�

MANILA WATER
CARE IN EVERY DROP

CERTIFICATION

I, GIGI ILUMINADA T. MIGUEL, a duly authorized representative of Manila Water

Company, Inc. (the "Company") with SEC Registration Number A199611593 with principal
office at 489 Katipunan Road, Balara, Quezon City, do hereby certify and state that:

1. In compliance with Section 3 of Securities and Exchange Commission (SEC)

Memorandum Circular No 9 Series of 2022, the Company is hereby filing its 17-A
Report for the period ended December 31, 2023 by sending the same in portable
document format (PDF) through email to [email protected] and by
uploading the same through PSE EDGE in accordance with the relevant PSE
Rules.

2. The information contained in the 17-A Report for the period ended December 31,
2023 is true and correct to the best of my knowledge.

3. I am executing this certification this _ day oµR

2
1 2624
2024 to attest to the
truthfulness of the foregoing facts and for whatever legal purpose it may serve.

•
GIGI I
Chief Finance Officer and Treasurer

MANILA WATER COMPANY, INC.

MWSS Administration Building.
489 Katipunan Road, 1105 Balara.
Quezon City, Philippines

a 791'1 �
Hotlne1627
0 wwwmriewaler.ccm
• 111f�ntlawa1er.oom
O /manlawaler
0IIManlaWaterf'H
 COVER SHEET

A 1 9 9 6 - 1 1 5 9 3
S.E.C. Registration Number

M A N I L A W A T E R C O M P A N Y , I N C . A N D

S U B S I D I A R I E S
(Company’s Full Name)

M W S S A D M I N I S T R A T I O N B U I L D I N G ,

4 8 9 K A T I P U N A N R O A D B A L A R A 1 1 0 5

Q U E Z O N C I T Y M E T R O M A N I L A
(Business Address: No. Street City / Town / Province)

GIGI ILUMINADA T. MIGUEL (02) 7917-5900

Contact Person Company Telephone Number

SEC Form 17-A

1 2 3 1 S T O C K 0 4 Any
Month Day FORM TYPE Month Day
Fiscal Year Annual Meeting

N/A
Secondary License Type, If Applicable

Article VII (on August 2020)

Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings1

9281 P
= 54.38 billion P
= 45.01 billion
Total No. of Stockholders Domestic Foreign

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

To be accomplished by SEC Personnel concerned

File Number _____________________________________

LCU

Document I.D. _____________________________________

Cashier

STAMPS

1
As of December 31, 2023
 SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-A
ANNUAL REPORT PURSUANT TO SECTION 17
OF THE SECURITIES REGULATION CODE AND SECTION 141
OF THE CORPORATION CODE OF THE PHILIPPINES

1. For the fiscal year ended: December 31, 2023

2. SEC Identification Number: A 1996-11593

3. BIR Tax Identification Code: 005-038-428

4. Name of Registrant as specified in its charter: Manila Water Company, Inc.

5. Province, country or other jurisdiction of incorporation or organization: Quezon City,

Philippines

6. Industry Classification Code: ____________ (SEC Use Only)

7. Address of principal office: MWSS Administration Building, No. 489 Katipunan Road, Balara,
Quezon City, Philippines, 1105

8. Registrant’s telephone number: (02) 7917 5900 loc. 1404

9. Former name, former address, and formal fiscal year: N/A

10. Securities registered pursuant to Sections 8 and 12 of the Securities Regulation Code (SRC):

a. Shares of Stock (as of March 14, 2024)

Title of Each Class Number of Shares

Authorized capital stock
Common shares (P = 1.00 par value) 3,100,000,000
Preferred shares (P
= 0.10 par value) 4,000,000,000
Number of shares outstanding
Common shares (P = 1.00 par value) 2,593,697,045*
Preferred shares (P
= 0.10 par value) 3,563,756,068*
* Excludes the treasury shares that were acquired by the Company.

b. Debt Securities
None. The Company has no other registered securities either in the form of shares, debt or
otherwise.

11. Are any of Registrant’s securities listed in a Stock Exchange?

Yes. As of March 14, 2024, there are 2,027,238,060 common shares, with a par value of P
= 1.00, listed
in the Philippine Stock Exchange, Inc. (PSE).

12. State the aggregate market value of the voting stock listed in the PSE held by non-affiliates of
the registrant.
The aggregate market value of the voting stock listed in the PSE held by non-affiliates was computed
by reference to the price at which the stock was sold as of a specified date within sixty (60) days prior
to the date of filing. The term “affiliate” covers those identified in the 2023 Audited Financial
Statements of the Company attached to this Report.

SEC Form 17-A

 The aggregate market value of the voting stock listed in the PSE held by non-affiliates was computed
by reference to the price at which the stock was sold as of a specified date within sixty (60) days prior
to the date of filing. The term “affiliate” covers those identified in the 2023 Audited Consolidated Financial
Statements of the Company attached to this Report.

Outstanding listed shares as of February 29, 2024 2,027,238,060

Less:
Shares held by Trident Water Company Holdings, Inc. as of
February 29, 2024 900,052,160
Shares held by Ayala Corporation as of February 29, 2024* 577,947,464
Shares held by non-affiliates 549,238,436
Closing price as of February 29, 2024 P
= 19.44
P
= 10,677,195,196
*The shares held by Ayala Corporation includes the common shares held through PCD Nominee Ayala
Corporation (21,409,000 shares) and Michigan Holdings, Inc., (1,000,000 shares), a wholly owned
subsidiary of Ayala Corporation.

Please see attached discussion on the following:

PART I - BUSINESS AND GENERAL INFORMATION

PART II - OPERATIONAL AND FINANCIAL INFORMATION

PART III - CONTROL AND COMPENSATION INFORMATION

PART IV - CORPORATE GOVERNANCE

PART V - EXHIBITS AND SCHEDULES

Unless otherwise indicated and where the context so permits or requires, information provided herein is as
of December 31, 2023.

SEC Form 17-A

 TABLE OF CONTENTS Page
PART I BUSINESS AND GENERAL INFORMATION
Item 1 Business 4
Item 2 Properties 54
Item 3 Legal Proceedings 57
Item 4 Submission of Matters to a Vote of Security Holders 68
PART II OPERATIONAL AND FINANCIAL INFORMATION
Item 5 Market for Registrant’s Common Equity and Related Stockholder 68
Matters
Item 6 Management’s Discussion and Analysis or Plan of Operations 71
Item 7 Financial Statements and Supplementary Schedules 127
Item 8 Changes in and Disagreements with Accountants on Accounting 127
and Financial Disclosures
PART III CONTROL AND COMPENSATION INFORMATION
Item 9 Directors and Executive Officers of the Registrant 128
Item 10 Executive Compensation 147
Item 11 Security Ownership of Certain Beneficial Owners and 150
Management
Item 12 Certain Relationships and Related Transactions 151
PART IV CORPORATE GOVERNANCE
Item 13 Corporate Governance 152
Signatures 183
Certificate of Compliance to Corporate Governance Manual 184
PART V EXHIBITS AND SCHEDULES
Item 14 Exhibits 185 to
Exhibit 1 – Consolidated Financial Statements 188

Exhibit 2 – SEC Form 17-C (Current Report)

Exhibit 3 – Integrated Report (which incorporates our
Sustainability Report)
 PART I – BUSINESS AND GENERAL INFORMATION

Any references in this MD&A to “our”, “us”, “we”, “MWCI”, “Enterprise” or the “Group” shall refer to Manila
Water Company, Inc., including its subsidiaries. Any reference to “Manila Water Company”, “Manila
Water”, “MWC” or the “Company” shall refer to the Parent Company only.

Item 1. The Business

Manila Water Company holds the right to provide water and used water services to the eastern side of Metro
Manila (“Manila Concession” or “East Zone”) under a Concession Agreement (CA) entered into between the
Company and the Metropolitan Waterworks and Sewerage System (MWSS) in August 1997. The original
term of the concession was for a period of 25 years to expire in 2022. The Company’s concession was
extended by another 15 years by MWSS and the Philippine Government in 2009, thereby extending the
term from May 2022 to May 2037.

On November 9, 2023, after due notice to the public, the MWSS-RO conducted a public hearing for the
extension of the expiration date of the RCA. This is in view of Company’s application to extend the term of
the RCA for another 10 years or until 2047 to align with the term of its Franchise.

The Company provides water treatment, water distribution, sewerage and sanitation services to more than
seven million people in the East Zone, comprising a broad range of residential, semi-business, commercial
and industrial customers. The East Zone encompasses (24) cities and municipalities spanning a 1,400-
square kilometer area that include Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most
parts of Quezon City, portions of Manila, Parañaque, as well as the following towns of Rizal: Angono,
Antipolo, Baras, Binangonan, Cainta, Cardona, Jala-Jala, Morong, Pililia, Rodriguez, San Mateo, Tanay,
Taytay, and Teresa.

Under the terms of the CA, the Company has the right to the use of land and operational fixed assets, and
the right, as agent and concessionaire of MWSS, to extract and treat raw water, distribute, and sell water,
and collect, transport, treat and dispose used water, including reusable industrial effluent discharged by the
sewerage system in the East Zone. The Company is entitled to recover over the concession period its
operating, capital maintenance and investment expenditures, business taxes, and concession fee
payments, and to earn a rate of return on these expenditures for the remaining term of the concession.

On March 31, 2021, MWSS and the Company entered into a Revised CA (RCA) which has a term of up to
July 31, 2037. The RCA shall become effective within six (6) months from March 31, 2021 and upon
satisfaction of the conditions precedent.

The Company and MWSS has since executed six (6) amendments to the RCA extending its Effective Date
to allow time to complete the remaining condition precedent which is the Undertaking Letter from the
Republic. The Sixth Amendment was executed on May 19, 2022 extending the Effective Date to not later
than June 30, 2022.

On June 30, 2022, the RCA did not take effect due to the Republic’s failure to submit the prescribed
Undertaking Letter. Any changes adopted by the Company in relation to the RCA were reverted to the terms
provided in the Original CA, except as provided under the franchise discussed below.

On May 10, 2023, the Company and MWSS executed a seventh Amendment to the RCA (the “Amendment”).
The parties agreed that the RCA and the seventh Amendment are deemed to be effective as of June 29,
2022. The Republic also issued a new Undertaking Letter effective as of July 1, 2022, superseding
the Undertaking Letter dated June 24, 2022.

On December 10, 2021, the franchise of Manila Water (Republic Act (RA. No.) 11601) was signed into law
and became effective on January 25, 2022. Said law grants Manila Water the franchise to establish, operate
and maintain a waterworks and sewerage system in the East Zone Service Area of Metro Manila and the
Province of Rizal for a period of twenty-five (25) years and confirms the status of Manila Water as a public
utility. Section 5 of RA No. 11601 provides that the Concession Agreement shall serve as the certificate of
public convenience and necessity, license or permit of Manila Water for the operation of its waterworks and
sewerage system.

SEC Form 17-A 4

Under RA 11601, “Concession Agreement” refers to the agreement between the grantee and MWSS on
February 21, 1997, including its amendment dated October 26, 2001, and the Memorandum of Agreement
and Confirmation dated October 23, 2009, as amended by the Revised Concession Agreement dated March
31, 2021, or as may thereafter be amended. When public interest for affordable water security requires
and upon application by Manila Water, MWSS is authorized to approve the amendment of the Concession
Agreement to extend its term up to the term of the franchise.

On March 2, 2022, the MWSS Board of Trustees (BOT) approved Resolution No. 2022-025-RO, Series
2022 involving the implications of the Legislative Franchises on the value-added tax (VAT) and franchise
tax of the Concessionaires specifically:

1. The removal of VAT from the customer bills of Manila Water and Maynilad resulting from the grant
of the Legislative Franchises to the Concessionaires, subject to the National Internal Revenue Code
of 1997, as amended, and the relevant rules of the Bureau of Internal revenues; and
2. The imposition of Government Taxes in the customers’ bills as pass-through costs comprised of a
national franchise tax at the rate of 2.00% and actual implemented rates of local franchise tax for
each local government unit starting March 21, 2022.

On March 21, 2022, the Company submitted its notice of acceptance of the twenty-five (25)-year legislative
franchise to the Committee on Legislative Franchises of the House of Representatives and the Senate
Committee on Public Services.

Aside from the Manila Concession, the Group has a holding company for all its domestic operating
subsidiaries in Manila Water Philippine Ventures, Inc. (MWPVI). Currently under MWPVI are (1) bulk water
supply businesses under Metro Ilagan Water Company, Inc. (Ilagan Water), Manila Water Consortium, Inc.
(MW Consortium), with subsidiary - Cebu Manila Water Development, Inc. (Cebu Water), Davao del Norte
Water Infrastructure Company, Inc. (Davao Water), with subsidiary - Tagum Water Company, Inc. (Tagum
Water); (2) water distribution and used water services businesses namely, Boracay Island Water Company
(Boracay Water), Clark Water Corporation (Clark Water), Laguna AAAWater Corporation (Laguna Water),
Calbayog Water Company, Inc. (Calbayog Water), North Luzon Water Company, Inc. (North Luzon Water),
Leyte Water Company, Inc. (Leyte Water) and Filipinas Water Consortium Holdings Corp. (Filipinas Water),
subsidiaries of Filipinas Water - Obando Water Company, Inc. (Obando Water), MWPV South Luzon Water
Corp. (South Luzon Water), Bulakan Water Company, Inc. (Bulakan Water), and Ilagan Water. Another
subsidiary of Manila Water is Calasiao Water Company, Inc. (Calasiao Water), a water supply project for the
Calasiao Water District; and (3) business-to-business water and wastewater service businesses comprised
of Aqua Centro MWPV Corp. (Aqua Centro), Bulacan MWPV Development Corporation (BMDC), Manila
Water Technical Ventures, Inc. (MWTV), and EcoWater MWPV Corp. (EcoWater). Under MWPVI is a division,
Estate Water, which operates and manages the water systems of townships developed by Ayala Land, Inc.
Beginning 2021, Estate Water provides wastewater services to Ayala Malls. On April 19, 2021, MWPVI and
Aqua Centro entered into a Novation Agreement with Adauge Commercial Corporation whereby MWPVI
assigns and transfers its rights, duties and obligations under the MOA with ALI Group to Aqua Centro for Atria
Development (Iloilo City).

On May 31, 2021, MWPV and the ALI Group signed an Amended and Restated MOA, wherein it states that
MWPV shall have a preferred status with regards to the provision of water and used water services to all
property development projects of the ALI Group except for several excluded developments.

On December 29, 2021, MWPV entered into a Deed of Absolute Sale with Amaia Land Corp. (Amaia) and
BellaVita Land Corp. (BellaVita) whereby MWPV sells, conveys, transfers, assigns and delivers the
properties and all rights, title, and interest to Amaia and BellaVita for the excluded developments under the
Amended and Restated MOA with ALI Group. As of December 31, 2021, MWPV completed the sale and
transfer of said properties to Amaia and BellaVita.

The holding company for Manila Water's international ventures is Manila Water Asia Pacific Pte. Ltd.
(MWAP). Under MWAP are two affiliated companies in Vietnam, namely Thu Duc Water B.O.O. Corporation
(Thu Duc Water) and Kenh Dong Water Supply Joint Stock Company (Kenh Dong Water), both supplying
treated water to Saigon Water Corporation (SAWACO) under a take-or-pay arrangement. Also, under
MWAP are Saigon Water Infrastructure Corporation (Saigon Water), a holding company listed in the Ho Chi
Minh City Stock Exchange, and Cu Chi Water Supply Sewerage Company, Ltd. (Cu Chi Water).

SEC Form 17-A 5

Apart from its operations in Vietnam, MWAP has associates in Thailand and Indonesia through Eastern
Water Resources Development and Management Public Company Limited (East Water), a fully integrated
water supply and distribution company listed in the Stock Exchange of Thailand (SET), and PT Sarana Tirta
Ungaran (PT STU), an industrial water supply operation in Indonesia, respectively. In the Middle East,
Manila Water has two Management, Operation and Maintenance Contracts (MOMC) with the National Water
Company (NWC) of the Kingdom of Saudi Arabia for its North West and Eastern Clusters. The MOMC
contains the management, operations, and maintenance of the water and wastewater facilities to be
undertaken through the consortium of Manila Water with Saur SAS and Miahona Company over a seven-
year contract period, which entails the implementation of enabling projects and the deployment of key
personnel to manage the cluster and achieve Key Performance Indicators target set by NWC.

Lastly, Manila Water Total Solutions Corp. (MWTS), a wholly-owned subsidiary, handles after-the-meter
products and services including pipe-laying, integrated wastewater services, and the incubation of new
sector businesses. To provide better focus in addressing customer needs in this sector, MWTS has been
rebranded to Manila Water Infratech Solutions (MWIS).

Please refer to Schedule H – Organization Chart of the Supplementary Schedules to the Financial
Statements for the relationships of the entities within the Group.

The East Zone Concession

The 1997 Concession Agreement

On February 21, 1997, after competitive bidding pursuant to Republic Act No. 8041 (the “National Water
Crisis Act of 1995”), as implemented by Executive Order (EO) No. 286 (December 6, 1995) and
EO No. 311 (March 20, 1996), the Company entered into a Concession Agreement (CA) with the
Metropolitan Waterworks and Sewerage System (MWSS). The CA, which took effect on August 1, 1997
sets forth the rights and obligations of the Company throughout the concession period.

The CA was amended by the Revised Concession Agreement (RCA) dated March 31, 2021, which took
effect on June 29, 2022.

The following are some of the key terms of the CA with the MWSS:

• Term. The CA 's original term was until May 6, 2022. On April 16, 2009, the MWSS Board of
Trustees (MWSS BOT) passed Resolution No. 2009-072 approving the fifteen (15)-year extension
of the CA, or until May 6, 2037. The RCA extended the concession term to July 31, 2037.

• Service Area. By virtue of the CA, the MWSS granted to the Company (as contractor to perform
certain functions and as agent for the exercise of certain rights and power under Republic Act No.
6234) the sole right to manage, operate, repair, decommission, and refurbish all fixed and movable
assets (except certain retained assets) required to provide water delivery and sewerage services in
the Service Area East of the MWSS which is comprised of the cities of Mandaluyong, Makati, Pasig,
Pateros, San Juan, Taguig, Marikina, and parts of Quezon City and Manila and the towns of
Angono, Baras, Binangonan, Cainta, Cardona, Jalajala, Morong, Pililia, Rodriguez, Tanay, Taytay,
Teresa, San Mateo and Antipolo in the province of Rizal (collectively, the “East Zone”).

• Ownership of the Company. The Company has warranted that its outstanding voting capital stock
is at least 60% owned by citizens of the Philippines or by corporations that are themselves at least
60% owned by citizens of the Philippines. For this purpose, the Company monitors its foreign
ownership to ensure that the required Filipino-ownership is met at all times.

• Ownership of Assets. While the Company has the right to manage, operate, repair, decommission
and refurbish specified MWSS facilities in the East Zone, legal title to these assets remains with
MWSS. Legal title to all fixed assets contributed to the existing MWSS System by the Company
during the concession remains with the Company until the expiration date (or the early termination
date), at which time, all rights, titles and interests in such assets will automatically vest in MWSS.

SEC Form 17-A 6

 • Common Purpose Facilities (CPF) and Interconnection Agreement. The Company was
required to enter into two agreements with the concessionaire of the West Zone of Metro Manila,
Maynilad Water Services, Inc. (“Maynilad”) for the following: (1) the operation, maintenance,
renewal and decommissioning of Common Purpose Facilities (i.e., the facilities upstream of Angat
dam established under the Umiray-Angat Transbasin Project or UATP project and the Facilities
downstream of the auxiliary hydropower plant of Norzagaray, Bulacan, including the Ipo reservoir
facilities, the Ipo-Bicti tunnels Bicti basins and Bicti-Novaliches aqueducts, up to and including the
Novaliches portal interconnection Facilities) and (2) water supply transfers between the East and
West Zones, boundary definitions, and responsibilities and liabilities as regards the management,
operation and maintenance of certain interconnection facilities.

Pursuant to this, the Concessionaires entered into the CPF Agreement and the Interconnection
Agreement on July 31, 1997. A Revised CPF Agreement was executed on March 3, 2022 covering
Umiray-Angat Transbasin Facilities including Sumag River Diversion Project and Alia River, Angat
Dam’s Bypass Units 1&2 and Low Level Outlet, Ipo Dam and Ipo-Bigte Tunnels, Bigte Compound,
Bigte-Novaliches Aqueducts Right-of-Way, Aqueducts and its appurtenances, Novaliches Junction,
Portal and Open Channels, La Mesa Dam & Reservoir and Alat Dam, Dam, Reservoir, Tunnel and
Portals of the New Centennial Water Source – Kaliwa Dam Project once the same has been turned
over to the CPF for operations, and all other raw water meters and connections including Bulacan
Bulk and San Jose Del Monte Water District connection.

• Fees paid to the MWSS. The Company is required to pay MWSS the following:

a) Concession Fees consisting of the peso equivalent of (i) 10% of the payments due under any
MWSS loan that was disbursed prior to the Commencement Date; (ii) 10% of payments due
under any MWSS loan designated for the UATP that was not disbursed prior to the
Commencement Date; (iii) 10% of the local component costs and cost overruns related to the
UATP; (iv) 100% of the payments due under any MWSS designated loans for existing projects
in the East Zone that were not disbursed prior to the Commencement Date and were awarded
to third party bidders or elected by the Company for continuation; and (v) 100% of the local
component costs and cost overruns related to existing projects in the East Zone; and

b) 50% share in the annual operating budget of MWSS amounting to P

= 396 million each year subject
to annual inflation adjustments.

The MWSS provides the Company with a schedule of concession fees payable during any year
by January 15 of that year and a written notice of amounts due no later than 14 days prior to the
scheduled payment date of principal, interest, fees and other amounts due. Currently, MWSS
gives monthly invoices to the Company for these fees.

• Tariff Adjustments and Rate Regulation

a) Establishment of the MWSS Regulatory Office (RO)

The CA provided for the establishment of the MWSS-RO under the jurisdiction of the MWSS
Board of Trustees (BOT) to monitor the operations of the Concessionaires. The MWSS-RO is
composed of five members with a five-year term, and no member of the MWSS-RO may have
any present or prior affiliation with the MWSS, the Company, or Maynilad. The MWSS-RO is
funded by MWSS through the Concession Fees.

The MWSS-RO is tasked with monitoring the Cas, reviews and monitors the water supply and
sewerage rates, and implements the rate rebasing and extraordinary price adjustment provisions
under the CA.

SEC Form 17-A 7

 b) Tariff Adjustments

Tariff rates are adjusted according to mechanisms that relate to inflation, extraordinary events,
foreign currency differentials and Rate Rebasing exercises.

Under the RCA, the Company is entitled to the following rate adjustments:

i. An annual standard rate adjustment to compensate for increases in the Consumer

Price Index (CPI) (the "C" Factor) equal to seventy-five percent (75%) of the
percentage change in the CPI for the Philippines, as published by the Philippine
Statistics Authority between July of the weighting year and July of the prior year;

ii. An extraordinary price adjustment (the “E” Factor) to account for the financial
consequences of the occurrence of certain unforeseen events stipulated under
the CA, if any; and

iii. The Rebasing Convergence Adjustment (the “R” Factor) for the purposes of
calculating the Rates Adjustment Limit for each of the four charging years of the
Rebasing Period determined based on the following:

(1) the Net Present Value, which may be either positive or negative, of the
Opening Cash Position, as of June 30 following that Rate Rebasing Date;
and

(2) the amount, either positive or negative, which is made to the Rate Adjustment
Limit for each of the five (5) Charging Years of the Rebasing Period would
cause the Net Present Value of the Future Cash Flows, as at June 30
following that Rate Rebasing Date, to be equal but opposite in sign to the Net
Present Value of the Opening Cash Position as determined in (1) above.

c) Appropriate Discount Rate

The Company is entitled to earn a rate of return equal to the Appropriate Discount Rate (ADR)
on its expenditures prudently and efficiently incurred for the remaining term of the concession.
The ADR is the real (i.e., not inflation adjusted) weighted average cost of capital after taxes as
determined by the MWSS-RO based on conventionally and internationally accepted methods,
using estimates of the cost of debt in domestic and international markets, the cost of equity for
utility business in the Philippines and abroad with adjustments to reflect country risk, exchange
rate risk and any other project risk. Under the RCA, for the period prior to the Effective Date of
the RCA which is June 29, 2022, market-driven rates approved by the MWSS shall apply while
from June 29, 2022 onwards, applicable rate is fixed at twelve percent (12%).

d) Foreign Currency Differential Adjustment (“FCDA”)

The RCA provides for a foreign currency rate adjustment to recover or compensate on a current
basis, accrued FOREX losses/gains arising from MWSS and Company Loans. MWSS RO shall
review the FCDA on a quarterly basis and determine rate adjustment required. The FCDA shall
be a pass-through charge which shall be added on top of the Standard Rates and shall not be
subject to the Rate Adjustment Limit. The FCDA shall be applicable to the Company’s loans
existing as of the effectivity of the RCA. Any rate adjustment arising from the FCDA mechanism
shall be published.

For any and all Company loans contracted after June 29, 2022, Company may apply for Modified
Foreign Currency Differential Adjustment (“MFCDA”) which is a rate adjustment mechanism for
extraordinary inflation/deflation of the Philippine Peso.

Failure by the Company to exercise MFCDA mechanism during an extraordinary inflation or

expressly declines to exercise the same in writing, Company’s right to benefit from the MFCDA
mechanism shall be deemed waived and terminated for that entire calendar year where the
Trigger Date occurred.

SEC Form 17-A 8

 Similar to the FCDA, the MFCDA shall be a pass-through charge on top of the Standard Rates
and shall not be subject to the limitation of the Rate Adjustment Limit. Any rate adjustment arising
from the MFCDA shall be published by the Company.

Detailed guidelines for both FCDA and MFCDA, which shall form part of the RCA, shall be issued
by MWSS RO, assisted by Department of Finance and approved by the MWSS.

• Early Termination

MWSS has a right to terminate the concession under certain circumstances which include event of
default by the Company, failure to perform an obligation under the CA, and when the common good
so requires upon one (1) month notice to the Company.

The Company also has the right to terminate the concession in the event of default on the part of
MWSS.;

Both parties may terminate the concession on the ground of prolonged event of force majeure.

• Reversion

On the expiration of the RCA, all the rights, duties and powers of the Company automatically revert
to MWSS or its successors or assigns. Concessionaire shall bear all liabilities and be entitled to
receive and to retain all revenues arising out of its operation of the facilities prior to expiration of the
RCA. MWSS shall be solely responsible for any taxes, fees or duties payable in connection with
such reversion. MWSS has the option to rebid the concession or renew the agreement with the
express written consent of the government.

• Dispute Resolution

Under the RCA, any disagreements, disputes, controversies or claims arising out of or relating to
the Agreement or interpretation or breach, termination or invalidity shall amicably be resolved by
parties involved. Any dispute that cannot be resolved amicably shall be referred to and settled by
final binding arbitration in accordance with the Arbitration Rules embodied in Republic Act No. 9285
and its Implementing Rules and Regulations or the existing Philippine law and regulations on
arbitration at the time of dispute. However, disputes arising from the composition of the Regulatory
Office as well as from decisions of the Regulatory Office in the exercise of its mandate are not
arbitrable. Seat for arbitration shall be the Philippines and the venue shall be in Metro Manila. Only
Filipino citizens may be appointed as arbitrators.

Key Performance Indicators and Business Efficiency Measures

The Company has the right to bill and collect for water and sewerage services supplied in the East Zone.
In return, the Company is responsible for the management, operation, repair, and refurbishment of MWSS
facilities in the East Zone and must provide service in accordance with specific operating and performance
targets described in the CA.

The CA initially set service targets relating to the delivery of services by the Company. These service targets
are revised from time to time by the MWSS RO following consultation with the Concessionaire.

As part of the Rate Rebasing exercise, the MWSS adopted a performance-based framework designed to
mimic the characteristics of a competitive market and help the MWSS-RO determine prudent and efficient
expenditures. The Framework utilizes KPIs and BEMs to monitor the implementation of the Company’s
capital investment and business plan and serve as basis for rewards and penalties determined during Rate
Rebasing exercises.

SEC Form 17-A 9

There are fourteen (14) KPIs representing critical performance levels for the range of activities the Company
is responsible for, related to water service, sewerage and sanitation service and customer service. On the
other hand, there are seven (7) BEMs relating to income, operating expenses, capital expenditures and
Non-Revenue Water which enable the MWSS-RO to evaluate the efficiency of the management and
operation of the concessions and gauge progress toward the efficient fulfillment of the Concessionaire’s
business plans. The BEMs are evaluated for trends and annual forecasts.

Amendments to the 1997 Concession Agreement

a. Amendment No. 1 dated October 26, 2001

On October 26, 2001, the MWSS and the Company executed Amendment No. 1 to the Concession
Agreement (“Amendment No. 1”). Amendment No. 1 allowed the Company to implement a special
transitory mechanism to recover past foreign exchange (FOREX) gains and losses and to
implement a rate adjustment for foreign exchange currency differentials with respect to present and
future FOREX gains and losses, which under the original CA were recovered only when the
concessionaire petitioned for an EPA.

b. Memorandum of Agreement and Confirmation dated October 23, 2009

On October 23, 2009, the MWSS and the Company executed a Memorandum of Agreement and
Confirmation extending the CA for an additional period of fifteen (15) years from the year 2022 or
until 2037, under the same terms and conditions. Said extension is on account of the necessary
additional investments in wastewater facilities and network towards expanding wastewater
coverage in the East Zone, in line with the Supreme Court mandamus for the clean-up of Manila
Bay.

c. Revised Concession Agreement dated 31 March 2021 and its amendments

On March 31, 2021, the MWSS and the Company executed the Revised Concession Agreement
(the “Revised CA” or “RCA”) following the directive of then President Rodrigo R. Duterte to review
the provisions of the CA.

The Revised CA confirmed the continuation of the concession until July 31, 2037 but amended
certain key provisions of the CA. The Revised CA expressly excluded Corporate Income Taxes from
the list of recoverable expenditures and also imposed a cap on tariff rate increases equivalent to
1.3x the previous standard rate for water tariff and 1.5x the previous standard rate for sewer tariff.
The rate rebasing mechanism under the original CA is retained but instead of a market-driven
appropriate discount rate, this has been fixed at 12% discount rate. The Republic issued a new
Undertaking Letter with effectivity on July 1, 2022. The new Undertaking covers contracts and
obligations existing at the time of execution of the Revised CA and shall not cover prospective
obligations.

The MWSS and the Company executed seven (7) amendments to the RCA. The Seventh
Amendment executed on May 10, 2023 increased the Consumer Price Index from the limited yearly
inflation factor of 2/3 to a “C” factor equal to 75% of the percentage change in Consumer Price Index
for the Philippines. It likewise reinstated the Foreign Currency Differential Adjustment (“FCDA”)
mechanism allowing Company to pass on foreign currency differentials on a quarterly basis with
respect to present and future foreign exchange losses or gains arising from the principal and interest
payments on all MWSS loans and the principal payments for Company loans existing as of the
effectivity of the RCA. It introduced a Modified Foreign Currency Differential Adjustment (“MFCDA”)
in cases of extraordinary inflation or deflation (as defined in the Seventh Amendment) for Company
loans contracted after June 29, 2022.

The Seventh Amendment also adopted the revised Implementing Rules and Regulations of
Republic Act No. 6957, as amended by Republic Act No. 7718, specifically, the definition of Material
Adverse Government Action (MAGA), reclassifying the forms of Performance Bond, and making the
actions and decisions of the MWSS-Regulatory Office arbitrable.

SEC Form 17-A 10

 MAGA thus now includes any act of the government (not only limited to acts or omissions of the
executive branch of the government other than those committed by any regulatory authority or
approving body of the government) which Company had no knowledge of or could not have
reasonably be expected to have knowledge of prior to effectivity of the RCA, which specifically
discriminates against the sector, industry or project and which has a material and adverse effect on
any of the rights and privileges of or on the enjoyment and/or exercise thereof by the Company or
which has a material and adverse effect on the Company’s ability to comply with its financial and/or
contractual obligations under the RCA. A list of instances not covered by MAGA is provided as well
in the RCA.

Actual capital expenditures incurred in excess of 5% approved capital expenditure for the Rate
Rebasing Period resulting from a MAGA or combination thereof shall entitle the Company to receive
compensation for actual costs, expenses, and losses including (and not just the excess over) at a
cap of 50% of the approved capital expenditure for the Rate Rebasing Period or such other mode
that Parties may have agreed to.

The Legislative Franchise

On January 25, 2022, Republic Act (RA) No. 11601 took effect, granting the Company a franchise to establish,
operate, and maintain the waterworks and sewerage system in the East Zone Service Area of Metro Manila
and the Province of Rizal for a period of twenty-five (25) years.
Section 5 of RA No. 11601 provides that the Concession Agreement shall serve as the certificate of public
convenience and necessity, license or permit of the Company for the operation of its waterworks and sewerage
system. Under RA 11601, “Concession Agreement” refers to the agreement between the grantee and MWSS
on February 21, 1997, including its amendment dated October 26, 2001, and the Memorandum of Agreement
and Confirmation dated October 23, 2009, as amended by the Revised CA dated March 31, 2021, or as may
thereafter be amended.
When public interest for affordable water security requires and upon application by the Company, MWSS is
authorized to approve the amendment of the Concession Agreement to extend its term up to the term of the
franchise.
As franchisee, the Company is obligated to submit a completion plan for the establishment and operation of
water, sewerage and sanitation project covering a period until 2037, with periodic five (5)-year completion
targets with the end goal of achieving one hundred percent (100.00%) water and combined sewerage and
sanitation coverage by 2037.
The Company is likewise required to submit a compliance report to Congress through the Committee on
Legislative Franchises of the House of Representatives and the Committee on Public Services of the Senate
on or before April 30 of each year. The annual report will contain the following:
a. Annual progress report of compliance with targets;
b. An update on the development, operation, and expansion of business;
c. Audited financial statements and latest General Information Sheet (GIS) officially
submitted to the SEC, if applicable;
d. A certification of the MWSS RO on the status of its permits and operations; and
e. An update on its minimum public float required under Section 18.
The Company is obligated to submit all information and documents required by the MWSS RO to conduct
comprehensive assessment of the grantee’s operations and compliance with conditions imposed in RA No.
11601. Further, the Company is required to provide and promote creation of employment opportunities,
maintain minimum public float as required by the Philippine Stock Exchange, and elect independent directors
constituting at least 20.00% of its total BOD membership.
Tariff setting to be conducted by the MWSS RO or its legal successor shall take into account incentives for
enhancement of efficiency, equity considerations, and the customers’ willingness to pay apart from reasonable
and prudent capital and recurrent costs of providing the service including a reasonable rate of return on capital,
efficiency of service, administrative simplicity, and the methodology prescribed under the Concession
Agreement.

SEC Form 17-A 11

On March 2, 2022, the MWSS BOT approved Resolution No. 2022-025-RO, Series 2022 involving the
implications of the Legislative Franchises on the value-added tax (VAT) and franchise tax of the
Concessionaires specifically:
i. The removal of VAT from the customer bills of the Company and Maynilad resulting
from the grant of the Legislative Franchises to the Concessionaires, subject to the
National Internal Revenue Code of 1997, as amended, and the relevant rules of
the Bureau of Internal revenues; and
ii. The imposition of Government Taxes in the customers’ bills as pass-through costs
comprised of a national franchise tax at the rate of 2.00% and actual implemented
rates of local franchise tax for each local government unit starting March 21, 2022.
On March 21, 2022, the Company submitted its notices of acceptance of the twenty-five (25)-year legislative
franchise to the Committee on Legislative Franchises of the House of Representatives and the Senate
Committee on Public Services.
In compliance with Section 21 of RA No. 11601, the Company has been submitting its annual reports since it
obtained its legislative franchise: 1st Annual Report to Congress on April 29, 2022, and 2nd Annual Report on
April 28, 2023.

Organization

The organizational structure of the Company has the objective of decentralizing the locus of operating
control to the Senior Leadership Team composed of the President and Chief Executive Officer, East Zone
Business Chief Operating Officer, Non-East Zone PH Business Chief Operating Officer, International
Business Chief Operating Officer, Chief Administrative Officer, Chief Regulatory Officer, Chief Legal Officer
and Chief Compliance Officer, and the Chief Finance Officer and Treasurer.

As of December 31, 2023, the organizational structure is as follows:

A. Manila Water Operations (East Zone)

Manila Water Operations (East Zone) is responsible for the East Zone Operations and is headed by
the Chief Operating Officer for East Zone.

The groups that constitute Manila Water Operations (East Zone) are the Operations Group, East Zone
Business Operations, Project Management Group, Strategic Asset Management Group, Health, Safety
and Environment Group, Supply Chain Group and Engineering Group.

1. The Operations Group (OPSG) operates and maintains all of Manila Water’s water and
wastewater facilities. It constantly seeks ways to improve the efficiency and reliability in
managing all facilities in the East Zone by developing high-quality operating standards,
delivering innovative technology solutions and support, exploring new technologies, and
promoting a culture of a safe work environment while remaining compliant with environmental
and regulatory standards. OPSG comprises Water Supply Operations, Wastewater Operations,
and other support departments.

a. Water Supply Operations manages the water treatment facilities, pumping stations,
service reservoirs, and the primary and distribution lines to provide 24/7 water supply at a
reliability level of at least 99.99% while maintaining 100% compliance in water quality as
defined in the Philippine National Standards for Drinking Water. It is also responsible for
ensuring that water supply meets demand using accurate forecasting from source to
production despite variability in consumer demand or environmental pressures.

The Water Supply Operations, in cooperation with counterparts from Maynilad, manages
the Water Source or the Common Purpose Facilities (CPF), which includes headworks
upstream of the La Mesa Dam (Angat Dam, Ipo Dam, and the Novaliches portals). The
WSO also manages other water sources through its Deepwell facilities, Cardona Treatment
Plant, and Calawis Facility. The team ensures that sufficient raw water allocation is
maintained throughout the year.

SEC Form 17-A 12

 b. Wastewater Operations manages the collection, treatment and management of
wastewater and its byproducts. Used water from households and catchment areas are
collected and conveyed via sewer network and lift/pump stations to treatment plants to
undergo full treatment and ensure treated effluent and byproducts are consistently
compliant to environmental standards. The team is likewise responsible for implementing
the wastewater service expansion plan.

c. Support Department is composed of six (6) departments: The Laboratory Services,

Operations Control and Data Analytics, Compliance and Watershed Management,
Innovation and Operations Technology.

i. Laboratory Services collects water samples daily from strategically located sampling
points all over the East Zone – from water treatment facilities to the distribution and
effluent samples from all wastewater facilities. The samples are tested for physical,
chemical, and microbiological parameters to ensure compliance with water quality
standards. Aside from being certified by the Department of Health (DOH) and
recognized by the Department of Environment and Natural Resources (DENR), the
Laboratory is also ISO/IEC 17025:2017 accredited. The department also actively
contributes to process optimization towards improved operational control and
efficiency.

ii. Operations Control and Data Analytics Department leads a coordinated,

collaborative, and data-driven system operations of Water Supply, Wastewater, and
support groups, corroborative of Operations Group’s mandate execution and efficiency
advancement.

iii. The Compliance and Watershed Management Department assesses and evaluates
overall compliance performance to environmental, safety, and health standards and
initiates and develops improvements on policies, execution, measurement, and
assessment in accordance with the Department of Environment and Natural
Resources (DENR) and the Department of Labor and Employment (DOLE)
administrative orders and Laguna Lake Development Authority (LLDA) board
resolutions. The department also develops and implements policy advocacy plans to
address environmental compliance regulatory issues and continuously engages with
policymakers and stakeholders. In addition, the department is also responsible for the
adequate protection and management of watersheds by working closely with
government agencies, particularly MWSS, DENR, and other concerned stakeholders,
in conducting relevant studies, developing policies and plans, and executing
appropriate interventions to mitigate risks and ensure the sustainability of raw water
sources of the Company.

iv. The Innovation Department leads and drives the company's innovation management
by fostering a culture of pioneering, empowering teams, mapping pathways, and
championing collaboration.

v. The Operations Management and Governance Department is responsible for

building and maintaining OPSG’s management system to deliver its organizational
value of water and wastewater services. The department governs implementing
policies and procedures mandated by the organization, streamlining business
processes, and establishing a culture for risk and opportunity management and
continuous improvement. It also manages good relationships with external partners to
ensure continuous water and wastewater service operations.

vi. The Operations Technology Department develops, manages, and leads operational
technology initiatives, business process digitalization strategies, and integrate process
systems corroborative of Operations Group’s mandate execution and efficiency
advancement.

SEC Form 17-A 13

 2. The East Zone Business Operations (EZBO) is responsible for ensuring that the Company
meets the demand of all the customers in the East Zone, managing the drivers for revenue
growth, delivering customer service, maintaining water network efficiency, and building
community and stakeholder relationships. It is composed of the East Zone Service Area
Operations, East Zone Business Operations Support and Network Operations Support Division.

a. The East Zone Service Area Operations operate six (6) Service Areas (SAs) – Quezon
City, Mandaluyong-Makati, Marikina, Pasig, Rizal, and Taguig-Pateros which cover major
business districts in Quezon City, Makati, Ortigas, and Taguig, as well as the entire province
of Rizal. The SAs are directly responsible for the processing of application for new water
service connections, management of meter reading, billing, and collection activities,
facilitating complaints resolution and after sales services, which form part of the end-to-end
process of account management. The SA’s are also responsible in addressing Non-
Revenue Water through efficient network management. They are also tasked to find
business opportunities in different market segments. Their key mandates include the
management of customer demand and differentiating touchpoints per customer type
aligned with the specific needs of the customers and key accounts. This is geared towards
achieving company targets on billed volume, revenue, and customer centricity. In addition,
the SAs drive the reduction of water losses or Non-Revenue Water (NRW) through
proactive investigation of meter field findings, illegal connections, that may address
commercial losses and leak repairs for physical losses.

The SAs are also tasked to implement Type E EZBO Capital Expenditure (CAPEX) projects
in coordination with the project management group. They also provide support to the project
team in coordinating with Local Government Units by leveraging on established relationship
with them.

b. The East Zone Business Operations Support Division is composed of Five (5)
departments: Planning Analytics and Performance Management, Billing and Collection,
Customer Service and Stakeholder Management, Program and Policy Development, and
Account Development and Demand Creation Department.

i. The Planning Analytics and Performance Department is responsible for revenue

management, demand forecasting, EZBO cost management and financial planning,
provision of systems and analytical tools, and performance management of all EZBO
employees.

ii. The Billing and Collection Department ensures efficient meter reading to deliver
quality customer bills. It also provides collection support to the Service Areas through
service provider management and payment facilities sourcing.

iii. The Customer Service and Stakeholder Management Department reviews and
enhances customer service processes and standards aimed at driving customer
satisfaction. It regularly monitors customer centricity metrics to ensure that all
customers’ concerns are attended to efficiently and effectively. The department is also
responsible for crafting programs relevant to strengthening stakeholder relationships
and establishing partnerships aimed towards smooth implementation of business
initiatives.

iv. The Program and Policy Development Department handles policy development,
modifications, and compliance as well as various engagement initiatives for the Group
such as EZBO rewards and recognition programs. This department also provides
support to the Service Areas on reviews of legal documents and contracts via
coordination with corporate Legal department.

v. The Account Development and Demand Creation Department is responsible for

developing growth strategy of EZBO through the identification of additional revenue
opportunities and establishment of sustainable project pipeline for accounts
development.

SEC Form 17-A 14

 c. The East Zone Network Operations Support Division is composed of two (2)
departments: Network Operations and Planning Analytics Department and Meter
Management Department.

i. The Network Operations and Planning Analytics Department ensures seamless

operation and strategic planning of the network infrastructure. The department's
responsibilities encompass proactive network management, data-driven decision-
making, and optimizing performance to meet the evolving demands of customers.
From monitoring network performance to strategic planning and optimization, the
department ensures the reliability, scalability, and efficiency of MWCI's network. It also
plays a crucial role in emergency response and disaster recovery planning to minimize
disruptions and maintain business continuity. Collaborating closely with other
departments, the department strives to innovate and continuously improve the network
infrastructure to deliver superior service to customers.

ii. The Meter Management Department is responsible for maintaining, calibrating, and
managing water meters across the organization to ensure accurate measurement of
water consumption, thereby guaranteeing correct billing for customers, and
safeguarding the company's revenue through billed volume. The department plays a
critical role in overseeing the installation, replacement, and maintenance of water
meters, maintaining a strong commitment to adhering to regulatory standards.

The Service Areas and HQ Departments - Business and Network Operations Support, drive
the growth of the business, providing customer service at the grassroots, ensuring that all
available channels that will bring Manila Water closer to the customer are available, and
building relationships with the community to ensure achievement of regulatory targets in terms
of delivery of quality service to Manila Water customers.

3. The Project Management Group (PMG) is tasked with the planning, design, and construction
of all water, used water and network CAPEX projects that are crucial for the Company to
achieve regulatory commitments as stipulated in the capital investment and business plans.
The careful delivery of projects, strict adherence to the target timelines, prudent and efficient
cost and highest standards of quality and safety are the basis for the achievement of corporate
business objectives aligned with the sustainable expansion of services which improve people’s
lives and support regional economic growth. PMG is organized for an integrated, collaborative
approach to project execution. It is composed of ten (10) departments namely: Water Supply
Headline, Wastewater Headline, Capital Works North Headline and Capital Works South
Headline; Commercial and Contracts Management; Design Costing and Technical Standards;
Project Management Office; Project Stakeholder Engagement; Quality Assurance; and Land
Acquisition.

a. The four (4) departments handling Project Management – (1) Water Supply Headline; (2)
Wastewater Headline; (3) Capital Works North Headline; and (4) Capital Works South
Headline are entrusted to manage the project-life cycle process of the CAPEX programs
of the Company. They lead the project’s planning and execution with the support of the
various cross-functional teams. They are accountable for the delivery of the multi-billion
project portfolio of the Company and ensure that projects are executed within time and cost,
and adhere to quality, safety, environmental and legal standards.

b. The Construction and Contracts Management Department is responsible in

standardizing construction management practices and processes to ensure execution of
projects are within time, cost, and quality, and reviews and resolves issues on contractual
provisions and service performance for the duration of the project contract period.

c. The Design Costing and Technical Standards Department ensures the compliance of
projects to established engineering standards by developing design concepts and ballpark
cost estimates, conducting preliminary and detailed design as necessary, preparation of
detailed cost estimates, spearheading the technical evaluation of technical proposals during
bidding, review of detailed design submissions during execution, and developing high-
quality and cost-effective engineering standards that are used across the business. The

SEC Form 17-A 15

 department is also at the forefront of studying the latest construction technologies and
methodologies in line with value-engineering.

d. The Project Management Office Department is responsible for (1) the set-up of project
information, and analytics to manage the portfolio of projects; (2) the provision of control
functions in support of project teams; and (3) the maintenance of project documentation
systems.

e. The Project Stakeholder Engagement Department ensures that the projects have the
support of critical stakeholders such as local governments, national agencies and the public
through proactive project awareness programs and relationship-building that ensure timely
and smooth resolution of any project concerns.

f. The Quality Assurance Department is in-charge of building and promoting quality

management culture across the organization by (1) development and implementation of
quality management procedures and system across PMG, including alignment on the
project delivery support processes; (2) development and implementation of both internal
talent and vendor-focused safety and quality programs; and (3) development of systems on
quality and operational improvement including change communications.

The team is also responsible in ensuring PMG projects are consistently delivered complying
to quality management requirements by (1) development and implementation of quality
assurance and quality control processes on infrastructure projects including testing and
commissioning; (2) development and implementation of safety management systems and
control processes for PMG projects including work zone traffic management.

g. The Land Acquisition Department is responsible for acquisition of properties, provision of

associated services which include legal assistance including contract drafting, negotiation,
legal advisory services, and the oversight of external legal counsel. They ensure that all
acquisition endeavors consistently adhere to relevant legal statutes, internal policies, and
any additional guidelines set forth by management. The team handles acquisitions in a
manner that acknowledges their significance in facilitating the implementation of CAPEX
programs, adopts efficient land management practices, and ensures that properties
acquired are appropriately classified and optimized for business use. They also collaborate
with various departments across the organization in identifying and mitigating risks related
to right-of-way and land matters.

4. The Strategic Asset Management Group (SAMG) helps the Company in the delivery of its
service obligations and in providing quality service to its customers in the most prudent and
efficient manner through excellent planning, development, realization, and management of its
assets.

The group is mandated to provide a comprehensive, holistic, and integrated master plan that
will address capital investments for water systems, wastewater systems, and other
environmental services, as well as to implement sustainable operation and maintenance of
existing and new assets.

To deliver these mandates, SAMG is organized into four (4) departments namely: Strategic
Asset Planning, Portfolio Management, Asset Management, and SAMG Management
Information & Systems.

a. The Strategic Asset Planning Department (SAPD) plans, develops, and calibrates the
water and wastewater master plan, and the capital and operational expenditure programs
of the Company through project concepts and studies incorporated and consolidated into
the annual project list and the Service Improvement Plan (SIP). SAPD ensures that inputs
from multiple external government and private organizations are integrated in the SIP. This
department is also responsible for the development of new water resources and
environmental master plan for the entire East Zone concession.

SEC Form 17-A 16

 b. The Portfolio Management Department (PMD) ensures the delivery of the overall
corporate CAPEX portfolio according to the approved SIP. This department manages the
overall portfolio performance and identifies the right mix of projects to maximize overall
benefits and meet regulatory and business goals. PMD provides comprehensive analysis
for portfolio impact assessment and investment, as well as recommends changes and
adjustments required to meet objectives.

c. The Asset Management Department (AMD) ensures optimum financial and operational
performance of assets at least cost through risk-based, data-driven strategies to deliver the
company’s service obligations. AMD consolidates and maintains asset information,
including updates in data repository and in ArcGIS. This department also defines the Asset
Management Plans (AMP) which is incorporated and implemented through the SIP.

d. The SAMG Management Information & Systems (SIMS) Department supports SAMG
and all its departments in ensuring that necessary programs related to the delivery of group
targets and objectives, process improvements, policy development, and records
management are executed as aligned with corporate goals. SMIS also provides thorough
analytics, dashboards, and reports on performance as to capital investments and
compliance.

5. The East Zone Health, Safety and Environment (HSE) Group was established in December
2022 to intensify focus in safeguarding the Health, Safety and Environment aspects of the
company. The Departments under HSE are originally from the OPSG which were moved to the
Office of the Chief Operating Officer of East Zone. It is composed of the following Departments:

a. Business Continuity Department leads the overall planning, development, and review of
the organization’s disaster preparedness to ensure continuity of business and its mission of
providing water and wastewater services to its customers through a proactive and response-
oriented strategies.

b. Occupational Safety and Health (OSH) Department leads the development and
implementation of East Zone’s Occupational Safety and Health Management Systems and
ensures compliance to applicable OSH legal and other requirements.

c. Property Management Department ensures good condition of offices, building, and

facilities by providing reliable facilities management services.

6. The Corporate Energy Management Group is committed to achieving reliable power supply
and sustainable Energy management through efficient and cost-effective practices that will
benefit Manila Water East Zone Operations and keep the energy management system in check
through conducting technical and process audits, data analytics, and energy compliance
management. The department also monitors power consumption, recommends power-
efficiency measures, and develops and implements strategies for the company to avail of
advantageous power rates in all its facilities.

7. The Supply Chain Group which was established in October 2023 is responsible for developing
and executing strategic supply chain programs to enable the delivery of water and wastewater
services on time and within budget as well as meet regulatory commitments. It is responsible
for maintaining adequate and timely supply of chemicals and network materials to respond to
the requirements of our facilities and service areas. It is organized into the following sections:

a. Demand Planning generates a forecast of materials considering planned consumption of

chemicals by plant, network requirements and projects in the pipeline. It coordinates with
the Operations, EZBO and PMG groups to ensure that the most recent picture of demand
and assumptions are used to drive replenishment and ordering of materials.

b. Supply Planning coordinates the replenishment of materials (chemicals and network

materials) for operations and project requirements. It manages inventory to ensure
continued supply in case of fluctuations in demand or emergency situations.

SEC Form 17-A 17

 c. Warehouse Operations and Logistics oversees the operation of multiple warehouses and
ensures the tracking and control of physical inventories. It also responsible for protecting
and preserving materials to prevent obsolescence and waste.

8. The Engineering Group was established in December 2023 and has mandate of ensuring the
optimum performance of water supply and wastewater equipment, fleet, and facilities at all
covered locations. It does this through the development and implementation of an effective
reliability programme using various techniques such as Reactive, Preventive, Predictive and
Operator-Driven Maintenance, tools such as Computerized Maintenance Management
Systems, internal scanning and external benchmarking, and other systems deemed useful to
achieving the Engineering Group’s remit. It is composed of the following Departments:

a. Asset Maintenance Department oversees maintenance activities for Water Supply and
Wastewater facilities in the East Zone. Its primary focus is maintaining electrical and
mechanical equipment to ensure the infrastructure's efficiency and reliability.
The department consists of specialized teams that handle various aspects of asset
maintenance. These teams work closely with the Asset Reliability Department to ensure
the functionality of critical equipment and develop effective maintenance programs.
Additionally, the department conducts inspections and responds to emergency
maintenance requirements.
b. Asset Reliability Department focuses on maintenance planning and maintenance
contracts which ensure maximum uptime and performance of assets while minimizing
costs. This involves strategic planning of maintenance activities, effective management of
maintenance contracts with external service providers, compliance with regulations,
continuous improvement of processes, and risk management.
c. Fleet Management Department focuses on company vehicles and equipment, covering
acquisition, allocation, deployment, monitoring, maintenance, driver supervision, fuel
management, and adherence to government regulations. The department is entrusted with
ensuring their seamless operation, efficiency, and safety. FMD engages with regulatory
bodies to ensure compliance with traffic rules and regulations. Its commitment extends to
continuous improvement, guided by the CASA approach, and maintaining DOLE-OSHC
Accreditation for Fleet Operators and Equipment, affirming its compliance to occupational
safety and health standards. It is actively monitoring and engaging on rlectric vehicles to
reduce carbon emissions and promote environmental sustainability.
d. Corporate Facilities Management Department is dedicated to ensuring the safety and
optimal condition of our offices, buildings, and facilities. It provides reliable property
management services to guarantee a conducive working environment. Their responsibilities
encompass building administration, project management, contract and budget
management, as well as service provider management. CFMD aims to ensure that our
facilities meet the standards, promoting productivity and well-being for all stakeholders.
B. Office of the President

1. The Internal Audit (IA) Department conducts an independent, objective assurance and
consulting activity designed to add value and improve the organization's operations. It helps
the organization accomplish its objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control, and governance
processes. The activities of IA are governed by a separate Internal Audit Charter approved by
the Audit Committee and the Board.

The IA reports to and supports the Audit Committee in the effective discharge of the
Committee's oversight roles and responsibilities. IA consists of talents and professionals who
are either a Certified Public Accountants, Engineers, and IT Professional.

A risk-based internal audit plan is prepared and approved by the Audit Committee annually,
which is reassessed quarterly to consider emerging risks. The Audit Committee reviews and
approves the annual work plan and all deviations therefrom and ensures that internal audit
examinations cover the evaluation of adequacy and effectiveness of controls encompassing
the company’s governance, operations, and information systems; reliability and integrity of

SEC Form 17-A 18

 financial and operational information; safeguarding of assets; and compliance with laws, rules,
and regulations.

The IA conducts its activities guided by the Institute of Internal Auditors’ (IIA) Professional
Practices Framework (IPPF) and its mandatory elements namely: (1) Core Principles for the
Professional Practice of Internal Auditing; (2) Definition of Internal Auditing; (3) Code of Ethics;
and (4) International Standards for the Professional Practice of Internal Auditing.

In November 2022, the external auditing firm Punongbayan & Araullo conducted an
independent validation of the internal audit function's Quality Assessment Review and
concurred that the internal audit activity "Generally Conforms" to IPPF. The Standards require
that the external assessment be conducted at least once every five (5) years, thus the next one
will be performed in 2027.

2. The Legal Services Group (LSG) provides legal, contract management, corporate
governance, litigation, special transactions, and regulatory support services across the entire
enterprise. It proactively ensures that the enterprise is fully compliant with all the applicable
laws, rules, and regulations, and defends and protects the Group’s interests in the courts,
administrative agencies, and other tribunals. It is also responsible for drafting and reviewing of
contracts and other legal documents to ensure that the interests of the enterprise are protected
and that the enterprise remains compliant with laws, rules, and regulations.

In matters of corporate governance, the LSG is the unit tasked to formulate and implement the
initiatives and policies on good corporate governance. It reports on matters of corporate
governance directly to the Chief Compliance Officer under the supervision of the Corporate
Governance Committee. The LSG has been active in the continuous conduct of orientation to
all Manila Water employees and business partners on the Group’s governance policies,
particularly on matters contained in the Manual of Corporate Governance.

Among the mandates of the LSG is the continuous identification of gaps and challenges on
corporate governance practices across the organization. This allows the LSG to propose
improvements on the Group’s policies based on international corporate governance standards.

Finally, the LSG, in coordination with the Office of the Corporate Secretary, also provides timely
updates to the Board and the Management on the current and best practices on corporate
governance in the industry and globally.

C. Enterprise Regulatory Affairs Group

1. The Enterprise Regulatory Affairs Group (ERAG) ensures that the Group adheres to rules
and regulations determined by law or any governing body to avoid reputational damage,
penalties and/or charges affecting the sustainability of the enterprise. ERAG acts as the internal
regulator of the company and leads in monitoring compliances and that its corporate plans are
aligned with its service improvement plan. ERAG also manages the Group’s records that serve
as core strategic assets that are essential to the business.

The team leads the advocacy of the company in the public policy space and interfaces with the
regulatory bodies. ERAG engages with the relevant stakeholders pertaining to its regulatory
performance, commitments and obligations. The team leads the company in its rate rebasing
exercises and submissions of reports to its regulators.

To deliver this mandate, ERAG is divided into two (2) subgroups, East Zone and Non-East Zone
Regulatory Affairs, and the following departments; Technical Regulation, Business Operations
and Customer Service Regulation, Records Management, Public Policy, and Corporate
Stakeholder Engagement.

SEC Form 17-A 19

 D. Office of the Chief Administrative Officer

1. The Corporate Human Resources Group (CHRG) is organized into six (6) core functions
which focus on talent attraction, development, engagement and retention, business partnership
and Human Resource (HR) Services functions:

a. Talent Management and Organization Design Department is responsible for

organization and job design, workforce planning, recruitment, succession, performance
management, and competency management.

b. People Development and Engagement Department drives programs that focus on

people experience and connection, capability development, communication and change
management.

c. Total Rewards Management Department handles the design and implementation of

rewards programs including employee recognition and planning and management of
manpower cost.

d. HR Business Partnership Department coaches line leaders and provides business-

focused HR solutions to stakeholders, involving the end-to-end employee life cycle, in close
coordination with the respective HR Centers of Excellence under Talent Management and
Organization Development, Total Rewards, People Engagement and Development, HR
Operations and Labor Relations.

e. HR Operations Management Department covers the three HR Services functions,

namely Payroll, Benefits and Human Resources Information System (HRIS), ensuring
timely and accurate delivery of HR services. It is the single-source-of-truth of the
organization for employee data and information.

f. Labor Relations maintains a professional and collaborative partnership between

Management, the employees, and the Union towards the attainment of corporate goals and
objectives under an atmosphere of sustained industrial peace.

2. The Corporate Information Technology Group (CITG) is responsible for providing

Information Technology Solutions and Operations for the Enterprise. CITG’s goal is to enable
and secure digital solutions for the business to drive customer engagement and operational
efficiency. It is responsible for the following functions - IT Digital Platforms and Solutions,
Infrastructure Planning and Operations, Information Security and Data Privacy, and IT Service
Delivery and Governance.

a. The Digital Platforms and Solutions Department is responsible for the solutions
architecture and roadmap. It is in charge of identifying, designing, and implementing new
technology solutions and major upgrades/enhancements, in alignment with the business
and IT roadmap. It is also responsible for application and platform management of existing
systems.

b. The IT Infrastructure Services Department looks after the infrastructure planning and
design, infrastructure deployment, and operations of all IT infrastructure and user support
services. It is in charge of identifying, designing, and delivering infrastructure solutions, in
alignment with the business and IT roadmap. IT Operations is in-charge of Data Center,
Network, Disaster Recovery, Endpoint Support and 1st level user support.

c. The Information Security, Risk and Compliance Department is in charge of developing

and enforcing the IT risk and security strategies, policies, standards, procedures, systems,
and awareness program, and ensuring compliance with relevant information security
standards, including data privacy compliance. It also implements and maintains technical
and procedural controls to protect MWC information assets.

SEC Form 17-A 20

 d. The IT Service Delivery Governance Department is responsible for IT planning, financial
planning, performance, and Service Level Agreement (SLA) management, and resource
management. It also handles the program management office and governs all IT services
to meet service levels and customer satisfaction.

3. The Corporate Communication Affairs Group (CCAG) is responsible for creating consistent
corporate messaging through various advocacies and communication initiatives utilizing
appropriate communication platforms that are aligned with the Group’s objectives to enhance
its image and reputation and effectively connect with customers and various stakeholders. The
group is composed of two (2) departments: The Advocacy and Research Department, and the
Corporate Communications Department.

a. The Advocacy and Research Department handles the Group’s advocacies which include
the ‘Lakbayan’ or Water Trail program as the Group’s information, education and
communication program on water and wastewater appreciation. The department also leads
‘SALiN: Lakbayan para sa mga Guro,’ a reinforcement and extension of the Lakbayan
focusing on educators as primary instruments of change, in partnership with the Department
of Education. It also conducts environmental advocacy programs such as ‘Toka Toka,’ the
country’s first and only environmental movement focused on wastewater management, and
spearheads campaigns on responsible use of water, drinking water from the tap, and other
sustainability advocacies.
The department leads the planning and mounting of three main environmental events to
celebrate World Water Day, Earth Day (Lakbay Kalikasan), and Arbor Day on an annual
basis. At the same time, it is responsible for building and differentiating the Manila Water
brand through strategic communications research and development, and visual standards
management.

b. The Corporate Communications Department handles the execution of the Group’s

strategic, tactical, and crisis communication programs through publicity, new media, events
and other stakeholder communication services. The department oversees all Group
publicity in different media platforms (TV, radio, print and digital), as well as media planning,
relations and engagement. It is also responsible for ensuring a well-informed workforce
through the development and implementation of relevant internal communications. Lastly,
it handles the company’s digital media platforms on social media and the web.

4. The Corporate Procurement Group (CPG) provides procurement planning, sourcing,

procurement, contract development, vendor management and importation services across the
Group. It also employs strategic sourcing and category management approach to adapt to
changing market conditions and address the growing needs of the business. The group is
composed of seven (7) departments, namely:

a. The East Zone and Non-East Zone Business Units Procurement Department
ensures timely procurement of goods and services, including implementation of innovative
sourcing strategies for diversified and complex requirements of the business units to
support local and regional requirements and growth within the East Zone and the Philippine
subsidiaries.

b. The Category Management Department develops, oversees, and ensures the

effectiveness of the overall procurement strategy of goods and/or services that will deliver
significant value from the supply chain and increase the Company's profitability and
sustainable growth. Category Management is further divided into three (3) departments
namely: (1) Construction and Capital Equipment; (2) Chemicals and Network
Materials; and (3) IT and Corporate Requirements.

c. The Vendor Sourcing and Support Department ensures that the company has a quality
and sufficient pool of accredited bidders in all vendor categories through an effective end-
to-end accreditation process and performance management system. The department also
maintains the integrity and accuracy of the vendor master data in SAP. The department is
also responsible for processing importation activities for East Zone and Non-East Zone
BUs.

SEC Form 17-A 21

 d. The CPG Support Department assists the Group in terms of policy and process
improvement, compliance, data management, system transformation, contract
management document controllership and other special assignments.

5. The Corporate Planning and Transformation Department supports top management in

charting the strategic roadmap of the Group and in aligning the execution of enterprise programs
and initiatives. This support is extended to the rest of the organization through the provision of
relevant market and industry information, coupled with the prioritization and alignment of
strategic initiatives. Equally important, the department leads execution and implementation of
enterprise transformation programs by facilitating business unit inter-dependencies as well as
oversight of enterprise-wide Performance Management System.

E. The Corporate Finance Group

The Corporate Finance Group (CFG) is headed by the Company’s Chief Finance Officer (CFO)
and Treasurer. The Group is composed of the following divisions, namely – Group Controllership
Division, Concession Finance, Investor Relations, Treasury and Insurance Management,
Strategic Financial Management, Tax Management and MWPV Finance Group.

1. The Group Controllership Division is composed of the following departments: Financial

Accounting, Financial Planning and Business Partnering, Accounts Payable, CAPEX
Accounting and Control and MWAP Finance. The division provides financial accounting,
statutory and management reporting, controllership, and financial planning support services to
the Group. The department also provides CAPEX accounting and reporting, and accounts
payable support services to the Company.

a. The Financial Accounting Department maintains and safeguards the integrity of the
Group's computerized accounting system, books of accounts and processes.
The department's primary objective is to ensure the preparation of accurate and timely
financial reports for the purpose of providing management, regulators, and other
stakeholders with financial information reflective of the Company and the Group's true
financial performance and condition. The department also ensures proper and timely
consolidation of reports from EZ and NEZ business units needed for the preparation of
financial reports. The department further ensures the consistent application of relevant
accounting standards, policies, rules, and regulations aimed at the continuous improvement
of its processes.

b. The Financial Planning and Business Partnering Department provides analysis and
reporting of the financial and operating performance of the Company and its Subsidiaries.
The department works closely with business units to provide support and analysis, to be a
trusted adviser, and to add value that will assist in decision making. The department is also
directly responsible for the overall budget preparation and monitoring of the Group. Critical
to the department’s success is their ability to drive budgets, targets, strategies and KPIs,
and communicate and deliver the information in a clear and user-friendly manner.

c. The Accounts Payable Department enables the Company to attain efficient and effective
operations through overall process management of payables transactions, resulting to
settlements which are accurate, timely, and compliant with governance and tax
requirements.

d. The CAPEX Accounting and Control maintains records of the acquisition, status, and
disposal/transfer of all fixed and movable assets of the Company. Furthermore, the
department provides appropriate safeguards on the capital disbursements of the Company
and ensures that payments are carried out in accordance with contractual requirements, as
well as consistent with internal policies and tax requirements. It is also responsible for the
financial monitoring of capital projects.

e. The MWAP Finance is responsible for the statutory reporting of the international
subsidiaries as well as the management reporting and analysis of performance of investee
companies. It also ensures compliance with the taxation and financial reporting
requirements of the regulatory agencies. Specifically, it handles controllership functions
SEC Form 17-A 22
 which include development and implementation of financial policies, as well as the
formulation of the budget and forward plans and monitoring the utilization of the budget.
The department also provides corporate finance support to new business development
activities and ensures the smooth and efficient operationalization of the finance and
governance function in new entities.

2. The Concession Finance Department ensures the provision of comprehensive financial

regulation and strategic tariff management & advisory services. It serves as the resource and
support for all regulatory finance work in the Enterprise, in partnership with Enterprise
Regulatory Affairs Group.

3. The Investor Relations Department supports top management in driving the organization’s
investor communication strategy through timely investor and market analysis, efficient
coordination of business/financial information and the effective development and delivery of key
messages. For this purpose, Investor Relations conducts regular briefings, meetings and
roadshows with shareholders, fund managers and analysts to keep stakeholders updated on
the financial and operating performance of the Company as well as on other relevant material
information.

4. The Treasury and Insurance Management Division is composed of two (2) departments,
namely the Treasury Department, and Insurance Management Department. The division is
responsible for the effective management of the cash resources and financing activities and the
development and implementation of insurance programs. The division also provides treasury
and insurance advisory services across the Group.
5.
a. The Treasury Department is responsible for the effective management of the Company’s
cash resources, including collections and disbursements, through efficient liquidity planning
and maximization of cash investments. It is also responsible for the capital raising activities
of the Group, while at the same time ensuring cost-efficient and timely closing of financing
transactions. The department also manages the Company’s concession fee obligations with
MWSS and ensures compliance with loan reportorial requirements and covenants. For new
businesses, the department provides strategic advisory in terms of financing strategies and
treasury operations, as well as support for subsidiaries’ banking requirements. In carrying
out its functions, the department maintains a sustainable and mutually beneficial
relationship with its lenders and banking partners.

b. The Insurance Management Department is responsible for developing optimal insurance

programs for the Group and for providing oversight on the insurance programs of the
subsidiaries, with the objective of making these programs cost-effective, risk-based, and
responsive to the Group’s needs.

6. The Strategic Financial Management Department is responsible for the overall review of the
Enterprise’s business portfolio from an investment perspective. It is responsible in crafting and
updating the investment criteria as well as implementing portfolio rebalancing, which may
include increase in investment or divestment of existing businesses. In line with the Company’s
strategy to expand domestically and internationally, the department also supports the business
development teams in investment assessment, transaction structuring and deal financing.

7. The Tax Management Department takes the lead in framing the enterprise tax strategy and
ensuring overall compliance with prevailing tax laws, regulations and jurisprudence. The
department oversees the tax operations of the enterprise to ensure timely, accurate and
complete tax compliance for all its business units. It is responsible for the tax efficiency and
planning initiatives, including providing technical advisory or guidance on pertinent issues,
deals, or transactions, identifying tax-efficient structure, and formulating tax policies and
guidelines for the enterprise. The department is also responsible for the overall tax advocacy
efforts for the enterprise on key tax issues and developments, including the management of
any tax audit or investigation, and securing relevant tax rulings and/or incentives from
concerned offices of the government.

SEC Form 17-A 23

 8. The MWPV Finance including Manila Water Infratech Solutions and Manila Water
Foundation, headed by the CFO for Philippines subsidiaries, leads in the overall management
of the financial activities of local subsidiaries of Manila Water Company Inc (MWCI) to ensure
alignment with MWCI’s governance principles. The Division ensures the accurate and timely
preparation of financial reports to assist top management in the decision-making process,
implementation of effective financial systems and controls and spearheads budget planning and
periodic review against plans to ensure that the corporate goals are met.
It is also responsible for supply chain, land acquisition and insurance requirements. Lastly, it is
responsible for building the capability of new businesses to be able to manage and perform all
finance related operations such as, but not limited to, accounting, treasury, policy development,
risk and tax management.

F. The Non-East Zone and International Businesses Group

The Non-East Zone and International Businesses Group focuses on replicating the successes of the
East Concession in underserved and unserved areas while ensuring organic growth and sustainable
operations within and outside the Philippines. Both groups leverage on existing capability, track record,
and government and institutional network to create value and strategically expand to new geographies
in the country, Southeast Asia, Middle East and other emerging markets.

The Manila Water Non-East Zone (NEZ), under Manila Water Philippine Ventures, extends its services
beyond the East Zone Concession, reaching businesses throughout the Philippines. Leveraging its
expertise honed in the East Zone and through its core subsidiaries-- Laguna Water, Clark Water, and
Boracay Water, NEZ strategically expands its reach. In 2016, NEZ entered into a strategic partnership
with ALI and formed its operating division, Estate Water. Over the years, NEZ has successfully
expanded its service offerings to other land developers (e.g. SM Development Corporation, currently
under Aqua Centro) and government agencies (e.g. Philippine Economic Zone Authority). In 2019, NEZ
reorganized Manila Water Technical Ventures, Inc. (MWTV) to handle Engineering, Construction
Management, and Consulting (EPC) functions for NEZ and its domestic subsidiaries, which it intends to
complement existing products and services of NEZ. In 2022, Manila Water Total Solutions (MWTS), the
entity that housed Manila Water’s Healthy Family business, was merged with MWTV to form the Manila
Water Infratech Solutions (MWIS), to be the subsidiary of MWPV handling EPC projects. NEZ also
entered into joint venture agreements, memorandum of agreements for franchises, septage
management agreements, asset purchase agreements, and bulk water supply projects with various
municipalities and cities in the country for the design, construction, rehabilitation, maintenance,
operation, financing, expansion and management of water supply system and sanitation facilities. In
North and Central Luzon, these are the partnerships forged with Metro Ilagan Water District, Calasiao
Water District, Bulakan, and Obando Water District, and in VisMin, these are the projects in Calbayog,
Cebu, and Tagum. These partnerships strengthen the Group’s position as the leading operator of
municipal and non-municipal water and used water facilities in the Philippines.

The International Business Group housed under MWAP serves as the vehicle for expansion outside the
Philippines. Since the company’s initial foray into the Southeast Asian market in 2008, the Group has
expanded Manila Water’s presence in Vietnam, Indonesia, Thailand, and Kingdom of Saudi Arabia.
By 2023, Manila Water remains to be the largest investor in the Vietnamese water sector through its
affiliates and associates, Kenh Dong Water Supply Joint Stock Company, Thu Duc Water B.O.O.
Corporation, Saigon Water Infrastructure Corporation, and Cu Chi Water Supply Sewerage Company
Limited. Manila Water also expanded its presence in Southeast Asia through its investments in Eastern
Water Resources Development and Management PLC in Thailand and PT Sarana Tirta Ungaran in
Indonesia. With its aspiration of becoming a global water company, Manila Water further expanded its
portfolio outside the Southeast Asia and signed Management, Operation and Maintenance Contracts
(MOMC) through International Water Partners and International Water Partners the Second in the
Kingdom of Saudi Arabia.

The Non-East Zone and International Business Group continue to aggressively pursue growth
opportunities based on the Group’s investment criteria and are committed in providing our customers
across the globe with world-class water and wastewater services, while protecting the environment and
promoting sustainability.

SEC Form 17-A 24

Water Operations (East Zone Concession)

The whole water supply chain generally involves the abstraction of water from water sources, treated
subsequently through the water treatment facilities, and conveyed and distributed to customers through the
Company’s network of pipelines, reservoirs, and pump stations. In 2023, the East Zone Concession supplied
an average of 1,640.76 million liters per day (MLD) of clean and potable water to its customers and billed a
corresponding volume of 516.40 million cubic meters (MCM) for the whole year. This is equivalent to a total
of around 1.10 million water service connections or approximately 7.65 million served population.

Water Source
Under the CA, MWSS is responsible for the supply of raw water to the Manila Concession’s distribution
system and is required to supply to the Company a maximum quantity of water, currently pegged at
1,600.00 MLD. In case MWSS fails to supply the required quantity, the Company is required to distribute
available water equitably.

The Company substantially relies on surface water coming from the Angat River System. The principal river,
Angat River, originates from the Sierra Madre Mountains. It has three major tributaries namely the Talaguio,
Catmon, and Matulid Rivers. The surface water from these sources is collected and impounded through the
Angat Dam, conveyed subsequently through the Ipo Dam where water is diverted through tunnels to Bicti,
and from there, to aqueducts going to La Mesa.

Meanwhile, the Company's Treatment Plant in Cardona, Rizal and East Bay Phase 1 Treatment Plant in
Pakil, Laguna obtains water from Laguna Lake. East Bay Phase 1 started its process proving and supply to
areas of Jala-Jala, Rizal last October 2023.

With the completion of the Tayabasan Weir as part of the Wawa Raw Water Offtake Agreement, the new
infrastructure began supplying raw water to the Calawis Water Treatment Plant. Calawis Treatment Plant
officially began its process proving last June 2023 and initially supplied to parts of Antipolo City, Rizal.

To date, ground-source water (deep wells) supply increased (vs 2022 at 16.5 MLD) to an average of
30.0 MLD with a total capacity of 118.0 MLD as of December 31, 2023. These deep wells are part of the
Company’s contingency plan to address water shortage. These wells are a combination of old rehabilitated
wells scattered across the East Zone and new drilled wells situated near the Company’s reservoirs.

Water Treatment
Raw water is stored at the La Mesa reservoir located immediately downstream of the Novaliches portal
interconnection before going to the three major treatment plants – two (2) of which are in Balara, located
seven (7) kilometers away from the reservoir, with the third located at the northeast section of La Mesa
Dam.

The Balara treatment plants have a total design capacity of 1,600.00 MLD and consist of two (2) separate
treatment systems: Balara Treatment Plant 1 (BTP1) which was commissioned in 1935 having a design
capacity of 470.00 MLD and Balara Treatment Plant 2 (BTP2) which was commissioned in 1958 with another
1,130.00 MLD.

The East La Mesa Treatment Plant (ELMTP), on the other hand, is in Payatas, Quezon City. Relatively new
to the system, the facility began its operation in June 2012. It has a capacity of treating 150 MLD of water.
It supplies water to far-flung expansion areas in the Rizal province (Towns of San Mateo and Rodriguez),
improving the supply balance of the entire network.

These treatment plants use a conventional treatment process which involves coagulation, flocculation,
sedimentation, filtration, and chlorination. The facilities consume higher quantities of chemicals during the
rainy season when the turbidity of raw water increases, which consequentially leads to increased costs for
treatment operations.

The Company’s Treatment Plant in Cardona became operational in March 2019 and as of December 31,
2023 provides 100.00 MLD of water to the towns of Taytay, Angono, Binangonan, Cardona, Baras, Pililia,
and Jala-Jala in the Rizal province. The Cardona Water Treatment Plant uses several advanced technical
processes to ensure potable water given that it extracts raw water from Laguna Lake.

SEC Form 17-A 25

Based on raw water data, raw water characteristics are “difficult” with high variation and fluctuations in the
various parameters like salinity, organic matters and turbidity, making the water treatment process more
complex than conventional surface water treatment. The techniques used include pre-ozonation, Actiflo®
settlers and Actiflo® CARB, dual media filters, reverse osmosis and post chlorination. It also includes raw
water intake structures, raw water pump station, waste treatment facility, process optimization research
facility as well as storage reservoir and distribution pipelines.

Another treatment plant was constructed and put into operation in June 2019 to cater to the needs of the
upper barangays of Quezon City affected by the water supply deficit experienced in the first quarter of that
same year. Said facility is the Luzon Water Treatment Plant which gets water from AQ2, one of the
aqueducts from La Mesa Dam going to the Balara Treatment Plants. The treatment process used is an
ultrafiltration (UF) system, which is different from the conventional treatment employed by BTP1, BTP2, and
ELMTP. Ultrafiltration is a type of membrane filtration process wherein pressure-driven raw water passes
through a semi-permeable membrane, of very small pore size, enough to separate suspended solids,
endotoxins, bacteria, viruses, and other pathogens. The filtered water results in a significant removal of
turbidity; thus, it has high purity and low silt density.

Newly energized treatment plants operated this 2023 are Calawis Water Treatment Plant (June 2023) and
East Bay Water Treatment Plant (October 2023).

• Calawis Water Treatment Plant with rated capacity of 80.00 MLD is situated in Sitio Apia, Brgy.
Calawis in the city of Antipolo, Rizal province. The plant was built along the rural area between the
mountain ranges of Sierra Madre with a land area of 3.5 square hectares. It is equipped with compact
conventional water treatment system using UCD (Degremont Compact Unit) for its treatment process.
Raw water from the Tayabasan River is directed to the raw water blending tanks, wherein it will
undergo the treatment process through the four (4) streams of UCD lamellar modules for coagulation,
flocculation, and pressurized filtration. Filtered water will then be delivered to the treated water
reservoir for disinfection. Calawis WTP currently provides clean potable water to existing and
expansion areas of Antipolo City, Rizal.

• East Bay Water Treatment Plant (Phase 1) is in the Pakil Lake area, province of Laguna, east of
Manila, with a production design capacity of 50.00 MLD. The plant consists of ozonation, dissolved
air flotation (DAF), and two stages of filtration, with the added feature of reverse osmosis technology
for times of the year when the lake has high salinity. East Bay Phase 1 TP officially supplied potable
water to major parts of Jala-Jala and Baras, Rizal Province. Ongoing activities for maximization of the
50 MLD production are being implemented, both on the treatment facility and distribution side to
extend water supply to additional areas of Binangonan, Cardona, Angono, Taytay, and some parts of
Pasig City.

Water Distribution
After treatment, water is conveyed through the Company's network of pipelines, pumping stations and
reservoirs, and mini boosters to bring potable water to its customers conveniently at set pressure standards.
As of December 31, 2023, 98.71% percent of currently served areas have 24/7 water supply pressure of 7
psi and above.

As of December 31, 2023, the Company's network consisted of approximately 5,453 km of total pipeline,
comprised of primary, secondary, and tertiary mains ranging in diameter from 50 to 2,200 mm. The pipes
are made of steel, cast iron, high-density polyethylene (HDPE), polyvinyl chloride (PVC) and other materials.

Pumping stations also play a critical part in water distribution. Approximately 60% of the treated water
supplied by the Company is pumped to ensure pressure compliance, especially at highly elevated areas.
As of December 31, 2023, the Company operates around thirty (30) pumping stations with a combined
maximum pumping capacity of 3,100 MLD and an average plant output of around 1,000 MLD. Most of the
major pumping stations have reservoirs with a combined capacity of almost 575 MLD.

The Company operates thirty (30) line boosters to reach the fringe areas, which are quite distant from the
treatment plants and pumping stations. At the height of the water supply shortage in 2019, a total of sixty-
four (64) line boosters were operated by the Company. Line boosters are small facilities aimed at
augmenting water supply in areas which are not sufficiently supplied by the regular operations of the pump
stations.

SEC Form 17-A 26

Non-Revenue Water (NRW)
NRW refers to the volume of water lost in the Company’s distribution system due to leakage, pilferage,
illegal connections, and metering errors. As determined by the MWSS RO, NRW is calculated as the
percentage of water lost against the net volume of water supplied by the Company.

Over the years, the Company has made remarkable strides in managing its NRW. The concession started
with a high system loss of 63% in 1997. In 2010, its NRW level was reduced to and maintained at just 11%.
Year-end figure for 2023 was recorded at 13.50%. Continuous improvements of water supply management
coupled with massive pipe replacement projects were done to maintain and improve the reduction of
Company’s system losses.

Water Quality
Raw water quality from Angat Dam, Bicti, Ipo Dam and La Mesa Dam, as well as the Laguna Lake, is
regularly tested by the laboratory to assess any changes to raw water quality over time. This source
monitoring provides early warning of potential raw water quality problems in terms of Microbiological and
Physico-chemical (Inorganic and Organic constituents). Aside from source monitoring, routine monitoring of
raw water at the treatment plant inlet is conducted on a daily to weekly basis for operational control to
manage treatment process operation effectively and efficiently. This routine monitoring includes
Microbiological and selected Physio-chemical parameters.

The Company’s water quality consistently meets the Philippine National Standards for Drinking Water
(PNSDW) set by the DOH and based on World Health Organization (WHO) water quality guidelines. To
ensure that water supplied at the tap is safe to drink, stringent water quality monitoring is also continuously
implemented at the treatment plants and throughout the distribution system. From the results of analysis
conducted, water quality has always been maintained compliant based on the Microbiological, Physical and
Chemical standards at the customers taps. From 2020 to 2023, the Company surpassed the required tests
for Microbiological and Physico-chemical quality at the treatment plant outlet, facilities, and reservoirs.

Continuous monitoring of water quality indicators throughout the network is also conducted at the customers
taps, with more than 40,000 tests annually conducted from samples collected at the 924
pre-identified sampling points located at various influence areas. Regulatory sampling points are designated
at strategic locations across the distribution system – where sampling is conducted daily by the PNSDW
Company. The MWSS RO, Local Government Units (LGUs), and DOH likewise collect random samples
from these designated sampling points and have them tested by third-party laboratories and designated
government laboratories. The Company’s water samples scored an average water quality compliance of
100%, surpassing the threshold of 95% set in the PNSDW. In 1997, when the concession began, only 87%
of water samples complied with these quality standards. The Company’s rating is based on a series of tests
conducted regularly at these points within the East Zone.

The samples collected are tested at Manila Water’s own Laboratory, which is accredited by the DOH and a
recognized Department of Environment and Natural Resources – Environmental Management Bureau
(DENR-EMB) testing laboratory. The Laboratory has also gained recognition as an ISO/IEC 17025:2005
accredited laboratory, granted by the Philippine Accreditation Office, Department of Trade and Industry
(DTI). These recognition and accreditations subject the laboratory to regular surveillance audits.
Consistently, the Laboratory has gained excellent and satisfactory ratings on most proficiency testing
programs it has participated through local and international proficiency testing program providers. In 2010,
the Laboratory also gained IMS certifications for ISO 9001:2008, ISO 14001:2004 and OSHAS 18001:2007.
These recognitions have gained the confidence of the MWSS RO, DOH, and DENR in the tests results that
are regularly provided to them.

Wastewater Operations (East Zone Concession)

The Company is responsible for the provision of wastewater services to its customers through construction,
operation, and maintenance of sewerage systems, desludging vacuum tankers, and treatment facilities.
Wastewater is collected and transported to treatment facilities through available sewerage systems, while
in areas where there are no sewerage systems present, a program of regular desludging of septic tanks,
per barangay, once in every three to five years, are being conducted.

As of December 31, 2023, Manila Water operates and maintains 24 Sewage Treatment Plants, 2 Septage
Treatment Plants, 469 linear kilometers of Sewer Network, 71 Lift/Pump Stations, 293 Drainage Interceptor
Boxes, and 64 Desludging Vacuum Tankers.
SEC Form 17-A 27
The Sewage Treatment Plants have a total capacity of 391 MLD, while the Septage Treatment Plants have
a total capacity of 1.4 MLD. Three of the treatment facilities are already compliant with DENR DAO 2016-
08 and 2021-19 General Effluent Standards, while the rest are still on-going upgrades. 30.5% of Domestic
Customers or an equivalent population of 2.3 Million in 294,635 Sewer Connections are served by Sewerage
Systems. The remaining 69.5% of Domestic Customers or an equivalent population of 5.4 Million Customers
are being offered with Regular Desludging of Septic Tanks spread out in a 5-year Cycle, with an annual
average of 66% of the Domestic Customers offered availing the service. In 2023 alone, 117,075 Septic
Tanks were desludged.

Offering of wastewater services – connection to a sewer line and desludging of septic tanks (for domestic
customers, without additional charge to the water bill), are mainly done through Information, Education and
Communication (IEC) Campaigns per barangay under the “Toka-Toka” Environmental Advocacy of the
Company. Customers of the East Zone are educated about the importance of managing liquid waste
disposal in their respective households and/or establishments, and its role in protecting public health and
preserve the environment. These campaigns are done in collaboration with National Government Agencies
(NGAs) and Local Government Units (LGUs), as part of the programs and projects of the Continuing
Supreme Court Mandamus on the Clean-up and Rehabilitation of Manila Bay.

Since 1997, the Company has significantly improved and expanded the wastewater infrastructure in the
East Zone originally operated and maintained by the MWSS. The Company started with the following
facilities that were turned-over by the MWSS at the start of the concession:

(1) The Ayala Sewer System and Magallanes Sewage Treatment Plant (STP) in Magallanes Village,
Makati City, which was then the largest treatment facility in the country with a 40 Million Liters per
Day (MLD) capacity, serving the Makati Central Business District and the Exclusive Gated
Communities surrounding it,
(2) The Karangalan Bio-module and Sewer Network in Karangalan Village, Cainta, Rizal serving a
portion of the village,
(3) The Imhoff Tank and Sewer Network in Phil-Am Village, Quezon City, and
(4) Thirty-one Sewer Network Systems and Communal Septic Tanks (CSTs) in various Medium and
High-rise Housing Projects of the National Housing Authority (NHA) and the Bases and
Conversion Development Authority (BCDA) across the East Zone, serving approximately 19,000
households then.

In 2001, the Company constructed two (2) Pilot Package Treatment Plants employing Conventional
Activated Sludge Treatment Process to determine their social, financial, and environmental feasibilities. The
0.16 MLD Valle Verde STP in Valle Verde Homes, Pasig City, serving approximately 100 households and
the 0.4 MLD Makati Pabahay STP, which serves some 400 households of the housing project in Barangay
Rizal, Makati City and the approximately 4,000 students and employees of Rizal Elementary School. The
treatment process was employed in the succeeding facilities constructed by the company.

With the success of these two (2) Pilot Package Treatment Plants, the Company implemented the Manila
Second Sewerage Project (MSSP) funded by World Bank. Under the MSSP, twenty-six (26) STPs including
Lift/Pump Stations were constructed across the East Zone. This included the upgrade of turned-over
facilities by the MWSS, construction of the UP Sewage Treatment Plant in the University of the Philippines
Diliman Campus, and the take-over and upgrade of the Diego Silang Sewage Treatment Plant in
Pamayanang Diego Silang, Brgy. Ususan, Taguig City. The total treatment capacity doubled to 80 MLD
when MSSP was completed.

As part of its commitment to expand this service, the Manila Third Sewerage Project (MTSP) was
conceptualized, and implemented from 2007 to 2014. The MTSP is a follow-up to the MSSP and has the
ultimate objective of improving wastewater management in the East Zone. It was developed as a means of
achieving the Company’s wastewater service obligation targets. It consists of the construction of two
Septage Treatment Plants (SpTPs), six Sewage Treatment Plants (two of which were upgraded from the
turned-over Communal Septic Tanks), and four Combined Sewer and Drainage Systems in several
locations across the East Zone. It was in this project that Combined Sewer and Drainage Systems was first
implemented. The MTSP increased the treatment capacity to 135 MLD.

SEC Form 17-A 28

In 2016 to 2019, the Sewerage Systems of Marikina North (Combined Sewer-Drainage), Liwasan ng
Kagitingan at Kalikasan (LKK, Separate), and North and South Pasig (Ilugin, Combined Sewer-Drainage)
became operational. These three facilities have a combined treatment capacity of 275 MLD, and are by far,
the three biggest STPs of the Company. This brought the total number of treatment facilities to 41 and the
treatment capacity to 410 MLD, Another remarkable feature of these three STPs is that they already employ
the Sequencing Batch Reactor (SBR) treatment technology, which is well-known to have a low land footprint
that is favorable to Metro Manila that has land availability issues.

In 2016, the DENR issued Department Administrative Order (DAO) 2016-08, which updated the General
Effluent Standards (GES) of 1990 (DENR DAO 1990-35). New parameters were included, specific
applicable parameters were specified per industry, and the limits per parameter were updated.
Establishments may apply for a Grace Period to comply with a maximum period of five years from the
effectivity date of DAO 2016-08, through submission and approval of a Compliance Action Plan (CAP).

For the facilities operated by Manila Water, which are discharging to bodies of water categorized as Class
C, only the parameters Biochemical Oxygen Demand (BOD) and Oil and Grease retained with the same
limits, while MBAS (Surfactants) retained but specified with less stringent limits. New parameters such as
Fecal Coliform, Ammonia, Nitrates, and Phosphates were added. With these changes, Manila Water’s
treatment facilities necessitated upgrades in infrastructure and equipment, to be able to treat these new
parameters. Additional land/space and operating expenditures such as power and chemicals are also
needed to treat these pollutants.

In October 2018, Manila Water received the DENR Environmental Management Bureau – National Capital
Region (EMB-NCR)’s approval of the CAP, allowing five (5) facilities under its jurisdiction to do the
necessary upgrades for five years (2018 to 2023) from its approval. However, on 2 March 2021, the DENR
issued DENR-EMB Memorandum Circular 2021-01 effectively accelerating the deadline for BNR
compliance to 18 June 2021. On the other hand, the Laguna Lake Development Authority (LLDA), through
its Memorandum 2017-05, approved the CAP of the 36 facilities under its jurisdiction last July 2020, which
have the end of grace periods granted scattered from January 2023 to March 2028. Last 30 June 2021,
DAO 2021-19: Updated Water Quality Guidelines (WQG) and General Effluent Standards (GES) for
Selected Parameters was issued, which relaxed the limits for Ammonia and Phosphates. This helped in the
reduction of capital and operational expenditures, however the amount for these remains high.

The following solutions were implemented to comply with the new GES, in coordination and collaboration
with MWSS, DENR, LLDA, and LGUs:

(1) Operational Adjustments – optimization of the existing design treatment capacities of facilities
through adjustment of equipment operations and additional dosing of chemicals.
(2) Upgrade/Retrofit – construction of additional process tanks and/or installation of additional
equipment.
(3) Diversion – diversion of wastewater flows through pumping (conversion of small treatment facilities
to pumping stations) or hauling and transport of wastewater through desludging vacuum tankers.

These decreased the number of treatment facilities from 41 to 26, and the treatment capacity from 410 to
391 MLD.

For the Years 2023 to 2027, Projects such as Pinugay Septage Treatment Plant, Hinulugang Taktak
Sewerage System, San Mateo-Rodriguez Sewerage System, QC East Sewerage System, and
Mandaluyong West-San Juan South-Quezon City South Sewerage System are on-going, and when
completed, will significantly increase the Company’s Sewer Service Coverage, on-track to expand and
maximize the availability of sewerage services in the East Zone.

SEC Form 17-A 29

Domestic New Business and Investments

The Group further brings its expertise in water and used water services outside the Manila Concession
through partnerships with private companies, local water districts and local government units of major cities
and municipalities in the Philippines, and emerging cities in Southeast Asia. The Group offers value-added
services across the water value chain, from source development to used water and sanitation services
anchored on Public-Private Partnership (PPP) and Business-to-Business (B2B) models.

The Group also executes several contracts related to the water business such as Performance-Based
Contracts (PBCs) for NRW reduction, Bulk Water Supply arrangements, Property Management and
Operation (Estate Water) models, Lease Agreements, and Operations and Maintenance Contracts.
Furthermore, Merger and Acquisition (M&A) is extensively and aggressively used to support growth
especially in the Southeast Asian Region. Towards this end, the Manila Water Group has signed joint
venture agreements and/or investment agreements with local and international partners in the last few
years.

Laguna AAAWater Corporation’s (Laguna Water) Concession Agreement with the Provincial
Government of Laguna (PGL)

Laguna Water is a Joint Venture (JV) between the PGL and MWPV with shareholdings of 30% and 70%,
respectively.

On April 9, 2002, Laguna Water and PGL entered into a Concession Agreement which granted Laguna
Water (as contractor and as agent for the exercise of certain rights in Laguna) the sole and exclusive right
and discretion during the concession period to manage, occupy, operate, repair, maintain, decommission,
and refurbish the identified facilities required to provide water services to specific areas for an operational
period of 25 years (the concession period).

In December 2013, Laguna Water signed an Asset Purchase Agreement with the Laguna Technopark, Inc.
(LTI) for the acquisition of the water and sewerage system of LTI in Laguna Technopark, a premier industrial
park located in Sta. Rosa and Binan, Laguna, which houses the region’s largest and more successful light
to medium non-polluting industries.

On June 30, 2015, Laguna Water and the PGL signed an amendment to the concession agreement which
expands the concession area to cover all cities and municipalities in the province of Laguna, as well as the
service obligation to include the provision of sanitation services for covered customers through the
implementation of septage management program. Furthermore, the concession period’s commencement
date was amended to have commenced on September 30, 2010 and shall end on September 30, 2035.

On August 23, 2017, the Sangguniang Bayan of Victoria, Laguna has approved the inclusion of its
municipality within the service area of Laguna Water. The project is being implemented in three (3) phases
and phase 1 includes 3 Poblacion barangays with the first water commencing last March 2020.

On July 12, 2018, Laguna Water received the Notice of Award from Pagsanjan Water District (PAGWAD)
for the implementation of the contractual JV project for the design, improvement, upgrade, rehabilitation,
and expansion of water supply and implementation of sanitation services including the financing and
construction of such facilities and infrastructure in the service area of the PAGWAD, and the management,
operation, and maintenance of such water supply and sanitation facilities and the provision of the services
necessary or incidental thereto in the PAGWAD’s service area.

On December 11, 2018, Laguna Water entered into four (4) Asset Purchase Agreements (APAs) with
Extraordinary Development Corporate Group (EDCG)’s subsidiaries to acquire the subsidiaries’ assets
related to or used in its water service provision operations in Biñan, Laguna. The APAs are with the following
EDCG subsidiaries, namely, Earth Aspire Corporation, Earth Prosper Corporation, Earth and Style
Corporation, and Extraordinary Development Corp.

On January 21, 2019, Laguna Water entered into a Contractual Joint Venture with PAGWAD for the design,
improvement, upgrade, rehabilitation, and expansion of water supply facilities and implementation of
sanitation services including the financing and construction of such facilities and infrastructure for the
Service Area of PAGWAD, and the management, operation and maintenance of such water supply and

SEC Form 17-A 30

sanitation facilities and the provision of the services necessary or incidental thereto in PAGWAD’s Service
Area. The agreement was executed on March 1, 2019.

Boracay Water Island Water Company’s (Boracay Water) Concession Agreement with Tourism
Infrastructure and Enterprise Zone Authority (TIEZA)

Boracay Water is a JV between Manila Water and TIEZA which is formerly the Philippine Tourism Authority
(PTA), with shareholdings of 80% and 20%, respectively.

On December 17, 2009, Boracay Water entered into a concession agreement with TIEZA. The concession
agreement grants Boracay Water the sole right to manage, operate, repair, decommission, and refurbish all
fixed and movable assets (except certain retained assets) required to provide water delivery and sewerage
services to the entire Boracay Island for a period of twenty-five (25) years commencing on January 1, 2010
until December 31, 2034.

Boracay Water was able to complete the construction of 5 MLD Manocmanoc STP in 2019 and complied
with the new mandate of the DAO 2021-19 on June 15, 2021. The treated used water or effluent is
consistently compliant with the DENR Class SB Standards despite more stringent requirements.

Clark Water Corporation’s (Clark Water) Concession Agreement with Clark Development
Corporation (CDC)

Clark Water is the water and used water concessionaire of CDC in the Clark Freeport Zone (CFZ) in
Angeles, Pampanga. By virtue of an amendment agreement executed on August 15, 2014, the 25-year
concession agreement with CDC was extended by another 15 years until October 1, 2040. In November
2011, Manila Water acquired 100% ownership of Clark Water through a Share Sale and Purchase
Agreement with Veolia Water Philippines, Inc. and Philippine Water Holdings, Inc.

Manila Water Consortium, Inc.’s (MW Consortium) Agreement with the Provincial Government of
Cebu (PGC)

On March 21, 2012, MW Consortium (formerly, Northern Waterworks and Rivers of Cebu, Inc.) a consortium
of Manila Water (51%), MetroPac Water Investments Corporation (39%) and Vicsal Development
Corporation (10%), signed a Joint Investment Agreement (JIA) with the PGC for the formation of a joint
venture company.

Under the JIA, the parties agreed to develop and operate a bulk water supply system that will supply 35
million liters of water per day to target areas in the province of Cebu with the joint venture company serving
as a bulk water supplier. The term of the agreement is 30 years starting March 2012 and renewable for
another 25 years. MW Consortium and the PGC incorporated Cebu Manila Water Development, Inc. (Cebu
Water) with an ownership of 51% and 49%, respectively, pursuant to the JIA.

On December 18, 2013, Cebu Water signed a 20-year Bulk Water Supply Contract with the Metropolitan
Cebu Water District for the supply of 18 MLD of bulk water for the first year and 35 MLD of bulk water for
years two to 20.

On February 3, 2020, MW Consortium and the PGC signed the Terms of Reference for the interim protocol
between both parties pending Settlement with Finality of the Dispute between MW Consortium and PGC.

On March 29, 2022, MW Consortium and the PGC signed a Settlement Agreement that will put an end to
the dispute.

On May 12, 2022, MWPV purchased the 32.60% (107,601,639 common shares) share of Metro Pacific
Water Investments Corporation Inc. in MW Consortium for P107.60 million.

On October 3, 2023, Cebu Water issued a termination notice for the bulk water supply and
purchase agreement between MCWD and Cebu Water which became effective December 1, 2023.
From December 1, 2023 to January 31, 2024, Cebu Water continued to supply bulk water to MWCD through
PGC invoking Section 16 of the Local Government Code or the general welfare clause to solve the problem
on loss of water supply.

SEC Form 17-A 31

On January 17, 2024, MWPVI submitted all requirements on the bidding conducted by MCWD for the new
bulk water supply. MWPVI will deliver water to MCWD by leasing the facilities of Cebu Water.

On January 25, 2024, a Notice of Award was issued by MCWD to MWPVI on the supply and delivery of
potable bulk water.

On January 30, 2024, MWPVI and MCWD signed a ten (10)-year Bulk Water Supply Contract for the supply
of thirty (30) million liters per day of water. MWPVI delivered its initial thirty (30) million liters per day bulk
water supply to MCWD on February 1, 2024.

NRW Reduction Activities in Zamboanga City

On December 19, 2014, Manila Water received a notice from Zamboanga City Water District (ZCWD)
awarding the project for NRW reduction in Zamboanga City. On January 30, 2015, Manila Water and ZCWD
signed and executed a JVA in relation to the NRW reduction project in Zamboanga City. On April 10, 2015,
Manila Water and ZCWD incorporated Zamboanga Water Company, Inc. (Zamboanga Water) with an
ownership of 70% and 30%, respectively, to implement the NRW project.

On June 2, 2015, Zamboanga Water entered into an NRW Reduction Service Agreement (NRWRSA) with
ZCWD. Under the NRWRSA, ZCWD grants Zamboanga Water the right to implement Network
Restructuring and NRW Reduction Programs for ZCWD’s water distribution system.

On July 2, 2018, through a Deed of Absolute Sale of Shares, the Company sold to MWPV its shares in
Zamboanga Water.

On April 3, 2020, Zamboanga Water received a letter, dated April 1, 2020, from the Zamboanga City Water
District (ZCWD), requesting for the termination of the NRWRSA. In the letter, ZCWD indicated that the
erratic supply of water due to the recurrent dry spell and El Niño phenomenon affecting the District Metered
Areas (DMAs) established by Zamboanga Water has rendered the NRWRSA impractical and unworkable,
and thus, in the interest of fiscal responsibility and sound management of government funds, ZCWD
requested for the termination of the NRWRSA.

On April 30, 2020, Zamboanga Water approved the termination of the NRWRSA. Such termination,
however, was without prejudice to Zamboanga Water’s claims against ZCWD and remedies under the
NRWRSA.

On September 16, 2020, Zamboanga Water filed a Notice of Arbitration with the Philippine Dispute
Resolution Center, Inc. (PDRCI), which is the arbitral body designated in the NRWRSA.

On August 8, 2022, the Arbitral Tribunal under the Philippine Dispute Resolution Center, Inc. has issued
the final decision in favor of Zamboanga Water related to its claims against Zamboanga City Water District
for unpaid fixed fees and performance fees, interest, and other claims. Zamboanga City Water District was
ordered to pay P38.72 million for the outstanding fixed fees and performance fees plus interest from the
time of the finality of the decision, as well as future performance fees and others as stated in the final
decision.

Bulk Water Supply Agreement between Tagum Water Company (Tagum Water) and Tagum City
Water District (TWD)

On July 28, 2015, TWD awarded the Tagum City Bulk Water Supply Project to Davao del Norte Water
Infrastructure Company, Inc. (Davao Water), a consortium of Manila Water and iWater, Inc.

On October 15, 2015, Davao Water has signed and executed a JVA with TWD. The JVA governs the
relationship of Davao Water and TWD as joint venture partners in the Tagum Bulk Water Project. Pursuant
to the JVA, Davao Water and the TWD incorporated a joint venture company, namely, Tagum Water, which
shall implement the Tagum Bulk Water Project for 15 years from the Operations Start Date as defined in
the JVA. Davao Water owns 90.00% while TWD owns 10.00% of Tagum Water’s outstanding capital stock.

Tagum Water was registered with the SEC on December 15, 2015 and its primary purpose is to develop,
construct, operate and maintain the bulk water supply facilities, including the development of raw surface
water sources, water treatment, delivery and sale of treated bulk water exclusively to TWD.
SEC Form 17-A 32
On February 26, 2016, Tagum Water and TWD signed and executed a Bulk Water Sales and Purchase
Agreement for the supply of bulk water to TWD for a period of 15 years from the Operations start date. On
May 23, 2018, through a Deed of Absolute Sale of Shares, the Company sold to MWPV its shares in Davao
Water.

On March 28, 2017 TWD issued a Notice to Proceed for the 24-month construction of the Water Treatment
plant. On June 26, 2019, TWD approved a 120-day construction period extension requested by Tagum
Water due to delays caused by unforeseen conditions in the project site which were discovered only after
construction had already commenced.

On February 7, 2020, the Board of Tagum Water finalized the approval of additional capital expenditures in
the amount of P154.00 Million. On April 4, 2020, the extended commissioning period of the Water Treatment
Plant was concluded. However, operations started only on May 18, 2020 due to COVID-19 quarantine
measures in the region.

On March 16, 2021, an artificial recharge intake structure was energized to deliver the contractual volume
of 26.00 million liters per day. However, in the second quarter of 2021, several unusual heavy rains which
brought floods were encountered, and these resulted to silt issue on the lagoon. This, in turn, affected plant
production, yielding only an average of 23.00 million liters per day. To mitigate the problem, an air and
water backwash system was constructed, and in parallel, heavy desilting activities were also done, and on
November 22, 2021, the procured slurry dredger was already operational in aiding the desilting activities at
the artificial recharge lagoon. On December 14, 2021, the plant was already back to its delivery of the
contractual 26.00 million liters per day to TWD.

On March 8, 2022, MWPV purchased the 49% stake of iWater, Inc. in Davao Water, which consists of
735,000 common shares with par value of P1.00 per share, for a consideration of P 345.33 million.

Estate Water, Aqua Centro MWPV Corporation and EcoWater MWPV Corporation

Estate Water (EW)

On January 15, 2016, MWPV entered into a MOA with Ayala Land, Inc. (ALI) and its subsidiaries
(collectively, the ALI Group), whereby MWPV shall exclusively provide water and used water services and
facilities to all existing and future property development projects of the ALI Group. This MOA is implemented
through a dedicated business– unit - EW, a division of MWPV.

To date, EW is providing water and /or used water services to more than 99 ALI developments across 43
cities and municipalities, nationwide. These include large township projects in Luzon (e.g. Nuvali, Vermosa,
Alviera, Lio), Visayas (e.g. Cebu IT Park, Cebu Business Park, Atria), and Mindanao (e.g. Abreeza, Azuela).
In addition, EW further provides design and project management services in the development of water and
used water facilities.

On December 18, 2017, MWPV signed a twenty-five (25) year lease agreement with the Philippine
Economic Zone Authority (PEZA). Pursuant to the agreement, MWPV will lease, operate, and manage the
water and used water facilities of PEZA in the Cavite Special Economic Zone (CEZ) for the provision of
water and used water services to the locators therein. MWPV shall apply its expertise in the industrial zones
operations and shall provide capital expenditures for the duration of the agreement.

On August 4, 2020, MWPV’s BOD approved the assignment of the Lease Agreement for the Operations
and Management of the Water and Used Water Facilities of the PEZA in the CEZ from MWPV to EcoWater.
As of December 31, 2022, MWPV is still operating CEZ.

On April 19, 2021, MWPV and Aqua Centro entered into a Novation Agreement with Adauge Commercial
Corporation whereby MWPV assigns and transfers its rights, duties and obligations under the MOA with ALI
Group to Aqua Centro for Atria Development (Iloilo City). As of December 31, 2021, MWPV is still operating
Atria Development.

SEC Form 17-A 33

On May 31, 2021, MWPV and the ALI Group signed an Amended and Restated MOA. MWPV shall have a
preferred status with regards to the provision of water and used water services to all property development
projects of the ALI Group except for the excluded developments namely, Amaia Scapes Pampanga, Amaia
Scapes San Fernando, Amaia Scapes Capas, Amaia Scapes Cabanatuan, Amaia Scapes Trece Martires,
Bellavita Capas, Bellavita Cabanatuan 1 and East, Bellavita Pililia, Bellavita Lian, Bellavita Lipa, Bellavita
Rosario, and Bellavita Iloilo.

On May 31, 2021, also, MWPV entered a Deed of Accession (Agreement) with Ayala Land Malls namely
North Eastern Commercial Corporation (Cloverleaf, The 30th), North Triangle Depot Commercial Corp
(Trinoma), Ayala Land Metro North Inc (U.P Town Center), North Ventures Commercial Corporation
(Fairview Terraces), Summerhill Commercial Ventures Corp (Feliz), Arvo Commercial Corporation
(Marikina, The District Dasmarinas, Legaspi), ALI-CII Development Corp. (Metropoint), Bay City
Commercial Ventures Corp. (Manila Bay), Alabang Commercial Corporation (ATC), Lagoon Development
Corporation (Pavilion), North Beacon Commercial Corporation (Marquee), Cavite Commercial Towncenter
Inc. (The District Imus, Serin), Cagayan de Oro Gateway Corp (Centrio) and Capitol Central Commercial
Ventures Corp. (Capitol Central) (collectively ALI Malls Group) whereby the MWPV shall provide used water
services, and operation and management of the Used Water Facilities only.

On December 29, 2021, MWPV entered into a Deed of Absolute Sale with Amaia Land Corp. (Amaia) and
BellaVita Land Corp. (BellaVita) whereby MWPV sells, conveys, transfers, assigns, and delivers the
properties and all rights, title, and interest to Amaia and BellaVita for the excluded development on the
Amended and Restated MOA with ALI Group.

On July 1, 2022, MWPV entered into a Deed of Accession (Agreement) with Orion Land, Inc (OLI) for
provision of used water services, and operation and management of the Used Water Facilities of SouthPark
Center.

On November 03, 2022, MWPV entered into a Memorandum of Agreement with ROHM Electronics
Philippines Inc. (REPI) for the rehabilitation, operation, and management of the existing water system of
REPI and to supply a guaranteed volume of 13,200.00 million cubic per month for twenty-five (25) years.

On October 20, 2022, MWPV and Damosa Land Inc. (DLI) signed a term of reference for the commercial
term of the partnership between MWPV and DLI. On February 6, 2023, MWPV and DLI signed a 25-year
partnership for the development, construction and operation, and management of the water system of Anflo
Industrial Estate (AIE). In the partnership, MWPV will invest at least PhP150M for the additional water
facilities which will be integrated into the existing system to meet AIE’s projected demand of 2.6 million liters
of water per day.

On February 10, 2023, the Company signed a Memorandum Agreement with Canlubang Sugar Estate for
a 25-year partnership for the design, construction, operations, and maintenance of a bulk water transmission
and treatment system in Barangay Canlubang, Calamba City.

Aqua Centro

On December 8, 2016, MWPV entered into multiple MOAs with SM Prime Holdings Inc. and its affiliates
and subsidiaries, SM Development Corporation (SMDC) and SM Residences Corp (collectively the SM
Group). Pursuant to the MOA, MWPV will provide the water and/or used water services and facilities to
eight property development projects of SMDC identified in each of the MOA. The ongoing collaboration with
SMDC also grants MWPV, in principle, the right to study, develop, and submit proposals for all its future
horizontal residential projects.

On October 5, 2017, Aqua Centro MWPV Corporation (Aqua Centro) was incorporated to handle property
development projects, other than those within the ALI Group, by engaging in the development, improvement,
maintenance, and expansion of water, sewerage, used water facilities and drainage facilities, and provide
services necessary or incidental thereto. Subsequently, on December 28, 2017, MWPV entered into a
Novation Agreement with SM Group and Aqua Centro to transfer its rights, duties and obligations to provide
water and/or used water services and facilities to the property development projects of the SM Group to
Aqua Centro, effective from the inception of each of the executed MOA.

On June 25, 2018, Aqua Centro entered into additional MOAS with the SM Group with each development
of SM Prime Holdings, Inc. and Metro South Davao Property Corp.
SEC Form 17-A 34
On December 11, 2018, Aqua Centro entered into seven APAs with EDCG to acquire the subsidiaries’
assets related to the provision of water service in ten (10) subdivisions in Imus, General Trias, and Naic –
all in the province of Cavite. These subsidiaries are Earth Aspire Corporation, First Advance Development
Corporation, Ambition Land Inc., Prosperity Builders Resources Inc., Tahanang Yaman Homes Corporation,
Extraordinary Development Corp., and Earth + Style Corporation.

In 2019, Aqua Centro took over the operations of three (3) additional EDCG subdivisions. Aqua Centro
shall operate the remaining (1) subdivision once all the conditions precedent under the APAs have been
fulfilled. As of December 31, 2022, Aqua Centro is operating nine out of ten subdivisions covered by its
APAs.

On July 10, 2019, Aqua Centro entered into a Memorandum of Agreements (MOA) with Raemulan Lands,
Inc. (Raemulan). Pursuant to the MOA, the Company will provide the water and/or used water services and
facilities to the identified developments of the Raemulan such as Tradizo Enclave Subdivision and Pasinaya
North Subdivision.

On December 4, 2020, in relation to the previous MOA agreed by Aqua Centro and Raemulan Lands Inc.,
the parties have agreed that instead of Raemulan paying Aqua Centro an availability charge under the MOA,
Aqua Centro will pay Raemulan a one-time concession fee as a compensation for the right of use of the
water facilities. As of December 31, 2022, Aqua Centro is operating Tradizo Enclaces and Pasinaya North
Subdivision.

EcoWater

On July 27, 2018, MWPV incorporated EcoWater MWPV Corp. (EcoWater) which will operate a portfolio
composed of private and government-owned industrial parks.

On September 9, 2019, EcoWater entered into a 25-year Water Purchase Agreement with ROHM
Electronics Philippines Inc. (REPI), one of the leading semiconductor manufacturers in the country located
in Carmona, Cavite. The agreement allows EcoWater to develop its own water supply to be supplied to
REPI’s manufacturing requirement over the life of the contract. On September 16, 2020, the operation has
started with a guaranteed volume of 90,000.00 million cubic meters (mcm) per month.

On March 31, 2022, REPI, EcoWater, and MWPV signed a Novation Agreement for the assignment and
transfer of rights and duties under the Water Purchase Agreement from EcoWater to MWPV. On January
16, 2023, EcoWater’s BOD approved the transfer of operation to MWPV to be effective in January 2023.

Bulacan MWPV Development Corporation and its Asset Purchase Agreements

On January 4, 2017, MWPV entered into an APA with Asian Land Strategies Corporation (Asian Land) to
acquire and operate the latter’s assets used in the water business operations in Asian Land’s developments
in the province of Bulacan. The intention of MWPV was to assign the rights under the APA to its wholly-
owned subsidiary upon its incorporation.

On April 11, 2017, Bulacan MWPV Development Corporation (BMDC) was incorporated to design,
construct, rehabilitate, maintain, operate, finance, expand, and manage water supply system and sanitation
facilities. BMDC is the ultimate entity that will own and operate the assets acquired from Asian Land.

On July 26, 2017, BMDC entered into an APA with Solar Resources, Inc. (Solar Resources) to acquire and
operate the latter’s assets used in the water business operations in Solar Resources developments in the
province of Bulacan.

On July 31, 2017, Solar Resources executed a Deed of Absolute Sale to sell and transfer its properties
pertaining to water facilities and its operations in the Las Palmas Subdivisions Phases 1 to 7 to BMDC. On
the same day, MWPV assigned all its rights and obligations on the APA with Asian Land and Solar
Resources to BMDC, a wholly owned subsidiary of MWPV, under a Deed of Assignment. The Deed of
Absolute Sale was also executed between Asian Land and BMDC on this day.

SEC Form 17-A 35

On December 14, 2017, BMDC and Borland Development Corporation (Borland) executed the APA, Deed
of Assignment, and Deed of Absolute Sale between the parties for the sale, assignment, transfer, and
conveyance of Borland’s assets pertaining to water facilities and its operation in San Vicente Homes
subdivision in Bulacan to BMDC.

Calasiao Water Company Inc.’s (Calasiao Water) Concession Agreement with Calasiao Water
District (CWD)

On December 9, 2016, Manila Water received a Notice of Award from CWD for the implementation of the
joint venture project for the design, construction, rehabilitation, maintenance, operation, financing,
expansion and management of the water supply system of CWD in Calasiao, Pangasinan.

On June 19, 2017, Manila Water signed a JVA with CWD which will govern the relationship of the two in
undertaking the joint venture project. Under the JVA, Manila Water and CWD shall cause the incorporation
of a joint venture company where Manila Water and CWD shall own 90% and 10%, respectively, of the
outstanding capital stock. On August 2, 2017, the SEC approved the incorporation of Calasiao Water

On October 23, 2017, Calasiao Water and CWD signed and executed a concession agreement that grants
Calasiao Water, the sole right to develop, manage, operate, maintain, repair, decommission, and refurbish
all fixed and movable assets (except certain retained assets) required to provide water delivery in the entire
Municipality of Calasiao for a period of 25 years commencing on December 29, 2017.

On March 2022, Malasiqui and Calasiao Water District (CWD) entered into a memorandum of agreement
to operate Tourism Water Utility Assistance (TOUWA) Facility consisting of 7 barangays. As its JV Partner,
CWD awarded the operation of the facility to Calasiao Water.

Filipinas Water Consortium Holdings Corp. and Its Partnerships

On February 2, 2017, Obando Water Consortium Holdings Corp. (now, Filipinas Water Consortium Holdings
Corp. or Filipinas Water) was registered with the SEC. Filipinas Water is the consortium between the
Company and MWPV with an equity share of 49% and 51%, respectively. The primary purpose of Filipinas
Water is to engage in the business of a holding company without acting as stockbroker or dealer in
securities.

Obando Concession Project

On January 24, 2017, the consortium of Manila Water and MWPV received the Notice of Award from
Obando Water District (OWD) for the implementation of the joint venture project for the design, construction,
rehabilitation, maintenance, operation, financing, expansion, and management of the water supply system
and sanitation facilities of OWD.

On July 26, 2017, Filipinas Water signed and executed a JVA with OWD for the implementation of the
project. Subsequently, on October 10, 2017, Obando Water Company, Inc. (Obando Water) was
incorporated. Obando Water is 90% and 10% owned by Filipinas Water and OWD, respectively. The project
includes a concession agreement which was executed on October 12, 2017 for the design, construction,
rehabilitation, maintenance, operation, financing, expansion, and management of the water supply system
and sanitation facilities of OWD in Obando, Bulacan for a period of 25 years from the commencement date.

On December 28, 2021, Obando Water through OWD submitted the approved the 10-year Service Delivery
Plan (SDP) to LWUA. On August 12, 2022, Obando Water and OWD conducted a Public Hearing and
Project Presentation for the proposed 10-year tariff adjustment.

On June 27, 2023, LWUA Board of Trustees (BOT) approved and confirmed the 20.00% Proposed Water
Rates increase per BOT Resolution No. 29 series of 2023 and was implemented in August 2023.

Ilagan Bulk Water and Septage Management Project

On January 26, 2018, the consortium of Manila Water and MWPV, Filipinas Water, received the Notice of
Award from the City of Ilagan Water District (CIWD) for the implementation of a joint venture project for the
development, financing, operation, and management of a raw water source, provision of bulk water supply
with system expansion, and the development of septage management in the City of Ilagan, Isabela.
SEC Form 17-A 36
On November 16, 2018, Filipinas Water entered into a JVA with CIWD for the implementation of the project.
Upon completion of conditions precedent in the JVA, a joint venture company will consequently enter into a
Bulk Water Sales and Purchase Agreement (BWSPA) and Septage Management Agreement (SMA) with
CIWD for the implementation of the project.

On February 15, 2019, the joint venture company was incorporated and was registered with SEC under the
name of Metro Ilagan Water Company, Inc. (Ilagan Water). Ilagan Water is owned by Filipinas Water and
CIWD having an equity share of 90% and 10%, respectively.

On March 18, 2019, Ilagan Water’s BOD approved the execution of a Bulk Water Sales and Purchase
Agreement and Septage Management Agreement with CIWD.

On March 16, 2020, Ilagan Water signed and executed a BWSPA and SMA with the CIWD, for the supply
of bulk water and septage management to CIWD for a period of 23 years and 22 years from the Operation
Start Date, respectively.

On October 28, 2022, Ilagan Water received the Notice to Proceed for the Construction of Water Treatment
Plant (WTP) for the Bulk Water Supply Agreement (BWSPA) from the CIWD. As of December 31, 2023,
construction phase of the WTP 1 is on-going.

Bulakan Concession Project

On April 26, 2018, the consortium of Manila Water and MWPV received the Notice of Award from Bulakan
Water District (BuWD) for the joint venture project for the development, financing, design, engineering,
construction, rehabilitation, upgrade, testing, commissioning, operation, management, and maintenance of
water facilities and the provision of water and sanitation services in the Municipality of Bulakan.

On August 16, 2018, Filipinas Water and the BuWD entered into a JVA for the implementation of the project.
On October 16, 2018, the joint venture company was incorporated and was registered with SEC under the
name of Bulakan Water Company, Inc. (Bulakan Water). Bulakan Water is owned by Filipinas Water and
BuWD having an equity share of 90% and 10%, respectively.

On June 14, 2019, Bulakan Water and the BuWD signed and executed a concession agreement for the
design, construction, rehabilitation, operation, maintenance, financing, expansion, and management of
water facilities and the provision of water and sanitation services in the Municipality of Bulakan for a period
of 25 years from the commencement date.

On December 18, 2020, Bulakan Water through BuWD submitted its 10-year Service Delivery Plan (SDP)
to LWUA. On April 29, 2021, a Public Hearing and Project Presentation was held to present to the public its
proposed water tariff adjustment. After more than a year, the LWUA Board of Trustees has approved and
confirmed the proposed water rates per BOT Resolution No. 55, Series of 2022, dated November 11, 2022.
The approved rate was 42.86% effective December 2022 consumption which will be reflected in the January
2023 billing.

On July 28, 2021, Bulakan Water entered into a Memorandum of Agreement with the Municipality of Bulakan
for the provision of septage management program in the service area. On September 1, 2021, actual
desludging activity started together with the implementation of the 20% environmental fee in all customers’
bill.

Incorporation of North Luzon Water

On September 16, 2019, MWPV incorporated North Luzon Water Company, Inc. (North Luzon Water) as a
special purpose vehicle created for the franchises granted to MWPV in Sta. Barbara, Manaoag and San
Fabian in Pangasinan. MWPV has previously signed a Memorandum of Agreement (MOA) with these
municipalities.

On August 4, 2020, the MWPV BOD approved the assignment of the franchises, rights and obligations
granted to MWPV by the local government units of Sta. Barbara, San Fabian, and Manaoag in the province
of Pangasinan to North Luzon Water.

SEC Form 17-A 37

On November 12, 2023, projects from the municipality of Sta. Barbara particularly in Barangay Leet and
Barangay Balingueo have been energized with initial water service connections of 19 households.

Notice of Award from Leyte Metropolitan Water District (LMWD)

On December 6, 2017, Manila Water received a Notice of Award from LMWD for the implementation of the
joint venture project (the Leyte Project) for the design, construction, rehabilitation, maintenance, operation,
financing, expansion, and management of the water supply and sanitation facilities and services of LMWD
in the Province of Leyte.

In January 2018, an internal conflict arose between the Province-appointed BOD of LMWD and the City-
appointed BOD, specifically on establishing as to which is the legitimate BOD authorized to represent the
LMWD. This issue caused substantial delay in the implementation and recognition of the Notice of Award
in favor of Manila Water.

On February 20, 2019, Manila Water wrote to the LMWD, now represented by the City-Appointed BOD, and
requested the LMWD to honor the Notice of Award.

On April 12, 2019, the LMWD advised that it had already rescinded/terminated the JVA negotiations with
Manila Water.

On June 21, 2019, Manila Water initiated available legal course of action to compel the LMWD to honor the
Notice of Award granted to it.

As of December 31, 2023, the case remains pending with the Supreme Court.

Notice of Award from Tanauan Water District (TnWD)

On October 12, 2018, the Consortium of Manila Water and MWPV received the Notice of Award from TnWD
for the joint venture project for the design, construction, rehabilitation, maintenance, operation, financing,
expansion, and management of the water supply and sanitation facilities and services in the service area of
TnWD in the City of Tanauan.

On February 4, 2019, the Consortium and the TnWd entered into a JVA for the implementation of the Project.

On May 20, 2019, the project company was incorporated and was registered with the SEC under the name
of MWPV South Luzon Water Corp. (South Luzon Water). South Luzon Water is 100% owned by Filipinas
Water, the consortium of Manila Water and MWPV.

On June 1, 2019, after full completion of the turnover and transition of the project, the Consortium officially
took over operations and begun providing potable water supply to the more than 18,000 customers
previously serviced by Tanauan Water District.

On September 30, 2019, South Luzon Water’s BOD approved to accept the assignment by the Company
and MWPV of their respective rights and obligations under their JVA with TnWD.

On January 21, 2020, South Luzon Water’s BOD approved and clarified that the assignment has a
retroactive application effective June 1, 2019, considering the actual commencement date of the takeover
and operation of the Tanauan Project.

Joint Venture Agreement from Lambunao Water District (LWD)

On November 27, 2018, the Company received a Notice of Award from Lambunao Water District for a joint
venture for the design, construction, rehabilitation, maintenance, operation, financing, expansion, and
management of the water supply system of Lambunao Water District in the Municipality of Lambunao, Iloilo.
The JVA was executed on July 3, 2019. On September 1, 2019, Aqua Centro officially commenced
operations on the joint venture activity.

On December 11, 2019, a Deed of Accession between Aqua Centro, the Company and LWD was executed.
Aqua Centro was designated to be the project company for the implementation of the project pursuant to
the JVA.
SEC Form 17-A 38
Joint Venture Agreement with Calbayog Water District (CCWD)

On December 27, 2018, the Company received the Notice of Award from Calbayog City Water District for
the implementation of the joint venture project for the design, construction, rehabilitation, maintenance,
operation, financing, expansion, and management of the water and wastewater systems of Calbayog City
Water District in the Calbayog City, as well as other areas which may eventually form part of the service
coverage of the Calbayog City Water District in the Province of Samar.

On April 17, 2019, the special purpose vehicle created for this project was incorporated and registered in
SEC under the name of Calbayog Water Company Inc. (Calbayog Water) through the Company’s wholly
owned subsidiary, MWPV.

On July 3, 2019, after completion of conditional precedent specified in the NOA, the Company entered into
a JVA with the Calbayog City Water District for the implementation of the joint venture project over a 25-
year contract period.

On October 16, 2019, after full completion of the turnover and transition of the project, the Consortium
officially took over operations and begun providing potable water supply in Calbayog City.

On July 15, 2020, Calbayog Water and Tubig Pilipinas Group, Inc. (TPGI) entered into a Stakeholder
Management Agreement, where TPGI agrees to provide support to the Operations Management/
Stakeholder Management of Calbayog Water. On the same date, Calbayog Water and TPGI entered into
a Subscription Agreement wherein TPGI agreed to subscribe to Calbayog Water’s shares at a subscription
price of ₱1.00 per share for a total subscription of ₱49.17 million, payable in tranches up to 2022.

Aqua Centro and Laguna Water MOAs with Raemulan Lands, Inc. (RLI)

In July 2019, Aqua Centro and Laguna Water entered into three (3) MOAs with RLI for the construction,
operation, and management of water distribution facilities in Pasinaya North and Tradizo Enclaves in Cavite
and Jubilation Enclave in Laguna. Aqua Centro and Laguna Water have started operations in 2019.

On December 4, 2020, an amendment to the MOA with RLI for Pasinaya North was executed.

Notice of Award from the Provincial Government of Pangasinan (PGP)

On September 30, 2021, the Consortium of the Company and MWPV received a Notice of Award from PGP
for the implementation of a joint venture project for the provision of bulk water to the Province of Pangasinan.

Upon completion of conditions precedent, both parties shall sign a concession agreement to implement the
project that has an estimated capital expenditure program of P8.00 billion over the twenty five (25)-year
contract period.

On January 14, 2022, the Consortium of the Company and MWPV signed the Concession Agreement with
the PGP for the implementation of the joint venture project for the development, financing, construction,
operation and maintenance of a bulk water facility within the Province of Pangasinan. On the same day, a
groundbreaking activity was held in one of the proposed sites for a treatment plant.

International New Business and Investments

International new business investments of the Manila Water Group are generally undertaken through its
wholly-owned Singapore subsidiary, Manila Water Asia Pacific Pte. Ltd (MWAP), and its direct subsidiaries,
Manila Water South Asia Holdings Pte. Ltd. (MWSAH), Thu Duc Water Holdings Pte. Ltd. (TDWH), Kenh
Dong Water Holdings Pte. Ltd. (KDWH), Manila South East Asia Water Holdings Pte. Ltd (MSEA), and
Manila Water (Thailand) Co., Ltd. (MWTC).

In December 2011, TDWH purchased a 49.00% share ownership in Thu Duc Water B.O.O. Corporation
(Thu Duc Water) which owns the second largest water treatment plant in Ho Chi Minh City. Thu Duc Water
has a bulk water supply contract with Saigon Water Corporation (SAWACO) for a minimum consumption of
300 MLD on a take-or-pay arrangement.

SEC Form 17-A 39

In July 2012, KDWH completed the acquisition of a 47.35% stake in Kenh Dong Water Supply Joint Stock
Company (Kenh Dong Water), a Vietnamese company established in 2003 to build, own, and operate major
water infrastructure facilities in Ho Chi Minh City. Similar to Thu Duc Water, Kenh Dong Water has a bulk
water purchase agreement with SAWACO for a minimum 150 MLD. It is also providing supply to Cu Chi
District, a district in Ho Chi Minh City.

In October 2013, MWSAH completed the acquisition of 31.47% stake in Saigon Water Infrastructure
Corporation (Saigon Water), a listed company in Vietnam. In 2017, MWSAH infused an additional equity of
VND103.87 billion, and increased its shareholding percentage to 37.99%.

In 2015, MWSAH also entered into a Capital Transfer Agreement with Saigon Water and Vietnam-Oman
Investment Company to develop and operate the water network in Cu Chi. The project will be undertaken
with Cu Chi Water Supply Sewerage Company Limited (Cu Chi Water, a Vietnam limited company).
Through this agreement, MWSAH holds 24.50% share in the charter capital of Cu Chi Water.

On February 19, 2018, Manila Water signed a share purchase agreement with Electricity Generating Public
Company Limited (EGCO) to acquire EGCO’s 18.72% equity in Eastern Water Resources Development
and Management Public Company Limited (East Water). East Water is a publicly listed company whose
shares are traded in the Stock Exchange of Thailand. It is engaged in the provision of raw water and tap
water since 1992 in the eastern seaboard of Thailand.

On March 5, 2018, MWTC entered into a one-year term facility agreement with Mizuho Bank, Ltd., Bangkok
Branch (Mizuho Bangkok), whereby Mizuho Bangkok extended credit to MWTC for THB5.30 billion to
finance MWTC’s acquisition of shares in East Water.

On March 14, 2018, MWTC acquired 311,443,190 ordinary shares in East Water representing 18.72%
equity of East Water.

On February 27, 2019, MWTC signed a THB5.30 billion, five (5)-year term loan facility with Mizuho Bank
Ltd. – Bangkok Branch and Bank of Ayudhya Public Company Limited to refinance the previous bridge loan
used in its acquisition of its investment in East Water. The loan bears interest of BIBOR plus margin and is
guaranteed by the Company.

On March 6, 2018, PT Manila Water Indonesia (PTMWI), a majority-owned subsidiary of MSEA, signed an
SPA with PT Triguna Rapindo Mandiri to acquire 4,478 shares of PT Sarana Tirta Ungaran (PT STU) which
allowed PTMWI to own 20.00% of the outstanding capital stock of PT STU.

PT STU is a bulk water supply company servicing PDAM Kabupaten Semarang and industrial customers in
Bawen, located in Ungaran area of Semarang Regency, Central Java Province, with a capacity of 21.5
million liters per day.

On December 3, 2020, the consortium of Saur SAS, Miahona Company and Manila Water (the Consortium)
signed a Management, Operation and Maintenance Contract (MOMC) with the National Water Company
(NWC), Kingdom of Saudi Arabia for the latter’s North West Cluster. The MOMC contains the management,
operations and maintenance of the water and wastewater facilities of the North West Cluster (Madinah and
Tabuk) over a seven-year contract period, which entails the implementation of enabling projects and
deployment of key personnel to manage the cluster and achieve key performance indicators target set by
NWC. On April 1, 2021, the implementation of the MOMC officially commenced. The implementation of the
MOMC is done through the Consortium’s Project Company, International Water Partners Company, a mixed
capital limited liability company incorporated under the laws of the Kingdom of Saudi Arabia by Saur Saudi
Arabia Ltd., Miahona Company and Manila Water Asia Pacific Pte. Ltd with equity shareholdings of 40%,
40% and 20%, respectively.

On October 8, 2021, the consortium with Saur SAS and Miahona Company was awarded another seven-
year water MOMC with NWC to undertake the operation of the water and environmental treatment services
in the Eastern Cluster which has a population of 5.27 million and a supply demand of about 1,800 million
liters of water per day. The consortium and the NWC signed the MOMC on November 21, 2021. On January
27, 2022, International Water Partners Company the Second (IWP2) was incorporated with MWAP, Saur,
and Miahona owning 30.00%, 35.00%, and 35.00%, respectively. On April 1, 2022, IWP2 officially
commenced the implementation of the MOMC.

SEC Form 17-A 40

Environmental Compliance

To ensure environmental compliance, the Company is doing proactive compliance approach by periodically
conducting compliance performance assessment. Monitoring of environmental compliance for operating
facilities and on-going projects is being carried out proactively using risk-based assessment checklist to
internally address compliance risks before they result into non-compliances. Potential non-compliance is
identified, tracked and acted upon to minimize or avoid adverse environmental impacts brought about by
the facility operation. The Company has Pollution Control Officer appointed for each facility who ensures
compliance with all applicable environmental regulatory requirements and whose performance is validated
through regular internal audits. Waste minimization and pollution prevention are being implemented through
operational control measures needed to address significant environmental aspects and impacts as identified
in Environmental Impact Avoidance Mitigation Plan.

