buy be accepted prior to the time that the Preliminary Prospectus is issued in final form.

Under no circumstances shall this Prelimi nary Prospectus constitute an offer to sell or the
solicitation of an offer to buy any Offer Shares nor shall there be any offer, solicitation or sale of the Offer Shares in any jurisdiction in which such offer, solicitation or sale would
This Preliminary Prospectus and the information contained herein are subject to completion or amendment without notice. The O ffer Shares may not be sold nor may an offer to

EAGLE CEMENT CORPORATION

Primary Offer of [500,000,000] common shares with an Over-allotment Option of up

to [75,000,000] Common Shares at an Offer Price of up to [16.00] per Share
to be listed and traded on the Main Board of The Philippine Stock Exchange, Inc.

Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners

be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

China Bank Capital Corporation

PNB Capital and Investment Corporation

SB Capital Investment Corporation

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE

SECURITIES OR DETERMINED IF THIS PRELIMINARY PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE AND SHOULD BE REPORTED IMMEDIATELY TO THE
PHILIPPINE SECURITIES AND EXCHANGE COMMISSION.

The date of this Preliminary Prospectus is February 24, 2017

1
Eagle Cement Corporation
No. 153 EDSA, Barangay Wack-Wack,
Mandaluyong City, Metro Manila,
Philippines
Telephone Number: (02)- 301-3453
Corporate Website: www.eaglecement.com.ph

This Preliminary Prospectus relates to the offer and sale in the Philippines of [500,000,000] common
shares (the Firm Offer, and such shares, the Firm Shares) with an Over-allotment option of
[75,000,000] common shares (the Optional Shares, and together with the Firm Shares, the Offer
Shares), with a par value of 1.00 per share, of Eagle Cement Corporation (Eagle Cement, or the
Issuer, or the Company) to be listed and traded in the Main Board of The Philippine Stock Exchange,
Inc. (the PSE). The Firm Shares will comprise up to [500,000,000] unissued shares to be offered and
issued by the Company by way of primary offer and the Optional Shares will comprise [75,000,000]
common shares by way of a secondary offer (the Offer).

The Firm Shares will be offered at a price of up to [16.00] per Offer Share (the Offer Price). The
determination of the Offer Price is further discussed on page 34 of this Preliminary Prospectus and is
based on a book-building process and the discussions between the Company and China Bank Capital
Corporation, PNB Capital and Investment Corporation, and SB Capital Investment Corporation (each a
Joint Issue Manager, Joint Lead Underwriter, and Joint Bookrunner and collectively the Joint Issue
Managers, Joint Lead Underwriters, and Joint Bookrunners). The Firm Shares will represent [10]% of
the outstanding common shares of the Company after completion of the Offer and will be issued out of
the authorized and unissued capital stock of the Company. Prior to the Offer the Company has a total
of 4,500,000,005 issued and outstanding common shares. After the completion of the Offer, the
Company will have [5,000,000,005] issued and outstanding common shares.

As of the date of this Preliminary Prospectus, the Company has an authorized capital stock of
8,500,000,000.00 divided into 5,500,000,000 common shares with a par value of 1.00 per share
(Common Shares) and 3,000,000,000 preferred shares with a par value of 1.00 per share (Preferred
Shares) (Common Shares and Preferred Shares shall collectively be referred to as Shares). For a
detailed discussion on the rights and features of the capital stock of the Company, including the Offer
Shares, please refer to Description of Share Capital on page 100 of this Preliminary Prospectus.

The Common Shares, including the Offer Shares, will be listed and traded on the Main Board of the
Philippine Stock Exchange, Inc. (PSE) under the trading symbol [EAGLE].

The Company has appointed Philippine Equity Partners, Inc., a duly-licensed stock brokerage firm in
the Philippines, to act as the stabilizing agent (the Stabilizing Agent), with an option exercisable in
whole or in part for a period beginning on the date of the initial listing of the Shares on the PSE (as
defined below) (the Listing Date) and ending on a date no later than 30 calendar days from and
including the Listing Date, to purchase up to an additional 75,000,000 Common Shares offered by Far
East Cement Corporation (the Selling Shareholder) at the Offer Price, on the same terms and
conditions as the Firm Shares as set forth in this Preliminary Prospectus, solely to cover over -
allotments, if any (the Over-allotment Option). The offer of the Firm Shares, including the Optional
Shares, is referred to as the Offer.

The total gross proceeds to be raised by the Company from the sale of the Offer Shares is estimated
to be [8.00] Billion. The net proceeds from the Offer, after deduction of fees and expenses, is estimated
to be [7.39] Billion. The Company intends to use the net proceeds from the Offer to partially financ e
the construction of the Cebu Cement Plant of the Company. For a detailed discussion on the use of
proceeds, please refer to page 30 on the Use of Proceeds. The Selling Shareholders total proceeds
and estimated net proceeds (after deducting fees and expenses payable by the Selling Shareholder) to
be raised from the sale of the Optional Shares will be approximately [1.11] Billion, assuming full
exercise of the Over-allotment Option. The Company will not receive any proceeds from the sale of
Shares by the Selling Shareholder.

The Joint Lead Underwriters will receive an underwriting fee from the Company equivalent to [2.50]%
of the gross proceeds from the sale of the Offer shares. The underwriting fee includes the amounts to

i
be paid to other participating underwriters and selling agents, if any and where applicable. For detailed
discussion on the underwriting fees, please refer to the section on Plan of Distribution on page 123.

Each holder of the Offer Shares will be entitled to dividends as may be declared by the Board (the
Board) of the Company, provided that any stock dividend declaration requires the approval of
shareholders holding at least two-thirds (2/3) of the total outstanding capital stock of the Company. The
Corporation Code of the Philippines has defined outstanding capital stock as the total shares of stock
issued, whether paid in full or not, except treasury shares.

The Company intends to pay annual dividends in the amount of up to 50% of its audited net income
after tax of the previous year subject to compliance with the requirements of applicable laws and
regulations and subject to investment plans and financial condition. The amount of dividends will be
reviewed periodically by the Board in light of the Company's earnings, financial condition, cash flows,
capital requirements and other considerations while maintaining a level of capitalization that is
commercially sound and sufficient to ensure that the Company can operate on a standalone basis.
Furthermore, in connection with the Preferred Shares, holders thereof are entitled to six percent (6%)
cumulative, non-participating dividends per annum, which shall be paid upon declaration made at the
sole option of the Board.

Declaration of dividends will be subject to the discretion of the Board, to the extent permitted by law.
The Board may not declare or pay any cash dividends where (i) payment of cash dividend would cause
the Company to breach any of its financial covenants; and (ii) retention of earning is necessary under
special circumstances obtaining in the Company. For a detailed discussion of the dividend policy of the
Company, please refer to Dividends and Dividend Policy on page 32.

The Offer Shares may be owned by any person or entity subject to the applicable restrictions under
Philippine law. The Philippine Constitution and related statutes set forth restrictions on foreign
ownership for companies engaged in certain activities. Because the Company owns land and is a holder
of several Mineral Production Sharing Agreements (MPSA), its foreign shareholdings may not exceed
40% of its issued and outstanding capital stock entitled to vote, and 40% of its total issued and
outstanding capital stock, whether or not entitled to vote. Accordingly, the Company will not allow the
issuance of its shares, including the Offer Shares, or record the transfer of such shares to persons other
than Philippine nationals, if such issuance or transfer, in either case, will exceed the foregoing foreign
capital ownership limit. See Philippine Foreign Exchange and Foreign Ownership Controls on page
116 of this Preliminary Prospectus.

Up to [100,000,000] Firm Shares (or 20% of the Firm Shares) are being offered in the Philippines to all
of the trading participants of the PSE (the Trading Participants) and up to [50,000,000] Firm Shares
(or 10% of the Offer Shares) are being offered in the Philippines to local small investors (LSIs) under
the Local Small Investors Program, Any allocation of Firm Shares not taken up by the Trading
Participants, LSIs, the clients of the Joint Lead Underwriters or the general public, will be purchased by
the Joint Lead Underwriters pursuant to their underwriting commitment. For a detailed discussion on
the distribution of the Firm Shares and the underwriting commitment, please refer to the section on
Plan of Distribution on page 123.

On [] the Company filed a Registration Statement with the Securities and Exchange Commission
(SEC) in accordance with the Securities Regulation Code (Republic Act No. 8799) (the SRC) for the
registration of all the Common Shares of the Company, including the Offer Shares. The Registration
Statement was rendered effective on [] and Permit to Sell and Offer Securities No. [] covering the
Offer Shares was issued to the Company.

An application to list the Common Shares, including the Offer Shares, was filed on [] and approved by
the PSE on []. The PSE assumes no responsibility for the correctness of any statements made or
opinions expressed in this Preliminary Prospectus. The PSE makes no representation as to its
completeness and expressly disclaims any liability whatsoever for any loss arising from reliance on the
entire or any part of this Preliminary Prospectus. The approval by the PSE for listing the Common
Shares is permissive only and does not constitute a recommendation or endorsement of the O ffer
Shares by the PSE or the SEC. Prior to the Offer, there has been no public market for the Common
Shares. Accordingly, there has been no market price for the Common Shares derived from day to day
trading.
ii
The information contained in this Preliminary Prospectus relating to the Company and its operations
has been supplied by the Company, unless otherwise stated herein. To the best of its knowledge and
belief, the Company, which has taken reasonable care to ensure that such is the case, confirms that
the information contained in this Preliminary Prospectus relating to it and its operations is correct, and
that there is no material misstatement or omission of fact which would make any statement in this
Preliminary Prospectus misleading in any material respect and that the Company hereby accepts full
and sole responsibility for the accuracy of the information contained in this Preliminary Prospectus with
respect to the same.

Unless otherwise indicated, all information in this Preliminary Prospectus is as of the date of this
Preliminary Prospectus. Neither the delivery of this Preliminary Prospectus nor any sale made pursuant
to this Preliminary Prospectus shall, under any circumstances, create any implication that the
information contained herein is correct as of any date subsequent to the date hereof or that there has
been no change in the affairs of the Company since such date.

Before making an investment decision, prospective investors should carefully consider the risks
associated with an investment in the Offer Shares. These risks include: (i) risks related to the business;
(ii) risks relating to the Philippines; (iii) risks relating to the Offer and the Offer Shares; and (iv) risks
related to the presentation of information in this Preliminary Prospectus.

For a detailed discussion on the risk factors concerning the Offer Shares, please refer to the section
entitled Risk Factors on page 17 of this Preliminary Prospectus, which, while not intended to be an
exhaustive enumeration of all risks, must be considered in connection with any investment in or any
purchase of the Offer Shares.

iii
Except in respect of the information pertaining to themselves, no representation or warranty, express
or implied, is made by the Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners or
any of their respective affiliates, as to the accuracy or completeness of the information herein and
nothing contained in this Preliminary Prospectus is, or shall be relied upon as, a promise or
representation by the Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners or any
of their respective affiliates. Any reproduction or distribution of this Preliminary Prospectus, in whole
or in part, and any disclosure of its contents or use of any information herein for any purpose other
than considering an investment in the Offer Shares is prohibited. Each offeree of the Offer Shares, by
accepting delivery of this Preliminary Prospectus, agrees to the foregoing.

THE OFFER SHARES ARE BEING OFFERED IN THE PHILIPPINES ON THE BASIS OF THIS
PROSPECTUS ONLY. ANY DECISION TO PURCHASE THE OFFER SHARES IN THE
PHILIPPINES MUST BE BASED ONLY ON THE INFORMATION CONTAINED HEREIN.

No person has been or is authorized to give any information or to make any representation concerning
the Company or its affiliates or the Offer Shares, which is not contained in this Preliminary Prospectus
and any information or representation not so contained herein must not be relied upon as having been
authorized by the Company the Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners
or any of their respective affiliates. Neither the delivery of this Preliminary Prospectus nor any offer,
sale or delivery made in connection with the Offer shall at any time or in any circumstances imply that
the information contained herein is correct as at any time subsequent to its date or consti tute a
representation that there has been no change or development reasonably likely to involve a material
adverse change in affairs of the Company, or the affairs of its subsidiaries, since the date hereof.

Market data used throughout this Preliminary Prospectus has been obtained from market research,
reports and studies, publicly available information and industry publications , including the Philippine
Cement Mark et-February 2017 Report. Industry publications generally state that the information that
they contain has been obtained from sources believed to be reliable but that the accuracy and
completeness of that information is not guaranteed. Similarly, industry forecasts, market researc h and
the underlying economic assumptions relied upon therein, while believed to be reliable, have not been
independently verified, and none of the Company nor the Joint Issue Managers, Joint Lead
Underwriters and Joint Bookrunners make any representation as to the accuracy of that information.
The information related to the Philippine cement industry in this Preliminary Prospectus reflects
estimates of market conditions based on publicly available sources and trade opinion surveys.
Forecasts were made on the assumption that the Philippine economy is expected to maintain a steady
growth and that the social, economic, and political environment is expected to remain stable.

Information in this Preliminary Prospectus on the cement industry is from independent market researc h
carried out by the Cement Business Advisory Ltd. (CBA) but should not be relied upon in making, or
refraining from making, any investment decision.

The operating information used throughout this Preliminary Prospectus has been calculated on the
basis of certain assumptions. As a result, this operating information may not be comparable to similar
operating information reported by other companies.

The distribution of this Preliminary Prospectus and the offer and sale of the Offer Shares i n certain
jurisdictions may be restricted by law. The Company and the Joint Issue Managers, Joint Lead
Underwriters and the Joint Bookrunners require persons into whose possession this Preliminary
Prospectus comes to inform themselves about and to observe any such restrictions. This Preliminary
Prospectus does not constitute an offer of, or an invitation to purchase, any of the Offer Shares in any
jurisdiction in which such offer or invitation would be unlawful. Each prospective purchaser of the Offer
Shares must comply with all applicable laws and regulations in force in any jurisdiction in which it
purchases, offers, sells or resells the Offer Shares or possesses and distributes this Preliminary
Prospectus and must obtain any consents, approvals or permiss ions required for the purchase, offer,
sale or resale by it of the Offer Shares under the laws, rules and regulations in force in any jurisdiction
to which it is subject or in which it makes such purchases, offers, sales or resales, and none of the
Joint Issue Managers, Joint Lead Underwriters and the Joint Bookrunners nor the Company shall have

v
any responsibility therefor.

In connection with the Offer, the Stabilizing Agent or any person acting on its behalf may over-allot
Optional Shares or effect transactions with a view to supporting the market price of the Offer Shares
at a level higher than that which might otherwise prevail for a limited period after the Listing Date.
However, there is no assurance that the Stabilizing Agent (or any person acti ng on behalf of the
Stabilizing Agent) will undertake stabilization activities. Any stabilization activities may begin on or
after the Listing Date and, if begun, may be ended at any time, but must end no later than 30 calendar
days from and including the Listing Date. Any stabilization activities shall be done in compliance with
all applicable laws, regulations and rules. The total number of Offer Shares which the Stabilizing Agent
or any agent of it may buy to undertake any stabilizing activities shall not exceed 15.0% of the
aggregate number of the Firm Shares.

The Company, together with the Selling Shareholder, reserve the right to withdraw the offer and sale
of Offer Shares at any time, and the Joint Issue Managers, Joint Lead Underwriters and the Joint
Bookrunners reserve the right to reject any commitment to subscribe for the Offer Shares in whole or
in part and to allot to any prospective purchaser less than the full amount of the Offer Shares sought
by such purchaser. If the Offer is withdrawn or discontinued, the Company shall subsequently notify
the Philippine SEC and the PSE. The Joint Issue Managers, Joint Lead Underwriters and the Joint
Bookrunners and certain related entities may acquire for their own account a portion of the Offer
Shares.

Each offeree of the Offer Shares, by accepting delivery of this Preliminary Prospectus, agrees to the
foregoing.

vi
Basis for Certain Market Data
This Preliminary Prospectus includes statistics, data and other information relating to markets, market
sizes, market shares, market positions and other industry data regarding the production, distribution,
marketing and sale of cement. Such information is based on various sources, on the assumption that
the Company made, based on those data and other similar sources and on its own analysis and
knowledge of the markets for the products of the Company. These sources include reports and certain
industry forecasts that were generated internally, market data and industry forecasts from independent
industry publications and the Philippine Cement Mark et-February 2017 Report (the Cement Market
Report), a study prepared by Cement Business Advisory Ltd. (CBA) and commissioned by the
Company. Industry publications generally state that the information contained therein has been
obtained from sources believed to be reliable, but that the accuracy and completeness of such
information is not guaranteed. The Company has not independently verified this data nor sought the
consent of any organizations to refer to their reports in this Preliminary Prospectus, and none of the,
Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners or any of the Company or their
respective affiliates make any representation as to the accuracy of such information.

CBA was set up by a number of highly experienced cement industry professionals. The mission of
CBA is to offer tailored services to organizations interested to study, become active and strengthen
their position in cement and related sectors. The advisors and consultants of CBA have built their
expertise both in industry with blue chip international and private cement companies and in the
financial services sector through M&A, JV and internal investment projects. CBA works with senior
managers shoulder to shoulder, speaking the same language, facilitating robust but innovative thinking
to build tangible value and manage risk.

See the section entitled The Philippine Cement Industry on page 47 of this Preliminary Prospectus
for information relating to the Cement Market Report and the engagement by the Company of CBA.
The information contained in the Cement Market Report has been accurately reproduced, and, as far
as the Company is aware, no facts have been omitted which would render the information provided
inaccurate or misleading. The Cement Market Report includes or is otherwise based in part on
information supplied to CBA by or on behalf of the Company, including internal financial and
operational information of the Company. In addition, the Company understands from CBA that the
Cement Market Report includes or is otherwise based on information obtained from (i) various data
collection agencies, industry associations, forums and institutes and private market analysts; and (ii)
publicly available information, such as national and local government budgets, tender publications,
and other information publicly released by corporations and government departments, as well as
primary interviews conducted with industry experts and participants and secondary market research.

While the Cement Market Report provides that the views, opinions, forecasts and information
contained in it are based on information reasonably believed by CBA in good faith to be reliable, it has
not independently verified or audited the information or material provided by it to the Company. In
addition, the market and industry data contained in this Preliminary Prospectus that has been
extracted or derived from the Cement Market Report has not been independently verified by the
Company, the Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners nor any of the
Company or their respective affiliates and may not be accurate, complete, up-to-date, balanced or
consistent with other information compiled within or outside the Philippines. Neither the Company nor
the Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners nor any of their respec tive
affiliates make any representation as to the accuracy of such information.

Investors should note that market data and statistics are inherently predictive and subject to uncertainty
and not necessarily reflective of actual market conditions.

vii
Presentation of Financial Information
The consolidated financial statements of the Company are reported in Philippine Pesos and are
prepared in accordance with the Philippine Financial Reporting Standards (PFRS ) issued by the
Financial Reporting Standard Council and adopted by the Philippine SEC. This financial reporting
framework includes PFRS, Philippine Accounting Standards (PAS), and Philippine Interpretations
from International Financial Reporting Interpretations Committee (IFRIC).

The consolidated financial statements were also prepared in compliance with SRC Rule 68, as
amended, for statutory filing and in relation to the application of the Company for listing its common
shares with the PSE.

The consolidated financial information presented herein should be read in conjunction with the
consolidated financial statements for the period ended December 31, 2016, 2015, and 2014 and for the
years ended December 31, 2016, 2015 and 2014.

Figures in this Preliminary Prospectus have been subject to rounding adjustments. Figures appearing
in this Preliminary Prospectus are rounded off two (2) decimal places. Accordingly, figures shown in the
same item of information may vary, and figures which are totals may not be an arithmetic aggregate of
their components.

The fiscal year of the Company begins on January 1 and ends on December 31 of the year. Reyes
Tacandong & Co., the external auditor of the Company, has audited and rendered unmodified audit
reports on the financial statements of the Company as of and for the years ended December 31, 2016,
and 2015. The financial statements of the Company for the year ended December 31, 2014 was audited
by Isla Lipana & Co who expressed an unmodified opinion on those financial statements.

viii
Forward-Looking Statements
This Preliminary Prospectus contains forward-looking statements that are, by their nature, subject to
significant risks and uncertainties. These forward-looking statements include, without limitation,
statements relating to the expectations of the Company regarding:

future growth;
economic conditions in the Philippines;
results of operations and performance (both operational and financial);
business prospects;
business opportunities; and
known and unknown risks.

This Preliminary Prospectus includes forward-looking statements, including statements regarding the
expectations and projections of the Company for future operating performance and business prospects.
The words, including, but not limited to, anticipate, believe, budget, expect, forecast, intend,
plan and similar expressions or statements that certain actions, events or results could, may,
might, will, or would be taken, occur or be achieved, have been used to identify these forward -
looking statements. In addition, all statements other than statements of historical facts included in this
Preliminary Prospectus are forward-looking statements.

Although the forward-looking statements contained in this Preliminary Prospectus reflect the current
beliefs of the Company based upon information currently available to management and what
management believes to be reasonable assumptions, the Company cannot be certain that actual results
will be consistent with these forward-looking statements.

Forward-looking statements necessarily involve significant known and unknown risks, assumptions and
uncertainties that may cause the actual future growth, results of operations, performance, business
prospects and opportunities to differ materially from those expressed or implied by such forward-look ing
statements. These risks and uncertainties include, among other things, uncertainties relating to:
the cyclical nature of the construction sector;
competition;
general political, economic and business conditions in the Philippines;
the regulatory environment, including but not limited to environmental, tax and acquisition-relat ed
rules and regulations;
the availability and cost of fuel and electricity
distribution costs;
weather conditions;
ability to achieve cost-savings from cost-reduction initiatives and implement pricing plans for
products;
natural disasters and other unforeseen events; and
other risks and uncertainties described under Risk Factors and elsewhere in this Preliminary
Prospectus.

See Risk Factors on page 17 of this Preliminary Prospectus. Accordingly, prospective investors should
not place undue reliance on such forward-looking statements. These forward-looking statements are
made as of the date of this Preliminary Prospectus and the Company does not assume any obligation
to update or revise them to reflect new events or circumstances.

ix
Table of Contents

Basis for Certain Market Data ....................................................................................................... vii

Presentation of Financial Information ........................................................................................... viii
Forward-Looking Statements ........................................................................................................ ix
Table of Cont ents ......................................................................................................................... x
Definition of Terms ........................................................................................................................ 1
Executive Summary ...................................................................................................................... 7
Terms of the Offer......................................................................................................................... 9
Summary Historical Financial Information ..................................................................................... 15
Risk Factors ............................................................................................................................... 17
Use of Proceeds ......................................................................................................................... 30
Dividends and Dividend Policy ..................................................................................................... 32
Determination of Offer Price ........................................................................................................ 34
Capit alization.............................................................................................................................. 35
Dilution....................................................................................................................................... 36
Selected Historic al Financial Information ...................................................................................... 37
Managements Discussion and Analysis of Historical Financial Condition and
Results of Operations.................................................................................................................. 39
The Philippine Cement Industry ................................................................................................... 47
Business .................................................................................................................................... 57
Description of Property ................................................................................................................ 75
Legal Proceedings ...................................................................................................................... 76
Regulatory and Environmental Matters ......................................................................................... 78
Board of Directors and Officers .................................................................................................... 85
Relat ed Party Transactions ......................................................................................................... 97
Principal and Selling Shareholders ............................................................................................... 98
Description of Share Capital .......................................................................................................100
The Philippine Stock Market .......................................................................................................110
Philippine Foreign Exchange and Foreign Ownership Cont rols .....................................................116
Philippine Taxation ....................................................................................................................118
Plan of Distribution.....................................................................................................................123
Legal Matters ............................................................................................................................127
Independent Auditors .................................................................................................................128
Appendix ...................................................................................................................................130

x
Definition of Terms
In this Preliminary Prospectus, unless the context otherwise requires, the following terms have the
meanings set out below.

Affiliate A corporation that directly or indirectly, through one or more

intermediaries, controls, is controlled by, or is under the common
control of, another corporation.

APC APC Group, Inc.

Applicant A person, whether natural or juridical, who seeks to subscribe for

the Offer Shares.

Application An application to subscribe for Offer Shares pursuant to the Offer.

BIR Bureau of Internal Revenue.

Board The board of directors of the Company.

BOI Board of Investments.

BSP Bangk o Sentral ng Pilipinas.

Bulacan Cement Plant The Companys primary cement production facility located in
Barangay Akle, San Ildefonso, Bulacan.

CAGR Compounded annual growth rate.

CBA Cement Business Advisory Ltd.

Cebu Cement Plant The 2 Million MT capacity cement plant and its support facilities in
the Province of Cebu.

CCCS system Central Clearing and Central Settlement system implemented by

SCCP.

The Cement Market Report The Philippine Cement Mark et-February 2017 Report.

CEO Chief Executive Officer.

China Bank Capital China Bank Capital Corporation.

CNC Certificate of Non-Coverage.

CNO Certificate of Non-Overlap issued by the NCIP in accordance with

the IPRA.

COC Certificate of Compliance issued by the ERC.

Common Shares 5,500,000,000 common shares of the Company with a par value of
1.00 per share.

the Company, Eagle Eagle Cement Corporation, a corporation organized under the laws
Cement, or the Issuer of the Philippines, and, where the context otherwise requires, all of
its consolidated subsidiaries.

Corporation Code Batas Pambansa Bilang 68 otherwise known as the Corporat ion
Code of the Philippines.

1
DBM Department of Budget and Management.

DENR Department of Environment and Natural Resources.

Directors Directors of the Company.

DOE Department of Energy.

EBITDA Earnings before interest, provisions for income tax, depreciation

and amortization.

ECC Environmental Compliance Certificate.

EGF Environmental Guarantee Fund.

EMB Environmental Management Bureau of the DENR.

ERC Energy Regulatory Commission.

EIS Environmental Impact Study.

Escrow Agent Bank of Commerce Trust Division.

ETF Exchange Traded Funds.

FECC Far East Cement Corporation.

Firm Offer The primary offer and sale of up to 500,000,000 unissued Common
Shares to be offered and issued by Eagle Cement.

Firm Shares Up to 500,000,000 Common Shares to be offered and issued by

Eagle Cement.

Foreign Investment Act The Foreign Investments Act of 1991, Republic Act No. 7042, as
amended.

FPIC Free and Prior Informed Consent.

The Gamboa Case The Philippine Supreme Court case of Wilson P. Gamboa v.
Finance Secretary Margarito B. Teves, et. al. dated June 28, 2011
(G.R. No. 176579).

The Gamboa Resolution The Philippine Supreme Court resolution on the motion for
reconsideration for the case of Wilson P. Gamboa v. Financ e
Secretary Margarito B. Teves, et. al. dated October 9, 2012.

GDP Gross domestic product, or the monetary value of all the finished
goods and services produced within the borders of a country,
calculated on an annual basis.

Government The government of the Republic of the Philippines.

HDMF The Home Development Mutual Fund.

ICCs/IPs Indigenous Cultural Communities/Indigenous Peoples.

IEE Initial Environmental Examination.

IFRIC International Financial Reporting Interpretations Committee.

2
IPRA Republic Act No. 8731, otherwise known as the Indigenous
Peoples Rights Act.

IPO Intellectual Property Office.

IRO Investor Relations Officer.

ITH Income Tax Holiday.

Joint Issue Managers, Joint China Bank Capital Corporation

Lead Underwriters and Joint PNB Capital and Investment Corporation
Bookrunners SB Capital Investment Corporation

KSHI KB Space Holdings, Inc.

Line 1 The first end-to-end cement manufacturing facility in the Bulacan

Cement Plant.

Line 2 The second end-to-end cement manufacturing facility in the

Bulacan Cement Plant.

Line 3 The third end-to-end cement manufacturing facility in the Bulacan

Cement Plant currently under construction and targeted to be
completed by 2018.

Listing Date The date on which trading of the Shares on the PSE begins,
expected to be on or about [, 2017].

LGU Local Government Unit.

LSIs Local small investors.

Manual The manual of corporate governance of the Company prepared to

ensure compliance with the leading practices on good corporat e
governance and related Philippine SEC rules and regulations. The
Manual was approved and adopted by the Board on February 13,
2017 and made effective on February 23, 2017.

MC Masonry Cement.

MEPT Manyplus Energy Pte. Ltd.

MPSA Mineral Production and Sharing Agreement.

MT Metric tons.

the Narra Nickel Case The case of Narra Nickel Mining and Development Corporation,
et.al vs. Redmont Consolidated Mines Corp (G.R. No. 195580, April
21, 2014).

NCIP The National Commission on Indigenous Peoples.

NCIP-CP Certification Pre-condition issued by the NCIP in accordance with

the IPRA.

NHIP National Health Insurance Program.

OPC Ordinary Portland Cement.

3
Offer The offer and sale of the Offer Shares on, and subject to, the terms
and conditions stated herein.

Offer Price [Up to 16.00] per Offer Share.

Offer Shares The Firm Shares and the Optional Shares.

Optional Shares Up to [75,000,000] Common Shares to be sold by the Selling

Shareholder and purchased by the Stabilizing Agent upon exercise
of Over-allotment Option.

Over-allotment Option An option granted by the Selling Shareholder to the Stabilizing

Agent, exercisable within 30 days from and including the Listing
Date, to purchase Optional Shares.

PAS Philippine Accounting Standards.

PCD Philippine Central Depository.

PCD Nominee PCD Nominee Corporation, a corporation wholly owned by the

PDTC.

PDTC The Philippine Depository and Trust Corporation.

Permit to Sell The permit issued by the SEC granting the effectiveness of the
registration statement filed in relation to the Offer Shares.

Pesos or The lawful currency of the Philippines.

PFRS Philippine Financial Reporting Standards.

Philippines Republic of the Philippines.

Philippine National As defined under the Foreign Investments Act of 1991, means a
citizen of the Philippines, or a domestic partnership or association
wholly owned by citizens of the Philippines, or a corporation
organized under the laws of the Philippines of which at least 60% of
the capital stock outstanding and the entitlement to vote is owned
and held by citizens of the Philippines, or a corporation organiz ed
abroad and registered to do business in the Philippines under the
Philippine Corporation Code, of which 100% of the capital stock
outstanding and the entitlement to vote is wholly owned by Filipinos
or a trustee of funds for pension or other employee retirement or
separation benefits, where the trustee is a Philippine national and
at least 60% of the fund will accrue to the benefit of Philippine
nationals.

Pursuant to Philippine SEC Memorandum Circular No. 8, Series of

2013, which generally applies to all corporations engaged in
identified areas of activities or enterprises specifically reserved,
wholly or partly, to Philippine nationals by the Philippine
Constitution, the Foreign Investments Act of 1991 and other existing
laws, amendments thereto, and implementing rules and regulations
of the said laws, for purposes of determining compliance with the
constitutional or statutory ownership requirement, the required
percentage of Filipino ownership shall be applied to both: (i) the total
number of outstanding shares of stock entitled to vote in the election
of directors; and (ii) the total number of outstanding shares of stock,
whether or not entitled to vote in the election of directors.
4
PNB Capital PNB Capital and Investment Corporation.

PPC Portland Pozzolanic Cement.

Preferred Shares 3,000,000,000 preferred shares of the Company with a par value of
1.00 per share.

PSE The Philippine Stock Exchange, Inc.

PSE Listing Rules PSE Consolidated Listing and Disclosure Rules, as amended.

PSE Main Board One of the two boards of the PSE. Generally, to be listed on the
PSE Main Board, a company must have a minimum authoriz ed
capital stock of 500 Million, of which a minimum of twenty-five
percent (25%) must be subscribed and fully paid, and show, among
others:

(i) a track record of profitable operations for three full fiscal

years prior to the filing of the listing application;

(ii) positive shareholders equity in the fiscal year immediately

preceding the filing of the listing application;

(iii) a market capitalization of at least 500 Million at listing; and

(iv) operating history of at least three years prior to the filing of

the listing application.

R.A. Republic Act.

RCC Republic Cement Corporation.

PSE Trading Participants Duly licensed securities brokers who are trading participants of the
PSE.

Receiving Agent Rizal Commercial Banking Corporation Trust Division.

RMC Ready-mix concrete.

SB Capital SB Capital Investment Corporation.

SCCP Securities Clearing Corporation of the Philippines.

SEC The Securities and Exchange Commission.

Selling Shareholder FECC.

Shares The Common Shares and Preferred Shares.

SMPC Semirara Mining and Power Corporation.

SSS Social Security System.

SRC Securities Regulation Code of the Philippines (Republic Act No.

8799) and its implementing rules, as amended.

Stabilizing Agent Philippine Equity Partners, Inc.

5
Stock Transfer Agent Rizal Commercial Banking Corporation Trust Division.

SWCC South Western Cement Corporation.

Tax Code Republic Act No. 8424, or the Tax Reform Act of 1997, as amended.

TLFSA The Term Loan Facility and Security Agreement entered into by the
Company in February 2016 with various local financial institutions.

Trading Participants Duly licensed securities brokers who are trading participants of the
PSE.

Underwriting Agreement The underwriting agreement dated [], 2017 between the
Company and the Joint Issue Managers, Joint Lead Underwriters,
and Joint Bookrunners.

US Dollar or US$ The lawful currency of the United States of America.

WHR Waste Heat Recovery.

6
Executive Summary
The following summary is qualified in its entirety by, and is subject to, the more detailed information and
financial statements including the notes thereto, appearing elsewhere in this Preliminary Prospectus.
Prospective Investors are advised to review closely the sections entitled Risk Factors for a description
of certain factors that may be relevant to the Offer Shares. Capitalized terms not defined in this
Summary are defined in the Definition of Terms.

Prospective investors should read this entire Preliminary Prospectus fully and carefully, including the
section on Risk Factors for a description of certain factors that may be relevant to the Offer Shares.
In case of any inconsistency between this summary and the detailed information in this Preliminary
Prospectus, the more detailed portions, as the case may be, shall prevail.

Overview

Eagle Cement Corporation is a fully integrated Filipino-owned company primarily engaged in the
business of manufacturing, marketing, sale and distribution of cement. The Company has the newest,
state-of-the-art, and single largest cement manufacturing plant in the Philippines. The Company is the
4th largest player in the Philippine cement industry based on sales volume, with the fastest growing
market share among all competitors in the industry since it started commercial operations in 2010. The
Company was incorporated and registered with the Securities and Exchange Commission (SEC) on
June 21, 1995.

The competitive strength of the Company is founded on its end-to-end production strategy which
seamlessly integrates critical raw material sourcing with modern manufacturing technology resulting to
one of the most efficient cement manufacturing operations in the country. The Company has the largest
integrated single plant production capacity in terms of cement output in the Philippines through its
primary cement production facility located in Barangay Akle, San Ildefonso, Bulacan (the Bulacan
Cement Plant). The Bulacan Cement Plant consists of two (2) production li nes with an annual
combined cement production capacity of approximately 5.1 Million MT or 130 Million bags per annum.
It is strategically located near demand-centric areas and in direct proximity to rich limestone and shale
reserves covered by the exclusive mineral rights of the Company. In addition, the Company also
maintains a grinding and packaging facility in Limay, Bataan which can process 12 Million bags of
cement per annum. Eagle Cement is currently in the process of constructing a third production l ine in
its Bulacan Cement Plant (Line 3), due to be completed in 2018 which will increase its cement
production capacity by 2 Million MT or about 50 Million bags per annum. This will bring total production
capacity to about 7.1 Million MT or about 180 Million bags per annum, enabling the Company to
consolidate its position as one of the leaders in the cement industry.

Eagle Cement currently distributes its products in the Luzon region which constitute about 65% of total
cement demand in the Philippines, particularly in the following areas: National Capital Region (Metro
Manila), Region I (Ilocos Norte, Ilocos Sur, La Union, Pangasinan), Region II (Batanes, Cagayan,
Isabela, Nueva Vizcaya, and Quirino), Region III (Nueva Vizcaya, Nueva Ecija, Bulacan, Pampanga,
Tarlac, Bataan, Zambales), and Region IVA (Cavite, Laguna and Batangas, Rizal, and Quezon). As of
2015, NCR still serves as the center of construction and infrastructure activity in the country. Eagle
Cement is considered one of the leading players in areas with the highest economic activity in the
Philippines with an estimated market share of 30% in NCR, Region III, and Region IVA, based on
internal Company data.

Key Strengths

The Company considers the following as its competitive strengths:

Single largest fully-integrated manufacturing facility with state-of-the art production lines;
Strategic location of plants and access to vast limestone reserves;
Strong brand equity for both retail and institutional customers ;
Extensive distribution network coupled with a lean and efficient sales and marketing framework;
Seasoned and competent management, operating and marketing teams with proven track record
in the cement industry; and

7
 Strategically positioned to take advantage of the growth opportunities in view of the favorable
growth outlook in the construction industry of the country .

Business Strategies

To further build on its competitive strengths and allow further expansion of its business, the Company
intends to undertake the following business strategies:

Increase production capacity and expand distribution channels in key growth regions in the country ;
Ensure sustainability and proximity of raw material sources ;
Further enhance customer and product value proposition; and
Maintain price competitiveness.

Risks of Investing

Before making an investment decision, investors should carefully consider the ri sks associated with
an investment in the Offer Shares. These risks include:

Risks relating to the business;

Risks relating to the Philippines, Government Regulations and Economic Factors;
Risks relating to the Offer Shares; and
Risks relating to the Presentation of Information in this Preliminary Prospectus.

Investor Relations Office

The investor relations office will be tasked with (a) the creation and implementation of an invest or
program that reaches out to all shareholders and informs them of corporate activities and (b) the
formulation of a clear policy for accurately, effectively and sufficiently communicating and relating
relevant information to the stakeholders of the Company as well as to the broader investor community.

The investor relations office will be responsible for receiving and responding to investor and shareholder
queries and ensuring that investors and shareholders have easy and direct access to the official and
designated spokespersons of the Company.

[] has been appointed by the Board as the head of the investor relations office and serves as the
Investor Relations Officer (IRO) of the Company. The IRO will ensure that the Company complies with
and files on a timely basis all required disclosures and continuing requirements of the SEC and the
PSE. The IRO will also be responsible for ensuring that the shareholders have timely and uniform
access to official announcements, disclosures and market-sensitive information relating to the
Company. In addition, the IRO will oversee most aspects of the shareholder meetings, press
conferences, investor briefings, and management of the investor relations portion of the Company
website.

The investor relations office will be located in the principal place of business of the Company with
contact details as follows:

Landline: 02- 301-3453

E-mail: []
Website: www.eaglecement.com.ph

Information Relating to the Shares

Authorized number of Shares 8,500,000,000

Common Shares outstanding before the Offer 4,500,000,005
Common Shares outstanding after the Offer 5,000,000,005
Market Capitalization at the Offer Price of [16.00] Per
Offer Share [80,000,000,000.00]

8
Terms of the Offer
Company or the Issuer
Selling Shareholder
Joint Issue Managers, Joint
Lead Underwriters and Joint
Bookrunners
The Offer
Offer Shares
Offer Price
Offer Period
Over-allotment Option
Eagle Cement Corporation
Far East Cement Corporation
China Bank Capital Corporation
PNB Capital and Investment Corporation
SB Capital Investment Corporation
Offer of [575,000,000] Common Shares, consisting of [500,000,000]
Common Shares to be offered and issued by the Company (Firm
Shares) together with an offer up to [75,000,000] Common Shares by
the Selling Shareholder pursuant to the Over-allotment Option (as
described below). Up to [100,000,000] Firm Shares are being offered
and sold at the Offer Price to all of the PSE Trading Participants and
[50,000,000] Firm Shares are being allocated to LSIs as part of the
Local Small Investors Program. Firm Shares not taken up by the PSE
Trading Participants and by the LSIs shall be distributed by the Joint
Lead Underwriters to their clients and the general public prior to t he
close of the Offer.
Firm Shares not taken up by the PSE Trading Participants, the LSIs,
and the general public shall be purchased by the Joint Lead
Underwriters under a firm underwriting commitment pursuant to the
underwriting agreement executed by and between the Company and
the Joint Lead Underwriters (the Underwriting Agreement).
The Company has likewise authorized the Joint Lead Underwriters to
organize such syndicate of participating underwriters as it may deem
necessary or convenient, under such terms and conditions not
inconsistent with the Underwriting Agreement.
The Firm Shares and the Optional Shares.
Up to [16.00]
The Offer Period shall commence at 9:00 a.m., Manila time on [] and
end at 12:00 noon, Manila time on []. The Company and the Joint Lead
Underwriters reserve the right to extend or shorten the Offer Period,
subject to the approval of the PSE.
Applications must be received by the Receiving Agent not later than
12:00 noon, Manila Time on []. Applications received thereafter or
without the required documents will be rejected. Applications shall be
considered irrevocable upon submission to the Joint Lead Underwriters ,
and shall be subject to the terms and conditions of the Offer as stated
in this Preliminary Prospectus and in the Application. The actual
subscription and/or purchase of the Offer Shares shall become effect ive
only upon the actual listing of the Offer Shares on the PSE.
The Selling Shareholder has granted the Stabilizing Agent, Philippine
Equity Partners, Inc., acting for and on behalf of the Joint Lead
Managers, Joint Lead Underwriters and Joint Bookrunner an over -
allotment option, exercisable in whole or in part, to purchase up to
[75,000,000] Optional Shares at the Offer Price, on the same terms and
conditions as the Firm Shares as set out in this Preliminary Prospectus,
solely to cover over-allotments, if any, and effect price stabilization
transactions. The Over-allotment Option is exercisable from time to time
9
 for a period which shall not exceed 30 calendar days from and including
the Listing Date. See Plan of DistributionThe Over-allotment Option.

