SECURITIES AND EXCHANGE COMMISSION SEC FORM – ACGR … · NED Ayala Land, Inc. Nomination...

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SECURITIES AND EXCHANGE COMMISSION

SEC FORM – ACGR

ANNUAL CORPORATE GOVERNANCE REPORT

GENERAL INSTRUCTIONS

(A) Use of Form ACGR

This SEC Form shall be used to meet the requirements of the Revised Code of Corporate Governance.

(B) Preparation of Report

These general instructions are not to be filed with the report. The instructions to the various captions of the form

shall not be omitted from the report as filed. The report shall contain the numbers and captions of all items. If

any item is inapplicable or the answer thereto is in the negative, an appropriate statement to that effect shall be

made. Provide an explanation on why the item does not apply to the company or on how the company’s practice

differs from the Code.

(C) Signature and Filing of the Report

A. Three (3) complete set of the report shall be filed with the Main Office of the Commission.

B. At least one complete copy of the report filed with the Commission shall be manually signed.

C. All reports shall comply with the full disclosure requirements of the Securities Regulation Code.

D. This report is required to be filed annually together with the company’s annual report.

(D) Filing an Amendment

Any material change in the facts set forth in the report occurring within the year shall be reported through SEC

Form 17-C. The cover page for the SEC Form 17-C shall indicate “Amendment to the ACGR”.

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SECURITIES AND EXCHANGE COMMISSION

SEC FORM – ACGR

ANNUAL CORPORATE GOVERNANCE REPORT

1. Report is Filed for the Year December 31, 2016 (updated as of 30 May 2017)

2. Exact Name of Registrant as Specified in its Charter: CEBU HOLDINGS, INC.

3. 20th

Floor, Ayala Center Cebu Tower, Bohol Street, Cebu Business Park, Cebu City 6000

Address of Principal Office Postal Code

4. SEC Identification Number 157912 5. (SEC Use Only)

Industry Classification Code

6. BIR Tax Identification Number 000-551-890-000

7. (032) 888-3700

Issuer’s Telephone number, including area code

8. Unit #701, 7/F, Cebu Holdings Center, Cardinal Rosales Avenue, Cebu Business Park, Cebu City 6000

Former name or former address, if changed from the last report

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TABLE OF CONTENTS

A. BOARD MATTERS………………………………………………………………………………………………………………………….……….5

1) BOARD OF DIRECTORS

(a) Composition of the Board………………………………………………………………………………….………5

(b) Directorship in Other Companies……………………………………………………………………………….8

(c) Shareholding in the Company……………………………………….……………………………………......10

2) CHAIRMAN AND CEO……………………………………………………………………………………………………………….11

3) OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS……………………………………. 12

4) CHANGES IN THE BOARD OF DIRECTORS………………………………………………………………………………… 13

5) ORIENTATION AND EDUCATION PROGRAM…………………………………………………………………………… 20

B. CODE OF BUSINESS CONDUCT & ETHICS…………………………………………………………………………………………… 23

1) POLICIES………………………………………………………………………………………………………………………………… 23

2) DISSEMINATION OF CODE………………………………………………………………………………………………….…… 25

3) COMPLIANCE WITH CODE……………………………………………………………………………………………………… 25

4) RELATED PARTY TRANSACTIONS…………………………………………………………………………………………… 25

(a) Policies and Procedures………………………………………………………………………………………… 25

(b) Conflict of Interest………………………………………………………………………………………………… 27

5) FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS…………………………………………………….……28

6) ALTERNATIVE DISPUTE RESOLUTION……………………………………………………………………………………….29

C. BOARD MEETINGS & ATTENDANCE……………………………………………………………………………………………….…….29

1) SCHEDULE OF MEETINGS…………………………………………………………………………………………………………29

2) DETAILS OF ATTENDANCE OF DIRECTORS………………………………………………………………………………..29

3) SEPARATE MEETING OF NON-EXECUTIVE DIRECTORS………………………………………………………………31

4) ACCESS TO INFORMATION……………………………………………………………………………………………………….31

5) EXTERNAL ADVICE……………………………………………………………………………………………………………………32

6) CHANGES IN EXISTING POLICIES……………………………………………………………………………………………….33

D. REMUNERATION MATTERS………………………………………………………………………………………………………………33

1) REMUNERATION PROCESS……………………………………………………………………………………………………….33

2) REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS…………………………………………………….35

3) AGGREGATE REMUNERATION …………………………………………………………………………………………………36

4) STOCK RIGHTS, OPTIONS AND WARRANTS………………………………………………………………………………38

5) REMUNERATION OF MANAGEMENT…………………………………………………………………………………….….39

E. BOARD COMMITTEES……………………………………………………………………………………………………………………….39

1) NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES…………………………………………………..39

2) COMMITTEE MEMBERS……………………………………………………………………………………………………………48

3) CHANGES IN COMMITTEE MEMBERS……………………………………………………………………………………….55

4) WORK DONE AND ISSUES ADDRESSED…………………………………………………………………………………….55

5) COMMITTEE PROGRAM……………………………………………………………………………………………………………57

F. RISK MANAGEMENT SYSTEM……………………………………………………………………………………………………………60

1) STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM…………………………………………..60

2) RISK POLICY……………………………………………………………………………………………………………………………..63

3) CONTROL SYSTEM……………………………………………………………………………………………………………………65

G. INTERNAL AUDIT AND CONTROL………………………………………………………………………………………………………67

1) STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM…………………………………………..67

2) INTERNAL AUDIT

(a) Role, Scope and Internal Audit Function…………………………………………………………………..69

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(b) Appointment/Removal of Internal Auditor………………………………………………………………70

(c) Reporting Relationship with the Audit Committee…………………………………………………..70

(d) Resignation, Re-assignment and Reasons…………………………………………………………………71

(e) Progress against Plans, Issues, Findings and

Examination Trends………………………………………………………..….……………………………………71

(f) Audit Control Policies and Procedures……………………………………………………………………..71

(g) Mechanisms and Safeguards…………………………………………………………………………………...71

H. RIGHTS OF STOCKHOLDERS……………………………………………………………………………………………………………...82

1) RIGHT TO PARTICIPATE EFFECTIVELY IN STOCKHOLDERS’ MEETINGS……………………………………….82

2) TREATMENT OF MINORITY STOCKHOLDERS…………………………………………………………………………….89

I. INVESTORS RELATIONS PROGRAM…………………………………………………………………………………………………..89

J. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES…………………………………………………………………………….92

K. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL…………………………………………………………………….95

L. INTERNAL BREACHES AND SANCTIONS…………………………………………………………………………………………….95

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A. BOARD MATTERS

1) Board of Directors

Number of Directors per Articles of Incorporation 9

Actual number of Directors for the year 9

(a) Composition of the Board

Complete the table with information on the Board of Directors:

Director’s Name

Type [Executive

(ED), Non-

Executive (NED)

or Independent

Director (ID)]

If nominee,

identify the

principal

Nominator in

the last

election (if ID,

state the

relationship

with the

nominator)

Date first

elected

Date last

elected (if

ID, state the

number of

years served

as ID)1

Elected

when

(Annual

/Special

Meeting)

No. of

years

served

as

director

Anna Ma.

Margarita B. Dy

NED

Ayala Land,

Inc.

Nomination

Committee

August 17,

2016

April 24,

2017

Annual

Stockholders’

Meeting

1

Bernard Vincent O.

Dy

NED Ayala Land,

Inc.

Nomination

Committee

August 15,

2014

April 24,

2017

Annual

Stockholders’

Meeting

3 yrs

Aniceto V. Bisnar,

Jr.

ED Ayala Land,

Inc.

Nomination

Committee

January 1,

2015

April 24,

2017

Annual

Stockholders’

Meeting

2 yrs

Emilio J. Tumbocon

NED

Ayala Land,

Inc.

Nomination

Committee

April 2008 April 24,

2017

Annual

Stockholders’

Meeting

9

Jaime E. Ysmael NED Ayala Land,

Inc.

Nomination

Committee


2017

Annual

Stockholders’

Meeting

9

Fr. Roderick C.

Salazar, Jr., SVD

ID N.A. Nomination

Committee


2017

Annual

Stockholders’

Meeting

12

Enrique L.

Benedicto

ID N.A. Nomination

Committee


2017

Annual

Stockholders’

Meeting

14

Pampio A.

Abarintos

ID N.A. Nomination

Committee


2017

Annual

Stockholders’

Meeting

3

Jose Emmanuel H.

Jalandoni

NED

Ayala Land,

Inc.

Nomination

Committee

August 17,

2016

April 24,

2017

Annual

Stockholders’

Meeting

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These nominees were formally nominated to the Nomination Committee by a shareholder of the Company, Ms. Judilyne L. Boholst.

Messrs. Abarintos, Benedicto and Salazar, all incumbent directors, were nominated as independent directors. Ms. Boholst is not related

to any of the nominees for independent directors.

Provide a brief summary of the corporate governance policy that the board of directors has adopted.

Please emphasis the policy/ies relative to the treatment of all shareholders, respect for the rights of

minority shareholders and of other stakeholders, disclosure duties, and board responsibilities.

CHI has adopted a code of corporate governance, as mandated by SEC. This code specifies the role, duties and

responsibilities of the Board of Directors, in line with relevant Philippine laws, rules and regulations, and in

full consistency with the principles of corporate governance.

As the premier real estate company in the region, Cebu Holdings, Inc. (CHI) stands on the bedrock of good

corporate governance, strong business ethics, and sound risk management.

We work to constantly strengthen these foundations of our corporate character to propel our business

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forward, guarantee the continued success of our brand, and widen our circle of influence not only in Cebu but

also around Visayas and Mindanao.

CHI has been listed with the Philippine Stock Exchange (PSE) since 1994. The company fully complies with the

Code of Corporate Governance as mandated by the Securities and Exchange Commission (SEC). This code

specifies the role, duties, and responsibilities of our Board of Directors in line with Philippine laws, and is fully

consistent with the recognized principles of good corporate governance.

On Treatment of Shareholders

CHI welcomes both individual and institutional shareholders who wish to purchase shares of the Company

through the Philippine Stock Exchange (PSE). In compliance with PSE requirements, CHI maintains a minimum

public float of its shares openly traded in the exchange.

On all matters of importance to all investors, the Company observes the principle of fair treatment of all

shareholders. The Company respects the right of shareholders to participate and vote in its annual

stockholders’ meeting. Each common share of stock entitles the person in whose name it is registered in the

books of the Company, to one vote, provided the conditions as regards payment have been complied with.

Shareholders are asked to vote on all matters of fundamental importance.

CHI welcomes the participation of all shareholders by giving them an opportunity to ask, and receive answers

to, questions of relevance to the corporation, its performance and prospects

On Respect for rights of minority shareholders and of other stakeholders

CHI treats all shareholders equitably, and recognize, protect, and facilitate the exercise of their rights through

constant and open communication. Adequate protection is given to minority shareholders against any unfair

conduct on the part of the majority. We impose well-defined rules and explicitly prohibit any shareholder,

officer or employee from unfairly gaining advantages by withholding information from minority shareholders

and the general public.

CHI adopts and observes the basic principle of “one vote per one common share”. The vote may be made in

person, in proxy, or electronically. Strict adherence to applicable rules and regulations is followed in cases of

proxy voting or voting in absentia.

CHI commits to provide adequate protection to minority shareholders from abusive and inequitable conduct

on the part of majority shareholders, directors, officers and employees of the Company. In this regard, CHI

has adopted clear rules and explicit prohibition against any shareholder, director, officer or employee

benefiting from knowledge not available to minority shareholders and the general public.

Our stakeholders and the way in which we engage them, are defined in our stakeholder engagement process.

As a responsible corporate citizen, CHI upholds all laws concerning the proper and fair treatment of all its

external stakeholders, particularly our customers, creditors, the environment and its sustainability, the

government and the local communities where we have operations.

On Disclosure duties

CHI is committed to high standards of disclosure and transparency to enable the investing community to

understand the true financial condition of the Company and the quality of its corporate governance.

CHI follows a mature disclosure policy and procedure that are practical and aligned with best practices and

regulatory expectations.

The Company commits to meet all disclosure requirements, mandated by its regulators, particularly those

involving material events. Moreover, the Company shall make such disclosure within the prescribed reporting

period.

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To ensure the adequacy and comprehensiveness of each disclosure, CHI adopts the following disclosure

practices:

• Aim to release our financial statement 60 calendar days after the close of the financial year. In no case

shall the issuance of the audited financial statement be later than 90 business days after the close of

the financial year. In addition, the Board of Directors shall issue a certification together with the

audited financial statement declaring the report to be fair and accurate. For 2016, the Board has

reviewed and affirmed the true and fair representation of the annual financial statement report.

• Update our company website to provide information on the financial as well as non-financial results

of CHI’s business operations—including any changes in the company’s ownership structure and

business group structure. The website has a downloadable Integrated Annual and Sustainability

Report as well as notices of the Annual Stockholders’ Meeting, current by-laws, articles of

incorporation, and other standard disclosures. We likewise aim to provide accurate and current

information on our company’s history, governance, products and services, investor information, and

journey towards sustainability in our website.

• Address investor concerns through the joint effort of our Control and Analysis Department and the

Corporate Communications Department. The names and contact details of the assigned officers in

these offices for such concerns are made available to the public.

On Board Responsibilities

The overall stewardship of our company rests on the Board of Directors, the highest governing authority

within CHI’s management structure. The Board is responsible for the company’s long-term success and

sustained global competitiveness. It ensures that CHI’s obligations to its stakeholders are met while adhering

to the principles of sound corporate governance as a model of best practices in the corporate sector.

The duties and responsibilities of the Board of Directors include, but are not limited to, the following:

• Approval and adoption of a corporate policy and corresponding strategy, with proactive oversight of

strategy execution;

• Annual review of the company’s vision and mission statement, providing clarification on the company

by-laws when necessary;

• Approval and direction for the management of the company’s funds, real properties, and other

assets—including their safekeeping, purchase, sale or mortgage, issuance of stocks, investments, as

well as the annual plans, budget and expense accounts;

• Monitoring and assessment of the company’s operational performance and internal regulation, its

committees, the president and CEO, and other key officials, as well as the performance of its own

individual members, and creating committees or other bodies and new office departments deemed

necessary in running the affairs of the company;

• Establishment of an accountability system, which includes provision for rewards, incentives and

penalties;

• Exercise of prerogative in legal matters pertaining to the company’s conduct of business;

• Approval of the company’s financial statements, and annual submission of CHI’s Balance Sheet, Income

Statement and Annual Report to the General Meeting of Stockholders—including calling for special

meetings when necessary;

• Approval and direction for personnel movements, as well as employee benefits—including pensions,

retirement gratuity or life insurance protection; and the

• Promotion of a culture of ethics, social responsibility, and good governance, and ensuring that all

directors, executives and employees adhere to the company’s Code of Ethics.

The Board has adopted a Board Charter which contains clear and specific guidelines on internal processes,

particularly the types of decisions requiring Board approval.

Thus far, it has approved and adopted the company’s mission and core values as well as a Board calendar

which allows for a periodic review of the company’s governance charter and its corporate strategy map with

its corresponding performance scorecards.

Our management committee keeps the Board updated on issues concerning the company’s strategy, risk

management, and compliance, and explains any deviation from the approved plans and targets.

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How often does the Board review and approve the vision and mission?

The Board reviews its vision and mission as necessary or at least annually as an agenda through its regular

scheduled Board meetings.

(b) Directorship in Other Companies

(i) Directorship in the Company’s Group2

Identify, as and if applicable, the members of the company’s Board of Directors who hold the office of

director in other companies within its Group:

Director’s Name Corporate Name of the

Group Company

Type of Directorship

(Executive, Non-

Executive,

Independent). Indicate

if director is also the

Chairman.

Bernard Vincent O. Dy Ayala Land, Inc. Executive Director

Cebu Property Ventures & Development

Corp. Non-Executive Director

Serendra, Inc.

Ayala Land International Sales, Inc.

Amicassa Process Solutions, Inc.

Amaia Land Corporation

Avida Land Corporation

Alveo Land Corporation

Alviera Country Club, Inc.

Ayalaland Commercial Reit, Inc.

Lagdigan Land Corporation

Cagayan De Oro Gateway Corp.

BGSouth Properties, Inc.

BGNorth Properties, Inc.

BGWest Properties, Inc.

Portico Land Corp.

Bellavita Land Corporation

Avencosouth Corporation

Ayagold Retailers, Inc.

Station Square East Commercial

Corporation

Aviana Development Corporation

ALI Capital Corporation

Ayala Property Management Corporation

Nuevo Centro, Inc.

Chairman

Aniceto V. Bisnar, Jr. Cebu Property Ventures & Development

Corp.

Executive Director

Adauge Commercial Corporation

Amaia Southern Properties, Inc.

Chairman

Cebu District Property Enterprise, Inc.

Accendo Commercial Corporation

Westview Commercial Ventures

Corporation

Cagayan de Oro Gateway Corporation

Bonifacio Estates Services Corp.

Ceci Realty, Inc.

Aurora Properties, Inc.

Vesta Property Holdings, Inc.

Non-Executive Director

Anna Ma. Margarita B. Dy Cebu Property Ventures & Development

Corp.



Vesta Properties Holdings, Inc.


2 The Group is composed of the parent, subsidiaries, associates and joint ventures of the company.

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Ceci Realty, Inc.

AyalaLand Medical Facilities Leasing, Inc.

Next Urban Alliance Development Corp.

Jaime E. Ysmael Aprisa Business Process Solutions, Inc.

Anvaya Cove Beach and Nature Club, Inc.

Anvaya Cove Golf and Sports Club, Inc.

Chairman

Alabang Commercial Corp.

Amaia Land Corp.

Avida Land Corp.

AG Counselors Corporation

Ayala Greenfield Development Corporation

North Triangle Depot Commercial Corp.

Station Square East Commercial Corp.

Ceci Realty, Inc.


Vesta Properties Holdings, Inc.

Alviera Country Club, Inc.

Nuevocentro, Inc.

ALI Eton Property Development

Corporation

CMPI Land, Inc.


Jose Emmanuel H. Jalandoni AyalaLand Offices

AyalaLand Hotels and Resorts Corporation

Cebu Insular Hotel Co., Inc.

Ten Knots Philippines, Inc.

Ten Knots Development Corporation

Chirica Resorts Corporation

Bacuit Bay Development Corporation

Ecoholdings Company, Inc.

Pangulasian Island Resort Corp.

Paragua Eco-Resort Ventures, Inc.

Sicogon Town Hotel, Inc.

Lio Resort Ventures, Inc.

North Liberty Resort Ventures, Inc.

Laguna Technopark, Inc.

Arvo Commercial Corporation

Central Block Developers, Inc.

Arca South Terminal, Inc.

ALI Commercial Center, Inc.

Asterio Technopad Incorporated

Chairman

OCLP Holdings, Inc.

North Triangle Depot Commercial

Corporation

Alabang Commercial Corporation

Station Square East Commercial

Corporation

Accendo Commercial Corporation

Integrated Eco-Resort, Inc.

Philippine Integrated Energy Solutions, Inc.

ALI-Eton Property Development Corp./

Philippine FamilMart CVS, Inc.


(ii) Directorship in Other Listed Companies

Identify, as and if applicable, the members of the company’s Board of Directors who are also directors of

publicly-listed companies outside of its Group:

Director’s Name Name of Listed Company

Type of Directorship

(Executive, Non-Executive,

Independent). Indicate if

director is also the Chairman.

Enrique L. Benedicto

SPC Power Corporation Member, (Independent Director)

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(iii) Relationship within the Company and its Group

Provide details, as and if applicable, of any relation among the members of the Board of Directors, which

links them to significant shareholders in the company and/or in its group:

Director’s Name Name of the

Significant Shareholder Description of the relationship

Bernard Vincent O. Dy Ayala Land, Inc. President of Ayala Land, Inc.

Anna Ma. Margarita B. Dy Ayala Land, Inc. Senior Vice President, Head–

Strategic LandBank Management

Group (SLMG) of Ayala Land, Inc.

Jaime E. Ysmael Ayala Land, Inc. Senior Vice President, Group CFO &

Compliance Officer of Ayala Land,

Inc.

Jose Emmanuel H. Jalandoni Ayala Land, Inc. Senior Vice President, Group Head–

Commercial Malls and Offices of

Ayala Land, Inc.

Aniceto V. Bisnar, Jr. Ayala Land, Inc. Vice President of Ayala Land, Inc.

(iv) Has the company set a limit on the number of board seats in other companies (publicly listed, ordinary

and companies with secondary license) that an individual director or CEO may hold simultaneously? In

particular, is the limit of five board seats in other publicly listed companies imposed and observed? If

yes, briefly describe other guidelines:

Yes. The company has a Policy on Multiple Board Seats. The Company shall ensure that adequate time

and attention is given to the fulfillment of the directors of their duties. The independent directors shall

hold no more than five board seats in publicly-listed companies and executive directors shall hold no

more than two board seats in listed companies outside the Corporation’s group.

Independent directors may serve for a period of not more than nine (9) consecutive years.

Guidelines

Maximum Number of

Directorships in other

companies

Executive Director Limit of five (5) board seats in any group of publicly-listed companies.


CEO

(c) Shareholding in the Company

Complete the following table on the members of the company’s Board of Directors who directly and

indirectly own shares in the company:

Name of Director Number of Direct shares

Number of

Indirect shares / Through

(name of record owner)

% of

Capital

Stock

Bernard Vincent O. Dy 1 - 0.0000%

Aniceto V. Bisnar, Jr. 1 - 0.0000%

Jose Emmanuel H.

Jalandoni* 1 - 0.0000%

Anna Ma. Margarita B.

Dy* 1 - 0.0000%

Emilio J. Tumbocon 112,500 - 0.0059%

Enrique L. Benedicto 1 - 0.0000%

Fr. Roderick C. Salazar, Jr 1 - 0.0000%

Pampio A. Abarintos 1,000 - 0.0001%

Jaime E. Ysmael 3,375 13,500 (PCD Nominee

Corp-Filipino 0.0009%

TOTAL 116,881 13,500 0.0069% *Mr. Jalandoni and Ms. Dy replaces Ms. Javier and Mr. Abacan effective August 17, 2016.

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2) Chairman and CEO

(a) Do different persons assume the role of Chairman of the Board of Directors and CEO? If no, describe the

checks and balances laid down to ensure that the Board gets the benefit of independent views.

Yes � No

Identify the Chair and CEO:

Chairman of the Board Anna Ma. Margarita B. Dy*

CEO/President Aniceto V. Bisnar, Jr.

*- effective April 24, 2017

(b) Roles, Accountabilities and Deliverables

Define and clarify the roles, accountabilities and deliverables of the Chairman and CEO.

Chairman Chief Executive Officer

Role Preside at all meetings of the Board; Minimum internal control mechanisms for

management’s operational responsibility

Accountabilities

To listen to and address satisfactorily any

governance-related issues that non-

executive independent directors may raise;

Ensuring that the Board of Directors

exercises strong oversight over the

Company and its management such that

the prospect of any corporate scandals is

minimized if not totally eliminated.

Ultimately accountable for Corporation’s

organizational and procedural controls.

Deliverables

• Schedule meetings to enable the

Board to perform its duties

responsibly while not interfering with

the flow of the Corporation’s

operations;

• Prepare the meeting agenda in

consultation with the CEO;

• Exercise control over quality, quantity

and timeliness of the flow of

information between Management

and the Board; and

• Assist in ensuring compliance with the

Corporation’s guidelines on corporate

governance

• Have general supervision of the

business, affairs, and property of the

Corporation, and over its employees

and officers;

• See to it that all orders and resolutions

of the Board of Directors are carried

into effect;

• Submit to the Board as soon as

possible after the close of each fiscal

year, and to the stockholders at the

annual meeting, a complete report of

the operations of the Corporation for

the preceding year, and the state of its

affairs; and

• Report to the Board from time to time

all matters within his knowledge which

the interest of the Corporation may

require to be brought to their notice.

