COVER SHEET for AUDITED FINANCIAL STATEMENTS. SEC Registration Number Aji}9}9}9/1/5]9] 1] 0 COMPANY NAME piniB] [frre] jrin{siulrialniclel,] [rinfc PRINCIPAL OFFICE (No /Siee/Barengay/ Cty / Town /Provnca) Foo Type Deparment requrng the reper ‘Secontary cans Type, I Applcable AA[F|S sjg|c COMPANY INFORMATION ‘Companys Ered Adress ‘rips Telephone Number Mabie Naber 818-5433 = No.of Stxknobios Anal Meetng (Month/Day) Fiscal Year (Monthy) n 32 1281 CONTACT PERSON INFORMATION The designed contact parson MUST be an Offa of he Crporaon Name of Contac Person mat Adress ‘Telephone Nurbeds Mobile uber Caesar P, Altarejos, Jr, ‘eaetaraliareios@onblifecom - ‘CONTACT PERSON’s ADDRESS: 10* Floor, Allied Bank Center, 6754 Ayala Avenue, Makati City NOTE Tin Gave of death, resgnaton or cesaton of oce of tha acer desbaled os corae pean, sur Reo shal Be raped fo te Commision win tity (30) clencer dye tom the occurance ther! wah nfomasfen end complete contest dla o te new conic! person dsirated 2: Al Boxes must bo propery ard conpltsy Ails.up. Falure to do so shal couse the delay in undetng the comport’ records wth the Commission ander nonreslt of Note of Defiencis. Further, renee of Nolce of Defences shal nok excuse Oe corre fom abit fs deficenc.SGV SyCip Gore Velaye & Co. Tel (632) 801 0307 GONPRC Reg. No, 000%, 760 Ayes Avenue Fes (032)810.0072 December, 2026, valid unt# Decamber 31, 2018 1226 Maxat Cy excomiph ‘SEC Accreditation No. 0012-FR-4 (Group Building a better Phitppines ‘November 10,2078, vad urti Never ‘working word i be 10,2076, valid unts Never 2038 INDEPENDENT AUDITORS’ REPORT ‘The Stockholders and the Board of Directors PNB Life Insurance, Inc. 10th Floor, Allied Bank Center 6754 Ayala Avenue, Makati City Report on the Financial Statements We have audited the accompanying financial statements of PNB Life Insurance, Inc., which comprise the statements of financial position as at December 31, 2015 and 2014, and the statements of income, ‘statements of comprehensive income, statements of changes in equity and statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. ‘Management's Responsibility for the Financial Statements ‘Management is responsible for the preparation and the fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as ‘management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibilty is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that ‘we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. ‘An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are ‘appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements, We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for cour audit opinion. Sate | APR 21 206 | TSIS RECEIVED WA, GRACIAAURORA Ly CASTILLO.SGV Bulging a etter ‘rorming won Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of PNB Life Insurance, Inc. as at December 31, 2015 and 2014, and its financial performance and its cash flows for the years then ended in accordance with Philippine Financial Reporting Standards Report on the Supplementary Information Required Under Revenue Regulations 15-2010 Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information required under Revenue Regulations 15-2010 in ‘Note 30 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such information is the responsibility of the management of PNB Life Insurance, Inc. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole, SYCIP GORRES VELAYO & CO. CPA Certificate No. 0097907 SEC Accreditation No. 1285-A (Group A), February 25, 2013, valid until February 24, 2016 Tax Identification No. 201-960-347 BIR Accreditation No. 08-001998-102-2015, ‘November 25, 2015, valid until November 24, 2018 PTR No. 5321641, January 4, 2016, Makati City February 3, 2016 ©) APR 21 2016 | Tsis RECEIVED NA, GRACIAAURURA Ly CASTILLOPNB ‘STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS, ‘The management of PNB Life Insurance, Inc, is responsible for the preparation and fair presentation of the financial statements for the years ended December 31, 2015 ‘and 2014, including the additional components attached therein, in accordance with accounting principles