RE-ENERGIZED
PHINMA ENERGY CORPORATION
2016 Annual Report
“We should always pursue our business with
honor and never waver in our commitment to
the principles of professionalism, integrity, and
patriotism.”
- Amb. Ramon V. del Rosario, Sr.
Founder, PHINMA
Tableof
CONTENTS
01
02
04
06
12
14
18
20
22
26
32
38
40
Vision, Mission and Corporate Values
Financial Highlights
Where We Operate
Message to Shareholders
Operations Review
Rebranding
Customer Focus
Strategic Partnerships
Business Pillars
Corporate Social Responsibility
Corporate Governance
Board of Directors
Management Committee
Corporate Information
VISION
MISSION
To be the investment and electricity supply partner of choice
Leveraging our reputation on a culture of excellence.
CORPORATE
Integrity
•
•
•
•
We conduct ourselves in an honest,
ethical, and transparent manner.
We always seek to do what is right,
even in the face of adversity and
uncertainty.
We do not tolerate fraud in all its
forms, including corruption, bribery,
and abuse.
We do what we say we will do and
we accept full responsibility for our
decisions and actions.
•
Providing reliable, competitive and
customer-focused electricity services;
•
Utilizing indigenous energy resources
and clean energy technologies;
•
Helping build the nation through
innovative, well-managed enterprises;
•
Anchored on the ideals of integrity,
professionalism, and patriotism.
VALUES
Professionalism
•
•
We deliver the results expected
of us by understanding and giving
importance to the requirements of our
customers and stakeholders
We foster a positive work environment
by treating everyone with utmost
respect and welcoming different view
points that allow us to create better
ideas, products, and services.
Patriotism
We proudly express our love for the Philippines through active participation in
Nation-building, respect for and adherence to its laws and regulations, commitment
to protect the environment, and an unflinching belief in the skill, spirit, and resiliency
of Filipinos as a people and as world-class professionals.
2016 ANNUAL REPORT | 1
Consolidated
Financial
Highlights
2014
2015
2016
Current Ratio
2.16:1
1.89:1
1.92:1
Acid Test Ratio
1.68:1
1.47:1
1.62:1
Debt/Equity Ratio
1.30:1
1.34:1
1.29:1
Asset-to-Equity Ratio
2.30:1
2.34:1
2.29:1
Interest Rate Coverage Ratio
2.83:1
3.48:1
4.08:1
Net Debt to Equity Ratio
1.17:1
1.18:1
0.91:1
Return on Equity
2.51%
11.93%
16.30%
Return on Assets
1.31%
5.14%
7.04%
Asset Turnover
77.98%
76.50%
78.86%
NET INCOME
TOTAL REVENUE
(In Million Pesos)
(In Million Pesos)
15,478
1,382.5
13,470
10,753
905.8
180.4
2014
2015
2 | PHINMA ENERGY CORPORATION
2016
2014
2015
2016
| CONSOLIDATED FINANCIAL HIGHLIGHTS
TOTAL ASSETS
(In Million Pesos)
TOTAL LIABILITIES
(In Million Pesos)
20,628
18,626
16,591
2014
2016
2015
11,626
10,666
9,369
TOTAL EQUITY
(In Million Pesos)
2014
2015
2016
EARNINGS PER SHARE
(In Philippine Pesos)
0.29
9,002
7,960
7,222
0.19
0.04
2014
2015
2016
2014
2015
2016
2016 ANNUAL REPORT | 3
AT A GLANCE
WHERE WE
OPERATE
4 | PHINMA ENERGY CORPORATION
1. TRANS-ASIA POWER GENERATION CORPORATION (TAPGC)
- Norzagaray, Bulacan (wholly owned subsidiary)
2. CIP II POWER CORPORATION (CIPP)
- Bacnotan, La Union (wholly owned subsidiary)
3. Guimaras Power Plant (GPP)
- Guimaras Island, Panay (power plant owned by PHINMA Energy
Corporation)
4. SOUTH LUZON THERMAL ENERGY CORPORATION (SLTEC)
- Calaca, Batangas (Joint venture with AC Energy Holdings and
Axia Power Holdings Philippines Inc.)
5. MAIBARARA GEOTHERMAL, INC. (MGI)
- Sto. Tomas, Batangas (Joint venture with PetroGreen Energy
Corporation & PNOC)
6. ONE SUBIC POWER GENERATION CORPORATION
- Subic Bay Freeport Zone, Olongapo (wholly owned subsidiary)
7. POWER BARGES 101 & 102
-Barrio Obrero, Iloilo City (owned by PHINMA Energy)
8. POWER BARGE 103
-Poblacion, Lapu-Lapu City (owned by PHINMA Energy)
1. WESC 2009-10-009
-San Lorenzo, Guimaras
2. WESC 2009-10-010
Sibunag, Guimaras
3. WESC 2009-10-011
- Nueva Valencia, Guimaras
4. WESC 2009-10-013
- Abulog-Ballesteros-Aparri, Cagayan
5. WESC 2009-10-014
- Aparri-Camalaniugan-Buguey, Cagayan
6. WESC 2010-02-024
- Paracale-Visons, Camarines Norte
7. WESC 2010-02-030
- Calauag, Quezon
8. WESC 2010-02-032
- Dumangas, Iloilo
1. SC 6, Block A
2. SC 6, Block B
3. SC 51
4. SC 55
5. SC 69
6. Interests in SC 50 & 52
2016 ANNUAL REPORT | 5
MESSAGE TO SHAREHOLDERS
RE-ENERGIZED
to serve
We attribute the
success of your
Company to the
continuous and
efficient operations
of our successfully
completed power
projects and we
look forward to the
significant expansion
of our market
share within the
competitive retail
electricity market.
6 | PHINMA ENERGY CORPORATION
you
Dear Fellow Shareholders,
Embracing the name of our parent company on
its 60th anniversary, we became PHINMA Energy
Corporation while remaining steadfast to our core
values of Integrity, Professionalism, and Patriotism,
which have anchored the Company you knew as
Trans-Asia Oil & Energy Development Corporation.
The re-energized brand of the Company complements
our performance: 2016 was a milestone year as we
ended the year strong with P1.38 Billion Pesos in Net
Income, a 53% increase from P905.85 Million in Net
Income in the previous year.
We attribute the success of your Company to
the continuous and efficient operations of our
successfully completed power projects. Your
Company enjoyed contributions from its own
power plants, with energy sales from: TransAsia Power Generation Corporation (TAPGC 52
MW) of 36 GWh, One Subic Power Generation
Corporation (OSPGC 116 MW) of 86 GWh, CIP II
Power Corporation (CIPP 21 MW) of 21 GWh, and
your Company’s Guimaras Power Plant (GPP 3.4
MW) of 6.10 GWh. After successful takeover from
2016 ANNUAL REPORT | 7
the Power Sector Assets and Liabilities Management
Corporation (PSALM) last year, your Company
commenced commercial operations of Power Barges
101 and 102, located in Barrio Obrero, Iloilo. Power
Barge 101 (PB 101 32 MW) achieved energy sales of
7.19 GWh, while Power Barge 102 (PB 102 32 MW)
contributed 13.66 GWh in total sales for the year.
Power Barge 103 (PB 103 32 MW) is moored in Cebu
and is expected to come online within the year.
In 2016, your Company ended the year with P15.47
Billion in Revenues from Electricity Sales, up 15% from
P13.47 Billion in the previous year. Total Energy Sales
Volume at year end was 2,947 GWh, which was a 33%
jump from 2,216 GWh last year.
During the course of the year, PHINMA Energy
continued to serve its valued customers with a total
peak supply requirement of 370 MW. Our industrial
customers include the likes of Lafarge Holcim
Philippines, Philippine Economic Zone Authority’s
(PEZA’s) Cavite Economic Zone, Republic Cement
and Construction Materials Inc. of the CRH-Aboitiz
group, Direct Power Services Inc. of the Ayala group,
Manila Water Company, Inc. and Universal Robina
Corporation. Your Company also delivered the energy
requirements of ten electric cooperatives, including
Quezon II Electric Cooperative Inc. (QUEZELCO II),
Batangas I Electric Cooperative (BATELEC I), Guimaras
Electric Cooperative (GUIMELCO), as well as seven
other electric cooperatives from Region 8.
8 | PHINMA ENERGY CORPORATION
Aligned with the energy industry’s move to promote
customer choice through the competitive retail market,
your Company made headwinds in gaining additional
contracts with contestable customers.
