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Twenty years ago, we changed the course of our history.

We built on the strengths of D.M. Consunji, Inc. and became a diversified engineering and construction conglomerate.

As a new decade begins for our Company, we see a reshaping of our growth strategy. One that involves more outward collaborations, new products and sustainable technologies.

In doing so, we hope to continue changing the course of our history.

CONSTRUCTION

Building complex, large-scale infrastructure is our continuing commitment to nation building.

REAL

ESTATE

Our goal is to provide more middle class families with high-quality homes.

ENERGY

We will do our part in making electricity accessible, reliable and affordable.

THE DMCI DIFFERENCE

DMCI Holdings is a diversified engineering conglomerate, primarily engaged in general construction, real estate development, power generation, mining, water distribution and manufacturing.

Among the publicly-listed holding companies in the Philippines, it is the only one that has construction as its core investment.

the publicly-listed holding companies in the Philippines, it is the only one that has construction as
the publicly-listed holding companies in the Philippines, it is the only one that has construction as
the publicly-listed holding companies in the Philippines, it is the only one that has construction as

OUR VISION

To be an INSTITUTION in the construction industry committed to the economic and social development of the country

To be the LEADING integrated Philippine construction company

To be a WELL-MANAGED PROFESSIONAL COMPANY with strong technical

and commercial performance adhering to the highest ethical standards

To PROVIDE OPPORTUNITY FOR EMPLOYEES to develop talents, skills and

personality, rewarding merit and hard work with fair compensation for them to live in dignity

To be the MOST INNOVATIVE AND COST-EFFICIENT PROVIDER

of comprehensive construction services

OUR CREED

WE BELIEVE:

That construction is a NOBLE PROFESSION whose activities are vital to economic development and national progress;

That FAIR COMPETITION is essential to the growth and stability of the construction industry;

That a contractor’s primary responsibility to his client is to give his best in FAITHFUL COMPLIANCE with their agreement;

That LABOR AND CAPITAL SHOULD COOPERATE with one another so that

labor may live with dignity and capital may find its just rewards;

That the ILL-GOTTEN VIOLATES business ethics and the ILL-CONCEIVED

WREAKS HAVOC on the public good;

That the ultimate objectives are to serve not only man but humankind, and to build not only an enterprise but an institution that will SERVE SOCIETY.

CONTENTS

4

6

7

8

9

10

12

Tracing the Growth

Key Figures

Consolidated Financial Highlights

Five-Year Stock

Performance

Five-Year Dividend History

Board of Directors

Letter to Shareholders

BUSINESS REVIEW

19

27

35

43

51

59

Construction

Real Estate

Coal Energy

Off-Grid Power

Nickel Mining

Water

67

91

133

Corporate Social Responsibility

Corporate

Governance

Awards and

Recognition

FINANCIAL STATEMENTS

136

137

138

141

143

152

Statement of Management’s

Responsibility for the Consolidated Financial Statements

Statement of Board of Directors’ Responsibility for Internal Controls and Risk Management Systems

Audit Committee Report to the Board of

Directors for the Year Ended 31 December

2015

Internal Auditor’s Report

Consolidated Financial Statements

Notes to Consolidated Financial Statements

ANNEX

302

307

308

310

312

313

Further Information on Board of Directors

Further Information on Key Officers

Business Structure

Effective Percentages of Ownership

Shareholding Statistics

Subsidiaries and their Key Officers

TRACING THE GROWTH O 18 DECEMBER 1995, DMCI HOLDINGS, INC. N was listed in the
TRACING THE GROWTH O 18 DECEMBER 1995, DMCI HOLDINGS, INC. N was listed in the

TRACING THE GROWTH

O 18 DECEMBER 1995, DMCI HOLDINGS, INC.

N

was listed in the Philippine Stock Exchange (PSE) to

extract greater value from the engineering expertise and construction resources of D.M. Consunji, Inc., the pioneering contractor behind some of the biggest and most complex infrastructures in the Philippines.

Fifteen years after its listing, DMCI Holdings (PSE: DMC) was included in the PSE main index for being among the top 30 listed firms in terms of liquidity and full market capitalization.

Of the 265 companies currently listed in the PSE, DMC is the only holding company that has construction as its core investment.

This core competency, coupled with the steady and strategic diversification of the company, has allowed it to deliver resilient growth and shareholder value despite the cyclical nature of construction.

INVESTMENT STRATEGY As builders, we have a different approach to investing. We choose industries that

INVESTMENT

STRATEGY

As builders, we have a different approach to investing.

We choose industries that allow us to leverage on our construction expertise and resources, while enabling the development of the country.

We are attracted to businesses with unrealized value that could be unlocked though innovative engineering.

We prioritize end-to-end integration over immediate economic returns because we believe that greater value is generated from having a good fit.

that greater value is generated from having a good fit. CORPORATE GOVERNANCE We are committed to

CORPORATE

GOVERNANCE

We are committed to the highest standards of corporate governance, and adhere to the rules and regulations of the Securities and Exchange Commission (SEC) and PSE.

Our corporate governance framework is designed to protect and balance the interests of our stakeholders, while facilitating high performance, transparency and accountability across our organization.

We believe that strong corporate governance constitutes sound business management.

corporate governance constitutes sound business management. SHAREHOLDER COMMITMENT Our primary goal is to deliver value

SHAREHOLDER

COMMITMENT

Our primary goal is to deliver value to our shareholders by growing our equity base and maintaining our high dividend-yield, while keeping a tight control over our debt and costs.

Consistent with our commitment to provide reasonable economic returns to our shareholders, we have a dividend payout ratio of at least 25 percent of the preceding year’s Consolidated Core Net Income.

In the last five years, our average dividend payout reached 51 percent, making us one of the best dividend-paying companies in the Philippine stock market.

KEY FIGURES

P57B

TOTAL REVENUES

P12.8B

NET INCOME

P12.3B

CORE NET INCOME

22 %

RETURN ON PARENT EQUITY

37

%

OPERATING

PROFIT MARGIN

P183B

MARKET

CAPITALIZATION

(as of 31 December 2015)

6 RESHAPING OUR GROWTH STRATEGY

REVENUE (IN BILLION PESOS)

56.6

2014

57.2

2015

CORE NET INCOME (IN BILLION PESOS)

10.3

2014

12.3

2015

EBITDA (IN BILLION PESOS)

18.2

2014

23.7

2015

NET INCOME (IN BILLION PESOS)

10.8

2014

12.8

2015

CONSOLIDATED NET INCOME BEFORE NON-CONTROLLING INTEREST AND NET DEBT TO EQUITY RATIO

BEFORE NON-CONTROLLING INTEREST AND NET DEBT TO EQUITY RATIO 33% 13.8 2014 2015 16.9 29% NET

33%

13.8 2014 2015
13.8
2014
2015

16.9

29%

NET INCOME BEFORE NON-CONTROLLING INTEREST

NET DEBT TO EQUITY RATIO 33% 13.8 2014 2015 16.9 29% NET INCOME BEFORE NON-CONTROLLING INTEREST

NET DEBT TO EQUITY RATIO

CONSOLIDATED FINANCIAL HIGHLIGHTS

(AMOUNTS IN THOUSANDS PHP EXCEPT EARNINGS PER SHARE)

 

2015

2014

% CHANGE

Total Assets Total Liabilities Total Equity Revenue Cost of Sales and Services Gross Profit Operating Expenses Income Before Income Tax Provision for Income Tax Net Income Before Non-controlling Interest Net Income After Non-controlling Interest Earnings Per Share

148,557

137,157

8

73,782

70,564

5

74,775

66,593

12

57,204

56,561

1

31,804

37,998

(16)

25,400

18,563

37

8,547

8,090

6

20,528

14,891

38

3,605

1,088

231

16,923

13,803

23

12,835

10,775

19

0.97

0.81

20

23 12,835 10,775 19 0.97 0.81 20 CORE NET INCOME AFTER NON- CONTROLLING INTEREST (IN BILLION

CORE NET INCOME AFTER NON- CONTROLLING INTEREST (IN BILLION PESOS)

12.3 10.5 10.3 9.6 9.7 2011 2012 2013 2014 2015
12.3
10.5
10.3
9.6
9.7
2011
2012
2013
2014
2015

EQUITY ATTRIBUTABLE TO PARENT (IN BILLION PESOS)

62.5 56.2 51.2 41.3 34.5 2011 2012 2013 2014 2015
62.5
56.2
51.2
41.3
34.5
2011
2012
2013
2014
2015

MAJOR CASH EXPENSES (IN BILLION PESOS)

8.6 CASH DIVIDENDS 6.7 PROJECT DEVELOPMENT COST 3.2 LAND ACQUISITION 7.1
8.6 CASH DIVIDENDS
6.7
PROJECT
DEVELOPMENT COST
3.2
LAND
ACQUISITION
7.1

EQUIPMENT / MACHINERY ACQUISITION AND OTHER CAPEX

FIVE-YEAR STOCK PERFORMANCE

17

16

15

14

13

12

11

10

9

8

7

6

FIVE-YEAR STOCK PERFORMANCE 17 16 15 14 13 12 11 10 9 8 7 6 2011

2011

2012

2013

2014

2015

DMCI Holdings, Inc. was listed in the Philippine Stock Exchange in

December 1995, under the ticker symbol DMC.

From P7.37 in 2010, DMC share price has risen to P13.80, which translates to

a compound annual growth rate (CAGR) of 13 percent for five (5) years.

During the same period, book value per share improved from P2.03 to

P4.71 for a CAGR of 18 percent.

 

2010

2011

2012

2013

2014

2015

Book Value per share* Share Price Year-end

2.03

2.60

3.11

3.86

4.23

4.71

7.37

8.26

10.79

11.20

15.70

13.80

(last trading day)

*adjusted to reflect 400% stock dividends

FIVE-YEAR DIVIDEND HISTORY

FIVE-YEAR DIVIDEND PAYOUT

61% 59% 9.6 51% 50% 6.4 6.4 6.4 5.9 33% 3.2 3.2 3.2 3.2 3.2
61%
59%
9.6
51%
50%
6.4
6.4
6.4
5.9
33%
3.2
3.2
3.2
3.2
3.2 3.2
3.2 3.2
2.7
2011
2012
2013
2014
2015
REGULAR
SPECIAL
TOTAL
PAYOUT (%)

We are committed to providing our shareholders with reasonable economic returns on their stock investments.

Our Dividend Policy aims for a dividend payout ratio of at least 25 percent of the preceding year’s Consolidated Core Net Income.

In the last five years, our total dividend payout has amounted to P31.5 billion or an average of 51 percent of total consolidated net income after minority of P61.8 billion from 2011 to 2015, which makes us one of the best dividend-paying companies in the Philippines.

From time to time, and as determined by the Board of Directors, we may declare special dividends as a return of excess funds to our shareholders.

DAVID M. CONSUNJI

Chairman Emeritus

HERBERT M. CONSUNJI Executive Director
HERBERT M.
CONSUNJI
Executive Director

LUZ CONSUELO A. CONSUNJI

Non-Executive Director

10 RESHAPING OUR GROWTH STRATEGY

ISIDRO A. CONSUNJI

Chairman

VICTOR A. CONSUNJI

Non-Executive Director

For further information on the Board of Directors, refer to the Annex.

CESAR A. BUENAVENTURA Vice-Chairman
CESAR A.
BUENAVENTURA
Vice-Chairman

MA. EDWINA C. LAPERAL

Executive Director

JORGE A. CONSUNJI Non-Executive Director
JORGE A. CONSUNJI
Non-Executive Director

Board of

HONORIO O. REYES-LAO

Independent Director

DIRECTORS

ANTONIO JOSE U. PERIQUET

Independent Director

DMCI HOLDINGS, INC. INTEGRATED ANNUAL REPORT 2015

11

Letter

TO SHAREHOLDERS

Letter TO SHAREHOLDERS FELLOW SHAREHOLDERS, This year has been particularly challenging for our Company. We faced

FELLOW SHAREHOLDERS,

This year has been particularly challenging for our Company.

We faced external headwinds and technical problems that tested our ability to deliver value and real benefits.

Weak commodity prices and decelerating growth in China put a downward pressure on our coal and nickel ore exports. We were also confronted with legal and regulatory issues that precluded us from completing key infrastructure projects on time.

Meanwhile, plant design difficulties and engine-related technical breakdowns in two energy projects led to commissioning delays and cost escalation.

In this letter, I want to focus on how our Company performed amid these challenges, while reflecting on how we can best move forward.

DMCI POWER

Strong Rebound

Our Company staged a strong rebound from our weakened performance in

2014.

Consolidated core net income grew 20 percent to P12.3 billion from P10.3 billion because of the improved operating performance of all our businesses.

Although consolidated revenues in 2015 only grew by 1 percent to P57.2 billion compared to P56.6 billion the previous year, consolidated cost of sales and services substantially declined during the same period.

