91

ANNEX C

2015 Audited Financial Statements (Petron & Subsidiaries)

ANNEX “C”

G('r 'ER SHEETfor

AUDITED FINANGIAL STATEMENTS

C O M P A N Y N A M E

$EG Registration Number

J I I 7

P E T R o N c o R P o R A T I o N A N D

S U B s I D I A R I E S

PRINCIPAL OFFIGE ( l{o. / Street / Barangay I Clty ITown / Province)

S M C H e a d o f f C o m p I e x

A 0 S a n M I u e A e n u e

M a n d a I u ! o n o C I t v

C O M P A N Y I N F O R M A T I O N

No. of Stockholders

149.595as of December 31. 2015

Gompany's Telephone Number/sGompany's email Address Mobile Number

llay 17,2016

GONTACT PERSON INFORMATION

The designated contact percon MIIST be an Officer of the Gorporation

Name of Gontact Person

Dennis S. Janson

Email Address

dsjanson@petron.com

GONTAGT PERSON's ADDRESS

SMC Head Office Complex,40 San Miguel Avenue, Mandaluyong City

ltu 1t h e of H1 efird*xt r &bt d dtu d te dtu @ a a& po1 dt hx*H # b tryd b lle

conix*n wfrit W @) # &p tun tE etae Upaf wilt hMftn ad affi affi ffi d te tE',rr affi pgt

@.2 A, M 11151' b pWry ad cornpts'Uy tUq. F*re b & e H ae t E +y n tftng lfe apatrm9 rwe wilt

ilefunris*nadetot+ertdl&(bof lffidsr*s.@,mt+w#tdtblbdm*tx*sHnotwtearct*nfiontffigtubehxz1s.

R.G. Manabat & Co.The KPMG Center, 9/F6787 Ayala Avenue

Telephone +63 i2) 885 7000Fax +63 (2) 894 1985Internet www.kpmg.com.ph

Makat i Ci ty 1226, Merro Mani la, Phi l ippines E-Mai l ph- inquiry@kpmg.com

Branches: Subic Cebu . Bacolod . l lo i lo

REPORT OF INDEPENDENT AUDITORS ONSUPPLEMENTARY INFORMATION

The Board of Directors and StockholdersPetron CorporationSMC Head Office Complex40 San Miguel AvenueMandaluyong City

We have audited, in accordance with Philippine Standards on Auditing, the consolidated financialstatements of Petron Corporation (the "Company") and Subsidiaries (the "Group") as atDecember 31 , 2015 and 2014 and for each of the three years in the period ended December 3 I ,2015, and have issued our report thereon dated March 15,2016.

Our audits were made for the purpose of forming an opinion on the consolidated financialstatements of the Group taken as a whole. The supplementary information included in thefollowing accompanying additional components is the responsibility of the Company'smanagement.

. Supplementary Schedules of Annex 68-E

. Map of the Conglomerate' Schedule of Philippine FinancialReporting Standards and Interpretations

This supplementary information is presented for purposes of complying with the SecuritiesRegulation Code Rule 68, As Amended, and is not a required part of the consolidated financialstatements. Such supplementary information has been subjected to the auditing proceduresapplied in the audits of the consolidated financial statements and, in our opinion, is fairly stated,in all material respects, in relation to the consolidated financial statements taken as a whole.

R.G. MANABAT & CO.

*^qDARWIN P. VIROCELPartnerCPA License No. 0094495SEC Accreditation No. 1386-4, Group A, valid until February 5,2017Tax Identification No. 912-535-864BIR. Accreditation No. 08-00 I 9 87 -3 | -20 13Issued Decernber 2,20131, valid until December 1,2016

PTRNo.532l5 l5MDIssued January 4,2016 at Makati City

March 15,2016Makati Citv. Metro Manila

R.G. Manabat & Co., a Phrlppine partnership and a me mber f i fm of the KPN,4G PRC-BOA Regrstrat ion No. 0003, va|d u ntr l Decembe r 3 I , 20 1 6n e t w o r k o J t n d e p e n d e n t f i r m s a l f r l i a t e d w i t h K P N y ' G l n t e r n a t r o n a l C o o p e r a t t v e S E C A c c r e d r t a t r o o N o . 0 0 0 4 - F R 4 . G r o u p A , v a l t d u n t l N o v e m b e r l O . 2 0 j T( 'KP[4G Internat]onal ' ) , a Swrss ent i ty. KPMG Internatronal provides no c|ent lC Accredrtat ion No. F-2014101 4-R, val id unt i l August 26, 201 7setulces. No member f rm has any authorty to obl igate or brnd KPlvlG BS P Accred i ted, Category A, va| |d untt l December 1 7, 20 1 7Internat ional or any other rember f rm vis-A-vis thrrd partes, nor does KPlvlGInternat ional have any such authori ty to obl igate or bind anv member l i rm. Al lr ights reseNed.

