MayniladAR2015 PDF

1 Company Profile
3 Year in Brief
5 Key Figures
7 Highlights of the Year
9 Letter from the Chairman
13 President’s Report
17 Operational Highlights
Table of
Contents
41 Sustainability
45 Corporate Social Responsibility
55 Awards Received in 2015
57 Financial Review and Analysis
61 Board of Directors
67 Top Management Team
75 Consolidated Financial Statements
On the Cover
The past few years have been marked by dramatic transformation as our
massive infrastructure investments resulted in enhanced service levels
for over 9 million people. Even as we pursue operational enhancements,
we embrace our multi-faceted role as social enabler, educator,
environmental activist, and first responder in crises and
Maynilad disasters.
Water In Inc. 2015 Annual Report
Services,
MWSS Compound, Katipunan Ave.,
Balara, Quezon City, Philippines
www.mayniladwater.com.ph
Tel.No: 981 3333
2015, we take stock of what we have accomplished and celebrate our
evolution from basic utility to total water solutions provider. -3
Company
Profile
Who we are Our Vision

An agent and contractor of the Metropolitan We are the leading water solutions company in the
Waterworks and Sewerage System (MWSS), we are the Philippines with a strong presence across Asia.
water and wastewater services provider for the 17 cities
and municipalities that comprise the West Zone of the
Greater Manila area.
Our Mission
We provide safe, affordable and sustainable water
What we do solutions that enable those we serve to lead healthier,

more comfortable lives.
We provide our customers with piped-in water supply

that meets the Philippine National Standards for
Drinking Water (PNSDW).
Aside from delivering potable water, we also provide

sewerage services to customers in Manila, Malabon,
Navotas, Caloocan, Quezon City, Magallanes Village in
Makati, and parts of Muntinlupa. We make sanitation
services available to customers outside these sewered
areas.
After developing valuable expertise in Non-Revenue

Water (NRW) management, we have also started
extending NRW management and leak detection
services to other companies on a consultancy basis.
From Basic Utility to Water Solutions Company

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Our History
Maynilad was formed in 1997, after the consortium of
Benpres Holdings Corporation and Suez Lyonnaise de
Seaux won the exclusive right to provide water and
wastewater services in the West Zone of Metropolitan
Manila. Before then, the MWSS was in charge of
providing these services.
Towards the end of 1997, Maynilad struggled to meet

its service and financial obligations, leading to a string
Our Values
of disputes with the MWSS.
In 2005, Benpres and Suez ceded management and

control of Maynilad to MWSS. After the competitive Honesty and Integrity
bidding in 2005, DMCI-MPIC Water Company—a joint We deal with our stakeholders with honesty and
venture between Metro Pacific Investments Corporation integrity. We will always do what is right and fair
(MPIC) and DMCI Holdings, Inc. (DMCI)—acquired for the sake of our customers, shareholders and the
83.96% of M aynilad’s shares. environment.
The new owners took over Maynilad in 2007, and Customer Service
launched an aggressive five-year investment program We consider our customers as our growth partners.
to rehabilitate the company and its operations. In 2013, Only by providing them with affordable, high-quality
Marubeni Corporation of Japan acquired a 20% stake water solutions can we continue generating value for
and became a strategic partner of the consortium. our company and shareholders.
Since its re-privatization, Maynilad has spent over Entrepreneurship

P56 billion to improve and expand its water and We encourage creative thinking and deliberate execution.
wastewater services. As a result, over 9 million people in the We expect our people to manage our company’s
West Zone are now enjoying safe, reliable water supply. resources with a strong sense of initiative, ownership,
and accountability in order to balance the needs of our
customers with those of our other stakeholders.
Commitment to Excellence
We view excellence as a means and not an end. To
maintain our operational efficiency and industry
leadership, we push our people to excel by being
diligent and innovative in their work.
Teamwork
We value our people and consider their success as our
own. This is why we provide them with the support,
responsibilities, and opportunities that will allow them
to develop individually and with the company.
Love for Country

We actively partner with the public sector so that we can
provide even more Filipinos with water solutions that will
spur national development and secure the environment.
Maynilad Water Services, Inc. 2015 Annual Report

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Year in Brief
1
Maynilad adopted
new company slogan,
“Higit sa Tubig ang
Aming Serbisyo”.
2
Despite water reductions due to El
Nino, billed volume and resulting
revenues increased, along with all
other key performance indicators.

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3
Upward tariff adjustment was
implemented at a net average of
P1.35 per cubic meter.
4
Maynilad received
company-wide ISO
certification in 9001,
14001 and 18001.
5
Ramoncito S. Fernandez was
appointed as Maynilad’s new
President and CEO come 2016.

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Key Figures
Billed Volume
(MCM)
2013 443.85
2014 463.24
2015 481.53
Non-Revenue Water Billed Services

(Avg %)
2013 38.71 2013 1,129,497
2014 33.92 2014 1,190,062
2015 31.01 2015 1,265,625
24-Hour Water Supply

(%)
2013 97.75
2014 99.89
2015 99.81
481.53
31.01
1,265,625
99.81
-5
100.00
19.10
9.55
9.68
Over 7 PSI Pressure
(%)
2013 99.90
2014 99.97
2015 100.00
Consolidated Revenue
(PhP Billion)
2013 16.90
2014 18.36
2015 19.10
Consolidated Net Income

(PhP Billion)
2013 6.94
2014 8.26
2015 9.55
Consolidated Core Net Income

(PhP Billion)
2013 7.55
2014 8.78
2015 9.68

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Highlights of
January March
Philippine Quill Awards 2014. Two advocacy
Papal visit. Maynilad joined the country programs (“Daloy Dunong Water Education
in welcoming Pope Francis. To support the Program” and “Mission Ginhawa: Water
Catholic faithful who gathered at Rizal Park Solution for Yolanda-Hit Communities,”)
for Holy Mass, the company deployed 11 and two communications tools (“Maynilad
water tankers with a combined capacity of Website Relaunch” and “Ripples: The Official
94,000 liters around main thoroughfares Newsletter of Maynilad”) won awards.
leading to the venue. Fifteen water stations
were also set up at the Luneta grounds, World Water Day (WWD) 2015. Maynilad
and some 90,000 units of Maynilad bottled launched the Philippines’ first “WWD Water
water were sent to other Holy Mass venues February and Sustainable Development Awards”. As
at Tacloban and Palo in Leyte, and at the a culminating activity for the week-long
University of Santo Tomas in Manila. 100% water quality compliance rating. The WWD celebration, Maynilad also organized
DOH certified Maynilad as having maintained the “WWD 2015: Let’s Run for Water and
Mangrove reforestation. Five sites in 100% satisfactory compliance with the Sustainable Development” event.
the Cavite Province with a total area of PNSDW for the entire year of 2014.
6.6 hectares were adopted for mangrove Water Safety Plan. Maynilad was recognized
reforestation as part of Maynilad’s “Plant for Talayan Sewage Treatment Plant (STP). by DOH and WHO for pioneering Water Safety
Life” program, a multi-site reforestation and The P249-million STP in Talayan, Quezon Plan development and implementation
afforestation program. City was inaugurated. The facility provides during the National Conference on Climate
wastewater services for over 27,000 Change and Water Safety for Health.
households in the area.
Gold Environmental Excellence Award.
Help for fire victims. Maynilad extended Maynilad was given noteworthy distinction
assistance to families who lost their homes for its carbon reduction efforts during
in a fire that razed 300 houses in Pasay City. the 2015 Global CSR Awards, Asia’s most
prestigious recognition program for
ISO certification. The Information Corporate Social Responsibility.
Technology Services (ITS) Division received
its ISO certification, making Maynilad the
first water company in the Philippines to be
certified for ISO/IEC 20000-1:2011.
June
Military camp reservoirs. Two new water
reservoirs at the Cavite Naval Base were
completed. Designed to boost water
supply and pressure inside the camp, these
reservoirs have a combined holding capacity
of 1,500 cubic meters.
Asia-Pacific Stevie Awards. Maynilad

received noteworthy distinction in the Best
April May Newsletter or House Organ/Publication
category for “Ripples – The Maynilad Official
More local and international awards. Grand winner. Maynilad was declared Newsletter” and in the Corporate Social
Maynilad’s “Decentralized Wastewater the grand winner of the 2015 Kapatiran Responsibility Program of the Year category
Treatment Facilities in Quezon City” project sa Industriya (KAPATID) Awards of the for “Mission Ginhawa”.
won in the ASEAN Corporate Sustainability Employers Confederation of the Philippines.
Awards. The company also won a Gold Award Winning innovations. Two teams from
for Environmental Excellence at the 2015 “Brigada Eskwela.” Employee-volunteers Maynilad were declared winners in the 2015
Global CSR Summit and Awards. Meanwhile, refurbished classrooms and fixed water and IdeaSpace Startup Competition. Only 10
the “Mission Ginhawa” program also won a sanitation facilities in 19 public schools in winning ideas were chosen out of the more
Gold Anvil Award for its innovative approach Manila, Muntinlupa, Navotas, Quezon City, than 1,000 entries submitted from all over
to disaster response. Caloocan City and Valenzuela City, in support the Philippines and 15 other countries. Each
of the back-to-school program of the winning team received P1 million in seed
Department of Education. funding and grants.
Sanitation Safety Plan (SSP). Maynilad

finalized the SSP for implementation in its
wastewater treatment plants. This is part of
a project by WHO and ADB where Maynilad
was selected as one of two pilot cases for
the Philippines, the other one being the
Baliwag Water District.

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the Year
July September
Tree planting. The yearly tree-planting El Niño water reduction. Rotating service
activity at the Ipo Dam Watershed in interruptions had to be implemented to help
Norzagaray, Bulacan, kicked off. Part of manage water level in Angat Dam during the
Maynilad’s “Plant for Life” program, the strong El Niño season that was expected to
activity aims to help prevent the effects of last until mid-2016. The adjustments resulted
calamities such as land erosion, flooding and in shortened supply schedules in about 900
drought due to El Niño. barangays or 56% of the West concession area.
Partnership with Bangladesh. Through the August Coastal cleanup. Maynilad joined the 30th
Asian Development Bank (ADB), Maynilad and International Coastal Cleanup Drive, which
the People’s Republic of Bangladesh entered Multi-channel customer service. Maynilad was simultaneously held in different areas
into a Septage Management Twinning added a new SMS (short message service) in Metro Manila and several provinces. Aside
Partnership, under which Maynilad would Hotline, as well as official Facebook and from providing water stations and tankers,
mentor three municipal corporations in Twitter accounts, among its existing Maynilad also sent 50 employee-volunteers
Bangladesh. customer service platforms. to help in the cleanup of coastal areas.
International water seminar. Maynilad,

UNESCO and the University of the Philippines
(UP) spearheaded an international water
seminar for educators and community
workers from different countries.
KAAGAPAY Awards. LANDBANK’s Gawad

KAAGAPAY declared Maynilad as first runner-
up in the Large Corporation/Non-Agriculture-
based Category. The award honors large
corporations that support the bank’s priority
sectors such as farmers and fishers, micro and
small and medium enterprises.
November
Parañaque STP. A groundbreaking ceremony
October marked the start of construction of
Maynilad’s P1.43-billion STP in San Dionisio,
Global Handwashing Day. Maynilad Parañaque City. The new facility will be
celebrated the 8th Global Handwashing able to treat up to 76,000 cubic meters of
Day by visiting seven schools in Quezon wastewater per day, and serve approximately
City, Manila, Pasay and Parañaque to teach 110,000 households in the area.
schoolchildren the proper way of washing
their hands using soap and water. Las Piñas Pumping Station. The P198-million
WaterLinks Awards. Recognition was given
Alabang-Zapote Pumping Station in Las December
Piñas City was energized, making it possible
to the company’s twinning program, aimed to maintain strong water pressure for more Company-wide ISO certification. TUV
to build the NRW management and water than 38,000 households in Las Piñas and Rheinland Philippines conferred a company-
quality monitoring capacities of Nepal’s Muntinlupa. wide ISO certification to Maynilad.
Department of Water Supply and Sewerage.
Water seminar. A two-day seminar for water Las Piñas SpTP. The P363-million South
Typhoon Lando relief. Maynilad brought industry professionals was conducted. Titled Septage Treatment Plant began operations.
donations of drinking water to some areas “Making Every Drop Count: Improving Water The facility can treat 250 cubic meters per
of Isabela, Aurora, Nueva Ecija, Benguet, Supply Efficiency through Collaboration and day of septage and is expected to support the
Pangasinan, Pampanga and Quezon Province Creativity,” the seminar provided a venue for company’s sanitation drive in the south.
to help affected families. water industry practitioners in the country to
benchmark on best practices in water supply Industrial Safety Awards. The Safety
Energy Management Systems (EnMS). operations. Organization of the Philippines, Inc. gave
Maynilad was recommended for EnMS Maynilad an Award of Excellence for its
certification of its top energy-consuming Launch of Sustainability Report. The exemplary record of over 16 million safe man-
facilities. Maynilad Sustainability Reporting for the hours of exposure without lost time accident
combined CY 2013 & 2014 was launched. in a span of four years (November 2011 to
October 2015).

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To our valued Stakeholders,
The challenges and successes that we experienced

in 2015 have strengthened our sense of purpose:
beyond providing water, it is serving our customers,
communities and the country.
“Higit sa tubig ang aming serbisyo,” we now say.
In 2015, we rose to the occasion and showed everyone

that, more than anything, it is our desire to serve our
stakeholders that motivates our entire organization.
Business performance
Despite an adverse regulatory environment, our
business performance remained robust. Consolidated
revenues from our water and sewer services grew by
4.3% to P18.7 billion from P17.94 billion in 2014. Our
reported consolidated net income also improved to
P9.55 billion—a growth of 15.7% from the previous
year’s P8.26 billion.
These gains were a result of our financial stewardship.

Concerted efforts to conserve resources, coupled with
lower personnel cost from the Special Opportunity
Package for early retirees, lessened our operating
expenses and pulled up our net income.
Notwithstanding the water supply reductions due

to El Niño, we were able to raise billed volume in our
Concession Area by 3.9% from 463.24 million cubic
Letter from
the Chairman
-9
meters (MCM) to 481.53 MCM after connecting over million liters. Unfortunately, even with our preparations,
75,500 new customers, mostly from the south district. the strong El Niño that gained full strength by the third
By end of 2015, a total of 1,265,625 customers are now quarter of 2015 greatly affected our operations.
counting on us to supply potable water 24 hours a day
at an average pressure of 7 psi (pounds per square inch). We focused our efforts on managing the impact to
our customers. We implemented system adjustments
Redefining customer service to make sure that they would not have to go through
Looking beyond our business of supplying water also a day without water supply, even as we employed
meant discovering and pursuing ways to engage our conservation measures to preserve water level in Angat
stakeholders more meaningfully. dam given PAGASA’s projection that El Niño will persist
until mid-2016.
In 2015, we launched our official social media accounts
on Facebook, Twitter, YouTube and LinkedIn. These This occurrence reinforces our belief in the importance of
social media platforms have redefined the way we our water sustainability and environmental advocacy—a
do customer service by directly connecting us with responsibility that we prioritize as we do our bottom line.
thousands of customers, allowing us to receive and
respond to queries real time, or reach them with urgent In 2015, we reached close to 20,000 children from 52
advisories. Beyond this, social media has also enabled schools with our Daloy Dunong water education program.
us to communicate rich content, start and sustain We constructed drink-wash areas in 54 public schools
discussions, and bring the Maynilad brand closer to to promote proper sanitation and hygiene. In Cavite,
customers and communities. we adopted 6.6 hectares for mangrove rehabilitation,
bringing the total number of mangrove propagules
We shall continue to explore innovative ways to reach planted under our Plant for Life program to 35,000.
our stakeholders through relevant channels.
Water is a finite resource. As we have done in the past,
Focus on advocacy we will continue to reach out to schools, communities,
Since 2010, we have spent considerable resources in and partners in the government and private sector
building a redundant water supply system, which now to stress the urgency of using water responsibly and
includes 25 reservoirs with a total capacity of almost 600 caring for the environment.
10
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Arbitration update
We are entering the fourth year of our rate rebasing
dispute with a partial victory and a long way to go
before full resolution. As you will remember, in 2012, we
underwent a rate rebasing exercise pursuant to the terms
of our Concession Agreement. Unfortunately, our proposed
upward adjustment was not only disapproved but reversed
by our regulators, prompting us to file an arbitration case
before the international arbitration panel in October 2013.
Here, we revised our proposed adjustment and limited our
position to asking for reimbursement of our corporate
income tax as a recoverable expenditure.
Even with a favorable ruling in December 2014, we have

been unable to implement the Arbitral Award until May
2015, when the MWSS granted an upward adjustment
of P2.35 per cu.m. as partial implementation. With the
discontinuance of the CERA, the net adjustment in the Making our mark
average tariff is 4.32% or P1.35 per cu.m. Finally, we also take pride in the various awards that we
received this year. These recognitions are a testament
While this tariff adjustment gives us vindication and to our organizational excellence, both in our business of
hope, the delay in the implementation of the Arbitral providing potable water and beyond it.
Award has cost Maynilad over P5.6 billion in revenue
losses as of December 2015, and these continue to Last year was a celebration of our culture of
increase at an average of approximately P157 million per innovation. Two homegrown teams were declared
month of delay. This is the subject of a second arbitration among the ten winners of the IdeaSpace Startup
case that we initiated in March 2015, and which remains Competition, the country’s first private-led
pending to date. comprehensive inception program.
We remain confident that our position will be upheld in “Mission Ginhawa,” our response to the call for
the end. assistance from Yolanda-hit communities, was also
conferred multiple citations for its innovativeness.
Under this program, we provided easy-to-install,
portable and shareable microfiltration systems that
can purify water from freshwater sources without need
for electricity or chemicals. The system is benefitting
42,000 survivors who no longer have to rely on relief
missions for safe drinking water.
In addition, the ASEAN Corporate Sustainability Awards

recognized the compact wastewater treatment
technology that we applied in constructing 15
sewage treatment plants for the densely populated
San Juan River Basin area. This innovation saved us
47% of otherwise required lot area while providing a
combined treatment capacity of 72,000 cubic meters
of wastewater—enough to serve some 150,000
households per day.

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“I ask that you stay committed
to our business and to the bigger
causes that we espouse, as we make
the full transition from basic utility
to a water solutions company.”
Movements and outlook

Several changes in the senior management of the MVP
Group of Companies will be implemented by 2016. Our
President and CEO, Victorico P. Vargas, will move to his
new assignment with PLDT. He has been instrumental
in shaping the Maynilad organization to become the
results-oriented marketing company that it is now; to
Ricky, we send our most humble thanks.
On behalf of the Board members, we wish him well in his

new role in the MVP Group.
Ramoncito S. Fernandez, formerly the President and

CEO of our Tollways Group, will succeed Ricky as our new
President and CEO come 2016. Mon’s accomplishment
in growing our tollways venture will stand Maynilad in
good stead as it boosts expansion amidst a challenging
business environment.
As we approach the tail end of our first decade since

Maynilad’s re-privatization, I want to take this opportunity
to thank our employees for their hard work, and all our
partners for their continued support. I ask that you stay
committed to our business and to the bigger causes that
we espouse, as we make the full transition from basic
utility to a water solutions company.
Manuel V. Pangilinan
Chairman

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12
President’s
Report
To our Stakeholders,
Year 2015 was another growth year in terms of billed

volume and water service coverage expansion, despite
continuing challenges we face on rate rebasing.
Despite the very tough situation of the past few years,

we were able to focus on doing our jobs the best way
we could. We saw our hard work pay off last year, as our
company regained stability and our sights refocused on
creating value for all our stakeholders.
Meeting service commitments

Our customer base grew by 40% in the last five years,
reaching 1,265,625 water service connections by 2015.
We now have 7,575 kilometers of water pipes, and this
infrastructure now conveys water supply to some
9.2 million Filipinos in the West Zone. Almost 100%
of our customers in the West concession already have
access to potable water 24 hours a day at an average
pressure of 7 psi.
Because of the effects of El Niño, service level dipped

during the last quarter of the year. We worked hard to
cushion the impact of the dry spell on our customers,
and the success of these efforts became apparent in the
continued attainment of our targets. Billed volume for
the year increased to a record-breaking 481.53 MCM—
up from 463.24 MCM in 2014—notwithstanding the
reduced water production.

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This was backed by the sustained downtrend in Non- project consisting of 39 kilometers of primary pipes
Revenue Water (NRW), which reached an all-time low with parallel secondary pipes. This constitutes a bigger
average of 31% in 2015. The reduction from last year’s bulk of the 117 kilometers of new pipelines that we laid
average NRW of 34% represents a water recovery of in 2015 as part of our expansion plans.
about 58 MLD, which flowed through the distribution
system to customer taps instead of going to waste. Our South Septage Treatment Plant—a P363-million
project—now stands in Las Piñas City. Partly funded by
Historically, our wastewater service has lagged behind a World Bank loan, the facility will help expedite the
in terms of achieving our target service coverage, provision of sanitation services in the southern part of
mainly due to difficulties in acquiring appropriate-sized the West Zone. It will serve the areas of Parañaque, Las
lots for new treatment facilities. This year, I am happy Piñas, Muntinlupa and Cavite, and has the capacity of
to report that we are now at 44.2% sanitation coverage treating up to 250 cubic meters of septage per day.
and 14.1% sewerage coverage—up by 15.5 and 2.0
percentage points, respectively—after we employed Setting industry standards
innovative approaches in treatment technologies that Since Maynilad’s re-privatization almost 10 years
can be built on small lots. We will take advantage of this ago, we have prioritized the improvement of process
momentum to further expand this part of our business. efficiencies as part of our business strategy. Several
years ago, we took on the challenging task of getting
Investing in expansion the company-wide ISO certification.
At the beginning of 2015, we committed to build
infrastructure to improve our service levels as well as Following a strict audit process, we have now been
make service delivery more efficient. We targeted a conferred a company-wide ISO certification by TUV
capital expenditure disbursement of over P9 billion Rheinland Philippines. The certification covers 55
toward the attainment of this objective. offices and facilities, including several corporate offices,
Business Areas, warehouses, pumping stations, sewage
In our bid to improve services in the south, we treatment plants and water treatment plants.
invested a total of P1.59 billion for various projects in
Muntinlupa. Among other projects, our Putatan Water At 150 ISO certificates that include Quality Management
Treatment Plant underwent upgrades to ensure that Systems (ISO 9001:2008), Environmental Management
the water pumped out of this plant continues to meet Systems (ISO 14001:2004) and Occupational Safety and
government standards, and provides the required Health Management Systems (BS OHSAS 18001:2007),
production volume for its influence area. the company now has the most number of ISO
certificates for multiple sites in the Philippines.
We also focused on connecting more customers from
our expansion areas in Muntinlupa and in Bacoor and We are proud to be setting industry standards in
Imus, Cavite. We completed a P972-million pipe-laying efficiency and excellence.

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14
Higit sa tubig ang
Employee-led innovation
In 2014, we sought to rationalize our workforce by
aming serbisyo.
offering a Special Opportunity Package for qualified
employees who wanted to avail of early retirement.
The impact of this move was considerable in terms
This both validates reducing our operating cost and increasing our net
income in 2015.
our commitment to Having rolled out this program, we were able to focus
Maynilad’s mission, our human resources efforts on building a culture

of innovation, sustaining workforce engagement,
and further inspires developing leadership and technical competencies,

promoting workforce efficiency, and transforming the
us to work harder way we communicate to better deliver business results.
in the service of
In the area of innovation, our Human Resources
Division launched a series of roadshows to encourage
our fellowmen, our

employees to submit entries to our annual Think
Maynilad Innofest. Over 100 employees participated
and entered a total of 53 entries, of which nine
country, and the finalists and two grand winners were chosen. These
ideas from our employees are now in various stages
environment. of further development, for possible adoption in the

enhancement of company operations.
We are also delighted to report that two of our previous

Innofest winners made it to the top 10 of the 2015
IdeaSpace competition. Our Innofest program was also
recognized at the 51st Anvil Awards.
There is, indeed, wisdom in investing in innovation. We

are always excited to fund and implement crowdsourced
ideas through programs such as our Innofest.
More than a water company

To my mind, the most important milestone of 2015 is
the introspection that we did as an organization, and
the resulting redefinition of our company identity. Now
we are proud to say that we are so much more than a
water utility company.
Our people have always gone above and beyond the

call of duty, especially in times of calamity when we
need to assist our fellow Filipinos. We are all aware—
as members of the Maynilad family with individual
responsibilities—that we serve the public through the
roles that we play in providing safe and clean water.

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Higit sa tubig ang aming serbisyo. This both validates our
commitment to Maynilad’s mission, and further inspires
us to work harder in the service of our fellowmen, our
country, and the environment.
Management change
I wish to thank the shareholders, especially Maynilad
employees for the privilege of being able to lead them
and likewise for their trust and support during the last
five years.
I will leave you with my successor, Ramoncito S.

Fernandez, who will bring you to greater success to
the next level of performance. Mon brings with him
extensive experience in international carrier business,
administration and materials management, industrial
marketing and sales. He has a track record of ensuring
business growth despite challenging situations, and
I have high regard for his dedication and leadership.
As I accept my new assignment in the MVP Group of
Companies, I am confident in the knowledge that
Maynilad will sustain its remarkable performance under
the guidance of Mon Fernandez.
Victorico P. Vargas
President and CEO
Ramoncito S. Fernandez
He has been with the MVP Group of Companies

for over 20 years, heading several business
groups with the Philippine Long Distance
Telephone Co. and serving as President and
CEO of Metro Pacific Tollways Corp., Tollways
Management Corp., and MPCALA Holdings, Inc.
He successfully led the tollways group in its
expansion efforts and increased profitability
threefold during his term.

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16
The operating and regulatory
environment was less than ideal
in 2015. Supply shortage due
to the strong El Niño affected
service levels to 56% of the
West concession during the last
quarter. Meanwhile, the continued
non-implementation of the
arbitral award granting Maynilad
a tariff increase for the fourth
rebasing period threatened the
sustainability of our business.
Despite these challenges,

performance in 2015 was at an all-
time high with all Key Performance
Indicators met. This is proof of our
unwavering commitment to sustain
the investments that will ensure
we meet our service obligations, no
matter the circumstances.
Operational
Highlights
-17
As the process of arbitration
progresses, the men and women
of our ranks remain focused
on achieving our business and
organizational goals, living up to
our new slogan, “Higit sa tubig ang
aming serbisyo”.

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18
Business Environment
Regulatory Setbacks
While we spent 2014 fighting to win the arbitration
case against our regulator, the better part of 2015 saw
us working to have the Arbitral Award implemented.
On January 5, 2015, Maynilad officially received the

award of the Appeals Panel granting our alternative
rebasing adjustment of P4.06 per cubic meter (cu.m.),
which was effectively reduced to P3.06/cu.m., following
the integration of the P1.00 Currency Exchange
Rate Adjustment (CERA) into the basic water charge.
Unfortunately, despite being final and binding under
the Concession Agreement, our regulator refused to
implement the Arbitral Award as it was inconsistent
with the award in the separate arbitration case filed by
Manila Water.
The unfortunate delay in the implementation of the

Award caused us revenue losses amounting to
P3.44 billion from January 2013, when the rebased
rate should have been implemented, until February
2015. To recover this and curtail any additional losses,
we wrote to the Philippine Government, through the
Department of Finance (DOF). The demand letter called
on the Undertaking of the Republic of the Philippines
to indemnify Maynilad for revenue losses caused by
the regulator’s refusal to implement its rightful award.
In March, we reiterated our demand through a second
letter. Both demand letters were not acted upon.
Because of this, we were constrained

to take the matter up in a second
arbitration. On March 27, 2015, we
served the Notice of Arbitration and
Statement of Claim upon the Republic,
through the DOF, with a demand
for compensation for the revenue

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Project Management Challenges
losses incurred. In the Statement, we stressed that the Despite our project management teams’ singular
continued refusal to implement the Appeals Panel’s award focus on meeting our 2015 CAPEX goals, project
was causing us additional losses of an average of implementation was marked by delays and challenges.
P208 million per month.
We committed to implement over P17 billion in CAPEX
On April 21, 2015, the MWSS Board of Trustees projects for 2015, most of which were earmarked for
approved a partial implementation of the arbitral award building sewage treatment plants, conveyance systems,
for a tariff adjustment of P0.64/cu.m. However, net of pumping stations and reservoirs. By the end of the year,
the P1.00 CERA, this translated to a tariff adjustment we managed to disburse only P8 billion. Shortfalls were
of negative P0.36/cu.m., which was significantly due to difficulty in acquiring lots for planned STPs, long
different from the arbitral award of P3.06/cu.m. tariff and tedious process of permit acquisition, and delayed
adjustment, net of CERA. Hence, we did not implement implementation of other projects affected by port
the adjustment. congestion and right-of-way issues.
On May 14, 2015, the MWSS Board of Trustees approved Under the concession agreement, Maynilad is obligated
a 7.52% increase in the prevailing average basic charge to achieve 100% sewerage coverage by the end of the
of P31.25/cu.m. or an upward adjustment of P2.35/cu.m. concession in 2037, which necessarily requires building
as partial implementation of the Arbitral Award. With STPs with enough capacity to service the entire West
the discontinuance of CERA, this brought us to a net Zone. But acquiring lots on which to build these plants
adjustment in average water charge of P1.35/cu.m. has been challenging because of urban congestion. As
a workaround, we have had to make do with building
The Arbitration Tribunal for our second arbitration case several small STPs instead of one large STP with a more
was constituted before the year ended. The hearings optimal capacity. This we have done successfully in the
have yet to start. Although the future of the arbitration San Juan River Basin area, where we decentralized the
process remains unclear, we remain positive that our wastewater treatment system and built 15 compact
due diligence will once again bring us victory. STPs spread out in different locations.
Despite limitations, we were able to complete in 2015

the construction of the STP in Talayan, Quezon City, and
one Septage Treatment Plant (SpTP) in Las Piñas City.
We aim to catch up on our CAPEX commitments by

implementing P13.6 billion worth of projects in 2016 in
the West Zone, a considerable portion of which will be
allotted to our sewerage programs.

