BUILDING A SUSTAINABLE

2019 ANNUAL REPORT Uplifting lives, impacting society, and helping shape the nation

2019 ANNUAL REPORT 2 2019 ANNUAL REPORT 3

TABLE OF CONTENTS

22 26 30 36 42 2019 BY THE NUMBERS

P 67.3 bn OPERATIONAL CONSOLIDATED REVENUES HIGHLIGHTS up by 17% from 2018 3 Performance Highlights 30 Offices 4 Chairman’s Message 36 Malls P 4,300 bn 8 Milestones 42 Hotels 42.6 TOTAL LANDBANK REAL ESTATE SALES IN HECTARES 12 Moments We Build 48 Leisure 14 Awards 52 Sustainability up by 12% from 2018 26 16 Board of Directors 66 Corporate Governance TOWNSHIPS AND 20 Key Executive Officers 68 Enterprise Risk Management P INTEGRATED LIFESTYLE 16.8 bn COMMUNITIES 22 Townships 70 Financial Statements RENTAL INCOME 26 Residential 200 Corporate Information up by 18% from 2018 722 RESIDENTIAL P DEVELOPMENTS 2.5 bn HOTEL OPERATIONS ABOUT THE COVER 1.3M up by 67% from 2018 MEGAWORLD PREMIER OFFICES IN GLA At Megaworld (the Company), we don’t just build properties— P we build a sustainable tomorrow. 29.6 bn 453K We see every development as a chance to create nurturing EBITDA communities, to generate immense opportunities, and to MEGAWORLD LIFESTYLE MALLS IN GLA promote environmental responsibility. Every project is a venture up by 19% from 2018 to uplift lives and spur progress. Featuring the Company’s biggest highlights for the year P 3,637 masked in the word tomorrow, the cover art showcases our 19.3 bn groundbreaking projects that solidify our position as a leading NET INCOME MEGAWORLD HOTELS developer committed to the betterment of the nation’s future. HOTEL KEYS up by 22% from 2018 4 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 5

CHAIRMAN’S MESSAGE

The year 2019 was truly a rich and meaningful one for us. Not only did it mark our 30th year of operations, it was a turning point for our efforts at sustainability.

DR. ANDREW L. TAN Chairman and President

Through the years, Megaworld has contributed much projects while opening newly completed ones. We not to the enhancement of the country’s metropolitan only continued our innovative approach to property skylines, with developments that cut across key development, we also aimed to level it up by laying the elements of society—residences, office spaces, hotels, groundwork for digital transformation. and commercial properties. With a new vision statement that proudly declares, “We The year 2019 was no different. Building on our core uplift lives, impact society, and help shape the nation,” values of integrity, creativity, innovation, excellence, we set out to redefine living, working, and playing as we and love for the Company, we were able to sustain the introduced innovations that aim to reshape the property momentum of growth we’ve built in recent time and landscape for years to come. retain our position as the leading developer of urban townships and the largest office space developer and With this in mind, we set out to ensure that all our landlord in the country. initiatives towards innovation are anchored on building a more sustainable tomorrow not only for the property Testament to our creditable performance for the year development industry but also for the nation as a whole. was our net profit which amounted to P19.3 billion, a substantial increase of 22% from the previous year’s After launching our “iTownships” initiative a couple of P15.8 billion. This was driven by a robust 17% year- years back, we continued to make strides in future- on-year growth in our consolidated revenues to P67.3 proofing our townships, a development concept that we billion, underpinned by the strong performances of all pioneered back in 1997 when we launched of our key business units. in Libis, .

Megaworld’s real estate sales registered a 12% growth, In 2019, we sustained our efforts to incorporate smart ending the year at P42.6 billion. Our reservation sales technology, digital technology, design innovations, and similarly sustained their growth momentum in 2019, connectivity capabilities into our developments, while ending the year at a record P149 billion. Rental income enhancing the green and sustainable features of our from our offices and malls exhibited another year of properties and enriching them through creative and record growth, soaring 18% to P16.8 billion in 2019. cultural installations. Income from our hotel business, in turn, grew by 67% to end the year at P2.5 billion from P1.5 billion the During the year, we launched a total of 23 new projects previous year. with a total value of P85 billion. Most of these projects are located in key provincial areas, in keeping with our thrust Despite the challenges of 2019, Megaworld was able to aggressively expand our property development into to sustain its expansion initiatives, launching new strategic locations outside the National Capital Region. 6 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 7

CHAIRMAN’S MESSAGE

133 awards from January to December, some 57 of which were from international award-giving bodies.

Of all these citations, we are extremely proud that we were once again named “Best Employer” at the Best Employer Brand Awards 2019. We were also cited as one of the “Dream Companies to Work For,” not just in the Philippines but across Asia.

We will accelerate the These awards effectively complemented our initiatives implementation of our during one of our busiest years in recent times. innovation and digital The year 2019 was truly a rich and meaningful one for transformation strategies across us. Not only did it mark our 30th year of operations, it was a turning point for our efforts at sustainability. all our businesses to align with the current challenges. Nevertheless, we are aware of the headwinds brought about by the COVID-19 pandemic in the country since Uptown Parade in Grand Ballroom at Hotel , the early part of 2020. The imposition of community , quarantines and travel restrictions has impacted foot traffic and occupancy rates in our malls and hotels. However, this situation also highlighted our strengths. We launched residential projects in Batangas, Cavite, We opened new retail spaces in Hotel Lucky Chinatown is located near the legendary , , Pampanga, Baguio City, Boracay, in Mandurriao, ; West along Daang walled city of , the iconic Manila City Hall, Our strong financial standing puts us in an City, and . We also rolled out Hari in Las Piñas City; McKinley Hill and Uptown and the historic National Museum. The Belmont exceptionally good position to weather the crisis projects in McKinley West, Westside City, McKinley Bonifacio, both in City; in Hotel Boracay, our second under the Belmont Brand, and take advantage of the opportunities that will Hill, ArcoVia City, and inside the San Lazaro Tourism City; Boracay Newcoast in Boracay Island, Aklan; and is located within the sloping area of the estate just arise once recovery begins. The crisis also served to and Business Park. Davao Park District in Lanang, Davao City. beside Savoy Hotel. It overlooks the eastern beach of highlight the value of our offerings. For example, our Boracay Island. focus on building sustainable townships under the We have also launched two new office towers for Our new commercial properties cover a gross leasable live-work-play concept helped the people living in our sale—the One Corporate Place in Maple Grove, area of around 20,600 square meters, bringing the Savoy Hotel Mactan, in turn, is Megaworld’s first communities to cope better with the pandemic as all Cavite, and the International Corporate Plaza in Iloilo Megaworld Lifestyle Malls footprint to 453,000 hotel development inside our 30-hectare The Mactan their needs are immediately accessible. Moreover, the Business Park, Iloilo City. square meters nationwide, spread across 20 lifestyle Newtown in Lapu-Lapu City. It will cater mostly to acceleration of the digital economy aligns perfectly malls and various commercial centers as of end-2019. business travelers and family vacationers because of with our ongoing thrust towards digitalization. The year has also been a busy one for our Megaworld its close accessibility to the beach and resorts around Premier Offices. We were able to complete around In our continuing effort to transform our Mactan and to the new Mactan-Cebu International As we navigate this new reality, we will adjust to 192,300 square meters of leasable office space developments into models of sustainability, we have Airport. the new demands of our diverse market. We will in 2019. This has brought our current inventory of begun using solar roof panels for our malls while accelerate the implementation of our innovation leasable office space to 1.3 million square meters. utilizing an open layout scheme for passive cooling One of the highlights of the year for us was the and digital transformation strategies across all our and natural lighting in common areas. In fact, in our opening of our very first cultural museum dedicated businesses to align with the current challenges. We will We now have over 130 multinational companies as new Mactan Newtown Beach Walk mall, around 40% to the "World's Oldest Chinatown" inside the Lucky also continue to implement enhanced safety measures tenant partners, leasing over 70 completed office of the entire development will be dedicated to green Chinatown Mall in Binondo, Manila. in our developments, particularly our malls and office towers in over 10 key cities nationwide. and open spaces. spaces, to ensure that our guests and tenants are safe The Chinatown Museum features 18 galleries, each and protected. By the end of 2020, we aim to have at least 1.4 million Our commitment to support the government’s call to focusing on various influences and historical events that square meters of gross leasable space, through the elevate the country’s tourism industry has never been have shaped the cultural, social, and economic threads Through all these, we will always ensure that the addition of another 86,800 square meters of fresh more emphasized than in 2019. We opened three new of Binondo. We envision this new cultural landmark, communities we build will contribute to the creation of leasable office space this year. I believe that the value hotels in 2019, with the goal of being able to provide recognized by the National Historical Commission and a safe, secure, and sustainable tomorrow for everyone. we continuously bring to our office space offerings will added accommodations to local and international National Commission for Culture and the Arts, as a allow us to achieve this objective. tourists. community space and heritage project that offers a visual retelling of the rich history of Binondo. The growth of our Megaworld Lifestyle Malls was These new hotels are the 93-room Hotel Lucky likewise robust in 2019. We expanded our commercial Chinatown in Binondo, the 442-room Belmont I am also proud to report that, much like in previous retail portfolio with the opening of 11 commercial Hotel in Boracay, and the 547-room Savoy Hotel in years, the Megaworld Group once again garnered DR. ANDREW L. TAN properties across our townships nationwide. Mactan, Cebu. several awards in 2019. In fact, we received a record Chairman and President 8 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 9

MILESTONES

• Marked 20th year of listing • Acquired majority stakes in in the PSE Global-Estate Resorts, Inc. (GERI) • Launched Davao Park • Launched The Mactan District, the Company’s • Launched two GERI Newtown, first township in first township in Mindanao. townships: Alabang West Visayas in Las Piñas City and Twin • Formed Megaworld Prime Lakes in Laurel, Batangas • Launched McKinley Hill, RFO, a specialized group Megaworld’s largest that offers the Company's township in ready for occupancy units 2014 • Launched Newport City, • Introduced affordability model the first integrated through the flexible payment tourism township 2012 scheme • Megaworld public • Formed Suntrust Properties to listing in the PSE cater to the affordable market 2004-2005 • Formed Empire East to cater to mid-income market 1997

• Incorporation of 1994 Megaworld Corp.

1989

1991

• Introduced Joint Venture model for land banking 1996

• Launched Eastwood City 1998-2000 as the first township development • Set up a global sales network 2010-2011 through Megaworld International • Eastwood City established as the first PEZA accredited IT park • Launched McKinley West and Uptown Bonifacio, both 2013 located in the fast-growing District • Launched Iloilo Business Park, the first 2015 township in Iloilo • Inaugurated the McKinley Hill Stadium, formerly the Emperador Stadium • Launched townships Arcovia City along C5 in Pasig City; and Northill Gateway in Bacolod City; and Westside City at the in Parañaque. 10 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 11

MILESTONES

• Launched the “iTownships” • Inaugurated the Company’s first campaign to promote Megaworld’s school venture in the Visayas, the future-ready township developments Newtown School of Excellence at The Mactan Newtown in Cebu • Unveiled the Company’s first museum development, the Iloilo • Acquired Stateland, Inc. through Museum of Contemporary Art Suntrust Properties, Inc. to cater to • Launched Maple Grove in (ILOMOCA) in Iloilo Business Park economic housing , Cavite • Launched Twin Lakes Hotel in Laurel, • Announced the development Batangas, the Philippines’ first and of GERI’s Eastland Heights as only vineyard hotel the Company’s first integrated lifestyle community 2018 2016

2017

• Announced the development of The Hamptons Caliraya in Laguna 2019 • Moved to its first-ever corporate headquarters, the Tower in Uptown Bonifacio, Taguig • Unveiled new corporate logo and • Launched sustainable township • Unveiled a refreshed logo for • Launched the Chinatown • Took part in the Alliance Global vision-mission-values statement Arden Botanical Estate covering Megaworld Lifestyle Malls Museum, the PH’s first cultural Group, Inc.’s (AGI) first-ever during the Company’s 30th portions of Trece Martires City museum dedicated to the “World’s sustainability summit entitled • Celebrated 25th year of listing anniversary and Tanza in Cavite Oldest Chinatown” SustainAGIlity in the PSE • Unveiled Arco de Emperador at • Launched Empire East Highland Arcovia City, the Philippines’ City in , Rizal tallest single bronze monument 12 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 13

2019 MOMENTS WE BUILD

In 1989, Megaworld was founded with a vision to build a legacy as enduring as the properties it constructs—and thirty years on, it has succeeded. Today, it has gone beyond building structures; it has helped build people’s dreams, with the moments they treasure. 14 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 15

AWARDS 43 Property and Development Awards

including 4 from the World Luxury Hotel Awards, 8 from the Asia Property Awards, and 2 Outstanding Developer Awards

45 4 Communication Awards Best Employer Awards

including 8 Anvils, 4 Asia Pacific Stevies, 3 of which were from the 10th Asia’s 19 Philippine Quills, and 14 international awards Best Employer Awards from DotComm Awards, International Business 133 Awards, and MarComm Awards awards won in 2019 18 2 Governance and Leadership Awards Government Awards

locally and internationally including the International Star Award for for being among the top taxpayers in Quality of Business Initiative Directions (BID) the real property tax category from the 19th International ISAQ Convention 21 CSR and Sustainability Awards

17 of which were from international award-giving bodies 16 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 17

BOARD OF DIRECTORS

ANDREW L. TAN KATHERINE L. TAN KINGSON U. SIAN Chairman of the Board Director Executive Director

Dr. Tan is the founder of the Company and has He is also the Chairman of Emperador Inc., a Ms. Tan, has served as Director of the Company Mr. Sian has served as Director of the Company served as its Chairman and President since its public-listed company which owns Emperador since 1989. She is concurrently a Director and since April 13, 2007. He joined the Megaworld incorporation in 1989. He pioneered the live-work- Distillers, Inc., the leading brandy manufacturer and Treasurer of publicly-listed Alliance Global Group, Group in September 1995 as Senior Vice President play-learn model in real estate development distributor in the Philippines. Dr. Tan is Chairman Inc. and Emperador Inc. She has extensive and is currently Executive Director of the Company. through the Company’s integrated township of Megaworld Foundation, the Company’s experience in the food and beverage industry and He is concurrently Director, President and Chief communities, fueling the growth of the business corporate social responsibility arm, which primarily is currently Director and Corporate Secretary of Operating Officer of publicly-listed Alliance Global process outsourcing (BPO) industry. He embarked focuses on the promotion of education through The Bar Beverage, Inc. and Director and President Group, Inc. and Travellers International Hotel on the development of integrated tourism estates scholarship programs for financially handicapped of Andresons Global, Inc., Raffles & Company, Inc., Group, Inc. He is the Chairman and President of through publicly-listed Alliance Global Group, Inc. but deserving students, and supports causes that The Andresons Group, Inc. and Choice Gourmet Prestige Hotels & Resorts, Inc. and Luxury Global and Global-Estate Resorts, Inc., which he both promote poverty alleviation, people empowerment, Banquet, Inc. She is also a Director and Treasurer Hotels and Leisure, Inc., the Senior Vice President chairs, while continuing to focus on consumer- social justice, good governance and environmental of Alliance Global Brands, Inc. and Emperador of Megaworld Land, Inc. and the President of friendly food and beverage and quick service conservation. He is a director of Travellers Distillers, Inc. Eastwood Cyber One Corporation. Mr. Sian was restaurants. Dr. Tan serves as Chairman of the International Hotel Group, Inc., a publicly-listed formerly a Vice President of FPB Asia Ltd/First Board of Empire East Land Holdings, Inc., a company, which owns , and Pacific Bank in Hong Kong from 1990 to 1995. publicly-listed subsidiary of the Company, and the food and beverage companies, Emperador Prior to that, he was connected with Citicorp Real Suntrust Properties, Inc., a subsidiary engaged Distillers, Inc. Alliance Global Brands, Inc. and Estate, Inc. in the United States from 1988 to 1990. in the development and marketing of affordable Golden Arches Development Corporation. Mr. Sian graduated from the University of the housing projects. He also serves in the boards of Philippines with the degree of Bachelor of Science other Megaworld subsidiaries including Eastwood in Business Economics. He obtained his Master’s Cyber One Corporation, Megaworld Land, Inc., Degree in Business Administration for Finance and Megaworld Central Properties Inc., Megaworld Business Policy from the University of Chicago. Bacolod Properties, Inc., Mactan Oceanview Properties and Holdings, Inc., Megaworld Newport Property Holdings, Inc. and Richmonde Hotel Group International Limited. 18 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 19

BOARD OF DIRECTORS

ENRIQUE SANTOS L. SY CRESENCIO P. AQUINO ROBERTO S. GUEVARA JESUS B. VARELA Director Independent Director Independent Director Independent Director