PETRON CORPORATION AND SUBSIDIARIESINDEX TO SUPPLEMENTARY SCHEDULES

DECEMBBR 31. 2OI5

Statement of Management's Responsibility for the Consolidated Financial Statements

Independent Auditor's Report on the SEC Supplementary SchedulesFiled Separately from the Consolidated Financial Statements

Supplementara Schedules to Consolidated Financial Statements

Supplementary Schedules of Annex 68 - EA. Financial AssetsB. Amounts Receivable from Directors, Officers, Employees, Related

Parties, and Principal Stockholders (Other than Related parties)C. Amounts Receivable and Payable from Related Parties which are

Eliminated during the Consolidation of Financial StatementsD. Goodwill and Other Intangible AssetsE. Long-term DebtF. Indebtedness to Related PartiesG. Guarantees of Securities of Other Issuers

Page No.

NA(a)NA(b)

r -2

J

4NA(c)NA

H. Capital Stock 5Map of the Conglomerate within which the Group belongs 6Schedule of Philippine Financial Reporting standards and Interpretations 7

@)Bolorr" ofAvaitabte-for-Sale Financial Assets and Fair Value Through Profit or Loss is less than 5% oftotalcurrent assets.

(b) Bolor"" ofaccount is less than I% ofthe total assets ofthe Group and no individually signi/icant advances overP 100,000.

(') Balance of account is less than 5% of total assets of the Group

Supplementary Schedule to Separate Financial Statements

Reconciliation of Parent Company's Retained Earnings Available for Dividend 8Declaration

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W

PETRON CORPORATION AND SUBSIDIARIES

i"giu"t:t:.i'Aiiirilffdrp,

Fromework for lhe Preporotion ond Presenlolion of FinonciolSfolemenlsConceptuol Fromework Phose A: Objectives ond quolilolivechorocteristics

PFRSs Prqclice Slolemenl Monqgemenf Commenlory

Philippine Finonciol Reporiing Slondords

PFRS I(Revised)

Firstiime Adoption of Philippine Finonciol ReportingStondords

Amendments to PFRS I ond PAS 27: Cost of onInvestmenl in o Subsidiory, Joinlly Controlled Entity orAssociote

Amendments to PFRS l: Additionol Exemotions forFirst-time Adopters

Amendment to PFRS l: Limited Exemotion fromComporotive PFRS 7 Disclosures for First-time Adopters

Amendments to PFRS I: Severe Hyperinflotion ondRemovol of Fixed Dote for First-time Adopters

Amendmenls to PFRS l: Government Loons

Annuol lmprovements to PFRSs 2009 -2011 Cycle: Firsttime Adoption of Philippine Finonciol ReportingStondords -Repeoled Applicotion of PFRS I

Annuol lmprovements lo PFRSs 2009 -2011 Cycle:Bonowing Cost Exemplion

Annuol lmprovements to PFRSs 2011 -2013 Cycle: PFRSversion thot o firstiime odopter con opply

PFRS 2 Shore-bosed Poymenl

Amendments fo PFRS 2: Vesting Conditions ondConcellotions

Amendments to PFRS 2: Group Cosh-settled Shore-bosed Poyment Tronsoclions

Annuol lmprovements to PFRSs 2010 -2012 Cycle:Meoning of 'vesting condition'

PFRS 3(Revised)

Business Combinotions

Annuol lmprovements to PFRSs 2010 -2012 Cycle:Clossificotion ond meosuremenl of continoentconsiderolion

Annuql lmprovements to PFRSs 201I -20,l3 Cycle:Scope exclusion for the formotion of jointorrongements

