· 1963 and his Master´s Degree in Business Administration from the University of San ... Soriano...

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TABLE OF CONTENTS

A. BOARD MATTERS …………………………………………………………………………………………………………………………. 41) BOARD OF DIRECTORS …………………………………………………………………………………………………………. 4

(a) Composition of the Board ……………………………………………………………………………………………… 4(b) Corporate Governance Policy ………………………………………………………………………………………… 7(c) Vision and Mission ………………………………………………………………………………………………………… 7(d) Directorship in Other Companies …………………………………………………………………………………… 8(e) Shareholding in the Company ……………………………………….………………………………………………. 11

2) CHAIRMAN AND CEO ……………………………………………………………………………………………………………. 113) SUCCESSION PLANNING ……………………………………………………………………………………………………….. 134) OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS ………………………………….. 145) CHANGES IN THE BOARD OF DIRECTORS ………………………………………………………………………………. 166) ORIENTATION AND EDUCATION PROGRAM …………………………………………………………………………. 34

B. CODE OF BUSINESS CONDUCT & ETHICS ……………………………………………………………………………………… 381) POLICIES ………………………………………………………………………………………………………………………………. 382) DISSEMINATION OF CODE ……………………………………………………………………………………………………. 443) COMPLIANCE WITH CODE ……………………………………………………………………………………………………. 444) RELATED PARTY TRANSACTIONS …………………………………………………………………………………………… 45

(a) Policies and Procedures ………………………………………………………………………………………………… 45(b) Conflict of Interest ………………………………………………………………………………………………………… 45

5) FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS ………………………………………………………. 466) ALTERNATIVE DISPUTE RESOLUTION ……………………………………………………………………………………. 47

C. BOARD MEETINGS & ATTENDANCE ……………………………………………………………………………………………… 481) SCHEDULE OF MEETINGS ……………………………………………………………………………………………………… 482) DETAILS OF ATTENDANCE OF DIRECTORS …………………………………………………………………………….. 483) SEPARATE MEETING OF NON-EXECUTIVE DIRECTORS …………………………………………………………… 494) QUORUM REQUIREMENT …………………………………………………………………………………………………….. 495) ACCESS TO INFORMATION ……………………………………………………………………………………………………. 496) EXTERNAL ADVICE ………………………………………………………………………………………………………………… 517) CHANGES IN EXISTING POLICIES …………………………………………………………………………………………… 51

D. REMUNERATION MATTERS ………………………………………………………………………………………………………….. 521) REMUNERATION PROCESS ……………………………………………………………………………………………………. 522) REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS …………………………………………………. 523) AGGREGATE REMUNERATION ……………………………………………………………………………………………… 534) STOCK RIGHTS, OPTIONS AND WARRANTS …………………………………………………………………………… 535) REMUNERATION OF MANAGEMENT ……………………………………………………………………………………. 54

E. BOARD COMMITTEES …………………………………………………………………………………………………………………… 551) NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES ……………………………………………….. 552) COMMITTEE MEMBERS ………………………………………………………………………………………………………… 563) CHANGES IN COMMITTEE MEMBERS …………………………………………………………………………………… 594) WORK DONE AND ISSUES ADDRESSED …………………………………………………………………………………. 595) COMMITTEE PROGRAM ……………………………………………………………………………………………………….. 60

F. RISK MANAGEMENT SYSTEM ………………………………………………………………………………………………………. 611) STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM ……………………………………….. 622) RISK POLICY ………………………………………………………………………………………………………………………….. 633) CONTROL SYSTEM ………………………………………………………………………………………………………………… 66

G. INTERNAL AUDIT AND CONTROL …………………………………………………………………………………………………. 661) STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM ……………………………………….. 662) INTERNAL AUDIT ………………………………………………………………………………………………………………….. 67

(a) Role, Scope and Internal Audit Function ………………………………………………………………………… 67(b) Appointment/Removal of Internal Auditor ……………………………………………………………………. 68

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(c) Reporting Relationship with the Audit Committee ………………………………………………………… 68(d) Resignation, Re-assignment and Reasons ……………………………………………………………………… 68(e) Progress against Plans, Issues, Findings and Examination Trends ………………………………….. 68(f) Audit Control Policies and Procedures …………………………………………………………………………… 69(g) Mechanisms and Safeguards …………………………………………………………………………………………. 69

H. ROLE OF STAKEHOLDERS ……………………………………………………………………………………………………………… 70

I. DISCLOSURE AND TRANSPARENCY ……………………………………………………………………………………………… 83

J. RIGHTS OF STOCKHOLDERS …………………………………………………………………………………………………………. 901) RIGHT TO PARTICIPATE EFFECTIVELY IN STOCKHOLDERS’ MEETINGS ……………………..……………. 902) TREATMENT OF MINORITY STOCKHOLDERS …………………………………………………………………………. 90

K. INVESTORS RELATIONS PROGRAM ……………………………………………………………………………………………… 96

L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES ………………………………………………………………………. 98

M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL ………………………………………………………………. 105

N. INTERNAL BREACHES AND SANCTIONS ……………………………………………………………………………………….. 106

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A. BOARD MATTERS

1) Board of Directors

Number of Directors per Articles of Incorporation 7

Actual number of Directors for the year 7

(a) Composition of the Board

Complete the table with information on the Board of Directors:

Director’sName

Type[Executive(ED), Non-Executive(NED) or

IndependentDirector

(ID)]

Ifnominee,identify

theprincipal

Nominator inthe last

election (if ID,state the

relationshipwith the

nominator)

Date firstelected

Date lastelected (if ID,

state thenumber of

years served asID)1

Electedwhen(Annual/SpecialMeeting)

No. ofyears

servedas

director

ENRIQUE K.RAZON, JR. ED N/A Stockholder December,

198720 April

2017 ASM 30

JON RAMONABOITIZ NED N/A Stockholder April, 2008 20 April

2017 ASM 9

OCTAVIOVICTOR R.ESPIRITU

ID N/A Stockholder;No relation April, 2002 20 April

2017 ASM 15

JOSEPH R.HIGDON ID N/A Stockholder;

No relation April, 2007 20 April2017 ASM 10

JOSE C.IBAZETA NED N/A Stockholder December,

198720 April

2017 ASM 30

STEPHEN A.PARADIES NED N/A Stockholder December,

198720 April

2017 ASM 30

ANDRESSORIANO III NED N/A Stockholder July,

199220 April

2017 ASM 25

Enrique K. Razon, Jr., age 57, Filipino

Mr. Razon has been a Director of International Container Terminal Services, Inc. (ICTSI)* since December 1987and has been its Chairman since 1995.

Concurrently, Mr. Razon is the Chairman and the President of ICTSI*, ICTSI Warehousing, Inc., ICTSIFoundation, Inc., Razon Industries, Inc., Bloomberry Resorts Corporation*, Prime Metroline Holdings, Inc.,Quasar Holdings, Inc., Falcon Investco Holdings, Inc., Achillion Holdings, Inc., Collingwood InvestmentCompany Ltd., Bravo International Port Holdings, Inc., and Provident Management Group, Inc.; the ChiefExecutive Officer (CEO) and the Chairman of Bloomberry Resorts and Hotels, Inc.; the Chairman of SuresteRealty Corp., Monte Oro Resources and Energy, Inc., Pilipinas Golf Tournament Inc., and Bloomberry CulturalFoundation, Inc.; and a Director of Sureste Properties, Inc., ICTSI (Hongkong) Ltd., Australian ContainerTerminals, Ltd., Pentland International Holdings Ltd., CLSA Exchange Capital, and Xcell Property Ventures, Inc.

Mr. Razon is a member of the US-Philippines Society and the ASEAN Business Club, Philippines, Inc.

Mr. Razon received his Bachelor of Science degree, major in Business Administration, from the De La SalleUniversity in 1980.

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

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*Publicly-listed Corporation

Jon Ramon Aboitiz, age 67, Filipino

Mr. Aboitiz has been a Director of ICTSI* since April 2008 and was appointed as a member of the ICTSI AuditCommittee in April 2010.

Mr. Aboitiz is also the Chairman of Aboitiz & Co., Inc., and Aboitiz Equity Ventures, Inc.*, an investment andmanagement enterprise, engaged in numerous and diverse business concerns ranging from power generationand distribution, banking and financial services, real estate development, construction, food, ship buildingand cement. He became the President of Aboitiz & Company in 1991 until 2008. He was the President andChief Executive Officer (CEO) of Aboitiz Equity Ventures, Inc.* from 1993 – 2008.

Presently, he holds various positions in the Aboitiz Group such as the Vice Chairman of Aboitiz Power Corp.*;the Vice Chairman of Union Bank of the Philippines*; the Chairman of the bank’s committees, namely theExecutive Committee, and the Risk Management Committee; and the Vice Chairman of the Compensationand Remuneration Committee. He is a Director and Chairman of the Audit Committee of Bloomberry ResortsCorporation*; the Vice President and a Trustee of the Ramon Aboitiz Foundation; a Trustee and a member ofthe Executive Committee of the Philippine Business for Social Progress; and a member of the Board of Advisorsof the Coca-Cola Export Corporation (Philippines).

Mr. Aboitiz began his career with the Aboitiz Group in 1970, right after graduating from the Sta. ClaraUniversity, California, with a degree of BS Commerce, major in Management.


Octavio Victor R. Espiritu, age 73, Filipino

Mr. Espiritu has been an independent Director of ICTSI* since April 2002 and has served as the Chairman ofthe Audit Committee; a member of the Nomination Committee since February 2011; and the Chairman of theRisk Management Committee since April 2015. He is also the Chairman of GANESP Ventures, Inc. and aDirector of Bank of the Philippine Islands*, Philippine Dealing System Holdings Corp. and Subsidiaries, and PhilStratbase Consultancy Inc.

Mr. Espiritu was a three (3)-term former President of the Bankers Association of the Philippines; a formerPresident and Chief Executive Officer (CEO) of Far East Bank and Trust Company; and the Chairman of theBoard of Trustees of the Ateneo de Manila University for fourteen (14) years.

Mr. Espiritu received his primary, secondary, and college education from the Ateneo de Manila University,where he obtained his AB Economics degree in 1963. In 1966, he received his Master’s Degree in Economicsfrom Georgetown University in Washington DC, USA.


Joseph R. Higdon, age 75, American

Mr. Higdon has been an independent Director of ICTSI* since April 2007. He is also an independent Directorof SM Investments Corporation*, Security Bank Corporation* and The Island Institute, a non-profitorganization seeking to preserve island communities along the coast of Maine and Trekkers, a communitybased mentoring organization.

Mr. Higdon was the Senior Vice President of Capital Research and Management, a Los Angeles (USA)-basedinternational investment management firm, until June 2006. He joined Capital Research and Management in1974 and has covered Philippine stocks from 1989 to 2006. He was the Vice President of the New World Fund,which focused on companies doing business in emerging countries and was a Director of Capital StrategyResearch.

Mr. Higdon received his Bachelor of Science degree, major in Political Science, from the University of

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Tennessee in 1968.


Jose C. Ibazeta, age 74, Filipino

Mr. Ibazeta has been a Director of ICTSI* since December 1987. In 2009, he was named as a Trustee and theVice President of ICTSI Foundation, Inc. He was a member of the Audit Committee of ICTSI* until April 2010and a member of the Nomination Committee since February 2011. He also served as ICTSI’s Treasurer untilFebruary 2007, when he was appointed as the President of the Power Sector Assets and LiabilitiesManagement Corporation (PSALM) by the President of the Republic of the Philippines. He served as PSALMPresident and Chief Executive Officer (CEO) from March 1, 2007 to March 30, 2010. In April 2010, he declinedhis nomination to be a Director of ICTSI by reason of his appointment as the Acting Secretary of theDepartment of Energy, a position he held from April 1, 2010 until June 30, 2010. He was re-elected as aDirector of ICTSI* in August 2010.

Mr. Ibazeta is a Consultant to the Chairman of the Board of A. Soriano Corp.; a Director of A. Soriano Corp.*,Anscor Consolidated Corp., Anscor Property Holdings, Inc., Minuet Realty Corp., Anscor Land, Inc., PhelpsDodge Philippine Energy Products Corp., Newco, Inc., Seven Seas Resorts and Leisure, Inc., A. Soriano AirCorp., Vicinetum Holdings, Inc., Vesper Industrial and Development Corp., and AG&P International Holdings,Ltd.; the Chairman and President of Island Aviation, Inc.; and a Director and the President of both Seven SeasResorts and Leisure, Inc. and Pamalican Resort, Inc. Mr. Ibazeta is also the founding Chairman and a Directorof Philippine Stratbase Consultancy, Inc.

Mr. Ibazeta is a member of the Finance Committee of the Ateneo de Manila University and the Board ofTrustees of Radio Veritas and St. James the Great Parish Foundation.

Mr. Ibazeta received his Bachelor of Science in Economics degree from the Ateneo de Manila University in1963 and his Master´s Degree in Business Administration from the University of San Francisco in 1968. Hecompleted all requirements for an MBA in Banking and Finance from New York University in 1975.


Stephen A. Paradies, age 63, Filipino

Mr. Paradies has been a Director of ICTSI* since December 1987. He has been the Chairman of the NominationCommittee of ICTSI since February 2011; and a Director of ICTSI Warehousing, Inc. Moreover, Mr. Paradies isthe Senior Vice President-Finance/Treasurer of Aboitiz & Company, Inc.; a Trustee of Bloomberry Foundation,Inc.; a Director, President and Chief Executive Officer of AEV Properties, Inc.; and a Director of UnionProperties, Inc., Union Bank of the Philippines *, and NapaGapa Beverages, Inc.

Mr. Paradies received his Bachelor of Science degree, major in Business Management, from the Santa ClaraUniversity, California, USA.


Andres Soriano III, age 65, American

Mr. Soriano has been a Director of ICTSI since July 1992 and is currently the Chairman of ICTSI’s CompensationCommittee. He is the Chairman and Chief Executive Officer (CEO) of A. Soriano Corporation*; the Chairmanand President of Anscor Consolidated Corp.; the Chairman of the Andres Soriano Foundation, Inc., PhelpsDodge International Philippines, Inc., Phelps Dodge Philippines Energy Products Corp., and Seven Seas Resortsand Leisure, Inc.; and a Director of Cirrus Medical Staffing, Inc., Anscor Property Holdings, Inc., A. Soriano AirCorporation, and the Manila Peninsula Hotel, Inc.

Mr. Soriano was formerly the President and Chief Operating Officer (COO) of San Miguel Corporation* andlater, its Chairman and CEO. He was also the Chairman of Coca Cola (Philippines), Coca Cola Amatil (Australia)and Nestle (Philippines) and was a Director of SPI Technologies, Inc., eTelecare Global Solutions, Inc., G.E.Asian Advisory and Wharton East Asia Executive Board.

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Mr. Soriano received a Bachelor of Science degree in Economics, major in Finance and International Business,from Wharton School of Finance and Commerce, University of Pennsylvania in 1972.


(b) Provide a brief summary of the corporate governance policy that the board of directors has adopted. Pleaseemphasis the policy/ies relative to the treatment of all shareholders, respect for the rights of minorityshareholders and of other stakeholders, disclosure duties, and board responsibilities.

The Board of Directors (the Board) adopted a Revised Manual on Corporate Governance (RMCG) whichembodies their corporate governance policy. It serves as a guide for INTERNATIONAL CONTAINER TERMINALSERVICES, INC. (interchangeably hereinafter referred to as ICTSI, the Corporation or the Company), its Board,officers and employees to strive to enhance the value of the Corporation and optimize over time the returnsto its shareholders by:

a. Sound, prudent, and effective management;b. Efficient and effective management information system;c. Effective risk management;d. Reliable financial and operational information;e. Cost effective and profitable business operations; andf. Compliance with laws, rules, regulations and contracts.

The Board shall be primarily responsible for the governance of the Corporation. Corollary to setting thepolicies for the accomplishment of the corporate objectives, it shall provide an independent check on theCorporation’s Management.

The Board respects minority rights. Due to cumulative voting, they have the ability to elect the members ofthe Board.

The Board is primarily accountable to the shareholders, and Management is primarily accountable to theBoard. The Board provides the shareholders with a fair, balanced and comprehensive assessment of theCorporation’s performance position on a quarterly basis including interim and other reports to regulators asrequired by law.

ICTSI complies with all disclosure requirements under law. ICTSI believes that the essence of corporategovernance is transparency. The more transparent the internal workings of the corporation are, the moredifficult it will be for Management and dominant stockholders to mismanage the Corporation ormisappropriate its assets.

(c) How often does the Board review and approve the vision and mission?

This is a regular task of the Board, as stated in the ICTSI Manual on Corporate Governance. The Board conductsits review at least every five (5) years. In the past years, the Board has conducted the review annually, TheBoard reviewed the vision, mission and corporate objectives last February 10, 2017.

VISION, MISSION AND CORPORATE OBJECTIVES

Vision

Leadership in global port management is, for ICTSI, a means to a larger end: the vision of building long-termshareholder value.

As ICTSI continues to pursue optimization of efficiency, leading to an increasingly seamless integration oftransport and distribution systems, ICTSI’s direct clients – and, those they also represent and serve – gain acompetitive advantage in the world of commerce. The host governments of the countries where ICTSIoperates these ports gain in economic terms as well. Ultimately and for the long term, such gains redound toICTSI’s shareholders.

