SECURITIES AND EXCHANGE COMMISSION SEC FORM ACGR ANNUAL...

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SECURITIES AND EXCHANGE COMMISSION

SEC FORM – ACGR

ANNUAL CORPORATE GOVERNANCE REPORT

1. Report is Filed for the Year 2012 2. Exact Name of Registrant as Specified in its Charter LIBERTY TELECOMS HOLDINGS, INC. 3. Technology Center Bldg., 2298 Chino Roces Ave Ext., Makati City 1231 Address of Principal Office Postal Code

4. SEC Identification Number ASO94-000357 5. (SEC Use Only)

Industry Classification Code

6. BIR Tax Identification Number 321-003508750

7. (632) 815-9801 / 818-0774 Issuer’s Telephone number, including area code

8. Not Applicable Former name or former address, if changed from the last report

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TABLE OF CONTENTS

A. BOARD MATTERS………………………………………………………………………………………………………………………….……… 4 1) BOARD OF DIRECTORS

(a) Composition of the Board………………………………………………………………………………….…….. 4 (b) Corporate Governance Policy/ies…………………………………………………………………………….. 4 (c) Review and Approval of Vision and Vision…………………….……………………………………....... 5 (d) Directorship in Other Companies……………………………………………………………………………… 5 (e) Shareholding in the Company…………………………………………………………………………………… 8

2) CHAIRMAN AND CEO……………………………………………………………………………………………………………….. 8 3) PLAN FOR SUCCESSION OF CEO/MANAGING DIRECTOR/PRESIDENT AND TOP KEY POSITIONS… 9 4) OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS……………………………………… 9 5) CHANGES IN THE BOARD OF DIRECTORS………………………………………………………………………………… 10 6) ORIENTATION AND EDUCATION PROGRAM……………………………………………………………………………. 18

B. CODE OF BUSINESS CONDUCT & ETHICS……………………………………………………………………………………………. 21

1) POLICIES…………………………………………………………………………………………………………………………………. 21 2) DISSEMINATION OF CODE………………………………………………………………………………………………….…… 23 3) COMPLIANCE WITH CODE………………………………………………………………………………………………………. 23 4) RELATED PARTY TRANSACTIONS…………………………………………………………………………………………….. 23

(a) Policies and Procedures………………………………………………………………………………………….. 23 (b) Conflict of Interest………………………………………………………………………………………………….. 24

5) FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS………………………………………………………… 25 6) ALTERNATIVE DISPUTE RESOLUTION……………………………………………………………………………………… 25

C. BOARD MEETINGS & ATTENDANCE……………………………………………………………………………………………….…… 26

1) SCHEDULE OF MEETINGS……………………………………………………………………………………………………….. 26 2) DETAILS OF ATTENDANCE OF DIRECTORS………………………………………………………………………………. 26 3) SEPARATE MEETING OF NON-EXECUTIVE DIRECTORS…………………………………………………………….. 26 4) QUORUM REQUIREMENT ……………………………………………………………………………………………………… 26 5) ACCESS TO INFORMATION……………………………………………………………………………………………………… 26 6) EXTERNAL ADVICE………………………………………………………………………………………………………………….. 27 7) CHANGES IN EXISTING POLICIES……………………………………………………………………………………………… 28

D. REMUNERATION MATTERS……………………………………………………………………………………………………………. 28

1) REMUNERATION PROCESS……………………………………………………………………………………………………… 28 2) REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS…………………………………………………… 28 3) AGGREGATE REMUNERATION …………………………………………………………………………………………….…. 29 4) STOCK RIGHTS, OPTIONS AND WARRANTS…………………………………………………………………………..… 29 5) REMUNERATION OF MANAGEMENT………………………………………………………………………………………. 30

E. BOARD COMMITTEES……………………………………………………………………………………………………………………… 30

1) NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES…………………………………………………. 30 2) COMMITTEE MEMBERS………………………………………………………………………………………………………….. 33 3) CHANGES IN COMMITTEE MEMBERS……………………………………………………………………………………… 35 4) WORK DONE AND ISSUES ADDRESSED……………………………………………………………………………………. 35 5) COMMITTEE PROGRAM…………………………………………………………………………………………………………. 36

F. RISK MANAGEMENT SYSTEM………………………………………………………………………………………………………….. 36

1) STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM…………………………………………. 36 2) RISK POLICY……………………………………………………………………………………………………………………………. 37 3) CONTROL SYSTEM………………………………………………………………………………………………………………….. 39

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G. INTERNAL AUDIT AND CONTROL…………………………………………………………………………………………………….. 40 1) STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM…………………………………………. 40 2) INTERNAL AUDIT

(a) Role, Scope and Internal Audit Function…………………………………………………………………. 40 (b) Appointment/Removal of Internal Auditor…………………………………………………………….. 41 (c) Reporting Relationship with the Audit Committee…………………………………………………. 42 (d) Resignation, Re-assignment and Reasons………………………………………………………………. 42 (e) Progress against Plans, Issues, Findings and

Examination Trends………………………………………………………..….………………………………….. 42 (f) Audit Control Policies and Procedures……………………………………………………………………. 42 (g) Mechanisms and Safeguards………………………………………………………………………………….. 42

H. ROLE OF STAKEHOLDERS….…………………………………………………………………………………………………………….. 44 I. DISCLOSURE AND TRANSPARENCY…………………………………………………………………………………………………. 46 J. RIGHTS OF STOCKHOLDERS…………………………………………………………………………………………………………….. 48

1) RIGHT TO PARTICIPATE EFFECTIVELY IN STOCKHOLDERS’ MEETINGS……………………………………… 48 2) TREATMENT OF MINORITY STOCKHOLDERS…………………………………………………………………………… 53

K. INVESTORS RELATIONS PROGRAM…………………………………………………………………………………………………. 53 L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES…………………………………………………………………………… 54 M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL…………………………………………………………………… 54 N. INTERNAL BREACHES AND SANCTIONS…………………………………………………………………………………………… 55

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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

Ramon S. Ang NED N.A. Evita C. Caballa Dec. 9, 2008

May 23, 2012

Annual Stock-

holders’ Meeting on May 23, 2012

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Evita C. Caballa NED N.A. Evita C. Caballa Dec. 9, 2008

Same Same 4

Dr. Nasser Marafih NED N.A. Michael Hancock Dec. 3, 2008

Same Same 4

Michael Hancock NED N.A. Michael Hancock Dec. 3, 2008

Same Same 4

Guy William Norman NED N.A. Michael Hancock May 23,

2012 Same Same .5

Andrew L. Huang ED N.A. Evita C. Caballa July 14,

2011 Same Same 1.5

Scott Weenink NED N.A. Michael Hancock July 14,

2011 Same Same 1.5

Carmelo L. Santiago ID N.A. Evita C. Caballa; no relationship

Dec. 9, 2008

May 23, 2012 (ID for 1 year)

Same 4

Conchita L. Manabat ID N.A. Michael Hancock; no relationship

May 24, 2011

May 23, 2012 (ID for 1 year)

Same 1.5

(b) Provide a brief summary of the corporate governance policy that the board of directors has adopted. Please

emphasize 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.

The Board’s corporate governance policies on the above-mentioned matters are as follows:

Shareholders shall 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.

A Director shall not be removed without cause if it will deny minority shareholders representation in the Board.

All stockholders are allowed to inspect corporate books and records including minutes of the Board meetings and stock registries in accordance with the Corporation Code and shall be furnished with annual reports, including financial statements, without cost or restrictions.

The stockholders shall be provided, upon request, with periodic reports which disclose personal and professional information about the Directors and officers and certain other matters such as their holdings of the Corporation’s shares, dealings with the Corporation, relationships among directors and key officers and the aggregate compensation of Directors and officers.

1 Reckoned from the election immediately following January 2, 2012.

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The minority stockholders shall have access to any and all information relating to matters for which the management is accountable for.

Stockholders shall have the right to receive dividends subject to the discretion of the Board.

The Corporation shall be compelled to declare dividends when its retained earnings shall be in excess of 100% of its paid-in capital stock, except: i) when justified by definite corporate expansion projects or programs approved by the Board or ii) when the Corporation is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or iii) when it can be clearly shown that such retention is necessary under special circumstances obtaining in the Corporation, such as when there is a need for special reserve for probable contingencies.

The stockholders shall have appraisal right or the right to dissent and demand payment of the fair value of their shares in the manner provided for under Section 82 of the Corporation Code of the Philippines, under any of the following circumstances: o In case any amendment to the Articles of Incorporation has the effect of changing or restricting

the rights of any stockholder or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence;

o In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets provided in the Corporation Code; and

o In case of merger or consolidation.

The Board shall be transparent and fair in the conduct of the annual and special stockholders’ meetings of the Corporation. The stockholders shall be encouraged to personally attend such meetings. If they cannot attend, they shall be apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the by-laws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy shall be resolved in the stockholder’s favor.

It is the duty of the Board to promote the rights of the stockholders, remove impediments to the exercise of those rights and provide an adequate avenue for them to seek timely redress for breach of their rights. The Board shall take the appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the stockholders’ meaningful participation in meetings, whether in person or by proxy. Accurate and timely information shall be made available to the stockholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval.

Although all stockholders shall be treated equally or without discrimination, the Board shall give minority stockholders the right to propose the holding of meetings and the items for discussion in the agenda that relate directly to the business of the Corporation, and are in accordance with law, jurisprudence and best practice.

All material information about the Corporation which could adversely affect its viability or the interests of the stockholders shall be timely disclosed to the stockholders. Such information shall include among others, earnings results, acquisition or disposition of assets, off balance sheet transactions, related party transactions.

The Board is primarily accountable to the stockholders. It shall provide them with a balanced and comprehensible assessment of the Corporation’s performance, position and prospects on a quarterly basis including interim and other reports that could adversely affect its business, as well as reports to regulators that are required by law.

(c) How often does the Board review and approve the vision and mission? The Company’s vision and mission statement is reviewed and approved as often as may be necessary.

(d) 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:

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

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Director’s Name Corporate Name of the

Group Company

Type of Directorship (Executive, Non-Executive, Independent). Indicate if

director is also the Chairman.

Ramon S. Ang Wi-tribe Telecoms, Inc. and Skyphone Logistics, Inc.

Chairman; NED

Dr. Nasser Marafih Same NED

Michael Hancock Same NED

Evita C. Caballa Same NED Guy William Norman Same NED Andrew L. Huang Same ED Conchita L. Manabat Same ID Scott Weenink Same NED

(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.

