UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION

UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION SEPARATE FINANCIAL STATEMENTS December 31, 2014 and 2013

ABCD R.G. Manabat & Co. Telephone +63 (2) 885 7000 The KPMG Center, 9/F Fax +63 (2) 894 1985 6787 Ayala Avenue Internet www.kpmg.com.ph Makati City 1226, Metro Manila, Philippines E-Mail ph-inquiry@kpmg.com Branches: Subic Cebu Bacolod Iloilo REPORT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders United Coconut Planters Life Assurance Corporation Report on the Separate Financial Statements We have audited the accompanying separate financial statements of United Coconut Planters Life Assurance Corporation (the Parent Company ), which comprise the separate statements of financial position as at December 31, 2014 and 2013, and the separate statements of comprehensive income, separate statements of changes in equity and separate statements of cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Separate Financial Statements Management is responsible for the preparation and fair presentation of these separate financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these separate financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the separate financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity s preparation and fair presentation of the separate financial statements 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. 2015 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member p firm. All rights reserved. i a PRC-BOA Registration No. 0003, valid until December 31, 2016 SEC Accreditation No. 0004-FR-4, Group A, valid until November 10, 2017 IC Accreditation No. F-2014/014-R, valid until August 26, 2017 BSP Accredited, Category A, valid until December 17, 2017

ABCD Basis for Qualified Opinion The Parent Company carries its investments in United Coconut Planters Bank (UCPB) shares as available-for-sale (AFS) financial assets at cost as disclosed in Note 11 of the notes to financial statements. As required under Philippine Financial Reporting Standards, such AFS financial assets should have been carried at cost less impairment losses. Had the Parent Company recognized such impairment losses, the carrying amounts of the AFS financial assets and retained earnings as of December 31, 2014 and 2013 should have been reduced by P552 million. Qualified Opinion In our opinion, except for the possible effects on the financial statements of the matter described in the Basis for Qualified Opinion paragraph, the separate financial statements present fairly, in all material respects, the unconsolidated financial position of the Parent Company as at December 31, 2014 and 2013, and its unconsolidated financial performance and its unconsolidated cash flows for the years then ended in accordance with Philippine Financial Reporting Standards. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 11 to the financial statements which discusses the Executive Orders (EOs) issued by the President of the Republic of the Philippines regarding the inventory, reconveyance, utilization and privatization of coco levy assets that reference the decision rendered by the Supreme Court involving the ownership of certain sequestered shares in UCPB, and the ownership over the Coconut Industry Investment Fund (CIIF) Oil Mills Companies, the Fourteen (14) CIIF Holding Companies and the proceeds of the redeemed shares of stock in San Miguel Corporation (SMC) held by the 14 CIIF Holding Companies, together with all dividends declared, paid and issued thereon as well as any increments thereto arising from, but not limited to, exercise of pre-emptive rights, is owned by the Republic of the Philippines for the benefit of the coconut farmers, thus making it a part of the coco levy assets. Since the manner by which the reconveyance, utilization and privatization of the coco levy assets to be undertaken has not been defined by the implementing authorities, the Board of Directors and management will be assessing the impact of the EOs and the Supreme Court Decision on the Parent Company moving forward and believe that, as at December 31, 2014, it is reasonable to maintain the status quo and continue with its normal business operations. Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010 of the Bureau of Internal Revenue Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information in Note 40 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such supplementary information is the responsibility of the management. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated, in all material respects in relation to the basic financial statements taken as a whole. April 29, 2015 Makati City, Metro Manila

ABCD R.G. Manabat & Co. Telephone +63 (2) 885 7000 The KPMG Center, 9/F Fax +63 (2) 894 1985 6787 Ayala Avenue Internet www.kpmg.com.ph Makati City 1226, Metro Manila, Philippines E-Mail ph-inquiry@kpmg.com Branches: Subic Cebu Bacolod Iloilo REPORT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders United Coconut Planters Life Assurance Corporation Cocolife Building, 6774 Ayala Avenue Makati City Report on the Separate Financial Statements We have audited the accompanying separate financial statements of United Coconut Planters Life Assurance Corporation (the Parent Company ), which comprise the separate statements of financial position as at December 31, 2014 and 2013, and the separate statements of comprehensive income, separate statements of changes in equity and separate statements of cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Separate Financial Statements Management is responsible for the preparation and fair presentation of these separate financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these separate financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the separate financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity s preparation and fair presentation of the separate financial statements 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. 2015 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member p firm. All rights reserved. i a PRC-BOA Registration No. 0003, valid until December 31, 2016 SEC Accreditation No. 0004-FR-4, Group A, valid until November 10, 2017 IC Accreditation No. F-2014/014-R, valid until August 26, 2017 BSP Accredited, Category A, valid until December 17, 2017

ABCD Basis for Qualified Opinion The Parent Company carries its investments in United Coconut Planters Bank (UCPB) shares as available-for-sale (AFS) financial assets at cost as disclosed in Note 11 of the notes to financial statements. As required under Philippine Financial Reporting Standards, such AFS financial assets should have been carried at cost less impairment losses. Had the Parent Company recognized such impairment losses, the carrying amounts of the AFS financial assets and retained earnings as of December 31, 2014 and 2013 should have been reduced by P552 million. Qualified Opinion In our opinion, except for the possible effects on the financial statements of the matter described in the Basis for Qualified Opinion paragraph, the separate financial statements present fairly, in all material respects, the unconsolidated financial position of the Parent Company as at December 31, 2014 and 2013, and its unconsolidated financial performance and its unconsolidated cash flows for the years then ended in accordance with Philippine Financial Reporting Standards. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 11 to the financial statements which discusses the Executive Orders (EOs) issued by the President of the Republic of the Philippines regarding the inventory, reconveyance, utilization and privatization of coco levy assets that reference the decision rendered by the Supreme Court involving the ownership of certain sequestered shares in UCPB, and the ownership over the Coconut Industry Investment Fund (CIIF) Oil Mills Companies, the Fourteen (14) CIIF Holding Companies and the proceeds of the redeemed shares of stock in San Miguel Corporation (SMC) held by the 14 CIIF Holding Companies, together with all dividends declared, paid and issued thereon as well as any increments thereto arising from, but not limited to, exercise of pre-emptive rights, is owned by the Republic of the Philippines for the benefit of the coconut farmers, thus making it a part of the coco levy assets. Since the manner by which the reconveyance, utilization and privatization of the coco levy assets to be undertaken has not been defined by the implementing authorities, the Board of Directors and management will be assessing the impact of the EOs and the Supreme Court Decision on the Parent Company moving forward and believe that, as at December 31, 2014, it is reasonable to maintain the status quo and continue with its normal business operations.

ABCD Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010 of the Bureau of Internal Revenue Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information in Note 40 to the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such supplementary information is the responsibility of the management. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated, in all material respects in relation to the basic financial statements taken as a whole. R.G. MANABAT & CO. DENNIS I. ILAN Partner CPA License No. 089564 IC Accreditation No. SP-2014/023-R, Group A, valid until August 26, 2017 SEC Accreditation No. 1182-A, Group A, valid until April 30, 2015 Tax Identification No. 161-313-405 BIR Accreditation No. 08-001987-28-2014 Issued September 26, 2014; valid until September 25, 2017 PTR No. 4748109MC Issued January 5, 2015 at Makati City April 29, 2015 Makati City, Metro Manila

ABCD R.G. Manabat & Co. Telephone +63 (2) 885 7000 The KPMG Center, 9/F Fax +63 (2) 894 1985 6787 Ayala Avenue Internet www.kpmg.com.ph Makati City 1226, Metro Manila, Philippines E-Mail ph-inquiry@kpmg.com Branches: Subic Cebu Bacolod Iloilo REPORT OF INDEPENDENT AUDITORS TO ACCOMPANY FINANCIAL STATEMENTS FOR FILING WITH THE BUREAU OF INTERNAL REVENUE The Board of Directors and Stockholders United Coconut Planters Life Assurance Corporation Cocolife Building, 6774 Ayala Avenue Makati City We have audited the accompanying separate financial statements of United Coconut Planters Life Assurance Corporation, as at and for the year ended December 31, 2014, on which we have rendered our report dated April 29, 2015. In compliance with Revenue Regulations V-20, we are stating that no partner of our Firm is related by consanguinity or affinity to the president, manager or principal stockholder of the Company. R.G. MANABAT & CO. DENNIS I. ILAN Partner CPA License No. 089564 IC Accreditation No. SP-2014/023-R, Group A, valid until August 26, 2017 SEC Accreditation No. 1182-A, Group A, valid until April 30, 2015 Tax Identification No. 161-313-405 BIR Accreditation No. 08-001987-28-2014 Issued September 26, 2014; valid until September 25, 2017 PTR No. 4748109MC Issued January 5, 2015 at Makati City April 29, 2015 Makati City, Metro Manila 2015 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member p firm. All rights reserved. i a PRC-BOA Registration No. 0003, valid until December 31, 2016 SEC Accreditation No. 0004-FR-4, Group A, valid until November 10, 2017 IC Accreditation No. F-2014/014-R, valid until August 26, 2017 BSP Accredited, Category A, valid until December 17, 2017

ABCD R.G. Manabat & Co. Telephone +63 (2) 885 7000 The KPMG Center, 9/F Fax +63 (2) 894 1985 6787 Ayala Avenue Internet www.kpmg.com.ph Makati City 1226, Metro Manila, Philippines E-Mail ph-inquiry@kpmg.com Branches: Subic Cebu Bacolod Iloilo REPORT OF INDEPENDENT AUDITORS TO ACCOMPANY FINANCIAL STATEMENTS FOR FILING WITH THE SECURITIES AND EXCHANGE COMMISSION The Board of Directors and Stockholders United Coconut Planters Life Assurance Corporation Cocolife Building, 6774 Ayala Avenue Makati City We have audited the accompanying separate financial statements of United Coconut Planters Life Assurance Corporation, as at and for the year ended December 31, 2014, on which we have rendered our report dated April 29, 2015. In compliance with Securities Regulation Code Rule 68, As Amended, we are stating that the said Company has nine (9) stockholders owning one hundred (100) or more shares each. R.G. MANABAT & CO. DENNIS I. ILAN Partner CPA License No. 089564 IC Accreditation No. SP-2014/023-R, Group A, valid until August 26, 2017 SEC Accreditation No. 1182-A, Group A, valid until April 30, 2015 Tax Identification No. 161-313-405 BIR Accreditation No. 08-001987-28-2014 Issued September 26, 2014; valid until September 25, 2017 PTR No. 4748109MC Issued January 5, 2015 at Makati City April 29, 2015 Makati City, Metro Manila 2015 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member p firm. All rights reserved. i a PRC-BOA Registration No. 0003, valid until December 31, 2016 SEC Accreditation No. 0004-FR-4, Group A, valid until November 10, 2017 IC Accreditation No. F-2014/014-R, valid until August 26, 2017 BSP Accredited, Category A, valid until December 17, 2017

ABCD R.G. Manabat & Co. Telephone +63 (2) 885 7000 The KPMG Center, 9/F Fax +63 (2) 894 1985 6787 Ayala Avenue Internet www.kpmg.com.ph Makati City 1226, Metro Manila, Philippines E-Mail ph-inquiry@kpmg.com Branches: Subic Cebu Bacolod Iloilo REPORT OF INDEPENDENT AUDITORS ON SUPPLEMENTARY INFORMATION The Board of Directors and Stockholders United Coconut Planters Life Assurance Corporation Cocolife Building, 6774 Ayala Avenue Makati City We have audited the accompanying separate financial statements of United Coconut Planters Life Assurance Corporation as at and for the year ended December 31, 2014, on which we have rendered our report dated April 29, 2015. Our audit was made for the purpose of forming an opinion on the basic financial statements of the Parent Company taken as a whole. The supplementary information included in the following accompanying additional components is the responsibility of the management: Reconciliation of Retained Earnings Available for Dividend Declaration Schedule of Philippine Financial Reporting Standards These supplementary information are presented for purposes of complying with the Securities Regulation Code Rule 68, As Amended, and are not a required part of the basic financial statements. Such information have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. R.G. MANABAT & CO. DENNIS I. ILAN Partner CPA License No. 089564 IC Accreditation No. SP-2014/023-R, Group A, valid until August 26, 2017 SEC Accreditation No. 1182-A, Group A, valid until April 30, 2015 Tax Identification No. 161-313-405 BIR Accreditation No. 08-001987-28-2014 Issued September 26, 2014; valid until September 25, 2017 PTR No. 4748109MC Issued January 5, 2015 at Makati City April 29, 2015 Makati City, Metro Manila 2015 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member p firm. All rights reserved. i a PRC-BOA Registration No. 0003, valid until December 31, 2016 SEC Accreditation No. 0004-FR-4, Group A, valid until November 10, 2017 IC Accreditation No. F-2014/014-R, valid until August 26, 2017 BSP Accredited, Category A, valid until December 17, 2017

UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION SEPARATE STATEMENTS OF FINANCIAL POSITION December 31 Note 2014 2013 ASSETS Cash and cash equivalents 8 P1,482,796,582 P1,799,306,327 Insurance receivables - net 9 419,153,554 203,997,141 Financial assets at fair value through profit or loss (FVPL) 10 1,144,533,764 755,326,450 Available-for-sale (AFS) financial assets 11 9,050,899,343 8,342,194,838 Loans and receivables - net 12 7,682,506,264 6,635,832,631 Accrued income - net 13 61,789,064 62,204,505 Reinsurance assets 14 44,740,721 28,698,683 Investments in subsidiaries and associate 15 1,128,915,018 1,128,915,018 Real estate inventories 16 31,818,136 34,561,536 Investment properties 17 583,983,965 496,578,393 Property and equipment - net 18 132,702,093 136,897,192 Intangible assets - net 19 14,067,581 11,692,106 Other assets 20 189,697,497 103,816,743 P21,967,603,582 P19,740,021,563 LIABILITIES AND EQUITY LIABILITIES Insurance contract liabilities 21 P10,367,802,789 P9,065,494,491 Reserve for policyholders dividends 22 197,631,126 188,309,755 Premium deposit funds 23 692,652,228 696,017,613 Insurance payables 24 179,479,629 29,548,393 Accounts payable and accrued expenses 25 1,368,411,574 1,196,433,521 Deferred tax liabilities - net 33 533,130,508 574,088,381 Net pension liability 32 199,790,290 59,002,114 Other liabilities 25 34,108,756 32,708,264 13,573,006,900 11,841,602,532 EQUITY Capital stock 26 550,000,000 550,000,000 Contributed surplus 10,000,000 10,000,000 Reserve for fluctuation on available-for-sale financial assets 11 5,379,901,156 5,307,349,442 Reserve for net pension liability (129,662,069) (26,912,347) Retained earnings 26 2,584,357,595 2,057,981,936 8,394,596,682 7,898,419,031 P21,967,603,582 P19,740,021,563 See Notes to the Separate Financial Statements.

UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION SEPARATE STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31 Note 2014 2013 NET PREMIUMS 27 Gross premiums on insurance contracts P4,325,822,330 P3,613,870,136 Reinsurance premiums ceded (525,941,470) (40,602,862) 3,799,880,860 3,573,267,274 OTHER REVENUE Investments income 28 1,227,003,109 1,105,994,396 Service fees 29 190,354,483 84,202,855 Other income 28 98,954,133 118,868,639 1,516,311,725 1,309,065,890 NET BENEFITS AND CLAIMS 30 Gross benefits and claims 1,903,331,231 1,898,678,528 Reinsurers share on benefits and claims (17,071,367) (26,539,374) Gross change in insurance contract liabilities 593,499,691 495,570,915 Reinsurers share on gross change in insurance contract liabilities (26,452,735) (262,402) 2,453,306,820 2,367,447,667 OPERATING AND ADMINISTRATIVE EXPENSES General and administrative expenses 31 915,294,806 769,953,075 Policyholders dividends 429,327,147 501,622,032 Commissions 525,112,951 440,676,695 Investment expenses 28 337,425,453 254,005,779 Insurance taxes 76,433,282 62,816,458 Interest expenses 2,085,402 3,121,636 Increase (decrease) in loading and cost of collection 33,688,798 (3,918,558) Foreign exchange loss (gain) - net (4,046,926) 5,617,646 2,315,320,913 2,033,894,763 INCOME BEFORE INCOME TAX 547,564,852 480,990,734 INCOME TAX 33 Current 10,506,407 5,928,813 Final 10,682,786 8,978,734 21,189,193 14,907,547 NET INCOME P526,375,659 P466,083,187 OTHER COMRPEHENSIVE INCOME Item that will never be reclassified subsequently to profit or loss Remeasurement of net pension liability 32 (P146,785,317) P135,094,121 Income tax effect 44,035,595 (40,528,236) (102,749,722) 94,565,885 Item that may be reclassified to profit or loss Fair value adjustments on available-for-sale financial assets 11 75,629,436 (306,312,291) Income tax effect (3,077,722) 5,064,602 72,551,714 (301,247,689) TOTAL OTHER COMPREHENSIVE INCOME - Net of tax (30,198,008) (206,681,804) TOTAL COMPREHENSIVE INCOME P496,177,651 P259,401,383 See Notes to the Separate Financial Statements.

UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION SEPARATE STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 Capital Stock (see Note 26) Contributed Surplus Reserve for Fluctuation on Available-for- Sale Financial Assets (see Note 11) Reserve for Net Pension Liability Retained Earnings (see Note 26) Balance at January 1, 2014 P550,000,000 P10,000,000 P5,307,349,442 (P26,912,347) P2,057,981,936 P7,898,419,031 Total Comprehensive Income Net income for the year - - - - 526,375,659 526,375,659 Other comprehensive income Item that will never be reclassified subsequently to profit or loss - - - (102,749,722) - 72,551,714 Item that may be reclassified to profit or loss - - 72,551,714 - - (102,749,722) - - 72,551,714 (102,749,722) 526,375,659 496,177,651 Balance at December 31, 2014 P550,000,000 P10,000,000 P5,379,901,156 (P129,662,069) P2,584,357,595 P8,394,596,682 Balance at January 1, 2013 P550,000,000 P10,000,000 P5,608,597,131 (P121,478,232) P1,591,898,749 P7,639,017,648 Total Comprehensive Income Net income for the year - - - - 466,083,187 466,083,187 Other comprehensive income Item that will never be reclassified subsequently to profit or loss - - - 94,565,885 - (301,247,689) Item that may be reclassified to profit or loss - - (301,247,689) - - 94,565,885 - - (301,247,689) 94,565,885 466,083,187 259,401,383 Balance at December 31, 2013 P550,000,000 P10,000,000 P5,307,349,442 (P26,912,347) P2,057,981,936 P7,898,419,031 Total See Notes to the Separate Financial Statements

UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION SEPARATE STATEMENTS OF CASH FLOWS Years Ended December 31 Note 2014 2013 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax P547,564,852 P480,990,734 Adjustments for: Changes in insurance contact liabilities 1,302,308,298 1,564,917,614 Depreciation and amortization 31 32,132,175 28,771,406 Provision for impairment losses 31 55,122,776 46,228,017 Retirement benefit expense 32 34,153,645 48,449,088 Gain on sale of financial assets at FVPL (785,662) (548,331) Gain on sale of AFS financial assets 28 (130,151,547) (244,949,510) Loss (gain) on sale of investment properties 28 1,424,423 (12,075,644) Loss on sale of real estate inventories 6,875,000 2,381,821 Gain on sale of loans and receivables 28 (1,630,000) (68,919,561) Interest income 28 (928,821,105) (765,954,379) Dividend income 28 (84,606,304) (73,648,643) Unrealized foreign exchange gain - net (8,468,069) (28,693,640) Rental income (6,514,309) (6,742,034) Unrealized fair value loss (gain) - net 28 (73,964,845) 66,843,706 Gain on sale of property and equipment (673,916) (535,700) Operating income before working capital changes 743,965,412 1,036,514,944 Decrease (increase) in: Insurance receivables (215,156,413) 15,938,603 Loans and receivables (1,090,166,409) (995,514,064) Accrued income 830,882 8,149,324 Reinsurance assets (16,042,038) (8,432,662) Real estate inventories 16 (21,924,457) 40,774,679 Other assets (85,880,754) (28,962,438) Increase (decrease) in: Reserve for policyholders dividends 22 9,321,371 6,887,894 Premium deposit funds (3,365,385) (53,012,459) Insurance payables 149,931,236 (6,220,358) Accounts payable and accrued expenses 175,055,775 51,539,132 Other liabilities 1,400,492 (38,645,803) Net cash flows provided by (used in) operations (352,030,288) 29,016,792 Income tax paid (21,189,193) (14,907,547) Net cash flows provided by (used in) operating activities (373,219,481) 14,109,245 CASH FLOWS FROM INVESTING ACTIVITIES Additional capital contribution to subsidiaries - (100,000,000) Interest received 928,777,860 765,954,380 Dividend received 84,593,054 66,943,421 Rental income received 8,109,123 6,701,121 Contributions to retirement fund (40,150,786) (38,910,871) Acquisitions of: Financial assets at FVPL 10 (335,638,453) (118,923,862) AFS financial assets 11 (1,738,418,230) (2,182,976,319) Investment properties 17 (107,709,846) (103,834,689) Property and equipment 18 (27,095,550) (40,562,788) Computer software 19 (5,189,000) (6,190,498) Forward

Years Ended December 31 Note 2014 2013 Proceeds from disposal of: Financial assets at FVPL P22,001,686 P27,169,355 AFS financial assets 1,238,111,255 2,254,447,932 Investment properties 16,884,025 119,168,175 Property and equipment 4,641,741 5,230,413 Loans and receivables (10,000,000) 452,172,837 Real Estate inventories 17,792,857 Net cash flows provided by investing activities 56,709,736 1,106,388,607 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (316,509,745) 1,120,497,852 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8 1,799,306,327 678,808,475 CASH AND CASH EQUIVALENTS AT END OF YEAR 8 P1,482,796,582 P1,799,306,327 See Notes to the Separate Financial Statements.