generally accepted in the Philippines. This responsibilty ineludes designing and implementing internal controls relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, ‘and making accounting estimiates that are reasonable in the circumstances. ‘The Board of Directors reviews and approves the financial statements and submits the same to the stockholders. ‘SyCip Gorres Velayo & Co., the independent auditors appointed by the stockholders has examined the financial statements of the company in accordance with Philippine Standards on Auditing, and in its report to the stockholders has expressed its opinion (on the fairness of the presentation upon completion of such examination. REBECCA B. DELA CRUZ President & CEO AKESKRD_ALTARELOS. JR.PNB LIFE INSURANCE, INC. STATEMENTS OF FINANCIAL POSITION December 31 2015 2014 ASSETS Cash and Cash Equivalents (Notes 4, 27 and 28) 717,662,812 410,236,605 Insurance Receivables (Notes 5 and 28) 60,402,832 76,442,961 Financial Assets (Notes 6 and 28) Available-for-sale financial assets 7,474,892,965 6,669,547,016 Held-to-maturity investments 982,619,353 974,746,864 Loans and receivables (Note 27) 353,388,854 304,339,805 Segregated Fund Assets (Notes 6, 9 and 28) 13,714,995,150 10,750,694,926 Prepayments and Deposits (Notes 7 and 29) 6,627,847 4,201,126 Reinsurance Assets (Note 11) 4,944,345 3,783,235 Property and Equipment - net (Note 8) 29,545,692 23,007,627 Other Assets (Note 10) 56,565,940 41,914,126 P23,401,645,790_P19,258,914,291 LIABILITIES AND EQUITY Liabilities Insurance provisions (Notes 11, 12 and 28) 76,837,144,498P5,857,020,754 Due to reinsurer 9,167,566 4,886,817 ‘Segregated fund liabilities (Notes 9 and 28) 13,725,321,275 10,817,122,252 Premium deposit fund (Notes 13 and 28) 476,686,327 482,796,195 Accounts payable and accrued expenses (Notes 14 and 28) 382,479,022 416,717,560 Pension liability - net (Note 25) 21,822,321 24,381,638 Total Liabilities 21,452,621,009 _ 17,602,925,216 Equity Capital stock (Note 15) 250,000,000 250,000,000 ‘Additional paid-in capital 50,000,000 50,000,000 Contingency surplus 1,300,000,000 _1,300,000,000 Reserve for fluctuation on available-for-sale financial assets (Note 6) 531,046,064 574,443,373 Deficit (182,021,283)__ (518,454,298) Total Equity 1,949,024,781 _1,655,989,075 P23,401,645,790_P19,258,914,291 See accompanying Notes to Financial Statements RECEIVED vis, GRACIAMURURA L, CASTILLOPNB LIFE INSURANCE, INC. STATEMENTS OF INCOME REVENUE Gross premiums on insurance contracts Years Ended December 31 2015 2014 B1,733,775,734 P1,614,556,907 Reinsurers’ share of gross premiums on insurance contracts (17,467,727) (10,057,249) Net insurance premiums (Note 16) 1,716,308,007 _1,604,499,658 Investment income (Notes 4, 6 and 17) 470,838,194 423,015,319 Referral and trust fees (Note 18) 141,621,003 95,721,841 Gain on sale of available-for-sale financial assets - net (Note 6) 20,874,394 14,661,369 Miscellaneous income (Note 19) 10,268,758 4,303,657 Other revenue 643,602,349 537,702,186 Total revenue 2,359,910,356__2,142,201,844 BENEFITS, CLAIMS AND EXPENSES Gross life insurance contract benefits and claims 444,367,487 432,839,766 Reinsurers’ share of life insurance contract benefits and claims (3,433,563) _ (3,010,042) Gross change in life insurance contract liabilities 842,275,163 756,861,142 Reinsurers” share of change in life insurance contract liabilities (1,161,110) 4,666,564 Net insurance benefits and claims (Note 20 1,282,047,977__1,191,357,430 ‘Commissions and agency related compensation (Note 21) 277,298,831 333,361,719 Salaries, wages and employee benefits (Note 24) 51,636,143 46,358,242 Taxes and licenses (Note 22) 29,437,756 28,061,891 Interest expense (Note 13) 9,239,766 8,191,464 Medical fees 1,813,984 1,426,502 Insurance expenses 369,426,480 417,399,818 General and administrative expenses (Note 23) 322,242,309 ___ 226,653,843 Total benefits and expenses 1,973,716,766 __1,835,411,091 INCOME BEFORE INCOME TAX 386,193,590 306,790,753 PROVISION FOR INCOME TAX (Note 26) 44,305,317 43,171,518 NET INCOME 341,988,273 P 263,619,235 ‘See accompanying Notes to Financial Statements EER 05S ANE Dio APR 21 206 | Tsis RECE Was GRACIAAURORAL, CASTILLOPNB LIFE INSURANCE, INC. STATEMENTS OF COMPREHENSIVE INCOME. Years Ended December 31 2015 NET INCOME. 