From P38 billion, consolidated cost of sales and services fell 16 percent to P32 billion. This was due primarily to the optimized operations of Sem- Calaca Power Corporation and non-recurrence of high replacement power purchases.

CONSOLIDATED REVENUE AND NET INCOME

10.8B

12.8B

CONSOLIDATED REVENUE AND NET INCOME 10.8B 1 2 . 8 B 56.6B 57.2B CONSOLIDATED CONSOLIDATED NET

56.6B

57.2B

CONSOLIDATED

CONSOLIDATED

NET INCOME

REVENUE

57.2B CONSOLIDATED CONSOLIDATED NET INCOME REVENUE 2014 2015 We also booked a one-time gain of P530

2014

CONSOLIDATED CONSOLIDATED NET INCOME REVENUE 2014 2015 We also booked a one-time gain of P530 million

2015

We also booked a one-time gain of P530 million from the sale of our 25.11 percent stake in Private Infra Dev Corporation (PIDC), the project proponent and operator of the Tarlac-Pangasinan-La Union Toll Expressway (TPLEX).

Including this non-recurring gain, our consolidated net income for 2015 rose 19 percent from P10.8 billion to P12.8 billion.

Double-Digit Growth

Semirara Mining and Power Corporation (SMPC) made a solid recovery from last year, with its net income jumping 22 percent from P7.06 billion to P8.64 billion. After non-controlling interest, SMPC’s contribution stood at P4.81 billion, an 18 percent increase from P4.07 billion reported last year.

Stable power generation and higher energy sales drove profit contributions from the power segment to reach P5.69 billion, representing 66 percent of the consolidated income of SMPC.

Income contributions from the coal segment stood at P2.95 billion due to the combined effect of lower coal sales and 9 percent decrease in composite average coal price.

NET INCOME GROWTH (%YOY)

35

23 11 DMCI DMCI HOMES SMPC
23
11
DMCI
DMCI HOMES
SMPC

57

38

17 DMCI MINING MAYNILAD
17
DMCI MINING
MAYNILAD

DMCI Homes ended the year with P3.6 billion in net income, an 11 percent improvement from the P3.2 billion reported in 2014. This was due to the recognition of sales from completed high-rise projects.

From P362 million, net income contribution of DMCI Mining Corporation rose 38 percent to P501 million. Higher sales volume and reduced operating costs helped ease the impact of softening nickel ore prices.

Better gross profit margins from ongoing projects in 2015 raised the net income contributions of D. M. Consunji, Inc. (DMCI) to P628 million, a 35 percent jump from the P464 million reported in 2014.

Off-grid supplier DMCI Power Corporation recorded P382 million in net income, a 57 percent upturn from P243 million in 2014. The improved profitability was due mainly to the commissioning of its 15MW diesel plant in Oriental Mindoro in February 2015.

Increased operational efficiency coupled with a 4 percent increase in billed volume enabled affiliate Maynilad to raise its net income contribution by 17 percent to P2.3 billion from the P1.97 billion reported the prior year.

Revitalizing the Core

For two consecutive years, the profit levels of our construction business fell below the P1 billion mark, due mainly to cost overruns and delayed right-of- way turnovers.

We are taking these operational setbacks very seriously, and have begun reviewing the business framework of DMCI to revitalize its profitability.

Moving forward, we will tighten its risk management process and supplier evaluation protocols to reduce and mitigate the risks that come with engineering, procurement and construction contracts for infrastructure projects.

Delivering Shared Value

Our year-end share price went down 12 percent to P13.80 compared to

P15.70 in 2014, bringing our market capitalization to over P183 billion as of

31 December 2015.

We are reviewing the business framework of DMCI to revitalize its profitability.

We attribute this in part to overall bearish market sentiments, as the index closed nearly 4 percent lower than the previous year at 6,952.08 from

7,230.57.

The protracted commissioning and commercial operations of Southwest Luzon Power Generation Corporation also dragged down our earnings base.

Consistent with our commitment to create and deliver shared value, our Company distributed regular and special dividends to our stockholders in

2015.

On 14 May 2015, the Board of Directors declared regular and special cash dividends of 24 centavos each share, for a combined dividend of 48 centavos per common share, in favor of the common stockholders of record as of

29 May 2015. The payout totaled P6.37 billion bringing our total dividend

payout to 50 percent in 2015.

Outstanding Issues I am pleased to report that in October 2015, the suspension order on

Outstanding Issues

I am pleased to report that in October 2015, the suspension order on Zambales Diversified Mining Corporation, along with another Zambales- based mining firm, was lifted by the Mines and Geosciences Bureau of the Department of Environment and Natural Resources.

We continue to await the resolution of the legal and regulatory issues of DMCI Homes and Maynilad.

• In March 2015, Maynilad initiated arbitration proceedings against the Republic of the Philippines for refusing to compensate the company for the losses it incurred as a result of the delayed implementation of its basic rate adjustment, which was approved in January of the same year by an international arbitration panel.

• In June 2015, the Supreme Court of the Philippines issued a temporary restraining order (TRO) to suspend the construction of Torre De Manila. Following a series of oral arguments, DMCI Homes filed in October 2015, its final memorandum and request to dismiss the petition of the Knights of Rizal and to immediately lift the TRO.

There is no way for us to accurately predict when these matters will be resolved, but we are hopeful that the positions taken by DMCI Homes and Maynilad will be favorably considered by the concerned governing bodies.

Two Decades

Twenty years ago, DMCI Holdings was established and listed in the Philippine Stock Exchange because we believed that construction and engineering could be drivers—and not just implementers of growth.

By leveraging on our construction expertise, we hoped to generate shareholder value, steady employment and needed infrastructure for our country.

Today, our Company is one of the most valued in the local stock exchange. We are also among the highest yielding dividend stocks with over P31.5 billion in total dividend payouts in the last five years (2011 to 2015).

From over 9,000 employees in 1995, our Company has grown to over 20,000. This does not include the jobs generated by our subcontractors and suppliers.

To improve quality of life, we built flyovers, toll roads, water infrastructures, power plants and over 25,000 homes for the middle-class.

Reshaping our Growth Strategy

As a new decade begins for our Company, we see a reshaping of our growth strategy. To create and deliver more value to our stakeholders, we will pursue the following:

Construction and engineering could be drivers— and not just implementers of growth.

• Decent housing for low-income and lower middle-class families. We have the scale, resources and expertise to deliver quality homes to those with modest means.

• Renewable energy (RE) for the future. Our goal is to build an energy portfolio that has an optimum blend of conventional and sustainable energy.

• More collaborative work. To generate high value projects for our core business, we will strengthen our collaboration with industry leaders through fair pricing and exceptional service.

• Other allied businesses. We will develop new businesses that will complement and boost our existing capacities and future investments.

Throughout all these, we will continue to strengthen our corporate governance and citizenship. We are committed to fulfilling our duty to our stakeholders and our role in nation-building.

In closing, I would like to express my gratitude to our investors, employees, customers, host communities, public sector partners and other stakeholders for their unwavering support and confidence.

With our continued partnership, I am confident that the coming years will be even more productive and fulfilling for our Company and stakeholders.

ISIDRO A. CONSUNJI
ISIDRO A. CONSUNJI

Chairman of the Board and President

D.M. CONSUNJI, INC.

FORERUNNER OF VALUE ENGINEERING IN THE PHILIPPINES

D.M. Consunji, Inc. (DMCI) is one of the leading engineering-based integrated construction firms in the country. It operates in four key construction segments: building, energy, infrastructure, and utilities and plants.

Over the years, its pioneering methodologies and expertise have allowed it to complete close to a thousand projects of varying scale and complexity in the Philippines and abroad.

From high-rise buildings to roads, bridges, power plants and water facilities, DMCI is changing the domestic infrastructure landscape to improve the lives of millions of Filipinos.

61 Years of Activity P24.4 B New Contracts Signed P7 B Equipment Inventory Value 30,245,102

61Years of Activity

P24.4 B

New Contracts

Signed

P7 B

Equipment

Inventory Value

30,245,102

Safe Man Hours

P7 B Equipment Inventory Value 30,245,102 Safe Man Hours 12,000 Skilled Workforce (estimated) 700 + Technical

12,000

Skilled Workforce (estimated)

700 +

Technical Personnel

12,000 Skilled Workforce (estimated) 700 + Technical Personnel DMCI HOLDINGS, INC. INTEGRATED ANNUAL REPORT 2015 21

BUSINESS OVERVIEW

D .M. CONSUNJI, INC. made a strong recovery in 2015

from its sharp earnings decline the year before. From P464 million, its net income jumped 35 percent to P628 million

due to improved margins realized from completed projects.

Its order book also surged 58 percent to P29.2 billion after it was awarded Sections 1 and 2 of the Metro Manila Skyway Stage 3 project, an elevated tollway that will link the South and North Luzon Expressways.

“In 2016, we expect right-of-way and utility relocation issues to persist for infrastructure projects. This is really something beyond our control,” said DMCI President and Chief Operating Officer Jorge A. Consunji.

President and Chief Operating Officer Jorge A. Consunji. “To mitigate the impact of these risks on

“To mitigate the impact of these risks on our bottom-line and generate employment for our workforce, we plan to pursue more high-value vertical projects.”

“We also want to expand our construction footprint by building more conventional and renewable power plants, as well as other utility projects,” he added.

KEY FIGURES

NET INCOME

REVENUES

ORDER BOOK

TOTAL

CONSTRUCTION

COSTS

TOTAL ASSETS

RETURN ON

ASSET

P464M

TOTAL CONSTRUCTION COSTS TOTAL ASSETS RETURN ON ASSET P464M P628M P11.9B P13.2B P18.5B P29.2B P11.3B P12.3B
TOTAL CONSTRUCTION COSTS TOTAL ASSETS RETURN ON ASSET P464M P628M P11.9B P13.2B P18.5B P29.2B P11.3B P12.3B

P628M

P11.9B

COSTS TOTAL ASSETS RETURN ON ASSET P464M P628M P11.9B P13.2B P18.5B P29.2B P11.3B P12.3B P14.7B P14.7B

P13.2B

P18.5B P29.2B P11.3B P12.3B P14.7B P14.7B 3.2% 4.3% 2014 2015
P18.5B
P29.2B
P11.3B
P12.3B
P14.7B
P14.7B
3.2%
4.3%
2014
2015
“ We want to expand our construction footprint.
We want to
expand our
construction
footprint.

DMCI PRESIDENT AND COO JORGE A. CONSUNJI

footprint. ” DMCI PRESIDENT AND COO JORGE A. CONSUNJI Completed Work DMCI completed a number of

Completed Work

DMCI completed a number of key infrastructure and energy projects in 2015. These include the Ninoy Aquino International Airport Terminal 1 Rehabilitation, Tarlac-Pangasinan-La Union Expressway (Section 2), 2x135MW coal-fired power plant of South Luzon Thermal Energy Corporation, 15.6MW bunker-fired power plant in Oriental Mindoro and 15MW coal-fired circulating fluidized bed thermal power plant on Semirara Island.

fluidized bed thermal power plant on Semirara Island. NET INCOME (IN BILLION PESOS) 1.3 1.3 1.1

NET INCOME

(IN BILLION

PESOS)

1.3 1.3 1.1 0.6 0.5 2011 2012 2013 2014 2015
1.3
1.3
1.1
0.6
0.5
2011 2012
2013
2014
2015

BUSINESS OVERVIEW

BUSINESS OVERVIEW Balance of Work Newly-awarded projects during the year totaled P24.4 billion pushing the company’s

Balance of Work

Newly-awarded projects during the year totaled P24.4 billion pushing the company’s total order book (balance of work) to P29.2 billion at the end of December 2015, a 58 percent improvement from P18.5 billion at the close of 2014.

Infrastructure accounted for majority (70%) of the new projects, followed by buildings (18%), power (10%), and utilities and plants (2%).

The awarded projects include the civil works of LRT 2 East (Masinag) Extension – Construction of Viaduct and Sections 1 and 2 of the Skyway Stage 3, which are expected to boost the revenues of the company in the next few years.

to boost the revenues of the company in the next few years. Ongoing and new projects

Ongoing and new projects in the order book include the construction of a 2x4.95MW diesel power plant, 2x150MW coal-fired power plant, 62-storey luxury residential tower, 35ML water reservoir and pumping station, four- storey creative hub, among others.

Profitability D.M Consunji, Inc. reported a full-year net income of P628 million in 2015, a

Profitability

D.M Consunji, Inc. reported a full-year net income of P628 million in 2015, a 35 percent rebound from the previous year. This was due to higher percentage-of-completion revenue from ongoing projects and better margins realized from completed projects.

Despite the challenges of right-of-way and utility relocation issues, construction revenues from external customers improved by 12 percent to P13.2 billion mainly coming from infrastructure projects.

