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ANNUAL REPORT 2009 1

INSTITUTIONAL DONORS

Aboitiz and Company, Inc. Aboitiz Construction Group, Inc. Aboitiz Energy Solutions, Inc. Aboitiz Equity Ventures, Inc. Aboitiz Jebsen Bulk Transport Corp. Aboitiz Land, Inc. Aboitiz One, Inc. Aboitiz Power Corporation Aboitiz Transport System Corp.Aboitiz Air Transport Corp.

Aboitiz Logistics, Inc.Aboitiz One Distribution, Inc.Aboitiz Project T.S. Corp.Hapag LloydReefer Van Specialist, Inc.Total Distribution and Logistics

Systems, Inc.Zoom In Packages, Inc.

AP Renewables, Inc.Astir Engineering Works, Inc. Balamban Enerzone Corp. City Savings Bank Cotabato Light & Power Co. Davao Light & Power Co. Hedcor, Inc. Mactan Enerzone Corp. Pilmico Animal Nutrition Corp. Pilmico Foods Corp. Subic Enerzone Corp. Therma Luzon, Inc. Visayan Electric Co.

INDIVIDUAL DONORS

Mr. Antonio R. MorazaMr. Enrique AboitizMr. Enrique M. Aboitiz, Jr.Mr. Ernesto R. Aboitiz (+)Mr. Erramon I. AboitizMr. Iker M. AboitizMr. Jon Ramon AboitizMr. Jaime Jose Y. AboitizMr. Jose Mari Moraza Mr. Luis AboitizMr. Mikel A. AboitizMr. Robert Booth/Ms. Josephine BoothMr. Robert ParadiesMr. Roberto E. AboitizMr. Sabin M. AboitizMr. Stephen G. ParadiesMr. Xavier J. AboitizMrs. Lulu AboitizMs. Eukene AboitizABOITIZ TEAM MEMBERS (for Typhoon Ondoy)

PARTNERS

Agro Macro Development Corp. Annabelle O. Aboitiz ATR Kim Eng Securities, Inc. Luis Aboitiz, Jr. Luzon Hydro Corp. Mindanao Container Corp. MRO Development Corp. Ramon Aboitiz Foundation, Inc. Renner Development Corp. Union Bank of the Philippines

OTHER DONORS

Abaca Boutique Resort Affogato Corp. Cebu International School Mr. & Mrs. Charles Streegan Mr. Alberto De Rotaeche Mr. Emil Rotaeche Mr. Mariano Perdices Mr. Richard Canova Ms. Eleanor Rivera Ms. Geraldine Richards (+) Ms. Kathleen Canova Epes Ms. Lydia Mackenzie Ms. Maria Canova Ms. Maria Lourdes Bernardo Ms. Maribel Antunez Ms. Patsy Canova Ms. Stella Escario-Dorion Pacific Traders and Mfg. Co./Charles

Streegan/Mark Norkoss Pilar Streegan/Charles Streegan Salud Borromeo Foundation Sanfil Management Corp./ Maria Luisa Canova Windemere Management Corp./ Patsy Canova

ACKNOWLEDGMENT

The Aboitiz Foundation, Inc. would like to acknowledge its donors and partners forhelping pursue its mission of helping people help themselves.

2 ABOITIZ FOUNDATION

The year 2009 saw many countries and companies still reeling from the effects of the global economic meltdown that began in 2007. The Philippine economy grew just under 1% last year at a time when the country was still bearing the brunt of the economic challenges.

As a consequence, there was much concern about reduced funding for philanthropic purposes. However, the Aboitiz Group and the Aboitiz Foundation, Inc. (Foundation) provided funding totaling π416 million for various projects, the largest amount allocated by far in the history of corporate social responsibility (CSR) in the Group.

The Foundation’s directly funded allocations for its projects increased from π73 million in 2008 to π79 million in 2009.

Aside from the programs and projects approved for the different Group companies through the Foundation, the Aboitiz Group companies themselves implemented community development and infrastructure programs using their own funds for the benefit of the communities they operate in. From the π314 million released for various social development activities in 2008, appropriations increased to π337 million in 2009.

These developments translated into more funds being allocated for the Foundation’s key project areas and other noteworthy initiatives undertaken by different Group companies, in collaboration with their partner communities.

Since it was established 21 years ago, the Foundation has adopted a strategy that allows it to focus on three vital areas of social development—education, enterprise development, and primary health and childcare. Having a focused strategy allows the Foundation to optimize its efforts and resources in these areas, not only by providing more funds for projects but also identifying other projects that will complement existing ones.

Due to the compelling need to address environmental concerns to help mitigate the effects of climate change, the environment will now become the Foundation’s fourth key area of focus.

What began years ago as scattered tree-planting activities throughout the Group has been consolidated into one annual nationwide and group-wide tree planting effort. Watershed management programs and other environment-friendly initiatives have also been consolidated, with best practices from the various business units coming to the fore.

The Aboitiz Group continues to be actively involved in national organizations like the Philippine Business for Social Progress, League of Corporate Foundations, Association of Foundations and the Philippine Council for NGO Certification. It also fully supports the Coalition for Better Education, a five-pronged program aimed at instituting reforms to improve the quality of teachers and of the educational system in the country.

The Passion to Serve culture and our mission of helping people help themselves have become deeply inculcated among all team leaders and team members of the Aboitiz Group. Their growing participation in various CSR activities has become very evident over the years. Among these the activities are the simultaneous tree planting, Brigada Eskwela, Adopt-a-School, cooking and information technology trainings, and various outreach programs.

Due to the compelling need to address

environmental concerns to help

mitigate the effects of climate change,

the environment will now become the

Foundation’s fourth key area of focus.

FROM YOUR CHAIRMANAND PRESIDENT

From your Chairman and President


In September 2009, Aboitiz companies and Aboitiz family members, through the Foundation, immediately heeded the plea for help by victims of typhoons Pepeng and Ondoy, which wrought havoc in Luzon. Their donations to the relief operations totaled π15 million. Team leaders and team members in companies across the country banded together to assist in packing and distributing relief goods and other basic necessities.

The Foundation has played a significant role in assisting the ever-growing number of Group companies in establishing their CSR departments. It trains the CSR teams and coordinates Group efforts to establish, monitor and measure the impact of the different interventions in their different localities throughout the country.

To the members of the Aboitiz Foundation team, thank you for your contributions, dedication and passion to help the less fortunate in society. Continue your valued work and pursue finding better ways with which we can help our fellow Filipinos uplift their lives.

We would also like to express our sincerest gratitude to all team leaders and team members of the different Aboitiz Group companies for their personal commitment to be involved in various outreach activities.

Our most profound thanks also goes to the various donors of the Aboitiz Foundation for their continued generosity. Without their help, the Foundation would never have gained the momentum it presently enjoys.

To the Board of Trustees, thank you for your guidance and for sharing your time, talent and resources to boost the Foundation’s efforts to be the neighbor of choice in the communities we serve.

We are optimistic that with the continued support, cooperation and partnership of all its stakeholders, the Aboitiz Foundation will continue to be unrelenting in fulfilling its mission to help people help themselves.

Erramon I. AboitizChairman

Jon Ramon AboitizPresident


We are very pleased with how organized groups like cooperatives have utilized well the Foundation’s soft

loans and the learning gained from capacity-

building training programs in creating their own

entrepreneurial success stories.

FROM YOURMANAGING TRUSTEE

In 2009, the Aboitiz Foundation, Inc. (Foundation) improved its mandate by increasing allocations to fund more social development initiatives, implement more projects and serve more beneficiaries in its pursuit to empower communities where Aboitiz Group companies operate. As the Aboitiz Group grows, so does the Foundation’s mission. With additional companies in our power group operating in different locations, the Foundation also moved into new locations in 2009. The Foundation immediately took steps to assist these companies in implementing corporate social responsibility (CSR) projects—training their CSR teams, helping them align projects with directions set by the Foundation, and conducting immersion programs and site visits. More expansion is still expected and consequently new territories for the Foundation to cover. Two factors have enabled the steady and heady growth of approved allocation for projects over the years. First, the Aboitiz Group business units that are the Foundation’s main sources of donations continue to achieve improved business results, allowing them to give bigger donations. Second, these companies see the effectiveness of the Foundation’s deployment of funds in uplifting the quality of lives of our beneficiaries. Education remains the mainstay among the Foundation’s programs. For 2009, education-related initiatives accounted for π38 million or 49% of total project appropriation. These projects involved scholarships for students in all levels, new school buildings, computer and library kit donations, among others. Enterprise development, specifically our microfinance operations, is another program that has been getting an increased share of the Foundation’s funds. For 2009, the Foundation approved a total of π9 million for 18 cooperatives in Cebu. We are very pleased with how organized groups like cooperatives have utilized well the Foundation’s soft loans and the learning gained from capacity-building training programs in creating their own entrepreneurial success stories. Nothing can be more gratifying than seeing seed funding spur a self-sustaining business that provides employment to members of their communities. Microfinance is one of the program components that the Foundation will continuously grow in the coming years. Furthermore, our member companies are slowly replicating our microfinance operations in their local communities. In the area of primary health and child care, the Foundation allocated π11 million, which accounted for 14% of total budget. We have also institutionalized employee volunteerism within the Aboitiz Group. This is evidenced by the simultaneous Group-wide implementation of employee-initiated activities in 2009 like tree-planting activities, Brigada Eskwela, Christmas outreach, and disaster relief operations. In all, employee-initiated projects of the Aboitiz Group amounted to π3 million. The Foundation’s board of trustees, with their vast business experience, has always insisted that the Foundation be run like an Aboitiz enterprise—responsive to change, attentive to costs, prudent with resources, and socially responsive. These tenets guide those of us involved in the day-to-day management of the Foundation and inspire us to strive for constant improvements in our systems and processes. On behalf of the Foundation team and the thousands of its beneficiaries, I would like to thank the members of the board for guiding us in achieving our goals. To our donor companies, our utmost appreciation for your generosity with resources and time, as well as your resolve to be a neighbor of choice in the areas where you operate. To all Aboitiz Group team leaders and team members, our gratitude for the time and effort you consistently share in the different projects, showcasing your real passion to serve. To my team, my heartfelt thanks for your dedication and tireless efforts in conceptualizing and implementing programs and projects that can help uplift the lives of our communities. Truly, you have made a difference in pursuing our mission of helping people help themselves.

Augusto P.I. Carpio, IIIManaging Trustee

From your Managing Trustee


Providing public school students with computers and other educational equipment helps maximize their learning potentials.

EDUCATION


These structures are among the classroom buildings that the Foundation turnover in 2009.

The Aboitiz Foundation, Inc. (Foundation) continues to advocate better educational opportunities to help students cope with the demands of today’s increasingly competitive society.

Education-related projects continued to be the main thrust of the Foundation in 2009. Of the π79 million allocated for projects, π38 million or 49% was used to fund educational initiatives.

Focus was on infrastructure building, scholarships and financial assistance, and equipment donations for the integrated computerization program.

INFRASTRUCTURE BUILDING The Foundation continues building classrooms to address the perennial problem of classroom shortage in public schools. The availability of classrooms is instrumental in encouraging more students to go to school. Having rooms that are conducive to learning help improve students’ performance.

School Building and Classroom Donations

In 2009, the Foundation allocated for the construction of 17 additional classrooms, bringing to 234 the total number of classrooms donated since its inception. Sixteen classrooms were turned over to beneficiary schools during the year. The construction of 24 classrooms is presently ongoing, these will be ready for turnover on 2010.

The following table provides an update on the status of these construction projects.

Table 1 - School Buildings

BENEFICIARIES LOCATION NUMBERSOF CLASSROOMS

TURNED OVER

F. Bustamante Mahayag Elementary School Davao City 3

Tulian National High School Davao City 3

Cantipla Integrated School Cantipla, Cebu City 4

Talamban National High School Talamban, Cebu City 3

Mabolo Elementary School Mabolo, Cebu City 3

TOTAL 16

APPROVED AND ONGOING

Dalipuga National High School Iligan City 2

Severo Sara Elementary School Iligan City 2

Labangon National High School Labangon, Cebu City 3

Langtad Naga Elementary School Naga, Cebu 3

Canduman Elementary School Mandaue City 3

Pulangbato Elementary School Cebu City 5

Maguikay Elementary School Mandaue City 3

Pagsabungan Elementary School Mandaue City 3

TOTAL 24

The availability of classrooms is instrumental in encouraging more students to go to school.

Having rooms that are conducive to learning help improve students’ performance.

Education

EDUCATION


School buildings and scholarship grants are given out yearly to help less privileged but deserving students achieve their dreams of finishing school.