The Company has made efforts to comply with applicable environmental regulatory standards. During and
subsequent to construction and operation, ambient conditions and facility-specific emissions (e.g. air, water,
hazardous wastes, treatment by-products) from water and wastewater treatment facilities are routinely
sampled and tested against DENR environmental quality standards using prescribed sampling, testing and
reporting procedures. The Company’s water and Wastewater treatment processes meet the current
standards of the PNSDW, DOH, DENR and Laguna Lake Development Authority (LLDA). The Company
continues to undertake improvements in the way it manages both treated water and wastewater as well as
treatment of byproducts such as backwash water, sludge and biosolids.

The Company’s subsidiaries operating outside of Metro Manila employ similar management systems and
work practices that are geared towards meeting all statutory and regulatory compliances. All facilities have
assigned Pollution Control Officers (PCO) who ensure compliance to environmental regulation. A monthly
report on the overall compliance performance to Top management is provided to ensure timely action are
taken for any potential compliance issue. A compliance officer network is also in place for discussion of
potential compliance challenges and best practice to ensure operational excellence.
The Company has also established an online compliance monitoring tool to ensure timely renewal of its
permits and licenses.

For recently taken over operations with inherent compliance issues or affected by environmental changes,
the Group’s subsidiaries have implemented corrective measures from conducting stringent water quality
parameters monitoring to accelerating execution of capital expenditure projects and technical solutions
aimed at addressing specific water quality issues. It has also developed water safety plan to ensure water
quality. Diligent monitoring and proactive engagement with government stakeholders have advanced
majority of regulatory permits and licenses to the application and secured stage, mitigating the Group’s
subsidiaries’ compliance and legal risks.

The Group has contingency plans in the event of unforeseen failures in the water and waste water treatment
or chemical leakage and accidental discharge of septage and sewage. The Group’s Business Continuity
Units together with Environmental Compliance Units are trained to ensure that environmental incidents are
tracked, monitored and resolved.

A policy on climate change was formulated to define the Group’s commitment to the National Framework
Strategy for Climate Change. The Climate Change Council regularly monitors and validates short-term,
medium-term, and long-term investment and operating plans and targets to ensure alignment to Group’s
climate change commitments and goals. While the Group is undertaking climate change mitigating
measures such as greenhouse gas accounting and reporting along with initiatives to optimize consumption
of fuel and electricity to reduce its carbon footprint, there is a current emphasis towards climate change
adaptation such as intensifying watershed rehabilitation work, vulnerability assessment of water sources
and assets, improving the climate-resiliency of existing and future water and used water facilities,
strengthening risk reduction and management systems with a business continuity plan, and development of
new water sources.

SEC Form 17-A 41

Government Environmental Laws and Regulations

The Group is committed to ensuring the highest standards in complying with the rules and regulations
implemented by the government agencies. The environmental compliance supports the fulfillment of the
objectives of the government by enforcing the law.

Compliance Officer and Manager have been designated in every business unit to work with various agencies
and handles all the regulatory compliances. In parallel, a Regional Head of compliance promotes
compliance measures according to regional characteristics.

Aligned with the framework of Integrated Management System which include Quality, Environment, Health
and Safety and Energy Management Systems, the Operations Group has made efforts to comply with the
requirements of environmental laws and other regulations which include:

General Environmental Safeguards

• Presidential Decree No. 1586 (Philippine Environmental Impact Statement System)
• Republic Act No. 7586 – National Integrated Protected Areas System (NIPAS)
• DENR Administrative Order No. 30, Series of 2003 (Implementing Rules and Regulations for the
Philippine Environmental Impact Statement System)
• DENR Administrative Order No. 2000-08 (Implementing Guidelines on Engineering Geological and
Geohazard Assessment as Additional Requirement for ECC Applications)
• DENR Administrative Order No. 02, Series of 2014 (Appointment/Designation of Pollution Control
Officers)
• DENR Administrative Order No. 27, Series of 2003 (Self-Monitoring Report System)
• DENR Administrative Order No. 2017-15 (Guidelines on Public Participation under the Philippine
Environmental Impact Statement (EIS) System)
• EMB MC 2014-005 (Revised Guidelines for Coverage Screening and Standard Requirements under
PEISS)

Water
• Republic Act No. 9275 or the Philippine Clean Water Act of 2004
• DENR Administrative Order No. 10, Series of 2005 (Implementing Rules and Regulations of
R.A. No. 9275)
• DENR Administrative Order No. 35, Series of 1990 (General Effluent Standards)
• DENR Administrative Order No. 39, Series of 2003 (Environmental Users Fees)
• DENR Administrative Order 2016-08 (Water Quality Guidelines & General Effluent Standards)
• DENR Administrative Order 2021-19 (Updated Water Quality Guidelines & General Effluent Standards
for Selected Parameters)
• DENR EMB MC 2021-01 (Clarification on the Implementation of Section 10 of DAO 2016-08)
• DOH Operations Manual on the Rules and Regulations Governing Domestic Sludge and Septage

Air
• Republic Act No. 8749 or the Philippine Clean Air Act of 1999
• DENR Administrative Order No. 81, Series of 2000 (Implementing Rules and Regulations of R.A. 8749)
• EMB Memorandum Circular 2007-003 (Policy on Compliance and Permitting for Industrial Facilities
Relating to Air Quality)
• EMB MC 2020-17 (Guidelines on the Issuance of Permit to Operate (PTO) through the Online Permitting
and Monitoring System)
• EMB MC 2022-003 (Amending Sec. 5 of MC 2016-008 Relative to the Issuance of PTO to all Stand-by
Generator Set without Requiring Source Emission Testing

Solid Waste
• Republic Act No. 9003 or the Ecological Solid Waste Management Act of 2000
• DENR Administrative Order No. 34, Series of 2001 (Implementing Rules and Regulations of
R.A. No. 9003)

SEC Form 17-A 42

Hazardous Wastes and Chemicals
• Republic Act No. 6969 or the Toxic Substances, and Hazardous and Nuclear Waste Control Act of
1990
• Philippine Drug Enforcement Agency – Republic Act 9165- Regulatory Controls in Licit Trade of
Controlled Precursors and Essential Chemicals
• Philippine National Police – License to Possess/Purchase Explosives (Chemical used in the laboratory
that are ingredients/kind of explosives)
• DENR Administrative Order No. 29, Series of 1992 (Implementing Rules and Regulations of R.A. No.
6969)
• DENR Administrative Order 2004-36 (Revised Procedural Manual on Hazardous Waste Management)
• DENR Administrative Order No. 22, Series of 2013 (Revised Procedures and Standards for the
Management of Hazardous Waste)
• DENR Administrative Order 2005-27 (Revised Priority Chemical List)
• DENR Administrative Order 2007-23 (Prescribing additional Requirements for the Issuance of the
Priority Chemical List Compliance Certificate)
• DENR Administrative Order for all Chemical Control Orders
• DENR Administrative Order 2013-24 Chemical Control Order for Lead
• DENR Administrative Order 1997-38 Chemical Control Order for Mercury & Mercury Compounds
• DENR Administrative Order 1997-39 Chemical Control Order for Cyanide & its Compound
• DENR Administrative Order 2004-08 Revised Regulations on the Chemical Control Order for Ozone
Depleting Substances (ODS)
• DENR Administrative Order 2000-02 Chemical Control Order for Asbestos
• DENR Administrative Order 2004-01 Chemical Control Order for Polychlorinated Biphenyls (PCB)

LLDA
• Board Resolution No. 408, Series of 2011 (Approving Revised Definition of Developmental Activities
Required to Secure LLDA Clearance and Its Implementing Rules and Regulations)
• Board Resolution No. 408, Series of 2011 (Approving Revised Definition of Developmental Activities
Required to Secure LLDA Clearance and Its Implementing Rules and Regulations)
• Board Resolution No. 248, Series of 2005 (Providing Guidelines on the Use of Shoreland Areas
Surrounding the Laguna De Bay)
• Board Resolution No. 283, Series of 2006 (Resolution Providing Guidelines on Reclamation within the
Shoreland of Laguna De Bay)
• Board Resolution No. 113, Series of 1999 (Adding the Implementing Guidelines Governing the Lease
of the Laguna De Bay Shoreland Areas)
• Board Resolution No. 523, series of 2017, Adoption of Department Administrative Order 2016-08 of the
DENR as the New Effluent Standards for the Continuous Implementation of the Environmental Users
Fee System and Water Quality Guidelines for Surface Waters within the Laguna de Bay Region and for
Other Purposes
• LLDA MC 2016-06 (Accreditation of Pollution Control Officers in the Laguna De Bay Region)
• LLDA MC 2017-005 (Rules and Regulation Implementing the New General Effluent Standards Pursuant
of LLDA BR No. 523 S.2017
• LLDA MC 2021-03 (Clarification on the Implementation of Sec. 10 of DAO 2016-08 vis-à-vis LLDA BR
523 S 2017, LLDA MC 2017-05 and DENR MC 2021-01

Others
• Republic Act No. 4850 or the Act Creating the LLDA
• Relevant LLDA Board Resolutions and Memorandum Circulars, including but not limited to Resolution
No. 25, Series of 1996 (Environmental User Fee System in the Laguna de Bay Region) and Resolution
No. 33, Series of 1996 (Approving the Rules and Regulations Implementing the Environmental User
Fee System in the Laguna de Bay Region)
• Presidential Decree No. 856 or the Philippine Sanitation Code
• Implementing Rules and Regulations of the Philippine Sanitation Code
• RA 9514 Fire Code of the Philippines
• DOLE Dept. Order 198, Series of 2018, An Act Strengthening Compliance with OSH Standards
• RA 9136, Electric Power Industry Reform Act of 2001
• Philippine National Standards for Drinking Water 2007
• NWRB Resolution No. 03-0715 0f 2015 (Approval of the revised 2015 NWRB Fees & Charges

SEC Form 17-A 43

• PD 1067 Water Code of the Philippines
• IRR of Water Code of the Philippines 1979
• RA 11285 Energy Efficiency and Conservation Act 2019

Social
• Republic Act 8371 - The Indigenous Peoples Rights Act of 1997

The compliance management team ensures the acquisition of permits and implementation of rules and
regulations set by the following government agencies.

AGENCY PERMIT/CLEARANCES

BIR BIR Certificate of Registration

CDC Building Permit
Certificate of Annual Inspection
Certificate of Environmental Compliance
Certificate of Operation
Certificate of Potability
Certificate of Registration and Tax Exemption
Electrical Permit
Fire Safety Inspection Certificate
Health Certificate for Lab Personnel
Mechanical Permit
Occupancy Permit
Plumbing Permit
Sanitary Permit
Sanitation Site Clearance
DAR Land Use Conversion
DENR Environmental Compliance Certificate
Certificate of Non-Coverage
Chemical Control Order Registration
Discharge Permit
Hazardous Waste Generator ID
Hazardous Waste Manifest
PCO Accreditation
Permit to Operate
Permit to Transport
Priority Chemical List (PCL) Compliance Certificate
Tree Cutting Permit
Special Land Use Permit
Special Use Agreement in Protected Areas (SAPA)

DOH Certificate of Laboratory Accreditation

Environmental Sanitation Clearance
Operational Permit
Sanitary Permit
Water Safety Plan

DOLE DOLE Registration

Occupational Health Practitioner Accreditation
Safety Practitioner Accreditation

DPWH Excavation Permit

DTI DTI Registration Certificate

ERC/DOE Certificate of Compliance for Genset

SEC Form 17-A 44

 HDMF Pag-IBIG Employers Registration

LGU Barangay Clearance

Building Permit
Business Permit
Certificate of Annual Inspection
Certificate of Environmental Compliance
Certificate of Potability
Certificate of Zoning Compliance
Electrical Permit
Excavation Permit
Fencing Permit
Fire Safety Inspection Certificate
Health Certificate for Lab Personnel
Mechanical Permit
Occupancy Permit
Permit to Dispose Solid Waste
Permit to Transport
Sanitary Permit
Zoning Clearance

LTO Vehicle Registration

Driver’s License
Vehicle Registration

LLDA Shoreland Certificate

LLDA Clearance
Discharge Permit
Surface Water Permit
NTC License to Operate Radio Communication
NWRB Certificate of Public Convenience
Deep Well Drilling Permit
Surface Water Rights
Water Permit

PAMB PAMB Clearance

PEZA Permit to Locate

PhilHealth PhilHealth Employer’s Registration

PNP Firearm License

License to Possess
Permit to Purchase PNP Controlled Chemicals
PNRI Radioactive Material License

PRC Permit to Operate Laboratory

SEC SEC Registration Certificate

SSS SSS Employer’s Registration

Despite the high volume of permits necessary for each business unit, the Group ensures timely application
and renewal of each permit. A dashboard has been established as a monitoring tool that show summary of
compliance and validity period. A regular system-generated reminder for expiring permits is in the system
to prompt the business units on status of permit validity to avoid potential compliance issues.

SEC Form 17-A 45

Regular discussions and meetings relevant to compliance issues and concerns were rigorously enforced.
Knowledge sharing, and trainings are also offered to fully equip the compliance managers. Additionally,
internal policies on compliance management have been implemented to guide the business units in handling
the regulatory reportorial requirements.

Sustainable Development

A copy of the Group’s Integrated Report which incorporates our Sustainability Report may be found in
Exhibit 3.

The Group sees sustainability as the ability to create value in the long term. The Group considers its impact
and contribution to the three elements of sustainability: society, environment, and economy. Since 2004,
the Group’s sustainability disclosures have evolved in quality and scope in sync with different sustainability
standards and reporting such as Global Reporting Initiative (GRI), Integrated Reporting (IR), Sustainability
Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), and
United Nations Sustainable Development Goals (UN SDGs).

In line with its vision of becoming “A global leader in providing quality water and environmental services
supportive of sustainable development”, the Board of Directors established the Environmental, Social, and
Governance (ESG) Committee as a new board committee on February 9, 2022. The ESG Committee
focuses on the integration of environmental, economic, social, and governance principles in the formulation
and implementation of the Group’s sustainability plans and strategies. Chaired by the President and Chief
Executive Officer, the ESG Committee is dedicated to the continued development of its sustainability
framework wherein the environmental and social goals are aligned with the business goals of the Group,
resulting in shared value delivered at scale.

Guided by its sustainability framework, the Group released the first series of its medium-term sustainability
goals that outlines its progress and plans on embedding ESG into their business strategies. Set to be
achieved by 2025, the Group’s mid-term targets aim to:

• Achieve a 60% reduction in and avoidance of scopes 1 and 2 carbon emissions through renewable
energy adoption and wastewater treatment.
• Build infrastructures to satisfy service commitments and improvements.
• Ensure water access and security by allocating at least 15% supply buffer from expansion and
additional raw water sources.
• Sustain non-revenue water levels below 15%.
• Reforest 1,000 hectares of watershed areas.
• Plant and nurture 580,000 trees.
• Attain 100% compliance with national drinking water standards.
• Maintain a zero lost time injury rate.

This year's report focuses on three key areas crucial to Manila Water:

1. Ensuring Water Security Amidst Climate Change

2. Investing in Nature and Future Infrastructure
3. Empowering Water Stewards

Securing Water Amidst Climate Change

Ensuring reliable water and wastewater services remains a top priority at Manila Water, where several
strategies have been implemented to achieve this goal.

Through collaboration with government agencies, regulators, and stakeholders, tailored water and
wastewater masterplans are designed to address the specific needs of the customer base. In response to
increasing water demand, population growth, and climate change threats, comprehensive water security
plans have been developed across all business units, resulting in a 24% raw water buffer by 2023. To
optimize water resources, a focus is placed on maximizing backwash recovery, alongside programs aimed
at reducing non-revenue water through leak reduction initiatives.

SEC Form 17-A 46

Recognizing the importance of climate resilience, climate scenario assessments are integrated into long-
term plans to identify risks and opportunities and mitigate the impact of extreme weather events. Following
the recommendations of TCFD, climate scenario simulations are conducted to assess primary physical risks
such as coastal flooding and temperature extremes, guiding strategies for asset resilience, business
continuity, and insurance. Moreover, energy efficiency and clean energy adoption are prioritized across all
business units, with initiatives including process improvements, the adoption of more energy-efficient
technologies, procurement of renewable energy, installation of solar panels, and transitioning to electric
vehicles.

Investing in Nature and Future Infrastructure

Through several strategic investments in innovation and infrastructure, Manila Water aims to future-proof
its operations while generating social and economic value for all stakeholders.

Underpinning its commitment to environmental stewardship, the company partners with regulators, local
government units, non-government organizations, indigenous people, and local communities to protect and
restore key watersheds, mitigating deforestation and safeguarding water quality. In 2023, Manila Water
protected over 171,902 hectares of watershed and planted 93,624 trees, bringing the total trees nurtured
since 2006 to over 1.55 million.

Additionally, the company has fully utilized its sustainability bond proceeds for existing and future water and
wastewater projects, addressing water security, water system resilience, systems loss management,
wastewater treatment, and the removal of organic pollutants prior to the release of treated wastewater into
water bodies.

Furthermore, Manila Water evolves through research and development and technological innovations to
make its operations more efficient and sustainable. Its innovation projects aim to improve water and
wastewater operations, reduce resource consumption, GHG emissions, and promote a circular economy,
recycling of wastes, and cost efficiency.

Empowering Water Stewards

Manila Water fosters a culture of responsibility, engagement, and empowerment among their workforce and
the broader community they serve. Prioritizing safety, compliance programs are implemented, risk
assessments are conducted, and regular site inspections are performed across all facilities, construction
sites, and offices. Additionally, employees are consistently reminded to prioritize safety through regular
safety bulletins and tips.

Furthermore, the company prioritizes diversity, equity, and inclusion (DEI) through #ToDEI Counts, aimed
at raising DEI awareness. To strengthen their commitment to inclusivity, they have expanded their group
life insurance and healthcare benefits to include common-law and LGBTQIA+ partners of their employees.

Volunteerism is integral to their engagement strategy and social responsibility. Through the Manila Water
Foundation, employees participate in activities to extend water and sanitation access beyond their service
areas. Moreover, employees volunteer for "Pasibol: Puno ng Pag-asa" to mitigate deforestation risks and
preserve raw water quality.

Lastly, Manila Water engages in public consultations organized by government agencies and regulators,
ensuring alignment with community needs and expectations while upholding their service level agreements.

SEC Form 17-A 47

Employees

As of December 31, 2023, the Group had 2,663 employees. Approximately 29% were non-management
employees and 71% held management positions.

The following table presents the number of employees as of December 31, 2023:

Year Former MWSS Direct Hires Subsidiaries Total

2023 144 1,473 1,046 2,663

The following table presents the number of employees by function as of December 31, 2022:

Non-
Group Management Total
Management
Office of the President 14 1 15
Corporate Finance 82 1 83
Enterprise Regulatory Affairs 15 1 16
Legal Services 9 1 10
Office of the CAO 8 4 12
Corporate Communication Affairs 14 6 20
Corporate Human Resources 43 5 48
Corporate Information Technology 30 1 31
Corporate Procurement 38 7 45
Office of EZ COO 2 0 2
Operations 280 176 456
Project Management 170 115 285
East Zone Business Operations 403 66 469
Strategic Asset Management 42 3 45
Engineering 43 13 56
Supply Chain Management 12 0 12
EZ Health, Safety, and Environment 11 1 12
Manila Water Foundation 14 0 14
Non-EZ and International Businesses 665 367 1032
Total 1895 768 2663

Before privatization, the MWSS had 8.4 employees per 1,000 service connections. The Company has
improved this ratio to 1.4 employees per 1,000 service connections as of December 31, 2023. This was
accomplished through improvements in productivity achieved through, among other initiatives, value
enhancement programs, improvements in work processes, employee coaching and mentoring,
transformation of employees into knowledge workers, and various training programs. The Group’s
organizational structure has been streamlined and has empowered employees through decentralized teams
with responsibility for managing territories. In addition, the Company formed multi-functional working teams
which are composed of members of the management team tasked with addressing corporate issues such
as quality and risk, and crisis management.

As of December 31, 2023, 240 or 15.8% of permanent employees of the Company are members of the
Manila Water Employees Union (MWEU). In 2023, the Company and the MWEU concluded negotiations on
a new collective bargaining agreement (CBA). The management of the Company maintains a strong
partnership with the union officers and members, and there has never been any labor strike since its
inception. Grievances are handled in management-led labor councils/meetings. The CBA also provides for
a clear mechanism for the settlement of grievances.

The Group has a two (2)-pronged strategy in talent development – strengthening leadership capabilities and
building and strengthening technical expertise to maintain its leadership in the water industry and contribute
to national development. Programs are being implemented in partnership with the line managers with the
aim of ensuring an agile, enabled, mobile and highly engaged workforce that will support the corporate
growth strategy.

SEC Form 17-A 48

On the Talent Management and Leadership Development front, several initiatives are undertaken to ensure
a strategic and holistic approach to talent development.

Leadership Development: The Group continues to ensure that its leaders are equipped to lead the
organization to achieve corporate goals. Leadership Development trainings are continuously implemented
through Manila Water University (MWU). In 2023, MWU continued to run the company’s s Leadership
Development Program called LAYAG, which stands for Leadership Academy Yielding Accelerated Growth.
Programs within LAYAG comprise of facilitated training runs as well as online self-paced trainings through
the company’s online learning platform, called “MWU Stream.” Implementing the efforts on leadership
development, the same level of focus is given to technical roles where talents occupying highly technical
positions are likewise given technical development through the Manila Water Institute of Technology. It
aims to ensure that the Group strengthens the technical competencies of its talents in its fields of operations.

Employees are also given opportunities to attend training programs that are role or function-specific , based
on their individual development plans (IDPs).

Cadetship Training Program: The Cadetship Training Program is a six (6)-month program that provides
qualified fresh graduates the opportunities for specialized training and work experience that aim for
excellence in business and technical skills. The end in mind is to ensure that the cadets will have strong
understanding of business operations, water and used water processes and project management. Their
functional competencies are honed through a four-month immersion in their actual job assignment where
they are paired with a mentor who will teach them the ropes of the business. Mentors are provided with
competency learning checklist to ensure that every cadet is evaluated the same way and regular
checkpoints happen monthly. A final revalida with the Senior Leadership Team and Management
Committee serves as the culminating learning check for the cadets before they are fully deployed to their
line functions.

Business Zone Leadership School (BZLS): This is a competency-based training to ensure a steady supply
of competent talents in the East Zone Business Operations who can assume the Business Zone Manager
(BZM) role as needed by the business.

The Group ensures that its reward system is market competitive, performance-based, aligned with business
strategies and results, and within regulatory parameters. Periodic review of guaranteed pay structure and
variable pay program is conducted to ensure alignment with industry practices. In 2022, the Group
enhanced the company’s variable pay program to realign the scheme to actual business results. The Group
continues to monitor pay competitiveness and rewards of talents according to their competencies,
achievements, contributions to business objectives and does proactive management to performing talents.

In 2014, the Group implemented the Talent Mobility Program which is a talent management and reward
platform that allows the seamless transition of talents from one Manila Water business unit to another. The
program ensures a reasonable, engaging, and competitive secondment process to NEZ business units and
other businesses outside EZ which covers pre-deployment, actual deployment, and repatriation benefits
and support for secondees.

In 2018, the Group launched the Localization Program to transition and localize citizenship of deployed
talents to subsidiaries where they are performing identified local roles.

In 2001, pursuant to the CA, the Company adopted the Employee Stock Option Plan (ESOP). The ESOP
was instituted to allow employees to participate directly in the growth of the Company and enhance the
employees’ commitment toward its long-term profitability. In 2005, the Company adopted an Employee
Stock Ownership (ESOWN) Plan. As part of its incentives and rewards system in 2022, the Stock Incentive
Plan (SIP) was introduced for select executives as part of the Company’s long term incentive programs.

Also, in 2005, the Company's BOD approved the establishment of an enhanced retirement and welfare plan.
The plan is being administered by a Retirement Committee, which also has the authority to make decisions
on the investment parameters to be used by the trustee bank. In 2019, the Company’s retirement plan was
amended into a Multi-employer Retirement Plan to include its subsidiaries. Implementation of said plan will
commence upon receipt of the Bureau of Internal Revenue’s approval.

SEC Form 17-A 49

Over and above these benefit and reward schemes, the Group gives recognition for employees who best
exemplify the Group’s culture of excellence through the Chairman’s Circle (C2) Awards for senior managers,
the President’s Pride due to Performance (P3) honors for middle managers, and the Huwarang
Manggagawa (Model Employee) Awards for the rank-and-file employees. Nine (9) of the Group’s model
employee awardees have also been recognized as ‘The Outstanding Workers of the Republic’ (TOWER)
Awardees by the Rotary Club of Manila from 1999 to 2009, and then most recently in 2019. In 2020, the
Group also started to recognize teams who worked and collaborated to achieve greater goals for the
organization by introducing the Gawad Kapit Bisig and Kaanib sa Agos awards.

Awards and Recognitions Received by the Company

The exemplary performance of its employees has earned for Manila Water several awards and recognitions.
Over the past twenty-six (26) years, the Company has been the recipient of numerous awards.

A landmark recognition was earned by Company when it was cited the 2006 Employer of the Year by the
People Management Association of the Philippines. Another prestigious award earned by the Company was
the Asian Human Capital Award given by the Singaporean government in 2012. Then in 2022, Manila Water
became the first water company from the Philippines and from any developing country to earn the highly
coveted Water Company of the Year recognition at the Global Water Awards.

More recently, Manila Water received the following accolades: Philippines’ Most Outstanding Company in
the Utilities Sector in Asiamoney’s Asia’s Outstanding Companies Poll; FinanceAsia’s Best Small-Cap
Company and Best Utilities Company in the Philippines; Department of Energy’s Special Award in Energy
Efficiency Excellence for Boracay Water's "Waves of Change" Program during the Energy Efficiency
Excellence Awards; International Federation of Consulting Engineers (FIDIC) Client of the Year and Highly
Commended for the Project of the Year Award for Calawis 80-Million-Liters-Per-Day Water Treatment Plant
Project at the Annual FIDIC Contract User’s Conference and Awards; Bureau of Fire Protection - National
Capital Region (BFP-NCR) Outstanding Partner for Fire Safety Award; Department of Environment and
Natural Resources – Environmental Management Bureau CALABARZON’s Recognition to Manila Water
Philippine Ventures (MWPV); Asia CEO Awards’ Circle of Excellence CSR Company of the Year Award;
Department of Health’s Bronze Awards for Manila Water Foundation’s "WASH in Pandemic," "#SafeWASH
in Schools," and "WASH O’clock" at the Healthy Pilipinas Awards for Partners; World Oral Health Day
Awards’ Best Branded Photo for Manila Water Foundation's Philippine Campaign Celebrations of World
Oral Health Day; Energy Efficiency and Conservation Award at the European Chamber of Commerce of the
Philippines’ (ECCP) Europa Awards on Sustainability; All-Platinum Honors in the Best Environmental
Excellence Award, Best Workplace Practices Award and Excellence In Provision Of Literacy and Education
Award (USD 500 Million To USD 1 Billion Market Capitalization) at the 15th Annual Global CSR and ESG
Awards; People Management Association of the Philippines’ (PMAP) Employer of the Year Regional
Exemplar - National Capital Region; Silver Anvil Awards for Manila Water’s "BOW: Balita on Wednesdays"
Program and Boracay Water's "H2O: Highland to Ocean" Program at the 58th Anvil Awards of the Public
Relations Society of the Philippines (PRSP)

Manila Water also showed significant enhancement in its Environmental, Social, and Governance (ESG)
ratings, with notable improvements across both MSCI and Sustainalytics platforms. MSCI rating has
advanced from B to BB, driven by the company's continued dedication to environmental stewardship.
Sustainalytics, one of the world’s leading ESG research and analysis companies, gave Manila Water a 5-
point improvement in its ESG Risk rating, from 27.5 to 22.1. This reduction signifies the company's
decreased exposure to various material ESG issues, indicating a more robust risk management approach.
Furthermore, Manila Water achieved a 9-point improvement in its management approach score, rising from
53.2 to 62.2. This signifies the strength and efficacy of the company's ESG programs, practices, and policies.
The company also earned its very first ‘A-‘ score in water security from the renowned environmental non-
profit organization, CDP. CDP runs the global disclosure system for investors, companies, cities, states,
and regions to manage their environmental impacts.

A complete list of Manila Water’s awards is available at https://www.manilawater.com/corporate/about-

us/our-company/awards-and-citations.

SEC Form 17-A 50

Related Party Transactions

To further instill the Company's policies on related party transactions, the BOD adopted the Policy on
Related Party Transactions (the "RPT Policy"). The RPT Policy confirms that the Company and its
subsidiaries shall enter into any related party transactions solely in the ordinary course of business, on
ordinary commercial terms, and on the basis of arm's length arrangements, which shall be subject to
appropriate corporate approvals and actions of the Company or the related parties, as the case may be.

Any related party transactions entered into by the Company and its affiliates shall be in accordance with
applicable law, rules, and regulations, and the RPT Policy. Related party transactions entered into by the
Company with one or more of its directors or officers are voidable at the option of the Company, unless the
transaction is deemed fair and reasonable under the circumstances and at arm's length, and the procedure
for the procurement and approval for similar transactions was strictly complied with.

To ensure that transactions are at arm’s length terms and to promote the best interest of the Company and
its shareholders, the Company may adhere to opening the transaction to a bidding process or any other
price discovery mechanism that the BOD may deem appropriate.

The approval, award, processing and payment of related party transactions follow the same procedures as
the other transactions and contracts of the Company. No unusual privilege or special treatment is afforded
a Related Party.

The RPT Policy provides for the process of approving related party transactions, as well as the implications
for violations. In addition, the RPT Policy prohibits related party transactions involving loans and/or financial
assistance to a director and loans and or financial assistance to members of the Management, except when
allowed pursuant to an established Company benefit or plan. Under the RPT Policy, the approval of the
Related Party Transactions Committee is required for material related party transactions.

On October 28, 2019, the Related Party Transactions Committee approved the amendments to the
Company’s Policy on Related Party Transactions in order to comply with the provisions of the Rules on
Material Party Transactions for Publicly Listed Companies of the SEC. The amendments to the Company’s
Policy were ratified by the Board of Directors during its Regular Meeting on November 26, 2019.

On November 26, 2019, the BOD approved the amendments to the Company’s RPT Policy in order to
comply with the provisions of the Rules on Material Related Party Transactions for Publicly Listed
Companies of the SEC. The amendments updated the definition of Company-Recognized Material Related
Party Transactions, SEC-Defined Materiality Threshold, Related Party Registry, Related Party Transactions,
Related Parties, Affiliate, Associate, Substantial Shareholder, and Significant Influence.

On June 3, 2021, the Charter of the RPT Committee was amended to reduce the minimum number of
committee members from four (4) to at least three (3), and at least two (2) members shall be independent
directors of the Company.

SEC Form 17-A 51

Risks Disclosure

Risk Assessment was conducted using top-down and bottom-up approaches to produce this year’s top
enterprise risks. A year-end reassessment was also implemented to gauge the effectiveness of the
Company's mitigation methods and strategies.

No. 2023 Top Enterprise Risks Mitigation Strategies and Updates

1 Government and Regulatory

Failure to align, plan, meet The Company continued to implement the approved
obligations, requirements and terms 5-Year Rate Rebasing Service Improvement Plan to
called for by the prevailing meet the Service Obligation committed therein.
Concession Agreements which may Rehabilitation of existing facilities, implementation of
result in payment of fines/penalties, operational adjustments and including the new general
damage in reputation, and termination effluent standards in future sewage treatment facility
of said agreements. designs were conducted during the year.

Failure to secure regulatory approvals Tariff adjustments were implemented by MWC and
on tariff adjustments to ensure full certain subsidiaries in 2023 as approved by respective
cost recovery with the targeted rate of regulators
return.

2 Water Supply

Failure to maintain or prepare To ensure adequate raw water supply, Manila Water
sufficient sources of raw water to completed short and medium-term water source
meet the production plan and development projects such as the Wawa-Calawis and
customer demand at any time for Laguna Lake East Bay Treatment Plants.
the duration of concession or
PPP agreement. Mitigation plans were set early this year to prepare for
the expected impact of El Niño until next year. Manila
Water worked extensively to prepare its operations even
Inability to manage commercial and before the onset of El Niño through the implementation
physical water losses and maintain of its Non-Revenue Water recovery program, water
non-revenue water (NRW) at supply and network projects, regular maintenance and
acceptable level. monitoring of deepwells, installation of line boosters,
continuous water supply, pressure, network and intake
management, water tanker maintenance and
procurement of spare materials for network and facility
management.

To reduce NRW, Manila Water continues to repair and

replace damaged network and implement pressure
management initiatives.

SEC Form 17-A 52

 No. 2023 Top Enterprise Risks Mitigation Strategies and Updates

3 Commercial Operations

Failure to meet growth in both The Group established billed volume recovery
demand and revenue. initiatives, the progress of which is being evaluated
regularly. Initiatives included promotional programs for
Inability to manage unfavorable new connections and reconnections, increased meter
fluctuations in prices of commodities testing and replacement, investigations of suspected
(raw materials, fuels, chemicals, illegal connections, implementation of key account
energy). development plans, and continued conversion of
identified deep well users. Convenient payment options
were also introduced and implemented.

The Company established framework agreements and

negotiated contract terms with major industry providers
and explored alternative materials and vendors.
4 Financial Risk

Failure to source and provide timely The Group continues to maintain current and establish
and cost-efficient funding to cover new short-term credit facilities, ensure availability of and
operating requirements, capital draw from short-term lines, and secure term loan to
expenditure commitments, capital build up and maintain liquidity buffers.
requirements of new businesses, and
funding of debt obligations in both The board-approved Foreign Exchange Risk
Philippine Peso and Foreign Management Policy and foreign exchange hedging
Currency. structures intended to address foreign exchange risk
were implemented and in full effect.

5 Cybersecurity The Group is committed in continuously improving

security and resiliency based on zero trust principle to
Failure to protect critical company protect our IT and OT environment from cyberattacks.
data, information and systems from We have been rated by a third party as having a
internal and external threats. reasonable cybersecurity program with mature
characteristics comparable with companies in the same
industry/size. Our cyber maturity has increased through
enforcing stricter security policies and investing in
leading security and disaster recovery solutions that
strengthened our protection, detection, response, and
recovery capabilities. Security awareness culture
improved through mandatory trainings and regular
campaigns .

OTHER MATTERS

The Group has not been involved in any bankruptcy, receivership or similar proceeding as of
December 31, 2023. Further, except as discussed above and in Note 1 of the Audited Consolidated
Financial Statements, the Group has not been involved in any material consolidation or purchase or sale of
a significant amount of assets not in the ordinary course of business. The Group is not dependent on a
single customer or a few customers, the loss of any or more of which would have a material adverse effect
on the Group.

SEC Form 17-A 53

Item 2. Properties

The Group has various properties across the Philippines which are generally used in its provision of water,
integrated used water, sewerage and sanitation, distribution services, pipeworks, engineering, procurement,
and management services. The Group’s properties are either company-owned or are required to be turned
over to grantors of the Group’s concession agreements, joint venture agreements, or other similar
agreements resulting to service concession arrangements granting the Group the right to provide water and
used water services.

Property, Plant and Equipment

Major property and equipment of the Group classified as “Plant and technical equipment” are as follows:

Locations Types of Assets

Metro Manila Water service connection
Bataan Water network
Batangas Wells and facilities
Bicol Distribution reservoir and boosters
Bulacan Transmission and distribution mainline
Cavite Sewer facilities
Laguna Sewer network
Nueva Ecija
Pampanga
Quezon
Rizal
Cebu
Iloilo
Negros Occidental
Davao

Aside from those mentioned above, the Group utilizes other property and equipment in the course of its
ordinary business consisting of land, office furniture and equipment, transportation equipment, leasehold
improvements, and software. Further details of the Group’s property, plant and equipment are in Note 9 of
the Audited Consolidated Financial Statements.

Service Concession Assets

The Group accounts for its concession agreements with MWSS, CWD, TIEZA, CDC, OWD, BuWD and
PGL; JVAs with CCWD, TnWD, PAGWAD, and LWD; SMA with CIWD; Wawa Bulk Water Agreement and
MOAs with the Municipalities of Sta. Barbara, San Fabian, and Manaoag under the Intangible Asset model
as it receives the right (license) to charge users of public service. Except for Wawa Bulk Water Agreement,
under the Group’s concession arrangements, the Group is granted the sole and exclusive right and
discretion during the concession period to manage, occupy, operate, repair, maintain, decommission and
refurbish the identified facilities required to provide water services. The legal title to these assets shall
transfer to MWSS, CWD, TIEZA, CDC, OWD, BuWD, PGL, CCWD, TnWD, PAGWAD, LWD, and CIWD
(under the SMA) at the end of the concession period. Meanwhile, the legal title to the assets covered by the
MOAs with the Municipalities of Sta. Barbara, San Fabian, and Manaoag shall remain with North Luzon
Water. For Wawa Bulk Water Agreement, the sole and exclusive right and discretion during the concession
period to manage, occupy, operate, repair, maintain, decommission and refurbish the identified facilities is
granted to the joint venture partner.

During the construction phase of the arrangements, the Group’s contract asset (representing its
accumulating right to be paid for rehabilitation works) is presented as part of “Service concession assets”
(SCA) for Intangible Asset model is disclosed in Note 10 of the Audited Consolidated Financial Statements.
The SCA also include the present value of the service concession obligations assumed by the Group at
drawdown date and other local component costs and cost overruns paid by the Group, as well as additional
costs of rehabilitation works incurred.

SEC Form 17-A 54

Assets Held in Trust under the Group’s Concession or Joint Venture Agreements

MWSS
The Company was granted the right to operate, maintain in good working order, repair, decommission and
refurbish the movable property required to provide the water and sewerage services under the Concession
Agreement. The legal title to all movable property in existence at the Commencement Date, however, shall
be retained by MWSS and upon expiration of the useful life of any such movable property as may be
determined by the Company, such movable property shall be returned to MWSS in its then-current condition
at no charge to MWSS or the Company.

The Concession Agreement also provides for the Concessionaires to have equal access to MWSS facilities
involved in the provision of water supply and sewerage services in both the East and West Zones including,
but not limited to, the MWSS management information system, billing system, telemetry system, central
control room and central records.

CWD
On October 23, 2017, Calasiao Water was granted the right to develop, manage, operate, maintain, repair,
refurbish and improve, expand, and as appropriate, decommission all fixed and movable assets, including
movable property but excluding retained assets, required to provide water delivery and sanitation services
in the Municipality of Calasiao. Legal title to all facilities (including any fixed assets resulting from the
exercise of rights and powers), other than new assets contributed by Calasiao Water, shall remain with
CWD.

CCWD
On July 3, 2019, Calbayog Water was granted the right to operate, maintain, repair, improve, expand, renew,
and as appropriate, decommission all fixed and movable assets, including movable property but excluding
retained assets, required to provide water supply and sanitation services in the service area of CCWD. Legal
title to all facilities (including any fixed assets resulting from the exercise of rights and powers), other than
new assets contributed by Calbayog Water, shall remain with CCWD.

TIEZA
Boracay Water was granted the right to operate, maintain in good working order, repair, decommission and
refurbish all fixed and movable property (except retained assets) required to provide the water and sewerage
services under its concession agreement with TIEZA. The legal title to all these assets in existence at the
commencement date, however, shall be retained by TIEZA and upon expiration of the useful life of such
assets as may be determined by Boracay Water, such assets shall be returned to TIEZA in its then-current
condition at no charge to TIEZA or Boracay Water.

CDC
Clark Water was granted the right to finance, design and construct new facilities and to manage, exclusively
possess, occupy, operate, repair, maintain, decommission, and refurbish all facilities, except private deep
wells, to provide and manage the water and wastewater-related services in the CFZ. Legal title to all facilities
(including any fixed assets resulting from the exercise of rights and powers), other than new assets
contributed by Clark Water, shall remain with CDC.

BuWD
On June 14, 2019, Bulakan Water was granted the right to operate, maintain, repair, improve, expand,
renew, and as appropriate, decommission all fixed and movable assets, including movable property but
excluding retained assets, required to provide water delivery and sanitation services in the service area of
BuWD. Legal title to all facilities (including any fixed assets resulting from the exercise of rights and powers),
other than new assets contributed by Bulakan Water, shall remain with BuWD.

TnWD
On February 4, 2019, South Luzon Water was granted the right to operate, maintain, repair, improve,
expand, renew, and as appropriate, decommission all fixed and movable assets, including movable property
but excluding retained assets, required to provide water supply and sanitation services in the service area
of TnWD. Legal title to all facilities (including any fixed assets resulting from the exercise of rights and
powers), other than new assets contributed by South Luzon Water, shall remain with TnWD.

SEC Form 17-A 55

OWD
On October 12, 2017, Obando Water was granted the right to manage, operate, maintain, repair, refurbish
and improve, expand and as appropriate, decommission all fixed and movable assets, including movable
property but excluding retained assets, required to provide water delivery and sanitation services in the
Municipality of Obando. Legal title to all facilities (including any fixed assets resulting from the exercise of
rights and powers), other than new assets contributed by Obando Water, shall remain with OWD.

PGL
Laguna Water was granted the right to manage, occupy, operate, repair, maintain, decommission and
refurbish the property required to provide water services under its concession agreement with PGL. The
legal title of all property in existence at the commencement date shall be retained by PGL. Upon expiration
of the useful life of any such property as may be determined by Laguna Water, such property shall be
returned to PGL in its then condition at no charge to PGL or Laguna Water.

PAGWAD
On January 21, 2019, Laguna Water was granted the right to operate, finance, maintain, repair, improve,
expand, renew, and as appropriate, decommission all fixed and movable assets, including movable property
but excluding retained assets, required and exclusively used to provide water delivery and sanitation
services in the service area of PAGWAD. Legal title to all facilities (including any fixed assets resulting from
the exercise of rights and powers), other than new assets contributed by Laguna Water, shall remain with
PAGWAD.

LWD
On July 3, 2019, Aqua Centro was granted the right to operate, maintain, repair, improve, expand, renew,
and as appropriate, decommission all fixed and movable assets, including movable property but excluding
retained assets, required to provide water supply in the service area of LWD. Legal title to all facilities
(including any fixed assets resulting from the exercise of rights and powers), other than new assets
contributed by Aqua Centro, shall remain with LWD.

Additional details on the Group’s assets held in trust are disclosed in Note 25 of the Audited Consolidated
Financial Statements.

Leases

The Group leases office space, parking, storage and plant facilities, land, and right-of-way wherein it is the
lessee. The Group’s leases are disclosed in Note 11 of the Audited Consolidated Financial Statements.

Mortgages, Liens, or Encumbrances

South Luzon Water, Aqua Centro, Boracay Water, Laguna Water, Clark Water, and MWPV have assigned
their rights under their respective concession agreements or project documents as their loan collateral, while
Cebu Water and Tagum Water’s loans are secured by real estate mortgages on real assets. Additional
details of the Group’s loans are disclosed in Note 15 of the Audited Consolidated Financial Statements.

SEC Form 17-A 56

Item 3. Legal Proceedings

Legal Proceedings

The Company is presently involved in the following major cases:

1. The Republic of the Philippines, represented by the Metropolitan Waterworks and Sewerage
System vs. Manila Water Company, Inc.
Civil Case No. R-QZN-21-08040-CV
Branch 88, Regional Trial Court, Quezon City

The Republic of the Philippines filed a Petition dated July 26, 2021 for Recognition of Foreign
Consent Judgment for the recognition of the Consent Judgment in “Manila Water Company, Inc. vs.
The Republic of the Philippines, Case No. 2017-01” before the Permanent Court of Arbitration.

Manila Water Company, Inc. did not interpose any objection to the recognition of the said Consent
Judgment. The Court then dispensed with the presentation of Petitioner’s evidence.

Petitioner filed its Formal Offer of evidence dated June 23, 2022 and the case is deemed submitted
for Resolution.

2. Manila Water Company, Inc. and Maynilad Water Services, Inc. vs. Hon. Borbe, et al.
CBAA Case No. L-69
Central Board of Assessment Appeals ("Central Board")

Manila Water Company, Inc. and Maynilad Water Services, Inc. vs. Local Board of
Assessment Appeals of the Province of Bulacan and The Province of Bulacan, the
Municipality of Norzagaray, Maria Teresa L. Camacho, in her capacity as Provincial
Treasurer, Filipina De Mesa, in her capacity as Municipal Treasurer of the Municipality of
Norzagaray, Bulacan

Metropolitan Waterworks and Sewerage System as Petitioner-Appellees-In-Intervention

En Banc, Court of Tax Appeals

This is an appeal from the denial by the Local Board of Assessment Appeals of Bulacan Province
(the "Local Board") of the Company's (and Maynilad Water Services, Inc.'s [Maynilad]) appeal from
the Notice of Assessment and Notice of Demand for Payment of Real Property Tax in the amount
of ₱357,110,945 made by the Municipal Assessor of Norzagaray, Bulacan. The Company is being
assessed for half of the amount.

In a letter dated April 3, 2008, the Municipal Treasurer of Norzagaray and the Provincial Treasurer
of the Province of Bulacan, informed both the Concessionaires (the Company and Maynilad) that
their total real property tax accountabilities have reached ₱648,777,944.60 as of December 31,
2007. This amount, if paid by the Concessionaires, will ultimately be charged to the customers as
part of the water tariff rate. The Concessionaires (and the MWSS, which intervened as a party in
the case) are thus contesting the legality of the tax on a number of grounds, including the fact that
the properties subject of the assessment are owned by MWSS, which is an instrumentality of the
National Government exempt from taxation under the Local Government Code.

In an Order dated July 15, 2016, the Central Board denied the motion for reconsideration of the
Municipality of Norzagaray, Bulacan for which it filed a Petition for Certiorari with the Court of Tax
Appeals ("CTA") on August 24, 2016. In compliance with the directive of the CTA, the Company
filed a Comment dated January 3, 2017. MWSS and Maynilad have likewise filed their respective
Comments.

On January 31, 2017, the CTA requested the parties to file their respective memoranda.
The Company filed its Memorandum on March 27, 2017. Maynilad filed its Memorandum dated
March 16, 2017 while the Office of the Solicitor General ("OSG") filed its Memorandum last
March 29, 2017.

SEC Form 17-A 57

 On May 10, 2018, the CTA rendered a Decision denying the Petition for Certiorari finding that there
was no grave abuse of discretion on the part of the Central Board.

In an Order dated June 17, 2021, the CTA ordered the remand of the records back to the CBAA for
trial to resume. The CBAA issued an Order dated March 7, 2022 informing the parties that the case
was set for status conference on April 6, 2022 and requiring the parties and their counsel to furnish
it with their contact information. Another status conference was set on April 27, 2022. During this
hearing, the parties were directed to file their respective Memoranda. The Company filed its
Memorandum on July 15, 2022.

In a Decision dated August 25, 2022, the CBAA ruled in MWCI’s favor. It found that:

a. MWSS is a government instrumentality, not a GOCC, and is thus exempt from real property tax;
b. Being owned by a government instrumentality and for public use and service, the Common
Purpose Facilities (CPF) are properties of public dominion; and
c. As a mere agent of MWSS, MWCI is not a “beneficial user” of the CPF because it is bound to
use the CPF because it is bound to use the CPF only for MWSS’ purpose (e.g. to operate and
maintain MWSS’ waterworks and sewerage system). Accordingly, the Concession Agreement
is not akin to a lease agreement, which is the type of agreement that gives the lessee beneficial
use.
d. In any case, even assuming the Company is not a mere agent of MWSS, its use of the CPF
does not constitute a commercial and profit-making purpose because the rate-setting
methodology is based on the recovery of its expenditures.

The Province of Bulacan thereafter filed a Petition for Review dated October 11, 2022 to contest the
decision of the Central Board before the Court of Tax Appeals (CTA). Pending receipt of any order
or resolution to comment from the CTA, MWCI filed a Motion to Dismiss on 9 December 2022
pointing out the procedural defects in the Province’s Petition. In a Resolution dated December 1,
2022, the CTA En Banc itself noted a few formal issues regarding Petitioner Province of Bulacan’s
Petition for Review, among others, on the parties impleaded and the caption of the Petition. In said
December 1, 2022 Resolution, in the interest of orderly procedure, the CTA En Banc directed the
Province to “take appropriate action.” Subsequently, MWCI received the Comment/Opposition to
the Motion to Dismiss filed by the Provincial Legal Office of Bulacan on February 14, 2023, to which
MWCI filed a Motion for Leave to File Reply with Reply on March 8, 2023.

In a Resolution dated April 13, 2023, the CTA En Banc noted that Petitioners have yet to comply
with its December 1, 2022 Resolution and gave it a final period of 5 days to do so, and to submit an
explanation for the non-compliance. The CTA likewise noted deficiencies in the jurat portion of the
Verification and the Affidavit of Service attached to the Petition. The Petitioners were given 5 days
to correct said deficiencies. In the meantime, the CTA held off on resolving MWCI’s Motion to
Dismiss.

In a Resolution dated May 26, 2023, the CTA En Banc dismissed, without prejudice, the Petition for
Review filed by the Province of Bulacan due to the latter’s repeated failures to comply with the
directives of the Court to correct the deficiencies of the Petition as directed in the CTA En Banc’s
Resolutions dated December 1, 2022 and April 13, 2023.

3. Manila Water Company, Inc. vs. The Regional Director, Environmental Management Bureau-
National Capital Region, et al.

G.R. No. 206823, (DENR-PAB Case No. NCR-00794-09, CA-G.R. No. 112023), Supreme Court

This case arose from a complaint filed by the OIC Regional Director Roberto D. Sheen of the
Environmental Management Bureau-National Capital Region ("EMB-NCR") before the Pollution
Adjudication Board ("PAB") against the Company, Maynilad and the MWSS for alleged violation of
R.A. No. 9275 (Philippine Clean Water Act of 2004, or “CWA”), particularly the five-year deadline
imposed in Section 8 thereof for connecting the existing sewage line found in all subdivisions,
condominiums, commercial centers, hotels, sports and recreational facilities, hospitals, market
places, public buildings, industrial complex and other similar establishments including households,
to an available sewerage system. Two (2) similar complaints against Maynilad and MWSS were
consolidated with this case.
SEC Form 17-A 58
 On April 22, 2009, the PAB, through the Department of Environment and Natural Resources
("DENR") Secretary and Chair Jose L. Atienza, Jr., issued a Notice of Violation finding the Company,
Maynilad and MWSS to have committed the aforesaid violation of R.A. 9275. Subsequently, a
Technical Conference was scheduled on May 5, 2009. In the said Technical Conference, the
Company, MWSS and Maynilad explained to the PAB their respective positions and it was
established that DENR has a great role to play to compel people to connect to existing sewage lines
and those that are yet to be established by the Company and Maynilad.

In addition to the explanations made by the Company during the Technical Conference, the
Company together with MWSS and Maynilad wrote a letter dated May 25, 2009 and addressed to
the respondent Secretary where they outlined their position on the matter.

In response to the May 25, 2009 letter, the OIC Regional Director for NCR, the Regional Director of
Region IV-A and the Regional Director of EMB Region III submitted their respective Comments.
The Company thereafter submitted its letter dated July 13, 2009 to the PAB where it detailed its
compliance with the provisions of R.A. No. 9275 and reiterated its position that the continuing
compliance should be within the context of the Company's Concession Agreement with MWSS.
Despite the explanations of the Company, the PAB issued an Order dated October 7, 2009 which
found the Company, Maynilad and MWSS to have violated R.A. 9275. The Company filed its Motion
for Reconsideration dated October 22, 2009 which the PAB denied in an Order dated December 2,
2009. Hence, the Company filed its Petition for Review dated December 21, 2009 with the Court of
Appeals. The Company thereafter filed an amended Petition for Review dated January 25, 2010.

In a Decision dated August 14, 2012, the Court of Appeals denied the Company's Petition for
Review and on September 26, 2012, the Company filed a Motion for Reconsideration of the Court
of Appeals' Decision.

On April 29, 2013, the Company received the Resolution dated April 11, 2013 of the Court of
Appeals, denying its Motion for Reconsideration.

The Company has filed its appeal from the Decision and Resolution of the Court of Appeals in the
form of a Petition for Review on Certiorari with the Supreme Court on May 29, 2013. In this Petition,
the Company reinforced its argument that it did not violate Section 8 of R.A. 9275 as it was able to
connect existing sewage lines to available sewage facilities, contrary to the findings of the Court of
Appeals.

In a Decision dated August 6, 2019, the Supreme Court ruled against the Company and held it
jointly and severally liable with MWSS for ₱921,464,184 and a fine of ₱322,102/day until full
compliance with Sec. 8 of the CWA. The total amount of fines imposed by the Decision shall
increase by 10% every two years and earn legal interest of six percent (6%) per annum from finality
and until full satisfaction thereof.

On October 2, 2019, the Company timely filed a Motion for Reconsideration raising, among others,
the following arguments: (a) Manila Water is compliant with its obligations and responsibilities under
Section 8 of the CWA; (b) in MMDA vs. Concerned Citizens of Manila Bay (2011), the Supreme
Court ruled that concessionaires had until 2037 to complete the obligations imposed by the
Concession Agreement; (c) Section 8 of the CWA cannot be interpreted as requiring MWSS and its
concessionaires to install a complete centralized sewerage system within five (5) years; (d)
providing a complete centralized sewerage system within the 5-year timeframe would entail a
substantial amount of time and money to complete, not to mention that it would monumentally
exacerbate an already burdensome traffic situation in Metro Manila.

On December 18, 2019, the Company received a copy of the Resolution dated November 5, 2019,
which required the adverse parties to comment on the (a) Motion for Reconsideration filed by the
Company; (b) Motion for Reconsideration dated 2 October 2019 filed by Maynilad; and (c) Motion
for Reconsideration dated October 1, 2019 filed by MWSS.

SEC Form 17-A 59

 On July 1, 2020, the Company received a copy of the Consolidated Comment (On the separate
Motions for Reconsideration filed by petitioners Metropolitan Waterworks and Sewerage System,
Maynilad Water Services, Inc., and Manila Water Company, Inc.) dated June 24, 2020
(“Consolidated Comment”) filed by the Office of the Solicitor General in behalf of the adverse parties.
In response thereto, the Company filed a Motion for Leave to File and Admit Attached Reply dated
August 17, 2017 (“Motion for Leave and Admit Attached Reply”) with an attached Reply [Re:
Consolidated Comment (On the separate Motions for Reconsideration filed by petitioners
Metropolitan Waterworks and Sewerage System, Maynilad Water Services, Inc., and Manila Water
Company, Inc.) dated June 24, 2020] dated August 17, 2020 (“Reply”).

On November 3, 2020, the Company received a Resolution dated September 8, 2020 issued by the
Supreme Court, which relevantly: (a) noted the Consolidated Comment; (b) granted the Motion for
Leave and Admit Attached Reply; and (3) noted the Reply filed by the Company.

On July 26, 2021, the Company received a Notice of Resolution dated April 27, 2021. In said Notice,
the Supreme Court directed Atty. Al S. Vitangcol III to refrain from filing any more pleadings for G.R.
No. 212581 considering that the aforementioned case was already deconsolidated from the instant
case.

On January 26, 2022, the Company filed a Manifestation (Re: Developments relevant to the Motion
for Reconsideration dated October 2, 2019) to inform the Supreme Court that the Company has
been granted a legislative franchise which includes a provision that requires it to submit a
“completion plan” for the establishment and operation of water, sewerage, and sanitation projects
with the end goal of achieving one hundred percent (100%) water and combined sewerage and
sanitation coverage over the Company’s concession area by 2037. The grant of the legislative
franchise supports the position taken by the Company in its Motion for Reconsideration that the
obligation under the CWA does not mandate the installation of a complete centralized sewerage
system within five (5) years from the passage of the CWA.

On October 21, 2022, the Company received a copy of the Resolution on the Motion for
Reconsideration dated July 19, 2022 holding MWCI and MWSS jointly and solidarily liable for the
payment of fines for the base amount of ₱30,000/day from May 07, 2009 until January 11, 2022
subject to a 10% increase every 2 years, or in the total amount of ₱202,256,726 with legal interest
at the rate of 6% per annum from finality until fully satisfied. The Company tendered payment to
DENR subject to its reservation that any excess payment should be returned to the Company in the
event that the Supreme Court determines that the fine should only amount to ₱181,635,299.
The Company also manifested to the Supreme Court the DEN's refusal to accept payment.

The DENR filed a Motion for Partial Reconsideration dated November 02, 2022 to which the
Company through counsel filed its Comment.

On January 17, 2023, the Supreme Court rendered a resolution denying the DENR’s Motion for
Partial Reconsideration and affirming its Resolution dated 19 July 2022 with finality. The Company
has paid the fine of ₱202,256,726 to DENR. It will no longer seek reimbursement from MWSS for
its share in the fine.

4. The Consolidated Cases:

A. Waterwatch Coalition, Inc. et al. vs. Ramon Alikpala, MWSS, et al.,

G.R. No. 207444
B. Water for All Refund Movement vs. MWSS, et al.,
G.R. No. 208207
C. Javier vs. MWSS, et al.,
G.R. No. 210147
D. ABAKADA Guro Party List vs. MWSS, et al.
GR No. 213227
E. Neri Colmenares and Carlos Isagani Zarate, Representatives of Bayan Muna Partylist vs.
Cesar V. Purisima, in his capacity as the Secretary of Finance, et al.
G.R. No. 219362

SEC Form 17-A 60

 A. The Waterwatch Petition:

On June 25, 2013, the Company received a copy of the Petition for Certiorari and Mandamus
with Prayer for the Issuance of a Temporary Restraining Order dated June 20, 2013 filed by the
Waterwatch Coalition ("Waterwatch"), Inc. The issues raised in the Petition are as follows:
a. The Concession Agreements are unconstitutional for granting inherent sovereign
powers to the Concessionaires which insist they are private entities and mere agents
of the MWSS;
b. The Concessionaires are public utilities;
c. The Concession system of MWSS, the Company and Maynilad is in a state of
regulatory capture;
d. The Concession Agreements are State Contracts and cannot invoke the non-
impairment clause in the Constitution;
e. The Concessionaires have no vested property rights; and
f. MWSS is in a state of regulatory capture.

B. The WARM Petition

On August 14, 2013, the Company received a copy of a Petition for Certiorari, Prohibition and
Mandamus dated August 5, 2013 filed by the Water for All Refund Movement ("WARM"). The
issues raised in the WARM Petition are as follows:
a. The Concession Agreements unduly grant to the Concessionaires the exercise of
governmental powers even without the benefit of legislation or, at the very least, a
franchise for such purpose;
b. Concessionaires are performing public service and are therefore, governed by the
Public Service Law, and subject to the 12% rate of return cap;
c. Concessionaires are public utilities, not mere agents or contractors of the MWSS;
d. Public utility or not, Concessionaires may not pass on their income taxes to the water
consumers as expenditures; and
e. The Concession Agreements cannot cause the creation of a Regulatory Office, a public
office performing public functions, or even source its funding from the Concessionaires,
which are the very same entities it is supposed to regulate.

C. The Javier Petition

On January 3, 2014, the Company received a copy of a Petition for Certiorari, Prohibition and
Mandamus dated December 13, 2013 filed by the Virginia S. Javier, et.al, ("Javier") who were
suing in their capacity as consumers/customers of the Concessionaires. The issues raised in
the Javier Petition are as follows:
a. The Concession Agreements are unconstitutional and/or ultra vires for being
delegations of sovereign power without the consent of Congress;
b. The Concessionaires are public utilities;
c. Respondents have improperly implemented RORB calculations for purposes of
establishing tariffs;
d. The Concession Agreements are not protected by the non-impairment clause;
e. Respondents should be enjoined from proceeding with arbitration; and
f. MWSS is in a state of regulatory capture.

On February 4, 2014, the Company received a copy of the Supreme Court's Resolution dated
January 14, 2014 consolidating the three (3) cases. The Company filed a Consolidated
Comment on the aforesaid Petitions. The arguments raised by the Company in response to the
Petitions are as follows:
a. The Concession Agreements are valid, legal and constitutional as these have statutory
basis and do not involve any grant or delegation of the "inherent sovereign powers of
police power, eminent domain and taxation";
b. The Concessionaires are not public utilities in themselves but are mere agents and
contractors of a public utility (MWSS);

SEC Form 17-A 61

 c. The Concession Agreements are protected by the non-impairment clause. Petitioners
cannot invoke police power for courts to nullify, modify, alter or supplant the Concession
Agreements. Police power is exercised by Congress, through the enactment of laws for
the general welfare. No such law or enactment is involved in this case. If and when
Congress passes a law affecting the Concession Agreements, only then will it be proper
to examine the interplay between police power vis-a-vis due process and the non-
impairment clause;
d. The rates set under the Concession Agreements are compliant with the 12% rate of
return cap in the MWSS Charter. Not being public utilities but mere agents of the
MWSS, the Concessionaires are not subject to audit by the Commission on Audit
(COA); and
e. The Concessionaires are authorized to pass on corporate income taxes to water
consumers.

D. The ABAKADA-Guro Petition

On September 22, 2014, the Company received another Petition for Certiorari and Prohibition
filed by the ABAKADA-Guro Party List, represented by Atty. Florante B. Legaspi, Jr. This
Petition was likewise consolidated with the Waterwatch, WARM and Javier Petitions due to
similarities in the issues raised.

In particular, the Petition questions the constitutionality of the Concession Agreements entered
into by MWSS with both the Company and Maynilad and the extension of the Concession
Agreements for another 15 years from year 2022. The Petition also seeks to nullify the
arbitration proceedings between MWSS and the Concessionaires. The Company has filed its
Comment on the Petition.

In its Resolution dated April 21, 2015, the Supreme Court directed the parties to file their
respective memoranda within thirty (30) days from notice thereof. After moving for the extension
of the deadline on several occasions, on September 18, 2015, the Company filed its
Memorandum.

Maynilad, MWSS and Waterwatch have likewise filed their respective Memoranda. Petitioners
WARM, ABAKADA-Guro and Javier, et al. have manifested that they would adopt their
respective Petitions as their Memoranda.

E. The Colmenares Petition

This case is a Petition for Certiorari and Prohibition [with Application for the Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction] dated August 6, 2015 filed
by petitioners Neri Colmenares and Carlos Isagani Zarate, representatives of Bayan Muna
Partylist. The Petition was filed primarily for the following purposes:
a. To nullify, supposedly for being unconstitutional, the Arbitration Clause contained in the
Concession Agreements entered into by MWSS with the Company and Maynilad,
respectively;
b. To nullify, supposedly for being unconstitutional, the Sovereign Guarantee contained in
the Undertaking Letters executed by the Republic in favor of the Concessionaires; and
c. To declare that the Concessionaires' payments for corporate income taxes cannot be
deducted as part of their operational expenditures; and
d. To prevent Secretary Cesar V. Purisima and President Benigno Simeon C. Aquino III
from processing the Concessionaires' claims under the Sovereign Guarantee.

On November 16, 2015, the Supreme Court issued a Resolution consolidating the Colmenares
Petition with the Waterwatch, WARM, Javier, and ABAKADA-Guro Petitions and directing the
respondents to file their respective Comments. On November 23, 2015, the Company filed its
Comment/Opposition (Re: Petition for Certiorari and Prohibition [with Application for the
Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction] dated 06
August 2015).

SEC Form 17-A 62

 On November 13, 2015, the MWSS and MWSS- Regulatory Office filed their Comment.
On November 28, 2015, Maynilad filed its Comment with Opposition (To the Application for the
Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction).

On March 10, 2016, the Company received the Manifestation dated March 7, 2016 of the OSG
requesting that the Department of Finance and the said Office be excused from filing a
Comment on the instant Petition in view of the pendency of the arbitration proceedings related
to the Undertaking Letters.

On May 26, 2016, the Company received Maynilad's Counter-Manifestation and Motions dated
May 17, 2016, praying that the OSG be required to comment on the instant Petition. Maynilad
also prayed that the instant case be set for oral arguments in accordance with the Rules of
Court.

In its Resolution dated March 15, 2016, the Supreme Court noted and granted the Manifestation
dated March 7, 2016 of the OSG and excused the same from filing a Comment on the instant
Petition. On June 16, 2016, the Company received Maynilad's Motion for Reconsideration dated
June 7,2016 praying that the Supreme Court reconsider its Resolution dated March 15, 2016.

On July 25, 2016, the Company filed its Manifestation and Motion of even dated ("Manifestation
and Motion"), where the Company joined Maynilad in seeking a reconsideration of the Supreme
Court's Resolution dated March 15, 2016 and moved to set the consolidated cases for oral
arguments. The Company's Manifestation and Motion was noted in the Supreme Court's
Resolution dated August 2, 2016.

On August 15, 2016, the Company received the Manifestation dated August 10, 2016 of the
Secretary of Finance Carlos G. Dominguez III, represented by the OSG, stating that he is
adopting the position taken by his predecessor in office as stated in the Manifestation dated
March 7, 2016, that the Secretary of Finance and the OSG be excused from filing a comment
on the instant Petition.

The Manifestation and Motion filed by the Company, as well as the Manifestation dated August
10, 2016 filed by Secretary of Finance Carlos G. Dominguez III, were noted in the Supreme
Court's Resolution dated August 23, 2016.

In a Resolution dated September 19, 2017, the Supreme Court denied Maynilad's Motion for
Reconsideration. Maynilad again filed another Motion for Reconsideration dated November 6,
2017 to apprise the Supreme Court that in the interim, the arbitration between the Republic and
Maynilad had been resolved by the issuance of an award in favor of Maynilad. Thus, according
to Maynilad, the OSG can no longer use said arbitration proceeding as an excuse from filing its
comment. Last December 12, 2017, the Company filed a Manifestation and Comment in support
of Maynilad's Motion.

In a Resolution dated March 6, 2018, the Supreme Court granted the Motion for
Reconsideration dated November 6, 2017 filed by Maynilad and the Motion for Leave to File
Manifestation and Comment dated December 12, 2017 by the Company.

On July 31, 2018, the Company received MWSS' Comment dated July 18, 2018 on the Petition.

On February 10, 2020, the Company received a Very Urgent Motion (to Set Case for Oral
Arguments) dated January 30, 2020 filed by the Office of the Solicitor General on behalf of the
Department of Finance, praying that the cases be set for oral arguments. On the same date,
the Company received a Notice dated January 7, 2020 from the Supreme Court requiring the
parties to move in the premises “in view of the dropping by the concessionaires of their claims
against the government arising from arbitration decisions.”

SEC Form 17-A 63

 On February 17, 2020, the Company filed its Omnibus Motion and Motion for Extension to the
Supreme Court’s Notice dated January 7, 2020. Thereafter, on February 26, 2020, the
Company filed its Compliance/Manifestation and Compliance with Comment of even date
clarifying that the Company’s waiver of the Arbitral Award is limited to the enforcement and
collection of the monetary claims thereon; and informing the Supreme Court of the ongoing
review and renegotiation of the Concession Agreement with the government.

In a Resolution dated March 3, 2020, the Supreme Court directed the concessionaires to: (i)
furnish the Secretary of Finance with copies of the documents subject of the resolution dated
January 7, 2020; and (ii) submit proof of compliance. Hence, on July 27, 2020, the Company
furnished the Secretary of Finance, through the Office of the Solicitor General, with copies of
the relevant documents requested.

In a Resolution dated September 8, 2020, the Supreme Court directed the parties to file their
respective comments on the Office of the Solicitor General’s Very Urgent Motion dated January
20, 2020. On October 26, 2020, the Company filed its Manifestation that it had already filed its
comment on February 26, 2020. In a Manifestation dated November 16, 2020, the MWSS joined
the Office of the Solicitor General’s motion to set the consolidated Petitions for oral arguments.

In a Resolution dated December 9, 2020, the Supreme Court noted the Company’s
Manifestation dated October 26, 2020.

On October 8, 2021, the Company filed a Manifestation informing the Supreme Court that a
Revised Concession Agreement was entered into between the Company and MWSS on March
31, 2021, which amends the 1997 Concession Agreement and which could moot material
issues raised in the consolidated Petitions.

On October 20, 2021, the Company filed another Manifestation dated October 18, 2021
informing the Supreme Court that in view of the execution of the Revised Concession
Agreement in 2021, the principal issues in G.R. 219362 (Colmenares Petition) have been
rendered moot and academic.

In a consolidated Decision dated December 7, 2021, the Supreme Court ruled as follows:

1. Despite the absence of the requisites for a petition for certiorari under the Rules of Court,
the Supreme Court took cognizance of the Petitions under its expanded certiorari
jurisdiction in Article VIII, Section 1 of the Constitution.

2. Actual facts were alleged, giving rise to an actual controversy. Admissions in the pleadings
have been made sufficient for the Court to rule on the issues.

3. Petitioners have legal standing. They raised an issue of transcendental importance, water
being the most basic of all human necessities.

4. On the principal issue of whether the Concession Agreements and the extension of their
original terms are null and void and should be set aside, the Supreme Court ruled in favor
of the Concessionaires. The Concession Agreement and the extension of their terms are
valid and legal.

b.) There is no undue delegation of State power in any of the provisions of the Concession
Agreements. The Supreme Court therefore sustained their validity.

i.) The power of eminent domain was not delegated as the Concessionaires would be
acting on behalf of MWSS and the assets expropriated shall revert to the MWSS.

ii.) The provision on Taxes (6.2) does not give the Concessionaires the power to collect
or levy taxes arising from the execution and implementation of the Concession
Agreements.

SEC Form 17-A 64

 c.) The supply of water is not a governmental but a proprietary function of the State.
Therefore, property employed for the supply of water may be operated free from
legislative interference.

d.) The extension of the terms of the Concession Agreements is not illegal. The addition of
15 years to the original 25-year effectivity of the agreements totals to 40 years, which is
well within the 50-year limit required by the Constitution. Rebidding is not required as the
Concession Agreements were executed under the terms of the National Water Crisis
Act. Moreover, it was made known to the other bidders during the bidding that the
contracts are renewable as provided in Section 16.12 of the Concession Agreements.

5. However, on the issues whether Manila Water and Maynilad are public utilities subject to
the 12% limit on their returns, and whether their corporate income tax payments (“CIT”) may
be passed on to the consumer, the Supreme Court ruled against the Concessionaires.

a. The Concessionaires are privately owned and operated business entities engaged
in regularly supplying water. They are to serve the indefinite public within their
respective service areas as provided in the Concession Agreements. They are
public utilities.

b. The fact that only the MWSS holds a legislative franchise does not prevent a
declaration that the Concessionaires are public utilities. Citing Albano v. Reyes, the
Supreme Court held that no legislative franchise is necessary for the
Concessionaires to operate the facilities of the MWSS and supply water. R.A. No.
8041, E.O. No. 286 and E.O. No. 311 are the authorizations for the Concessionaires
to operate the facilities of the MWSS. The only time that a legislative franchise is
required is if the enabling law requires one (e.g., E.O. No. 546 requiring broadcast
stations to secure a legislative franchise, R.A. No. 776 on the other hand does not
require a legislative franchise for domestic air transport utilities to operate).

c. Even assuming that the Concessionaires are not public utilities, their rates of return
are still subject to the 12% limit under Section 9.1 of the Concession Agreements.

d. As public utilities, Manila Water and Maynilad are prohibited from passing on to
consumers the CIT they paid as operating expenses. Citing Republic vs.
MERALCO, the court ruled that operating expenses should be a requisite of or
necessary in the operation of a utility, recurring and redounding to the service or
benefit of customers. The privilege of earning income is enjoyed by the public utility
and not the consumers.

e. Income taxes are not business taxes. Business taxes imposed in the exercise of
police power for regulatory purposes are paid for carrying on a business. It is
deemed a prerequisite to the conduct of a business.

f. Notwithstanding the Court’s ruling, the CIT which had been passed on to consumers
may no longer be recovered as the right to a refund has long prescribed. Unlike in
MERALCO, no action to contest water rates was brought before the NWRB within
30 days after the effectivity of the rates.

6. The allegation of regulatory capture is belied by the denial of the Concessionaires’ petition
for upward adjustment of rates.

7. The arbitration proceedings between the MWSS and the Concessionaires are presumed
valid.

8. The allegations relating to the sovereign guarantee under the Republic’s Letters of
Undertaking are all conjectures, hypothetical and not established by evidence. There being
no actual case or controversy, the Supreme Court did not rule on the same.

SEC Form 17-A 65

 Subsequently, Manila Water received a copy of the Motion for Partial Reconsideration dated
June 01 2023 filed by Petitioners in Colmenares et. al. vs. Purisima, et. al. (G.R. No. 219362)
which was resolved in the consolidated Decision. In August 2023, MWCI filed a Comment to
the Motion for Partial Consideration filed by Petitioners in Colmenares et. al. vs. Purisima, et.
al. (G.R. No. 219362).

5. Allan Mendoza et al. vs. Manila Water Company, Inc.

Special Civil Action No. R-QZN-14-04863-SC, RTC QC Branch 77

On May 23, 2014, Allan Mendoza, et al. ("Petitioners") filed a Petition for Mandamus under Rule 65
of the Rules of Court praying that the Company and its former President, Mr. Gerardo C. Ablaza,
Jr. be commanded to: (a) reinstitute the Welfare Fund, under terms and conditions which are no
less favorable than those provided in the MWSS Employees Savings and Welfare Plan; to make an
accounting, and reimburse and/or return to the MWC Welfare Fund the employer's share as of
December 2005 which was diverted to the MWC Retirement Plan; and to implement the progressive
employer share from the time the Welfare Fund was dissolved in 2005 up to the time when the Fund
is finally reinstituted for the petitioners who are still employed, and up to the end of employment for
those who are already separated on account of resignation, retirement, termination, etc.; (b) to
implement correctly the benefits of petitioners which are guaranteed against non-diminution, as
indicated in Exhibit "F" of the Concession Agreement; (c) to allow petitioners to accumulate their
paid leaves of 15 days of vacation leave and 15 days of sick leave annually; and (d) to pay interest
on the foregoing at 12% per annum.

In an Order dated June 11, 2014, the Company and Mr. Ablaza were directed to file their Comment.
On June 27, 2014, the Company and Mr. Ablaza filed their Comment and argued as follows: (a) the
court has no jurisdiction over the subject matter of the instant Petition; being essentially an action
for payment of employee benefits, the Labor Arbiters under the National Labor Relations
Commission have original and exclusive jurisdiction over this case; (b) petitioners have resorted to
mandamus in order to avoid payment of filing fees for a collection case; thus, the court has not
acquired jurisdiction over the case for failure of the petitioners to pay the prescribed docket fees as
set forth in Rule 141 of the Rules of Court; (c) petitioners are not entitled to a writ of mandamus; (d)
there was a plain, speedy and adequate remedy available to the petitioners; (e) the case should not
be treated as a class suit; (f) the claims of petitioners have prescribed; (g) the Complaint should be
dismissed because petitioners' alleged cause of action is barred by laches; and (h) petitioners have
received benefits no less favorable than those granted to such employees by the MWSS at the time
of their separation from MWSS.

In an Order dated July 28, 2014, the Court set the presentation of petitioners' evidence on
September 10, 2014 and October 8, 2014. However, the September 10, 2014 hearing was
cancelled because the branch clerk of court, the clerk-in-charge of civil cases, the court interpreter
and the court aide of the branch were attending a seminar for the e-Court system.

Thereafter, petitioners filed a Motion to Cancel (the October 8, 2014) Hearing and to Allow Parties
to Submit Memoranda. In their Motion, petitioners claimed that the issues for resolution in the instant
case are legal questions and prayed that the parties be required to submit Memoranda in lieu of
presentation of evidence.

On October 1, 2014, the Company and Mr. Ablaza filed a Comment on the Motion and stated that
they do not entirely agree with petitioners' statement as they have made factual allegations in their
Petition that would need to be proven in a full-blown trial. These allegations include, among others,
that the employees have suffered diminution of benefits and that the Company had allegedly used
part of the Welfare Fund as seed money for the Retirement Fund.

SEC Form 17-A 66

 However, the Company and Mr. Ablaza proposed that the following legal issues be initially disposed
of by way of simultaneous Memoranda to be submitted by the parties, namely, whether or not: (a)
the court has jurisdiction over the subject matter of the Petition being essentially an action for
payment of employee benefits; (b) the court has acquired jurisdiction over the case considering the
failure of the petitioners to pay the prescribed docket fees as set forth in Rule 141 of the Rules of
Court; (c) the petitioners are entitled to a writ of mandamus; (d) there was a plain, speedy and
adequate remedy available to the petitioners; (e) this case should be treated as a class suit; (f) the
claims of petitioners have prescribed; and (g) the Petition should be dismissed because petitioners'
alleged cause of action is barred by laches.

On October 8, 2014, the scheduled hearing for the initial presentation of petitioners' evidence was
cancelled reset to March 5, 2015 due to the absence of the presiding judge. At the March 5, 2015
hearing, petitioners reiterated their prayer that the parties be required to submit Memoranda in lieu
of presentation of evidence considering that only legal questions are involved. The Company and
Mr. Ablaza again countered that petitioners have made factual allegations in their Petition that would
need to be proven in a full-blown trial.

The presiding judge stated that the proceedings for a petition for mandamus are summary in nature.
Thus, he directed the parties to simultaneously submit their respective Memoranda within sixty days,
or by May 5, 2015. He directed the parties to address all legal issues and if there are factual issues,
to attach judicial affidavits of witnesses. Upon submission of the Memoranda, he will determine if a
party would be allowed to cross-examine the other's witnesses or if he would still conduct oral
arguments.

The parties subsequently filed their respective Memoranda.

In an Order dated September 14, 2015, the parties were directed to manifest whether they would
be submitting the case on the basis of their respective Memoranda or if they would request for a
trial on the merits. At the October 12, 2015 hearing before the clerk of court, the Company and Mr.
Ablaza, through counsel, reiterated that they would prefer if the issues on jurisdiction and other
grounds for dismissal be resolved first before deciding whether or not the case should go to trial.
The clerk of court noted this manifestation for discussion with the presiding judge.

The trial court thereafter set the case for initial trial on March 30, 2016. During the hearing, both
parties stated that their respective positions are already set forth in the Memorandum each
submitted. The issues on jurisdiction and other grounds for dismissal were submitted for resolution.
In an Order dated April 1, 2016, the trial court dismissed the case, without prejudice, on the ground
that the Petition filed by Mr. Mendoza failed to state a cause of action for mandamus. In an Order
dated July 14, 2016, the trial court denied the Motion for Reconsideration of the petitioners.

Mr. Allan M. Mendoza proceeded to file a Petition for Certiorari with the Court of Appeals. On
October 24, 2016, the Court of Appeals ordered the counsel of Mr. Mendoza to submit an Amended
Petition, this time impleading the names of the other petitioners, stating their actual addresses, and
appending copies of their Special Powers of Attorney. On December 1, 2016, the Amended Petition
was filed.

In a Resolution dated January 19, 2017, the Court of Appeals directed the counsel for the petitioners
to submit the addresses of some of the co-petitioners and to implead one additional petitioner. On
February 21, 2017, the Company received a Second Amended Petition filed by petitioners
supposedly to comply with the directive of the court.

In a Resolution dated September 8, 2017, the Court of Appeals directed the Company to comment
on the Amended Petition. The Company filed its Comment on October 30, 2017.

The Court of Appeals thereafter referred the parties to compulsory mediation, which however failed.
In a Resolution dated March 6, 2018, the parties were directed to file their respective Memoranda.
The Company filed its Memorandum on May 24, 2018.

SEC Form 17-A 67

 In a Resolution dated July 31, 2018, the Court of Appeals admitted the Memorandum filed by the
Company. However, the Memorandum filed by the Petitioners was deemed not filed, as their Motion
for Extension of Time to file the same was unsigned. The Petitioners were directed to show cause
why their Memorandum should be admitted despite being filed late. In a Compliance with
Manifestation and Motion to Admit, Petitioners' counsel explained that late filing was an oversight
caused by counsel's recent surgery and the medications prescribed and prayed that Petitioners'
Memorandum be admitted.

In a Decision dated November 24, 2020, the Court of Appeals denied the Petition for Certiorari for
lack of merit.

On February 17, 2021, the Company received a Petition for Review on Certiorari filed by the
Petitioners before the Supreme Court.

In a Resolution dated June 16, 2021, the Supreme Court denied the Petition for failing to show any
reversible error on the part of the appellate court. On September 23, 2021, the Company received
a Motion for Reconsideration filed by the Petitioners.

To date, this case remains pending.

Item 4. Submission of Matters to a Vote of Security Holders

Except for matters taken up during the annual meeting of stockholders, there was no other matter
submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the period
covered by this report.

PART II – OPERATIONAL AND FINANCIAL INFORMATION

Item 5. Market for Issuer’s Common Equity and Related Stockholder Matters

On March 18, 2005, the Company was listed in the Philippine Stock Exchange and its listed shares have
since been actively traded therein under the ticker symbol “MWC”. The high and low sale prices for each
quarter that the Company’s shares have been listed for the past three years are as follows:

High/ Low Price

2023 2022 2021
High Low High Low High Low
1st Quarter P
= 21.20 P
= 17.28 P
= 26.45 P
= 17.30 P
= 18.64 P
= 13.50
2nd Quarter 21.10 16.96 21.00 16.32 22.70 14.00
3rd Quarter 19.70 17.00 17.50 13.36 23.80 16.14
4th Quarter 18.80 16.80 21.60 13.00 28.00 17.86

The price information as of the close of the latest practicable trading date, March 14, 2024 is P
= 21.95.

The Company has an authorized capital stock of P = 3.1 billion divided into 3.1 million common shares with a
par value of P
= 1.00 per share, and 4 billion participating preferred shares (PPS) with a par value of P0.10
per share.

As of December 31, 2023, the outstanding shares of the Company consisted of 2,593,697,045 common
shares and 3,563,756,068 PPS. As of December 31, 2023, total number of treasury shares of the Company
amounted to 291,142,572 common shares and 436,243,932 PPS.

As of December 31, 2023, the Company had 928 certificated shareholders owning at least one (1) board
lot. The scripless shareholders of the Company are counted under PCD Nominee Corporation Filipino and
PCD Nominee Corporation (Non-Filipino).

SEC Form 17-A 68

The following are the names of the Top 20 holders of common shares, the number of shares held, and the
percentage of total outstanding shares held by each as of December 31, 2023:

Percentage
No. of Common
Rank Stockholder Name (of Common
Shares
Shares)
1 Trident Water Company Holdings, Inc. 900,052,160 31.19%
2 PCD Nominee Corporation (Filipino)* 866,631,843 30.03%
3 Ayala Corporation** 555,538,464 19.25%
4 PCD Nominee Corporation (Non-Filipino) 435,375,991 15.09%
5 Social Security System 53,005,600 1.84%
6 ESOWN Administrator 2018*** 10,113,837 0.35%
Social Security System Assigned to Employees
7 9,676,700 0.34%
Compensation Fund
8 Antonino Aquino 5,749,542 0.20%
9 ESOWN Administrator 2014*** 5,550,715 0.19%
10 ESOWN Administrator 2013*** 5,078,713 0.18%
Janine T. Carreon as Manila Water Corp. Inc. ESOP
11 4,644,924 0.16%
Administrator
12 ESOWN Administrator 2012*** 3,600,737 0.12%
Ernesto O. Chua Chiaco and/or Margaret Sy Chua
13 2,240,000 0.08%
Chiaco
14 ESOWN Administrator 2011*** 1,881,664 0.07%
15 Sherisa P. Nuesa 1,800,000 0.06%
16 Genevieve Sy Chuachiaco 1,507,000 0.05%
17 Ernesson Sy Chua Chiaco 1,274,500 0.04%
18 Margaret Sy Chua Chiaco 1,128,000 0.04%
19 Lozano A. Tan 950,000 0.03%
20 Virginia Z. Jugo 700,000 0.02%
* Includes the remaining 2,798,809 shares subject of the Company’s buy-back program from September 12-14, 2022 and the
288,998,734 shares repurchased from Ayala Corporation on October 11, 2023
** Excludes shares lodged with PCD Nominee Corporation (21,409,000 shares) and Michigan Holdings, Inc.
(1,000,000 shares), a wholly owned subsidiary of Ayala Corporation
*** Shares granted under the Company's ESOWN Plans

Dividends

Subject to the preferential dividend rights of the participating preferred shares (“PPS”), each holder of a
share of stock is entitled to such dividends as may be declared in accordance with the Company’s dividend
policy. Under the Company’s cash dividend policy, common shares shall be entitled to annual cash
dividends equivalent to 35% of the prior year’s net income, payable semi-annually in March and October.
The Company’s Board may change the cash dividend policy at any time.

The Company’s Board is authorized to declare cash dividends. A cash dividend declaration does not require
any further approval from the stockholders in accordance with the Revised Corporation Code. A stock
dividend declaration requires the further approval of stockholders representing not less than two-thirds (2/3)
of the Company’s outstanding capital stock. The Revised Corporation Code defines the term “outstanding
capital stock” to mean the “total shares of stock issued”, regardless of nomenclature, classification or voting
rights, except treasury shares. Such stockholders’ approval may be given at a general or special meeting
duly called for the purpose. Dividends may be declared only from unrestricted retained earnings. Some of
the Company’s loan agreements carry covenants that restrict declaration of payments of dividends under
certain circumstances, such as in the event of default or if payment would cause an event of default, if
certain financial ratios are not met or if payment would cause them not to be met, requiring revenues of the
Company to be applied toward certain expenses prior to the payment of dividends, and other circumstances.

SEC Form 17-A 69

Within 2019 to 2024, the Company has declared the following dividends:

Declaration Date Payment Date Amount* (In thousands) Nature of Dividends Declared

February 29, 2024 April 12, 2024 P

= 438,306 P
= 0.113 cash dividends to PPS
2,931,783 1.129 cash dividends to common shares
March 28, 2023 April 28, 2023 P
= 288,000 P
= 0.062 cash dividends to PPS
1,784,575 0.619 cash dividends to common shares
November 17, December 19, P
= 192,000 P
= 0.038 cash dividends to PPS
2022 2022 1,092,253 0.379 cash dividends to common shares
November 18, December 16, P
= 332,000 P
= 0.053 cash dividends to PPS
2021 2021 1,531,849 0.531 cash dividends to common shares
September 27, October 25, 2019 P
= 182,000 P
= 0.04551 cash dividends to PPS
2019 939,709 0.4551 cash dividends to common shares
February 26, 2019 March 28, 2019 P
= 182,000 P
= 0.04551 cash dividends to PPS
939,709 0.4551 cash dividends to common shares
*Gross amount of dividend

Manila Water did not declare cash dividends in 2020 in view of the prevailing circumstances and challenges at
the time. Specifically, with the discussions with government on the Concession Agreement, as well as the need
to continuously focus on service continuity and operations resiliency amid the COVID-19 pandemic, the Company
needed to prioritize resources towards ensuring reliable service to our customers.

Recent Sale of Unregistered Securities

The table below sets out details of the issuance of new shares from 1999 up to December 31, 2023. Under
existing regulations, the original issuance, an issuance to existing shareholders, and issuance pursuant to
a private placement are exempt from the registration requirement for the sale of securities.

Date Security Sold No. of Shares Purchaser Consideration

February 1999 Common shares 104,443,965 ESOP Shareholders P

= 1.00 par

April 2004 RPS 310,344,828 Ayala P

= 1.00 par

April 2004 RPS 68,965,517 BPI Capital P

= 1.00 par

April 2004 RPS 120,689,655 United Utilities P

= 1.00 par

August 2004 Common shares 176,400,000 IFC P

= 4.75 per share

February 2020 Common (Carved Out) 820,000,000 Trident Water Holdings P

= 13.00 per share
Shares Company, Inc.

On October 29, 2020, the Company submitted its Application for Confirmation of Execution under Section
10.1 (k) of the Securities Regulation Code for the subscription by Prime Metroline Holdings, Inc., for itself
and on behalf of a corporation that it will organize (Trident Water Holdings Company, Inc.) to 820,000,000
common (carved out) shares.

SEC Form 17-A 70

Item 6. Management’s Discussion and Analysis of Results of Operations and Financial Condition

The following management’s discussion and analysis (MD&A) of Manila Water Company, Inc. and subsidiaries’
(Group) financial condition and results of operations should be read in conjunction with the Group’s audited
financial statements, including related notes. This report may contain forward-looking statements that involve
risks and uncertainties. The actual results may differ materially from those discussed in the forward-looking
statements as a result of various factors, including but not limited to, economic, regulatory, socio-political,
financial, and other risk factors.

Any references in this MD&A to “our”, “us”, “we”, “MWCI”, “Enterprise” or the “Group” shall refer to Manila Water
Company, Inc., including its subsidiaries. Any reference to “Manila Water Company”, “Manila Water”, “MWC” or
“the Company” shall refer to the Parent Company only.

Additional information about the Group, including recent disclosures of material events and annual/ quarterly
reports, are available at our corporate website at https://www.manilawater.com.

OVERVIEW OF THE BUSINESS

Manila Water Company holds the right to provide water and used water services to the eastern side of Metro
Manila ("Manila Concession" or "East Zone") under a Concession Agreement (CA) entered into between the
Company and the Metropolitan Waterworks and Sewerage System (MWSS) in August 1997. The original term of
the concession was for a period of 25 years to expire in 2022. The Company's concession was extended by
another 15 years by MWSS and the Philippine Government in 2009, thereby extending the term from May 2022
to May 2037.

On November 9, 2023, after due notice to the public, the MWSS-RO conducted a public hearing for the extension
of the expiration date of the RCA. This is in view of Company’s application to extend the term of the RCA for
another 10 years or until 2047 to align with the term of its Franchise.

The Company provides water treatment, water distribution, sewerage and sanitation services to more than seven
million people in the East Zone, comprising a broad range of residential, semi-business, commercial and industrial
customers. The East Zone encompasses (24) cities and municipalities spanning a 1,400-square kilometer area
that include Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most parts of Quezon City,
portions of Manila, Parañaque, as well as the following towns of Rizal: Angono, Antipolo, Baras, Binangonan,
Cainta, Cardona, Jala-Jala, Morong, Pililia, Rodriguez, San Mateo, Tanay, Taytay, and Teresa.

Under the terms of the CA, the Company has the right to the use of land and operational fixed assets, and the
right, as agent and concessionaire of MWSS, to extract and treat raw water, distribute, and sell water, and collect,
transport, treat and dispose used water, including reusable industrial effluent discharged by the sewerage system
in the East Zone. The Company is entitled to recover over the concession period its operating, capital
maintenance and investment expenditures, business taxes, and concession fee payments, and to earn a rate of
return on these expenditures for the remaining term of the concession.

On March 31, 2021, MWSS and the Company entered into a Revised CA (RCA) which has a term of up to July
31, 2037. The RCA shall become effective within six (6) months from March 31, 2021 and upon satisfaction of
the conditions precedent.

The Company and MWSS has since executed six (6) amendments to the RCA extending its Effective Date to
allow time to complete the remaining condition precedent which is the Undertaking Letter from the Republic. The
Sixth Amendment was executed on May 19, 2022 extending the Effective Date to not later than June 30, 2022.

On June 30, 2022, the RCA did not take effect due to the Republic's failure to submit the prescribed Undertaking
Letter. Any changes adopted by the Company in relation to the RCA were reverted to the terms provided in the
Original CA, except as provided under the franchise discussed below.

On May 10, 2023, the Company and MWSS executed a seventh Amendment to the RCA (the “Amendment”).
The parties agreed that the RCA and the seventh Amendment are deemed to be effective as of June 29, 2022.
The Republic also issued a new Undertaking Letter effective as of July 1, 2022, superseding the Undertaking
Letter dated June 24, 2022.

SEC Form 17-A 71

On December 10, 2021, the franchise of Manila Water (Republic Act (RA. No.) 11601) was signed into law and
became effective on January 25, 2022. Said law grants Manila Water the franchise to establish, operate and
maintain a waterworks and sewerage system in the East Zone Service Area of Metro Manila and the Province of
Rizal for a period of twenty-five (25) years and confirms the status of Manila Water as a public utility. Section 5 of
RA No. 11601 provides that the Concession Agreement shall serve as the certificate of public convenience and
necessity, license or permit of Manila Water for the operation of its waterworks and sewerage system.
Under RA 11601, "Concession Agreement" refers to the agreement between the grantee and MWSS on February
21, 1997, including its amendment dated October 26, 2001, and the Memorandum of Agreement and Confirmation
dated October 23, 2009, as amended by the Revised Concession Agreement dated March 31, 2021, or as may
thereafter be amended. When public interest for affordable water security requires and upon application by
Manila Water, MWSS is authorized to approve the amendment of the Concession Agreement to extend its term
up to the term of the franchise.

On March 2, 2022, the MWSS Board of Trustees (BOT) approved Resolution No. 2022-025-RO, Series 2022
involving the implications of the Legislative Franchises on the value-added tax (VAT) and franchise tax of the
Concessionaires specifically:
1. The removal of VAT from the customer bills of Manila Water and Maynilad resulting from the grant of the
Legislative Franchises to the Concessionaires, subject to the National Internal Revenue Code of 1997,
as amended, and the relevant rules of the Bureau of Internal revenues; and
2. The imposition of Government Taxes in the customers' bills as pass-through costs comprised of a
national franchise tax at the rate of 2.00% and actual implemented rates of local franchise tax for each
local government unit starting March 21, 2022.

On March 21, 2022, the Company submitted its notice of acceptance of the twenty-five (25)-year legislative
franchise to the Committee on Legislative Franchises of the House of Representatives and the Senate Committee
on Public Services.

Aside from the Manila Concession, the Group has a holding company for all its domestic operating subsidiaries
in Manila Water Philippine Ventures, Inc. (MWPVI). Currently under MWPVI are (1) bulk water supply businesses
under Metro Ilagan Water Company, Inc. (Ilagan Water), Manila Water Consortium, Inc. (MW Consortium), with
subsidiary - Cebu Manila Water Development, Inc. (Cebu Water), Davao del Norte Water Infrastructure
Company, Inc. (Davao Water), with subsidiary - Tagum Water Company, Inc. (Tagum Water); (2) water
distribution and used water services businesses namely, Boracay Island Water Company (Boracay Water), Clark
Water Corporation (Clark Water), Laguna AAAWater Corporation (Laguna Water), Calbayog Water Company,
Inc. (Calbayog Water), North Luzon Water Company, Inc. (North Luzon Water), Leyte Water Company, Inc.
(Leyte Water) and Filipinas Water Consortium Holdings Corp. (Filipinas Water), subsidiaries of Filipinas Water -
Obando Water Company, Inc. (Obando Water), MWPV South Luzon Water Corp. (South Luzon Water), Bulakan
Water Company, Inc. (Bulakan Water), and Ilagan Water. Another subsidiary of Manila Water is Calasiao Water
Company, Inc. (Calasiao Water), a water supply project for the Calasiao Water District; and (3) business-to-
business water and wastewater service businesses comprised of Aqua Centro MWPV Corp. (Aqua Centro),
Bulacan MWPV Development Corporation (BMDC), Manila Water Technical Ventures, Inc. (MWTV), and
EcoWater MWPV Corp. (EcoWater). Under MWPVI is a division, Estate Water, which operates and manages
the water systems of townships developed by Ayala Land, Inc. Beginning 2021, Estate Water provides
wastewater services to Ayala Malls. On April 19, 2021, MWPVI and Aqua Centro entered into a Novation
Agreement with Adauge Commercial Corporation whereby MWPVI assigns and transfers its rights, duties and
obligations under the MOA with ALI Group to Aqua Centro for Atria Development (Iloilo City).

On May 31, 2021, MWPVI and the ALI Group signed an Amended and Restated MOA, wherein it states that
MWPVI shall have a preferred status with regards to the provision of water and used water services to all property
development projects of the ALI Group except for several excluded developments. On December 29, 2021,
MWPVI entered into a Deed of Absolute Sale with Amaia Land Corp. (Amaia) and BellaVita Land Corp. (BellaVita)
whereby MWPVI sells, conveys, transfers, assigns and delivers the properties and all rights, title, and interest to
Amaia and BellaVita for the excluded developments under the Amended and Restated MOA with ALI Group. As
of December 31, 2021, MWPVI completed the sale and transfer of said properties to Amaia and BellaVita.

The holding company for Manila Water's international ventures is Manila Water Asia Pacific Pte. Ltd. (MWAP).
Under MWAP are two affiliated companies in Vietnam, namely Thu Duc Water B.O.O. Corporation ("Thu Duc
Water") and Kenh Dong Water Supply Joint Stock Company ("Kenh Dong Water"), both supplying treated water
to Saigon Water Corporation (SAWACO) under a take-or-pay arrangement. Also, under MWAP are Saigon Water
Infrastructure Corporation ("Saigon Water"), a holding company listed in the Ho Chi Minh City Stock Exchange,
and Cu Chi Water Supply Sewerage Company, Ltd. ("Cu Chi Water").

SEC Form 17-A 72

Apart from its operations in Vietnam, MWAP has associates in Thailand and Indonesia through Eastern Water
Resources Development and Management Public Company Limited ("East Water"), a fully integrated water
supply and distribution company listed in the Stock Exchange of Thailand (SET), and PT Sarana Tirta Ungaran
(PT STU), an industrial water supply operation in Indonesia, respectively. In the Middle East, Manila Water has
two Management, Operation and Maintenance Contracts (MOMC) with the National Water Company (NWC) of
the Kingdom of Saudi Arabia for its North West and Eastern Clusters. The MOMC contains the management,
operations, and maintenance of the water and wastewater facilities to be undertaken through the consortium of
Manila Water with Saur SAS and Miahona Company over a seven-year contract period, which entails the
implementation of enabling projects and the deployment of key personnel to manage the cluster and achieve Key
Performance Indicators target set by NWC.

Lastly, Manila Water Total Solutions Corp. (MWTS), a wholly-owned subsidiary, handles after-the-meter products
and services including pipe-laying, integrated wastewater services, and the incubation of new sector businesses.
To provide better focus in addressing customer needs in this sector, MWTS has been rebranded to Manila Water
Infratech Solutions (MWIS).

CONSOLIDATED FINANCIAL PERFORMANCE (YEAR-END 2023 VS. YEAR-END 2022)

Group net income for the year ended December 31, 2023 decreased 6% from the same period last year to
P
= 5,593 million. Excluding one-offs, core income stood at P
= 9,628 million.

The Group’s key financial performance indicators are discussed below:

For the years ended December 31

Increase
(in millions) 2023 2022 (Decrease) %
Total revenues P
= 30,710 P
= 22,799 P
= 7,911 35%
Total cost and expenses (excluding depreciation
and amortization) 10,794 10,822 (29) 0%
Other income (expenses) - net 598 812 (215) (26%)
Equity share in net income of associates 502 520 (18) (3%)
Other income (expenses) - net 96 292 (196) (67%)
Earnings before interest, income taxes,
depreciation, and amortization (EBITDA) 20,514 12,789 7,725 60%
Depreciation and amortization expense 4,308 3,046 1,262 41%
Earnings before interest and taxes (EBIT) 16,206 9,743 6,463 66%
Interest expense - net (3,472) (2,694) (778) 29%
Foreign exchange gains - net 54 662 (608) (92%)
Other income (expenses) - net (3,812) 450 (4,262) (947%)
Income before income tax 8,976 8,161 815 10%
Provision for income tax 3,105 2,013 1,092 54%
Net income from continuing operations 5,871 6,148 (277) (5%)
Net loss after tax from discontinued operations 2 (1) (6) 5 (83%)
Net income 5,870 6,142 (272) (4%)
Non-controlling interests* 277 219 58 26%
Net income attributable to MWC P
= 5,593 P
= 5,923 (P
= 330) (6%)
*Non-controlling interest is an ownership position whereby a shareholder owns less than 50% of outstanding
shares.

Consolidated operating revenues increased 35% to P = 30,710 million in 2023 from P

= 22,799 million last year. Said
increase was primarily driven by billed volume growth, coupled with higher average tariff and cross border charges
in the Company. This growth was further supported by the 20% increase in Non-East Zone revenues due mainly
to tariff increases in several business units. The Group derived 74% of its operating revenues from the sale of
water, while 19% came from environmental and sewer charges. Other revenues, which account for the balance,
are comprised of supervision fees, connection fees, after-the-meter services, service income from bulk water
arrangements, and finance income from contract assets, among others.

Aside from factors which occur in the normal course of business, Management does not have any knowledge of
material trends, events or uncertainties which it deems will have a material impact on revenues.

2
For years ended December 31, 2023 and 2022, the Group presented as a single amount in its consolidated statement of income the post-tax net loss
of its discontinued operations in Zamboanga Water and the Healthy Family division of MWIS.
SEC Form 17-A 73
 For the years ended December 31
Increase
(in millions) 2023 2022 (Decrease) %
Personnel costs P
= 2,492 P
= 2,471 P
= 21 1%
Direct costs 5,431 5,730 (299) (5%)
Overhead costs 943 1,127 (184) (16%)
Premises costs 549 453 96 21%
Other cost and expenses 1,379 1,042 337 32%
Total cost and expenses P
= 10,794 P= 10,823 (P
= 29) 0%

Consolidated cost of services and expenses remained steady at P = 10,794 million as 2023 cost increases in East
Zone were offset by certain non-recurring items in 2022. On a per costs category, personnel costs slightly
increased in 2023 due primarily to additional head count. Direct costs were lower by 5% from last year at
P
= 5,431 million, driven by lower repairs and maintenance and contractual services which were partially offset by
higher power costs due to higher consumption and rates. Overhead costs decreased in 2023 mainly due to lower
taxes and licenses as a result of the Company’s shift to franchise law in 2022 and lower management and
professional fees; this was partially offset by higher provision for Expected Credit Losses (ECL) in 2023. Premises
costs increased 21% from last year, driven mainly by higher insurance costs and premiums related to new
facilities and higher security costs. Other costs and expenses also increased due to consumer price index
adjustment on concession fees and higher systems costs, among others. The significant decrease in other income
pertains to the Company’s deferred input VAT and accrual adjustments booked in 2022, among others.

Consequently, consolidated EBITDA increased 60% to end at P = 20,514 million for the year, with an EBITDA margin
of 67%. Depreciation and amortization increased by 41% to P= 4,308 million, driven mainly by the newly completed
CAPEX projects and standardization of depreciation methods across facilities, offset by the extension of the useful
life of service concession assets under the Franchise law.

Net interest expense was higher by 29% from last year at P = 3,472 million, driven mainly by interest on loans which
were fully capitalized in 2022 and accretion of East Zone’s bulk water contract; these increases were slightly offset
by higher interest income from peso and dollar investments.

Net foreign exchange gains decreased for the year due to East Zone’s writeback of deferred forex losses in 2022
in line with the reversion to the Original Concession Agreement and higher forex gains from cash and other assets
last year due to Peso depreciation. Moreover, below EBITDA other expense - net in 2023 was mainly due to the
recognition of impairment provision for East Water investment, countered by the accrued liquidated damages and
adjustment to SCO related to EZ’s bulk water contract. Lastly, provision for income tax increased to
P
= 3,105 million mainly driven by higher taxable income.

BUSINESS UNITS’ FINANCIAL AND OPERATING PERFORMANCE

Parent Company – East Zone

Net income of the Company stood at P = 8,809 million for the year, 60% higher than last year. This was driven
primarily by the 38% increase in average tariff, as the Company implemented the first tranche of the approved
Rate Rebasing adjustment. This was further supported by the notable consumption recovery by the commercial
and industrial segments, coupled with higher cross border charges. Cost and expenses remained steady as 2023
cost increases were offset by certain non-recurring items in 2022. Amortization and depreciation increased 56%
to P
= 3,554 million due mainly to the newly completed CAPEX projects and standardization of depreciation methods
across facilities, offset by the extension of the useful life of service concession assets under the Franchise law.
Improvement in the topline revenue was further offset by higher interest costs and provision for tax expense.

SEC Form 17-A 74

 For the years ended December 31
Increase
2023 2022 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters)* 516.4 501.4 15.0 3%
Average tariff (in Pesos per cubic meter)** 44.8 32.5 12.30 38%
Number of billed connections*** 1,088,146 1,063,216 24,930 2%
Collection efficiency**** 99.2% 102.4% (3.2 ppts)
Non-revenue water***** 13.5% 12.2% 1.3 ppts

Financial Highlights (in millions)

Revenues P
= 24,106 P
= 17,131 P
= 6,975 41%
Cost and expenses (excluding depreciation and
amortization) 7,165 7,181 (16) 0%
EBITDA 17,040 10,207 6,833 67%
Net income P
= 8,809 P
= 5,499 P
= 3,310 60%
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm).
**Average tariff is operating revenue over billed volume.
***Billed connections is the number of water service connections in the concession area, which is measured by count.
****Collection efficiency is total amount collected over total revenue billed for the period; this metric is among the regula tory KPIs being monitored
by MWSS.
****Non-revenue water refers to the volume of water lost in the Company’s distribution system due to leakage, pilferage, illegal connections, and
metering errors. As determined by the MWSS-RO, NRW is calculated as the percentage of water lost against the net volume of water supplied by
the Company.

Revenues increased 41% to P = 24,106 million from P

= 17,131 million last year driven by tariff adjustments, billed
volume growth and cross-border charges. In 2023, total cost and expenses for the year remained flat at
P
= 7,165 million due mainly to the combined effect current year cost increases, offset by by certain non-recurring
cost items in 2022 and further tempered by continued prudent cost management.

With these movements, EBITDA increased by 67% to P

= 17,040 million from P
= 10,207 million last year. EBITDA
margin stood at 71%.

Non-East Zone (NEZ) – Philippines

The following discussion covers the consolidated results of NEZ - Philippines, driven mainly by its core domestic
operating subsidiaries in Boracay Water, Clark Water, Laguna Water, and Estate Water (a division of MWPVI).

For the years ended December 31

Increase
2023* 2022* (Decrease) %
Operating Highlights
Billed volume (in million cubic meters) 116.3 115.9 0.4 0%

Financial Highlights (in millions)

Revenues P
= 6,990 P
= 5,827** P
= 1,163 20%
Cost and expenses (excluding depreciation and
amortization) 3,848 3,467 381 11%
EBITDA 3,138 2,395 743 31%
Net income attributable to MWC P
= 750 P
= 137 P
= 613 447%
*Includes MWIS to show total domestic operations
** Certain prior year amounts have been reclassified by the Group to conform to current year presentation

NEZ – Philippines ended the year with P = 750 million net income, which marked its complete positive turnaround
mainly driven by tariff increases from several business units.

On a consolidated MWPVI level, revenues were higher by 20% at P = 6,990 million, mostly attributable to tariff hike
implementation, higher revenues from construction projects, higher sewer revenues from Estate Water, and
higher revenues from MWIS from pipelaying projects and integrated water services.

SEC Form 17-A 75

Total cost and expenses increased by 11% year-on-year to P = 3,848 million mainly in line with continued recovery
of economic activity. The major increase in direct cost was from higher contractual services, power costs due to
higher consumption and rates, as well as repairs and maintenance costs. Premises costs, personnel and
overhead costs also increased in 2023.

The movements in MWPVI Group’s revenues and costs resulted to better EBITDA by 31% or an improvement of
P
= 743 million from P
= 2,395 million in 2022 to P
= 3,138 million in 2023. EBITDA margin was at 45% which is an
increase of 4 percentage points compared from last year’s 41%.

Net interest expense was slightly lower in 2023 at P

= 980 million compared to P
= 998 million in 2022 driven by lower
interest expense on service concession obligations and higher interest income from savings and investment
accounts. The improvement in top line revenue was further offset by higher provision for income tax.

Below is a summary of the results of MWPVI’s core subsidiaries which contribute 72% of total revenues of
NEZ - Philippines:

For the years ended December 31

Increase
2023 2022 (Decrease) %
Clark Water
Billed volume (in million cubic meters)* 13.5 13.5 - 0%
Average tariff (in Pesos per cubic meter)** P
= 33.6 P
= 32.7 P= 0.9 3%
Revenues (in millions) P
= 460 P
= 451 P
=9 2%
Net income (in millions) P
= 42 P
= 78 (P
= 36) (46%)
Billed Connections*** 1,987 2,003 (16) (1%)
Non-Revenue Water**** 5.8% 5.8% 0.0 ppts
Laguna Water
Billed volume (in million cubic meters) 45.0 45.9 (0.9) (2%)
Average Tariff (in Pesos per cubic meter) P
= 57.3 P
= 44.6 P
= 12.7 28%
Revenues (in millions) P
= 2,663 P
= 2,172 P
= 491 23%
Net income (in millions) P
= 904 P
= 621 P
= 283 46%
Billed Connections 128,480 123,705 4,775 4%
Non-Revenue Water 27.4% 22.9% 4.5 ppts
Boracay Water
Billed volume (in million cubic meters) 3.3 3.5 (0.2) (6%)
Average tariff (in Pesos per cubic meter) P
= 184.2 P
= 115.6 P
= 68.6 59%
Revenues (in millions) P
= 613 P
= 417 P= 196 47%
Net income (loss) (in millions) P
= 41 (P
= 102) P= 143 140%
Billed Connections 5,355 4,647 708 15%
Non-Revenue Water 20.6% 23.5% 2.9 ppts.
Estate Water
Supervision fees***** P
= 216.3 P
= 238.9 (P
= 22.6) (9%)
Billed volume (in million cubic meters) 12.0 10.3 1.7 17%
Average tariff (in Pesos per cubic meter) P
= 73.9 P
= 65.2 P
= 8.7 13%
Revenues (in millions) P
= 1,310 P
= 1,076 P= 234 22%
Net income (in millions) P
= 94 P
= 75 P
= 19 25%
Billed Connections 17,321 16,143 1,178 7%
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm).
**Average tariff is revenue over billed volume.
***Billed connections is the number of water service connections in the concession area, which is measured by count.
****Non-revenue water refers to the volume of water lost in the Company’s distribution system due to leakage, pilferage, illegal connections, and
metering errors. NRW is calculated as the percentage of water lost against the net volume of water supplied by the Business Units.
*****Supervision fee is a fee or charge paid by the customer to the Company in exchange for the latter's assurance of potable water and/or effective
wastewater services in new developments.

Clark Water registered billed volume of 13.5 million cubic meters (mcm) in 2023, the same as its billed volume
last year. The steady billed volume coupled with the 3% tariff increase resulted in Clark Water’s revenue growth
by 2% in 2023. Moreover, Non-revenue Water remained flat at 5.80% from 2022. Meanwhile, total costs and
expenses rose by 14% to P = 282 million from P
= 248 million last year mainly driven by increase in repairs and
maintenance. These movements resulted in a 46% decrease to Clark Water’s net income at P = 42 million for
the year ended December 31, 2023.

SEC Form 17-A 76

Laguna Water’s billed volume declined by 2% to 45.0 mcm in 2023 from 45.9 mcm in 2022 driven by lower
consumption of industrial and commercial accounts. Even amid this decline, Laguna Water’s revenues grew 23%
year-on-year to P = 2,663 million, driven by a 28% improvement in average effective tariff to P
= 57.3 per cubic meter
with the implementation of tariff hikes beginning 2023. Non-revenue Water, however, increased 5.1ppts to 27.4%
from 22.3% last year due to two mainline leaks. Meanwhile, cost and expenses were held to a 16% increase
from 2022 to P= 1,035 million in 2023 mainly driven by higher direct and overhead costs and higher technical service
cost, countered by decrease in personnel cost. These movements resulted in a 27% EBITDA growth to
P
= 1,629 million and a 46% increase in net income to P = 904 million for the year ended December 31, 2023.

Boracay Water’s 2023 billed volume for commercial and residential accounts remained flat at 3.3 mcm compared
last year, countered by the nonrenewal of its bulk water account. The 59% increase in average effective tariff
primarily led to the 47% increase in Boracay Water’s revenue to P= 613 million for the year. In line with the recovery
of demand and activity in the island, total cost and expenses increased by 18% versus last year, with increases
in all cost categories. These movements in Boracay Water resulted in a complete turnaround of prior year’s net
loss position to net income of P
= 41 million for the year ended December 31, 2023.

Estate Water, a division of MWPVI, posted billed volume growth of 17% to 12.0 mcm for the year ended
December 31, 2023. This was due to higher consumption from all customer segments, and further supported by
the 7% increase in billed connections primarily due to new residential accounts, countered by slight decrease in
commercial and industrial accounts. Estate Water’s supervision fees declined due to decrease in greenfield
projects . Furthermore, its average tariff increased 13% due to the implementation of tariff increase in its
developments. Estate Water closed the year with a net income of P= 94 million.

NEZ – International

The following discussion covers the consolidated results of MWAP which comprise the NEZ – International
business of the Group. Specifically, these are the performance contributions of associates in Vietnam, Thailand,
Indonesia, and the Kingdom of Saudi Arabia.

For the years ended December 31

Increase
2023 2022 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters)* 636.7 637.6 (1) (0%)

Financial Highlights (in millions)

Equity share in net income of associates** P
= 499 P
= 520 (P
= 21) (4%)
Cost and expenses (excluding depreciation and
amortization) 118 252 (134) (53%)
EBITDA 385 290 95 24%
Net income / (loss) attributable to MWC (P
= 3,961) P
= 154 (P
= 4,115) (2,672%)
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm); Not attributable to MWC
**Under the equity method, an investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to
recognize changes in the Group’s share of net assets of the associate since the acquisition date. Goodwill relating to the as sociate is included in
the carrying amount of the investment and is not tested for impairment separately.

On a consolidated level, NEZ – International’s prior-year net income turned around to a net loss position in 2023
amounting to ₱3,961 million, driven by the recognition of provision for impairment loss on the investment in East
Water. Excluding the impairment, net income amounts to ₱102 million.

Equity share in net income of associates decreased by 4% from ₱520 million to ₱499 million, mainly driven by
the decline in East Water’s performance due to lower billed volume driven by the handover of pipelines to another
contractor, higher electricity cost and higher depreciation of newly completed maintenance CAPEX. These were
offset by improved performance of the Vietnam associates (i.e., Thu Duc Water and Kenh Dong Water) and Saudi
associates (IWP and IWP2). Consequently, 2023 EBITDA amounted to ₱385 million for the year ended December
31, 2023, 24% higher than last year.

SEC Form 17-A 77

Below is a summary of the results of associates under NEZ - International:

For the years ended December 31

Increase
(in millions) 2023 2022 (Decrease) %
East Water at 18.72% contribution, before adjustment P
= 97.2 P
= 205 (P
= 107.8) (53%)
Impact of fair value amortization 151.4 144.1 7.3 5%
East Water at 18.72% contribution, adjusted (54.2) 60.5 (114.7) (190%)
Thu Duc Water at 49.00% contribution 325.2 315.9 9.3 3%
Kenh Dong Water at 47.35% contribution 217.5 197.9 19.6 10%
Saigon Water at 37.99% contribution (39.2) (77.6) 38.4 (49%)
PT STU at 20.00% contribution 1.0 0.1 0.9 900%
IWP at 20.00% contribution 27.0 11.8 15.2 129%
IWP2 at 30.00% contribution 21.3 11.4 9.9 87%
Total equity share in net income of associates P
= 498.6 P
= 520.0 (P= 21.4) (4%)

For the years ended December 31

Increase
2023 2022 (Decrease) %
East Water
Billed volume (in million cubic meters) 319.3 323.7 (4.4) (1%)
Net income (in million THB) (188) 208 (396) (190%)
East Water at 18.72% contribution (in thousand Php) (P
= 54,210) P
= 60,478 (P
= 114,688) (190%)
Revenues (in million THB) 3,201 3,289 (88) (3%)
COS and Operating Expenses (in million THB) 1,973 1,608 365 23%
EBITDA (in million THB) 1,228 1,681 (453) (27%)
Thu Duc Water
Billed volume (in million cubic meters) 109.5 109.5 – –
Net income - VAS (in million VND) 164,161 170,707 (6,546) (4%)
Thu Duc Water at 49.00% contribution (in thousand Php) P
= 325,182 P
= 315,926 P
= 9,256 3%
Revenues (in million VND) 396,920 389,965 6,955 2%
COS and Operating Expenses (in million VND) 137,018 136,273 745 1%
EBITDA (in million VND) 259,902 253,692 6,210 2%
Kenh Dong Water
Billed volume (in million cubic meters) 68.5 68.5 – –
Net income - VAS (in million VND) 123,127 118,947 4,180 4%
Kenh Dong Water at 47.35% contribution (in thousand Php) P
= 217,531 P
= 197,941 P
= 19,590 10%
Revenues (in million VND) 316,698 316,568 130 0%
COS and Operating Expenses (in million VND) 136,689 131,790 4,899 4%
EBITDA (in million VND) 180,009 184,779 (4,770) (3%)
Saigon Water
Billed volume (in million cubic meters) 132.5 129.5 3.0 2%
Net income (loss) - VAS (in million VND) (45,167) (88,983) 43,816 (49%)
Saigon Water at 37.99% contribution (in thousand Php) (P
= 39,245) (P
= 77,586) P
= 38,341 (49%)
Revenues (in million VND) 331,992 295,801 36,191 12%
COS and Operating Expenses (in million VND) 203,206 215,110 (11,904) (6%)
EBITDA (in million VND) 128,787 80,690 48,097 60%
PT STU
Billed volume (in million cubic meters) 5.9 6.3 (0.4) (6%)
Net income (in million IDR) 2,891 3,026 (135) (4%)
PT STU at 20% contribution (in thousand Php) P
= 0.99 P
= 0.14 P
= 0.85 607%
Revenues (in million IDR) 25,602 26,879 (1,277) (5%)
COS and Operating Expenses (in million IDR) 20,355 21,215 (860) (4%)
EBITDA (in million IDR) 5,247 5,663 (416) (7%)
International Water Partners (IWP)
Billed volume (in million cubic meters) – – – –
Net income (in million SAR) 10 9 1 11%
IWP at 20% contribution (in thousand Php) P
= 26,993 P
= 11,770 P
= 15,223 129%
Revenues (in million SAR) 46 43 3 7%
COS and Operating Expenses (in million SAR) 37 32 5 16%
EBITDA (in million SAR) 12 11 1 9%
International Water Partners the Second (IWP2)
Net income (in million SAR) 5 3 2 67%
IWP at 20% contribution (in thousand Php) P
= 21,293 P
= 11,355 P
= 9,938 88%
Revenues (in million SAR) 33 21 12 57%
COS and Operating Expenses (in million SAR) 26 17 9 53%
EBITDA (in million SAR) 7 4 3 75%
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm)

SEC Form 17-A 78

East Water, a water supply and environmental services company in Thailand, registered a total of 319.3 mcm
billed volume in 2023, which was lower by 1% versus last year. This was primarily driven by lower consumption
from raw water customers due to handover of pipelines to the Treasury Department in April 2023. The decrease
in raw water billed volume was partly offset by higher tap water billed volume coming from increase in consumption
in the Sattahip area, and billed volume from new customer accounts. These factors led to a net decrease in East
Water revenues of 3%. Moreover, costs and expenses were higher in 2023 compared to 2022 due to higher direct
costs from electricity and increased in depreciation from newly completed maintenance CAPEX. These
movements resulted in a 27% decrease in EBITDA at THB1.2 billion and a 55% decrease in net income at TBH
314 million versus last year. In peso terms, the income reflected in the consolidated financial statements as equity
share in net loss of associates amounted to P = 54 million as of the end of 2023, 190% lower than in 2022, equivalent
to Manila Water’s 18.72% stake in East Water.

Thu Duc Water’s billed volume in 2023 remained steady from 2022 at 109.5 mcm. Using Vietnamese Accounting
Standards (“VAS”), revenues were 2% higher at VND325 billion. Meanwhile, Thu Duc Water’s cost and expenses
decreased 1% to VND745 billion due to lower power and repairs and maintenance. As a result, EBITDA for the
year increased by 2% or VND6,210 billion. Topline revenue and costs improvements were offset by below EBITDA
items such as Forex, depreciation and provision for income taxes. Accordingly, net income decreased to
VND164 billion, 4% lower from the same period in 2022. As Thu Duc conforms to IFRIC-12 guidelines, the PFRS-
translated income of Thu Duc in peso terms, expressed as equity share in net income of associates, amounted
= 325 million in 2023, 3% higher from previous year. This is equivalent to MWAP’s 49.00% stake in
to P
Thu Duc Water.

Kenh Dong Water’s billed volume in 2023 remained flat from 2022 at 68.5 mcm resulting to a steady revenue
amounting to VND317 billion. Meanwhile, its cost and expenses increased 4% to VND137 billion. This led to a
net decrease in EBITDA by 3% to VND180 billion. Despite these movements, Kenh Dong Water managed to
register a higher net income in 2023 to VND123 billion, 4% higher from 2022. Kenh Dong Water’s equity share in
net income recognized in the consolidated financial statements amounted to P = 218 million for the year ended
December 31, 2023, equivalent to MWAP’s 47.35% ownership stake.

MWAP’s investment in Saigon Water, a listed water holding company in Vietnam with seven (7) subsidiaries
(i.e. three bulk water operations, two distribution operations, and two service companies) and one (1) equity
investment (i.e. bulk water), recorded total consolidated billed volume of 132.5 mcm in 2023, higher by 2% from
2022 due to higher consumption from its commercial segment and marginal increase in the domestic segment,
albeit a slight contraction in the industrial segment. Consequently, Saigon Water’s revenue increased 12% to
VND332 billion from increase in billed volume coupled with higher tariffs for nearly all of its business units.
On the other hand, cost and expenses decreased by 6% to VND203 billion due to lower spending on operating
expenses. Consequently, EBITDA increased by 60% to VND129 billion. Topline revenue and costs improvements
were offset by below EBITDA items such as FOREX, depreciation and provision for income taxes. As a result,
Saigon Water posted a net loss of VND45 billion in 2023, 49% lower than the previous year. The PFRS-translated
loss of Manila Water’s 37.99% stake in Saigon Water amounted to P = 39 million as of the end of 2023.

PT STU’s, an industrial bulk water operation in Indonesia, billed volume decreased by 6% to 5.9 mcm in 2023
from 6.3 mcm in 2022. Consequently, in 2023, PT STU posted a 5% decrease in revenues to IDR26 billion and a
7% decrease in EBITDA to IDR5 billion. Net income decreased to about IDR3 billion, lower by 4% from 2022 due
to lower billed volume in 2023. Income from PT STU reported as equity share in net income of associates in the
consolidated financial statements amounted to P= 1 million, representing a 20.00% stake of Manila Water.

Lastly, the Consortium of Saur SAS, Miahona Company, and the Company in the Kingdom of Saudi Arabia. IWP
and IWP2 posted equity share for the year ended December 31, 2023 of P
= 27 million and P
= 21 million, respectively,
representing Manila Water’s 20% stake.

SEC Form 17-A 79

CONSOLIDATED BALANCE SHEET

= 210 billion from December 31, 2022 mainly due to the increase in the Group’s capital
Total assets increased to P
expenditures. Cash and cash equivalents increased by 22% to P = 10.8 billion driven by net loan drawdowns,
countered by capital expenditures, operating expenses and dividend payments.

The Group’s balance sheet remains strong, with the Company compliant with loan covenants. Debt maturity
profile is spread out.

December
31, December 31, Increase
(in millions) 2023 2022 (Decrease) %
Assets P
= 209,687 P= 194,804 14,883 8%
Cash and cash equivalents 10,753 8,812 1,941 22%
Other assets* 27,608 33,763 (6,155) (18%)
Service concession assets** and 171,326 152,229 19,097 13%
Property, plant and equipment
Liabilities P
= 139,568 P
= 121,351 18,217 15%
Equity P
= 70,119 P
= 73,453 (3,334) (5%)
Ratios
Bank debt to equity 1.23x 1.01x
Debt service coverage ratio (DSCR) 1.29x 1.29x
Return on equity (ROE) 8% 8%
*Other assets are current and non-current
**Service concession assets (SCA) are the assets used to provide water and used water services to customers. SCA consists of constructed assets,
as well as Concession Fees paid to MWSS and payments to be made for Wawa Bulk Water Contract.

With regard to liabilities, total debt as of December 31, 2023 increased to P

= 139.6 billion from P
= 121.4 billion as of
December 31, 2022. Bank debt increased due to additional drawdowns for capital expenditures and operating
requirements

Total equity decreased by 5% mainly driven by 2023 Group net earnings less dividends declared, acquisition of
treasury shares and OCI reversal from the unwinding of the derivative on the Euro-loan.

Bank debt to equity was at 1.23x while DSCR stood at 1.29x. Average cost of debt for the Group was at 6.11%,
while ROE was at 8%.

Management does not have knowledge of any material trends, events, or uncertainties outside the normal course
of business which it deems will have a material impact on liquidity. Likewise, Management does not have any
knowledge of imminent events that will trigger direct or contingent financial obligation that is material to the
Company, including any default or acceleration of an obligation.

CONSOLIDATED CAPITAL EXPENDITURES

Total capital expenditures for the Group decreased by 14% to end at P = 21.59 billion for the year, with
P
= 19.20 billion or 89% of said amount accounted for by the East Zone Concession. Majority of the East Zone
Concession’s capital expenditures were spent on wastewater expansion, network reliability and water supply
projects in line with attaining service obligations outlined in its government-approved Rate Rebasing Service
Improvement Plan. Said projects will be financed by internally generated funds and debt that are ably supported
by the Company’s strong balance sheet.

Meanwhile, total capital expenditures of the domestic subsidiaries amounted to 11% or P = 2.39 billion for the year.
Estate Water spent P= 1.3 billion for its greenfield and brownfield projects, while the balance was taken on by the
remaining subsidiaries for their various projects.

SEC Form 17-A 80

RECENT MATERIAL EVENTS

Rate Rebasing Adjustment for Charging Years 2023 to 2027

On March 31, 2022, the Parent Company filed with the MWSS RO its Business Plan for the Rate Rebasing
Period for Charging Years 2023-2027. Public Consultation Drives were conducted on July and October 2022
to inform the stakeholders and Local Government Units (LGUs) on the completed and ongoing projects,
programs, and plans of Manila Water; solicit valuable inputs from LGUs that may be incorporated in the
Business Plans of Manila Water; and provide a venue for discussing and addressing prevailing (gender-
related) issues and concerns of stakeholders on water, sewerage, and sanitation services, and for exploring
good practices in providing (gender-responsive) services.

On November 10, 2022, the MWSS BOT (MWSS BOT Resolution No. 2022-148-RO) approved the Parent
Company’s Rebasing Adjustment for the Sixth Rate Rebasing Period (2023 to 2027) as recommended by
the MWSS RO (MWSS RO Resolution No. 2012-12-CA). The implementation of Rebasing Adjustment from
2023 to 2027 on a staggered basis is scheduled as follows:

• P
= 8.04 on January 1, 2023,
• P
= 5.00 on January 1, 2024,
• P
= 3.25 on January 1, 2025,
• P
= 1.91 to P
= 3.00 on January 1, 2026, and
• P
= 1.05 to P
= 1.08 on January 1, 2027.

Effective January 1, 2024, the Parent Company implemented the second tranche of the approved Rate
Rebasing Adjustment equivalent to 14.35% and adjustment due to changes in Consumer Price Index
equivalent to 3.53% on the existing Basic Charge, based on MWS-RO Resolution No. 2023-16-CA dated
November 14, 2023 and as approved by the MWSS Board Resolution No. 2023-145-RO dated November
22, 2023. Accordingly, the Parent Company was allowed to raise its rate by an average of P6.41 per cubic
meter.

The approval also includes an indicative adjustment of about 0.97 to 1.00 or 2.12% in January 1, 2028 due
to non-full recovery of the total expenses for the Wawa Bulk Water Supply Project in compliance with MWSS
BOT. However, this amount will be subject to the next Rate Rebasing exercise.

Furthermore, the environmental charge will increase from 20% to 25% beginning January 1, 2023, and from
25% to 30% beginning January 1, 2026. Sewer charge will increase from 30% to 32.85% beginning January
1, 2023, subject to Manila Water’s attainment of sewer coverage of 30% by the end of 2025.

Notice of the Supreme Court En Banc in “Manila Water Company, Inc. vs. the Secretary of the
Department of Environment and Natural Resources, et.al.” with G.R. No. 206823

Said case arose from a complaint filed by the OIC Regional Director Roberto D. Sheen of the Environmental
Management Bureau-National Capital Region (EMB-NCR) before the Pollution Adjudication Board (PAB)
against the Parent Company, Maynilad, and MWSS for alleged violation of Philippine Clean Water Act of
2004 (RA No. 9275, the “Clean Water Act”), particularly the five (5)-year deadline imposed in Section 8
thereof for connecting the existing sewage line found in all subdivisions, condominiums, commercial centers,
hotels, sports and recreational facilities, hospitals, market places, public buildings, industrial complex and
other similar establishments including households, to an available sewerage system. Two (2) similar
complaints against Maynilad and MWSS were consolidated with this case.

On September 18, 2019, the Parent Company received a copy of the Decision of the Supreme Court on the
case ‘Manila Water Company, Inc. vs. The Secretary of the Department of Environment and Natural
Resources (DENR), et.al.’ with G.R. No. 206823 and promulgated on August 6, 2019. In the Decision, the
Supreme Court found the Parent Company liable for fines in violation of Section 8 of the Clean Water Act in
the following manner:

a. The Parent Company shall be jointly and severally liable with MWSS for the total amount of P =
921.46 million covering the period starting from May 7, 2009 to the date of promulgation of the
Decision, August 6, 2019, to be paid within fifteen (15) days from finality of the Decision.

SEC Form 17-A 81

 b. From finality of the Decision until full payment of the P
= 921.46 million fine, the Parent Company
shall be fined in the initial amount of P
= 322,102.00 per day, subject to a further 10.00% increase
every two (2) years as provided under Section 28 of the Clean Water Act, until full compliance
with Section 8 of the same law.
c. The total amount of fines imposed by the Decision shall earn legal interest of six percent (6.00%)
per annum from finality and until full satisfaction thereof.

On October 2, 2019, the Parent Company filed a Motion for Reconsideration with the Supreme Court.

On July 1, 2020, the Parent Company received a copy of the Consolidated Comment (on the separate
Motions for Reconsideration filed by petitioners MWSS, Maynilad, and the Parent Company) filed by the
Office of the Solicitor General in behalf of the adverse parties.

The Parent Company filed with the Supreme Court a Motion for Leave to file and admit its Reply last
August 17, 2020.

On November 3, 2020, the Parent Company received a Resolution dated September 8, 2020 issued by the
Supreme Court, which relevantly (i) noted the Consolidated Comment; (ii) granted the Motion for Leave and
Admit Attached Reply; and (iii) noted the Reply filed by the Parent Company.

On January 25, 2022, the Republic Act (RA) 11601 or “An Act Granting Manila Water Company, Inc. a
Franchise to Establish, Operate, and Maintain a Waterworks System and Sewerage and Sanitation Services
in the East Zone Service Area of Metro Manila and Province of Rizal” took effect. This extends the Parent
Company’s compliance deadline with Sec. 8 of the Clean Water Act from May 7, 2009 to the year 2037.

On January 26, 2022, the Parent Company filed a Manifestation to inform the Supreme Court of certain
developments (i.e., the grant of a legislative franchise to the Parent Company) which it deems relevant in
the resolution of its 2019 Motion for Reconsideration.

On October 21, 2022, the Parent Company received a resolution dated July 19, 2022 issued by the Supreme
Court which modified the dispositive portion of the Court’s August 6, 2019 decision. Accordingly, the Parent
Company is liable for fines in violation of Section 8 of the Clean Water Act in the following manner:

a. The Parent Company shall be jointly and severally liable with MWSS for the total amount of
P
= 202.26 million covering the period starting from May 7, 2009 until January 21, 2022 (date
before the effectivity of RA 11601), to be paid within fifteen (15) days from the receipt of the
Resolution.
b. The total amount of fines imposed by the Decision shall earn legal interest of six percent
(6.00%) per annum from finality and until full satisfaction thereof.

On November 2, 2022, the Office of the Solicitor General filed for DENR, a Motion for Partial
Reconsideration related to the resolution issued by the Supreme Court dated July 19, 2022.

On January 17, 2023, the Supreme Court denied with finality the Motion for Partial Reconsideration filed by
the Office of the Solicitor General for DENR, in relation with the lowering of fines imposed against the Parent
Company and MWSS. Supreme Court also rule that no further pleadings or motions will be entertained, and
that entry of judgment will be made immediately.

Accordingly, in 2022, the Parent Company recognized a net reduction of prior years’ provision for Clean
Water Act of P
= 450.26 million in Other Income. On February 9, 2023, the Parent Company has paid the fines
in full amounting to P
= 202.26 million.

Declaration of Cash Dividends

On March 28, 2023, the Board of Directors during its meeting, approved the declaration of cash dividends
amounting to P = 0.619 per share on the outstanding common shares, Php0.062 per share on the outstanding
unlisted participating preferred shares, and accumulated fixed cash dividends of PHP0.01 per share on the
outstanding unlisted participating preferred shares.

The record date was April 14, 2023, and payment date was on April 28, 2023.

SEC Form 17-A 82

The Parent Company’s Revised Concession Agreement with MWSS

On March 31, 2021, the Parent Company and MWSS entered into the Revised Concession Agreement
(RCA) which has a term of up to July 31, 2037.

The RCA removed the recovery of the Corporate Income Taxes and adjustment for foreign currency
differential (FCDA). It likewise lowered the inflation factor to 2/3 on CPI adjustment and imposed caps on
increases in standard rates for water (1.3x the previous standard rate) and wastewater (1.5x the previous
standard rate). In lieu of a market-driven appropriate discount rate, the Parent Company is subjected to a
12.00% fixed nominal discount rate for expenditures. Lastly, the Revised Concession Agreement will be
covered by an Undertaking Letter of the Republic which will apply to contracts and obligations existing at
the time of execution of the agreement.