In 2016, your Company paved the way for the
expansion of its retail electricity business as a
licensed Retail Electricity Supplier (RES). Among the
first to switch to PHINMA Energy as their RES were
Mondelez International, American Wire & Cable Co.,
Asian Transmission Corporation, Steel Corporation of
the Philippines, and Tailin Abrasives Corporation. By
year-end, your Company was able to secure customer
commitment for an additional load of around 120 MW.
PHINMA Energy ended the year as the 2nd largest
single retail electricity supplier with a market share of
12.02%, according to ERC’s Statistical Report for the
month of January 2017.
By March 2017, your Company was able to switch
customers with a total load of over 100 MW.
PHINMA Energy became the preferred supplier of
La Salle Greenhills and De La Salle-College of St.
Benilde, University of Santo Tomas, Robinsons Land
Corporation, Metro Retail Stores of the Gaisano group,
PureGold, Waltermart, the Masterpiece Asia and
Manuela Corporation of the Villar Group of Companies.
In the past five years, your Company was able to
execute capital expansionary projects, boosting our
supply capacity to 639.4 MW, with the bulk of our own
capacity coming in within the last two years. Aside
from sourcing from our own generation portfolio as
well as the spot market, your Company also sourced
electricity from contracted capacities of other
power generators. IPPA contracts with Unified Leyte
Geothermal Power Plant and KEPCO SPC Power
Corporation ensure delivery of supply and reliable
services for our valued customers.
| MESSAGE TO SHAREHOLDERS
Your Company’s investments in select joint ventures
has greatly contributed to our year-end bottom
line. The 2x135MW South Luzon Thermal Energy
Corporation (SLTEC) circulating fluidized bed coal
plant facility in Calaca, Batangas, earned P1.7 Billion
in Net Income from the efficient operations and plant
maintenance of its two units. Electricity generated
and sold amounted to 1551 GWh. SLTEC management
is committed to deliver continuous and efficient
baseload supply utilizing clean coal.
PHINMA Energy also recognized income in 2016 from
the sale of a minority stake in SLTEC to Axia Power
Holdings Philippines Corporation, a unit of the Marubeni
Group. In December, PHINMA and Ayala announced the
sale of a 5% and 15% stake, respectively, in SLTEC to the
Marubeni unit. The investment in SLTEC validates the
confidence of the partners in PHINMA Energy’s power
plant management capabilities, and also paves the way
for the partners to jointly examine power projects in the
future. Your Company will continue to have full control
of the energy output of the two plants for its energy
supply business.
We continue to develop our renewable energy
business which began with the successful development
and completion of our 54-MW Trans-Asia Renewable
Energy Corporation or TAREC’s San Lorenzo Wind
Farm. During the year, TAREC was able to deliver
96.7 GWh of energy to the grid and contributed P715.4
Million in Revenues from the sale of renewable
energy. Moving forward, your Company continues to
own and develop service contracts for wind energy
development around the country with around 400 MW
in potential resource.
PHINMA Energy
ended the year
as the 2nd largest
single electricity
supplier with a
market share of
12.02%, according
to the ERC’s
Statistical Report
for the month of
January 2017.
Your Company owns a twenty-five percent investment
stake in the 20-MW Maibarara Geothermal Inc. (MGI)
geothermal power plant in Sto. Tomas Batangas, cited
by Singapore based Asian Power Magazine as Asia’s
2016 Geothermal Power Project of the Year. Your
Company’s investment in MGI brought in P35 Million
in Net Income from a full year of operations, with
expansion activities for an additional 12 MW underway.
The full MGI expansion is expected to come online by
the third quarter of 2017, bringing up the total plant
capacity to 32 MW.
2016 ANNUAL REPORT | 9
To continue its foray into geothermal energy, PHINMA
Energy joined Basic Energy Corporation in drilling
an exploratory well at Mabini Geothermal Service
Contract Number 8 located in San Teodoro, Mabini,
Batangas, eventually reaching the target depth of
1,679 meters. After completing the drilling work,
the two partners are conducting tests aimed at
determining the geothermal resource in the field. Prior
initial pre-feasibility studies have projected the area
to yield a resource of between 20 to 60 MW. PHINMA
Energy has a 25% stake in the service contract.
As we began with upstream and energy resource
development, your Company, through its subsidiary,
Trans-Asia Petroleum Corporation, continues
to explore potential areas for energy resource
exploration and development, both locally and
abroad. Despite the downturn in global oil prices and
futures, your Company looks at long-term demand
and prospects to support its operations and project
evaluation studies.
Moving forward, Trans-Asia Petroleum Corporation will
include the exploration of petroleum and natural gas
resources, as well as the exploration and development
of geothermal resources, further rebranding itself as
PHINMA Petroleum and Geothermal Incorporated.
As we have become PHINMA Energy Corporation,
we remain committed to deliver the highest levels of
professionalism and service excellence to you, our
valued shareholders.
As of December 31, 2016, your Company has 292
employees with 84 employees in the Makati head
office, 14 in Guimaras Power Plant, 25 in CIP II Power
in La Union, 33 in Trans-Asia Power Generation Corp. in
Bulacan, 69 in Power Barges 101-103, 49 in One Subic
Power Generation and 18 in Trans-Asia Renewable
Energy Corp. in Guimaras.
With our human capital at the core of our success, your
Company is taking purposeful strides to ensure that
corporate expansion plans are actively supported by
professional and career development programs . Aside
from this, we also support employee-driven interests
for fellowship and personal growth.
10 | PHINMA ENERGY CORPORATION
| MESSAGE TO SHAREHOLDERS
Aside from energy literacy and environmental
protection, PHINMA Energy is committed to
empowering our partners through grassroots
development. To date, your Company has organized 12
active livelihood groups in host communities. Our pilot
livelihood project in Bacnotan, La Union, Quirino’s Best,
has progressed from food processing to food service,
increasing their sales in 2016 by 108%. We also put up
the San Lorenzo Pasalubong and Livelihood Center in
Guimaras to be the hub for social empowerment.
Your Company continues to promote ethical and
professional business practices throughout the entire
value chain of the business through its Integrity
Assurance Program, with all PHINMA companies
as signatories of the Integrity Initiative. This is your
Company’s continuing manifestation of integrity and
good governance. We are likewise committed to safe
practices through the continuous improvement of
our Business Resiliency Program and enterprise risk
management systems.
Your Company further undertakes to continuously
develop a robust technology platform to support
its trajectory of growth, by introducing advanced
systems to provide greater efficiencies in such areas
as procurement, plant maintenance, operations, and
customer support.
Corporate Social Responsibility has always been at the
core of our business. As of 2016, your Company has
supported a total of 33 schools and more than 10,000
students through our Harnessing Energy Literacy for
Planet Earth (HELP Earth) Education programs in our
host communities. We have formed new partnerships
for environment protection: aside from the 5-hectare
Mt. Tipo Reforestation Project with SBMA, we have the
50-hectare Bininit Reforestation Project in Norzagaray,
Bulacan, and the 27-hectare Arboretum Project in
Sibunag, Guimaras. As of 2016, your Company has
planted a total of 13,000 indigenous species, with an
85% survival rate.
At PHINMA Energy, we embarked on and completed
our key power projects over the last five years, and
we are now reaping the benefits from purposefully
deployed capital investments.
We have established ourselves as a significant player
in the retail electricity market, and will continue to
expand our customer base as the foundation for our
expansion of power generation capacity through
viable projects founded on growing demand. We
will continue to pursue opportunities to explore
underdeveloped areas of the energy business, moving
closer to our goal of energy self-reliance.
We would like to take this opportunity to THANK YOU,
our beloved shareholders, for your steadfast support
and confidence in your Company and its management
team. We commit to seize new opportunities in an
ever changing market through innovative solutions
while remaining diligent and disciplined, the same core
values that brought us here.
At PHINMA Energy, we are re-energized to serve you as
we Make Lives Better.
OSCAR JJ. HILADO
Chairman
FRANCISCO
FRAN
ANC
AN
CISC
CO L. VIRAY, Ph.
P D.
President
Executive Officer
Presid
dent and Chief Ex
2016 ANNUAL REPORT | 11
Trans-Asia Oil and Energy Development
Corporation is renamed PHINMA Energy
Corporation
During our shareholders meeting held last April
12, 2016, Trans-Asia Oil and Energy Development
Corporation secured majority shareholder approval
to rename itself PHINMA Energy Corporation. Your
Company received approval to implement its change
in name from the Securities and Exchange Commission
(SEC) on August 22, 2016. According to PHINMA
management, this move captures the essence of what
we are trying to do in the PHINMA Group. Through
PHINMA Energy Corporation, we hope to make lives
better and provide a brighter future for generations of
Filipinos to come.