Mr. Sy has served as Director of the Company since Atty. Aquino is currently the Managing Partner of The Mr. Guevara has been an Independent Director of Mr. Varela has served as Director of the Company since July 2009. He was formerly a Vice President for the Law Firm of CP Aquino & Partners. He concurrently the Company since June 20, 2001. He is Chairman June 2016. He concurrently serves as independent director Corporate Communications & Advertising Division serves as independent director in the boards of of the Board of Directors of Seed Capital Ventures, in the boards of publicly-listed, Global-Estate Resorts, Inc. of the Company until his retirement in March 2011. publicly-listed, Global-Estate Resorts, Inc. and Empire Inc. He serves on the board of other companies, and Travellers International Hotel Group, Inc. He is also the Chairman of the Philippine Chamber of Commerce and He is concurrently a Director of publicly-listed East Land Holdings, Inc. He is a graduate of the San such as G & S Transport Corporation, a licensee of Industry, GS1 Philippines (Barcode of the Philippines), and Empire East Land Holdings, Inc. and a Director of Sebastian College Manila with degrees in Bachelor of Avis Car Rentals, Guevent Industrial Development New Lights Technologies, Inc. He is the President and CEO Eastin Holdings, Inc. and First Oceanic Property Arts and Bachelor of Laws. Atty. Aquino has extensive Corporation, and Investment and Capital of the Advancement of Workers’ Awareness Regarding Management Inc. He is also a Director and the experience in both the public and private sectors as Corporation of the Philippines, and as Independent Employment (AWARE) Foundation, Inc., and President Corporate Secretary of Asia Finest Cuisine, Inc. and Director of Clark Development Corporation from Director of First Centro, Inc., Honeycomb Builder of Foundation for Crime Prevention, Philippines-Greece Soho Café & Restaurant Group, Inc. and Corporate 2012 to 2016., Independent Director of Suntrust Home and Kalahi Realty, Inc. Mr. Guevara graduated Business Council and Philippines-Peru Business Council. He Secretary of Empire East Communities, Inc. Mr. Developers, Inc. from 2009 to 2012, Corporate Legal from San Beda College in 1974, and received is also the Director General of the International Chamber Sy previously worked as Advertising Manager Counsel of MBF Card and One Card Corporation from a graduate degree from the Asian Institute of of Commerce Philippines (ICC-Philippines), Receiver of of Consolidated Distillers of the Far East, Inc., June 1998 to May 2004, Special Assistant and Chief Management and a post graduate course at the J-Phil Marine Shipping Inc., and Member of the Committee for Accreditation of Cargo Surveying Companies. Mr. Creative Director of AdCentrum Advertising, Inc., Legal Counsel of the Government Service Insurance Institute for Management Development (IMD), in Varela has more than twenty years of experience in the Copy Chief of Admakers, Inc. and Peace Advertising System from September 1992 to June 1998, Director Lausanne, Switzerland. fields of marketing, human resources, international labor Corporation, and Creative Associate of Adformatix, of the Meat Packaging Corporation of the Philippines affairs, agriculture, and commerce, among others. He has Inc. Mr. Sy graduated with honors from the Ateneo from September 1992 to June 1998, Personnel and done executive work with the Department of Agriculture, de Manila University with the degree of Bachelor of Administrative Manager, Corporate Secretary and National Food Authority Council, Philippine Genetics, Inc., Arts in Communication Arts. Chief Legal Counsel of ComSavings Bank from National Irrigation Administration, Philippine Planters September 1992 to June 1998, and Executive Director Products, National Agri- Business Corporation, Agriculture of the Department of Interior and Local Government Anti-Smuggling Task Force, and Nautical Highway Board. ("DILG") from 1988 to 1992, and concurrently Ex- He served as Labor Attaché to Kobe, Japan, to the Commonwealth of Northern Marianas Island, and to Athens. Officio Commissioner of the DILG with the Housing Mr. Varela obtained his bachelor’s degree in Economics from and Land Use Regulatory Board also for the same Ateneo De Manila University. He attended training courses period. Atty. Aquino He was formerly an Associate in Labor Administration and Policy Formulation under the Professor with the San Sebastian College. Atty. International Labor Organization/ARPLA program, the Aquino has been a member of the Integrated Bar of Corporate Planning Course at the Center for Research the Philippines since 1978 and is also a member of the Communication, Foreign Exchange Training by Metro Bank Capitol Bar Association, Knights of Columbus, and the and Forex Club of the Philippines, Systems Analysis by the Lawyers League of the Philippines. Presidential Management Staff, Asian Productivity Seminar and other in-house seminars conducted by the Department of Labor and the Development Academy of the Philippines. 20 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 21

KEY EXECUTIVE OFFICERS

ATTY. MARIA CARLA MARIA VICTORIA NOLI T. UYKIM M. ACOSTA D. HERNANDEZ Corporate Advisory and Special Senior Vice President and International Senior Vice President and Sales and Projects Head Marketing Head Marketing Head

DR. ANDREW L. TAN ROLAND GRAHAM RAFAEL ANTONIO President and Chief Executive Officer J. TIONGSON M. COATES S. PEREZ First Vice President and First Vice President and Human Resources and Megaworld Premier Offices Head Megaworld Lifestyle Malls Head Corporate Administration Head

LOURDES KEVIN ANDREW DR. FRANCISCO KIMBERLY HAZEL CARMEN RAYMUNDO T. GUTIERREZ-ALFONSO L. TAN C. CANUTO A. STA. MARIA C. FERNANDO V. MELENDRES Senior Executive Vice President and Executive Vice President and Senior Vice President and Treasurer Corporate Communications and Managing Director for Managing Director for Luxury Global Chief Operating Officer Chief Strategy Officer Advertising Head Prestige Hotels & Resorts, Inc. Hotels and Leisure, Inc.

KINGSON GIOVANNI PHILIPPS JOSE ARNULFO HAROLD BRIAN CHERYLL U. SIAN C. NG C. CANDO S. BATAC C. GERONIMO B. SERENO Senior Vice President and Senior Vice President and Managing Director for Operations Estate Management Head Public Relations and Media Affairs Head Chief Risk Officer Executive Director Finance Director 22 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 23

TOWNSHIPS

DEVELOPING SUSTAINABLE TOWN Creating future- SHIPS ready townships

When Megaworld launched Eastwood City in Quezon City back in 1996, little did the industry know that the young Company would be pioneering something that would become the standard for other property developers to follow in subsequent years.

With the establishment of the 18.5-hectare Eastwood City, Megaworld’s pioneering integrated township concept was born—mega-communities designed to allow residents to live, work, play, and learn in one setting.

After three decades, Megaworld has earned the distinction of being the country’s largest developer of integrated urban townships and lifestyle communities. TOWNSHIPS In 2018, Megaworld started the iTownships initiative, Over the span of 30 years, which is the Company’s program to future-proof its Megaworld spearheaded the townships. In line with this, the Company has begun reshaping of the Philippine to incorporate smart technology, digital technology, design innovations, and connectivity capabilities into property development landscape, its projects. Top: Eastwood City, Megaworld’s first township developing not just stand-alone properties but also complete, In 2019, the Company decided to level up its townships further by committing to more sustainable integrated communities where development in the coming years. Megaworld everything is within easy reach. announced that it is looking to make all of its 24 26 townships fully reliant on renewable energy sources in the next few years. This will complement its efforts 2018 2019 to enhance the green and sustainable features of the Company’s townships looking forward. 24 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 25

TOWNSHIPS

The Arden Botanical Estate: Living Close to Nature Highland City: Elevating the Township

In 2019, Megaworld The master-planned provincial township will have several residential Megaworld also Megaworld and Empire East will spend P20 billion over the next 10 years to and leisure villages, commercial areas, sports and adventure parks, develop this township. and subsidiary Global- and a mixed-use district. Megaworld and GERI have earmarked P18 announced that it Estate Resorts, Inc. billion for the Arden Botanical Estate project which will be developed would be partnering Highland City will host the expansive Highland Mall with a gross floor area (GERI) announced over the next 15 years. with subsidiary of around 58,000 square meters. The centerpiece of Highland City, however, will be Highland Park, an 8,000-square-meter open park which will host that they would be Designed by renowned Filipino landscape architect and environmental Empire East Land some retail areas and a huge church that can accommodate 500 people. jointly developing a planner Paulo Alcazaren, the exclusively gated Arden Botanical Holdings, Inc. to 251-hectare property in Village will be highlighted by the Centrera Park, which is surrounded develop its 24th The park will elevate towards the mall and will serve as the visitors’ “grand by natural groves of mature trees, natural waterways and ponds, welcome” to the township. Circling both sides of the park will be a six-lane the province of Cavite, sprawling lush greenery, expansive open spaces, promenades and township project, road that begins from the main street entrance of the township. called the Arden parks, and jogging paths. The park will also have a clubhouse with Highland City, in a Botanical Estate. carefully curated amenities for the exclusive use of the residents and 24-hectare property Some 40% of the entire development will be dedicated to green and open their guests. spaces. Aside from the six-lane main road, the internal roads will be at least in Cainta, Rizal. four lanes wide. Heavily inspired by Scandinavian architecture, Arden Botanical Village will also have thematic bridges, landscaped walkways, bike lanes, and interactive water features. Houses and village amenities will incorporate minimalist designs and clean lines with panoramic windows that look out to the village’s verdant landscape. 26 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 27

RESIDENTIAL

SMART HOMES, SMART Making every Megaworld home, LIVING a smart home

With iTownships, Megaworld aims to elevate the standards of its townships by incorporating digital technology, design innovations, and seamless connectivity into the developments.

“We are in the process of integrating smart technology and other innovations into our townships. In this fast-changing digital world, we see the importance of aligning our developments to quickly adapt to the disruptions, which we perceive as opportunities,” says Megaworld Chief Strategy Officer Kevin Tan.

The iTownships project aims to make every home Nevertheless, the Company plans to exercise in Megaworld’s townships a smart home—with caution with which technological advancements to RESIDENTIAL DEVELOPMENTS smart locks and the seamless application of the implement considering how fast technology changes. Internet of Things, in which devices inside the “We have to take baby steps, because what’s When Megaworld rolled out its homes are interconnected and can be remotely state-of-the-art today may be obsolete tomorrow,” controlled. stresses Tan. “What’s important is that we have the iTownships program in 2018, attitude and the eagerness to adapt to the changing the Company had a singular The future-proofing of its developments is the technological and physical environment.” objective in mind—to future- direction that Megaworld is currently pursuing. proof its master-planned mega- This initiative gained additional impetus with A major part of the Company’s efforts at the onset of the COVID-19 pandemic as the technologically improving its homes is the retrofitting communities around the country. introduction of new health and safety protocols, and upgrading of existing matured developments not centered on the need for social distancing, only to incorporate new digital innovations but also highlighted the need to automate and go digital. to make use of more energy-efficient home systems. 696 722 2018 2019 28 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 29

RESIDENTIAL

South Beach Place Vion Tower

In April 2019, The 20-storey South Beach Place will have 582 units, ranging from Also during the year, The 57-storey Vion Tower will rise along EDSA corner Chino Roces studios to one-bedroom, two-bedroom, and three-bedroom units. All Avenue, just a stone’s throw from the proposed Magallanes Megaworld launched these will have balconies that provide breathtaking views of Manila Megaworld announced transport hub. the South Beach Place, Bay and the Metro Manila skyline. that it would be a new residential building what is to be Vion Tower will feature generous amenities exclusive to its residents, South Beach Place was inspired by the South Beach neighborhood of including a 25-meter lap pool and wading pool, function hall, fitness project in its Miami, Florida. The structure itself has a unique seashell-like shape the tallest residential center, outdoor fitness area, children’s playground, day care center, 31-hectare Westside as seen from above. And in keeping with Megaworld’s digitalization development in the relaxation lounge, and a library. City township, initiatives, every unit at South Beach Place is packed with smart home EDSA- area— system features. One of Megaworld’s newest future-ready developments, the Vion inside the bustling the Vion Tower. Tower will feature technological innovations such as the Smart Parcel Entertainment City in The entire development also features first-class amenities that Delivery System, which allows the automated receiving, claiming, and Parañaque City. include an adult and children’s pool, massage pool, sun deck lounge, storing of parcels. pool lounge and seating deck, a playground, fitness center and function rooms, and five sky gardens. The ground floor will have The development is less than 10 minutes away from NAIA via the commercial establishments including restaurants, coffee shops, Skyway, less than 15 minutes away from the bustling Entertainment boutiques, and more. City and Manila Bay area, and only 20 minutes away from Quezon City via the MRT. The MRT Magallanes station is just a two-minute walk from the tower.

The Vion Tower will also offer retail shops in two levels and a multi- level podium parking for both residents and guests. It is scheduled for completion in 2024. 30 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 31

OFFICES

C R E A T I N G SUSTAINABLE

WORK Building next- generation work SPACES places After 30 years of providing world-class office spaces, Megaworld isn’t showing any signs of slowing down. In 2019, the Company announced the launch of more world-class, sustainable office developments across the country.

When it comes to sustainability, Megaworld aims to achieve nothing less than global standards.

To date, the Company has developed 9 LEED- certified office buildings across the country, a testament to its commitment to construct environment-friendly, resource-efficient, and health-promoting buildings. These buildings’ meticulous designs allow them to save energy, utilize water efficiently, reduce carbon emissions, PREMIER OFFICES and improve indoor environmental quality, thereby (1.3M sqm. Office GLA) creating value for people and planet alike. Having launched more than a million square meters of leasable Megaworld takes pride in the fact that its Uptown Place Tower 1, one of Megaworld’s office space in the Philippines buildings, in addition to sustainability, also promote progress, especially in the countryside. With more LEED-certified buildings since its inception in 1989, office towers rising in key areas outside of Metro Megaworld has grown to be the Manila, the Company helps generate more job largest office developer and opportunities for locals. Provinces brimming with landlord in the country. potential are now becoming major economic hubs. 63 70 2018 2019 32 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 33

OFFICES

LEED Gold-certified: 8 Campus Place

In 2014, Megaworld’s 8 Campus Place Building A in McKinley Hill in Taguig City was given the LEED Gold v3 2009 certification, the most current version of LEED.

The building received full marks for Sustainable Sites, Water Efficiency, and Regional Priority Credits, as well as perfect scores in sub- categories like recycled content and regional materials under Materials and Resources; and optimized energy of equipment and appliances under Energy and Atmosphere. Sustainable Development: filled insulated (Low-E) glass to reflect the sun’s LEED-certified Office Spaces A year later, both Building B and Building C heat away from the building and reduce the air followed suit and received similar Gold LEED conditioning needed inside. Amid the looming threat of irreversible climate certifications. change all over the globe, collective initiatives The construction materials used in the buildings that pursue sustainability and environmental Also known as the Wells Fargo Center Philippines, contain more than 30% recycled content. In fact, friendliness have become a necessity to lessen being the local office of the American bank for the project earned a bonus point in the certification the world’s carbon footprint. its global business services, 8 Campus Place by ensuring that 30% of its materials are locally comprises three 5-storey buildings with a total available and produced in the Philippines. In the Philippines, property developers have leasable floor area of 30,000 square meters. also been doing their part to mitigate climate The three buildings also implemented many change by implementing green-building The noteworthy sustainable features in the innovative indoor air quality features, including the practices based on global standards. One of building include a reduced number of parking provision of CO2 sensors to ensure fresh air delivery the measures that property brands use to spaces to encourage the tenants to use public to the building occupants and the use of “Low determine the extent of their sustainability transportation instead of private vehicles, Volatile Organic Compound” (Low VOC) paints and efforts is the Leadership in Energy and accommodations for bicycle storage, and shower materials in the interior spaces. Environmental Design (LEED), a world- facilities for individuals that prefer to take a renowned green building certification method more sustainable commute to their work. The Lastly, to assure that the energy systems installed in developed by the nonprofit organization U.S. building uses 45% less water than standard the building function properly after they are installed, Top left: 17-storey Factset Tower along McKinley Green Building Council. buildings by providing water-efficient plumbing an independent third party commissioning agent West’s Le Grand Avenue fixtures. coordinated with Megaworld to ensure that the sophisticated green buildings would function properly Moreover, the exterior landscape was designed and efficiently for many years. to use no potable water for irrigating plants and vegetation. The use of wide-glass architecture With their confidence in the quality of the Company’s was carefully planned to filter natural light into office spaces, years later, Wells Fargo rented another the building by installing double glazed gas- 50,000 square meters from Megaworld. 34 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 35

OFFICES

Bacolod: No. 1 Upper East Avenue

In Pursuit of Countryside Development With this objective, Megaworld hopes to Megaworld will be The office towers will offer around 8,600 square meters of office and Reverse Migration contribute to the development of the business spaces, specifically designed for information technology and business landscape in key provincial cities by ensuring that developing the No. 1 process outsourcing (IT‐BPO) companies. They will be strategically there are enough prime office spaces in these Upper East Avenue, located along the township’s main avenue, the six‐lane Upper East One of Megaworld’s initiatives in recent years is communities that meet the stringent standards of Avenue, which connects Lopez Jaena Street and the Circumferential the development of more premium office buildings inside its 34-hectare international locators. Road, the city’s main avenues. outside Metro Manila. Starting in Cebu, Central The Upper East Visayas in 2012, Megaworld has since expanded its The second objective is to increase employment township in Bacolod Featuring Spanish and European architectural design elements, No. 1 office development activities to reach Iloilo, Davao, opportunities in areas outside the National Upper East Avenue tower will have roof gardens, LED lights in common Laguna, Pampanga, Western Visayas, and Cavite. City, the Company’s Capital Region, thereby encouraging reverse areas, dual-flush technology for toilets, and double‐glazed windows migration. very first office for heat insulation and energy efficiency. Once completed, the office This effort to develop more office spaces and development development will be registered under the Leadership in Energy and townships in the countryside is being done to By effectively stemming the increasing density of Environmental Design (LEED) program. achieve two important objectives. The first is to Metro Manila, which currently stands at over 15,600 in this city. encourage local and global businesses to locate individuals per square kilometer, a lot of other in provincial office spaces thereby enhancing issues will be addressed—heavy traffic, the dearth in economic activity in the countryside. socialized housing, and even food security. 36 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 37

MALLS

MAKING HAPPINESS A Always a positive LIFE experience with Megaworld STYLE Lifestyle Malls Brick-and-mortar shopping malls still hold a unique draw for Filipinos. They are places where people can buy the things they need and want, reconnect with friends, meet with clients or business partners, unwind with co-workers, be pampered with a stylish haircut or a soothing massage, or even work remotely over a few cups of coffee.