Meanwhile, total construction costs (under cost of services and operating expenses) grew at a slower pace of 9 percent, reaching P12.3 billion in 2015 from P11.3 billion a year earlier. The recognized cost in 2014 was adversely affected by the cost overruns in its engineering, procurement and construction (EPC) contract in a power plant.

procurement and construction (EPC) contract in a power plant. DMCI HOLDINGS, INC. INTEGRATED ANNUAL REPORT 2015

Preparing for Infrastructure Influx

In 2015, DMCI completed the construction of a state-of-the-art steel fabrication plant in Calaca, Batangas.

With a capacity of 1,500 to 2,000 metric tons per month, the steel plant can produce heavy steel sections for power plants, infrastructure and steel vertical structures.

It was established to supply the requirements of the DMCI group but plans are underway to secure sales contracts with other industrial and construction companies.

Together with the DMCI concrete batching plant and electromechanical expertise of affiliate Beta Electric Corporation, the steel fabrication facility is expected to further strengthen DMCI’s ability to mobilize quickly and execute highly-complex structures, while addressing the requirements of other companies.

DMCI HOMES

LEADING MID-INCOME RESIDENTIAL DEVELOPER IN THE PHILIPPINES

Initially a housing division under D.M. Consunji, Inc., DMCI Homes was spun off in 1999 to address the surge in demand for urban homes.

off in 1999 to address the surge in demand for urban homes. Since then, the company

Since then, the company has made high-quality living available to average Filipino families through its innovative designs, proprietary technologies and cost-efficient methodologies.

Its core products include larger-than-usual condominium units with resort-inspired amenities in mid-rise and high-rise developments across Metro Manila.

5 KM
5 KM

Approximate Distance of Projects from Central Business Districts

51 SQM

Average Unit Area

61,515

Residential Units and Parking Slots Sold since 1999

Capital Expenditures
Capital Expenditures

P9.9 B

P6.7 B

Total Landbank

1999 Capital Expenditures P9.9 B P6.7 B Total Landbank 1,054 Total Employees DMCI HOLDINGS, INC. INTEGRATED

1,054

Total Employees

BUSINESS OVERVIEW

D MCI HOMES recorded steady profits with the recognition of sales from its completed high-rise projects in 2015.

Its net income improved by 11 percent from P3.2 billion in 2014 to P3.6 billion the year after. Excluding the effect of a gain on sale of undeveloped lot in 2014, net income actually rose 18 percent from P3 billion to P3.6 billion during the same period.

As the company shifts its product focus to high-rise condominiums, it expects slower recognition of income from sold units.

“Contrary to local industry practice, we realize sales only when the unit is fully completed and at least 15 percent of the contract price has been collected,” said DMCI Homes President Alfredo R. Austria.

“High-rise condominiums take around 3 years to complete, and we began developing more of these products in 2015.”

“Income recognition will ease in the next two years but we foresee a strong rebound thereafter,” he added.

KEY FIGURES

SALES AND

RESERVATIONS

RESIDENTIAL UNIT TURNOVERS

RESIDENTIAL UNITS LAUNCHED

REVENUES

NET INCOME

RETURN ON

ASSETS

UNITS LAUNCHED REVENUES NET INCOME RETURN ON ASSETS P19B P 1 8 . 8 B 2
UNITS LAUNCHED REVENUES NET INCOME RETURN ON ASSETS P19B P 1 8 . 8 B 2

P19B

P18.8B

REVENUES NET INCOME RETURN ON ASSETS P19B P 1 8 . 8 B 2 , 2
REVENUES NET INCOME RETURN ON ASSETS P19B P 1 8 . 8 B 2 , 2

2,230

INCOME RETURN ON ASSETS P19B P 1 8 . 8 B 2 , 2 3 0
INCOME RETURN ON ASSETS P19B P 1 8 . 8 B 2 , 2 3 0

2,830

2,902

5,155

P 1 8 . 8 B 2 , 2 3 0 2,830 2 , 9 0

P12.5B

1 8 . 8 B 2 , 2 3 0 2,830 2 , 9 0 2

P13.7B

8 B 2 , 2 3 0 2,830 2 , 9 0 2 5,155 P12.5B P13.7B

P3.2B

2 , 2 3 0 2,830 2 , 9 0 2 5,155 P12.5B P13.7B P3.2B P3.6B

P3.6B

2 3 0 2,830 2 , 9 0 2 5,155 P12.5B P13.7B P3.2B P3.6B 8.3% 7

8.3%

2 3 0 2,830 2 , 9 0 2 5,155 P12.5B P13.7B P3.2B P3.6B 8.3% 7

7.8%

2 3 0 2,830 2 , 9 0 2 5,155 P12.5B P13.7B P3.2B P3.6B 8.3% 7

2014

2 3 0 2,830 2 , 9 0 2 5,155 P12.5B P13.7B P3.2B P3.6B 8.3% 7

2015

“ Income recognition will ease in the next two years but we foresee a strong

“ Income recognition will ease in the next two years but we foresee a strong rebound

Income recognition will ease in the next two years but we foresee a strong rebound thereafter.

DMCI HOMES PRESIDENT ALFREDO R. AUSTRIA

thereafter. ” DMCI HOMES PRESIDENT ALFREDO R. AUSTRIA Sales and Reservations Despite a more challenging real

Sales and Reservations

Despite a more challenging real estate market in 2015, sales and reservations remained relatively stable, slipping only 1 percent from P19 billion to P18.8 billion. Demand for residential condominium units in new and existing projects such as Ivory Wood, Lumiere Residences, Sheridan Towers helped stem the decline.

Residential unit turnovers dropped by 57 percent from 5,155 to 2,230. Most of the turned over units were from La Verti Residences, Sorrel Residences and Arista Place.

In 2015, the company launched 2,902 residential units, which is 3 percent higher than the 2,830 reported the previous year. The units launched in 2015 include those from the Verdon Parc project in Davao City, which was developed by affiliate DMC-Urban Property Developers Inc.

The total approximate value of the launched units amounted to P12.1 billion, a 23 percent increase from P9.87 billion in 2014.

During the year, DMCI Homes completed six projects to expand its product offerings.

The projects include One Castlla Place, Sorrel Residences, Outlook Ridge Residences, Verawood Residences, Levina Place and La Verti Residences (South Tower).

NET INCOME

(IN BILLION

PESOS)

3.6 3.2 2.7 2.1 1.8 2011 2012 2013 2014 2015
3.6
3.2
2.7
2.1
1.8
2011
2012
2013
2014
2015
Future Projects Capital expenditures went down 19 percent to P9.9 billion from P12.2 billion in
Future Projects Capital expenditures went down 19 percent to P9.9 billion from P12.2 billion in

Future Projects

Capital expenditures went down 19 percent to P9.9 billion from P12.2 billion in 2014. Of the amount spent in 2015, 32 percent went to land acquisition while 68 percent went to development cost.

To further build-up its inventory, DMCI Homes is constructing 15 more projects in Metro Manila, Davao and Baguio City. The projects have 17,481 residential units and 10,740 parking units combined. Total value of these units is expected to reach P61.76 billion.

Capital commitment in 2016 is estimated at P32.5 billion. Much of the budget or P27.5 billion will cover development cost while the remaining P5 billion will be used to fund land acquisitions.

To encourage middle-class buyers to save enough funds to purchase a DMCI Homes property in the future, the company issued P1 billion worth of deferred coupon-paying retail bonds.

Profitability

Strong revenues from completed high-rise projects coupled with stable gross margins pushed net earnings to rise 11 percent from P3.2 billion in 2014 to P3.6 billion the following year. Excluding the effect of a gain on sale of undeveloped lot the year before, net income rose by 18 percent from P3 billion to P3.6 billion in 2015.

Revenues climbed 9 percent from P12.5 billion to P13.7 billion due to the completion of Sorrel Tower, La Verti Residences, Verawood Residences, The Amaryllis, Outlook Ridge Residences and One Castilla Place.

Total assets improved 18 percent from P38.9 billion to P45.9 billion while total liabilities increased 18 percent to P31.3 billion because of additional loan availment amounting to P2 billion.

Receivables declined 6 percent to P7.52 billion owing to the acceleration of payments from installment buyers, as a result of full payment of unit contract price.

buyers, as a result of full payment of unit contract price. DMCI HOLDINGS, INC. INTEGRATED ANNUAL
buyers, as a result of full payment of unit contract price. DMCI HOLDINGS, INC. INTEGRATED ANNUAL

Temporary Restraining Order on Torre De Manila

On 17 June 2015, the Supreme Court of the Philippines issued a temporary restraining order (TRO) on the construction of Torre De Manila, based on the petition submitted by the Knights of Rizal (KOR).

Located around 800 meters away from the Rizal monument, Torre De Manila is a 49-storey residential building in Barangay 660-A, Zone 71, Ermita, Manila. Close to 80 percent of the open space is reserved for amenities like swimming pools, a basketball court, deck gardens, among others.

The target market for the project are new homeowners from Manila and Pasay City, students and employees residing in Cavite, Batangas, Laguna and Rizal, and overseas Filipino workers. The prices per square meter were projected to be 20 percent lower than existing condominiums in the Ermita area.

The project would not only address the need for mid-income housing in the city, it would also boost the local economy by providing livelihood, employment and tax contributions to the local government.

From July to August 2015, the Supreme Court heard oral arguments on the legality of Torre De Manila from both the petitioner, KOR, and the respondent, DMCI Homes.

On 29 September 2015, the company’s legal counsels submitted its final memo to the Supreme Court, reiterating that Torre de Manila did not and does not violate any laws, rules on easement or requirements of aerial navigation. Its construction was in fact duly authorized by the concerned national and local government agencies.

DMCI Homes is now awaiting the decision of the Supreme Court on its appeal to dismiss the petition of the KOR, and immediately lift the TRO.

SEMIRARA MINING AND POWER CORPORATION

THE ONLY VERTICALLY INTEGRATED POWER PRODUCER IN THE PHILIPPINES

Semirara Mining and Power Corporation (SMPC) is the largest coal producer in the Philippines, and the only power generation company in the country that owns and mines its own fuel source (coal).

It accounts for 90% of the national coal production, and supplies mostly to local power plants and cement companies. A significant portion of its mined coal is also exported to China and Thailand.

SMPC supplies baseload power to the Luzon and Visayas grids through bilateral contracts and spot market sales.

10:39:1 S t r i p Ratio 570 M M T Potential Coal Resource %

10:39:1 Strip

Ratio

10:39:1 S t r i p Ratio 570 M M T Potential Coal Resource % 87

570 MMT

Potential

Coal Resource

%

87 Power Plant

Availability

M T Potential Coal Resource % 87 Power Plant Availability M W Installed Capacity 600 26,898
M T Potential Coal Resource % 87 Power Plant Availability M W Installed Capacity 600 26,898
M T Potential Coal Resource % 87 Power Plant Availability M W Installed Capacity 600 26,898

MW

Installed

Capacity

% 87 Power Plant Availability M W Installed Capacity 600 26,898 Safety Training Hours 4,414 Operating

600

26,898

Safety Training Hours

M W Installed Capacity 600 26,898 Safety Training Hours 4,414 Operating Workforce DMCI HOLDINGS, INC. INTEGRATED

4,414

Operating Workforce

BUSINESS OVERVIEW

S EMIRARA MINING AND POWER CORPORATION delivered robust growth in 2015 on the strength of its vertical integration strategy.

While its coal segment encountered internal and external setbacks during the year, its power segment set a record-high performance, lifting overall profitability by 22 percent from P7.06 billion to P8.64 billion.

by 22 percent from P7.06 billion to P8.64 billion. “The next few years will be challenging
by 22 percent from P7.06 billion to P8.64 billion. “The next few years will be challenging

“The next few years will be challenging for our company. Coal prices will continue to decline because of oversupply and reduced demand,” said SMPC President and Chief Operating Officer Victor A. Consunji.

“We are also seeing lower electricity spot market and bilateral contract prices, as additional power capacities in the Luzon-Visayas grids come online.”

“To mitigate the impact of lower coal and power prices, we will tighten and optimize our operating costs while focusing on how to make our operations and support activities more efficient,” he added.