Use of Proceeds See Use of Proceeds on page 30 of this Preliminary Prospectus for
details of how the total net proceeds from the Offer will be applied.
Immediately upon completion of the Offer, the Company intends to use
the net proceeds of the Offer to partially finance the construction of the
Cebu Cement Plant, including the construction of a manufacturing
plant, a distribution center, and marine terminals in the Southern Luzon
regions, Visayas and Mindanao regions.

Minimum Subscription Each application must be for a minimum of [1,000] Offer Shares, and,
thereafter, in multiples of [100] Offer Shares. Applications for multiples
of any number of Offer Shares may be rejected or adjusted to conform
to the required multiple, at the discretion of the Company.

Eligible Investor The Offer Shares may be subscribed to or held by any person of legal
age or duly organized and existing corporations, partnerships or other
juridical entities regardless of nationality, subject to the right of the
Company to reject an application or reduce the number of Offer Shares
applied for subscription or purchase if the same will cause the Company
to be in breach of the Philippine capital ownership requirements under
relevant Philippine laws.

Foreign investors interested in subscribing or purchasing the Offer

Shares should inform themselves of the applicable legal requirement s
under the laws and regulations of the countries of their nationality,
residence or domicile, and as to any relevant tax or foreign exchange
control laws and regulations affecting them personally. Foreign
investors, both corporate and individual, warrant that their purchase of
the Offer Shares will not violate the laws of their jurisdiction and that
they are allowed to acquire, purchase and hold the Offer Shares.

Procedure for Application Application forms to purchase Offer Shares may be obtained from the
Joint Lead Underwriters or any PSE Trading Participants. All
Applications shall be evidenced by the application to purchase form,
accompanied (i) by one completed signature card which, for corporat e
and institutional Applicants, should be authenticated by the corporat e
secretary, and the corresponding payment for the Offer Shares covered
by the Application and (ii) all other required documents. The duly
executed Application form and required documents should be
submitted during the Offer Period to the same office of the Joint Lead
Underwriters or the PSE Trading Participant where it was obtained.

If the Applicant is a corporation, partnership or trust account, the

Application must be accompanied by the following documents:

A certified true copy of the latest articles of incorporation and by -

laws and other constitutive documents (each as amended to
date) of the Applicant duly certified by its corporate secretary;
A certified true copy of the SEC certificate of registration of the
Applicant duly certified by its corporate secretary; and
A duly notarized certificate of the corporate secretary setting forth
the resolution of the board of directors of the Applicant or
equivalent body authorizing the purchase of the Offer Shares
indicated in the Application, identifying the designated
signatories authorized for the purpose, including his or her
specimen signature, and certifying to the percentage of the
capital or capital stock of the Applicant held by Philippine citizens
and/or corporations, if any.
10
 Foreign corporate and institutional Applicants which qualify as Eligible
Investors, in addition to the documents listed above, are required to
submit in quadruplicate a document signed by an authorized signatory
setting out their representation and warranty that their purchase of the
Offer Shares to which their Application relates will not violate the laws
of their jurisdiction of incorporation or organization, and that they are
allowed under such laws, to acquire, purchase and hold the Offer
Shares.

Submission of the completed Application to Purchase to the Joint Lead

Underwriters or the PSE Trading Participants shall constitute an
instruction and authority by the Applicant to the Company and/or the
Joint Lead Underwriters to execute any application form or other
documents and generally to do all such other things as the Company
and/or the Joint Lead Underwriters may consider necessary or
desirable to effect the registration in the name of the Applicant of the
Offer Shares applied for, or any lesser number in respect of which an
Application may be accepted in the stock and transfer book of the
Company. The Applicant shall undertake to sign all documents and to
do all other acts necessary to enable the Applicant to be registered as
the owner of the Offer Shares applied for or any lesser number in
respect of which an Application may be accepted, subject to the Articles
of Incorporation and the By-laws of the Company, and the laws of the
Republic of the Philippines.

Payment Terms of the Offer The Offer Shares must be paid for in full upon submission of the
Application. Payment must be made by (a) personal or corporate check
drawn against an account with a BSP authorized bank at any of its
branches located in Metro Manila, Cebu and Davao; or (b) a managers
or cashiers check issued by an authorized bank. All checks should be
made payable to [Eagle Cement Corporation] dated the same date as
the Application and crossed Payees Account Only.

Acceptance/Rejection of The actual number of Offer Shares that an Applicant will be allowed to
Applications subscribe for in the Offer is subject to the confirmation of the Joint Lead
Underwriters in consultation with the Company. All Applications shall be
subject to the final approval of the Company. The Company reserves
the right to accept or reject, in whole or in part, any Application due to
any grounds specified in the Underwriting Agreement entered into by
the Company and the Joint Lead Underwriters. Applications where
checks are dishonored upon first presentation and Applications which
do not comply with the terms of the Offer shall be rejected. Moreover,
any payment received pursuant to the Application does not mean
approval or acceptance by the Company.

Any such right to reject may be done by the Company itself or through
the Joint Lead Underwriters pursuant to the Underwriting Agreement.

An Application, when accepted, shall constitute an agreement between

the Applicant and the Company for the subscription to the Offer Shares
at the time, in the manner and subject to terms and conditions set fort h
in the Application and those described in this Preliminary Prospectus.
All Applications accepted by the Company may not be unilaterally
revoked or cancelled by the Applicant, in full or in part, and the rights
and privileges pertaining thereto are non-transferable.

Notwithstanding the acceptance of any Application by the Company ,

the Joint Lead Underwriters or their duly authorized representatives, the
actual subscription and purchase by the Applicant of the Offer Shares

11
 will become effective only upon listing of the Offer Shares on the PSE
and upon the obligations of the Joint Lead Underwriters under the
Underwriting Agreement becoming unconditional and not being
suspended, terminated, cancelled, on or before the Listing Date, in
accordance with the provisions of such agreement. If such conditions
have not been fulfilled on or before the period provided above, all the
application payments will be returned to the Applicants without interest
and, in the meantime, said application payments will be held in a
separate bank account with the Receiving Agent.

Refunds In the event that the number of Offer Shares to be received by an

Applicant, as confirmed by the Joint Lead Underwriters, is less than the
number covered by its Application, or if an Application is rejected by the
Company, then the Joint Lead Underwriters shall refund, without
interest, within five (5) Banking Days from the end of the Offer Period,
all or a portion of the payment corresponding to the number of Offer
Shares wholly or partially rejected. All refunds shall be made through
the Joint Lead Underwriters or the PSE Trading Participant with whom
the Applicant has filed the Application, at the risk of the Applicant.

Registration and Lodgment of
Shares with PDTC
The Offer Shares are required to be lodged with PDTC. The Applicants
must provide the required information in the space provided in the
Application to effect the lodgment. Failure to do so or the provision of
incomplete or incorrect information may lead to the designation of []
as the default broker. The Offer Shares will be lodged with the PDTC at
least two (2) Trading Days prior to the Listing Date.

The Applicant may request for
stock certificates evidencing
through his/her broker after
incurred by such issuance
Applicant.
the uplifting of their shares and to receive
their investment in the Offer Shares
the Listing Date. Any expense to be
of certificates shall be borne by the

Listing and Trading
The Offer Shares are expected to be listed on the PSE under the
symbol [EAGLE]. The application of the Company for listing has been
approved by the PSE for the Listing of the Offer Shares on the PSE
Main Board on []. All of the outstanding and issued shares of the
Company, including the Offer Shares issued pursuant to the Offer, are
expected to be listed on the PSE on []. Trading is expected to
commence on the same date.

Dividends The Company intends to pay dividends annually in the amount of up to

50% of its audited net income after tax of the previous year subject to
compliance with the requirements of applicable laws and regulations
and subject to investment plans and financial condition. The amount of
dividends will be reviewed periodically by the Board in light of the
Company's earnings, financial condition, cash flows, capital
requirements and other considerations while maintaining a level of
capitalization that is commercially sound and sufficient to ensure that
the Company can operate on a standalone basis.

Dividends shall be declared and paid out of the Companys unrestricted

retained earnings which shall be payable in cash, property or stock to
all shareholders on the basis of outstanding stock held by them. Unless
otherwise required by law, the Board, at its sole discretion, shall
determine the amount, type and date of payment of the dividends to the
shareholders, taking into account various factors, including:

the level of the Companys earnings, cash flow, return on equity

and retained earnings;
12
 its results for and its financial condition at the end of the year in
respect of which the dividend is to be paid and its expected
financial performance;
the projected levels of capital expenditures and other
investment programs;
restrictions on payments of dividends that may be imposed on
it by any of its financing arrangements and current or
prospective debt service requirements; and
such other factors as the Board deems appropriate

In relation to Preferred Shares issued by the Company, pursuant to the

provisions of the Articles of Incorporation of the Company, the holders
thereof are entitled to receive cash dividends upon declaration made at
the sole option of the Board. The annual dividends shall be at the rate
of six percent (6%) calculated in respect of each share by reference to
the issue price thereof. The dividends of the preferred shares are
cumulative. No dividend can be declared and paid on the common
shares unless cash dividends have been declared and paid to all
holders of preferred shares.

Tax Considerations Documentary stamp tax on the issuance of the Offer Shares shall be
for the account of the Company. See Philippine Taxation on page 118
of this Preliminary Prospectus for further information on the tax
consequences of this issuance.

Lock-up The PSE Consolidated Listing and Disclosure Rules, (the PSE Listing
Rules) require an applicant company for the Main Board to cause its
existing shareholders owning at least 10% of the outstanding shares of
the Company not to sell, assign or in any manner dispose of their shares
for a period of 180 days after the listing of the shares. In addition, under
the PSE Listing Rules, if there is any issuance or transfer of shares (i.e.,
private placements, asset for shares swap or a similar transaction) or
instruments which lead to issuance of shares (i.e., convertible bonds,
warrants or a similar instrument) done and fully paid for within 180 days
prior to the listing date, and the transaction price is lower than that of
the listing price, all shares availed of shall be subject to a lock-up period
of at least 365 days from full payment of the aforesaid shares.

The common shares of the following shareholders are covered by the

180-day lock-up requirement:

FECC 3,085,714,283 common shares

Ramon S. Ang 1,317,857,139 common shares

The common shares of the following shareholders are covered by the

365-day lock-up requirement:

Luis A. Vera Cruz, Jr 1 common share

Melinda Gonzales-Manto 1 common share
Manuel P. Daway 1 common share
Ricardo C. Marquez 1 common share
Martin S. Villarama, Jr. 1 common share
Jose P. Perez 1 common share

To implement this lock-up requirement, the PSE requires, among

others, to lodge the shares with the PDTC through a participant of the
PDTC system for the electronic lock-up of the shares or to enter into an

13
 escrow agreement with the trust department or custodian unit of an
independent and reputable financial institution.

Expected Timetable The timetable of the Offer is expected to be as follows (the dates
provided below are dates in the Philippines):

Price Setting [April 26, 2017]

Underwriters and PSE Trading [May 2-9, 2017]

Participants Offer Period

PSE Trading Participants [May 2-4, 2017]

Commitment Period

Deadline for PSE Trading [May 4, 2017]

Participants to Submit Firm
Orders and Commitments

Local Small Investor Offer [May 2-8, 2017]

Period

Payment Date for PSE Trading [May 9, 2017]

Participants and Joint Lead
Underwriters

Listing Date and [May 16, 2017]

commencement of trading on
the PSE

The dates included above are subject to the approval of the PSE and
the SEC, market, and other conditions, and may be changed.

Legal Counsel to the Issuer Picazo Buyco Tan Fider & Santos

Legal Counsel to the Joint SyCip Salazar Hernandez & Gatmaitan

Issue Managers, Joint Lead
Underwriters and Joint
Bookrunners

Stock Transfer Agent Rizal Commercial Banking Corporation Trust Division

Receiving Agent Rizal Commercial Banking Corporation Trust Division

Escrow Agent Bank of Commerce Trust Division

14
Summary Historical Financial Information
The summary of the consolidated historical financial information for the period ended December 31,
2016, 2015 and 2014, and for the years ended December 31, 2016, 2015 and 2014 should be read in
conjunction with the accompanying audited consolidated financial statements and the related notes
thereto. The consolidated financial statements of Eagle Cement and its subsidiaries as at and for the
years ended December 31, 2016 and 2015 were audited by Reyes Tacandong & Co. The financial
statements of the Company for the year ended December 31, 2014 was audited by Isla Lipana & Co.

Unless otherwise stated, the Company has presented its consolidated financial results under PFRS.
Potential investors should read the following data together with the more detailed information contained
in Managements Discussion and Analysis of Historical Financial Condition and Results of Operations
and the accompanying consolidated financial statements and related notes. The following data is
qualified in its entirety by reference to all that information.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31

2016 2015 2014

Net Sales 13,275,952,635 11,064,531,576 8,760,422,609

Cost of goods sold 6,339,354,109 6,295,314,045 4,843,152,880

Gross profit 6,936,598,526 4,769,217,531 3,917,269,729

Operating expenses 1,293,523,020 826,477,140 639,178,525

Income from operation 5,643,075,506 3,942,740,391 3,278,091,204

Finance costs
(375,468,671) (241,766,548) (268,794,596)
Interest income
89,001,566 61,475,979 35,716,999
Share in profit of joint venture
11,872,008

Other income net 53,803,426 24,032,820 126,332,320

Income before income tax 5,410,411,827 3,786,482,642 3,183,217,935

Income tax expense 1,297,652,266 106,811,198 68,296,841

Net income 4,112,759,561 3,679,671,444 3,114,921,094

Other comprehensive income 47,403,561 49,507,372 116,447,928

Total comprehensive income
4,160,163,122 3,729,178,816 3,231,369,022

15
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION INFORMATION

For the years ended December 31

2016 2015 2014

Current assets 9,208,755,582 7,102,473,431 6,633,313,667

Noncurrent assets 18,360,011,347 16,097,648,450 12,885,183,534

Total Assets 27,568,766,929 23,200,121,881 19,518,497,201

Current liabilities 2,760,002,197 2,556,095,463 2,142,871,432

Noncurrent liabilities 6,582,895,454 6,003,320,264 6,374,098,431

Total liabilities 9,342,897,651 8,559,415,727 8,516,969,863

Total equity 18,225,869,278 14,640,706,154 11,001,527,338

Total liabilities and equity 27,568,766,929 23,200,121,881 19,518,497,201

OTHER CONSOLIDATED FINANCIAL INFORMATION

For the years ended December 31

2016 2015 2014

Net working capital 6,448,753,385 4,546,377,968 4,490,442,235

Operating margin before other

expenses 42.51% 35.63% 37.42%

EBITDA 6,363,300,860 4,434,893,208 3,920,602,363

Capital expenditure 2,151,144,174 2,591,742,094 2,861,315,856

Depreciation and amortization 666,421,928 468,119,997 504,306,831

CALCULATION OF EBITDA

For the years ended December 31

2016 2015 2014

Net
income 4,112,759,561 3,679,671,444 3,114,921,094

Add:
Income tax expense 1,297,652,266 106,811,198 68,296,841

Depreciation and
Amortization 666,421,928 468,119,997 504,306,831

Finance Costs 375,468,671 241,766,548 268,794,596

Less:

Interest Income
89,001,566 61,475,979 35,716,999

EBITDA 6,363,300,860 4,434,893,208 3,920,602,363

16
Risk Factors
General Risk Warning

An investment in the Offer Shares involves a number of risk s. Prospective investors should carefully
consider the risk s described below, in addition to other information contained in this Preliminary
Prospectus, including the consolidated financial statements of the Company and notes relating thereto,
before mak ing any investment decision relating to the Offer Shares. This section does not purport to
disclose all the risk s and other significant aspects of investing the Offer Shares. These risk factors are
presented below, and are of equal importance and are only separated into categories for ease of
reference.

The past performance of the Company is not an indication of its future performance. The occurrence of
any of the events discussed below and any additional risk s and uncertainties not presently k nown to
the Company or are currently considered immaterial could have a material adverse effect on the
business, prospects, results of operation, and financial condition of the Company.

The price of securities can and does fluctuate, and any individual security may experience upward or
downward movements and may even become valueless. There is an inherent risk that losses may be
incurred rather than profit being made as a result of buying and selling securities.

The occurrence of any of the events discussed below and any additional risk s and uncertainties not
presently k nown to the Company or that are currently not considered material could have a material
adverse effect on the business, prospects, results of operation, and financial condition of the Company
and the Offer Shares and the investors may lose all or part of their investment.

The means by which the Company intends to address the risk factors discussed herein are principally
presented under the captions BusinessKey Strengths beginning on page 65, BusinessBusiness
Strategies beginning on page 68, Managements Discussion and Analysis of Historical Financial
Condition and Results of Operations beginning on page 39 and Board of Directors and Officers
Corporate Governance beginning on page 89] of this Preliminary Prospectus.

Prudence Required

This section does not purpose to disclose all of the risk s and other significant aspects of investing in
these securities. Investors should seek professional advice regarding any aspect of the securities such
as the nature of the risk s involved in the trading of the securities, especially in the trading of high-risk
securities. Investors should undertak e independent research regarding the Company and the trading
of securities before commencing any trading activity and may request all publicly available information
regarding the Company and the Offer Shares from the SEC.

Professional Advice

An investor should seek professional advice if he or she is uncertain of, or has not understood any
aspect of this offer or the nature of risk s involved in purchasing, holding and trading of the Offer Shares.
Each investor should consult its own counsel, accountant and other advisors as to legal, tax, business,
financial and related aspects of an investment in the Offer Shares.

Risks relating to the Business

The Company operates in a highly competitive industry with major players consisting of
multinational cement companies in the local space. An uncurtailed level of cement importation
by other players may depress prices and further heighten the competitive environment. The
market share, revenue, or margins of the Company may decline due to aggressive price
competition.

The cement industry in the Philippines is highly competitive given the number of multinational cement
companies with an array of product offerings with high brand equity as well as the recent entry of
imported clinker and cement in the country. Competition often involves aggressive pricing strategies to
gain or protect market share. In addition to domestic competition, the Company may also lose market
17
share or experience a decline in revenue growth in the event it is unable to compete effectively against
imports.

As an efficient cement producer, aggressive competition is welcomed by the Company as it allows them
to place amongst the top market players. To support this, in a short space of time, the Company has
risen to become a strong 4th player in terms of market share despite the limited track record relative to
its competitors who have already established a strong presence both locally and internationally for many
years. 1 Because of its strengths - see Business - Overview on page 57 of this Preliminary Prospectus
- the Company is able to price its products competitively against other market players. The Company
will continue to capitalize and improve on these strengths to be a market mover in the cement industry.

The Company may also face tighter competition due to uncurtailed cement importation by foreign
players or independent traders at substantially lower prices. The entry of imported cement priced at a
discount to market may result in a significant decrease of cement prices affecting the profitability of all
domestic manufacturers. Countries with excess cement supply may potentially export cement products
to the Philippines, including Vietnam, Indonesia, Thailand, and, China. According to the 2015 CEMAP
report, imported cement for 2015 was 314,000 MT compared to only 4,000 MT in 2014. In 2016,
imported cement is estimated to have reached 3.8 Million MT. Please refer to The Philippine Cement
Industry on page 47 of this Preliminary Prospectus.

The Company believes the future growth of imported cement may be restricted due to limitations in port
capacity and infrastructure in or near major areas of economic activity which constitute a significant
demand for cement. In addition, the unloading of imported cement is not currently considered a first
priority by port authorities.

The business, prospects, financial condition and results of operations of the Company depend on the
ability to compete effectively and maintain or increase market share. In the relatively consolidated
cement industry, the Company primarily competes based on product quality, market coverage,
distribution network, product offerings, marketing strategy, brand equity and pricing.

The business of the Company contains certain processes that may affect the environment and
hence, is subject to compliance with environmental standards of the Government. Non -
compliance may lead to fines, penalties and/or legal sanctions which may disrupt the
operations of the Company

The businesses and operations of the Company are subject to a number of health, safety, security and
environment laws, rules and regulations governing the cement industry in the Philippines. These laws
and regulations impose requirements relating to raw materials sourcing, cement manufacturing, and
other aspects of the business of the Company. In particular, the Company is subject to extensive
regulation by the Department of Environment and Natural Resources (DENR), Department of Energy
(DOE), and local government units (LGU).

In particular, raw material sourcing and cement manufacturing are considered environmentally critical
activities for which an Environmental Impact Study (EIS) and an Environmental Compliance Certificat e
(ECC) are mandatory. Environmental laws and regulations in the Philippines have become
increasingly stringent and it is possible that these laws and regulations will become significantly more
stringent in the future. The adoption of new laws and regulations, new interpretations of existing laws,
increased governmental enforcement of environmental laws or other developments in the future may
require additional capital expenditures or the incurrence of additional operating expenses in order to
comply with such laws and to maintain current operations as well as any costs related to fines and
penalties.

While the Company believes that it has, at all relevant times, materially complied with all applicable
laws, rules and regulations, there is no assurance that changes in laws, rules or regulations or the
interpretation thereof of relevant government agencies, may not adversely impact the business
operations, financial condition and results of operations of the Company. Failure to comply with relevant
laws and regulations may result in financial penalties or administrative or legal proceedings against the

1 Philippine Cement Market Report

18
Company, including the revocation or suspension of the licenses or operation of its facilities, all of which
could adversely impact the business, prospects, financial condition, and results of operation of the
Company. In this regard, in connection with the expansion of the Bulacan Cement Plant through the
construction and operation of Line 3, the Company has applied for the amendment of its ECC to also
cover the construction and operation of the anticipated additional facilities and activities. The Company
has submitted the required documents to support the application for the amendment of its ECC, in
compliance with the requirements of environmental laws, rules and regulations. The application has
been received and acknowledged by the EMB, and is currently being processed. There is no assurance
that said application will be approved in a timely manner or at all. However, given the fact that the
Company has submitted all the required documents relative to the application, the Company expects
that the DENR will issue the amended ECC (to cover Line 3 construction and operations) in due course.

The Company and its subsidiaries own MPSAs which provide access to substantial limestone reserves .
For further discussion on the MPSAs, please refer to Business Raw Material Sources on page 63
of this Preliminary Prospectus. Given the reliance of the Company on such mineral deposits to produc e
cement, the Company is hence exposed to possible unfavorable findings of the DENR and may run the
risk of being subject to penalties or worse, the revocation of any or all of its MPSAs. Recently, the DENR
announced the potential cancellation of 75 MPSAs (37 in Mindanao, 27 in Luzon, and 11 in Visayas).
The Company benefits from limestone reserves which the MPSAs provide and as such, is able to price
competitively relative to other cement manufacturers. Should the MPSAs of the Company be revoked,
the Company may resort to importation of clinker which is subject to price volatilities, thereby potentially
reducing its margins.

The Company is in constant consultation with relevant government agencies and other approving
bodies to ensure that all requirements, permits and approvals are anticipated and obtained in a timely
manner. Further, the Company maintains a strong compliance culture and has processes in place in
order to manage adherence to laws and regulations.

One of the requirements under the MPSA is for the Company to provide for a mine rehabilitation and
decommissioning plan. The Company demonstrates its commitment to adhere with t his provision by
setting aside funds for mine rehabilitation and by employing best practices in environment al
management to reduce the impact of mining in the environment such as maximizing the contract areas
and improving the quality of the mineral commodities through technological efficiency. The Company
also has a dedicated compliance team which monitors changes in environmental laws and ensures that
all plants and mining sites are in compliance with relevant environmental regulations.

Please refer to Business - Health, Safety, and Environmental Matters on page 74 of this Preliminary
Prospectus.

The main asset of the Company is its manufacturing plant in Bulacan. Any prolonged or major
disruption of operations of its Bulacan Cement Plant may adversely affect the business of the
Company

The Company operates in two (2) provinces namely Bulacan and Bataan though it primarily
manufactures clinker in its plant in Barangay Akle, San Ildefonso, Bulacan (the Bulacan Cement
Plant). The Bulacan Cement Plant, like any other cement plant, is subject to risks present in
manufacturing plants such as equipment breakdowns, labor-related disruptions, natural calamities,
ordinances or directives from Government agencies and power interruptions. The Bulacan Cement
Plant houses Line 1 and Line 2 which collectively produces 130 Million cement bags annually while the
Bataan plant produces 12 Million cement bags.. The Company is also expanding the plant through the
construction of Line 3 which will increase capacity by 50 Million cement bags annually.

The Bulacan Cement Plant is exposed to periodic repair, maintenance or servicing, plant breakdowns ,
industrial accidents, government action, equipment failure, human error, any sustained disruptions in
the supply of raw materials and utilities such as water or electricity, natural calamities or communal
unrest or acts of terrorism which may affect the normal operations of the Company. Any prolonged
major disruption caused by any of the above will cause damage to the cement plant or inventories and
as such may impact negatively on the financial condition and business operations of the Company.

19
In any given year, the two (2) production lines of the Bulacan Cement Plant are typically shut down for
a period of 30 days in aggregate for major maintenance and repair and an additional 20 days in
aggregate for minor maintenance works. The Bataan grinding plant also has shutdown period for
maintenance and repairs. The shut downs of the production lines are scheduled in intervals to ensure
that the plant remains operational and in good condition. This operational flexibility will be enhanc ed
with the completion of Line 3. Furthermore, the Company has also procured the necessary insurances
in line with industry practice which help mitigate certain risks such as business disruptions, natural
calamities and third party liabilities.

Please refer to Business Strategies on page 68 of the Preliminary Prospectus.

The business operations of the Company are dependent on the growth of certain key industri es
in the Philippines. A slowdown in any of these industries may adversely affect the ability of the
Company to grow and meet its targets.

Historically, the performance of the cement industry is primarily driven by the growth in the construction,
real estate, and infrastructure industries. Growth in these key industries may be affected by certain
factors including market trend, overall economic growth and government policy.

The Company primarily serves the construction industry and by extension the infrastructure and real
estate sectors. Despite the strong consumption of cement shown by the cement industry in recent years,
it may still be affected should there be a national economic downturn leading to the delay of construction
projects and real estate developments. A change in government policy and lowered budget spending
on infrastructure may also lead to lower sales growth expectations.

There is no assurance that the construction industry and real estate and infrastructure sectors will
continue to experience significant growth in the future. Any unforeseen decline in cement demand from
these industries may adversely affect the business, prospects, financial condition and results of
operation of the Company.

The Duterte administration has communicated its support for the infrastructure industry pegging the
new term as the Golden Age of Infrastructure. According to the Public -Private Partnership Center, a
total of 64 big-ticket projects are either for implementation or in the pipeline as part of the infrastructure
projects of the new administration. These projects include major road networks, railway systems, bus
rapid transit systems, airports and seaport modernizations. Another 15 ongoing projects are being
implemented by the Department of Public Works and Highways. The total infrastructure budget in the
next six (6) years is expected to be at least 8 Trillion.2

Given the aforementioned, demand for cement in the Philippines is expected to be strong considering
the expected growth in the infrastructure industry. The Company is strategically positioned to take
advantage of the Golden Age of Infrastructure and support the growing demand for cement.

The business of the Company is highly capital-intensive and necessitates access to sufficient
funding to sustain its capital and operating requirements. Limited or non-availability of
financing in the market, and/or its inability to access funding may affect the growth prospects
of the Company.

The Company needs a substantial amount of raw material in order to produce its internal supply targets.
The Company is also dependent on fleets of trucks in order to transport the raw materials to its
processing plants. These factors require sufficient funding to allow the Company to continuously
operate in its ordinary business. Furthermore, the capacity of the Company to capitalize on growt h
opportunities in the market is anchored on its ability to raise sufficient funding. The expansion plans of
the Company are expected to be financed through a combination of internally generated funds and
external fund raising activities through debt and capital markets.

The availability of financing is subject to many factors which may include, but are not limited to:
Philippine banking regulations, limiting bank exposure to a single borrower or related group of

2 Department of Budget and Management.

20
borrowers, compliance with existing debt covenants, and perception in the capital markets regarding
Eagle Cement and the cement industry. These may also include other factors which are out of the
control of the Company such as general conditions in the debt and equity capital markets, political
instability, economic downturn, social unrest and changes in the Philippine regulatory environment. In
addition, while there are growing signs of recovery from the current disruptions in the global, capital and
credit markets, such disruption may recur, continue indefinitely and intensify and such disruption could
adversely affect the availability of financing to the Company. Any inability to obtain financing from banks,
other financial institutions and capital markets may adversely impact the business, prospects, financial
condition, and results of operation of the Company.

The Company believes that it can withstand such events with a system of financial prudence and
corporate governance that provides the foundation for its risk management initiatives. It has registered
healthy profit margins over the last three (3) years with an average gross profit margin of [46.69%]. It
has likewise exhibited a strong cash flow position with EBITDA margin averaging [44.26%] over the
same period. The Company also managed to keep its leverage at a healthy level with debt -to-equit y
ratio of 0.58 for the period ended December 31, 2016. Please see Managements Discussion and
Analysis of Historical Financial Condition and Results of Operations on page 39.

The Company intends to pursue its long-term growth strategy through expansions, acquisiti ons
and joint ventures outside of its existing market coverage. All or some of these expansions,
acquisitions and joint ventures may not turn out to be a success and may even have an adverse
effect on the existing profitability and financial condition of the Company.

The Company intends to expand operations outside of its existing market coverage in the Philippines
by increasing its existing cement production capabilities and acquiring new raw material sources to
support the expected growth in demand for cement. There is also a possibility for the Company to enter
into joint ventures which align with the overall expansion and growth plans of the Company.

These plans for expansions, acquisitions and joint ventures involve risks, and there can be no
assurance that every plan will turn out to be a success. Certain risks can adversely affect the growt h
such of the Company such as but not limited to (i) delays in the implementation of expansion plans; (ii)
the possibility that acquisitions made or joint ventures entered into as part of the expansion plan would
not be successfully integrated into the operations and internal controls of the Company; (iii) investment s
in expansions, acquisitions and joint ventures will not yield the expected return of the Company;

The Company is currently constructing the third line of the Bulacan Cement Plant. There is no assurance
that Line 3 will be completed on schedule and that the Company will not incur additional expenses.

The use of funds and the timeline set for the development of expansion and acquisition projects may
be affected by factors which are generally beyond the control of the Company, such as, but not limited
to: (i) delays in obtaining all necessary location, zoning, land use, building, development and other
required governmental and regulatory licenses, permits, approvals and authorizations; (ii) delays in
construction due to fortuitous events and unforeseen technical delays and engineering difficulties; and
(iii) an increase in the cost of construction and building materials due to global and local economic
changes.

Any plans for expansion, acquisition or joint ventures must first be examined by the Company through
a comprehensive due diligence process prior to execution. Historically, the Company achieved success
with the timely completion of its Line 1 and Line 2 in [2010 and 2016] respectively. The highly-seasoned
and capable management team of the Company, along with its skilled consultants, assesses the
feasibility of these plans and ensures that they are properly executed and therefore meet the high
standards of the Company.

The manufacturing operations of the Company rely heavily on fuel and electricity to
operate. Increases in cost of fuel and electricity as well as inadequacy of coal supply may have
a negative effect on the profitability and sustainability of operations of the Company.

The cement manufacturing process utilizes significant amounts of fuel and electricity. Any significant
increase in the price of coal and electricity and the uncertainty of coal supply may adversely affect the
business, prospects, financial condition and results of operations of the Company. For the years 2016,

21
2015 and 2014, fuel costs accounted for approximately 20.87%, 16.34%, and 18.98%, respectively of
the cost of goods sold of the Company. Meanwhile, electricity costs accounted for approximately
29.77%, 28.38%, and 23.55% of the cost of goods sold of the Company for the years 2016, 2015, and
2014, respectively.

The kilns at the Bulacan Cement Plant of the Company are fueled by coal sourced from Semirara Mining
and Power Corporation (SMPC) and Manyplus Energy Pte. Ltd. (MEPT). Historically, the Company
has entered into supply agreements with SMPC and MEPT. The renewal of these agreements are
currently being negotiated by the parties. These supply agreements are renewed annually. Should the
supply of coal of the Company from SMP and MEPT get disrupted, the Company has the flexibility to
address any resulting shortfall in its coal supply by purchasing coal from other suppliers.

The Company procures majority of its electricity requirements from and is reliant on bilateral contract
with the Manila Electric Company. Electricity costs in the Philippines are among the highest in Asia and
its supply and quality are affected by a limited number of suppliers, a complex regulatory environment ,
low grid reliability, the geography of the Philippines, and the climate and weather conditions of the
country. To reduce the reliance to the grid of the Company for its power or energy consumption
requirements, it constructed in its Bulacan Cement Plant, a 7 MW Waste Heat Recovery (WHR)
Facility which utilizes excess heat from the cement kiln production line to generate electricity. The WHR
facility further enhances the operating efficiency of the Company which translates to lower costs of fuel
and energy consumption of the cement plant. As a result of the said operating efficiency, the total
savings as of December 31, 2016 was 530 Million.

The Company is engaged in a business involving personnel with specialized skills and technical
qualifications. Unavailability of qualified personnel in the market may result in delays or
disruption in the operations and expansion plans of the Company.

The manufacturing of cement requires employing personnel with a specialized set of skills and technical
qualifications. As of December 31, 2016, the Company employs at least 327 employees for its existing
lines and business operations in Luzon. The Company is constructing Line 3 for its Bulacan Cement
Plant which is targeted to be completed by 2018. On top of this, the Company may also potentially set
up cement plants within and outside the Luzon area as part of its expansion plans and strategy of
increasing market presence. Such activities would necessitate the employment by the Company of a
significant manpower complement. After the Visayas and Mindanao expansion, the total number of
personnel needed may reach up to 500.

A delay in the hiring or the unavailability of qualified personnel in the labor market, this may result to
disruptions in the continuing operations of the Company and delay the implementation of its expansion
plans which may adversely affect the business, prospects, financial conditi on and results of operations
of the Company.

The Company has a rewards and recognition policy that is competitive with industry standards which
can potentially attract and retain qualified personnel. The Companys balanced score card and annual
forced ranking of employees are among the most stringent performance management tools being
practiced by the industry. Salaries and benefits are reviewed periodically and adjusted accordingly to
retain current employees and attract new talent. In addition to its statutory benefits, the Company
maintains benefits to provide for the increased security of its employees in the following areas:
healthcare, leaves, miscellaneous benefits, loans and financial assistanc e applicable to a variety of
uses, retirement benefits, survivor security and death benefits. The employees of the Company are
provided with the necessary support (e.g. trainings and seminars) which enable them to improve their
competencies and deliver excellent performance.

The business of the Company is partly reliant on third-party service providers. Failure of such
third parties to provide their services or their inability to deliver adequate service may have an
adverse impact on the continuing operations of the Company.

The Company engages third-party service providers for its raw material sourcing and product
distribution activities. The Company relies on a specialized group of suppliers with the technical
capability of engaging in blasting/earthmoving activities for its raw material sourcing. If any of these
third-party providers cease to provide services to the Company, it may necessitate engaging other
22
providers for such services, which may result in inefficiencies and/or higher costs for the Company. This
may result to a reduction in margins for the products of the Company.

The Company also engages third-party trucking distribution companies for the delivery of some of its
goods to customers and for delivery of raw materials to crushers. If any of these third-party providers
cease to provide services to the Company, it may necessitate engaging other providers for such
services, which may result in delivery delays and/or higher costs for the Company.

There is no assurance that the business, prospects, financial condition and results of operation of the
Company will not be materially adversely affected in the event that the Company is not able to engage
or renew the services of third party providers with respect to the provision of the foregoing services.

To manage dependence on certain third party service providers, the Company ensures that it has a line
of other suppliers which they can tap in the event that the existing providers cease to provide the said
services.

The Company is exposed to an intellectual property rights litigation. Any unfavorable decision
may expose the Company to fines and penalties and may disrupt the operations of the Company.

The Company is currently involved in litigation involving its trademarks. Republic Cement Corporat ion
(RCC)3 opposed several trademark registration applications and sought the cancellation of the
registered trademarks of Eagle Cement. In 2014, the Intellectual Property Office (IPO) upheld the
validity of the registered trademarks of the Company and denied the opposition to the application for
trademark registration on the justification that Republic Cement did not actually use the mark . In 2015
the Court of Appeals affirmed the decision of the IPO. In a resolution dated January 23, 2017, the
Supreme Court dismissed the Petition for Review filed by RCC.

The Company believes its intellectual property rights will be upheld. Nonetheless, the Company is
aware that there is always a possibility for an unfavorable ruling and therefore makes sure that it is
always on top of the issue to avoid any chances of the decisions of the IPO and the CA being revers ed.
In the unlikely event of an unfavorable final ruling, the business, prospects, financial condition and
results of operations of the Company may be adversely affected.

Given this, the Company has appointed a point person within its internal legal team to focus on the
aforementioned litigation to make sure that the risk of an unfavorable ruling is mitigated. The Company
considers protection of its intellectual property rights as top priority. See the section on Legal
Proceedings on page 76 of this Preliminary Prospectus.

The Company is reliant to a large extent on its senior management and other key officers.

The current and future performance of the Company depends to a large extent on the continued servic e
of its senior management team and other key officers. The loss of the services of key officers or
members of the management team could result to a disruption in the operations of the Company and
may delay the execution of its business plans and growth strategies. Moreover, the Company may not
be able to replace such key officers within a reasonable period of time with individuals who have similar
expertise, experience, and vision. In such event, the business operations of the Company may be
disrupted resulting to an impairment of its financial condition, results of operations and future prospects.

To mitigate this risk, the Company has adopted a business continuity plan and succession plan by
identifying members of the management who will be able to assume and take on the role and additional
responsibilities arising from such departure. The Company has established organizational policies and
procedures for the development and advancement of its employees to ensure that there is continuity of
the business by employees with superior skills and talent; thereby, diminishing overdependence on key
individuals in the Company.

3 Now CRH-Aboitiz

23
Risks Relating to the Philippines

Any economic slowdown or deterioration of economic conditions in the Philippines may

adversely affect the business and operations of the Company in the Philippines.

The Company derives all of its revenues from domestic operations and thus is highly dependent on the
state and performance of the Philippine economy. The Philippines has historically experienced periods
of slow or negative economic growth, high inflation, significant depreciation of the peso and the
imposition of exchange controls. As the growth prospects of the Company largely depends on the
growth of certain key sectors or industries of the economy, uneven rates of economic growth may have
an indirect impact on its business and operations.

The future growth of the Company will likewise depend on whether the Philippine economy can maintain
a consistent growth rate. There can be no assurance that growth in Philippine economy will necessarily
translate into an increase in demand for the products of the Company. Furthermore, there can be no
guarantee that current or future Governments will adopt economic policies conducive to sustaining
growth in the Philippines.

There can also be no assurance that an economic slowdown in the Philippines will not recur or strong
economic fundamentals will be sustained in the future. Slowdown in the economies of the United
States, the European Union and certain Asian countries have affected, and may adversely affect in
the future, economic growth in the Philippines.

The business operations of the Company may be affected by any political instability and armed
conflict in the Philippines.

The Philippines has, from time to time, experienced political instability and armed conflict. In the past
decade, there has been political instability in the Philippines, including extrajudicial killings, alleged
electoral fraud, impeachment proceedings against two (2) former presidents, the chief justice of the
Supreme Court of the Philippines, and public and military protests arising from alleged misconduct by
previous administrations. In addition, a number of current and past officials of the Philippine
government are currently under investigation on corruption charges stemming from allegations of
misuse of public funds, extortion, and bribery. An unstable political environment may also arise from
the imposition of emergency executive rule, martial law or widespread popular demonstrations or
rioting.

There can be no assurance that acts of political violence will not occur in the future and any such
events could negatively impact the Philippine economy. Likewise, no assurance can be given that the
future political or social environment in the Philippines will be stable or that current and future
governments will adopt economic policies conducive for sustaining economic growth.

Political or social instability in the Philippines could negatively affect the general economic conditions
and business environment in the Philippines, which could have a material adverse effect on the
business, operations, and financial position of the Company.

Territorial disputes involving the Philippines and its neighboring countries may adversely affect
its economy and business environment.

Competing and overlapping territorial claims by the Philippines, China and several Southeast Asian
nations (such as Vietnam, Brunei, Malaysia) over certain islands and features in the West Philippine
Sea (South China Sea) have for decades been a source of tension and conflicts. The South China Sea
covers more than 3 Million square kilometers in terms of area and is home to some of the biggest coral
reefs of the world. [[It is estimated that over US$5 trillion worth of trade passes through the South China
Sea annually].4 It is also believed that under the seabed lies vast unexploited oil and natural gas
deposits.

4U.S. Congressional Research Service Maritime and Territorial and Exclusive Economic Zone Disputes Involving
China: Issues for Congress Report.

24
China claims historic rights to nearly all of the West Philippine Sea based on its so-called nine-das h
line and in recent years dramatically expanded its military presence in the sea which has raised
tensions in the region among the claimant countries. In 2013, the Philippines became the first claimant
country to file a case before the Permanent Court of Arbitration, the international arbitration tribunal
based at the Hague, Netherlands to legally challenge claims of China in the West Philippine Sea and
to resolve the dispute under the principles of international law as provided for under the United Nations
Convention on the Law of the Sea (UNCLOS). In July 2016, the tribunal rendered a decision stating
that the Philippines has exclusive sovereign rights over the West Philippine Sea (in the South China
Sea) and that the nine-dash line claim of China is invalid. The Philippine government, under the
Duterte administration, and China have taken meaningful action to de-escalate tensions concerning
their territorial disputes.