Ramon S. Ang San Miguel Corporation (SMC) San Miguel Properties, Inc. San Miguel Brewery Inc. Alphaland Corporation Petron Corporation Cyber Bay Corporation Ginebra San Miguel, Inc. San Miguel Pure Foods Company Manila Electric Company Philweb Corporation Top Frontier Investment Holdings, Inc. PAL Holdings, Inc. Philippine Airlines, Inc. Air Philippines Corporation SMC Global Power Holdings, Inc. Petron Malaysia Refining & Marketing Behad San Miguel Yamamura Packaging Corporation Anchor Insurance Brokerage Corporation And other SMC Subsidiaries

ED, Vice-Chairman ED, Chairman NED, Chairman ID ED, Chairman ED, Chairman ED NED, Vice-Chairman NED NED NED NED, Chairman ED ED NED, Chairman ED, Chairman NED, Chairman NED, Chairman NED

Dr. Nasser Marafih PT Indosat Tbk Starhub Ltd. Asiacell Communications PJSC Wataniya Palestine Mobile Telecommunications Public Shareholding Company

NED NED NED NED

Michael Hancock Wataniya Palestine Mobile Telecommunications Public Shareholding Company

NED

Evita C. Caballa Cyber Bay Corporation NED

Carmelo L. Santiago

San Miguel Brewery, Inc. San Miguel Brewery Hong Kong Limited San Miguel Pure Foods Company, Inc.

ID ID ID

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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

Ramon S. Ang Vega Telecom, Inc. Mr. Ang is the Vice Chairman of the Board and COO of SMC, the parent company of Vega Telecom, Inc.

Nasser Marafih Qtel West Bay Holding SPC ; Wi-tribe Asia Limited

Dr. Marafih is the CEO of Ooredoo, which is the parent company of wi-tribe Asia Limited which in turn is the parent company of Qtel West Bay Holding SPC

Michael Hancock Same Mr. Hancock is the General Counsel of Ooredoo, which is the parent company of wi-tribe Asia Limited which in turn is the parent company of Qtel West Bay Holding SPC

Scott Weenink Same Mr. Weenink is an Executive Director and General Counsel of Ooredoo (Asia), which is the parent company of wi-tribe Asia Limited which in turn is the parent company of Qtel West Bay Holding SPC

Guy William Norman Same Mr. Norman is the Business Development Director of Ooredoo, which is the parent company of wi-tribe Asia Limited which in turn is the parent company of Qtel West Bay Holding SPC

(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? The Company sets a limit on the number of board seats in other companies by requiring a director to exercise due discretion in accepting and holding directorships other than in the Company. In holding directorships in other companies, the director should ensure that his capacity to diligently and efficiently perform his duties and responsibilities as director of the Company shall not be compromised. The Company, however, does not impose an absolute limit of five board seats in other publicly listed companies. If yes, briefly describe other guidelines:

Guidelines

Maximum Number of Directorships in other companies

Executive Director N.A. N.A.

Non-Executive Director N.A. N.A.

CEO N.A. N.A.

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(e) 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

Ramon S. Ang 1 N.A. <0.01%

Dr. Nasser Marafih 1 N.A. <0.01%

Guy William Norman 1 N.A. <0.01%

Michael Hancock 1 N.A. <0.01%

Carmelo L. Santiago 1 N.A. <0.01%

Evita C. Caballa 1 N.A. <0.01%

Andrew L. Huang 1,000 N.A. <0.01%

Dr. Conchita L. Manabat 1 N.A. <0.01%

Scott Weenink 1 N.A. <0.01%

TOTAL 1,008

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 X No (v)

Identify the Chair and CEO:

Chairman of the Board Ramon S. Ang

CEO/President Andrew L. Huang

(b) Roles, Accountabilities and Deliverables

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

Chairman Chief Executive Officer

Role

Presides at the meetings of directors and stockholders and calls meetings and agenda items at the request of any two directors.

Responsible for the entire operations of the Company.

Accountabilities

Ensures that board meetings are held in accordance with the By-laws or as he may deem necessary; Maintains qualitative and timely lines of communication and information between the board and management.

Reports directly to the Chairman and the board; Implements board decisions and initiatives and maintains the smooth operation of the firm, with the assistance of senior management; In absence of the Chairman, presides at the meetings of directors and stockholders.

Deliverables Supervises the preparation of meeting agenda.

Signs certificates of stock as well as performs such other duties as are incident to his office or as directed or authorized by the board.

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3) Explain how the board of directors plan for the succession of the CEO/Managing Director/President and the top key management positions? In the event of an actual or anticipated vacancy in top/key management positions, the Board through the Nomination Committee goes through a selection process which includes the evaluation of the qualifications of the candidates for the positions.

4) 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 Nomination Committee, in pre-screening the nominees for the Board, shall consider the current composition of the Board, the attributes and qualifications of serving directors, additional attributes, capabilities or qualifications that should be represented to the Board, and whether the candidate could provide those additional attributes, capabilities or qualifications. 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 Nomination Committee, in evaluating the composition of the Board, ensures that at least one non-executive director has an experience in the industry the Company belongs to. Moreover, the Company requires all its directors to have a practical understanding of the business of the Company. Define and clarify the roles, accountabilities and deliverables of the Executive, Non-Executive and Independent Directors

Executive Non-Executive Independent Director

Role

To foster the long-term success of the Company and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives.



Accountabilities

A Director is primarily accountable to the stockholders. He shall provide them with a balanced and comprehensible assessment of the Company’s performance, position and prospects on a quarterly basis including interim and other reports that could adversely affect its business, as well as reports to regulators that are required by law. He shall also conduct fair business transactions with the Company, and ensure that his personal interest does not conflict



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with the interests of the Company; Devote the time and attention necessary to properly and effectively perform his duties and responsibilities; Act judiciously; Exercise independent judgment; Have a working knowledge of the statutory and regulatory requirements that affect the Company; Observe confidentiality; and exercise discretion in holding directorships.



Deliverables

To formulate and review the Company’s vision, mission, strategic objectives, key policies and procedures that shall guide its activities, including the means to effectively monitor Management’s performance.



Provide the company’s definition of "independence" and describe the company’s compliance to the definition. An “independent director” is a director independent of management and who, apart from his fees and shareholdings, is free from any business or other relationship with the Corporation which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director of the Corporation. The Company requires each independent director to certify, under oath, to the following:

a. a list of all his affiliations with other companies and organizations; b. that he possesses all the qualifications and none of the disqualifications to serve as an independent director

of the Company, as provided for in the Securities Regulation Code and its implementing rules and regulations; c. that he shall faithfully and diligently comply with his duties and responsibilities as independent director; d. that he shall inform the Corporate Secretary of the Company of any changes in the abovementioned

information within 5 days from its occurrence.

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 prescribes a term limit of five consecutive years for independent directors. After a two-year cooling off period, an independent director who has served the Company as such for five consecutive years may be re-elected as independent director for a maximum of another five consecutive years. After serving as independent director for ten years, the independent director is perpetually banned from being elected as such in the Company. 5) 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:

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Name Position Date of Cessation Reason

Sohail Qadri NED May 23, 2012 Term expired; Not re-elected

(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

1. Nominations shall be submitted in writing to the Corporate Secretary at least 15 calendar days before the annual stockholders’ meeting.

2. The Corporate Secretary shall forward the nominations to the Nomination Committee which shall pre-screen the candidates.

3. In pre-screening the candidates for election, the Nomination Committee shall review and evaluate their qualifications, and decide whether the nominee has all of the qualifications and none of the disqualifications for the position. The Committee may adopt the evaluation processes it deems appropriate, including a thorough review of the candidate's background, characteristics, qualities and qualifications, and personal interviews with the Committee as a whole, one or more members of the Committee or one or more other Board members.

4. The Committee will not recommend any candidate unless that candidate has indicated a willingness to serve as a director and has agreed to comply, if elected, with

During the pre-screening, the Committee shall also consider the current composition of the Board, the attributes and qualifications of serving Board members, additional attributes, capabilities or qualifications that should be represented to the Board, and whether the candidate could provide those additional attributes, capabilities or qualifications.

In addition to the qualifications for directorship provided for in the Corporation Code, Securities Regulation Code and other relevant laws, the minimum qualifications for directorship in the Company are as follows: 1. Must be at least a college

graduate or have sufficient experience in managing the business to substitute for such formal education;

2. Must be at least 21 years old;

3. Must possess integrity and probity;

4. Must have a practical understanding of the business of the Company;

5. Must not be permanently or temporarily disqualified.

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the expectations and requirements of Board service.

5. After pre-screening the candidates, the Nomination Committee shall prepare a final list of nominees after which no other nominations shall be entertained.

Elections shall be held every year.

(ii) Non-Executive Directors Same as above. Same as above.

(iii) Independent Directors

1. Nominations shall be submitted in writing to the Corporate Secretary at least 60 calendar days before the annual stockholders’ meeting. 2. The Corporate Secretary shall forward the nominations to the Nomination Committee which shall pre-screen the candidates.

3. In pre-screening the candidates for election, the Nomination Committee shall review and evaluate their qualifications, and decide whether the nominee has all of the qualifications and none of the disqualifications for the position. The Committee may adopt the evaluation processes it deems appropriate, including a thorough review of the candidate's background, characteristics, qualities and qualifications, and personal interviews with the Committee as a whole, one or more members of the Committee or one or more other Board members. 4. The Committee will not recommend any candidate unless that candidate has indicated a willingness to serve as a director and has agreed to comply, if elected, with the expectations and requirements of Board service. The Committee will likewise not recommend a candidate for independent

1. Same as above. 2. In addition, ID should be

independent of management and should, apart from his fees and shareholdings, be free from any business or other relationship with the Company which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director of the Company. Criteria provided in relevant SEC Memorandum Circulars and other relevant rules are followed.

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director unless the candidate certifies that he possesses all the qualifications and none of the disqualifications provided for in the Securities Regulation Code. 5. The final list of candidates for independent directors shall contain all the information about all the nominees for independent directors, as required under the Securities Regulation Code. The list shall be made available to the Securities and Exchange Commission and to all stockholders through the filing and distribution of the Information Statement in accordance with SRC rules, or in such other reports the Corporation is required to submit to the Commission. The name of the person or group of persons who recommended the nomination of the independent director shall be identified in such report including any relationship with the nominee. Elections shall be held every year.

b. Re-appointment


The process for initial selection/appointment of ED is also adopted for re-appointments.

