MINUTES OF THE ANNUAL MEETING - First Gen · Minutes of the 2014 Annual General Meeting of First...

MINUTES OF THE

2014 ANNUAL GENERAL MEETING

OF

FIRST GEN CORPORATION Held at The Rockwell Tent

Plaza Garden, Rockwell Center

Makati City

May 12, 2014

The 2014 annual general meeting of First Gen Corporation (the “Corporation”) was held at

10:00 a.m. on May 12, 2014 at The Rockwell Tent, Plaza Garden, Rockwell Center, Makati

City.

The attendance of the board of directors is provided below:

Present: Mr. Oscar M. Lopez

Mr. Federico R. Lopez

Mr. Francis Giles B. Puno

Mr. Peter D. Garrucho Jr.

Mr. Elpidio L. Ibañez

Mr. Eugenio L. Lopez III

Mr. Jaime I. Ayala

Absent: Mr. Richard B. Tantoco

Mr. Tony Tan Caktiong

____________________________________________________________________________

I. CALL TO ORDER

At 10:15 a.m., the Chairman, Federico R. Lopez, called the meeting to order and presided over

the same. The Corporate Secretary, Rachel R. Hernandez, recorded the proceedings.

II. CERTIFICATION OF NOTICE AND DETERMINATION OF QUORUM

The Secretary certified that notices of the 2014 Annual General Meeting were sent to all

stockholders as of the record date of March 13, 2014. She also certified that out of the

Corporation’s total issued and outstanding shares amounting to 5,066,217,649, a total of

4,232,914,446 shares were represented at the meeting, either in person or by proxy. She added

that this represented 83.55% of the Corporation’s issued and outstanding capital stock.

There being a quorum, the Chairman declared the 2014 Annual General Meeting open for the

transaction of business.

III. APPROVAL OF THE MINUTES OF THE PREVIOUS STOCKHOLDERS’

MEETING

The next item on the agenda was the reading and approval of the minutes of the 2013 Annual

General Meeting which was held on May 8, 2013.

Minutes of the 2014 Annual General Meeting

of First Gen Corporation

May 12, 2014

2

On motion duly made and seconded, the reading of the minutes of the Annual General Meeting

held on May 8, 2013, copies of which were earlier distributed to the stockholders present at the

meeting, was dispensed with, and the minutes approved as follows:

“RESOLVED, that the stockholders of First Gen

Corporation (the “Corporation”) hereby approve the minutes of

the Annual General Meeting held on May 8, 2013.”

The Chairman inquired whether there was any objection; there being none, the Chairman

moved to the next item in the agenda.

The Secretary noted that the company received proxies representing 4,106,800,010 shares, or

84.00% of the total issued and outstanding shares, instructing the proxy holder, Chairman or

Secretary to vote in favor of approving the minutes of the May 8, 2013 Annual General

Meeting, and 10,200 shares to abstain therefrom.

This was duly noted by the Chairman who directed the Secretary to include this in the minutes

of meeting.

IV. ADDRESS OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER

The Chairman delivered the following address:

2013 was a year of challenges, not only for First Gen, but also for the entire country. It was a

year, by and large, defined by Typhoon Yolanda: the world’s strongest storm in recorded

history, leaving millions of our countrymen affected. Of course, First Gen was not spared. With

the vast majority of our subsidiary Energy Development Corporation’s assets in Leyte

sustaining heavy damage in the immediate aftermath of the storm, not a single kilowatt-hour

was being produced.

However, even as we were duly concerned about getting our plants back on line and getting

our operations back on track, we also knew that there was a deeper responsibility at hand.

Our first order of business was making sure that every one of our employees, including their

families, was safe and accounted for. We spared no time and expense in mobilizing our owned

and leased air, sea and land assets to bring in the much-needed food, water, medicines,

supplies and other provisions that they needed. Our foremost concern was to show our people

that, in their darkest hours, we would be there for them.

Typhoon Yolanda was one of those instances where cost concerns took a backseat to doing

what was right and compassionate; you just identified what had to be done, and you do it. This

was a belief the entire organization shared, which led to the intense relief and recovery efforts

that First Gen, EDC and the rest of the First Philippine Holdings Group took part in. What

started as an effort to help our employees and our immediate host communities was eventually

expanded to helping the whole island of Leyte.