UNITED COCONUT PLANTERS LIFE ASSURANCE CORPORATION NOTES TO THE SEPARATE FINANCIAL STATEMENTS 1. Reporting Entity The United Coconut Planters Life Assurance Corporation (the Parent Company ) was incorporated on March 20, 1978 and is domiciled in the Republic of the Philippines. The Parent Company was formed to undertake life insurance business, including accident and health insurance; to write insurance contracts providing for all risks, hazards, guarantees and contingencies to which life, accident or health insurance is applicable; to grant endowment and annuities; to issue insurance policies providing for participation or nonparticipation of profits; to reinsure all or part of the risks underwritten by the Parent Company; to undertake all kinds of reinsurance to the extent allowed by the law; and to act as agent or general agent of another insurance company. The Parent Company has a Certificate of Authority No. 2013/86R issued by the Insurance Commission (IC) to transact in life insurance business until December 31, 2015. The registered office address of the Parent Company is at Cocolife Building, 6774 Ayala Avenue, Makati City. 2. Basis of Preparation Statement of Compliance The separate financial statements have been prepared in compliance with Philippine Financial Reporting Standards (PFRSs). PFRSs are based on International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB). PFRSs which are issued by the Philippine Financial Reporting Standards Council (FRSC), consist of PFRSs, Philippine Accounting Standards (PASs), and Philippine Interpretations. In accordance with PFRS 10, Consolidated Financial Statements, the Parent Company also prepares and issues consolidated financial statements for the same period in which it consolidates its investments in subsidiaries. Such consolidated financial statements provide information about the economic activities of the Parent Company and its subsidiaries. The separate financial statements should be read together with the Parent Company s consolidated financial statements as at and for the years ended December 31, 2014 and 2013 in order to obtain full information on the consolidated financial position and financial performance of the Parent Company and its subsidiaries. The separate financial statements of the Parent Company are intended for management s use and for filing with the Bureau of Internal Revenue (BIR). These financial statements account for the Parent Company s investments in subsidiaries at cost (see Note 15) in accordance with the provisions of PAS 27, Separate Financial Statements. The accompanying separate financial statements of the Parent Company were authorized for issue by the Board of Directors (BOD) on April 29, 2015.

Basis of Preparation The separate financial statements have been prepared on the historical cost basis except for the following accounts which are measured on each reporting date as follows: Items Financial assets at fair value through profit or loss (FVPL) Available-for-sale (AFS) financial assets Net pension liability Measurement bases Fair value through profit or loss Fair value through other comprehensive income Present value of the defined benefit obligation less the fair value of the plan assets Functional and Presentation Currency The separate financial statements are presented in Philippine peso, which is the Parent Company s functional currency. All financial information presented in Philippine peso has been rounded off to the nearest peso, except as otherwise indicated. Use of Judgments and Estimates The preparation of the separate financial statements in accordance with PFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities, if any. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying amounts of assets, liabilities, income and expenses that are not readily apparent from other sources. Actual results may however differ from estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively. Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the separate financial statements are described in Note 4 to the separate financial statements. 3. Summary of Significant Accounting Policies The accounting policies set out below have been applied consistently to all years presented in these separate financial statements. Certain comparative amounts in the separate statements of comprehensive income have been reclassified as a result of a change in the classification of certain accounts in the current year (see Note 39). - 2 -

Adoption of New or Revised Standards, Amendments to Standards and Interpretations The Parent Company has adopted the following amendments to standards and interpretations starting January 1, 2014. The adoption of these amendments to standards and interpretations did not have any significant impact on the Parent Company s separate financial statements. Offsetting Financial Assets and Financial Liabilities (Amendments to Financial Instruments: Disclosure and Presentation - PAS 32). These amendments clarify that: An entity currently has a legally enforceable right to set-off if that right is: - not contingent on a future event; and - enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the entity and all counterparties; and Gross settlement is equivalent to net settlement if and only if the gross settlement mechanism has features that: - eliminate or result in insignificant credit and liquidity risk; and - process receivables and payables in a single settlement process or cycle. Recoverable Amount Disclosures for Non-financial Assets (Amendments to Impairment of Assets - PAS 36). These narrow-scope amendments to PAS 36 address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. The amendments clarified that the scope of those disclosures is limited to the recoverable amount of impaired assets that is based on fair value less costs of disposal. Measurement of short-term receivables and payables (Amendment to Fair Value Measurement - PFRS 13). Amendment to PFRS 13 is part of the Annual Improvements to PFRSs 2010-2012 Cycle. The amendment clarifies that, in issuing PFRS 13 and making consequential amendments to Financial Instruments: Recognition and Measurement (PAS 39) and Financial Instruments (PFRS 9), the intention is not to prevent entities from measuring short-term receivables and payables that have no stated interest rate at their invoiced amounts without discounting, if the effect of not discounting is immaterial. The amendment to PFRS 13 is effective immediately. New or Revised Standards, Amendments to Standards and Interpretations Not Yet Adopted A number of new standards and amendments to standards are effective for annual periods beginning after January 1, 2014. However, the Parent Company have not applied the following new or amended standards in preparing these separate financial statements. The Parent Company is assessing the potential impact on its financial statements resulting from the application of the new standards. - 3 -

Effective July 1, 2014 Annual improvements to PFRSs 2010-2012 and 2011-2013 Cycles - Amendments were made to a total of nine standards, with changes made to the standards on business combinations and fair value measurement in both cycles. Most amendments will apply prospectively for annual periods beginning on or after July 1, 2014. Earlier application is permitted, in which case the related consequential amendments to other PFRSs would also apply. Special transition requirements have been set for amendments to the following standards: Share-based Payment (PFRS 2), Property, Plant and Equipment (PAS 16), Intangible Assets (PAS 38) and Investment Property (PAS 40). Below is the amendment to PFRSs, which may be applicable to the Parent Company: Definition of related party (Amendment to PAS 24).The definition of a related party is extended to include a management entity that provides key management personnel (KMP) services to the reporting entity, either directly or through a group entity. For related party transactions that arise when KMP services are provided to a reporting entity, the reporting entity is required to separately disclose the amounts that it has recognized as an expense for those services that are provided by a management entity; however, it is not required to look through management entity and disclose compensation paid by management entity to the individuals providing the KMP services. The reporting entity will also need to disclose other transactions with management entity under the existing disclosure requirements of PAS 24 - e.g. loans. Effective January 1, 2016 Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to PAS 16 and PAS 38). The amendments to PAS 38, Intangible Assets introduce a rebuttable presumption that the use of revenue-based amortization methods for intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are highly correlated, or when the intangible asset is expressed as a measure of revenue. The amendments to PAS 16, Property, Plant and Equipment explicitly state that revenue-based methods of depreciation cannot be used for property, plant and equipment. This is because such methods reflect factors other than the consumption of economic benefits embodied in the asset - e.g. changes in sales volumes and prices. The amendments are effective for annual periods beginning on or after January 1, 2016, and are to be applied prospectively. Early application is permitted. Equity Method in Separate Financial Statements (Amendments to PAS 27). The amendments allow the use of the equity method in separate financial statements, and apply to the accounting not only for associates and joint ventures, but also for subsidiaries. The amendments apply retrospectively for annual periods beginning on or after January 1, 2016. Early adoption is permitted. - 4 -

Effective January 1, 2018 PFRS 9, Financial Instruments (2014). PFRS 9 (2014) replaces PAS 39, Financial Instruments: Recognition and Measurement and supersedes the previously published versions of PFRS 9 that introduced new classifications and measurement requirements (in 2009 and 2010) and a new hedge accounting model (in 2013). PFRS 9 includes revised guidance on the classification and measurement of financial assets, including a new expected credit loss model for calculating impairment, guidance on own credit risk on financial liabilities measured at fair value and supplements the new general hedge accounting requirements published in 2013. PFRS 9 incorporates new hedge accounting requirements that represent a major overhaul of hedge accounting and introduces significant improvements by aligning the accounting more closely with risk management. The new standard is to be applied retrospectively for annual periods beginning on or after January 1, 2018 with early adoption permitted. Insurance Contracts Production Classification Insurance contracts are defined as those contracts under which the Parent Company (the insurer) accepts significant insurance risk from another party (the policyholders) by agreeing to compensate the policyholders if a specified uncertain future event (the insured event) adversely affects the policyholder. As a general guideline, the Parent Company defines significant insurance risk as the possibility of having to pay benefits on the occurrence of an insured event that is significantly greater than the benefits payable if the insured event did not occur. Insurance contracts can also transfer financial risk. Investment contracts are those contracts that transfer significant financial risk and no significant insurance risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, security price, commodity price, foreign exchange rate, index of price or rates, credit rating or credit index or other variables, provided in the case of non-financial variable that the variable is not specific to a party to the contract. Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during the period, unless all rights and obligations are extinguished or expired. Investment contracts can, however, be reclassified as insurance contracts after inception if the insurance risk becomes significant. Insurance and investment contracts are further classified as being with and without Discretionary Participation Feature (DPF). DPF is a contractual right to receive, as a supplement to guaranteed benefits, additional benefits that are: Likely to be a significant portion of the total contractual benefits; The amount or timing of which is contractually at the discretion of the issuer; and Contractually based on the following: Performance of a specified pool of contracts or a specified type of contract; or Realized or an unrealized investment returns on a specified pool of assets held by the issuer; or The profit or loss of the Parent Company, fund or other entity that issues the contract. - 5 -

The additional benefits include policy dividends that are declared annually, the amounts of which are computed using actuarial methods and assumptions, and are included under Policyholders dividends account in profit or loss with the corresponding liability recognized under the Reserve for policyholders dividends account in the separate statements of financial position. For financial options and guarantees which are not closely related to the host insurance contract, bifurcation is required to measure these embedded financial derivatives separately at FVPL. Bifurcation is not required if the embedded derivative itself is an insurance contract or when the host insurance contract itself is measured at FVPL. As such, the Parent Company does not separately measure options to surrender insurance contracts for a fixed amount (or an amount based on a fixed amount and an interest rate). Likewise, the embedded derivative in unit-linked insurance contracts linking the payments on the contract to units of an internal investment fund meets the definition of an insurance contract and is not, therefore, accounted for separately from the host insurance contract. Reinsurance Contracts Held Contracts entered into by the Parent Company with reinsurers under which the Parent Company is compensated for losses on one or more insurance contracts are classified as reinsurance contracts held. The benefits to which the Parent Company is entitled under its insurance contracts held are recognized as reinsurance assets. These assets consist of short-term balances due from reinsurers, as well as longer term receivables that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contracts and in accordance with the terms of each reinsurance contracts. Liabilities arising from these contracts are primarily premiums payable and are recognized as an expense when due. These liabilities are presented under Insurance payables account in the separate statements of financial position. An impairment review is performed at each reporting date or more frequently when an indication of impairment arises during the reporting year. Impairment occurs when objective evidence as a result of an event that occurred after initial recognition that the Parent Company may not recover outstanding amounts under the terms of the contract and when the impact on the amounts that the Parent Company will receive from the reinsurer can be measured reliably. Any impairment loss determined is recognized in profit or loss. Ceded reinsurance arrangements do not relieve the Parent Company from their obligations to the policyholders. The Parent Company also assumes reinsurance risk in the normal course of its business. Premiums and claims on assumed reinsurance are recognized as income and expense in the same manner as they would be if the reinsurance were considered direct business, taking into account the product classification of the reinsured business. The liabilities arising from these contracts are primarily claims and benefits payables and estimated in a manner consistent with the associated reinsurance contracts. These liabilities are presented under Insurance payables account in the separate statements of financial position. Premiums and claims are presented on a gross basis for both ceded and assumed reinsurance. - 6 -

Assets or liabilities from these contracts are derecognized when the contractual right is extinguished or expired or when the contract is transferred to another party. Insurance Contact Liabilities Legal Policy Reserves. Life insurance contract liabilities are recognized when the contracts are entered into and the premiums are recognized. These are determined by the Parent Company s actuary in accordance with the requirements of the Insurance Code (the Code ) and are calculated on the basis of a prudent prospective actuarial valuation method where the assumptions used depend in the operation of each life insurance product. These reserves represent the amounts which, together with future premiums and investment income, are required to discharge the obligations of the insurance contracts and to pay expenses related to the administration of those contracts. These reserves are determined using generally accepted actuarial practices and have been approved by the Insurance Commission (IC) at the product approval stage. Insurance Contracts with Fixed and Guaranteed Terms. A liability for contractual benefit expected to be incurred in the future is recorded when premiums are recognized. The liability is determined as the expected discounted value of the benefit payment less the expected discounted value of the theoretical premiums that would be required to meet the benefits based on the valuation assumptions used. The liability is based on mortality, morbidity and investments income assumptions that are established at the time the contract is issued. The Parent Company has different assumptions for different products. However, liabilities for contractual benefits are computed to comply with statutory requirements using the standard table of mortality with interest to be determined by IC. Reserves are computed per thousand of sum insured and depend on the issue age and policy duration. Unit-linked Insurance Contracts. A unit-linked insurance contract is an insurance contract linking payments to units of an internal investment fund set up by the Parent Company with the consideration received from the policyholders. The investment funds supporting the linked policies are maintained in segregated accounts in conformity with Philippine laws and regulations. The liability for such contracts is the higher amount between the policyholder s investment fund balance and the minimum guaranteed amount stated in the policy contract. Revenue from unit-linked insurance contracts consists of premiums received and policy administration fees. The reserve for unit-linked liabilities are increased by additional deposits and changes in unit prices and decreased by policy administration fees, fund charges, mortality and surrender charges and any withdrawals. As at the reporting date, this reserve is computed on the basis of the number of units allocated to the policyholders multiplied by the unit price of the underlying investment funds. Liability Adequacy Test. Liability adequacy tests are performed annually to ensure the adequacy of the insurance contract liabilities. In performing these tests, current best estimates of future contractual cash flows, claims handling and policy administration expenses are used. Any deficiency is immediately charged against the Parent Company s profit or loss initially by establishing a provision for losses arising from the liability adequacy tests. - 7 -

Reserve for Policyholders Dividends DPF is a contractual right that gives policyholders the right to receive supplementary discretionary returns through participation in the surplus arising from participating business. These returns are subject to the discretion of the Parent Company and are within the constraints of the terms and conditions of the contract. For group commercial and farmers lines, the Parent Company sets up the policyholders dividends due and accrued for all groups which have participating feature based on the agreed experience refund formula and an assessment of the individual groups prospective cash flows and operating results. For individual policyholders, all dividends due and accrued are carried for participating policies using an estimated dividend scale expected to be declared based on the Parent Company s profit emergence for the individual line. Insurance Receivables and Payables Receivables and payables are recognized when due. Insurance receivables and payables include amounts due from agents and policyholders and amounts due to reinsurers. If there is objective evidence that the insurance receivable is impaired, the Parent Company reduces the carrying amount of the insurance receivable and recognizes the impairment loss in profit or loss. Premium Deposit Fund This represents fund which will be used for payment of any unpaid premiums under the policy. The fund earns interest of 1.50% and 3.00% per annum for dollar and peso denominated policy, respectively, which is credited to the fund. The accumulated fund shall not exceed the total future premium payments under the policy. Financial Instruments Classification. The Parent Company classifies its financial assets in the following categories: financial assets at fair value through profit or loss (FVPL), available-for-sale (AFS) financial assets, held-to-maturity (HTM) investments and loans and receivables. The Parent Company classifies its financial liabilities either as financial liabilities at FVPL or other financial liabilities. The classification depends on the purpose for which the financial assets were acquired or incurred. Management determines the classification of its financial instruments at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date. Financial Assets or Financial Liabilities at FVPL. This category consists of financial instruments that are held for trading or designated by management on initial recognition. Financial assets and financial liabilities at FVPL are recorded in the separate statements of financial position at fair value, with changes in fair value recorded in profit or loss. Financial assets or financial liabilities are allowed to be designated by management on initial recognition in this category when the following criteria are met: The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or recognizing gains or losses on them on a different basis; or The assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or - 8 -

The financial instrument contains an embedded derivative, unless the embedded derivative does not significantly modify the cash flows or, it is clear, with little or no analysis, that it would not be bifurcated. Held-for-trading securities are not reclassified subsequent to their initial recognition, unless they are no longer held for the purpose of being sold or repurchased in the near term and the following conditions are met: If the financial asset would have met the definition of loans and receivables (if the financial asset had not been required to be classified as held-for-trading at initial recognition), then it may be reclassified if the Parent Company has the intention and the ability to hold the financial asset in the foreseeable future or until maturity; and The financial asset may be reclassified out of the held-for-trading securities category only under rare circumstances. As at December 31, 2014 and 2013, the Parent Company does not have any financial asset or financial liabilities designated by management as financial assets or financial liabilities at FVPL. However, the Parent Company s financial assets classified as heldfor-trading investments amounted to P1.14 billion and P0.76 billion as at December 31, 2014 and 2013, respectively (see Note 10). As at December 31, 2014 and 2013, the Parent Company s held-for-trading securities include government debt and equity securities. HTM Investments. HTM investments are quoted non-derivative financial assets with fixed or determinable payments and fixed maturities for which management has the positive intention and ability to hold to maturity. Where the Parent Company sells or reclassifies other than an insignificant amount of HTM investments, the entire category would be tainted and reclassified at fair value as AFS financial assets. After initial measurement, these investments are subsequently measured at amortized cost using the effective interest method, less any allowance for impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate (EIR). The amortization, if any, is included as part of interest income in profit or loss. As at December 31, 2014 and 2013, the Parent Company has no financial assets classified as HTM investments. AFS Financial Assets. AFS financial assets are financial assets which are designated as such, or do not qualify to be classified or have not been classified under any other financial asset category. They are purchased and held indefinitely and may be sold in response to liquidity requirements or changes in market conditions. As at December 31, 2014 and 2013, the Parent Company s AFS financial assets amounted to P9.05 million and P8.34 million, respectively, and composed of equity and government debt securities (see Note 11). Loans and Receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments and fixed maturities that are not quoted in an active market. These are not entered into with the intention of immediate or short-term resale and are not held for trading. - 9 -

As at December 31, 2014 and 2013, the Parent Company s cash and cash equivalents, insurance receivables, loans and receivables, accrued income, reinsurance assets and other assets pertaining to lease and leasehold deposits and refundable deposits are classified under this category. Cash and Cash Equivalents. Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less and are subject to an insignificant risk of change in value. Other Financial Liabilities. Issued financial instruments or their component, which are not classified as at FVPL are classified as other financial liabilities where the substance of the contractual arrangement results in the Parent Company having an obligation either to deliver cash or another financial asset to the holder or lender, or to satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Parent Company s own equity instruments. This category includes the Parent Company s policy and contract claims under Insurance contract liabilities account, reserve for policyholders dividends, premium deposit funds excluding amounts received which will be applied to premiums due, insurance payables and accounts payable and accrued expenses. Recognition and Measurements Financial instruments are recognized in the separate statements of financial position when the Parent Company becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace are recognized on the trade date. Financial instruments are initially recognized at fair value plus transaction costs for all financial assets not carried at FVPL. Financial assets carried at FVPL are initially recognized at fair value, and transaction costs are expensed in profit or loss. AFS financial assets and financial assets at FVPL are subsequently carried at fair value except for investments in equity instruments that do not have a quoted price in an active market and whose fair value cannot be reliably measured are carried at cost. Loans and receivables are subsequently carried at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in profit or loss in the period in which they arise. Changes in the fair value of AFS financial assets are recognized in other comprehensive income. When securities classified as AFS are sold or impaired, the accumulated fair value adjustments recognized in equity are included in profit or loss. Interest income calculated using the effective interest method and dividend income on financial assets at FVPL and AFS financial assets are recognized in profit or loss as part of Investment income when the Parent Company s right to receive payments is established. - 10 -

Determination of Fair Value A number of the Parent Company s accounting policies require the determination of fair values, for both financial and non-financial assets and liabilities. Determination of fair values requires evaluating, among others, whether the asset or liability is quoted or not in an active market. Included in the evaluation on whether an asset or liability is quoted in an active market is the determination of the principal market or, in the absence of a principal market, the most advantageous market, and whether the Parent Company can enter into a transaction at the price in that market at the measurement date. Fair values have been determined for measurement and/or disclosure purposes, when necessary, based on the estimated amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. When applicable, the Parent Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Impairment of Financial Assets The Parent Company assesses at each reporting date whether a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event ) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Loans and Receivables. The Parent Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Parent Company determines that no objectives evidence of impairment exists for individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment for impairment. For the purpose of a collective evaluation of impairment, loans and receivables are grouped on the basis of credit risk characteristics such as type of borrower, collateral type, credit and payment status, and term. - 11 -

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the excess of loan s carrying amount over its net realizable value, based on the present value of the estimated future cash flows from the asset. The present value of the estimated future cash flows is discounted at the loan s original EIR. Time value is generally not considered when the effect of discounting is not material. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR, adjusted for the original credit risk premium. The calculation of the present value of the estimated future cash flows of a collateral-dependent loan reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral. Any impairment loss determined is recognized in profit or loss. The carrying amount of an impaired loan is reduced to its net realizable value through the use of an allowance account. For an impaired loan, interest income continues to be recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. If, in a subsequent period, the amount of the allowance for impairment loss decreases because of an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed to profit or loss to the extent that the resulting carrying amount of the asset does not exceed its amortized cost had no impairment loss been recognized. Financial assets, particularly trade receivables, are written off to the extent of the amount determined by management to be uncollectible. Those with pending cases in court are written-off upon management s approval. AFS Financial Assets Carried at Fair Value. In case of equity investments classified as AFS financial assets, impairment indicators would include a significant or prolonged decline in the fair value of the investments below its cost. Where there is objective evidence of impairment, the cumulative loss in equity, measured as the difference between the acquisition cost and the current fair value, less any impairment loss previously recognized, is recorded in profit or loss. Subsequent increase in the fair value of an impaired AFS equity security is recognized in other comprehensive income. In the case of AFS debt securities, impairment is assessed based on the same criteria as financial assets carried at amortized cost. Interest continues to be accrued at the EIR on the reduced carrying amount of the asset and is recorded as part of interest income in profit or loss. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized, the impairment loss is reversed in profit or loss to the extent that the resulting carrying amount of the asset does not exceed its carrying amount had no impairment loss been recognized. AFS Financial Assets Carried at Cost. If there is an objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on derivative asset that is linked to and must be settled by delivery of such unquoted equity instrument has been incurred, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. The carrying amount of the asset is reduced through the use of an allowance account. - 12 -

Offsetting Financial Instruments Financial assets and financial liabilities are offset and the net amount is reported in the Parent Company s separate statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. This is generally not the case with master netting agreements, thus, the related assets and liabilities are presented on a gross basis in the separate statements of financial position. Income and expense are presented on a net basis only when permitted under PFRSs, such as in the case of any realized gains or losses arising from the Parent Company s trading activities. Classification of Financial Instruments between Debt and Equity A financial instrument is classified as debt if it has a contractual obligation to: Deliver cash or another financial asset to another entity, or Exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Parent Company. If the Parent Company does not have an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation, the obligation meets the definition of a financial liability. Derecognition of Financial Assets and Liabilities Financial Assets. A financial asset (or, where applicable a part of a financial asset or part of a group of financial assets) is derecognized when: The rights to receive cash flows from the asset have expired; or The Parent Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; or The Parent Company has transferred its rights to receive cash flows from the asset and either: (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained the risk and rewards of the asset but has transferred the control of the asset. Where the Parent Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Parent Company s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of original carrying amount of the asset and the maximum amount of consideration that the Parent Company could be required to repay. Financial Liabilities. A financial liability is derecognized when the obligation under the liability is discharged, cancelled or has expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, with the difference in the respective carrying amounts recognized in profit or loss. - 13 -

