COVER SHEET for AUDITED FINANCIAL STATEMENTS SEC Registration Number 184044 C O M P A N Y N A M E J G SUMMIT HOLDINGS , INC. AND S UBSIDIARIES PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province ) 4 3 r d Fl o o r , Rob i n s o n s - E q u i t a b l e Towe r , ADB Av enue corner Pov eda Road , Pas i g Ci t y Form Type Department requiring the report Secondary License Type, If Applicable 17- A N/ A C O M P A N Y I N F O R M A T I O N Company’s Email Address Company’s Telephone Number Mobile Number www.jgsummit.com.ph 633-7631 - No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day) 1,017 2nd Thursday of June 12/31 CONTACT PERSON INFORMATION The designated contact person MUST be an Officer of the Corporation Name of Contact Person Email Address Telephone Number/s Mobile Number Francisco M. Del Mundo [email protected] 633-7631 CONTACT PERSON’s ADDRESS 41st Floor, Robinsons-Equitable Tower, ADB Avenue corner Poveda Road, Pasig City NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated. 2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies. *SGVFS035903* SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended December 31, 2018 2. SEC Identification Number 184044 3. BIR Tax Identification No.000-775-860 4. Exact name of registrant as specified in its charter JG Summit Holdings, Inc. 5. Pasig City, Philippines 6. (SEC Use Only) Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization 7. 43rd Floor, Robinsons-Equitable Tower, ADB Ave. corner Poveda Road, Pasig City 1600 Address of principal office Postal Code 8. (632) 633-7631 Registrant's telephone number, including area code 9. Not Applicable Former name, former address, and former fiscal year, if changed since last report. 10. Securities registered pursuant to Sections 8 and 12 of the RSC, or Sec. 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Common Stock 7,162,841,657 Long-term Debt 30,000,000,000 11. Are any or all of these securities listed on a Stock Exchange. Yes [ / ] No [ ] If yes, state the name of such stock exchange and the classes of securities listed herein: Philippine Stock Exchange (PSE) Common Stock 12. Check whether the registrant: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); Yes [ / ] No [ ] -1- (b) has been subject to such filing requirements for the past 90 days. Yes [ / ] No [ ] 13. State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided the assumptions are set forth in this Form. (See definition of "affiliate" in “Annex B”). The aggregate market value of stocks held by non-affiliates is P=371,672,205,743. -2- TABLE OF CONTENTS Page No. PART I - BUSINESS AND GENERAL INFORMATION Item 1 Business............................................................................................. 4 Item 2 Properties........................................................................................... 40 Item 3 Legal Proceedings.............................................................................. 43 Item 4 Submission of Matters to a Vote of Security Holders.......................... 43 PART II - OPERATIONAL AND FINANCIAL INFORMATION Item 5 Market for Registrant’s Common Equity and Related Stockholder Matters............................................................... 44 Item 6 Management’s Discussion and Analysis or Plan of Operation............ 46 Item 7 Financial Statements........................................................................... 70 Item 8 Information on Independent Accountant and other Related Matters...................................................... 70 PART III - CONTROL AND COMPENSATION INFORMATION Item 9 Directors and Executive Officers of Registrant.................................. 71 Item 10 Executive Compensation................................................................... 79 Item 11 Security Ownership of Certain Record and Beneficial Owners and Management....................................................... 80 Item 12 Certain Relationships and Related Transactions............................... 82 PART IV - CORPORATE GOVERNANCE Item 13 Corporate Governance...................................................................... 83 PART V - EXHIBITS AND SCHEDULES Item 14 Exhibits and Reports on SEC Form 17-C........................................... 83 SIGNATURES.................................................................................................... 84 INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES -3- PART I - BUSINESS AND GENERAL INFORMATION Item 1. Description of Business (A) Business Development JG Summit Holdings, Inc. (JG Summit / the Company), which is controlled by the Gokongwei Family, was incorporated in November 1990 as the holding company for a group of companies with substantial business interests in foods, agro-industrial and commodities, real estate and hotel, air transportation, banking and petrochemicals. The Company also has core investments in telecommunications and power generation and distribution. The Company is one of the largest and most diversified conglomerates within the Philippines. The Company was listed on the PSE in 1993. The Company and its subsidiaries (the Group), conduct businesses throughout the Philippines, but primarily in and around Metro Manila (where it is based) and in the regions of Luzon, Visayas and Mindanao. The Group also has a branded consumer foods business in the People’s Republic of China (PRC), ASEAN and Oceania (New Zealand and Australia) regions, and a core investment in a property development company in Singapore. The Company has not been into any bankruptcy, receivership or similar proceedings for the past two years. The Gokongwei Family beneficially owns approximately 18.2% of the outstanding share capital of the Company. In addition, certain members of the Gokongwei Family are trustees of the Gokongwei Brothers Foundation, which holds interest in approximately 27.9% of the existing outstanding share capital of the Company. -4- (B) Business of Issuer The industry segments where the Company and its subsidiaries and affiliates operate are summarized below: Cebu Air, Inc. (67.6%) Universal Robina JG Summit Olefins Corporation and Corp. (100%) Subsidiaries (55.3%) CP Air Holdings, Inc. JG Summit Petrochemical and Subsidiaries Corp. (100%) (100%) Foods, Agro-Industrial & Commodities Petrochemicals Air Transportation JG Summit Holdings, Inc. Real Estate and Hotels Banks Core Investments Supplementary Businesses Philippine Long Robinsons Bank JG Summit (Cayman), Distance Telephone Corporation Ltd. (100%) Co. (8.0%) Robinsons Land (60%) Corporation and Subsidiaries (61.0%) JG Summit Capital Manila Electric Services Corporation Company and Subsidiaries (100%) Legazpi Savings Bank (29.6%) (100%) Express Holdings, Inc. Global Business and Subsidiaries (100%) Power Corporation (100%) (30.0%) JG Summit Philippines United Industrial Corporation Ltd. Ltd. and Subsidiaries (37.0%) (100%) Unicon Insurance Brokers Corporation (100%) Batangas Agro-Industrial Development Corp. and Subsidiaries (100%) JG Summit Infrastructure Holdings Corporation (100%) Merbau Corporation (100%) -5- The following table shows the breakdown of the Company’s revenues and net profits from continuing operations by business areas (in millions except % amounts): REVENUES Net Income attributable to Parent Co. 2018 2017 2016 2018 2017 2016 Peso % Peso % Peso % Peso % Peso % Peso % Food, Agro-Industrial and Commodity Food Products 127,670 44 124,740 47 112,458 47 5,086 27 6,016 66 7,172 66 Air Transportation 74,250 25 68,169 26 62,078 26 2,653 14 5,317 60 6,558 60 Petrochemicals 43,776 15 42,597 12 29,960 12 1,054 5 5,991 47 5,126 47 Real estate and hotels 32,758 11 26,269 11 25,578 11 8,249 43 7,338 58 6,295 58 Banks 6,144 2 4,489 1 3,419 1 191 1 184 1 154 1 Other Supplementary Businesses 8,827 3 8,455 3 7,941 3 2,358 12 4,582 (131) (14,321) (131) Adjustments/eliminations (1,509) – (1,274) – (931) – (405) (2) (58) (1) (66) (1) Total from