Let's build for tomorrow's generations 2014 Annual and Sustainability Report This is why we are looking closely at our environmental, social and economic impacts today. Our performance and how we improve it will define our developments and how we create significant value for our business and for society − inclusive of tomorrow's generations. 4 Table of Contents Envision. Deliver. 010. 2014 Performance at a Glance 012. Joint Message from the Chairman and the President 022. Message from the Chief Finance Ofcer Build To Last. 033. Who We Are: Vision/Mission and Core Values 034. Ownership Structure/Membership in Associations/Awards and Recognitions 2014 035. Subsidiaries and Afliates 036. Business Review 120. Measure and Track Progress: Improving our Efciencies Take Responsibility. Environmental Health and Safety Policy 069. Corporate Governance Climate Change Policy 070. Governance Structure 074. Board of Directors 148. Take Action: Engaging our Employees 078. Board Committees Employee Engagement Drivers 092. Enterprise-Wide Risk Management 160. Exceed Expectations: Understanding Our Customers Quality Policy Inspire Positive Change. Customer Satisfaction Ratings 105. Our Sustainability Story Customer Feedback: 24/7 Helpline and 107. Sustainability Policy Text Feedback Hotline 108. Sustainability Framework PWD Awareness 109. Materiality Process 110. Sustainability Structure 170. Build Capacity: Empowering Our Communities 111. Material Aspects Community Development Programs 112. Stakeholder Engagement Catalyze Economic Development: 118. Sustainability Performance at a Glance Contributing to Society Significant Indirect Economic Impacts 182. Influence. Set Sandards: Supply Chain Management Value Delivery Chain 186. Appendices 210. GRI Content Index 214. ASEAN Corporate Governance Scorecard Index Keep The Balance. 216. Financial Statements 5 About this Report Scope and Coverage Data References and Assurance Our 2014 Annual and Sustainability Report covers The references of each sector performance the business operations and activities of Cebu are taken from the following documents Holdings, Inc. (CHI) in Cebu, Philippines including or guidelines: its subsidiaries and afliates for the calendar year Economic Performance 2014. G4-3, G4-5, G4-6, G4-28, G4-30 • Audited financial statements conforming with The scope of our environmental data was generally accepted accounting principles in the expanded. Data for 2013 was updated Philippines, and accordingly for alignment. G4-22 • Internally-generated reports consolidated from Finance, Commercial Business Group and Purpose of Report Corporate Communication and CSR Division detailing our community investments for this This Report is a valuable opportunity for us reporting period. to assess and improve on our economic, environmental and social performance. Environmental Performance This has been designed to provide our • Energy and water consumption from meter stakeholders with relevant information about our readings by utility companies we subscribe to; Company’s annual financial and sustainability • Actual volume or weight of materials used as initiatives, programs and progress. This was shown in the records of our general contractor; developed using the Global Reporting Initiative (GRI) G4 reporting framework which we • Diesel consumption (generating sets) are from pioneered in the country in 2014. characteristic fuel consumption given by the manufacturer; Included here are Construction and Real Estate • Greenhouse gas (GHG) emissions from Sector disclosures. This report successfully direct energy; Computations derived using completed GRI’s Materiality Disclosures Service. the GHG Protocol Corporate Standard and See pages 211 to 214 for further information. Intergovernmental Panel for Climate Change (IPCC) Reporting Guidelines; and • Emission factor for the indirect energy consumption is based on National Grid Emission Factors by the Department of Energy (DOE). 6 Social Performance companies (PLCs). It helps us benchmark against international best corporate governance • Internally-generated reports on our labor practices by publicly-listed companies and and humtan rights aspects, health and safety, encourages us to go beyond our national product responsibility, and community legislative requirements. See pages 214 for the development programs. ACGS Index. • We benchmarked with Corporate Knights The data assurance for non-financial data is Capital’s 2015 Global 100 Index. This listing conducted through the Company’s annual audits is a ranking of the world's most sustainable on Quality, Environmental, Occupational Health corporations using 12 key performance and Safety Management Systems (QEHS MS), indicators. It allows us greater transparency and which are held annually by our