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20
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Temporary Service Level Reduction
Some areas of the West Zone experienced reduced
service levels this year owing to two developments—
our realignment of a primary line in Tondo, Manila, and
our self-imposed reduction in raw water drawdown to
preserve water elevation in Angat Dam.
The Department of Public Works and Highways (DPWH)

implemented a flood control project that involved the
construction of an interceptor drainage box culvert
along Blumentritt St. in Manila. Maynilad had an
existing primary line along Juan Luna St. corner Hermosa
St. in Tondo that blocked the path of the DPWH’s
drainage line. For the government project to proceed,
Maynilad realigned its 2,200mm-diameter pipeline.
Our methodology involved removing a segment of the
primary line and replacing it with a cross-under pipe
segment so that the drainage line could pass over it
unimpeded to direct floodwaters from the northern
parts of Metro Manila out to Manila Bay. A mere month after this activity, however, service
levels would take another hit. The El Niño phenomenon
The activity would greatly impact service levels for began to intensify in the last quarter of 2015,
customers, so Maynilad sought to mitigate its effect causing a significant reduction in rainfall at the Angat
by laying a 1,500mm-diameter bypass line through watershed. The Philippine Atmospheric Geophysical and
which water supply would continue to flow while the Astronomical Services Administration (PAGASA) forecast
cross-under pipe segment was installed. Despite this, was that El Niño will persist until the second half of
over 450,000 accounts experienced rotating service 2016. Given this dire projection, the National Water
interruptions, particularly portions of Caloocan, Manila, Resources Board (NWRB) began reducing raw water
Pasay, Makati, Parañaque, Muntinlupa, Las Piñas, Cavite allocations for Metro Manila to manage water level in
City, Imus City, and the towns of Kawit, Rosario and Angat Dam.
Noveleta in Cavite Province.
Maynilad helped in this conservation effort by
Maynilad issued advisories way ahead of the August implementing daily off-peak water service interruptions
implementation so that affected customers may store in September, affecting 56% of its customers.
water for the duration of the activity. In addition, it
deployed 35 water tankers to deliver water to severely These service interruptions were temporarily
affected areas. Though the company estimated the suspended in October after rains brought by Typhoon
pipe realignment to take 107 hours, it was able to Lando over the Angat watershed increased the dam’s
complete the project ahead of schedule; hence, water level by almost four meters. However, as water
affected customers saw service levels return to normal level in Angat Dam continued to decline, the company
earlier than expected. resumed the scheme until November 16, when it
implemented pressure management in lieu of service
interruptions following NWRB’s approval of an increase
in raw water allocation.
We anticipate the effects of El Niño to become a

recurring challenge in the years to come. To combat
these and secure our ability to provide water services
efficiently, we will continue to invest in building new
reservoirs for enhanced water storage capacity.

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22
Expansion
In recent years, we started exploring opportunities to offer our ser-

vices outside the West Zone through subsidiaries and bulk water supply
schemes. While we continued on this track, growth this year took on
many forms—from increases in key performance indicators, to the forging
of strategic partnerships for water solutions services or capacity building.
Capital Investments
Though external factors prevented us from meeting our
CAPEX target for 2015, we were able to complete key
projects that are expected to have a major impact on
our operational efficiency and expansion plans in the
coming years.
Our Alabang-Zapote Booster, a P198-million facility, is

the 25th pumping station to be built in our concession
area. The new structure will enable us to consistently
deliver strong water pressure to over 38,000
households in Las Piñas and Muntinlupa.
Also in the south, our Putatan Water Treatment Plant

(WTP) underwent a P457-million upstream process
improvement to ensure that it meets the required
level of production. Moreover, we invested another
P566 million to sustain the facility’s compliance to
PNSDW. In Northern Metro Manila, we spent
P206 million rehabilitating the chlorine scrubber and
dosing systems at La Mesa Treatments Plants 1 and 2
in Quezon City to maintain compliance with standards
for environmental safety for chemicals.

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Aside from building new facilities and upgrading
existing ones, we also made major investments in our
network of pipelines to reach more customers and
improve service levels.
More households in Cavite and Muntinlupa are now

being served by Maynilad, thanks to 36 kilometers
worth of new primary pipelines laid in Bacoor, Imus and
Muntinlupa. Similar investments were also made to
connect more households in Caloocan and Quezon City.
In Malabon City, we spent almost P30 million to

replace deteriorated pipelines located alongside the
Lambingan Bridge, and this brought uninterrupted
water supply for some 36,000 households.
This year alone, we were able to add 117 kilometers

of primary pipelines, bringing the total West Zone
distribution system to 7,575 kilometers or a 66%
increase from only 4,576 kilometers before re-
privatization in 2006.

-
24
We are now serving
about 9.2 million
Filipinos, all of
whom are counting
on us to provide
them with potable
water every day.

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26
Expansion
Service Coverage Other Growth Prospects

We are now serving about 9.2 million Filipinos, all of In 2015, Maynilad pursued innovative growth strategies
whom are counting on us to provide them with potable for both the organization and its employees.
water every day. This translates to a total of 1,265,625
water service connections—a 6.3% increase from last Through twinning partnerships with water operators
year’s 1,190,062 accounts. Our penetration rate is now here and abroad, our in-house pool of experts raised
at 93.7% of the West concession area. the organization’s profile and upgraded their own
skills through exposure to different challenges and
Some 99.81% of our customers now have 24-hour water situations. We proactively explored more of these
availability, compared to only 32% in 2006. Meanwhile, opportunities in 2015.
100% of the West Zone now receives water supply at
the average pressure of 7 psi. With full coverage of this We entered into a twinning partnership with the
service level attained, we are moving to increase water Metro Iloilo Water District (MIWD) in April. Under this
pressure to 16 psi for all our customers. partnership, Maynilad shared its technical expertise on
managing water losses and operating water treatment
As previously reported, despite reductions in water plants to improve and support the development of Iloilo
production this year, we managed to increase billed City.
volume from 463.24 million cubic meters (MCM) in
2014 to 481.53 MCM in 2015. This is attributed to Through the Asian Development Bank (ADB), Maynilad
the increase in our water service connections and the also entered into a Septage Management Twinning
steady decline in NRW. Partnership with the People’s Republic of Bangladesh.
Under this arrangement, Maynilad mentored three
municipal corporations in Bangladesh, with the goal of
developing septage management plans for these areas.
Our experts conducted an assessment to identify gaps
and opportunities for each of these areas, and delivered
technical and managerial capacity-building trainings for
their personnel.
Another ADB-funded endeavor was our twinning

partnership with the Central Human Resource
Development Unit of Nepal’s Department of Water
Supply and Sewerage (DWSS) to capacitate the
Lekhnath Small Town Water Supply and Sanitation
Users Committee (LSTWSSUC)—water service
provider for Nepal’s Leknath Municipality. Following
our intervention, the LSTWSSUC was able to reduce

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its NRW by 6%, increase its customer base by 23%,
enhance water availability within its service area, and
raise its revenue by some 43%. Through the mentorship
of Maynilad and the World Health Organization,
LSTWSSUC was also able to develop a local water
quality testing protocol and use this to monitor water
quality.
In recent years, we have also proven how the expertise

that we developed internally can be leveraged to help
counterparts provide better water services, generating
additional income for the company in the process.
For example, our Central Non-Revenue Water (CNRW)
Division opened up the possibility of consulting
arrangements early on, with third parties seeking us out
for assistance, given our unparalleled success story in
dramatically reducing water losses since 2007.
In 2015, our new Business Solutions and Sales unit

began offering our in-house expertise to more clients
from different industries, showcasing in many ways
that Maynilad is indeed more than just a water utility.
By the end of the year, we generated almost P4 million
in consultancy contracts involving multiple lines of
expertise.
This only proves that for 2016 and beyond, the

possibilities for expansion are limitless.

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Enhanced Efficiencies
In 2015, we focused on two major thrusts in our drive toward increased

operational efficiencies. First, we continued addressing the problem of
non-revenue water to recover more water for reallocation to expansion
and under-served areas. Second, we followed through on previous years’
efforts of enabling our processes with technology.
Water Loss Reduction

We continue to replace old pipelines and repair pipe
leaks to contain physical losses.
Given our proactive leak detection and intensive

rehabilitation of the distribution system, the past three
years have shown a steady decline in pipe repairs made.
Number of Pipe Leaks Repaired Besides the repair of leaks, we also do pipe
replacements in areas with high NRW level. Year
2012 45,988
2015 saw the replacement of 235 kilometers of
2013 41,171 pipelines, particularly in Cavite City, Tondo in Manila,
and South Caloocan.
2014 36,967
2015 36,967
Meanwhile, to address commercial losses, Maynilad
also replaces old water meters. In 2015 alone, a total
of 137,220 meters that are over five years old have
been recalled and replaced under this initiative, thus
ensuring accurate registration of water consumption.
These efforts helped to bring down average NRW in

the West Zone to 31% from last year’s 34%. This NRW
reduction translates to some 58 MLD of water recovered
and piped to households rather than lost to leaks.
To sustain this downward trend and enable the

company to breach the 30% NRW mark by 2016, around
230 kilometers of pipes in Quezon City, Parañaque and
Cavite have been lined up for replacement, along with
over 137,000 old meters.

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IT and Automation
In 2015, technology continued to work for us in Technology has likewise been useful in allowing us to
enhancing business processes, operational efficiency, innovate the way we connect with our customers. In
security, and customer service. 2015, we initiated paperless billing, which automatically
sends electronic Statements of Account via email, as
The adoption of a state-of-the-art firewall system now well as reminders on current balance via SMS. Aside
keeps our network secure, and seamlessly connects from allowing customers to view current and previous
remote locations and mobile employees to our network. billing information, this facility also redirects them to
We also initiated the second phase of our business online payment systems at their option.
intelligence project, a system that generates in-depth
analyses and reports involving logistics requirements By yearend, Maynilad has likewise managed to
in planning, procurement, inventory management and successfully implement same-day payment posting and
warehousing, among others. increase the frequency of payment files processing to
about three times a day. As a result, we are now able to
Moves to automate our facilities continue as we install process last-minute bill payments, giving rise to fewer
instrumentations and software to broaden the coverage of disconnections that need to be reversed.
our industrial control network. By next year, we expect to
have our Central Control Room (CCR) functioning, where Information and automation technology have become
our operators can monitor operational parameters and an integral part of our operations. Our investments in
provide set points for all water and wastewater facilities in technology have allowed people within our organization
our concession. The CCR, once fully operational, will make to collaborate toward shared goals, and connected
our operations units more nimble when responding to Maynilad better to our valued customers.
issues such as sudden drops in pressure.

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Given our proactive
leak detection
and intensive
rehabilitation of the
distribution system,
the past three years
have shown a steady
decline in pipe
repairs made.

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32
Sewerage and Sanitation
As we approach full water service coverage of the West concession,

we have begun channeling more resources toward our sewerage and
sanitation program. Our investments in the construction of wastewater
facilities enabled us to push sewerage coverage expansion and
consequently help to reduce pollution loading in nearby creeks and rivers.

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In 2015, we increased our wastewater service coverage to With the new Alabang-Zapote (ALAZAP) SpTP in Las
14% from only 12% in 2014 by expanding our sewerage Piñas, which was partly funded by a World Bank loan,
system. We were able to add 4,113 sewer service the turnaround time for vacuum trucks that collect
connections to our existing sewer network and built three septage from septic tanks in the south have been
new STPs, bringing the total number of STPs to 19. Over greatly reduced, enabling us to do more with less
57 million cubic meters of wastewater was treated by our resources. The P363-million facility can treat up to
treatment facilities, for a capture rate of 94%. 500 cubic meters of septage per day, and now serves
Parañaque, Las Piñas, Muntinlupa, Bacoor, Imus, and the
Maynilad also provided desludging services to municipalities of Kawit, Rosario and Noveleta in Cavite.
customers. Only 32% of the over 200,000 accounts we
approached availed of the service. Nevertheless, this Early this year, we began construction of a P1.044-
translated to 63,134 septic tanks cleaned by yearend billion STP in Cupang, Muntinlupa City. This plant
versus last year’s 41,873, or over 98,446 cubic meters will likewise be funded by the $137.5-million World
of septage treated versus last year’s 85,036 cubic Bank loan that funded the ALAZAP SpTP. Designed to
meters. In the coming years, we aim to boost customer accommodate up to 46,000 cubic meters of wastewater
acceptance of our desludging services by tapping local coming from over 57,000 households in the south,
government support and intensifying our information the Cupang STP is expected to have a major impact in
campaign on the benefits of having septic tanks helping keep the Laguna Lake clean.
cleaned regularly.
Another STP currently under construction in San
Meanwhile, sustained investments in wastewater Dionisio, Parañaque City, will add an additional 76,000
infrastructure gave rise to the completion this year of cubic meters of wastewater per day to our treatment
the third Septage Treatment Plant (SpTP) for the West capacity and help to ease pollution loading in Manila Bay.
Zone. This new SpTP was built in Las Piñas so it can service
customers in the south, as our two other SpTPs are located
in the north—i.e., in Caloocan and Quezon City.

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36
Human Resource
Management
Our new slogan, “Higit sa tubig ang Internal Trainers
aming serbisyo,” is informed and Maynilad sustained its investment in human resources
inspired by the men and women training this year, with specific focus on cascading the
values central to the theme that we are more than a
of Maynilad who are dedicated to water utility company.
their work and who espouse the
organization’s ideals of innovation We launched a parallel Human Resources (HR) program
called “Higit sa Tubig: Isip, Puso at Gawa,” which sought
and public service.
to enhance self-worth and employee attitude toward
work and relationships, as well as teach participants
We continue to hone our people’s the value of gratitude and appreciation. The successful
potential by providing them with launch was attended by over 600 employees, including
all key officers and board of directors of Maynilad’s two
opportunities for personal and union groups.
professional advancement through
programs aimed at reinforcing their In terms of competency development, we endeavored
to make capacity building more responsive to
sense of self-fulfillment.
employees’ specific needs last year by partnering with
line managers to identify training gaps and priorities for
their people. Our joint efforts resulted in the conduct of
a total of 52,162 training hours for 68.9% of employees
by yearend.
More importantly, we started cultivating a pool of

internal trainers last year, both as a professional
development motivation for our people and as a means
to deliver more prudent and efficient training programs.
After a successful train-the-trainers program, eight
courses are now being taught by our pool of 28 active
internal trainers. This initiative has effectively saved the
company P12 million in training expenditure and, at the
same time, provided employees with a greater sense of
involvement in the Maynilad community.
We plan on further expanding our training initiatives to

cover more employees and develop more courses in the
coming years.

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Employee Engagement
In 2015, our HR Division took on the task of being a Results of the 2014 EES showed that 93% of
strategic partner in building and sustaining a healthy, Maynilad employees were sustainably engaged. This
highly entrepreneurial and sustainably engaged is 7% higher than the Philippine National Norm.
workforce.
As a follow-through, HR Division intensively worked
Initiatives towards this end built on the results of with line managers to develop action plans that
the Employee Engagement Survey (EES) conducted will sufficiently sustain the gains, as well as address
by Towers Watson in November 2014, which the challenges identified in the survey, specific to
assessed the level of engagement of employees, their respective divisions. Once completed, both the
identify strengths and areas of opportunity in the engagement survey results and plans of action were
organization, and benchmark results with industry communicated to all executives, department heads
standards and best practices. and managers. The action plans were implemented
via team-building sessions for targeted divisions.

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38
Customer Service
Last year marked Maynilad’s entry into social media as Meanwhile, we sought to proactively provide customers
part of our effort to connect with our customers using feedback on complaints made via the Maynilad Hotline
multiple platforms. We started to engage the public 1626. Maynilad customers who called our hotline were
on Twitter and Facebook in August, using these digital given updates on their complaints via voice call or
platforms to disseminate information and notifications text messaging. From July to December, we were able
on a massive scale, as well as to receive and address to provide a monthly average of 5,932 feedbacks to
complaints. The take-up rate was exceptional. By De- customers.
cember, our response management team was answer-
ing a monthly average of 3,014 posts and messages. Maynilad consistently explores creative ways to serve
its customers. In 2015, we began laying the groundwork
We also started to implement our text hotline at for an innovative customer service program called “My
around the same time. The facility enables Maynilad to Water Bill.” The program will enable Maynilad customers
respond to a customer’s inquiry, request or complaint to receive their Statement of Account (SOA) via elec-
through short message system (SMS) or text messag- tronic means, either through SMS, email or a specified
ing. From August, when the platform was launched, web portal. More importantly, the program allows cus-
through December, Maynilad was able to respond to a tomers to post payments in accredited payment cen-
monthly average of 3,042 customer texts. ters by presenting the electronic SOA from their mobile
phones, or even pay their water bills online through
These initiatives serve to complement other existing the web portal that provides links to online payment
Maynilad platforms for receiving customer complaints. facilities. “My Water Bill” is scheduled to become fully
operational by 2016.

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40
Sustainability
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There are two major themes in our
sustainability strategy: operational,
which involves keeping processes
compliant with international
standards; and environmental,
which focuses on securing our
water sources. In 2015, we achieved
major milestones in both areas.

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42
Sustainability
Integrated Management System

Maynilad began pursuing ISO certification in 2007, as
part of the organization’s efforts to professionalize
processes so that these meet international standards.
We have successfully earned multiple ISO certifications
since our first one for the Dagat-Dagatan Sewage and
Septage Treatment Plant, which holds the record of
being the first wastewater facility of its kind in the
Asia-Pacific Region to receive triple ISO certifications.
We are happy to report that our commitment to

operational excellence has paid off in 2015 with the
conferment of a company-wide ISO certification. We
now hold the distinction of being the largest water
utility company in the Philippines with a company-wide
ISO certification in three basic standards: ISO 9001, ISO
14001 and BS OHSAS 18001.
Maynilad’s total number of ISO certificates is 150 by

end of 2015. Our company-wide ISO certificates cover
55 offices and facilities, including several corporate
offices, Business Areas, materials depots (warehouses),
pump stations, sewage treatment plants, and water
treatment plants.
Additionally, Maynilad is the first water company in the

Philippines to receive ISO certification of IEC 20000-
1:2011 for its Information Technology Services Division.
Meanwhile, in the last quarter of 2015, TUV Rheinland

recommended for certification the Energy Manage-
ment Systems of Maynilad’s top energy-consuming
facilities.

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Watershed Management
Maynilad pursues a “Plant for Life” reforestation and
afforestation program to help address the threats of El
Niño, as well as combat soil erosion, flooding and envi-
ronment degradation. The program taps volunteers and
partner agencies to help reforest the Ipo Watershed,
as well as to plant mangrove propagules in the coastal
areas of Manila Bay.
The 2015 run gathered 1,046 volunteers who planted

65,100 trees on the 40-hectare area around the Ipo
Watershed. This brought the number of trees planted
under the “Plant for Life” program to a total of 177,500
trees for the past three years.
In the coastal areas of Cavite, we also brought in volun-

teers to plant some 30,000 mangrove propagules that
will help protect the wetland ecosystem—a sanctuary
for birds and fish—in the years to come. This brings the
total number of mangrove propagules planted in the
coastline to 75,000 since 2013.
To further emphasize the importance of watershed

management, Maynilad partnered with organizers of
the 30th International Coastal Clean-Up Day on Sep-
tember 19, 2015. Aside from providing water stations
and water tankers onsite, Maynilad also deployed 50
employee-volunteers to help in the cleanup of coastal
areas at Baywalk in Manila, SM Mall of Asia in Pasay, Las
Piñas-Parañaque Critical Habitat and Ecotourism Area
(LPPCHEA) in Las Piñas, Marine Tree Park in Navotas,
and Hamilo Hotel in Nasugbu, Batangas.
44
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Corporate
Social
Responsibility
At the heart of Maynilad’s

operations are its advocacy
programs. Beyond providing
potable water, we serve and sustain
communities. We help mold the
next generation of responsible
water consumers. We respond in
times of crisis. We protect the
environment.

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46
Corporate Social Responsibility
Welfare and Livelihood

Maynilad empowers families through sustainable
programs that provide livelihood opportunities to
marginalized communities. In 2015, we sought to uplift
the living conditions of our adopted communities with
innovative and sustainable projects.
We strengthened our partnership with the Dumagat

tribe of the Ipo Watershed through our Sining Ipo
program. Through the program, we brought Dumagat
sculptors under the mentorship of artist Tata Raul
Funilas. The mentorship produced the Sining Ipo
Sungka series—a collection of
wood sculptures in the form of
the traditional game, which also
symbolized the joint campaign
to protect the Ipo watershed and
manage a finite yet vital resource
such as water.
Aside from the sculptors’
In 2015, we sought individual earnings from the sale

of their artwork, the program
to uplift the also contributed to the Sining

Ipo scholarship fund, giving 27
living conditions Dumagat schoolchildren and one

college scholar a chance to continue
of our adopted
their education. The sculptors also
showcased their best works in the
Landas exhibit, which featured
communities with a collection of sculptures from
different livelihood programs of the
innovative and MVP Group at SM Megamall.
sustainable projects. In southern Metro Manila, we gave

volunteers from the Laguna de Bay
community surrounding the Putatan
Water Treatment Plant the task of
clearing water lilies that clogged the
plant’s intake area. Called “Habing
Buhay,” the program opened up for
them the opportunity to make a
living out of the harvested water lilies. We partnered
with the Villar Foundation to teach the volunteers
how to weave baskets and mats out of water lilies. The

-47
results of their handiwork are now being purchased by
Maynilad for use as corporate giveaways.
We also sustained our partnership with the

Mamamayan Para sa Lambat at Dagat Cooperative
of Bacoor, Cavite, with a third donation of P400,000
as incentive for their achievements in promoting the
shellfish industry and the livelihood of thousands of
fishermen in the area.
Also in collaboration with the Bacoor local government

and the water service provider Tubig Pag-Asa, we
brought the "Pag-asa sa Patubig
Partnership" program—a bulk
water scheme—to around 250
poor informal settler families in
MAGTALHAI and DINAMITA, Bacoor
City. Through this arrangement,
households in these areas no longer
have to rely on water rationing,
allowing them to save up to P300
per month.
Finally, we also endeavored to

create an impact in food security
by partnering with the local
government of Parañaque City
for its Food Always in the Home
(FAITH) Gardens program. This
program promotes backyard
farming as a means to help
families provide proper nutrition
for their members while instilling
environmental consciousness and
cooperation among community
members.
We supported the program by

helping to set up four urban
gardens in low-income communities
in Barangays San Dionisio, San
Isidro, BF and Don Galo. Aside from
providing technical resources on sustaining the garden,
Maynilad donated and installed four overhead water
tanks with drip irrigation systems.

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50
Infrastructure
Our Lingkod Eskwela program provided more students
access to clean drinking water through the drink-wash
facilities that we installed in 54 of the most densely
populated and resource-deficient public schools in the
West Zone.
In addition, we supported DepEd’s Brigada Eskwela

program by sending employee-volunteers to refurbish
classrooms and fix the water and sanitation facilities
of 19 public schools in Manila, Muntinlupa, Navotas,
Quezon City, Caloocan City and Valenzuela City.
Maynilad also donated 10 desktop computer terminals

to Gen. Gregorio del Pilar Elementary School in Tondo,
Manila, which lost learning equipment in a fire in 2014.
The company likewise pledged to convert one of its
dilapidated rooms to a computer laboratory.
Under its GinhaWASH (water, sanitation and hygiene)

program, Maynilad installed 777 bidets in 24 health
centers, five hospitals, 20 public schools and 14
barangay halls—establishments engaged in public
service where health and sanitation are of particular
concern. In addition, ten drinking fountains were
installed at Barangay Commonwealth in Quezon City,
and at five health centers in Quezon City and Manila.

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Education and Training
Maynilad also sustained its advocacy of educating Maynilad promotes sports among the youth. In line with
the public about health, sanitation, and the role of this, it tapped employees to serve as coaches for some
proper water use and consumption in preserving the 500 youth from poor families who are eager to learn
environment. Ultimate Frisbee. The company also organized the 2015
Ultimate Inter-Barangay League, which was participated
This year, our water education program “Daloy in by 10 teams from all over the West Zone.
Dunong” reached out to over 18,750 elementary and
high school students from more than 52 schools to Year 2015 also saw Maynilad expanding its education
teach them about the importance of water, good advocacy to industry professionals through the conduct
hygiene and environmental responsibility. Since its of specialized trainings and seminars.
inception in 2012, we have taken “Daloy Dunong”
to more than 200 schools and over 40 other venues Maynilad partnered with UNESCO and the University of
outside campuses, converting close to 55,000 kids the Philippines (UP) to conduct the “International Seminar
into champions for water, health and the environment on Water: Nature’s Precious Gift,” where educators
touted as “Water Warriors”. and community workers discussed education as key to
addressing water-related development challenges. The
As part of our 8th Global Handwashing Day 2015 seminar was participated in by representatives from
celebration, Maynilad visited seven schools in Quezon Indonesia, Thailand, Vietnam, Sweden, Japan, United
City, Manila, Pasay and Parañaque from October 12 to States, Sri Lanka and the Philippines.
15 to teach 2,700 schoolchildren the proper way of
handwashing using soap and water. Through our Maynilad Water Academy, we likewise
Volunteer teachers, including the successfully held a two-day water solutions conference
cast members of the TV shows Hi-5 and exhibition for water industry professionals. The
Philippines and Batibot, encouraged seminar, titled “Making Every Drop Count: Improving
children to always keep their hands Water Supply Efficiency through Collaboration
clean to prevent the spread of and Creativity,” was participated in by about 250
diseases such as pneumonia and participants from local water districts and private water
diarrhea. Handwashing kits were also companies from all over the Philippines. The latest
given to students to encourage them research and innovations in water treatment, pressure
to make it a habit. management, leak management, meter management,
and other areas of specialization were shared by
industry experts during the conference.

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52
Disaster Relief
Maynilad sustains its role as first responder during DSWD-National Resource and Operation Center, Philex
times of calamity, regardless if the affected areas are Group Foundation, Inc., Philippine Disaster Recovery
within the West concession or beyond. Foundation, and International Citizen Service.
After Typhoon Lando made its landfall, Maynilad was When Typhoon Nona came, we were also present to
quick to assist in government relief efforts by providing assist in relief operations and bring precious bottled
potable water for some 3,400 affected families in water to around 1,000 families in Samar and Leyte,
Isabela, Aurora, Nueva Ecija, Benguet, Pangasinan, again in collaboration with the TV5 AKFI.
Pampanga and Quezon. Besides drinking water,
Maynilad also donated 2,000 pieces of galvanized iron Maynilad also had the opportunity to help in various
sheets to typhoon-stricken families in General Nakar, areas hit by fire, including in Manila, Pasay, Parañaque,
Quezon, to help them start rebuilding their houses and Caloocan, Valenzuela and Quezon City. By the end of
their lives. 2015, we were able to give assistance to as many as 2,200
families through our fire relief programs conducted
These relief activities were done in partnership with in collaboration with government agencies, local
the TV5 Alagang Kapatid Foundation, Inc. (AKFI), government units and private groups, including AKFI.