RE-ENERGIZING
As Trans-Asia embraced the name of its Parent to
become PHINMA Energy Corporation, it was invigorated
with resolve to capture a significant share of the
retail electricity market through customizable and
competitive power solutions, serving a greater number
of energy end-users with a customer-centric approach.
The re-energized brand of the company combines
PHINMA’s impeccable reputation of integrity with the
commercial success of Trans-Asia. PHINMA Energy
Corporation is committed to promoting clean and
responsible power generation and empowering our host
communities as our contribution to nation building.
As we consider growing demand requirements in an
increasingly competitive environment, your Company
shall continue to expand its energy generation portfolio
by making purposeful investments in strategic power
projects, in order to develop and diversify a sustainable
mix of reliable and cost-efficient energy sources.
PHINMA ENERGY
12 | PHINMA ENERGY CORPORATION
OPERATIONS REPORT | REBRANDING STORY
PHINMA Energy changes its ticker symbol
from “TA” to “PHEN”
The PHINMA ENERGY Swirl represents our
re-energized brand
Throughout its 47 years of existence, PHINMA Energy
has evolved and grown into a bigger and brighter
company, serving the energy needs of our fellow
countrymen.
The PHINMA Energy SWIRL represents the dynamic
nature of the energy industry.
In line with the re-energizing of PHINMA Energy, your
Company adopted the ticker symbol “PHEN” effective
September 2, 2016, upon completion and effectivity
of the change in PSE’s system to reflect the company’s
new name and ticker. Moving forward, your Company
will bear this symbol representing both its parent
company as well as the industry wherein it belongs:
PH represents its parent, PHINMA, while
EN represents the business of ENERGY.
While serving the needs of large-scale industrial
customers, PHINMA Energy has expanded into the
retail electricity market, to make its services more
accessible to a larger base of the market, represented
by the Customer Circles, ranging from large to small.
Our renewable and conventional energy sources
both contribute to our diversified power portfolio,
represented by the two color tones.
Embracing the name of our Parent, PHINMA Energy is a
flagship company of the PHINMA Group.
PHINMA Energy believes in Making Lives Better.
Your Company’s Parent, PHINMA, is a local diversified
conglomerate engaged in Energy, Education, Housing,
Steel Building Systems, Hospitality, and Strategic
Consulting.
Your Company, PHINMA Energy Corporation, is
an integrated power company engaged in power
generation, wholesale & retail electricity supply,
wind energy development and energy resource
development.
2016 ANNUAL REPORT | 13
CUSTOMERS
ARE at THE HEART
OF OUR BUSINESS
PHINMA Energy will expand its market through
opportunities in the retail market.
At PHINMA Energy, we seek to understand your
electricity supply requirements, by working with you to
develop an innovative and customized power solution
to meet your unique business needs.
Recognizing current and future demand requirements
of the country, our diversified power portfolio includes
both renewable and conventional energy sources
to ensure reliability and security of supply at costefficient and competitive prices.
“PHINMA Energy Corporation
is invigorated with resolve to
capture a significant share of
the retail electricity market
through customizable and
competitive power solutions,
serving a greater number
of energy end-users with a
customer-centric approach.”
14 | PHINMA ENERGY CORPORATION
PHINMA Energy offers continuous customer support
for end-to-end service through our approachable and
knowledgeable electricity supply specialists, backed
by an advanced trading system and progressive
management expertise.
As we expand our reach into the retail electricity
market, we guarantee the same level of transparency
and integrity that we have been known for with
our existing customers, electric cooperatives, and
economic zones.
PHINMA Energy will go the extra mile by developing
integrated CSR programs for customer-specific
communities as an integral part of inclusive business
practices, with the aim to benefit host communities in
a sustainable and scalable manner.
OPERATIONS REPORT | CUSTOMER FOCUS
PHINMA Energy believes that customers should own
their power of choice.
PHINMA Energy believes that a competitive retail
electricity market is beneficial to consumers as the
power to decide belongs in the hands of customers.
The Retail Competition and Open Access (RCOA)
mandate from the Energy Regulatory Commission
(ERC) allows qualified contestable customers to
select their electricity supplier of choice. This move
encourages a more competitive and progressive
landscape for the Philippine power industry, ultimately
benefitting end-users.
As the Preferred Electricity Supplier of our customers,
PHINMA Energy will walk each customer through the
process of integrating into the Open Access system,
wherein customers can exercise their Power of Choice.
Customers are no longer captive to one supplier
and price.
PHINMA Energy will help customers navigate through
a seamless transition, guiding them to make more
informed decisions, ensuring continuous access
to reliable electricity and security of supply at
competitive prices.
Republic Cement chooses PHINMA Energy as its Retail
Electricity Supplier (RES)
Dr. Francisco Viray of PHINMA Energy and Mr. Don Lee,
President and CEO of Republic Cement, sign the Memorandum
of Agreement
2016 ANNUAL REPORT | 15
“At PHINMA Energy, we share
in your business risks by
understanding your unique
and specific requirements.
Together, we will develop
innovative and customized
power solutions, catering to
your particular consumption
needs and energy
preferences.”
In 2016, your Company ended the year with P15.47
Billion in Revenues from Electricity Sales, up 15 % from
a level of P13.47 Billion in the previous year. Total
Energy Sales Volume at year end was 2,947 GWh, which
was a 33% jump from 2,216 last year.
Aligned with the energy industry’s move to promote
customer choice through the competitive retail market,
your Company made headwinds in gaining additional
contracts with contestable customers, making PHINMA
Energy their preferred supplier of choice.
Driven to capture a significant share of the retail
market, your Company was able to secure customer
commitment for an additional load of around 120
MW by year end, almost double the retail customer
base at the beginning of the year. By March 2017, your
Company was able to switch additional customers with
a total load of over 100 MW to PHINMA Energy as their
new and preferred supplier of choice.
16 | PHINMA ENERGY CORPORATION
Puregold switches to PHINMA Energy
In photo (L-R) : Ms. Danielle del Rosario, Mr. Rizalino Santos, and
Atty. Henry Liquete of PHINMA Energy; Atty. Michael Lao, Ms. Edith
Alcantara, and Mr. Jun Poquiz of Puregold
OPERATIONS REPORT | CUSTOMER FOCUS
PHINMA Energy supports the joint initiatives of the
Department of Energy, Energy Regulatory Commission,
and Philippine Electricity Market Corporation to
advocate for reforms in order for our country to
realize and enjoy the market advantages of a truly
competitive market. Your Company believes that
customers should own their power of choice, and
PHINMA Energy is committed to keeping customers at
the heart of our business.
PHINMA Energy is committed to providing reliable
power from a secure and flexible portfolio of supply.
Aside from sourcing from our own generation portfolio
as well as the spot market, your company also sourced
electricity from contracted capacities of other power
generators through IPPA contracts, such as, Unified
Leyte Geothermal Power Plant and KEPCO SPC Power
Corporation, ensuring delivery of supply and reliable
services for our valued customers.
During the course of the year, PHINMA Energy
served its valued customers with a total peak supply
requirement of 370 MW. Our industrial customers
include the likes of: Lafarge Holcim Philippines,
Philippine Economic Zone Authority’s (PEZA’s) Cavite
Economic Zone, Republic Cement and Construction
Materials Inc. of the CRH-Aboitiz group, Direct
Power Services Inc. of the Ayala group, Manila Water
Company, Inc. and Universal Robina Corporation. Your
Company also delivered the energy requirements
of ten electric cooperatives, including Quezon II
Electric Cooperative Inc. (QUEZELCO II), Batangas I
Electric Cooperative (BATELEC I), Guimaras Electric
Cooperative (GUIMELCO), as well as seven other
electric cooperatives from Region 8.
PHINMA Energy Corporation is committed to
promoting clean and responsible power generation
and electricity supply, empowering our host
communities as our contribution to nation building.
Our customers are our partners, and together, they
account for the bulk of total energy sold, while our
remaining supply is sold to the spot market.
Moving forward to 2017, PHINMA Energy is proud to
include new contestable customers in its roster of
valued partners. As of March 2017, PHINMA Energy
became the official and preferred supplier of La
Salle Greenhills and De La Salle-College of Saint
Benilde, the University of Santo Tomas, Robinsons
Land Corporation, Metro Retail Stores of the Gaisano
group, PureGold, Waltermart, the Masterpiece Asia
and Manuela Corporation of the Villar group of
Companies. Your Company is grateful for the trust and
confidence of our customers in our ability to deliver to
and serve them.