KEY FIGURES

COAL SALES

ENERGY SALES

NET PROFIT

MARGIN

CONSOLIDATED

NET INCOME

CASH DIVIDEND

PAYOUT RATIO

TOTAL ASSETS

NET INCOME CASH DIVIDEND PAYOUT RATIO TOTAL ASSETS 8.89MT 8.43MT 3,383GWH 3,754GWH 25% 35% P7.1B P8.6B

8.89MT

NET INCOME CASH DIVIDEND PAYOUT RATIO TOTAL ASSETS 8.89MT 8.43MT 3,383GWH 3,754GWH 25% 35% P7.1B P8.6B
NET INCOME CASH DIVIDEND PAYOUT RATIO TOTAL ASSETS 8.89MT 8.43MT 3,383GWH 3,754GWH 25% 35% P7.1B P8.6B

8.43MT

3,383GWH

DIVIDEND PAYOUT RATIO TOTAL ASSETS 8.89MT 8.43MT 3,383GWH 3,754GWH 25% 35% P7.1B P8.6B 62% 50% P52.2B

3,754GWH

25% 35% P7.1B P8.6B 62% 50% P52.2B P57.2B 2014 2015
25%
35%
P7.1B
P8.6B
62%
50%
P52.2B
P57.2B
2014
2015

All figures consolidated at parent level

“ We will tighten and optimize our operating costs while focusing on how to make

We will tighten and optimize our operating costs while focusing on how to make our operations and support activities more efficient.

SMPC PRESIDENT AND COO VICTOR A. CONSUNJI

efficient. ” SMPC PRESIDENT AND COO VICTOR A. CONSUNJI Coal SMPC produced 7.98 million metric tons

Coal

SMPC produced 7.98 million metric tons (MT) of coal in 2015, a 1 percent dip from the 8.08 million MT the previous year.

Its coal sales also declined by 5 percent from 8.89 million MT to

8.43 million MT during the same period. Due to the lower sales volume,

ending inventory more than doubled (115%) to 829 thousand MT

compared to 386 thousand MT in 2014.

to 829 thousand MT compared to 386 thousand MT in 2014. Local customers accounted for majority

Local customers accounted for majority of the coal sales at 63 percent or

5.32 million MT. Compared to the prior year, domestic coal sales increased

46 percent from 3.64 million MT while export sales dropped 41 percent to

3.11 million MT.

Composite average free on board (FOB) price per MT decreased 9 percent year-on-year to P1,943 from P2,127, as coal prices continued to slide in the world market.

NET INCOME

(IN BILLION

PESOS)

6.1 6.3

2011

2012

7.5

2013

7.1

2014

8.6

2015

Power The reliable performance of the two operating power plants under Sem-Calaca Power Corporation (SCPC)

Power

The reliable performance of the two operating power plants under Sem-Calaca Power Corporation (SCPC) led to record-high gross generation in 2015. Both units registered total availability of 87 percent, a marked improvement from the 67 percent recorded the previous year. Consequently, gross generation surged 39 percent from 2,840 GWh to 3,959 GWh.

generation surged 39 percent from 2,840 GWh to 3,959 GWh. While in the testing and commissioning

While in the testing and commissioning stage, the 2x150MW expansion project under Southwest Luzon Power Generation Corporation (SLPGC) generated a total of 211 GWh.

Power sales of SCPC increased 11 percent to 3,754 GWh in 2015 from 3,383 GWh the year earlier. Of the total energy sold, 95 percent or 3,581 GWh were through bilateral contracts while the rest were retailed at the spot market.

Average price for bilateral contracts fell 6 percent from P3.55/kWh to P3.33/kWh due to declining coal prices (Newcastle coal index). Meanwhile, composite average price per kWh in the electricity spot market decreased 6 percent to P3.41/kWh compared to P3.64/kWh the previous year.

SLPGC sold its generated power through a non-firm replacement supply contract, as well as to the spot market. Its total energy sales reached 209 GWh, which were sold at an average composite price of P3.51/kWh.

Profitability Consolidated net income after tax increased by 22 percent to P8.64 billion from P7.06
Profitability Consolidated net income after tax increased by 22 percent to P8.64 billion from P7.06

Profitability

Consolidated net income after tax increased by 22 percent to P8.64 billion from P7.06 billion in 2014. Net of eliminations, the coal segment generated a net income of P2.95 billion, while SCPC generated P5.6 billion. Pre- operating income of SLPGC reached P92.34 million.

Consolidated revenues dropped 14 percent to P24.68 billion in 2015 from P28.59 billion the previous year. Consolidated cost of sales slid 44 percent to P10.75 billion from P18.63 billion the year before.

As a result, consolidated gross profit surged 40 percent from P9.96 billion to P13.93 billion, with the coal and power segments contributing P5.46 billion and P8.47 billion, respectively. Last year, the coal segment contributed P6.35 billion while the power segment supplied P3.61 billion.

Consolidated operating expenses grew 25 percent from P3.15 billion to P3.94 billion due mainly to the provisions made by SCPC on its questioned Philippine Electricity Market Corporation receivables. These receivables pertain to the electricity sold to the spot market in November and December 2013. Total provisions amounted to P895.15 million.

Enhancing Safety

A portion of the northern edge of the Panian mine site in Semirara Island

collapsed on July 17, resulting in nine worker fatalities.

In compliance with the suspension order from the Department of Energy (DOE)

and the Cease and Desist Order (CDO) from the Department of Environment and Natural Resources (DENR), mining operations at the affected portion of the Panian pit were halted for around two months while the government agencies and SMPC conducted their individual investigations.

While awaiting the lifting of the DOE suspension and DENR CDO, SMPC augmented its safety equipment and personnel safety training program. It acquired two units of slope stability radar (SSR) systems to complement its existing Total Robotic Station for real-time, 24-hour slope movement monitoring.

A generally-accepted tool for high-risk slope management, the SSR is a state-of-

the-art technology for monitoring mine walls and general slopes.

The company’s mining protocol was also revised and improved with the hiring of a full time geotechnical consultant and the appointment of additional safety personnel.

Personnel safety training was also enhanced, with safety training hours during the year accounting for 70 percent or 26,898 out of the 38,576 training hours.

DMCI POWER CORPORATION

ENERGIZING MISSIONARY AREAS IN THE PHILIPPINES

DMCI Power Corporation was established in 2006 to provide sufficient and reliable electricity to remote islands and areas in the Philippines.

It operates and maintains bunker-fired power plants and diesel generating sets in parts of Masbate, Oriental Mindoro, Palawan and Sultan Kudarat.

The company provides off-grid power to missionary areas through long-term power supply agreements with local electric cooperatives.

78 MW* Installed Capacity
78
MW*
Installed Capacity

B

P3.5 Total Assets

78 MW* Installed Capacity B P3.5 Total Assets 5 3 MW* Contracted Capacity P1.4 B Total

53 MW*

Contracted

Capacity

P1.4B

Total Liabilities

*excluding Sultan Kudarat, the COD of which started January 2016

210 GWH

Power Sales

226

Total Employees

G W H Power Sales 226 T o t a l E m p l o

BUSINESS OVERVIEW

D MCI POWER CORPORATION recorded solid growth in 2015, booking a net income of P382 million, a 57 percent increase from P243 million

the previous year. The surge was attributed to higher electricity sales.

Total electricity sales expanded 59 percent from 132 GWh in 2014 to 210 GWh in 2015. The unprecedented volume increase was driven by the commercial operation of its 15.6MW bunker- fired power plant in Oriental Mindoro, combined with the increased demand from electric cooperatives in Masbate and Palawan.

“Our profitability is at an all-time high and we expect this trend to continue in the coming years,” said DPC President Nestor D. Dadivas.

“Suppressed electricity demand from end-users remains considerable so there is much room for organic growth.”

“We are also looking at expanding our power generation portfolio to include renewable energy. Hydropower and biomass are our primary choices,” he added

KEY FIGURES

GENERATED

POWER

POWER

SALES

COMPOSITE

AVERAGE

PRICE

RETURN

ON ASSET

EBITDA

NET

INCOME

135

GWH

 
   

216 GWH

132

GWH

 

210 GWH

 

P13.52

 

P10.33

   

9%

 

11%

 
   

P335M

 

P243M

P511M

1 %       P335M   P243M P511M 2014 2015 P 3 8 2 M
1 %       P335M   P243M P511M 2014 2015 P 3 8 2 M

2014

1 %       P335M   P243M P511M 2014 2015 P 3 8 2 M

2015

P382M

“ Our profitability is at an all-time high and we expect this trend to continue
“ Our profitability is at an all-time high and we expect this trend to continue
“ Our profitability is at an all-time high and we expect this trend to continue

Our profitability is at an all-time high and we expect this trend to continue in the coming years.

DMCI POWER PRESIDENT NESTOR D. DADIVAS

Capacity and Dispatch

DMCI Power Corporation (DPC) has a total installed rated capacity of 78.1MW. Nearly half of the total capacity (38.1MW) is deployed to Palawan while the rest are installed in Masbate (24.4MW) and Oriental Mindoro (15.6MW). The bunker-fired power plant in Oriental Mindoro began its commercial operations in February 2015.

Mindoro began its commercial operations in February 2015. DPC has long-term power supply agreements with Masbate

DPC has long-term power supply agreements with Masbate Electric Cooperative (MASELCO), Oriental Mindoro Electric Cooperative (ORMECO) and Palawan Electric Cooperative (PALECO). Due to the increase in energy dispatch of the electric cooperatives to DPC plants, sales volume increased across all cooperatives.

Power sales to MASELCO advanced by 8 percent from 79 GWh to 86 GWh while energy volume sold to PALECO surged 47 percent from 53 GWh to 78 GWh. Meanwhile, ten months of operations in Oriental Mindoro produced 46 GWh in sales volume. In effect, total power sales in 2015 grew by 59 percent from 132 GWh to 210 GWh.

NET INCOME

(IN MILLION

PESOS)

*includes one-time gain of P72M from the retroactive adjustment of the tariff for Masbate

249* 243 89 64 2011 2012 2013 2014
249*
243
89
64
2011
2012
2013
2014

382

2015

Price and Cost Average price/kWh in Masbate and Palawan stood at P11.52/kWh and P9.27/kWh, respectively.
Price and Cost Average price/kWh in Masbate and Palawan stood at P11.52/kWh and P9.27/kWh, respectively.

Price and Cost

Average price/kWh in Masbate and Palawan stood at P11.52/kWh and P9.27/kWh, respectively. During the first ten months, electricity price in Oriental Mindoro averaged at P9.89/kWh.

All tariffs of the company are reviewed and approved by the Energy Regulatory Commission (ERC) prior to implementation. Fuel cost is a pass- through cost, subject to the fuel efficiency consumption cap set by ERC.

Cost of sales and operating expenses in 2015 increased 13 percent to P1.8 billion from P1.6 billion the year before. This was mainly due to the operation of Mindoro bunker-fired plant which started in late February 2015.

Profitability Commencement of commercial operations of its 15.6MW bunker-fired plant in Oriental Mindoro combined with
Profitability Commencement of commercial operations of its 15.6MW bunker-fired plant in Oriental Mindoro combined with

Profitability

Commencement of commercial operations of its 15.6MW bunker-fired plant in Oriental Mindoro combined with higher electricity sales in Masbate and Palawan pushed net profit from off-grid power generation to grow by 57 percent from P243 million to P382 million.

Accounting for most of the revenues is Masbate at P989 million (46%), followed by Palawan at P723 million (33%) and Oriental Mindoro at P457 million (21%).

Meanwhile, total cost and expenses increased by 13 percent from P1.6 billion in 2014 to P1.8 billion the following year.

from P1.6 billion in 2014 to P1.8 billion the following year. DMCI HOLDINGS, INC. INTEGRATED ANNUAL

Expanding Reach and Portfolio

DPC invested around P100 million to build a 3MW diesel-fired power plant in Barangay Dukay, Esperanza, province of Sultan Kudarat. This is the company’s first project in Mindanao.

A power supply agreement for three (3) years was signed by Sultan Kudarat Electric Cooperative (SUKELCO) and DPC in June 2015.

Commercial operation of the Sultan Kudarat facility is expected to begin by January 2016. SUKELCO has over 69,000 served connections in 17 municipalities.

Currently, the cooperative gets its electricity from the Power Sector Assets and Liabilities Management Corporation, Therma Marine Inc. and Therma South Inc.

DPC is also looking to expand its portfolio to include renewable energy, as market conditions and government incentives have made such projects attractive investments.

Feasibility and technical studies will be done to determine the output reliability and commercial viability of hydropower and biomass. The company is in the initial stage of identifying locations for the renewable energy projects.

DMCI MINING CORPORATION

EXTRACTING FOR GROWTH

In 2007, DMCI Mining Corporation was established to engage in ore and mineral mining and exploration.

It has two nickel mining assets, namely Berong Nickel Corp (BNC) and Zambales Diversified Metals Corp (ZDMC). The former operates in Berong, Long Point, Moorsom and Ulugan, all in the province of Palawan, while the latter is located in Acoje, Zambales.

DMCI Mining took over the operations of BNC and ZDMC in 2014 and 2013, respectively. Both mining companies use open pit technique to extract nickel, chromite and iron laterite for direct shipping to China and Japan.