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Recognition
Our corporate social responsibility programs have given at the 50th Anvil Awards. The same program was
us both a sense of fulfillment and pride. awarded the 2015 Asia-Pacific Stevie Silver Award for
its innovative approach in disaster response out of 400
During the 2014 Philippine Quill Awards held last nominations from organizations in 22 countries across
March 9, 2015, Maynilad’s advocacy projects brought the Asia-Pacific region.
home a total of four awards. Our “Daloy Dunong”
Water Education Program and “Mission Ginhawa: It is encouraging that our efforts to become a positive
Water Solution for Yolanda-Hit Communities” disaster force in communities and the country are appreciated
response program were recognized under the Corporate and recognized. But beyond these accolades, it is the
Social Responsibility category of the Communication desire to be of service to our fellow Filipinos that will
Management Division, and conferred an Award of continue to motivate us to make a difference in the
Excellence and a Merit Award, respectively. lives of others.
In addition, for its innovative approach to disaster

response, “Mission Ginhawa” also won a Gold Anvil
Award in the PR Programs-Disaster Programs Category

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54
Awards
Local Awards
Award-Giving Body Organizer Recognition Entry

Kapatiran sa Industriya (KAPATID) Employers Confederation of 2015 KAPATID Awards Grand Winner N.A.
Awards the Philippines
Philippine Quill Awards 2014 International Association of Award of Excellence Daloy Dunong
Business Communicators –
Philippines
Merit Award Mission Ginhawa
Ripples newsletter
Maynilad Website
50 Anvil Awards
th
Public Relations Society Gold Anvil Mission Ginhawa
of the Philippines
Award of Excellence Safety Organization of the Exemplary Record of 16 Million Man- N.A.
Philippines Hours without Lost Time Accident
Safety and Health Excellence Workplace Advocates on Recognition for implementation of N.A.
(SHE) Award Safety in the Philippines, Inc. workplace safety and health standards
(WASPI)
Gawad KAAGAPAY (Korporasyon LANDBANK of the Philippines First Runner-up, Large Corporation/ N.A.
na Kaagapay sa Ating Ganap na Non-Agriculture-based Category
Tagumpay) Awards
International Awards
Award-Giving Body Organizer Recognition Entry

ASEAN Corporate Sustainability Apex Global First Runner-up, Product/Service Maynilad Decentralized
Awards Innovation Category Wastewater Treatment Facilities
in Quezon City
2015 Global CSR Summit and Pinnacle Group International Gold Award for Environmental Maynilad’s environmental
Awards Excellence initiatives
Asia-Pacific Stevie Awards The Stevie Awards Silver Award Mission Ginhawa
Ripples newsletter
WaterLinks Awards 2015 WaterLinks Winner, along with Nepal’s Twinning Partnership with DWSS
Department of Water Supply and and LSTWSSUC
Sewerage (DWSS) and Lekhnath Small
Town Water Supply and Sanitation
Users Committee (LSTWSSUC)

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It is encouraging that our efforts to become
a positive force in communities and the
country are appreciated and recognized.
But beyond these accolades, it is the desire
to be of service to our fellow Filipinos that
will continue to motivate us to make a
difference in the lives of others.

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56
Financial
Review and
Analysis
and the lower CMD which tends to bring down average
tariff as a result of Maynilad’s socialized rates structure
where high consuming consumers subsidize low
consumers within the same customer classification.
Other fees and services which primarily consists of

installation charges and reconnection fees reflected a
decline of 6.8% to P395 million as the regulatory office
approved lower rates during the year. Consolidated
revenues from operations amounted to P19.1 billion, a
4% increase from P18.36 billion last year.
Cash Operating Expenses

Consolidated cash operating expenses decreased 3.0%
to P5.18 billion versus P5.34 billion last year primarily
due to lower personnel costs driven by the one-time
Revenues Special Opportunity Package (SOP) implemented last
Consolidated revenues from water and sewer services year to improve employee productivity, as well as
for the full year 2015 grew 4.3% to P18.7 billion from savings on major expense items such as light and power
P17.94 billion last year. The increase in revenues was and repairs and maintenance costs.
primarily driven by the 4.3% increase in billed volume,
coupled with 0.1% increase in average effective tariff. Personnel costs, the company’s single largest cost
element declined 8.9% to P1.85 billion from
Effective June 1, 2015, Maynilad was able to implement P2.03 billion last year, which included P283 million for
a standard inflationary or CPI increase of approximately the SOP. Total number of employees as of December
7.52% exclusive of the discontinuation of the P1.00 2015 was 2,147 compared to 2,071 at the end of
CERA. The delayed CPI adjustment was a stand-still the same period last year. This reflected a slight
of sort with neither the new rebased rates won by improvement in the employee productivity ratio to 1.70
Maynilad in arbitration nor the rate reduction sought employees per 1,000 connections at the end of the year
by MWSS being implemented. The impact of the CPI compared to 1.74 in the prior year. Excluding the one-
adjustment was diluted by the late implementation time charge, personnel cost would have grown by 6%.

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Light and power declined 1.9% to P780 million as the P232 million of provisions for doubtful accounts due
company benefited from lower average power rates to the company’s improved collection performance.
obtained from retail electricity contracts which brought Despite the reversal, average days sales outstanding at
down average costs per kilowatt-hour by around 16%, the end of the period was maintained at 46 days, same
offsetting a 17% growth in kilowatt-hour consumption as the level at the end of 2014.
due to higher production in the Putatan treatment
plant, pumping activities in the South, and more Due to the offsetting movement, consolidated non-cash
sewage treatment plants in operation. operating expenses remained flat.
Outside services increased 4.8% to P570 million as the Net Income

company increased sanitation services in the South With total operating expenses declining, consolidated
using a specialized service contractor. Repairs and income from operations grew faster than revenues
maintenance dropped 21.6% to P389 million in line with improving by 8.3% to P11.85 billion from P10.95 billion last
lower leak repairs. These four items are the company’s year. Reported consolidated net income grew at an even
largest cost elements, accounting for 69% of total cash higher pace of 15.7% to P9.55 billion from
expenses, and as a group declined 7.2%. P8.26 billion in the prior year, due to lower interest
expense.
In contrast, all other expense items accounting for
31% of the total, increased 7.8%, as a result of higher Consolidated core net income for the period, which
local taxes due to the increase in operating facilities, excludes one-time charges such as last year’s SOP and
and additional professional fees in relation to the foreign exchange gains or losses, amounted to
company preparation for the new arbitration against P9.68 billion, a growth of 10.3% from last year’s
the government to enforce its guarantee on the consolidated core net income of P8.78 billion.
unimplemented rebased rates. (See Other Matters: Rate
Rebasing Update.) EBITDA
Consolidated core Earnings before Interest, Taxes, and
Non-Cash Operating Expenses Depreciation (EBITDA) grew by 7.9% to P13.9 billion
Under IFRIC 12, all property plant and equipment versus P12.9 billion last year, resulting in an improved
(PP&E) defined as parts of the network are considered margin of 72.8% versus 70% last year, driven primarily
intangible assets. These are no longer depreciated but by the reversal of the provision for doubtful accounts.
are instead amortized over the life of the concession
similar to concession fees. Concession assets Balance Sheet
(composed of concession fees and network PP&E) are In 2015, Maynilad’s consolidated assets grew 12.1% to
considered intangible assets and are amortized over the P81.35 billion compared to P72.54 billion at the end of
life of the concession. Beginning 2013, the company 2014 due primarily to the addition of concession assets.
decided that given the large initial expenditures and Concession assets continued to form bulk of total
the economic benefit of the concession asset being assets growing 9.8% net of amortization to
more closely aligned with the growth in billed volume, P62.49 billion or 77% of total assets of the company.
it would apply the unit-of-production (UOP) method,
instead of the straight-line method, of amortizing its Debt-to equity ratio improved to 56:44, despite the
concession asset. payment of P2 billion in cash dividends in March, and
a net increase in borrowings, despite the substantial
Amortization of intangible assets increased 12.9% to cash balance, due to drawdowns on concessionary
P2.04 billion from P1.8 billion in the prior year, in line debt facilities that had been specifically set up to fund
with the company’s continuing capital expenditure sewerage projects.
program. Offsetting this increase is the reversal of

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58
Financial Review and Analysis
Investments Waterworks and Sewerage System (MWSS) given the

Acquired in August 2012 and owned 100% by Maynilad, exclusive right to manage water and wastewater
PhilHydro owns and operates three plants that supply operations in the West Zone of the Greater Manila Area
treated bulk water to the Legazpi City Water District in as defined in the Concession Agreement (CA) entered
Albay, Norzagaray Water District and Santa Maria Water into by both parties on February 21, 1997. Under the
District in Bulacan, and municipal waterworks of Bambang, CA, a Rate Rebasing process is conducted every five
Nueva Vizcaya. The company also owns and operates the years to determine the adjustment to be made to the
treated water supply and distribution system of Rizal, tariff charged by Maynilad for the services it renders
Nueva Ecija. The company has a total plant capacity of that will allow it to recover and earn a return on its
53 MLD and is currently operating at around 33 MLD. expenditures.
In 2015, PhilHydro’s billed volumes significantly On March 30, 2012, Maynilad submitted a business plan
improved compared to the same period last year, for the determination of the adjustment to be applied
growing 18.2% to 32.7 MLD. Bulacan billed volume to its standard rates for the period 2013 to 2017. After
grew a substantial 32.7% as new pipe capacity allowed almost one and half years of review and discussion, in
for expansion in the water districts of Norzagaray and a resolution dated September 12, 2013, MWSS denied
Santa Maria in Bulacan, as well as supply water to the Maynilad’s petition for an upward adjustment of
INC-led Ciudad de Victoria complex, which houses the 28.35% of its average basic charge (or P8.58 per cubic
Philippine Arena. Billed volume in Legazpi also grew meter), and instead approved a negative adjustment
6.1% as water supply issues that affected billed volume of 4.82% (or P1.46 per cubic meter), which Maynilad
in 2014 had been addressed. The company generated subsequently contested.
revenues of P174 million and income from operations of
P50.7 million. Net income contribution to Maynilad was Under the CA, any disagreement or dispute which
P20.6 million and EBITDA amounted to P71 million. cannot be resolved through consultation or negotiation
between the parties must be resolved through an
On 28 January 2013, Maynilad won the bid to acquire arbitration process. In this regard, on October 4, 2013,
10% of Subic Water and Sewerage Company Inc. (Subic Maynilad filed a notice of dispute with the Secretariat
Water) from the city of Olongapo for P210 million. of the International Chamber of Commerce (ICC)
After the expiry of the right of first refusal of Subic International Court of Arbitration to resolve its rebasing
Water’s existing shareholders to acquire the shares, dispute with MWSS. Maynilad reviewed and took into
Maynilad signed the deed of sale for the acquisition on consideration the MWSS determination as outlined in
15 March 2013. its September resolution and submitted an alternative
proposal with a positive adjustment of 13.41% (or
Subic Water operates the water supply and sewerage P4.06 per cubic meter). The most significant element
system in the Subic Bay Freeport and the water system driving this alternative proposal is Maynilad’s position
in Olongapo City, under a franchise agreement expiring that corporate income tax should be a recoverable
in 2027. Billed connections for 2015 reached 40,137 expenditure in tariff determination.
accounts while average NRW stood at 27%. Unaudited
gross revenues amounted to P617.3 million while A three-member panel called the Appeals Panel
net income was at P177.7 million. Maynilad’s 10% conducted the arbitration proceedings in accordance
investment in Subic Water is carried at cost less any with the arbitration rules of the United Nations
impairment losses. Commission on International Trade Law (UNCITRAL).
The Appeals Panel consists of a Chairman appointed by
Other Matters: Rate Rebasing Update the International Chamber of Commerce and a nominee
Maynilad is a concessionaire of the Metropolitan each of Maynilad and the MWSS.

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On April 21, 2014, the Appeals Panel was deemed On March 9, 2015, Maynilad again wrote the Philippine
constituted and the formal arbitration process began, Government, through the DOF, to reiterate its demand
culminating in formal hearings that occurred from against the Undertaking. Maynilad demanded that
August 24 to September 1, 2014. The closing memorials the Republic pay it, immediately and without further
were submitted on October 6, 2014 and the reply delay, the P3.44 Billion in revenue losses that it has
memorials on October 31, 2014. On January 5, 2015, thus far sustained as a direct result of the MWSS’ and
Maynilad officially received the Appeals Panel’s award the RO’s refusal to implement its correct Rebasing
dated December 29, 2014 (the “Award”) upholding Adjustment from January 1, 2013 (the commencement
Maynilad’s alternative Rebasing Adjustment for the of the 4th Rate Rebasing Period) to February 28, 2015.
4th Rate Rebasing Period of 13.41% or its equivalent Maynilad reserved its right to update the demand for
of P4.06/cu.m. This increase has effectively been as long as it remains unpaid, and the MWSS and the RO
reduced to P3.06, following the integration of the P1.00 continue to refuse to honor and implement the Appeals
Currency Exchange Rate Adjustment into the basic Panel’s final and binding Award upholding its Rebasing
water charge. Adjustment.
The Award being final and binding on the parties, On March 27, 2015, Maynilad served a Notice of
Maynilad asked the MWSS to cause its Board of Trustees Arbitration and Statement of Claim upon the Republic,
to approve the 2015 Tariffs Table so that the same through the DOF, pursuant to the terms of the
can be published and implemented 15 days after its Undertaking and the 1976 UNCITRAL Arbitration Rules
publication. and in respect of its demands for payment made on
the Republic under its letters dated February 20 and
However, the MWSS and the Regulatory Office have March 9, 2015 (collectively, the “Demand Letters”).
chosen, over Maynilad’s repeated objections, to defer Maynilad demands arbitration to resolve the issue on
the implementation of the Award despite the Award the Republic’s liability for compensation that Maynilad
being final and binding on the parties. In its letter dated has claimed in the Demand Letters, the Notice of
February 9, 2015, the MWSS and Regulatory Office Arbitration and the Statement of Claim.
(RO), who received their copy of the Award on January
7, 2015, informed Maynilad that they have decided to On April 21, 2015, the MWSS Board of Trustees in its
await the final outcome of their arbitration with the Resolution No. 2015-004-CA dated March 25, 2015
other concessionaire, Manila Water, before making any approved to partially implement the Arbitral Award
official pronouncements on the applicable resulting of a tariff adjustment of P0.64 per cu.m., net of the
water rates for the two concessionaires. P1.00 CERA, which translates to a tariff adjustment of
negative P0.36 per cu.m. as opposed to the Arbitral
On February 20, 2015, Maynilad wrote the Philippine Award of P3.06 per cu.m. tariff adjustment, net of
Government, through the Department of Finance CERA. For being contrary to the Final Award as well as
(DOF), to call on the undertaking which the Republic the provisions of the Concession Agreement, Maynilad
of the Philippines (the “Republic”) issued in favor of did not implement this tariff adjustment.
Maynilad on July 31, 1997 and March 17, 2010 (the
“Undertaking”). The Undertaking provides, among other On May 14, 2015, the MWSS Board of Trustees in its
things, that the Republic shall indemnify Maynilad in Resolution No. 2015-060-RO approved a 7.52% increase
respect of any loss that is occasioned by a delay caused in the prevailing average basic charge of P31.25 per
by the Republic or any government-owned agency cu.m. or an upward adjustment of P2.35 per cu.m. as
in implementing any increase in the Standard Rates partial implementation of the Arbitral Award. With the
beyond the date for its implementation in accordance discontinuance of CERA, the net adjustment in average
with the Concession Agreement. water charge is P1.35 per cu.m.

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60
Board of
Directors
Manuel V. Pangilinan
Chairman, 2007 to present
Mr. Pangilinan assumed chairmanship of Maynilad in January 2007 and Outside the First Pacific Group, Mr. Pangilinan was a member of the
remain as such up to the present. He was appointed as Chairman of the Board of Overseers of The Wharton School, University of Pennsylvania.
Philippine Long Distance Telephone Company (PLDT) after serving as its He is currently Chairman of the Board of Trustees of San Beda College.
President and Chief Executive Officer from Nov. 1998 to Feb. 2004 and He also serves as Chairman of Hong Kong Bayanihan Trust, a non-stock,
became Chairman of PLDT Communications and Energy Ventures Inc. non-profit foundation which provides vocational, social and cultural
(formerly Piltel) on Nov. 3, 2004. He also holds chairmanship in Beacon activities for Hong Kong’s foreign domestic helpers. In Feb. 2007, he
Electric Asset Holdings, Inc., Metro Pacific Investments Corp., Smart was named President of the Samahang Basketball ng Pilipinas, and
Communications, Inc., Landco Pacific Corp., Philex Mining Corp., Manila effective Jan. 2009, he assumed chairmanship of the Amateur Boxing
North Tollways Corp., Medical Doctors, Inc. (Makati Medical Center), Association of the Philippines. In 2009, he was appointed Chairman of
Colinas Verdes, Inc. (Cardinal Santos Medical Center), Davao Doctors, the Philippine Disaster Recovery Foundation, Inc. He is also chairman
Inc., Riverside Medical Center, Inc. in Bacolod City, Our Lady of Lourdes of the Philippine Business for Social Progress, Vice Chairman of the
Hospital, Asian Hospital, Inc., Mediaquest Inc., Associated Broadcasting Foundation for Crime Prevention, a member of the Board of Trustees
Corp. (TV5), and Manila Electric Company (Meralco). of Caritas Manila and Radio Veritas Global Broadcasting Systems, Inc.,
a former Commissioner of the Pasig River Rehabilitation Commission,
Mr. Pangilinan founded First Pacific in 1981 and served as its Managing and a former Governor of the Philippine Stock Exchange. In 2012, he
Director until 1999. He was appointed Executive Chairman until June was appointed Co-Chairman of the newly organized US-Philippines
2003, when he was named CEO and Managing Director. He also holds Business Society.
the position of President Commissioner of P.T. Indofood Sukses Makmur
Tbk, the largest food company in Indonesia.

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Isidro A. Consunji
Vice Chairman, 2007 to present
Mr. Consunji has been Vice Chairman of Maynilad since January 2007. He became President of the Philippine Constructors Association from
He is a Member of the Board of Directors of DMCI Holdings, Inc. 1999 to 2000, and the Philippine Chamber of Coal Mines, Inc. from
(DMCI), Semirara Mining and Power Corp., Crown Equities, Inc., Atlas May 1999 to January 2002. At present, he is Chairman of the Philippine
Consolidated Mining and Development Corp., D.M. Consunji, Inc., DMCI Overseas Construction Board (POCB), and a Board Member of the
Project Developers Inc., DMCI Mining Corp., DMCI Power Corp., DMCI Construction Industry Authority of the Philippines.
Masbate Corp., Maynilad Water Holding Co. Inc. (formerly DMCI-MPIC
Water Company), Sem-Calaca Power Corp., Southwest Luzon Power Mr. Consunji is an active member of the U.P. Beta Epsilon Fraternity,
Generation Corp., Sem-Calaca Res Corp., Sem-Cal Industrial Park Asian Institute of Management Alumni Association, U. P. Alumni
Developers, Inc., Dacon Corp., DFC Holdings, Inc., and Beta Electric Corp. Engineers, and U.P. Aces Alumni Association.
Mr. Consunji graduated from the University of the Philippines where

he earned a degree in Bachelor of Science in Engineering. He also
took up Master of Business Economics from the Center for Research &
Communication, and Master of Business Management from the Asian
Institute of Management. He took up Advanced Management Program
at IESE School in Barcelona, Spain.

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62
Board of Directors
Jorge A. Consunji
Director 2007 to present
Jose Ma. K. Lim Mr. Consunji has been a Director of Maynilad since January 2007. He
is also presently the President and Chief Operating Officer of D.M.
Consunji, Inc. He also serves as a member of the Board of Directors of
Director, 2007 to present DMCI Holdings Inc., Semirara Mining and Power Corp., D.M. Consunji,
Inc., DMCI Project Developers, Inc., DMCI Mining Corp., DMCI Power
Corp., DMCI Masbate Corp., Sem-Calaca Power Corp., Southwest Luzon
Mr. Lim has been a Director of Maynilad since January 2007. He is Power Generation Corp., Maynilad Water Holding Co. Inc. (formerly
President & CEO of Metro Pacific Investments Corp., and is also DMCI-MPIC Water Company), Dacon Corp., DFC Holdings, Inc., Beta
currently a Director in the following MPIC subsidiary and/or affiliate Electric Corp., Wire Rope Corp., Private Infra Dev Corp., Manila Herbal
companies: Beacon Electric Asset Holdings Inc., Manila Electric Corp., Sirawai Plywood & Lumber Co., and M&S Company, Inc.
Company, Metro Pacific Tollways Corp., Manila North Tollways Corp.,
Tollways Management Corp., Indra Philippines Inc., Medical Doctors,
Inc. (owner and operator of Makati Medical Center), Cardinal Santos
Medical Center (Colinas Verdes Hospital Managers Corp.), and Our Lady
of Lourdes Hospital. He serves as Chairman of Asian Hospital, Davao
Doctors Hospital (Clinica Hilario) Inc., and Riverside Medical Center in
Bacolod. Mr. Lim is also President of the Metro Strategic Infrastructure
Holdings, Inc. (MSIHI) which holds a minority ownership in Citra Metro
Manila Tollways Corp. (Skyway). He is active in the Management
Association of the Philippines and has served as Vice-Chair of the Good
Governance Committee from 2007 to 2009. He is a founding member
and Treasurer of the Shareholders Association of the Philippines.

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Victorico P. Vargas
Director, 2007 to present
Mr. Vargas is concurrently the President and CEO of Maynilad. He

formally took over the position last August 2010. He is also a Director
for Metro Pacific Investments Corp., Metro Pacific Water Investments
Corp.; Director and Chairman of Philippine Hydro, Inc.; member of
the Executive Committee of the First Pacific Leadership Academy,
and trustee of the MVP Sports Foundation, Inc. and the IdeaSpace
Foundation, Inc.
In the field of sports, he currently holds the position of President for

Randolph T. Estrellado
the Amateur Boxing Association of the Philippines (ABAP). He has Director 2007 to present
recently been elected as a member of the Executive Committee of the
Asian Boxing Confederation (ASBC). He also holds the position of Vice
Chairman for the Samahang Basketbol ng Pilipinas, Inc., the national Mr. Estrellado has been a Director of Maynilad since January 2007 and is
sports association for Philippine Basketball, and he is an Alternate concurrently the Company’s Chief Finance Officer. He was Director and
Governor and former Chairman of the Philippine Basketball Association, Chief Finance Officer of Metro Pacific Investments Corp. Prior to joining
the nation’s professional basketball league. The Philippine Sportswriters Metro Pacific, Mr. Estrellado was Vice President and Chief Finance
Association (PSA) conferred Mr. Vargas with the title “Executive of the Officer for ABS-CBN Broadcasting Corporation. While at ABS-CBN, he
Year” for 2011. managed all aspects of the network’s financial operations, including
financial planning, controllership, treasury, budget, and investor
relations. Mr. Estrellado had served in various positions of senior
responsibility with the Lopez Group of Companies since 1996. He had
formerly also served in financial positions at Phinma and P.T. Dwi Satrya
Utama in Indonesia.

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64
Board of Directors
Atty. Marilyn A.
Victorio-Aquino
Director, December 21, 2012 to present
Atty. Aquino joined the Maynilad Board on December 21, 2012. She
is also Assistant Director at First Pacific Company Limited (FPC). She
joined FPC on July 1, 2012 following her 31-year practice at SyCipLaw.
She graduated cum laude (class salutatorian) from the University of the
Philippines, College of Law in 1980 and placed second in the Philippine
Bar Examination in the same year. Atty. Aquino is also a Director of Kensuke Tatsukawa
Philex Mining Corporation, Philex Petroleum Corporation, and Silangan Director, April 22, 2013 to present
Mindanao Mining Co., Inc.
Mr. Tatsukawa joined the Maynilad Board of Directors last April 2013,
and is the Unit Director for the Environment Infrastructure Department
of the Marubeni Corporation. He was also assigned by Marubeni to help
facilitate international projects in Doha, Qatar as Project Director for
the Doha Sewage Project Office (2008-2010), and in Jakarta, Indonesia
as Project Coordinator (1994-2001).

-65
Manabu Sugawara
Director, August 1, 2014 to present
Mr. Sugawara joined the Maynilad Board of Directors last August 2014.
He has been engaged in the development of various international
infrastructure projects in Marubeni Corporation for over 20 years,
including the overseas assignments in Manila, Philippines (2000-2002),
and in Lima, Peru (2009-2011). Mr. Sugawara held a director position in
Marubeni’s water business subsidiary and/or affiliate companies, such
as Consorcio Agua Azul S.A. (Lima, Peru), Chengdu Generale Des Eaux-
Marubeni Waterworks Company Limited (Sichuan Province, P.R.China).
He is also presently Vice President of Marubeni Philippines Corp.

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66
Top
Management
Team

-67
Victorico P. Vargas
President and Chief Executive Officer

-
68
Top Management Team
Antonio F. Garcia
Head, Wastewater Management
Randolph T. Estrellado
Chief Finance Officer
John Patrick C. Gregorio

Head, Commercial & Marketing

-69
Arturo Celso D. Baranda
Head, Corporate Logistics
Lourdes Marivic P. Espiritu

Head, Legal & Regulatory Affairs

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70
Top Management Team
Levi F. Diestro
Head, Human Resources
Christopher J. Lichauco
Head, Business Area Operations

-71
Herbert M. Consunji
Chief Operating Officer
Ronaldo C. Padua
Head, Water Supply Operations

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72
Top Management Team
Irineo L. Dimaano
Head, Central Non-Revenue Water
Marcos D. de Jesus
Head, Technical Services

-73
Francisco C. Castillo
Head, Information Technology Services
Yolanda C. Lucas
Head, Program Management
Francisco A. Arellano
Head, Corporate Quality, Environment, Safety & Health

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74
INDEPENDENT
AUDITORS' REPORT
The Stockholders and the Board of Directors

Maynilad Water Services, Inc.
MWSS Compound, Katipunan Road
Balara, Quezon City
We have audited the accompanying consolidated financial statements of Maynilad Water Services, Inc. and
Subsidiaries (a subsidiary of Maynilad Water Holding Company, Inc.), which comprise the consolidated statements
of financial position as at December 31, 2015 and 2014, and the consolidated statements of income, statements of
comprehensive income, statements of changes in equity and statements of cash flows for each of the three years
in the period ended December 31, 2015, and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements
in accordance with Philippine Financial Reporting Standards, 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.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free from material misstatement.
CONSOLIDATED
FINANCIAL
STATEMENTS
From Basic Utility, to Water Solutions Company
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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Maynilad Water Services, Inc. and Subsidiaries as at December 31, 2015 and 2014, and their financial performance
and their cash flows for each of the three years in the period ended December 31, 2015 in accordance with
Philippine Financial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Johnny F. Ang
Partner
CPA Certificate No. 0108257
SEC Accreditation No. 1284-A (Group A),
February 14, 2013, valid until April 30, 2016
Tax Identification No. 221-717-423
BIR Accreditation No. 08-001998-101-2015,
November 25, 2015, valid until November 24, 2018
PTR No. 5321603, January 4, 2016, Makati City
February 17, 2016

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MAYNILAD WATER SERVICES, INC. AND SUBSIDIARIES
(A Subsidiary of Maynilad Water Holding Company, Inc.)
CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
(Amounts in Thousands)
December 31
2015 2014
ASSETS
Current Assets
Cash and cash equivalents (Notes 4, 24 and 25) P3,093,012 P4,188,538
Short-term investments (Notes 4, 24 and 25) 6,088,541 2,915,000
Trade and other receivables (Notes 5, 24 and 25) 2,428,812 2,048,550
Other current assets (Notes 6, 10, 24 and 25) 3,216,752 2,674,631
Total Current Assets 14,827,117 11,826,719
Noncurrent Assets
Service concession assets (Notes 7, 10, 12, 14 and 22) 62,488,321 56,926,326
Deferred tax assets - net (Notes 15 and 20) 2,139,574 2,160,729
Property and equipment (Note 8) 833,821 809,718
Goodwill (Note 2) 288,082 288,082
Available-for-sale financial assets (Notes 9, 24 and 25) 132,387 110,377
Other noncurrent assets (Notes 2, 5, 24 and 25) 643,548 419,650
Total Noncurrent Assets 66,525,733 60,714,882
P81,352,850 P72,541,601
LIABILITIES AND EQUITY

Current Liabilities
Current portion of interest-bearing loans (Notes 7, 10, 24 and 25) P1,742,164 P1,692,163
Trade and other payables (Notes 11, 14, 16, 23, 24 and 25) 11,327,222 10,333,720
Current portion of service concession obligation payable to MWSS (Notes 7, 12, 24 and 25) 1,357,705 1,094,378
Total Current Liabilities 14,427,091 13,120,261
Noncurrent Liabilities
Interest-bearing loans - net of current portion (Notes 7, 10, 24 and 25) 23,337,175 22,509,248
Service concession obligation payable to MWSS - net of current portion (Notes 7, 12, 24 and 25) 6,737,157 7,040,965
Deferred credits (Notes 2, 7, 24 and 25) 583,643 1,153,459
Customers’ deposits (Notes 2, 24 and 25) 244,434 219,945
Pension liability (Note 16) 416,234 281,832
Other noncurrent liabilities (Note 16) 68,461 348,860
Total Noncurrent Liabilities 31,387,104 31,554,309
Total Liabilities (Carried Forward) 45,814,195 44,674,570

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December 31
2015 2014
Total Liabilities (Carried Forward) 45,814,195 44,674,570
Equity
Capital stock (Notes 1 and 13) 4,546,982 4,546,982
Additional paid-in capital (Note 13) 9,979,786 9,979,786
Treasury shares (Note 13) (104,654) (98,526)
Other comprehensive income (Notes 9 and 16) 27,219 46,162
Other equity adjustments (Note 13) (163,152) (309,220)
Retained earnings (Note 13)
Unappropriated 13,752,474 9,701,847
Appropriated 7,500,000 4,000,000
Total Equity 35,538,655 27,867,031
P81,352,850 P72,541,601
See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED
STATEMENTS OF INCOME
Years Ended December 31