PHINMA Energy organized a medical and dental mission for
Philippine Economic Zone Authority (PEZA).
2016 ANNUAL REPORT | 17
PHINMA PARTNERSHIPS
ARE BUILT ON
STRONG TRUST
AND
CONFIDENCE
During the past five years, your Company was able to execute and implement our
capital expansionary projects, boosting our capacity available for dispatch to 639.4
MW, with the bulk of our own capacity coming in within the last two years.
Your Company’s investments in select joint ventures has greatly contributed to our
year-end bottom line. The 2x135 MW South Luzon Thermal Energy Corporation
(“SLTEC”) circulating fluidized bed coal plant facility in Calaca, Batangas, earned
P1.7 billion in Net Income from the efficient operations and plant maintenance of
its two units. Electricity generated and sold amounted to 1,551 GWh for Units 1 and
2. SLTEC management is committed to deliver continuous and efficient baseload
supply utilizing clean coal technology for its remaining operational years.
Your Company owns a twenty-five percent investment stake in the 20-MW
Maibarara Geothermal Inc. (MGI) geothermal power plant located in Sto. Tomas,
Batangas. In 2016, MGI was cited by Singapore based Asian Power Magazine as
Asia’s 2016 Geothermal Power Project of the Year. Your Company’s 25% investment
in MGI brought in P35 Million in Net Income from a full year of operations, with
expansion activities for an additional 12 MW underway. The full MGI expansion is
expected to come online by the third quarter of 2017, bringing up the total plant
capacity to 32 MW.
18 | PHINMA ENERGY CORPORATION
OPERATIONS REPORT | STRATEGIC PARTNERSHIPS
PHINMA Energy’s expertise in project and operations
management supports shareholder growth and
future prospects.
In February 2016, less than a year from start of
operations of its first plant, South Luzon Thermal
Energy Corporation (“SLTEC”), the Company’s
partnership with AC Energy Holdings Inc. of the Ayala
group, commenced commercial operation of its
second 135 MW coal fired power plant. The successive
commissioning of the two plants not only increased the
Company’s access to reliable baseload power, but also
broadened the Company’s strategic alliances within
the energy industry. In December 2016, PHINMA
and Ayala announced the sale of a 5% and 15%
stake, respectively, in SLTEC to Axia Power Holdings
Philippines Corporation, a unit of the Marubeni
group. With the investment, Marubeni brings its
extensive experience in thermal power to strengthen
the joint venture. The investment in SLTEC validates
the confidence of our partners in PHINMA Energy’s
management expertise and also paves the way for
the three partners to build upon the relationship and
jointly develop power projects in the future. PHINMA
Energy remains the largest shareholder in SLTEC
with a 45% interest, followed by Ayala with 35% and
Marubeni with 20%. Moving forward, PHINMA Energy
will continue to have full control of the energy output
of the two plants for its own energy supply business.
Strategic partnerships and alliances have played a
significant role in the expansion of your Company’s
generation portfolio. With the expertise of your
management and project teams, PHINMA Energy will
continue to look for key growth opportunities through
viable projects purposely timed to meet the country’s
growing energy demand.
2016 ANNUAL REPORT | 19
3 business
pillars
POWER BUSINESS
PHINMA Energy Corporation initially started with embedded generation
plants to address the power requirements of cement plants within
the PHINMA Group. The power business of your Company began with
bunker-fired diesel generator plants, expanding the business later on to
serve the needs of other large-scale and industrial customers. Over the
years, PHINMA Energy developed its power portfolio, expanding into
other sources of power in order to supply its customers with a reliable
and affordable mix of electricity. PHINMA Energy has made strategic
investments in power projects to bulk up its generation capacity.
Your Company enjoyed contributions from its own power plants, with
energy sales from: Trans-Asia Power Generation Corporation (TAPGC 52
MW ) of 36 GWh, One Subic Power Generation Corporation (OSPGC 116
MW) of 86 GWh, CIP II Power Corporation (CIPP 21 MW) of 21 GWh, and
your Company’s Guimaras Power Plant (GPP 3.4 MW) of 6.1 GWh. After
the successful takeover from the Power Sector Assets and Liabilities
Management Corporation (PSALM) last year, your Company commenced
commercial operations of Power Barges 101 and 102, located in Barrio
Obrero Iloilo, in February 2016. Power Barge 101 (PB 101 32 MW) achieved
energy sales of 7.19 GWh, while Power Barge 102 (PB 102 32 MW)
contributed 13.66 GWh in total sales for the year. Power Barge 103 (PB 103
32 MW) is moored in Cebu and is expected to come online within 2017.
By 2016, total capacity from generation plants invested in by PHINMA
Energy increased to 546.4 MW in 2016 from 363 MW in 2015 due for
the most part to the successful completion and commissioning of our
committed projects. Including third party plants with supply agreements,
total capacity available for dispatch was 639.4 MW.
20 | PHINMA ENERGY CORPORATION
OPERATIONS REPORT | 3 BUSINESS PILLARS
RENEWABLE ENERGY DEVELOPMENT
Providing renewable and sustainable energy is an
important part of the Company’s mission. PHINMA
Energy’s first foray into wind energy was through its
fully owned subsidiary, Trans-Asia Renewable Energy
Corporation (“TAREC”) in San Lorenzo, Guimaras.
The 54 MW San Lorenzo Wind Farm of TAREC was
the first wind farm in the Visayas to be constructed
and fully connected to the grid.
The wind project is expected to generate a total
energy of around 120,000 Megawatt hours annually,
with additional benefit of displacing carbon dioxide
with an estimated amount of 65,000 tonnes per
annum or a total of 1.3 Million tonnes of CO² during
its twenty-year project life.
In 2016, TAREC was able to deliver 96.7 GWh of clean
and renewable wind energy to the grid, contributing
P715.4 Million in revenues from the sale of
renewable energy. Moving forward, your Company
continues to own and develop service contracts for
wind energy development around the country with
around 400 MW in potential resource.
ENERGY RESOURCE DEVELOPMENT
As PHINMA Energy began its corporate existence
in the field of energy resource development,
your Company, through its subsidiary, Trans-Asia
Petroleum Corporation (“TAPET”), continues
to explore and develop potential areas for
energy resource exploration and development
both locally and abroad. Despite the downturn
in global oil prices and exploration activity,
your Company looks at long-term demand
and prospects to support its operations and
project evaluation studies, and continues to
explore potential areas for energy resource
development.
In April 2016, TAPET also disclosed a proposed
expansion into the midstream oil and gas sector
initially through a feasibility study for the
construction of a liquefied natural gas terminal
in Sual, Pangasinan. The project, if deemed
feasible, is envisioned to supply local gas
requirements for power generation, commercial,
and transport purposes.
Trans-Asia Petroleum Corporation will continue
to pursue the bulk of energy resource exploration
and development activities for the Company, as a
separately listed entity since its listing by way of
introduction in 2014. Energy resource exploration
will continue to play a key role for the Company,
consistent with its mission to help achieve energy
self-reliance for the country.
2016 ANNUAL REPORT | 21
our corporate
responsibility
IS creating shared value
Driven by your Company’s
corporate values, PHINMA
Energy upholds its
commitment to empowering
growth in our partner
communities. Our mantra of
“Making Lives Better” inspires
us to deliver positive change
by providing corporate social
responsibility programs
relevant to the lives and
realities of our stakeholders.
22 | PHINMA ENERGY CORPORATION
HELP Earth | Harnessing Energy Literacy
for Planet Earth
Your Company continues to harness energy literacy
and promote its environmental advocacy through
the HELP Earth program. Starting from education
support and awareness drive in 2009, the program has
continuously evolved to provide venues for students
and community members to participate in advocacies
related to energy and environment.
In 2016, HELP Earth Education was able to support
23 HELP Earth Savers Clubs in implementing their
own student-driven initiatives through PATHS or
Positive Action Through HELP Earth Savers Project.
This is a result of the 2-day HELP Earth Leadership
Workshop attended by 104 student officers with their
advisers facilitated by the CSR Team in collaboration
with Gawad Kalinga Enchanted Farm and PHINMA
University of Iloilo. Through the leadership workshop,
the HELP Earth student leaders became more engaged
and inspired to craft social innovation projects in their
schools. Aside from this, your Company also enhanced
the teaching competencies in Science by training the
teachers in Energy in Focus III. Around 93 teachers from
Bulacan, Subic, La Union, and Guimaras attended the
workshops focused on science education and energy.
