MINUTES OF THE ANNUAL MEETING OF THE STOCKHOLDERS OF FIRST PHILIPPINE HOLDINGS CORPORATION

HELD AT THE PSE AUDITORIUM, GROUND FLOOR, PSE CENTRE EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY

ON MAY 30, 2011

The annual meeting of the stockholders of First Philippine Holdings Corporation

(“Corporation”) was held at 3:00 p.m. on May 30, 2011 at the PSE Auditorium, Ground

Floor, PSE Centre, Exchange Road, Ortigas Center, Pasig City. The attendance of the

Board of Directors is provided below, to wit:

Present: Mr. Oscar M. Lopez Mr. Federico R. Lopez Mr. Manuel M. Lopez Mr. Augusto Almeda-Lopez Amb. Cesar B. Bautista Mr. Arthur A. De Guia Mr. Peter D. Garrucho, Jr. Mr. Oscar J. Hilado Mr. Elpidio L. Ibañez Mr. Eugenio L. Lopez III Chief Justice Artemio V. Panganiban Mr. Washington Z. Sycip Absent: Mr. Francis Giles B. Puno Mr. Ernesto B. Rufino, Jr. Mr. Juan B. Santos CALL TO ORDER

The meeting was called to order by Mr. Federico R. Lopez, Chairman of the

meeting. The minutes of the proceedings were recorded by Mr. Enrique I. Quiason,

Corporate Secretary.

PROOF OF NOTICE

The Secretary reported that notices of the annual meeting of the stockholders had

been sent to the stockholders of the Corporation. He had executed a certification to that

effect. The Chairman directed the Secretary to append the said certification together with a

copy of the notice to the minutes of the meeting.

DETERMINATION OF QUORUM/GROUND RULES

The Secretary reported that out of the 567,302,785 common shares issued and

outstanding, there were present either in person or represented by proxy 355,695,448 shares

2

of the common stock representing 62.70% of the outstanding common capital stock of the

Corporation. There being a quorum, the Chairman of the meeting declared the meeting

open for the transaction of business.

For fair, orderly, and efficient proceedings, the Corporate Secretary advised that the

following ground rules were going to be observed during the meeting:

(a) Each stockholder shall be allowed one (1) vote per share. In case of election of directors, a shareholder is allowed to cumulate his votes; (b) A stockholder who wishes to take the floor must identify himself and direct his question to the Chairman. If he is a holder of a proxy, he is to state this fact and the name of the stockholder who granted him the proxy. He must first be recognized by the Chairman before he can have the floor; (c) Questions or comments from the floor will be entertained subject to the following:

(i) Only questions or comments relevant to the particular item in the agenda being discussed will be allowed;

(ii) To give equal chance to everyone – a stockholder can ask one (1) question or give one (1) comment. If there are questions or comments which could not be entertained on the floor, a stockholder may submit its position in writing to the Office of the Corporate Secretary within five (5) days from today; (d) A stockholder shall be given, at most, two (2) minutes to ask a question or to discuss his comments; (e) Voting shall be by viva voce. The stock transfer agent shall assist in recording the votes. The Chairman may waive or allow exceptions to the foregoing rules if, in his judgment, he deems it necessary or proper under the circumstances. Any person who fails to follow the foregoing guidelines may be declared out of order and barred from further participation in the proceedings or escorted from the venue.

The Corporate Secretary reminded everyone to observe proper decorum and due courtesy during the meeting.

APPROVAL OF MINUTES OF PREVIOUS MEETING On motion made and seconded, the reading of the minutes of the Annual

Stockholders Meeting held last May 31, 2010, copies of which had earlier been circulated to

the stockholders, was dispensed with, and the minutes were approved as recorded.