SCHOLARSHIP AND FINANCIAL ASSISTANCE PROGRAMS

Through the Foundation, selected students from pre-school to college who have academic potentials but don’t have adequate resources for their education are given scholarship grants and financial assistance. College graduates from the scholarship program are, at times, given the opportunity to work in Aboitiz Group companies.

The 2009 Scholarship Portfolio

In 2009, the Foundation sponsored 1,172 students through its different scholarship and financial assistance programs. The table below enumerates the various programs, implemented the number of scholars and the geographic distribution of the scholars.

Table 2 - Scholarship and Financial Assistance

LEVEL LOCATION IMPLEMENTOR PROGRAMSNUMBER

OF SCHOLARS

Pre-school Cebu ABOITIZ FOUNDATION Street Education Classes 66

Elementary Cebu ABOITIZ FOUNDATION Street Education through the Children of Cebu Foundation 250

Secondary Lapu-Lapu ABOITIZ FOUNDATION Street Urban Working Children of Lapu-Lapu City 180

Lapu-Lapu ABOITIZ FOUNDATION STEC scholars 11

Region 7 ABOITIZ FOUNDATION High School Valedictorians Scholarship Program 192

Benguet HEDCOR Hedcor HS Scholarship Program 36

Tarlac PANC Fil-Am HS Scholarship Program 2

Davao DLPC DLPC HS Scholarship Program 95

Davao DLPC Boys Town Ward Scholarship Program 10

Cotabato CLPC CLPC HS Scholarship Program 10

Tertiary Cebu ABOITIZ FOUNDATION Aboitiz Foundation's College Scholarship Program 18

Cebu VECO Customers' Dependents Scholarship Program 8

Benguet HEDCOR Hedcor College Scholarship Program 3

Iligan PILMICO Pilmico Purposive College Scholarship 22

Davao DLPC DLPC Customer Dependents College Scholarship Program 69

Cebu and Davao

ABOJEB AJMAN Marine Engineering Scholars 10

Others:

Post Baccalaureate (Nursing)

Cebu ABOJEB AJMAN Nursing Scholars 12

Vocational(Post secondary)

Cebu METAPHIL MTTIT Scholarship Trip 169

Technical Cebu ABOITIZ FOUNDATION Banilad Center for Professional Dev't. Scholars 9

TOTAL 1,172


The need to equip students with

computer literacy skills has prompted

the Foundation to be more aggressive in its campaign to see more

schools with access to computers and the

capability to use them.

INTEGRATED COMPUTERIZATION PROGRAM

The Foundation recognizes that in this age of information technology, computer literacy and proficiency are essential. The need to equip students with these skills has prompted the Foundation to be more aggressive in its campaign to see more schools with access to computers and the capability to use them.

Through its integrated computerization program, the Foundation aims to satisfy the demand for computer-literate personnel in workplaces, lower the number of public schools without computer sets, and push for the integration of computer education into the curriculum.

Under the program, the Foundation donates computer sets, refurbishes computer laboratories, and grants multi-media packages to be used by administrators as aid for teaching.

On an annual basis, the Foundation ensures the program’s continuity by allocating a budget for the repair and maintenance of the computers. It is also considering subsidizing half the pay of the teachers who handle computer classes.

Computer-Related Projects

The Foundation and Aboitiz companies donated 123 computer units to schools across the country in 2009. The donations bring to 972 the total number of units donated since 1999.

Table 3 - Computer Donations

AREAS NO. OF UNITS

Donated computers since inception 849

2009 Allocations

Cebu City 33

Cebu Province 29

Agusan Province 24

Davao 25

Benguet 7

Iligan City 5

TOTAL COMPUTERS APPROPRIATED 123

TOTAL TO 2009 972

The Foundation also refurbished the computer and science laboratories of two schools in Iligan while 10 Cebu City schools that have been refurbished are just awaiting turnover.

Computer sets are donated to host communities to complement existing educational facilities and help students keep up with technological advancements.


OTHER INTERVENTIONS

Library Kits and e-Learning

Reading opens doors to more knowledge. The Foundation supplements the learning opportunities of students by donating library kits that contain encyclopedias, storybooks and other reference materials to develop and encourage the habit of reading.

In 2009, the Foundation, through its member company Pilmico Animal Nutrition Corp., donated library kits to four schools in Capas, Tarlac. Since the start of the program, 25 schools have received library kits from different Aboitiz Group companies.

UnionBank Book Donation Program

The “As A Filipino Learning System” (AAFLS), pioneered by member company Union Bank of the Philippines (UnionBank), seeks to develop students’ reading skills as well as strengthen the values education curriculum of schools nationwide.

The AAFLS package contains a teacher’s handbook, students’ workbook and a multimedia set. In 2009, Unionbank distributed a total of 351,304 students’ workbooks and 8,334 teachers’ handbooks to 2,543 elementary schools across the country.

The program was first successfully implemented in 2007 in the National Capital Region. The Ateneo Teacher Center later announced that a survey conducted among beneficiaries showed a marked improvement in the students’ academic performance.

Because of its success, the AAFLS program was replicated in Tawi-Tawi and Basilan in 2008 and in Davao, Metro Cebu, and Sarangani in 2009.

Capas Brainshow

The Capas Brainshow, another project of Pilmico Animal Nutrition, yearly brings together students from all public elementary schools in the municipality of Capas, Tarlac for a quiz bee.

The project, now on its fifth year, continues to stimulate the mental faculties and bring the spirit of competitiveness among students in the area.

For 2009, the quiz bee theme was “Batang Capaseño, Karununga’y Palalawigin.”

After four grueling rounds of competition, the team from Lawy Elementary School went home with the top prize—a computer set and cash for the school as well as for the students.

Vocational and Technical Training Centers

Much as it wants its scholars to earn college degrees, the Foundation recognizes that there are some students who are unable to pursue formal education due to lack of academic preparation.

With statistics showing that only three out of 10 high school graduates proceed to college, the Foundation and member company Aboitiz Construction Group established a welding training center in Cebu to provide skills and technical training programs in partnership with the Technical Education and Skills Development Authority (TESDA).

The welding training center has so far trained 638 out-of-school youth, more than half of whom are employed by Aboitiz member companies.

Baking laboratories and culinary arts rooms have also been established, with more facilities being eyed for each Cebu school division.

The Foundation supplements the

learning opportunities of students by donating

library kits that contain encyclopedias,

storybooks and other reference materials to

develop and encourage the habit of reading.

The Foundation also supports other activities being conducted to improve the quality of education in the country.


The program seeks to develop the

participants’ leadership, discipline, interpersonal

communication skills and spirituality. They are also taught how to overcome fear and help care for the

environment.

Coalition Building

The Coalition for Better Education (CBE), a non-profit organization established by the Foundation, Ramon Aboitiz Foundation, Inc. and Philippine Business for Social Progress in Cebu, continues to support initiatives to institute reforms in the Philippines’ educational system.

The CBE, the first of its kind in the country, seeks to address five major areas of concern: teacher training and faculty development, academe-industry-government linkage, curriculum development, leadership and governance, and educational community.

To date, the CBE has benefited 2,000 students and 48 teachers and principals. One of its main programs, In.Cube, which involves communities that assist to improve the quality of education in their locality, was first implemented in Barangay Tayud, Consolacion in northern Cebu.

Outland Adventure Camp

The Outland Adventure Camp, located in Davao City and a project of member company Davao Light & Power Co., gathers selected students and out-of-school youth for three days and makes them participate in activities aimed at molding their holistic development.

The program seeks to develop the participants’ leadership, discipline, interpersonal, and communication skills and spirituality. They are also taught how to overcome fear and help care for the environment.

In 2009, 180 participants, chosen based on their potential to become leaders and serve the community, were given the opportunity to experience the camp and take part in the activities.

The camp has trained a total of 1,786 participants since it was introduced in 2002.

At the Outland Adventure Camp in Davao City, selected students and out-of-school youth participate in activities aimed at promoting their holistic well-being.


Farmer-beneficiaries tend to their cornfield to ensure good harvest.

ENTERPRISE DEVELOPMENT


The Foundation recognizes that one way of empowering communities to help themselves is to provide them with sustainable income-generating opportunities.

A total of π10 million was allocated in 2009 for enterprise development activities that include microfinance packages, equipment donation and capability-building initiatives. The Foundation gives priority to this program area, which benefits small cooperatives and marginal communities.

The microfinance program, implemented and operating for several years now, has proven to be very successful. With a collection rate of 96%, the Foundation recoups funds and uses them to help more potential beneficiaries.

Microfinance

A total of 21 microfinance loan packages, amounting to π9 million, were approved by the Foundation for 18 partner cooperatives last year, with 7,232 individuals reaping the benefits. Of the amount approved, only π8 million was released while the remaining π2 million is due for release in 2010.

With the success of these projects, the Foundation is considering expansion to other communities in Metro Cebu and selected areas in Davao and Benguet.

Table 4 - Approved Microfinance Loan Packages (in thousand pesos)

BENEFICIARY AMOUNT

Bayabas United Farmers Association Farm Productivity Project π126

Cambinocot Multi-Purpose Cooperative Livelihood 765

Cobcawa Multi-Purpose Cooperative Sweet Corn Production 160

Cubacub Level 3 Wwater Supply Expansion Project (ACCESS, Inc.) 500

“Isang Alaga Para Sa Kinabukasan:” Swine Fattening Project of Mactan Island Multi-Purpose Cooperative (MIMPC) 223

LARBA Swine Fattening Project 191

Loan Assistance to Kaponungan sa mga Banikanhong Mag-uuma Alang sa Ekonomekanhong Kalambuan (KABAMEKA) 500

Livelihood Enhancement and Support Services for Barangay Luz Homeowners 409

Mandaue Subcon and Development Multi-Purpose Cooperative 279

Panas Farmers’ Association Swine Fattening Project 191

Pangan-an Island Cooperative for Community Development Swine Fattening Project 341

Pung-ol Sibugay Cutflower and Vegetable Production Project 130

Purok Sili Livelihood Development Project 100

Small Business Development Project for Reunited Shoemakers MPC 500

South Cebu Hog Raisers Multi-Purpose Cooperative Swine Fattening Project 2,700

Sta. Rosa Hugpong Kauswagan Multi-Purpose Cooperative 186

St. Vincent Neighborhood MPC Swine Fattening Project 1,647

Uling Multi-Purpose Cooperative Swine Fattening Project 509

TOTAL π9,458

With the success of the microfinance program, the Foundation is considering

expansion to other communities in Metro Cebu and selected areas in Davao

and Benguet.

Enterprise Development

ENTERPRISE DEVELOPMENT

The Foundation supports multi-purpose cooperatives by providing funds and extending other forms of assistance to ensure the sustainability of the programs they undertake.


Multi-purpose cooperatives can expect to see better results of their projects with the Foundation promising to allocate more funds for microfinance enterprises.

The Foundation is also considering incorporating ecologically sound projects, like biodigesters and vermi-based fertilizers, into its portfolio.

Capability-Building Activities

The Foundation also provided assistance amounting to π260,000 to its partner cooperatives to ensure that these organizations remain structurally sound. The beneficiaries benefited from capability-building activities like seminars on leadership and internal controls.

Equipment Donation

To boost agricultural activities and support farmers in Capas, Tarlac, Pilmico Animal Nutrition donated additional irrigation equipment worth π117,000. The Foundation is also considering incorporating ecologically sound projects, like biodigesters and vermi-based fertilizers, into its portfolio.

Table 5 - Types of Projects Assisted Through Microfinance (in thousand pesos)

PROJECT TYPE AMOUNT PERCENTAGE

Swine-Related Activities π6,832 72%

Farm Production 1,116 12%

Consumer Expansion 500 5%

Water Expansion 500 5%

Others/Kwarta sa Basura 509 6%

TOTAL π9,458 100%


The Foundation continues to identify areas where water systems are much needed so more people may have access to clean and potable water.

PRIMARY HEALTH AND CHILD CARE


The Foundation continues to address the shortage of adequate infrastructure facilities for basic social services. These include water systems, health, day-care and cooperative training centers, projects that are under primary health and child care.

The Foundation also encourages more street children to go back to the mainstream educational system. It also provides medical and dental services to the underprivileged.

Having seen the need to improve the quality of life of residents in their host communities, the Foundation and Aboitiz Group companies continue to implement a variety of projects to help address these concerns.

Water systems

Water is a basic necessity not readily available to everyone. Hence, the Foundation has made the building of water systems the flagship project in the area of primary health and childcare.

The Foundation has so far donated π7 million for 18 water systems that benefit 2,810 households in different marginalized communities in Cebu, Davao and Iligan. Most of these water systems are Level 3, which means water is piped directly into the individual households.