Investments in Subsidiaries and Associate A subsidiary is an entity over which the Parent Company has control. There is control when the Parent Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect returns through its power over the entity. Following the provisions of PAS 27, on the preparation of separate financial statements, investments in subsidiaries are accounted for at cost, less any impairment in value. The Parent Company recognizes income from the investment in subsidiaries only to the extent that the Parent Company receives distributions from accumulated profits of the investee arising after the date of acquisition. Distributions received in excess of such profits are regarded as a return of investment and are recognized as a reduction from the cost of the investment. An associate, on the other hand, pertains to an entity over which the Parent Company has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Cost of investments in subsidiaries and associate includes the purchase price and other costs directly attributable to the acquisition of the investment such as professional fees for legal services, transfer taxes and other transaction costs. This includes any excess of the cost of the acquisition over the fair value of identifiable net assets of a subsidiary or an associate at the date of acquisition. Subsequent to initial recognition, investments in shares of stock of associates are measured at cost. Dividend income on these associates is recognized when declared from accumulated profits of the investee. Investments in subsidiaries and associate are derecognized upon sale or disposal. Any gain or loss arising from derecognition is recognized in profit or loss. Gain or loss is computed as the difference between the proceeds from the disposal and its carrying amount. Real Estate Inventories Real estate inventories consist of columbary units. These are carried at the lower of cost and net realizable value (NRV). NRV is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost includes acquisition costs of columbary units and those costs incurred for the development and improvement of the properties. Investment Properties Properties held for long-term yields or for capital appreciation or for both, are classified as investment properties. These properties are initially measured at cost, which includes transaction costs, but excludes day-to-day servicing costs. Replacement cost is capitalized if it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be reliably measured. The carrying amount of those parts that are replaced is derecognized. Subsequently, at each reporting date, such properties are carried at cost less accumulated depreciation and impairment in value. Depreciation is computed using the straight-line method over its estimated useful life of ten (10) years. Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner occupation, commencement of an operating lease to another party or ending of construction or development. - 14 -

Transfers are made from investment properties when, and only when, there is a change in use, evidenced by commencement of owner occupation or commencement of development with a view to sell. Investment properties are derecognized when either their use change or they have been disposed of or when the investment properties are permanently withdrawn from use and no future benefit is expected from its disposal. Any gain or loss on the retirement or disposal of investment properties is recognized in profit or loss in the year of retirement or disposal. Property and Equipment Property and equipment are carried at cost less accumulated depreciation and amortization and any allowance for impairment in value. The initial cost of property and equipment comprises its purchase price, including any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the property and equipment as follows: Number of Years Buildings and leasehold improvements 5-10 or lease term, whichever is shorter Transportation equipment 5 Office furniture, fixtures and equipment 5 Subsequent costs are included in the asset s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Parent Company and the cost of the item can be reliably measured. All other repairs and maintenance costs are charged against profit or loss during the period in which these are incurred. The property and equipment s residual values, estimated useful lives and depreciation and amortization method are reviewed periodically to ensure that the residual value, period and method of depreciation and amortization are consistent with the expected pattern of economic benefits from items of property and equipment. Fully depreciated assets are retained in the accounts until they are no longer in use, at which time, the cost and the related accumulated depreciation and amortization are written off. An item of property and equipment is derecognized upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net disposal proceeds and the original of the asset) is included in profit or loss in the year the asset is derecognized. - 15 -

Intangible Asset Intangible asset pertains to the Parent Company s computer software. Costs incurred to acquire computer software (not an integral part of its related hardware) and bring it to its intended use are capitalized. These costs are amortized over their estimated useful lives ranging from three (3) to five (5) years. Cost directly associated with the development of identifiable computer software that generate expected future benefits to the Parent Company are recognized. All other costs of developing and maintaining computer software are recognized as expense when incurred. Gain or losses arising from the derecognition of the computer software are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss. Impairment of Non-financial Assets This accounting policy primarily applies to the Parent Company s real estate inventories, investment properties, property and equipment, and intangible asset. At each reporting date, the Parent Company assesses whether there is any indication that its non-financial assets may be impaired. When an indicator of impairment exists, the Parent Company estimates the recoverable amount of the impaired assets. The recoverable amount is the higher of the fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating unit). Value in use is the present value of future cash flows expected to be derived from an asset while fair value less costs of disposal is the amount obtainable from the sale of an asset in an arm s length transaction between knowledgeable and willing parties less cost of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the impaired asset is written down to its recoverable amount. An impairment loss is recognized in profit or loss in the period in which it arises. An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment loss may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. The reversal can be made only to the extent that the resulting carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortization, had no impairment loss been recognized. Such reversal is recognized in profit or loss. After such a reversal, the depreciation and amortization is adjusted in future years to allocate the asset s revised carrying amount, less any residual value, on a systematic basis over its remaining life. Provisions Provisions are recognized when the Parent Company has a present legal or constructive obligation as a result of past event, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. - 16 -

Provisions are measured at the present value of the amount expected to be required to settle the obligation using a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risk specific to the obligation. Where discounting is used, the increase in the provision due to the passage of time is recognized as interest expense. Where the Parent Company expects some or all of a provision to be reimbursed, the reimbursement is recognized only when the reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement. Net Pension Liability The Parent Company s net obligation in respect of the defined benefit plan is calculated by estimating the amount of the future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligation is performed on a periodic basis by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Parent Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. Remeasurements of the net pension liability, which comprise actuarial gains and losses, return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Parent Company determines the net interest expense (income) on the net pension liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net pension liability (asset), taking into account any changes in the net defined liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to the defined benefit plan are recognized in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. Short-term Employee Benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Parent Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Other Long-term Employee Benefits The Parent Company s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise. Termination Benefits Termination benefits are expensed at the earlier of when the Parent Company can no longer withdraw the offer of those benefits and when the Parent Company recognizes costs for restructuring. If benefits are not expected to be settled wholly within twelve months from the end of the reporting period, then they are discounted. - 17 -

Equity Capital Stock. Capital stock is measured at par value for all shares issued. Contributed Surplus. Contributed surplus represents additional contribution of shareholders as provided under the Code. Retained Earnings. Retained earnings represent the cumulative balance of the net income or loss of the Parent Company, net of any dividend distribution. Revaluation Reserve. Revaluation reserve is comprised of the following: (1) gains and losses due to the revaluation of AFS financial assets; and (2) actuarial gains and losses from the remeasurement of the net pension liability. Revenue Recognition Revenue is recognized to the extent that it is probable that economic benefits will flow to the Parent Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized: Net Premium Net premium is recognized as gross premium on insurance contracts less reinsurance premiums. Gross Premium on Insurance Contracts. Premiums arising from insurance contracts are initially recognized as income on the effective date of the insurance policies. Subsequent to initial recognition, gross earned premiums on life insurance contracts are recognized as revenue at the date when payments are due. Reinsurance Premiums Ceded. Gross reinsurance premiums on traditional and variable contracts are recognized as an expense when the policy becomes effective. Investment Income The Parent Company s investment income is comprised of interest income; fair value gain (loss) of financial assets at FVPL; dividend income; rental income; and gain (loss) on sale of AFS financial assets, real estate inventories and investment properties. Interest Income. Interest income is recognized on an accrual basis using the effective interest method. The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset. The EIR is established on initial recognition of the financial asset and is not revised subsequently. When the related financial asset becomes impaired, the recognition of interest income is suspended and/or limited up to the extent of cash collections received. The calculation of the EIR includes all fees, transaction costs, and discounts or premiums that are an integral part of the EIR. Transaction costs are incremental costs that are directly attributable to the acquisition or disposal of a financial asset. Dividend Income. Dividend income is recognized when the shareholder s right to receive payment is established. Rental Income. Rental income from investment properties is recognized on a straight-line basis over the lease term. - 18 -

Gain (loss) on Sale of AFS Financial Assets. Gain (loss) on the sale of AFS financial assets, other than those classified as financial assets at FVPL are calculated as the difference between net sales proceeds and acquisition cost less any impairment in value. Gain (loss) on the sale of AFS financial assets are recognized in profit or loss when the sales transaction occurred. Gain on Sale of Real Estate Inventory. Revenue from the sale of real estate inventory is measured at the fair value of the consideration received or receivable less the cost of real estate inventory at the date of sale. Revenue is recognized when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs can be estimated reliably, and the amount of revenue can be measured reliably. The transfer of risk and reward occurs when the rights to the real estate inventory is delivered to the customer. Service Fees Insurance contract of the policyholders are charged for policy administration services, surrenders and other contract fees. These fees and charges are recognized as revenue over the period in which the related services are performed. Other Income Income from other sources is recognized when earned. Net Benefits and Claims The Parent Company s net benefits and claims consist of gross benefits and claims, reinsurers share on benefits and claims, gross change in insurance contract liabilities and reinsurers share on gross change in insurance contract liabilities. Gross Benefits and Claims. Benefits and claims consist of benefits and claims of the policyholders, which includes excess benefit claims for unit-linked contracts. Death claims and surrenders are recorded on the basis of notifications received. Maturities and annuity payments are recorded when due. Reinsurers Share on Benefits and Claims. Reinsurers share on benefits and claims pertains to the amount recoverable from reinsurers for recognized claims during the year. Gross Change in Insurance Contract Liabilities. Gross change in insurance contract liabilities represents the change in the valuation of legal policy reserves under Insurance contract liabilities account in the separate statements of financial position. Reinsurers Share on Gross Change in Insurance Contract Liabilities. Reinsurers share on gross change in insurance contract liabilities pertains to the reinsurers share in the change in the valuation of legal policy reserves under Insurance contract liabilities account in the separate statements of financial position. Operating and Administrative Expenses Expenses are recognized when decrease in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably. Expenses are recognized when incurred. General and Administrative Expenses. General and administrative expenses, other underwriting expense and other investment expense, except for lease agreements, are recognized as expense as they are incurred. - 19 -

Commissions. Commissions are recognized when the insurance contracts are entered into and the related premiums are recognized. Investment Expenses. Investment expenses pertain to the interest incurred by the Parent Company in relation to the Investment accounts payable obtained to fund its investment in loans receivable (see Note 25). Interest Expenses. Interest expenses on accumulated policyholders dividends and premium deposit funds are recognized in profit or loss as it accrues and are calculated using the effective interest method. Accrued interest is credited to the liability account every policy anniversary date. Foreign Currency Transactions Transactions in foreign currencies are initially recorded using the exchange rate at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated using the closing exchange rates prevailing at reporting date; income and expenses are translated using the average rate for the year. Exchange gains or losses arising from foreign exchange transactions are credited to or charged against profit or loss. For income tax reporting purposes, foreign exchange gains or losses are treated as taxable income or deductible expenses, in the period such are realized. Leases The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies: a. there is a change in contractual terms, other than a renewal or extension of the arrangement; or b. a renewal option is exercised or extension granted, unless that term of the renewal or extension was initially included in the lease term; or c. there is a change in the determination of whether fulfillment is dependent on a specified asset; or d. there is a substantial change to the asset. Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gives rise to the reassessment for scenarios a, c or d above, and at the date of renewal or extension period for scenario b. Parent Company as Lessee Leases where the lessor does not transfer substantially all the risks and rewards of ownership of the related assets are classified as operating leases. Fixed lease payments are recognized as rent expense on a straight-line basis over the lease term. - 20 -

Parent Company as Lessor Leases where the Parent Company does not transfer substantially all the risks and benefits of ownership of the assets are classified as operating leases. Lease payments received are recognized as income in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as the rental income. Income Tax Current Income Tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxing authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted as at reporting date. Deferred Income Tax Deferred tax is provided, using the liability method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits from the excess of minimum corporate income tax (MCIT) over the regular corporate income tax (RCIT), and unused net operating loss carryover (NOLCO), to the extent that it is probable that sufficient taxable profit will be available against which the deductible temporary differences and carryforward of unused tax credits from MCIT and unused NOLCO can be utilized. Deferred tax, however, is not recognized on temporary differences that arises from the initial recognition of an asset or liability in a transaction, affects neither the accounting income nor taxable income or loss. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable income will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are applicable to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted at the reporting date. Current tax and deferred tax relating to items recognized directly in equity or other comprehensive income is also recognized in equity or comprehensive income and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and deferred taxes related to the same taxable entity and the same taxation authority. Movements in the deferred tax assets and liabilities arising from changes in tax rates are charged or credited to income for the period. - 21 -

Value-added Tax (VAT) Revenue, expenses and assets are recognized, net of the amount of sales tax, except: where the tax incurred on a purchase of assets or services is not recoverable from the tax authority, in which case the tax is recognized as part of the cost of acquisition of the asset or as part of the expense items as applicable; and receivables and payables that are stated with the amount of tax included. The net amount of VAT recoverable from or payable to the tax authority is included under Other liabilities in the separate statements of financial position. Contingencies Contingent liabilities are not recognized in the Parent Company s separate financial statements. They are disclosed unless the possibility of an outflow of resources embodying benefit is remote. Contingent assets are not recognized in the Parent Company s separate financial statements but disclosed when an inflow of economic benefits is probable. Events After the Reporting Date Post year-end events that provide additional information about the Parent Company s financial position at the reporting date (adjusting events) are reflected in the separate financial statements when material. Post year-end events that are not adjusting events are disclosed in the notes to the separate financial statements when material. 4. Critical Accounting Judgments and Estimates The Parent Company makes judgment and estimates that affect the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities, if any, within the next accounting period. These judgments and estimates are continually evaluated and are adjusted based on historical experience and other relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Judgments In the process of applying Parent Company s accounting policy, management has made the following judgments, apart from those involving estimation, which have the most significant effect on the amounts recognized in the Parent Company s financial statements: a) Product Classification The Parent Company has determined that the unit-linked insurance policies it issues that link the payments on the contract to units of internal investment funds has significant insurance risk and therefore meets the definition of an insurance contract and should be accounted for as such. - 22 -

b) Impairment of Financial Assets Investments at Fair Value The Parent Company considers that investments are impaired when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is significant or prolonged decline requires judgment. The Parent Company treats significant generally as twenty percent (20%) or more and prolonged as greater than twelve (12) months for quoted equity securities. In addition, the Parent Company evaluates other factors, including normal volatility in share price for quoted securities and the future cash flows and the discount factors for unquoted securities. In making this judgment, the Parent Company evaluates among other factors, the normal volatility in share/market price. In addition, impairment may be appropriate when there is evidence of deterioration in the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flows. Receivables The Parent Company reviews its receivables to assess impairment at least on an annual basis, or as the need arises due to significant movements on certain accounts. Receivables from policyholders and reinsurance that are individually significant are assessed to determine whether objective evidence of impairment exists on an individual basis, while those that are not individually significant are assessed for objective evidence of impairment either on an individual or on collective basis. In determining whether an impairment loss should be recorded in profit or loss, the Parent Company makes judgment as to whether there are any observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of receivables before the decrease can be identified with an individual receivable in that portfolio. Estimates and Assumptions The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (a) Insurance Contract Liabilities The estimation of the ultimate liability arising from claims made under life insurance contract is the Parent Company s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimation of the liability that the Parent Company will ultimately pay to settle its benefits and claims. The liability of the life insurance contracts are based on assumptions established at the inception of the contract. At each reporting date, these estimates are reassessed for adequacy and changes will be reflected in adjustments to the liability. The main assumptions used relate to mortality, morbidity, investments and discount rates. In determining the liabilities for life insurance contracts, estimates are made as to the expected number of deaths, illness or injury for each of the years in which the Parent Company is exposed to such risks. These estimates are based on standard mortality and morbidity tables as required by the Code. The estimated number of deaths, illness or injury determines the value of possible future benefits to be paid out, which will be factored to insure sufficient amount of reserves, which in return is monitored against current and future premiums. - 23 -

Estimates are also made as to future investment income arising from the assets backing life insurance contracts. These estimates are based on current market returns, as well as expectations about future economic and financial developments. In accordance with the provision of the Code, estimates for future deaths, illness or injury and investment returns are determined at the inception of the contract and are used to calculate the liability over the term of the contract. The interest rate used to discount future liabilities does not exceed the interest rate prescribed by the Insurance Commission. Likewise, no lapse and surrender assumptions are factored in the computation of the liabilities. Legal policy reserves are calculated in accordance with the requirements of the Code. The liability adequacy test was performed using current best estimates on interest, mortality, lapsation and expenses. The net present value of future cash flows as at December 31, 2014 and 2013 computed under the requirements of PFRS 4, amounted to cash outflows of P8.98 billion and P7.99 billion, respectively. Accordingly, the recorded statutory reserves as at December 31, 2014 and 2013 of P9.33 billion and P8.12 billion, respectively, is adequate using best estimate assumptions (see Note 21). (b) Liabilities arising from Claims made under Insurance Contracts There are several sources of uncertainty that need to be considered in the estimation of the liability that the Parent Company will ultimately pay for such claims. Although the ultimate liability arising from life insurance contracts is largely determined by the face amount of each individual policy, the Parent Company also issues accident and health policies and riders where the claim amounts may vary. Claims estimation by the Parent Company considers many factors such as industry average mortality and morbidity experience, with adjustments to reflect Parent Company s historical experience. These liabilities form part of the Parent Company s Incurred but not Reported (IBNR) claims which amounted to P547.95 million and P561.27 million as at December 31, 2014 and 2013, respectively, included in policy and contract claims under Insurance contract liabilities. (c) Impairment of Financial Assets The Parent Company reviews its loans and receivables at each reporting date to assess whether an allowance for impairment should be recorded in profit or loss. In particular, judgment by management is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required. Such estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance. The level of this allowance is evaluated by management on the basis of factor that affects the collectability of the accounts. These factors include, but are not limited to age of balances, financial status of counterparties, payment behavior and known market factors. The Parent Company reviews the age and status of receivables, and identifies accounts that are to be provided with allowance on a regular basis. - 24 -

In addition to specific allowance against individually significant loans and receivables, the Parent Company also makes a collective impairment allowance against exposures which, although not specifically identified as requiring a specific allowance, have a greater risk of default than when originally granted. This collective allowance is based on any deterioration in the internal rating of the loan or investment since it was granted or acquired. These internal ratings take into consideration factors such as concentration risks, identified structural weaknesses and deterioration in cash flows. The amount and timing of recorded expenses for any period would differ if the Parent Company made different judgments or utilized different estimates. An increase in allowance for impairment losses would increase recorded expenses and decrease net income. Provision for impairment loss amounted to P55.12 million and P46.23 million in 2014 and 2013, respectively (see Note 31). Insurance receivables and loans and receivables, net of allowance for impairment losses, amounted to P8.10 billion and P6.84 billion as at December 31, 2014 and 2013, respectively (see Notes 9 and 12). (d) NRV of Real Estate Inventories The Parent Company reviews real estate inventories for probable impairment in value. Management s judgment in determining if the real estate inventories are impaired is based on the assessment of the asset s estimated net selling price and management s plan in discontinuing the real estate projects. Estimated selling price is derived for publicly available market data and historical experience, while estimated cost of disposal are basically commission expense based on historical experience. Management would also obtain the services of an independent appraiser to determine fair value of undeveloped land based on the latest selling prices of the properties of the same characteristics of the undeveloped land. As at December 31, 2014 and 2013, the carrying value of real estate inventories amounted to P31.82 million and P34.56 million, respectively (see Note 16). (e) Impairment of Non-financial Assets The Parent Company assesses impairment on assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the Parent Company considers important which could trigger an impairment review include the following: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of the acquired assets or the strategy for overall business; and significant negative industry or economic trends. The Parent Company recognizes an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is computed using the value in use approach. Recoverable amounts are estimated for individual assets or, if it is not possible, for cash-generating unit to which the asset belongs. - 25 -

The Parent Company recognizes an impairment loss on real estate inventories whenever NRV is lower than cost. NRV is the estimated selling price in the ordinary course of business, less estimated necessary costs to sell. As at December 31, 2014 and 2013, real estate inventories, investment properties, property and equipment, and intangible assets aggregated to P762.57 million and P679.73 million, respectively (see Notes 16, 17, 18 and 19). (f) Realization of Deferred Tax Assets Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which these can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized. These assets are periodically reviewed for realization. Periodic reviews cover the nature and amount of deferred income and expense items, expected timing when assets will be used or liabilities will be required to be reported, reliability of historical profitability of businesses expected to provide future earnings and tax planning strategies which can be utilized to increase the likelihood that tax assets will be realized. As at December 31, 2014 and 2013, the recognized deferred tax assets amounted to P101.27 million and P52.71 million, respectively (see Note 33). As at December 31, 2014 and 2013, the unrecognized deferred tax assets amounted to nil and P99.08 million, respectively (see Note 33). (g) Pension and Other Employee Benefits The determination of pension obligation and other employee benefit is dependent on the selection of certain assumptions used in calculating such amounts. Those assumptions include, among others, discount rates, mortality rates and salary increase rates. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. The assumed discount rates were determined using the market yields of Philippine government bonds with terms consistent with the expected employee benefit payout as at the separate statements of financial position date. As at December 31, 2014 and 2013, the Parent Company s net pension liability amounted to P199.79 million and P59.00 million, respectively (see Note 32). (h) Contingencies The Parent Company is currently involved in various legal proceedings. The estimate of the probable costs for the resolution of these claims has been developed in consultation with the legal counsels and based upon an analysis of potential results. The Parent Company currently does not believe these proceedings will have a material adverse effect on the Parent Company s separate statements of financial position. It is possible, however, that the results of operations could be materially affected by changes in the estimates. - 26 -

5. Insurance and Financial Risks Management The primary objective of the Parent Company s risk and financial management framework is to protect the Parent Company from events that hinder the sustainable achievement of the Parent Company s performance objectives including failing to exploit opportunities. The Parent Company recognizes the critical importance of having efficient and effective risk management systems in place. The Parent Company has established a risk management function with clear terms of reference for the BOD, its committees and the associated executive management committees. Further, a clear organizational structure with documented delegated authorities and responsibilities from the BOD to executive management committees and senior managers has been developed. Lastly, a policy framework which sets out the risk appetite of the Parent Company, risk management, control and business conduct standards for the Parent Company s operations has been put in place. Each policy has a member of senior management who is charged with overseeing compliance with the policy throughout the Parent Company. The BOD has approved the Parent Company risk management policies and meets monthly to approve on any commercial, regulatory and own organization requirements in such policies. The policies define the Parent Company s identification of risk and its interpretation, limit structure to ensure the appropriate quality and diversification of assets, alignment of underwriting and reinsurance strategy to the corporate goals and specify reporting requirement. Insurance Risk The risk under an insurance contract that an insured event will occur including the uncertainty of the amount and timing of any resulting claim. The principal risk the Parent Company faces under such contracts is that the actual claims and benefits payments exceed the carrying amount of insurance liabilities. This is influenced by the frequency of claims, severity of claims and actual benefits paid are greater than originally estimated. Terms and Conditions The Parent Company principally writes life insurance where the life of policyholder is insured against death, illness, injury or permanent disability, usually for pre-determined amount. Life insurance contracts offered by the Parent Company mainly include whole life insurance, term insurance, endowments and unit-linked products. Whole life insurance and term insurance are conventional products where lump sum benefits are payable on death. Endowment products are investments/savings products where lump sum benefits are payable after a fixed period or on death before the period is completed. Unit-linked products differ from conventional policies as in unit-linked products, a guaranteed percentage of each premium is allocated to units in a pooled investment fund and the policyholder benefits directly from the total investment growth and income of the fund. The risks associated with the life and accident and health products are underwriting risk and investment risk. - 27 -