3

THE CHAIRMAN’S REPORT

Mr. Federico R. Lopez, the Chairman & Chief Executive Officer, then rendered his

annual report, thus -

Good Afternoon Ladies and Gentlemen:

The year 2010 was a special one for me. As I assumed the mantle of leadership at First Philippine Holdings Corporation (FPH), I did so at a time when its finances were rock solid and our platform of businesses were enviably strong and raring for more growth. Of course, the last decade for FPH was not an easy one but I attribute the crucial shaping, pruning and forging of our current platform of businesses to the decisiveness of our Chairman Emeritus at critical junctures these last few years. We were admittedly in crisis, and it forced us to make difficult choices. But when those tough, painful decisions were taken to sell our controlling stakes in Meralco and Manila North Tollways Corporation (MNTC), we found that we closed a door but unlocked many new ones not previously open to us before.

Today, our businesses are less reliant on government‐regulated franchises but have more involvement in industries where we constantly have to compete for the attention of customers. In the power business, our sights are no longer just set on growing domestically but also now positioned to compete internationally in new markets where we can bring Energy Development Corporation's (EDC) geothermal expertise. Even many of our businesses that are located in the country like First Philec Solar and First Philippine Industrial Park for example, are in fact serving tough global customers with options to source their requirements anywhere in the world. Thus, quite a number of our businesses are already compelled to benchmark the products and services they offer against the best in the world if they want to prosper.

As we grow, we also seek to align our strategic goals with that of the

country. We have always believed that as a nation striving to be competitive, we must develop more clean and indigenous sources of energy. Today, all the power we produce at First Gen and its subsidiaries are from such sources and we will relentlessly continue to develop more. But we will also align our goals with that of the Filipino aspiring to go global and to bring our unique talents and expertise to that global arena. Amidst an international arena that’s already crowded with bigger rivals, we can only do that credibly if we bring something unique to the table. For the First Gen group of companies,

that means taking our “35‐year head start” in integrated geothermal power development expertise to new markets abroad that are clearly in search of

more indigenous, low‐carbon energy alternatives. At First Philec Solar, we are among the best producers of silicon

wafers for the growing solar photovoltaic industry. Today, we supply some

4

of the world's leading PV companies helping them to improve performance efficiencies and drive costs down towards their holy grail of grid parity.

At First Philippine Industrial Park, we are creating a platform to

attract firms to invest and locate their manufacturing businesses in the Philippines and make it easy for them to access the best resources our country has to offer.

At Rockwell Land, we will continue to raise the bar for real estate

development in the country. We know that this industry has many bigger,

better‐heeled players but what began as an opportunistic foray into a new industry for us has now turned into a strong brand synonymous with success

and high‐end quality. We will continue to build on that success profitably. Not all has gone well for our group of businesses last year. Our oil

products pipeline First Philippine Industrial Corp. had an unfortunate accident last year when a leak was discovered along a highly urbanized section of its pipeline in Barangay Bangkal, Makati. Although the ultimate liability is still to be established, we believe that it is our duty to ensure that public health and safety are not compromised and that the environment is protected. From the onset of the crisis, FPIC has always sought to act with integrity and “do the right thing.” We believe this is the only way a company emerges stronger from a crisis. Though it was an unfortunate accident no one wanted to happen, it’s a fact that an oil products pipeline such as FPIC remains the safest, most efficient way to transport oil products to the metropolis. Prior to shutdown, it was supplying close to 60% of the requirements of Metro Manila and surroundings; and takes on the role of more than 800 truck trips daily between the Batangas refinery to Pandacan oil depots in the heart of Manila at a fraction of the cost per liter. But to play that role effectively, it must also earn the public’s confidence that safety is not an issue. This we will do.

Taking all challenges in stride, it’s evident that the year indeed ushered in many new changes. In fact last year, the cover of our Annual Report was entitled “New Beginnings”. And as we celebrate our 50th year in 2011 and face this new beginning with anticipation and excitement, we also thought it fitting to start it with a new, fresh corporate logo that will hopefully convey our journey and vision for the next 50 years. Between now and June 30th you will be seeing a transition to our new emblem. Here is a peek into that new Logo (A video on the new logo was shown). There she is, I hope you like our new look!