The Parent Company and MWSS executed six (6) amendments to the RCA extending its Effective Date to
on or before June 30, 2022. On June 30, 2022, the Parent Company received an Undertaking Letter issued
by the Republic dated June 24, 2022.

On May 10, 2023, the Parent Company and MWSS executed a seventh Amendment to the RCA (the
“Amendment”). The parties agreed that the RCA and the seventh Amendment are deemed to be effective
as of June 29, 2022. The Republic also issued a new Undertaking Letter effective as of July 1, 2022,
superseding the Undertaking Letter dated June 24, 2022.

Below are the key changes in the seventh amendment to the RCA:
• Tariff adjustments must observe the cap on “C” which is 75% of the July inflation as published by
PSA. (Amended RCA Sec 9.4.2)
• FCDA will be based on the following (1) Forex gains or losses arising from the payments to service
the debt of MWSS Loans; and (2) forex arising from principal payments of loans, limited to the list of
loans provided in the RCA. (Amended RCA Section 9.8). Forex gains/losses on additional or new
foreign currency denominated loans secured and drawn after June 29, 2022 onwards shall be
recovered through Modified FCDA. (Amended RCA Sec 9.8.1)
• Revised provision for MAGA (Amended Article 10)

On November 9, 2023, after due notice to the public, the MWSS-RO conducted a public hearing for the
extension of the expiration date of the RCA. This is in view of Parent Company’s application to extend the
term of the RCA for another 10 years or until 2047 to align with the term of its Franchise.

Parent Company’s Buy-back of Shares from Ayala and Philwater

On October 11, 2023, the Parent Company’s BOD approved a buy-back program of its shares with Ayala
and Philwater. The Parent Company re-acquired its 288,998,734 common shares and 436,243,932
participating preferred shares, respectively, for a total amount of P
= 5.72 billion. This transaction reduced
Ayala Corporation’s effective economic stake from 30.40% as of December 31, 2022 to 22.54% as of
December 31, 2023.

As of December 31, 2023, Ayala holds 577,947,462 common shares and 872,487,862 preferred shares in
the Parent Company.

Declaration of Cash Dividends

On February 29, 2024, the Board of Directors during its meeting, approved the declaration of cash dividends
amounting to P = 1.129 per share on the outstanding common shares, Php0.113 per share on the outstanding
unlisted participating preferred shares, and accumulated fixed cash dividends of PHP0.01 per share on the
outstanding unlisted participating preferred shares.

The record date is March 18, 2024 and payment date is on April 12, 2024.

SEC Form 17-A 83

MATERIAL CHANGES (INCREASE OR DECREASE OF 5% OR MORE IN THE FINANCIAL STATEMENTS)

CONSOLIDATED STATEMENTS OF INCOME (YEAR-END 2023 VS. YEAR-END 2022)

Revenue

For the years ended December 31

Increase
2023 2022 (Decrease) %
Water and used water revenues P
= 28,503,979,253 P
= 20,640,724,233 P
= 7,863,255,020 38%
Other operating revenues 1,924,089,124 1,901,722,029 22,367,095 1%
Finance income from contract assets 281,798,935 256,537,754 25,261,181 10%
P
= 30,709,867,312 P
= 22,798,984,016 P
= 7,910,883,296 35%

Water and used water revenues – 38% increase

Increase of P
= 7,863 million mainly driven by consolidated billed volume growth and increase in average tariff in
East Zone and across several NEZ business units.

Finance income from contract assets – 10% increase

Increase of P
= 25 million due additions in contract assets arising from capital expenditures for Tagum Water and
Ilagan Water projects.

Costs of Services
For the years ended December 31
Increase
2023 2022 (Decrease) %
Depreciation and amortization P
= 3,681,639,665 P
= 2,703,323,804 978,315,861 36%
Power, light and water 2,359,536,778 2,203,365,424 156,171,354 7%
Salaries, wages and employee benefits 1,259,655,907 1,146,524,894 113,131,013 10%
Contractual services 659,087,015 804,080,940 (144,993,925) (18%)
Repairs and maintenance 575,862,379 660,399,635 (84,537,256) (13%)
Regulatory costs 391,601,200 331,785,859 59,815,341 18%
Water treatment chemicals 361,716,919 429,804,871 (68,087,952) (16%)
Water tankering and bulk water 242,689,984 189,237,497 53,452,487 28%
Wastewater costs 201,439,112 246,199,021 (44,759,909) (18%)
Amortization of water service connections 191,314,332 204,760,977 (13,446,645) (7%)
Collection fees 172,903,754 173,759,450 (855,696) 0%
Management, technical and professional fees 31,181,940 41,271,558 (10,089,618) (24%)
Rent 10,801,112 5,020,642 5,780,470 115%
Other expenses 292,227,199 424,027,969 (113,800,770) (31%)
P
= 10,431,657,296 P
= 9,563,562,541 P
= 868,094,755 9%

Depreciation and amortization – 36% increase

Increase of P= 978 million driven mainly by the newly completed CAPEX projects and standardization of
depreciation methods across facilities, offset by the extension of the useful life of service concession assets under
the Franchise law.

Power, light and water – 7% increase

Increase of P
= 156 million was driven by increased rates and higher consumption both in the East Zone and NEZ
business units.

Salaries, wages and employee benefits – 10% increase

Increase of P
= 113 million was due to increase in headcount, salary rate and higher spending on employee
activities.

Contractual services – 18% decrease

Decrease of P= 145 million was mainly due to lower third-party project costs from MWIS.

Repairs and maintenance – 13% decrease

= 85 million was mainly due to East Zone’s lower leak repairs and lower reactive and preventive
Decrease of P
maintenance, offset by higher in repairs and maintenance expense in NEZ.

SEC Form 17-A 84

Water treatment chemicals – 16% decrease
Decrease of P= 68 million was mainly due to the Company’s nonrecurring adjustments in waste water chemicals
despite higher production in 2023.

Regulatory costs – 18% increase

= 59 million was due to CPI adjustment of the Company’s regulatory fees and higher cost from Laguna
Increase of P
Water and Boracay Water driven by higher revenues.

Wastewater costs – 18% decrease

Decrease of P
= 45 million was due to lower sludge hauling of treatment plants and decrease in desludged
households.

Amortization of water service connections – 7% decrease

Decrease of P
= 13 million was mainly due to higher new water service connections last year in the East Zone.

Water tankering and bulk water – 28% increase

Increase of P
= 53 million was due to higher volume requirements of customers.

Management, technical and professional fees – 24% decrease

Decrease of P
= 10 million was mainly due to lower legal and consultancy fees of the Company.

Rent – 115% increase

= 6 million from offices rented by NEZ – Philippine business units.
Increase of P

Other expenses – 31% decrease

Decrease of P114 million was mainly due to lower supplies, fuel costs on operating vehicles, among others.

Operating expenses
For the years ended December 31
Increase
2023 2022 (Decrease) %
Total operating expenses P
= 4,670,225,019 P
= 4,279,500,594 P
= 390,724,425 9%

Operating expense – 9% increase

Increase of P
= 391 million mainly driven by increase in provision for expected credit losses, higher depreciation of
newly completed leasehold improvements in 2023 and higher insurance costs.

Other Income (Expenses)

For the years ended December 31

Increase
2023 2022 %
(Decrease)
Revenue from rehabilitation works P
= 19,774,862,538 P
= 23,626,424,275 (P
= 3,851,561,737) (16%)
Cost of rehabilitation works (19,774,862,538) (23,626,424,275) 3,851,561,737 (16%)
Foreign currency differentials (26,863,199) 2,532,900,291 (2,559,763,490) (101%)
Foreign exchange gains (losses) – net 80,917,973 (1,870,416,962) 1,951,334,935 (104%)
Equity share in net income of associates (3,561,491,909) 520,067,157 (4,081,559,066) (785%)
Interest income 301,229,071 121,758,500 179,470,571 147%
Interest expense (3,773,677,075) (2,816,244,442) (957,432,633) 34%
Gains (losses) on disposal of property
and equipment – net (10,780,662) 2,995,037 (13,775,699) (460%)
Amortization of deferred credits 12,270,995 13,216,379 (945,384) (7%)
Other income – net 346,274,429 700,768,319 (354,493,890) (51%)
(P
= 6,632,120,377) (P
= 794,955,721) (P
= 5,837,164,656) 734%

Revenue from rehabilitation works and cost of rehabilitation works – 16% decrease.
Decrease of P
= 3,852 million was mainly due to lower capital expenditures of the Group during the year.

Foreign currency differentials and foreign exchange losses - net – 92% decrease
Net decrease of P
= 608 million was mainly due to reversion to the Original Concession in 2022 which contains one-
time adjustments, higher foreign exchange gains from cash and other assets in 2022 due to depreciation of Peso
against USD and impact of unwinding of derivative asset related to Euro-loan principal only swap.

SEC Form 17-A 85

Equity share in net income of associates – 785% decrease
Decrease of P
= 4,082 million was mainly attributed to the impairment provision on the East Water investment.

Interest income – 147% increase

Increase of P= 179 million was from peso and dollar investments maintained during the year.

Interest expense – 34% increase

Increase of P
= 957 million was driven mainly by interest on loans which were fully capitalized in 2022 and accretion
of East Zone’s bulk water contract.

Gains on disposal of property and equipment - net – 460% decrease

Decrease of P
= 13 million was due to the loss on disposal recognized in 2023 compared to gain from 2022.

Amortization of deferred credits – 7% decrease

Decrease of P
= 1 million was due to extension of amortization period based on the term of the Franchise.

Other income - net – 51% decrease

Decrease of P = 354 million was mainly attributed to the Company’s recognized gain last year from reversal of
provision related to Clean Water Act case.

Provision for income tax – 54% increase

= 1,091 million mainly due to higher taxable income both in East Zone and NEZ – Philippines.
Increase of P

Net loss from discontinued operations – 87% decrease

Decrease of P= 6 million was attributable to the Zamboanga Water’s lower operating expenses as it winds down its
business following the termination of the NRWRSA with ZCWD in 2020.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (YEAR-END 2023 VS. YEAR-END 2021)

December December Increase

%
31, 2023 31, 2022 (Decrease)
ASSETS
Current Assets
Cash and cash equivalents P
= 10,752,734,174 P
= 8,811,939,212 1,940,794,962 22%
Short-term investments – 128,417,810 (128,417,810) (100%)
Receivables - net 2,904,919,846 2,782,499,912 122,419,934 4%
Contract assets - current portion 549,872,454 934,780,675 (384,908,221) (41%)
Inventories 380,615,118 450,657,769 (70,042,651) (16%)
Other current assets 1,534,552,165 2,002,445,492 (467,893,327) (23%)
Total Current Assets 16,122,693,757 15,110,740,870 1,011,952,887 7%

Noncurrent Assets
Property, plant and equipment and software 9,108,755,273 7,163,920,549 1,944,834,724 27%
Service concession assets 162,217,498,951 145,065,205,551 17,152,293,400 12%
Right-of-use assets 328,465,866 426,136,195 (97,670,329) (23%)
Contract assets - net of current portion 1,168,784,073 1,729,817,675 (561,033,602) (32%)
Investments in associates 11,191,568,307 15,434,604,040 (4,243,035,733) (27%)
Goodwill 6,247,010 6,247,010 – –
Deferred tax assets - net 499,689,152 635,223,298 (135,534,146) (21%)
Other noncurrent assets 9,043,699,328 9,232,277,139 (188,577,811) (2%)
Total Noncurrent Assets 193,564,707,960 179,693,431,457 13,871,276,503 8%
TOTAL ASSETS 209,687,401,717 194,804,172,327 14,883,229,390 8%

LIABILITIES AND EQUITY

Current Liabilities
Accounts and other payables P
= 18,761,072,969 P
= 16,194,519,558 P
= 2,566,553,411 16%
Short-term debt 135,000,000 252,872,324 (117,872,324) (47%)
Current portion of:
Long-term debt 16,971,501,294 6,024,171,860 10,947,329,434 182%
Service concession obligations 910,632,846 729,984,535 180,648,311 25%
Contract liabilities 389,570,970 347,150,494 42,420,476 12%
Lease liabilities 117,029,647 120,860,143 (3,830,496) (3%)
Income tax payable 339,116,369 415,028,621 (75,912,252) (18%)
Total Current Liabilities 37,623,924,095 24,084,587,535 13,539,336,560 56%

(Forward)
SEC Form 17-A 86
 December December Increase
%
31, 2023 31, 2022 (Decrease)
Noncurrent Liabilities
Noncurrent portion of:
Long-term debt 82,275,949,853 78,645,612,772 3,630,337,081 5%
Service concession obligations 15,214,188,022 15,313,404,443 (99,216,421) (1%)
Contract liabilities 921,419,562 590,112,583 331,306,979 56%
Lease liabilities 215,348,111 315,487,289 (100,139,178) (32%)
Pension liabilities - net 388,222,417 288,213,851 100,008,566 35%
Deferred tax liabilities - net 1,052,304,983 338,020,390 714,284,593 211%
Provisions 402,658,841 653,750,967 (251,092,126) (38%)
Other noncurrent liabilities 1,473,942,280 1,121,724,232 352,218,048 31%
Total Noncurrent Liabilities 101,944,034,069 97,266,326,527 4,677,707,542 5%
Total Liabilities 139,567,958,164 121,350,914,062 18,217,044,102 15%

Equity
Attributable to equity holders of Manila Water Company, Inc.
Capital stock:
Common stock P
= 2,884,839,617 P
= 2,884,839,617 =–
P –
Preferred stock 400,000,000 400,000,000 – –
3,284,839,617 3,284,839,617 – –
Additional paid-in capital 14,458,016,211 14,427,621,413 30,394,798 0%
Treasury shares
Common stock (4,996,646,260) (43,313,195) (4,953,333,065) 11,436%
Preferred stock (752,978,046) – (752,978,046) 100%
Subscriptions receivable (5,607,257,718) (5,644,968,396) 37,710,678 (1%)
Total paid-up capital 6,385,973,804 12,024,179,439 (5,638,205,635) (47%)
Retained earnings:
Appropriated 56,500,000,000 40,610,000,000 15,890,000,000 39%
Unappropriated 5,717,748,773 18,087,151,743 (12,369,402,969) (68%)
Cumulative translation adjustment 741,911,347 533,548,708 208,362,639 39%
Hedging reserves (64,919,310) 1,310,852,803 (1,375,772,113) (105%)
Remeasurement loss on defined benefit plans (231,816,570) (167,831,265) (63,985,305) 38%
Equity in other comprehensive income (loss)
of an associates 2,734,309 (1,906,738) 4,641,047 (243%)
Other equity reserves (144,458,138) (144,458,138) – –
68,907,174,215 72,251,536,552 (3,344,362,337) (5%)
Noncontrolling interests 1,212,269,338 1,201,721,713 10,547,625 1%
Total Equity 70,119,443,553 73,453,258,265 (3,333,814,712) (5%)
TOTAL LIABILITIES AND EQUITY P
= 209,687,401,717 P
= 194,804,172,327 P
= 14,883,229,390 8%

Cash and cash equivalents – 22% Increase

Increase of P
= 1,941 million mainly driven by net loan drawdowns, countered by capital expenditures, operating
expenses and dividend payments.

Short-term investments – 100% decrease

Decrease of P= 128 million was due to the maturity of short-term money market placements during the year.

Contract assets (current and noncurrent) – 36% decrease

= 946 million is mainly due to the termination of the Cebu Water’s bulk water supply and purchase
Decrease of P
agreement.

Property, plant and equipment – 27% increase

Increase of P= 1,945 million was attributable to the additional capital expenditures of the Group during the period
and from the reclassified contract assets to property, plant and equipment as a result of the Cebu Water contract
termination.

Service concession assets – 12% increase

= 17,152 million was attributable to the CAPEX related to the Parent Company’s bulk water contract
Increase of P
and other capital expenditures, offset by amortization expense during the period.

Right-of-use assets – 23% decrease

Decrease of P = 98 million pertains to the amortization of lease contracts related to office spaces, storage and plant
facilities, land and right-of-way wherein the Group is the lessee.

SEC Form 17-A 87

Investment in associates – 27% decrease
Decrease of P
= 4,243 million was due to the net effect of the recognized impairment provision on the investment in
East Water, share in net income of associates and effects of foreign currency translation.

Deferred tax assets and deferred tax liabilities - net 286% decrease
Decrease of P= 850 million was mostly driven by movements in depreciation due to extension of useful life aligned
with the term of the Franchise, change in depreciation method and capitalized borrowing cost.

Other noncurrent assets – 2% decrease

Decrease of P= 189 million was due to adjustment in FCDA and fair value changes on the Company’s derivative
assets during the year.

Accounts and other payables – 16% increase

= 2,567 million was due to rise in trade payables and accrued expenses from the Group’s operational
Increase of P
and capital expenditures requirements.

Short-term debt – 47% decrease

Decrease of P
= 118 million was due to payments of short-term loans in 2023.

Contract liabilities (current and noncurrent) – 40% increase

Increase of P
= 374 million was due to additional unearned income from supervision fees and from connection fees
of the domestic subsidiaries.

Long-term debt (current and noncurrent) – 17% increase

Increase of P
= 14,578 million was mainly due to availment of loan from Land Bank of the Philippines and Metrobank
Trust & Company, Inc., offset by payment of outstanding long-term loans.

Service concession obligations (current and noncurrent) – increase 1%

= 81 million was mainly due to additional CAPEX related to the Parent Company’s bulk water contract
Increase of P
and other capital expenditures.

Lease liabilities (current and noncurrent) – 24% decrease

Decrease of P = 104 million was mainly due to payments of lease liabilities during the year.

Income tax payable – 18% decrease

Decrease of P
= 76 million was mainly driven by higher income tax payment and higher application of CWT in 2023.

Pension liabilities - net – 35% increase

Increase of P= 100 million was due to increase in number of covered employees and updates on actuarial
assumptions.

Provisions – 38% decrease

Decrease of P= 251 million due to payment of provisions in 2023.

Other noncurrent liabilities – 31% increase

Increase of P
= 352 million was due to the shareholder loans obtained by Cebu Water to finance the prepayment of
its commercial loan from DBP.

Treasury shares – 13175% increase

= 5,706 million from the Company’s buy back of its comment and preferred shares with Ayala
Increase of P
Corporation and Philwater Holdings Company, Inc.

Retained earnings - unappropriated – 68% decrease

Decrease of P= 12,369 million represents the net income attributable to the equity holders of the Company offset
by dividends declared and appropriations made during the year.

Retained earnings – appropriated 39% increase

= 15,890 million represents the appropriation to ensure the completion of the Company’s large system
Increase of P
projects under its approved business plan.

SEC Form 17-A 88

Cumulative translation adjustment – 39% increase
Increase of P
= 208 million was due to the cumulative translation gain recognized during the period caused by the
depreciation of the PHP against the VND and USD. This was partly offset by the impact of the net investment
hedge of the Group’s investment in MWAP.

Hedging reserves – 105% decrease

Decrease of P
= 1,376 million mainly driven by the unwinding of the derivative asset related to EUR120 million
hedge.

Remeasurement loss on defined benefit plans – 38% increase

Increase of P
= 64 million was due mainly to changes in actuarial assumptions both on long-term employee benefits
and long-term SLVL liability.

FACTORS AFFECTING THE GROUP’S RESULTS OF OPERATIONS

Water Tariff

Water rates are set according to the rate determination specified in the respective concession agreements of the
entities under the Group. The Group has several signed concession arrangements mostly with government
entities, such as the MWSS, Calasiao Water District, Tourism Infrastructure and Enterprise Zone Authority,
Calbayog City Water District, Clark Development Corporation, Obando Water District, Bulacan Water District, City
of Ilagan Water District, Tanauan Water District, Provincial Government of Laguna, Pagsanjan Water District, and
Lambunao Water District.

The Group’s tariff schedules generally apply to the four main categories of customers namely, residential, semi-
business, commercial, or industrial. Customers pay service charges, plus applicable taxes, based on one or more
of the following:
• water charge;
• environmental charge;
• sewer charge;
• maintenance service charge; and/or
• foreign currency differential adjustment (FCDA).

In 2023, the Group generated 93% of its revenue from water and used water charges and 7% from its other
operating income and finance income from contract assets.

Tariff Rate Adjustments

The Group’s results of operations and financial condition are dependent upon the determination and
implementation of reasonable tariff rate increases for its water and sewerage services under its concession
agreements. The Group is entitled to one or more of the following tariff rate adjustments on top of the basic water
charge under its concession agreements, whenever applicable.
• annual standard rates adjustment to compensate for increases in the Philippine Consumer Price Index
(CPI), subject to the rate adjustment limit;
• extraordinary price adjustment (EPA) to account for the financial consequences of certain unforeseen
events, subject to the grounds stipulated in the applicable concession agreement; and/or
• FCDA to recover or account for foreign exchange losses and gains arising from loans and any
concessionaire loans used for its service expansion and improvement. The FCDA is a recovery
mechanism available in the concession agreements of the Company and Boracay Water.
• Beginning November 18, 2021, the Company’s RCA removed its FCDA recovery mechanism from
the water rates of the Company’s customers.
• The Company and MWSS has since executed six (6) amendments to the RCA extending its Effective
Date to allow time to complete the remaining condition precedent, which is the Undertaking Letter
from the Republic. The Sixth Amendment was executed on May 19, 2022 extending the Effective
Date to not later than June 30, 2022.
• On May 10, 2023, the 7th Amendment of the RCA was executed adding a provision to allow FCDA
for the FOREX losses / gains arising from (a) principal and interest payments on all MWSS loans;
and (b) principal payments for drawn and undrawn amounts of Concessionaire loans outstanding
before effectivity of the RCA. For foreign currency denominated Concessionaire loans after effectivity
it will be subject to Modified Foreign Currency Differential Adjustment.
• Boracay Water maintains this natural hedge under the FCDA.

SEC Form 17-A 89

In addition to the tariff adjustments described above, under the concession agreements, tariff rates of the Group
are evaluated under a regular process called Rate Rebasing, through which the rates for water and sewerage
services are recalibrated to allow the Group to recover over the remaining concession period the following items:
• operating, capital maintenance and investment expenditures (efficiently and prudently incurred);
• Philippine business taxes; and
• payments corresponding to debt service on grantor and concessionaire loans.

Philippine Economic Conditions

With most of the Group’s operations based in the Philippines, the Group’s results of operations and financial
condition are affected by the general economic conditions in the country, particularly by inflation rates, interest
rates, and currency exchange rate movements. Specifically, the general performance of the Philippine economy
affects demand for water and wastewater services, and inflation affects the Group’s costs and its margins. While
the Group is allowed to recover certain costs associated with changes in inflation and currency exchange rates,
these adjustments are implemented over several years within the Rate Rebasing period. Moreover, approved
tariff rate adjustments may not cover all increased costs to the Group associated with changes in economic
conditions.

Inflation
Each year, the Group may propose tariff rate adjustments to account for inflation, as measured by the CPI
published regularly by the Philippine Statistics Authority. These proposed rate adjustments are subject to the
rates adjustment limit set forth in the Concession Agreements and guidelines of tariff regulation bodies. Although
the Group has generally been granted its proposed CPI related tariff rate adjustments in the past, a significant
increase in inflation may increase the Group’s costs beyond what it can recover through the CPI tariff rate
adjustment. In 2023, full year average inflation was at 6.00%, which is beyond the government’s target range of
3.00% to 4.00% for the year.

Interest Rates
The Group raises significant amounts of borrowings to finance the acquisition, development, improvement and
construction of fixed assets for projects needed to meet service obligations. The Group maintains a mix of loans
with floating and fixed interest rates. Interest rates are dependent on market conditions wherein significant
increases in rates will increase the Group’s borrowing costs. In 2023, the Central Bank of the Philippines hiked
its policy rate by 100 bps from 5.5% in 2022 to 6.5% in 2023, to curb the continued rise of inflation in the Philippine
economy.

Currency Exchange Rates

The Group is also allowed to request a quarterly tariff rate adjustment for foreign currency differentials to recover
for present and future foreign exchange losses or gains on MWSS and TIEZA loans, and Group loans used for
capital expenditures and payments of concession fees. Like the CPI adjustment, there can be no assurance that
the Company and Boracay Water will obtain adjustments on its tariff rates which will fully account for all foreign
currency fluctuations, particularly during instances where is a significant depreciation of the Philippine Peso.
Movements in the Peso and other foreign denominated currencies are driven by global market uncertainty and
political risk.

Water Supply

The Group’s water supply is dependent on infrastructure to draw water from surface and ground sources. For
the Company, supply is heavily dependent on the allocation of raw water from the Angat Dam. Due to increasing
demand over time, the Company is continuously implementing projects to develop new water sources to meet
customer demand.

Furthermore, the Philippines is significantly affected by the El Niño phenomenon which is characterized by
prolonged and severe drought. During such periods, sources of raw water available to the Company from MWSS
are significantly strained, thus affecting the Company’s ability to supply adequate treated water to its customers.
Currently, the Company’s water supply is being augmented by the Cardona Water Treatment Plant, as well as by
the Wawa-Calawis project which came online in October 2022. The Company maintains and operates numerous
deep wells for contingency water supply requirements.

SEC Form 17-A 90

Regulations

Under its concession agreements, bulk water sales and purchase agreements, and JVAs, the Group acts as
either an agent or a partner of the MWSS, local government, or local water districts in providing water and/or used
water services to the public. Each of the contracts, provide for the principals or the partners to monitor and ensure
compliance with the obligations in the contracts. The Group’s significant commitments under these contracts are
disclosed in Note 29 to the Audited Consolidated Financial Statements.

Liquidity and Capital Resources

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
bank loans, and debentures. The Group’s policy is to maintain a level of cash that is sufficient to fund its operating
cash requirements for the next three (3) to six (6) months and any claim for refund of customers’ guaranty
deposits. Capital expenditures are funded through long-term debt, while operating expenses and working capital
requirements are sufficiently funded through internally generated cash. Maturing debts are refinanced through a
combination of long-term debt and internally generated cash.
Capital Sources
The Group’s cash and cash equivalents as of December 31, 2023 ended at P = 10,752.73 million due to positive
and strong cash flows from operations. During 2023, the Group had more cash expenditures than inflows across
its investing and financing activities. Operating activities, however, has provided more cash inflows from the
Group’s results of operations. Cash outflows were primarily for capital expenditures, payment of debt and
dividends and acquisition of treasury shares. The Group’s improvement and expansion project implementation
were funded by available credit lines, loan facilities from reputable local and international financing institutions.

Cash Provided by Operating Activities. Net cash provided by operations in 2023 amounted to P = 4,506.81 million
primarily as a result of the improved performance of the Group, countered by the service improvement activities
and capital expenditures for the expansion of water and used water networks required under the respective
concession arrangements of the Group amounting to P = 13,529.05 million. Excluding the effect of changes in
service concession assets which are presented under cash flows from operating activities in accordance with
IFRIC 12 and PAS 7, the Group’s net cash inflow from operating activities amounted to P= 18,035.86 million.

Cash Used in Investing Activities. Net cash used in investing activities for the year ended December 31, 2023
amounted to P = 2,388.96 million. Cash was used mainly for the acquisition of additional property, plant and
equipment amounting to P = 1,943.17 million. These were partly offset by the P= 311.20 million dividend proceeds
from associates, P = 300.75 million interest received during the year from cash in banks, cash equivalents, and
short-term investments, P = 128.42 million net proceeds for maturity of short-term investments, P = 5.39 million
proceeds from disposal of property and equipment. Movements in other noncurrent assets amounting to
(P
= 1,191.55) million also contributed to net cash used in investing activities.

Cash Used in Financing Activities. Net cash used in financing activities for the year ended December 31, 2023
amounted to P = 176.97 million. Cash inflows were mainly from the drawdowns of long-term and short-term debt
totaling P
= 21,469.61 million and proceeds from subscription of shares amounting to P = 15.56 million. The cash
inflows were offset by the payment of long-term and short-term debt totaling P = 7,050.14 million, payment of service
concession obligations amounting to P = 1,683.33 million, interest payments on short-term and long-term debt
amounting to P = 4,778.43 million, dividends payments totaling P = 2,339.31 million, acquisition of treasury shares
amounting to P = 5,716.31 million, and payment of lease liabilities amounting to P
= 133.02 million. Movements in other
noncurrent liabilities amounting to P= 38.40 million also contributed to net cash used in financing activities.

Further details are disclosed in the Group’s Audited Consolidated Statements of Cash Flows.

Contractual Obligations and Commercial Commitments

The Group's significant contractual obligations and commercial commitments as of December 31, 2023 are
disclosed in the Group's Audited Consolidated Financial Statements as follows:

• The Group's liquidity risk is disclosed in Note 28.

• Significant commitments with the West Concessionaire and those required under the Group's concession
or joint venture agreements are disclosed in Notes 24 and 29, respectively.
• Other obligations under the Group's long-term debt agreements are in Note 15.

There were no material off-balance sheet transactions, arrangements, obligations (including contingent
obligations other than those disclosed in Note 30 to the Audited Consolidated Financial Statements).

SEC Form 17-A 91

Restatement of Accounts

The consolidated financial statements of the Group have been prepared in compliance with Philippine Finance
Reporting Standards (PFRS) and provide comparative information in respect of the previous periods.

No restatements were made in the Consolidated Statements of Financial Position as of December 31, 2023 and
2022, and Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity,
and Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021.

KEY VARIABLE AND OTHER QUALITATIVE AND QUANTITATIVE FACTORS

a. The Group does not have any significant seasonality or cyclicality in its operations, except for the usually
higher demand during the summer months of April to June.

b. The Group has not made any modification to its existing debt and has not availed of any extension in
debt servicing.

As of December 31, 2023, there were no other known trends, demands, commitments, events or
uncertainties that have material impact on the Group’s liquidity and sales aside from those disclosed in
the audited consolidated financial statements.
c. The Group has various contingent liabilities arising from the ordinary conduct of business which are either
pending decision by the courts or are being contested, the outcomes of which are not presently
determinable. The details are disclosed in Note 30, Provisions and Contingencies, of the audited
consolidated financial statements.

d. There were no off-balance sheet transactions, arrangements, and obligations created during the
reporting period.

e. Other than the items disclosed in the audited consolidated financial statements, the Group did not acquire
assets nor incur liabilities that are material in amount for the period ended December 31, 2023.

f. In 2022, certain prior year amounts have been reclassified by the Group to conform to current year
presentation. These reclassifications had no effect on the reported results of operations. The details are
further disclosed in Note 18, Other Operating Revenue, Operating Expenses, Interest Income and
Expense, and Other Income and Losses, of the audited consolidated financial statements.

SEC Form 17-A 92

CONSOLIDATED FINANCIAL PERFORMANCE (YEAR-END 2022 VS. YEAR-END 2021)

Group net income for the period ending December 31, 2022 increased 61% from the same period last year to
P
= 5,923 million. Excluding one-offs, core income stood at P
= 5,541 million.

The Group’s key financial performance indicators are discussed below:

For the years ended December 31

Increase
(in millions) 2022 2021 (Decrease) %
Total revenues P
= 22,799 P= 20,530 P
= 2,269 11%
Total cost and expenses (excluding depreciation
and amortization) 10,823 9,220 1,603 17%
Other income (expenses) - net 813 377 436 116%
Equity share in net income of associates 520 569 (49) (9%)
Other income (expenses) - net 292 (192) 484 252%
Earnings before interest, income taxes,
depreciation, and amortization (EBITDA) 12,789 11,687 1,102 9%
Depreciation and amortization expense 3,046 3,628 (582) 16%
Income before interest income and expense and
foreign exchange gains and losses 9,743 8,059 1,684 21%
Interest expense - net (2,694) (2,403) (291) 12%
Foreign exchange gains (losses) - net 662 (348) 1,010 290%
Other income 450 - 450 100%
Income before income tax 8,161 5,308 2,853 54%
Provision for income tax 2,013 1,539 474 31%
Net income from continuing operations 6,148 3,769 2,379 63%
Net loss after tax from discontinued operations 3 (6) (15) 9 60%
Net income 6,142 3,754 2,388 64%
Non-controlling interests* 219 81 138 170%
Net income attributable to MWC P
= 5,923 P
= 3,673 P
= 2,250 61%
*Non-controlling interest is an ownership position whereby a shareholder owns less than 50% of outstanding shares.

Consolidated operating revenues increased 11% to P = 22,799 million in 2022 from P

= 20,530 million the same period
last year. Said increase was primarily driven by higher billed volume across all segments, coupled with higher
connection fees and cross border charges in the Company. This growth was further supported by the 30%
increase in Non-East Zone revenues, on the back of tariff increases in several business units and 6% increase in
billed volume, with further support from integrated used water and pipelaying projects revenues of MWIS and
higher sewer revenues led by Estate Water. The Group derived 75% of its operating revenues from the sale of
water, while 16% came from environmental and sewer charges. Other revenues, which account for the balance,
are comprised of supervision fees, connection fees, after-the-meter services, service income from bulk water
arrangements, and finance income from contract assets, among others.

Aside from factors which occur in the normal course of business, Management does not have any knowledge of
material trends, events or uncertainties which it deems will have a material impact on revenues.

For the years ended December 31

Increase
(in millions) 2022 2021 (Decrease) %
Personnel costs P
= 2,471 P= 2,466 (P
= 5) 0%
Direct costs 5,730 3,973 1,757 44%
Overhead costs 1,127 1,719 (592) (34%)
Premises costs 453 394 59 15%
Other cost and expenses 1,042 668 374 56%
Total cost and expenses P
= 10,823 P= 9,220 P
= 1,603 17%

3
For years ended December 31, 2022 and 2021, the Group presented as a single amount in its consolidated statement of income the post-tax net loss
of its discontinued operations in Zamboanga Water and the Healthy Family division of MWIS.
SEC Form 17-A 93
Consolidated cost of services and expenses increased by 17% to P = 10,823 million in 2022 from P
= 9,220 million
due to higher costs in nearly all categories except overhead. Total fixed costs, which comprised nearly 66% of
total OPEX for the year, increased 8%, driven primarily by repairs and maintenance costs as a result of improved
mobility and resumption of economic activities. Similarly, power costs increased by 52% due to the combined
effect of the following: (1) increased consumption with the higher operating protocols at the EZ to comply with the
new bio-nutrient removal (BNR) standards of the Department of Environment and Natural Resources (DENR); (2)
higher power rates with the impact of higher fuel prices on fixed power contracts; and (3) increased consumption
and higher power rates for the NEZ - PH group in its operating facilities. Other variable costs relating to meter
reading, collection and connection activities likewise increased with the improved mobility of business operations.
Lastly, the significant increase in other income pertains to reversal of long-outstanding accounts, gain on
insurance claims and input VAT adjustments, as well as foreign currency differential adjustment booked in 2021,
among others.

Consequently, consolidated EBITDA increased 9% to end at P = 12,789 million for the year, with an EBITDA margin
of 56%. Depreciation and amortization decreased by 16% to P
= 3,046 million with the change in useful life of service
concession assets in the East Zone under the franchise law.

Net interest expense was higher by 12% from last year at P = 2,694 million, driven by hedging costs which were
slightly offset by higher capitalized borrowing cost at the Company, higher debt balance of MWPVI subsidiaries,
and lower interest income due to lower holdings of cash and short-term investments.

On the other hand, foreign exchange gains totaled P

= 662 million for the year due to the depreciation of the PHP
vs USD, as well as writeback of deferred forex losses in line with the reversion to the Original Concession
Agreement. Lastly, provision for income tax increased to P= 2,013 million mainly driven by (1) higher taxable
income; and (2) deferred tax on unrealized forex and depreciation; but slightly offset by deferred taxes on
Expected Credit Losses (ECL) in the Company.

BUSINESS UNITS’ FINANCIAL AND OPERATING PERFORMANCE

Parent Company – East Zone

Net income of the Company stood at P = 5,499 million for the year, 52% higher than the same period last year. This
was driven primarily by higher revenues coming from the recovery in consumption of commercial and industrial
accounts, coupled with higher connection fees and cross border charges. Amortization and depreciation
decreased 22% to P = 2,284 million as Estimated Useful Life (EUL) of service concession assets was changed from
July 2037 to January 2047 which took effect from January 1, 2022 in line with the approval of the franchise law.
Furthermore, this was coupled by foreign exchange gains due to the depreciation of the PHP vs USD, as well as
writeback of deferred forex losses as well as the partial reduction of provisions in line with the Supreme Court
resolution of the case involving the Clean Water Act. Said improvement was slightly offset by higher cost and
expenses and interest expense.

For the years ended December 31

Increase
2022 2021 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters)* 501.4 488.5 12.9 3%
Average tariff (in Pesos per cubic meter)** 32.5 32.0 0.5 2%
Number of billed connections*** 1,063,216 1,033,211 30,005 3%
Collection efficiency**** 102.4% 100.7% 1.7 ppts
Non-revenue water***** 12.2% 12.8% 0.7 ppts.

Financial Highlights (in millions)

Revenues P
= 17,131 P
= 16,084 P
= 1,047 7%
Cost and expenses (excluding depreciation and
amortization) 7,181 6,140 1,041 17%
EBITDA 10,207 9,803 404 4%
Net income P
= 5,499 P
= 3,618 P
= 1,881 52%
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm)
**Average tariff is operating revenue over billed volume
***Billed connections is the number of water service connections in the concession area, which is measured by count
****Collection efficiency is total amount collected over total revenue billed for the period; this metric is among the regula tory KPIs being monitored
by MWSS
****Non-revenue water refers to the volume of water lost in the Company’s distribution system due to leakage, pilferage, illegal connections, and
metering errors. As determined by the MWSS-RO, NRW is calculated as the percentage of water lost against the net volume of water supplied by
the Company.

SEC Form 17-A 94

Revenues increased 7% to P = 17,131 million from P
= 16,084 million the same period last year driven by higher water
revenues, connection fees and cross-border charges. Said increase was realized even amid the challenges which
the prevailing tariff freeze posed upon the business, with estimated impact amounting to more than P = 4,891 million.
Meanwhile, cost and expenses for the period increased 17% to P = 7,181 million. This was driven by higher direct
costs, and mainly by higher power cost due to the rise in consumption and power rates. The business saw the
continued ramp up of repairs and maintenance, collection and connection activities, as well as higher operating
protocols to comply with the BNR standards of the DENR. On the other hand, overhead costs decreased from
the same period last year due to reversal of provisions for ECL.

With these movements, EBITDA increased by 4% to P

= 10,207 million from P
= 9,803 million last year. EBITDA margin
stood at 60%.

Non-East Zone (NEZ) – Philippines

The following discussion covers the consolidated results of NEZ - Philippines, driven mainly by its core domestic
operating subsidiaries in Boracay Water, Clark Water, Laguna Water, and Estate Water (a division of MWPVI).

For the years ended December 31

Increase
2022 2021* (Decrease) %
Operating Highlights
Billed volume (in million cubic meters) 115.9 108.9 7.0 6%

Financial Highlights (in millions)

Revenues P
= 5,839 P
= 4,506 P
= 1,333 30%
Cost and expenses (excluding depreciation and
amortization) 3,467 3,127 340 11%
EBITDA 2,395 1,459 936 64%
Net income attributable to MWC P
= 137 (P
= 392) P
= 529 135%
*Includes MWIS to show total domestic operations

NEZ – Philippines ended the year with P = 137 million net income. This marked its significant turnaround from last
year’s P
= 392 million net loss position. This substantial improvement in profitability was mainly driven by significant
recovery in revenues, in line with improved mobility and improved economic activity.

On a consolidated MWPVI level, revenues were higher by 30% at P = 5,839 million, mostly attributable to the growth
in revenues from construction projects, increased water revenues from tariff hike implementation, billed volume
improvements in several business units, and higher sewer revenues from Estate Water. Higher supervision fees
from Laguna Water and Estate Water also contributed to overall growth in revenues.

Total cost and expenses increased by 11% year-on-year to P = 3,467 million mainly as a result of the increase in
direct costs, and slightly offset by the decline in overhead expenses. The increase in direct cost was from higher
contractual services, power costs due to higher consumption and rates, as well as repairs and maintenance costs.
The decline in overhead costs was mainly due to lower provision for expected credit losses recorded in 2022.

The movements in MWPVI Group’s revenues and costs resulted to better EBITDA by 64% or an improvement of
P
= 936 million from P
= 1,459 million in 2021 to P
= 2,395 million in 2022. EBITDA margin was at 41% which is an
increase of 9 percentage points compared from last year’s 32%.

Net interest expense increased to P= 998 million driven by higher bank debt balance and higher interest expense
resulting therefrom, and further from the payment of service concession obligations. Depreciation and
amortization expense grew by 6% to P = 784 million due to increased capital expenditures. This was partially offset
by the impact of the shift to units of production method of depreciation effective April 2022 for Estate Water,
Bulacan Aqua Estates, Aqua Centro, and Eco Water.

SEC Form 17-A 95

Below is a summary of the results of MWPVI’s core subsidiaries which contribute 71% of total revenues of
NEZ - Philippines:

For the years ended December 31

Increase
2022 2021 (Decrease) %
Clark Water
Billed volume (in million cubic meters)* 13.5 12.8 0.6 5%
Average tariff (in Pesos per cubic meter)** P
= 32.7 P
= 31.8 P
= 0.9 3%
Net income (in millions) P
= 78 P
= 52 P
= 26 49%
Billed Connections*** 2,003 2,021 (18) (1%)
Non-Revenue Water**** 5.8% 4.9% 0.9 ppts 18%
Laguna Water
Billed volume (in million cubic meters) 45.6 45.9 (0.2) (1%)
Average Tariff (in Pesos per cubic meter) P
= 44.7 P
= 40.7 P
= 4.0 10%
Net income (in millions) P
= 614 P
= 488 P
= 126 26%
Billed Connections 124,119 116,367 7,752 7%
Non-Revenue Water 22.3% 20.0% 2.3 ppts 11%
Boracay Water
Billed volume (in million cubic meters) 3.5 2.3 1.2 51%
Average tariff (in Pesos per cubic meter) P
= 126.1 P
= 112.1 P
= 14.0 12%
Net loss (in millions) (P
= 102) (P
= 175) P
= 73 42%
Billed Connections 4,629 3,932 697 18%
Non-Revenue Water 23.5% 18.5% 5.0 ppts. 27%
Estate Water
Supervision fees***** 245.6 199.0 47 23%
Billed volume (in million cubic meters) 7.6 7.1 0.5 7%
Average tariff (in Pesos per cubic meter) P
= 47.7 P
= 41.9 P
= 5.8 14%
Net income (in millions) P
= 76 (P
= 190) P
= 266 140%
Billed Connections 15,716 14,172 1,544 12%
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm)
**Average tariff is revenue over billed volume
***Billed connections is the number of water service connections in the concession area, which is measured by count
****Non-revenue water refers to the volume of water lost in the Company’s distribution system due to leakage, pilferage, illegal connections, and
metering errors. As determined by the MWSS-RO, NRW is calculated as the percentage of water lost against the net volume of water supplied by
the Company
*****Supervision fee is a fee or charge paid by the customer to the Company in exchange for the latter's assurance of potable water and/or effective
wastewater services in new developments

Clark Water registered billed volume of 13.5 million cubic meters (mcm) in 2022, 5% higher from its billed volume
during the same period last year of 12.8 mcm. This performance was mainly driven by higher consumption of its
commercial, industrial and government accounts. Consequently, Clark Water’s revenues grew 4% to P = 451 million.
On the other hand, Non-revenue Water increased slightly, in line with the increase in registered demand.
Meanwhile, total costs and expenses rose by 2% to P = 246 million from P= 241 million last year. Combined with lower
overhead costs, Clark Water’s net income stood at P = 78 million for the period.

Laguna Water’s billed volume declined by 1% to 45.6 mcm in 2022 from 45.9 mcm in 2021 driven by lower
consumption of industrial accounts. Even amid this decline, Laguna Water’s revenues grew 13% year-on-year to
P
= 2,173 million, driven by a 10% improvement in average effective tariff to P = 44.7 per cubic meter with the
implementation of tariff hikes which started June 2022. Non-revenue Water increased 2.3ppts to 22.3% from 20%
last year with the continued takeover of legacy networks in line with expansion. Meanwhile, cost and expenses
were held to a 1% increase from 2021 to P = 894 million. These movements resulted in a 23% growth in EBITDA
to P
= 1,279 million and a 26% increase in net income to P = 614 million for the period ending December 2022.

Boracay Water’s 2022 billed volume registered healthy recovery of 51% to 3.5 mcm from last year’s 2.3 mcm due
to the island’s reopening to visitors. This enabled tourist arrivals to increase by close to 1.5 million from the same
period last year. The increase in billed volume, coupled by a 12% increase in effective tariff, resulted in a 121%
increase in Boracay Water’s revenues to P = 417 million for the year. Total cost and expenses increased by 17%
versus last year, driven by higher direct cost from repairs and maintenance, power and fuel costs. This resulted
to an improved performance of Boracay Water with a net loss position of P = 102 million.

SEC Form 17-A 96

Estate Water, a division of MWPVI, posted billed volume growth of 7% to 7.6 mcm for the period ended
December 2022. This was due to higher consumption from its residential and commercial segments from existing
developments, and further supported by the 12% increase in billed connections with the addition of new accounts
from greenfield projects. Estate Water significantly increased its supervision fees with its higher construction
progress in its greenfield projects. Furthermore, its average tariff increased 14% due to the implementation of
tariff increase in its developments. It closed the year with a net income of P
= 76 million.

NEZ – International

The following discussion covers the consolidated results of MWAP which comprise the NEZ – International
business of the Group. Specifically, these are the performance contributions of associates in Vietnam, Thailand,
Indonesia, and the Kingdom of Saudi Arabia.

For the years ended December 31

Increase
2022 2021 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters)* 637.6 672.5 (35) (5%)

Financial Highlights (in millions)

Equity share in net income of associates** P
= 520 P
= 570 (P
= 50) (9%)
Cost and expenses (excluding depreciation and
amortization) 252 137 115 84%
EBITDA 290 449 (159) (35%)
Net income attributable to MWC P
= 154 P
= 316 (P
= 162) (51%)
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm); Not attributable to MWC
**Under the equity method, an investment in an associate is initially recognized at cost. The carrying amount of the investme nt is adjusted to
recognize changes in the Group’s share of net assets of the associate since the acquisition date. Goodwill relati ng to the associate is included in
the carrying amount of the investment and is not tested for impairment separately.

On a consolidated level, NEZ – International net income decreased by 51% to ₱154 million. This was mainly due
to the increase in costs and expenses with higher management and consultancy fees, as the Company continues
to intensify its new business development activities.

Equity share in net income of associates decreased by 9% at ₱520 million, mainly driven by the decline in East
Water’s income contribution largely due to lower raw water billed volume. This offset the improved performance
of the Vietnam associates (i.e., Thu Duc Water and Kenh Dong Water). The registered growth in billed volume
for these businesses mainly drove the favorable performance, and consequently enabled it to remit dividends.
These developments led to an EBITDA of ₱290 million, 35% lower than last year.

Below is a summary of the results of associates under NEZ - International:

For the years ended December 31

Increase
(in millions) 2022 2021 (Decrease) %
East Water at 18.72% contribution, before adjustment P
= 205 P
= 306 (P
= 101) (33%)
Impact of fair value amortization 144.1 147.9 (3.8) (3%)
East Water at 18.72% contribution, adjusted 60.5 157.9 (97.4) (62%)
Thu Duc Water at 49.00% contribution 315.9 275.8 40.1 15%
Kenh Dong Water at 47.35% contribution 197.9 165.5 32.4 20%
Saigon Water at 37.99% contribution (77.6) (60.8) (16.8) (28%)
PT STU at 20.00% contribution 0.1 3.0 (2.9) (95%)
IWP at 20.00% contribution 11.8 28.1 (16.3) (58%)
IWP2 at 30.00% contribution 11.4 - 11.4 100%
Total equity share in net income of associates P
= 520 P
= 570 (P
= 50) (9%)

SEC Form 17-A 97

 For the years ended December 31
Increase
2022 2021 (Decrease) %
Thu Duc Water
Billed volume (in million cubic meters) 109.5 109.4 0.1 0%
Net income - VAS (in million VND) 170,707 143,828 26,879 19%
Thu Duc Water at 49.00% contribution (in thousand Php) P
= 315,926 P
= 275,830 P
= 40,096 15%
Revenues (in million VND) 389,965 378,550 11,415 3%
COS and Operating Expenses (in million VND) 136,273 140,692 (4,419) -3%
EBITDA (in million VND) 253,692 237,858 15,834 7%
Kenh Dong Water
Billed volume (in million cubic meters) 68.5 67.9 0.6 1%
Net income - VAS (in million VND) 118,947 100,208 18,739 19%
Kenh Dong Water at 47.35% contribution (in thousand Php) P
= 197,941 P
= 165,476 P
= 32,464 20%
Revenues (in million VND) 316,568 301,926 14,642 5%
COS and Operating Expenses (in million VND) 131,790 132,412 (622) 0%
EBITDA (in million VND) 184,779 169,514 15,265 9%
Saigon Water
Billed volume (in million cubic meters) 129.5 127.7 1.8 1%
Net income (loss) - VAS (in million VND) (88,983) (75,578) (13,405) -18%
Saigon Water at 37.99% contribution (in thousand Php) (P
= 77,586) (P
= 60,787) (P
= 16,799) -28%
Revenues (in million VND) 295,801 290,838 4,963 2%
COS and Operating Expenses (in million VND) 215,110 186,872 28,238 15%
EBITDA (in million VND) 80,690 103,966 (23,276) -22%
East Water
Billed volume (in million cubic meters) 323.7 361.5 (37.8) -10%
Net income (in million THB) 705 1,060 (355) -33%
East Water at 18.72% contribution (in thousand Php) P
= 60,478 P
= 157,859 (P
= 97,380) -62%
Revenues (in million THB) 3,289 3,623 (334) -9%
COS and Operating Expenses (in million THB) 1,608 1,682 (74) -4%
EBITDA (in million THB) 1,681 1,941 (260) -13%
PT STU
Billed volume (in million cubic meters) 6.3 6.1 0.2 3%
Net income (in million IDR) 3,026 5,242 (2,216) -42%
PT STU at 20% contribution (in thousand Php) P
= 0.14 P
= 3.03 (P
= 3) -95%
Revenues (in million IDR) 26,879 25,798 1,081 4%
COS and Operating Expenses (in million IDR) 21,215 18,324 2,891 16%
EBITDA (in million IDR) 5,663 7,474 (1,811) -24%
International Water Partners (IWP)
Billed volume (in million cubic meters) - - - -
Net income (in million SAR) 9 10 (1) -12%
IWP at 20% contribution (in thousand Php) P
= 11,770 P
= 28,056 (P
= 16,286) -58%
Revenues (in million SAR) 43 36 7 19%
COS and Operating Expenses (in million SAR) 32 23 8 35%
EBITDA (in million SAR) 11 13 (1) -10%
International Water Partners the Second (IWP2)
Net income (in million SAR) 3 - 3 100%
IWP at 20% contribution (in thousand Php) P
= 11,355 P
=- P
= 11,355 100%
Revenues (in million SAR) 21 - 21 100%
COS and Operating Expenses (in million SAR) 17 - 17 100%
EBITDA (in million SAR) 4 - 4 100%
*Billed volume is the amount of water billed to customers, which is measured in million cubic meters (mcm)

Thu Duc Water sold a total of 109.5 mcm of water for the period ending December 31, 2022. Using Vietnamese
Accounting Standards (“VAS”), revenues were 3% higher at VND390 billion. Meanwhile, Thu Duc Water’s cost
and expenses decreased 3% to VND136 billion due to lower power and repairs and maintenance. As a result,
EBITDA for the year increased 7% to VND254 billion. Net income increased to VND171 billion, 19% higher from
the same period in 2021 mainly driven by the full impact of the 4% increase in tariff. As Thu Duc conforms to
IFRIC-12 guidelines, the PFRS-translated income of Thu Duc in peso terms, expressed as equity share in net
income of associates, amounted to P = 316 million in 2022, 15% higher from previous year. This is equivalent to
MWAP’s 49% stake in Thu Duc Water.

Kenh Dong Water’s billed volume increased slightly in 2022 to 68.5 mcm from 67.9 mcm in 2021. Further support
lent by a 1% increase in tariff resulted to a 5% increase of revenues to VND317 billion. Correspondingly, cost and
expenses were held steady at VND132 billion. This led to an increase in EBITDA by 9% to VND185 billion.
Consequently, Kenh Dong Water’s net income increased to VND119 billion, 19% higher from the same period in
2021. Like Thu Duc Water, income from Kenh Dong Water is translated into PFRS and is reported as equity share
in net income of associates in the consolidated financial statements. In peso terms, the PFRS-translated income
of MWAP’s 47.35% stake in Kenh Dong Water amounted to P = 198 million as of the end of 2022.

SEC Form 17-A 98

MWAP’s investment in Saigon Water, a listed water holding company in Vietnam with seven (7) subsidiaries
(i.e. three bulk water operations, two distribution operations, and two service companies) and one
(1) equity investment (i.e. bulk water). Saigon Water recorded total consolidated billed volume of 129.5 mcm in
2022, higher by 1% from the previous year due to Cu Chi’s higher consumption from its commercial segment and
marginal increase in the domestic segment, albeit a slight contraction in the industrial segment. Consequently,
Saigon Water’s revenue increased 2% to VND296 billion due to higher tariffs for nearly all of its business units.
On the other hand, cost and expenses increased by 15% to VND215 billion due to higher direct cost related to
higher billed volume and higher spending on general and administrative expenses, as well as bad debt provision.
Consequently, EBITDA decreased by 22% to VND81 billion. As a result, Saigon Water posted a net loss of
VND89 billion in 2022. The PFRS-translated loss of Manila Water’s 37.99% stake in Saigon Water amounted to
P
= 89 million as of the end of 2022.

East Water, a water supply and environmental services company in Thailand operating for more than 20 years,
registered a total of 323.7 mcm in billed volume in 2022, which was lower by 10% versus last year. This was
primarily driven by lower revenues from Sriracha and Pattaya customers, in line with the COVID-19 surge during
the early part of the year which significantly affected tourism. In addition, some customers have begun utilizing
alternative water sources following the onset of heavy rains during second half of 2021. These factors led to a
decrease in revenues of 9%. Despite the decrease in billed volume, average cost noted an increase due to an
upward movement in electricity cost following the rate hike in Thailand beginning October 2022. As a result,
EBITDA was at THB1.7 billion, down 13% versus last year. With higher depreciation expense following the
completion of projects in 2021, net income decreased 33% to THB700 million. In peso terms, the income reflected
in the consolidated financial statements as equity share in net income of associates amounted to P= 61 million as
of the end of 2022, 61% lower than in 2021, equivalent to Manila Water’s 18.72% stake in East Water.

For PT STU’s, an industrial bulk water operation in Indonesia, billed volume increased by 3% to 6.3 mcm in 2022
from 6.1 mcm in 2021. Consequently, PT STU posted revenues of IDR27 billion and an EBITDA of IDR6 billion.
Net income decreased to about IDR3 billion, lower by 42% from the same period in 2021 due to higher cost of
sales, higher general and administrative expenses, as well as higher income tax for 2022. Income from PT STU
reported as equity share in net income of associates in the consolidated financial statements amounted to
P
= 0.14 million, representing a 20% stake of Manila Water.

Lastly, the Consortium of Saur SAS, Miahona Company, and the Company in the Kingdom of Saudi Arabia, IWP
and IWP2 posted income in the amount of P = 9 million and P
= 3 million, respectively. Equity share in net income of
associates reported in the consolidated financial statements are representative of a 20% respective stake of
Manila Water in both IWP2 and IWP2.

CONSOLIDATED BALANCE SHEET

Total assets increased to P = 195 billion from December 31, 2021. Cash and cash equivalents declined by 34% to
P
= 8.8 billion driven by additional capital expenditures and payment of debt servicing costs.

The Group’s balance sheet remains strong, with the Company compliant with loan covenants. Debt maturity
profile is spread out.
December
31, December 31, Increase
(in millions) 2022 2021 (Decrease) %
Assets P
= 194,804 P
= 165,517 29,287 18%
Cash and cash equivalents 8,812 13,338 (4,526) (34%)
Other assets* 40,957 35,794 5,163 14%
Service concession assets** 145,035 116,385 28,650 25%
Liabilities P
= 121,351 P
= 97,192 24,159 25%
Equity P
= 73,453 P
= 68,325 5,128 8%

Ratios
Bank debt to equity 1.01x 0.86x
Debt service coverage ratio (DSCR) 1.37x 1.92x
Return on equity (ROE) 9% 6%
*Other assets are current and non-current
**Service concession assets (SCA) are the assets used to provide water and used water services to customers. SCA consists of constructed assets,
as well as Concession Fees paid to MWSS.

SEC Form 17-A 99

With regard to liabilities, total debt as of December 31, 2022 increased to P = 84.9 billion from P
= 71.4 billion as of
December 31, 2021. Bank debt increased due to additional drawdowns and impact of translation of foreign
currency denominated loans. Other than debt, the increase in liabilities was also due to increase in trade payables
and service concession obligations, specifically the IFRIC 12 impact of Wawa. Consequently, net debt as of
December 31, 2022 ended higher at P = 75.9 billion driven by the decline in cash.

Total equity increased by 8% mainly driven by increase in retained earnings as a result of the Group's improved
performance in 2022, coupled with increases from hedging reserves and cumulative translation adjustments. This
was partially offset by movements in the remeasurement of pension liabilities and other equity reserves.

Bank debt to equity was at 1.01x while DSCR stood at 1.37x. Average cost of debt for the Group was at 5.46%,
while ROE was at 9%.

Management does not have knowledge of any material trends, events, or uncertainties outside the normal course
of business which it deems will have a material impact on liquidity. Likewise, Management does not have any
knowledge of imminent events that will trigger direct or contingent financial obligation that is material to the
Company, including any default or acceleration of an obligation.

CONSOLIDATED CAPITAL EXPENDITURES

Total capital expenditures for the Group increased by 36% to end at P= 22.42 billion for the year, with P
= 20.56 billion
or 92% of said amount accounted for by the East Zone Concession. Majority of the East Zone Concession’s
capital expenditures were spent on wastewater expansion, network reliability and water supply projects in line
with attaining service obligations outlined in its government-approved Rate Rebasing Service Improvement Plan.

The Company will comply with the approved Rate Rebasing Service Improvement Plan for the East Zone. Under
this plan, capital expenditures will involve water supply, service reliability, network efficiency and wastewater
projects. Said projects will be financed by internally generated funds and debt that are ably supported by the
Company’s strong balance sheet.

Meanwhile, total capital expenditures of the domestic subsidiaries amounted to P = 1,849 million for the year. Of
the total amount, P= 462 million was undertaken by Laguna Water for its water network expansion. Estate Water
spent P= 588 million for its greenfield and brownfield projects, while the balance was taken on by the remaining
subsidiaries for their various projects.

RECENT MATERIAL EVENTS

Water Franchise Approval

On January 25, 2022, RA No. 11601 became effective, granting the Company a twenty-five (25)-year franchise
to establish, operate and maintain a waterworks system to ensure an uninterrupted and adequate supply, and
distribution of potable water for domestic, commercial, and other purposes, and for the establishment and
maintenance of sewerage system in the East Zone under a concession from the MWSS, or under an appropriate
certificate of public convenience and necessity, license or permit from the MWSS RO. The franchise considers
MWCI as a public utility. It provides that income taxes due from MWCI cannot be passed on to consumers.

The Company is likewise given the right to recover, supply, distribute, and reuse treated and grey water whether
in bulk or retail for domestic, commercial or industrial and other purposes. Furthermore, the Company is allowed
to develop new raw water sources as operations may require and enter into bulk water supply arrangements. It
may also exercise the power of eminent domain as necessary for its operations and may install and maintain its
pipelines and facilities on public property and roads.

Section 5 of RA No. 11601 provides that the Concession Agreement shall serve as the certificate of public
convenience and necessity, license or permit of MWCI for the operation of its waterworks and sewerage system.
Under RA 11601, “Concession Agreement” refers to the agreement between the grantee and MWSS on February
21, 1997, including its amendment dated October 26, 2001, and the Memorandum of Agreement and Confirmation
dated October 23, 2009, as amended by the Revised Concession Agreement dated March 31, 2021, or as may
thereafter be amended.

When public interest for affordable water security requires and upon application by the Company, MWSS is
authorized to approve the amendment of the Concession Agreement to extend its term up to the term of the
franchise.

SEC Form 17-A 100

As franchisee, the Company is obligated to submit a completion plan for the establishment and operation of water,
sewerage and sanitation project covering a period until 2037, with periodic five (5)-year completion targets with
the end goal of achieving one hundred percent (100.00%) water and combined sewerage and sanitation coverage
by 2037.

The Company is required to submit a compliance report to Congress through the Committee on Legislative
Franchises of the House of Representatives and the Committee on Public Services of the Senate on or before
April 30 of each year. The annual report will contain the following:

a. Annual progress report of compliance with targets;

b. An update on the development, operation, and expansion of business;
c. Audited financial statements and latest General Information Sheet (GIS) officially submitted to the SEC,
if applicable;
d. A certification of the MWSS RO on the status of its permits and operations; and
e. An update on its minimum public float required under Section 18.

The Company is obligated to submit all information and documents required by the MWSS RO to conduct
comprehensive assessment of the grantee’s operations and compliance with conditions imposed in RA No.
11601. Further, the Company is required to provide and promote creation of employment opportunities, maintain
minimum public float as required by the Philippine Stock Exchange, and elect independent directors constituting
at least 20.00% of its total BOD membership.

Tariff setting to be conducted by the MWSS RO or its legal successor shall take into account incentives for
enhancement of efficiency, equity considerations, and the customers’ willingness to pay apart from reasonable
and prudent capital and recurrent costs of providing the service including a reasonable rate of return on capital,
efficiency of service, administrative simplicity, and the methodology prescribed under the RCA.

On March 2, 2022, the MWSS BOT approved Resolution No. 2022-025-RO, Series 2022 involving the implications
of the Legislative Franchises on the VAT and franchise tax of the Concessionaires specifically:

i. The removal of VAT from the customer bills of Manila Water and Maynilad resulting from the grant of the
Legislative Franchises to the Concessionaires, subject to the National Internal Revenue Code of 1997,
as amended, and the relevant rules of the Bureau of Internal revenues; and
ii. The imposition of Government Taxes in the customers’ bills as pass-through costs comprised of a
national franchise tax at the rate of 2.00% and actual implemented rates of local franchise tax for each
local government unit starting March 21, 2022.

On March 21, 2022, the Company submitted its notice of acceptance of the twenty-five (25)-year legislative
franchise to the Committee on Legislative Franchises of the House of Representatives and the Senate Committee
on Public Services.

On April 29, 2022, the Company submitted its 1st Annual Report to Congress in compliance with Section 21 of
RA No. 11601.

Rate Rebasing Adjustment for Charging Years 2023 to 2027

On March 31, 2022, the Company filed with the MWSS RO its Business Plan for the Rate Rebasing Period for
Charging Years 2023-2027. Public Consultation Drives were conducted on July and October 2022 to inform the
stakeholders and Local Government Units (LGUs) on the completed and ongoing projects, programs, and plans
of Manila Water; solicit valuable inputs from LGUs that may be incorporated in the Business Plans of Manila
Water; and provide a venue for discussing and addressing prevailing (gender-related) issues and concerns of
stakeholders on water, sewerage, and sanitation services, and for exploring good practices in providing (gender-
responsive) services.

SEC Form 17-A 101

On November 10, 2022, the MWSS BOT (MWSS BOT Resolution No. 2022-148-RO) approved the Company’s
Rebasing Adjustment for the Sixth Rate Rebasing Period (2023 to 2027) as recommended by the MWSS RO
(MWSS RO Resolution No. 2012-12-CA). The implementation of Rebasing Adjustment from 2023 to 2027 on a
staggered basis is scheduled as follows:

• P
= 8.04 on January 1, 2023,
• P
= 5.00 on January 1, 2024,
• P
= 3.25 on January 1, 2025,
• P
= 1.91 to P
= 3.00 on January 1, 2026, and
• P
= 1.05 to P
= 1.08 on January 1, 2027.

The approval also includes an indicative adjustment of about 0.97 to 1.00 or 2.12% in January 1, 2028 due to
non-full recovery of the total expenses for the Wawa Bulk Water Supply Project in compliance with MWSS BOT.
However, this amount will be subject to the next Rate Rebasing exercise.

Furthermore, the environmental charge will increase from 20% to 25% beginning January 1, 2023, and from 25%
to 30% beginning January 1, 2026. Sewer charge will increase from 30% to 32.85% beginning January 1, 2023,
subject to Manila Water’s attainment of sewer coverage of 30% by the end of 2025.

Notice of the Supreme Court En Banc in “Manila Water Company, Inc. vs. the Secretary of the
Department of Environment and Natural Resources, et.al.” with G.R. No. 206823

Said case arose from a complaint filed by the OIC Regional Director Roberto D. Sheen of the Environmental
Management Bureau-National Capital Region (EMB-NCR) before the Pollution Adjudication Board (PAB) against
the Company, Maynilad, and MWSS for alleged violation of Philippine Clean Water Act of 2004 (RA No. 9275,
the “Clean Water Act”), particularly the five (5)-year deadline imposed in Section 8 thereof for connecting the
existing sewage line found in all subdivisions, condominiums, commercial centers, hotels, sports and recreational
facilities, hospitals, market places, public buildings, industrial complex and other similar establishments including
households, to an available sewerage system. Two (2) similar complaints against Maynilad and MWSS were
consolidated with this case.

On September 18, 2019, the Company received a copy of the Decision of the Supreme Court on the case ‘Manila
Water Company, Inc. vs. The Secretary of the Department of Environment and Natural Resources (DENR), et.al.’
with G.R. No. 206823 and promulgated on August 6, 2019. In the Decision, the Supreme Court found the
Company liable for fines in violation of Section 8 of the Clean Water Act in the following manner:

d. The Company shall be jointly and severally liable with MWSS for the total amount of P = 921.46 million
covering the period starting from May 7, 2009 to the date of promulgation of the Decision, August 6,
2019, to be paid within fifteen (15) days from finality of the Decision.
e. From finality of the Decision until full payment of the P
= 921.46 million fine, the Company shall be fined
in the initial amount of P
= 322,102.00 per day, subject to a further 10.00% increase every two (2) years
as provided under Section 28 of the Clean Water Act, until full compliance with Section 8 of the same
law.
f. The total amount of fines imposed by the Decision shall earn legal interest of six percent (6.00%)
per annum from finality and until full satisfaction thereof.

On October 2, 2019, the Company filed a Motion for Reconsideration with the Supreme Court.

On July 1, 2020, the Company received a copy of the Consolidated Comment (on the separate Motions for
Reconsideration filed by petitioners MWSS, Maynilad, and the Company) filed by the Office of the Solicitor
General in behalf of the adverse parties.

The Company filed with the Supreme Court a Motion for Leave to file and admit its Reply last August 17, 2020.

On November 3, 2020, the Company received a Resolution dated September 8, 2020 issued by the Supreme
Court, which relevantly (i) noted the Consolidated Comment; (ii) granted the Motion for Leave and Admit Attached
Reply; and (iii) noted the Reply filed by the Company.

On January 25, 2022, the Republic Act (RA) 11601 or “An Act Granting Manila Water Company, Inc. a Franchise
to Establish, Operate, and Maintain a Waterworks System and Sewerage and Sanitation Services in the East
Zone Service Area of Metro Manila and Province of Rizal” took effect. This extends the Company’s compliance
deadline with Sec. 8 of the Clean Water Act from May 7, 2009 to the year 2037.

SEC Form 17-A 102

On January 26, 2022, the Company filed a Manifestation to inform the Supreme Court of certain developments
(i.e., the grant of a legislative franchise to the Company) which it deems relevant in the resolution of its 2019
Motion for Reconsideration.

On October 21, 2022, the Company received a resolution dated July 19, 2022 issued by the Supreme Court which
modified the dispositive portion of the Court’s August 6, 2019 decision. Accordingly, the Company is liable for
fines in violation of Section 8 of the Clean Water Act in the following manner:

c. The Company shall be jointly and severally liable with MWSS for the total amount of P
= 202.26 million
covering the period starting from May 7, 2009 until January 21, 2022 (date before the effectivity of
RA 11601), to be paid within fifteen (15) days from the receipt of the Resolution.
d. The total amount of fines imposed by the Decision shall earn legal interest of six percent (6.00%)
per annum from finality and until full satisfaction thereof.

On November 2, 2022, the Office of the Solicitor General filed for DENR, a Motion for Partial Reconsideration
related to the resolution issued by the Supreme Court dated July 19, 2022.

On January 17, 2023, the Supreme Court denied with finality the Motion for Partial Reconsideration filed by the
Office of the Solicitor General for DENR, in relation with the lowering of fines imposed against the Company and
MWSS. Supreme Court also rule that no further pleadings or motions will be entertained, and that entry of
judgment will be made immediately.

Accordingly, in 2022, the Company recognized a net reduction of prior years’ provision for Clean Water Act of
P
= 450.26 million in Other Income.

On February 9, 2023, the Company has paid the fines in full amounting to P
= 202.26 million.

Declaration of Cash Dividends

On November 17, 2022, the Board of Directors during its meeting, approved the declaration of cash dividends
amounting to PhP0.379 per share on the outstanding common shares, Php0.038 per share on the outstanding
unlisted participating preferred shares, and accumulated fixed cash dividends of PHP0.01 per share on the
outstanding unlisted participating preferred shares.

The record date is December 2, 2022, and payment date is on December 19, 2022.

MATERIAL CHANGES (INCREASE OR DECREASE OF 5% OR MORE IN THE FINANCIAL STATEMENTS)

CONSOLIDATED STATEMENTS OF INCOME (YEAR-END 2022 VS. YEAR-END 2021)

Revenue

For the years ended December 31

Increase
2022 2021 (Decrease) %
Water and used water revenues P
= 20,640,724,233 P
= 19,287,138,596 P
= 1,353,585,637 7%
Other operating revenues 1,901,722,029 1,005,249,021 896,473,008 89%
Finance income from contract assets 256,537,754 237,712,035 18,826,719 8%
P
= 22,798,984,016 P
= 20,530,099,652 P
= 2,268,884,364 11%

Water and used water revenues – 7% increase

Increase of P
= 1,354 million due to growth in billed in volume and tariff increase across several business units.

Other operating revenues – 89% increase

Increase of P= 896 million was primarily attributable to integrated used water and pipelaying projects of MWIS,
additional connection fee revenues from water and service connection and increase in the service income from
bulk water contracts and cross-border billings.

Finance income from contract assets – 8% increase

Increase of P
= 19 million due additions in contract assets arising from capital expenditures for Cebu Water, Tagum
Water and Ilagan Water projects.

SEC Form 17-A 103

Costs of Services

For the years ended December 31

Increase
2022 2021 (Decrease) %
Depreciation and amortization P
= 2,703,323,804 P
= 3,328,979,343 (625,655,539) (19%)
Power, light and water 2,203,365,424 1,450,438,453 752,926,971 52%
Salaries, wages and employee benefits 1,146,524,894 1,259,467,394 (112,942,500) (9%)
Contractual services 804,080,940 504,006,045 300,074,895 60%
Repairs and maintenance 660,399,635 529,447,395 130,952,240 25%
Water treatment chemicals 429,804,871 430,600,800 (795,929) 0%
Regulatory costs 331,785,859 273,907,788 57,878,071 21%
Wastewater costs 246,199,021 195,695,652 50,503,369 26%
Amortization of water service connections 204,760,977 142,967,905 61,793,072 43%
Water tankering and bulk water 189,237,497 177,007,383 12,230,114 7%
Collection fees 173,759,450 135,772,209 37,987,241 28%
Management, technical and professional fees 41,271,558 338,930,431 (297,658,873) (88%)
Rent 5,020,642 3,653,385 1,367,257 37%
Other expenses 424,027,969 170,207,075 253,820,894 149%
P
= 9,563,562,541 P
= 8,941,081,258 P
= 622,481,283 7%

Depreciation and amortization – 19% decrease

Decrease of P= 626 million was on account of change in estimated useful life of concession assets from 2037 to
2047 which took effect from January 1, 2022, in line with the approval of the Company’s legislative water franchise.

Power, light and water – 52% increase

Increase of P
= 753 million was driven by increased fuel rates and higher consumption related to BNR compliance
for East Zone and higher consumption by domestic subsidiaries.

Salaries, wages and employee benefits – 9% decrease

Decrease of P
= 113 million was due to lower benefits by the Company.

Contractual services – 60% increase

Increase of P
= 300 million was mainly due to higher IT related, plant/facilities maintenance and operations, meter
reading services as well as the higher contractual costs of MWIS due to new and spill-over projects.

Repairs and maintenance – 25% increase

Increase of P
= 131 million was due to ramp-up of leak repair activities and sewer network improvement of the
Group.

Regulatory costs – 21% increase

= 58 million was due to CPI adjustment of the Company’s regulatory fees and higher cost from Laguna
Increase of P
Water and Boracay Water driven by higher revenues.

Wastewater costs – 26% increase

Increase of P
= 51 million was due to additional sludge hauling of treatment plants and increase in desludged
households.

Amortization of water service connections – 43% increase

Increase of P
= 62 million was mainly due to increase in new water service connections during the year in the East
Zone.

Water tankering and bulk water – 7% increase

Increase of P
= 12 million was due to higher volume requirements of customers.

Collection fees – 28% increase

Increase of P= 38 million was due to higher collections from payment facilities.

Management, technical and professional fees – 88% decrease

Decrease of P
= 298 million was mainly due to lower legal and consultancy fees of the Company.

Rent – 37% increase

Increase of P
= 1 million from offices rented by Non-east Zone Philippines business units.

SEC Form 17-A 104

Other expenses – 149% increase
Increase of P254 million mostly coming from materials purchased for laboratory analysis and other direct costs
associated with new and on-going projects of MWIS.

Operating expenses
For the years ended December 31
Increase
2022 2021 (Decrease) %
Total operating expenses P
= 4,279,500,594 P
= 3,906,937,740 P
= 372,562,854 9%

Operating expense – 9% increase

Increase of P
= 373 million due to higher systems cost, higher salaries and wages from increased headcount, higher
contractual expenses, higher depreciation expense, repairs and maintenance and provision for inventory
obsolescence.

Other Income (Expenses)

For the years ended December 31
Increase
2022 2021 %
(Decrease)
Revenue from rehabilitation works P
= 23,626,424,275 P
= 16,970,072,793 P
= 6,656,351,482 39%
Cost of rehabilitation works (23,626,424,275) (16,970,072,793) (6,656,351,482) 39%
Foreign currency differentials 2,532,900,291 433,279,731 485%
2,099,620,560
Foreign exchange gains (losses) – net (1,870,416,962) (781,039,952) (1,089,377,010) 139%
Equity share in net income of associates 520,067,157 569,460,003 (49,392,846) (9%)
Interest income 121,758,500 70,548,460 51,210,040 73%
Interest expense (2,816,244,442) (2,473,334,462) (342,909,980) 14%
Gains (losses) on disposal of property
and equipment – net 2,995,037 (34,110,548) 37,105,585 (109%)
Amortization of deferred credits 13,216,379 16,996,570 (3,780,191) (22%)
Other income – net 700,768,319 (175,485,709) 876,254,028 (499%)
(P
= 794,955,721) (P
= 2,373,685,907) P
= 1,578,730,186 (67%)

Revenue from rehabilitation works and cost of rehabilitation works – 39% increase.
Increase of P
= 6,656 million was mainly due to additional capital expenditures of the Group during the year.

Foreign currency differentials and foreign exchange losses - net – 291% increase
Net increase of P= 1,010 was due to depreciation of Peso against USD and FCDA adjustments. This adjustment
reflects the impact of the reversion to the Original Concession Agreement.

Equity share in net income of associates – 9% decrease

Decrease of P= 49 million was due to lower billed volume by East Water and decline in performance of Saigon
Water and IWP.

Interest income – 73% increase

Increase of P= 51 million was from short-term investments maintained during the year.

Interest expense – 14% increase

Increase of P= 343 million was mainly from the Company’s cost of debt and hedging costs, combined with the
higher interest costs from the subsidiaries’ higher debt balance.

Gains on disposal of property and equipment - net – 109% increase

Increase of P
= 37 million was from higher disposal of assets during the year.

Amortization of deferred credits – 22% decrease

Decrease of P
= 4 million was due to extension of amortization period from 2037 to 2047.

Other income - net – 499% increase

= 876 million was mostly from the Company’s partial reduction of prior years’ provision related to Clean
Increase of P
Water Act case.

SEC Form 17-A 105

Provision for income tax – 31% increase
= 474 million was due to the Company’s deferred tax from the removal of unrealized foreign exchange
Increase of P
impact due to reinstatement of FCDA, depreciation, countered by recognition of deferred taxes on ECL; and the
subsidiaries’ higher current income tax from higher taxable income.

Net loss from discontinued operations – 58% decrease

Decrease of P= 9 million was attributable to the Zamboanga Water’s lower operating expenses as it winds down its
business following the termination of the NRWRSA with ZCWD in 2020.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (YEAR-END 2022 VS. YEAR-END 2021)

December December Increase

%
31, 2022 31, 2021 (Decrease)
ASSETS
Current Assets
Cash and cash equivalents P
= 8,811,939,212 P
= 13,337,711,573 (4,525,772,361) (34%)
Short-term investments 128,417,810 268,516,237 (140,098,427) (52%)
Receivables - net 2,782,499,912 2,703,155,395 79,344,517 3%
Contract assets - current portion 934,780,675 822,127,358 112,653,317 14%
Inventories 450,657,769 450,692,516 (34,747) –
Other current assets 2,002,445,492 2,067,609,310 (65,163,818) (3%)
Total Current Assets 15,110,740,870 19,649,812,389 (4,539,071,519) (23%

Noncurrent Assets
Property, plant and equipment and software 7,163,920,549 6,338,703,883 825,216,666 13%
Service concession assets 145,065,205,551 116,385,195,772 28,680,009,779 25%
Right-of-use assets 426,136,195 349,695,765 76,440,430 22%
Contract assets - net of current portion 1,729,817,675 1,665,312,397 64,505,278 4%
Investments in associates 15,434,604,040 14,536,285,550 898,318,490 6%
Goodwill 6,247,010 6,247,010 – –
Deferred tax assets - net 635,223,298 1,230,206,887 (594,983,589) (48%)
Other noncurrent assets 9,232,277,139 5,355,465,105 3,876,812,034 72%
Total Noncurrent Assets 179,693,431,457 145,867,112,369 33,826,319,088 23%
194,804,172,327 165,516,924,758 29,287,247,569 18%

LIABILITIES AND EQUITY

Current Liabilities
Accounts and other payables P
= 16,194,519,558 P
= 13,228,865,224 P
= 2,965,654,334 22%
Short-term debt 252,872,324 – 252,872,324 100%
Current portion of:
Long-term debt 6,024,171,860 5,311,356,305 712,815,555 13%
Service concession obligations 729,984,535 626,529,444 103,455,091 17%
Contract liabilities 347,150,494 522,314,528 (175,164,034) (34%)
Lease liabilities 120,860,143 115,016,609 5,843,534 5%
Income tax payable 415,028,621 131,742,420 283,286,201 215%
Total Current Liabilities 24,084,587,535 19,935,824,530 4,148,763,005 21%

Noncurrent Liabilities
Noncurrent portion of:
Long-term debt 78,645,612,772 66,077,385,688 12,568,227,084 19%
Service concession obligations 15,313,404,443 8,331,791,889 6,981,612,554 84%
Contract liabilities 590,112,583 151,548,734 438,563,849 289%
Lease liabilities 315,487,289 246,701,536 68,785,753 28%
Pension liabilities - net 288,213,851 146,931,846 141,282,005 96%
Deferred tax liabilities - net 338,020,390 263,639,020 74,381,370 28%
Provisions 653,750,967 1,166,957,229 (513,206,262) (44%)
Other noncurrent liabilities 1,121,724,232 870,980,332 250,743,900 29%
Total Noncurrent Liabilities 97,266,326,527 77,255,936,274 20,010,390,253 26%
Total Liabilities 121,350,914,062 97,191,760,804 24,159,153,258 25%

(Forward)

SEC Form 17-A 106

 December December Increase
%
31, 2022 31, 2021 (Decrease)
Equity
Attributable to equity holders of Manila Water
Company, Inc.
Capital stock:
Common stock P
= 2,884,839,617 P
= 2,884,839,617 =–
P –
Preferred stock 400,000,000 400,000,000 – –
3,284,839,617 3,284,839,617 – –
Additional paid-in capital 14,427,621,413 14,417,217,151 10,404,262 –
Treasury shares (43,313,195) – (43,313,195) 100%
Subscriptions receivable (5,644,968,396) (5,654,475,773) 9,507,377 –
Total paid-up capital 12,024,179,439 12,047,581,995 (23,401,556) –
Retained earnings:
Appropriated 40,610,000,000 40,610,000,000 – –
Unappropriated 18,087,151,743 13,448,628,617 4,638,523,126 34%
Cumulative translation adjustment 533,548,708 407,475,855 126,073,853 31%
Hedging reserves 1,310,852,803 422,240,441 888,612,362 210%
Remeasurement loss on defined benefit
(167,831,265) (38,510,424) (129,320,841) 336%
plans
Equity in other comprehensive loss of an
(1,906,738) (1,907,738)
associate – –
Other equity reserves (144,458,138) 54,106,905 (198,565,043) (367%)
72,251,536,552 66,949,615,651 5,301,920,901 8%
Noncontrolling interests 1,201,721,713 1,375,548,303 (173,826,590) (13%)
Total Equity 73,453,258,265 68,325,163,954 5,128,095,311 8%
P
= 194,804,172,327 P
= 165,516,924,758 P
= 29,287,247,569 18%

Cash and cash equivalents – 34% decrease

Decrease of P= 4,526 million was due to the Group’s increased capital expenditures as well as repayments of loan
principal and interest, offset by short-term and long-term loan availments.

Short-term investments – 52% decrease

Decrease of P= 140 million was due to the maturity of Manila Water (Thailand) Co., Ltd.’s (MWTC) short-term
money market placements during the year.

Contract assets (current and noncurrent) – 7% increase

Increase of P
= 177 million was from the additional capital expenditures of Cebu Water, Tagum Water and Ilagan
Water during the year which was offset by payments received from customers.

Property, plant and equipment – 13% increase

Increase of P
= 825 million was from the additional capital expenditures of the Group during the period which was
offset by depreciation expense.

Service concession assets – 25% increase

Increase of P
= 26,280 million was from IFRIC 12 impact of Wawa JV and additional capital expenditures of the
Group during the period which was offset by amortization expense.

Right-of-use assets – 22% increase

Increase of P
= 76 million was mainly from the renewal of lease contract for office building.

Investment in associates – 6% increase

Increase of P
= 898 million was from share in net income of associates and effects of foreign currency translation.

Deferred tax assets and deferred tax liabilities - net 35% decrease
Decrease of P= 521 million was mostly from FCDA adjustments, straight line and unit-of-production depreciation
and derivatives.

Other noncurrent assets – 72% increase

= 3,877 million was due to adjustment in FCDA and fair value changes on the Company’s derivative
Increase of P
assets during the year.

SEC Form 17-A 107

Accounts and other payables – 22% increase
= 2,966 million was due to rise in trade payables and accrued expenses from the Group’s operational
Increase of P
and capital expenditures requirements.

Short-term debt – 100% increase

= 253 million was due to Non-east Zone Philippines’ availment of short-term loans.
Increase of P

Contract liabilities (current and noncurrent) – 39% increase

Increase of P
= 264 million was due to additional unearned income from supervision fees and from connection fees
of the domestic subsidiaries.

Long-term debt (current and noncurrent) – 19% increase

Increase of P= 13,281 million was mainly due to availment of loan from China Bank, offset by payment of
outstanding long-term loans.

Service concession obligations (current and noncurrent) – increase 79%

Increase of P
= 7,085 million was from IFRIC 12 impact of Wawa JV and additional capital expenditures of the Group
during the period.

Lease liabilities (current and noncurrent) – 21% increase

Increase of P= 75 million was mainly from the renewal of lease contract for office building offset by payments of the
Group during the year.

Income tax payable – 215% increase

Increase of P
= 283 million was mainly driven by higher taxable income of the Group.

Pension liabilities - net – 96% increase

Increase of P= 141 million was due to increase in number of covered employees and updates on actuarial
assumptions.

Provisions –44% decrease

= 513 million was mainly from the Company’s partial reduction of prior years’ provision for the Clean
Decrease of P
Water Act case.

Other noncurrent liabilities – 29% increase

= 251 million was from the Company’s other long-term employee benefits pertaining to long term sick
Increase of P
leave and vacation leave obligation.

Treasury shares – 100% increase

Increase of P43 million from the Company’s acquisition of previously issued shares.

Retained earnings - unappropriated – 34% increase

Increase of P
= 4,639 million represents the net income attributable to the equity holders of the Company offset by
dividends declared during the year.

Cumulative translation adjustment – 31% increase

Increase of P
= 126 million was due to the cumulative translation gain recognized during the period caused by the
depreciation of the PHP against the VND and USD. This was partly offset by the impact of the net investment
hedge of the Group’s investment in MWAP.

Hedging reserves – 210% increase

Increase of P= 889 million arose from the Company’s net gain on cash flow hedge offset by related hedging costs
for the year.

Remeasurement loss on defined benefit plans – 336% increase

= 129 million was due to recognition of remeasurement on the Company’s long-term employee
Increase of P
benefits.

Other equity reserves – 367% decrease

Decrease of P= 199 million arose from MWPVI’s purchase of iWater’s 49.00% ownership in Davao Water and of
MWIC’s 22.41% ownership in Manila Water Consortium during the period.

SEC Form 17-A 108

Noncontrolling interests – 13% decrease
Decrease of P= 174 million mainly due to MWPVI’s purchase of iWater’s 49.00% ownership in Davao Water and of
Metro Pacific Water Investment Corporation’s (MWIC) 22.41% ownership in Manila Water Consortium offset by
non-controlling interest in the net income of Non-east Zone Philippines subsidiaries.

FACTORS AFFECTING THE GROUP’S RESULTS OF OPERATIONS

Water Tariff

Water rates are set according to the rate determination specified in the respective concession agreements of the
entities under the Group. The Group has several signed concession arrangements mostly with government
entities, such as the MWSS, Calasiao Water District, Tourism Infrastructure and Enterprise Zone Authority,
Calbayog City Water District, Clark Development Corporation, Obando Water District, Bulacan Water District, City
of Ilagan Water District, Tanauan Water District, Provincial Government of Laguna, Pagsanjan Water District, and
Lambunao Water District.

The Group’s tariff schedules generally apply to the four main categories of customers namely, residential,
semi-business, commercial, or industrial. Customers pay service charges based on one or more of the following:
• water charge;
• environmental charge;
• sewer charge;
• maintenance service charge; and/or
• foreign currency differential adjustment (FCDA).

In 2022, the Group generated 91% of its revenue from water and used water charges and 9% from its other
operating income and finance income from contract assets.

Tariff Rate Adjustments

The Group’s results of operations and financial condition are dependent upon the determination and
implementation of reasonable tariff rate increases for its water and sewerage services under its concession
agreements. The Group is entitled to one or more of the following tariff rate adjustments on top of the basic water
charge under its concession agreements, whenever applicable.
• annual standard rates adjustment to compensate for increases in the Philippine Consumer Price Index
(CPI), subject to the rate adjustment limit;
• extraordinary price adjustment (EPA) to account for the financial consequences of certain unforeseen
events, subject to the grounds stipulated in the applicable concession agreement; and/or
• FCDA to recover or account for foreign exchange losses and gains arising from loans and any
concessionaire loans used for its service expansion and improvement. The FCDA is a recovery
mechanism available in the concession agreements of the Company and Boracay Water.
• Beginning November 18, 2021, the Company’s RCA removed its FCDA recovery mechanism from
the water rates of the Company’s customers.
• The Company and MWSS has since executed six (6) amendments to the RCA extending its Effective
Date to allow time to complete the remaining condition precedent, which is the Undertaking Letter
from the Republic. The Sixth Amendment was executed on May 19, 2022 extending the Effective
Date to not later than June 30, 2022.
• On June 30, 2022, the RCA did not take effect due to the Republic’s failure to submit the prescribed
Undertaking Letter. Any changes adopted by the Company in relation to the RCA were reverted to
the terms provided in the Original CA.
• Boracay Water maintains this natural hedge under the FCDA.

In addition to the tariff adjustments described above, under the concession agreements, tariff rates of the Group
are evaluated under a regular process called Rate Rebasing, through which the rates for water and sewerage
services are recalibrated to allow the Group to recover over the remaining concession period the following items:
• operating, capital maintenance and investment expenditures (efficiently and prudently incurred);
• Philippine business taxes; and
• payments corresponding to debt service on grantor and concessionaire loans.

SEC Form 17-A 109

Philippine Economic Conditions

With most of the Group’s operations based in the Philippines, the Group’s results of operations and financial
condition are affected by the general economic conditions in the country, particularly by inflation rates, interest
rates, and currency exchange rate movements. Specifically, the general performance of the Philippine economy
affects demand for water and wastewater services, and inflation affects the Group’s costs and its margins. While
the Group is allowed to recover certain costs associated with changes in inflation and currency exchange rates,
these adjustments are implemented over several years within the Rate Rebasing period. Moreover, approved
tariff rate adjustments may not cover all increased costs to the Group associated with changes in economic
conditions.

Inflation
Each year, the Group may propose tariff rate adjustments to account for inflation, as measured by the CPI
published regularly by the Philippine Statistics Authority. These proposed rate adjustments are subject to the
rates adjustment limit set forth in the Concession Agreements and guidelines of tariff regulation bodies. Although
the Group has generally been granted its proposed CPI related tariff rate adjustments in the past, a significant
increase in inflation may increase the Group’s costs beyond what it can recover through the CPI tariff rate
adjustment. In 2022, full year average inflation was at 5.80%, which is beyond the government’s target range of
2.00% to 4.00% for the year. The Company decided to defer the implementation of its previously approved rate
rebasing adjustments and inflation adjustments for the charging year 2020 and 2021, in coordination with the
MWSS RO. In addition, the discussions with government on the RCA include a tariff freeze until December 31,
2022.

Interest Rates
The Group raises significant amounts of borrowings to finance the acquisition, development, improvement and
construction of fixed assets for projects needed to meet service obligations. The Group maintains a mix of loans
with floating and fixed interest rates. Interest rates are dependent on market conditions wherein significant
increases in rates will increase the Group’s borrowing costs. In 2022, the Central Bank of the Philippines hiked
its policy rate 7 times to 5.5%, to curb the continued rise of inflation in the Philippine economy.

Currency Exchange Rates

The Group is also allowed to request a quarterly tariff rate adjustment for foreign currency differentials to recover
for present and future foreign exchange losses or gains on MWSS and TIEZA loans, and Group loans used for
capital expenditures and payments of concession fees. Like the CPI adjustment, there can be no assurance that
the Company and Boracay Water will obtain adjustments on its tariff rates which will fully account for all foreign
currency fluctuations, particularly during instances where is a significant depreciation of the Philippine Peso.
Movements in the Peso and other foreign denominated currencies are driven by global market uncertainty,
political risk, and recently, by geopolitical tensions triggered by the war in Ukraine.

Water Supply

The Group’s water supply is dependent on infrastructure to draw water from surface and ground sources. For
the Company, supply is heavily dependent on the allocation of raw water from the Angat Dam. Due to increasing
demand over time, the Company is continuously implementing projects to develop new water sources to meet
customer demand.

Furthermore, the Philippines is significantly affected by the El Niño phenomenon which is characterized by
prolonged and severe drought. During such periods, sources of raw water available to the Company from MWSS
are significantly strained, thus affecting the Company’s ability to supply adequate treated water to its customers.
Currently, the Company’s water supply is being augmented by the Cardona Water Treatment Plant, as well as by
the newly operational Wawa-Calawis project which came online in October 2022. The Company maintains and
operates numerous deep wells for contingency water supply requirements.

Regulations

Under its concession agreements, bulk water sales and purchase agreements, and JVAs, the Group acts as
either an agent or a partner of the MWSS, local government, or local water districts in providing water and/or used
water services to the public. Each of the contracts, provide for the principals or the partners to monitor and ensure
compliance with the obligations in the contracts. The Group’s significant commitments under these contracts are
disclosed in Note 29 to the Audited Consolidated Financial Statements.

SEC Form 17-A 110

Liquidity and Capital Resources

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
bank loans, and debentures. The Group’s policy is to maintain a level of cash that is sufficient to fund its operating
cash requirements for the next three (3) to six (6) months and any claim for refund of customers’ guaranty
deposits. Capital expenditures are funded through long-term debt, while operating expenses and working capital
requirements are sufficiently funded through internally generated cash. Maturing debts are refinanced through a
combination of long-term debt and internally generated cash.

Capital Sources
The Group’s cash and cash equivalents as of December 31, 2022 ended at P = 8,811.94 million. During 2022, the
Group had more cash expenditures than inflow across its operating and investing activities. Financing activities,
however, has provided more cash inflows from debt availments. Cash outflows were primarily for capital
expenditures, debt repayments, and concession fee payments. The Group’s improvement and expansion project
implementation were funded by available credit lines, loan facilities from reputable local and international financing
institutions.

Cash Used in Operating Activities. Net cash used in operations in 2022 amounted to P = 7,071.16 million primarily
for funding service improvement activities and capital expenditures for the expansion of water and used water
networks required under the respective concession arrangements of the Group amounting to P = 21,336.55 million.
Excluding the effect of changes in service concession assets which are presented under cash flows from operating
activities in accordance with IFRIC 12 and PAS 7, the Group’s net cash inflow from operating activities amounted
to P
= 14,265.38 million.

Cash Used in Investing Activities. Net cash used in investing activities for the year ended at P = 629.66 million.
Cash was used mainly for additional noncurrent assets of P = 230.21 million consisting of advances to the
contractors for the Group’s ongoing capital expenditure projects and purchases of additional property, plant and
equipment amounting to P = 1,102.39 million. These were partly offset by the P
= 443.26 million dividend proceeds
from associates, P= 140.10 million net proceeds for maturity of short-term investments, P= 116.70 million interest
received during the year from cash in banks, cash equivalents, and short-term investments, and P = 4.95 million
proceeds from disposal of property and equipment.

Cash Provided by Financing Activities. Net cash provided by financing activities amounted to P = 3,264.60 million
in 2022 which was mainly from the availment of long-term and short-term debt totaling P = 23,695.39 million.
The cash inflows were offset by the payment of long-term and short-term debt totaling P = 13,870.72 million,
payment of service concession obligations amounting to P = 1,039.22 million, interest payments on short-term and
long-term debt amounting to P
= 3,517.06 million, dividends payments totaling P = 1,422.34 million, net movement in
non-controlling interest amounting to P = 452.93 million, and payment of lease liabilities amounting to
P
= 106.00 million.

Further details are disclosed in the Group’s Audited Consolidated Statements of Cash Flows.

Contractual Obligations and Commercial Commitments

The Group's significant contractual obligations and commercial commitments as of December 31, 2022 are
disclosed in the Group's Audited Consolidated Financial Statements as follows:

• The Group's liquidity risk is disclosed in Note 28.

• Significant commitments with the West Concessionaire and those required under the Group's concession
or joint venture agreements are disclosed in Notes 24 and 29, respectively.
• Other obligations under the Group's long-term debt agreements are in Note 15.

There were no material off-balance sheet transactions, arrangements, obligations (including contingent
obligations other than those disclosed in Note 30 to the Audited Consolidated Financial Statements).

SEC Form 17-A 111

Restatement of Accounts

The consolidated financial statements of the Group have been prepared in compliance with Philippine Finance
Reporting Standards (PFRS) and provide comparative information in respect of the previous periods.

No restatements were made in the Consolidated Statements of Financial Position as of December 31, 2022 and
2021, and Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity,
and Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020.

KEY VARIABLE AND OTHER QUALITATIVE AND QUANTITATIVE FACTORS

g. The Group does not have any significant seasonality or cyclicality in its operations, except for the usually
higher demand during the summer months of April to June.

h. The Group has not made any modification to its existing debt and has not availed of any extension in
debt servicing.

As of December 31, 2022, there were no other known trends, demands, commitments, events or
uncertainties that have material impact on the Group’s liquidity and sales aside from those disclosed in
the audited consolidated financial statements.

i. The Group has various contingent liabilities arising from the ordinary conduct of business which are either
pending decision by the courts or are being contested, the outcomes of which are not presently
determinable. The details are disclosed in Note 30, Provisions and Contingencies, of the audited
consolidated financial statements.

j. There were no off-balance sheet transactions, arrangements, and obligations created during the
reporting period.

k. Other than the items disclosed in the audited consolidated financial statements, the Group did not acquire
assets nor incur liabilities that are material in amount for the period ended December 31, 2022.

l. In 2022, certain prior year amounts have been reclassified by the Group to conform to current year
presentation. These reclassifications had no effect on the reported results of operations. The details are
further disclosed in Note 18, Other Operating Revenue, Operating Expenses, Interest Income and
Expense, and Other Income and Losses, of the audited consolidated financial statements.

SEC Form 17-A 112

CONSOLIDATED FINANCIAL PERFORMANCE (YEAR-END 2021 VS. YEAR-END 2020)

Group net income for the period ending December 31, 2021 declined 18% from the same period last year to
P
= 3,673 million from P
= 4,500 million. Excluding one-offs, core income stood at P
= 4,126 million. Said performance
was due to lower operating income with the increase in costs and operating expenses, coupled with lower billed
volume and unimplemented tariff increases in the Company. The decline was partly offset by improved
performance of the non-East Zone businesses versus the previous year.

The Group’s key financial performance indicators are discussed below:

For the years ended December 31

Increase
(in millions) 2021 2020 (Decrease) %
Total revenues P
= 20,292 P= 21,125 (P
= 833) -4%
Total cost and expenses (excluding depreciation
and amortization) 9,220 8,338 882 11%
Other income (expenses) - net 377 (334) 711 213%
Equity share in net income of associates 569 214 355 166%
Other expenses - net (192) 548 356 -65%
EBITDA* 11,449 12,453 (1,004) -8%
Depreciation and amortization expense 3,628 3,523 105 3%
Income before interest income and expense and
foreign exchange gains and losses 7,821 8,930 (1,109) -12%
Interest expense - net (2,165) (1,757) (408) 23%
Foreign exchange losses - net (348) (510) 162 -32%
Income before income tax 5,308 6,663 (1,355) -20%
Provision for income tax 1,539 1,749 (210) -12%
Net income from continuing operations 3,769 4,914 (1,145) -23%
Net loss after tax from discontinued operations4 (15) (369) 354 96%
Net income 3,754 4,545 (791) -17%
Noncontrolling interests 81 45 36 78%
Net income attributable to MWC P
= 3,673 P
= 4,500 (P
= 827) -18%
*Starting 2021, EBITDA excludes net foreign exchange gains and losses for the year

Consolidated operating revenues declined 4% to P = 20,292 million in 2020 from P

= 21,125 million the previous year.
This was driven by lower billed volume across all customer segments in the East Zone Concession, along with
lower average tariff due to the shift in consumption contribution to the domestic segment due to the COVID-19
pandemic. Similarly, outside the East Zone there was a decline in billed volume from Boracay Water with the
imposition of travel restrictions for tourists, as well as lower availability charges of Estate Water coming from
slower progress in the construction of greenfield projects. The Group derived 79% of its operating revenues from
the sale of water, while 16% came from environmental and sewer charges. Other revenues, which account for
the balance, are comprised of supervision fees, connection fees, after-the-meter services, and service income
from bulk water arrangements, among others.

For the years ended December 31

Increase
(in millions) 2021 2020 (Decrease) %
Personnel costs P
= 2,466 P= 2,267 P
= 199 9%
Direct costs 3,973 3,729 244 7%
Overhead costs 1,720 1,567 153 10%
Premises costs 394 361 33 9%
Other cost and expenses 667 414 253 61%
Total cost and expenses P
= 9,220 P= 8,338 P
= 882 11%

4
For years ended December 31, 2021 and 2020, the Group presented as a single amount in its consolidated statement of income
the post-tax net loss of its discontinued operations in Zamboanga Water and the Healthy Family division of MWTS.
SEC Form 17-A 113
Consolidated cost of services and expenses increased by 11% to P = 9,220 million in 2021 from P
= 8,338 million due
to higher costs across all categories versus the same period last year. Total fixed costs increased by 14% driven
notably by repairs and maintenance following the ramp-up of postponed activities with the relative easing of
quarantine restrictions, along with personnel costs and management and professional fees. Similarly, power
costs increased by 2% as the higher consumption of Laguna Water’s new operating facilities offset the lower
power costs of the Company. Other variable costs related to desludging, collection and connection activities
likewise increased with the improved mobility for business operations in 2021. These increases were offset by a
17% reduction in chemicals costs from lower production as well as better raw water quality.

Net other income totaled P = 377 million for the period, a reversal from the negative P
= 333 million position the
previous year. This was driven by the higher equity share in net income of associates which increased to
P
= 569 million, combined with the absence of one-time fair value adjustment in East Water investment and
provisions for probable losses for Cu Chi Water. Other income in 2021 is net of goodwill impairment loss of
P
= 130 million related to the investment in Clark Water as the carrying value already exceeded its value in use as
of year-end.

Consequently, consolidated earnings before interest, income taxes, depreciation, and amortization (EBITDA)
declined by 8% to end at P
= 11,449 million in 2021, with an EBITDA margin of 56%. Depreciation and amortization
rose by 3% to P = 3,628 million mainly attributable to the completed capital expenditures in the East Zone
Concession and subsidiaries last year.

Net interest expense was higher by 23% at P= 2,165 million from the same period last year, driven by the full-year
impact of the USD Sustainability bonds, as well as new loan drawdowns of several domestic subsidiaries.

BUSINESS UNITS’ FINANCIAL AND OPERATING PERFORMANCE

Parent Company – East Zone

Net income of the Company stood at P = 3,618 million for the full year of 2021, 22% lower than the
P
= 4,666 million level the previous year. This was driven primarily by the full-year impact of the pandemic on
customer consumption and business operations, coupled with the continued imposition of the tariff freeze.

For the years ended December 31

Increase
2021 2020 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters) 488.5 506.4 -17.9 -4%
Average tariff (in Pesos per cubic meter) 32.0 32.6 -0.6 -2%
Number of billed connections 1,033,211 1,017,639 15,572 2%
Collection efficiency 100.8% 92.4% 8.4 ppts.
Non-revenue water 12.8% 15.5% 2.7 ppts.

Financial Highlights (in millions)

Revenues P
= 16,084 P
= 17,104 (P
= 1,020) -6%
Cost and expenses (excluding depreciation and
amortization) 6,131 5,434 697 13%
EBITDA* 9,813 10,649 (836) -8%
Net income P
= 3,618 P
= 4,666 (P
= 1,048) -22%
*Starting 2021, EBITDA excludes net foreign exchange gains and losses for the year

Revenues declined by 6% with all customer segments registering lower billed volume versus the previous year.
Meanwhile, cost and expenses rose by 13% for the period to P = 6,131 million, driven by higher direct costs following
the ramp up of repairs and maintenance, collection, connection, and sanitation activities with the relative easing
of community quarantines. This was partly offset by lower power and chemicals costs, in line with lower
production and better water quality at the Cardona Water Treatment Plant. Personnel costs increased due to
higher headcount and higher variable pay. Similarly, overhead costs increased due to management and
professional fees, and higher provisions for expected credit losses (ECL).

With these, EBITDA declined by 8% to P

= 9,813 million from P
= 10,649 million last year. EBITDA margin stood at
61%.

SEC Form 17-A 114

Manila Water Philippines Ventures Inc. (MWPVI)

The following discussion covers the consolidated results of MWPVI, driven mainly by its core domestic operating
subsidiaries in Boracay Water, Clark Water, Laguna Water, and Estate Water (a division of Manila Water
Philippine Ventures).

For the years ended December 31

Increase
2021 2020 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters) 108.9 104.4 4.5 4%

Financial Highlights (in millions)

Revenues P
= 4,175 P
= 4,224 (P
= 49) -1%
Cost and expenses (excluding depreciation and
amortization) 2,887 2,949 (62) -2%
EBITDA* 1,123 1,322 (199) -15%
Net loss attributable to MWC (P
= 476) (P
= 480) (P
= 4) 1%
*Starting 2021, EBITDA excludes net foreign exchange gains and losses for the year

MWPVI ended 2021 with a net loss of P

= 476 million. This is a 1% improvement from its net loss position of
P
= 480 million last year.

On a consolidated MWPVI level, revenues declined slightly by 1% to P= 4,175 million which were mostly on account
of the 38% drop in revenues in Boracay Water with the prevailing travel restrictions on the island, as well as lower
supervision fees of Estate Water due to slowdown in its greenfield projects.

On the other hand, cost and expenses decreased by 2% year-on-year to P = 2,887 million. This was attributable to
lower management fees as well as provisions for expected credit losses.

The movements in the MWPVI Group’s revenues and costs resulted in a 17% reduction in EBITDA to
P
= 1,123 million from P
= 1,322 million in 2020. EBITDA margin was at 27%, lower by 4 percentage points from last
year’s 31%.

As the economy gradually recovers and business activity resumes from quarantine restrictions, MWPV Group is
hopeful that water demand in its operating areas will similarly recover.

Net interest expense increased by 40% to P= 671 million for 2021, driven by additional loan drawdowns of the
subsidiaries. Depreciation and amortization expense grew by 4% to P = 736 million due to MWPVI Group’s
completed CAPEX last year.

Below is a summary of the results of MWPVI’s core subsidiaries:

For the years ended December 31

2021 2020 Increase %
(Decrease)
Clark Water
Billed volume (in million cubic meters) 12.8 13.5 (0.7) -5%
Average tariff (in Pesos per cubic meter) 31.8 30.9 0.9 3%
Net income (loss) (in millions) P
= 52 (P
= 80) P
= 132 165%
Billed Connections 2,021 2,062 (41) -2%
Non-Revenue Water 4.9% 7.0% 2.1 ppts
Laguna Water
Billed volume (in million cubic meters) 45.9 44.9 1.0 2%
Average Tariff (in Pesos per cubic meter) 40.7 40.3 0.4 1%
Net income (in millions) P
= 466 P
= 482 (P
= 16) (3%)
Billed Connections 116,367 112,696 3,671 3%
Non-Revenue Water 19.7% 20.9% 1.2 ppts

(Forward)

SEC Form 17-A 115

 For the years ended December 31
2021 2020 Increase %
(Decrease)
Boracay Water
Billed volume (in million cubic meters) 2.3 3.2 (0.9) -29%
Average tariff (in Pesos per cubic meter) 112.1 108.1 4.0 4%
Net loss (in millions) (P
= 175) (P
= 116) (P
= 59) -51%
Billed Connections 3,932 5,351 (1,419) -27%
Non-Revenue Water 21.1% 16.1% (5.0 ppts)
Estate Water
Supervision fees 199 249 (50) -20%
Billed volume (in million cubic meters) 10.1 10.5 (0.4) -4%
Average tariff (in Pesos per cubic meter) 41.9 39.6 2.3 6%
Net loss (in millions) (P
= 199) (P
= 77) (P
= 122) -157%
Billed Connections 14,604 14,153 451 3%

Manila Water Asia Pacific (MWAP)

The following discussion covers the consolidated results of MWAP, which is comprised of the performance
contributions of the associates in Vietnam, Thailand, Indonesia, and the Kingdom of Saudi Arabia.

For the years ended December 31

Increase
2021 2020 (Decrease) %
Operating Highlights
Billed volume (in million cubic meters)* 673.2 628.5 44.7 7%

Financial Highlights (in millions)

Equity share in net income of associates P
= 569 P
= 214 P
= 356 166%
Cost and expenses (excluding depreciation and
amortization) 137 85 52 61%
EBITDA 447 (212) 660 311%
Net income (loss) attributable to MWC P
= 317 (P
= 371) P
= 688 185%
*Not attributable to MWC

On a consolidated MWAP level, equity share in net income of associates increased 166% due to positive
performance of all associates except Saigon Water. This performance was led by East Water’s notable recovery
from the impact of drought and the COVID pandemic in 2020 with the absence of one-time fair value adjustment
in East Water investment.

On the other hand, cost and expenses increased by 61% to ₱137 million, in line with the resumption of business
development activities and higher management and professional fees.

Below is a summary of the results of MWAP’s associates:

For the years ended December 31

Increase
(in millions) 2021 2020 (Decrease) %
East Water at 18.72% contribution, before P
= 306 P
= 232 P
= 74 32%
adjustment
Impact of fair value amortization (148) (411) 263 64%
East Water at 18.72% contribution, adjusted 158 (179) 337 188%
Thu Duc Water at 49.00% contribution 276 267 9 3%
Kenh Dong Water at 47.35% contribution 166 164 2 1%
Saigon Water at 37.99% contribution (61) (37) (24) -62%
PT STU at 20.00% contribution 3 (1) 4 530%
IWP at 20.00% contribution 28 - 28 100%
Total equity share in net income of associates - P
= 570 P
= 214 P
= 356 167%
PFRS

SEC Form 17-A 116

CONSOLIDATED BALANCE SHEET

Total assets as of December 31, 2021 stood at nearly P = 166 billion, an increase of 6% against December 31, 2020
driven by operating cash flows and the additional capital expenditures. Said increase already considers the
infusion of Prime Strategic Holdings of P
= 5.33 billion. The Group balance sheet remains strong, with the Company
remaining compliant with loan covenants and key ratios maintained well within set tolerances while debt maturity
profile is spread out.

As of December 31
Increase
(in millions) 2021 2020 (Decrease) %
Assets P
= 165,516 P
= 156,527 P
= 8,989 6%
Cash and cash equivalents 13,338 20,727 (7,389) -36%
Other assets 35,793 33,528 2,265 7%
Service concession assets 116,385 102,272 14,113 14%
Liabilities P
= 97,192 P
= 96,363 P
= 829 1%
Equity P
= 68,325 P
= 60,163 P
= 8,162 14%

Ratios
Net debt to equity 0.86x 0.90x
Debt service coverage ratio (DSCR) 1.92x 1.89x
Return on equity (ROE) 6% 8%

Total bank debt (including bonds) as of December 31, 2021 decreased to P

= 71.4 billion from P= 73.5 billion as of
December 31, 2020, while net bank debt as of December 31, 2021 ended higher at P
= 57.8 billion as the cash from
loan proceeds were used for operations and capital expenditures. Net bank debt to equity was at 0.86x while
DSCR stood at 1.92x. Average cost of debt for the Group was at 4.45%, while ROE was at 6%.

The Company’s Board of Directors, at its meeting held on November 18, 2021, approved the declaration and
payment of cash dividends of P = 0.531 per share on outstanding common shares, P = 0.053 per share on the
outstanding participating preferred shares, and accumulated fixed cash dividends of P = 0.030 per share on the
outstanding participating preferred shares. In total, the Company paid over P
= 1.86 billion in dividends in 2021.

CONSOLIDATED CAPITAL EXPENDITURES

The Group ended 2021 with total capital expenditures of P = 16.9 billion, with nearly P
= 14 billion or 82% of said
amount accounted for by the East Zone Concession. Majority of the East Zone Concession’s capital expenditures
were spent on wastewater expansion, network reliability and water supply projects in line with attaining service
obligations outlined in its government-approved Rate Rebasing Service Improvement Plan. The balance was
accounted for by concession fees paid to MWSS.

Meanwhile, total capital expenditures of the domestic subsidiaries amounted to P

= 3 billion for the year. Of the total
amount, P= 824 million was undertaken by Laguna Water for its water network expansion. Estate Water spent
P
= 943 million for its greenfield and brownfield projects, while the balance was taken on by the remaining
subsidiaries for its various projects.

RECENT MATERIAL EVENTS

Completion of Subscription by Prime Strategic Holdings, Inc./Trident Water

On February 15, 2021, the Company and Prime Strategic Holdings, Inc. (previously known as Prime Metroline
Holdings, Inc.) signed an Amendment to the Subscription Agreement which was originally executed by both
parties last February 1, 2020. Said amendment covers the inclusion of Trident Water Company Holdings, Inc. as
party to the Subscription Agreement following its establishment, as well as the incorporation of updated payment
terms which is 50% upon Closing and 50% upon call of Manila Water’s Board of Directors. Furthermore, Philwater
Holdings Company, Inc. and Trident Water signed a Share Purchase Agreement wherein the former agreed to
sell 2,691,268,205 of its preferred shares in Manila Water to the latter. The purchase of the preferred shares
reflects a 39.09% voting stake and 8.19% economic stake in Manila Water. The purchase price for the preferred
shares was set at P= 1.80 per share, resulting in a total purchase price of over P
= 4.8 billion.

SEC Form 17-A 117

On April 8, 2021, the Company received the Tender Offer Report from Trident Water to acquire up to
1,118,253,916 common shares of the Company through a tender offer to all shareholders. Said tender offer does
not include the 866,996,201 common shares held by Ayala Corporation and its nominees and the 4,000,000,000
preferred shares held by Philwater Holdings Company Inc. and its nominees.

A total of 462,660 common shares of Manila Water were tendered, accepted and purchased by Trident Water via
block sale through the facilities of the Philippine Stock Exchange on May 31, 2021. With the completion of the
Tender Offer, Trident Water now: (i) owns 900,052,159 common shares of MWC; and (ii) has voting rights over
2,691,268,205 preferred shares of MWC to be acquired by Trident Water. As of December 31, 2021, Trident
Water’s voting and economic interests were at 52.16% and 27.40%, respectively.

On June 3, 2021, Manila Water disclosed the changes in the Company’s Board of Directors (BOD) and
Management following the completion of the Tender Offer. Specifically, Mr. Enrique K. Razon, Jr. was elected
as the Company’s Chairman of the BOD and President and CEO. Furthermore, the following directors were
elected to Manila Water’s BOD: (1) Mr. Donato C. Almeda, (2) Mr. Rafael D. Consing, Jr. and (3) Mr. Christian
Martin R. Gonzalez, while Atty. Silverio Benny J. Tan was appointed as new Corporate Secretary of Manila Water.

On August 27, 2021, Mr. J.V. Emmanuel A. De Dios was appointed by the BOD as Director, President and Chief
Executive Officer of the Company effective September 1, 2021. Mr. De Dios occupied the seat on the BOD
vacated by Mr. Gonzalez following the latter’s resignation from the BOD.

On September 16, 2021, Ms. Gigi Iluminada T. Miguel was appointed by the BOD as Chief Finance Officer,
Treasurer, Chief Risk Officer and Group Director of Corporate Finance and Strategy of the Company effective
October 1, 2021. Ms. Miguel assumed the role following the resignation of Ms. Ma. Cecilia T. Cruzabra from the
Company.

Revised Concession Agreement (RCA) and Water Franchise Law

On March 31, 2021, MWSS and the Company executed an RCA following the directive of government to review
the provisions of the original CA. The resulting RCA retains important aspects of the original CA such as the Rate
Rebasing mechanism, as well as the confirmation of the concession period duration to be until July 31, 2037.

One key feature of the RCA is the change in the rate of return. Specifically, in lieu of a market-driven appropriate
discount rate, the Concessionaire is subjected to a 12% fixed nominal discount rate for expenditures.
Furthermore, the RCA lowers the yearly inflation factor to 2/3 of the Consumer Price Index adjustment and sets
a tariff cap on rate increases equivalent to 1.3x the previous standard rate for water and 1.5x the previous standard
rate for wastewater. Another adopted feature of the RCA is the removal of the Foreign Currency Differential
Adjustment on the tariff. Lastly, the RCA will be covered by an Undertaking Letter of the Republic which will apply
to contracts and obligations existing at the time of execution of the agreement and upholds the provisions with
regard to early termination payment.

In line with the execution of the RCA, no tariff increases will be implemented until December 31, 2022 as a way
to help alleviate the customers’ plight amid challenges brought about by the COVID-19 pandemic. Service
obligations will be adjusted in line with the new standards under the RCA, with corresponding realignments to the
2018 Service Improvement Plan to be finalized with MWSS.

On February 16, 2022, the Company and MWSS signed a Fourth Amendment to the RCA to further extend the
effective start date of the RCA up to March 18, 2022 to allow more time for the completion of remaining conditions
precedent to the effectivity of the RCA.

On December 10, 2021, the franchise of Manila Water (Republic Act 11601) was signed into law. This grants
Manila Water the franchise to establish, operate and maintain a waterworks and sewerage system in the East
Zone Service Area of Metro Manila and the Province of Rizal. It confirms the status of Manila Water as a public
utility, consistent with the provisions of the Revised Concession Agreement executed between Metropolitan
Waterworks and Sewerage System (MWSS) and Manila Water on March 31, 2021.

The franchise shall coexist alongside the RCA, wherein the RCA shall serve as the certificate of public
convenience and necessity (CPCN) of Manila Water. Specifically, the RCA contains the terms and conditions of
Manila Water’s concession for the provision of water and wastewater services to the East Zone Service Area,
Rizal, and Cavite. The RCA will remain valid unless terminated after due notice and hearing.

The term of the RCA is currently until 2037. However, the franchise authorizes MWSS to extend the term of the RCA
up to the term of the franchise, when public interest for affordable water security requires and upon application by Manila
Water, subject to notice and hearing.

SEC Form 17-A 118

New Business Development Updates

On September 30, 2021, Manila Water disclosed that the consortium between the Company and its wholly owned
subsidiary, Manila Water Philippine Ventures (MWPVI) received a Notice of Award from the Provincial Government of
Pangasinan (PGP) for the implementation of joint venture project for the provision of bulk water supply to the Province
of Pangasinan. Upon completion of the conditions precedent the consortium and PGP shall sign a concession
agreement to implement the project with an estimated capital expenditure program amounting to P = 8 billion over the 25-
year contract period. The project is expected to deliver a billed volume of 200 million liters per day by year 25.

On October 8, 2021, the Company announced that the consortium of Manila Water with Saur SAS and Miahona
Company has been awarded the Management, Operation and Maintenance Contract (MOMC) by the National Water
Company (NWC) of the Kingdom of Saudi Arabia for its Eastern Cluster over a seven-year period. Similar to the
previously awarded North West Cluster to the same consortium, the MOMC will comprise the management, operations
and maintenance of water and wastewater facilities and will entail implementation of enabling projects and deployment
of key personnel to manage the cluster and achieve the Key Performance Indicators set by NWC.

MATERIAL CHANGES (INCREASE OR DECREASE OF 5% OR MORE IN THE FINANCIAL STATEMENTS)

CONSOLIDATED STATEMENTS OF INCOME (YEAR-END 2021 VS. YEAR-END 2020)

Years Ended December 31

Increase %
2021 2020 (Decrease)
CONTINUING OPERATIONS
REVENUE FROM CONTRACTS WITH CUSTOMERS
Water and used water revenues P
= 19,287,138,596 P
= 20,158,392,365 (P
= 871,253,769) (4%)
Other operating revenues 1,005,249,021 966,742,536 38,506,485 4%
20,292,387,617 21,125,134,901 (832,747,284) (4%)
COST OF SERVICES
Depreciation and amortization 3,328,979,343 3,003,122,434 325,856,909 11%
Power, light and water 1,450,438,453 1,427,167,997 23,270,456 2%
Salaries, wages and employee benefits 1,259,467,394 1,184,915,942 74,551,452 6%
Repairs and maintenance 529,447,395 418,345,419 111,101,976 27%
Contractual services 504,006,045 390,115,686 113,890,359 29%
Water treatment chemicals 430,600,800 521,533,844 (90,933,044) (17%)
Management, technical and professional fees 338,930,431 135,119,166 203,811,265 151%
Regulatory costs 273,907,788 237,765,185 36,142,603 15%
Wastewater costs 195,695,652 125,297,898 70,397,754 56%
Water tankering and bulk water costs 177,007,383 207,594,082 (30,586,699) (15%)
Amortization of water service connections 142,967,905 103,294,386 39,673,519 38%
Collection fees 135,772,209 100,912,525 34,859,684 35%
Rent 3,653,385 2,982,130 671,255 23%
Other expenses 170,207,075 107,619,900 62,587,175 58%
8,941,081,258 7,965,786,594 975,294,664 12%
GROSS PROFIT P
= 11,351,306,359 P
= 13,159,348,307 (P
= 1,808,041,948) (14%)
OPERATING EXPENSES 3,906,937,740 3,895,407,194 11,530,546 0%
INCOME BEFORE OTHER INCOME (EXPENSES) 7,444,368,619 9,263,941,113 (1,819,572,494) (20%)
OTHER INCOME (EXPENSES)
Revenue from rehabilitation works 16,970,072,793 10,976,166,852 5,993,905,941 55%
Cost of rehabilitation works (16,970,072,793) (10,976,166,852) (5,993,905,941) 55%
Interest expense (2,473,334,462) (2,260,072,792) (213,261,670) 9%
Foreign exchange gains (losses) - net (781,039,952) 215,701,805 (996,741,757) (462%)
Equity share in net income of associates 569,460,003 213,838,618 355,621,385 166%
Foreign currency differentials 433,279,731 (725,815,429) 1,159,095,160 (160%)
Interest income 308,260,495 503,191,408 (194,930,913) (39%)
Losses on disposal of property and equipment - net (34,110,548) (1,130,401) (32,980,147) 2918%
Amortization of deferred credits 16,996,570 15,353,323 1,643,247 11%
Other losses - net (175,485,709) (561,438,569) 385,952,860 (69%)
(2,135,973,872) (2,600,372,037) 464,398,165 (18%)
INCOME BEFORE INCOME TAX FROM
CONTINUING OPERATIONS 5,308,394,747 6,663,569,076 (1,355,174,329) (20%)
PROVISION FOR INCOME TAX - NET 1,539,293,408 1,748,724,353 (209,430,945) (12%)
NET INCOME FROM CONTINUING OPERATIONS 3,769,101,339 4,914,844,723 (1,145,743,384) (23%)
NET LOSS AFTER TAX FROM DISCONTINUED
OPERATIONS (14,962,821) (369,057,479) 354,094,658 (96%)
NET INCOME P
= 3,754,138,518 P
= 4,545,787,244 (791,648,726) (17%)

SEC Form 17-A 119

Cost of Services

Depreciation and amortization – 11% increase

Increase of P
= 326 million was on account of additional depreciation from completed capital expenditure projects,
pipelaying, and pipe replacement projects, partly offset by the decline in billed volume for entities using units-of-
production method of amortization in their service concession assets.

Salaries and wages – 6% increase

Increase of P
= 75 million was due to additional headcount and higher variable pay.

Repairs and maintenance – 27% increase

Increase of P
= 111 million was mainly due to additional hardware and software subscription fees, sewer network
improvements and technical equipment of the Company.

Contractual services – 29% increase

Increase of P
= 114 million driven by higher contractor fees of MWTS and IT-related services fees of the Company.

Water treatment chemicals – 17% decrease

Decrease of P
= 91 million was due to lower in billed volume and usage of more cost-efficient alternative in the
Cardona Water Treatment Plant.

Management, technical and professional fees – 151% increase

Increase of P
= 204 million was mainly due to higher legal and consultancy fees of the Company.

Regulatory costs – 15% increase

Increase of P= 36 million was driven by the CPI adjustment on the Company’s regulatory fees and additional
regulatory fees of Laguna Water.

Wastewater costs – 56% increase

Increase of P
= 70 million was due to increased desludging activities of the Company as a result of the easing of
quarantine restrictions in 2021.

Water tankering and bulk water costs – 15% decrease

Decrease of P
= 31 million was due to purchase of water tankering trucks of Estate Water, now part of its property
plant and equipment, compared to water tankering outsourcing in 2020.

Amortization of water service connections – 38% increase

Increase of P
= 40 million was mainly due to increase in new water service connections by the Company.

Collection fees – 35% increase

Increase of P= 35 million was driven by the ramp up of collection activities this year on account of last year’s
suspension of collection activities and extension of customer payment due dates of the Company.

Rent – 23% increase

Increase of P
= 1 million was due to additional short-term leases of the Group during the year.

Other Income (Expenses)

Revenue from rehabilitation works and cost of rehabilitation works – 55% increase
Increase of P= 5,994 million was due to additional capital expenditures during the year in line with the fulfillment of
service obligations.

Interest expense – 9% increase

= 213 million was due to the full year impact of the Company’s Sustainability Bonds, combined with
Increase of P
the additional loan drawdowns of the subsidiaries for their capital expenditures and operational needs of the
Group.

Net foreign currency differentials and foreign exchange losses – 32% decrease
Decrease of P = 162 million was due to capitalization of the Company’s foreign exchange losses on borrowings
related to qualifying assets starting 2021. This partially offsets the foreign exchange losses on hedging
transactions.

SEC Form 17-A 120

Equity share in net income of associates – 166% increase
Increase of P
= 356 million was due to positive performance of Thu Duc Water, Kenh Dong Water, and East Water
plus the net income contribution from IWP starting April 2021.

Interest income – 39% decrease

Decrease of P= 195 million was due to lower interest rate from short-term placements.

Net losses on disposal of property and equipment – 2,918% increase

Net movement of P = 33 million was mainly due to disposal of assets of the subsidiaries in 2021.

Amortization of deferred credits – 11% increase

Increase of P
= 2 million was attributed to the additional customer guaranty deposits coming from new billed service
connections.

Net other losses – 69% decrease

Net decrease of P= 386 million was mainly on account of the impairment loss on the investment in Cu Chi Water
recognized in 2020.

Provision for income tax - net – 12% decrease

Net decrease of P= 209 million was due to Group’s lower taxable income and income tax rates as a positive impact
of the CREATE Law.

Net loss after tax from discontinued operations – 96% decrease

Decrease in net loss by P = 354 million mainly from the lower net losses during the year coming from Zamboanga
Water and the closure of the MWTS Healthy Family business in 2020.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (YEAR-END 2021 VS. YEAR-END 2020)

December 31
2021 2020 Increase %
(Decrease)
ASSETS
Current Assets
Cash and cash equivalents P
= 13,337,711,573 P
= 20,727,258,023 (P
= 7,389,546,450) (36%)
Short-term investments 268,516,237 129,300,000 139,216,237 108%
Receivables 2,703,155,395 3,157,205,648 (454,050,253) (14%)
Contract assets - current portion 822,127,358 838,175,469 (16,048,111) (2%)
Inventories 450,692,516 324,928,002 125,764,514 39%
Other current assets 2,067,609,310 2,560,827,257 (493,217,947) (19%)
Total Current Assets 19,649,812,389 27,737,694,399 (8,087,882,010) (29%)
Noncurrent Assets
Property, plant and equipment and software 6,338,703,883 5,566,706,250 771,997,633 14%
Service concession assets - net 116,385,195,772 102,272,180,787 14,113,014,985 14%
Right-of-use assets 349,695,765 362,609,467 (12,913,702) (4%)
Contract assets - net of current portion 1,665,312,397 1,666,304,528 (992,131) (0%)
Investments in associates 14,536,285,550 14,283,833,487 252,452,063 2%
Goodwill 6,247,010 136,566,475 (130,319,465) (95%)
Deferred tax assets - net 1,230,206,887 1,549,700,707 (319,493,820) (21%)
Other noncurrent assets 5,355,465,105 2,950,969,389 2,404,495,716 81%
Total Noncurrent Assets 145,867,112,369 128,788,871,090 17,078,241,279 13%
Total Assets P
= 165,516,924,758 P
= 156,526,565,489 P
= 8,990,359,269 6%

(Forward)

SEC Form 17-A 121

 December 31
2021 2020 Increase %
(Decrease)
LIABILITIES AND EQUITY
Current Liabilities
Accounts and other payables P
= 13,228,865,224 P
= 10,442,334,810 P
= 2,786,530,414 27%
Current portion of:
Long-term debt 5,311,356,305 4,739,618,949 571,737,356 12%
Service concession obligations 626,529,444 661,845,953 (35,316,509) (5%)
Lease liabilities 115,016,609 126,092,170 (11,075,561) (9%)
Contract liabilities 522,314,528 397,065,131 125,249,397 32%
Income tax payable 131,742,420 159,995,109 (28,252,689) (18%)
Total Current Liabilities 19,935,824,530 16,526,952,122 3,408,872,408 21%
Noncurrent Liabilities
Noncurrent portion of:
Long-term debt 66,077,385,688 68,792,173,857 (2,714,788,169) (4%)
Service concession obligations 8,331,791,889 8,443,800,142 (112,008,253) (1%)
Lease liabilities 246,701,536 267,845,139 (21,143,603) (8%)
Contract liabilities 151,548,734 111,686,008 39,862,726 36%
Pension liabilities - net 146,931,846 219,601,807 (72,669,961) (33%)
Deferred tax liabilities - net 263,639,020 179,225,971 84,413,049 47%
Provisions 1,166,957,229 991,640,656 175,316,573 18%
Other noncurrent liabilities 870,980,332 830,184,681 40,795,651 5%
Total Noncurrent Liabilities 77,255,936,274 79,836,158,261 (2,580,221,987) (3%)
Total Liabilities 97,191,760,804 96,363,110,383 828,650,421 1%
Equity
Attributable to common equity holders of
Manila Water Company, Inc.
Capital stock
Common stock 2,884,839,617 2,064,839,617 820,000,000 40%
Preferred stock 400,000,000 400,000,000 – –
3,284,839,617 2,464,839,617 820,000,000 33%
Additional paid-in capital 14,417,217,151 4,608,744,479 9,808,472,672 213%
Subscriptions receivable (5,654,475,773) (371,306,653) (5,283,169,120) 1423%
Total paid-up capital 12,047,580,995 6,702,277,443 5,345,303,552 80%

Retained earnings:
Appropriated P
= 40,610,000,000 P= 40,610,000,000 =–
P –
Unappropriated 13,448,628,617 11,639,149,846 1,809,478,771 16%
Cumulative translation adjustment 407,475,855 (37,244,853) 444,720,708 (1194%)
Hedging reserves 422,240,441 – 422,240,441 100%
Remeasurement loss on defined benefit (38,510,424) (115,351,016) 76,840,592 (67%)
plans
Equity in other comprehensive loss of (1,906,738) (1,906,738) – –
associates
Other equity reserves 54,106,905 54,106,905 – –
66,949,615,651 58,851,031,587 8,098,584,064 14%
Noncontrolling interests 1,375,548,303 1,312,423,519 63,124,784 5%
Total Equity 68,325,163,954 60,163,455,106 8,161,708,848 14%
Total Liabilities and Equity P
= 165,516,924,758 P
= 156,526,565,489 P
= 8,990,359,269 6%

Cash and cash equivalents – 36% decrease

Cash and cash equivalents decreased by P = 7,390 million due to higher capital expenditures, payment of long term
debt, service concession obligations, and interest.

Short-term investments – 108% increase

Short-term investments increased by P
= 139 million due to additional money market placements of the Group.

SEC Form 17-A 122

Receivables – 14% decrease
Decrease of P
= 454 million was due to additional provisions for expected credit losses recognized this year, lower
revenues, and collections from customers.

Inventories – 39% increase

Increase of P
= 126 million was mainly due to purchase of water treatment chemicals of the Company.

Other current assets – 19% decrease

Decrease of P= 493 million was mainly due to reclassification of the escrow fund, which was set up in 2020 for the
Company’s land acquisition, to service concession asset after all the conditions to the contract to sell were
complied with in 2021. This was offset by higher net input VAT and current portion of advances to suppliers,
contractors, and deposits.

Property, plant and equipment – 14% increase

Increase of P= 772 million was mainly due to acquisition of office furniture, plant equipment and transportation
equipment of the Group.

Service concession assets – 14% increase

= 14,113 million was due to the Group’s capital expenditures during the year in line with the respective
Increase of P
service obligations, which were offset by the related amortization expense.

Goodwill – 95% decrease

Decrease of P
= 130 million was due to impairment on the goodwill from the Clark Water acquisition..

Deferred tax assets - net – 21% decrease

Decrease of P= 319 million was due to lower deferred tax assets of the Group arising from the reduced income tax
rates under the CREATE Law from 30% to 25%.

Other noncurrent assets – 81% increase

= 2,404 million arose from the Group’s higher noncurrent advances to contractors, and the Company’s
Increase of P
derivative assets to hedge the Company’s exposure to foreign currency risk on its long-term debt.

Accounts and other payables – 27% increase

Increase of P
= 2,787 million was due to additional payable to contractors during the year brought about by the
capital expenditure projects of the Group.

Contract liabilities - current and noncurrent portion – 32% increase

Increase of P
= 165 million was due to the additional unearned income from supervision fees and connection fees
of the domestic subsidiaries..

Lease liabilities - current and noncurrent portion – 8% decrease

Decrease of P = 32 million was due to the lease payments of the Group during the year.

Income tax payable – 18% decrease

Decrease of P
= 28 million was due to lower taxable income of the Group.

Pension liabilities - net – 33% decrease

Decrease of P = 73 million was mainly due to the net actuarial gains and retirement fund contributions during the
year offset by current year service cost and net interest on the Group’s defined benefit obligations and plan assets.

Deferred tax liabilities - net – 47% increase

= 84 million was due to higher provision for deferred taxes from the Group’s contract assets on bulk
Increase of P
water arrangements, and higher UOP than straight-line amortization expense of Clark Water and Laguna Water.

Provisions – 18% increase

= 175 million was due to the Group’s additional provisions for potential exposures during the year.
Increase of P

Common stock - 40% increase

Increase of P= 820 million arose from the 50% subscription payment of Trident Water upon closing of the tender
offer in June 2021.

SEC Form 17-A 123

Additional paid-in capital - 213% increase
Increase of P
= 9,808 million was mainly due to the Trident Water subscription payment.

Subscription receivable – 1,423% increase

Increase of P
= 5,283 million represents the remaining 50% unpaid subscription of Trident Water which is callable
by the BOD of the Company.