In 2009, the Foundation began the construction of a water system for the residents of Barangay Mulao, Liloan. Due for turnover in October 2010, the system will benefit 150 households.

The Foundation is currently identifying more communities where reliable water connections are needed.

Donation of Medical Equipment

In order to improve the medical and dental services provided in certain communities, the Foundation donates a starter set with basic medical and/or dental equipment which poorer

The Foundation has so far donated π7 million

for 18 water systems that benefit 2,810 households in different marginalized

communities in Cebu, Davao and Iligan.

Primary Health and Child Care

PRIMARY HEALTH AND CHILD CARE

A vital area of focus of the Foundation is primary health and child care. Each year, medical equipment and facilities and water systems are donated to host communities nationwide.


The Foundation’s goal is to bring at least 20% of the street

children to get a formal education the

following school year.

communities cannot obtain on their own. In 2009, the Foundation donated assorted dental and medical equipment worth π1 million to seven health centers.

Medical and Dental Missions

Aboitiz Group companies, through the Foundation, implement medical and dental missions aiming to make health services available to their host communities.

AboitizPower subsidiary Hedcor, Inc., Pilmico Animal Nutrition Corp. and Pilmico Foods Corp. regularly conduct medical missions in their areas of operations. In 2009, 10 dental and medical missions were conducted nationwide.

Street Education Classes

The Foundation hopes to eventually see more children learning in classrooms than roaming the streets.

By holding non-formal education sessions under the Street Education Classes program, the Foundation and the Children of Cebu Foundation aim for street children to be motivated to go to school. The Foundation’s goal is to bring at least 20% of these children to get a formal education the following school year.

The Foundation supports 250 street children annually by giving them street education classes. In 2009, these classes were conducted in six urban centers in Metro Cebu. Aside from these non-formal education, the children were also given bags and other educational supplies to use in their classes.

Aside from donating equipment and water systems, the Foundation also counts medical and dental missions and street education classes as part of its programs to promote primary health and child care.

ANNUAL REPORT 2009 17EMPLOYEE-INITIATED CSR PROJECTS AND OTHER INTERVENTIONS

Employees of Aboitiz Group companies initiate CSR projects that complement the Foundation’s program.


More and more team members in the Aboitiz Group embrace CSR as a part of their working experience. Hence, it has become an integral part of the Aboitiz employer branding initiative. Every year, an increasing number of employees volunteer in different community projects.

In 2009, employees of the Aboitiz Group held simultaneous CSR activities nationwide. They participated in the groupwide tree-planting activities, and Brigada Eskwela and Adopt-a-School programs. They also conducted outreach programs and volunteered in disaster relief operations.

Tree planting

The Foundation and Aboitiz Group companies undertake projects that promote environmental awareness and protection. One of these projects is the annual tree planting, where employees plant seedlings of forest and fruit-bearing trees in selected areas.

In 2009, over 1,800 team members groupwide planted 26,350 seedlings in three areas.

Christmas Outreach Activity

To give the Christmas season more meaning by giving instead of receiving, team members treated 2,180 underprivileged kids from all over the country where Aboitiz companies operate to a day of fun, games, food and gifts. The Christian Light Foundation, which has been the Foundation’s partner in all Christmas outreach activities nationwide, donated assorted gifts packed in real shoeboxes.

More than a thousand team members took time out to let the children experience the Christmas spirit.

Team leaders and team members of different Aboitiz Group companies regularly conduct tree planting and outreach activities as part of their programs to promote corporate social responsibility.

Employee-Initiated Projects

EMPLOYEE-INITIATED PROJECTS


Disaster Relief

Never is volunteerism among team members in the Aboitiz Group more evident than during disaster relief operations; they immediately heed calls for help in times when they are needed most.

In 2009, team members across the country banded together to donate and gather relief goods for distribution to victims of typhoons Ondoy and Pepeng, which left a huge part of Luzon inundated and thousands of families homeless.

With funds mobilized from across the Group, through the efforts of Aboitiz family members, Aboitiz Group companies and the Foundation, a total of π15 million in assistance — food items, basic necessities and transport—was provided to the typhoon victims.

Toward the end of the year, residents of Albay province who had to evacuate amid the looming eruption of Mayon Volcano also received similar assistance.

Brigada Eskwela

For two consecutive years now, Aboitiz team members nationwide have been participating in Brigada Eskwela, a program of the Department of Education aimed at helping repair and maintain public schools before the June opening of classes.

In 2009, a total of 462 employees from different Aboitiz Group companies participated in Brigada Eskwela. They repaired broken chairs and desks, repainted classrooms, spruced up gardens, cleaned computers and replaced defective lights, among others.

Adopt-a-School

The Adopt-a-School outreach program implemented in Cebu is an employee-initiated program that provided assistance to Banilad Elementary School and Banilad Night High School through projects meant to uplift teachers’ competencies.

A π1 million allocation was released for eight training modules to assist students and teachers of the two schools to improve their Math, English, Science and vocational skills. Equipment and books were also donated to the school.

When opening of classes nears, Aboitiz team members clean up and refurbish schools in their host communities as part of their outreach activities.

The Foundation team quickly responds to pleas for help from victims of disasters and calamities, giving out relief goods and providing other forms of assistance as needed.


The Foundation also extends corporate donations and other forms of assistance to both government and non-government organizations (NGOs) operating in their respective areas.

For 2009, a total of π13 million in donations was given out.

Support to LGUs

The Foundation recognizes that local government units (LGUs) and government agencies also need assistance to successfully implement different projects.

In 2009, the Foundation gave out π1 million for infrastructure projects, equipment and supplies for various LGUs.

Support to Foundations, Promotion of Arts & Culture

Promoting culture, arts and religion and supporting the cause of NGOs are among the advocacies that the Foundation supports.

The companies released π2 million in financial support to the Sinulog Foundation, Inc., Cebu Arts Foundation, NGOs and religious groups, among others.

Sports-related Donations

Supporting sports and other related activities is something that the Foundation and the companies strongly advocate.

A total of π1 million was donated last year to the Aboitiz Football Cup, Kiddie Chess Tournament and to the Aboitiz Soccer Field.

The Foundation recognizes that local government units

and government agencies also need assistance to successfully implement

different projects.

The Foundation also donates to groups and entities with noteworthy causes.

Corporate Donations and Other Initiatives

CORPORATE DONATIONS AND OTHER INITIATIVES


Environment

The Foundation and Aboitiz Group companies have always been proactive in responding to calls to take a step further in environment conservation efforts. In fact, environment will soon become a major program component of the Aboitiz Foundation. Whatever benefits gained in supporting this advocacy will be beneficial to this generation and beyond.

The succeeding table details the assistance that the Foundation was able to give out in 2009. Table 6 - Corporate Donations (in thousand pesos)

PARTICULARS AMOUNT

Arts & Culture π214

Donations to NGOs, foundations, etc. 2,885

Affiliations/information dissemination 547

Sports-related donations 1,238

Support to LGUs and other agencies 1,081

Disaster relief 4,675

Environment 620

Employee-initiated projects 1,622

TOTAL π12,881

With environment becoming the Foundation’s fourth key area of focus, more activities are conducted yearly to help slow down climate change.

Environment will soon become a major program

component of the Aboitiz Foundation. Whatever

benefits gained in supporting this advocacy

will be beneficial to this generation and beyond.


Aboitiz Group companies partner with organizations for the development of their host communities, like this University of San Jose-Recoletos (USJR) Balamban campus built through an industry-academe partnership between Tsuneishi Heavy Industries (Cebu), Inc.and Cebu Industrial Park Developers, Inc. with USJR.

For the Foundation and Aboitiz Group companies, their host communities are their partners in development. With this mindset, it is imperative for them to take care of the local communities where their business units operate.

Aside from donations and projects implemented in coordination with the Foundation, these companies directly fund social development initiatives that address the needs in their respective areas of operations.

In 2009, the companies donated π337 million to implement these initiatives in their communities. This is in addition to the projects that they coursed through the Foundation.

Noteworthy is the donation of Tsuneishi Heavy Industries (Cebu), Inc., the shipbuilding company of the Aboitiz Group, which donated π270 million or 80% of the total amount for various projects in different barangays in Balamban, Cebu. The amount was spent to construct and rehabilitate infrastructure projects like schools, markets and water systems. Educational materials and other equipment were also donated and financial assistance given to different sectors.

Other Company Initiatives

OTHER COMPANY INITIATIVES


Below is the summary of programs and projects implemented by Aboitiz Group Companies in 2009: (in thousand pesos)

COMPANY PROJECT AMOUNT TOTAL

Group-wide PBSP contributions π1,535 π1,535

HOLDING COMPANY

Aboitiz Equity Ventures, Inc.

Projects on Education Scholarship 1,069 1,069

POWER GROUP

Hedcor Inc. Projects on Education: Equipment Donation ScholarshipProjects on Health concernsProjects on Environmental

concernsAssistance to communities

12943

125

2528 557

Davao Light & Power Corp.

Infrastructure Projects in partnership with LGUs

Projects on Education Scholarship

2,041

938 2,978

Cotabato Light & Power Corp.

Street Lighting ProjectRural ElectrificationEquipment Donations for

Communities

1,037426

14 1,477

Subic Enerzone Corp.

Projects on Environmental Concerns

Disaster Relief OperationsAssistance to Communities

30108

15 154

SN Aboitiz Power, Inc.

Projects on Education: Infrastructure Equipment DonationEnterprise DevelopmentProject on Health ConcernsProjects on Environmental

Concerns Equipment DonationInfrastructure Projects in

partnership with LGUsEquipment Donations for

Communities

4733,2202,7051,698

447200

5,498

4,414 18,653

Luzon Hydro Corp. Projects on Education: Infrastructure Equipment Donation ScholarshipEnterprise DevelopmentProjects on Health ConcernsProjects on Environmental

ConcernsInfrastructure projects in


CommunitiesAssistance to Communities

4,794466432

1,000565

300

4,385

2581,775 13,976

STEAG State Power, Inc.

Projects on Education: Equipment Donation Alternative Learning SystemEnterprise DevelopmentProjects on Health ConcernsAssistance to Communities

580150750600620 2,700

Cebu Private Power Corp.

Projects on Education: Equipment Donation ScholarshipEnterprise DevelopmentProjects on Health ConcernsProjects on Environmental



CommunitiesDisaster Relief OperationsAssistance to Communities

3996

994

8

693

243429 1,028

COMPANY PROJECT AMOUNT TOTAL

East Asia Utilities Corp.

Projects on Education: Equipment DonationProjects on Health ConcernsProjects on Environmental


partnership with LGUsDisaster Relief OperationsAssistance to Communities

152530

20

5865

53 734

Cebu Energy Development Corp.

Projects on Education: Scholarship Educational Support for

StudentsProjects on Health Concerns

445

12015 580

Western Mindanao Power Corp.

Projects on Education: Infrastructure Equipment Donation Scholarship Teacher Training Educational Support for

Students Alternative Learning SystemProjects on Health ConcernsAssistance to Communities

1,65050913480

1024

104142 2,653

Southern Philippines Power Corp.

Projects on Education: Infrastructure Equipment Donation Scholarship Teacher Training Educational Support for

Students Alternative Learning SystemEquipment Donations for

CommunitiesAssistance to Communities

904840

1,00613

2931

5537 2,916

San Fernando Electric Light and Power Company Assistance to communities 402 402

BANKING

Union Bank of the Philippines

Projects on Education: Equipment DonationDisaster Relief OperationsSupport to other foundations

and groups

12,0002,000

950 14,950

OTHERS

Tsuneishi Heavy Industries (Cebu), Inc.

Projects on Education: Infrastructure Equipment DonationEquipment Donation for

CommunitiesDisaster Relief OperationsAssistance to Communities

266,0971,256

2,518512170 270,554

GRAND TOTAL π336,915


Aboitiz Group team members are not one to back down when faced with a challenge as daunting as immediately helping thousands left homeless by the fury of typhoons Pepeng and Ondoy.

FEATURES

Group bands together for Ondoy and Pepeng victims

A team’s quick and efficient response to calls for help is usually tested in the aftermath of a natural calamity.

For the Aboitiz Group team, the test came in the morning of Sept. 26, 2009 when typhoon Ondoy left a major part of Luzon inundated; many cities and towns “sank” as a result of backed up water, swollen rivers and a Laguna de Bay bursting at the seams.

Ondoy’s onslaught claimed hundreds of lives, left hundreds of thousands of people homeless and destroyed millions worth of property.

It was a weekend then but the daunting task that presented itself when evening came signaled that it was time to work.