PFRS 4 Insuronce Conlrocts

Amendments to PAS 39 ond PFRS 4: FinqnciolGuorontee Controcts

PFRS 5 Non-current Assels Held for Sole ond DiscontinuedOperotions

Annuol lmprovements lo PFRSs 2012-20j4 Cycle:Chonges in method for disposol

PFRS 6 Explorotion for ond Evoluotion of Minerol Resources

Id{5lAbtri iGisrliNdlsil'sJi$#W WMYNffiEI ffi*g{; ; "Hor' ' . . ,

libbrctuit;PFRS 7 Finonciol lnstruments: Disclosures

Amendments lo PFRS 7: Trqnsil ion

Amendmenls to PAS 39 ond PFRS Z: Reclossificotion ofFinonciol Assets

Amendments to PAS 39 ond PFRS Z: Reclossificolion ofFinonciql Assets - Effective Dole ond Trqnsition

Amendments to PFRS 7: lmproving Disclosures oboulFinonciol lnstrumenls

Amendments to PFRS Z: Disclosures - Tronsfers ofFinonciol Assets

Amendments to PFRS 7: Disclosures -OffsettingFinqnciol Assels ond Finonciol Liobilities

Amendments to PFRS 7: Mondolory Effective Dote olPFRS 9 ond Tronsition Disclosures

Annuol lmprovemenls io PFRSs 2012-2014 Cycle:'Conlinuing involvement' for servicing controcts

Annuol fmprovements to PFRSs 2012-2014 Cycle:Offseiting disclosures in condensed interim finonciolstolements

PFRS 8 Operoting Segmenis

Annuol lmprovements to PFRSs 2010 -2012 Cycle:Disclosures on the oggregotion of operotingsegmenls

PFRS 9 Finonciol Inslrumenls

Hedge Accouniing ond omendments to PFRS g,PFRS 7 ond PAS 39

PFRS 9(2O14)

Finonciol Instruments

PFRS IO Consolidoted Finonciol Slotemenls

Amendments to PFRS 10, PFRS I l , ond PFRS l2:Consolidoted Finonciol Stotements, JoinlArrongements ond Disclosure of lnterests in OtherEntities: Tronsilion Guidonce

Amendments lo PFRS 10. PFRS 12, ond pAS 2Z (201l)Inveslmenl Enliiies

Amendments to PFRS l0 ond PAS 28: Sole orContribution of Assets between on Investor ond itsAssociote or Joint Venture

Amendments to PFRS 10, PFRS l2 ond pAS 28:lnvestment Entit ies: Applying the ConsolidotionExceolion

PFRS I I Joint Anongements

Amendments to PFRS I0, PFRS I I , ond pFRS l2:Consolidoled Finonciol Stolements. JointArrongements ond Disclosure of Inlerests in OtherEniities: Tronsilion Guidonce

Amendments to PFRS I l: Accounling for Acquisil ionsof Inlerests in Joint Operotions

si ffi#tl+xj5ffiPFRS 12 Disclosure of Interests in Other Enlities

Amendments lo PFRS 10, pFRS I l , ond pFRS t2:Consolidoted Finonciol Stotements. JoinlArrongements ond Disclosure of Interests in OtherEntit ies: Tronsition Guidonce

Amendments to PFRS 10, pFRS 12, qnd pAS 2Z {201 I )lnvestment Entities

Amendments to PFRS 10, PFRS l2 ond pAS 28:Investment Entil ies: Applying lhe ConsolidolionExceotion

PFRS I3 Foir Volue Meosuremenr

Annuol lmprovemenls 1o pFRSs 2010 -2012 Cycle:Meosuremenl of short-term receivqbles ond poyobles

Annuol lmprovements to PFRSs 2011 -2013 Cycle:Scope of porifolio exception

PFRS I4 Regulotory Defenol Accounts

Philippine Accounling Sfqndqrds

PAS I(Revised)

Presenlotion of Finonciol Slotements

Amendment 1o PAS l: Copitol Disclosures

Amendments to PAS 32 ond pAS |: puttoble FinonciolInstruments ond Obligotions Arising on Liquidotion

Amendments to PAS l: presentotion of ltems of OtherComprehensive lncome

Annuol lmprovements to pFRSs 2009 -2011 Cycle:Presentotion of Finonciol Stotements -ComooroliveInformolion beyond Minimum Requiremenls

Annuol lmprovements to pFRSs 2009 -20j 1 Cycle:Presentolion of the Opening Stotemenl of FinonciolPosition ond Reloted Noies