13,353 ha Total Mineable Area

13,353 h a Total Mineable Area 0.8–2.0 Nickel Grade % 41.48 MT** Total Reserve 365 MT*

0.8–2.0 Nickel Grade

%

13,353 h a Total Mineable Area 0.8–2.0 Nickel Grade % 41.48 MT** Total Reserve 365 MT*

41.48

MT**

Total Reserve

365 MT*

Total Mineral

Resource Estimate

P4.4B

Equipment Inventory Value

399

Total Employees

*JORC and Non-JORC **as of December 2015 per government estimates

*JORC and Non-JORC **as of December 2015 per government estimates DMCI HOLDINGS, INC. INTEGRATED ANNUAL REPORT

BUSINESS OVERVIEW

D MCI MINING CORPORATION performed well despite negative nickel price movements in the world market. From P362 million in 2014, its net income grew 38 percent to P501 million.

To mitigate the impact of lower commodity prices on its bottom line, the company streamlined its operating costs and shipped 1.65 million wet metric tons of nickel ore, an all-time high for the company.

“Ramping up total production was a major challenge because we only had one operating company, Berong Nickel Corporation,” said DMCI Mining President and Chief Operating Officer Cesar F. Simbulan, Jr.

“Zambales Diversified Metals Corp. was suspended for the most part of 2015 so extraction activity was at a standstill. We could only export our inventory”.

“We expect 2016 to be challenging in terms of profitability. Cost containment and shifting to higher nickel grade will be our strategy for sustaining our operations,” he added.

KEY FIGURES

NICKEL

SHIPMENT

(WMT)

NICKEL

PRODUCTION

(WMT)

AVERAGE SELLING PRICE/ WMT (IN USD)

TOTAL CASH

COST/WMT

(IN USD)

REVENUE

NET INCOME

WMT (IN USD) TOTAL CASH COST/WMT (IN USD) REVENUE NET INCOME 1 . 2 0 9

1.209 MILLION WMT 1.650 MILLION WMT

NET INCOME 1 . 2 0 9 MILLION WMT 1.650 MILLION WMT 1.567 MILLION WMT 1.513
NET INCOME 1 . 2 0 9 MILLION WMT 1.650 MILLION WMT 1.567 MILLION WMT 1.513
NET INCOME 1 . 2 0 9 MILLION WMT 1.650 MILLION WMT 1.567 MILLION WMT 1.513

1.567 MILLION WMT

1.513 MILLION WMT

1.650 MILLION WMT 1.567 MILLION WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M

US$48

MILLION WMT 1.567 MILLION WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M

US$42

WMT 1.567 MILLION WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014
WMT 1.567 MILLION WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014

US$21

US$34

MILLION WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014 2015 54

P2.6B

MILLION WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014 2015 54

P3.1B

WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014 2015 54 RESHAPING

P362M

WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014 2015 54 RESHAPING

P501M

WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014 2015 54 RESHAPING

2014

WMT 1.513 MILLION WMT US$48 US$42 US$21 US$34 P2.6B P3.1B P362M P501M 2014 2015 54 RESHAPING

2015

“

Cost containment and shifting to higher nickel grade will be our strategy for sustaining our operations.

DMCI MINING PRESIDENT AND COO CESAR F. SIMBULAN, JR.

” DMCI MINING PRESIDENT AND COO CESAR F. SIMBULAN, JR. Shipment and Price DMCI Mining Corporation

Shipment and Price

DMCI Mining Corporation hit an all-time high in 2015, with its sales volume reaching 1.65 million wet metric tons (WMT), a 36 percent increase from 1.21 million WMT the previous year.

Of the total shipments, 1.6 million WMT came from BNC while ZDMC accounted for 48 thousand WMT. The grades of the shipped ore ranged from 1.09 percent to 1.83 percent.

Average ore grade in 2015 was at 1.63 percent compared to 1.43 percent in 2014. Despite the higher average ore grade, composite average price slid 12 percent from P2,142 (US$48) per WMT in 2014 to P1,894 (US$42) per WMT the following year, reflecting the decline in global nickel prices during the period.

Composite Average Price swelled 140 percent to $48 per ton in 2014, as a result of the Indonesian ban on unprocessed metals.

as a result of the Indonesian ban on unprocessed metals. NET INCOME (IN MILLION PESOS) 917

NET INCOME

(IN MILLION

PESOS)

917 501 362 341 170 2011 2012 2013 2014 2015
917
501
362
341
170
2011
2012
2013
2014
2015
Cost Containment Total operating cash cost per WMT decreased by 37 percent to P961/WMT (US$21)

Cost Containment

Total operating cash cost per WMT decreased by 37 percent to P961/WMT (US$21) compared to P1,508/WMT (US$34) in 2014.

This was due mainly to increased volume shipment and shift to high ore grade, whose price exceeded production cost. Administrative and exploration costs of non-operating units were also deferred to control expenses.

Meanwhile, cost of sales and operating expenses fell 13 percent from P1.82 billion to P1.59 billion as subsidiary BNC trimmed its equipment rental contracts and acquired additional heavy equipment to support the expansion of its operations. In 2015, rental expenses fell 20 percent to P265 million compared to P331 million the preceding year.

To further contain costs, BNC conducted selective mining by limiting extraction operations in areas with high saleable ore grade. This move led to lower fuel and hauling costs, while effectively rationalizing manpower expenses.

Profitability Despite weak and volatile global nickel ore prices, DMCI Mining generated a net income

Profitability

Despite weak and volatile global nickel ore prices, DMCI Mining generated a net income of P501 million in 2015, an upsurge of 38 percent from P362 million in 2014.

The increase was attributed to higher sales volume and streamlined operating costs. Selective mining operations also led to more efficient production of high ore grade, which remained saleable under the prevailing market condition.

In addition, the Company’s EBITDA more than doubled (102%) year-on-year from P767 million to P1.6 billion.

On a full year comparative basis, revenues amounted to P3.1 billion in 2015, up 21 percent from P2.6 billion in 2014 because of higher volume and better ore grade shipments.

Total depletion, depreciation and amortization contracted 15 percent to P436 million in 2015 compared to P512 million the year before.

ZDMC Suspension Order

In July 2014, ZDMC and three other Zambales mining firms were issued suspension orders for nickel ore extraction and future mining area expansion by the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources. According to the order, the companies practiced unsystematic mining and extraction methods.

ZDMC promptly proceeded with the compliance works to address the supposed mining violations that served as basis for the Order of Suspension.

On 8 August 2014, ZDMC submitted before the MGB Central Office its report to show its compliance with the conditions for the lifting of the Order of Suspension, and accordingly requested for the (a) conduct of field inspection by MGB’s Validation Team and (b) issuance of an Order lifting/setting aside the Order of Suspension.

The Validation Team proceeded to inspect the compliance works undertaken by ZDMC and, in its Report dated 14 August 2014, declared that ZDMC complied with all conditions set by MGB regarding the suspension.

MGB temporarily lifted the suspension on 18 August 2015.

MAYNILAD WATER SERVICES, INC.

THE LARGEST WATER CONCESSIONAIRE IN TERMS OF CUSTOMER BASE IN THE PHILIPPINES

Maynilad provides water and wastewater services to the 17 cities and municipalities that comprise the West Zone of the Greater Metro Manila area.

With over 1.2 million water service connections, it is the largest private water concessionaire in terms of customer base in the Philippines.

DMCI Holdings has indirect ownership in Maynilad through a 27 percent stake in Maynilad Holdings, which owns 93 percent of the water concessionaire.

540

KM 2

Concession Area

540 KM 2 Concession Area 1,265,625 Service Accounts 100 % 24hr 7,571 KM Water Pipeline Availability

1,265,625

Service Accounts

540 KM 2 Concession Area 1,265,625 Service Accounts 100 % 24hr 7,571 KM Water Pipeline Availability

100 %

24hr

KM 2 Concession Area 1,265,625 Service Accounts 100 % 24hr 7,571 KM Water Pipeline Availability 2,147

7,571 KM

Water Pipeline

Availability

Accounts 100 % 24hr 7,571 KM Water Pipeline Availability 2,147 Total Employees 150 ISO Certifications DMCI

2,147

Total Employees

150

ISO Certifications

Pipeline Availability 2,147 Total Employees 150 ISO Certifications DMCI HOLDINGS, INC. INTEGRATED ANNUAL REPORT 2015 61

BUSINESS OVERVIEW

O PERATING EFFICIENCIES continued to drive the profitability of Maynilad in 2015.

The company was able to grow its customer base and billed volume while reducing major cost elements and water losses. As a result, its net income contributions grew 17 percent to P2.3 billion.

Despite its ongoing tariff dispute with the Philippine government, its capital expenditures during the year rose 70 percent to P8 billion. This allowed the company to sustain its service improvement and expansion programs in the West Zone.

“The tax holiday period of Maynilad expired in December 2015 so we expect our income to fall significantly in 2016,” said Maynilad President and Chief Executive Officer Victorico P. Vargas.

“Our projected growth in billed volume and service connections will not be sufficient to fully offset the impact of the income tax holiday expiration. Further improving operational efficiency will be key to mitigating the profitability decline,” he added.

KEY FIGURES

POPULATION

SERVED

(WEST ZONE)

BILLED VOLUME

(WEST ZONE)

AVERAGE NON-

REVENUE WATER

(WEST ZONE)

CONSOLIDATED CASH OPERATING EXPENSES

NET INCOME

CONTRIBUTION

CONSOLIDATED

CAPITAL

EXPENDITURE

8.87M 9.17M
8.87M
9.17M
CONTRIBUTION CONSOLIDATED CAPITAL EXPENDITURE 8.87M 9.17M 473.4MCM 4 9 3 . 9 M C M 33.9%
CONTRIBUTION CONSOLIDATED CAPITAL EXPENDITURE 8.87M 9.17M 473.4MCM 4 9 3 . 9 M C M 33.9%
CONTRIBUTION CONSOLIDATED CAPITAL EXPENDITURE 8.87M 9.17M 473.4MCM 4 9 3 . 9 M C M 33.9%

473.4MCM

493.9MCM

33.9%

31% P5.34B P5.18B P1.97B
31%
P5.34B
P5.18B
P1.97B
9 3 . 9 M C M 33.9% 31% P5.34B P5.18B P1.97B P 2 . 3

P2.31B

C M 33.9% 31% P5.34B P5.18B P1.97B P 2 . 3 1 B P4.7B 2014 2015

P4.7B

2014 2015
2014
2015

P8B

“ Further improving operational efficiency will be key to mitigating the profitability decline. ” MAYNILAD

“ Further improving operational efficiency will be key to mitigating the profitability decline. ” MAYNILAD PRESIDENT

Further improving operational efficiency will be key to mitigating the profitability decline.

MAYNILAD PRESIDENT AND CEO VICTORICO P. VARGAS

decline. ” MAYNILAD PRESIDENT AND CEO VICTORICO P. VARGAS Expansion Maynilad installed 113 kilometers of new

Expansion

Maynilad installed 113 kilometers of new pipes in 2015, expanding its distribution network to 7,571 kilometers—55 percent longer than when it was re-privatized in 2007.

percent longer than when it was re-privatized in 2007. The network expansion to unserved portions of

The network expansion to unserved portions of its concession area drove billed volume to rise 4 percent from 463.2 MCM to 481.5 MCM.

Maynilad also grew its water service connections by 6 percent from 1,190,062 to 1,265,625, effectively improving its service coverage to 94 percent.

With the additional connections, Maynilad was able to increase its served population to 9.17 million from 8.87 million the previous year.

NET INCOME

(IN BILLION

PESOS)

8.26 6.94 6.38 5.86 2011 2012 2013 2014
8.26
6.94
6.38
5.86
2011
2012
2013
2014

9.55

2015

Efficiency In 2015 alone, total pipe replacement and leak repairs reached 235 kilometers and 27,000,

Efficiency

In 2015 alone, total pipe replacement and leak repairs reached 235 kilometers and 27,000, respectively. Active management of the distribution network reduced the company’s average non-revenue water to 31 percent from 33.9 percent the year before.

water to 31 percent from 33.9 percent the year before. The four largest cost elements of

The four largest cost elements of the company, which accounted for 69 percent of total cash expenses, collectively declined by 7.2 percent from P3.86 billion to P3.59 billion.

Personnel costs decreased 8.9 percent to P1.85 billion from P2.03 billion due mainly to the rightsizing initiative of the company. Lower average power rates obtained from retail electricity contracts brought down light and power expenses by 1.9 percent to P780 million.

Outside services increased 4.8 percent to P570 million as the company increased sanitation services using a specialized service contractor. Meanwhile, repairs and maintenance dropped 21.6 percent to P389 million in line with lower leak repairs.

Profitability Operating efficiencies pushed income from operations to climb 8 percent to P11.85 billion from

Profitability

Operating efficiencies pushed income from operations to climb 8 percent to P11.85 billion from the P10.95 billion reported last year.