The Aboitiz Foundation immediately released P1 million in relief goods for distribution to different evacuation centers. The total amount released eventually reached P15 million, thanks to the generosity and concern of companies in the Aboitiz Group as well as Aboitiz family members in the Philippines and abroad.

On the field, the Durian warehouse of 2GO was mobilized as receiving, sorting and releasing point for Aboitiz relief goods. Volunteers from various companies selflessly heeded the call for help and showed up to do the myriad tasks of stacking, unpacking, measuring, packing, and counting in true 2GO fashion. At best, the team was able to release 7,310 relief bags in one day!

The relief bags themselves were noteworthy because they were reusable and recyclable. In line with the Group is concern for the environment and sustainability, the Aboitiz Foundation opted to use bags made of sturdy bonded non-woven material. The general comment was that our bags were coveted for the completeness of the contents.

Barely two days after Ondoy, the relief team delivered a first batch of 629 packed bags of relief goods to the Department of Social Welfare and Development. More than 56,000 bags made their way to the Red Cross, Gawad Kalinga, Ateneo de Manila as well as to various affected local government units and schools in Marikina, Pasig, Cainta, Taguig, Pateros and Laguna.

“I’m so proud of the way we have managed to raise funds so quickly and deployed the first batch of packed goods by Monday afternoon, the first working day after the floods. My thanks to all the benefactors and to all those who volunteered their time and effort,” said AEV Chairman Jon Ramon Aboitiz.

Team members of business units across the country—2GO, AboitizPower, SuperFerry, City Savings Bank, Visayan Electric Co., Davao Light, Hedcor, and SN Aboitiz Power—were eventually tapped when more hands were needed to hasten the acceptance of donations and distribution of relief goods.

“The response has been nothing but overwhelming. It is such an inspiration. Out of a dire situation, the best of our Group has come forth,” said Aboitiz Foundation EVP & Managing Trustee Sonny Carpio.

Indeed, like sticks in a bundle that are unbreakable, the Group has once again proven that no task is daunting enough not to be accomplished if everyone works together as a team.

Features


The Foundation extends financial and other forms of assistance to selected multi-purpose cooperatives nationwide to help these groups become self-sustaining.

Coops empower two upland communities

In 2009, the Aboitiz Foundation granted

a total of 21 loan packages to 17

cooperatives in Metro Cebu to either jumpstart identified

projects or ensure the continuity of existing

ones.

Most multi-purpose cooperatives are born out of the need not only to generate income for its members but also ensure an organization’s growth through the successful implementation of sustainable activities.

It is also for these reasons that cooperatives approach organizations and ask them for assistance, financial or otherwise, in implementing various projects.

In 2009, the Aboitiz Foundation, Inc. granted a total of 21 loan packages to 17 cooperatives in Metro Cebu to either jumpstart identified projects or ensure the continuity of existing ones. These loan packages cost a total of π10 million.

Officials of two of these cooperatives— one based in Cebu City and the other in Balamban town—say they chose to work with the Foundation, confident of the lasting benefits they will gain from the partnership.

For an organization as small as the Pung-ol Sibugay Multi-Purpose Cooperative, the P130,000 it received from the Foundation went a long way. Its 84 members, mostly cutflower and vegetable farmers, were able to either buy fertilizer and pesticides or expand their plots, enabling them to increase their income.

Wedelisa Gabisay, the organization’s president, says they made the right decision to approach the Foundation for assistance.

“We didn’t have to wait long to get a feedback on our loan application. What’s more is that our members who availed of the loan said they earned more than half of their previous earnings,” Gabisay shares.

The much-bigger Barangay Unity Key to Integrated Development (Bukid) Multi-Purpose Cooperative, on the other hand, used the π442,000 loan from the Foundation to buy planting materials and fertilizer, and pay for labor.

Bukid’s members, comprising 152 households, engage in milk and dairy production, vermiculture and abaca production, spread in over 30 hectares of land in Barangay Magsaysay, Balamban in the western seaboard of Cebu.

Bukid president Jose Bebelonio Pepito says that because of the loan, the quality of vegetables and root crops they harvest has now improved.

As for the additional abaca stalks they planted, Pepito says it will take two years for these to grow. But once fully grown, harvesting of abaca fibers can be done every three months.

Both Gabisay and Pepito say that benefits gained by their members in choosing the Foundation as their partner have done more than just increase their yield. The partnership, they share, has given them the opportunity to grow as an organization and help more people help themselves.


Erramon I. AboitizChairman

Board of Trustees

Jon Ramon Aboitiz President

Roberto E. Aboitiz Trustee

Augusto P.I. Carpio IIIManaging Trustee

BOARD OF TRUSTEES


Stephen G. ParadiesTrustee

Roman S. RonquilloTrustee

Sebastian R. LacsonTrustee

Xavier J. AboitizTrustee

Jaime Jose Y. AboitizTrustee


Executive Committee

EXECUTIVE COMMITTEE

Jon Ramon Aboitiz Augusto P.I. Carpio IIIRoman S. Ronquillo Sebastian R. LacsonXavier J. Aboitiz


Alex Lauron

CORPORATE STAFF

Danny Cerence

Not in photo Fred Bayking

Rowena Astillo Carnet Sasuman Jowelle Ann Cruz Geraldine dela SernaElena Carnacer

Corporate Staff


Aboitiz Group CSR InitiativesAs of December 2009 (in thousand pesos)

Projects Undertaken Amount AllocatedABOITIZ FOUNDATION, INC.EDUCATION/SKILLS TRAINING/CULTURE UNRESTRICTED FUNDS Infrastructure Aboitiz Foundation,Inc. Construction of 3-storey,3-classroom School Building of Maguikay NHS π881 AboitizLand,Inc. Repairs for Mabolo e-skwela Center 500 Aboitiz Construction Group-Metaphil Construction of New Classroom for Kindergarten: Arpili Elementary School 808 Pilmico Foods Corporation Supplemental Budget for the Construction of a 2-classroom School Building 300 Construction of 2-classroom building complete w/tables and chairs 1,300 Construction of Dalipuga School Building Project-Additional Fund 350 Cotabato Light and Power Company Refurbishment of 2 classrooms of Sultan Kudarat NHS w/arm chairs 330 Davao Light and Power Company Construction of 3-room School Building in F. Bustamante Mahayag 1,430 Construction of 3-room School Building in Tulalian NHS 1,430 Construction of Library Hub for the 3rd District of Davao City 750 Construction of Science Lab 1,446 Mactan Enerzone Construction of Prep-Elem School Building 455 Visayan Electric Company Contruction of School Building - Langtad Elementary School, Naga City, Cebu 2,148 Classroom Repairs -Jagobiao Elementary School, Mandaue City 788 Hedcor Inc. Construction of One (1) Unit 1 -class room building in Barangay Catalunan Pequeño, Talomo District, Davao City 335 Scholarship/Financial Assistance Aboitiz Foundation,Inc. An Aboitiz Foundation Comprehensive Scholarship Program 3,200 Interventions in Education 500 Pilmico Foods Corporation Regular College Scholarship for Mindanao State University,Iligan Institute 320 Purposive Scholarship for MSU-IIT Iligan City, Central Mindanao University 434 Pilmico Animal Nutrition Corporation Scholarship for Highschool and College Scholarship Program for 2HS and 7 College Students in Capas,Tarlac 146 Cotabato Light and Power Company Financial Assistance - Supporting Valedictorian Students in their Secondary Education In Public HS 60 CLPC Customer’s Dependents Scholarship 150 Davao Light and Power Company Scholarshipfor High School Valedicatorians 495 Scholarship for Customer Dependents 1,208 Financial Assistance for Boys Town 150 Financial Assistance - Indigeneous Subsidy 100 Visayan Electric Company Customer’s Dependents Scholarship 505 Hedcor Inc. Financial Assistance for High School 188 College Scholarship 120 Financial Assistance for Out of School Youth 121 Additional one(1) college scholar for Hedcor Inc., Davao 41 Aboitiz One,Inc. Scholarship - 2 Go Supply Chain 1,075 Aboitiz Jebsen Bulk Transport Corporation Marine Engineering Scholarship Program 670 AJMAN Nursing Scholarship Program 330 Skills Training Aboitiz Construction Group-Metaphil Skills Training - MTII Reimbursement (June-December 2008) 806 Skills Training - MTII Reimbursement (Jan-June 2009) 491 Skills Training - MTIIT Reimbursement (July-December 2009) 643 Davao Light and Power Company DLPC-AFI Skills Development for Physically-Challenged 100 DLPC-AFI Support to the enhancement of Science and Technology Learning of HS Students in Davao City 250 Financial Assistance - Outland Adventure Camp 483 Computerization Aboitiz Foundation,Inc. Donation of 25 Computer Units to Public Schools w/in focus Area 450 Computer Repairs 29 IT Training & Competency Program for Teachers 200 Aboitiz IT Trainors Group 50 Pilmico Foods Corporation Computer Donation - 5 units to Luinab Elementary School 150 Computer Repairs & Refurbishments - Northeast II-A Central School, Severo Sara ES & Luinab ES 150 Computer Inter School Competition 20 Balamban Enerzone Computer Donation - Buanoy NHS 615 Cotabato Light and Power Company 5 sets of computer w/printer to Police Offices situated within the franchise area 125

Davao Light and Power Company Equipment Donation - Computers in Davao City 675 Visayan Electric Company Computer Donation to Talamban Elementary School 311 Hedcor,Inc. Computer Donation 132 Computer Repairs & Maintenance 48 3 units Computer Donation for Catalunan Pequeno NHS in Davao City 81 Aboitiz Energy Solutions Donation of 6 computer sets each for 2 Schools in Agusan del Sur 150 Donation of 6 computer sets each for 2 Schools in Agusan del Norte 150 City Savings Computerization project 166 Employee-Initiated Projects Aboitiz Foundation,Inc. Brigada Eskwela - AEV 56 Pilmico Foods Corporation Brigada Eskwela 50 Pilmico Animal Nutrition Corporation Brigada Eskwela 55 Aboitiz Power Company Book Donation,Banilad NHS 36 Learning about Learning: A Worshop Series for Teachers,Banilad NHS 37 Public Speaking & Presentation Skills Training.Banilad NHS 64 SciMathics Club in Action 90 Project BART (Becoming A Responsible Teenager) 96 A Future for Our Teachers: A Cooperative Livelihood Program for Banilad ES PTA 107 Project LEAD: A Leadership Skills and Organization Management Development Program 123 Livelihood & Entrepreneurial Skills Project for NHS Students 334 Brigada Eskwela 240 Visayan Electric Company Educational Upliftment -Lataban Elementary School 554 Equipment and Book Donations Aboitiz Foundation,Inc. Upgrading of Electrical System in Banilad ES 370 AboitizLand,Inc. Library Kit Donation for Don Calixto C. Yongco Tawason ES 100 Aboitiz Construction Group-Metaphil Donation of Training Materials for Subangdaku Vocational HS Test Plates 87 Pilmico Foods Corporation Acquisition of Science Lab Apparatus 200 Pilmico Animal Nutrition Corporation Library Kit Donation in 2 Public Elementary School in Capas,Tarlac 170 Library Kit Donation in High School in Capas, Tarlac 100 Library Refubishment in 1 Public Elementary School in Capas Tarlac 130 Visayan Electric Company Upgrading of Electrical System in Florencio Urot MHS 423 Aboitiz One,Inc. Adopt A School - Sustaining Activities 300 Support to Teachers Pilmico Foods Corporation Financial Assistance to 2 Kindergarten teachers and 1 Nursery Teacher of Severo Sara Memorial 143 Financial Assistance to 3 Computer Teachers 234 Hedcor,Inc. Teacher Training for Elementary School Teachers 75 Honorarium for Computer Teachers 100 Others Pilmico Foods Corporation Financial Assistance to Day Care Center of Tag-ibo,Iligan City 100 Financial Assistance to Refresher course/Summer Classes for Northeast II - A Central School and Sara Memorial School 70 Educational Enhancement Program 500 Pilmico Animal Nutrition Corporation Brainshow 2009 130 Brainshow 2009 - Additional Funds for Public ES in Capas,Tarlac 70 Aboitiz Power Company Adopt-a-school Launching 65 Balamban Enerzone Adopt A School - Career Orientation & Environmental Awareness 25Sub-Total - Unrestricted 34,573

RESTRICTED FUNDS AOA Educational funds Scholarship Program 2,502 STEC Scholarship 2009 281 Iker Aboitiz Fund Scholarship Program 72 SGP Fund Scholarship Program 32 Luzon Hydro Corporation Scholarship Program 428 Pilikao Funds Elementary School Building Repair in Luz Banzon and Solano 418 PKL High School Scholarship Program 140Sub-Total - Restricted 3,873

