SM PRIME HOLDINGS INC.

INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT

ANALYSIS REPORT

Corporate governance is a system of direction, feedback and control using regulations,

performance standards and ethical guidelines to hold the Board and senior management accountable for
ensuring ethical behavior – reconciling long- term customer satisfaction with shareholder value – to the
benefit of all stakeholders and society. Its purpose is to maximize the organization’s long-term success,
creating sustainable value for its shareholders, stakeholders and the nation. The Code of Corporate
Governance for publicly listed companies is the first of a series of Codes that is intended to cover all types
of corporations in the Philippines under supervision of the Securities and Exchange Commission (SEC).
This paper will talk about the Integrated annual corporate governance report of SM Prime Holdings Inc,
Integrated annual corporate governance report is an instrument to exhibit publicly-listed
companies’ compliance or non-compliance with the recommendations provided under the Code of
Corporate Governance. It highlights the company’s corporate governance practices, policies and programs,
and provides detailed information on the Board of Directors and management. This report is submitted to
the Securities and Exchange Commission.

SM Prime Holdings, Inc. (SMPH) is one of the largest integrated property developers in Southeast
Asia that offers innovative and sustainable lifestyle cities with the development of malls, residences, offices,
hotels and convention centers. It is also the largest, in terms of asset, in the Philippines. SMPH was
incorporated in the Philippines in 1994. They started as a mall developer and operator and grew to be the
biggest retail shopping center developer and operator in the Philippines. Currently, it has 76 malls in and
outside Metro Manila and 7 shopping malls in China, totaling 9.8 million square meters of Gross Floor Area
(GFA). In the Philippines, they have a total of 19,153 tenants and 2,001 tenants in China. And SM Prime
Holdings Inc. is one of the publicly-listed company that results a completely compliant on the recommended
corporate governance practice or policy set by Securities and Exchange Commission based on their
Integrated annual corporate governance report.

The Integrated annual corporate governance report of SM Prime Holdings Inc. shows that the
company have characteristics of good corporate governance; the participation, rule of law, transparency,
responsiveness, equity and inclusiveness, consensus oriented, effectiveness and efficiency, and
accountability.

SMPH Board of Directors actively participate during regular and special Board meetings and
annual stockholders’ meetings. The Chairman of the Board makes certain that the meeting agenda focuses
on strategic matters in coordination with the Corporate Secretary, while taking into consideration the advice
and suggestions of the Board and Management. The Company implements various programs involving it
employees and encourage them to actively participate in the realization of the Company’s objectives. This
includes regular dialogue through focus group discussions, employee engagement survey, meetings and
annual forums. SM Prime promotes the dynamic growth and sustained wellness of its workforce with
developmental programs and activities. The invaluable contribution of the employees extends to the
relationships within and beyond the Company. As the Company grows, so does the employee who adheres
to proper principles.

SMPH ensures that directors are able to perform their functions effectively. Company has an
orientation programs for first time directors to ensure that members are appropriately inform about their
duties and responsibilities. This includes an overview of the company’s operations, Code of Conduct,
Corporate Governance framework, and other relevant topics essential in the performance of their functions.
The company also provides learning and development opportunities regularly for professional growth.

SMPH is committed in providing its stockholders and the public a timely and accurate information
about the company and its business. In accordance with this, SMPH regularly updates its website and
practices full and prompt disclosure of all material information. The Board has a formal and transparent
board nomination and election policy as disclosed in the Company’s Revised Manual on Corporate
Governance. It emphasizes that a stockholder of record, including a minority stockholder, is entitled to vote
for the election of directors.

The Company consistently complies with corporate governance rules and regulations. All
requirements are immediately submitted to the Securities and Exchange Commission, Philippine Stock
Exchange, and other regulators. Disclosures are uploaded in PSE Edge and posted in the Company
website. The Code of Ethics mandates full compliance with all applicable laws and regulations.

SM Prime continues to ensure that risk management and control structures and procedures are in
place to safeguard its workforce, operations, and customers against emergencies and natural and
manmade disasters which includes the implementation of Business Continuity Management System
(BCMS). SM Malls have served as safe haven of their respective communities during disaster scenarios.

SM Prime Holdings Inc. believes that good corporate governance is essential to the continued
success of its business, and is dedicated promote a culture of fairness, accountability and transparency to
all levels within the organizations. The company’s good corporate governance practices have helped
established SM as strong brand which customers, investors, business partners and other stakeholder’s
trust. SM Prime’s intent to create value at all times in all businesses it operates, is marked not just by
product quality and service excellence but, more importantly, has a heart that cares for its customers,
communities and its environment to ensure sustainable growth and progress.