Knowing the variety of activities that take place consistently inside malls, the Company kicked off 2019 with the announcement that it would be expanding its lifestyle mall footprint with the opening of new commercial properties across its townships during the year. These would cover around 20,000 square meters in gross leasable area.

MEGAWORLD LIFESTYLE MALLS True enough, by the end of the year, Megaworld AND COMMERCIAL CENTERS opened new retail spaces in Iloilo Business Park in In spite of the accelerated (453k sqm. Retail GLA) Mandurriao, Iloilo City; Alabang West along Daang growth of online retail in recent Hari in Las Piñas City; McKinley Hill and Uptown Bonifacio, both in Taguig City; ArcoVia City in Pasig years, visiting commercial Top photo: Eastwood Mall in Metro Manila City; Boracay Newcoast in Boracay Island, Aklan; and establishments continues to be Davao Park District in Lanang, Davao City. an integral part of the Filipino way of life. “Our developments are heavy on creating experiences,” shared Megaworld Lifestyle Malls Head Graham M. Coates. “Our developments provide the kind of platform that creates those special experiences and 19 24 moments. We create places for people to gather and reconnect with friends, family, and loved ones.” 2018 2019 38 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 39

MALLS

Alabang West Parade: High-end Shopping in Las Piñas

Malls for the new generation

Catering to a New Generation of Mall-goers

During the year, Megaworld launched a new logo for its malls , symbolizing the Company’s new initiative: to future-proof the Megaworld LIfestyle Malls brand and capture a new generation of mall-goers. High-end shopping This sets Alabang West apart as a symbol of first-class living in Las boutiques and world- Piñas City. The new logo brings together the simplicity class amenities that and straightforwardness of Megaworld’s own Megaworld through its subsidiary, Global-Estate Resorts, Inc. , developed corporate logo and the playfulness of various mirror the glitz and Alabang West with a distinctive Beverly Hills-themed lifestyle concept. design elements that visualize Megaworld The 62-hectare prime property is located beside the booming business glamour of Beverly and commercial district of Alabang. Lifestyle Malls as a happy and fun brand in line Hills, all nestled in one with the Company’s vision of making happiness a In the middle of this prime community is Alabang West Parade, a shopping lifestyle. posh neighborhood. strip that lives up to the word-class standards that the whole Alabang West township has become known for. The strip opened in 2019 and Providing a Safe and Healthy Mall hosted right off the bat a diverse line of restaurants, specialty boutiques, Experience a huge membership superstore, and other essential retail outlets.

Acknowledging the new reality brought about by the COVID-19 pandemic, Megaworld aims to #SaferandHappier experience: Sanitation Squad provide a safer and more secure shopping and conducts round-the clock disinfection; social dining environment within each of its lifestyle distancing is strictly implemented malls through the introduction of enhanced safety protocols and sanitation efforts. With this, the Company aims to reinforce the positive experience of visiting a Megaworld Lifestyle Mall while contributing to the well-being of the community at large. 40 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 41

MALLS

The Greenhouse at Maple Grove Mactan Newtown Beach Walk: Retail Paradise in Cebu

Megaworld announced In line with this, Megaworld started the land development and The Mactan Newtown This lifestyle mall will have a total gross floor area of 30,000 square construction of its first Megaworld Lifestyle Mall in Cavite during the year. meters at the center of which is a 1.4‐hectare man‐made lagoon that in 2019 that it would Beach Walk in Lapu- will have floating boardwalks and a bridge that will connect the two be increasing its Called “The Greenhouse,” the two-level “sustainable” mall will have Lapu City in Cebu sides of the mall. capital spending for around 24,000 square meters of gross floor area and will feature stands on a shoreline several retail and F&B outlets, four cinemas, an indoor events area, With a maximum depth of around 1.5 meters, the lagoon can also the huge 140-hectare and a supermarket. cliff punctuated by serve as a venue for water sports activities such as jet skiing, Maple Grove township a man-made lagoon, wakeboarding, stand‐up paddling, and boating. It will also have its in General Trias, Cavite Designed much like a typical greenhouse, the mall will be equipped boutique hotel, own man‐made shoreline at its perimeter. with exceptional light-transmitting architectural systems that to P15 billion. maximize the use of natural sunlight while maintaining comfortable garden chapel, beach The Mactan Newtown Beach Walk will have its own chapel cooling conditions inside the building. walk, and rows of surrounded by a garden by the cliffside, overlooking the sea. The mall retail shops and will have four state‐of‐the‐art cinemas, a food hall, al fresco areas, a travelers’ lounge, and a view deck, allowing visitors and mall-goers to restaurants and four have a panoramic view of the sea and nearby islands. movie houses. Most importantly, true to Megaworld’s commitment to sustainability, the mall will use solar roof panels and will utilize an open layout scheme for passive cooling and natural lighting in most of the development’s common areas. Around 40% of the entire development will be dedicated to open, green spaces. 42 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 43

HOTELS

UPLIFTING PHILIPPINE Filipino TOURISM hospitality, Megaworld's signature

With the increase in the influx of tourists every year, the need for more and better accommodations for the country’s international visitors has become even more pronounced. This is where Megaworld comes in.

Cognizant of its crucial role in supporting the country’s tourism sector, Megaworld has been developing world-class hotels that befit the status of the Philippines as a prime haven for international travelers.

In line with this, Megaworld has been closely working with the Department of Tourism (DoT) to ensure that the Company is able to customize its developments and services to the needs and peculiarities of the local tourism market through HOTEL ROOM KEYS Megaworld Hotels.

The Philippines has always been In the pipeline in the next five years are seven (7) regarded as a prime tourist more hotels set to rise in Parañaque City, Laguna, destination in Asia. This can be Iloilo, Cebu, Boracay, and Bacolod. More than just developing hotels, however, Megaworld enlivens its From top to bottom: A closer look at the interiors seen in the number of tourist hotels with the warmth and hospitality inherent of Savoy Hotel Mactan, Hotel Lucky Chinatown, arrivals recorded every year. In to Filipino culture. This Filipino brand of hospitality and Belmont Hotel Boracay 2019, international visitors totaled has become Megaworld Hotels’ signature brand of service, setting them apart from other hotel 8.26 million, exceeding the initial developers and operators in the country. target set in the National Tourism Development Plan (NTDP) for 2016 2,554 3,637 In 2019 alone, the Company added three more hotels to 2022. to its portfolio—the Belmont Hotel in Boracay, the 2018 2019 Savoy Hotel Mactan in Cebu, and the Hotel Lucky Chinatown in Binondo. 44 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 45

HOTELS

The Belmont Hotel Boracay Savoy Hotel Mactan

Megaworld, through The P2.1 billion Belmont Hotel Boracay, located within the sloping Before 2019 came to The 18-storey Savoy Hotel Mactan, which offers 547 guest rooms and area of the estate beside Savoy Hotel Boracay, overlooks the suites, caters mainly to business travelers and family vacationers subsidiary Global- eastern beach of Boracay Island. The three-tower hotel features a close, Megaworld due to its close proximity to the beach and resorts around Mactan. Estate Resorts, Inc., 442 rooms with choices of Superior, Deluxe Twin or Queen, Premiere opened its first hotel The hotel is also just 15 minutes away from the Mactan-Cebu opened its second Deluxe, and Executive Suites. The room sizes range from 27-square development inside International Airport. meters to 52-square meters. hotel development the 30-hectare The Developed at a cost of P1.7 billion, the Savoy Hotel Mactan offers inside the 150-hectare Belmont Hotel Boracay offers first-class amenities and services, Mactan Newtown in superior and deluxe rooms, deluxe premier and junior suites, all of Boracay Newcoast including a swimming pool and in-pool lounge, an aqua spa, Lapu-Lapu City, Cebu. which are fully equipped with essential features. The hotel’s amenities courtyard, landscaped gardens, fitness center with shower include a swimming pool, paved sunbathing lounge, fitness center, township in 2019. and changing rooms, business center, function halls, meeting business center, and a flower garden. The hotel also has a wide range rooms, a full-time concierge, 24-hour inroom dining service, and of function and meeting rooms. complimentary shuttle services. A testament to the hotel’s world-class standards, the interiors are The hotel also offers all-day dining at Belmont Café, featuring designed by the world-renowned Hirsch Bedner Associates, the same cuisine that combines Asian and Mediterranean influences. And in firm that designed the Marina Bay Sands, the Fullerton Hotel in support of the farmers in Aklan and other nearby provinces, the Singapore, and the Shangri-La Dubai and St. Regis Abu Dhabi in the restaurant uses local fresh farm produce in their dishes. UAE. Savoy Hotel Mactan also hosts first-class bars and restaurants, such as the Savoy Café for breakfast and all-day dining, the Lobby Two more establishments will also open in the hotel: the Zabana Café for coffee and pastries, the Zabana Bar at the lobby area that Pool Bar at the second level deck, and the Trellis Garden within the offers cocktails and drinks, the Pool Bar at the third level, and the landscaped deck that connects the two towers of the hotel. Patio, an outdoor dining area located at the second level.

Belmont Hotel is Megaworld’s second homegrown hotel brand. The Savoy Hotel Mactan is the third hotel under the Savoy Hotel brand. first Belmont Hotel opened in Newport City in 2015 while another The other Savoy Hotels are located in Boracay Newcoast and Belmont Hotel is set to open in Iloilo Business Park by 2023. Newport City in City. 46 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 47

HOTELS

Hotel Lucky Chinatown

When Megaworld opened The P750-million Hotel Lucky Chinatown is directly connected to Lucky Chinatown Mall via a Hotel Lucky Chinatown in footbridge and offers 93 rooms and suites ranging 2019, the Company’s main from Standard Queen, Standard Twin, Junior Suite, objective was to create a and Executive Suite.

unique blend of modern design It is strategically located near Manila’s historic and elements while also preserving cultural sites, such as the legendary walled city of Binondo’s historic heritage. As Intramuros, the iconic Manila City Hall, and the such, the hotel features a fine historic National Museum. Clockwise, from top: Premium Room in Belmont Hotel Boracay, Zabana Bar in Hotel Lucky Chinatown, and mix of contemporary design The hotel also has its own all-day dining restaurant, The Poolside Bar in Savoy Hotel Mactan and a cultural experience that the Café de Chinatown, as well as its own Zabana is distinctly Chinatown. Bar, spa, sauna, jacuzzi, and fitness center. It also Even as it faces new challenges brought about homegrown Filipino hotel brands, offering features a spacious, high-ceiling Grand Ballroom by the global COVID-19 pandemic, Megaworld more than 3,500 hotel keys from its six (6) that can accommodate up to 350 guests in a remains keen on taking the Filipino brand of hotel brands. These consist of 10 operational banquet setting, and can be divided into three service to a higher level by incorporating stringent properties across the country, as well as another smaller ballrooms. safety measures and protocol to the day-to- one to open that will open early next year. These day operations of its Megaworld Hotels brands. are Eastwood Richmonde Hotel, Richmonde It also has a boardroom and three meeting rooms This effort is aimed at ensuring that guests will Hotel Ortigas, and Richmonde Hotel Iloilo; for smaller groups. At the hotel’s Atrium is an continue to enjoy rewarding moments while staying Savoy Hotel Manila, Savoy Hotel Boracay, and indoor Zen garden with its own sunroof. in any Megaworld Hotel located in key business and Savoy Hotel Boracay; Belmont Hotel Manila and tourism destinations all over the country. Belmont Hotel Boracay; Hotel Lucky Chinatown in Binondo; Twin Lakes in Laurel, Batangas near To date, Megaworld Hotels has successfully Tagaytay; and the soon-to-open Kingsford Hotel become the country’s largest operator of 100% at Westside City in Parañaque. 48 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 49

LEISURE

SPICING UP COMMUNITIES WITH Chinatown Museum: Built to ART Honor a Heritage

Megaworld opened 'Chinatown Museum' in Binondo, offering a glimpse of the glorious past of the “World’s Oldest Chinatown.”

The Chinatown Museum features 18 galleries, each focusing on various influences and historical events that have shaped the cultural, social and economic threads of Binondo – from its establishment as a settlement for Christianized Chinese to the height of downtown Escolta on its way to becoming a bustling commercial downtown of colonial Manila.

With Lucky Chinatown at the center of a In 2019, Megaworld reaffirmed its commitment community characterized by its rich history, to elevate the appeal of the communities where Megaworld sought to extend the Filipinos’ passion its townships are located by integrating arts, for the arts and culture to the mall experience, culture, history, and heritage in the overall and eventually help boost tourism in this celebrated part of Manila. character of its developments. Chinatown Museum in Binondo, Manila 50 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 51

LEISURE

Arco de Emperador: The First Cebu Hard Work, Mangoes Festival: Greatness, Promoting Filipino and Success Products Through Cultural Initiatives

Megaworld unveiled during the year the Arco de Emperador, a masterpiece of world-renowned Spanish sculptor In 2019, Megaworld hosted the Ginés Serrán-Pagán which highlights first Cebu Mangoes Festival, which the Filipinos’ potential for greatness was held at The Mactan Newtown and success. in Lapu-Lapu City, Cebu.

The unveiling of Arco de Emperador, the iconic monument in Pasig City

The 19-meter-tall monument, unveiled inside It will be surrounded by a landscaped plaza During the two-day festival, locals and foreign ArcoVia City, Megaworld’s 12.3-hectare township with benches. At night, the monument can visitors–including guests from the Department of in Pasig City, is reminiscent of Madrid’s Arco de la be illuminated by colorful lights, making it a Tourism (DoT)–gathered to harvest mangoes and Victoria and Paris’ Arc de Triomphe. vibrant landmark of ArcoVia City, particularly make the world’s biggest mango tapioca (“sago”). when viewed from C-5 Road. The tapioca was made from 300 kilos of mangoes The towering monument features nine massive that were harvested from the township's own sculptures standing proudly side by side atop “We created this monument as a tourism mango trees. the arch. The distinct elements of the structure landmark for Metro Manila that brings out Rich culture celebrated at the Cebu Mangoes include a victorious emperor, three horses pulling the message of how hard work, passion and Aside from the harvesting of mangoes, there were Festival in Megaworld’s The Mactan Newtown his chariot, two lions named Pride and Passion, perseverance can create a self-made successful other activities during the festival, such as the and two trumpeting angels coated in 24K gold. man. This is how an Emperor is made,” says Mango Bazaar that featured all kinds of mango- Megaworld Chief Strategy Officer Kevin L. Tan. related products from Cebu’s mangopreneurs, The monument was first designed by Serrán- all-day street dancing, mango harvesting, and Pagán in 2013, but the actual work on the bronze According to sculptor Serrán-Pagán himself, the MANGAmazing Concert featuring live sculpture began in 2015 and ended a year after. the Arco de Emperador brings to life what performances by Cebu’s homegrown talents. The last pieces—the two golden angels—were ArcoVia City is all about: the affirmation only completed late in 2018 and were installed in that everyone—no matter who they are, More than 240 mango trees were planted on the February of 2019. what their background is, or where they came streets of the 30-hectare property back in 2011. from—can work their way towards success. Today, mangoes are being harvested from these The arch is also highlighted by cascading waterfalls More importantly, it embodies how today’s trees during the months of May and June. Last leading to the water feature at the basement area generation celebrates personal triumphs year, the mangoes harvested reached more than where the future museum will be built. and victories. 10,000 kilos. 52 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 53

Megaworld Corporation (the Company) has embraced sustainability long before it became a mandate to operate a successful and responsible business. The Company together with its subsidiaries (the Megaworld Group, or Group) actively pursues sustainability across all businesses, as enshrined in its sustainability commitment and its three-fold dimension.