There is no guarantee that the territorial dispute between the Philippines and other countries, including
China, would end or that any existing tension will not escalate further, as China has repeatedly
announced that it will not honor said ruling. In such event, the Philippine economy may be disrupted
and its business and financial standing may be adversely affected.

The Philippines is susceptible to being exposed to natural disasters, catastrophes, and severe
weather conditions which may disrupt the business operations of the Company.

The Philippines has experienced a number of major natural catastrophes over the years, including
typhoons, droughts, floods, volcanic eruptions and earthquakes. There can be no assurance that the
occurrence of such catastrophes will not materially disrupt the operations of the Company. The
ordinary course of business of the Company is dependent on a significant amount of raw material,
transportation of raw material and the effectivity of its property, plants and equipment. There is a risk
that these natural disasters, catastrophes and severe weather conditions may cause substantial
inventory or property loss, plant and equipment damages and may affect the ability of the Company
to conduct its business. There is also a risk that the Company may not be able to rebuild or restore
operations within a reasonable amount of time.

Although there can be no assurance that it will be adequately compensated for all damages and
economic losses resulting from natural catastrophes, the Company maintains comprehensive insurance
against natural catastrophes to cover its various developments and products to mitigate the risk of a
major disruption in its business operations.

Any downgrade in the sovereign credit ratings of the Philippines may adversely affect the
financial markets and restrict the access to capital of Philippine companies, including the
Company.

Historically the sovereign debt of the Philippines has been rated relatively low by international credit
rating agencies. The long-term foreign currency-denominated debt of the country was upgraded by Fitch
to the investment-grade rating of BBB- in March 2013 (who revised its outlook from stable to positive in
September 2015), by Standard & Poors to the investment-grade rating of BBB Stable in May 2014 and
by Moodys to the investment-grade rating of Baa2 Stable in December 2014. However, no assurance
can be given that Fitch, Moodys, Standard & Poors or any other international credit rating agency, will
not downgrade the credit ratings of the Government in the future and, therefore, Philippine companies,
including the Company. Any such downgrade could have an adverse impact on the liquidity in the
Philippine financial markets, the ability of the Government and Philippine companies, including the
Company, to raise additional financing and the interest rates and other commercial terms at which such
additional financing is available.

Acts of terrorism, separatist group activities, and violent crimes may have an adverse effect
on the business operations of the Company.

The Philippines has also been subject to a number of terrorist attacks since 2000, and the Armed
Forces of the Philippines has been in conflict with groups which have been identified as being
responsible for terrorist activities in the Philippines. In addition, bombings have taken place in the
Philippines, mainly in cities in the southern part of the country. An increase in the frequency, severit y
or geographic reach of these terrorist acts, violent crimes, bombings and similar events could have a
material adverse effect on investment and confidence in, and the performance of, the Philippine

25
economy.

The Company is subject to foreign exchange controls.

Generally, the Philippine residents may freely dispose of their foreign exchange recei pts and foreign
exchange may be freely sold and purchased outside the Philippine banking system. However, the
Monetary Board of the Bangko Sentral ng Pilipinas (BSP) has statutory authority, with the approval
of the President of the Philippines, during a foreign exchange crisis or in times of national emergency,
to: (i) suspend temporarily or restrict sales of foreign exchange; (ii) require licensing of foreign
exchange transactions; or (iii) require the delivery of foreign exchange to the BSP or its des ignee
banks for the issuance and guarantee of foreign currency -denominated borrowings. The Philippine
government has, in the past, instituted restrictions on the conversion of Pesos into foreign currency
and the use of foreign exchange received by Philippine residents to pay foreign currency obligations.

The Company purchases certain critical equipment and parts of its cement plant abroad and requires
foreign currency to make these purchases. There is no assurance that the Philippine government will
not impose economic restrictions or regulatory controls that may restrict free access to foreign
currency. Any such restrictions could severely curtail the ability of the Company to pay for such critical
equipment and parts, which could materially and adversely affect its business, prospects, result of
operations, and financial condition.

Risks Relating to the Offer and the Offer Shares

The Company is subject to foreign ownership restrictions.

The Company is subject to foreign ownership restrictions on account of its ownership of land and
utilization of natural resources. Foreign ownership in the Company is limited to a maximum of 40% of
the issued and outstanding capital stock. The Company is proscribed from issuance or the transfer of
Shares to persons other than Philippine Nationals (as defined under Republic Act No. 7042, as
amended) if such issuance or transfer would result in a violation of the foreign ownership restrictions.
These restrictions may adversely affect the liquidity and market price of the Offer Shares to the extent
foreign investors are restricted from purchasing the Offer Shares in normal secondary transactions.
As of the date of this Preliminary Prospectus, the Company does not have any foreign equity.

There has been no prior market for the Common Shares, so there may be no liquidity in the
market for the Offer Shares and the price of the Offer Shares may fall.

There has been no prior trading in the Common Shares, thus there can be no assurance that an active
market for the Offer Shares will develop following the Offer or, if developed, that such market will be
sustained.

The Offer Price was determined after taking into consideration a number of factors including, but not
limited to, the prospects of the Company, the market prices for shares of companies engaged in related
businesses similar to the business of the Company, and prevailing market conditions. The price at
which the Common Shares will trade on the PSE at any point in time after the Offer may vary
significantly from the Offer Price.

The market price of the Common Shares may be volatile, which could cause the value of the
investments of the investors in the Shares to decline.

The market price of Shares could be affected by several factors, including:

general market, political and economic conditions;

changes in earnings estimates and recommendations by financial analysts;

changes in market valuations of listed stocks in general and other retail stocks in particular;

the market value of the assets of the Company;

26
 changes to Government policy, legislation or regulations; and

general operational and business risks.

In addition, many of the risks described elsewhere in this Preliminary Prospectus could materially and
adversely affect the market price of the Shares.

In part as a result of the global economic downturn, the global equity markets have experienced price
and volume volatility that has affected the share prices of many companies. Share prices for many
companies have experienced wide fluctuations that have often been unrelated to the operating
performance of those companies. Fluctuations such as these may adversely affect the market price
of the Shares.

There can be no guarantee that the Offer Shares will be listed on the PSE.

Purchasers of Offer Shares will be required to pay for such Offer Shares on the Settlement Date, which
is expected to be on or about []. There can be no guarantee that listing will occur on the anticipated
Listing Date or at all. Delays in the admission and the commencement of trading in shares on the PSE
have occurred in the past. If the PSE does not admit the Offer Shares onto the PSE, the market for
the Offer Shares will be illiquid and shareholders may not be able to trade the Offer Shares. This may
materially and adversely affect the value of the Offer Shares.

There will also be a gap between the date on which the Offer Price is determined and date on which
the listing and trading of the Common Shares is expected to commence on the PSE. During this period,
a delay in or termination of the listing and the trading of the Common Shares on the PSE may result
from the occurrence of any one or more events, including the Joint Lead Underwriters exercising their
respective termination rights under the relevant underwriting agreement. In the event the listing and
the commencement of trading on the PSE does not occur, the Offer may be terminated and investors
may not be allocated Common Shares for which they initially subscribed.

Investors may incur immediate and substantial dilution as a result of purchasing Shares in the
Offer Shares.

The issue price of the Offer Shares may be substantially higher than the net tangible book value of
net assets per share of the outstanding Shares. Therefore, purchasers of Offer Shares may
experience immediate and substantial dilution and the shareholders of the Company may experienc e
a material increase in the net tangible book value of net assets per share of the Shares they own. See
Dilution beginning on page 36 of this Preliminary Prospectus.

Shareholders may be subject to limitations on minority shareholders rights and regulations

may differ from those in more developed countries.

The corporate affairs of the Company are governed by its Articles of Incorporation and by-laws and
the Philippine Corporation Code. The laws of the Philippines relating to the protection of interests of
minority shareholders differ in some respects from those established under the laws of more
developed countries. Such differences may mean that the minority shareholders may have less
protection than they would have under the laws of more developed countries. The obligation under
Philippine law of majority shareholders and directors with respect to minority shareholders may be
more limited than those in certain other countries such as the United States or the United Kingdom.
Consequently, minority shareholders may not be able to protect their interests under current Philippine
law to the same extent as in certain other countries.

The Philippine Corporation Code, however, provides for minimum minority shareholders protection in
certain instances wherein a vote by the shareholders representing at least two-thirds of the
outstanding capital stock of the Company is required. See Description of the SharesFundament al
Matters on page 107 of this Preliminary Prospectus. The Philippine Corporation Code also grants
shareholders an appraisal right allowing a dissenting shareholder to require the corporation to
purchase his shares in certain instances. See Description of the Shares Rights Relating to Shares
Appraisal Rights on page 102 of this Preliminary Prospectus. Derivative actions are rarely brought on
behalf of companies in the Philippines. Accordingly, there can be no assurance that legal rights or

27
remedies of minority shareholders will be the same, or as extensive, as those available in other
jurisdictions or sufficient to protect the interests of minority shareholders.

The Offer Shares may not be a suitable investment for all investors.

Each potential investor in the Offer Shares must determine the suitability of that investment in light of
its own circumstances. In particular, each potential investor should:

have sufficient knowledge and experience to make a meaningful evaluation of the Company
and its business, the merits and risks of investing in the Offer Shares and the information
contained in this Preliminary Prospectus;

have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of
its particular financial situation, an investment in the Offer Shares and the impact the Offer
Shares will have on its overall investment portfolio;

have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Offer Shares, including where the currency for purchasing and receiving dividends on the
Offer Shares is different from the currency of the potential investor;

understand and be familiar with the behavior of any relevant financial markets; and

be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.

Future changes in the value of the Philippine peso against the U.S. dollar or other currenci es
will affect the foreign currency equivalent of the value of the Common Shares of the Company
and any dividends.

The price of the Common Shares of the Company is denominated in Philippine peso. Fluctuations in
the exchange rate between the peso and other currencies will affect the foreign currency equivalent
of the peso price of the Common Shares of the Company on the PSE. Such fluctuations will also affect
the amount in foreign currency received upon conversion of cash dividends or other distributions paid
in pesos by the Company on, and the peso proceeds received from any sales of, the Offer Shares.

The Company may be unable to pay dividends on the Common Shares of the Company.

There is no assurance that the Company can or will declare dividends on Common Shares of the
Company in the future. Future dividends, if any, will be at the discretion of the Board and will depend
upon the future results of operations and general financial condition, capital requirements, ability to
receive dividends and other distributions and payments from the subsidiaries of the Company, foreign
exchange rates, legal, regulatory and contractual restrictions, loan obligations, and other factors the
Board may deem relevant.

The sale or possible sale of a substantial number of Common Shares in any private or public
sales following the Offer could adversely affect the price of the Common Shares.

Any future issue or sale of the Common Shares of the Company, the disposal of Common Shares by
any of the major stockholders of the Company or the perception that such issuances, sales or
disposals may occur may have a downward pressure on the price of the Common Shares and there
can be no assurance that such issuances, sales or disposals will not take place. To the extent further
new Common Shares are issued, there may be dilution to existing holders of the common shares of
the Company.

Risks Related to the Presentation of Information in this Preliminary Prospectus

Certain information contained herein is derived from unofficial publications.

Certain information in this Preliminary Prospectus relating to the Philippines, the industry in which the
28
Company competes in and the markets in which the Company operates in, including statistics relating
to market size, is derived from various government and private publications. Similarly, the Joint Issue
Managers, Joint Lead Underwriters, and Joint Bookrunners have not independently verified industry
forecasts and other market research data, which may not be accurate, complete, up to date or
consistent with other information compiled within or outside the Philippines. This Preliminary
Prospectus also contains industry information based on publicly and privately available third-part y
sources.

Prospective investors are cautioned accordingly.

29
Use of Proceeds
The Company expects to raise [8,000,000,000.00] as gross proceeds from the Firm Offer. The
Company estimates that the net proceeds after deducting fees, commissions and expenses payable by
the Company, will be approximately [7,386,419,711.56]. The Company will not receive any proceeds
from the sale of Optional Shares by the Selling Shareholder. Taxes and issue management ,
underwriting and selling fees and certain other fees and expenses pertaining to the sale of the Optional
Shares by the Selling Shareholder will be paid by the Selling Shareholder.

The Company intends to use the net proceeds of the Firm Offer to partially finance the construction of
the Cebu Cement Plant

Net proceeds from the Offer are estimated to be as follows:

Particulars Total
Estimated Proceeds from the Firm Offer 8,000,000,000.00
Less: Estimated fees, commissions and expenses
Gross underwriting fee [215,053,763.44]
Documentary stamp taxes to be paid by the company [2,500,000.00]
IPO Tax [320,000,000.00]
SEC registration [2,562,500.00]
SEC legal research fee [25,625.00]
PSE processing fee [56,000.00]
PSE listing fee (including VAT) [53,200,000.00]
Legal and other professional fees [8,000,000.00]
Other expenses [12,182,400.00]
Total estimated fees, commissions and expenses [(613,580,288.44])
Estimated Net Proceeds [7,386,419,711.56]

The Company estimates that the total proceeds, total expenses, and net proceeds from the secondary
offer under the Over-allotment Option, if fully exercised, will be as follows:

Particulars Total
Estimated Proceeds from the Optional Shares 1,200,000,000.00
Less: Estimated fees, commissions and expenses
Gross underwriting fee [32,258,064.52]
Documentary stamp taxes [281,250.00]
IPO Tax [48,000,000.00]
SEC registration [300,000.00]
SEC legal research fee [3,000.00]
PSE processing fee [-]
PSE listing fee (including VAT) [-]
Legal and other professional fees [-]
Crossing Charges [7.962,240.00]
Other expenses [-]
Total estimated fees, commissions and expenses [(88,804,554.52)]
Estimated Net Proceeds [1,111,195,445.48]

The actual underwriting and selling fees and other Offer-related expanses may vary from the estimated
accounts indicated.

Partial Funding of the Construction of the Cebu Cement Plant

The net proceeds of the Offer shall be used to partially finance construction of a 2 Million MT capacity
cement plant and its support facilities in Cebu (the Cebu Cement Plant). Project cost is estimated to
be at about 12.5 Billion. The Cebu Cement Plant will include construction of a manufacturing plant, a
distribution center, and marine terminals in the Southern Luzon regions, Visayas and Mindanao regions.
The project cost includes procurement of various construction-related materials and services, as well

30
as the purchase of the properties where the plant will be built on.

The completion of the Cebu Cement Plant will be financed through a combination of the net proceeds
of the Offer, debt funding, and internally generated funds.

Construction of the Cebu Cement Plant is estimated to commence within the fourth quarter of 2017 and
is expected to be completed by the first quarter of 2020.

Pending the above use of proceeds, the Company shall invest the net proceeds from the Offer in short -
term liquid investments including but not limited to short-term government securities, bank deposits and
money market placements which are expected to earn at prevailing market rates.

No amount of the proceeds is to be used to reimburse any officer, director, employee, or shareholder,
for services rendered, assets previously transferred, money loaned or advanced, or otherwise.

In the event of any substantial deviation, adjustment or reallocation in the planned use of proceeds, the
Company shall inform the SEC, PSE and the holders of the Offer Shares in writing at least 30 days
before such deviation, adjustment or reallocation is implemented. Any material or substantial
adjustments in the use of proceeds, as indicated above, should be approved by the Board and disclosed
to the PSE. In addition, the Company shall submit via the Electronic Disclosure Generation Technology
(EDGE) of the PSE, the following disclosures to ensure transparency in the use of proceeds:

(i) any disbursements made in connection with the planned use of proceeds from the Offer;

(ii) quarterly progress report on the application of the proceeds from the Offer on or before the
first 15 days of the following quarter;

(iii) annual summary of the application of the proceeds on or before January 31 of the following
year; and

(iv) approval by the Board of any reallocation on the planned use of proceeds. The actual
disbursement or implementation of such reallocation must be disclosed by the Company at
least 30 days prior to the said actual disbursement or implementation.

The Company shall submit a certification by the Treasurer of the Company and external auditor on the
accuracy of the information reported by the Company to the PSE, as well as a detailed explanation for
any material variances between the actual disbursements and the planned use of proceeds in the
Preliminary Prospectus, if any, in the quarterly and annual reports of the Company as required in items
(ii) and (iii) above. Such detailed explanation will state the approval of the Board as required in item (iv)
above.

31
Dividends and Dividend Policy
Dividend Policy

The Company, pursuant to a board approval on February 23, 2017, intends to pay dividends annually
in the amount of up to 50% of its audited net income after tax of the previous year subject to compliance
with the requirements of applicable laws and regulations and subject to investment plans and financial
condition of the Company. The amount of dividends will be reviewed periodically by the Board in light
of the Company's earnings, financial condition, cash flows, capital requirements and other
considerations while maintaining a level of capitalization that is commercially sound and sufficient to
ensure that the Company can operate on a standalone basis.

Dividends shall be declared and paid out of the Companys unrestricted retained earnings which shall
be payable in cash, property or stock to all shareholders on the basis of outstanding stock held by them.
Unless otherwise required by law, the Board, at its sole discretion, shall determine the amount, type
and date of payment of the dividends to the shareholders, taking into account various factors, including:

the level of the Companys earnings, cash flow, return on equity and retained earnings;
its results for and its financial condition at the end of the year in respect of which the dividend
is to be paid and its expected financial performance;
the projected levels of capital expenditures and other investment programs;
restrictions on payments of dividends that may be imposed on it by any of its financing
arrangements and current or prospective debt service requirements; and5
such other factors as the Board deems appropriate.

In relation to Preferred Shares issued by the Company, pursuant to the provisions of the Articles of
Incorporation of the Company, the holders thereof are entitled to receive cash dividends upon
declaration made at the sole option of the Board. The annual dividends shall be at the rate of six percent
(6%) calculated in respect of each share by reference to the issue price thereof. The dividends of the
preferred shares are cumulative. No dividend can be declared and paid on the common shares unless
cash dividends have been declared and paid to all holders of preferred shares.

Limitations and Requirements

Under Philippine law, a corporation can only declare dividends to the extent t hat it has unrestricted
retained earnings that represent the undistributed earnings of the corporation which have not been
allocated for any managerial, contractual or legal purpose and which are free for distribution to the
shareholders as dividends. The amount of retained earnings available for declaration as dividends may
be determined pursuant to regulations issued by the Philippine SEC. The approval of the Board is
generally sufficient to approve the distribution of dividends, except in the case of stock dividends which
requires the approval of stockholders representing not less than two-thirds (2/3) of the outstanding
capital stock at a regular or special meeting duly called for the purpose. From time to time, the Company
may reallocate capital among its subsidiaries depending on its business requirements.

The Philippine Corporation Code generally requires a Philippine corporation with retained earnings in
excess of 100% of its paid-in capital to declare and distribute as dividends the amount of such s urplus.
Notwithstanding this general requirement, a Philippine corporation may retain all or any portion of such
surplus in the following cases: (i) when justified by definite expansion plans approved by the Board; (ii)
when the required consent of any financing institution or creditor to such distribution has not been
secured; (iii) when retention is necessary under special circumstances, such as when there is a need

5 Pursuant to the financial covenants of the Term Loan Facility and Security Agreement (TLFSA) entered into by
the Company in February 2016 with various local financial institutions, the Company may only declare and pay
dividends (i) of up to fifty percent (50%) of its net income of the previous fiscal year and (ii) subject to compliance
with certain financial covenants. Please see discussion of TLFSA under the Managements Discussion and
Analysis of Historical Financial Condition and Results of Operations on page 39 of the Prospectus.

32
for special reserves for probable contingencies; or (iv) when the non-distribution of dividends is
consistent with the policy or requirement of a Government office.

Record Date

Pursuant to existing Philippine SEC rules, cash dividends declared by corporations whose securities
are registered or whose shares are listed in the stock exchange must have a record date not less than
ten (10) nor more than 30 days from the date of declaration. For stock dividends, the record date should
not be less than ten (10) nor more than 30 days from the date of the approval of the shareholders ,
provided however, that the set record date is not to be less than ten (10) trading days from receipt by
the PSE of the notice of declaration of stock dividend. In the event that a stock dividend is declared in
connection with an increase in authorized capital stock, the corresponding record date is to be fixed by
the Philippine SEC. In case no record date is specified for the cash and stock dividend declaration, then
the same shall be deemed fixed at 15 days from such declaration.

Dividend History

Set out below is the dividend history of the Company for the past three (3) years, paid out to the previous
shareholders of the Company.

Cash Dividend

Pursuant to the features of Preferred Shares with cumulative, non-participating annual dividend rate of
six percent (6%) of the issue price, it has been the policy of the Company to declare cash dividends
payable to preferred shareholders on a quarterly basis. The Company declared and paid quarterly cash
dividends to preferred shareholders commencing in 2nd quarter of 2015, and every quarter thereafter.

On April 6, 2016, the Board declared cash dividends at the rate of 0.75 per share payable to holders
of 500,000,000 Common Shares outstanding as of April 15, 2016, or a total of 375,000,000.00, which
were paid on April 20, 2016.

Below is a summary of the cash dividend declarations of the Company:

Date of Class of Rate per share

Total Amount () Record Date
Declaration Shares ()
July 20, 2015 Preferred 0.015 45,000,000.00 June 30, 2015
November 5, 2015 Preferred 0.015 45,000,000.00 September 30, 2015
January 6, 2016 Preferred 0.015 45,000,000.00 January 15, 2016
April 6, 2016 Preferred 0.015 45,000,000.00 April 15, 2016
April 6, 2016 Common 0.750 375,000,000.00 April 15, 2016
July 4, 2016 Preferred 0.015 45,000,000.00 July 15, 2016
October 5, 2016 Preferred 0.015 45,000,000.00 October 15, 2016
January 9, 2017 Preferred 0.015 45,000,000.00 January 15, 2017

Stock Dividend

On December 9, 2015, the Board, with the approval of stockholders representing not less than two-
thirds (2/3) of the outstanding common shares, approved a common stock dividend equivalent to
4,000,000,000 common shares with a total par value of 4,000,000,000.00, for distribution to common
stockholders of record of the Company as of December 8, 2015.

The stock dividends were distributed on April 29, 2016 upon approval by the SEC of the application for
the increase in authorized capital stock.

33
Determination of Offer Price
The Offer Price of [16.00] per Offer Share has been determined through a book-building process and
on the basis of discussions between the Company and the Joint Issue Managers, Joint Lead
Underwriters and Joint Bookrunners. Since the Common Shares have not been listed on any stock
exchange, there has been no market price for the Common Shares derived from day to day trading.

The factors considered in determining the Offer Price include, but were not limited to, the historical
financial and operating performance of the Company, business strategy and prospects, market demand
from institutional investors, overall market conditions at the time the Offer Price was determined
and the market price of comparable listed companies. The Offer Price may not have any correlation
to the actual book value of the Offer Shares.

34
Capitalization
The following table sets forth the audited consolidated short-term and long-term debt and capitalization
of the Company as of December 31, 2016. This table should be read in conjunction with the more
detailed information in the audited financial statements, including notes thereto, found in Appendix []
of the Preliminary Prospectus.

Actual as of After Giving Effect to

In Pesos
December 31, 2016 the Offer

Current Liabilities
Trade and other payables 2,348,281,309 2,348,281,309
Income tax payable 411,720,888 411,720,888
Current portion of loans payable
Total Current Liabilities 2,760,002,197 2,760,002,197
Noncurrent Liabilities
Loans payable - net of current portion 5,957,076,062 5,957,076,062
Net retirement benefits liability 29,621,321 29,621,321
Provision for mine rehabilitation and decommissioning 26,125,315 26,125,315
Net deferred tax liabilities 570,072,756 570,072,756
Total Noncurrent Liabilities 6,582,895,454 6,582,895,454
Total Liabilities 9,342,897,651 9,342,897,651
Equity
Capital stock 7,500,000,002 8,000,000,002
Additional Paid-In Capital 6,959,058,111
Retained earnings:
Appropriated 3,500,000,000 3,500,000,000
Unappropriated 5,961,748,578 5,889,110,178
Other equity reserves 1,264,120,698 1,264,120,698
Total Equity 18,225,869,278 25,612,288,989
Total Liabilities and Equity 27,568,766,929 34,955,186,638

35
Dilution
The Company will offer [575,000,000] Offer Shares to the public, to be comprised of [500,000,000]
unissued Common Shares to be issued from the authorized and unissued common stock of the
Company and [75,000,000] existing common shares to be offered by the Selling Shareholder,
assuming full exercise of the Over-allotment Option.

The Offer Price will be higher than the adjusted book value per share of the outstanding Common
Shares, resulting in an immediate material dilution of the equity interest of the new investors in the
Company. The book value (less the value of the Preferred Shares) of the Company, based on its
audited consolidated financial statements as of [December 31, 2016], was [15.23] Billion, or [3.38]
per Common Share. The book value represents the amount of the total assets of the Company less
the (i) sum of its liabilities and (ii) the value of the Companys Preferred Shares the book value per
share of the Company is computed by dividing the book value by the equivalent number of Common
Shares outstanding.

Dilution in pro-forma book value per share to investors of the Offer Shares represents the differenc e
between the Offer Price and the pro-forma book value per Common Share immediately following the
completion of the Offer.

After giving effect to an increase in the total assets of the Company to reflect the receipt of the
net proceeds of approximately up to [7.39] Billion from its sale of [500,000,000] Offer Shares pursuant
to the Offer based on the Offer Price of up to [16.00] per Offer Share, the book value of the
Company (less the value of the preferred shares) will be approximately up to [22.61] Billion or up to
[4.52] per Common Share. This represents an increase in book value of up to [1.14] per Common
Share to existing shareholders and an immediate decrease of up to [11.47] per Common Share to
investors of the Offer Shares.

The following table illustrates the dilution on a per Common Share basis based on the Offer Price
of up to [16.00] per Offer Share in the Offer:

Offer Price per Offer Share up to

[16.00]
Pro forma Book Value per Common Share as of December 31, 2016 [3.38]
Increase in Book Value per Common Share attributable to the Offer [1.14]
Shares
Pro forma Book Value per Common Share after the Offer [4.52]
Decrease in Book Value per Common Share to Investors in the Offer [11.48]
Shares

The following table shows the shareholdings and percentage of Common Shares outstanding of
existing and new shareholders of the Company immediately after completion of the Offer of a
total of [575,000,000] Offer Shares and the exercise of the Over-allotment Option:

Without the Exercise of With the Exercise of the

Prior to the Offer the Over-allotment Over-allotment
Number % Number % Number %
Existing
4,500,000,005 100.00% 4,500,00,005 90.00% 4,425,000,005 88.50%
Shareholders
New Investors 0 0.00% 500,000,000 10.00% 575,000,000 11.50%
Total 4,500,000,005 100.00% 5,000,000,005 100.00% 5,000,000,005 100.00%

36
Selected Historical Financial Information
The summary of the historical consolidated statements of financial position as at December 31, 2016,
2015, and 2014 and the summary of historical consolidated statements of income and cash flow data
for the years ended December 31, 2016, 2015, and 2014 have been derived from, and should be read
in conjunction with, the accompanying audited consolidated financial statements of Eagle Cement
Corporation and Subsidiaries, including the notes thereto. The consolidated financial statements of
Eagle Cement and its subsidiaries as at and for the years ended December 31, 2016 and 2015 were
audited by Reyes Tacandong & Co. The financial statements of the Company for the year ended
December 31, 2014 was audited by Isla Lipana & Co.

Unless otherwise stated, the Company has presented its consolidated financial results under PFRS.
Potential investors should read the following data together with the more detailed information contained
in Managements Discussion and Analysis of Historical Financial Condition and Results of Operations
and the financial statements and related notes included elsewhere in this Preliminary Prospectus. The
following data is qualified in its entirety by reference to all of that information.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31

2016 2015 2014

Net Sales .. 13,275,952,635 11,064,531,576 8,760,422,609

Cost of goods sold 6,339,354,109 6,295,314,045 4,843,152,880

Gross profit 6,936,598,526 4,769,217,531 3,917,269,729

Operating expenses 1,293,523,020 826,477,140 639,178,525

Income from operations 5,643,075,506 3,942,740,391 3,278,091,204

Finance costs
(375,468,671) (241,766,548) (268,794,596)
Interest income
89,001,566 61,475,979 35,716,999
Share in profit of joint venture
11,872,008

Other income net.. 53,803,426 24,032,820 126,332,320

Income before income

tax 5,410,411,827 3,786,482,642 3,183,217,935

Income tax expense. 1,297,652,266 106,811,198 68,296,841

Net income...... 4,112,759,561 3,679,671,444 3,114,921,094

Other comprehensive
income 47,403,561 49,507,372 116,447,928
Total comprehensive
income 4,160,163,122 3,729,178,816 3,231,369,022

37
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION INFORMATION

For the years ended December 31

2016 2015 2014

Current assets...... 9,208,755,582 7,102,473,431 6,633,313,667

Noncurrent assets 18,360,011,347 16,097,648,450 12,885,183,534

Total Assets 27,568,766,929 23,200,121,881 19,518,497,201

Current liabilities. 2,760,002,197 2,556,095,463 2,142,871,432

Noncurrent liabilities 6,582,895,454 6,003,320,264 6,374,098,431

Total liabilities 9,342,897,651 8,559,415,727 8,516,969,863

Total equity 18,225,869,278 14,640,706,154 11,001,527,338

Total liabilities and equity 27,568,766,929 23,200,121,881 19,518,497,201

OTHER FINANCIAL INFORMATION

For the years ended December 31

2016 2015 2014

Net working capital........ 6,448,753,385 4,546,377,968 4,490,442,235

Operating margin before other

expenses. 42.51% 35.63% 37.42%

EBITDA. 6,363,300,860 4,434,893,208 3,920,602,363

Capital expenditure 2,151,144,174 2,591,742,094 2,861,315,856

Depreciation and amortization. 666,421,928 468,119,997 504,306,831

CALCULATION OF EBITDA

For the years ended December 31

2016 2015 2014

Net
income .......................... 4,112,759,561 3,679,671,444 3,114,921,094

Add:
Income tax expense... 1,297,652,266 106,811,198 68,296,841

Depreciation and
Amortization 666,421,928 468,119,997 504,306,831
Finance Costs 375,468,671 241,766,548 268,794,596
Less:

Interest
Income....... 89,001,566 61,475,979 35,716,999

EBITDA... 6,363,300,860 4,434,893,208 3,920,602,363

38
Managements Discussion and Analysis of Historical Financial
Condition and Results of Operations

This discussion summarizes the significant factors affecting the consolidated financial performance,
financial position and cash flows of Eagle Cement for the years ended December 31, 2016, 2015, and
2014. The following discussion should be read in conjunction with the attached the audited consolidated
statements of financial position of the Company as of December 31, 2016, 2015 and 2014 and the
related consolidated statements of income, changes in equity, and cash flows for the years ended
December 31, 2016, 2015, and 2014. All necessary adjustments to present fairly the consolidated
financial position of the Company as of as of December 31, 2016, 2015 and 2014 and the financial
performance and cash flows for the years ended December 31, 2016, 2015, and 2014 have been made.

Critical Accounting Policies

The significant accounting policies of Eagle Cement are set forth in Note 2 to the consolidated financial
statements included elsewhere in this Preliminary Prospectus. The consolidated financial statements
of the Company have been prepared in compliance with Philippine Financial Reporting Standards
(PFRS) issued by the Philippine Financial Reporting Standards Council and adopted by SEC. This
financial reporting framework includes PFRS, Philippine Accounting Standards (PAS) and Philippine
interpretations from International Financial Reporting Interpretations Committee (IFRIC).

The preparation of the consolidated financial statements in compliance with PFRS requires
management to make judgments, estimates and assumptions that affect the amounts reported in the
consolidated financial statements and related notes. The judgments and estimates used in the
consolidated financial statements are based upon the evaluation of management of relevant facts and
circumstances as at the reporting date. Actual results could differ from those estimates. Such estimates
will be adjusted accordingly when the results become determinable. Accounting estimates and
judgments are continually evaluated and are based on historical experience and other factors, including
expectation of future events that are believed to be reasonable under the circumstances.

In the process of applying the accounting policies of the Company, management has made judgments,
apart from those involving estimates and assumptions, which have significant effect on the amounts
recognized in the consolidated financial statements. These are set forth and discussed in Note 3 of the
audited consolidated financial statements of the Company.

Key Components of Results of Operations

Revenues

Eagle Cement generates revenue from the sale of cement (via cement bags or bulk cement). The
Company sells majority of its products to dealer clients (via cement bags) but demand for bulk cement
from institutional clients also account for significant portion of total sales.

Cost of Goods Sold

Cost of goods sold represents the accumulated total of all costs used to produce cement which has
been sold. It comprises variable and fixed and semi-variable expenses such as, electrical energy
consumption, fuel consumption, raw materials, repairs and maintenance expenses personnel
expenses, depreciation and depletion of assets utilized in production of cement and clinker, expenses
related to moving, storing, feeding of raw materials in the plant, and all other expenses directly
identifiable to cement production.

Expenses related to personnel, equipment and other services involved in the sales, distribution, and
warehousing activities of cement at points of sales does not form part of cost of sales; these, however,
are included in operating expenses, likewise, freight expenses of finished products between plants and
points of sale and freight expenses from points of sales to the facilities of the customers, are part of
distribution expenses.

39
Operating Expenses

Operating expenses consist of administrative and selling and distribution expenses. Administrative
expenses include the costs of the employees (salaries and benefits), taxes and licenses, security
services, depreciation of non-production related assets. Selling and distribution expenses comprise of,
but not limited to, freight cost, warehousing fee, advertising and promotion and handling.

Finance Costs

Finance costs mainly consist of interest expense incurred in relation to the TLFSA, NFSA and SLSA
entered into with various banks to finance the construction of the second and third production line
cement plant.

Interest Income

Interest income basically comprise interest income earned from short -term placements cash deposits.
and finance lease agreement with its haulers.

Other Income Net

Other income comprises of fair value adjustment on investment properties, gain on sale of property and
equipment, gain or loss on sale of investments and dividend income, net of the loss on early debt
extinguishment which represents the pre-termination of the NFSA and SLSA using the proceeds from
the initial drawdown of the TLFSA.

Other income - net also includes the loss on foreign exchange which represents the devaluation of peso
compared to the foreign currency value for foreign denominated transactions.

Income Taxes

Income taxes pertains to regular income taxes from non-Income Tax Holiday (ITH) period and non-
Board of Investments (BOI) registered operations. The statutory income tax rate of the Company is
30% and the income tax at effective tax rate was 1%, 1%, and 10% in CY 2014, CY 2015, and CY 2016,
respectively, after taking into consideration the increase (decrease) in income tax resulting from: income
exempt from ITH covered activities, non-deductible interest expense, interest income subjected to final
tax, and dividend income exempt from income tax.

Results of Operations

The following table summarizes the consolidated results of operations of the Company for years ended
December 31, 2016, 2015 and 2014, expressed in absolute amounts and as a percentage of net sales.
These amounts have been derived from, and should be read in conjunction with, and are qualified in
their entirety by reference to the accompanying audited Consolidated Financial Statements of the
Company.

For the Year Ended December 31,

2016 2015 2014

(in Millions of Philippine Pesos, except percentages)

Net Sales 13,276.0 100% 11,064.5 100% 8,760.4 100%
Cost of
(6,339.4) (48%) (6,295.3) (57%) (4,843.1) (55%)
Goods Sold
Gross Profit 6,936.6 52% 4,769.2 43% 3,917.3 45%
Operating
(1,293.5) 10% (826.5) 8% (639.2) 7%
Expenses

40
 Income from
5,643.1 42% 3,942.7 35% 3,278.1 37%
Operations
Finance costs (375.4) (3%) (241.7) (2%) (268.8) (3%)
Interest
89.0 1% 61.5 1% 35.7 1%
Income
Share in profit
of joint 0% 0% 11.9 0%
venture
Other income-
53.8 1% 24.0 0% 126.3 1%
net
Income
Before 5,410.5 41% 3,786.5 34% 3,183.2 36%
Income Tax
Income Tax
(1,297.7) (10%) (106.8) (1%) (68.3) (1%)
Expense
Net Income 4,112.8 31% 3,679.7 33% 3,114.9 35%

2016 compared with 2015

Net Sales. Net sales increased by 19.99% from 11,064.5 Million in 2015 to 13,276.0 Million in 2016.
Increase in sales is attributed to (i) 5.12% increase in sales price and (ii) 14.15% increase in sales
volume with the completion of the second production line.

Cost of sales. Cost of sales increased by 0.70% from 6,295.3 Million in 2015 to 6,339.4 Million in
2016 as a result of increase in sales volume offset by the increase in cost efficiency derived from the
operation of the two (2) cement production lines.

Gross profit. As a result of the foregoing, gross profit increased by 45.45% from 4,769.2 Million in
2015 to 6,936.6 Million in 2016.

Operating expenses. Operating expenses increased by 56.50% from 826.5 Million in 2015 to
1,293.5 Million in 2016 as a result of higher sales and distribution costs incurred in relation to increased
sales volume during the said period.

Operating income before other expenses- net. As a result of the foregoing, operating income before
other expenses increased by 43.13% from 3,942.7 Million in 2015 to 5,643.1 Million in 2016.

Finance Cost. Finance cost increased by 55.32% from 241.7 Million in 2015 to 375.4 Million in 2016.
The increase is due to the recognition of borrowing cost due to the completion of cement production
Line 2.

Interest Income. Finance income increased by 44.72% from 61.5 Million in 2015 to 89.0 Million in
2016. This is primarily due to the increase in interest income on short term placements.

Other Income-net. Other income-net increased by 124.17% from 24.0 Million in 2015 to 53.8 Million
in 2016 as a result of gain on fair value adjustments on investment properties net of loss on early
extinguishment of debt.

Income tax. Income tax expense increased significantly from 106.8 Million in fiscal 2015 to 1,297.7
Million in fiscal 2016 as a result of a ITH expiration in November 30, 2015.

Net income. As a result of the foregoing, net income increased by 11.77% from 3,679.70 in 2015 to
4,112.8 Million in 2016.

41
2015 compared with 2014

Net sales. Net sales increased by 26.30% from 8,760.4 Million in 2014 to 11,064.5 Million in 2015.
This was attributable to 31.44% increase in sales volume partially offset by 3.92% decrease in average
sales price.

Cost of sales. Cost of sales increased by 29.98% from 4,843.1 Million in 2014 to 6,295.3 Million in
2015, as a result of higher sales volume.

Gross profit. For the reasons explained above, gross profit increased 21.75% from 3,917. 3 Million in
2014 to 4,769.2 Million in 2015

Operating expenses. Operating expenses increased 29.30% from 639.2 Million in 2014 to 826.5
Million in 2015 as a result of higher sales and distribution costs incurred in relation to increased sales
volume during the said period.

Operating income before other expenses, net. For the reasons discussed above, operating income
before other expenses increased by 20.27% from 3,278.1 Million in fiscal 2014 to 3,942. 7 Million in
fiscal 2015.

Finance Cost. Finance cost decreased by 10.08% from 268.80 Million in 2014 to 241.7 Million in
2015. The decrease is due to the capitalization of borrowing cost due to the construction of cement
production line 2.

Finance Income. Finance income increased by 72.27% from 35.7 Million in 2014 to 61.5 Million in
2015 primarily due to increase in interest income on short term placements.

Other Income-net. Other income-net decreased by 81.00% from 126.3 Million in 2014 to 24.0 Million
in 2015. This is attributable to the extraordinary gain on the sale of property plant and equipment in
2014.

Income tax. The income tax expense increased by 56.37% from 68.3 Million in 2014 to 106.8 Million
in 2015 as a result of an ITH expiration on November 30, 2015.

Net income. Net income for 2015 increased by 18.13% from 3,114.9 Million in 2014 to 3,679.7
Million in 2015, primarily due to higher operating income, which was partially offset by increased income
tax expense.

Liquidity and Capital Resources

Cash Flows

The primary sources and uses of cash of the Company for calendar years 2016, 2015 and 2014 were
as follows:

For the years ended December 31

2016 2015 2014
(in Millions of Philippine Pesos, except
percentages)
Cash flows provided by operating activities 5,673.0 4,347.2 2,591.6
Cash flows used in investing activities (2,586.6) (3,207.6) (2,399.3)
Cash flows provided by (used in) financing activities (924.5) (921.9) 1,123.6
Net effect of exchange rate changes on cash and cash equivalents (13.9) 22.9 (5.9)
Net increase (decrease) in cash and cash equivalents 2,148.0 240.6 1,310.0
Cash and cash equivalents at beginning of year 4,472.9 4,232.3 2,922.3
Cash and cash equivalents at end of year 6,620.9 4,472.9 4,232.3

42
Net Cash Flows Provided by Operating Activities

Year 2016

Net cash flows provided by operating activities was 5,673 Million. This was primarily the result of net
income before taxes of 5,410.4 Million, adjusted for non-cash items and changes in working capital,
including depreciation and amortization of 666.4 Million, finance cost of 375.4 Million, loss on early
debt extinguishment of 100.4 Million, write off of investment property of KBHI of 102.7 Million,
unrealized foreign exchange loss of 13.9 Million, gain on fair value changes in investment properties
of 146.5 Million, income taxes paid of 509.2 Million, interest received of 86.1 Million and net
increase in working capital of 323.7 Million. The net increase in working capital was mainly due to the
increase in trade and other receivables of 175.1 Million due to increase in net sales, and increase in
inventories of 317.6 Million.