But this was not the only seemingly insurmountable challenge that we hurdled in 2013.

Toward the middle of the year, the Unit 60 transformer of our 500 MW San Lorenzo power

plant in Batangas City caught fire, effectively rendering the transformer inoperative and

reducing our generation capacity by 250 MW.



May 12, 2014

3

These issues, together with the depreciation of the Peso, contributed to the year-on-year 46.6%

decrease in consolidated net income: down to USD 167.6 million from the USD 314 million

registered in 2012. However, as many of you will probably know, we have never been a group

to be daunted by challenges.

Undaunted by challenges

In the wake of Typhoon Yolanda, despite the destruction of their own homes and amid the

heavy damage sustained by the Leyte Geothermal Power Plants, our EDC employees ensured

that emergency supplies, equipment, and expertise were brought in to restore some sense of

normalcy to our host communities in Leyte. The entire Lopez Group, in fact, was mobilized to

respond to urgent rescue, relief, and rehabilitation needs. Further, through the combined

diligence of our employees on the ground and the decisiveness of our leadership team, all our

Leyte plants are now 100% back online—five months ahead of schedule.

In the case of San Lorenzo, we moved heaven and earth to get capacity back at the soonest

possible time. Siemens manufactured the 150-ton replacement transformer in just four months,

and we commissioned the world’s largest aircraft, the Antonov 225, to fly the transformer into

the Philippines from Croatia, instead of transporting it by sea. We were able to resume

operations of San Lorenzo Unit 60 in record time—in just around six months—when,

ordinarily, the entire process should have taken a year.

Fueled by purpose

Despite the setbacks, 2013 also brought us some exciting developments in a stellar line-up of

projects.

In March 2013, for instance, we set to work on an 87 MW wind farm in Burgos, Ilocos Norte.

First Gen, through EDC, is already constructing this wind farm, the capacity of which was just

recently expanded to 150 MW. We expect the first 87 MW to commence operations by end of

this year, and the full 150 MW by March 2015.

Halfway through December 2013, contracts were signed with Siemens AG and Siemens, Inc.,

for the engineering, design, procurement, and construction of the first phase of the San Gabriel

Combined Cycle Power Plant in Santa Rita, Batangas City. One month later, in January 2014,

we were already breaking ground for the San Gabriel Unit 70, which will be operational in just

two years. This will add 414 much-needed megawatts to the Luzon grid before the peak of

summer of 2016. It will be the first of three such additional plants that we are planning to

build, plus a fast-track 100 MW project called Avion, which will be the first power plant in the

country using aeroderivative turbines. In all, our vision is to build an additional 1,342 MW

within the First Gen Clean Energy Complex in Batangas City between now and 2019.

When we built our Sta. Rita and San Lorenzo power plants beginning in the late 1990’s, it

anchored the demand for natural gas, introducing a cleaner resource into the Philippine fuel

mix that was then dominated by coal and oil. With San Gabriel, we are again at the forefront of

efforts to harness state-of-the-art technology in supplying the energy needs of the Philippines,

and we reinforce that with a commitment to cleaner energy.

Even more exciting is that there is an energy revolution taking place around us, with

technology uncovering massive reserves of natural gas in North America. Eventually, that

natural gas will find its way to Asia. We want the Philippines to take part in and benefit from



May 12, 2014

4

this revolution, which is why First Gen is firming up plans to build the first liquefied natural

gas (LNG) import terminal in the country.

Powered by good

Maybe more than any other crisis that we have weathered, Typhoon Yolanda revealed what we

mean when we say that we are “Powered by Good.” I’ve always believed that First Gen’s

portfolio of assets puts us in a unique position to be a trailblazer on many fronts. I am confident

that despite the challenges this past year, we are well on track to seeing our various platforms

for growth expand even further in the next few years.

Synchronous to this, First Gen remains committed to uplifting lives in our host communities,

caring for and protecting the environment, and with a firm resolve to do good by our country.

We believe in a bedrock purpose that must exist alongside the bottom line, and we are

anchored on values that will sustain us through the most trying times.

Thank you all for your continued trust and support.