This was implemented in partnership with PHINMA
University of Iloilo and UP Integrated School Science
Department. Aside from our flagship programs, your
| CORPORATE SOCIAL RESPONSIBILITY
33
SCHOOLS
SUPPORTED
PLANTED
13,000
INDIGENOUS
SPECIES
MORE THAN
10,000
STUDENTS ENGAGED
IN ADVOCACY CAMPAIGNS
Company assisted 24 schools during Brigada Eskwela
by providing active volunteers and donating materials
relevant to the students’ needs. Since the inception of
HELP Earth, we have supported a total of 33 schools
through the provision of HELP Earth Multimedia Corner
and have engaged more than 10,000 students through
our advocacy campaigns.
HELP Earth Environment, on the other hand, has
grown by leaps and bounds in 2016 as your Company
aggressively signed-up new partnerships for
environment protection. In addition to the existing
5-hectare Mt. Tipo Reforestation Project with Subic Bay
Metropolitan Authority, your Company has adopted
2 new sites in Bulacan and Guimaras. The 50-hectare
Bininit Reforestation Project in Norzagaray, Bulacan
aims to support in the rehabilitation of the critical
watershed along Ipo Dam. The 27-hectare Arboretum
Project in Sibunag, Guimaras, on the other hand, aims
to create a learning forest with 50 different species to
cater to future generations. Your Company has planted
a total of 13,000 indigenous species with a survival
rate of 85% (94% for upland reforestation and 70%
for urban planting). This was made possible through
collaboration with the Department of Environment and
Natural Resources and various people’s organizations
on the ground. We believe that partnerships with
like-minded individuals is a valuable component in
the advancement and sustainability of this advocacy.
Your Company remains steadfast in our commitment
to improve our carbon sequestration efforts by leaving
our green handprints.
The ecosystem along coastlines and river ways has
also been in your Company’s major interest. In 2016,
we were able to mobilize our employee volunteers and
partner communities to participate in 6 coastal and
river clean-up drives in Bulacan, Cebu, Guimaras, Iloilo,
La Union, and Subic. Two mangrove reforestation sites
in Obrero and in Leganes, Iloilo were also supported
by your Company through provision of seedlings
and volunteers. In 2017, your Company will forge
new partnerships to collaborate on other marine life
preservation and coastal management advocacies.
2016 ANNUAL REPORT | 23
PUNLA | Progressive Undertakings for Nation-building
and Life-enhancing Advocacies
Your Company believes in the potential of the
community to contribute in nation-building thus,
we are committed to create enabling mechanisms
to empower our partners to fulfill their dreams and
aspirations. PUNLA is your Company’s response to
facilitate and catalyze development. We used the word
PUNLA to emphasize our focus on the communities’
interests, roots and realities, towards the goals of selfreliance and grassroots development.
To date, your Company has organized 12 active
livelihood groups. In support of Guimaras’ tourism
initiative, we initiated the training and implementation
of livelihood projects in 4 barangays in San Lorenzo.
These projects were identified and conceptualized by
the community members themselves which helps in
the sustainability and grassroots ownership of these
initiatives. We have also established the San Lorenzo
Pasalubong and Livelihood Center which showcases
the products and skills of our partner communities and
has been a hub for social empowerment. This center
also supports the tourism initiatives in the island
of Guimaras as tourist arrivals increased since the
construction of the wind turbines in the area. On the
other hand, Quirino’s Best, our pilot livelihood project
which started in 2013 in Bacnotan, La Union, has
transformed its business from food processing to food
service, increasing their sales in 2016 by 108%.
TOP: Bamboo bowls created by partners from
Brgy. Cabungahan during the skills training in
Guimaras, Iloilo
RIGHT: The San Lorenzo Pasalubong &
Livelihood Center where partner communities
can showcase their products
24 | PHINMA ENERGY CORPORATION
To complement the livelihood initiatives in the
community, your Company also placed a special
focus on the social wellness of our partners. In 2016,
we have supported 5 day care centers by providing
educational tools for kids. The “Kariton ni Juan” project
also provided a venue for the PHINMA employees to
participate in this initiative. Around 6 boxes of toys
and learning materials were donated which were
distributed to the day care centers of our partner
communities. We have also contributed to the uplifting
of the health status of young children as 130 kids from
Guimaras and Bulacan graduated from our feeding
program, and showed signs of increased weight and
better stature.
| CORPORATE SOCIAL RESPONSIBILITY
SIGLA | Special Interest Groups
For Life-Balanced Activities
Employee wellness is a major priority of your
Company. We believe that it is our responsibility to
create a working environment suitable to the personal
lifestyles and interests of our employees.
SIGLA is your Company’s advocacy to create venues
for fellowship and personal growth by supporting
employee-driven interests. To date, our employees,
both in the head office and in our subsidiaries have
established more than 10 active special interest
groups, ranging from fitness and wellness campaigns
to movie club events, among others. This program
also employs the same bottom-up approach where
the employees themselves are the social enablers
in facilitating the SIGLA groups and sustaining
the program. In 2016, MaSIGLAng Paligsahan was
celebrated as culmination of each SIGLA group and
to recognize the efforts of the employee volunteer
leaders who made this program a success.
We have felt the encouraging results of the SIGLA
initiatives on the camaraderie and wellness of
our employees. This is a positive direction as your
Company aims to be one of the country’s leading
employer of choice.
Culture of Volunteerism
Volunteerism has been a strong pillar for the
sustainability of our CSR initiatives and we take
pride in nurturing and embedding this culture in our
corporate DNA. In 2016, your Company was able to
mobilize 96% of our employees to participate and
contribute in the implementation of our projects. Our
core values of Integrity, Competence, Professionalism,
and Patriotism, serve as our main driver in “Making
Lives Better” to create progressive change in our
nation. The CSR group continues to develop more
opportunities for volunteerism in our vision to create
shared value between your Company, the employees
and our stakeholders.
It is our dream to achieve transformational CSR which
shall create a lasting and significant impact. Through
our integrated approach in delivering CSR pillars –
HELP Earth, PUNLA and SIGLA – your Company hopes
to lay a solid groundwork for empowerment towards
achieving growth and development of our stakeholders.
2016 ANNUAL REPORT | 25
CORPORATE
GOVERNANCE
The Board of Directors, officers and employees of
PHINMA Energy Corporation (“PHINMA Energy” or
the “Company”) commit themselves to the principles
and best practices embodied in its Manual on Good
Corporate Governance. PHINMA Energy believes that
good corporate governance is a necessary component
of what constitutes sound strategic business
management and will therefore exert every effort to
ensure adherence thereto within the organization.
COMPLIANCE OFFICER
The Board of Directors designates a Compliance
Officer who reports to the Chairman of the Board. As
required of publicly-listed companies, the appointment
of the Compliance Officer is properly disclosed to the
Securities and Exchange Commission (SEC).
The duties of the Compliance Officer include monitoring
the Company’s compliance with the provisions and
requirements of the Revised Code of Corporate
Governance, identifying compliance risks, determining
violations by the Company of the Revised Code of
Corporate Governance and, if necessary, recommending
appropriate disciplinary actions.
will submit its 2016 Annual Corporate Governance
Report (ACGR) on May 30, 2017 which will be the last
ACGR report based on the Revised Code of Corporate
Governance of 2009. Succeeding ACGR reports will
have to be based on the 2017 Code as mandated.
As of December 31, 2016, PHINMA Energy has
complied with the principles and best practices
contained in the Manual on Good Corporate
Governance. There were no sanctions imposed on any
director, officer or employee of the Company for noncompliance of the Manual.
COMPLIANCE REPORT
As required by the Philippine Stock Exchange (“PSE”),
the Compliance Officer submitted last March 23, 2016,
a Compliance Report on Corporate Governance for
the year 2015. For the said year, PHINMA Energy has
complied with all guidelines of the Compliance Report.
For the year 2016, the report was submitted on
March 30, 2017.
BOARD OF DIRECTORS
ANNUAL CORPORATE GOVERNANCE REPORT
Composition
The Code of Corporate Governance for Publicly-Listed
Companies took effect on January 1, 2017. Based on
this and as mandated by the SEC, PHINMA Energy
The Board of Directors consists of eleven (11) members
who are nominated and elected in accordance with
PHINMA Energy’s By-Laws.