internal audit a means to quantitatively compare to best in and external certifying body. In between these class global corporate practices. G4-15, G4-32 reviews, we also conduct data assurance through our own Sustainability Technical Working Group (STWG) assessments. G4-33 Additional Reference Reporting Standards G4-15 The Company’s operational and financial performance filed with the Securities and This report conforms to: Exchange Commission (SEC) is reflected in the Information Statement sent to stockholders and • The Global Reporting Initiative Guidelines 4 is available at www.cebuholdings.com. (GRI-G4) for the non-financial performance of the Company under ‘Core” option. This year Feedback/Contact Information we report on 56 General Standard Disclosures, 39 Material Aspects and 53 Specific Standard For questions, comments and Disclosures (52 GRI and 1 CHI). See pages 210 suggestions, you may email us at to 212 for the GRI Content Index. [email protected]. G4-31 • We have also identified six sector-specific indicators following GRI’s G4 Sector Disclosures for Construction and Real Estate. • Our Report also adopts the ASEAN Corporate Governance Scorecard (ACGS) recommendations for ASEAN publicly-listed 7 01. Envision. Deliver. Twenty six years ago, Cebu Holdings, Inc. (CHI) laid the groundwork for land development in Cebu. It all started with a big vision. With world class master-planning of large-scale, integrated mixed-use developments, we have helped change the economic and physical landscape of Cebu. As we expand to new geographies and reach a broader market, we continue to deliver our promise—that of fulflling our share in making Cebu the center of business, IT / BPO and tourism in the region. Let's build for tomorrow's generations 2014 Performance Highlights We measure our impacts to the local economy and the society where we are present. As we continue to operate responsibly, we strive to balance our performance across all three criteria against our business objectives and long term goals. This section presents a quick reference on CHI's triple bottom line performance for the year 2014. OPERATIONAL RETAIL SPACE LEASING OFFICE SPACE LEASING >> Ayala Center Cebu >> eBloc Towers and The Walk 95% average occupancy 61 sqm gross thousand 129thousand leasable area sqm gross leasable area average 95% lease out rate RESIDENTIAL >> Cebu Business Park ESTATES and Cebu I.T. Park CONDOMINIUMS thousand number of sqm residential total772 gross floor area 924 units sold 87.5% expected GFA increase 1,559number of units in five years (2019) launched (owned by CHI and ALI) sqm total 308,758 under construction 10 Let’s Build for Tomorrow's Generations ECONOMIC growth in AAA billion total assets PRS Credit P2 27% gross revenues reaching P16.4 billion Rating current 1.63:1 ratio P531 million commercial net income after tax debt-to-equity 1.23:1 ratio P2 billion capital expenditure ENVIRONMENT increase 82species 28% in volume 3,972 existing trees nurtured of recyclables at Cebu Park equivalent to kgs District and 405,312 Amara SOCIAL rendered a total of out of 10 3,353 total 8.7 training hours provided internal volunteer541 hours customer satisfaction 79% rating employee participation out of 10 average training hours per employee ZERO 8.5 lost time external from work accidents customer and injuries in satisfaction 39 09 00 construction project HRS MINS SECS sites and in CHI ofces rating CHI 2014 Annual and Sustainability Report 11 JOINT MESSAGE FROM THE CHAIRMAN AND THE PRESIDENT G4-1, G4-2 Cebu Holdings, Inc. (CHI) is proud to consider itself as a major partner in building Cebu. Since the late eighties, it has worked to unlock the value of land in Cebu Park District, an integrated mixed-use development comprised of Cebu Business Park, and subsidiary Cebu Property Ventures and Development Corporation’s (CPVDC’s) Cebu I.T. Park. Twenty six years ago, when Ayala Land was looking for a next estate to develop into a central business district after Makati, Cebu was the top choice. The city showed promise as an ideal location where Ayala Land’s afliate company, CHI, could set the stage for even further growth. Since the late eighties, CHI has worked to unlock the value of land in Cebu Park District, an integrated mixed- use development comprised of Cebu Business Park, and subsidiary CPVDC’s Cebu I.T. Park. Bernard Vincent O. Dy 12 Let’s Build for Tomorrow's Generations The year 2014 was another record year as we exceeded financial targets. The year ended with P2.3 billion in consolidated revenues and a net income of P530.9 million, the highest Aniceto V. Bisnar, Jr. ever for the Company. In planting the seeds of progress many Building strong foundations years ago, both CHI and Cebu are reaping the rewards. Last year, Cebu City The