The same criteria mentioned above for initial selection/appointment of ED shall also apply for re-appointments. Nomination Committee may also consider other factors including candidate’s contributions to the Board and ability to continue to contribute productively, and attendance at Board and committee meetings.

(ii) Non-Executive Directors

The process for initial selection/appointment of NED is also adopted for re-appointments.

The same criteria mentioned above for initial selection/appointment of NED shall also apply for re-appointments. Nomination Committee may also consider other factors including candidate’s contributions to the Board and ability to continue to

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contribute productively, and attendance at Board and committee meetings.


The process for initial selection/appointment for ID is also adopted for re-appointments.

The same criteria mentioned above for initial selection/appointment of ID shall also apply for re-appointments. Also, Nomination Committee may consider other factors including candidate’s contributions to the Board and ability to continue to contribute productively, and attendance at Board and committee meetings.

c. Permanent Disqualification


The Nomination Committee shall review and evaluate the qualifications of all persons nominated to the board. It shall pre-screen all nominees and determine whether they have all qualifications and none of the disqualifications for the position.

The grounds for permanent disqualification are as follows: 1. Any person who, by final

judgment or order by a judicial /administrative body: a. Is convicted of any crime

that is punishable by imprisonment for more than six years; involves the purchase or sale of securities; arises out of the person’s conduct as an underwriter, broker, dealer etc.; arises out of his fiduciary relationship with a bank, quasi-bank, trust corporation etc.; involves moral turpitude, embezzlement or other fraudulent acts;

b. Is adjudged to have willfully violated or willfully aided, induced or procured the violation of laws/rules that govern securities and banking activities;

c. Is permanently enjoined by a final judgment/ order by a judicial/ administrative body from acting as underwriter, broker, dealer etc. or acting as director/officer of a bank, quasi-bank, trust corporation etc.

The disqualification shall also apply if such person is currently the subject of an

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order of the SEC or any court/administrative body denying, revoking or suspending any registration, license or permit issued to him under the Corporation Code, Securities Regulation Code or the Bangko Sentral ng Pilipinas; or has been restrained to engaged in any activity involving securities and banking; or is currently the subject of an order of a self-regulatory organization suspending or expelling him from membership/participation with a member or participant of the organization;

2. Any person found guilty by final judgment/order of a foreign court or equivalent financial regulatory authority of acts/violations similar to those mentioned above;

3. Any person judicially declared as insolvent;

4. Any person earlier elected as independent director who becomes an officer, employee or consultant of the Company.


(iii) Independent Directors Same as above.

1. Same as above. 2. If ID ceases to be

“independent” in accordance with the Commission’s Memo Circulars and other relevant rules and regulations.

3. If the limitations on term and directorships in other companies with the Company’s Group are exceeded.

d. Temporary Disqualification


The Nomination Committee shall review and evaluate the qualifications of all persons nominated to the board. It shall pre-screen all nominees and determine whether they have all qualifications and

The grounds for temporary disqualification of directors are as follows: 1. Refusal to comply with the

disclosure requirements of the Securities Regulation Code and its Implementing

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none of the disqualifications for the position.

Rules and Regulations; 2. Absence in more than 50%

of all board meetings during his incumbency or any 12 month period during said incumbency, unless the absence is due to justifiable causes;

3. Dismissal or termination for cause as director of any corporation;

4. If any of the judgments or orders cited in the grounds for permanent disqualification has not yet become final;

5. If the beneficial equity ownership of an independent director in the corporation or its subsidiaries and affiliates exceeds 2% of its subscribed capital stock.


(iii) Independent Directors Same as above.

1. Same as above. 2. After completion of the 5-

year service period, an ID shall be ineligible for election as such in the Company unless the ID has undergone a “cooling off” period of 2 years.

e. Removal


Any director of the Company may be removed from office by vote of the stockholders holding or representing at least 2/3 of the outstanding capital stock. Such removal shall take place either at a regular meeting of the Company or at a special meeting called for the purpose, after previous notice to the stockholders of the intention to propose such removal at the meeting. A special meeting of the stockholders for the purpose of removal of directors, or any of them, must be called by the secretary on order of the president or on the written demand of the stockholders representing or holding at least majority of the

Removal may be with or without cause. Provided, that removal without cause may not be used to deprive minority stockholders of the right of representation to which they may be entitled under the Corporation Code.

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outstanding capital stock. Should the secretary fail or refuse to call the special meeting upon such demand or fail or refuse to give the notice, or if there is no secretary, the call for the meeting may be addressed directly to the stockholders by any stockholder of the Company signing the demand. Notice of the time and place of such meeting and the intention to propose such removal, must be given by publication or by written notice.

(ii) Non-Executive Directors Same as above. Same criteria for removal of ED.

(iii) Independent Directors Same as above. Same criteria for removal of ED.

f. Re-instatement


Same process as stated above in the initial selection or election and re-election of ED is adopted.

Same criteria as stated above in the initial selection or election and re-election of ED is adopted.

(ii) Non-Executive Directors

Same process as stated above in the initial selection or election and re-election of NED is adopted.

Same criteria as stated above in the initial selection or election and re-election of NED is adopted.


Same process as stated above in the initial selection or election and re-election of ID is adopted.

Same criteria as stated above in the initial selection or election and re-election of ID is adopted.

g. Suspension

(i) Executive Directors Same process as stated above in the removal of ED is adopted.

Same criteria as stated above in the removal of ED is adopted.

(ii) Non-Executive Directors Same process as stated above in the removal of NED is adopted.

Same criteria as stated above in the removal of NED is adopted.

(iii) Independent Directors Same process as stated above in the removal of ID is adopted.

Same criteria as stated above in the removal of ID is adopted.

Voting Result of the last Annual General Meeting

Name of Director Votes Received

1. Ramon S. Ang 92.49% of the outstanding capital stock

2. Dr. Nasser Marafih Same

3. Michael Hancock Same 4. Evita C. Caballa Same 5. Carmelo L. Santiago Same 6. Guy William Norman Same 7. Andrew L. Huang Same 8. Conchita L. Manabat Same 9. Scott Weenink Same

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6) Orientation and Education Program

(a) Disclose details of the company’s orientation program for new directors, if any. Within one month from their election, new directors confer with management, other members of the board, and/or the Corporate Secretary, and are furnished with relevant corporate documents and materials to familiarize and educate themselves about the business and operations of the Company and the industry.

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

three (3) years: The directors and senior management of the Company have received various updates and attended briefings on the telecommunications industry and trainings on corporate governance. The trainings and external courses attended by Directors and Senior Management for the past three years include the following:

Name of Director Name of training or external courses attended

Date of training Organized by

Ramon S. Ang Mandatory Accreditation Programme for Directors of Public Listed Companies

July 11 and 12, 2012 Bursatra Sdn. Bhd. in KL, Malaysia

Michael Hancock

Qtel International Legal Forum QTEL General Counsel Legal Forum

Oct. 27-29, 2010 Feb 15-17, 2012

Qtel International Qtel International

Scott Weenink Qtel International Legal Forum QTEL General Counsel Legal Forum

Oct. 27-29, 2010 Feb 15-17, 2012

Qtel International Qtel International

Evita C. Caballa Corporate Governance for Philippine Banks Board Directors’ Guide for Audit Committees Best Practices in Corporate Housekeeping

May 26 and 27, 2009 July 1-2, 2010 April 28-29, 2011

Bankers Institute of the Philippines Center for Global Best Practices Center for Global Best Practices

Conchita L. Manabat Seminar on Selected Processes in Finance Global Accreditation – Financial Accounting Standards & Skills MAP International Conference – Shaping the

February 24-25, 2010 September 4, 2010 September 14, 2010

Central Province – Society of the Divine Word International Association of Financial Executives Institutes (IAFEI) Japan Association of Chief Finance Officers Management Association of the Philippines

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

and controlling the activities of the company.

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Next Generation Organization MAP International Conference – Fast, Flat & Free Leading in the New, Convergent World Financial Leadership & Business Development in a New Reality Philippine Investment Challenges Bankers Roundtable Discussion on Financing Philippine Growth Assessment of Global & Asean Economics & Outlook for 2012 & Beyond Establishing Global Accreditation Program – Finance & Accounting Standards & Skills The Asset-FINEX Roundtable Philippine Financial Market Forum – The Way Forward Building Opportunities Role of Financial Executive as a Key Player of Corporate Governance & Responsible Management

September 13, 2011 September 16-18, 2011 October 14, 2011 October 25, 2011 May 31, 2012 June 18, 2012 November 14-17, 2012

Management Association of the Philippines International Association of Financial Executives Institutes (IAFEI) China Association of Chief Finance Officers Financial Executives Institute of the Philippines Management Association of the Philippines International Association of Financial Executives Institutes (IAFEI) Japan Association of Chief Finance Officers Financial Executives Institute of the Philippines The Asset International Association of Financial Executives Institutes (IAFEI) Insitituto Mexicano de Ejecutivos de Finanzas

Catherine V. Laurel-Carpio

Qtel International Legal Forum Leadership Training Annual Listing and Disclosure Rules

Oct 27-29, 2010 August 5 and September 19, 2011, and March 21, 2012 November 28, 2012

Qtel International People Sparx PSE, Inc.

Paul Bernard D. Causon Leadership Training Annual Listing and Disclosure Rules

May 2, August 5 and September 19, 2011, and March 21, 2012 November 28, 2012

People Sparx PSE, Inc.

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(c) Continuing education programs for directors: programs and seminars and roundtables attended during the year. The programs attended include but are not limited to the following:

Name of Director/Officer

Date of Training Program Name of Training

Institution

Ramon S. Ang Mandatory Accreditation Programme for Directors of Public Listed Companies

July 11 and 12, 2012 Bursatra Sdn. Bhd. in KL, Malaysia

Evita C. Caballa Board Directors’ Guide for Audit Committees Best Practices in Corporate Housekeeping Mandatory Continuing Legal Education

July 1-2, 2010 April 28-29, 2011 August 30, 31, September 6 & 7, 2012

Bankers Institute of the Philippines Center for Global Best Practices Asian Center for Legal Excellence, Inc.