Our new icon has us envision a green road through vibrant blue

oceans and leading towards a golden sunrise. We want the imagery to be a constant reminder that as we seek growth, we must plan to ingrain sustainability in the business models we choose; that in the spirit of the great explorers, we should incessantly be in search of new blue oceans, never forgetting that staying relevant means we are always watchful, ready and

5

willing to reinvent ourselves for a constantly changing world – a world of a million sunrises so to speak.

So on our 50th year, it’s a good time to take stock of where we will

take FPH in the next 50 years. Our Chairman Emeritus constantly reminds us to make sure we build an FPH that will last more than 400 years into the future. Does this sound like another impossible dream? Well, just last week,

he culminated a four‐day climb to the summit of Mt. Kinabalu, the highest peak in Southeast Asia. It was a climb that can physically and mentally challenge even the fittest of us weekend warriors. At my age two months shy of being 50, I consider it a personal achievement. But to witness your father, your Chairman Emeritus, brave the elements over four days, soldier on and scale such a mountain at the age of 81 was a most moving and inspiring experience. It is a poignant reminder to all of us that with the right preparation, focus and determination, nothing is impossible.

Today, we live in a country and in a world that’s badly in need of big

dreams. Dreams where every Filipino has the choice of developing and taking his unique talents global or finding employment locally without having to suffer the burden of separation from his or her family. Or the dream of every Filipino enjoying a quality of life commensurate with the best in the world. Or bigger still, is the dream of having a world no longer bound by the limits of fossil fuels. At FPH, over our next 50 years, we will not just dream about the kind of world we want, we will begin making that world now.

Thank you very much and Good afternoon.

THE PRESIDENT’S REPORT

Mr. Elpidio L. Ibañez, President & Chief Operating Officer of the Corporation, was

given the floor and rendered his report, thus -

Mr. Chairman Emeritus, Mr. Chairman, Fellow Shareholders, Good Afternoon,

A lot has happened in First Philippine Holdings in the past 36 months. We have endeavored to reduce our financial burden and regulatory vulnerability. 2010 reflects the culmination of our efforts.

In 2008, we sold our stake in the toll road business. In 2009 and 2010, we sold a total of 26.6% of our stake in Meralco. We received close to

₱48.5 billion from the disposition of these two major businesses. We used the cash to finance our growth in power generation, reduce our debt and provide attractive returns to you, our stockholders.

6

We chose to expand our power generation business, a less regulated but more competitive sector. Likewise, we increased our investments in solar wafer manufacturing and property development, businesses with big global and local players. We will have to compete with these strong players. But we have the organization; we have the people; and now we have the Balance Sheet.

Through the successful rights offering of First Gen, we purchased 1.4

billion of First Gen shares amounting to ₱10.0 billion.

Through First Philec, we have invested an additional ₱464 million ($10 million) in the solar wafer slicing business; and,

Back in 2009, we purchased Lopez Holdings’ 24.5% interest in

Rockwell Land for ₱1.5 billion, increasing our stake to 49%.

Aside from these investments, we improved our liquidity and return to shareholders:

1. The Parent company debt fell from ₱22.0 billion at the end of 2007

to ₱10.5 billion in 2010. The Parent’s cash balance as of December 31, 2010

was at ₱19.6 billion;

2. We have resumed paying our annual dividend of ₱2.00 per common

share while maintaining the payment of ₱8.72 per share to our preferred shareholders;

3. The company also initiated a ₱6.0 billion two-year share buyback program from July 2010 up to 2012. As of December 31, 2010, First Philippine Holdings had repurchased 25,689,440 common shares at an

average price of ₱63.10/share for a total consideration of ₱1.6 billion. By end April 2011, we have bought back 33,391,150 shares at a total cost of

₱2.1 billion.

Over the past five years, we have utilized over ₱6.0 billion for dividend payments and share re-purchases.