Community Relation Projects


ENTERPRISE DEVELOPMENT UNRESTRICTED FUNDS Grant Aboitiz Foundation,Inc. Capability Building Training Program for Exisitng Coop Partners 229 AboitizLand,Inc. Livelihood Training on Culinary Arts 30 Pilmico Animal Nutrition Corporation Additional Irrigation Equipment for the Neighboring Farmers of FFI Farms for the Farmers from Sitio Gullman,Brgy.Sto. Rosario (Nucleus Farm)& Sitio Kawili-wili,Brgy. Cut-cut,Capas,tarlac(Farm3) 117 Microfinance Aboitiz Foundation,Inc. South Cebu Hog Raisers 900 South Cebu Hog Raisers 1,800 Reunited Shoemakers Coop 500 Mactan Island Coop 223 KABAMEKA 400 KABAMEKA 100 Cubacub Level 3 Supply Expansion Project(ACCESS,Inc.) 500 Uling MPC Swine Fattening Project 509 Cambinocot MPC Livelihood 765 Purok Sili Livelihood Development Project 100 Pung-ol Sibugay Cutflower and Vegetable Production Project 130 LARBA Swine Fattening Project 191 Panas Farmer’s Association Swine Fattening Project 191 Livelihood Enhancement and Support Services for Brgy. Luz Homeowners 410 Pangan-an Island Cooperative for Community Development Swine Fattening Projects 341 Mandaue Subcon and Development MPC 279 Sta. Rosa Hugpong Kauswagan MPC 186 St. Vincent Neighborhood MPC Meat Processing 1,148 St. Vincent Neighborhood MPC Meat Processing 500 Cobcawa MPC Swet Corn Production 160 Bayabas United Farmers Association (BUFA) Farm Productivity Project 127Sub-Total - Unrestricted 9,836 PRIMARY HEALTH AND CHILD CARE UNRESTRICTED FUNDS Aboitiz Foundation,Inc. Street Education Class 2009 211 Water System - Mulao Liloan Water System Project 495 Pilmico Foods Corporation Medical Mission at Brgy.,Dalipuga,Donald Moraza Park MPC Building 200 Pilmico Animal Nutrition Corporation Astig Ka Boy!(Free Circumcision) to all Residents of Brgy. Sto. Rosario,Capas,Tarlac 39 Ngiting Kumukutitap (Dental Mission) to the Residents of Brgy.,Aranguren,Capas,Tarlac 35 Isang Malinao na Pasko (Free Eye Check-up & Eyeglasses) to 10 students per school from selected public Elementary Schools in Capas,Tarlac 36 Subic Enerzone Adopt An Ambulance 100 Mactan Enerzone Water System - Repair of Water System in Agus Elementary School 74 Hedcor,Inc. Medical Missions 336 Donation of GI Pipes for the Rehabilitation of Amsalsal Water System 27 Installation of Ceilling Wall for Banengbeng Day Care Center 28 Construction of One (1) Unit 1-room conventional comfort room for Brgy., Mintal Health Center,Brgy.,Mintal Tugbok District,Davao City 52Sub-Total - Unrestricted 1,633

RESTRICTED FUNDS Construction of Proposed Feeding Center,Mabini 4,284 Rogationist Seminary 16 Justice Peace Integrity of Creation Integrated Dev. Center 600 A. O Aboitiz Donations 324 Cebu Hope Center 1,020 Don Bosco Boys Home 600 Philippine National Red Cross 60 Sisters of the Sacred Heart of Jesus and Mary 360 Missionaries of Charity c/o A.O.Aboitiz 300 Missionaries of Charity 24 Good Shepherd c/o Luis Ugarte Fund 17 Bishop Juan De Dios Pueblos 2,000 We Do Recover, Inc. 10 Medical and Dental Outreach Program 160 Iron for Banilad Elementary School 42Sub-Total - Restricted 9,817AFFILIATION AND INFORMATION DISSEMINATIONUNRESTRICTED FUNDS Aboitiz Foundation Philippine Council for NGO Certification 2 Philippine Council for NGO Certification - sponsorship 50 League of Corporate Foundations 25 League of Corporate Foundations - CSR Expo 2009 100 League of Corporate Foundations - CSR Expo 2009 56 Association of Foundations 80 Annual Report 2008 260 Ramon Aboitiz Foundation,Inc (ALEX) 20 Coalition for Better Education 16Sub-Total - Unrestricted 609

CORPORATE AND OTHER DONATION UNRESTRICTED FUNDS Support to LGUs Aboitiz Foundation,Inc. Mabolo Police Station Signage Repair 28 2 units 20 ft. Container Vans for the Mactan Bridge & Marcelo B. Fernan Bridge 120 Pilmico Foods Corporation Assistance to Dalipuga Fire Department 100 Assistance to Canaway Garbage Dump Site 100 Donation to Hospital Equipment 200 Community Peace and Order in Dalipuga,Iligan City 180 Calamity Fund 100 Hedcor,Inc. Computer Donation-2 Barangays 50 Subic Enerzone Construction of Police Guard 331 Disaster Relief Operations Aboitiz Foundation,Inc. Disaster Relief - Typhoon Ondoy 6,382 Fabrication of Aboitiz Foundation Ecobags 200 Umapad Mandaue City Relief Goods for 693 Families (Fire Victims) 150 Support to other NGOs and Groups Aboitiz Foundation,Inc. Sinulog Foundation 2009 100 Sinulog Foundation 2010 100 PBSP - Olango Challenge:Swim for A Cause 50 Boy Scout of the Phils. 20 Association of Foundation 50 Cebu Arts Foundation 14 Junior Achievement of the Philippines Foundation 30 Annual Benefit Lunch - Children’s Hour Phils. 15 First Gentleman Foundation,Inc. 1,000 Cebu Metropolitan Cathedral 500 Pilmico Foods Corporation Gawad Kalinga in Kiwalan,Iligan City 150 Church Repairs of San Roque Church in Tag-ibo,Dalipuga,Iligan City 100 Environment Aboitiz Foundation,Inc. Festival of Trees 100 Aboitiz Group Reforestation Site Maintenance Project 30 Davao Light and Power Company Punta Dumalag Regreening Project 225 Hedcor,Inc. Orientation on Saving the Rivers Through Proper Waste Disposal 59 Cleanest & Greenest ES 45 Employee - Initiated projects Aboitiz Foundation,Inc. Cebu Christmas Outreach 2009 50 Makati Christmas Outreach 2009 40 AboitizLand,Inc. Aboitiz Groupwide Tree Planting 42 Chistmas Gift Giving Activities in Talisay City and Gabi,Cordova 200 Pilmico Foods Corporation Gift Giving Activities 150 Mangrove Reforestation 35 Tree Planting Activity 50 Pilmico Animal Nutrition Corporation Tree Planting 2009 in Sitio Kawili-wili,Brgy. Cut-Cut II Tarlac 40 Aboitiz Power Company Aboitiz Groupwide Tree Planting - Metro Manila 467 Aboitiz Groupwide Tree Planting - Metro Cebu 498 Sports-related Projects Aboitiz Foundation,Inc. Aboitiz Football Cup - Cebu Football 2009 690 Amortization for Aboitiz Sports Field 500 AboitizLand,Inc. Kiddie Chess Tournament 48 Other Donations Aboitiz Foundation,Inc. Cebu Media Party 30 Cotabato Light and Power Company Contingency Fund to Support other Possible Projects 50 Davao Light and Power Company Discretionary Fund 1,000Sub-Total - Unrestricted 14,419RESTRICTED FUNDS First Gentleman Foundation, Inc. 4,000 Christian Light Foundation,Inc. 150 Disasters Relief-Typhoon Ondoy-SGP 50Sub-Total - Restricted 4,200

TOTALS UNRESTRICTED FUNDS 61,070 RESTRICTED FUNDS 17,890 Sub-Total - Aboitiz Foundation 78,960 OTHER COMPANY INITIATIVES (see table on p.22) 336,915TOTAL CSR FOR THE ABOITIZ GROUP 415,875


The Year 2009 in Figures and Graphs

Aboitiz Foundation, Inc.

TOTAL PER PROGRAM COMPONENT

UNRESTRICTED PER PROGRAM COMPONENT RESTRICTED PER PROGRAM COMPONENT

Education49%

Corporate and Other Donations

23%

Affiliation and Info. dissemination

1%

Primary Healthand Child Care

15%

EnterpriseDevelopmet

12%


23%


1%


3%


16%


23%


0%


5%


0%

Education57%

Education22%

PER PROGRAM COMPONENT

PER PROGRAM COMPONENT

EducationEnterprise DevelopmentPrimary Health and Child

careAffiliation and Info

DisseminationCorporate and Other

DonationsTOTAL

π38,4469,836

11,450

609

18,619π78,960

TOTAL

CebuIliganCotabatoDavaoTarlacBenguetManilaOthersTOTAL

PER LOCATION

PER LOCATION

π43,9505,686

71510,2511,0681,757

14,0781,455

π78,960

TOTAL

2009 Figures and Graphs

Aboitiz Group CSR Initiatives (including Aboitiz Foundation)

CEBUDAVAOCOTABATO SUBIC ISABELA BENGUET MISAMISZAMBOANGASARANGANI PAMPANGA MANILA ILIGAN TARLACNATIONWIDETOTAL

π318,01514,886

2,252585

18,65315,7332,7002,6532,916

40214,1535,8861,068

15,974π415,875

TOTALEDUCATIONENTERPRISE DEVELOPMETPRIMARY HEALTH AND CHILD CAREAFFILIATION AND INFO.

DISSEMINATIONCORPORATE AND OTHER DONATIONSTOTAL

π336,06514,30014,681

60950,220

π415,875

TOTAL

Cebu76%

Education81

Davao4%

Isabela4%

Benguet4%

Manila3%

Cotabato1%

Misamis1%

Zamboanga1%

Sarangani1%

Iligan1% Subic

0% Pampanga0%

Tarlac0%

Nationwide4%

CebuDavaoCotabato Subic Isabela Benguet MisamisZamboanga Sarangani Pampanga Manila Iligan TarlacNationwide

Total

318,015,35114,886,058

2,251,573585,082

18,653,25915,732,900

2,700,0152,652,6202,915,764

401,57114,153,0005,886,0001,068,000

15,974,000

415,875,193

Total

EducationEnterprise DevelopmetPrimary Health and Child CareAffiliation and Info. disseminationCorporate and Other Donations

336,065,51414,300,25014,680,747

609,00050,219,682

415,875,193

Total


12%Affiliation and

Info. dissemination0%


4%


3%Cebu76%

Education81

Davao4%

Isabela4%

Benguet4%

Manila3%

Cotabato1%

Misamis1%

Zamboanga1%

Sarangani1%

Iligan1% Subic

0% Pampanga0%

Tarlac0%

Nationwide4%

CebuDavaoCotabato Subic Isabela Benguet MisamisZamboanga Sarangani Pampanga Manila Iligan TarlacNationwide

Total

318,015,35114,886,058

2,251,573585,082

18,653,25915,732,900

2,700,0152,652,6202,915,764

401,57114,153,0005,886,0001,068,000

15,974,000

415,875,193

Total

EducationEnterprise DevelopmetPrimary Health and Child CareAffiliation and Info. disseminationCorporate and Other Donations

336,065,51414,300,25014,680,747

609,00050,219,682

415,875,193

Total


12%Affiliation and

Info. dissemination0%


4%


3%


Independent Auditors’ Report

EXHIBIT “A”ABOITIZ FOUNDATION, INC.(Formerly, Aboitiz Group Foundation, Inc.) (A Non-Stock, Non-Profit Organization) STATEMENTS OF FINANCIAL POSITION December 31, 2009 and 2008(Amounts Expressed in Whole Philippine Pesos)

Note 2009 2008

ASSETS

CURRENT ASSETS CashReceivables

34

π2,151,538122,191,395

π1,299,75668,805,045

Total Current Assets 124,342,933 70,104,801

NON-CURRENT ASSETS Receivables - non current

portion Held to maturity investments Available for sale investments Office furniture and equipment Other assets Trust funds

4

56789

-

36,000,000 41,224,645

1,150,717 570,930

44,821,020

552,000

-23,204,422

414,384 1,584,290

28,901,391

Total Non-Current Assets 123,767,312 54,656,487

LIABILITIES Accounts payableDeferred credits

1011

π5,014,00544,821,020

π56,053 28,901,391

Total LiabilitiesEQUITY (Exhibit “C”)

49,835,025 198,275,220

28,957,444 95,803,844

TOTAL LIABILITIES AND FUND BALANCE π248,110,245 π124,761,288

(See accompanying notes to financial statements)