V. ANNUAL REPORT OF THE PRESIDENT & COO

Following the Chairman’s address, the next item on the agenda was the annual report of the

Corporation’s President and Chief Operating Officer, Francis Giles B. Puno.

Mr. Puno took the floor and delivered his report.

Dear Shareholders,

Good morning.

With 2012 having been a banner year at First Gen, we expected that a repeat performance for

2013 would be a tough act to follow. What we did not expect, however, was the gravity and the

magnitude of the challenges we had to confront in 2013. That year, our attributable net income

was USD 118.1 million, 38% lower than 2012.

There were many factors behind the drop. One was the lower attributable net income reported

by EDC’s geothermal assets, by 43% from USD 81.5 million to USD 46.6 million in 2013, due

mostly to impairment losses recognized by its Unified Leyte and Tongonan plants caused by

Typhoon Yolanda. EDC also reported unrealized foreign exchange losses of USD 14.9 million

in the translation of its long-term foreign debt due to the depreciation of the Peso in 2013.

In addition, First Gas Power and FGP Corp. booked a combined lower net income

contribution, by 23%, from USD 107 million to USD 82 million in 2013, resulting from the

temporary shutdown of the San Lorenzo Plant’s Unit 60 transformer due to a fire in May last

year. This led us to lose 250 MW in production capacity over a seven-month period.

FG Hydro recorded a lower net income contribution, by 54%, from USD 60 million to USD 28

million in 2013, due to lower ancillary sales revenue and lower Wholesale Electricity Spot

Market prices. These were partially offset by lower expenses of the Parent by USD 22 million

primarily due to the prepayments of loans.



May 12, 2014

5

The damage caused by Typhoon Yolanda, said to be the strongest storm in recorded history,

was unlike anything else we had seen before. The storm brought operations of our Leyte

Geothermal Production Field to a standstill. In the wake of Typhoon Yolanda, production of

all our plants totaling 700 MW were down to zero. Before restoring our plants, however, we

had to ascertain that our employees numbering over 700 were safe and accounted for. Taking

the Lopez Value of “employee welfare and wellness” to heart, we helped them get back on their

feet—and then summoned the various Lopez Group resources to restore power to hospitals and

water districts in our host communities. Thanks to the selfless contributions of our people, we

were able to bring the Leyte plants back to pre-Yolanda levels, around five months ahead of

schedule.

In the meantime, further delays in EDC’s Bacman plant severely hampered our ability to

produce the expected 130 MW in 2013. As a permanent solution, two brand new turbine rotors

will be delivered by Toshiba Japan in the 4Q of 2014 for Unit 1 and 1Q 2015 for Unit 2, while

a new generator rotor will be installed in the smaller 20 MW unit in 2Q 2014. In the interim,

the Bacman units will be operated using the original repaired equipment as prudently feasible

and provide supplemental income to EDC in 2014.

We continue to ensure that the gas plants undergo the high standards of maintenance that they

have been operating at over the last thirteen years. The 100,000 Equivalent Operating Hours

major maintenance activity was performed by Siemens for Santa Rita’s Unit 10 and Unit 40

and were completed by April. Similar work was completed for Units 20 and 30 in 2012.

In addition, San Lorenzo Unit 60 went through a scheduled maintenance outage in September

to October while Unit 50 was conducted in November and December. In the case of the San

Lorenzo units, we also had Siemens install a Thermal Performance Upgrade to increase the

total output of the plant by approximately 20 MW. We also chartered the world’s largest cargo

aircraft, the Antonov 225, in order to expedite the delivery of a replacement transformer for

FGP, from Croatia to the Philippines. The transformer arrived on November 11, four months

ahead of schedule, allowing the 250 MW Unit 60 to get back to operation on December 26.

Our response in the wake of Typhoon Yolanda—and to the many other challenges we faced

together in 2013—is a standout example of how our theme, “Powered by Good,” is not simply

a slogan for a company that produces clean and renewable energy. While 2013 brought us a

number of major challenges, it also brought us a good number of positive highlights,

strengthening our bedrock for future growth.