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Mission

ICTSI commits to provide excellent growth opportunities for its employees; build successful, mutuallyrewarding businesses with ICTSI’s corporate partners; deliver equitable shareholder returns and to providesuperior services to its customers marked by efficiency, reliability, professionalism and profitability.

Corporate Objectives

ICTSI is focused on its core competency: port management, operations and development.

ICTSI is open to expanding opportunities and to do this in strategically located ports, in both developed anddeveloping economies, diversifying geographically across the world’s continents. Specifically, ICTSI seeks todevelop, acquire, own and operate common user container terminals in markets with superior growth andprofit potential.

The Board reviews, monitors and oversees ICTSI’s vision, mission, objectives and implementation of corporatestrategy.

(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 ofdirector in other companies within its Group:

Director’s Name Corporate Name of theGroup Company

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

director is also the Chairman.

ENRIQUE K. RAZON, JR.

ICTSI Warehousing Inc. Chairman

ICTSI Foundation, Inc. Chairman

ICTSI (Hongkong) Ltd. Non-Executive

Australian InternationalContainer Terminals Limited Non-Executive

Pentland InternationalHoldings Ltd. Non-Executive

STEPHEN A. PARADIES ICTSI Warehousing, Inc. Non-Executive

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 theGroup Company

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

director is also the Chairman.

Sociedad Portuario IndustrialAguadulce S.A. Non-Executive

JOSE C. IBAZETA ICTSI Foundation Inc. Executive

(ii) Directorship in Other Listed Companies

Identify, as and if applicable, the members of the company’s Board of Directors who are also directors ofpublicly-listed companies outside of its Group:

Director’s Name Name of Listed Company

Type of Directorship (Executive,Non-Executive,

Independent). Indicate ifdirector is also the Chairman.

ENRIQUE K. RAZON, JR. Bloomberry Resorts Corporation Chairman

JON RAMON ABOITIZ

Aboitiz Equity Ventures, Inc. Chairman

Aboitiz Power Corp. Vice Chairman

Unionbank of the Philippines Vice Chairman

Bloomberry Resorts Corporation Non-Executive

JOSE C. IBAZETA A. Soriano Corporation Non-Executive

STEPHEN A. PARADIES Unionbank of the Philippines Non-Executive

ANDRES SORIANO III A. Soriano Corporation Chairman

OCTAVIO VICTOR R.ESPIRITU Bank of the Philippine Islands Independent

JOSEPH R. HIGDONSM Investments Corporation Independent

Security Bank Corporation Independent

(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, whichlinks them to significant shareholders in the company and/or in its group:

Director’s Name Name of theSignificant Shareholder Description of the relationship

ENRIQUE K. RAZON, JR. Stephen Paradies Brother in law

STEPHEN PARADIES Enrique K. Razon, Jr. Brother in law

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(iv) Has the company set a limit on the number of board seats in other companies (publicly listed, ordinaryand companies with secondary license) that an individual director or CEO may hold simultaneously? Inparticular, is the limit of five board seats in other publicly listed companies imposed and observed? If yes,briefly describe other guidelines:

GuidelinesMaximum Number ofDirectorships in other

companies

Executive Director

As stated in the RMCG and all applicablelaws and regulations.

RMCG provides that the number ofdirectorships that its members can holdin stock and non-stock corporations. Theoptimum number should take intoconsideration the capacity of a Directorto diligently and efficiently perform hisduties and responsibilities. Practices byother world class corporations may beconsidered. Directors who pass thevetting by the Nomination Committeeshall be considered to have compliedwith this requirement.

As stated in the RMCG and allapplicable laws andregulations, includingSecurities and ExchangeCommission (SEC)Memorandum Circular 9 –2011.

One (1) directorship

Non-Executive Director

RMCG, SEC Memo Circular 9 and allapplicable laws and regulations.

RMCG provides that the Board considersthe number of directorships that itsmembers can hold in stock and non-stock corporations. The optimumnumber should take into considerationthe capacity of a director to diligentlyand efficiently perform his duties andresponsibilities. Practices by other worldclass corporations may be considered.Directors who pass the vetting by theNomination Committee shall beconsidered to have complied with thisrequirement.

As stated in the RMCG and allapplicable laws andregulations, including SECMemorandum Circular 9 –2011.

Four (4) directorships

CEO

RMCG and all applicable laws andregulations.

The RMCG provides: “The ChiefExecutive Officer (CEO) and otherexecutive directors may be covered by alower indicative limit for membership inother boards. A similar limit may applyto independent or non-executivedirectors who, at the same time, serve asfull-time executives in othercorporations. In any case, the capacity ofthe directors to diligently and efficientlyperform their duties and responsibilitiesto the boards they serve shall not becompromised. Directorship in

As stated in the RMCG and allapplicable laws andregulations.

One (1) directorship

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GuidelinesMaximum Number ofDirectorships in other

companiessubsidiaries and affiliates of theCorporation shall not be considered as alimitation. Officers who have passed thevetting of the Nomination Committeeshall be considered to have compliedwith this requirement.”

(e) Shareholding in the Company

Complete the following table on the members of the company’s Board of Directors who directly and indirectlyown shares in the company:

As of March 31, 2017

Name of Director Number ofDirect shares

Number ofIndirect shares /

Through (name ofrecord owner)

Percent1

Enrique K. Razon, Jr. 69,047,012 1,609,058,045 61.52%2

Andres Soriano III 150,050 9,000,431 0.34%

Stephen A. Paradies 4,087,573 - 0.15%

Jose C. Ibazeta 3,008,560 - 0.11%

Octavio Victor R. Espiritu 300,000 - 0.01%Joseph R. Higdon 156,000 - 0.01%

Jon Ramon M. Aboitiz 135,000 - 0.00%Total 76,884,195 1,618,058,476

1 Percentage ownerships were computed using total number of issued and outstanding common shares, preferred B votingshares and preferred A non-voting shares of 2,727,763,543 (which excludes treasury shares) as of March 31, 2017.2 The percentage of ownership of Enrique K. Razon, Jr. and the Razon Group is at 61.61% if based on the total number of issuedand outstanding common shares and preferred B voting shares of 2,723,963,543 (which excludes treasury shares and preferredA non-voting shares) as of March 31, 2017.

2) Chairman and CEO

(a) Do different persons assume the role of Chairman of the Board of Directors and CEO? If no, describe thechecks and balances laid down to ensure that the Board gets the benefit of independent views.

Yes (v) No √

There is a clear delineation of functions between the Chairman (as presiding officer of Board meetings) andthe Chief Executive Officer (CEO) upon their election. The duties and responsibilities of the Chairman areprovided in the By-laws, which include the following:

(i) Ensure that the meetings of the Board are held in accordance with the By-laws or as theChairman may deem necessary;

(ii) Supervise the preparation of the agenda of the meeting in coordination with the CorporateSecretary, taking into consideration the suggestions of the CEO, Management and Directors;and

(iii) Maintain qualitative and timely lines of communication and information between the Boardand Management.

In the Company’s By – laws (Section 4, Article IV), it is stated that "[t]he President shall, jointly with theChairman of the Board, have general supervision, administration and management of the business of the

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Corporation. He shall, with the approval of the Chairman of the Board, appoint, suspend and dischargesubordinate officers and all employees and agents of the Corporation, prescribe their duties and determinetheir compensation, subject to the standards and guidelines prescribed by, and/or with the approval of theBoard or the Executive Committee. The President and the Chairman of the Board shall jointly establish generaladministrative and operating policies and guidelines. The President shall exercise other powers and performsuch other duties as the Board may from time to time fix or delegate, and perform all other duties incident tothis office. In the absence or incapacity of the President, any officer upon designation of the Board mayexecute contracts in the name of the Corporation. The Chairman of the Board shall exercise the powers andfunctions of the President in the absence or incapacity of the President, unless such absence or incapacity ispermanent in which case the Board shall elect new President to serve the unexpired term.”

Identify the Chairman and CEO:

Chairman of the Board Enrique K. Razon, Jr.CEO/President Enrique K. Razon, Jr.

(b) Roles, Accountabilities and Deliverables

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

Chairman Chief Executive Officer/ President

Role

The Roles of Chairman (as presidingofficer of Board meetings) and CEO shall,as much as practicable, be separate tofoster an appropriate balance of power,increased accountability and bettercapacity for independent decision-makingby the Board. A clear delineation offunctions shall be made between theChairman (as presiding officer of Boardmeetings) and CEO upon their election.

In the Company’s By – laws (Section 2,Article 4), it is stated that ”[t]he Chairmanof the Board shall preside at all meetingsof the Stockholders and of the Board ofDirectors. The Chairman of the Board,jointly with the President, shall havegeneral supervision, administration andmanagement of the business of theCorporation. The Chairman of the Boardmay enter into contracts with theapproval of the President binding theCorporation in accordance with thestandards and guidelines prescribed bythe Board of Directors. The Chairman ofthe Board may execute contractsapproved by the Board of Directors or theExecutive Committee. The Chairman ofthe Board and the President shall jointlyestablish general administrative andoperating policies and guidelines. He shallperform other duties and functions as theBoard, from time to time assign.”

The Roles of Chairman (as presidingofficer of Board meetings) and CEO shall,as much as practicable, be separate tofoster an appropriate balance of power,increased accountability and bettercapacity for independent decision-making by the Board. A clear delineationof functions shall be made between theChairman (as presiding officer of Boardmeetings) and CEO upon their election.

In the Company’s By – laws (Section 4,Article IV), it is stated that “[t]hePresident shall, jointly with the Chairmanof the Board, have general supervision,administration and management of thebusiness of the Corporation. He shall,with the approval of the Chairman of theBoard, appoint, suspend and dischargesubordinate officers and all employeesand agents of the Corporation, prescribetheir duties and determine theircompensation, subject to the standardsand guidelines prescribed by, and/orwith the approval of the Board ofDirectors or the Executive Committee.The President and the Chairman of theBoard shall jointly establish generaladministrative and operating policies andguidelines. The President shall exerciseother powers and perform such otherduties as the Board of Directors may fromtime to time fix or delegate, and performall other duties incident to this office. Inthe absence or incapacity of thePresident, any officer upon designation

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of the Board may execute contracts inthe name of the Corporation. TheChairman of the Board shall exercise thepowers and functions of the President inthe absence or incapacity of thePresident, unless such absence orincapacity is permanent in which case theBoard of Directors shall elect newPresident to serve the unexpired term.”

Accountabilities

Ensure that the meetings of theBoard are held in accordance withthe By-laws or as the Chairman maydeem necessary;

Supervise the preparation of theagenda of the meeting incoordination with the CorporateSecretary, taking into considerationthe suggestions of the CEO,Management and Directors; and

Maintain qualitative and timelylines of communication andinformation between the Board andManagement.

General supervision,administration and management ofthe business of the Corporation;

To enter into contracts binding theCorporation in accordance with thestandards and guidelinesprescribed by the Board; and

Execute contracts approved by theBoard or the Executive Committee.

Deliverables

Ensure that the meetings of theBoard are held in accordance withthe By-laws or as the Chairman maydeem necessary;

Supervise the preparation of theagenda of the meeting incoordination with the CorporateSecretary, taking into considerationthe suggestions of the CEO,Management and Directors; and

Maintain qualitative and timelylines of communication andinformation between the Board andManagement.

Establish general administrativeand operating policies andguidelines; and

Appoint, suspend and dischargesubordinate officers and allemployees and agents of theCorporation, prescribed theirduties and determine theircompensation, subject to thestandards and guidelinesprescribed by, and/or with theapproval of the Board or theExecutive Committee.

3) Explain how the board of directors plans for the succession of the CEO/Managing Director/President and thetop key management positions?

The Board ensures that current CEO/President and top key management positions develop potential successorswithin the organization. It also uses external search agencies to assess and benchmark external candidates.

Based on its Charter, the Committee on Compensation and Remuneration has the primary task to prepare andensure the implementation of a succession planning process. The Committee also sees to it that an effectivemanagement succession plan is in place and that the Committee assesses and recommends to the Board a

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successor to the C E O / President and top key management positions in the event of a vacancy of the position.

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, there is a Nomination Committee that ensures the diversity of experience and background of Directors in theBoard. The policy is enshrined in the Nomination Committee, which states that, it has “develop(ed) boardsuccession plans so that an appropriate balance of skills, experience, expertise and diversity is maintained.” (SeePart V of the Nomination Committee Charter)

The above policy is likewise supported by Section 2.1 of the RMCG, thus:

2.1 Qualifications of Directors

xxx

2.1.1 In addition to the qualifications for membership in the Board provided for in the CorporationCode, Securities Regulation Code (SRC) and other relevant laws, the Board may consider any ofthe following qualifications as may be applicable:(i) College education or equivalent academic degree;(ii) Practical understanding of the business of the Corporation;(iii) Membership in good standing in relevant industry, business or professional organizations;

and(iv) Previous business experience.

Does it ensure that at least one non-executive director has an experience in the sector or industry the companybelongs to? Please explain.

Yes, please see Section 2.1.3. (ii) to (iv) above. Also, the qualifications of the Directors are provided in the AnnualReport to show the expertise of each Director, especially those with vast experience in transportation, logisticsand port management sectors. In fact, 4 non-executive directors have prior working experience in transportationand logistics. For example, Mr. Aboitiz is also the Chairman of Aboitiz & Co., Inc., a Cebu-based investment andmanagement conglomerate, engaged in numerous and diverse business concerns ranging from power generationand distribution, banking and financial services, real estate development, construction, marketing, food and shipbuilding, transportation (air/land/sea) and logistics that are closely linked to nation building and progress.

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

Executive Non-Executive Independent Director

Role

The Chairman or in hisincapacity or absence, thePresident, shall preside atall meetings of the Boardand of the stockholders.

It is the Board’sresponsibility to foster thelong-term success of theCorporation, and to sustainits competitiveness andprofitability in a mannerconsistent with itscorporate objectives andthe best interests of itsstockholders.

This Director’s role is to beindependent ofManagement and free fromany business or otherrelationship which couldreasonably be perceived tomaterially interfere with hisexercise of independentjudgment in carrying out hisresponsibilities as aDirector.

Accountabilities The Chairman, jointly An Independent Director’s

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Executive Non-Executive Independent Directorwith the President, shallhave general supervision,administration andmanagement of thebusiness of theCorporation. TheChairman and thePresident shall jointlyestablish generaladministrative andoperating policies andguidelines.

A Director’s office is one oftrust and confidence. ADirector should act in thebest interest of theCorporation in a mannercharacterized bytransparency,accountability and fairness.He/she should alsoexercise leadership,prudence and integrity indirecting the Corporationtowards sustainedprogress.

office is one of trust,confidence and utmostindependence. AnIndependent Directorshould act in the bestinterest of the Corporationin a manner characterizedby transparency,accountability and fairness.He/she should also exerciseleadership, prudence andintegrity in directing theCorporation towardssustained progress.

Deliverables

To ensure that themeetings of theBoard are held inaccordance with theBy-laws or as theChairman may deemnecessary;

To supervise thepreparation of theagenda of themeeting incoordination withthe CorporateSecretary, takinginto considerationthe suggestions ofthe CEO,Management andDirectors;

To maintainqualitative andtimely lines ofcommunication andinformationbetween the Boardand Management;

To establish generaladministrative andoperating policiesand guidelines;

To appoint, suspendand dischargesubordinate officersand all employeesand agents of theCorporation,prescribed their

To conduct fairbusiness transactionswith the Corporationand ensure thatpersonal interest doesnot bias Boarddecisions or does notconflict with theinterest of theCorporation;

To attend Boardmeetings regularly anddevote time andattention necessary toproperly discharge hisduties andresponsibilities as aDirector;

To act judiciously onmatters referred tothe Board;

To exerciseindependentjudgment in decidingBoard matters;

To have a workingknowledge of thestatutory andregulatoryrequirements affectingthe Corporation,without prejudice toobtaining advise oflegal counsel onappropriate issues;and

To conduct fairbusiness transactionswith the Corporationand ensure thatpersonal interest doesnot bias Boarddecisions or does notconflict with theinterest of theCorporation;

To attend Boardmeetings regularly anddevote time andattention necessary toproperly discharge hisduties andresponsibilities as aDirector;

To act judiciously onmatters referred tothe Board;

To exerciseindependent judgmentin deciding Boardmatters;

To have a workingknowledge of thestatutory andregulatoryrequirements affectingthe Corporation,without prejudice toobtaining advise oflegal counsel onappropriate issues;and

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Executive Non-Executive Independent Directorduties anddetermine theircompensation,subject to thestandards andguidelinesprescribed by,and/or with theapproval of theBoard or theExecutiveCommittee.

To observeconfidentiality on allproprietary,confidential and non-public informationthat comes to hispossession as Director.

To observeconfidentiality on allproprietary,confidential and non-public informationthat comes to hispossession as Director.

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

“Independence,” as used in describing the Company’s Independent Director, is being independent ofManagement and free from any business or other relationship which could reasonably be perceived to materiallyinterfere with one’s exercise of independent judgment in carrying out his/her responsibilities as a Director.

The Nomination Committee ensures that the nominees for Independent Directors possess the above quality.

Does the company have a term limit of five consecutive years for independent directors? If after two years, thecompany wishes to bring back an independent director who had served for five years, does it limit the term forno more than four additional years? Please explain.

The Company has adopted and is compliant with all the laws, circulars and applicable rules and regulations on theterm limits of Independent Directors.