Conchita L. Manabat

Seminar on Selected Processes in Finance Global Accreditation – Financial Accounting Standards & Skills MAP International Conference – Shaping the Next Generation Organization MAP International Conference – Fast, Flat & Free Leading in the New, Convergent World Financial Leadership & Business Development in a New Reality

February 24-25, 2010 September 4, 2010 September 14, 2010 September 13, 2011 September 16-18, 2011

Central Province – Society of the Divine Word International Association of Financial Executives Institutes (IAFEI) Japan Association of Chief Finance Officers Management Association of the Philippines Management Association of the Philippines International Association of Financial Executives Institutes (IAFEI) China Association of Chief Finance Officers

21

Philippine Investment Challenges Bankers Roundtable Discussion on Financing Philippine Growth Assessment of Global & Asean Economics & Outlook for 2012 & Beyond Establishing Global Accreditation Program – Finance & Accounting Standards & Skills The Asset-FINEX Roundtable Philippine Financial Market Forum – The Way Forward Building Opportunities Role of Financial Executive as a Key Player of Corporate Governance & Responsible Management

October 14, 2011 October 25, 2011 May 31, 2012 June 18, 2012 November 14-17, 2012

Financial Executives Institute of the Philippines Management Association of the Philippines International Association of Financial Executives Institutes (IAFEI) Japan Association of Chief Finance Officers Financial Executives Institute of the Philippines The Asset International Association of Financial Executives Institutes (IAFEI) Insitituto Mexicano de Ejecutivos de Finanzas

B. CODE OF BUSINESS CONDUCT and ETHICS

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

Business Conduct and Ethics

Directors Senior Management Employees

(a) Conflict of Interest

As a matter of policy, a director is prohibited from using his position to profit or gain some benefit or advantage for himself and/or his related interests. He shall avoid situations that may compromise his impartiality. If an actual or potential

Senior management is prohibited from engaging in any trade or business that is or may be in conflict with his duties or with the Company’s interest.

Employee is prohibited from engaging in any trade or business that is or may be in conflict with his duties or with the Company’s interest. No employee involved in the Procurement Process shall have a direct or indirect personal

22

conflict of interest may arise on the part of a Director, he shall fully and immediately disclose it and shall not participate in the decision-making process. A Director who has a continuing material conflict of interest shall seriously consider resigning from his position. A conflict of interest shall be considered material if the Director’s personal or business interest is antagonistic to that of the Corporation, or stands to acquire or gain financial advantage at the expense of the Corporation.

interest in any procurement (whether actual or under consideration), and shall not be or have a contractual right to be (directly or indirectly) a shareholder, interest holder, creditor, debtor, lessor, lessee, agent, board of director member, employee, contractor, consultant, or relative (of up to fourth degree of consanguinity) of a vendor or a person associated with a vendor participating in the procurement activity, whether the vendor is a natural person or entity.

(b) Conduct of Business and Fair Dealings

Same as above. Same as above. Same as above.

(c) Receipt of gifts from third parties

Same as above. Same as above. Same as above.

(d) Compliance with Laws and Regulations

The Company requires faithful compliance with all applicable laws and regulations.



(e) Respect for Trade Secrets/Use of Non-public Information

The Company requires directors to keep secure and confidential all non-public information they may acquire or learn by reason of their position as Director. They shall not reveal confidential information to unauthorized persons without the authority of the Board.

The Company requires senior management to keep secure and confidential all non-public information they may acquire or learn by reason of their position as senior management. They shall not reveal confidential information to unauthorized persons without proper authority from the Company.

The Company requires employees to keep secure and confidential all non-public information they may acquire or learn by reason of their employment. They shall not reveal confidential information to unauthorized persons without proper authority from the Company.

(f) Use of Company Funds, Assets and Information

As a policy, directors are required to exercise responsible use and to safeguard company assets. They shall supervise management in the formulation of rules and procedures to ensure protection of Company assets.

Responsible use and safeguarding of company assets. Employ effective internal control to ensure protection of Company’s assets.

Responsible use and safeguarding of company assets. Employ effective internal control to ensure protection of Company’s assets.

23

(g) Employment and Labor Laws and Policies




(h) Disciplinary action

As a policy, the Company observes procedural and substantive due process prior to the imposition of disciplinary actions.



(i) Whistle Blower

Encourage reporting suspected violations of ethical standards; Prohibit retaliatory action against whistle blower.



(j) Conflict Resolution

The Company has a policy of resolving disputes through various informal, voluntary and consensual techniques. The Company uses alternative dispute resolution systems to resolve disputes at an early stage, in an expeditious, cost effective, and mutually acceptable manner.



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

3) Discuss how the company implements and monitors compliance with the code of ethics or conduct. Management together with the Compliance Officer, Human Resource and Internal Audit functions, implement and monitor compliance by the employees with the HR Policy Manual and other policies of the Company relating to code of ethics or conduct. Compliance is also monitored through the full business interest disclosure forms submitted by the directors, senior management and employees.

4) Related Party Transactions (a) Policies and Procedures

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 Not applicable. The Company does not have a parent Company.

(2) Joint Ventures Not applicable. The Company has not entered into any joint

24

venture.

(3) Subsidiaries Not applicable. Subsidiaries are 100% owned by the Company and financial statements of the Company and its subsidiaries are consolidated.

(4) Entities Under Common Control The Company requires that related party transactions go through stringent internal corporate approvals and are entered into on an arm’s length basis similar to transactions with non-related parties.

(5) Substantial Stockholders Same as above.

(6) Officers including spouse/children/siblings/parents

Same as above.

(7) Directors including spouse/children/siblings/parents

As a matter of policy, a director is prohibited from using his position to profit or gain some benefit or advantage for himself and/or his related interests. He shall avoid situations that may compromise his impartiality. If an actual or potential conflict of interest may arise on the part of a Director, he shall fully and immediately disclose it and shall not participate in the decision-making process. A Director who has a continuing material conflict of interest shall seriously consider resigning from his position. A conflict of interest shall be considered material if the Director’s personal or business interest is antagonistic to that of the Corporation, or stands to acquire or gain financial advantage at the expense of the Corporation.

(8) Interlocking director relationship of Board of Directors

Same as above.

(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 Not applicable. No actual or probable

conflict of interest

Name of Officer/s Not applicable. No actual or probable


Name of Significant Shareholders Not applicable. No actual or probable


(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

The Company requires submission of full business interest disclosure forms and certifications of independent directors. The Nomination Committee also evaluates the background of directors and officers prior to their election.

Group Same mechanism indicated above for Company.

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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

N.A. N.A. N.A.

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

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

Names of Related Significant Shareholders

Type of Relationship Brief Description

N.A. N.A. N.A.

Aside from the shareholdings and significant shareholders advances, the significant shareholders do not have any family, commercial, contractual or business relations with the Company. (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

N.A. N.A. N.A.

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 and Stockholders

The Company employs various informal, voluntary and consensual techniques to amicably settle concerns of stockholders. The Company meets and coordinates with the concerned parties to discuss the concerns.

Corporation and Third Parties

Same as above. The Company also uses the alternative dispute resolution systems applicable for judicial, quasi-judicial and administrative proceedings.

Corporation and Regulatory Authorities

To the extent permitted by law, the Company employs various informal, voluntary and consensual techniques to amicably settle conflicts or differences with regulatory authorities. The Company meets and coordinates with the concerned parties to discuss differences.

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

26

C. BOARD MEETINGS and ATTENDANCE

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

Board of Directors’ meetings are scheduled at the beginning of the year, subject to final confirmation of the members.

2) Attendance of Directors

Board Name Date of Election

No. of Meetings Held

during the year

No. of Meetings Attended

%

Chairman Ramon S. Ang May 23, 2012 4 4 100%

Member Dr. Nasser Marafih May 23, 2012 4 0 0%

Member Michael Hancock May 23, 2012 4 3 75%

Member Evita C. Caballa May 23, 2012 4 4 100%

Member Sohail Qadri

Term expired on May 23, 2012

1 0 0%

Member Andrew L. Huang May 23, 2012 4 3 75%

Member Scott Weenink May 23, 2012 4 4 100%

Member Guy William Norman May 23, 2012 3 2 67%

Independent Carmelo L. Santiago May 23, 2012 4 4 100%

Independent Dr. Conchita L. Manabat May 23, 2012 4 4 100%

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 had several separate meetings without the presence of any executive.

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

No. The minimum quorum requirement for Board decisions is only majority of board members, unless the Corporation Code or the rules and regulations of regulatory bodies require a higher number.

5) Access to Information

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

Board papers are provided to the directors about three to five days in advance of the meeting.

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

(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.? The Corporate Secretary’s role includes the following:

i. Record or see to the proper recording of the minutes and transaction of all meetings of directors and stockholders, and be responsible for the safekeeping and preservation of the integrity of the Company’s official records;

ii. Be loyal to the missions, vision and objectives of the Corporation;

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.

27

iii. Work fairly and objectively with the Board, Management and stockholders; iv. Inform the members of the Board of the agenda of their meetings and ensure that the members

have before them accurate information that will enable them to arrive at intelligent decisions on matters that require their approval;

v. Attend all Board meetings, except when justifiable causes prevent him from doing so; vi. Ensure that all Board procedures, rules and regulations are strictly followed by the members;

vii. Inform management of the directives of the Board and update the Board on the actions taken by Management pursuant to said directives.

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

should the answer be in the negative. Yes, the Company Secretary is trained in legal and company secretarial practices. She is also familiar with basic accounting concepts.

(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 x No

Committee Details of the procedures

Executive After the materials for discussion/approval are sent, directors send their requests for clarification or additional materials to enable them to decide on the matter submitted for approval or disposition.

Audit Notice of the meeting, the agenda and related materials and presentations, if any, are sent to the different committee members at least three days before the scheduled meeting date. Directors email their comments, requests for clarification or additional materials to the Committee Secretary prior to the meeting date.

Nomination Same

Remuneration Same

Others (specify) N.A.

6) External Advice

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

Procedures Details

Audit Advice The directors have access to the external auditors of the Company and can secure their professional advice at any time. The directors also have access to an Audit Advisor, who is invited to all meetings of the Committee.

Compensation Advice The directors have access to a Compensation Advisor.

Legal Advice The directors have access, through the Corporate Secretary, to the Company’s external legal counsels for advice on legal and/or regulatory matters.

28

7) 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

N.A. N.A. N.A.

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:

Process CEO Top 4 Highest Paid

Management Officers

(1) Fixed remuneration

Based on the Company’s Scale of Salaries and Benefits which has been reviewed by the Compensation Committee.

Based on the Company’s Scale of Salaries and Benefits which has been approved by the Compensation Committee.

(2) Variable remuneration



(3) Per diem allowance Based on Human Resource Policy approved by the Board

Based on Human Resource Policy approved by the Board

(4) Bonus Subject to approval of the Executive Committee

Subject to approval of the Executive Committee

(5) Stock Options and other financial instruments

N.A. N.A

(6) Others (specify) N.A. N.A.