Year 2015

Net cash flows provided by operating activities was 4,347.2 Million. This was primarily the result of net
income before taxes of 3,786.5 Million, adjusted for non-cash items and changes in working capital,
including depreciation and amortization of 468.1 Million, finance cost of 241.8 Million, unrealized
foreign exchange gain of 23.0 Million, income taxes paid of 422.4, interest received of 57.8 Million,
and net decrease in working capital of 308.4 Million. The net decrease in working capital was mainly
due to the increase in trade and other payables of 446.1 Million.

Year 2014

Net cash flows provided by operating activities after interest were 2,591.6 Million. This was primarily
the result of net income before taxes of 3,183.2 Million, adjusted for non-cash items and changes in
working capital, including depreciation and amortization of 504.3 Million, finance cost of 268.8 Million,
unrealized foreign exchange loss of 5.8 Million, gain on sale of property, plant and equipment of
106.3 Million, gain on sale of investment of 46.8 Million and increase in working capital of 1,216
Million. The net increase in working capital was mainly due to increase in other current assets of 784.6
Million.

Net Cash Flows Used in Investing Activities

Year 2016

The net cash flows used in investing activities of 2.586.6 Million was mainly due to the purchase and
acquisition of property, plant and equipment of 2,151.1 Million, AFS financial assets of 56.3 Million,
purchase of MPSAs of APC valued at 4 Million and acquisition of shares in SWCC of 385.1 Million.

Year 2015

The net cash flows used in investing activities of 3,207.6 Million was mainly due to the purchase and
acquisition of property, plant and equipment of 534.0 Million and AFS financial assets of 118.8
Million.

Year 2014

The net cash flows used in investing activities of 2,399.3 Million was mainly due to the purchase and
acquisition of property, plant and equipment of 2,861.3 Million, which was partially reduced by the
cash proceeds received from sale of property, plant and equipment, financial assets and investment in
joint venture of 462 Million.

43
Net Cash Flows Used in Financing Activities

Year 2016

The net cash flows used in financing activities of 924.5 Million consisted of payments of loans and
interest of 6,300.1 Million, payments of dividends to stockholders of 555 Million, and debt issuance
cost and stock transaction cost of 69.4 Million. This was partially offset by the initial drawdown of
6,000 Million in relation to the TLFSA entered into with various banks.

Year 2015

The net cash flows used in financing activities of 921.9 Million was due to payments of loans and
interest of 831.9 Million and payment of dividends to stockholders of 90 Million.

Year 2014

The net cash flows provided by financing activities was 1,123.6 Million mainly from the proceeds from
loan availment of 1,600 Million, which was partially reduced by the cash used for payment of loans
and interest of 476.4 Million.

Key Performance Indicators

The following are the major financial indicators being used by the Company

2016 2015

Current/liquidity ratio 3.34 2.78

Solvency ratio 0.51 0.48
Debt-to-equity ratio 0.51 0.58
Asset-to-equity ratio 1.51 1.58
Return on asset ratio 0.18 0.18
Return on equity ratio 0.25 0.29

The manner by which the Company calculates the above indicator is as follows:

Current assets
Current/liquidity ratio =
Current liabilities

Net income before depreciation

Solvency ratio =
Total liabilities

Total liabilities
Debt-to-equity ratio=
Total equity

Total assets
Asset-to-equity ratio=
Total equity

Net income before interest

Return on asset ratio= expense after-tax
Average total assets

Net income
Return on equity ratio=
Average total equity

44
Liquidity and Indebtedness

The main source of liquidity of the Company is from the cash generated from cement manufacturing
operations. It expects to meet its working capital requirements for both short term and long term. The
Company may seek other sources of funding for its future capital expenditures, which may include debt
or equity financing, depending on its needs and market conditions.

Term Loan Facility and Security Agreement

On February 2016, the Company entered into a Term Loan Facility and Security Agreement (TLFSA )
with various local financial institutions for a fixed rate loan amounting to 11 Billion with a tenor of 10
years. As of December 31, 2016, the Company availed 6 Billion of the said facility to refinance its
existing debt obligations. On January 2017, the Company availed an additional 2.15 Billion from the
facility, with the remaining undrawn amount of 2.85 Billion.

Participating financial institutions include, Asia United Bank Corporation, Bank of Commerce, China
Banking Corporation, Development Bank of the Philippines, Philippine Bank of Communications ,
Philippine National Bank, Security Bank Corporation, Standard Chartered Bank and United Coconut
Planters Bank.

Under the terms and conditions of the TLFSA the Company has the following material covenants:

Debt Service Cover Ratio of not less than 1.50x

Debt Equity Ratio not to exceed 2.50x
Declaration and payment of dividends is limited to up to 50% of its net income of the previous
fiscal year
Secure approval in writing from the Majority Lenders (Lenders whose commitment constitutes
at least 51% of the total loan facility) for any share issuance except (a) issue of shares to
existing shareholders proportionate to their respective shareholding fully paid in cash or by way
of stock dividends; or (b) issue of qualifying or nominal shares to nominee directors.

As of the date of this Preliminary Prospectus, the Company is in material compliance with its debt
covenants.

Capital Expenditures

Capital expenditures include expenditures for land, building and improvements, machinery and
equipment, furniture, fixture and other office equipment, transportation equipment and construction in
progress, as follows:

Calendar Years Ended December 31

(in Million Pesos)
2016 2015 2014
Land 262.9 34.2 0.0
Building and improvements 0.2 25.0 0.0
Machinery and equipment 94.8 0.0 149.7
Furniture, fixture and other office equipment 29.3 25.0 0.0
Transportation equipment 29.3 124.8 0.0
Construction in progress 1,912.0 2,530.8 2,711.6
Total capital expenditures 2,151.1 2,591.7 2,861.3

45
The Company invested 2,328.7 Million, 2,739.8 Million and 2,861.3 Million in capital expenditures ,
for years 2016, 2015 and 2014, respectively. This was mainly due to the construction of the second and
third production lines cement plant in the Bulacan Cement Plant as follows:

Calendar Years Ended December 31

(in Million Pesos)
2016 2015 2014
Expansion Capital Expenditures
Line 2 1,237.3 2,632.0 2,281.3
Line 3 326.3
Others 167.1
Total Expansion capital expenditures 1,730.7 2,632.0 2,281.3
Maintenance capital expenditures 598.0 107.8 580.0
Total capital expenditures 2,328.7 2,739.8 2,861.3

The expansion capital expenditures increase the production capacity of the Company whereas the
maintenance capital expenditures are mostly incurred for replacements of equipment and spare parts.

46
The Philippine Cement Industry
Unless otherwise indicated, all information contained in this section are based on the Cement Mark et
Report prepared by CBA.

Market Overview

The Philippine cement industry has grown over the years to support the economic advancement and
infrastructure development of the country. The current industry comprises several domestic and
multinational players which have manufacturing facilities scattered throughout the archipelago. Thes e
facilities vary significantly in terms of age and efficiency.

Growth of the Philippine Cement Industry

Demand for cement in the country has shown tremendous growth over the last fifteen (15) years from
about 12.0 Million tonnes in 2000 to about 24.4 Million tonnes in 2015, representing a CAGR of 4.80%.
Trend in cement consumption is seen to be highly related with the economic condition of the country
with the Philippine GDP reflecting a CAGR of 5.10% during the same period.

Philippine Cement Consumption and Growth Rates (2000 2015)

30 17.7%
14.4%
25 11.1%
9.9%
8.7%
7.6%
In Million Tonnes

20 6.3% 6.5%

15 1.6% 1.2%
1.0% 0.7% 0.9%
10 -2.8% -3.8%
-4.9%
5
12.06 11.71 12.60 12.12 12.20 11.60 11.71 13.01 13.22 14.53 15.45 15.63 18.40 19.60 21.30 24.36
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Cement Consumption Growth Rate
Source: Cement Market Report

An analysis of the cement consumption pattern for period 2000 to 2015 would also reveal that the
growth in cement demand accelerated in the periods between 2008 and 2015 reflecting a CAGR of
9.12%, outpacing the growth of Philippine GDP with a 5.50% CAGR for the same period. This can be
attributed to the growth in construction activity over the last ten (10) years, reflecting a CAGR of 7.90%
during the same period. Contribution of the construction industry a percentage of GDP has also been
growing steadily from 2005 to 2015.

Philippine Construction Activity- Amounts and As % of GDP Rates (2000 2015)

1,000 6.9%
In Billion Pesos

6.1% 6.0% 6.3% 6.5%

5.3% 5.4% 5.7% 5.4%
800 4.8% 4.9%
600
400
200 270 310 365 420 460 550 520 635 725 830 915
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Construction Activity (CA) CA as % of GDP

Source: Cement Market Report

The increase in construction activity over the last two (2) years was mainly driven by increased
infrastructure spending by the government. Prior to 2015, construction activity was mainly supported by
private investment directed to housing and commercial / industrial projects. In 2015, infrastructure

47
spending almost doubled as a percentage of GDP and has continued to increase in 2016.

Philippine Government Spending on Infrastructure- Amounts and As % of GDP Rates (2009 2016E)
1,000 5.0%
In Billion Pesos

4.5%
2.7% 2.7%
500 2.2% 1.8% 1.8% 2.0%

180 165 175 216 307 346 596 767

0
2009 2010 2011 2012 2013 2014 2015 2016E

Gov't Spending- Infra (GSI) GSI as % of GDP

Source: Cement Market Report

Notwithstanding this growth, the Philippines still has one of the lowest per capita cement consumption
in comparison with its regional counterparts. In 2014, demand for cement in the Philippines was seen
at 21.3 Million tonnes or approximately 212 kilograms per capita. This places the Philippines below
almost all its ASEAN neighbors and at less than half the quantity per capita of countries such as
Vietnam, Thailand and Malaysia.
2014 Comparative Cement Per Capita Consumption- South East Asia

Malaysia 685
Vietnam 524
Thailand 438
Laos 435
Cambodia 241
Indonesia 238
Philippines 212
Myanmar 152

Source: Cement Market Report

Cement Economic Curve- Kg per Capita vs. GDP per Capita (2014)
1,400

Lebanon
1,200
Cement Consumption (Kg per Capita)

1,000 Cyprus

SOUTH KOREA
800
Iran
MALAYSIA
Jordan
600 Belgium
Egypt
VIETNAM TAIWAN
Morocco
LAOS THAILAND Spain JAPAN
400
Brazil Greece Germany
CAMBODIA Bulgaria France Finland
INDONESIA Canada USA
200 PHILIPPINES Great Britain
MYANMAR
0 GDP per Capita
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Source: Cement Market Report

48
Based on the cement economic curve, a well-established industry analytical tool which reflects the
relationship between per capita cement consumption and GDP per capita among developing and
developed countries, the Philippines, together with Indonesia and Myanmar are well below the curve.
In developing countries such as the Philippines, the expected GDP per capita growth would usually
result in an increase in cement consumption due to the significant need for infrastructure activity to
support economic growth. In developed countries where GDP per capita approaches US$20,000.00 ,
growth in GDP has a more muted effect on cement demand.

Given the aforementioned factors, it is expected that future cement demand shall be primarily driven by
the growth in the construction sector. With the continued thrust of both public and private sectors
towards infrastructure building to support the growing economy, a significant growth potential in the
Philippine cement industry may be expected moving forward.

Philippine Mark et Regions

The Philippine cement market regions can be divided into the three (3) main island groups: Luzon,
Visayas and Mindanao. Historically, the Luzon region has been the primary market for the Philippine
cement industry accounting for more than 65% of the total cement demand in the country as of 2015.
With the NCR which serves as the center of construction and infrastructure activity in the country located
within the region, the Luzon market has the highest per capita cement consumption among the three
(3) regions. On the other hand, the Mindanao region which constitutes about 20% of the total population
of the Philippines only accounts for about 15% of the total cement demand in the country as of 2015.
The prevailing geo-political circumstances and security issues in Mindanao has led to the
underdevelopment of infrastructure resulting to the low per capita figures in the region.

Philippine Cement Demand Statistics Per Region (2015)

Source: Cement Market Report

49
Product Types

There are three (3) main types of cement sold in the Philippine market, with details as follows:

Ordinary Portland Cement (OPC)

OPC (Type 1) is produced using gypsum and portland clinker and known for its quick hardening ability,
making it ideal for time-sensitive projects. OPC is also characterized by its high compressive strength
and contains approximately 95.00% clinker. Given its resistance to abrasion, OPC is mostly utilized in
building foundations as well as infrastructure projects such as roads and bridges which have extended
exposure to vehicles and weather. This type of cement accounts for about 20% to 30% of total industry
sales.

Portland Pozzolanic Cement (PPC)

PPC (Type 1P) is manufactured using 70% portland clinker and 30% additives/extenders such as
gypsum, pozzolans, volcanic tuff, blast furnace slag and fly ash, that are intended to provide additional
strengthening properties not present in OPC. Although OPC has a short setting time, PPC can also
achieve setting times that are equally as fast as OPC upon addition of certain admixtures during the
manufacturing process. PPC is used for general construction activities where long term strength is
preferred over short setting time attributes. This type of cement accounts for about 70% to 80% of total
industry sales.

Masonry Cement (MC)

MC (Type M) is created using gypsum, portland clinker, plasticizers, and an air entraining agent. This
has the ability to absorb water which increases its workability. MC is used for a an array of construction
applications such as plastering, core filling, tile adhesive and grout, and other semi -structural masonry
works, such as driveways, sidewalks and fencing. This type of cements accounts for about 5.00% of
total industry sales.

Philippine Cement Industry Market Mix- Per Cement Type

MC
5%

OPC
30%

PPC
65%

Source: Cement Market Report

Cement is sold through either of the two (2) mediums- in cement bags or in bulk. The Philippine cement
market is mainly a bagged market wherein cement bags constitute about 80% of the total industry sales.
Cement bags (i.e. cement packaged in 40 kilogram bags) are usually sold to dealers and distributors
for usage of retail customers. The remaining 20% is sold in bulk which are usually transported in trucks
or 1-tonner bags. Cement sold in bulk is directed to ready -mix concrete (RMC) facilities and other
concrete products producers. Most of the RMC and concrete products end users are major
infrastructure projects.

50
 Philippine Cement Market Mix- Bagged and Bulk Cement
Bulk
20%

Bagged
80%
Source: Cement Market Report
Currently, the usage of bagged cement varies among the three island regions. For example, the Luzon
region has a higher bulk cement sales component whereas the market in Mindanao is nearly 100%
bagged cement. This can be attributable to the fact that infrastructure project s and high rise buildings
projects which require bulk cement is concentrated in Luzon. It remains to be seen whether bulk cement
sales in the Visayas and Mindanao region would increase given the current directive of the national
government to hasten infrastructure development in the said areas.

Distribution Channels and Customer Profile

The distribution channels in the Philippines are slightly different between cement bags and bulk cement.
Cement bags are almost exclusively sold through over a hundred independent wholesalers such as
dealers and distributors. These wholesalers are usually associated with various cement producers
although there are also a few which exclusively carry brands of a single manufacturers. Wholesalers
either pick-up cement from the plant or have it delivered to their depots by the cement com panies.
Wholesalers mainly sell cement although a small amount of bulk cement (around 5% of total volume)
is also being sold. These dealers and distributors sell cement to retailers which usually have outlets
selling a variety of building material to the public. As for bulk cement, this is mainly sold directly by the
manufacturers to ready mix concrete producers (RMC), concrete product producers, projects
contractors and developers. The illustration below shows the overall cement supply chain in the
Philippines:

Philippine Cement Industry Supply Chain

Source: Cement Market Report

51
 In terms of customer profile, small contractors and retailers constitutes majority share with
about 75% of total volume. Remaining share is composed of RMCs and concrete product
producers.

Philippine Cement Market Mix- Customer Profile

Concrete
Product
producers
5%
Contractors
and Retail RMC
75% Producers
20%

Source: Cement Market Report

Competitive Landscape

Current Domestic Supply

As of December 2016, the Philippine cement industry has an estimated annual clinker and cement
capacity of 20.6 and 28.63 Million tonnes, respectively based on nameplate capacities of integrated
cement manufacturing and grinding plants in the country. Of these capacities, it could be noted that the
top four (4) industry players (LafargeHolcim, CEMEX, CRH-Aboitiz, and Eagle Cement) account for
about 80.% and 82% of total clinker and cement domestic production, respectively.

No. of No. of
Nature of Integrated Grinding Clinker Capacity Cement Capacity
Company Ownership Plants Plants (Million Tonnes) (Million Tonnes)
CEMEX.. Multinational 2 - 3.60 4.68
CRH-Aboitiz.. Multinational 5 1 4.70 6.77
LafargeHolcim... Multinational 4 1 5.40 6.88
Taiheiyo. Multinational 1 - 1.00 1.30
Eagle Cement.. Domestic 1 1 2.80 5.10
Goodfound. Domestic 1 - 1.00 1.20
Mabuhay Domestic 1 - 0.60 0.72
Northern Cement.. Domestic 1 - 1.10 1.50
Pacific(1) . Domestic 1 - 0.40 0.48
TOTAL 20.60 28.63
Note:
(1)
Plant is currently not operating.
Source: Cement Market Report

In the Luzon region, the top four (4) industry players account for about 90.00% share of the said market.
Note that while Eagle Cement only has 15% share of the Luzon market, it has an estimated market
share of 30.00% in key areas such as NCR and Region. 6 Because of this, Eagle Cement is considered
one of the leading players in the areas of highest economic ac tivity in the Philippines.

6 Based on internal data of the Company.

52
 2015 Luzon Cement Market 2015 Visayas Cement Market

2015 Mindanao Cement Market

Source: Cement Market Report

As for the Visayas region, CEMEX dominates the market with about 40% share, supplying cement
through its plants in Cebu. LafargeHolcim has the largest share of the Mindanao market at 55%,
supplying cement through the two (2) plants it owns on the said area. The following map illustrates the
location of the various cement manufacturing facilities in the Philippines.

Industry Players Plant Locations

53
Imports

As a result of the robust growth in cement consumption, the Philippine cement market has seen
significant growth in imports of both clinker and cement. These imports are brought into the country
either by existing industry players or independent importers. Entry of independent importers are viewed
to be opportunistic in nature and their long-term commitment to the market is questionable since they
have yet to invest in importation assets in the country such as terminals, depots, etc.

The figure below shows the 2016 import data for both clinker and cement into the Philippines market.
Based on the data below, majority of imports are being sourced by existing cement players in order to
augment their domestic cement production. The sources of these imports are mainly countries in the
region which experience supply overcapacity.

Total Clinker and Cement Imports into the Philippines (2016)

In Million Tonnes Existing Players Independent Importers Total

Clinker 1.67 - 1.67
Bulk Cement 1.80 - 1.80
Bagged Cement 0.02 1.87 1.89

Total Clinker 1.67

Total Cement 3.69
Source: Cement Market Report

Supply and Demand Balance of Selected Countries

(2014)

In Million Tonnes Nominal Domestic

per annum Capacity Demand
China 3,160.0 2,462.0
Vietnam 79.5 47.5
Indonesia 76.8 59.9
Thailand 56.4 30.1
Malaysia 34.0 21.0

Source: Cement Market Report

Relating the figures (i) nameplate capacities of clinker and cement production in the Philippines and (ii)
increased importation activity of existing players suggests that domestic producers may have reached
full capacity utilization on both clinker and cement and have therefore been forced to import products
from abroad. In theory, the domestic supply of clinker and cement estimated at 20.60 Million tonnes
and 28.63 Million tonnes, respectively should be adequate to satisfy domestic demand estimated at
26.82 Million tonnes. Mismatch between domestic supply and demand is primarily attributable to lower
than estimated effective capacity of existing plants, especially for old manufacturing plants that are in
need of repair and refurbishment. With the exception of the Eagle Cement, Goodfound and Mabuhay
plants, the remaining plants have an average age of more than 20 years. This may result to lower
clinker-to-cement ratio compared to the industry average of 0.80x. Note, however, that the entry of
imported clinker and cement in the Philippines is limited by the port capacity in the Philippines.

Effective Domestic Supply Situation

Based on the following data, the effective capacity of domestic supply in terms of clinker and cement is
only at 16.83 Million tonnes and 23.12 Million tonnes, respectively. In 2016 almost all of the domestic
manufacturers imported either clinker or cement and given that margins on local production are higher
than on imported products, it would normally be expected that manufacturers would maximize local
clinker production. The apparent discrepancy therefore between the quoted capac ity of around 20 MT
clinker and actual production of around 17 MT might lead to some doubt as to the real capability of the
domestic industry to achieve the stated capacity levels. If this is the case, then there will be an additional
supply shortfall that would have to be met by extra imports or new investments.

54
 Source: Cement Market Report

Industry Forecasts

With the expected increase in construction and infrastructure spending, the Philippine cement market
will require significant additional capacity to support future growth. It is estimated that, the Philippine
cement industry would need an additional 11.55 Million tonnes of cement capacity, respectively to
address cement consumption requirements until 2025.

Cement Supply Demand Balance: 2017 20257

(In Million Tonnes)

70.00

60.00

50.00

40.00

30.00

20.00

10.00

-
2017 2018 2019 2020 2021 2022 2023 2024 2025
Cement- Domestic (Expansion Capacity) Cement- Domestic (Base Supply)
Demand- Upper Case Demand- Base Case
Demand- Lower Case

Source: Cement Market Report

7The projections presented are based on the base case cement supply demand model provided in the Philippine
Cement Market-February 2017 Report

55
In Millions Tonnes 2017 2018 2019 2020 2021 2022 2023 2024 2025
Cement Demand- Upper Case 29.80 33.20 37.00 41.40 46.20 51.60 57.70 64.40 72.00
Cement Demand- Base Case 29.10 31.70 34.60 37.90 41.40 45.30 49.60 54.30 59.60
Cement Demand- Lower Case 28.50 30.30 32.20 34.30 36.60 39.00 41.50 44.20 47.10
Cement- Base Domestic Supply 23.12 23.12 23.12 23.12 23.12 23.12 23.12 23.12 23.12
Cement- Expansion Capacity - 2.68 5.68 7.80 9.30 11.55 11.55 11.55 11.55
Deficit Cement- Upper Case (6.68) (7.40) (8.20) (10.48) (13.78) (16.93) (23.03) (29.73) (37.33)
Deficit Cement- Base Case (5.98) (5.90) (5.80) (6.98) (8.98) (10.63) (14.93) (19.63) (24.93)
Deficit Cement- Lower Case (5.38) (4.50) (3.40) (3.38) (4.18) (4.33) (6.83) (9.53) (12.43)

To address this demand gap, existing players may either build capacity expansions or import clinker
and/or cement from abroad. The latter is especially true for multinational cement countries which have
operations in nearby countries. But given the limitation on port capacity to receive imported cement, it
seems that there is a significant need for the construction of additional capacity going forward to support
not only the widening cement supply gap but also the continuity of economic growth in the country.

56
Business
Unless otherwise indicated, all information contained in this section are based on the Cement Mark et
Report prepared by CBA.

Overview

Eagle Cement Corporation is a fully integrated Filipino-owned company primarily engaged in the
business of manufacturing, marketing, sale and distribution of cement. The Company has the newest,
state-of-the-art, and single largest cement manufacturing plant in the Philippines. The Company is the
4th largest player in the Philippine cement industry based on sales volume, with the fastest growing
market share amongst all competitors in the industry since it started commercial operations in 2010.
The Company was incorporated and registered with the Securities and Exchange Commission (SEC)
on June 21, 1995.

The competitive strength of the Company is founded on its end-to-end production strategy which
seamlessly integrates critical raw material sourcing with modern manufacturing technology resulting to
one of the most efficient cement manufacturing operations in the country. The Company has the largest
integrated single plant production capacity in terms of cement output in the Philippines through its
primary cement production facility located in Barangay Akle, San Ildefonso, Bulacan (the Bulacan
Cement Plant). The Bulacan Cement Plant consists of two (2) production lines with an annual
combined cement production capacity of approximately 5.1 Million MT or 130 Million bags per annum.
It is strategically located near demand-centric areas and in direct proximity to rich limestone and shale
reserves covered by the exclusive mineral rights of the Company. In addition, the Company also
maintains a grinding and packaging facility in Limay, Bataan which can process about 12 Million bags
of cement per annum. Eagle Cement is currently in the process of constructing a third production line
in its Bulacan Cement Plant (Line 3), targeted to be completed in 2018 which will increase its cement
production capacity by about 2 Million MT or about 50 Million bags per annum. This will bring total
production capacity to about 7.1 Million MT or about 180 Million bags per annum, enabling the Company
to consolidate its position as one of the leaders in the cement industry

The Company offers Portland (Type 1P) and bulk (Type 1) cement to both distributors and to top
Philippine real estate developers under the Eagle Cement brand that has become synonymous with
strength, durability, reliability, and world-class quality. As testament to the quality of its products, Eagle
Cement Strongcem is being used in concrete design of up to a high of 12,000 PSI.

The Company supports the distribution of its high quality products through its strong mass media
marketing efforts and grass-roots below-the-line activation partnership-building programs with dealers,
distributors, and retailers. Through its holistic brand building activities, the Company continues to
enhance its value proposition which develop strong client relationships. Sound credit management
framework employed by the Company ensures a substantially liquid financial position that provides
options in short term financial planning and in long term capital development strategy.

Eagle Cement currently distributes its products in the Luzon region which constitute about 65% of total
cement demand in the Philippines, particularly in the following areas : National Capital Region (which
includes Metro Manila), Region I (Ilocos Norte, Ilocos Sur, La Union, Pangasinan), Region II (Batanes,
Cagayan, Isabela, Nueva Vizcaya, and Quirino), Region III (Nueva Vizcaya, Nueva Ecija, Bulacan,
Pampanga, Tarlac, Bataan, Zambales), and Region IVA (Cavite, Laguna and Batangas, Rizal, and
Quezon). As of 2016, NCR still serves as the center of construction and infrastructure activity in the
country. Eagle Cement is considered one of the leading players in areas with the highest economic
activity in the Philippines with an estimated market share of 30% in NCR, Region III, and Region IVA ,
based on internal Company data.

With the foreseen increase in both private and public construction activities, supported by the
commitment of the national government towards infrastructure development, there remains a strong
positive outlook on the Philippine economy which translates to sustained and impressive growt h
prospects for the cement industry in the country. To capitalize on this, Eagle Cement will expand its
production capacity and market coverage in the Philippines with the completion of Line 3 and the
construction of the Cebu Cement Plant in the next five (5) years.

57
The Company is uniquely well positioned to capitalize on these market conditions to maintain its robust
financial performance through modern production technology, strategic raw material sources, strong
brand equity and established customer and dealer relationships.

Corporate Milestones

Set out below are the key milestones in the history of the Company:

January 1995 Eagle Cement was incorporated with the Securities and Exchange Commission
of the Philippines (SEC).

August 2007 Planning and preliminary works were started for the first end-to-end cement
manufacturing facility (Line 1) the Bulacan Cement Plant which included the
following:

Land acquisition for raw material sources and plant site, and

Engineering design and procurement of plant equipment

October 2007 Construction of the Line 1 facility in Bulacan Cement Plant commenced.

January 2010 Line 1 of the Bulacan Cement Plant commissioned.

July 2010 The Company launched Eagle Cement Advance brand in the market.

December [2010] The Company was granted an ITH by the BOI for the Bulacan Cement Plant.

June 2014 ISO-9001 certification was awarded to the Company for the implementation of
Quality Management System.

December 2011 First full year of commercial operations of the Company resulted to sales of
3.9 Billion and corresponding net income of 187.7 Million.

February 2012 The Company launched Eagle Cement Strongcem brand in the market.

September 2013 Completion and commissioning of the Waste Heat Recovery (WHR) facility
with an equivalent power generation capacity of 6.3 MW. Eagle Cement is the
first cement manufacturing company to install a WHR facility in the Philippines
allowing reduction in power costs.

July 2013 Construction of the second end-to-end cement manufacturing facility in the
Bulacan Cement Plant (Line 2) facility commenced.

December 2014 Acquisition of the grinding plant in Limay, Bataan.

August 2015 Acquisition of KB Space Holdings, Inc., a holding company with certain
investments in real estate properties was completed.

February [2016] Line 2 commercial operations commenced.

July [2016] Construction of the third end-to-end cement manufacturing facility in the
Bulacan Cement Plant (Line 3) facility commenced.

November [2016] TUV SUD certifications were awarded to the Company for implementation of
Quality Management System, Environmental Management System and
Occupational Health and Safety Management System for the Manufacture of
Portland Cement and Blended Hydraulic Cement with Pozzolan.

58
November [2016] Acquisition of mineral rights in a140.56-hectare property situated at Ginatilan,
Cebu from APC Group, Inc. (APC) was completed.

December [2016] Acquisition of South Western Cement Corporation (SWCC), a cement

manufacturing company with mineral rights in an 810.25-hectare propert y
situated at Malabuyoc, Cebu, was completed.

[January] [2017] The Company launched Eagle Cement Exceed brand in the market.

Corporate Structure

Set out below is the diagram of the corporate structure of the Company as of the date of this Preliminary
Prospectus:

Source: Company Data.

Far East Cement Corporation

Far East Cement Corporation (FECC) was incorporated in the Philippines on February 17, 1993,
primarily engaged in the business of manufacturing, marketing, sale and distribution of cement, cement
products and by-products. Currently, FECC has ownership interest in holding companies and
companies engaged in the cement manufacturing industry.

59
South Western Cement Corporation

South Western Cement Corporation (SWCC) was incorporated in the Philippines on December 26,
1994. It is primarily engaged in manufacturing, marketing, sale and distribution of cement, cement
products and by-products. SWCC was given the right to source its raw materials on a property situated
at Malabuyoc, Cebu by virtue of the MPSA granted by the Republic of the Philippines through the DENR
in November 1996. The Company acquired 100% equity interest in SWCC on December 2016.

KB Space Holdings, Inc.

KB Space Holdings, Inc. (KSHI) was incorporated in the Philippines on April 13, 1994, with the primary
purpose to purchase, acquire, lease, develop or in any manner hold, own, use, sell or turn into account
or dispose of, land and real estate of any kind and description. KSHI was acquired by the Company on
August 13, 2015. As of December 31, 2016, KSHI owns five (5) contiguous properties with an estimated
aggregate area of 4,815 square meters. KSHI is located in a prime commercial area in Brgy. Wack -
Wack, Mandaluyong City, Metro Manila.

Products and Brands

Cement Bags

Cement bags (cement packed in 40 kilogram bags) are currently sold under either the Eagle Cement
Advance or Eagle Cement Exceed brands. This Type 1P blended cement is used for general
construction applications such as floorings, plastering, as well as the production of concrete products
like hollow blocks, culverts and concrete pipes. Dis tribution of said product is generally done through
direct plant pick-up or delivery to cement retailers, dealers and distributors which in turn is sold to
various customers like retailers, contractors, and home builders.

Bulk Cement

Type 1 bulk cement is sold under the Eagle Cement Strongcem brand. Bulk cement is usually used for
cement and concrete applications that require higher compressive and early strength development such
as concrete slabs, foundations and matting in high rise buildings and infrastructures like roads and
bridges. Distribution of said product is done through direct plant pick -up or truck delivery to institutional
customers such as ready mix concrete suppliers, real estate and infrastructure developers and
contractors.

The chart below illustrates other details of the products of the Company:

Brands Description Product Specifications Target

and National Standards Market
Met
Eagle Cement Type 1P blended cement PNS 63 Home
Advance / Compressive strength 25 builders,
Exceed .......... Portland cement blended with Mpa contractors,
cementitious materials like pozzolan concrete
and fly ash Advance 30Mpa product
makers
*cementitious minerals that have
hydraulic properties that hardens
when it comes in contact with water

Eagle Cement Type 1 bulk cement ASTM C-150 Ready Mix

Strongcem .... Compressive strength concrete,
90-95% Portland cement blended with 28 Mpa contractors
gypsum Strongcem 38Mpa

60
Sales of cement bags to retail customers comprise the main revenue source of the Company accounting
for about 77.06%, 81.72%, and 87.74% of the consolidated net sales for years ended December 31,
2016, 2015, and 2014, respectively. However, demand of bulk cement has seen a CAGR of 67.57%
over the past three (3) years attributable to the continuous marketing and distribution efforts of the
Company towards institutional customers and upstart in both public and private infrastruc ture and
construction sectors signifying the improved presence of the Eagle Cement brand in this particularly
important market segment.

The Company has a diverse customer base and is not dependent on any single customer. No single
customer accounts for 20% or more of the total revenues of Eagle Cement.

Cement Manufacturing and Distribution Process

Set out below is the diagram of the cement manufacturing process of the Company:

Source: Company Data.

Raw Material Sourcing

The cement manufacturing process starts with the sourcing of raw materials such as limestone and
shale. These are mined from naturally occurring reserves and are then transported via payloaders and
dump trucks to the crushing facility where they are crushed and kept in storage facilities.

Proportioning and Blending

The crushed materials are then blended with other additives such as silica, iron ore, gypsum, and fly
ash which are obtained by the Company from outside sources. At this stage, the specification/attributes
of the sourced raw materials are analyzed to achieve proper proportioning/mix of limestone and other
materials before grinding.

Raw Grinding

Once the desired mix of raw materials has been achieved, the blended raw materials are further ground
via roller presses into a fine powder consistency.

61
Pre-Heating

After grinding, the ground raw material mixture is ready for the pre-heating chamber. Pre-heating is a
critical step in preparing the raw material which results in the efficient processing of limestone
compounds. The pre-heating chamber consists of series of vertical cyclones from where the ground
material passes before the burning phase in the kiln. The pre-heating chamber utilizes the hot gases
from kiln making for a more efficient use of energy from other processes.

Burning

The ground and pre-heated raw material is then heated in a kiln (a large rotating furnace, heated by
use of coal) with temperatures reaching up to 1,450 oC. This temperature begins a chemical reaction
wherein the raw materials (like limestone) releases carbon dioxide. The series of chemical reactions
undergone by the raw material at the end of this stage will produce clinker, the primary constituent of
cement.

Clink er Cooling

After the burning process, the clinker is cooled through forced air.

Final Grinding

The clinker is further ground into a fine powder. This fine powder is the primary composite of cement.
During this stage, gypsum and other additives are added in varying amounts to achieve certain cement
characteristics such as the rate of hardening , sulfate resistance, and permeability, among others.
Cement processed at this stage are then stored in silos and eventually packed and delivered to
customers.

Product Distribution

Finished cement is then sold to customers either in 40-kilogram cement bags or in bulk. Bagged cement,
is packed via automated Roto Packer machinery. Bulk cement, is delivered to customers either packed
in 1-tonner bags or in trucks.

62
Raw Material Sources

The primary raw materials used in the cement manufacturing process of the Company are limestone
and shale. Raw materials costs represent approximately [23.53]%, [26.89]% and [19.03]% of the costs
of sales of the Company for years ended December 31, 2016, 2015, and 2014, respectively.

Limestone and shale are sourced by the Company from its own reserves pursuant to its mineral rights.
As part of the strategy of the Company, said reserves are co-located or within proximity of the Bulacan
Cement Plant to minimize transportation/hauling costs. The following table describes the duration of the
mineral rights owned by the Company or its subsidiary as of December 31, 2016. All MPSAs are
renewable for another 25 years subject to approval of MGB.

Holder MPSA No. Location Area Date of Expiration

Coverage Issuance
Eagle 181-2002-III8 Akle, San Ildefonso, 169.37 ha. 12/9/2002 12/9/2027
Cement Bulacan

Eagle 245-2007-III Dona Remedios 82.60 ha. 7/25/2007 7/25/2032

Cement Trinidad and San
Ildefonso, Bulacan

Eagle 100-97-VII Ginatilan, Cebu 549.00 ha. 12/29/1997 12/29/2022

Cement*

Eagle 101-97-VII Ginatilan and 503.00 ha. 12/29/1997 12/29/2022

Cement* Malabuyoc, Cebu

SWCC 059-1996-VII Malabuyoc, Cebu 306.46 ha. 11/18/1996 11/18/2021

SWCC 060-1996-VII Malabuyoc, Cebu 505.79 ha. 11/18/1996 11/18/2021

* Note: Pending DENR approval of the assignment from APC

Other raw materials obtained from third party sources

In addition to the limestone sourced from its reserves, the Company also procures shale, gypsum, silica,
and other raw materials from third party suppliers located within and outside of the Philippines. Raw
materials sourced through third parties are usually contracted on a cost (based on prevailing market
prices) and freight basis up to the plants. Raw materials below the prescribed standards are deducted
from suppliers billings. Losses incurred during the transport of the raw materials to the plant are charged
to the third party service providers.

The Company primarily sources these other raw materials from other third party pursuant to existing
supply agreements and purchase orders.

Distribution Network

There are three (3) channels utilized by the Company in distributing its products to its customers. The
first channel is through distributor sales wherein the cement is delivered to the warehouse of distributors
which then profit from the sale of cement to small scale dealers such as construction and hardware
stores. The second channel is through dealer sales wherein cement is directly delivered to the dealers
which then profit from the sale of cement to end-users such as households and other home builders.
Third channel is through customer pick up or ex-plant sales, ex-plant sales are common with large
distributors (which have their own transportation infrastructure), concrete product manufacturers, and
large-scale real estate and/or industrial contractors.

8 Assigned as security under the TLFSA.

63
 Source: Company Data.

Currently, the Company distributes its products in the following areas of Luzon: National Capital Region
(which includes Metro Manila), Region I (Ilocos Norte, Ilocos Sur, La Union, Pangasinan), Region II
(Batanes, Cagayan, Isabela, Nueva Vizcaya, and Quirino), Region III (Nueva Vizcaya, Nueva Ecija,
Bulacan, Pampanga, Tarlac, Bataan, Zambales), and Region 4A (Cavite, Laguna and Batangas, Rizal,
and Quezon).

The Company has two (2) distribution centers located in the NCR in Paranaque and the Region IVA
center in Cavite. These are complemented by a fleet of about 300 cargo trucks, 300 trailers, and 200
bulk carriers operated by third party service providers comprising a network that can efficiently reach
the most important markets in NCR and its developing suburban areas as well as nearby fast-growing
provincial markets. The distribution network of the Company supplies cement products to about 133
dealers all over NCR and Region IVA.

Source: Internal Company Data.

64
Competition

The four (4) largest cement manufacturers in the Philippines, in terms of annual production capacity,
constitute approximately 88% of the market by sales volume. Eagle Cement is the 4 th largest cement
company in the Philippines in terms of sales volume currently producing and distributing its products in
the Luzon region. 9 The Company estimates that it has a 30% market share in NCR, Region III, and
Region IVA making it one of the leading players in areas of the highest economic activity in the country. 10

The primary competitors of the Company in the Philippine cement industry include: LafargeHolc im,
Republic (CRH-Aboitiz), Cemex, Northern Cement Corporation, and Goodfound Cement Corporation.
Competition is mainly on the basis of product quality, market coverage, distribution infrastructure,
product offerings, marketing strategy, brand equity and pricing. Given the Key Strengths of the
Company and its track record to date, Eagle Cement believes it can continue to compete strongly on
these factors with other players in the industry.

The Company believes there are innate barriers to entry into the domestic cement market such as: (i)
sources of raw materials; (ii) high capital outlay specifically for greenfield projects; (iii) development of
brand equity; (iv) establishment of a distribution network; (v) limitation on domestic port capacity and
high transportation costs; (vi) the variety of product offerings available in the market; and (vii) the period
of time spent on the construction and rehabilitation of new and existing plans, respectively.

Due to the limitations of indigenous cement supply vis--vis the domestic consumption of cement, the
Philippines has seen the entry of imports to partially address supply deficits. The influx of imported
clinker and cement in the domestic cement industry has resulted in tighter pricing of cement products
in the market. See The Philippine Cement Industry on page 47 and Risk Factors on page 17.

Key Strengths

The following attributes contribute to the strength of the Company putting it in a prime position to
capitalize on the growth of the cement industry as driven by the vibrant prospects of the Philippine
Economy.

The single largest fully-integrated manufacturing facility with state-of-the art production lines.

The Company has the largest integrated single plant production capacity in terms of cement output in
the Philippines. The Bulacan Cement Plant consists of two (2) production lines with an annual cement
production capacity of approximately [5.1Million MT or 130 Million bags]. The plant covers the end-to-
end production of cement from raw material sourcing and processing, clinker production, grinding and
mixing, to packaging and cargo loading, providing the Company with significant process, cost, and
quality control and more efficient operations.

The production lines utilize state-of-the-art technology in the production of Eagle Cement Advance,
Eagle Cement Exceed and Eagle Cement Strongcem. The facility is regularly upgraded with the latest
machinery to consistently achieve improved operating efficiencies and to maintain a superior cost
structure compared to its competitors. In 2015, the Company acquired a vertical mill, the largest single
cement mill in the country for its Line 2 facility which has lower power consumption compared to
conventional mills. The Company also employs a waste heat recovery system which supplies a portion
of the total power requirements of the plant. Constant improvement of the facilities and manufacturing
process ensure a high quality of cement produced in the most efficient manner.

The plant also has a significant post-production facility where cement is stored in silos until such time
that these are sold and delivered to distributors and/or consumers in 40 kilogram bags or in bulk. The
plant maintains 14 loading bays that can accommodate about 400 trucks per day. The integration of

9 Philippine Cement Market Report

10 Based on internal data of the Company.

65
raw material sourcing, processing, and packaging in a seamless manufacturing process allows the
Company to produce and distribute about 393,000 bags of cement per day with the two (2) current lines.