Explain how the board of directors plan for the succession of the CEO/Managing Director/President and the top

key management positions?

The succession plan is taken up as one of the discussion point during one of the regular Board meetings scheduled

within each year.

The Nomination Committee likewise reviews and discloses succession plans for members of the Board and key

officers.

One of the functions required by The Board of Directors per Corp Governance Manual is to adopt a professional

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development program for employees and officers, and succession planning for senior management and key

positions in the Corporation.

3) Other Executive, Non-Executive and Independent Directors

Does the company have a policy of ensuring diversity of experience and background of directors in the board?

Please explain.

Yes. The company has a policy ensuring diversity of experience and background of directors in the Board. The

Revised Manual of Corporate Governance reflects the relevant qualifications of directors, including their

membership to the Board’s various committees. Apart from educational requirements, a director should have

sufficient understanding of business fundamentals and experience in managing a business.

The company is headed by a competent, working board that fosters its long-term competitiveness and

profitability in a manner consistent with its corporate objectives and the long-term interests of its shareholders

and other stakeholders.

The CHI Board brings to the organization a balanced mix of business, legal, and finance competencies, with each

director capable of adding value and rendering independent judgment in relation to the formulation of sound

corporate policies on issues of strategy, resources, standards and performance related to corporate social

responsibility, and environmental and economic sustainability.

The Company also requires that at least one of its non-executive directors should have prior working experience

in the sector or broad industry group to which our company belongs.

The Board’s composition must reflect the necessary knowledge, skills and experience required to properly

perform its duties. Thus, it regularly reviews its own composition, taking into account the evolving requirements

of the company and best practices in corporate governance. It encourages the selection of a mix of competent

directors to ensure independence and diversity, as well as adequate representation for women in the Board.

Does it ensure that at least one non-executive director has an experience in the sector or industry the company

belongs to? Please explain.

Yes, the Company requires that at least one of its non-executive directors should have prior working experience in

the sector or broad industry group to which the company belongs.

Define and clarify the roles, accountabilities and deliverables of the Executive, Non-Executive and Independent

Directors:

Executive Non-Executive Independent Director

Role

Responsible for the

successful leadership and

management of the

organization according to

the strategic direction set

by the Board of Directors.

Custodians of

the governance process.

Constructively contribute

to the development of the

strategy of the

Corporation. Provides

independent views to the

Board.

Provides independent

perspective in improving

corporate credibility and

governance standards.

Plays an active role in

various committees in the

Company to ensure good

governance.

Accountabilities

Responsible for the day-to-

day an overall operations

of the Company.

Determines the

Corporation’s activities by

putting the Corporation’s

targets in concrete terms

and by formulating the

basic strategies for

achieving these targets

Contributes to

development of strategy

and achievement of

Corporation’s goals,

monitors executive activity.

Provides oversight of the

financial reporting process,

internal controls, internal

and external audit, risk

management.

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Deliverables

Puts in place the

infrastructure for the

Company’s success by

establishing the following

mechanisms in the

organization :1). Purposeful

Legal and organizational

structure, 2.) useful

planning, control, and risk

management systems, 3.)

information systems, 4.)

foral plan of succession for

key positions in the

Company.

Provides independent

views and analysis on the

performance and

management in meeting

the goals and strategies of

the Corporation.

Monitoring of achievement

of performance, service

quality, accuracy of

financial information, and

systems of internal control.

As an oversight function:

check financial reports

against compliance with

financial reporting

standards, periodic review

of financial statements,

approves audit plans prior

to conduct of audit

(internal and external),

Provide the company’s definition of "independence" and describe the company’s compliance to the definition.

The Company defines an independent director as one holding no interests or relationships with the Company that

may hinder his independence from the Company or management or would interfere with the exercise of

independent judgment in carrying out the responsibilities of a director. The Company complies with the rules of

the SEC with regard to the nomination and election of an independent director.

The Company nominates to its Board of Directors only those individuals who can and do exercise independent

judgment. In this regard, CHI follows the policy of excluding from the list of independent directors, those with any

close relationship, either by blood (within the second degree of consanguinity) or marriage, with significant

stockholders, the CEO or any member of the Company’s top management team. The Company also excludes from

the list of independent directors those who may have served the Company as an officer or significant service

provider, unless two years have elapsed since the termination of that service.

As a publicly-listed company in the PSE, CHI complies with the legal requirement to have at least two independent

directors or at least twenty percent of its board size, whichever is less. CHI has three independent directors, Fr.

Roderick C. Salazar, Jr., SVD, Enrique L. Benedicto and Pampio A. Abarintos. Their identity as independent

directors is clearly marked, with the information on the date of their first election to the Board of Directors.

Does the company have a term limit of five consecutive years for independent directors? If after two years, the

company wishes to bring back an independent director who had served for five years, does it limit the term for no

more than four additional years? Please explain.

Yes. The Company has a term limit for its independent directors. Independent directors may serve for a period of

not more than nine years and may hold only up to five board seats simultaneously.

4) Changes in the Board of Directors (Executive, Non-Executive and Independent Directors)

(a) Resignation/Death/Removal

Indicate any changes in the composition of the Board of Directors that happened during the period:

Name Position Date of Cessation Reason

Antonio S. Abacan, Jr. Member of the Board August 17, 2016

Resignation as

member of the board

effective August 17,

2016 for personal

reasons

Maria Theresa M.

Javier Member of the Board June 01, 2016

Resignation as

member of the board

effective June 01,

2016 for personal

reasons

Francis O. Monera President and December 31, 2014 Retirement by end of

14

Director the calendar year

2014

Antonino T. Aquino

Director and

Chairman of the

Board

August 15, 2014 Retirement

Maria Theresa M.

Javier

Treasurer(Executive

Director) July 14, 2014

Resignation as

company treasurer

effective July 14, 2014

for personal reasons

Hernando O. Streegan Member April 8, 2014 Retirement

(b) Selection/Appointment, Re-election, Disqualification, Removal, Reinstatement and Suspension

Describe the procedures for the selection/appointment, re-election, disqualification, removal, reinstatement

and suspension of the members of the Board of Directors. Provide details of the processes adopted

(including the frequency of election) and the criteria employed in each procedure:

Procedure Process Adopted Criteria

a. Selection/Appointment

(i) Executive Directors

The Nomination Committee of

the Board installs and

maintains a process that

ensures all directors

nominated for election at

annual stockholder’s meeting

have all the qualifications and

none of the disqualifications to

serve as Directors required by

pertinent rules and regulations

(i.e., SEC, By-Laws, Revised

Manual of Corporate

Governance. The Nomination

Committee reviews and

evaluates the qualifications of

all persons nominated in the

Company that require

appointment by the Board.

Elected at the Annual Meeting

by the Companies’

stockholders who are entitled

to vote

Shareholders have the right to

elect, remove and replace

directors and vote on certain

corporate acts in accordance

with the Corporation Code.

Cumulative voting shall be

used in the election of

directors. Directors may be

removed with or without

cause, but directors shall not

be removed without cause if it

will deny minority

CHI adopts the principle of

“one vote per common

share”

To qualify, the Director must

own at least 1 share of capital

stock; be a college graduate

or have sufficient

understanding of the

fundamental of doing

business of sufficient

experience in managing a

business in substitute for

such formal education;

Must also possess relevant

qualification, such as previous

business experience,

membership in good standing

in relevant industry, and

membership in business or

professional organizations,

must possess integrity and

shall be assiduous.

15

shareholders representation in

the Board. Removal of

directors requires an

affirmative vote of two-thirds

(2/3) of the outstanding capital

of the Corporation.

(ii) Non-Executive Directors


by the Companies’


to vote



share”




or have sufficient















shall be assiduous.

(iii) Independent Directors


by the Companies’


to vote



share”




or have sufficient















shall be assiduous.

Independent directors must

16

constitute 20% of the

members of the board, but

not lower than two (2). Must

hold no interests or

relationships with the

Company that may hinder

independence. The

Company nominates to the

Board only those who can

and do exercise independent

judgment.

CHI follows the policy of

excluding from the list of

independent directors, those

with any close relationship,

either by blood (within the

second degree of

consanguinity) or marriage,

with significant stockholders,

the CEO or any member of

the Company’s top

management team. The

Company also excludes from

the list of independent

directors those who may have

served the Company as an

officer or significant service

provider, unless two years

have elapsed since the

termination of that service.

b. Re-appointment

(i) Executive Directors Assessment of qualifications

and disqualifications

By Nomination Committee

Re-appointed at the Annual

Meeting by the Companies’


to vote



share”

Must not possess any of the

criteria for disqualification.



c. Permanent Disqualification


and disqualifications by

Nomination Committee

Any person finally convicted

by a competent judicial or

administrative body for crime

involving purchase or sale of

securities, crime as an

underwriter, broker, dealer,

investment corporation,

investment adviser, principal

distributor, mutual fund

dealer, futures commission

merchant, commodity trading

advisor, floor broker; and any

crime arising out of his



17

relationship with a bank,

quasi-bank, trust company,

investment house or as an

affiliated person of any of

them;

Any person who, by reason of

any misconduct, after hearing

or trial, is permanently or

temporarily enjoined by

order, judgment or decree of

the Commission or any

court or other administrative

body of competent

jurisdiction from: (i) acting as

an underwriter, broker,

dealer, investment adviser,

principal distributor, mutual

fund dealer, futures

commission merchant,

commodity trading advisor,

or a floor broker; (ii) acting as

a director or officer of a bank,

quasi-bank, trust company,

investment house,

investment company or an

affiliated person of any of

them; (iii) engaging in or

continuing any conduct or

practice in connection with

any such activity or willfully

violating laws governing

securities, and banking

activities. Such

disqualification shall also

apply when such person is

currently subject to an

effective order of the

Commission or any court or

other administrative body

refusing, revoking or

suspending any registration,

license or permit issued

under the Corporation Code,

Securities Regulation Code, or

any other law administered

by the Commission or Bangko

Sentral ng Pilipinas, or under

any rule or regulation

promulgated by the

Commission or Bangko

Sentral ng Pilipinas, or

otherwise restrained to

engage in any activity

involving securities and

banking. Such person is also

disqualified when he is

currently subject to an

18

effective order of a self-

regulatory organization

suspending or expelling him

from membership or

participation or from

association with a member or

participant of the

organization;

Any person finally convicted

judicially of an offense

involving moral turpitude or

fraudulent acts or

transgressions;

Any person finally found by

the Commission or a court or

other administrative body to

have willfully violated, or

willfully aided, abetted,

counseled, induced or

procured the violation of, any

provision of the Securities

Regulation Code, the

Corporation Code of the

Philippines, or any other law

administered by the SEC, or

any rule, regulation or order

of the Commission or the

Bangko Sentral ng Pilipinas;

Any person judicially declared

to be insolvent;

Any person finally found

guilty by a foreign court or

equivalent financial

regulatory authority of acts,

violations or misconduct

listed in the foregoing

paragraphs; and

Any person convicted by final

and executory judgment of an

offense punishable by

imprisonment for a period

exceeding six (6) years, or a

violation of the Corporation

Code, committed within five

(5) years prior to the date of

his election or appointment.

d. Temporary Disqualification

(i) Executive Directors Temporary disqualification

shall be at the discretion of the Refusal to fully disclose the

extent of his business interest (ii) Non-Executive Directors

19


Board and shall require a

resolution of a majority of the

Board.

Assessment of qualifications



A temporarily disqualified

director shall, within sixty (60)

business days from such

disqualification, take the

appropriate action to remedy

or correct the disqualification.

If he fails or refuses to do so

for unjustified reasons, the

disqualification shall become

permanent.

as required under the

Securities Regulation Code

and its Implementing Rules

and Regulations. This

disqualification shall be in

effect as long as his refusal

persists;

Absence or non-participation

for whatever reason(s) for

more than fifty percent (50%)

of all meetings, both regular

and special, of the Board of

Directors during his

incumbency, or any twelve

(12) month period during said

incumbency unless the

absence is due to illness,

death in the immediate family

or serious accident. This

disqualification applies for

purposes of the succeeding

election;

Dismissal/termination from

directorship in another listed

corporation for cause. This

disqualification shall be in

effect until he has cleared

himself of any involvement in

the alleged irregularity;

Being under preventive

suspension by the

Corporation for any reason;

and

Conviction that has not yet

become final referred to in

the grounds for

disqualification of directors;

e. Removal

(i) Executive Directors Cumulative voting shall be

used in the election of

directors.

Directors may be removed

with or without cause, but

directors shall not be removed

without cause if it will deny

minority shareholders

representation in the Board.

Removal of directors requires

an affirmative vote of two-

thirds (2/3) of the

outstanding capital of the

Corporation.

The commission of a third

violation of the Revised

Manual of Corporate

Governance by any member

of the Board shall be a

sufficient cause for removal



20

from directorship.

f. Re-instatement






stock; be a college graduate or

have sufficient understanding

of the fundamental of doing



business in substitute for such

formal education;








must possess integrity and shall

be assiduous. He will be

evaluated also based on his

previous contributions to the

Corporation.



g. Suspension




Violation of provisions in the

Revised Manual of Corporate

Governance.

Suspension to be imposed

upon second violation of the

provisions.



Voting Result of the last Annual General Meeting April 24, 2017 – 1,634,215,913 or 85.11%

Name of Director Votes Received

Bernard Vincent O. Dy 1,634,214,713 or 85.11%

Aniceto V. Bisnar, Jr. 1,634,214,713 or 85.11%

Anna Ma. Margarita B. Dy 1,634,214,713 or 85.11%

Jaime E. Ysmael 1,634,214,713 or 85.11%

Jose Emmanuel H. Jalandoni 1,634,214,713 or 85.11%

Emilio J. Tumbocon 1,634,214,713 or 85.11%

Fr. Roderick C. Salazar, Jr., SVD 1,634,214,713 or 85.11%

Enrique L. Benedicto 1,634,214,713 or 85.11%

Pampio A. Abarintos 1,634,214,713 or 85.11%

5) Orientation and Education Program

(a) Disclose details of the company’s orientation program for new directors, if any.

The company encourages Board members to participate in continuing professional education programs

particularly on corporate governance. An orientation program for new directors is held whenever necessary to

properly equip and prepare them for their role as members of the Board.

21

Aside from the regular corporate governance training facilitated by the ICD, we ensured the perfect attendance of

all members of the Board to the Ayala group of companies’ annual SEC-accredited corporate governance summit

in 2016. The Corporate Governance and Risk Management Summit was held on March 8, 2016 at the Fairmont

Hotel. Aimed at educating board committee members on best practices in corporate governance, the summit

covered various topics including the ASEAN Corporate Governance Blueprint, Institutional Investors’ Perspective

on Corporate Governance, and various Corporate Governance updates.

Included in the Company’s Board protocol are policies concerning the “skills and competencies” of the Board of

Directors. These policies include: The Company requires that at least one of its nonexecutive directors should

have prior working experience in the sector or broad industry group to which the Company belongs. Requiring all

directors to undergo an orientation program on corporate governance. CHI also actively encourages and supports

its directors to attend continuing education programs on corporate directorship.

(b) State any in-house training and external courses attended by Directors and Senior Management3 for the

past three (3) years:

All directors were able to attend Corporate Governance-related seminars and trainings offered by the

Institute of Corporate Directors (ICD) and those in coordination with Ayala Corporation’s (AC) Corporate

Governance team. These trainings include the following:

1. Corporate Governance and Risk Management Summit (AC and ICD)

2. Distinguished Corporate Governance Series (ICD)

In 2016, the following trainings were offered to the Directors and Key Officers of the Company:

1. Corporate Governance and Risk Management Summit (ICD and Ayala Corp)

(c) Continuing education programs for directors: programs and seminars and roundtables attended during the

year.

For 2014:

Name of

Director/Officer Date of Training Program

Name of Training

Institution

Francis O. Monera Feb. 4, 2014 Corporate Governance and

Risk Management Summit

The Institute of Corporate

Directors (ICD)

Emilio J. Tumbocon Feb. 4, 2014 Corporate Governance and



Directors (ICD)

Maria Theresa M.

Javier Feb. 4, 2014

Corporate Governance and



Directors (ICD)

Fr. Roderick C.

Salazar, Jr., SVD Feb. 4, 2014




Directors (ICD)

Enrique L. Benedicto Feb. 4, 2014 Corporate Governance and



Directors (ICD)

Hernando O.

Streegan* Feb. 4, 2014




Directors (ICD)

Enrique B. Manuel,

Jr.-CFO/Compliance

Officer

Feb. 4, 2014 Corporate Governance and



Directors (ICD)

Antonio S. Abacan, Jr. Feb. 5, 2014 Distinguished Corporate

Governance Speaker Series


Directors (ICD)

Pampio A. Abarintos* April 29, 2014 Distinguished Corporate

Governance Speaker Series


Directors (ICD) *PAAbarintos replaces Mr. Hernando O. Streegan

3 Senior Management refers to the CEO and other persons having authority and responsibility for planning, directing

and controlling the activities of the company.

22

For 2015:

Name of


Name of Training

Institution

Bernard Vincent O.

Dy Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Aniceto V. Bisnar, Jr. Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Emilio J. Tumbocon Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Jaime E. Ysmael Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Maria Theresa M.

Javier Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Fr. Roderick C.

Salazar, Jr., SVD Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Enrique L. Benedicto Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Pampio A. Abarintos Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Enrique B. Manuel,

Jr.-CFO/Compliance

Officer

Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

June Vee D.

Monteclaro-Navarro-

Corporate Secretary

Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Nimfa Ambrosia L.

Perez-Paras-Asst.

Corporate Secretary

Feb. 18, 2015

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Antonio S. Abacan, Jr. April 22, 2015 Annual Training Program

for Corporate Governance


Directors (ICD)

For 2016:

Name of


Name of Training

Institution

Bernard Vincent O.

Dy March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Aniceto V. Bisnar, Jr. March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Emilio J. Tumbocon March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Jaime E. Ysmael March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Maria Theresa M.

Javier March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

23

Antonio S. Abacan, Jr. March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Fr. Roderick C.

Salazar, Jr., SVD March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Enrique L. Benedicto March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Pampio A. Abarintos March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Jose Emmanuel H.

Jalandoni March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Anna Ma. Margarita

B. Dy March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Enrique B. Manuel,

Jr.-CFO/Compliance

Officer

March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

June Vee D.

Monteclaro-Navarro-

Corporate Secretary

March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Nimfa Ambrosia L.

Perez-Paras-Asst.

Corporate Secretary

March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

Noel F. Alicaya-

Finance & Control

Officer/Chief Risk

Officer

March 8, 2016

Ayala Corporate

Governance and Risk

Management Summit


Directors (ICD)

B. CODE OF BUSINESS CONDUCT & ETHICS

1) Discuss briefly the company’s policies on the following business conduct or ethics affecting directors, senior

management and employees:

Business Conduct &

Ethics Directors Senior Management Employees

(a) Conflict of Interest

The Code of Ethical

Behavior outlines the

general expectations

and set standards for

behavior and ethical

conduct. It provides

guidelines for all

directors, officers and

CHI employees, and

that of its subsidiaries

and affiliate. It aims to

promote and foster

observance of

principles founded on

ethics, sustainability,

social responsibility

and good governance.

The Company has a

Conflict of Interest Policy

that covers all senior and

non-senior personnel of

the Company, including

its subsidiaries and

affiliates. The policy

serves as a guide in the

manner by which all

Company employees, its

subsidiaries and affiliates

are to conduct

themselves in going about

their jobs in pursuit of the

business of the Company.

This policy provides the

parameters by which the

employees are guided in

The Code of Ethical Behavior

is intended to be read in

conjunction with the

Company’s Human

Resources Manual of

Personnel Policies which

includes the Code of

Conduct governing

acceptable office conduct

for the orderly operation of

the Company as well as for

the protection of the rights,

safety and benefit of the

total employee force.

24

CHI and its employees

commit to adhere to

the Company’s core

values in conducting

personal and business

affairs.

the propriety of their

actions, decisions and

business practices.

(b) Conduct of Business

and Fair Dealings

A director is required

to conduct fair

business transactions

with the corporation

and ensure that

personal interest does

not bias Board

decisions. A director

shall not use his

position to make profit

or to acquire benefit or

advantage for himself

and/or his related

interests. He should

avoid situations that

may compromise his

impartiality. He should

observe the conflict of

interest policy stated in

the Manual of

Corporate Governance.

CHI seeks to adhere to a

high level of moral

conduct and fair dealings

with all its stakeholders.

The Company believes

this is the basis and

foundation for building

long-term, mutually-

beneficial relationships.

It is the policy of CHI that

directors, officers and

employees of the

Company who are

considered to have

knowledge, from time to

time, of

materials facts or changes

in the affairs of CHI, which

have not been

disclosed to the public,

including any information

likely to affect the

market price of CHI’s

securities, cannot buy or

sell (“trade”) CHI

securities,

except in accordance with

this policy.

CHI employees who are

transacting (also referred to

as the act of buying

and selling) for their

respective accounts in CHI

shares of stock/securities

are advised to consult the

Company’s policy on insider

trading.

Directors are required to

report their dealings in

company shares within 3

business days.

(c) Receipt of gifts from

third parties

The Conflict of Interest Policy requires that all employees to immediately report to

their superiors any offer or gift of any value given to them or their immediate

family meant to either get favors in return or influence their recommendation or

decision on certain proposals affecting the Company.

(d) Compliance with

Laws & Regulations

The Company commits to comply with all applicable regulatory and statutory

requirements, relevant environmental and occupational health & safety laws and

regulations.

(e) Respect for Trade

Secrets/Use of Non-

public Information

Observe confidentiality. A director shall observe the confidentiality of non-public

information acquired by reason of his position as a director. He should not disclose

any information to any other person without the authority of the Board.

(f) Use of Company

Funds, Assets and

Information

The Code of Ethics covers section on prudent use of Company resources.

All CHI employees are responsible for the proper use of all Company

property covers Company funds, assets and information.

(g) Employment &

Labor Laws &

Policies

The Company complies with all existing labor laws including retrenchment,

redundancy and resignation.

The Company commits to comply with all applicable regulatory and statutory

25

requirement)

(h) Disciplinary action

Covered in Code of Ethical Behavior (Employee Handbook issued to employees and

available in website)

The Code of Ethical Behavior covers all of the Company’s employees, its

subsidiaries and affiliates. It outlines the general expectations of and sets standards

for employee behavior and ethical conduct.

(i) Whistle Blower

As contained in the Code of Ethics, It is the right and obligation of a CHI employee

to bring to the attention of the management, any suspected or observed violation

of the Code, Company policy and Philippine laws.

To reinforce this, CHI has adopted a Whistle-blowing policy to encourage and

empower all our employees, third-party business partners, and other stakeholders

to report any suspected or known illegal or unethical activity.

This policy covers any of the following concerns: (1) conflicts of interest; (2)

misconduct or policy violations; (3) theft, fraud or misappropriation; (4) falsification

of documents; (5) financial reporting concerns, and (6) retaliation complaints.

Our business integrity channels are spearheaded by our company’s Ethics

Committee. These channels that enable our stakeholders to freely report fraud,

violations of laws, rules and regulations, or misconduct, without fear of retaliation.

Our ultimate goal is to give all stakeholders every possible means to come forward

so that they provide information directly to top management or the Board of

Directors. Whistleblowers may report via website through this link:

http://chiwhistle.cebuholdings.com/chiwhistle/, face-to-face meetings, and email.

(j) Conflict Resolution

Board meeting as a

mechanism to handle

conflict resolution.

Discussion during

meeting of the Board

en banc.

A committee may be convened by the President for cases

concerning the non-compliance with this Code.

This Committee is a fact-finding body

and all its reports, particularly as regards functions are

recommendatory in nature. The committee shall

document the proceedings which will form part of the

records of the case. The President will make the final

decision on the case based on the report,

recommendation and/or conclusion of the Committee.