As such, the Company has adopted as part of its internal policies, SEC Memorandum Circular No. 19, Series of2016, which provides that the tenure of an Independent Director is set to a cumulative term of nine (9) years.After serving for a cumulative term of nine (9) years, a person is perpetually barred from serving as an IndependentDirector for the Company without prejudice to his being elected as such in other companies outside of theCompany’s business conglomerate. However, independent directors who have served for nine (9) years maycontinue as a non-independent director of 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:

The table below is not applicable because there are no changes in the composition of the Board.

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

Name Position Date of Cessation Reason

N/A N/A N/A N/A

N/A N/A N/A N/A

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Procedure Process Adopted Criteria

a. Selection/Appointment

(i) Executive Directors

According to Section 1, Article IV ofthe Company’s By – Laws:

The officers of the Corporation shallbe composed of the Chairman ofthe Board, the President, theExecutive Vice President, theTreasurer, the Chief FinanceOfficer, the Secretary, theChairman of the ExecutiveCommittee and such SeniorOperating Officers as the Boardmay elect. All officers, except thosewho hold office by appointment ordesignation of the Board, shallserve for a period of one (1) yearand may serve for an equal periodas often as they are re-elected.Officers by appointment ordesignation shall serve theCorporation for the periodprovided for under their respectiveappointments or contract. TheBoard of Directors, or the ExecutiveCommittee, may create such otheroffices as it may determine andappoint officers to fill such officers.The Board may fill vacancies in anyoffice, delegate to one or moreofficers any of the duties of anyofficer or office, provided they arenot incompatible, and prescribe theduties of any officer.

A Director must have at leastone (1) share of stock of theCorporation in his name in thebooks of the Corporation. ADirector who ceases to be theowner of at least one (1) shareof the capital stock of theCorporation shall cease to be aDirector;

Majority of the Directors shall be

citizens of the Philippines.

Majority of the Directors shallalso be residents of thePhilippines;

College education or equivalentacademic degree;

Practical understanding of thebusiness of the corporation;

Membership in good standing inrelevant industry, business orprofessional organizations; and

Previous business experience.

(ii) Non-Executive Directors

According to Section 1, Article I ofthe Company’s By –laws:

The annual meeting of thestockholders of the Corporation forthe election of Directors and for thetransaction of such other businessas may properly come before themeeting, shall be held at theprincipal office of the Corporationat Metro Manila on the thirdThursday of April 10 o’clock in themorning in each and every year, ifsaid day is not a legal holiday, if alegal holiday on the followingbusiness day.

Sections 2 to 10 of the same Article1 provide:

A Director must have at leastone share of stock of theCorporation in his name inthe books of the Corporation.A director who ceases to bethe owner of at least one (1)share of the capital stock ofthe Corporation shall cease tobe a Director;

Majority of the Directors shallbe citizens of the Philippines;

Majority of the Directors shallalso be residents of thePhilippines;

College education orequivalent academic degree;

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Section 2. Notice of the time andplace of holding such annualmeeting of stockholders shall beserved either personally or by mailupon each stockholder of record ofthe Corporation entitled to vote atsuch meeting not less than ten (10)days before the date fixed for suchmeeting. If mailed, it shall bedirected, except as otherwiseprovided by law, to eachstockholder at his post officeaddress as it appears on the stockand transfer books of theCorporation. [As amended onMarch 14, 1997 by the Board ofDirectors and on April 17, 1997 bythe stockholders by deleting theword “nor fifteen (15) days”between the word “ten (10) and“before”].

Section 3. Special meeting ofstockholders, unless otherwiseprovided by law, may be called atany time by the Chairman of theBoard and/or the President of theCorporation, or by the Secretary ofthe Corporation on the order of theBoard of Directors. The Secretaryshall call a special meeting ofstockholders whenever he/she isrequested in writing so to do byholders of record of a majority ofthe subscribed capital stock of theCorporation entitled to vote at suchmeeting.

Section 4. Notice of each suchspecial meeting, unless otherwiseprovided by law, may be given asherein provided for giving notice ofan annual meeting.

Section 5. At all meeting ofstockholders, annual or special,other than meetings a quorum atwhich is fixed by law, in order toconstitute a quorum there shall bepresent either in person or by proxyholders of record of a majority ofthe shares of the subscribed capitalstock of the Corporation entitled tovote.

Section 6. At any meeting of

Practical understanding of thebusiness of the corporation;

Membership in good standingin relevant industry, businessor professional organizations;and

Previous business experience.

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Procedure Process Adopted Criteriastockholders, annual or special, ifless than a quorum be present, theholders of record of the majority ofthe subscribed shares present mayadjourn the meeting from time totime until a quorum shall bepresent, and no notice of suchadjourned meeting shall berequired.

Section 7. Except as otherwiseprovided by law or by the certificateof incorporation or other certificatefiled pursuant to law, eachstockholder of record shall beentitled to every meeting ofstockholders to one vote, either inperson or by proxy executed inwriting by the stockholder or by hisduly authorized attorney, for eachshare of stock standing in his namein the stock and transfer books ofthe Corporation. [As amended on25 January 2007 by the Board ofDirectors and approved by theStockholders 19 April 2007].

Section 8. In the election ofdirectors and in voting on anyquestion on which a vote by ballotis required by law, or is demandedby any stockholder, the voting shallbe by ballot. On all other questionsthe voting may be viva voce or byapproved by show of hands. [Asamended on 35 January 2007 bythe Board of Directors andapproved by the Stockholders on 19April 2007].

Section 9. The Board of Directors,prior to the annual meeting of thestockholders each year, mayappoint two (2) inspectors ofelection to act at such annualmeeting and at all other meetingsof stockholders held during theensuing year. In the event of thefailure of the Board to make suchappointment or if any inspector onelection shall for any reason fail toattend and to act at such meeting,an inspector or inspectors ofelection, as the case may be, maybe appointed by the Chairman ofthe meetings. [As amended on 25January 2007 by the Board of

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Procedure Process Adopted CriteriaDirectors and approved by theStockholders on 19 April 2007].

Section 10. All nominations for eachdirectors to be elected by thestockholders of the corporationshall be submitted in writing to thecorporate secretary of thecorporation at the principal officeof the corporation not earlier thanforty (40) days not later thantwenty (20) days prior to the dateof the regular or special meeting ofstockholders for the election ofdirectors. Nominations which arenot submitted within suchnomination period shall not bevalid. Only a stockholder or recordentitled to notice of and to vote atthe regular or special meeting ofstockholders for the election ofdirectors shall be qualified to benominated and elected a director ofthe corporation. [Amended as ofNovember 20, 1992 by the Board ofDirectors and approved by theStockholders on January 18, 1993].

(iii) Independent Directors

Nomination of IndependentDirector/s shall be conducted bythe Committee prior to astockholders' meeting. Allrecommendations shall be signedby the nominating stockholderstogether with the acceptance andconformity by the would-benominees;

The said Committee shall pre-screen the qualifications andprepare a final list of all candidatesand put in place screening policiesand parameters to enable it toeffectively review the quali-fications of the nominees forIndependent Director/s;

After the nomination, theCommittee shall prepare a Final Listof Candidates which shall containall the information about all thenominees for IndependentDirectors, as required under PartsIV(A) and (C) of Annex "C" of SRCRule 12, which list, shall be madeavailable to the SEC and to all

He/she shall have at least one(1) share of stock of thecorporation;

He/she shall be at least acollege graduate or at leasthave been engaged orexposed to the business of thecorporation for at least five (5)years;

He/she shall possessintegrity/probity; and

He/she shall be assiduous.

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Procedure Process Adopted Criteriastockholders through the filing anddistribution of the InformationStatement or Proxy Statement, inaccordance with SRC Rule 17.1(b)or SRC Rule 20, respectively, or insuch other reports the company isrequired to submit to the SEC. Thename of the person or group ofpersons who recommended thenomination of the IndependentDirector shall be identified in suchreport including any relationshipwith the nominee.

Only nominees whose namesappear on the Final List ofCandidates shall be eligible forelection as Independent Director/s.No other nomination shall beentertained after the Final List ofCandidates shall have beenprepared. No further nominationshall be entertained or allowed onthe floor during the actual annualstockholders'/member-ships'meeting.

b. Re-appointment


Following the same process as inselection / appointment stated inthe Company’s By–laws and RMCGbut subject to SEC restrictionsregarding number of directorshipshandled and number of yearsserving as Director for theCompany.

Following the same process as inselection / appointment stated inthe Company’s By–laws and RMCGbut subject to SEC restrictionsregarding number of directorshipshandled and number of yearsserving as Director for the Company.







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Procedure Process Adopted Criteriac. Permanent Disqualification(based on the By – Laws and Revised Manual on Corporate Governance)


According to Section 2, Article III ofthe Company’s By-laws:

Vacancies occurring in the Boardother than removal by stockholdersor expiration of term may be filledfor the unexpired term at anyregular meeting of the Board, or atany special meeting thereof calledfor that purpose, by remainingdirectors constituting a quorum.

Any person convicted by finaljudgment or order by acompetent judicial oradministrative body of anycrime that (a) involves thepurchase or sale of securities,as defined in the SRC; (b)arises out of the person’sconduct as an underwriter,broker, dealer, investmentadviser, principal, distributor,mutual fund dealer, futurescommission merchant,commodity trading advisor, orfloor broker; or (c) arises outof his fiduciary relationshipwith a bank, quasi-bank, trustcompany, investment houseor as an affiliated person ofany of them;

Any person who, by reason ofmisconduct, after hearing, ispermanently enjoined by afinal judgment or order of theSEC or any court oradministrative body ofcompetent jurisdiction from:(a) acting as underwriter,broker, dealer, investmentadviser, principal, distributor,mutual fund dealer, futurescommission merchant,commodity trading advisor, orfloor broker; (b) acting asdirector or officer of a bank,quasi-bank , trust company,investment house, orinvestment company; (c)engaging in or continuing anyconduct or practice in any ofthe capacities mentioned insub-paragraphs (a) and (b)above, or willfully violatingthe laws that governsecurities and bankingactivities;

Any person convicted by finaljudgment or order by a courtor competent administrativebody of an offense involvingmoral turpitude, fraud,embezzlement, theft, estafa,

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Procedure Process Adopted Criteriacounterfeiting,misappropriation, forgery,bribery, false affirmation,perjury or other fraudulentacts;

Any person who has beenadjudged by final judgment ororder of the SEC, court, orcompetent administrativebody to have willfullyviolated, or willfully aided,abetted, counseled, inducedor procured the violation ofany provision of theCorporation Code, SRC or anyother law administered by theSEC or Bangko Sentral ngPilipinas (BSP), or any of itsrule, regulation or order;

Any person earlier elected asIndependent Director ceasesto be such when he/shebecomes an officer, employeeor consultant of the samecorporation;

Any person judicially declaredas insolvent;

Any person found guilty byfinal judgment or order of aforeign court or equivalentfinancial regulatory authorityof acts, violations ormisconduct similar to any ofthe acts, violations ormisconduct enumerated insub-paragraphs above; and

Conviction by final judgmentof an offense punishable byimprisonment for more thansix (6) years, or a violation ofthe Corporation Codecommitted within five (5)years prior to the date of hiselection or appointment.

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Any person convicted by finaljudgment or order by acompetent judicial oradministrative body of anycrime that (a) involves thepurchase or sale of securities,as defined in the SRC; (b)arises out of the person’sconduct as an underwriter,broker, dealer, investmentadviser, principal, distributor,mutual fund dealer, futurescommission merchant,commodity trading advisor, orfloor broker; or (c) arises outof his fiduciary relationshipwith a bank, quasi-bank, trustcompany, investment houseor as an affiliated person ofany of them;

Any person who, by reason ofmisconduct, after hearing, ispermanently enjoined by afinal judgment or order of theSEC or any court oradministrative body ofcompetent jurisdiction from:(a) acting as underwriter,broker, dealer, investmentadviser, principal, distributor,mutual fund dealer, futurescommission merchant,commodity trading advisor, orfloor broker; (b) acting asdirector or officer of a bank,quasi-bank , trust company,investment house, orinvestment company; (c)engaging in or continuing anyconduct or practice in any ofthe capacities mentioned insub-paragraphs (a) and (b)above, or willfully violatingthe laws that governsecurities and bankingactivities;

Any person convicted by finaljudgment or order by a courtor competent administrativebody of an offense involvingmoral turpitude, fraud,embezzlement, theft, estafa,counterfeiting,misappropriation, forgery,

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Procedure Process Adopted Criteriabribery, false affirmation,perjury or other fraudulentacts;

Any person who has beenadjudged by final judgment ororder of the SEC, court, orcompetent administrativebody to have willfullyviolated, or willfully aided,abetted, counseled, inducedor procured the violation ofany provision of theCorporation Code, SRC or anyother law administered by theSEC or BSP, or any of its rule,regulation or order;

Any person earlier elected asindependent director ceasesto be such when he/shebecomes an officer, employeeor consultant of the samecorporation;

Any person judicially declaredas insolvent;

Any person found guilty byfinal judgment or order of aforeign court or equivalentfinancial regulatory authorityof acts, violations ormisconduct similar to any ofthe acts, violations ormisconduct enumerated insub-paragraphs above; and

Conviction by final judgmentof an offense punishable byimprisonment for more thansix (6) years, or a violation ofthe Corporation Codecommitted within five (5)years prior to the date of hiselection or appointment.

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He/she becomes an officer oremployee of the corporationwhere he/she is such memberof the board ofdirectors/trustees, orbecomes any of the personsenumerated under letter A ofSEC Memorandum CircularNo. 16;

His/her beneficial securityownership exceeds tenpercent (10%) of theoutstanding capital stock ofthe company where he/she issuch director;

Fails, without any justifiablecause, to attend at least 50%of the total number of Boardmeetings during hisincumbency unless suchabsences are due to graveillness or death of animmediate family; and

Such other disqualificationswhich the Company's Manualon Corporate Governanceprovides.

d. Temporary Disqualification(based on the Revised Manual on Corporate Governance)


A temporarily disqualified Directorshall, within sixty (60) business daysfrom such disqualification, take theappropriate action to remedy orcorrect the disqualification. Ifhe/she fails or refuses to do so forunjustified reasons, thedisqualification shall becomepermanent.

Refusal to fully disclose theextent of his/her businessinterest as required under theSRC and its implementingregulations;

Absence in more than fiftypercent (50%) of all regularand special meetings of theBoard during his incumbency,or any twelve (12) monthperiod during saidincumbency, unless theabsence is due to illness,death in the immediate familyor serious accident, or othersimilar reasons, or theperformance of an order byor a duty to the corporation.This disqualification shallapply for the purpose of thesucceeding election;

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Dismissal/termination fromdirectorship in another listedcorporation for irregularity,fraud or other valid causes.This disqualification shall bein effect until such person hascleared himself of anyinvolvement in the allegedirregularity, fraud or othervalid cause for termination orsuch cause does not apply tothe Corporation (e.g.disqualification as acompetitor in another line ofbusiness not related to thebusiness of the Corporation);

Being a director, officer orsubstantial stockholder of acompany or business that isdirectly in competition withthe business of theCorporation, as determinedby the Board;

If the beneficial equityownership of an IndependentDirector in the Corporation orits subsidiaries and affiliatesexceeds two percent (2%) ofits subscribed capital stock.The disqualification shall belifted if the limit is latercomplied with; and

If any of the judgments ororders cited in the groundsfor permanentdisqualification has not yetbecome final.


A temporarily disqualified Directorshall, within sixty (60) business daysfrom such disqualification, take theappropriate action to remedy orcorrect the disqualification. Ifhe/she fails or refuses to do so forunjustified reasons, thedisqualification shall becomepermanent.

Refusal to fully disclose theextent of his business interestas required under the SRCand its implementingregulations;

Absence in more than fiftypercent (50%) of all regularand special meetings of theBoard during his incumbency,or any twelve (12) month

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Procedure Process Adopted Criteriaperiod during saidincumbency, unless theabsence is due to illness,death in the immediate familyor serious accident, or othersimilar reasons, or theperformance of an order byor a duty to the corporation.This disqualification shallapply for the purpose of thesucceeding election;




If any of the judgments ororders cited in the groundsfor permanentdisqualification has not yetbecome final.

(iii) Independent Directors A temporarily disqualified directorshall, within sixty (60) business daysfrom such disqualification, take the

Refusal to fully disclose theextent of his/her businessinterest as required under the

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Procedure Process Adopted Criteriaappropriate action to remedy orcorrect the disqualification. Ifhe/she fails or refuses to do so forunjustified reasons, thedisqualification shall becomepermanent.