2015 2014 2013
OPERATING REVENUE
Water services:
West zone P15,161,712 P14,509,367 P13,468,569
Outside west zone 173,937 134,930 118,520
Sewer services -
West zone 3,367,186 3,294,000 2,909,369
Others 395,402 424,378 398,742
19,098,237 18,362,675 16,895,200
COSTS AND EXPENSES
Amortization of service concession assets (Note 7) 2,037,684 1,804,448 1,565,644
Salaries, wages and benefits (Notes 13, 14 and 16) 1,847,947 2,029,042 2,042,867
Contracted services 913,880 819,463 767,902
Utilities 831,853 846,894 824,950
Repairs and maintenance 388,703 495,833 467,546
Depreciation and amortization (Note 8) 260,174 256,745 231,241
Provision for (reversal of) doubtful accounts (Note 5) (231,978) 358 142,952
Materials and supplies 223,597 183,370 192,747
Taxes and licenses 189,184 168,791 155,178
Rental (Notes 22 and 23) 150,624 167,654 158,907
Collection charges 137,113 122,050 108,706
Transportation and travel 122,587 185,013 175,204
Business meetings and representations 95,834 82,147 121,744
Regulatory costs 94,344 71,431 63,106
Advertising and promotion 52,450 40,867 29,175
Insurance 43,541 42,990 40,782
Others 87,947 97,413 57,901
7,245,484 7,414,509 7,146,552
INCOME BEFORE OTHER INCOME (EXPENSES) (Carried Forward) 11,852,753 10,948,166 9,748,648

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2015 2014 2013
INCOME BEFORE OTHER INCOME (EXPENSES) (Carried Forward) 11,852,753 10,948,166 9,748,648
OTHER INCOME (EXPENSES)
Revenue from rehabilitation works (Note 7) 7,728,506 4,162,174 5,146,214
Cost of rehabilitation works (7,728,506) (3,993,120) (5,020,772)
Interest expense and other financing charges (Note 17) (1,983,288) (2,163,476) (2,570,951)
Interest income (Note 4) 134,894 81,283 90,572
Foreign exchange losses - net (Note 2) (152,683) (112,619) (176,050)
Foreign currency differential adjustments (FCDA) (Note 2) 200,344 110,012 174,437
Others - net (Notes 9, 10 and 11) (434,096) (807,802) (862,826)
(2,234,829) (2,723,548) (3,219,376)
INCOME BEFORE INCOME TAX 9,617,924 8,224,618 6,529,272
PROVISION FOR (BENEFIT FROM) INCOME TAX (Notes 15 and 20)
Current 46,142 62,737 2,526
Deferred 21,155 (93,407) (409,468)
67,297 (30,670) (406,942)
NET INCOME P9,550,627 P8,255,288 P6,936,214
Basic Earnings Per Share (Note 18) P2,152.51 P1,850.78 P1,550.77
Diluted Earnings Per Share (Note 18) P2,151.55 P1,850.78 P1,550.77

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CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME

2015 2014 2013
NET INCOME P9,550,627 P8,255,288 P6,936,214
OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss) not to be reclassified to profit or loss in

subsequent period (Note 16):
Remeasurement gain (loss) on retirement plans (40,953) 18,917 164,745
Income tax effect – (5,675) (49,424)
Other comprehensive income to be reclassified to profit or loss in subsequent
period (Note 9) -
Reversal of impairment loss on available-for-sale financial assets 22,010 – –
(18,943) 13,242 115,321
TOTAL COMPREHENSIVE INCOME P9,531,684 P8,268,530 P7,051,535

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Capital Additional Treasury Other Other Equity Retained Earnings Total
Stock Paid-in Shares Comprehensive Adjustments (Note 13)

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(Notes 1 Capital (Note 13) Income (Loss) (Note 13)
and 13) (Note 13) (Notes 9 and 16)
Unappropriated Appropriated
OF CHANGES IN EQUITY FOR THE
At December 31, 2014 P4,546,982 P9,979,786 (P98,526) P46,162 (P309,220) P9,701,847 P4,000,000 P27,867,031
Total comprehensive income – – – (18,943) – 9,550,627 – 9,531,684
for the year
YEARS ENDED DECEMBER 31,
Treasury shares – – (6,128) – – – – (6,128)

(Note 13)
Cost of share-based payments – – – – 146,068 – – 146,068
(Note 13)
Appropriation for capital – – – – – (3,500,000) 3,500,000 –
expenditures (Note 13)
Dividends declared – – – – – (2,000,000) – (2,000,000)
(Note 13)
2015, 2014 AND 2013
Total comprehensive income – – – 13,242 – 8,255,288 – 8,268,530
for the year
Treasury shares – – (94,416) – – – – (94,416)
(Note 13)

(Note 13)
At December 31, 2012 P4,010,893 P101,815 (P9,730) (P82,401) (P308,695) P806,581 P12,200,000 P16,718,463
Total comprehensive income – – – 115,321 – 6,936,214 – 7,051,535
for the year
Cost of share-based payments – – – – (525) – – (525)
(Note 13)
Issuance of shares 536,089 9,863,911 – – – – – 10,400,000
(Note 13)
Issuance of treasury shares – 14,060 5,620 – – – – 19,680
Reversal of appropriation – – – – – 12,200,000 (12,200,000) –
(Note 13)
Appropriation for capital – – – – – (4,000,000) 4,000,000 –
expenditures (Note 13)
(Note 13)
OF CASH FLOWS

2015 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P9,617,924 P8,224,618 P6,529,272
Adjustments for:
Amortization of service concession assets (Note 7) 2,037,684 1,804,448 1,565,644
Interest expense and other financing charges (Note 17) 1,983,288 2,163,476 2,570,951
Depreciation and amortization (Note 8) 260,174 256,745 231,241
Cost of share-based payments (Note 13) 146,068 – (525)
Interest income (Note 4) (134,894) (81,283) (90,572)
Pension cost (income) (Note 16) 93,448 (155,111) 117,340
Dividend income (14,473) – –
Unrealized foreign exchange gains - net (6,863) (158) (78)
Gain on sale of property and equipment (232) (3,053) (1,081)
Impairment loss on available-for-sale financial assets (Note 9) – 100,207 –
Operating income before working capital changes 13,982,124 12,309,889 10,922,192
Decrease (increase) in:
Short-term investments (3,173,541) 712,000 (3,612,837)
Trade and other receivables (295,136) (247,488) 528,931
Other current assets (572,121) (281,749) (597,747)
Additions to service concession assets (Note 7) (7,732,006) (4,170,046) (5,153,750)
Increase (decrease) in trade and other payables 472,690 (1,696,858) (388,242)
Cash generated from operations 2,682,010 6,625,748 1,698,547
Interest received 118,805 76,938 84,390
Income taxes paid (46,467) (65,245) (2,526)
Net cash provided by operating activities (Carried Forward) 2,754,348 6,637,441 1,780,411

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2015 2014 2013
Net cash provided by operating activities (Carried Forward) 2,754,348 6,637,441 1,780,411
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment (Note 8) (286,317) (526,192) (399,841)
Cash paid on acquisition of a subsidiary (Note 11) (29,592) (65,972) (195,368)
Dividends received 14,473 – –
Increase in other noncurrent assets (13,815) (50,837) (63,119)
Proceeds from sale of property and equipment 2,272 11,054 1,548
Acquisition of available-for-sale financial assets – – (210,584)
Net cash used in investing activities (312,979) (631,947) (867,364)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of:
Dividends (Note 13) (1,999,991) (1,000,135) (13,494,130)
Interest-bearing loans (Note 10) (1,692,164) (1,721,331) (22,459,233)
Service concession obligation payable to MWSS (Note 12) (1,026,693) (1,184,393) (1,252,634)
Proceeds from the availment/drawdown of interest-bearing loans (Note 10) 2,539,775 567,487 26,240,838
Interest paid (1,426,075) (1,442,576) (1,442,571)
Increase (decrease) in:
Customers’ deposits 75,551 23,021 69,684
Other noncurrent liabilities (1,170) 170,982 10,953
Issuance (acquisition) of treasury shares (Note 13) (6,128) (94,416) 5,620
Proceeds from issuance of shares (Note 13) – – 10,366,495
Net cash used in financing activities (3,536,895) (4,681,361) (1,954,978)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,095,526) 1,324,133 (1,041,931)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 4,188,538 2,864,405 3,906,336
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4) P3,093,012 P4,188,538 P2,864,405

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NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Amounts in Thousands, Except Number of Shares, Earnings Per Share Value and Unless Otherwise Specified)
1. Corporate Information and Status of Operations
General
Maynilad Water Services, Inc. (Maynilad or Parent Company) was incorporated on January 22, 1997 in
the Philippines primarily to bid for the operation of the privatized system of waterworks and sewerage
services of the Metropolitan Waterworks and Sewerage System (MWSS) for Metropolitan Manila.
On October 26, 2011, the Securities and Exchange Commission (SEC) approved the amendment of the
Articles of Incorporation to amend its primary purpose to include the provision of allied and ancillary
services and undertaking such other activities incidental to its secondary purposes.
Effective Interest in Maynilad

MWHCI and Maynilad Subscription Agreements. Pursuant to the Subscription Agreements executed
between Maynilad and Maynilad Water Holding Company, Inc. (MWHCI), a company incorporated in the
Philippines and a 51.27% owned subsidiary of Metro Pacific Investments Corporation (MPIC), MWHCI
subscribed to 134,022 common shares of Maynilad at par value on December 28, 2012. Such shares,
however, were issued only on February 13, 2013 and together with the additional subscription to 402,067
common shares increased MWHCI ownership interest in Maynilad to 92.85% as at December 31, 2013.
MCNK JV Corporation and MWHCI Subscription Agreements. On December 28, 2012, a Subscription
Agreement between MCNK JV Corporation (MCNK, a subsidiary of a Japan-listed entity Marubeni
Corp.) and MWHCI was executed, wherein MCNK subscribed to 169,617,682 common shares of MWHCI.
On February 13, 2013, MCNK and MWHCI entered into another Subscription Agreement for the
subscription by MCNK to an additional 508,853,045 common shares resulting in 21.54% interest in
MWHCI. On the same date, MPIC purchased 154,992,852 common shares of stock of MWHCI from DMCI
Holdings, Inc. (DMCI, a listed Philippine entity) resulting in 51.27% and 27.19% ownership interest as at
December 31, 2013 by MPIC and DMCI, respectively.
As at December 31, 2015 and 2014, Maynilad is a 92.85% owned subsidiary of MWHCI. In addition, MPIC
directly owns 5.19% of Maynilad thereby having effective ownership interest of 52.80%.
MPIC is 52.1% and 55.8% owned by Metro Pacific Holdings, Inc. (MPHI) as at
December 31, 2015 and 2014, respectively. MPHI is a Philippine corporation whose stockholders are
Enterprise Investment Holdings, Inc. (EIH) (60.0%), Intalink B.V. (26.7%) and First Pacific International
Limited (FPIL) (13.3%). First Pacific Company Limited (FPC), a company incorporated in Bermuda and
listed in Hong Kong, through its subsidiaries, Intalink B.V. and FPIL, holds 40.0% equity interest in EIH and
an investment financing which under Hong Kong Generally Accepted Accounting Principles require FPC to
account for the results and assets and liabilities of EIH and its subsidiaries as part of FPC group companies
in Hong Kong.
The registered office address of the Parent Company is MWSS Compound, Katipunan Road, Balara,
Quezon City.

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The accompanying consolidated financial statements were approved by the Audit Committee on
February 17, 2016 as authorized by the Board of Directors (BOD) in accordance with its resolution on
January 25, 2016.
Concession Agreement
On February 21, 1997, the Parent Company entered into a Concession Agreement with the MWSS, a
government-owned and controlled corporation organized and existing pursuant to Republic Act (RA)
No. 6234 (the Charter), as clarified and amended, with respect to the MWSS West Service Area. The
Concession Agreement sets forth the rights and obligations of the Parent Company throughout the
concession period. The MWSS Regulatory Office (RO) acts as the regulatory body of the Concessionaires
[the Parent Company and the East Concessionaire - Manila Water Company, Inc. (Manila Water)].
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 the Charter), the sole right
to manage, operate, repair, decommission and refurbish all fixed and movable assets required (except
certain retained assets of MWSS) to provide water and sewerage services in the West Service Area for an
extended period of 40 years commencing on August 1, 1997 (the Commencement Date) to May 6, 2037
or the early termination date as the case may be. The 15-year extension of the expiry of the Concession
Agreement was approved by the MWSS in 2009 (see Notes 7, 12 and 22).
The Parent Company is also tasked to manage, operate, repair, decommission and refurbish certain specified
MWSS facilities in the West Service Area. The legal title to these assets remains with MWSS. The legal title
to all property, plant and equipment contributed to the existing MWSS system by the Parent Company
during the concession period remains with the Parent Company until the Expiration Date (or on early
termination date) at which time, all rights, titles and interest in such assets will automatically vest in MWSS.
Fourth Rate Rebasing

MWSS released Board of Trustees Resolution No. 2013-100-RO dated September 12, 2013 and RO
Resolution No. 13-010-CA dated September 10, 2013 on the rate rebasing adjustment for the rate
rebasing period 2013 to 2017 reducing Maynilad’s 2012 average all-in basic water charge by 4.82% or
P1.46 per cubic meter (cu.m.) or P0.29 per cu.m. over the next five years. Maynilad has formally notified
its objection and initiated arbitration proceedings. On October 4, 2013, Maynilad filed its Dispute Notice
before the Appeals Panel.
On December 17, 2013, the Regulatory Office released Resolution No. 13-011-CA regarding the
implementation of a status quo for Maynilad’s Standard Rates and FCDA for any and all its scheduled
adjustments until such time that the Appeals Panel has issued the Final Award.
On January 5, 2015, Maynilad officially received the Appeals Panel’s award dated December 29, 2014
(the “Arbitral Award”) upholding Maynilad’s alternative Rebasing Adjustment for the Fourth Rate Rebasing
Period of 13.41% or its equivalent of P4.06 per cu.m. This increase has effectively been reduced to
P3.06 per cu.m., following the integration of the P1.00 Currency Exchange Rate Adjustment (CERA) into
the basic water charge. To mitigate the impact of the tariff increase on its customers, Maynilad offered to
stagger its implementation over a three-year period.
The Arbitral Award, being final and binding on the parties, Maynilad asked the MWSS to cause its Board of
Trustees to approve the 2015 Tariffs Table so that the same can be published and implemented 15 days
after its publication.
However, the MWSS and the RO have chosen, over Maynilad’s repeated objections, to defer the
implementation of the Arbitral Award despite it being final and binding on the parties. In its letter dated
February 9, 2015, the MWSS and RO, who received their copy of the Arbitral Award on January 7, 2015,
informed Maynilad that they have decided to await the final outcome of their arbitration with the other
concessionaire, Manila Water, before making any official pronouncements on the applicable resulting
water rates for the two concessionaires.
On February 20, 2015, Maynilad wrote the Philippine Government, through the Department of Finance
(DOF), to call on the undertaking which the Republic of the Philippines (the “Republic”) issued in favor
of Maynilad on July 31, 1997 and March 17, 2010 (the “Undertaking”). The Undertaking provides, among

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86
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

other things, that the Republic shall indemnify Maynilad in respect of any loss that is occasioned by a
delay caused by the Republic or any government-owned agency in implementing any increase in the
Standard Rates beyond the date for its implementation in accordance with the Concession Agreement.
On March 9, 2015, Maynilad again wrote the Republic, through the DOF, to reiterate its demand against
the Undertaking. The letters dated February 20 and March 9, 2015 are collectively referred to as the
“Demand Letters”. Maynilad demanded that it be paid, immediately and without further delay, the
P3.4 billion in revenue losses that it had sustained as a direct result of the MWSS’ and the RO’s refusal to
implement its correct Rebasing Adjustment from January 1, 2013 (the commencement of the Fourth Rate
Rebasing Period) to February 28, 2015.
On March 27, 2015, Maynilad served a Notice of Arbitration and Statement of Claim upon the Republic,
through the DOF. Maynilad gave notice and demanded that the Republic’s failure or refusal to pay the
amounts required under the Demand Letters be, pursuant to the terms of the Undertaking, referred to
arbitration before a three-member panel appointed and conduct proceedings in Singapore in accordance
with the 1976 United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.
On April 21, 2015, the MWSS Board of Trustees in its Resolution No. 2015-004-CA dated March 25, 2015
approved to partially implement the Arbitral Award of a tariff adjustment of P0.64 per cu.m. which, net of
the P1.00 CERA, actually translates to a tariff adjustment of negative P0.36 per cu.m. as opposed to the
Arbitral Award of P3.06 per cu.m. tariff adjustment, net of CERA. For being contrary to the Final Award as
well as the provisions of the Concession Agreement, Maynilad did not implement this tariff adjustment.
On May 14, 2015, the MWSS Board of Trustees in its Resolution No. 2015-060-RO approved a 7.52%
increase in the prevailing average basic charge of P31.25 per cu.m. or an upward adjustment of
P2.35 per cu.m. as partial implementation of the Arbitral Award. With the discontinuance of CERA, the
net adjustment in average water charge is 4.32% or P1.35 per cu.m.
In the fourth quarter of 2015, the Arbitration Tribunal was constituted. On February 17, 2016, Maynilad
again wrote the Republic, through the DOF, to reiterate its demand against the Undertaking and to
update its claim in the amount of P5.6 billion. As of that date, the arbitration hearings have not yet
started.
2. Summary of Significant Accounting and Financial Reporting Policies
Basis of Preparation
The consolidated financial statements have been prepared on a historical cost basis.
The consolidated financial statements are presented in Philippine peso, which is the Parent Company’s
functional and presentation currency, and all amounts are rounded to the nearest thousand (P000),
except when otherwise indicated.
Statement of Compliance
The accompanying consolidated financial statements have been prepared in accordance with
Philippine Financial Reporting Standards (PFRS). PFRS include statements named PFRS and Philippine
Accounting Standards (PAS), including Philippine Interpretations from International Financial Reporting
Interpretations Committee (IFRIC) issued by the Financial Reporting Standards Council (FRSC).

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Basis of Consolidation
The accompanying consolidated financial statements comprise the financial statements of the Parent
Company and all of its subsidiaries (collectively referred to as the “Company”). Control is achieved when
the Company 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 Company controls
an investee, if and only if, the Company has:
• power over the investee (i.e., existing rights that give it the current ability to direct the relevant
activities of the investee);
• exposure, or rights, to variable returns from its involvement with the investee; and
• the ability to use its power over the investee to affect its returns.
The Company re-assesses 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. Consolidation of a subsidiary begins
when the Company obtains control over the subsidiary and ceases when the Company 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 statement of comprehensive income from the date the Company gains
control until the date the Company ceases to control the subsidiary.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity
transaction. If the Company loses control over a subsidiary, it derecognizes the related assets (including
goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or
loss is recognized in profit or loss. Any investment retained is recognized at fair value.
The consolidated financial statements comprise of the financial statements of Maynilad and the following
subsidiaries that it controls:
Subsidiaries Nature of Business
Philippine Hydro, Inc. (Phil Hydro)* Bulk water supply and water distribution (outside the West
Service Area)
Amayi Water Solutions Inc. (Amayi)** Water distribution (outside the West Service Area)
*Acquired on August 3, 2012

**Incorporated on July 18, 2012
All subsidiaries are wholly-owned and incorporated in the Philippines.
Phil Hydro. On August 3, 2012, the Parent Company, through a Share Purchase Agreement with a third
party, acquired 100% ownership interest in Phil Hydro for a discounted consideration of P526.9 million
payable in tranches upon fulfillment and completion of certain conditions precedent (see Note 11).
Goodwill arising from the acquisition amounted to P288.1 million.
Phil Hydro is engaged in waterworks construction, engineering and engineering consulting services.
Phil Hydro is currently undertaking water supply projects outside Metro Manila in line with the thrusts
of the government under Presidential Decree No. 198, also known as the Provincial Water Utilities Act of
1973, which mandates the local government units to create and operate local water utilities and provide
potable water to the public.
Phil Hydro has existing 25-year Bulk Water Supply Agreements with various provincial municipalities
outside the West Service Area and a Memorandum of Agreement with certain provincial municipality for
the construction and operation of water treatment facilities for water distribution services.
Amayi. Amayi is incorporated for the purpose of operating, managing, maintaining and rehabilitating
waterworks, sewerage and sanitation system and services outside the Concession Area.
The financial statements of the subsidiaries are prepared for the same reporting year as the Parent Company
using consistent accounting policies. All significant intercompany balances, transactions, income and expense
and profits and losses from intercompany transactions are eliminated in full in the consolidation.

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88

Changes in Accounting Policies and Disclosures

The accounting policies adopted in the preparation of the consolidated financial statements are consistent
with those of the previous financial year, except for the adoption of the following amended PAS and PFRS
which were adopted effective beginning January 1, 2015. Except as otherwise indicated, adoption of the
new standards and amendments has no impact on the Company’s consolidated financial statements.
• PAS 19, Employee Benefits – Defined Benefit Plans: Employee Contributions (Amendments)
The improvements below are effective from January 1, 2015 and unless otherwise stated, these
amendments have no significant impact on the Company’s consolidated financial statements:
Annual Improvements to PFRS (2010-2012 cycle)
• PFRS 2, Share-based Payment – Definition of Vesting Condition

This improvement is applied prospectively and clarifies various issues relating to the definitions of
performance and service conditions which are vesting conditions, including:
• A performance condition must contain a service condition

• A performance target must be met while the counterparty is rendering service
• A performance target may relate to the operations or activities of an entity, or to those of
another entity in the same group
• A performance condition may be a market or non-market condition
• If the counterparty, regardless of the reason, ceases to provide service during the vesting period,
the service condition is not satisfied.
The Company shall consider this amendment for future share-based payment transactions.
• PFRS 3, Business Combinations – Accounting for Contingent Consideration in a Business Combination
The amendment is applied prospectively for business combinations for which the acquisition date is
on or after January 1, 2015. It clarifies that a contingent consideration that is not classified as equity
is subsequently measured at fair value through profit or loss whether or not it falls within the scope
of PAS 39, Financial Instruments: Recognition and Measurement (or PFRS 9, Financial Instruments, if
early adopted). The Company shall consider this amendment for future business combinations.
• PFRS 8, Operating Segments – Aggregation of Operating Segments and Reconciliation of the Total of
the Reportable Segments’ Assets to the Entity’s Assets
• PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets – Revaluation Method –
Proportionate Restatement of Accumulated Depreciation and Amortization

• PAS 24, Related Party Disclosures – Key Management Personnel

• PFRS 3, Business Combinations – Scope Exceptions for Joint Arrangements

• PFRS 13, Fair Value Measurement – Portfolio Exception
• PAS 40, Investment Property

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Standards, Amendments and Interpretations Issued But Not Yet Effective
The Company did not early adopt the following amendments to existing standards and interpretations
that have been approved but are not yet effective as at December 31, 2015. Except as otherwise
indicated, the Company does not expect the adoption of these amendments and interpretations to have
a significant impact on its consolidated financial statements.
• Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate
Effective 2016
• PFRS 10, Consolidated Financial Statements and PAS 28, Investments in Associates and Joint Ventures –
Investment Entities: Applying the Consolidation Exception (Amendments)
• PFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests (Amendments)
• PFRS 14, Regulatory Deferral Accounts
• PAS 1, Presentation of Financial Statements – Disclosure Initiative (Amendments)
The amendments are intended to assist entities in applying judgment when meeting the presentation
and disclosure requirements in PFRS. They clarify the following:
• That entities shall not reduce the understandability of their financial statements by either
obscuring material information with immaterial information; or aggregating material items
that have different natures or functions
• That specific line items in the statement of income and other comprehensive income and the
statement of financial position may be disaggregated
• That entities have flexibility as to the order in which they present the notes to financial
statements
• That the share of other comprehensive income of associates and joint ventures accounted for
using the equity method must be presented in aggregate as a single line item, and classified
between those items that will or will not be subsequently reclassified to profit or loss.
The Company is currently assessing the impact of these amendments on its consolidated financial
statements.
• PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets – Clarification of Acceptable
Methods of Depreciation and Amortization (Amendments)
• PAS 16, Property, Plant and Equipment, and PAS 41, Agriculture – Bearer Plants (Amendments)
• PAS 27, Separate Financial Statements – Equity Method in Separate Financial Statements
(Amendments)
• PFRS 5, Non-current Assets Held for Sale and Discontinued Operations – Changes in Methods of Disposal
• PFRS 7, Financial Instruments: Disclosures – Servicing Contracts
• PFRS 7 – Applicability of the Amendments to PFRS 7 to Condensed Interim Financial Statements
• PAS 19, Employee Benefits – Regional Market Issue Regarding Discount Rate
• PAS 34, Interim Financial Reporting – Disclosure of Information ‘Elsewhere in the Interim Financial Report’
Effective 2018
• PFRS 9, Financial Instruments

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The following new standards issued by the IASB have not yet been adopted by the FRSC:
• IFRS 15, Revenue from Contracts with Customers
IFRS 15 was issued in May 2014 by the IASB and establishes a new five-step model that will apply to
revenue arising from contracts with customers. Under IFRS 15 revenue is recognized at an amount
that reflects the consideration to which an entity expects to be entitled in exchange for transferring
goods or services to a customer. The principles in IFRS 15 provide a more structured approach to
measuring and recognizing revenue.
The new revenue standard is applicable to all entities and will supersede all current revenue recognition
requirements under IFRS. Either a full or modified retrospective application is required for annual
periods beginning on or after January 1, 2018. Early adoption is permitted. The Company is currently
assessing the impact of IFRS 15 and plans to adopt the new standard on the required effective date
once adopted locally.

• IFRS 16, Leases
On January 13, 2016, the IASB issued its new standard, IFRS 16, which replaces International
Accounting Standards (IAS) 17, the current leases standard, and the related Interpretations.

Under the new standard, lessees will no longer classify their leases as either operating or finance
leases in accordance with IAS 17. Rather, lessees will apply the single-asset model. Under this model,
lessees will recognize the assets and related liabilities for most leases on their balance sheets, and
subsequently, will depreciate the lease assets and recognize interest on the lease liabilities in their
profit or loss. Leases with a term of 12 months or less or for which the underlying asset is of low
value are exempted from these requirements.
The accounting by lessors is substantially unchanged as the new standard carries forward the
principles of lessor accounting under IAS 17. Lessors, however, will be required to disclose more
information in their financial statements, particularly on the risk exposure to residual value.
The new standard is effective for annual periods beginning on or after January 1, 2019. Entities may
early adopt IFRS 16 but only if they have also adopted IFRS 15. When adopting IFRS 16, an entity is
permitted to use either a full retrospective or a modified retrospective approach, with options to
use certain transition reliefs. The Company is currently assessing the impact of IFRS 16 and plans to
adopt the new standard on the required effective date once adopted locally.
The Company continues to assess the impact of the above new, amended and improved accounting
standards and interpretations effective subsequent to December 31, 2015 on the consolidated financial
statements in the period of initial application. Additional disclosures required by these amendments will
be included in the consolidated financial statements when these amendments are adopted.
Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method of accounting. 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 non-controlling interest in the acquiree. For each business combination,
the acquirer measures the non-controlling interest in the acquiree either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and
included in costs and expenses.

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When the Company 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.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed
to be an asset or liability, will be recognized in accordance with PAS 39 either in profit or loss or as a
change to other comprehensive income. If the contingent consideration is classified as equity, it is not
remeasured until it is finally settled within equity.
Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred
and the amount recognized for non-controlling interest over the net identifiable assets acquired and
liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognized in the consolidated statement of income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Company’s cash-generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash-generating unit 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 this circumstance is measured based on the relative values of the operation
disposed of and the portion of the cash-generating unit retained.
Fair Value Measurement

The Company measures financial instruments at fair value at each reporting date.
Fair value is the price that would be received to sell 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:
• in the principal market for the asset or liability; or

• 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 Company.
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 Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing
the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the 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 measurement as a whole:
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable

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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 financial statements on a recurring basis,
the Company determines whether transfers have occurred between levels in the hierarchy by
re-assessing 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 Company’s management determines the policies and procedures for both recurring and nonrecurring
fair value measurements.
For the purpose of fair value disclosures, the Company 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.
Fair value measurement disclosures are presented in Note 25.
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
acquisition date and that are subject to an insignificant risk of change in value.
Short-term Investments
Short-term investments are investments with maturities of more than three months to one year.
Financial Assets and Financial Liabilities
Date of Recognition. The Company recognizes a financial asset or a financial liability in the consolidated
statement of financial position when it becomes a party to the contractual provisions of the instrument.
In the case of a regular way purchase or sale of financial assets, recognition and derecognition, as
applicable, are done using trade date accounting.
Initial Recognition. Financial assets and financial liabilities are recognized initially at fair value.
Transaction costs are included in the initial measurement of all financial assets and liabilities, except for
financial instruments measured at fair value through profit or loss (FVPL).
Categories of Financial Assets. Financial assets are classified into the following categories: financial assets
at FVPL, loans and receivables, held-to-maturity (HTM) investments, and available-for-sale (AFS) financial
assets. Financial liabilities are classified as financial liabilities at FVPL or other financial liabilities. The
Company determines the classification at initial recognition and, where allowed and appropriate,
re-evaluates this designation at each reporting date.
‘Day 1’ difference. Where the transaction price in a non-active market is different from the fair value of
other observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Company recognizes the difference
between the transaction price and fair value (a ‘Day 1’ difference) in the consolidated statement of
income unless it qualifies for recognition as some other type of asset.