In February, First Gen completely paid off the remaining balance of its USD260 million

Convertible Bonds that were originally issued to finance the acquisition of EDC. In July, First

Gen’s board approved the declaration of cash dividends on its common shares at the rate of

PHP 0.50 per share. This was the first time in six years that First Gen declared a cash dividend

on its common shares—signifying that our financial standing has stabilized. In October, First

Gen successfully closed its USD 300 million 10-year bond, which secured funding for its new

projects. In March, EDC signed a deal for the construction of its 87 MW wind farm in Burgos,

Ilocos Norte. We broke ground in April and expect to commence commercial operations by

early 2015. This month, EDC ordered an additional 21 wind turbines which expands the

project’s capacity to 150 MW. In November, EDC won the bid to trade 40 MW of the 200 MW

energy strips of the Unified Leyte Independent Power Producer Administration. EDC likewise

achieved progress in the 45 MW N2N Relocation Project, with commercial operations targeted

by the end of this quarter.



May 12, 2014

6

On the international front, EDC negotiated Joint Venture Agreements and an acquisition in

Chile and Peru, and acquired 100% equity in Hot Rock Limited’s Peruvian and Chilean

subsidiaries. We also signed a JVA with Alterra Power of Canada for a 70% interest in four

projects. Moreover, we were granted preliminary survey rights for the Graho Nyabu site in

Sumatra, Indonesia.

In December 16, First Gen’s fully-owned subsidiary, First NatGas Power Corporation,

awarded the contract for the engineering, procurement and construction of the 414 MW San

Gabriel combined cycle power plant to Siemens Germany. First Gen has designed the San

Gabriel project to be the first of three units totaling about 1,350 MW and will be pre-investing

in common cooling pipes and additional piling activity in order to better facilitate the

construction schedule of the additional units.

For First Gen’s Puyo and Bubunawan projects, the DOE confirmed their Declaration of

Commerciality which qualifies these projects to avail of the Feed-in-Tariff system on a first-

come, first-served basis.

Moving forward, we act with the same level of prudence and strategic foresight that made the

banner year of 2012 possible. Having learned our lessons from 2013, we are upgrading our

facilities to further ensure the safety of our people, first and foremost. We are also reviewing

our business interruption and disaster preparedness programs that include maintaining

improved levels of strategic spares and having key personnel and heavy equipment available.

This is especially important in the EDC sites given its remote locations.

We are also expanding across our portfolio to address the growing demand for alternative

sources of energy. In January, we broke ground for what will be the 414 MW San Gabriel

Natural Gas-Fired Power Plant. This will provide critical additional power supply by 2016 and

be the most efficient gas-fired plant in Southeast Asia using the latest Siemens 8000H gas

turbine technology. In the meantime, we are negotiating the remaining financing for the first

unit by tapping the German export credit and local bank loan markets. We will also be

contracting some of San Gabriel’s 414 MW electricity supply in time for its commissioning in

March 2016.

With foreseen supply constraints in the immediate term, we are also very excited about the fast-

track 100 MW Avion Power Plant using proven aeroderivative technology. This project will be

located adjacent to the existing Santa Rita gas plants. While the first unit of San Gabriel and

the Avion projects will be fuelled by Malampaya-sourced natural gas, we also realize that the

current gas supply contracts will expire in the next ten years. It is for this reason that we are

excited about the development of a regasification terminal for liquefied natural gas—which

aims to be the first LNG terminal in the Philippines. This will give our country the necessary

flexibility to source natural gas from the international markets and put us at par with other

countries in Asia, which have already built their own terminals.

Just as we’ve done in the past—and now armed with lessons from 2013—First Gen will keep on

moving boldly towards the future, walking with measured, steady, and deliberate steps in order

to not lose our footing, but willing to take the leap when the opportunity and the conditions call

for it.

Our portfolio is now more formidable than ever, but our work is far from done. For as long as

the Philippines —and the world— needs clean, renewable energy, we will find more ground to

cover and conquer challenges with the Power of Good.



May 12, 2014

7

Thank you and good morning.

The Chairman asked the stockholders if they had any questions or points of clarification on

either report. He said that the board of directors would be happy to answer any such questions.

Mr. Jose Leonardo posed the first question. He noted that the company suffered a financial

setback due to the fire at Santa Rita’s Unit 60. He wanted to know what the company has done

in order to prevent a recurrence of the incident.