Community Environment Economy SUSTAINABILITY: EMPOWERING THE

“We commit to create inclusive “We support the protection and “We pursue local development COMPANY’S FUTURE growth for our stakeholders conservation of natural habitats through innovation and and the communities around and ecosystems by gearing our technology, efficient and us by providing equal access development activities towards progressive infrastructure, job to relevant resources and optimum land use, a reduced generation, and worthwhile opportunities in order to carbon footprint, efficient waste partnerships and collaborations promote shared prosperity and management, and responsible with local governments and social harmony.” consumption of resources - people’s organizations.” all while building sustainable “We are a company actively communities.” and responsibly pursuing

As Megaworld marches on to a new decade armed Megaworld’s programs cover a range of areas sustainability excellence across with its battle cry anchored on sustainability, the that support the United Nations Sustainable Company seeks innovative ways of continuing to Development Goals (UN SDGs). The following all segments of our business, grow its business while making a bigger and a more areas showcase these programs to date. meaningful impact in society. The Company has through initiatives aligned thus committed itself to sustainability not only through its operations but also through programs with our vision.” and initiatives that empower its future and the future of its communities. 54 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 55

RESPONDING Building and Development of smart rehabilitation of Workforce diversity and safe townships classrooms in public across the country TO THE UN schools Building of safe and decent homes for families in Supplemental Women’s health programs depressed communities, feeding programs especially those displaced by in needy natural calamities communities

Building of deep well pumps Programs to reduce waste in mountain communities generation across its Supplemental feeding properties programs in needy communities

Provision of hygiene kits Programs geared towards climate action – tree-planting, Long-term feeding clean-up of creeks and other activities waterways, protection of Training in WASH (water, reservoirs and watersheds sanitation and hygiene)

Priority given to workplace safety Partnerships that promote agro-forestry and reef protection Provision of Medical and dental missions solar-powered lamps in for the elderly, children and off-the-grid communities other at-risk and vulnerable individuals in needy and off- Creek and coastal clean-ups the-grid communities

Donations in the form of medicines, vitamins, and medical equipment Employment opportunities to scholars who have Eco-conservation graduated from school through tree-planting

Blood donation programs

Assistance and support for families displaced by Feeding programs conflict situations Megaworld Corporation and its subsidiaries (the Development of smart and safe townships Group) continuously seek to respond to the UN across the country Sustainable Development Goals, in pursuit of Support for restorative the Company’s vision of uplifting lives, creating justice programs of Scholarship grants to needy Caritas Manila positive social impact, and helping shape the deserving students nation. Medical missions for the elderly and Educational outreach differently abled The matrix below shows some of the activities programs for students in undertaken by the Megaworld Group to help impoverished communities Partnerships in 15 regions achieve the UN SDGs. Most of these activities are across the country Educational opportunities undertaken by Megaworld Group employees and Building and rehabilitation for needy students in collaboration with Megaworld Foundation. of classrooms in public Support for close to 300 schools similar-minded organizations and institutions In 2019, donations gathered to support these Provision and construction activities (excluding the building of townships) Material support for school of decent housing for children (books, clothing, needy sectors amounted to P63,525,000. Volunteer time put meals) into these activities reached 9,616 hours. 56 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 57

SUSTAINABILITY

Jose Abad Santos High School PASAY Pasay City Science High School East Pasay City High School North

University of Makati MAKATI Makati Science High School Classrooms. Megaworld Foundation has helped Pamantasan ng Lungsod ng Maynila students and schools acquire the necessary Claro M. Recto High School educational materials, equipment, and facilities. Arellano High School It has also constructed libraries and donated Polytechnic University of the Philippines books, both textbooks and storybooks, to promote MANILA learning and creativity among schoolchildren. Techological University of the Philippines Alternative Education. In 2019, the Foundation Manila Science High School The Foundation has made the construction of classrooms, especially in disaster-hit areas, a top launched the Eskwela ng Bayan, classroom-on- Raja Soliman Science and Technology wheels project providing children in impoverished High School priority to help schools cope with the additional classroom requirement resulting from the recent communities with basic education, including the Quezon City University implementation of the K-12 curriculum. alphabet, spelling, mathematics, English, telling time, counting money, and values formation. University of the Philippines Integrated In 2019, the Foundation’s partnership with the Under this project, for four consecutive Saturdays, QUEZON School EDUCATION Holy Spirit Academy of Irosin (Sorsogon) and Megaworld volunteers taught 90 children from CITY Ramon Magsaysay High School Cubao the Federation of Filipino-Chinese Chamber of Barangay Tipas in Taguig City. To date, scholarships Don Alejandro Roces Sr. Science - Commerce built and reconstructed classrooms have been granted to three students who took part Megaworld, through its socio-civic arm Megaworld Technology High School destroyed by natural calamities. in Eskwela ng Bayan. Foundation (the Foundation), gives priority to providing deserving Filipino youth with access to PASIG Rizal Technological University quality education through scholarships and financial Marinducare Foundation, Inc. assistance to organizations with similar objectives. Marikina Science High School Supported 15 classes in Marinduque public schools In 2019, the Foundation conducted scholarship fairs for one year and caravans in at least 20 public schools in 6 cities in Metro Manila. Enrique Jose Elementary School (Benguet)

Partnerships with two educational institutions— Donated 50 school chairs for pre-school students Adamson University and Sisters of Mary School— have also delivered not only educational benefits but American Chamber Foundation Philippines also socio-economic support to deserving students and their families. Donated school bags and educational materials for 11 technical-vocational scholars of the chamber Over the last 10 years, the Megaworld-Adamson Additional Support. Megaworld Foundation Scholarships. To date, Megaworld has granted partnership has provided scholarships and and Megaworld employee-volunteers have also Raja Soliman Science and Technology High School 10,000 scholarships to students across 48 schools eliminated entrance exam fees for applicants, giving supported deserving students under the care of all over the country. These scholars strive not only more students better access to higher education as a number of organizations—ERDA (Educational to maintain good grades but also to develop into well as employment after graduation. Constructed an “e-classroom” and provided the Research and Development Assistance) same with computers, tablets, TV monitors and well-rounded individuals steeped in kindness and Foundation, Sinagtala Home for Boys, Philippine projectors compassion through various activities and outreach On the other hand, the partnership with the Sisters Institute for the Deaf, World Vision, Childhope Asia, programs conducted by the Foundation. At the of Mary School has given students quality secondary and Virlanie Foundation—with medical services, Yellow Boat of Hope Foundation, Inc* beginning of every scholarship cycle, scholars are education following a technical-vocational feeding programs, free haircuts, learning and social immersed in activities designed to inculcate in curriculum. It has also provided students with interaction, film showings, and shoes and clothing. Donated motorized school boats to Pamarawan them the principle of “paying it forward.” shelter, food, and medical care. To date, 46 scholars Elementary School in Malolos, Bulacan and Luuk under this program have continued on to higher In 2019, 45 Megaworld volunteers also participated Tongkil Elementary School in Sulu Today, out of the 700 scholars who have graduated education, and 14 have graduated college and are in Brigada Eskwela, the Department of Education’s from college, about 92% are employed in the now able to help their families with decent jobs. yearly classroom clean-up and rehabilitation * The Yellow Boat Foundation makes quality education accessible to Group’s Companies. communities by transporting students from far-flung areas to school activity in preparation for the coming school year. 58 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 59

SUSTAINABILITY

SOCIAL AND MEDICAL SERVICES Wing of the Col. Ernesto Rabina Air Base in PROTECTION OF FOREST COVER Capas, Tarlac, providing 893 persons of the Aeta community with medical consultations as well as Megaworld Foundation has undertaken dental check-ups and tooth extractions. Medical Through a partnership with ABS-CBN Lingkod partnerships to provide for the nutritional and and dental supplies and hygiene kits were also Kapamilya’s Bantay Kalikasan, over 100 Megaworld health needs of impoverished communities across distributed to the community. volunteers planted 800 seedlings at the La Mesa the country. Nature Reserve in Quezon City. The Foundation The Foundation also supported various foundations also supported Earth Day Network Philippines, Nutrition. The Foundation supported a six-month to carry out their respective missions—Matang Inc.’s Trees4Life Program. feeding program of the Bukas Palad Foundation Linaw Foundation, surgical missions for indigent of the Philippines to improve the weight and GERI continued with its tree-planting and creek patients; Tahanang Walang Hagdanan, physical well-being of some 60 malnourished children in clean-up activities, as part of its efforts to enhance therapy clinics; Philippine Foundation for Pasay City. It also supported ABS-CBN Lingkod the environment in their existing developments and Breastcare, breast cancer awareness; Kaisang Kapamilya Foundation’s Bantay Kalusugan in the rest of its landbank, and to promote the well- Buhay Foundation, support for at-risk single Program to provide nutritious meals to 30 children being of the people in their host-communities. mothers; and Foundation for Professional Training, for 120 days. vocational training for underprivileged women. Medical Services. The Foundation worked with the UNICEF’s WASH (water, sanitation, and hygiene) Department of Social Welfare and Development programs in rural communities across the country to provide the elderly and children at the Golden are also supported by Megaworld Foundation. Reception and Action for the Elderly and Other Special Cases with free medical check-ups, Shelter. An alliance with Gawad Kalinga has given medicine, and vitamins as well as counselling and Megaworld the opportunity to provide housing for 56 spiritual support. A similar effort was undertaken urban poor families in City. Megaworld with the Civil Military Operations Group of the volunteers came together to help paint homes and Armed Forces of the Philippines. turn them over to the community. They continue It has also worked with Operation Smile to provide to monitor and rehabilitate the village to serve as children across the country with free reconstructive enduring and sustainable housing for its residents. surgeries to repair cleft lip, cleft palate, and other The Foundation donated 100 solar-powered lamps facial deformities. to poor families in Carnaza Island, Cebu through Megaworld Foundation led a mission of medical One Million Lights Philippines, and 60 solar- practitioners at the 710th Special Operations powered lamps to Aeta families in Capas, Tarlac. 60 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 61

ENVIRONMENTAL PERFORMANCE

286,006 tCO2e 15,000 m3

total volume of carbon footprint of water reused

In its exercise of stewardship of the resources it uses for its business, Megaworld measured its operational greenhouse emissions, water consumption, and waste generation to further mitigate its impact on the environment.

OPERATIONAL GAS EMISSIONS WATER USE

In 2019, Megaworld accounted for a total volume of In 2019, Megaworld used 3,884,189 cubic meters of 286,006 tCO2e, divided between Scope 1 emissions water supplied by utilities and 51,050 cubic meters at 127,595 tCO2e; Scope 2 (location-based), 156,428 of directly abstracted water. It treated 6,096 and tCO2e; and Scope 3, 1,983 tCO2e. reused 15,000 cubic meters of water. A total of 0.38% of water consumed was reused. Scope 1, or direct, greenhouse gas (GHG) emissions DEVELOPING A refer to emissions company-owned vehicles and Sustainable features of new mall company facilities. Scope 2 emissions are from developments electricity purchased and used by the Company. SUSTAINABILITY Scope 3 emissions come from activities of the Sun and solar panel roofing and light wells Company occurring in sources it does not own or that maximize natural lighting, enhanced control. passive cooling design, slow-start escalators, rainwater harvesting and drain water recycling ROADMAP The Company’s Scope 1 emissions in 2019 came systems are now integral in upcoming mall from both stationary (126,346 tonnes) and mobile developments including Upper East in Bacolod emissions (1,249), Scope 2 came from electricity and Maple 2 in General Trias, Cavite. consumed in-location (156,428); and Scope 3 came from waste generated during operations (1,637) and from business travel (346). WASTE GENERATION

In 2019, as part of a groupwide initiative of Alliance Global Renewable energy now an important feature Absolute non-hazardous waste generated Inc. and its subsidiaries, Megaworld Corporation and its own of townships amounted to 14,044 tonnes, while hazardous waste generated was at 42 tonnes. Major types of waste Megaworld will install more solar farms in subsidiaries identified the sustainability topics most material that contributed to the total mass were solid the next few years to achieve a more diverse to them. The exercise led to the establishment of baseline waste, metal, plastic, and paper. energy source mix. A solar farm will be piloted data on the impact of the Megaworld Group’s businesses in as a festive walk mall in Iloilo Business Park. Plastic neutrality terms of topics identified following the ESG—environmental, GERI’s Boracay New Coast has been utilizing Megaworld recently received a certification social, and governance—framework. This will help guide the solar power and LED lamp posts as a way to from HOPE Foundation highlighting the save power and use renewable energy. Company in further aligning its operations with sustainability milestones set by the Company’s lifestyle mall best practices. Suntrust’s Eco-town in Tanza, Cavite has developments in achieving plastic neutrality. deployed a fleet of e-jeepneys The certification recognizes the malls’ efforts to offset their almost 20 metric tonnes of plastic footprint by using market-based technologies approved in the United Nations Basel Convention. 62 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 63

ENVIRONMENTAL SOCIAL ENGAGEMENT PERFORMANCE

Intensity of Megaworld’s operational GHG emissions, water consumption, and waste generation* 53% 47%

Per sq. meter Per employee Per million PHP 2,500,000 6,569 42,903

direct and indirect jobs generated employees hours of employee training Scope 1 0.03 19.42 1.90 The Megaworld Group seeks to address employee concerns adequately GHG Intensity Scope 2 0.03 23.81 2.32 and maintain healthy and satisfactory relations with them at all (in tCO2e) times. The topics considered under social engagement include job Scope 3 0.0004 0.30 0.30 generation, workforce diversity, workplace safety, employee training and development, compensation and rewards, and employee relations. Water Use Intensity (in cu. meters) 0.82 599.06 58.46 JOB GENERATION AND LOCAL Waste Generated Women empowerment (in tonnes) 0.003 2.14 0.21 DEVELOPMENT Megaworld received the Women-At-Work *According to total floor area of premises and developments (4,783,165 sq. meters), Leadership Award at the 10th Asia’s Best As the Company creates flourishing communities number of employees (6,569), and revenue generated (PHP 67,312 million) in 2019. Employer Brand Award held in Singapore in across the country, it looks ahead and endeavors August 2019. to help fulfill the potential of more areas in the ENVIRONMENTAL STANDARDS country. In the last 30 years, Megaworld has helped create more than 2.5 million direct and At GERI alone, the entire executive team is made indirect jobs through its townships in 50 cities and up of women. At Empire East, more than half of Megaworld commits to make renewable energy an Empire East’s head office at the Alliance Global municipalities across the country. the workforce is female. important feature of its townships and structures. tower in Taguig is also LEED-certified (LEED BD+C: Core and Shellv3-LEED 2009). Through these jobs, the Company has promoted Even as it pursues environmental certifications for reverse migration, allowing more Filipinos to build EMPLOYEE TRAINING AND

its own developments, it works with companies and GERI’s Fairways and Bluewater Resort Golf their careers in their hometowns and making the DEVELOPMENT general contractors for 78 projects that are ISO and Country Club in Boracay is registered to be benefits of economic progress accessible to more 140001-compliant. compliant with ISO 140001:2015, ISO 9001:2015, people. The presence of local jobs has also helped Megaworld recognizes that training and education and ISO 450001:2018. The certificates, signed in keep Filipino families intact. are integral to the development of employee To date, the following Megaworld developments in December 2018, are valid until December 2021. skills and career development. In 2019, the Taguig City have garnered Gold and Silver LEED The Company’s townships, residential Company dedicated 42,903 hours on training certifications: developments, BPO offices, malls and hotels employees, which entailed a total expenditure of serve as homes to thousands of Filipino workers, about PHP14.63 million. One-hundred percent of GOLD SILVER celebrate Filipino hospitality, and give opportunities employees received regular performance and career for people to grow their careers and continue development reviews in 2019. 8 Campus A Uptown Tower 1 providing for their respective families. (Last certified on Sept. 23, 2014) (Last certified on Mar. 20, 2017) COMPENSATION AND REWARDS 8 Campus B Uptown Tower 2 WORKFORCE DIVERSITY (Last certified on Dec. 9, 2014) (Last Certified on Sept. 14, 2015) The Group schedules performance reviews 8 Campus C One Le Grand Groupwide, Megaworld’s workforce enjoys bi-annually to support career development, an equitable split between female and male (Last certified on Sept. 14, 2015) (Ongoing construction; target Silver) promotion and merit enhancement. It also provides employees. In 2019, the Group had a total of 6,569 government-mandated and voluntary benefits to 10 West employees, 53% female (3,504) and 47% male its employees such as leaves, salary loans, saving (Last certified on Apr. 22, 2019) (3,065). By position, there were 91 executives (49 benefits, several loans options, medical benefits, male, 42 female) and 6,478 non-executives (3,016 and flexible working hours, among other benefits. Southeast Asian Campus male, 3,462 female). (Last certified on Nov. 2, 2019) 64 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 65

GOVERNANCE

Megaworld implements the range of AGI’s groupwide governance practices covering employees, customers, suppliers, and other stakeholders. The topics identified in this area specifically for Megaworld include data privacy and security, handling of electronic waste, stakeholder management, and business ethics..