2) Has the code of ethics or conduct been disseminated to all directors, senior management and employees?

Yes, the Code of Ethical behavior has been disseminated to the Company’s directors, senior management and

employees through orientations.

Copy of the Code of Ethical Behavior has been provided to directors and employees of the Company and is also

available via the Company’s website for reference.

3) Discuss how the company implements and monitors compliance with the code of ethics or conduct.

CHI requires all directors, officers, and employees disclose any interest in any transactions of the Company that

may place them in a conflict of interest position. Directors, Key Officers and Company employees are required to

annually disclose any business and family-related transactions to the Company by accomplishing the Conflict of

Interest Disclosure Statement.

4) Related Party Transactions

(a) Policies and Procedures

26

Describe the company’s policies and procedures for the review, approval or ratification, monitoring and

recording of related party transactions between and among the company and its parent, joint ventures,

subsidiaries, associates, affiliates, substantial stockholders, officers and directors, including their spouses,

children and dependent siblings and parents and of interlocking director relationships of members of the

Board.

Related Party Transactions Policies and Procedures

(1) Parent Company

Related party transactions (RPTs) are conducted on an arm’s

length basis and in a manner that ensures fairness to the

company’s best interest, and no less favorable than those

generally available to non-related parties under the same or

similar circumstances.

The Company requires directors and key management

personnel to inhibit themselves from participating in

discussions on a particular agenda when they are conflicted.

Independent directors are likewise requested to review

material and significant RPTs to determine whether these are

in the best interests of the company.

All directors and employees of CHI and its subsidiaries are

required to promptly disclose any business and family related

transactions to the company and/or its subsidiaries to ensure

that potential conflicts of interest are immediately brought

to the attention of management. The company also prohibits

the grant of loans to directors.

The Board may, at its option, require that a related party

transaction that it has approved be also submitted to the

stockholders for consideration and ratification.

(2) Joint Ventures

(3) Subsidiaries

(4) Entities Under Common Control

(5) Substantial Stockholders

(6) Officers including

spouse/children/siblings/parents

In line with the insider trading policy of the company, each

director is required to notify the Board at least one day

before dealing in the company’s shares of stock.

All directors, officers and employees are required to disclose

one business day in advance before they deal in the

Company’ shares. All dealings and transactions in the

Company’s shares by any director, officer, or employee are

to be disclosed within three business days after the

transaction.

CHI requires all directors, officers, and employees to disclose

any interest in any transactions of the Company that may

place them in a conflict of interest position.

CHI has also adopted the rule that directors should inhibit

themselves from participating in any discussion, deliberation,

and decision making concerning any issue or transaction

where they may be conflicted.

(7) Directors including

spouse/children/siblings/parents

All directors, officers and employees are required to disclose

one business day in advance before they deal in the

Company’ shares. All dealings and transactions in the

Company’s shares by any director, officer, or employee are

to be disclosed within three business days after the

27

transaction.

CHI requires all directors, officers, and employees to disclose

any interest in any transactions of the Company that may

place them in a conflict of interest position.

CHI has also adopted the rule that directors should inhibit




(8) Interlocking director relationship

of Board of Directors

CHI has adopted the rule that directors should inhibit




The Company, within the ambit of law, does not permit the

continued service of any director, officer or employee who

has been convicted for insider trading.

A committee of independent directors is given the

responsibility to pass upon any related party transaction with

any material significance, and to render an opinion on

whether the transaction can be cleared, after assessing that

the transaction is in the best interest of the corporation.

(b) Conflict of Interest

(i) Directors/Officers and 5% or more Shareholders

Identify any actual or probable conflict of interest to which directors/officers/5% or more shareholders

may be involved.

Details of Conflict

of Interest (Actual or Probable)

Name of Director/s None to report, all transactions are kept

at arm’s-length Name of Officer/s

Name of Significant Shareholders

(ii) Mechanism

Describe the mechanism laid down to detect, determine and resolve any possible conflict of interest

between the company and/or its group and their directors, officers and significant shareholders.

Directors/Officers/Significant Shareholders

Company Members of the Board are obligated to follow high ethical

standards while bearing in mind the interests of all

stakeholders.

Directors are expected to act only in the best interest of the

company and are required to comply with the Code of

Ethics. Thus, they are required to disclose annually any

conflict of interest through a Disclosure Form. Any material

conflict of interest found shall cause disqualification from

the Board. Moreover, directors are required to abstain from

participating in discussions and voting on any matter where

Group

28

they are in conflict of interest.

In line with the insider trading policy of the company, each

director is required to notify the Board at least one day

before dealing in the company’s shares of stock.

No person shall qualify or be eligible for nomination or

election to the Board if he or she is engaged in any business

which competes with, or is antagonistic to, that of the

company in accordance with the company’s by-laws.

Directors should keep the information contained in

confidential reports or discussions for at least two years,

and ensure that all persons who have access to these

information on their behalf comply with this rule.

The Board ensures the presence and adequacy of internal

control mechanisms for good governance. The Board’s

oversight responsibility include, but shall not be limited to:

• Ensuring presence of organizational and procedural

controls

• Reviewing conflict of interest situations and providing

appropriate remedial measures for the same

• Appointing a CEO with the appropriate ability, integrity,

and experience to fill the role

• Reviewing proposed senior management appointments;

• Ensuring the selection, appointment and retention of

qualified and competent management;

• Institutionalizing the internal audit function; and

• Ensuring the presence of, and regularly reviewing, the

performance and quality of external audit.

A committee of independent directors is given the

responsibility to pass upon any related party transaction

with any material significance, and to render an opinion on

whether the transaction can be cleared, after assessing that

the transaction is in the best interest of the corporation.

5) Family, Commercial and Contractual Relations

(a) Indicate, if applicable, any relation of a family,4 commercial, contractual or business nature that exists

between the holders of significant equity (5% or more), to the extent that they are known to the company:

Names of Related

Significant Shareholders Type of Relationship

Brief Description of the

Relationship

Ayala Land, Inc (66.98%) Parent Company

Nature of Relationship:

Business

Partnership with parent & its

subsidiaries. Expanding the

Company’s portfolio through

use parent’s strength in

property management,

construction, business

development.

(b) Indicate, if applicable, any relation of a commercial, contractual or business nature that exists between the

4 Family relationship up to the fourth civil degree either by consanguinity or affinity.

29

holders of significant equity (5% or more) and the company:

Names of Related

Significant Shareholders Type of Relationship Brief Description

Ayala Land, Inc (66.98%) Parent Company

Nature of Relationship:

Business

Partnership with parent & its

subsidiaries. Expanding the

Company’s portfolio through

use parent’s strength in

property management,

construction, business

development.

(c) Indicate any shareholder agreements that may impact on the control, ownership and strategic direction of

the company:

Name of Shareholders % of Capital Stock affected

(Parties)

Brief Description of the

Transaction

None to report

6) Alternative Dispute Resolution

Describe the alternative dispute resolution system adopted by the company for the last three (3) years in

amicably settling conflicts or differences between the corporation and its stockholders, and the corporation and

third parties, including regulatory authorities.

Alternative Dispute Resolution System

Corporation & Stockholders The Company, as required in its Corporate Governance

Manual, has an established alternative dispute resolution

system that amicably settles conflicts or differences

between the Corporation and its stockholders, and the

Corporation and third parties.

No conflicts or differences have occurred in the last 3

years between the Company and its stockholders, third

parties, regulatory authorities.

Corporation & Third Parties

Corporation & Regulatory Authorities

C. BOARD MEETINGS & ATTENDANCE

1) Are Board of Directors’ meetings scheduled before or at the beginning of the year?

Yes, BOD meetings are scheduled at the beginning of the year. Scheduling is coordinated through the office of

the Corporate Secretary of the Company.

2) Attendance of Directors -for oard & Organizational Meetings

For 2014: Feb. 27, April 8, August 15 and November 11

Board Name Date of

Election

No. of

Meetings Held

during the

year

No. of

Meetings

Attended

%

Chairman Bernard Vincent O. Dy** August

15, 2014 2 2 100%

Chairman Antonino T. Aquino** April 2014 2 2 100%

Member Aniceto V. Bisnar, Jr.*** Nov. 11,

2014 - - 0%

30

Member Francis O. Monera*** April 2014 4 4 100%

Member Maria Theresa M. Javier April 2014 4 3 75%

Member Antonio S. Abacan Jr. April 2014 4 3 75%

Member Emilio J. Tumbocon April 2014 4 4 100%

Member Jaime E. Ysmael April 2014 4 4 100%

Independent Fr. Roderick C. Salazar, Jr., SVD April 2014 4 4 100%

Independent Enrique L. Benedicto April 2014 4 4 100%

Independent Hernando O. Streegan* April 2014 1 1 100%

Independent Pampio A. Abarintos* April 2014 3 3 100% *PPAbarintos elected last April 8, 2014

**BVODy replaces Mr. Antonino T. Aquino effective August 15, 2014 ***AVBisnar replaces Mr. Monera effective January 1, 2015

For 2015: March 11, April 24, August 13, and December 01, 2015

Board Name Date of

Election

No. of

Meetings Held

during the

year

No. of

Meetings

Attended

%

Chairman Bernard Vincent O. Dy April 2015 4 4 100%

Member Aniceto V. Bisnar, Jr.* April 2015 4 4 100%

Member Maria Theresa M. Javier April 2015 4 4 100%

Member Antonio S. Abacan Jr. April 2015 4 3 75%





Independent Pampio A. Abarintos April 2015 4 4 100% *AVBisnar replaces Mr. Monera effective January 1, 2015

For 2016: February 23, April 18 ASM, April 18 Organizational Meeting, August 17, and

November 17, 2016

Board Name Date of

Election

No. of

Meetings Held

during the

year

No. of

Meetings

Attended

%

Chairman Bernard Vincent O. Dy April 2016 5 5 100%

Member Aniceto V. Bisnar, Jr. April 2016 5 5 100%

Member Maria Theresa M. Javier* April 2016 3 3 100%

Member Antonio S. Abacan Jr.* April 2016 3 3 100%





Independent Pampio A. Abarintos April 2016 5 5 100%

Member Jose Emmanuel H. Jalandoni* August

17, 2016 2 2 100%

Member Anna Ma. Margarita B. Dy* August

17, 2016 2 2 100%

*Mr. Jalandoni and Ms. Dy replaces Ms. Javier and Mr. Abacan effective August 17, 2016.

For 2017: February 22, April 24 ASM, April 24 Org Meeting

Board Name Date of

Election

No. of

Meetings Held

during the

year

No. of

Meetings

Attended

%

Chairman Bernard Vincent O. Dy April 23, 2017 3 3 100%

Chairman* Anna Ma. Margarita B. Dy* April 24, 2017 3 3 100%

Member Aniceto V. Bisnar, Jr. April 2017 3 3 100%


31




Independent Pampio A. Abarintos April 2017 3 3 100%

Member Jose Emmanuel H. Jalandoni April 2017 3 3 100%

*AMBDy elected as Chairman as of 24 April 2017 ASM

3) Do non-executive directors have a separate meeting during the year without the presence of any executive? If

yes, how many times?

Yes, non-executive directors meet without any executives present.

In 2016, the non-executive directors conducted at least one meeting without any executives present.

In particular, meetings of the Audit Committee and Risk Committee are held quarterly with session allocated for

an executive session. Both the Committees are comprised of independent/non-executive directors.

Is the minimum quorum requirement for Board decisions set at two-thirds of board members? Please explain.

Two-thirds of the number of directors shall constitute a quorum for transaction of corporate business.

The Board meets at least four times a year. Dissemination of agenda, presentation materials and items for

approval are made available at least three days prior to meeting schedule. Information is provided by the

Corporate Secretary who may also serve as adviser to the board of directors. The passage of important decisions

that significantly impact the Company requires the presence of a quorum of the directors. The Company requires

two thirds of the directors to be present for determining the quorum of the meeting.

CHI requires of its directors, at least 75 percent attendance of all Board meetings. Considerate provision for

electronic presence is given. Individual attendance is required in at least 50 percent of the Board meetings. The

Board undergoes a formal self-rating system annually. Assessments are made on both individual and collective

capacities. Focus is given to level of compliance with leading practices and principles on good governance. Areas

for improvement are determined. Independence, experience, judgment, knowledge, time commitment, and

teamwork are factored in. Group meetings, without the presence of any executive director or management

representative, are supported and arranged for all non-executive directors at least once annually.

4) Access to Information

(a) How many days in advance are board papers5 for board of directors meetings provided to the board?

Dissemination of agenda, presentation materials and items for approval are made available at least three

days prior to meeting schedule.

(b) Do board members have independent access to Management and the Corporate Secretary?

Yes, board members have independent access to management and Corporate Secretary.

(c) State the policy of the role of the company secretary. Does such role include assisting the Chairman in

preparing the board agenda, facilitating training of directors, keeping directors updated regarding any

relevant statutory and regulatory changes, etc?

As per Revised Manual of Corporate Governance, the Corporate Secretary must be a Filipino. He should have

the administrative skills of the chief administrative officer of the Corporation and the interpersonal skills of

the chief human resources officer. If the Corporate Secretary is not the general counsel, then he must have

the legal skills of a chief legal officer. He must also have the financial and accounting skills of a chief financial

officer, and lastly shares the vision and decisiveness of the CEO.

5 Board papers consist of complete and adequate information about the matters to be taken in the board meeting.

Information includes the background or explanation on matters brought before the Board, disclosures, budgets,

forecasts and internal financial documents.

32

Functions of the Corporate Secretary are as follows: 1.) Serve as an adviser to the directors on their

responsibilities and obligations; 2.)Keep the minutes of meetings of the stockholders, the Board of Directors,

the Executive Committee, and all other committees in a book or books kept for that purpose, and shall

furnish copies thereof to the Chairman, the President and other members of the Board as appropriate;

3.)Keep in safe custody the seal of the Corporation and affix it to any instrument requiring the same; 4.)Have

charge of the stock certificate book and such other books and papers as the Board may direct; 5.) Attend to

the giving and serving of notices of Board and shareholder meetings; 6.)Be fully informed and be part of the

scheduling process of other activities of the Board; 7.)Prepare an annual schedule of board meetings and the

regular agendas of meetings, and put the Board on notice of such agenda at every meeting; 8.)Oversee the

adequate flow of information to the Board prior to meetings; and 9.) Ensure fulfillment of disclosure

requirements to the SEC and the PSE.

(d) Is the company secretary trained in legal, accountancy or company secretarial practices? Please explain

should the answer be in the negative.

Yes, the Corporate Secretary is trained legal, accountancy or company secretarial practices.

(e) Committee Procedures

Disclose whether there is a procedure that Directors can avail of to enable them to get information

necessary to be able to prepare in advance for the meetings of different committees:

Yes � No

Committee Details of the procedures

Executive For all Committees of the Board, standard days have been set on

the preparation and dissemination of agenda, presentation

materials, and items for approval prior to the meeting (e.g.., at

least 3-4 days prior to meeting)

Audit

Nomination

Remuneration

Others (Sustainability)

5) External Advice

Indicate whether or not a procedure exists whereby directors can receive external advice and, if so, provide

details:

Procedures Details

Technical Assistance

Seeking Independent Expert or Professional

Advice through Committee meetings. (For

Executive, Nomination, Personnel &

Compensation Committees)

Executive Sessions

Discussion in without any executives present for

Committees (particularly for Audit and Risk

Committees)

The Committee may invite such members of

management and other resource persons to its

meetings and may secure independent expert

and/or professional advice as it may deem

desirable or appropriate.

Discussion in executive session with external and

internal auditors. Discussion of any matter that

the Committee or external auditors believe

should be discussed privately, including results

of audit, year-end financial statements and the

quality of management, financial and accounting

controls.

6) Change/s in existing policies

Indicate, if applicable, any change/s introduced by the Board of Directors (during its most recent term) on

existing policies that may have an effect on the business of the company and the reason/s for the change:

Existing Policies Changes Reason

None to report

33

D. REMUNERATION MATTERS

1) Remuneration Process

Disclose the process used for determining the remuneration of the CEO and the four (4) most highly

compensated management officers:

Discussion and approval of remuneration for CEO and management officers are done through the Compensation

Committee of the Board. The Compensation Committee establishes a formal and transparent procedure for fixing

the remuneration packages of corporate officers and directors. It provides oversight over remuneration of senior

management and other key personnel.

Directors and Executive Officers

Directors

Article IV, Section 15 of the Company’s By-Laws provides:

“Section 10 - The Chairman and members of the Board shall receive such remuneration as may be fixed

by the Board of Directors.”

None of the directors, in their personal capacity, has been contracted and compensated by the Company for

services other than those provided as a director.

The Company has no other arrangement with regard to the remuneration of its existing directors and officers

aside from the compensation received as herein stated.

Executive Officers

In 2016

Name and Principal Position Year Salary Other Variable Pay

Aniceto V. Bisnar Jr.

President

Enrique B. Manuel Jr.

Vice President and Chief Finance

Officer/Compliance Officer

Ma. Clavel G. Tongco

Vice President and Head,

Commercial Business Group

Nerissa N. Josef-Mediano

Vice President and Head, Business

Development and Office Leasing

Group

Ma. Cecilia Crispina T. Urbina

Assistant Vice President and Head,

Corporate Services Group and

Human Resources and

Administration

All above-named Officers as a

group

Actual 2015 P21.34 million P1.02 million


Projected 2017 P25.27 million P0.97 million

All other officers* as a group

unnamed



Projected 2017 P20.16 million P1.51 million

34

In 2015

Name and Principal Position Year Salary Other Variable Pay

Aniceto V. Bisnar Jr.

President

Enrique B. Manuel Jr.

Vice President and Chief Finance

Officer/Compliance Officer


Vice President and Head,

Commercial Business Group


Vice President and Head, Business

Development and Office Leasing

Group

Ma. Cecilia Crispina T. Urbina

Assistant Vice President and Head,

Corporate Services Group and

Human Resources and

Administration

All above-named Officers as a

group

Actual 2014

(Restated)

P21.8 M P1.9 M

Actual 2015 P21.3 M P1.0 M

Projected 2016 P22.4 M P1.1 M

All other officers* as a group

unnamed

Actual 2014 P19.1 M P1.2 M

Actual 2015 P19.1 M P1.4 M

Projected 2016 P20.0 M P1.5 M

* Senior Personnel with pay class of SP-C.

The total annual compensation was all paid in cash. The total annual compensation included the basic salary

and other variable pay (performance bonus).

The executive officers are composed of regular employees of the Company and four (4) are seconded

personnel from ALI.

The above named executive officers are covered by Letters of Appointment with the Company stating therein

their respective job functionalities, among others matters.

Options Outstanding

The Company does not offer stock options to its directors, executives, and employees.

Process CEO Top 4 Highest Paid

Management Officers

(1) Fixed remuneration Basic salary Basic salary

(2) Variable remuneration None None

(4) Per diem allowance none None

(4) Bonus

Performance bonuses are given

to management officers

annually.

Performance bonuses are given

to management officers

annually.

(5) Stock Options and

other financial

instruments

None for CHI None for CHI

(6) Others (specify) None to report None to report

35

2) Remuneration Policy and Structure for Executive and Non-Executive Directors

Disclose the company’s policy on remuneration and the structure of its compensation package. Explain how

the compensation of Executive and Non-Executive Directors is calculated.

Per Revised Manual of Corporate Governance 2014:

The Board of Directors shall determine a level of remuneration for Directors that shall be sufficient to attract and

retain directors and compensate them for attendance at meetings of the Board and Board Committees, and

performance of numerous responsibilities and undertaking certain risks as a Board member. The compensation

which maybe in the form of cash remuneration and/or stock option plans, shall be fixed by way of a resolution of

the Board of Directors. The Board of Directors may provide that only non-executive directors shall be entitled to

such compensation.

No director shall be involved in deciding his or her own remuneration.

The Corporation, to ensure effectiveness of holding directors accountable and to attract competent persons as

directors, may purchase at its own expense liability insurance coverage for its directors.

Remuneration Policy

Structure of

Compensation

Packages

How

Compensation is

Calculated

Executive Directors

The Compensation

Committee establishes

the formal and

transparent procedure

for fixing the

remuneration

packages of corporate

officers and directors.

As required in the By-

laws, “The Chairman

and members of the

Board shall receive

such remuneration as

may be fixed by the

Board of Directors

each year.”

Total annual

compensation

includes basic salary

and other variable

pay (i.e. guaranteed

bonus, performance-

based incentive

Fixed monthly

compensation,

guaranteed bonus,

performance-

based

compensation

incentive

Non-Executive Directors

The members of the

Board of Directors are

entitled to receive a

reasonable per diem

for attendance at each

meeting of the Board

of Directors. Other

than such per diem,

there is no other

arrangement pursuant

to which any amount

or compensation is due

to the directors for

services rendered as

such.

Non-executive

directors, defined as

members of the Board

of Directors who are

neither officers nor

consultants of the

Company, receive

remuneration

consisting of a per

diem of P40,000 for

each Board meeting

attended and P20,000

per Board committee

meeting actually

attended. The said

remuneration of non-

executive directors

was implemented

effective April 28,

Per diem received

per meeting

actually attended

(P40,000 for each

Board Meeting,

P20,000 for each

Board Committee

meeting)

36

2006. None of the

directors, in their

personal capacity, has

been contracted and

compensated by the

Company for services

other than those

provided as a director.

Do stockholders have the opportunity to approve the decision on total remuneration (fees, allowances,

benefits-in-kind and other emoluments) of board of directors? Provide details for the last three (4) years.

Remuneration Scheme Date of

Stockholders’ Approval

BOD receives Per diem allowance per attendance

to Board meetings (PhP40K) and Committee

meetings attended (PhP20K)

Non-executive directors (members of the Board

who are neither officers nor consultants of the

Company) receive per diem allowance of PhP40K

for each board meeting actually attended and

PhP20K per Board committee meeting actually

attended.