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In cases where use is made of data which is not observable, the difference between the transaction price
and model value is only recognized in the consolidated statement of income when the inputs become
observable or when the instrument is derecognized. For each transaction, the Company determines the
appropriate method of recognizing the ‘Day 1’ difference amount.
Loans and Receivables. Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are not entered into with the intention of immediate
or short-term resale and are not classified or designated as AFS financial assets or financial assets at FVPL.
After initial recognition, loans and receivables are carried at amortized cost in the consolidated statement
of financial position using the effective interest method, less allowance for impairment. Amortization is
calculated by taking into account any discount or premium on acquisition and fees that are an integral part
of the effective interest rate. Gains and losses are recognized in the consolidated statement of income when
loans and receivables are derecognized and impaired, as well as through the amortization process.
Loans and receivables are included in current assets if maturity is within twelve months from the
reporting date. Otherwise, these are classified as noncurrent assets.
This category includes the Company’s cash and cash equivalents, short-term investments, trade and
other receivables, sinking fund, deposits and miscellaneous deposits shown as part of “Other noncurrent
assets” account in the consolidated statements of financial position (see Notes 4, 5 and 6).
AFS Financial Assets. Available-for-sale financial assets are non-derivative financial assets that are designated
as available-for-sale or are not classified in any of the three preceding categories. These are purchased and
held indefinitely, and may be sold in response to liquidity requirements or changes in market conditions.
After initial recognition, available-for-sale financial assets are measured at fair value with unrealized gains or
losses being recognized in the consolidated statement of comprehensive income and presented as a separate
component of equity until the investment is derecognized or until the investment is determined to be
impaired at which time the cumulative gain or loss previously reported in equity is included in the consolidated
statement of income. Investments in equity instruments that do not have a quoted market price in an active
market and whose fair values cannot be reliably measured are carried at cost, net of impairment, if any. Assets
under this category are classified as current assets if the Company intends to hold the assets within 12 months
from financial reporting date and as noncurrent assets if it is more than a year from financial reporting date.
Other Financial Liabilities at Amortized Cost. Financial liabilities are classified in this category if these
are not held for trading or not designated as at FVPL upon the inception of the liability. These include
liabilities arising from operations or borrowings.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized
cost using the effective interest method.
Gains or losses are recognized in the consolidated statement of income when the liabilities are
derecognized as well as through the amortization process.
Debt issuance costs are amortized using the effective interest method. The unamortized debt issuance
costs are netted against the related carrying value of the debt instrument.
This category includes trade and other payables, interest-bearing loans, service concession obligation
payable to MWSS and customers’ deposits (see Notes 10, 11 and 12).
Classification of Financial Instruments Between Debt and Equity

A financial instrument is classified as a liability if it provides for a contractual obligation to:
• Deliver cash or another financial asset to another entity; or

• Exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Company; or
• Satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of own equity shares.

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If the Company does not have an unconditional right to avoid delivering cash or another financial asset to
settle its contractual obligation, the obligation meets the definition of a financial liability. The components
of issued financial instruments that contain both liability and equity elements are accounted for separately,
with the equity component being assigned the residual amount after deducting from the instrument as a
whole the amount separately determined as the fair value of the liability component on the date of issue.
Impairment of Financial Assets

The Company assesses at each reporting date whether a financial asset or group of financial assets is
impaired. A financial asset or group of financial assets is deemed to be impaired if, and only if, there
is objective evidence of impairment as a result of one or more events that has occurred after the
initial recognition of the asset (an incurred ‘loss’ event) and that loss event (or events) has an impact
on the estimated future cash flows of the financial assets that can be reliably measured. Evidence of
impairment may include indications that the debtors or a group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they
will enter bankruptcy or other financial reorganization and when observable date indicate that there
is a measureable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
Assets Carried at Amortized Cost. If there is objective evidence that an impairment loss on loans and
receivables carried at amortized cost has been incurred, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying
amount of the asset shall be reduced either directly or through use of an allowance account. The amount
of the loss shall be recognized in the consolidated statement of income.
The Company first assesses whether objective evidence of impairment exists individually for financial
assets that are individually significant, and individually or collectively for financial assets that are
not individually significant. If it is determined that no objective evidence of impairment exists for
an individually assessed financial asset, whether significant or not, the asset is included in a group of
financial assets with similar credit risk characteristics and that group of financial assets is collectively
assessed for impairment. Assets that are individually assessed for impairment and for which an
impairment loss is or continues to be recognized are not included in a collective assessment of
impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the
consolidated statement of income, to the extent that the carrying value of the asset does not exceed its
amortized cost at the reversal date.
Assets Carried at Cost. If there is objective evidence that an impairment loss on an unquoted equity
instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a
derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument
has been incurred, the amount of the loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the current market rate of
return for a similar financial asset.

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AFS Financial Assets. The Company assesses at each reporting date whether there is objective evidence
that an investment or a group of investments is impaired. The evidence of impairment for equity
securities classified as AFS financial assets would include a significant or prolonged decline in fair value
of investments below its cost. Where there is evidence of impairment, the cumulative loss – measured
as the difference between the acquisition cost and the current fair value, less any impairment loss
on that financial asset previously recognized in the other comprehensive income – is removed from
other comprehensive income and recognized in profit or loss in the consolidated statement of income.
Impairment losses on equity investments are not reversed through the profit or loss in the consolidated
statement of income. Increases in fair value after impairment are recognized directly in other
comprehensive income in the consolidated statement of comprehensive income.
Derecognition of Financial Assets and Financial Liabilities
Financial Assets. A financial asset (or, where applicable, a part of a financial asset or part of a group of
similar financial assets) is derecognized when:
• the Company’s right to receive cash flows from the asset has expired; or
• the Company retains the right to receive cash flows from the asset, but has assumed an obligation to
pay them in full without material delay to a third party under a “pass-through” arrangement; or
• the Company has transferred its right to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the assets, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset and has neither
transferred nor retained substantially all the risks and rewards of the asset nor transferred control of
the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at
the lower of original carrying amount of the asset and the maximum amount of consideration that the
Company could be required to repay.
Financial Liabilities. A financial liability is derecognized when the obligation under the liability is
discharged, cancelled or has expired.
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 consolidated statement of income.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
statement of financial position if, and only if, there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle
the liability simultaneously. The Company 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 Company and all of the counterparties.
Materials and Supplies

Materials and supplies (shown as part of “Others” under “Other current assets” account) are valued at the
lower of cost and net realizable value. Cost is determined using the weighted average method.
Net realizable value is the current replacement cost.
Service Concession Assets
Parent Company. The Parent Company accounts for its concession arrangement with MWSS in accordance
with IFRIC 12, Service Concession Arrangement under the Intangible Asset model as it receives the right
(license) to charge users of public service. Under the Concession Agreement, the Parent Company 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 remain with MWSS at the end of the concession period.

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Phil Hydro. Phil Hydro accounts for its Bulk Water Supply Agreements in accordance with
IFRIC 12 under the Intangible Asset model as it receives the right (license) to charge users of public service.
Service concession assets are recognized to the extent that the Company receives a license or right to
charge the users of the public service. The service concession assets pertain to the fair value of the
service concession obligations at drawdown date and construction costs related to the rehabilitation
works performed by the Company. The Parent Company’s service concession assets is amortized using
unit-of-production (UOP) method over the projected total billable volume during the remaining term of
the service concession arrangement. Phil Hydro amortizes its service concession assets using straight-line
method over the terms of the Bulk Water Supply Agreements.
The Company recognizes and measures revenue from rehabilitation works using the percentage-of-
completion method. Under this method, revenue is recognized as the related obligations are fulfilled,
measured principally on the basis of the estimated physical completion of the contract work.
Cost of rehabilitation works, which includes all direct materials, labor costs, and those indirect costs related to
contract performance, is recognized consistent with the revenue recognition method applied. Expected losses
on contracts are recognized immediately when it is probable that the total contract costs will exceed total
contract revenue. Changes in contract performance, contract conditions and estimated profitability including
those arising from contract penalty provisions and final contract settlements which may result in revisions to
estimated costs and gross margins are recognized in the year in which the revisions are determined.
Subsequent costs and expenditures related to the concession agreement are recognized as additions to
service concession assets at fair value of obligations at drawdown date and cost of rehabilitation works.
Property and Equipment

Property and equipment, except land, are stated at cost less accumulated depreciation and any
impairment in value (see policy on “Impairment of Nonfinancial Assets”). Land is stated at cost.
The initial cost of property and equipment comprises its purchase price, including import duties, taxes
and any directly attributable costs in bringing the asset to its working condition and location for its
intended use. Expenditures incurred after the property and equipment have been put into operation,
such as repairs and maintenance, are normally charged to income in the period such 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 and equipment
beyond its originally assessed standard of performance, the expenditures are capitalized as additional
costs of property and equipment.
Depreciation is calculated for each significant item or part of an item of property and equipment on a
straight-line basis over the following estimated useful lives:
Land improvements 5 to 25 years
Instrumentation, tools and other equipment 5 years
Office furniture, fixtures and equipment 5 years
Transportation equipment 5 years
The Company computes for depreciation charges based on the significant component of the asset.
The useful lives and depreciation method are reviewed periodically to ensure that the periods and
method of depreciation are consistent with the expected pattern of economic benefits from items of
property and equipment.

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Fully depreciated property and equipment are retained in the accounts until they are no longer in use and
no further depreciation is charged to current operations.
An item of property and equipment is derecognized upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the
items) is included in the consolidated statement of income in the year the item is derecognized.
Impairment of Nonfinancial Assets (Property and Equipment and Service Concession Assets
An assessment is made at each reporting date to determine whether there is any indication of
impairment of any nonfinancial assets, or whether there is any indication that an impairment loss
previously recognized for an asset in prior years may no longer exist or may have decreased. If any
such indication exists, the asset’s recoverable amount is estimated. An asset’s recoverable amount is
calculated as the higher of the asset’s value in use or its fair value less cost to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs to sell, recent market transactions are taken into account, if available.
If no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available
fair value indicators.
An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount.
An impairment loss is charged to operations in the year in which it arises.
A previously recognized impairment loss is reversed only if there has been a change in the estimates used
to determine the recoverable amount of an asset, however, not to an amount higher than the carrying
amount that would have been determined (net of any depreciation and amortization) had no impairment
loss been recognized for the asset in prior years. A reversal of an impairment loss is credited to current
operations.
Goodwill
Goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred
and the amount recognized for controlling interest over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired,
the difference is recognized in the consolidated statement of income. After initial recognition, goodwill is
measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Company’s cash-generating units that are expected to benefit
from synergies of the combination irrespective of whether other assets or liabilities of the acquiree are
assigned to those units. Each unit or group of units to which the goodwill is so allocated:
• represents the lowest level within the Company at which the goodwill is monitored for internal
management purposes; and
• not larger than an operating segment determined in accordance with PFRS 8, Operating Segments.
Where goodwill forms part of a cash-generating unit 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 this
circumstance is measured based on the relative values of the operation disposed of and the portion of the
cash-generating unit retained.
Goodwill is reviewed for impairment, annually or more frequently, if events or changes in circumstances
indicate that the carrying value may be impaired.
Impairment is determined by assessing the recoverable amount of the cash-generating unit,

to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than
the carrying amount, an impairment loss is recognized. Where goodwill forms part of a cash-generating

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unit and part of the operation within that unit is disposed, 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 this circumstance is measured based on the relative
values of the operation disposed and the portion of the cash-generating unit retained. Impairment loss
with respect to goodwill is not reversed.
Negative goodwill which is the excess of the fair values of acquired identifiable assets and liabilities of
subsidiaries over the acquisition cost of that interest, is credited directly to income. Transfers of assets
between commonly controlled entities are accounted for under historical cost accounting.
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.
When subsidiaries are sold, the difference between the selling price and the net assets plus cumulative
translation adjustments and goodwill is recognized in the consolidated statement of income.
Foreign Currency-Denominated Transactions

Foreign exchange differentials arising from foreign currency transactions are credited or charged to
operations. As approved by the MWSS Board of Trustees under Amendment No. 1 of the Concession
Agreement, the following will be recovered through billings to customers:
• Restatement of foreign currency-denominated loans;

• Excess of actual Concession Fee payments over the amounts of Concession Fees translated using the
base exchange rate assumed in the business plan approved every rate rebasing exercise;
• Excess of actual interest payments translated at exchange spot rates on settlement dates over the
amounts of interest translated at drawdown date rates; and
• 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 drawdown date rates.
In view of the automatic reimbursement mechanism, the Parent Company recognized a deferred FCDA
(included as part of “Other noncurrent assets” or “Deferred credits” accounts in the consolidated
statements of financial position) with a corresponding credit (debit) to FCDA revenues for the unrealized
foreign exchange losses (foreign exchange gains) which have not been billed or which will be refunded
to the customers. The write-off of the deferred FCDA or reversal of deferred credits pertaining to
concession fees will be made upon determination of the new base foreign exchange rate, which is
assumed in the business plan approved by the RO during the latest Rate Rebasing exercise, unless
indication of impairment of the deferred FCDA would be evident at an earlier date.
Deferred FCDA and deferred credits are calculated as the difference between the drawdown or rebased
rate versus the closing rate. These were presented as part of “Other noncurrent assets” and “Deferred
credits” accounts in the consolidated statements of financial position, respectively.
As at December 31, 2015 and 2014, deferred FCDA (credits) amounted to P279.1 million and
(P620.9 million), respectively.

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Customers’ Deposits
Customers’ deposits are initially measured at fair value. After initial recognition, these deposits
are subsequently measured at amortized cost using the effective interest method. Amortization of
customers’ deposits is included under “Interest expense and other financing charges” account in the
consolidated statement of income. The discount is recognized as deferred credits and amortized over
the remaining concession period using the effective interest method. Amortization of deferred credits is
included as part of “Other income” account in the consolidated statement of income.
As at December 31, 2015 and 2014, the discount, shown as part of “Deferred credits” account in the
consolidated statements of financial position, amounted to P583.6 million and P532.6 million, respectively.
Assets Held in Trust

Assets which are owned by MWSS but are used in the operations of the Parent Company under the
Concession Agreement are not reflected in the consolidated statement of financial position but carried as
Assets Held in Trust, except for certain assets transferred to the Parent Company as mentioned in Note 23.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured. Revenue is measured at the fair value of
consideration received, excluding discounts, rebates and value-added tax (VAT). Water and sewerage
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.
Revenue from water and sewerage services is recognized upon supply of water to the customers and
when the related services are rendered. Billings to customers consist of the following:
a. Water charges
• Basic charges represent the basic tariff charged to consumers for the provision of water
services.
• FCDA is the tariff mechanism that allows the Parent Company to recover foreign exchange
losses or to compensate foreign exchange gains on a current basis beginning January 1, 2002
until the Expiration Date.
• Maintenance service charge represents a fixed monthly charge per connection. The charge
varies depending on the meter size.
b. Environmental charge (included as part of revenue from sewer/sanitation services) represents 20% of
the water charges, except for maintenance charge.
c. Sewerage charge represents 20% of the water charges, excluding maintenance service charge, for
all consumers connected to the Company’s sewer lines. Effective January 1, 2012, pursuant to RO
Resolution No. 11-007-CA, sewerage charge applies only to commercial and industrial customers
connected to sewer lines.
Interest income is recognized as the interest accrues using the effective interest method.
When the Company provides construction or upgrade services, the consideration received or receivable
is recognized at its fair value. The Company accounts for revenue and costs relating to operation services
based on the percentage of completion (shown as “Revenue from rehabilitation works” and “Cost of
rehabilitation works” accounts in the consolidated statement of income).
Cost and Expense Recognition

Expenses are decreases in economic benefits during the accounting period in the form of outflows or
decrease of assets or incurrence of liabilities that result in decrease in equity, other than those relating
to distributions to equity participants. Expenses are recognized in the consolidated statement of income
as these are incurred.

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Leases
The determination of whether an arrangement is, or contains a lease, is based on the substance of the
arrangement at inception date, whether the fulfillment of the arrangement is dependent on the use of a
specific asset or assets or the arrangement conveys a right to use the asset.
A reassessment is made after the inception of the lease only if one of the following applies:
(a) There is a change in contractual terms, other than a renewal of or extension of the arrangement;
(b) A renewal option is exercised or extension granted, unless the term of the renewal or extension was
initially included in the lease term;
(c) There is a change in the determination of whether fulfillment is dependent on a specified asset; or
(d) There is a substantial change to the asset.
Where reassessment is made, lease accounting shall commence or cease from the date when the change
in circumstances gave rise to the reassessment scenarios (a), (c) or (d) and at the date of renewal or
extension period for scenario (b).
A lease where the lessor retains substantially all the risks and benefits of ownership of the asset is
classified as an operating lease.
Operating lease payments are recognized as expense in the consolidated statement of income on a
straight-line basis over the lease term.
Borrowing Costs
Borrowing costs are generally expensed as incurred. Borrowing costs are capitalized if they are directly
attributable to the acquisition or construction of a qualifying asset. To the extent that funds are
borrowed specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs
eligible for capitalization on that asset shall be determined as the actual borrowing costs incurred on
that borrowing during the period less any investment income on the temporary investment of those
borrowings. To the extent that funds are borrowed generally and used for the purpose of obtaining a
qualifying asset, the amount of borrowing costs eligible for capitalization shall be determined by applying
a capitalization rate to the expenditures on that asset. The capitalization rate shall be the weighted
average of the borrowing costs applicable to the borrowings of the Company that are outstanding during
the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The
amount of borrowing costs capitalized during a period shall not exceed the amount of borrowing costs
incurred during that period.
Capitalization of 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 all
the activities necessary to prepare the asset for its intended use or sale are substantially complete. If the
resulting carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized.
Equity
Capital stock is measured at par value for all shares issued. Incremental costs incurred directly attributable
to the issuance of new shares are shown in equity as a deduction from proceeds, net of tax. Proceeds and fair
value of consideration received in excess of par value are recognized as additional paid-in capital.

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Treasury shares representing own equity instruments that are reacquired are recognized at cost and
deducted from equity. No gain or loss is recognized in the consolidated statement of income on the
purchase, sale, issuance or the cancellation of the Parent Company’s own equity instruments.
Retained earnings represent the Company’s accumulated earnings, net of dividends declared.
Value-Added Tax (VAT)

Revenues, expenses and assets are recognized net of the amount of VAT except: where the VAT incurred
on a purchase of assets or services is not recoverable from the tax authority, in which case the sales tax is
recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables that are stated with the amount of VAT included.
The net amount of current VAT recoverable from and payable to the tax authority is included as part
of “Other current assets” and “Trade and other payables” accounts in the consolidated statements of
financial position.
Income Taxes
Current Income Tax. Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authority. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted as at the financial reporting date.
Deferred Income Tax. Deferred income tax is provided, using the liability method, on all temporary
differences at the reporting date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are
recognized for all deductible temporary differences to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences can be utilized. Deferred income tax,
however, is not recognized when the deductible and taxable temporary differences arise from the initial
recognition of asset or liability in a transaction that is not a business combination and, at the time of
transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit 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 profit will allow all or
part of the deferred tax assets to be recovered.
Deferred tax assets and deferred tax liabilities are measured at the tax rate that is expected to apply to
the period when the assets are realized or the liabilities are settled, based on the tax rates
(and tax laws) that have been enacted or substantively enacted as at the reporting date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to offset
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligations and a reliable estimate can be made of the amount of the obligation. When the
Company expects a provision to be reimbursed, such as under an insurance contract, the reimbursement is
recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the consolidated statement of income, net of any reimbursement. 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 assessments 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.

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Pension Cost
The Parent Company has a funded, noncontributory defined benefit plan. The cost of providing benefits
under the defined benefit plans is actuarially determined using the projected unit credit method.
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), adjusted
for any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the present
value of any economic benefits available in the form of refunds from the plan or reductions in future
contributions to the plan.
Defined benefit costs comprise the following: (1) service cost; (2) net interest on the net defined benefit
liability or asset; and (3) 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 profit or loss.
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the effect
of the asset ceiling (excluding net interest on defined benefit liability) 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.
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 Parent Company, nor can they be paid directly to the
Parent Company. 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.
Long-term Employee Benefits

The Long Term Incentive Plan (LTIP) of the Parent Company (starting 2013) grants cash incentives to
eligible employees of the Parent Company. Liability under the LTIP is determined using the projected
unit credit method. Employee benefit costs include current service costs, interest cost, actuarial gains
and losses, and past service costs. Past service costs and actuarial gains and losses are recognized
immediately.
The long-term employee benefit liability comprise the present value of the defined benefit obligation
(using discount rate based on government bonds) vested at the end of the reporting period.

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Share-based Payments
Employees of the Parent Company receive remuneration in the form of share-based payments, whereby
employees render services as consideration for equity instruments (equity-settled transactions) under
the Employee Stock Option Plan (ESOP).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made
using an appropriate valuation model. That cost is recognized, together with a corresponding increase
in other equity adjustments, over the period in which the performance and/or service conditions are
fulfilled, in “Salaries, wages and benefits” account.
The cumulative expense recognized for equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has expired and the Parent Company’s best
estimate of the number of equity instruments that will ultimately vest. The consolidated statement of
income expense or credit for a period represents the movement in cumulative expense recognized as at
the beginning and end of that period and is recognized in “Salaries, wages and benefits” account.
No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions
for which vesting is conditional upon a market or non-vesting condition. These are treated as vesting
irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the
expense had the terms not been modified, if the original terms of the award are met. An additional
expense is recognized for any modification that increases the total fair value of the share-based payment
transaction, or is otherwise beneficial to the employee as measured at the date of modification.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. They are disclosed
in the notes to consolidated financial statements unless the possibility of an outflow of resources
embodying economic benefits is remote. Contingent assets are not recognized in the consolidated
financial statements but are disclosed in the notes to consolidated financial statements when an inflow of
economic benefits is probable. Contingent assets are not recognized unless virtually certain.
Events After the Reporting Period

Post year-end events that provide additional information about the Company’s position at the financial
reporting date (adjusting events) are reflected in the consolidated financial statements. Post year-end
events that are not adjusting events are disclosed in the notes to the consolidated financial statements
when material.
Earnings per Share (EPS)

Basic EPS is computed based on the weighted average number of outstanding shares and adjusted to
give retroactive effect to any stock split during the year. The dilutive effect of outstanding ESOP shares is
reflected as additional share dilution in the computation of diluted EPS (see Note 18).
3. Significant Accounting Judgments, Estimates and Assumptions
The preparation of the consolidated financial statements in accordance with PFRS requires the Company
to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and
expenses and disclosure of contingent liabilities at the reporting date. In preparing the Company’s
consolidated financial statements, management has made its best estimates and judgments of certain
amounts, giving due consideration to materiality. The estimates and assumptions used in the accompanying
consolidated financial statements are based upon management’s evaluation of relevant facts and
circumstances as at the date of the consolidated financial statements. Future events may occur which will
cause the assumptions used in arriving at the estimates to change. The effects of any change in estimates
are reflected in the consolidated financial statements as they become reasonably determinable.

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Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
Judgments
In the process of applying the Company’s accounting policies, management has made the following
judgments, apart from those involving estimations, which have the most significant effect on the
amounts recognized in the consolidated financial statements:
Fourth Rate Rebasing. In September 2013, the MWSS released its resolutions on the rate rebasing
adjustment for the rebasing period 2013 to 2017 reducing Maynilad’s 2012 average all-in tariff. Maynilad
has formally notified its objection and filed its Dispute Notice before the Appeals Panel. On January 5, 2015,
Maynilad officially received the Appeals Panel’s award dated December 29, 2014. Maynilad already wrote
the Philippine Government, through the DOF, to call on the Undertaking after the MWSS and RO’s delayed
approval of the adjusted rates. Maynilad had subsequently served a Notice of Arbitration and Statement
of Claim upon the Republic, through the DOF.
On May 14, 2015, the MWSS Board of Trustees in its Resolution No. 2015-060-RO approved a net
adjustment of 4.32% to be applied to the prevailing average basic charge of P31.25 per cu.m. as partial
implementation of the Arbitral Award. As at December 31, 2015, Maynilad’s revenue losses due to
the delayed implementation of the Arbitral Award are estimated at P5.6 billion (see Note 1). The
consolidated financial statements do not include any adjustments that might result from the decision of
the Arbitration Tribunal and approval by the MWSS and RO.
Amortization of Service Concession Assets. The Parent Company accounts for its concession arrangement
with MWSS in accordance with IFRIC 12 under the Intangible Asset model as it receives the right (license)
to charge users of public service.
The Parent Company amortizes its service concession assets using UOP method, given that the economic
benefit of these assets are more closely aligned with billed volume, which the Parent Company can already
estimate reliably. Service concession assets, net of accumulated amortization of P18.7 billion and P16.7 billion,
amounted to P62.5 billion and P56.9 billion as at December 31, 2015 and 2014, respectively (see Note 7).
Disputes with MWSS. Pending resolution of the dispute between the Parent Company and MWSS on
certain claims of MWSS, the disputed amount of P5.1 billion and P5.0 billion as at December 31, 2015 and
2014, respectively, is considered as contingent liability (see Notes 7, 12 and 19).
Operating Lease Commitments – Company as Lessee. The Company has determined, based on the evaluation
of the terms and conditions of the arrangements, that the significant risks and rewards for properties
leased from third parties are retained by the lessors and accordingly accounts for these lease contracts as
operating leases.
Total rental expense amounted to P150.6 million, P167.7 million and P158.9 million in 2015,
2014 and 2013, respectively (see Note 22).
Contingencies. The Company is currently involved in various legal and administrative proceedings. The
Company’s estimate of the probable costs for the resolution of these claims has been developed in
consultation with outside legal counsel handling defense in these matters and is based upon an analysis
of potential results. The Company currently does not believe these proceedings will have a material
adverse effect on the Company’s financial position. It is possible, however, that future results of

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operations could be materially affected by changes in the estimates or in the effectiveness of strategies
relating to these proceedings (see Notes 12 and 19).
Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Fair Value of Service Concession Payable. The determination of the cost of service concession payable
requires management to make estimates and assumptions to determine the extent to which the
Company receives a right or license to charge users of the public service. In making those estimates,
management is required to determine a suitable discount rate to calculate the present value of these
cash flows. While the Company believes that the assumptions used are reasonable and appropriate, these
estimates and assumptions can materially affect the consolidated financial statements.
Fair Values of Financial Assets and Financial Liabilities. PFRS requires that certain financial assets and
financial liabilities be carried at fair value, which requires the use of accounting estimates and judgments.
While significant components of fair value measurement are determined using verifiable objective
evidence (i.e., foreign exchange rates, interest rates, volatility rates), the timing and amount of changes
in fair value would differ with the valuation methodology used. Any change in the fair value of these
financial assets and financial liabilities would directly affect income and equity.
The fair values of financial assets and financial liabilities are set out in Note 25.
Fair Value Measurement of Contingent Consideration. Contingent consideration, resulting from business
combinations, is valued at fair value at acquisition date as part of the business combination. Where
the contingent consideration meets the definition of a derivative and, thus, a financial liability, it is
subsequently remeasured to fair value at each reporting date. The determination of the fair value is
based on discounted cash flows. The key assumptions take into consideration the probability of meeting
each performance target and the discount factor.
Recognition of Revenue and Cost. The Company’s revenue recognition policies require management to
make use of estimates and assumptions that may affect the reported amount of revenue. The Company
measures revenue from rehabilitation works at the fair value of the consideration received or receivable.
The Company’s revenue from rehabilitation works recognized based on the percentage of completion are
measured principally on the basis of the estimated completion of a physical proportion of the contract
works. Given that the Company has subcontracted the rehabilitation works to outside contractors
(excluding the cost of some materials for some contractors), the recognized revenue from rehabilitation
works substantially approximates the related cost.
Estimated Billable Water Volume. The Parent Company estimated the billable water volume, where the
amortization of service concession assets is derived from, based on the period over which the Parent
Company’s concession agreement with MWSS is in force. The Parent Company reviews annually the
billable water volume based on factors that include market conditions such as population growth and
consumption, and the status of the Parent Company’s projects and their impact on non-revenue water.
It is possible that future results of operations could be materially affected by changes in the Parent
Company’s estimates brought about by changes in the aforementioned factors. A reduction in the
projected billable water volume would increase amortization and decrease noncurrent assets.
Service concession assets, net of accumulated amortization of P18.7 billion and P16.7 billion, amounted to
P62.5 billion and P56.9 billion as at December 31, 2015 and 2014, respectively (see Note 7).
Allowance for Doubtful Accounts. The Company estimates the allowance for doubtful accounts related to
the trade receivables based on two methods. The amounts calculated using each of these methods are
combined to determine the total amount of allowance. First, the Company evaluates specific accounts
that are considered individually significant for any objective evidence that certain customers are unable to
meet their financial obligations. In these cases, the Company uses judgment, based on the best available
facts and circumstances, including but not limited to, the length of its relationship with the customer