DATA PRIVACY AND SECURITY equipment was discarded. Electronic waste is not and supply chain procurement policies. Suppliers Anti-corruption. Anti-corruption policies are processed on-site. All e-waste is temporarily stored must also have the relevant permits and licenses. enshrined in the Megaworld Group’s manuals of on-site until collection by transporters and treaters Issues raised by GERI customers are resolved by corporate governance. Specifically, these policies The Company takes reasonable steps to securely accredited by the Department of Environment the Company’s accounts management group. ensure that all material party transactions are destroy or permanently de-identify or anonymize and Natural Resources (DENR). No e-waste was The Company also has policies and programs executed at arm’s length. Employees are enjoined personal information if it is no longer needed. The transported in 2019, following the provisions of to assist in the development of its host to avoid any activity that would create conflict manner of disposal is such that the personal data Republic Act 6969, or the Toxic Substances and communities. situations or interfere with the performance of is unreadable (for paper) or irretrievable (for digital Hazardous and Nuclear Wastes Control Act of 1990. their responsibilities. Receiving gifts from third records). Empire East also requires vendors and suppliers parties is not allowed. to have the relevant permits and documents. No data security breach was recorded in 2019. STAKEHOLDER MANAGEMENT Issues raised by customers are addressed and Whistleblowing and grievance mechanisms. resolved by the Company’s credit and collection The Megaworld Group’s manuals of corporate ELECTRONIC WASTE As a group, Megaworld values the contribution of its and customer relations departments. governance provide for grievance mechanisms. customers, suppliers, and its host communities to They encourage any stakeholder to communicate, the success of its business. BUSINESS ETHICS confidentially and without risk of reprisal, The Megaworld Group discards its electronic waste legitimate concerns about illegal, unethical, or in a responsible manner. Vendors and suppliers who do business with questionable practices and transactions entered Megaworld must comply with a code of conduct The Group has implemented a number of into by employees and officers. Specifically, At Megaworld, records and files are copied onto and supply chain procurement policies and possess policies to ensure that it conducts business in Megaworld’s Ethics Committee receives such a back-up server, either on-site or off-premise. the relevant government permits and licenses. a fair manner. The Company has anti-money reports and investigates them while ensuring Hard drive data are wiped out using hard disk To maintain customer satisfaction, Megaworld laundering policies, anti-corruption policies and confidentiality of information and protection of utility to prevent data recovery. It keeps track of has a client relations group tasked to fulfill its mechanisms for raising grievances. the whistleblowers. e-waste disposal using certificates and notices of customer relations policies. In 2019, there were 70 destruction. External processors are required to substantiated complaints on product or service Anti-money laundering. The Megaworld Group Environmental and contamination management. follow disposal criteria and sign a non-disclosure health and safety, all of which were adequately is in compliance with Republic Act 9160, or The Group complies with Presidential Decree 1586, agreement citing data privacy rights in accordance addressed by the Company. To help enhance its host the Anti-Money Laundering Act of 2001, and or the Philippine Environmental Impact Statement with Republic Act 10173, or the Philippine Data communities, the Company has policies in place for have anti-money laundering provisions in their System, and other environmental protection laws Privacy Act of 2012 (DPA). community development and social assistance. manuals of corporate governance. In 2019, including R.A. 6969; R.A. 8749, or the Clean Air the Megaworld Group did not record any Act of 1999; R.A. 9003, or the Ecological and Solid Meanwhile, GERI’s outdated and defective Likewise, vendors and suppliers who do business monetary loss as a result of legal proceedings Waste Management Act of 2000; and R.A. 9275, equipment is inspected by the Company’s IT with GERI must comply with a code of conduct associated with money laundering. or the Clean Water Act of 2004. department prior to disposal. In 2019, no electronic 66 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 67

CORPORATE GOVERNANCE

Megaworld’s Manual on Corporate Governance serves as the following for the Company:

A guide for the Company in fulfilling its long-term economic, moral, legal, and social obligations toward stakeholders.

A system of direction, feedback, and control through regulations, performance standards, and ethical guidelines.

The manual also holds the Board of Directors and senior management accountable for reconciling long-term customer satisfaction with shareholder value. In their commitment to upholding good corporate governance principles, the Board has directed several committees to enact these principles and practice strategic business management in every division:

The Corporate Governance Committee The Related Party Transaction assists the Board in implementing, reviewing, Committee reviews all material related party and evaluating the corporate governance transactions of the Company. This committee framework. The committee is also responsible evaluates on an ongoing basis the existing for recommending continuing relevant education relations between and among business and or training programs for directors, assigning counterparties. tasks or projects and developing policies for the remuneration of directors and officers. In addition, a designated Compliance Officer will monitor, review, evaluate, and ensure the The Audit Committee ensures that all Company’s compliance with the relevant laws, financial reports comply with internal financial provisions, and requirements of this Manual, the management and accounting standards as well as rules and regulations, and all governance issuances applicable laws, rules, and regulations. of regulatory agencies.

The Board Risk Oversight Committee is responsible for the development, evaluation, and oversight of the Company’s Enterprise Risk Management system to ensure its functionality and effectiveness. The committee also advises the Board on its risk appetite levels and risk tolerance limits based on changes and developments inside the Company. 68 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 69

ENTERPRISE RISK MANAGEMENT

capabilities to maximize the long-term 3. A robust risk assessment system, methodology, fundamental value of its assets, existing and reporting structure will be used with all business portfolio, and future business risk issues identified, analyzed, assessed, and Megaworld Corporation’s (MEG) opportunities. monitored in a consistent manner. Risk controls will be designed and implemented to reasonably top management is committed 2. Enterprise Risk Management will be assure the achievement of the Corporation’s to the effective management of embedded in the Corporation’s critical goals and objectives. The effectiveness of these strategic, operational, financial business activities, functions, and processes. controls and the mitigating strategies and The understanding of key risks and the action plans will be systematically reviewed and, and compliance-related risks Corporation’s appetite and tolerance for where necessary, improved. The performance of throughout the organization. these risks will be critical considerations in the our risk management activities will be regularly various decision-making processes involving monitored, reviewed and reported. The risk our business units, including project planning, management function will be implemented by launch and delivery, capital and resource the Opportunity and Risk Management (ORM) allocation, investment and partnering Department, with oversight from the Board of opportunities, business operations, sales and Directors through the Executive Committee and marketing, service support, and others. the Office of the Chief Operating Officer In the corporation’s Code of Corporate collaboration with key risk owners, critical Governance, among the main responsibilities support units and, if necessary, with proper of the corporation’s Board of Directors is external entities. to identify key risk areas and performance THE RISK ASSESSMENT PROCESS indicators and monitor these factors with due diligence to enable the corporation to STATEMENT OF POLICY anticipate and prepare for possible threats to Risk Identification. The purpose of risk The Corporation adopts a comprehensive tion its operational and financial viability. identification is to find, recognize and lta M approach to understanding and proactively u on describe risks that might help or prevent ns i o to managing the risks we face in our business. r Furthermore, the Securities and Exchange an organization achieving its objectives. C i d Scope, Context, Criteria n Commission (SEC)’s Memorandum Circular n g Relevant, appropriate and up-to-date We recognize taking business decisions which a a #19, series of 2016, requires companies to have n information is important in identifying risks. n entail calculated risks and managing those d o Risk Assessment a strong and effective internal control system i within approved tolerances is fundamental to t R and enterprise risk management framework to a e

c v delivering long term value to our shareholders and i

Risk Analysis. The purpose of risk analysis Risk Identification i e ensure the integrity, transparency and proper n

meeting our commitments to employees, tenants, w governance in the conduct of its affairs. is to comprehend the nature of risk u

customers, contractors, business partners and and its characteristics including, where m Risk Analysis

members of the communities in which we do m

It is in this view that an enterprise-wide appropriate, the level of risk. o C Risk Evaluation approach to risk management is deemed business. We believe risk management must very useful and critical in providing the Board be integrated into the day to day management Risk Evaluation. The purpose of risk and Management with reasonable assurance and operation of our business. It should guide Risk Treatment evaluation is to support decisions. Risk R that risks – which may adversely affect the our decision making and form an integral part e evaluation involves comparing the results co corporation’s ability to achieve its business of our culture. Our risk management strategies rd of the risk analysis with the established in ing objectives, comply with regulatory requirements are guided by the ISO 31000 Risk Management g an port risk criteria to determine where additional d Re and maximize shareholder value – are identified, Standard and other applicable international action is required. monitored and effectively mitigated. standards.

With the effective management of risks being To ensure that needed measures are in place, Risk Treatment. The purpose of risk treatment is to select and implement options for addressing vital to the continued growth and success of the the corporation has established an Enterprise risk. Risk treatment involves the process of formulating and selecting risk treatment options, Corporation, we hereby state and commit that: Risk Management (ERM) Process that will planning and implementing risk treatment, assessing the effectiveness of that treatment, and provide a focused and disciplined approach 1. Risks faced by the Corporation shall be deciding whether the remaining risk is acceptable. If not acceptable, taking further treatment. to managing these risks. The corporation identified, monitored and managed effectively shall proactively manage its perceived risks to the best of our ability at all times. The by continuously identifying, mitigating or Corporation will use its risk management controlling and monitoring serious risks in 70 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 71

FINANCIAL STATEMENTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITIONMANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Results of Operations

(Based on Financial Statements adopted in accordance with the Philippine Financial Reporting Standards)

Review of December 31, 2019 versus December 31, 2018

71 Management’s Discussion and Analysis Megaworld, the country’s largest developer of integrated urban townships, registered a net income of Php19.30 billion in 2019, up 21.87% compared to Php15.83 billion the previous year. Excluding non- recurring gains of Php691.03 million, net income grew 17.51% to a new record high of Php18.61 billion 73 Statement of Management’s Responsibility for during the year. Net income attributable to parent company stood at Php17.93 billion in 2019 up 17.91% from Php15.21 billion the year before. Consolidated Financial Statements Consolidated revenues grew at a robust pace of 17.21% to Php67.31 billion in 2019 from Php57.43 billion in 2018. The healthy growth was underpinned by the strong performances of all of its key businesses. 74 Report of Independent Auditors Development. Among product portfolios, the bulk of consolidated revenues came from the sale of condominium units and residential lots, comprising 63.29% of total revenues. Real estate sales remained 80 Consolidated Statements of Financial Position steady with a 12.01% increase, amounting to Php42.60 billion and Php38.04 billion for the years 2019 and 2018, respectively. The Group’s registered sales mostly came from the following projects: Maple Grove Commercial District, San Antonio Residence, Uptown Parksuites Tower 1 & 2, Gentry Manor, The Florence, 82 Consolidated Statements of Income One Pacific Residence, Bayshore Residential Resort 1&2, One Manchester Place, Uptown Ritz Residence, Hamilton Tower 2, Grand Westside Hotel, Eight Newtown Boulevard, Salcedo Sky Suites, One Eastwood Avenue Tower 2, Kingsford Hotel Bayshore, St. Moritz Private Estate, Eighty One Newport 83 Consolidated Statements of Comprehensive Income Boulevard and Manhattan Plaza Tower 1.

Leasing. The company’s rental businesses, comprising of office and lifestyle mall leasing, strongly 84 Consolidated Statements of Changes in Equity contributed to the topline, soaring 17.87% to Php16.81 billion in 2019 from the previous year’s Php14.26 billion. This contributed 24.98% of the total consolidated revenues during the year.

90 Consolidated Statements of Cash Flows Hotel Operations. The Group’s revenues attributable to hotel operations posted an amount of Php2.54 billion in 2019 with an increase of 67.42% from Php1.52 billion for the same period last year.

92 Notes to Consolidated Financial Statements Total costs and expenses amounted to Php48.02 billion, an increase by 15.90% from Php41.43 billion last year. Interest and other charges – net decreased by 1.05%, amounting to Php3.26 billion this year from Php3.30 billion in 2018. Tax expense in 2019 amounting to Php6.08 billion resulted to an increase of 9.69% from 2018 reported amount of Php5.54 billion due to higher taxable income.

There were no seasonal aspects that had a material effect on the financial condition or financial performance of the Group. Neither were there any trends, events or uncertainties that have had or that are reasonably expected to have a material impact on net sales or revenues or income from continuing operations. The Group is not aware of events that will cause material change in the relationship between costs and revenues.

There are no significant elements of income or loss that did not arise from the Group’s continuing operations.

Financial Condition

The Group maintains a prudent financial policy as it engages in a more competitive and challenging environment. The Group’s Statements of Financial Position reflects stable financial growth. Total resources as at December 31, 2019 amounted to Php349.63 billion, posting an increase of 8.48% compared to Php322.29 billion as at December 31, 2018.

The Group shows steady liquid position as at December 31, 2019 by having its current assets at Php190.51 billion as against its current obligations at Php57.54 billion. Current assets posted an increase of 8.77%

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72 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 73

MANAGEMENT’S DISCUSSION AND ANALYSIS STATEMENT OF MANAGEMENT’S OF RESULTS OF OPERATIONS AND FINANCIAL RESPONSIBILITY FOR FINANCIAL STATEMENTS STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR CONDITION FINANCIAL STATEMENTS

from December 31, 2018 balance of Php175.15 billion. Current obligations reflected an increase of 21.39% The management of Megaworld Corporation and Subsidiaries is responsible for the preparation and fair from December 31, 2018 balance of Php47.40 billion. presentation of the financial statements, including the schedules attached therein, for the years ended December 31, 2019 and 2018, in accordance with the prescribed financial reporting framework indicated therein, and for Cash and cash equivalents increased by 31.70% from Php17.54 billion in 2018 to Php23.10 billion in 2019. such internal control as management determines is necessary to enable the preparation of financial statements Current and non-current trade and other receivables – net increased by 28.34%, amounting to Php44.81 that are free from material misstatement, whether due to fraud or error. billion as at December 31, 2019 compared to Php34.91 billion as at December 31, 2018. Contract assets decreased by 16.13%, amounting to Php18.64 billion as at December 31, 2019 compared to Php22.23 In preparing the financial statements, management is responsible for assessing the Group's ability to continue as billion as at December 31, 2018. Inventories increased by 2.17% from Php100.66 billion in 2018 to a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of Php102.85 billion in 2019. This includes raw land for residential development and property development accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic cost reclassified due to adoption PFRS 15 and PIC Q&As 2018-11, 2018-15 and 2018-12. Investment alternative to do so. properties – net increased by 7.53% amounting to Php110.89 billion in December 31, 2019 from Php103.12 billion in December 31, 2018. This includes raw land and property development cost for office and The Board of Directors is responsible for overseeing the Group's financial reporting process. commercial development reclassified due to adoption of PIC Q&As 2018-11, 2018-15 and 2018-12. The Board of Directors reviews and ap proves the financial statements, including the schedules attached therein, and Property and equipment – net amounted to Php6.70 billion, 8.63% higher from year-end 2018 balance of submits the same to the stockholders. Php6.17 billion.

Punongbayan & Araullo, the independent auditors appointed by the stock holders, have audited the financial Trade and other payables amounted to Php19.34 billion and Php15.03 billion as at December 31, 2019 and statements of the Group in accordance with Philippine Standards on Auditing, and in their report to the 2018, respectively, reflecting a 28.73% increase. Contract liabilities decreased by 2.89%, amounting to stockholders, have expressed the'· opinion on the fairness of presentation upon completion of such audit. Php5.21 billion as at December 31, 2019 compared to Php5.37 billion as at December 31, 2018. Total current and non-current customers’ deposits as at December 31, 2019 amounted to Php13.80 billion compared Php11.81 billion as at December 31, 2018 with 16.86% increase.