The Company has a distribution infrastructure which includes two (2) distribution centers located in
strategic areas complemented by a fleet of approximately 300 cargo trucks, 300 trailers, and 200 bulk
carriers operated by third-party service providers comprising a logistics network geared to distribute to
the highest value and fastest growing markets in NCR and the nearby provinces.

The end-to-end business model of the Company has enabled it to manage cost and margins in every
stage of the cement production and distribution process, allowing for higher efficiency, profitability, and
operating synergy.

Strategic location of plants and access to vast limestone reserves.

As of 2015, it is estimated that the Luzon market accounts for about 65% of the total cement demand
in the Philippines with the NCR having by far the largest domestic market demand. The Bulacan Cement
Plant is strategically located in the Province of Bulacan that allows the Company to readily serve key
markets in Luzon including NCR, Cagayan Valley, Isabela, Nueva Vizcaya, Nueva Ecija, Bulacan,
Pampanga, Tarlac, Bataan, Zambales, Cavite, Laguna, and Batangas.

The location of the plant in Central Luzon coupled with its reliable and established distribution network
provide a significant competitive advantage in the distribution of cement in the key markets in Luzon.
With about 30% market share in NCR, Region III and Region IVA, the Company is already seen as one
of the leading players in the areas of highest economic activity in the Philippines. 11

As the Luzon market is expected to continue to be a major cement market in the future periods, the
Company stands to maintain its status as one of the leading players in the said area given the vast
limestone reserves that the Company controls in the proximity of its Bulacan Cement Plant. The
Company holds the rights to a total of [251.97] hectares of land in Bulacan, with an estimated limestone
deposit of approximately
300 Million MT, for sourcing raw materials for the Bulacan Cement Plant. From 2010 up to December
2016, the Company utilized 7 Million MT of limestone for cement manufacturing. The extensive
limestone deposits are more than sufficient to support in the long term both the current operations and
expansion plans.

Strong brand equity for both retail and institutional customers.

Since the commencement of commercial operations in 2010, the Company has quickly established
strong brand equity for Eagle Cement. This was done through, among others, the High sa Tibay
campaign channeled through traditional mass media. Because of such efforts, the Eagle Cement brand
is now widely recognized and has become synonymous with strength, durability, reliability, and world -
class quality cement products. Furthermore, Eagle Cement promotes through extensive below-the-line
activations and loyalty programs which further enhance value proposition of its products and foster
strong partnerships with dealers and distributors.

The Company is one of the leading partners of the top Philippine developers for major infrastructure
and real estate projects on the account of the world-class quality and price competitiveness of its
cement. As a testament to product quality, Eagle Cement Strongcem is being used in concrete designs
of up to a high of 12,000 PSI.

Extensive distribution network coupled with a lean and efficient sales and marketing framework.

Eagle Cement has two (2) distribution centers in Paranaque and Cavite that service the Luzon market,
particularly the major population centers such as NCR and Region IVA. This is complemented by a
fleet network of approximately 300 cargo trucks, 300 trailers, and 200 bulk carriers operated by over 40
third-party service providers. This network supports the selling and marketing activities of the 18 sales

11 Based on internal Company data.

66
and marketing agents of the Company for the entire Luzon mark et. The distribution network of the
Company supplies cement products to about 133 dealers all over NCR and Region IVA. Furthermore,
the Company also established a key accounts group which handle the requirements of its institutional
customers which account for about 22.94% of total sales for the period ended December 31, 2016.12

With regard to its sales framework, the Company requires 80%-90% of the customers to provide upfront
payments prior to the delivery of the products. Market leaders in the construction industry and other
long-term institutional clients with good credit standing, comprising 10%-20% of its client base, are
given credit payment terms by the Company subject to prudent credit evaluation, a majority of which
are fully secured (i.e. bank guarantee). This framework ensures that the Company maintains a
substantially liquid financial position that gives the Company options in short term financial planning
and in long term capital development strategy.

Seasoned and competent management, operating and marketing teams with proven track
record in the cement industry.

The Company is helmed by a highly effective and professional management team with extensive
experience in the Philippine cement industry. It maintains a lean organizational structure that is flexible,
responsive and easily adaptable to market changes. The management team of the Company has a
combined cement industry experience of more than 100 years and with a strong track record of growt h
and delivery since commencement of operations in 2010. The understanding and deep knowledge by
the management team on the Philippine operating environment has enabled the Company to establish
long-standing relationships with customers, suppliers, distributors and partner institutions, allowing the
Company to become one of the leading cement manufacturers in the country in less than a decade of
operations. The Company employs a complement of highly competent technical and marketing
personnel with industry experience and professional excellence.

Strategically positioned to take advantage of the growth opportunities in view of the favorabl e
growth outlook in the construction industry of the country.

Since the commencement of operations of its Line 1, the Company has consistently outperformed the
cement industry in terms of growth rate, while also increasing its market share of sales volume.

Philippine cement consumption has been relatively low compared to other neighboring Southeast Asian
countries. For instance, using 2014 data, Vietnam (89 Million population @ 524kg/capita), with a
comparable population size, has a cement demand which is more than twice that of the Philippines (100
Million population @ 212kg/capita).

With cement demand being viewed as highly correlated with the economic condition of the country, the
domestic cement industry has a positive outlook since the Philippines continues to be one of the fastest
growing countries in the ASEAN region. This is supported by a renewed focus towards public and
private construction activities. Furthermore, the increase in construction activity can be attributed to an
increased infrastructure spending by the national government. The commitment of the Dutert e
administration to roll-out 64 big-ticket projects in the next six (6) years is expected to usher in a Golden
Age of infrastructure in the Philippines.13 The current administration intends to invest at least 8 Trillion
over the next six (6) years.14 The government will focus on railway projects, improvements of ports of
entry such as seaports and airports, mega bridges and toll roads which are expected to promote mobility
and interconnectivity in the long run. This presents a major opportunity for growth in the cement industry.

Given these developments, cement demand is expected to outpace installation of additional cement
production capacity. Despite the recent entry of cement imports, a significant portion of future cement
demand may only be addressed by additional cement production capacity installation. This indicates a
significant need for construction of domestic expansion facilities. However, expansion will require

12 Based on internal Company data.

13 Economic Development Cluster (DOF, NEDA, DBM)
14 Department of Budget and Management

67
access to sufficient strategically located and permitted raw material reserves which are not currently
available to all manufacturers. Furthermore, only a few players in the industry have signified interest to
invest in additional manufacturing capacity. The strategic focus of the Company on growing its cement
production capacity through the construction of Line 3 and the planned Cebu Cement Plant will allow
the Company to take advantage of this opportunity.

Please see The Philippine Cement Industry on page 47.

Track record and financial condition

Given the foregoing, the Company, enjoys solid financial growth as evidenced by its favorable
profitability metrics. Sales of the Company posted a CAGR of 56.48% outpacing the growth of the
industry with the CAGR of 24.17% from 2011 to 2015. As such, the Company became the 4th largest
cement manufacturer in the Philippines in terms of sales volume in a span of less than six (6) years.

The state-of-the-art production facility of the Company, complemented by its accessibility to vast
limestone reserves, has enabled the Company to post cost efficiencies and healthy margins. The
EBITDA margin of the Company stood at [47.93]%, [40.08]%, and [44.75]%, in 2016, 2015, and 2014,
respectively while net profit margin was at [30.98]%,[33.26]% and [35.56]%, respectively for the
foregoing years.

Business Strategies

Increase production capacity and expand distribution channels in key growth regions in the
country.

The Company intends to expand operations outside of its existing market coverage in the Philippines
by increasing its existing production capacity in line with its expansion plan. With the completion of the
construction of Line 3, the Company will be able to increase its market coverage in Luzon to include
Bicol, Mindoro, Marinduque, Romblon, Palawan, as well as reach Western Visayas.

To further extend its market coverage and increase operating efficiencies, the Company shall establish
the Cebu Cement Plant to anchor its expansion in the Visayas and Mindanao markets such as Negros ,
Cebu, Bohol, Masbate, Misamis Oriental, Davao, Zamboanga, and South Cotabato. To support its
expansion plans, the Company will also establish as part of its Cebu Cement Plant, various marine
terminals in the Visayas-Mindanao region. This would strategically position the Company in the region
and ensure reliability of supply.
68
The Company shall continuously evaluate business prospects, potential capacity expansion and
acquisitions, subject to the prevailing competitive landscape and cement supply demand balance. In
line with this, Eagle Cement may also venture into other related products and/or market segments such
as ready-mix concrete, masonry or mortar cement and others.

Ensure sustainability and proximity of raw material sources.

The Bulacan Cement Plant of the Company has access to conservatively estimated 300 Million MT of
limestone reserves, the largest among Philippine cement industry players, which support its current and
long-term production requirements of its existing lines.

Consistent with its expansion strategy, the Company shall continuously explore prospective limestone
and other secondary raw materials in the Luzon, Visayas and Mindanao regions. Sustainability of raw
material sources for the new plants shall ensure viability of the expansion plan.

Similar to the synergies created by the co-location of the Bulacan Cement Plant and its existing raw
material source, the Company will optimize the proximity between the expansion plants and raw
material supply to ensure the success of the expansion plan.

Further enhance customer and product value proposition.

The Company intends to further enhance the value proposition of its products through various brand -
building activities backed by traditional mass media and extensive below-the-line activations and loyalty
programs, by, among others, the High Sa Tibay campaign which aided the Company in achieving
strong brand equity in the Luzon region.

The Company plans to capitalize on strategic partnerships with dealers and distributors through various
below-the-line activations and participation in industry-specific events which are aligned with the
positioning of the products of the Company. To maintain its strong relationships with dealers and
distributors, the Company has established (i) the key accounts group which handle the requirements of
the large-scale distributors/dealers and institutional clients; and (ii) loyalty programs that provide
incentives to dealers and distributors which achieve a certain order volume within a specific period of
time.

69
Maintain price competitiveness

One of the key business strategies of the Company since the commencement of its operations is to
maintain the price competitiveness of its products. With a lean and adaptable organization, the
accessibility of vast raw material sources close to its production plants, a fully integrated cement
production process and regular upgrades to its production facilities, the Company is in a strong position
to optimize its cost base leading to the realization of higher profit margins while at the same time
maintaining a sustainable and reliable supply of products to customers. These enable the Company to
compete with other industry players at a distinct competitive advantage in key areas , allowing the
Company to capture about 30% market share in NCR, Region III, and Region IVA in 2016.15

With the success of its initial venture, the Company intends to continue adopting this st rategy of price
competitiveness anchored on efficient supply chain management, investment in state-of-the-art
manufacturing technology and strategic development of raw material sourcing in its expansion plans
aiming to further increase its manufacturing output and logistics reach to deliver the highest standard
cement products to a market expected to grow leaps and bounds in the following years.

Notwithstanding the existing production framework of the Company, it shall continue to explore, invest,
and implement activities which will result in improved operational efficiencies and cost reduction targets.
This shall ensure that the Company remains among the lowest cost industry players in the country.

EMPLOYEES

The Company has been able to maintain a good relationship with its workforce. Neither Eagle Cement
nor any of its subsidiaries has experienced a work stoppage as a result of labor disagreements. None
of the employees of the Company belong to a union since its incorporation in 1995.

The following table sets forth the total employee headcount, divided by function, as of December 31,
2016.

Management Committee 14
Managers 5
Superintendents/Heads 18
Supervisors 112
Rank and File 178

Total Headcount 327

The Company has a rewards and recognition policy that is competitive with industry standards in the
Philippines. Salaries and benefits are reviewed periodically and adjusted accordingly to retain current
employees and attract new talent. Tied to this is a performance management system that calls for the
alignment of individual key results, competencies, and development plans with the overall business
targets and strategy of the Company. Performance is reviewed annually and employees are rewarded
based on the attainment of pre-defined objectives. In addition to its statutory benefits, the Company
maintains benefits to provide for the increased security of its employees in the following areas:
healthcare, leaves, miscellaneous benefits, loans and financial assistance applicable to a variety of
uses, retirement benefits, survivor security and death benefits. The Company also provides programs
for the professional and personal development of the employees.

With the upcoming commissioning and full operations of its Line 3 and expansion plans, Eagle Cement
will require the hiring of additional employees to support its business expansion, making the total
personnel requirement of the Company until 2018 approximately 460 to 500.

15 Based on internal Company data.

70
INSURANCE

The Company maintains appropriate insurance coverage on its properties, assets and operations and
covering such risks as are usually carried by companies engaged in similar businesses and using
similar properties in the same geographical areas as those in which it operates. Insurance policies of
the Company include coverage for the following risks: all-risk industrial insurance coverage, material
damage, boiler and machinery breakdown, business interruption, comprehensive general liability,
robbery and burglary, money insurance, fidelity guaranty, property floater, and electronic and equipment
insurance. Likewise, the Company requires counterparties to issue performance guarantees, surety
bonds, warranties for construction work and equipment. The insurance providers of the Company
include both large and reputable domestic and international insurers in an effort to both get competitive
rates and to diversify coverage consistent with prudent risk management principles.

INTELLECTUAL PROPERTY

Under the Intellectual Property Code of the Philippines, the rights to a trademark are acquired through
the registration with the Bureau of Trademarks of the Intellectual Property Office, which is the principal
government agency involved in the registration of brand names, trademarks, patents and other
registrable intellectual property materials.

Upon registration, the Intellectual Property Office shall issue a certificate of registration to the owner of
the mark, which shall confer the right to prevent all third parties not having the consent of the owner
from using in the course of trade identical or similar signs or containers for goods or services which are
identical or similar to those in respect of which the mark is registered. The said certificate of registration
shall also serve as prima facie evidence of the validity of registration and the ownership of the mark of
the registrant. A certificate of registration shall remain in force for an initial period of ten (10) years, and
may be renewed for periods of ten (10) years at its expiration.

Set out below is a list of marks registered or pending registration with the Philippine Intellectual Property
Office:

Registered Trademark s
Trademark Date of Registration Registration No. Effectivity
February 11, 2010 4-2009-010863 February 11, 2020

May 13, 2010 4-2009-012374 May 13, 2020

February 27, 2014 4-2013-010045 February 27, 2024

71
Pending Applications for Registration

Trademark Date of Application Remarks

December 3, 2009 Pending litigation. Please refer
to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

December 3, 2009 Pending litigation. Please refer

to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

December 3, 2009 Pending litigation. Please refer

to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

December 3, 2009 Pending litigation. Please refer

to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

August 23, 2013 Pending litigation. Please refer

to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

August 23, 2013 Pending litigation. Please refer

to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

August 23, 2013 Pending litigation. Please refer

to section on Legal
Proceedings on page 76 of this
Preliminary Prospectus.

72
 April 8, 2015 Awaiting approval

Awaiting approval

June 16, 2015

June 16, 2015 Awaiting approval

August 10, 2016 Awaiting approval

August 10, 2016 Awaiting approval

PERMITS AND LICENSES

The Company holds various permits and licenses for its business operations, which include but are
not limited to, the following:

Permits
Commercial: Business Permit
Trademark License
Import License
Product license for type-1
portland cement
Product license for type-1P
blended cement
BIR Certificate of Registration

Raw Material Sourcing & Environmental Protection and

Manufacturing: Enhancement Program

73
 Environmental Compliance
Certificate
EMB Permit to Operate
Discharge Permit
Waste Generators Registration
Certificate
Pollution Control Certificate of
Accreditation
DOE Certificate of Registration
ERC Certificate of Compliance
Water Permit

In connection with the expansion of the Bulacan Cement Plant through the construction and operation
of Line 3, the Company applied for the amendment of its ECC to also cover the construction and
operation of the additional facilities. The Company has submitted the required documents to support
the application for the amendment of its ECC, in compliance with the requirements of environment al
laws, rules and regulations. The application has been received and acknowledged by the EMB, and is
currently being processed. Given that the Company has submitted all the required documents relative
to the application, the Company expects that the DENR will issue the amended ECC (to cover Line 3
construction and operations) in due course.

HEALTH, SAFETY, AND ENVIRONMENTAL MATTERS

Eagle Cement is subject to a number of laws and regulations relating to the protection of the
environment and human health and safety, including those governing air emissions, water and
wastewater discharges, and odor emissions and the management and disposal of hazardous materials.
The Company applies its quality standards uniformly across all its production facilities.

The Company intends to continue to strengthen its commitment to health and safety standards, such
as ISO-9001. Eagle Cement was issued an ISO-9001 certification by TUV-SUD Asia Pacific TUV SUD
Group for the establishment and application of a quality management system , environment al
management system, and occupational health and safety management system for the manufacturing
of Portland cement and blended hydraulic cement with pozzolan.

The Company believes it is compliant with relevant health, safety, and environmental laws, except
where such none compliance will not have a material adverse effect on the business of Eagle Cement.

On an annual basis, the costs incurred by the Company to comply with environmental laws amount to
18.5 Million for the period ended December 31, 2016.

74
Description of Property
PROPERTIES

The general asset description and locations of the various plants and offices owned and leased by the
Company and its Subsidiaries are included in Appendix C of this Preliminary Prospectus.

The properties in Appendix C of this Preliminary Prospectus are in good condition, ordinary wear and
tear excepted. The Company is continuously evaluating available properties for sale which cost or
details cannot be determined at this time.

75
Legal Proceedings
As set forth below, the Company is involved in ongoing legal cases the outcome of which may or may
not have a material adverse effect on its operations and profitability.

Trademark-Related Cases

Republic Cement Corporation (RCC) sought the cancellation of the Eagle Cement trademark owned
by the Company. On 23 January 2017, the Supreme Court dismissed the petition for review filed by
RCC and affirmed the decision of the Court of Appeals and IPO Director General that RCC failed to
prove ownership and prior use of the EAGLE CEMENT mark.

These six (6) cases were filed by Republic Cement Corporation16 (now known as Lafarge Republic )
with the Bureau of Legal Affairs (BLA) of the Intellectual Property Office (IPO) between against the
Company. One case was filed for the cancellation of the trademark registration of the Company while
the rest of the cases were filed to oppose the trademark applications.

RCC was alleging that it is the prior user and owner of the EAGLE CEMENT trademark having
attempted to apply for registration of the same in June 1997. RCC claims that even if it did not pursue
its application, it continued to use the EAGLE CEMENT mark, thus, it should be declared the owner of
the mark.

On the other hand, the Company is arguing that RCC has not proven that it owns the EAGLE CEMENT
mark. RCC is not a continuous user as it no longer uses the subject mark. RCC is also guilty of laches
since it failed to pursue its application. Furthermore, the Company has a better right pursuant to the
first-to-file rule since the Company filed and registered the trademark first. Finally, EAGLE CEMENT
CORPORATION is the corporate name of the Company.

In a decision dated January 30, 2014, the BLA ruled in favor of RCC and declared it owner of the EAGLE
CEMENT mark. On appeal, the IPO Director General reversed the BLAs decision and ruled in favor of
the Company in his Decision dated November 24, 2014, stating that: (a) RCC failed to prove ownership
and prior use of the EAGLE CEMENT mark, and (b) the Company has a better right over the said
mark due to its registration.

RCC filed a Petition for the review of the consolidated decision of the IPO Director General with the
Court of Appeals (CA). The CA dismissed the petition and ruled in favor of the Company in its Decision
dated December 16, 2015 affirming the decision of the IPO Director General. RCC filed a Motion for
Reconsideration on January 20, 2016. The Company filed its Comment thereto on April 15, 2016. On
September 26, 2016, the Company received the resolution of the Court of Appeals dated September
7, 2016 denying the Motion for Reconsideration filed by RCC and sustaining its dismissal of the Peti tion
for Review of the consolidated decision of the IPO Director General.

Three (3) other cases were filed by RCC against the Company with the IPO BLA in relation to the new
trademark applications of the Company. RCC merely echoed the previous arguments it used against
the Company in the six (6) cases discussed above. The parties filed their respective Position Papers
on September 22, 2014. The cases have been submitted for decision by the BLA.

Civil Case for Fraud

The Company is the plaintiff in this case. It sought to enjoin defendants Exclusive Precinct Int. (M) Sdn
Bhd (Exclusive), PT Hasta Yasa Semsta (PT Hasta), an Indonesian entity, QY Asia Marketing &
Services Sdn Bhd (QY Asia), a Malaysian entity, and Malayan Bank Berhad (Maybank) from claiming
under the Letter of Credit No. 2010/0260 in the amount of Nine Hundred Four Thousand US Dollars
(US$904,000.00) and defendant Bank of Commerce (BOC) from releasing payment under the same

16 Now CRH-Aboitiz

76
Letter of Credit. The complaint also prays for the urgent issuance of a temporary restraining order and
writ of preliminary injunction.

In October 2010, the Company entered into an agreement, as buyer, for the shipment of Eight Thousand
Metric Tons (8,000 MT) of coal from PT Hasta, Exclusive and QY Asia, as sellers. Pursuant to the
agreement, Eagle Cement applied for and was issued a Letter of Credit by BOC with Wells Fargo as
the reimbursing bank and Maybank as the beneficiary bank.

Initially, the Company wanted the Letter of Credit to reflect that payment will only be released upon
submission of the Draft Survey Report by PT Hasta, Exclusive and QY Asia. PT Hasta, however,
requested that no amendments be made to the Letter of Credit but that it is understood between all
parties that the payment will only be released upon the issuance of a Draft Survey Report evincing the
shipment. The Company, in good faith, adhered to the request.

When shipment of the coal was delayed, the Company sought for an amendment of the Letter of Credit
wherein payment shall only be released upon presentation of the Draft Survey Report and the packing
list and original bills of lading. PT Hasta rejected the amendment.

Meanwhile, Maybank presented to BOC a commercial invoice and bank drafts and sought payment for
the Letter of Credit. The Company notified PT Hasta and Exclusive and urged them to refrain from
enforcing their claim as no shipment has been made. The latter agreed. Despite such commitment,
Maybank continued to enforce its claim.

After considerable delay of the shipment, the Company sought help from the Philippine Embassy in
Malaysia. Through the embassy, the Company found out about the dubious financial standing of
Exclusive and that its business address is simply a residential area. These circumstances cast doubt
as to the existence of the Company and its financial capability. Hence, the Company filed a complaint
for fraud against defendants Exclusive, PT Hasta, and QY Asia with the Malaysian Police. After which,
the Company lost contact with the representative of Exclusive.

Meanwhile, Maybank proceeded to enforce its claim against BOC for the release of the payment under
the Letter of Credit despite the lack of shipment. Considering that the Letter of Credit simply required
that a draft be presented, with no qualification as to its nature, BOC informed the Company that it is
constrained to grant the claim of Maybank.

On July 12, 2011, a writ of preliminary injunction was issued by Hon. Presiding Judge Ofelia C Calo of
the Regional Trial Court of Mandaluyong, Branch 211, enjoining defendants from claiming payment
from defendant Bank of Commerce.

Maybank and Bank of Commerce filed their respective Answers and the Company has, in turn, filed its
Reply.

Considering that no amicable settlement was reached between the parties during the mediation and
the judicial dispute resolution proceedings, the case has been re-raffled to Branch 208 of the Regional
Trial Court of Mandaluyong for trial on the merits.

On October 20, 2016, the Company presented its first witness, Mr. Manny C. Teng, but did not terminat e
his direct examination. The Company through counsel requested for a resetting to remark its
documentary exhibits. However, considering that the case has already been pending for several years,
the Court directed the parties to re-examine the records and adopt all evidence that were already
presented in the case. The Court likewise directed the parties to jointly manifest at the next hearing
their suggestion on how to proceed with the trial.

77
Regulatory and Environmental Matters
The statements herein are based on the laws in force as of the date of this Preliminary Prospectus and
are subject to any changes in law occurring after such date, which changes could be made on a
retroactive basis. The following summary does not purport to be a comprehensive description of all of
the regulatory and environmental considerations that may be relevant to the Company or the offering.

GENERAL

Foreign Investment Act of 1991

The Foreign Investment Act of 1991 (the FIA) liberalized the entry of foreign investment into the
Philippines. Under the FIA, in domestic market enterprises, foreigners can own as much as 100% equity
except in areas specified in the Foreign Investment Negative List (the Negative List). The Negative List
enumerates industries and activities which have foreign ownership limitations under the FIA and other
existing laws.

For the purpose of complying with nationality laws, the term Philippine National is defined under the
FIA as any of the following:

(a) a citizen of the Philippines;

(b) a domestic partnership or association wholly-owned by citizens of the Philippines;

(c) a corporation organized under the laws of the Philippines of which at least 60% of the capital
stock outstanding and entitled to vote is owned and held by citizens of the Philippines;

(d) a corporation organized abroad and registered to do business in the Philippines under the
Philippine Corporation Code, of which 100% of the capital stock outstanding and entitled to vot e
is wholly owned by Filipinos; or

(e) a trustee of funds for pension or other employee retirement or separation benefits, where the
trustee is a Philippine National and at least 60% of the fund will accrue to the benefit of Philippine
Nationals.

Compliance with the required ownership by Philippine Nationals of a corporation is to be determined on

the basis of outstanding capital stock whether fully paid or not, but only such stocks which are generally
entitled to vote are considered.

In the Philippine Supreme Court case of Wilson P. Gamboa v. Finance Secretary Margarito B. Teves,
et. al. dated June 28, 2011 (G.R. No. 176579) (the Gamboa Case), a case involving a public utility
company (which under the Philippine Constitution is also subject to the 60-40 rule on capital ownership),
the Philippine Supreme Court ruled that the term capital, as used in Section 11 of Article XII of the
Philippine Constitution, refers only to shares of stocks entitled to vote in the election of directors and
not to the total outstanding capital stock, because it is the said voting rights which translate to control.
The Supreme Court claimed that this interpretation is consistent with the intent of the framers of the
Constitution to ensure that the control and management of public utilities remain with Filipino Citizens.
This decision has been a subject of Motions for Reconsideration ("Motions").

On October 9, 2012, the Supreme Court sitting en banc issued a Resolution (the "Gamboa Resolution" )
and ruled that the term capital as refers to both voting control and beneficial ownership of the
corporation. The Supreme Court also ruled that in case a corporation engaged in a partially nationalized
activity issues a mixture of common and preferred non-voting shares, the 60-40 ownership requirement
under the Philippine Constitution must apply not only to shares with voting rights, but separately to all
classes of shares issued by a corporation, including shares without voting rights. This is because
preferred shares, though denied the right to vote for directors, are still entitled to vote on other corporat e
matters. Accordingly, at least 60% of the common shares and at least 60% of the preferred non-vot ing
shares of a corporation engaged in a partially nationalized industry must be owned by Filipinos.

78
Thus, for purposes of establishing compliance with the 60-40 rule on capital ownership under the
Philippine Constitution and the Foreign Investments Act, Filipino citizens must own (a) at least 60% of
all of the issued and outstanding capital stock of such corporation (regardless of par value, whether
voting or non-voting) and (b) at least 60% of each class of shares issued by such corporation.

Subsequent to the Gamboa Case cited above, in the December 2012 case of Express Investments v.
Bayan Telecommunications, Inc. (G.R. No. 174457-59), the Philippine Supreme Court discussed the
Gamboa ruling, and clarified that considering that common shares have voting rights which translate
to control as opposed to preferred shares which usually have no voting rights, the term capital in
Section 11, Article XII of the Constitution refers only to common shares. In t he said case, the Supreme
Court, however, added that if the preferred shares also have the right to vote in the election of directors,
then the term capital shall include such preferred shares because the right to participate in the control
or management of the corporation is exercised through the right to vote in the election of directors. The
Philippine Supreme Court said that in short, the term capital in Section 11, Article XII of the
Constitution refers only to shares of stock that can vote in the election of directors. This then
supersedes the implied pronouncement in the Gamboa Resolution that the 60-40 ownership
requirement in favor of Filipino citizens must apply to each class of shares, regardless of voting rights.
Thus, the recent decisions of the Supreme Court remain consistent with the Foreign Investments Act,
which apply the minimum Filipino requirements only to shares that are generally entitled to vote.

On May 20, 2013, the SEC issued Memorandum Circular No. 8 or the Guidelines on Compliance wit h
the Filipino-Foreign Ownership Requirements Prescribed in the Constitution and/or Existing Laws by
Corporations Engaged in Nationalized and Partly Nationalized Activities. The Circular provides that for
purposes of determining compliance therewith, the required percentage of Filipino ownership shall be
applied to BOTH (a) the total number of outstanding shares of stock entitled to vote in the election of
directors; AND (b) the total number of outstanding shares of stock, whether or not entitled to vote in the
election of directors. A petition for certiorari has since been filed sometime in June 2013, questioning
the constitutionality of the Rules on Foreign Ownership (Memorandum Circular No. 8, Series of 2013)
promulgated by the SEC. This petition remains pending with the Supreme Court as of this time.

More recently, in the case of Narra Nickel Mining and Development Corporation, et.al vs. Redmont
Consolidated Mines Corp (G.R. No. 195580, April 21, 2014) (the "Narra Nickel Case"),, the third division
of the Supreme Court, in passing upon the nationality of applicants for a Mineral Production Sharing
Agreement, stated that while the prevailing rule is still the use of the Control Test, the Grandfather Rule
applies in instances when there is doubt as to the proper representation of the Filipino-foreign equity
participation (making reference to the 1967 SEC Rules and DOJ Opinion No. 020 Series of 2005).
Under the Grandfather Rule, shares owned by corporate shareholders are either attributed as part of
Filipino or foreign equity by determining nationality not only of the corporate shareholders but also such
shareholders of the corporate shareholders and their shareholders (down the line).

On January 28, 2015, the Supreme Court issued a Resolution dismissing with finality the Motion for
Reconsideration of its decision in the Narra Nickel Case. Thus, the Supreme Court affirmed that the
Grandfather Rule is to be used jointly and cumulatively with the Control Test, as follows: (1) if the
Filipino equity of the corporation falls below 60%, it is immediately considered foreign-owned, applying
the Control Test; (2) if the corporation passes the Control Test, the corporation will be considered a
Filipino corporation only if there is no doubt as to the beneficial ownership and control of the corporation;
and (3) if the corporation passes the Control Test but there is doubt as to the beneficial ownership and
control of the corporation, the Grandfather Rule must be applied.

Thus, although the Narra Nickel Case in no way abandons the use of the Control Test and the Foreign
Investments Act provisions in determining the nationality of a corporation, it appears to expand and/or
modify the doctrine laid in the Gamboa Case cited above. Under the Constitution, however, no doctrine
or principle of law laid down by the Supreme Court in a decision en banc or in division may be modified
or reversed except by the court sitting en banc.

79
Philippine Mining Act

Republic Act No. 7942, otherwise known as the Philippine Mining Act of 1995, governs the exploration,
development, utilization and processing of all mineral resources and includes measures to protect the
government. Grantees of mineral agreements from the Department of Environment and Natural
Resources (the DENR) have the right to conduct mining operations, which covers mining activities
involving exploration, feasibility, development, utilization, and mineral processing. Furthermore, the
extraction and utilization of quarry resources on public or private lands may be undertaken by any
qualified person holding a quarry permit. A quarry permit authorizes the extraction, removal and
disposition of quarry resources. It is issued by the Provincial Governor/City Mayor through the
Provincial/City Mining Regulatory Board for the extraction, removal and disposition of quarry resources
covering an area of not more than five (5) hectares, and a production rate of not more than 50,000 tons
annually and/or whose project cost is not more than 10,000,000.00, for a term of five (5) years from
the date of issuance, renewable for like periods but not to exceed a total term of 25 years.

Indigenous Peoples Rights Act

Republic Act No. 8731, otherwise known as the Indigenous Peoples Rights Act (IPRA), provides for
the ownership rights of indigenous cultural communities (ICCs) or indigenous peoples over ancestral
domains. Under the IPRA, the ancestral domains refer to all areas generally belonging to indigenous
communities/peoples (IPs). The National Commission on Indigenous Peoples (NCIP) is the primary
government agency that formulates and implements policies and programs for the promotion and
protection of the rights of ICCs and IPs and the recognition of their ancestral domains and their rights
thereto. Under the IPRA, the proponent of any activity undertaken within any area covered by a
Certificate of Ancestral Domain/Land Claim/Title issued by the NCIP to any ICC or IP must obtain the
free and prior informed consent (the FPIC) of all members of the ICCs/IPs, and, thereafter, the
Certification Pre-condition (NCIP-CP) issued by the NCIP. In case no ICCs or IPs claim any rights
over the site of the proposed activity, a Certificate of Non-Overlap (CNO) issued by the NCIP is
required to be obtained by the proponent of such activity from the NCIP. The absence therefore of either
a Certification Precondition or CNO may be sufficient basis for the suspension of the implementation of
any such mining activity.

Power Generation Regulation

A Certificate of Compliance (COC) from the Energy Regulatory Commission (ERC) to operat e
facilities used in the generation of electricity (including self-generation facilities) is required considering
that the generation of electricity is done in the course of cement manufacturing.

The COC is in the name of the generation company owning the generation facilities. The COC is valid
for a period of five (5) years, unless sooner revoked by the ERC after due notice and hearing and
stipulates the obligations of the generation company consistent with the standards and operating
guidelines that may be established by the ERC. A generation company intending to continue operating
beyond the term of the issued COC must apply with the ERC for its renewal at least six (6) months prior
to its expiration. The COC may be revoked, after due notice and hearing, by the ERC for non -
compliance with the conditions of the certificate or the guidelines imposed by the ERC.

Consumer Act

Republic Act No. 7394 (R.A. No. 7394), as amended, otherwise known as the Consumer Act of the
Philippines, establishes quality and safety standards with respect to the composition, contents,
packaging, and advertisement of goods, services, and credits, debts or obligations which are primarily
for personal, family, household, or agricultural purposes. This Act recognizes the policy of the state to
protect consumers against hazards to health and safety, promote the exercise of consumer rights, and
provide adequate means of redress and prohibits the manufacture, importation, exportation, sale,
offering for sale, distribution, and transfer of any consumer product which is not in conformity with an
applicable consumer product quality or safety standard. It is primarily enforced by the Department of
Health, the Department of Agriculture, and the Department of Trade and Industry.

80
ENVIRONMENTAL LAWS

Philippine Environmental Impact Statement System

It has been declared as the policy of the State to attain and maintain a rational and orderly balanc e
between socio-economic growth and environmental protection. Hence, the Philippine Environment al
Impact Statement System (P.D. 1586) was established. Development projects that are classified by
law as environmentally critical or projects within statutorily defined environmentally cri tical areas are
required to obtain an Environmental Compliance Certificate (ECC) prior to commencement. Through
its regional offices or through the Environmental Management Bureau (EMB), the DENR determines
whether a project is environmentally critical or located in an environmentally critical area. As a
prerequisite for the issuance of an ECC, an environmentally critical project is required to submit an
Environmental Impact Statement (EIS) to the EMB while a project in an environmentally critical are a
is generally required to submit an Initial Environmental Examination (IEE) to the proper DENR regional
office, without prejudice to the power of the DENR to require a more detailed EIS. The EIS refers to
both the document and the environmental impact assessment of a project, including a discussion of
direct and indirect consequences to human welfare and ecology as well as environmental integrity. The
IEE refers to the document and the study describing the environmental impact, including mitigation and
enhancement measures, for projects in environmentally critical areas.

While the terms and conditions of an EIS or an IEE may vary from project to project, at a minimum, they
contain all relevant information regarding the environmental effects of a project. The entire process of
organization, administration and assessment of the effects of any project on the quality of the physical,
biological and socio-economic environment as well as the design of appropriate preventive, mitigating
and enhancement measures is known as the EIS system. The EIS system successfully culminates in
the issuance of an ECC. The ECC is a government certification that (i) the proposed project or
undertaking will not cause a significant negative environmental impact; (ii) that the proponent has
complied with all the requirements of the EIS system and; (iii) that the proponent is committed to
implement its approved environmental management plan in the EIS or, if an IEE was required, that it
will comply with the mitigation measures suggested therein. The ECC contains specific measures and
conditions that the project proponent must undertake before and during the operation of a project, and
in some cases, during the abandonment phase of the project to mitigate identified environmental impact.

Project proponents that prepare an EIS are required to establish an Environmental Guarantee Fund
(EGF) when the ECC is issued to projects determined by the DENR to pose significant public risks to
life, health, property and the environment. The EGF is intended to answer for damages caused by such
projects as well as any rehabilitation and restoration measures. Project proponents that prepare an EIS
are mandated to include a commitment to establish an Environmental Monitoring Fund (EMF) when
an ECC is eventually issued. The EMF shall be used to support activities of a multi -partite monitoring
team that will be organized to monitor compliance with the ECC and applicable laws, rules and
regulations.

Pursuant to Section 9 of P.D. 1586, non-securing of ECC when required or the non-compliance with
any of the provisions of the ECC shall be sufficient cause for its cancellati on or suspension and/or
imposition of a fine in an amount not to exceed 50,000.00 for every violation thereof, as may be
applicable.

In certain instances, the EMB may determine and issue a certification that a certain project is not
covered by the EIS System and an ECC is not required. Consequently, a Certificate of Non-Cove ra ge
(CNC) may be issued in lieu of an ECC.

Toxic Substances, Hazardous and Nuclear Wastes Control Act

The Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990 (R.A. No. 6969)
mandates control and management of the import, manufacture, process, distribution, use, transport,
treatment and disposal of toxic substances and hazardous and nuclear wastes. It seeks to protect public
health and the environment from unreasonable risks posed by these substances. A waste generator or
a person who generates or produces hazardous wastes through any institutional, commercial, industrial
81
or trade activities must register online and pay the registration fee to the EMB Regional Office having
jurisdiction over the location of the waste generator. Upon registration, the EMB shall issue a DENR
identification number, which is generally a one-time permit unless there is a change in the hazardous
wastes produced.

Under DENR Administrative Order No. 2013-22, a duly registered waste generator must, among others:
(i) designate a full-time Pollution Control Officer; (ii) disclose to the DENR the type and quantity of waste
generated; (iii) implement proper waste management from the time the wastes are generated until they
are rendered non-hazardous; (iv) continue to own and be responsible for the wastes generated in the
premises until the wastes have been certified by an accredited waste treater as adequately treated,
recycled, reprocessed, or disposed of; (v) adhere to the hazardous waste transport manifest system
when transporting hazardous wastes for offsite treatment, storage, and/or disposal; (vi) prepare and
submit to the DENR comprehensive emergency preparedness and response program to mitigate spills
and accidents involving chemicals and hazardous wastes; (vii) communicate to its employees the
hazards posed by the improper handling, storage, transport, use and disposal of hazardous wastes and
their containers; and (viii) develop capability to implement the emergency preparedness and respons e
programs and continually train core personnel on the effective implementation of such programs.

Failure to comply with DENR Administrative Order No. 2013-22 shall make the violator liable for a fine
of 50,000.00. In addition to such penalty, a violation of any of its Governing Rules or rules covering
the Contingency Program shall result in the immediate suspension of the permit.

Philippine Clean Air Act

The Philippine Clean Air Act of 1999 (R.A. No. 8749) focuses primarily on pollution prevention and
provides for a comprehensive management program for air pollution. Consistent with the policies of the
Clean Air Act, DENR Administrative Order No. 2000-81, as amended by DENR Administrative Order
No. 2004-26, requires a Permit to Operate for each source emitting regulated air pollutants, which shall
be issued by the EMB. The permittee shall display the permit upon the installation itself in such manner
as to be clearly visible and accessible at all times. In the event that the permit cannot be so placed, it
shall be mounted in an accessible and visible place near the installation covered by the permit.

The Permit to Operate is valid for five (5) years from the date of issuance, unless sooner suspended or
revoked. It may be renewed by filing an application for renewal at least 30 days before its expiration
date and upon payment of the required fees and compliance with requirements.

Moreover, under DENR Administrative Order No. 2014-02, the managing heads of establishments
required to have pollution control officers must apply for accreditation of their appointed/designat ed
Pollution Control Officer at the concerned EMB Regional Office within 15 days from the date of
appointment/designation.

Philippine Clean Water Act

The Philippine Clean Water Act of 2004 (R.A. No. 9275) focuses primarily on water quality
management in all water bodies and the abatement and control of pollution from land-based sources.
It prohibits the discharge of material of any kind into water bodies, which shall cause pollution or impede
natural flow of water, discharge of substance into soil or sub-soil which would pollute groundwat er,
operating facilities that discharge regulated water pollutants without valid permits, and other related
acts. The Clean Water Act also regulates the discharge of effluents on land. All owners or operators of
facilities that discharge regulated effluents pursuant to this Act are required to secure a permit to
discharge. The discharge permit shall be the legal authorization granted by the DENR to discharge
wastewater. This permit is valid for five (5) years and renewable for five-year periods.

HEALTH AND SAFETY

The Occupational Health and Safety Standards promulgated by the Department of Labor and
Employment provides for the standards applicable to all places of employment to protect employees
against the dangers of injury, sickness or death through safe and healthful working conditions. Thes e
standards provide for the training of personnel and employees in occupational health and safety,
82
establishment of a health and safety committee, requirement of notification and record-keeping of
accidents and/or occupational illnesses, required health and safety standards in the premises of the
establishment, occupational health and environmental control, requirement of personal protective
equipment and devices, rules for handling hazardous materials, gas and electric welding and cutting
operations, hazardous work processes, explosives and general handling of materials and storage,
electricity safety, construction safety, fire protection and control and occupational health services.

TAXATION LAWS

Pursuant Republic Act No. 8424, or the Tax Reform Act of 1997, as amended (the Tax Code), an
entity doing business in the Philippines must register with the appropriate revenue district office of the
Bureau of Internal Revenue (BIR) having jurisdiction over the principal place of business of the Philippine
entity on or before the commencement of business. A person maintaining a head office, branch or facility
shall register with the revenue district office having jurisdiction over the head office, branch or facility. The
registration should contain the name or style of the corporation, place of business and such other
information as may be required in the form prescribed by the BIR.