Ratification of all acts an resolutions by the

Board during April 2007 stockholders meeting

3) Aggregate Remuneration

Complete the following table on the aggregate remuneration accrued during the most recent year:

For 2015:

Remuneration Item Executive

Directors

Non-Executive

Directors (other than

independent directors)

Independent

Directors

(a) Fixed Remuneration

Aniceto V. Bisnar,

Jr. - None to

report

None None

(b) Variable Remuneration

Aniceto V. Bisnar,

Jr. - None to

report

None None

(c) Per diem Allowance Jaime E. Ysmael –

P160k

P660K for all board

meetings attended in

2015

P 1M for all board

and committee

meetings attended

in 2015

(d) Bonuses

Aniceto V. Bisnar,

Jr. - None to

report

None None

(e) Stock Options and/or

other financial

instruments

None None None

(f) Others (Specify)

Aniceto V. Bisnar,

Jr. - None to

report

None None

Total Jaime E. Ysmael –

P160k

P660K for all board


2015

P 1M for all board

and committee

meetings attended

37

in 2015

Other Benefits

Executive

Directors


(other than


Independent

Directors

1) Advances

Aniceto V. Bisnar,

Jr. - None to

report

None None

2) Credit granted

Aniceto V. Bisnar,

Jr. - None to

report

None None

3) Pension Plan/s

Contributions

Aniceto V. Bisnar,

Jr. - None to

report

None None

(d) Pension Plans,

Obligations incurred

Aniceto V. Bisnar,

Jr. - None to

report

None None

(e) Life Insurance Premium

Aniceto V. Bisnar,

Jr. - None to

report

None None

(f) Hospitalization Plan

Aniceto V. Bisnar,

Jr. - None to

report

None None

(g) Car Plan

Aniceto V. Bisnar,

Jr. - None to

report

None None

(h) Others (Specify)

Aniceto V. Bisnar,

Jr. - None to

report

None None

Total

Aniceto V. Bisnar,

Jr. - None to

report

None None

For 2016:

Remuneration Item Executive

Directors

Non-Executive

Directors (other than


Independent

Directors

(g) Fixed Remuneration

Aniceto V. Bisnar,

Jr. - None to

report

None None

(h) Variable Remuneration

Aniceto V. Bisnar,

Jr. - None to

report

None None

(i) Per diem Allowance Jaime E. Ysmael –

P200k

P860k for all board


2016

P 980k for all board

and committee

meetings attended

in 2016

(j) Bonuses

Aniceto V. Bisnar,

Jr. - None to

report

None None

(k) Stock Options and/or

other financial

instruments

None None None

38

(l) Others (Specify)

Aniceto V. Bisnar,

Jr. - None to

report

None None

Total Jaime E. Ysmael –

P200k

P860k for all board


2016

P 980k for all board

and committee

meetings attended

in 2016

Other Benefits

Executive

Directors


(other than


Independent

Directors

4) Advances

Aniceto V. Bisnar,

Jr. - None to

report

None None

5) Credit granted

Aniceto V. Bisnar,

Jr. - None to

report

None None

6) Pension Plan/s

Contributions

Aniceto V. Bisnar,

Jr. - None to

report

None None

(g) Pension Plans,

Obligations incurred

Aniceto V. Bisnar,

Jr. - None to

report

None None

(h) Life Insurance Premium

Aniceto V. Bisnar,

Jr. - None to

report

None None

(i) Hospitalization Plan

Aniceto V. Bisnar,

Jr. - None to

report

None None

(h) Car Plan

Aniceto V. Bisnar,

Jr. - None to

report

None None

(i) Others (Specify)

Aniceto V. Bisnar,

Jr. - None to

report

None None

Total

Aniceto V. Bisnar,

Jr. - None to

report

None None

4) Stock Rights, Options and Warrants

(a) Board of Directors

Complete the following table, on the members of the company’s Board of Directors who own or are

entitled to stock rights, options or warrants over the company’s shares:

Director’s Name

Number of Direct

Option/Rights/

Warrants

Number of

Indirect

Option/Rights/

Warrants

Number of

Equivalent

Shares

Total % from

Capital Stock

Board of Directors do not have the stock rights, options or warrants over the company’s shares.

(b) Amendments of Incentive Programs

Indicate any amendments and discontinuation of any incentive programs introduced, including the criteria

39

used in the creation of the program. Disclose whether these are subject to approval during the Annual

Stockholders’ Meeting:

Incentive Program Amendments Date of

Stockholders’ Approval

None to report

5) Remuneration of Management

Identify the five (5) members of management who are not at the same time executive directors and indicate

the total remuneration received during the financial year:

Name of Officer/Position Total Remuneration

Enrique B. Manuel, Jr./VP, CFO and Compliance

Officer

None to report

Maria Clavel G. Tongco/VP and Head, Commercial

Business Group

Nerissa N. Josef-Mediano/VP and Head, Business

Development & Office Leasing Group

Ma. Cecilia Crispina T. Urbina/AVP and Head,

Corporate Services Group and Human Resources &

Administration

Noel F. Alicaya/Finance & Control Officer and Chief

Risk Officer

E. BOARD COMMITTEES

1) Number of Members, Functions and Responsibilities

Provide details on the number of members of each committee, its functions, key responsibilities and the

power/authority delegated to it by the Board:

Committee

No. of Members

Committee

Charter Functions

Key

Responsibilities Power Executive

Director

(ED)

Non-

executive

Director

(NED)

Independ

ent

Director

(ID)

Executive 1 3 1 Committee

is governed

by its

Charter

which

outlines its

composition

, powers,

duties,

responsibiliti

es, meeting

requirement

, etc.

Acts in

accordance

with the

authority

granted by the

Board or in

case of

absence of the

Board on

specific

matters within

the

competence of

the Board of

Directors as

prescribed in

the Company’s

By-Laws,

except with

Oversee

activities of the

Organization.

Accounts to

stakeholders

for

organization’s

performance

Establishes

broad policies

and objectives

Ensures

availabilities of

resources for

the company.

The Executive

Committee, in

accordance

with the

authority

granted by the

Board, or

during the

absence of the

Board, shall act

on a minimum

quorum of at

least 2/3 of its

members on

such specific

matters within

the

competence of

the Board of

40

respect to any

action for

which

shareholders’

approval is

also required

Exercises the

powers and

attributes of

the Board of

Directors during

the intervening

period between

the Board’s

meetings, and

shall report all

resolutions

adopted by it to

the Board of

Directors at the

first meeting

that the latter

may

subsequently

hold.

Directors as

may from time

to time be

delegated to

the Executive

Committee in

accordance

with the

Corporation’s

By-Laws,

except with

respect to:

(a) Approval

of any

action for

which

shareholde

rs’

approval is

also

required;

(b) Filling of

vacancies

in the

Board or in

the

Executive

Committee

;

(c) The

amendmen

t or repeal

of By-Laws

or the

adoption

of new By-

Laws;

(d) The

amendmen

t or repeal

of any

resolution

of the

Board of

Directors

which by

its express

terms is

not so

amenable

or

repealable;

(e) Distributio

n of cash

41

dividends;

and

(f) The

exercise of

powers

delegated

by the

Board

exclusively

to other

committee

s, if any.

Audit 3 The

Committee

is governed

by its

Charter.

Purpose and

function

indicated in

Audit

Committee

Charter ,

Revised

Manual of

Corporate

Governance

& in the

Corporation’

s By-Laws

Provides

assistance to

the Board of

Directors in

fulfilling its

oversight

responsibility

to the

shareholders

relating to: 1)

the Company’s

financial

statements

and the

financial

reporting

process; 2) the

systems of

internal

controls and

financial

reporting

controls; 3)

the internal

audit activity;

4) the annual

independent

audit of the

Company’s

financial

statements; 5)

compliance

with legal and

regulatory

matters; and

Provides checks

and balances;

reviews

financial

statements and

related

disclosures;

ensures

transparency in

the company’s

financial

management

system; and

elevates the

company’s

accounting and

auditing

process.

Oversees the

efficient

implementation

of internal

control

mechanisms

and processes

Ensures

efficiency of the

company’s

overall internal

audit system

Recommends

the

appointment of

external

auditors, their

remuneration,

and

performance of

functions

Ensures that

The Committee

is expected,

through the

provision of

checks and

balances, to

support the

corporate

governance

process.

Specifically, it

has oversight

function on

financial

reporting,

internal audit,

external audit

and

compliance.

42

the company

complies with

rules and

regulations,

monitors

compliance,

and acts on

non-compliance

Nomination 1 1 1 The

Committee

is governed

by its

Charter.

Installs and

maintains a

process to

ensure that all

directors to be

nominated for

election at the

annual

stockholders’

meeting have

all the

qualifications

and none of

the

disqualificatio

ns for

directors as

stated in the

By-Laws, the

Revised

Manual of

Corporate

Governance of

the Company

and the

pertinent rules

of the

Securities and

Exchange

Commission,

to review and

evaluate the

qualifications

of all persons

nominated to

positions in

the Company

which require

appointment

by the Board.

Enforce the

required

qualifications

and

recommend

policies for

considering

nominees for

election as

directors, or

advisors to the

Board, or all

other officers

whose

appointment

requires the

Board’s

approval in

accordance

with company

by-laws and

other pertinent

rules;

Encourage the

selection of a

mix of

competent

directors, each

of whom can

add value and

contribute

independent

judgment in

formulating

sound

corporate

strategies and

policies, and

ensure

adequate

representation

for women on

the Board; and

Review and

disclose plans

of succession

Encourage the

selection of a

mix of

competent

directors, each

of whom can

add value and

create

independent

judgment as to

the formulation

of sound

corporate

strategies and

policies; and

Review and

evaluate the

qualifications

of all persons

nominated to

positions in the

Corporation

which require

appointment

by the Board.

43

for members of

the Board and

officers for the

position of

group directors,

to the

president/CEO.

Remuneration 1 1 1 The

Committee

is governed

by its

Charter.

Provides

oversight

over

remuneration

of

senior

management

and other key

personnel

Establish a

formal and

transparent

procedure for

developing a

policy on

executive

remuneration

and for fixing

the

remuneration

packages of

corporate

officers and

directors, and

provide

oversight over

remuneration

of senior

management

and other key

personnel

ensuring that

compensation

is consistent

with the

Corporation’s

culture,

strategy and

control

environment;

Designate the

amount of

remuneration,

which shall be

in a sufficient

level to attract

and retain

directors and

officers who

are needed to

run the

Corporation

successfully;

Develop a

form on Full

Business

Interest

Designate

remuneration

packages for

corporate

executives,

officers and

directors, and

provide

oversight over

remuneration

of senior

management

and other key

personnel,

ensuring

consistency

with the

corporate

culture, long

term interests

of the

corporate

leadership,

business

competitivenes

s, and a fair

and

transparent

performance

evaluation

process;

Establish a

transparent

procedure for

developing a

policy on

remuneration

packages and

provide for the

full disclosure

of the

executive

officers’

compensation

whenever

necessary;

44

Disclosure as

part of the

pre-

employment

requirements

for all

incoming

officers, which

among others

compel all

officers to

declare under

the penalty of

perjury all

their existing

business

interests or

shareholdings

that may

directly or

indirectly

conflict in

their

performance

of duties once

hired;

Disallow any

director to

decide his or

her own

remuneration;

Provide in the

Corporation’s

annual

reports,

information

and proxy

statements a

clear, concise

and

understandabl

e disclosure of

compensation

of its

executive

officers for the

previous fiscal

year and the

ensuing year;

Review the

existing

Human

Resources

Development

or Personnel

Enforce full

business

interest

disclosure as a

pre-

employment

requirement

for all officers;

and

Review and

recommend

changes to the

Human

Resources

Development

or Personnel

Handbook

whenever

necessary.

45

Handbook, to

strengthen

provisions on

conflict of

interest,

salaries and

benefits

policies,

promotion and

career

advancement

directives and

compliance of

personnel

concerned

with all

statutory

requirements

that must be

periodically

met in their

respective

posts;

Or in the

absence of

such

Personnel

Handbook,

cause the

development

of such,

covering the

same

parameters of

governance

stated above.

Others-

Risk

Committee

3 Committee

is governed

by its own

Charter.

Provides

assistance to

the Board of

Directors in

the

performance

of its oversight

functions of

the

Corporation’s

risk

management

activities

through

continuous

input,

evaluation and

feedback on

the

effectiveness

Provides

oversight to the

Corporation’s

Risk

Management

activities.

This policy

notwithstandin

g, management

remains

primarily

responsible for

the

development,

implementation

and reporting

the results of

the entire risk

management

Ensure that a

comprehensive

set of risk

management

policies and

procedures is

in place, and

monitor its

effectiveness

Review the

adequacy of

the

Corporation’s

risk

management

framework /

process.

Review the

46

of the

Corporation’s

risk

management

process.

framework.

results of the

annual risk

assessment

done by the

Chief Risk

Officer (CRO),

including the

risks identified,

their impact or

potential

impact on the

Corporation’s

business and

the

corresponding

measures to

address such

risks.

Evaluate the

risk assessment

report

submitted by

the CRO on a

periodic basis,

which may

include existing

and emerging

risks faced by

the

Corporation

and/or its

subsidiaries as

well as the risk

mitigation

strategies and

action plans

adopted by

Management.

Monitor the

risk

management

activities of the

Corporation

and evaluate

the

effectiveness of

the risk

mitigation

strategies and

action plans,

with the

assistance of

the internal

auditors. This

includes

ensuring that

47

the

Corporation

maintains a

framework for

fraud

prevention and

detection (i.e.

Whistleblower

Program) and

plans for

business

continuity (i.e.

Business

Continuity

Plan)

Meet

periodically

with

Management

to discuss the

Committee’s

observations

and evaluation

on its risk

management

activities.

Others -

Sustainability

1 1 1

In

Compliance

with the

Global

Reporting

Initiative

(GRI) G-4

Guidelines

Provides

assistance to

the Board of

Directors in its

responsibility

to the

Company’s

Stakeholders

that relate to

the Company’s

growth in the

areas of

1) economic

performance,

2)environment

al stewardship

and 3)

corporate

social

responsibility

Oversees the

establishment

of goals,

strategies, and

the integration

of

sustainability

initiatives into

daily business

Oversees the

establishment

of goals,

strategies, and

the integration

of sustainability

initiatives

Evaluates the

initiatives and

recommendatio

ns of the STWG,

stakeholder

engagement

processes and

partnerships,

new

technologies,

communication

strategies

relating to

sustainability

goals, and the

company’s

triple-bottom

line

performance

The

Sustainability

Committee

shall oversee

strategy

setting,

establishing of

goals and

integrating

sustainability

initiatives into

the daily

business

activities across

the Company’s

operations.

The committee

is tasked to

review and

evaluate the

following:

1.) initiatives

and

recommendati

ons of the

company’s

STWG;

48

activities

across the

company’s

operations

2.) stakeholder

engagement

processes and

external

partnerships;

3.) new and

innovative

technologies

applied in the

company’s new

projects and

managed

properties;

4.)communicati

on strategies

relating to

sustainability

goals, targets

and initiatives;

and

5.) annual

sustainability

performance of

the

Sustainability

Committee,

Sustainability

Council, and

the STWG.

2) Committee Members

(a) Executive Committee

For 2014: August 15 & Nov. 11, 2014

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman Bernard Vincent O. Dy*** April 24, 2015 2 2 100% new

Chairman Emilio J. Tumbocon*** April 2008 2 2 100% 6

Member (ED) Aniceto V. Bisnar, Jr.** Nov. 11, 2014 - - 0% new

Member (ED) Francis O. Monera** April 2006 2 2 100% 8

Member (NED) Maria Theresa M. Javier* July 2012 2 2 100% 3

Member (ED) Jaime E. Ysmael* April 2008 2 2 100% 7

Member (ID) Pampio A. Abarintos**** April 24, 2015 - - 0% new

*Resignation of Ms. Maria Theresa M. Javier as Treasurer(ED) of the Company effective July 14, 2014

*Appointment of Mr. Jaime E. Ysmael as company Treasurer

**AVBisnar replaces Mr. Monera effective January 1, 2015

***Appointment of BVODy as chairman effective April 24, 2015

****Appointment of Pampio A. Abarintos effective April 24, 2015

49

For 2015: January 28, February 11, February 23, June 8, September 29, 2015

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman

(NED) Bernard Vincent O. Dy April 24, 2015 2 2 100%

new

Chairman until

April 24, 2015 Emilio J. Tumbocon*** April 2008 3 3 100%

6

Member (ED) Aniceto V. Bisnar, Jr. Nov. 11, 2014 5 5 100% 1

Member (NED) Maria Theresa M. Javier July 2012 5 5 100% 3

Member (ED) Jaime E. Ysmael April 2008 5 5 100% 7

Member (ID) Pampio A. Abarintos April 24, 2015 2 2 100% new

***Appointment of BVODy as chairman effective April 24, 2015

For 2016

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman

(NED) Bernard Vincent O. Dy April 24, 2015 None

1

Member (ED) Aniceto V. Bisnar, Jr. Nov. 11, 2014 None 2

Member (NED) Maria Theresa M. Javier July 2012 None 4

Member (ED) Jaime E. Ysmael April 2008 None 8

Member (ID) Pampio A. Abarintos April 24, 2015 None 1

(b) Audit Committee for AC Meeting

For 2014: Feb. 12, May 16, Aug. 7, Sept. 23 & Nov. 7, 2014

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Fr. Roderick C. Salazar, Jr.

SVD

April 2005 5 5 100% 9

Member (ID) Enrique L. Benedicto April 2003 5 5 100% 11

Member (ID) Pampio A. Abarintos April 2014 4 4 100% new

For 2015: Feb. 12, May 13, Aug. 5, 2015, November 10, 2015

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee


SVD

April 2005 4 4 100% 10


Member (ID) Pampio A. Abarintos April 2014 4 4 100% 1

50

For 2016: Feb. 03, May 11 , Aug. 10, and November 10, 2016

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee


SVD

April 2005 4 4 100% 11


Member (ID) Pampio A. Abarintos April 2014 4 4 100% 2

For 2017: February 8 and May 9

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee


SVD

April 2005 2 2 100% 11yrs &

10mos

Member (ID) Enrique L. Benedicto April 2003 2 2 100% 13yrs

&10mos

Member (ID) Pampio A. Abarintos April 2014 2 2 100% 2yrs

&10mos

Disclose the profile or qualifications of the Audit Committee members.

Fr. Roderick C. Salazar Jr. SVD, Filipino, 69, has served as an independent director of CHI since April 29, 2005.

For more than 15 years, until June 2014, he was Chairman of the Board of Trustees of St. Jude Catholic School

in Manila and St. Scholastica’s College in Alabang. He is currently the Chairman of the Board of Trustees of St.

Agnes Academy in Legazpi City, Center for Educational Measurement (CEM) and Unified Property and

Accident Insurance System for Education (UPRAISE). He is a member of the Board of Trustees of St. Paul

University in Dumaguete City and member of the Board of Directors of First Metro Asset Management, Inc.

(FAMI). He is the Regional Secretary for Asia, and the Vice-President of the Office Internationale de

l’Enseignement Catholique (OIEC), while concurrently serving as the Executive Secretary of the Office of

Education and Faith Formation of the Federation of Asian Bishops Conferences (FABC-OEFF). He worked in

various academic and administrative positions at the University of San Carlos for 34 years (1975-2009) since

his ordination to the priesthood on June 21, 1974. He was USC president for twelve years (four 3-year terms:

1987-1990; 1990-1993; 2002-2005; 2005-2008). From 1992 to 2008, he was also President of the Catholic

Educational Association of the Philippines (CEAP). Past President of the Office Internationale de

l’Enseignement Catholique (OIEC). Outside USC, he was member of various groups like FILIPINO, Inc. (Filipino

Institute for the Promotion of Integrity and Nobility); San Carlos Community Development Foundation, Divine

Word Educational Association (DWEA); Philippine Accrediting Association of Schools, Colleges, and

Universities (PAASCU); Private Educational Advisory Council (PEAC); and Word Broadcasting Corporation. As

past CEAP president, he served three terms as past Chair of the Coordinating Council of Private Educational

Associations (COCOPEA). He had also been past Chair of the Board of Trustees of St. Scholastica’s Academy in

Tabunok, Talisay City, Cebu; Divine Word University (now Liceo del Verbo Divino) in Tacloban City; and Divine

Word College of Tagbilaran (now Holy Name University). He was a member of the Board of Trustees of St.

Paul University in Tuguegarao, and at different times of the St. Paul Colleges in Pasig, Iloilo, and Surigao, Cebu

Technological University and as well as of the Visayas Cluster of the Daughters of Charity (DC) Schools. He was

a member of the Board Directors of People’s Television Network (PTV4). He has two Master’s Degree, one in

Philosophy from Divine Word Seminary, Tagaytay City in 1976, and another in Mass Communications from

the University of Leicester, England (October 1982 to September 1983), degree conferred on July 1984. He

has two honorary Doctorates in the Humanities, the first given in March 2010 by St Paul University,

Tuguegarao City; the second, awarded by Aquinas University, Legazpi City on April 8, 2011. On August 14,

2010, in the Archdiocese of Cebu, he received the Papal Award Croce Pro Ecclesia et Pontifice for his years of

service in Catholic Education. In June 2014 his congregation appointed him Director of SVD Mission

Philippines.

51

Enrique L. Benedicto, Filipino, 75, has served as an independent director of CHI since April 25, 2003. He is

currently the honorary consul of Belgium. His other current regular directorships include: Chairman of

Mabuhay Filcement, Inc., and Vice-Chairman of Bernardo Benedicto Foundation, Inc., and he also a director

of Enrison Land, Inc., Enrison Holdings, Inc., Berbenwood Industries, Inc., and Benedict Ventures, Inc. He also

serves as an Independent Director of SPC Power Corp., a publicly listed company. He received the following

awards: ‘Officer in the Order of Leopold II’ by his Majesty Baudowin King of the Belgians, ‘Officer in the Order

of Leopold ll’ by His Majesty King Albert II of the Kingdom of Belgium, the highest award that can be given to

civilians, Belgian or non-Belgian, Garbo sa Sugbu Awardee given by the Province of Cebu for his outstanding

achievement in International Relations as Honorary Consul of Belgium, Most Outstanding Cebuano Citizen per

Cebu City Council Resolution dated February 18, 1991, Great Cebuano Award conferred by the Province of

Cebu, Sugbuanong Kumintaristang Nagpakabana (SUKNA), Kapisanan ng mga Brodkaster ng Pilipinas (KBP)

and Mandaue Chamber of Commerce and Industry, Inc., Entrepreneur of the Year Award conferred by the

Cebu Chamber of Commerce & Industry in celebration of its Centennial +10 Anniversary, ‘Most Outstanding

Alumnus’ award given by the University of San Jose-Recoletos. He earned his degree in BS Commerce at the

University of San Jose-Recoletos in 1964.

Pampio A. Abarintos, Filipino, 73, has served as an independent director of CHI since April 8, 2014. He retired

as Executive Justice of the Court of Appeals, Visayas Station from 2004 to 2013. Awarded as Presiding Justice

with the Presidential Award for speedy case disposal by the Court of Appeals, Manila in 2005. He retired with

ZERO backlog of cases in 2013. After practicing as a lawyer for 17 years, he was appointed as Presiding Judge

of the Regional Trial Court in Negros Oriental and in Cebu City from 1987 to 2013 and Executive Judge of the

Regional Trial Court Cebu Province from 2012 to 2014. He was an awardee for the Judicial Excellence as the

Most Outstanding Judge of the Philippines in 2003. He was former Officer of the Integrated Bar of the

Philippines, Cebu City Chapter and President of the Rotary Club of Cebu University District. Presently he is a

member of the Regional Advisory Council of the Philippine National Police (PNP) Region 7; Member of the

Management Committee (MANCOM) and Chairman of the Committee on Discipline and Arbitrator of Alta

Vista Golf and Country Club, Cebu City and he also served as a Director of South Hills Residents’ Association

(SHRA), Cebu City. He graduated as cum laude in Bachelor of Arts from the University of San Jose-Recoletos,

Cebu City in 1965. In 1969, he also graduated Bachelor of Laws from the University of the Visayas, Cebu City.

He has a Master’s Degree in Business Administration (MBA) from the Southwestern University, Cebu City in

1981.

Describe the Audit Committee’s responsibility relative to the external auditor.

Per the Audit Committee’s charter, the responsibilities relative to the external auditor are as follows:

1. Recommendation on the appointment of the external auditors and the fixing of their remuneration to

the full Board

2. Review the performance of the external auditors and exercise final approval on their appointment or

discharge of auditors.

3. Review and confirm the independence of the external auditors by obtaining statements from the

auditors on relationships between the auditors and the organization, including non-audit services, and

discussing the relationship with the auditors.

4. Review and pre-approval of the external auditor’s plans to understand the basis for their risk assessment

and financial statement materiality, including the scope and frequency of the audits. In this regard, the

Committee shall discuss with the external auditors, before such audits commences; the nature and scope

of the audit, and ensure cooperation when more than one professional service firm is needed.

5. Monitoring of the coordination efforts between the external and internal auditors.

6. Review of the reports of the external auditors and regulatory agencies, where applicable, and ensure that

management is taking appropriate corrective actions in a timely manner, including addressing control

and compliance issues.

7. Conducting a separate meeting in executive session, with the external auditors to discuss any matter that

the Committee or external auditors believe should be discussed privately, including results of the audit,

year-end financial statements, and the quality of management, financial and accounting controls.

8. Review and determination of the proportion of audit versus non-audit work both in relation to their

significance to the external auditor and in relation to the Corporation’s year-end financial statements,

52

and total expenditure on consultancy, to ensure that non-audit work will not be in conflict with the audit

functions of the external auditor. The amount of nonaudit work of external auditors shall be disclosed in

the annual report.