These steps shaped our attractive operating results. First Philippine

Holdings’ bottom line leaped 117% to ₱28.4 billion after we recognized record gains from the sale of our investment in Meralco. Earnings

attributable to Parent grew 185% to ₱24.9 billion. Aside from the non-recurring gain, the power generation, the residential property development and the manufacturing businesses, all posted earnings growth:

First Gen reported a strong year as its net income amounted to

$121.0 million (₱5.5 billion), 27% higher compared to the past year. Its net

income attributable to parent reached $70.2 million (₱3.2 billion),

7

significantly higher than the $16.8 million (₱800 million) reported in 2009. The growth was driven by higher earnings posted by EDC, First Gas Power Corp. and FG Hydro and lower finance costs.

Rockwell Land registered a 26% growth in its net income to ₱801.3 million due to construction developments in One Rockwell and higher contributions of new projects – Edades and The Grove.

First Philec, likewise, reported significant growth. Earnings

attributable to Parent reached ₱160 million this year from ₱55 million last year, reflecting the robust performance of First Philec Solar Corp. (First Solar), its wafer slicing business, now on its second year of operation. First

Solar posted a net income of $4.4 million (₱201.0 million) from $336.1

thousand (₱16.1 million) last year.

Our other businesses, however, did not fare as well.

First Balfour posted a net income of ₱35.8 million, down from

₱138.2 million in 2009, due to the absence of major projects.

First Philippine Industrial Park (FPIP) failed to equal the previous year’s record-breaking results with its net income showing a significant

downturn (57%) to ₱312.3 million in 2010 compared to ₱726.5 million in 2009.

First Philippine Industrial Corp. (FPIC)’s operating results suffered due to the shutdown of its operations from October 2010, when a leak was discovered along its pipeline. As of December 31, 2010 FPIC’s net loss

amounted to ₱45.6 million. In 2010, it recognized provisions totaling ₱274 million representing the estimated cost for engineering and rehabilitation works and, by way of contingency, for any damages which have yet to be established, subject to the company’s rights and defenses.

Despite this unfortunate incident, we have made progress in other areas: On power generation:

- First Gen remains committed to cultivating its investment in EDC by focusing on operational and financial performance: EDC has embarked on a

₱6.8 billion capital expenditure program for 2011 to achieve optimum availability and reliability for all of its operating steam fields and power generating assets; and, it has re-denominated its loan portfolio into Philippine pesos, reducing its exposure to foreign exchange movements.

- In line with its debt reduction program, First Gen fully paid their

₱5.0 billion peso bonds on July 30, 2010. The bonds were issued on June 24, 2005 at an effective interest rate of 12.03%.

8

On Property Development:

- Rockwell Land continues to capitalize on the healthy demand in the high end market. It will soon launch the next two towers of The Grove. On Manufacturing:

- We have bolstered our manufacturing portfolio with additional investments throughout 2010. Through First Philec, we have invested an

additional ₱464 million ($10 million) in the solar wafer slicing business. We remain bullish on the long-term growth of our manufacturing sector. In fact, First Philec just signed a joint venture agreement with Nexolon of Korea to put up a 400 megawatt solar wafer slicing facility in our industrial park in Batangas, which is expected to commence operation in the third quarter of 2011.

As we pursue growth in our power generation, property and manufacturing businesses, our recurring earnings will be negatively affected in the short term: (1) We have discontinued recognizing equity in net earnings from our Meralco shares; (2) EDC will forego revenues and incur higher operating expenses as it undertakes the augmentation and rehabilitation of some of its geothermal steam fields and power plants to achieve optimal performance levels; and, (3) our pipeline remains shut down until we can assure the authorities and ourselves that we can operate it safely. Results for first quarter 2011

Total net income for the first quarter of 2011 amounted to ₱1.4

billion, while the net income attributable to Parent was at ₱567 million. Last

year’s net income attributable to Parent amounted to ₱24.6 billion on

account of the ₱23.6 billion gain on sale of the Meralco shares.