The main risks the Parent Company is exposed to include: Mortality Risk - risk of loss arising from policyholder death experience being different than expected. Morbidity Risk - risk of loss arising from policyholder health experience being different than expected. Expense Risk - risk of loss arising from expense experience being different than expected. Policyholder Decision Risk - risk of loss arising from policyholder experience (lapses and surrenders) being different than expected. These risks do not vary significantly in relation to the location of the risk insured by the Parent Company, type of risk insured and by industry. Undue concentration by amounts could have an impact on the severity of benefit payments on a portfolio basis. The Parent Company s underwriting strategy is designated to ensure that risks are well diversified in terms of type of risk and level of insured benefits. This is largely achieved through diversification across industry sectors and geography, the use of medical screening in order to ensure that pricing takes account of current health conditions and family medical history, regular review of actual claims experience and product pricing, as well as detailed claims handling procedures. Underwriting strategy is in place to enforce appropriate risk selection criteria. Concentration of Insurance Risk The table below sets out the Parent Company s concentration of insurance risk based on the sum assured: Number of Policies 2014 2013 Number Sum assured of Policies Sum assured Group life 446,931 P611,475,475,539 449,744 P303,904,378,839 Accident and health 16,095 94,888,394,790 17,504 5,215,378,184 Endowment 47,982 12,424,414,592 40,277 9,803,980,575 Whole life 27,078 8,717,018,618 28,110 8,544,235,019 Term 13,488 4,053,257,005 14,141 4,457,673,832 Variable/unit-linked 2,601 3,355,481,605 1,973 2,526,752,744 554,175 P734,914,042,149 534,263 P334,452,399,193 The table below sets out the concentration of life insurance liabilities by type of contract, at gross and net of reinsurance. Gross Legal Policy Reserve 2014 2013 Net Gross Legal Policy Legal Policy Reserve Reserve Reinsurers Share on Liabilities Reinsurers Share on Liabilities Net Legal Policy Reserve Endowment P3,268,882,492 P832,382 P3,268,050,110 P3,012,361,722 P734,262 P3,011,627,460 Variable/unit-linked 2,509,559,280-2,509,559,280 1,893,462,467-1,893,462,467 Whole life 2,079,538,221 3,307,440 2,076,230,781 1,849,525,778 3,134,445 1,846,391,333 Group life 1,032,918,450 26,457,274 1,006,461,176 879,360,368-879,360,368 Term 228,301,383 1,597,660 226,703,723 286,397,121 1,873,314 284,523,807 Accident and health 210,921,332-210,921,332 197,994,027-197,994,027 P9,330,121,158 P32,194,756 P9,297,926,402 P8,119,101,483 P5,742,021 P8,113,359,462-28 -

The table below sets out the concentration of life insurance liabilities with and without DPF, at gross and net of reinsurance. Gross Legal Policy Reserve 2014 Reinsurers Share on Liabilities Net Legal Policy Reserve With fixed and guaranteed terms Fixed and guaranteed - non-participating P4,771,449,406 P29,668,378 P4,741,781,028 Partially fixed and guaranteed - participating 2,049,112,472 2,526,378 2,046,586,094 Unit linked 2,509,559,280-2,509,559,280 Total insurance liabilities P9,330,121,158 P32,194,756 P9,297,926,402 Gross Legal Policy Reserve 2013 Reinsurers Share on Liabilities Net Legal Policy Reserve With fixed and guaranteed terms Fixed and guaranteed - non-participating P4,393,520,265 P3,332,162 P4,390,188,103 Partially fixed and guaranteed - participating 1,832,118,751 2,409,859 1,829,708,892 Unit linked 1,893,462,467-1,893,462,467 Total insurance liabilities P8,119,101,483 P5,742,021 P8,113,359,462 Classification by Attained Age (Based on 2014 and 2013 Data of Inforce Policies) The table below presents the concentration of risk by attained age. For individual insurance, exposure is concentrated on age brackets 40-44 to 50-54 and those below 20. Attained Age Gross of Reinsurance Exposure 000 2014 Individual Concentration (%) Exposure 000 Net Reinsurance Concentration (%) <20 P1,099,431,615 19.71% P1,099,273,203 19.73% 20-24 177,781,412 3.19% 177,717,566 3.19% 25-29 284,548,935 5.10% 284,430,676 5.10% 30-34 425,523,643 7.63% 425,292,901 7.63% 35-39 523,038,086 9.38% 522,453,221 9.38% 40-44 559,500,782 10.03% 558,957,880 10.03% 45-49 629,385,796 11.29% 628,707,159 11.29% 50-54 666,640,335 11.95% 665,812,158 11.95% 55-59 531,678,304 9.53% 530,556,451 9.52% 60-64 384,354,405 6.89% 383,654,728 6.89% 65-69 170,885,909 3.06% 170,519,895 3.06% 70-74 91,529,137 1.64% 91,228,736 1.64% 75-79 26,578,461 0.48% 26,536,175 0.48% 80 + 5,845,276 0.10% 5,843,866 0.10% Total P5,576,722,096 100.00% P5,570,984,615 100.00% - 29 -

Attained Age Gross of Reinsurance Exposure 000 2013 Individual Concentration (%) Exposure 000 Net Reinsurance Concentration (%) <20 P1,052,518,980 20.44% P1,052,408,988 20.46% 20-24 153,388,789 2.98% 153,320,544 2.98% 25-29 250,224,311 4.86% 250,086,805 4.86% 30-34 359,459,911 6.98% 359,217,462 6.99% 35-39 482,545,295 9.37% 481,934,749 9.37% 40-44 519,848,655 10.10% 519,343,698 10.10% 45-49 603,601,616 11.72% 602,780,969 11.72% 50-54 636,415,955 12.36% 635,406,379 12.36% 55-59 489,348,285 9.51% 488,449,240 9.50% 60-64 357,168,756 6.94% 356,438,396 6.93% 65-69 155,265,700 3.02% 154,906,813 3.01% 70-74 59,791,566 1.16% 59,624,783 1.16% 75-79 22,623,601 0.44% 22,541,804 0.44% 80 + 6,083,198 0.12% 6,081,970 0.12% Total P5,148,284,618 100.00% P5,142,542,600 100.00% The table below presents the concentration of risk by business type for group insurance. 2014 2013 Net Reinsurance Net Reinsurance Business Type Exposure Concentration Exposure Concentration Credit life insurance P846,747,758 84.13% P649,201,453 73.83% Employer-employee/ association benefit 74,217,048 7.38% 73,637,423 8.37% Compulsory migrant workers insurance 38,293,711 3.80% 110,813,773 12.60% Personal accident 20,474,743 2.04% 9,464,094 1.08% Coconut farmers insurance 11,387,543 1.13% 7,000,681 0.80% Microinsurance 10,575,797 1.05% 12,076,403 1.37% Reinsurance assumed 4,155,449 0.41% 6,924,257 0.79% Preneed planholders 609,127 0.06% 10,241,784 1.16% P1,006,461,176 100.00% P879,360,368 100% The table below presents the concentration of risk by industry type for accident and health insurance. 2014 2013 Net Reinsurance Net Reinsurance Industry Type Exposure Concentration Exposure Concentration Nonfinancial P147,501,954 69.93% P122,209,821 61.72% Financial 58,596,533 27,78% 53,380,799 26.96% Government 3,385,159 1.61% 20,069,984 10.14% Non-profit institutions 1,437,686 0.68% 2,333,423 1.18% P210,921,332 100.00% P197,994,027 100% Source of Uncertainty in the Estimation of Future Claim Payment Estimation of future payments and premium receipts is subject to unpredictability of changes in mortality and morbidity levels. The Parent Company adopts standard industry data in assessing future benefit payments and premium receipts as approved by IC. Adjustments are made, if necessary, according to the experience of the Parent Company. - 30 -

For individual life insurance, no adjustment is made by the Parent Company to the standard mortality table. For group life, accident and health insurance, the mortality table is adjusted to reflect the Parent Company s actual and projected experiences which are given weights or credibility depending on the amount and length of exposure under consideration. The Parent Company currently monitors its actual experience on individual business on a per policy basis and on an aggregate basis, and reporting the same to management. The liability for these contracts comprises the IBNR provision, a provision for reported claims not yet paid and a provision for unexpired risk at reporting dates. The IBNR provision is based on historical experience and is subject to a degree of uncertainty. Key Assumptions Material judgment is required in determining the liabilities and in the choice of assumptions relating to insurance contracts. Assumptions are based on past experience, current internal data and conditions and external market indices and benchmarks, which reflect current observable market prices and other published information. Such assumptions are determined as appropriate at inception of the contract and no credit is taken for possible beneficial effects of voluntary withdrawals. Assumptions are further evaluated on a continuous basis in order to ensure realistic and reasonable valuations. Assumptions are subject to the provisions of the Code and guidelines set by IC. For insurance contracts, the Parent Company determines the assumptions in relation to future deaths, illness or injury and investment returns at inception of the contract. Subsequently, new estimates are developed at each reporting date and liabilities are tested to determine whether such liabilities are adequate in the light of the latest current estimates. The initial assumptions are not altered if the liabilities are considered adequate. If the liabilities are not adequate, assumptions are altered ( unlocked ) to reflect the latest current estimates. As a result, the effect of changes in the underlying variables on insurance liabilities and related assets is not symmetrical. Improvements in estimates have no impact on the value of the liabilities and related assets, while significant deteriorations in estimates have an impact. The key assumptions to which the estimation and adequacy testing of liabilities are particularly sensitive are as follow: Mortality and Morbidity Rates Assumptions are based on standard industry and national mortality and morbidity tables, according to the type of contract written and which may be adjusted where appropriate to reflect the Parent Company s own experiences. Assumptions are differentiated by age, underwriting class and contract type. An increase in mortality and morbidity rates would lead to a larger number of claims and claims occurring sooner than anticipated, increasing the expenditure and generally reducing profits for the shareholders. - 31 -

Discount Rate Life insurance liabilities are determined as the sum of the discounted value of the expected benefits, less the discounted value of the expected theoretical premiums that would be required to meet these future cash outflows. The weighted average rate of return is derived based on model portfolio that is assumed to back up liabilities, consistent with the long-term assets allocation strategy. These estimates are based on current market returns as well as expectations about future economic and financial developments. Interest rates used for estimating liabilities is determined by the Insurance Commissioner. An increase in investment return would lead to an increase in profits for the shareholders. A decrease in the discount rate will increase the value of the liability. As required by the Code, lapse, surrender and expense assumptions are not factored in the computation of the insurance contract liabilities. Sensitivities As part of the Parent Company s investment strategy, in order to reduce both insurance and financial risk, the Parent Company matches its investments to the liabilities arising from insurance, by reference to the type of benefits payable to the policyholders. The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on liabilities, income and equity. The correlation of variables will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, assumption changes had to be done on an individual basis. It should be noted that movements in these variables are nonlinear. 2014 Mortality/morbidity Discount rate 2013 Mortality/morbidity Discount rate Change in Assumption Increase (Decrease) on Net Liabilities Increase (Decrease) on Profit before Tax Increase (Decrease) on Equity 110% of original mortality table P65,402,859 (P65,402,859) (P65,402,859) 90% of original mortality table (65,539,363) 65,539,363 65,539,363 Original valuation interest rate +1% (516,057,785) (516,057,785) (516,057,785) Original valuation interest rate -1% P670,269,228 P670,269,228 P670,269,228 Change in Assumption Increase (Decrease) on Net Liabilities Increase (Decrease) on Profit before Tax Increase (Decrease) on Equity 110% of original mortality table P59,466,564 (P59,466,564) (P59,466,564) 90% of original mortality table (61,664,190) 61,664,190 61,664,190 Original valuation interest rate +1% (464,151,768) 464,151,768 464,151,768 Original valuation interest rate -1% 599,769,069 (599,769,069) (599,769,069) The methods used for deriving sensitivity information and significant assumptions did not change from the previous period. - 32 -

Investment Risk The investment risk represents the exposure to loss resulting from cash flows from invested assets, primarily long-term fixed rate investments, being less than the cash flows required to meet the obligations of the expected policy and contract liabilities and the necessary return on investments. Additionally, there exists a future investment risk associated with certain policies currently in force which will have premium receipts in the future. That is, the investment of those future premiums receipts may be at a yield below that required to meet future policy liabilities. To maintain an adequate yield to match the interest necessary to support future policy liabilities, management reinvest the proceeds of the maturing securities and future premium receipts to financial instruments with satisfactory investment quality. The Parent Company s strategy is to invest primarily in high quality securities while maintaining diversification to avoid significant exposure to issuer, industry and/or country concentrations taking into consideration limitations set by IC. Another strategy is to produce cash flows required to meet maturing insurance liabilities. The Parent Company invests in equities for various reasons, including diversifying its overall exposure to equity price risk. AFS financial assets are subject to declines in fair value. Generally, insurance regulations restrict the type of assets in which an insurance company may invest. The Parent Company uses asset-liability matching (ALM) as a management tool to determine the composition of the invested assets and appropriate investment and marketing strategies. As part of these strategies, the Parent Company may determine that it is economically advantageous to be temporarily in an unmatched position due to anticipated interest rate or other economic changes. Financial Risk The Parent Company is exposed to financial risk through its financial assets, financial liabilities and insurance liabilities. In particular, the key financial risk that the Parent Company is exposed to is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance contracts. The most important components of this financial risk are credit risk, liquidity risk and market risk. There has been no change to the Parent Company s exposure to financial risks (i.e. credit risk, liquidity risk and market risks) or the manner in which it manages and measures the risks since prior financial year. Credit Risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The following policies and procedures are in place to mitigate the Parent Company s exposure to credit risk: A credit risk policy setting out the assessment and determination of what constitutes credit risk for the Parent Company. Compliance with the policy is monitored and exposures and breaches are reported to the Parent Company s risk committee. The policy is regularly reviewed for pertinence and for changes in the risk; Net exposure limits are set for each counterparty or group of counterparties, geographical and industry segments (i.e., limits are set for investments and cash deposits, foreign exchange trade exposures and minimum credit ratings for investments that may held); - 33 -

Reinsurance is placed with highly rated counterparties and concentration of risk is avoided by following policy guidelines in respect of counterparties limits that are set each year and are subject to regular reviews. At each reporting date, management performs an assessment of creditworthiness of reinsurers and updates the reinsurance purchase strategy, ascertaining suitable allowance for impairment; The Parent Company sets the maximum amounts and limits that may be advanced to corporate counterparties by reference to their long term credit ratings; and The credit risk in respect of customer balances, incurred on nonpayment of premiums or contributions will only persist during the grace period specified in the policy document or trust deed until expiry, when the policy is either paid up or terminated. Commissions paid to intermediaries are offset against any amounts due to reduce the risk of noncollection. Except for mortgage loans, collateral loans, installment contract receivable and policy loans, the maximum exposure to credit risk of all financial assets is equal to their carrying amounts. Policy loans are secured by the cash surrender values on the related policies. The Parent Company grants policy loans up to the extent of the cash surrender values accumulated on the latest policy anniversary dates. The Parent Company is not exposed to credit risk with respect to policy loans. The tables below show the financial effect of the collateral and credit enhancement to the Parent Company s maximum credit risk as at December 31, 2014 and 2013: Gross Maximum 2014 Fair Value of Collateral or Credit Enhancement Net Exposure Financial Effect of Collateral or Credit Enhancement Mortgage loans P2,454,634,764 P2,056,605,578 P398,029,186 P2,056,605,578 Installment contract receivables 370,098,469 372,608,841-370,098,469 Collateral loans 158,709,874 161,455,909 161,455,909 161,455,909 P2,983,443,107 P2,590,670,328 P559,485,095 P2,588,159,956 Gross Maximum 2013 Fair Value of Collateral or Credit Enhancement Net Exposure Financial Effect of Collateral or Credit Enhancement Mortgage loans P1,905,657,938 P2,407,134,126 P - P1,905,657,938 Installment contract receivables 369,758,297 372,266,362-369,758,297 Collateral loans 66,766,812 1,155,215 65,611,597 1,155,215 P2,342,183,047 P2,780,555,703 P65,611,597 P2,276,571,450 The Parent Company s concentration of credit risk arises from loans and receivables since the said financial instruments amounted to P8.08 billion (2013: P7.08 billion) and 44% (2013: 39%) of its total financial assets as at December 31, 2014. - 34 -

The following tables provide information regarding the credit risk exposure of the Parent Company by classifying assets according to the Parent Company s credit ratings of counterparties. Neither Past Due nor Impaired Non- Investment Grade Satisfactory Investment Grade Non- Investment Grade Unsatisfactory 2014 Past Due but not Impaired Past Due and Impaired Cash and cash equivalents P1,474,700,678 P - P - P - P - P1,474,700,678 Insurance receivables Premiums due and uncollected - 327,908,833-58,257,209 9,450,822 395,616,864 Due from agents - 27,855,096-5,132,414 17,182,694 50,170,204 Financial assets at FVPL Debt securities 400,504,351 - - - - 400,504,351 AFS financial assets Debt securities 626,982,228 - - - - 626,982,228 Loans and receivables Notes receivable 588,755,405 14,984,832 12,828,719 2,355,272,643 182,892,887 3,154,734,485 Mortgage loans 2,010,743,373 36,115,900 4,348,412 388,069,294 15,357,785 2,454,634,764 Policy loans 10,281,893 - - - - 10,281,893 Installment contracts receivable 18,982,733 502,257 344,109 350,269,370-370,098,469 Claims receivable - 247,909,477 - - - 247,909,477 HMO billback 96,936,934 40,482,708 38,249,877 204,658,794 116,814,718 497,143,031 Investment accounts receivable 380,122,851-6,074,915 63,597,144 13,107,049 462,901,958 Advances to officers and employees 962,583 1,687,134 49,748 2,601,789-5,301,255 Collateral loans 102,361,005-296,568 50,148,914 5,903,387 158,709,874 Others 50,007,342 32,331,031 18,831,349 - - 100,719,723 Reinsurance assets - 38,000,000 - - - 38,000,000 Total P5,761,341,376 P767,777,268 P80,573,697 P3,478,007,571 P360,709,341 P10,448,409,253 Neither Past Due nor Impaired Non- Investment Grade Satisfactory Investment Grade Non- Investment Grade Unsatisfactory 2013 Past Due but not Impaired Past Due and Impaired Cash and cash equivalents P1,791,564,286 P - P - P - P - P1,791,564,286 Insurance receivables Premiums due and uncollected 19,065,924 154,069,350 - - 26,633,516 199,768,790 Due from agents 27,158,444 3,703,423 - - - 30,861,867 Financial assets at FVPL Debt securities 161,872,186 - - - - 161,872,186 AFS financial assets Debt securities 353,873,246 - - - - 353,873,246 Loans and receivables Notes receivable 2,618,970,713 23,221,786 8,364,438-253,072,388 2,903,629,325 Mortgage loans 1,351,513,651 125,179,534 6,172,721 407,434,247 15,357,785 1,905,657,938 Policy loans 549,328,568 - - - - 549,328,568 Installment contracts receivable 367,580,003-2,178,294 - - 369,758,297 Claims receivable - 232,872,070 - - - 247,909,477 HMO billback 317,951,447 - - - 96,261,326 414,212,773 Investment accounts receivable 496,701,476 82,097 4,394,029-15,582,780 516,760,382 Advances to officers and employees 29,890,753 468,237 388,204-2,349,212 33,096,406 Collateral loans 17,719,622-381,303-48,665,887 66,766,812 Others 74,728,081 127,463 183,894 - - 75,039,438 Reinsurance assets - 28,698,683 - - - 28,698,683 P8,177,918,400 P568,422,643 P22,062,883 P407,434,247 P472,960,301 P9,648,798,474 Total - 35 -

The Parent Company uses an internal credit rating concept based on the borrower s and counterparties overall credit worthiness, as follows: Investment Grade - Rating given to borrowers and counterparties who have very strong capacity to meet their obligations. Non-investment Grade - satisfactory - Rating given to borrowers and counterparties whose outstanding obligation is within the acceptable age Non-investment Grade - unsatisfactory of group. - Rating given to borrowers and counterparties whose outstanding obligation is nearing to be past due or impaired. The tables below show the aging analysis of the financial assets. <30 Days 31 to 60 Days 2014 61 to 90 Days Past Due but not Impaired More than 90 Days Past Due and Impaired Insurance receivables Premiums due and uncollected P174,552,713 P64,677,907 P88,678,213 P58,257,209 P9,450,822 P395,616,864 Due from agents 18,272,664 5,993,190 3,589,242 5,132,414 17,182,694 50,170,204 Loans and receivables Notes receivable 588,755,405 14,984,832 12,828,719 2,355,272,643 182,892,887 3,154,734,485 Mortgage loans 2,010,743,373 36,115,900 4,348,412 388,069,294 15,357,785 2,454,634,764 Installment contracts receivable 18,982,733 502,257 344,109 350,269,370-370,098,469 Healthcare management organization (HMO) billback 96,936,934 40,482,708 38,249,877 204,658,794 116,814,718 497,143,031 Collateral loans 102,361,005-296,568 50,148,914 5,903,387 158,709,874 Advances to officers and employees 962,583 1,687,134 49,748 2,601,789-5,301,255 Investment accounts receivable 380,122,851-6,074,915 63,597,144 13,107,049 462,901,958 Others 76,658,788 12,660,469 8,661,896 2,738,569-100,719,722 Total P3,468,349,049 P177,104,397 P163,121,699 P3,480,746,140 P360,709,341 P7,650,030,626 Total <30 Days 31 to 60 Days 2013 61 to 90 Days Past Due but not Impaired More than 90 Days Past Due and Impaired Insurance receivables Premiums due and uncollected P96,494,278 P37,511,528 P19,167,811 P46,595,173 P26,633,516 P199,768,790 Due from agents 1,481,370-2,222,053 27,158,444-30,861,867 Loans and receivables Notes receivable 2,489,899,529 49,096,149 27,074,048 337,559,599 253,072,388 2,903,629,325 Mortgage loans 1,351,513,652 125,179,534 6,172,721 422,792,031 15,357,785 1,905,657,938 Installment contracts receivable 31,435,782 489,324 2,178,294 335,654,897-369,758,297 Healthcare management organization (HMO) billback 82,287,940 92,911,467 73,625,949 165,387,417 96,261,326 414,212,773 Collateral loans 14,001,719-381,303 52,383,790 48,665,887 66,766,812 Advances to officers and employees 28,323,675 468,237 388,204 3,916,290 2,349,212 33,096,406 Investment accounts receivable 424,986,220 82,097 4,394,029 87,298,036 15,582,780 516,760,382 Others 57,627,193 127,463 183,894 17,100,888 15,037,407 75,039,438 Total P4,578,051,358 P305,865,799 P135,788,306 P1,495,846,565 P472,960,301 P6,515,552,028 Total An allowance for impairment is set up in the Parent Company s separate statements of financial position for assets classified as past-due and impaired. Financial assets are considered as past due and impaired when the contractual payments are in arrears by 90 days and the amount is not adequately secured. When contractual payments are in arrears0020more than 90 days but adequately secured, financial assets are classified as past-due but not impaired with no allowance for impairment is recorded. - 36 -