(c) Nomination Committee

For 2014: August 15, November 11, 2014

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L.

Benedicto**

April 24, 2015 2 2 100% new

Chairman (ED) Francis O. Monera** April 2007 2 2 100% 7

Member (NED) Bernard Vincent O. Dy August 15,

2014

1 1 100% new

Member (ED) Aniceto V. Bisnar, Jr.* Nov. 11, 2014 - - 0% new

*AVBisnar replaces Mr. Monera effective January 1, 2015

**Appointment of ELBenedicto as chairman effective April 24, 2015

For 2015: March 11, April 24, September 29, 2015

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L.

Benedicto**

April 24, 2015 2 2 100% new

Chairman (ED) Francis O. Monera* April 2007 1 1 100% 7


2014

2 2 100% 1

Member (ED) Aniceto V. Bisnar, Jr.* Nov. 11, 2014 3 3 100% 1


**Appointment of ELBenedicto as chairman effective April 24, 2015

For 2016: April 18 and August 17, 2016

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L. Benedicto April 24, 2015 2 2 100% 1yr. & 8

mos


2014

2 2 100% 2yrs. & 4

mos

Member (ED) Aniceto V. Bisnar, Jr. Nov. 11, 2014 2 2 100% 2yrs. & 1

mo

For 2017: February 22 and April 24

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L. Benedicto April 24, 2015 2 2 100% 2


2014

2 2 100% 2 yrs. & 8

mos.

Member (ED) Aniceto V. Bisnar, Jr. Nov. 11, 2014 2 2 100% 2 yrs. & 5

mos.

(d) Remuneration (Personnel and Compensation) Committee

53

For 2014: August 15, 2014

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Fr. Roderick C. Salazar,

Jr.**

April 24, 2015 - - 0% new

Chairman (NED) Bernard Vincent O. Dy** August 15,

2014

1 1 100% new

Member (ED) Aniceto V. Bisnar, Jr.* Nov. 11, 2014 - - 0% new


**Appointment of Fr. Salazar as chairman effective April 24, 2015

Note: length of service reckoned since 2007

For 2015: September 29, 2015

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee


Jr.**

April 24, 2015 1 1 100% new

Chairman (NED) Bernard Vincent O. Dy** August 15,

2014

1 1 100% 1yr. & 4

mos

Member (ED) Aniceto V. Bisnar, Jr.* Nov. 11, 2014 1 1 100% 1yr. & 1

mo


**Appointment of Fr. Salazar as chairman effective April 24, 2015

Note: length of service reckoned since 2007

For 2016

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee


Jr.

April 24, 2015 None 1yr. & 8

mos

Chairman (NED) Bernard Vincent O. Dy August 15,

2014

None 2yrs. & 4

mos

Member (ED) Aniceto V. Bisnar, Jr. Nov. 11, 2014 None 2yrs. & 1

mo

(e) Others (Specify) – SUSTAINABILTY COMMITTEE

Provide the same information on all other committees constituted by the Board of Directors:

For 2014: September 23, 2014

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Pampio A. Abarintos** April 24, 2015 1 1 100% new

Member (ED) Francis O. Monera* April 2009 1 1 100% 5

Chairman (ED) Aniceto V. Bisnar, Jr.* Jan. 1, 2015 - - 0% new

Member (NED) Emilio J. Tumbocon April 2009 1 1 100% 5


**Appointment of Pampio A. Abarintos as chairman effective April 24, 2015

54

For 2016: December 08, 2016

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Pampio A. Abarintos April 24, 2015 1 1 100% 1 yr & 8

mos.

Member (ED) Aniceto V. Bisnar, Jr. Jan. 1, 2015 1 1 100% 2 yrs

Member (NED) Emilio J. Tumbocon April 2009 1 1 100% 7 yrs & 8

mos.

(f) Others (Specify) – RISK COMMITTEE for RC Meeting held in May 13 & May 22, 2015,

Aug. 5, 2015, Oct. 12, 2015 and November 10, 2015

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L. Benedicto April 2015 5 5 100% new

Member (ID) Fr. Roderick C. Salazar, Jr.

SVD

April 2015 5 3 60% new

Member (ID) Pampio A. Abarintos April 2015 5 5 100% new

For 2016: Feb. 03, May 11, August 10, and November 10, 2016

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L. Benedicto April 2015 4 2 50% 1yr & 8

mos.


SVD

April 2015 4 4 100% 1 yr & 8

mos.

Member (ID) Pampio A. Abarintos April 2015 4 4 100% 1 yr & 8

mos.

For 2017: February 8 and May 9

Office Name Date of

Appointment

No. of

Meetings

Held

No. of

Meetings

Attended

%

Length of

Service in

the

Committee

Chairman (ID) Enrique L. Benedicto April 2015 2 2 100% 2yrs.


SVD

April 2015 2 2 100% 2yrs.

Member (ID) Pampio A. Abarintos April 2015 2 2 100% 2yrs.

3) Changes in Committee Members as of April 24, 2017

Indicate any changes in committee membership that occurred during the year and the reason for the changes:

Name of Committee Name Reason

Executive Anna Ma. Margarita B. Dy

Maria Theresa M. Javier

Election as Committee Chairman on

April 24, 2017 ASM

Resignation as member of the board

effective June 01, 2016 for personal

reasons.

Audit None None

55

Nomination None None

Remuneration None None

Others (Sustainability) None None

Others (Risk) None None

4) Work Done and Issues Addressed

Describe the work done by each committee and the significant issues addressed during the year.

Name of Committee Work Done Issues Addressed

Executive Exercises the powers and attributes

of the Board of Directors during the

intervening period between the

Board’s meetings, and shall report all

resolutions adopted by it to the

Board of Directors at the first

meeting that the latter may

subsequently hold.

Developed resolutions on the

strategic and tactical objectives of

the Company.

Audit • Provides checks and balances;

reviews financial statements and

related disclosures; ensures

transparency in the company’s

financial management system;

and elevates the company’s

accounting and auditing process

• Oversees the efficient

implementation of internal control

mechanisms and processes

• Ensures efficiency of the

company’s overall internal audit

system

• Recommends the appointment of

external auditors, their

remuneration, and performance

of function

• Ensures that the company

complies with rules and

regulations, monitors compliance,

and acts on non-compliance

• Reviewed and discussed the

quarterly unaudited consolidated

financial statements and the

annual audited consolidated

financial statements of Cebu

Holdings, Inc. and subsidiaries;

• Discussed and approved the

overall scope and the respective

audit plans of the Company’s

Internal Auditors and SGV & Co.

Also discussed the results of their

audits and their assessment of the

Company’s internal controls and

the overall quality of the financial

reporting process;

• Reviewed the reports of the

Internal Auditors, ensuring that

management is taking appropriate

corrective actions in a timely

manner, including addressing

internal controls and compliance

issues;

• Recommended to the Board of

Directors the re-appointment of

SGV & Co., as independent

external auditors for 2017, based

on the review of their

performance and qualifications,

including consideration of

management’s recommendation;

• Reviewed and approved all audit

services provided by SGV & Co. to

Cebu Holdings, Inc. and related

fees for such services

Nomination • Enforces the required

qualifications and recommends

policies for considering nominees

• Considered and approved the final

list of nominees for directors for

the year 2015-2016.

56

for positions requiring Board

approval

• Encourages the selection of a mix

of competent directors, and

ensures adequate representation

of women on the Board

• Reviews and discloses succession

plans for members of the Board

and key officers

Remuneration • Designates remuneration

packages and provides oversight

over remuneration of senior

management and other key

personnel

• Establishes a transparent

procedure for developing

remuneration packages

• Reviews and recommends

changes to the Personnel

Handbook

Considered and approved the:

• 2015 performance evaluation and

promotion of associates,

managers and executives;

• 2015 performance bonus of

associates, managers and

executives; and

• salary adjustments for qualified

managers and executives for

2015.

Others (Sustainability) • Oversees the establishment of

goals, strategies, and the

integration of sustainability

initiatives

• Evaluates the initiatives and

recommendations of the STWG,

stakeholder engagement

processes and partnerships, new

technologies, communication

strategies relating to sustainability

goals, and the company’s triple-

bottom line performance

• Published the Company’s Annual

Sustainability Report (integrated

with Annual Report) through the

support of the Sustainability

Technical Working Group (STWG)

headed by the Corporate

Sustainability Officer (CSO). The

committee reviewed the

company’s sustainability

framework and discussed targets,

plans, programs and initiatives.

The agenda included materiality

assessment and stakeholder

engagement process. Alignment of

these initiatives to the company’s

existing quality, environment,

health and safety plans and

programs, and to the Balanced

Scorecard targets was reviewed.

Part of the discussion included

plans for the integrated annual

and sustainability reporting

process based on the GRI G4

Sustainability Reporting

Guidelines.

Others (Risk) • Ensures that a comprehensive set

of risk management policies and

procedures is in place, and

monitors its effectiveness

• Evaluates risk assessment reports,

mitigation strategies, and action

plans

• Ensured that an overall set of risk

management policies and

procedures exist for the

Corporation.

• Reviewed the results of the annual

assessment done by the Chief Risk

Officer (CRO), including the risks

identified, their impact or

potential impact on the

Corporation’s business, and the

corresponding measures to

57

address such risks.

• Evaluated the CRO’s periodic risk

assessment reports that may

cover existing and emerging risks

faced by the Corporation and/or

its subsidiaries as well as the risk

mitigation strategies and action

plans adopted by Management.

• Monitored the risk management

activities of the Corporation and

evaluated the effectiveness of the

risk mitigation strategies and

action plans, with the assistance

of the internal auditors.

• Met periodically with

Management to discuss the

Committee’s observations and

evaluation on its risk management

activities.

5) Committee Program

Provide a list of programs that each committee plans to undertake to address relevant issues in the

improvement or enforcement of effective governance for the coming year.

Name of Committee Planned Programs Issues to be Addressed

Executive Acts in accordance with the

authority granted by the Board or in

case of absence of the Board on

specific matters within the

competence of the Board of

Directors as prescribed in the

Company’s By-Laws, except with

respect to any action for which

shareholders’ approval is also

required.

Oversee activities of the

Organization.

Accounts to stakeholders for

organization’s performance

Establishes broad policies and

objectives

Ensures availabilities of resources for

the company

Audit Accomplishment of Internal Audit

Annual Plan

Closure of audit recommendations

within specified time period

Nomination Install and maintain a process to

ensure that all directors to be

nominated for election at the next

Annual General Stockholders’

Meeting have the qualifications and

none of the disqualifications stated

above.

Installs and maintains a process to

ensure that all directors to be

nominated for election at the annual

stockholders’ meeting have all the

qualifications and none of the

disqualifications for directors as

stated in the By-Laws, the Revised

Manual of Corporate Governance of

the Company and the pertinent rules

of the Securities and Exchange

Commission, to review and evaluate

the qualifications of all persons

nominated to positions in the

Company which require

appointment by the Board.

Remuneration Provides oversight over

remuneration of senior management

Establish a formal and transparent

procedure for developing a policy on

58

and other key personnel. executive remuneration and for

fixing the remuneration packages of

corporate officers and directors, and

provide oversight over remuneration

of senior management and other key

personnel ensuring that

compensation is consistent with the

Corporation’s culture, strategy and

control environment;

Designate the amount of

remuneration, which shall be in a

sufficient level to attract and retain

directors and officers who are

needed to run the Corporation

successfully;

Develop a form on Full Business

Interest Disclosure as part of the

pre-employment requirements for

all incoming officers, which among

others compel all officers to declare

under the penalty of perjury all their

existing business interests or

shareholdings that may directly or

indirectly conflict in their

performance of duties once hired;

Disallow any director to decide his or

her own remuneration;

Provide in the Corporation’s annual

reports, information and proxy

statements a clear, concise and

understandable disclosure of

compensation of its executive

officers for the previous fiscal year

and the ensuing year;

Review the existing Human

Resources Development or

Personnel Handbook, to strengthen

provisions on conflict of interest,

salaries and benefits policies,

promotion and career advancement

directives and compliance of

personnel concerned with all

statutory requirements that must be

periodically met in their respective

posts;

Or in the absence of such Personnel

Handbook, cause the development

of such, covering the same

parameters of governance stated

above.

Others (specify)- Provides assistance to the Board of With the support of the

59

Sustainability Directors in its responsibility to the

Company’s

Stakeholders that relate to the

Company’s growth in the areas of 1)

economic performance, 2)

environmental stewardship and 3)

corporate social responsibility.

Sustainability Technical Working

Group (STWG) headed by the

Corporate Sustainability Officer

(CSO), the Sustainability Committee

provides assistance to the Board of

Directors in its responsibility to the

Company’s stakeholders in matters

concerning direct /indirect impacts

to the local economy; resource use

maximization, environmental

impacts and social responsibility.

Others – Risk

Committee

Provides assistance to the Board of

Directors in the performance of its

oversight functions of the

Corporation’s risk management

activities through continuous input,

evaluation and feedback on the

effectiveness of the Corporation’s

risk management process.

Ensure that an overall set of risk

management policies and

procedures exist for the Corporation;

Review the adequacy of the

Corporation’s risk management

framework / process;

Review the results of the annual risk

assessment done by the Chief Risk

Officer (CRO), including the risks

identified, their impact or potential

impact on the Corporation’s

business and the corresponding

measures to address such risks;

Evaluate the risk assessment report

submitted by the CRO on a periodic

basis, which may include existing

and emerging risks faced by the

Corporation and/or its subsidiaries

as well as the risk mitigation

strategies and action plans adopted

by Management;

Monitor the risk management

activities of the Corporation and

evaluate the effectiveness of the risk

mitigation strategies and action plans, with the assistance of the internal auditors; Meet periodically with Management to discuss the Committee’s observations and evaluation on its risk management activities.

F. RISK MANAGEMENT SYSTEM

1) Disclose the following:

(a) Overall risk management philosophy of the company;

The Company takes a strategic approach in managing risks encountered in our business. Key risks are

managed to an acceptable level—both holistically and individually—at all levels of the company.

Embedded in Our Corporate Culture

60

Our Enterprise-wide Risk Management (ERM) program adopts a top-driven, bottom-focused approach. Risk

awareness is embedded in our corporate culture with management taking on an active role in managing risks.

Identification, management and monitoring of key risks are done in all levels of the company and are part of

daily operations.

Guided by a Framework

Our ERM framework details the process of identifying risks for the company and its subsidiaries. This is

further supported by a comprehensive risk identification, review, monitoring and reporting process at all

levels in the company.

Our ERM framework focuses on four main risk categories: strategic, operational, financial and environmental

risks

Protected by Lines of Defense

We have identified the company’s three main risks: Competitor Risk, Project Execution and Delivery Risk, and

Changing Market Risk.

To manage these risks, we apply three lines of defense in ERM and internal controls:

1st Level: Risk Owners/Business-Group Level [Risk Management and Accountability at Source]

We embed risk management within the critical processes of the company. Risk owners take on an

active role in identifying, assessing and treating risks in our day-to-day operations. Processes,

procedures and controls are instituted to ensure effectiveness at the business-group level.

2nd

Level: ERM Team [Risk Governance]

Periodic reviews of key risks and indicators are done at the level of the ERM team led by the Chief

Risk Officer to ensure that risks are effectively managed and that relevant key risks are addressed.

The status of key risks and mitigation plans are reported periodically to the Risk Committee of the

Board.

3rd Level: Board Committees and Audit-Internal and External [Risk Oversight]

The Board provides oversight through the following committees:

a. Risk Committee: The Risk Committee provides oversight on risk management activities, approves

the ERM policy and any subsequent changes. The committee reviews the status of top corporate

risks and reviews the effectiveness of the ERM process.

It also undertakes oversight of the company’s risk management activities through continuous

input, evaluation, and feedback, and updates the Board of Directors on the status of key risks at

least quarterly, or as often as necessary to support executive decision-making. The committee

provides periodic reports to the Board of Directors.

b. Audit Committee: The Audit Committee performs oversight functions over the company’s

financial reporting, internal control, internal audit, external audit and compliance. Internal audit

periodically reviews processes and controls and recommends areas for improvement through its

assurance and consulting activities.

c. External audit conducts periodic independent assessment of financial controls and processes in

conjunction with the preparation of the company’s financial statements.

A Driver of Key Strategic Actions

Through the ERM, the company continued to direct the following key strategic actions in 2016:

1. Protecting the balance sheet through financial risk management

We continue to take advantage of the current low but slowly increasing interest rates by maximizing its

leverage and converting our short-term to long-term debt at favorable rates to fund the construction of

our leasing projects. This allows us to better balance our debt capacity and maturity with a steady

recurring income.

61

2. Monitoring of major market indicators

We rely on close monitoring of major market indicators for guidance in project investments. Forecasts,

industry and sales reports are regularly monitored and reported to the project teams and senior

management to provide them a clearer perspective of prevailing market conditions and issues on the

ground for more informed decision- making.

3. Close monitoring of ongoing projects

The early identification and management of delivery risk allows us to keep our projects on track, meet

our customers’ requirements, and achieve our sales and turnover targets.

4. Expanded partnerships beyond parent company

Strong synergies diversify risk and create the opportunity for us to increase our reach and depth in the

Cebu market.

In 2016, our continued partnership with strong local developers, Taft Punta Engano Property with

Gaisano Group in Mactan, Cebu District Property Enterprise with Ayala Land and Aboitizland in Mandaue,

allow us to maintain market presence and expand our portfolio through strong synergies, advanced

master-planning, stronger combined branding, and deeper market knowledge. The partnership benefits

from the combined financial muscle, technical expertise and real estate experience of the companies

5. Diversification of product lines

We continue to build on our expertise and extend our market reach. Since 2013, we have been

diversifying our portfolio with the introduction of the Amaia brand for affordable housing, and office

condominiums for sale.

6. Proactive management of environmental risks

Our operations have a major impact on the environment and social conditions in the areas in which we

operate. Together with parent company Ayala Land, we outlined our sustainability focus areas where

we can affect positive change through our developments. These include: (1) site resilience, (2) eco-

efficiency, (3) pedestrian-transit connectivity and (4) local economic development. Programs have been

implemented in 2016 for these focus areas [See Sustainability Section for details]

We continue to adapt measures to reinforce our Business Continuity Plan. Our Crisis Management Team

ensures continuous operations, or at least minimal disruption, during calamities and unforeseen events.

Improvements on our services and facilities have also been implemented to ensure the safety of our

stakeholders and enhance our readiness in times of emergencies and calamities. These allow us to

protect our assets, especially our employees, customers, and locators in our facilities.

(b) A statement that the directors have reviewed the effectiveness of the risk management system and

commenting on the adequacy thereof;

In 2016:

The Risk Committee Chairman submits and presents an annual Committee Report to the full Board. The

Annual Report of the Risk Committee to the Board of Directors indicates its compliance with its Charter in

terms of its oversight responsibilities and its activities for the period. For Risk Management, the report

includes the following:

1. Oversight Responsibility- the Risk Committee’s roles and responsibilities are defined in the Risk

Committee Charter approved by the Board of Directors. The Committee assists the Board in the

performance of its oversight functions of the Company’s risk management activities through

continuous input, evaluation and feedback on the effectiveness of the Company’s risk management

process.

2. Compliance to Charter- In compliance with its Charter, the Committee confirms that:

• An independent director chairs the Audit Committee. All members of the Committee are

independent directors.

• The number of meetings for 2016 (i.e., 4 meetings) and the attendance rate.

62

• The Committee reviewed and discussed the adequacy of the Company’s Enterprise-wide Risk

Management (ERM) Process, including the major risk exposures, the related risk mitigation

efforts and initiatives, and the status of risk mitigation plans. The review was undertaken in

the context that management is primarily responsible for the risk management process.

3. Conclusion: Based on the reviews and discussions undertaken, and subject to the limitations on the

Committee’s roles and responsibilities referred to above, the Risk Committee has been assured that

activities are undertaken by the Company to monitor its key risks and to ensure that management is

taking appropriate actions to mitigate the impact of these key risks

Policy notwithstanding, the reviews were undertaken in the context that management is primarily

responsible for the risk management process.

The Committee also submits quarterly a Report of the Risk Committee to the Board, through its Committee

Chairman, to apprise the Board on the results of the Committee’s activities for the period. The Committee

Chairman presents the report to full Board during its meeting en banc. The Committee indicates in its report

that based on the items presented to the Risk Committee for the period, the Committee has been assured

that activities are undertaken to monitor the organization’s key risks and to ensure that management is

taking appropriate actions to mitigate the impact of these key risks.

In 2015

The company has a separate board-level Risk Committee. An annual report shall be issued by the Committee

at the end of the year to signify its oversight function over the risk management process of the Company, and

its review of the effectiveness and adequacy of the risk management system.

The Risk Committee Charter provides

1. Oversight Responsibility – the Risk Committee’s roles and responsibilities are defined in its Charter.

It provides oversight over the company’s risk management activities.

2. Compliance to Charter – in compliance with its Charter, the Committee shall confirm that it has

reviewed and discussed the effectiveness and adequacy of the Company’s risk management

processes.

In 2014:

The Audit & Risk Committee Chairman submits and presents an annual Committee Report to the full Board.

The Annual Report of the Audit & Risk Committee to the Board of Directors indicates its compliance with its

Charter in terms of its oversight responsibilities and its activities for the period. For Risk Management, the

report includes the following:

4. Oversight Responsibility- The Audit & Risk Committee’s roles and responsibilities are defined in the

Audit & Risk Committee Charter approved by the Board of Directors. The Audit & Risk Committee

provides assistance to the Board of Directors in fulfilling its oversight responsibility to the

shareholders relating to the adequacy of risk management.

5. Compliance to Charter- In compliance with its Charter, the Committee confirms that it has reviewed

and discussed the adequacy of the Company’s Enterprise-wide Risk Management (ERM) Process,

including the major risk exposures, the related risk mitigation efforts and initiatives, and the status

of risk mitigation plans. The review was undertaken in the context that management is primarily

responsible for the risk management process.

The Committee also submits quarterly a Report to the Chairman of the Board to apprise the latter on the

results of the Committee’s activities for the period. The Committee Chairman presents the report to full

Board during its meeting en banc.

(c) Period covered by the review;

The Annual Report of the Risk Committee to the Board covered the period January 2016 to December 2016.

The quarterly report of the Audit & Risk Committee covered the four quarters of the year 2016.

(d) How often the risk management system is reviewed and the directors’ criteria for assessing its

effectiveness; and

The ERM program adopts a top-driven, bottom-focused approach and has the full support of the

63

Organization’s management all the way up to the Board of Directors. It is a process by which Management

takes on a very active and key role in managing risk. The identification, management and monitoring of its key

risks are made part of the normal operations of the Company not just at the corporate level, but also at the

individual business-group levels. This allows CHI to manage its key risks to an acceptable level both holistically

and individually and to address issues in a timely manner.

Periodic reviews are done at all levels of the Organization, including the ERM Team lead by the Risk

Committee and the Chief Risk Officer, to ensure that risks are effectively managed and the Company is

addressing relevant key risks. Results of monitoring of the ERM process are also presented to the Board of

Directors by the Risk Committee, at least quarterly or more frequently if necessary, to update them of the

status of the Company’s key risks to serve as inputs in executive decision-making.

Key risks and corresponding indicators are assessed & reviewed quarterly by the Chief Risk Officer and the

ERM Committee. The status of key risks and mitigation plans are reported periodically to the Risk Committee

of the Board.

Risk Register and Key Risk Indicators are updated annually to ensure that risk analysis and assessment are

relevant and up-to-date. Periodic risk refresher sessions with executive management and the business units

are also conducted, as deemed necessary, to allow for the identification of new and emerging risks brought

about by changes in the external and internal operating environment of the Company.

(e) Where no review was conducted during the year, an explanation why not.

Not applicable, periodic review conducted as discussed above.