First Philippine Holdings is celebrating its 50th anniversary in 2011. We intend to be a major contributor to the country’s growth in the next 50 years, and hopefully beyond. And this is why we are prepared to sacrifice short-term revenues and profits for longer-term value creation. We are strategic players, and we are in this for the long haul.

Thank you and good afternoon.

9

PRESENTATION & APPROVAL OF THE MANAGEMENT REPORTS AND RATIFICATION OF THE BOARD APPROVAL OF THE AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2010 The Chairman said that copies of the management report, which include the audited

financial statements for the calendar year ending December 31, 2010, were distributed to the

stockholders prior to the meeting. He explained that the Board of Directors approved the

audited financial statements last April 7, 2011. The Chairman inquired whether there were

questions from the floor.

As there were no other questions raised, the stockholders, on motion made and duly

seconded, unanimously -

“RESOLVED, That the Board approval of the Audited Financial Statements of the Corporation for the period ended December 31, 2010, be, as the same hereby is, confirmed, approved and ratified, and that the management reports for the period ended December 31, 2010, be, as they are hereby, approved.”

RATIFICATION OF THE ACTS OF THE BOARD, THE EXECUTIVE COMMITTEE AND OF THE MANAGEMENT OF THE CORPORATION On motion made and duly seconded, the following resolution was unanimously

approved by the stockholders:

“RESOLVED, That all resolutions and acts of the Board of Directors and the Executive Committee as well as the acts and contracts entered into by the Management of the Corporation during the calendar year ended December 31, 2010 and up to the date of the meeting, and the Chairman and President’s Reports, be, as they are hereby, confirmed, ratified and approved.”

ELECTION OF DIRECTORS The Secretary informed the Chairman that, according to Article II, Section 3 of the

By-Laws, nominations for the election of Directors by the stockholders shall be submitted in

writing to the nomination and election Committee at least sixty (60) days before the

scheduled date of the annual stockholders meeting. Nominations and elections of

independent directors must also comply with Circular No. 16 of the Securities and Exchange

Commission. The Board, as recommended by the Nomination & Election Committee,

10

received within the said period nominations in favor of the following stockholders as

Directors of the Corporation for the ensuing year:

Mr. Augusto Almeda-Lopez Ambassador Cesar B. Bautista

Mr. Arthur A. De Guia Mr. Peter D. Garrucho, Jr.

Mr. Oscar J. Hilado Mr. Elpidio L. Ibañez

Mr. Eugenio L. Lopez III Mr. Federico R. Lopez Mr. Manuel M. Lopez Mr. Oscar M. Lopez

Chief Justice Artemio V. Panganiban Mr. Francis Giles B. Puno

Mr. Juan B. Santos Mr. Ernesto B. Rufino, Jr. Mr. Washington Z. Sycip.

It was advised that the Board of Directors, in its regular meeting on March 3, 2011,

reviewed and favorably passed upon the qualifications and eligibility of the stockholders

nominated as Directors for the ensuing year in accordance with the By-Laws and the

Company’s Manual on Corporate Governance. Ambassador Cesar B. Bautista, Mr. Oscar J.

Hilado, Chief Justice Artemio V. Panganiban, Mr. Juan B. Santos and Mr. Washington Z.

Sycip are being nominated as independent directors. With respect to the proxies, each

director received at least 96.93% of the votes. The votes will be made part of the records.

It was duly moved and seconded that the fifteen stockholders who were nominated

as directors for the ensuing year be declared elected as Directors for the fifteen board seats

of the Corporation.

There being no objection, the Chairman directed the Secretary to cast the relevant

votes in favor of the following stockholders duly nominated as Directors of First Philippine

Holdings Corporation for the ensuing year and until their successors shall have been duly

elected and shall have qualified:

Mr. Augusto Almeda-Lopez Ambassador Cesar B. Bautista

Mr. Arthur A. De Guia Mr. Peter D. Garrucho, Jr.