The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are implemented regarding the acceptability of types of collateral and the valuation parameters. Collateral is mainly obtained for securities lending and for cash purposes. Credit risk is also mitigated by entering into collateral agreements. Management monitors the market value of the collateral, requests additional collateral when needed and performs an impairment valuation when applicable. The related fair value of the collateral for the above past due and impaired assets amounted to P654.12 million and P466.50 million as at December 31, 2014 and 2013, respectively. Liquidity Risk Liquidity risk is the risk that the Parent Company will encounter difficulty in meeting its obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The following policies and procedures are in place to mitigate the Parent Company s exposure to liquidity risk: A liquidity risk policy setting out the assessment and determination of what constitutes liquidity risk for the Parent Company. Compliance with the policy is monitored and exposures and breaches are reported to the Parent Company s risk committee. The policy is regularly reviewed for pertinence and for changes in the risk environment; Set guidelines on asset allocations, portfolio limit structures and maturity profiles of assets, in order to ensure sufficient funding available to meet insurance and investment contracts obligations; and Setting up contingency funding plans which specify minimum proportions of funds to meet emergency calls as well as specifying events that would trigger such plans. The tables below summarizes the maturity profile of the Parent Company s financial liabilities based on contractual undiscounted payment except for the legal policy reserves of the life insurance contracts which is included as part of Insurance contract liabilities account. 2014 Up to a Year 1-5 Years Over 5 Years No Term/ 1-90 days Total Insurance contract liabilities P1,639,011,549 P3,530,980,739 P5,197,810,501 P - P10,367,802,789 Premium deposit funds* 692,652,228 - - - 692,652,228 Insurance payables 179,479,629 - - - 179,479,629 Accounts payable and accrued expenses 49,284,192 - - - 49,284,192 *Excluding amounts received that will be applied to premiums due. P2,560,427,598 P3,530,980,739 P5,197,810,501 P - P11,289,218,838 2013 Up to a Year 1-5 Years Over 5 Years No Term/ 1-90 days Total Insurance contract liabilities P1,452,410,113 P2,876,211,072 P4,736,873,306 P - P9,065,494,491 Premium deposit funds * 534,157,807 - - - 534,157,807 Insurance payables 29,548,393 - - - 29,548,393 Accounts payable and accrued expenses 205,388,692 776,052,159 133,330,426 81,662,245 1,196,433,522 P2,221,505,005 P3,652,263,231 P4,870,203,732 P81,662,245 P10,825,634,213 *Excluding amounts received that will be applied to premiums due. - 37 -

It is unusual for a company primarily engaged in insurance business to predict its funding requirements with absolute certainty as theory of probability is applied on insurance contracts to determine the likely provision and the time period when such liabilities will require settlement. Thus, the amounts and maturities in respect of insurance liabilities are based on management s best estimate using statistical techniques and data on past experience. Market Risk Market risk is the risk of change in fair value of financial instruments from fluctuations in foreign exchange rates (currency risk), market interest risk rates (fair value interest rate risk) and market prices (price risk), whether such change in price is caused by factors specific to the individual instrument or its issuer or factors affecting all instruments traded in the market. The following policies and procedures are in place to mitigate the Parent Company s exposures to market risk: The Parent Company s market risk policy sets out the assessment and determination of what constitutes market risk for the Parent Company. Compliance with the policy is monitored and exposures and breaches are reported to the Parent Company s risk committee. The policy is reviewed regularly for pertinence and for changes in the risk environment. Set asset allocation and portfolio limit structure to ensure that assets back specific policyholder s liabilities and that assets are held to deliver income and market value appreciation for policyholders in line with their expectations. Stipulated diversification benchmarks by type of instrument of the Parent Company. Currency Risk Currency risk is the risk that the fair value of future cash flows of financial instrument will fluctuate because of changes in foreign exchange rates. The Parent Company s principal transactions are carried out in Philippine peso and its foreign exchange risk arises primarily with respect to the transactions denominated in U.S. dollar, where some of its products are denominated. The Parent Company s financial assets are primarily denominated in the same currency as its insurance contracts, which mitigate the foreign exchange rate risk. Thus, the main foreign exchange risk arises from recognized assets and liabilities denominated in currency other than in which the insurance contracts are expected to be settled. The following tables show the details of the Parent Company s foreign-currency denominated monetary assets and liabilities and their Philippine peso equivalents: 2014 US$ PHP Assets Cash and cash equivalents 3,549,345 158,361,126 Financial assets at FVPL 3,726,954 166,285,507 AFS financial assets 5,224,501 233,101,561 Accrued income 346,440 15,457,120 12,847,240 573,205,313 Liabilities Insurance contract liabilities 6,848,656 305,566,485 Premium deposit funds 287,434 12,824,443 7,136,090 318,390,928 P5,711,150 P254,814,386-38 -

Assets Cash and cash equivalents 3,711,042 164,822,191 Financial assets at FVPL 3,579,323 158,972,052 AFS financial assets 4,696,594 208,594,537 Accrued income 184,602 7,942,787 US$ 2013 PHP 12,171,561 540,331,567 Liabilities Insurance contract liabilities 9,224,702 409,705,934 Premium deposit funds 457,057 20,299,592 9,681,759 430,005,526 2,489,802 110,326,041 In translating the foreign currency-denominated monetary assets and liabilities, the exchange rates used were P44.72 to US$1.00 and P44.40 to US$1.00, the PHP-US$ prevailing exchange rates as at December 31, 2014 and 2013, respectively. The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on income before income tax (due to changes in fair value of currency sensitive monetary assets and liabilities). There is no other impact on the Parent Company s equity other than those already affecting profit or loss. The correlation of variables will have a significant effect in determining the ultimate impact on market risk, but to demonstrate the impact, key changes had to be changed on an individual basis. It should be noted that movements in these variables are nonlinear. Currency Change in Variables Impact on income before income tax Increase (decrease) Impact on equity Increase (decrease) 2014 USD -2.70% (P6,896,670) (P6,896,670) USD +2.40% 6,130,374 6,130,374 2013 USD +8.70% 9,598,366 9,598,366 USD -1.00% (1,103,260) (1,103,260) Reasonably possible movements in foreign exchange rate are computed based on average percentage changes in the IC closing rate for two (2) years. Fair Value Interest Rate Risk Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rate. The Parent Company s fixed rate investments classified as AFS financial assets are particularly exposed to such risk. The Parent Company s investment policy requires it to buy and hold AFS financial assets, unless the need to sell arises, and to reduce the duration gap between financial assets and financial liabilities to minimize interest rate risk. - 39 -

The analysis below is performed for reasonably possible movements in interest rates with all other variables held constant, showing the impact on profit before tax (due to changes in fair value of fixed rate financial assets and liabilities). Currency Change in Variables 2014 Impact on income before income tax Increase (decrease) Impact on equity Increase (decrease) PHP 1.20% (P823,183) (P823,183) USD 0.06% (89,035) (89,035) PHP -0.09% 58,991 58,991 USD -1.30% 1,938,830 1,938,830 Currency Change in Variables 2013 Impact on income before income tax Increase (decrease) Impact on equity Increase (decrease) PHP +0.31% (P39,792,791) (P39,792,791) USD +2.17% (39,484,785) (39,484,785) PHP -1.10% 57,803,441 57,803,441 USD -0.02% 10,486,121 10,486,121 In 2014 and 2013, the Parent Company determined the reasonably possible change in interest rates using the percentage changes in weighted average yield rates of outstanding securities for the past two (2) years. Equity Price Risk The Parent Company s equity price risk exposure at year-end relates to financial assets and liabilities whose values will fluctuate as a result of changes in market prices, principally, equity securities classified as financial assets at FVPL and AFS financial assets. The Parent Company s price risk relates to financial assets whose values will fluctuate as a result of changes in market prices, principally investment securities not held for the account of unit-linked business. The correlation of variables will have a significant effect in determining the ultimate impact on price risk, but to demonstrate the impact due to changes in variables, variables had to be changed on an individual basis. It should be noted that movements in these variables are nonlinear. The analysis below is performed for reasonably possible movements in key variables with all other variables held constant, showing the impact on income before income tax (due to changes in fair value of financial assets and liabilities whose fair values are recognized in profit or loss) and equity (that reflects adjustments to income before income tax and changes in fair value of AFS financial assets). Market Indices Change in Variables 2014 Impact on income before income tax Increase (Decrease) Impact on equity Increase (Decrease) PSE index 28% P412,062,637 P412,062,637 PSE index -5% (73,582,614) (73,582,614) - 40 -

Market Indices Change in Variables 2013 Impact on income before income tax Increase (Decrease) Impact on equity Increase (Decrease) PSE index +37% P124,217,909 P124,217,909 PSE index -6% (20,143,445) (20,143,445) In 2014 and 2013, the change in variables was derived from the percentage changes of the composite PSE index for the past six (6) years. 6. Capital Management Regulatory Framework Regulators are interested in protecting the rights of the policyholders and maintain close monitoring to ensure that the Parent Company is satisfactory managing affairs for their benefit. At the same time, the regulators are also interested in ensuring that the Parent Company maintains appropriate solvency position to meet liabilities arising from claims and that the risk levels are at acceptable levels. The operations of the Parent Company are subject to the regulatory requirements of the IC. Such regulations not only prescribe approval and monitoring of activities but also impose certain restrictive provisions, such as margin of solvency (MOS), to minimize the risk of default and insolvency on the part of the insurance companies to meet the unforeseen liabilities as these arise, net worth requirements, and Risk-Based Capital (RBC) requirements. Capital Management Framework The Parent Company s capital includes capital stock, contributed surplus and retained earnings. The Parent Company maintains a capital base to cover risks inherent in the business. Externally imposed capital requirements are set and regulated by the IC. These requirements are put in place to ensure solvency margins. The Parent Company manages its capital requirements by complying with requirements and limitations enforced by the IC, by maintaining profitability of the business and by aligning the Parent Company s operational strategy to its corporate goals. The Parent Company fully complied with the externally imposed capital requirements as at December 31, 2014 and 2013 and no changes were made to its capital base, objectives, policies and processes. The Parent Company s primary capital management objectives are to ensure its ability to continue as a going concern in order to fulfill the Parent Company s mission and vision and to provide adequate return to shareholders. The Parent Company manages it capital structure in light of changes in the economic conditions and the risk characteristics of its activities. The Parent Company takes into consideration future capital requirements, capital deficiency, profitability, and projected operating cash flows, expenditures and investment opportunities. No changes were made in the objectives, policies and processes as at December 31, 2014 and 2013. - 41 -

MOS Requirements Under the Code, an insurance company doing business in the Philippines shall at all times maintain the minimum paid-up capital and net worth requirements as prescribed by the Commissioner. The final amount of the MOS can be determined only after the accounts of the Parent Company have been examined by the IC, specifically as to admitted and non-admitted assets as defined in the Code. If the insurance company failed to meet the minimum required MOS, the IC is authorized to suspend or revoke all certificates of authority granted to such company, officers, agents and no new business shall be transacted until its authority is restored by the IC. As at December 31, 2014 and 2013, the estimated amounts of non-admitted assets, as defined under the Code, which are included in the accompanying Parent Company s separate statements of financial position, are as follow: 2014 2013 Property and equipment - net P79,778,611 P82,178,168 Loans and receivables and other assets 505,788,804 226,029,469 P585,567,415 P308,207,637 The Parent Company complied with the externally imposed MOS requirements during the reported financial periods. Net Worth Requirements Under the Code, every insurance company doing business in the Philippines needs to comply with the following net worth requirements: Net worth Compliance Date P250,000,000 On or before June 30, 2013 550,000,000 On or before December 31, 2016 900,000,000 On or before December 31, 2019 1,300,000,000 On or before December 31, 2020 As at December 31, 2014 and 2013, the Parent Company has complied with the net worth requirements. RBC Requirements Insurance Memorandum Circular (IMC) No. 6-2006 provides for the RBC framework for the life insurance industry to establish the required amounts of capital to be maintained by the companies in relation to their investments and insurance risks. Every life insurance company is required annually to maintain a minimum RBC ratio of one hundred (100%) and not fail the trend test. Failure to meet the minimum RBC ratio shall subject the insurance company to corresponding regulatory intervention which has been defined at various levels. The RBC ratio shall be calculated as net worth divided by the RBC requirement. Net worth shall include an insurance company s paid-up capital, contributed and contingency surplus and unassigned surplus. Revaluation and fluctuation reserve accounts shall form part of net worth only to the extent authorized by the IC. RBC requirement shall be computed based on the formula provided in the Circular and shall include asset default risk, insurance pricing risk, interest rate risk and general business risk. - 42 -

The following information shows the ratios determined by the Parent Company based on its calculations: 2014 2013 Net worth P7,837,495,533 P7,590,974,408 RBC requirement 4,375,364,747 4,076,244,597 RBC Ratio 179.13% 186.22% The final amount of the RBC ratio can be determined only after the accounts of the Parent Company have been examined by the IC specifically as to admitted and nonadmitted assets as defined under the same Code. As at December 31, 2014 and 2013, the Parent Company has complied with the minimum RBC ratio. 7. Fair Value Measurements and Disclosures The fair value of the following financial assets and financial liabilities approximates their carrying amount at end of each reporting period due to their short term nature: Cash and cash equivalents; Insurance receivables; Accrued income; Reinsurance assets; Insurance contract liabilities except for legal policy reserves; Reserve for policyholders dividends; Premium deposit funds excluding amounts received which will be applied to premiums due; Insurance payables; and Accounts payable and accrued expenses. The recurring fair values of financial assets at FVPL and AFS financial assets are determined by reference to quoted market prices at the close of business on the reporting dates. Fair Value Hierarchy The table below presents financial instruments carried at fair value by valuation method as at December 31, 2014 and 2013. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). - 43 -

Financial Assets December 31, 2014 Level 1 Level 2 Level 3 Total Financial Assets at FVPL Equity securities P738,050,663 P - P - P738,050,663 Government Debt securities 400,504,351 - - 400,504,351 Golf club shares 5,978,750 - - 5,978,750 AFS Financial Assets Equity securities at fair value 7,850,364,782 - - 7,850,364,782 Debt securities 626,982,228 - - 626,982,228 9,621,880,774 - - 9,621,880,774 Nonfinancial Assets Investment properties - 823,155,820-823,155,820 P9,621,880,774 P823,155,820 P - P10,445,036,594 Financial Assets December 31, 2013 Level 1 Level 2 Level 3 Total Financial Assets at FVPL Equity securities P587,475,514 P - P - P587,475,514 Government Debt securities 161,872,186 - - 161,872,186 Golf club shares 5,978,750 - - 5,978,750 AFS Financial Assets Equity securities at fair value 7,415,498,384 - - 7,415,498,384 Debt securities 353,873,246 - - 353,873,246 8,524,698,080 - - 8,524,698,080 Nonfinancial Assets Investment properties - 286,873,686-286,873,686 P8,524,698,080 P286,873,686 P - P8,811,571,766 As at December 31, 2014 and 2013, the Parent Company has AFS equity securities measured at cost amounting to P573.56 million and P572.82 million, respectively. There has been no transfer between levels in 2014 and 2013. Fair value of nonfinancial asset under Level 2 is determined using Market Data Approach (see Note 17). 8. Cash and Cash Equivalents This account consists of: 2014 2013 Short-term placements P1,089,013,364 P1,411,800,397 Cash in banks 385,687,314 379,763,889 Cash on hand 8,095,904 7,742,041 P1,482,796,582 P1,799,306,327-44 -

Cash in banks earn interest at prevailing interest rates. Cash equivalents are made for various periods depending on the immediate cash requirements of the Parent Company and earn interest ranging from 1.00% to 2.13% and from 0.50% to 4.13% in 2014 and 2013, respectively. Interest income earned in 2014 and 2013 amounted to P42.07 million and P37.61 million, respectively (see Note 28). 9. Insurance Receivables This account consists of: 2014 2013 Premiums due and uncollected P395,616,865 P199,768,790 Due from agents 50,170,205 30,861,867 445,787,070 230,630,657 Less allowance for impairment loss 26,633,516 26,633,516 P419,153,554 P203,997,141 There has been no movement in the allowance for impairment losses as at December 31, 2014 and 2013. 10. Financial Assets at Fair Value through Profit or Loss This account consists of: 2014 2013 Equity securities P738,050,663 P587,475,514 Government debt securities 400,504,351 161,872,186 Golf club shares 5,978,750 5,978,750 P1,144,533,764 P755,326,450 Fair value gains (losses) on financial assets at FVPL consist of: Note 2014 2013 Equity securities P65,017,567 (P51,507,010) Government debt securities 8,947,278 (15,336,696) 28 P73,964,845 (P66,843,706) The carrying values of financial assets at FVPL have been determined as follows: Note 2014 2013 Balance at beginning of year P755,326,450 P717,544,261 Additions 335,638,453 118,923,862 Maturities and disposals (21,216,024) (26,621,025) Net fair value gain (loss) 28 73,964,845 (66,843,706) Foreign exchange adjustments 820,040 12,323,058 Balance at end of year P1,144,533,764 P755,326,450-45 -

11. Available-for-Sale Financial Assets This account consists of: 2014 2013 Equity securities at fair value P7,850,364,782 P7,415,498,384 Equity securities at cost 573,552,333 572,823,208 Debt securities 626,982,228 353,873,246 P9,050,899,343 P8,342,194,838 (a) AFS Equity Securities at Fair Value As at December 31, 2014 and 2013, AFS unlisted equity securities carried at fair values consist mainly of the Parent Company s investment in shares of stock of the following Coconut Industry Investment Fund (CIIF) Oil Mills Companies: Granexport Manufacturing Corporation (Granex) Legaspi Oil Company, Inc. (LegOil) San Pablo Manufacturing Corporation (SPMC) Southern Luzon Coconut Oil Mills Co., Inc. (SolCom) The fair values of the total investments in CIIF were determined by taking into account the redemption price of San Miguel Corporation (SMC) shares, which comprise 96.72% (over total balance) of CIIF s assets, and DCF approach for other operating net assets. The CIIF Oil Mills Companies have investments in fourteen (14) CIIF holding companies which hold shares in SMC. The aggregate market value of the Parent Company s interest in these SMC shares amounted to P6.21 billion as at December 31, 2014 and 2013. In addition, the fair values of the other operating net assets of the CIIF Oil Mills Companies have been determined using DCF approach. Significant assumptions used include a long-term growth rate of nil and a discount rate of 12% in 2014 and 2013. DCF computation is based on latest available figures of CIIF Oil Mills Companies as at December 31, 2014 and 2013. The assets of the CIIF Oil Mills Companies and the SMC shares are presently sequestered and are the subject of an ongoing appeal by the Philippine Coconut Producers Federation with the Supreme Court (SC). The investments of SPMC, Iligan Coconut Industries, Inc. ( Ilicoco ) and other CIIF Oils Mills in the 14 CIIF holding companies and the loans and advances granted by SPMC, Ilicoco and other CIIF Oil Mills to the 14 CIIF holding companies were used to purchase the shares of stock in SMC. As at December 31, 2001, the loans and advances granted to the 14 CIIF holding companies were fully collected. These SMC shares were sequestered by the Presidential Commission of Good Government (PCGG) in May 1986. The 14 CIIF holding companies, United Coconut Planters Bank (UCPB) and SMC executed and subsequently implemented in 1991 a compromise agreement and amicable settlement involving the SMC shares of stock held by the 14 CIIF holding companies. Notwithstanding the implementation of the compromise agreement and amicable settlement, all the subject SMC shares of stock remain sequestered by the PCGG. Certain parties, however, filed before the Sandiganbayan their opposition to the implementation of the said agreement. - 46 -

On November 10, 1993, the Republic of the Philippines, acting through the PCGG, filed before the Sandiganbayan a motion for authority to sell all the 14 CIIF holding companies shares of stock of SMC. The proceeds of the sale would then be utilized to pay for the indebtedness of the CIIF holding companies to UCPB and any remaining balance thereof would be used for urgently needed projects designed for the benefit of the coconut farmers and pursuant to the intent of the CIIF. The motion was opposed by certain parties. On September 27, 1996, the 14 CIIF holding companies and UCPB, as administrator of the CIIF holding companies and as then creditor of the 14 CIIF holding companies (the UCPB loan was fully paid by the 14 CIIF holding companies in November 2002), filed a joint motion before the Sandiganbayan and respectfully moved that they be authorized to sell all the 14 CIIF holding companies SMC class B shares and to buy an equal number of SMC Class A shares. The motion was denied on December 12, 1997. On January 7, 1998, the 14 CIIF holding companies and UCPB filed a motion for reconsideration. On May 7, 1998, in an en banc resolution, the PCGG lifted the sequestration of the SMC shares, subject to the approval of the Sandiganbayan. The lifting of the sequestration on the SMC shares owned by the 14 CIIF holding companies will enable the CIIF companies to re-deploy their resources in response to the demands of an ever-changing business environment and to initiate strategic programs aimed at enhancing the competitiveness of the Philippine coconut industry. On February 9, 1999, the Sandiganbayan considered the motion dated November 10, 1993 withdrawn without prejudice to whatever actions the parties may take for revival or resuscitation thereof under such terms which may be appropriate at that time. On March 12, 1999, certain parties filed a motion for permission to present evidence in relation to their opposition of said November 10, 1993 motion to sell all SMC shares. On November 8, 2000, the President of the Philippines issued Executive Order (EO) No. 313 creating an irrevocable trust fund to be known as the Coconut Trust Fund to be managed by a Trust Fund Committee. EO No. 313 also provided that the subject SMC shares shall form part of the initial capital of the Coconut Trust Fund. For the purpose of implementing the creation of the Coconut Trust Fund, EO No. 313 directed the 14 CIIF holding companies, acting through Administrator of the coconut levy fund, to: (a) convey the subject SMC shares to the Trustee; and, (b) sign, execute and deliver such documents, deed or contracts, under such conditions not inconsistent with EO No. 313 likewise mandates the PCGG and the Office of the Solicitor General to lift the sequestration of the subject SMC shares and take all the necessary steps to implement the purposes and objectives of EO No. 313. As a first step toward the implementation of EO No. 313, the PCGG adopted resolutions on November 28, 2000, lifting the sequestration of the subject SMC shares. On January 10, 2001, a Motion to Withdraw Compliant was filed by the PCGG before the Sandiganbayan requesting for the exclusion of the subject SMC shares from Civil Case No. 0033-F and for the cause of action against defendants, the 14 CIIF holding companies, in connection with the said shares to be considered withdrawn. - 47 -