Mr. Puno said the company has ordered spare transformers to reduce the business interruption

risk. It is important to take into consideration the fact that the Santa Rita and San Lorenzo

power plants have been running for over a decade on baseload basis, resulting in a lot of

operating hours.

For Unit 40, he said that the company ordered a spare transformer from a Siemens-accredited

supplier in China. The cost of a new transformer is deemed reasonable compared to the amount

of business interruption risk. With a spare transformer, the plants will be able to immediately

install a replacement when any of the transformers of any of the 6 units goes down.

Mr. Rommel V. Songco inquired about insurance coverage for business interruption due to the

incidents involving Units 60 and 40. Mr. Puno explained that the total cost involved was

US$7MM broken down into US$3MM for the cost of transportation via the Antonov aircraft,

and US$4MM for the transformer. There was considerable expense as the company made an

expedited order for the transformer. Normally, it would take anywhere from 12-18 months to

order a transformer. He stressed that the company is more than covered for machinery

breakdown and is insured for the full value of its assets. He said that the machinery breakdown

component is around US$800MM, while for business interruption it is approximately

US$400MM.

Mr. Songco sought clarification on whether business interruption for 2013 was fully covered.

Mr. Puno confirmed this.

Mr. Puno stressed the importance of the process of collecting from the company’s insurers, and

said that the company has hired the best consultants to help facilitate this, although the

company is well aware that this will take some time. Nevertheless, Mr. Puno noted that the

insurers have acknowledged that they are on the hook for the insurance proceeds, and that the

question is merely on timing and quantum.

Mr. Songco asked about the deductible; Mr. Puno said it was US$750,000.

He then asked whether, if the San Lorenzo plant is down, whether the company is obliged to

provide replacement power to Meralco? Mr. Puno said no, and explained that the company

runs a net dependable capacity (NDC) test every 6 months based on the ability of the plant to

deliver power. Because Meralco needed the power and due to the expedited delivery of the

spare transformer for San Lorenzo, the company was able to re-run NDC test for San Lorenzo

as soon as the plant was re-energized.

Mr. Puno said that the situation was more difficult in the case of San Lorenzo because 50% of

the plant was down, whereas for Santa Rita only 25%, or 1 of its 4 units, was affected. The

company will again re-run the NDC test for San Lorenzo to reduce the risk of receiving lower

revenues. In any case, both plants are required to comply with its contractual obligations to

Meralco under their respective power purchase agreements (PPAs). He noted that if there was



May 12, 2014

8

any loss of revenue, that would be the amount collected from the insurers for business

interruption.

Mr. Songco then asked about the current Supreme Court case involving Meralco, specifically

on how much are the company’s receivables. Mr. Puno advised that the company has been

fully paid by Meralco save for the US$30MM subject of the contested November 2013 billing.

He noted, however, that the said amount is electricity not sold through the Wholesale

Electricity Spot Market or WESM, but the result of a bilateral contract. Meralco has said that it

will be able to pay once the Supreme Court issues its ruling on the case.

The next question from Mr. Songco was on what the company expected regarding ancillary

sales. Mr. Puno said that expectation this year is roughly flat, as the company does not expect

the same high prices as last year’s. In particular, Mr. Puno said that the company does not see

the same volatility in revenue reduction between 2013 and 2012 from the hydroelectric power

plants.

There was then a question from Mr. Songco about the US$2.8B projection for the Burgos wind

farm. Mr. Puno clarified that this figure is combined for phases 1 and 2.

Mr. Songco inquired whether the new power plants Avion, San Gabriel and Burgos will be

covered by an income tax holiday or ITH, which was confirmed by Mr. Puno.

Mr. Puno pointed out that the country needs additional capacity, and although First Gen wanted

to develop new plants sooner, it had to buy out its foreign partner first. He stressed that the

company’s development teams acted very quickly in developing these plants, especially

considering the long lead time in negotiating with contractors.

Mr. Songco also asked about the ITH for the Nasulo project of Energy Development

Corporation (EDC) in Negros Oriental. Mr. Puno confirmed that Nasulo is at the tailend of the

ITH period, as it will be operational in a few months.