Amendmenls to PAS l: Disclosure Init iotive

PAS 2 lnvenlories

PAS 7 Stolement of Cosh Flows

PAS 8 Accounling Policies, Chonges in AccountingEslimotes ond Errors

PAS IO Events ofter the Reporting period

PAS I I Construclion Controcts

PAS 12 Income Toxes

Amendmeni to PAS l2 - Deferred Tox: Recovery ofUnderlying Assets

iffi ,tittg;PAS I6 Property, Plont ond Equipment

Annuol lmprovements to PFRSs 2009 -2011 Cycle:Property, Plont ond Equipment -Clossificotion ofServicing Equipmeni

Annuol lmprovemenls to PFRSs 2010 -2012 Cycle:Restolement of occumuloted depreciotion{omoriizotion) on revoluotion (Amendmenls lo pAS I6ond PAS 38)

Amendmenls to PAS l6 ond PAS 38: Clorif icotion ofAcceptoble Melhods of Depreciotion ondAmortizolion

Amendments to PAS 16 ond PAS 4l: Agriculture:Beorer Plonts

PAS I7 Leoses

PAS I8 Revenue

PAS I9(Amended)

Employee Benefils

Amendments to PAS l9: Defined Benefit plons:Employee Contributions

Annuol lmprovemenls to PFRSs 2012-2014 Cycle:Discouni roie in o regionol morket shoring lhe somecurrency -e.9. the Eurozone

PAS 20 Accounling for Governmenl Gronts ond Disclosure ofGovernment Assistonce

PAS 2I The Effects of Chonges in Foreign Exchonge Rotes

Amendment: Nei Inveslmenl in o Foreign Operotion

PAS 23(Revised)

Borrowing Cosls

PAS 24(Revised)

Reloled Porty Disclosures

Annuol lmprovements to PFRSs 2010 -2012 Cycle:Definilion of 'reloted porty'

PAS 26 Accounting ond Reporting by Retirement BenefiiPlons

PAS 27(Amended)

Seporote Finonciol Slotements

Amendmenls to PFRS I 0, PFRS 12, ond pAS 2Z (201 I )Inveslmenl Enlities

Amendments 1o PAS 27: Equity Method in SeporoleFinonciol Stotemenls

PAS 28(Amended)

Inveslmenls in Associoles ond Joinl Ventures

Amendmenls to PFRS 10 ond pAS 28: Sqle orContribution of Assets beiween on Inveslor ond itsAssociole or Joint Venture

Amendmenls to PFRS ,l0,

PFRS l2 ond pAS 2g:Inveslment Entit ies: Applying lhe ConsolidotionExceotion

PAS 29 Finonciol Reporting in Hyperinflotionory Economies

€i{.:1t4#W;e#$;,:;;::t::t'il#V!\3a;#.8,7:";!f . ffid .xlii;citvjnndtptddi

PAS 32 Finonciol Instrumenls: Disclosure ond presentotion

Amendments lo PAS 32 ond pAS l: puttoble FinonciolInstrumenls ond Obligotions Arising on Liquidotion

Amendmenl 1o PAS 32: Clossificolion of Rights lssues

Amendments 1o PAS 32: Offsetting Finonciol Assetsond Finonciol Liobililies

Annuol lmprovements to PFRSs 2009 -2011 Cycle:Finonciol Instrumenls Presentoiion -lncome ToxConsequences of Dislribulions

PAS 33 Eornings per Shore

PAS 34 Interim Finonciol Reporting

Annuol lmprovements to pFRSs 2009 -2011 Cycle:Interim Finonciol Reporting -Segment Assets ondLiobilities

Annuollmprovements fo PFRSs 20j2-2014 Cycle:Disclosure of informotion "elsewhere in the interimfinonciol reoort'

PAS 36 lmpoirment of Assets

Amendmenls to PAS 36: Recoveroble AmountDisclosures for Non-Finonciol Assets

PAS 37 Provisions, Contingent Liobilities ond ContingentAssels

PAS 38 Intongible Assets

Annuol lmprovements to PFRSs 20j0 -2012 Cycle:Resloiemenl of occumuloted depreciolion(omortizotion) on revoluolion (Amendments to pAS 16ond PAS 38)

Amendments io PAS l6 ond PAS 38: Clorif icotion ofAcceptoble Methods of Depreciolion ondAmortizotion

