Company broadened its reach towards the base of the

    economic pyramid with the official launch of our fifth residential brand,

    BellaVita, which will cater to the socialized housing segment.

    P70Bworth

    of projectS

    launcheD

    VALUE OF PROJECTSLAUNCHED(IN BILLION PESOS)

    10

    62 70

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    8/1666 2011 Integrated Annual and Sustainability Report

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    chairmans letter

    My Fellow Shareholders,

    The Philippine economy was resilient in 2011 even amidst the challenges that confronted the

    global environment. Philippine domestic consumption remained robust, partly underpinned

    by the sustained growth of overseas Filipino (OF) remittances which increased by 7% during

    the year. The countrys fiscal position remained healthy, driving interest rates to lower levels

    and reducing over-all perceived risk for the country. This in turn improved our countrys credit

    rating to just below investment grade. Liquidity and credit both remained supportive of growth,

    benefitting many domestic businesses across various sectors, particularly real estate.

    It was against this backdrop that your

    Company posted another record-

    breaking year in 2011. As the property

    sector experienced sustained demand

    across the residential, retail, office, and

    hotel sectors, Ayala Land continued

    its aggressive investment plan, which

    began in earnest in 2010.

    We followed through in 2011 with

    a number of successful product

    launches in the residential segment

    under the Ayala Land Premier, Alveo

    and Avida brands. In addition to this,

    we expanded our reach to cover new

    geographies and capture consumers

    in even lower income segments.

    Through our Amaia brand, we launched

    six projects and introduced two new

    formatsAmaia Steps and Amaia

    Skies. These completed our offering

    in the economic housing segment.

    We further expanded our reach in thisend-user market and launched our fifth

    residential brand under BellaVita which

    shall cater to the socialized housing

    segment. These two brands, Amaia

    and BellaVita, will allow us to diversify

    our residential portfolio and expand the

    growth of our residential business in

    the coming years. We believe these

    two brands will also help uplift the

    living standard of more Filipinos as we

    provide good quality, affordable homes

    for this segment of the market. Across

    all our five brands, the Residential

    Business Group generated record

    sales in 2011.

    Our leasing business likewise reported

    good results as we expanded

    our footprint to take advantage of

    increasing disposable incomes from

    OF remittances and rising employment

    and revenues in