Retained earnings - unappropriated – 16% increase

Increase of P
= 1,809 million was due to net income earned by equity holders of the Company net of cash dividends
declared and paid to common and preferred stockholders during the year.

Cumulative translation adjustment – 1,194% increase

Increase of P = 445 million was due to the depreciation of the PHP against the USD during the year. This was
partially offset by the impact of Group’s net investment hedge on its Investment in MWAP.

Hedging reserves – 100% increase

Increase of P= 422 million arose from the cash flow hedge and cost of hedging arising from the Company’s
derivative assets.

Remeasurement loss on defined benefit plans – 67% decrease

Decrease of P= 77 million was due to the Group’s net actuarial gain after tax on its defined benefit obligations and
plan assets.

Factors Affecting the Group’s Results of Operations

Water Tariff
Water rates are set according to the rate determination specified in the respective concession agreements of the
entities under the Group. The Group has several signed concession arrangements mostly with government
entities, such as the MWSS, Calasiao Water District, Tourism Infrastructure and Enterprise Zone Authority,
Calbayog City Water District, Clark Development Corporation, Obando Water District, Bulacan Water District, City
of Ilagan Water District, Tanauan Water District, Provincial Government of Laguna, Pagsanjan Water District, and
Lambunao Water District.

The Group’s tariff schedules generally apply to the four main categories of customers namely, residential,
semi-business, commercial, or industrial. Customers pay service charges based on one or more of the following:
• water charge;
• environmental charge;
• sewer charge;
• maintenance service charge; and/or
• foreign currency differential adjustment (FCDA).

In 2021, the Group generated 95% of its revenue from water and used water charges and 5% from its other
operating income.

Tariff Rate Adjustments

The Group’s results of operations and financial condition are highly dependent upon its ability to receive
reasonable tariff rate increases for its water and sewerage services under its concession agreements. The Group
is entitled to one or more of the following tariff rate adjustments on top of the basic water charge under its
concession agreements, whenever applicable.
• annual standard rates adjustment to compensate for increases in the Philippine Consumer Price Index
(CPI), subject to the rate adjustment limit;
• extraordinary price adjustment (EPA) to account for the financial consequences of certain unforeseen
events, subject to the grounds stipulated in the applicable concession agreement; and/or
• FCDA to recover or account for foreign exchange losses and gains arising from loans and any
concessionaire loans used for its service expansion and improvement. The FCDA is a recovery
mechanism available in the concession agreements of the Company and Boracay Water. Beginning
November 18, 2021, the Company’s RCA has removed its FCDA recovery mechanism from the water
rates of the Company’s customers. Boracay Water, on the other hand, still maintains this natural hedge.

SEC Form 17-A 124

In addition to the tariff adjustments described above, under the concession agreements, tariff rates of the Group
are evaluated under a regular process called rate rebasing through which the rates for water and sewerage
services are recalibrated to allow the Group to recover over the remaining concession period the following items:
• its operating, capital maintenance and investment expenditures (efficiently and prudently incurred);
• Philippine business taxes; and
• payments corresponding to debt service on grantor and concessionaire loans.

Philippine Economic Conditions

With most of the Group’s operations based in the Philippines, the Group’s results of operations and financial
condition are affected by general economic conditions in the country, particularly by inflation rates, interest rates,
and currency exchange rate movements. For example, the general performance of the Philippine economy
affects demand for water and used water services, and inflation affects the Group’s costs and its margins.
While the Group is allowed to recover certain costs associated with changes in inflation and currency exchange
rates, these adjustments are implemented after varying periods of time. Moreover, approved tariff rate
adjustments may not cover all increased costs to the Group associated with changes in economic conditions.
The Philippine economic environment has historically been characterized by significant variations in economic
growth rates.

Inflation
Each year, the Group may propose tariff rate adjustments to account for inflation, as measured by the CPI
published regularly by the Philippine Statistics Authority, subject to the rates adjustment limit set forth in the
Concession Agreements and guidelines of tariff regulation bodies. Although the Group has generally been
granted its proposed CPI related tariff rate adjustments in the past, a significant increase in inflation could increase
the Group’s costs beyond what it may be able to recover through the CPI tariff rate adjustment.
In 2021, full year average inflation was at 3.90%, well within the government’s target range of 2.00% to 4.00% for
the year. The Company decided to defer the implementation of its previously approved rate rebasing adjustments
and inflation adjustments for the charging year 2020 and 2021, in coordination with the MWSS RO. In addition,
the RCA also includes a tariff freeze until December 31, 2022 and it also reduced the inflation factor to 2/3 of the
CPI.

Interest Rates
The Group raises significant amounts of borrowings to finance the acquisition, development, improvement and
construction of fixed assets for projects needed to meet service obligations. The Group maintains a mix of loans
with floating and fixed interest rates. Interest rates are dependent on market conditions where significant
increases in rates will increase the Group’s borrowing costs. In 2021, the BSP policy rate was unchanged at
2.00%, to provide support to an economy still recovering from the impact of pandemic induced lockdowns and
threats from new variants.

Currency Exchange Rates

The Group is also allowed to request a quarterly tariff rate adjustment for foreign currency differentials in order to
recover or compensate for present and future foreign exchange losses or gains on MWSS and TIEZA loans, and
Group loans used for capital expenditures and payments of concession fees. Similar to the CPI adjustment, there
can be no assurance that the Company and Boracay Water will be able to obtain adjustments on its tariff rates
for full reimbursement of these losses, particularly tariff rates where there is a significant depreciation of the peso.
Movements in the Peso and other foreign denominated currencies are driven by global market uncertainty,
political risk, and recently, by the trade tensions between China and the United States.

Water Supply

The Group’s water supply is dependent on infrastructure to draw water from ground and surface sources.
For the Company, supply is heavily dependent on the allocation from the Angat Dam. Due to increasing demand
over time, the Company is continuously implementing projects to develop new water sources to meet customer
demand.

Furthermore, the Philippines experiences the El Niño phenomenon which is characterized by prolonged and
severe drought. During such periods, sources of raw water available to the Company from MWSS are significantly
strained, thus affecting the Company’s ability to supply adequate treated water to its customers. Such was the
case during the water crisis of 2019 when raw water dam levels declined to critical levels which caused water
service availability to drop significantly. Currently, the Company’s water supply is augmented by the Cardona
Water Treatment Plant, as well as by recommissioned and new deep wells.

SEC Form 17-A 125

Regulations

Under its concession agreements, bulk water sales and purchase agreements, and JVAs, the Group acts as
either an agent or a partner of the MWSS, local government, or local water districts in providing water and/or used
water services to the public. Each of the contracts, provide for the principals or the partners to monitor and ensure
compliance with the obligations in the contracts. The Group’s significant commitments under these contracts are
disclosed in Note 29 to the Audited Consolidated Financial Statements.

Liquidity and Capital Resources

The Group’s objective is to ensure access to readily available cash, bank credit facilities, and capital markets to
fund the group’s funding requirements. The Group’s policy is to maintain a level of cash that is sufficient to fund
its operating cash requirements for the next three (3) to six (6) months and any claim for refund of customers’
guaranty deposits. Capital expenditures are funded through long-term debt, while operating expenses and
working capital requirements are sufficiently funded through internally generated cash. Maturing debts are
refinanced through a combination of long-term debt and internally generated cash.

Capital Sources

The Group’s cash and cash equivalents as of December 31, 2021 ended at P = 13,337.71 million. During 2021,
the Group had more cash expenditures than inflow across its operating, investing, and financing activities. Cash
outflows were primarily for capital expenditures, debt repayments, and concession fee payments. The Group’s
improvement and expansion project implementation were funded by available credit lines, loan facilities from
reputable local and international financing institutions, from the capital infusion of Trident Water’s subscription
payment in June 2021, and from the remaining proceeds from the US$500.00 million sustainability bonds
issuance of the Company in July 2020.
Cash Used in Operating Activities. Net cash used in operations in 2021 amounted to P = 19.89 million primarily for
funding service improvement activities and capital expenditures for the expansion of water and used water
networks required under the respective concession arrangements of the Group amounting to P = 15,352.65 million.
Cash from operating activities this year mainly arose from cash operating income amounting to P = 12,913.53
million.

Cash Used in Investing Activities. Net cash used in investing activities for the year ended at
P
= 3,177.75 million. Cash was used mainly for additional noncurrent assets of P = 2,015.34 million consisting of
advances to the contractors for the Group’s ongoing capital expenditure projects, purchases of additional
property, plant and equipment amounting to P = 1,519.66 million, and for net additional short-term investments of
P
= 135.87 million. These were partly offset by the P= 418.30 million proceeds from dividends from associates and
the P= 73.12 million interest received during the year from cash in banks, cash equivalents, and short-term
investments.

Cash Used in Financing Activities. Net cash used in financing activities amounted to P = 4,191.46 million in 2021
which was mainly used for payments of long-term debt totaling P = 12,365.91 million, service concession obligations
amounting to P= 925.76 million, interest payments on long-term debt amounting to P = 3,012.27 million, and dividends
payments to equity holders of the Company of P = 1,863.85 million. These cash outflows were offset by the
availment long-term debt totaling P = 8,898.72 million and the collection of subscriptions receivable of P= 5,341.91
million, primarily from Trident Water’s P = 5,300.00 million payment representing 50.00% of the total subscription
amount under the Subscription Agreement of the Company and Prime Strategic Holdings, Inc.

Further details are disclosed in the Group’s Audited Consolidated Statements of Cash Flows.

Contractual Obligations and Commercial Commitments

The Group’s significant contractual obligations and commercial commitments as of December 31, 2021 are
disclosed in the Group’s Audited Consolidated Financial Statements as follows:
• The Group’s liquidity risk is disclosed in Note 28.
• Significant commitments with the West Concessionaire and those required under the Group’s concession
or joint venture agreements are disclosed in Notes 24 and 29, respectively.
• Other obligations under the Group’s long-term debt agreements are in Note 15.

There were no material off-balance sheet transactions, arrangements, obligations (including contingent
obligations other than those disclosed in Note 30 to the Audited Consolidated Financial Statements).

SEC Form 17-A 126

Restatement of Accounts

The consolidated financial statements of the Group have been prepared in compliance with Philippine Finance
Reporting Standards (PFRS) and provide comparative information in respect of the previous periods.

In 2020, the Group incurred net losses from discontinued operations of comprising of the results of operations of
Zamboanga Water and the MWTS Healthy Family division following the termination of the Non-Revenue Water
Reduction Services Agreement and the permanent closure of Healthy Family, respectively.

Starting with the period ended December 31, 2020, the Group presented as a single amount in its Statements
of Comprehensive Income the net losses after tax of the discontinued operations of Zamboanga Water and MWTS
Healthy Family and restated the comparative periods ended December 31, 2019. The details of the discontinued
operations are disclosed in Notes 1 and 19 to the Audited Consolidated Financial Statements.

No restatements were made in the Statements of Financial Position, Statements of Changes in Equity, and
Statements of Cash Flows as of December 31, 2021 and 2020 and for the periods ended December 31, 2021
and 2020.

Item 7. Financial Statements

Please see attached Exhibit 1.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Statements

SGV and Co. has been the external auditor of the Company since 1997 and continues to perform the same
services for the Company up to the present date. Pursuant to Revised SRC Rule 68, the signing partner of
SGV & Co. is rotated every seven (7) years.

There are no disagreements with SGV and Co. on accounting and financial disclosures.

SEC Form 17-A 127

 PART III – CONTROL AND COMPENSATION INFORMATION

Item 9. Directors and Executive Officers of the Registrant

The write-ups below include positions held as of March 14, 2024 and in the past five years and personal
data as of March 14, 2024, of directors and executive officers.

The Board of Directors

The Board of Directors (the “Board” or “BOD”) is primarily responsible for the governance of the Company.
It controls and holds all corporate powers, all businesses conducted by and all properties of the Company.
The Board is structured in a way that it provides an independent check on management.

Section 2 of Article III of the Company’s By-laws state:

“The business and property of the Corporation shall be managed by a Board of eleven (11) directors,
including independent directors, who shall be stockholders and who shall be elected during each annual
meeting of stockholders owning majority of the subscribed capital stock entitled to vote in the manner
provided in these By-laws and shall hold office for one (1) year and until their successors are elected and
qualified; Provided, that the Board shall have as many independent directors who shall be nominated and
elected in accordance with the requirements of pertinent laws and implementing rules and regulations;
Provided, further, that the number of directors who are citizens of the Philippines shall be proportionate to
the percentage of the total outstanding capital stock of the Corporation owned by Philippine nationals as
defined by law.”

Date of First Election

as Member of the
Name Age Position BOD

Enrique K. Razon, Jr. 64 Chairman of the Board June 3, 2021

Jose Victor Emmanuel A. de Dios 59 Executive Director August 27, 2021

Donato C. Almeda 69 Executive Director June 3, 2021

Antonino T. Aquino 76 Non-Executive April 24, 1998

Director

Alberto M. De Larrazabal 68 Non-Executive September 30, 2022

Director

Sandy A. Alipio 53 Non-Executive August 2, 2023

Director

Katrina Maria S. Razon 32 Non-Executive November 3, 2023

Director

Sherisa P. Nuesa 69 Lead Independent April 16, 2021

Director

Cesar A. Buenaventura 94 Independent Director April 16, 2021

Octavio Victor R. Espiritu 80 Independent Director April 16, 2021

Eric Ramon O. Recto 60 Independent Director April 16, 2021

SEC Form 17-A 128

 Name Position/Board Committee Membership
Razon,Jr.
Enrique K. Razon Jr. Chairperson
Chairman of the
of the Board
Board of Directors
of Directors
Chairman of the Executive Committee
Chairperson of the Executive Committee
Jose Victor Emmanuel A. de Dios President and Chief Executive Officer
Chairperson of the Environment, Social, and Governance Committee
Member of the Executive Committee
Member of the Talent and Remuneration Committee

Donato C. Almeda Chief Regulatory Officer

Member of the Executive Committee
Member of the Board Risk Oversight Committee
Member of the Nomination Committee

Antonino T. Aquino Member of the Executive Committee

Member of the Talent and Remuneration Committee

Alberto M. De Larrazabal Member of the Board of Directors

Sandy A. Alipio Member of the Executive Committee

Member of the Audit Committee
Member of the Related Party Transactions Committee

Katrina Maria S. Razon Member of the Board of Directors

Sherisa P. Nuesa Lead Independent Director

Chairperson of the Audit Committee
Member of the Board Risk Oversight Committee
Member of the Corporate Governance Committee
Member of the Nomination Committee
Member of the Environment, Social, and Governance Committee

Cesar A. Buenaventura Chairperson of the Board Risk Oversight Committee

Member of the Audit Committee
Member of the Corporate Governance Committee
Member of the Related Party Transactions Committee
Member of the Nomination Committee
Member of the Environment, Social, and Governance Committee

Octavio Victor R. Espiritu Chairperson of the Nomination Committee

Chairperson of the Talent and Remuneration Committee
Chairperson of the Nomination Committee
Member of the Audit Committee
Member of the Related Party Transactions Committee
Member of the Environment, Social and Governance Committee

Eric Ramon O. Recto Chairperson of the Related Party Transactions Committee

Member of the Board Risk Oversight Committee
Member of the Corporate Governance Committee
Member of the Talent and Remuneration Committee
Member of the Environment, Social and Governance Committee

SEC Form 17-A 129

Profiles of the Members of the Board of Directors

ENRIQUE K. RAZON JR.

Filipino, 64 years old
Chairman of the Board of Directors since June 3, 2021

Enrique K. Razon Jr. is the Chairman of the Board of Directors of Manila Water Company, Inc.

Concurrently, he is the Chairman and President of International Container Terminal Services, Inc. (ICTSI),
Chairman and Chief Executive Officer of Bloomberry Resorts Corporation (BRC), IWI Container Terminal
Holdings, Inc., Razon Industries, Inc., Sureste Realty Corporation, Quasar Holdings, Inc., Razon & Co., Inc.,
Achillion Holdings, Inc., Collingwood Investment Company Ltd., Bravo International Port Holdings, Inc.,
Alpha International Port Holdings, Inc., Provident Management Group, Inc., Trident Water Company
Holdings Inc., and Prime Strategic Holdings, Inc.; the Chairman of ICTSI Foundation, Inc., Prime
Infrastructure Foundation, Inc., Prime Infrastructure Capital, Inc., WawaJVCo Inc., Sureste Properties, Inc.,
Monte Oro Resources and Energy, Inc., Bloomberry Resorts & Hotels, Inc., Pilipinas Golf Tournament, Inc.,
ICTSI (Hongkong) Ltd.;. a director of Pentland International Holdings Ltd., CLSA Exchange Capital, and
Xcell Property Ventures, Inc.

ICTSI and BRC are listed in the Philippine Stock Exchange.

He is a member of the US-Philippine Society and the ASEAN Business Club Philippines, Inc.

The De La Salle University in the Philippines has conferred on Mr. Razon the degree of Doctor of Science
in Logistics Honoris Causa.

JOSE VICTOR EMMANUEL A. DE DIOS

Filipino, 59 years old
Member of the Board of Directors, President, and Chief Executive Officer since August 27, 2021

Mr. de Dios was appointed President & Chief Executive Officer of Manila Water in 2021. Prior to this,
he was Chief Executive Officer of Prime BMD Corporation. He also sits on the board of Oriental Petroleum
and Minerals Corp. (OPM) and Phoenix Petroleum Philippines (PNX), which are also publicly listed
companies.

Mr. de Dios graduated from the Ateneo School of Law in 1990 and obtained his Master of Laws degree from
Harvard Law School in 1994. He spent his early professional years practicing law starting in the Supreme
Court as Senior Law Clerk to then Associate Justice Hilario Davide, Jr. before eventually moving to private
practice at the Romulo Law Office where he specialized in Corporate, Energy, Commercial and Securities
Law.

From 2001 to 2004, he served as Undersecretary at the Philippine Department of Energy, overseeing
preparation of the country’s Philippine Energy Plans and creation of the agency’s Natural Gas Office.
He also supervised the country’s downstream oil sector which became a showcase in Asia. He was then
appointed Chairperson of the Philippine National Oil Company-Exploration Corp. where he served until
2005.

In 2007, Mr. de Dios was appointed President of Nido Petroleum Philippines and then in 2008 as
CEO/Managing Director of Nido Petroleum Pty, an ASX-listed oil exploration company. While based in
Perth, Western Australia, he led the company’s multiple drilling campaigns in the prolific Palawan basins.

From 2012 to 2020, he held multiple positions within the General Electric organization: Chairperson of the
Board and CEO of GE Philippines, Chairperson and COO of GE Oil & Gas Philippines, Inc., Chairperson
and President of GE Power and GE Lighting Philippines Inc., Branch Manager of General Electric
International Inc., and Managing Director of GE Government Affairs & Policy, Asia Pacific. As CEO of GE,
he led the growth of the company’s businesses in the Philippines which included Energy (Power, Renewable
Energy and Grid Solutions), Healthcare, Water and Aviation. He headed the Government Affairs & Policy
portfolio covering the Asia Pacific region, developing strategies for GE businesses, and executing on these
strategies with global GE teams and regional stakeholders.
SEC Form 17-A 130
Concurrent with his appointment as President and CEO of Manila Water, he also serves as the Chairperson
of Boracay Island Water Company, Inc., Clark Water Corporation, Manila Water Philippine Ventures, Inc.,
Manila Water Technical Ventures, Inc., and Manila Water Total Solutions Corp. He also serves as the Vice-
Chairperson of Laguna AAAWater Corporation, and is the President of Manila Water Foundation, Inc.

Mr. de Dios is passionate about education, having taught many years at the Ateneo School of Law, Lyceum
of the Philippines University and UP College of Business from which he graduated (BsBA,1986) and was
recognized as one of the Outstanding Alumni in 2014. He is also an active business mentor through the
Endeavor Network. He previously served as a member of the board of the American Chamber of Commerce
in the Philippines and is currently active in other non-profit organizations as board member/trustee.

DONATO C. ALMEDA
Filipino, 69 years old
Member of the Board of Directors and Chief Regulatory Officer since June 3, 2021

Mr. Almeda is also a Director of Bloomberry Resorts Corporation (BRC) and Bloomberry Resorts and Hotels,
Inc. He is also a Director of Bloomberry Cruise Terminals Inc., and President of Bloomberry Cultural
Foundation Inc. He is designated as Vice-Chairperson for Construction and Regulatory Affairs of
Bloomberry Resorts Corporation, Bloomberry Resorts and Hotels, Inc., and Sureste Properties, Inc. BRC is
a publicly listed company.

He served as President and CEO of Waterfront Philippines Inc. He also served as: President of Waterfront
Cebu City Hotel, Waterfront Mactan Hotel and Fort Ilocandia Hotel, Managing Director of Waterfront
Promotions Ltd. (a gaming company) and President of Insular Hotel in Davao.

Mr. Almeda also serves as the Chairperson of Manila Water Foundation, Inc. He earned his Industrial
Engineering Degree from De La Salle University.

ANTONINO T. AQUINO
Filipino, 76 years old
Member of the Board of Directors since April 24, 1998

Mr. Aquino first joined Manila Water as Group Director for Corporate Affairs and was later appointed
President and CEO in January 1999. He left Manila Water to take on the position of President of Ayala Land,
Inc. in April 2009 up to 2014, but remained a Director of the Company.

At present, Mr. Aquino also serves as a Director of Ayala Land, Inc. He is also a Director of the following
non-listed companies: AIA Philippines Life & General Insurance Co., Nuevocentro, Inc., Anvaya Beach and
Nature Club, and Manigo Amiga Academy, Inc.

He was named "Co-Management Man of the Year 2009" by the Management Association of the Philippines
for his leadership role in a very successful waterworks privatization and public-private sector partnership.
Recently he was conferred as Honorary Fellow by the Institute of Corporate Directors (ICD).

Mr. Aquino has been with the Ayala Group in various capacities for the past forty-two (42) years and has
held the position of Senior Managing Director in Ayala Corporation. He was President of the Ayala Property
Management Corporation from 1989 to 1999 and Senior Vice President of Ayala Land, Inc. from 1989 to
1998. He was also a Business Unit Manager at IBM Philippines, Inc. from 1968-1980. He is also a member
of the Multi Sectoral Advisory Board of the Philippine Army and the Multi Sector Governance Council of the
Armed Forces of the Philippines. Mr. Aquino is in the Advisory Board of Hero Foundation.

Mr. Aquino completed earned his bachelor’s degree in science, majoring in Management from Ateneo de
Manila University. He also completed academic units leading towards a master’s degree in Business
Management from the Ateneo Graduate School of Business.

SEC Form 17-A 131

ALBERTO M. DE LARRAZABAL
Filipino, 68 years old
Member of the Board of Directors since September 30, 2022

Mr. de Larrazabal is a Senior Managing Director, Chief Finance Officer, Chief Risk Officer, Chief
Sustainability Officer, and Finance Group Head of Ayala Corporation since 23 April 2021. He is a member
of the Ayala Corporation Management Committee and the Ayala Group Management Committee. He is also
a Director of publicly listed companies, namely Integrated Micro-Electronics, Inc. ENEX Energy Corp. and
Manila Water Company, Inc. He is the Chairperson, President and Chief Executive Officer of AC Ventures
Holdings Corp., Chairperson of Darong Agricultural and Development Corporation and LiveIt Investments
Limited; President and CEO of AYC Finance Limited, and Bestfull Holdings Limited; Vice Chairperson of
Lagdigan Land Corporation; President of Liontide Holdings, Inc. and of Philwater Holdings Company, Inc.;
CEO of Azalaea International Venture Partners Limited, Director of Ayala Hotels, Inc., AC Infrastructure
Holdings Corporation, AC Energy and Infrastructure Holdings, Inc., Ayala Healthcare Holdings, Inc., AC
Energy International, Inc., AC Industrial Technology Holdings, Inc., Affinity Express Holdings Limited, Ayala
Aviation Corporation, Asiacom Philippines, Inc., Ayala Group Legal, Michigan Holdings, Inc., A.C.S.T
Business Holdings, Inc., Merlin Solar Technologies, Inc., Pioneer Adhesives, Inc., BF Jade E-Services
Philippines, Inc., AC International Finance Limited, AYC Holdings Limited, AG Holdings Limited, Fine State
Group Limited, AG Region Pte. Ltd., Ayala International Holdings Limited, Ayala International Pte. Ltd.,
Strong Group Limited, Total Jade Group Limited, VIP Infrastructure Holdings Pte. Ltd., Purefoods
International Limited (“PFIL NA”) and AI North America, Inc.

Mr. de Larrazabal has over two decades of extensive experience as a senior executive in Finance, Business
Development, Treasury Operations, Joint Ventures, Mergers and Acquisitions, as well as Investment
Banking and Investor Relations.

Prior to joining Ayala Corporation, Mr. de Larrazabal served as Chief Commercial Officer and Chief Finance
Officer of Globe Telecom, a business unit of Ayala Corporation. Before he joined Globe Telecom, he held
positions such as Vice President and Chief Finance Officer of Marsman Drysdale Corporation, Vice
President and Head of the Consumer Sector of JP Morgan, Hong Kong, and Senior Vice President and
Chief Finance Officer of San Miguel Corporation. He holds a Bachelor of Science degree in Industrial
Management Engineering from De La Salle University.

SANDY A. ALIPIO
Filipino, 53 years old
Member of the Board of Directors since August 2, 2023

Mr. Alipio is a senior Accounting, Financial, Audit and Risk Management Executive with 30-year work
experience and was a member of the Senior Management Executive Team in International Container
Terminal Services Inc. (ICTSI). He was Senior Vice President - Global Financial Controller and Chief Risk
Officer in ICTSI before he was transferred to and was elected Treasurer and Chief Financial Officer of Prime
Infrastructure Capital, Inc. effective July 2023. He has assumed responsibilities of a director having sat in
the board of directors of many local and foreign subsidiaries and affiliates of ICTSI.

He earned his BS Business Administration and Accountancy Degree from the University of the Philippines.

SEC Form 17-A 132

KATRINA MARIA S. RAZON
Filipino, 32 years old
Member of the Board of Directors since November 3, 2023

An advocate of sustainability, Ms. Razon is the Chief Executive Officer and founder of KSR Ventures, a
company which invests on net positive companies. She also serves as a Director of Scratch First Co., Ltd.,
the creators of Wonderfruit and Wonderfruit Festival, which has an investment in Rimba Raya Biodiversity
Reserve, She is also a Director of subsidiaries of Prime Infrastructure Capital, Inc. which contribute to
sustainability goals: Solar Tanauan Corporation, Prime Integrated Waste Solutions, Inc., Prime Waste
Solutions Cebu, Inc., Prime Waste Solutions Cavite, Inc., and Prime Waste Solutions Pampanga, Inc.

Also an artist herself, Ms. Razon supports arts and music through creative and marketing strategies as
managing partner and creative director of CC: Concepts and public relations coordinator and event
coordinator of Solaire Resort & Casino.

Ms. Razon obtained her Bachelor’s Degree in Communication and Media Studies from Northeastern
University in 2014.

SHERISA P. NUESA
Filipino, 69 years old
Lead Independent Director since April 16, 2021
Member of the Board of Directors since April 15, 2013

Aside from serving as the Lead Independent Director of Manila Water, Ms. Nuesa also serves as the
Chairperson of the Audit Committee. She is also a member of the Board Risk Oversight Committee,
the Corporate Governance & Nomination Committee and the Sustainability Committee.

Ms. Nuesa also serves as a director of the following publicly listed companies: Far Eastern University,
AREIT Inc., Integrated Micro Electronics Inc. and Metro Retail Stores Group, Inc. She is also a director of
FERN Realty Corporation, and a Board adviser of Vicsal Development Corporation, both non-listed
companies.

Ms. Nuesa is currently a Board Adviser of the Justice Reform Initiative, a multi-organization group that she
co-founded and chaired for ten years, a Trustee of the Financial Executives Institute of the Philippines
(FINEX) Foundation, and a Vice-President /Trustee of NextGen Organization of Women Corporate Directors
(NOWCD).

Ms. Nuesa was a Managing Director of conglomerate Ayala Corporation where she served in various senior
management positions until December 2011. She has been sitting on corporate boards for over 15 years.
She became the Lead Independent Director of ACEN Corporation from September 2019 to April 2023, and
an Independent Director of Ayala Land Inc. from 2020 to 2023. She was the President and a Director of the
ALFM Mutual Funds Group from 2012 to 2021. She was a member of the Boards of Generika/Actimed
Group from 2017 to 2019, Psi Technologies, Inc. from 2010 until 2015, and the Blackhorse Emerging
Enterprises Fund (Singapore) from 2009 to 2014. She was the Chief Finance Officer and
Chief Administrative Officer of Integrated Micro-Electronics, Inc. from January 2009 to July 2010,
the Chief Finance Officer of Manila Water Company, Inc. from January 2000 to December 2008, Group
Controller and later Vice President for Commercial Centers of Ayala Land, Inc. from January 1989 to March
1999. She also served as a board member of various subsidiaries of Ayala Land Inc., and Integrated Micro-
Electronics. She was also a member of the board of trustees of Manila Water Foundation, Inc. She also
served as Trustee of the Institute of Corporate Directors (ICD) for nine years until June 2021, where she
held the positions of Treasurer and later, Vice Chairman.

Ms. Nuesa was awarded the ING-FINEX Chief Finance Officer of the Year in 2008 and an Outstanding
Alumna of the Far Eastern University in 2008. She earned her bachelor’s degree in commerce from
Far Eastern University where she graduated summa cum laude. She completed her MBA at the Ateneo-
Regis Graduate School of Business. She completed the Advanced Management Program (AMP) at Harvard
Business School, and the Financial Management Program of Stanford University. Ms. Nuesa is a Certified
Public Accountant and an accredited lecturer of both ICD and FINEX Academy.

SEC Form 17-A 133

CESAR A. BUENAVENTURA
Filipino, 94 years old
Independent Director since April 16, 2021

Aside from serving as an Independent Director of Manila Water, Mr. Buenaventura also serves as an
Independent Trustee of Manila Water Foundation, Inc.

Mr. Buenaventura also serves as an Independent Director of International Container Terminal Services, Inc.
(ICTSI) since February 12, 2019. On June 18, 2020, he was appointed as the member of Audit Committee,
Environment, Social and Governance Sub-Committee, Board Risk Oversight Committee, Related Party
Transactions Committee, and a Chairperson of the Corporate Governance Committee. He is the Director
and Chairperson of Mitsubishi Hitachi Power Systems Phils. Inc. and Buenaventura Echauz and Partners,
Inc., Director, and Vice-Chairperson of DMCI Holdings, Inc. (DMCI), Director of Semirara Mining and Power
Corp. (SCC), iPeople, Inc. (IPO), Petroenergy Resources Corp. PERC), Concepcion Industrial Corp. (CIC),
Pilipinas Shell Petroleum Corp. (SHLPH), DM Consunji Inc., and The Country Club. He is likewise a Trustee
and Chairperson of Pilipinas Shell Foundation Inc., and Trustee of Bloomberry Cultural Foundation and
ICTSI Foundation, Inc. He was formerly a Director of Philippine American Life Insurance Co., AG&P Co. of
Manila, Ayala Corporation, First Philippine Holdings Corp., Philippine Airlines, Philippine National Bank,
Benguet Corporation, Asian Bank, Ma. Cristina Chemical Industries, Maibarara Geothermal Inc., and Manila
International Airport Authority. ICTSI, DMCI, SMC, IPO, PERC, CIC, and SHLPH are publicly listed
companies.

His career started with Engineer David Consunji in 1951. Mr. Buenaventura then moved to the Shell Group
of Companies in 1956 where he served as the first Filipino CEO and Chairperson from 1975 until his
retirement in 1990. He served 2 more years in the capacity of Non-Executive Chairperson until 1992. He
was appointed member of the Monetary Board of Central Bank of the Philippines representing the private
sector from 1981 until 1987.

Mr. Buenaventura is the founding Chairperson of the Pilipinas Shell Foundation Inc. and founding member
of the Board of Trustees of the Makati Business Club. He was a member of the Board of Regents of the
University of the Philippines from 1987 to 1994, the Board of Trustees of the Asian Institute of Management
from 1994 to 2007, and President of Benigno Aquino S. Foundation from 1985-2010.

He is a recipient of many awards, among which are – Most Distinguished Alumnus, College of Engineering,
University of the Philippines in 1977, the Management Man of the year by the Management Association of
the Philippines in 1985, Outstanding Professional in Engineering by the Professional Regulatory
Commission in 1997, Outstanding Fulbrighter in the field of business by the Philippine Fulbright Association
in 2008, recipient of Centennial Award as one of the UP’s Top 100 Alumni Engineering Graduates.

In 1991, Mr. Buenaventura was made Honorary Officer of the Order of the British Empire (OBE) by Her
Majesty Queen Elizabeth II.

Mr. Buenaventura received his Bachelor of Science degree in Civil Engineering from the University of the
Philippines and his master’s degree in Civil Engineering majoring in Structures from Lehigh University
Bethlehem, Pennsylvania in 1954, as a Fulbright scholar.

OCTAVIO VICTOR R. ESPIRITU

Filipino, 80 years old
Independent Director since April 16, 2021

Mr. Espiritu holds the following positions in the following public-listed companies: Independent Director of
Bloomberry Resorts Corporation (BRC), and Director of the Bank of the Philippine Islands (BPI).

He is also a Director of Philippine Stratbase Consultancy, Inc., Pueblo de Oro Golf and Country Club and
The Country Club, Inc. He is also currently the Chairperson of GANESP Ventures, Inc. and MAROV Holding
Company, Inc., and a trustee board member of the Carlos P. Romulo Foundation.

SEC Form 17-A 134

Formerly, Mr. Espiritu was a three-term former President of the Bankers Association of the Philippines, a
former President, and Chief Executive Officer (CEO) of Far East Bank and Trust Company, and Chairperson
of the Board of Trustees of the Ateneo de Manila University for fourteen (14) years.

Mr. Espiritu received his primary, secondary, and college education from the Ateneo de Manila University
where he obtained his AB Economics degree in 1963. In 1966, at the age of 22, he received his master’s
degree in Economics from Georgetown University in Washington DC, USA.

ERIC RAMON O. RECTO

Filipino, 60 years old
Independent Directors since April 16, 2021

Mr. Recto has served as the Chairperson of the Philippine Bank of Communications since May 2012.
At present he holds the following positions in public listed companies: Independent Director of Aboitiz Power
Corporation, Independent Director of PH Resorts Group Holdings, Inc., and Director of DITO CME Holdings
Corp. (formerly ISM Communications Corporation).

He is the Chairperson and President of Bedfordbury Development Corporation, Chairman and CEO of
Alphaland Corporation, Chairman and CEO of Atok-Big Wedge Co., Inc., President of Q-Tech Alliance
Holdings, Inc., the owner of Premium Wine Exchange, Inc, Vice Chairman and Lead Independent Director
in Aboitiz Power. He also serves as an Independent Director of Waterfront Cebu City Casino Hotel, Inc.,
and Davao Insular Hotel Company, Inc. He was recently appointed as Senior Advisor of Stonepeak
Infrastructure Partners in the US, and is a Director of Miescor Infrastructure Development Corp.

Mr. Recto served as the Chairperson and President of DITO CME Holdings, Corp. from April 2005 until
January 2020. He was also a Director of Petron Corporation from February 2014 until May 2018 and served
as its President from October 2008 to February 2014. He was a Director of San Miguel Corporation from
May 2010 until June 2014. He was the Vice-Chairperson of Philweb Corporation from July 2007 until July
2014 and served as its President from April 2005 until July 2007. He was a Director of Manila Electric
Company from June 2010 until December 2013. From January 2010 until December 2013, he served as
the President of Top Frontier Investment Holdings.

He served as Vice-Chairperson and Director of the Philippine Bank of Communications from July 2011 until
May 2012. From May 2005 until March 15, 2010, he was an Independent Director and Chairperson of the
Executive Committee of Philippine National Bank. During this period, he was also the Chairperson of PNB
Securities, Inc. He was a Director of Philex Mining Corporation from August 2008 to November 2009. He
served as a Director and member of the Executive Committee of Maynilad Water Services, Inc. from March
2007 until May 2009. From June 2006 to May 2008, he was an Independent Director of Metro Pacific
Investment Corporation. From March 2000 to August 2002, he served as Senior Vice-President and Chief
Financial Officer of Alaska Milk Corporation. From March 1994 to February 2000, he served as Senior Vice-
President and Chief Financial Officer of Belle Corporation.

Mr. Recto also served as an Undersecretary of the Department of Finance from September 2002 until March
2005 and was in charge of handling both the International Finance Group and the Privatization Office.

Mr. Recto graduated with a bachelor’s degree in Industrial Engineering from the University of the Philippines.
He earned his master’s degree in Business Administration from the Johnson School, Cornell University.

SEC Form 17-A 135

KARL KENDRICK T. CHUA
Filipino, 45 years old
Nominated for election to the Board of Directors

Mr. Karl Kendrick T. Chua is currently the Managing Director for Data Science and Artificial Intelligence in
Ayala Corporation.

He was a former Secretary of the National Economic and Development Authority and Undersecretary for
Strategy, Economics, and Results at the Department of Finance. He is a director of the Bank of the Philippine
Islands, BPI Direct Banko, and AC Ventures, and is an Independent Director of D&L Industries, Inc, and
Golden ABC, Inc. He is also a board adviser in LH Paragon, Inc.

He has extensive experience in the areas of economic and fiscal policy, statistical development, national
identification, labor and social protection policy, poverty analysis, and digital transformation, among others.
He was also an adviser for the World Bank’s World Development Report and was a member of the Selection
Committee of the Asian Development Bank and International Economic Association Innovative Policy
Research Award.

Mr. Chua was a senior official in the Government of the Philippines for six years. As Secretary of
Socioeconomic Planning and Chief Economist of the country, he provided strategic leadership on economic
policy during the Covid-19 pandemic and the further liberalization of key sectors of the economy. He also
oversaw the implementation of the national ID program.

As Undersecretary in the Department of Finance, he led the technical team in the passage of the
Comprehensive Tax Reform Program and the Rice Tariffication Law.

Prior to joining the government, he was with the World Bank for 12 years and was the senior economist for
the Philippines.

Mr. Chua graduated from the Ateneo De Manila University in 2000 with a degree in B.S. Management
Engineering. He earned his M.A. Economics (2003) and Ph.D. Economics (2011) from the University of the
Philippines, and recently studied data science at the Asian Institute of Management.

In 2018, he was awarded the Ten Outstanding Young Men of the Philippines (TOYM) for economic
development.

Nominees for Election to the Board of Directors

The following individuals have been nominated for election to the Board of Directors:

Enrique K. Razon, Jr. Karl Kendrick T. Chua

Jose Victor Emmanuel A. de Dios Sherisa P. Nuesa
Donato C. Almeda Cesar A. Buenaventura
Alberto M. De Larrazabal Octavio Victor R. Espiritu
Katrina Maria S. Razon Eric Ramon O. Recto

SEC Form 17-A 136

Executive Officers

Name Position
Enrique K. Razon, Jr. Chairperson of the Board
Jose Victor Emmanuel A. de Dios President and Chief Executive Officer
Donato C. Almeda Chief Regulatory Officer
Roberto Jose R. Locsin Chief Operating Officer for International Business
concurrent Chief Administrative Officer
Gigi Iluminada T. Miguel Chief Finance Officer and Treasurer
Amabelle C. Asuncion Chief Legal Officer and Chief Compliance Officer
Arnold Jether A. Mortera Chief Operating Officer, East Zone
Melvin John M. Tan Chief Operating Officer, Non-East Zone Philippines
Ana Mari B. Bentilanon Group Controller
Shoebe Hazel B. Caong Group Director, East Zone Business Operations
Joemar B. Emboltorio Group Director, East Zone Operations
Evangeline M. Clemente Group Director for Strategic Asset Management
Liwayway T. Sevalla Chief Information Officer, Data Protection Officer, and
Group Director for Corporate Information and Technology
Janine T. Carreon Group Director for Corporate Human Resources
Nestor Eric T. Sevilla Group Director, Corporate Communications
Jhoana R. Tamayor Group Director, Corporate Procurement
Valerie R. Tagana Group Director, Supply Chain Management
Michael M. Mayo Group Director, Engineering
Maidy Lynne B. Quinto Regional Operations Group Director for Luzon
Silverio Benny J. Tan Corporate Secretary
Ninez C. Maningat Assistant Corporate Secretary
Mailene M. Cabral Chief Audit Executive and Chief Risk Officer

ENRIQUE K. RAZON, JR.

Please see profile of Mr. Razon under the profiles of the members of the Board of Directors.

JOSE VICTOR EMMANUEL A. DE DIOS

Please see profile of Mr. Razon under the profiles of the members of the Board of Directors.

DONATO C. ALMEDA
Please see profile of Mr. Razon under the profiles of the members of the Board of Directors.

ROBERTO JOSE R. LOCSIN

Filipino, 49 years old
Chief Operating Officer for International Business
concurrent Chief Administrative Officer

Mr. Locsin serves as the Chief Operating Officer for International Business and the Chief Administrative
Officer (CAO) of Manila Water Company. Prior to his role at Manila Water Company, he was the Chief
Executive Officer of Philippine Growth Terminals for International Container Terminal Services, Inc. (ICTSI)
and led the teams in Subic and Cagayan de Oro ports.

Prior to joining ICTSI, he was Vice President for the Strategic Services group at a global Biotechnology and
Pharmaceutical marketing consultancy. In addition, he has had several years of management and strategy
consulting experience in the financial services, life sciences, telecoms, media and entertainment sectors
with Capgemini and Ernst & Young Advisory in New York City. His areas of expertise include strategy
development and execution, cost containment and reduction programs, business transformation, and
mergers and acquisitions.

SEC Form 17-A 137

Mr. Locsin sits on the Board of Directors of Manila Water Philippine Ventures, Inc. and is a trustee of Manila
Water Foundation, Inc.

Mr. Locsin also serves as a director of the following subsidiaries of the Company that are registered in
Singapore: Manila Water Asia Pacific Pte. Ltd., Kenh Dong Water Holdings Pte. Ltd., Manila South East
Asia Water Holdings Pte. Ltd., Manila Water South Asia Holdings Pte. Ltd., and Thu Duc Water Holdings
Pte. Ltd. He is the representative to the Board of Eastern Water Resources Development and Management
Public Company Limited (East Water).

Mr. Locsin earned his MBA in General Management and Project Finance from the Boston College’s Arthur
D. Little School of Management in Chestnut Hill, Massachusetts, and his Bachelor of Arts in Behavioral
Sciences from De La Salle University Taft, Manila.

GIGI ILUMINADA T. MIGUEL

Filipino, 55 years old
Chief Finance Officer and Treasurer

Ms. Miguel also serves as a Director of Boracay Island Water Company, Inc., Clark Water Corporation,
Laguna AAAWater Corporation, Manila Water Philippine Ventures, Inc., Manila Water Technical
Ventures, Inc., Manila Water Total Solutions Corp., and Manila Water Asia Pacific Pte. Ltd. She is a Trustee
and serves as the Treasurer of Manila Water Foundation, Inc.

Prior to joining Manila Water Company, Inc., Ms. Miguel was the Vice President and Treasurer of
International Container Terminal Services, Inc. (ICTSI), Director of Pakistan International Container
Terminal, Director of Manila North Harbour Port, Inc., and Director and Treasurer of Falconer Aircraft
Management. She has been with ICTSI for thirteen years and has been part of its massive geographical
expansion just as the world was beginning to emerge out of the great recession of 2007 – 2009 and build a
global portfolio of 34 terminal in 20 countries.

In 2008, she served as the Liability and Capital Director where she ensured a value-accretive capital
structure that supported transformational acquisitions and greenfield construction projects. Through her
years with ICTSI, Ms. Miguel provided solid leadership and played a significant role in enabling its growth
as a truly Filipino global company.

Ms. Miguel was with China Banking Corporation prior to joining ICTSI in 2008 and was in the wholesale
banking space for seventeen years. She graduated with a degree in Applied Mathematics from the
University of the Philippines in 1990, and she earned her master’s degree in Business Administration from
the Ateneo Graduate School of Business in 2000.

AMABELLE C. ASUNCION
Filipino, 47 years old
Chief Legal Officer and Chief Compliance Officer

Atty. Amabelle C. Asuncion has over 20 years of experience as a law practitioner in both the private and
public sectors. Her field of expertise covers corporate and commercial law, regulatory & compliance, and
government relations.

She is a former commissioner of the Philippine Competition Commission (PCC), a quasi-judicial agency
mandated to enforce the Philippine Competition Acts across all sectors. As commissioner, she performed
adjudicative and rule-making functions, undertook overall management of the PCC, and acted as official
representative of the Commission in local and international fora. At the end of her term, she co-authored a
book, “The Philippine Competition Act Annotated” (2021ed).

SEC Form 17-A 138

Her other experiences in the public sector include serving as legislative officer for the Office of the Senate
Majority Leader and Commission on Appointments and as Executive Director for the Senate Oversight
Committee on Climate Change. She is also a member of the faculty of the UP College of Law.

In the private sector, Atty. Asuncion joined the SyCip Salazar Hernandez & Gatmaitan Law Office before
eventually moving on to leadership roles in various organizations. She was law and policy reform consultant
at the Asian Development Bank, legislative advisor at the European Chamber of Commerce, legal counsel
at BDO Unibank and Director for Legal and Regulatory Affairs at Bloomberry Resorts and Hotels, Inc. She
then joined the Divina Law Office as a partner.

Atty. Asuncion graduated from the University of the Philippines in 1996 with a BA in English Studies, magna
cum laude, and went on to complete her Bachelor of Laws from the same institution in 2001. She went on
to the Georgetown University Law Center in Washington, D.C., where she obtained her Master of Laws in
International Legal Studies, graduating with distinction, in 2007. She was admitted to the Philippine Bar in
2002 and the New York Bar in 2008.

ARNOLD JETHER A. MORTERA

Filipino, 62 years old
Chief Operating Officer, East Zone

Mr. Mortera also serves as a Director of Clark Water Corporation, Laguna AAAWater Corporation, Manila
Water Philippine Ventures, Inc., Manila Water Technical entures, Inc., and Manila Water Total Solutions
Corp.

Mr. Mortera is one of Manila Water’s seasoned talents with deep technical expertise in all aspects of
Operations from headworks, network management, production planning, treatment, and distribution. Mr.
Mortera has a wealth of experience in the operations and maintenance of water systems, non-revenue water
management, business development, project management, asset management, and business continuity
planning. He started his career with the MWSS in 1983 as a Junior Engineer, specifically tasked to manage
the reduction of non-revenue water and various operational roles in water facilities.

When MWSS was privatized in 1997, Mr. Mortera joined Manila Water as a Senior Engineer for Network
Services. He became the Division Manager for Operations Management (Local and International) in 2009-
2011, heading the Operation of Water Supply and Wastewater Departments. He was responsible for the
success of the Non-Revenue Water Reduction Performance-based contract with SAWACO in Ho Chi Minh
City, Vietnam. He also served as consultant for strategic planning and development of the master plan for
Boracay Water and Laguna Water. Mr. Mortera was also part of Manila Water’s international and local new
business development initiatives as Chief Technical Officer from 2011-2015. He later became the New
Business Development Head from 2015-2017 and Regional Business Cluster Head. In 2018, he led the
Wastewater Operations as its Division Head.

He served as Group Director for Operations from 2019 to November 2022. He was responsible for ensuring
the continuity and reliability of water and wastewater services, including water source management,
treatment, and efficient distribution to customers in the East Zone. He also served as a director of Manila
Water Philippine Ventures; Inc. Mr. Mortera was appointed as the Chief Operating Officer for East Zone in
December 2022. He is a Corporate Member of Manila Water Foundation.

Mr. Mortera earned his degree in Civil Engineering from the Mapua Institute of Technology. He has
completed academic units for his Master’s in Management at the Philippine Christian University Manila.
He also completed the Management Development Program at the Asian Institute of Management.

SEC Form 17-A 139

MELVIN JOHN M. TAN
Filipino, 43 years old
Chief Operating Officer, Non-East Zone Philippines

Melvin John M. Tan is the Chief Operating Officer for Non-East Zone - Philippines of the Company. He is
concurrently the President of WAWAJVCo, and Market Sector Lead for Water of MWC, Prime Metroline
Infrastructure Holdings Corporation (Prime Infra), the core infrastructure arm of the Razon Group.

Mr. Tan oversees Manila Water’s businesses outside the East Zone through its wholly owned subsidiary,
Manila Water Philippine Ventures, Inc. (MWPV) where he serves as the President and Chief Executive
Officer. He serves as the Chairperson and Director of the following Philippine companies: Aqua Centro
MWPV Corp., Bulacan MWPV Development Corp. (Bulacan Aqua Estates), Bulakan Water Company, Inc.,
Calasiao Water Company, Inc., Cebu Manila Water Development, Inc. (Cebu Water), Ecowater MWPV
Corp., Filipinas Water Holdings Corp., Manila Water Technical Ventures, Inc., Metro Ilagan Water Company,
Inc., MWPV South Luzon Water Corp., North Luzon Water Company, Inc., Obando Water Company, Inc.,
and Zamboanga Water Company, Inc.

He likewise sits on the Board of the following Philippine companies as its President and Director: Boracay
Island Water Company, Inc. (Boracay Water), Clark Water Corporation (Clark Water), and Manila Water
Total Solutions Corp.

Fresh out of college, Mr. Tan joined Manila Water’s cadetship training program (management trainee) in
2002 where he held various roles across the enterprise i.e., Territory Manager, Operations Manager –
Bonifacio Water Corporation, General Manager and COO – Boracay Island Water Company and Laguna
AAAWater Corporation. He was also Head of Project Development in Solar Philippines (2018) prior to joining
Prime Infra. He obtained his Economics and MBA degrees from the University of the Philippines in 2002
and 2008 respectively; Juris Doctor units from the Ateneo Law School, and short development programs
from the United States and Europe.

ANA MARI B. BENTILANON

Filipino, 51 years old
Group Controller

Ana Mari B. Bentilanon is a US and Philippine Certified Public Accountant (CPA) with over 27 years of both
local and international work experience. Prior to joining Manila Water, she served as the Country Finance
Controller at CBRE Philippines (a global real estate services company). She also worked in New York, USA
holding various positions including the VP-Assistant Controller at WP Carey, Inc. (a publicly listed REIT),
Accounting Director at National Grid USA (a global energy company) and Audit Senior Manager for the
Financial Services Group at Grant Thornton LLP (a global audit, tax, and advisory firm). Before moving to
New York, she started her career as an external auditor at SGV & Co and later joined Globe Telecom, Inc.
where she served as a Finance Director. Ms. Bentilanon has extensive experience in controllership,
accounting, financial reporting, corporate finance and external audit in various industries such as real estate,
financial services, power/energy, and telecoms, among others.

Ms. Bentilanon received a bachelor's degree in Commerce major in Accounting from the University of Santo
Tomas, graduating magna cum laude. She passed the CPA licensure exam in 1993.

SEC Form 17-A 140

SHOEBE HAZEL B. CAONG
Filipino, 43 years old
Group Director, East Zone Business Operations

Ms. Caong joined Manila Water through its Cadetship Training Program and started her career in the East
Zone Business Operations (EZBO) Group. In 2009, she was assigned to become part of the Leadership
Transition Team that laid the groundwork for the start-up of Laguna AAAWater Corporation (Laguna Water).
She was designated as the Business Operations Manager to set-up the Business Operations Team and
spearhead the negotiations with surrounding subdivisions and open communities to help grow and expand
the service area. She returned to the East Zone Operations in 2011 as the Area Business Manager for
Cubao. She was later assigned as Area Business Manager for Pasig.

Ms. Caong was part of Manila Water’s General Management Schooling Program. From 2017 until mid-2022,
she served as the General Manager and Chief Operating Officer of Laguna Water. During her stint, she led
the turn-around from a ₱333 Million loss in 2017 to a ₱308 Million profit in 2018, and a ₱406 Million profit in
2019.

Ms. Caong is a licensed Chemical Engineer and graduated with Bachelor of Science degree from the
University of the Philippines. She completed, with distinction, the Management Development Program from
the Asian Institute of Management (AIM), and the Advanced Management Development Program. She has
represented Manila Water as a resource speaker in local and international conferences such as the
Philippine Water Works Association (PWWA) International Conference and Exhibition, Toilet Board
Coalition Forum, Toilet Board Coalition Board of Directors Meeting, Fecal Sludge Management Forum and
Executive Forum for Enhancing Sustainability of Urban Water Service in Asian Region.

JOEMAR B. EMBOLTORIO
Filipino, 47 years old
Group Director, East Zone Operations

Mr. Emboltorio joined Manila Water through the Cadetship Training Program. He also went through the
Company’s Territory Management School where he graduated as class valedictorian. Since then, he has
assumed various roles in the East Zone Operations and Operations Group of the Company. He was Head
of the Water Supply Operations Division, Section Head of the Production Planning Team for Water Supply,
Distribution Planning Manager for Water Supply, and Territory Business Manager. Mr. Emboltorio was
instrumental in the implementation of major changes and transformations in the Water Supply Operations
of the Company. He spearheaded the development and design of many inhouse based water supply
innovations that enhanced reliability, boosted cost savings, and ensured compliance on water service
availability to customers. In 2012, he successfully transformed the previously centralized pumping
operations into the current grid set-up to become more responsive and effective in bringing down operational
expenses. In 2016, he led the team to transition to fully automated pumping operations which allowed more
movements across facilities, more analytics, and interaction with key stakeholders to achieve optimal
operational settings. He also took on the challenge of integrating the Network Operations from East Zone
Business Operations into Water Supply Operations, which eventually transformed into the Distribution Grid
set-up that synergized pumping and network operations.

Under his leadership, Mr. Emboltorio oversaw the full recovery and normalization of water supply during the
water crisis in 2019. He ensured that water supply was sustained in 2020 despite operational limitations and
health and safety concerns brough about by the COVID-19 pandemic.

Mr. Emboltorio is currently a member of the Executive Committee of the Common Purpose Facilities (CPF),
the group tasked to operate and maintain the facilities owned and jointly managed by the Metropolitan
Waterworks and Sewerage System (MWSS), Maynilad Water Services, Inc., and Manila Water in the Angat-
Ipo-La Mesa Water System. He served as Vice-Chairman of the CPF from 2017 to 2022.

Mr. Emboltorio graduated from the University of the Philippines and ranked 8th in the 1999 Civil Engineering
Licensure Examination.

SEC Form 17-A 141

EVANGELINE M. CLEMENTE
Filipino, 48 years old
Group Director, Corporate Strategic Asset Management

Ms. Clemente was a member of the pioneer batch of the Company’s Cadetship Program. She has over 20
years of significant experience in the areas of master planning, program, management, project and business
development, operations, technical services, innovations, and organizational transformation. She has a solid
track record of successful management with a reputation for delivering objectives and targets by providing
strategic directions from diverse perspectives through positive leadership.

As Group Director for Strategic Asset Management, she develops the water and wastewater master plans
encompassing all existing and future assets of the East Zone, directly supporting short- and long-term
business objectives, service obligations and customer engagement.

Previously, she also headed Supply Chain Management leading the strategic procurement of all
infrastructure, projects, commodities, and services for Manila Water Operations, inclusive of managing
vendors, bidding, award, inventories, and warehouses. She was also Officer-in-Charge (OIC) of Manila
Water Total Solutions, Corp., and built new growth pipelines for future core businesses. She also served as
Head of Product Innovation and Development prior to her appointment as OIC. She also led the Productivity
and Growth Team which conceptualized and implemented transformation programs and projects geared
towards the development of a new operating model for Manila Water Operations. She served as Head of
the Technical Services Division from 2013 until 2016, and managed the operations, optimization and
solutioning spanning energy utilization and contracting, system monitoring and analytics, laboratory services
and innovations for all operational water and wastewater facilities. During her stint as Head of Laboratory
Services, she increased operating efficiency, profit, and also launched water quality forensics, water quality
database and incident management for proactive responses on water quality from dams to plants to
distribution systems including byproducts disposal. She also served as Program Manager from 2008 to
2011, where she developed and managed the implementation of about US$120 million worth of wastewater
projects under the World Bank-funded Manila Third Sewerage Project (MTSP).

Ms. Clemente is a licensed chemist. She earned her degree in Chemistry from the University of the
Philippines. She is also a Lean Six Sigma and PMBOK (Project Management Body of Knowledge)
practitioner, and a certified Scrum Master. She is also a member of the International Water Association,
a Certified Professional in Purchasing (CPP) and a Certified Professional in Customer Service & Logistics
(CPCSL).

LIWAYWAY T. SEVALLA
Filipino, 59 years old
Chief Information Officer, Data Protection Officer, and
Group Director for Corporate Information Technology

Ms. Sevalla has over 30 years IT Experience, spanning several industries such as Telecommunications,
Investment Banking, Technology and Offshore IT Shared Services, and Water Utility.

She joined Manila Water in October 2016, responsible for all functions of Information Technology. She is
also the enterprise Data Protection Officer (DPO). Ms. Sevalla is responsible for Corporate IT, and all
Business Units IT.

Prior to Manila Water, Ms. Sevalla was with Macquarie Investment Bank as Associate Director from 2011
to 2016, where she was responsible for the Delivery of offshore IT functions for the Macquarie Asset
Management (MAM) and Corporate Asset Financing (CAF) business units, out of the Manila Offshore
Services. She also pioneered the setup of the Philippine Delivery Center of the Hongkong-based PCCW
Solutions.

SEC Form 17-A 142

Ms. Sevalla also spent 16 years in the telecommunications industry, having worked in various companies
such as Globe Telecom, Inc. where she last held the position of Head of Delivery and Integration, and Bayan
Telecommunications as Assistant Vice President (AVP)/ Head of IT Business Applications.

Ms. Sevalla graduated cum laude from the University of the Philippines Visayas with a degree in Bachelor
of Science in Business Administration. Ms. Sevalla completed Computer Programming/Systems Design at
the National Computer Institute, and Management Development Program at Asian Institute of Management.
Ms. Sevalla is a certified Project Management Professional, and Scrum Master.

JANINE T. CARREON
Filipino, 52 years old
Group Director, Corporate Human Resources

Ms. Carreon is an HR leader with strong line management experience in HR, sales, and operations. She
started her career in recruitment in a manufacturing company and later, moved to training and organization
development at Mercury Group of Companies supporting the Mercury Drug business unit. She spent 15
years of her career at Avon Cosmetics, Inc. where she handled various roles of increasing responsibilities
in learning and development, change management, leadership roles in sales and business operations, and
a global assignment in Avon New York, USA.

She joined Manila Water Company in 2009 where she further honed her HR career, impacting the
company’s HR strategy in the areas of talent management, leadership development, strategic staffing,
succession management, change management, organizational design and development, and labor
relations.

Ms. Carreon earned her bachelor’s degree in Psychology at the University of the Philippines, Diliman in
1992. She completed her master’s degree in Industrial Relations, major in Human Resource Management
from UP School of Labor and Industrial Relations (SOLAIR) in 2000. She earned her certificate course in
Strategic HR Leadership from Cornell University in 2016 and she is a SHRM-SCP
(http://bcert.me/sapbmrrgt) and AGILE HR certified practitioner.

NESTOR ERIC T. SEVILLA

Filipino, 60 years old
Group Director, Corporate Communication Affairs

Mr. Sevilla is an Accredited Practitioner in Public Relations (APR) of the Public Relations Society of the
Philippines and has 16 years of expertise in corporate communications and public relations, institutional and
marketing campaigns for advocacies, employee communications and engagement, crisis communication
management and media relations, branding and reputation management, and customer service
management.

Mr. Sevilla has served as the official spokesperson of Manila Water for the past 16 years. He consistently
managed media issues related to rate adjustments and other day-to-day crises that may affect customer
experience and the reputation of Manila Water. During the 2019 water shortage, he addressed and managed
issues through extensive media relations, engagement, and public information.

As Group Head of the Corporate Communications Affairs Group, he designed the weekly livestream of Balita
on Wednesdays as a vital employee tool for communication and engagement especially during the COVID-
19 pandemic. He developed an in-house production team to conceptualize and produce virtual and physical
campaigns and collaterals. He also built an in-house social media team to manage the different social media
platforms of Manila Water.

SEC Form 17-A 143

Mr. Sevilla was also responsible for developing various communication programs and tools that won more
than 30 awards from the Public Relations Society of the Philippines and the International Association of
Business Communications.

He is a Corporate Member of the Manila Water Foundation. Mr. Sevilla graduated from Mapua Institute of
Technology with a bachelor’s degree in Geology. He also completed the Management Development
Program of the Asian Institute of Management.

JHOANA R. TAMAYOR
Filipino, 39 years old
Group Director, Corporate Procurement

Ms. Tamayor joined Manila Water through the Cadetship Training Program in 2008 and was assigned as a
Territory Manager in the Pasig Business Area. She also served as Program Manager from 2010 to 2014,
where she developed and managed the implementation of one of the major wastewater treatment plants in
the Philippines.

Ms. Tamayor started her career in Procurement in 2014 when she was appointed as Section Head for
Wastewater Procurement Headline. She facilitated the awarding of multi-billion infrastructure contracts,
including World Bank assisted contracts, secured through national and international competitive bidding. In
2021, she led the transformation of the Corporate Procurement Group by implementing a category-led
strategic model.

Ms. Tamayor was appointed as OIC-Group Director for Corporate Procurement in 2023. Under her
leadership, the Company procured PhP6.74 Billion worth of contracts in 2022 with PhP1.1 Billion avoided
cost through the process of bidding and negotiation. Her team also closed long-term framework contracts
with projected cost avoidance of PhP1.3 Billion.

Ms. Tamayor earned her bachelor’s degree in chemical engineering at Adamson University in 2006 and
completed her Master of Business Administration from University of the Philippines, Diliman in 2017. She
also completed the Executive Leadership Certificate Program from Cornell University in 2022.

VALERIE R. TAGANA
Filipino, 52 years old
Group Director, Supply Chain Management

Ms. Tagana has more than 28 years of experience in regional supply chain management, operations, project
management, and customer service.

Ms. Tagana finished her BS Accountancy and Bachelor of Arts major in Psychology degrees from De La
Salle University. She is a Certified Public Accountant (CPA) and began her professional career as an
External Auditor at SGV and Co.

MICHAEL M. MAYO
Filipino, 54 years old
Group Director, Engineering

Mr. Mayo has held various positions in both local and multi-national companies in the various disciplines of
Manufacturing and Engineering: Production, Operation and Quality Management, Capital Raising and
Budget Management, Plant Installation /Commissioning, Maintenance, as well as Health, Safety and
Environment (HSE). He will lead the newly formed Engineering Group of the Manila Water Company
effective December 1, 2023.

SEC Form 17-A 144

He finished his BS Mechanical Engineering degree from the University of the Philippines and placed third
in the Mechanical Engineering Board Exam. He started his career in Unilever, where he spent 18 years
honing his Engineering expertise in both local and international businesses of the company. Locally, he
handled SAP R6 Country Process Lead for Manufacturing, Manufacturing Director for Home, Personal Care
and Foods, and Manufacturing Manager for NSD Bars. He was also assigned in Unilever United Kingdom
as Deo-Aerosol Technologist and Unilever Vietnam as Engineering Manager.

He joined Ramcar Technologies as Vice President for Engineering and Maintenance in 2012. He led the
overall Engineering function, supporting Ramcar’s plants within the Sta. Maria Industrial Plant. He
concurrently handled the overall Maintenance of the battery production plant, poultry operations and food
manufacturing facilities. Mickey later moved to D&L Industries’ Batangas expansion area where he was a
General Manufacturing Director. He led the set up of three sites and was involved in commissioning and
certifying the individual lines and utilities, complying with legal & regulatory requirements and accreditations,
and hiring & developing talents.

MAIDY LYNNE B. QUINTO

Filipino, 47 years old
Group Director, Regional Operations for Luzon

Ms. Quinto has been with Manila Water for more than 20 years and has held various appointments lending
a wealth of experience in project management, business operations, strategic asset planning and general
management. She currently serves as the Group Director for Subsidiary Operations in Manila Water
Philippine Ventures.

She currently serves as a director of Boracay Island Water Company, Inc., Calbayog Water Company, Clark
Water Corporation, Davao del Norte Water Infrastructure Company, Inc., Laguna AAAWater Corporation,
Leyte Water Company, Inc., Manila Water Consortium, Inc., Manila Water Philippine Ventures, Inc., and
Tagum Water Company, Inc.,

She is also the President of Aqua Centro MWPV Corp., Bulacan MWPV Development Corp., Bulakan Water
Company, Inc., Calasiao Water Company, Inc., Cebu Manila Water Development, Inc., Ecowater MWPV
Corp., Filipinas Water Holdings Corp., Manila Water Technical Ventures, Inc., Metro Ilagan Water Company,
Inc., MWPV South Luzon Water Corp., North Luzon Water Company, Inc., Obando Water Company, Inc.,
and Zamboanga Water Company, Inc. She serves as the Vice-President of Davao del Norte Water
Infrastructure Company, Inc.,

Ms. Quinto previously held the roles of Group Director for Corporate Project Management, as well as
General Manager (GM)/Chief Operating Officer concurrent North Luzon Regional Business Cluster Head
for Clark Water Corporation, where she played an important role in the growth of the organization in terms
of financials, service coverage and business expansions.

She also held the Strategic Asset Planning Department Head role where she developed Capital
Expenditures program strategies to deliver business and regulatory commitment, and Area Business
Manager role where she managed the business operations of the business area composed of at least
130,000 water service connections from Marikina City, and San Mateo and Rodriguez in Rizal province.

In 1999, she first joined Manila Water as part of the first batch of the Cadetship Training Program. Her first
role was Territory Manager in San Juan-Mandaluyong Business Area and then she became a Senior
Territory Manager in year 2001. She also acted as a Project Manager in 2005 before assuming her role as
Strategic Asset Planning Department Head in 2011.

Ms. Quinto was also awarded the Manila Water Grand Huwarang Manggagawa Award in 2001. Across the
years, she has assumed various roles of increasing responsibilities across the company and has
consistently shown excellent performance and dedication in her craft. Among her key contributions include
leading the development and implementation of the framework agreements among engineering consortia.

SEC Form 17-A 145

Ms. Quinto holds two university degrees from Mapua Institute of Technology, Manila. She completed a
graduate-level Bachelor of Science degree in Civil Engineering and bachelor’s degree in Environmental and
Sanitary Engineering in 1998. She is also a licensed Civil Engineer and Sanitary Engineer.

SILVERIO BENNY J. TAN

Filipino, 67 years old
Corporate Secretary

Atty. Tan is a retired partner, former managing partner, and now Of Counsel of the law firm of Picazo Buyco
Tan Fider & Santos.

He is a Director and Corporate Secretary of Razon & Co. Inc., Prime Strategic Holdings Inc., Bravo
International Port Holdings Inc., Alpha International Port Holdings Inc., Eiffle House Inc., Negros Electric &
Power Corp., Trident Water Company Holdings, Inc., and Negros Perfect Circles Food Corp.

He is also a Director of the following corporations: MORE Electric and Power Corporation, Celestial
Corporation, Skywide Assets Ltd., and Dress Line Holdings Inc. and its subsidiaries.

He is the Corporate Secretary of several corporations including: Bloomberry Resorts Corporation, a publicly
listed company, and its subsidiaries Sureste Properties Inc., Bloomberry Resorts and Hotels Inc., and
Bloomberry Cruise Terminals Inc., Apex Mining Company Inc., a publicly listed company, and its
subsidiaries Itogon Suyoc Resources Inc. and Monte Oro Resources and Energy Inc., Prime Infrastructure
Capital Inc., Lakeland Village Holdings Inc., Devoncourt Estates Inc., Pilipinas Golf Tournaments, Inc.,
Bloomberry Cultural Foundation Inc., Fremont Holdings Inc. and its subsidiaries, and several subsidiaries
of Razon & Co. Inc. and Prime Strategic Holdings Inc.

He is the Assistant Corporate Secretary of International Container Terminal Services, Inc., a publicly listed
company, and is a trustee of the University of the Philippines Visayas Foundation Inc.

Atty. Tan holds a Bachelor of Laws (Cum Laude) from the University of the Philippines College of Law and
a Bachelor of Arts in Political Science (Cum Laude) from the University of the Philippines College Iloilo. Atty.
Tan placed third in the 1982 Philippine Bar exams.

NINEZ C. MANINGAT
Filipino, 42 years old
Assistant Corporate Secretary

Atty. Maningat is a partner in the law firm Picazo Buyco Tan Fider & Santos. She joined the Firm in 2006.

Her corporate legal work experience includes giving legal counseling on Philippine law and jurisprudence,
including advice and assistance on the appropriate transaction structure, and crafting of documents, in
corporate acquisitions, investments, joint ventures, capitalization, and restructuring or reorganization. She
has also taken part in various projects necessitating in-depth due diligence audit of various companies. She
also assists the and/or acts as Corporate Secretary for several companies.

She has also been handling litigation and arbitration matters which include preparation of pleadings as well
as appearances before various courts, the National Telecommunications Commission, Department of Trade
and Industry, National Labor Relations Commission and other tribunals and offices. She is also handling
intellectual property concerns which span from issues of trademark registration through infringement, and
other similar matters.

Atty. Maningat holds a Bachelor of Laws, from the University of the Philippines College of Law and a
Bachelor of Arts Major in Philosophy, magna cum laude, from the University of the Philippines - Diliman.

SEC Form 17-A 146

MAILENE M. CABRAL
Filipino, 51 years old
Chief Audit Executive and Chief Risk Officer

Ms. Cabral is a Certified Public Accountant with close to 30 years of experience in both External and Internal
Audits, Finance, Controllership and Risk Management. Her longest stint was with PricewaterhouseCoopers
(PwC) where she spent 17 years in various audit leadership capacities. After her first five years with PwC
Philippines, she moved to another company in Vietnam as Finance Controller. She then moved back to the
Philippines to join Viva TV Corporation and shortly thereafter, rejoined PwC in Cambodia, Vietnam, and
Thailand, where she spent the next 12 years of her career. In 2014, she joined Splash Corporation as
Internal Audit Head and just before joining Manila Water, she was with Radiowealth Finance as Chief Audit
and Risk Executive.

Ms. Cabral currently serves as Audit and Risk Committee Director in Manila Water Philippine Ventures, Inc.,
Laguna AAA Water Corporation and Boracay Island Water Company, Inc.

Ms. Cabral holds a Bachelor of Science in Commerce degree, Major in Accounting from Sacred Heart
College, Lucena City, where she graduated Cum Laude in 1992. She became a Certified Public Accountant
in October 1992.

Item 10. Executive Compensation

Executive Compensation of Directors

Section 10 of Article III of the Company’s By-laws state:

“By resolution of the Board, each director shall receive a reasonable per diem for his attendance
at each meeting of the Board. As compensation, the Board shall receive and allocate an amount
of not more than 1% of the net income before income tax of the Company during the preceding
year.

Such compensation shall be determined and apportioned among the directors in such manner
as the Board may deem proper. The Board shall have the sole authority to determine the
amount, form and structure of the fees and other compensation of the directors.”

On April 11, 2011, the Board approved to fix the remuneration of the Company’s directors, as follows:

Annual Retainer Fee P

= 500,000.00
Board Meeting Fee per meeting attended P
= 200,000.00
Annual Stockholders’ Meeting Fee per meeting attended P
= 200,000.00
Committee Meeting Fee per meeting attended 50,000.00

This was ratified by the stockholders in the annual stockholders’ meeting held on April 11, 2011.

On November 18, 2021, the Board resolved that Executive Directors shall not receive per diem remuneration
for his participation and attendance in the meetings of the Board and Board Committees.

On February 24, 2022, the Board approved to discontinue the payment of per diems of directors for their
attendance and participation in asynchronous meetings of the Board and Board Committees.

None of the non-executive and independent directors who are paid fees as set forth above is engaged and
compensated by the Company for services other than those provided as a director.

The Company has no other arrangement as regards the remuneration of its existing non-executive and
independent directors aside from the compensation received as herein stated.

SEC Form 17-A 147

The directors of the Board received the following gross per diem remuneration for attending the meetings
of the Board of Directors, the meeting of the Non-Executive Directors, the annual stockholders’ meeting,
and their respective Committee Meetings in 2023:
ATTENDANCE IN ATTENDANCE
2023 THE MEETINGS IN THE
NAME RETAINER OF THE BOARD MEETINGS OF TOTAL
FEE AND THE BOARD
STOCKHOLDERS# COMMITTEES
Enrique K. Razon, Jr. ₱625,000 ₱1,400,000 ₱– ₱2,025,000
Jose Victor Emmanuel A. de Dios * ₱– ₱– ₱– ₱–
Donato C. Almeda* ₱– ₱– ₱– ₱–
Antonino T. Aquino ₱625,000 ₱1,600,000 ₱100,000 ₱2,325,000
Jose Rene Gregory D. Almendras ₱500,000 ₱1,000,000 ₱– ₱1,500,000
Alberto M. de Larrazabal ₱625,000 ₱1,400,000 ₱– ₱2,025,000
Sandy A. Alipio* ₱– ₱– ₱– ₱–
Katrina Maria S. Razon ₱125,000 ₱400,000 ₱– ₱525,000
Sherisa P. Nuesa ₱625,000 ₱1,600,000 ₱600,000 ₱2,825,000
Cesar A. Buenaventura ₱625,000 ₱1,600,000 ₱650,000 ₱2,875,000
Octavio Victor R. Espiritu ₱625,000 ₱1,500,000 ₱550,000 ₱2,775,000
Eric Ramon O. Recto ₱625,000 ₱8,000 ₱550,000 ₱1,975,000
TOTAL ₱5,000,000 ₱11,400,000 ₱2,450,000 ₱18,850,000
#
Inclusive of the remuneration for the Non-Executive Directors (NED) Meeting
*
As executive directors, Messrs. de Dios, Almeda and Alipio do not receive remuneration for attending Board and Board Committee
Meetings.

Compensation of Executive Officers

The information regarding the aggregate compensation paid or accrued during the last two (2) fiscal
years and the ensuing fiscal year to the Company’s President and Chief Executive Officer and the most
highly compensated officers and all other officers of the Company is provided below:
Other Annual
Name and Principal Position Year Salary Bonus Compensation

Jose Victor Emmanuel A. De

Dios5
President and CEO

Arnold Jether A. Mortera

Chief Operating Officer - East
Zone
Liwayway T. Sevalla
Chief Information Officer
Group Director for Corporate
Information Technology
Janine T. Carreon
Group Director for Corporate
Human Resources
Nestor Eric T. Sevilla Jr.
Group Director for Corporate
Communication Affairs

5
Mr. De Dios, Mr. Donato C. Almeda (Chief Regulatory Officer), Mr. Roberto Jose R. Locsin (Chief Operating Officer for International
Business and concurrent Chief Administrative Officer), Ms. Gigi Iluminada T. Miguel (Chief Finance Officer and Treasurer),
Atty. Amabelle C. Asuncion (Chief Legal Officer and Chief Compliance. Officer), and Mr. Melvin John M. Tan
(Chief Operating Officer - Non-East Zone Philippines) receive their compensation from Prime Infrastructure Holdings, Inc.
SEC Form 17-A 148
 Other Annual
Name and Principal Position Year Salary Bonus Compensation

President and Chief Executive Actual 20226 P

= 36,211,362 P
= 4,758,073 P
= 6,862,154
Officer and Four (4) Most
Highly Compensated Actual 2023 30,072,592 3,622,270 6,091,576
Executive Officers
Projected 2024 34,664,460 6,460,090 6,767,457

All other officers as a group Actual 2022 P

= 29,444,350 P
= 7,361,088 P
= 10,574,624
unnamed
Actual 2023 35,085,200 3,043,490 10,297,741

Projected 2024 59,294,720 13,508,730 15,381,281

The Company has no standard arrangement, or any other compensation plan or arrangement as regards
the remuneration of its existing officers aside from the compensation stated.

On February 17, 2022, the Talent and Remuneration Committee approved the creation and adoption of a
Stock Incentive Plan (SIP) for the Company. This was ratified by the BOD during its regular meeting on
February 24, 2022. The shares granted under the SIP is a performance-based incentive extended to senior
leaders, officers, and consultants of the Company, including secondees from Prime Infrastructure Holdings,
Inc., and Ayala Corporation.

The shares for the SIP will be acquired by the Company from the market and held in treasury before they
are issued to SIP grantees. From September 12 to 14, 2022, the Company implemented its buy-back
program for the SIP and acquired 3.2 million shares.

As of December 31, 2023, the Company has granted 13,952,469 shares under the SIP, and 5,923,674
shares have already been vested in favor of the grantees.

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

The above-mentioned executive officers are covered by letters of appointment stating their respective job
functions, among others.

Warrants and Options Outstanding

As of December 31, 2023, 31,876,363 subscriptions are outstanding under the Company's Employee Stock
Ownership Plan (ESOWN). The subscriptions include those for shares covered by options that were granted
in 2005 under the Company's Executive Stock Option Plan (ExSOP) and converted to subscriptions under
the ESOWN. As a result of the conversion of options under the ExSOP to subscriptions under the ESOWN,
the Company no longer grants options under the ExSOP.

There were disclosures on grants to senior officers under the ESOWN for the years 2005, 2006, 2007, 2008,
2009, 2011, 2012, 2013, 2014, and 2018. The total number of eligible talents when the 2018 ESOWN was
offered was 351.

6
The compensation for 2022 includes the compensation received by the following officers: Abelardo P. Basilio (January 1, 2022 to
November 30, 2022), Liwayway T. Sevalla (January 1, 2022 to December 31, 2022), Arnold Jether A. Mortera (January 1, 2022 to
December 31, 2022), Robert Michael N. Baffrey (January 1, 2022 to October 31, 2022), Janine T. Carreon (November 1, 2022 to
December 31, 2022), and Evangeline M. Clemente (December 1, 2022 to December 31, 2022).
SEC Form 17-A 149
As of December 31, 2023, the following are the outstanding grants under the ESOWN to the directors and
senior executive officers of the Company:

Market
Price at
Date of Exercise Date of
Name No. of Shares Grant Price Grant
Arnold Jether A. Mortera 292,900 Various Various Various
Melvin John M. Tan 29,970 Various Various Various
Shoebe Hazel B. Caong 136,100 Various Various Various
Joemar B. Emboltorio 195,400 Various Various Various
Evangeline M. Clemente 259,400 Various Various Various
Liwayway T. Sevalla 63,000 Various Various Various
Janine T. Carreon 436,800 Various Various Various
Nestor Eric T. Sevilla Jr. 199,100 Various Various Various
Maidy Lynne B. Quinto 120,000 Various Various Various
Above-named officers as a Group 1,732,670 Various Various Various
common shares

The Exercise Price is the Subscription Price. For the most recent ESOWN grant in 2018, the Subscription
Price was based on the average closing price at the PSE for twenty (20) consecutive trading days with a
discount determined by the Remuneration Committee at the date of grant.

Item 11. Security Ownership of Certain Beneficial Owners and Management

1. Security Ownership of Record and Beneficial Owners of more than 5% as of December 31, 2023.

Name of Beneficial
Name and Address of Owner (and
Title of Record Owner (and Relationship with No. of Shares Percent of
Class Relationship with Issue) Record Owner) Citizenship Held Class

Common Trident Water Company Enrique K. Razon, Filipino 900,052,160 34.69%

Holdings, Inc. Jr.

2288 Chino Roces Ave., (Controlling

Barangay Magallanes, shareholder)
Makati City

Common Ayala Corporation Ayala Corporation Filipino 577,947,4647 22.27%

34F Tower One and (The same as the

Exchange Plaza, Ayala record owner)
Triangle, Ayala Ave.,
Makati City

Preferred Trident Water Company Enrique K. Razon, Filipino 2,691,268,2058 75.52%

Holdings, Inc. Jr.
Participating
2288 Chino Roces Ave., (Controlling preferred shares
Barangay Magallanes, shareholder)
Makati City

Preferred Philwater Holdings Philwater Holdings, Filipino 872,487,862 24.48%

Company, Inc. Company, Inc.
Participating
MWSS Admin Bldg., 489 (The same as the preferred shares
Katipunan Rd., Balara, record owner)
Quezon City

7
Includes shares held through PCD Nominee Corporation (21,409,000) and Michigan Holdings, Inc. (1,000,000), a wholly owned subsidiary of
Ayala Corporation
8Subject to the Share Purchase Agreement dated February 15, 2021 between Philwater Holdings Company, Inc. and Trident Water Company

Holdings, Inc.
SEC Form 17-A 150
 2. Security Ownership of Directors and Management as of December 31, 2023:

Amount of Nature of
Title of Name of Beneficial Beneficial Beneficial Percent of
Class Owner Citizenship Ownership Ownership Class
Common Enrique K. Razon, Jr. 9 Filipino 900,052,260 Direct and indirect 34.60%
Common Jose Victor Emmanuel A. Filipino 356,642 Indirect 0.01%
de Dios
Common Donato C. Almeda Filipino 87,870 Direct 0.00%
Common Antonino T. Aquino Filipino 12,749,543 Direct 0.49%
Common Alberto M. de Larrazabal Filipino 1 Indirect 0.00%
Common Sandy A. Alipio Filipino 200 Direct 0.00%
Common Katrina Maria S. Razon Filipino 100 Direct 0.00%
Common Sherisa P. Nuesa Filipino 5,093,607 Direct and indirect 0.20%
Common Cesar A. Buenaventura Filipino 920,001 Direct and indirect 0.04%
Common Octavio Victor R. Espiritu Filipino 188,300 Indirect 0.01%
Common Eric Ramon O. Recto Filipino 10,000 Indirect 0.00%
Common Roberto Jose R. Locsin Filipino 238,735 Indirect 0.01%
Common Gigi Iluminada T. Miguel Filipino 93,201 Indirect 0.00%
Common Amabelle C. Asuncion Filipino 47,810 Indirect 0.00%
Common Arnold Jether A. Mortera Filipino 377,788 Direct and indirect 0.01%
Common Melvin John M. Tan Filipino 102,770 Indirect 0.00%
Common Ana Mari B. Bentilanon Filipino – N.A. N.A.
Common Shoebe Hazel B. Caong Filipino 214,500 Direct and Indirect 0.01%
Common Joemar B. Emboltorio Filipino 348,700 Direct and Indirect 0.01%
Common Evangeline M. Clemente Filipino 332,695 Direct and indirect 0.01%
Common Janine T. Carreon Filipino 540,386 Direct and indirect 0.02%
Common Liwayway T. Sevalla Filipino 90,353 Indirect 0.00%
Common Nestor Eric T. Sevilla Filipino 331,620 Direct and Indirect 0.01%
Common Jhoana R. Tamayor Filipino 800 Indirect 0.00%
Common Valerie R. Tagana Filipino – N.A. N.A.
Common Michael M. Mayo Filipino – N.A. N.A.
Common Maidy Lynne B. Quinto Filipino 198,659 Direct and indirect 0.01%
Common Silverio Benny J. Tan Filipino 74,500 Indirect 0.00%
Common Ninez C. Maningat Filipino – N.A. N.A.
Common Mailene M. Cabral Filipino – N.A. N.A.
Total for All Directors and Officers as 914,116,592 31.72%
a Group

Other than Mr. Razon, no Director or member of the Company’s management owns 2.0% or more of the
outstanding capital stock of the Company.

Item 12. Certain Relationships and Related Transactions

Parties are considered to be related to the Group if it has the ability, directly or indirectly, to control the
Group or exercise significant influence over the Group in making financial and operating decisions, or vice
versa, or where the Group and the party are subject to common control or common significant influence.
Related parties may be individuals (being members of key management personnel and/or their close family
members) or other entities and include entities which are under the significant influence of related parties of
the Group where those parties are individuals, and post-employment benefit plans which are for the benefit
of employees of the Group or of any entity that is a related party of the Group.

In the normal course of business, the Group has transactions with related parties. The sales and
investments made to related parties are made at normal market prices. Service agreements are based on
rates agreed upon by the parties. Outstanding balances at year-end are unsecured, due for cash settlement
or collection, and interest-free except for balances related to cash in banks and cash equivalents and long-
term debt. There have been no guarantees provided for nor received on any related party receivables or
payables. This assessment is undertaken each financial year by examining the financial position of the
related party and the market in which the related party operates. Material significant related party
transactions are reviewed and approved by the Related Party Transactions Committee of the Board.

9In addition, Mr. Razon has beneficial ownership over 2,691,268,205 Participating Preferred Shares.
SEC Form 17-A 151
For more information on related party transactions, refer to Note 23 to the Audited Consolidated Financial
Statements.

PART IV – CORPORATE GOVERNANCE

Item 13. Corporate Governance

Board of Directors

The Company prides itself with its Board of Directors (the “Board”), composed of highly competent
individuals with a collective working knowledge, experience or expertise that is relevant to the Company’s
industry or sector. The Board provides a clear vision towards the formulation of sound corporate strategies,
and oversees the systemization, improvement and upholding of transparency in governance. The Board
provides guidance in achieving fairness and accountability in all major dealings of the Company, with the
objective of protecting the interests of its stakeholders.

In this connection, the Board fulfills certain key functions, including: reviewing and guiding corporate
strategy; major plans of action; risk policy; annual budgets and business plans; setting performance
objectives; monitoring implementation and corporate performance; overseeing and approving major capital
expenditures; acquisitions and divestitures; monitoring the effectiveness of governance practices and
making changes as needed; selecting, compensating, monitoring and, when necessary, replacing key
executives and overseeing succession planning; aligning key executive and board remuneration with the
longer term interests of the Company and its stakeholders; ensuring a formal and transparent board
nomination and election process; and monitoring and managing potential conflicts of interest of
management, board members, stockholders and stakeholders, including misuse of corporate assets and
abuse in related party transactions.

Board Composition

The Board has eleven (11) members who are elected by the stockholders during the annual stockholders’
meeting ("ASM").

The Board should have at least three (3) independent directors, or such number as to constitute at least
one-third of the members of the Board, whichever is higher. 10

All nominations to the Board are undertaken in accordance with the Manual of Corporate Governance (the
"Manual"), By-laws, the Charter of the Board, and the existing rules and regulations. Upon receipt of all
nominations, the Nomination Committee convenes to evaluate the qualifications of nominees for election to
the Board. In evaluating the nominations, the Nomination Committee adheres to the criteria for selection
and the qualifications and disqualifications of directors set forth in the Manual, the Charter of the Board, the
Charter of the Board Committees, the Securities Regulations Code (SRC), and those under existing laws,
rules, and regulations. After deliberation, the Nomination Committee and the Board issue a resolution
endorsing the election of the qualified nominees at the Annual Stockholders’ Meeting (ASM). The members
of the Board so elected at the ASM hold office for one year, and until their successors have been elected
and qualified in accordance with the By-laws. The elected members of the Board are mandated to oversee
the management of the Company, and, in the performance of their duties, must exercise their best and
unbiased judgment to protect and promote the interest of the Company and its stakeholders.

The inputs and opinions of each Director are valued. It is ensured that a Director shall not be discriminated
upon by reason of gender, age, ethnicity, political, religious, or cultural beliefs. Towards this end, the Board
has adopted a policy of diversity in gender, age, and ethnicity, as well as religious, political, or cultural
background. Through this policy, the Board encourages the stockholders to nominate and select individuals
who will promote diversity in the membership of the Board.

Moreover, the Board ensures a formal and transparent board nomination and election process.

10Ms. Sherisa P. Nuesa, Mr. Cesar A. Buenaventura, Mr. Octavio Victor R. Espiritu, and Mr. Eric Ramon O. Recto are the incumbent independent
directors of the Company.
SEC Form 17-A 152
Principles and Procedures for Submission and Evaluation of Nominations and Endorsement for
Election of Candidates to the Board of Directors

Manila Water encourages the selection of a mix of competent directors, each of whom can add value and
contribute independent judgment to the formulation of sound corporate strategies and policies.

Moreover, the Board ensures a formal and transparent board nomination and election process. Towards
this end, the following procedure and principles are observed in the nomination of candidates for election to
the Board:

a. Every stockholder, including the minority and non-controlling, has a right to submit nominations for
election to the Board.

All nominations to the Board, whether for first time nominees or repeat nominees, or for independent
directors, shall be submitted to the Nomination Committee, through the Office of the Corporate
Secretary, at least thirty (30) working days before the date of the ASM. The stockholders, in making
their nominations, or the Company, may make use of professional search firms or external sources
of candidates when searching for candidates to the Board.

The nominating stockholder must indicate his or her complete name and address and/or contact
details, number of Company shares registered in his own name, and stock certificate number.

b. Process of Endorsing Nominations

i. The Nomination Committee shall hold a meeting for the specific purpose of determining
whether the nominees to the Board have all the qualifications and none of the
disqualifications specified in the Revised Corporation Code of the Philippines, the Manual,
the Charter of the Board, the Securities Regulation Code (SRC) Rules, and the applicable
laws, rules and regulations.

ii. The Nomination Committee shall evaluate each and every nomination and for this purpose,
and may even make an inquiry with their professional networks and outside references.

The Nomination Committee undertakes the process of identifying the quality of directors
aligned with our strategic directions. Towards this end, the Nomination Committee shall
confirm that all nominees for election have all the qualifications and none of the
disqualifications to become directors, and that they have the competence and professional
background that will enable them to perform their duties as directors of a highly regulated
business as that of Manila Water.

If the ground for disqualification of a nominated director becomes known prior to the
scheduled ASM, the nominated director shall not be endorsed for election at the
stockholders’ meeting except when such disqualification is temporary and the same is cured
or remedied prior to the scheduled stockholders' meeting.

A director with temporary disqualification may still be endorsed by the Nomination

Committee for election at the ASM subject to the sixty (60) day curing period if the ground
for temporary disqualification is capable of being cured. However, if the disqualification
becomes permanent after endorsement by the Nomination Committee and before the ASM,
the nominee shall be given the discretion to refuse his nomination. If the nominee is
thereafter elected, or the disqualification becomes permanent during his term of office, the
aforesaid director may be removed subject to the provisions of and procedures under
Section 2.4.2 of the Charter of the Board.

iii. After evaluation of the qualifications and disqualifications of the nominees, the Nomination
Committee shall issue a resolution whether endorsing or not the nominees for election to
the Board.

iv. If a nominee is not endorsed for election by reason of a disqualification, the resolution of
the Nomination Committee should clearly specify the grounds relied upon for
disqualification.
SEC Form 17-A 153
 v. The Chairman of the Board shall provide input to the Nomination Committee on its
recommendation for approval of (i) candidates for nomination or appointment to the Board;
(ii) members and chairs of Board Committees; and (iii) appointment of Executive Officers.

c. Election of Directors

The directors of the Company shall be elected by majority vote at the ASM at which a quorum is
present. The election of Directors shall be by ballot and each stockholder entitled to vote may cast
the vote in person, by proxy, through remote communication, or in absentia, electronically or
otherwise, to which the number of shares he owns entitles him, for as many persons as are Directors
to be elected, or he may give one candidate as many votes as the number of Directors to be elected
multiplied by the number of his shares shall equal, or he may distribute them on the same principle
among as many candidates as he may see fit, provided that the whole number of votes cast by him
shall not exceed the number of shares owned by him multiplied by the whole number of Directors
to be elected.

Qualifications and Disqualifications of Directors

General Qualifications of Directors

A nominee to the Board must have the following General Qualifications:
a. Ownership of at least one (1) share of the capital stock of the Company.
b. At least twenty-one (21) years of age.
c. A college degree or its equivalent or adequate competence and understanding of the fundamentals
of doing business or sufficient experience and competence in managing a business to substitute for
such formal education.
d. Possesses integrity, probity and shall be diligent and assiduous in the performance of his functions.
e. Other relevant qualifications, such as membership in good standing in business, professional
organizations, or relevant industry.
f. Non-executive directors should possess such qualifications and stature that would enable them to
effectively participate in the deliberations of the Board.

Specific Qualifications of Directors

In addition to the General Qualifications, the following specific qualifications shall be required, if applicable:
a. Non-executive directors shall possess such qualifications and stature to effectively participate and
help secure objective, independent judgement on corporate affairs and to substantiate proper
checks and balances.
b. Directors who are members of Board Committees shall have such additional qualifications
necessary to effectively discharge the functions of the relevant Board Committee.
c. At least one of the independent directors must have accounting expertise (accounting qualification
or experience).
d. At least one non-executive director must have prior working experience in the sector that Manila
Water is operating in.
e. Independent directors must have all requisite qualifications for independence under Securities and
Exchange Commission (SEC) Memorandum Circular No. 16, Series of 2002.
f. Officers, executives, and employees of the Company may be elected as directors but cannot and
shall not be characterized as independent directors.
g. If a director elected or appointed as an independent director becomes an officer, employee or
consultant of the Company, the Company shall forthwith cease to consider him as an independent
director.
h. If the beneficial ownership of an independent director in the Company or its related corporations
shall exceed two percent (2%) of the subscribed capital stock of such corporation, the Company
shall forthwith cease to consider him as an independent director, except when the independent
director takes the appropriate action to remedy or correct the disqualification within sixty (60) days
from the occurrence of the ground, in which case, he may still be considered an independent
director.

SEC Form 17-A 154

Permanent Disqualifications
A nominee to the Board with the following disqualifications shall never be nominated, or if nominated and
elected, shall be removed from office:

a. Any person who has been finally convicted by a competent judicial or administrative body of the
following: (i) any crime involving the purchase or sale of securities as defined in the SRC, e.g.
proprietary or non-proprietary membership certificate, commodity futures contract, or interest in a
common trust fund, pre-need plan, pension plan or life plan; (ii) any crime arising out of the person's
conduct as an underwriter, broker, dealer, investment corporation, investment adviser, principal
distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or floor
broker; or, (iii) any crime arising out of his fiduciary relationship with a bank, quasi-bank, trust
company, investment house or as an affiliated person of any of them;

b. Any person who, by reason of any misconduct, after hearing or trial, is permanently or temporarily
enjoined by order, judgment or decree of the SEC or any court or other administrative body of
competent jurisdiction from: (i) acting as an underwriter, broker, dealer, investment adviser, principal
distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or a floor
broker; (ii) acting as a director or officer of a bank, quasibank, trust company, investment house,
investment company or an affiliated person of any of them; (iii) engaging in or continuing any
conduct or practice in connection with any such activity or willfully violating laws governing
securities, and banking activities.

Such disqualification shall also apply when such person is currently subject to an effective order of
the SEC or any court or other administrative body refusing, revoking or suspending any registration,
license or permit issued under the Corporation Code of the Philippines, SRC, or any other law
administered by the SEC or Bangko Sentral ng Pilipinas (BSP), or under any rule or regulation
promulgated by the SEC or BSP, or otherwise restrained to engage in any activity involving
securities and banking. Such person is also disqualified when he is currently subject to an effective
order of a self-regulatory organization suspending or expelling him from membership or participation
or from association with a member or participant of the organization;

c. Any person finally convicted judicially or administratively of an offense involving moral turpitude or
fraudulent acts or transgressions such as, but not limited to, embezzlement, theft, estafa,
counterfeiting, misappropriation, forgery, bribery, false affirmation or perjury;

d. Any person finally found by the SEC or a court or other administrative body to have willfully violated,
or willfully aided, abetted, counseled, induced or procured the violation of any provision of the SRC,
the Revised Corporation Code of the Philippines, or any other law administered by the SEC, or any
rule, regulation or order of the SEC or the BSP;

e. Any person judicially declared to be insolvent;

f. Any person finally found guilty by a foreign court or equivalent financial regulatory authority of acts,
violations, or misconduct similar to any of the acts, violations or misconduct listed in the foregoing
paragraphs;

g. Any person convicted by final and executory judgment of an offense punishable by imprisonment
for a period exceeding six (6) years, or a violation of the Revised Corporation Code of the
Philippines, committed within five (5) years prior to the date of his election or appointment; and,

h. No person shall qualify or be eligible for nomination or election to the Board if he is engaged in any
business which competes with or is antagonistic to that of the Company. Without limiting the
generality of the foregoing, a person shall be deemed to be so engaged –

i. If he is an officer, manager or controlling person of, or the owner (either of record or

beneficially) of ten percent (10%) or more of any outstanding class of shares of, any
corporation (other than one in which the Company owns at least thirty percent [30%] of the
capital stock) engaged in a business which the Board, by at least three-fourths (3/4) vote,
determines to be competitive or antagonistic to that of the Company, or

SEC Form 17-A 155

 ii. If he is an officer, manager or controlling person, or the owner (either of record or
beneficially) of ten percent (10%) or more of any outstanding class of shares of any other
corporation or entity engaged in any line of business of the Company, or when in the
judgment of the Board, by at least three-fourths (3/4) vote, deems that the laws against
combinations in restraint of trade shall be violated by such person's membership in the
Board; or

iii. If the Board, in the exercise of its judgment in good faith, determines by at least three-
fourths (3/4) vote that he is the nominee of any person set forth in (i) or (ii).

In determining whether or not a person is a controlling person, beneficial owner, or the

nominee of another, the Board may take into account such factors as business and family
relations.

i. Other grounds as the SEC may prescribe.

Temporary Disqualifications
The following shall constitute grounds for temporary disqualifications of directors:

a. Refusal to fully disclose the extent of his business interest as well as refusal to comply with all other
disclosure requirements under the SRC and its Implementing Rules and Regulations. This
disqualification shall be in effect as long as his refusal persists.

b. Absence or non-participation in more than Fifty Percent (50%) of all meetings, both regular and
special, of the Board during his incumbency, or any twelve (12) month period during said
incumbency unless such absence was due to illness, death in the immediate family or serious
accident. This disqualification applies for purposes of the succeeding election.

c. Dismissal or termination from directorship of any publicly listed company, public company,
registered issuer of securities and holder of a secondary license from the SEC. This disqualification
shall be in effect until he has cleared himself of any involvement in the cause that gave rise to his
dismissal or termination.

d. Being under preventive suspension by the Company for any reason.

e. If the beneficial equity ownership of an independent director in the corporation or its subsidiaries
and affiliates exceeds two percent (2%) of its subscribed capital stock. The disqualification from
being elected as an independent director is lifted if the limit is later complied with.

f. Conviction that has not yet become final referred to in the grounds for disqualification of directors.

A finding of existence of temporary disqualification shall be at the discretion of the Board and shall require
a resolution of a majority of the Board. A director shall have sixty (60) days upon the occurrence of any
ground for temporary disqualification to remedy or correct the same otherwise, the disqualification shall
become permanent.

Roles and Responsibilities of the Board

The Corporate Governance Manual provides that “The Board should have a Board Charter that formalizes
and clearly states its roles, responsibilities and accountabilities in carrying out its fiduciary duties. The Board
Charter should serve as a guide to the directors in the performance of their functions and should be publicly
available and posted on the Company’s website.” The Charter of the Board implements the aforesaid
provision of the Manual.

SEC Form 17-A 156

The Board’s Governance Responsibilities:

Article I, Section 1.4 of the Company’s Corporate Governance Manual outlines the governance
responsibilities of the Board.

a. The Board members shall act on a fully informed basis, in good faith, with due diligence and care,
and in the best interest of the Company and all shareholders;
b. The Board shall oversee the development of and approve the Company’s business objectives and
strategy, and monitor their implementation, in order to sustain the Company’s long-term viability and
strength;
c. The Board shall be responsible for ensuring and adopting an effective succession planning program
for directors, key officers, and management to ensure growth and a continued increase in the
shareholders’ value. This includes adopting a policy on the retirement age for directors and key
officers as part of management succession and to promote dynamism in the Company.

The Board should align the remuneration of key officers and board members with the long-term
interests of the Company. In doing so, it should formulate and adopt a policy specifying the
relationship between remuneration and performance. Further, no Director should participate in
discussions or deliberations involving his own remuneration.
d. The Board should have the overall responsibility in ensuring that there is a groupwide policy and
system governing related party transactions (RPTs) and other unusual or infrequently occurring
transactions, particularly those which pass certain thresholds of materiality. The policy should
include the appropriate review and approval of material or significant RPTs, which guarantee
fairness and transparency of the transactions. The policy should encompass all entities within the
Group, taking into account their size, structure, risk profile and complexity of operations.
e. The Board should be primarily responsible for approving the selection and assessing the
performance of the Management led by the Chief Executive Officer (CEO), and control functions
led by their respective heads (Chief Risk Officer, Chief Compliance Officer, and Chief Audit
Executive).
f. The Board should ensure the establishment of an effective performance management framework
that will ensure that the Management, including the Chief Executive Officer, and personnel’s
performance is at par with the standards set by the Board and Senior Management.
g. The Board should oversee that an appropriate internal control system is in place, including setting
up a mechanism for monitoring and managing potential conflicts of interest of Management, board
members, and shareholders. The Board should also approve the Internal Audit Charter.
h. The Board should oversee that a sound enterprise risk management (ERM) framework is in place
to effectively identify, monitor, assess and manage key business risks. The risk management
framework should guide the Board in identifying units/business lines and enterprise-level risk
exposures, as well as the effectiveness of risk management strategies.
i. The Board should adopt a Code of Business Conduct and Ethics, which would provide standards
for professional and ethical behavior, as well as articulate acceptable and unacceptable conduct
and practices in internal and external dealings. The Code should be properly disseminated to the
Board, senior management, and employees. It should also be disclosed and made available to the
public through the Company website.

Aside from these, Section 3.1. of the Charter of the Board also lists the following powers of the Board:

a. The Board should ensure the integrity of the Company’s accounting and financial reporting systems,
including the independent audit, and that appropriate systems of control are in place, in particular,
systems for risk management, financial and operational control, and compliance with the law and
relevant standards.
b. The Board shall ensure a formal, transparent board nomination and election process.
c. The Board shall monitor the effectiveness of the Company’s governance practices and make
changes as needed.
d. The Board shall oversee the process of disclosure and communications
e. The Board shall regularly review, at least annually, the mission and vision of the Company and shall
revise the same, as may be necessary, in accordance with the strategic directors of the Company.

SEC Form 17-A 157

Independent Directors

In compliance with the requirements of the law, the Company's Manual, and the rules and regulations of the
SEC, the Company has four (4) independent directors as members of the Board.

Under the Charter of the Board, Independence is defined as, “with respect to any person, the absence of
any restrictions or limitations or freedom from any interests or relationships that would interfere with the
exercise of impartial and objective judgment in carrying out the responsibilities of that person”.

Under the Manual, a director is considered independent if he holds no interests or relationships with the
Company that may hinder his independence from the Company or its management which would interfere
with the exercise of independent judgment in fulfilling the responsibilities of a director. More importantly, the
Company also subscribes to the requirements of independence under existing laws, rules, and regulations.
As required in the legislative franchise of the Company under Republic Act No. 11601, an Independent
Director shall have at least three (3) years of management or supervisory experience in the professional
fields of water security, water science policy and management, environmental science, or any similar field.

Further, the Company ensures that its independent directors have all the qualifications and none of the
disqualifications specified in SEC Memorandum Circular No. 16, Series of 2002.

As required in the legislative franchise of the Company under Republic Act No. 11601, an Independent
Director shall have at least three (3) years of management or supervisory experience in the professional
fields of water security, water science policy and management, environmental science, or any similar field.

Board Committees

The Board is supported by several committees, namely: Executive Committee, Audit Committee, Corporate
Governance Committee, Board Risk Oversight Committee, Related Party Transactions Committee,
Nomination Committee, the Talent and Remuneration Committee, and the Environment, Social, and
Governance Committee. These Board Committees are required to report to the Board a summary of the
actions taken on matters submitted to them for consideration at the next meeting of the Board. Each of the
Board Committees has its own charter that provides guidance on the manner by which its members and the
committees should exercise their functions and mandates.

The Executive Committee

The Executive Committee is composed of five (5) directors, with one (1) member as Chairman of the
Executive Committee. The Executive Committee acts by majority vote of all its members and is authorized
to act and shall act on matters within the competence of the Board, except those with respect to:
a. the approval of any action for which shareholders' approval is also required;
b. the filling of vacancies in the Board;
c. the amendment or repeal of the By-laws or the adoption of new By-laws;
d. the amendment or repeal of any resolution of the Board, which by its express terms is not so
amendable or repealable;
e. the distribution of cash dividends to shareholders;
f. the exercise of powers delegated by the Board exclusively to other committees, if any.

The Executive Committee meets as needed and performs such other functions as may be properly
delegated to it by the Board. The Executive Committee held one (1) meeting in 2023.

Executive Committee Meetings Attended/Held

Enrique K. Razon, Jr. 1/1
Jose Victor Emmanuel A. de Dios 1/1
Donato C. Almeda 1/1
Jose Rene Greogory D. Almendras 11 1/1
Antonio T. Aquino N.A
Sandy A. Alipio12 N.A

11Mr. Almedras ceased to be a member of the Executive Committee on October 11, 2023. He was replaced by Mr. Antonio T. Aquino who was
appointed as a member of the Executive Committee on December 6, 2023.
12Mr. Alipio was appointed as a member of the Executive Committee on December 6, 2023.

SEC Form 17-A 158

The Audit Committee
The Audit Committee of the Company is composed of four (4) non-executive directors as members, majority
of whom are independent directors, and is chaired by an independent director13

The Audit Committee is expected to support the corporate governance process through the provision of
checks and balances, which are expected to bring positive results in supervising and supporting the
management of the Company. It is responsible for ensuring the development of, compliance with, and
periodic review of financial reporting policies and practices of the Company. The Audit Committee also
oversees the activities of the Internal Audit. Moreover, the Audit Committee also recommends and/or
concurs to the appointment, replacement, re-assignment and removal or dismissal of the Company’s
external auditors, including the rotation or change of external auditors and key engagement partners in
accordance with applicable laws and regulations. Finally, the Audit Committee recommends and/or concurs
to the appointment, replacement, re-assignment and removal or dismissal of the Chief Audit Executive to
ensure that the external and internal auditors will function and operate independently of the management
as required of their function.

All members of the Audit Committee are required to possess adequate understanding of accounting and
auditing principles in general and of the Company’s financial management systems and environment, in
particular. Ms. Sherisa P. Nuesa, the Lead Independent Director and Chairperson of the Audit Committee,
is a Certified Public Accountant. The Audit Committee meets at least every quarter and before the quarterly
Board meetings and when needed.

On June 3, 2021, the Charter of the Audit Committee was amended to reduce the minimum number of non-
executive directors who may be elected as members of the Committee. On November 9, 2021, the Audit
Committee approved the further revision to their charter to include the Audit Committee’s responsibility in
assessing the independence, adequacy of resources, professional qualifications, and competence of the
external auditor and ensuring that the rotation or change of external auditors and key engagement partners
is in accordance with the requirements prescribed by applicable laws and regulations and that the required
disclosure will be made in case of resignation, dismissal, or cessation from service of the external auditor.
Moreover, the rules and procedures governing the Audit Committee in the conduct of its meetings and the
Audit Committee remuneration are also included in this revision. These changes were ratified by the Board
of Directors on November 18, 2021.

The Committee held four (4) regular meetings and four (4) special meetings in 2023.

Audit Committee Meetings Attended/Held

Sherisa P. Nuesa 8/8
Octavio Victor R. Espiritu 8/8
Cesar A. Buenaventura 8/8
Sandy A. Alipio14 N/A

13
In accordance with Part C of the Charter of the Audit Committee, the Committee shall be composed of at least three (3) non-executive
directors as members, majority of whom shall be independent directors, and shall be chaired by an independent director.
14Mr. Alipio was appointed as a member of the Audit Committee on December 6, 2023.
SEC Form 17-A 159
The Corporate Governance Committee
The Corporate Governance (CG) Committee is composed of four (4) independent directors including the
Chairman15. The CG Committee is tasked with ensuring compliance with and proper observance of
corporate governance principles and practices, and has the following duties and functions, among other
functions as may be delegated by the Board from time to time:
a. oversees the implementation of the corporate governance framework and periodically reviews the
said framework to ensure that it remains appropriate in light of material changes to the Company’s
size, complexity, and business strategy, as well as its business and regulatory environments;
b. Oversees the periodic performance evaluation of the Board and its committees as well as executive
management, and conducts an annual self-evaluation of its performance;
c. ensures that the results of the Board evaluation are shared, discussed, and that concrete action
plans are developed and implemented to address the identified areas for improvement;
d. develops and recommends continuing education and training programs for directors, and
assignment of tasks/projects to Board committees;
e. proposes and plans relevant trainings for the members of the Board;
f. reviews conflict-of-interest situations and provides appropriate remedial measures for the same;
g. formulates a clear communication and disclosure strategy to promptly and regularly communicate
with the regulators and the Company’s shareholders and other stakeholders on matters of
importance;
h. monitors and assesses the Company’s compliance with laws, rules and regulations relating to
corporate governance policies;
i. evaluates and monitors compliance with the Company’s policy in detection of fraud and whistle-
blower program;
j. Evaluates and monitors compliance with the Company’s Code of Business Conduct and Ethics; and
k. adopts corporate governance policies and ensures that these are reviewed and updated regularly,
and consistently implemented in form and substance.

On June 3, 2021, the Board of Directors approved the proposal to amend the required number of directors
from three (3) to at least three (3) members, all of whom shall be independent directors.

The Compliance Officer, in coordination with the Corporate Secretary, shall support the Committee in the
performance of its functions. The Corporate Governance Committee held one (1) meeting in 2023.

Corporate Governance Committee Meetings Attended/Held

Octavio Victor R. Espiritu 1/1
Cesar A. Buenaventura 1/1
Eric Ramon O. Recto 1/1
Sherisa P. Nuesa 1/1

The Board Risk Oversight Committee

The Board Risk Oversight Committee of the Company (BROC) is composed of four (4) members, majority
of whom are independent directors, and is chaired by an independent director 16. In accordance with the
BROC charter, Mr. Buenaventura, who chairs the Committee, does not sit as the chairman of the Board of
any other committee. The Board Risk Oversight Committee was established separately from the Audit
Committee in order to further enhance governance on risk matters and align with the best practices in risk
management and supported by the Enterprise Risk Management Department in the performance of its
functions.

This committee is tasked to provide assistance in fulfilling the Board’s oversight responsibilities in relation
to risk governance in Manila Water, which includes ensuring that the Management maintains a sound and
responsive risk management system across the organization; promote an open discussion regarding risks
faced by the Company, as well as risks faced by its subsidiaries that may have potential impact on the
Company’s operations, and ensure that risk awareness culture is pervasive throughout the organization.

15Section 1.1 of the Charter of the Corporate Governance Committee states that the Committee shall be composed of at least three (3) members,
all of whom shall be independent directors, including the Chairperson.
16Part B of the Charter of the Board Risk Oversight Committee states that the Committee shall be comprised of at least three (3) members of

the Board, majority of whom shall be independent directors of the Company. One member of the Committee, who must be an independent
director, shall be designated as Chairman.
SEC Form 17-A 160
It is also responsible for ensuring that an overall set of risk management policies and procedures exist for
the Company; reviews the Company’s risk governance structure and the adequacy of the Company’s risk
management framework/process; reviews and endorses to the Board changes or amendments to the
Enterprise Risk Management (ERM) Policy; performs oversight functions specifically in the areas of
managing strategic, financial, compliance, regulatory, operational and other risks of the Company, and crisis
management. In coordination with the Audit Committee, it ensures that the Company’s internal audit work
plan is aligned with risk management activities and that the internal control system considers all risks
identified in the risk assessment process.

On February 11, 2021, the Charter of the Board Risk Oversight Committee was amended to include
additional roles and responsibilities and further define its governance and oversight function. The
amendment was ratified by the Board of Directors during its meeting on February 24, 2021.

On June 3, 2021, the Board of Directors approved the proposal to amend the required number of members
of the Committee from four (4) to at least three (3), majority of whom shall be independent directors of the
Company.

The Board Risk Oversight Committee held four (4) meetings in 2023. From the year 2020, the BROC
meets every quarter as compared to the semi-annual frequency in previous years.

Board Risk Oversight Committee Meetings Attended/Held

Cesar A. Buenaventurea 4/4
Sherisa P. Nuesa 4/4
Eric Ramon O. Recto 4/4
Donato C. Almeda 4/4

The Related Party Transactions Committee

The Related Party Transactions Committee (RPT) Committee of the Company is composed of four (4) non-
executive directors, majority of whom are independent directors. 17 In accordance with the RPT Committee
Charter, Mr. Recto, who is an independent director, is the Chairman of the Committee.

This committee is primarily tasked with the duty of enforcing and implementing the Related Party
Transactions Policy of the Company. The Committee also ensures that material RPTs shall have terms and
conditions that are fair and equitable to the Company; the approval, award, processing and payment of RPT
shall follow the same procedures as the other transactions and contracts of the Company, and therefore,
no unusual privilege or special treatment shall be afforded a Related Party; and in case of doubt on the
nature of a transaction subject of investigation or review pursuant to the RPT Policy, the Office of the
Compliance Officer, in consultation with the RPT Committee, shall determine whether the transaction or
relationship constitutes a RPT, and whether the same shall be pursued taking into consideration the cost
and benefit to the Company.

On October 28, 2019, the Related Party Transactions Committee approved the amendments to the
Company’s Policy on Related Party Transactions (“RPT Policy”) in order to comply with the provisions of
the Rules on Material Related Party Transactions for Publicly Listed Companies of the SEC. The
amendments to the Company’s RPT Policy were ratified by the Board of Directors during its Regular Meeting
on November 26, 2019.

On June 3, 2021, the Charter of the RPT Committee was amended to reduce the minimum number of
committee members from four (4) to at least three (3), and at least two (2) members shall be independent
directors of the Company.

17
Section 1.1 of the Charter of the Related Party Transactions Committee states that the Committee shall be composed of at least
three (3) non-executive directors as members, two (2) of whom shall be independent.
SEC Form 17-A 161
The Committee held three (3) meetings in 2023.

Related Party Transactions Committee Meetings Attended/Held

Eric Ramon O. Recto 3/3
Octavio Victor R. Espiritu 3/3
Cesar A. Buenaventura 3/3
Sandy A. Alipio18 1/1

The Nomination Committee

The Nomination Committee is composed of at least three (3) directors, majority of whom are independent
directors, and under its Charter is required to be chaired by an independent director. 19

This committee is tasked to install and maintain an evaluation process to ensure that all directors to be
nominated to the Board during the annual stockholders’ meeting have all the qualifications and none of the
disqualifications stated in the Manual, the Charter of the Board and the Committees, and under existing
laws and regulations undertakes the process of identifying the quality of directors consistent with the
Company’s strategic directions, and to ensure that the directors have the competence and professional
background that will enable them to perform their duties as directors of Manila Water.
For this reason, the Committee shall not endorse a nominee for appointment by the Board unless it has
determined that all nominees have all the qualifications and none of the disqualifications for the position.

The Nomination Committee is also responsible for evaluating the qualifications of all officers nominated to
positions in the Company which are appointed, or required to be appointed, by the Board and provides
guidance and advice as necessary for the appointment of persons nominated to other positions. It also
reviews and revises, if necessary, the succession plans for members of the Board and officers with ranks
from Group Directors to the President and CEO.

The Nomination Committee also provides an assessment of the Board’s effectiveness in directing the
process of renewing and replacing Board members and in appointing officers or advisors. It also develops,
and updates as necessary and recommends to the Board policies for considering nominees for directors,
officers, or advisors.

The Committee held four (4) meetings in 2022.

Nomination Committee Meetings Attended/Held

Octavio Victor R. Espiritu 4/4
Sherisa P. Nuesa 4/4
Cesar A. Buenaventura 4/4
Donato C. Almeda 4/4

The Talent and Remuneration Committee

The Talent and Remuneration Committee of the Company is composed of four (4) members, and in
accordance with its Charter, is chaired by an independent director. 20 As of December 31, 2023, two of the
Company’s independent directors serve as members of the Committee.

The committee is tasked with the duty to determine and approve all matters and policies relating to the
remuneration and benefits of the Company’s directors and key officers; to establish a formal and transparent
procedure for developing a policy on remuneration of directors and officers to ensure that their compensation
is consistent with the Company’s culture, strategy and the business environment in which it operates; to
determine and approve all matters relating to the remuneration and benefits of the Board and the Company’s
officers; to evaluate and recommend for Board approval the pertinent guidelines on executive
compensation, including non-monetary remuneration; and to periodically review and evaluate the policy on
remuneration in order that it be in a sufficient level to attract and retain directors and officers of the Company.

18 Mr. Alipio was appointed as a member of the Audit Committee on December 6, 2023.
19
Section 1.1 of the Charter of the Nomination Committee states that the Committee shall be composed of at least three (3) members, majority
of whom shall be independent directors.
20 Section 1.1 of the Charter of the Talent and Remuneration Committee states that the Committee shall be composed of at least three (3)

members.
SEC Form 17-A 162
The Talent and Remuneration Committee continuously evaluates and recommends for Board approval,
pertinent guidelines and policies on executive and employee compensation, including non-monetary
remuneration.

On November 14, 2019, the Talent and Remuneration Committee approved the addition of the following in
its scope of powers, duties, and responsibilities: a) total rewards, merit increases, salary, and retirement
and benefits plan, b) senior management and executive promotions, c) overall succession landscape, d)
tracking of key talents, e) talent management and risk updates. The amendments were ratified by the Board
of Directors during its regular meeting held on November 26, 2019.

On June 3, 2021, the Talent and Remuneration Committee Charter was amended, removing the
requirement that majority of the members of the Committee are independent directors.

The Talent and Remuneration Committee held seven (7) meetings in 2023.

Talent and Remuneration Committee Meetings Attended/Held

Octavio Victor R. Espiritu 7/7
Eric Ramon O. Recto 7/7
Antonino T. Aquino 7/7
Jose Victor Emmanuel A. de Dios 7/7

The Environment, Social and Governance Committee

The Board of Directors established the Environment, Social, and Governance (ESG) Committee on
February 24, 2022 to accord focus on the integration of economic, environmental, social and governance
(EESG) principles in the formulation and implementation of the Company's plans and strategies. The
Committee is supported by the Sustainability Officer and is composed of five (5) members of the Board, with
all independent directors of the Company serving as members. The President and Chief Executive Officer
of the Company serves as the Chairperson of the Committee.

The ESG Committee held four (4) meetings in 2023.

Talent and Remuneration Committee Meetings Attended/Held

Jose Victor Emmanuel A. de Dios 4/4
Sherisa P. Nuesa 4/4
Cesar A. Buenaventura 4/4
Octavio Victor R. Espiritu 4/4
Eric Ramon O. Recto 4/4

The Committee of Inspectors of Ballots and Proxies

Membership consists of the Chief Audit Executive as Chairperson, the Assistant Corporate Secretary, and
a representative of the external auditor of the Company as members.

This committee is mandated to validate proxies issued by the stockholders and to determine if the same are
in accordance with existing laws, rules, and regulations prior to the annual stockholders’ meeting. This
committee also serves as the default inspector of ballots and tabulator of votes during the annual
stockholders’ meeting, and as such, is required to coordinate closely with the Office of the Corporate
Secretary and the independent validator of votes appointed for the purpose.

SEC Form 17-A 163

The Committee held one (1) meeting in 2023.

Committee of Inspectors of Ballots Meetings Attended/Held

and Proxies
Mailene M. Cabral 1/1
Romelyn A. Obligacion 1/1
(representing Atty. Ninez C. Maningat)
Representative from the 1/1
External Auditor

Corporate Orientation and Corporate Governance Trainings for Directors

The members of the Board are required to regularly attend seminars and conferences to continuously
update themselves on the developments in policy, regulations, and standards on good corporate
governance. Under the Company’s Manual, the members of the Board are also provided with such
resources, trainings, and continuing education to enable each member to actively, independently, and
judiciously participate in Board and Committee meetings.

Newly elected members of the Board undergo orientation programs for them to have a working knowledge
of the statutory and regulatory requirements affecting the Company. They are also required to keep abreast
with industry developments and business trends in order that they may promote the Company’s
competitiveness and sustainability. Attendance in a corporate governance seminar conducted by a duly
recognized private or governmental institution is also a mandatory requirement prior to their assumption of
office and during their term of office.

The Company also provides general access to training courses to its directors as a matter of continuous
professional education as well as to enhance their skills as directors and keep them updated in their
knowledge and understanding of the Company’s business. The Board and Board Committees are also
allowed to hire independent legal counsel, accountants, or other consultants to advise them when
necessary.

At every board meeting, directors are provided with a management update on the operational and financial
status of, and other relevant matters, about the Company to ensure that the directors are continuously
informed of new developments and the performance of the Company.

Upon assumption of office, a director appointed for the first time undergoes a corporate orientation program
conducted by the Office of the Corporate Secretary. The corporate orientation program includes modules
on the operations of the Company, as well as relevant contracts of the Company. The orientation also covers
existing policies, rules, and regulations of the Company. The curriculum of the orientation program may be
revised as often as necessary to include other relevant subjects and matters relating to the Company. In
addition to the corporate orientation program for new directors, the Office of the Corporate Secretary informs
the Board of any updates on the matters covered by the orientation program. The corporate orientation
program and updates are usually given during the regular meetings of the Board.

These programs notwithstanding, Manila Water encourages its directors to attend external trainings,
courses or continuing professional education programs on corporate governance. The Directors are
required to inform the Office of the Corporate Secretary of the trainings or courses attended for record and
disclosure purposes.

Board Meetings

Under the Charter of the Board, the Board institutionalized a policy of holding at least six (6) meetings in a
year. These include the organizational meeting of the Board which is held immediately after the annual
stockholders’ meeting. Under the By-laws, special meetings may be called by the Chairman, Vice Chairman,
President or at the instance of a majority of the members of the Board.

To promote transparency, the Board has a policy of requiring the presence of at least one independent
director in all its meetings. In the past years, the Board has not conducted a meeting without the presence
of at least one independent director.

SEC Form 17-A 164

Under the Manual, a director’s absence, or non-participation, for whatever reason in more than fifty percent
(50%) of all Board meetings, both regular and special, in a year is a ground for temporary disqualification in
the succeeding election.

Quorum in Board Meetings

Under the By-Laws of the Company, at least two-thirds (2/3) of the members of the Board (as fixed in the
Articles of Incorporation) shall constitute a quorum for the transaction of corporate business, and every
decision of at least a majority of the directors present at a meeting at which there is a quorum shall be valid
as a corporate act, except when a higher quorum is required in contracts binding on the Company.

In the absence of a quorum, a majority of the directors present may adjourn a meeting from time to time
until a quorum is obtained.

Attendance of Directors in Board Meetings

In 2023, a total of twenty (20) meetings were held by the Board (exclusive of the Annual Stockholders’
Meeting), as follows:

1. January 4, 2023 Special Asynchronous Meeting of the Board of Directors

2. February 1, 2023 Special Asynchronous Meeting of the Board of Directors
3. February 14, 2023 Special Asynchronous Meeting of the Board of Directors
4. February 27, 2023 Special Asynchronous Meeting of the Board of Directors
5. February 28, 2023 Special Asynchronous Meeting of the Board of Directors
6. March 28, 2023 Regular Meeting of the Board of Directors
7. April 14, 2023 Organizational Meeting of the Board of Directors
8. April 19, 2023 Special Asynchronous Meeting of the Board of Directors
9. May 10, 2023 Special Asynchronous Meeting of the Board of Directors
10. May 11, 2023 Regular Meeting of the Board of Directors
11. May 31, 2023 Special Asynchronous Meeting of the Board of Directors
12. June 30, 2023 Special Asynchronous Meeting of the Board of Directors
13. August 2, 2023 Special Asynchronous Meeting of the Board of Directors
14. August 9, 2023 Regular Meeting of the Board of Directors
15. September 16, 2023 Special Asynchronous Meeting of the Board of Directors
16. October 11, 2023 Special Meeting of the Board of Directors
17. October 11, 2023 Special Asynchronous Meeting of the Board of Directors
18. November 3, 2023 Special Asynchronous Meeting of the Board of Directors
19. November 10, 2023 Special Asynchronous Meeting of the Board of Directors
20. December 6, 2023 Regular Meeting of the Board of Directors

The Non-Executive Directors’ (NED) Meeting was held on December 6, 2023.

Mr. Jose Victor Emmanuel A. de Dios, the Company’s President and Chief Executive Director, and
Mr. Donato C. Almeda, the Company’s Chief Regulatory Officer, are Executive Directors and were not
parties to the meeting of the Non-Executive Directors.

SEC Form 17-A 165

The attendance of each member of the Board of Directors is listed below:

ATTENDANCE IN 2023 BOARD MEETINGS

Name Board Meetings

Percentage Present
Attended

Enrique K. Razon, Jr. 20/20 100%

Jose Victor Emmanuel A. de Dios 20/20 100%
Donato C. Almeda 20/20 100%
Rafael D. Consing, Jr. 21 1/1 100%
Antonino T. Aquino 20/20 100%
Jose Rene Gregory D. Almendras 22 15/17 88%
Alberto M. de Larrazabal 19/20 95%
Sandy A. Alipio23 8/8 100%
Katrina Maria S. Razon24 3/3 100%
Sherisa P. Nuesa 20/20 100%
Cesar A. Buenaventura 20/20 100%
Octavio Victor R. Espiritu 20/20 100%
Eric Ramon O. Recto 18/20 90%

During the 2022 Annual Stockholders’ Meeting (ASM) held on April 24, 2023, and conducted virtually via
https://conveneagm.com/ph/MWCI2023ASM, the Chairman of the Board of Directors, President and CEO
of the Company, and the Chairman of the Audit Committee along with the other directors and executive
officers of the Company, were in attendance. Their attendance was duly recorded in the minutes of the said
meeting. The minutes of the ASM may be viewed on our website.

Board Remuneration

The Board determines a level of remuneration for directors that shall be sufficient to attract and retain
directors and compensate them for attendance at meetings of the Board and Board Committees and their
performance of numerous responsibilities of a Board member. The Talent and Remuneration Committee is
responsible for recommending to the Board the fees and other compensation for directors. In fulfilling this
duty, the Talent and Remuneration Committee is guided by the objective of ensuring that the proposed fees
should fairly compensate the directors for the work required consistent with the Company’s size and
industry.

In a special meeting held on April 11, 2011, the Board approved an increase in the Board remuneration.
The approved remuneration for each member of the Board consists of ₱500,000.00 as a fixed annual
retainer fee, ₱200,000.00 for each meeting of the Board actually attended, and ₱50,000.00 for each
Committee meeting actually attended. This Board remuneration structure was approved by the stockholders
in its annual stockholders’ meeting held on April 11, 2011. In the same annual meeting, the stockholders
approved the amendment of the By- laws, giving the Board of Directors the authority to determine the
amount, form, and structure of the fees and other compensation of the directors.

On November 18, 2021, the Board resolved that Executive Directors shall not receive per diem remuneration
for their participation and attendance in the meetings of the Board and Board Committees.

On February 24, 2022, the Board approved to discontinue the payment of per diems of directors for their
attendance and participation in asynchronous meetings of the Board and Board Committees.

The directors of the Board received the following gross per diem remuneration for attending fourteen (14)
Board meetings, the meeting of the Non-Executive Directors, the annual stockholders’ meeting, and their
respective Committee Meetings in 2023:

21
Mr. Consing resigned as Director effective January 18, 2023, in view of his retirement from the Razon Group of Companies to join government
service.
22
Mr. Almendras resigned as Director effective October 12, 2023, in view of the sale by Ayala Corporation and Philwater Holding s Company,
Inc. of a part of their shareholdings in the Company.
23
Mr. Alipio was elected as a Director on August 2, 2023. He serves the unexpired term of Mr. Consing.
24
Ms. Razon was elected as a Director on November 3, 2023. She serves the unexpired term of Mr. Almendras
SEC Form 17-A 166
 ATTENDANCE IN ATTENDANCE
2023 THE MEETINGS IN THE
NAME RETAINER OF THE BOARD MEETINGS OF TOTAL
FEE AND THE BOARD
STOCKHOLDERS COMMITTEES
Enrique K. Razon, Jr. ₱625,000 ₱1,400,000 ₱– ₱2,025,000
Jose Victor Emmanuel A. de Dios * ₱– ₱– ₱– ₱–
Donato C. Almeda* ₱– ₱– ₱– ₱–
Antonino T. Aquino ₱625,000 ₱1,600,000 ₱100,000 ₱2,325,000
Jose Rene Gregory D. Almendras ₱500,000 ₱1,000,000 ₱– ₱1,500,000
Alberto M. de Larrazabal ₱625,000 ₱1,400,000 ₱– ₱2,025,000
Sandy A. Alipio ₱– ₱– ₱– ₱–
Katrina Maria S. Razon ₱125,000 ₱400,000 ₱– ₱525,000
Sherisa P. Nuesa ₱625,000 ₱1,600,000 ₱600,000 ₱2,825,000
Cesar A. Buenaventura ₱625,000 ₱1,600,000 ₱650,000 ₱2,875,000
Octavio Victor R. Espiritu ₱625,000 ₱1,500,000 ₱550,000 ₱2,775,000
Eric Ramon O. Recto ₱625,000 ₱8,000 ₱550,000 ₱1,975,000
TOTAL ₱5,000,000 ₱11,400,000 ₱2,450,000 ₱18,850,000
*Mr. de Diosand Mr. Almeda are Executive Directors, and as such, do not received per diems for attending Board or Board
Committee Meetings.

Board Committees

The Board is supported by several committees, namely: Executive Committee, Audit Committee, Corporate
Governance Committee, Board Risk Oversight Committee, Related Party Transactions Committee,
Nomination Committee, and the Talent and Remuneration Committee. These Board Committees are
required to report to the Board a summary of the actions taken on matters submitted to them for
consideration at the next meeting of the Board. Each of the Board Committees has its own charter that
provides guidance on the manner by which its members and the committees should exercise their functions
and mandates.

SEC Form 17-A 167

Purpose, Vision, Mission and Core Values

To ensure good governance of the Company, the Board is mandated under the Manual to formulate
strategic objectives, key policies, and procedures for the management of the Company. Furthermore, the
Board has established the mechanism for monitoring and evaluating the performance of the Management,
especially that of the President and CEO. Under its Charter, the Board is enjoined to periodically review the
vision, mission, corporate strategic objectives, and key policies of the Company to sustain its market
competitiveness and enhance stockholder value. During a special meeting held on August 25, 2021, the
Board approved the new mission and vision statements of the Company. In addition, the Board approved
the Company’s purpose statement and core values, as representative of its strategic and corporate
objectives:

Purpose: Better lives and resilient economies through critical infrastructure.

Vision: A global leader in providing quality water & environmental services

supportive of sustainable development.

Mission: Deliver world-class services tailored to the needs of the communities we

serve, through sustainable solutions and purpose-driven, empowered,
innovative teams.

Core Values: Care (Malasakit)

We demonstrate our innate Filipino value of genuine compassion and

ownership to fulfill our mission to our employees, customers, environment,
and our nation.

Excellence (Kahusayan)

We create meaningful value and deliver high returns for all our stakeholders
by delivering the highest quality products and services, investing in projects
that improve quality of life while upholding the welfare of our employees.

Tenacity (Katatagan)

We bravely face challenges head-on with a ‘can do, must do’ attitude and
we follow through on our promises with maximum effort and persistence.
We quickly embrace change and ensure competent completion of every job
we commit to.

Collaboration (Bayanihan)

We live and breathe the work that we do, and we seek out colleagues and
partners that share the same commitment to utilize our diverse strengths
and work together in synergy towards our purpose.

Integrity (Integridad)

We are ethical, fair, and transparent in our business practices at every level
of our organization. We always choose to do what’s right and take
accountability for our actions.

Pioneering (Tagapanguna)

We apply new approaches, explore new methods and ideas, in order to

create innovative solutions and deliver lasting impact for the communities in
which we operate.

SEC Form 17-A 168

Annual Board Evaluation

The Board has an annual evaluation process that is required to be accomplished by the directors, which
enables an informed and objective assessment of the following:
1. Board and Board Committee processes and meetings;
2. Compliance with the responsibilities and functions of the Board and Board Committees;
3. Board-Management relationship;
4. Board Member self-evaluation; and
5. Evaluation of the performance of the President and CEO and Senior Management

This evaluation enables the Board and the Management to determine areas that need improvement on the
very scope and criteria of the evaluation process. It also allows the Board to explain their respective ratings
and to provide their own comments on the matters discussed in the evaluation. The scope and criteria for
the Board Evaluation Process is contained in the Charter of the Board of Directors. The Charter of the Board
is available for download at the Company’s website.

In addition to the annual Board evaluation process, the Audit Committee adopted SEC Memorandum
Circular No. 4 Series of 2012 on the Guidelines for the Assessment of the Performance of Audit Committees
of Companies Listed on the Philippine Stock Exchange which took effect on June 30, 2012. Pursuant to
this, an annual evaluation is also being conducted to assess the performance of the Audit Committee.

These annual evaluation processes are facilitated by the Office of the Corporate Secretary in coordination
with the Corporate Governance Committee. The Company also engages a third-party evaluator to assess
the performance of the Board, the Company’s Chairman, and individual directors every three years.

Office of the Corporate Secretary

The Corporate Secretary ensures that the Board and the Management follow internal and external rules and
regulations and facilitates clear communications between the Board and Management. More importantly,
the Company recognizes the mandate of the Office in championing the compliance of the Board and the
Company with good corporate governance practices and policies. For this purpose, the Office of the
Corporate Secretary, under its Charter, is mandated to coordinate with the Office of the Compliance Officer
with regard to the formulation and implementation of the corporate governance practices of the Company,
especially those relevant to and affecting the Board. This is to ensure that sound corporate governance
practices are embedded across the entire organization.

The Management

The Management is primarily responsible in deciding and implementing the day-to-day affairs of the
Company. Management determines the Company’s activities by putting the Company’s targets in concrete
terms and by formulating the basic strategies for achieving these targets.