PAS 39 Finonciol Instruments: Recognition ond Meosuremenr

Amendments lo PAS 39: Tronsition ond Init iolRecognil ion of Finonciol Assets ond Finonciol Liobil it ies

Amendmenis to PAS 39: Cosh Flow HedgeAccounling of Forecosl Inlrogroup Tronsoctions

Amendmenls to PAS 39: The Foir Volue Ootion

Amendments lo PAS 39 ond PFRS 4: FinonciolGuoronlee Conlrocts

Amendments io PAS 39 ond PFRS 7: Reclossificolion ofFinonciol Assets

Amendmenls to PAS 39 ond PFRS Z: Reclqssificotion ofFinonciol Assets -Effective Dote ond Tronsition

Amendmenls to Phil ippine Inlerpreiolion IFRIC-9 qndPAS 39: Embedded Derivoiives

Amendment to PAS 39: Eligible Hedged ltems

Amendment to PAS 39: Novolion of Derivolives qnoConlinuolion of Hedge Accounling

. i i '*4.ryeltx'lt'

PAS 40 lnvestmenl Property

Annuol lmprovements to PFRSs 2011 -2013 Cycle:Inter-relolionship of PFRS 3 ond pAS 40 (Amendmentto PAS 40)

PAS 4I Agriculture

Amendmenls to PAS l6 ond PAS 4l: Agriculture:Beorer Plonts

Philippine lnlerprelolions

tFRtc I Chonges in Existing Decommissioning, Reslorotionond Similor Liobilities

tFRtc 2 Members'Shore in Co-operolive Entit ies ond Similorlnslruments

tFRlc 4 Delermining Whether on Anongement Contoins oLeoSe

IFR|C 5 Righis to Interesls orising from Decommissioning,Restorotion ond Environmenlol Rehobil i loi ion Funds

IFRIC 6 Liqbilities orising from Porticipoiing in o SpecificMorket - Wosle Electricol ond Electronic Equipmenl

tFRrc 7 Applying the Reslotement Approoch under pAS 2?Finonciol Reporting in Hyperinflotionory Economies

tFRtc I Reossessment of Embedded Derivolives

Amendments lo Phil ippine Inlerpretotion IFRIC-9 ondPAS 39: Embedded Derivotives

rFRtc l0 Inlerim Finonciol Reporting ond lmpoirmenl

tFRlc l2 Service Concession Arrongements

tFRtc l3 Customer Loyolty Progrommes

tFRtc l4 PAS l9 - The Limit on o Defined Benefit Assel, MinimumFunding Requirements ond their Inleroction

Amendmenls 1o Phil ippine Inlerpretotions IFRIC - 14,Prepoymenls of o Minimum Funding Requirement

rFRtc r6 Hedges of o Net Investmeni in o Foreign Operotion

tFRtc l7 Distributions of Non-cosh Assels to Owners

rFRlC l8 Tronsfers of Assels from Cusiomers

tFRrc l9 Exlinguishing Finonciol Liobililies with EquityInstruments

lFRrc 20 Stripping Costs in the Production Phose of o SurfqceMine

tFRlc 2 l Levies

stc-7 Introduclion of the Euro

,tttliti F"iitt6* "tCtirtd.fiiilit$doAffE";t{ifriiiisliF:t;'!'W.\"r:Y*l:..$;.lr#7.11::/iffi :W"il rffi ;itdi*s4

:8qpp!-icrsrc-10 Governmenl Assistonce - No Specific Relotion to

Operoting Aclivities

stc-15 Operoting Leoses - Incentives

stc-2s lncome Toxes - Chonges in the Tox Stotus of on Enlilyor its Shoreholders

src-27 Evoluoling the Subslonce of Tronsociions Involvingthe Legol Form of o Leose

stc-29 Service Concession Anongements: Disclosures.

src-31 Revenue - Borter Tronsoctions Involving AdvertisingServices

stc-32 Intongible Assets - Web Site Costs

Phllippine Inlerprelofions Commitfee Queslions qnd Anrwers

PIC Q&A2006-01

PAS 18, Appendix, porogroph 9 -Revenue recognitionfor soles of property unils under pre-completioncontrocts

PIC Q&A2006-o2

PAS 27..l0(d) -Clorif icotion of cri lerio for exemptionfrom presenting consolidoied finonciol stotemenls