SRC and its implementingregulations;

Absence in more than fiftypercent (50%) of all regularand special meetings of theBoard during his incumbency,or any twelve (12) monthperiod during saidincumbency, unless theabsence is due to illness,death in the immediate familyor serious accident, or othersimilar reasons, or theperformance of an order byor a duty to the corporation.This disqualification shallapply for the purpose of thesucceeding election;




If any of the judgments ororders cited in the grounds

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Procedure Process Adopted Criteriafor permanentdisqualification has not yetbecome final.

e. Removal


Following the Corporation Code:Any director or trustee of acorporation may be removed fromoffice by a vote of the stockholdersholding or representing at leasttwo-thirds (2/3) of the outstandingcapital stock, or if the corporationbe a non-stock corporation, by avote of at least two-thirds (2/3) ofthe members entitled to vote:Provided, That such removal shalltake place either at a regularmeeting of the corporation or at aspecial meeting called for thepurpose, and in either case, afterprevious notice to stockholders ormembers of the corporation of theintention to propose such removalat the meeting. A special meeting ofthe stockholders or members of acorporation for the purpose ofremoval of directors or trustees, orany of them, must be called by thesecretary on order of the presidentor on the written demand of thestockholders representing orholding at least a majority of theoutstanding capital stock, or, if it bea non-stock corporation, on thewritten demand of a majority of themembers entitled to vote. Shouldthe secretary fail or refuse to callthe special meeting upon suchdemand or fail or refuse to give thenotice, or if there is no secretary,the call for the meeting may beaddressed directly to thestockholders or members by anystockholder or member of thecorporation signing the demand.Notice of the time and place of suchmeeting, as well as of the intentionto propose such removal, must begiven by publication or by writtennotice prescribed in this Code.Removal may be with or withoutcause: Provided, That removalwithout cause may not be used todeprive minority stockholders ormembers of the right ofrepresentation to which they may

In accordance with the RMCG andapplicable laws, rules andregulations.

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Procedure Process Adopted Criteriabe entitled under Section 24 of theCorporation Code.


Following the Corporation Code:Any director or trustee of acorporation may be removed fromoffice by a vote of the stockholdersholding or representing at leasttwo-thirds (2/3) of the outstandingcapital stock, or if the corporationbe a non-stock corporation, by avote of at least two-thirds (2/3) ofthe members entitled to vote:Provided, That such removal shalltake place either at a regularmeeting of the corporation or at aspecial meeting called for thepurpose, and in either case, afterprevious notice to stockholders ormembers of the corporation of theintention to propose such removalat the meeting. A special meeting ofthe stockholders or members of acorporation for the purpose ofremoval of directors or trustees, orany of them, must be called by thesecretary on order of the presidentor on the written demand of thestockholders representing orholding at least a majority of theoutstanding capital stock, or, if it bea non-stock corporation, on thewritten demand of a majority of themembers entitled to vote. Shouldthe secretary fail or refuse to callthe special meeting upon suchdemand or fail or refuse to give thenotice, or if there is no secretary,the call for the meeting may beaddressed directly to thestockholders or members by anystockholder or member of thecorporation signing the demand.Notice of the time and place of suchmeeting, as well as of the intentionto propose such removal, must begiven by publication or by writtennotice prescribed in this Code.Removal may be with or withoutcause: Provided, That removalwithout cause may not be used todeprive minority stockholders ormembers of the right ofrepresentation to which they maybe entitled under Section 24 of theCorporation Code.


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Following the Corporation Code,applicable laws and SECMemorandum Circulars: Anydirector or trustee of a corporationmay be removed from office by avote of the stockholders holding orrepresenting at least two-thirds(2/3) of the outstanding capitalstock, or if the corporation be anon-stock corporation, by a vote ofat least two-thirds (2/3) of themembers entitled to vote:Provided, that such removal shalltake place either at a regularmeeting of the corporation or at aspecial meeting called for thepurpose, and in either case, afterprevious notice to stockholders ormembers of the corporation of theintention to propose such removalat the meeting. A special meeting ofthe stockholders or members of acorporation for the purpose ofremoval of directors or trustees, orany of them, must be called by thesecretary on order of the presidentor on the written demand of thestockholders representing orholding at least a majority of theoutstanding capital stock, or, if it bea non-stock corporation, on thewritten demand of a majority of themembers entitled to vote. Shouldthe secretary fail or refuse to callthe special meeting upon suchdemand or fail or refuse to give thenotice, or if there is no secretary,the call for the meeting may beaddressed directly to thestockholders or members by anystockholder or member of thecorporation signing the demand.Notice of the time and place of suchmeeting, as well as of the intentionto propose such removal, must begiven by publication or by writtennotice prescribed in this Code.Removal may be with or withoutcause: Provided, That removalwithout cause may not be used todeprive minority stockholders ormembers of the right ofrepresentation to which they maybe entitled under Section 24 of theCorporation Code.


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Procedure Process Adopted Criteriaf. Re-instatement(based on the Revised Manual on Corporate Governance)


A temporarily disqualified directorshall, within sixty (60) business daysfrom such disqualification, take theappropriate action to remedy orcorrect the disqualification. Ifhe/she fails or refuses to do so forunjustified reasons, thedisqualification shall becomepermanent.

If the reason for temporarydisqualification has beenremoved/corrected.







g. Suspension(based on the Revised Manual on Corporate Governance)



Same criteria as temporarydisqualification.


A temporarily disqualified directorshall, within sixty (60) business daysfrom such disqualification, take theappropriate action to remedy orcorrect the disqualification. Ifhe/she fails or refuses to do so forunjustified reasons, the


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Procedure Process Adopted Criteriadisqualification shall becomepermanent.




Voting Results of the last Annual General Meeting (April 20, 2017)

In favor Against Abstain Total SharesVoting

Enrique K. Razon, Jr. 2,249,431,940 31,628,405 1,804,280 2,282,864,625Jose C. Ibazeta 2,018,161,293 264,703,332 - 2,282,864,625

Stephen A. Paradies 1,980,863,577 302,001,048 - 2,282,864,625Andres Soriano III 2,004,386,224 278,478,401 - 2,282,864,625Jon Ramon Aboitiz 1,975,568,787 307,295,838 - 2,282,864,625

Octavio Victor R. Espiritu 2,130,708,106 152,156,519 - 2,282,864,625Joseph R. Higdon 2,281,871,305 993,320 - 2,282,864,625

6) Orientation and Education Program

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

Should there be any newly – elected director, an orientation or on-boarding program will be provided by theCompany.

As stated in Clause 9.3 of the Revised Manual on Corporate Governance, ICTSI also continuously providesinformation campaigns, orientation program or workshops on corporate governance under this Manual to itsdirectors (new or re-elected), officers and employees.

ICTSI conducts a 2-day Orientation Program in the following phases:

First Day – Human Resources Agenda Introduction to company - mission, vision, culture including the port’s role in the trade and economy of a

country for better understanding of the business Overview of the company profile and the presentation of the international and local ICTSI organizations Safety Orientation & Port Tour— safety, fire, and emergency evacuation

Second Day – Review of Policies Policy reviews— code of conduct including administrative proceedings briefing

Also part of the On-boarding process is a 1-day talk called Operations for Non-Ops with the Terminal Headhimself as the speaker. The main objective is for the new employee, officer or director to understand andappreciate the flow of operations as it is the heart of the business and how this impacts his/her job.

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(b) State any in-house training and external courses attended by Directors and Senior Management3 for thepast three (3) years:

2014

ATTENDEES SEMINAR TITLE DATE VENUE

CAUSON, CAROLINE C.CHARTERED FINANCIAL ANALYST (CFA)

PROGRAM – LEVEL 1 EXAMDEC. 6

SELF STUDYPROGRAM

CRUZ, REYNALDO MARK S., JR. PORTS OPERATION AND STRATEGYMARCH 26-

27ASCOTTHOTEL

SAMONTE, BERLIN O.PORT PLANNING & REDESIGN PORT

OPERATIONS & STRATEGYMARCH 24-

27ASCOTTHOTEL

In – house training:

ATTENDEES SEMINAR TITLE DATE CONDUCTEDBY

JOSE MANUEL M. DE JESUSRAFAEL D. CONSING JR.

JOSE JOEL M. SEBASTIANANTONIUS FLORIS MARTIJN VAN DEN BOSCH

ATTY. SILVERIO BENNYY J. TANATTY. BENJAMIN M. GOROSPE III

Orientation Course onCorporate Governance

May 22, 2014Institute ofCorporateDirectors


ENRIQUE K. RAZON, JR.CHRISTIAN R. GONZALEZ

MARTIN L. O’NEILFERNANDO L. GASPAR

LISA ESCALERSANDY ALIPIO

ANTONIUS FLORIS MARTIJN VAN DEN BOSCH

Orientation Course onCorporate Governance

May 29, 2014Institute ofCorporateDirectors

3 Senior Management refers to the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of thecompany.

36

2015

ATTENDEES SEMINAR TITLE DATE VENUE

ENRIQUE K. RAZON JR. Forbes Global CEO Conference Oct. 12-14Solaire Resort &

Casino

FERNANDO L. GASPAR

ASIA CEO FORUMFINANCIAL TIMES INVESTMENT

SUMMIT 2015

CORPORATE GOVERNANCE

JAN. 13MAY 20

JULY 9

DUSITMAKATI SHANGRI-LA

HOTEL

NEW WORLD HOTEL

JOSE JOEL M. SEBASTIANCORPORATE GOVERNANCE

Forbes Global CEO ConferenceJULY 9

Oct. 12-14

NEW WORLD HOTELSolaire Resort &

Casino



ENRIQUE K. RAZON, JR.MARTIN O’NEIL

CHRISTIAN R. GONZALEZANTONIUS FLORIS MARTIJN VAN DEN BOSCH

GUILLAUME LUCCISANDY A. ALIPIO

EARL ERIC NESTOR H. FERRERLISA MARIE TERESA ESCALERATTY. SILVERIO BENNY J. TAN

Corporate Governance May 26, 2015Institute ofCorporateDirectors

ATTENDEES SEMINAR TITLE DATECONDUCTED

BYRAFAEL D. CONSING JR.

JOSE MANUEL M. DE JESUSANTONIUS FLORIS MARTIJN VAN DEN BOSCH

ARTHUR R. TABUENAATTY. BENJAMIN M. GOROSPE III

JOAQUIN MANTECON

Corporate Governance June 1, 2015Institute ofCorporateDirectors


BYSANDY A. ALIPIO

JOSE JOEL M. SEBASTIANGUILLAUME LUCCI

RAFAEL D. CONSING JR.ANTONIUS FLORIS MARTIJN VAN DEN BOSCH

LISA MARIE TERESA ESCALER

Vision of the FutureLeadership Workshop

June 15, 2015Odgers

37


BYMARTIN O’NEIL

SANDY A. ALIPIOJOSE JOEL M. SEBASTIAN

GUILLAUME LUCCIRAFAEL D. CONSING JR.

ANTONIUS FLORIS MARTIJN VAN DEN BOSCHLISA MARIE TERESA ESCALER

VP Strategic ManagementAugust 27,

2015Odgers


BY

SANDY A. ALIPIOANTONIUS FLORIS MARTIJN VAN DEN BOSCH

Individual Leadership &Development

September 9,2015

Odgers

2016



CHRISTIAN R. GONZALEZRAFAEL D. CONSING, JR.

JOSE MANUEL M. DE JESUSARTHUR R. TABUENA

FERDINAND S. MAGTALASROBERTO R. LOCSIN

CHRISTIAN L. LOZANOVOLTAIRE C. WYCOCOCARMELA RODRIGUEZ

GABRIEL D. MUÑASQUE

Corporate GovernanceAugust 22,

2016

Institute ofCorporateDirectors

ENRIQUE K. RAZON, JR.RAFAEL D. CONSING, JR.JOSE JOEL M. SEBASTIAN

GUILLAUME LUCCISANDY A. ALIPIO

EARL ERIC NESTOR H. FERRERLISA MARIE TERESA ESCALER

ATTY. BENJAMIN M. GOROSPE III

Corporate GovernanceAugust 23,

2016


(c) Continuing education programs for directors: programs and seminars and roundtables attended duringthe year.


ENRIQUE K. RAZON, JR. Corporate Governance August 23,2016


JON RAMON ABOITIZ Corporate Governance March 28,2016

AboitizEquity

38

Ventures,Inc.

STEPHEN A. PARADIES

Corporate Governance March 28,2016

AboitizEquity

Ventures,Inc.

Corporate Governance March 29,2017

AboitizEquity

Ventures,Inc.

JOSE C. IBAZETA Corporate Governance October 25,2016

Sycip GorresVelayo & Co.

OCTAVIO VICTOR R. ESPIRITU Corporate Governance March 8,2016


ANDRES SORIANO III Corporate Governance October 25,2016


JOSEPH R. HIGDON

Advanced CorporateGovernance Training

April 26,2016


Corporate Governance April 25,2017


B. CODE OF BUSINESS CONDUCT & ETHICS

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

Business Conduct &Ethics Directors Senior Management Employees

(a) Conflict ofInterest

Under ICTSI’s Code ofBusiness Conduct (Code), aconflict of interest ariseswhen a Director’s personalor financial interestinterferes with or isinconsistent with the bestinterest of the Company.

Some examples where apotential conflict of interestmay arise include:

Assisting familymembers or friendswith doing businesswith ICTSI;

Having outsideemployment orengaging in businessesthat competes or doesbusiness with ICTSI;

Receiving any personalbenefits from any

Under ICTSI’s Code, a conflict ofinterest arises when an officer’spersonal or financial interestinterferes with or isinconsistent with the bestinterest of the Company.


Assisting family membersor friends with doingbusiness with ICTSI;

Having outsideemployment or engagingin businesses thatcompetes or does businesswith ICTSI;

Receiving any personalbenefits from any business

Under ICTSI’s Code, a conflictof interest arises when anemployee’s personal orfinancial interest interfereswith or is inconsistent with thebest interest of the Company.


Assisting family membersor friends with doingbusiness with ICTSI;

Having outsideemployment or engagingin businesses thatcompetes or doesbusiness with ICTSI;

Receiving any personalbenefits from anybusiness transactionsinvolving ICTSI; or

39


business transactionsinvolving ICTSI; or

Using companyresources andinformation to gainpersonal benefits.

As such, if a Directorbecomes aware of anypotential or actual conflictof interest, he/she mustdisclose this to the Boardand seek prior writtenapproval before engaging inthe concernedactivity/transaction. TheBoard will consider eachsituation carefully in orderto determine whether aconflict arises.

transactions involvingICTSI; or

Using company resourcesand information to gainpersonal benefits.

As such, if an officer becomesaware of any potential oractual conflict of interest,he/she must disclose this tohis/her superiors and seekprior written approval beforeengaging in the concernedactivity/transaction.Management will considereach situation carefully inorder to determine whether aconflict arises.

Using company resourcesand information to gainpersonal benefits.

As such, if an employeebecomes aware of anypotential or actual conflict ofinterest, he/she must disclosethis to his/her directsupervisor and seek priorwritten approval beforeengaging in the concernedactivity/transaction.Management will considereach situation carefully inorder to determine whether aconflict arises.

(b) Conduct ofBusiness andFair Dealings

The Company conducts itsbusiness consistent with thelaw. It also has a firmcommitment to integrity.

As provided in the Code,ICTSI does not engage inunethical or illegal businesspractices. While ICTSIcompetes vigorously forbusiness, the Company’sconduct must be consistentwith the law and ourcommitment to integrity.

Business information maynot be obtained through theuse of unlawful or unethicalmeans, such asmisrepresentation,deception, theft or bribery.

In many countries, there areantitrust laws to prohibitbusiness conduct thatrestrict competition basedon merits. It is a policy ofICTSI to comply with allapplicable antitrust laws.

As provided in the Code, ICTSIdoes not engage in unethical orillegal business practices. WhileICTSI competes vigorously forbusiness, the Company’sconduct must be consistentwith the law and ourcommitment to integrity.

Business information may notbe obtained through the use ofunlawful or unethical means,such as misrepresentation,deception, theft or bribery.

In many countries, there areantitrust laws to prohibitbusiness conduct that restrictcompetition based on merits. Itis a policy of ICTSI to complywith all applicable antitrustlaws.

As provided in the Code, ICTSIdoes not engage in unethicalor illegal business practices.While ICTSI competesvigorously for business, theCompany’s conduct must beconsistent with the law andour commitment to integrity.


In many countries, there areantitrust laws to prohibitbusiness conduct that restrictcompetition based on merits.It is a policy of ICTSI to complywith all applicable antitrustlaws.

(c) Receipt of giftsfrom thirdparties

The Code of the Companyrecognizes that the practice

The Code of the Companyrecognizes that the practice of

The Code of the Companyrecognizes that the practice of

40


of giving and receiving gifts,hospitality and travel(collectively, BusinessCourtesies) are necessary inappropriate circumstancesto strengthen businessrelationships and creategoodwill. However, suchpractices may vary in termsof what is appropriate andlawful from country tocountry.

In order to prevent anyimpression of impropriety,caution should be exercisedby the Directors, officers andemployees in extending orreceiving BusinessCourtesies. As such, it mustbe ascertained that saidBusiness Courtesies:

do not violate locallaws or regulations;

is modest in value tolocal standards andconsistent withcustomary businesspractices;

is for an appropriatebusiness purpose;

is appropriate in theparticular context, e.g.whether it is in themiddle of a biddingprocess or businessnegotiations;

does not embarrassICTSI or would not beagainst ICTSI’s values;

is unlikely to beconstrued as a bribe;

is not in cash or cashequivalent.

Directors, officers andemployees should also takeinto consideration thefrequency of BusinessCourtesies in determining

giving and receiving gifts,hospitality and travel(collectively, BusinessCourtesies) are necessary inappropriate circumstances tostrengthen businessrelationships and creategoodwill. However, suchpractices may vary in terms ofwhat is appropriate and lawfulfrom country to country.