Mr. Oscar J. Hilado Mr. Elpidio L. Ibañez

Mr. Eugenio L. Lopez III Mr. Federico R. Lopez Mr. Manuel M. Lopez Mr. Oscar M. Lopez

11

Chief Justice Artemio V. Panganiban Mr. Francis Giles B. Puno

Mr. Juan B. Santos Mr. Ernesto B. Rufino, Jr. Mr. Washington Z. Sycip.

The Chairman instructed the Secretary to note those proxies which gave particular

votes to certain nominees. It was also noted that Ambassador Cesar B. Bautista, Mr. Oscar

J. Hilado, Chief Justice Artemio V. Panganiban, Mr. Juan B. Santos and Mr. Washington Z.

Sycip were duly elected as independent directors. APPOINTMENT OF EXTERNAL AUDITORS On motion duly made and seconded, the stockholders ratified the Board approval to

retain Sycip, Gorres, Velayo and Co., Certified Public Accountants, as the Corporation’s

external auditors for the ensuing year.

OTHER BUSINESS

Mr. Guillermo Gili, a stockholder, congratulated the management and staff of FPH

on the corporation’s performance. In 2011, he asked if the company can equal the net

income of P28.37 billion registered in 2010. Mr. Ibañez replied that he does not think this is

possible because the income last year was primarily because of the gain on the sale of

Meralco shares and the company only has 6.6% left and as of now it intends to keep the

6.6% equity ownership. Management thinks that it will not have extraordinary income for

this year.

Mr. Eddie Dulalia, a stockholder, congratulated the Board of Directors, the

management of First Holdings that in spite of the economic, political and international

crises, there was net income of more than P28 billion. He remarked that this is good

management. He proposed that FPH expand its operations. He also proposed increasing

the company’s ownership in Meralco.

Mr. Jonas Cabiling, asked why the venue of the meeting was held at the PSE

Auditorium and not at the Meralco Theater. He also said that he is a resident of Brgy.

Bangkal in Makati. He said he and his fellow residents used to live peacefully and quietly

until the FPIC leak incident. He asked when the cleaning operation will end in this area.

12

The Chairman, in reply, said that with regard to the move from Meralco to the PSE

Auditorium, since Meralco has its new major owner, the company thought of giving due

courtesy of not having the annual stockholders meeting there and symbolically it is

important for FPH.

The Chairman called Mr. Anthony Mabasa, President of FPIC, to share the progress

on FPIC.

Mr. Mabasa said that FPIC would like to focus on the remediation or environmental

cleanup. Fortunately, for FPIC and for all the shareholders, the leak somehow was

contained to within a footprint of about 1.6 hectares. He said that most of the product is

under the Osmeña Avenue and the service road immediately beside it. The company is

currently pumping out pure product and has engaged an American specialist, a full

engineering services company, CH2M Hill, which specializes in contamination and

environmental cleanup. He said that FPIC employs and will employ advanced technology

for the cleanup. FPIC has ordered the equipment that will arrive in September which will

ramp up and enable it to accelerate the cleanup and bring down to reasonable levels the

contamination. The cleanup will take anywhere from three to four years. On the West

Tower residents, FPIC was unfortunately prevented by the homeowners association to

immediately get into the building and get to the basement which is actually the source of the

foul odor in the area. It was only the last couple of weeks that FPIC was allowed to get in so

it has just started the cleanup.

Mr. Jose Ong, a stockholder, inquired on the retained earnings as of March 31, 2011.

He asked if these are considered unrestricted. Mr. Ibañez replied that the retained earnings

are unrestricted but not all are dividendable. He asked the auditor to explain. Mr. Gemilio

San Pedro, the partner-in-charge from SyCip Gorres Velayo & Co., said that the financial

statements that the stockholders are looking at is a consolidated financial statement and

includes earnings by the subsidiaries. Retained earnings become dividendable if the

subsidiaries have declared this as dividend to the parent. Then the parent can declare this as

dividend to its shareholders. Mr. Ong further asked an approximation of how much

percentage can be considered as income received by FPH. Mr. San Pedro referred the

stockholder to Note 23 of the Annual Report which made mention that “The parent

company’s retained earnings that is available for dividend declaration amounts to P29 billion

as at December 31, 2010.”