Management is primarily accountable to the Board for the operations of the Company. As part of its
accountability, it is required to provide the Board with adequate, regular, and timely information on the
operations and affairs of the Company.

Reliance on information volunteered by management may not be sufficient in all circumstances and further
inquiries may have to be made by a member of the Board of Directors to enable him to properly perform his
duties and responsibilities. Hence, the Board should be given independent access to the management, the
Chief Finance Officer and Treasurer, the Chief Compliance Officer, the Risk Officer, the Internal Audit,
External Auditor, and the Corporate Secretary.

Succession Planning

The Board, with the assistance of the Remuneration Committee, the Nomination Committee, and the
Company’s Corporate Human Resources Group, has adopted a professional development program for
employees, officers, and senior management. The succession management process has been an
established practice since the early years of Manila Water and over time, and has been embedded in
leadership responsibilities across the organization. It has been a critical enabler of company operations,
having enabled succession in key leadership positions and mid management roles across the organization.

SEC Form 17-A 169

Through its robust succession management, the Company has put in place a process to determine the
competencies, potential for growth, knowledge and experience necessary for particular roles and positions.
This enables the company to identify key talents for purposes of succession in both leadership and technical
roles. The development of a leadership and technical talent pool is crucial to the success of Manila Water
in the future. Hence, it is one of the top strategic priorities of the Company.

The succession of both leadership and technical talent pool are given equal emphasis to ensure that we
build the right talents to sustain our operations and support our growth. Talents identified to be part of the
succession pool undergo the following:

1. Creation of an Individual Development Plan (IDP) that outlines possible developmental areas and
stretch assignments. Documentations as well as implementation of the IDP is the responsibility of
the successor’s line manager. Monitoring execution is done through the Corporate Human
Resources Group.
2. Coaching and mentoring sessions.

The Company’s Corporate Human Resources Group, with strong sponsorship from our CEO and our senior
leaders in the company, manages the succession process but it is ultimately driven by the CEO and
business leaders who work with HR and devote their time and energy to spot, develop and retain high
performing and high potential talents who eventually become part of the leadership team of the organization.

The Chief Regulatory Officer

The Chief Regulatory Officer (CRO) shall be appointed by the Board. He has general supervision over the
regulatory compliance by the Company and its regulated business. The CRO shall maintain regular
communication lines with regulators, government agencies and public officers with jurisdiction over the
Company and its businesses and assets. The activities and regulatory filings and reports of units with
regulatory compliance functions shall be coordinated with him.

The CRO shall have such other responsibilities as the Board may impose upon him.

The Chief Administrative Officer

The Chief Administrative Officer (CAO) shall be appointed by the Board. He is accountable for the
administrative operations of the Company. This includes, but is not limited to, leading the development of
an administrative and operational strategy while supporting the financial strategic intent for the Company,
metrics tied to that strategy, and the on-going development and monitoring of performance and control
systems designed to preserve the Company’s assets and report accurate results.

The CAO shall have such other responsibilities as the Board may impose upon him.

The Chief Operating Officer/s

The Chief Operating Officer/s (COO) shall be appointed by the Board. The Board may appoint two (2) or
more COOs as the operational model of the Company requires. He is tasked with overseeing the day-to-
day operational functions of the Company.

The COOs shall have such other responsibilities as the Board may impose upon them.

The Chief Legal Officer

The Chief Legal Officer (CLO) shall be appointed by the Board. He provides direction on the major legal
issues of the Company and establishes plans to minimize and manage legal risks.

The CLO shall have such other responsibilities as the Board may impose upon him.

SEC Form 17-A 170

The Chief Compliance Officer

In accordance with the Manual, and in order to ensure adherence to the principles and best practices in
corporate governance, the Board appoints a Chief Compliance Officer whose primary role is to
operationalize the Manual and monitor overall compliance with its provisions and requirements.

Moreover, the Chief Compliance Officer is tasked with the duty to communicate with the SEC on matters
relating to the Company’s compliance with the Manual and the clarification of matters required by the said
Commission. Together with his primary function, the Chief Compliance Officer is also tasked to oversee the
implementation of the Company’s Code of Business Conduct and Ethics and the Related Party Transactions
Policy.

The Chief Risk Officer

The Chief Risk Officer (CRO) oversees the entire risk management function and leads the development,
implementation, maintenance, and continuous improvement of the ERM program, processes, and tools. The
CRO is the Vice Chairman of the Enterprise Risk Management Executive Committee (ERMEC). He also
leads the Enterprise Risk Management (ERM) Department in facilitating the ERM process and in collecting
and analyzing key business risk information for reporting to the ERMEC and to the BROC.

The Vice Presidents

The Company shall have such number of Vice Presidents as may be required by the operational
requirements of the Company. The Vice Presidents shall assist the President and CEO and exercise such
other functions as may be provided in the By-Laws or delegated by the Board.

In Manila Water Company, Inc., the Vice Presidents are referred to as “Group Directors.”

Enterprise Risk Management Department

The ERM Department is responsible for developing risk management tools, methodologies and processes,
as well as sustained implementation of the ERM Program across the Company. It acts as the primary driver
of developing a risk-aware culture and ensures that key risks are identified and managed by the respective
risk owners. With the ERM mindset continuously being assimilated into the Company’s culture and practices,
ERM has been embedded in key decision-making processes.

Investor Relations Team

The Investor Relations Team (IR) keeps the Company’s investors and other relevant stakeholders regularly
informed of developments in the Company’s business. For this purpose, IR conducts briefings on quarterly
business results, supported as necessary by meetings/calls with shareholders, fund managers, and
analysts. These activities are aimed to keep investors updated on the financial and operating performance
of the Company, along with other material information and developments. Furthermore,
in collaboration with the Company’s Corporate Communications team, a press briefing is held each year
immediately following the annual stockholders' meeting to engage other stakeholders, specifically the
media.

The IR Team may be reached through:

Mailing Address: Manila Water Company, Inc.

Investor Relations
2F MWSS Administration Building
489 Katipunan Road, 1105 Balara,
Quezon City, Philippines

E-mail: [email protected]

Contact Person: Mark S. Orbos

Head of Investor Relations

SEC Form 17-A 171

The Sustainability Officer

Manila Water’s Sustainability Officer monitors and reports on the environmental, sustainability and social
impacts of the Company’s business operations and communicates sustainability concerns, risks, and
initiatives from the management to the Board of Directors through the Environment, Social, and Governance
(ESG) Committee. The Sustainability Officer has, among others, the following duties, and responsibilities:

• Map out enterprise-wide sustainability issues and opportunities and act on them;
• Provide management with material insights in formulating and implementing an overall sustainability
strategy where social, economic, and environmental goals intersect;
• Set short- and long-term enterprise-wide sustainability targets which align with the Company's
societal commitments as well as expectations of external stakeholders;
• Manage existing and emerging business risks through collaboration with stakeholders by identifying
short- and long-term tactics to address sustainability issues, in accordance with the sustainability
framework and commitments of the Company;
• Undertake material indicator assessments to determine key sustainability-related issues, in
particular, those having significant impact on the external environment and stakeholders and on the
long-term ability of the Company to create value;
• Take the lead in the Company's response to evolving sustainability frameworks (and their
associated indicators) vis-a-vis developments in the operating environment;
• Identify material economic, environmental, ethical, and social impact of the Company's operations
and craft strategies to address their effect on the sustainability of the business;
• Monitor and analyze the enterprise-wide non-financial performance of the Company vis-a-vis stated
sustainability targets;

• Align sustainability performance communications with key advocacy initiatives of the Company
which address operating risks and further enhance business opportunities;
• Prepare the Sustainability Report for submission to the Securities and Exchange Commission and
ensure that the Company is compliant with the prescribed reporting standards and frameworks for
Sustainability Reporting;
• Take the lead in developing and nurturing an environmental and sustainability ethic and
competencies of all employees through sharing of leading-edge sustainability knowledge and
providing training; and
• Perform other activities as requested by the ESG Committee.

The Corporate Governance Manual

Manila Water is dedicated to observing the highest standards of corporate governance to serve the best
interests of its stakeholders, including the investing public. The Board, the Management, the employees,
and stockholders of the Company believe that sound and effective leadership is fundamental to its continued
success and stability. These principles and practices enable the Company to create and sustain increased
value for all the stockholders.

The corporate governance policy of Manila Water is primarily contained in its Manual of Corporate
Governance. The Company’s corporate governance framework is based on the principles of accountability,
fairness and transparency, and sustainability. The Manual is available for download at the Company's
website.

The Manual contains the governance principles that the Company applies in all its undertakings and
supplements Manila Water's Articles of Incorporation, By-laws, and other related policies. The Manual
instituted the policies on:
a. the Board of Directors’, the Board Committees' and management's roles, functions and
responsibilities in relation to good governance;
b. the institution of training for the Board of Directors, executive directors and employees;
c. evaluation of the Board and Management's performance;
d. the enhanced roles of the Corporate Secretary and Audit Committee in corporate governance;
e. general guidelines on related party transactions; and
f. conflict of interest and prompt and adequate disclosures.

SEC Form 17-A 172

Manila Water is in full compliance with the code of corporate governance and all disclosure rules of the
Philippines Stock Exchange and the Securities and Exchange Commission.

As a key policy, the members of the Board and key executives of the Company are required to disclose to
the Board any material interest, whether direct or indirect, that they may have in any transaction or matter
that directly affects the Company. The Company commits, at all times, to adequately and timely disclose all
material information that could potentially affect Manila Water's share price and such other information that
are required to be disclosed pursuant to the Securities Regulations Code (SRC) and its Implementing Rules
and Regulations (IRR) and other relevant laws. This information includes, but is not limited to, results of
earnings, acquisition or disposal of significant assets, off-balance sheet transactions, changes in Board
membership, as well as changes in shareholdings of majority stockholders, directors and officers, and
related party transactions. The Company also discloses its corporate governance practices, corporate
events calendar, and other material information on its website in a timely manner.

The directors are required to comply with all disclosure requirements of the Manual and the SRC and its
IRR, and to voluntarily disclose any conflict of interest, whether actual or potential, upon its occurrence. The
disclosure of any conflict of interest, including related party transactions, is required to be made fully and
immediately. In cases where related party transactions exist, it is the Company's policy that complete
information on such transaction be immediately disclosed, and, if a director or officer is involved, the director
or officer concerned shall not be allowed to participate in the decision-making process. The policy also
mandates that a director who has a continuing conflict of interest of a material nature shall be required to
resign, or if the Board deems appropriate, be removed as a member of the Board.

The Company's Manual is continuously being revised in accordance with the directives and issuances of
the SEC and to comply with the highest standards of corporate governance. For the year 2022, the Manual
was amended on November 30, 2022. 25

Related Party Transactions

To further instill the Company's policies on related party transactions, the Board adopted the Policy on
Related Party Transactions (the "RPT Policy"). The RPT Policy confirms that the Company and its
subsidiaries shall enter into any related party transactions solely in the ordinary course of business, on
ordinary commercial terms, and on the basis of arm's length arrangements, which shall be subject to
appropriate corporate approvals and actions of the Company or the related parties, as the case may be.

Any related party transactions entered into by the Company, or its affiliates shall be in accordance with
applicable law, rules, and regulations, and the RPT Policy. Related party transactions entered into by the
Company with one or more of its directors or officers are voidable at the option of the Company, unless the
transaction is deemed fair and reasonable under the circumstances and at arm's length, and the procedure
for the procurement and approval for similar transactions was strictly complied with.

The RPT Policy provides for the process of approving related party transactions, as well as the implications
for violations. In addition, the RPT Policy prohibits related party transactions involving loans and/or financial
assistance to a director and loans and/or financial assistance to members of the Management, except when
allowed pursuant to an established Company benefit or plan. Under the RPT Policy, the approval of the
Related Party Transactions Committee is required for material related party transactions.

On November 26, 2019, the Board approved the amendments Company’s Policy on Related Party
Transactions in order to comply with the provisions of the Rules on Material Related Party Transactions for
Publicly Listed Companies of the SEC. The amendments updated the definition of Company-Recognized
Material Related Party Transactions, SEC-Defined Materiality Threshold, Related Party Registry, Related
Party Transactions, Related Parties, Affiliate, Associate, Substantial Shareholder, and Significant Influence.

25 The substantial revisions to the Manual include the option to hold meetings of the Board Committees, the Board of Directors, and
Stockholders by remote communication; the adoption of a bribery and anti-corruption policy; revision of the Qualifications of
Independent Directors to include the requirements in the Company’s legislative franchise; and to update the list of Executive Officers to
include the Chief Regulatory Officer, the Chief Administrative Officer, the Chief Operating Officer(s), and the Chief Legal Officer.
SEC Form 17-A 173
The Code of Business Conduct and Ethics

The Company's commitment to the highest standards of ethics, good governance, competence, and integrity
was institutionalized through the Code of Business Conduct and Ethics. The Code sets forth the standards
for professional and ethical behavior, as well as articulate acceptable and unacceptable conduct and
practices in internal and external dealings of the Company. The Code should be properly disseminated to
the Board, senior management, and employees, and should also be disclosed and made available to the
public through the company website.

The Code addresses the issues and relationships between and among the Company's directors, officers
and employees, and its customers, contractors, subcontractors, consultants, service providers, suppliers,
business partners, government offices, other stakeholders, and any other parties (including individuals,
partnerships, and bodies corporate) associated with the Group. The Code includes policies on: Honesty and
Fair Dealing; Conflict of Interest; Corporate Entertainment and Gifts; Insider Trading; Disclosure; Creditor
Rights; Anti-Corruption; and Anti-Sexual Harassment.

Honesty and Fair Dealing

The core principle of the Company is to conduct business honestly and fairly with its investors, suppliers,
contractors, service providers, customers, and employees and other third parties. Directors, Officers, and
employees shall act honestly, ethically and in compliance with all applicable laws, rules and regulations and
protect the name and reputation of the Company. Directors, Officers, and employees shall not engage in
any unfair dealing practices, such as taking advantage of anyone through abuse of confidential information,
manipulation, concealment, or misrepresentation or other similar acts. Officers and employees involved in
the procurement process for services, materials, supplies, and equipment shall strictly comply with the
Company's Procurement Policy. The Procurement Policy is an integral part of this Code.

Directors, Officers, and employees are required to immediately report all suspected or actual fraudulent or
dishonest acts to the Board, in case of directors, and to the immediate supervisor or to the Office of the
Chief Compliance Officer in case of officers and employees. The Company shall promptly identify and
investigate any suspected fraudulent or dishonest acts. Without prejudice to applicable administrative
sanctions, the Company may pursue civil and/or criminal actions against directors, officers and employees
as may be warranted.

The Implementing Guidelines on the Reporting of Fraudulent or Dishonest Acts are contained in the Whistle
blower Policy of the Company.

Reporting of Fraudulent or Dishonest Acts (Whistle blower Policy)

The Whistle Blower Policy provides for procedures to be followed to encourage all covered persons to report
fraudulent or dishonest acts in order to protect the good name and reputation of the Company, and in the
process, discourage the commitment of such acts.

Directors, officers, employees and third parties are required to immediately report all suspected or actual
fraudulent or dishonest acts to the Board in case of directors, and to the immediate supervisor or to the
Office of the Chief Compliance Officer in case of officers, employees and third parties. The Company shall
promptly identify and investigate any suspected fraudulent or dishonest acts.

Without prejudice to applicable administrative sanctions, the Company may pursue civil and/or criminal
actions against directors, officers, employees and third parties as may be warranted.

To ensure protection of the reporter from any form of retaliation or discrimination, the identity of the person
making the report and the contents of the report shall be kept confidential to the extent legally permissible.

Conflict of Interest

The policy prohibits conflict of interest situations involving all directors, officers, employees, and their
relatives up to the fourth degree of consanguinity and/or affinity, including common law relationships.

SEC Form 17-A 174

Under the policy, a conflict of interest arises when a director, an officer or employee appears to have a direct
or indirect personal or financial interest in any transaction, which may deter or influence him from acting in
the best interest of the Company. It is not required that there be an actual conflict; it is only required that
there could be perceived conflict by an impartial observer.

All contracts/arrangements by directors, officers and employees, and their relatives that violate this policy
on conflict of interest shall be terminated immediately and correspondingly reported to the Office of the Chief
Compliance Officer, for appropriate action under the Code.

Corporate Entertainment and/or Gifts

The Company’s policy on Corporate Entertainment and/or Gifts prohibits all officers and employees from
accepting corporate entertainment/gifts from suppliers, contractors, and other business partners, which can
be viewed as influencing the manner by which an officer or employee may discharge his duties.

Insider Trading

The Company’s Insider Trading Policy prohibits directors, officers, and confidential employees from trading
in Manila Water shares five (5) days before and two (2) days after the release of quarterly and annual
financial statements; and two (2) days after the disclosure of any material information other than those
disclosed through quarterly and annual financial results.

All Directors, Key Officers, employees, consultants, advisers of the Company, and members of the
immediate families of directors and key officers (the “Covered Persons”) who are living in the same
household as the directors and key officers who have direct or indirect knowledge, from time to time, of
material facts or changes in the affairs of the Company, which have not been disclosed to the public,
including any information likely to affect the market price of the Company's shares, shall:

a) Not trade in the Company's securities directly or indirectly; and

b) Not communicate, directly or indirectly, such material non-public information to any person until the
material non-public information is disseminated to the public and two (2) trading days have lapsed
from the disclosure thereof to allow the market to absorb such information.

Directors and officers who may be covered by the reporting requirements of the SEC and the Philippine
Stock Exchange (PSE) in respect of their shareholdings in the Company or any changes thereof, are
required to report their dealings in Manila Water shares within three (3) business days after the transaction.
Likewise, all other Covered Persons shall report to the Office of the Chief Compliance Officer within ten (10)
calendar days from the end of each quarter their trades with Company’s securities during such quarter. All
Directors, Officers, and employees are required to report their trades on a quarterly basis to the Office of
the Chief Compliance Officer within fifteen (15) days from the end of the quarter.

In alignment with the law, the definition of material non-public information has been amended.

Disclosure

The disclosure policy encourages prompt and adequate disclosure of all material facts or changes in the
affairs of the Company, including any information likely to affect the market price of the Company’s shares.

Creditor Rights

The policy regarding Creditor Rights institutionalizes the Company's adherence to its loan covenants and
agreements for the protection of the rights of the creditors of the Company. No distribution or disposal of
assets of the Company shall be made except: when allowed by the law; or by decrease of capital stock; or
upon lawful dissolution and after payment of all its debts and liabilities; when allowed by the material
agreements of the Company, but without prejudice to vested rights.

SEC Form 17-A 175

Anti-Corruption

The Anti-Corruption Policy strictly prohibits giving and facilitating of payments to any private or government
officials or employees, their agents, or intermediaries, to expedite or secure performance of any
governmental action, or to gain any perceived or actual favor or advantage from any private or government
entities. The Company must ensure that it and its directors, officers and employees fully comply with the
laws governing bribes, unlawful payments, and other corrupt practices.

Anti-Sexual Harassment

This policy recognizes the Company’s protection of the dignity of its human resources, stakeholders, and
customers. All forms of sexual harassment shall be dealt with appropriately and in accordance with the
applicable and relevant laws, rules, and regulations.

Diversity in Board Membership

The Company promotes equality among the members of the Board regardless of gender, age, ethnicity, or
political, religious, or cultural beliefs.

Procurement Policies

The objectives of the Procurement Policies are to promote transparency in the procurement process, and
to afford vendors equal access to business opportunity with Manila Water, with the end view of enhancing
vendor participation and protecting the interest of the Group. Officers and employees of the Group involved
in the procurement process for services, materials, supplies and equipment for the Group are required to
strictly comply with its Procurement Policies.

The Vendors' Code of Conduct

The Vendors' Code of Conduct sets out the rules that will guide the Group’s vendors in the performance of
their obligations and/or transacting business with Manila Water, thus avoiding acts contrary to standards,
policies, laws, and morals. As business partners of the Group, its vendors are expected to act with utmost
integrity, efficiency, and competence in performing awarded contracts and/or delivering ordered products.
Moreover, they should demonstrate a strong sense of responsibility for public safety and interest that will
ultimately promote and protect the good name of the Group. The Vendors' Code of Conduct is deemed
incorporated in the contracts of the Group with its suppliers, vendors, and contractors.

A copy of the Vendor's Code of Conduct is downloadable at the Company website.

The Enterprise Risk Management Policy

Manila Water has established an Enterprise Risk Management (ERM) Program which aims to use a globally
accepted approach in managing imminent and emerging risks in its internal and external operating
environments. Under the ERM Program, Manila Water shall appropriately respond to risks and manage
them in order to increase stockholder value and enhance its competitive advantage.

To bolster the risk oversight and management functions relating to strategic, financial, operational,
compliance, legal and other risks of the Company, the Board, on August 11, 2015, approved the
establishment of a separate Board Risk Oversight Committee (BROC). Subsequently, on November 26,
2015, the Board approved the Charter of the BROC, which transferred the risk oversight and management
functions to the BROC from the Audit Committee.

SEC Form 17-A 176

Safety, Health and Welfare Policy

The Group is committed to achieving customer satisfaction, upholding environmental sustainability, and
ensuring safety, preservation of life and health of its employees and all stakeholders. To achieve these
objectives, it is the policy of the Group to:

• Continuously assess, implement, and improve its processes and business conduct by adopting best
practices and keeping abreast with the latest innovations to ensure reliability and efficiency of its
operations;

• Ensure full compliance with relevant laws and standards in pollution prevention and environmental
sustainability, safety and health protection, as well as applicable regulatory standards and customer
requirements related to the quality of its products and services;

• Build a strong culture committed to customer satisfaction, environmental protection, health and
safety through education, training and awareness at all levels of the organization that will empower
its employees, contractors, suppliers and stakeholders;

• Actively promote the conservation and optimal use of precious resources by constantly creating and
improving existing programs aimed at pollution prevention, waste minimization, resource
conservation and environmental sustainability;

• Systematically manage and control its health and safety risks through effective risk assessment
processes; and

• Regularly revisit, improve, develop and maintain its Quality, Environment, Health and Safety
management system to ensure its effectiveness and relevance to the changing needs of the
company to drive continuous improvement in operations, quality, environmental, health and safety
performance and services.

Stockholder Rights

It is the duty of the directors to promote stockholder rights, remove impediments to the exercise of
stockholder rights and provide effective redress for violation of their rights.

The Board shall be instrumental in removing excessive costs and other administrative or practical
impediments to stockholders participating in meetings and/or voting in person. The directors shall pave the
way for the electronic filing and distribution of stockholder information necessary to make informed decisions
subject to legal constraints.

Right to Notice of Meetings and Right to Attend Meetings

To promote transparency and goodwill, it is a company policy to encourage the attendance of all its
stockholders, including minority and non-controlling, and institutional investors, at the stockholders' meeting
of the Company. The Board should encourage active stockholder participation by sending the Notice of
Annual and Special Stockholders’ Meeting with sufficient and relevant information at least twenty-eight (28)
days before the scheduled meeting.

Unless otherwise provided by law or the By-laws, stockholders as of Record Date constituting at least a
majority of the outstanding voting capital stock of the Company is necessary to constitute a quorum. The
stockholders may be present in person or represented by proxy.

Right to Appoint a Proxy

The stockholders shall be apprised ahead of time of their right to appoint a proxy if they cannot attend their
meetings in person. Subject to the requirements of the By-laws, the exercise of that right shall not be unduly
restricted and any reasonable doubt about the validity of a proxy should be resolved in the stockholders’
favor.

SEC Form 17-A 177

Right to Propose the Holding of and to Attend Meetings
The Manual provides that all stockholders, including minority and non-controlling, shall have the right to
propose the holding of a meeting as well as the right to propose items in the agenda of the meeting, provided
that the items proposed are for legitimate business purposes, all in accordance with the By-Laws and the
existing laws.

With regard to the right of stockholders to propose agenda items, the Company shall ensure the exercise of
the right is included in the notice and agenda of the stockholders’ meeting as an item for the consideration
of such other business as may properly come before the meeting.

Furthermore, the Company adheres to Memorandum Circular No. 7-2021 of the Securities and Exchange
Commission which allows stockholders holding at least 10% of the outstanding capital stock to request to
hold a physical meeting.

Right to Make Nominations to the Board of Directors

Every stockholder, including non-controlling and minority, has a right to submit a nomination for election to
the Board. The stockholders, in making their nominations, or the Company, are encouraged to make use of
professional search firms or external sources of candidates when searching for candidates to the Board.

Voting Right and Right to Participate at Stockholders Meetings

In all items for approval, each share of voting stock entitles its registered owner as of the Record Date to
one (1) vote.

Voting shall be by poll and the Company shall provide the mechanism to implement the same at every
stockholders’ meeting. Any stockholder entitled to vote may vote in person, through remote communication,
in absentia, or be represented by proxy at any regular or special stockholders’ meetings.

Under the Company’s By-laws, the affirmative vote of stockholders as of the Record Date constituting at
least a majority of the outstanding voting capital stock of the Company is necessary to approve matters
requiring stockholders’ action, unless otherwise provided for under existing laws, with the exception of the
following corporate acts and measures which must be ratified and/or approved by the stockholders
representing or constituting at least two thirds (2/3) of the outstanding capital stock of the Company:

• Amendment of the Articles of Incorporation;

• Adoption and/or amendment of the By-Laws (unless the power to amend By Laws has been
delegated to the Board by the stockholders);
• Sale, lease, exchange, mortgage, pledge, or other disposition of all or substantially all of the
corporate property;
• Incurring, creating, or increasing bonded indebtedness;
• Increase or decrease of capital stock;
• Merger or consolidation of the Company with another company;
• Investment of corporate funds in another corporation or business for any purpose other than the
primary purpose for which it was organized; and
• Dissolution of the Company, among others.

For the election for directors, every stockholder shall have the right to vote, in person or by proxy, the number
of shares owned by him for as many persons as there are directors to be elected, or to cumulate his votes
by giving one candidate as many votes as the number of such directors multiplied by the number of his
shares shall equal, or by distributing such votes on the same principle among any number of candidates.

The stockholders shall also have an opportunity during the stockholders' meeting to ask questions and raise
their issues relevant to the agenda items. The minutes of the meeting records the stockholders’ questions
and corresponding answers given by the directors and officers of the Company.

SEC Form 17-A 178

The Board should encourage active stockholder participation by making the result of the votes taken during
the most recent Annual or Special Stockholders' Meeting publicly available the next working day. In addition,
the Minutes of the Annual and Special Stockholders' Meeting should be made available to the public through
the Company website within five (5) business days from the end of the meeting. The draft minutes of the
2023 Annual Stockholders Meeting held on April 14, 2023 was posted on the Company’s website on April
21, 2023.

In addition, the Company is compliant with Memorandum Circular No. 14-2020 of the Securities and
Exchange Commission which allows stockholders holding at least 5% of the outstanding capital stock to
request to submit proposals on items for inclusion in the agenda of the meetings of stockholders

Dividend Rights
The Company continues its practice of offering its stockholders an equitable share of the Company's profits.
In 2013, the Board of Directors confirmed its dividend payout policy which entitles holders of common shares
and participating preferred shares to annual cash dividends equivalent to 35 percent of the prior year's net
income payable at least semiannually, on such dates as may be determined by the Board of Directors,
subject to applicable rules and regulations on record dates and payment dates. The participating preferred
shares participate in the earnings at a rate of 1/10 of the dividends paid to a common share. As a matter of
policy, payment dates of dividends declared are fixed within thirty (30) days from date of declaration.

Pre-Emptive Right
All stockholders have pre-emptive rights or the right to subscribe to new shares of the Company, unless
there is a specific denial of this right in the Articles of Incorporation or an amendment thereto.

The Articles of Incorporation may provide the specific rights and powers of stockholders with respect to the
shares they hold, all of which are protected by law so long as they are not in conflict with the Revised
Corporation Code.

Right to Information and Inspection

In addition to regular posting and disclosure of material information at the Company website, a stockholder
shall be provided with periodic reports regarding the performance of the Company upon written request for
a legitimate purpose. Stockholders shall be allowed to inspect corporate books and records in accordance
with the Revised Corporation Code and shall be provided an annual report, including the financial
statements, without cost or restrictions.

Appraisal Right
In accordance with the Corporation Code, shareholders may exercise appraisal right under the following
circumstances:
a. In case any amendment to the Articles of Incorporation has the effect of changing or restricting the
rights of any stockholders or class of shares, or of authorizing preferences in any respect superior
to those of outstanding shares of any class, or of extending or shortening the term of corporate
existence;
b. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or
substantially all of the corporate property and assets as provided in the Corporate Code; and
c. In case of merger or consolidation.

Remedies for Infringement of Stockholder Rights

The Board can establish and maintain an alternative dispute resolution system in the Company that can
amicably settle intra-corporate disputes such as arbitration, mediation, and conciliation. This is without
prejudice to the legal remedies of the parties under existing laws and the parties’ ability to avail of their legal
rights to address or resolve conflicts or differences in the proper venue as may be appropriate or warranted.

SEC Form 17-A 179

Quorum and Voting Procedures at the Stockholders Meetings

Unless otherwise provided by law or the By-laws, stockholders as of Record Date constituting over one-half
of the stock present or represented is necessary to constitute a quorum. The stockholders participating in
person, by proxy, through remote communication, or in absentia electronically or otherwise shall be counted
in determining the existence of a quorum. Under the Company’s By-laws, the affirmative vote of stockholders
constituting at least a majority of the outstanding voting capital stock of the Company is necessary to
approve matters requiring stockholders’ action, except in cases where the applicable law or the By-lads of
the Company require a greater number.

In all items for approval, each share of voting stock entitles its registered owner as of the Record Date to
one vote.

For the election for directors, every stockholder shall have the right to vote, in person or by proxy, the number
of shares owned by him for as many persons as there are directors to be elected, or to cumulate his votes
by giving one candidate as many votes as the number of such directors multiplied by the number of his
shares shall equal, or by distributing such votes on the same principle among any number of candidates.

Voting will be by poll. Stockholders may opt for manual or electronic voting either in person, through remote
communication, in absentia, or be represented by proxy at any regular or special meetings of the
stockholders. For manual voting, each stockholder will be given a ballot upon registration to enable the
stockholder to vote in writing per item in the agenda. For electronic voting, there will be computer stations
placed outside the Ballroom where stockholders may cast their votes electronically. Both the paper ballot
and computer platform for electronic voting will contain the proposed resolutions for consideration by the
stockholders and each proposed resolution will be shown on screens in front of stockholders as the same
is taken up at the meeting. Stockholders may cast their vote anytime during the meeting.

In addition, a stockholder may vote electronically in absentia using the online web address provided by the
Company subject to validation purposes. A stockholder voting electronically in absentia shall be deemed
present for purposes of quorum.

All votes will be counted and tabulated by the Office of the Corporate Secretary and the Committee of
Inspectors of Ballots and Proxies. The results of voting will be validated by SGV & Co., the independent
party appointed for the purpose.

For the election of the eleven (11) members of the Board of Directors, the eleven (11) nominees receiving
the highest number of votes will be declared elected as directors of the Company. However, if there are only
eleven (11) nominees, all nominees shall be declared elected upon approval of motion.

Public Ownership

The Company is compliant with the requirement of the PSE on minimum public ownership with 40.96% of
its shares subscribed and owned by the public as of December 31, 2023. In compliance with the
requirements of the PSE, the Company regularly and timely discloses its public ownership report and
immediately makes a public disclosure of any change thereon.

SEC Form 17-A 180

Summary of Legal and Beneficial Ownership of the Board, Key Officers and Major Shareholders

December 31, Class December 31, Class

Name
2023 of Shares 2022 of Shares
Directors
Enrique K. Razon, Jr. 900,052,260 Common 900,052,260 Common
Jose Victor Emmanuel A. de Dios 356,642 Common 278,910 Common
Donato C. Almeda 87,870 Common 1,000 Common
Antonino T. Aquino 12,749,543 Common 12,749,543 Common
Alberto M. de Larrazabal 1 Common 1 Common
Sandy A. Alipio 200 Common N.A. N.A.
Katrina Maria S. Razon 100 Common N.A. N.A.
Jose Rene Gregory D. Almendras N.A. Common 5,000 Common
Rafael D. Consing N.A. Common 100 Common
Sherisa P. Nuesa 5,093, 607 Common 5,093,607 Common
Cesar A. Buenaventura 920,001 Common 770,001 Common
Octavio Victor R. Espiritu 188,300 Common 188,300 Common
Eric Ramon O. Recto 10,000 Common 10,000 Common
Officers
Roberto Jose R. Locsin 238,735 Common 23,500 Common
Gigi Iluminada T. Miguel 93,201 Common 18,000 Common
Amabelle C. Asuncion 47,810 Common – N.A.
Arnold Jether A. Mortera 377,788 Common 342,900 Common
Melvin John M. Tan 102,770 Common 29,970 Common
Ana Mari B. Bentilanon – N.A. – N.A.
Shoebe Hazel B. Caong 214,500 Common N.A. N.A.
Joemar B. Emboltorio 348,700 Common N.A. N.A.
Evangeline M. Clemente 332,695 Common 309,400 Common
Janine T. Carreon 540,386 Common 514,800 Common
Liwayway T. Sevalla 90,353 Common 63,000 Common
Nestor Eric T. Sevilla 331,620 Common N.A. N.A.
Jhoana R. Tamayor 800 Common N.A. N.A.
Valerie R. Tagana – N.A. N.A. N.A.
Michael M. Mayo – N.A. N.A. N.A.
Maidy Lynne B. Quinto 198,659 Common 175,000 Common
Silverio Benny J. Tan 74,500 Common 74,500 Common
Ninez C. Maningat – N.A. – N.A.
Mailene M. Cabral – N.A. – N.A.

MAJOR STOCKHOLDERS
December 31, Class December 31, Class
2023 of Shares 2022 of Shares
Trident Water Company, Inc.* 900,052,260 Common 900,052,260 Common
Ayala Corporation 577,947,464 Common 866,946,195** Common
Trident Water Company, Inc. 2,691,268,205 Participating 2,691,268,205 Participating
Preferred Preferred
Philwater Holdings Corporation, Inc. 872,487,863 Participating 1,308,731,793 Participating
Preferred Preferred
*Same as Enrique K. Razon, Jr.
** Includes shares held through PCD Nominee Corporation (21,409,000 shares) and Michigan Holdings, Inc. (1,00,000), a wholly
owned subsidiary of Ayala Corporation

SEC Form 17-A 181

Company Website

In the pursuit of the Company’s thrust to continuously improve awareness of best practices in the conduct
of its business and operations especially in corporate governance across the organization, including
dealings with its business partners and customers, Manila Water constantly updates its website,
www.manilawater.com with a section dedicated to corporate governance and investor relations. The
Corporate Governance section of the website contains all disclosures made by the Company to the PSE
and the SEC, as well as its Manual, the Code, the Charters of the Board and its Committees, the various
corporate governance policies and other matters and information of relevance to the stockholders and all
stakeholders. The Company discloses its corporate governance practices, corporate events calendar, and
other material information on its website in a timely manner.

The Investor Relations section houses all information that may be required by the investors, stockholders,
and stakeholders. The site has been enhanced to be user-friendly and is always accessible to the public.

Corporate Governance Recognition and Awards

The Company’s commitment to uphold the highest standards of good corporate governance has again been
confirmed and recognized through the prestigious awards it has received. On September 28, 2023, the
Company received a 3-golden arrow award from the Institute of Corporate Directors (ICD) for its
performance rating against the 2022 ASEAN Corporate Governance Scorecard (ACGS).

On January 20, 2023, the Company received its first 4-golden arrow recognition from the ICD for its
performance rating against the 2021 ACGS. Previously, the Company received 3-golden arrow recognition
for its rating against the 2019 and 2018 ACGS. In 2018, it was also named as one of ASEAN’s Top 50
Publicly Listed Companies on Corporate Governance at the 2018 ASEAN Corporate Governance Awards,
Top 10 Philippine Publicly Listed Companies, and Top 5 Industry Sector by the Institute of Corporate
Directors, and Platinum Awardee for Excellence in Environmental, Social and Governance Practices by the
Asset.

SEC Form 17-A 182

 SIGNATURES

Pursuant to the requirements of Section 17 of the Code and Section 141 of the Corporation Code, this
re 9i� is�r.ed on behalf of the issuer by the undersigned, thereunto duly authorized, in Quezon City on
_M\(
�
1 1_ LUL' 2024.

By: o.__ L�
JOSE 4o�;;:U;L A. DE DIOS
President and Chief Executive Officer

Corporate Secretary Chief Finance Officer and Treasurer

183

@m
RO /✓�---- ARN .MORTERA
Chief Administrative Officer and Chief Operating Officer, East Zone
Chief Operating Officer for International
Business

Al�iit.
�

�JJ
Chief Operating Officer\J,n-East Zone Philippines

1 1 APR 2024
Subscribed and sworn to before me this_ day of ___ 2024, affiants expressing to me the following
proof of identity with details as follows:

Name ID Type and Number Date of Expiry

JOSE VICTOR EMMANUEL A DE DIOS Passport/ P6884076B May 31, 2031
SILVERIO BENNY J. TAN Passport / P4294418B January 3, 2030
GIGI ILUMINADA T. MIGUEL Passport / P1234042B March 26, 2029
ROBERTO JOSE R. LOCSIN Passport/ P5245255B June 21, 2030
ARNOLD JETHER A. MORTERA Passport/ P0675950C June 23, 2032
MELVIN JOHN M. TAN Passport/ P2690551 B July 30, 2029

Doc No. ____,

�-- '-­ ATTY. h.PH MACARAEG
Page No. _SW--"---­ Notary Public fol' Quezon City
Book No. ---'-'-­ Until December 31, 2024
Series of 2024. PTR No. 4966235-0 f1f1J/2023 O.C.
IBP No. 200840 January 29 2022 Q.C.
Roll No. 62630 J4/2Q/2013
MCLE VII • 0027321 /4114f25
Adm. Matter No. NP-551 (2023--20?:i)
TIN No. 304-872-615.000
 CERTIFICATE OF FULL COMPLIANCE
WITH THE MANUAL OF CORPORATE GOVERNANCE

The Manual of Corporate Governance (the “Manual”) of Manila Water Company, Inc. (the “Company”), as
approved on May 18, 2017, and as amended on December 1, 2022 pursuant to SEC Memorandum Circular No.
19, Series of 2016, adopts the leading practices and principles of corporate governance.

To the best of the undersigned’s knowledge and belief, for the year 2023, full compliance therewith has been
made since the adoption of the Manual and the latest revisions which are as follows:

1. Holding of Board Committee Meetings, Board Meetings, and Stockholders’ Meetings by Remote
Communication to be consistent with the Company’s amended By-laws.

2. Adoption of a Bribery and Anti-Corruption Policy.

3. Amendment of the Qualifications of Independent Directors to incorporate the qualifications specified

in the Company’s legislative franchise.

4. Update of the List of Executive Officers to include the Chief Regulatory Officer, Chief Administrative
Officer, Chief Operating Officer(s), and Chief Legal Officer.

This Certification is issued in accordance with the requirement of Section 6.2(b) of Article VI of the Manual and
is executed to attest to the truth of the foregoing facts.

April 15, 2024 at Quezon City, Philippines.

Attested by:

AMABELLE C. ASUNCION JOSE VICTOR EMMANUEL A. DE DIOS

Chief Legal Officer and President and Chief Executive Officer
Chief Compliance Officer
 CERTIFICATION OF INDEPENDENT DIRECTOR

I, SHERISA P. NUESA, Filipino, of legal age, and a resident of

after having been duly sworn to in accordance with law do hereby declare
that:

1. I am a nominee for independent director of Manila Water Company, Inc. (the

“Company”) and have been its independent director since April 15, 2013.

2. I am af�iliated with the following companies or organizations (including Government-

Owned and Controlled Corporations):

COMPANY/ORGANIZATION POSITION/RELATIONSHIP PERIOD OF SERVICE

Far Eastern University, Inc. Director August 2010 to present
Vicsal Development Corporation Board Adviser March 2012 to present
FERN Realty Corporation Director August 2012 to present
Integrated Micro Electronics, Inc. Independent Director April 2018 to present
NextGen Organization of Women September 2021 to
Trustee and Vice-President
Corporate Directors present
AREIT, Inc. Independent Director April 2023 to present
Metro Retail Stores Group, Inc. Director October 2023 to present
Justice Reform Initiative (JRI) Board Adviser May 2023 to present
Financial Executives Institute
Trustee January 2024 to present
(FINEX) Foundation

3. I possess all the quali�ications and none of the disquali�ications to serve as an

Independent Director of Manila Water Company, Inc., as provided for in Section 38 of
the Securities Regulation Code, its Implementing Rules and Regulations and other SEC
issuances.

4. I am not related to any director, of�icer, or substantial shareholder of the Company and
its subsidiaries and af�iliates other than the relationship provided under Rule 38.2 of
the Securities Regulation Code.

5. To the best of my knowledge, I am not the subject of any pending criminal or

administrative investigation or proceeding.

6. I am neither in government service nor af�iliated with any government agency or

government-owned and controlled corporation.

7. I shall faithfully and diligently comply with my duties and responsibilities as

independent director under the Securities Regulation Code and its Implementing
Rules and Regulations, Code of Corporate Governance and other SEC issuances.

8. I shall inform the Corporate Secretary of Manila Water Company, Inc. of any changes
in the abovementioned information within �ive (5) days from its occurrence.

9. My quali�ication to be an Independent Director is dependent on the acceptance of the

stockholders and the Securities and Exchange Commission that I have continued to

1
•

exhibit my independence and objective outlook over the years as Independent

Director and later Lead Independent Dlrector of the Company, and despite the change
in control of the Company from the Ayala Group to the Razon Group three (3) years
ago, as a meritorious justification for exemption from the 9-year term llmit for
Independent Directors.

Done on at 0.UEZON CITY

ATTY. M� MACARAEG
Doc. No. J-� ; Notary Public for Quezon City
Page No. 7s'U'-. Until Oecembef 31, 2024
Book No.-'-� PTR No. 496623W rTf'J.7/2023 0.C.
Series of 2024. IBP No. 200840 January 29 2022 O.C.
Rott No. 62630 /4129(2013
MCLE VII· 0027321 /4114125
Adm. Matter No. NP-551 (2023-2024)
TIN No. 304-872-615-000

2
 CERTIFICATION OF INDEPENDENT DIRECTOR

CESAR A. BUENAVENTURA, Filipino, of legal age and a resident of -

fter having been duly sworn to in accordance with law do hereby d�

1. I am a nominee for independent director of Manila Water Company, Inc. (the

"Company") and have been its independent director since April 16, 2021.

2. I am affiliated with the following companies or organizations (including Government-

Owned and Controlled Corporations):

POSITION/
COMPANY/ORGANIZATION PERIOD OF SERVICE
RELATIONSHIP
Pilipinas Shell Foundation, Inc. Founding Trustee and
Chairperson 1982 to present
DMCI Holdings, Inc. Vice-Chairperson 1995 to present
Petroenergy Resources Corp. Lead Independent
Director 1995 to present
Semirara Mining and Power Corp. Director 1997 to present
Buenaventura, Echauz and Partners Inc. Chairperson 2001 to present
iPeople, Inc. Independent Director 2002 to present
Shell Pilipinas Corporation Independent Director 2012 to _present
Concepcion Industrial Corp. Lead Independent
Director 2013 to present
Bloomberry Cultural Foundation Trustee 2015 to present
ICTSI Foundation, Inc. Trustee 2015 to present
International Container Terminal Services Inc. Independent Director 2019 to present
Manila Water Foundation, Inc. Independent Trustee 2021 to present

3. I possess all the qualifications and none of the disqualifications to serve as an

Independent Director of Manila Water Company, Inc., as provided for in Section 38 of the Securities
Regulation Code, its Implementing Rules and Regulations and other SEC issuances.

4. I am not related to any director, officer, or substantial shareholder of the Company

and its subsidiaries and affiliates other than the relationship provided under Rule 38.2 of the
Securities Regulation Code.

5. To the best of my knowledge, I am not the subject of any pending criminal or

administrative investigation or proceeding.

6. I am neither in government service nor affiliated with any government agency or

government-owned and controlled corporation.

7. I shall faithfully and diligently comply with my duties and responsibilities as

independent director under the Securities Regulation Code and its Implementing Rules and
Regulations, Code of Corporate Governance and other SEC issuances.

8. I shall inform the Corporate Secretary of Manila Water Company, Inc. of any changes
in the abovementioned information within five (5) days from its occurrence.

1
 MAI(2' C
Doneon _______ at
iUl4 QUEZON CTIY

JlN���1:=-

C$� A. BUENAVENTURA
Affiant
0 _&
SUBSCRIBED AND SWORN to before meon __..!.__' 6_M_�R_2_2
_ QUEZON CITY
• •
affiant onally ap
. .

Doc.No. �5�
PageNo. 1::\ ATTY. MA ,CK JOSEPH
CARAEG
BookNo. -��
I Notary Public for Que.. ·n City
Series of 2024. Until December 31, 2024
PTR No. 4966235-0 fll'2.7/202'J
ISP No. 200840 January 29 oC
0.C.
2022
Roll No. 62630 /4129/2013
MCLE VII • 0027321 /4/14f}.S
Adm. Matter No. NP•551
(2023-2o24}
TIN No. 304-672-615-000

2
,
CERTIFICATION OF INDEPENDENT DIRECTOR

I OCTAVIO VICTOR R. ESPIRITU, Filipino, of legal age and a resident of

after having been duly sworn to in accordance with law do
hereby declare that:

1. I am a nominee for independent director of Manila Water Company, Inc. (the "Company")
and have been its independent director since April 16, 2021.

2. I am affiliated with the following companies or organizations (including Government-

Owned and Controlled Corporations):

POSITION/
COMPANY/ORGANIZATION PERIOD OF SERVICE
RELATIONSHIP
MAROV Holding Company, Inc. Chairperson April 15, 1988 to present
Carlos P. Romulo Foundation Trustee May 2, 1996 to present
Pueblo de Oro Golf and Country Club Director October 19, 1998 to present
Philionine Stratbase Consultancv, Inc. Director September 1, 2004 to present
GANESP Ventures, Inc. Chairperson July 22, 2011 to present
The Countrv Club, Inc. Director July 23, 2015 to present
Bank of the Philippine Islands Director April 7, 2020 to April 22, 2024
Bloomberrv Resorts Corporation Independent Director April 15, 2021 to present
Philippine Dealing System Holdings
Director April 28, 2022 to present
Coro. and Subsidiaries

3. I possess all the qualifications and none of the disqualifications to serve as an

Independent Director of Manila Water Company, Inc., as provided for in Section 38 of the Securities
Regulation Code, its Implementing Rules and Regulations and other SEC issuances.

4. I am not related to any director, officer, or substantial shareholder of the Company and
its subsidiaries and affiliates other than the relationship provided under Rule 38.2 of the Securities
Regulation Code.

5. To the best of my knowledge, I am not the subject of any pending criminal or

administrative investigation or proceeding.

6. I am neither in government service nor affiliated with any government agency or

government-owned and controlled corporation.

7. I shall faithfully and diligently comply with my duties and responsibilities as

independent director under the Securities Regulation Code and its Implementing Rules and Regulations,
Code of Corporate Governance, and other SEC issuances.

8. I shall inform the Corporate Secretary of Manila Water Company, Inc. of any changes In
the abovementioned information within five (5) days from its occurrence.

1
Done on 2 6 MAR 2024 at 0UEZON CITY

SUBSCRIBED AND SWORN to before me• on

•
2 6 M�R• 2024 at QUEZON CITY
•
affiant

ATTY. AR K JOSE
MACARAEG
Nota"!' Public tor •-uewn City
Until Decem!J;l, 31, 2024
Doc.No. ��t\l\ PTR No. 4966235-0 ll/27/202":1
Q c_
PageNo. 4� IBP No. 20084� Ja�uary 29
2022 ci.c.
Roll No. 026_,0 /4/2.9/20lJ
Book No.�'��
M�lE VII· 0027321 /4!14/25
Series of 2024. A1:fm. f,-.alt�r N?· NP-551 {202
3-20241
TIN ,>10. :i()4..872-615--00()

2
 CERTIFICATION OF INDEPENDENT DIRECTOR

0, Filipino, of legal age and a resident of -

fter having been duly sworn to in accordanc�

1. I am a nominee for independent director of Manila Water Company, Inc. (the "Company")
and have been its independent director since April 16, 2021.

2. r
am affiliated with the following companies or organizations (including Government-
Owned and Controlled Corporations):

PERIOD OF
COMPANY/ORGANIZATION POSITION/RELATIONSHIP
SERVICE
DITO CME Holdings Corp.
Director 2005 to present
(formerlv ISM Communications Corooration)
0-Tech Alliance Holdin£s. Inc. President 2009 to present
Philiooine Bank of Communications Chairoerson 2012 to oresent
Bedfordbury Development Corporation Chairperson and President 2014 to oresent
Aboitiz Power Corporation Independent Director 2018 to oresent
PH Resorts Group Holdings Inc. Independent Director 2018 to Present
Miescor Infrastructure Development
Director 2022 to present
Corooration
Stonepeak Infrastructure Partners Senior Adviser 2022 to Present
Alphaland Corporation Chairperson and 2023 to present
Chief Executive Officer
Atok-Big Wedge Co., Inc. Chairperson and
2023 to present
Chief Executive Officer

3. I possess all the qualifications and none of the disqualifications to serve as an

Independent Director of Manila Water Company, Inc., as provided for in Section 38 of the Securities
Regulation Code, its Implementing Rules and Regulations and other SEC issuances.

4. I am not related to any director, officer, or substantial shareholder of the Company and
its subsidiaries and affiliates other than the relationship provided under Rule 38.2 of the Securities
Regulation Code.

5. To the best of my knowledge, I am not the subject of any pending criminal or

administrative investigation or proceeding.

6. I am neither in government service nor affiliated with any government agency or

government-owned and controlled corporation.

7. I shall faithfully and diligently comply with my duties and responsibilities as

independent director under the Securities Regulation Code and its Implementing Rules and Regulations,
Code of Corporate Governance and other SEC issuances.

8. I shall inform the Corporate Secretary of Manila Water Company, Inc. of any changes in
the abovementioned information within five (5) days from its occurrence.

1
Done on 1 � MAR 2024 at QUEZON CITY

ERIC RAMON 0. RECTO

Affiant

SUBSCRIBED AND SWORN to before me on 1 9 MAR 2024

affiant onall a ear

Doc.No. ..2.,�
'Y_�
Page No. _4....,.. Notary Pubiic for Quezon City
Book No. ____._1__ Until Decemt>,r 31, 2024
PTR No.4966235-017'27/202:i O.C.
Series of 2024.
IBP No. 2008'10 January 29 2022 a.c.
Roll No. 62630 /4/29120 i3
MCLE VII • 0027321 /4/14/25
Adm. Matter No. NP-551 (2023-2024)
TIN No. 3\.'4-872-615-000

2
Item 14. Exhibits

Exhibit 1 – Consolidated Financial Statements

A. Statement of Management’s Responsibility for Financial Statements

B. Report of Independent Auditors

C. Statements of Financial Position as of December 31, 2023 and 2022

D. Statements of Comprehensive Income for the years ended December 31, 2023, 2022
and 2021

E. Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023,
2022 and 2021

F. Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021

G. Notes to Financial Statements

H. Supplementary Schedules

H.1 Report of Independent Auditor on Supplementary Schedules

H.2 Report of Independent Auditor on Components of Financial Soundness

Schedule A Financial Assets as of December 31, 2023

Schedule B Amounts Receivable from Directors, Officers, Employees, Related Parties,

and Principal Stockholders (other than Related Parties) as of
December 31, 2023

Schedule C Amounts Receivable from Related Parties which are Eliminated During the
Consolidation of the Financial Statements as of December 31, 2023

Schedule D Long-term Debt (Third Parties and MWSS) as of December 31, 2023

Schedule E Indebtedness to Related Parties (Long-term Loans from Related Parties)

as of December 31, 2023

Schedule F Guarantees of Securities of Other Issuers as of December 31, 2023

Schedule G Capital Stock as of December 31, 2023

Schedule H Organization Chart / Conglomerate Map as of December 31, 2023

Schedule I Financial Ratios as of December 31, 2022 and 2023

Schedule J Beneficial Ownership of Shares as of December 31, 2023

Others

A. Certification from the Treasurer that the General Form of Financial

Statements has the Basic and Material Data

B. General Form of Financial Statements

C. Parent Company Audited Financial Statements

SEC Form 17-A 184

Exhibit 2 – Reports on SEC Form 17-C

As part of its commitment to promote the corporate values of transparency and accessibility of material
information to its investors, the Company fully complies with the reporting and disclosure requirements of
the law as well as the relevant rules and regulations issued by the SEC and the PSE. The Company adopts
a policy of prompt and accurate disclosure of all information that may be material to the investing public.
The Company conducts quarterly investors’ and analysts’ briefings and regular meetings with shareholders
and fund managers to keep them up to date on matters affecting the business of the Company.

Below is a summary of the corporate disclosures as of December 31, 2023.

Disclosure Date Subject/Description

January 3, 2023 Grant of 103,869 Shares to Esmeralda R. Quines under the Stock Incentive Plan
January 4, 2023 Appointment of Group Director for Corporate Communication Affairs Group
January 4, 2023 Initial Statement of Beneficial Ownership of Securities of Mr. Nestor Eric T. Sevilla, Jr.
January 6, 2023 Foreign Ownership Report (as of December 31, 2022)
January 6, 2023 Report on the Number of Shareholders (as of December 31, 2022)
January 16, 2023 2022 Amended General Information Sheet
January 16, 2023 Grant of 2,152 Shares to Esmeralda R. Quines under the Stock Incentive Plan
January 16, 2023 Public Ownership Report as of December 31, 2022
January 16, 2023 List of Top 100 Stockholders as of December 31, 2022 (Common Shares)
January 18, 2023 Resignation of Mr. Rafael D. Consing, Jr. as MWC Director
January 20, 2023 PhP200 Million 10-Year Term Loan Facility of Bulakan Water Company, Inc.
Manila Water Receives the 4 Golden Arrow Recognition at the
January 24, 2023
2022 ACGS Golden Arrow Awards
January 30, 2023 Participation of Directors and Reportable Officers in Corporate Governance Training for 2022
[Amend-4] Receipt of the January 17, 2023 Notice of the Supreme Court En Banc in “Manila
February 3, 2023 Water Company, Inc. vs. the Secretary of the Department of Environment and Natural
Resources, et.al.” with G.R. No. 206823
February 6, 2023 2022 Amended General Information Sheet
February 7, 2023 Foreign Ownership Report (as of January 31, 2023)
February 7, 2023 Report on the Number of Shareholders (as of January 31, 2023)
February 13, 2023 Notice of Analysts’ Briefing to be held on February 28, 2023
February 14, 2023 [Amend-1] Notice of 2023 Annual Stockholders’ Meeting
February 15, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Antonino T. Aquino
Clarification of News Article: “Manila Water spending P833 M for Rizal expansion” posted in
February 16, 2023
Manila Bulletin (Online Edition) on February 15, 2023
February 17, 2023 PhP3 Billion 10-Year Term-Loan Facility for Manila Water Company, Inc.
February 28, 2023 2022 Audited Financial Statements
February 28, 2023 Appointment of Group Director for East Zone Business Operations
February 28, 2023 Full Year 2022 Performance Results
February 28, 2023 Initial Statement of Beneficial Ownership of Securities of Ms. Shoebe Hazel B. Caong
March 2, 2023 [Amend-1] Appointment of Group Director for East Zone Business Operations
[Amend-1] Initial Statement of Beneficial Ownership of Securities of
March 6, 2023
Ms. Shoebe Hazel B. Caong
March 7, 2023 Foreign Ownership Report (as of February 28, 2023)
March 7, 2023 Report on the Number of Shareholders (as of February 28, 2023)
March 7, 2023 Preliminary Information Statement
March 9, 2023 List of Stockholders as of Record Date of March 2, 2023
March 22, 2023 Definitive Information Statement
March 22, 2023 2022 Amended General Information Sheet
March 24, 2023 [Amend-2] Notice of 2023 Annual Stockholders’ Meeting
March 27, 2023 [Amend-1] Definitive Information Statement
March 28, 2023 Declaration of Cash Dividends
March 28, 2023 Declaration of Cash Dividends for Unlisted Preferred Shares

SEC Form 17-A 186

 Disclosure Date Subject/Description
April 12, 2023 Foreign Ownership Report (as of March 31, 2023)
April 12, 2023 Report on the Number of Shareholders (as of March 31, 2023)
April 14, 2023 Results of the 2023 Annual Stockholders’ Meeting of Manila Water Company, Inc.
April 14, 2023 Results of the Organizational Board Meeting of Manila Water Company, Inc.
April 14, 2023 17-A Report (Annual Report for the period ended December 31, 2022)
April 17, 2023 Public Ownership Report as of March 31, 2023
April 17, 2023 List of Top 100 Stockholders as of March 31, 2023 (Common Shares)
April 17, 2023 Change in Number of Issued and Outstanding Shares
April 18 2023 [Amend-1] Change in Number of Issued and Outstanding Shares
April 24, 2023 Vesting of Shares Granted Under the Stock Incentive Plan (SIP)
April 24, 2023 Foreign Ownership Report (as of March 31, 2023)
April 25, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Roberto Jose R. Locsin
April 25, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Donato C. Almeda
April 26, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Nestor Eric T. Sevilla, Jr.
April 26, 2023 Change in Indirect Ownership of Beneficial Securities of Ms. Maidy Lynne B. Quinto
April 26, 2023 Change in Indirect Ownership of Beneficial Securities of Ms. Evangeline M. Clemente
April 27, 2023 Change in Indirect Ownership of Beneficial Securities of Ms. Gigi Iluminada T. Miguel
Change in Indirect Ownership of Beneficial Securities of
May 2, 2023
Mr. Jose Victor Emmanuel A. De Dios
May 2, 2023 Change in Indirect Ownership of Beneficial Securities of Atty. Amabelle C. Asuncion
May 2, 2023 Change in Indirect Ownership of Beneficial Securities of Ms. Liwayway T. Sevalla
May 2, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Arnold Jether A. Mortera
May 2, 2023 Change in Indirect Ownership of Beneficial Securities of Ms. Janine T. Carreon
May 3, 2023 Notice of Analysts' Briefing to be held on May 11, 2023
May 5, 2023 2023 General Information Sheet
May 8, 2023 Foreign Ownership Report (as of April 30, 2023)
May 8, 2023 Report on the Number of Shareholders (as of April 30, 2023)
May 11, 2023 Seventh Amendment of the Revised Concession Agreement
May 11, 2023 17- Q Report (Quarterly Report for the period ended March 31, 2023)
May 11, 2023 Unaudited Performance Results For the First Quarter of 2023
May 23, 2023 Receipt of the May 15, 2023 Notice of Judgment of the Supreme Court En Banc
May 30, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Cesar A. Buenaventura
Integrated Annual Corporate Governance Report (I-ACGR) as of and
May 30, 2023
for the period ended December 31, 2022
May 31, 2023 Appointment of Group Director for East Zone Operations
June 7, 2023 Foreign Ownership Report (as of May 31, 2023)
June 7, 2023 Report on the Number of Shareholders (as of May 31, 2023)
June 7, 2023 [Amend-1] Appointment of Group Director for East Zone Operations
June 7, 2023 Initial Statement of Beneficial Ownership of Securities of Mr. Joemar B. Emboltorio
June 27, 2023 PhP1.53 Billion 10-Year Term Loan Facility of Clark Water Corporation
June 29, 2023 Change in Indirect Ownership of Beneficial Securities of Mr. Cesar A. Buenaventura
June 30, 2023 Appointment of Group Director for Corporate Procurement
June 30, 2023 Change in Stock Transfer Agent
July 5, 2023 Initial Statement of Beneficial Ownership of Securities of Ms. Jhoana Redoloza-Tamayor
July 7, 2023 Foreign Ownership Report (as of June 30, 2023)
July 7, 2023 Report on the Number of Shareholders (as of June 30, 2023)
July 17, 2023 Public Ownership Report as of June 30, 2023
July 17, 2023 List of Top 100 Stockholders as of June 30, 2023 (Common Shares)
Decision of the Supreme Court En Banc in Water for All Refund Movement, Inc. vs.
July 20, 2023
Metropolitan Waterworks and Sewerage System, et.al. with G.R. No. 212581
August 2, 2023 Notice of Analysts’ Briefing to be held on August 10, 2023
August 2, 2023 Election of Sandy A. Alipio as a MWC Director
August 7, 2023 Foreign Ownership Report (as of July 31, 2023)
August 7, 2023 Report on the Number of Shareholders (as of July 31, 2023)
August 7, 2023 Initial Statement of Beneficial Ownership of Securities of Mr. Sandy A. Alipio
August 10, 2023 17- Q Report (Quarterly Report for the period ended June 30, 2023)
August 10, 2023 Unaudited Performance Results for the First Half of 2023
August 18, 2023 PhP1.6 Billion 10-Year Term Loan Facility of Laguna AAAWater Corporation
August 29, 2023 [Amended-1] 2023 Amended General Information Sheet of Manila Water Company, Inc.
September 7, 2023 Foreign Ownership Report (as of August 31, 2023)
September 7, 2023 Report on the Number of Shareholders (as of August 31, 2023)

SEC Form 17-A 187

 Disclosure Date Subject/Description
Clarification of News Article: “Manila Water plans P1.15-trillion investment until 2047” posted
September 20, 2023
in BusinessWorld (Online Edition) on September 19, 2023
October 5, 2023 Foreign Ownership Report (as of September 30, 2023)
October 6, 2023 Report on the Number of Shareholders (as of September 30, 2023)
October 11, 2023 Appointment of Group Director for Supply Chain Management Group
Repurchase of Common Shares and Participating Preferred Shares from Ayala Corporation
October 11, 2023
and Philwater Holdings Company, Inc.
October 11, 2023 Repurchase of Common Shares from Ayala Corporation
October 11, 2023 [Amended-1] Repurchase of Common Shares from Ayala Corporation
October 12, 2023 Resignation of Jose Rene Gregory D. Almendras as Director
October 12, 2023 Foreign Ownership Report (as of October 11, 2023)
October 16, 2023 Public Ownership Report as of September 30, 2023
October 16, 2023 List of Top 100 Stockholders as of September 30, 2023 (Common Shares)
October 18, 2023 Initial Statement of Beneficial Ownership of Securities of Ms. Valerie R. Tagana
October 20, 2023 Statement of Changes in Beneficial Ownership of Securities of Ayala Corporation
October 31, 2023 Statement of Changes in Beneficial Ownership of Securities of Ms. Sherisa P. Nuesa
November 3, 2023 Election of Katrina Maria S. Razon as a MWC Director
November 6, 2023 Foreign Ownership Report (as of October 31, 2023)
November 6, 2023 Report on the Number of Shareholders (as of October 31, 2023)
November 6, 2023 Notice of Analysts’ Briefing to be held on November 13, 2023
November 7, 2023 Initial Statement of Beneficial Ownership of Securities of Ms. Katrina Maria S. Razon
November 9, 2023 [Amended-2] 2023 Amended General Information Sheet of Manila Water Company, Inc.
November 13, 2023 17- Q Report (Quarterly Report for the period ended September 30, 2023)
November 13, 2023 Unaudited Performance Results for the First Three Quarters of 2023
Termination of the Bulk Water Supply Contract of Cebu Manila Water Development, Inc. with
December 1, 2023
the Metro Cebu Water District
December 5, 2023 Foreign Ownership Report (as of November 30, 2023)
December 6, 2023 Report on the Number of Shareholders (as of November 30, 2023)
December 6, 2023 Appointment of Group Director for the Engineering Group
December 6, 2023 10-Year Term-Loan Facility with Metrobank
December 13, 2023 Standard Rates Table for Charging Year 2024
December 14, 2023 Initial Statement of Beneficial Ownership of Securities of Mr. Michael M. Mayo
December 19, 2023 10-Year Term-Loan Facility with Land Bank of the Philippines
December 22, 2023 PhP1.06 Million Fine on Clark Water Corporation

For more details on these disclosures, please visit the Parent Company’s website at www.manilawater.com.

SEC Form 17-A 188

 COVER SHEET
for
AUDITED FINANCIAL STATEMENTS

SEC Registration Number

A 1 9 9 6 - 1 1 5 9 3

COMPANY NAME
M A N I L A W A T E R C O M P A N Y , I N C . A N D

S U B S I D I A R I E S

PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province)

M W S S A D M I N I S T R A T I O N B U I L D I N G ,

4 8 9 K A T I P U N A N R O A D , B A L A R A ,

Q U E Z O N C I T Y

Secondary License Type, If

Form Type Department requiring the report Applicable
A A C F S C R M D N/ A

COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number Mobile Number
[email protected] (632) 7917-5900 N/A

No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)
928 04/20 12/31

CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number
GIGI ILUMINADA T. MIGUEL [email protected] (632) 8981-8129 N/A

CONTACT PERSON’s ADDRESS

2nd Floor, MWSS Administration Building, 489 Katipunan Road, Balara, Quezon City

NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be
reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact
details of the new contact person designated.
2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s
records with the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not
excuse the corporation from liability for its deficiencies.

*SGVFS187515*
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307
6760 Ayala Avenue Fax: (632) 8819 0872
1226 Makati City ey.com/ph
Philippines

INDEPENDENT AUDITOR’S REPORT

The Board of Directors and Stockholders

Manila Water Company, Inc.
MWSS Administration Building, 489 Katipunan Road
Balara, Quezon City

Opinion

We have audited the consolidated financial statements of Manila Water Company, Inc. (the Parent
Company) and its subsidiaries (collectively referred to as “the Group”), which comprise the consolidated
statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of
comprehensive income, consolidated statements of changes in equity and consolidated statements of
cash flows for each of the three years in the period ended December 31, 2023, and notes to the
consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated
financial performance and its consolidated cash flows for each of the three years in the period ended
December 31, 2023 in accordance with Philippine Financial Reporting Standards (PFRSs).

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics)
together with the ethical requirements that are relevant to our audit of the consolidated financial
statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our assessment of
the risks of material misstatement of the consolidated financial statements. The results of our audit
procedures, including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying consolidated financial statements.

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 -2-

Revenue recognition for Manila Concession (East Zone)

The Group’s revenue from the East Zone accounts for 79% of total consolidated revenue and the revenue
recognition process therein requires processing of data from a large number of customers with different
billing cycles and are classified as either residential, semi-business, commercial, or industrial. The
amounts billed to customers consist of a number of components, including basic charge, environmental
charge and where applicable, sewer charge. These tariffs depend on the customer type and are
determined based on a formula as prescribed by the Metropolitan Waterworks and Sewerage System
Regulatory Office (MWSS RO). This matter is significant to our audit because the revenue recognized
depends on the completeness and accuracy of capture of water consumption based on the meter
readings over the concession area taken on various dates; the propriety of rates applied across customer
types; and the reliability of the systems involved in processing the billing transactions.

Relevant disclosures related to this matter are provided in Notes 1, 2, 3, 6 and 26 to the consolidated
financial statements.

Audit response

We obtained an understanding, evaluated the design and tested the controls over the read and bill
process, which includes the capture of water consumption and calculation of billed fees, downloading of
data from the billing system and uploading of data to the Parent Company’s financial reporting system.
We performed a.) analytical procedures; and b.) test calculation of the billed amounts using the volume of
water consumption and MWSS RO-approved rates and compared them with the amounts reflected in the
billing statement. We also evaluated the disclosures made in the consolidated financial statements.

Provision and contingencies

The Group is currently involved in exposures in the ordinary conduct of business. This matter is
significant to our audit because the estimation of the potential liability resulting from these assessments
require significant judgment and estimates by management. The inherent uncertainty over the outcome
of these tax matters is brought about by the differences in the interpretation and implementation of the
relevant laws and tax regulations and/or rulings.

The Group’s disclosure about provisions and contingencies are included in Notes 1, 3 and 30 to the
consolidated financial statements.

Audit response

Our audit procedures include the involvement of our internal specialists in reviewing the status of these
assessments and the tax positions of the Group based on the merits of the arguments against the
assessments, previous court decisions, implementing rules and opinions issued by relevant government
and regulatory agencies. In addition, we performed a recalculation of the amount of the provisions and
compared this with the outstanding provisions as of year-end. We also evaluated the disclosures made in
the consolidated financial statements.

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 -3-

Amortization of service concession assets using the units-of-production (UOP) method

The service concession assets (SCA) of the Group is related to its concession agreements. The Group
uses UOP method in amortizing its SCA based on the actual billed volume over the estimated billable
water volume for the remaining period of the concession agreement. The UOP amortization method is a
key audit matter as the method involves significant management judgment, estimates, and assumptions,
particularly in determining the total estimated billable water volume over the remaining periods of the
concession agreements. It considers different factors such as population growth rate, supply and
consumption and service coverage, including ongoing and future expansions.

Refer to Note 3 to the consolidated financial statements for the relevant disclosures related to this matter.

Audit response

We obtained an understanding of management’s processes and controls in the estimation of billable

water volume. We evaluated the competence, capabilities, and objectivity of management’s external
specialist who estimated the total billable water volume. We also reviewed the report of the
management’s specialist and gained an understanding of the methodology and the basis of computing
the forecasted billable volume. Furthermore, we compared the estimated billable water volume for the
year against the actual data generated from the billing system. We recalculated the amortization expense
for the year based on the actual billed water volume.

Impairment of investment in an associate

The Group has an investment in Eastern Water Resources Development and Management Public
Company Limited (East Water) that is accounted for under the equity method. As at December 31, 2023,
the carrying value of the Group’s investment in East Water amounted to Php3,717 million. East Water’s
market capitalization as of December 31, 2023 is significantly lower compared to its net book value.
Further, unfavorable business development in 2023 necessitated significant changes in the business
plan. These events and conditions are impairment indicators requiring the assessment of the recoverable
amount of the Group’s investment in East Water. The assessment of the recoverable amount of the
Group’s investment in East Water requires significant judgment and involves estimation and assumptions
about forecasted cashflows, revenue growth, long-term growth rate and discount rate.

The Group’s disclosures on investment in an associate and the amount of impairment loss recognized are
included in Notes 3 and 12 to the consolidated financial statements.

Audit response

We involved our internal specialist in evaluating the methodology and discount rate used. We compared
the key assumptions used such as revenue growth against industry forecast and the long-term growth
rate against relevant economic and external data. We also reviewed the forecasted cash flows based on
East Water’s historical performance and current business environment. We tested the parameters used
in the determination of discount rate against market data. We also reviewed the Group’s disclosure about
those assumptions to which the outcome of the impairment test is most sensitive, specifically those that
have the most significant effect on the determination of the recoverable amount of its investment in an
associate.

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 -4-

Other Information

Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20 IS (Definitive Information Statement), SEC Form 17 A and Annual Report
for the year ended December 31, 2023, but does not include the consolidated financial statements and
our auditor’s report thereon. The SEC Form 20 IS (Definitive Information Statement), SEC Form 17 A
and Annual Report for the year ended December 31, 2023 are expected to be made available to us after
the date of this auditor’s report.

Our opinion on the consolidated financial statements does not cover the other information and we will not
express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audits, or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with PFRSs, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting, unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with PSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

 Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 -5-

 Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.

 Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the audit. We remain solely
responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 -6-

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report, unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Djole S. Garcia.

SYCIP GORRES VELAYO & CO.

Djole S. Garcia
Partner
CPA Certificate No. 0097907
Tax Identification No. 201-960-347
BOA/PRC Reg. No. 0001, August 25, 2021, valid until April 15, 2024
BIR Accreditation No. 08-001998-102-2021, September 16, 2021, valid until September 15, 2024
PTR No. 10079941, January 5, 2024, Makati City

February 29, 2024

*SGVFS187515*
A member firm of Ernst & Young Global Limited
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 31
2023 2022

ASSETS

Current Assets
Cash and cash equivalents (Notes 5, and 23) P
= 10,752,734,174 P
= 8,811,939,212
Short-term investments (Notes 5 and 23) – 128,417,810
Receivables (Notes 6 and 23) 2,904,919,846 2,782,499,912
Contract assets - current portion (Notes 6, 23 and 29) 549,872,454 934,780,675
Inventories (Note 7) 380,615,118 450,657,769
Other current assets (Note 8) 1,534,552,165 2,002,445,492
Total Current Assets 16,122,693,757 15,110,740,870

Noncurrent Assets
Property, plant and equipment and software (Notes 9 and 23) 9,108,755,273 7,163,920,549
Service concession assets - net (Notes 10, 23 and 24) 162,217,498,951 145,065,205,551
Right-of-use assets (Note 11) 328,465,866 426,136,195
Contract assets - net of current portion (Notes 6 and 29) 1,168,784,073 1,729,817,675
Investments in associates (Note 12) 11,191,568,307 15,434,604,040
Goodwill (Note 4) 6,247,010 6,247,010
Deferred tax assets - net (Note 20) 499,689,152 635,223,298
Other noncurrent assets (Notes 13 and 29) 9,043,699,328 9,232,277,139
Total Noncurrent Assets 193,564,707,960 179,693,431,457
Total Assets P
= 209,687,401,717 P
= 194,804,172,327

LIABILITIES AND EQUITY

Current Liabilities
Accounts and other payables (Notes 14 and 23) P
= 18,761,072,969 P
= 16,194,519,558
Short-term debt (Notes 15 and 23) 135,000,000 252,872,324
Current portion of:
Long-term debt (Notes 15 and 23) 16,971,501,294 6,024,171,860
Service concession obligations (Notes 10, 24 and 29) 910,632,846 729,984,535
Lease liabilities (Note 11) 117,029,647 120,860,143
Contract liabilities (Notes 14 and 23) 389,570,970 347,150,494
Income tax payable (Note 20) 339,116,369 415,028,621
Total Current Liabilities 37,623,924,095 24,084,587,535

Noncurrent Liabilities
Noncurrent portion of:
Long-term debt (Notes 15 and 23) 82,275,949,853 78,645,612,772
Service concession obligations (Notes 10, 24 and 29) 15,214,188,022 15,313,404,443
Lease liabilities (Note 11) 215,348,111 315,487,289
Contract liabilities (Note 14) 921,419,562 590,112,583
Pension liabilities - net (Note 16) 388,222,417 288,213,851
Deferred tax liabilities - net (Note 20) 1,052,304,983 338,020,390
Provisions (Notes 3 and 30) 402,658,841 653,750,967
Other noncurrent liabilities (Notes 17 and 29) 1,473,942,280 1,121,724,232
Total Noncurrent Liabilities 101,944,034,069 97,266,326,527
Total Liabilities 139,567,958,164 121,350,914,062

(Forward)

*SGVFS187515*
 -2-

December 31
2023 2022

Equity
Attributable to common equity holders of Manila Water Company, Inc.
Capital stock (Note 21):
Common stock P
= 2,884,839,617 P
= 2,884,839,617
Preferred stock 400,000,000 400,000,000
3,284,839,617 3,284,839,617
Additional paid-in capital 14,458,016,211 14,427,621,413
Treasury shares (Note 21):
Common stock (4,996,646,260) (43,313,195)
Preferred stock (752,978,046) –
Subscriptions receivable (Note 1 and 21) (5,607,257,718) (5,644,968,396)
Total paid-up capital 6,385,973,804 12,024,179,439
Retained earnings (Note 21):
Appropriated 56,500,000,000 40,610,000,000
Unappropriated 5,717,748,773 18,087,151,743
Cumulative translation adjustment (Notes 2 and 12) 741,911,347 533,548,708
Hedging reserves (Note 28) (64,919,310) 1,310,852,803
Remeasurement loss on defined benefit plans (Note 16) (231,816,570) (167,831,265)
Equity in other comprehensive loss of associates (Note 12) 2,734,309 (1,906,738)
Other equity reserves (Note 21) (144,458,138) (144,458,138)
68,907,174,215 72,251,536,552
Noncontrolling interests (Notes 2 and 19) 1,212,269,338 1,201,721,713
Total Equity 70,119,443,553 73,453,258,265
Total Liabilities and Equity P
= 209,687,401,717 P= 194,804,172,327

See accompanying Notes to Consolidated Financial Statements.

*SGVFS187515*
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31

2023 2022 2021
CONTINUING OPERATIONS
REVENUE FROM CONTRACTS WITH CUSTOMERS
Water and used water revenues (Notes 23 and 26) P
= 28,503,979,253 P
= 20,640,724,233 P
= 19,287,138,596
Other operating revenues (Notes 18, 23 and 26) 1,924,089,124 1,901,722,029 1,005,249,021
FINANCE INCOME FROM CONTRACT ASSETS (Note 6) 281,798,935 256,537,754 237,712,035
30,709,867,312 22,798,984,016 20,530,099,652
COST OF SERVICES
Depreciation and amortization (Notes 9, 10 and 11) 3,681,639,665 2,703,323,804 3,328,979,343
Power, light and water (Note 23) 2,359,536,778 2,203,365,424 1,450,438,453
Salaries, wages and employee benefits (Notes 16, 21 and 23) 1,259,655,907 1,146,524,894 1,259,467,394
Contractual services 659,087,015 804,080,940 504,006,045
Repairs and maintenance 575,862,379 660,399,635 529,447,395
Regulatory costs (Note 1) 391,601,200 331,785,859 273,907,788
Water treatment chemicals 361,716,919 429,804,871 430,600,800
Water tankering and bulk water costs 242,689,984 189,237,497 177,007,383
Wastewater costs 201,439,112 246,199,021 195,695,652
Amortization of water service connections 191,314,332 204,760,977 142,967,905
Collection fees 172,903,754 173,759,450 135,772,209
Management, technical and professional fees (Note 23) 31,181,940 41,271,558 338,930,431
Rent (Notes 11 and 25) 10,801,112 5,020,642 3,653,385
Other expenses 292,227,199 424,027,969 170,207,075
10,431,657,296 9,563,562,541 8,941,081,258
GROSS PROFIT 20,278,210,016 13,235,421,475 11,589,018,394
OPERATING EXPENSES (Notes 18 and 23) 4,670,225,019 4,279,500,594 3,906,937,740
INCOME BEFORE OTHER INCOME (EXPENSES) 15,607,984,997 8,955,920,881 7,682,080,654
OTHER INCOME (EXPENSES)
Revenue from rehabilitation works (Notes 1, 2, 6 and 10) 19,774,862,538 23,626,424,275 16,970,072,793
Cost of rehabilitation works (Notes 1, 2, 6 and 10) (19,774,862,538) (23,626,424,275) (16,970,072,793)
Interest expense (Notes 10, 11, 15 and 18) (3,773,677,075) (2,816,244,442) (2,473,334,462)
Equity in net earnings (loss) of associates (Note 12) (3,561,491,909) 520,067,157 569,460,003
Interest income (Note 18) 301,229,071 121,758,500 70,548,460
Foreign exchange gains (losses) – net 80,917,973 (1,870,416,962) (781,039,952)
Foreign currency differentials (Notes 1 and 3) (26,863,199) 2,532,900,291 433,279,731
Gains (losses) on disposal of property and equipment - net (10,780,662) 2,995,037 (34,110,548)
Amortization of deferred credits (Note 17) 12,270,995 13,216,379 16,996,570
Other income (losses) - net (Notes 9 and 18) 346,274,429 700,768,319 (175,485,709)
(6,632,120,377) (794,955,721) (2,373,685,907)
INCOME BEFORE INCOME TAX FROM CONTINUING OPERATIONS 8,975,864,620 8,160,965,160 5,308,394,747
PROVISION FOR INCOME TAX - NET (Note 20) 3,104,576,762 2,013,199,468 1,539,293,408
NET INCOME FROM CONTINUING OPERATIONS 5,871,287,858 6,147,765,692 3,769,101,339
NET LOSS AFTER TAX FROM DISCONTINUED OPERATIONS (Note 19) (830,860) (6,358,029) (14,962,821)
NET INCOME 5,870,456,998 6,141,407,663 3,754,138,518
OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss) to be reclassified to profit or loss
in subsequent periods:
Cumulative translation adjustment (Note 12) 180,036,875 445,649,634 566,135,946
Gain on cash flow hedge (Note 28) 541,884,513 1,353,851,939 1,522,605,373
Costs of hedging (Note 28) (299,870,745) (169,035,456) (959,618,119)
Gain (loss) on net investment hedge (Note 28) 37,767,686 (466,574,121) (121,415,238)
Income tax effect (69,945,363) (149,206,781) (140,746,813)
389,872,966 1,014,685,215 866,961,149
Other comprehensive income (loss) not to be reclassified to profit or loss in
subsequent periods:
Actuarial gain (loss) on pension liabilities and long-term SL/VL - net
(Notes 16 and 17) (85,313,740) (172,427,788) 112,819,432
Equity share in other comprehensive gain / (loss) of an associate
(Note 12) 4,641,047 – –
Income tax effect 21,328,435 43,106,947 (35,798,062)
(59,344,258) (129,320,841) 77,021,370
TOTAL COMPREHENSIVE INCOME P
= 6,200,985,706 P
= 7,026,772,037 P
= 4,698,121,037

(Forward)

*SGVFS187515*
 -2-

Years Ended December 31

2023 2022 2021
Net income attributable to:
Common equity holders of Manila Water Company, Inc.
(Notes 19 and 22) P
= 5,593,568,776 P
= 5,922,776,410 P
= 3,673,328,608
Noncontrolling interests (Notes 1 and 19) 276,888,222 218,631,253 80,809,910
P
= 5,870,456,998 P
= 6,141,407,663 P
= 3,754,138,518

Total comprehensive income attributable to:

Common equity holders of Manila Water Company, Inc. P
= 5,924,097,484 P
= 6,808,140,784 P
= 4,617,130,349
Noncontrolling interests (Note 1) 276,888,222 218,631,253 80,990,688
P
= 6,200,985,706 P
= 7,026,772,037 P
= 4,698,121,037

Earnings per Share before Discontinued Operations (Note 22)

Net income attributable to common equity holders of
Manila Water Company, Inc.:
Basic P
= 1.75 P
= 1.79 P
= 1.23
Diluted P
= 1.75 P
= 1.79 P
= 1.23

Earnings per Share (Note 22)

Net income attributable to common equity holders of
Manila Water Company, Inc.:
Basic P
= 1.75 P
= 1.79 P
= 1.23
Diluted P
= 1.75 P
= 1.79 P
= 1.23

See accompanying Notes to Consolidated Financial Statements.

*SGVFS187515*
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

December 31, 2023

Other Comprehensive Income
Equity Share
Remeasurement in Other
Cumulative Losses Comprehensive Noncontrolling
Retained Translation Hedging on Defined Benefit Gain / (Loss) of Other Equity Interests (NCI)
Paid-in Capital Earnings Adjustments Reserves Plans Associate Reserves (Notes 1, 2,
(Note 21) (Note 21) (Notes 2 and 12) (Note 28) (Note 16) (Note 12) (Note 21) and 19) Total
Balance at beginning of year P
= 12,024,179,439 P
= 58,697,151,743 P
= 533,548,708 P
= 1,310,852,803 (P
= 167,831,265) (P
= 1,906,738) (P
= 144,458,138) P
= 1,201,721,713 P
= 73,453,258,265
Net income – 5,593,568,776 – – – – – 276,888,222 5,870,456,998
Other comprehensive income – – 208,362,639 181,510,327 (63,985,305) 4,641,047 – – 330,528,708
Total comprehensive income – 5,593,568,776 208,362,639 181,510,327 (63,985,305) 4,641,047 – 276,888,222 6,200,985,706
Unwinding of cash flow hedge – – – (1,557,282,440) – – – – (1,557,282,440)
Purchase of treasury shares (5,716,314,028) – – – – – – – (5,716,314,028)
Cost of share-based payment 62,545,273 – – – – – – – 62,545,273
Dividends declared – (2,072,971,746) – – – – – (266,340,597) (2,339,312,343)
Collections 15,563,120 – – – – – – – 15,563,120
Balance at end of year P
= 6,385,973,804 P
= 62,217,748,773 P
= 741,911,347 (P
= 64,919,310) (P
= 231,816,570) P
= 2,734,309 (P
= 144,458,138) P
= 1,212,269,338 P
= 70,119,443,553

December 31, 2022

Other Comprehensive Income
Equity Share
Remeasurement in Other
Cumulative Losses Comprehensive Noncontrolling
Retained Translation Hedging on Defined Benefit Loss of Other Equity Interests (NCI)
Paid-in Capital Earnings Adjustments Reserves Plans Associate Reserves (Notes 1, 2,
(Note 21) (Note 21) (Notes 2 and 12) (Note 28) (Note 16) (Note 12) (Note 21) and 19) Total
Balance at beginning of year P
= 12,047,580,995 P
= 54,058,628,617 P
= 407,475,855 P
= 422,240,441 (P= 38,510,424) (P
= 1,906,738) P
= 54,106,905 P
= 1,375,548,303 P
= 68,325,163,954
Net income – 5,922,776,410 – – – – – 218,631,253 6,141,407,663
Other comprehensive income – – 126,072,853 888,612,362 (129,320,841) – – – 885,364,374
Total comprehensive income – 5,922,776,410 126,072,853 888,612,362 (129,320,841) – – 218,631,253 7,026,772,037
Movements in NCI – – – – – – (198,565,043) (254,369,927) (452,934,970)
Cost of share-based payment 19,911,639 – – – – – – – 19,911,639
Dividends declared – (1,284,253,284) – – – – – (138,087,916) (1,422,341,200)
Purchase of treasury shares (49,407,905) – – – – – – – (49,407,905)
Reissuance of treasury shares 6,094,710 – – – – – – – 6,094,710
Balance at end of year P
= 12,024,179,439 P
= 58,697,151,743 P
= 533,548,708 P
= 1,310,852,803 (P
= 167,831,265) (P
= 1,906,738) (P
= 144,458,138) P
= 1,201,721,713 P
= 73,453,258,265

*SGVFS187515*
 -2-

December 31, 2021

Other Comprehensive Income
Equity Share
Remeasurement in Other
Cumulative Gains (Losses) Comprehensive Noncontrolling
Retained Translation Hedging on Defined Benefit Loss of Other Equity Interests (NCI)
Paid-in Capital Earnings Adjustments Reserves Plans Associate Reserves (Notes 1, 2,
(Note 21) (Note 21) (Notes 2 and 12) (Note 28) (Note 16) (Note 12) (Note 21) and 19) Total
Balance at beginning of year P
= 6,702,277,443 P
= 52,249,149,846 (P
= 37,244,853) P
=– (P
= 115,351,016) (P
= 1,906,738) P
= 54,106,905 P
= 1,312,423,519 P
= 60,163,455,106
Net income – 3,673,328,608 – – – – – 80,809,910 3,754,138,518
Other comprehensive income – – 444,720,708 422,240,441 76,840,592 – – 180,778 943,982,519
Total comprehensive income – 3,673,328,608 444,720,708 422,240,441 76,840,592 – – 80,990,688 4,698,121,037
Movements in NCI – – – – – – – 3,804,850 3,804,850
Cost of share-based payment 3,390,655 – – – – – – – 3,390,655
Collections 5,341,912,897 – – – – – – – 5,341,912,897
Dividends declared – (1,863,849,837) – – – – – (21,670,754) (1,885,520,591)
Balance at end of year P
= 12,047,580,995 P
= 54,058,628,617 P
= 407,475,855 P
= 422,240,441 (P
= 38,510,424) (P
= 1,906,738) P
= 54,106,905 P
= 1,375,548,303 P
= 68,325,163,954

See accompanying Notes to Consolidated Financial Statements.

*SGVFS187515*
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31

2023 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax from continuing operations P
= 8,975,864,620 P
= 8,160,965,161 P
= 5,308,394,747
Loss before income tax from discontinued operations (Note 19) (889,935) (6,295,651) (15,006,292)
Income before income tax 8,974,974,685 8,154,669,510 5,293,388,455
Adjustments for:
Depreciation and amortization (Notes 3, 9, 10 and 11) 4,307,544,344 3,045,797,752 3,628,406,392
Provision for (reversal of) probable losses and impairment losses
(Notes 4, 6 and 18) 75,000,000 (402,271,823) 444,040,940
Interest expense (Notes 10, 11, 15 and 18) 3,773,677,075 2,816,244,442 2,473,334,462
Equity in net loss (earnings) of associates (Note 12) 3,561,491,909 (520,067,157) (569,460,003)
Interest income (Note 18) (301,229,071) (121,758,500) (70,548,460)
Share-based payments (Note 21) 62,545,273 19,911,639 3,390,655
Unrealized foreign exchange loss (gain) on non-cash accounts (10,903,018) 99,428,585 1,859,372,984
Pension expense, contribution, and benefit payment - net (Note 16) (13,585,115) 74,330,251 71,860,185
Amortization of deferred credits (Note 17) (12,270,995) (13,216,379) (16,996,570)
Loss (gain) on disposal of property and equipment - net 10,780,662 (2,995,037) 34,454,367
Operating income before changes in operating assets and liabilities 20,428,025,749 13,150,073,283 13,151,243,407
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables (121,945,695) (74,826,614) 410,589,161
Contract assets (15,348,536) (177,158,594) 23,965,142
Inventories 70,042,651 34,747 (125,764,514)
Service concession assets (13,529,051,686) (21,336,547,720) (15,352,647,788)
Other current assets 319,248,424 (32,509,786) 399,251,291
Increase in:
Accounts and other payables (1,312,572,919) 2,205,408,446 2,553,795,411
Contract liabilities 373,727,455 263,399,815 173,477,814
Net cash generated from (used in) operations 6,212,125,443 (6,002,126,423) 1,233,909,924
Income tax paid (1,705,312,051) (1,069,036,920) (1,253,803,089)
Net cash provided by (used in) operating activities 4,506,813,392 (7,071,163,343) (19,893,165)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Property, plant and equipment and software (Note 9) (1,943,172,555) (1,102,388,720) (1,519,658,210)
Investments in associates (Notes 1 and 12) – (2,063,600) (1,280,802)
Dividends received from associates (Note 12) 311,198,411 443,259,393 418,300,404
Interest received 300,754,833 116,696,914 73,117,766
Proceeds from sale of property and equipment (Note 9) 5,393,219 4,948,132 2,988,665
Decrease (increase) in short-term investments (Note 5) 128,417,810 140,098,427 (135,871,114)
Increase in other noncurrent assets (Note 13) (1,191,553,397) (230,206,726) (2,015,342,546)
Net cash used in investing activities (2,388,961,679) (629,656,180) (3,177,745,837)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from availments of (Note 15):
Long-term debt 21,259,614,621 14,995,888,934 8,898,721,967
Short-term debt 210,000,000 8,699,503,225 –
Payments of:
Long-term debt (Note 15) (6,722,268,341) (5,415,719,209) (12,365,905,958)
Dividends to equity holders of the Parent Company (Note 21) (2,072,971,746) (1,284,253,284) (1,863,849,837)
Interest (4,778,431,859) (3,517,060,569) (3,012,274,103)
Service concession obligations (Note 10) (1,683,326,593) (1,039,219,993) (925,759,914)
Short-term debt (Note 15) (327,872,324) (8,455,000,000) –
Dividends to noncontrolling interests (266,340,597) (138,087,916) (29,027,433)
Principal portion of lease liabilities (Note 11) (133,017,393) (105,995,513) (141,470,517)
Acquisition of treasury shares (Note 21) (5,716,314,028) (49,407,905) –
Proceeds from subscription of shares (Note 21) 15,563,120 – 5,341,912,897
Reissuance of treasury shares – 6,094,710 –
Movements in noncontrolling interests (Note 1) – (452,934,970) 3,804,850
Increase (decrease) in provisions and other noncurrent liabilities 38,396,916 20,790,801 (97,609,252)
Net cash provided by (used in) financing activities (176,968,224) 3,264,598,311 (4,191,457,300)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,940,883,489 (4,436,221,212) (7,389,096,302)
UNREALIZED FOREIGN EXCHANGE GAIN (LOSS) ON CASH AND
CASH EQUIVALENTS (88,527) (89,551,149) (450,148)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8,811,939,212 13,337,711,573 20,727,258,023
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 5) P
= 10,752,734,174 P
= 8,811,939,212 P
= 13,337,711,573

See accompanying Notes to Consolidated Financial Statements.

*SGVFS187515*
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

Manila Water Company, Inc. (the “Parent Company”) was incorporated on January 6, 1997. The Parent
Company started commercial operations on January 1, 2000. It became a publicly listed company via an initial
public offering on March 18, 2005. As of December 31, 2023, the economic and voting ownership of Trident Water
Company Holdings, Inc. (Trident Water) were 39.62% and 58.32%, respectively, while the economic and voting
ownership of Ayala Corporation (Ayala) were 22.54% and 23.55%, respectively. As of December 31, 2022,
the economic and voting ownership of Trident Water were 35.59% and 52.16%, respectively, while the economic
and voting ownership of Ayala were 30.40% and 31.60%, respectively. The ultimate parent of Trident Water is
97.25% owned by Razon & Co., Inc. while Ayala is a publicly listed company which is 47.86% owned by Mermac,
Inc. and the rest by the public.

The Parent Company and its subsidiaries (collectively referred to as the “Group”) are incorporated to provide
water, integrated used water, sewerage and sanitation, distribution services, pipeworks, engineering,
procurement and management services.

The Parent Company’s principal place of business is at the MWSS Administration Building, 489 Katipunan Road,
Balara, Quezon City.

The consolidated financial statements comprise the financial statements of the Parent Company and the
following subsidiaries:
Effective Percentages of
Country of Ownership
Incorporation and As of December 31,
Place of Business 2023 2022
Manila Water Infratech Solutions Corp. (MWIS) Philippines 100.00 100.00
Calasiao Water Company, Inc. (Calasiao Water) -do- 90.00 90.00
Manila Water Asia Pacific Pte. Ltd. (MWAP) Singapore 100.00 100.00
Kenh Dong Water Holdings Pte. Ltd. (KDWH) -do- 100.00 100.00
Manila Water South Asia Holdings Pte. Ltd. (MWSAH) -do- 100.00 100.00
Thu Duc Water Holdings Pte. Ltd. (TDWH) -do- 100.00 100.00
Manila Water (Thailand) Co., Ltd. (MWTC) 5 Thailand 100.00 100.00
Manila South East Asia Water Holdings Pte. Ltd. (MSEA) Singapore 100.00 100.00
PT Manila Water Indonesia (PTMWI)1 Indonesia 100.00 100.00
Manila Water Philippine Ventures, Inc. (MWPVI) Philippines 100.00 100.00
Boracay Island Water Company, Inc. (Boracay Water) -do- 80.00 80.00
Calbayog Water Company, Inc. (Calbayog Water) -do- 60.00 60.00
Clark Water Corporation (Clark Water) -do- 100.00 100.00
Filipinas Water Holdings Corp. (Filipinas Water)2 -do- 100.00 100.00
Bulakan Water Company, Inc. (Bulakan Water) -do- 90.00 90.00
Metro Ilagan Water Company, Inc. (Ilagan Water) -do- 90.00 90.00
MWPV South Luzon Water Corp. (South Luzon Water) -do- 100.00 100.00
Obando Water Company, Inc. (Obando Water) -do- 90.00 90.00
Laguna AAAWater Corporation (Laguna Water) -do- 70.00 70.00
North Luzon Water Company, Inc. (North Luzon Water) -do- 100.00 100.00
Davao del Norte Water Infrastructure Company, Inc.
(Davao Water) -do- 100.00 100.00
Tagum Water Company, Inc. (Tagum Water)3 -do- 90.00 90.00
Manila Water Consortium, Inc. (MW Consortium) -do- 79.63 79.63
Cebu Manila Water Development, Inc.
(Cebu Water)4 -do- 56.21 56.21
Aqua Centro MWPV Corp. (Aqua Centro) -do- 100.00 100.00
Bulacan MWPV Development Corp. (BMDC) -do- 100.00 100.00
EcoWater MWPV Corp. (EcoWater) -do- 100.00 100.00
Leyte Water Company, Inc. (Leyte Water) -do- 100.00 100.00
Manila Water Technical Ventures, Inc. (MWTV) -do- 100.00 100.00
Zamboanga Water Company, Inc. (Zamboanga Water) -do- 70.00 70.00
1PTMWI is 95.00% owned by MSEA and 5.00% owned by an individual whose ownership has been pledged to MSEA.
2FilipinasWater is 49.00% owned by the Parent Company and 51.00% owned by MWPVI.
3Tagum Water is 90.00% owned by Davao Water. MWPVI’s effective interest in Tagum Water is 90.00% by virtue of its 100.00%
ownership interest in Davao Water as of both December 31, 2023 and 2022.
4Cebu Water is 70.58% owned by MW Consortium. MWPVI’s effective ownership interest in Cebu Water is 56.21% by virtue of

its 79.63% ownership interest in MW Consortium as of both December 31, 2023 and 2022.
5On March 18, 2022, ownership of shares in MWTC was transferred to MWAP as sole shareholder of MWTH upon distribution

of its surplus funds and assets.

*SGVFS187515*
 -2-

Significant Transactions – Parent Company

Parent Company’s Subscription Agreement with Prime Strategic Holdings, Inc. (previously Prime Metroline
Holdings, Inc.)
On February 1, 2020, the Parent Company and Prime Metroline Holdings, Inc., on behalf of a company to be
incorporated (to be named Trident Water), signed a Subscription Agreement for the acquisition of 820.00 million
common shares (equivalent to 24.96% economic rights) of the Parent Company at P = 13.00 per share.

On February 6, 2020, Ayala, as part of the Shareholders’ Agreement to be executed among itself, its wholly-
owned subsidiary Philwater Holdings Co., Inc. (Philwater), and Trident Water, Ayala’s Executive Committee
approved the grant of proxy rights by Philwater to Trident Water over its 4,000.00 million preferred shares to
enable the latter to achieve 51.00% voting interest in the Parent Company, subject to the fulfillment of the
conditions set forth in the subscription agreement. Upon the grant of proxy rights to Trident Water, Ayala’s
effective voting interest in the Parent Company will stand at 31.60%. This arrangement aimed to strategically
rationalize the economic and voting stakes between Ayala and Trident Water as strategic partners in the Parent
Company.

On February 7, 2020, the Parent Company received a letter from Prime Metroline Holdings, Inc., that it had
announced through publication in a newspaper of general circulation, its intention to make a mandatory offer for
the shares of the Parent Company at an offer price of P
= 13.00 per share.

On July 2, 2020, the SEC approved the Parent Company’s application for the amendment of its Articles of
Incorporation to increase the carved-out shares from 300.00 million to 900.00 million unissued common shares
and the issuance of such carved-out shares in one or more transactions or offerings “for cash, properties, or
assets to carry out the Parent Company’s corporate purposes as approved by the Board of Directors (BOD).”
Carved-out shares are common shares which are waived of shareholders’ pre-emptive rights and are earmarked
for specific corporate purposes (see Note 21).

On August 25, 2020, the Parent Company received a copy of the resolution from the Philippine Competition
Commission (PCC), indicating that the PCC will take no further action with respect to the transaction.
Specifically, it was deemed that the proposed acquisition of Trident Water of shares in the Parent Company
would not likely result in substantial lessening of competition.

In 2020, the Parent Company also received consents from specific lenders for the subscription.

On February 15, 2021, the Parent Company and Prime Strategic Holdings, Inc. signed an Amendment to the
Subscription Agreement. The amendment covered the inclusion of Trident Water as party to the Subscription
Agreement following its establishment, as well as the updated payment terms which was 50.00% or P
= 5.33 bilion
upon Closing and 50.00% or P = 5.33 bilion upon call of the Parent Company’s BOD.

On the same date, Philwater and Trident Water executed a Share Purchase Agreement wherein Philwater
agreed to sell 2,691,268,205 of its preferred shares in the Parent Company for P
= 4.84 billion to Trident Water with
a payment term over a five (5)-year period. The purchase of the preferred shares reflected a 39.09% voting
stake and 8.19% economic stake in the Parent Company. The rights and title to the shares, except voting rights
covered by the proxies, which shall be executed upon the execution of the Shareholders’ Agreement, shall not
be transferred until all payments are made. Dividends earned by the preferred shares shall continue to be for the
account of Philwater until full payment has been made.

On April 8, 2021, the Parent Company received the Tender Offer Report from Trident Water to acquire up to
1,118,253,916 common shares of the Parent Company through a tender offer to all shareholders. Said tender
offer did not include the 866,996,201 common shares held by Ayala and its nominees and the 4,000,000,000
preferred shares held by Philwater and its nominees. On May 31, 2021, a total of 462,660 common shares of
the Parent Company were tendered, accepted and purchased by Trident Water via block sale through the
facilities of the Philippine Stock Exchange.

On June 3, 2021, Trident Water completed the tender offer. Following the completion of the tender offer, Trident
Water owns 870,462,660 common shares of the Parent Company and has voting rights over 2,691,268,205
preferred shares to be acquired by Trident Water. In addition, Prime Strategic Holdings, Inc. also owns
29,589,500 common shares of the Parent Company. On June 24, 2021, Trident Water acquired 29,589,500
common shares of the Parent Company from Prime Strategic Holdings, Inc.

As of December 31, 2023 and 2022, Trident Water holds 900,052,160 common shares and 2,691,268,205
preferred shares in the Parent Company.

*SGVFS187515*
 -3-

Parent Company’s Buy-back of Shares from Ayala and Philwater

On October 11, 2023, the Parent Company’s BOD approved a buy-back program of its shares with Ayala and
Philwater. The Parent Company re-acquired its 288,998,734 common shares and 436,243,932 participating
preferred shares, respectively, for a total amount of P
=5.72 billion. This transaction reduced Ayala Corporation’s
effective economic stake from 30.40% as of December 31, 2022 to 22.54% as of December 31, 2023
(see Note 21).

As of December 31, 2023, Ayala holds 577,947,462 common shares and 872,487,862 preferred shares in the
Parent Company.

Parent Company’s Concession Agreement with Metropolitan Waterworks and Sewerage System (MWSS)
On February 21, 1997, the Parent Company entered into a Concession Agreement (the “Concession
Agreement”) with MWSS, a government corporation duly organized and existing pursuant to Republic Act (RA)
No. 6234, as amended, with respect to the MWSS East Zone (the “East Zone”). The Concession Agreement
sets forth the rights and obligations of the Parent Company throughout a twenty-five (25)-year concession period.
The MWSS Regulatory Office (MWSS RO) monitors and reviews the performance of each of the
Concessionaires – the Parent Company and Maynilad Water Services, Inc. (Maynilad), the West Zone
Concessionaire.

Under the Concession Agreement, MWSS grants the Parent Company (as contractor to perform certain
functions and as agent for the exercise of certain rights and powers under RA No. 6234) the right and obligation
to manage, operate, repair, decommission, and refurbish all fixed and movable assets (except certain retained
assets) required to provide water delivery and sewerage services in the East Zone for a period of twenty-five
(25) years commencing on August 1, 1997 (the Commencement Date) up to May 6, 2022 (the Expiration Date)
or the early termination date as the case may be. While the Parent Company has the right to manage, operate,
repair, and refurbish specified MWSS facilities in the East Zone, legal title to these assets remains with MWSS.
The legal title to all fixed assets contributed to the existing MWSS system by the Parent Company during the
Concession remains with the Parent Company until the Expiration Date (or until the early termination date) at
which time all rights, titles and interest in such assets will automatically vest to MWSS.

On Commencement Date, the Parent Company officially took over the operations of the East Zone and
rehabilitation works for the service area commenced immediately thereafter. As provided in the Parent
Company’s project plans, operational commercial capacity has been obtained upon substantial completion of the
rehabilitation work.

Under the Concession Agreement, the Parent Company is entitled to the following rate adjustments:

a. annual standard rate adjustment to compensate for increases in the Consumer Price Index (CPI);
b. extraordinary price adjustment (EPA) to account for the financial consequences of the occurrence of certain
unforeseen events stipulated in the Concession Agreement;
c. foreign currency differential adjustment (FCDA) to recover foreign exchange losses including all accruals
and carrying costs thereof, arising from MWSS loans and any Concessionaire loans used for capital
expenditures and concession fee payments, in accordance with the provisions set forth in Amendment No. 1
of the Concession Agreement dated October 12, 2001 (see Notes 2, 3 and 13); and
d. Rebasing Convergence Adjustment for the purposes of calculating the Rates Adjustment Limit for each of
the five Charging Years of the Rebasing Period determined based on the following:
i. where the Rebasing Adjustment is found to be positive, the Rebasing Convergence Adjustment for the
first Charging Year of the Rate Rebasing Period shall be equal to the Rebasing Adjustment, and the
Rebasing Convergence Adjustment for each of the following four (4) Charging Years shall be zero; and
ii. where the Rebasing Adjustment is found to be negative, the Rebasing Adjustment for each of the five
(5) Charging Years of the Rebasing Period shall be equal to the Rebasing Adjustment divided by five
(5).

In the event that the MWSS RO determines, at any time from and after the second (2nd) Rate Rebasing Date,
that the Parent Company shall incur significant capital expenditures in carrying out its responsibilities under the
Concession Agreement which should not be recovered through immediate rate adjustments, the MWSS RO may
propose to the Parent Company that the Concession Agreement be amended to provide for the payment to the
Parent Company for all or a portion of such unforeseen capital expenditure (Expiration Payment). Any Expiration
Payment shall be treated by the MWSS RO as an anticipated receipt for purposes of making rate adjustment
calculations. Any Expiration Payment may be discharged through the delivery to the Parent Company of a USD
denominated debt instrument issued by MWSS or another public-sector owned by the Republic but, in either
case, with the full faith and credit guarantee of the Republic, ranking at least pari passu with all other unsecured
and unsubordinated external debt obligations of the Republic, having a cash value equal to such Expiration
Payment.

*SGVFS187515*
 -4-

These rate adjustments are subject to a rate adjustment limit which is equivalent to the sum of CPI published in
the Philippines, EPA and Rebasing Convergence Adjustment as defined in the Concession Agreement. The
Concession Agreement also provides a general rate setting policy for rates chargeable by the Parent Company
for water and sewerage services as follows:

a. For the period through the second Rate Rebasing date (January 1, 2008), the maximum rates chargeable by
the Parent Company (subject to interim adjustments) are set out in the Concession Agreement; and,
b. From and after the second Rate Rebasing date, the rates for water and sewerage services shall be set at a
level that will permit the Parent Company to recover, over the twenty-five (25)-year term of the concession,
its investment including operating, capital maintenance and investment incurred, Philippine business taxes
and payments corresponding to debt service on MWSS loans and the Parent Company’s loans incurred to
finance such expenditures, and to earn a rate of return equal to the appropriate discount rate (ADR) on
these expenditures for the remaining term of the concession.

The maximum rates chargeable for such water and sewerage services shall be subject to general adjustment at
five (5)-year intervals commencing on the second Rate Rebasing date, provided that the MWSS RO may
exercise its discretion to make a general adjustment of such rates.

On April 16, 2009, the MWSS Board of Trustees (MWSS BOT) passed Resolution No. 2009-072 approving the
fifteen (15)-year extension of the Concession Agreement (the “Extension”) from May 6, 2022 to May 6, 2037.
This resolution was confirmed by the Department of Finance (DOF), by authority from the Office of the President
of the Republic of the Philippines, on October 19, 2009. The significant commitments under the Extension
follow:

a. To mitigate tariff increases such that there will be reduction of the balance of the approved 2008 rebased
tariff by 66%, zero increase of the rebased tariff in 2009 and a P = 1.00 increase for years 2010 to 2016,
subject to CPI and FCDA adjustments.
b. To increase the share in the current operating budget support to MWSS by 100% as part of the concession
fees starting 2009.
c. To increase the total investments from the approved P = 187.00 billion for the periods 2008 to 2022 to
P
= 450.00 billion for 2008 to 2037.

With the approval of the Extension, the recovery period for the Parent Company’s investment has been extended
by another fifteen (15) years from 2022 to 2037.

On December 5, 2019, the MWSS BOT issued Resolution No. 2019-201-CO revoking Resolution No. 2009-072
dated April 16, 2009 related to the extension of the concession period of the Parent Company from 2022 to 2037.

On December 20, 2019, MWSS released a press statement clarifying Resolution No. 2019-201-CO and
confirming that the action of the MWSS BOT did not result in the rescission or outright cancellation of the
Concession Agreement.

On January 29, 2020, the Parent Company received a response letter from the MWSS RO confirming that the
twenty-five (25)-year Concession Agreement from 1997 to 2022 and the Memorandum of Agreement (MOA) and
Confirmation between the Parent Company and the MWSS providing for the fifteen (15)-year Extension from
2022 to 2037 have not yet been cancelled.

Parent Company’s RCA with MWSS

On March 31, 2021, the Parent Company and MWSS entered into an RCA which has a term of up to July 31,
2037. The RCA shall become effective within six (6) months from March 31, 2021 and upon satisfaction of the
conditions precedent.

Under the RCA, MWSS grants the Parent Company (as a public utility to perform certain functions and as a
public utility for the exercise of certain rights and powers under RA No. 6234), the right to manage, operate,
repair, decommission and refurbish all fixed and movable assets (except certain retained assets) required to
provide water delivery and sewerage services in the East Zone, including the right to bill and collect for water and
sewerage services supplied in the East Zone.

*SGVFS187515*
 -5-

The RCA reinforced provisions on penalties from the Original Concession Agreement (OCA) where originally,
the trigger is whether the failure to meet the Service Obligation continues for more than 60 days (or 15 days if it
will adversely affect public health or welfare). Penalty is based on 25% to 50% of the cost to restore the service
obligation. This was revised in the RCA where the failure to meet the Service Obligation continues for more than
15 days (or 3 days if it will adversely affect public health or welfare). Penalty is based on the highest among:
(1) 25% of the cost to restore; (2) based on the SO affected, formula is provided for each; or (3) liquidated
damages for delay of related project equal to 1/10 of 1% of the cost of the unperformed portion for every day of
delay. Regulators will now be appointed by the President of the Republic.

The RCA also identified the drivers for Material Adverse Government Action (MAGA) that will excuse the
Concessionaire, if they fail to deliver the financial and other contractual obligations under the RCA due to the
occurrence of MAGA (Article 10).

The RCA retains the rate rebasing mechanism under the original Concession Agreement. Thus, the rates for
water and sewerage services provided by the Parent Company shall be set at a level that will permit it to recover
over the term of the concession expenditures efficiently and prudently incurred and to earn a reasonable rate of
return.

The RCA removed the recovery of the corporate income taxes and adjustment for FCDA. It also reduced the
inflation factor to 2/3 of the CPI adjustment and imposed caps on increases in standard rates for water (1.3x the
previous standard rate) and wastewater (1.5x the previous standard rate). Instead of a market-driven ADR, the
Parent Company is now limited to a 12.00% fixed nominal discount rate. Concessionaire’s borrowing plans and
service improvement plans, as well as deviation to such plans shall be approved by the Regulatory Office at
each Rate Rebasing exercise (Section 6.11). Publication of tariff are required to be 15 days before effectivity
(Section 9.7) The RCA also includes a tariff freeze until December 31, 2022.

As with the original Concession Agreement, legal title to MWSS assets remains with MWSS. On the other hand,
legal title to all fixed assets contributed by the Parent Company to the existing MWSS system during the
concession remains with the Parent Company. Nevertheless, during each Rate Rebasing Date, the Parent
Company is required to submit to MWSS a list of all recovered assets, including all supporting documents. Legal
title to these recovered assets shall be transferred to MWSS on or before such Rate Rebasing Date.
Performance Bond is based on 2% to 10% of the Total Project Cost depending on the form to be issued in favor
of MWSS (Section 6.10).
As of December 31, 2021, the remaining condition precedent to the effectivity of the RCA is the Undertaking
Letter from the Republic.

The Parent Company and MWSS has since executed six (6) amendments to the RCA extending its Effective
Date to allow time to complete the remaining condition precedent – the Undertaking Letter from the Republic.
The Sixth Amendment executed on May 19, 2022 extended the Effective Date to not later than June 30, 2022.

On June 30, 2022, the RCA did not take effect due to the Republic’s failure to submit the prescribed Undertaking
Letter. Any changes adopted by the Parent Company in relation to the RCA were reverted to the terms provided
in the Original Concession Agreement, except as provided under the franchise (Refer to Note 1, discussion on
Parent Company Water Franchise Approval).

On May 10, 2023, the Parent Company and MWSS executed a seventh Amendment to the RCA
(the “Amendment”). The parties agreed that the RCA and the seventh Amendment are deemed to be effective
as of June 29, 2022. The Republic also issued a new Undertaking Letter effective as of July 1, 2022,
superseding the Undertaking Letter dated June 24, 2022. The revised RCA is deemed effective on June 29,
2022.

Below are the key changes in the seventh amendment to the RCA:

 Tariff adjustments must observe the cap on “C” which is 75% of the July inflation as published by PSA.
(Amended RCA Sec 9.4.2)
 FCDA will be based on the following (1) Forex gains or losses arising from the payments to service the
debt of MWSS Loans; and (2) forex arising from principal payments of loans, limited to the list of loans
provided in the RCA. (Amended RCA Section 9.8). Forex gains/losses on additional or new foreign
currency denominated loans secured and drawn after June 29, 2022 onwards shall be recovered through
Modified FCDA. (Amended RCA Sec 9.8.1)
 Revised provision for MAGA (Amended Article 10)

*SGVFS187515*
 -6-

On November 9, 2023, after due notice to the public, the MWSS-RO conducted a public hearing for the
extension of the expiration date of the RCA. This is in view of Parent Company’s application to extend the term
of the RCA for another 10 years or until 2047 to align with the term of its Franchise.

Rate Rebasing Tariff Adjustments

In March 2012, the Parent Company submitted to MWSS a business plan embodying its rate rebasing proposals
for charging year 2013. The rate rebasing activity is done every five (5) years. MWSS conducted a review of the
proposal including the Parent Company’s last five (5) years’ financial performance. The financial review process
was extended up to the third quarter of 2013. On September 10, 2013, the MWSS RO issued Resolution
No. 13-09-CA providing for a negative rate rebasing adjustment of 29.47% on the Parent Company’s 2012
average basic water rate of P = 24.57 per cubic meter which shall be implemented in five (5) equal tranches of
negative 5.894% per charging year. The Parent Company objected to MWSS’ Rate Rebasing determination and
formally filed its Dispute Notice on September 24, 2013, before a duly-constituted Appeals Panel, commencing
the arbitration process, as provided under Section 12 (in relation to Section 9.4 of the Concession Agreement).

On December 10, 2013, the MWSS BOT, through MWSS RO Resolution No. 13-012 CA, approved the
implementation of a status quo for the Parent Company’s Standard Rates, including FCDA, until such time that
the Appeals Panel has rendered a final award on the 2013 Rate Rebasing determination.

On April 21, 2015, the Parent Company received the final award of the Appeals Panel in the arbitration which
included the following tariff component determination:

a. P
= 28.10 billion Opening Cash Position (OCP) which restored P = 11.00 billion from the September 2013 OCP
determination of MWSS of P = 17.1 billion;
b. P
= 199.60 billion capital expenditures and concession fees which restored P = 29.50 billion from the September
2013 future capital and concession fee expenditure of P= 170.10 billion;
c. 7.61% ADR which was an improvement of 79 bps from the post-tax ADR of 6.82% in September 2013; and
d. exclusion of corporate income tax from cash flows beginning January 1, 2013.

Consequently, the final award resulted in a rate rebasing adjustment for the period 2013 to 2017 of negative
11.05% on the 2012 basic average water charge of P = 25.07 per cubic meter. This adjustment translated to a
decrease of P
= 2.77 per cubic meter from the tariff during the intervening years before the 2018 rate rebasing.
Annual CPI adjustments and the quarterly FCDA were consistent with the Parent Company’s Concession
Agreement with MWSS.

On September 27, 2018, the MWSS BOT (MWSS Resolution No. 2018-145-RO) approved the Parent
Company’s Rebasing Adjustment for the Fifth Rate Rebasing Period (2018 to 2022) as recommended by the
MWSS RO (MWSS RO Resolution No. 2018-10-CA). To mitigate the impact on the tariff of its customers, the
Parent Company shall stagger its implementation over a five (5)-year period. The first tranche took effect on
October 16, 2018 amounting to P
= 1.46 per cubic meter or 5.70% of the pre-rebased 2017 basic tariff. The MWSS
BOT also approved the implementation of the subsequent partial Rebasing Convergence Adjustment on a
staggered basis as scheduled below:

 P
= 2.00 on January 1, 2020,
 P
= 2.00 on January 1, 2021, and
 P
= 0.76 to P
= 1.04 on January 1, 2022.

On December 13, 2018, the MWSS BOT (MWSS Resolution No. 2018-190-RO) approved the Parent Company’s
implementation of the 5.70% CPI Adjustment to be applied to the 2018 average basic charge of P
=26.98 per cubic
meter and the 2.62% FCDA to be applied to the 2019 average basic charge. These adjustments were
recommended by the MWSS RO (MWSS RO Resolution No. 2018-12-CA) and took effect on January 1, 2019.

Effective January 1, 2022, subject to the validation of the MWSS RO of the feasibility and cost of the Wawa Bulk
Water Source to Calawis Project as the Parent Company’s medium-term water source, an additional partial
Rebasing Convergence Adjustment of up to P = 0.28 per cubic meter on top of the basic partial Rebasing
Convergence Adjustment of P = 0.76 per cubic meter, was approved by the MWSS BOT on September 27, 2018.

On March 31, 2021, the Revised Concession Agreement (RCA) was signed between the Parent Company and
MWSS, which include a tariff freeze until December 31, 2022.

*SGVFS187515*
 -7-

On November 10, 2022, the MWSS BOT (MWSS BOT Resolution No. 2022-148-RO) approved the Parent
Company’s Rebasing Adjustment for the Sixth Rate Rebasing Period (2023 to 2027) as recommended by the
MWSS RO (MWSS RO Resolution No. 2012-12-CA). The implementation of Rebasing Adjustment from 2023 to
2027 on a staggered basis is scheduled as follows:

 P
= 8.04 on January 1, 2023,
 P
= 5.00 on January 1, 2024,
 P
= 3.25 on January 1, 2025,
 P
= 1.91 to P
= 3.00 on January 1, 2026, and
 P
= 1.05 to P
= 1.08 on January 1, 2027.

The approval also includes an indicative adjustment of about 0.97 to 1.00 or 2.12% in January 1, 2028 due to
non-full recovery of the total expenses for the Wawa Bulk Water Supply Project in compliance with MWSS BOT.
However, this amount will be subject to the next Rate Rebasing exercise.

Furthermore, the environmental charge will increase from 20% to 25% beginning January 1, 2023, and from 25%
to 30% beginning January 1, 2026. Sewer charge will increase from 30% to 32.85% beginning January 1, 2023,
subject to Manila Water’s attainment of sewer coverage of 30% by the end of 2025.

FCDA
Prior to November 18, 2021, the MWSS BOT approved the FCDA quarterly. The FCDA had no impact on the
net income of the Parent Company, as the same is a recovery or refund mechanism of foreign exchange losses
or gains. The following FCDA adjustments and their related foreign exchange basis took effect in 2019 to 2021.

Approval Date Effective Date FCDA Foreign Exchange Rate Basis

December 14, 2018 January 1, 2019 P
= 0.75 per cubic meter USD1: P
= 53.94 / JPY1: P
= 0.48
March 6, 2019 April 1, 2019 P
= 0.52 per cubic meter USD1: P
= 52.77 / JPY1: P
= 0.47
September 26, 2019 October 13, 2019 P
= 0.69 per cubic meter USD1: P
= 52.41 / JPY1: P
= 0.47
March 11, 2020 April 1, 2020 P
= 0.48 per cubic meter USD1: P
= 50.77 / JPY1: P
= 0.47 / EUR1: P
= 56.36
September 14, 2020 October 1, 2020 P
= 0.33 per cubic meter USD1: P
= 50.10 / JPY1: P
= 0.47 / EUR1: P
= 56.37
December 1, 2020 January 1, 2021 P
= 0.19 per cubic meter USD1: P
= 48.51 / JPY1: P
= 0.46 / EUR1: P
= 57.22
February 24, 2021 April 1, 2021 P
= 0.24 per cubic meter USD1: P
= 48.06 / JPY1: P
= 0.46 / EUR1: P
= 58.39

There were no FCDA adjustments for the third quarter of 2019 as the MWSS BOT did not approve the
adjustments until the fourth quarter of 2019. On May 29, 2020, the MWSS BOT approved an FCDA adjustment
for the third quarter of 2020 similar to the prevailing FCDA adjustment for the second quarter of 2020 of
P
= 0.48 per cubic meter which had no impact on customer bills. There were no further FCDA adjustments
approved from February 24, 2021. The RCA signed on March 31, 2021 also removed the FCDA mechanism.

On October 28, 2021, the MWSS BOT approved the recommendation of the MWSS RO to remove the FCDA
from the Parent Company’s customer bills beginning November 18, 2021, the initial effectivity date of the RCA.

Beginning November 18, 2021, the FCDA was no longer applied to water rates of the Parent Company’s
East Zone customers. However, due to non-effectivity of the RCA on June 30, 2022, the Parent Company has
reinstated the original Concession Agreement on July 1, 2022 with the recovery mechanism of the FCDA
still in effect.

On May 10, 2023, the seventh Amendment of the RCA includes FCDA that will be based on the following
(1) Forex gains or losses arising from the payments to service the debt of MWSS Loans; and (2) forex gains or
losses arising from principal payments of loans, limited to the list of loans provided in the RCA. Forex gains or
losses on additional/new foreign currency denominated loans secured and drawn after June 29, 2022 onwards
shall be recovered through Modified FCDA.

As of December 31, 2023 and 2022, the Parent Company’s deferred FCDA on the consolidated statement of
financial position amounted to P
=2,510.95 million and P
= 2,512.71 million, respectively.

Supreme Court Decision in Relation to the Philippine Clean Water Act of 2004
This case arose from a complaint filed by the OIC Regional Director Roberto D. Sheen of the Environmental
Management Bureau-National Capital Region (EMB-NCR) before the Pollution Adjudication Board (PAB) against
the Parent Company, Maynilad, and MWSS for alleged violation of Philippine Clean Water Act of 2004 (RA No.
9275, the “Clean Water Act”), particularly the five (5)-year deadline imposed in Section 8 thereof for connecting
the existing sewage line found in all subdivisions, condominiums, commercial centers, hotels, sports and
recreational facilities, hospitals, market places, public buildings, industrial complex and other similar

*SGVFS187515*
 -8-

establishments including households, to an available sewerage system. Two (2) similar complaints against
Maynilad and MWSS were consolidated with this case.

On September 18, 2019, the Parent Company received a copy of the Decision of the Supreme Court on the case
‘Manila Water Company, Inc. vs. The Secretary of the Department of Environment and Natural Resources
(DENR), et.al.’ with G.R. No. 206823 and promulgated on August 6, 2019. In the Decision, the Supreme Court
found the Parent Company liable for fines in violation of Section 8 of the Clean Water Act in the following
manner:

a. The Parent Company shall be jointly and severally liable with MWSS for the total amount of P = 921.46 million
covering the period starting from May 7, 2009 to the date of promulgation of the Decision, August 6, 2019, to
be paid within fifteen (15) days from finality of the Decision.
b. From finality of the Decision until full payment of the P
=921.46 million fine, the Parent Company shall be fined
in the initial amount of P=322,102.00 per day, subject to a further 10.00% increase every two (2) years as
provided under Section 28 of the Clean Water Act, until full compliance with Section 8 of the same law.
c. The total amount of fines imposed by the Decision shall earn legal interest of six percent (6.00%) per annum
from finality and until full satisfaction thereof.

On October 2, 2019, the Parent Company filed a Motion for Reconsideration with the Supreme Court.

On July 1, 2020, the Parent Company received a copy of the Consolidated Comment (on the separate Motions
for Reconsideration filed by petitioners MWSS, Maynilad, and the Parent Company) filed by the Office of the
Solicitor General in behalf of the adverse parties.

The Parent Company filed with the Supreme Court a Motion for Leave to file and admit its Reply last
August 17, 2020.

On November 3, 2020, the Parent Company received a Resolution dated September 8, 2020 issued by the
Supreme Court, which relevantly (i) noted the Consolidated Comment; (ii) granted the Motion for Leave and
Admit Attached Reply; and (iii) noted the Reply filed by the Parent Company.

On January 25, 2022, the Republic Act (RA) 11601 or “An Act Granting Manila Water Company, Inc. a Franchise
to Establish, Operate, and Maintain a Waterworks System and Sewerage and Sanitation Services in the East
Zone Service Area of Metro Manila and Province of Rizal” took effect. This extends the Parent Company’s
compliance deadline with Sec. 8 of the Clean Water Act from May 7, 2009 to the year 2037.

On January 26, 2022, the Parent Company filed a Manifestation to inform the Supreme Court of certain
developments (i.e., the grant of a legislative franchise to the Parent Company) which it deems relevant in the
resolution of its 2019 Motion for Reconsideration.

On October 21, 2022, the Parent Company received a resolution dated July 19, 2022 issued by the Supreme
Court which modified the dispositive portion of the Court’s August 6, 2019 decision. Accordingly, the Parent
Company is liable for fines in violation of Section 8 of the Clean Water Act in the following manner:

a. The Parent Company shall be jointly and severally liable with MWSS for the total amount of
P
= 202.26 million covering the period starting from May 7, 2009 until January 21, 2022 (date before the
effectivity of RA 11601), to be paid within fifteen (15) days from the receipt of the Resolution.
b. The total amount of fines imposed by the Decision shall earn legal interest of six percent (6.00%) per annum
from finality and until full satisfaction thereof.

On November 2, 2022, the Office of the Solicitor General filed for DENR, a Motion for Partial Reconsideration
related to the resolution issued by the Supreme Court dated July 19, 2022.

On January 17, 2023, the Supreme Court denied with finality the Motion for Partial Reconsideration filed by the
Office of the Solicitor General for DENR, in relation with the lowering of fines imposed against the Parent Company
and MWSS. Supreme Court also rule that no further pleadings or motions will be entertained, and that entry of
judgment will be made immediately.

Accordingly, in 2022, the Parent Company recognized a net reduction of prior years’ provision for Clean Water Act
of P
= 450.26 million in Other Income. (Note 18)

On February 9, 2023, the Parent Company has paid the fines in full amounting to P
= 202.26 million.

*SGVFS187515*
 -9-

Parent Company’s Water Franchise Approval

On January 25, 2022, RA No. 11601 became effective, granting the Parent Company a twenty-five (25)-year
franchise to establish, operate and maintain a waterworks system to ensure an uninterrupted and adequate
supply, and distribution of potable water for domestic, commercial, and other purposes, and for the establishment
and maintenance of sewerage system in the East Zone under a concession from the MWSS, or under an
appropriate certificate of public convenience and necessity, license or permit from the MWSS RO. The franchise
considers MWCI as a public utility. It provides that income taxes due from MWCI cannot be passed on to
consumers.

The Parent Company is likewise given the right to recover, supply, distribute, and reuse treated and grey water
whether in bulk or retail for domestic, commercial or industrial and other purposes within the franchise area.
Furthermore, the Parent Company is allowed to develop new raw water sources as operations may require and
enter into bulk water supply arrangements. It may also exercise the power of eminent domain as necessary for
its operations and may install and maintain its pipelines and facilities on public property and roads.

Section 5 of RA No. 11601 provides that the Concession Agreement shall serve as the certificate of public
convenience and necessity, license or permit of MWCI for the operation of its waterworks and sewerage system.
Under RA 11601, “Concession Agreement” refers to the agreement between MWCI and MWSS executed on
February 21, 1997, as revised by the “Revised Concession Agreement” dated March 31, 2021, and further
amended on July 1, 2022, by the “7th Amendment to the Revised Concession Agreement”, or as may thereafter
be amended.

When public interest for affordable water security requires and upon application by the Parent Company, MWSS
shall be authorized to approve the amendment of the Concession Agreement to extend its term up to the term of
the franchise, after appropriate notice and hearing.

As franchisee, the Parent Company is obligated to submit to the RO a completion plan for the establishment and
operation of water, sewerage and sanitation project covering a period until 2037, with periodic five (5)-year
completion targets with the end goal of achieving one hundred percent (100.00%) water and combined sewerage
and sanitation coverage by 2037.

The Parent Company is required to submit a compliance report to Congress through the Committee on
Legislative Franchises of the House of Representatives and the Committee on Public Services of the Senate on
or before April 30 of each year. The annual report will contain the following:

a. Annual progress report of compliance with targets;

b. An update on the development, operation, and expansion of business;
c. Audited financial statements
d. Latest General Information Sheet (GIS) officially submitted to the SEC, if applicable;
e. A certification of the MWSS RO on the status of its permits and operations; and
f. An update on its minimum public float required under Section 18.

The Parent Company is obligated to submit all information and documents required by the MWSS RO to conduct
comprehensive assessment of the grantee’s operations and compliance with conditions imposed in
RA No. 11601. Further, the Parent Company is required to provide and promote creation of employment
opportunities, maintain minimum public float as required by the Philippine Stock Exchange, and elect
independent directors constituting at least 20.00% of its total BOD membership.

Tariff setting to be conducted by the MWSS RO or its legal successor shall take into account incentives for
enhancement of efficiency, equity considerations, and the customers’ willingness to pay apart from reasonable
and prudent capital and recurrent costs of providing the service including a reasonable rate of return on capital,
efficiency of service, administrative simplicity, and the methodology prescribed under the RCA.

On March 2, 2022, the MWSS BOT approved Resolution No. 2022-025-RO, Series 2022 involving the
implications of the Legislative Franchises on the value-added tax (VAT) and franchise tax of the Concessionaires
specifically:

i. The removal of VAT from the customer bills of Manila Water and Maynilad resulting from the grant of the
Legislative Franchises to the Concessionaires, subject to the National Internal Revenue Code of 1997, as
amended, and the relevant rules of the Bureau of Internal revenues; and

ii. The imposition of Government Taxes in the customers’ bills as pass-through costs comprised of a national
franchise tax at the rate of 2.00% and actual implemented rates of local franchise tax for each local
government unit starting March 21, 2022.

*SGVFS187515*
 - 10 -

On March 21, 2022, the Parent Company submitted its notice of acceptance of the twenty-five (25)-year
legislative franchise to the Committee on Legislative Franchises of the House of Representatives and the Senate
Committee on Public Services.

On April 29, 2022, the Parent Company submitted its 1st Annual Report to Congress in compliance with
Section 21 of RA No. 11601.

On November 9, 2023, after due notice to the public, the MWSS-RO conducted a public hearing for the
extension of the expiration date of the RCA. This is in view of Parent Company’s application to extend the term
of the RCA for another 10 years or until 2047 to align with the term of its Franchise.

Parent Company’s, MWSS’, and WawaJVCo, Inc.’s Raw Water Supply Offtake Agreement
On August 6, 2019, MWSS along with the Parent Company signed a thirty (30)-year Raw Water Supply Offtake
(Wawa Bulk Water) Agreement with WawaJVCo, Inc. (the Joint Venture), a joint venture company formed
between Prime Metroline Infrastructure Holdings Corporation and San Lorenzo Builders and Developers
Corporation. This will involve the supply of 518 million liters per day of raw water from the Wawa and Tayabasan
rivers and is among the medium-term water supply augmentation measures identified to provide water security
and sustainability to the consumers of the East Service Area.

On September 9, 2019, the MWSS RO adopted RO Resolution No. 2019-12-CA declaring the proposed Wawa-
Calawis Bulk Water Supply Project as sound and feasible for implementation and recommending the inclusion of
the total systems cost or Total Expense of the 518 million liters per day Calawis Water Treatment Plant and
Conveyance Facility Project, prudently and efficiently incurred, in the next Rate Rebasing Exercise.

On September 10, 2019, the MWSS BOT approved the recommendation of the MWSS RO through MWSS
Resolution No. 2019-143-RO.

On January 7, 2020, the parties executed the First Supplement to the Wawa Bulk Water Agreement to reflect
their agreement on the joint conditions precedent.

On September 28, 2021, the parties executed the Second Supplement to the Wawa Bulk Water Agreement to
reflect the impact of the COVID-19 pandemic on the timeline of the project.

The first phase of the agreement will involve supply of 80 million liters per day of raw water in October 2022,
while the second phase will supply the additional 438 million liters per day of raw water by December 31, 2025.

On October 25, 2022, the construction of the Tayabasan Multibasin System Project was completed, and the
Joint Venture commenced the provision of initial 80 million liters per day of raw water to the Parent Company.

Significant Transactions – Domestic Subsidiaries

Laguna Water’s Concession Agreement with the Provincial Government of Laguna (PGL)
On April 9, 2002, Laguna Water entered into a concession agreement (as amended on March 31, 2004,
July 22, 2009, June 30, 2015, and May 3, 2018) with PGL, a local government unit organized and existing under
Philippine Laws.

Under the terms of the concession agreement, PGL grants Laguna Water (as contractor and as agent for the
exercise of certain rights in Laguna) the sole and exclusive right and discretion during the concession period to
manage, occupy, operate, repair, maintain, decommission and refurbish the identified facilities required to
provide water services to specific areas for an operational period of twenty-five (25) years which commenced on
October 20, 2004.

While Laguna Water has the right to manage, occupy, operate, repair, maintain, decommission and refurbish
specified PGL facilities, legal title to these assets remains with PGL. Legal title to all assets procured by Laguna
Water in the performance of its obligations under the agreement remains with Laguna Water and shall not pass
to PGL until the end of the concession period at which time, Laguna Water will transfer, or if the ownership is
vested in another person, cause the transfer to PGL. Laguna Water has the exclusive right to provide water
services in the service areas specified in the concession agreement. Concession fees set forth in the
concession agreement are computed as a percentage of revenue from water services (see Note 10).

Seventy percent (70%) of the concession fees are applied against any advances made by Laguna Water to PGL.
The remaining thirty percent (30%) of the concession fees are payable annually thirty (30) days after the
submission of the audited financial statements by Laguna Water, starting on the first operational period.