Mr. Songco asked about the Batangas facility. Mr. Puno said that after the 414 MW San

Gabriel combined cycle natural gas-fired power plant, the company is looking at additional

capacity. The Batangas facilities are now referred to as the First Gen Clean Energy Complex,

so called because it will be the center for natural gas in the country, not only for power

generation but also for a liquefied natural gas (LNG) regasification terminal. Mr. Songco asked

whether the fuel costs are pass-through, which Mr. Puno confirmed. He also noted that San

Gabriel is developing at a fast pace, following the execution of an engineering, procurement

and construction (EPC) contract in December 2013 with Siemens AG. Mr. Puno said that San

Gabriel has a good EPC contractor.

Mr. Songco inquired as to how Avion managed to be a fast-track project. Mr. Puno said that

Avion is almost like an expansion as the company can utilize the existing facilities. He also

explained that compared to coal, gas-fired plants take a much shorter time to develop. The

advantage of aeroderivative technology is that the turbines and other equipment are

containerized.

Another stockholder, Mr. Gregorio Calixto, inquired on the reason for the shift from natural gas

to LNG, and whether this was due to cost or supply. Mr. Puno explained that this is necessary

due to the limited supply of Malampaya gas. The company’s contract with the gas sellers, the

Gas Sale and Purchase Agreement (GSPA), will expire in 2022 or 2024, depending on how

much gas is consumed. At that time, the supply of gas for the company’s plants becomes



May 12, 2014

9

uncertain. Needless to say, there will be a problem is if there are no proponents for natural gas

at that time.

For this reason, the company is looking at developing an LNG receiving and regasification

terminal in Batangas City, which will be the first in the country. He noted that other countries

in the Asian region already have their own LNG terminal. Should the company be successful

in setting up its own LNG terminal, this will undoubtedly put the Philippines at par with its

Asian neighbors. He stressed that LNG is not just for fueling power plants but also for the

industrial sector - for transportation and factories. If there will be terminal in Batangas City, it

is even possible to build a pipeline to the various industrial parks in Batangas to deliver more

competitive fuel. He also said that natural gas is cheaper than diesel.

Mr. Calixto asked the directors on the revenues that can be expected from EDC joint ventures

abroad. Mr. Puno said it is too premature to talk about expected revenue. However, he pointed

out that the First Gen group is benefiting from the EDC experience, and there is a desire to

share EDC expertise abroad. The company will focus on the so-called low hanging fruit, like

the Bacon-Manito rehabilitation and the Nasulo transfer that will be able to generate good cash

flow for EDC. He pointed out that growth in geothermal is not found in the Philippines, but

abroad. Mr. Puno also said that the EDC office in Santiago, Chile is headed by a Filipino, and

that these are exciting times for First Gen and EDC.

Mr. Calixto posed the question of whether First Gen and EDC will be world class by next year,

to which Mr. Puno said he already considers the company to be world class. He pointed out

that no revenues are generated from abroad, and that a lot of retired EDC employees are already

living overseas.

The Chairman inquired whether there were any more questions from the stockholders. There

being none, and on motion duly made and seconded, the following resolution was approved:


Corporation (the “Corporation”) hereby approve the report of

the Corporation’s President and Chief Operating Officer on the

operating and financial results of the Corporation for the year

2013.”

The Chairman asked whether there was any objection; there being none, the Chairman moved

to the next item in the agenda.

The Secretary noted that the company received proxies representing 4,106,359,410 shares or

85.00% of the total outstanding shares in favor of approving the report, and 450,600 shares

abstaining therefrom.

The Chairman noted this and directed its inclusion in the minutes of meeting.

VI. ELECTION OF DIRECTORS

The next item on the agenda was the election of the members of the board of directors of the

Corporation for the year 2014-2015. The Chairman directed the Secretary to advise the body of

the provisions of the company’s By-laws and the rules of the Securities and Exchange

Commission (SEC) which are pertinent to the election of the directors.



May 12, 2014

10

The Secretary informed the stockholders that Article II, Section 3 of the company’s By-laws

requires all nominations for election of directors by the stockholders to be submitted in writing

to the board of directors at least thirty (30) working days prior to the stockholders’ meeting.