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.

Directors Remuneration

Policy Structure of

Compensation Packages

How Compensation is

Calculated

Executive Directors

The compensation should be consistent with the Corporation's culture, strategy and control environment. A director is not allowed to decide his remuneration.

Director only received per diem for each board/committee meeting attendance.

Each director receives a per diem of P50,000 for each board meeting attended, and a per diem of P25,000 for each board committee meeting attended.

Non-Executive Directors Same as above. Same as above. Same as above.

29

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 (3) years.

Remuneration Scheme Date of

Stockholders’ Approval

Not applicable. Directors do not receive other remuneration aside from per diem for board or

committee meetings attended. Not Applicable.

3) Aggregate Remuneration

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

Remuneration Item Executive Directors

Non-Executive Directors (other than independent

directors)

Independent Directors

(a) Fixed Remuneration 0 0 0

(b) Variable Remuneration 0 0 0

(c) Per diem Allowance 100,000 1,200,000 500,000

(d) Bonuses 0 0 0

(e) Stock Options and/or other financial instruments

0 0 0

(f) Others (Specify) 0 0. 0

Total 100,000 1,200,000 500,000

Other Benefits

Executive Directors

Non-Executive Director (other than independent

directors)

Independent Directors

1) Advances 0.00 0.00 0.00

2) Credit granted 0.00 0.00 0.00

3) Pension Plan/s Contributions

0.00 0.00 0.00

(d) Pension Plans, Obligations incurred

0.00 0.00 0.00

(e) Life Insurance Premium 0.00 0.00 0.00

(f) Hospitalization Plan 0.00 0.00 0.00

(g) Car Plan 0.00 0.00 0.00

(h) Others (Specify) 0.00 0.00 0.00

Total 0.00 0.00 0.00

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:

30

Director’s Name Number of Direct

Option/Rights/ Warrants

Number of Indirect

Option/Rights/ Warrants

Number of Equivalent

Shares

Total % from Capital Stock

N.A. N.A. N.A. N.A. N.A.

(b) Amendments of Incentive Programs

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

N.A. N.A. N.A.

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

Treasurer PHP 6.5 Million

Corporate Secretary

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)

Independent Director

(ID)

Executive 1 1 0

Yes. The Charter is found in

Article 3.B of the Revised Manual on Corporate

Governance.

Ensure flexible and timely high-level decision making process and to advise the board regarding matters raised to it.

Formulate and review vision, mission, strategic objectives; review and approve operating policies; review and recommend Annual Plan and budget.

Conduct reviews of Company’s performance, recommend ways or improvement to realize Annual Plan, and to remedy deficiencies; conduct reviews of the performance of Company’s subsidiaries and investments, recommend actions to remedy

31

deficiencies; evaluate annually performance of Pres./CEO, COO, Treasurer/CFO and Corp. Sec; exercise authority as delegated by the board under the Company’s authority matrix.

Audit 0 2 2



Governance.

Assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to risk management and internal control systems, accounting policies and practices, internal and external audit functions and processes, financial reports and reporting process and compliance with laws and rules.

Review and approve financial policies; Oversee management’s activities in managing risks of the Company; organize internal audit department; review reports submitted by the internal and external auditors; review all financial statements before submission to the board; evaluate and determine non-audit work performed by external auditors and ensure work will not conflict with external auditors’ duties or threaten its independence; coordinate, monitor and facilitate compliance with laws, rules and regulations.

Perform oversight functions over the internal and external auditors of the Company; review and approve the annual internal and external audit plans to ensure their conformity with the objection of the Company; monitor and evaluate the adequacy and effectiveness of the Company’s internal control system; establish and identify the reporting line of the internal auditor to enable him to properly fulfill his duties and responsibilities.

Nomination 0 3 1 Yes. The

Charter is found in

Evaluate qualifications of nominees to the

Formulate and review the effectiveness

Decide whether nominee has

32


Governance.

Board and other appointments that require Board approval such as appointment of President, CEO, COO, Corporate Secretary, Treasurer, CFO etc.

of the Board’s processes and procedures in the election or replacement of directors and board appointees.

all qualifications and none of the disqualifications; Determine such other criteria for qualification and disqualification

Remunera-tion

0 3 1



Governance.

Establish compensation policy for the Board, officers, senior management and employees

Establish a formal and transparent procedure for developing policy on executive remuneration and for fixing remuneration packages of directors, and of the Pres., CEO, COO, CFO, Treas. and Corp Sec. and provide oversight over remuneration of senior management and other key personnel ensuring that compensation is consistent with the Company’s culture, strategy and control environment.; disallow any director to decide own remuneration; establish and regularly review the salary scale and benefits of the employees and key advisors or consultants; regularly review the personnel handbook and amend as necessary; develop a form on Full

Designate remuneration of Directors and of Pres., CEO, COO, CFO, Treas., and Corp. Sec.; Determine if annual salary increases and other bonuses are warranted, and designate the amount of the annual bonus pool, the percentages and distribution thereof; decide upon requests for exemptions from the approved salary scale and benefits; cause the development of an HR 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, and review and approve them.

33

Business Interest Disclosure as part of the pre-employment requirements for all incoming officers.

Others (specify)

N.A. N.A. N.A. N.A. N.A. N.A. N.A.

2) Committee Members

(a) Executive Committee

Office Name Date of

Appointment

No. of Meetings

Held


%

Length of Service in

the Committee

Chairman N.A. N.A. N.A. N.A. N.A. N.A.

Member (ED) Andrew Huang 5/23/2012 2 2 100 .5 year

Member (NED)

Guy William Norman 5/23/2012 2 1 50 .5 year

Member (ID) N.A. N.A. N.A. N.A. N.A. N.A.

Member N.A. N.A. N.A. N.A. N.A. N.A.

(b) Audit Committee

Office Name Date of

Appointment

No. of Meetings

Held


%


the Committee

Chairman (ID) Carmelo L. Santiago 12/9/08 4 4 100 4 years

Member (NED) Michael Hancock 12/9/08 4 4 100 4 years

Member (NED) Conchita L. Manabat 5/24/11 4 4 100 1.5 years

Member (NED) Evita C. Caballa 1/25/11 4 3 75 2 years



Disclose the profile or qualifications of the Audit Committee members.

Carmelo L. Santiago Mr. Santiago is an Independent Director of the Company. He is also an

Independent Director of San Miguel Brewery Inc., San Miguel Brewery Hong

Kong Limited (Hong Kong), San Miguel Pure Foods Company, Inc.; and

Director of Aurora Pacific Economic Zone and Freeport Authority. He was an

Independent Director of San Miguel Corporation from July 2008 until June

2012. Mr. Santiago is the founder and owner of several branches of Melo’s

Restaurant and founder of Wagyu Restaurant.

Michael Hancock Mr. Hancock is a Non-Executive Director of the Company and its subsidiaries, wi-tribe Telecoms, Inc. and Skyphone Logistics, Inc. He is Group General Counsel of Ooredoo Group, and a member of the board of several Oorredoo Group companies. Before joining Ooredoo Group, he was a partner at Salans law firm in Paris and Istanbul. Before that, he had served as General Counsel of global telecommunications company Alcatel CIT. Mr. Hancock holds a Masters in Business Administration from Insead’s France campus in 1978,

34

and a Doctorate in Law from the University of California, San Francisco in 1976. He is also a member of the Orde des Avocats de Paris (the Paris Bar Association.)

Conchita L. Manabat Dr. Manabat is an Independent Director of the Company, and its subsidiaries wi-tribe Telecoms, Inc. and Skyphone Logistics, Inc. She is a member of the Board of Trustees of the Holy Name University, Tagbilaran, Bohol, member of the Commissioners of the PT International Alliance Food Indonesia, President and Trustee of the Development Center for Finance, Trustee and Treasurer of the Children’s Hour Foundation, Trustee of Institute for Women Studies of St. Scholastica’s College, Manila, Member of the Consultative Advisory Group of the International Auditing and Assurance Standards Board of the International Federation of Accountants and of the International Ethics Standards Board for Accountants of the International Federation of Accountants.

Evita C. Caballa Atty. Caballa is a Non-Executive Director of the Company and its subsidiaries wi-tribe Telecoms, Inc. and Skyphone Logistics, Inc. She is a Director and Corporate Secretary of Bank of Commerce. She also holds, among others, the following positions: Corporate Secretary of Philippine Diamond Hotel and Resort, Inc. and Philippine Oriental Realty Development, Inc.; and Director of Cyber Bay Corporation.

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

The Committee shall perform oversight functions over the internal and external auditors of the Corporation, ensuring the independence of one from the other, and their unrestricted access to such records, properties and personnel of the Corporation necessary to enable them to perform their respective audit functions. The Committee shall also evaluate and determine any non-audit work performed by external auditors, including the fees therefor, and ensure that such work will not conflict with external auditors’ duties as such or threaten its independence. The non-audit work, if allowed, shall be disclosed in the Corporation’s annual report.

(c) Nomination Committee

Office Name Date of

Appointment

No. of Meetings

Held


%


the Committee

Chairman (ID) Carmelo L. Santiago 5/24/11 2 2 100 1.5 years


Member (NED) Evita C. Caballa 12/9/08 2 2 100 4 years

Member (NED) Scott Weenink 5/23/12 0 0 N.A. .5 year



(d) Remuneration Committee

Office Name Date of

Appointment

No. of Meetings

Held


%


the Committee

Chairman (ID) Carmelo L. Santiago 12/9/08 2 2 100 4 years


Member (NED) Evita C. Caballa 5/24/11 2 2 100 1.5 year

Member (NED) Scott Weenink 5/23/12 0 0 0 .5 year

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(e) Others (Specify)

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

Office Name Date of

Appointment

No. of Meetings

Held


%


the Committee

Chairman N.A.

Member (ED) N.A.

Member (NED) N.A.

Member (ID) N.A.

Member N.A.

The Board has not constituted any other committee.

3) Changes in Committee Members

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

Name of Committee Name Reason

Executive Guy William Norman replaced Sohail Qadri as member

Mr. Qadri’s term as director expired.

Audit N.A. N.A.

Nomination Scott Weenink replaced Sohail Qadri as member


Remuneration Scott Weenink replaced Sohail Qadri as member


Others (specify) N.A.

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 Approved requests for shareholders’ advances and for Company to guarantee wi-tribe’s obligation to Philexim.