In order to prevent anyimpression of impropriety,caution should be exercised bythe Directors, officers andemployees in extending orreceiving Business Courtesies.As such, it must be ascertainedthat said Business Courtesies:

do not violate local laws orregulations;

is modest in value to localstandards and consistentwith customary businesspractices;


is appropriate in theparticular context, e.g.whether it is in the middleof a bidding process orbusiness negotiations;

does not embarrass ICTSIor would not be againstICTSI’s values;

is unlikely to be construedas a bribe;


Directors, officers andemployees should also take intoconsideration the frequency ofBusiness Courtesies indetermining their propriety. If

giving and receiving gifts,hospitality and travel(collectively, BusinessCourtesies) are necessary inappropriate circumstances tostrengthen businessrelationships and creategoodwill. However, suchpractices may vary in terms ofwhat is appropriate and lawfulfrom country to country.

In order to prevent anyimpression of impropriety,caution should be exercised byDirectors, officers andemployees in extending orreceiving Business Courtesies.As such, it must be ascertainedthat said Business Courtesies:

do not violate local lawsor regulations;

is modest in value to localstandards and consistentwith customary businesspractices;


is appropriate in theparticular context, e.g.whether it is in themiddle of a biddingprocess or businessnegotiations;

does not embarrass ICTSIor would not be againstICTSI’s values;

is unlikely to beconstrued as a bribe;


Directors, officers andemployees should also takeinto consideration thefrequency of BusinessCourtesies in determiningtheir propriety. If in doubt as

41


their propriety. If in doubtas to the said propriety ofthe Business Courtesies, theparty involved should seekguidance from theCompany’s Vice Presidentfor Corporate Affairs andGovernance or refer to theCompany’s “Anti-BriberyCompliance Policy andProcedure” for detailedguidance.

in doubt as to the said proprietyof the Business Courtesies, theparty involved should seekguidance from the Company’sVice President for CorporateAffairs and Governance or referto the Company’s “Anti-BriberyCompliance Policy andProcedure” for detailedguidance.

to the said propriety of theBusiness Courtesies, the partyinvolved should seek guidancefrom the Company’s VicePresident for Corporate Affairsand Governance or refer to theCompany’s “Anti-BriberyCompliance Policy andProcedure” for detailedguidance.

(d) Compliancewith Laws &Regulations

As explicitly stated in theCode, it is a policy of ICTSI tocomply with all applicablelaws and regulations in everycountry it operates in. Forthe avoidance of doubt, tothe extent that any part ofthe Code is inconsistent withthe local laws and/orregulations, local law andregulations should prevail.

The Board is required tocomply with laws, rules,regulations and circularsrelated to securitiesregulation and corporategovernance.

The Company complies withall the PPA regulations andall other laws related to portmanagement andoperations.

There is faithful complianceto provisions of existingCollective BargainingAgreement (CBA) and otherrelevant labor laws.

There is an active InternalAudit Department makingsure that there is rigidcompliance with all laws andregulations.

In fact, the Code states thatif a Director, officer oremployee becomes aware ofany potential or actualviolations of the law or ofthe Code, he/she is required

The Company complies with allthe PPA regulations and allother laws related to portmanagement and operations.

There is faithful compliance toprovisions of existing CBA andother relevant labor laws.

There is an active Internal AuditDepartment making sure thatthere is rigid compliance withall laws and regulations.

In fact, the Code states that if aDirector, officer or employeebecomes aware of any potentialor actual violations of the law orof the Code, he/she is requiredto immediately disclose anyrelevant information to theCompany’s Vice President forCorporate Affairs andGovernance.

Faithful compliance toprovisions of existing CBA andother relevant labor laws.

There is an active InternalAudit Department making surethat there is rigid compliancewith all laws and regulations.

In fact, the Code states that ifa Director, officer or employeebecomes aware of anypotential or actual violationsof the law or of the Code,he/she is required toimmediately disclose anyrelevant information to theCompany’s Vice President forCorporate Affairs andGovernance.

42


to immediately disclose anyrelevant information to theCompany’s Vice Presidentfor Corporate Affairs andGovernance.

(e) Respect forTradeSecrets/Use ofNon-publicInformation

The Company incorporatesnon-disclosure andintellectual property clausesin contracts entered into bythe Company with thirdparties.

As provided in the Code,ICTSI does not engage inunethical or illegal businesspractices. While ICTSIcompetes vigorously forbusiness, the Company’sconduct must be consistentwith the law and ourcommitment to integrity.

Business information maynot be obtained through theuse of unlawful or unethicalmeans, such asmisrepresentation,deception, theft or bribery.

The Company incorporatesnon-disclosure and intellectualproperty clauses in contractsentered into by the Companywith third parties.

As provided in the Code, ICTSIdoes not engage in unethical orillegal business practices. WhileICTSI competes vigorously forbusiness, the Company’sconduct must be consistentwith the law and ourcommitment to integrity.


The Company incorporatesnon-disclosure and intellectualproperty clauses in contractsentered into by the companywith third parties as well as inemployment contracts.

As provided in the Code, ICTSIdoes not engage in unethicalor illegal business practices.While ICTSI competesvigorously for business, theCompany’s conduct must beconsistent with the law andour commitment to integrity.


(f) Use ofCompanyFunds, AssetsandInformation

Use of Company funds isalways subject to properliquidation process andinternal audit check.

Use of Company funds is alwayssubject to proper liquidationprocess and internal auditcheck.

Use of Company funds isalways subject to properliquidation process andinternal audit check.

(g) Employment &Labor Laws &Policies

The Company ensuresfaithful compliance toprovisions of existing CBAand other labor laws andsocial legislation.

The Company has an in-house labor counsel toensure compliance with theabove.

Moreover, ICTSI’s Codeexpressly states that theCompany embracesworkplace diversity andconsiders its employees tobe its greatest asset. TheCompany strives to maintain

The Company ensures faithfulcompliance to provisions ofexisting CBA and other laborlaws and social legislation.

The Company has an in-houselabor counsel to ensurecompliance with the above.

Moreover, ICTSI’s Codeexpressly states that theCompany embraces workplacediversity and considers itsemployees to be its greatestasset. The Company strives tomaintain a fair, harmonious andrespectful work environmentwhere all employees are

The Company ensures faithfulcompliance to provisions ofexisting CBA and other laborlaws and social legislation.


Moreover, ICTSI’s Codeexpressly states that theCompany embraces workplacediversity and considers itsemployees to be its greatestasset. The Company strives tomaintain a fair, harmoniousand respectful workenvironment where all

43


a fair, harmonious andrespectful workenvironment where allemployees are treated withdignity, and individualdifferences are respected.ICTSI strictly prohibitsdiscrimination of any kind,including that on the basis ofrace, religion, gender, age,disability or pregnancy. Anyform of harassment,unprofessional orinappropriate work conductwill not be tolerated. Whereapplicable, additional localrequirements will also becomplied with.

treated with dignity, andindividual differences arerespected. ICTSI strictlyprohibits discrimination of anykind, including that on the basisof race, religion, gender, age,disability or pregnancy. Anyform of harassment,unprofessional or inappropriatework conduct will not betolerated. Where applicable,additional local requirementswill also be complied with.

employees are treated withdignity, and individualdifferences are respected.ICTSI strictly prohibitsdiscrimination of any kind,including that on the basis ofrace, religion, gender, age,disability or pregnancy. Anyform of harassment,unprofessional orinappropriate work conductwill not be tolerated. Whereapplicable, additional localrequirements will also becomplied with.

(h) Disciplinaryaction

ICTSI is firm on itscompliance to requirementsof both substantive andprocedural due process.

The Company has an in-house labor counsel toensure compliance with theabove.

ICTSI also takes violations ofthe Code seriously.Directors, officers andemployees who fail tocomply with the Code mayface disciplinary action,including termination ofemployment. Third partieswho violate the Code mayface termination of thebusiness relationship andbarred from acting on behalfof ICTSI in future.

ICTSI is firm on its compliance torequirements of bothsubstantive and procedural dueprocess.


ICTSI also takes violations of theCode seriously. Directors,officers and employees who failto comply with the Code mayface disciplinary action,including termination ofemployment. Third parties whoviolate the Code may facetermination of the businessrelationship and barred fromacting on behalf of ICTSI infuture.

ICTSI is firm on its complianceto requirements of bothsubstantive and proceduraldue process.


ICTSI also takes violations ofthe Code seriously. Directors,officers and employees whofail to comply with the Codemay face disciplinary action,including termination ofemployment. Third partieswho violate the Code may facetermination of the businessrelationship and barred fromacting on behalf of ICTSI infuture.

(i) Whistle Blower

Employees are required toreport violations.

If employees have anyconcerns or become awareof any breaches of the Codeon Business Conduct andother company policies,they are responsible forreporting the violationimmediately, where in the


If employees have any concernsor become aware of anybreaches of the Code onBusiness Conduct and othercompany policies, they areresponsible for reporting theviolation immediately to theirline manager. He/she may alsonotify the Vice President for


If employees have anyconcerns or become aware ofany breaches of the Code onBusiness Conduct and othercompany policies, they areresponsible for reporting theviolation immediately to theirline manager. He/she may also

44


case of a director, to theBoard. He/she may alsonotify the Vice President forCorporate Affairs andGovernance. The identity ofthe employee – informantshall be treated withconfidentiality. Rights of theemployee – informant willbe protected based onapplicable policies and locallaws.

Employee – informants arealways encouraged duringLabor ManagementCouncils.

This is implemented androlled out to all directors,senior management,employees and all coveredpersonnel and monitored bythe the Vice President forCorporate Affairs andGovernance.

Corporate Affairs andGovernance. The identity of theemployee – informant shall betreated with confidentiality.Rights of the employee –informant will be protectedbased on applicable policiesand local laws.

Employee – informants arealways encouraged duringLabor Management Councils.

This is implemented and rolledout to all directors, seniormanagement, employees andall covered personnel andmonitored by the VicePresident for Corporate Affairsand Governance.

notify the Vice President forCorporate Affairs andGovernance. The identity ofthe employee – informantshall be treated withconfidentiality. Rights of theemployee – informant will beprotected based on applicablepolicies and local laws.

Employee – informants arealways encouraged duringLabor Management Councils.

This is implemented and rolledout to all directors, seniormanagement, employees andall covered personnel andmonitored by the the VicePresident for Corporate Affairsand Governance.

(j) ConflictResolution

ICTSI resort to alternativemodes of dispute resolutioni.e. grievance machineryprocedure under the CBA;Labor ManagementCooperation meetings.

ICTSI resort to alternativemodes of dispute resolution i.e.grievance machinery procedureunder the CBA; LaborManagement Cooperationmeetings.

ICTSI resort to alternativemodes of dispute resolutioni.e. grievance machineryprocedure under the CBA;Labor ManagementCooperation meetings.

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

Yes, the Company policies and procedures are discussed and disseminated during the Orientation Program andare available in the public folder of the Company’s network/Outlook.

Moreover, a refresher on these policies is given every quarter to employee birthday celebrators during theCompany’s Ugnayan sa Pantalan, which is a Forum for employees to address their concerns and work – relatedgrievances.

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

The Company has a separate and independent Industrial Relations Section which implements and monitorscompliance with its policies and procedures.

Further, the Internal Audit Department verifies and checks compliance as well. Company supervisors are alsobeing trained to handle administrative cases, specifically the observance of due process, through modulesprovided by the Human Resource Department.

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4) Related Party Transactions

(a) Policies and Procedures

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

Related Party Transactions Policies and Procedures

(1) Parent Company Monitored by the Controller Group and checked by theindependent external auditor.

(2) Joint Ventures Monitored by the Controller Group and checked by theindependent external auditor.

(3) Subsidiaries Monitored by the Controller Group and checked by theindependent external auditor.

(4) Entities Under Common Control Monitored by the Controller Group and checked by theindependent external auditor.

(5) Substantial Stockholders Monitored by the Controller Group and checked by theindependent external auditor.

(6) Officers includingspouse/children/siblings/parents

Monitored by the Controller Group and checked by theindependent external auditor.

(7) Directors includingspouse/children/siblings/parents


(8) Interlocking director relationshipof Board of Directors


The Board, through its Audit Committee, formulates and implements policies and procedures that wouldensure the integrity and transparency of related party transactions between and among the Company and itsjoint ventures, subsidiaries, associates, affiliates, major stockholders, officers and directors, including theirspouses, children and dependent siblings and parents, as well as the interlocking director relationships bymembers of the Board. The Audit Committee reviews the Company's related party transactions (or RPT) andensures that these are conducted in a fair and arm's length manner.

(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 shareholdersmay be involved.

As of December 31, 2016 Details of Conflictof Interest (Actual or Probable)

Name of Director/sJoseph R. Higdon

Stephen A. ParadiesJon Ramon Aboitiz

Octavio Victor R. EspirituAndres Soriano III

Jose C. Ibazeta

NONE

Name of Officer/sEnrique K. Razon, Jr.

NONE

46

As of December 31, 2016 Details of Conflictof Interest (Actual or Probable)

Martin O’NeilRafael D. Consing Jr.

Jose Joel M. SebastianChristian R. Gonzalez

Sandy AlipioJose Manuel M. De Jesus

Lisa T. EscalerGuillaume LucciVivien F. Miñana

Name of Significant ShareholdersEnrique K. Razon, Jr. NONE

(ii) Mechanism

Describe the mechanism laid down to detect, determine and resolve any possible conflict of interestbetween the company and/or its group and their directors, officers and significant shareholders.

Directors/Officers/Significant ShareholdersCompany This is being checked by an independent external auditor.Group This is being checked by an independent external auditor.

5) Family, Commercial and Contractual Relations

(a) Indicate, if applicable, any relation of a family,4 commercial, contractual or business nature that existsbetween the holders of significant equity (5% or more), to the extent that they are known to the company:

Names of RelatedSignificant Shareholders Type of Relationship Brief Description of the

Relationship

NONE N/A N/A

(b) Indicate, if applicable, any relation of a commercial, contractual or business nature that exists between theholders of significant equity (5% or more) and the company:

Names of RelatedSignificant Shareholders Type of Relationship Brief Description

NONE N/A N/A

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

Name of Shareholders % of Capital Stock affected(Parties)

Brief Description of theTransaction

NONE N/A N/A

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

47

6) Alternative Dispute Resolution

Describe the alternative dispute resolution system adopted by the company for the last three (3) years in amicablysettling conflicts or differences between the corporation and its stockholders, and the corporation and thirdparties, including regulatory authorities.

Alternative Dispute Resolution System

Corporation & Stockholders The Company adopts the PhilippineArbitration Law.

Corporation & Third Parties The Company adopts the PhilippineArbitration Law.

Corporation & Regulatory Authorities The Company adopts the PhilippineArbitration Law.

Also, the Company adopts the following alternative dispute resolution systems:

GRIEVANCE MACHINERY

Article XV of the CBA signed on April 25, 2014 between ICTSI and Nagkakaisang Manggagawa sa Pantalan ng ICTSI-NAFLU (NMPI-NAFLU) provides that the Company and the NMPI-NAFLU agree on the principle that disputesbetween labor and Management may be solved through friendly negotiations; that both have the same interestin the continuity of work until all points of the dispute shall have been discussed and settled; that an open conflictin any form involves losses to the parties and that therefore, every effort shall be exerted to avoid such an openconflict.

Any difference of opinion, controversy or dispute between the Company and the NMPI-NAFLU, or between theCompany and any employee or worker covered by the CBA, arising from the interpretation and/or implementationof any provisions of the CBA which is not settled or adjusted to the satisfaction of the Company or NMPI-NAFLUor employee concerned, shall be considered as GRIEVANCE and hence shall be resolved in accordance with thegrievance machinery provisions of the CBA.

Any grievance is resolved first at the friendly stage of the machinery. Any employee infraction is resolved throughcounseling and in the most amicable manner. Failure of resolution in this stage will elevate the case to Supervisorlevel then to Manager level and lastly to Top management level. If the case still remains unresolved despiteexhausting all the levels of the machinery, the case shall be elevated to voluntary arbitration under the supervisionof the Department of Labor and Employment. The decision of the voluntary arbitrators shall be final and bindingamong the parties and they shall abide by the said decision without recourse to appeal.

LABOR MANAGEMENT COOPERATION (LMC)

The LMC features a structure that addresses the different levels of concern in the Company and it paved the wayto discovering new leaders among the Rank and File Employees since some of the taskforces are chaired by theRank and File Employees themselves.

It has the Steering Committee that heads and oversees all functions of the different taskforces. There are nine (9)taskforces, namely: Taskforce on Supply and Deployment of Manpower, Taskforce on Attendance and Manning,Taskforce on Safety, Taskforce on Employee Welfare and Wellness, Taskforce on Equipment Breakdown andMaintenance, Taskforce on Communications, Taskforce on IMS (Integrated Management System), Taskforce onTraining, and Taskforce on Promotion.

All of these taskforces meet regularly every month, both as a taskforce and as a whole body of the LMC, in orderto discuss the concerns delegated to them by the LMC Steering Committee, to check and report on its status, torecommend measures in order to address such concerns, and to carry out these recommendations according tothe function of the different taskforces in coordination with the departments concerned.

The purposes of the Committee are:

a) To provide means for discussion of mutual problems that may arise from time to time;b) To provide a direct channel of communication between the employees and the management;

48

c) To provide a means for constructive cooperation in increasing the level of performance and efficiency ofemployees to improve productivity; and

d) To discuss and resolve other matters that may be mutually agreed upon by the members.

C. BOARD MEETINGS & ATTENDANCE

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

Before the year – There is a minimum number of meetings required under the Company’s By-laws.