EXHIBIT “B”ABOITIZ FOUNDATION, INC.(Formerly, Aboitiz Group Foundation, Inc.) (A Non-Stock, Non-Profit Organization) STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, 2009 and 2008 (Amounts Expressed in Whole Philippine Pesos)

Note 2009 2008

SUPPORT AND REVENUESDonations received Donated services Interest

incomeDividend income Miscellaneous

income

12

6

π166,385,849 165,000

2,681,4291,141,242

104,126

π66,930,098 265,000

2,791,084 2,091,764

6,000

170,477,646 72,083,946

EXPENSESDonations made Salaries and honoraria Interdepartmental services Depreciation Training and seminars RentProfessional fees Production of annual report Supplies and materials Project expenses Communication Medical and hospitalization Fuel and Lubricants Light and water Interest expense Repairs and maintenance Taxes and licenses Retirement benefits Miscellaneous

1314

76,345,447 4,010,409 1,558,294

384,596 289,984 270,297 244,930232,000 218,475214,289 175,122

161,669 27,082

103,174 101,165 49,611 14,218

-1,525,731

64,174,249 3,425,989 1,246,098

300,787 269,958 280,002

25,788 485,200 125,535 257,339 128,839 287,061 115,694 112,535

2,317 101,665 20,006 281,286

1,463,815

86,026,493 73,104,163

EXCESS OF REVENUES OVER EXPENSES (EXPENSES OVER REVENUES)

OTHER COMPREHENSIVE INCOME (LOSS) Change in fair value of available for sale securities

84,451,153

18,020,223

(1,020,217)

(8,437,669)

TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR

P102,471,376 (P9,457,886)


The Members and the Board of TrusteesABOITIZ FOUNDATION, INC.(Formerly, Aboitiz Group Foundation, Inc.)(A Non-Stock, Non-Profit Organization)Aboitiz Corporate CenterGov. Manuel A. Cuenco AvenueCebu City

We have audited the accompanying financial statements of ABOITIZ FOUNDATION, INC. (Formerly, Aboitiz Group Foundation, Inc.), which comprise the statements of financial position as at December 31, 2009 and 2008, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the 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 financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of ABOITIZ FOUNDATION, INC. (Formerly, Aboitiz Group Foundation, Inc.) as of December 31, 2009 and 2008, and of its financial performance and its cash flows for the years then ended in accordance with Philippine Financial Reporting Standards.

LUIS CAÑETE & COMPANY

LUIS A. CAÑETEPartnerCPA Certificate No. 6507BOA/PRC Reg. No. 0127 (Until December 31, 2010)SEC Accreditation No. 00105-AR-1 (In Process of Renewal)TIN 114-622-040, BIR AN 13-004894-1-2009PTR No. 9665242 – January 04, 2010, Cebu City

___________Cebu City

INDEPENDENT AUDITOR’S REPORT



EXHIBIT “C”ABOITIZ FOUNDATION, INC.(Formerly, Aboitiz Group Foundation, Inc.) (A Non-Stock, Non-Profit Organization) STATEMENTS OF CHANGES IN EQUITY For the Years Ended December 31, 2009 and 2008(Amounts Expressed in Whole Philippine Pesos)

Fund Balance Unrealized Gain (loss) on

Available For Sale Investment (Note 6)

Total Equity

Balance at January 01, 2008 π95,567,497 π8,199,108 π103,766,605

Excess of expenses over revenues Other comprehesive loss

(1,020,217) -

- (8,437,669)

(1,020,217) (8,437,669)

Total comprehensive loss for the year (1,020,217) (8,437,669) (9,457,886)

Adjustments 1,495,125 - 1,495,125

Balance at December 31, 2008 P96,042,405 (P238,561) P95,803,844

Balance at January 01, 2009 π96,042,405 (π238,561) π95,803,844

Excess of revenues over expenses Other comprehensive incom

84,451,153 -

-18,020,223

84,451,153 18,020,223

Total comprehensive loss for the year 84,451,153 18,020,223 102,471,376

Balance at December 31, 2009 π180,493,558 π17,781,662 π198,275,220


EXHIBIT “D”ABOITIZ FOUNDATION, INC.(Formerly, Aboitiz Group Foundation, Inc.) (A Non-Stock, Non-Profit Organization) STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2009 and 2008 (Amounts Expressed in Whole Philippine Pesos)

2009 2008

CASH FLOWS FROM OPERATING ACTIVITIES Excess of revenues over expenses (expenses over revenues) Adjustments for

Depreciation Interest income Dividend income Retirement benefits expense (unrealized pension income) MCIT written-off

π84,451,153

384,596 (2,681,429) (1,141,242)

(104,126)68,667

(π1,020,217)

300,787 (2,791,084) (2,091,764)

281,286 48,178

Operating cash flow before working fund changes Decrease (increase) in:

Accounts receivable Loans receivable Other assets

Increase in accounts payable

80,977,619

(65,779,111) 12,944,761

1,385,799 4,957,952

(5,272,814)

1,011,568 1,996,775

(2,325) 17,013

Cash provided by (used in) operations Contribution to retirement fund Interest received Income tax paid

34,487,020 (25,364)

2,441,718 (71,905)

(2,249,783) (220,288)1,407,609

(61,344)

Net cash provided by (used in) operating activities 36,831,469 (1,123,806)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of asset Acquisition of held to maturity investments Capital expendituresCash dividends received

-(36,000,000)

(1,120,929)1,141,242

62,760 -

(262,182) 2,091,764

Net cash provided by investing activities (35,979,687) 1,892,342

CASH FLOWS FROM FINANCING ACTIVITIES - -

NET INCREASE IN CASH

CASH BALANCE AT BEGINNING OF YEAR

851,782

1,299,756

768,536

531,220

CASH BALANCE AT END OF YEAR π2,151,538 π1,299,756


ABOITIZ FOUNDATION, INC.(Formerly, Aboitiz Group Foundation, Inc.)(A Non-Stock, Non-Profit Organization)STATEMENTS OF FINANCIAL POSITIONDecember 31, 2009 and 2008(Amounts Expressed in Whole Philippine Pesos)

1. CORPORATE INFORMATION

The Aboitiz Foundation, Inc., (the “Foundation”) is a non-stock, non-profit foundation organized under Philippine laws in 1978 with corporate name ACO Foundation, Inc. Its articles of incorporation was amended changing its name to Aboitiz Group Foundation, Inc. and on May 7, 2008 to Aboitiz Foundation, Inc. The office of the Foundation is located at the Aboitiz Corporate Center, Gov. Manuel A. Cuenco Avenue, Cebu City. The Foundation is primarily a socio-economic assistance body; as such it operates exclusively for charitable, social welfare, religious, scientific, cultural, non-formal educational, and youth and sports development purposes. The financial statements of the Foundation as of and for the year ended December 31, 2009 (including the comparatives for the year ended December 31, 2008) were authorized for issue by the Board of Trustees on March 10, 2010.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND

SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

Basis of Preparation. The financial statements of the Foundation have been prepared under historical cost basis modified by the fair value measurement of available for sale investments and are presented in whole Philippine pesos. Statement of Compliance. The financial statements have been prepared in accordance with the Philippine Financial Reporting Standards (PFRS). Accounting Changes. The Foundation has adopted revised PFRS, amendments to and improvements to PFRS, and Philippine interpretations as follows: • Revised standards and amendments PFRS which have no

effect in recorded amounts but have affected presentation and disclosure of financial statements:

PAS 1, “Presentation of Financial Statements” (as revised in

2007) introduces terminology changes (including revised titles for the financial statements) and changes in the format and content of the financial statements. It introduces a new statement of comprehensive income that combines all items of income and expenses recognized in the profit or loss together with ‘other comprehensive income’. Entities may choose to present all items in one statement, or to present two linked statements, a separate statement of income and a statement of comprehensive income. In addition, it requires the presentation of a statement of financial position as at the beginning of the earliest comparative period when an entity restates its financial statements or retrospectively applies a new accounting policy.

The Foundation has opted to present all items of income

and expenses recognized in a period in a single statement of comprehensive income. Among the other changes are the



replacement of balance sheet with statement of financial position and cash flow statement with statement of cash flows.

Amendments to PFRS 7, Financial Instruments Disclosures has expanded the disclosures required in respect of fair value measurements and liquidity risk. It requires, for each class of financial instruments measured at fair value, to be disclosed by the source of the inputs in determining fair value using a three level hierarchy. Amendments to the minimum liquidity risk disclosures include the recording of issued financial guarantee contracts in the contractual maturity analysis based on the maximum amount guaranteed and allocated to the earliest date they can be drawn down irrespective of the likelihood that the guarantees will be drawn or the amount expected to be paid and disclosure of a maturity analysis of financial assets that an entity holds for managing liquidity risk. Additional disclosure on maturity analysis of financial asset is included in Note 18.

• Amendments and improvements to PFRS and Philippine

interpretations with no effect in the financial statements but may

affect future transactions of the Foundation:

• PFRS 2, Share–based Payment–Vesting Condition and Cancellations (Amendment)

• Philippine Interpretation IFRIC 9, Reassessment of Embedded Derivatives, and PAS 39, Financial instruments: Recognition Measurement – Embedded Derivatives (Amendment)

• PAS 23, Borrowing Costs – Revised

Improvements to PFRS

• PAS 1, Presentation of Financial Statements.• PAS 16, Property, Plant and Equipment.• PAS 19, Employee Benefits.• PAS 23, Borrowing Costs.• PAS 36, Impairment of Assets.• PAS 39, Financial Instruments: Recognition and

Measurement.

Future Accounting Changes. The following Philippine interpretations and improvements to the standards which have been issued but are not yet effective but may affect future transactions of the Foundation are as follows: Effective 2010. Philippine Interpretation IFRIC 17, Distribution on Non-cash Assets to Owners (effective for periods beginning on or after July 1, 2009) provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash to shareholders either as a distribution of reserves or as dividends. It requires an entity to recognize a liability for the distribution when it is no longer at the discretion of the entity (i.e., when shareholder approval is obtained, if required). The liability is initially recognized at the fair value of the assets to be distributed and is re-measured at the end of each reporting period and immediately before settlement. At settlement date, the difference between the carrying amount of the assets to be distributed and the liability is recognized in profit or loss as a separate item. Improvements to PFRS (issued 2009) (effective for periods on or after January 1, 2010, unless stated otherwise)

PAS 7, Statement of Cash Flows – Classification of expenditures on unrecognized assets• Only expenditure that results in a recognized asset can be

classified as a cash flow from investing activities. PAS 17, Leases – Classification of land and buildings• The specific guidance on classifying land as a lease has been

removed so that only the general guidance remains. PAS 39, Financial Instruments: Recognition and Measurement Assessment of loan prepayment penalties as embedded derivatives• A prepayment option is considered closely related to the

host contract when the exercise price reimburses the lender up to the approximate present value of lost interest for the remaining term of the host contract

Effective 2013. PFRS 7, Financial Instruments, specifies how an entity should classify and measure financial assets, including some hybrid contracts. This standard requires all financial assets to be: (a) classified on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset; (b) initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, particular transaction costs; and (c) subsequently measured at amortized cost or fair value. The requirements of PFRS 7 improve and simplify the approach for classification and measurement of financial assets compared with the requirements of PAS 39. PFRS 7 applies a consistent approach to classifying financial assets and replaces the numerous categories of financial assets in PAS 39, each of which had its own classification criteria. They also result in one impairment method, replacing the numerous impairment. The Foundation has yet to assess the impact of the standard on its financial statements. Summary of Significant Accounting Principles a. 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 that are subject to an insignificant risk of change in value.

b. Financial assets and financial liabilities.