No significant issues were found that needed to be addressed.

Audit Revised the 2012 Internal Audit Plan

Reviewed the results of internal audit’s audit of: Inventory Management, Payables and disbursements, HR, Legal and Commercial, Technology, Finance, Site Acquisitions, Payroll Systems Applications of wi-tribe Telecoms, Inc. and recommended measure for improvement.

Review of cash and inventory handling

Endorsed the appointment of external auditors

Discussed external audit plan

Same as above.

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with the external auditors

Discussed the external audit report with the external auditors

Discussed with management and noted the financial reports

Reviewed the tax compliance report

Made self-assessment of the Committee

Noted and discussed implications of major operational changes as they relate to the financial status of the Company, present and projected

Nomination Approved the process for nomination and election of directors

Pre-screened the candidates and prepared final list of nominees for directors, proposal for board committee composition and nominees for corporate officers.

Same as above.

Remuneration Reviewed the Company’s salary scale

Same as above.

Others (specify) N.A. N.A.

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 Continuous review of the operations and funding requirements of the Company’s subsidiaries; Continuous enhancements of the Company’s policies and processes

Implement improvements but no significant governance issues are to be addressed.

Audit Documentation of and/or enhancements of various finance- related policies of the Company and its subsidiary wi-tribe Telecoms, Inc.

Same as above.

Nomination Continuous enhancements on the evaluation of performance of directors

Same as above.

Remuneration Continuous review of the remuneration policies

Same as above.

Others (specify) N.A. N.A.

F. RISK MANAGEMENT SYSTEM

1) Disclose the following: (a) Overall risk management philosophy of the company;

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The Company shall adhere and commit to the following risk management principles: o Risk management creates and protects value. o Risk management is an integral part of all organizational processes. o Risk management is part of decision making. o Risk management explicitly addresses uncertainty. o Risk management is systematic, structured and timely. o Risk management is based on the best available information. o Risk management is tailored. o Risk management takes human and cultural factors into account. o Risk management is transparent and inclusive. o Risk management is dynamic, iterative and responsive to change. o Risk management facilitates continual improvement of the organization.

(b) A statement that the directors have reviewed the effectiveness of the risk management system and commenting on the adequacy thereof; The directors have reviewed the risk management system and found it to be adequate.

(c) Period covered by the review; Year 2011.

(d) How often the risk management system is reviewed and the directors’ criteria for assessing its effectiveness; The risk management system is reviewed as often as necessary. In assessing the effectiveness and in selecting the most appropriate risk treatment, the Company shall balance the costs and efforts of implementation against the benefits derived, with regard to legal, and other requirements such as regulatory requirements and social responsibility. The Company shall also consider the values and perceptions of stakeholders and the most appropriate ways to communicate with them. Risk treatment options that may impact risk elsewhere in the Company or with stakeholders, should also be considered.

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

2) Risk Policy

(a) Company The Company’s risk management policy is aimed at developing, implementing and continuously improving the Company’s capabilities to manage risks by integrating risk management principles and processes into the organization’s values, culture, governance, strategy and planning, management, policies and processes. 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

Liquidity Risk Constant monitoring and management of its liquidity position, liquidity gaps or surplus on a daily basis; Availability of standby credit facility from several local banks to ensure availability of funds when necessary.

Ensure availability of adequate funding; meet commitments as they arise without unnecessary costs; access funding when needed at least possible cost; maintain adequate time spread of refinancing maturities.

Operational Risk Continuous process of risk identification, assessment and management.

Ensure that risk management activities and risk strategies are continuously improved and aligned with established business objectives.

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Credit Risk Application of transaction limits and close risk monitoring.

Enter into transactions with a wide diversity of creditworthy counterparties to mitigate significant concentration of credit risk.

Interest Rate Risk Close monitoring of movements in interest rates in the market and review of asset and liability structure to ensure that exposures in fluctuations in interest rates are kept within acceptable limits.

Reduce or eliminate interest rate risk

Foreign Currency

Risk

Option to enter into foreign currency hedges using non-derivative instruments to manage its foreign currency risk exposure.

Reduce or eliminate earnings volatility and any adverse impact on equity

(b) Group 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:

The Group’s risk management policy is aimed at developing, implementing and continuously improving the Group’s capabilities to manage risks by integrating risk management principles and processes into the organization’s values, culture, governance, strategy and planning, management, policies and processes.

Risk Exposure Risk Management Policy Objective

Liquidity Risk Constant monitoring and management of its liquidity position, liquidity gaps or surplus on a daily basis; Availability of standby credit facility from several local banks to ensure availability of funds when necessary.

Ensure availability of adequate funding; meet commitments as they arise without unnecessary costs; access funding when needed at least possible cost; maintain adequate time spread of refinancing maturities.

Operational Risk Continuous process of risk identification, assessment and management.

Ensure that risk management activities and risk strategies are continuously improved and aligned with established business objectives.

Credit Risk Application of transaction limits and close risk monitoring.

Enter into transactions with a wide diversity of creditworthy counterparties to mitigate significant concentration of credit risk.

Interest Rate Risk Close monitoring of movements in interest rates in the market and review of asset and liability structure to ensure that exposures in fluctuations in interest rates are kept within acceptable limits.

Reduce or eliminate interest rate risk

Foreign Currency Risk

Option to enter into foreign currency hedges using non-derivative instruments to manage its foreign currency risk exposure.

Reduce or eliminate earnings volatility and any adverse impact on equity

(c) Minority Shareholders

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

Risk to Minority Shareholders

The risks, if any, are not material. In the exercise of their voting power, the controlling shareholders endeavor that the rights of the minority shareholders are adequately protected.

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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:

Risk Exposure Risk Assessment (Monitoring and Measurement Process)

Risk Management and Control (Structures, Procedures, Actions Taken)

Liquidity Risk Daily monitoring Availability of standby credit facility.

Foreign Currency Risk Constant monitoring

Option to enter into foreign currency hedges using non-derivative instruments

Interest Rate Risk Close monitoring of movements in interest rates and review of asset and liability structure

Interest rates of interest-bearing borrowings are fixed and predetermined.

Credit Risk With internal control reviews to monitor the granting of credit and management of credit exposures.

Obtain collateral or arrange master netting agreement.

(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)

Liquidity Risk Daily monitoring Availability of standby credit facility.

Foreign Currency Risk Constant monitoring

Option to enter into foreign currency hedges using non-derivative instruments

Interest Rate Risk Close monitoring of movements in interest rates and review of asset and liability structure

Interest rates of interest-bearing borrowings are fixed and predetermined.

Credit Risk With internal control reviews to monitor the granting of credit and management of credit exposures.

Obtain collateral or arrange master netting agreement.

(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

Audit Committee

Assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to risk management and internal control systems, accounting policies and practices, internal and external audit functions and processes, financial reports and financial reporting process, and compliance with applicable laws, rules and regulations.

Perform oversight functions over the internal and external auditors of the Company; Review and approve the annual internal and external audit plans; Review and approve the financial policies of the Company.

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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 control system of the Company consists of (a) the Board which adopts a system of check and balance within the Board, ensures the establishment of organizational and operation controls within the Company, implements minimum internal control mechanisms for the performance of the Board’s oversight responsibility, (b) the Management, including the Chief Executive Officer, who is ultimately accountable for the Company’s organizational and operational controls, (c) independent internal and external audit to reasonably assure the Board, stockholders and Management that the Company’s key organizational and operational controls are complied with, and that financial reports are reliable and accurate, and (d) Employees, who comply with and suggest improvements to the internal control processes and procedures.

(b) A statement that the directors have reviewed the effectiveness of the internal control system and whether they consider them effective and adequate; The directors have reviewed the effectiveness of the internal control system and found it to be effective and adequate.

(c) Period covered by the review; Year 2012.

(d) How often internal controls are reviewed and the directors’ criteria for assessing the effectiveness of the internal control system; and These are reviewed as often as may be necessary. The directors use the criteria provided by the SEC in the Audit Committee performance evaluation worksheet.

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

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

The Internal Auditor shall submit to the Audit Committee and Management a quarterly or annual report on the internal audit department’s activities, responsibilities and performance

The scope of internal audit includes determining whether the risk management, control and governance processes of the Company and its subsidiaries are

In-house Ophelia Fernandez (Internal Audit Director)

Reports functionally to the Audit Committee and administratively to the COO, under oversight of the Audit Committee.

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relative to the audit plans and strategies as approved by the Audit Committee. The annual report shall include significant risk exposures, control issues and such other matters as may be needed or requested by the board and management. The Internal Auditor shall certify that internal audit activities are conducted in accordance with the International Standards on the Professional Practice of Internal Auditing, and if otherwise, the reasons for non-compliance.

efficient, effective and adequate to ensure: that the Company’s objectives, plans and programs are achieved; that the operations of the Company and its subsidiaries are carried out in accordance with laws and regulations, the Articles of Incorporation, and the resolutions of the board; that the interests and assets of the Company and its subsidiaries are safeguarded; that the systems and functioning as planned and that they are monitored and updated; the economic, efficient and effective acquisition and use of the resources of the Company and its subsidiaries; that there is an appropriate process for objective setting and for identification and management of risk; that communication and information sharing among various governance groups is adequate; that quality and continuous improvement consideration are included in the processes of the Company and its subsidiaries.

(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.

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(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 auditor reports functionally to the Audit Committee and administratively to the COO, under oversight of the Audit Committee. The internal auditor has unfettered access to the board of directors, the audit committee and to all records, properties and personnel.

(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

Anthony B. Yuson (2012) Resignation – transferred to another company

Dulce Amor Manlupig (2012) Resignation – to work abroad

(e) Progress against Plans, Issues, Findings and Examination Trends

State the internal audit’s progress against plans, significant issues, significant findings and examination trends.

Progress Against Plans Completed the 2012 Annual Audit Plan

Issues6 N.A.

Findings7

Contained in the 2012 Quarterly Internal Audit Report to the Audit Committee

Examination Trends Generally adequate and effective internal control

[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 and Procedures Implementation

Human Resource Policy and Guidelines Generally in order.

Procurement Policy and Guidelines Generally in order

Enterprise Risk Management Policy Generally in order

(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):

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.

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Auditors (Internal and External)

Financial Analysts Investment Banks Rating Agencies

Internal Auditor: The Audit Committee establishes and identifies the reporting line of the Internal Auditor to enable him to properly fulfill his duties and responsibilities and ensure his independence. He reports functionally report to the Audit Committee. The Internal Auditor is also required to submit an annual Full Business Interest Disclosure form where he discloses his business interests and shareholdings in the Company.