2) Risk Policy

(a) Company

Give a general description of the company’s risk management policy, setting out and assessing the risk/s

covered by the system (ranked according to priority), along with the objective behind the policy for each

kind of risk:

Risk Exposure Risk Management Policy Objective

Identified risks that fall

into the four main risk

categories: strategic,

operational, financial

and environmental risks.

The key risks identified

for 2016 are:

Competitor Risk, Project

Execution & Delivery

Risk, and Changing

Market Needs Risk.

Enterprise-wide framework adopted

by the Company. The risk

management policy defines the

Company’s commitment to

effectively and periodically identify,

assess, monitor and manage risks.

This incorporates a system of risk

oversight, risk management and

internal control that designed to

manage risks.

The board, through its Risk

Committee provides oversight

responsibilities for risk

management. Management is

responsible for ensuring that risks

are identified, analyzed, evaluated

and mitigated and for developing

and maintaining a control

environment that manages

significant risks and implements the

risk management processes

throughout the organization

Systematic process of

identifying risks for the

company and its subsidiaries,

further supported by a

comprehensive risk

identification, review,

monitoring and reporting

process at all levels in the

company.

(b) Group

64

Give a general description of the Group’s risk management policy, setting out and assessing the risk/s

covered by the system (ranked according to priority), along with the objective behind the policy for each

kind of risk:

Risk Exposure Risk Management Policy Objective

Identified risks that fall

into the four main risk

categories: strategic,

operational, financial

and environmental risks.

The key risks identified

for 2016 are:

Competitor Risk, Project

Execution & Delivery

Risk, and Changing

Market Needs Risk.

Enterprise-wide framework

adopted by the Company. The

risk management policy defines

the Company’s commitment to

effectively and periodically

identify, assess, monitor and

manage risks. This incorporates a

system of risk oversight, risk

management and internal control

that designed to manage risks.

The board, through its Risk

Committee provides oversight

responsibilities for risk

management. Management is

responsible for ensuring that risks

are identified, analyzed,

evaluated and mitigated and for

developing and maintaining a

control environment that

manages significant risks and

implements the risk management

processes throughout the

organization

Systematic process of identifying

risks for the company and its

subsidiaries, further supported by

a comprehensive risk

identification, review, monitoring

and reporting process at all levels

in the company.

(c) Minority Shareholders

Indicate the principal risk of the exercise of controlling shareholders’ voting power.

Risk to Minority Shareholders

Related party transactions or RPTs(e.g., inter-company transactions) occur but measures are in

place to avoid abuse. RPTs are strictly monitored by the Company and are conducted on an arm’s

length basis and in a manner that ensures fairness to the company’s best interest, and no less

favorable than those generally available to non-related parties under the same or similar

circumstances.

3) Control System Set Up

(a) Company

Briefly describe the control systems set up to assess, manage and control the main issue/s faced by the

company:

65

Risk Exposure Risk Assessment

(Monitoring and Measurement Process) Risk Management and Control

(Structures, Procedures, Actions Taken)

Identified Strategic,

Operational,

Financial and

Environmental Risks

Conduct of periodic risk refresher

sessions with the executive

management and with each of the

business units. Annual update of

risk register and indicators.

Regular monthly monitoring by

the various business units.

Quarterly updating and

monitoring by the ERM team and

quarterly reporting of status of key

risks to Risk Committee of the

Board.

Monthly monitoring of key risks and

indicators by operating units.

Quarterly updating to Chief Risk

Officer. Quarterly reporting to the

Risk Committee of the Board.

The Risk Committee reports to the

Board on its oversight

responsibilities with regards to Risk

Management on a quarterly and

annual basis.

(b) Group

Briefly describe the control systems set up to assess, manage and control the main issue/s faced by the

company:

Risk Exposure Risk Assessment

(Monitoring and Measurement Process) Risk Management and Control

(Structures, Procedures, Actions Taken)

Identified Strategic,

Operational,

Financial and

Environmental Risks

Conduct of periodic risk refresher

sessions with the executive

management and with each of the

business units will be conducted.

Annual update of risk register and

indicators.

Regular monthly monitoring by

the various business units.

Quarterly updating and

monitoring by the ERM team and

quarterly reporting of status of key

risks to Risk Committee of the

Board.

Monthly monitoring of key risks and

indicators by operating units.

Quarterly updating to Chief Risk

Officer. Quarterly reporting to Risk

Committee of the Board.

The Risk Committee reports to the

Board on its oversight

responsibilities with regards to Risk

Management on a quarterly and

annual basis.

(c) Committee

Identify the committee or any other body of corporate governance in charge of laying down and

supervising these control mechanisms, and give details of its functions:

Committee/Unit Control Mechanism Details of its Functions

Risk Committee The Board of Directors,

through its Risk Committee,

continues its oversight

functions of the Corporation’s

risk management activities

through continuous input,

evaluation and feedback on

the effectiveness of the

Corporation’s risk

management process.

• Ensures that an overall set

of risk management policies

and procedures exist for the

Corporation.

• Reviews the results of the

annual assessment done by

the Chief Risk Officer (CRO),

including the risks

identified, their impact or

potential impact on the

Corporation’s business, and

the corresponding

66

measures to address such

risks.

• Evaluates the CRO’s periodic

risk assessment reports that

may cover existing and

emerging risks faced by the

Corporation and/or its

subsidiaries as well as the

risk mitigation strategies

and action plans adopted by

Management.

• Monitors the risk

management activities of

the Corporation and

evaluated the effectiveness

of the risk mitigation

strategies and action plans,

with the assistance of the

internal auditors.

• Meet periodically with

Management to discuss the

Committee’s observations

and evaluation on its risk

management activities.

Chief Risk Officer & ERM Team The Chief Risk Officer (CRO)

reports functionally to the Risk

Committee, and

administratively to the

President and the

Management Committee. The

CRO heads the cross-functional

ERM Committee and is

primarily responsible for

enabling the efficient and

effective governance of the

company’s key risks and

controls.

Oversees the conduct of a

systematic and proactive risk

management process. Ensures

the periodic update, review

and analysis of key risks,

indicators and mitigation

strategies as a regular part of

operations.

Quarterly reporting to the Risk

Committee to determine

whether these significant risks

are appropriately and

adequately addressed by the

responsible Business Units.

ERM Committee The ERM Committee ensures

that the Company’s processes

are functioning within normal

operating standards and the

business is operating within

acceptable risk metrics or

limits. The Internal Audit

Department, apart from

functionally reporting to the

Risk Committee, also provides

administrative support to the

Chief Risk Officer in the

discharge of his ERM-related

functions.

Risk management embedded

within the critical processes of

the company.

Risk owners take on an active

role in identifying, assessing

and treating risks in our day-

to-day operations. Processes,

procedures and controls are

instituted to ensure

effectiveness at the business-

group level.

Integrated into their day to

day operations, members of

the cross-functional ERM

Committee monitor the

67

Company’s adherence to the

risk management policies and

procedures.

G. INTERNAL AUDIT AND CONTROL

1) Internal Control System

Disclose the following information pertaining to the internal control system of the company:

(a) Explain how the internal control system is defined for the company;

The Company adapts the COSO definition of internal control.

Internal Controls is defined as “ a process effected by an entity’s board of directors, management, and other

personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to

operations, reporting, and compliance.” [per COSO Internal Control- Integrated Framework 2013]

In an effective internal control system, the following components support the achievement of an entity’s

mission, strategies and related business objectives: control environment, risk assessment, control activities,

information and communication and monitoring.

(b) A statement that the directors have reviewed the effectiveness of the internal control system and whether

they consider them effective and adequate;

In 2016

The Audit Committee Chairman submits and presents an annual Committee Report to the full Board. The

Annual Report of the Audit Committee to the Board of Directors indicates its compliance with its Charter in

terms of its oversight responsibilities and its activities for the period. The report includes the following:

1. Oversight Responsibility- the Audit Committee’s roles and responsibilities are defined in the Audit

Committee Charter approved by the Board of Directors. The Audit Committee assists the Board of

Directors in fulfilling its oversight responsibility to the shareholders relating to:

• the integrity of Cebu Holdings Inc.’s (the “Company”) financial statements and the financial

reporting process;

• the appointment, re-appointment, remuneration, qualifications, independence and

performance of the independent auditors and the integrity of the audit process as a whole;

• the effectiveness of the systems of internal control and the risk management process;

• the performance and leadership of the internal audit function;

• the Company’s compliance with applicable legal and regulatory requirements; and

• the preparation of a year-end report of the Committee for approval of the Board and to be

included in the annual report.

2. Compliance to Charter- In compliance with its Charter, the Committee confirms that

• An independent director chairs the Audit Committee. All members of the Committee are

independent directors.

• The number of meetings for 2016 (i.e., 4 meetings) and the attendance rate.

• The Committee recommended to the Board of Directors the re-appointment of SGV & Co., as

independent external auditors for 2017, based on the review of their performance and

qualifications, including consideration of management’s recommendation. The Committee

delegates to management the negotiation and finalization of fees.

• The Committee reviewed and discussed the quarterly unaudited consolidated financial

statements and the annual audited consolidated financial statements of Cebu Holdings, Inc. and

subsidiaries, including Management’s Discussion Analysis of Financial Condition and Results of

Operations as of and for the year ended December 31, 2016, with the Company’s management

and SGV & Co. these activities were performed in the following context: 1.) that management

has the primary responsibility for the financial statements and the reporting process; 2.) that

68

SGV & Co. is responsible for expressing an opinion on the conformity of the Company’s

consolidated audited financial statements with Philippine Reporting Standards.

• The Committee discussed and approved the overall scope and the respective audit plans of the

Company’s Internal Auditors and SGV & Co. We have also discussed the results of their audits

and their assessment of the Company’s internal controls and the overall quality of the financial

reporting process;

• The Committee also reviewed the reports of the Internal Auditors, ensuring that management is

taking appropriate corrective actions in a timely manner, including addressing internal controls

and compliance issues. All the activities conducted by Internal Audit were conducted in

conformance with the International Standards for the Professional Practice of Internal Auditing.

Based on the assurance provided by Internal Audit as well as SGV & Co., as a result of their

activities, the Committee assessed that the Company’s systems of internal controls, risk

management and governance processes are adequate.

• The Committee reviewed and approved all audit services provided by SGV & Co. to Cebu

Holdings, Inc. and related fees for such services.

3. Conclusion: Based on the reviews and discussions undertaken, and subject to the limitations on our roles

and responsibilities referred to above, the Audit Committee recommended to the Board of Directors the

inclusion of the Company’s consolidated financial statements as of and for the year ended December 31,

2016 in the Company’s Annual Report to the Stockholders and for filing with the Securities and Exchange

Commission.

The Committee also submits quarterly a Report of the Risk Committee to the Board to apprise the latter on

the results of the Committee’s activities for the period. The Committee Chairman presents the report to full

Board during its meeting en banc. The Committee indicates, in its report, that it has been reasonably assured

of the following: 1.) Based on results of audits presented to the Committee, internal control is in place and

effective; 2.) Control activities are undertaken to monitor status of audit observations and to ensure that

management is taking appropriate corrective actions in a timely manner; and 3.) Activities are undertaken to

monitor the organization’s key risks and to ensure that management is taking appropriate actions to mitigate

the impact of these key risks.

In 2015

The Audit & Risk Committee Chairman submits and presents an annual Committee Report to the full Board.

The Annual Report of the Audit & Risk Committee to the Board of Directors indicates its compliance with its

Charter in terms of its oversight responsibilities and its activities for the period. For Internal Audit, the report

includes the following:

1. Oversight Responsibility- The Audit & Risk Committee’s roles and responsibilities are defined in the Audit

& Risk Committee Charter approved by the Board of Directors. The Audit & Risk Committee provides

assistance to the Board of Directors in fulfilling its oversight responsibility to the shareholders relating to

the following:

• the effectiveness of the systems of internal controls and financial reporting controls,

• the performance of the internal audit activity,

• the appointment, remuneration, qualifications, independence and performance of the

independent auditors and the integrity of the audit process as a whole,

2. Compliance to Charter- In compliance with its Charter, the Committee confirms that

• It has discussed and approved the overall scope and the respective audit plans of the

Company’s Internal Auditors and have also discussed the results of their audits and their

assessment of the Company’s internal controls and the overall quality of the financial reporting

process;

• It has reviewed the reports of the Internal Auditors, ensuring that management is taking

appropriate corrective actions in a timely manner, including addressing internal control and

compliance with legal and regulatory issues

The Committee also submits quarterly a Report to the Chairman of the Board to apprise the latter on the

results of the Committee’s activities for the period. The Committee Chairman presents the report to full

Board during its meeting en banc. Based on items presented to the Committee for the period, the Committee

indicates, in its report, that it has been reasonably assured of the following: 1.) internal control is in place and

effective, 2.) Control activities are undertaken to monitor status of audit observations and to ensure that

69

management is taking appropriate corrective actions in a timely manner.

(c) Period covered by the review;

The Annual Report of the Audit & Risk Committee covered the period January 2016 to December 2016. The

quarterly report of the Audit Committee covered the four quarters of the year 2016.

(d) How often internal controls are reviewed and the directors’ criteria for assessing the effectiveness of the

internal control system; and

Results of the audits conducted in accordance with the approved Audit Plan are presented to the Audit

Committee on a quarterly basis through its scheduled quarterly meetings.

Quarterly reviews of reports of internal auditors ensures the Committee, in its oversight function, that

management is taking appropriate corrective actions in a timely manner including addressing internal control

issues.

These periodic reports to the Committee highlight the status of projects in accordance with the audit plan

approved by the Committee, as well as any unplanned projects. Such reports include a summary of key

findings and recommendations, including status of implementation.

The Annual report of the Internal Audit Department to the Committee discusses the Department’s activities

and performance relative to the audit plans and strategies approved by the Committee.

(e) Where no review was conducted during the year, an explanation why not.

Not applicable, periodic review conducted as discussed above.

2) Internal Audit

(a) Role, Scope and Internal Audit Function

Give a general description of the role, scope of internal audit work and other details of the internal audit

function.

Role Scope

Indicate whether

In-house or

Outsource

Internal Audit

Function

Name of Chief

Internal

Auditor/Auditing

Firm

Reporting

process

Provides

independent and

objective assurance

and consultancy

services to the

Company with the

objective of adding

value and assisting

the organization in

accomplishing its

objectives through

effective control,

risk management

and governance

processes.

Assists the Board in

the discharge of its

duties and

responsibilities as

provided for in the

Assurance and

consulting

activities: 1.) to

determine

adequacy and

effectiveness of risk

management,

internal control and

governance

processes (as

designed and

represented by

management); 2.)

to ensure the

achievement of

management

objectives.

In-house function Jennifer Sia/

Internal Audit

Manager

To provide for

independence,

the Internal

Audit

Department

(IAD) reports to

functionally to

the Audit

Committee of

the Board of

Directors and

administratively

to the Chief

Finance Officer.

70

Securities and

Exchange

Commission’s 2009

Revised Code of

Corporate

Governance.

(b) Do the appointment and/or removal of the Internal Auditor or the accounting /auditing firm or corporation

to which the internal audit function is outsourced require the approval of the audit committee?

Yes, the Audit Committee’s roles and responsibilities include the following:

• Per Committee Charter: “Setting up the Internal Audit Department, including the appointment of the

Chief Audit Executive (or the Head of the Audit Department). The Committee shall establish and

identify the reporting line of the Chief Audit Executive so that the reporting levels allow the internal

audit activity to fulfill its responsibilities. The Chief Audit Executive shall report directly to the

Committee functionally. The Committee, having appointed the Chief Audit Executive, shall also

concur in his/her replacement, re-assignment or dismissal”. [Section F, item 3.2]

• Per Revised Manual of Corporate Governance: “Be responsible for setting up an internal audit

department and consider the appointment of the chief audit executive; establish and identify the

reporting line of the chief audit executive so that the reporting levels allow the internal audit activity

to fulfill its responsibilities;”. [Article II, Section 2.4, item b.3]

(c) Discuss the internal auditor’s reporting relationship with the audit committee. Does the internal auditor

have direct and unfettered access to the board of directors and the audit committee and to all records,

properties and personnel?

The Internal Audit Department reports functionally the Audit Committee of the Board. The Department has

direct access to the Committee and to the records, property and personnel of the Organization.

The Audit Committee’s roles and responsibilities include the following:

• Per Committee Charter: 1.) Ensuring that the internal auditors have free and full access to all the

Corporations’ records, properties, and personnel relevant to and required by its function and that

the internal audit activity shall be free from interference in determining the scope, performing its

work and communicating its results. [Section F, item 3.3]; 2.) Conducting separate meetings with

the Chief Audit Executive to discuss any matter that the Committee or the internal auditors may

deem necessary to be discussed privately. [Section F, item 3.9]

• Per Revised Manual of Corporate Governance: Ensure that internal auditors have free and full access

to all the Corporation’s records, properties and personnel relevant to and required by its function

and that the internal audit activity shall be free from interference in determining its scope,

performing its work and communicating its results [Article II, Section 2.2,item b.4]

(d) Resignation, Re-assignment and Reasons

Disclose any resignation/s or re-assignment of the internal audit staff (including those employed by the

third-party auditing firm) and the reason/s for them.

Name of Audit Staff Reason

Julius C. Ceballos Employment in other company

Miguel G. Abas, Jr. Employment in other company

(e) Progress against Plans, Issues, Findings and Examination Trends

State the internal audit’s progress against plans, significant issues, significant findings and examination

trends.

71

Progress Against Plans Within schedule

Issues6 Monitoring &closure conducted within timeframe

Findings7 Monitoring &closure conducted within timeframe

Examination Trends Within established process cycle time

[The relationship among progress, plans, issues and findings should be viewed as an internal control review

cycle which involves the following step-by-step activities:

1) Preparation of an audit plan inclusive of a timeline and milestones;

2) Conduct of examination based on the plan;

3) Evaluation of the progress in the implementation of the plan;

4) Documentation of issues and findings as a result of the examination;

5) Determination of the pervasive issues and findings (“examination trends”) based on single year

result and/or year-to-year results;

6) Conduct of the foregoing procedures on a regular basis.]

(f) Audit Control Policies and Procedures

Disclose all internal audit controls, policies and procedures that have been established by the company and

the result of an assessment as to whether the established controls, policies and procedures have been

implemented under the column “Implementation.”

Policies & Procedures Implementation

Internal Audit Procedure

Internal Quality Assurance Improvement

Program, periodic self-assessment and review;

periodic departmental performance review

against commitments.

Internal Audit Charter Internal Quality Assurance Improvement

Program, periodic self-assessment and review.

ISPPIA

Internal Quality Assurance Improvement

Program, periodic self-assessment and review;

External Quality Assurance Review in 2007 and

2014 (5-yr cycle), passed for both cycles.

(g) Mechanism and Safeguards

State the mechanism established by the company to safeguard the independence of the auditors, financial

analysts, investment banks and rating agencies (example, restrictions on trading in the company’s shares

and imposition of internal approval procedures for these transactions, limitation on the non-audit services

that an external auditor may provide to the company):

Auditors

(Internal and External) Financial Analysts Investment Banks Rating Agencies

For Internal Audit

To provide for

independence, the

Internal Audit

Department (IAD)

reports to functionally

to the Audit

Committee of the

Board of Directors and

administratively to the

Chief Finance Officer.

• We schedule one-on-

one meetings and

site visits to our

various

developments

separately for each

brokerage house

• As a policy, we do not

provide profit

guidance and allow

analysts to generate

their own forecasts

and estimates based

Underwriting:

• Securities issued to

the public are

registered with the

SEC

• Conduct of due

diligence review by

investment bank

• Underwriting

Commitment subject

to bank approval

Rating

• Conduct of due

diligence review

6 “Issues” are compliance matters that arise from adopting different interpretations. 7 “Findings” are those with concrete basis under the company’s policies and rules.

72

on our disclosures,

analyst briefings, and

operating stats that

we make readily

available

• We provide the same

information to all

research analysts,

financial institutions,

and fund managers

• Pricing of securities

are subject to auction

or book building

process

• Securities issued are

held by a trustee in

behalf of the

investing public

For External Audit

The Audit Committee

of the Board

recommends the

appointment of the

External Auditors and

the fixing of their

remuneration to the

full Board.

The Audit Committee is

empowered to

independently review

the integrity of the

Company’s financial

reporting and oversee

the independence of

the external auditors.

• We schedule one-on-

one meetings and

site visits to our

various

developments

separately for each

brokerage house

• As a policy, we do not

provide profit

guidance and allow

analysts to generate

their own forecasts

and estimates based

on our disclosures,

analyst briefings, and

operating stats that

we make readily

available

• We provide the same

information to all

research analysts,

financial institutions,

and fund managers

Underwriting:

• Securities issued to

the public are

registered with the

SEC

• Conduct of due

diligence review by

investment bank

• Underwriting

Commitment subject

to bank approval

• Pricing of securities

are subject to auction

or book building

process

• Securities issued are

held by a trustee in

behalf of the

investing public

Rating

• Conduct of due

diligence review

(h) State the officers (preferably the Chairman and the CEO) who will have to attest to the company’s full

compliance with the SEC Code of Corporate Governance. Such confirmation must state that all directors,

officers and employees of the company have been given proper instruction on their respective duties as

mandated by the Code and that internal mechanisms are in place to ensure that compliance.

1. Aniceto V. Bisnar, Jr., President

2. Enrique B. Manuel, Jr, CFO & Compliance Officer

ROLE OF STAKEHOLDERS

1) Disclose the company’s policy and activities relative to the following:

Policy Activities

Customers' welfare CUSTOMER FIRST PROGRAM

• Deliver our products and services

to continually satisfy ever

changing expectations of our

customers while meeting all

applicable regulatory and

statutory requirements; improve

productivity;

• Launch and maintain an estate-

Customer Safety

Initiatives to promote and ensure

customer safety have been

implemented from the process of

land acquisition, planning, design,

construction and property

management. Considerations in

the implementation of customer

safety include the natural physical

environment, compliance with

73

wide emergency helpline to CBP

and CITP locators, building

occupants and mall merchants

and shoppers via a central

command where communication

for immediate assistance is

centralized

relevant government regulations

and the operational control

measures put in place by the

Company. In the past years, there

was no record of incidents of

non-compliance with regulations

and voluntary codes concerning

health and safety impacts of our

products and services.

Customer Privacy

Customer data is treated with

utmost confidentiality. The

Company’s Code of Ethics covers

guidelines on the use of Company

resources, classified or confidential

information. Controls on the

disclosure of classified information

are in place. Procedures on access

to information are documented in

the management system. In the

past years, there have been no

reported incidents of violation to

marketing, information and

labeling, and other products and

services regulations including

customer privacy.

Supplier/contractor selection

practice

Accreditation Process

The company implements standard

procurement policies and

procedures across its business units.

Regular supplier accreditation and

annual performance evaluation are

observed.

Accreditation of Contractors,

Suppliers, Consultants. Regardless

of the type and location of main

operations, all our suppliers

undergo a stringent supplier

accreditation process. Monitoring

of performance during service and

product delivery is done by specific

business units that are directly in

contact with the supplier. This

allows a dynamic evaluation

process, keeping our procurement

system at par with global standards

Environmentally friendly value-

chain

The Company continues to ensure

that its operations, from land

acquisition, design development,

construction and property

management are in conformity with

the requirements of international

standards for environmental

management. This system provides

the means for the Company to

manage its resources, wastes and

emissions, and contribute to

biodiversity restoration.