As a result of the installation of the new dispensation, on January 30, 2001, a Manifestation and Motion to Hold in Abeyance Motion to Withdraw Complaint dated January 10, 2001 was filed before Sandiganbayan requesting to defer action in the aforementioned Motion until February 25, 2001 or later, for the reason that EO No. 313 is still undergoing review by the Office of the President for possible amendment, suspension and revocation. The Sandiganbayan, in a Motion for Partial Summary Judgment on May 7, 2004, decided that SPMC and the other CIIF Block of SMC shares of stock totaling 33,133,266 shares in 1983, together with all dividends declared, paid and issued thereon, as well as any increments thereto arising from, but not limited to, exercise of pre-emptive rights, are declared owned by the government in trust for all the coconut farmer and ordered reconveyed to the government. Certain parties filed a Motion for Reconsideration to such Sandiganbayan decision. The motion for reconsideration was denied by Sandiganbayan on December 28, 2004. On March 29, 2005, the 14 CIIF holding companies, as authorized by the PCGG, exercised their pre-emptive rights first on the SMC Class B shares and thereafter on the SMC Class A shares of SMC s 105 stock offering to the extent of the cash dividends held by the 14 CIIF holding companies. The 14 CIIF holding companies subscribed to 27,952,430 Class B shares and 693,242 Class A shares resulting in total shareholdings of 307,395,776 Class B shares and 446,476,531 Class A shares. As at June 30, 2008, the aforementioned case pending with the First Division of the Sandiganbayan is now awaiting decision. On July 24, 2009, SMC made an offer to exchange (the Exchange Offer) preferred shares for its issued and outstanding Class A and Class B common shares, on a onefor-one basis. The peso-denominated nonvoting preferred shares (the Series 1 Preferred Shares) will have an issue price of P75.00 (the Issue Price). The maximum Series 1 Preferred Shares that could be exchanged in the Exchange Offers is 1,104,000. The Parent Company and the CIIF Oil Mills Companies chose to participate in the Exchange Offer. The Parent Company and the CIIF Oil Mills Companies submitted their applications to exchange in October 2009. The Parent Company and the CIIF Oil Mills Companies received 751,185 and 753,848,312 Series 1 Preferred Shares, respectively, in exchange for an equivalent number of common shares. On December 23, 2009, the Parent Company s BOD approved the Memorandum of Agreement (MOA) which allowed the Parent Company to account for its investment in CIIF Oil Mills Companies as investments in associates because despite ownership of less than twenty percent (20%) interest in the CIIF Oil Mills Companies, the Parent Company has significant influence by virtue of joint rights with UCPB as stockholders of the CIIF Oil Mills Companies for their collective benefit. Upon effectivity of the MOA on January 1, 2010, the CIIF Oil Mills Companies became associates of the Parent Company. As allowed under PAS 27, the Parent Company accounted for its investments in CIIF Oil Mills Companies as AFS financial assets which are carried at fair value in its separate financial statements. - 48 -

On January 24, 2012, the SC rendered its decision in favor of the government in two cases involving: (a) the ownership of certain sequestered shares in UCPB and (b) the ownership over the CIIF Oil Mills, the Fourteen CIIF Holding Companies and the shares of stock in SMC held by the 14 CIIF Holding Companies, together with all dividends declared paid and issued thereon as well as any increments thereto arising from, but not limited to, exercise of pre-emptive rights. On February 14, 2012, the Philippine Coconut Producers Federation, Inc., et. al., filed a Motion for Reconsideration on the decision rendered by the SC. The SC subsequently rendered a decision on September 4, 2012 which resolves to deny with finality the aforementioned case for the lack of merit. Further, the court clarifies that the SMC shares, with all the dividends earnings as well as all increments that may arise from, are owned by the government to be used for the benefit of all the coconut farmers and for the development of the coconut industry. On December 28, 2012, the Parent Company filed a Petition for Declaratory Relief to seek for an authoritative declaration of its rights and duties as a stockholder of the CIIF Oil Mills, and 14 CIIF holding companies. Against this petition the Philippine Government through the PCGG filed with the Supreme Court a petition for, among others, the issuance of the Temporary Restraining Order (TRO) enjoining the trial court Judge from proceeding with the hearing of the petition for declaratory relief. On February 26, 2014, the Supreme Court issued the TRO. On December 10, 2014, the Supreme Court issued a resolution directing that an entry of judgment be made for its January 24, 2012 Decision, which ordered the reconveyance of the CIIF Block of SMC shares to the Government, to be used exclusively for the benefit of coconut farmers and the development of the local coconut industry. As at December 31, 2014, the carrying amount of the Parent Company s investments in UCPB shares and CIIF Oil Mills shares amounted to P552.34 million and P6.41 billion, respectively. The Parent Company recognized increase in the fair value of investments in CIIF amounting to P30.78 million in 2014 from the recognized impairment losses in 2013 amounting to P50.65 million. (b) AFS Equity Securities at Cost In 2011, the Parent Company foreclosed its receivables from Archipelago Finance and Leasing Corporation (Archipelago), an entity under common control, pertaining to the sales of UCPB shares in 2000 up to 2002 amounting to P351.98 million and secured by a pledge on 29,290,224 shares sold. Consequently, the Company s investments in UCPB shares increased from 100,000,000 shares as at December 31, 2010 valued at P100.00 million to 129,290,224 shares as at December 31, 2011 valued at P451.98 million. These stocks are nonparticipating, nonvoting preferred shares convertible to common shares of UCPB with P1 par value, an affiliated local commercial bank at the option of the holder. These shares are entitled to cumulative dividends of 14% per annum. - 49 -

A substantial portion of the outstanding shares of stock of UCPB remains sequestered as a result of the sequestration orders previously issued by the PCGG on June 26, 1986. In 2012, the Parent Company redeemed the UCPB shares amounting to P100.00 million from UCPB General Insurance Company, Inc. (UCPB GEN), a wholly-owned subsidiary. The Parent Company have investments in UCPB shares amounting to a total of P552.34 million as at December 31, 2014 and 2013. The issue of ownership of the sequestered shares has been the subject of ongoing court proceeding with SC and Sandiganbayan. However, on December 14, 2001, the SC ruled that the coconut levy funds, from which the funds to buy UCPB shares were occurred, were prima facie public funds. Further, on July 2, 2002, the SC directed the Sandiganbayan First Division to resolve with all deliberate speed and not later than six (6) months such ownership issue. The Sandiganbayan, in its decision dated July 11, 2003, ruled and declared that ownership of 72.20% in UCPB legally belongs to the government. Subsequently, the SC rendered a decision on January 25, 2012 supporting the decision of the Sandiganbayan on July 11, 2003. On February 14, 2012, the Philippine Coconut Producers Federation, Inc., et. al., filed a Motion for Reconsideration on the decision rendered by the SC. The SC subsequently rendered a decision on September 4, 2012 which resolves to deny with finality the said Motion for Reconsideration for lack of merit. The Petition for Declaratory Relief by the Parent Company on December 28, 2012 also mentioned its ownership over these UCPB shares. Update on UCPB Rehabilitation Plan On March 29, 2004, UCPB requested certain concessions for the duration of the rehabilitation period of ten (10) years or until such time that UCPB is able to comply with the regulatory requirements, whichever is earlier. The Bangko Sentral ng Pilipinas (BSP), in its reply date January 10, 2005: Approved the 10-year Business/Rehabilitation Plan of UCPB; Granted temporary relief by reducing the risk-weighted capital ratio from 10% to 8% for a period of three (3) years up to 2007 or until such time that UCPB is able to comply with the required 10%, whichever comes earlier; Allowed the staggered booking of P14.00 billion required valuation reserves based on the fixed rate of 5% each year for the first three (3) years, ten percent (10%) each year for the next four (4) years and fifteen percent (15%) each year for the remaining three (3) years; and Required UCPB to seek prior BSP approval for the merger of United Savings Bank and UCPB Rural bank. The merger had been effected on December 29, 2005. - 50 -

On May 15, 2008, the Philippine Depository Insurance Corporation (PDIC) Board, in its Resolution No. 2008-05-073, approved the following: 1. Proposed rehabilitation scheme to address the capital deficiency of the UCPB pending resolution of ownership issues, including the following: a. Capital infusion to meet capital requirements via conversion of PDIC s P12.00 billion Financial Assistance into Capital Notes eligible as Interim Tier 1 capital; b. National Government s minimum deposit placement of P25.00 billion for at least ten (10) years to be invested in higher yielding government securities (target net yield of 6% per annum or P1.50 billion net interest per annum); c. BSP s grant of regulatory relief; and d. UCPB s implementation of the business plans which includes operational and income enhancements and cost control management. 2. PDIC s conversion of outstanding P12.00 billion financial assistance into Capital Notes subject to the fulfillment by the concerned parties of their respective obligations to implement the other components of foregoing rehabilitation scheme, Monetary Board reaffirmation of the continuing systemic risk to the banking system that would result from the untimely closure of the UCPB, and amendment to the terms and conditions of the 2003 FAA. 3. General features of the Capital Notes to be subscribed to by the PDIC, the final features of Capital Notes and Subscription Agreement between PDIC and UCPB subject to subsequent approval by the PDIC Board as follows: Dividend Rate - Dividend rate of 12% per annum shall be noncumulative, payable once UCPB has sufficient profits/retained earnings and meets capital adequacy and liquidity thresholds after dividend payment. Call Option - Option of UCPB to call on the Notes anytime after at least sixty (60) months from date of issue upon fulfillment of capital adequacy/liquidity thresholds. Upon its call on the Notes, UCPB shall pay dividends to the PDIC as a Noteholder at the rate of fourteen percent (14%) per annum (gross) computed from the issuance of the Notes up to the date of call option. Assignability Feature - The PDIC may assign the notes anytime by giving a notice in writing to the Issuer. Conversion Right - The Capital Notes shall be convertible to UCPB s preferred shares and further convertible to common shares at any time at the option of PDIC. Should PDIC be restrained or in any manner or for any reason be enjoined from fully or partially exercising such right or in the event PDIC exercise his right to convert the Capital Notes to UCPB shares and UCPB shall be unable, for any reason whatsoever, then the UCPB shall be obliged immediately to redeem to Capital Notes with thirty (30) days from notice to do so, then the Capital Notes shall automatically be transformed into a P12.00 billion loan in favor of PDIC. Conversion Price - The conversion price shall be fixed at the time of subscription of the Interim Tier 1 Capital Notes. The number of common/preferred shares to be issued upon conversion of the Notes be determined by dividing the principal amount of the Notes plus any accrued interest thereon, by the conversion price. The conversion price shall be subject to adjustment to allow PDIC to preserve its ownership stake. - 51 -

The Monetary Board, in its Resolution No. 590 dated May 15, 2008, decided to: 1. Approve the Ten-Year Rehabilitation/Business Plan (2008-2017) of UCPB and grant to the UCPB the authority to issue P12.0 billion Capital Notes to PDIC which will qualify as Interim Tier 1 Capital, provided that: i. The Tier 1 Capital Notes to be issued meet the minimum features under Circular No. 595 dated January 11, 2008; ii. UCPB s Articles of Incorporation shall be amended to: Increase its authorized capital of P3.25 billion to an amount that will cover the amount of the Capital Notes; and Remove the Ownership limitation in UCPB which is 1% of the issued and outstanding preferred and common shares for a stockholder as at December 31, 1979. 2. Grant to UCPB following concessions: i. Authority to accept deposit from the National Government (NG), Local Government Units and Government-Owned and Controlled Corporations with the ceiling of P5.90 billion increased by the amount that the NG will deposit with UCPB; ii. Consider the government securities purchased out of the P30.00 billion deposit of the NG as alternative/eligible compliance with the liquidity reserves and liquidity floor requirement; iii. Stagger the booking of the unbooked valuation reserves and deferred charges aggregating P27.90 billion consistent with UCPB s approved 10-Year Business/ Rehabilitation Plan: Provided, that subsequent valuation reserves to be required in excess of the P27.90 billion shall be immediately booked and no dividend shall be declared while the concession is in effect; iv. Waiver of the monetary penalties incurred for the following: 1. reserve deficiencies for the period January 1, 1999 to September 11, 2003 arising from the nontrust activities of the Trust Banking Division with penalties amounting to P3.40 billion; 2. delay in the implementation of the Anti-Money Laundering System by October 14, 2007 as required under Circular No. 495 dated September 20, 2005 as amended by Circular No. 527 dated April 28, 2006, with penalty at P15,000 per day of delay; 3. violation of Section X602 of the Manual of Regulations for Banks (MORB) for engaging in derivatives activities without prior BSP approval at P15,000 penalty per banking day estimated at P3.60 million as at February 29, 2008; 4. booking of Day 1 gain on its financial assistance (FA) from the PDIC in violation of Circular No. 572 dated June 21, 2007 with estimated penalty of P1.80 million; and 5. delayed submission of various reports with penalties aggregating P1.30 million. v. Continued access to the BSP Rediscounting Facility, subject to a rediscount ceiling of P1.50 billion. Investments in preferred shares include the Parent Company s investment in SMC Series 1 Preferred Shares which have the following features: a. Dividends shall be at a fixed rate of eight percent (8.00%) per annum. The dividend rate shall be at the end of the fifth year after the date of issue to the higher of the dividend rate or the 10-year PDST-F rate on the date corresponding to the end of the fifth year from the Issue Date plus spread of three percent (3.00%). - 52 -

b. The holder shall not be entitled to any participation or share in the retained earnings remaining after dividend payment shall have been made. c. SMC may redeem the preferred shares on the third anniversary from the Issue Date or on any dividend payment date, in whole or in part, at a redemption price equal to the Issue Price plus accrued and unpaid dividends. d. The holder shall not be entitled to vote. e. The holder shall have no pre-emptive right to any issue or disposition of any share of any class of SMC. f. There shall be preference in payment in the event of liquidation of SMC. The carrying values of AFS financial assets have been determined as follows: 2014 2013 Balance at beginning of year P8,342,194,838 P8,453,594,049 Additions 1,738,418,230 2,182,976,319 Maturities and disposals (1,107,959,708) (2,009,498,422) Reserve for fluctuation on AFS 72,551,714 (301,247,689) Foreign exchange adjustments 5,694,269 16,370,581 Balance at end of year P9,050,899,343 P8,342,194,838 As at December 31, 2014 and 2013, government securities with a total value of P93.88 million are deposited with the IC in accordance with the provision of the Code as security for the benefit of policyholders and creditors of the Parent Company. The rollforward analysis of the reserve for fluctuation on AFS financial assets is as follows: 2014 2013 Balance at beginning of year P5,307,349,442 P5,608,597,131 Fair value gain (loss) 202,703,261 (293,608,912) Realized gain transferred to profit or loss (130,151,547) (7,638,777) Balance at end of year P5,379,901,156 P5,307,349,442 12. Loans and Receivables This account consists of: Note 2014 2013 Note receivable P3,154,734,485 P2,903,629,325 Mortgage loans 2,454,634,764 1,905,657,938 Investment accounts receivable 462,901,958 516,760,382 Healthcare Management Organization (HMO) billback 497,143,031 414,212,773 Installment contracts receivable 370,098,469 369,758,297 Claims receivable - farmers 37 296,633,525 247,909,477 Collateral loans 158,709,874 66,766,812 Advances to officers and employees 35,214,793 33,096,406 Others 100,719,723 75,039,438 7,530,790,622 6,532,830,848 Allowance for impairment losses (396,700,675) (446,326,785) 7,134,089,947 6,086,504,063 Policy loans 548,416,317 549,328,568 P7,682,506,264 P6,635,832,631-53 -

Note receivable refer to long-term promissory notes without collateral and earns interest at prevailing market rate plus two percent (2%) add-on or twelve percent (12%), whichever is higher. Mortgage loans receivable pertain to housing loans secured by the property being financed by the loans and collectible in monthly amortizations. Interest rates range from five percent (5%) to twenty four percent (24%) in 2014 and 2013, with terms ranging from five (5) to ten (10) years. Investment accounts receivable pertain mainly to receivables from brokers relating to the sale of investments and dividends receivable on the Parent Company s investments in subsidiaries and associates. HMO billback is due from Healthcare cardholders under the Third Party Administration accounts or auto bill back, wherein the Parent Company initially pays for the medical expenses and subsequently bills the same to the cardholders plus service fee of seven percent (7%) and network access fee. Installment contracts receivable pertain to the outstanding receivable on foreclosed properties sold to third parties. The interest is based on market rate or twelve percent (12%), whichever is higher with terms ranging from five (5) to fifteen (15) years. Collateral loans are loans collectible in monthly amortizations over a period of one (1) to five (5) years, including interest of three percent (3%) to twelve percent (12%), secured by a chattel mortgage. Advances to officers and employees are collected thru payroll deductions or thru expense liquidation. Policy loans pertain to loans issued to policyholders. The loans are issued with collateral of the cash surrender value of the policyholders insurance policies. Interest rates charged are ten percent (10%) for peso and eight percent (8%) for dollar denominated policies. The carrying amount of loans and receivables approximate its fair value as at December 31, 2014 and 2013. - 54 -

The rollforward analyses of allowance for impairment losses on loans and receivables are as follow: Notes Receivable Mortgage Loans Collateral Loans Advances to Officers and Employees 2014 Investment Accounts Receivables HMO Billback Claims Receivable - farmers Balance at beginning of year P253,072,388 P15,357,785 P48,665,887 P2,349,212 P15,582,780 P96,261,326 P15,037,407 P446,326,785 Provisions during the year 33,609,406 - - - - 20,553,392-54,162,798 Write-off during the year (103,788,907) - - - - - - (103,788,907 Balance at end of year P182,892,887 P15,357,785 P48,665,887 P2,349,212 P15,582,780 P116,814,718 P15,037,407 P396,700,676 Specific assessment 182,892,887 15,357,785 48,665,887 - - 116,814,718 15,037,407 378,768,684 Collective assessment - - - P2,349,212 15,582,780 - - 17,931,992 Total P182,892,887 P15,357,785 P48,665,887 P2,349,212 P15,582,780 P116,814,718 P15,037,407 P396,700,676 Gross amount of receivables, individually determined to be impaired P182,892,887 P15,357,785 P48,665,887 P - P - P116,814,718 P15,037,407 P378,768,684 Total Notes Receivable Mortgage Loans Collateral Loans Advances to Officers and Employees 2013 Investment Accounts Receivables HMO Billback Claims Receivable - farmers Balance at beginning of year P218,334,168 P15,357,785 P48,665,887 P2,349,212 P21,382,780 P100,145,436 P15,037,407 P421,272,675 Provisions during the year 35,668,146 - - - - 10,559,870-46,228,016 Write-off during the year (929,926) - - - (5,800,000) (14,443,980) - (21,173,906) Balance at end of year P253,072,388 P15,357,785 P48,665,887 P2,349,212 P15,582,780 P96,261,326 P15,037,407 P446,326,785 Specific assessment P187,410,664 P15,357,785 P48,665,887 P1,334,373 P - P96,261,326 P - P349,030,035 Collective assessment 65,661,724 - - 1,014,839 15,582,780-15,037,407 97,296,750 Total P253,072,388 P15,357,785 P48,665,887 P2,349,212 P15,582,780 P96,261,326 P15,037,407 P446,326,785 Gross amount of receivables, individually determined to be impaired P187,410,664 P15,357,785 P48,665,887 P1,334,373 P - P96,261,326 P - P349,030,035 Total - 55 -

In 2014 and 2013, the Parent Company recognized provision for impairment losses amounting to P54.16 million and P46.22 million, respectively, based on the Parent Company s assessment of the individual balances of different receivables. In 2014 and 2013, the Parent Company entered into agreements with various parties whereby the Parent Company sold its loans and receivables without recourse amounting to P8.37 million and P382.85 million at a gain of P1.63 million and P68.92 million, respectively (see Note 28). 13. Accrued Income This account consists of: 2014 2013 Interest receivable P79,688,733 P79,731,978 Less allowance for impairment losses 18,011,323 18,011,323 61,677,410 61,720,655 Rent receivable 99,104 458,050 Dividend receivable 12,550 25,800 P61,789,064 P62,204,505 Interest receivable includes accrued interest arising from short-term investments, AFS debt securities, debt securities at FVPL and loans and receivables with interest rates ranging from 1.00% to 2.13%, from 3.25% to 9.13%, from 2.13% to 7.75% and from 5.25% to 30.53%, respectively, in 2014, and 1.00% to 4.00%, 3.25% to 9.13%, 3.25% to 8.00% and 3.00% to 24.00%, respectively, in 2013. There were no movements in the allowance for impairment losses as at December 31, 2014 and 2013. 14. Reinsurance Assets This account consists of: 2014 2013 Reinsurance recoverable on unpaid losses P12,545,965 P22,956,662 Reinsurer s share on legal policy reserves 32,194,756 5,742,021 P44,740,721 P28,698,683 The movements of reinsurance recoverable on unpaid losses are as follow: 2014 2013 Balance at beginning of year P22,956,662 P14,786,401 Claims incurred during the year 18,405,968 26,236,590 Claims paid during the year (28,816,665) (18,066,329) P12,545,965 P22,956,662-56 -

The movements of reinsurer s share on legal policy reserves are as follow: 2014 2013 Balance at beginning of year P5,742,021 P5,479,620 Premiums received 535,674,436 49,860,440 Liability released for payments of death, maturity and surrender benefits and claims 509,221,701 49,598,039 P32,194,756 P5,742,021 15. Investments in Subsidiaries and Associate This account consists of: 2014 2013 Subsidiaries UCPB GEN P651,794,875 P651,794,875 Cocoplans, Inc. (Cocoplans) 420,442,203 420,442,203 Ultra Security Services, Inc (Ultra) 13,983,155 13,983,155 Cocolife Asset Management Company, Inc. (CAMCI) 12,500,000 12,500,000 Healthassist, Inc. (Healthassist) 10,000,000 10,000,000 New Ultra Security Services, Inc. (New Ultra) 2,319,785 2,319,785 Archipelago Motors Corporation (AMC) 13,875,000 13,875,000 Associate Direct Link Insurance Agency, Inc. (Direct Link) 4,000,000 4,000,000 P1,128,915,018 P1,128,915,018 The movements in this account are as follow: 2014 2013 Balance at beginning of year P1,128,915,018 P1,028,915,018 Additional investments in UCPB GEN - 100,000,000 Balance at end of year P1,128,915,018 P1,128,915,018 In 2013, the Parent Company acquired an additional 100,000,000 shares of common stocks of UCPB GEN worth P1.00 per share. The Parent Company s percentages of ownership in its investees are as follow: Investee 2014 2013 Subsidiaries UCPB GEN 100.00% 100.00% Cocoplans 100.00% 100.00% CAMCI 100.00% 100.00% Healthassist 100.00% 100.00% New ultra 100.00% 100.00% Ultra 100.00% 100.00% AMC 54.00% 54.00% Associate Direct link 45.00% 45.00% - 57 -