Not applicable. The Company does not avail of the services of financial analysts.

Not applicable. The Company does not avail of the services of investment banks.

Not applicable. The Company does not avail of the services of rating agencies.

External Auditor: The Company requires that the external auditor shall be rotated or changed every five (5) years or earlier, or the signing partner of the external auditing firm assigned to the Company, shall be changed with the same frequency. Any non-audit work to be performed by external auditors, including the fees therefor should be evaluated and determined by the Audit Committee, which shall ensure that such work will not conflict with external auditors’ duties as such or threaten its independence. The non-audit work, if allowed, shall be disclosed in the Company’s annual report.

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(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.

The Company’s President/CEO and Corporate Secretary/Compliance Officer attest to the Company’s compliance with the SEC Code of Corporate Governance.

H. ROLE OF STAKEHOLDERS

1) Disclose the company’s policy and activities relative to the following:

Policy Activities

Customers' welfare

Serve customers’ needs and provide them with high quality and reliable services; deal with customers in an honest, responsive, respectful and courteous manner.

Established a Customer Experience Management team to develop and maintain activities and programs to cater to customers’ needs.

Supplier/contractor selection practice

To observe and serve the best interests of the Company in the selection of its suppliers or contractors.

The pre-bidding work shall be administered by the Purchasing Department while the actual bid exercise shall be undertaken and/or witnessed by members of the Purchase Committee or their representatives.

Environmentally friendly value-chain

Support the use of eco-friendly materials.

The Company encourages its subscribers to use the Company’s paperless billing system.

Community interaction

Support community development initiatives of the areas where it operates and encourage employees to support Company’s volunteerism programs.

The Company partnered with various barangays and provide them with internet connectivity and/or certain materials or goods that their constituents need.

Anti-corruption programmes and procedures

All employees are responsible for reporting any suspected violations of ethical standards. The Company does not tolerate corruption and the penalty of termination of employment is imposed on the first offense.

The Company employs a stringent vendor selection process which strongly prohibits corruption. Employees are also required to submit full business interest disclosure forms where they are required to disclose their business interests and potential/existing conflicts of interests.

Safeguarding creditors' rights The Company fulfills its obligations to its creditors.

The Company sets meetings with and regularly coordinates with creditors to address their concerns.

2) Does the company have a separate corporate responsibility (CR) report/section or sustainability report/section?

No.

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3) Performance-enhancing mechanisms for employee participation.

(a) What are the company’s policy for its employees’ safety, health, and welfare? Company is committed to ensure employees health, safety and welfare. The Company expects all employees to take appropriate action and promptly report any hazardous situation. The Company shall issue appropriate personal protective equipment and shall have safety work instructions for all hazardous activities. The Company recognizes the need for employees to take time off from work to give them time to rest and/or attend to personal matters, thus, the Company provides vacation leaves with pay. The Company further grants paid sick leaves to employees for medical treatment and recuperation. The Company also believes that company-sponsored social and recreational activities are necessary to give employees a break from work as well as develop camaraderie and team bonding among employees.

(b) Show data relating to health, safety and welfare of its employees. For the year 2012, the Company’s employees were provided with health plans which include free hospitalization benefits and free medical check-ups. The Company likewise helped alleviate the financial difficulties encountered by employees arising from certain emergency situations by granting qualified employees non-interest bearing humanitarian loans. The Company also extended bereavement assistance to employees who experienced the death of an immediate family member to help them in the funeral and burial expenses.

(c) State the company’s training and development programmes for its employees. Show the data.

Training and development programs are offered to employees to provide them with an opportunity to improve their skills so they can perform their jobs more effectively. The employee training and development programmes for 2012 include the following:

Name of Training Date of Training Organizer/Speaker

Leadership Series (for Managers) March 2012 People Sparx

Learning Session Seminar (for HR Department) Asian Institute of Management

Supervisor Training (for Non-Sales Supervisors) May 2012 Mr. Dennis Ycasiano

Supervisor Training (for Sales Supervisors) May 2012 Mr. Dennis Ycasiano

The Winning Attitude Training (for Staff ) July 2012 Mr. Dennis Ycasiano

The Winning Attitude Training (for Supervisors) July 2012 Mr. Dennis Ycasiano

The Winning Attitude Training (for Team Leaders) May 2012 Mr. Dennis Ycasiano

Frontline Leadership Management Training March 2012 Mr. Dennis Ycasiano

Human Resource Council Offsite Session June 2012 Mr. Dennis Ycasiano

Taking Responsibility Training (for Supervisors) August 2012 Mr. Dennis Ycasiano

Taking Responsibility Training (for Staff) August 2012 Mr. Dennis Ycasiano

(d) State the company’s reward/compensation policy that accounts for the performance of the company beyond

short-term financial measures The Company is committed to maintain a competitive total compensation program consistent with business conditions and corporate values. It also gives out several awards (such as spot awards) to employees whose performance exceeded expectations.

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 takes adequate measures to protect the rights of an employee who reports illegal or unethical behavior. He is encouraged to seek additional guidance and information from his supervisor, manager or division head or the Head of Human Resources or any HR representative, who are all required to treat the reported matter with prudence and confidentiality to protect the reporter. The Company prohibits retaliatory action against any

46

employee for raising legitimate concerns or questions regarding ethical matters, or for reporting suspected violations. Violators are subjected to disciplinary action.

I. DISCLOSURE AND TRANSPARENCY 1) Ownership Structure

(a) Holding 5% shareholding or more

Shareholder Number of Shares Percent Beneficial Owner

Vega Telecom Inc.

643,700,669 (Common) 587,951,737 (Preferred)

49.76% of Common Shares 35.08% of Preferred Shares

Vega Telecom Inc. Vega Telecom Inc.

Qtel West Bay Holding S.P.C

426,800,165 (Common) 367,661,680 (Preferred)

32.99% of Common Shares 21.94% of Preferred Shares

Qtel West Bay Holding S.P.C. Qtel West Bay Holding S.P.C.

PCD Nominee Corporation

185,609,208 (Common) 14.35% of Common Shares Various Clients (each client owns less than 5% shareholding)

White Dawn Solution Holdings, Inc.

545,218,918 (Preferred) 32.53% of Preferred Shares

White Dawn Solution Holdings, Inc.

wi-tribe Asia Limited 175,113,191 (Preferred) 10.45% of Preferred Shares wi-tribe Asia Limited

Name of Senior Management

Number of Direct shares Number of

Indirect shares / Through (name of record owner)

% of Capital Stock

Andrew L. Huang 1,000 (Direct) 0 <0.01%

Paul Bernard Causon 0 0 0%

Catherine V. Laurel-Carpio 0 0 0%

TOTAL 1,000 0 <0.01%

2) Does the Annual Report disclose the following:

Key risks Yes

Corporate objectives Yes

Financial performance indicators Yes

Non-financial performance indicators Yes

Dividend policy Yes

Details of whistle-blowing policy No

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 No

Attendance details of each director/commissioner in respect of meetings held No

Details of remuneration of the CEO and each member of the board of directors/commissioners Yes

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Should the Annual Report not disclose any of the above, please indicate the reason for the non-disclosure. The items relating to the number of board of directors meetings held during the year and attendance details of each director in respect of meetings held are not contained in the Annual Report because these can be found in a separate report submitted by the Company, i.e. the Certification of Attendance of the Board of Directors. The Company discloses all information required to be included in the Annual Report; the details of the whistle-blowing policy are not required to be disclosed in the Annual Report.

3) External Auditor’s fee

Name of auditor Audit Fee Non-audit Fee

Manabat Sanagustin and Company

1,350,000.00 0

4) Medium of Communication

List down the mode/s of communication that the company is using for disseminating information.

i. Company website ii. Online disclosure system of the Philippine Stock Exchange

iii. Publication of the notice of annual stockholders’ meeting in a newspaper of general circulation iv. Delivery of hard copies of the Definitive Information Statements to the stockholders

5) Date of release of audited financial report:

April 15, 2013.

6) Company Website 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 Not Applicable

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

Should any of the foregoing information be not disclosed, please indicate the reason thereto. The Company did not provide briefings to analysts and media.

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7) Disclosure of RPT

RPT Relationship Nature Value as of

December 31, 2012

Wi-Tribe Telecoms, Inc. Subsidiary Advances to subsidiary and accrued interest receivable

Php8,862,747,262

Skyphone Logistics, Inc. Subsidiary Advances to subsidiary 1,838,071

Qtel West Bay Shareholder with Significant Influence

Advances from shareholder and accrued interest payable

1,041,517,779

Wi-tribe Asia Limited Shareholder with Significant Influence

Advances from shareholder

234,582,128

White Dawn Shareholder with Significant Influence

Advances from shareholder

390,959,360

Vega Telecom Inc. Shareholder with Significant Influence

Advances from shareholder and accrued interest payable

431,439,463

San Miguel Corporation –parent of Vega Telecom, Inc.

Affiliate Advances from affiliate and accrued interest payable

676,243,280

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?

All RPTs are fully disclosed to and approved by the board, which ensures that RPTs are entered into in the best interest of the Company. RPTs are likewise disclosed in the Company’s audited financial statements, which are approved by the stockholders during the Annual Stockholders’ Meeting.

J. 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

Unless otherwise provided by law, in all regular or special meetings of the stockholders, a majority of the outstanding capital stock must be present or represented in order to constitute a quorum.

(b) System Used to Approve Corporate Acts

Explain the system used to approve corporate acts.

System Used Voting

Description Voting may be done in person or by proxy

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(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

Stockholder’s rights concerning Annual/Special Stockholders’ Meeting are in accordance with those laid down in the Corporation Code.

Results of stockholders’ meeting are immediately reported to the Philippine Stock Exchange (PSE) and made available for viewing by the public through the online disclosure system of the PSE.

Dividends

Declaration Date Record Date Payment Date

N.A. N.A. N.A.

(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

The stockholders are encouraged to personally attend annual and/or special stockholders’ meetings of the Company. If they cannot attend, they are apprised ahead of time of their right to appoint a proxy. They are also given an opportunity to ask questions or to raise their concerns during the open forum. The Board has taken appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the stockholders’ meaningful participation in meetings, whether in person or by proxy. This includes selecting a venue for the meeting that is accessible to many stockholders. Accurate and timely information are made available to the stockholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval. Although all stockholders shall be treated equally or without discrimination, the Board gives minority stockholders the right to propose the holding of meetings and the items for discussion in the agenda that relate directly to the business of the Company, and are in accordance with law, jurisprudence and best practice.