Environmental Health and Safety

Framework

Implementation of the

Environmental Sustainability

Initiatives

Tracking of energy /water usage

(intensity: per unit area)

• Continued Implementation of

the existing solid waste

management program of all

operational properties and

construction sites via APMC

and MDC, respectively in

partnership with neighboring

communities; track utilization

rate of recyclables collected

74

In providing real estate products and

services, we commit to sustainable

development and the safety and

health of our employees by:

• Mitigating land, air and

water pollution by

addressing the significant

environmental impacts of

our operations;

• Mitigating the occupational

risks by addressing the

significant hazards in the

workplace and operations;

• Complying with relevant

environmental and

occupational health and

safety laws and regulations;

• Continuously reviewing our

operational processes for

resource conservation,

waste reduction and the

mitigation of occupational

hazards and risks; and

• Continually improving

efficiencies through new,

safe and innovative

technologies and processes.

Climate Change Policy

We believe that climate change is

the greatest threat to mankind and

business sustainability, and its effect

is global, local and personal.

• We recognize our important

role in mitigating climate

change through our

business practices.

As a response we will:

• Become more energy-

efficient in our operations;

• Begin to account and

reduce the carbon footprint

in our operations and our

products and services

through our own efforts

and by influencing our

contractors; and

• Continue to ensure the

health and viability of our

controlled protected areas,

which

serve as carbon sinks.

from the company’s

assets/properties.

• Proper handling and disposal

of hazardous waste

• Wastewater treatment and

discharge via third party

Manila Water

• Monitor / reduce GHG

emissions.

• Implement health and safety

programs; zero lost time due

to accidents target.

Community interaction The company’s policy on Community

interaction or community relations

through the Corporate Social

Responsibility (CSR) is covered in the

company’s Sustainability Framework

The company’s Corporate Social

Responsibility initiatives form part

of the stakeholder engagement (on

socio-environmental and socio-

economic aspects) activities of the

75

Focusing on stakeholder

engagement:

CHI is committed to continually

improve its 1) corporate

sustainability performance

throughout the project development

cycle and 2) core business strategy

to maintain a long-term strategic

position while driving society

towards a sustainable path. CHI will

therefore:

• Anticipate prospects and risks

through a keen understanding

of current global and local

sustainability issues and trends

and develop strategies to

maintain a vital position in the

market;

• Arrive at business decisions

based on a deeper recognition

of our impacts to and

dependencies on our natural,

manufactured, financial,

human, intellectual, social and

relationship capitals;

• Ensure the company’s

relevance by continuously

engaging our stakeholders in

meaningful discussion while

aligning our value creation

model to their changing needs;

and

• Take leadership in shaping the

market and driving positive

change, particularly in areas

that are most relevant to our

business.

company. The following are

specific areas of priority:

• Community Development

Programs / Community

Alliance and Employee

Volunteer Program

• External Partnerships

<business organizations,

LGU/NGA, NGO, academic

institutions, Archdiocese

of Cebu, tourism agencies,

charitable institutions.

Specific programs/areas of

concern:

• Providing dynamic, resilient

and accessible spaces for all

stakeholders

• Providing venue for civic

interaction

• Job and partnership

opportunities for livelihood

local farmers, and small

businesses

• Partnerships and collaboration

for sustainability (urbanizing

and greening the city)

• Engaging stakeholders

through various engagement

meetings and sustainability

learning and working sessions

• Capacity Building Initiatives

Anti-corruption programs and

procedures?

Code of Ethics covering the Board of

Directors, Employees, and Vendors.

For Board of Directors

Members of the Board are

obligated to follow high ethical

standards while bearing in mind

the interests of all stakeholders.

Directors are expected to act only

in the best interest of the company

and are required to comply with

the Code of Ethics. Thus, they are

required to disclose annually any

conflict of interest through a

Disclosure Form. Any material

conflict of interest found shall

cause disqualification from the

Board. Moreover, directors are

required to abstain from

participating in discussions and

voting on any matter where they

76

are in conflict of interest.

For Employees

Orientation of Code of Ethics to

employees The Code of Ethical

Behavior outlines the general

expectations and set standards for

behaviour and ethical conduct. It

provides guidelines for all

directors, officers and CHI

employees, and that of

its subsidiaries and affiliates. It

aims to promote and foster

observance of principles founded

on ethics, sustainability, social

responsibility and good

governance. CHI and its employees

commit to adhere to the

Company’s core values in

conducting personal and business

affairs. The Code of Ethical

Behavior is intended to

be read in conjunction with the

Company’s Human Resources

Manual of Personnel Policies

which includes the Code of

Conduct governing acceptable

office conduct for the orderly

operation of the Company as well

as for the protection of

the rights, safety and benefit of the

total employee force. Company

employees are required to

annually disclose any business and

family-related transactions to the

Company by accomplishing the

Conflict of Interest Disclosure

Statement submitted to the Human

Resources and Admin Division that

monitors compliance of this policy.

For Vendors

Communicated to vendors through

a roadshow. This is also integrated

in the sealed bids and bidding

processes of the Company.

Vendor Code of Ethics is a policy

guidebook that prescribes ethical

business practices which our

vendors will need to abide by to

conduct business with the

company.

Safeguarding creditors' rights Loan Covenant Loan Agreement

77

2) Does the company have a separate corporate responsibility (CR) report/section or sustainability

report/section?

The Company publishes an integrated Annual and Sustainability Report. Likewise, the Company website

www.cebuholdings.com has a separate section on sustainability.

These sources provide information on the social capitals and environmental sustainability initiatives of the

company that strike a balance with its financial reporting. These sections detail the company’s social and

environmental development programs in partnership with the neighboring communities, LGUs, government and

non-government institutions and business /socio-civic organizations.

Local Economic Contributions/ Social Performance 2016 highlights:

Job Generation

The Company’s CSR initiatives cover CHI’s local economic contributions ranging from direct and indirect

employment – from the company’s organic employments to all our development’s total workforce which

increased by 14% in 2016 (vs. 2015).

Opportunities for Small Business / New entrants

Also in 2016, CHI allocated space for local food vendors (95 sellers of which 90% are new entrants in small

business) and various small-scale businesses to serve the needs of locators and their employees working at CHI’s

developments. This makes CHI’s business more relevant and sustainable in the long run, while creating more

value for the rest of the stakeholders. CHI aims to continue identifying and pursuing shared value strategies that

will benefit not just the company but everyone who has a stake in CHI’s success.

To boost the local economy, CHI through its mall operations in Ayala Center Cebu partnered with the Department

of Trade and Industry (DTI) and provided rent-free spaces at the mall for a mini trade fair featuring local products

from Calabarzon, Western/Eastern/Central Visayas and Western Mindanao.

Total Community Investments

CHI began to appreciate the immense value of sustaining relationships with neighboring communities. As a best

practice, CHI collaborated more closely with community leaders, socio-civic organizations, the academe,

government agencies and other parties who support CHI’s interventions in the areas of community development

particularly on the aspect of environment, education, livelihood and disaster preparedness. While organizing and

facilitating these programs incurred financial costs for the company, these ultimately helped Chi in shaping and

influencing more publics to share and live out the vision of a sustainable future, which CHI values beyond

immediate monetary gain.

In 2016, total community investments grew by 82% vs. the previous year, primarily driven by the increased

number of community activities conducted at Ayala Center Cebu and organized by external partner organizations

where CHI provided rent-free spaces for community events G4-EC1

3) Performance-enhancing mechanisms for employee participation.

CHI’s commitment in empowering and enabling its people will remain as the business grows. CHI believes that

high-performing employees will bring more success to the company’s business. CHI continues to invest in the

people by providing them a work environment that is creative, healthy and safe.

(a) What are the company’s policy for its employees’ safety, health, and welfare?

The Company supports and respects the protection of human rights and ensures that the institution does not

tolerate human rights abuses. It complies with all existing labor laws including retrenchment, redundancy, and

resignation. In terms of employee feedback mechanism, there are various channels to obtain feedback across the

organization Open lines of communication are available, including but not limited to, regular departmental

meetings, townhall events and a semi-annual internal customer survey.

(b) Show data relating to health, safety and welfare of its employees.

The Company’s top priority is the safety of its people. Ensuring the health and well-being of the people has been

the central focus of CHI through its CHI PLUS program for the past two years. As such, CHI’s HR department

78

conducted activities to promote physical vitality and holistic development. CHI also extended the participation

of this program to employees of CHI’s contractors MDC and APMC whom the company engages on a daily basis.

State the company’s training and development programs for its employees. Show the data.

The company enrolls its employees to certain training programs on a competency gap basis. The percentages

beside the programs enumerated above indicate the number of employees who attended each program.

People Development 2016 Highlights

Average training hours per employee is 30 hours, a 40% increase from the previous year. Training series include

leadership programs, technical training programs, know-your-project series and sustainability learning series.

People development programs /Capacity Building Programs for 2016 focused on the following areas: leadership,

technical training, mall personnel training, know-your-project training, and sustainability learning series.

Details can be found in our annual report (Section on Empowering People, page 150) which can be accessed via

this link: http://www.cebuholdings.com/wp-content/uploads/2017/01/2016-INTEGRATED-ANNUAL-AND-

SUSTAINABILITY-REPORT.pdf

(a) State the company’s reward/compensation policy that accounts for the performance of the company

beyond short-term financial measures.

The Company’s HR Policies related to reward and compensation as follows:

On Entry Level Wages- all newly hired employees are paid above minimum wage, about 40% to 50% higher

than the minimum wage.

On Full-time employee benefits – on top of the statutory benefits, permanent employees receive medical and

clothing allowances, emergency leave, group life and health insurance coverage, and retirement program.

On Retirement plan – the company has funded non-contributory retirement plan for its regular employees.

4) What are the company’s procedures for handling complaints by employees concerning illegal (including

corruption) and unethical behaviour? Explain how employees are protected from retaliation.

The company has adopted a Code of Ethical Behavior and a Whistleblowing Policy.

Code of Ethical Behavior

The Code of Ethical Behavior outlines the general expectations and standards of behavior and ethical conduct of

everyone in the company—including that of subsidiaries and affiliates. It is implemented in conjunction with the

company’s Human Resources Manual of Personnel Policies, and includes the Code of Conduct on acceptable office

behavior for the orderly operation of the company and the protection of the rights, safety and benefit of the

entire workforce. Company employees are required to annually disclose any business and family-related

transactions to the company by submitting a Conflict of Interest Disclosure Statement to the Human Resources

and Admin Division.

Our company’s Code of Ethics and Conflict of Interest Policy may be accessed through our website link:

http://www.cebuholdings.com/governance_list/12/

Whistleblowing Policy

We adopt a Whistleblowing Policy to encourage and empower all our employees, third-party business partners,

and other stakeholders to report any suspected or known illegal or unethical activity.

This policy covers any of the following concerns:

ᗌ conflicts of interest;

ᗌ misconduct or policy violations;

ᗌ theft, fraud or misappropriation;

ᗌ falsification of documents;

79

ᗌ financial reporting concerns, and

ᗌ retaliation complaints.

Our business integrity channels are spearheaded by our company’s Ethics Committee. These channels enable our

stakeholders to freely report fraud, violations of laws, rules and regulations, or misconduct, without fear of

retaliation. Our ultimate goal is to give all stakeholders every possible means to come forward so that they

provide information directly to top management or the Board of Directors. Whistleblowers may report via our

website through face-to-face meetings, email, or this link: http:// chiwhistle.cebuholdings.com/chiwhistle/.

There were no grievances filed related to our environmental performance and labor practices in 2016.

DISCLOSURE AND TRANSPARENCY

1) Ownership Structure

(a) Holding 5% shareholding or more

Shareholder Number of Shares Percent Beneficial Owner

Ayala Land, Inc. 1,283,969,101

66.87% Ayala Land, Inc.

PCD Nominee Corp.

(Filipino)

2,085,100 0.11% Ayala Land, Inc.

PCD Nominee Corp.

(Non-Filipino)

331,960,700 17.29% Aberdeen Asset

Management Asia

Limited

PCD Nominee Corp.

(Filipino)

218,144,579 11.36% PCD Nominee Corp.

(Filipino)

PCD Nominee Corp.

(Non-Filipino)

108,198,000 5.64% Aberdeen Fund

Managers Ltd.

Name of Senior

Management Number of Direct shares

Number of

Indirect shares / Through

(name of record owner)

% of

Capital

Stock

None of the members of the Company’s directors and management owns 2.0% or more of the

outstanding capital stock of the Company.

TOTAL

2) Does the Annual Report disclose the following: Pls. refer to the Integrated Annual and Sustainability

Report/SEC 17-A 2016/Code of Ethics

Key risks Yes

Corporate objectives Yes

Financial performance indicators Yes

Non-financial performance indicators Yes

Dividend policy

Yes.

To the extent feasible, it is the policy of the

Company to declare periodically a portion of its

unrestricted retained earnings as dividends to

shareholders, either in the form of stock or

cash, or both. The payment of dividends in the

future will depend on the Company’s earnings,

cash flow, investment program, and other

factors.

Details of whistle-blowing policy Yes

80

Biographical details (at least age, qualifications, date of first appointment,

relevant experience, and any other directorships of listed companies) of

directors/commissioners

Yes

Training and/or continuing education programme attended by each

director/commissioner Yes

Number of board of directors/commissioners meetings held during the year Yes

Attendance details of each director/commissioner in respect of meetings

held Yes

Details of remuneration of the CEO and each member of the board of

directors/commissioners Yes

Should the Annual Report not disclose any of the above, please indicate the reason for the non-

disclosure.

(a) External Auditor’s fee: Pls. refer to the SEC 17-A 2016 page #57 (Additional disclosures data).

Name of auditor Audit Fee Non-audit Fee

SGV & Co. P635.2k* - 2016 None

*Exclusive of value-added tax and out of pocket expenses.

(b) Medium of Communication

List down the mode/s of communication that the company is using for disseminating information.

The Company uses various multi-media channels and tools to establish and sustain linkages with its stakeholders

and the rest of the public, e.g. media relations and publicity and the use of social media. Regular group

discussions, face-to-face or virtual meetings and other modes of engagements are done via business groups,

divisions or departments with each of their specific stakeholder groups (e.g. focused group discussions,

regular/periodic meetings. circulars, annual /periodic reports, etc).

Specific to Investor Relations / Communication, the Company, through its Finance Division and Corporate

Communications team, facilitates investors’/financial analysts briefing. The same teams in coordination with the

Company’s Information Systems Department handles updating of the company’s website (with a dedicated IR

section) used as a tool to communicate to existing and potential investors and markets. In addition, the company

has expanded its traditional annual report to cover non-financial aspect of the business through its integrated and

annual sustainability report released within the month of April, yearly. This serves as a rich source of information,

not just for investors but the rest of the company’s stakeholders.

(c) Date of release of audited financial report: in 2016: February 23, 2016; in 2017: March 1, 2017

(d) Company Website: www.cebuholdings.com

Does the company have a website disclosing up-to-date information about the following?

Business operations Yes

Financial statements/reports (current and prior years) Yes

Materials provided in briefings to analysts and media Yes

Shareholding structure Yes

Group corporate structure Yes

Downloadable annual report Yes

Notice of AGM and/or EGM Yes

Company's constitution (company's by-laws, memorandum and articles of association) Yes

81

Should any of the foregoing information be not disclosed, please indicate the reason thereto.

(e) Disclosure of RPT: Pls. refer to the SEC 17-A 2016 (Audited FS-Notes to FS - Note #20 page no. 40).

RPT Relationship Nature Value

Subsidiaries of ALI-

(Avida Land Corp.,

Amaia Land Corp.,

Accendo Commercial

Corp., Alveo Land Corp.,

Ayala Land Metro

North, Northbeacon

Commercial Corp.,

Southgateway

Development Corp.,

Soltea Commercial,

Summerhill,

Avencosouth Corp.,

Makati Development

Corp., Ayala Land Sales,

Inc., North Triangle

Depot, Amicassa

Process Solutions, Inc.,

ALI Commercial Center,

& Leisure and Allied

Industries, Phils.)

Subsidiaries of ALI The transactions are

made at terms & prices

agreed upon by the

parties.

P953.4m

Southportal Properties,

Inc.

Associates The transactions are


agreed upon by the

parties.

P395.3m

Solinea Associates The transactions are


agreed upon by the

parties.

P251.3m

Central Block

Developers, Inc.



agreed upon by the

parties.

P72.5m

Cebu Insular Hotel

Company



agreed upon by the

parties.

P8.1m

Ayala Land, Inc. Parent

Company/Shareholder

The transactions are


agreed upon by the

parties.

P22.0m

Cebu District Property

Enterprise, Inc.

Joint Venture The transactions are


agreed upon by the

parties.

P1.6m

Others The transactions are


agreed upon by the

parties.

P0.4m

Total P1,704.6m

When RPTs are involved, what processes are in place to address them in the manner that will safeguard the

interest of the company and in particular of its minority shareholders and other stakeholders?

82

The Group in its regular conduct of business has entered into transactions with related parties. Parties are

considered to be related if, among others, one party has the ability, directly or indirectly, to control the other

party in making financial and operating decisions, the parties are subject to common control or the party is an

associate or a joint venture. Except as otherwise indicated, the outstanding accounts with related parties shall be

settled in cash. The transactions are made at terms and prices agreed upon by the parties. There have been no

guarantees provided or received for any related party receivables or payables and are generally unsecured.

Furthermore, these accounts are non-interest bearing except for intercompany loans.

The Group does not provide any allowance relating to receivable from related parties. This assessment is

undertaken each financial year through examining the financial position of the related parties and the markets in

which the related parties operate.

Related party transactions (RPTs) are conducted on an arm’s length basis and in a manner that ensures fairness to

the company’s best interest, and no less favorable than those generally available to non-related parties under the

same or similar circumstances. We require directors and key management personnel to inhibit themselves from

participating in discussions on a particular agenda when they are conflicted. Independent directors are likewise

requested to review material and significant RPTs to determine whether these are in the best interests of the

company.

All directors and employees of CHI and its subsidiaries are required to promptly disclose any business and family

related transactions to the company and/or its subsidiaries to ensure that potential conflicts of interest are

immediately brought to the attention of management. The company also prohibits the grant of loans to directors.

The Board may, at its option, require that a related party transaction that it has approved be also submitted to the

stockholders for consideration and ratification. In 2016, no RPTs were classified as financial assistance to entities

other than wholly owned subsidiary companies.

H. RIGHTS OF STOCKHOLDERS

1) Right to participate effectively in and vote in Annual/Special Stockholders’ Meetings

(a) Quorum

Give details on the quorum required to convene the Annual/Special Stockholders’ Meeting as set forth in

its By-laws.

Quorum Required 2/3 or 50% plus 1% of the

Outstanding Stock

(b) System Used to Approve Corporate Acts

Explain the system used to approve corporate acts.

The Chairman requested that any stockholder who wished to speak should identify himself after being

acknowledged by the Chair and to limit his remarks to the item in the Agenda under consideration.

Thereafter, the Secretary discussed the voting procedures. Ballots had been given to the stockholders to

enable them to vote in writing per item in the Agenda. The ballots set forth the proposed resolutions for

consideration by the stockholders and each proposed resolution would be shown on the screen as the same

was taken up at the meeting.

The Secretary also informed the stockholders that they generally act by the affirmative vote of the

stockholders owning at least a majority of the outstanding voting stock present at the meeting, but the

approval of the amendment to the Third Article of the Articles of Incorporation would require the affirmative

vote of stockholders representing two-thirds (2/3) of the outstanding capital stock. The election of directors

shall be by plurality of votes and every stockholder shall be entitled to cumulate his votes.

Each outstanding share of stock entitles the registered stockholder to one vote.

The Secretary also announced that the stockholders may cast their votes anytime during the meeting. All

votes received would be tabulated by the Office of the Corporate Secretary and the results of the tabulation

83

shall be validated by the external auditor, SyCip Gorres Velayo & Company (SGV). As the stockholders take up

an item in the Agenda, the Secretary would report on the votes that have been tabulated and the final tally of

votes would be reflected in the minutes of the meeting.

System Used Voting by poll

Description Straight and Cumulative Voting

(c) Stockholders’ Rights

List any Stockholders’ Rights concerning Annual/Special Stockholders’ Meeting that differ from those laid

down in the Corporation Code.

Stockholders’ Rights under

The Corporation Code

Stockholders’ Rights not in

The Corporation Code

Voting right None

Pre-emptive right None

Right of Inspection None

Right to Information None

Right to Dividends None

Appraisal Right None

Dividends:

Declaration Date Record Date Payment Date

October 9, 2013 November 5, 2013 November 29, 2013

November 11, 2014 November 25, 2014 December 9, 2014

December 01, 2015 December 16, 2015 December 23, 2015

November 17, 2016 December 2, 2016 December 12, 2016

(d) Stockholders’ Participation

1. State, if any, the measures adopted to promote stockholder participation in the Annual/Special

Stockholders’ Meeting, including the procedure on how stockholders and other parties interested may

communicate directly with the Chairman of the Board, individual directors or board committees. Include in

the discussion the steps the Board has taken to solicit and understand the views of the stockholders as well

as procedures for putting forward proposals at stockholders’ meetings.

Measures Adopted Communication Procedure

Definitive Info Statement report is sent

15 business days prior the schedule of

the meeting to the stockholders

Written through the Definitive Info

Statement

During the annual stockholders’

meeting, the Chairman of the Board

encourages the stockholders to ask

questions for each agenda or matters for

approval and solicits questions related

to the agenda during the question and

answer portion.

Verbal during the stockholders’ meeting

2. State the company policy of asking shareholders to actively participate in corporate decisions regarding:

a. Amendments to the company's constitution

84

b. Authorization of additional shares

c. Transfer of all or substantially all assets, which in effect results in the sale of the company

The Company calls for a regular or special stockholders’ meeting to propose to the stockholders the actions listed

above. The details of the proposed actions are presented in the Definitive Information Statement which is made

available to the stockholders. During the meeting, the Company’s board and/or management present the

proposed actions and encourage stockholders to ask questions. The affirmative vote of stockholders representing

at least 2/3 of the issued and outstanding capital stock of the Company is required for the approval of the above

items.

3. Does the company observe a minimum of 21 business days for giving out of notices to the AGM where

items to be resolved by shareholders are taken up?

Yes. Article 2, section 4 of the Amended By-laws states the requirement to be 15 business days prior the

meeting schedule.

a. Date of sending out notices:

For 2016 ASM: March 22, 2016

For 2017 ASM: March 27, 2017

b. Date of the Annual/Special Stockholders’ Meeting:

For 2016 ASM: April 18, 2016

For 2017 ASM: April 24, 2017

4. State, if any, questions and answers during the Annual/Special Stockholders’ Meeting.

Minutes of the Company’s Annual Stockholder Meeting dated April 24, 2017, indicates the information

below:

Stockholders’ Questions and Comments:

a. There being no question, the Chairman requested for a motion for approval.

On motion of Ms. Grace Bangot, seconded by Ms. Stella Principe, the stockholders approved the minutes

and adopted the following Resolution No. S-01-17, which was shown on the screen:

Resolution No. S-01-17

As tabulated by the Office of the Corporate Secretary and validated by SGV, the votes on the motion for

the approval of the minutes and the adoption of Resolution No. S-01-17 are as follows:

For Against Abstain

Number of Voted Shares 1,634,215,913 - -

% of Shares Represented 100% - -

b. The President thanked the employees, the Chairman and members of the Board, and the stockholders

whose continued support empowers the Corporation and Management to strive even harder towards

the goals it has set in the next few years and beyond.

An audio-visual presentation was shown to the stockholders as the President delivered his report.

There being no questions, comments and suggestions from the stockholders, Mr. Ivan Evangelista,

seconded by Ms. Mercy Heruela, moved for the noting of the annual report and the approval of the 2016

consolidated audited financial statements, and the adoption of the following Resolution No. S-02-17,

which was shown on the screen:

85


As tabulated by the Office of the Corporate Secretary and validated by SGV, the votes on the motion for

the noting of the annual report and the approval of the 2016 consolidated audited financial statements,

and the adoption of Resolution No. S-02-17 are as follows:

For Against Abstain

Number of Shares Voted 1,634,215,913 - -


c. The Chairman opened the floor for questions or comments. With no stockholder raising any question or

comment.