An entity registered with the BIR is required to pay an annual registration fee in the amount of 500.00
for every separate or distinct establishment or place of business upon registration and every year
thereafter on or before the last day of January.

In addition, every person or entity required to register with the BIR shall register each type of internal
revenue tax applicable to it and for which it shall be obligated to file a return and pay the taxes, as
appropriate. The entity doing business in the Philippines is required to report, file appropriate tax returns
and pay the proper amount of tax (in accordance with the Tax Code and its implementing rules,
regulations and circulars) for all of its taxable transactions in the course of its operations in the
Philippines.

LABOR RELATED LAWS

The Philippine Labor Code and other statutory enactments provide the minimum benefits that
employers must grant to their employees, which include certain social security benefits, such as benefit s
mandated by the Social Security Act of 1997 (R.A. No. 8282), the National Health Insurance Act of
1995 (R.A. No. 7875), as amended, and the Home Development Fund Law of 2009 (R.A. No. 9679).

Social Security Act

Under the Social Security Act of 1997, social security coverage is compulsory for all employees under
60 years of age. An employer has the duty to report to the Social Security System (SSS) the names,
ages, civil status, occupations, salaries and dependents of its employees who are subject to compulsory
coverage, and to pay and remit their monthly contributions. This enables the employees or their
dependents to claim their pension, death benefits, permanent disabilit y benefits, funeral benefits,
sickness benefits and maternity-leave benefits. The failure of the employer to comply with any of its
obligations may lead to sanctions, including the impositions of a fine of not less than 5,000.00 nor
more than 20,000.00, or imprisonment for not less than six (6) years and one (1) day nor more than
12 years, or both, at the discretion of the court. The erring employer will also be liable to the SSS for
damages equivalent to the benefits to which the employee would have been entitled had his name been
reported on time to the SSS and for the corresponding contributions and penalties thereon.

The National Health Insurance Act

The National Health Insurance Act, created the National Health Insurance Program (NHIP ) to provide
health insurance coverage and ensure affordable and accessible health care services to all Filipino
citizens. Under the law, all members of the SSS are automatically members of the NHIP. An employer
is required to deduct and withhold the contributions from the salary, wage or earnings of the employee,
make a counterpart contribution for the employee, and remit both amounts to the Philippine Health
Insurance Corporation (PhilHealth), the agency which administers the NHIP. The NHIP will then
subsidize personal health services required by the employee subject to certain terms and conditions
under the law. An employer who fails or refuses to register its employees, regardless of their
83
employment status, or to deduct contributions from its compens ation of the employees or remit the
same to the Corporation shall be punished with a fine of not less than 5,000.00 multiplied by the total
number of employees of the firm.

Home Development Fund Law

The Home Development Fund Law (R.A. No. 9679) or the Pag-IBIG Fund Law, created the Home
Development Mutual Fund (HDMF), a national savings program as well as a fund to provide for
affordable shelter financing to Filipino workers. Coverage under the HDMF is compulsory for all SSS
members and their employers. Under the law, an employer must deduct and withhold 2% of the monthly
compensation of the employee, up to a maximum of 5,000.00, and likewise make a counterpart
contribution of two percent (2%) of the monthly compensation of the employee, and remit the
contributions to the HDMF. Refusal of an employer to comply, without any lawful cause or with
fraudulent intent, particularly with respect to registration of employees as well as collection and
remittance of contributions, is punishable by a fine of not less, but not more than twice, the amount
involved, or imprisonment of not more than six (6) years, or both such fine and imprisonment. When the
offender is a corporation, the penalty will be imposed upon the members of the governing board and
the President or General Manager, without prejudice to the prosecution of related offenses under the
Revised Penal Code and other laws, revocation and denial of operating rights and privileges in the
Philippines and deportation when the offender is a foreigner.

The Labor Code

The Philippine Labor Code provides that, in the absence of a retirement plan provided by their
employers, private-sector employees who have reached 60 years of age or more, but not beyond 65
years of age, the compulsory retirement age for private-sector employees without a retirement plan,
and who have rendered at least five (5) years of service in an establishment, may retire and receive a
minimum retirement pay equivalent to one-half months salary for every year of service, with a fraction
of at least six (6) months being considered as one (1) whole year. For the purpose of computing the
retirement pay, "one-half month's salary" shall include all of the following: fifteen days salary based on
the latest salary rate; in addition, one-twelfth of the thirteenth month pay and the cash equivalent of five
(5) days of service incentive leave pay. Other benefits may be included in the computation of the
retirement pay upon agreement of the employer and the employee or if provided in a collective
bargaining agreement.

LOCAL LAWS

A Mayors Permit (local business permit) from the local government unit having jurisdiction over the
area where an entity is operating is required to be secured before doing business in the respective city
or municipality. A Mayors Permit is issued only after compliance with certain local government
requirements, including, but not limited to, obtaining the Sanitary Permit, Certificate of Electrical
Inspection, Fire Safety Inspection, Locational Clearance, Barangay Business Clearance and payment
of the required fees. These ancillary permits are valid for one year and must be renewed before the
Mayors Permit is issued. Failure to obtain a mayors permit may expose an entity to fines and penalties,
and even suspension or closure of its business.

For as long as a business enterprise is operating within a particular area, it must maintain a business
permit and, in this regard, will be required to pay an annual business tax and other fees to the local
government unit having jurisdiction over the corporation. These local taxes and fees are paid in the course
of applying for or the renewal of a business permit.

84
Board of Directors and Officers
Board of Directors

The Board of Eagle Cement is entrusted with the responsibility for the overall management and
direction of the Company. The Board meets on a quarterly basis at least, or more frequently as
required, to review and monitor the financial position and operations of the Company. The articles of
incorporation provide that the Board of the Company will consist of 11 directors. 17 Copies of the articles
of incorporation, by-laws, minute books and other corporate books and records of the Company will
be available for inspection by its shareholders at the registered office of the Company at No. 153
EDSA, Barangay Wack-Wack, Mandaluyong City, Metro Manila, Philippines, or upon request.

Term of Office

The directors of the Company are elected during each regular meeting of its shareholders and hold
office for one (1) year and until their successors are elected and qualified. The regular meetings of
shareholders are held on the first Monday of June of every year.

The following table sets forth information regarding the directors of the Company as of the date of this
Preliminary Prospectus:

Name Age Citizenship Position Date Elected

Ramon S. Ang 63 Filipino Chairman 10/5/2007

John Paul L. Ang 37 Filipino Member 11/30/2010

Manny C. Teng 46 Filipino Member 6/21/1995

Monica L. Ang 28 Filipino Member 6/3/2013

Mario K. Surio 70 Filipino Member 1/14/2011

Luis A. Vera Cruz, Jr. 66 Filipino Member 2/23/2017

Melinda Gonzales-Manto 64 Filipino Independent 12/22/2016

Manuel P. Daway* 69 Filipino Member 2/13/2017

Ricardo C. Marquez* 56 Filipino Independent 2/13/2017

Martin S. Villarama, Jr.* 70 Filipino Independent 2/13/2017

Jose P. Perez* 70 Filipino Independent 2/13/2017

* Note: These directors were elected on Feb ruary 13, 2017 sub ject to the approval of the Securities and Exchange
Commission of the Corporations application to amend its Articles of Incorporation which includes increasing the
numb er of directors from seven (7) to eleven (11).

Directors

Ramon S. Ang, 63, is the Chairman of the Board of Directors of the Company since October 2007. He
has been a director of the Company since 2007 and has served as its Chairman from October 2007.
He holds, among others, the following positions in other publicly listed companies: President and Chief
Operating Officer of San Miguel Corporation; President and Chief Executive Officer of Top Frontier

17The application for the amendment of the Articles of Incorporati on and By-laws of the Company has been
submitted to the SEC on 23 February 2017.

85
Investment Holdings Inc. and Petron Corporation; Chairman of the Board of San Miguel Brewery Inc.
and San Miguel Brewery Hong Kong Limited (listed in the Hong Kong Stock Exchange); Vice Chairman
of the Board of Ginebra San Miguel, Inc., and San Miguel Pure Foods Company, Inc. He is also the
Chairman of the Board and CEO of SMC Global Power Holdings Corp., Chairman and President of San
Miguel Holdings Corp. and San Miguel Equity Investments Inc.; Chairman of the Board of Sea Refinery
Corporation, San Miguel Foods, Inc., San Miguel Yamamura Packaging Corporation, San Miguel
Properties, Inc., Clariden Holdings, Inc., Anchor Insurance Brokerage Corporation, Philippine Diamond
Hotel & Resort, Inc., Philippine Oriental Realty Development, Inc., and Atea Tierra Corporation. He is
also the sole director and shareholder of Master Year Limited and the Chairman of Privado Holdings ,
Corp. He formerly held the following positions: President and Chief Operating Officer of PAL Holdings ,
Inc., Philippine Airlines, Inc.; Director of Air Philippines Corporation; Chairman of the Board of Cyber
Bay Corporation; and Vice Chairman of the Board and Director of Manila Electric Company. RSA has
held directorships in various domestic and international subsidiaries of SMC in the last five years. He
has a Bachelor of Science degree in Mechanical Engineering from Far Eastern University.

John Paul L. Ang, 37, is the President and Chief Executive Officer of the Company. He was elected as
director of the Company in November 2010. He is also currently a member of the Nomination and
Remuneration Committee of the Company. He previously served as the Chief Operating Officer and
General Manager of the Company from 2011 to 2016. JPA served as the Chief Operating Officer and
General Manager from 2008 to 2016 and Managing Director from 2003 to 2007 of Sarawak Clinker.
He also served as the Purchasing Officer of Basic Cement from 2002 to 2003. He has a Bachelor of
Arts Degree in Interdisciplinary Studies, Minor in Economics and Finance from Ateneo De Manila
University.

Manny C. Teng, 46, is the General Manager and the Chief Operating Officer of the Company. He was
elected as director of the Company since incorporation in June 1995. Mr. Teng has served as President
of the Company for seven (7) years from 2009 to 2016. For the past ten (10) years, Mr. Teng held
various positions in the following companies: Technical Services Manager, Beverage Group of Ginebra
San Miguel, Inc.; Technical Services Manager, Beverage Group of San Miguel Beverages; Product
Development Manager, Non-Alcoholic Beverages International of San Miguel Beverages; Project
Group of Centech Consultancy; Purchasing Head of Cement Management Corporation; and
Purchasing Officer of Standard Construction and Rebuilding Corporation. He has a Bachelor of Science
degree in Chemical Engineering from University of Santo Tomas.

Monica L. Ang, 28, is the Chief Finance Officer and Treasurer of the Company. She is concurrently the
Vice-President for Business Support Group of the Company since 2011. She was elected as director
of the Company in June 2013. MLA is currently a member of the Nomination and Remunerat ion
Committee of the Company. She is also a director of []. She has a Bachelor of Science degree in
Management, Minor in Enterprise Development from Ateneo de Manila University.

Mario K. Surio, 70, has been a director of the Company since January 2011. He is a member of the
Audit Committee of the Company. He currently holds, among others, the following positions in other
companies: Technical Consultant for the Office of the President and Chief Operating Officer of San
Miguel Corporation; Vice-Chairman and Director for Private Infrastructure Development Corporation
Tarlac-Pangasinan-La Union Expressway (PDIC/TPLEX); Director of South Luzon Tollway Corporat ion
South Luzon Expressway (SLTC/SLEX), Ginebra San Miguel, Inc.; and San Miguel Yamamura
Packaging Corp. In the past ten (10) years, Mr. Surio served as the President of Philippine
Technologies, Inc., Centech International, Inc., Cement Management Corporation and Cema
Consultancy Services, Inc. He also became the Assistant Quality Control Head, Quality Control Head,
Production Manager and Plant Manager of Northern Cement Corporation and a Laboratory Technician
and Physical Tester for Republic Cement Corporation. Mr. Surio is a licensed Chemical Engineer with
a Bachelor of Science degree in Chemical Engineering from University of Santo Tomas College of
Engineering.

Luis A. Vera Cruz, 66, was elected as director of the Company in February 2017. He is currently Of
Counsel at Angara Abello Concepcion Regala & Cruz, a Legal Consultant of San Miguel Corporation,
Corporate Secretary of Chemical Industries of the Philippines, Inc., and a Director of Philippine
Resources Savings Banking Corporation and Cyber Bay Corporation. He previously served as Co-
Managing Partner at Angara Abello Concepcion Regala & Cruz and Director of ACCRA Holdings, Inc.
86
Mr. Vera Cruz holds a Master of Laws from Cornell University, a Bachelor of Laws Degree from the
University of the Philippines College of Law, and a BS Business Administration Degree from the
University of the Philippines College of Business Administration.

Melinda Gonzales-Manto, 64, was elected as an independent director of the Company in December
2016. She is also the chairperson of the Audit Committee and a member of the Corporate Governanc e
Committee of the Company. She currently holds the following positions in other companies: Director
and Vice-President of Linferd & Company, Inc. (a Global Accounting Solutions Company), Director and
Vice President of ACB Corabern Holdings Corporation, and Independent Director of Bank of
Commerce. She was a Partner at SGV & Co., Assurance and Advisory Business Services Division, and
previously served as Board Member of The Philippine Retailers Association and as an Independent
Member of the Board of Directors of the GSIS Family Bank. She is a Certified Public Accountant and
holds a Bachelor of Science degree in Business Administration, Major in Accounting from the Philippine
School of Business Administration.

Manuel P. Daway, 69, is the Vice-President for Operations of the Company since January 2010. He
was elected as a director of the Company in February 2017, subject to SEC approval of the amended
Articles of Incorporation of the Company which included increasing the number of directors to 11. In
the past ten (10) years, Mr. Daway held the following positions in various corporations, namely: Project
Director of CEMA Consultancy, an engineering and construction corporation; Vice-President for
External Relations of Lafarge Cement Services Philippines Inc.; and Vice President for Operations of
Lafarge/Republic Cement Corporation. Mr. Daway is a licensed Electrical Engineer and holds a
Bachelor of Science degree in Electrical Engineering from Mapua Institute of Technology.

Ricardo C. Marquez, 56, was elected as an independent director of the Company in February 2017,
subject to SEC approval of the amended Articles of Incorporation of the Company which included
increasing the number of directors to 11. He is currently a director of the Public Safety Mutual Benefit
Fund, Inc. He previously held various positions in the Philippine National Police, eventually being
promoted to Chief of the Philippine National Police. He also served as the Chairman of Public Safety
Mutual Benefit Fund Inc. from July 2015 until June 2016. He has undergone various trainings and
programs from the Institute of Corporate Directors, Harvard Kennedy School, and the Federal Bureau
of Investigation National Academy, among others. He holds a Masters Degree in Management from
the Philippine Christian University and a Bachelor of Science Degree from the Philippine Military
Academy.

Martin S. Villarama, Jr., 70, was elected as an independent director of the Company in February 2017,
subject to SEC approval of the amended Articles of Incorporation of the Company which i ncluded
increasing the number of directors to 11. He was the 166 th member of the Supreme Court and served
as a Supreme Court Justice from 2009 to 2016. He started his career in the judiciary in 1986, when he
was appointed as Regional Trial Court Judge of Pasig City. He obtained his Bachelor of Laws degree
from the Manuel L. Quezon University (MLQU) after completing BS in Business Administration from De
La Salle University.

Jose P. Perez, 70, was elected as an independent director of the Company in February 2017, subject
to SEC approval of the amended Articles of Incorporation of the Company which included increasing
the number of directors to 11. He served as a Justice of the Supreme Court from 2009 to 2016. He
started his career in the Supreme Court in 1971 as a legal assistant. He rose from the ranks and became
Assistant Court Administrator, Deputy Court Administrator, and Court Administrator. He holds a
Bachelor of Laws Degree and Political Science Degree both from the University of the Philippines.

Executive Officers

The executive officers and management team cooperate with the Board of the Company by preparing
appropriate information and documents concerning the business operations, financial condition and
results of operations of the Company for its review. The following table presents information
concerning executive officers and their respective positions as of the date of this Preliminary
Prospectus:
87
 Name Age Citizenship Position Date
Elected/
Appointed
John Paul L. Ang 37 Filipino President and Chief 9/8/2016
Executive Officer

Manny C. Teng 46 Filipino General Manager and 12/8/2009

Chief Operating
Officer

Monica L. Ang 28 Filipino Chief Finance Officer 6/3/2013

and Treasurer

Vice-President for 1/2/2012

Business Support
Group

Manuel P. Daway 69 Filipino Vice-President for 1/3/2011

Operations

Eduardo S. Uy 54 Filipino Vice-President for 8/17/2009

Sales and Marketing

Arlene M. Wilkerson 46 Filipino Vice-President for 9/21/2016

Legal and Compliance

Compliance Officer
2/13/2017

Paul Eugene G. Serrano 56 Filipino Assistant Vice- 10/6/2015

President for
Operations

Maria Farah Z. G. Nicolas- 48 Filipino Corporate Secretary 10/22/2010

Suchianco

Marlon P. Javarro 39 Filipino Assistant Corporate 2/13/2017

Secretary

Eduardo S. Uy, 54, has been the Vice-President for Sales and Marketing of the Company since 2009
up to the present. He was previously a Regional Sales Manager of Lafarge Cement Services Phils. from
2000 to 2008 and a Commercial Sales Manager (OIC) of Cemex Philippines from 1999 to 2000. He
holds a Bachelor of Science Degree in Mechanical Engineering from the University of San Jose
Recoletos and a Masters Degree in Business Administration from the Ateneo Graduate School of
Business.

Maria Farah Z. G. Nicolas-Suchianco, 48, has been the Corporate Secretary of the Company since
2010 up to the present. She is a Founding Partner of Gerodias Suchianco Estrella Law Firm and its
current Managing Partner. She is also a Director and Treasurer of GSE Management Services, Inc.
Atty. Suchianco is presently an independent director of the Capital Markets Integrity Corporation, the
Chairman of its Compensation Committee and a member of its Audit Committee. She is the Chairman
and President of Assetvalues Holding Company, Inc., Evander Holdings Corporation, Global Titan
Leisure Holdings Corp., and Sunspear Holdings, Inc. She is the Treasurer of Alpha Point Property
Holdings, Inc., Countrybreeze Corporation, Escaler Realty Corporation, Pedalmax Holdings, Inc., and
Terramino Holdings, Inc. She currently serves as a Director and Corporate Secretary of Eastbay
Resorts, Inc., Radio Philippines Network, Inc., and Thunderbird Pilipinas Hotels and Resorts, Inc.,
among others. She is the Corporate Secretary of numerous corporations, including Rags2riches, Inc.,
88
and Wynsum Realty & Development, Inc. She was previously a director of Bank of Commerce, Citra
Metro Manila Tollways Corporation, and Philippine Ink Corporation. She was a Senior Partner at De
Borja Medialdea Bello Guevarra & Gerodias Law Firm. She holds a Juris Doctor Degree from the Ateneo
de Manila University and a Bachelor of Science Degree in Management, Major in Legal Management ,
from the same university.

Arlene M. Wilk erson, 46, is the Vice President for Legal and Compliance of the Company since
September 2016. She has also been appointed as the Compliance Officer of the Company in February
2017. In the past ten years, Atty. Wilkerson served as: Legal Counsel for Hyder Consulting Middle East
Ltd., (ARCADIS); Legal Consultant of the Office of the Director of Legal Services, Department of
Agrarian Reform; Legal Consultant and Director of Geograce Resources Philippines, Angping &
Associates Securites, Inc., Nihao Mineral Resources, International, Inc.; Non-Executive Director of
Klondyke Gold Pty Ltd and Dourado Resources Pty Ltd in Perth, Australia; Director and Legal Counsel
of Geomin Resources Asia, Inc.; Director and Legal Counsel of Camarines Norte Mining & Exploration,
Inc.; Legal Consultant of Mineral Agencies Australia as trustee for All Minerals Trust; and Vic e President
for Legal of Geograce Resources Phils., Inc. She was a Partner at Mendoza Mendoza &
Associates/Fortun Almodiel & Mendoza from 1997 until 2009. She also served as an Attorney III of the
Department of Environmental and Natural Resources from 1997 to 1998. Atty. Wilkerson holds a
Bachelor of Laws degree from the University of the Philippines -College of Law and a Bachelor of Arts
degree Major in Political Science from the same university.

Paul Eugene G. Serrano, 56. is the Assistant Vice President for Operations of the Company since
[October 2015]. He previously worked with Holcim Philippines, Inc. where he held the following
positions: Regional Category Manager from September 2014 to June 30, 2015, Vice-President for
Procurement from January 2009 to August 2014, and Vice-President for Technology and Engineering
from February 2008 to January 2009. Mr. Serrano also served as Plant Director of the APO Cement
Corporation from December 2006 to December 2007; Production Director of P.T. Semen Gresik from
July 2005 to November 2006; Vice President for Operations of CEMEX Indonesia from July 2005 to
November 2006; Regional Operations Director from May 2004 to June 2005 and Technical Support
Director from September 2002 to April 2004 of CEMEX Mexico; Technical Director from November
1999 to August 2002 from CEMEX Philippines; and Assistant Plant Manager from January 1999 to
October 1999 of APO Cement Corporation. He also held various positions from 1985 to 1998 in Hi
Cement Corporation including Planning and Development Engineer, Mechanical Maintenanc e
Manager, Pyro-Processing Manager, Preventive Maintenance Engineer, Process Superintendent and
Expansion Project Coordinator, Maintenance Planning Engineer, Raw Mill Foreman, Mechanical
Maintenance Foreman, and Junior Mechanical Engineer. Mr. Serrano is a registered Mechanical
Engineer and holds a Bachelor of Science in Mechanical Engineering from the University of the
Philippines Diliman.

Marlon P. Javarro, 38, has been Assistant Corporate Secretary of the Company since 2017 up to the
present. He is also the Finance Manager of the Company since 2008. Prior to joining Eagle Cement,
he was a Finance Manager at Sarawak Clinker Sdn Berhad in Malaysia from 2005 to 2007. He is a
Certified Public Accountant and holds a Bachelor of Science Degree in Accountancy from Colegio de
San Agustin.

Corporate Governance

The Company adopted the Manual to ensure its compliance with the leading practices on good
corporate governance and related Philippine SEC rules and regulations. The Manual was approved
and adopted by the Board on February 13, 2017 and made effective from February 23, 2017.

The Manual features the following provisions:

Protection of investors. The Manual provides for the rights and protection of the shareholders ,
investor relations, dividend policy and a disclosure system to ensure transparency and
accountability.

Board of directors and management. The detailed qualifications and disqualifications, duties,

89
 functions and responsibilities of the Board and executive officers are also enumerated in the
Manual.

Check s and balances. The Manual contains the vision, strategic objectives, key policies,
procedures for the management of the Company, and mechanisms for monitoring and
evaluating the performance of the management.

Compliance with the Manual. The appointment of a Compliance Officer to monitor compliance
with and violations of the Manual is also provided.

Creation of committees. The Manual mandates the creation of the Audit Committee, the
Corporate Governance Committee, and the Nomination and Remuneration Committee to
ensure the performance of certain important functions of the Board and management.

A copy of the Manual containing the foregoing provisions was submitted to the Philippine SEC together
with the registration statement filed with respect to the Offer Shares.

Committees of the Board

The Board created and appointed directors to the three (3) board committees set forth below. Each
member of the respective committees named below holds office as of February 13, 2017 and will serve
until his successor is elected and qualified. The three (3) committees are: (i) the Audit Committee; (ii)
the Corporate Governance Committee; and (iii) the Nomination and Remuneration Committee.

Audit Committee

The Audit Committee provides enhanced oversight capability over the financial reporting, internal
control system, internal and external audit processes, and compliance with applicable laws and
regulations of the Company.

The Audit Committee shall have the following duties and responsibilities, among others:

(i) Recommend the approval the Internal Audit Charter (IA Charter), which formally defines
the role of Internal Audit and the audit plan as well as oversees the implementation of the
IA Charter;

(ii) Through the Internal Audit (IA) Department, monitor and evaluate the adequacy and
effectiveness of the internal control system, integrity of financial reporting, and security
of physical and information assets of the Company. Well-designed internal control
procedures and processes that will provide a system of checks and balances shall be in
place in order to (a) safeguard the resources of the Company and ensure their effect ive
utilization, (b) prevent occurrence of fraud and other irregularities, (c) protect the
accuracy and reliability of the financial data of the Company, and (d) ensure compliance
with applicable laws and regulations;

(iii) Oversee the Internal Audit Department, and recommends the appointment and/or
grounds for approval of an internal audit head or Chief Audit Executive. The Audit
Committee shall also approve the terms and conditions for outsourcing internal audit
services;

(iv) Establish and identify the reporting line of the Internal Auditor to enable him to properly
fulfill his duties and responsibilities. For this purpose, he shall directly report to the Audit
Committee;

(v) Review and monitor the responsiveness of Management to the Internal Auditors findings
and recommendations;

(vi) Prior to the commencement of the audit, discuss with the External Auditor the nature,
scope and expenses of the audit, and ensure the proper coordination if more than one
90
 audit firm is involved in the activity to secure proper coverage and minimize duplication
of efforts;

(vii) Evaluate and determine the non-audit work, if any, of the External Auditor, and
periodically review the non-audit fees paid to the External Auditor in relation to the total
fees paid to him and to the overall consultancy expenses of the Company. The committee
shall disallow any non-audit work that will conflict with his duties as an External Auditor
or may pose a threat to his independence. The non-audit work, if allowed, shall be
disclosed in the Annual Report and Annual Corporate Governance Report of the
Company;

(viii) Review and approve the Interim and Annual Financial Statements before their
submission to the Board, with particular focus on the following matters:

Any change/s in accounting policies and practices

Areas where a significant amount of judgment has been exercised
Significant adjustments resulting from the audit
Going concern assumptions
Compliance with accounting standards
Compliance with tax, legal and regulatory requirements ;

(ix) Review the disposition of the recommendations in the External Auditors management
letter;

(x) Perform oversight functions over the Internal and External Auditors of the Company. It
shall ensure the independence of Internal and External Auditors, and that both auditors
are given unrestricted access to all records, properties and personnel to enable them to
perform their respective audit functions;

(xi) Coordinate, monitor and facilitate compliance with laws, rules and regulations;

(xii) Recommend to the Board the appointment, reappointment, removal and fees of the
External Auditor, duly accredited by the Commission, who undertakes an independent
audit of the Company, and provides an objective assurance on the manner by which the
financial statements shall be prepared and presented to the stockholders.

If the Board decides that it is not necessary to have a separate Board Risk Oversight Committee and/or
Related Party Transactions Committee, the Audit Committee shall perform the functions of said
committees as follows:)

a) Risk Management

(i) Develop a formal enterprise risk management plan which contains the following
elements: (a) common language or register of risks, (b) well-defined risk management
goals, objectives and oversight, (c) uniform processes of assessing risks and developing
strategies to manage prioritized risks, (d) designing and implementing risk management
strategies, and (e) continuing assessments to improve risk strategies, processes and
measures;

(ii) Oversee the implementation of the enterprise risk management plan and conduct regular
discussions on the prioritized and residual risk exposures of the Company based on
regular risk management reports and assesses how the concerned units or offices are
addressing and managing these risks;

(iii) Evaluate the risk management plan to ensure its continued relevanc e,
comprehensiveness and effectiveness. This Committee shall revisit defined risk
management strategies, look for emerging or changing material exposures, and stay
abreast of significant developments that seriously impact the likelihood of harm or loss;

91
 (iv) Advise the Board on its risk appetite levels and risk tolerance limits;

(v) Review at least annually the risk appetite levels and risk tolerance limits of the Company
based on changes and developments in the business, the regulatory framework, the
external economic and business environment, and when major events occur that are
considered to have major impacts on the Company;

(vi) Assess the probability of each identified risk becoming a reality and estimate its possible
significant financial impact and likelihood of occurrence. Priority areas of concern are
those risks that are the most likely to occur and to impact the performance and stability
of the corporation and its stakeholders;

(vii) Provide oversight over Management activities in managing credit, market, liquidity,
operational, legal and other risk exposures of the corporation. This function shall include
regularly receiving information on risk exposures and risk management activities from
Management; and

(viii) Report to the Board on a regular basis, or as deemed necessary, the material risk
exposures of the Company, the actions taken to reduce the risks, and recommends
further action or plans, as necessary.

b) Related Party Transaction

(i) Evaluate on an ongoing basis existing relations between and among businesses and
counterparties to ensure that all related parties are continuously identified, RPTs are
monitored, and subsequent changes in relationships with counterparties (from non -
related to related and vice versa) are captured. Related parties, RPTs and changes in
relationships shall be reflected in the relevant reports to the Board and
regulators/supervisors;

(ii) Evaluate all material RPTs to ensure that these are not undertaken on more favorable
economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral
requirement) to such related parties than similar transactions with non-related parties
under similar circumstances and that no corporate or business resources of the Company
are misappropriated or misapplied, and to determine any potential reputational risk issues
that may arise as a result of or in connection with the transactions. In evaluating RPTs,
the Committee takes into account, among others, the following:

(1) The related partys relationship to the Company and interest in the transaction;
(2) The material facts of the proposed RPT, including the proposed aggregate value of
such transaction;
(3) The benefits to the Company of the proposed RPT;
(4) The availability of other sources of comparable products or services; and
(5) An assessment of whether the proposed RPT is on terms and conditions that are
comparable to the terms generally available to an unrelated party under similar
circumstances. The Company shall have an effective price discovery system in place
and exercise due diligence in determining a fair price for RPTs;

(iii) Ensure that appropriate disclosure is made, and/or information is provided to regulating
and supervising authorities relating to the RPT exposures, and policies on conflicts of
interest or potential conflicts of interest of the Company. The disclosure shall include
information on the approach to managing material conflicts of interest that are
inconsistent with such policies, and conflicts that could arise as a result of the affiliation
or transactions with other related parties of the Company;

(iv) Report to the Board on a regular basis, the status and aggregate exposures to each
related party, as well as the total amount of exposures to all related parties;

92
 (v) Ensure that transactions with related parties, including write-off of exposures are subject
to a periodic independent review or audit process; and

(vi) Oversee the implementation of the system for identifying, monitoring, measuring,
controlling, and reporting RPTs, including a periodic review of RPT policies and
procedures.

Ms. Melinda Gonzales-Manto is the chairperson and Ricardo C. Marquez and Mario K. Surio are
members of the Audit Committee.

Corporate Governance Committee

The Corporate Governance Committee is tasked to assist the Board in the performance of its corporat e
governance responsibilities.

The Corporate Governance Committee assists the Board in ensuring compliance with and proper
observance of corporate governance principles and practices. It has the following duties and functions,
among others:

(i) Oversee the implementation of the corporate governance framework and periodically
reviews the said framework to ensure that it remains appropriate in light of material
changes to the size, complexity and business strategy of the Company, as well as its
business and regulatory environments.

(ii) Oversee the periodic performance evaluation of the Board and its committees as well as
executive management, and conducts an annual self-evaluation of its performance.

(iii) Ensure that the results of the Board evaluation are shared, discussed, and that concrete
action plans are developed and implemented to address the identified areas for
improvement.

(iv) Recommend continuing education/training programs for directors, assignment of

tasks/projects to board committees, succession plan for the board members and senior
officers, and remuneration packages for corporate and individual performance.

(v) Adopt corporate governance policies and ensures that these are reviewed and updated
regularly, and consistently implemented in form and substance.

(vi) Propose and plan relevant trainings for the members of the Board.

Martin S. Villarama, Jr. is the chairperson and Jose P. Perez and Melinda Gonzales-Manto are
members of the Corporate Governance Committee.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee determines the nomination and election process, as
well as the remuneration of directors and officers of the Company.

The Nomination and Remuneration Committee has the following functions:

(i) Determine the nomination and election process for the directors of the Company and has
the special duty of defining the general profile of board members that the Company may
need and ensuring appropriate knowledge, competencies and expertise that complement
the existing skills of the Board;

(ii) Establish a formal and transparent procedure to develop a policy for determining the
renumeration of directors and officers that is consistent with the culture and strategy of
the Company as well as the business environment in which it operates;

93
 (iii) Review and evaluate the qualifications of all persons nominated to the Board, including
whether the nominees: (a) possess the knowledge, skills, experience, and, for non-
executive directors, independence of mind given the responsibilities of the Board in light
of the business and risk profile of the Company; (b) have a record of integrity and good
reputation; (c) have sufficient time to carry out the responsibilities of a director of the
Company; and (d) have the ability to promote a smooth interaction between other
members of the Board; and

(iv) Monitor the qualifications of the Board of Directors.

Jose P. Perez is the chairperson and Ricardo C. Marquez, John Paul L. Ang, and Monica L. Ang are
members of the Nomination and Remuneration Committee. 18

Directors Compensation

Standard Arrangements

The members of the Board of the Company will be compensated according to the provisions of its by-
laws. Under by-laws of the Company, the member of the Board shall be allowed a reasonable per
diem allowance for his attendance at meetings of the Board. As compensation, the Board shall receive
and allocate an amount of not more than ten percent (10%) of the net income before income tax of
the Company during the preceding year. Such compensation shall be determined and apportioned
among directors in such manner as the Board may deem proper, subject to the approval of
stockholders representing at least a majority of the outstanding capital stock at a regular or special
meeting of the stockholders of the Company.

Other Arrangements

Other than reasonable per diem, there are no other arrangements pursuant to which any of the
directors of the Company is compensated, directly or indirectly, for any service provided as director.

Executive Compensation

Summary Compensation Table

The following table sets out the Chief Executive Officer (CEO) of the Company and the four (4) most
highly compensated executive officers, the named executive officers (the NEOs), for the year ending
December 31, 2016:

Name Position
John Paul L. Ang CEO and President
Manny C. Teng COO and General Manager
Manuel P. Daway VP-Operations
Paul Eugene G. Serrano AVP-Operations
Eduardo S. Uy VP Sales & Marketing

The following table identifies and summarizes the aggregate compensation of the CEO of the Company
and the four (4) most highly compensated executive officers, as well as the aggregate compensation
paid to all other officers and Directors as a group, for the years ended December 31, 2015 and 2016
and for the year ending December 31, 2017:

18As per the Manual of Corporate Governance of the Company, the Committee shall be composed of at least three
(3) members, all of whom should be directors, and at least one (1) of whom should be an independent director,
who shall be the Chairman.

94
 Year Total
( Million)
CEO and the four (4) most highly
compensated executive officers named
above
................................................................... 2015 17.3
2016 23.6
2017 (estimated) 26.0

Aggregate compensation paid to all other

officers and Directors as a group unnamed 2015 10.0
2016 13.7
2017 (estimated) 17.5

Employment Contracts Between the Company and NEOs

The Company has no special employment contracts with its NEOs.

Warrants and Options Outstanding

There are no outstanding warrants or options held by the officers and directors.

Significant Employees

The Company considers the collective efforts of its employees as vital to the success of the Company .
The Company does not solely rely on key individuals for the conduct of its business. Therefore, the
resignation or loss of any non-executive employee will not have any significant, adverse effect on the
business of the Company. No special arrangement with non-executive employees to assure their
continued stay with the Company exists, other than standard employment contracts.

Employee Restricted Stock and Other Incentive Plans

There is no existing employee restricted stock and other Incentive plans for employees nor directors
of the Company.

Involvement in Certain Legal Proceedings of Directors and Executive Officers

None of the directors, nominees for election as director, executive officers or control persons of Eagle
Cement have been the subject of any (a) bankruptcy petition, (b) conviction by final judgment in a
criminal proceeding, domestic or foreign, (c) order, judgment or decree of any court of competent
jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or otherwis e
limiting his involvement in any type of business, securities, commodities or banking activities, which is
not subsequently reversed, suspended or vacated, or (d) judgment of violation of a securities or
commodities law or regulation by a domestic or foreign court of competent jurisdiction (in a civil action),
the SEC or comparable foreign body, or a domestic or foreign exchange or other organized trading
market or self-regulatory organization, which has not been reversed, suspended or vacated, for the past
five (5) years up to the latest date that is material to the evaluation of his ability or integrity to hold the
relevant position in the Company.

95
Family Relationships

The Chairman, Mr. Ramon S. Ang, is the parent of siblings John Paul L. Ang, CEO & President, and
Monica L. Ang, CFO and Treasurer, and Vice-President for the Business Support Group.

Further, Far East Cement Corporation is owned by Mr. Ramon S. Ang.

Other than the foregoing, there are no family relationships either by consanguinit y or affinity up to the
fourth civil degree among the Directors, executive officers and shareholders.

Manny C. Teng, COO and General Manager, is the nephew of Ramon S. Ang.

96
Related Party Transactions
The Company has transactions with its related parties in the ordinary course of business. The
outstanding balances and amount of transactions with related parties as at and for the years ended
December 31, 2016 and 2015 are as follows:

2016 2015
Related Party and Nature of Amount of Outstanding Amount of Outstanding
Relationship Nature of Transactions Transactions Balance Transactions Balance

Trade receiv ables -

Entities under common key
management with Eagle Cement
Sale of inventories = 47,576,654
P =
P = 1,222,238
P =
P

Adv ances to related parties:

Subsidiaries of Ultimate Parent Sale of equipment and
Company working capital advances P
= 160,576,967 P
= 163,999,850 = 23,192,435
P = 10,523,405
P
Entity under common key
management with Eagle Cement Working capital advances 625,728 534,400 29,370,000
= 164,534,250
P = 39,893,405
P

Adv ances to suppliers -

Subsidiary of Ultimate Parent Downpayment on purchase
Company of raw materials = 104,000,000
P = 92,857,143
P =
P =
P

Trade payables:
Subsidiaries of Ultimate Parent Hauling, rental and other
Company services P 105,100,352 P
P 359,373,540 =
= = 326,605,501 P= 56,760,458
Entities under common key Purchase of raw materials
management with Eagle Cement and outside services 220,409,450 40,834,053 174,830,054 64,715,692
= 145,934,405
P P 121,476,150
=

Adv ances from related parties:

Ultimate Parent Company Working capital advances = =
P P 144,843,363 P
= 264,897,363 =
P 264,897,363
Other stockholder Working capital advances 241,668 241,668
= 145,085,031
P = 265,139,031
P

Retirement benefit plan Plan contribution = 786,123

P = 22,970,734
P = 22,184,611
P = 22,184,611
P

Entity under common key

management w ith Eagle Cement Acquisition of a subsidiary P
= 450,000,000 =
P =
P =
P

Personnel costs
Salaries and other
Key management personnel employee benefits = 37,300,000
P =
P = 27,300,000
P =
P
Net retirement benefits
liability 2,131,041 13,239,516 1,969,546 11,108,475
= 13,239,516
P = 11,108,475
P

97
Principal and Selling Shareholders
Principal Shareholders

The following table sets forth the shareholders of record as of the date of this Preliminary Prospectus:

Name of Shareholder Number of Shares Held % of Shareholding

Far East Cement Corporation 3,085,714,283 common shares 68.57%
2,057,142,857 preferred shares
Ramon S. Ang 1,317,857,139 common shares 29.29%
878,571,429 preferred shares
John Paul L. Ang 96,428,574 common shares 2.14%
64,285,714 preferred shares
Manny C. Teng 1 common share -nil-
Monica L. Ang 1 common share -nil-
Mario K. Surio 1 common share -nil-
Melinda Gonzales-Manto 1 common share -nil-
Luis A. Vera Cruz, Jr. 1 common share -nil-
Ricardo C. Marquez * 1 common share -nil-
Manuel P. Daway* 1 common share -nil-
Martin S. Villarama, Jr.* 1 common share -nil-
Jose P. Perez* 1 common share -nil-
TOTAL 7,500,000,005 shares 100.00%

* Note: These directors were elected on Feb ruary 13, 2017 sub ject to the approval of the Securities and Exchange
Commission of the Corporations application to amend its Articles of Incorporation which includes increasing the
numb er of directors from seven (7) to eleven (11).

Under the PSE Consolidated Listing and Disclosure Rules, the existing shareholder of the Company
who owns an equivalent of at least ten percent (10%) of its issued and outstanding Shares as of the
Listing Date cannot sell, assign or in any manner dispose of their Shares for a minimum period of 180
days after the listing of the Offer Shares. In addition, all Shares issued or transferred within 180 days
prior to the commencement of the Offer at an issue price less than the price per Offer Share shall be
subject to a lock-up period of at least 365 days from the dale that full payment is made on such Shares.

The common shares of the following shareholders are covered by the 180-day lock-up requirement:

FECC 3,085,714,283 common shares

Ramon S. Ang 1,317,857,139 common shares

The common shares of the following shareholders are covered by the 365-day lock-up requirement:

Luis A. Vera Cruz, Jr 1 common share

Melinda Gonzales-Manto 1 common share
Manuel P. Daway* 1 common share
Ricardo C. Marquez* 1 common share
Martin S. Villarama, Jr.* 1 common share
Jose P. Perez* 1 common share

98
To implement this lock-up requirement, the PSE requires, among others, to lodge the shares with the
PDTC through a participant of the PDTC system for the electronic lock-up of the shares or to enter into
an escrow agreement with the trust department or custodian unit of an independent and reputable
financial institution.

Selling Shareholder

The following table below sets forth, for the Selling Shareholder, the number of Common Shares and
percentage of outstanding shares held before the Offer, the maximum number of Common Shares to
be sold in the Offer and the number of Share and percentage of outstanding Shares owned immediately
after the Offer, assuming the full exercise of the Over-allotment Option.