341,888,273 OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (1oss) that will be reclassified to profit or loss in the subsequent periods: Fair value gains (losses) on available-for-sale financial assets (Note 6) (43,397,309) Other comprehensive income (loss) that will not be reclassified 10 profit or loss in the subsequent periods: 2014 263,619,235 125,986,649 Re-measurement losses on defined benefit plan (Note 25) (5,455,258) (11,546,088) Other comprehensive income (losses) for the year (48,852,567) 114,440,561 TOTAL COMPREHENSIVE INCOME. 293,035,706 __P378,059,796 ‘See accompanying Notes to Financial Statements. UESLOGSESS9 1d (BET HSY'SISH) ELE EbY ELSE 000%000'00E"id __000'000'0Se 000°000'0Sca loz ‘Te 9quI99q IV 96L°6S0'RLE pT ELOCST, CPF ORE STL = = = ‘BUTOOUT eATstaySIaCHOS [CO “Tasos T1) OVI ORE STL = 7 TSF) OUTST SATSTOHSIAWOS OHIO SEC6I9'EST - = - = ‘u0out JON GLTOCOLLT lA SPV LES OLLA) PEL OSV'BVVE 000°000°00E"1e ~~ 000'000'0Se ‘000°000"0Sza prog T Aron ay TE VEOOe TA CERT TLOTSI) pOTOFOTESA OOD OON OE Ta 000000 USE ‘oon 000" 0Sta ‘Siz Te 29qaC IV ‘OLSEN EST SIOESF OSE OE L6E EH) ia! = = (80]) SuTOOUT OAISUOyoICUIOS THIOL (9s tS88b) (esvsst's) Oe Lor eh) ot = FA Wo] SAIsUays TAOS IIS ELT BBS'EVE ELT RBS'TPE 7 in - - ‘M109u JON SLOGRESSN Ta (ROTHSFBISA) ELE EPY'PLSA __OO0'OONODETA _000°000'0Sa (000° 000°0STa SToe T Ganuepay THO, IU (20ND smjding rede (1 aN) spssy fepaeuy —foweBupwo3 pong rence) ayes-s05 -s1qeTeAy wo wopenyonpt 40} 94195941 107 ONY ST0z ‘Te AAWAAC AAGNA SUVAA IHL YOL ALINOA NI SHONVHD AO SINTWALVLS “ONI “AONVUASNI FATT ANdPNB LIFE INSURANCE, INC. STATEMENTS OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: ‘Years Ended December 31 2015 586,193,590 2014 306,790,753, Increase in aggregate reserve for life policies (Note 11) 841,114,053 761,527,706 Impairment loss 36,470,366 - Depreciation and amortization (Notes 8 and 23) 10,704,582 14,039,495 Write-off of property and equipment(Note 8) 37,327 - Unrealized foreign exchange loss (gain) (4,820,379) 1,487,331 Gain on sale of available-for-sale financial assets (Note 6) (20,874,394) (14,661,369) Dividend income (Note 17) (79,279,842) (59,629,432) Interest income (Notes 4, 6 and 17) (368,126,622) __ (363,385,887) ‘Operating income before changes in working capital 901,418,681 646,168,597 ‘Changes in operating assets and liabilities: Decrease (increase) in: Insurance receivables 16,040,130 (24,813,485) Loans and receivables 35.641,846) (31,762,068) Segregated fund assets (@,964,300,224) _(2,889,006,540) Prepayments and deposits (@,426,721) 405,909 Reinsurance assets, 161,110) 4,666,564 Other assets (10,067,724) (4,513,433) Increase (decrease) in: Insurance provisions 139,009,691 73,688,365 Due to reinsurers 4,280,749 (1,707,857) Segregated fund | 2,908,199,023 _2,905,327,630 Premium deposit fun (6,109,868) 272,227,387 ‘Accounts payable and accrued expenses 64,238,538) 204,962,269 Net pension liability (8,014,575) (325,367) Net cash generated from operations 806,987,668 _1,155,317.971 Dividend received 79,345,501 59,629,433 Interest received 373,143,740 372,669,837 Income tax paid (48,889,407) __(51,666,454) ‘Net cash from operating activites ¥,210,587,502____1,535,950,787 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of: Available-for sale nancial assets (Note 6) (6,023,278,217) (6,424,047, 44) Property and equipment (Note 8) (17,646,837) (6,207,556) Proceeds from sale/maturity/tetirement of: ‘Available-for sale financial assets (Note 6) $,.214,214,627—_5,034,747,501 Held-to-maturity 11,037,500 - Property and equipment 366,863, (395,307,199) ‘Net cash used in investing activities (815,306,064) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (87.855231) 2,295,886) NET INCREASE IN CASH AND CASH EQUIVALENTS 307,426,207 138,147,702 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 410,236,605 __ 272,088,903, ‘CASH AND CASH EQUIVALENTS ATEND OF YEAR P717,662,812 410,23 ‘See accompanying Notes to Financial Staiemend