On motion of Ms. Kriselva Ferrer, seconded by Mr. Monik Calunod, the stockholders elected SGV as

external auditor of the Corporation for the current fiscal year and approved SGV’s audit fee, and adopted

the following Resolution No. S-04-17, which was shown on the screen.


As tabulated by the Office of the Corporate Secretary and validated by SGV, the votes on the re-election

of SGV as external auditor of the Corporation, the approval of its audit fee, and the adoption of

Resolution No. S-04-17 are as follows:

For Against Abstain

Number of Shares Voted 1,634,215,913 - -


No Stockholder voted against or abstained from voting on the matter.

d. Other Matters

The Chairman opened the floor for questions or comments from the stockholders on other matters

which are relevant and of general concern to them but none were posed or made.

5. Result of Annual/Special Stockholders’ Meeting’s Resolutions.

Minutes of the Company’s Annual Stockholder Meeting dated April 24, 2017, indicates the information

below:

Voting Results-85.11% or 1,634,215,913 shares over 1,920,073,623 total outstanding shares

6. Resolution: 7. Approving: 8. Dissenting: 9. Abstaining:

10. Approval of

contracts,

projects,

investments,

and treasury

matters

11. 85.11%

(owners of

1,634,215,91

3 shares over

1,920,073,62

3 total

outstanding

shares)

12. No

stockholder

voted against

the

resolution

13. No

stockholder

abstained

from the

votation.

14. Date of publishing of the result of the votes taken during the most recent AGM for all resolutions:

April 24, 2017.

(e) Modifications

State, if any, the modifications made in the Annual/Special Stockholders’ Meeting regulations during the most

recent year and the reason for such modification:

86

Modifications Reason for Modification

None

(f) Stockholders’ Attendance

(i) Details of Attendance in the Annual/Special Stockholders’ Meeting Held:

Type of

Meeting

Names of Board members /

Officers present Date of

Meeting

Voting

Procedure

(by poll,

show of

hands,

etc.)

% of SH

Attending

in Person

% of SH

in Proxy

Total % of

SH

attendance

Annual Board of Directors:

Bernard Vincent O. Dy

Aniceto V. Bisnar, Jr.

Emilio J. Tumbocon

Anna Ma. Margarita B.

Dy

Jose Emmanuel H.

Jalandoni

Fr. Roderick C. Salazar,

Jr., SVD

Pampio A. Abarintos

Enrique L. Benedicto

Key Officers:



Enrique B. Manuel, Jr.

Ma. Cecilia Crispina T.

Urbina

June Vee M. Navarro

Nimfa Ambrosia P. Paras

April 24,

2017

By Poll

had been

given to

the

stockhol

ders to

enable

them to

vote in

writing

per item

in the

Agenda.

40

Stockhold

ers

attending

in person

85.09%

proxies

appointin

g the

Chairman

85.11%

(owners of

1,634,215,9

13 shares

over

1,920,073,6

23 total

outstanding

shares)

Special N.A

(ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes at the

ASM/SSMs?

Representatives of SGV & Co. for the current year and for the most recently completed fiscal year are

expected to be present at the Annual Stockholders’ Meeting. They are expected to be available to

respond to appropriate questions and to count the on-line voting/manual ballots if the need arises.

(iii) Do the company’s common shares carry one vote for one share? If not, disclose and give reasons for

any divergence to this standard. Where the company has more than one class of shares, describe the

voting rights attached to each class of shares.

Yes, the company’s common shares carry one vote for one share.

(g) Proxy Voting Policies

State the policies followed by the company regarding proxy voting in the Annual/Special Stockholders’

Meeting.

The answers below use the article III, section 6 of the amended by-laws as reference.

87

Company’s Policies

Execution and acceptance of proxies Any stockholder entitled vote may be represented by a proxy

at any regular or special stockholders’ meeting.

Notary Proxies shall be in writing and signed and in accordance with

the existing laws, rules, and regulations of the SEC.

Submission of Proxy

Duly accomplished proxies must be submitted to the office of

the corporate secretary not later than 7 business days prior

to the date of the stockholders’ meeting.

Several Proxies None to report

Validity of Proxy

Validation of proxies shall be conducted by the Proxy

Validation Committee at least 5 days prior to the date of the

stockholders’ meeting.

Proxies executed abroad None to report

Invalidated Proxy None to report

Validation of Proxy

Validation of proxies shall be conducted by the Proxy

Validation Committee at least 5 days prior to the date of the

stockholders’ meeting.

Violation of Proxy None to report

(h) Sending of Notices

State the company’s policies and procedure on the sending of notices of Annual/Special Stockholders’

Meeting. The answers below use the article III, section 3 of the amended by-laws as reference.

Policies Procedure

Regular or Special meeting of stockholders shall

be called by written or printed notice addressed

to the address registered in the books of the

corporation at least 15 business days in advance

of the date for which the meeting is called. The

Corporation may also provide information or

documents to a stockholder by e-mail or by

posting the information or documents on the

website of the Corporation or another electronic

network; provided that, a separate notice is given

to the stockholder of such posting. In case the

Corporation provides information or documents

by electronic posting, the information or

documents shall be deemed delivered or given

upon later of (i) the posting of the information or

documents or (ii) the giving of a separate notice

to the stockholders of such specific posting.

Regular or Special meeting of stockholders shall

be called by written or printed notice and shall

be sent by personal delivery, telex, fax,

electronic mail, or by mail, with postage prepaid.

(i) Definitive Information Statements and Management Report

Number of Stockholders entitled to receive

Definitive Information Statements and

Management Report and Other Materials

4,073

Date of Actual Distribution of Definitive

Information Statement and Management Report

and Other Materials held by market

participants/certain beneficial owners

March 27, 2017

Date of Actual Distribution of Definitive

Information Statement and Management Report March 27, 2017

88

and Other Materials held by stockholders

State whether CD format or hard copies were

distributed CDs & Hardcopies

If yes, indicate whether requesting stockholders

were provided hard copies Yes

(j) Does the Notice of Annual/Special Stockholders’ Meeting include the following:

Each resolution to be taken up deals with only one item. YES

Profiles of directors (at least age, qualification, date of first

appointment, experience, and directorships in other listed companies)

nominated for election/re-election.

YES

The auditors to be appointed or re-appointed. YES

An explanation of the dividend policy, if any dividend is to be declared.

YES, To the extent feasible,

it is the policy of the

Company to declare

periodically a portion of its

unrestricted retained

earnings as dividends to

shareholders, either in the

form of stock or cash, or

both. The payment of

dividends in the future will

depend on the Company’s

earnings, cash flow,

investment program, and

other factors.

The amount payable for final dividends.

YES

Documents required for proxy vote. YES

Should any of the foregoing information be not disclosed, please indicate the reason thereto.

2) Treatment of Minority Stockholders

Pls. refer to the Revised Corporate Governance Manual (Right to Information page #31).

(a) State the company’s policies with respect to the treatment of minority stockholders.

Policies Implementation

The minority stockholders shall have the right to

propose the holding of a meeting, and the right to

propose items in the agenda of the meeting,

provided the items are for legitimate business

purposes. In accordance with existing law and

jurisprudence, minority shareholders shall have

access to any and all information relating to

matters for which the management is accountable

for and to those relating to matters for which the

management should include such information

and, if not included, then the minority

shareholders can propose to include such matters

in the agenda of stockholders’ meeting provided

The Corporation’s website contains all

information relating to matters for which the

management is accountable for.

89

always that this right of access is conditioned

upon the requesting shareholder’s having a

legitimate purpose for such access.

(b) Do minority stockholders have a right to nominate candidates for board of directors?

Pursuant to the Corporation Code, any shareholder—including minority shareholders—shall have the right to

nominate candidates to the Board.

I. INVESTORS RELATIONS PROGRAM

1) Discuss the company’s external and internal communications policies and how frequently they are reviewed.

Disclose who reviews and approves major company announcements. Identify the committee with this

responsibility, if it has been assigned to a committee.

Corporate Communication: External Communication

Objectives

The Company’s (internal and external) communication process aims to strengthen the corporate brand, manage

corporate reputation and improve public perception of the company and its products by communicating the right

information to the right stakeholders through appropriate multi media channels and stakeholder engagement

initiative Policy.

Policy / Reviews

The External communication process is documented as a procedure in the company’s policies and procedures

manual. This process is subject to reviews either through the Corporate Communications Department (on specific

initiatives) and via internal audits.

The communication policy is expounded within the external communication procedure. The Corporate

Communication Division takes on the role of providing information and feedback to the company’s external

publics.

• External communication addressed to the company shall be referred to the CorpCom Department

for proper handling, while announcements, disclosures, corporate and project milestones are

communicated via local and national media-generated news stories (for local/national print and

broadcast media) and through the company websites and through engagements with specific

stakeholder groups.

• External communication related to the company’s management system that has impact on the

company’s image , reputation, business and customer and are addressed to a division/department or

anyone in the organization, except those directly addressed to the President, are coursed through

the Corporate Communication Division for proper handling. Other forms of communication will be

handled at the discretion of the addressee department.

• Customer complaints from various sources: departments, divisions, areas of operations, etc. are

entered as cases in a program called Total Customer Satisfaction Management System (TCS- MS)

and are responded to or addressed through the company’s various customer relations desks from

the Commercial Business Group for retail and office leasing operations and from Real Estate

Business Group

• Corporate information, projects and other updates can be obtained from the company’s website

www.cebuholdings.com. A centralized customer contact info is provided for customer inquiry/

feedback: [email protected]

2) Describe the company’s investor relations program including its communications strategy to promote effective

communication with its stockholders, other stakeholders and the public in general. Disclose the contact details

(e.g. telephone, fax and email) of the officer responsible for investor relations.

90

Details

(1) Objectives The company’s investor communication program aims to

provide information and feedback to existing and potential

investors about the company’s business activities, projects and

programs.

(2) Principles As a publicly-listed company, CHI adopts the principles of

transparency and accountability. The company has a system to

communicate externally its governance structure, business

processes, its human resources, its targets and the results of the

company’s financial and non-financial performance. To meet

the challenges of corporate transparency and accountability, the

company ensures that it continually carries out its business by

considering the stake of the different parties with which it

partners with. This gives its stakeholders the assurance and

confidence that the company is practicing the following:

• Adequate and prompt disclosure to regulatory bodies

and compliance to legal and regulatory requirements,

being an important component of our management

system.

• Adherence to governance framework by every member

of the organization

• Ensuring competitive advantage and sustainability

In reporting the company’s performance, CHI adopts the

following principles:

• Balance : The company’s Annual and Sustainability

Reports (ASR) present both positive and negative

performance trends with accompanying assessment

and analysis of performance.

• Comparability : Consolidated financial data within a

three to five- year period are presented in the ASR. For

clarity and easy reference, data are presented in

graphs, matrices and diagrams.

• Accuracy and Reliability: To ensure reliability of

information presented in the report, the Company uses

internal audit for the verification of data related to the

management system. Verification of performance data

is done by members of the Sustainability Technical

Working Group. Financial performance data are

obtained from the audited financial statements done by

an independent auditor, Sycip Gorres Velayo & Co.

• Timeliness: Release of the report is scheduled in time

for the Company’s annual stockholders’ meeting within

the month of April.

• Clarity: The Company continues to improve the manner

of presenting the data reflected in the report through

changes in design and structure. The use of charts,

graphs, matrices and lists provide the readers a simpler

and more straightforward presentation of data as quick

reference. The report is uploaded in the Company’s

website in a different format to serve the requirements

of other stakeholders who prefer to use the internet as

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a tool to obtain information.

The company’s 2016 annual and sustainability report is a

pioneer in Global Reporting Initiative G4 standard reporting

having applied the materiality principle and verified by GRI. The

reporting process started with 1) identification of material

aspects in terms of sustainability context and stakeholder

inclusiveness; then 2) materiality prioritization; 3) validation for

completeness; and 4) review in terms of sustainability context

and stakeholder engagement.

The company continues to report using the GRI G4 standard

reporting.

(4) Modes of Communications The company uses various multi-media channels and tools to

establish and sustain linkages with its stakeholders and the rest

of the public, e.g. media relations and publicity and the use of

social media. Regular group discussions, face-to-face or virtual

meetings and other modes of engagements are done via

business groups, divisions or departments with each of their

specific stakeholder groups.

Specific to Investor Relations / Communication, the company,

through its Finance Division and Corporate Communications

team, facilitates investors’/financial analysts briefing. The same

teams in coordination with the Company’s Information Systems

Department handles updating of the company’s website (with a

dedicated IR section) used as a tool to communicate to existing

and potential investors and markets.

(4) Investors Relations Officer As mentioned above, the company’s Finance Division, Corporate

Communication and Information Systems Department jointly

take on the role of investor relations / communication for CHI.

This team is headed by Noel F. Alicaya, the Finance and Control

Officer.

3) What are the company’s rules and procedures governing the acquisition of corporate control in the capital

markets, and extraordinary transactions such as mergers, and sales of substantial portions of corporate assets?

Company’s Rules and Procedures for Mergers and Acquisitions:

1. Starts with Strategy and Planning where a potential transaction is assessed in the context of strategic goals of

the Company, its subsidiaries and affiliates;

2. Once this is pre-cleared through the Investment Committee (IC), the transaction then goes to the second

stage of evaluation and screening for a more detailed due diligence procedure. In this stage, a project lead,

team members (from financial, technical, legal, commercial, environmental, etc.), steering committee

members (preferably composed of business unit, finance and legal representatives) and external advisors are

formed and engaged;

3. An inventory of risks with various risk levels / probability of occurrence and suggested risk mitigants are

reported to the Steering Committee for evaluation, recommendation and discussion of risk levels, tolerance

and mitigation strategies;

4. The key transaction risks and mitigation strategies identified along with the proposed offer, structure and

authorized signatories are then subject to IC approval;

5. The proposal will also pass the Board of Directors for approval.

6. Once approved, the final bid or offer is prepared and the binding terms of the definitive agreements are

negotiated and discussed.

7. After signing, the transaction is then disclosed to the public.

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Company’s Rules and Procedures for Divestments:

1. Starts with strategy and planning on the account of the portfolio review or business unit initiative in the

context of strategic goals of Company, its subsidiaries and affiliates;

2. Approval of the Investment Committee is needed in order to determine initial position of whether to hold or

sell;

3. Once pre-cleared, a project lead, team members (from financial, technical, legal, commercial, environmental,

etc.), steering committee members (preferably composed of business unit, finance and legal representatives)

and external advisors are formed and engaged;

4. Divestment plans (with identification of potential buyers and target selling price) are prepared;

5. Investment teaser is provided to the interested buyers and they are asked to sign an Non-Disclosure

Agreement (NDA);

6. After signing the NDA/exclusivity agreement, buyers can then perform its own due diligence;

7. Offers are evaluated by the team and steering committee and presented Executive Committee/Board of

Directors for approval.

8. Once approved, the final bid or offer is prepared and the binding terms of the definitive agreements are

negotiated and discussed;

9. After signing, the transaction is then disclosed to the public.

Name of the independent party the board of directors of the company appointed to evaluate the fairness of the

transaction price.

The company engaged various accredited independent parties to issue fairness opinion reports for the Company’s

mergers, acquisitions of assets and divestment transactions.

J. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Discuss any initiative undertaken or proposed to be undertaken by the company.

In 2016

Initiative Beneficiary / UPDATES 2016

Various community investments in the form of

(mall and estate spaces for community initiatives

and contributions to continuing programs . As best

practice, the company collaborated more closely

with community leaders, socio-civic organizations,

the academe, government agencies, and other

parties who share CHI’s interventions and

programs in the areas of education, health and

wellness, culture and religion, advocacies for

children and PWD, environmental awareness, and

disaster preparedness.

While organizing and facilitating these community

programs incurred financial costs (close to P20

million in mall and estate spaces as well as

contributions in cash and kind), these ultimately

helped CHI in shaping and influencing more publics

to work together to contribute further to the socio-

economic development of Cebu.

External organizations benefited:

- Socio –civic orgs

- Academic institutions

- Non-government organizations

- LGUs

- National government agencies (DTI, DENR-

EMB)

- Business organizations e.g. Cebu Chamber of

Commerce and Industry

- MSME’s via mall exhibits and displays to

promote local products among shoppers and

merchants

Part of the company’s plans and programs moving

forward include the support to DTI’s Go Negosyo

program that builds the capacity of small and

medium enterprises as well as support to

communities in terms of livelihood.

The company’s community relations initiatives are

refered to as ‘Agbayay’ – a Cebuano term that

connotes partnerships among equals. The

development programs focus on livelihood,

environment, education, health, employment and

32 members of the solid waste management team

of Barangay Luz and their families continue to

benefit from the partnership.

Our Agbayay partnership programs with our

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emergency preparedness and response.

Agbayay sa Pag-Asenso

a. Collection of Recyclables : CHI continued its

partnership with Barangay Luz for the collection of

recyclables from Ayala Center Cebu and Cebu

Business Park. The program provides livelihood for

more than 20 members of the solid waste

management team from Barangay Luz who are

responsible for daily garbage collection

neighboring communities continue to draw positive

outcomes in all key intervention areas. The

company attributes this success to its engagement

with the community leaders and representatives

who have become its strong allies in promoting

local economic development.

Performance Highlights from Solid Waste

Management Partnership with Brgy. Luz:

• Generated P2.96 million in income from

collected recyclables and other wastes, 7%

higher from the previous years

• Diverted 999 tonnes of recyclables and

other wastes from being thrown to the city

landfill, 10% more than in 2015

• 56%, equivalent to 331 tonnes of the

recyclables collected are dry cartons which

are either sold or upcycled.


b. Upcycling

CHI continues to support the recycling program of

Bgy Luz by providing opportunities to develop

additional markets e.g. organizations with needs

for corporate giveaways or convention kits.

‘Manu Manu’ as a brand continues to sell among

the markets that Barangay Luz has developed –

from exports to convention requirements and

corporate giveaways. Todate, Manu-Manu

products have earned for the women of barangay

Luz more than one million pesos.

Emergency Preparedness and Response

Regular drills are conducted in the company’s

properties in coordination with the neighboring

communities, CHI’s property management arm,

APMC, the LGU, BFP and other key agencies.

Key representatives from neighboring barangays:

Luz, Hipodromo, Kamputhaw, Apas, Mabolo,

Carreta

Environment

1 Green and open spaces / Tree Growing /

Inventory - Cebu Business Park and Cebu I.T. Park,

developed by the company, have a total of 62,758

square meter of open green spaces.

The company also records a total of 5,621 trees at

its developments, of which63% are native trees.

The local varieties of trees in our developments

serve as buffer from future disasters and provide

our estates with a distinct sense of place that is

uniquely Cebuano. They also provide our

communities with breathable green spaces that

add value to our businesses in the long run.

Native trees, in particular, possess the natural

ability to recover from damage caused by pests,

diseases, and turbulent weather. They also help

restore the natural habitats of many species of

wildlife, including soil flora and fauna.

2. Bamboo Propagation – for site resiliency. -

Through the company’s volunteer program,

bamboo propagation was conducted in 2016. Using

the traditional vegetative propagation method, the

1) Indirectly, the locators and patrons of the

estates benefit from the green and open

spaces and the trees that, not only make

the development climate-resilient, but also

provides a more breathable space for daily

routine and for health and wellness

activities.

2) Propagated bamboo poles will add to the

landscaping plan of the parks, giving 35%

more oxygen and absorbing more CO2

than any other plant species.

3) Moringa seedlings – benefited the

barangays because of its health-enhancing

properties, while it enriches soil quality,

functions as windbreaks for erosion

control. By introducing and cultivating the

fast-growing and drought-tolerant Moringa

tree to CHI’s neighboring communities, the

company is able to help barangay folks

improve their food security, while

providing valuable source of nutrition.

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volunteers propagated over 1000 Pole Bamboo

maintained at the company’s nursery. These will be

transplanted along the perimeter areas and in open

spaces at the parks.

3) Moringa growing project - one of the

sustainability impact projects of the company for

the year 2016 is the propagation of Moringa

Oleifera, Through the company’s ‘Agbayay’

Volunteer Program, employees propagated 4,000

seedlings turned over to six neighboring

communities of Cebu Business Park and Cebu IT

Park.

Education

The company supported DepEd’s Brigada Eskwela

by providing materials and volunteers in the

preparation of public schools’ classrooms for the

school year 2016 – 2017.

Elementary Schools of Neighboring communities:

Luz, Hipodromo, Kamputhaw, Apas, Mabolo and

Carreta, Lahug and Kasambagan.

In 2015

Initiative Beneficiary/ Updates 2015

The company’s community relations initiatives are

refered to as ‘Agbayay’ – a Cebuano term that

connotes partnerships among equals. The

development programs focus on livelihood,

environment, education, health, employment and

emergency preparedness and response.


a. Collection of Recyclables : CHI continued its

partnership with Barangay Luz for the collection of

recyclables from Ayala Center Cebu and Cebu

Business Park. The program provides livelihood for

more than 20 members of the solid waste

management team from Barangay Luz who are

responsible for daily garbage collection and

management of the composting facility. In 2013, a

total of 317,288 kilos of recyclables were collected

with an equivalent cash conversion of P1,705,634

Barangay Luz residents composing the SWM team of

garbage collectors and segregators


b. Livelihood training Series

CHI continues to support the recycling program of

Bgy Luz by providing training on product

development, marketing and managing a small

business and even branding the products. In 2013,

the product brand ‘Manu Manu’ was launched as part

of the ‘Ayala Fair Share Store’ held in Makati on two

separate occasions where all community partners of

Ayala subsidiary companies were invited to offer their

products for sale, both onsite and online. The

barangay continues to create and market products

from waste.

Women’s group of Barangay Luz

Emergency Preparedness and Response

Regular drills are conducted in the company’s

properties in coordination with the neighboring

communities, CHI’s property management arm,

APMC, the LGU, BFP and other key agencies.

Key representatives from neighboring barangays: Luz,

Hipodromo, Kamputhaw, Apas, Mabolo and Carreta

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Education

Various activities focusing on the graders from

neighboring communities include clean up,

renovation. improvements of classrooms and school

facilities via support to Brigada Eskwela and learning

sessions via the company’s volunteer program.

Elementary Schools of Neighboring communities: Luz,

Hipodromo, Kamputhaw, Apas, Mabolo and Carreta

Environment

The company is exploring mangrove planting as an

expanded initiative to complement the continuing

livelihood rebuilding program in three (3) sitios in Bgy

Bagay, Daanbantayan, North of Cebu.

Residents and fisherfolks- Sitio

Tugbongan and Sitio Bandilaan (2013-2014);Sitio

Alinsoob (2nd

half of 2014), all in Bgy Bagay,

Daanbantayan, Cebu

K. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL

Disclose the process followed and criteria used in assessing the annual performance of the board and its

committees, individual director, and the CEO/President.

Process Criteria

Board of Directors Annual self-assessment Corp. Governance Manual

Board Committees Annual self-assessment

Committee Charters

Individual Directors Annual self-assessment Corp. Governance Manual

CEO/President Annual self-assessment Corp. Governance Manual,

Balanced Scorecard

L. INTERNAL BREACHES AND SANCTIONS

Discuss the internal policies on sanctions imposed for any violation or breach of the corporate governance

manual involving directors, officers, management and employees.

The answers below use the Revised CG Manual (Article Vlll – Penalties for non-compliance, page 33 as

reference.

Violations Sanctions

The following penalties shall be imposed after notice

and hearing, on the Corporation’s directors, officers,

staff, in case of violation of any of the provisions of

the Revised Manual of Corporate Governance:

In case of first violation

In case of second violation

For third violation

• the subject person shall be reprimanded

• Suspension from office shall be imposed. The

duration shall be at the reasonable discretion of

the Board, depending on the gravity of the

violation

• Removal from office. The commission of a third

violation of this manual by any member of the

Board shall be a sufficient cause for removal from

directorship.

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