Selling Shareholder Shares before % of Shares Maximum % of Shares

the Offer Outstanding Number of Outstanding
before the Shares to following
Offer be Sold in the Offer
the
Offer
Far East Cement Corporation 3,085,714,283 68.57% 75,000,000 63.35%
common common
shares shares
2,057,142,857
preferred
shares

Security Ownership of Record and Beneficial Owners

The following table sets forth security ownership of certain record and beneficial owners of more than
five percent (5%) of the voting securities of the Company as of the date of this Preliminary Prospectus:

Nam e of
Beneficial
Ow ner
and
Nam e and Address of Relationship % of Total
Record Ow ner and w ith Record No. of Outstanding
Title of Class Relationship with Issuer Ow ner Citizenship Shares Held Shares
Common Far East Cement Corporation See Note 1 Filipino 3,085,714,283 68.57%
Shares and below common shares
Preferred 2,057,142,857
Shares preferred shares

Common Ramon S. Ang Record ow ner is Filipino 1,317,857,139 29.29%

Shares and also beneficial common shares
Preferred ow ner 878,571,429
Shares preferred shares

Note: (1) Far East Cement Corporation is beneficially owned by shareholder Ramon S. Ang 100%

Voting Trust Holders of Five Percent (5%) or More

There is no voting trust arrangement executed among the holders of five percent (5%) or more of the
issued and outstanding shares of the common stock of the Company.

Changes in Control

The Company is not aware of any arrangement which may result in a change in control of the Company
at this time.

99
Description of Share Capital
The shares of the Company to be offered shall be up to [500,000,000] Firm Shares, consisting of
Common Shares, with a par value of 1.00 per share, to be issued by the Company, and an offer of up
to [75,000,000] Optional Shares, with a par value of 1.00 per share. A total of up to [] shares of the
Company shall be outstanding after the Offer, [assuming the Over-allotment Option is fully exercised].

Share Capital Information

The authorized capital stock of the Company is 8,500,000,000.00 divided into 5,500,000,000 common
shares with a par value of 1.00 and 3,000,000,000 common shares with a par value of 1.00. See
BusinessCorporate Structure. As of the date of this Preliminary Prospectus, the issued and
outstanding share capital of the Company consists of 7,500,000,005 shares consisting of 4,500,000,005
common shares and 3,000,000,000 preferred shares.

Objects and Purposes

Primary Purpose

Under the articles of incorporation of the Company, its primary purpose is to engage in the business of
manufacturing, developing, processing, marketing, sale and distribution of cement, cement products,
gold, silver, copper, lead, zinc and other minerals, and other by -products and, for this purpose, purchas e
and acquire, construct, erect and install machinery, equipment and plant facilities necessary or required
for the manufacture and production of the products of the Company, locate, acquire, operate or
otherwise dispose of mining claims and concessions containing lime, limestone, marble, granite, gold,
silver, copper, lead, zinc and other raw materials and undertake all such work for the development and
exploitation of the said raw materials and, in general, to perform such other acts necessary, appropriat e
or conducive for the pursuit of the primary purpose of the Company.

Secondary Purposes

The Company is also authorized to undertake the following activities as part of its secondary purposes:

to purchase, acquire, own, lease, sell and convey real properties such as lands, buildings,
factories and warehouses and machineries, equipment and other personal properties as may
be necessary or incidental to the conduct of corporate business, and to pay in cash, shares of
its capital stock, debentures and other evidences of indebtedness, or other securities, as may
be deemed expedient, for any business or property acquired by the Company;

to borrow or raise money necessary to meet the financial requirements of its business by the
issuance of bonds, promissory notes and other evidences of indebtedness, and to secure the
repayment thereof by mortgage, pledge, deed of trust or lien upon the properties of the
Company or to issue pursuant to law shares of its capital stock, debentures and other evidenc es
of indebtedness in payment for properties acquired by the Company or for money borrowed in
the prosecution of its lawful business;

to invest and deal with the money and properties of the Company in such manner as may from
time to time be considered wise or expedient for the advancement of its interests and to sell,
dispose of or transfer the business, properties and goodwill of the Company or any part thereof
for such consideration and under such terms as it shall see fit to accept;

to aid in any manner any corporation, association, or trust estate, domestic or foreign, or any
firm or individual, any shares of stock in which or any bonds, debentures, notes, securities,
evidences of indebtedness, contracts, or obligations of which are held by or for the Company ,
directly or indirectly or through other corporations or otherwise;

to enter into any lawful arrangement for sharing profits, union of interest, utilization or farmout
agreement, reciprocal concession, or cooperation, with any corporation, association,

100
 partnership, syndicate, entity person or governmental, municipal or public authority, domestic
or foreign, in the carrying on of any business or transaction deemed necessary, convenient or
incidental to carrying out any of the purposes of the Company;

to acquire or obtain from any government or authority, national, provincial, municipal or

otherwise, any corporation, company or partnership or person, such charter, contracts,
franchise, privileges, exemption, licenses and concessions as may be conducive to any of the
objects of the Company;

to establish and operate one of more branch offices of agencies and to carry on any or all of its
operations and business without any restrictions as to place or amount, including the right to
hold, purchase or otherwise deal in and with real and personal property anywhere within the
Philippines; and

to conduct and transact any and all lawful business, and to do or cause to be done any or more
of the acts and things set forth as its purposes under its articles of incorporation, within or
without the Philippines, and in any and all foreign c ountries, and to do everything necessary,
desirable or incidental to the accomplishment of the purposes or the exercise of any one or
more of the powers herein enumerated, or which shall at any time appear conducive to or
expedient for the protection or benefit of the Company.

Under Philippine law, a corporation may invest its funds in any other corporation or business or for any
purpose other than the primary purpose for which it was organized when approved by a majority of the
board of directors and ratified by the shareholders representing at least two-thirds (2/3) of the
outstanding capital stock, at a meeting of the shareholder duly called for the purpose; provided,
however, that where the investment by the corporation is reasonably necessary to accomplish its
primary purpose, the approval of the shareholders shall not be necessary.

Share Capital

A Philippine corporation may issue common or preferred shares, or such other classes of shares with
such rights, privileges or restrictions as may be provided for in the articles of incorporation and by-laws.
A Philippine corporation may also increase or decrease its authorized capital stock, provided that the
increase or decrease is approved by a majority of the board of directors and by shareholders
representing at least two-thirds of the outstanding capital stock of the corporation voting at a meeting
of the shareholders duly called for the purpose and is duly approved by the SEC.

All of the shares of the Company that are currently issued are either common shares or preferred shares
and have a par value of 1.00 per share. If par value shares are issued at a price above par, whether
for cash or otherwise, the amount by which the subscription price exceeds the par value is credited to
an account designated as paid-in surplus.

A corporation may acquire its own shares for a legitimate corporate purpose as long as it has
unrestricted retained earnings or surplus profits sufficient to pay for the shares to be acquired, such as
in the following instances: (i) elimination of fractional shares arising out of stock dividends, (ii) the
purchase of shares of dissenting shareholders exercising their appraisal right and (iii) the collection or
compromise of an indebtedness arising out of an unpaid subscription in a delinquency sale or to
purchase delinquent shares during such sale. Upon repurchase of its own shares, the shares become
treasury shares, which may be resold at a reasonable price fixed by the board of directors.

The Board is authorized to issue shares from the treasury from time to time.

Foreign Ownership Limits

The 1987 Constitution provides that the exploration, development, and utilization of natural resources
is under the full control and supervision of the State, which may directly undertake such activities, or
enter into co-production, joint venture, or production-sharing agreements with Philippine citizens, or
Philippine corporations at least 60% of whose capital stock is owned by Philippine such citizens.

101
Similarly, the ownership of private lands in the Philippines is reserved for Philippine citizens and
Philippine corporations at least 60% of whose capital stock is owned by Philippine citizens .

Rights Relating to Shares

Voting Rights

The common shares of the Company have full voting rights. Each common share entitles the holder to
one (1) vote. The directors of the Company are elected by the shareholders at the meeting of the annual
shareholders. Cumulative voting is allowed whereby a shareholder may cumulate his vot es by giving
one (1) candidate as many votes as the number of directors to be elected multiplied by the number of
his shares. Under Philippine law, voting rights cannot be exercised with respect to shares declared
delinquent, treasury shares, or if the shareholder has elected to exercise his appraisal rights.

Preferred shares issued by the Company are non-voting. However, under the Corporation Code, non -
voting shares are nevertheless entitle to vote on the following instances: (i) amendment of the articles
of incorporation of the Company, (ii) adoption and amendment of by-laws, (iii) sale, lease, exchange,
mortgage, pledge or other disposition of all or substantially all of the property of the Company, (iv)
incurring, creating or increasing bonded indebtedness, (v) increase or decrease of capital stock, (vi)
merger or consolidation of the Company with another corporation or corporations, (vii) investment of
corporate funds in another corporation or business in accordance with the Corporation Code, and (viii)
dissolution of the Company.

Dividend Rights

The Company has issued preferred shares. The holders of the preferred shares are entitled to receive
cash dividends upon declaration made at the sole option of the Board. The annual dividends shall be
at the rate of six percent (6%) calculated in respect of each share by reference to the issue price thereof.
The dividends of the preferred shares are cumulative. No dividend can be declared and paid on the
common shares unless cash dividends have been declared and paid to all holders of preferred shares.

Dividends are payable to shareholders whose names are recorded in the stock and transfer book as of
the record date fixed by the Board. The PDTC has an established mechanism for distribution of
dividends to beneficial owners of the shares which are traded through the PSE and lodged with the
PDTC as required for scripless trading.

Under Philippine law, a corporation can only declare dividends to the extent that it has unrestricted
retained earnings that represent the undistributed earnings of the corporation which have not been
allocated for any managerial, contractual or legal purposes and which are free for distribution to the
shareholders as dividends. The Company may pay dividends in cash, property or by the i ssuance of
shares. Dividends may be declared by the board of directors except for stock dividends which may only
be declared and paid with the approval of shareholders representing at least two-thirds (2/3) of the
issued and outstanding capital stock of the corporation voting at a meeting of the shareholders duly
called for the purpose.

The Philippine Corporation Code generally requires a Philippine corporation with retained earnings in
excess of 100% of its paid-in capital to declare and distribute as dividends the amount of such surplus.
Notwithstanding this general requirement, a Philippine corporation may retain all or any portion of such
surplus in the following cases: (i) when justified by definite expansion plans approved by the board of
directors of the corporation; (ii) when the required consent of any financing institution or creditor to such
distribution has not been secured; (iii) when retention is necessary under special circumstances, such
as when there is a need for special reserves for probable contingencies; or (iv) when the non-distribution
of dividends is consistent with the policy or requirement of a Government office.

Philippine corporations whose securities are listed on any stock exchange are required to maintain and
distribute an equitable balance of cash and stock dividends, consistent with the needs of shareholders
and the demands for growth or expansion of the business.

See Dividends and Dividend Policy on page 32.

102
Pre-emptive Rights

The Philippine Corporation Code confers pre-emptive rights on shareholders of a Philippine corporation
entitling such shareholders to subscribe for all issues or other dispositions of equity -related securities
by the corporation in proportion to their respective shareholdings, regardless of whet her the equity-
related securities proposed to be issued or otherwise disposed of are identical to the shares held. A
Philippine corporation may, however, provide for the denial of these pre-emptive rights in its articles of
incorporation. Likewise, shareholders who are entitled to such pre-emptive rights may waive the same
through a written instrument to that effect. [The articles of incorporation of the Company deny
shareholders the pre-emptive right to subscribe to all classes of shares that the Company may issue in
the future. 19

Derivative Rights

Philippine law recognizes the right of a shareholder to institute proceedings on behalf of the corporation
in a derivative action in circumstances where the corporation itself is unable or unwilling to institute the
necessary proceedings to redress wrongs committed against the corporation or to vindicate corporat e
rights as, for example, where the directors themselves are the malefactors.

Appraisal Rights

Under the Philippine Corporation Code, a shareholder has the right to dissent and demand payment of
the fair value of his shares in the following instances: (i) an amendment of the articles of incorporation
which has the effect of changing or restricting the rights attached to his shares or of authorizing
preferences in any respect superior to those of outstanding shares of any class or of extending or
shortening the term of corporate existence; (ii) the sale, lease, exchange, transfer, mortgage, pledge or
other disposal of all or substantially all the corporate assets; (iii) in a merger or consolidation; and (iv)
and investment by the corporation of funds in any other corporation or business or for any purpos e
other than the primary purpose for which it was organized.

The payment to the dissenting stockholder of the fair value of his shares will only be available if the
corporation has unrestricted retained earnings to cover such purchase. From the time the shareholder
makes a demand for payment until the corporation purchases such shares, all rights accruing on the
shares, including voting and dividend rights, shall be suspended, except the right of the shareholder to
receive the fair value of the share.

Right of Inspection

A shareholder has the right to inspect the records of all business transactions of the corporation and
the minutes of any meeting of the Board and shareholders at reasonable hours on business days and
may demand a copy of excerpts from such records or minutes at his or her expense. However, the
corporation may refuse such inspection if the shareholder demanding to examine or copy the records
of the corporation has improperly used any information secured through any prior examination, or was
not acting in good faith or for a legitimate purpose in making his demand.

Right to Financial Statements

A shareholder has a right to be furnished with the most recent financial statement of a Philippine
corporation, which shall include a balance sheet as of the end of the last taxable year and a profit or
loss statement for said taxable year, showing in reasonable detail its assets and liabilities and the results
of its operations. At the meeting of shareholders, the directors is required to present to the shareholders
a financial report of the operations of the corporation for the preceding year, which shall include financial

19Subject to the approval of the amendment to the Articles of Incorporation of the Company. The application for
the amendment of the Articles of Incorporation and By-laws of the Company has been submitted to the SEC on
February 23, 2017.

103
statements duly signed and certificate by an independent certified public accountant.

Provisions that Would Delay, Deter or Prevent a Change in Control

The Articles of incorporation or amended by-laws of the Company do not contain provisions that would
delay, defer or prevent a change in control of the Company.

Common Shares and Preferred Shares

Set out below is a summary of the features of common and preferred shares of the Company:

Feature Preferred Share Common Share

Right to Vote The holders of preferred shares The holders of common shares
are not entitled to vote, except are entitled to vote.
that, under the Philippine
Corporation Code, non-vot ing
shares are allowed to vote in
certain actions involving
fundamental changes in the
Company.

Right to Dividends The holders of preferred shares No dividend shall be declared

are entitled to receive cash and paid on common shares
dividends upon declaration made unless cash dividends shall have
at the sole option of the Board of been declared and paid to all
Directors. The annual dividends holders of preferred shares.
shall be at the rate of six percent
(6%) calculated in respect of
each share by reference to the
issue price thereof

The dividends on the preferred

shares are cumulative. No
dividend shall be declared and
paid on common shares unless
cash dividends shall have been
declared and paid to all holders
of preferred shares. The holders
of preferred shares are not
entitled to participate or share in
the retained earnings remaining
after dividend payment shall
have been made on said
preferred shares.

Redemption The preferred shares shall be ---

redeemable, in whole or in part,
at the sole option of the
Company at the end of the fift h
year from the issue date thereof,
at the price equal to the issue
price plus any accumulated and
unpaid cash dividends. The
preferred shares, when
redeemed, shall not be
considered retired and may be
re-issued by the Company at a
price to be determined by the
104
 Board of Directors.

Liquidation In the event of liquidation, ---

dissolution, bankruptcy or
winding-up of the affairs of the
Company, the holders of the
preferred shares that are
outstanding at that time shall
enjoy preference in the payment,
in full or, if the remaining assets
of the Company are insufficient ,
on a pro rata basis as among all
holders of preferred shares, of
the issue price of the shares,
together with any previous ly
declared and unpaid dividends ,
before any property and asset of
the Company is paid and
distributed to the holders of
common shares.

Denial of Pre-Emptive Right
There shall be no pre-emptive rights with respect to: (i) shares of
stock to be issued, sold or otherwise disposed of by the Company ,
(ii) the issuance of any class of shares in payment of a previous ly
contracted debt or equity-linked debt, or shares issued in exchange
for property needed for corporate purposes, (iii) the issuance of
shares out of unissued capital stock or from any increase in the
authorized capital stock of the Company, (iv) re-issuance or
disposition of treasury shares, and (v) any other issuance or
disposition of the shares of the Company.
---

Board of Directors

Unless otherwise provided by law, the corporate powers of the Company are exercised, its business is
conducted, and its property is controlled, by the Board. Pursuant to the articles of incorporation, as
amended, the Company currently have eleven (11) directors, four (4) of whom are independent directors
within the meaning set forth in Section 38 of the SRC. 20 The directors of the Company shall be elected
during each regular meeting of shareholders, at which shareholders representing at least a majority of
the issued and outstanding capital shares of the Company are present, either in person or by proxy.
Directors may only act collectively; individual directors have no power as such. Six (6) directors, which
is a majority of the Directors, constitute a quorum for the transaction of corporate business. In general,
every decision of a majority of the quorum duly assembled as a Board is valid as a corporate act. Any
vacancy created by the death, resignation or removal of a director prior to expiration of such term of the
director shall be filled by a vote of at least a majority of the remaining directors, if still constituting a
quorum, Otherwise, the vacancy must be filled by the shareholders at a meeting duly called for the
purpose. Any director elected in this manner by the Board shall serve only for the unexpired term of the
director whom such director replaces and until his successor is duly elected and qualified.

Shareholders Meetings

Annual or Regular Shareholders Meetings

20The application for the amendment of the Articles of Incorporation and By-laws of the Company has been
submitted to the SEC on February 23, 2017.

105
All Philippine corporations are required to hold an annual meeting of shareholders for corporat e
purposes including the election of directors. The by-laws of the Company provide for annual meetings
first Monday of June of each year, of if a legal holiday, on the following day, to be held at the principal
office of the Company and at such hour as specified in the notice.

Special Shareholders Meeting

Special meetings of shareholders, for any purpose or purposes, may at any time be called by either the
President of the Company or a majority of the board of directors of the Company, at its own instance,
or upon the written request of stockholders registered as the owners of majority of the outstanding
capital stock of the Company.

Notice of Shareholders Meeting

Whenever shareholders are required or permitted to take any action at a meeting, a written notice of
the meeting shall be given which shall state the place, date and time of the meeting, and the purpos e
or purposes for which the meeting is called not less than 28 days prior to the date of such meeting. No
notice of meeting need be published in any newspaper, except when necessary to comply with the
special requirements of the Philippine Corporation Code. Shareholders entitled to vote may, by written
consent, waive notice of the time, place and purpose of any meeting of shareholders and any action
taken at such meeting pursuant to such waiver shall be valid and binding. When the meeting of the
shareholders is adjourned to another time or place, notice of the adjourned meeting need not be
provided so long as the time and place to which the meeting is adjourned are announced at the meeting
at which the adjournment is taken. At the reconvened meeting, any business may be transacted that
might have been transacted on the original date of the meeting.

Quorum

A quorum at any meeting of the shareholders shall consist of a majority of the outstanding voting stock
of the Corporation represented in person or by proxy, and a majority of such quorum shall decide any
question that may come before the meeting, save and except those several matters in which the laws
of the Philippines require the affirmative vote of a greater proportion.

Voting

The shareholders may vote at all meetings the number of shares registered in their respective names,
either in person or by proxy duly appointed as herein provided.

Fixing Record Dates

Under existing Philippine SEC rules, cash dividends declared by corporations whose shares are listed
on the PSE shall have a record date which shall not be less t han ten (10) and not more than 30 days
from the date of declaration of cash dividends. With respect to stock dividends, the record date shall
not be less than ten (10) nor more than 30 days from the date of shareholder approval. In the event that
a stock dividend is declared in connection with an increase in authorized capital stock, the
corresponding record date shall be fixed by the Philippine SEC and shall be indicated in the Philippine
SEC order which shall not be less than ten (10) days nor more than 30 days after all clearances and
approvals by the Philippine SEC shall have been secured. Regardless of the kind of dividends, the
record date set shall not be less than ten (10) trading days from receipt by the PSE of the notice of
declaration of the dividend.

Proxies

Shareholders may vote at all meetings the number of shares registered in their respective names, either
in person or by proxy duly given in writing and duly presented to and received by the Corporat e
Secretary for inspection and recording at or prior to the opening of the meeting. No proxy bearing the
signature that is not legally acknowledged, if unrecognized by the Corporate Secretary, shall be honored
at the meetings. Unless otherwise provided in the proxy, it shall be valid only for the m eeting at which
it has been presented to the Corporate Secretary. No proxy shall be valid and effective for a period
106
longer than five (5) years at any one time. No member of the PSE and no broker/dealer shall give any
proxy, consent or authorization, in respect of any securities carried for the account of a customer to a
person other than the customer, without the express written authorization of such customer. The proxy
executed by the broker shall be accompanied by a certification under oath stating that before the proxy
was given to the broker, he had duly obtained the written consent of the persons in whose account the
shares are held.

There shall be a presumption of regularity in the execution of proxies and proxies shall be accepted if
they have the appearance of prima facie authenticity in the absence of a timely and valid challenge.
Proxies should comply with the relevant provisions of the Philippine Corporation Code, the SRC, the
Implementing Rules and Regulations of the SRC (as amended), and Philippine SEC Memorandum
Circular No. 5 (series of 1996) issued by the Philippine SEC.

Issues of Shares

Subject to otherwise applicable limitations, the Company may issue additional shares to any person for
consideration deemed fair by the Board, provided that such consideration shall not be less than the par
value of the issued shares. No share certificates shall be issued to a subscriber until the full amount of
the subscription together with interest and expenses (in case of delinquent Shares) has been paid and
proof of payment of the applicable taxes shall have been submitted to the Corporate Secretary of the
Company. Under the PSE Rules, only fully paid shares may be listed on the PSE.

Transfer of Common Shares

All transfer of shares on the PSE shall be effected by means of a book -entry system. Under this system
of trading and settlement, a registered shareholder transfers legal title over the shares to such nominee,
but retains beneficial ownership over the shares. A shareholder transfers legal title by surrendering the
stock certificate representing his shares to participants of the PDTC System (i.e., brokers and custodian
banks) that, in turn, lodge the same with the PCD Nominee. A shareholder may request his s hares to
be uplifted from the PDTC, in which case a certificate of stock is issued to the shareholder and the
shares are registered in the name of the shareholder. See The Philippine Stock Market on page 110
of this Preliminary Prospectus.

Philippine law does not require transfers of the Shares to be effected on the PSE, but any off-exchange
transfers will subject the transferor to a capital gains tax that may be significantly greater than the stock
transfer tax applicable to transfers effected on an exchange. See Philippine Taxation on page 118 of
this Preliminary Prospectus. All transfers of Shares on the PSE must be effected through a licensed
stockbroker in the Philippines.

Share Register

The share register of the Company is maintained at the principal office of the share transfer agent of
the Company, [] located at [].

Share Certificates

Certificates representing the Shares will be issued in such denominations as shareholders may request,
except that certificates will not be issued for fractional Shares. Shareholders may request the stock
transfer agent of the Company to split their certificates. Shares may also be lodged and maintained
under the book-entry system of the PDTC. See The Philippine Stock Mark et on page 110 of this
Preliminary Prospectus.

Mandatory Tender Offer

In general, under the SRC and its implementing rules and regulations, it is mandatory for any person or
group of persons acting in concert to make a tender offer to all the shareholders of the target corporation
before the intended acquisition of:

at least 35% of a) any class of any equity security of a corporation listed in the Philippines or b)
107
 any class of any equity security of a Philippine corporation with assets of at least 50 Million
and having 200 or more shareholders with at least 100 shares each; or

35% of such equity over a period of 12 months; or

less than 35% of such equity that will result in ownership of over 51% of the total outstanding
equity.

When the securities tendered pursuant to such an offer exceed the number of shares that the acquiring
person or group of persons is willing to acquire, the securities shall be purchased from each tendering
shareholder on a pro rata basis according to the number of securities tendered by each security holder.
In the event that the tender offer is oversubscribed, the aggregate amount of securities to be acquired
at the close of such tender offer shall be proportionately distributed to both the selling shareholders with
whom the acquirer may have been in private negotiations with and the minority shareholders.

In a mandatory tender offer, the acquirer must offer the highest price paid by him for such shares during
the past six (6) months. Where the offer involves payment by transfer or allotment of securities, such
securities must be valued on an equitable basis. However, if any acquisition of even less than 35%
would result in ownership of 51% of the total outstanding equity, the acquirer shall make a tender offer
for all the outstanding equity securities to all remaining shareholders of the said corporation at a price
supported by a fairness opinion provided by an independent financial adviser or equivalent third party.
The acquirer in such tender offer shall accept any and all securities thus tender.

No mandatory tender is required in:

purchases of shares from unissued capital shares unless it will result in a 50% or more
ownership of shares by the purchaser;

purchases from an increase in the authorized capital shares of the target company;

purchases in connection with a foreclosure proceeding involving a pledge or security where the
acquisition is made by a debtor or creditor;

purchases in connection with a privatization undertaken by the government of the Philippines;

purchases in connection with corporate rehabilitation under court supervision;

purchases through an open market at the prevailing market price; or

purchases resulting from a merger or consolidation.

Fundamental Matters

The Philippine Corporation Code provides that the following acts of the corporation should have the
approval of shareholders representing at least two-thirds (2/3) of the issued and outstanding capital
stock of the corporation: (i) amendment of the articles of incorporation; (ii) removal of direc tors; (iii) sale,
lease, exchange, mortgage, pledge or other disposition of all or a substantial part of the assets of the
corporation; (iv) investment of corporate funds in any other corporation or business or for any purpos e
other than the primary purpose for which the corporation was organized; (v) delegation to the board of
directors of the power to amend or repeal by-laws or adopt new by-laws; (vi) merger or consolidation;
(vii) an increase or decrease in capital stock; (viii) dissolution; (ix) extensi on or shortening of the
corporate term; (x) creation or increase of bonded indebtedness; (xi) declaration of stock dividends; (xii)
management contracts with related parties; and (xiii) ratification of contracts between the corporation
and a director or officer.

The approval of shareholders holding a majority of the outstanding capital shares of a Philippine
corporation, including non-voting shares, is required for the adoption or amendment of the by -laws of
such corporation.

108
Accounting and Auditing Requirements

Philippine stock corporations are required to file copies of their annual consolidated financial statements
with the Philippine SEC. Corporations whose shares are listed on the PSE are also required to file
quarterly consolidated financial statements for the first three (3) quarters with the Philippine SEC and
the PSE. The Board is required to present to shareholders at every annual meeting a financial report
(including the financial statements) of the operations of the Company for the precedi ng year.

109
The Philippine Stock Market
The information presented in this section has been extracted from publicly available documents whic h
have not been prepared or independently verified by the Company, the Joint Issue Managers, Joint
Lead Underwriters, and Joint Book runners, or any of their respective subsidiaries, affiliates or advisors
in connection with the offer and sale of the Offer Shares.

Brief History

The Philippines initially had two (2) stock exchanges, the Manila Stock Exchange, which was organized
in 1927, and the Makati Stock Exchange, which began operations in 1963. Each exchange was self-
regulating, governed by its respective board of governors elected annually by its members.

Several steps initiated by the Government have resulted in the unification of the two (2) bourses into
the PSE. The PSE was incorporated in 1992 by officers of both the Makati and the Manila Stock
Exchanges. In March 1994, the licenses of the two (2) exchanges were revoked. While the PSE
maintains two (2) trading floors, one in Makati City and the other in Pasig City, these floors are linked
by an automated trading system which integrates all bid and ask quotations from the bourses.

In June 1998, the Philippine SEC granted the PSE Self-Regulatory Organization status, allowing it
to impose rules as well as implement penalties on erring trading participants and listed companies.
On August 8, 2001, PSE completed its demutualization, converting from a non-stock member-
governed institution into a stock corporation in compliance with the requirements of the SRC. The PSE
has an authorized capital stock of 120.0 Million, of which approximately 61.2 Million was subscribed
and fully paid-up as of June 30, 2015. Each of the 184 member-brokers was granted 50,000 shares
of the new PSE at a par value of 1.00 per share. In addition, a trading right evidenced by a Trading
Participant Certificate was immediately conferred on each member broker allowing the use of the
trading facilities of the PSE. As a result of the demutualization, the composition of the PSE Board of
Governors was changed, requiring the inclusion of seven (7) brokers and eight (8) non-brokers, one
(1) of whom is the president. On December 15, 2003, the PSE listed its shares by way of introduction
at its own bourse as part of a series of reforms aimed at strengthening the Philippine securities
industry.

Classified into financial, industrial, holding firms, property, services, and mi ning and oil sectors,
companies are listed either on the PSE Main Board or the Small, Medium and Emerging Board of the
PSE. Recently, the PSE issued Rules on Exchange Traded Funds (ETF) which provides for the
listing of ETFs on an ETF Board separate from the existing boards of the PSE. Previously, PSE
allowed listing on the First Board, Second Board or the Small and Medium Enterprises Board. With
the issuance by the PSE of Memorandum No. CN-No. 2013-0023 dated June 6, 2013, revisions to the
PSE Listing Rules were made, among which changes are the removal of the Second Board listing and
the requirement that lock-up rules be embodied in the articles of incorporation of the issuer. Each
index represents the numerical average of the prices of component stocks. The PSE has an index,
referred to as the PHISIX, which as at the date thereof reflects the price movements of selected stocks
listed on the PSE, based on traded prices of stocks from the various sectors. The PSE shifted from
full market capitalization to free float market capitalization effective April 3, 2006 simultaneous with
the migration to the free float index and the renaming of the PHISIX to PSEi. The PSEi includes 30
selected stocks listed on the PSE. In July 2010, the new trading system of the PSE, now known as
PSE Trade, was launched.

With the increasing calls for good corporate governance, PSE has adopted an online daily disclosure
system to improve the transparency of listed companies and to protect the investing public.
The PSE launched its Corporate Governance Guidebook in November 2010 as another initiative of
the PSE to promote good governance among listed companies. It is composed of the ten (10)
guidelines embodying principles of good business practice and based on internationally recognized
corporate governance codes and best practices.

The table below sets forth movements in the composite index from 2005 to as of 2016, and shows the
number of listed companies, market capitalization, and value of shares traded for the same period:

110
Selected Stock Exchange Data

Composite Number of Aggregate Combined

Year Index at listed Market Value of
closing companies Capitalization Turnover

2005 2,096.0 237 5,948.4 383.5

2006 2,982.5 239 7,173.2 572.6
2007 3,621.6 244 7,977.6 1,338.3
2008 1,872.9 246 4,069.2 763.9
2009 3,052.7 248 6,029.1 994.2
2010 4,201.1 253 8,866.1 1,207.4
2011 4,372.0 245 8,697.0 1,422.6
2012 5,812.7 254 10,952.7 1,771.7
2013 5,889.8 257 11,931.3 2,546.2
2014 7,230.6 263 14,251.7 2,130.1
2015 7,098.8 263 13,650.0 1,510.0
2016 6,840.6 268 14,438.8 1,776.3
Source: The Philippine Stock Exchange

Trading

The PSE is a double auction market. Buyers and sellers are each represented by stock brokers. To
trade, bids or ask prices are posted on the electronic trading system of the PSE. A buy (or sell) order
that matches the lowest asked (or highest bid) price is automatically executed. Buy and sell orders
received by one broker at the same price are crossed at the PSE at the indicated price. Transactions
are generally invoiced through a confirmation slip sent to customers on the trade date (or the following
trading day). Payment of purchases of listed securities must be made by the buyer on or before the
third trading day after the trade.

Equities trading on the PSE starts at 9:30 am and ends at 12:00 pm for the morning session, and
resumes at 1:30 pm and ends at 3:30 pm for the afternoon session, with a ten-minute extension during
which transactions may be conducted, provided that they are executed at the las t traded price and are
only for the purpose of completing unfinished orders. Trading days are Monday to Friday, except legal
and special holidays.

Minimum trading lots range from 5 to 1,000,000 shares depending on the price range and nature of
the security traded. The minimum trading lot for the Shares is 100 shares. Odd-sized lots are traded
by brokers on a board specifically designed for odd-lot trading.

To maintain stability in the stock market, daily price swings are monitored and regulated.

Under current PSE regulations, whenever an order will result in a breach of the trading threshold of a
security within a trading day, the trading of that security will be frozen. Orders cannot be posted,
modified or cancelled for a security that is frozen. In cas es where an order has been partially matched,
only the portion of the order that will result in a breach of the trading threshold will be frozen. Where the
order results in a breach of the trading threshold, the following procedures shall apply:

(i) In case the static threshold is breached, the PSE will accept the order, provided the price is
within the allowable percentage price difference under the implementing guidelines of the
revised trading rules (i.e., 50% of the previous days reference or closing pric e, or the last
adjusted closing price); otherwise, such order will be rejected. In cases where the order is
accepted, the PSE will adjust the static threshold to 60%. All orders breaching the 60% static
threshold will be rejected by the PSE.

(ii) In case the dynamic threshold is breached, the PSE will accept the order if the price is within

111
 the allowable percentage price difference under the existing regulations (i.e., 20.% for security
cluster A and newly-listed securities, 15% for security cluster B and 10% for security cluster C);
otherwise, such order will be rejected by the PSE.

Non-Resident Transactions

When the purchase/sale of Philippine shares involves a non-resident, whether the transaction is
effected in the domestic or foreign market, it will be the responsibility of the securities dealer/broker to
register the transaction with the BSP. The local securities dealer/broker shall file with the BSP within
three (3) business days from the transaction date, an application in the prescribed registration form.
After compliance with other required undertakings, the BSP shall issue a certificate of registratio n.
Under BSP rules, all registered foreign investments in Philippine securities including profits and
dividends, net of taxes and charges, may be repatriated.

Settlement

The Securities Clearing Corporation of the Philippines (SCCP) is a wholly owned subsidiary of the
PSE and was organized primarily as a clearance and settlement agency for SCCP -eligible trades
executed through the facilities of the PSE. SCCP received its permanent license to operate on January
17, 2002. It is responsible for: (i) synchronizing the settlement of funds and the transfer of securities
through delivery versus payment, as well as clearing and settlement of transactions of clearing
members, who are also PSE Trading Participants; (ii) guaranteeing the settlement of trades in the
event of the default of the PSE Trading Participant through the implementation of its Fails
Management System and administration of the Clearing and Trade Guaranty Fund; and (iii)
performance of risk management and monitoring to ensure final and irrevocable settlements of trades.

SCCP settles PSE trades on a three-day rolling settlement environment, which means that settlement
of trades takes place three (3) trading days after transaction date (T+3). The deadline for settlement
of trades is 12:00 noon of T+3. Securities sold should be in scripless form and lodged under the book -
entry system of the PDTC. Each PSE broker maintains a Cash Settlement Account with one (1) of the
seven (7) existing Settlement Banks of SCCP, which are BDO, Rizal Commercial Banking
Corporation, Metropolitan Bank and Trust Company, Deutsche Bank, The Hongkong and Shanghai
Banking Corporation Limited, Unionbank of the Philippines and Maybank Philippines, Inc. Payment
for securities bought should be in good, cleared funds and should be final and irrevocable. Settlement
is presently on a broker level.

SCCP implemented its Central Clearing and Central Settlement system (CCCS) on May 29, 2006.
CCCS employs multilateral netting, whereby the system automatically offsets buy and sell
transactions on a per issue and a per flag basis to arrive at a net receipt or a net delivery security
position for each clearing member. All cash debits and credits are also netted into a single net cash
position for each clearing member. Novation of the original PSE trade contracts occurs, and SCCP
stands between the original trading parties and becomes the Central Counterparty to each PSE -
eligible trade cleared through it.

Scripless Trading

In 1995, the Philippine Depository & Trust Corporation (formerly the Philippine Central Depository,
Inc.), was organized to establish a central depository in the Philippines and introduce scripless or
book-entry trading in the Philippines. On December 16, 1996, the PDTC was granted a provisional
license by the Philippine SEC to act as a central securities depository.

All listed securities at the PSE have been converted into book -entry settlement in the PDTC. The
depository service of the PDTC provides the infrastructure for lodgment (deposit) and upliftment
(withdrawal) of securities, pledge of securities, securities lending and borrowing and corporate actions
including the meetings of the shareholders, dividend declarations and rights offerings. The PDTC also
provides depository and settlement services for non- PSE trades of listed equity securities. For
transactions on the PSE, the security element of the trade will be settled through the book -entry
system, while the cash element will be settled through the current settlement banks, BDO, Rizal
Commercial Banking Corporation, Metropolitan Bank and Trust Company, Deutsche Bank, HSBC
Philippines, Unionbank of the Philippines and Maybank Philippines, Inc.

112
In order to benefit from the book-entry system, securities must be immobilized into the PDTC system
through a process called lodgment. Lodgment is the process by which shareholders transfer legal title
(but not beneficial title) over their shares of stock in favor of PCD Nominee, a corporation wholly owned
by the PDTC whose sole purpose is to act as nominee and legal title holder of all shares of stock
lodged into the PDTC. Immobilization is the process by which the warrant or share certificates of
lodging holders are canceled by the transfer agent and the corresponding transfer of beneficial
ownership of the immobilized shares to PCD Nominee will be recorded in the registry of the Issuer.
This trust arrangement between the participants and PDTC through PCD Nominee is established by
and explained in the PDTC Rules and Operating Procedures approved by the Philippine SEC. No
consideration is paid for the transfer of legal title to PCD Nominee. Once lodged, transfers of beneficial
title of the securities are accomplished by way of book -entry settlement.

Under the current PDTC system, only participants (e.g. brokers and custodians) will be recognized by
the PDTC as the beneficial owners of the lodged equity securities. Thus, each beneficial owner of
shares through his participant, will be the beneficial owner to the extent of t he number of shares held
by such participant in the records of the PCD Nominee. All lodgments, trades and uplifts on these
shares will have to be coursed through a participant. Ownership and transfers of beneficial interests
in the shares will be reflected, with respect to the aggregate holdings of the participant, in the PDTC
system, and with respect to the holdings of each beneficial owner, in the records of the participants.
Beneficial owners are thus advised that in order to exercise their rights as beneficial owners of the
lodged shares, they must rely on their participant-brokers and/or participant-custodians.

Any beneficial owner of shares who wishes to trade his interests in the shares must course the trade
through a participant. The participant can execute PSE trades and non-PSE trades of lodged equity
securities through the PDTC system. All matched transactions in the PSE trading system will be fed
through the SCCP, and into the PDTC system. Once it is determined on the settlement date (trading
date plus three trading days) that there are adequate securities in the securities settlement account of
the participant-seller and adequate cleared funds in the settlement bank account of the participant -
buyer, the PSE trades are automatically settled in the CCCS system, in accordance with the SCCP
and PDTC Rules and Operating Procedures. Once settled, the beneficial ownership of the securities
is transferred from the participant-seller to the participant-buyer without the physical transfer of stock
certificates covering the traded securities.

If a shareholder wishes to withdraw his stockholdings from the PDTC System, the PDTC has a
procedure of upliftment under which PCD Nominee will transfer back to the shareholder the legal title
to the shares lodged. The uplifting shareholder shall follow the Rules and Operating Procedures of the
PDTC for the upliftment of shares lodged under the name of PCD Nominee. The transfer agent shall
prepare and send a Registry Confirmation Advice to the PDTC covering the new number of shares
lodged under PCD Nominee. The expenses for upliftment are for the account of the uplifting
shareholder.

The difference between the depository and the registry would be on the recording of ownership of the
shares in the books of the issuing corporations. In the depository set-up, shares are simply
immobilized, wherein the certificates of the customers are canceled and a confirmation advice is
issued in the name of PCD Nominee to confirm new balances of the shares lodged with t he PDTC.
Transfers among/between broker and/or custodian accounts, as the case may be, will only be made
within the book-entry system of PDTC. However, as far as the issuing corporation is concerned, the
underlying certificates are in the name of the nominee. In the registry set-up, settlement and recording
of ownership of traded securities will already be directly made in the books or system of the transfer
agent of the corresponding issuing company. Likewise, recording will already be at the beneficiary
level (whether it be a client or a registered custodian holding securities for its clients), thereby removing
from the broker its current de facto custodianship role.

Amended Rule on Lodgment of Securities

On June 24, 2009, the PSE apprised all listed companies and market participants through
Memorandum No. 2009-0320 that commencing on July 1, 2009, as a condition for the listing and
trading of the securities of an applicant company, the applicant company shall electronically lodge its
registered securities with the PDTC or any other entity duly authorized by the Philippine SEC, without

113
any jumbo or mother certificate in compliance with the requirements of Section 43 of the SRC. In
compliance with the foregoing requirement, actual listing and trading of securities on the scheduled
listing date shall take effect only after submission by the applicant company of the documentary
requirements stated in the amended rules on Lodgment of Securities of the PSE.

Further, the PSE apprised all listed companies and market participants on May 21, 2010 through
Memorandum No. 2010-0246 that the Amended Rule on Lodgment of Securities under Section 16 of
Article III, Part A of the Revised Listing Rules of the PSE shall apply to all securities that are lodged
with the PDTC or any other entity duly authorized by the Philippine SEC.

For listing applications, the amended rule on lodgment of securities is applicable to:

a. the offer shares/securities of the applicant company in the case of an initial public offering;

b. the shares/securities that are lodged with the PDTC, or any other entity duly authorized by the
Philippine SEC in the case of a listing by way of introduction;

c. new securities to be offered and applied for listing by an existing listed company; and

d. additional listing of securities of an existing listed company.