Further, the nomination and election of independent directors must comply with Rule 38 of the

Securities Regulation Code. She added that as indicated in the Information Statement, the

board of directors received within the said period nominations for the election of the following

stockholders as directors of the Corporation for the ensuing year:

For regular directors:

1. Oscar M. Lopez

2. Federico R. Lopez

3. Francis Giles B. Puno

4. Richard B. Tantoco

5. Peter D. Garrucho Jr.

6. Elpidio L. Ibańez

7. Eugenio L. Lopez III

For independent directors:

8. Tony Tan Caktiong

9. Jaime I. Ayala

A motion was made that since there were nine (9) board seats to be filled, and the nine (9)

stockholders so nominated have qualified pursuant to the Corporation’s By-laws and Manual

on Corporate Governance, the said nine (9) stockholders so nominated be declared elected as

members of the board of directors of First Gen Corporation.

The motion was duly seconded, and the Chairman directed the Secretary to cast votes in favor

of the above stockholders nominated as directors, to serve as such for the ensuing year and until

their successors shall have been duly elected and qualified.

The Chairman declared the stockholders so nominated as duly elected members of the board of

directors of the Corporation, to serve as such for the period 2014-2015 and until their

successors shall have been duly elected and qualified.

The Chairman asked whether there were any objections from the stockholders; there being

none, the Chairman moved to the next item on the agenda.

VII. APPROVAL OF THE DECEMBER 31, 2013 AUDITED FINANCIAL

STATEMENTS

The Chairman announced that the next item on the agenda was the approval of the

Corporation’s Audited Financial Statements as of and for the years ended December 31, 2013

and 2012. The Audited Financial Statements, together with the Management Report and

Information Statement, were previously distributed to the company’s stockholders of record.

These documents indicated all pertinent actions undertaken during the year, including the

activities and performance of the company and its subsidiaries and certain of its affiliates.

He added that the Audited Financial Statements were reviewed, approved and authorized for

issuance by the company’s board of directors on March 19, 2014.



May 12, 2014

11

Upon motion duly made and seconded, the stockholders of the Corporation approved the

Audited Financial Statements as of and for the years ended December 31, 2013 and 2012 as

follows:


Corporation (the “Corporation”) hereby approve and authorize

the issuance of the parent and consolidated audited financial

statements of the Corporation for the years ended December 31,

2013 and 2012.”

The Chairman asked whether there was any objection from the stockholders. There being

none, the Chairman moved to the next item in the agenda.


85.00% of the total outstanding shares, instructing the proxy holder, Chairman or Secretary to

vote in favor of approving the proposal, and 450,600 shares to abstain therefrom.

This was noted by the Chairman who directed its inclusion in the minutes of meeting.

VIII. APPOINTMENT OF EXTERNAL AUDITORS

The next item was the appointment of the Corporation’s external auditors.

Upon motion duly made and seconded, SyCip Gorres Velayo & Co. was re-appointed external

auditors of the Corporation for the ensuing year:


Corporation (the “Corporation”) hereby approve, confirm and

ratify the appointment of SyCip Gorres Velayo & Co. as the

Corporation’s external auditors for the period 2014-2015.”





vote in favor of approving the proposal, 38,733,367 shares to vote against, and 10,200 shares to

abstain therefrom.

The Chairman noted this and instructed its inclusion in the minutes of meeting.

IX. AMENDMENT OF THE 3RD

ARTICLE OF THE ARTICLES OF

INCORPORATION TO INDICATE THE SPECIFIC PRINCIPAL OFFICE

ADDRESS OF THE CORPORATION

The next item for the consideration of the stockholders was the amendment to the 3rd

Article of

the Corporation’s Articles of Incorporation to change the principal office address from “Metro

Manila, Philippines” to “3rd

Floor Benpres Building, Exchange Road cor. Meralco Avenue,

Pasig City, Philippines.”



May 12, 2014

12

The Chairman explained to the stockholders that the amendment was being undertaken to

comply with SEC Memorandum Circular #6 (Series of 2014) which requires companies whose

articles of incorporation indicate a general address as its principal office to amend their articles

by specifying their complete address.

Upon motion duly made and seconded, the stockholders approved the following resolutions:

“RESOLVED, that the relevant portion of the Third

Article of the Articles of Incorporation be amended to read as

follows:

‘THIRD. That the place where the principal

office of the Corporation is to be established and located

is at the 3rd

Floor Benpres Building, Exchange Road

corner Meralco Avenue, Pasig City, Philippines.