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and the customer’s current credit status based on third party credit reports and known market factors.
The allowance provided is based on the difference between the present value of the receivables that the
Company expects to collect, discounted at the receivables’ original effective interest rate and the carrying
amount of the receivable. This specific allowance is re-evaluated and adjusted as additional information
received affects the amounts estimated. Second, if it is determined that no objective evidence of
impairment exists for an individually assessed receivable, the receivable is included in a group of receivables
with similar credit risk characteristics and is collectively assessed for impairment. The provision under
collective assessment is based on historical collection, write-off, experience and change in customer
payment terms. Impairment assessment is performed throughout the year.
The amount and timing of recorded expenses for any period would therefore differ based on the judgments
or estimates made. Reversal of provision for doubtful accounts amounted to P232.0 million in 2015 while
provision for doubtful accounts amounted to P0.4 million and P143.0 million in 2014 and 2013, respectively.
An increase in allowance for doubtful accounts would increase the Company’s recorded expenses and
decrease trade and other receivables. Trade and other receivables, net of allowance for doubtful accounts,
amounted to P2.4 billion and P2.0 billion as at December 31, 2015 and 2014, respectively (see Note 5).
Determination of Impairment of AFS Financial Assets. The Company determines that AFS financial assets are
impaired when there has been a significant or prolonged decline in the fair value below its cost or where
other objective evidence of impairment exists. The Company determines that a decline in fair value of
greater than 20% of cost is considered to be a significant decline and a decline for a period of more than
12 months is considered to be a prolonged decline. This determination of what is significant or prolonged
requires judgment. In making this judgment, the Company evaluates, among other factors, the normal
volatility in share price for quoted equities. In addition, AFS financial assets are considered impaired
when the Company believes that future cash flows generated from the investment is expected to decline
significantly. The Company’s management makes significant estimates and assumptions on the future
cash flows expected and the appropriate discount rate to determine if impairment exists. Impairment may
also be appropriate when there is evidence of deterioration in the financial health of the investee, industry
and sector performance. Impairment losses recognized in profit or loss for an investment in an equity
instrument classified as AFS are not reversed through profit or loss. Subsequent increases in the fair value
after the impairment are recognized directly in other comprehensive income.
Impairment loss on AFS financial assets recognized in 2014 amounted to P100.2 million while reversal of
impairment loss amounted to P22.0 million in 2015 due to improvement in future cash flows. The carrying
value of AFS financial assets are disclosed in Note 9.
Estimated Useful Lives of Property and Equipment. The useful life of each item of the Company’s property
and equipment is estimated based on the period over which the asset is expected to be available for
use. Such estimation is based on a collective assessment of practices of similar businesses, internal
technical evaluation and experience with similar assets. The estimated useful life of each asset is reviewed
periodically and updated if expectations differ from previous estimates due to physical wear and tear,
technical or commercial obsolescence and legal or other limits on the use of the asset. It is possible,
however, that future results of operations could be materially affected by changes in the amounts and
timing of recorded expenses brought about by changes in the factors mentioned above. A reduction in
the estimated useful life of any item of property and equipment would increase the recorded depreciation
expense and decrease property and equipment.
There was no change in estimated useful lives of property and equipment in 2015 and 2014.
Property and equipment, net of accumulated depreciation and amortization of P1.7 billion and

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P1.4 billion, amounted to P833.8 million and P809.7 million as at December 31, 2015 and 2014, respectively
(see Note 8).
Deferred Tax Assets. 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 profit will be available to allow
all or part of the deferred tax assets to be utilized. However, there is no assurance that sufficient taxable
profit will be generated to allow all or part of the deferred tax assets to be utilized.
The Company recognized deferred tax assets on deductible temporary differences expected to reverse
after the income tax holiday (ITH) (see Note 20). The Company did not recognize deferred tax assets
on deductible temporary differences that are expected to reverse during the ITH period and on items
where doubt exists as to the tax benefits these deferred tax assets will bring in the future. Net deferred
tax assets recognized amounted to P2.1 billion and P2.2 billion as at December 31, 2015 and 2014,
respectively (see Notes 2 and 15). Unrecognized deferred tax assets amounted to P47.8 million and
P864.9 million as at December 31, 2015 and 2014, respectively (see Note 15).
Deferred FCDA and Deferred Credits. Under Amendment No. 1 of the Concession Agreement, the Parent
Company is entitled to recover (refund) foreign exchange losses (gains) arising from MWSS loans and
any concessionaire loans. For the unrealized foreign exchange losses, the Parent Company recognized
deferred FCDA as an asset since this is a resource controlled by the Company as a result of past events and
from which future economic benefits are expected to flow to the Parent Company. Unrealized foreign
exchange gains, however, are presented as deferred credits and will be refunded to the customers.
Pursuant to MWSS-RO Resolution No. 2014-099-RO, the new base foreign exchange rate was changed
from P48.04 to P41.19 effective January 1, 2015 (see Note 7).
Deferred FCDA (credits) representing the net effect of unrealized foreign exchange losses (gains) on
service concession obligation payable to MWSS, and restatement of foreign currency-denominated
interest-bearing loans and related interest that are recoverable from (refundable to) the customers
amounted to P279.1 million and (P620.9 million) as at December 31, 2015 and 2014, respectively.
Asset Impairment. The Company assesses impairment on assets whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the
Company considers important which could trigger an impairment review include the following:
• significant underperformance relative to expected historical or projected future operating results;

• significant changes in the manner of use of the acquired assets or the strategy for overall business; and
• significant negative industry or economic trends.
The Company recognizes an impairment loss whenever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is computed using the value in use (VIU) approach.
Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating
unit to which the asset belongs. Determining the recoverable amount of assets requires the estimation
of cash flows expected to be generated from the continued use and ultimate disposition of such
assets. While it is believed that the assumptions used in the estimation of fair values reflected in
the consolidated financial statements are appropriate and reasonable, significant changes in these
assumptions may materially affect the assessment of recoverable amounts and any resulting impairment
loss could have a material adverse impact on the results of operations.
Noncurrent nonfinancial assets and AFS financial assets carried at cost and subject to impairment test
when certain impairment indicators are present follow:
2015 2014
Service concession assets (see Note 7) P62,488,321 P56,926,326
Property and equipment (see Note 8) 833,821 809,718
Goodwill (see Note 2) 288,082 288,082
AFS financial assets (see Note 9) 132,387 110,377
Total P63,742,611 P58,134,503
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The goodwill arising from the acquisition of Phil Hydro represents the fair value of expected incremental
economic benefits that the Parent Company expects to obtain. The impairment test of goodwill is based
on VIU calculations that used the discounted cash flow model. The VIU was based on the cash flow
projections on the most recent financial budgets and forecast of Phil Hydro. The length of the projections
is up to 2035 based on the existing Bulk Water Supply Agreements. The discount rate applied was 10.7%,
which was based on the weighted average cost of capital. Based on the impairment test, the Parent
Company did not identify any impairment loss. With regard to the assessment of VIU, management
believes that no reasonably possible change in any key assumptions would cause the carrying values
of the units to materially exceed the recoverable amount. As at December 31, 2015 and 2014, no
impairment loss on goodwill was recognized.
The Company performs its annual impairment test close to year-end, after finalizing the annual
financial budget and forecast. The impairment test of goodwill is based on VIU calculation that uses
the discounted cash flow model. Cash flow projections are based on most recent financial budget and
forecast. Discount rate applied is based on market weighted average cost of capital with estimated
premium over cost of equity. The key assumptions used to determine the recoverable amount are
discussed below.
Based on the impairment test performed, management did not identify impairment loss on goodwill.
Management also believes that no reasonably possible change in any of the key assumptions would cause
the carrying value to materially exceed the recoverable amount.
2015 2014
Revenue growth rate* 2.0% 2.0%
Average forecast period 20 years 21 years
Discount rate 8.7% 8.7%
*Average growth represents average of year-over-year growth over the terms of the
Bulk Water Supply Agreements and Memorandum of Agreement
The forecasted period is greater than five (5) years as management can reliably estimate the cash flow for
the entire duration of Phil Hydro’s concession period covered by the Bulk Water Supply Agreements and
Memorandum of Agreement.
Impairment loss on AFS financial assets recognized in 2014 amounted to P100.2 million while reversal of
impairment loss amounted to P22.0 million in 2015.
Computation of Pension Cost. The cost of defined benefit pension plans and other post-employment
benefits as well as the present value of the pension obligation are determined using actuarial valuations.
The actuarial valuation involves making various assumptions. These include the determination of
the discount rate, turnover rate, mortality rate and salary increase rate. Due to the complexity of the
valuation, the underlying assumptions and its long-term nature, defined benefit obligations are highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
In determining the appropriate 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. Turnover rate is
based on a 3-year historical information of voluntary separation and resignation by plan members.

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The mortality rate is based on publicly available mortality tables for the specific country and is modified
accordingly with estimates of mortality improvements. Future salary increases and pension increases are
based on expected future inflation rates for the specific country.
Pension liability amounted to P416.2 million andP281.8 million as at December 31, 2015 and 2014,
respectively (see Note 16).
Computation of Share-based Payment Transactions. The Company measures the cost of equity-settled
transactions with employees by reference to the fair value of the equity instruments at the date at
which they are granted. Estimating fair value for share-based payments requires determining the most
appropriate valuation model for a grant of equity instruments, which is dependent on the terms and
conditions of the grant. This estimate also requires determining the most appropriate inputs to the
valuation model including the expected life of the option, volatility, discount rates and dividend yield and
making assumptions about them. The assumptions and models used for estimating fair value for share-
based payments are disclosed in Note 13.
Equity-based compensation expense presented as part of “Salaries, wages and benefits” account in
consolidated statements of income amounted to P146.1 million, nil and P2.8 million in 2015, 2014 and
2013, respectively (see Note 13).
Determination of Other Long Term Incentives Benefits. The LTIP for key executives of MPIC and certain
subsidiaries, including the Parent Company, was approved by the Executive Compensation Committee and
the BOD of MPIC which is based on profit targets for the covered Performance Cycle. In addition, in 2013,
the Parent Company has approved an LTIP for its managers and executives which is also based on profit
targets for the covered Performance Cycle of 2013 to 2015. The cost of LTIP is determined using the
projected unit credit method based on prevailing discount rates and profit targets. While management’s
assumptions are believed to be reasonable and appropriate, significant differences in actual results or
changes in assumptions may materially affect the Company’s other long-term incentive benefits.
Accrued LTIP amounted to P429.0 million and P279.2 million as at December 31, 2015 and 2014,
respectively. The total cost of the LTIP recognized by the Company presented as part of “Salaries, wages
and benefits” account in the consolidated statements of income amounted to P149.8 million,
P130.9 million and P148.3 million in 2015, 2014 and 2013, respectively (see Notes 11 and 16).
4. Cash and Cash Equivalents
This account consists of:
2015 2014
Cash on hand and in banks P982,791 P828,138
Cash equivalents 2,110,221 3,360,400
P3,093,012 P4,188,538
Cash in banks earn interest at the respective bank deposit rates. Cash equivalents are made for varying
periods between one day and three months depending on the immediate cash requirements of the
Company and earn interest at the respective short-term investment rates.
Short-term investments amounting to P6.1 billion and P2.9 billion as at December 31, 2015 and 2014,
respectively, with original maturities of more than three months to one year are separately shown in the
consolidated statements of financial position.
Interest income earned from cash in banks and short-term investments amounted to P134.9 million,
P81.3 million and P90.6 million in 2015, 2014 and 2013, respectively.

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5. Trade and Other Receivables
This account consists of receivables from:

2015 2014
Customers:
Residential P1,908,889 P1,958,371
Semi-business 241,700 199,060
Commercial 721,963 625,593
Industrial 155,901 130,567
Bulk water supply 42,362 29,937
3,070,815 2,943,528
Employees 39,899 32,966
Others 348,722 340,027
3,459,436 3,316,521
Less allowance for doubtful accounts 1,030,624 1,267,971
P2,428,812 P2,048,550
The classes of the Company’s receivables from customers are as follows:
• Residential – pertains to receivables arising from water and sewer service use for domestic purposes only.
• Semi-business – pertains to receivables arising from water and sewer service use for small businesses.
• Commercial – pertains to receivables arising from water and sewer service use for commercial purposes.
• Industrial – pertains to receivables arising from water and sewer service use for industrial purposes,
including services for manufacturing.
• Bulk water supply – pertains to receivables arising from water service to water districts outside the
West Service Area.
Receivables from customers and bulk water supply are non-interest bearing and generally have 60 day term.
Other receivables consist mainly of receivables from collecting agents normally received within 30 days
and advances for construction and installation of water reticulation systems for subdivisions in the
West Service Area payable on installment basis over a period of 3-5 years. Portion of advances for water
reticulation systems expected to be collected beyond one year is presented as part of “Other noncurrent
assets” account in the consolidated statements of financial position.
The movements in the Company’s allowance for doubtful accounts follow:
2015
Receivables from Customers Other
Residential Semi-business Commercial Industrial Receivables Total
At January 1 P566,133 P149,377 P344,104 P131,787 P76,570 P1,267,971
Reversal during (109,991) (29,143) (67,133) (25,711) – (231,978)
the year
Write-off (5,369) – – – – (5,369)
At December 31 P450,773 P120,234 P276,971 P106,076 P76,570 P1,030,624

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2014
Receivables from Customers Other
Residential Semi-business Commercial Industrial Receivables Total
At January 1 P565,775 P149,377 P344,104 P131,787 P76,570 P1,267,613
Provision during 358 – – – – 358
the year
At December 31 P566,133 P149,377 P344,104 P131,787 P76,570 P1,267,971
6. Other Current Assets

2015 2014
Sinking fund (see Note 10) P1,773,843 P1,746,491
Advances to contractors 987,035 410,475
Input VAT 191,749 158,908
Deposits 140,250 138,290
Prepayments (see Note 22) 59,311 159,880
Others 64,564 60,587
P3,216,752 P2,674,631
Sinking fund represents the amount set aside to cover semi-annual principal and interest payment
of loans, and unutilized proceeds from the US$137.5 million loan drawdowns for the Metro Manila
Wastewater Management Project maintained in a designated bank account (see Note 10).
Advances to contractors are normally applied within a year against progress billings.
Deposits mainly consist of refundable rental deposits.
Prepayments mainly pertain to insurance, premium bond, and taxes (see Note 22).
7. Service Concession Assets
The movements in this account are as follows:

2015 2014
Cost:
Balance at beginning of year P73,633,419 P69,463,373
Additions 8,232,006 4,170,046
Effect of change in rebased rate (632,327) –
Balance at end of year 81,233,098 73,633,419
Accumulated amortization:
Balance at beginning of year 16,707,093 14,902,645
Amortization 2,037,684 1,804,448
Balance at end of year 18,744,777 16,707,093
P62,488,321 P56,926,326
Service concession assets consist of the present value of total estimated concession fee payments
pursuant to the Concession Agreement and the costs of rehabilitation works incurred.
The aggregate Concession fee pursuant to the Concession Agreement is equal to the sum of the following:
a. 90% 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 raw water conveyance
component of the Umiray-Angat Transbasin Project (UATP), on the relevant payment date set forth on
the pertinent schedule of the Concession Agreement;

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b. 90% 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 relevant payment date set forth on the
pertinent schedule of the Concession Agreement;
c. 90% of the local component costs and cost overruns related to the UATP in accordance with the
pertinent schedule of the Concession Agreement;
d. 100% of the aggregate peso equivalent due under any MWSS loan designated for existing projects,
which have not been disbursed prior to the Commencement Date and have been either awarded to
third party bidders or been elected by the Parent Company for continuation in accordance with the
pertinent sections of the Concession Agreement;
e. 100% of the local component costs and cost overruns related to the existing projects in accordance
with relevant schedule of the Concession Agreement; and
f. Maintenance and operating expenditure (MOE) representing one-half of the annual budget for MWSS
for that year, provided that such annual budget shall not exceed P200.0 million (as at 1997), subject to
annual CPI adjustment (see Note 22).
Tranche B Concession Fees are additional concession fees being charged by MWSS to the Parent Company
representing the cost of borrowings by MWSS as at December 2004. As at
December 31, 2015 and 2014, the Parent Company had recognized and fully paid Tranche B Concession
Fees of US$36.9 million and the related accrued interest thereon (see Note 12).
Pursuant to the recommendation of the Receiver, the disputed amount being claimed by MWSS of
additional Tranche B Concession Fees of US$18.1 million is considered as contingent liability of the Parent
Company, as discussed in Note 19.
The Parent Company recognized additional concession fees amounting to P503.5 million and
P4.9 million in 2015 and 2014, respectively, mainly pertaining to various rehabilitation projects and UATP-
related local component costs (see Note 12).
Specific borrowing costs capitalized as part of service concession assets amounted to

P99.4 million and nil in 2015 and 2014, respectively (see Note 10).
On March 11, 2015, the MWSS Board of Trustees approved and confirmed the recommendation of the
MWSS-RO to set aside the status quo of the FCDA and resume its normal operation starting first quarter
of 2015. Under MWSS-RO Resolution No. 2014-002-CA, the MWSS-RO approved an FCDA equivalent to
1.12% of the 2015 basic charge of P33.97 per cu.m. or P0.38 per cu.m., effective January 1, 2015. The
said FCDA adjustment was determined using the new rebased rate of P41.19 approved by the MWSS-RO,
applicable to concession fee payments starting January 1, 2013.
The effect of change in rebased rate amounting to P632.3 million was accounted for as an adjustment to
“Service concession assets” and “Deferred credits” accounts to adjust their carrying value based on the
newly determined and approved rebased rate (see Note 3).

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8. Property and Equipment
The rollforward analysis of this account follows:
2015
Land and Land Instrumentation, Office Furniture, Transportation Total
Improvements Tools and Other Fixtures and Equipment
Equipment Equipment
Cost
At January 1 P41,275 P1,177,403 P773,756 P259,111 P2,251,545
Additions – 114,659 124,858 46,800 286,317
Disposals – (1,327) (11,040) (8,731) (21,098)
At December 31 41,275 1,290,735 887,574 297,180 2,516,764
Accumulated Depreciation
and Amortization
At January 1 2,876 677,662 606,032 155,257 1,441,827
Depreciation and amortization 747 117,018 106,677 35,732 260,174
Disposals – (1,327) (11,002) (6,729) (19,058)
At December 31 3,623 793,353 701,707 184,260 1,682,943
Net Book Value at December 31 P37,652 P497,382 P185,867 P112,920 P833,821
2014
Land and Land Instrumentation, Office Furniture, Transporta- Total
Improvements Tools and Other Fixtures and tion Equip-
Equipment Equipment ment
Cost
At January 1 P40,075 P810,658 P697,252 P224,908 P1,772,893
Additions 1,200 383,709 82,821 58,462 526,192
Reclassification – (3,771) 3,771 – –
Disposals – (13,193) (10,088) (24,259) (47,540)
At December 31 41,275 1,177,403 773,756 259,111 2,251,545
Accumulated Depreciation and
Amortization
At January 1 2,347 567,472 511,519 143,283 1,224,621
Depreciation and amortization 529 122,460 104,592 29,164 256,745
Disposals – (12,270) (10,079) (17,190) (39,539)
At December 31 2,876 677,662 606,032 155,257 1,441,827
Net Book Value at December 31 P38,399 P499,741 P167,724 P103,854 P809,718
9. AFS Financial Assets
This account pertains to the Company’s investments in unquoted equity shares:

2015 2014
Cost P221,093 P221,093
Less allowance for impairment loss 88,706 110,716
P132,387 P110,377
In 2014, impairment loss recognized amounted to P100.2 million, presented as part of

“Others - net” under “Other income (expenses)” in the consolidated statement of income. In 2015, the
Company recognized reversal of impairment loss amounting to P22.0 million under “Other comprehensive
income” in the consolidated statement of comprehensive income.

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10. Interest-bearing Loans

2015 2014
P21.2 billion Term Loan P16,921,639 P18,613,802
P5.0 billion Corporate Notes 5,000,000 5,000,000
US$137.5 million Loan 2,016,649 662,902
P5.2 billion Corporate Notes 1,000,000 −
Peso-denominated Bank Loan 255,000 –
25,193,288 24,276,704
Less unamortized debt issuance costs 113,949 75,293
25,079,339 24,201,411
Less current portion 1,742,164 1,692,163
P23,337,175 P22,509,248
P21.2 billion Term Loan

On March 22, 2013, the Parent Company entered into several loan agreements for the refinancing of all
of its existing loans under the 2008 and 2011 Omnibus Notes Facility and Security Agreements (ONFSA)
(collectively referred to as “Corporate Notes”), whereby the Parent Company was granted a Term Loan
Facility (the “Term Loan”) in the aggregate amount of P21.2 billion. Under the new terms, the loans
shall be payable in semi-annual installments within ten years to commence at the end of the 6th month
after the initial issue date and bears an interest rate per annum equal to the higher of (i) the applicable
benchmark rate plus 0.75% per annum, or (ii) 5.75% per annum. The benchmark rate shall be determined
by reference to the PDST-F rate. The Term Loan is secured by a negative pledge. The change in the terms
of the loan contracts was assessed as substantial modification of the Corporate Notes and thus, resulted
to derecognition of the old loan and recognition of new financial liability.
All transaction costs incurred in relation to the loan refinancing totaling P748.5 million and unamortized
debt issuance costs related to ONFSA amounting to P14.8 million were charged to expense presented as
part of “Interest expense and other financing charges” and “Others - net” accounts under “Other income
(expenses)” in the 2013 consolidated statement of income (see Note 17).
P5.0 billion Corporate Notes

On April 29, 2013, the Parent Company entered into a Loan Agreement (Corporate Notes) with a local
bank. The loan shall be payable in semi-annual installments within ten years to commence at the end of
the 42nd month, and bears a fixed rate per annum equal to the higher of (i) the applicable benchmark
rate plus 0.75% per annum, or (ii) 5.75% per annum. The benchmark rate shall be determined by
reference to the PDST-F rate. The P5.0 billion Corporate Notes is secured by a negative pledge.
Debt Issuance Costs. All legal and professional fees incurred in relation to the debt totaling
P42.8 million were capitalized in 2013. Debt issuance costs are amortized using the effective interest
method. Amortization of debt issuance costs attributed to this loan amounting to P3.9 million,
P3.6 million and P2.5 million in 2015, 2014 and 2013, respectively, is presented as part of
“Interest expense and other financing charges” account in the consolidated statements of income
(see Note 17).

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US$137.5 million Loan
The World Bank (WB), through the Metro Manila Wastewater Management Project (MWMP), provided
a US$275.0 million loan to the Land Bank of the Philippines (LBP) for relending at an equal share to the
two Concessionaires of the MWSS namely, Maynilad and Manila Water. The MWMP is expected to finance
investments in wastewater collection and treatment, and septage management in Metro Manila.
The loan will fund the following projects:
1. Rehabilitation of Ayala Alabang Sewage Treatment Plant (STP)

2. Talayan STP (part of the San Juan River Basin Project)
3. Valenzuela STP and associated wastewater conveyance system
4. Pasay STP and associated wastewater conveyance system
5. Muntinlupa STP and associated wastewater conveyance system
6. South Septage Treatment Plant
The WB and the LBP signed the Loan Agreement on May 31, 2012 while the Subsidiary Loan Agreement
between LBP and Maynilad was executed on October 25, 2012.
The loan shall be payable in semi-annual installments within 25 years, inclusive of seven years grace period.
The interest shall be paid semi-annually based on the same rate of interest payable by LBP under the WB
Loan Agreement, plus fixed spread of 1.25% per annum. The loan is secured by a negative pledge.
Summary of transactions during the year is as follows:

2015 2014
Balance at beginning of year US$4,861,622 US$1,462,215
Amount received during the year 28,029,328 12,823,388
Bank charges (50) (70)
Net amount 32,890,900 14,285,533
Expenditures during the year (26,669,125) (9,423,911)
Balance at end of year US$6,221,775 US$4,861,622
The US$6.2 million and US$4.9 million balance as at December 31, 2015 and 2014, respectively, represents
the outstanding balance of LBP designated account No. 3404-031-936, under the account name MWMP -
Category 2 - MWSI, and is presented as part of “Sinking fund” under “Other current assets” account in the
consolidated statements of financial position (see Note 6).
The US$42.9 million and US$14.8 million cumulative drawn amount as at December 31, 2015 and 2014,
respectively, is presented as part of the noncurrent portion of the interest-bearing loans. As at
December 31, 2015, undrawn amount from this facility amounting to US$94.6 million out of Maynilad’s
share of US$137.5 million from the facility, is available until June 30, 2017.
The proceeds of the World Bank loan have been expended in accordance with the intended purposes as
specified in the Loan Agreement.
method. Amortization of debt issuance costs attributed to this loan amounting to P2.5 million, P3.0 million
and P1.3 million in 2015, 2014 and 2013, respectively, is presented as part of “Interest expense and other
financing charges” account in the consolidated statements of income (see Note 17).
Specific borrowing costs capitalized as part of service concession assets amounted to P48.1 million and nil
in 2015 and 2014, respectively (see Note 7).
P5.2 billion Corporate Notes

On February 24, 2014, the Parent Company entered into a Loan Agreement (Corporate Notes) with the
Development Bank of the Philippines. The loan proceeds shall be used to finance the first stage of the
Parañaque-Las Piñas STP and associated wastewater conveyance system. The loan shall be payable in

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semi-annual payments within fifteen years to commence at the end of the fifth year, which bears a fixed
rate per annum equal to 6.0%. The first drawdown amounting to P1.0 billion was made on March 2, 2015.
Undrawn amount from this facility amounting to P4.2 billion as at December 31, 2015 is available until
February 2017. The P5.2 Billion Corporate Notes is secured by a negative pledge.
method. Amortization of debt issuance costs attributed to this loan amounting to P2.2 million in 2015
is presented as part of “Interest expense and other financing charges” account in the consolidated
statement of income (see Note 17).
Specific borrowing costs capitalized as part of service concession assets amounted to

P51.3 million and nil in 2015 and 2014, respectively (see Note 7).
Covenants. The loan agreements contain, among others, covenants regarding the maintenance of certain
financial ratios such as debt-to-equity ratio and debt service coverage ratio, and maintenance of debt
service reserve account (see Note 6). As at December 31, 2015 and 2014,
the Parent Company has complied with these covenants.
Under the terms of the loan agreements, the Parent Company may, at its option and without premium
and penalty, redeem the Corporate Notes in whole or in part, subject to the conditions stipulated in the
agreements. The embedded early redemption and prepayment options are clearly and closely related to the
host debt contract, and thus, do not require to be bifurcated and accounted for separately in the host contract.
Peso-denominated Loan of Phil Hydro

On May 4, 2015, Phil Hydro entered into a Loan Agreement with the Land Bank of the Philippines. The
loan shall be payable in quarterly installments within eight years to commence after the end of the
8th quarter, and bears an interest rate per annum equal to the higher of (i) the applicable benchmark rate
plus 1.0% per annum, or (ii) 5.5% per annum. The benchmark rate shall be determined by reference to
the PDST-R2 rate. The peso-denominated loan is secured by a negative pledge.
method. Amortization of debt issuance costs attributed to this loan amounting to P0.1 million is
presented as part of “Interest expense and other financing charges” account in the 2015 consolidated
statement of income (see Note 17).
Covenants. The loan agreement contains, among others, covenants regarding the maintenance of certain
financial ratios such as debt-to-equity ratio and debt service coverage ratio. As at December 31, 2015,
Phil Hydro has complied with these covenants.
The movements in the balance of unamortized debt issuance costs related to all interest-bearing loans
are as follows:
2015 2014
Balance at beginning of year P75,293 P81,888
Additions during the year 47,326 −
Amortization during the year (see Note 17) (8,670) (6,595)
P113,949 P75,293

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The repayments of loans based on existing terms are scheduled as follows:
In Original Currency
Year US Dollar-denominated* Peso Loans Total Peso Equivalent*
(In Millions)
2016 $– P1,742.16 P1,742.16
2017 – 1,808.10 1,808.10
2018 – 1,824.04 1,824.04
2019 1.19 1,824.04 1,880.10
2020 onwards 41.66 15,978.30 17,938.89
$42.85 P23,176.64 P25,193.29
*Translated using the December 31, 2015 exchange rate of P47.06:US$1.
11. Trade and Other Payables

2015 2014
Trade payables P2,304,384 P1,929,602
Accrued construction costs (see Note 14) 2,886,154 2,377,168
Due to related party (see Note 14) 1,900 1,900
Other accrued expenses (see Note 16) 6,134,784 6,025,050
P11,327,222 P10,333,720
Trade and other payables are non-interest bearing and are normally settled within one year.
Trade payables include liabilities relating to assets held in trust (see Note 23) used in the Company’s
operations amounting to P97.3 million as at December 31, 2015 and 2014.
Other accrued expenses mainly consist of provisions, salaries, wages and benefits, contracted services and
interest payable to the banks. Details of provisions required by PAS 37, Provisions, Contingent Liabilities
and Contingent Assets, are not disclosed as these may prejudice the Company’s positions in relation to the
cases pending before the courts or quasi-judicial bodies.
Acquisition of Phil Hydro

As discussed in Note 2, the Parent Company acquired Phil Hydro in August 2012 for a net consideration of
P526.9 million payable in tranches upon satisfaction of certain conditions precedent. Initial payment at
the date of acquisition amounted to P210.0 million. Subsequent payments made amounted to
P29.6 million, P66.0 million and P195.4 million in 2015, 2014 and 2013, respectively. Upon final payment
of the last tranche of the purchase price in 2015, the Parent Company was able to further negotiate a
discount amounting to P25.9 million recognized as part of “Others - net” under “Other income (expenses)”
in the 2015 consolidated statement of income. As at December 31, 2015 and 2014, the remaining unpaid
purchase price included as part of “Trade and other payables” account amounted to nil and P55.5 million,
respectively.
12. Service Concession Obligation Payable to MWSS

2015 2014
Concession fees payable (see Note 7) P7,487,645 P7,528,126
Accrued interest 607,217 607,217
8,094,862 8,135,343
Less current portion 1,357,705 1,094,378
P6,737,157 P7,040,965

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Disputes with MWSS

In prior years, the Parent Company has been contesting certain charges billed by MWSS relating to:
(a) the basis of the computation of interest; (b) MWSS cost of borrowings; and (c) additional penalties.
Consequently, the Parent Company has not provided for these additional charges. These disputed charges
have been reflected by virtue of the Debt and Capital Restructuring Agreement (DCRA) entered into in 2005.
Accordingly, the Parent Company has recognized these additional charges, referred to as Tranche B Concession
Fees in the DCRA, amounting to US$30.1 million. As discussed in Note 7, the Receiver determined an additional
amount of Tranche B Concession Fees of US$6.8 million. As at December 31, 2015 and 2014, the Parent
Company had recognized Tranche B Concession Fees of US$36.9 million (see Note 7).
The Parent Company reconciled its liability to MWSS with the confirmation and billings of MWSS. The difference
between the amount confirmed by MWSS and the amount recognized by the Parent Company amounted to
P5.1 billion and P5.0 billion as at December 31, 2015 and 2014, respectively. The difference mainly pertains to
disputed claims of MWSS consisting of additional Tranche B Concession Fees (see Note 7), borrowing cost and
interest penalty under the Concession Agreement (prior to the DCRA). The Parent Company’s position on these
charges is consistent with the Receiver’s recommendation which was upheld by the Rehabilitation Court (see
Notes 7 and 19).
Following the issuance of the Rehabilitation Court’s Order on December 19, 2007 disallowing the MWSS’
disputed claims and the termination of the Parent Company’s rehabilitation proceedings, the Parent Company
and MWSS sought to resolve the matter in accordance with the dispute resolution requirements of the TCA.
Prior to the DCRA, the Parent Company has accrued interest on its payable to MWSS based on the terms of the
Concession Agreement, which was disputed by the Parent Company before the Rehabilitation Court. These
already amounted to P985.3 million as at December 31, 2011 and have been charged to interest expense
in prior years. The Parent Company maintains that the accrued interest on its payable to MWSS has been
adequately replaced by the Tranche B Concession Fees discussed above. The Parent Company’s position is
consistent with the Receiver’s recommendation which was upheld by the Rehabilitation Court (see Notes 7 and
19). With the prescription of the TCA and in light of the Parent Company’s current negotiation and outstanding
offer of US$14.0 million to fully settle the claim of MWSS, the Parent Company reversed the amount of accrued
interest in excess of the US$14.0 million settlement offer amounting to P378.1 million and charged to other
income in 2012. The remaining balance of P607.2 million as at December 31, 2015 and 2014, which pertains
to the disputed interest penalty under the Concession Agreement prior to DCRA, has remained in the books
pending resolution of the remaining disputed claims of MWSS.
The schedule of undiscounted estimated future concession fee payments, based on the term of the
Concession Agreement, is as follows:
In Original Currency
Year Foreign Currency Loans Peso Loans/Project Total Peso Equivalent*
(Translated to US$)* Local Support
(In Millions)
2016 $19.1 P1,518.6 P2,419.6
2017 14.2 518.0 1,186.9
2018 14.2 536.1 1,204.1
2019 14.2 536.2 1,204.9
2020-2037 58.8 9,638.6 12,406.7
$120.5 P12,747.5 P18,422.2
* Translated using the December 31, 2015 exchange rate of P47.06:US$1.