The above investees are incorporated in the Philippines. The key financial information of the subsidiaries and associates are as follow: 2014 UCPB GEN Cocoplans* Ultra* CAMCI Healthassist* New Ultra* AMC* Direct Link* Total assets P5,931,651,344 P1,987,987,016 P39,053,249 P37,235,954 P16,472,902 P - P11,736,205 P46,089,018 Total liabilities 4,968,387,574 1,933,861,763 14,365,229 17,043,487 195,802-950,789 35,636,130 Net assets 963,263,770 54,125,253 24,688,020 20,192,467 16,277,100-10,785,416 10,452,888 Revenues 1,697,041,749 228,781,261 28,988,488 48,127,169 6,733,988-12,500,850 6,338,300 Net income (loss) 75,505,339 14,817,919 6,106,344 22,413,858 306,567-3,931,565 979,213 Other comprehensive income (loss) (34,256,313) (20,225,860) - - - - - - Total comprehensive income (loss) 41,249,026 (5,407,941) 6,106,344 22,413,858 306,567-3,931,565 979,213 *Unaudited 2013 UCPB GEN Cocoplans* Ultra* CAMCI Healthassist* New Ultra* AMC* Direct Link* Total assets P8,314,965,055 P2,112,290,866 P46,091,348 P37,154,114 P34,396,598 P4,986,118 P20,818,253 P42,818,298 Total liabilities 7,391,361,675 2,012,591,016 14,553,297 14,375,505 6,054,351 2,535,835 5,676,399 33,408,744 Net assets 923,603,380 99,699,850 31,538,051 22,778,609 28,342,247 2,450,283 15,141,854 9,409,554 Revenues 1,499,738,101 285,655,640 190,565,000 49,973,678 44,824,442-27,572,583 6,069,686 Net income (loss) 8,206,497 20,380,258 11,538,000 21,096,732 15,757,980 (28,070) (2,538,977) 1,012,565 Other comprehensive income (loss) (18,274,649) (8,364,700) - - - - (22,791) - Total comprehensive income (loss) (10,068,152) 12,015,558 11,538,000 21,096,732 15,757,980 (28,070) (2,561,768) 1,012,565 *Unaudited 16. Real Estate Inventories The movements in this account are as follow: 2014 2013 Balance at beginning of year P34,561,536 P77,718,036 Additions 4,131,600 - Disposals (6,875,000) (43,156,500) Balance at end of year P31,818,136 P34,561,536 In 2014 and 2013, the Parent Company sold columbary units with a cost of P6.88 million and P43.16 million, respectively. Realized gain, part of Other income in profit or loss, amounted to P6.88 million and P2.38 million in 2014 and 2013, respectively. As at December 31, 2014 and 2013, the NRV of these inventories amounted to P72.36 million and P116.95 million, respectively. - 58 -

17. Investment Properties The movements in this account are as follow: 2014 Buildings and Land Improvements Total Cost Balance at beginning of year P477,632,124 P51,050,041 P528,682,165 Additions 26,115,631 81,594,215 107,709,846 Disposals (18,308,448) - (18,308,448) Balance at end of year 485,439,307 132,644,256 618,083,563 Accumulated depreciation Balance at beginning of year - 32,103,772 32,103,772 Depreciation - 1,995,826 1,995,826 Balance at end of year - 34,099,598 34,099,598 Net book value P485,439,307 P98,544,658 P583,983,965 Land 2013 Buildings and Improvements Total Cost Balance at beginning of year P482,818,352 P49,121,655 P531,940,007 Additions 101,906,303 1,928,386 103,834,689 Disposals (107,092,531) - (107,092,531) Balance at end of year 477,632,124 51,050,041 528,682,165 Accumulated depreciation Balance at beginning of year - 30,107,946 30,107,946 Depreciation - 1,995,826 1,995,826 Balance at end of year - 32,103,772 32,103,772 Net book value P477,632,124 P18,946,269 P496,578,393 As at December 31, 2014 and 2013, the estimated fair value of these investment properties amounted to P821.16 million and P922.54 million, respectively. The fair values of investment properties were arrived at using the Market Data Approach. Under this approach, the values of the properties are based on sale and listings of comparable properties registered in the vicinity. It requires the establishment of comparable properties by reducing reasonable comparative sales and listings to a common deominator and adjustments of the differences between the subject properties and those actual sales and listings regarded as comparables. The comparison was premised on the factors of location, characteristics of the lot, time element, quality and prospective use. The fair value measurement for the investment properties has been categorized as a Level 2 fair value. The Parent Company engaged accredited independent appraisers to determine the fair value of its investment properties. Valuations were derived on the basis of recent sales of similar properties in the same areas as the Parent Company s investment properties and taking into account the economic conditions prevailing at the time the valuations were made. - 59 -

In 2014 and 2013, the Parent Company sold investment properties with a carrying value of P18.31million and P107.09 million, respectively. Gain (loss) on sale of investment properties which forms part of Investments income in profit or loss amounted to loss on sale of P1.42 million and gain on sale of P12.08 million in 2014 and 2013, respectively (see Note 28). Rental income in 2014 and 2013 arising from investment properties amounted to P8.47 million and P6.74 million, respectively (see Note 28), which are included in Investments income in profit or loss. Operating expenses, including depreciation expense, arising from these investment properties amounted to P3.82 million and P5.58 million in 2014 and 2013, respectively. 18. Property and Equipment The movements in this account are as follow: Land Buildings and Leasehold Improvements 2014 Transportation Equipment Office Furniture, Fixtures and Equipment Cost Balance at beginning of year P38,000,000 P205,696,665 P59,032,178 P183,724,047 P486,452,890 Additions - 6,549,269 10,302,850 10,243,431 27,095,550 Disposals - (4,182,262) (7,024,259) (7,917,257) (19,123,778) Balance at end of year 38,000,000 208,063,672 62,310,769 186,050,221 494,424,662 Accumulated Depreciation Balance at beginning of year - 156,994,235 29,095,250 163,466,213 349,555,698 Depreciation during the year - 13,344,519 9,609,425 4,368,880 27,322,824 Disposals - (4,020,063) (3,292,001) (7,843,889) (15,155,953) Balance at end of year - 166,318,691 35,412,674 159,991,204 361,722,569 Net Book Value P38,000,000 P41,744,981 P26,898,095 P26,059,017 P132,702,093 Total Land Buildings and Leasehold Improvements 2013 Transportation Equipment Office Furniture, Fixtures and Equipment Cost Balance at beginning of year P38,000,000 P189,024,270 P56,523,131 P179,364,357 P462,911,758 Additions - 22,690,210 10,848,240 7,024,338 40,562,788 Disposals - (6,017,815) (8,339,193) (2,664,648) (17,021,656) Balance at end of year 38,000,000 205,696,665 59,032,178 183,724,047 486,452,890 Accumulated Depreciation Balance at beginning of year - 152,468,013 25,930,940 159,933,486 338,332,439 Depreciation during the year - 10,295,563 7,201,478 6,053,161 23,550,202 Disposals - (5,769,341) (4,037,168) (2,520,434) (12,326,943) Balance at end of year - 156,994,235 29,095,250 163,466,213 349,555,698 Net Book Value P38,000,000 P48,702,430 P29,936,928 P20,257,834 P136,897,192 Total - 60 -

19. Intangible Assets The movements in this account are as follow: 2014 2013 Cost Balance at beginning of year P127,285,935 P121,095,437 Additions 5,189,000 6,190,498 Balance at end of year 132,474,935 127,285,935 Accumulated Amortization Balance at beginning of year 115,593,829 112,368,451 Amortization 2,813,525 3,225,378 Balance at end of year 118,407,354 115,593,829 Net Book Value P14,067,581 P11,692,106 This account consists of computer software acquired from 2009 to 2014 were the remaining useful life ranges from one (1) to five (5) years as at December 31, 2014 and 2013. Amortization expenses which forms part of General and administrative expenses, amounted to P2.81 million and P3.23 million in 2014 and 2013, respectively. 20. Other Assets This account consists of: 2014 2013 BIR tax credits P80,061,363 P55,357,105 Refundable deposits 51,521,391 8,645,060 Lease and leasehold deposits 19,762,507 18,144,841 Deferred charges 18,107,879 2,981,075 Prepaid expense 7,937,761 1,149,651 Contingency fund pool 7,520,387 13,154,190 Laboratory supplies inventory 2,200,262 1,997,825 Other assets 2,585,947 2,386,996 P189,697,497 P103,816,743 21. Insurance Contract Liabilities This account consists of: 2014 2013 Legal policy reserves P9,330,121,158 P8,119,101,483 Policy and contract claims 1,037,681,631 946,393,008 P10,367,802,789 P9,065,494,491-61 -

The movements in legal policy reserves are as follow: 2014 2013 Balance at beginning of year P8,119,101,483 P6,676,780,541 Premiums received 3,615,798,410 3,367,156,263 Liability released for payments of death, maturity and surrender benefits and claims (2,997,985,013) (2,400,312,104) Fees deducted (3,870,885) (2,045,054) Accretion of investment income or change in unit prices 536,334,459 482,318,280 Adjustments due to change in mortality and morbidity 40,666,757 - Others 20,075,947 (4,796,443) Balance at end of year P9,330,121,158 P8,119,101,483 The movements in policy and contract claims are as follow: 2014 2013 Balance at beginning of year P946,393,008 P823,796,338 Arising during the year 1,903,331,231 1,532,150,195 Paid during the year (1,812,042,608) (1,409,553,525) Balance at end of year P1,037,681,631 P946,393,008 As at December 31, 2014 and 2013, assets held to cover unit-linked liabilities amounting to P2.18 billion and P1.64 billion, respectively, are held in the Parent Company s separately manage funds, namely, Peso Fixed Income and Growth Fund, Peso Fixed Income Fund, Peso Equity and Dollar Bond Fund (see Note 36). On October 30, 2014, the Insurance Commission released Circular Letter No. 2014-42-A, Valuation standards for life insurance policy reserves, requiring all life insurance companies to calculate the reserves for traditional life insurance policies using the gross premium valuation. The Parent Company is assessing the potential impact on its financial statements resulting from the application of the new valuation standards for life insurance policy reserves. 22. Reserve for Policyholders Dividends The movements in this account are as follow: 2014 2013 Balance at beginning of year P188,309,755 P181,421,861 Net increase during the year 9,321,371 6,887,894 Balance at end of year P197,631,126 P188,309,755-62 -

23. Premium Deposit Funds This account consists of: 2014 2013 Premium deposits P433,800,267 P387,649,184 HMO claims deposit 59,555,161 115,013,242 Fund builder rider 89,638,065 82,420,017 Premium deposit fund 79,193,087 79,439,790 HMO guarantee deposits 30,465,648 31,495,380 P692,652,228 P696,017,613 24. Insurance Payables The movements in this account are as follow: 2014 2013 Balance at beginning of year P29,548,393 P35,768,751 Arising during the year 525,941,470 22,233,749 Paid during the year (375,916,253) (28,387,625) Foreign exchange adjustment (93,981) (66,482) Balance at end of year P179,479,629 P29,548,393 Insurance payable represents premiums due to reinsurers which are due and demandable. 25. Accounts Payable and Other Liabilities These accounts consist of: 2014 2013 Accounts Payable and Accrued Expenses Investment accounts payable P383,244,017 P572,408,691 Accounts payable 649,427,893 410,626,735 Accrued incentives and bonuses 194,455,169 104,583,593 Loading payables 88,552,318 54,863,520 Supplementary contracts without life contingency 49,745,373 51,128,381 Agents fidelity and annuity reserves 2,986,804 2,822,601 P1,368,411,574 P1,196,433,521 Other Liabilities Deferred credits P19,756,781 P8,098,574 Taxes payable 13,485,997 24,609,690 Others 865,978 - P34,108,756 P32,708,264 Investments accounts payable represent funds received from both related parties and third parties to partially fund its loan financing facility. These amounts earn interest of 8.50% in 2014 and 2013, respectively. Total interest expense incurred on these loans amounted to P203.31 million in 2014 and P139.15 million in 2013. - 63 -

Accounts payable consist mainly of unpaid commissions, supplies, utilities, postal and communication, professional fees, repairs and maintenance, security services that are due and demandable. Accrued incentives and bonuses represent amounts payable to employees computed based on current salary and length of service. These amounts are due to be paid within one (1) year after the reporting date. Loading payable refers to the portion of gross premium due and uncollected which is expected to be paid out in the form of commission, service fees, overrides and taxes. Supplementary contracts without life contingency represent claims which are held by the Parent Company and are paid in monthly installments in the form of pension benefits. These claims earn interest of six percent (6.00%) annually. Agents fidelity and annuity reserves represent amounts withheld from agents which are refunded upon resignation or termination. Deferred credits represent reservation deposits which are refunded upon consumption of sale of investment properties and real estate inventories. Taxes payable consist mainly of VAT payable, withholding taxes from the employees compensation and purchases from suppliers which were subsequently remitted within one month after the reporting date. Others under Other liabilities in the separate statements of financial position are noninterest bearing liability and are due and demandable. 26. Equity 2014 2013 Capital stock - P1 par value Authorized - 1,000,000,000 shares P1,000,000,000 P1,000,000,000 Issued and outstanding - 550,000,000 shares 550,000,000 550,000,000 Under the Philippine Corporation Code (PCC), stock corporations are prohibited from retaining surplus profits in excess of one hundred percent (100%) of its paid-up capital, except when justified by any other reasons mentioned in the PCC. As at December 31, 2014, the Parent Company s retained earnings of P2.58 billion is in excess of its paid-up capital of P550.00 million. The Parent Company plans to use the excess retained earnings is dependent on the impact of the following to the Parent Company: a. IC s directive to calculate the reserves for traditional life insurance policies using the gross premium valuation (see Note 21); and b. Amendments currently being implemented by IC with respect to the risk based capital requirement. - 64 -

27. Net Insurance Premiums Gross premiums on insurance contracts: 2014 2013 Direct: Group life insurance P1,548,708,098 P1,610,816,449 Accident and health 1,507,951,912 926,896,927 Ordinary life insurance 1,102,557,860 891,593,618 Unit-linked 46,009,986 53,754,840 4,205,227,856 3,483,061,834 Assumed group life insurance 120,594,474 130,808,302 Total life insurance contract premiums revenue P4,325,822,330 P3,613,870,136 Reinsurance premiums ceded: 2014 2013 Group life insurance P150,755,389 P30,940,741 Ordinary life insurance 7,891,701 9,662,121 Accident and health 367,294,380 - Total reinsurers share of life insurance contract premium revenue P525,941,470 P40,602,862 28. Investments Income, Investment Expenses and Other Income Investments income account consists of: Note 2014 2013 Interest income on: Loans and receivables P850,741,883 P699,436,881 Cash and cash equivalents 8 42,071,270 37,612,399 AFS financial assets 26,047,992 18,813,954 Financial assets at FVPL 9,959,960 10,091,145 Gain on sale of AFS financial assets 130,151,547 244,949,510 Dividend income 84,606,304 73,648,643 Gain on sale of loans and receivables 12 1,630,000 68,919,561 Gain (loss) on sale of investment properties 17 (1,424,423) 12,075,644 Rental income 17 8,468,069 6,742,034 Gain on sale of financial assets at FVPL 785,662 548,331 Fair value gain (loss) on financial assets at FVPL 10 73,964,845 (66,843,706) P1,227,003,109 P1,105,994,396-65 -

Investment expenses account consists of: 2014 2013 Interest expense P244,126,768 P191,116,989 Management fee 55,506,414 31,436,217 Foreclosed property 16,731,037 15,695,810 Commission, sales and VAT expenses 6,772,885 11,283,229 Consultancy fee 1,819,915 3,587,273 Others 12,468,434 886,261 P337,425,453 P254,005,779 Other income account consists of: 2014 2013 Variable life/unit-linked P87,362,360 P115,951,118 Gain on sale of La Loma Columbary 10,917,857 2,381,821 Gain on sale of property and equipment 673,916 535,700 P98,954,133 P118,868,639 29. Service Fees This account consists of: 2014 2013 HMO fees P139,103,437 P54,994,308 Policy fees 47,989,416 28,119,919 Cancellation fees 3,261,630 1,088,628 P190,354,483 P84,202,855 30. Net Insurance Benefits and Claims Gross benefits and claims paid on insurance contracts consist of: 2014 2013 Group life insurance P784,810,011 P833,012,542 Accident and health 726,992,963 700,134,362 Maturities and surrenders 358,049,852 303,393,990 Ordinary life insurance 33,478,405 62,137,633 Total life insurance contract benefits and claims paid P1,903,331,231 P1,898,678,527 Reinsurers share of gross insurance contract benefits and claims paid: 2014 2013 Group life insurance P13,684,589 P18,055,235 Ordinary life insurance 3,386,778 8,484,139 Total reinsurers share of life insurance contract benefits and claims paid P17,071,367 P26,539,374-66 -

Changes in life insurance contract liabilities follow: Gross Change in Insurance Contract Liabilities 2014 Reinsurers Share of Change in Insurance Contract Liabilities Ordinary life insurance P428,437,475 (P4,539) P428,442,014 Group life insurance 149,171,220 26,457,274 122,713,946 Accident and health 12,927,305-12,927,305 Foreign Exchange Loss 2,963,691-2,963,691 Net P593,499,691 P26,452,735 P567,046,956 Gross Change in Insurance Contract Liabilities 2013 Reinsurers Share of Change in Insurance Contract Liabilities Ordinary life insurance P275,228,017 P262,402 P274,965,615 Group life insurance 169,705,823-169,705,823 Accident and health 20,873,262-20,873,262 Foreign exchange loss 29,763,813-29,763,813 Net P495,570,915 P262,402 P495,308,513-67 -

31. General and Administrative Expenses General and administrative expense account consists of: Note 2014 2013 Salaries and wages 32 P164,906,391 P156,089,735 Other employee benefits 126,028,805 136,707,546 HMO miscellaneous expenses 77,323,294 503,012 Advertising and promotions 62,170,057 62,633,336 Utilities 60,896,499 56,760,674 Rental 35 58,432,959 53,564,790 Provision for impairment losses 12 55,122,776 46,228,017 Depreciation and amortization 17, 18, 19 32,132,175 28,771,406 Taxes and licenses 25,597,964 13,882,884 Donations and contributions 23,500,000 3,560,000 Printing and office supplies 19,807,743 19,227,598 Training and development 18,087,282 18,569,742 Postage and telephone 17,855,819 17,341,412 Entertainment, amusement and recreation 17,943,399 16,551,239 Repairs and maintenance 16,923,019 13,610,872 Transportation and travel 15,867,644 14,524,158 Service fees 16,292,891 11,144,856 Bancassurance expenses 12,802,667 12,640,424 Meeting and conferences 11,094,602 8,771,122 Professional fees 5,891,015 4,582,851 Agency development allowance 3,707,637 5,769,405 Insurance 3,215,616 3,007,426 Directors fees 1,870,000 2,060,500 Medical fees 1,740,337 1,915,695 Condominium dues 1,640,373 2,219,072 Miscellaneous 64,443,842 59,315,303 P915,294,806 P769,953,075 Miscellaneous expenses amounting to P64.44 million and P59.32 million as at December 31, 2014 and 2013, respectively, pertain to inspection and investigation expenses, collection fees, referral fees and other expenses. 32. Employee Benefits The Parent Company has a funded, non contributory, defined benefit plan covering all of its permanent employees. Contributions and costs are determined in accordance with the actuarial studies made for the plan. Annual cost is determined using the projected unit credit method. The Parent Company s latest actuarial valuation date is December 31, 2014. Valuations are obtained on a periodic basis. The plan entitles a retired employee to receive an annual pension payment. Directors and executive officers retire at age 60 and are entitled to receive annual payments equal to seventy percent (70%) of their final salary until the age of 65, at which time their entitlement falls to fifty percent (50%) of their final salary. Other retired employees are entitled to receive annual payments equal to 1/60 of final salary for each year of service that the employee provided. - 68 -

The plan is registered with the BIR as a tax-qualified plan under Republic Act No. 4917, as amended. The control and administration of the plan is vested in the Board of Trustees (BOT). The plan s accounting and administrative functions are undertaken by the Parent Company s Retirement Funds Office. The following table shows reconciliation from the opening balances to the closing balances for net pension liability (asset) and its components: Defined Benefit Obligation Fair Value of Plan Assets Net Pension Liability 2014 2013 2014 2013 2014 2013 Balance at January 1 P512,726,924 P651,722,357 P453,724,810 P467,164,339 P59,002,114 P184,558,018 Included in profit or loss Current service cost 30,666,620 37,715,403 - - 30,666,620 37,715,403 Interest cost (income) 30,302,161 37,903,433 26,815,136 27,169,748 3,487,025 10,733,685 60,968,781 75,618,836 26,815,136 27,169,748 34,153,645 48,449,088 Included in OCI Remeasurements loss (gain): Actuarial loss (gain) arising from: - - - - - Demographic assumptions - - - - - - Financial assumptions 52,025,798 (61,291,775) 27,409,568-24,616,230 (61,291,775) Experience adjustment 122,169,087 (96,498,110) - - 122,169,087 (96,498,110) Return on plan assets excluding interest income - - - (22,695,764) - 22,695,764 174,194,885 (157,789,885) 27,409,568 (22,695,764) 146,785,317 (135,094,121) Others Contributions paid by the employer - 40,150,786 38,910,871 (40,150,786) (38,910,871) Benefits paid (36,155,468) (56,824,384) (36,155,468) (56,824,384) - - (36,155,468) (56,824,384) 3,995,318 (17,913,513) (40,150,786) (38,910,871) Balance at December 31 P711,735,122 P512,726,924 P511,944,832 P453,724,810 P199,790,290 P59,002,114 The retirement benefit expense under General and administrative expenses in profit or loss is recognized as follows: 2014 2013 Current service cost P30,666,620 P37,715,403 Net interest on the defined benefit obligation 3,487,025 10,733,685 P34,153,645 P48,449,088 The Parent Company s plan assets consist of the following: 2014 2013 Cash and cash equivalents P62,294,448 P49,435,291 Available-for-sale securities: Equity instruments 263,778,559 223,571,295 Debt instruments 183,368,650 180,353,953 Loans and other receivables 2,765,950 2,526,637 Accounts payable and accrued expenses (262,775) (2,162,366) P511,944,832 P453,724,810-69 -