*SGVFS187515*
 - 11 -

The concession agreement also states that the base tariff shall be increased by ten percent (10%) in Year 7, 9,
11, 14, and 17 of Laguna Water’s concession, which took effect on the commencement date on
October 20, 2004.

On June 30, 2015, Laguna Water and the PGL signed an amendment to the concession agreement which
expands the concession area to cover all cities and municipalities in the province of Laguna, as well as the
service obligation to include the provision of wastewater services and the establishment of an integrated sewage
and septage system in the province.

In connection with the amendment to the concession agreement on June 30, 2015, the Sangguniang Bayan of
the municipality of Calauan, Laguna approved the resolution allowing Laguna Water to provide water and
wastewater services to the municipality of Calauan.

Furthermore, the concession period’s commencement date was amended to mean the later of either: (i) three (3)
years from the takeover date (i.e., October 20, 2004); or (ii) availment by at least 25,000 customers of the
services (i.e., September 30, 2010). The concession period is deemed to have commenced on
September 30, 2010 and shall end on September 30, 2035.

On October 20, 2015, the Year 11, Laguna Water made a tariff adjustment of 10% which was implemented in
November 2015.

On August 23, 2017, the Sangguniang Bayan of Victoria, Laguna, approved the inclusion of its municipality
within the service area of Laguna Water, pursuant to the expansion of the service area of Laguna Water under its
amended concession agreement with PGL.

On May 3, 2018, the concession agreement was amended to include the approval of an environmental charge
amounting to twenty percent (20%) of the water tariff for wastewater services, desludging services, and other
environmental-related costs which was implemented on September 22, 2018.

On October 20, 2018, the Year 14, Laguna Water implemented a tariff adjustment of 10.00% effective
December 1, 2018.

In view of the Provisional Authority and Provisional Water Tariff issued by the National Water Resources Board
(NWRB) on September 28, 2021, Laguna Water implemented an average of 10.00% tariff increase across all
customer rate categories effective November 1, 2021 (for residential, institutional and few commercial accounts)
and December 1, 2021 (for the remaining commercial and industrial accounts).

On September 28, 2022, the NWRB issued Resolution No. 13-0922 approving the Certificate of Public
Convenience (CPC) of the Company valid for ten years and the rates to be implemented by the Company. Based
on the approved CPC, the Company implemented a tariff increase to all its customers except LTI and Pagsanjan
which became effective on January 1, 2023. Subsequently, tariff increase for LTI was also implemented and
became effective on February 1, 2023. Upon implementation, varying rates on tariff increases were applied to
each customer category depending on its current rate and NWRB's customer classification.

Boracay Water’s Concession Agreement with Tourism Infrastructure and Enterprise Zone Authority (TIEZA)
On December 17, 2009, Boracay Water entered into a concession agreement with TIEZA, formerly Philippine
Tourism Authority (PTA). The concession agreement sets forth the rights and obligations of Boracay Water as
concessionaire throughout a twenty-five (25)-year concession period. TIEZA Regulatory Office (TIEZA RO) will
monitor and review the performance of the concessionaire throughout the concession period.

Under the concession agreement, TIEZA grants Boracay Water (as contractor to perform certain functions and
as agent for the exercise of certain rights and powers under Presidential Decree No. 564) the sole right to
manage, operate, repair, decommission, and refurbish all fixed and movable assets (except certain retained
assets) required to provide water delivery and sewerage services to the entire Boracay Island for a period of
twenty-five (25) years from January 1, 2010 (commencement date) until December 31, 2034 (expiration date), or
the early termination date as the case may be. The legal title to all fixed assets contributed to the existing TIEZA
system by Boracay Water during the concession remains with Boracay Water until the expiration date (or the
early termination date) at which time all rights, titles and interest in such assets will automatically vest in TIEZA.

On January 1, 2010, Boracay Water officially took over the operations of the service area. Rehabilitation works
for the service area commenced immediately thereafter. As provided in Boracay Water’s project plans,
operational commercial capacity will be attained upon completion of the rehabilitation works.

*SGVFS187515*
 - 12 -

Under its concession agreement, Boracay Water is entitled to the following rate adjustments:

a. annual standard rate adjustment to compensate for increases in the CPI;

b. EPA to account for the financial consequences of the occurrence of certain unforeseen events stipulated in
the concession agreement; and
c. FCDA to recover foreign exchange losses including accruals and carrying costs thereof arising from TIEZA
loans and any loans used for capital expenditures and concession fee payments (see Notes 2, 3 and 13).

These rate adjustments are subject to a rate adjustment limit which is equivalent to the sum of CPI published in
the Philippines, EPA and Rebasing Convergence Adjustment as defined in Boracay Water’s concession
agreement.

The rate rebasing date is set every five (5) years starting January 1, 2011. Hence, the first rate rebasing period
commenced on January 1, 2010 and ended on December 31, 2010 and, in the case of subsequent rate rebasing
periods, the period commencing on the last rate rebasing date and ending on December 31 of the fifth year
thereafter.

On June 7, 2017, TIEZA approved the new water rates of Boracay Water, which was equivalent to an increase of
52.83% from its existing rate to be implemented on a staggered basis for a period of three (3) years with an
increase of 30.14%, 11.99%, and 10.70% in 2017, 2018 and 2019, respectively. The first tranche of tariff
increase was implemented on July 1, 2017, equivalent to 30.14% of the existing rate.

On December 15, 2017, TIEZA approved Boracay Water’s implementation of the second tranche of tariff
increase along with a 3.80% CPI effective January 1, 2018.

On December 18, 2018, TIEZA approved Boracay Water’s implementation of the third tranche of tariff increase
together with 7.72% CPI. Furthermore, an additional 3.00% was applied to the basic water and sewer tariff to
account for FCDA. The new rates took effect on January 1, 2019.

Boracay Water’s concession agreement also provides a general rate setting policy for rates chargeable by
Boracay Water for water and sewerage services as follows:

a. For the period through the second rate rebasing date (January 1, 2017), the maximum rates chargeable by
Boracay Water (subject to interim adjustments) are set out in the concession agreement; and

b. From and after the second rate rebasing date, the rates for water and sewerage services shall be set at a
level that will permit Boracay Water to recover, over the twenty-five (25)-year term of its concession, its
investment including operating expenses, capital maintenance and investment incurred, Philippine business
taxes and payments corresponding to debt service on the TIEZA loans incurred to finance such
expenditures, and to earn a rate of return on these expenditures for the remaining term of the concession in
line with the rates of return being allowed from time to time to operators of long-term infrastructure
concession arrangements in other countries having a credit standing similar to that of the Philippines.

The maximum rates chargeable for such water and sewerage services shall be subject to general adjustment at
five (5)-year intervals commencing on the second rate rebasing date, provided that the TIEZA may exercise its
discretion to make a general adjustment of such rates.

Also, as part of the concession agreement, Boracay Water assumed certain property and equipment of Boracay
Water Sewerage System (BWSS), as well as its outstanding loan from Japan International Cooperation Agency
(JICA), considered as part of its TIEZA loans under the concession agreement, and regulatory costs.

As a result of the above terms of the concession agreement, Boracay Water recognized a total of P
=986.86 million
service concession assets on its commencement date. It includes the JICA loan assumed by Boracay Water,
regulatory costs, construction costs for the improvement and expansion of the water and wastewater facilities
and the advanced concession fees (see Note 10).

On February 22, 2023, TIEZA approved the new rates of Boracay Water, which are equivalent to an upward
adjustment of 14.02% representing the first tranche of rebasing convergence adjustment including 6.4% CPI
effective 15 days after the publication to two newspapers of general circulation.

On November 28, 2023, Boracay Water submitted the proposal for the 14.02% second tranche of the rebasing
convergence adjustment plus 6.1% CPI which was approved by TIEZA on December 14, 2023. Approved tariff
for second tranche was implemented starting January 1, 2024.

*SGVFS187515*
 - 13 -

Clark Water’s Concession Agreement with Clark Development Corporation (CDC)

On March 16, 2000, Vivendi Water Philippines, Inc., which subsequently changed its name to Veolia Water
Philippines, Inc. (VWPI), entered into a concession agreement with CDC, a government corporation organized
and existing under Executive Order No. 80, series of 1993. The concession agreement sets out the terms and
conditions under which VWPI will finance, design, construct, operate and maintain the water and sewerage
system inside the Clark Freeport Zone (CFZ) commencing on October 1, 2000 and ending on the date falling
twenty-five (25) years thereafter or as may be extended by the terms of the concession agreement. As the
implementing arm of the Bases Conversion Development Authority and the regulatory and development body for
the CFZ, CDC has the power and authority to regulate and monitor the performance and compliance of VWPI, or
its assignee, with its obligations under the concession agreement.

On September 1, 2000, in accordance with the terms of the concession agreement, VWPI assigned its rights and
obligations under the concession agreement to Clark Water by virtue of an assignment and assumption
agreement between VWPI and Clark Water. As consideration for the grant of the concession and franchise to
develop, operate and maintain the water and sewerage system within the CFZ, Clark Water pays CDC an annual
franchise fee of P = 1.50 million. Any new construction, change, alteration, addition or improvement on the facilities
is permitted to the extent allowed under the agreement with CDC or with the prior written consent of CDC. Legal
title, free of all liens and encumbrances, to improvements made or introduced by Clark Water on the facilities as
well as title to new facilities procured by Clark Water in the performance of its obligations under the concession
agreement shall automatically pass to CDC on the date when the concession period expires or the date of
receipt of a validly served termination notice, where in the latter case, subject to payment of the amount due as
termination payments as defined in the concession agreement.

On September 29, 2000, CDC leased in favor of Clark Water the existing facilities in compliance with the
condition precedent to the effectivity of and the respective obligations of Clark Water and CDC under the
concession agreement. Under the lease agreement, Clark Water was required to make a rental deposit
amounting to P = 2.77 million equivalent to six (6) months lease rental and a performance security amounting to
P
= 6.72 million to ensure the faithful compliance of Clark Water with the terms and conditions of the lease
agreement. Clark Water pays semi-annual rental fees of P = 2.77 million amounting to a total of P
= 138.28 million for
the entire concession period. The lease term shall be co-terminus with the concession period, unless sooner
terminated for any of the reasons specified in the concession agreement.

On August 15, 2014, Clark Water and CDC signed an amendment agreement to the concession agreement
dated March 16, 2000. The amendment provides for the following:

a. extension of the original concession period for another fifteen (15) years up to October 1, 2040;
b. additional investment of P = 4.00 billion over the remaining life of the extended concession period, provided
under the amended concession agreement, to be spent for further improvement and expansion of water and
wastewater services in the area. Investment requirement under the original concession agreement
amounted to P = 3.00 billion and the amended concession agreement required an additional investment of
P
= 2.00 billion. Initial investment prior to the amendment of the concession agreement amounted to
P
= 1.00 billion.
c. introduction of a rate rebasing mechanism for every four (4) years starting 2014.
d. reduction in tariff rates by 3.9% (from P = 25.63/m3 to P
= 24.63/m3) effective September 1, 2014, subject to the
EPA; and
e. increase in tariff rates by:
i. = 0.41/m3 (from 24.63/m3 to P
P = 25.04/m3) in 2018;
ii. = 0.42/m3 (from P
P = 25.04/m3 to P = 25.45/m3) in 2019;
3 3
iii. P
= 0.42/m (from P = 25.45/m to P = 25.87/m3) in 2020; and
iv. = 0.43/m3 (from P
P = 25.87/m3 to P = 26.30/m3) in 2021.

As a result of the extension of the concession period, service concession assets and service concession
obligation as of August 15, 2014 increased by P= 56.58 million. Further, the recovery period of Clark Water’s
investment was extended by another fifteen (15) years from 2025 to 2040.

On May 26, 2017, Clark Water submitted its proposed 2018 rate rebasing plan following the four (4)-year
rebasing period stated in its concession agreement. As of December 31, 2022, Clark Water’s 2018 rate rebasing
is still ongoing which put on hold the approved tariff increases under the amended concession agreement on
August 15, 2014.

On December 20, 2023, CDC Board approved the 60% tariff increase following 60-20-20 tranches to be
implemented effective January 1, 2024.

*SGVFS187515*
 - 14 -

Clark Water’s Compliance with the Department of Environment and Natural Resources’ (DENR’s) Administrative
Order No. (DAO) No. 2016-08
On June 16, 2016, the DENR promulgated DAO No. 2016-08 regulating the discharge of nutrients and imposing
additional limits and parameters. Pursuant to Section 10 of DAO No. 2016-08, Clark Water sought the approval
of the DENR of its Compliance Action Plan (CAP) which would have extended the current five (5)-year CAP of
Clark Water. On July 17, 2020, Clark Water received the approval of DENR on its submitted CAP with project
completion deadline of December 31, 2021. On October 19, 2020, the CDC sent a letter to the DENR in support
of Clark Water’s request for extension of its CAP to 2023. On November 11, 2020, however, the CDC received a
letter from the DENR denying Clark Water’s request citing the DAO No. 2016-08’s clear five (5)-year limit for the
grace period. On November 26, 2020, CDC sent another letter to the DENR appealing to the DENR for
reconsideration of their request to postpone the DAO No. 2016-08. On December 7, 2020, the DENR sent a
letter to the CDC, denying their request for the second time.

As a result, DENR held in abeyance the renewal of Clark Water’s discharge permit pending its compliance with
the CAP even though Clark Water is compliant with DAO No. 1990-35, the applicable regulation at that time. On
April 20, 2021, Clark Water received notice to proceed from CDC. Clark Water immediately proceeded with the
construction of the Bionutrient Removal (BNR) Project in compliance to the approved CAP. DENR subsequently
issued a temporary discharge permit on April 26, 2021 valid until October 30, 2021.

On July 29, 2021, DAO No. 2016-08 was superseded by a relaxed standard under DAO No. 2021-19.
On December 21, 2021, Clark Water sent a letter to the DENR for the reduced CAP pursuant to
DAO No. 2021-19. On January 13, 2022 DENR issued Discharge permit extension until March 31, 2022.
This permit has been extended until February 11, 2023.

On February 7, 2023, Clark Water received a letter from DENR stating that Clark Water may continue providing
services and is allowed to operate under its existing discharge permit, until its application made in
January 12, 2023 has been granted and a new discharge permit has been issued. On August 29, 2023, the
discharge permit was extended until February 29, 2024.

On February 21, 2024, DENR issued Discharge permit renewal until February 21, 2025.

On December 21, 2023, penalties related to Pollution Adjudication Board (PAB) case amounting to P
= 1.06 million
was settled.

MW Consortium Agreement with the Provincial Government of Cebu (PGC)

On March 21, 2012, MW Consortium signed a Joint Investment Agreement (JIA) with the PGC for the formation
of a joint venture company with 51.00% and 49.00% equity participation for MW Consortium and the PGC,
respectively. Under the JIA, the parties agreed to develop and operate a bulk water supply system that will
supply 35 million liters of water per day to target areas in the province of Cebu with the joint venture company
serving as a bulk water supplier. The term of the agreement is thirty (30) years starting March 2012 and
renewable for another twenty-five (25) years. On May 23, 2012, MW Consortium and the PGC incorporated
Cebu Water, with an ownership of 51.00% and 49.00%, respectively, pursuant to the JIA.

On December 13, 2013, Cebu Water received a Notice of Award for the bulk supply of water to the Metropolitan
Cebu Water District (MCWD). On December 18, 2013, Cebu Water and MCWD signed a twenty (20)-year Bulk
Water Supply Contract for the supply of eighteen (18) million liters per day of water for the first year and
thirty-five (35) million liters per day of water for years two (2) up to twenty (20). Cebu Water delivered its initial
eighteen (18) million liters per day bulk water supply to MCWD on January 5, 2015. Cebu Water increased its
bulk water delivery to thirty-five (35) million liters per day in 2016.

On August 29, 2019, MW Consortium received a Notice of Breach/Default of the JIA from the PGC. On
December 10, 2019, PGC issued a Notice of Termination of the JIA. Pursuant to the JIA, MW Consortium
issued a Notice of Existence of a Dispute on PGC on December 12, 2019.

On February 3, 2020, MW Consortium and the PGC signed the Terms of Reference for the interim protocol
between both parties pending Settlement with Finality of the Dispute between MW Consortium and PGC.

On March 29, 2022, MW Consortium and PGC executed a Settlement Agreement that constitutes the full, final
and complete settlement of all claims, complaints, and causes of action of PGC against Cebu Water in relation to
the perceived breach of the Joint Investment Agreement between the two parties.

*SGVFS187515*
 - 15 -

On April 7, 2022, MWPVI secured the approval of its BOD to purchase the 32.6% stake (107,601,639
common shares) of Metro Pacific Water Investment Corporation in MW Consortium for a purchase price of
P
= 107.60 million. The Share Purchase Agreement and Deed of Absolute Sale were duly signed by the parties on
May 12, 2022.

On September 2022, PGC and Cebu Water, started negotiating the tariff increase with MCWD, in order to
improve the financial returns of the JIA and to meet the 19.29% pooled internal rate of return (PIRR), as stated in
the JIA between PGC and Cebu Water.

On October 3, 2023, Cebu Water issued a termination notice for the bulk water supply and purchase agreement
between MCWD and Cebu Water which became effective December 1, 2023. From December 1, 2023 to
January 31, 2024, Cebu Water continued to supply bulk water to MWCD through PGC invoking Section 16 of the
Local Government Code or the general welfare clause to solve the problem on loss of water supply.

On January 17, 2024, MWPVI submitted all requirements on the bidding conducted by MCWD for the new bulk
water supply. MWPVI will deliver water to MCWD by leasing the facilities of Cebu Water.

On January 25, 2024, a Notice of Award was issued by MCWD to MWPVI on the supply and delivery of potable
bulk water.

On January 30, 2024, MWPVI and MCWD signed a ten (10)-year Bulk Water Supply Contract for the supply of
eighteen (30) million liters per day of water. MWPVI delivered its initial thirty (30) million liters per day bulk water
supply to MCWD on February 1, 2024.

Zamboanga Water’s Non-Revenue Water Reduction Service Agreement (NRWRSA) with Zamboanga City Water
District (ZCWD)
On December 19, 2014, the Parent Company received a notice from the ZCWD awarding the project for NRW
reduction in Zamboanga City, Zamboanga del Sur. On January 30, 2015, the Parent Company and ZCWD
signed and executed a JVA in relation to the NRW reduction project in Zamboanga City. On April 10, 2015, the
Parent Company and ZCWD incorporated Zamboanga Water to implement the NRW Reduction project.

On June 2, 2015, Zamboanga Water entered into a NRW Reduction Service Agreement (NRWRSA) with ZCWD.
Under the NRWRSA, ZCWD grants Zamboanga Water the right to implement Network Restructuring and NRW
Reduction Programs for ZCWD’s water distribution system.

In March 2019, the City Government of Zamboanga City declared a state of calamity due to the recurrence of El
Niño. This prompted the ZCWD to implement a service-wide water rationing scheme. Consequently,
Zamboanga Water was constrained to suspend its NRW Reduction activities due to the unstable supply caused
by said water rationing.

In October 2019, Zamboanga Water and ZCWD jointly formed a Technical Working Group to negotiate and
resolve all the pending issues or disputes arising during the implementation of the NRW Reduction Project, such
as the impact of the yearly occurrence of El Nino, non-payment of performance and “locked-in” fees, opposing
interpretation of provisions in the NRWRSA, among others.

Per Section 1.10 of the NRWRSA, a rebaseline is to be performed if there is a decrease in supply resulting from
El Niño. Per agreement with ZCWD Project Management Unit (PMU) in November 2017, the computed NRW
cu.m./day prior the rebaseline shall be used as basis for the “locked-in” performance computation. However, a
supplemental agreement to formally recognize the computation and payment of “locked-in” performance has not
been finalized as of December 31, 2019.

On April 3, 2020, Zamboanga Water received a letter, dated April 1, 2020, from the ZCWD, requesting for the
termination of the NRWRSA. In its letter, ZCWD indicated that the erratic supply of water due to the recurrent
dry spell and El Niño phenomenon affecting the District Metered Areas (DMAs) established by Zamboanga
Water has rendered the NRWRSA impractical and unworkable, and thus, in the interest of fiscal responsibility
and sound management of government funds, ZCWD requested for the termination of the NRWRSA.

On April 30, 2020, Zamboanga Water approved the termination of the NRWRSA. Such termination, however, is
without prejudice to Zamboanga Water’s claims against ZCWD and remedies under the NRWRSA. The
termination of the NRWRSA resulted to the classification of Zamboanga Water as discontinued operations (see
Note 3). The summary of results of operations and cash flows of Zamboanga Water as of December 31, 2023,
2022 and 2021 are presented in Note 19.

*SGVFS187515*
 - 16 -

On September 16, 2020, Zamboanga Water filed a Notice of Arbitration with the Philippine Dispute Resolution
Center, Inc. (PDRCI), which is the arbitral body designated in the NRWRSA.

On August 8, 2022, the Arbitral Tribunal under the PDRCI has issued the final decision in favor of Zamboanga
Water related to its claims against ZCWD for unpaid fixed fees and performance fees, interest, and other claims.
ZCWD was ordered to pay P = 38.72 million for the outstanding fixed fees and performance fees plus interest from
the time of the finality of the decision, as well as future performance fees and others as stated in the final
decision. As of December 31, 2023, receivable remains outstanding, as ZCWD filed its appeal on the last quarter
of 2023.

Tagum Water’s Bulk Water Sales and Purchase Agreement with Tagum Water District (TWD)
On July 28, 2015, TWD awarded the Tagum City Bulk Water Supply Project (the “Tagum Bulk Water Project”) to
Davao Water, a consortium of the Parent Company and iWater, Inc.

On October 15, 2015, Davao Water signed and executed a Joint Venture Agreement (JVA) with TWD. The JVA
governs the relationship of Davao Water and TWD as joint venture partners in the Tagum Bulk Water Project.
Pursuant to the JVA, Davao Water and the TWD caused the incorporation of a joint venture company, namely,
Tagum Water, which shall implement the Tagum Bulk Water Project for fifteen (15) years from the Operations
Start Date, as defined in the JVA.

On February 26, 2016, Tagum Water and TWD signed and executed a Bulk Water Sales and Purchase
Agreement for the supply of bulk water to TWD for a period of fifteen (15) years, subject to renewal upon mutual
agreement by both parties. Tagum Water shall supply treated water exclusively to TWD. The quantity of treated
water to be supplied to TWD will be 26 million liters of water per day for the first year, 32 million liters of water per
day for years 4 to 6, and 38 million liters of water per day for years 7 to 15.

On March 28, 2017, TWD issued a Notice to Proceed for the 24-month construction of the water treatment plant.
On June 26, 2019, TWD approved a 120-day construction period extension requested by Tagum Water due to
delays caused by unforeseen conditions in the project site which was discovered only after construction had
already commenced.

On July 17, 2019, Tagum Water issued to TWD the Certificate of Substantial Completion of the Water Treatment
plant to begin the pre-commissioning period. On August 27, 2019, Tagum Water started the commissioning
period with 5 to 8 million liters per day of treated water delivery to TWD.

On September 9, 2019, Tagum Water’s BOD ratified the implementation of the design, supply of materials,
installation of equipment and construction of two (2) units 300 mm shallow wells in Tagum City, Davao del Norte.
On October 28, 2019, Tagum Water informed TWD of the completion of the two (2) wells and the results of the
water quality analysis.

On December 6, 2019, Tagum Water’s BOD approved the additional capital expenditure in the initial amount of
P
= 157.00 million to address the inadequacy of yield in the intake structure. Tagum Water constructed two (2)
additional wells, (i) artificial recharge thru media replacement and (ii) chlorine scrubber system, to ensure health
and safety during the operation.

On December 11, 2019, Tagum Water commenced the extension of the commissioning period for 120 days with
the consent of TWD BOD.

On February 7, 2020, the Tagum Water BOD finalized the approval of the additional capital expenditure in the
amount of P= 154.00 million. On April 4, 2020, the extended commissioning period was concluded. However, the
operation started only on May 18, 2020 due to COVID-19 quarantine measures in the region.

On March 16, 2021, an artificial recharge intake structure was energized to deliver the contractual volume of 26
million liters per day. However, in the second quarter of 2021, several unusual heavy rains which brought floods
were encountered, and this resulted to silt issue on the lagoon. This, in turn, affected plant production, yielding
only an average of 23 million liters per day. To mitigate the problem, heavy desilting activities were done, and on
November 22, 2021, the procured slurry dredger was already operational in aiding the desilting activities at the
artificial recharge lagoon. On December 14, 2021, the plant was already back to its delivery of the contractual 26
million liters per day to TWD.

On January 31, 2022, MWPVI agreed to purchase the 49.00% share of iWater, Inc. in Davao Water.
On February 24, 2022, MWPVI secured the approval of its BOD to purchase the 49.00% stake (735,000
common shares) of iWater, Inc. in Davao Water for P
= 345.33 million.

*SGVFS187515*
 - 17 -

On March 8, 2022, MWPVI took full ownership of Davao Water after the acquisition of 735,000 common shares
held by iWater Inc. (iWater) for a consideration of P
= 345.33 million. Prior to the purchase, MWPVI held 51.00%
while iWater held 49.00% equity interest each. Effective March 1, 2022, all the BOD members of the Davao
Water are representatives of MWPVI.

The share purchase agreement caused a significant shift in the ownership structure of Davao Water. Starting
from March 15, 2022, Davao Water is a wholly-owned subsidiary of MWPVI.

MWPVI’s Memorandum of Agreement (MOA) with Ayala Land Inc. (ALI)

On January 15, 2016, MWPVI entered into a MOA with ALI and its subsidiaries (collectively, the “ALI Group”),
whereby MWPVI shall exclusively provide water and used water services and facilities to all property
development projects of the ALI Group.

On April 19, 2021, MWPVI and Aqua Centro entered into a Novation Agreement with Adauge Commercial
Corporation whereby MWPVI assigns and transfers its rights, duties and obligations under the MOA with ALI
Group to Aqua Centro for Atria Development (Iloilo City).

On May 31, 2021, MWPVI and the ALI Group signed an Amended and Restated MOA. MWPVI shall have a
preferred status with regards to the provision of water and used water services to all property development
projects of the ALI Group except for the excluded developments namely, Amaia Scape Pampanga, Amaia Scape
San Fernando, Amaia Scape Capas, Amaia Scape Cabanatuan, Amaia Scape Trece Martires, Bellavita Capas,
Bellavita Cabanatuan 1 and East, Bellavita Pililia, Bellavita Lian, Bellavita Lipa, Bellavita Rosario and Bellavita
Iloilo.

On December 29, 2021, MWPVI entered into a Deed of Absolute Sale with Amaia Land Corp. (Amaia) and
BellaVita Land Corp. (BellaVita) whereby MWPVI sells, conveys, transfers, assigns and delivers the properties
and all rights, title, and interest to Amaia and BellaVita for the excluded development on the Amended and
Restated MOA with ALI Group (see Notes 9 and 23). As of December 31, 2021, MWPVI completed the sale and
transfer of the properties to Amaia and BellaVita.

Aqua Centro’s MOAs with the SM Group

On December 8, 2016, MWPVI entered into MOAs with each of SM Prime Holdings Inc.’s and the latter’s
affiliates and subsidiaries, SM Development Corporation and SM Residences Corp. (collectively, the “SM
Group”). Pursuant to the MOA, MWPVI will provide the water and/or used water services and facilities to the
property development projects of the SM Group identified in each of the MOA.

On October 5, 2017, Aqua Centro was incorporated to handle property development projects, other than those
within the ALI Group, by engaging in the development, improvement, maintenance, and expansion of water,
sewerage, wastewater, and drainage facilities, and provide services necessary or incidental thereto.

On December 28, 2017, MWPVI entered into a Novation Agreement with the SM Group and Aqua Centro to
transfer its rights, duties and obligations to provide water and/or used water services and facilities to the property
development projects of the SM Group to Aqua Centro, effective from the inception of the MOA.

On June 25, 2018, Aqua Centro entered into additional MOAs with the SM Group with each development of SM
Prime Holdings, Inc. and Metro South Davao Property Corp.

As of December 31, 2023 and 2022, Aqua Centro and MWPVI have eight (8) signed MOAs with the SM Group.

Calasiao Water’s Concession Agreement with Calasiao Water District (CWD)

On December 9, 2016, the Parent Company received a Notice of Award from CWD, a water district created and
existing by virtue of Presidential Decree No. 198, for the implementation of the joint venture project for the
design, construction, rehabilitation, maintenance, operation, financing, expansion and management of the water
supply system of CWD in Calasiao, Pangasinan.

On June 19, 2017, the Parent Company signed a JVA with CWD which will govern the relationship of the two in
undertaking the joint venture project. Under the JVA, the Parent Company and CWD shall cause the
incorporation of a joint venture company where the Parent Company and CWD shall own 90.00% and 10.00%,
respectively, of the outstanding capital stock.

On August 2, 2017, the SEC approved the incorporation of Calasiao Water Company, Inc.

*SGVFS187515*
 - 18 -

On October 23, 2017, Calasiao Water and CWD signed and executed a concession agreement. Under the
concession agreement, the CWD grants Calasiao Water, (as contractor to perform certain functions and as agent
for the exercise of certain rights and powers under Presidential Decree No. 564) the sole right to develop,
manage, operate, maintain, repair, decommission, and refurbish all fixed and movable assets (except certain
retained assets) required to provide water delivery in the entire Municipality of Calasiao for a period of
twenty-five (25) years commencing on December 29, 2017 (the commencement date) until December 29, 2042
(the expiration date) or the early termination date as the case may be. While Calasiao Water has the right to
manage, operate, repair, and refurbish specified CWD facilities in the service area, legal title to these assets
remains with the CWD. The legal title to all fixed assets contributed to the existing CWD system by Calasiao
Water during the concession remains with Calasiao Water until the expiration date (or the early termination date)
at which time all rights, titles and interest in such assets will automatically vest in CWD.

Under the concession agreement, in the event that one or more grounds for EPA has occurred or is expected to
occur, an appropriate price adjustment to be applied to the tariff or an appropriate adjustment to the service
obligations of the concessionaire will be determined by the CWD.

The grounds for EPA means any of the following circumstances:

a. change in law or change in the interpretation of the terms of the concession agreement;
b. extraordinary cost incurred due to prolonged force majeure;
c. a material change has been made to the basis of calculation or definition of the CPI or replacement index
agreed; or
d. the concessionaire has incurred significant additional costs as a result of an event of force majeure which
are not covered by insurance.

In March 2022, the Municipality of Malasiqui, Pangasinan and Calasiao Water District (CWD) entered into a
memorandum of agreement to operate Tourism Water Utility Assistance consisting of seven (7) barangays. As
its JV Partner, CWD awarded the operation of the facility to Calasiao Water Company.

MWPVI’s Asset Purchase Agreement (APA) with Asian Land Strategies Corporation (Asian Land) and
Incorporation of BMDC
On January 4, 2017, MWPVI entered into an APA with Asian Land to acquire and operate the latter’s assets
used in the water business operations in Asian Land’s developments in the province of Bulacan. The intention of
MWPVI was to assign the rights under the APA to its wholly-owned subsidiary upon its incorporation.

On April 11, 2017, BMDC was incorporated to design, construct, rehabilitate, maintain, operate, finance, expand,
and manage water supply system and sanitation facilities. BMDC is the ultimate entity that will own and operate
the assets acquired from Asian Land.

On July 31, 2017, MWPVI assigned all its rights and obligations under the APA to BMDC, a wholly-owned
subsidiary of MWPVI, under a Deed of Assignment. On the same day, the Deed of Absolute Sale was also
executed between Asian Land and BMDC.

Obando Water’s Concession Agreement with Obando Water District (OWD)

On January 24, 2017, the consortium of the Parent Company and MWPVI received the Notice of Award from
OWD for the implementation of the joint venture project for the design, construction, rehabilitation, maintenance,
operation, financing, expansion, and management of the water supply system and sanitation facilities of OWD in
Obando, Bulacan.

On February 2, 2017, Obando Water Consortium Holdings Corp. (now Filipinas Water) was registered with the
SEC. Filipinas Water is the consortium between the Parent Company and MWPVI with an equity share of
49.00% and 51.00%, respectively. The primary purpose of Filipinas Water is to engage in the business of a
holding company without acting as stockbroker or dealer in securities.

On July 26, 2017, Filipinas Water signed and executed a JVA with OWD. The JVA governs the relationship of
Filipinas Water and OWD as joint venture partners in the Obando Water Concession Project (the “Obando
Concession Project”). On October 10, 2017, Obando Water was incorporated. Obando Water is 90.00% and
10.00% owned by Filipinas Water and OWD, respectively.

On October 12, 2017, Obando Water and OWD signed and executed a concession agreement. Under the
concession agreement, OWD grants Obando Water, (as contractor to perform certain functions and as agent for
the exercise of certain rights and powers under Presidential Decree No. 564), the sole right to manage, operate,
maintain, repair, refurbish, and expand the fixed and movable assets required to provide water and sanitation

*SGVFS187515*
 - 19 -

services in the entire Municipality of Obando for a period of twenty-five (25) years commencing on
January 1, 2018 (the commencement date) until December 31, 2042 (the expiration date) or the early termination
date, as the case may be. While Obando Water has the right to manage, operate, repair and refurbish specified
OWD facilities in the service area, legal title to these assets remains with OWD. The legal title to all fixed assets
contributed to the existing OWD system by Obando Water during the concession remains with Obando Water
until the expiration date (or the early termination date) at which time all rights, titles and interest in such assets
will automatically vest in OWD.

Obando Water’s initial water tariff, exclusive of value-added tax (VAT) and/or any applicable tax, to be charged to
the customers for the first three (3) years of the concession agreement shall be based on the 2005 Local Water
Utilities Administration (LWUA) approved tariff table of OWD. Starting March 2021, Obando Water’s tariff was
inclusive of VAT. Under the concession agreement, if one or more grounds for EPA has occurred or is expected
to occur, an appropriate price adjustment to be applied to the tariff or an appropriate adjustment to the service
obligations of the concessionaire will be determined by OWD.

The grounds for EPA means any of the following circumstances:

a. change in law or change in the interpretation of the terms of the concession agreement;
b. extraordinary cost incurred due to prolonged force majeure;
c. a material change has been made to the basis of calculation or definition of the CPI or replacement index
agreed;
d. change in assumptions at the time of the execution of the concession agreement; or
e. the concessionaire has incurred significant additional costs as a result of an event of force majeure which
are not covered by insurance.

On March 28, 2019, LWUA approved a new loan repayment scheme of thirteen (13) years with OWD. Upon
initial payment, which shall not be later than May 15, 2019, LWUA shall no longer impose penalties from OWD.

On December 28, 2021, Obando Water through OWD submitted the approved 10-year Service Delivery Plan
(SDP) to LWUA. On August 12, 2022, Obando Water and OWD conducted a Public Hearing and Project
Presentation for the proposed 10-year tariff adjustment.

On June 27, 2023, LWUA Board of Trustees (BOT) approved and confirmed the 20.00% Proposed Water Rates
increase per BOT Resolution No. 29 series of 2023 and was implemented in August 2023.

BMDC’s APA with Solar Resources, Inc. (Solar Resources)

On July 26, 2017, BMDC entered into an APA with Solar Resources to acquire and operate the latter’s assets
used in the water business operations in Solar Resources developments in the province of Bulacan.

On July 31, 2017, Solar Resources executed a Deed of Assignment in relation to the APA and a Deed of
Absolute Sale to sell and transfer its properties pertaining to water facilities and its operations in the Las Palmas
Subdivisions Phases 1 to 7 to BMDC.

BMDC’s APA with Borland Development Corporation (Borland)

On December 14, 2017, BMDC and Borland executed the APA, Deed of Assignment, and Deed of Absolute Sale
to sell, assign, transfer, and convey Borland’s assets pertaining to water facilities and its operation in San
Vicente Homes subdivision in Bulacan to BMDC.

Parent Company’s Notice of Award from Leyte Metropolitan Water District (LMWD)
On December 6, 2017, the Parent Company received the Notice of Award from LMWD for the implementation of
the joint venture project (the “Leyte Project”) for the design, construction, rehabilitation, maintenance, operation,
financing, expansion, and management of the water supply and sanitation facilities and services of LMWD in the
Province of Leyte.

The conditions precedent specified in the Notice of Award include the incorporation of a special purpose vehicle
(SPV) which will implement the Leyte Project under a contractual joint venture with LMWD.

Upon completion of the conditions precedent specified in the Notice of Award, the SPV and LMWD shall enter
into a JVA that will grant the SPV, as contractor, to perform certain functions and as agent for the exercise of, the
sole and exclusive right to manage, operate, maintain, repair, refurbish and improve, expand and as appropriate,
decommission, the facilities of LMWD in its Service Area, including the right to bill and collect tariff for the
provision of water supply and sanitation services in the Service Area of LMWD.

*SGVFS187515*
 - 20 -

LMWD’s service area covers the City of Tacloban and seven other municipalities namely Palo, Tanauan,
Dagami, Tolosa, Pastrana, TabonTabon, and Santa Fe.

In January 2018, an internal conflict arose between the Province-appointed BOD of LMWD and the
City-appointed BOD as to which is the legitimate BOD authorized to represent the LMWD. This issue caused
substantial delay in the implementation and recognition of the Notice of Award in favor of the Parent Company.

On February 20, 2019, the Parent Company wrote to the LMWD, now represented by the City-Appointed BOD,
and requested the LMWD to honor the Notice of Award.

On April 12, 2019, the LMWD advised that it had already rescinded/terminated the JVA negotiations with the
Parent Company.

On June 21, 2019, the Parent Company initiated available legal course of action to compel the LMWD to honor
the Notice of Award granted to the Parent Company.

As of December 31, 2023, the case remains pending with the Supreme Court.

MWPVI’s JVA with Tubig Pilipinas Group, Inc. (TPGI)

On December 11, 2017, the Municipality of Malasiqui granted a franchise to MWPVI and TPGI for the
implementation of a joint venture project to establish, construct, operate, manage, repair, and maintain water
supply and wastewater system and facilities in the municipality of Malasiqui, Pangasinan. The franchise has a
term of twenty-five (25) years from the commencement date.

On February 20, 2018, the BOD of MWPVI approved the creation of an SPV for this project.
On November 16, 2018, MWPVI signed and executed a JVA with TPGI. Under the agreement, MWPVI and
TPGI shall incorporate a joint venture company, with 50.00% and 50.00% ownership, respectively, which shall
implement the project. As of December 31, 2023, MWPVI and TPGI are still in the process of incorporating the
joint venture company.

EcoWater’s Lease Agreement with the Philippine Economic Zone Authority (PEZA)
On December 18, 2017, MWPVI entered into a Lease Agreement for the Operations and Management of the
Water and Used Water Facilities of PEZA in Cavite Economic Zone (CEZ), whereby MWPVI agrees to lease,
operate, and maintain the existing water and used water facilities in the CEZ for the provision of water and used
water services to the locators therein. The lease agreement has a term of twenty-five (25) years from signing of
the contract and became effective on its commencement date on February 1, 2018.

MWPVI shall apply its expertise in the industrial zones operations and shall provide capital expenditures for the
duration of the agreement. The Cavite Special Economic Zone is a 275-hectare industrial estate with 297
locators consuming approximately 350,000 cubic meters per month or 12 million liters per day.

On August 4, 2020, MWPVI’s BOD approved the assignment of the Lease Agreement for the Operations and
Management of the Water and Used Water Facilities of the PEZA in the CEZ from MWPVI to EcoWater.

Ilagan Water’s Bulk Water Sales and Purchase Agreement with City of Ilagan Water District (CIWD)
On January 26, 2018, the Parent Company and MWPVI (collectively the "Consortium") received the Notice of
Award from CIWD for the implementation of the joint venture project for the development, financing, operation
and management of a raw water source, provision of bulk water supply with system expansion, and the
development of septage management in Ilagan City, Isabela (the “Ilagan Project”).

On November 16, 2018, the Consortium (namely, Filipinas Water) signed and executed a JVA with the CIWD.
Under the JVA, Filipinas Water and CIWD shall incorporate a joint venture company, with 90.00% and 10.00%
ownership, respectively, which shall implement the Ilagan Project. Upon completion of conditions precedent set
out in the JVA, the joint venture company will consequently enter into a Bulk Water Sales and Purchase
Agreement and Septage Management Agreement with CIWD for the implementation of the Ilagan Project for
twenty-five (25) years from the commencement date.

On February 15, 2019, Ilagan Water was incorporated and registered with the Philippine SEC to implement the
Ilagan Project.

On March 18, 2019, Ilagan Water’s BOD approved the execution of a Bulk Water Sales and Purchase
Agreement (BWSPA) and Septage Management Agreement (SMA) with CIWD.

*SGVFS187515*
 - 21 -

On March 16, 2020, Ilagan Water signed and executed a BWSPA and SMA with the CIWD, for the supply of bulk
water and septage management to CIWD for a period of twenty-three (23) years and twenty-two (22) years from
the Operation Start Date, respectively.

On October 28, 2022, Ilagan Water received the Notice to Proceed for the Construction of Water Treatment Plant
(WTP) for the Bulk Water Supply Agreement (BWSPA) from the CIWD. As of December 31, 2023, construction
phase of the WTP 1 is on-going.

Bulakan Water’s Concession Agreement with the Bulacan Water District (BuWD)
On April 26, 2018, the Parent Company and MWPVI (collectively the "Consortium") received the Notice of Award
from the BuWD for the joint venture project for the development, financing, design, engineering, construction,
rehabilitation, upgrade, testing, commissioning, operation, management, and maintenance of water facilities and
the provision of water and sanitation services in the Municipality of Bulakan in Bulacan.

On August 16, 2018, Filipinas Water signed and executed a JVA with the BuWD for the implementation of the
project. Under the JVA, Filipinas Water and BuWD shall incorporate a joint venture company, with 90.00% and
10.00% ownership, respectively, which shall be granted a concession by BuWD. On October 16, 2018, the joint
venture company, Bulakan Water, was incorporated and was registered with the SEC.

On June 14, 2019, Bulakan Water and the BuWD signed and executed a concession agreement for the design,
construction, rehabilitation, operation, maintenance, financing, expansion, and management of water facilities
and the provision of water and sanitation services in the Municipality of Bulakan for a period of twenty-five (25)
years from the commencement date.

On December 18, 2020, Bulakan Water through BuWD submitted its 10-year Service Delivery Plan (SDP) to
LWUA. On April 29, 2021, a Public Hearing and Project Presentation was held to present to the public its
proposed water tariff adjustment. On November 11, 2022, the LWUA Board of Trustees has approved and
confirmed the proposed water rates per BOT Resolution No. 55, Series of 2022. The approved rate was 42.86%
effective December 2022 consumption which will be reflected in the January 2023 billing.

On July 28, 2021, Bulakan Water entered into a Memorandum of Agreement with the Municipality of Bulakan for
the provision of septage management program in the service area. On September 1, 2021, actual desludging
activity started together with the implementation of the 20% environmental fee in all customers’ bills.

On November 11, 2022, the LWUA Board of Trustees has approved and confirmed the proposed water rates per
BOT Resolution No. 55, Series of 2022. The approved rate was 42.86% effective December 2022 consumption
which was reflected in the January 2023 billing. On December 29, 2023, Bulakan Water through BuWD
submitted the documentary requirements for its second tranche tariff request.

North Luzon Water’s MOAs with the Municipalities of Sta. Barbara, San Fabian, and Manaoag in Pangasinan
On April 27, 2018, MWPVI was granted a franchise by the Municipality of Sta. Barbara, Pangasinan for the
provision of water supply and the improvement, operation, maintenance, management, financing, and expansion
of water supply facilities, and the provision of septage management in Sta. Barbara, Pangasinan. The franchise
has a term of twenty-five (25) years from the commencement date.

On June 11, 2018, MWPVI received a Notice to Proceed from the Municipality of Sta. Barbara for the
implementation of the project.

On August 13, 2018, MWPVI was granted a franchise by the Municipality of San Fabian, Pangasinan to
establish, construct, operate, manage, repair, and maintain a water supply system and facilities, and the
provision of septage management in the municipality of San Fabian, Pangasinan. The franchise has a term of
twenty-five (25) years from the commencement date.

On December 3, 2018, MWPVI was granted a franchise by the Municipality of Manaoag, Pangasinan to
establish, construct, operate, manage, repair, and maintain a water supply system and facilities, and the
provision of septage management in the municipality of Manaoag, Pangasinan. The franchise has a term of
twenty-five (25) years from the commencement date.

On January 25, 2019, MWPVI received a Notice to Proceed for the implementation of the project in the
Municipality of Manaoag, Pangasinan.

In February 2019, MWPVI signed a MOA each with the Municipalities of Sta. Barbara, San Fabian, and
Manaoag.

*SGVFS187515*
 - 22 -

On September 16, 2019, MWPVI incorporated North Luzon Water to operate the franchises granted in
Sta. Barbara, San Fabian, and Manaoag in Pangasinan.

On August 4, 2020, the MWPVI BOD approved the assignment of the franchises, rights and obligations granted
to MWPVI by the local government units of Sta. Barbara, San Fabian, and Manaoag in the province of
Pangasinan to North Luzon Water.

On November 12, 2023, projects from the municipality of Sta. Barbara particularly in Baranga Leet and Barangay
Balingueo have been energized with initial water service connections of 19 households.

Laguna Water’s JVA with Pagsanjan Water District (PAGWAD)

On July 12, 2018, Laguna Water received the Notice of Award from PAGWAD for the implementation of the
contractual joint venture project for the design, improvement, upgrade, rehabilitation, and expansion of water
supply and sanitation facilities including the financing and construction of such facilities and infrastructure in the
service area of PAGWAD, and the management, operation, and maintenance of such water supply and
sanitation facilities and the provision of the services necessary or incidental thereto in PAGWAD’s service area.

On January 21, 2019, Laguna Water signed and executed a contractual JVA with PAGWAD. Under the
agreement, Laguna Water shall serve as the contractor or agent of PAGWAD tasked with the operations,
management, and maintenance as well as the design, improvement, upgrade, rehabilitation, and expansion of
water supply and sanitation facilities within the service area of PAGWAD in Pagsanjan, Laguna. Upon
completion of conditions precedents in the JVA, Laguna Water and PAGWAD shall execute the project for a
period of sixteen (16) years until September 30, 2035. The agreement was executed on March 1, 2019.

Parent Company’s and MWPVI’s JVA with the Tanauan Water District (TnWD)
On October 12, 2018, the Parent Company and MWPVI (collectively, the “Consortium”) received the Notice of
Award from TnWD for the implementation of the joint venture project for the design, construction, rehabilitation,
maintenance, operation, financing, expansion, and management of the water supply and sanitation facilities and
services in the service area of TnWD in Tanauan City, Batangas.

On February 4, 2019, the Consortium signed and executed a JVA with the TnWD for the implementation of the
project. Upon completion of the conditions precedent set out in the JVA, the Consortium, through an SPV, and
the TnWD shall execute the Tanauan Project for a period of twenty-five (25) years from the commencement
date.

On May 20, 2019, South Luzon Water, the joint venture company, was incorporated to execute the Tanauan
Project.

On September 30, 2019, South Luzon Water’s BOD approved to accept the assignment by the Parent Company
and MWPVI of their respective rights and obligations under their JVA with the TnWD.

On January 21, 2020, South Luzon Water’s BOD approved and clarified that the assignment has a retroactive
application effective June 1, 2019, considering the actual commencement date of the takeover and operation of
the Tanuan Project.

Parent Company’s JVA with Lambunao Water District (LWD)

On July 3, 2019, the Parent Company and LWD entered into a JVA to implement the design, improvement,
upgrade, rehabilitation, and expansion of water supply including the financing and construction of such facilities
and infrastructure in the service area of LWD, and the management, operation and maintenance of such water
supply and the provision of the services necessary or incidental thereto in the service area.

On August 8, 2019, the Parent Company’s BOD ratified its Executive Committee’s approval of the designation to
Aqua Centro as the Project Company to implement and carry out the concession project awarded by LWD to the
Parent Company.

On September 1, 2019, Aqua Centro officially commenced operations on the joint venture activity. On the same
date, Aqua Centro’s BOD approved the Deed of Accession between the Parent Company and LWD.

On September 18, 2019, LWD gave its consent to, and confirmation of, the designation of Aqua Centro as the
project company for the implementation of the project pursuant to the JVA.

On December 11, 2019, LWD signed the Deed of Accession between the Parent Company and Aqua Centro.

*SGVFS187515*
 - 23 -

Aqua Centro’s and Laguna Water’s APAs with Extraordinary Development Corporate Group (EDCG)
On December 11, 2018, Aqua Centro entered into seven (7) APAs with EDCG’s subsidiaries to acquire the
subsidiaries’ assets related to the provision of water service in ten (10) subdivisions in Imus, General Trias, and
Naic in the province of Cavite. These subsidiaries are Earth Aspire Corporation, First Advance Development
Corporation, Ambition Land Inc., Prosperity Builders Resources Inc., Tahanang Yaman Homes Corporation,
Extraordinary Development Corp., and Earth + Style Corporation.

On December 11, 2018, Laguna Water entered into four (4) APAs with EDCG’s subsidiaries to acquire the
subsidiaries’ assets related to or used in its water service provision operations in Biñan, Laguna. The APAs are
with the following EDCG subsidiaries, namely, Earth Aspire Corporation, Earth Prosper Corporation, Earth and
Style Corporation and Extraordinary Development Corp.

As of December 31, 2023 and 2022, Aqua Centro has been operating in nine (9) out of the ten (10) subdivisions.
Aqua Centro shall operate the one (1) remaining subdivision once all the conditions precedent under the APAs
have been fulfilled.

Calbayog Water’s JVA with Calbayog City Water District (CCWD)

On December 27, 2018, the Parent Company received the Notice of Award from CCWD for the implementation
of the joint venture project for the design, construction, rehabilitation, maintenance, operation, financing,
expansion, and management of the water and wastewater systems of CCWD in the Calbayog City, as well as
other areas which may eventually form part of the service coverage of the CCWD in the Province of Samar.

Upon completion of the conditions precedent specified in the notice, the Parent Company shall enter into a JVA
with CCWD for the implementation of the joint venture project over a twenty-five (25) year contract period.

On April 17, 2019, Calbayog Water was incorporated to engage in the development, construction, improvement,
upgrade, rehabilitation, expansion, management, operation and maintenance of water supply and wastewater
facilities, and to provide services necessary or incidental thereto.

On June 10, 2019, the Executive Committee of the Parent Company approved the joint venture with the CCWD.
It also approved the assignment to Calbayog Water of the joint venture with CCWD.

On July 3, 2019, the Parent Company signed and executed a JVA with CCWD for the design, construction,
rehabilitation, maintenance, operation, financing, expansion, and management of the water and wastewater
system of CCWD in the City of Calbayog. Calbayog Water commenced operations on October 16, 2019.

Calbayog Water's water tariff was exclusive of VAT which was charged to the customers for the first three (3)
years of the concession agreement. This is based on the LWUA approved tariff of CCWD. Starting in the month
of May 2022, Calbayog Water's tariff will be inclusive of VAT.

Calbayog Water’s Stakeholder Management Agreement with CCWD and Subscription Agreement with TPGI
On July 15, 2020, Calbayog Water and TPGI entered into a Stakeholder Management Agreement, where TPGI
agrees to provide support to the Operations Management/Stakeholder Management of Calbayog Water. On the
same date, Calbayog Water and TPGI entered into a Subscription Agreement wherein TPGI agreed to subscribe
to Calbayog Water’s shares at a subscription price of P
= 1.00 per share for a total subscription of ₱49.17 million,
payable in tranches up to 2022.

Initial payment amounting to ₱2.24 million was received on December 28, 2020. The remaining balance of
₱46.93 million was supposedly due on December 31,2022 in accordance with subscription agreement but was
fully settled in May 11, 2023. As a result, TPGI paid penalties amounting to ₱1.40 million.

MWPVI’s Grant of Franchise from Sangguniang Panlungsod of Iloilo

On March 26, 2019, the Sangguniang Panlungsod of Iloilo City granted a non-exclusive franchise to the joint
venture between MWPVI and TPGI to construct, establish, commission, operate and maintain a water supply
system to service the population of Iloilo City.

The franchise granted to MWPVI shall be for a term of twenty-five (25) years, covering all the barangays under
the governance and jurisdiction of Iloilo City.

As of December 31, 2023, the franchise from the Sangguniang Panlungsod of Iloilo City is not yet operational.

*SGVFS187515*
 - 24 -

Aqua Centro’s and Laguna Water’s MOAs with Raemulan Lands, Inc. (RLI)
On July 10, 2019, Aqua Centro and Laguna Water entered into three (3) MOAs with Raemulan Lands, Inc. (RLI)
for the construction, operation, and management of water distribution facilities in Pasinaya North and Tradizo
Enclaves in Cavite and Jubilation Enclave in Laguna.

Aqua Centro and Laguna Water have started operations in 2019. On December 4, 2020, an Amendment to the
MOA with RLI for Pasinaya North was executed.

EcoWater’s Water Purchase Agreement (WPA) with ROHM Electronics Philippines, Inc. (REPI)
On September 9, 2019, EcoWater entered into a WPA with REPI. Pursuant to the WPA, EcoWater will design,
finance, construct, own, operate and maintain a water supply system to cater the water supply of REPI.

On September 16, 2020, the operation has started with a guaranteed volume of 90,000.00 cubic meters (mcm)
per month.

MWIS’ Healthy Family Business Division Closure

On August 26, 2020, MWIS announced the permanent closure of its Healthy Family business division effective
October 31, 2020 due to its recurring losses and inability to financially sustain business operations.

The Healthy Family brand was launched in 2015 and has since been known for providing exceptional quality and
affordable purified drinking water to its customers. While the Healthy Family business division made strong
efforts to improve operations and profitability, the ever-increasing competition in the bottled water industry and
the recent economic challenges proved too difficult to cope and keep the business afloat. MWIS, as an entity,
shall continue to exist and operate based on its primary purpose to engage in water and wastewater and
environmental services.

On October 13, 2020, MWIS signed an APA with Maris Pure Corporation for the sale of some of Healthy Family
assets, consisting of water bottling equipment, spare parts, and delivery equipment, for a consideration of
P
= 35.00 million.

The permanent closure of the MWIS Healthy Family division resulted to its classification as a discontinued
operation (see Note 3). The operating cash flows of MWIS-Healthy Family as of December 31, 2023, 2022 and
2021 are presented in Note 19.

MWPVI’s Deed of Accession for Used Water Only with Ayala Land Malls, Inc.
On May 31, 2021, MWPVI entered a Deed of Accession with Ayala Land Malls, Inc. namely, North Eastern
Commercial Corporation (Cloverleaf, The 30th), North Triangle Depot Commercial Corp (Trinoma), Ayala Land
Metro North Inc. (U.P Town Center), North Ventures Commercial Corporation (Fairview Terraces), Summerhill
Commercial Ventures Corp (Feliz), Arvo Commercial Corporation (Marikina, The District Dasmarinas, Legaspi),
ALI-CII Development Corp. (Metropoint), Bay City Commercial Ventures Corp. (Manila Bay), Alabang
Commercial Corporation (ATC), Lagoon Development Corporation (Pavilion), North Beacon Commercial
Corporation (Marquee), Cavite Commercial Towncenter Inc. (The District Imus, Serin), Cagayan de Oro Gateway
Corp (Centrio) and Capitol Central Commercial Ventures Corp. (Capitol Central), (collectively the “ALI Malls
Group”) whereby MWPVI shall provide used water services and operation and management of the Used Water
Facilities only.

Under the Deed of Accession, turnover of operations to MWPVI started in June 2021. As of December 31, 2023
and 2022, MWPVI is operating all of the covered locations in the contract.

Parent Company’s and MWPVI’s Notice of Award from the Provincial Government of Pangasinan (PGP)
On September 30, 2021, the Consortium of the Parent Company and MWPVI received a Notice of Award from
PGP for the implementation of a joint venture project for the provision of bulk water to the Province of
Pangasinan.

Upon completion of conditions precedent, both parties shall sign a concession agreement to implement the
project that has an estimated capital expenditure program of P
= 8.00 billion over the twenty five (25)-year contract
period.

On January 14, 2022, the Consortium of the Parent Company and MWPVI signed the Concession Agreement
with the PGP for the implementation of the joint venture project for the development, financing, construction,
operation and maintenance of a bulk water facility within the Province of Pangasinan. On the same day,
a groundbreaking activity was held in one of the proposed sites for a treatment plant.

*SGVFS187515*
 - 25 -

Significant Transactions – Foreign Subsidiaries

Parent Company’s Management, Operation, and Maintenance Contract (MOMC) with the National Water
Company (NWC), Kingdom of Saudi Arabia for the North West Cluster
On December 3, 2020, the Consortium of Saur SAS, Miahona Company, and the Parent Company signed a
MOMC with the NWC, Kingdom of Saudi Arabia for the latter’s North West Cluster. The MOMC comprised of the
management, operations, and maintenance of the water and wastewater facilities of the North West Cluster
(Madinah and Tabuk) over a seven (7)-year contract period, which will entail the implementation of enabling
projects and deployment of key personnel to manage the cluster and achieve the key performance indicators
target set by the NWC.

On March 25, 2021, the Consortium registered and incorporated International Water Partners Company (IWP), a
mixed capital limited liability company incorporated under the laws of the Kingdom of Saudi Arabia by Saur Saudi
Arabia Ltd., Miahona Company, and MWAP with equity shareholdings of 40.00%, 40.00% and 20.00%,
respectively. On April 1, 2021, IWP officially commenced the implementation of the MOMC.

The MOMC aims to improve water and wastewater services, operational performance and the level of operations
in the distribution sector of the Kingdom in general, and at the North Western Cluster in particular, as well as
training and developing of personnel to improve performance, sustainability and quality of service.

On June 15, 2021, MWAP subscribed to 100 shares of IWP representing 20.00% for SAR0.10 million
(P
= 1.28 million).

Parent Company’s MOMC with the NWC, Kingdom of Saudi Arabia for the Eastern Cluster
On October 8, 2021, the Consortium’s Project Company, IWP, was awarded the MOMC of the NWC, Kingdom of
Saudi Arabia for its Eastern Cluster. The MOMC will comprise the management, operations and maintenance of
the water and wastewater facilities of the Eastern Cluster (i.e., Dammam, Al Hofuf, Al Jubail, Al Khobar, Al Qatif
and Hafar Al Batin) over a seven (7)-year contract period, which will entail the implementation of enabling
projects and deployment of key personnel to manage the Eastern Cluster and achieve the Key Performance
Indicators target set by the NWC.

The award came after the commencement of the MOMC for the North West Cluster (i.e., Madinah and Tabuk),
which was also awarded to IWP.

On January 27, 2022, International Water Partners Company the Second (IWP2) was incorporated with MWAP,
Saur, and Miahona owning 30.00%, 35.00%, and 35.00%, respectively. On April 1, 2022, IWP2 officially
commenced the implementation of the MOMC. MWAP subscribed to 150 shares of IWP2 representing 30.00%
for SAR0.15 million (P
= 2.07 million).

MWTH Liquidation
MWTH, one of the intermediate holding companies of MWAP, has completed and finalized its Members’
Voluntary Liquidation in Singapore as part of the corporate restructuring initiative of the MWAP Group. On
March 18, 2022, the surplus funds and assets of MWTH including the shares in MWTC have been distributed to
MWAP as its sole shareholder. On July 18, 2022, MWTH was considered as officially dissolved in Singapore by
the Accounting and Corporate Regulatory Authority (ACRA).

Approval for the Issuance of the Consolidated Financial Statements

The BOD of the Parent Company approved and authorized the issuance of the consolidated financial statements
on February 29, 2024.

2. Summary of Significant Accounting Policies

Basis of Preparation
The consolidated financial statements of the Group have been prepared using the historical cost basis, except
for derivative financial instruments that have been measured at fair value. The Parent Company’s presentation
and functional currency is the Philippine Peso (P= , Peso, or PHP). Amounts are rounded off to the nearest Peso,
except when otherwise stated. The consolidated financial statements of the Group provide comparative
information in respect of the previous periods. The Group has prepared the financial statements on the basis that
it will continue to operate as a going concern.

*SGVFS187515*
 - 26 -

Statement of Compliance
The consolidated financial statements of the Group have been prepared in compliance with Philippine Financial
Reporting Standards (PFRS).

Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Group as of December 31, 2023
and 2022, and for each of the three (3) years in the period ended December 31, 2023.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if and only if the Group has:

a. power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
b. exposure, or rights, to variable returns from its involvement with the investee; and
c. the ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:

a. the contractual arrangement with the other vote holders of the investee;
b. rights arising from other contractual arrangements; and
c. the Group’s voting rights and potential voting rights.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of
the parent of the Group and to the noncontrolling interests, even if this results in the noncontrolling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated
in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:

a. derecognizes the assets (including goodwill) and liabilities of the subsidiary;

b. derecognizes the carrying amount of any noncontrolling interests;
c. derecognizes the cumulative translation differences recorded in equity;
d. recognizes the fair value of the consideration received;
e. recognizes the fair value of any investment retained;
f. recognizes any surplus or deficit in profit or loss; and
g. reclassifies the parent’s share of components previously recognized in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.

Changes in Accounting Policies and Disclosures

The accounting policies adopted in the preparation of consolidated financial statements are consistent with those
of the previous financial year, except for the adoption of new standards effective in 2023. The Group has not
early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

*SGVFS187515*
 - 27 -

Unless otherwise stated, the new standards and amendments did not have any material impact to the Group.

a. Amendments to PAS 1 and PFRS Practice Statement 2, Disclosure of Accounting Policies

The amendments provide guidance and examples to help entities apply materiality judgements to
accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures
that are more useful by:

 Replacing the requirement for entities to disclose their 'significant' accounting policies with a
requirement to disclose their 'material' accounting policies, and
 Adding guidance on how entities apply the concept of materiality in making decisions about accounting
policy disclosures.

The amendments to the Practice Statement provide non-mandatory guidance.

b. Amendments to PAS 8, Definition of Accounting Estimates

The amendments introduce a new definition of accounting estimates and clarify the distinction between
changes in accounting estimates and changes in accounting policies and the correction of errors.
Also, the amendments clarify that the effects on an accounting estimate of a change in an input or a change
in a measurement technique are changes in accounting estimates if they do not result from the correction of
prior period errors.

c. Amendments to PAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction

The amendments narrow the scope of the initial recognition exception under PAS 12, so that it no longer
applies to transactions that give rise to equal taxable and deductible temporary differences.

The amendments also clarify that where payments that settle a liability are deductible for tax purposes, it is a
matter of judgement (having considered the applicable tax law) whether such deductions are attributable for
tax purposes to the liability recognized in the financial statements (and interest expense) or to the related
asset component (and interest expense).

d. Amendments to PAS 12, International Tax Reform – Pillar Two Model Rules

The amendments introduce a mandatory exception in PAS 12 from recognizing and disclosing deferred tax
assets and liabilities related to Pillar Two income taxes.

The amendments also clarify that PAS 12 applies to income taxes arising from tax law enacted or
substantively enacted to implement the Pillar Two Model Rules published by the Organization for Economic
Cooperation and Development (OECD), including tax law that implements qualified domestic minimum top-
up taxes. Such tax legislation, and the income taxes arising from it, are referred to as ‘Pillar Two legislation’
and ‘Pillar Two income taxes’, respectively.

The temporary exception from recognition and disclosure of information about deferred taxes and the
requirement to disclose the application of the exception, apply immediately and retrospectively upon
adoption of the amendments in June 2023.

Meanwhile, the disclosure of the current tax expense related to Pillar Two income taxes and the disclosures
in relation to periods before the legislation is effective are required for annual reporting periods beginning on
or after 1 January 2023.

The Group adopted and applied the exceptions introduced by PAS 12. Current income tax expense related
to Pillar Two income taxes amounted to nil in 2023.

Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions where the Group
operates. As at February 29, 2024, the Group is in the process of gathering information and assessing the
potential exposure arising from the Pillar Two legislation.

*SGVFS187515*
 - 28 -

Future Changes in Accounting Policies

Pronouncements issued but not yet effective are listed below. The Group intends to adopt the following
pronouncements when they become effective.

Unless otherwise indicated, the Group does not expect that the future adoption of these pronouncements will
have a significant impact on its consolidated financial statements.

Effective beginning on or after January 1, 2024 -

a. Amendments to PAS 1, Classification of Liabilities as Current or Non-current

The amendments clarify:

o That only covenants with which an entity must comply on or before reporting date will affect a liability’s
classification as current or non-current.
o That classification is unaffected by the likelihood that an entity will exercise its deferral right.
o That only if an embedded derivative in a convertible liability is itself an equity instrument would the
terms of a liability not impact its classification.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and must
be applied retrospectively. The Group is currently assessing the impact the amendments will have on current
practice and whether existing loan agreements may require renegotiation.

b. Amendments to PFRS 16, Leases Liability in a Sale and Leaseback

The amendments specify how a seller-lessee measures the lease liability arising in a sale and leaseback
transaction in a way that it does not recognize any amount of the gain or loss that relates to the right of use
retained.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and must
be applied retrospectively. Earlier adoption is permitted and that fact must be disclosed.

Effective beginning on or after January 1, 2025 -

a. PFRS 17, Insurance Contracts

PFRS 17 is a comprehensive new accounting standard for insurance contracts covering recognition and
measurement, presentation and disclosure. Once effective, PFRS 17 will replace PFRS 4, Insurance
Contracts. This new standard on insurance contracts applies to all types of insurance contracts (i.e., life,
non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to
certain guarantees and financial instruments with discretionary participation features. A few scope
exceptions will apply.

The overall objective of PFRS 17 is to provide an accounting model for insurance contracts that is more
useful and consistent for insurers. In contrast to the requirements in PFRS 4, which are largely based on
grandfathering previous local accounting policies, PFRS 17 provides a comprehensive model for insurance
contracts, covering all relevant accounting aspects. The core of PFRS 17 is the general model,
supplemented by:

 a specific adaptation for contracts with direct participation features (the variable fee approach); and
 a simplified approach (the premium allocation approach) mainly for short-duration contracts.

On December 15, 2021, the Financial Reporting Standards Council (FRSC) amended the mandatory
effective date of PFRS 17 from January 1, 2023 to January 1, 2025. This is consistent with Circular Letter
No. 2020-62 issued by the Insurance Commission which deferred the implementation of PFRS 17 by two (2)
years after its effective date as decided by the IASB.

PFRS 17 is effective for reporting periods beginning on or after January 1, 2025, with comparative figures
required. Early application is permitted.

*SGVFS187515*
 - 29 -

b. Amendments to PAS 21, Lack of exchangeability

The amendments specify how an entity should assess whether a currency is exchangeable and how it
should determine a spot exchange rate when exchangeability is lacking.

The amendments are effective for annual reporting periods beginning on or after January 1, 2025. Earlier
adoption is permitted and that fact must be disclosed. When applying the amendments, an entity cannot
restate comparative information.

Interpretation with Deferred Effective Date -

a. Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Investments in Associates and
Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of control of a
subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that a full gain
or loss is recognized when a transfer to an associate or joint venture involves a business as defined in
PFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not constitute a
business, however, is recognized only to the extent of unrelated investors’ interests in the associate or joint
venture.

On January 13, 2016, the Financial Reporting Standards Council postponed the original effective date of
January 1, 2016 of the said amendments until the International Accounting Standards Board has completed
its broader review of the research project on equity accounting that may result in the simplification of
accounting for such transactions and of other aspects of accounting for associates and joint ventures.

Significant Accounting Policies

Current versus Noncurrent Classification

The Group presents assets and liabilities in the consolidated statement of financial position based on a current
and noncurrent classification. An asset is current when it is:

a. expected to be realized or intended to be sold or consumed in normal operating cycle;

b. held primarily for the purpose of trading;
c. expected to be realized within twelve (12) months after the reporting period; or
d. cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
(12) months after the reporting period.

All other assets are classified as noncurrent.

A liability is current when:

a. it is expected to be settled in normal operating cycle;

b. it is held primarily for the purpose of trading;
c. it is due to be settled within twelve (12) months after the reporting period, or
d. there is no unconditional right to defer the settlement of the liability for at least twelve (12) months after the
reporting period.

The Group classifies all other liabilities as noncurrent.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities, respectively.

Fair Value Measurement

The Group measures financial instruments such as derivatives at fair value at each reporting date. Fair value is
the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:

a. in the principal market for the asset or liability; or

b. in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

*SGVFS187515*
 - 30 -

The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which value, maximizing
the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant
to the fair value as a whole:

a. Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
b. Level 2: valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
c. Level 3: valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.

For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, the
Group determines whether transfers have occurred between Levels in the hierarchy by reassessing
categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.

The Group’s management determines the policies and procedures for both recurring and nonrecurring fair value
measurement.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.

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 from the date of
acquisition and that are subject to an insignificant risk of change in value.

Short-term Investments
These are short-term, highly liquid investments that are readily convertible to known amounts of cash with
original maturities of more than three months from the date of acquisition and that are subject to an insignificant
risk of change in value.

Recognition and Measurement of Financial Instruments

Financial assets
a. Initial recognition and measurement
Financial assets are classified, at initial recognition, as either subsequently measured at amortized cost, at
FVOCI, or at fair value through profit or loss (FVTPL).

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them. With the exception of trade
receivables that do not contain a significant financing component or for which the Group has applied the
practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a
financial asset not at FVTPL, transaction costs. Trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient are measured at the transaction price
determined under PFRS 15, Revenue from Contracts with Customers.

In order for a financial asset to be classified and measured at amortized cost or at FVOCI, it needs to give
rise to cash flows that are “solely payments of principal and interest” on the principal amount outstanding.
This assessment is referred to as the “solely payments of principal and interest test” and is performed at an
instrument level.

*SGVFS187515*
 - 31 -

The Group’s business model for managing financial assets refers to how it manages its financial assets in
order to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the
date that the Group commits to purchase or sell the asset.

As of December 31, 2023 and 2022, the Group’s financial assets comprise of financial assets at amortized
cost.

b. Subsequent measurement – Financial assets at amortized cost

Financial assets are measured at amortized cost if both of the following conditions are met:

 the asset is held within the Group’s business model whose objective is to hold assets in order to collect
contractual cash flows; and
 the contractual terms of the instrument give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost are subsequently measured using the effective interest method and are
subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized,
modified or impaired.

The Group classified cash in banks and cash equivalents, short-term investments, receivables, and contract
assets as financial assets at amortized cost (see Notes 5 and 6).

c. Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of financial assets) is
derecognized when:

 the right to receive cash flows from the asset has expired; or
 the Group has transferred its right to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and either (i) the Group has transferred substantially all the risks and rewards of the
asset, or (ii) the Group has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the
extent of its continuing involvement. In that case, the Group also recognizes an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations
that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the maximum amount of consideration that the Group
could be required to repay.

Modification of financial assets

The Group derecognizes a financial asset when the terms and conditions have been renegotiated to the
extent that, substantially, it becomes a new asset, with the difference between its carrying amount and the
fair value of the new asset recognized as a derecognition gain or loss in profit or loss, to the extent that an
impairment loss has not already been recorded.

The Group considers both qualitative and quantitative factors in assessing whether a modification of
financial asset is substantial or not. When assessing whether a modification is substantial, the Group
considers the following factors, among others:

 Change in currency
 Introduction of an equity feature
 Change in counterparty
 If the modification results in the asset no longer considered “solely payment for principal and interest”

*SGVFS187515*
 - 32 -

The Group also performs a quantitative assessment similar to that being performed for modification of
financial liabilities. In performing the quantitative assessment, the Group considers the new terms of a
financial asset to be substantially different if the present value of the cash flows under the new terms,
including any fees paid net of any fees received and discounted using the original effective interest rate,
is at least 10% different from the present value of the remaining cash flows of the original financial asset.

When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the
renegotiation or modification does not result in the derecognition of that financial asset, the Group
recalculates the gross carrying amount of the financial asset as the present value of the renegotiated or
modified contractual cash flows discounted at the original effective interest rate (EIR) (or credit-adjusted EIR
for purchased or originated credit-impaired financial assets) and recognizes a modification gain or loss in
profit or loss.

When the modification of a financial asset results in the derecognition of the existing financial asset and the
subsequent recognition of a new financial asset, the modified asset is considered a 'new ' financial asset.
Accordingly, the date of the modification shall be treated as the date of initial recognition of that financial
asset when applying the impairment requirements to the modified financial asset. The newly recognized
financial asset is classified as Stage 1 for ECL measurement purposes, unless the new financial asset is
deemed to be originated as credit impaired (POCI).

d. Impairment
The Group recognizes an allowance for expected credit losses (ECL) for all debt instruments not held at
FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that
are possible within the next twelve months (a 12-month ECL). For those credit exposures for which there
has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime
ECL).

For receivables and contract assets, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based
on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.

The Group considers a financial asset in default when contractual payments are ninety (90) up to one
hundred eighty (180) days past their due dates. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information indicates that the Group is unlikely to
receive the outstanding contractual amounts in full before taking into account any credit enhancements held
by the Group. A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.

Financial liabilities

a. Initial recognition and measurement

Financial liabilities are classified, at initial recognition, either as financial liabilities at FVTPL, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

As of December 31, 2023 and 2022, the Group’s financial liabilities comprise of financial liabilities at
amortized cost.

*SGVFS187515*
 - 33 -

b. Subsequent measurement
After initial recognition, long-term debt and service concession obligations are subsequently measured at
amortized cost using the EIR method.

Gains and losses are recognized under the “Other income (expense)” account in consolidated profit or loss
when the liabilities are derecognized or impaired, and through the “Interest expense” account when the
gains and losses are amortized. Amortized cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR.

This accounting policy applies to the Group’s accounts and other payables, short-term debt, lease liabilities,
long-term debt, service concession obligations, and customer guaranty deposits and other deposits.

c. Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or canceled or has
expired. When 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 the Group’s profit or loss.

Exchange or modification of financial liabilities

The Group considers both qualitative and quantitative factors in assessing whether a modification of
financial liabilities is substantial or not. The terms are considered substantially different if the present value
of the cash flows under the new terms, including any fees paid net of any fees received and discounted
using the original EIR, is at least 10% different from the present value of the remaining cash flows of the
original financial liability. However, under certain circumstances, modification or exchange of a financial
liability may still be considered substantial, even where the present value of the cash flows under the new
terms is less than 10% different from the present value of the remaining cash flows of the original financial
liability. There may be situations where the modification of the financial liability is so fundamental that
immediate derecognition of the original financial liability is appropriate (e.g., restructuring a financial liability
to include an embedded equity component).

When 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. The difference
between the carrying value of the original financial liability and the fair value of the new liability is recognized
in profit or loss.

When the exchange or modification of the existing financial liability is not considered as substantial, the
Group recalculates the gross carrying amount of the financial liability as the present value of the
renegotiated or modified contractual cash flows discounted at the original EIR and recognizes a modification
gain or loss in profit or loss.

If modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as
part of the gain or loss on the extinguishment. If the modification is not accounted for as an extinguishment,
any costs or fees incurred adjust the carrying amount of the financial instrument and are amortized over the
remaining term of the modified financial instrument.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statements of
financial position, if and only if, there is a currently enforceable legal right to offset the recognized amounts and
there is an intention to settle on a net basis, to realize the asset and settle the liability simultaneously. The Group
assesses that it has a currently enforceable right of offset if the right is not contingent on a future event and is
legally enforceable in the normal course of business, event of default, and event of insolvency or bankruptcy of
the Group and all of the counterparties.

Derivative Financial Instruments and Hedge Accounting

a. Initial recognition and measurement
The Group uses derivative financial instruments, such as principal only swaps and currency option
transactions, to hedge its foreign currency risks. Such derivative financial instruments are initially
recognized at fair value on the date on which a derivative contract is entered into and are subsequently
remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

*SGVFS187515*
 - 34 -

For the purpose of hedge accounting, hedges are classified as:

 Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or
liability or an unrecognized firm commitment
 Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a
particular risk associated with a recognized asset or liability or a highly probable forecast transaction or
the foreign currency risk in an unrecognized firm commitment
 Hedges of a net investment in a foreign operation

At the inception of a hedge relationship, the Group formally designates and documents the hedge
relationship to which it wishes to apply hedge accounting and the risk management objective and strategy
for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk
being hedged and how the Group will assess whether the hedging relationship meets the hedge
effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge
ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following
effectiveness requirements:

 There is ‘an economic relationship’ between the hedged item and the hedging instrument.
 The effect of credit risk does not ‘dominate the value changes’ that result from that economic
relationship.
 The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that the Group actually hedges and the quantity of the hedging instrument that the Group actually
uses to hedge that quantity of hedged item.

Hedges that meet all the qualifying criteria for hedge accounting are accounted for and further described in
the below sections.

b. Fair value hedges

The change in the fair value of the hedging instrument and hedged item attributable to the risk hedged is
recorded as part of the carrying value of the hedged item and is also recognized in profit or loss.

For fair value hedges relating to items carried at amortized cost, any adjustment to carrying value is
amortized through profit or loss over the remaining term of the hedge using the EIR method. The EIR
amortization may begin as soon as an adjustment exists and no later than when the hedged item ceases to
be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is
derecognized, the unamortized fair value is recognized immediately in profit or loss.

The Group does not have any derivatives classified as fair value hedges.

c. Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized in OCI as part of hedging
reserve, while any ineffective portion is recognized immediately in profit or loss. The hedging reserve is
adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in
fair value of the hedged item.

The Group uses principal only swaps and currency option transactions as hedges of its exposure to foreign
currency risk arising from long-term debts. The ineffective portion of both the principal only swaps and
currency option transactions is recognized under “interest expense.”

For the Group’s cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a
reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or
loss.

The Group’s cash flow hedges include the costs of hedging for its principal only swaps and currency option
transactions.

d. Hedges of a net investment

Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted
for as part of the net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on
the hedging instrument relating to the effective portion of the hedge are recognized as OCI under
“cumulative translation adjustments" while any gains or losses relating to the ineffective portion are

*SGVFS187515*
 - 35 -

recognized in profit or loss. On disposal of the foreign operation, the cumulative value of any such gains or
losses recorded in equity is transferred to profit or loss.

The Group uses a loan as a hedge of its exposure to foreign exchange risk on its investment in a foreign
subsidiary.

Inventories
Inventories are valued at the lower of cost or net realizable value (NRV). NRV is the estimated selling price less
estimated costs to complete and to sell. The cost is determined using the moving average method for all
inventories, except for raw materials and finished goods.

Prepaid Expenses
Prepaid expenses are carried at cost less the amortized portion. These typically include prepayments for
regulatory costs, business taxes, insurance and employee health care expenses, and other benefits.

Property, Plant and Equipment

Property, plant and equipment, except land, are stated at cost less accumulated depreciation and amortization
and any impairment in value. Land is stated at cost less any impairment in value.

The initial cost of property, plant and equipment comprises its purchase price, including import duties, taxes and
any directly attributable costs of bringing the property, plant and equipment to its working condition and location
for its intended use, including capitalized borrowing costs incurred during the construction period. Expenditures
incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance,
are normally charged to operations in the period in which the costs are incurred. In situations where it can be
clearly demonstrated that the expenditures have resulted in an increase in the future economic benefits expected
to be obtained from the use of an item of property, plant and equipment beyond its originally assessed standard
of performance, the expenditures are capitalized as additional cost of the related property, plant and equipment.

Depreciation and amortization of property, plant and equipment commences once the property, plant and
equipment are available for use and are calculated on a straight-line basis over the estimated useful lives (EUL)
of the property, plant and equipment as follows:

Asset Type EUL

Plant and technical equipment 5 years or the term of the related management contract,
whichever is shorter
Office furniture and equipment 3 to 5 years
Transportation equipment 5 years
Leasehold improvements 5 years or lease term, whichever is shorter

The EUL and depreciation and amortization method are reviewed periodically to ensure that the period and
method of depreciation and amortization are consistent with the expected pattern of economic benefits from
items of property, plant and equipment.

Construction in progress represents property, plant and equipment under construction and is stated at cost
including costs of construction and other direct costs. Construction in progress is not depreciated until such time
that the relevant assets are in the location and condition necessary for it to be capable of operating in the
manner intended by management.

When property, plant and equipment is retired or otherwise disposed of, the cost and the related accumulated
depreciation and amortization and accumulated impairment, if any, are removed from the accounts and any
resulting gain or loss is credited to or charged against current operations. Fully-depreciated and amortized
assets are retained as property, plant and equipment until these are no longer in use.

The carrying value of property, plant and equipment is reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be recoverable.

Software
Software acquired separately are measured on initial recognition at cost including any directly attributable costs
with the development of the software that are expected to generate future expected benefits. All other costs of
developing and maintaining software are recognized in profit or loss as incurred.

Following initial recognition, software are carried at cost less any accumulated amortization and accumulated
impairment losses. Software are assessed to have finite useful lives of three (3) to five (5) years.

*SGVFS187515*
 - 36 -

The useful life and amortization method for software are reviewed at least at each reporting date. A change in
the expected useful life or the expected pattern of consumption of future economic benefits embodied in the
software is accounted for by changing the useful life and amortization method, as appropriate, and treated as a
change in accounting estimates.

Service Concession Assets and Obligations

The Group accounts for its concession agreements with MWSS, CWD, TIEZA, CDC, OWD, BuWD and PGL;
JVAs with CCWD, TnWD, PAGWAD, and LWD; SMA with CIWD; Wawa Bulk Water Agreement and MOAs with
the Municipalities of Sta. Barbara, San Fabian, and Manaoag under the Intangible Asset model as it receives the
right (license) to charge users of public service. Except for Wawa Bulk Water Agreement, under the Group’s
concession arrangements, the Group is granted the sole and exclusive right and discretion during the concession
period to manage, occupy, operate, repair, maintain, decommission and refurbish the identified facilities required
to provide water services. The legal title to these assets shall transfer to MWSS, CWD, TIEZA, CDC, OWD,
BuWD, PGL, CCWD, TnWD, PAGWAD, LWD, and CIWD (under the SMA) at the end of the concession period.
Meanwhile, the legal title to the assets covered by the MOAs with the Municipalities of Sta. Barbara, San Fabian,
and Manaoag shall remain with North Luzon Water. For Wawa Bulk Water Agreement, the sole and exclusive
right and discretion during the concession period to manage, occupy, operate, repair, maintain, decommission
and refurbish the identified facilities is granted to the joint venture partner.

On the other hand, the bulk water sale and purchase agreements with CIWD, TWD, and MCWD are accounted
for under the Financial Asset model as it has an unconditional contractual right to receive cash or other financial
asset for its construction services from or at the direction of the grantor. Under the service concession
arrangements, Cebu Water, Tagum Water, and Ilagan Water are awarded the right to deliver bulk water supply
to the grantor for a specific period of time under the concession period.

During the construction phase of the arrangements, the Group’s contract asset (representing its accumulating
right to be paid for rehabilitation works) is presented as part of “Service concession assets” (SCA) for Intangible
Asset model and under “Contract Assets” for Financial Asset model. The SCA also include the present value of
the service concession obligations assumed by the Parent Company at drawdown date and other local
component costs and cost overruns paid by the Group, as well as additional costs of rehabilitation works
incurred.

Amortization of SCA commences when the SCA are available for use and are calculated on a straight-line basis
over the remaining concession period. Beginning May 1, 2017, the Parent Company, Boracay Water, Clark
Water, and Laguna Water’s water and used water assets are amortized using the units-of-production (UOP)
method over the estimated total billable volume for the remaining period of the respective concession
agreements to better reflect the usage of these assets, which is directly related to its estimated total billable
volume and is aligned with industry practice.

Starting January 1, 2022, the Parent Company’s water and used water assets are amortized using the UOP over
the estimated total billable volume until 2047, following the approval of the Parent Company’s legislative water
franchise and business development plan (see Note 1).

Starting April 1, 2022, the water and used water assets (excluding water meters) of MWPVI, Aqua Centro,
EcoWater and BMDC are depreciated using the UOP method over the expected total production volume for the
remaining useful life of the assets. Prior to this, straight-line depreciation method over the useful life was applied.

The change in estimates was accounted for prospectively from the date of change.

Investments in Associates
An associate is an entity in which the Group has significant influence and which is neither a subsidiary.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but
is not control or joint control over these policies.

The considerations made in determining significant influence is similar to those necessary to determine control
over subsidiaries.

The Group’s investments in its associates are accounted for using the equity method.

Under the equity method, an investment in an associate is initially recognized at cost. The carrying amount of
the investment is adjusted to recognize changes in the Group’s share of net assets of the associate since the
acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is
not tested for impairment separately.

*SGVFS187515*
 - 37 -

The consolidated profit or loss reflects the Group’s share of the results of operations of the associate.

Any change in the other comprehensive income of those investees is presented as part of the Group’s other
comprehensive income. In addition, when there has been a change recognized directly in the equity of the
associate, the Group recognizes its share of any changes, when applicable, in the consolidated statement of
changes in equity. Unrealized gains and losses resulting from transactions between the Group and the
associate are eliminated to the extent of the interest in the associate.

The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the consolidated
profit or loss outside of operating profit and represents profit or loss after tax and noncontrolling interests in the
subsidiaries of the associate. If the Group’s share of losses of an associate equals or exceeds its interest in the
associate, the Group discontinues recognizing its share of further losses.

The financial statements of the associate are prepared for the same reporting period as the Group. When
necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognize an impairment
loss on its investment in its associate. At each reporting date, the Group determines whether there is objective
evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the
amount of impairment as the difference between the recoverable amount of the associate and its carrying value
and then recognizes the loss as “Equity in net earnings (losses) of associates” in the consolidated profit or loss.

Upon loss of significant influence over the associate, the Group measures and recognizes any retained
investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant
influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.

Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured at acquisition date fair value, and the amount of any
noncontrolling interest in the acquiree. For each business combination, the Group elects whether to measure the
noncontrolling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s
identifiable net assets. Acquisition-related costs are expensed as incurred.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by
the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss included
under “Remeasurement gain (loss) arising from business combination.”

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition
date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is
accounted for within equity. Contingent consideration classified as an asset or liability that is a financial
instrument and within the scope of PFRS 9, is measured at fair value with the changes in fair value
recognized in the profit or loss in accordance with PFRS 9. Other contingent consideration that is not within the
scope of PFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit
or loss.

If the initial accounting for a business combination can be determined only provisionally by the end of the period
in which the combination is effected because either the fair values to be assigned to the acquiree’s identifiable
assets, liabilities or contingent liabilities or the cost of the combination can be determined only provisionally, the
acquirer shall account for the combination using those provisional values. The acquirer shall recognize any
adjustments to those provisional values as a result of completing the initial accounting within twelve (12) months
of the acquisition date as follows: (i) the carrying amount of the identifiable asset, liability or contingent liability
that is recognized or adjusted as a result of completing the initial accounting shall be calculated as if its fair value
at the acquisition date had been recognized from that date; (ii) goodwill or any gain recognized shall be adjusted
by an amount equal to the adjustment to the fair value at the acquisition date of the identifiable asset, liability or
contingent liability being recognized or adjusted; and (iii) comparative information presented for the periods
before the initial accounting for the combination is complete shall be presented as if the initial accounting has
been completed from the acquisition date.

*SGVFS187515*
 - 38 -

Goodwill is initially measured at cost where cost is the excess of the aggregate of the consideration transferred
and the amount recognized for noncontrolling interest over the net identifiable assets acquired and liabilities
assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the
Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed
and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the
reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration
transferred, then the gain is recognized in profit or loss and included under “Other income (losses) - net.”

Following initial recognition, goodwill is measured at cost less any accumulated impairment loss. Goodwill is
reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. For purposes of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of the Group’s cash-generating units (CGUs), or
groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other
assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to
which the goodwill is allocated should:

 represent the lowest level within the Group at which the goodwill is monitored for internal management
purposes; and
 not be larger than an operating segment determined in accordance with PFRS 8, Operating Segments.

Occasionally, an acquirer will make a bargain purchase, which is a business combination in which the net of the
acquisition-date amounts of the identifiable assets acquired and the liabilities assumed measured exceeds the
aggregate of the consideration transferred.

Before recognizing a gain on a bargain purchase, the acquirer shall reassess whether it has correctly identified
all of the assets acquired and all of the liabilities assumed and shall recognize any additional assets or liabilities
that are identified in that review. The acquirer shall then review the procedures used to measure the amounts to
be recognized at the acquisition date for all of the following:

a. the identifiable assets acquired and liabilities assumed;

b. the noncontrolling interest in the acquiree, if any;
c. for a business combination achieved in stages, the acquirer's previously held equity interest in the acquiree;
and
d. the consideration transferred.

If that excess remains after applying the requirements above, the acquirer shall recognize the resulting gain in
profit or loss on the acquisition date. The gain shall be attributed to the acquirer.

Where goodwill forms part of a CGU (or group of CGUs) and part of the operation within that unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in these circumstances is
measured based on the relative values of the operation disposed of and the portion of the CGU retained.

Water Rights
Water rights are accounted for as an intangible asset with indefinite useful life. These pertain to the permit
acquired separately, and are recognized as an intangible asset as these were issued by the NWRB without an
explicit provision on the period of effectivity. Costs incurred for the acquisition of water rights are capitalized and
measured on initial recognition at cost.

Presidential Decree No. 1067, also known as the Water Code, states that water permits shall continue to be valid
as long as water is beneficially used. The rights may be suspended or revoked based on certain grounds such
as non-compliance with approved plans and specifications or schedules of water distribution, and use of water
for a purpose other than that for which it was granted.

All water permits are subject to modification or cancellation by the NWRB, after due notice and hearing, in favor
of a project of greater beneficial use or for multi-purpose development, and a water permittee who suffers
thereby shall be duly compensated by the entity or person in whose favor the cancellation was made.

Impairment of Nonfinancial Assets

This accounting policy applies primarily to the Group’s property, plant, and equipment, software, SCA, contract
assets representing SCA under construction, right-of-use assets, investments in associates, goodwill, and water
rights. The Group assesses, at each reporting date, these nonfinancial assets, excluding goodwill and water
rights, whether there is an indication that an asset may be impaired. If any such indication exists, or when

*SGVFS187515*
 - 39 -

annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable
amount.

Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be
impaired.

Water rights with indefinite useful life are tested for impairment annually either individually or at the CGU level.
Such intangibles are not amortized. The life of an intangible asset with an indefinite life is reviewed annually to
determine whether the indefinite life continues to be supportable. If not, the change in the life from indefinite to
finite is made on a prospective basis.

An asset’s recoverable amount is calculated as the higher of the asset’s or CGU’s fair value less cost of disposal
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. When the carrying amount of an
asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax
discount rate that reflects current market assessment of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples or other fair value indicators. Impairment losses of continuing operations are recognized in
profit or loss in those expense categories consistent with the function of the impaired asset.

A previously recognized impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation and amortization, had no impairment loss
been recognized for the asset in prior years. Such reversal is recognized in profit or loss unless the asset is
carried at revalued amount, in which case the reversal is treated as revaluation increase. After such a reversal,
the depreciation and amortization charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life.

Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. To assess whether a
contract conveys the right to control the use of an identified assets for a period of time, the Group assesses
whether, throughout the period of use, it has both of the following:

i. the right to obtain substantially all of the economic benefits from the use of the identified assets; and
ii. the right to direct the use of the identified asset.

If the Group has the right to control the use of an identified asset for only a portion of the term of the contract, the
contract contains a lease for that portion of the term.

The Group as a Lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use
assets representing the right to use the underlying assets.

a. Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, lease
payments made at or before the commencement date less any lease incentives received and estimate of
costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on
which it is located or restoring the underlying asset to the condition required by the terms and conditions of
the lease, unless those costs are incurred to produce inventories. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease term and the estimated useful lives of the underlying assets.
The right-of-use assets are also subject to impairment.

*SGVFS187515*
 - 40 -

b. Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising
the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized
as expenses (unless they are incurred to produce inventories) in the period in which the event or condition
that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After
the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change
in the assessment of an option to purchase the underlying asset.

c. Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of office spaces
(i.e., those leases that have a lease term of 12 months or less from the commencement date and do not
contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of
office equipment that are considered to be low value. Lease payments on short-term leases and leases of
low value assets are recognized as expense on a straight-line basis over the lease term.

Revenue Recognition
Revenue from contracts with customers is recognized when control of the goods or services are transferred to
the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange
for those goods or services. The Group has generally concluded that it is the principal in its revenue
arrangements. The following specific recognition criteria must also be met before revenue is recognized.

Revenue recognized over time using the output method

The Group recognizes revenue from water and sewerage services, environmental charge, operation and
maintenance services and performance fees over time using output method. As a practical expedient allowed
under PFRS 15, the Group recognizes revenue in the amount to which the Group has a right to invoice since the
Group bills a fixed amount for every cubic meter of water delivered or NRW recovered.

 Water and used water revenue

Water and used water revenue are recognized over time as the customer receives and consumes the
benefit from the performance of the related water and sewerage services. Water and used water are billed
every month according to the bill cycles of the customers. As a result of bill cycle cut-off, monthly service
revenue earned but not yet billed at end of the month are estimated and accrued. These estimates are
based on historical consumption of the customers. Also, twenty five percent (25%) of water revenue is
recognized by the Parent Company as environmental charge.

 Operation and maintenance services

Revenue from operation and maintenance services is recognized over time as the operation, maintenance
and management services are rendered for water and wastewater facilities of Bonifacio Water Corporation
(BWC).

 Performance fees
Performance fees are recognized as revenue over time as the NRW are recovered as agreed in the
NRWRSA with ZCWD.

The Group has determined that the output method is the appropriate method in measuring the progress of the
connection services, project management services, and pipeworks and integrated used water services since this
depicts the Group’s performance in managing and providing service connection from water and used water
facilities to the developments.

*SGVFS187515*
 - 41 -

 Connection fees
Connection fees are amounts paid by customers in exchange for the set-up of a connection from the
customer’s establishment to the Group’s water or used water network. Revenue from connection fees is
recognized over time using the output method based on time elapsed over the period when the related water
and used water services are expected to be provided.

 Supervision fees
Supervision fees arise from MWPVI, Aqua Centro, EcoWater, and Laguna Water’s assurance of potable
water and effective used water services for new developments, and performance of certain functions which
includes, but is not limited to, the provision of design and project management services in the development
of water and used water facilities. Revenue from supervision fees is recognized over time using an output
method.

Supervision fees accounted for as future water service is recognized as the customer receives and
consumes the benefit of water affordability or lower water tariff based on the agreed estimated water
demand projections.

 Revenue from pipeworks and integrated used water services

Revenue from pipeworks and integrated used water services is recognized over time as the water and
wastewater network related services are rendered using an output method. Under this method, progress is
measured using survey of performance completed to date and milestone reached. This is based on the
work accomplishment report prepared by the project contractor as approved by the project management
head.

Revenue recognized over time using input method

The Group determined that the input method is the appropriate method in measuring progress of the
rehabilitation works, construction revenue, and service fees because there is a direct relationship between the
Group’s effort (i.e., actual cost incurred incurred) and the transfer of service to the customer.

 Revenue from rehabilitation works and Cost of rehabilitation works

Revenue from rehabilitation works is equivalent to the related cost for the rehabilitation works covered by the
service concession arrangements which is recognized as part of contract assets included under SCA or
concession financial receivables and pertain to revenue from construction or upgrade services. Revenue
from rehabilitation works is recognized over time, using input method. Under this method, progress is
measured by reference to the actual costs incurred to date.

 Construction revenue
Construction revenue arise from the NRWRSA with ZCWD for the establishment of district metering areas.
Revenue from construction services is recognized over time, using input method. Under this method,
progress is measured based on actual costs incurred on materials, labor, and overhead relative to the total
project costs.

 Service fees
Service fees for technical assistance extended to ZCWD are recognized over time, using input method,
when the related services have been rendered to the ZCWD. Under this method, progress is measured
based on actual costs incurred on manpower and overhead relative to the total project costs.

Revenue recognized at a point in time

 Distributors’ fee
Distributors’ fee is recognized as revenue at a point in time when control of the trade assets has been
transferred to the distributor, generally upon delivery of the related assets.

 Revenue from packaged water

Revenue from packaged water and other water related products is recognized at the point in time when
control of the goods is transferred to the distributor, generally upon receipt of the related product, to the
customer.

*SGVFS187515*
 - 42 -

 Other operating income and non-operating income

Other customer related fees such as reconnection and disconnection fees, income from customers late
payments, income from septic sludge disposal, and income from bacteriological water analysis and are
recognized at a point in time when the control over these good or services have been transferred to the
customer. Liquidated damages are presented under non-operating income and recognized at a point in
time.

Contract Balances
Receivables
A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e., only the
passage of time is required before payment of the consideration is due).

Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the
Group performs by transferring goods or services to a customer before the payment is due, a contract asset is
recognized for the earned consideration that is conditional.

Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before
the Group transfers goods or services to a customer, a contract liability is recognized when the payment is made
or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Group
performs under the contract.

Interest Income
Interest income is recognized as it accrues, taking into account the effective yield of the assets.

For all financial instruments measured at amortized cost, interest income is recorded using the EIR. EIR is the
rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability

Cost of Services and Operating Expenses

Costs and expenses are recognized in profit or loss when a decrease in future economic benefits related to a
decrease in an asset or an increase in a liability has arisen that can be measured reliably. These are
recognized:

 on the basis of a direct association between the costs incurred and the earning of specific items of income;
 on the basis of systematic and rational allocation procedures when economic benefits are expected to arise
over several accounting periods and the association can only be broadly or indirectly determined; or,
 immediately when expenditure produces no future economic benefits or when, and to the extent that, future
economic benefits do not qualify or cease to qualify, for recognition in the consolidated statement of financial
position as an asset.

Cost of services and operating expenses are measured at the amount paid or payable.

Foreign Currency-Denominated Transactions

Foreign exchange differentials arising from foreign currency transactions of the Parent Company’s loans and
concession fees are credited to or charged against operations. For the Parent Company, as approved by the
MWSS BOT under Amendment No.1 of the Concession Agreement, the following will be recovered or refunded
through billings to customers:

a. restatement of foreign currency-denominated loans;

b. difference of actual and twelve (12)-month projected concession fee payments against the amounts of
concession fees translated using the base exchange rate assumed in the business plan approved every rate
rebasing exercise. The current base exchange rates are P = 53.16:US$1.00, P
= 0.475: Y1.00,
P
= 62.156: €1.00 based on the latest rate rebasing exercise effective January 1, 2018;
c. difference of actual and twelve (12)-month projected interest payments translated using the exchange spot
rate on settlement date and average forex of the month immediately preceding the cut-off information date,
respectively, against the amount of interest translated at drawdown rate; and
d. difference of actual and twelve (12)-month projected payments of other financing charges relating to foreign
currency-denominated loans translated at exchange spot rate on settlement date and average forex of the
month immediately preceding the cut-off information date, against the amount of other financing charges
translated at drawdown rate.

*SGVFS187515*
 - 43 -

Beginning November 18, 2021, the FCDA was no longer applied to water rates of the Parent Company’s
customers. The RCA stipulates the exclusion of FCDA from charges billed to customers.

However, due to non-effectivity of the RCA on June 30, 2022, the Parent Company has reinstated the original
Concession Agreement on July 1, 2022 with the recovery mechanism of the FCDA still in effect.

On May 10, 2023, the 7th Amendment of the RCA includes FCDA that will be based on the following
(1) Forex gains or losses arising from the payments to service the debt of MWSS Loans; and (2) forex gains or
losses arising from principal payments of loans, limited to the list of loans provided in the RCA. Forex gains or
losses on additional/new foreign currency denominated loans secured and drawn after June 29, 2022 onwards
shall be recovered through Modified FCDA.

For Boracay Water, its concession agreement with TIEZA allows for the recovery of the following from its
customers:

a. restatement of foreign currency-denominated loans;

b. excess of actual interest payments translated at exchange spot rates on settlement dates over the amounts
of interest translated at agreed base rate; and
c. excess of actual payments of other financing charges relating to foreign currency-denominated loans
translated at exchange spot rates on settlement dates over the amount of other financing charges translated
at agreed base rate.

The functional and presentation currency of the Parent Company and its Philippine subsidiaries is the Philippine
Peso. Each entity in the Group determines its own functional currency and items included in the separate
financial statements of each entity are measured using that functional currency. Transactions in foreign
currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the
date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. All
differences are taken to profit or loss, with the exception of differences on foreign currency borrowings that
provide a hedge against a net investment in a foreign entity. These are recognized in OCI until the disposal of
the net investment, at which time they are recognized in profit or loss. Tax charges and credits attributable to
exchange differences on those borrowings are also dealt with in equity. Nonmonetary items that are measured
in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of initial
transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange
rate at the date when the fair value was determined.

In view of the automatic reimbursement mechanism, the Group recognizes deferred FCDA (included as part of
“Other noncurrent assets” in the consolidated statement of financial position) for both the realized and unrealized
foreign exchange gains and losses. Other water revenue-FCDA is credited (debited) upon recovery (refund) of
realized foreign exchange losses (gains). The write-off or reversal of the deferred FCDA pertaining to
concession fees will be made upon determination of the rebased foreign exchange rate, which is assumed in the
business plan approved by the MWSS RO during the latest Rate Rebasing exercise, unless indication of
impairment of the deferred FCDA would be evident at an earlier date.

The functional currency of MWAP, MWSAH, TDWH, KDWH and MSEA is the United States Dollar
(US$ or USD), while Thu Duc Water, Kenh Dong Water, Saigon Water and Cu Chi Water’s functional currency is
the Vietnamese Dong (VND), PTMWI and PTSTU’s is the Indonesian Rupiah (IDR), MWTC and East Water’s is
the Thailand Baht (THB), and IWP and IWP2 is the Saudi Riyal (SAR). As of reporting date, the assets and
liabilities of these subsidiaries and associates are translated into the presentation currency of the Group at the
rate of exchange at the reporting date and their profit and loss accounts are translated at the weighted average
exchange rates for the year. The exchange differences arising on the translation are recognized in OCI and
reported as “Cumulative translation adjustment”, a separate component of equity. On disposal of a foreign entity,
the “Cumulative translation adjustment” relating to that particular foreign operation shall be recognized in profit or
loss.

Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, development, improvement and construction of
fixed assets (including costs incurred in connection with rehabilitation works) that necessarily takes a substantial
period of time to get ready for its intended use are recorded as property, plant and equipment or SCA, as
applicable. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing of funds.

*SGVFS187515*
 - 44 -

The interest capitalized is calculated using the Group’s weighted average cost of borrowings after adjusting for
borrowing associated with specific developments. Where borrowings are associated with specific developments,
the amount capitalized is the gross interest incurred on those borrowings less any investment income arising on
their temporary investment.

The capitalization of those borrowing costs commences when the activities to prepare the asset are in progress
and expenditures and borrowing costs are being incurred. Capitalization of borrowing costs ceases when
substantially all activities necessary in preparing the related assets for their intended use are complete.
Borrowing costs include interest charges and other related financing charges incurred in connection with the
borrowing of funds and the foreign exchange differences from the Group’s foreign currency borrowings to the
extent that they are regarded as an adjustment to interest cost. Premiums and/or discounts on long-term debt
are included in the “Short-term and Long-term debt” account in the consolidated statement of financial position
and are amortized using the effective interest rate method.

Provisions
A provision is recognized when the Group has: (a) a present obligation (legal or constructive) as a result of a
past event; (b) it is probable (i.e. more likely than not) that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If
the effect of the time value of money is material, provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessment of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the
passage of time is recognized as an interest expense. Where the Group expects a provision to be reimbursed,
the reimbursement is not recognized as a separate asset and only when the reimbursement is virtually certain.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not
recognized in the consolidated financial statements but disclosed when an inflow of economic benefits is
probable.

Defined Benefit Plan

The net defined benefit liability or asset is the aggregate of the present value of the defined benefit obligation at
the end of the reporting period reduced by the fair value of plan assets (if any).

The cost of providing benefits under the defined benefit plans is actuarially determined using the projected unit
credit method.

Defined benefit costs comprise the following:

a. service cost,
b. net interest on the net defined benefit liability or asset, and
c. remeasurements of net defined benefit liability or asset.

Service costs which include current service costs, past service costs, and gains or losses on non-routine
settlements are recognized as expense in profit or loss. Past service costs are recognized when plan
amendment or curtailment occurs. These amounts are calculated periodically by independent qualified
actuaries.

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit
liability or asset that arises from the passage of time which is determined by applying the discount rate based on
government bonds to the net defined benefit liability or asset.

Net interest on the net defined benefit liability or asset is recognized as expense or income in the consolidated
profit or loss.

Remeasurements comprising actuarial gains and losses and return on plan assets (excluding net interest on
defined benefit liability or asset) are recognized immediately in other comprehensive income in the period in
which they arise. Remeasurements are not reclassified to profit or loss in subsequent periods.

*SGVFS187515*
 - 45 -

Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies. Plan
assets are not available to the creditors of the Group, nor can they be paid directly to the Group. The fair value
of plan assets is based on market price information. When no market price is available, the fair value of plan
assets is estimated by discounting expected future cash flows using a discount rate that reflects both the risk
associated with the plan assets and the maturity or expected disposal date of those assets (or, if they have no
maturity, the expected period until the settlement of the related obligations). If the fair value of the plan assets is
higher than the present value of the defined benefit obligation, the measurement of the resulting defined benefit
asset is limited to the present value of economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan.

The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit
obligation is recognized as a separate asset at fair value when and only when reimbursement is virtually certain.

Termination Benefit
Termination benefits are employee benefits provided in exchange for the termination of an employee’s
employment as a result of either an entity’s decision to terminate an employee’s employment before the normal
retirement date or an employee’s decision to accept an offer of benefits in exchange for the termination of
employment.

A liability and expense for a termination benefit is recognized at the earlier of when the entity can no longer
withdraw the offer of those benefits and when the entity recognizes related restructuring costs. Initial recognition
and subsequent changes to termination benefits are measured in accordance with the nature of the employee
benefit, as either post-employment benefits, short-term employee benefits, or other long-term employee benefits.

Short-term Employee Benefits

Short-term employee benefits include items such as salaries and wages, social security contributions, and
nonmonetary benefits, if expected to be settled wholly within twelve (12) months after the end of the reporting
period in which the employees rendered the related services. Short-term employee benefits are recognized as
expense as incurred. When an employee has rendered service to the Group during the reporting period, the
Group recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for
that service as a liability (accrued expense), after deducting any amount already paid.

Employee Leave Entitlement

Employee leave entitlements are recognized as a liability when they are accrued to the employees. The
undiscounted liability for employee leaves is recognized for services rendered by employees up to the end of the
reporting period.

Share-Based Payment

Employee share purchase plan

The Parent Company has an employee stock ownership plan (ESOWN) which allows the grantees to purchase
the Parent Company’s shares at a discounted price. The Parent Company recognizes stock compensation
expense over the holding period. The Parent Company treats its ESOWN plan as option exercisable within a
given period. These are accounted for similar to the PFRS 2, Share-based Payment, options. Dividends paid on
the awards that have vested are deducted from equity and those paid on awards that are unvested are charged
to profit or loss.

Stock incentive plan (SIP)

Certain qualified officers and employees of the Parent Company receive remuneration for their services in the
form of equity shares of the Parent Company.

The cost of SIP with officers and employees is measured by reference to the fair value of the stock at the date on
which these are granted. The cost of SIP is recognized, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting date).

Equity
Capital stock is measured at par value for all shares subscribed, issued and outstanding. When the Group
issues more than one class of stock, a separate account is maintained for each class of stock and the number of
shares issued.

*SGVFS187515*
 - 46 -

When the shares are sold at premium, the difference between the proceeds at the par value is credited to
“Additional paid-in capital” account. Direct costs incurred related to equity issuance are chargeable to “Additional
paid-in capital” account. If additional paid-in capital is not sufficient, the excess is charged against retained
earnings. When the Group issues more than one class of stock, a separate account is maintained for each class
of stock and the number of shares issued.

Subscriptions receivable pertains to the uncollected portion of the subscribed shares.

Retained earnings represent accumulated earnings of the Group. Appropriated retained earnings are set aside
for future business expansions. The Parent Company’s BOD declares dividends from the unappropriated portion
of its retained earnings.

Treasury shares are recorded at acquisition cost. The total amount of treasury shares is shown in the
consolidated statement of financial position as a deduction from the total equity. Upon re-issuance or resale of
the treasury shares, cost of common shares held in treasury account is credited for the cost of the treasury
shares.

Other equity reserves pertain to items of equity that were not presented in either retained earnings or other
comprehensive income.

Taxes
Value Added Tax (VAT)
Input VAT pertains to the 12% indirect tax paid by the Group in the course of the Group’s trade or business on
local purchase of goods or services. Deferred input VAT pertains to input VAT on accumulated purchases of
property, plant and equipment and service concession assets for each month amounting to P = 1.00 million or
more. This is amortized over five (5) years or the life of the property, plant and equipment or service concession
assets, whichever is shorter, in accordance with the Bureau of Internal Revenue (BIR) regulation.

Output VAT pertains to the 12% tax due on the local sale of goods and services by the Group.

If at the end of any taxable month, the output VAT exceeds the input VAT, the outstanding balance is included
under “Trade payables” in the “Accounts and other payables” account. If the input VAT exceeds the output VAT,
the excess shall be carried over to the succeeding months and included under the “Other current assets”
account.

Due to the effectivity of the Legislative Water Franchise starting March 21, 2022, the Parent Company has
removed the output VAT from the customer bills and charge the customers’ bills the related franchise tax of 2%
instead. Moreover, any input VAT imposed by the Parent Company’s suppliers are treated as part of the cost of
purchase starting March 21, 2022.

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that have been
enacted or substantively enacted as at the reporting date.

Deferred tax
Deferred tax is provided, using the liability method, for all temporary differences, with certain exceptions,
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

 When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination, and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
 In respect of taxable temporary difference associated with investments in subsidiaries and associates, when
the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.

*SGVFS187515*
 - 47 -

Deferred tax assets are recognized for all deductible temporary differences, the carryforward of unused tax
credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carryforward of
unused tax credits and unused tax losses can be utilized, except:

 When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.

 In respect of deductible temporary differences associated with investments in subsidiaries and associates,
deferred tax assets are recognized only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary differences
can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax assets to
be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the
extent that it has become probable that future taxable income will allow all or part of the deferred tax assets to be
recovered.

Deferred tax assets and liabilities are measured at the tax rate that is expected to apply in the year when the
asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted as of the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax
items are recognized in correlation to the underlying transaction either in other comprehensive income or directly
in equity.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to
set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities
which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the
liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.

Discontinued Operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been
disposed of, or is classified as held for sale, and:

 represents a separate major line of business or geographical area of operations

 is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or
 is a subsidiary acquired exclusively with a view to resale.

Discontinued operations are excluded from the results of continuing operations and are presented as a single
amount as “Net loss after tax from discontinued operations” in the consolidated profit or loss. All other notes to
the financial statements include amounts for continuing operations, unless indicated otherwise. The related
results of operations of the disposal group that qualified as a discontinued operation are separated from
continuing operations and prior year’s consolidated statements of income have been restated.

Earnings per Share (EPS)

Basic EPS is computed by dividing net income applicable to common stock by the weighted average number of
common shares outstanding (excluding treasury shares) during the year and adjusted to give retroactive effect to
any stock dividends declared, if any, during the period. The net income attributable to common stock is net of
the dividends on preferred shares including the participating preferred shares’ participation in earnings. The
participating preferred shares participate in the earnings at a rate of 1/10 of the dividends paid to a common
share.

Diluted EPS is computed by dividing earnings attributable to common shares (excluding treasury shares) by the
weighted average number of common shares outstanding during the period, after giving retroactive effect of any
stock dividends, if any, during the period and adjusted for the effect of dilutive options. Outstanding stock
options will have a dilutive effect under the treasury stock method only when the average market price of the
underlying common share during the period exceeds the exercise price of the option. Where the effects of the

*SGVFS187515*
 - 48 -

assumed exercise of all outstanding options have anti-dilutive effect, basic and diluted EPS are stated at the
same amount.

Assets Held in Trust

Assets which are owned by MWSS, CWD, TIEZA, CDC, OWD, BuWD, PGL, CCWD, TnWD, PAGWAD, LWD,
and CIWD that are operated by the Group under the Group’s concession agreements are not reflected in the
consolidated statement of financial position but are considered as “Assets held in trust” (see Note 25).

Segment Reporting
The Group aggregates two or more operating segments into a single operating segment when separately, each
operating segment has similar economic characteristics and service area. The Group aggregated its local and
foreign subsidiaries into the Domestic Subsidiaries segment and Foreign Subsidiaries segment, even if the
subsidiaries cater to different customers, since management has assessed that these entities have similar
economic characteristics and service area. The Group considers the Manila Concession and Head Office,
Domestic Subsidiaries, and Foreign Subsidiaries as its operating segments that are aggregated based on the
geographical location and source of revenues. Financial information on business segments is presented in
Note 26 to the consolidated financial statements.

Reclassifications
Certain prior period financial statement amounts have been reclassified by the Group to conform to current
period presentation. These reclassifications had no effect on the reported results of operations.

Events after the Reporting Period

Any event after the reporting period up to the date of the auditors’ report that provide additional information about
the Group’s financial position at the reporting date (adjusting events) is reflected in the consolidated financial
statements. Any event after the reporting date that is not an adjusting event is disclosed in the consolidated
financial statements when material.

3. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the consolidated financial statements, in conformity with PFRS, requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial statements and
the accompanying notes. The estimates and assumptions used in the consolidated financial statements are
based upon management’s evaluation of relevant facts and circumstances as of the date of the consolidated
financial statements. Actual results could differ from such estimates.

Management believes the following represent a summary of these significant estimates and judgments:

Judgments
In the process of applying the Group’s accounting policies, management has made the following judgments,
which have the most significant effect on the amounts recognized in the consolidated financial statements.

Service concession arrangements

In applying Philippine Interpretation IFRIC 12, the Group has made a judgment that its concession agreements
with MWSS, CWD, TIEZA, CDC, OWD, BuWD and PGL; JVAs with CCWD, TnWD, PAGWAD, and LWD; SMA
with CIWD; and MOAs with the Municipalities of Sta. Barbara, San Fabian, and Manaoag qualify under the
Intangible Asset model as it receives the right (license) to charge users of public service (see Notes 2 and 10).

On August 6, 2019, the Parent Company, together with MWSS signed the Wawa Bulk Water Agreement with
WawaJVCo. Inc. The agreement involves the supply of supply of 518 million liters per day of raw water from the
Wawa and Tayabasan rivers. The first phase of the agreement will involve supply of 80 million liters per day of
raw water in October 2022, while the second phase will supply the additional 438 million liters per day of raw
water by December 31, 2025.

On October 25, 2022, the construction of the Tayabasan Multibasin System Project was completed, and the joint
venture commenced the provision of initial 80 million liters per day of raw water to the Parent Company.
The Parent Company accounts for the Wawa Bulk Water Agreement under the intangible asset model as it
receives the right (license) to charge users of public service (see Notes 2 and 10).

*SGVFS187515*
 - 49 -

On the other hand, the Group has made a judgment that the bulk water sale and purchase agreements with
CIWD, TWD, and MCWD qualify under the Financial Asset model as it has an unconditional contractual right to
receive cash or other financial assets for its construction services directly from CIWD, TWD, and MCWD
(see Notes 2 and 6).

On December 1, 2023, the bulk water sale and purchase agreement with MCWD was terminated. The
termination, however, does not qualify Cebu Water’s operation to be discontinued. Accordingly, the Group
ceased to recognize the agreement under the requirements of Philippine Interpretation IFRIC 12 and applied
PAS 16, Property, Plant and Equipment as the ownership of the assets was retained by Cebu Water based on its
concession agreement (see Notes 6 and 9).

Investments in associates
The Group has determined that it has significant influence over East Water despite holding less than 20.00% of
East Water’s outstanding shares of stock. The Group considers several factors including its representation in
East Water’s BOD, representation in East Water’s Investment Committee, and its voting power through share
ownership to determine the Group’s power to participate in the financial and operating policy decisions of East
Water.

As of December 31, 2023 and 2022, the Group owns 18.72% of East Water (see Note 12).

Revenue recognized using the input and output method

The Group recognizes revenue from rehabilitation works, construction revenue, and service fees using the input
method while it recognizes supervision fees, and revenue from pipeworks, and revenue from integrated used
water services using the output method. The input or output method of recognizing revenue over the period
covered by the separate contracts with customers requires the Group to base the level of transfer of control over
these services based on the Group's review and concurrence with work accomplishment reports prepared by
project managers or submitted by independent project contractors.

Segment reporting
The Group aggregates two or more operating segments into a single operating segment when separately, each
operating segment has similar economic characteristics and service area. The Group aggregated its local and
foreign subsidiaries into the Domestic Subsidiaries segment and Foreign Subsidiaries segment even if it caters
to different customers since management assessed that these entities have similar economic characteristics and
service area. As of December 31, 2023 and 2022, the Group considers the Manila Concession and Head Office,
Domestic Subsidiaries, and Foreign Subsidiaries as its operating segments that are aggregated based on the
geographical location and source of revenues (see Note 26).

Determination of lease term of contracts with renewal and termination options – the Group as a lessee
The Group has several lease contracts that include extension and termination options. The Group applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or
terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise
either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is
a significant event or change in circumstances that is within its control and affects its ability to exercise or not to
exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or
significant customization to the leased asset) (see Note 11).

Provisions and contingencies

The Group is currently involved in exposures in the ordinary conduct of business. The estimate of the probable
costs for the resolution of these claims has been developed in consultation with internal and external counsels
handling the defense in these matters and is based upon an analysis of potential results (see Note 30).

As of December 31, 2023 and 2022, the provision for estimated probable losses amounting to P = 402.66 million
and P= 653.75 million, respectively, pertains to various legal proceedings and exposures arising in the ordinary
course of business. Management believes that any amount the Group may have to pay in connection with any of
these matters will not have a material adverse effect on the Group’s financial position or operating results. The
information normally required under PAS 37, Provisions, Contingent Liabilities and Contingent Assets, is not
disclosed as it may prejudice the outcome of the proceedings (Note 1).

Discontinued operations
As of December 31, 2023 and 2022, the operations of Zamboanga Water qualified as discontinued operations
because the termination of the NRWRSA resulted to the cessation of Zamboanga Water’s operations.
Zamboanga Water’s noncurrent assets, such as property and equipment, which it used for its operations were
closed or disposed of to third parties rather than being sold or distributed back to its owners. Zamboanga Water

*SGVFS187515*
 - 50 -

is a joint venture company incorporated solely for the execution of the NRWRSA, which represents a separate
major line of business or geographical area of operation.

Meanwhile, MWIS’ Healthy Family division also qualified as discontinued operations following the segment’s
permanent closure effective October 31, 2020 due to recurring losses and inability to financially sustain business
operations.

Amortization of water and used water assets

Beginning April 1, 2022, MWPVI, Aqua Centro, EcoWater and BMDC shifted from straight-line method of
depreciation of water and used water assets (excluding water meters) to UOP method to better reflect the usage
of water and used water facilities which is directly related to expected volume and is aligned with industry
practice. This change in method resulted in P = 75.01 million reduction in depreciation expense in 2022.

Use of Estimates
Key assumptions concerning the future and other sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are
discussed below. Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising that are beyond the control of the Group. Such changes are
reflected in the assumptions when they occur.

Revenue and cost recognition – rehabilitation works

The Group measures revenue from rehabilitation works at the fair value of the consideration received or
receivable. The Group’s revenue from rehabilitation works are recognized over time, using the input method.
Under this method, progress is measured by reference to the actual costs incurred to date. Revenue from
rehabilitation works recognized by the Group is equivalent to the costs of rehabilitation works incurred as these
costs are recovered by the Group through its right to charge the customers. The Group’s revenue from and cost
of rehabilitation works amounted to P
= 19,774.86 million, P
= 23,626.42 million, and P
= 16,970.07 million in 2023,
2022 and 2021, respectively (see Notes 6 and 10).

Provision for ECLs of receivables from customers

The Group uses a provision matrix to calculate ECLs for receivables. The provision rates are based on days
past due for groupings of various customer segments that have similar loss patterns.

The provision matrix is initially based on the Group’s historical observed default rates. The Group calibrates the
matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast
economic conditions (i.e., inflation) are expected to deteriorate over the next year which can lead to an increase
in prices of basic goods and services, the historical default rates are adjusted. At every reporting date, the
historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

The assessment of the correlation between historical observed default rates, forecast economic conditions, and
ECLs, which have been adjusted to consider a range of possible outcomes, is a significant estimate. The
amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s
historical credit loss experience and forecast of economic conditions may also not be representative of
customer’s actual default in the future.

The Parent Company also incorporated factors brought about by the impact of enhanced community quarantine
(ECQ) or modified ECQ (MECQ) during the coronavirus pandemic in the determination of its historical observed
default rates. This includes disconnection activities, extended payment terms and installment payment schemes,
among others.

As of December 31, 2023 and 2022, allowance for expected credit losses of receivables from customers
amounted to P
= 1,521.88 million and P
= 1,631.68 million, respectively (see Note 6).

Estimating the period over which control over services is transferred to the customer
For each group of similar customer contracts that result in revenues recognized over a period of time, the Group
makes an estimate of such period over which the Group transfers the control of the services provided to the
customer. For revenue from rehabilitation works, construction revenue, service fees, supervision fees, and
revenue from pipeworks and integrated used water services, the Group has determined that the period of
revenue recognition is the term of the customer contract. For connection fees revenue, the Group has estimated
that the customer receives control over the remaining concession period or remaining customer contract term,
whichever is shorter.

*SGVFS187515*
 - 51 -

Estimating net realizable value of inventories

The Group writes down inventories to net realizable value, through the use of an allowance account, whenever
the net realizable value of inventories becomes lower than the cost due to damage, physical deterioration,
obsolescence, changes in price levels or other causes.

The estimates of net realizable value are based on the most reliable evidence available at the time the estimates
are made of the amounts the inventories are expected to be realized. These estimates take into consideration
fluctuations of prices or costs directly relating to events occurring after reporting date to the extent that such
events confirm conditions existing at reporting date. The allowance account is reviewed on a regular basis to
reflect the accurate valuation in the financial records.

As of December 31, 2023 and 2022, the carrying amount of inventories, at NRV, amounted to P
= 380.62 million
and P
= 450.66 million, respectively (see Note 7).

Estimating useful lives of water rights

MW Consortium and MWPVI estimate that the useful lives of the water rights to be indefinite, considering that the
water permits remain valid for as long as water is beneficially used. It is possible that future results of operations
could be materially affected by changes in MW Consortium and MWPVI’s estimates. The amounts and timing of
recording of expenses for any period would be affected by changes in these factors and circumstances
(see Note 13).

Estimating useful lives of SCA

Starting January 1, 2022, the Parent Company’s water and used water assets are amortized using the UOP until
2047, following the approval of the Parent Company’s legislative water franchise and RR23 business
development plan. Previously, the Parent Company’s water and used water assets are amortized using the UOP
over the estimated total billable volume until May 6, 2037, which is the end of the original concession agreement
with MWSS. This change in EUL resulted in P = 1,090.74 million reduction in the amortization expense in 2022.

Impairment of nonfinancial assets

The Group assesses the impairment of nonfinancial assets (property, plant and equipment, SCA, contract assets
representing SCA under construction, right-of-use assets, investments in associates, water rights, and deposits
under other current and noncurrent assets) whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The factors that the Group considers important which
could trigger an impairment review include the following:

 significant underperformance relative to expected historical or projected future operating results;

 significant changes in the manner of usage of the acquired assets or the strategy for the Group’s overall
business;
 significant negative industry or economic trends;
 significant decline in net worth or market capitalization; and
 significant decline in distributed profits or increase in losses.

As described in the accounting policy, the Group estimates the recoverable amount as the higher of the fair value
less cost to sell and value in use.

In determining the present value of estimated future cash flows expected to be generated from the continued use
of the assets, the Group is required to make estimates and assumptions regarding the expected future cash
generation of the assets, discount rates to be applied and the expected period of benefits.

In 2022, the Group recognized provision for impairment loss on advances to suppliers, contractors and deposits
amounting to P= 138.07 million, presented under operating expenses in the consolidated profit or loss. Reversal of
impairment loss was recognized in 2023 amounting to P = 12.40 million (see Notes 8 and 18).

As of December 31, 2023, East Water’s market capitalization is significantly lower compared to its net book
value. Further in 2023, pursuant to the lease termination notice issued by Thailand’s Treasury Department, East
Water delivered back its leased transmission pipeline assets to the new operator appointed by the Treasury
Department

*SGVFS187515*
 - 52 -

The handover of these pipelines has resulted in the recognition of losses on East Waters’ books and
management expects that this will result in lower future raw water revenues. East Water is in the process of
constructing additional water distribution pipelines of approximately 139 kilometers to replace the lost leased
pipelines. These events are considered as indicators of impairment. The Group has assessed that the
recoverable amount of its investment in East Water based on its value-in-use was lower than the investment’s
net book value. Accordingly, in 2023, the Group recognized provision for impairment loss on its investment in
East Water amounting to P = 4,063.26 million recorded under “Equity in net earnings (losses) of associates” in the
statement of comprehensive income (see Note 12).

In determining the present value of estimated future cash flows expected to be generated from the continued
operations of East Water, the Group is required to make professional judgments and estimates that can
materially affect the consolidated financial statements. The Group determined the recoverable amount of the
investment in East Water based on the higher of fair value less costs of disposal and value-in-use calculation
using a revenue growth rate of 1.2%, terminal growth rate of 1.82% and pre-tax discount rate of 6.80% as of
December 31, 2023.

In 2022, the management determined that the recoverable amount of the East Water’s nonfinancial assets was
higher than its net book value. Accordingly, the Group did not recognize any impairment loss on its investment in
East Water in 2022.

As of December 31, 2023 and 2022, the Group has not recognized any impairment loss on its investments in
Thu Duc Water, Kenh Dong Water, PT STU and IWP. As of December 31, 2023, and 2022, the Group has
accumulated allowance for impairment on its investments in associates amounting to P
= 4,543.96 million and
P
= 480.70 million, respectively (see Note 12).

As of December 31, 2023 and 2022, there were no indicators of impairment on the Group subsidiaries’ property
plant and equipment and SCA, right-of-use assets, water rights, and deposits under other current assets and
other noncurrent assets (see Notes 9, 10, 11 and 13).

Impairment of goodwill on the acquisition of Clark Water

Goodwill impairment testing requires an estimation of the recoverable amount which is the fair value less cost to
sell or value in use of the cash-generating units to which the goodwill is allocated. Estimating value in use
amount requires management to make an estimate of the expected future cash flows for the cash-generating unit
and to choose a suitable discount rate in order to calculate the present value of cash flows.

The MWPVI’s impairment test for goodwill related to the acquisition of Clark Water is based on value in use
calculations using a discounted cash flow model. In 2021, the forecasted cash flows for the next nineteen (19)
years assume a steady growth rate and are derived from Clark Water’s latest business plan. MWPVI used the
remaining concession life of Clark Water when testing for impairment. The recoverable amount is most sensitive
to discount rate used for the discounted cash flow model. The pre-tax discount rate applied to cash flow
projections was 8.89% in 2021.

The carrying value of goodwill on the acquisition of Clark Water in the consolidated statements of financial
position amounted to nil as of December 31, 2023 and 2022 (see Note 4). The Group has recognized full
impairment on the goodwill from the Clark Water acquisition under “Other income (losses) - net” amounting to
P
= 130.32 million in 2021 (see Note 18).

Estimating billable water volume

The SCAs related to the concession agreements of the Group are amortized using the UOP method based on
actual billed volume and total estimated billable volume for the remaining period of the concession agreements
and franchise period. The demand study to arrive at the estimated billable volume is performed by a third-party
expert and considers factors such as population growth rate, supply and consumption, and service coverage,
including ongoing and future expansions in estimating the total billable water volume over the remaining periods
of the concession agreements. In 2022 and 2021, the Group also considered the impact of the coronavirus
pandemic on the future billable volume, which has affected the billed volume mix and consumption. For the
years ended December 31, 2023, 2022, and 2021, SCA amortization expense based on the UOP method are
disclosed in Notes 10 and 18.

*SGVFS187515*
 - 53 -

Deferred FCDA
Under the concession agreements entered into by the Parent Company and Boracay Water with MWSS and
TIEZA, respectively, the Parent Company and Boracay Water are entitled to recover (refund) foreign exchange
losses (gains) arising from concession loans and any concessionaire loans. The Parent Company and Boracay
Water recognized deferred FCDA (included as part of “Other noncurrent assets” in the consolidated statement of
financial position) for both realized and unrealized foreign exchange gains and losses. Deferred FCDA is set up
as an asset for the realized and unrealized exchange losses since this is a resource controlled by the Parent
Company and Boracay Water as a result of past events and from which future economic benefits are expected to
flow to the Parent Company and Boracay Water. Net realized and unrealized foreign exchange gains, on the
other hand, which will be refunded to the customers, are presented as liability.

As of December 31, 2023 and 2022, the Parent Company and Boracay Water’s deferred FCDA classified under
“Other noncurrent assets” amounted to P
=2,631.23 million and P
= 2,654.59 million, respectively (see Note 13).

The Group’s deferred FCDA arises from a rate adjustment mechanism for the recovery or compensation on a
current basis, subject to quarterly review and adjustment by MWSS or TIEZA, when necessary, of accrued
foreign exchange gains and losses, arising from MWSS or TIEZA loans and concession loans used for capital
expenditures and concession fee payments.

Beginning November 18, 2021, the Parent Company’s RCA has removed FCDA from the water rates of the
Parent Company’s customers. The Parent Company’s profit or loss reflects the unrealized and realized foreign
exchange gains and losses from long-term debt and service concession obligations which are no longer
expected to be recovered under the FCDA recovery mechanism. However, due to non-effectivity of the RCA on
June 30, 2022, the Parent Company has reinstated the original Concession Agreement on July 1, 2022 with the
recovery mechanism of the FCDA still in effect.

On May 10, 2023, the seventh amendment of the RCA includes the basis of FCDA and the Parent Company’s
FCDA recovery mechanism.

Boracay Water, on the other hand, still maintains this natural hedge and does not expect any movement of the
foreign currencies against the Philippine Peso to have a significant effect on the Group’s income before income
tax.

Deferred tax assets

The Group reviews the carrying amounts of deferred taxes at each reporting date and reduces deferred tax
assets to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part
of the deferred tax assets to be utilized. Significant management judgement is required to determine the
amounts that could be recognized, based upon the likely timing and the level of future taxable profits, together
with future tax planning.

Also, the Group does not recognize deferred taxes on certain deductible temporary differences where doubt
exists as to the tax benefits they will bring in the future (see Note 20).

Pension liabilities
The cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation
involves making various assumptions. These include the determination of the discount rates, future salary
increases, mortality rates, incapacity rates, retirement rate, and termination rates. The amounts of defined
benefit obligations are highly sensitive to changes due to the complexity of the valuation and its long-term nature.
Discount rate, salary increase rate, retirement rate, and termination rate assumptions are reviewed at each
reporting date. The Group’s net pension liability amounted to P = 388.22 million and P
= 288.21 million as of
December 31, 2023 and 2022, respectively (see Note 16).

In determining the discount rate, management considers the interest rates of government bonds that are
denominated in the currency in which the benefits will be paid, with extrapolated maturities corresponding to the
expected duration of the defined benefit obligation. Future salary increases are based on expected future
inflation rates for the specific country. Retirement and termination rates are based on expected rates at which
employees are assumed to retire or leave the employment of the Group.

Further details about the assumptions used are provided in Note 16.

*SGVFS187515*
 - 54 -

Estimating the incremental borrowing rate for leases

The Group cannot readily determine the interest rate implicit in the lease, therefore, it used its incremental
borrowing rate to measure its lease liabilities. The incremental borrowing rate is the rate of interest that the
Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain
an asset of a similar value to the right-of-use asset in a similar economic environment. The incremental
borrowing rate therefore reflects what the Group ‘would have to pay’, which requires estimation when no
observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when
they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the
subsidiary’s functional currency). The Group estimates its incremental borrowing rate using observable inputs
(such as market interest rates) when available and is required to make certain entity-specific estimates
(such as the subsidiary’s stand-alone credit rating).

The Group’s lease liabilities amounted to P

= 332.38 million and P
= 436.35 million as of December 31, 2023 and
2022, respectively (see Note 11).

4. Business Combination and Goodwill

As of December 31, 2023 and 2022, the Group’s goodwill consists of:

Balance at beginning of the year P

= 136,566,475
Less: Accumulated impairment loss (Notes 3 and 18) 130,319,465
P
= 6,247,010

As of December 31, 2023 and 2022, goodwill arose from the Group’s acquisitions of the following businesses:

Aqua Centro:
Tahanang Yaman Homes Corporation P
= 2,940,210
BMDC:
San Vicente Homes 1,229,600
Las Palmas Subdivisions Phases 1 to 7 1,206,000
Prosperity Builders Resources Inc. 871,200
P
= 6,247,010

In 2021, the Group has recognized full impairment on the goodwill from the Clark Water acquisition under
“Other income (losses) - net” amounting to P
= 130.32 million (see Note 18).

5. Cash and Cash Equivalents and Short-term Investments

This account consists of:

2023 2022
Cash on hand and in banks (Note 23) P
= 1,109,921,916 P
= 810,243,824
Cash equivalents (Note 23) 9,642,812,258 8,001,695,388
P
= 10,752,734,174 P
= 8,811,939,212

Cash in banks earn interest at the respective bank deposit rates. Cash equivalents are highly liquid investments
with varying periods of up to three (3) months and earn interest at the respective short-term rates.