PIC Q&A2007.01 -Revised

PAS LI03(o) -Bosis of preporolion of f inonciolstotements if on entity hos not opplied PFRSs in full

PIC Q&A2007-o2

PAS 20.24.37 ond PAS 39.43 - Accounting forgovernment loons wilh low interest rotes [see PICQ&A No.2OO8-021

PIC Q&A2007-o3

PAS 40.27 -Voluolion of bonk reol ond oiherproperties ocquired ( ROPA)

PIC Q&A2007-o4

PAS 101.7 -Applicotion of criterio for o quotifying NpAE

PIC Q&A2008-0r -Revised

PAS 19.78 -Role used in discounting post-employmentbenefit obligotions

PIC Q&A2008-02

PAS 20.43 -Accounling for governmenl loons wiih lowinterest rotes under lhe omendments lo pAS 20

PIC Q&A2009-01

Frqmework.23 ond PAS 1.23 -Finonciol stotementsprepored on o bosis other thon going concern

PIC Q&A2009-02

PAS 39.AGZl-72 -RoIe used in determining the foirvolue of government securit ies in lhe Phil ippines

PIC Q&A201 0-01

PAS 39.AGZl-72-Rote used in determining the foirvolue of government securil ies in the phil ippines

PIC Q&A20lo-o2

PAS I R.l 6 -Bosis of preporotion of f inonciol siotemenrs

PIC Q&A20r 0-03

PAS I Presentotion of Finonciol Stotements -Current/non-current clossificoiion of o colloble termroon

PAS l.l0(f) -Requiremenls for o Third Stotement o1Finonciql Position

PFRS 3.2 -Common Control Business Combinotions

Accounting for Inier-compony Loons

PAS 32.3/-38 -Costs of Public Offering of Shores

PFRS I .Dl -D8 -Foir Volue or Revoluoiion os DeemeoCost

PFRS 3, Business Combinotions (2008), ond pAS 40,Investment Properiy -Acquisit ion of Investmentproperties -osset ocquisition or business combinoiion?

PFRS 3.2 -Applicotion of the pooling of InlerestsMelhod for Business Combinotions of Entit ies UnqerCommon Control in Consolidoted FinonciolStotemenls

Cost of o New Building Constructed on ihe Site of oPrevious Building

Applicobil ity of SMEIG Finol e&As on lhe Applicolionof IFRS for SMEs to Phil ippine SMEs

Conforming Chonges to plC e&As - Cycle 20,l3

PAS I9 -Accounting for Employee Benefits under oDefined Contribution Plon subject to Requirements ofRepublic Act (RA) 7641 ,Ihe phitippine Retirement Low

R.G. Manabat & Co.The KPMG Center, 9/F6787 Ayala AvenueMakati City 1226,MelJo Manila, phi l ippines

Branches: Subic . Cebu . Bacolod . l loi lo

Telephone +63 (2) 885 7000Fax +63 (2) 894'1985Internet www.kpmg.com.phE-Mail ph-inquiry@kpmg.com

REPORT OF INDEPENDENT AUDITORSON SUPPLEMENTARY INFORMATION

The Board of Directors and StockholdersPetron CorporationSMC Head Office Complex40 San Miguel AvenueMandaluyong City

We have audited in accordance with Philippine Standards on Auditing, the separate financialstatements of Petron Corporation (the "Comp &fly"), which comprise the sepaiate statements offinancial position as at December 3 1 ,2015 and 2014, and the separate statements ofcomprehensive income, separate statements of changes in equity and separate statements of cashflows for the years then ended, and have issued our report thireon dated March lS, 2016.

Our audits were made for the purpose of forming an opinion on the separate financial statementstaken as a whole. The supplementary information included in the Reconciliation of RetainedEarnings Available for Dividend Declaration is the responsibility of the Company's management.This supplementary information is presented for purposes of complying withihe SecuritiesRegulation Code Rule 68, As Amended, and is not a required part of thi separate financialstatements. Such supplementary information has been subjected to the auditing proceduresapplied in the audits of the separate financial statements and, in our opinion, iJfairly stated, in allmaterial respects, in relation to the separate financial statements taken as a whole.

R.G. MANABAT & CO.