“RESOLVED, FURTHER, that the proper officers of the

Corporation are hereby authorized and directed to execute, file

and submit all required documents that the Securities and

Exchange Commission and other offices may require, and to do

all acts and things as may be required or necessary to implement

the foregoing amendment.”






This was duly noted by the Chairman who directed its inclusion in the minutes of meeting.

X. AUTHORITY OF THE CORPORATION TO ACT AS GUARANTOR

The Chairman announced that the next item for the consideration of the stockholders was the

authority of the company, pursuant to Clause (i) of the 2nd

Article of the Articles of

Incorporation, to act as a guarantor or co-obligor or assume any obligation of any of the

company’s subsidiaries, including but not limited to First NatGas Power Corp. and Prime

Meridian Powergen Corporation, under such terms and conditions as the Corporation’s duly

authorized representatives shall deem necessary, proper or convenient in the best interests of

the Corporation and its relevant subsidiary.

The Chairman explained that among the secondary purposes in First Gen’s Articles of

Incorporation is the authority of the company to act as guarantor or co-obligor or assume any

obligation of any person, corporation or entity in which First Gen may have an interest. The

company is seeking stockholders’ ratification to enable it to exercise this authority in favor of

its subsidiaries, including First NatGas Power Corp. and Prime Meridian Powergen

Corporation, which are the operating companies of the proposed 414 MW San Gabriel and 100

MW Avion natural gas-fired power plants.



May 12, 2014

13

Upon motion made and seconded, the stockholders approved the following resolution:


Corporation (the “Corporation”) hereby confirm, ratify and

approve the authority of the Corporation, pursuant to Clause (i)

of the Second Article of the Articles of Incorporation, to act as

guarantor or co-obligor or assume any obligation of any

person, corporation or entity in which the Corporation may

have an interest, directly or indirectly, including but not limited

to First NatGas Power Corp. and Prime Meridian Powergen

Corporation, under such terms and conditions as the

Corporation’s duly authorized representatives shall deem

necessary, proper or convenient in the best interests of the

Corporation and its relevant subsidiary.”






The Chairman instructed the Secretary to include this in the minutes.

XI. RATIFICATION AND APPROVAL OF CORPORATE ACTS

The next item on the agenda was the ratification and approval of all corporate acts from the

date of the 2013 Annual General Meeting up to the present. The actions affecting the

operations, financial performance and strategic posture of the company were likewise covered

in the Information Statement, Management Report, as well as the reports of the Chairman and

the President.

Upon motion duly made and seconded, the stockholders representing 4,100,677,110 shares, or

85.00% of the total outstanding shares, approved the following resolution, with 5,682,300

shares to vote against, and 450,600 shares to abstain therefrom:


Corporation (the “Corporation”) hereby approve, confirm and

ratify all contracts, agreements, resolutions and actions

authorized, entered into and performed by the board of directors

and management of the Corporation from the Annual General

Meeting held on May 8, 2013 up to the present date.”

The Chairman asked whether there was any objection; there being none, the Chairman moved

to the next item on the agenda.

XII. OTHER MATTERS / ADJOURNMENT

The Chairman inquired whether there was any item for the consideration of the stockholders.



May 12, 2014

14

Mr. Leonardo again took the floor to ask the Chairman his thoughts on the imbalance in

ecology. The Chairman explained that in this regard, the company undertakes a lot of activities

which dovetail with the company’s operations. For instance, the company does reforestation,

and EDC does massive replanting. The Chairman pointed out that Typhoon Yolanda did not

stop the company’s efforts in protecting the environment.

The Chairman also said that for the company’s hydropower projects, there is a need for good

and protected watersheds for siltation, to ensure that the body of water is not damaged.

There being no further question from Mr. Leonardo, and there being no further matters to

discuss, the 2014 Annual General Meeting was, on motion, adjourned by the Chairman at

11:20a.m.

Certified True and Correct:

RACHEL R. HERNANDEZ

Secretary of the Meeting

Attest:

FEDERICO R. LOPEZ

Chairman of the Meeting

MINUTES OF THE ANNUAL MEETING - First Gen · Minutes of the 2014 Annual General Meeting of First...

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