13

Mr. Ong said that it seems that the P2 cash dividend is quite small. He wondered if

management has plans to increase the cash dividends based on the figures. Mr. Ibañez

replied that the decision to declare cash dividends depends on two things: one of them is

dividendable retained earnings but what is more important is the use of cash. People have

been asking what the company will use its cash for. As reported on by the Chairman and

himself, the company is using the cash primarily to grow its existing business in power

generation, in manufacturing and in property. The company feels that the P2 per share

given today’s share price of P60 really translates to 3% cash yield, which is equal to a savings

account. He said the company hopes that it can make more than that by reinvesting the

cash. Atty. Pacifico Tacob, another stockholder, said that on retained earnings, stock

dividends be given to the stockholders.

Mr. Emil Dela Cruz, another stockholder, suggested that since the company is

celebrating its 50th year, maybe it can declare stock dividends. Mr. Ibañez said that the

company has been granting stock dividends in the past and this has been a long running

analysis that it has been doing: when declaring stock dividends one has to pay fees to the

SEC but the economic effect really is like changing the P100 bill into two P50 bills. There is

really no economic benefit to a stock dividend. But he added that management will continue

to study the matter going forward. Mr. Dela Cruz further queried as to when Rockwell Land

will be listed. Mr. Ibañez said that there was a plan to list Rockwell Land two years ago but

unfortunately in 2008 there was a downturn in the economy and it was viewed as not the

right time for Rockwell Land to list. Recently, there were talks of Rockwell Land being

listed, but to list a company means raising equity, but it is very much cheaper for Rockwell

Land today to borrow money from the banks because the banks are very liquid and interest

rates are very low. On the other hand, equity is the most expensive form of financing. An

equity investor would normally look for a 12% to 15% return. From a stockholder’s

viewpoint, it is better for Rockwell Land to just borrow money at this point in time because

it can finance expansion more efficiently from debt rather than from equity.

In reply to another query from a stockholder, Mr. Sin Bin Gan, the Chairman said

that the company has a right of first refusal with regard to the sale by British Gas of its 40%

ownership in Sta. Rita and San Lorenzo. The company is actually in discussions with British

Gas. However, an option for British Gas is to just keep their stake and just continue to be

partners until the end of the contract. The company has indicated to British Gas that it is

willing to buy those shares and willing to negotiate with them but as of now they have not

14

made a decision to sell. However, the Chairman said that in British Gas’ financial reporting,

First Gas has been listed as a discontinued operation because they are getting out of power

generation worldwide.

In reply to another query on First Gen’s plan to build a dam in Southern Luzon, the

Chairman said that a Memorandum of Agreement has been signed with the local

government for the Balintingon Dam, a multi-purpose dam in Nueva Ecija. The old studies

say that one could generate 30MW to 40MW and it can also be used for irrigation and

domestic water. The company had a service contract signed with the DOE but it will have

to refresh the studies to make sure that the number of megawatts can be actually obtained.

Mr. Sin Bin Gan also inquired on the additional investment for wafering. He said

that electricity generated by solar energy has a high cost. He asked as to when the company

will be able to bring down the cost so that it will be more acceptable to the market here in

the Philippines. Mr. Arthur A. De Guia replied that the solar industry has been growing

extremely fast and with the growth of the industry the economies of scale are starting to kick

in. There are a lot of interests in the industry which has brought down the costs. The

projections right now of some industry players will be in the next three to five years that it

will reach grid parity but it will depend on the country because some countries will have very

low tariffs while others will have much higher tariffs. The sense is that around 2015 or 2017,

grid parity will be reached by solar power.

15

ADJOURNMENT

There being no further business to transact, the meeting was, on motion made and

duly seconded, thereupon adjourned.

ENRIQUE I. QUIASON Secretary A T T E S T : FEDERICO R. LOPEZ Chairman of the Board