The interest-bearing loans and borrowings current and non-current amounted to Php51.26 and Php50.64 billion for December 31, 2019 and 2018, respectively, reflecting a 1.22% increase. Bonds payable ANDREW L. TAN decreased by 1.90%, amounting to Php24.62 billion as at December 31, 2019 compared to Php25.10 billion Chairman and Chief Executive Officer as at December 31, 2018. Total other liabilities amounted to Php14.62 billion from Php11.72 billion as at December 31, 2019 and 2018, respectively, translating to a 24.73% increase.

Total Equity (including non-controlling interests) increased by 8.54% from Php188.74 billion as at December 31, 2018 to Php204.87 billion as at December 31, 2019 due to the Group’s continuous profitability. FRANCISCO C. CANUTO SVP and Treasurer The top four (4) key performance indicators of the Group are shown below: (Chief Financial Officer)

December 31, 2019 December 31, 2018 Current Ratio *1 3.31:1.00 3.69:1.00 Debt to Equity Ratio *2 0.37:1.00 0.40:1.00

December 31, 2019 December 31, 2018 Return on Assets *3 5.74% 5.22% Return on Equity *4 10.48% 9.97%

*1 – Current Assets / Current Liabilities *2 – Interest Bearing Loans and Borrowings and Bonds Payable / Equity *3 – Net Profit / Average Total Assets *4 – Net Profit / Average Equity (Computed using figures attributable only to parent company shareholders)

With its strong financial position, the Group will continue investing in and pursuing expansion activities as it focuses on identifying new markets, maintaining established markets and tapping business opportunities.

Material Changes in the Year 2019 Financial Statements (Increase/decrease of 5% or more versus December 31, 2018)

Statement of Financial Position

31.70% increase in cash and cash equivalents Mainly pertains to higher cash that is generated internally and net proceeds from debt issuance during the year

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Punongbayan & AraulloAraulloAraullo 20th Floor, Tower 1

The Enterprise Center 74 MEGAWORLD CORPORATION 6766 Ayala Avenue 2019 ANNUAL REPORT 75 1200 Makati City Philippines Report of Independent Auditors T +63 2 988 22 88 REPORT OF INDEPENDENT AUDITORS

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The Board of Directors and Stockholders Emphasis of a Matter – Subsequent Events Relating to COVID 19 Outbreak Megaworld Corporation and Subsidiaries (A Subsidiary of Alliance Global Group, Inc.) We draw attention to Note 37 to the consolidated financial statements, which describes the likely 30th Floor, Alliance Global Tower negative impact of the business disruption as a result of the corona virus outbreak to the Group’s 36th Street cor. 11th Avenue financial condition and performance after the end of the reporting period. Our opinion is not Uptown Bonifacio, Taguig City modified with respect to this matter.

Key Audit Matters Opinion Key audit matters are those matters that, in our professional judgment, were of most significance We have audited the consolidated financial statements of Megaworld Corporation and in our audit of the consolidated financial statements of the current period. These matters were Subsidiaries (the Group), which comprise the consolidated statements of financial position as at addressed in the context of our audit of the consolidated financial statements as a whole and in December 31, 2019 and 2018, and the consolidated statements of income, consolidated forming our opinion thereon, and we do not provide a separate opinion on these matters. statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for each of the three years in the period ended and notes

to the consolidated financial statements, including a summary of significant accounting policies. (a) Revenue Recognition on Real Estate Sales and Determination of Related Costs

Description of the Matter In our opinion, the accompanying consolidated financial statements present fairly, in all material

respects, the consolidated financial position of the Group as at December 31, 2019 and 2018, The Group’s revenue recognition process, policies and procedures on real estate sales are and its consolidated financial performance and its consolidated cash flows for each of the significant to our audit because these involve the application of significant judgment and three years in the period ended December 31, 2019 in accordance with Philippine Financial estimation. In addition, real estate sales and costs of real estate sales amounted to P42.6 billion Reporting Standards (PFRS). or 63.3% of consolidated Revenues and Income and P23.4 billion or 48.7% of consolidated Cost and Expenses, respectively, for the year ended December 31, 2019. Areas affected by revenue Basis for Opinion recognition, which requires significant judgments and estimates, include determining when a contract will qualify for revenue recognition, measuring the progress of the development of real We conducted our audits in accordance with Philippine Standards on Auditing (PSA). Our estate projects which defines the amount of revenue to be recognized and determining the responsibilities under those standards are further described in the Auditors’ Responsibilities for amount of actual costs incurred as cost of real estate sales. These areas were significant to our the Audit of the Consolidated Financial Statements section of our report. We are independent of audit as an error in application of judgments and estimates could cause a material misstatement the Group in accordance with the Code of Ethics for Professional Accountants in the Philippines in the consolidated financial statements. (Code of Ethics) together with the ethical requirements that are relevant to our audits of the consolidated financial statements in the Philippines, and we have fulfilled our other ethical The Group’s policy for revenue recognition on real estate sales are more fully described in Note responsibilities in accordance with these requirements and the Code of Ethics. We believe that 2 to the consolidated financial statements. The significant judgments applied and estimates used the audit evidence we have obtained is sufficient and appropriate to provide a basis for our by management related to revenue recognition are more fully described in Note 3 to the opinion. consolidated financial statements. The breakdown of real estate sales and costs of real estate sales are also disclosed in Notes 20 and 21, respectively, to the consolidated financial statements.

How the Matter was Addressed in the Audit

We obtained an understanding of the revenue recognition policy regarding real estate sales Certified Public Accountants grantthornton.com.ph transactions and the related significant business processes of the Group. Punongbayan & Araullo (P&A) is the Philippine member firm of Grant Thornton International Ltd (GTIL). Our procedures in testing the appropriateness and proper application of the Group’s revenue Offices in Cavite, Cebu, Davao BOA/ PRC Cert of Reg. No. 0002 recognition policy and process include tests of information technology (IT) general controls over SEC Accreditation No. 0002-FR-5 the automated system which generated the data used as basis for adjustments. We also

performed tests of mathematical accuracy and completeness of supporting contract summary, examination of supporting documents of a sample of agreements, and performing overall analytical review of actual results.

Certified Public Accountants Punongbayan & Araullo is the Philippine member firm of Grant Thornton International Ltd (GTIL). 76 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 77

REPORT OF INDEPENDENT AUDITORS

- 3 - - 4 -

In addressing the risks of material misstatements in revenue recognition, we have performed Other Information inspection of sample agreements for compliance with a set of criteria for revenue recognition and test of controls over contract approval. We have also tested the reasonableness of Management is responsible for the other information. The other information comprises the management’s judgment in determining the probability of collection of the consideration in a information included in the Group’s Securities and Exchange Commission (SEC) Form 20-IS contract which involves a historical analysis of customer payment pattern and behaviour. (Definitive Information Statement), SEC Form 17-A and Annual Report for the year ended December 31, 2019, but does not include the consolidated financial statements and our auditors’ Relative to the Group’s measurement of progress towards complete satisfaction of performance report thereon. The SEC Form 20-IS, SEC Form 17-A and Annual Report for the year ended obligation using the input method, we have tested the progress reported for the year in reference December 31, 2019 are expected to be made available to us after the date of this auditors’ report. to the actual costs incurred relative to the total budgeted project development costs. Our procedure include test of controls over recognition and allocation of costs per project and direct Our opinion on the consolidated financial statements does not cover the other information and examination of supporting documents. We have also performed physical inspection of selected we will not express any form of assurance conclusion thereon. projects under development to assess if the completion based on costs is not inconsistent with the physical completion of the project. In testing the reasonableness of budgetary estimates, we In connection with our audits of the consolidated financial statements, our responsibility is to read have ascertained the qualification of projects engineers who prepared the budgets and reviewed the other information identified above when it becomes available and, in doing so, consider the actual performance of completed projects with reference of their budgeted costs. whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits, or otherwise appears to be materially misstated. In relation to cost of real estate sales, we obtained an understanding of the Group’s cost accumulation process and performed tests of the relevant controls including ITGC. On a Responsibilities of Management and Those Charged with Governance for the sampling basis, we traced costs accumulated to supporting documents such as invoices and Consolidated Financial Statements accomplishment reports from the contractors and official receipts. Management is responsible for the preparation and fair presentation of the consolidated financial (a) Consolidation Process statements in accordance with PFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from Description of the Matter material misstatement, whether due to fraud or error.

The Group’s consolidated financial statements comprise the financial statements of Megaworld In preparing the consolidated financial statements, management is responsible for assessing the Corporation and its subsidiaries, as enumerated in Note 1 to the consolidated financial Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going statements, after the elimination of material intercompany transactions. The Group’s concern and using the going concern basis of accounting unless management either intends to consolidation process is significant to our audit because of the complexity of the process. It liquidate the Group or to cease operations, or has no realistic alternative but to do so. involves identifying and eliminating voluminous intercompany transactions to properly reflect realization of profits and measurement of controlling and non-controlling interests. Those charged with governance are responsible for overseeing the Group’s financial reporting process. The Group’s policy on consolidation process is more fully described in Note 2 to the consolidated financial statements. Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

How the Matter was Addressed in the Audit Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to We obtained understanding of the Group structure and its consolidation process including the issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of procedures for identifying intercompany transactions and reconciling intercompany balances. assurance, but is not a guarantee that an audit conducted in accordance with PSA will always We tested significant consolidation adjustments which include elimination of intercompany detect a material misstatement when it exists. Misstatements can arise from fraud or error and revenues, expenses and investments, reversal of unrealized fair value adjustments on are considered material if, individually or in the aggregate, they could reasonably be expected to intercompany investments, and recognition of equity transactions to measure non-controlling influence the economic decisions of users taken on the basis of these consolidated financial interest. statements.

Certified Public Accountants Certified Public Accountants Punongbayan & Araullo is the Philippine member firm of Grant Thornton International Ltd (GTIL). Punongbayan & Araullo is the Philippine member firm of Grant Thornton International Ltd (GTIL). 78 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 79

REPORT OF INDEPENDENT AUDITORS

- 5 - - 6 -

As part of an audit in accordance with PSA, we exercise professional judgment and maintain From the matters communicated with those charged with governance, we determine those professional skepticism throughout the audit. We also: matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’  Identify and assess the risks of material misstatement of the consolidated financial report unless law or regulation precludes public disclosure about the matter or when, in extremely statements, whether due to fraud or error, design and perform audit procedures responsive rare circumstances, we determine that a matter should not be communicated in our report to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis because the adverse consequences of doing so would reasonably be expected to outweigh the for our opinion. The risk of not detecting a material misstatement resulting from fraud is public interest benefits of such communication. higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. The engagement partner on the audits resulting in this independent auditors’ report is Renan A. Piamonte.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. PUNONGBAYAN & ARAULLO  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to BBy:y: Renan A. Piamonte continue as a going concern. If we conclude that a material uncertainty exists, we are PPartnerartner required to draw attention in our auditors’ report to the related disclosures in the consolidated CPA Reg. No. 0107805 financial statements or, if such disclosures are inadequate, to modify our opinion. Our TIN 221-843-037 conclusions are based on the audit evidence obtained up to the date of our auditors’ report. PTR No. 8116553, January 2, 2020, Makati City However, future events or conditions may cause the Group to cease to continue as a going SEC Group A Accreditation concern. Partner - No. 107805-SEC (until Dec. 31, 2023) Firm - No. 0002-FR-5 (until Mar. 26, 2021)  Evaluate the overall presentation, structure and content of the consolidated financial BIR AN 08-002511-037-2019 (until Sept. 4, 2022) statements, including the disclosures, and whether the consolidated financial statements Firm’s BOA/PRC Cert. of Reg. No. 0002 (until Jul. 24, 2021) represent the underlying transactions and events in a manner that achieves fair presentation.

 Obtain sufficient appropriate audit evidence regarding the financial information of the entities April 6, 2020 or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, related safeguards.

Certified Public Accountants Certified Public Accountants Punongbayan & Araullo is the Philippine member firm of Grant Thornton International Ltd (GTIL). Punongbayan & Araullo is the Philippine member firm of Grant Thornton International Ltd (GTIL). 80 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 81

MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.) MEGAWORLD CORPORATION AND SUBSIDIARIES CONSOLIDATED(A Subsidiary STATEMENTS of Alliance Global Group, Inc.) OF CONSOLIDATED STATEMENTS OF FINANCIAL POSITION FINANCIAL POSITIONDECEMBER 31, 2019 AND 2018 December 31, 2019 and 2018 (Amounts in Philippine Pesos) (Amounts in Philippine Pesos) - 2 -

2018 2018 (As Restated – (As Restated – Notes 2019 See Notes 1 and 2) Notes 2019 See Note 2)

A S S E T S LIABILITIES AND EQUITY

CURRENT ASSETS CURRENT LIABILITIES Cash and cash equivalents 5 P 23,104,875,672 P 17,543,095,320 Interest-bearing loans and borrowings 15 P 14,502,531,496 P 12,019,703,268 Trade and other receivables - net 6 33,011,950,292 27,655,190,137 Trade and other payables 17 19,306,782,624 15,027,120,371 Contract assets 20 10,857,180,128 11,131,863,695 Contract liabilities 20 1,703,947,321 2,663,104,996 Inventories 7 102,845,390,540 100,662,575,544 Customers’ deposits 2 10,716,803,253 9,286,219,447 Advances to contractors and suppliers 2 12,269,532,205 8,949,748,055 Redeemable preferred shares 18 251,597,580 251,597,580 Prepayments and other current assets 8 8,417,232,219 9,204,913,382 Advances from associates and other related parties 27 2,914,882,801 2,885,463,118 Total Current Assets 190,506,161,056 175,147,386,133 Income tax payable 257,776,843 207,162,344 Other current liabilities 19 7,890,196,049 5,063,817,214 NON-CURRENT ASSETS Trade and other receivables - net 6 11,797,389,071 7,258,618,747 Total Current Liabilities 57,544,517,967 47,404,188,338 Contract assets 20 7,785,824,559 11,095,415,992 Advances to contractors and suppliers 2 3,044,295,238 2,821,521,059 NON-CURRENT LIABILITIES Advances to landowners and joint operators 10 7,058,884,461 6,910,177,902 Interest-bearing loans and borrowings 15 36,753,944,493 38,620,908,482 Financial assets at fair value through Bonds payable 16 24,623,883,690 25,102,042,365 other comprehensive income 9 4,498,219,487 4,474,947,699 Contract liabilities 20 3,509,607,722 2,705,562,299 Investments in associates - net 11 3,511,501,836 1,996,876,322 Customers’ deposits 2, 27 3,083,064,985 2,523,066,928 Investment properties - net 12 110,890,939,193 103,122,073,532 Redeemable preferred shares 18 503,195,160 754,792,740 Property and equipment - net 13 6,702,251,003 6,170,052,573 Deferred tax liabilities - net 26 10,729,268,825 8,951,152,565 Deferred tax assets 26 308,797,093 284,888,412 Retirement benefit obligation 25 1,249,574,818 828,488,892 Other non-current assets - net 14 3,528,811,747 3,008,708,543 Other non-current liabilities 19 6,770,494,579 6,660,043,772

Total Non-current Assets 159,126,913,688 147,143,280,781 Total Non-current Liabilities 87,223,034,272 86,146,058,043

Total Liabilities 144,767,552,239 133,550,246,381 TOTAL ASSETS P 349,633,074,744 P 322,290,666,914 EQUITY 28 Total equity attributable to the Company’s shareholders 178,464,085,321 163,854,891,426 Non-controlling interests 26,401,437,184 24,885,529,107

Total Equity 204,865,522,505 188,740,420,533

TOTAL LIABILITIES AND EQUITY P 349,633,074,744 P 322,290,666,914

See Notes to Consolidated Financial Statements. 82 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 83

MEGAWORLD CORPORATION AND SUBSIDIARIES MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.) (A Subsidiary of Alliance Global Group, Inc.)