DARWTN P. VIROCELPartnerCPA License No. 0094495SEC Accreditation No. 1386-4, Group A, valid until February 5,2017Tax identification No. 912-535-864BIR Accreditation No. 08-001 98i -31-2013issued Decernber 2,20l3..val id unti l December 1,2016

PTR No. 5321515MDIssued Januar-v 4,2016 at Makati City

March 15,2016Makati City, Metro Manila

R.G. Manabat & Co., a Phi l pplne partnershrp and a member f i fm of the KPMGnetwork of independent f i rms afJi i rated with KpMG lnternattonal Coooeratrve( KPN4G Inte'nalonal ) . 6 Swrss e11ty. KpMG Internaltonat provtdes ro . t eqtseNtces. No member f i rm has any authori ty to obhgate or brnd KpfulGlnrernatonat or any other member frrm vis_A_vis thlrd panies, nor does KplvlGInternatonal have any such authori ty to obltgate or bind any member f i rm. Al lflgnts reseryed.

PRC-BOA Registraion No. 0003, vald unt i December 3.1, 20j6SEC Accreditat ion No. 0004-FR4, Group A, val id unri t November I O, 201 7lC Accreditat ion No. F,2014l014-R, val id unt i t August 26, 20t7BSP Accredted, Category A, val id untr l December 17, 2017

PETRON CORPORATIONSMC Head Office Complex 40 San Miguel Avenue, Mandaluyong CitySCHEDULE OF RECONCILIATION OF RETAINED EARNINGS

AVAILABLE FOR DIVIDEND DECLARATIONDecember 31, 2015

(Amounts in Thousand Pesos)

(Figares base on auditedfinancial stutements)

Unappropriated Retained Earnings, as adjusted toav ail ab I e for div idend d is tr ib ut ion, b e ginning

Add: Net income actually earned/realized during theperiod

Net incolne during the period closed to Retained Earnings P5,499,827

P5,428,025

Less: Non-actuaV unrealized income, net of tax:Adjustment due to deviation from PFRS/GAAP -

gainOther unrealized gains or adjustments to the

retained earnings as a result ofcertaintransactions accounted for under the PFRS

3,224

20,170Sub-total 5,476,433

Add: Non-actual losses, net of tax:Adjustment due to deviation from PFRS/GAAP -

loss 20,847Net income actually earned during the period 5,497,280 5,497,280

Add (Less):Dividend declarations during the period (1,114,822)Distributions paid (3,607,03 1)

(4,721,853\ (4,721,853\

TOTAL RBTAINED EARNINGS, ENDAVAILABLE FOR DTVIDEND P6,203,452

Discussion of the Company’s Key Performance Indicators:

Ratio

December 31, 2015

December 31, 2014

December 31, 2013

Current Ratio 0.9 1.1 1.0

Debt to Equity Ratio 2.8 2.7 2.4

Return on Equity (%) 6.4 2.7 5.4

Interest Rate Coverage Ratio 4.0 2.8 3.2

Assets to Equity Ratio 3.5 3.4 3.2

Current Ratio - Total current assets divided by total current liabilities. This ratio is a rough indication of a company's ability to service its current obligations. Generally, higher current ratio indicates greater ability of the company to pay currently maturing obligations. Debt to Equity Ratio - Total liabilities divided by tangible net worth. This ratio expresses the relationship between capital contributed by creditors and that contributed by owners. It expresses the degree of protection provided by the owners for the creditors. The higher the ratio, the greater the risk being assumed by creditors. A lower ratio generally indicates greater long-term financial safety. (Note: Tangible net worth is computed based on total equity attributable to Parent Company less any amount of goodwill). Return on Equity - Net income divided by average total stockholders’ equity. This ratio reveals how much profit a company earned in comparison to the total amount of shareholder equity fund in the statements of financial position. A business that has a high return on equity is more likely capable of generating cash internally. For the most part, the higher a company’s return on equity compared to its industry, the better. Interest Rate Coverage Ratio – EBITDA divided by interest expense and other financing charges. This ratio is used to assess the company’s financial stability by examining whether it is profitable enough to pay off its interest expenses. A ratio greater than 1 indicates that the company has more than enough interest coverage to pay off its interest expense. Assets to Equity Ratio – Total assets divided by total equity (including non-controlling interest). This ratio is used as a measure of financial leverage and long-term solvency. The function of the ratio is to determine the value of the total assets of the company less any portion of the assets that are owned by the shareholders of the corporation.