26 | PHINMA ENERGY CORPORATION
| CORPORATE GOVERNANCE
In compliance with the requirements of the SEC for
publicly-listed corporations, the Company’s Board
of Directors includes four (4) Independent Directors.
The Independent Directors are not officers or
substantial shareholders of PHINMA Energy and have
no interests or relationships with the Company that
may hinder their independence from the Company
or Management which would interfere with their
exercise of independent judgment in carrying out their
responsibilities as directors.
Directors is a combination of executive and nonexecutive Directors.
In order that no Director or small group of Directors
can dominate the decision-making process,
the members of the PHINMA Energy’s Board of
The attendance of the Directors in the meetings of the
Board of Directors during the period from February
2016 to January 2017 is as follows:
Directors 2016
Board Meeting
Attendance
The Board of Directors held ten (10) regular
meetings, one (1) special meeting and one (1)
organizational meeting during the period from
February 2016 to December 2016. The details of the
matters taken up during the said meetings of the
Board of Directors are set forth in Annex “C” of this
Definitive Information Statement.
Regular
BOD Mtg
2/23/2016
Regular
BOD Mtg
4/12/2016
Org
BOD Mtg
4/12/2016
Regular
BOD Mtg
5/16/2016
Regular
BOD Mtg
6/27/2016
Regular
BOD Mtg
7/25/2016
Regular
BOD Mtg
8/22/2016
Regular
BOD Mtg
9/26/2016
Regular
BOD Mtg
11/3/2016
Regular
BOD Mtg
11/28/2016
Regular
BOD Mtg
12/16/2016
Special
BOD Mtg
12/20/2016
Special
BOD Mtg
1/10/2017
Regular
BOD Mtg
1/30/2017
Mr. Oscar J. Hilado, Chairman
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. Ramon R. del Rosario, Jr.
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Dr. Francisco L. Viray
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. Victor J. del Rosario
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Dr. Magdaleno B. Albarracin, Jr.
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. Raymundo O. Feliciano
P
P
Mr. Roberto M. Laviña
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. Ricardo V. Camua (I)
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. David L. Balangue (I)
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. Guillermo D. Luchangco (I)
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Mr. Pythagoras L. Brion, Jr.
P
P
P
P
A
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Ms. Corazon dela Paz-Bernardo (I)
New Director in replacement of Mr. Raymund Feliciano
P - Present
A - Absent
I - Independent Directors
2016 ANNUAL REPORT | 27
Board Committees
To help PHINMA Energy comply with the principles of
good corporate governance, the Company’s Board of
Directors constitutes committees which directly report
to the Board of Directors in accordance with duly
approved procedures.
For 2016, the board committees and their members are
as follows:
BOARD COMMITTEES
DIRECTORS
Nomination
Compensation
Audit
Oscar J. Hilado
M
C
M
Ramon R. del Rosario, Jr.
C
M
C
Francisco L. Viray
Executive
M
Roberto M. Laviña
M
Magdaleno B. Albarracin, Jr.
M
Victor J. del Rosario
M
Pythagoras L. Brion, Jr.
Ricardo V. Camua (I)
David L. Balangue (I)
M
M
C
Guillermo D. Luchangco (I)
Corazon dela Paz-Bernardo (I)
M
M
I - Independent Director
Nomination Committee
The Nomination Committee of PHINMA Energy is
composed of three (3) Directors, one (1) of whom is an
Independent Director.
The Nomination Committee pre-screens and
shortlists all nominees who are qualified for
election to PHINMA Energy’s Board of Directors
in accordance with the qualification and
disqualification guidelines as specified in the
Company’s Manual on Corporate Governance.
All eleven (11) incumbent Directors of the Company
have been nominated to the Board of Directors
after having been pre-screened by the Nomination
28 | PHINMA ENERGY CORPORATION
Committee. The Board of Directors has no reason to
believe that any of the incumbent Directors will be
unwilling or unable to serve if re-elected as a Director.
On March 1, 2017, the Nomination Committee, after
a review of the qualifications of the candidates on
January 30, 2017, submitted to the Board of Directors
the list of qualified nominees.
Compensation Committee
The Compensation Committee of PHINMA Energy is
composed of three (3) Directors, one (1) of whom is an
Independent Director.
| CORPORATE GOVERNANCE
The duties and responsibilities of the Compensation
Committee include establishing policies on executive
remuneration, ensuring that compensation within
PHINMA Energy is consistent with the Company’s
culture, strategy and environment, strengthening
policies on conflict of interest, salaries and benefits,
and ensuring compliance by the Company with
statutory requirements.
There was no Compensation Committee meeting held
in 2016 and none was required.
Audit and Risk Oversight Committee
The Audit and Risk Oversight Committee of PHINMA
Energy is composed of two (2) Independent Directors,
one (1) Non-Executive Director and one (1) Executive
Director. An Independent Director, Mr. David L.
Balangue, chairs the Audit Committee. Changes to the
committee membership were made in April 2016 with
Ms. Corazon de la Paz - Bernardo replacing
Mr. Ricardo Camua. The other members are Messrs.
Victor del Rosario and Roberto Laviña.
The Audit Committee has accounting expertise and
possesses adequate understanding of the Company’s
business and the industry in which it operates.
The roles and responsibilities of the Committee are
defined in the Audit Committee Charter approved
by the Board of Directors. The Committee assists
the Board of Directors in fulfilling its oversight
responsibility to the shareholders in relation to
the Company’s financial statements and financial
reporting process, internal control system, internal and
external auditor’s performance, risk management, and
compliance with legal and regulatory matters.
The Audit Committee had five (5) meetings during
the period from January 2016 to February 2017. The
attendance of the Committee members in the said
meetings is as follows:
Audit
Committee
Meeting
2/19/2016
Audit
Committee
Meeting
4/25/2016
Audit
Committee
Meeting
7/20/2016
Audit
Committee
Meeting
10/24/2016
Audit
Committee
Meeting
2/27/2017
P
P
P
P
P
P
A
P
P
David L. Balangue (I)
Corazon de la Paz-Bernardo (I)
Victor J. del Rosario
P
A
P
P
A
Roberto M. Laviña
P
P
P
P
P
Ricardo V. Camua (I)
P
Legend:
P - Present
A - Absent
(I) - Independent Director
The meetings were timed to review the quarterly
and yearly financial reporting of the Company. The
Committee also reviewed the results of the annual
audit of the external auditor, the findings and status
of the Group Internal Audit’s engagements, the status
of Business Resiliency activities and the 2016 Audit
Committee Report.
The Audit Committee proposed to the Board of
Directors that SyCip Gorres Velayo & Co. (SGV) be
retained as the Company’s external auditor for 2016.
The Committee likewise endorsed to the Board of
Directors the nomination of SGV as the Company’s
external auditor for 2017.
2016 ANNUAL REPORT | 29
EXTERNAL AUDITOR
INTERNAL AUDIT
The External Auditor contributes to the enforcement
of good corporate governance by conducting an
independent examination of the financial records
and reports of PHINMA Energy. On April 12, 2016, the
stockholders approved the appointment of SGV as the
Company’s external auditor.
PHINMA Energy has an independent Internal Audit
organization that reports directly to the Board
of Directors, through the Audit Committee, and
administratively to Senior Management. The Group
Internal Audit (GIA) team provides PHINMA Energy
with professional assurance services that are designed
to add value and improve operations. Consistent with
its thrust to become better business partners, GIA helps
PHINMA Energy accomplish its objectives by bringing a
systematic and disciplined approach to evaluating and
improving the effectiveness of PHINMA Energy’s risk
management, control and governance process.
PHINMA Energy complies with SRC Rule 68, paragraph
3(b)(ix) which requires the rotation of external auditors
or signing partners every five (5) years of engagement
and the mandatory two-year cooling-off period for
the re-engagement of the same signing partner or
individual auditor.
The engagement partner who conducted the audit
for the calendar year 2016 is Ms. Marydith C. Miguel,
an SEC-accredited auditing partner of SGV. This is
Ms. Miguel’s fourth year as engagement partner for
the Company.
Following are the fees for professional services
rendered by SGV for the past 3 years:
Year
Audit Fees (Php)
2016
1,200,000
2015
1,200,000
2014
1,200,000
30 | PHINMA ENERGY CORPORATION
To ensure the independence of GIA, the Audit
Committee reviewed and approved the GIA Charter
which outlines internal audit’s purpose, reporting
relationships, authorities and responsibilities. Through
this Charter, the internal auditors are kept free from
interference by any element in the organization
in matters of audit selection, scope, procedures,
frequency, timing, or report content. Likewise,
members of GIA do not have any direct operational
responsibility or authority over any of the activities
audited and, as such, are further prohibited from
implementing internal controls or engaging in any
other activity that may impair the auditor’s judgment.