Short-term investments pertain to the Group’s time deposits with maturities of more than three (3) months up to
one (1) year and earn interest at the prevailing short-term investment rates. As of December 31, 2023 and 2022,
the Group’s short-term investments amounted to nil and P = 128.42 million, respectively.

Interest income earned from cash in banks, cash equivalents and short-term investments amounted to
P
= 300.99 million, P
= 120.98 million, and P
= 70.25 million in 2023, 2022, and 2021, respectively (see Note 18).

*SGVFS187515*
 - 55 -

6. Receivables and Contract Assets

a. Receivables

This account consists of receivables from:

2023 2022
Customers of:
Water and used water services:
Residential P
= 2,669,185,160 P
= 2,227,997,941
Commercial 478,464,544 422,721,776
Semi-business 193,395,912 190,211,986
Industrial 41,862,421 48,331,747
Pipework services 172,132,353 583,659,030
Supervision fees 291,522,067 235,770,406
Distributor’s fees 117,107,215 117,204,130
Technical due diligence services 3,283,405 6,204,141
ZCWD 39,509,823 39,509,823
Employees 17,150,278 26,978,065
Interest from banks 13,141,587 12,667,348
Others 390,044,570 502,928,062
4,426,799,335 4,414,184,455
Less: Allowance for ECLs 1,521,879,489 1,631,684,543
P
= 2,904,919,846 P
= 2,782,499,912

The classes of the Group’s receivables arising from water and used water services rendered to customers,
collectible within thirty (30) days from billing date, follow:

 Residential - pertains to receivables from residential households.

 Commercial - pertains to receivables from commercial customers.
 Semi-business - pertains to receivables from small businesses.
 Industrial - pertains to receivables from customers for industrial and manufacturing purposes.

Trade receivables from pipework services pertain to pipelaying, pipe replacements, and other services related to
water and used water treatment facilities. These receivables are collectible within sixty (60) days.

Trade receivables arising from supervision fees on the development of water and used water facilities are
collectible within thirty (30) days from billing date.

Trade receivables from distributors’ fees arise from the Exclusive Distributorship Agreement (EDA) entered into
by MWIS with distributors of its Healthy Family drinking water and were collectible within the period that is
agreed with the distributors.

Receivable from ZCWD pertains to billed charges for service fees, construction revenue, and performance fees
arising from Zamboanga Water’s NRWRSA. Provision for ECL pertaining to this receivable amounted to P = 39.51
million as at December 31, 2023 and 2022.

Receivable from employees arise from car, salary, and other loans which are due and demandable based on an
agreed payment schedule and are collected through salary deductions.

Interest from banks are accrued interest arising from the Group’s cash in banks, cash equivalents, and short-
term investments.

Other receivables include receivables from associates for advances made by MWAP to IWP1 and IWP2,
receivable from Maynilad for cross-border billings and receivable from MWSS for shared facilities.

*SGVFS187515*
 - 56 -

Movements in the Group’s allowance for ECLs follow:

2023
Receivable from Customers Other
Residential Commercial Semi-business Industrial Receivables Total
Balance at beginning of year P
= 1,103,241,327 P
= 124,725,640 P
= 101,017,709 P
= 5,844,840 P
= 296,855,027 P
= 1,631,684,543
Net Provisions / (Reversals)
(Note 18) 188,416,906 (11,202,913) (11,461,026) 30,172,376 20,157,915 216,083,258
Write-off (280,499,120) (29,163,331) (14,702,273) (1,523,588) – (325,888,312)
Balance at end of year P
= 1,011,159,113 P
= 84,359,396 P
= 74,854,410 P
= 34,493,628 P
= 317,012,942 P
= 1,521,879,489

2022
Receivable from Customers Other
Residential Commercial Semi-business Industrial Receivables Total
Balance at beginning of year P
= 1,466,058,531 P
= 198,580,029 P
= 87,684,036 P
= 9,023,151 P
= 371,506,626 P
= 2,132,852,373
Net Provisions / (Reversals)
(Note 18) (113,290,967) (36,549,007) 25,444,261 (1,408,696) (9,801,448) (135,605,857)
Write-off (249,526,237) (37,305,382) (12,110,588) (1,769,615) (64,850,151) (365,561,973)
Balance at end of year P
= 1,103,241,327 P
= 124,725,640 P
= 101,017,709 P
= 5,844,840 P
= 296,855,027 P= 1,631,684,543

b. Contract assets

This account consists of:

2023 2022
Contract assets from:
Supervision fees P
= 364,631,855 P
= 559,157,417
NRWRSA with ZCWD 285,928,838 285,928,838
Pipeworks and integrated used water services 72,546,702 79,359,867
Bulk water contracts:
TWD 112,693,897 112,751,059
MCWD – 186,625,445
Current portion 835,801,292 1,223,822,626
Bulk water contracts:
TWD 855,597,215 818,162,927
CIWD 340,134,026 109,323,565
MCWD – 894,496,961
Noncurrent portion 1,195,731,241 1,821,983,453
2,031,532,533 3,045,806,079
Less: Allowance for ECLs 312,876,006 381,207,729
P
= 1,718,656,527 P
= 2,664,598,350

Contract assets from supervision fees are initially recognized for revenue earned arising from the provision of
design and project management services in the development of water and used water facilities. These contract
assets are reclassified to “Receivables” upon acceptance and reaching certain construction milestones for the
related water and used water facilities.

Contract assets from pipeworks and integrated used water services are initially recognized for revenue earned
arising from water and wastewater network related services. These contract assets are reclassified to
“Receivables” upon acceptance of and billings to customers of MWIS and MWTV.

Contract assets from the NRWRSA with ZCWD were initially recognized for revenue earned arising from
construction revenue and performance fees for NRW reduction services. These contract assets were
reclassified to “Receivables” upon acceptance of and billing to the customer.

As of December 31, 2023 and 2022, Zamboanga Water recognized allowance for ECL on its contract assets with
ZCWD amounting to P= 285.93 million.

Contract assets arising from the Bulk Water Supply Agreement with MCWD and the BWSPA with TWD and
CIWD consist of the cost of rehabilitation works, are be reclassified to “Receivables” when Cebu Water, Tagum
Water, and Ilagan Water complete all performance obligations under its concession arrangements with MCWD,
TWD, and CIWD, respectively.

*SGVFS187515*
 - 57 -

On December 1, 2023, the Bulk Water Supply Agreement with MCWD was terminated. The termination,
however, did not qualify Cebu Water’s operation to be discontinued. Accordingly, the Group reclassified the
contract assets to property, plant and equipment amounting to P= 961.29 million (Note 9).

In 2021, Cebu Water invoked the force majeure clause of its Bulk Water Supply Agreement due to high water
turbidity which resulted in intermittent delivery of the required thirty-five (35) million liters of water per day to
MCWD. As a result, Cebu Water recognized impairment loss amounting to P = 30.18 million in 2021. No
impairment loss is recognized by Cebu Water in 2023 and 2022.

In 2023 and 2022, there are instances where Tagum Water was not able to deliver the required twenty-six (26)
million liters of water per day under the BWSPA due to flood and emergency plant works. In 2021, Tagum Water
was not able to meet the required water quantity due to the low yield of the Riverbank Filtration Intake structures
and the delay in the construction of the artificial recharge structure. As a result, Tagum Water recognized
impairment loss amounting to P = 1.10 million in 2023, P
= 1.25 million in 2022, and P
= 12.26 million in 2021
(see Note 18).

The rollforward of Cebu Water, Tagum Water, and Ilagan Water’s contract assets follows (Note 27):

2023 2022
Cost
Balance at beginning of year P
= 2,121,359,957 P
= 2,038,722,026
Rehabilitation works 206,302,064 99,562,641
Finance income 281,798,935 256,537,754
Service income (Note 18) 189,036,744 193,840,519
Collections (459,363,998) (413,620,704)
Reclassification to receivables – (53,682,279)
Reclassification to PPE (961,290,359) –
Write-off (Notes 1 and 9) (69,418,205) –
Balance at end of year 1,308,425,138 2,121,359,957
Allowance for ECL
Balance at beginning of year 95,278,891 94,028,997
Provisions (Note 18) 1,086,482 1,249,894
Write-off (69,418,205) –
Balance at end of year 26,947,168 95,278,891
Net book value P
= 1,281,477,970 P
= 2,026,081,066

7. Inventories

This account consists of:

2023 2022
Maintenance materials P
= 186,572,384 P
= 135,640,392
Water meters and connection supplies 91,311,080 126,831,505
Water treatment chemicals 117,784,497 203,645,495
Spare parts 21,587,594 21,180,814
417,255,555 487,298,206
Less: Allowance for obsolescence 36,640,437 36,640,437
P
= 380,615,118 P
= 450,657,769

The cost of inventories carried at NRV amounted to P

= 81.14 million and P
= 167.01 million as of December 31, 2023
and 2022, respectively. The Group’s inventories are carried at NRV. Loss from inventory obsolescence is
presented under “Operating expenses – Other expenses” in the consolidated profit or loss (see Note 18).

*SGVFS187515*
 - 58 -

8. Other Current Assets

This account consists of:

2023 2022
Net input VAT P
= 926,699,011 P
= 947,226,514
Prepaid expenses 417,376,645 554,071,442
Advances to suppliers, contractors, and deposits 316,146,760 639,219,408
1,660,222,416 2,140,517,364
Provisions 125,670,251 138,071,872
P
= 1,534,552,165 P
= 2,002,445,492

Net input VAT pertains to the Group’s excess input VAT over output VAT as of the end of the reporting period.
Due to the effectivity of the Legislative Water Franchise starting March 21, 2022, the Parent Company has
removed the output VAT from the customer bills and charge the customers’ bills the related national franchise tax
of 2% plus applicable local franchise tax instead. Moreover, any input VAT imposed by the Parent Company’s
suppliers are treated as part of cost of purchase starting March 21, 2022 (see Note 1).

Prepaid expenses consist of advance payments for business taxes, regulatory costs, insurance, interest, repairs
and maintenance, performance bond and employee health care expenses and other employee benefits, among
others.

Advances to suppliers, contractors, and deposits pertain to the Group’s advance payments for various contractual
projects and other advance payments for goods and services that can be recovered within one (1) year.

In 2022, the Group recognized provision for impairment loss on advances to suppliers, contractors and deposits
amounting to P= 138.07 million, presented under operating expenses in the consolidated profit or loss. Reversal of
impairment loss was recognized in 2023 amounting to P = 12.40 million. (see Note 18).

*SGVFS187515*
 - 59 -

9. Property, Plant and Equipment and Software

The rollforward analysis of this account follows:

2023
Plant
and Technical Office Furniture Transportation Leasehold Construction
Land Equipment and Equipment Equipment Improvements in Progress Software Total
Cost
Balance at beginning of year P
= 226,391,550 P
= 6,791,103,102 P
= 927,100,180 P
= 1,708,997,896 P
= 508,062,330 P
= 1,439,546,122 P
= 1,630,549,552 P
= 13,231,750,732
Additions 9,312,528 424,947,336 234,007,282 51,266,605 10,121,849 818,952,640 260,926,925 1,809,535,165
Transfers (Notes 6 and 10) – 887,717,991 3,576,538 1,241,518 47,687,458 (9,642,820) (3,580,207) 927,000,478
Disposals – (21,308,746) (13,484,977) (10,365,089) – – (80,392) (45,239,204)
Retirement – – (201,786) – – – (60,519) (262,305)
Balance at end of year 235,704,078 8,082,459,683 1,150,997,237 1,751,140,930 565,871,637 2,248,855,942 1,887,755,359 15,922,784,866
Accumulated depreciation, amortization, and impairment
Balance at beginning of year – 1,928,960,612 827,617,234 1,264,291,631 443,116,888 – 1,603,843,818 6,067,830,183
Depreciation and amortization (Note 18) – 205,631,445 187,369,454 175,470,624 43,602,929 – 164,673,601 776,748,053
Transfers – (677,485) 3,544,669 – (550,225) – (3,537,974) (1,221,015)
Disposals – (11,173,739) (13,483,638) (4,327,554) – – (80,392) (29,065,323)
Retirement – – (201,786) – – – (60,519) (262,305)
Balance at end of year – 2,122,740,833 1,004,845,933 1,435,434,701 486,169,592 – 1,764,838,534 6,814,029,593
Net book value P
= 235,704,078 P
= 5,959,718,850 P
= 146,151,304 P
= 315,706,229 P
= 79,702,045 P
= 2,248,855,942 P
= 122,916,825 P
= 9,108,755,273

2022
Plant
and Technical Office Furniture Transportation Leasehold Construction
Land Equipment and Equipment Equipment Improvements in Progress Software Total
Cost
Balance at beginning of year P
= 226,391,550 P
= 5,604,172,027 P
= 939,846,495 P
= 1,607,133,620 P
= 485,038,246 P
= 1,384,209,344 P
= 1,626,526,151 P
= 11,873,317,433
Additions – 1,185,060,594 5,603,335 105,185,584 12,903,989 70,339,345 10,138,560 1,389,231,407
Transfers – 2,233,185 541,267 – 12,223,098 (15,002,567) 5,017 –
Disposals – (362,704) (18,041,546) (3,321,308) (2,103,003) – (3,547,978) (27,376,539)
Retirement – – (849,371) – – – (2,572,198) (3,421,569)
Balance at end of year 226,391,550 6,791,103,102 927,100,180 1,708,997,896 508,062,330 1,439,546,122 1,630,549,552 13,231,750,732
Accumulated depreciation, amortization, and impairment
Balance at beginning of year – 1,728,733,050 795,997,397 1,032,380,166 406,332,269 – 1,571,170,668 5,534,613,550
Depreciation and amortization (Note 18) – 200,586,783 51,066,882 232,030,127 39,568,408 – 38,809,446 562,061,646
Transfers – 3,483 80,820 (118,662) 29,342 – 5,017 –
Disposals – (362,704) (18,678,494) – (2,813,131) – (3,569,115) (25,423,444)
Retirement – – (849,371) – – – (2,572,198) (3,421,569)
Balance at end of year – 1,928,960,612 827,617,234 1,264,291,631 443,116,888 – 1,603,843,818 6,067,830,183
Net book value P
= 226,391,550 P
= 4,862,142,490 P
= 99,482,946 P
= 444,706,265 P
= 64,945,442 P
= 1,439,546,122 P
= 26,705,734 P
= 7,163,920,549

*SGVFS187515*
 - 60 -

As of December 31, 2023 and 2022, noncash acquisitions of property, plant and equipment, amounted to
nil and P
= 282.31 million, respectively. In 2023, payments related to the portion of prior payable related to
acquisitions of property, plant and equipment amounted to P = 133.64 million.

Certain property, plant and equipment with a net book value of P

= 35.51 million was reclassified to SCA in 2023
(see Note 10). No reclassification to SCA and contract assets was made in 2022.

10. Service Concession Assets and Obligations

a. Service concession assets

The movements in this account follow:

2023 2022
Cost
Balance at beginning of year P
= 181,997,505,759 P
= 150,907,086,582
Additions:
Rehabilitation works 19,568,560,474 23,526,861,634
Concession fees 777,890,509 7,109,019,285
Local component cost 193,231,627 454,538,258
Transfers from property, plant and equipment (Note 9) 36,731,913 –
Balance at end of year 202,573,920,282 181,997,505,759
Accumulated amortization
Balance at beginning of year 36,932,300,208 34,521,890,810
Amortization 3,422,900,108 2,410,409,398
Transfers from property, plant and equipment (Note 9) 1,221,015 –
Balance at end of year 40,356,421,331 36,932,300,208
Net book value P
= 162,217,498,951 P
= 145,065,205,551

SCA consists of the present value of total estimated concession fee payments, including regulatory costs
and local component costs, of the Parent Company, Calasiao Water, Boracay Water, Calbayog Water, Clark
Water, Obando Water, Bulakan Water, Ilagan Water (septage management), South Luzon Water, Laguna
Water, and Aqua Centro (Lambunao Project) pursuant to the Group’s concession agreements, JVAs and
SMA; and the revenue from rehabilitation works which is equivalent to the related cost for the rehabilitation
works covered by the concession arrangements, JVAs and SMA.

In 2023, Parent Company, Calbayog Water and North Luzon Water transferred certain property, plant and
equipment to SCA with a net book value of P
= 35.51 million (see Note 9).

In 2019, MWSS along with the Parent Company signed the thirty (30)-year Wawa Bulk Water Agreement
with Wawa JVCo, Inc., which involves supply of 518 million liters per day of raw water from the Wawa and
Tayabasan Rivers. The first phase of the agreement will involve supply of 80 million liters per day of raw
water starting October 2022, while the second phase will supply the additional 438 million liters per day of
raw water by December 31, 2025.

On October 25, 2022, the construction of the Upper Wawa Dam was completed, and Wawa JVCo., Inc.
commenced the provision of an initial 80 million liters per day of raw water to the Parent Company. The
Parent Company accounts for the Wawa Bulk Water Agreement under the intangible asset model initially
recognizing SCA and SCO amounting to P = 6,762.50 million.

Contract assets shown as part of SCA arising from concession agreements consist of the cost of
rehabilitation works covered by the respective concession agreements, JVAs and SMAs of the Parent
Company, Calasiao Water, Boracay Water, Calbayog Water, Clark Water, Obando Water, Bulakan Water,
Ilagan Water, South Luzon Water, Laguna Water, Tagum Water, Cebu Water, and Aqua Centro (Lambunao
Project).

As of December 31, 2023 and 2022, noncash additions to service concession assets amounted to
P
= 3,770.71 million, and P
=12.59 million, respectively.

*SGVFS187515*
 - 61 -

As of December 31, 2023, 2022 and 2021, total interest and other borrowing costs capitalized as part of the
rehabilitation works amounted to P
= 3,418.21 million and P = 2,066.99 million and P= 1,626.57 million,respectively.
General borrowing cost amounted to P = 3,098.91 million, P
=1,756.86 million and P = 1,474.64 million, and
specific borrowing cost amounted to P= 319.30 million, P
= 1,881.14 million and P= 406.50 million as of December
31, 2023, 2022 and 2021, respectively. The capitalization rates used ranged from 2.50% to 5.70%, 0.91% to
3.36% and 0.87% to 9.37% in 2023, 2022 and 2021, respectively.

b. Service concession obligations

The breakdown of service concession obligations follows:

2023 2022
Current P
= 910,632,846 P
= 729,984,535
Noncurrent 15,214,188,022 15,313,404,443
P
= 16,124,820,868 P
= 16,043,388,978

MWSS Concession Fees

The aggregate concession fees of the Parent Company are equal to the sum of the following:

i. 10.00% of the aggregate Peso equivalent due under any MWSS loan which has been disbursed prior to
the Commencement Date, including MWSS loans for existing projects and the Umiray Angat
Transbasin Project (UATP), on the prescribed payment date;
ii. 10.00% of the aggregate Peso equivalent due under any MWSS loan designated for the UATP which
has not been disbursed prior to the Commencement Date, on the prescribed payment date;
iii. 10.00% of the local component costs and cost overruns related to the UATP;
iv. 100.00% of the aggregate Peso equivalent due under MWSS loans designated for existing projects,
which have not been disbursed prior to the Commencement Date and have been either awarded to third
party bidders or elected by the Parent Company for continuation;
v. 100.00% of the local component costs and cost overruns related to existing projects;
vi. Parent Company’s share in the repayment of MWSS loan for the financing of new projects; and
vii. one-half of MWSS annual corporate operating budget.

In March 2010, MWSS entered into a loan agreement with The Export-Import Bank of China to finance the
Angat Water Utilization and Aqueduct Improvement Project Phase II. Total loan facility amounted to
$116.60 million with a maturity of twenty (20) years including a five (5)-year grace period. The interest rate
is 3.00% per annum. MWSS subsequently entered into a MOA with the Parent Company and Maynilad for
the Parent Company and Maynilad to equally shoulder the repayment of the loan with such repayment to
form part of the concession fees.

On May 12, 2015, MWSS entered into a MOA with the Parent Company and Maynilad for the Angat Water
Transmission Improvement Project (Angat Transmission Project). The Angat Transmission Project aims to
improve the reliability and security of the raw water coming from the Angat Dam through the rehabilitation of
the transmission system from Ipo to La Mesa and the application of water safety, risk and asset
management plans. Subsequently, on May 27, 2016, MWSS entered into a loan agreement with Asian
Development Bank to finance the Angat Transmission Project. The loan amounted to US$123.30 million
with a maturity of twenty-five (25) years including a seven (7)-year grace period. As stipulated in the MOA,
the Parent Company and Maynilad shall shoulder equally the repayment of the loan and all reasonable
expenditures related to the Project with such payments to form part of the concession fees.

In 2016, the Parent Company paid MWSS P

= 500.00 million as compensation for additional water allocation in
the Angat reservoir.

In 2016, MWSS entered into a MOA with the Parent Company and Maynilad which was subsequently
amended in 2018 for the New Centennial Water Source - Kaliwa Dam Project (NCWS-KDP). The NCWS-
KDP aims to develop a new water source in order to meet the increasing water demand by constructing a
dam for MWSS service area’s domestic water supply.

In 2020, a supplemental MOA was entered into by MWSS with the Parent Company and Maynilad for the
separate loan to be obtained by MWSS to finance the construction of Aqueduct No. 7, which is a new and
seventh aqueduct downstream of Ipo Dam from Bigte Basin to Novaliches Portal that will convey the
additional output to further strengthen the reliability and adequacy of the water supply system. The loan
amounts to US$126.02 million. As stipulated in the MOA, all expenses to be incurred by the
Concessionaires in connection with the Angat Water Transmission Improvement Project and Aqueduct

*SGVFS187515*
 - 62 -

No. 7, including the amortization payment as well as the local counterpart funds, shall be part of the
Concessionaire’s respective business plans which shall be considered in the next rate rebasing exercise.

To partially finance the NCWS-KDP, MWSS entered into a Preferential Buyer’s Credit Loan Agreement with
The Export-Import Bank of China in 2018 amounting to US$211.21 million with a maturity of twenty (20)
years including a seven (7)-year grace period. As stipulated in the MOA, the Parent Company and Maynilad
shall shoulder equally the repayment of the loan and all reasonable expenditures related to the Project with
such payments to form part of the concession fees.

The schedule of undiscounted future concession fee payments of the Parent Company follows:

Foreign Currency-
Denominated Peso Loans/
Loans Project Local Total Peso
Year (Translated to US$) Support Equivalent*
2024 $9,134,071 P
= 395,714,907 P
= 901,468,418
2025 8,827,057 395,714,907 884,469,053
2026 8,369,580 395,714,907 859,138,552
2027 11,145,994 395,714,907 1,012,868,595
2028 10,876,913 395,714,907 997,969,580
2029 onwards 76,282,382 3,363,576,708 7,587,332,199
$124,635,997 P
= 5,342,151,243 P
= 12,243,246,397
*Peso equivalent is translated using the closing rate as of December 31, 2023 amounting to P
= 55.3700 to US$1.

CWD Concession Fees

Under Calasiao Water’s concession agreement with CWD, concession fees are based on a fixed schedule
of annual payments over the twenty-five (25) year concession period.

TIEZA Concession Fees

The aggregate concession fees pursuant to Boracay Water’s concession agreement with TIEZA is equal to
the sum of the following:

i. servicing the aggregate Peso equivalent of all liabilities of BWSS as of commencement date;
ii. 5.00% of the monthly gross revenue of Boracay Water, inclusive of all applicable taxes which are for
the account of Boracay Water; and
iii. payment of annual operating budget of the TIEZA-RO starting 2010. For 2010 and 2011, the amount
shall not exceed P = 15.00 million. For the year 2012 and beyond, Boracay Water shall pay P
= 20.00
million, subject to annual CPI adjustments.

CCWD Revenue Share

Under Calbayog Water’s JVA with CCWD, Calbayog Water is required to pay, on a monthly basis, an annual
revenue share, amounting to P = 18.00 million subject to an increase of P
= 1.00 million every five (5) years,
conditioned upon the approval by the CCWD BOD and LWUA on the increase in tariff rates for the relevant
tariff adjustment year. The revenue share for the duration of the appointment period follows:

Appointment Period Revenue Share

Years 1 to 5 P
= 18.00 million
Years 6 to 10 P
= 19.00 million
Years 11 to 25 P
= 20.00 million
Years 16 to 20 P
= 21.00 million
Years 21 to 25 P
= 22.00 million

Subject to the provision of the JVA on EPA, Calbayog Water shall increase the revenue share due to CCWD
in case of a corresponding increase in the government-mandated salary and benefits that may be
implemented during the appointment period of the JVA.

CDC Concession Fees

The aggregate concession fees pursuant to Clark Water’s concession agreement with CDC is equal to the
sum of the following:

i. annual franchise fee of P

= 1.50 million; and
ii. semi-annual rental fees of P= 2.77 million for leased facilities from CDC.

*SGVFS187515*
 - 63 -

As a result of the extension of the concession agreement of Clark Water, payment of rental fees on the CDC
existing facilities was extended by an additional fifteen (15) years from October 1, 2025 to October 1, 2040
(see Note 1).

OWD Concession Fees

The aggregate concession fee pursuant to Obando Water’s concession agreement with OWD is equal to the
sum of the following:

i. base concession fee which shall be used for operations of the OWD; and
ii. additional concession fee composed of amounts representing amortization payments for the
outstanding obligations of OWD (which includes OWD’s loan with LWUA) and 2.00% of the gross
annual receipts of Obando Water, representing franchise tax to be paid by the OWD.

On March 28, 2019, LWUA has approved a new loan repayment scheme of thirteen (13) years with OWD.
Upon initial payment, which shall not be later than May 15, 2019, LWUA shall no longer impose penalties
from OWD.

BuWD Concession Fees

The aggregate concession fee pursuant to Bulakan Water’s concession agreement with BuWD is equal to
the sum of the following:

i. base concession fee which shall be used for operations of the BuWD; and
ii. additional concession fees composed of:
 2.00% of the gross monthly water sales of Bulakan Water,
 one-time expenditures and payables applicable only for Year 1 of the concession agreement, and
 an amount equivalent to the monthly consumption of BuWD under a bulk water supply agreement
with Luzon Clean Water Development Corporation, including any minimum guaranteed volume
consumption.

Any loss or reduction in profit for any given year as a result of the operation of the facilities in the service
area of BuWD shall not in any way affect or reduce the payment of the base concession fee.

TnWD Fees
Under South Luzon Water’s JVA with TnWD, South Luzon Water is required to pay, on an annual basis, a
revenue share, amounting to P = 17.50 million subject to an increase of P
= 1.00 million every five (5) years,
conditioned upon the approval by the TnWD BOD and LWUA on the increase in tariff rates for the relevant
tariff adjustment year. The revenue share for the duration of the appointment period follows:

Appointment Period Revenue Share

Years 1 to 5 P
= 17.50 million
Years 6 to 10 P
= 18.50 million
Years 11 to 25 P
= 19.50 million
Years 16 to 20 P
= 20.50 million
Years 21 to 25 P
= 21.50 million

PGL Concession Fees

Under Laguna Water’s concession agreement with PGL, Laguna Water is required to pay concession fees
to PGL computed as a percentage of water sales as follows:

Operational Period Percentage of Water Sales

Years 1 to 5 4.00%
Years 6 to 25 3.00%

Seventy percent (70.00%) of the concession fees shall be applied against any advances made by Laguna
Water to PGL. The remaining thirty percent (30.00%) of the concession fees shall be payable annually thirty
(30) days after the submission of the audited financial statements by Laguna Water, starting on the first
operational period, which begins upon the expiration of the transition period.

*SGVFS187515*
 - 64 -

PAGWAD Revenue Share

Under Laguna Water’s JVA with PAGWAD, Laguna Water is required to pay, on a calendar year basis, an
annual revenue share, amounting to the higher of:

i. P
= 10.50 million for a twelve (12)-month period or the proportionate amount for those years with less than
twelve (12) months (the “base revenue share”); or
ii. seven percent (7.00%) of the annual gross operating revenues for the immediately preceding year
based on the audited financial statements (the “variable revenue share”).

The revenue share shall be payable by Laguna Water in advance at the start of the relevant year. The base
revenue share shall be payable within fifteen (15) calendar days from the start of the relevant year. In the
event the variable revenue share is higher than the base revenue share, the difference between the variable
revenue share and the base revenue share shall be payable to PAGWAD within fifteen (15) calendar days
after the approval of Laguna Water’s audited financial statements.

Subject to the provision of the JVA on EPA, Laguna Water shall increase the revenue share due to
PAGWAD in case of a corresponding increase in the government-mandated salary and benefits that may be
implemented during the period of the JVA.

On July 19, 2021 and February 20, 2020, the annual revenue share was increased to P = 12.00 million and
P
= 11.5 million, respectively, to provide additional provision for government mandated salary increases as
stated in Section 9.3.1 of its JVA. On October 11, 2021, revenue share was further increased to
P
= 12.50 million.

Municipalities of Sta. Barbara, San Fabian, and Manaoag Fees

Under North Luzon Water’s MOAs with the Municipalities of Sta. Barbara, San Fabian, and Manaoag, North
Luzon Water is required to pay a royalty amounting to:

Percentage of Gross
Municipality Sales*
Sta. Barbara Not exceeding 0.6%
San Fabian Not exceeding 0.5%
Manaoag Not exceeding 0.5%
*Gross sales from water supply or distribution less VAT

LWD Fees
Under Aqua Centro’s JVA with LWD, Aqua Centro is required to pay, on a monthly basis, an annual revenue
share, amounting to P = 15.75 million, conditioned upon the approval by the LWD BOD and LWUA on the
increase in tariff rates for the relevant tariff adjustment year. The revenue share shall no longer be
guaranteed and shall be subject to adjustment by mutual agreement and discussion of Aqua Centro and
LWD if the tariff adjustment is not secured or obtained from LWUA. The revenue share for the duration of
the appointment period follows:

Appointment Period Revenue Share

Years 1 to 5 P
= 15.75 million
Years 6 to 10 P
= 17.50 million
Years 11 to 25 P
= 17.50 million
Years 16 to 20 P
= 17.50 million
Years 21 to 25 P
= 20.65 million
Years 26 to 30 P
= 25.75 million
Years 31 to 35 P
= 35.33 million

Subject to the provision of the JVA on EPA, Aqua Centro shall increase the revenue share due to LWD in
case of a corresponding increase in the government-mandated salary and benefits that may be implemented
during the appointment period of the JVA.

The Group’s interest expense on its service concession obligations amounted to P = 1,135.45 million,
P
= 898.64 million, and P
= 671.37 million in 2023, 2022, and 2021, respectively (see Note 18).

*SGVFS187515*
 - 65 -

11. Leases

The Group as a Lessee

The Group leases office space, storage and plant facilities, land, and right-of-way wherein it is the lessee. The
terms of the leases range from one year or until the end of the concession period.

The rollforward analysis of the Group’s right-of-use assets follows:

2023
Office Space Storage and Land and
and Parking Plant Facilities Right-of-Way Total
Cost
Balance at beginning of year P
= 456,181,916 P
= 216,637,566 P
= 102,235,248 P
= 775,054,730
Additions 10,225,854 – – 10,225,854
Balance at end of year 466,407,770 216,637,566 102,235,248 785,280,584
Accumulated amortization

Balance at beginning of year 222,462,322 105,048,598 21,407,615 348,918,535

Amortization 59,956,431 40,675,076 7,264,676 107,896,183
Balance at end of year 282,418,753 145,723,674 28,672,291 456,814,718
Net book value P
= 183,989,017 P
= 70,913,892 P
= 73,562,957 P
= 328,465,866

2022
Office Space Storage and Land and
and Parking Plant Facilities Right-of-Way Total
Cost
Balance at beginning of year P
= 307,868,507 P
= 204,735,149 P
= 102,235,248 P
= 614,838,904
Additions 158,401,269 11,902,417 – 170,303,686
Pre-terminations (10,087,860) – – (10,087,860)
Balance at end of year 456,181,916 216,637,566 102,235,248 775,054,730
Accumulated amortization

Balance at beginning of year 159,623,056 86,324,095 19,195,988 265,143,139

Amortization 66,229,007 18,724,503 2,211,627 87,165,137
Pre-terminations (3,389,741) – – (3,389,741)
Balance at end of year 222,462,322 105,048,598 21,407,615 348,918,535
Net book value P
= 233,719,594 P
= 111,588,968 P
= 80,827,633 P
= 426,136,195

In 2022, the Group pre-terminated certain office space and parking lease agreements which resulted to a loss in
pre-termination amounting to ₱2.83 million. Loss on pre-terminations is presented under other income (losses) in
the consolidated profit or loss (see Note 18).

Amortization of plant facilities used for construction amounting to ₱0.14 million and ₱13.84 million were
capitalized in 2023 and 2022, respectively.

The rollforward analysis of the Group’s lease liabilities follows:

2023 2022
Balance at beginning of year P
= 436,347,432 P
= 361,718,145
Additions 10,225,854 170,303,686
Payments (133,017,393) (105,995,513)
Accretion 18,821,865 14,192,393
Pre-terminations – (3,871,279)
Balance at end of year P
= 332,377,758 P
= 436,347,432
Current portion P
= 117,029,647 P
= 120,860,143
Noncurrent portion P
= 215,348,111 P
= 315,487,289

The maturity analysis of lease liabilities is disclosed in Note 28.

*SGVFS187515*
 - 66 -

The following are the amounts recognized in profit or loss:

2023 2022 2021

Depreciation expense of right-of-use
assets (Note 18) P
= 107,761,176 P
= 73,326,708 P
= 74,941,289
Interest expense on lease liabilities
(Note 18) 18,821,865 14,192,393 20,131,539
Expenses relating to short-term
leases and lease of low-value
assets (Note 18) 24,235,210 26,121,109 22,475,227
Loss on pre-termination (Note 18) – 2,826,840 –
150,818,251 P
= 116,467,050 P
= 117,548,055

12. Investments in Associates

This account consists of the following:

2023 2022
Acquisition cost, net P
= 13,031,980,437 P
= 13,031,980,437
Accumulated equity in net earnings (losses) (2,007,769,733) 1,864,920,588
Cumulative translation adjustments 164,623,294 539,609,753
Accumulated equity in other comprehensive gain / (loss) 2,734,309 (1,906,738)
P
= 11,191,568,307 P
= 15,434,604,040

Details of the Group’s investments in associates are discussed below.

Thu Duc Water

Thu Duc Water is incorporated in the Socialist Republic of Vietnam with principal place of business in Ho Chi
Minh City, Vietnam.

On October 12, 2011, TDWH and Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) entered
into a share sale and purchase agreement whereby CII will sell to TDWH its 49.00% interest (equivalent to
2.45 million common shares) in Thu Duc Water. On December 8, 2011, TDWH completed the acquisition of
CII’s interest in the common shares of Thu Duc Water after which TDWH obtained significant influence in Thu
Duc Water.

The acquisition cost of the investment amounted to P = 1,788.00 million (VND857.50 billion). The investments in
associate account includes a notional goodwill amounting to P = 1,455.51 million (VND698.04 billion) arising from
the acquisition of shares of stock in Thu Duc Water.

The financial information of Thu Duc Water as of and for the years ended December 31, 2023 and 2022 follows:

2023 2022
Current assets P
= 254,529,744 P
= 200,235,491
Noncurrent assets 4,168,630,712 4,167,596,264
Current liabilities 263,580,669 561,415,752
Noncurrent liabilities 207,556,319 140,207,322
Revenue 1,016,503,323 995,259,077
Net income 663,141,317 643,406,598
The conversion rates used were =
P0.0023 and P
= 0.0024 to VND1.00 as of December 31, 2023 and 2022, respectively.

The share of the Group in the net income of Thu Duc Water for the years ended December 31, 2023, 2022 and
2021 amounted to P= 324.94 million, P
= 315.27 million, and P
= 275.83 million, respectively.

Kenh Dong Water

Kenh Dong Water is incorporated in the Socialist Republic of Vietnam with principal place of business in Ho Chi
Minh City, Vietnam.

On May 17, 2012, the Parent Company, through KDWH, entered into a sale and purchase agreement with CII for
the purchase of 47.35% of CII’s interest in Kenh Dong Water. The payment for the shares was done in two
tranches, with additional contingent considerations subject to the fulfillment of certain conditions precedent, for a
total purchase price of P
= 1,659.89 million.

*SGVFS187515*
 - 67 -

As of December 31, 2012, considerations paid by the Parent Company for its investment in Kenh Dong Water
amounted to P= 1,571.92 million (VND785.24 billion). The share purchase transaction was completed on
July 20, 2012 and KDWH gained significant influence in Kenh Dong Water.

In 2013, Kenh Dong Water finalized its purchase price allocation which resulted in a final notional goodwill
amounting to P
= 1,373.57 million (VND650.85) billion.

The financial information of Kenh Dong Water as of and for the years ended December 31, 2023 and 2022
follows:

2023 2022
Current assets P
= 722,521,066 P
= 609,273,010
Noncurrent assets 2,534,877,131 2,544,866,686
Current liabilities 77,819,240 60,049,879
Noncurrent liabilities 26,630,312 45,895,206
Revenue 761,244,247 745,097,402
Net income 458,060,397 416,892,457
The conversion rates used were =
P0.0023 and P
= 0.0024 to VND1.00 as of December 31, 2023 and 2022, respectively.

The share of the Group in the net income of Kenh Dong Water for the years ended December 31, 2023, 2022,
and 2021 amounted to P= 216.89 million, P
= 197.40 million, and P
= 165.48 million, respectively.

The Group’s share in net income from its investments in Thu Duc Water and Kenh Dong Water resulted from
concession arrangements with the People’s Committee of Ho Chi Minh City (the Grantor). These concession
arrangements are accounted for under the Financial Asset model of IFRIC 12 as these associates have an
unconditional contractual right to receive fixed and determinable amounts of payment for its construction services
at the direction of the Grantor.

Saigon Water
Saigon Water is incorporated in the Socialist Republic of Vietnam with principal place of business in Ho Chi Minh
City, Vietnam. Saigon Water is listed in the Ho Chi Minh City Stock Exchange.

On October 8, 2013, the Parent Company, through MWSAH, entered into an Investment Agreement for the
acquisition of a 31.47% stake in Saigon Water. The acquisition cost of the investment amounted to
P
= 642.76 million (VND310.45 billion). The share subscription transaction was completed on October 8, 2013 and
MWSAH gained significant influence in Saigon Water.

In 2014, MWSAH finalized the notional goodwill amounting to P =293.65 million (VND139.51 billion) arising from
the acquisition of shares of stock in Saigon Water by the Group as of December 31, 2013. There were no
adjustments made to the fair values of the net assets as of acquisition date.

On June 21, 2017, MWSAH subscribed to an additional 6.15 million primary shares of Saigon Water for
P
= 229.16 million (VND103.87 billion), which increased MWSAH’s holding in Saigon Water’s outstanding capital
stock from 31.47% to 37.99%. The notional goodwill arising from the additional subscription amounted to
P
= 42.05 million (VND19.06 billion).

As of December 31, 2023 and 2022, MWSAH’s allowance for impairment on investment in Saigon Water
amounted to P
= 144.03 million.

The financial information of Saigon Water as of and for the years ended December 31, 2023 and 2022 follows:

2023 2022
Current assets P
= 355,055,339 P
= 323,460,628
Noncurrent assets 4,061,246,077 3,643,025,519
Current liabilities 1,741,912,538 1,057,488,309
Noncurrent liabilities 1,071,818,315 1,145,408,657
Revenue 774,627,966 349,762,328
Net loss (105,278,100) (207,000,473)
The conversion rates used were =
P0.0023 and P
= 0.0024 to VND1.00 as of December 31, 2023 and 2022, respectively.

*SGVFS187515*
 - 68 -

The share of the Group in the consolidated net loss of Saigon Water for the years ended December 31, 2023,
2022 and 2021 amounted to P =40.00 million, P
= 78.64 million and P
= 60.78 million, respectively. The closing share
price of Saigon Water as of December 31, 2023 and December 31, 2022 were VND14,700 per share and
VND15,000 per share, respectively.

Cu Chi Water Supply Sewerage Company Ltd. (Cu Chi Water)

Cu Chi Water is incorporated in the Socialist Republic of Vietnam with principal place of business in Ho Chi Minh
City, Vietnam. As of December 31, 2022, Cu Chi has no commercial operations.

On October 10, 2015, MWSAH executed a Capital Transfer Agreement with Saigon Water for the acquisition of
24.50% of the charter capital of Cu Chi Water in the total amount of P
= 318.16 million (VND154.35 billion).
Pursuant to the Capital Transfer Agreement, Saigon Water granted a put option to MWSAH and VIAC (No 1)
Limited Partnership, another party to the agreement, which option can be exercised upon the occurrence of
certain trigger events. On October 29, 2021, the Capital Transfer Agreement has been extended for one (1)
year. As of December 31, 2022 and 2021, no trigger event has occurred and the value of the put option was
determined to be nil.

In 2020, MWSAH recognized impairment on its investment in Cu Chi Water amounting to P

= 336.67 million due to
the current and prospective financial performance and condition of Cu Chi Water.

The financial information of Cu Chi Water as of and for the years ended December 31, 2023 and 2022 follows:

2023 2022
Current assets P
= 93,613 P
= 93,056
Noncurrent assets 1,437,572,742 1,486,493,136
Current liabilities 285,189 259,513
The conversion rates used were =
P0.0023 and P
= 0.0024 to VND1.00 as of December 31, 2023 and 2022, respectively.

On January 9, 2024, MWSAH’s BOD approved the sale of its investment in Cu Chi to Saigon Water in exchange
for shares in Saigon Water amounting to VND 154 billion representing 7,529,268 shares. On January 16, 2024,
the divestment to the buyer was completed.

PT. Sarana Tirta Ungaran (PT STU)

PT STU is incorporated in Indonesia with principal place of business in Semarang, Indonesia. PT STU is a bulk
water supply company servicing Perusahaan Daerah Air Minum (PDAM) Kabupaten Semarang and industrial
customers in Bawen, located in Ungaran area of Semarang Regency, Central Java Province, with a capacity of
21.50 million liters per day.

On March 6, 2018, PTMWI signed a SPA with PT. Triguna Rapindo Mandiri to acquire 4,478 ordinary shares in
PT STU to own 20.00% of its outstanding capital stock.

The financial information of PT STU as of and for the years ended December 31, 2023 and 2022 follows:

2023 2022
Current assets P
= 80,556,230 P
= 70,045,408
Noncurrent assets 147,088,053 127,298,312
Current liabilities 7,194,293 6,019,333
Revenue 93,361,081 98,803,572
Net income 4,952,927 714,458
The conversion rates used were P
= 0.0036 to IDR1.00 as of December 31, 2023 and 2022.

The acquisition cost of the investment amounted to P

= 37.00 million (IDR10.00 billion). The investment in
associate account includes a notional goodwill amounting to P
= 1.01 million (IDR295.46 million) arising from the
acquisition of shares of stock in PT STU. The share in the net identifiable assets of PT STU on the date of
acquisition amounted to P =35.91 million.

The share of the Group in the net income of STU for the year ended December 31, 2023, 2022 and 2021
amounted to P= 1.00 million, P
= 0.14 million and P
=3.02 million, respectively.

Eastern Water Resources Development and Management Public Company Limited (East Water)
East Water is incorporated in Thailand with principal place of business in Bangkok, Thailand. East Water is
listed in the Stock Exchange of Thailand.

*SGVFS187515*
 - 69 -

On February 19, 2018, the Parent Company signed a SPA with Electricity Generating Public Company Limited
(EGCO) to acquire EGCO’s 18.72% equity in East Water. East Water is engaged in the provision of raw water
and tap water since 1992 in the eastern seaboard of Thailand.

On March 14, 2018, MWTC acquired 311.44 million ordinary shares in East Water representing 18.72% equity of
East Water.

The financial information of East Water as of and for the years ended December 31, 2023 and 2022 and follows:

2023 2022
Current assets P
= 3,990,200,744 P
= 927,064,222
Noncurrent assets 42,417,023,784 60,669,069,265
Current liabilities 5,053,766,660 4,807,208,348
Noncurrent liabilities 21,494,193,653 20,900,091,064
Revenue 5,153,778,052 5,068,442,282
Net income (loss) (289,792,774) 321,619,039
Other comprehensive income (loss) 2,734,309 (1,906,738)
The conversion rates used was P
= 1.6102 and P
= 1.6052 to THB1.00 as of December 31, 2023 and 2022, respectively.

The acquisition cost of the investment amounted to P

= 8,834.04 million (THB5.29 billion). As of December 31,
2023 and 2022, the investment in associate account includes a notional goodwill amounting to P = 153.10 million
and P
= 1,304.47 million, respectively.

In 2023, MWTC recognized impairment on its investment in East Water amounting to P = 4,063.26 million (shown
as part of equity in net losses) based on current operating and market conditions and our outlook on this
investment. (see Notes 3 and 18).

Key assumptions used to determine the value in use are discount rates including cost of debt and cost of capital
and growth rates.

Discount Rates
The discount rate used reflects current market assessments of the time value of money and the risks specific to
the asset. The Group used discount rates based on the industry’s weighted average cost of capital (WACC). The
rates used to discount the future cash flows are based on risk-free interest rates in the relevant markets taking into
consideration the debt premium, market risk premium, gearing, corporate tax rate and asset betas. Management
assumed a pre-tax discount rate of 6.8%.

Revenues
Average growth rates in revenues are based on East Water’s expectation of market developments and the changes
in the environment in which it operates. East Water’s anticipated revenue growth of 1.2% within the forecast
period, based on past historical performance as well as expectations on the operating results of the business. On
the other hand, the perpetual growth rate used to compute for the terminal value is based on the forecasted long-
term growth of the economy in which the business operates.

The share of the Group in the net income (loss) of East Water, for the years ended December 31, 2023, 2022
and 2021, amounted to P = 4,117.51 million, (inclusive of impairment loss of P
= 4,063.26 million), P
= 63.22 million, and
P
= 157.86 million, respectively. The closing share price of East Water as of December 28, 2023 and December 29,
2022 were THB4.18 per share and THB5.30 per share, respectively.

IWP
IWP is incorporated in Saudi Arabia with principal place of business in the city of Madinah, Kingdom of Saudi
Arabia. IWP is a mixed capital limited liability company incorporated under the laws of the Kingdom of Saudi
Arabia by Saur Saudi Arabia Ltd., Miahona Company, and MWAP with equity shareholdings of 40.00%, 40.00%,
and 20.00%, respectively.

The financial information of IWP as of and for the years ended December 31, 2023 and 2022 follows:

2023 2022
Current assets P
= 500,023,490 P
= 328,597,147
Noncurrent assets 2,351,043 5,436,295
Current liabilities 132,476,678 57,222,927
Noncurrent liabilities 67,580,936 69,316,728
Revenue 671,123,209 625,996,738
Net income 134,963,776 56,624,357
The conversion rate used was P
= 14.82 and P
= 14.93 to SAR1.00 as of December 31, 2023 and 2022, respectively.

*SGVFS187515*
 - 70 -

The share of the Group in the net income of IWP for the years ended December 31, 2023, 2022 and 2021,
amounted to P= 27.00 million, P
= 11.32 million and P
= 28.05 million, respectively.

IWP2
On January 27, ,2022, IWP2 was incorporated with MWAP, Saur, and Miahona owning 30.00%, 35.00%, and
35.00%, respectively. On April 1, 2022, IWP2 officially commenced the implementation of the MOMC.

The financial information of IWP as of and for the years ended December 31, 2023 and 2022 follows:

2023 2022
Current assets P
= 406,812,169 P
= 375,459,625
Noncurrent assets 4,104,506 886,920
Current liabilities 249,780,494 290,690,839
Noncurrent liabilities 44,649,681 39,500,135
Revenue 496,059,812 300,399,990
Net income 70,977,703 37,850,126
The conversion rate used was P
= 14.82 and P
= 14.93 to SAR1.00 as of December 31, 2023 and 2022, respectively.

The share of the Group in the net income of IWP2 for the years ended December 31, 2023, 2022 and 2021,
amounted to P= 21.29 million, P
= 11.36 million and nil, respectively.

The reconciliation of the net assets of the associates to the carrying amounts of the investments in associates
recognized in the consolidated financial statements follows:

December 31, 2023

Proportionate Share in Net Notional
Net Assets of Ownership Identifiable Goodwill
Associate Associate* Interest Assets (Impairment) Carrying Values
Thu Duc Water P
= 3,952,023,469 49.00% P= 1,936,491,500 P
= 1,592,582,991 P
= 3,529,074,491
Kenh Dong Water 3,152,948,645 47.35% 1,492,921,183 1,484,918,456 2,977,839,639
Saigon Water 1,602,570,564 37.99% 608,816,557 217,624,383 826,440,940
Cu Chi Water 1,437,381,166 24.50% 352,158,386 (352,158,386) –
PT STU 220,449,990 20.00% 44,089,998 1,059,644 45,149,642
East Water 19,859,264,215 18.72% 3,717,654,261 – 3,717,654,261
IWP 302,316,919 20.00% 60,463,384 – 60,463,384
IWP2 116,486,500 30.00% 34,945,950 – 34,945,950
Total P
= 30,643,441,468 P
= 8,247,541,219 P
= 2,944,027,088 P
= 11,191,568,307

December 31, 2022

Proportionate Share in Net Notional
Net Assets of Ownership Identifiable Goodwill
Associate Associate* Interest Assets (Impairment) Carrying Values
Thu Duc Water P
= 3,666,208,681 49.00% P= 1,796,442,254 P
= 1,646,813,416 P
= 3,443,255,670
Kenh Dong Water 3,048,194,611 47.35% 1,443,320,148 1,535,482,703 2,978,802,851
Saigon Water 1,763,589,182 37.99% 669,987,530 225,034,900 895,022,430
Cu Chi Water 1,486,326,679 24.50% 364,150,036 (364,150,036) –
PT STU 191,324,387 20.00% 38,264,877 1,056,541 39,321,418
East Water 35,888,834,075 18.72% 6,718,389,739 1,304,466,504 8,022,856,243
IWP 207,493,786 20.00% 41,498,757 – 41,498,757
IWP2 46,155,571 30.00% 13,846,671 – 13,846,671
Total P
= 46,298,126,972 P
= 11,085,900,012 P
= 4,348,704,028 P
= 15,434,604,040
*Attributable to common shareholders.

The rollforward of acquisition cost follows:

2023 2022
Balance at beginning of year P
= 13,031,980,437 P
= 13,029,916,837
Additions – 2,063,600
Balance at end of year P
= 13,031,980,437 P
= 13,031,980,437

The rollforward of accumulated equity in net earnings follows:

2023 2022
Balance at beginning of year P
= 1,864,920,588 P
= 1,788,112,824
Equity in net earnings (loss) (3,561,491,909) 520,067,157
Dividend income (311,198,412) (443,259,393)
Balance at end of year (P
= 2,007,769,733) P
= 1,864,920,588

*SGVFS187515*
 - 71 -

13. Other Noncurrent Assets

This account consists of:

2023 2022
Advances to contractors P
= 4,762,241,194 P
= 3,104,429,504
Deferred FCDA 2,631,234,667 2,654,588,708
Derivative assets 391,839,337 2,295,669,766
Deposits 554,506,907 475,376,668
Escrow fund 300,000,000 300,000,000
Water rights 192,802,742 192,802,742
Net input VAT 117,582,941 161,742,070
Receivable from Ayala Multi-Purpose Cooperative (AMPC) 41,981,977 43,272,975
Miscellaneous 51,509,563 4,394,706
P
= 9,043,699,328 P
= 9,232,277,139

Advances to contractors are advance payments for the construction of the Group’s property and equipment and
service concession assets. These are being recouped for more than one (1) year against progress billings
based on contract provisions.

Deferred FCDA refers to the net unrecovered amounts from (amounts for refund to) customers for realized
losses (gains) from payments of foreign loans based on the difference between the drawdown or rebased rate
versus the closing rate at payment date. This account also covers the unrealized gains or losses from loan
revaluations (see Note 1).

Deposits pertain to those made for land acquisition, for leased properties, for environmental guaranty funds, and
for guaranty deposits with Manila Electric Company for electric connections and its related deferred charges.

Derivative assets consist of principal only swap and currency option agreements used to hedge the Parent
Company’s exposure to foreign currency risk on its long-term debt. On April 19, 2023, the Parent Company
initially settled the 26% portion of the hedged EUR120 million Euro-loan principal only swap resulting to
derecognition of derivative asset amounting to P = 511.74 million. On August 10, 2023, the Parent Company
unwound the remaining derivative asset related to principal only swap resulting to derecognition amounting to
P
= 1,263.52 million, derecognition of OCI amounting to P = 1,557.28 million. The initial settlement and unwinding of
the remaining portion resulted to P = 22.0 million and P
= 60.04 million realized forex gain and hedging costs,
respectively.

Water rights pertains to the rights to draw water from the Luyang River, Pampanga River, Abacan River, Pasig-
Potrero River, Agno River, and Cagayan River.

On August 22, 2012, the NWRB approved the assignment of Water Permit No. 16241 from Central Equity
Ventures Inc. (now Stateland Inc.) to MW Consortium which MW Consortium allows Cebu Water to use for its
project. As of December 31, 2023 and 2022, Cebu Water’s water right amounted to P
= 45.00 million.

MWPVI incurred costs to acquire conditional water permits from the NWRB amounting to P = 10.56 million in 2022,
nil in 2021 and P
= 137.25 million in 2020. A conditional water permit is necessary prior to the issuance of the water
permit by NWRB subject to submission of certain requirements, including plans and specifications for the
diversion works, pump structure, water measuring device and water distribution system, and environmental
compliance certification by the DENR, among others. On April 23, 2018, the NWRB granted MWPVI the permit
to use the water from the Pampanga River and on September 24, 2018, granted permits to use the water from
the Abacan River and Pasig-Potrero River which superseded the conditional water permits granted to MWPVI on
April 20 and September 20, 2017, respectively. On August 27, 2019, the NWRB granted MWPVI the permit to
use water from the Agno River which superseded the conditional water permit granted on March 21, 2018.
On February 11, 2022, NWRB approved and issued the final water permit in Cagayan River.

Escrow fund was established by Laguna Water to facilitate the repurchase of its redeemable preferred shares to
comply with the pertinent rules of the Securities and Exchange Commission (SEC).

Receivable from AMPC pertains to the term loan and credit line facility agreement.

Miscellaneous noncurrent assets include Cebu Water’s advances to the Carmen Development Fund for its
permit to extract water at the Carmen property in Cebu, long-term prepayments, time deposits with maturities of
more than one (1) year and MWAP’s receivable from IWP2 as shareholder loans including interests.

*SGVFS187515*
 - 72 -

14. Accounts and Other Payables and Contract Liabilities

a. Accounts and other payables

This account consists of:

2023 2022
Trade payables P
= 10,060,590,505 P
= 10,521,893,884
Accrued expenses:
Utilities 553,544,001 655,013,864
Salaries, wages, and employee benefits 517,739,970 501,246,227
Repairs and maintenance 416,189,530 507,490,577
Management and professional fees 333,271,717 486,183,203
Water service connections 112,857,935 80,605,111
Contractual services 109,339,568 339,257,679
Occupancy costs (Note 25) 84,945,362 109,915,745
Wastewater costs 48,597,118 103,739,716
Water treatment chemicals 38,576,534 13,707,201
Water tankering and bulk water costs 25,270,206 14,670,656
Printing and communication 14,137,807 12,509,368
Rental of equipment 4,310,713 2,943,196
Collection fees 3,631,093 39,894,188
Miscellaneous 42,579,633 152,853,334
Contractors’ payable 4,948,731,350 1,311,654,342
Interest payable (Note 15) 1,418,719,426 1,208,142,266
Others 28,040,501 132,799,001
P
= 18,761,072,969 P
= 16,194,519,558

Trade payables and accrued expenses are non-interest bearing and are normally settled on fifteen (15) to
sixty (60)-day terms.

Miscellaneous accrued expenses include accruals for advertising, transportation and travel, and supplies.

Contractors’ payable pertains to the accrual of expenses which requires the Group to pay the contractor
based on progress billings. Contracts payable are normally settled within one (1) year.

Interest payable pertains to the unpaid portion of interest arising from the long-term debts of the Group.

Other payables are non-interest bearing and are normally settled within one (1) year.

b. Contract liabilities

This account consists of:

2023 2022
Supervision fees P
= 387,658,147 P
= 345,644,195
Connection fees - current 1,912,823 1,506,299
Current portion 389,570,970 347,150,494

Supervision fees P
= 674,592,877 P
= 391,034,621
Connection fees 246,826,685 199,077,962
Noncurrent portion 921,419,562 590,112,583
P
= 1,310,990,532 P
= 937,263,077

Contract liabilities from supervision fees consist of advance customer payments for the provision of design
and project management services in the development of water and used water facilities and for future water
service. Contract liabilities are reclassified to “Supervision fees” under “Other operating income” upon
completion of performance milestones for these services.

Contract liabilities from connection fees pertain to customer payments for the set-up of a connection from
the customer’s establishment to the Group’s water or used water network. These are initially recognized at
the time of receipt of customer payments and reclassified to “Connection fees from water and service
connections” under “Other operating income” upon provision of the related water and used water services to
customers.

*SGVFS187515*
 - 73 -

15. Long-term Debt

a. Domestic Subsidiaries Short-term debt -

Metro Ilagan’s loan agreement with Philippine National Bank (PNB)

On July 10, 2023, Meto Ilagan Water obtained a P = 150.00 million Omnibus Line and a P
= 10.00 million Bills
Purchase Line with PNB. The Omnibus Line has sub-facilities for short-term loan lines and standby line
credit. The proceeds of the loan will be used to bridge funding for the Metro Ilagan Water project.
During the last quarter of 2023, Metro Ilagan Water obtained various short-term loans from PNB
aggregating to P = 135.0 million with an interest rate ranging from 6.75% to 7.00% and will mature in the
first quarter of 2024.

b. Long-term debt

This account consists of:

2023 2022
Parent Company loans:
USD bonds:
US$500.00 million sustainability bonds P
= 27,226,738,326 P
= 27,365,197,059
USD loans:
MWMP Loan 5,734,950,932 6,200,997,558
European (EUR) loan:
EUR250.00 million Loan 3,519,836,009 7,089,211,523
PHP loans:
P= 5.00 billion PNB Loan 2,365,811,796 2,861,810,699
P= 5.00 billion BDO Loan 4,982,808,371 4,975,375,676
P= 15.00 billion Chinabank Loan 14,903,231,775 11,415,727,234
P= 3.00 billion Landbank Loan 2,977,493,220 –
P= 7.00 billion Landbank Loan 3,473,707,741 –
P= 10.00 billion Metrobank Loan 8,932,635,710 –
Subsidiaries’ loans:
Thailand Baht (THB) loan:
THB5.30 billion MWTC Loan 8,488,482,165 8,494,487,213
Canadian Dollar (CAD) loan:
CAD0.87 million Laguna Water Loan 36,669,405 36,002,957
PHP loans:
P= 0.50 billion Laguna Water DBP Loan 286,342,198 315,673,454
P= 0.83 billion Laguna Water DBP Loan 491,493,092 541,838,041
P= 2.50 billion Laguna Water SBC Loan 1,340,819,490 1,531,643,700
P= 2.50 billion Laguna Water BPI Loan 1,027,034,305 1,204,874,998
P= 1.60 billion Laguna Water BPI Loan 694,905,499 –
P= 0.50 billion Boracay Water DBP-SBC Loan 292,604,226 292,310,605
P= 0.50 billion Boracay Water DBP-SBC Loan 313,075,737 312,749,030
P= 0.65 billion Boracay Water DBP-SBC Loan 538,351,832 537,678,258
P= 2.40 billion Boracay Water BPI Loan 1,499,827,683 1,509,874,155
P= 1.15 billion Clark Water RCBC Loan 644,144,709 739,198,655
P= 0.54 billion Clark Water DBP Loan 454,353,599 498,459,351
P= 1.53 billion Clark Water BPI Loan 367,152,059 –
P= 10.00 billion MWPVI Loan 7,413,755,414 7,326,693,405
P= 0.45 billion Tagum Water PNB Loan 293,309,580 326,704,807
P= 0.15 billion Tagum Water PNB Loan 114,132,723 126,917,482
P= 0.23 billion Aqua Centro BPI Loan 231,710,323 166,969,467
P= 0.47 billion South Luzon Water BPI Loan 323,075,648 168,914,970
P= 0.39 billion Calbayog Water BPI Loan 148,997,580 148,875,000
P= 0.20 billion Bulakan Water BPI Loan 130,000,000 –
P= 0.80 billion Cebu Water DBP Loan – 481,599,335
99,247,451,147 84,669,784,632
Less current portion 16,971,501,294 6,024,171,860
P
= 82,275,949,853 P
= 78,645,612,772

*SGVFS187515*
 - 74 -

Unamortized debt discounts and issuance costs of the Group’s long-term debt are as follows:

2023 2022
USD loans P
= 490,354,488 P
= 548,979,418
EUR loan 12,837,491 57,328,477
THB loan 45,437,038 13,192,692
PHP loans 304,215,894 222,179,220
P
= 852,844,911 P
= 841,679,807

The rollforward analysis of unamortized debt discounts and issuance costs of long-term debt follows:

2023 2022
Balance at beginning of year P
= 841,679,807 P
= 816,734,664
Additions 167,091,792 123,482,841
Amortization (Note 18) (163,293,338) (159,968,195)
Foreign exchange adjustments 7,366,650 61,430,497
Balance at end of year P
= 852,844,911 P
= 841,679,807

Interest expense on short and long-term debt amounted to P = 2,427.79 million, P

= 1,566.88 million, and
P
= 1,620.83 million in 2023, 2022, and 2021, respectively (see Note 18).

All proceeds from loan drawdowns of the Parent Company were used for the East Zone business.

Parent Company Bonds

US$500.00 million sustainability bonds
On July 22, 2020, the Parent Company announced its plan to issue an offering of USD-denominated senior
unsecured notes, which qualified as ASEAN sustainability bonds. Proceeds from the issuance of the bond were
intended to refinance debt and finance programmed capital expenditures for 2020 to 2021 of the East Zone,
pursuant to the Sustainability Financing Framework (SFF) which the Parent Company established; proceeds are
targeted towards financing projects related to (1) Sustainable water and wastewater management, (2) Terrestrial
and aquatic biodiversity conservation, and (3) Affordable basic infrastructure categories. The Parent Company’s
SFF is aligned with the Green Bond Principles 2018 and Social Bond Principles 2018 and likewise complies with
the ASEAN Sustainability Bond Standards 2018 and SEC Memorandum Circular No. 8, series of 2019.

On July 23, 2020, the Parent Company successfully issued the US$500.00 million ASEAN sustainability bonds,
debuting in the international debt capital markets. The Parent Company is the first Philippine Corporate to issue
an ASEAN sustainability bond. Equally important, this issuance is the single largest green, social or
sustainability bond issued by a listed private water utility in Asia.

The ten (10)-year bond was priced at 99.002 with a coupon rate of 4.375% p.a. payable in equal installments
semi-annually in arrears, on January 30 and July 30 of each year. The bonds will be redeemed at their principal
amount on July 30, 2030 unless previously redeemed or repurchased and cancelled as provided in the following
conditions:

Gross-up Event
 If a Gross-up Event occurs, the Parent Company may redeem the Notes (in whole but not in part) at
100% of the principal amount of the Notes plus any accrued but unpaid interest, on the giving of not
less than 30 and not more than 60 calendar days’ irrevocable notice of redemption to the Noteholders.

Change of Control Event

 Following the occurrence of a Change of Control triggering event, each bondholder will have a right at
such bondholder’s option to require the Parent Company to redeem in whole but not in part such
bondholder’s notes on the change of control triggering event put date at 101% of the principal amount
plus any accrued but unpaid interest.

Regulatory Redemption Event

 Upon a regulatory redemption triggering event, each bondholder will have the right to require the Parent
Company to repurchase all or any part of such holder’s bonds pursuant to a Special Repurchase Offer.
In the Special Repurchase Offer, the Parent Company will offer to purchase the bonds at a purchase
price in cash equal to the special redemption price and additional amounts, if any, to but excluding the
date of repurchase (subject to the right of bondholders of record on the relevant record date to receive
interest due on the relevant interest payment date), except to the extent the Parent Company has
previously or concurrently elected to redeem the Notes in full as described under the conditions of an
early redemption due to a gross-up event.

*SGVFS187515*
 - 75 -

Redemption at the Option of the Issuer

 On any payment business day on or after July 30, 2025, and up to but excluding the maturity date, the
Parent Company may on one or more occasions redeem all or a part of the bonds, at the redemption
prices plus accrued and unpaid interest, if any, to the date of redemption, if redeemed during the twelve
(12)-month period commencing on the call dates set forth below:

Call Dates Prices

July 30, 2025 102.188%
July 30, 2026 101.094%
July 30, 2027 100.547%
July 30, 2028 and 100.000%
thereafter

The successful bond issuance enabled the Parent Company to diversify its fund sources, to refinance maturing
obligations, as well as fund its committed water and wastewater infrastructure projects in the East Zone
concession. The carrying value of the bonds as of December 31, 2023 and 2022 amounted to
US$491.72 million and US$490.81 million, respectively.

Parent Company Loans

MWMP Loan
On October 2, 2012, the Parent Company entered into a Subsidiary Loan Agreement with Land Bank of the
Philippines under the Metro Manila Wastewater Management Project (MWMP) with the World Bank
(MWMP Loan). The MWMP aims to improve wastewater services in Metro Manila through increased wastewater
collection and treatment. The loan has a term of twenty-five (25) years and was made available in United States
Dollar in the aggregated principal amount of US$137.50 million, payable via semi-annual installments after the
seven (7)-year grace period. The Parent Company has made four (4) drawdowns in 2015 with an aggregate
amount of US$22.60 million, three (3) drawdowns in 2016 with an aggregate amount of US$17.46 million,
three (3) drawdowns in 2017 with a total amount of US$22.40 million, one (1) drawdown in 2018 amounting to
US$8.88 million, and four (4) drawdowns in 2019 with an aggregate amount of US$41.68 million. In 2020, the
Parent Company made three (3) additional drawdowns with a total amount of US$24.48 million to fully utilize the
facility. The carrying value of the MWMP loan as of December 31, 2023 and 2022 amounted to
US$103.58 million and US$111.22 million, respectively.

JPY40.00 billion Loan

On September 30, 2015, the Parent Company signed a seven (7)-year JPY40.00 billion term loan facility,
payable semi-annually, with three (3) international banks: MUFG Bank, Ltd., Mizuho Bank, Ltd., and
Sumitomo Mitsui Banking Corporation. The proceeds of the loan were used to finance the East Zone’s capital
expenditures. The Parent Company made its first drawdown on March 9, 2016 amounting to JPY13.40 billion.
In 2017, the Parent Company made two (2) additional drawdowns totaling JPY26.60 billion. The loan’s
carrying value as of December 31, 2021 amounted JPY3,388.68 million. The loan was fully paid in 2022.

MTSP Loan
On October 20, 2005, the Parent Company entered into a Subsidiary Loan Agreement with Land Bank of the
Philippines (MTSP Loan) to finance the improvement of the sewerage and sanitation conditions in the Manila
Concession. The loan has a term of seventeen (17) years and was made available in JP¥ in the aggregate
principal amount of JP¥6.59 billion payable via semi-annual installments after the five (5)-year grace period.

The Parent Company made its last drawdown on October 26, 2012. Total drawn amount from the loan is
JP¥3.99 billion. As of December 31 2021, the outstanding balance of the MTSP loan amounted to
JP¥168.04 million. The loan was fully paid in 2022.

EUR250.00 million Loan

On August 27, 2019, the Parent Company entered into a syndicated loan agreement amounting to
€250.00 million to fund the capital investment program of the East Zone starting in 2019. The loan will be
prepaid in eight (8) installments starting April 2023 and is financed by a syndicate of two (2) banks namely
Bank of China (Hong Kong) Limited and Bank of China Limited, Manila Branch. The Parent Company has
made a drawdown amounting to €40.00 million in 2019, and €90.00 million in 2020. In August 2021,
the Parent Company prepaid the outstanding loan amounting to €130.00 million with a prepayment cost of
P
= 7.74 million (see Note 18). In the same month, the Parent Company drew €120.00 million which it will use to
continue funding its capital investment program. The carrying value of the loan as of December 31, 2023 and
2022 amounted to €57.29 million and €119.04 million, respectively.

*SGVFS187515*
 - 76 -

P
= 5.00 billion PNB Loan
On May 11, 2018, the Parent Company signed a P = 5.00 billion, ten (10)-year term loan facility with the PNB. The
loan will be used to finance general corporate requirements and capital investment programs in the East Zone as
well as to refinance existing concessionaire loans. On July 31, 2018, the Parent Company made its first and only
drawdown amounting to P =5.00 billion. The carrying value of the loan as of December 31, 2023 and 2022
amounted to P = 2,365.81 million and P
= 2,861.81 million, respectively.

P
= 5.00 billion BDO Unibank, Inc. (BDO) Loan
On November 13, 2019, the Parent Company signed a P = 5.00 billion, five (5)-year term, revolver loan facility with
BDO with principal payable at bullet after sixty (60) months. The loan proceeds were used for the expansion and
improvement of the water source, distribution and sewerage systems, and other general corporate requirements
as well as to refinance existing concessionaire loans. The Parent Company made two (2) drawdowns in 2019
with an aggregate amount of P = 3,800.00 million, and an additional drawdown in 2020 amounting to
P
= 1,200.00 million. On December 19, 2022, the Parent Company re-availed P = 2,000.00 million portion of the loan
facility, payable at bullet after sixty (60) months. The carrying value of the loan as of December 31, 2023 and
2022 amounted to P = 4,982.81 million and P = 4,975.38 million, respectively.

P
= 15.00 billion China Banking Corporation (CBC) Loan
On September 12, 2022, the Parent Company entered into a loan agreement with CBC for a 10-year term loan
amounting to P = 15.00 billion to be used to finance various capital expenditures of East Zone projects.
The Parent Company has made drawdowns amounting to P = 7.50 billion and P
= 4.00 billion in September 13, 2022
and December 15, 2022, respectively. Interest and principal payments are payable semi-annually. Principal
payment is due beginning March 13, 2026.

On February 21, 2023 and April 25, 2023, the Parent Company made additional drawdowns from the loan facility
amounting to P
= 1,500.00 million and P
= 2,000.00 million, respectively. Interest and principal payments are payable
semi-annually. The proceeds of the loan will be used to finance various capital expenditures of East Zone
projects.

The carrying value of the loan as of December 31, 2023 and 2022 amounted to P
= 14,903.23 million and
11,415.73 million, respectively.

P
= 3.00 Billion Term-Loan with Land Bank of the Philippines (LBP)
On February 20, 2023, the Parent Company entered into a loan agreement with LBP for a P = 3.00 billion 10-year
term loan to be to used to partially finance the Parent Company’s general corporate requirements, including
capital expenditures. The Parent Company made its first and only drawdown amounting to P = 3.00 billion on
November 29, 2023. Interest and principal payments are payable semi-annually. Principal payment is due
beginning on May 29, 2025. The carrying value of the loan as of December 31, 2023 amounted to P = 2,977.50
million.

P
= 10.00 Billion Term-Loan with Metropolitan Bank and Trust Company (MBTC)
On December 06, 2023, the Parent Company entered into a loan agreement with MBTC for a 10-year term loan
amounting to P = 10.00 billion to be used to finance East Zone’s capital expenditures and/or general corporate
requirements. The Parent Company has made a drawdown amounting to P = 9.00 billion on December 11, 2023.
Interest and principal payments are payable semi-annually. Principal payment is due beginning June 11, 2024.
The carrying value as of December 31, 2023 amounted P = 8,932.64 million.

P
= 7.00 Billion Term-Loan with LBP
On December 19, 2023, the Parent Company entered into a loan agreement with LBP for a 10-year term loan
amounting to P = 7.00 billion to be used to finance East Zone’s general corporate requirements including, capital
expenditures. The Parent Company has made a drawdown amounting to P = 3.50 billion on December 28, 2023.
Interest and principal payments are payable semi-annually. Principal payment is due beginning June 28, 2025.
The carrying value as of December 31, 2023 amounted to P = 3,473.71 million.

Amendments to Omnibus Agreements, Intercreditor Agreement and Loan Agreements

On July 17, 2008, the Parent Company, together with all of its lenders, signed an Omnibus Amendment
Agreement and Intercreditor Agreement and these agreements became effective on September 30, 2008.

Prior to the execution of the Omnibus Amendment Agreement, the obligations of the Parent Company to pay
amounts due and owing or committed to be repaid to the lenders under the existing facility agreements were
secured by Assignments of Interests by Way of Security executed by the Parent Company in favor of a trustee
acting on behalf of the lenders. The Assignments were also subject to the provisions of the Amended and
Restated Intercreditor Agreement dated March 1, 2004 and its Amendatory Agreement dated
December 15, 2005 executed by the Parent Company, the lenders and their appointed trustee.

*SGVFS187515*
 - 77 -

Under the Omnibus Amendment Agreement, the lenders effectively released the Parent Company from the
assignment of its present and future fixed assets, receivables, and present and future bank accounts, all the
Project Documents (except for the Agreement, Technical Corrections Agreement and the DOF Undertaking
Letter), all insurance policies where the Parent Company is the beneficiary and performance bonds posted in its
favor by contractors or suppliers.

In consideration for the release of the assignment of the above-mentioned assets, the Parent Company agreed
not to create, assume, incur, permit or suffer to exist, any mortgage, lien, pledge, security interest, charge,
encumbrance or other preferential arrangement of any kind, upon or with respect to any of its properties or
assets, whether now owned or hereafter acquired, or upon or with respect to any right to receive income, subject
only to some legal exceptions. The lenders shall continue to enjoy their rights and privileges as Concessionaire
Lenders (as defined under the Agreement), which include the right to appoint a qualified replacement operator
and the right to receive payments and/or other consideration pursuant to the Agreement in case of a default of
either the Parent Company or MWSS. Currently, all lenders of the Parent Company are considered
Concessionaire Lenders and are on pari passu status with one another.

In November and December 2014, the Parent Company signed Amendment Agreements to its loan agreements
with its existing lenders. This effectively relaxed certain provisions in the loan agreements providing the Parent
Company more operational and financial flexibility. The loan amendments include the shift to the use of the
Parent Company from consolidated financial statements to stand-alone financial statements for the purposes of
calculating the financial covenant ratios, the increase in maximum debt to equity ratio to 3:1 from 2:1 and the
standardization of the definition of debt service coverage ratio at a minimum of 1.2:1 across all loan agreements.

MWTC Loan
On February 27, 2019, MWTC signed a THB5.30 billion, five (5)-year term loan facility with Mizuho
Bank Ltd. – Bangkok Branch and Bank of Ayudhya Public Company Limited to refinance the previous bridge loan
used for the acquisition of an 18.72% equity stake in East Water. This loan bears interest of BIBOR plus margin
and is guaranteed by the Parent Company. The carrying value of the loan as of December 31, 2023 and 2022
amounted to THB5,271.78 million and THB5,291.78 million, respectively.

Laguna Water Loans

On April 29, 2013, Laguna Water entered into a loan agreement with DBP to partially finance the modernization
and expansion of the water network system and water supply facilities in Biñan, Sta. Rosa and Cabuyao,
Laguna. Under the agreement, the lender has agreed to provide a loan to the borrower through the Philippine
Water Revolving Fund (PWRF) in the aggregate principal amount of up to P = 500.00 million. The first and second
drawdowns were made in July and November 2013 which amounted to P = 250.00 million each. The carrying
value of this loan as of December 31, 2023 and 2022 amounted to P = 286.34 million and P= 315.67 million,
respectively.

On January 9, 2014, Laguna Water exercised its option to avail of the second tranche of its loan agreement with
DBP, to finance its water network and supply projects, including the development of a well-field network in the
Biñan, Sta. Rosa area of Laguna. Under the expanded facility agreement, the lender provided additional loans to
Laguna Water in the aggregate principal amount of P = 833.00 million. The first and second drawdowns were
made in January and May 2014, respectively, amounting to P = 416.50 million each. The carrying value of the loan
amounted to P= 491.49 million and P
= 541.84 million as of December 31, 2023 and 2022, respectively.

On October 23, 2015, Laguna Water entered into a loan agreement with Security Bank Corp. (SBC) to finance
the modernization and expansion of its water network system and water supply facilities throughout the province
of Laguna. Under the loan agreement, the lender agreed to provide a loan to the borrower in the aggregate
principal amount of up to P
= 2.50 billion for an applicable fixed interest rate, as determined in respect of each
drawdown. The first drawdown was made in December 2015 amounting to P = 600.00 million. The second
drawdown was made in two tranches in April 2016 amounting to P = 150.00 million and P= 300.00 million.
The third drawdown was made in September 2016 amounting to P = 400.00 million. The fourth drawdown was
made in three (3) tranches, the first tranche in March amounting to P = 100.00 million and the second and third
tranches in April 2017 amounting to P = 50.00 million and P= 350.00 million. The fifth drawdown was made in two (2)
tranches in September 2017 amounting to P = 150.00 million and P=400.00 million. The carrying value of the loan
amounted to P= 1,340.82 million and P = 1,531.64 million as of December 31, 2023 and 2022, respectively.

On March 29, 2017, Laguna Water entered into a loan agreement with Grand Challenges Canada to fund a
project during the period beginning on the effective date of the loan agreement and ending on the project end
date of March 31, 2018 for up to an aggregate principal amount of CAD873,000. The project supported by the
loan is the “Bundling water and sanitation services for the poor in informal urban communities.” As of
December 31, 2023 and 2022, the carrying value of the loan amounted to CAD873,000.

*SGVFS187515*
 - 78 -

On June 28, 2019, Laguna Water signed a ten (10)-year term loan facility amounting to P = 2.50 billion with BPI.
The loan will be used to partially finance Laguna Water’s capital expenditure program. The first drawdown was
made in July 2019 amounting to P = 200.00 million. The second drawdown was made in December 2019
amounting to P= 500.00 million. The third drawdown was made in March 2020 amounting to P = 400.00 million.
The fourth drawdown was made in December 2021 amounting to P = 200.00 million. The carrying value of the loan
amounted to P = 1,027.03 million and P= 1,204.87 million as of December 31, 2023 and 2022, respectively.

Omnibus Loan and Security Agreement – BPI

On August 17, 2023, Laguna Water and BPI finalized the Omnibus Loan and Security Agreement (Sixth OLSA)
loan facility amounting to P
=1.60 billion. The loan will be used to finance capital expenditure projects for 2023 to
2025. The first drawdown was made in October 23, 2023 amounting to P = 700.00 million. The carrying value of the
loan amounted to P =694.91 million as of December 31, 2023.

Boracay Water Loans

Boracay Water entered into various Omnibus Loan and Security Agreements with DBP, SBC, and BPI to finance
the construction, operation, maintenance and expansion of facilities for the fulfillment of certain service targets
for water supply and wastewater services for its service area under its concession agreement with TIEZA, as well
as the operation and maintenance of the completed drainage system.

Omnibus loan and security agreement - Sub-tranche 1

On July 29, 2011, Boracay Water entered into an Omnibus Loan and Security Agreement with DBP and SBC.
The loan shall not exceed the principal amount of P
=500.00 million and is payable in twenty (20) years inclusive of
a three (3)-year grace period. The loan shall be available in three sub-tranches, as follows:

 Sub-tranche 1A, the loan in the amount of P

= 250.00 million to be provided by DBP and funded through
Philippine Water Revolving Fund (PWRF);
 Sub-tranche 1B, the loan in the amount of P
= 125.00 million to be provided by SBC and funded through
PWRF; and
 Sub-tranche 1C, the loan in the amount of P
= 125.00 million to be provided by SBC and funded through its
internally-generated funds.

The first, second, and final loan drawdowns amounted to P =150.00 million on August 25, 2011, P = 155.00 million on
August 25, 2012, and P = 195.00 million on August 23, 2013, respectively. The carrying value of the loan as of
December 31, 2023 and 2022 amounted to P =292.60 million and P
= 292.31 million, respectively.

Omnibus loan and security agreement - Sub-tranche 2

The Agreement provided Boracay Water the option to borrow additional loans from the lenders. On
November 14, 2012, Boracay Water entered into the second omnibus loan and security agreement with DBP and
SBC. The agreed aggregate principal of the loan amounted to P
= 500.00 million which is available in three sub-
tranches:

 Sub-tranche 2A, the loan in the amount of P

= 250.00 million to be provided by DBP and funded through
Philippine Water Revolving Fund (PWRF);
 Sub-tranche 2B, the loan in the amount of P
= 125.00 million to be provided by SBC and funded through
PWRF; and
 Sub-tranche 2C, the loan in the amount of P
= 125.00 million to be provided by SBC and funded through its
internally-generated funds.

In consideration of DBP undertaking to purchase sub-tranches 1C and 2C, Boracay Water will pay DBP
purchase commitment fee which is equivalent to 0.25% per annum of the purchase price on a quarterly basis.
Purchase commitment fee payable amounted to nil as of December 31, 2023 and 2022, respectively.

The first, second, and final loan drawdowns amounted to P =75.00 million on November 23, 2012, P
= 200.00 million
on August 26, 2014, and P = 225.00 million on November 25, 2015, respectively. The carrying value of the loan
amounted to P = 313.08 million and P= 312.75 million as of December 31, 2023 and 2022, respectively.

Omnibus Loan and Security Agreement – Sub-tranche 3

On October 9, 2014, Boracay Water signed a Third Omnibus Loan and Security Agreement amounting to
P
= 650.00 million with SBC. The first, second, and third drawdowns on this loan were made on
November 25, 2016, May 25, 2017, and September 25, 2017, amounting to P = 200.00 million, P
= 250.00 million,
P
= 200.00 million, respectively. The carrying value of the loan amounted to P
= 538.35 million and P= 537.68 million
as of December 31, 2023 and 2022, respectively.

*SGVFS187515*
 - 79 -

Omnibus Loan and Security Agreement – BPI

On December 20, 2017, Boracay Water signed a Fourth Omnibus Loan and Security Agreement in the amount
of P
= 2.40 billion with the BPI. The drawdowns on this loan made on April 30, 2018, September 25, 2018, and
December 20, 2018 amounted to P = 250.00 million, P
= 250.00 million and P= 100.00 million respectively.
On February 13, 2020, March 31, 2020, April 7, 2020, and December 22, 2020, additional drawdowns were
made amounting to P = 50.00 million, P
= 30.00 million, P
= 520.00 million, and P
= 50.00 million respectively.
On January 28, 2021 and May 26, 2021, drawdowns were made amounting to P = 100.00 million and
70.00 million, respectively. On January 21, 2022, another drawdown was made amounting to P = 100.00 million.

On October 7, 2021, BPI approved the amendment of the repayment structure from 40 equal quarterly
installments to sculpted quarterly installments payable in 41 quarters to commence on the 5th anniversary from
initial drawdown date. The change in payment terms did not result to debt modification.

The carrying value of loan amounted to P

= 1,499.83 million and P
= 1,509.87 million as of December 31, 2023 and
2022, respectively.

Clark Water Loans

On April 10, 2015, Clark Water entered into a loan agreement with Rizal Commercial Banking Corporation
(RCBC), whereby RCBC extended credit to Clark Water for up to P = 1.15 billion to partially finance its capital
expenditures program. Under the agreement, principal payments will be made in forty-eight (48) consecutive
equal quarterly installments starting December 2018. The first and second drawdowns on the loan were made
on September 29, 2015 and December 29, 2015, amounting to P = 800.00 million and P = 200.00 million,
respectively. The last drawdown was made on August 29, 2016 amounting to P = 150.00 million.
The carrying value of the loan amounted to P
= 644.14 million and P
= 739.20 million as of December 31, 2023
and 2022, respectively.

On March 11, 2019, Clark Water signed a term loan agreement amounting to P = 535.00 million with the DBP.
The proceeds of the loan will be used to partially finance Clark Water’s capital expenditure programs.
Under the agreement, principal payments will be made in forty-eight (48) consecutive equal quarterly
installments starting March 2022. The first, second, third, and fourth drawdowns on this loan were made on
March 22, 2019, December 20, 2019, April 24, 2020, and December 23, 2020 amounting to P = 100.00 million,
P
= 80.00 million, P
= 80.00 million, and P
= 60.00 million, respectively. The last drawdown was made on
May 7, 2021 amounting to P = 215.00 million. The carrying value of the loan amounted to P = 454.35 million
and P= 498.46 million as of December 31, 2023 and 2022, respectively.

Omnibus Loan and Security Agreement – BPI

On June 15, 2023, Clark Water and BPI finalized the Omnibus Loan and Security Agreement (Third OLSA) loan
facility amounting to P= 1.53 billion. The loan will be used to finance capital expenditure projects for 2023 to 2025.
In November and December of 2023, first and second loan drawdown took place amounting to P = 200.00 million
and P = 170.00 million, respectively. As of December 31, 2023, the carrying value of the loan amounted to
P
= 367.15 million.

Cebu Water Loan

On December 19, 2013, Cebu Water entered into an Omnibus Loan and Security Agreement with the DBP to
partially finance the construction works in relation to its bulk water supply project in Cebu. The lender has
agreed to extend a loan facility in the aggregate principal amount of P = 800.00 million or up to 70% of the total
project cost, whichever is lower. Principal payments will be made in twenty (20) equal quarterly installments
starting December 2017.

In 2013, MW Consortium entered into a real estate mortgage agreement with the DBP, as third-party mortgagor,
in consideration for this Cebu Water loan.

The first, second, and final drawdowns on the loan facility amounted to P
= 541.13 million on December 20, 2013,
P
= 195.64 million on May 20, 2014, and P
= 14.79 million on November 14, 2014, respectively. The carrying value of
the loan as of December 31, 2022 amounted to P = 481.60 million. On October 2, 2023, the total outstanding loan
of P453.15 million with DBP was prepaid and fully settled.

MWPVI Loan
On October 5, 2016, MWPVI signed a fifteen (15)-year fixed rate term loan facility amounting to P= 4.00 billion with
SBC and Metrobank. The terms of the loan include an option to increase the size of the facility to a maximum of
P
= 7.00 billion. The proceeds of the loan will be used to finance MWPVI’s capital expenditures, future acquisitions
and other general corporate requirements.

*SGVFS187515*
 - 80 -

On February 24, 2017, MWPVI made a bridge loan drawdown amounting to P = 150.00 million each from SBC and
Metrobank. These bridge loans had a 119-day term. On June 23, 2017, these bridge loans were rolled-over for
additional 180 days, repriced monthly. On November 9, 2017, MWPVI repaid its P = 300.00 million bridge loan and
made the first drawdown on its loan facility amounting to P
= 450.00 million from each bank.

On October 5 and December 19, 2018, MWPVI made its subsequent drawdowns amounting to P = 50.00 million
and P= 175.00 million from each bank, respectively. In 2019, MWPVI made additional drawdowns totaling to
P
= 800.00 million from each bank. These loan drawdowns have a term of thirteen (13) to fifteen (15) years, with
interest payable semi-annually and principal repayments starting on November 9, 2022.

On January 15, February 19, and April 7, 2020, MWPVI made additional drawdowns amounting to
P
= 150.00 million, P
= 200.00 million and P
= 175.00 million from each bank, respectively.

MWPVI has exercised its option to borrow an additional P= 3.00 billion under the Greenshoe Option of the
Omnibus Loan and Security Agreement (OLSA) with SCB and Metrobank. MWPVI signed the Second OLSA on
May 22, 2020 and made the first drawdown of P = 750.00 million from each lender. The proceeds of the loan will
be used to finance MWPVI’s capital expenditures, existing projects of subsidiaries or equity investments, and
other general corporate requirements. On March 12, August 10 and October 5, 2021, MWPVI made additional
drawdowns in equal tranches of P= 150.00 million from each bank.

On December 21, 2022, MWPVI signed a bilateral ten (10)-year fixed rate term loan facility for the Third OLSA
amounting to P = 3.00 billion with SBC. The proceeds of the loan will be used to finance the Company’s capital
expenditures, fund existing projects of subsidiaries or Equity Investments, and other general corporate
requirements. On December 23, 2022, the MWPVI made its first drawdown on its loan facility amounting to
P
= 700.00 million.

On March 29 and June 29, 2023, MWPVI made additional loan drawdowns from its Third OLSA amounting to
P
= 150.00 million and P
= 600.00 million, respectively. The proceeds of the loan will be used to finance the MWPVI’s
capital expenditures, fund existing projects of subsidiaries and other general corporate requirements. These loan
drawdowns have a term of ten (10) years and will mature on December 23, 2032.

The carrying value of the loan as of December 31, 2023 and 2022 amounted to P
= 7,413.76 million and
P
= 7,326.69 million, respectively.

Tagum Water Loan

On October 6, 2016, Tagum Water signed an OLSA in the amount of P = 450.00 million with PNB. The loan will be
used to partially finance the construction works in relation to the Tagum Bulk Water Supply Project. Principal
payments will be made in forty-eight (48) equal quarterly installments starting December 2020. The first, second,
and third drawdowns on this loan were made on September 25, 2017, April 18, 2018, and November 23, 2018,
amounting to P= 130.00 million, P
= 120.00 million, and P= 154.00 million, respectively. The carrying value of the loan
as of December 31, 2023 and 2022 amounted to P = 293.31 million and P = 326.70 million, respectively.

On April 22, 2021, the OLSA was amended for the loan upsize request to fund the additional construction works
for the bulk water supply project. The lender has agreed to grant an additional loan in the principal amount of
P
= 150.00 million under the same payment terms of the initial loan. The first drawdown was made on August 2,
2021 amounting to P = 150.00 million, payable quarterly. The carrying value of the loan as of December 31, 2023
and 2022 amounted to P = 114.13 million and P
=126.92 million, respectively.

Aqua Centro Loan

On March 1, 2021, Aqua Centro signed a P = 233.00 million ten (10)-year term loan facility with BPI to partially
finance its capital expenditures, future acquisitions and other general corporate requirements. On March 19
and November 26, 2021, Aqua Centro made its first and second drawdown amouting to P = 80.00 million and
P
= 27.00 million, respectively. On June 14, 2022, Aqua Centro made its third drawdown amounting to
P
= 61.00 million. On May 29 and December 20, 2023, Aqua Centro made its fourth and fifth drawdown amounting
to P
= 30.00 million and P
= 35.00 million, respectively. These loan drawdowns have a term of nine (9) to ten (10)
years, with interest payable quarterly and principal repayments starting on March 19, 2024.

The carrying value of the loan as of December 31, 2023 and 2022 amounted to P
= 231.71 million and P
= 166.97
million, respectively.

*SGVFS187515*
 - 81 -

South Luzon Water Loan

On August 18, 2021, South Luzon Water signed a P = 465.00 million term loan facility with BPI to partially finance
its capital expenditure projects. Under the agreement, principal payments will be made in fifteen (15)
consecutive equal semi-annual installments starting August 2024. The first and second drawdowns were made
on August 25, 2021 and December 6, 2021, respectively, amounting to P = 50.00 million each.

On April 25, 2022, South Luzon Water made the third drawdown amounting to P = 70.00 million, with a term of ten
(10) years. Quarterly interest payments will start on May 25, 2022 while principal repayments will start on
May 25, 2024.

On March 30, 2023, June 29, 2023, and September 22, 2023, South Luzon Water made additional drawdowns
from its BPI loan facility amounting to P
= 60.00 million, P
= 45.00 million and P
= 50.00 million, respectively.
The proceeds of the loan will be used to partially finance its capital expenditure projects. Principal payments will
be made in fifteen (15) consecutive equal semi-annual installments starting August 2024.

The carrying value of the loans as of December 31, 2023 and 2022 amounted to P
= 323.08 million and P
= 168.91
million, respectively.

Calbayog Water Loan

On October 12, 2021, Calbayog Water signed a P =393.00 million term loan facility with BPI to partially finance its
capital expenditure projects. Under the agreement, principal payments will be made in fifteen (15) equal semi-
annual payments starting October 24, 2024. The first drawdown was made on October 22, 2021 amounting to
P
= 70.00 million. On July 26, 2022, Calbayog Water made the second drawdown amounting to P = 80.00 million.
The carrying value of the loan as of December 31, 2023 and 2022 amounted to P = 149.00 million and P = 148.88
million, respectively.

Bulakan Water Loan

On January 20, 2023, Bulakan Water signed an Omnibus Loan and Security Agreement (OLSA) in the amount of
P
= 200.00 million with BPI. The loan will be used to finance the projects of the company. Nominal interest is at
6.6224% per annum. Principal payments will be made in forty-eight (48) equal quarterly installments starting April
2026.

On June 27, 2023, Bulakan Water signed an Amendment Agreement relating to the OLSA entered last January
20, 2023, with BPI to exclude in "Debt" definition the present value of concession fee payments computed based
on BWCI's interpretation of IFRIC 12.

On January 31, March 23, October 24 and November 29, 2023, Bulakan Water made drawdowns from its BPI
loan facility amounting to P
= 40.00 million, P
=40.00 million, P
= 20.00 million and P
= 30.00 million, respectively. As of
December 2023, the carrying value of the loan amounted to P =130.00 million.

South Luzon Water, Aqua Centro, Boracay Water, Laguna Water, Clark Water, and MWPVI have assigned their
rights under their respective concession agreements or project documents as their loan collateral, while Cebu
Water and Tagum Water’s loans are secured by real estate mortgages on real assets with total carrying value
amounting to P= 30.59 million and P
= 53.60 million, respectively, as of December 31, 2023 and 2022.

Compliance with loan covenants

All these loan agreements provide for certain covenants that must be complied by the Group which include
compliance with certain financial ratios such as the debt-to-equity, debt-service-coverage and early
termination, as well as limitations in the declaration of dividends to stockholders in some of the subsidiaries.
As of December 31, 2023 and 2022, the Parent Company and MWPVI and subsidiaries are in compliance with
all the loan covenants required by the creditors.

16. Retirement Plan

The Parent Company, MWPVI, Boracay Water, Clark Water, and Laguna Water have funded noncontributory
defined benefit pension plans while MWIS, Obando Water, BMDC, and MWTV have nonfunded noncontributory
defined benefit pension plans. The defined benefit pension plans cover substantially all of their respective
regular employees. The benefits are based on current salaries, years of service, and compensation as of the
last year of employment. The latest actuarial valuations were made on December 31, 2023.

*SGVFS187515*
 - 82 -

RA No. 7641, the existing regulatory framework, requires a provision for retirement pay to qualified private sector
employees in the absence of any retirement plan in the entity, provided however that the employee’s retirement
benefits under any collective bargaining and other agreements shall not be less than those provided under law.
The law does not require minimum funding for the plan.

The Parent Company’s funding policies state that equivalent target funding ratio must always be at least 80%
and should the ratio reach 120.00%, the Retirement and Welfare Plan Committee may opt to declare a funding
holiday. In the event there is an extraordinary increase in defined benefit obligation, which may arise from
benefit improvement, massive hiring and the other extraordinary personnel movements, the Parent Company
has a maximum of three (3) years to comply with the required minimum funding ratio of 80.00%.

The retirement plans of Parent Company, MWPVI, Boracay Water, Clark Water, and Laguna Water are each
covered by a retirement fund administered by trustee banks, which are under the supervision of their respective
Retirement and Welfare Plan Committees (the “Committees”). The Committees, which are composed of six (6)
to seven (7) members appointed by management, define the investment strategy of the fund and regularly
reviews the strategy based on market developments and changes in the plan structure. When defining the
investment strategy, the Committees take into account the plan’s objectives, benefit obligations, and risk
capacity. The Committees review, on a quarterly basis, the performance of the funds managed by trustee banks.

Changes in the net defined benefit liability of retirement plans are as follow:

2023
Present value of
defined benefit Fair value of Net defined
obligations plan assets benefit liabilities
Balance at beginning of year P
= 1,018,607,781 P
= 730,393,930 P
= 288,213,851
Net benefit costs in profit or loss before
capitalized costs:
Current service cost 116,876,897 – 116,876,897
Net interest (Note 18) 61,482,115 50,411,049 11,071,066
178,359,012 50,411,049 127,947,963
Remeasurements in other comprehensive
income:
Return on plan assets (excluding amount
included in interest) – (38,935,854) 38,935,854
Actuarial changes arising from:
Financial assumptions 51,720,523 – 51,720,523
Demographic assumptions 4,680,655 – 4,680,655
Experience adjustments (3,813,179) – (3,813,179)
52,587,999 (38,935,854) 91,523,853
Benefits paid from retirement funds (112,789,612) (112,789,612) –
Contributions – 77,800,000 (77,800,000)
Benefits paid from operating funds (41,663,250) – (41,663,250)
Balance at end of year P
= 1,095,101,930 P
= 706,879,513 P
= 388,222,417

2022
Present value of
defined benefit Fair value of Net defined
obligations plan assets benefit liabilities
Balance at beginning of year P
= 959,734,122 P
= 812,802,276 P
= 146,931,846
Net benefit costs in profit or loss before
capitalized costs:
Current service cost 95,479,076 – 95,479,076
Net interest (Note 18) 39,600,139 39,483,927 116,212
135,079,215 39,483,927 95,595,288
Remeasurements in other comprehensive
income:
Return on plan assets (excluding amount
included in interest) – (65,288,732) 65,288,732
Actuarial changes arising from:
Experience adjustments 50,032,011 – 50,032,011
Financial assumptions 1,805,579 – 1,805,579
51,837,590 (65,288,732) 117,126,322
Benefits paid from retirement funds (125,553,541) (125,553,541) –
Contributions – 68,950,000 (68,950,000)
Transfers (2,313,648) – (2,313,648)
Benefits paid from operating funds (175,957) – (175,957)
Balance at end of year P
= 1,018,607,781 P
= 730,393,930 P
= 288,213,851

*SGVFS187515*
 - 83 -

The components of the fair value of plan assets are as follows:

2023 2022
Assets:
Cash and cash equivalents P
= 942,763 P
= 2,159,453
Debt investments – domestic 630,078,494 650,675,326
Equity investments – domestic 69,883,526 75,331,623
Interest receivable 2,077,340 1,603,816
Other receivable 5,021,994 3,670,948
708,004,117 733,441,166
Liabilities:
Other payables 1,124,604 3,047,236
1,124,604 3,047,236
Fair value of plan assets P
= 706,879,513 P
= 730,393,930

All equity and debt investments held have quoted prices in active markets. The remaining plan assets do not
have quoted market prices in active markets.

The plan assets are invested in different financial instruments and do not have any concentration risk.

The cost of defined benefit pension plans, as well as the present value of the pension obligation, are determined
using actuarial valuations. The actuarial valuations involve making various assumptions. The principal
assumptions used in determining pension obligations for the defined benefit plans are shown below:
2023 2022 2020
Discount rate 6.14% 7.33% 4.97% to 5.26%
Salary increase rate 6.10% 7.00% 3.50% to 5.00%
The sensitivity analysis below has been determined based on reasonably possible changes of each significant
assumption on the defined benefit obligation as of the end of the reporting period, assuming all other
assumptions were held constant:

Effect on Defined Benefit Obligation

Increase
(Decrease) 2023 2022
Discount rate 1.00% (P
= 78,972,469) (P
= 72,255,090)
(1.00%) 94,574,445 86,150,262

Salary increase rate 1.00% 97,641,054 89,497,390

(1.00%) (82,951,221) (76,348,900)

Shown below is the maturity analysis of the undiscounted benefit payments:

2023 2022
Less than 1 year P
= 160,365,805 P
= 151,764,958
More than 1 year and up to 5 years 309,288,326 374,493,462
More than 5 years and up to 10 years 403,476,786 357,966,685
P
= 873,130,917 P
= 884,225,105

The average duration of the defined benefit obligation at the end of the reporting period is 16.48 years and
14.46 years as of December 31, 2023 and 2022, respectively.

The asset allocation of the plan is set and reviewed from time to time by the Committees taking into account the
membership profile and the liquidity requirements of the plan. This also considers the expected benefit cash
flows to be matched with asset durations.

Contributions to the plan are recommended by the Retirement and Welfare Plan Committees and approved by
the Parent Company, MWPVI, Boracay Water, Clark Water, Laguna Water, Obando Water, and BMDC in
consideration of the contribution advice from the actuary. The Parent Company expects to make an additional
contribution in 2024 amounting to P= 97.18 million while MWPVI, Boracay Water, Clark Water and Laguna Water
have no expected contributions to their respective defined benefit pension plans in 2024.
As of December 31, 2023 and 2022, the plan assets include shares of stock of Ayala, ALI, BPI, Globe Telecom,
Inc. (Globe), Bloomberry Corporation and International Container Terminal Services, Inc. (ICTSI) with a total fair
value of P
= 23.89 million and P
= 36.13 million, respectively. As of December 31, 2023 and 2022, the plan assets
include debt securities of Ayala and ALI with a total fair value of P
= 13.45 million and P
= 13.29 million, respectively.

*SGVFS187515*
 - 84 -

17. Other Noncurrent Liabilities

Other noncurrent liabilities consist of:

2023 2022
Deferred credits P
= 610,170,577 P
= 610,566,545
Customers’ guaranty deposits and other deposits 354,901,184 327,019,932
Long-term sick leave and vacation leave (SLVL) liability 244,151,093 184,137,755
Other noncurrent liabilitiesRE 264,719,426 –
P
= 1,473,942,280 P
= 1,121,724,232

Deferred credits pertain to the unamortized discounts of the customers’ guaranty deposits. The rollforward
analysis of the deferred credits follows:

2023 2022
Balance at beginning of year P
= 610,566,545 P
= 446,422,967
Additions 11,875,027 177,359,957
Amortization (12,270,995) (13,216,379)
Balance at end of year P
= 610,170,577 P
= 610,566,545

Customers’ guaranty deposits and other deposits pertain to the deposits paid by the Group’s customers for the
set-up of new connections which will be refunded to the customers upon termination of the customers’ water
service connections or at the end of the concession, whichever comes first.

Other noncurrent liabilities amounting to P= 226.18 million and P

= 38.54 million pertain to loan obtained by the
Group from the minority shareholders of Cebu Water, Provincial Government of Cebu and Vicsal Development
Corporation, respectively, subject to interest rate of 8.00%. The proceeds of the loans were used to finance the
prepayment of its commercial loan from DBP. These loans have a term of 3 years and will mature on September
27, 2026 (see Note 23).

Long-term SLVL liability pertains to sick leave and vacation leave encashments entitled to the employees of the
Parent Company that are expected to be availed of after more than one (1) year. In 2023 and 2022, the
Parent Company recognized expenses related to long-term SLVL in the operating expenses amounting to
P
= 55.36 million and P
= 130.07 million, respectively. The latest actuarial valuations were made on
December 31, 2023.

As of December 31, 2023 and 2022, actuarial gain (loss) on SLVL liability recognized in the other comprehensive
income amounted to P
= 4.66 million and (P
= 41.48 million), net of tax. The latest actuarial valuations were made on
December 31, 2023.

18. Other Operating Revenue, Operating Expenses, Interest Income and Expense, and Other Income and
Losses

Other operating revenue consists of:

2023 2022 2021

Cross-border billing* P
= 543,895,877 P
= 273,651,813 P
=–
Pipeworks and integrated used water
services 377,708,993 476,849,463 153,271,806
Supervision fees (Note 23) 260,941,725 337,762,316 231,481,724
Connection fees from water and service
connections 218,987,339 354,716,825 226,256,231
Service income from bulk water contracts
(Note 6) 189,036,744 193,840,519 138,934,353
Operations and maintenance services 136,373,426 112,278,840 88,422,873
Reconnection fee 93,709,745 73,345,301 34,987,702
Income from customer late payments 65,207,951 38,485,674 31,663,719
Septic sludge disposal and
bacteriological water analysis 32,634,862 33,588,860 36,505,204
Miscellaneous 5,592,462 7,202,418 63,725,409
P
= 1,924,089,124 P
= 1,901,722,029 P
= 1,005,249,021
*Pertains to cross-border charges to Maynilad

*SGVFS187515*
 - 85 -

Miscellaneous includes income from water tankering, rental of equipment, and due diligence.

Operating expenses consist of:

2023 2022 2021

Salaries, wages and employee benefits
(Notes 16 and 23) P
= 1,232,691,256 P
= 1,324,237,409 P
= 1,206,524,894
Management, technical and professional
fees (Note 23) 1,065,779,948 1,090,704,265 407,637,105
Depreciation and amortization
(Notes 9, 10 and 11) 625,904,679 342,473,948 299,262,704
Repairs and maintenance 388,799,940 487,047,917 214,817,910
Contractual services 336,259,337 364,920,241 321,837,888
Insurance 235,194,685 153,373,132 129,551,490
Provision for (reversal of) ECL on
receivables and contract assets
(Note 6) 217,169,740 (134,355,963) 466,813,300
Taxes and licenses 170,099,093 233,377,072 346,562,423
Provisions and penalty (Notes 1 and 30) 105,222,167 47,991,394 313,721,475
Donations 50,713,787 54,695,557 20,095,710
Business meetings and representation 32,888,550 25,833,248 24,156,613
Transportation and travel 32,082,718 27,557,794 11,856,956
Advertising 18,252,541 13,477,054 8,731,869
Printing and communication (Note 23) 16,986,871 17,201,108 24,618,310
Rent (Notes 11, 23 and 25) 13,434,098 21,100,467 18,821,842
Other expenses 128,745,609 209,865,951 91,927,251
P
= 4,670,225,019 P
= 4,279,500,594 P
= 3,906,937,740

Other expenses include expenses incurred for provision for inventory obsolescence, bank charges, equipment
rental and other rentals, among others.

Interest income consists of:

2023 2022 2021

Interest income on:
Cash and cash equivalents and short-
term investments (Note 5) P
= 300,992,854 P
= 120,982,688 P
= 70,247,390
Others 236,217 775,812 301,070
P
= 301,229,071 P
= 121,758,500 P
= 70,548,460

Beginning 2022, finance income from contracts assets were presented as part of the Group’s revenue.
Consequently, 2021 balance was reclassified to conform with the current presentation.

Interest expense consists of:

2023 2022 2021

Interest expense on:
Service concession obligations
(Note 10) P
= 1,135,448,327 P
= 898,636,458 P
= 671,367,228
Long-term debt (Note 15)*:
Coupon interest 2,264,494,956 1,406,910,162 1,386,407,037
Amortization of debt discount,
issuance costs and premium 163,293,338 159,968,195 234,425,142
Lease liabilities (Note 11)* 18,821,865 14,192,393 20,131,539
Pension liabilities (Note 16)* 14,911,540 2,818,156 7,124,733
Long-term SL and VL liability 13,368,401 11,268,149 –
Other financing charges
(Notes 15 and 17) 163,338,648 322,450,929 153,878,783
P
= 3,773,677,075 P
= 2,816,244,442 P
= 2,473,334,462
*Net of capitalized interest expense

Other financing charges consist of hedging costs, hedging ineffectiveness, amortization of guaranty deposits,
and loan pre-termination fees.

*SGVFS187515*
 - 86 -

Other income (losses) - net consists of:

2023 2022 2021

Provision for impairment losses
(Note 4) P
=– P
=– (P
= 130,319,465)
Gain from reversal of provision for CWA
(Note 1) – 450,263,217 –
Others – net 346,274,429 250,505,102 (45,166,244)
P
= 346,274,429 P
= 700,768,319 (P
= 175,485,709)

Others - net include liquidated damages and partial reversal of SCO related to EZ’s bulk water contract
(Note 23), reversals of long-outstanding accounts, gain on sale of scrap materials, input VAT adjustments, loss
on pre-terminations of leases and gain on insurance claims, among others.

19. Discontinued Operations

MWIS Healthy Family

On August 26, 2020, MWIS announced the permanent closure of its Healthy Family business division
effective October 31, 2020 due to its recurring losses and inability to financially sustain business operations,
which qualified the MWIS Healthy Family division as a discontinued operation for the years ended
December 31, 2023, 2022 and 2021.

The net increase in cash flows of MWIS Healthy Family Division are as follows:

2023 2022 2021

Net cash provided by
operating activities P
= 55,000 P
= 555,982 P
= 12,972,690

Zamboanga Water

On April 3, 2020, the ZCWD requested for the termination of the NRWRSA citing the erratic supply of water due
to the recurrent dry spell and El Niño phenomenon affecting the DMAs established by Zamboanga Water has
rendered the NRWRSA impractical and unworkable. On April 30, 2020, Zamboanga Water approved the
termination of the NRWRSA, without prejudice to Zamboanga Water’s claims against ZCWD and remedies under
the NRWRSA, which qualified Zamboanga Water as a discontinued operation.

The results of discontinued operations of Zamboanga Water are as follows:

2023 2022 2021

Revenue from contracts with customers P
=– P
= 85,411 P
= 191,475
Cost of services and operating expenses 1,273,167 6,485,540 14,854,583
Operating loss (1,273,167) (6,400,129) (14,663,108)
Interest income 683 791 634
Other income (loss) - net 382,549 103,687 (343,820)
Loss before income tax (889,935) (6,295,651) (15,006,294)
Provision for (benefit from) income tax (59,075) 62,378 (43,473)
Loss from discontinued operations (P
= 830,860) (P
= 6,358,029) (P
= 14,962,821)

The net cash flows of Zamboanga Water are as follows:

2023 2022 2021

Operating (P
= 1,136,643) P
= 1,590,214 (P
= 4,426,586)
Investing 683 791 904,827
Financing – – 3,500,000
Net increase (decrease) in cash and
cash equivalents (P
= 1,135,960) P
= 1,591,005 (P
= 21,759)

*SGVFS187515*
 - 87 -

The net income attributable to the owners of the Parent Company and noncontrolling interest from continuing
and discontinued operations are as follows:

2023 2022 2021

Net income (loss) attributable to:
Equity holders of Manila Water
Company, Inc.
Continuing operations P
= 5,594,150,378 P
= 5,927,227,030 P
= 3,683,802,583
Discontinued operations (581,602) (4,450,620) (10,473,975)
P
= 5,593,568,776 P
= 5,922,776,410 P
= 3,673,328,608
Noncontrolling interests
Continuing operations P
= 277,137,480 P
= 220,538,662 P
= 85,298,756
Discontinued operations (249,258) (1,907,409) (4,488,846)
P
= 276,888,222 P
= 218,631,253 P
= 80,809,910

EPS
Basic, net loss from discontinued
operations P
=– P
=– P
=–
Diluted, net loss from discontinued
operations P
=– P
=– P
=–

20. Income Tax

Provision for (benefit from) income tax consists of:

2023 2022 2021

Current P
= 1,756,292,414 P
= 1,443,529,558 P
= 1,317,513,163
Final 21,752,294 6,530,722 2,047,364
Deferred 1,326,532,054 563,139,188 219,732,881
P
= 3,104,576,762 P
= 2,013,199,468 P
= 1,539,293,408

The reconciliation of the statutory income tax rate to the effective income tax rate follows:

2023 2022 2021

Statutory income tax rate 25.00% 25.00% 25.00%
Tax effects of:
Retrospective effect of the change in
tax rate – – 0.77
Change in unrecognized deferred tax (0.17) 0.20 1.54
Interest income subjected to final tax (0.84) (0.37) (0.33)
Nontaxable equity in net loss
(earnings) of associates 9.92 (1.59) (2.68)
Nondeductible expense 43.09 76.05 78.52
Income exempt from tax (42.85) (79.98) (76.46)
Others – net 0.44 5.36 2.64
Effective income tax rate 34.59% 24.67% 29.00%

The tax effect of “others - net” pertain to the Group’s temporary differences and taxable income and deductible
expenses for tax reporting purposes.

On March 26, 2021, Former President Rodrigo Roa Duterte signed the RA No. 11534, the Corporate Recovery
and Tax Incentives for Enterprises Act, (the “CREATE Law”) which became effective on April 11, 2021. The
CREATE Law intends to incentivize businesses by reducing corporate income tax, among others. The following
are the key changes to the Philippine tax law pursuant to the CREATE Law which have an impact on the Group:

 Effective July 1, 2020, regular corporate income tax (RCIT) rate is reduced from 30.00% to 25.00% for
domestic and resident foreign corporations. For domestic corporations with net taxable income not
exceeding P= 5.00 million and with total assets not exceeding P
= 100.00 million (excluding land on which the
business entity’s office, plant and equipment are situated) during the taxable year, the RCIT rate is reduced
to 20.00%.

*SGVFS187515*
 - 88 -

 Foreign-sourced dividends shall only be exempt from taxation if (1) the funds from such dividends actually
received or remitted into the Philippines are reinvested in the business operations of the domestic
corporation within the next taxable year from the time the foreign-sourced dividends were received; (2) shall
be limited to funding the working capital requirements, capital expenditures, dividend payments, investment
in domestic subsidiaries, and infrastructure projects; (3) provided that the said domestic corporation holds
directly at least 20.00% of the outstanding shares of the foreign corporation and has held the shares for at
least two (2) years at the time of the dividend distribution.
 Minimum corporate income tax (MCIT) rate reduced from 2.00% to 1.00% of gross income effective
July 1, 2020 to June 30, 2023.

The CREATE Law likewise rationalizes income fiscal incentives, making them time-bound, targeted, and
performance-based. Holders of tax incentives are given a sunset period to adjust to the tax regime changes that
will be brought about by the CREATE Law. Consequently, upon the effectivity of the CREATE Law, some tax
exemptions or tax incentives enjoyed by certain members of the Group have expired, will be revoked, or have
been repealed, or, if other new laws are enacted, the income from these sources will be subject to the regular
corporate income tax rate after the lapse of the sunset period.

As of December 31, 2021, the CREATE Law’s retrospective and 5% income tax rate reduction impact on the
Group’s current income tax expense amounted to a P = 426.05 million reduction, P = 249.46 million additional
expense arising from deferred income taxes in the profit or loss, and P
= 8.46 million additional expense from
deferred income taxes in the OCI.

The net deferred tax assets of the Group pertain to the deferred income tax effects of the following:

2023 2022
Deferred tax assets:
Provisions and accruals P
= 141,346,175 P
= 747,465,680
NOLCO and MCIT 141,259,532 170,118,456
Allowance for ECL 108,706,312 293,444,327
Service concession obligations – net 81,187,470 1,701,746,289
Pension liabilities 13,928,520 59,749,118
Others 298,396,283 259,161,559
784,824,292 3,231,685,429
Deferred tax liabilities:
Difference between amortization expense of SCA per
straight line method and per UOP (253,915,212) (2,079,151,939)
Right-of-use assets - net (2,595,151) (8,344,760)
Derivatives (Note 28) – (436,950,934)
Others (28,624,777) (72,014,498)
(285,135,140) (2,596,462,131)
P
= 499,689,152 P
= 635,223,298

The components of the net deferred tax liabilities of the Group represent the deferred income tax effects of the
following:

2023 2022
Deferred tax liabilities:
Difference between amortization expense of SCA per
straight-line method and per UOP P
= 2,844,565,774 P
= 123,770,136
Capitalized interest 359,757,502 –
Contract assets from bulk water arrangements 271,612,631 227,654,901
Unrealized gain on bargain purchase 7,523,078 8,485,054
3,483,458,985 359,910,091
Deferred tax assets:
Service concession obligations - net (1,583,392,757) –
Provisions and accruals (544,604,874) (29,439,926)
Allowance for ECL (175,237,258) (999,704)
Pension liabilities (83,127,084) (12,304,345)
Others (44,792,029) 20,854,274
(2,431,154,002) (21,889,701)
P
= 1,052,304,983 P
= 338,020,390

*SGVFS187515*
 - 89 -

The use of OSD as the method of computing tax deductible expenses affected the recognition of several
deferred tax assets and liabilities, such that no deferred tax assets and liabilities were recognized on items of
income and expenses that are not considered in determining gross income for income tax purposes. The Parent
Company applied OSD for the year ended December 31, 2019.

The effective tax rate of 18.00% for the years in which OSD is projected to be utilized was used in computing the
deferred income taxes on the net service concession obligation starting 2008.

In 2021, deferred tax asset amounting to P = 312.35 million on allowance for ECL was not recognized by the Parent
Company. As of December 31, 2022, the Parent Company has assessed that sufficient future taxable income
will be available against which the benefit of deferred taxes on allowance for ECL can be utilized. Consequently,
the Parent Company recognized deferred tax asset on allowance for ECL amounting to P = 201.99 million.

Clark Water
Clark Water as a duly registered CFZ enterprise under RA No. 9400, An Act Amending RA No. 7227 otherwise
known as the Bases Conversion and Development Act of 1992, is entitled to all the rights, privileges and benefits
established thereunder including tax and duty-free importation of raw materials and capital equipment and
special income tax rate of 5% applied on its gross income earned in lieu of all national and local taxes.

Starting 2020, all sales outside the CFZ are charged with 12% value-added tax and subjected to the Regular
Corporate Income Tax rate of 25.00% in 2021 and 30.00% in 2020.

Other subsidiaries
All other domestic subsidiaries of the Parent Company used the Itemized Deduction in determining the amount of
their deductible expenses for income tax purposes. As a result, the applicable income tax rate is the Regular
Corporate Income Tax rate of 25.00% and Minimum Corporate Income Tax rate of 1.00%, while foreign
subsidiaries are subject to tax rates applicable in their respective countries.

NOLCO
The Parent Company’s subsidiaries, namely, MWTS, MWPVI, Filipinas Water, Bulakan Water, South Luzon
Water, North Luzon Water, Davao Water, MW Consortium, MWTV, Calbayog Water , Leyte Water, Metro Ilagan
and Zamboanga Water have total NOLCO amounting to P = 743.50 million and P= 679.30 million as of December 31,
2022 and 2021, respectively, which may be used as deduction against future taxable gross income. No deferred
tax assets were recognized on these future deductible losses. As of December 31, 2022 and 2021, the
unrecognized deferred tax assets on NOLCO amounted to P = 185.88 million and P=169.83 million, respectively.

On September 30, 2020, the BIR issued Revenue Regulations No. 25-2020 implementing Section 4(bbbb) of
“Bayanihan to Recover As One Act” which states that the NOLCO incurred for taxable years 2020 and 2021 can
be carried over and claimed as a deduction from gross income for the next five (5) consecutive taxable years
immediately following the year of such loss.

As of December 31, 2023, the Group has incurred NOLCO for taxable years 2022 and 2023 which can be
claimed as deduction from the regular taxable income for the next three (3) consecutive taxable years, as
follows:

Year Incurred Availment Period Amount Applied/Expired Unapplied

2022 2023 to 2025 P
= 286,690,580 – P
= 286,690,580
2023 2024 to 2026 24,599,828 – 24,599,828
P
= 311,290,408 – P
= 311,290,408

As of December 31, 2023, the Group has incurred NOLCO for taxable years 2020 and 2021 which can be
claimed as deduction from the regular taxable income for the next five (5) consecutive taxable years pursuant to
the Bayanihan to Recover As One Act, as follows:

Year Incurred Availment Period Amount Applied/Expired Unapplied

2020 2021 to 2025 P
= 645,969,122 P
= 93,165,930 P
= 552,803,192
2021 2022 to 2026 541,390,731 11,545,568 529,845,163
P
= 1,187,359,853 P
= 104,711,498 P
= 1,082,648,355

*SGVFS187515*
 - 90 -

MCIT
The movements of the Group’s MCIT as of December 31, 2023 which can be claimed against future Regular
Corporate Income Tax due on taxable income, but not beyond three (3) succeeding taxable years from the year
the excess MCIT arose, are as follows:

Year Incurred Amount Applied/Expired Balance Expiry Year

2020 P
= 9,526,856 P= 9,526,856 P
=- 2023
2021 8,500,891 1,913,667 6,587,224 2024
2022 12,059,485 1,703,689 10,355,796 2025
2023 5,456,452 – 5,456,452 2026
P
= 35,543,684 P
= 13,144,212 P
= 22,399,472

21. Equity

Paid-in capital
The Parent Company’s capital stock consists of:

2023 2022
Shares Amount Shares Amount

Common stock - P = 1 per share

Authorized 3,100,000,000 P
= 3,100,000,000 3,100,000,000 P
= 3,100,000,000
Issued and subscribed 2,884,839,617 2,884,839,617 2,884,839,617 2,884,839,617
Issued and outstanding 2,163,389,444 2,163,389,444 2,041,300,107 2,041,300,107
Preferred stock - P
= 0.10 par value, 10%
cumulative, voting, participating,
nonredeemable and nonconvertible
Authorized, issued and outstanding -
4,000,000,000 shares 4,000,000,000 400,000,000 4,000,000,000 400,000,000

On March 18, 2005, the Parent Company launched its Initial Public Offering where a total of 745.33 million
common shares were offered at an offering price of P
= 6.50 per share. The Parent Company has 948 and 954
existing certificated shareholders as of December 31, 2022 and 2021, respectively. The Scripless shareholders
are counted under PCD Nominee Corporation (Filipino) and PCD Nominee Corporation (Non-Filipino).

On March 1, 2018, the BOD approved the following:

a. amendment of the Parent Company’s Articles of Incorporation to exclude the 300.00 million common shares
from the pre-emptive rights of existing stockholders, and endorsed the said amendment for approval by the
stockholders; and
b. allotment and subsequent issuance of up to 300.00 million common shares for the purpose of exchanging
such shares for assets and/or raising funds to acquire assets needed for the business of the Parent
Company.

On April 16, 2018, the stockholders of the Parent Company approved the amendment of the Seventh Article of
the Articles of Incorporation to exempt from pre-emptive rights 300.00 million unissued common shares
(“carved-out shares”) which are reserved or allocated for issuance in one or more transactions or offerings,
(i) for properties or assets needed for the business of the Parent Company, or (ii) for cash to acquire properties
or assets needed for the business of the Parent Company. The issuance of all or any of the carved-out shares
does not require the approval of stockholders.

On February 26, 2019, the BOD approved the amendment of the Second Article of the Articles of Incorporation
to include the authority to enter into contracts of guarantee and/or suretyships. This amendment was later
ratified by the Parent Company’s stockholders during the annual stockholders meeting held on April 22, 2019.

On January 31, 2020, the BOD approved the amendment of the Seventh Article of the Articles of Incorporation to
increase the authorized capital stock from P = 3.50 billion to P
= 4.40 billion, which increase will consist of an
additional 900.00 million common shares. The BOD also approved the increase in the carved-out shares from
300.00 million to 900.00 million unissued common shares and to allow the issuance of the carved-out shares
“for cash, properties or assets to carry out” the corporate purposes” of the Parent Company as approved by the
BOD. Both the increase in authorized capital stock and the increase in the carved-out shares were ratified at the
annual stockholders’ meeting on April 17, 2020. The Parent Company did not push through with its application
for the increase in its authorized capital stock.

*SGVFS187515*
 - 91 -

On July 2, 2020, the SEC approved the increase in carved-out shares and the issuance of the 900.00 million
carved-out common shares “for cash, properties or assets to carry out” the corporate purposes” as approved by
the BOD and stockholders.

On February 15, 2021, the Parent Company and Prime Strategic Holdings, Inc. signed an Amendment to the
Subscription Agreement. The amendment covers the inclusion of Trident Water Company Holdings, Inc. (Trident
Water) as party to the Subscription Agreement following its establishment, as well as the updated payment terms
which is 50.00% or P= 5.33 billion upon Closing and 50.00% or P
=5.33 billion upon call of the Parent Company’s
BOD.

On the same date, Philwater and Trident Water executed a Share Purchase Agreement wherein Philwater
agreed to sell 2,691,268,205 of its preferred shares in the Parent Company to Trident Water with a payment term
over a five (5)-year period. The purchase of the preferred shares reflects a 39.09% voting stake and 8.19%
economic stake in the Parent Company. The rights and title to the shares, except voting rights covered by the
proxies, which shall be executed upon the execution of the Shareholders’ Agreement, shall not be transferred
until all payments are made. Dividends earned by the preferred shares shall continue to be for the account of
Philwater until full payment has been made.

On April 8, 2021, the Parent Company received the Tender Offer Report from Trident Water to acquire up to
1,118,253,916 common shares of the Parent Company through a tender offer to all shareholders. Said tender
offer does not include the 866,996,201 common shares held by Ayala Corporation and its nominees and the
4,000,000,000 preferred shares held by Philwater Holdings Company, Inc. and its nominees. On May 31, 2021,
a total of 462,660 common shares of Manila Water were tendered, accepted and purchased by Trident Water via
block sale through the facilities of the Philippine Stock Exchange.

On June 3, 2021, Trident Water completed the tender offer. Following the completion of the tender offer, Trident
Water owns 870,462,660 common shares of the Parent Company and has voting rights over 2,691,268,205
preferred shares to be acquired by Trident Water. In addition, Prime Strategic Holdings, Inc. also owns
29,589,500 common shares of the Parent Company. On June 24, 2021, Trident Water acquired 29,589,500
shares of the Parent Company from Prime Strategic Holdings, Inc.

The movement of the Parent Company’s issued and outstanding common stock follows:

2023 2022
Number of issued shares at beginning of year 2,044,098,916 2,043,237,036
Additions 410,433,100 861,880
Number of issued shares at end of year 2,454,532,016 2,044,098,916
Treasury shares (291,142,572) (2,798,809)
Number of issued and outstanding shares at end of year 2,163,389,444 2,041,300,107

The movement of the Parent Company’s paid-in capital for the years ended December 31, 2023, 2022, and 2021
follows:

2023
Common Subscribed Preferred Additional Subscription
Stock Common Stock Stock Paid-in Capital Receivable Treasury Shares Paid-in Capital
Balance at beginning of
year P
= 2,044,098,916 P
= 840,740,701 P
= 400,000,000 P
= 14,427,621,413 (P
= 5,644,968,396) (P
= 43,313,195) P
= 12,024,179,439
Issuance of shares 410,433,100 (410,433,100) – – – – –
Cost of share-based
payment – – – 30,394,798 22,147,558 10,002,917 62,545,273
Collections – – – – 15,563,120 – 15,563,120
Purchase of treasury
shares – – – – – (5,716,314,028) (5,716,314,028)
Reissuance of treasury
shares – – – – – – –
Balance at end of year P
= 2,454,532,016 P
= 430,307,601 P
= 400,000,000 P
= 14,458,016,211 (P
= 5,607,257,718) (P
= 5,749,624,306) P
= 6,385,973,804

*SGVFS187515*
 - 92 -

2022
Common Subscribed Preferred Additional Subscription
Stock Common Stock Stock Paid-in Capital Receivable Treasury Shares Paid-in Capital
Balance at beginning of
year P
= 2,043,237,036 P
= 841,602,581 P
= 400,000,000 P
= 14,417,217,151 (P
= 5,654,475,773) P
=– P
= 12,047,580,995
Issuance of shares 861,880 (861,880) – – – – –
Cost of share-based
payment – – – 10,404,262 9,507,377 – 19,911,639
Purchase of treasury
shares – – – – – (49,407,905) (49,407,905)
Reissuance of treasury
shares – – – – – 6,094,710 6,094,710
Balance at end of year P
= 2,044,098,916 P
= 840,740,701 P
= 400,000,000 P
= 14,427,621,413 (P
= 5,644,968,396) (P
= 43,313,195) P
= 12,024,179,439

2021
Subscribed Additional Paid-in Subscription
Common Stock Common Stock Preferred Stock Capital Receivable Paid-in Capital
Balance at beginning of year P
= 2,041,814,326 P
= 23,025,291 P
= 400,000,000 P
= 4,608,744,479 (P
= 371,306,653) P
= 6,702,277,443
Subscription of shares – 820,000,000 – 9,840,000,000 (10,660,000,000) –
Issuance of shares 1,422,710 (1,422,710) – – –
Cost of share-based payment – – – (31,527,328) 34,917,983 3,390,655
Collections – – – – 5,341,912,897 5,341,912,897
Balance at end of year P
= 2,043,237,036 P
= 841,602,581 P
= 400,000,000 P
= 14,417,217,151 (5,654,475,773) P
= 12,047,580,995

Retained earnings

The movement of the Group’s retained earnings follows:

2023
Unappropriated Appropriated Total
Retained Earnings Retained Earnings Retained Earnings
Balance at beginning of year P
= 18,087,151,743 P
= 40,610,000,000 P
= 58,697,151,743
Net income 5,593,568,776 – 5,593,568,776
Dividends declared (2,072,971,746) – (2,072,971,746)
Appropriations (15,890,000,000) 15,890,000,000 –
Balance at end of year P
= 5,717,748,773 P
= 56,500,000,000 P
= 62,217,748,773

2022
Unappropriated Appropriated Total
Retained Earnings Retained Earnings Retained Earnings
Balance at beginning of year P
= 13,448,628,617 P
= 40,610,000,000 P
= 54,058,628,617
Net income 5,922,776,410 – 5,922,776,410
Dividends declared (1,284,253,284) – (1,284,253,284)
Balance at end of year P
= 18,087,151,743 P
= 40,610,000,000 P
= 58,697,151,743

2021
Unappropriated Appropriated Total
Retained Earnings Retained Earnings Retained Earnings
Balance at beginning of year P
= 11,639,149,846 P
= 40,610,000,000 P
= 52,249,149,846
Net income 3,673,328,608 – 3,673,328,608
Dividends declared (1,863,849,837) – (1,863,849,837)
Balance at end of year P
= 13,448,628,617 P
= 40,610,000,000 P
= 54,058,628,617

The approved Business Plan includes planned capital expenditures on (i) service continuity, (ii) service
accessibility, (iii) water security, and (iv) environmental sustainability described as follows:

 Service continuity projects are endeavored to maintain the level of service provided to its customers even in
times of calamity;
 Service accessibility projects would enable the Parent Company to expand its service coverage;
 Water security projects include two components: (1) new water source development and, (2) existing water
source rehabilitation and improvement; and
 Projects under the Environmental Sustainability Investment category are comprised of wastewater projects
endeavored to achieve the Parent Company’s wastewater coverage targets.

On November 10, 2023, the Parent Company’s BOD approved the appropriation of P = 15,890.00 million to ensure
the completion of the Parent Company’s large system projects included in its approved Business Plan.
The implementation of these projects is consistent with the timeline of the approved Business Plan which
covers until the end of the concession period. Appropriated retained earnings amounted to P= 56,500.00 million

*SGVFS187515*
 - 93 -

and P
= 40,610.00 million as of December 31, 2022 and 2021, respectively. Additional appropriated retained
earnings amounted to P = 30.40 billion and P
= 15.50 billion was utilized and released in 2023.

Retained earnings include the accumulated equity in undistributed net earnings of consolidated subsidiaries and
associates accounted for under the equity method amounting to nil and P = 3,942.56 million as of December 31,
2023 and 2022, respectively, which are not available for dividend declaration by the Parent Company until these
are declared by the investee companies.

In accordance with the Revised SRC Rule 68, Annex 68-D, the Parent Company’s retained earnings available for
dividend declaration as of December 31, 2023 and 2022 amounted to nil (includes Treasury shares which is not
available for dividend declaration amounting to P
= 5,749.63 million) and P
= 11,199.37 million, respectively.

Dividends
The following table shows the cash dividends declared by the Parent Company’s BOD on the outstanding capital
stock for each of the three (3) years ended December 31, 2023:

Amount Per Share

Declaration Record Common Participating Payment
Date Date Shares Preferred Shares Date
November 18, 2021 December 3, 2021 0.5310 0.05310 December 16, 2021
November 18, 2021 December 3, 2021 – 0.03000 December 16, 2021
November 17, 2022 December 2, 2022 0.3796 0.04800 December 19, 2022
March 28, 2023 April 14, 2023 0.6190 0.0620 April 28, 2023

The Parent Company has no dividends in arrears as of December 31, 2023, 2022 and 2021.

Treasury Shares
On September 13, 2022, the Parent Company’s BOD approved a buy-back program in relation to the Stock
Incentive Plan (SIP) for its senior leaders and officers. The Parent Company acquired 3,200,000 treasury shares
for a total amount of P
= 49.41 million.

On October 11, 2023, the Parent Company’s BOD approved a buy-back of its shares with Ayala Corporation and
Philwater Holdings Company, Inc. The Parent Company re-acquired its 288,998,734 common shares and
436,243,932 participating preferred shares, respectively, for a total amount of P
= 5.7 billion. This transaction
reduced Ayala Corporation’s effective economic stake from 30.4% to 22.5%.

In 2023 and 2022, the Parent Company reissued 401,011 shares and 655,151 shares, respectively, in relation to
the SIP, amounting to P
= 10.00 million and P
= 6.10 million, respectively.

As of December 31, 2023 and 2022, total number of treasury shares - common stock follows:

2023 2022
Number of shares at beginning of year 2,798,809 –
Acquisitions 288,998,734 3,200,000
Reissuance (654,971) (401,191)
Number of shares at end of year 291,142,572 2,798,809

As of December 31, 2023, total number of participating preferred shares held in treasury shares amounted to
436,243,932 shares.

Executive Stock Option Plan (Executive SOP), Expanded Executive SOP, and ESOWN
The subscribed shares are effectively treated as options exercisable within a given period which is the same time
as the grantee’s payment schedule.

On March 6, 2018, the Renumeration Committee of the Parent Company’s BOD approved the grants of ESOWN
equivalent to 16,054,873 shares at the subscription price of P
= 27.31 per share. The subscription price is
equivalent to the average closing price of Parent Company’s common shares at the PSE for twenty (20)
consecutive trading days ending March 6, 2018.

The fair values of stock options granted are estimated on the date of grant using the Binomial Tree Model and
Black-Scholes Merton Formula, taking into account the terms and conditions upon which the options were
granted. The expected volatility was determined based on an independent valuation.