Pursuant to the said amendment, the PDTC issued an implementing procedure in support thereof, to
wit:

For new companies to be listed at the PSE as of July 1, 2009 the usual procedure will be observed but
the Transfer Agent of the companies shall no longer issue a certificate to PCD Nominee but shall issue
a Registry Confirmation Advice, which shall be the basis for the PDTC to credit the holdings of the
Depository Participants on listing date.

On the other hand, for existing listed companies, the PDTC shall wait for the advice of the Trans fer
Agents that it is ready to accept surrender of PCNC jumbo certificates and upon such advice the PDTC
shall surrender all PCNC jumbo certificates to the Transfer Agents for cancellation. The Transfer Agents
shall issue a Registry Confirmation Advice to PCNC evidencing the total number of shares registered
in the name of PCNC in the registry of the issuer as a confirmation date.

Issuance of Certificated Shares

On or after the listing of the shares on the PSE, any beneficial owner of the shares may apply to PDTC
through his broker or custodian-participant for a withdrawal from the book-entry system and return to
the conventional paper-based settlement. As stated above, if a shareholder wishes to withdraw his
stockholdings from the PDTC System, the PDTC has a procedure of upliftment under which PCD
Nominee will transfer back to the shareholder the legal title to the shares lodged. The uplifting
shareholder shall follow the Rules and Operating Procedures of the PDTC for the upliftment of shares
lodged under the name of PCD Nominee. The transfer agent shall prepare and send a Registry
Confirmation Advice to the PDTC covering the new number of shares lodged under PCD Nominee.
The expenses for upliftment are for the account of the uplifting shareholder.

Upon the issuance of certificated shares in the name of the person applying for upliftment, such shares
shall be deemed to be withdrawn from the PDTC book-entry settlement system, and trading on such
shares will follow the normal process for settlement of certificated securities. The expenses for
upliftment of beneficial ownership in the shares to certificated securities will be charged to the person
applying for upliftment. Pending completion of the upliftment process, the beneficial interest in the
shares covered by the application for upliftment is frozen and no trading and book-entry settlement
will be permitted until the relevant stock certificates in the name of the person applying for upliftment
shall have been issued by the transfer agent of the relevant company.

114
115
Philippine Foreign Exchange and Foreign Ownership Controls
Foreign Exchange Regulations

Under current BSP regulations, an investment in Philippine securities (such as the Offer Shares) must
be registered with the BSP if the foreign exchange needed to service the repatriation of capital and the
remittance of dividends, profits and earnings derived from such shares is to be sourced from the
Philippine banking system. If the foreign exchange required to service capital repatriation or dividend
remittance is sourced outside the Philippine banking system, registration is not required. BSP Circular
No. 471 (Series of 2005), however, subjects foreign exchange dealers, money changers and remittance
agents to Republic Act No. 9160 (the Anti-Money Laundering Act of 2001, as amended) and requires
these non-bank sources of foreign exchange to require foreign exchange buyers to submit, among
others, a notarized application form and supporting documents in connection with their application to
purchase foreign exchange exceeding US$5,000 for purposes of capital repatriation and remittance of
dividends.

The application for registration may be done directly with the BSP or through a custodian bank duly
designated by the foreign investor. A custodian bank may be a universal bank, commercial bank or an
offshore banking unit registered with the BSP to act as such and appointed by the investor to register
the investment, hold shares for the investor, and represent the investor in all necessary actions in
connection with his investments in the Philippines. Applications for registration must be accompanied
by: (i) purchase invoice, subscription agreement and proof of listing on the PSE (either or both); (ii)
credit advice or bank certificate showing the amount of foreign currency inwardly remitted and convert ed
into pesos; and (iii) transfer instructions from the stockbroker or dealer, as the case may be.

Upon registration of the investment, proceeds of divestments or dividends of registered investments ,

are repatriable or remittable immediately and in full with foreign exchange sourced from the Philippine
banking system, net of applicable tax, without need of BSP approval. Remittance is permitted upon
presentation of (i) the BSP registration document; (ii) the cash dividends notice from the PSE and the
Philippine Central Depository printout of cash dividend payment or computation of interest earned; (iii)
copy of the sworn statement on the board resolution of the corporate secretary covering the dividend
declaration and (iv) detailed computation of the amount applied for in the format prescribed by the BSP.
Pending registration or reinvestment, divestment proceeds, as well as dividends of registered
investments, may be lodged temporarily in interest-bearing deposit accounts. Interest earned thereon,
net of taxes, may also be remitted in full. Remittance of divestment proceeds or dividends of registered
investments may be reinvested in the Philippines if the investments are registered with the BSP or the
custodian bank of the investor.

The foregoing is subject to the power of BSP, through the Monetary Board and with the approval of the
President of the Philippines, to temporarily suspend or restrict the availability of foreign exchange ,
require licensing of foreign exchange transactions or require delivery of foreign exchange to the BSP
or its designee when an exchange crisis is imminent, or in times of national emergency.

The registration with the BSP of all foreign investments in any Shares received in exchange for Offer
Shares shall be the responsibility of the foreign investor.

Foreign Ownership Controls

The Philippine Constitution and related statutes set forth restrictions on foreign ownership of companies
that own land in the Philippines and companies that conduct mining activities by entering into co-
production, joint venture, or production-sharing agreements with the Government in the exploration,
development, and utilization of natural resources of the Philippines.

In connection with the ownership of private land, Article XII, Section 7 of the Philippine Constitution, in
relation to Article XII, Section 2 of the Philippine Constitution and Chapter 5 of Commonwealth Act No.
141, states that no private land shall be transferred or conveyed except to citizens of the Philippines or
to corporations or associations organized under the laws of the Philippines at least 60% of whose capital
is owned by such citizens.

116
With regard to the conduct of mining activities, Article XII, Sect ion 2 of the Constitution states the
exploration, development, and utilization of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such activities, or it may enter into co -
production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such citizens.

Republic Act No. 7042, as amended, otherwise known as the Foreign Investments Act of 1991 and the
Negative List issued pursuant thereto, reserves to Philippine Nationals all areas of investment in which
foreign ownership is limited by mandate of the Constitution and specific laws. Section 3(a) of said law
defines a Philippine National as:

a citizen of the Philippines;

a domestic partnership or association wholly owned by citizens of the Philippines;

a trustee of funds for pension or other employee retirement or separation benefits where the trustee
is a Philippine National and at least 60% of the fund will accrue to the benefit of the Philippine
Nationals;

a corporation organized under the laws of the Philippines of which at least 60% of the capital stock
outstanding and entitled to vote is owned and held by citizens of the Philippines; and

a corporation organized abroad and registered as doing business in the Philippines under the
Corporation Code of the Philippines of which 100% of the capital stock outstanding and entitled to
vote is wholly owned by Filipinos.

However, the Foreign Investments Act of 1991 states that where a corporation (and its non-Filipino
shareholders) own stock in a Philippine SEC-registered enterprise, at least 60% of the capital stock
outstanding and entitled to vote of both the investing corporation and the investee corporation must be
owned and held by citizens of the Philippines. Further, at least 60% of the members of the board of
directors of both the investing corporation and the investee corporation must be Philippine citizens in
order for the investee corporation to be considered a Philippine National.

Considering the foregoing, since the Company and its subsidiary are subject to foreign ownership
restrictions, foreign equity in the Company will be limited to a maximum of 40% of its outstanding capital
stock entitled to vote. Accordingly, the Company shall disallow the issuance or the transfer of Shares
to persons other than Philippine Nationals and shall not record transfers in the books of the Company
if such issuance or transfer would result in the Company ceasing to be a Philippine National for purposes
of complying with the restrictions on foreign ownership discussed above.

Compliance with the required ownership by Philippine Nationals of a corporation is to be determined on

the basis of outstanding capital stock whether fully paid or not.

117
Philippine Taxation
The following is a discussion of the material Philippine tax consequences of the acquisition, ownership,
and disposition of the Shares. The statements made regarding taxation in the Philippines are based on
the laws in force at the date of this Preliminary Prospectus and are subject to any changes in law
occurring after such date. The following summary does not purport to be a comprehensive description
of all of the tax considerations that may be relevant to a decision to invest in the Shares and does not
purport to deal with the tax consequences applicable to all categories of investors, some of which (such
as dealers in securities) may be subject to special rates. Prospective purchasers of the Shares are
advised to consult their own tax advisers concerning the tax consequences of their investment in the
Shares.

As used in this section, the term resident alien refers to an individual whose residence is within the
Philippines and who is not a citizen thereof; a non-resident alien is an individual whose residence is
not within the Philippines and who is not a citizen of the Philippines; a non-resident alien who is actually
within the Philippines for an aggregate period of more than 180 days during any calendar year is
considered a non-resident alien engaged in trade or business in the Philippines; otherwise, such non -
resident alien who is actually within the Philippines for an aggregate period of 180 days or less during
any calendar year is considered a non-resident alien not engaged in trade or business in the
Philippines. A resident foreign corporation is a foreign corporation engaged in trade or business within
the Philippines; and a non-resident foreign corporation is a non-Philippine corporation not engaged in
trade or business within the Philippines.

The term non-resident holder means a holder of the Shares of the Company:

who is an individual who is neither a citizen nor a resident of the Philippines or an entity whic h
is a non-resident foreign corporation; and

should a tax treaty be applicable, whose ownership of the Shares of the Company is not
effectively connected with a fixed base or a permanent establishment in the Philippines.

Tax on Dividends

Cash and property dividends received from a domestic corporation by individual shareholders who are
either citizens or residents of the Philippines are subject to a final withholding tax at the rate of 10%,
which shall be withheld by the Company. Cash and property dividends received by non-resident alien
individuals engaged in trade or business in the Philippines are subject to a 20% final withholding tax on
the gross amount thereof, while cash and property dividends received by non-resident alien individuals
not engaged in trade or business in the Philippines are subject to a final withholding tax at 25% of the
gross amount, subject, however, to the applicable preferential tax rates under tax treaties executed
between the Philippines and the country of residence or domicile of such non-resident foreign
individuals.

Cash and property dividends received from a domestic corporation by another domestic corporation or
by resident foreign corporations are not subject to tax while those received by non-resident foreign
corporations are generally subject to a final withholding tax at the rate of 30%. The 30% rate for
dividends paid to a non-resident foreign corporation may be reduced to a lower rate of 15% if (i) the
country in which the non-resident foreign corporation is domiciled imposes no tax on foreign sourced
dividends or (ii) if the country of domicile of the non-resident foreign corporation allows at least 15%
credit equivalent for taxes deemed to have been paid in the Philippines.

The Bureau of Internal Revenue (BIR) has prescribed, through administrative issuances, certain
procedures for the availment of preferential tax rates or tax treaty relief. The application for tax treaty
relief has to be filed with the BIR by the non-resident shareholder (or its duly authorized representat ive)
prior to the first taxable event, or prior to the first and only time the income tax payer is required to
withhold the tax thereon, or should have withheld taxes thereon had the transaction been subject to tax.
In case of dividends, first taxable event has been construed by the BIR as payment of the dividend.
In case of sale of shares of stock, the BIR has construed the first taxable event as before the due date
of payment of documentary stamp tax.

118
Subject to the approval by the BIR of an application for tax treaty relief of a non-resident shareholder,
the Company shall withhold taxes at a reduced rate on dividends to be paid to a non-resident holder.
Failure to file with the BIR an application for tax treaty relief before the first table event may disqualify
the said application. However, the Philippine Supreme Court in Deutsche Bank AG Manila Branch v.
CIR, G.R. No. 188550, ruled that the period of application for the availment of tax treaty relief should
not operate to divest the taxpayer the entitlement to the tax relief as it would constitute a violation of the
duty required by good faith to comply with the treaty. The application for a tax treaty relief to be filed
with the BIR operates to confirm the entitlement of the taxpayer to such relief. While the Supreme Court
has ruled that the failure to file an application for tax treaty relief shall not disqualify an otherwise eligible
taxpayer, in practice, some withholding agents strictly require the income earners (payees) to show an
approved tax treaty relief application before availing of lower treaty tax rates t o avoid controversy. On
June 23, 2016, the BIR issued BIR Revenue Memorandum Order No. 27-2016 (RMO 27-2016) which
provides that in lieu of filing of a tax treaty relief application, preferential treaty rates for dividends ,
interests and royalties shall be granted outright by withholding final taxes at the applicable treaty rate.
[As of the date of this Preliminary Prospectus, the effectivity of RMO 27-2016 has been suspended.]

The current requirements for a tax treaty relief application in respect of dividends are set out in the
applicable tax treaty and in BIR Form No. 1901-D. These include proof of tax residence in the country
that is a party to the tax treaty. Proof of tax residence consists of a consularized certification from the
tax authority of the country of residence of the non-resident shareholder which states that the non -
resident stockholder is a tax resident of such country under the applicable tax treaty. If the non-resident
shareholder is a juridical entity, an authenticated certificated true copy of its articles of incorporation or
articles of association issued by the proper government authority should also be submitted to the BIR
in addition to the foregoing.

If the regular tax rate is withheld by the Company instead of the reduced rates applicable under a treaty,
the non-resident holder of the shares may file a claim for refund from the BIR. However, because the
refund process in the Philippines requires the filing of an administrative claim and the submission of
supporting information, and may also involve the filing of a judicial appeal, it may be impractical to
pursue such a refund.

Stock dividends distributed pro rata to any holder of shares of stock outside of local stock exchange are
generally not subject to Philippine income tax. However, the sale, exchange or disposition of shares
received as stock dividends by the shareholder is subject to capital gains or stock transaction tax, and
documentary stamp tax.

Tax Treaties

The following table lists some of the countries with which the Philippines has tax treaties and the tax
rates currently applicable to non-resident holders who are residents of those countries:

Stock transaction Capital gains tax

tax due
Dividends on sale or on disposition of
(%) disposition shares outside the
effected through PSE
Canada 25(1) the0.5 exempt (9)
May be(%)
(11)
China 15(2) PSE(%)0.5 May be exempt (9)
France 15(3) 0.5 May be exempt (9)
Germany 15(4) 0.5 May be exempt (9)
Japan 15(5) 0.5 May be exempt (9)
Singapore 25(6) 0.5 May be exempt (9)
United Kingdom 25(7) 0.5 Exempt (10)
United States 25(8) 0.5 May be exempt (9)

(1) 15% if t he rec ipient c ompany c ont rols at leas t 10% of t he vot ing power of t he c ompany
pay ing t he dividends ; 25% in all ot her c as es .

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 (2) 10% if the beneficial owner is a company which holds directly at least 10% of the capital of the
company paying the dividends; 15% in all other cases.

(3) 10% if the recipient company (excluding a partnership) holds directly at least 10% of the voting
shares of the company paying the dividends; 15% in all other cases.

(4) 5% if t he rec ipient c ompany (ex c luding a part ners hip) holds direc t ly at leas t 70% of t he
c apit al of t he c ompany pay ing t he dividends ; 10% if t he rec ipient c ompany (ex c luding a
part ners hip) holds direct ly at leas t 25% of t he c apit al of t he company paying the dividends. ;
15% in all ot her c as es

(5) 10% if the recipient company holds directly at least 10% of either the voting shares of the
company paying the dividends or of the total shares issued by that company during the
period of six months immediat ely preceding the date of payment of the dividends ; 15% in
all other cases.

(6) 15% if during the part of the taxable year of the paying company which precedes the dat e
of payment of dividends and during the whole of its prior taxable year at least 15% of the
outstanding shares of the voting shares of the paying company were owned by the recipient
company; 25% in all other cases.

(7) 15% if the recipient company is a company which controls directly or indirectly at least 10% of the
voting power of the company paying the dividends; 25% in all other cases.

(8) 20% if during t he part of t he t ax able y ear of t he pay ing c ompany whic h prec edes t he date
of pay ment of dividends and during t he whole of it s prior t ax able y ear, at leas t t en percent
(10% ) of t he out s t anding s hares of t he vot ing s hares of t he pay ing c orporat ion were owned
by t he rec ipient c orporat ion; 25% in ot her c ases. Not withst anding t he rat es provided under
t he Republic of t he P hilippines-United S t ates Treat y , res idents of t he Unit ed S t at es may
avail of t he 15% wit hholding t ax rat e under t he t ax -s paring c lause of t he P hilippine Tax
Code provided c ert ain c ondit ions are met .

(9) Capit al gains are t ax able only in t he c ount ry where t he s eller is a res ident , provided t he
s hares are not t hos e of a c orporat ion, t he as s et s of whic h c ons is t princ ipally of real
propert y s it uat ed in t he P hilippines , in whic h c as e t he s ale is s ubjec t t o P hilippine t ax e s.

(10) Under the tax treaty between the Philippines and the United Kingdom, capital gains on the
sale of the shares of Philippine corporations are subject to tax only in the country where
the seller is a resident, irrespective of the nature of the assets of the Philippine corporat i o n.

(11) Exempt if the stock transaction tax is expressly covered by the applicable tax treaty or is
deemed by the relevant authorit ies as an identical or substantially similar tax to the
Philippine income tax. In BIR Ruling No. ITAD 22-07 dated February 9, 2007, the BIR held
that the stock transaction tax cannot be considered as an identical or substantially similar
tax on income, and, consequent ly, ruled that a Singapore resident is not exempt from the
stock transaction tax on the sale of its shares in a Philippine corporat ion through the PSE.

When availing of capital gains tax exemption on the sale of shares of stock under a tax treaty, a tax
treaty exemption ruling shall be necessary in order to completely implement t he transfer. For sale of
shares made outside the PSE, a certificate authorizing registration (CAR) from the BIR is required
before the transfer is registered in the stock and transfer book. The BIR issues the CAR only after
verifying that the applicable taxes have been paid. Thus, in lieu of proof of payment of capital gains tax,
the tax treaty relief ruling should be submitted to the BIR office processing the CAR.

The requirements for a tax treaty relief application in respect of capital gains tax on the sale of shares
are set out in the applicable tax treaty and BIR Form No. 0901-C. These include proof of residence in
the country that is a party to the tax treaty. Proof of residence consists of a consularized certification
from the tax authority of the country of residence of the seller of shares which provides that the seller is
a resident of such country under the applicable tax treaty. If the seller is a juridical entity, authenticated

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certified true copies of its articles of incorporation or association issued by the proper government
authority should also be submitted to the BIR in addition to the certification of its residence from the tax
authority of its country of residence.

Sale, Exchange or Disposition of Shares through an Initial Public Offerin g (IPO)

The sale, barter, exchange or other disposition through an IPO of shares of stock in closely held
corporations is subject to an IPO Tax at the rates below based on the gross selling price or gross value
in money of the shares of stock sold, bartered, exchanged or otherwise disposed.

Up to 25%: 4%
Above 25% up to 3313%: 2%
Above 3313%: 1%

A closely held corporation means any corporation at least 50% in value of outstanding capital stock
or at least 50% of the total combined voting power of all classes of stock entitled to vote is owned
directly or indirectly by or for not more than 20 individuals.

The total IPO Tax is arrived at after separately computing the IPO Tax for primary and secondary
offerings. The IPO Tax for the Firm Offer Shares, if applicable, shall be paid by the Company.

Sale, Exchange or Disposition of Shares after the IPO

Capital Gains Tax, If Sale Was Made outside the PSE

Unless an applicable treaty exempts such gains from tax or provides for preferential rates, the net
capital gains realized by a resident or non-resident (other than a dealer in securities) during each
taxable year from the sale, exchange or disposition of shares of stock outside the facilities of the PSE,
are subject to capital gains tax of five percent (5%) on gains up to 100,000 and ten percent (10%) on
gains in excess of 100,000. An application for tax treaty relief must be filed (and approved) by the
Philippine tax authorities to obtain an exemption or preferential tax rate under a tax treaty.

The transfer of shares shall not be recorded in the books of a company, unless the BIR certifies that
the capital gains and documentary stamp taxes relating to the sale or transfer have been paid, or where
applicable, a tax treaty relief has been confirmed by the International Tax Affairs Division of the BIR or
other conditions have been met.

When availing of capital gains tax exemption on the sale of shares of stock under a tax treaty, a tax
treaty exemption ruling shall be necessary in order to completely implement the transfer. For sale of
shares made outside the PSE, a CAR from the BIR is required before the transfer is registered in the
stock and transfer book. The BIR issues the CAR only after verifying that the applicable taxes have
been paid. Thus, in lieu of proof of payment of capital gains tax, the tax treaty relief ruling should be
submitted to the BIR office processing the CAR.

Taxes on Transfer of Shares Listed and Traded at the PSE

Unless an applicable treaty exempts the sale from income and/or percentage tax, a sale or other
disposition of shares of stock through the facilities of the PSE by a resident or a non -resident
shareholder (other than a dealer in securities) is subject to a stock transaction tax at the rate of 0.5%
of the gross selling price or gross value in money of the shares of stock sold or otherwise disposed.
This tax is required to be collected by and paid to the Government by the selling stockbroker on behalf
of his client. The stock transaction tax is classified as a percentage tax in lieu of a capital gains tax.
Under certain tax treaties, the exemptions from capital gains tax discussed herein may not be applicable
to stock transaction tax.

In addition, a VAT of 12% is imposed on the commission earned by the PSE -registered broker, and is
generally passed on to the client.

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Documentary Stamp Tax

The Philippines imposes a documentary stamp tax, or DST, on the issuance by a corporation of shares
at the rate of 1.00 on each 200, or fraction thereof, of the par value of the shares. The DST on the
issuance of the Offer Shares shall be paid by the Company.

The Philippines also imposes a DST upon transfers of shares of stock issued by a Philippine
corporation at a rate of 0.75 on each 200, or fractional part thereof, of the par value of the shares.

The DST is imposed on the person making, signing, issuing, accepting or transferring the document
and is thus payable by the vendor or the purchaser of the shares.

However, the sale, barter or exchange of shares of stock listed and t raded through the PSE are exempt
from DST.

In addition, the borrowing and lending of securities executed under the securities borrowing and
lending program of a registered exchange, or in accordance with regulations prescribed by the
appropriate regulatory authority, are likewise exempt from documentary stamp tax. However, the
securities borrowing and lending agreement should be duly covered by a master securities borrowing
and lending agreement acceptable to the appropriate regulatory authority, and shoul d be duly
registered and approved by the BIR.

Estate and Gift Taxes

The transfer of the Shares upon the death of a registered holder to his heirs by way of succession,
whether such an individual was a citizen of the Philippines or an alien, regardless of residence, will be
subject to Philippine estate tax at progressive rates ranging from five percent (5%) to 20% if the net
estate is over 200,000. Individuals, whether or not citizens or residents of the Philippines, who
transfer shares by way of gift or donation will be liable for the tax of the Philippine donor on such
transfers at progressive rates ranging from two (2%) to 15% if the net gifts made during the year
exceed 100,000. The rate of tax with respect to net gifts made to a stranger (one who is not a brother,
sister, spouse, ancestor, lineal descendant or relative by consanguinity within the fourth degree of
relationship) is a flat rate of 30%. Corporate registered holders are also liable for the tax of the
Philippine donor on such transfers, but the rate of tax with respect to net gifts made by corporat e
registered holders is always at a flat rate of 30%.

Estate and gift taxes will not be collected in respect of intangible personal property (i) if the deceased
at the time of death, or the donor at the time of donation, was a citizen and resident of a foreign country
which at the time of his death or donation did not impose a transfer tax of any character in respect of
intangible personal property of citizens of the Philippines not residing in that foreign country, or (ii) if
the laws of the foreign country of which the deceased or the donor was a citizen and resident at the
time of his death or donation allow a similar exemption from transfer or death taxes of every character
or description in respect of intangible personal property owned by citizens of the Philippines not
residing in that foreign country.

122
Plan of Distribution
The Company is offering 500,000,000 Offer Shares at the Offer Price to the general public including
institutional investors and high net worth individuals, through the Joint Lead Underwriters. In the event
that there are Offer Shares that remain unsubscribed, the Joint Lead Underwriters shall subscribe to
the balance pursuant to the terms and conditions of the Underwriting Agreement to be executed
between the Company and the Joint Lead Underwriters.

The Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners will receive issue
management, underwriting and selling fees from the Company based on a percentage of the
gross proceeds from the sale of the Offer Shares. Amounts to be paid to the PSE Trading Participants
and to any participating underwriter are included in these fees, where applicable. All reasonable
out-of-pocket expenses to be incurred by the Joint Issue Managers, Joint Lead Underwriters and Joint
Bookrunners in connection with the Offer shall be for the account of Company.

Underwriting Commitment

The Firm Offer is being underwritten at the Offer Price pursuant to the terms and conditions of the
Underwriting Agreement between the Company and the Joint Lead Underwriters to be executed
before the commencement of the Offer. In accordance with this agreement, the Joint Lead
Underwriters commits, on a firm basis, to subscribe for, or proc ure subscribers for, or to purchase,
or to procure purchasers for the [500,000,000] Firm Shares to be offered. The Underwriting
Agreement will be subject to certain conditions and is subject to termination by the Joint Lead
Underwriters if certain circumstances, including force majeure, occur on or before the time at which
the Common Shares, including the Firm Shares, are listed on the PSE. In addition, this agreement is
conditional, inter alia, on the Firm Shares being listed on the PSE on the Listing Date or such date as
the Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners may determine.

The names of each of the Joint Bookrunners and number of Firm subscribed by each are as set out
below:

Number of Firm % of Firm

Shares Shares

China Bank Capital 166,666,600.00 33.33%

PNB Capital . 166,666,700.00 33.33%

SB Capital. 166,666,700.00 33.33%

TOTAL 500,000,000.00 100.00%

The foregoing table does not reflect the exercise of the Over-allotment Option as described below

The terms and conditions of the Underwriting Agreement are expected to include an agreement by the
Company, inter alia, to indemnify the Joint Lead Underwriters in respect of any breach of warranty by
the Company contained therein.

Allocation to the Trading Participants of the PSE and the Local Small Investor Program

In accordance with the rules of the PSE, the Company shall allocate [100,000,000] Firm Shares
comprising approximately 20% of the Offer for distribution among the PSE Trading Participants. Th e
total number of Firm Shares offered to the PSE Trading Participants will be distributed following the
procedures indicated in the implementing guidelines for the Firm Shares to be distributed by the PSE.

The PSE Trading Participants may be allowed to subscribe for their dealer accounts provided that,
should they sell the Firm Shares to clients during the Offer period, it must be at a price not higher than
the Offer Price per share. Further, the PSE Trading Participants may not sell the Firm Shares during
the period between the Offer Period and the Listing Date.

123
PSE Trading Participants who take up the Firm Shares shall be entitled to a selling fee of one percent
(1%) of the Firm Shares taken up and purchased by the relevant PSE Trading Participant. The selling
fee, less a withholding tax of ten percent (10%), will be paid to the PSE Trading Participants within five
(5) banking days after the Listing Date.

In addition, ten percent (10%) of the Firm Offer or a total of [50,000,000] Firm Shares will be allocated
to LSIs, defined as a subscriber to the Offer who is willing to subscribe to a maximum of [] Firm
Shares under the Local Small Investor Program. A system of balloting will be utilized by the Joint Lead
Underwriters and Joint Bookrunners should the total demand for the Firm Shares in the Local Small
Investor Program exceed the maximum allocation.

Any Firm Shares not taken up by the PSE Trading Participants and the LSIs pursuant to their
respective allocation shall be distributed by the Joint Lead Underwriters, together with the syndicate
of participating underwriters it may organize, to their clients or the general public in the Philippines
prior to the closing of the Offer. Any remaining Firm Shares not taken up after these measures shall
be purchased by the Joint Lead Underwriters.

The Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners

China Bank Capital Corporation, PNB Capital and Investment Corporation and SB Capital Investment
Corporation have been mandated as the Joint Issue Managers, Joint Lead Underwriters and Joint
Bookrunners for the Offer.

China Bank Capital Corporation (China Bank Capital), a subsidiary of China Banking Corporation
("China Bank"), provides a wide range of investment banking services to clients across different
sectors and industries. Its primary business is to help enterprises raise capital by arranging or
underwriting debt and equity transactions, such as project financing, loan syndications, bonds and
notes issuances, securitizations, initial and follow-on public offerings, and private equity placements.
China Bank Capital also advises clients on structuring, valuation, and execution of corporat e
transactions, including mergers, acquisitions, divestitures, and joint ventures. It was established and
licensed as an investment house in 2015 as the spin-off of China Bank's investment banking group,
which was organized in 2012.

PNB Capital and Investment Corporation (PNB Capital), an investment house was incorporated on
July 30, 1997 and commenced operations on October 8, 1997. It is a wholly -owned subsidiary of the
Philippine National Bank (PNB). As of December 31, 2015, it had an authorized and paid-up capital of
350.0 Million. Its principal business is providing investment banking services, namely: debt
underwriting (bonds, commercial papers), equity underwriting, private placements, loan s yndications
and financial advisory services. PNB Capital is authorized to buy and sell for its own account, securities
issued by private corporations and the government of the Philippines. As of December 31, 2015, total
assets of PNB Capital were at 722.5 Million while total capital was at 629.9 Million.

SB Capital Investment Corporation (SB Capital) is a Philippine corporation organized in October

1995 as a wholly-owned subsidiary of Security Bank Corporation. It obtained its license to operate as
an investment house in 1996 and is licensed by the SEC to engage in underwriting and distribution of
securities to the public. SB Capital provides a wide range of investment banking services including
financial advisory, underwriting of equity and debt securities, project finance, privatizations, mergers
and acquisitions, loan syndications and corporate advisory services. SB Capital is also involved in
equity trading through its wholly-owned stock brokerage subsidiary, SB Equities, Inc. Its senior
executives have extensive experience in the capital markets and were involved in a lead role in a
substantial number of major equity and debt issues, both locally and internationally.

The Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners have no ot her direct or
indirect interest in the Company or in any securities thereof, including options, warrants, or rights
thereto. Furthermore, they do not have any relationship with the Company other than as the Joint
Issue Managers, Joint Lead Underwriters and Joint Bookrunners for the Offer.

The Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners also have no direct
relations with the Company in terms of ownership by their respective major stockholders, and
have no rights to designate or nominate any member of the Board of the Company.

124
There is no contract or arrangement existing between or among the Company, the Joint Issue
Managers, Joint Lead Underwriters and Joint Bookrunners, or any other third party whereby the
Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners may return any unsold
securities from the Offer.

Underwriters Compensation

The Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners shall receive from the
Company issue management, underwriting and selling fees based on 2.50% of the gross proceeds of
the Offer, which shall be inclusive of amounts to be paid to the PSE Trading Participants [and co-
managers, if any].

All reasonable out-of-pocket expenses to be incurred by the Joint Issue Managers, Joint Lead
Underwriters, and Joint Bookrunners in connection with the Offer shall be for the account of Company.

THE OVER-ALLOTMENT OPTION

In connection with the Offer and, subject to the stabilization approval letter issued by the Philippine
SEC on [], the Selling Shareholder has granted the Stabilizing Agent, Philippine Equity Partners, Inc.,
acting for and on behalf of the Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners ,
an Over-allotment Option, exercisable in whole or in part to purchase the Optional Shares on the same
terms and conditions as the Firm Shares, as set forth herein, from time to time for a period which shall
not exceed 30 calendar days from and including the Listing Date.

In connection therewith, the Selling Shareholder has entered into a greenshoe agreement (the
Greenshoe Agreement) with the Stabilizing Agent to utilize up to an additional [75,000,000] Common
Shares, among others, to cover over-allocations. Any Common Shares that may be delivered to the
Stabilizing Agent under the Greenshoe Agreement will be re-delivered to the Selling Shareholder
either through the purchase of Shares in the open market by the Stabilizing Agent in the conduct of
stabilization activities or through the exercise of the Over-allotment Option by the Stabilizing Agent.
The Optional Shares may be over-allotted and the Stabilizing Agent may affect price stabilization
transactions for a period beginning on or after the Listing Date, but extending no later than 30 days
from and including the Listing Date.

The Stabilizing Agent may purchase Shares in the open market only if the market price of the Shares
falls below the Offer Price. Initial stabilizing action shall be at a price no greater than the final Offer
Price. The price for the subsequent stabilization activities shall be as follows: (i) after the initial
stabilization action, and if there has not been an independent trade in the market at a higher price than
the initial stabilization trade, the subsequent trade shall be at or below the Offer Price or the initial
stabilizing price, whichever is lower; and (ii) after the initial stabilizing action, and if there has been an
independent trade in the market at a higher price than the initial stabilization trade, the subsequent
trade shall be at or below the lower of the Offer Price or the independent trade price. For this purpose,
independent trade shall mean any trade made by any person other than the Stabilizing Agent. Such
activities may stabilize, maintain or otherwise affect the market price of the Shares, which may have
the effect of preventing a decline in the market price of the Shares and may also cause the price of
the Shares to be higher than the price that otherwise would exist in the open market in the absence of
these transactions. If the Stabilizing Agent commences any of these transactions, it may discontinue
them at any time. Once the Over-allotment Option has been exercised and payment has been made
to the Selling Shareholder for the shares sold by the Stabilizing Agent, it will no longer be allowed to
purchase Shares in the open market for the conduct of stabilization activities. Any decisi on to terminate
the stabilization activities (and accordingly return shares and/or cash to the Selling Shareholder)
before the end of the 30-day stabilization period shall be subject to the mutual agreement among the
Stabilizing Agent, Joint Issue Managers, Joint Lead Underwriters and Joint Bookrunners and the
Company on behalf of the Selling Shareholder.

Any gain that may be realized by the Stabilizing Agent from its conduct of stabilization activities, net
of all transaction costs incurred, shall be shared by the [Joint Issue Managers, Joint Lead Underwriters
and Joint Bookrunners]. The Over-allotment Option, to the extent not fully exercised by the Stabilizing
Agent, shall be deemed cancelled and the relevant Optional Shares shall be re-delivered to the Selling

125
Shareholder.

As the Stabilizing Agent, [Philippine Equity Partners, Inc.] is authorized to conduct stabilization
activities in connection with the Offer and to perform such stabilization activities pursuant to the
Greenshoe Agreement between the Selling Shareholder and the Stabilizing Agent.

Lock-up

The PSE rules require existing shareholders owning at least ten percent (10%) of the outstanding
shares of a company not to sell, assign or in any manner dispose of their shares for a period of 180
days after the listing of the shares subscribed in the transaction. In addition, all Shares issued or
transferred within 180 days prior to the commencement of the Offer at an issue price less than the
price per Offer Share shall be subject to a lock-up period of at least 365 days from the dale that full
payment is made on such Shares.

Thus, the following shall be subject to such 180-day lock-up period:

Shareholder No. of Shares Subject to 180-da y

Lock-up Period
Ramon S. Ang 1,317,857,139 common shares

Far East Cement Corporation 3,085,714,283 common shares

The common shares of the foregoing shareholders are covered by the 365-day lock-up requirement:

Shareholder No. of Shares Subject to 365-da y

Lock-up Period
Luis A. Vera Cruz, Jr. 1 common share

Melinda Gonzales-Manto 1 common share

Manuel P. Daway* 1 common share

Ricardo C. Marquez* 1 common share

Martin S. Villarama, Jr.* 1 common share

Jose P. Perez* 1 common share

* Note: These directors were elected on Feb ruary 13, 2017 sub ject to the approval of the Securities and Exchange
Commission of the Corporations application to amend its Articles of Incorporation which includes increasing the
numb er of directors from seven (7) to eleven (11).

126
Legal Matters
Certain legal matters as to Philippine law relating to the Offer will be passed upon by Picazo Buyco
Tan Fider & Santos, the legal counsel of the Company, and SyCip Salazar Hernandez & Gatmaitan,
legal counsel to the Joint Issue Managers, Joint Lead Underwriters, and Joint Bookrunners.

Each of the foregoing legal counsel has neither shareholdings of the Company nor any right, whether
legally enforceable or not, to nominate persons or to subscribe for the securities of the Company .
None of the legal counsel will receive any direct or indirect interest in any securities thereof (including
options, warrants or rights thereto) pursuant to or in connection with the Offer.

127
Independent Auditors
For Years ended December 31, 2016 and 2015

Reyes Tacandong & Co., has audited the separate financial statements of the Company as at and for
the years ended December 31, 2016 and 2015 as well as audited the pro forma consolidated financial
statements of the Company as of and for the years ended December 31, 2016 and 2015 in accordanc e
with the PFRS.

Reyes Tacandong & Co. has acted as external auditor of the Company since 2015. Mr. Joseph C.
Bilangbilin is current audit partner of the Company and has served as such since 2015. The auditors
and the Company have not had any material disagreements on accounting and financial disclosures
with the current external auditors of the Company for the same periods or any subsequent interim
period. Reyes Tacandong & Co. has neither shareholdings in the Company nor any right, whether
legally enforceable or not, to nominate persons or to subscribe for the securities in the Company .
Reyes Tacandong & Co. will not receive any direct or indirect interest in the Company or in any
securities thereof (including options, warrants or rights thereto) pursuant to or in connection with the
Offer. The foregoing is in accordance with the Code of Ethics for Professional Accountants in the
Philippines set by the Board of Accountancy and approved by the Professional Regulation
Commission.

The following table sets out the aggregate fees billed for each of the last two (2) fiscal years for
professional services rendered by Reyes Tacandong & Co. excluding fees directly related to the Offer.
Reyes Tacandong & Co. does not provide other services that are not reasonably related to the
performance of the audit or review of the financial statements of the Company.

2016 2015
()
Audit and audit-related fees
Separate Financial Statements 1,200,000 800,000
Consolidated Financial Statements 700,000 -
Tax fees 400,000 -
All other fees [ 2, 300, 000] [ 800, 000]

Audit and Audited-Related Fees refer to the professional services rendered by Reyes Tacandong &
Co. for audit of the annual financial statements of the Company and services that are normally
provided in connection with statutory and regulatory filings for the said calendar years. The fees
presented above include out-of-pocket expenses incidental to the services of the Independent
Auditors.

For Years ended December 31, 2014

Isla Lipana & Co., has audited the separate financial statements of the Company as at and for the
year ended December 31, 2014 in accordance with PFRS.

Isla Lipana & Co. has acted as external auditor of the Company from [] to 2014. [] was the audit
partner of the Company in 2014. The auditors and the Company have not had any material
disagreements on accounting and financial disclosures with the 2014 external auditors of the
Company for the same periods or any subsequent interim period. Isla Lipana & Co. has neither
shareholdings in the Company nor any right, whether legally enforceable or not, to nominate persons
or to subscribe for the securities in the Company. Isla Lipana & Co. will not receive any direct or indirect
interest in the Company or in any securities thereof (including options, warrants or rights thereto)
pursuant to or in connection with the Offer. The foregoing is in accordance with the Code of Ethics for
Professional Accountants in the Philippines set by the Board of Account ancy and approved by the
Professional Regulation Commission.

The following table sets out the aggregate fees billed for 2014 for professional services rendered by

128
Isla Lipana & Co. excluding fees directly related to the Offer. Isla Lipana & Co. does not provide other
services that are not reasonably related to the performance of the audit or review of the financial
statements of the Company.

2014

Audit and audit-related fees

Separate Financial Statements [900,000.00]
Consolidated Financial Statements
Tax fees ...................................................................................

All other fees [ 900, 000. 00]

Audit and Audited-Related Fees refer to the professional services rendered by Isla Lipana & Co. for
audit of the annual financial statements of the Company and services that are normally provided in
connection with statutory and regulatory filings for the said calendar years. The fees presented above
include out-of-pocket expenses incidental to the services of the Independent Auditors.

In relation to the audit of the pro forma consolidated financial statements of the Company, the Manual
of the Company provides that the Audit Committee shall, among other activities (i) evaluate significant
issues reported by the external auditors in relation to the adequacy, efficiency and effectiveness of
policies, controls, processes and activities of the Company; (ii) ensure that other non-audit work
provided by the external auditors is not in conflict with their functions as external auditors; and (iii)
ensure the compliance of the Company with acceptable auditing and accounting standards and
regulations.

129
Appendix

A. 2016 Audited Consolidated Financial Statements of the Company .

B. 2015 Audited Consolidated Financial Statements of the Company.

C. List of Properties of the Company.

130
 REGISTERED HEAD OFFICE AND
PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY

Eagle Cement Corporation

No. 153 Epifanio Delos Santos Avenue,
Brgy. Wack- Wack, Mandaluyong City
Philippines

JOINT ISSUE MANAGERS, JOINT LEAD UNDERWRITERS AND JOINT BOOKRUNNERS

(in alphabetical order)

China Bank Capital PNB Capital and Investment SB Capital Investment

Corporation
9th Floor, China Bank Building
8745 Paseo de Roxas corner
Villar Street, Makati City
Philippines 1226
Corporation Corporation
9th Floor, PNB Financial 18th Floor, Security Bank
Center Centre 6776 Ayala Avenue,
Pres. Diosdado Macapagal Makati City, Philippines
Blvd., Pasay City

LEGAL COUNSELS

To the Company To the Joint Issue Managers, Joint Lead

Underwriters and Joint Book runners

Picazo, Buyco, Tan, Fider & Santos SyCip Salazar Hernandez & Gatmaitan
18th, 19th, and 17th Floors, Liberty Center SyCip Law Center
104 H.V. Dela Costa St., Salcedo Village 105 Paseo de Roxas, Makati City
Makati City, Philippines 1227 Philippines 1226

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Reyes, Tacandong and Co.

26th Floor, Citibank Tower
8741 Paseo de Roxas,
Makati City, Philippines 1226

131