In 2016, GIA conducted examinations of the
following: on site review of One Subic Power Gen.
Corp. and Power Barge 101 and 102, process audit of
Trading Operations and WESM Compliance, special
audit on installation and sale of transmission assets.
Based on the results of these reviews, Group Internal
Audit reported that overall controls are adequate
and effective.
| CORPORATE GOVERNANCE
DISCLOSURE AND TRANSPARENCY
In addition to submitting annual and quarterly
financial information and other statutory requirements,
PHINMA Energy promptly discloses to the SEC and
the PSE all material information such as key results
of operations, execution of contracts, declaration
of dividends and investments, among others. Such
disclosures are promptly uploaded to the Company’s
website for the benefit of the investing public.
CODE OF CONDUCT
The Code of Conduct of PHINMA Energy contains
policies on professional decorum, conflict of interest
and penalties for violations.
Employees are required to always act in the best
interest of the Company. As a matter of policy, every
employee and officer of PHINMA Energy is directed to
avoid any situation that could interfere or appear to
interfere with his independent judgment in performing
his duties. The policy also prohibits employees from
using his official position to secure a contract of
employment for a related party, soliciting gifts or
any property for personal gain from any individual or
organization that deals with the Company and using
company information for personal gain. No employee
may engage in any business or undertaking that is
indirectly or directly in competition with or prejudicial
to the interests of the Company.
2016 ANNUAL REPORT | 31
BOARD OF
DIRECTORS
OSCAR J. HILADO, 79, has been the Chairman of the Board of the Company
RAMON R. DEL ROSARIO, JR., 72, was elected as Vice Chairman of the Board of
since April 16, 2008. He served as Vice Chairman of the Company’s Board
Directors and Chairman of the Executive Committee of the Company on April
of Directors for 13 years and Chairman of the Executive Committee for 17
16, 2008. He is the President and Chief Executive Officer of PHINMA Inc. and
years. He has been the Chairman of PHINMA Inc. since January 1994 and has
PHINMA Corp., Chairman of Trans-Asia Power Generation Corporation, Trans-
served as CEO thereof from January 1994 to August 2005. He is likewise the
Asia Renewable Energy Corporation, CIP II Power Corporation, Palawan55
Chairman of the Board & Chairman of the Executive Committee of PHINMA
Exploration and Production Corporation, One Subic Power Generation
Corp., Chairman of the Board of PHINMA Property Holdings Corp., Chairman
Corp., Trans-Asia Wind Power Corporation, Trans-Asia Gold and Minerals
of Union Galvasteel Corporation and Vice Chairman of Trans-Asia Petroleum
Development Corporation, and Microtel Inns and Suites (Pilipinas), Inc. He
Corporation and Trans-Asia Power Generation Corp. He is a Director of
is also the Chairman of the Boards of Trustees of Southwestern University,
One Subic Power Generation Corp., Palawan55 Exploration & Production
University of Iloilo, University of Pangasinan, Araullo University and Cagayan
Corporation, Trans-Asia Renewable Energy Corporation, Trans-Asia Gold
de Oro College. He is a Director of several PHINMA-managed companies and
and Minerals Development Corporation, Manila Cordage Corp., Seven Seas
currently serves as a member of the Board of Directors of Ayala Corp. and as
Resorts & Leisure, Inc., First Philippine Holdings Corporation, A. Soriano
Chairman of United Pulp and Paper Company of the Siam Cement Group. Mr.
Corporation, Philex Mining Corporation, Smart Communications, Inc. Digital
del Rosario served as Secretary of Finance of the Philippines from 1992 to
Telecommunications Phils., Inc. (DIGITEL), Rockwell Land Corporation and
1993. He is the Chairman of the National Museum of the Philippines, Ramon
Roxas Holdings, Inc.. He received his Bachelor of Science degree in Commerce
Magsaysay Award Foundation, and Philippine Business for Education (PBED).
from De La Salle College (Bacolod) in 1958 and his Master’s degree in Business
He was the former Chairman of the Makati Business Club and the Integrity
Administration from the Harvard Graduate School of Business in 1962.
Initiative. He was selected as the Most Outstanding Student of the Philippines
in 1967, one of the Ten Outstanding Young Men (TOYM) of the Philippines in
1978, and the MAP Management Man of the Year in 2010. He is the brother of
Mr. Victor J. del Rosario. He has been a Director of the Company since 2002. Mr.
del Rosario obtained his Bachelor of Science in Accounting and Bachelor of Arts
in Social Sciences degrees, Magna cum Laude, from De La Salle University, and
Master’s degree in Business Administration from the Harvard Business School.
32 | PHINMA ENERGY CORPORATION
| BOARD OF DIRECTORS
FRANCISCO L. VIRAY, 68, has been the President and Chief Executive Officer
ROBERTO M. LAVIÑA, 66, is the Senior Executive Vice-President and Chief
of the Company since April 2007. He has been a Director of the Company
Operating Officer (COO) of PHINMA Inc. & PHINMA Corp. and concurrently
since 1998 and has served as the Company’s Executive Vice-President from
is the President & CEO of PHINMA Property Holdings Corp. He is also
April 2004 to April 2007. He is concurrently the President and Chief Executive
the Treasurer of PHINMA Energy and is a member of the Board of all
Officer of PHINMA Energy Corporation, Trans-Asia Power Generation
the companies in the PHINMA Group which include companies in power
Corporation, Trans-Asia Renewable Energy Corporation, Trans-Asia Gold and
generation, education, hotels, steel roofing, property development, oil
Minerals Development Corporation and Trans-Asia Wind Power Corporation.
exploration, strategic consulting and insurance brokerage. Mr. Laviña has a
He is the Vice-Chairman & CEO of CIP II Power Corporation, One Subic Power
Bachelor of Arts in Economics degree from Ateneo de Manila University and a
Generation Corp. and Palawan55 Exploration & Production Corporation. At
Masters degree in Business Management from Asian Institute of Management.
present, Dr. Viray is a member of the Boards of Trustees of Araullo University,
He finished his Program for Management Development at Harvard University
Cagayan de Oro College and University of Pangasinan of the PHINMA
in 1988.
Education Network (PEN). He joined the PHINMA Group in 1999, a year
after he served as Secretary of the Department of Energy from 1994 to 1998.
Earlier, he was President of the National Power Corporation beginning May
1993. He also served on the Board of Directors of Meralco, Petron, Union
Cement Corporation (now Holcim Philippines, Inc.) and United Pulp and
Paper Company, Inc. Dr. Viray received his Bachelor of Science and Master’s
degrees in Electrical Engineering from the University of the Philippines and his
Doctorate degree in Engineering from West Virginia University.
2016 ANNUAL REPORT | 33
PYTHAGORAS L. BRION, JR., 64, was elected Senior Vice-President & CFO of the
MAGDALENO B. ALBARRACIN, JR., 80, joined the PHINMA Group in 1971
Company on March 20, 2012. He is concurrently the EVP and CFO of PHINMA
as a consultant. He is currently the Vice-Chairman of PHINMA Inc. and
Inc. and Senior Vice-President and Treasurer of PHINMA Corp.; EVP, Treasurer
is the Chairman of its Executive Committee. He is also Vice-Chairman of
& CFO of Trans-Asia Power Generation Corporation, CIP II Power Corporation,
PHINMA Education Holdings, Inc.. He is a member of the Boards of Directors
One Subic Power Generation Corp., and Palawan55 Exploration & Production
of PHINMA Foundation, Union Galvasteel Corporation, Trans-Asia Power
Corporation. Mr. Brion is the Treasurer & CFO of Trans-Asia Gold and Minerals
Generation Corporation, One Subic Power Generation Corp., Trans-Asia
Development Corporation and the Treasurer of Trans-Asia Renewable Energy
Petroleum Corporation, Trans-Asia Renewable Energy Corporation, and
Corporation and Trans-Asia Wind Power Corporation. Mr. Brion likewise serves
PHINMA Property Holdings Corp.. He is the former Chairman of the Board of
various executive posts in the PHINMA-managed companies in steel building
Trustees of the University of San Carlos in Cebu City, and was a member of the
systems, education, hospitality and property. He joined the PHINMA group
UP Board of Regents. He was formerly Chairman of UP Engineering Research
in 1992. Mr. Brion received his Bachelor of Science degree in Management
and Development Foundation and President of Holcim Philippines, Inc., where
Engineering from Ateneo de Manila University and holds a Master’s degree in
he also served as a Director from 1986 to 2014. Dr. Albarracin received his
Business Administration from University of the Philippines.