*SGVFS187515*
 - 94 -

The fair value of stock options granted under ESOWN at grant date and the assumptions used to determine the
fair value of the stock options follows:

Grant Dates
March 7, 2018 February 10, 2015
Number of shares granted 16,054,873 7,281,647
Number of unsubscribed shares 5,161,140 884,873
Fair value of each option P
= 5.74 P
= 11.58
Weighted average share price P
= 26.55 P
= 21.35
Exercise price P
= 27.31 P
= 26.00
Expected volatility 24.92% 26.53%
Dividend yield 2.80% 2.55%
Risk-free interest rate 3.43% 3.79%

To enjoy the rights provided for in the ESOWN, the grantee should be with the Parent Company at the time the
holding period expires. The holding period of the ESOWN shares granted follows:

Year Holding Period

After one year from subscription date 40%
After two years from subscription date 30%
After three years from subscription date 30%

For the 2018 and 2015 grants, unsubscribed shares were forfeited.

There were no additional stock options in 2023 and 2022. Total cost arising from equity-settled share-based
payment transactions amounted to P = 30.39 million, P
= 19.91 million, and P
=3.39 million in 2023, 2022 and 2021,
respectively.

The expected life of the options is based on management’s estimate and is not necessarily indicative of exercise
patterns that may occur. The Parent Company’s expected volatility was used as an input in the valuation of the
outstanding options. The expected volatility reflects the assumption that the historical volatility is indicative of
future trends, which may also not necessarily reflect the actual outcome.

No other features of the options granted were incorporated into the measurement of fair value.

Stock Incentive Plan (SIP)

On February 24, 2022, the BOD approved the Stock Incentive Plan, which is a performance-based bonus
extended to the senior leadership, officers, and consultants of Manila Water, its subsidiaries and affiliates, in the
form of Manila Water shares as equity-settled transactions, in lieu of cash incentives and bonuses. Shares to be
awarded shall vest in three (3) years: 25.00% on the first anniversary date of the award; 25.00% on the second
anniversary date of the award; and 50.00% on the third anniversary date of the award. Vesting shall grant the
grantee absolute beneficial title and rights over the shares, including full dividend and voting rights. The shares
for the SIP will be acquired from the market and held in treasury before they are issued to the SIP grantees.
The SIP is in addition to the existing ESOP and ESOWN Plans.

Details of the SIP follows:

December 31, December 31,

2023 2022
Cumulative number of granted shares* 13,952,469 3,311,513
Date of grant April 14, 2023 April 22, 2022
Fair value of shares at grant date 19.66 19.20
*Includes 259,396 and 93,383 shares adjusted by dividend reinvestment plan as of December 31, 2023 and December 31, 2022.

Summary of vested and unvested shares follows:

December 31, December 31,

2023 2022
Vested shares 5,923,674 1,372,056
Unvested shares 8,028,795 1,939,457
13,952,469 3,311,513

*SGVFS187515*
 - 95 -

Total share-based payment cost arising from SIP amounted to P

= 62.71 million and P
= 26.08 million in 2023 and
2022, respectively.

Other equity reserves

On March 8, 2022, MWPVI increased its ownership interest in Davao Water from 51.00% to 100.00% through
the purchase of iWater's 49.00% ownership interest in Davao Water. The Group recognized a loss on the dilution
of noncontrolling interest amounting to P= 272.94 million and presented this as part of "Other equity reserves”
in the statements of financial position.

On April 7, 2022, MWPVI secured the approval of its BOD to purchase the 32.6% stake (107,601,639
common shares) of Metro Pacific Water Investment Corporation (MWIC) in MW Consortium for a purchase
price of P
= 107.60 million. The Group recognized a gain on the dilution of noncontrolling interest amounting
to P
= 74.37 million and presented this as part of "Other equity reserves" in the statements of financial position.

22. Earnings per Share

Earnings per share amounts attributable to equity holders of the Parent Company for the years ended
December 31, 2023, 2022, and 2021 were computed as follows:

2023 2022 2021

Net income (loss) attributable to common
equity holders of the Parent Company
Continuing operations P
= 5,594,150,378 P
= 5,927,227,031 P
= 3,683,802,583
Discontinued operations (581,602) (4,450,620) (10,473,975)
Dividends on preferred shares* (680,149,783) (756,574,986) (543,764,840)
Net income attributable to common
shareholders for basic and diluted
earnings per share P
= 4,913,418,993 P
= 5,166,201,425 P
= 3,129,563,768
Weighted average number of common shares
for basic earnings per share 2,810,282,353 2,883,830,801 2,543,172,950
Dilutive common shares arising from stock
options – – –
Adjusted weighted average number of
common stocks for diluted earnings per
share 2,810,282,353 2,883,830,801 2,543,172,950
EPS before discontinued operations
Basic earnings per share P
= 1.75 P
= 1.79 P
= 1.23
Diluted earnings per share P
= 1.75 P
= 1.79 P
= 1.23
EPS
Basic earnings per share P
= 1.75 P
= 1.79 P
= 1.23
Diluted earnings per share P
= 1.75 P
= 1.79 P
= 1.23
*Including participating preferred shares’ participation in earnings.

23. Related Party Transactions

Parties are considered to be related to the Group if it has the ability, directly or indirectly, to control the Group or
exercise significant influence over the Group in making financial and operating decisions, or vice versa, or where
the Group and the party are subject to common control or common significant influence. Related parties may be
individuals (being members of key management personnel and/or their close family members) or other entities
and include entities which are under the significant influence of related parties of the Group where those parties
are individuals, and post-employment benefit plans which are for the benefit of employees of the Group or of any
entity that is a related party of the Group.

In the normal course of business, the Group has transactions with related parties. The sales and investments
made to related parties are made at normal market prices. Service agreements are based on rates agreed upon
by the parties. Outstanding balances at year-end are unsecured, due for cash settlement or collection, and
interest-free except for balances related to cash in banks and cash equivalents and long-term debt. There have
been no guarantees provided for nor received on any related party receivables or payables. This assessment is
undertaken each financial year by examining the financial position of the related party and the market in which
the related party operates.

*SGVFS187515*
 - 96 -

Related party transactions are as follows:

a. The Parent Company entered into an Administrative and Support Services Agreement (ASSA) with Ayala in
1997, being its sponsor as required during the privatization process. The ASSA was initially effective for ten
(10) years and automatically renewable every five (5) years. Under the agreement, Ayala shall provide
technical and other knowledge, experience and skills as reasonably necessary for the development,
administration and operation of the concession, for which the Parent Company shall pay an annual base fee
of US$1.00 million and adjusted for the effect of CPI. As a result, certain key management positions are
occupied by employees of Ayala.

On March 1, 2017, the BOD confirmed the automatic renewal of the ASSA between the Parent Company
and Ayala for another five (5) years until July 30, 2022 and approved the amendment reducing the base fee
to P
= 1.00 per year beginning August 1, 2017. The ASSA was not renewed after expiration.

Total management and professional fees charged to operations arising from these agreements amounted to
nil, P
= 21.82 million, and P
= 84.91 million in 2023, 2022 and 2021, respectively. Total outstanding payables
amounted to nil as of December 31, 2023 and 2022 (see Note 14).

b. The Parent Company entered into a Consultancy Agreement with Prime Infrastructure Capital Holdings, Inc.
(PICI), an affiliate of Trident Water effective June 3, 2021. Under the agreement, PICI shall provide strategic
advice and assistance, for which the Parent Company and its subsidiaries shall pay PICI an amount equal to
2.70% of the net revenues of the Group for the calendar quarter from October 1, 2021 onwards. The
consultancy fee payable from June 3, 2021 to September 30, 2021 was equivalent to 2.25% of the net
revenues of the Group.

Total management and professional fees charged to operations arising from this agreement amounted to
P
= 986.55 million, P
= 689.44 million and P
= 254.72 million in 2023, 2022 and 2021, respectively. Total outstanding
payables amounted to P = 227.87 million and P
= 180.95 million as of December 31, 2023 and 2022, respectively
(see Note 14).

c. The following tables provide the total amount of all other transactions that have been entered into with the
Parent Company’s shareholders and affiliates for the relevant financial year:

Cash in Banks,
Cash Equivalents and Short-term Receivables and
Investments (Note 5) Contract Assets* (Note 6)
2023 2022 2023 2022
Shareholder:
Ayala P
=– P
=– P
= 203,231 P
= 542,587
Affiliates:
Trident Inc – – 5,330,000,000 5,330,000,000
ALI and subsidiaries – 263,248,693 305,264,854
WawaJVCo, Inc. – – 113,017,973 -–
Sureste Properties Inc. – – 32,450,297 25,781
Globe and subsidiaries – – 140,878 139,704
AC Industrial Technology Holdings,
Inc. (AITHI) and subsidiaries – – – 4,870
BPI and subsidiaries 1,737,370,625 1,364,127,924 143,138 2,592,322
1,737,370,625 1,364,127,924 5,739,000,979 5,638,027,531
P
= 1,737,370,625 P
= 1,364,127,924 P
= 5,739,204,210 P
= 5,638,570,118
*Includes trade, subscription, retention and interest receivables

Cash in banks and cash equivalents pertain to deposits and investments with original maturities of
three (3) months or less from the date of original acquisition.

*SGVFS187515*
 - 97 -

Trade receivables are primarily composed of receivables for water and used water services rendered by the
Group. These are non-interest bearing and are collectible within thirty (30) days from bill generation.

Payables and
Contract Liabilities* (Note 14) Long-term Debt (Note 15)
2023 2022 2023 2022
Shareholder:
PICI P
= 227,871,493 P
= 180,953,011 P
=– P
=–
Affiliates:
WawaJVCo 6,644,268,738 6,808,504,316
Prime Metro BMD 336,920,619 61,898,362 – –
ALI and subsidiaries 160,576,797 267,096,095 – –
BPI and Subsidiaries 16,766,491 819,283 4,422,703,097 3,199,508,589
Globe and subsidiaries 13,201,832 2,955,045 – –
HCX Technology Partners, Inc. 1,678,071 1,781,164 – –
Bestfull Holdings, Inc. and
subsidiaries 352,013 344,173 – –
Sureste Properties Inc. 236,538 – – –
7,174,001,099 7,143,398,438 4,422,703,097 3,199,508,589
P
= 7,401,872,592 P
= 7,324,351,449 P
= 4,422,703,097 P
= 3,199,508,589
*Includes trade, retention and interest payables

Trade payables pertain to retentions deducted from contractors’ billings and are normally paid within a year
after project acceptance.

Long-term debt pertains to loans made by Boracay Water, Laguna Water, Clark Water, Aqua Centro, South
Luzon, Calbayog Water and Bulakan Water with BPI (see Note 15).

Revenues Purchases
2023 2022 2021 2023 2022 2021
Shareholders:
PICI P
=– P
=– P
=– P
= 986,553,839 P
= 689,443,859 P
= 254,720,321
Ayala 7,256,034 4,530,470 3,895,104 – 21,823,200 114,664,008
7,256,034 4,530,470 3,895,104 986,553,839 711,267,059 369,384,329
Affiliates:
ALI and subsidiaries 857,456,517 740,211,689 495,254,953 69,120,702 38,079,208 27,650,260
WawaJVCo, Inc. 113,017,973 – – 737,601,443 134,357,841 –
Sureste Properties,
Inc. 72,567,696 3,790,000 – 1,115,193 1,107,752 500,080
IMI and subsidiaries 60,951,055 57,716,421 44,998,517 – – –
BPI and subsidiaries 55,246,860 21,912,761 3,393,774 100,036,277 73,737,733 3,541,225
AITHI and subsidiaries 7,751,482 6,771,342 4,696,832 – – 1,505,839,469
Globe and subsidiaries 4,486,935 1,072,639 1,354,227 86,746,788 54,675,771 45,843,681
HCX Technology
Partners, Inc. – – – 39,883,524 11,911,868 7,288,146
Bestfull Holdings, Inc.
and subsidiaries – – – 165,683 158,019 –
Prime Metro BMD
Corporation 1,213,769,455 751,785,469 -
AC Energy – – – – – 346,483,882
Ayala Healthcare
Holdings, Inc. – – – – – 547,163
1,171,478,518 831,474,852 549,698,303 2,248,439,065 1,065,813,661 1,937,693,906
P
= 1,178,734,552 P
= 836,005,322 P
= 553,593,407 P
= 3,234,992,904 P
= 1,777,080,720 P
= 2,307,078,235

Revenue is mainly attributable to water and used water services and facilities, and supervision fees
rendered by the Group to its shareholder and affiliates.

Purchases from related parties arise from the following transactions:

 Ayala and PICI for management fees;
 ALI and subsidiaries, and Bestfull Holdings and subsidiaries for rental of office space;
 BPI for banking transactions and financial services such as insurance;
 AITHI and its subsidiaries for acquisition of transportation equipment;
 Globe for telecommunication services;
 Ayala Healthcare Holdings, Inc. for COVID-19 tests;
 AC Energy for purchase of power;
 HCX Technology Partners, Inc. for payroll management services; and
 Sureste Properties, Inc. for representation expenses.
 WawaJVCo, Inc. for the for the supply of raw water

*SGVFS187515*
 - 98 -

d. On April 9, 2002, Laguna Water entered into a concession agreement (as amended on March 31, 2004,
July 22, 2009, and June 30, 2015) with PGL, one of its shareholders. Regulatory fees to PGL amounted to
P
= 75.34 million and P
= 88.87 million in 2023 and 2022, respectively (see Notes 1 and 29).

e. On December 17, 2009, Boracay Water entered into a concession agreement with TIEZA, one of its
shareholders. Concession fees paid to TIEZA amounted to P
= 31.79 million and P
= 28.39 million in 2023 and
2022, respectively (see Notes 1 and 29).

f. On January 15, 2016, MWPVI entered into a MOA with ALI and its subsidiaries and affiliates (the ALI Group)
whereby MWPVI shall exclusively provide water and used water services and facilities to all ALI Group
property development projects in the Philippines. Revenues earned by MWPVI from the agreement,
included under “Supervision fees”, amounted to P= 230.33 million, P
= 242.32 million, and P
= 187.67 million in
2023, 2022 and 2021, respectively (see Note 18).

g. On April 16, 2016, MWPVI entered into a MOA with Laguna Technopark Inc. (LTI), whereby through its
division, Estate Water, MWPVI shall exclusively provide water and used water services to LTI’s Cavite
Technopark located in Barangay Sabang, Naic, Cavite, and in pursuit of this objective, to construct, develop,
finance, and own the water facilities and used water facilities under the terms and conditions set out in the
MOA. For and in consideration of the construction and development of the water facilities and used water
facilities and the rendition of the services by MWPVI, LTI shall pay a capacity charge. Capacity charge,
included under “Supervision fees,” amounted to P = 8.38 million, P
= 26.11 million, and P
= 11.71 million in 2023,
2022 and 2021, respectively (see Note 18).

h. On December 20, 2017, Boracay Water signed a Fourth Omnibus Loan and Security Agreement in the
amount of P
= 2.40 billion with the BPI. The loan was used to finance the general corporate and capital
expenditures requirements of Boracay Water. The carrying value of loan as of December 31, 2023 and
2022 amounted to P = 1,499.83 million and P
=1,509.87 million, respectively (see Note 15).

i. On June 28, 2019, Laguna Water signed a ten (10)-year term loan facility amounting to P =2.50 billion with
BPI. The loan will be used to partially finance Laguna Water’s capital expenditure program. The carrying
value of the loan amounted to P
= 1,027.03 million and P
= 1,204.87 million as of December 31, 2023 and 2022,
respectively (see Note 15).

j. On August 17, 2023 Laguna Water and BPI finalized the Omnibus Loan and Security Agreement (Sixth
OLSA) loan facility amounting to P
= 1.60 billion. The loan will be used to finance capital expenditure projects
for 2023 to 2025. The first drawdown was made in October 23, 2023 amounting to P = 700.00 million. The
carrying value of the loan amounted to P
= 694.91 million as of December 31, 2023.

k. On August 6, 2019, MWSS along with the Parent Company signed a thirty (30)-year Wawa Bulk Water
Agreement with WawaJVCo, Inc., a joint venture company formed between Prime Metroline Infrastructure
Holdings Corporation and San Lorenzo Builders and Developers Corporation. This will involve the supply of
518 million liters per day of raw water from the Wawa and Tayabasan rivers and is among the medium-term
water supply augmentation measures identified to provide water security and sustainability to the consumers
of the East Service Area. On January 7, 2020, the parties executed the First Supplement to the Wawa Bulk
Water Agreement to reflect their agreement on the joint conditions precedent. On September 28, 2021, the
parties executed the Second Supplement to the Wawa Bulk Water Agreement to reflect the impact of the
COVID-19 pandemic on the timeline of the project.

On October 25, 2022, the construction of the Upper Wawa Dam was completed, and Wawa JVCo., Inc.
commenced the provision of initial 80 million liters per day of raw water to the Parent Company. The Parent
Company accounts for the Wawa Bulk Water Agreement under the intangible asset model recognizing SCA
and SCO amounting to P = 6,762.50 million in 2022. In 2023, the Parent Company recognized liquidated
damages against Wawa JVCo., Inc. amounting to P = 113.02 million and other income of P
= 138.85 million due
to unmet delivery of contracted 80 million liters per day of raw water.

l. On March 1, 2021, Aqua Centro signed a ten (10)-year loan facility amounting to P
= 233.00 million with BPI.
The proceeds of the loan will be used to finance the Company’s capital expenditures, future acquisitions,
and other general corporate requirements. As of December 31, 2023 and 2022, carrying value of the loan
amounted to P
= 231.71 million and P= 166.97 million, respectively.

m. On April 25, 2022, Clark Water was granted a P = 140.00 million credit facility by BPI to finance and refinance
its capital expenditure projects. The loan was fully paid in 2023. On June 15, 2023, Clark Water signed the
Omnibus Loan and Security Agreement (Third OLSA) loan facility amounting to P = 1.53 billion. The loan will
be used to finance capital expenditure projects for 2023 to 2025. In November and December of 2023, first

*SGVFS187515*
 - 99 -

and second loan drawdown took place amounting to P = 200.00 million and P
= 170.00 million, respectively. As of
December 31, 2023, the carrying value of the loan amounted to P
= 367.15 million (see Note 15).

n. On May 30, 2022, Bulakan Water drew a 150-day short-term loan with BPI amounting to P = 10.00 million.
The capital expenditures and its working capital requirements. The loan was fully paid in 2023. On January
31, March 23, October 24 and November 29, 2023, Bulakan Water made drawdowns from its BPI loan
facility amounting to P
=40.00 million, P
= 40.00 million, P
= 20.00 million and P
= 30.00 million, respectively. As of
December 2023, the carrying value of the loan amounted to P = 130.00 million.

o. In August 2022, Calasiao Water drew P = 63.00 million 150-day short-term loan with BPI to finance its
expenditures and its working capital requirements. This was rolled-over in December 2022. Moreover,
in December 2022, Calasiao Water drew additional short-term loan amounting to P = 40.00 million for
capital expenditure requirements. These loans were fully paid in 2023.

p. On August 18, 2021, South Luzon Water signed a P = 465.00 million term loan facility with BPI to partially
finance its capital expenditure projects. The carrying value of the loan as of December 31, 2023 and 2022
amounted to P = 323.08 million and P
= 168.91 million, respectively.

q. On October 12, 2021, Calbayog Water signed a P = 393.00 million term loan facility with BPI to partially finance
its capital expenditure projects. The carrying value of the loan as of December 31, 2023 and 2022
amounted to P = 149.00 million and P
= 148.88 million, respectively.

r. On February 24, 2022, the BOD approved the award for the design and construction of the Cabading
Reservoir and Booster Station to Prime BMD Corporation. This project is part of the water sources
roadmap of the MWSS to address the deficit in water supply of the East Zone in the next five (5) years.
In 2023 and 2022, total purchases by Parent Company related to the project amounted to P = 1,010.36 million
and P= 751.79 million, respectively.

s. One of the trustee banks which manages the Group’s retirement fund is BPI, an affiliate. The Group’s plan
assets under BPI amounted to P = 338.74 million and P
= 504.94 million as of December 31, 2023 and 2022,
respectively (see Note 16). As of December 31, 2023 and 2022, the plan assets include shares of stock of
Ayala, ALI, BPI, Globe, Bloomberry Corporation and ICTSI with a total fair value of P = 23.89 million and
P
= 36.13 million, respectively. As of December 31, 2023 and 2022, the plan assets include debt securities of
Ayala and ALI with a total fair value of P
=13.45 million and P
=13.29 million, respectively.

t. On September 27, 2023, Cebu Water obtained a loan from Provincial Government of Cebu and Vicsal
Development Corporation to finance the prepayment of its commercial loan from DBP. The carrying amount
of the shareholder loans as of December 31, 2023 amounted to P
= 264.72 million.

u. Compensation of key management personnel of the Group by benefit type, included as part of “Salaries,
wages and employee benefits,” are as follows:

2023 2022 2021

Short-term employee benefits P
= 865,940,476 P
= 750,307,855 P
= 617,990,169
Post-employment and long-term
employee benefits 48,018,392 28,185,877 29,630,420
Share-based payments 62,719,089 26,082,254 3,390,655
P
= 976,677,957 P
= 804,575,986 P
= 651,011,244

24. Significant Contracts with the West Zone Concessionaire

In relation to the Concession Agreement, the Parent Company entered into the following contracts with Maynilad:

a. Interconnection Agreement that provides for the arrangements on the cross-border flows both incidental or
permanent transfers, including the water interconnection points. The terms of the agreement provide,
among others, the cost and the volume of water to be transferred between zones. For sewerage, the Parent
Company and Maynilad may enter into separate contracts.

*SGVFS187515*
 - 100 -

b. Joint Venture Arrangement that will operate, maintain, renew, and as appropriate, decommission common
purpose facilities, and perform other functions pursuant to and in accordance with the provisions of the
Agreement and perform such other functions relating to the concession (and the concession of the West
Zone Concessionaire) as the Concessionaires may choose to delegate to the joint venture, subject to the
approval of MWSS.

c. In March 2010, MWSS entered into a loan agreement with The Export-Import Bank of China to finance the
Angat Water Utilization and Aqueduct Improvement Project Phase II (the Project). Total loan facility is
US$116.60 million with maturity of twenty (20) years, including five (5) years of grace period. Interest rate is
3% per annum. MWSS then entered into a MOA with the Parent Company and Maynilad for the Parent
Company and Maynilad to shoulder equally the repayment of the loan, with such repayment to be part of the
concession fees (see Note 10).

d. On May 12, 2015, MWSS entered into a MOA with the Parent Company and Maynilad for the Angat Water
Transmission Improvement Project (Angat Transmission Project). The Angat Transmission Project aims to
improve the reliability and security of the raw water coming from the Angat Dam through the rehabilitation of
the transmission system from Ipo to La Mesa and the application of water safety, risk and asset
management plans. Subsequently, on May 27, 2016, MWSS entered into a loan agreement with Asian
Development Bank to finance the Angat Transmission Project. The loan amounts to US$123.30 million with
a maturity of twenty-five (25) years including a seven (7)-year grace period. As stipulated in the MOA, the
Parent Company and Maynilad shall shoulder equally the repayment of the loan and all reasonable
expenditures related to the Project with such payments to form part of the concession fees.

c. In 2016, MWSS entered into a MOA with the Parent Company and Maynilad which was subsequently
amended in 2018 for the New Centennial Water Source - Kaliwa Dam Project (NCWS-KDP). The
NCWS-KDP aims to develop a new water source in order to meet the increasing water demand by
constructing a dam for MWSS service area’s domestic water supply.

To partially finance the NCWS-KDP, MWSS entered into a Preferential Buyer’s Credit Loan Agreement with
The Export-Import Bank of China in 2018 amounting to US$211.21 million with a maturity of twenty (20)
years including a seven (7)-year grace period. As stipulated in the MOA, the Parent Company and Maynilad
shall shoulder equally the repayment of the loan and all reasonable expenditures related to the Project with
such payments to form part of the concession fees.

d. In 2021, the Parent Company and Maynilad entered into a contract with Dohwa Engineering, Co. Ltd. for the
construction management of the proposed Angat Water Transmission Project (Tunnel 5). On January 25,
2022, the Parent Company and Maynilad entered into a contract with China International Water and Electric
Corp. for the design and build of the proposed Angat Water Transmission Project (Tunnel 5). The contractor
will provide the necessary resources, skills and expertise for the performance and completion of certain civil,
electro-mechanical, installation and other related works. The Angat Water Transmission Project (Tunnel 5)
is part of the MWSS’s water security program which aims to provide (i) additional nineteen (19) cubic meters
per second of raw water supply, and (ii) improve the reliability and operational flexibility of the Umiray-Angat-
Ipo raw water conveyance system.

e. In 2022, the Parent Company and Maynilad entered into a Bulk Water Sale and Purchase Agreement
wherein the Parent Company will supply raw and treated water to Maynilad to provide adequate service to
the customers of Maynilad in the West Zone. In 2023 and 2022, total cross-border billings to Maynilad
amounted to P= 543.90 million and P
= 273.65 million, respectively (see Note 18).

On February 1, 2024, the Parent Company and Maynilad entered into a Bulk Water Supply Agreement
wherein the Parent Company will supply raw and treated water to Maynilad for a period of one (1) year.

25. Assets Held in Trust

MWSS
The Parent Company was granted the right to operate, maintain in good working order, repair, decommission
and refurbish the movable property required to provide the water and sewerage services under the Concession
Agreement. The legal title to all movable property in existence at the Commencement Date, however, shall be
retained by MWSS and upon expiration of the useful life of any such movable property as may be determined by
the Parent Company, such movable property shall be returned to MWSS in its then-current condition at no
charge to MWSS or the Parent Company.

*SGVFS187515*
 - 101 -

The Concession Agreement also provides for the Concessionaires to have equal access to MWSS facilities
involved in the provision of water supply and sewerage services in both the East and West Zones including, but
not limited to, the MWSS management information system, billing system, telemetry system, central control room
and central records.

The net book value of the facilities transferred to the Parent Company on Commencement Date based on
MWSS’ closing audit report amounted to P =4.60 billion, with a sound value of P
= 10.40 billion.

MWSS’ corporate headquarters is made available to the Concessionaires starting August 1, 1997, subject to
periodic renewal by mutual agreement of the parties. On August 28, 2012, additional office space was leased by
the Parent Company. The lease was last renewed on July 8, 2019. Payments amounting to P = 63.83 million,
P
= 40.37 million, and P
= 33.37 million was recorded in 2023, 2022 and 2021, respectively, as deduction to lease
liabilities.

In March 2015, the Parent Company and MWSS entered into an agreement for the lease of a portion of the San
Juan Reservoir and Aqueduct Complex being utilized by the Parent Company as stockyard for its pipes and
other materials. The lease agreement shall continue to be in effect until the termination of the Concession
Agreement. Rent payments amounting to P =16.20 million each year is recorded from 2019 to 2021 as deduction
to lease liabilities.

CWD
On October 23, 2017, Calasiao Water was granted the right to develop, manage, operate, maintain, repair,
refurbish and improve, expand, and as appropriate, decommission all fixed and movable assets, including
movable property but excluding retained assets, required to provide water delivery and sanitation services in the
Municipality of Calasiao. Legal title to all facilities (including any fixed assets resulting from the exercise of rights
and powers), other than new assets contributed by Calasiao Water, shall remain with CWD.

CCWD
On July 3, 2019, Calbayog Water was granted the right to operate, maintain, repair, improve, expand, renew,
and as appropriate, decommission all fixed and movable assets, including movable property but excluding
retained assets, required to provide water supply and sanitation services in the service area of CCWD.

TIEZA
Boracay Water was granted the right to operate, maintain in good working order, repair, decommission and
refurbish all fixed and movable property (except retained assets) required to provide the water and sewerage
services under its concession agreement with TIEZA. The legal title to all these assets in existence at the
commencement date, however, shall be retained by TIEZA and upon expiration of the useful life of such assets
as may be determined by Boracay Water, such assets shall be returned to TIEZA in its then-current condition at
no charge to TIEZA or Boracay Water.

The net book value of the facilities transferred to Boracay Water on commencement date based on TIEZA’s
closing audit report amounted to P = 618.24 million.

CDC
Clark Water was granted the right to finance, design and construct new facilities and to manage, exclusively
possess, occupy, operate, repair, maintain, decommission, and refurbish all facilities, except private deep wells,
to provide and manage the water and wastewater-related services in the CFZ.

BuWD
On June 14, 2019, Bulakan Water was granted the right to operate, maintain, repair, improve, expand, renew,
and as appropriate, decommission all fixed and movable assets, including movable property but excluding
retained assets, required to provide water delivery and sanitation services in the service area of BuWD.

TnWD
On February 4, 2019, South Luzon Water was granted the right to operate, maintain, repair, improve, expand,
renew, and as appropriate, decommission all fixed and movable assets, including movable property but
excluding retained assets, required to provide water supply and sanitation services in the service area of TnWD.

*SGVFS187515*
 - 102 -

OWD
On October 12, 2017, Obando Water was granted the right to manage, operate, maintain, repair, refurbish and
improve, expand and as appropriate, decommission all fixed and movable assets, including movable property but
excluding retained assets, required to provide water delivery and sanitation services in the Municipality of
Obando. Legal title to all facilities (including any fixed assets resulting from the exercise of rights and powers),
other than new assets contributed by Obando Water, shall remain with OWD.

PGL
Laguna Water was granted the right to manage, occupy, operate, repair, maintain, decommission and refurbish
the property required to provide water services under its concession agreement with PGL. The legal title of all
property in existence at the commencement date shall be retained by PGL. Upon expiration of the useful life of
any such property as may be determined by Laguna Water, such property shall be returned to PGL in its then
condition at no charge to PGL or Laguna Water.

PAGWAD
On January 21, 2019, Laguna Water was granted the right to operate, finance, maintain, repair, improve,
expand, renew, and as appropriate, decommission all fixed and movable assets, including movable property but
excluding retained assets, required and exclusively used to provide water delivery and sanitation services in the
service area of PAGWAD.

LWD
On July 3, 2019, Aqua Centro was granted the right to operate, maintain, repair, improve, expand, renew, and as
appropriate, decommission all fixed and movable assets, including movable property but excluding retained
assets, required to provide water supply in the service area of LWD.

26. Segment Information

Business segment information is reported on the basis that is used internally for evaluating segment
performance and deciding how to allocate resources among operating segments. Accordingly, the segment
information is reported based on geographic location.

The Group’s BOD and Management Committee monitor the operating results of its business segments
separately for the purpose of making decisions about resource allocation and performance assessment.
Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the
consolidated financial statements.

Transfer prices between operating segments are on an arms’ length basis in a manner similar to transactions
with third parties.

The amount of segment assets and liabilities are based on measurement principles that are similar with those
used in measuring assets and liabilities in the consolidated statements of financial position which is in
accordance with PFRS.

The segments where the Group operates follow:

 Manila Concession and Head Office – represents the operations of the Manila Concession (East Zone) of
the Parent Company in accordance with its Concession Agreement.
 Domestic Subsidiaries – represents the financial results of the Philippine businesses such as MWIS,
Calasiao Water, MWPVI (including Laguna Water, Clark Water, Boracay Water, North Luzon Water,
Filipinas Water, Obando Water, Bulakan Water, Ilagan Water, South Luzon Water, MW Consortium, Cebu
Water, Davao Water, Tagum Water, BMDC, Aqua Centro, MWTV, EcoWater, Leyte Water, Zamboanga
Water, and Calbayog Water).
 Foreign Subsidiaries – consists of businesses outside the Philippines under MWAP (MWSAH, Asia Water,
TDWH, KDWH, MWTC, MSEA, and PTMWI).

*SGVFS187515*
 - 103 -

Details of the Group’s operating segments as of and for the years ended December 31, 2023, 2022, and 2021
are as follows:

2023
Manila
Concession and Domestic Foreign Consolidation
Head Office Subsidiaries Subsidiaries Adjustments Consolidated
(In Thousands)
Revenue
Sales to external customers P
= 24,106,439 P
= 7,054,105 P
= 4,493 (P
= 736,969) P
= 30,428,068
Finance income from contract assets – 281,799 – – 281,799
Operating expenses (excluding
depreciation and amortization) 7,165,296 4,187,594 103,187 (661,737) 10,794,340
Depreciation and amortization 3,554,117 755,191 1,474 (3,238) 4,307,544
Equity in net earnings (loss) of – – (3,561,492) – (3,561,492)
associates
Other income (expenses) - net (1,758,524) (451,848) 29,847 (890,102) (3,070,627)
Income (loss) before income tax 11,628,502 1,941,271 (3,631,813) (962,096) 8,975,864
Provision for income tax 2,819,494 372,598 288 (87,803) 3,104,577
Net income (loss) from continuing 8,809,008 1,568,673 (3,632,101) (874,293) 5,871,287
operations
Net loss from discontinued – (764) – (67) (831)
operations
Net income (loss) P
= 8,809,008 P
= 1,567,909 (P
= 3,632,101) (P
= 874,360) P
= 5,870,456

Other information
Segment assets, exclusive of
investments in associates, derivative
assets and deferred tax assets - net P
= 173,896,719 P
= 40,766,778 P
= 11,303,106 (P
= 28,362,297) P
= 197,604,306
Deferred tax assets - net – 499,689 – – 499,689
Investments in associates – – 13,288,157 (2,096,589) 11,191,568
Derivative assets 391,839 – - - 391,839
P
= 174,288,558 P
= 41,266,467 P
= 24,591,263 (P
= 30,458,886) P
= 209,687,402

Segment liabilities P
= 106,695,585 P
= 27,685,042 P
= 8,919,969 (P
= 3,732,638) P
= 139,567,958

2022
Manila
Concession and Domestic Foreign Consolidation
Head Office Subsidiaries Subsidiaries Adjustments Consolidated
(In Thousands)
Revenue
Sales to external customers P
= 17,625,349 P
= 5,870,739 P
= 24,710 (P
= 978,352) P
= 22,542,446
Finance income from contract assets – 256,538 – – 256,538
Operating expenses (excluding
depreciation and amortization) 7,157,034 3,719,348 252,315 (331,648) 10,797,049
Depreciation and amortization 2,284,402 774,855 1,489 (14,732) 3,046,014
Equity share in net income of associates – – 520,067 – 520,067
Other income (expenses) - net (684,973) (465,062) 558,165 (723,152) (1,315,022)
Income (loss) before income tax 7,498,940 1,168,012 849,138 (1,355,124) 8,160,966
Provision for income tax 1,508,217 286,854 1,320 216,809 2,013,200
Net income (loss) from continuing
operations 5,990,723 881,158 847,818 (1,571,933) 6,147,766
Net loss from discontinued operations – (602) – (5,756) (6,358)
Net income (loss) P
= 5,990,723 P
= 880,556 P
= 847,818 (P
= 1,577,689) P
= 6,141,408

Other information
Segment assets, exclusive of
investments in associates, derivative
assets and deferred tax assets - net P
= 154,331,995 P
= 38,264,918 P
= 6,889,045 (23,047,191) P
= 176,438,767
Deferred tax assets - net 210,699 424,524 – – 635,223
Investments in associates – – 14,287,220 1,147,293 15,434,513
Derivative assets 2,295,670 – – – 2,295,670
P
= 156,838,364 P
= 38,689,442 P
= 21,176,265 (P
= 21,899,898) P
= 194,804,173

Segment liabilities P
= 88,885,291 P
= 25,668,359 P
= 8,674,622 (P
= 1,877,358) P
= 121,350,914

*SGVFS187515*
 - 104 -

2021
Manila
Concession and Domestic Foreign Consolidation
Head Office Subsidiaries Subsidiaries Adjustments Consolidated
(In Thousands)
Revenue
Sales to external customers P
= 16,084,110 P
= 4,533,820 P
= 20,799 (P
= 346,342) P
= 20,292,387
Finance income from contract –
assets – 237,712 – 237,712
Operating expenses (excluding
depreciation and amortization) 6,130,908 3,191,390 136,831 (239,352) 9,219,777
Depreciation and amortization 2,930,272 726,868 1,410 (30,308) 3,628,242
Equity share in net income of
associates – – 569,460 – 569,460
Provision for impairment losses – 130,319 – – 130,319
Other income (expenses) – net (1,950,377) (651,529) 572,882 (783,802) (2,812,826)
Income (loss) before income tax 5,072,553 71,426 1,024,900 (860,484) 5,308,395
Provision for income tax 1,445,916 93,537 69 (229) 1,539,293
Net income (loss) from continuing
operations 3,626,637 (22,111) 1,024,831 (860,255) 3,769,102
Net loss from discontinued operations – (13,761) – (1,202) (14,963)
Net income (loss) P
= 3,626,637 (P
= 35,872) P
= 1,024,831 (P
= 861,457) P
= 3,754,139

Other information
Segment assets, exclusive of
investments in associates,
derivative assets and deferred tax
assets - net P
= 128,731,660 P
= 35,528,252 P
= 6,459,251 (P
= 21,355,443) P
= 149,363,720
Deferred tax assets - net 802,653 427,554 – – 1,230,207
Investments in associates – – 13,282,212 1,254,074 14,536,286
Derivative assets 386,712 – – – 386,712
P
= 129,921,025 P
= 35,955,806 P
= 19,741,463 (P
= 20,101,369) P
= 165,516,925

Segment liabilities P
= 66,962,840 P
= 23,700,990 P
= 8,215,738 (P
= 1,687,807) P
= 97,191,761

The Group does not have a single customer contributing more than 10.00% of its total revenue.

Disaggregated revenue information

The following are the disaggregation of the Group’s revenue from contracts with customers as of
December 31, 2023, 2022 and 2021:

2023
Manila Concession Domestic
and Head Office Subsidiaries Foreign Subsidiaries Total
(In Thousands)
Revenue from contracts with
customers:

Water and used water revenues P

= 23,255,824 P
= 5,248,155 P
=– P
= 28,503,979
Other operating income 799,522 1,121,944 2,623 1,924,089
P
= 24,055,346 P
= 6,370,099 P
= 2,623 P
= 30,428,068

Timing of revenue recognition:

Revenue recognized over time P
= 23,956,300 P
= 6,275,408 P
= 2,623 P
= 30,234,331
Revenue recognized at a point in
time 99,046 94,691 – 193,737
P
= 24,055,346 P
= 6,370,099 P
= 2,623 P
= 30,428,068

2022
Manila Concession Domestic
and Head Office Subsidiaries Foreign Subsidiaries Total
(In Thousands)
Revenue from contracts with customers:
Water and used water revenues P
= 16,434,860 P
= 4,205,864 P
=– P
= 20,640,724
Other operating income 626,850 1,253,171 21,701 1,901,722
P
= 17,061,710 P
= 5,459,035 P
= 21,701 P
= 22,542,446

Timing of revenue recognition:

Revenue recognized over time P
= 16,982,447 P
= 5,405,602 P
= 21,701 P
= 22,409,750

Revenue recognized at a point in time 79,263 53,433 – 132,696

P
= 17,061,710 P
= 5,459,035 P
= 21,701 P
= 22,542,446

*SGVFS187515*
 - 105 -

2021
Manila Concession Domestic
and Head Office Subsidiaries Foreign Subsidiaries Total
(In Thousands)
Revenue from contracts with customers:
Water and used water revenues P
= 15,775,550 P
= 3,511,589 P
=– P
= 19,287,139
Other operating income 261,045 744,203 – 1,005,248
P
= 16,036,595 P
= 4,255,792 P
=– P
= 20,292,387

Timing of revenue recognition:

Revenue recognized over time P
= 15,962,645 P
= 4,023,927 P
=– P
= 19,986,572
Revenue recognized at a point in time 73,950 231,865 – 305,815
P
= 16,036,595 P
= 4,255,792 P
=– P
= 20,292,387

27. Fair Value Measurement

The carrying amounts approximate fair values for the Group’s financial assets and liabilities due to its short-term
maturities except for the following financial assets and financial liabilities as of December 31, 2023 and 2022:

2023
Fair Value Fair Value
Significant Significant
Fair Value Observable Unobservable
Quoted Market Inputs Inputs
Carrying Value Prices (Level 1) (Level 2) (Level 3)
(In Thousands)
Financial assets at fair value
Derivative assets P
= 391,839 P
=– P
=– P
= 391,839

Financial assets at amortized cost

Contract assets from MCWD, TWD
and CIWD 1,281,478 – – 3,660,202
P
= 1,673,317 P
=– P
=– P
= 4,052,041

Other financial liabilities

Long-term debt P
= 99,247,451 P
= 25,492,902 P
=– P
= 74,183,461
Service concession obligations 16,124,821 – – 17,399,130
Customers’ guaranty deposits and
other deposits 342,630 – – 118,520
P
= 115,714,902, P
= 25,492,902 P
=– P
= 91,701,111

2022
Fair Value
Fair Value Significant
Fair Value Quoted Significant Unobservable
Market Prices Observable Inputs Inputs
Carrying Value (Level 1) (Level 2) (Level 3)
(In Thousands)
Financial assets at fair value
Derivative assets P
= 2,295,670 P
=– P
=– P
= 2,295,670

Financial assets at amortized cost

Contract assets from MCWD, TWD
and CIWD 2,026,081 – – 4,416,000
P
= 4,321,751 P
=– P
=– P
= 6,711,670

Other financial liabilities

Long-term debt P
= 84,669,785 P
= 24,487,789 P
=– P
= 55,556,685
Service concession obligations 16,043,389 – – 16,074,992
Customers’ guaranty deposits and
other deposits 327,020 – – 90,626
P
= 101,040,194 P
= 24,487,789 P
=– P
= 71,722,303

*SGVFS187515*
 - 106 -

The methods and assumptions used by the Group in estimating the fair value of the long-term financial assets at
amortized cost and other financial liabilities such as long-term debt, service concession obligations, and
customers’ guaranty deposits and other deposits are as follows:

a. The fair values of derivative assets, specifically forward contracts, are calculated using valuation techniques
with inputs and assumptions that are based on market unobservable data and conditions. The fair values of
the US dollar-denominated bonds are based on quoted prices. The fair vales of financial assets at amortized
cost, and other financial liabilities are estimated using the discounted cash flow methodology using the
Group's current incremental borrowing rates for similar borrowings with maturities consistent with those
remaining for the liability being valued.

b. The discount rates used for PHP-denominated loans were 0.5% to 7.86% in 2023 and 0.5% to 7.35% in
2022 while the discount rates used for foreign currency-denominated loans ranged from 7.00% to 9.25% in
2023 and 6.97% to 9.00% in 2022.

The Group enters into derivative financial instruments with various counterparties, principally financial institutions
with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques,
which employ the use of market observable inputs. The most frequently applied valuation techniques include
forward pricing and swap models using present value calculations. The models incorporate various inputs
including the foreign exchange spot and forward rates, yield curves of the respective currencies and currency
basis spreads between the respective currencies. As at December 31, 2023 and December 31, 2022, the
mark-to market value of other derivative asset positions is net of a credit valuation adjustment attributable to
derivative counterparty default risk. The changes in counterparty credit risk had no material effect on the hedge
effectiveness assessment for derivatives designated in hedge relationships and other financial instruments
recognized at fair value.

Fair Value Hierarchy

During the periods ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2
fair value measurements and no transfers into and out of Level 3 fair value measurement.

28. Financial Risk Management Objectives and Policies

The Group’s principal financial instruments comprise of cash and cash equivalents, short-term investments,
contract assets from MCWD, TWD and CIWD, derivative assets, short-term debt, long-term debt, and service
concession obligations. The main purpose of the Group’s financial instruments is to fund its operations and
capital expenditures. The main risks arising from the use of financial instruments are interest rate risk, foreign
exchange risk, credit risk and liquidity risk. The Group has other financial assets such as trade receivables and
payables which arise directly from the conduct of its operations.

The Parent Company’s BOD reviews and approves the policies for managing each of these risks. The Group
monitors risks arising from all financial instruments and regularly report financial management activities and the
results of these activities to the Parent Company’s BOD. In addition, the Group ensures that all loan covenants
are complied with.

The Group’s risk management policies are summarized below:

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Group’s exposure to interest rate risk relates primarily to its financial
instruments with floating and/or fixed rates. Fixed rate financial instruments are subject to fair value interest rate
risk while floating rate financial instruments are subject to cash flow interest rate risk.

The Group’s policy is to manage the interest payments using a mix of fixed and variable rate debts to minimize
the Group’s exposure to changes in interest rates primarily from its long-term debt. As of December 31, 2023
and 2022, the Group’s mix of fixed interest and floating interest rate of long-term debt are 48% to 52% and 57%
to 43%, respectively.

As of December 31, 2023 and December 31, 2022 the fixed interest rates of the Group’s foreign currency
denominated long-term debt are 4.375% and 5.16% to 7.30% for Peso denominated long-term debt.
Floating interest rates are based on 6-month EURIBOR or BIBOR plus margin, SOFR plus margin,
PHP BVAL Reference Rates and BSP Term facility rate plus margin as of December 31, 2023 and
December 31, 2022.

*SGVFS187515*
 - 107 -

The following tables summarize the maturity profile of the Group’s long-term debt based on contractual undiscounted principal payments:
2023*
Total in Original Total in Original Total in Original Total in Original Total in Original
Currency Currency Currency Currency Currency Total
Due in 2024 Due in 2025 Due in 2026 Due in 2027 Due in 2028 Due after 2029 (In PHP) (In JPY) (In USD) (In EUR) (In THB) (In PHP)
Liabilities:
Long-term debt
East Zone loans:
Fixed Rate (exposed to fair value risk)
P
= 5.00 billion PNB Loan P
= 500,000,000 P
= 500,000,000 P
= 500,000,000 P
= 500,000,000 P
= 375,000,000 P
=– P
= 2,375,000,000 ¥– $– €– THB– P= 2,375,000,000
P
= 5.00 billion BDO Loan P
= 1,800,000,000 P
=– P
=– P
=– P
=– P
=– P
= 1,800,000,000 ¥– $– €– THB– P= 1,800,000,000
US$500.00 million sustainability bonds $– $– $– $– $– $500,000,000 P
=– ¥– $500,000,000 €– THB– P
= 27,685,000,000
Floating Rate (exposed to cash flow risk)
MWMP Loan $7,721,832 $7,721,832 $7,721,832 $7,721,832 $7,721,832 $65,545,504 P
=– ¥– $104,154,664 €– THB– P= 5,767,043,746
P
= 5.00 billion BDO Loan P
=– P
= 1,200,000,000 P
=– P
= 2,000,000,000 P
=– P
=– P= 3,200,000,000 ¥– $– €– THB– P= 3,200,000,000
EUR250.00 million Loan €57,500,000 €– €– €– €– €– P
=– ¥– $– €57,500,000 THB– P= 3,532,673,500
P
= 15.00 billion Chinabank Loan P
=– P
=– P
= 2,148,000,000 P
= 2,142,000,000 P
= 2,142,000,000 P
= 8,568,000,000 P
= 15,000,000,000 ¥– $– €– THB– P
= 15,000,000,000
P
= 10.00 billion with MBTC P
= 900,000,000 P
= 900,000,000 P
= 900,000,000 P
= 900,000,000 P
= 900,000,000 P
= 4,500,000,000 P= 9,000,000,000 ¥– $– €– THB– P= 9,000,000,000
P
= 3.00 billion with LBP P
=– P
= 333,600,000 P
= 333,600,000 P
= 333,600,000 P
= 333,600,000 P
= 1,665,600,000 P= 3,000,000,000 ¥– $– €– THB– P= 3,000,000,000
P
= 7.00 billion with LBP P
=– P
= 389,200,000 P
= 389,200,000 P
= 389,200,000 P
= 389,200,000 P
= 1,943,200,000 P= 3,500,000,000 ¥– $– €– THB– P= 3,500,000,000
Subsidiaries’ loans:
Fixed Rate (exposed to fair value risk)
P
= 1.15 billion Clark Water RCBC Loan P
= 95,833,333 P
= 95,833,333 P
= 95,833,333 P
= 95,833,333 P
= 95,833,333 P
= 167,708,333 P
= 646,875,000 ¥– $– €– THB– P
= 646,875,000
P
= 1.53 billion Clark Water BPI Loan P
=– P
=– P
=– P
= 52,836,000 P
= 52,836,000 P
= 264,328,000 P
= 370,000,000 ¥– $– €– THB– P
= 370,000,000
P
= 0.50 billion Laguna Water DBP Loan P
= 29,411,765 P
= 29,411,765 P
= 29,411,765 P
= 29,411,765 P
= 29,411,765 P
= 139,283,375 P
= 286,342,198 ¥– $– €– THB– P
= 286,342,198
P
= 0.83 billion Laguna Water DBP Loan P
= 50,484,848 P
= 50,484,848 P
= 50,484,848 P
= 50,484,848 P
= 50,484,848 P
= 239,068,849 P
= 491,493,092 ¥– $– €– THB– P
= 491,493,092
P
= 2.50 billion Laguna Water SBC Loan P
= 192,307,692 P
= 192,307,692 P
= 192,307,692 P
= 192,307,692 P
= 192,307,692 P
= 379,281,028 P
= 1,340,819,490 ¥– $– €– THB– P
= 1,340,819,490
P
= 2.50 billion Laguna Water BPI Loan P
= 179,310,345 P
= 179,310,345 P
= 179,310,345 P
= 179,310,345 P
= 179,310,345 P
= 130,482,581 P
= 1,027,034,305 ¥– $– €– THB– P
= 1,027,034,305
P
= 1.60 billion Laguna Water BPI Loan P
=– P
=– P
= 24,990,000 P
= 99,960,000 P
= 99,960,000 P
= 469,995,499 P
= 694,905,499 ¥– $– €– THB– P
= 694,905,499
P
= 0.50 billion Boracay Water DBP-SBC THB–
Loan P
= 8,558,961 P
= 31,660,189 P
= 31,660,189 P
= 31,660,189 P
= 31,660,189 P
= 87,065,519 P
= 222,265,235 ¥– $– €– P
= 222,265,235
P
= 0.50 billion Boracay Water DBP-SBC P
= 11,240,434 P
= 44,961,735 P
= 44,961,735 P
= 44,961,735 P
= 44,961,735 P
= 123,644,770 P
= 314,732,143 THB–
Loan ¥– $– €– P
= 314,732,143
P
= 0.65 billion Boracay Water DBP-SBC THB–
Loan P
= 19,345,238 P
= 77,380,952 P
= 77,380,952 P
= 77,380,952 P
= 77,380,952 P
= 212,797,619 P
= 541,666,667 ¥– $– €– P
= 541,666,667
P
= 2.40 billion Boracay Water BPI Loan P
= 15,200,000 P
= 72,200,000 P
= 136,800,000 P
= 187,568,000 P
= 199,424,000 P
= 897,408,000 P
= 1,508,600,000 ¥– $– €– THB– P
= 1,508,600,000
P
= 0.45 billion Tagum Water PNB Loan P
= 33,666,667 P
= 33,666,667 P
= 33,666,667 P
= 33,666,667 P
= 33,666,667 P
= 126,250,000 P
= 294,583,333 ¥– $– €– THB– P
= 294,583,333
P
= 0.15 billion Tagum Water PNB Loan P
= 13,333,333 P
= 13,333,333 P
= 13,333,333 P
= 13,333,333 P
= 13,333,333 P
= 50,000,000 P
= 116,666,665 ¥– $– €– THB– P
= 116,666,665
P
= 7.00 billion MWPVI Loan P
= 667,100,000 P
= 847,650,000 P
= 847,650,000 P
= 847,650,000 P
= 847,650,000 P
= 3,390,600,000 P
= 7,448,300,000 ¥– $– €– THB– P
= 7,448,300,000
P
= 0.39 billion Calbayog Water BPI Loan P
= 4,669,000 P
= 14,674,000 P
= 20,010,000 P
= 20,010,000 P
= 20,010,000 P
= 69,502,000 P
= 148,875,000 ¥– $– €– THB– P
= 148,875,000
P
= 0.23 billion Aqua Centro BPI Loan P
= 31,082,200 P
= 31,082,200 P
= 31,082,200 P
= 31,082,200 P
= 31,082,200 P
= 77,589,000 P
= 233,000,000 ¥– $– €– THB– P
= 233,000,000
P
= 0.47 billion South Luzon Water BPI Loan P
= 21,677,500 P
= 43,355,000 P
= 43,355,000 P
= 43,355,000 P
= 43,355,000 P
= 129,902,500 P
= 325,000,000 ¥– $– €– THB– P
= 325,000,000
Floating Rate (exposed to cash flow risk)
P
= 0.54 billion Clark Water DBP Loan P
= 44,583,333 P
= 44,583,333 P
= 44,583,333 P
= 44,583,333 P
= 44,583,333 P
= 234,062,500 P
= 456,979,167 ¥– $– €– THB– P
= 456,979,167
P
= 0.12 billion Boracay Water DBP-SBC THB–
Loan P
= 1,945,241 P
= 10,356,618 P
= 10,356,618 P
= 10,356,618 P
= 10,356,618 P
= 28,480,699 P
= 71,852,412 ¥– $– €– P
= 71,852,412
THB5,300,000,0
THB5.30 billion Loan 00 THB– THB– THB– THB– THB– P
=– ¥– $– €– THB5,300,000,000 P = 8,533,919,203
Total in Original Currency P
= 54,414,990,206 ¥– $604,154,664 €57,500,000 THB5,300,000,000 P= 99,933,626,655
Total in PHP P
= 17,113,900,431 P
= 5,562,609,848 P
= 6,605,535,848 P
= 8,778,109,848 P
= 6,664,965,848 P
= 55,208,504,829 P
= 54,414,990,206 P
=– P
= 33,452,043,746 P
= 3,532,673500 P
= 8,533,919,203 P
= 99,933,626,655
Interest on financial instruments classified as floating rate is repriced on a semi-annual basis, unless otherwise stated. Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument.
The spot exchange rates used were P = 55.3700 to US$1, P = 61.738 to EUR1, and = P1.6102 to THB1 in 2023.
*Excludes the CAD0.87 million Laguna Water loan whose repayment date is related to the completion of the funded project

*SGVFS187515*
 - 108 -

2022*
Total in Original Total in Original Total in Original Total in Original Total in Original
Currency Currency Currency Currency Currency Total
Due in 2023 Due in 2024 Due in 2025 Due in 2026 Due in 2027 Due after 2028 (In PHP) (In JPY) (In USD) (In EUR) (In THB) (In PHP)
Liabilities:
Long-term debt
East Zone loans:
Fixed Rate (exposed to fair value risk)
P
= 5.00 billion PNB Loan P
= 500,000,000 P
= 500,000,000 P
= 500,000,000 P
= 500,000,000 P
= 500,000,000 P
= 375,000,000 P
= 2,875,000,000 ¥– $– €– THB– P= 2,875,000,000
P
= 5.00 billion BDO Loan P
=– P
= 1,800,000,000 P
=– P
=– P
=– P
=– P
= 1,800,000,000 ¥– $– €– THB– P= 1,800,000,000
US$500.00 million sustainability bonds $– $– $– $– $– $500,000,000 P
=– ¥– $500,000,000 €– THB– P
= 27,877,500,000
Floating Rate (exposed to cash flow risk)
MWMP Loan $7,721,832 $7,721,832 $7,721,832 $7,721,832 $7,721,832 $73,267,336 P
=– ¥– $111,876,496 €– THB– P= 6,237,674,034
P
= 5.00 billion BDO Loan P
=– P
=– P
= 1,200,000,000 P
=– P
= 2,000,000,000 P
=– P= 3,200,000,000 ¥– $– €– THB– P= 3,200,000,000
EUR250.00 million Loan €62,500,000 €57,500,000 €– €– €– €– P
=– ¥– $– €120,000,000 THB– P= 7,146,540,000
PHP Chinabank Loan P
=– P
=– P
=– P
= 1,646,800,000 P
= 1,642,200,000 P
= 8,211,000,000 P
= 11,500,000,000 ¥– $– €– THB– P
= 11,500,000,000
Subsidiaries’ loans:
Fixed Rate (exposed to fair value risk)
P
= 1.15 billion Clark Water RCBC Loan P
= 95,833,333 P
= 95,833,333 P
= 95,833,333 P
= 95,833,333 P
= 95,833,333 P
= 263,541,668 P
= 742,708,333 ¥– $– €– THB– P
= 742,708,333
P
= 0.80 billion Cebu Water DBP Loan P
= 22,104,902 P
= 44,209,804 P
= 44,209,804 P
= 44,209,804 P
= 44,209,804 P
= 298,416,176 P
= 497,360,294 ¥– $– €– THB– P
= 497,360,294
P
= 0.50 billion Laguna Water DBP Loan P
= 36,674,712 P
= 29,334,190 P
= 29,340,136 P
= 29,346,319 P
= 29,352,973 P
= 162,128,140 P
= 316,176,470 ¥– $– €– THB– P
= 316,176,470
P
= 0.83 billion Laguna Water DBP Loan P
= 62,961,887 P
= 50,350,048 P
= 50,360,379 P
= 50,371,124 P
= 50,382,686 P
= 278,285,997 P
= 542,712,121 ¥– $– €– THB– P
= 542,712,121
P
= 2.50 billion Laguna Water SBC Loan P
= 218,408,764 P
= 163,239,574 P
= 191,064,496 P
= 191,238,474 P
= 191,466,576 P
= 583,043,655 P
= 1,538,461,539 ¥– $– €– THB– P
= 1,538,461,539
P
= 2.50 billion Laguna Water BPI Loan P
= 201,819,520 P
= 177,963,553 P
= 178,189,762 P
= 178,418,906 P
= 178,654,920 P
= 295,298,167 P
= 1,210,344,828 ¥– $– €– THB– P
= 1,210,344,828
P
= 0.50 billion Boracay Water DBP-SBC Loan P
=– P
= 8,558,961 P
= 31,660,189 P
= 31,660,189 P
= 31,660,189 P
= 118,725,707 P
= 222,265,235 ¥– $– €– THB– P
= 222,265,235
P
= 0.50 billion Boracay Water DBP-SBC Loan P
=– P
= 11,240,434 P
= 44,961,735 P
= 44,961,735 P
= 44,961,735 P
= 168,606,504 P
= 314,732,143 ¥– $– €– THB– P
= 314,732,143
P
= 0.65 billion Boracay Water DBP-SBC Loan P
=– P
= 19,345,238 P
= 77,380,952 P
= 77,380,952 P
= 77,380,952 P
= 290,178,573 P
= 541,666,667 ¥– $– €– THB– P
= 541,666,667
P
= 2.40 billion Boracay Water BPI Loan P
= 15,650,000 P
= 24,200,000 P
= 77,450,000 P
= 137,800,000 P
= 185,228,000 P
= 1,079,672,000 P
= 1,520,000,000 ¥– $– €– THB– P
= 1,520,000,000
P
= 0.45 billion Tagum Water PNB Loan P
= 33,399,479 P
= 33,415,537 P
= 33,439,143 P
= 33,463,678 P
= 33,489,955 P
= 161,042,208 P
= 328,250,000 ¥– $– €– THB– P
= 328,250,000
P
= 0.15 billion Tagum Water PNB Loan P
= 12,793,331 P
= 12,827,863 P
= 12,877,325 P
= 12,928,277 P
= 12,982,301 P
= 65,590,903 P
= 130,000,000 ¥– $– €– THB– P
= 130,000,000
P
= 7.00 billion MWPVI Loan P
= 667,800,000 P
= 667,100,000 P
= 754,900,000 P
= 753,900,000 P
= 753,900,000 P
= 3,768,500,000 P
= 7,366,100,000 ¥– $– €– THB– P
= 7,366,100,000
P
= 0.39 billion Calbayog Water BPI Loan P
=– P
= 9,338,000 P
= 9,338,000 P
= 20,010,000 P
= 20,010,000 P
= 90,179,000 P
= 148,875,000 ¥– $– €– THB– P
= 148,875,000
P
= 0.23 billion Aqua Centro BPI Loan P
=– P
= 17,075,200 P
= 22,411,200 P
= 22,411,200 P
= 22,411,200 P
= 83,691,200 P
= 168,000,000 ¥– $– €– THB– P
= 168,000,000
P
= 0.47 billion South Luzon Water BPI Loan P
=– P
=– P
= 11,339,000 P
= 22,678,000 P
= 22,678,000 P
= 113,305,000 P
= 170,000,000 ¥– $– €– THB– P
= 170,000,000
Floating Rate (exposed to cash flow risk)
P
= 0.54 billion Clark Water DBP Loan P
= 44,583,333 P
= 44,583,333 P
= 44,583,333 P
= 44,583,333 P
= 44,583,333 P
= 278,645,835 P
= 501,562,500 ¥– $– €– THB– P
= 501,562,500
P
= 0.12 billion Boracay Water DBP-SBC Loan P
=– P
= 1,945,241 P
= 10,356,618 P
= 10,356,618 P
= 10,356,618 P
= 38,837,317 P
= 71,852,412 ¥– $– €– THB– P
= 71,852,412
THB5,300,000,0
THB5.30 billion Loan THB– 00 THB– THB– THB– THB– P
=– ¥– $– €– THB5,300,000,000 P = 8,507,679,906
Total in Original Currency P
= 35,706,067,542 ¥– $611,876,496 €120,000,000 THB5,300,000,000 P= 85,475,461,482
Total in PHP P
= 6,064,716,255 P
= 16,073,154,707 P
= 3,850,226,150 P
= 4,378,882,686 P
= 6,422,273,318 P
= 48,686,208,366 P
= 35,706,067,542 P
=– P
= 34,115,174,034 P
= 7,146,540,000 P
= 8,507,679,906 P
= 85,475,461,482
Interest on financial instruments classified as floating rate is repriced on a semi-annual basis, unless otherwise stated. Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument.
The spot exchange rates used were P = 55.7550 to US$1, P = 59.5545 to EUR1, and P = 1.6052 to THB1 in 2022.
*Excludes the CAD0.87 million Laguna Water loan whose repayment date is related to the completion of the funded project

*SGVFS187515*
 - 109 -

The following tables demonstrate the sensitivity of the Group’s income before income tax to a reasonably
possible change in interest rates on December 31, 2023 and 2022, with all variables held constant (through the
impact on floating rate borrowings).

2023 2022
Changes in Effect on Income Effect on Income
Basis Points Before Income Tax Before Income Tax
(In Thousands)
Floating rate borrowings 100 (P
= 509,094) (P
= 257,652)
(100) 509,094 257,652

Foreign exchange risk

The Group’s foreign exchange risk results primarily from movements of the PHP against the USD, JPY and EUR
on its long-term debt and service concession obligations. Substantially all revenues are generated in PHP while
majority of capital expenditures are also in PHP. Approximately 45% and 58% of debt, including bonds payable,
as of December 31, 2023 and 2022, respectively, are denominated in foreign currency.

On August 1, 2021, the BOD approved the Foreign Exchange Risk Policy to help the Parent Company properly
address or mitigate the adverse effects of foreign exchange volatility to its profit and loss through the
employment of various risk mitigation strategies which include several derivative structures. As an enhancement
on the foreign exchange risk management strategy approved by the BOD on February 24, 2022, the Parent
Company shall maximize the use of available accounting hedges and shall take into account the capitalization of
foreign exchange losses pertaining to capitalizable foreign currency-denominated loans as and when possible,
to minimize the adverse effect of foreign exchange volatility to profit and loss while managing overall cost that
includes hedging costs.

The Group manages its foreign currency risk by hedging transactions that are expected to occur upon maturity of
the hedged long-term debts. When a derivative is entered into for the purpose of being a hedge, the Group
negotiates the terms of the derivative to match the terms of the hedged exposure.

The Group hedges its exposure to fluctuations on the translation from USD to PHP of its investment in a foreign
subsidiary by holding net borrowings in a foreign currency. As at December 31, 2023 and 2022, the Group
hedged US$100.00 million of the US$500.00 million sustainability bonds (currency option transaction).

On August 10, 2023, the Group unwound the derivative asset related to its EUR120 million Euro-loan principal
only swap. The unwinding resulted to derecognition of derivative asset amounting to P = 1,263.52 million,
derecognition of OCI amounting to P =1,557.28 million and impact on the current year profit or loss amounting to
P
= 22.0 million and P
= 60.44 million for the realized forex gain and hedging costs, respectively..

Information on the Group’s foreign currency-denominated monetary assets and liabilities and their Philippine
Peso equivalents are as follows:

2023 2022
Original Peso Original Peso
Currency Equivalent Currency Equivalent
(In Thousands) (In Thousands)
Assets
Cash and cash equivalents:
THB THB1,635,467 P
= 2,633,386 THB275,988 P
= 443,022
USD USD4,079 225,855 USD6,486 361,619
VND VND21,440,330 48,916 VND3,790,926 8,944
IDR IDR1,524,085 5,466 IDR547,212 1,957
SGD SGD– – SGD5 215
JP¥ JP¥– – JP¥556 232
Short-term investments:
USD USD– – USD50,730 2,828,470
THB THB– – THB73 117
IDR IDR– – IDR1,589,000 5,682
Accounts receivable:
USD USD3,171 175,599 USD1,944 108,411
IDR IDR995,924 3,572 IDR1,967,958 7,037
SAR SAR4,127 61,155 SAR– –
THB THB261 420 THB– –

(Forward)

*SGVFS187515*
 - 110 -

2023 2022
Original Peso Original Peso
Currency Equivalent Currency Equivalent
(In Thousands) (In Thousands)
Other current assets:
THB THB25,985 P
= 41,841 THB24,416 P
= 39,193
VND VND– – VND677,878 1,599
GBP GBP4 302 GBP20 1,338
IDR IDR– – IDR135,064 483
SGD SGD4 184 SGD– –
USD USD36 1,990 USD23 1,259
Other noncurrent assets:
USD USD137 7,561 USD1,079 60,127
IDR IDR10,842,640 38,886 IDR62,826 225
SAR SAR250 3,705 SAR– –
THB THB5,291,971 8,520,991 THB– –
SGD SGD30 1,263 SGD– –
VND VND– – VND73,577 173
11,771,092 3,870,103
Liabilities
Accounts payable:
THB THB5,356,790 8,625,362 THB29,783 47,809
USD USD3,166 175,300 USD495 27,575
VND VND75,801 173 VND1,303,910 3,076
SGD SGD76 3,219 SGD76 3,175
EUR EUR– – EUR– –
IDR IDR12,897,157 46,254 (IDR92,282) (330)
PKR PKR– – PKR5,585 1,384
Long-term debt:
USD USD3,166 32,961,689 USD602,030 33,566,195
THB THB– – THB5,291,781 8,494,487
EUR EUR57,257 3,519,836 EUR119,037 7,089,212
CAD CAD873 36,669 CAD873 36,003
Service concession obligations:
USD USD177,865 9,848,397 USD250,254 13,952,914
JP¥ JP¥141,270 55,519 JP¥208,674 87,100
55,272,418 63,308,600
Net foreign currency- (P
= 43,501,326) (P
= 59,438,497)
denominated liabilities
The closing exchange rates used were P = 55.3700 to US$1, P= 42.0039 to CAD1, P= 61.738 to EUR1, P = 70.7590 to GBP1, =P0.0036
to IDR1, =P0.3930 to JPY1, =P0.0264 to MMK1, P= 14.8187 to SAR1, P= 42.0898 to SGD1, P = 1.6102 to THB1, 0.0023 to VND1 and
P
= 0.1970 to PKR1 in 2023; and = P55.7550 to US$1, P= 41.2405 to CAD1, =P59.5545 to EUR1, P = 67.4394 to GBP1, P= 0.0036 to
IDR1, P= 0.4174 to JPY1, P
= 0.0262 to MMK1, =P14.9335 to SAR1, = P41.5796 to SGD1, P = 1.6052 to THB1, 0.0024 to VND1 and
P
= 0.2478 to PKR1 in 2022.

Under their respective concession agreements, the Parent Company and Boracay Water have a natural hedge
on foreign exchange risks on their loans and concession fee payments through a recovery mechanism in their
respective tariffs (see Notes 1 and 13).

Beginning November 18, 2021, the Parent Company’s RCA has removed its FCDA recovery mechanism from
the water rates of the Parent Company’s customers. Boracay Water, on the other hand, still maintains this
natural hedge and does not expect any movement of the foreign currencies against the Philippine Peso to have a
significant effect on the Group’s income before income tax. However, due to non-effectivity of the RCA on
June 30, 2022, the Parent Company has reinstated the original Concession Agreement on July 1, 2022 with the
recovery mechanism of the FCDA still in effect. The total impact of FCDA in the balances of the Parent
Company amounted to P = 2,635.01 million.

 Cash flow hedges for foreign currency risks

During the period, the Parent Company designated foreign currency forward contracts as hedges of
exposure to foreign exchange currency risk on its seven (7)-year term loan from Bank of China Hong Kong
and Manila Branches denominated in EUR.

The terms of the foreign currency forward contracts have been negotiated to match the terms of the EUR leg
of the principal only swap. Both parties to the contract have fully cash-collateralized the foreign currency
forward contracts, and, therefore, effectively eliminated any credit risk associated with the contracts (both
the Hedge Counterparty’s and the Group’s own credit risk).

*SGVFS187515*
 - 111 -

The Parent Company designated a USD/PHP non-deliverable deferred premium currency option transaction
as hedging instrument for the USD100 Mn denominated bond. The bond will be hedged against
unfavourable movements of USD/PHP to minimize potential friction cost from unwinding the hedge in case
Parent Company wishes to exercise the pretermination right on the first call date.

As of December 31, 2023 and 2022, an unrealized gain and loss of P =37.83 million and P
=709.81 million,
respectively, relating to the derivatives are included in other comprehensive income.

 Hedge of net investments in foreign operations

Included in loans as at December 31, 2023 and 2022 was a borrowing of USD100.00 million, which is
designated as a hedge of the net investment in MWAP, the Parent Company’s wholly-owned foreign holding
company, with USD as its functional currency. As of December 31, 2023 and 2022, a loss and gain of
P
= 37.83 million and P= 466.33 million, respectively, on the translation of this borrowing was transferred to OCI
to offset the gains on translation of the investment in MWAP. There is no ineffectiveness for the year ended
December 31, 2023 and 2022. There is an economic relationship between the hedged item and the hedging
instrument as the net investment creates a translation risk that will match the foreign exchange risk on the
USD borrowing. The Group has established a hedge ratio of 1:1 as the underlying risk of the hedging
instrument is identical to the hedged risk component. The hedge ineffectiveness will arise when the amount
of the investment in the foreign subsidiary becomes lower than the amount of the fixed rate borrowing.

The hedge effectiveness can be assessed by considering the economic relationship, effect of credit risk and
hedge ratio.

The maturity profile of the hedging instruments as of December 31, 2023 follows:

Within 1 year 1 to 5 years More than 5 years Total

USD100 Mn Bonds - Currency Option
Transaction – $100,000,000 – $100,000,000
Hedge rate – P
= 50.86 - P
= 56.50 – –

USD100 Mn Bonds - Net Investment

Hedge – – $100,000,000 $100,000,000
Hedge rate – – P
= 49.76 –

The impact of the hedging instruments and hedged items on the statement of financial position as of
December 31, 2023 and 2022 follows:

Line item in the

statement of Change in fair
2023 Notional amount Carrying amount financial position value*
USD100 Mn Bonds - Currency Option Other noncurrent
Transaction $100,000,000 P
= 391,839,337 assets P
= 181,510,327
USD100 Mn Bonds - Net Investment
Hedge $100,000,000 – – (28,325,764)
P
= 391,839,337 P
= 153,184,563

Line item in the

statement of Change in fair
2022 Notional amount Carrying amount financial position value*
Other noncurrent
EUR120 Mn Loan - Principal only swap €120,000,000 P
= 2,109,677,185 assets P
= 1,099,350,013
USD100 Mn Bonds - Currency Option Other noncurrent
Transaction $100,000,000 185,992,581 assets (221,856,130)
USD100 Mn Bonds - Net Investment
Hedge $100,000,000 – – (319,576,781)
P
= 2,295,669,766 P
= 557,917,102
*net of income tax effect

*SGVFS187515*
 - 112 -

The impact of the hedged items on the statement of financial position as of December 31, 2023 and 2022
follows:

Change in fair Cash flow hedge Cost of hedging

2023 Notional amount value * reserve* reserve*
USD100 Mn Bonds – Currency Option
Transaction $100,000,000 P
= 181,510,327 P
= 406,413,386 (P
= 224,903,059)
USD100 Mn Bonds - Net Investment
Hedge $100,000,000 (28,325,764) – –
P
= 153,184,563 P
= 406,413,386 (P
= 224,903,059)

Change in fair Cash flow hedge Cost of hedging

2022 Notional amount value * reserve* reserve*
EUR120 Mn Loan - Principal only swap €120,000,000 P
= 1,099,350,013 P
= 955,879,341 P
= 143,470,672
USD100 Mn Bonds – Currency Option
Transaction $100,000,000 (210,737,651) 70,628,092 (281,365,743)
USD100 Mn Bonds - Net Investment
Hedge $100,000,000 (319,576,781) – –
P
= 569,035,581 P
= 1,026,507,433 (P
= 137,895,071)
*net of income tax effect

The effect of the cash flow hedge in the statement of profit and loss and OCI follows:
Total hedging Amount
gain (loss) Ineffectiveness reclassified from
recognized in recognized in Line item in OCI to profit or Line item in
2023 OCI* profit or loss profit or loss loss profit or loss
USD100 Mn Bonds – Currency Option P
= 181,510,327 P
= 1,669,979 Interest (P
= 37,767,685) Foreign
Transaction expense exchange
gains (losses)
USD100 Mn Bonds - Net Investment (28,325,764) – – (37,767,685) Foreign
Hedge exchange
gains (losses)
P
= 153,184,563 P
= 1,669,979 (P
= 75,535,370)

Amount
Total hedging gain Ineffectiveness reclassified from
(loss) recognized recognized in Line item in OCI to profit or Line item in
2022 in OCI* profit or loss profit or loss loss profit or loss
EUR120 Mn Loan - Principal only swap P
= 1,099,350,013 P=– Interest P
= 243,475,878 Foreign
expense exchange
gains (losses)
USD100 Mn Bonds – Currency Option (210,737,651) 14,332,130 Interest 466,333,529 Foreign
Transaction expense exchange
gains (losses)
USD100 Mn Bonds - Net Investment Hedge (319,576,781) – – 466,333,529 Foreign
exchange
gains (losses)
P
= 569,035,581 P
= 14,332,130 P
= 1,176,142,936
*net of income tax effect

Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily
trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign
exchange transactions and other financial instruments.

Customer credit risk is managed by the Group’s established policy, procedures and control relating to customer
credit risk management. Credit risk for receivables from customers is managed primarily through credit reviews
and an analysis of receivables on a continuous basis. The Group has no significant concentration of credit risk.
Outstanding customer receivables and contract assets are regularly monitored and customer payments are
facilitated through various collection modes including the use of postdated checks and auto-debit arrangements.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit
losses. The provision rates are based on days past due for groupings of customer segments with similar loss
patterns (i.e., by geographical region, and product type). The calculation reflects the probability-weighted
outcome and reasonable and supportable information that is available at the reporting date about past events,
current conditions and forecasts of future economic conditions.

*SGVFS187515*
 - 113 -

The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate
the matrix to adjust the historical credit loss experience with forward-looking information.

Generally, trade receivables are written off when deemed unrecoverable and are not subject to enforcement
activity. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial
assets. The information about the credit risk exposure on the Group’s receivables and contract assets using a
provision matrix follow:

December 31, 2023

Current Days Past Due
Standard Less than 30 Expected
Grade Days 30 to 60 Days 61 to 90 Days Over 90 Days Credit Loss Total
(In Thousands)
Receivables
Trade receivables P
= 724,735 P
= 766,073 P
= 355,830 P
= 171,000 P
= 648,122 P
= 1,301,193 P
= 3,966,953
Employees 17,145 – – – – 5 17,150
Interest from banks 13,142 – – – – – 13,142
Others 208,873 – – – – 220,681 429,554
963,895 766,073 355,830 171,000 648,122 1,521,879 4,426,799
Contract assets 1,718,657 – – – – 312,876 2,031,533
P
= 2,682,552 P
= 766,073 P
= 355,830 P
= 171,000 P
= 648,122 P
= 1,834,755 P
= 6,458,332

December 31, 2022

Current Days Past Due
Standard Less than 30 Expected Credit
Grade Days 30 to 60 Days 61 to 90 Days Over 90 Days Loss Total
(In Thousands)
Receivables
Trade receivables P
= 1,130,525 P
= 534,753 P
= 209,975 P
= 103,149 P
= 349,145 P
= 1,504,554 P
= 3,832,101
Employees 24,910 – – – – 2,068 26,978
Interest from banks 12,667 – – – – – 12,667
Others 417,375 – – – – 125,063 542,438
1,585,477 534,753 209,975 103,149 349,145 1,631,685 4,414,184
Contract assets 2,664,598 – – – – 381,208 3,045,806
P
= 4,250,075 P
= 534,753 P
= 209,975 P
= 103,149 P
= 349,145 P
= 2,012,893 P
= 7,459,990

Credit risk from balances with banks and financial institutions is managed in accordance with the Group's policy.
Investments of surplus funds are made only with approved counterparties and within credit limits assigned to
each counterparty. Counterparty limits are reviewed and approved by the BOD and are updated when
necessary.

Cash and cash equivalents and short-term investments are placed in various banks. Material amounts are held
by banks which belong to the top five (5) banks in the country. The rest are held by local banks that have good
reputation and low probability of insolvency. These are considered to be low credit risk investments.

Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
bank loans, and debentures. The Group’s policy is to maintain a level of cash that is sufficient to fund its
operating cash requirements for the next three (3) to six (6) months and any claim for refund of customers’
guaranty deposits. Capital expenditures are funded through long-term debt, while operating expenses and
working capital requirements are sufficiently funded through internally generated cash. Maturing debts are
refinanced through a combination of long-term debt and internally generated cash.

The Group’s financial assets used for liquidity management based on their maturities are as follows:

December 31, 2023

More than
Within 1 year 1 to 5 years 5 years Total - Gross
Assets:
Cash and cash equivalents P
= 10,752,734,174 P
=– P
=– P
= 10,752,734,174
Receivables:
Customers 3,966,953,076 – – 3,966,953,076
Employees 17,150,278 – – 17,150,278
Interest from banks 13,141,587 – – 13,141,587
ZCWD 39,509,823 – – 39,509,823
Others 390,044,571 – – 390,044,571
Contract assets from TWD and
CIWD 126,375,266 873,935,625 1,332,611,449 2,332,922,340
P
= 15,305,908,775 P
= 873,935,625 P
= 1,332,611,449 P
= 17,512,455,849

*SGVFS187515*
 - 114 -

December 31, 2022

More than
Within 1 year 1 to 5 years 5 years Total - Gross
Assets:
Cash and cash equivalents P
= 8,811,939,212 P
=– P
=– P
= 8,811,939,212
Short-term investments 128,417,810 – – 128,417,810
Receivables:
Customers 3,832,101,157 – – 3,832,101,157
Employees 26,978,065 – – 26,978,065
Interest from banks 12,667,348 – – 12,667,348
ZCWD 39,509,823 – – 39,509,823
Others 502,928,062 – – 502,928,062
Contract assets from MCWD, TWD,
and CIWD 1,084,389,202 687,076,060 1,140,359,028 2,911,824,290
P
= 14,438,930,679 P
= 687,076,060 P
= 1,140,359,028 P
= 16,266,365,767

The Group’s financial liabilities based on contractual undiscounted payments:

December 31, 2023

More than
Within 1 year 1 to 5 years 5 years Total - Gross
Liabilities:
Accounts and other payables P
= 18,761,072,969 P
=– P
=– P = 18,761,072,969
Short-term debt 135,000,000 – – 135,000,000
Long-term debt* 19,419,949,192 46,485,335,514 50,395,342,791 116,300,627,497
Service concession obligation* 2,193,937,888 8,465,985,107 23,946,046,455 34,605,969,450
Lease liabilities* 115,587,313 205,247,040 153,395,879 474,230,232
Other noncurrent liabilities – 264,719,426 1,209,222,854 1,473,942,280
P
= 40,625,547,362 P
= 55,421,287,087 P
= 75,704,007,979 P= 171,331,944,630
*Includes contractual interest cash flows

December 31, 2022

More than
Within 1 year 1 to 5 years 5 years Total - Gross
Liabilities:
Accounts and other payables P
= 16,194,519,558 P
=– P
=– P = 16,194,519,558
Short-term debt 252,872,324 – – 252,872,324
Long-term debt* 9,514,087,649 44,154,430,392 59,020,882,967 112,689,401,008
Service concession obligation* 1,589,712,846 7,532,585,818 21,492,068,526 30,614,367,190
Lease liabilities* 66,340,471 158,770,345 191,104,585 416,215,401
Other noncurrent liabilities – – 1,121,724,232 1,121,724,232
P
= 27,617,532,848 P
= 51,845,786,555 P
= 81,825,780,310 P= 161,289,099,713
*Includes contractual interest cash flows

Changes in liabilities arising from financing activities:

December 31, 2023

Service
Short-term Concession Lease Interest
Debt Long-term Debt Obligations Liabilities Payable Total
Balance at beginning of year P
= 252,872,324 P
= 84,669,784,632 P= 16,043,388,978 P
= 436,347,432 P
= 1,208,142,266 P= 102,610,535,632
Cash flows – net (117,872,324) 14,537,346,280 (1,683,326,593) (133,017,393) (1,711,723,905) 10,891,406,065
Accretion – 155,033,387 1,110,058,097 18,821,865 – 1,283,913,349
Interest – – – – 1,922,301,064 1,922,301,064
Concession fees – – 777,890,509 – – 777,890,509
Additions – net – – (94,529,346) 10,225,854 – (84,303,492)
Foreign exchange gains – net – (114,713,152) (28,660,777) – – (143,373,929)
Others – – – – – –
P
= 135,000,000 P
= 99,247,451,147 P= 16,124,820,868 P
= 332,377,758 P
= 1,418,719,425 P= 117,258,369,198

December 31, 2022

Service
Concession Lease Interest
Short-term Debt Long-term Debt Obligations Liabilities Payable Total
Balance at beginning of year P
=– P
= 71,388,741,993 P
= 8,958,321,333 P
= 361,718,145 P
= 971,665,069 P = 81,680,446,540
Cash flows – net 244,503,225 9,580,169,725 (1,039,219,993) (105,995,513) (3,517,060,569) 5,162,396,875
Accretion 8,369,099 151,471,419 671,759,945 14,192,394 – 845,792,857
Interest – – – 3,753,537,766 3,753,537,766
Concession fees – – 7,109,019,285 – – 7,109,019,285
Additions – net – – 23,662,478 170,303,686 – 193,966,164
Foreign exchange losses (gains)
– net – 3,549,401,495 319,845,930 – – 3,869,247,425
Others – – – (3,871,280) – (3,871,280)
P
= 252,872,324 P
= 84,669,784,632 P
= 16,043,388,978 P
= 436,347,432 P
= 1,208,142,266 P
= 102,610,535,632

*SGVFS187515*
 - 115 -

Capital management
The primary objective of the Group’s capital management strategy is to ensure that it maintains a healthy capital
structure, in order to maintain a strong credit standing while it maximizes shareholder value.

The Group considers total equity and debt as its capital, and closely manages its capital structure by monitoring
key covenant ratios in compliance with the respective loan covenants of the entities within the Group. These
ratios include debt-to-equity, debt service coverage and early termination.

For the purposes of computing its debt-to-equity, which generally should not exceed 3x, “debt” is defined as the
aggregate of all obligations of the borrower to pay or repay money or bank debt, excluding service concession
obligations. Debt service coverage ratio, which measures the ability of the Group to pay the scheduled principal
and interest payments, shall not be less than 1.2x to 1.3x. Early termination ratio, which applies to the Parent
Company, is calculated consistent with the definition under the Concession Agreement and should not be less
than 1x. The ratios are to be achieved by managing the level of borrowings and dividend payments to
shareholders. As of December 31, 2023 and 2022, the Parent Company and MWPVI and subsidiaries are in
compliance with all the loan covenants required by the creditors.

As of December 31, 2023 and 2022, the Parent Company’s market capitalization was lower than its net book
value.

29. Commitments

Parent Company’s Concession Agreement

The significant commitments of the Parent Company under the Concession Agreement and Extension are as
follows:

a. To pay MWSS concession fees;

b. To post a performance bond, bank guarantee or other security acceptable to MWSS in favor of MWSS as a
bond for the full and prompt performance of the Parent Company’s obligations under the Agreement. The
aggregate amounts drawable in one or more installments under such performance bond during the Rate
Rebasing Period to which it relates are set out below.

Aggregate amount drawable

under performance bond
Rate Rebasing Period (in US$ millions)
First (August 1, 1997 - December 31, 2002) US$70.00
Second (January 1, 2003 - December 31, 2007) 70.00
Third (January 1, 2008 - December 31, 2012) 60.00
Fourth (January 1, 2013 - December 31, 2017) 60.00
Fifth (January 1, 2018 - December 31, 2022) 50.00
Sixth (January 1, 2023 - December 31, 2027) 50.00
Seventh (January 1, 2028 - December 31, 2032) 50.00
Eighth (January 1, 2033 - May 6, 2037) 50.00

Within thirty (30) days from the commencement of each renewal date, the Parent Company shall cause the
performance bond to be reinstated in the full amount set forth above as applicable for that year.

With a minimum of ten (10)-day written notice period to the Parent Company, MWSS may make one or more
drawings under the performance bond relating to a Rate Rebasing Period to cover amounts due to MWSS
during that period; provided, however, that no such drawing shall be made in respect of any claim that has
been submitted to the Appeals Panel for adjudication until the Appeals Panel has handed down its decision
on the matter.

In the event that any amount payable to MWSS by the Parent Company is not paid when due, such amount
shall accrue interest at a rate equal to that of a 364-day Treasury Bill for each day it remains unpaid;

c. With the Extension, the Parent Company agreed to increase its annual share in MWSS operating budget by
100% from P= 100.00 million to P
= 395.00 million, subject to annual CPI;

d. To meet certain specific commitments in respect of the provision of water and sewerage services in the East
Zone, unless deferred by MWSS RO due to unforeseen circumstances or modified as a result of rate
rebasing exercise;

*SGVFS187515*
 - 116 -

e. To operate, maintain, renew and, as appropriate, decommission facilities in a manner consistent with the
National Building Standards and best industrial practices so that, at all times, the water and sewerage
system in the East Zone is capable of meeting the service obligations (as such obligations may be revised
from time to time by the MWSS RO following consultation with the Parent Company);

f. To repair and correct, on a priority basis, any defect in the facilities that could adversely affect public health
or welfare, or cause damage to persons or third-party property;

g. To ensure that at all times, the Parent Company has sufficient financial, material and personnel resources
available to meet its obligations under the Agreement; and

h. To ensure that no debt or liability that would mature after the life of the Concession Agreement will be
incurred unless with the approval of MWSS.

The Parent Company is committed to perform its obligations under the RCA to safeguard its continued right to
operate the East Zone concession.

Calasiao Water’s Concession Agreement

The significant commitments of Calasiao Water under its concession agreement with CWD are as follows:

a. Finance, design, engineer, and construct new facilities for water;

b. Upgrade existing water facilities;

c. Operate, manage, and maintain water facilities and services; and

d. Bill and collect tariff for water services.

Calbayog Water’s JVA with CCWD

The significant commitments of Calbayog Water under its JVA are as follows:

a. Develop, improve, and expand the water infrastructure of CCWD;

b. Provide water supply and install new water service connections;

c. Ensure continuous water supply and appropriate pressure;

d. Connect water service connections to the water main;

e. Ensure potability of water supply and compliance with drinking water quality standards;

f. Provide high quality customer/after-sales service; and

g. Payment of revenue share of CCWD.

Boracay Water’s Concession Agreement

The significant commitments of Boracay Water under its concession agreement with TIEZA are as follows:

a. Meet certain specific commitments in respect of the provision of water and sewerage services in the service
area, unless deferred by the TIEZA-RO due to unforeseen circumstances or modified as a result of rate
rebasing exercise;

b. Pay concession fees, subject to the following provisions:

i. Assumption of all liabilities of the BWSS as of commencement date and service such liabilities as they
fall due. BWSS has jurisdiction, supervision and control over all waterworks and sewerage systems
within Boracay Island prior to commencement date. The servicing of such liabilities shall be applied to
the concession fees;

ii. Payment of an amount equivalent to 5% of the monthly gross revenue of Boracay Water, inclusive of all
applicable taxes. Such payments shall be subject to adjustment based on the gross revenue of
Boracay Water as reflected in its separate financial statements;

*SGVFS187515*
 - 117 -

iii. Provision of the amount of the TIEZA BOD’s approved budget in 2012, payable semi-annually and not
exceeding:

Month Maximum Amount

January P
= 10,000,000
July 10,000,000

iv. Provision of the annual operating budget of the TIEZA-RO, payable in 2 equal tranches in January and
July and not exceeding:

Year Maximum Amount

2011 P
= 15,000,000
2012 20,000,000
2013 and beyond Previous year, subject to
annual CPI adjustment

c. Establish, at Boracay Island, a TIEZA-RO building with staff house, the cost of which should be reasonable
and prudent;

d. Pay an incentive fee pegged at P

= 1.00 per tourist, local and foreign, entering the service area;

e. Raise financing for the improvement and expansion of the BWSS water and wastewater facilities;

f. Operate, maintain, repair, improve, renew and, as appropriate, decommission facilities, as well as to operate
and maintain the drainage system upon its completion, in a manner consistent with the National Building
Standards and best industrial practices so that, at all times, the water and sewerage system in the service
area is capable of meeting the service obligations (as such obligations may be revised from time to time by
the TIEZA-RO following consultation with Boracay Water);

g. Repair and correct, on a priority basis, any defect in the facilities that could adversely affect public health or
welfare, or cause damage to persons or third-party property; and

h. Ensure that at all times, Boracay Water has sufficient financial, material and personnel resources available
to meet its obligations under the concession agreement.

In addition, the Parent Company, as the main proponent of Boracay Water, shall post a bank security in the
amount of US$2.50 million to secure the Parent Company’s and Boracay Water’s performance of their respective
obligations under the agreement. The amount of the performance security shall be reduced by the Parent
Company following the schedule below:

Amount of Performance
Security
Rate Rebasing Period (in US$ millions)
First US$2.50
Second 2.50
Third 1.10
Fourth 1.10
Fifth 1.10

On or before the start of each year, Boracay Water shall cause the performance security to be reinstated in the
full amount set forth as applicable for that year.

With a minimum of ten (10) days written notice period to Boracay Water, TIEZA may take one or more drawings
under the performance security relating to a Rate Rebasing Period to cover amounts due to TIEZA during that
period; provided, however, that no such drawing shall be made in respect of any claim that has been submitted
to the Arbitration Panel for adjudication until the Arbitration Panel has handed its decision on the matter.

In the event that any amount payable to TIEZA by Boracay Water is not paid when due, such amount shall
accrue interest at a rate equal to that of a 364-day Treasury Bill for each day it remains unpaid.

Failure of Boracay Water to perform any of its obligations that is deemed material by TIEZA-RO may cause the
concession agreement to be terminated.

*SGVFS187515*
 - 118 -

Clark Water’s Concession Agreement

The significant commitments of Clark Water under its concession agreement with CDC are follows:

a. Pay franchise and lease fees of CDC;

b. Finance, design, and construct new facilities - defined as any improvement and extension works to (i) all
existing facilities - defined as all fixed and movable assets specifically listed in the concession agreement;
(ii) construction work - defined as the scope of construction work set out in the concession agreement; and
(iii) other new works that do not constitute refurbishment or repair of existing facilities undertaken after
commencement date;

c. Manage, exclusively possess, occupy, operate, repair, maintain, decommission and refurbish the existing
facilities, except for the private deep wells set out in the concession agreement, the negotiations for the
acquisition and control of which shall be the sole responsibility and for the account of the Clark Water; and
manage, own, operate, repair, maintain, decommission and refurbish the new facilities;

d. Treat raw water and wastewater in CFZ;

e. Provide and manage all water and wastewater related services like assisting locator in relocating of pipes
and assess internal leaks;

f. Bill and collect payment from the customers for the services (with the exception of SM City Clark). SM City
Clark has been carved out by virtue of RA No. 9400 effective 2007 even if it is located within the franchise
area; and

g. Extract raw water exclusively from all sources of raw water including all catchment areas, watersheds,
springs, wells and reservoirs in CFZ free of charge by CDC.

On August 15, 2014, the Clark Water and CDC signed an amendment agreement to the concession agreement
dated March 16, 2000. The Amendment provides for the following:

a. Extension of the original concession period for another fifteen (15) years up to October 1, 2040;

b. Additional investment of P
=4.00 billion provided under the amended concession agreement to be spent for
further improvement and expansion water and wastewater services in the area. Investment requirement
under the original CA amounted to P = 3.00 billion and the amended concession agreement required an
additional investment of P
= 2.00 billion. Total investment prior to the amendment of the concession
agreement amounted to P =1.00 billion;

c. Introduction of rate rebasing mechanism for every four (4) years starting 2014;

d. = 25.63/m3 to PP
Reduction in tariff rates by 3.9% (from P = 24.63/m3) effective September 1, 2014, subject to
the Extraordinary Price Adjustment; and

e. Increase in tariff rates by:

i. P = 0.41/m3 (from P = 24.63/m3 to P
= 25.04/m3) in 2018
ii. P= 0.42/m3 (from P = 25.04/m3 to P
= 25.45/m3) in 2019
= 0.42/m3 (from P
iii. P = 25.45/m3 to P
= 25.87/m3) in 2020
3 3
iv. P= 0.43/m (from P = 25.87/m to P= 26.30/m3) in 2021

As a result of the extension of the concession period, service concession assets and service concession
obligation as of August 15, 2014 increased by P= 56.58 million. Further, the recovery period of Clark Water’s
investment is now extended by another fifteen (15) years from 2025 to 2040.

On May 26, 2017, Clark Water submitted its proposed 2018 rate rebasing plan following the four (4)-year
rebasing period stated in its concession agreement. As of December 31, 2021, Clark Water’s 2018 rate rebasing
is still ongoing which put on hold the approved tariff increases when the concession agreement was amended in
August 15, 2014. On February 9, 2023, Clark Water submitted its proposed 2022 rate rebasing plan following the
four (4)-year rebasing period stated in its concession agreement.

On December 20, 2023, CDC Board approved the 60% tariff increase following 60-20-20 tranches to be
implemented effective January 1, 2024.

*SGVFS187515*
 - 119 -

Bulakan Water’s Concession Agreement

The significant commitments of Bulakan Water under its concession agreement with BuWD are as follows:

a. Financing, designing, engineering, and constructing new facilities for water and sanitation such as, but not
limited to, deep wells, reservoirs, and booster pumps;

b. Upgrading of existing water and sanitation facilities, including water network replacement and expansion;

c. Operating, managing, and maintaining water and sanitation facilities and services; and

d. Billing and collection of tariff for water and sanitation services including a seven (7)-year replacement cycle
program commencing on Year 1 of the concession.

Ilagan Water’s BWSPA with CIWD

The significant commitments of Ilagan Water under the BWSPA are as follows:

a. Develop raw surface water sources which includes planning, designing, building, financing, testing,
operating, and upgrading the bulk water facilities related thereto; and

b. Provision of minimum guaranteed volume of five (5) million liters of treated water per day on Year 1,
gradually increasing to thirty (30) million liters per day on Year 23 of the operations of the bulk water
facilities.

Ilagan Water’s SMA with CIWD

The significant commitments of Ilagan Water under the SMA are as follows:

a. Develop septage facility which includes planning, designing, building, financing, testing, operating, and
upgrading; and

b. Provision of septage management services to the customers of CIWD, particularly septage collection,
septage treatment, and bio solids disposal for a period of twenty-two (22) years.

Ilagan Water’s Interim Bulk Water Supply with CIWD

a. To construct and maintain interim bulk water facilities for production of raw water for 2 years

b. Provision of minimum guaranteed volume of three (3) million liters of raw water per day of the operations of
the interim bulk water facilities.

South Luzon Water’s JVA with TnWD

The significant commitments of South Luzon Water under its JVA are as follows:

a. Develop, improve, and expand the water infrastructure of TnWD;

b. Provide water supply and install new water service connections;

c. Provide sanitation services and septage management within the service area;

d. Ensure continuous water supply and appropriate pressure;

e. Connect water service connections to the water main;

f. Ensure potability of water supply and compliance with drinking water quality standards;

g. Provide high quality customer/after-sales service;

h. Payment of revenue share to TnWD; and

i. Such other obligations as may be agreed upon by the Parties.

*SGVFS187515*
 - 120 -

Obando Water’s Concession Agreement

The significant commitments of Obando Water under its concession agreement with OWD are as follows:

a. Finance, design, engineer, and construct new facilities for water and sanitation;

b. Upgrade existing water and sanitation facilities;

c. Operate, manage, and maintain water and sanitation facilities and services; and

d. Bill and collect tariff for water and sanitation services.

Laguna Water’s Concession Agreement

The significant commitments of Laguna Water under its concession agreement with PGL are as follows:

a. To pay PGL concession fees;

b. To manage, occupy, operate, repair, maintain, decommission, and refurbish the transferred facilities;

c. To design, construct and commission the new facilities during the cooperation period;

d. To provide and manage the services;

e. To bill and collect payment from the customer for all services;

f. To extract raw water exclusively from all sources of raw water; and

g. To negotiate in good faith with PGL any amendment or supplement to the concession agreement to
establish, operate and maintain wastewater facilities if doing such is financially and economically feasible.

On June 30, 2015, PGL and MWPVI signed an amendment to their JVA dated November 10, 2000.
Simultaneously, and consequent to the amendment of the JVA of Laguna Water, Laguna Water signed an
amendment to its concession agreement with the PGL which includes the following:

a. Expansion of its concession area to cover all cities and municipalities in the PGL; and

b. Inclusion in the service obligations of Laguna Water the provision of wastewater services and the
establishment of an integrated sewage and septage system in the province.

Laguna Water’s APA with LTI

On December 23, 2013, Laguna Water entered an APA with LTI to acquire and operate its water operations
division in Laguna. The significant commitments of Laguna Water under the agreement follow:

a. Offer water supply and sewerage services to all current or future locators in the Laguna Technopark,
including future area(s) of expansion;

b. Ensure the availability of an uninterrupted 24-hour supply of water to all current and future locators, subject
to interruptions resulting from the temporary failure of items of the Water Facilities (where Laguna Water
acts promptly to remedy such failure) or required for the repair of the construction of the Water Facilities
where such repairs or construction cannot be performed without interruption to the supply of water;

c. Upon request from a current or future locator in the LTI for a connection to a water main, make such a
connection as soon as reasonably practicable, upon payment of reasonable connection fees as determined
by Laguna Water;

d. Ensure at all times that the water supplied to current and future locators in LTI complies with Philippine
National Standards for Drinking Water as published by the Department of Health (or successor entity
responsible for such standards) and prevailing at such time and shall observe any requirement regarding
sampling, record keeping or reporting as may be specified by law;

e. Make available an adequate supply of water for firefighting and other public purposes as the municipality
and/or barangay in which LTI may reasonably request. Laguna Water shall not assess for such water used
for firefighting purposes but may charge for all other water used for public purposes; and

*SGVFS187515*
 - 121 -

Laguna Water shall make a supply of water available to current and future locators in LTI, including the areas of
expansion in the future.

Laguna Water’s JVA with PAGWAD

The significant commitments of Laguna Water under its JVA with PAGWAD are as follows:

a. Finance, design, engineer, and construct new facilities for water and sanitation;

b. Upgrade existing water and sanitation facilities;

c. Operate, manage, and maintain water and sanitation facilities and services; and

d. Bill and collect tariff for water supply and sanitation services.

North Luzon Water’s MOAs with the Municipalities of Sta. Barbara, San Fabian, and Manaoag in Pangasinan
The significant commitments of North Luzon Water under its MOAs are as follows:

a. Construct, maintain, and operate a water system;

b. Construct, maintain, and implement a septage management system;

c. Supply, sell, and furnish water to any person or entity within the territorial limits and political boundaries of
the Municipalities of Sta. Barbara, San Fabian, and Manaoag for domestic, commercial or other use, and to
charge and collect tariff for the supply of water; and

d. Provide septage management services and to charge and collect septage management fees and sewage
collection.

Aqua Centro’s JVA with LWD

The significant commitments of Aqua Centro under its JVA are as follows:

a. Develop, improve, and expand the water infrastructure of LWD;

b. Provide water supply and install new water service connections;

c. Ensure continuous water supply and appropriate pressure;

d. Connect water service connections to the water main;

e. Ensure potability of water supply and compliance with drinking water quality standards;

f. Provide high quality customer/after-sales service; and

g. Payment of revenue share to LWD.

Tagum Water’s Bulk Water Supply and Purchase Agreement

Tagum Water will have the sole and exclusive right and responsibility during the term of the agreement to:

a. Develop raw surface water sources in Hijo River;

b. Plan, develop, design, build and test the facilities;

c. Implement the Tagum Bulk Water Project;

d. Manage, use, occupy, operate, repair, maintain, upgrade and develop the facilities; and

e. Supply treated water to TWD for distribution to its network.

Facilities and any and all assets, equipment and properties used by Tagum Water to implement the bulk water
project will be owned by Tagum Water even after the expiration of the BWSPA.

*SGVFS187515*
 - 122 -

Cebu Water’s Bulk Water Supply Agreement

On December 18, 2013, Cebu Water entered into a bulk water supply agreement with MCWD. The significant
commitments of Cebu Water under its agreement with MCWD are as follows:

a. Provide potable and treated water at an aggregate volume of eighteen (18) million liters per day for the first
year and thirty-five (35) million liters per day for the succeeding years up to twenty (20) years at P
= 24.59 per
cubic meter;

b. Ensure that the source shall be sustainable and 100% reliable at any day for the duration of the agreement;
and

c. Construct a facility capable of delivering a production capacity of thirty-five (35) million liters per day and
maintain the same on its account.

On December 1, 2023, the bulk water supply agreement with MCWD was terminated.

MWPVI’s MOA with ALI

MWPVI’s significant commitments under its MOA with ALI are as follows:

a. Provision of water and used water services in existing ALI Group developments;

b. Connection and disconnection of services to customers;

c. Collection of billings for water and used water services, including service connection fees, from all
customers;

d. Customer relations and compliance with regulatory requirements;

e. Develop, construct, finance, own, operate, maintain, rehabilitate, and upgrade future water and used water
facilities; and

f. Maintain, rehabilitate, and upgrade existing water and used water facilities at MWPVI’s own cost.

MWPVI’s Lease Agreement with PEZA

On December 18, 2017, MWPVI entered into a Lease Agreement for the Operations and Management of the
Water and Used Water Facilities of PEZA in Cavite Economic Zone (CEZ), whereby MWPVI agrees to lease,
operate, and maintain the existing water and used water facilities in the CEZ for the provision of water and used
water services to the locators therein. The lease agreement has a term of twenty-five (25) years from signing of
the contract and shall be effective on its commencement date on February 1, 2018.

MWPVI’s MOA with LTI

On April 16, 2016, the MWPVI entered into a MOA with LTI, whereby through its division, Estate Water, MWPVI
shall exclusively providee water and used water services to LTI’s Cavite Technopark to be located in Barangay
Sabang, Naic, Cavite, and in pursuit of this objective, to construct, develop, finance, and own the water facilities
and used water facilities under the terms and conditions set out in the MOA.

MWPVI’s Deed of Accession with Ayala Land Malls, Inc.

MWPVI’s significant commitments are as follows:

a. Provision of used water services in ALI Malls Group;

b. Compliance with regulatory requirements; and

c. Maintain, rehabilitate, and upgrade existing water and used water facilities at MWPVI’s own cost.

MWPVI’s Deed of Accession with Orion Land, Inc. (OLI)

On July 1, 2022, MWPVI entered into a Deed of Accession (Agreement) with OLI for provision of used water
services, and operation and management of the Used Water Facilities of SouthPark Center.

MWPVI’s MOA with ROHM Electronics Philippines Inc. (REPI)

On November 03, 2022, MWPVI entered into a MOA with REPI for the rehabilitation, operation, and
management of the existing water system of REPI and to supply a guaranteed volume of 13,200.00 million cubic
per month for twenty-five (25) years.

*SGVFS187515*
 - 123 -

MWPVI’s MOA with Damosa Land Inc. (DLI)

On October 20, 2022, MWPVI and DLI signed a term of reference for the commercial term of the partnership
between MWPVI and DLI. On February 6, 2023, MWPVI and DLI signed a 25-year partnership for the
development, construction and operation, and management of the water system of Anflo Industrial Estate (AIE).
In the partnership, MWPVI will invest at least PhP150M for the additional water facilities which will be integrated
into the existing system to meet AIE’s projected demand of 2.6 million liters of water per day.

Aqua Centro’s MOAs with the SM Group

Under Aqua Centro’s MOAs with the SM Group, Aqua Centro will develop, construct, finance, own, operate,
maintain, rehabilitate, and upgrade the potable water and/or grey water facilities of the SM Group development.

MWPVI’s JVA with San Jose City Water District (SJCWD)

On January 14, 2021, the consortium of the MWPVI, MWCI, and TPGI has signed and executed a JVA with the
SJCWD for the design, construction, improvement, upgrade, rehabilitation, maintenance, operation, financing,
expansion, and management of the water supply system and the provision of water and sanitation services of
SJCWD in San Jose City, Nueva Ecija.

MWPVI’s MOA with Canlubang Sugar Estate

On December 22, 2023, Canlubang Sugar Estate (CSE) and MWPVI entered to a Bulk Water Supply
Arrangement. CSE shall supply MWPVI at least 518,400 cubic meters of raw water per month from Matang
Tubig Spring for 25 years.

30. Provisions and Contingencies

On October 13, 2005, the Municipal Government of Norzagaray Bulacan issued a Notice of Assessment and
Notice of demand for Payment against the Parent Company and Maynilad (jointly, the Concessionaires) for the
payment of real property taxes on the Common Purpose Facilities (CPF) of MWSS for the period of 1998 to 2005
amounting to P= 357.11 million. The Concessionaires assailed the validity of the assessment with the Local
Board of Assessment Appeals, and subsequently with the Central Board of Assessment Appeals (CBAA). On
August 22, 2022, the CBAA declared the Notice of Assessment and Notice of demand for Payment as void. The
CBAA held that the Concessionaires are not liable for real property tax on the CPF. On October 11, 2022, the
Municipal Government of Norzagaray Bulacan filed a petition for review with the Court of Tax Appeals assailing
the decision of the CBAA. On May 26, 2023, the Court of Tax Appeals En Banc dismissed the petition without
prejudice.

*SGVFS187515*
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307
6760 Ayala Avenue Fax: (632) 8819 0872
1226 Makati City ey.com/ph
Philippines

INDEPENDENT AUDITOR’S REPORT

The Board of Directors and Stockholders

Manila Water Company, Inc.
MWSS Administration Building, 489 Katipunan Road
Balara, Quezon City

We have audited the accompanying financial statements of Manila Water and Company, Inc.
(the Company), as at December 31, 2023 and for the year then ended, on which we have rendered the
attached report dated February 29, 2024.

In compliance with the Revised Securities Regulation Code Rule 68, we are stating that the above
Company has 928 stockholders owning one hundred (100) or more shares each.

SYCIP GORRES VELAYO & CO.

Djole S. Garcia
Partner
CPA Certificate No. 0097907
Tax Identification No. 201-960-347
BOA/PRC Reg. No. 0001, August 25, 2021, valid until April 15, 2024
BIR Accreditation No. 08-001998-102-2021, September 16, 2021, valid until September 15, 2024
PTR No. 10079941, January 5, 2024, Makati City

February 29, 2024

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307
6760 Ayala Avenue Fax: (632) 8819 0872
1226 Makati City ey.com/ph
Philippines

INDEPENDENT AUDITOR’S REPORT

The Board of Directors and Stockholders

Manila Water Company, Inc.
MWSS Administration Building, 489 Katipunan Road
Balara, Quezon City

We have audited in accordance with Philippine Standards on Auditing, the consolidated financial
statements of Manila Water Company, Inc. and Subsidiaries (the Group) as at December 31, 2023, and
for each of the three years in the period ended December 31, 2023, included in this Form 17-A and have
issued our report thereon dated February 29, 2024. Our audits were made for the purpose of forming an
opinion on the basic consolidated financial statements taken as a whole. The schedules listed in the
Index to the Financial Statements and Supplementary Schedules are the responsibility of the Group’s
management. These schedules are presented for purposes of complying with the Revised Securities
Regulation Code Rule 68, and are not part of the basic consolidated financial statements. These
schedules have been subjected to the auditing procedures applied in the audit of the basic consolidated
financial statements and, in our opinion, fairly state, in all material respects, the financial information
required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

SYCIP GORRES VELAYO & CO.

Djole S. Garcia
Partner
CPA Certificate No. 0097907
Tax Identification No. 201-960-347
BOA/PRC Reg. No. 0001, August 25, 2021, valid until April 15, 2024
BIR Accreditation No. 08-001998-102-2021, September 16, 2021, valid until September 15, 2024
PTR No. 10079941, January 5, 2024, Makati City

February 29, 2024

*SGVFS187515*
A member firm of Ernst & Young Global Limited
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307
6760 Ayala Avenue Fax: (632) 8819 0872
1226 Makati City ey.com/ph
Philippines

INDEPENDENT AUDITOR’S REPORT

ON THE SCHEDULE OF RECONCILIATION
OF RETAINED EARNINGS AVAILABLE
FOR DIVIDEND DECLARATION

The Board of Directors and Stockholders

Manila Water Company, Inc.
MWSS Administration Building, 489 Katipunan Road
Balara, Quezon City

We have audited in accordance with Philippine Standards on Auditing, the financial statements of
Manila Water Company, Inc. (the Company) as at December 31, 2023 and 2022 and for the years then
ended, and have issued our report thereon dated February 29, 2024. Our audits were made for the
purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying
Schedule of Reconciliation of Retained Earnings Available for Dividend Declaration is the responsibility of
the Company’s management. This schedule is presented for purposes of complying with the Revised
Securities Regulation Code Rule 68, and is not part of the basic financial statements. This has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, fairly state, in all material respects, the financial information required to be set forth therein in
relation to the basic financial statements taken as a whole.

SYCIP GORRES VELAYO & CO.

Djole S. Garcia
Partner
CPA Certificate No. 0097907
Tax Identification No. 201-960-347
BOA/PRC Reg. No. 0001, August 25, 2021, valid until April 15, 2024
BIR Accreditation No. 08-001998-102-2021, September 16, 2021, valid until September 15, 2024
PTR No. 10079941, January 5, 2024, Makati City

February 29, 2024

*SGVFS187515*
A member firm of Ernst & Young Global Limited
MANILA WATER COMPANY, INC.
SUPPLEMENTARY SCHEDULE OF RECONCILIATION OF RETAINED EARNINGS
AVAILABLE FOR DIVIDEND DECLARATION
FOR THE YEAR ENDED DECEMBER 31, 2023

Unappropriated retained earnings, beginning (Parent Company) P

= 14,144,270,482
Adjustments:
Deferred tax asset recognized (586,565,351)
Treasury Shares (43,313,195)
Unappropriated retained earnings, adjusted to available for dividend distribution, beginning 13,514,391,936
Add (Less):
Net income during the period closed to retained earnings (Parent Company) 8,809,007,536
Deferred tax benefit during the period 1,323,438,816
Treasury Shares (5,706,311,111)
Total 17,940,527,177
Less: Dividend declarations during the period (2,072,971,744)
Appropriates during the period (15,890,000,000)
Unappropriated retained earnings available for dividend distribution, ending* (P
= 22,444,567)

*As disclosed in Note 19 to the separate financial statements, excess retained earnings will be utilized for capital expenditures under the
approved Business Plan in compliance with the Parent Company’s service obligations under the Concession Agreement.
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307
6760 Ayala Avenue Fax: (632) 8819 0872
1226 Makati City ey.com/ph
Philippines

INDEPENDENT AUDITOR’S REPORT ON

COMPONENTS OF FINANCIAL SOUNDNESS INDICATORS

The Board of Directors and Stockholders

Manila Water Company, Inc.
MWSS Administration Building, 489 Katipunan Road
Balara, Quezon City

We have audited in accordance with Philippine Standards on Auditing, the consolidated financial
statements of Manila Water Company, Inc. and Subsidiaries (the Group) as at December 31, 2023 and
2022 and for each of the three years in the period ended December 31, 2023, and have issued our report
thereon dated February 29, 2024. Our audits were made for the purpose of forming an opinion on the
basic consolidated financial statements taken as a whole. The Supplementary Schedule on Financial
Soundness Indicators, including their definitions, formulas, calculation, and their appropriateness or
usefulness to the intended users, are the responsibility of the Group’s management. These financial
soundness indicators are not measures of operating performance defined by Philippine Financial
Reporting Standards (PFRS) and may not be comparable to similarly titled measures presented by other
companies. This schedule is presented for the purpose of complying with the Revised Securities
Regulation Code Rule 68 issued by the Securities and Exchange Commission, and is not a required part
of the basic consolidated financial statements prepared in accordance with PFRS. The components of
these financial soundness indicators have been traced to the Group’s consolidated financial statements
as at December 31, 2023 and 2022 and for each of the three years in the period ended
December 31, 2023 and no material exceptions were noted.

SYCIP GORRES VELAYO & CO.

Djole S. Garcia
Partner
CPA Certificate No. 0097907
Tax Identification No. 201-960-347
BOA/PRC Reg. No. 0001, August 25, 2021, valid until April 15, 2024
BIR Accreditation No. 08-001998-102-2021, September 16, 2021, valid until September 15, 2024
PTR No. 10079941, January 5, 2024, Makati City

February 29, 2024

*SGVFS187515*
A member firm of Ernst & Young Global Limited
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE A - FINANCIAL ASSETS
As of December 31, 2023

Name of Issuing Entity Balance in the Value Based on Market

Principal Amount of Income Received and
FINANCIAL ASSETS and Association of Each Number of Shares Statement of Financial Quotation at End of 2
Bonds and Notes 1 Accrued
Issue Position Reporting Period

Financial Assets At Amortized Cost

Cash on hand and in banks N/A N/A N/A ₱1,109,921,916 N/A ₱0.00

Cash equivalents N/A N/A N/A 9,642,812,258 N/A -

Short-term investments N/A N/A N/A - N/A

Receivables N/A N/A N/A 2,904,919,846 N/A 300,992,854

Contract assets - current and noncurrent N/A N/A N/A 1,718,656,527 N/A -

Total financial assets at amortized cost ₱15,376,310,548 ₱300,992,854

Financial Assets Through Profit or Loss

Deirvative Assets N/A N/A N/A ₱391,839,337 N/A ₱0.00

TOTAL ₱15,768,149,885 ₱300,992,854

-
1
This includes financial assets of discontinued operations as discussed in Note 19 of the Audited Financial Statements.
2
This excludes interest income of discontinued operations as discussed in Note 19 of the Audited Financial Statements.
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES AND PRINCIPAL STOCKHOLDERS (OTHER THAN RELATED PARTIES)
As of December 31, 2023

Note: Receivables from related parties and principal stockholders represent receivables for water and used water services and facilities as well as supervision fees which arise in the ordinary course of
business.

Deductions
Collections Other than
1 1
Name and Designation of Debtor Beginning Balance Additions Cash Collections Cash Ending Balance

OFFICERS AND EMPLOYEES

Various ₱26,978,065 ₱85,279,192 ₱95,106,980 ₱0.00 ₱17,150,278

RELATED PARTIES - Shareholder

2
Trident Inc 5,330,000,000 - - - 5,330,000,000
Ayala Corporation 542,587 7,256,034 7,595,390 - 203,231

RELATED PARTIES - Affiliates

AC Industrial Technology Holdings, Inc. and subsidiaries 4,870 7,751,482 7,756,352 - -
Ayala Land, Inc. and subsidiaries 305,264,854 857,456,517 899,472,678 - 263,248,693
Bank of the Philippine Islands and subsidiaries 2,592,322 55,246,860 57,696,044 - 143,138
Globe Telecom, Inc. and subsidiaries 139,704 4,486,935 4,485,761 - 140,878
Integrated Microelectronics, Inc. and subsidiaries - 60,951,055 60,951,055 - -
WawaJVCo, Inc. - 113,017,973 - - 113,017,973
Sureste Properties Inc. 25,781 72,567,696 40,143,180 - 32,450,297
TOTAL ₱5,665,548,183 ₱1,264,013,744 ₱1,173,207,440 ₱0.00 ₱5,756,354,488

1
This includes receivables of discontinued operations as discussed in Note 19 of the Audited Financial Statements.
2
This pertains to subscription receivable which was presented as a contra equity account the Audited Financial Statements
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE C - AMOUNTS RECEIVABLE FROM RELATED PARTIES WHICH ARE ELIMINATED DURING THE CONSOLIDATION OF THE FINANCIAL STATEMENTS
As of December 31, 2023

Relationship to the Deductions

Reporting
Entity Name (Debtor) Company Account Type Beginning Balance Additions Collections Written off Others Ending Balance Description of "Other Receivables" Account

Advances and expenses paid by the Parent Company

MWPVI and subsidiaries Subsidiary Other receivables ₱129,146,228 ₱40,467,538 ₱15,233,434 ₱0.00 ₱0.00 ₱154,380,333 on behalf of the entity and its subsidiaries.
Expenses paid by the Parent Company on behalf of the
Manila Water Infratech Solutions Corp. Subsidiary Other receivables 43,380,707 6,927,564 828,444 - - 49,479,827 entity.
Expenses paid by the Parent Company on behalf of the
Calasiao Water Company, Inc. Subsidiary Other receivables 10,824,645 540,314 577,663 - - 10,787,296 entity.
Expenses paid by the Parent Company on behalf of the
Manila Water Asia Pacific Pte. Ltd. and subsidiaries Subsidiary Other receivables 58,711,012 105,548,072 136,479,387 - - 27,779,697 entity.

TOTAL ₱242,062,592 ₱153,483,489 ₱153,118,928 ₱0.00 ₱0.00 ₱242,427,153

483,855,608
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE D - LONG-TERM DEBT (THIRD PARTIES)
As of December 31, 2023

Current Portion of Noncurrent Portion of

Principal Amount Interest Periodic Principal Periodic Long-term Debt Long-term Debt Total Long-term Debt
Title of Issue and Type of Obligation Interest Rates (in Original Currency) Maturity Payments Payments (in PHP) (in PHP) (in PHP)

FOREIGN CURRENCY-DENOMINATED LOANS

USD Loans
MWMP Loan 6M LIBOR plus margin USD 119,598,328 15-May-37 Semi-annual Semi-annual ₱423,430,555 ₱5,311,520,378 ₱5,734,950,932
USD500.00 million sustainability bonds 4.38% USD 500,000,000 30-Jul-30 Semi-annual Bullet - 27,226,738,326 27,226,738,326
Total USD Loans USD 619,598,328 423,430,555 32,538,258,703 32,961,689,258

EUR Loan
EUR250.00 million Loan 6M EURIBOR plus margin EUR 120,000,000 21-Oct-24 Semi-annual Semi-annual 3,519,836,009 - 3,519,836,009
Total EUR Loan EUR 120,000,000 3,519,836,009 - 3,519,836,009

THB Loan
THB5.30 billion MWTC Loan 6M BIBOR plus margin THB 5,300,000,000 12-Mar-24 Semi-annual Upon maturiy 8,488,482,165 - 8,488,482,165
Total THB Loan THB 5,300,000,000 8,488,482,165 - 8,488,482,165

CAD Loan
CAD0.87 million Laguna Water Loan Non-interest bearing CAD 873,000 Not defined N/A Not defined - 36,669,405 36,669,405
Total CAD Loan CAD 873,000 - 36,669,405 36,669,405

PESO-DENOMINATED LOANS

PHP Loans

6.02% to 6.77% Semi-annual beginning

P 15.00 billion MWCI CBC Loan (subject to repricing) PHP 15,000,000,000 13-Sep-32 Semi-annual 03/13/2026 - 14,903,231,775 14,903,231,775
P 5.00 billion MWCI PNB Loan 7.30% PHP 3,375,000,000 31-Jul-28 Quarterly Quarterly 496,641,398 1,869,170,399 2,365,811,796

5.16% (6M LIBOR plus At maturity period of

P 5.00 billion MWCI BDO Loan margin on PhP3.20 billion) PHP 5,000,000,000 19-Dec-27 Quarterly each drawdown 1,797,275,237 3,185,533,134 4,982,808,371

Semi-annual beginning
P 3.00 billion MWCI Landbank Loan 3Y BVAL plus margin PHP 3,000,000,000 29-Nov-33 Semi-annual 05/29/2025 - 2,977,493,220 2,977,493,220

Semi-annual beginning
P 7.00 billion MWCI Landbank Loan 2Y BVAL plus margin PHP 3,500,000,000 28-Dec-33 Semi-annual 06/28/2025 - 3,473,707,742 3,473,707,742

Semi-annual beginning
P 10.00 billion MWCI Metrobank Loan 2Y BVAL plus margin PHP 9,000,000,000 11-Dec-34 Semi-annual 06/11/2024 887,607,190 8,045,028,520 8,932,635,710
P 0.50 billion Laguna Water DBP Loan 7.25% PHP 345,588,237 31-Jul-33 Quarterly Quarterly 29,336,544 257,005,654 286,342,198
P 0.83 billion Laguna Water DBP Loan 7.25% PHP 593,196,967 31-Jul-33 Quarterly Quarterly 50,354,139 441,138,953 491,493,092
P 2.50 billion Laguna Water SBC Loan 5.40%-6.40% PHP 1,767,220,508 09-Dec-30 Quarterly Quarterly 190,978,714.94 1,149,840,774.61 1,340,819,490
P 2.50 billion Laguna Water BPI Loan 6.00% PHP 1,262,068,966 31-Jul-29 Quarterly Quarterly 178,056,134 848,978,171 1,027,034,305
Quarterly beginning
P 1.60 billion Laguna Water BPI Loan 6.60% PHP 700,000,000 17-Aug-33 Quarterly 10/23/2026 - 694,905,499 694,905,499
P 0.50 billion Boracay Water DBP-SBC Loan 9.00% PHP 294,117,647 25-Aug-31 Quarterly Quarterly 10,184,331 282,419,895 292,604,226
2.89% to 9.00% (6M LIBOR
plus margin on PhP0.12
P 0.50 billion Boracay Water DBP-SBC Loan billion) PHP 314,732,143 25-Aug-31 Quarterly Quarterly 10,887,286 302,188,451 313,075,737
P 0.65 billion Boracay Water DBP-SBC Loan 6.25% to 6.33% PHP 541,666,667 25-Aug-31 Quarterly Quarterly 18,627,243 519,724,589 538,351,832
P 2.40 billion Boracay Water BPI Loan 4.70% to 7.66% PHP 1,508,600,000 30-Apr-33 Quarterly Quarterly 13,806,571 1,486,021,113 1,499,827,683
P 1.15 billion Clark Water RCBC Loan 6.19 to 6.63% PHP 646,875,000 30-Sep-30 Quarterly Quarterly 95,833,333 548,311,375 644,144,709
P 0.54 billion Clark Water DBP Loan 6M LIBOR plus margin PHP 456,979,167 31-Dec-33 Quarterly Quarterly 44,583,333 409,770,266 454,353,599
Quarterly beginning
P 1.53 billion Clark Water BPI loan 6.66% to 6.95% PHP 370,000,000 19-Dec-33 Quarterly 2/17/2026 - 367,152,059 367,152,059
P 10.00 billion MWPVI Loan 5.11% to 8.81% PHP 7,448,300,000 09-Nov-32 Semi-annual Semi-annual 667,800,000 6,745,955,414 7,413,755,414
P 0.45 billion Tagum Water PNB Loan 5.303% to 7.83% PHP 294,583,333 25-Sep-32 Quarterly Quarterly 33,925,935 259,383,645 293,309,580
P 0.15 billion Tagum Water PNB Loan 5.25% PHP 116,666,665 25-Sep-32 Quarterly Quarterly 13,855,176 100,277,546 114,132,722
P 0.23 billion Aqua Centro BPI Loan 4.77%-5.35% PHP 233,000,000 19-Mar-31 Quarterly Semi-annual - 231,710,323 231,710,323
P 0.47 billion South Luzon Water BPI Loan 4.62%-5.79% PHP 325,000,000 25-Aug-31 Quarterly Semi-annual - 323,075,648 323,075,648
P 0.39 billion Calbayog Water BPI Loan 5.42% PHP 150,000,000 22-Oct-31 Quarterly Semi-annual - 148,997,580 148,997,580
Quarterly beginning
P 0.20 billion Bulakan Water BPI Loan 6.00% PHP 130,000,000 29-Nov-33 Quarterly 4/20/2026 - 130,000,000 130,000,000
Total PHP loans ₱4,539,752,566 ₱49,701,021,745 ₱54,240,774,310

TOTAL ₱16,971,501,294 ₱82,275,949,853 ₱99,247,451,147

MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE D - LONG-TERM DEBT (MWSS)
As of December 31, 2023

Note: This pertains to payables assumed by the Parent Company from MWSS.

Current Portion of Noncurrent Portion of

Service Concession Service Concession
Obligations Obligations
Title of Issue and Type of Obligation (in PHP) (in PHP)

FOREIGN CURRENCY-DENOMINATED LOANS

USD
ADB 1746 ₱23,238,772 ₱12,748,188
ADB 779 1,373,617 2,133,797
ADB AWTIP 63,393,344 1,367,781,798
China Eximbank 221,016,339 1,189,649,019
China Eximbank - NCWS KDP - 1,354,956,484
ADB 3935 - 304,622,918

Accrued interest payable 87,753,150 -

396,775,222 4,231,892,204

REGULATORY FEE
MWSS 122,286,449 2,719,593,779
Total regulatory fee 122,286,449 2,719,593,779

TOTAL ₱519,061,671 ₱6,951,485,983

MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE E - INDEBTEDNESS TO RELATED PARTIES (LONG-TERM LOANS FROM RELATED COMPANIES)
As of December 31, 2023

Name of Related Parties Beginning Balance Ending Balance

Bank of the Philippine Islands ₱3,199,508,589 ₱4,422,703,097

TOTAL ₱3,199,508,589 ₱4,422,703,097

MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE F - GUARANTEES OF SECURITIES OF OTHER ISSUERS
As of December 31, 2023

Total Amount Amount Owned by

Name of Issuing Entity of Securities Guaranteed by Title of Issue of Each Class of Guaranteed and Person for which
the Company for which this Statement is Filed Securities Guaranteed Outstanding Statement is Filed Nature of Guaranty

The Group has no guarantees of securities of other issuers.

MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE G - CAPITAL STOCK
As of December 31, 2023

Number of Shares
Reserved for Options, Number of Shares Held
Number of Shares Number of Shares Warrants, Conversion by Affiliates, Directors,
Title of Issue Authorized Issued and Subscribed* and Rights Officers and Employees Others

Preferred stock - P0.10 par value, 10% cumulative,

voting, participating, nonredeemable and nonconvertible 4,000,000,000 4,000,000,000 - 4,000,000,000 -

Common stock:
Issued 3,100,000,000 2,454,532,016 - 1,391,638,561 1,062,893,455
Subscribed - 430,307,601 - 430,307,601 -
Total common stock 3,100,000,000 2,884,839,617 - 1,821,946,162 1,062,893,455

TOTAL 7,100,000,000 6,884,839,617 - 5,821,946,162 1,062,893,455

*This includes 436,243,932 treasury shares- preference shares and 291,142,572 treasury shares- common shares.
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE H - ORGANIZATION CHART
As of December 31, 2023

RAZON & CO., INC

Prime Strategic
Holdings Inc.
(97.25%)

Prime Infrastructure
Capital Inc.
(100.00%)

Prime Infrastructure
Inc. (100.00%)

Trident Water
Company Holdings,
Inc.
(100.00%)

Manila Water
Company, Inc.
(MWCI)
58.32%

Manila Water Manila Water

Calasiao Water
Philippine Infratech Solutions
Company, Inc.
Ventures, Inc. Corp.
(Calasiao Water)
(MWPVI) (MWTS)
90.00%
100.00% 100.00%

Zamboanga Water
Davao del Norte
Boracay Island Manila Water Manila Water Filipinas Water North Luzon Water
Leyte Water Water Aqua Centro Bulacan MWPV Clark Water Consortium, Laguna AAAWater Calbayog Water
Company, Inc. EcoWater MWPV Water Company, Technical Holdings, Corp. Company, Inc.
Company, Inc. Infrastructure MWPV Corp. Development Corp. Corporation Corporation Company, Inc.
(Leyte Water)
(Zamboanga
Company, Inc. (Aqua Centro)
Corp. (EcoWater)
(BMDC) (Clark Water)
Inc. Inc. (MW (Laguna Water)
Ventures, Inc.
(Calbayog Water)
(Filipinas Water) (North Luzon
Water) 100.00% (Boracay Water) Consortium) (MWTV) MWCI - 49.00% Water)
100.00% (Davao Water) 100.00% 100.00% 100.00% 70.00% 60.00%
70.00% 80.00% 100.00% MWPVI - 51.00% 100.00%
100.00% 79.63%

Cebu Manila
Water MWPV South
Tagum Water Obando Water Bulakan Water Metro Ilagan Water Manila Water Asia
Luzon Water Corp.
Company, Inc. Development, Company, Inc. Company, Inc. Company, Inc. Pacific Pte. Ltd.
(South Luzon
(Tagum Water) Inc. (Obando Water) (Bulakan Water) (Ilagan Water) (MWAP)
Water)
90.00% (Cebu Water) 90.00% 90.00% 90.00% 100.00%
100.00%
56.21%

Manila Water Manila South East Manila Water International Water

Thu Duc Water Kenh Dong Water PT Manila Water International Water
South Asia Asia Water (Thailand) Co., Partners Company
Holdings Pte. Ltd. Holdings Pte. Ltd. Indonesia Partners Company
Holdings Pte. Ltd. Holdings Pte. Ltd. Ltd. the Second
(TDWH) (KDWH) (PT MWI) (IWP)1
(MWSAH) (MSEA) (MWTC) (IWP2)1
100.00% 100.00% 100.00% 20.00%
100.00% 100.00% 100.00% 30.00%

Eastern Water
Kenh Dong Water Resources
Cu Chi Water Saigon Water
Thu Duc Water Supply Joint Stock Development and
Supply Sewerage Infrastructure PT Sarana Tirta
BOO Corporation Company Management
Company Limited Corporation 1 (Kenh Dong Ungaran (PT STU)1 Public Company
(Thu Duc Water)
(Cu Chi Water)1 (Saigon Water)1 20.00%
49.00% Water)1 Limited
24.50% 37.99%
47.35% (East Water)1
18.72%

1Associates
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE I - FINANCIAL RATIOS
As of December 31, 2023

2023 2022
Current ratio 0.43 0.63
Quick ratio 0.38 0.53
Liquidity ratio 0.29 0.37
Solvency ratio 0.07 0.07
Debt-to-equity ratio 1.79 1.46
Assets-to-equity ratio 2.99 2.65
Interest rate coverage ratio 3.30 3.85
Return on equity 7.93% 8.51%
Return on assets 2.67% 3.04%
Net profit margin ratio 19.12% 26.94%

Ratio Formula

Current ratio = Total Current Assets

Total Current Liabilities

Quick ratio = Current Assets - Inventory - Other Current Assets

Total Current Liabilities

Liquidity ratio = Cash and Cash Equivalents plus Short-term Cash Investments
Total Current Liabilities

Net Income plus Depreciation and Amortization plus Provision for Expected Credit
Solvency ratio = Losses
Total Liabilities

Debt-to-equity ratio = Total Liabilities less Service Concession Obligations

Total Stockholders' Equity (excluding noncontrolling interests)

Assets-to-equity ratio = Total Assets

Total Stockholders' Equity (including noncontrolling interests)

Interest rate coverage ratio = EBIT

Interest Expense

Return on equity = Net Income (attributable to equity holders of the Parent)

Total Stockholders' Equity (average SHE; excluding noncontrolling interests)

Return on assets = Net Income (attributable to equity holders of the Parent)

Total Assets

Net profit margin ratio = Net Income

Total Revenues
MANILA WATER COMPANY, INC. AND SUBSIDIARIES
SCHEDULE J – BENEFICIAL OWNERSHIP OF SHARES
As of December 31, 2023

Trident Water Company Holdings, Inc.

Trident Water Company Holdings, Inc. is a subsidiary of Razon & Co, Inc. and is a private company registered with
the Securities and Exchange Commission. The following table lists the record of beneficial owners of more than five
percent (5%) of the issued and outstanding shares of Trident Water as of December 31, 2023:

Name of Stockholder Number of Shares Percentage Nationality

Prime Infrastructure, Inc. Common: 74,999,997 99.99% Filipino
Preferred: 250,000,000
Enrique K. Razon, Jr. 1 Nil Filipino
Sandy A. Alipio 1 Nil Filipino
Silverio Benny J. Tan 1 Nil Filipino

Ayala Corporation

Ayala Corporation is a publicly listed Philippine Company. The following table lists the record of beneficial owners of
more than five percent (5%) of the issued and outstanding shares of Ayala Corporation as of December 31, 2023:

Name of Stockholder Number of Shares Percentage Nationality

Mermac, Inc. 296,625,706 47.86% Filipino
PCD Nominee 164,779,651 26.59% Filipino
Corporation
(Filipino)
PCD Nominee 133,754,708 21.58% Various
Corporation
(Non-Filipino)

Philwater Holdings Company, Inc.

The stockholders of record of Philwater Holdings Company, Inc. as of December 31, 2023 are as follows:

Name of Stockholder Number of Shares Percentage Nationality

Ayala Corporation 333,383,328 99.99% Filipino
John Eric T. Francia 1 Nil Filipino
Alberto M. de Larrazabal 1 Nil Filipino
Maria Franchette M. 1 Nil Filipino
Acosta
Sylvia Felisa R. 1 Nil Filipino
Maghirang
Estelito C. Biacora 1 Filipino