Initial Recognition of Financial Assets and Liabilities. The Foundation recognizes a financial asset or a financial liability in the statement of financial position when the Foundation becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are recognized initially at cost which is the fair value at inception. Transaction costs, if any, are included in the initial measurement of all financial assets and liabilities, except for financial instruments measured at fair value through profit or loss (FVPL). Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument or a component that is a financial liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are



cost or amortized cost in the consolidated statement of financial positions. Amortization is determined by using the effective interest rate method. Assets under this category are classified as current assets if maturity is within twelve months of the statement of financial position date and noncurrent assets if maturity is more than a year. Loans and receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are not entered into with the intention to sell immediately or in the near term and are not classified as held for trading, designated as AFS investments or financial assets at FVPL. Loans and receivables are measured at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the effective interest rate. The amortization is included in interest income in the statement of comprehensive income. Included in this category are the Foundation’s cash, accounts receivables, loans receivables and other receivables. Available for sale (AFS) financial assets. AFS investments are non-derivative financial assets that are either designated as AFS or not classified in any of the other categories. AFS investments are measured at fair value with gains or losses being recognized as a separate component of stockholders’ equity, until the investments are derecognized or until the investments are determined to be impaired at which time, the accumulated gains or losses previously reported in stockholders’ equity is included in profit or loss. Dividends earned on AFS financial assets are recognized as dividends-equity investments in profit or loss when the right to receive payment is established. These financial assets are classified as noncurrent assets unless there is an intention to dispose such assets within twelve months from the statement of financial position date. Included in this category are the Foundation’s investments in shares of stocks amounting to π41,224,645 and π23,204,422 as of December 31, 2009 and 2008, respectively. Financial liabilities measured at amortized cost. These are the financial liabilities which are not designated at FVPL. Financial liabilities not designated as FVPL are measured at amortized cost using the effective interest rate method. Amortized cost is calculated by taking into account any discount or premium on the issue and fees that are an integral part of the effective interest rate. The amortization is included in interest expense in the statement of comprehensive income. Included in this category is the Foundation’s accounts payable. 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 similar financial assets) is derecognized where

charged directly to equity net of any related income tax benefits. Financial instruments are offset when there is a legally enforceable right to offset and intention to settle either on a net basis or to realize the asset and settle the liability simultaneously. Investments in unquoted equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost.

All regular way purchases and sales of financial assets are recognized on the trade date, which is the date that the Foundation commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace. Financial assets and financial liabilities are further classified into the following categories: Financial asset or financial liability at FVPL, loans and receivables, held-to-maturity investments (HTM), available for sale (AFS) financial assets and other financial liabilities. The Foundation determines the classification at initial recognition and re-evaluates this designation at every reporting date, where appropriate. Categories of Financial Assets and Financial Liabilities. Financial asset or financial liability at FVPL. Financial assets at FVPL include financial assets classified as held for trading and financial assets designated upon initial recognition as at FVPL. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term or upon initial recognition if it is designated by management as FVPL. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated and considered as effective hedging instruments. Gains or losses on financial assets held for trading are recognized in profit or loss. Where a contract contains one or more embedded derivatives, the entire hybrid contract may be designated as financial asset as at FVPL, except where the embedded derivative does not significantly modify the cash flows or it is clear that separation of the embedded derivative is prohibited. Financial assets may be designated at initial recognition at FVPL if the following criteria are met: (i) the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or recognizing gains or losses on them on a different basis; (ii) the assets are part of a group of financial assets which are managed and their performance evaluated on a fair value basis, in accordance with a documented risk managing strategy; or (iii) the financial asset contains an embedded derivative that would need to be separately recorded. The Foundation has no financial assets and financial liabilities at FVPL as of December 31, 2009 and 2008. Held to maturity (HTM) investments. HTM investments are quoted non-derivative financial assets with fixed or determinable payments and fixed maturities wherein the Foundation’s has the positive intention and ability to hold to maturity. HTM assets are carried at



• the rights to receive cash flows from the asset have expired;

• the Foundation 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 Foundation 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 substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Foundation has transferred its rights to receive cash flows from an asset 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 Foundation’s continuing involvement in the asset. Financial liabilities. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. 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, and the difference in the respective carrying amounts is recognized in profit or loss. Impairment of financial assets. The Foundation assesses at each statement of financial position date whether there is objective evidence that a financial asset maybe impaired. A financial asset is deemed to be impaired 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 and that loss event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated. Financial assets at amortized cost. For loans and receivables, the Foundation provides an allowance for impairment and credit losses when there is objective evidence that the Foundation will not be able to collect all amounts due according to the original contractual terms of the loan and when probable losses are present in the components of the loan portfolio at the statement of financial position date. Provision for specifically identified loans is the difference between the carrying amount and the recoverable amount, being the present value of expected cash flows, including amounts recoverable from guarantees and collateral, discounted at the original effective interest rate of the loans. Provision for probable losses present in components of the loan portfolio is estimated based on historical patterns of losses in each component, the credit ratings allocated to the borrowers and reflecting the current economic climate in which the borrowers operate. The allowance for impairment and credit losses is established through a provision for impairment and credit losses in the statement of comprehensive income. Loans are written off against the allowance for impairment and credit losses when management believes that the collection of the principal is

unlikely; subsequent recoveries are recognized in profit or loss. If the allowance for loan losses subsequently decreases due to an event occurring after a write down, the release of the provision is recognized in profit or loss. For HTM investments, the Foundation assesses individually whether there is objective evidence of impairment. If there is objective evidence that an impairment loss has been incurred, the amount of loss is measured as the difference between the assets carrying value and the present value of estimated future cash flows. The carrying amount is reduced through an allowance account and the amount of loss is charged to provision for impairment and credit losses in the statement of comprehensive income. Interest income continues to be recognized based on the original effective interest rate of the asset. If, in a subsequent year, the amount of the estimated impairment loss decreases because of an event occurring after the impairment was recognized, any amounts previously charged to provision for impairment and credit losses in profit or loss and the allowance are reduced. The HTM investments and the related allowance account are written off when there is no realistic prospect of future recovery and the collateral has been realized. Financial assets carried at cost. If there is objective evidence that an impairment loss has been incurred on unquoted equity instrument that is not carried fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such unquoted equity instrument, the amount of loss which is measured as the difference between the asset’s carrying value and the present value of the estimated future cash flows discounted at the current market rate of return of a similar financial asset is charged to provision for impairment and credit losses in the statement of comprehensive income. Such impairment loss shall not be reversed. AFS financial assets. If there is objective evidence that an AFS financial asset is impaired, the Foundation removes from equity, the net unrealized loss on AFS financial assets and transfers to profit or loss, the difference between the acquisition cost (net of any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss. In the case of equity investments classified as AFS, impairment losses are not reversed through profit or loss. Increases in fair value are recognized directly in equity. In the case of debt instruments, if subsequently the fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through profit or loss.

c. Property and equipment.

Property and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses.

Cost of property and equipment comprises its net purchase price and directly attributable costs of bringing the asset to working condition for its intended use.



Subsequent expenditures related to property and equipment for maintenance or repairs are expensed. Improvements are capitalized and depreciated over expected useful life. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Annual depreciation rates are as follows:

Annual Rates(%)

Computer equipmentTransportation equipmentFurniture and fixturesLeasehold improvements

33.33%33.33%33.33%33.33%

The useful lives of the assets and depreciation method used are reviewed periodically for any significant change in utility of the assets and in the expected pattern of economic benefits to ensure that current and future depreciation charges are adjusted accordingly. Gain or loss on disposal or retirement of office furniture and equipment are generally reflected in profit or loss. At each statement of financial position date, office furniture and equipment are assessed for any indication of impairment in value based on internal and external sources. If any indication exists, recoverable amount of the asset is estimated and an impairment loss is recognized in profit or loss.

d. Deferred credits.

Donations/grants restricted by the donor for specific purpose are considered earned and reported as donation only when expenditures are incurred by the Foundation in accordance with the conditions set forth by the donor. Amounts not yet expended are reported as deferred donation/grant.

e. Revenue recognition.

• Donations are recognized as received. • Interest is recognized as income using the effective interest

method. • Dividends are recognized as income when the right to

receive payment is established. • Other income is recognized as earned.

f. Leases.

Operating lease payments are recognized as expense on a straight line basis over the lease term.

g. Retirement benefits.

Retirement benefits are actuarially determined using the projected unit credit cost method which reflects the services rendered by employees up to valuation date and incorporates assumptions concerning employees’ projected salaries. Retirement costs include current service cost plus amortization of past service cost, experience adjustments and changes in actuarial assumptions. Actuarial gains or losses are recognized in profit or loss if the cumulative actuarial gains and losses exceeded the higher of 10% of the defined benefit obligation or 10% of the fair value of the plan assets at the end of the previous reporting period, over the future average working lives of the employees.

Significant Accounting Estimates and Assumptions. In the process of applying the accounting policies of the Foundation, management has made the following judgments apart from those involving estimates, which have the most significant effect on the amounts recognized in the financial statements:

Held to maturity (HTM) investments. For HTM investments, the Foundation evaluates its intention and ability to hold such investments to maturity. If the Foundation fails to keep these investments to maturity other than in certain specific circumstances like selling an insignificant amount close to maturity, it will be required to reclassify the entire portfolio as AFS investments. As such, the investments would be measured at fair value and not at amortized cost.

HTM investments amounted to π36,000,000 as of December 31, 2009. Allowance for doubtful accounts. The Foundation maintains an allowance for doubtful accounts on receivables at a level adequate to provide for potential uncollectible accounts. Management determines the level of this allowance through identification of specific accounts that are to be provided with an allowance based on an evaluation of collection and credit experience, prevailing and anticipated economic condition, and present value of future cash collections. Receivables amounted to π122,191,395 and π69,357,045 (π552,000 non current) as of December 31, 2009 and 2008, respectively. Retirement benefits. The determination of the obligation and cost of pension is dependent on certain assumptions used in calculating such amounts. Those assumptions are described in Note 15 — Retirement benefits and include among others, discount rates and future salary increases. While management believes that its assumptions are reasonable and appropriate, significant differences in the actual experience or significant changes in the assumptions may materially affect the pension and post employment obligations. Unrealized pension income amounted to π104,126 in 2009. Retirement benefit expense amounted to π281,286 in 2008. Pension asset presented as part of other assets in the statement of financial position amounted to π148,599 and P19,109 as of December 31, 2009 and 2008, respectively. Useful lives of property and equipment. The Foundation estimates the useful lives of depreciable assets based on the period over which the assets are expected to be available for use. The estimated useful lives of these assets are reviewed annually and are updated if expectations differ from previous estimates due to physical wear and tear and technical or commercial obsolescence. It is probable that the results of future operations could be materially affected by changes in the estimates due to changes in aforementioned factors. Reduction in estimated useful lives of depreciable assets would increase depreciation expense and decrease non current assets. Carrying value of depreciable assets amounted to π1,150,717 and π414,384 as of December 31, 2009 and 2008, respectively.



Impairment of non-financial assets. The Foundation assesses the impairment of non-financial assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The impairment review requires an estimation of the present value of the expected future cash flows from continued use of the assets and selection of an appropriate discount rate that can materially affect the financial statements. Carrying value of non-financial assets as of December 31, 2009 and 2008 were as follows:

December 31, 2009

December 31, 2008

Office furniture and equipment – netOther assetsTrust funds

π1,150,717568,590

44,821,020

π414,3841,584,290

28,901,391

Fair value of financial instruments. PFRS requires that certain assets and liabilities be carried at fair value which requires the use of accounting judgment and estimates. While significant components of fair value measurement are determined using verifiable objective evidence, the timing and amount of changes in fair value would differ with the valuation methodology used. Any change in fair value of these financial assets and liabilities would directly affect net profit or loss or equity. As of December 31, 2009 and 2008, fair value of financial assets amounted to π201,567,578 and π93,861,223, respectively and fair value of financial liabilities amounted to π5,014,005 and π56,053, respectively. (see Note 19)

3. CASH

This account consists of:

December 31 2009

December 31 2008

Cash on handCash in bank

π5,0002,146,538

π5,000 1,294,756

π2,151,538 π1,299,756

Cash in banks earns interest at current bank rates.

4. RECEIVABLES


December 312009

December 312008

CurrentAccounts receivableLoans receivable

π114,193,6787,997,717

π48,414,56720,390,478

122,191,395 68,805,045

Non CurrentLoans receivable

-- 552,000

π1 22,191,395 π69,357,045

Accounts receivable includes funds held in custody for the Foundation amounting to π112,138,491 and π48,343,952 as of December 31, 2009 and 2008, respectively. Loans receivable includes a five year loan to Aboitiz Equity Ventures, Inc. amounting to π16,500,000 as of December 31, 2008 with interest rates ranging from 11% to 12%, which matured and was collected on April 1, 2009.

Other loans receivable represent financial advances to proponents in carrying out their social and community development projects which are within the foundation’s program and which have met the criteria set by the Foundation. Financial advances are charged an administrative fee of 2% per month to cover cost of administering these projects. Maturity dates ranges from 1 to 5 years.

5. HELD TO MATURITY INVESTMENTS

This account represents time deposits with City Savings Bank (CSB) which earn annual interest at 8% and which mature on various dates in 2014.

6. AVAILABLE FOR SALE INVESTMENTS

This account consists of :

December 312009

December 312008

At fair valueListed shares π41,224,645 π23,204,422

Fair values of listed shares are based on quoted market prices. Unrealized gain on AFS investments shown as a separate component of equity is accounted for as follows:

December 312009

December 312008

Balance at beginning of yearFair value changes recognized in

other comprehensive income

(π238,561)

18,020,223

π8,199,108

(8,437,669)

Balance at end of year π17,781,662 (π238,561) Dividends received from above investments amounted to π1,141,242 and π2,091,764 in 2009 and 2008 respectively.