Bachelor of Science degree in Electrical Engineering from the University of
the Philippines and Master of Science degree in Electrical Engineering from
the University of Michigan. He received his Master’s degree in Business
Administration from the University of the Philippines and Doctorate degree in
Business Administration from Harvard University.
34 | PHINMA ENERGY CORPORATION
| BOARD OF DIRECTORS
VICTOR J. DEL ROSARIO, 68, is the Vice-Chairman of Union Galvasteel
RICARDO V. CAMUA, 74, has been a Director of the Company since 1996.
Corporation and is the Executive Vice-President and Chief Strategic Officer
He served as the President and Chief Executive Officer of Manila Cordage
of PHINMA Inc. He is the Executive Vice-President and Chief Finance Officer
Company (2000-2009) and Manco Synthetics, Inc. (2007-2009). Mr. Camua was
of PHINMA Corp. He is also a member of the Boards of Directors of PHINMA
the Vice-President and member of the Boards of Directors of Manco Insurance
Inc. and various PHINMA-managed companies. Mr. del Rosario is the brother
Agents Inc. and Tupperware Realty Corporation. In 2005, he was elected
of Mr. Ramon R. del Rosario, Jr. Mr. Victor del Rosario is an Economics and
Director of Filmag Holdings, Inc. Since 2008, he has been the President of
Accounting graduate of De La Salle University and holds a Master’s degree in
Ricardo V. Camua & Co., Inc. (RVCCI). He has a Bachelor of Science degree in
Business Administration from Columbia University.
Electrical Engineering from Mapua Institute of Technology.
2016 ANNUAL REPORT | 35
DAVID L. BALANGUE, 65, was elected as Independent Director of the Company
GUILLERMO D. LUCHANGCO, 77, has been an Independent Director of the
on March 24, 2010. He is an accounting and auditing professional whose
Company since April 2013. He is the Chairman and Chief Executive Officer of
career spanned 38 years at SGV & Co., the Philippines’ largest audit and
The ICCP Group, which includes Science Park of the Philippines, Inc., Pueblo
accounting professional services firm. He is a former Chairman & Managing
de Oro Development Corp., Cebu Light Industrial Park, Inc., Regatta Properties,
Partner of the Firm, and was admitted to partnership in 1982. He is the current
Inc., RFM-Science Park of the Philippines, Inc., and Manila Exposition Complex,
Chairman of the Philippine Financial Reporting Standards Council and is a
Inc.; Chairman of Investment & Capital Corporation of the Philippines and
past president of the Philippine Institute of CPAs, Management Association
Chairman & President of Beacon Property Ventures, Inc. Mr. Luchangco also
of the Philippines, Financial Executives Institute and The Manila Polo Club,
sits on the board of public companies PHINMA Corporation, Roxas & Company,
Inc. He also sits as an Independent Director in Holcim Philippines, Inc.,
Inc. and Ionics Inc. He is also an Independent Director of Fuld & Company.
Manulife Financial Plans, Inc., Roxas Holdings, Inc. and Philippine Bank of
Mr. Luchangco received his Bachelor of Science degree in Chemical
Communications. Mr. Balangue holds a bachelor’s degree in Commerce, major
Engineering, Magna Cum Laude, from the De La Salle University and holds a
in Accounting, Magna Cum Laude, from Manuel L. Quezon University and a
Master’s degree in Business Administration from Harvard Business School.
Master of Management degree, with distinction, from the Kellogg School of
Management of Northwestern University in Evanston, Illinois, USA as an SGV
scholar and where he received a Distinguished Scholar Award and was elected
to the Beta Gamma Sigma, an exclusive honors fraternity. He placed second
highest in the 1972 Philippine CPA Board Examinations.
36 | PHINMA ENERGY CORPORATION
| BOARD OF DIRECTORS
CORAZON DELA PAZ BERNARDO, 75, was elected as an Independent Director
of the Company on April 12, 2016. She is the Honorary President of the
International Social Security Association (ISSA), an affiliate of the International
Labor Organization, based in Geneva, Switzerland. She was the first woman
Philippine Business for Education (PBEd), the BDO Foundation, and the Laura
and first non-European to be elected as ISSA’s President (2004-2010). She is
Vicuna Foundation for Streetchildren. She sits on the boards of Republic Glass
the first woman President of the Social Security System (2001-2008) and the
Holdings Corporation, and Roxas & Co., Inc. Mrs. dela Paz-Bernardo graduated
first woman elected partner of Price Waterhouse International (1973). She was
from the University of the East with a Bachelor of Business Administration
Chairman and Senior Partner of Joaquin Cunanan & Co. (Price Waterhouse
degree in 1960, Magna Cum Laude, and was the topnotcher of the CPA board
Philippines) from 1981-2001, and was in the World Board of Price Waterhouse
examination. She obtained her MBA in 1965 from Cornell University in New
World Firm from 1992-1995. She has served as trustee or commissioner of the
York as a Fulbright grantee. She is a TOWNS and TOFIL awardee.
Philippine Health Insurance Corporation (Philhealth), Home Development
Mutual Fund (PAG-IBIG), National Commission on the Role of Filipino Women,
University of the East, UE Ramon Magsaysay Memorial Medical Center,
Medical Doctors Inc. (Makati Medical Center), Miriam College, the Makati
Business Club, MFI Foundation (where she also serves as Treasurer), the
2016 ANNUAL REPORT | 37
MANAGEMENT
COMMITTEE
FRANCISCO L. VIRAY
President and
Chief Executive Officer
38 | PHINMA ENERGY CORPORATION
ROBERTO M. LAVIÑA
Treasurer
JUAN J. DIAZ
Corporate Secretary
PYTHAGORAS L. BRION, JR.
Senior Vice-President
and Chief Finance Officer
VIRGILIO R. FRANCISCO, JR.
Senior Vice President
Until November 2016
| MANAGEMENT COMMITTEE
RIZALINO G. SANTOS
Senior Vice President
Power Business
RAYMUNDO A. REYES, JR.
Senior Vice President
MARIEJO PRADO-BAUTISTA
Senior Vice President
Finance and Controller
CECILLE B. ARENILLO
Vice President
Compliance Officer
ATTY. ALAN T. ASCALON
Vice President, Legal and
Corporate Affairs
Assistant Corporate Secretary
DANILO L. PANES
Vice President
Renewable Energy
MA. TERESA P. POSADAS
Assistant Vice President
Human Resources
DANIELLE R. DEL ROSARIO
Assistant Vice President
Head of Sales and Marketing
ARTHUR R. VILLACORTE
Assistant Vice President
Materials Management
2016 ANNUAL REPORT | 39
CORPORATE
DIRECTORY
CONTACT INFORMATION
Investor Relations
Corporate Affairs
Materials Management
Electricity Supply & Marketing
Corporate Social Responsibility
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
SHAREHOLDER INFORMATION
PHINMA Energy Corporation
Level 11, PHINMA Plaza
39 Plaza Drive, Rockwell Center, Makati City
Tel. No.: (+632) 870-0100
Fax: (+632) 870-0433
Website: www.phinmaenergy.com
INVESTOR RELATIONS
Giles R. Katigbak
Tel. No.: (+632) 870-0130
Fax: (+632) 870-0456
TRANSFER AGENT
Stock Transfer Services, Inc.
34th Floor, Unit D, Rufino Pacific Tower
Tel. No.: (+632) 403-2410
Email: [email protected]
EXTERNAL AUDITORS
SyCip Gorres Velayo & Co.
40 | PHINMA ENERGY CORPORATION
Concept & Design | Mom&Pop Design Studio
Portraiture | Cesar Caina
The PHINMA Energy 2016 Annual Report cover is printed on
FSC®-Certified, Green-e certified and made Carbon Neutral
Plus paper.
The inside pages of this report are printed on woodfree
paper produced with pulps from PEFC-certified (Programme
for the Endorsement of Forest Certification) sustainablymanaged forests.
PHINMA Energy Corporation
Level 11, PHINMA Plaza
39 Plaza Drive, Rockwell Center, Makati City
Tel. No.: (+632) 870-0100
Fax: (+632) 870-0433
Website: www.phinmaenergy.com