Consolidated revenues from water and sewer services grew 4.3 percent year-on- year to P18.7 billion from P17.94 billion. The increase in revenues was primarily driven by billed volume growth, coupled with a 0.1 percent increase in average effective tariff. Meanwhile, consolidated revenues from operations amounted to P19.1 billion, a 4 percent uptick from P18.36 billion last year.

Consolidated cash operating expenses decreased 3 percent to P5.18 billion versus P5.34 billion last year due to the containment of major cost elements.

Amortization of intangible assets increased 12.9 percent to P2.04 billion from P1.8 billion in the prior year, in line with the company’s continuing capital expenditure program.

Reported consolidated net income grew at an even higher pace of 15.7 percent to P9.55 billion from P8.26 billion in 2014, due to lower interest expense.

After adjustments at the consortium company level, its net income contribution to DMCI Holdings grew 17 percent from P1.9 billion to P2.3 billion in 2015.

Ongoing Tariff Adjustment Dispute

On 29 December 2014, the Appeals Panel upheld the alternative Rebasing Adjustment of Maynilad for the 4th Rate Rebasing Period of 13.41 percent or its equivalent of P4.06/cu.m.

The increase was effectively reduced to P3.06, following the integration of the P1.00 Currency Exchange Rate Adjustment into the basic water charge.

However, the Metropolitan Waterworks and Sewerage System (MWSS) and the Regulatory Office continue to defy the ruling of the Appeals Panel.

To secure a fair settlement of this dispute, Maynilad has taken on the following steps:

ACTION

DATE

Wrote the Philippine Government, through the Department of Finance (DOF), to call on the undertaking which the Republic of the Philippines issued in favor of Maynilad on 31 July 1997 and 17 March 2010

Reiterated its demand against the undertaking through a follow- up letter to the Philippine Government, through the DOF

Served a Notice of Arbitration and Statement of Claim upon the Philippine Government

Filed a Petition for Confirmation and Execution of the Appeals Panel’s award with the Regional Trial Court of Quezon City

20

February 2015

09

March 2015

27

March 2015

27

July 2015

In the fourth quarter of 2015, Maynilad received confirmation that the Arbitral Tribunal for Arbitration with the Philippine Government has been constituted.

CORPORATE SOCIAL RESPONSIBILITY

Sustainability and social development are at the core of our businesses.

Through our subsidiaries and affiliate, we provide key stakeholders and marginalized sectors with the assistance and opportunities they need to improve their living standards, while empowering them for the future.

Our operating companies also strive to address the environmental issues that are most relevant to them. Their programs, projects and initiatives are geared towards the protection and judicious use of natural resources.

This section includes some of the corporate social responsibility (CSR) programs and activities undertaken by our subsidiaries and affiliate in 2015.

OUR CSR STRATEGY

To maximize the impact of our CSR efforts across the group, we concentrate on five key areas where our expertise, resources and partnerships can contribute in a meaningful way.

EDUCATION AND TRAINING
EDUCATION
AND TRAINING
INFRASTRUCTURE
INFRASTRUCTURE

OUR

FOCUS

AREAS

EMERGENCY PREPAREDNESS AND DISASTER RELIEF WELFARE AND LIVELIHOOD ENVIRONMENTAL STEWARDSHIP
EMERGENCY
PREPAREDNESS
AND DISASTER
RELIEF
WELFARE AND
LIVELIHOOD
ENVIRONMENTAL
STEWARDSHIP

2,000+

Pre-loved books stored by DMCI Homes for Books for a Cause

HIGHLIGHTS

143 1,000 +

College scholars supported by DMCI Mining subsidiaries

3

Classrooms donated by Southwest Luzon Power Generation Corporation

donated by Southwest Luzon Power Generation Corporation Seedlings planted by D.M. Consunji, Inc. 65,100 Trees
donated by Southwest Luzon Power Generation Corporation Seedlings planted by D.M. Consunji, Inc. 65,100 Trees
donated by Southwest Luzon Power Generation Corporation Seedlings planted by D.M. Consunji, Inc. 65,100 Trees
donated by Southwest Luzon Power Generation Corporation Seedlings planted by D.M. Consunji, Inc. 65,100 Trees
donated by Southwest Luzon Power Generation Corporation Seedlings planted by D.M. Consunji, Inc. 65,100 Trees

Seedlings planted by D.M. Consunji, Inc.

65,100

Trees planted by Maynilad in 2015, surpassing its target by 30%

planted by Maynilad in 2015, surpassing its target by 30% 62 Unskilled workers trained to become

62

Unskilled workers trained to become hydraulic equipment operators by Berong Nickel Corporation

624+

Hectares of reforested area in Semirara Island

624+ Hectares of reforested area in Semirara Island 6,000 Beneficiaries of the Doktor ng Barangay program

6,000

Beneficiaries of the Doktor ng Barangay program of DMCI Power

15,863

Free medical and dental consultations provided by Semirara Mining and Power Corporation Infirmary

72 RESHAPING OUR GROWTH STRATEGY

EDUCATION AND TRAINING

Knowledge and skills development are critical to improving employability and earning potential.

EMPOWERING WOMEN AND INDIGENOUS PEOPLES R OFELY SALDAJENO, 42, is a widow with three children.

EMPOWERING

WOMEN

AND INDIGENOUS PEOPLES

R OFELY SALDAJENO, 42, is a widow with three

children. She lives in Brgy. Berong in Quezon,

Palawan.

To support her children and parents, Rofely worked as a spotter for Berong Nickel Corporation (BNC), a joint venture between DMCI Mining Corporation and Atlas Consolidated Mining.

As spotter, Rofely assists and provides manual directions to hydraulic excavator operators. Though grateful for the opportunity, she continued to aspire for a higher paying job.

In 2015, Rofely got her big break when she was chosen by BNC to become part of a skills development program.

Under the program, unskilled laborers, female workers and indigenous peoples (IPs) from BNC host communities undergo around 150 hours of operations and maintenance training.

At the end of the program, successful trainees are hired as hydraulic excavator operators.

Over 60 locals have completed the program. Eight are Tagbanuas and five are women.

Majority have secured jobs at BNC while a few have transferred to other mining companies.

After finishing second in the training program, Rofely now earns double the daily rate of an unskilled worker.

Mahirap i-budget yung kinikita ko dati. Ngayon na nagbago na yung rate namin, hindi na masyadong mahirap,” she proudly said.

[Before, it was difficult to budget what I was earning. Now that my rate has changed, budgeting is no longer as difficult.]

BNC is the only mining company in the Philippines that offers hydraulic operator training to women and IPs.

The program is in line with the sustainable development goals of poverty alleviation, equitable quality education and gender empowerment of the United Nations and Philippine government.

OTHER EDUCATION AND TRAINING INITIATIVES

Semirara Mining and Power Corporation

• Sponsors the elementary and high school education of the dependents of its workers at Divine Word School of Semirara Island, Inc. In 2015, the company paid more than P22 million for tuition fees and repairs and maintenance at Divine Word.

Top high school graduates of Divine Word and Semirara National High School are also awarded college scholarships in Metro Manila and other major cities of the Philippines.

SMPC supported 109 scholars in 2015. The scholarships include tuition and fees and, for students requiring further financial support, monthly allowances.

requiring further financial support, monthly allowances. • Established Semirara Training Center, Inc. (STCI) in

Established Semirara Training Center, Inc. (STCI) in 2006 to support its manpower requirements and enable locals and workers’ dependents to acquire marketable skills

Applicants accepted into STCI receive free skills training and meal allowance for the duration of their course. Qualified students receive apprenticeship and job offers when there are open positions in the company. To date, STCI has produced 1,041 graduates, 517 of which are employed with the company.

Sem-Calaca Power Corporation and Southwest Luzon Power Generation Corporation

Sponsored various trainings on skills development and academic enhancement for 282 students and teachers in 2015. The training sessions included courses on masonry, welding, mechatronics, maximizing academic performance and how to become better learners and teachers.

SLPGC donated three classroom buildings to the Baclaran Elementary School in Batangas

DMCI Homes

Partnered with Books for A Cause (BFAC), an advocacy that aims to provide precious knowledge to every Filipino and increase literacy through continuous learning

In July 2015, DMCI Homes offered BFAC free use of its Insular property located along Chino Roces Avenue in Makati City to serve as a warehouse for donated books.

DMCI Homes is also promoting the book donation drive in its existing developments through its Give the Gift of Reading project.

D.M. Consunji Technical Training Center

Trained 1,785 people in 2015, most of whom (96%) worked for the DMCI group of companies. The rest (4%) received trainings on Basic Occupational Safety and Health and Construction Occupational Safety and Health.

Provided 962 workers with safety training and orientation to strengthen their knowledge and understanding of occupational safety

Facilitated various skills assessment-certification for 339 DMCI project employees who were issued TESDA National Certificate II for DOLE compliance

Berong Nickel Corporation

• Supports 43 college scholars from Barangays Berong and Aramaywan in Palawan. Aside from the free tuition fees, the company awards its scholars with monthly allowances, on-the-job trainings, among others.

Of its three scholars who graduated in 2015, one became an employee of BNC under its environmental department while another was assigned as a para- teacher at Tungib Elementary School in Berong. The other scholar successfully passed the criminology licensure exam.

A big percentage of the royalty being paid by the company is also used to send 62 college scholars from the indigenous peoples community to different universities in Palawan.

Continuously provides supplemental allowances to 21 para-teachers and teacher aides assigned at Berong National High School, Berong Elementary School, Tungib Elementary School, Quezon Aramaywan National High School, Aramaywan Elementary School, Lamane Elementary School and Marnek Elementary School

The allowances are meant to augment the existing salaries of the local teaching personnel, to encourage them to stay at the said schools.

Provides transport services for 1,028 elementary students and 195 day care children in Barangays Berong and Aramaywan. The number of school enrollees for both communities increased because of the free school bus service.

Supported 120 scholars under the Alternative Learning System (ALS) in 2015. Most of the scholars under this program come from the Tagbanua tribe.

Zambales Diversified Metals Corporation

Extended scholarship support to 316 high school students and 38 college students

Provided supplemental honorarium for five day care teachers in four barangays to support 134 children under the early childhood development program of the Department of Social Welfare and Development (DSWD)

Provided school supplies and materials for 255 students of Mapalad Elementary School and Taposo Elementary School

Maynilad Water Services, Inc.

Engaged more than 18,750 elementary and high school students in 52 schools in 2015, through its Daloy Dunong water education program

Aside from teaching the importance of water, Maynilad taught the students about good hygiene and environmental responsibility.

Since its inception in 2012, Daloy Dunong has converted close to 55,000 students into “Water Warriors” or champions for water, health and the environment.

Visited seven schools in Quezon City, Manila, Pasay and Parañaque on Global Handwashing Day to teach 2,700 schoolchildren the proper way of washing hands using soap and water

Volunteer teachers, including the cast members of TV shows Hi-5 Philippines and Batibot, stressed how maintaining clean hands helps prevent the spread of diseases such as pneumonia and diarrhea. Handwashing kits were also given to the students.

INFRASTRUCTURE Infrastructure improves quality of life and economic performance. 76 RESHAPING OUR GROWTH STRATEGY

INFRASTRUCTURE

Infrastructure improves quality of life and economic performance.

IMPROVING

IMPROVING LIVES T H R O U G H BETTER HOMES A FFORDABLE, DECENT HOUSING in

LIVES

THROUGH BETTER HOMES

A FFORDABLE, DECENT HOUSING in urban areas is a rarity, especially to those who belong to the marginalized class.

Lorna Sabio is a sari-sari store owner and mother of four children. She and her family used to live in a house made of light materials.

They suffered through extreme heat, noise and constant darkness because their house was built near a tall building.

In February, the entire family moved to a Habitat for Humanity Philippines and South Metro Manila i-Home Foundation house sponsored by DMCI Homes.

Sabio recalls how her family’s quality of life improved in their new home.

Dito, naging panatag kami. Naging komportable kami. Nakakatulog kami. Malaking pagkakaiba pagdating sa peace of mind.”

[Here, we became secure. We became comfortable. We can sleep. There’s a big difference in terms of peace of mind.]

The Sabio family is one of many families who benefited from DMCI Homes’ partnerships with Habitat for Humanity Philippines, South Metro Manila i-Home Foundation, Gawad Kalinga, CFC ANCOP Rotary Homes and various local government units.

DMCI Homes provides financial support while the LGUs secure the resettlement sites. The non-government organizations oversee the construction and awarding of the housing units and the selected beneficiaries put in the sweat equity.

In 2015 alone, DMCI Homes donated close to P80 million to build resettlement houses in Bohol, Davao, Mandaluyong, Muntinlupa, Paranaque, Pasig and Quezon City.