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Additional concession fee liability relating to the extension of the Concession Agreement
(see Note 1) is only determinable upon loan drawdown of MWSS and the actual construction of the
related concession projects.
13. Equity
a. The Parent Company’s authorized and issued shares as at December 31, 2015 and 2014 are
presented below:
Number of Shares
2015 2014
Authorized and issued - P1,000 par value
Common shares
Class A 4,222,482 4,222,482
Class B 236,000 236,000
ESOP 88,500 88,500
4,546,982 4,546,982
Class A shares, comprising sixty percent (60%) of the authorized common shares, may only be
subscribed by Filipino citizens or corporations or associations organized under the laws of the
Philippines with at least sixty percent (60%) of the capital owned by Filipino citizens.
Class B shares, comprising forty percent (40%) of the authorized common shares, may be
subscribed by, transferred to and owned by either Filipino citizens or by aliens.
b. ESOP
The employees of the Parent Company are allowed equity participation of up to six percent (6%)
of the issued and outstanding capital stock of the Parent Company upon the effective date of
the increase in authorized capital stock of the Parent Company pursuant to and in accordance
with the provisions of Clause 2.6 of the DCRA. For this purpose, a series of 88,500,000 nonvoting
convertible redeemable shares (ESOP Shares) was created from common Class A shares as
reflected in the Parent Company’s amended Articles of Incorporation. In 2008, the ESOP shares
were effectively reduced to 88,500 shares due to change in par value from P1 to P1,000. The
ESOP shares have no voting rights, except for those provided under Section 6 of the Corporation
Code and have no pre-emptive rights to purchase or subscribe to future or additional issuances
or disposition of shares of the Parent Company.
Within thirty (30) days after the earlier of (i) the end of the fifth year from the creation of
the ESOP Shares, and (ii) the listing date for common shares in a recognized Philippine Stock
Exchange, the Parent Company may redeem the ESOP shares at a redemption ratio equal to one
common share for every ESOP share held and such common shares so exchanged shall have the
same rights and privileges as all other common shares.
Each ESOP Share will be convertible, at the option of the holder thereof, at any time during the
period commencing the earlier of (i) the end of the fifth year from the creation of the ESOP
Shares; or (ii) the listing date for common shares in a recognized Philippine Stock Exchange into
one fully-paid and non-assessable common share. Such common share shall have the same rights
and privileges as all other common shares. Conversion of the ESOP Share may be effected by
surrendering the certificates representing such shares to be converted to the Parent Company at the
Parent Company’s principal office or at such other office or offices as the BOD may designate, and a
duly signed and completed notice of conversion in such form as may from time to time be specified
by the Parent Company (a “Conversion Notice”), together with such evidence as the Parent Company
may reasonably require to prove the title of the person exercising such right. A Conversion Notice
once given may not be withdrawn without the consent in writing of the Parent Company.

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In 2012, ESOP shares reacquired by the Parent Company from its resigned employees amounting
to P3.2 million were presented as treasury shares.
In 2012, the Board and shareholders of the Parent Company approved the amendment of its
Articles of Incorporation to allow for the reissuance of ESOP shares that have been bought
back by the Parent Company from separated employees. Upon approval by the SEC of the
amendment on January 31, 2013, said ESOP shares were subsequently reissued to all qualified
employees of the Parent Company.
In 2014, ESOP shares reacquired by the Company from employees who availed of the Special
Opportunity Program (SOP) amounting to P94.4 million were presented as part of “Treasury
shares” account shown under the equity section of the consolidated statements of financial
position (see Note 16).
In 2015, ESOP shares reacquired by the Parent Company from its resigned employees amounting
to P6.1 million were presented as treasury shares.
c. Dividends
On February 13, 2013, Parent Company’s BOD set and approved the declaration of cash dividends
of P2,841.32 per common share amounting to P11.4 billion to all shareholders of record as at
February 4, 2013. Payments were made in tranches from February 13, 2013 up to April 5, 2013.
On June 24, 2013, during the regular meeting, the Parent Company’s BOD set and approved
the declaration of cash dividends of P241.92 per common share amounting to P1.1 billion to all
shareholders of record as at June 24, 2013. Payments were made in tranches from
July 22, 2013 up to September 27, 2013.
On November 25, 2013, during the regular meeting, the Parent Company’s BOD set and approved
shareholders of record as at November 25, 2013. Payments were made in tranches from December
10 to 26, 2013.
On February 24, 2014, during the regular meeting, the Parent Company’s BOD set and approved
shareholders of record as at February 24, 2014. Payments were made in tranches from April 2, 2014
to June 25, 2014.
On February 23, 2015, during the regular meeting, the Parent Company’s BOD set and approved
shareholders of record as at March 1, 2015. Payments were made on March 17, 2015.
d. Appropriation of Retained Earnings
On November 26, 2012, the Parent Company’s BOD approved the appropriation of P10.2 billion
for distribution of cash dividends to its stockholders. On February 13, 2013, the BOD reversed
the P2.0 billion previously appropriated for capital expenditures and declared cash dividends
amounting to P11.4 billion.

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On November 25, 2013 and February 23, 2015, the Parent Company’s BOD approved the
appropriation of its retained earnings amounting to P4.0 billion and P3.5 billion, respectively, for
various water and sewerage projects expected to be implemented in the next two years.
e. Equity Adjustments
The Parent Company has issued and redeemed preferred shares in 2008. Foreign exchange
fluctuation from date of issuance of the preferred shares to the date of notice of redemption is
issued, amounting to P351.0 million, is recognized as part of “Other equity adjustments” account
shown under the equity section of the consolidated statements of financial position.
MPIC Share-based Payment
On June 24, 2007, the shareholders of MPIC approved a share option scheme (the Plan) under
which MPIC’s directors may, at their discretion, invite executives of MPIC upon the regularization
of employment of eligible executives, to take up share option of MPIC to obtain an ownership
interest in MPIC and for the purpose of long-term employment motivation. The scheme became
effective on June 14, 2007 and is valid for 10 years. An amended plan was approved by the
stockholders on February 20, 2009.
As amended, the overall limit on the number of shares that may be issued upon exercise of
all options to be granted and yet to be exercised under the Plan must not exceed 5.0% of the
shares in issue from time to time.
The exercise price in relation to each option shall be determined by the Parent Company’s
Compensation Committee, but shall not be lower than the highest of: (i) the closing price of
the shares for one or more board lots of such shares on the PSE on the option offer date; (ii) the
average closing price of the shares for one or more board lots of such shares on the PSE for the
five business days on which dealings in the shares are made immediately preceding the option
offer date; and (iii) the par value of the shares.
MPIC allocated and set aside stock options relating to an additional 145,000,000 common shares,
of which, (a) 94,300,000 common shares were granted to its new directors and senior management
officers, as well as members of the management committee of certain MPIC subsidiaries (includes
15,200,000 common shares granted to officers of the Parent Company) at the exercise price of
P2.73 per common share on July 2, 2010 and (b) another 10,000,000 common shares were granted
at the exercise price of P3.50 on December 21, 2010 to officers of the Parent Company.
On March 8, 2011, 1,000,000 common shares were granted at the exercise price of P3.53 to
senior management of the Parent Company.
The weighted average remaining term to expiry for the share options outstanding as at
December 31, 2015 and 2014 is as follows:
2015 2014
(In Years)
Second grant − 0.5
Third grant 0.1 1.1

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The fair value of the options granted is estimated at the date of grant using Black-Scholes-
Merton formula, taking into account the terms and conditions upon which the options were
granted. The following tables list the inputs to the model used for the ESOP:
Grant dated July 2, 2010
30.0% vesting 35.0% vesting 35.0% vesting
on July 2, 2011 on July 2, 2012 on July 2, 2013
Spot price P2.65 P2.65 P2.65
Exercise price P2.73 P2.73 P2.73
Risk-free rate 4.61% 5.21% 5.67%
Expected volatility* 69.27% 67.52% 76.60%
Term to vesting (in days) 365 731 1,096
Call price P0.73 P1.03 P1.39
Grant dated December 21, 2010

on August 1, 2011 on August 1, 2012 on August 1, 2013
Risk-free rate 1.62% 2.83% 3.73%
Term to vesting (in days) 223 589 954
Grant dated March 8, 2011

on March 8, 2012 on March 8, 2013 on March 8, 2014
Risk-free rate 2.56% 4.38% 5.01%
Term to vesting (in days) 366 731 1,096
*The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is
indicative of future trends, which may also not necessarily be the actual outcome.
Starting in 2012, no additional stock option activity was received from MPIC.
Maynilad Share-based Payment

On November 23, 2015, the BOD approved the awarding of 23,777 ESOP shares to all qualified
Maynilad employees to be paid through stock purchase bonus (equity-settled transaction). The
ESOP covers employees who have met the following eligibility criteria:
a. The employee has completed a full year’s service, from November 2, 2014 to
November 1, 2015 (the “Period”);
b. The employee has obtained at least a satisfactory performance rating for the appraisal
period immediately preceding November 1, 2015;
c. The employee has not been suspended at any time during the Period;
d. The employee has not exceeded 10 days of absences without official leave during the Period; and
e. The employee has not exceeded 20 days of leave without pay during the Period.

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Communication to eligible employees was made on December 1, 2015.
The fair value of ESOP shares amounting to P6,143.22 per share was determined based on
the Parent Company’s equity value at the date of grant using the discounted cash flows (DCF)
method.
The grant of shares under the ESOP does not require an exercise price to be paid by the
employees nor are there cash alternatives. All ESOP shares will be held in treasury until issuance.
On February 9, 2016, the ESOP shares have been issued to qualified employees.
Equity-based compensation expense recognized by the Parent Company under “Salaries, wages
and benefits” account in the consolidated statements of income amounted to P146.1 million, nil
and P2.8 million in 2015, 2014 and 2013, respectively.
Carrying value of the ESOP recognized under “Other equity adjustments” in the equity section of
the consolidated statements of financial position amounted to P187.9 million and P41.8 million
as at December 31, 2015 and 2014, respectively.
14. Related Party Transactions
Parties are considered to be related if one party has the ability to control, directly or indirectly,
the other party or exercise influence over the other party in making financial and operating
decisions. Parties are considered to be related if they are subject to common control or common
significant influence.
Category Year Amount/Volume Outstanding Terms Conditions

of Transactions Receivable (Payable)
Affiliates
DM Consunji, Inc.
Revenue from water and 2015 P15.2 million P1.6 million Noninterest-bear- Unsecured
sewer services ing, settlement in
2014 9.9 million 1.2 million cash and payable
on demand
Construction costs (see 2015 952.0 million 284.6 million Noninterest-bear- Unsecured
Note 11) ing, settlement in
2014 583.2 million (1.9 million) cash and payable
on demand
Manila Electric Company
Revenue from water and 2015 6.0 million 1.0 million Noninterest-bear- Unsecured
on demand
Electricity costs 2015 776.8 million (29.6 million) Noninterest-bear- Unsecured
ing, settlement in
on demand
Indra Philippines, Inc.
Commercial outsourcing 2015 170.8 million (26.0 thousand) Noninterest-bear- Unsecured
of information technolo- ing, settlement in
gy and system services 2014 198.6 million – cash and payable
on demand
Meralco Industrial Engineering Services Corporation

Construction costs (see 2015 195.5 million (24.5 million) Noninterest-bear- Unsecured
Note 11) ing, settlement in
on demand
Philippine Long Distance Telephone Company
Revenue from water and 2015 5.4 million 0.3 million Noninterest-bear- Unsecured
on demand
Communication ex- 2015 10.8 million (0.4 million) Noninterest-bear- Unsecured
penses ing, settlement in
on demand

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Category Year Amount/Volume Outstanding Terms Conditions

of Transactions Receivable (Payable)
Others
Revenue from water and 2015 P 7.9 million P 50.5 thousand Noninterest-bear- Unsecured
on demand
Communication ex- 2015 32.4 million (73.0 thousand) Noninterest-bear- Unsecured
penses ing, settlement in
2014 25.1 million (9.8 thousand) cash and payable
on demand
Donations 2015 26.2 million – Noninterest-bear- Unsecured
ing, settlement in
2014 21.3 million – cash and payable
on demand
(Forward)
Outsourced services 2015 15.3 million (1.6 million) Noninterest-bear- Unsecured
ing, settlement in
on demand
Insurance 2015 6.5 million 10.0 thousand Noninterest-bear- Unsecured
ing, settlement in
2014 5.5 million 10.0 thousand cash and payable
on demand
Sponsorship fees 2015 25.0 thousand (25.0 thousand) Noninterest-bear- Unsecured
ing, settlement in
2014 50.0 thousand (25.0 thousand) cash and payable
on demand
Repairs and maintenance 2015 17.8 thousand – Noninterest-bear- Unsecured
ing, settlement in
2014 – – cash and payable
on demand
Terms and Conditions of Transactions with Related Parties

Outstanding balances at year-end are unsecured, interest-free, settlement occurs in cash and payable on
demand.
Total compensation and benefits of key management personnel of the Company consist of:
2015 2014 2013

Compensation P193,626 P154,325 P142,051
Pension costs 11,628 9,597 8,176
Short-term benefits 7,285 7,823 7,580
P212,539 P171,745 P157,807
15. Income Taxes

Provision for current income tax in 2015 and 2014 represents the total of the regular corporate income
tax on Phil Hydro’s net taxable income and the Parent Company’s miscellaneous income not covered by
the ITH. Provision for current income tax in 2013 represents regular corporate income tax on the Parent
Company’s miscellaneous income not covered by the ITH (see Note 20).

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The Company recognized deferred taxes on deductible (taxable) temporary differences expected to
reverse after the ITH period (see Note 20). The components of the net deferred tax assets (liability)
of the Company as at December 31, 2015 and 2014 shown in the consolidated statements of financial
position are as follows:
2015 2014
Service concession assets - net P1,031,947 P1,001,395
Accrued expenses 836,519 947,930
Unamortized debt issuance costs 119,280 119,280
Pension liability and unamortized past service cost 117,656 70,080
Allowance for inventory obsolescence 19,049 −
Unearned revenue 16,754 21,643
Unrealized foreign exchange gain (2,059) −
Allowance for doubtful accounts 428 401
P2,139,574 P2,160,729
The Company has the following deductible temporary differences for which no deferred tax assets have
been recognized since these are expected to reverse during the ITH period or management believes that
it is not probable that these will be realized in the near future:
2015 2014
Impairment loss on AFS financial assets P78,197 P30,062
Pension liability and unamortized past service cost 40,953 13,859
Share-based payment 40,199 −
Service concession assets - net − 1,781,429
Accretion of financial liabilities − 490,700
Accrued expenses − 434,390
Allowance for inventory obsolescence − 77,764
Unamortized debt issuance costs − 54,842
P159,349 P2,883,046
Service concession assets consist of concession fees and property, plant and equipment.
For income tax purposes, concession fees are amortized using UOP method while property, plant
and equipment are depreciated on a straight-line basis over the estimated useful lives or remaining
concession period whichever is shorter.
The reconciliation of provision for income tax computed at the statutory income tax rate to provision for
(benefit from) income tax as shown in the consolidated statements of income is summarized as follows:
2015 2014 2013
Income tax at statutory tax rate of 30% P2,885,377 P2,467,385 P1,958,782
Add (deduct) the tax effects of:
Net taxable income under ITH (see Note 20) (2,405,872) (2,077,981) (1,806,223)
Change in unrecognized net deferred tax assets and others (817,109) (380,601) (502,751)
Write-off of deferred tax assets relating to accrued expenses 414,913 − −
Interest income already subjected to final tax (40,468) (24,385) (27,172)
Other nondeductible items and others 30,456 (15,088) (29,578)
Provision for (benefit from) income tax P67,297 (P30,670) (P406,942)
16. Employee Benefits
LTIP
The Parent Company has approved an LTIP for its managers and executives which is based on profit
targets for the covered Performance Cycle of 2013 to 2015.
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The total cost of the LTIP recognized by the Parent Company in 2015, 2014 and 2013 which is presented
as part of “Salaries, wages and benefits” account in the consolidated statements of income amounted to
P149.8 million, P130.9 million and P148.3 million, respectively. Accrued LTIP amounting to P429.0 million
as at December 31, 2015 and P279.2 million as at December 31, 2014 were respectively presented as part
of “Trade and other payables” account and “Other noncurrent liabilities” account in the consolidated
statements of financial position.
Pension Plan
Maynilad
The Parent Company has a funded, noncontributory and actuarially computed pension plan covering
substantially all of its employees. The benefits are based on years of service and compensation during the
last year of employment.
In line with its strategic goal to improve operational efficiency, the Parent Company offered a Redundancy
and Right-Sizing Program in 2014. The redundancy program offered a separation package based on the
number of years, or fractions thereof, on a pro-rated basis, of service with the Company plus monetary
equivalent of some benefits. This resulted to a curtailment gain of P257.3 million.
Changes in net defined benefit liability of funded funds in 2015 are as follows:
Present value of Fair value of plan Net defined

defined benefit assets benefit liability
obligation
At December 31, 2014 P893,364 P612,327 P281,037
Net benefit cost in the consolidated statement of income:
Current service cost 81,136 – 81,136
Net interest 39,576 27,126 12,450
1,014,076 639,453 374,623
Benefits paid (16,653) (16,653) –
Remeasurements in other comprehensive income:
Interest income (excluding amount included in net interest) – (17,920) 17,920
Actuarial changes arising from changes in financial assumptions 23,033 – 23,033
23,033 (17,920) 40,953
At December 31, 2015 P1,020,456 P604,880 P415,576
Changes in net defined benefit liability of funded funds in 2014 are as follows:
Present value of Fair value of Net defined

defined benefit plan assets benefit liability
obligation
At January 1, 2014 P998,362 P805,463 P192,899
Net benefit cost in the consolidated statement of income:
Current service cost 87,799 – 87,799
Curtailment gain (257,341) – (257,341)
Net interest 46,316 32,680 13,636
875,136 838,143 36,993

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Net benefit cost in the consolidated statement of income (Carried Forward):
875,136 838,143 36,993
Benefits paid (2,854) (2,854) –
Settlements – (262,961) 262,961
Remeasurements in other comprehensive income:
Interest income (excluding amount included in net interest) – 39,999 (39,999)
Actuarial changes arising from changes in financial assumptions 21,082 – 21,082
21,082 39,999 (18,917)
At December 31, 2014 P893,364 P612,327 P281,037
The maximum economic benefit available is a combination of expected refunds from the plan and
reductions in future contributions.
The fair value of plan assets by each class as at the end of the reporting period are as follows:
2015 2014
Investments in:
Government securities P273,937 P304,401
Equity securities 226,292 268,743
Unit trust funds 17,195 16,058
Loans/notes receivable 2,970 2,980
Cash and cash equivalents 2,110 2,117
Receivables and others 82,376 18,028
P604,880 P612,327
The plan asset’s carrying amount approximates its fair value since the plan assets are short-term in nature
or marked-to-market. All equity and debt instruments held have quoted prices in active market. The
remaining plan assets do not have quoted market prices in active market.
The plan assets have diverse investments and do not have any concentration risk.
As at December 31, 2015, the plan assets consist of the following:
• Investments in government securities consist primarily of fixed-rate treasury notes and retail treasury
bonds that bear interest ranging from 2.13% to 9.5% per annum and have maturities from 2015 to 2035.
• Investments in equity securities are composed of investment in shares of various listed entities. The
carrying amounts of investments in equity securities also approximate their fair values since they are
marked-to-market.
• Unit trust funds include mutual funds invested in quoted shares.
• Loans and notes receivables include unsecured fixed-rate notes of a related party and unsecured
notes of an unaffiliated company. The notes bear interest ranging from 6.26% to 6.73%.
• Cash and cash equivalents include regular savings and time deposits, which bear interest at 5.50%
per annum.
• Receivables and others include certificate of deposit with a term of 7 years and bear interest at 5.25%.
The cost of defined benefit pension plans and other post-employment benefits as well as the present
value of the pension obligation are determined using actuarial valuations. The actuarial valuation
involves making various assumptions. The principal assumptions used in determining pension and post-
employment benefit obligations for the defined benefit plans are shown below:
2015 2014
Discount rate 4.86% 4.43%
Salary increase rate 4.00% 4.00%
Turnover rate 0.78% 0.80%

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In 2015, the sensitivity analysis below has been determined based on reasonably possible changes of each
significant assumption on the defined benefit obligation as at the end of the reporting period, assuming
all other assumptions were held constant:
Increase (decrease) in Basis Points Amount
Discount rate 100 (P86,880)
(100) 102,676
Salary increase rate 100 97,507
(100) (84,141)
Turnover rate 100 (10,293)
(78) 8,376
Shown below are the maturity analyses of the undiscounted benefit payments:
2015
Normal Retirement Other than Normal Retirement Total
Less than one year P37,216 P7,992 P45,208
More than one year to five years 315,305 49,396 364,701
More than 5 years to 10 years 732,021 71,902 803,923
More than 20 years 3,137,143 258,263 3,395,406
P4,807,931 P521,389 P5,329,320
2014
Normal Retirement Other than Normal Retirement Total
Less than one year P25,317 P6,915 P32,232
More than one year to five years 185,228 44,609 229,837
More than 20 years 2,882,441 262,462 3,144,903
P4,428,290 P515,105 P4,943,395
There are no expected contributions to the defined benefit pension plan in 2016.
Phil Hydro
Phil Hydro recognized pension liability amounting to P0.7 million and P0.8 million in 2015 and 2014, respectively,
in the consolidated statements of financial position determined in accordance with Republic Act 7641.
17. Interest Expense and Other Financing Charges

2015 2014 2013
Bank loans (see Note 10) P1,346,163 P1,453,080 P1,377,285
Accretion on service concession obligation payable to MWSS 622,425 696,904 716,605
(see Note 12)
Amortization of debt issuance costs (see Note 10) 8,670 6,595 18,553
Accretion on financial liabilities 6,030 6,897 17,133
Loan refinancing costs – – 441,375
P1,983,288 P2,163,476 P2,570,951

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18. Basic/Diluted Earnings Per Share
2015 2014 2013
Net income (a) P9,550,627 P8,255,288 P6,936,214
Weighted average number of shares at beginning of year 4,460,428 4,472,762 4,004,032
Add weighted average number of additional issuances (see Note 13) − − 469,078
Less weighted average number of treasury shares (see Note 13) 23,465 12,334 348
Weighted average number of shares at end of year for basic earnings 4,436,963 4,460,428 4,472,762
per share (b)
Add weighted average potential dilutive shares from ESOP (see Note 13) 1,981 − −
Weighted average number of shares at end of year for diluted earnings 4,438,944 4,460,428 4,472,762
per share (c)
Basic earnings per share (a/b) P2,152.51 P1,850.78 P1,550.77
Diluted earnings per share (a/c) P2,151.55 P1,850.78 P1,550.77
19. Contingent Liabilities
Following are the significant contingent liabilities of the Company as at December 31, 2015 and 2014:
a. Additional Tranche B Concession Fees and interest penalty are being claimed by MWSS in
excess of the amount recommended by the Receiver. Such additional charges being claimed
by MWSS (in addition to other miscellaneous claims) amounted to P5.1 billion and P5.0 billion
as at December 31, 2015 and 2014, respectively. The Rehabilitation Court has resolved to deny
and disallow the said disputed claims of MWSS in its December 19, 2007 Order, upholding the
recommendations of the Receiver on the matter. Following the termination of the Parent
Company’s rehabilitation proceedings, the Parent Company and MWSS sought to resolve this
matter in accordance with the dispute requirements of the TCA (see Note 12).
b. On October 13, 2005, the Parent Company and Manila Water (the “Concessionaires”) were
jointly assessed by the Municipality of Norzagaray, Bulacan for real property taxes on certain
common purpose facilities purportedly due from 1998 to 2005 amounting to P357.1 million. It
is the position of the Concessionaires that it is the Republic of the Philippines that owns these
properties, and is therefore, exempt from taxation.
The supposed joint liability of the Concessionaires for real property tax, including interests,
amounted to about P1.0 billion as at December 31, 2015.
After the Local Board of Assessment Appeals (LBAA) ruled in favor of the Municipality of
Norzagaray, Bulacan, the Concessionaires elevated the ruling of the LBAA to the Central Board
of Assessment Appeals (CBAA) by filing separate appeals. As at February 17, 2016, the case is
still pending.
c. The Parent Company is a party to various civil and labor cases relating to breach of contracts
with damages, illegal dismissal of employees, and nonpayment of backwages, benefits and
performance bonus, among others.
20. Registration with the Board of Investments (BOI)
Maynilad
The Parent Company is registered with the BOI under Executive Order No. 226, as amended, as a new
operator of water supply and sewerage system for the West Service Area on a pioneer status.
The registration entitles the Parent Company to incentives which include, among others, an ITH for a
period of six years beginning on Commencement Date or from actual start of commercial operations,
whichever comes first.