2) Attendance of Directors in 2016 (as updated through the Amended Advisement Letter dated January 6, 2017):

Board Name Date ofElection5

No. ofMeetings

Held duringthe year

No. ofMeetingsAttended

%

Chairman Enrique K. Razon Jr. April 20, 2017 28 28 100Member Jon Ramon Aboitiz April 20, 2017 28 28 100Member Jose C. Ibazeta April 20, 2017 28 28 100Member Stephen A. Paradies April 20, 2017 28 28 100Member Andres Soriano III April 20, 2017 28 28 100Independent Octavio Victor R. Espiritu April 20, 2017 28 28 100Independent Joseph R. Higdon April 20, 2017 28 28 100

Jan 5 Feb 5 Feb 9 Feb 23 Mar 7 Mar 14 Mar 22 Mar 31 Apr 21* May 17 May 24 June 17 June 30

EnriqueK. Razon

Jr.

P P P P P P P P P P P P P

JonRamonAboitiz


Jose C.Ibazeta


StephenA.

Paradies


AndresSoriano

III


OctavioR.

Espiritu


Joseph R.Higdon


Jul 27 Aug 15 Aug 19 Sep 8 Sep 20 Sep 30 Oct 3 Oct 14 Oct 27 Nov 17 Nov 23 Dec 16 Dec 23

EnriqueK. Razon

Jr.


JonRamonAboitiz


Jose C.Ibazeta


StephenA.

Paradies


AndresSoriano

III


OctavioR.

Espiritu


Joseph R.Higdon


5 April 20, 2017 was when a Regular Board Meeting, Annual Stockholders Meeting and Organizational Board Meeting were conducted.

49

3) Do non-executive directors have a separate meeting during the year without the presence of any executive? Ifyes, how many times?

Yes, at least four (4) times.

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

Yes, 2/3 votes are required for major decisions pursuant to the relevant provisions of the Corporation Code andother applicable laws, rules and regulations.

5) Access to Information

(a) How many days in advance are board papers6 for board of directors meetings provided to the board?

At least five (5) business days, based on Revised Manual on Corporate Governance (RMCG), Part IV, clause4.1.

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

Yes. Part IV on SUPPLY OF ADEQUATE AND TIMELY INFORMATION of ICTSI’s RMCG, it is provided that:

“4.1 Directors should be provided with complete, adequate and timely information prior to Board meetingson an on-going basis.

4.2 Management shall have an obligation to supply the Board with such information. The Board shall haveseparate and independent access to the senior management of ICTSI, including the Corporate Secretary.

4.3 The Board may provide a procedure for directors, either individually or as a group, in the furtherance oftheir duties, to take independent professional advice concerning matters pending before the Board, ifnecessary, at ICTSI’s expense.”

(c) State the policy of the role of the company secretary. Does such role include assisting the Chairman inpreparing the board agenda, facilitating training of directors, keeping directors updated regarding anyrelevant statutory and regulatory changes, etc?

Yes . The RMCG provides:

3.1.1 The Corporate Secretary shall gather and analyze all documents, records and other informationessential to the conduct of his duties and responsibilities to the Corporation. He/she shall advise andmonitor that Board procedures are being followed and applicable rules and regulations are compliedwith.

3.1.2 The Corporate Secretary shall deal with the Board, Management, stockholders and otherstakeholders professionally and objectively. To the extent feasible, the Corporate Secretary shallhave sufficient administrative skills, interpersonal skills, legal skills and financial skills as mayreasonably be necessary to allow him/her to perform his duties and responsibilities as CorporateSecretary.

3.1.3 The Corporate Secretary shall be part of the scheduling of the different Board or stockholdersmeetings. He/she shall prepare a schedule of regular Board meetings for the current year incoordination with the Board. He/she should send notices to all Directors before each Board meetings.

3.1.4 The Corporate Secretary shall serve as an adviser to the Directors and assist the Board in makingbusiness judgment in good faith and in the performance of their responsibilities and obligations asdirectors of the Corporation.

6 Board papers consist of complete and adequate information about the matters to be taken in the board meeting. Information includesthe background or explanation on matters brought before the Board, disclosures, budgets, forecasts and internal financial documents.

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3.1.5 The Corporate Secretary shall attend and take the minutes of all Board meetings, except whenjustifiable causes, such as, illness, death in the immediate family and serious accidents, preventhim/her from doing so. In his absence, the Assistant Corporate Secretary or a person designated bythe Board shall take the minutes of the meeting.

3.1.6 The Corporate Secretary shall serve as liaison officer with the SEC with respect to compliance withSEC requirement pertaining to this Manual. The Corporate Secretary shall also monitor thecompliance of this Manual and shall report his findings to the Board.

3.1.7 If the Corporate Secretary is also the Compliance Officer, he/she shall perform all the duties andresponsibility of said officer as provided hereunder and other existing laws, rules and regulations.

3.1.8 The Corporate Secretary shall be loyal to the mission, vision and objectives of the corporation; workfairly and objectively with the Board, Management and stockholders; have a working knowledge ofthe operations of the corporation; and ensure that all Board procedures, rules and regulations arestrictly followed by the members.

3.1.9 The Corporate Secretary shall issue a certification every January 30th of the year on the attendanceof Directors in meetings of the Board, countersigned by the Chairman of the Board.

(d) Is the company secretary trained in legal, accountancy or company secretarial practices? Please explain shouldthe answer be in the negative.

Yes. The company / corporate secretary and the assistant corporate secretaries are lawyers. One of theassistant corporate secretaries is both an accountant and a lawyer. Please see Annual Report (SEC 17 – A),thus:

Atty. Rafael Durian has been ICTSI’s Corporate Secretary since 1987. He is likewise the Corporate Secretary ofInternational Container Terminal Holdings, Inc.; the Corporate Secretary and a Director 68 of Razon Industries,Inc., Sureste Realty Corp. and Provident Management Group, Inc.; and a Trustee of the ICTSI Foundation, Inc.Atty. Durian earned his Bachelor of Laws degree from San Beda College and is a member of the Integrated Barof the Philippines. He is a Partner at Cruz Durian Alday & Cruz-Matters Law Office.

Atty. Benjamin Gorospe was appointed as the Asst. Corporate Secretary of ICTSI on September 17, 2013. Heis also the Global Head for Tax and Regional Legal Manager for the Americas of ICTSI. Moreover, Atty. Gorospeis a Director and the Corporate Secretary of Davao Integrated Port & Stevedoring Services Corp., MindanaoInternational Container Terminal Services, Inc., Cordilla Properties Holdings, Inc.; and a Director of ICTSI FarEast Pte. Ltd. Atty. Gorospe joined ICTSI in 2003 as a Tax Manager. Prior to this, he worked with the TaxDepartment of SGV & Co. for five (5) years and with its Audit Department for one (1) year. Atty. Gorospecompleted his law degree at the University of the Philippines, Diliman. He is also a Certified Public Accountant.He graduated from Xavier University with a degree of Bachelor of Science in Commerce, Major in Accounting.

Atty. Benny Tan, also an Asst. Corporate Secretary, is the managing partner of the law firm Picazo Buyco TanFider & Santos. He is a director and corporate secretary of Prime Metroline Holdings, Inc., Bravo InternationalPort Holdings Inc., Alpha International Port Holdings Inc., Eiffle House Inc., Cyland Corp., OSA IndustriesPhilippines Inc. and Negros Perfect Circles Food Corp. He is also a director of the following companies: CelestialCorporation, Skywide Assets Ltd., Monte Oro Minerals (SL) Ltd., and Dressline Holdings Inc. and its subsidiariesand affiliates. He is the corporate secretary of several companies including: Mapfre Insular InsuranceCorporation, Sureste Properties, Inc., Bloomberry Resorts and Hotels Inc.*, Lakeland Village Holdings Inc.,Devoncourt Estates Inc., and Pilipinas Golf Tournaments, Inc. He is the assistant corporate secretary of ICTSI,ICTSI Ltd., Apex Mining Company Inc.* and Monte Oro Resources & Energy Inc. Atty. Tan holds a Bachelor ofLaws, cum laude, from the University of the Philippines College of Law and a Bachelor of Arts Major in PoliticalScience, cum laude, from the University of the Philippines College Iloilo. Atty. Tan placed third in the 1982Philippine Bar exams.


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(e) Committee Procedures

Disclose whether there is a procedure that Directors can avail of to enable them to get information necessaryto be able to prepare in advance for the meetings of different committees:

Yes / No

Committee Details of the procedures

Executive N/AAudit Notice and Agenda of the meeting is provided within a reasonable

time prior to the Committee meeting.Nomination Notice and Agenda of the meeting is provided within a reasonable

time prior to the Committee meeting.Remuneration Notice and Agenda of the meeting is provided within a reasonable

time prior to the Committee meeting.Risk Management Notice and Agenda of the meeting is provided within a reasonable

time prior to the Committee meeting.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

Directors may seek professional advice. Sec III of the Audit Committee (AC) Charter provides that theAudit Committee has authority to retain independentcounsel, accountants, or others to advise the committee orto assist in the conduct of an investigation.

7) Change/s in existing policies

Indicate, if applicable, any change/s introduced by the Board of Directors (during its most recent term) on existingpolicies that may have an effect on the business of the company and the reason/s for the change:

Existing Policies Changes Reason

Code of Business Conduct (Code) ICTSI consolidated its businessprinciples and policies in order tocreate a framework, which will bethe basis on how it will operate itsbusiness all over the world.

To set out what is expected ofevery Director, officer,employee and businesspartner working with or onbehalf of ICTSI. The Codeserves as a statement of theCompany’s beliefs, valuesand commitment.

Anti-Bribery Compliance Policy andProcedure (Policy)

ICTSI consolidated its businessprinciples and policies in order tocreate a framework, which will bethe basis on how it will operate itsbusiness all over the world.

To provide further guidanceto ICTSI’s Directors, officers,employees, business partnersand third parties acting onbehalf of the Company, inthat this Policy sets outoperating procedures

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specifically targeted atcombating corruption risks inorder to ensure that ICTSI isoperating in compliance withapplicable regulations. ThisPolicy should be read inconjunction with the Code.

D. REMUNERATION MATTERS

1) Remuneration Process

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

A Compensation and Remuneration Committee was organized by the Board to establish a formal and transparentprocedure for developing a policy on remuneration of Directors and officers to ensure that their compensation isconsistent with the Company’s culture, strategy and the business environment in which it operates. The Chairmanof the Compensation and Remuneration Committee is Mr. Andres Soriano III with Mr. Stephen A. Paradies andMr. Octavio V. Espiritu as members.

Based on the Compensation and Remuneration Committee Charter, the Compensation Policies and programs forthe directors, President and other executives are:

Assist the Board in setting the remuneration policy for directors and executives. Determine any criteria necessary to measure the performance of management in discharging executive

functions and responsibilities. Review and monitor ICTSI’s remuneration and incentive framework applying to directors and executives

and the associated strategies, systems, policies and processes implemented and reported. Approve the remuneration and incentive awards of executives based on the recommendations of the

President and consistent with the remuneration policy.

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 thecompensation of Executive and Non-Executive Directors is calculated.

The members of the Board receive directors’ fees as compensation in accordance with the Company’s By-laws.There are no material terms of any other arrangements or contracts where any Director of ICTSI was compensatedor is to be compensated, directly or indirectly, in 2015, 2016 or in the coming year, for any service provided as aDirector.

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 ofStockholders’ Approval

The members of the Board receive Director’s feesas compensation in accordance with theCompany’s By-laws. There are no material termsof any other arrangements or contracts whereany Director of ICTSI was compensated or is to becompensated, directly or indirectly, in 2014, 2015or in the coming year, for any service provided asa Director.

A Compensation and Remuneration Committeewas organized by the Board to establish a formal

April 20,2017

The acts of the Board are ratified and theAnnual Report (where Directors’ fees aredisclosed) is approved during the AnnualStockholders Meeting (ASM).

53

and transparent procedure for developing apolicy on remuneration of Directors and officersto ensure that their compensation is consistentwith the Company’s culture, strategy and thebusiness environment in which it operates. TheChairman of the Compensation andRemuneration Committee is Mr. Andres SorianoIII with Mr. Stephen A. Paradies and Mr. OctavioV. Espiritu as members.

3) Aggregate Remuneration

The aggregate compensation paid to the Chairman of the Board and President, and four (4) highest paid executiveofficers named below, as a group, for 2016 amounted to US$2.2 million (2015: US$4.3 million). The estimated amountof compensation expected to be paid in 2017 to the Chairman of the Board and President and four (4) highest paidexecutive officers as a group, amounted to US$2.3 million.

Name and Principal Position Year SalaryBonus and

Others(a) Total(b)

Enrique K. Razon, Jr.Chairman of the Board and PresidentMartin O’NeilExecutive Vice-PresidentRafael D. Consing, Jr.Senior Vice-President and Chief Financial OfficerVivien F. MiñanaVice-President and Senior Administration

OfficerJose Joel M. SebastianSenior Vice-President, FinanceChairman of the Board and President and four

(4) highest paid executive officers, as a group2017

(Estimate) US$0.5M US$1.8M US$2.3M2016 (Actual) 0.4M 1.8M 2.2M2015 (Actual) 0.5M 3.8M 4.3M

All officers and Directors, as a group,Unnamed(c)

2017(Estimate) 1.0 5.9 6.9M

2016 (Actual) 0.9 5.8 6.7M2015 (Actual) 1.1 8.3 9.4M

(a) Mainly includes non-cash compensation based on Stock Incentive Plan paid out of the allocated Treasury Shares of ICTSI(b) Includes total compensation paid in the Philippines by the registrant and its subsidiaries(c) Including four (4) highest paid executive officers

4) Stock Rights, Options and Warrants

(a) Board of Directors

ICTSI’s Directors do not hold any outstanding warrants or options as of December 31, 2015. There were noadjustments or amendments made on the options previously awarded to any Director of ICTSI.

Complete the following table, on the members of the company’s Board of Directors who own or are entitledto stock rights, options or warrants over the company’s shares:

Director’s NameNumber of Direct

Option/Rights/Warrants

Number ofIndirect

Option/Rights/Warrants

Number ofEquivalent

Shares

Total % fromCapital Stock

N/A N/A N/A N/A N/A

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(b) Amendments of Incentive Programs

Indicate any amendments and discontinuation of any incentive programs introduced, including the criteriaused in the creation of the program. Disclose whether these are subject to approval during the AnnualStockholders’ Meeting:

Incentive Program Amendments Date ofStockholders’ Approval

An Employees Stock OptionPlan (ESOP) was established in1991 under which shares fromauthorized but unissued capitalstock were set aside forsubscription by Directors,officers, and employees. AStock Option Committeecomposed of three (3) Directorsdetermined the number ofshares to which a particularrecipient was entitled. Thesubscription price under theESOP was ninety five percent(95%) of the issue price in theinitial public offering of theCompany and is subject torevision by Stock OptionCommittee from time to time.

In January 2007, Boardapproved the amendment ofESOP to convert it into arestricted stock plan called the“Stock Incentive Plan” (the“SIP”). The amendment of theESOP into an SIP was approvedby the stockholders at aspecial meeting held in April2007.

Under the SIP, shares from ourtreasury will be granted to aparticipant by a resolution ofStock IncentiveCommittee. The Committeedetermines who and howmany will be the awardedshares under the SIP.

Descriptions and explanationsof the above transactions arefurther disclosed in Note 18,Share-based Payment Plan, tothe Annual AuditedConsolidated FinancialStatements.

April 12, 2007

5) Remuneration of Management

Identify the five (5) members of management who are not at the same time executive directors and indicate thetotal remuneration received during the financial year:

Name of Officer/Position Total Remuneration

Enrique K. Razon, Jr.President

The aggregate compensationpaid to the Chairman of theBoard and President, and four (4)highest paid executive officersnamed below, as a group, for2016 amounted to US$2.2 million(2015: US$4.3 million). Theestimated amount ofcompensation expected to bepaid in 2017 to the Chairman ofthe Board and President and four

Martin O’neilExecutive Vice President

Rafael D. Consing, Jr.SVP & Chief Financial Officer and Compliance Officer

55

Vivien F. MiñanaVice-President and Senior Administration Officer

(4) highest paid executive officersas a group, amounted toUS$2.3 million.

Jose Joel M. SebastianSVP, Finance

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 thepower/authority delegated to it by the Board:

(i) Audit Committee

In accordance with the RMCG, ICTSI’s Board created the Audit Committee. The organization, authorityand responsibilities of this Committee are embodied in the Audit Committee Charter. As stated in itsCharter, the Company’s Audit Committee is responsible for assisting the Board in fulfilling its oversightresponsibilities to the shareholders relating to the company’s financial statements and financial reportingprocess, governance and internal control systems, the internal and external audit process, and thecompany’s process for monitoring compliance with contracts, laws and regulations and the code ofconduct. The Audit Committee maintains independence from Management and the controllingstockholders. The Committee is comprised of three (3) Directors, including one (1) Independent Directorwho serves as the Committee Chairman. Such Committee reports to the Board and is required to meetat least four (4) times a year. As of the date of this report, the Audit Committee Chairman is Mr. OctavioVictor R. Espiritu who serves with Mr. Jon Ramon Aboitiz and Mr. Stephen A. Paradies as members.