7. OFFICE FURNITURE AND EQUIPMENT


December 31, 2009

Computer Equipment

TransportationEquipment

Furniture and Fixtures

Leasehold Improvements Total

CostBalance, December 31, 2008AdditionsDisposal/amortization

π1,002,546––––

π2,083,6601,015,200(80,500)

π90,69785,569

––

π116,88020,160

(91,498)

π3,293,7831,120,929(171,998)

Balance, December 31, 2009 1,002,546 3,018,360 176,266 45,542 4,242,714

Accumulated depreciationBalance, December 31, 2008DepreciationDisposal

780,633111,610

––

2,008,069181,488

(80,500)

90,697––––

––––––

2,879,399293,098

(80,500)

Balance, December 31, 2009 892,243 2,109,057 90,697 –– 3,091,997

Book value π110,303 π909,303 π85,569 π45,542 π1,150,717

December 31, 2008

Computer Equipment

TransportationEquipment

Furniture and Fixtures

Leasehold Improvements Total

CostBalance, December 31, 2007AdditionsDisposal/amortization

π797,847204,699

––

π2,188,260––

(104,600)

π90,697––––

π137,95457,483

(78,557)

π3,214,758262,182

(183,157)

Balance, December 31, 2008 1,002,546 2,083,660 90,697 116,880 3,293,783

Accumulated depreciationBalance, December 31, 2007DepreciationDisposal

657,982122,651

––

1,950,33099,579

(41,840)

90,697––––

––––––

2,699,009222,230(41,840)

Balance, December 31, 2008 780,633 2,008,069 90,697 –– 2,879,399

Book value π221,913 π75,591 –– π116,880 π414,384

Depreciation and amortization charged to profit or loss amounted to π384,596 in 2009 and P300,787 in 2008.

8. OTHER ASSETS


December 312009

December 312008

Minimum corporate income taxPension asset (Note 15)Office suppliesAccrued interest receivable

π180,280148,599

––239,711

π179,38219,1092,325

1,383,474

π568,590 π1,584,290

Minimum corporate income tax (MCIT) is computed at two percent of gross income, creditable against normal income tax within the three immediately succeeding taxable years as follows:

Year Sustained Amount

Expired in 2009

MCIT unused

12.31.2009 Expiry

2006200720082009

π68,66649,604

61,11169,565

π68,666––––––

––π49,604

61,11169,565

2009201020112012

π248,946 π68,666 π180,280



9. TRUST FUNDS

These are funds entrusted/conditionally donated to the Foundation to insure continuous support to certain charitable programs of the foundation. In accordance with the terms and conditions of the trust funds, the funds are disbursed only for the intended purpose for which each trust fund was created. Trust fund principal are credited to deferred credits upon receipt and are recognized as income by the Foundation upon occurrence of a specified event.

10. ACCOUNTS PAYABLE


December 312009

December 312008

Accounts payableOther payables

π4,941,50572,500

––π56,053

π5,014,005 π56,053 Accounts payable consists mainly of supplier’s credit.

11. DEFERRED CREDITS

The following is summary of transactions for deferred grants/donations during the year.

December 31

2009December 31

2008

Deferred grant, beginning of year

Transfer of restricted funds to unrestricted

Donations receivedGrants earningsDonations madeGrant expensesChange in fair values of AFS

investments

π28,901,391––

18,632,0002,096,299

(8,238,701)(1,969)

3,432,000

π43,972,309(10,622,202)16,032,000

1,387,792(19,769,152)

(6,614)(2,092,742)

Deferred grant, end of year π44,821,020 π28,901,391

12. DONATIONS RECEIVED

This account represents donations received from private companies, individuals and LGU counterparts amounting to π166,385,849 in 2009 and π66,930,098 in 2008.

13. DONATIONS MADE

This account represents released funds for various projects amounting to P76,345,447 in 2009 and P64,174,249 in 2008.

14. SALARIES AND HONORARIA


2009 2008

Salaries and wagesEmployee benefitsHonorariaSSS, PHIC and Pag-ibig contributions

π3,320,923362,331

165,000162,155

π2,752,522277,445

265,000131,022

π4,010,409 π3,425,989

15. RETIREMENT BENEFITS

The Foundation has a funded, noncontributory defined benefit plan administered by the Fund’s Trustees covering all regular and full time employees. Components of retirement cost obligation recognized in the statement of financial position and retirement benefit expense recognized in profit or loss are as follows:

2009 2008

Pension asset recognized in the statement of financial position

Changes in present value of obligation

Balance beginningCurrent service costInterest costActuarial loss (gain)

π80,54622,80030,253

2,508,201

π1,154,108259,78186,904

(1,420,247)

Balance end 2,641,800 80,546

Changes in plan assetsBalance beginningExpected return of plan assetsContributions received from employerActuarial lossBenefits paid

1,046,207115,08325,364

(60,725)—

777,21185,493

220,289(36,786)

—

Balance end 1,125,929 1,046,207

Excess of plan assets over retirement obligationUnrecognized actuarial (gain) loss

(1,515,8711,664,470)

965,661(946,552)

Pension asset recognized in the statement of financial position π148,599 π19,109



2009 2008

Retirement benefits expense recognized in the revenues and expenses

Current service cost Interest costExpected return of plan assetsRecognized actuarial loss (gain)

π22,80030,253

(115,083)(42,096)

π259,78186,904

(85,493)20,094

Retirement expense (pension income) presented in revenues and expenses (P104,126) P281,286

Actual return of plan assets for the year π54,358 π48,707

Assumptions used to determine retirement costs

Discount rateExpected return of plan assetsRate of salary increase

9.54%10% 8%

37.56%11%9%

Major categories of plan assets as a percentage of the fair value of the total plan assets are as follows:

2009 2008

Short term investmentsTime deposits

94%6%

94%6%

16. COMPENSATION OF KEY MANAGEMENT PERSONNEL

The aggregate compensation and benefits paid to key management personnel are as follows:

2009 2008

Short term employee benefitsPost employment benefits

π1.3 million

7 thousand

π1 million

106 thousand

Members of the Board of Trustees donate their services to the Foundation. Donated services were valued at π165,000 in 2009 and π265,000 in 2008.

17. CAPITAL MANAGEMENT

The primary objective of the Foundation in managing capital is to ensure the Foundation’s ability to continue as a going concern so that the Foundation can continue to support its projects and programs and thus achieve the purpose for which it was created. The Foundation manages its capital structure and makes adjustments to it in the light of changes in economic condition. To maintain or adjusts capital the Foundation may assess its

members or sell its assets to reduce debt. No changes were made in the objective, policy or processes in 2009 and 2008. The Foundation manages capital using the gearing ratio which is net debt divided by equity plus net debt. It is the Foundation’s policy to keep the gearing ratio at 30% or below. The Foundation determines net debt as total liabilities less cash. Equity comprises all components of equity (fund balance and unrealized gain/loss on AFS investments). The gearing ratios of the Foundation at statement of financial position date were as follows:

December 312009

December 312008

Net debtTotal liabilitiesCash

π49,835,025(2,151,538)

π28,957,444(1,299,756)

Net debt (a)Equity

47,683,487198,272,880

27,657,68895,803,844

Equity and net debt (b) π245,956,367 π123,461,532

Gearing ratio (a/b) 19% 22%

18. FINANCIAL RISKS MANAGEMENT POLICIES AND OBJECTIVES

The financial instruments of the Foundation comprise principally of cash, accounts receivable, held to maturity investments, available for sale investments and accounts payable. The main risks arising from these financial instruments are credit risk and liquidity risk. The Board of Trustees has reviewed and set up policies to manage these risks. It continuously upgrades these policies and procedures to ensure that the management of risk exposures is both progressive and reflective of the Foundation’s financial outlook. Credit risk. Credit risk is the risk that the Foundation will incur a loss because its counterparties failed to discharge their contractual obligation. Credit risks arising from debtors are mitigated by subjecting debtors to credit verification and setting of credit limits. Furthermore, the Foundation monitors receivables continuously. Outstanding receivables of the Foundation amounting to π122,191,395 and π69,357,045 as of December 31, 2009 and 2008, respectively consist of receivables that are neither past due nor impaired and are of standard credit quality. Credit risk from other financial assets, which comprise mainly of cash, is mitigated by maintaining depository accounts and cash investments with financial institutions of high credit rating. Furthermore, the Board of Trustees sets limits on deposits that could be placed with a single institution. Cash amounted to π2,151,538 and π1,299,756 as of December 31, 2009 and 2008, respectively.



The credit quality per class of the financial assets are as follows:

December 31, 2009

Neither past due nor impairedPast Due or

ImpairedHigh Grade Standard Sub-standard Total

Accounts receivableLoans receivableHeld to maturity investments

––––––

π114,193,6786,425,518

36,000,000

––––––

––π1,572,199

––

π114,193,6787,997,717

36,000,000

–– π156,619,196 –– π1,572,199 π158,191,395

Accounts receivableLoans receivable

––––

π48,414,56719,744,639

––––

––π1,197,839

π48,414,56720,942,478

–– π68,159,206 –– π1,197,839 π69,357,045

Equity price risk. Equity price risk is the risk that the fair value of traded equity instruments decreases as the result of the changes in the level of equity indices and the value of individual shares. As of December 31, 2009 and 2008, the Foundation’s exposure to equity price risk is minimal.

Liquidity risk. Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. To manage this risk, the Foundation regularly monitors its projected and actual cash flows information. Any excess cash is invested in short term placements.

The following table presents the Foundation’s financial liabilities by contractual maturities and settlement dates as of December 31, 2009 and 2008:

As of December 31, 2009

TotalCarrying

Value

Contractual Undiscounted Payments

Financial liabilities TotalOn

Demand Less than 1 year 1 to 5 years >5 years

Accounts payable π5,014,005 π5,014,005 –– π5,014,005 –– ––


TotalCarrying

Value




Accounts payable π56,053 π56,053 –– π56,053 –– ––

The following table presents the Foundation’s financial assets by contractual maturities and collection dates as of December 31, 2009 and 2008:


TotalCarrying

Value




CashAccounts receivableHeld to maturity investmentsAvailable for sale investments

π2,151,538122,191,395

36,000,000

41,224,645

π2,151,538122,191,395

36,000,000

41,224,645

––––

––

––

π2,151,538122,191,395

––

41,224,645

––––

π36,000,000

––

––––

––

––

π201,567,578 π201,567,578 –– π165,567,578 π36,000,000 ––




TotalCarrying

Value



DemandLess than 1

year 1 to 5 years >5 years

CashAccounts receivableAvailable for sale investments

π1,299,75669,357,045

23,204,422

π1,299,75669,357,045

23,204,422

––––

––

π1,299,75668,805,045

23,204,422

––π552,000

––

––––

––

π93,861,223 π93,861,223 –– π93,309,223 π552,000 ––

19. FINANCIAL INSTRUMENTS

Set out below is a comparison by category of carrying amounts and fair values of all of the Foundation’s financial instruments

that are carried in the financial statements at other than fair values.

December 31, 2009 December 31, 2008

Carrying Value

Fair Value

Carrying Value

Fair Value

Financial assetsLoans and receivable

CashAccounts receivable

Held to maturity investmentsAvailable for sale investments

π2,151,538122,191,395

36,000,00041,224,645

π2,151,538122,191,395

36,000,00041,224,645

π1,299,75669,357,045

––23,204,422

π1,299,75669,357,045

––23,204,422

π201,567,578 π201,567,578 π93,861,223 π93,861,223

Financial liabilitiesOther financial liabilities Accounts payable π5,014,005 π5,014,005 π56,053 π56,053

Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arms’ length transaction, other than in a forced liquidation or sale. Fair values are obtained from quoted market prices, discounted cash flow models and option pricing models, as appropriate.

The carrying amounts of the Foundation’s financial assets and financial liabilities approximate fair value due to the relatively short term maturity of these financial assets.

Fair Value Hierarchy. As of December 31, 2009 and 2008, the Foundation’s AFS investments are the only financial instruments held that are measured at fair value.

December 31, 2009

Total Level 1 Level 2 Level 3

AFS investments π41,224,645 π41,224,645 –– ––

December 31, 2008

Total Level 1 Level 2 Level 3

AFS investments π23,204,422 π23,204,422 –– ––

The Foundation uses the following hierarchy for determining the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: other techniques for which all inputs which have significant effect on the recorded fair value are observable, either directly or indirectly; Level 3: technique which uses inputs which have a significant effect on the recorded fair value that are not based on observable market data.

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