Parent Company expects to contribute P112.02 million to its defined benefit retirement plan in 2015. The following were the principal actuarial assumptions at the reporting date: 2014 2013 Discount rate 4.61% 5.91% Future salary growth 5.00% 5.00% Assumptions regarding the mortality and disability rates used were based on the 1980 CSO Mortality Table and 1952 Ben-5 Disability Study, respectively. The weighted-average duration of the defined benefit obligation is 33 years and 32 years as at December 31, 2014 and 2013, respectively. Maturity analysis of the benefit payments (in thousands): Carrying Amount Contractual Cash Flows 2014 Within 1 Year Within 1-5 Years More than 5 Years Defined benefit obligation P711,735 P7,703,562 P125,371 P90,792 P7,487,400 Carrying Amount Contractual Cash Flows 2013 Within 1 Year Within 1-5 Years More than 5 Years Defined benefit obligation P512,727 P9,176,197 P112,022 P157,786 P8,906,389 Sensitivity Analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below: Discount Rate Salary Increase Rate +100% -100% +100% -100% Defined benefit obligation (P40,794,098) P46,270,377 P39,322,153 (P35,428,698) Although the analysis does not take account the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumption shown. These defined benefit plan exposes the Parent Company to actuarial risks, such as longevity risk, interest rate risk, and market (investment) risk. The BOT reviews the level of funding required for the retirement fund. Such a review includes the ALM strategy and investment risk management policy. The Parent Company s ALM objective is to match maturities of the plan assets to the retirement benefit obligation as they fall due. The Parent Company monitors how the duration and expected yield of the investments are matching the expected cash outflows arising from the retirement benefit obligations. - 70 -

33. Income Tax The current provision for income tax consists of MCIT, final taxes on interest income on savings deposits, deposit substitutes and government securities and deferred tax benefits. The reconciliation of the income tax expense computed at statutory tax rate to the current income tax expense shown in the separate statements of comprehensive income is as follows: 2014 2013 Income before income tax P547,564,852 P480,990,734 Statutory income tax 164,269,456 144,297,220 Gain on sale of stock (39,281,163) (73,604,138) Fair value gain (22,189,453) 20,053,112 Dividend income (25,381,891) (22,094,593) Income subjected to final tax at a lower tax rate (5,879,792) (5,105,934) Gain on sale of investment properties 239,962 (3,672,339) Change in unrecognized deferred tax assets (15,579,777) 133,219 Excess MCIT over RCIT 178,196 - Others (35,186,345) (45,099,000) Effective income tax P21,189,193 P14,907,547 The significant components of the deferred tax assets and liability consist of the deferred tax effects of the following: 2014 2013 Deferred tax assets on: Allowance for impairment losses P28,040,467 P28,040,467 Net pension liability 59,370,087 17,700,634 Unamortized past service cost - 6,965,483 Others 13,857,756 - Deferred tax liabilities on: Reserve for fluctuations of AFS financial assets (629,872,687) (626,794,965) Unrealized foreign exchange gain (1,214,078) - Others (3,879,053) - Net deferred tax liabilities (P533,697,508) (P574,088,381) Movements in net deferred tax liabilities are as follow: 2014 2013 Amounts charged against equity P40,390,873 (P35,463,634) Amounts charged against income - - P40,390,873 (P35,463,634) - 71 -

The Parent Company did not recognize deferred tax assets on certain temporary differences as shown below, since management believes that the tax benefit of these assets will not be realized through income tax deductions in the near future. 2014 2013 Allowance for impairment losses P347,877,291 P287,715,619 NOLCO 60,000,000 62,308,705 407,877,291 330,261,614 Tax rate 30% 30% 122,363,187 99,078,484 MCIT 178,195 - Total P122,541,382 P99,078,484 Details of the Company s NOLCO as at December 31, 2014 which are available for offset against future taxable income are as follow: Year Incurred Amount Applied Expired Balance Expiry Date 2012 P62,308,705 P2,308,705 P - P60,000,000 December 31, 2015 Transitory provisions of Revenue Regulation No. 16-2008 introduced the Optional Standard Deduction (OSD) as an alternative deduction for corporations. The Parent Company used itemized method of deduction for its annual income tax return in 2014 and 2013. 34. Related Party Transactions Parties are considered related if one party has control, joint control, or significant influence over the other party in making financial and operating decisions. The key management personnel of the Parent Company are also considered to be related parties. The Parent Company s transactions with related parties are as follow: Outstanding Balance Amount of the Due from Related Due to Related Terms and Category/Transactions Year Note Transaction Parties Parties Conditions United Fund, Inc.(UFI) - Under Common Control Due to centralized administrative services Loans and receivables; Payments due to centralized administrative services 2014 P13,197,741 P - P8,044,216 Due and demandable; Noninterest bearing; Unsecured 2013 34a - - 4,984,895 Due and demandable; Noninterest bearing; Unsecured 2014 4,167,339 957,539 - Due and demandable; Noninterest bearing; Unsecured; Unimpaired 2013-957,539 - Due and demandable; Noninterest bearing; Unsecured; Unimpaired Cocolife Fixed Income Fund, Inc. (CFIFI) - Under Common Control Loans and receivables; Payments due to centralized administrative 2014 4,222,966-670,311 Due and demandable; Noninterest bearing; Unsecured services 2013 - - 266,261 Due and demandable; Noninterest bearing; Unsecured 2014 15,664,530 2,414,614 - Due and demandable; Noninterest bearing; Unsecured; Unimpaired 2013-1,102,122 - Due and demandable; Noninterest bearing; Unsecured; Unimpaired Forward - 72 -

Cocolife Dollar Fund Builder, Inc. (CDFBI) - Under Common Control Centralized administrative services 2014 P60,422 P - P - 2013 - - P46,585 Due and demandable; Noninterest bearing; Unsecured Healthassist - Subsidiary Investment accounts payable 2014 34c - - 3,876,467 Due and demandable; Noninterest bearing; Unsecured; Unimpaired 2013 - - 9,651,812 Due and demandable; Noninterest bearing; Unsecured; Unimpaired Cocolife Asset Management Company, Inc. (CAMCI) - Subsidiary Allocation of expenses for centralized personnel and technical services Cocoplans - Subsidiary Allocation of expense for centralized personnel and technical services 2014 1,437,398 - - 2013 34d 5,915,557-5,915,558 Due and demandable; Noninterest bearing; Unsecured 2014 2,926,636 1,381,492 - Due and demandable; Noninterest bearing; Unsecured; Unimpaired 2013 - - - 2014 5,516,368 32,557,964 - On demand; non-interest bearing; Unsecured; Unimpaired 2013 34e - 25,666,346 - On demand; non-interest bearing; Unsecured; Unimpaired Advances 2014 1,375,250-4,604,645 1 year; 9% 2013 34e - - 5,979,895 On demand; non-interest bearing; Unsecured UCPB GEN - Subsidiary Allocation of expense for centralized personnel and technical services 2014 34f 6,402,554 688,161-30 days; Non-interest bearing; Unsecured; Unimpaired 2013 6,831,449 3,158,152-30 days; Non-interest bearing; Unsecured; Unimpaired - - 200,511 60 days; Non-interest bearing; Unsecured - - 200,511 60 days; Non-interest bearing; Unsecured Premiums written 2014 3,353,425-5,083,361 180 days; Non-interest bearing; Unsecured; Unimpaired 2013 4,168,641-4,685,180 180 days; Non-interest bearing; Unsecured; Unimpaired Total 2014 P58,324,629 P37,999,770 P22,479,511 Total 2013 P16,915,647 P30,884,159 P37,710,592 Notes: 34a. These pertain to investments that were received and paid by the investors to the Parent Company that were supposedly paid to UFI and CFIFI. 34b. The Parent Company provides investments in loans to CFIFI and portion of the interest earned are remitted to the Parent Company. 34c. These pertain to DepEd Participation Investments of Healthassist to the Parent Company. 34d. These pertain to common expenses initially paid by CAMCI and subsequently allocated to the Parent Company. 34e. These pertain to common expenses initially paid and subsequently allocated by the Parent Company. 34f. The Parent Company provides group insurance to the employees of UCPB Gen and ceded premiums related to accident and health insurance. Other transactions include billings to cover share in common expenses and lease of office premises by UCPB GEN in some of the Parent Company s branches. - 73 -

Compensation of Key Management Personnel Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director, whether executive or otherwise, of that entity. The key management personnel compensation is as follows: 2014 2013 Short-term employee benefits P73,161,547 P64,758,916 Post employment benefits 8,348,360 7,387,838 P81,509,907 P72,146,754 35. Lease Commitments The Parent Company has entered into non-cancelable leases with terms of between one to ten years and payment on a monthly basis, both as lessee and lessor from the date of the contracts which are renewable under certain terms and conditions. Some of these lease agreements provide for an escalation in the rental rates ranging from two percent (2%) to ten percent (10%). None of the leases include contingent rentals and restrictions. a. Operating Lease Commitments - the Parent Company as Lessee Future minimum rentals payable under non-cancelable operating leases as at December 31, 2014 and 2013 follow: 2014 2013 Within one year P41,665,443 P51,605,336 After one year but not more than five years 3,575,819 2,580,267 P45,241,262 P54,185,603 Rent expense presented under General and administrative expenses amounted to P58.43 million and P53.56 million as at December 31, 2014 and 2013, respectively. b. Operating lease commitments - the Parent Company as Lessor Future minimum rentals receivable under non-cancelable operating leases as at December 31, 2014 and 2013: 2014 2013 Within one year P9,060,833 P8,916,456 After one year but not more than five years 634,258 377,403 P9,695,091 P9,293,859-74 -

36. Unit-linked Funds The Parent Company issues unit-linked insurance contracts where payments to policyholders are linked to internal investment funds set up. The details of these internal investments funds, which comprise the assets backing the unit-linked liabilities, are presented in the tables below. The assets, liabilities, income and expenses of these internal investment funds have been reflected in the appropriate accounts in the separate financial statements. Guaranteed Funds Guaranteed funds offered to unit-linked policyholders are available in one (1) year and three (3) year maturity periods. Unit linked policyholders are allowed to allocate up to maximum of ninety percent (90%) of the policy s investible funds to any one of these funds and the remaining portion to any of the unitized funds. The income earned by the funds is based on fixed interest rates that the Parent Company has declared at the time of investment. The interest declared by the Parent Company is net of any fees necessary to manage the funds. In the case of fund withdrawal before the chosen maturity date, corresponding penalties are charged on the interest earned. Dollar Guaranteed Fund Peso Guaranteed Fund 2014 Peso Medium Term Fund Peso Long Term Guarantee Fund Assets Cash and cash equivalents P4,864,702 P36,112,269 P184,860,389 P31,903,616 P257,740,976 Financial assets at FVPL 144,194,515 - - - 144,194,515 Loans and receivables - 272,314,305 1,358,467,919 243,784,643 1,874,566,867 Accrued income 3,050,688 719,009 838,806 438,230 5,046,733 Total P152,109,905 P309,145,583 P1,544,167,114 P276,126,489 P2,281,549,091 Liabilities Insurance contract liabilities P103,976,321 P280,447,318 P1,533,879,832 P253,813,553 P2,172,117,024 Accounts payable and accrued expenses 284,700 577,072 3,042,039 4,157,355 8,061,166 P104,261,021 P281,024,390 P1,536,921,871 P257,970,908 P2,180,178,190 Guaranteed interest rates 2.00% 4.50% 5.00% 7.10% Dollar Guaranteed Fund Peso Guaranteed Fund 2013 Peso Medium Term Fund Peso Long Term Guarantee Fund Assets Cash and cash equivalents P6,479,668 P56,444,220 P201,779,669 P98,286,529 P362,990,086 Financial assets at FVPL 137,714,401 - - - 137,714,401 Loans and receivables - 224,274,022 828,626,139 156,336,803 1,209,236,964 Accrued income 3,254,765 1,929,860 1,545,336 2,333,665 9,063,626 Total P147,448,834 P282,648,102 P1,031,951,144 P256,956,997 P1,719,005,077 Liabilities Insurance contract liabilities P110,011,504 P258,612,420 P1,023,669,133 P238,580,652 P1,630,873,709 Accounts payable and accrued expenses (7,390,232) 4,315,389 3,612,973 7,021,707 7,559,837 P102,621,272 P262,927,809 P1,027,282,106 P245,602,359 P1,638,433,546 Guaranteed interest rates 2.00% 5.25% 6.00% 7.10% - 75 -

Growth Funds Peso Income and Growth Fund This is a unitized variable fund available only in conjunction with the 3-year Peso Medium Term Fund. The performance of the fund is reflected by the Net Assets Value (NAV) computed at the end of each trading day. The Peso Income and Growth Fund seeks to maximize interest income, consistent with its policy to preserve capital, through a diversified portfolio of high-grade bonds and/or evidences of debt of the Philippine government-owned or controlled corporations, solvent corporations and institutions. Dollar Bond Fund This is a unitized variable fund available for dollar investments together with the Dollar Guaranteed Fund. The fund seeks to generate regular interest income, consistent with its policy to preserve capital and to maintain liquidity of its investments. The fund is invested primarily in dollar-denominated fixed-income instruments ranging from debentures, money market instruments and government securities. Peso Equity Fund This is unitized variable fund available for peso investments and may be chosen together with the Peso Guaranteed Fund and Peso Bond Fund. The fund seeks to maximize income consistent with its policy to preserve capital and to maintain liquidity of investments through a diversified portfolio of high-quality listed equity issues-blue chips and growth stocks listed in the Philippine Stock Exchange. Peso Fixed Income Fund This is a unitized variable fund available for peso investments and may be chosen together with the Peso Guaranteed Fund and Peso Equity Fund. The fund seeks to generate regular interest income, consistent with its policy to preserve capital and maintain liquidity of investment through a diversified portfolio of high grade bonds and evidence of debt of solvent corporations and institutions. Peso Bond Fund This is a unitized variable fund aims to provide regular interest income, consistent with its policy to preserve capital and to maintain liquidity of its investments, through a diversified portfolio such as Treasury Notes/Bills, Certificates of Indebtedness issued by the Bangko Sentral ng Pilipinas and other government securities or bonds and other evidences of indebtedness or obligations, the servicing and repayment of which are fully guaranteed by the Republic of the Philippines or any of its instrumentalities. Duration of Peso Bond Fund's investment will be mostly between medium and long-term. Peso Bond Fund was established in October 2013 but operations only commenced in February 2014. Dollar Fund Peso Equity Fund Peso Fixed Income Fund 2014 Peso Income and Growth Fund Peso Bond Fund* Assets Cash and cash equivalents P6,505,904 P12,717,045 P7,396,557 P20,127,142 P1,169,282 P47,915,930 Financial assets at FVPL 12,453,720 60,207,344 - - - 72,661,064 Loans and receivables - 2,483,807 54,689,360 169,443,129 8,261,315 234,877,611 Accrued income 414,011 20,014 109,140 119,766 19,308 682,239 Total P19,373,635 P75,428,210 P62,195,057 P189,690,037 P9,449,905 P356,136,844 Liabilities Insurance contract liabilities P22,225,196 P66,374,948 P57,710,883 P186,736,452 P4,394,776 P337,442,255 Accounts payable and accrued expenses 243,625 986,972 1,464,479 1,829,380 9103 4,533,559 P22,468,821 P67,361,920 P59,175,362 P188,565,832 P4,403,879 P341,975,814 NAV 1.4630 1.6208 1.4919 1.1304 1.0012 *Peso Bond Fund started operations on February 2014. - 76 -

Dollar Fund Peso Equity Fund 2013 Peso Fixed Income Fund Peso Income and Growth Fund Assets Cash and cash equivalents P7,470,787 P17,166,177 P55,914,660 P97,351,511 P177,903,135 Financial assets at FVPL 21,257,651 44,239,234 2,900,134-68,397,019 Loans and receivables 924,377 372,049-38,177,338 39,473,764 Accrued income 414,320 35,387 73,539 66,822 590,068 Total P30,067,135 P61,812,847 P58,888,333 P135,595,671 P286,363,986 Liabilities Insurance contract liabilities P23,777,769 P53,915,909 P50,796,390 P134,098,690 P262,588,758 Accounts payable and accrued expenses 467,853 345,838 2,738,341 409,620 3,961,652 P24,245,622 P54,261,747 P53,534,731 P134,508,310 P266,550,410 NAV 1.3998 1.4118 1.4350 1.1073 37. Life Insurance Coverage of Coconut Farmers Under a group master policy contract dated March 27, 1978, As Amended, the Parent Company agreed to provide group whole-life insurance coverage to certain coconut farmer members of the Philippine Coconut Producers Federation (Program I). This Group insurance plan shares in the Group s savings in mortality expenses and extra earnings in investments through policyholders dividends and policy benefits. Effective April 1, 1985, the insurance coverage of the coconut farmers was converted from a whole-life insurance plan to a modified extended term insurance. The amount of insurance and other benefits remained substantially the same, except for cash surrender and policy loan privileges. Policyholders dividends, policy benefits and the legal policy reserves maintained under the farmers insurance program are used to sustain, until these can, the modified extended term insurance coverage of the insured coconut farmers. On November 5, 1996, the Philippine Coconut Authority (PCA) and the CIIF Companies signed a memorandum of agreement which will expand the number of farmers covered under the Insurance Program from existing 0.6 million to 1.5 million farmers (Program II). The premium payments for the additional farmers will be taken from an insurance fund to be set up by the CIIF Companies in keeping with their social responsibility to the coconut industry. On August 28, 2002, the PCA and CIIF Companies signed a memorandum of agreement which proposed a further expansion of the insurance program in order to restore the insurance benefit of the remaining insured coconut farmers under Program I and II from P5,000 to P10,000 (Program III). Further, under the same program, the PCA also proposed to extend the same benefit to an additional 2.48 million coconut farmers and coconut farm workers that were not included under Programs I and II. Accordingly, the PCA and CIIF companies have agreed in principle to implement Program III as follows: Phase I Upgrade the insurance coverage of the existing 1.02 million insured farmers from P5,000 to P10,000 per farmer effective June 12, 2002. Phase II Provide an additional 0.85 million coconut farmers and workers with a P10,000 Group yearly Renewable term Coverage. - 77 -

Phase III Provide an additional 0.90 million coconut farmers and workers with a P10,000 Group Yearly renewable term Coverage. Phase IV Provide an additional 0.78 million coconut farmers and workers with a P10,000 Group Yearly Renewable Coverage. 38. Subsequent Events On March 18, 2015, President Benigno S. Aquino III of the Republic of the Philippines issued Executive Order No. 179 (Providing the Administrative Guidelines for the Inventory and Privatization of Coco Levy Assets) and No. 180 (Providing the Administrative Guidelines for the Reconveyance and Utilization of Coco Levy Assets for the Benefit of the Coconut Farmers and the Development of the Coconut Industry, and For Other Purposes), together referred to as the EOs. The EOs mandate the inventory, reconveyance, utilization and privatization of coco levy assets to ensure that the Coco Levy Fund and Coco Levy Assets will only be utilized for the benefit of the coconut farmers and the Philippine coconut industry. The EOs define coco levy funds as all funds created or sourced from the Coconut Levy imposed by the government, including the Coconut Industry Investment Fund (CIIF) and the Coconut Consumers Stabilization Fund (CCSF). Coco levy assets meanwhile refer to the money, assets or properties, whether real or personal, tangible or intangible, wherever situated, arising from or otherwise funded by or acquired through the use or by means of any of the coco levy funds, directly or indirectly, including but not limited to shares, rights, and interests, whether vested, contingent, expectant, choate or inchoate, and any and all fruits, income, interest, or profits derived from these assets including those acquired in exchange or substitution thereof. The said EOs shall take effect on the date of its publication in a newspaper of general circulation. As at April 29, 2015, the EOs have not been published in any newspapers of general circulation. The mandate given to the concerned government agencies will have to be complied with within 60 days from the EO s effectivity date. 39. Reclassification of Accounts In 2014, the Parent Company reclassified some accounts in the separate statements of comprehensive income in order to better reflect the nature of the accounts. Accordingly, the Parent Company also reclassified the comparative figures in 2013. A summary of the impact of the reclassification to the separate statements of comprehensive income for the year ended December 31, 2013 are as follow: As previously reported Reclassified As restated General and administrative expense P771,410,575 (P1,457,500) P769,953,075 Other income (120,326,139) 1,457,500 (118,868,639) Gross benefits and claims paid on insurance contracts 1,926,059,090 (27,380,562) 1,898,678,528 Policyholders dividends 474,241,470 27,380,562 501,622,032-78 -

a. Cost of sales of real estate inventories amounting to P1.46 million in 2013 which was previously taken up under General and administrative expenses have been reclassified to gain on sale of La Loma Columbary under Other income account. b. Policyholders dividends amounting to P27.38 million in 2013 that were previously taken up under Gross benefits and claims have been reclassified to policyholders dividends account under Operating and administrative expenses. The above reclassifications have no significant effect on the information in the separate statements of financial position and separate statements of comprehensive income, Accordingly, management did not present separate statements of financial positions at the beginning of the earliest comparative period. 40. Supplementary Information Required Under Revenue Regulations No. 15-2010 of Bureau of Internal Revenue In addition to the disclosures mandated under PFRSs, and such other standards and/or conventions as may be adopted, companies are required by the BIR to provide in the notes to the financial statements, certain supplementary information for the taxable year. The amounts relating to such supplementary information may not necessarily be the same with those amounts disclosed in the financial statements which were prepared in accordance with PFRSs. The following are the tax information/disclosures required for the taxable year ended December 31, 2014: A. VAT 1. Output VAT Account title used: Basis of the Output VAT: Vatable sales P18,047,859 Exempt sales - Zero rated sales - P18,047,859 2. Input VAT Beginning of the year P - Current year s domestic purchases: a. Goods for resale/manufacture or further processing - b. Goods other than for resale or manufacture - c. Capital goods subject to amortization - d. Capital goods not subject to amortization - e. Services lodged under cost of goods sold - f. Services lodged under other accounts 161,686 Claims for tax credit/refund and other adjustments - Balance at the end of the year P161,686-79 -

B. Documentary Stamp Tax On loan instruments P1,036,357 On shares of stocks - On others (Policies Issued) 302,310 C. Withholding Taxes P1,338,667 Tax on compensation and benefits P36,956,328 Creditable withholding taxes 101,039,126 Final withholding taxes - s D. All Other Taxes (Local and National) P137,995,454 Other taxes paid during the year recognized under Taxes and licenses account under Cost of Sales & Operating Expenses Real estate taxes P4,233,667 License and permit fees 8,849,843 Others 12,514,454 E. Tax Contingencies P25,597,964 The Company has no deficiency tax assessment or any tax case, litigation, and/or prosecution in courts or bodies outside the Bureau of Internal Revenue as at December 31, 2014. - 80 -

COVER SHEET For AUDITED FINANCIAL STATEMENTS Company Name 2 8 7 1 5 SEC Registration Number U N I T E D C O C O N U T P L A N T E R S L I F E A S S U R A N C E C O R P O R A T I O N Principal Office ( No./Street/Barangay/City/Town)Province) C o c o l i f e B u i l d i n g 6 8 0 7 A y a l a A v e n u e M a k A t i C i t y Form Type A A F S Department requiring the report Secondary License Type, If Applicable COMPANY INFORMATION Company's Email Address Company's Telephone Number/s Mobile Number N/A 812-9015 N/A No. of Stockholders Annual Meeting Month/Day Fiscal Year Month/Day 9 April December 31 CONTACT PERSON INFORMATION The designated contact person MUST be an Officer of the Corporation Telephone Name of Contact Person Email Address Number/s Mobile Number Atty. Alfredo C. Tumacder act@cocolife.com 812-9015 09178019168 Contact Person's Address 6807 Ayala Avenue Makati City Note: 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.