(ii) Corporate Governance Committee

The Corporate Governance Committee was created in accordance with the new Manual on CorporateGovernance which will assist the Board in the performance of its corporate governance responsibilities.The Chairman of the Corporate Governance Committee is Joseph R. Higdon with Mr. Stephen A. Paradiesand Andres Soriano III as members.

i. Nomination Sub-Committee

The Board organized the Nomination Committee to review and evaluate the qualifications of allpersons nominated to the Board and other appointments that require Board approval and toassess the effectiveness of the Board’s processes and procedures in the election or replacementof Directors. The Nomination Committee is composed of Mr. Stephen A. Paradies as Chairmanand Mr. Jose C. Ibazeta and Mr. Octavio V. Espiritu as members.

ii. Remuneration Sub-committee

A Remuneration Committee was organized by the Board to establish a formal and transparentprocedure for developing a policy on remuneration of Directors and officers to ensure that theircompensation is consistent with the Company’s culture, strategy and the business environmentin which it operates. The Chairman of the Remuneration Committee is Mr. Andres Soriano IIIwith Mr. Stephen A. Paradies and Mr. Octavio V. Espiritu as members.

(iii) Board Risk Oversight Committee

The Board organized the Risk Management Committee to assist on its oversight of the company’s riskmanagement framework, including key strategic and operational risks as well as the adequacy andeffectiveness of its risk management system. The Risk Management Committee is composed of Mr.Stephen A. Paradies as Chairman and Mr. Octavio Victor R. Espiritu and Mr. Jon Ramon Aboitiz as

56

members.

(iv) Related Party Transaction Committee

The Related Party Transaction Committee was created in accordance with the new Manual on CorporateGovernance which will assist the Board to review the integrity and transparency of related partytransactions between and among ICTSI and its joint ventures, subsidiaries, associates, affiliates, majorstockholders, officers and directors including their spouses, children and dependent siblings and parents,and interlocking director relationships by members of the Board to protect the interest of ICTSI. TheRelated Party Transaction Committee is composed of Mr. Jon Ramon Aboitiz as Chairman and Mr. OctavioVictor R. Espiritu and Mr. Stephen A. Paradies as members.

2) Committee Members

(a) Executive Committee

Office Name Date ofAppointment

No. ofMeetings

Held


%

Length ofService in

theCommittee

Chairman N/A N/A N/A N/A N/A N/AMember (ED) N/A N/A N/A N/A N/A N/AMember (NED) N/A N/A N/A N/A N/A N/AMember (ID) N/A N/A N/A N/A N/A N/AMember N/A N/A N/A N/A N/A N/A

Explanation: There is no Executive Committee.

(b) Audit Committee

Office Name Date ofAppointment*

No. ofMeeting

s Held

No. ofMeeting

sAttende

d

%

Length ofService in

theCommittee

Chairman (ID) Octavio Victor R. Espiritu April 21, 2016 4 4 100% 15Member (NED) Jon Ramon Aboitiz April 21, 2016 4 3 75% 7Member (NED) Stephen A. Paradies April 21, 2016 4 4 100% 15

*Reappointed during the Organizational Meeting last April 20, 2017

Disclose the profile or qualifications of the Audit Committee members.

The following Directors were re-appointed as members of the Audit Committee last April 20, 2017:

Octavio Victor R. Espiritu, age 73, Filipino

Mr. Espiritu has been an independent Director of ICTSI* since April 2002 and has served as the Chairman ofthe Audit Committee; a member of the Nomination Committee since February 2011; and the Chairman of theRisk Management Committee since April 2015. He is also the Chairman of GANESP Ventures, Inc. and aDirector of Bank of the Philippine Islands*, Philippine Dealing System Holdings Corp. and Subsidiaries, and PhilStratbase Consultancy Inc.

Mr. Espiritu was a three (3)-term former President of the Bankers Association of the Philippines; a formerPresident and Chief Executive Officer (CEO) of Far East Bank and Trust Company; and the Chairman of theBoard of Trustees of the Ateneo de Manila University for fourteen (14) years.

Mr. Espiritu received his primary, secondary, and college education from the Ateneo de Manila University,where he obtained his AB Economics degree in 1963. In 1966, he received his Master’s Degree in Economics

57

from Georgetown University in Washington DC, USA.


Jon Ramon Aboitiz, age 67, Filipino

Mr. Aboitiz has been a Director of ICTSI* since April 2008 and was appointed as a member of the ICTSI AuditCommittee in April 2010.

Mr. Aboitiz is also the Chairman of Aboitiz & Co., Inc., and Aboitiz Equity Ventures, Inc.*, an investment andmanagement enterprise, engaged in numerous and diverse business concerns ranging from power generationand distribution, banking and financial services, real estate development, construction, food, ship buildingand cement. He became the President of Aboitiz & Company in 1991 until 2008. He was the President andChief Executive Officer (CEO) of Aboitiz Equity Ventures, Inc.* from 1993 – 2008.

Presently, he holds various positions in the Aboitiz Group such as the Vice Chairman of Aboitiz Power Corp.*;the Vice Chairman of Union Bank of the Philippines*; the Chairman of the bank’s committees, namely theExecutive Committee, and the Risk Management Committee; and the Vice Chairman of the Compensationand Remuneration Committee. He is a Director and Chairman of the Audit Committee of Bloomberry ResortsCorporation*; the Vice President and a Trustee of the Ramon Aboitiz Foundation; a Trustee and a member ofthe Executive Committee of the Philippine Business for Social Progress; and a member of the Board of Advisorsof the Coca-Cola Export Corporation (Philippines).

Mr. Aboitiz began his career with the Aboitiz Group in 1970, right after graduating from the Sta. ClaraUniversity, California, with a degree of BS Commerce, major in Management.


Stephen A. Paradies, age 63, Filipino

Mr. Paradies has been a Director of ICTSI* since December 1987. He has been the Chairman of the NominationCommittee of ICTSI since February 2011; and a Director of ICTSI Warehousing, Inc. Moreover, Mr. Paradies isthe Senior Vice President-Finance/Treasurer of Aboitiz & Company, Inc.; a Trustee of Bloomberry Foundation,Inc.; a Director, President and Chief Executive Officer of AEV Properties, Inc.; and a Director of UnionProperties, Inc., Union Bank of the Philippines *, and NapaGapa Beverages, Inc.

Mr. Paradies received his Bachelor of Science degree, major in Business Management, from the Santa ClaraUniversity, California, USA.


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

External Audit (from Section V.E of the Audit Committee Charter)

1. Prior to the commencement of the audit, discuss with the external auditors the nature, scope andexpenses of the audit, including coordination of audit efforts with internal auditing to secure propercoverage and minimize duplication of efforts.

2. Review the performance of the external auditors, rotation process and exercise final approval ontheir appointment or discharge.

3. Review reports submitted by external auditors.4. Evaluate and determine the non-audit work, if any, of the external auditor, and review periodically

the non-audit fees paid to the external auditor in relation to ICTSI’s overall consultancyexpenses. The Audit Committee shall disallow any non-audit work that will conflict with his dutiesas an external auditor or may pose a threat to his independence. The non-audit work, if allowed,should be disclosed in the company’s annual report as may be required by law.

5. On a regular basis, meet separately with the external auditors to discuss any matters that thecommittee or auditors believe should be discussed privately.

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(c) Corporate Governance Committee


No. ofMeetings

Held


%

Length ofService in

theCommittee

Chairman (ID) Joseph R. Higdon April 20, 2017 - - N/A 2 monthsMember (NED) Stephen A. Paradies April 20, 2017 - - N/A 2 monthsMember (NED) Andres Soriano III April 20, 2017 - - N/A 2 months

*Appointed during the Organizational Meeting last April 20, 2017

(d) Nomination Sub-committee


No. ofMeetings

Held


%

Length ofService in

theCommittee

Chairman Stephen A. Paradies April 21, 2016 2 2 100 6Member (NED) Jose C. Ibazeta April 21, 2016 2 2 100 6Member (ID) Octavio V. Espiritu April 21, 2016 2 2 100 6


(e) Remuneration Sub-committee


No. ofMeetings

Held


%

Length ofService in

theCommitte

eChairman Andres Soriano III April 21, 2016 2 2 100 7*

Member (NED) Stephen A. Paradies April 21, 2016 2 2 100 11**

Member (ID) Octavio V. Espiritu April 21, 2016 2 2 100 5***

*Reappointed during the Organizational Meeting last April 20, 2017*2006, 2011-2015**2006 – 2010***2004 – 2015

(f) Board Risk Oversight Committee

Office Name Date ofAppointment

No. ofMeetings

Held


%

Length ofService in

theCommittee*

Chairman Stephen A. Paradies April 21, 2016 4 4 100 2Member (NED) Jon Ramon Aboitiz April 21, 2016 4 4 100 2Member (ID) Octavio V. Espiritu April 21, 2016 4 4 100 2


(g) Related Party Transaction Committee


No. ofMeetings

Held


%

Length ofService in

theCommittee

Chairman Jon Ramon Aboitiz April 20, 2017 - - N/A 2 monthsMember (ID) Octavio V. Espiritu April 20, 2017 - - N/A 2 months

59

Member (NED) Stephen A. Paradies April 20, 2017 - - N/A 2 months*Appointed during the Organizational Meeting last April 20, 2017

(h) Others (Specify)

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

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 N/A N/AAudit N/A N/ANomination Became a sub-committee under

Corporate Governance CommitteeTo comply with the new Manual onCorporate Governance

Remuneration Became a sub-committee underCorporate Governance Committee

To comply with the new Manual onCorporate Governance

Risk Management Change of name to Board RiskOversight Committee

Realignment of positions


Others (specify)Corporate Governance

Related PartyTransaction

Creation of Corporate GovernanceCommittee

Creation of Related PartyTransaction Committee



Explanation: There are no changes in the composition of the Committees.

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 N/A N/A

Audit Assisted the Board in fulfilling itsoversight responsibilities to theshareholders relating to thecompany’s financial statements andfinancial reporting process,governance, and internal controlsystems, the internal and externalaudit process, and the company’sprocess for monitoring compliancewith contracts, laws and regulationsand the code of conduct.

Issues related to company’s financialstatements and financial reportingprocess, governance and internalcontrol systems, the internal andexternal audit process, and thecompany’s process.

Nomination Reviewed and evaluated of thequalifications of all persons

Issues related to qualifications of allpersons nominated to the Board and

60

Name of Committee Work Done Issues Addressed

nominated to the Board and otherappointments that require Boardapproval and to assess theeffectiveness of the Board’sprocesses and procedures in theelection or replacement of Directors.

other appointments that requireBoard approval and to assess theeffectiveness of the Board’sprocesses and procedures in theelection or replacement of Directors.

Remuneration Established a more transparentprocedure for developing a policy onremuneration of Directors andofficers to ensure that theircompensation is consistent with theCompany’s culture, strategy and thebusiness environment in which itoperates.

Issues related to a more transparentprocedure for developing a policy onremuneration of directors andofficers to ensure that theircompensation is consistent with theCompany’s culture, strategy and thebusiness environment in which itoperates.

Risk Management Assisted the Board of Directors in itsoversight of the company’s riskmanagement framework, includingkey strategic and operational risks aswell as the adequacy andeffectiveness of its risk managementsystem.

Issues related to ICTSI’s riskgovernance framework, riskassessment and risk managementpractices, and the guidelines,policies and processes for riskassessment and risk management.

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 improvementor enforcement of effective governance for the coming year.

Name of Committee Planned Programs Issues to be AddressedExecutive N/A N/A

Audit

Oversight of financialreporting and disclosuresprocess

Monitoring the internalcontrol process

Oversight of performance ofinternal audit function

Oversight of selection,performance andindependence of externalauditors

Oversight of compliance withethics, laws and regulations

Reporting to the Board andshareholders about itsresponsibilities, activities,compliance certification,issues and results of annualself-assessment

Maintain necessary technical

To comply with SEC MemoNo. 4

Integrity of financialreporting

Maintaining a sound controlenvironment

More complex regulations Emerging risks

61

knowledge to dischargeresponsibilities effectively.

Nomination

Finalized Charter and establishsuccession plan for Directors.

To ensure compliance with SECrestrictions on number of serviceyears.

Remuneration

Finalized charter Establish a formal and transparentprocedure for determining theremuneration of Directors andofficers

Risk Management

Establish, implement and monitor anEnterprise Risk Management (ERM)policy and formalize the ERMCommittee who shall be responsiblefor, but not limited to: Recommend approval of the

ERM Policy and relatedguidance

Recommend approval of ERMpriorities, tolerance,measures, strategies andaction plans.

Assists the Board RiskOversight Committee (BROC)of the BOD in improving theERM Policy.

Supervises the design andimplementation ofappropriate systems, toolsand methodology to supportthe ERM processes and otherrisk management activities.

Establish a procedure for assessingICTSI’s risk governance framework,and its risk management practices

Others (specify)

Corporate Governance

Related PartyTransaction

Recently established on April 20,2017

Recently established on April 20,2017

F. RISK MANAGEMENT SYSTEM

1) Disclose the following:

(a) Overall risk management philosophy of the company:

ICTSI and all its subsidiaries (ICTSI Group) identify and manage its risks to support the Company’s vision,mission, goals and objectives as set out in the respective subsidiary’s strategic plans. The ICTSI Grouprecognizes that risk cannot be eliminated, rather, it will ensure that existing and emerging risks are identifiedand managed within acceptable risk tolerances.

The ICTSI Board of Directors is committed to establishing an organization that ensures risk management is anintegral part of all its activities and a core capability.

The executive management of ICTSI fully supports the implementation of the Enterprise Risk Management

62

(ERM) Policy approved by the ICTSI Board of Directors and is responsible for the development of ERMprocesses and the implementation of risk reduction strategies. As stated in the ERM Policy, ICTSI establishedthe ERM Committee, consists of the interim Chief Risk Officer who is also the committee chairman, andmembers of the senior management. In addition, there is an existing oversight committee at the board levelcalled the Board Risk Oversight Committee (BROC).

(b) A statement that the directors have reviewed the effectiveness of the risk management system andcommenting on the adequacy thereof;

Under the Enterprise Risk Management Committee Charter, it stated that it is the responsibility of the ERMCommittee to monitor and evaluate the effectiveness of the company’s risk management processes andpolicies in addressing the identified risks. In this regard, the ERM Committee obtains and reviews thefollowing:

1) A quarterly report from Senior Management/ ERM Committee regarding major risk issues as disclosed inthe quarterly and annual Financial Statements filed with the SEC.

2) Quarterly report from the Audit & Compliance Group regarding results of evaluation of risk managementactivities and monitoring of concession compliance risks

3) Annual report from External Auditor regarding the results of evaluation of financial statement risk

Comments on the adequacy and effectiveness thereof are discussed during the quarterly / annual AuditCommittee meetings.

(c) Period covered by the review; Q1 to Q4 2016

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

(Quarterly by Senior Management/ERM Committee and Audit and Compliance, while annually by ExternalAuditor). The criteria for assessing effectiveness is how well the risk management activities prevent orminimize the likelihood of the risk happening and / or impact of the risk, should it happen.

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

2) Risk Policy

(a) Company

Give a general description of the company’s risk management policy, setting out and assessing the risk/scovered by the system (ranked according to priority), along with the objective behind the policy for each kindof risk:

Risk Exposure Risk Management Policy ObjectiveConcession ComplianceRisk

Must manage & monitor risk Ensure that structures are in placeto monitor and ensure that allconcession commitments arecomplied with.

Business interruptionrisk

Must manage & monitor risk Prevent or, at least, minimize thenegative impact of businessinterruptions (natural / mad-made disasters, system /equipment failure) that mayresult to customer dissatisfaction,damage to reputation, lostrevenue or operational shutdown.

Market/Economicconditions andCompetition

Must manage & monitor risk To maximize opportunities andminimize risk of failure to assessand manage the impact of

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Risk Exposure Risk Management Policy Objectiveeconomic trends, marketcondition including competition.

Failure to meet all of theDebt Covenants &Undertakings

Must manage & monitor risk To prevent an event of defaultthat leads to cancellation ofcommitments and acceleration ofpayment.

Foreign Currency andinterest rate risks

Must manage & monitor risk To prevent or minimize losses onoutstanding hedges

(b) Group

Give a general description of the Group’s risk management policy, setting out and assessing the risk/s coveredby the system (ranked according to priority), along with the objective behind the policy for each kind of risk:

The company establishes the Enterprise Risk Management (ERM) system to be readily responsive to thedynamic business environment and to be able to achieve the following:

Deal effectively with potential future events that create uncertainty associated with risks andopportunity, enhancing the capacity to build shareholder value.

Enhance risk response decisions in a manner that reduces the likelihood of downside outcomes andincreases the upside outcomes.

Promote a culture across the organization that provides a common awareness and understanding of riskmanagement discipline to manage greater risks effectively while optimizing returns.

Embrace an open environment of sharing learnings and best practices on cross- enterprise risk issuesthroughout the organization to better manage risks.

Ensure that the evaluation of risk is a continuing and integral part of the management process andconsistent with the management risk philosophy.

(c) Minority Shareholders

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

Risk to Minority Shareholders

NONE

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 thecompany:

Risk ExposureRisk Assessment

(Monitoring and MeasurementProcess)

Risk Management and Control(Structures, Procedures, Actions

Taken)ConcessionCompliance Risk

Structure for monitoringcompliance in place; Quarterlycompliance reporting to AuditCommittee in place.