MEGAWORLD CORPORATION AND SUBSIDIARIES CONSOLIDATEDMEGAWORLD STATEMENTS CORPORATION AND SUBSIDIARIES OF INCOME CONSOLIDATED STATEMENTS OF December 31, 2019 and 2018 (Amounts in (APhilippine Subsidiary Pesos)of Alliance Global Group, Inc.) (A Subsidiary of Alliance Global Group, Inc.) CONSOLIDATED STATEMENTS OF INCOME COMPREHENSIVECONSOLIDATED STATEMENTSINCOME OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017 December 31, 2019, 2018 and 2017FOR (Amounts THE YEARS in Philippine ENDED DECEMBER Pesos) 31, 2019, 2018 AND 2017 (Amounts in Philippine Pesos) (Amounts in Philippine Pesos)

2018 2018 (As Restated – (As Restated – Notes 2019 See Notes 1 and 2) 2017 Notes 2019 See Notes 1 and 2) 2017

REVENUES AND INCOME Real estate sales 20 P 42,603,984,572 P 38,035,548,060 P 34,115,066,390 NET PROFIT FOR THE YEAR P 19,296,029,150 P 15,833,051,853 P 13,706,988,693 Rental income 12 16,814,091,846 14,264,916,931 11,829,993,113 Hotel operations 2 2,543,769,508 1,519,423,405 1,335,958,802 11 Equity share in net earnings (losses) of associates ( 58,832,233 ) 92,307,592 118,829,303 OTHER COMPREHENSIVE INCOME (LOSS) Interest and other income - net 23 5,409,726,260 3,515,014,728 2,715,195,436 Items that will not be reclassified subsequently to consolidated profit or loss: 67,312,739,953 57,427,210,716 50,115,043,044 Actuarial gains (losses) on retirement benefit obligation 25 ( 350,479,591 ) 313,543,907 76,638,960 COSTS AND EXPENSES Fair value gains on financial assets at fair value Cost of real estate sales 21 23,379,819,000 20,521,249,555 18,041,090,460 through other comprehesive income 9 23,271,788 121,702,362 - Hotel operations 1,381,156,765 820,752,636 755,756,983 Share in other comprehensive income (loss) Operating expenses 22 13,912,479,751 11,244,991,807 9,688,197,677 of associates 11 ( 11,417,059 ) 13,452,063 33,916,495 Interest and other charges - net 24 3,261,597,997 3,296,326,497 3,862,275,019 Tax income (expense) 25, 26 105,143,877 ( 92,059,473 ) ( 22,991,688 ) Tax expense 26 6,081,657,290 5,544,362,408 4,063,450,162

48,016,710,803 41,427,682,903 36,410,770,301 ( 233,480,985 ) 356,638,859 87,563,767

PROFIT FOR THE YEAR Items that will be reclassified BEFORE PRE-ACQUISITION INCOME 19,296,029,150 15,999,527,813 13,704,272,743 subsequently to consolidated profit or loss: Unrealized losses (gains) on cash flow hedge 30 ( 293,369,328 ) 230,806,189 ( 45,942,879 ) PRE-ACQUISITION LOSS (INCOME) Exchange difference on translating OF SUBSIDIARIES 1 - ( 166,475,960 ) 2,715,950 foreign operations 2 ( 3,326,261 ) 2,384,743 1,363,917 Realized fair value loss on impairment of investment in available-for-sale securities 9 - - 1,516,864,986 NET PROFIT FOR THE YEAR P 19,296,029,150 P 15,833,051,853 P 13,706,988,693 Fair value gains (losses) on available-for-sale securities 9 - - 751,345,581 Fair value losses (gains) on disposal of available-for-sale securities reclassified to profit or loss 23, 24 - - 1,502,090 Net profit attributable to: Tax income (expense) 26 934,833 ( 716,975 ) ( 409,175 ) Company’s shareholders P 17,931,417,072 P 15,208,138,139 P 13,145,556,720 Non-controlling interests 1,364,612,078 624,913,714 561,431,973 ( 295,760,756 ) 232,473,957 2,224,724,520

P 15,833,051,853 P 13,706,988,693 P 19,296,029,150 Total Other Comprehensive Income (Loss) ( 529,241,741 ) 589,112,816 2,312,288,287

Earnings Per Share: 29 TOTAL COMPREHENSIVE INCOME Basic P 0.546 P 0.469 P 0.413 FOR THE YEAR P 18,766,787,409 P 16,422,164,669 P 16,019,276,980

Diluted P 0.543 P 0.467 P 0.411 Total comprehensive income attributable to: Company’s shareholders P 17,422,846,318 P 15,815,614,416 P 15,380,733,122 Non-controlling interests 1,343,941,091 606,550,253 638,543,858 See Notes to Consolidated Financial Statements. P 18,766,787,409 P 16,422,164,669 P 16,019,276,980

See Notes to Consolidated Financial Statements. 84 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 85

MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.)

CONSOLIDATED STATEMENTS OF MEGAWORLD CORPORATION AND SUBSIDIARIESMEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.)(A Subsidiary of Alliance Global Group, Inc.) CHANGES IN EQUITY CONSOLIDATED STATEMENTS OF CHANGESCONSOLIDATED IN EQUITY STATEMENTS OF CHANGES IN EQUITY December 31, 2019, 2018 and 2017 (Amounts in Philippine Pesos) FOR THE YEARS ENDED DECEMBER 31,FOR 2019, THE 2018 YEARS AND 2017ENDED DECEMBER 31, 2019, 2018 AND 2017 (Amounts in Philippine Pesos) (Amounts in Philippine Pesos)

Attributable to the Company’s ShareholdersAttributable to the Company’s Shareholders Non-controlling Non-controlling Additional Treasury Shares - Additional Translation Treasury RevaluationShares - TranslationPerpetual Revaluation Perpetual Interest Interest Capital Stock Paid-in Capital Capital StockAt Cost Paid-in CapitalReserves At CostReserves ReservesSecuritiesReserves Retained Earnings Securities Retained Earnings (See Note 28) (See Note 28) (See Note(See 28) Note 28) (See Note(See 28) Note 2) (See(See Note Notes 28) 9, 11 and 25) (See Note(See 2) Note 28) (See Notes(See 9, Notes 11 and 1, 25)2 and 28) (See Note 28)Total (See Notes 1,(See 2 and Note 28) 2) TotalTotal Equity (See Note 2) Total Equity

Balance at January 1, 2019 Balance at January 1, 2019 As previously reported As previously reported 32,430,865,872 16,657,990,413 32,430,865,872 (633,721,630) 16,657,990,413 (380,437,530) (633,721,630) (2,705,274,744) (380,437,530) 10,237,898,577 (2,705,274,744) 108,247,570,468 10,237,898,577 163,854,891,426 108,247,570,468 24,885,529,107 163,854,891,426 188,740,420,533 24,885,529,107 188,740,420,533 Effect of adoption of PFRS 16 Effect of adoption of PFRS 16 ------5,272 ,2 5 5 - 5,272, 2 5 5 5 , 2 7 2 , 2 75,5369, 2 9 0 5 , 2 7 2 , 2 5 5 12,6 4 1 , 5 4 5 7,369,290 12,641,545 As restated As restated 32,430,865,872 16,657,990,413 ( 32,430,865,872 633,721,630 ) ( 16,657,990,413 380,437,530 ( ) ( 633,721,630 2,705,274,744 ) ( ) 380,437,530 10,237,898,577 ) ( 2,705,274,744 108,252,842,723 ) 10,237,898,577 163,860,163,681 108,252,842,723 24,892,898,397 163,860,163,681 188,753,062,078 24,892,898,397 188,753,062,078

Transactions with owners: Transactions with owners: Exercise of stock options Exercise of stock options - 951,312 - 451,055 951,312 - 451,055 - - - ( - 515,840 ) - 886,527( 515,840 - ) 886,527 886,527 - 886,527 Share-based employee compensation Share-based employee compensation ------17,824,456 - 17,824,456 17,824,456 - 17,824,456 17,824,456 - 17,824,456 Cash dividends Cash dividends ------( - 2,379,182,809 ) ( - 2,379,182,809 ( ) ( 2,379,182,809 68,013,915 ) ( ) ( 2,379,182,809 2,447,196,724 ) ( ) 68,013,915 ) ( 2,447,196,724 ) Share-based employee compensation Share-based employee compensation of a subsidiary of a subsidiary ------892,953 - 892,953 892,953 892,953 Distribution to holders of perpetual securities Distribution to holders of perpetual - securities ------( - 562,913,000 ) ( - 562,913,000 ( ) 562,913,000 - ) ( ( 562,913,000 562,913,000 ) ) - ( 562,913,000 ) Acquisition of a new subsidiary with Acquisition of a new subsidiary with non-controlling interest non-controlling interest ------231,718,658 - 231,718,658 231,718,658 231,718,658 Recycling due to disposal and dilution Recycling due to disposal and dilution ------11,417,059 - 11,417,059 11,417,059 - 11,417,059 11,417,059 - 11,417,059 Other reserves arising from consolidation Other reserves arising from consolidation ------93,043,089 - - 93,043,089 - - 93,043,089 - - 93,043,089 93,043,089 - 93,043,089 - 951,312 - 451,055 951,312 - 451,055 93,043,089 - - ( 93,043,089 2,913,370,134 ) ( - 2,818,924,678 ( ) 2,913,370,134 164,597,696 ) ( ( 2,818,924,678 2,654,326,982 ) ) 164,597,696 ( 2,654,326,982 )

Total comprehensive income for the year: Total comprehensive income for the year: Net profit Net profit ------17,931,417,072 - 17,931,417,072 17,931,417,072 1,364,612,078 17,931,417,072 19,296,029,150 1,364,612,078 19,296,029,150 Actuarial gain on retirement benefit obligation, Actuarial gain on retirement benefit obligation, net of tax net of tax ------( - 229,602,805 ) - - ( 229,602,805 - ) ( - 229,602,805 ) ( - 15,732,909( ) ( 229,602,805 245,335,714 ) ( ) 15,732,909 ) ( 245,335,714 ) Fair value gains (losses) on financial assets at fairFair value value gains (losses) on financial assets at fair value through other comprehensive income through other comprehensive income------28,209,867 - - 28,209,867 - - 28,209,867 ( - 4,938,079 ) 28,209,867 23,271,788 ( 4,938,079 ) 23,271,788 Fair value change on cash flow hedge Fair value change on cash flow hedge ------( - 293,369,328 ) - - ( 293,369,328 - ) ( - 293,369,328 ) - - ( ( 293,369,328 293,369,328 ) ) - ( 293,369,328 ) Share in other comprehensive income of associatesShare in other comprehensive income - of associates - - - - - ( - 11,417,059 ) - - ( 11,417,059 - ) ( - 11,417,059 ) - - ( ( 11,417,059 11,417,059 ) ) - ( 11,417,059 ) Exchange difference on translating foreign operations,Exchange difference on translating foreign operations, net of tax net of tax - - - - ( - 2,391,428 ) - - ( 2,391,428 - ) - - ( - 2,391,428 ) - - ( ( 2,391,428 2,391,428) ) - ( 2,391,428 ) - - - - ( - 2,391,428 ) ( - 506,179,326 ( ) 2,391,428 - ) ( 506,179,326 17,931,417,072 ) - 17,422,846,318 17,931,417,072 1,343,941,091 17,422,846,318 18,766,787,409 1,343,941,091 18,766,787,409

Balance at December 31, 2019 Balance at December 31, 2019P 32,430,865,872 P 16,658,941,725P ( 32,430,865,872P 633,270,575 P ) ( 16,658,941,725P 382,828,958 ( P ) ( P 633,270,575 3,118,410,981 ) ( P ) P 382,828,958 10,237,898,577 ) ( P P 3,118,410,981 123,270,889,661 ) P P10,237,898,577 178,464,085,321 P 123,270,889,661P 26,401,437,184 P 178,464,085,321P 204,865,522,505 P 26,401,437,184 P 204,865,522,505 86 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 87

MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY December 31, 2019, 2018 and 2017 (Amounts in Philippine Pesos) - 2 - - 2 -

Attributable to the Company’s Shareholders Attributable to the Company’s Shareholders Additional Treasury Shares - Additional Translation TreasuryRevaluation Shares - TranslationPerpetual Revaluation Perpetual Non-controlling Interest Non-controlling Interest Capital Stock Paid-in Capital CapitalAt Stock Cost Paid-inReserves Capital At ReservesCost ReservesSecurities RetainedReserves Earnings Securities Retained Earnings (See Note 28) (See Note 28) (See(See Note Note 28) 28) (See(See Note Note 28) 2) (See(See Notes Note 9, 28) 11 and 25) (See(See Note Note 2) 28) (See Notes(See Notes 9, 11 2and and 25) 28) (See NoteTotal 28) (See Notes(See 2 Note and 28)2) TotalTotal Equity (See Note 2) Total Equity

Balance at January 1, 2018 Balance at January 1, 2018 As previously reported As previously reportedP 32,430,865,872 P 16,657,990,413 P( P 32,430,865,872 633,721,630 )P( P 16,657,990,413 382,105,298 ( ) P( P 633,721,630 898,501,087 ) ( ) P P 382,105,298 - ) ( P P 898,501,08793,933,935,086 ) P P 141,108,463,356- P P 93,933,935,086 22,591,607,181 P P 141,108,463,356 163,700,070,537 P 22,591,607,181 P 163,700,070,537 Effect of adoption of PFRS 9 Effect of adoption of PFRS 9 ------( - 1,457,710,646 ) - - ( 1,457,710,646 1,354,850,340 ) ( - 102,860,306 ) ( 1,354,850,340 1,983,312 ( ) ( 102,860,306 104,843,618 ) ( ) 1,983,312 ) ( 104,843,618 ) As restated As restated 32,430,865,872 16,657,990,413 ( 32,430,865,872 633,721,630 ) ( 16,657,990,413 382,105,298 ( ) ( 633,721,630 2,356,211,733 ) ( ) 382,105,298 - ) ( 2,356,211,733 95,288,785,426 ) 141,005,603,050- 95,288,785,426 22,589,623,869 141,005,603,050 163,595,226,919 22,589,623,869 163,595,226,919

Transactions with owners: Transactions with owners: Issuance of shares of stock Issuance of shares of stock ------1,000,000 - 1,000,000 1,000,000 1,000,000 Issuance of perpetual securities Issuance of perpetual securities ------10,237,898,577 - - 10,237,898,577 10,237,898,577 - - 10,237,898,577 10,237,898,577 - 10,237,898,577 Share-based employee compensation Share-based employee compensation ------23,191,715 - 23,191,715 23,191,715 - 23,191,715 23,191,715 - 23,191,715 Cash dividends Cash dividends ------( - 1,982,208,812 ) ( - 1,982,208,812 ( ) ( 1,982,208,812 20,094,507 ) ( ) ( 1,982,208,812 2,002,303,319 ) ( ) 20,094,507 ) ( 2,002,303,319 ) Share-based employee compensation Share-based employee compensation of a subsidiary of a subsidiary ------3,307,158 - 3,307,158 3,307,158 3,307,158 Distribution to holders of perpetual securities Distribution to holders of perpetual - securities ------( - 290,336,000 ) ( - 290,336,000 ( ) 290,336,000 - ) ( ( 290,336,000 290,336,000 ) ) - ( 290,336,000 ) Acquisition of a new subsidiary with Acquisition of a new subsidiary with non-controlling interest non-controlling interest ------2,045,521,389 - 2,045,521,389 2,045,521,389 2,045,521,389 Changes in ownership interest in subsidiaries Changes in ownership interest in subsidiaries that do not result in a loss of control that do not result in a loss of- control - - - - - ( - 568,910,177 ) - - ( 568,910,177 - ) ( - 568,910,177 ) ( - 340,379,055 ( ) ( 568,910,177 909,289,232 ) ( ) 340,379,055 ) ( 909,289,232 ) Other reserves arising from consolidation Other reserves arising from consolidation ------( - 385,961,343 ) - - ( 385,961,343 - ) ( - 385,961,343 ) - - ( ( 385,961,343 385,961,343 ) ) - ( 385,961,343 ) ------( - 954,871,520 ) -10,237,898,577 ( ( 954,871,520 2,249,353,097 ) ) 10,237,898,577 7,033,673,960 ( 2,249,353,097 1,689,354,985 ) 7,033,673,960 8,723,028,945 1,689,354,985 8,723,028,945

Total comprehensive income for the year: Total comprehensive income for the year: Net profit Net profit ------15,208,138,139 -15,208,138,139 15,208,138,139 624,913,714 15,208,138,139 15,833,051,853 624,913,714 15,833,051,853 Actuarial gain on retirement benefit obligation, Actuarial gain on retirement benefit obligation, net of tax net of tax ------155,489,051 - - 155,489,051 - - 155,489,051 - 65,995,383 155,489,051 221,484,434 65,995,383 221,484,434 Fair value gains (losses) on financial assets at fair valueFair value gains (losses) on financial assets at fair value through other comprehensive income through other comprehensive - income ------206,061,206 - - 206,061,206 - - 206,061,206 ( - 84,358,844 ) 206,061,206 121,702,362 ( 84,358,844 ) 121,702,362 Fair value change on cash flow hedge Fair value change on cash flow - hedge ------230,806,189 - - 230,806,189 - - 230,806,189 - - 230,806,189 230,806,189 - 230,806,189 Share in other comprehensive income of associates Share in other comprehensive -income of associates ------13,452,063 - - 13,452,063 - - 13,452,063 - - 13,452,063 13,452,063 - 13,452,063 Exchange difference on translating foreign operations,Exchange difference on translating foreign operations, net of tax net of tax - - - - - 1,667,768 - - 1,667,768 - - - - 1,667,768 - - 1,667,768 1,667,768 - 1,667,768 - - - - - 1,667,768 - 605,808,509 1,667,768 - 605,808,50915,208,138,139 -15,815,614,416 15,208,138,139 606,550,253 15,815,614,416 16,422,164,669 606,550,253 16,422,164,669