OTHER INFRASTRUCTURE INITIATIVES

Semirara Mining and Power Corporation

Operates and maintains a 15MW coal-fired circulating fluidized bed thermal power plant on Semirara Island for the growing electricity requirements of its operations, employees and host communities

Total energy generated during the year was 99,120,633 kWh. More than 10% of the produced electricity (10,383,909 kWh) was consumed by the community.

Acquired a 200-passenger boat to facilitate access of its employees to services not available on Semirara Island. It started plying the Bulalacao, Mindoro Oriental - Semirara Island, Caluya route in December 2015. Plans are underway to construct a seaport that will further enhance inter-island transport of travelers and goods.

• Supplied materials for the construction of nine housing units for indigent families in Sitio Villaresis and 92 relocation houses in Sitio Sabang. Of the 92 relocation houses, 68 have been completed, and 64 of which are now occupied.

• Operates and maintains a primary care facility on Semirara Island that is classified as an infirmary by the Department of Health. The facility has six medical doctors, a pathologist, five dentists, a medical technologist, a pharmacist, a pharmacy assistant, two x-ray technicians, seven nurses, a midwife, and two nurse aides.

In 2015, the infirmary recorded 13,171 medical and 2,692 dental consultations, 412 physical and pre- employment examinations and 97 successful infant deliveries.

Developed and maintains two freshwater impoundments and a modern water treatment plant to supply the industrial and domestic water requirements of its mine site and host communities on Semirara Island. Daily consumption of domestic water in 2015 averaged 2,426 cubic meters.

D.M. Consunji, Inc.

Constructed two Typhoon Yolanda-damaged churches for the Catholic Bishops’ Conference of the Philippines. Funded by the United States Conference of Catholic Bishops, the projects involved the reconstruction and improvement of the St. Anthony of Padua Parish Church in Tabontabon, Leyte and the St. Lawrence Parish Church in Balangiga, Eastern Samar. The two places of worship have a combined floor area of 3,299 square meters.

• Constructed the Sacred Heart of Jesus Parish Church along Don Jesus Boulevard in Muntinlupa City for the Roman Catholic Bishop of Parañaque. The church has a total floor area of 2,500 square meters.

Bishop of Parañaque. The church has a total floor area of 2,500 square meters. 78 RESHAPING
Berong Nickel Corporation • Operates and maintains a water treatment facility that provides free potable

Berong Nickel Corporation

Operates and maintains a water treatment facility that provides free potable water to households and schools near its mining operations in Barangay Berong

• Royalty shares from its gross production/output have allowed the Tagbanua indigenous peoples (IPs) in Palawan to build a Tribal Hall in barangays Berong and Aramaywan, which are used during their festivities and other events. In 2015 alone, the royalty shares given to the IPs reached P21.3 Million.

Maynilad Water Services, Inc.

Installed 869 bidets in 24 health centers, 6 hospitals, 20 public schools and 2 barangay halls to promote better sanitation practices within the company’s service area (West Zone)

Ten drinking fountains were also installed in the Commonwealth Barangay Hall and five health centers in Manila and Quezon City to promote proper hydration.

Constructed 44 drink-wash areas in populous and resource-deficient public schools in the West Zone to give more students access to clean water

Zambales Diversified Metals Corporation

Assisted in the improvement of seven public elementary schools, two public integrated schools and three daycare centers with over 3,000 students. The improvements were related to the school water system, school building, drainage system, comfort rooms, among others.

• Improved basic health facilities in nine barangays through the construction and repair of health centers, nutrition posts and public toilets

Constructed a water impounding structure for irrigation of lowland farms in Barangay Lucapon South benefitting around 34 farmers

• Improved community facilities such as community churches and chapels, senior citizen building, multi- purpose building, sports facility, barangay roads, waiting shed, barangay halls and community fences

80 RESHAPING OUR GROWTH STRATEGY

WELFARE AND LIVELIHOOD

Protecting the health and livelihood of marginalized groups is a solid step towards alleviating poverty.

FIGHTING

FIGHTING POVERTY T H R O U G H BACKYARD LIVELIHOOD D MCI POWER CORPORATION operates

POVERTY

THROUGH BACKYARD LIVELIHOOD

D MCI POWER CORPORATION operates in the island province of Masbate, one of the poorest areas in the country.

According to 2012 government estimates, poverty incidence in the province is around 44 percent.

The company sponsors income-generating projects on a backyard level to augment the income and secure the basic needs of marginalized families from its host communities.

One such initiative is its Working Animal Dispersal Project wherein qualified farming families are given carabaos to raise and use for their farming activities.

A recipient becomes the owner of the carabao provided that the animal is not sold or disposed within three (3) years from the time ownership was vested.

Jocelyn Vargas, 47, is a mother of six from Mobo, Masbate. According to her, having a carabao has made farming less difficult even with the effects of El Nino.

Kung wala yang kalabaw, hirap po kami sa pagbubungkal ng lupa, lalo na ngayong tuyot na tuyot,” she explains.

Mas napabilis po ang pagtatrabaho namin sa palayan kasama ang kalabaw. Mas maraming lupa ang natamnan namin ng palay at mga gulay. Kaya kahit na natuyo ang iba, may mga natira pa rin.

[Without a carabao, we would have a difficult time tilling the soil, especially now that it is very dry.]

[Working on the field became faster because of the carabao. We were able to plant rice and vegetables on more land. So even if some of the crops dried up, there were still those that survived.]

OTHER WELFARE AND LIVELIHOOD INITIATIVES

Semirara Mining and Power Corporation

• Organized and supports the Semirara Fishing Association (SEMFA) and Community Relations (ComRel) fishing groups to provide livelihood to island residents, especially those affected by mining operations

In 2015, the catch of SEMFA and ComRel fishermen totaled 135,415 kilograms and 13,512 kilograms, respectively.

Continued to develop 30 hectares of grazing land around Unong Lake intended for cows that can produce milk for the nutritional needs of malnourished children on the island.

Conducted trials for propagating gracilaria seaweeds, the natural food of abalone. This is in line with the abalone breeding project of the company.

Abalone is a high-value marine commodity. By increasing its production in Semirara Island, local fishermen could have an additional source of income.

Dr. Gavino C. Trono, a National Scientist for Seaweeds and known as the “Father of Kappaphycus Farming”, is facilitating the propagating trials.

Provides livelihood to about 51 personnel on a regular basis while providing daily wage to 224 workers during the rainy season, as part of the reforestation program of the company

Provides employment to over 1,600 residents, as 52% of the company’s workforce (3,237) are local hires. Payroll at the mine site alone reached P895.85 million in 2015.

Minesite employees enjoy free housing, water, electricity (up to 300 kWh/month), primary and secondary education for their dependents at the Divine Word School of Semirara Island, and transportation to and from work. Health and well-being programs are also available to employees and their dependents.

Sem-Calaca Power Corporation and Southwest Luzon Power Generation Corporation

Conducted feeding programs and medical, dental and optical missions in their host communities, in cooperation with various local government units

DMCI Power Corporation

Engaged the services of a medical doctor who will regularly visit and provide medical assistance to residents of Barangay Irawan, Puerto Princesa City in Palawan. The physician will also serve as an on-call doctor to the 6,000 residents in the area.

Organized and trained residents of Sta. Isabel, Calapan to form a multi-purpose cooperative that will supply seasonal workers to the company

Supports a detergent soap making program, swine fattening dispersal program and backyard vegetation program to augment income of unemployed mothers, farmers and fishermen in Masbate

program to augment income of unemployed mothers, farmers and fishermen in Masbate 82 RESHAPING OUR GROWTH

Zambales Diversified Metals Corporation

Provided support for preventive health care, such as basic medicines, health equipment, trainings for barangay health workers and supplemental honorarium for 23 barangay health workers

Sponsored supplemental feeding for 180 undernourished children and 150 undernourished students from Acoje Elementary School, Uacon Integrated School, Taposo Elementary School and Yamot Daycare Center

Supported 600 farmers by providing 16 sets of water pumps to six 6 barangays and distributing palay seeds, fertilizers and knapsack sprayers

Supported alternative livelihood initiatives for women and other groups, such as trainings and seminars for food processing and dressmaking; and provision of 10 units of tribikes for transportation and marketing of livelihood products

Maintains a community backyard nursery project that allows residents of Sitio Acoje, Lucapon South, Sta. Cruz, Zambales to raise and sell seedlings to the company as part of their livelihood and income generating program. The collected seedlings are utilized and planted on the adopted National Greening Sites of ZDMC.

Berong Nickel Corporation (BNC)

Implemented a number of healthcare projects in Barangays Berong and Aramaywan which include, but are not limited to, the provision of basic medicine supplies and vitamins, laboratory supplies and equipment, community ambulance, health awareness trainings, capacity building activities, feeding programs, and supplemental allowances for 24 Barangay Health Workers, three Bgy. Voluntary Sanitary Inspectors, six Barangay Environment Agriculture & Nutrition Scholars, one microscope technician, one midwife, one nurse and one ambulance driver.

• Sponsored community-based livelihood and enterprise development projects such as the provision of three sewing machines, 26 piglets, 900 chicks, fishing boat and equipment, etc.

Maynilad Water Services, Inc. (Maynilad)

Launched Food Always in the Home (FAITH) Gardens,

a food security program that aims to promote backyard

farming to achieve proper nutrition for families while instilling environmental consciousness and cooperation among community members

Maynilad supported the Parañaque City government in setting up four urban gardens for low-income communities in Barangays San Dionisio, San Isidro, BF and Don Galo. Aside from providing technical know- how, Maynilad donated and installed four overhead water tanks with drip irrigation system.

Conducts a voluntary blood donation drive two times

a year in partnership with the Philippine Children’s

Medical Center, Cardinal Santos Medical Center and Our Lady of Lourdes Hospital. A total of 226 Maynilad employees participated in the blood donation program.

As of December 2015, Maynilad has given over 80,100cc of blood for young Filipinos in need, particularly for seven blood recipients.

Provides water access to urban poor communities despite legal, financial and technical limitations through the “Pag-asa sa Patubig Partnership” or P3 program

The bulk water scheme involves a three-way partnership between Maynilad, the local government, and small- scale water provider Tubig Pag-asa (TPA). Since its launch, the program has benefitted 250 poor informal settler families in Bacoor City.

has benefitted 250 poor informal settler families in Bacoor City. DMCI HOLDINGS, INC. INTEGRATED ANNUAL REPORT

84 RESHAPING OUR GROWTH STRATEGY

ENVIRONMENTAL

STEWARDSHIP

Responsible and judicious use of natural resources helps ensure sustainable development.

CHAMPIONING MARINE DIVERSITY T HE GIANT CLAM ( Tridacna gigas ) is one of the

CHAMPIONING

MARINE

DIVERSITY

T HE GIANT CLAM (Tridacna gigas) is one of the most endangered marine species in the

world. It survives only in a safe and unpolluted

marine environment.

Giant clams promote biodiversity where they live because they attract corals, fishes and smaller marine biota. These species also clean their immediate environment when they siphon in seawater for food and then release clean, clear water back to the sea.

Semirara Mining and Power Corporation spawns and reseeds giant clams through its Semirara Marine Hatchery Laboratory (SMHL).

A marine resource development technology facility, SMHL has been successfully spawning seven (7) endangered species of giant clams since 2010.

It applies the technology developed by Dr. Edgardo Gomez, a national scientist and professor emeritus at the University of the Philippines-Marine Science Institute (MSI).

“The work being done in Semirara is very significant in marine resource conservation and biodiversity enhancement, not only in the Philippines but also in Southeast Asia,” Gomez says.

By the end of 2015, the facility has increased the giant clam population to 112,378, while reseeding over 38,000 of the species in the shallow waters of Semirara Island.

In November 2015, the Semirara Marine facility also turned over one hundred giant clam juveniles to the Department of Environment and Natural Resources (DENR) – Batangas Province, for reseeding along the Verde Island Passage, which is dubbed as the world’s “center of the center of marine shore fish biodiversity.”

OTHER ENVIRONMENTAL STEWARDSHIP INITIATIVES

DMCI Homes

Participated in ‘Adopt-An-Estero,’ a joint project of the Department of Environment and Natural Resources (DENR) and the Rotary Club of Diliman Silangan (RCDS)

More than 100 volunteers from DMCI Homes, DENR, RCDS, Metropolitan Manila Development Authority (MMDA), and Boys Scouts of the Philippines (BSP) participated in cleaning-up the 1.3-kilometer creek in Barangays Bahay Toro and Culiat in Quezon City.

The company also adopted and agreed to the annual clean-up of the Pasong Tamo creek, which passes through Stellar Place, a two-tower DMCI Homes community on Visayas Avenue, Quezon City.

Hosted the second leg of ‘Greeniosity’, a tree planting activity. Together with the local government of Marikina City, employees of DMCI Homes and other DMCI companies joined in planting fruit trees in an area of the Marikina watershed in Pintong Bocaue, San Mateo, Rizal.