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On April 16, 2008, the BOI granted the request of the Parent Company for the extension of the period for
the ITH availment from August 2001 – July 2007 to January 2003 – December 2008.
On October 20, 2008, the Parent Company filed an application for an ITH bonus year. The application was
for the extension of the availment of the ITH incentive by the Parent Company for one (1) year or for the
period January 1, 2009 to December 31, 2009. The BOI approved the Parent Company’s application on
December 22, 2008.
On December 3, 2009, the Parent Company was issued with BOI Certificate of Registration
No. 2009-171 as a new operator of the 200 million liters per day (MLD) Bulk Water Supply and Distribution
Project (Putatan, Muntinlupa). On December 16, 2009, Certificates of Registration Nos. 2009-188 and
2009-189 as a new operator of the 1500 MLD and 900 MLD Bulk Water Supply and Distribution Projects
pertaining to the La Mesa Treatment Plants 1 and 2, respectively, were likewise issued by the BOI. The
registrations entitle the Parent Company to incentives which include an ITH for six years commencing
on January 2010 or actual start of commercial operations, whichever is earlier, but in no case earlier than
the date of registration. Commercial operations of the 1500 MLD and 900 MLD Bulk Water Supply and
Distribution Projects started on January 1, 2010 while the 200 MLD Project started on January 1, 2011.
The ITH for all these projects is set to expire on December 31, 2015. The ITH incentives shall be limited to
the sales/revenue generated from the operation of the three plants which substantially cover the total
capacity of the Parent Company. ITH incentive enjoyed by the Company amounted to P2,405.9 million,
P2,078.0 million and P1,806.2 million in 2015, 2014 and 2013, respectively (see Note 15).
Phil Hydro
On November 22, 2007, Phil Hydro’s operations in Legazpi City were registered with the BOI as New Bulk
Supplier of Treated Water on a pioneer status under Omnibus Investments Code of 1987 (the Code).
Subject to certain conditions and requirements, Phil Hydro’s operations in Legazpi City are entitled to the
following benefits, among others:
a. ITH for six years until December 31, 2013 limited to the revenue generated from the sales of
bulk water supply to LCWD representing the value of transactions as covered by the registration;
b. Employment of foreign nationals for supervisory, technical or advisory positions for five years;
c. Importation of consigned equipment for a period of 10 years from date of registration, subject
to the posting of re-export bond; and
d. Importation of capital equipment at 0% duty from date of registration up to June 16, 2011.
For (d) above, Phil Hydro has not imported any capital equipment in 2015, 2014 and 2013.
On December 18, 2009, the BOI approved Phil Hydro’s another application for ITH for the operations in
Norzagaray, Bulacan as New Operator of Bulk Water Supply Facility (Water Filtration Plant) on a non-
pioneer status under the Code. As a registered enterprise, Phil Hydro is entitled to the following benefits,
among others, subject to certain conditions and requirements:
a. ITH for four years until December 31, 2013 limited to the revenue generated from the registered
bulk water supply facility with NWD; and
b. Importation of capital equipment at 0% duty from date of registration up to June 16, 2011.
For (b) above, Phil Hydro has not imported any capital equipment in 2015, 2014 and 2013.

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21. Significant Contracts with Manila Water (East Concessionaire)
In relation to the Concession Agreement, the Parent Company entered into the following contracts with
the East Concessionaire:
a. Interconnection Agreement wherein the two Concessionaires shall form an unincorporated joint
venture that will manage, operate, and maintain interconnection facilities. The terms of the
agreement provide, among others, the cost and the volume of water to be transferred between
zones; and
b. Common Purpose Facilities Agreement that provides for the operation, maintenance, renewal,
and, as appropriate, decommissioning of the Common Purpose Facilities, and performance of
other functions pursuant to and in accordance with the provisions of the Concession Agreement
and performance of such other functions relating to the Concession (and the Concession of
the East Concessionaire) as the Parent Company and the East Concessionaire may choose to
delegate to the Joint Venture, subject to the approval of MWSS.
22. Commitments
Concession Agreement
Significant commitments under the Concession Agreement follow:
a. Payment of Concession Fees (see Note 7)
b. Posting of performance bond (see Note 6)
Under Section 6.9 of the Concession Agreement, the Parent Company is required to post a
performance bond to secure the performance of its obligations under certain provisions of the
Concession Agreement. The aggregate amount drawable in one or more installments under such
performance bond during the Rate Rebasing Period to which it relates is set out below.
Rate Rebasing Period Aggregate Amount Drawable Under Performance Bond

(In Millions)
First (August 1, 1997 – December 31, 2002) US$120.0
Second (January 1, 2003 – December 31, 2007) 120.0
Third (January 1, 2008 – December 31, 2012) 90.0
Fourth (January 1, 2013 – December 31, 2017) 80.0
Fifth (January 1, 2018 – May 6, 2022) 60.0
Within 30 days from the commencement of each renewal date, the Parent Company shall cause
the performance bond to be reinstated to the full amount applicable to the rate rebasing period
as set forth above.
In connection with the extension of the term of the Concession Agreement (see Note 1), certain
adjustments to the obligation of the Parent Company to post the performance bond under
Section 6.9 of the Concession Agreement have been approved and summarized as follows:
• The aggregate amount drawable in one or more installments under each performance bond
during the Rate Rebasing Period to which it relates has been adjusted to US$30.0 million
until the Expiration Date.
• The amount of the Performance Bond for the period covering 2023 to 2037 shall be
mutually agreed upon in writing by the MWSS and the Parent Company consistent with the
provisions of the Concession Agreement.
132
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• The Parent Company posted the Surety Bond for the amount of US$90.0 million issued by
Prudential Guarantee and Assurance, Inc. (the Surety) in favor of MWSS, as security for the
Parent Company’s proper and timely performance of its obligations under the Concession
Agreement. On December 6, 2012, the Parent Company renewed the Surety Bond for the
amount of US$80.0 million issued by the Surety in favor of MWSS. The liability of the Surety
under this bond will expire on December 31, 2017 (see Note 6).
c. Payment of half of MWSS and MWSS-RO’s budgeted expenditures for the subsequent years,
provided the aggregate annual budgeted expenditures do not exceed P200.0 million, subject
to CPI adjustments. As a result of the extension of the life of the Concession Agreement, the
annual budgeted expenditures shall increase by 100%, subject to CPI adjustments, effective
January 2010 (see Notes 1 and 7).
d. To meet certain specific commitments in respect to the provision of water and sewerage services
in the West Service Area, unless modified by the MWSS-RO due to unforeseen circumstances.
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 West Service Area 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 Concession Agreement.
h. Non-incurrence of debt or liability that would mature beyond the term of the Concession
Agreement, without prior notice to MWSS.
Failure of the Parent Company to perform any of its obligations under the Concession Agreement of a kind
or to a degree which, in a reasonable opinion of the MWSS-RO, amounts to an effective abandonment of
the Concession Agreement and which failure continues for at least 30 days after written notice from the
MWSS-RO, may cause the Concession Agreement to be terminated.
Operating Lease Commitments

The Company leases the office space and branches where service outlets are located, equipment and
service vehicles, renewable under certain terms and conditions to be agreed upon by the parties. Total
rent expense for the above operating leases amounted to P150.6 million, P167.7 million and P158.9 million
in 2015, 2014 and 2013, respectively (see Note 23).
Future minimum operating lease payments as at December 31 are as follows:

Period Covered 2015 2014
(In Millions)
Not later than one year P94.83 P111.58
More than one year and not later than five years 207.53 154.30
More than five years 169.48 170.31

-133
23. Assets Held in Trust
Materials and Supplies

The Parent Company has the right to use any items of inventory owned by MWSS in carrying out its
responsibility under the Concession Agreement, subject to the obligation to return the same at the end
of the concession period, in kind or in value at its current rate, subject to CPI adjustments.
Facilities
The Parent Company has been 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. MWSS shall retain legal title to all movable property in existence at the
Commencement Date. However, 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 (see Note 7).
The Concession Agreement also provides the Parent Company and the East Concessionaire to have equal
access to MWSS facilities involved in the provision of water supply and sewerage services in both West
and East Service Areas 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 P7.3 billion with a sound value of P13.8 billion.
Beginning at the Commencement Date, MWSS’ corporate headquarters were made available for a one-
year lease to the Parent Company and the East Concessionaire, subject to yearly renewal with the consent
of the parties concerned. As at December 31, 2015, the lease has been renewed for another year. Rent
expense amounted to P38.0 million in 2015 and 2014 and P33.8 million in 2013 (see Note 22).
24. Financial Risk Management Objectives and Policies

The Company’s principal financial instruments are its debts to the local banks and concession fees payable
to MWSS per Concession Agreement. Other financial instruments of the Company are purchase contracts,
cash and cash equivalents and short-term investments. The main purpose of those financial instruments
is to finance the Company’s operations.
The main risks arising from the Company’s principal financial instruments are interest rate risk, foreign
currency risk, credit risk and liquidity risk.
The BOD reviews and approves the policies for managing the Company’s financial risks. The Company
monitors risks arising from all financial instruments and regularly reports financial management activities
and the results of these activities to the BOD.
Interest Rate Risk

Interest rate risk is the risk that the future cash flows of financial instruments will fluctuate because of
the changes in market interest rates. The Company’s exposure to market risk for changes in interest rates
relates primarily to the Company’s interest-bearing loans.
The Company maintains a mix of floating and fixed rate interest-bearing loans, currently at a ratio of 8%
floating and 92% fixed per abovementioned loan agreements. The floating rate interest-bearing loans
will increase to a higher portion over time because of future drawdowns in connection to the MWMP loan
agreement.

-
134

The following table shows the Company’s significant financial liabilities that are exposed to cash flow
interest rate risk:
P21.2 billion Term Loan Fixed rate benchmark+0.75%
(5.75%, March 25, 2013 to March 25, 2018)
P5.0 billion Corporate Notes Fixed rate benchmark+0.75%
(1st drawdown) (5.75%, April 29, 2013 to April 29, 2018)
P5.0 billion Corporate Notes Fixed rate benchmark+0.75%
(2nd drawdown) (5.75%, October 29, 2013 to October 29, 2018)
US$137.5 million Loan Floating rate benchmark+1.25%
(US$42.9 million drawdown) (2.40%, November 15, 2015 to May 15, 2016)
P5.2 billion Corporate Notes Fixed rate benchmark
(1st drawdown) (6.00%, March 2, 2015 to March 2, 2035)
Peso-denominated Bank Loan Fixed rate benchmark
(5.50%, June 29, 2015 to June 29, 2025)
Interest on financial liabilities classified as fixed rate is fixed until the maturity of the instrument.
The following tables show information about the Company’s financial liabilities that are exposed to cash
flow and fair value interest rate risks.
2015
Within 1 Year Total
Short-term cash investments:
Cash and cash equivalents (1-90 days)* P3,069,280 P3,069,280
Short-term investments (91-364 days) 6,088,541 6,088,541
P9,157,821 P9,157,821
*Excludes cash on hand amounting to P23,732.
2015
Within 1 Year More than 1 Year Total - Gross Total - Gross
(In US$) (In P)
Liabilities:
Interest-bearing loans:
Interest rate 5.75% 5.75%, 2.40% and 6.00%
Current - local P1,742,164 – – P1,742,164
Noncurrent - foreign – $42,084 $42,084 1,980,458
Noncurrent - local – P21,356,717 – 21,356,717
25,079,339
Service concession obligation payable to MWSS:
Interest rate 8.21%
Current - foreign $9,244 – $9,244 435,008
Current - local P922,697 – – 922,697
Noncurrent - foreign – $85,617 85,617 4,029,148
8,094,862
P 33,174,201

-135
2014
Within 1 Year Total
Short-term cash investments:
Cash and cash equivalents (1-90 days)* P4,147,586 P4,147,586
Short-term investments (91-364 days) 2,915,000 2,915,000
P7,062,586 P7,062,586
*Excludes cash on hand amounting to P40,952.
2014
Within 1 Year More than 1 Year Total - Gross Total - Gross
(In US$) (In P)
Liabilities:
Interest-bearing loans:
Interest rate 5.75% 5.75%, 2.40% and 6.00%
Current - local P1,692,163 – – P1,692,163
Noncurrent - foreign – $13,957 $13,957 624,175
24,201,411
Service concession obligation payable to MWSS:
Interest rate 3.0%
Current - foreign $3,880 – $3,880 173,510
Current - local P920,868 – – 920,868
Noncurrent - foreign – $96,529 96,529 4,316,792
8,135,343
P32,336,754
The following table demonstrates the sensitivity of the Company’s profit before tax to a reasonably
possible change in interest rates for the years ended December 31, 2015 and 2014, with all variables
held constant (through the impact on floating rate borrowings). The estimates are based on the
management’s annual financial forecast. There is no impact on the Company’s equity other than those
already affecting income.
2015
Increase/Decrease in Basis Points Effect on Income Before Tax
Floating rate borrowings +50 (P9,902)
-50 9,902
2014
Increase/Decrease in Basis Points Effect on Income Before Tax
Floating rate borrowings +50 (P3,121)
-50 3,121
Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future value of financial instruments will fluctuate
because of changes in foreign exchange rates.
The Company’s foreign currency risk results primarily from movements of the Philippine Peso against the
United States Dollar, European Euro and the Japanese Yen. The servicing of foreign currency denominated
loans of MWSS is among the requirements of the Concession Agreement. Revenues are generated in
Philippine Peso. However, there is a mechanism in place as part of the Concession Agreement wherein the
Company (or the end consumers) can recover currency fluctuations through the FCDA that is approved by
the Regulatory Office.
136
-

Information on the Company’s foreign currency-denominated monetary assets and liabilities and the
Philippine Peso equivalent of each as at December 31, 2015 and 2014 is presented as follows:
2015
US Dollar Euro JPY Total Peso Equivalent
Asset
Cash and cash equivalents, short term invest- $6,346 €– ¥– P298,664
ments and sinking fund
Liabilities
Interest-bearing loans ($42,084) €– ¥– (P1,980,458)
Service concession obligation payable to MWSS (84,589) (33) (1,228,775) (4,464,156)
(126,673) (33) (1,228,775) (6,444,614)
Net foreign currency denominated liabilities ($120,327) (€33) (¥1,228,775) (P6,145,950)
The spot exchange rates used were P47.06:US$1, P51.74:EUR1, and P0.39:JPY1 as at December 31, 2015.
2014
US Dollar Euro JPY Total Peso Equivalent
Asset
Cash and cash equivalents, short-term invest- $5,054 €– ¥– P226,012
ments and sinking fund
Liabilities
Interest-bearing loans ($14,823) €– ¥– (P662,902)
Service concession obligation payable to MWSS (92,802) (438) (855,090) (4,490,302)
(107,625) (438) (855,090) (5,153,204)
Net foreign currency denominated liabilities ($102,571) (€438) (¥855,090) (P4,927,192)
The spot exchange rates used were P44.72:US$1, P54.34:EUR1, and P0.37:JPY1 as at December 31, 2014.
The following table demonstrates the sensitivity to a reasonably possible change in foreign exchange
rates, with all variables held constant, of the Company’s profit before tax (due to changes in the fair value
of monetary assets and liabilities) and equity as at December 31, 2015 and 2014. The estimates in the
movement of the foreign exchange rates were based on the management’s annual financial forecast.
Increase/Decrease in Peso and Foreign Exchange Effect on Income
U.S Dollar, Euro and JPY Exchange Rates Rate Before Income Tax
2015
U.S Dollar +1% 47.06 (P56,626)
Euro +1% 51.74 (17)
JPY +1% 0.39 (4,792)
U.S Dollar -1% 47.06 56,626
Euro -1% 51.74 17
JPY -1% 0.39 4,792
Increase/Decrease in Peso and Foreign Exchange Rate Effect on Income Before

U.S Dollar, Euro and JPY Exchange Rates Income Tax
2014
U.S Dollar +1% 44.72 (P45,870)
Euro +1% 54.34 (238)
JPY +1% 0.37 (3,164)
U.S Dollar -1% 44.72 45,870
Euro -1% 54.34 238
JPY -1% 0. 37 3,164

-137
The Company recognized net foreign exchange gain of P152.7 million and P112.6 million in 2015 and
2014, respectively, mainly arising from the translation of the Company’s cash and cash equivalents, short-
term investments, deposits, interest-bearing loans and service concession obligation payable to MWSS.
However, the net foreign exchange gain/loss on interest-bearing loans and service concession obligation
payable to MWSS is subject to foreign exchange recovery mechanisms under the Concession Agreement
(see Note 2).
Credit Risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss.
The Company trades only with recognized, creditworthy third parties. It is the Company’s policy that
except for connection fees and other highly meritorious cases, it does not offer credit terms to its
customers. Because of the basic need service it provides, historical collections of the Company are
relatively high. Credit exposure is widely dispersed. Receivable balances are monitored on an ongoing
basis with the result that the Company’s exposure to bad debts is not significant.
With respect to credit risk arising from the other financial assets of the Company, consisting of cash and
cash equivalents, short-term cash investments, deposits and sinking fund and miscellaneous deposits,
the Company’s exposure to credit risk arises from default of the counterparty, with a maximum exposure
equal to the carrying amount of these instruments. The Company transacts only with institutions or
banks which have demonstrated financial soundness for the past five years.
The Company has no significant concentrations of credit risk.
The table below shows the maximum exposure to credit risk for the components of the consolidated
statements of financial position as at December 31, 2015 and 2014:
2015 2014
Cash and cash equivalents* (see Note 4) P3,069,280 P4,147,586
Short-term investments 6,088,541 2,915,000
Trade and other receivables - net (see Note 5) 2,428,812 2,048,550
Deposits and sinking fund (see Note 6) 1,914,093 1,884,781
Miscellaneous deposits** 220,016 206,202
Total credit risk exposure P13,720,742 P11,202,119
*Excludes cash on hand amounting to P23,732 and P40,952 as at December 31, 2015 and 2014, respectively.
**Included as part of “Other noncurrent assets” in the consolidated statements of financial position.
As at December 31, 2015 and 2014, the credit quality per class of financial assets that were neither past
due nor impaired are as follows:
2015
Neither Past Due nor Impaired Past Due but Impaired Total
not Impaired
High Grade Standard
Cash and cash equivalents* P3,069,280 P– P– P– P3,069,280
Short-term investments 6,088,541 – – – 6,088,541
Trade and other receivables 2,166,300 160,752 101,760 1,030,624 3,459,436
Deposits and sinking fund 1,914,093 – – – 1,914,093

Miscellaneous deposits** – 220,016 – – 220,016
P13,238,214 P380,768 P101,760 P1,030,624 P14,751,366

-
138

2014
Neither Past Due nor Impaired Past Due but Impaired Total
not Impaired
High Grade Standard
Cash and cash equivalents* P4,147,586 P– P– P– P4,147,586
Short-term investments 2,915,000 – – – 2,915,000
Trade and other receivables 1,566,262 373,303 108,985 1,267,971 3,316,521
Deposits and sinking fund 1,884,781 – – – 1,884,781
Miscellaneous deposits** – 206,202 – – 206,202
P10,513,629 P579,505 P108,985 P1,267,971 P12,470,090
Past due accounts amounting to P101.8 million and P109.0 million as at December 31, 2015 and 2014,
respectively, are not impaired since based on the Company’s experience, these receivables are normally
collected the following year.
The credit quality of the financial assets was determined as follows:
Cash and cash equivalents, short-term investments, and deposits and sinking fund are placed in various
banks. These are held by large prime financial institutions that have good reputation and low probability
of insolvency. Management assesses the quality of these financial assets as high grade.
For trade and other receivables, high grade relates to those which are consistently collected before the
maturity date, normally seven days from bill delivery. Standard grade includes receivables from customers
that are collectible beyond seven days from bill delivery even without an effort from the Company
to follow them up, or those advances from officers and employees that are collected through salary
deduction. For miscellaneous deposits, standard grade consists of meter and security deposits that are
normally refundable upon termination of service.
Liquidity Risk
Liquidity risk is the potential for not meeting the obligations as they become due because of an inability
to liquidate assets or obtain adequate funding.
The Company monitors its risk to a shortage of funds using a recurring liquidity planning. Cash planning
considers the maturity of both its financial investments and financial assets (e.g., trade and other
receivables, other financial assets) and projected cash flows from operations.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through
the use of bank drafts, bank loans, debentures, preference shares, finance leases and hire purchase
contracts.

-139
The tables below summarize the maturity profile of the Company’s financial liabilities as at December 31,
2015 and 2014 based on contractual undiscounted payments.
2015
On Demand Due Within 3 Due Between 3 Due after 12 Total
Months and 12 Months Months
Interest-bearing loans* P– P1,100,226 P972,157 P23,337,175 P25,409,558
Trade and other payables** 1,045,691 2,804,270 2,222,174 4,649,417 10,721,552
Service concession obligation – – 1,357,705 6,737,157 8,094,862
payable to MWSS
Customers’ deposits – – – 828,077 828,077
P1,045,691 P3,904,496 P4,552,036 P35,551,826 P45,054,049
*Principal plus interest payment
**Excludes taxes payable and interest payable
2014
On Demand Due Within 3 Due Between 3 Due after 12 Total
Months and 12 Months Months
Interest-bearing loans* P– P1,134,467 P897,596 P22,509,248 P24,541,311
Trade and other payables** 545,559 1,492,657 2,941,583 4,746,646 9,726,445
Service concession obligation – – 1,094,378 7,040,965 8,135,343
payable to MWSS
Customers’ deposits – – – 752,526 752,526
P545,559 P2,627,124 P4,933,557 P35,049,385 P43,155,625
*Principal plus interest payment

**Excludes taxes payable and interest payable
The table below shows the maturity profile of the Company’s financial assets based on contractual
undiscounted cash flows as at December 31, 2015 and 2014:
2015
On Demand Due Within 3 Due Between 3 and Due after 12 Total
Months 12 Months Months
Cash and cash P982,790 P2,110,222 P– P– P3,093,012
equivalents
Short-term – – 6,088,541 – 6,088,541
investments
Trade and other 2,039,961 230 388,621 – 2,428,812
receivables
Deposits and 1,773,843 – 140,250 – 1,914,093
sinking fund
AFS financial assets 132,387 – – – 132,387
Miscellaneous – – – 220,016 220,016
deposits
P4,928,981 P2,110,452 P6,617,412 P220,016 P13,876,861
2014
On Demand Due Within 3 Due Between 3 and Due after 12 Total
Months 12 Months Months
Cash and cash P828,137 P3,360,401 P– P– P4,188,538
equivalents
Short-term – – 2,915,000 – 2,915,000
investments
Trade and other 1,675,247 33,275 340,028 – 2,048,550
receivables
Deposits and 1,746,491 – 138,290 – 1,884,781
sinking fund
AFS financial assets 110,377 – – – 110,377
Miscellaneous – – – 206,202 206,202
deposits
P4,360,252 P3,393,676 P3,393,318 P206,202 P11,353,448
140
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Capital Management
The primary objective of the Company’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 Company closely manages its capital structure vis-a-vis a certain target gearing ratio, which is net
debt divided by total capital plus net debt. The Company’s target gearing ratio is 75%. This target is
to be maintained over the next five years by managing the Company’s level of borrowings and dividend
payments to shareholders.
For purposes of computing its net debt, the Company includes the outstanding balance of its long-term
interest-bearing loans, service concession obligation payable to MWSS and trade and other payables,
less the outstanding cash and cash equivalents, short-term investments, deposits and sinking fund. To
compute its capital, the Company uses net equity.
2015 2014
Interest-bearing loans and service concession obligation payable to MWSS (see Notes 10 P33,174,201 P32,336,754
and 12)
Trade and other payables (see Note 11) 11,327,222 10,333,720
Less cash and cash equivalents, short-term investments, deposits and sinking fund (see (11,095,646) (8,988,319)
Notes 4 and 6)
Net debt (a) 33,405,777 33,682,155
Net equity 35,538,655 27,867,031
Net equity and debt (b) P68,944,432 P61,549,186
Gearing ratio (a/b) 48% 55%
For purposes of monitoring debt ratio covenants, the Company computes using both interest-bearing
debt and total liabilities. The Company closely monitors its debt covenants and maintains a capital
expenditure program and dividend declaration policy that keeps the compliance of these covenants
into consideration.
25. Financial Assets and Financial Liabilities
The following table summarizes the carrying values and fair values of the Company’s financial assets and
financial liabilities as at December 31, 2015 and 2014:
2015 2014
Carrying Value Fair Value Carrying Value Fair Value
Financial Assets
Loans and receivables -
Miscellaneous deposits P220,016 P171,339 P206,202 P159,622
(included under “Other
noncurrent assets”
account)
Financial Liabilities
Other financial liabilities:
Interest-bearing loans P25,079,339 P26,959,364 P24,201,411 P27,749,815
Service concession obli- 8,094,862 9,569,586 8,135,343 9,967,797
gation payable to MWSS
Customers’ deposits 244,434 271,883 219,945 648,896
P33,418,635 P36,800,833 P32,556,699 P38,366,508

-141
The following methods and assumptions were used to estimate the fair value of each class of financial
assets and financial liabilities for which it is practicable to estimate such value:
Cash and Cash Equivalents, Short-term Investments, Trade and Other Receivables, Deposits and Sinking Fund,
and Trade and Other Payables. Due to the short-term nature of these transactions, the carrying values
approximate the fair values as at the reporting date.
AFS Financial Assets. Fair value is equivalent to the carrying value because the Company’s AFS financial
assets pertain to unquoted equity investments.
Interest-bearing Loans. For floating rate loans, the carrying value approximates the estimated fair value as
at the reporting date due to quarterly repricing of interest rates. For fixed rate loans, the estimated fair
value is based on the discounted value of future cash flows using the applicable rates for similar types of
financial instruments.
Miscellaneous Deposits, Service Concession Obligation Payable to MWSS and Customers’ Deposits. Estimated
fair value is based on the discounted value of future cash flows using the applicable rates for similar types
of financial instruments.
The fair values of fixed rate interest-bearing loans, miscellaneous deposits, service concession obligation
payable to MWSS and customers’ deposits are determined using Fair Value Hierarchy Level 3.
26. Supplemental Disclosure of Cash Flow Information
In 2015, the noncash operating activities pertain to unpaid concession fees amounting to
P500.0 million and effect of change in rebased rate amounting to P632.3 million (see Note 7).
27. Events After the Reporting Period
On January 25, 2016, during the regular meeting, the Parent Company’s BOD set and approved the
declaration of cash dividends amounting to P2.0 billion to all shareholders of record as at February 9, 2016.
142
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MWSS Compound, Katipunan Ave.,
Balara, Quezon City, Philippines
www.mayniladwater.com.ph
Tel.No: 981 3333

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1 Company Profile

Who we are Our Vision

What we do solutions that enable those we serve to lead healthier,

We provide our customers with piped-in water supply

Aside from delivering potable water, we also provide

After developing valuable expertise in Non-Revenue

From Basic Utility to Water Solutions Company

Towards the end of 1997, Maynilad struggled to meet

In 2005, Benpres and Suez ceded management and

Since its re-privatization, Maynilad has spent over Entrepreneurship

Love for Country

Maynilad Water Services, Inc. 2015 Annual Report

From Basic Utility to Water Solutions Company

Maynilad Water Services, Inc. 2015 Annual Report

Non-Revenue Water Billed Services

2013 38.71 2013 1,129,497

2014 33.92 2014 1,190,062

2015 31.01 2015 1,265,625

24-Hour Water Supply

Consolidated Net Income

Consolidated Core Net Income

Maynilad Water Services, Inc. 2015 Annual Report

Asia-Pacific Stevie Awards. Maynilad

Sanitation Safety Plan (SSP). Maynilad

From Basic Utility to Water Solutions Company

International water seminar. Maynilad,

KAAGAPAY Awards. LANDBANK’s Gawad

Maynilad Water Services, Inc. 2015 Annual Report

The challenges and successes that we experienced

“Higit sa tubig ang aming serbisyo,” we now say.

In 2015, we rose to the occasion and showed everyone

These gains were a result of our financial stewardship.

Notwithstanding the water supply reductions due

Maynilad Water Services, Inc. 2015 Annual Report

Even with a favorable ruling in December 2014, we have

In addition, the ASEAN Corporate Sustainability Awards

From Basic Utility to Water Solutions Company

Movements and outlook

On behalf of the Board members, we wish him well in his

Ramoncito S. Fernandez, formerly the President and

As we approach the tail end of our first decade since

Maynilad Water Services, Inc. 2015 Annual Report

Year 2015 was another growth year in terms of billed

Despite the very tough situation of the past few years,

Meeting service commitments

Because of the effects of El Niño, service level dipped

From Basic Utility to Water Solutions Company

Maynilad Water Services, Inc. 2015 Annual Report

Maynilad’s mission, our human resources efforts on building a culture

and further inspires developing leadership and technical competencies,

us to work harder way we communicate to better deliver business results.

our fellowmen, our

environment. of further development, for possible adoption in the

We are also delighted to report that two of our previous

There is, indeed, wisdom in investing in innovation. We

More than a water company

Our people have always gone above and beyond the

From Basic Utility to Water Solutions Company

I will leave you with my successor, Ramoncito S.