Balance at December 31, 2018 Balance at December 31,P 2018 32,430,865,872 P 16,657,990,413 P( P 32,430,865,872 633,721,630 )P( P 16,657,990,413 380,437,530 ( ) P( P 633,721,630 2,705,274,744 ) ( ) P P 380,437,530 10,237,898,577 ) ( P P 2,705,274,744 108,247,570,468 ) P P 10,237,898,577 163,854,891,426 P P 108,247,570,468 24,885,529,107 P P 163,854,891,426 188,740,420,533 P 24,885,529,107 P 188,740,420,533 88 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 89

MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY December 31, 2019, 2018 and 2017 (Amounts in Philippine Pesos) - 3 - - 3 -

Attributable to the Company’s Shareholders Attributable to the Company’s Shareholders Additional Treasury Shares - Additional Translation TreasuryRevaluation Shares - TranslationPerpetual Revaluation Perpetual Non-controlling Interest Non-controlling Interest Capital Stock Paid-in Capital CapitalAt Stock Cost Paid-inReserves Capital At CostReserves ReservesSecurities RetainedReserves Earnings Securities Retained Earnings (See Note 28) (See Note 28) (See(See Note Note 28) 28) (See (SeeNote Note 28) 2) (See(See Notes Note 9,28) 11 and 25) (See(See Note Note 2) 28) (See Notes(See 9, 11Note and 28) 25) (See NoteTotal 28) (See (SeeNote Note 28) 2) TotalTotal Equity (See Note 2) Total Equity

Balance at January 1, 2017 Balance at January 1, 2017P 32,430,865,872 P 16,657,990,413 P ( P 32,430,865,872 633,721,630 )P ( P 16,657,990,413 383,060,040 ( ) P ( P 633,721,630 3,132,722,747 ) ( ) P P 383,060,040 - ) ( P P 3,132,722,747 82,498,074,638 ) P P -127,437,426,506 P P 82,498,074,638 18,149,000,542 P P 127,437,426,506 145,586,427,048 P 18,149,000,542 P 145,586,427,048

Transactions with owners: Transactions with owners: Issuance of shares of stock Issuance of shares of stock ------150,000,000 - 150,000,000 150,000,000 150,000,000 Share-based employee compensation Share-based employee compensation ------12,459,527 - 12,459,527 12,459,527 - 12,459,527 12,459,527 - 12,459,527 Cash dividends Cash dividends ------( - 1,722,155,799 ) ( - 1,722,155,799 ( ) ( 1,722,155,799 12,226,103 ) ( ) ( 1,722,155,799 1,734,381,902 ) ( ) 12,226,103 ) ( 1,734,381,902 ) Share-based employee compensation Share-based employee compensation of a subsidiary of a subsidiary ------10,039,313 - 10,039,313 10,039,313 10,039,313 Acquisition of a new subsidiary with Acquisition of a new subsidiary with non-controlling interest non-controlling interest ------3,466,426,140 - 3,466,426,140 3,466,426,140 3,466,426,140 Changes in ownership interest in subsidiaries Changes in ownership interest in subsidiaries that do not result in a loss of control that do not result in a loss of - control ------189,823,431 - 189,823,431 189,823,431 189,823,431 ------( - 1,709,696,272 ) ( - 1,709,696,272 ( ) 1,709,696,272 3,804,062,781 ) ( 1,709,696,272 2,094,366,509 ) 3,804,062,781 2,094,366,509

Total comprehensive income for the year: Total comprehensive income for the year: Net profit Net profit ------13,145,556,720 - 13,145,556,720 13,145,556,720 561,431,973 13,145,556,720 13,706,988,693 561,431,973 13,706,988,693 Actuarial gain on retirement benefit obligation, Actuarial gain on retirement benefit obligation, net of tax net of tax ------42,787,943 - - 42,787,943 - - 42,787,943 - 10,859,329 42,787,943 53,647,272 10,859,329 53,647,272 Fair value losses on available-for-sale securities Fair value losses on available-for-sale - securities ------685,093,025 - - 685,093,025 - - 685,093,025 - 66,252,556 685,093,025 751,345,581 66,252,556 751,345,581 Realized fair value loss on disposal of available-for-saleRealized securities fair value loss on disposal - of available-for-sale securities ------1,502,090 - - 1,502,090 - - 1,502,090 - - 1,502,090 1,502,090 - 1,502,090 Realized fair value loss on impairment of available-for-saleRealized securities fair value loss on impairment - of available-for-sale - securities - - - - - 1,516,864,986 - - 1,516,864,986 - - 1,516,864,986 - - 1,516,864,986 1,516,864,986 - 1,516,864,986 Fair value change on cash flow hedge Fair value change on cash flow - hedge - - - - - ( - 45,942,879 ) - - ( 45,942,879 - ) ( - 45,942,879 ) - - ( ( 45,942,879 45,942,879 ) ) - ( 45,942,879 ) Share in other comprehensive income of associatesShare in other comprehensive income- of associates ------33,916,495 - - 33,916,495 - - 33,916,495 - - 33,916,495 33,916,495 - 33,916,495 Exchange difference on translating foreign operations,Exchange difference on translating foreign operations, net of tax net of tax - - - - - 954,742 - - -954,742 - - - 954,742 - - 954,742 954,742 - 954,742 - - - - - 954,742 - 2,234,221,660 -954,742 2,234,221,660 13,145,556,720 - 15,380,733,122 13,145,556,720 638,543,858 15,380,733,122 16,019,276,980 638,543,858 16,019,276,980

Balance at December 31, 2017 Balance at December 31,P 2017 32,430,865,872 P 16,657,990,413 P ( P 32,430,865,872 633,721,630 )P ( P 16,657,990,413 382,105,298 ( ) P ( P 633,721,630 898,501,087 ) ( ) P P 382,105,298 - ) ( P P 898,501,087 93,933,935,086 ) P P -141,108,463,356 P P 93,933,935,086 22,591,607,181 P P 141,108,463,356 163,700,070,537 P 22,591,607,181 P 163,700,070,537

See Notes to Consolidated Financial Statements.See Notes to Consolidated Financial Statements. 90 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 91

MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.) CONSOLIDATED STATEMENTS OF MEGAWORLD CORPORATION AND SUBSIDIARIES CASH FLOWS (A Subsidiary of Alliance Global Group, Inc.) December 31, 2019, 2018 and 2017 (AmountsCONSOLIDATED in Philippine STATEMENTS Pesos) OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017 (Amounts in Philippine Pesos) - 2 -

2018 2018 (As Restated – (As Restated – Notes 2019 See Notes 1 and 2) 2017 Notes 2019 See Notes 1 and 2) 2017

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax P 25,377,686,440 P 21,377,414,261 P 17,770,438,855 Balance brought forward P 12,066,043,978 ( P 2,752,292,961 ) ( P 9,414,428,263 ) Adjustments for: Depreciation and amortization 12, 13, 14 2,268,838,880 1,830,763,458 2,718,633,789 CASH FLOWS FROM FINANCING ACTIVITIES Interest income 23 ( 1,631,604,213 ) ( 1,431,964,282 ) ( 1,278,769,124 ) Proceeds from availments of long and short-term liabilities 15, 36 12,500,000,000 18,350,000,000 7,900,000,000 Interest expense 24 1,512,905,580 1,310,255,912 1,555,078,550 Repayments of long and short-term liabilities ( 11,537,252,522 ) ( 8,530,019,684 ) ( 6,152,002,030 ) Unrealized foreign currency losses (gains) - net ( 493,907,863 ) 1,139,460,601 52,528,443 Cash dividends declared and paid 28 ( 2,379,182,809 ) ( 1,912,208,812 ) ( 1,722,155,799 ) Gain on finance lease 13 ( 350,218,385 ) - - Interest paid ( 4,209,271,308 ) ( 3,886,040,313 ) ( 3,693,371,740 ) Gain on sale and dilution of investment in an associate 23 ( 340,809,382 ) - ( 113,069,227 ) Distribution to holders of perpetual securities 28 ( 562,913,000 ) ( 290,336,000 ) - Equity share in net losses (earnings) of associates 11 58,832,233 ( 92,307,595 ) ( 118,829,303 ) Redemption of preferred shares 18 ( 251,597,580 ) ( 251,597,580 ) - Gain on sale of investment property ( 45,781,949 ) - - Cash dividends declared and paid to non-controlling interest ( 68,013,915 ) ( 20,094,507 ) ( 12,226,103 ) Employee share options 25 18,717,409 26,498,873 22,498,840 Advances from associates and other related parties: 27, 36 Dividend income 23, 27 ( 8,464,814 ) ( 21,195,681 ) ( 27,018,574 ) Obtained 32,361,651 366,705,230 229,092,519 Loss on sale of property and equipment 279,902 - - Paid ( 2,941,968 ) ( 12,339,277 ) ( 20,826,593 ) Impairment loss on available-for-sale securities 9 - - 1,516,864,986 Payments of lease liabilities 19, 36 ( 26,338,703 ) - - Operating profit before working capital changes 26,816,268,747 24,577,000,969 21,210,486,904 Proceeds from exercise of stock rights 28 886,528 - - Increase in trade and other receivables ( 7,300,973,342 ) ( 1,741,511,946 ) ( 6,822,373,583 ) Repayments of bonds payable 16 ( 10,425,600,000 ) - Decrease (increase) in contract assets 3,584,275,000 ( 5,871,792,742 ) 2,430,699,999 - Increase in inventories ( 1,395,055,726 ) ( 7,866,421,573 ) ( 6,004,323,574 ) Issuance of bonds payable 16 - 10,237,898,577 11,943,791,282 Increase in advances to contractors and suppliers ( 3,542,558,329 ) ( 1,232,993,107 ) ( 2,026,634,204 ) Increase in prepayments and other current assets ( 244,367,564 ) ( 1,004,567,211 ) ( 1,158,622,445 ) Net Cash From (Used) Financing Activities ( 6,504,263,626 ) 3,626,367,634 8,472,301,536 Decrease in advances to landowners and joint operators ( 148,706,559 ) ( 921,285,309 ) ( 255,044,624 ) Increase in trade and other payables 5,373,481,027 5,865,173,339 3,346,195,497 NET INCREASE (DECREASE) IN CASH AND Increase (decrease) in contract liabilities 396,021,988 1,333,221,951 ( 155,112,252 ) CASH EQUIVALENTS 5,561,780,352 874,074,673 ( 942,126,727 ) Increase (decrease) in customers’ deposits 1,990,581,863 2,894,752,757 ( 3,714,183,346 ) Increase in other liabilities 2,051,184,398 1,673,294,869 538,311,003 BEGINNING BALANCE OF CASH AND CASH Cash generated from operations 27,029,017,263 16,767,672,034 8,877,733,578 EQUIVALENTS OF ACQUIRED SUBSIDIARIES - 238,884,182 976,599,736 Cash paid for income taxes ( 3,647,117,078 ) ( 2,840,943,167 ) ( 2,723,846,893 )

CASH AND CASH EQUIVALENTS Net Cash From Operating Activities 23,381,900,185 13,926,728,867 6,153,886,685 AT BEGINNING OF YEAR 17,543,095,320 16,430,136,465 16,395,663,456

CASH FLOWS FROM INVESTING ACTIVITIES Additions to: CASH AND CASH EQUIVALENTS Investment properties 12 ( 10,390,591,440 ) ( 14,280,652,674 ) ( 14,555,908,612 ) AT END OF YEAR P 23,104,875,672 P 17,543,095,320 P 16,430,136,465 Property and equipment 13 ( 350,116,842 ) ( 653,939,892 ) ( 431,846,440 ) Advances to associates and other related parties: 27 Granted ( 500,635,698 ) ( 189,449,520 ) ( 1,500,167,429 ) Supplemental Information on Non-cash Investing and Financing Activities: Collected 129,918,481 255,926,431 165,564,111 1) In the normal course of business, the Group enters into non-cash transactions such as exchanges or purchases on account of real estate and other assets. Other non-cash transactions include Acquisition and subscription of shares of stock of transfers of property between Inventories, Property and Equipment, and Investment Properties. These non-cash activities are not reflected in the consolidated statements of cash flows (see new subsidiaries and associates ( 1,350,050,000 ) ( 3,097,081,431 ) ( 2,068,977,236 ) Notes 7, 12 and 13). Interest received 1,296,340,364 1,411,000,154 1,022,351,679 Proceeds from sale of investments in an associate 2) In 2019, the Group recognized right-of-use assets and lease liabilities amounting to P594.03 million and P662.78 million, respectively (see Notes 13 and 19). and subsidiaries 11 1,017,844,908 - 297,454,675 Increase in other non-current assets ( 202,306,675 ) ( 36,271,411 ) ( 75,519,218 ) Proceeds from sale of investment property 12 23,562,500 187,391,998 20,519,223 See Notes to Consolidated Financial Statements. Dividends received 8,464,814 21,195,681 27,018,574 Proceeds from sale of property and equipment 13 1,245,112 13,045,014 11,899,989 Proceeds from issuance of capital stock of subsidiary - 1,000,000 150,000,000 Proceeds from sale of available-for-sale securities 9 - - 65,990,227 Acquisition of available-for-sale securities 9 - - ( 7,412,400 )

Net Cash Used in Investing Activities ( 11,315,856,207 ) ( 16,679,021,828 ) ( 15,568,314,948 )

Balance carried forward P 12,066,043,978 ( P 2,752,292,961 ) ( P 9,414,428,263 ) 92 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 93

MEGAWORLD CORPORATION AND SUBSIDIARIES (A Subsidiary of Alliance Global Group, Inc.)  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   December 31, 2019, 2018 and 2017 (Amounts in Philippine Pesos)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           94 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 95

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 96 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 97

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                             98 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 99

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          100 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 101

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            102 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 103

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                               104 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 105

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        106 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 107

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                    108 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 109

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                   

                                                                                                                                                                                                110 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 111

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                              112 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 113

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                      114 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 115

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                           116 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 117

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                              118 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 119

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                      120 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 121

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                   122 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 123

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                             124 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 125

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                            126 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 127

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                             128 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 129

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                         130 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 131

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                  132 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 133

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                             134 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 135

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                              136 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 137

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                    138 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 139

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 140 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 141

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               142 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 143

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      144 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 145

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                               146 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 147

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                     

                                            148 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 149

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    150 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 151

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   152 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 153

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                154 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 155

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                  156 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 157

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                             158 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 159

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                               160 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 161

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                 162 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 163

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       164 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 165

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     166 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 167

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   168 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 169

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                170 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 171

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                      172 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 173

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        174 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 175

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

 176 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 177

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 178 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 179

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                       180 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 181

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          182 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 183

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                        184 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 185

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             186 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 187

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          188 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 189

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                 190 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 191

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                          192 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 193

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                194 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 195

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                         196 MEGAWORLD CORPORATION 2019 ANNUAL REPORT 197

NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS  

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                        198 MEGAWORLD CORPORATION  2019 ANNUAL REPORT 199              NOTES TO CONSOLIDATED FINANCIAL  STATEMENTS                                                                                                                                                                                                                                             

                   200 MEGAWORLD CORPORATION

CORPORATE INFORMATION

MEGAWORLD CORPORATION

30th Floor Alliance Global Tower, 36th Street corner 11th Avenue, Uptown Bonifacio, Taguig City

Corporate Website www.megaworldcorp.com

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STAKEHOLDER INQUIRIES

For inquiries or concerns from analysts, institutional investors, the financial community, customers, and the general public, please contact:

Customer Service: (632) 905-2800 loc. 1711-1713 [email protected]

Investor Relations: [email protected]

SHAREHOLDER SERVICES AND ASSISTANCE

For inquiries regarding dividend payments, change of address and account status, lost or damaged stock certificates, please contact:

BDO Stock Transfer Unibank, Inc. 15th Floor South Tower, BDO Corporate Center, 7899 Makati Avenue, Makati City Tel (632) 878-4053 30th Floor Alliance Global Tower, 36th Street corner 11th Avenue, Uptown Bonifacio, Taguig City

www.megaworldcorp.com