Semirara Mining and Power Corporation

Planted 873,070 mangroves along the coastal areas of Semirara Island from 2000 to 2015. Of the total mangroves planted, around 529,800 survive.

• Conducts progressive rehabilitation of Panian Mine through the reforestation of its surrounding areas, roughly covering more than 624 hectares

For its reforestation program, the company mainly uses beach aguho (Casuarina equisetifolia), a fast-growing and nitrogen-fixing species of the she-oak. This is to prepare the reforested areas for the final phases of rehabilitation.

Members of the Semirara Marine Hatchery Laboratory regularly gather broken-off fragments of various species of corals in the reefs of Semirara Island and reseed these in the Tabunan marine sanctuary

In 2015, the facility reseeded 309 pieces of transplanted

corals.

the facility reseeded 309 pieces of transplanted corals. DMCI Power Corporation • Planted 15,000 mangrove

DMCI Power Corporation

Planted 15,000 mangrove propagules in selected locations in Mobo and Masbate City in the Province of Masbate

Procured 8,000 mangrove propagules for distribution to the host communities and other stakeholders, in line with the Mobo local government unit’s efforts to prevent sea shore erosion

Berong Nickel Corporation

Maintains and monitors two rehabilitation projects with a total land area of 6.8 hectares. Some of the plants used to rehabilitate the area are the Vetiver grass, (Chrysopogon zizanioides), Kudzu (Pueraria montana), Wild Daisy (Acmella grandiflora) and Australian Peanut. These species are groundcover plants, which prevent topsoil erosion and surface run-off.

Aside from these two rehabilitation projects, the company also rehabilitated another 12 hectares of land in Barangay Berong as part of the National Greening Program (NGP) of the DENR. With the additional 12 hectares, BNC’s total rehabilitated area under NGP since 2008 is 133.42 hectares.

The company also donated 12,176 assorted seedlings to NGP partners in 2015.

• Maintains a two-hectare seedling nursery facility with around 241,480 seedlings available at the end

Maintains a two-hectare seedling nursery facility with around 241,480 seedlings available at the end of 2015. The nursery has various forest, fruit, pioneering and native trees, as well as an assortment of groundcover, ornamental and herbal plants.

Constructed water management structures and reinforcements along gullies and creeks to mitigate any potential negative impact of the company’s mining operation on the bodies of water in Berong. Almost 8,000 meters of geotextile cloth and over 1,100 meters of check dams were installed during the year to act as a filter system for silt-laden runoff water.

Operated a 3.5-hectare rice paddy field and maintains a tilapia fish pond to serve as bio-indicators of mining impacts on water and soil quality in the community. In 2015, the company harvested 386 sacks of rice from the paddy field, proving that the company’s operations have no negative effect on local farming. Tilapia fish are also regularly harvested from the company-maintained fish pond.

Zambales Diversified Metals Corporation

Actively participates in different environmental activities in partnership with concerned government agencies and stakeholders

One of which is the continuous care, maintenance and improvement of all environmental structures inside and outside of the mining tenement and port area to meet the company’s main goal of “Zero Discharge” to lowland and nearby environment.

• Contributed in the conduct of biodiversity and mangrove assessment, in partnership with DENR Regional Office and LGUs, as part of the protection and conservation efforts in Uacon lake located at Brgy. Uacon in Candelaria, Zambales through the Uacon Lake Management Project

Maynilad Water Services, Inc.

• Spearheads regular tree-planting activities at the Ipo watershed during rainy season (from June to December). The company aims to plant 50,000 trees every year to protect the watershed from further degradation.

Around 65,100 trees were planted in 2015 alone, surpassing the target by 30%. Participating in the tree planting activities were 1,046 volunteers from Maynilad, DENR, NCIP, Norzagaray LGU, Ateneo de Manila - Graduate School, DOLE, BJMP, APO-NCR, Brgy. Batasan Hills, Mabuhay Vinyl, PSBA-Rotaract, UP Interschool Business Association, and Miss Earth Philippines Foundation.

Planted more than 30,000 mangrove propagules from February to May in two activities to celebrate the 2015 World Water Day. Over 350 volunteers from Maynilad, DENR-PENRO Cavite, JCI Manilena/Manila, PNP Maritime Group, Miss Earth Philippines Foundation and the local communities in Kawit, Noveleta, Rosario and Bacoor City worked together to achieve the milestone.

88 RESHAPING OUR GROWTH STRATEGY

EMERGENCY PREPAREDNESS AND DISASTER RELIEF

Disaster mitigation, management and response helps reduce injuries, health problems, loss of lives and damage to properties.

PROVIDING

PROVIDING RELIEF DURING CALAMITIES A DDRESSING BASIC HUMAN REQUIREMENTS in the immediate aftermath of a disaster

RELIEF

DURING CALAMITIES

A DDRESSING BASIC HUMAN REQUIREMENTS in the immediate

aftermath of a disaster is a major challenge

even for large companies.

Mobilizing resources in an efficient and prompt manner takes a lot of forethought, coordination and commitment.

Maynilad provides relief during natural and man-made disasters through potable water donations, water technology assistance, funding support, on-the-ground technical services and more.

“We are here to extend our assistance because we understand that having access to clean water is vital, especially during times of calamity,” said Maynilad President and CEO Ricky P. Vargas.

In 2015, Maynilad provided potable water to some 3,400 families from different provinces affected by Typhoon Lando.

Over 6,000 units of varied-sized containers (1-liter bottles, 1-gallon and 5-gallon jugs) were brought to Isabela, Aurora, Nueva Ecija, Benguet, Pangasinan, Pampanga and Quezon Province.

The relief activities were done in partnership with the Alagang Kapatid Foundation, Inc. (AKFI), DSWD-National Resource and Operation Center, Philex Group Foundation, Inc., Philippine Disaster Recovery Foundation and NGO International Citizen Service.

Maynilad also partnered with the Metropolitan Waterworks and Sewerage System to deliver 2,000 pieces of galvanized roofing sheets and potable water to families made homeless by the typhoon in General Nakar, Quezon Province.

When Samar and Leyte were hit by Typhoon Nona in December 2015, the company, together with the TV5 AKFI, also provided 1-liter bottled water to around 1,000 families in the said provinces.

OTHER EMERGENCY PREPAREDNESS AND DISASTER RELIEF INITIATIVES

Semirara Mining and Power Corporation

Community-based emergency preparedness initiatives such as disaster and risk reduction management workshops and drills were conducted in close partnership with the local government units and key sectoral groups in Antique Province.

The company also signed a Memorandum of Agreement on Boosting Emergency Preparedness on Semirara Island with the local government executives of the Municipality of Caluya, and Barangays Alegria, Semirara and Tinogboc.

In the said agreement, the parties agreed to:

voluntarily pool technical, financial and capital resources to support the organization and mobilization for islandwide emergency operations;

• build the capabilities of organizations and individuals to improve emergency management on the island; and

organize and support volunteer groups for risk reduction and management and coordinated response, among others.

The parties held its annual emergency management and first responders’ training and drills from 08-13 June 2015, again tapping the Office of the Provincial Disaster and Risk Reduction Management (PDRRM) - Antique as training resource.

The officers of the Municipal Government of Caluya also participated in the 2015 trainings, bringing the total number of people trained on emergency management to 37, and first responders to 132.

Maynilad Water Services, Inc. (Maynilad)

To minimize the risk of dehydration and heat stroke in areas and events where large crowds were expected to gather, the company provided potable water through hydration stations.

For the Papal visit in January 2015, 60 Maynilad employee-volunteers set up and manned 15 water stations and 11 water tankers along main thoroughfares leading to Rizal Park. The company also supplied 90,000 units of bottled water for the Manila, Leyte, and Tacloban legs of the Papal visit.

Maynilad also desludged 22 septic tanks and declogged sewer lines around Quirino Grandstand, and assisted in the cleanup and disposal of waste from the hundreds of portalets in the park.

In collaboration with TV5, North Luzon Expressway and several community-based organizations, Maynilad established water stations in key areas along the north tollway network for the All Saints’ and All Souls’ holidays.

Maynilad water dispensers were installed at Rescue 5 first-aid stations at the Manila North and South Cemeteries.

Meanwhile, the Municipal Police Training Committee (MPTC) distributed Maynilad bottled water for its “Safe Trip Mo, Sagot Ko - Undas campaign”, which benefitted motorists traversing NLEX, SCTEX and CAVITEX. Free drinking water were likewise distributed in Muntinlupa and Quezon City cemeteries.

Various fire-hit areas were supplied potable water, benefiting close to 2,200 families in Caloocan, Manila, Parañaque, Pasay, Quezon City and Valenzuela. Relief partners included government agencies and private groups such as the MVP Group Tulong Kapatid Foundation.

CORPORATE

GOVERNANCE

We believe that a well-functioning corporate governance system leads to economic efficiency, sustainable growth and financial stability.

In this report, we outline our corporate governance framework and how it governs the performance of our Board of Directors, management, officers and employees, with respect to their duties and responsibilities to our stakeholders.

The discussion is organized according to the Principles of Corporate Governance of the Organization for Economic Cooperation and Development (OECD), a global standard for good governance policies and best practices.

CORPORATE GOVERNANCE

ENSURING THE BASIS FOR AN EFFECTIVE CORPORATE GOVERNANCE FRAMEWORK

Compliance

Securities Regulation and Reporting

Environment, Health and Safety

THE RIGHTS AND EQUITABLE TREATMENT OF SHAREHOLDERS AND KEY OWNERSHIP FUNCTIONS

Institutional Investors

Right to Vote

Right to Participate in the Profits

Other Shareholder Rights

Notice of Annual Shareholders’ Meeting

Annual Shareholders’ Meeting

INSTITUTIONAL INVESTORS, STOCK MARKETS AND OTHER INTERMEDIARIES

Proportionate Voting

Insider Trading

Conflict of Interest

Company Loan

Related Party Transactions

Share Repurchases

THE ROLE OF STAKEHOLDERS

Employees

Customers

Suppliers and Contractors

Creditors

Government

Community and Environment

Stakeholder Commitment

Anti-Corruption and Ethics Program

Conflict of Interest

Whistleblowing

DISCLOSURE AND TRANSPARENCY

Ownership Transparency

Information Policy

Investor Relations

Media Engagement

THE RESPONSIBILITIES OF THE BOARD OF DIRECTORS

Strategy and Oversight

Board Charter

Board Structure and Composition

Board Competency and Diversity

Board and Director Development

Chairman and Chief Executive Officer (CEO)

Regular Directors

Independent Directors

Board Meetings

Board and Director Development

Corporate Secretary

Director Remuneration

Executive Succession Planning

CEO Performance Evaluation

Board Performance Evaluation

Board Committees and Appraisal

Audit Committee

Nomination Committee

Remuneration Committee

Risk Oversight Committee

Internal Controls and Risk Oversight

Enterprise Risk Management (ERM)

Policy

Risk Management Framework

ERM Monitoring and Reporting

External Audit

ENSURING THE BASIS FOR AN EFFECTIVE CORPORATE GOVERNANCE FRAMEWORK

O UR BOARD OF DIRECTORS (BOARD) and Management commit to promoting transparency and fairness within

financial markets, while supporting the efficient allocation

of resources.

They ensure that our corporate governance framework is in accordance with legislation, regulation, self-regulatory arrangements,

voluntary commitments and ethical business practices.

Compliance

We strive to build a strong compliance mindset among our officers, employees, subsidiaries and affiliate by promptly apprising them of compliance requirements and procedures.

Regular consultations are also done across the group to facilitate alignment and understanding of our Company’s corporate governance practices.

Securities Regulation and Reporting

We comply with the regulatory and reportorial requirements of the Securities and Exchange Commission (SEC) and Philippine Stock Exchange (PSE).

Every year, we report our full compliance to the SEC Revised Code of Corporate Governance (SEC Code), and disclose our level of adoption of the PSE Corporate Governance Guidelines for Listed Companies.

In 2015, the Company distributed a Self-Assessment Compliance Checklist to the Directors, Officers and employees, which was attested to and certified by the Chief Compliance Officer.

Aside from advising and orienting Directors, Officers and employees of their respective duties under the SEC Code, we also have internal mechanisms for ensuring their compliance to this Code.

mechanisms for ensuring their compliance to this Code. Disclosures. To protect our shareholders and contribute to

Disclosures. To protect our shareholders and contribute to the development of the Philippine capital market, we promptly disclose structured and non-structured reports and material information about our Company.

Transactions involving the trading of our shares by our Directors and Officers are disclosed and reported to the PSE and SEC within three (3) trading days, which is stricter than the prescribed reporting period of five (5) trading days.

Compliance Officer. The Board has designated Vice President and Chief Finance Officer Herbert M. Consunji as Compliance Officer, to ensure adherence to corporate governance principles, best practices, the SEC Code and the Company’s Revised Code of Corporate Governance.

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