Relevant information are communicated to stockholders through disclosures, announcements and reports filed with the Commission, the PSE and other regulatory bodies, and the Company’s website. Stockholders are provided with at least 2 weeks’ written notice for annual meetings and at least 1 week notice for special meetings. Matters presented for approval by the stockholders in the Annual Stockholders’ Meeting are set out in the Definitive Information Statement, which is sent to all stockholders of record and disclosed to the public at least 15 business days before the date of meeting.

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2. State the company policy of asking shareholders to actively participate in corporate decisions regarding: a. Amendments to the company's constitution b. Authorization of additional shares c. Transfer of all or substantially all assets, which in effect results in the sale of the company

Stockholders have the right to actively participate in the corporate decisions set out in items a, b and c above through shares held as each share entitles the stockholder to one vote that may be exercised in person or by proxy at the stockholders’ meetings. Stockholders have the right to elect, remove and replace directors and to vote on certain corporate acts in accordance with the Corporation Code. Voting procedures on matters presented for approval to the stockholders in the Annual Stockholders’ Meeting are set out in the Definitive Information Statement, which is sent to all stockholders of record at least 15 business days before the date of meeting.

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

a. Date of sending out notices: April 19, 2012 b. Date of the Annual/Special Stockholders’ Meeting: May 23, 2012

4. State, if any, questions and answers during the Annual/Special Stockholders’ Meeting. The questions asked and the answers given during the Company’s Annual Stockholders’ Meeting on May 23, 2012 include the following:

a. What sets wi-tribe apart from its competitors in the internet market? Wi-tribe’s network is pure 4G, which is specifically built for data traffic. Other broadband providers have a mix of 3G/HSPA technologies and they also carry voice and SMS which makes their networks more congested. Wi-tribe delivers quality service with fast and reliable speeds running at a minimum speed of 56 kbps at 99% service reliability.

b. Who is the Company’s foreign partner? The Company’s major foreign partner or investor is its shareholder Qtel.

5. Result of Annual/Special Stockholders’ Meeting’s Resolutions

Resolution Approving Dissenting Abstaining

Approval of the Minutes of the Annual Stockholders’ Meeting held on May 24, 2011

At least 92.49% 0 0

Ratification of the Acts and Proceedings of the Board of Directors and Corporate Officers

At least 92.49% 0 0

Election of the Board of Directors At least 92.49% 0 0

Appointment of External Auditor At least 92.49% 0 0

6. Date of publishing of the result of the votes taken during the most recent AGM for all resolutions: May 23, 2012. Election results and appointment of external auditors were published in PSE’s online disclosure system.

(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:

Modifications Reason for Modification

There were no modifications. N.A.

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(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

Directors: 1. Ramon S. Ang 2. Carmelo L. Santiago 3. Conchita L. Manabat 4. Evita C. Caballa 5. Michael Hancock 6. Scott Weenink 7. Guy William Norman Officers: 1. Paul Bernard Causon 2. Catherine Laurel-

Carpio

May 23, 2012

Voice vote >0.0001% 92.49%

92.49% of outstand-ing capital stock

Special No Special Meeting was held in 2012

(ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes at the ASM/SSMs? No.

(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.

Each common and preferred share is entitled to one vote.

(g) Proxy Voting Policies

State the policies followed by the company regarding proxy voting in the Annual/Special Stockholders’ Meeting.

Company’s Policies

Execution and acceptance of proxies

The Board shall take the appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the stockholders’ meaningful participation in meetings, and therefore accepts proxies.

Notary Not required to be notarized

Submission of Proxy Submit to Office of the Corporate Secretary on or before the date set before the meeting

Several Proxies Allowed

Validity of Proxy Unless otherwise provided, valid only for meeting for which it is intended; not valid for longer than 5 years at one time.

Proxies executed abroad Allowed

Invalidated Proxy A stockholder may revoke or cancel his proxy anytime.

Validation of Proxy Validation of proxy to be done on the date set before the meeting in the office of the Company’s stock transfer agent

Violation of Proxy Not allowed.

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(h) Sending of Notices

State the company’s policies and procedure on the sending of notices of Annual/Special Stockholders’ Meeting.

Policies Procedure

Notices shall be sent in accordance with law and the By-laws of the Company.

Immediately after the board meeting where the date and agenda of the stockholders’ meeting are approved, the Corporate Secretary discloses said information to the public through the PSE ODISY. The Corporate Secretary also causes the notice and agenda of the meeting to be published in a newspaper of general circulation at least 15 days before the meeting. The Corporate Secretary likewise engages the services of a courier company to deliver the hard copies of the notice and agenda to the stockholders in accordance with law.

(i) Definitive Information Statements and Management Report

Number of Stockholders entitled to receive Definitive Information Statements and Management Report and Other Materials

1,989

Date of Actual Distribution of Definitive Information Statement and Management Report and Other Materials held by market participants/certain beneficial owners

April 30, 2012

Date of Actual Distribution of Definitive Information Statement and Management Report and Other Materials held by stockholders

April 30, 2012

State whether CD format or hard copies were distributed

Hard copies were distributed

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.

No

The auditors to be appointed or re-appointed. No

An explanation of the dividend policy, if any dividend is to be declared. No

The amount payable for final dividends. Not applicable.

Documents required for proxy vote. Yes

Should any of the foregoing information be not disclosed, please indicate the reason thereto.

The information mentioned above are included in the Definitive Information Statement of the Company, which are sent to the stockholders together with the notice of the meeting.

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The amount payable for final dividends is not included in the Notice or Definitive Information Statement because no dividends were declared.

2) Treatment of Minority Stockholders

(a) State the company’s policies with respect to the treatment of minority stockholders.

Policies Implementation

The Company respects the following rights of stockholders:

i. Voting Right; ii. Power to Inspect Corporate Books and

Records; iii. Right to Information; iv. Right to Dividends; v. Appraisal Right.

The Board shall be transparent and fair in the conduct of the annual and special stockholders’ meetings of the Corporation. It is the duty of the Board to promote the rights of the stockholders, remove impediments to the exercise of those rights and provide an adequate avenue for them to seek timely redress for breach of their rights. The Board shall take the appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the stockholders’ meaningful participation in meetings, whether in person or by proxy. Accurate and timely information shall be made available to the stockholders to enable them to make a sound judgment on all matters brought to their attention for consideration or approval. Although all stockholders shall be treated equally or without discrimination, the Board shall give minority stockholders the right to propose the holding of meetings and the items for discussion in the agenda that relate directly to the business of the Corporation, and are in accordance with law, jurisprudence and best practice.

Relevant information are communicated to stockholders through disclosures, announcements and reports filed with the Commission, the PSE and other regulatory bodies, and the Company’s website. Stockholders are allowed to inspect the corporate books and records in accordance with the Corporation Code. The stockholders are provided, upon request, with periodic reports which disclose personal and professional information about the directors and officers and certain other matters such as their holdings of the Company’s shares, dealings with the Company, relationships among directors and key officers and the aggregate compensation of directors and officers. Stockholders are provided with at least 2 weeks’ written notice for annual meetings and at least 1 week notice for special meetings. Each share entitles the stockholder to one vote that may be exercised in person or by proxy at the stockholders’ meetings. Stockholders have the right to elect, remove and replace directors and to vote on certain corporate acts in accordance with the Corporation Code. Voting procedures on matters presented for approval to the stockholders in the Annual Stockholders’ Meeting are set out in the Definitive Information Statement, which is sent to all stockholders of record at least 15 business days before the date of meeting.

(b) Do minority stockholders have a right to nominate candidates for board of directors? Yes.

K. 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.

The Company’s principal communications policy is to keep the stockholders informed of important developments in the Corporation. Such policies are reviewed as often as may be necessary.

54

Major company announcements are reviewed by the Corporate Secretary and approved by the CEO or Treasurer/CFO who exercise oversight responsibility over the investor relations program.

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.

Details

(1) Objectives To keep the stockholders informed of important developments in the Corporation.

(2) Principles All material information about the Corporation which could adversely affect its viability or the interests of the stockholders shall be timely disclosed to the stockholders. Such information shall include among others, earnings results, acquisition or disposition of assets, off balance sheet transactions, related party transactions.

(3) Modes of Communications Through the Company’s website, and through disclosures in the PSE online disclosure system.

(4) Investors Relations Officer Treasurer/CFO - fax 813-1699

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? The Company complies with the provisions under the Corporation Code, that is, these actions require approval by majority vote of the board of directors and ratification by stockholders representing at least 2/3 of the outstanding capital stock. Name of the independent party the board of directors of the company appointed to evaluate the fairness of the transaction price. Not applicable. The Company did not enter into any such transaction.

L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Discuss any initiative undertaken or proposed to be undertaken by the company.

Initiative Beneficiary

Partnering with certain local government units and providing them with internet connectivity and/or certain materials and goods that their constituents need.

Various barangays in Metro Manila

M. 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

During the pre-screening process for the nomination of the directors, the members of the Nomination Committee discuss the Board’s composition and the attributes needed to enhance the performance of the Board.

Board attendance; Qualifications and experience

of directors.

55

Board Committees

Audit Committee conducts an annual performance evaluation in compliance with the SEC Memo Circular No. 4, series of 2012.

Guidelines for the Assessment of the Performance of Audit Committee of Companies Listed on the Exchange.

Individual Directors

During the pre-screening process for the nomination of the directors, the members of the Nomination Committee discuss the Board’s composition and the attributes of directors needed to enhance the performance of the Board.

Board attendance; Qualifications and experience

of directors.

CEO/President

The Board approves an annual corporate scorecard by which the performance of the President and CEO is evaluated.

The criteria include customer satisfaction, employee engagement, sales, revenues and cost optimization.

N. 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

Violations Sanctions

Refusal to comply with the disclosure requirements of the Securities Regulation Code and its Implementing Rules and Regulations.

Temporary disqualification as a director, which shall be in effect for as long as the refusal persists.

Absence in more than fifty percent (50%) of all Board meetings, both regular and special, during his incumbency, or any twelve (12) month period during said incumbency, unless the absence is due to justifiable causes such as illness, death in the immediate family or serious accident.

Temporary disqualification as a director, which shall apply for purposes of the succeeding election.

Commission of an act which constitutes as a ground for disqualification from election as director

Removal as a director, in accordance with law

Material breach of fiduciary duties to the Company Removal as a director or corporate officer, in accordance with law

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