Risk measured in terms of impactto the business and the likelihoodof occurrence using the Company’sERM Assessment Rating Table;

Establish adequate monitoringcontrols

Compliance monitored andvalidated by Audit & ComplianceGroup;

Annual compliance audit by thePhilippine Port Authority – nomaterial exception noted in2012.

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Business interruptionrisk


Obtain adequate insurancecover

Establish adequate controls toprevent / minimize riskso Implement Business

Continuity Plan;o Monitor system availability;o Establishment of disaster

recovery siteo Existence of safety

procedures and emergencyresponse team

o Annual training/drill on FirePrevention & SuppressionSeminar

o Strict Compliance toDangerous Goods Handlingcircular and rulings

o Inspect containers forcompliance with the labelingrequirements of the Hazard

Market/Economicconditions andCompetition


Periodic strategic andoperational meetings held bycorporate, regional and localexecutive management.

Established corporate andregional business developmentfunction.

Decentralized groupmanagement and reportingstructure with extensiveauthority delegated to theregional operating units.

Failure to meet all ofthe Covenants &Undertakingsconstitutes an Eventof Default that leadsto cancellation ofcommitments andacceleration ofpayment.

Risk measured in terms of impactto the business and the likelihoodof occurrence using the Company’sERM Assessment Rating Table;Quarterly monitoring andreporting of compliance with debtcovenants

Quarterly review of ratios andundertakings, and a monthly testingof financial ratios to include plannedacquisitions and extra-ordinarycapital expenditures

Failure to limit MTMand realized losses onoutstanding hedges

Risk measured in terms of impactto the business and the likelihoodof occurrence using the Company’sERM Assessment Rating Table;Quarterly monitoring andreporting of compliance with debtcovenants

Conduct monthly MTM and realizedcash report and submit to SeniorManagement

(b) Group

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

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Risk ExposureRisk Assessment(Monitoring and MeasurementProcess)

Risk Management and Control(Structures, Procedures, ActionsTaken)

Foreign ExchangeRisks

Monitored quarterly The company enters into foreigncurrency forwards and/ or crosscurrency swaps agreements tomanage its exposure to foreigncurrency fluctuations.

Interest rate risk Monitored quarterly On a limited basis, the Group entersinto interest rate swaps agreementsin order to manage its exposure tointerest rate fluctuations.

Liquidity risk Monitored quarterly The Group maintains strict control ofits cash and ensures that excess cashmaintained by subsidiaries areupstreamed timely to the ParentCompany. The Group also monitorsand receivables and payables toensure that these are at optimallevels. It also regularly evaluates isactual and projected cash flows andcontinually assesses the condition ofthe financial market to pursue fundraising initiatives.

(c) Committee

Identify the committee or any other body of corporate governance in charge of laying down and supervisingthese control mechanisms, and give details of its functions:

Committee/Unit Control Mechanism Details of its Functions

Board Risk OversightCommittee Quarterly committee meeting

Oversees the risk managementactivities of the Company

Authorizes the ICTSI’s ERMPolicy and any subsequentmodifications.

Examines and assesses thereports on the effectiveness ofthe ERM process and themanagement of key risks asprovided by the President orChief Risk Officer (CRO).

Guides the BOD in supervisingthe Company’s corporategovernance process.

Authorizes ICTSI’s desired stateof the ERM framework.

Evaluates the sufficiency andeffectiveness of the ERMprocess and the management ofkey risks.

ERM Committee Quarterly committee meeting

Recommend approval of theERM Policy and relatedguidance

Recommend approval of ERMpriorities, tolerance, measures,strategies and action plans.

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Assists the Risk ManagementCommittee of the BOD inimproving the ERM Policy.

Supervises the design andimplementation of appropriatesystems, tools andmethodology to support theERM processes and other riskmanagement activities.

Identifies the owners of specificrisks (e.g., Risk Owners and RiskManagers) and the enablers ofthe ERM process (e.g., ERMChampions).

Ascertains the sufficiency andeffectiveness of thecomponents of the riskinfrastructure that are in placefor managing risk, whichincludes policies, processes,people, management reports,methodologies, systems anddata.

Ascertains that suitableperformance and rewardsystems are in place to achieveERM objectives.

Reviews the roles andresponsibilities of theEnterprise Risk ManagementDepartment.

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;

As set forth in the company’s Internal Control policy:

Internal Control is a process effected by people (board of directors / executive board, management and staff)to provide reasonable assurance regarding the achievement of the company’s objectives in the followingcategories:• Effectiveness and efficiency of operations• Reliability of financial reporting• Safeguarding of Assets• Compliance with applicable laws and regulations

(b) A statement that the directors have reviewed the effectiveness of the internal control system and whetherthey consider them effective and adequate;

The Board of Directors, through the Audit Committee, review the adequacy and effectiveness of the internalcontrol system as one of the responsibilities defined in the Audit Committee charter. The annual performancereview report for 2016 indicated that the Audit Committee has relied on the assurance provided by theExternal and Internal Auditors regarding the adequacy and effectiveness of internal controls.

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(c) Period covered by the review;

For the year 2016

(d) How often internal controls are reviewed and the directors’ criteria for assessing the effectiveness of theinternal control system; and

External Auditors – review internal controls related to the integrity of financial statements on an annual basis.

Internal Auditors – review internal controls of each business unit in the ICTSI Group following a 2 or 3 yearcycle depending on risk assessment.

The Audit Committee relies on the assurance provided by the external and internal auditor regarding theeffectiveness of internal control system. Effectiveness is measured by how well the internal controls preventsor minimized identified risks.

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

N.A.

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 auditfunction.

Role Scope

Indicate whetherIn-house orOutsource

Internal AuditFunction

Name of ChiefInternal

Auditor/AuditingFirm

Reportingprocess

Audit & ComplianceGroup (ACG) shallwork participatively,as part of a team toimprove thecompany’soperations byproviding timelyfeedback andappropriaterecommendationsfor theimprovement of riskmanagement,control andgovernanceprocesses.

Assurance servicesin such areas asfinance, accounting,purchasing,inventory,informationtechnology, humanresources,administration andother areas as maybe deemednecessary. IT mayalso performconsulting servicessuch as serving ontask forces toanalyze operationsor processes asrequested byManagement for aslong as theseservices do notrepresent a conflictof interest ordetract ACG fromits obligations to

In-House Sandy Alipio(appointed lastMay 15, 2014)

Functionallyreports to AuditCommittee;Administrativelyreports to theExecutive VicePresident.

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the AuditCommittee. Auditcoverage willinclude ICTSI and alllocal and foreignsubsidiaries, as wellas affiliatedcompanies.

(b) Do the appointment and/or removal of the Internal Auditor or the accounting /auditing firm or corporationto which the internal audit function is outsourced require the approval of the audit committee?

The Audit Committee shall concur with the appointment or removal of the Vice President – Audit &Compliance Group (VP-ACG) (please refer to Sec. V.C.2 of the Audit Committee Charter).

(c) Discuss the internal auditor’s reporting relationship with the audit committee. Does the internal auditor havedirect and unfettered access to the board of directors and the audit committee and to all records, propertiesand personnel?

The VP-ACG reports functionally to the Chairman of the Board, through the Audit Committee, as defined inthe Internal Audit Charter and as provided in the Audit Committee Charter. The VP-ACG has direct access toSenior Management and the Audit Committee of the Board. The ACG is completely free to review all records,properties and personnel as provided in the Internal Audit Charter.

(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.

None for 2016.

Name of Audit Staff ReasonN/A N/AN/A N/AN/A N/A

(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 For 2016. 100% coverage of planned audit areas

Issues7

There were no compliance issues relating todifference in interpretations. There were also nomajor non-compliance issues regarding statutoryreporting, reporting to SEC/ PSE and compliancewith concession agreements.

Findings8 All audit observations are classified either asPriority 1 (Very Serious/Material), Priority 2(Significant) or Priority (Minor) issues; All Priority

7 “Issues” are compliance matters that arise from adopting different interpretations.8 “Findings” are those with concrete basis under the company’s policies and rules.

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1 issues are reported to the Audit Committee,requires management action within six (6)months from report issuance date to the extentpractical and monitored on a semi-annual basisuntil implemented; Priority 2 issues are shown asan appendix in the Audit Report but notmonitored semi-annually. Instead, theimplementation of agreed action plans isvalidated on the next audit cycle review.Management action is expected within a yearfrom report issuance date to the extent practical;Priority 3 issues are also presented as anappendix on the audit report for managementconsideration.

Examination Trends

There are no major pervasive control issues orfindings except for the outstanding processingand interface issues for MICT’s billing systemswhich are already currently being addressed byMICT Management.

[The relationship among progress, plans, issues and findings should be viewed as an internal control reviewcycle which involves the following step-by-step activities:

Preparation of an audit plan inclusive of a timeline and milestones; Conduct of examination based on the plan; Evaluation of the progress in the implementation of the plan; Documentation of issues and findings as a result of the examination; Determination of the pervasive issues and findings (“examination trends”) based on single year resultand/or year-to-year results; 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 andthe result of an assessment as to whether the established controls, policies and procedures have beenimplemented under the column “Implementation.”

Policies & Procedures Implementation

Internal Audit Manual Parts I and II (Please seeattached for the table of contents)

Implemented since 2005; Review completed andupdates were made in accordance with therecent changes in the International Standards forthe Professional Practice of InternalAuditing. Revised Internal Audit Manual wasapproved in the May 2017 Audit Committeemeeting.

(g) Mechanism and Safeguards

State the mechanism established by the company to safeguard the independence of the auditors, financialanalysts, investment banks and rating agencies (example, restrictions on trading in the company’s shares andimposition of internal approval procedures for these transactions, limitation on the non-audit services thatan external auditor may provide to the company):

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Auditors(Internal and

External)Financial Analysts Investment Banks Rating Agencies

Internal Auditors –report functionally tothe Chairman of theBoard, thru the AuditCommittee.

External Auditors –report functionally tothe Audit Committeeand also annuallyreports on the non-audit services handled.

There is an internalpolicy that the Companyshould not provide anyinformation to financialanalysts regardingprojected income.

There is an internalpolicy that the Companyshould not provide anyinformation toinvestment banksregarding projectedincome.

There is an internalpolicy that the Companyshould not provide anyinformation to ratingagencies regardingprojected income.

(h) State the officers (preferably the Chairman and the CEO) who will have to attest to the company’s fullcompliance 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 asmandated by the Code and that internal mechanisms are in place to ensure that compliance.

The Chairman, Chief Executive Officer, Chief Financial Officer, Compliance Officer and Independent Directorsattested to the Company’s full compliance with the SEC Code of Corporate Governance. This certification isprovided in the SEC 17-A (Annual Report) because this Annual Corporate Governance Report (ACGR) isattached thereto, thus:

The Group adopted a Manual on Corporate Governance in January 2003, submitted to SEC its Revised Manualon Corporate Governance (“CG Manual”) on July 30, 2014 and shall submit its Revised Manual on CorprateGovernance on May 31, 2017 in accordance with SEC Momemorandum Circular 19 - 2016. The Companysubmitted a Certificate last January 5, 2017, which states that the Company is in full compliance with its 2014Manual on Corporate Governance. The Company likewise submitted its 2015 Consolidated Changes in theAnnual Corporate Governance Report on January 8, 2016 and has submitted this 2016 Annual CorporateGovernance Report on May 30, 2017, pursuant to SEC Memorandum Circular 20 - 2016.

The Company’s Compliance Officer was appointed in February 2014. Last February 9, 2016, concurrent asChief Financial Officer, Rafael D. Consing, Jr. was appointed as the new Compliance Officer. The ComplianceOfficer coordinates with the Philippine SEC with respect to compliance requirements, monitor compliancewith the revised manual and report any governance-related issues to the Board. The Company has notdeviated from its 2014 Manual on Corporate Governance and further commits itself to principles and bestpractices of governance in the attainment of corporate goals.

H. ROLE OF STAKEHOLDERS

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

Policy Activities

Customers' welfare

ICTSI continues to implementprojects aimed at improvingservices for its customers.

Focusing on CSR activities oninitiatives that will benefitour less fortunate customers,giving particular attention totruckers and their families,especially those who are

1. Established an MICT customer experienceteam, which includes Customer Care, Conciergeand Reception, to handle day to day clientrequirements/complaints/assistance and thelikes;

2. Established an MICT sales and marketing teamtasked to come up and implement events,programs and projects that will increasecustomer interaction as well as efficiency inaddressing customer concerns;

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residents in our surroundingcommunities;

Developing operational KPIswhich consider thelivelihood, health, and well-being of customers such asfaster truck turnaroundtimes and creating safer,accident-free workenvironments;

Offering of educationalopportunities for ourcustomers through terminal-sponsored customer trainingprograms that promote anti-corruption initiatives, world-class health and safetybehavior, and overall well-being;

Promoting interactiveactivities between ourcustomers and managementat all levels includingparticipation in athletic andsocial activities;

Striving for a corruption-freeenvironment throughautomating processes whichare driven through customerfeedback and interaction;

Achieving total communityassimilation creatingfriendlier surroundingenvironments for ourcustomers;

Delivering the necessarysafety and security in andaround our terminal areas toensure the well-being andsafety of all customers;

Providing, wheneverpossible, online or offsiteaccess to terminal systemsand facilities thus reducingtravel time and idle time forour customers;

Providing community andterminal wide health andsafety facilities and logisticswhich not only coverworkforce requirements butalso customer needs; and

Creating a safe, productive,friendly, healthy, andcorruption-free workspacefor all customers.

3. Implemented MICT Transparency Campaignthat allows customers online access to real timeinformation on their container, vessel and portcharges via PC, laptop or mobile phone;

4. Implemented an MICT Advisory system todeliver “important announcements to clientsvia email";

5. Implemented a total revamp of the billingsystem and outsourced its cashiering to thatwill:a. Result in faster queuing time for clients;b. Allow remote payment supported by more

banks, therefore decongesting downstairsand saving them trips to the billing lounge;

c. Project is moving towards Phase 2;6. Invested on new equipment for faster service;7. Improved on port system procedures to provide

faster and more efficient service;8. Implemented dredging projects;9. Expanded container yard and operational areas;10. Provides free shuttle service to/from MICT

from/to Lawton and Del Pan, using brand newand air conditioned vehicles;

11. Provides an affordable cafeteria open to all portusers;

12. Enforced Pre Advise system and implementedthe Terminal Appointment Bookign System thatresulted in improved truck flow and fasterturnaround time;

13. Opened and inland container at Laguna (theLaguna Gateway Inland Container Terminal Inc.)to provide a one-stop logistics service forimporters and exporters in the south Luzon;

14. Developed an online Client Dashboard that willallow key importers to get summary reports fortheir import containers at MICT;

15. Launched the MICT Mobile App that providesfeatures like the Track and Trace, VesselBerthing Schedule, CCTV and a Billing Calculatorto allow customers real time information ontheir shipments;

16. Launched the MICT CUSTOMER SURVEY (Q12015), which will be done quarterly to measurecustomer satisfaction and identify areas ofimprovement by hearing the voice ofcustomer;

17. Developing a Customer Relationship;Management (CRM) system to better serve andunderstand MICT customers (Q4 2017);

18. Posting of CCTV footage of MICT Pre Gate Area,Gates, Access Roads and Vessel Berthingschedules on official website to support MICT’stransparency campaign;

19. Relaunching of official website (Q3 2017) withnew features to improve the overall customerexperience;

20. Participating in numerous port communityrelated events to ensure the port user

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Policy Activities

community is always updated on the currentsituation of MICT’s overall terminal health;

21. Upgrading of Terminal Operating System(NAVIS);

22. Provides truck holding area in Spurline forACTOO and CTAP; and

23. Clearing of the access road (outbound) fromIglesia ni Cristo to Delpan to provide a safe walkway for the pedestrian

Supplier/contractorselection practice

In the selection of suppliers, ICTSIensures that suppliers areselected based on their ability tomeet contract requirementsincluding quality system and anyspecific quality assurancerequirements.

The procedure in supplier accreditation is strictlyobserved from the 1.) initial interview of potentialsuppliers, 2.) submission of the requiredaccreditation documents, 3.) pre-visit activitieswhich include a.) checking the correctness andcompleteness of the required documents; b.)interviewing other customers referred by thesupplier and c.) reviewing financial statementssubmitted by the supplier, 4.) conduct of plant visit,5.) preparation of final report and lastly 6.) issuanceof certificate of accreditation and updating ofdirectory.

Environmentallyfriendly value-chain

ICTSI-MICT IntegratedManagement System (IMS) wasreconfirmed ISO 9001:2008 andISO 14001:2004 certified byCertification InternationalPhilippines, Inc. (CI) as follows;

ISO 9001:2008 - QUALITYMANAGEMENT SYSTEMIssue date: 01 April 2014Cert# CIP/35421Q/04/12/751

ISO 14001:2004 –ENVIRONMENTALMANAGEMENT SYSTEMIssue date: 01 April 2014Cert# CIP/35421E/04/12/751

The IMS certificates are valid until20 January 2017, subject tosatisfactory results of annualsurveillance audits scheduledevery December of year 2014-2016. The further extension ofCertificates will be based oneffective conformity to therequirements of ISO 9001:2008and of ISO 14001:2004, asdetermined by a reassessment ofIntegrated Management Systemin its entirety.

ICTSI Balik-BateryaICTSI was recognized as a Million Peso DonorAwardee during the 10th Anniversary celebration ofMotolite – PBSP’s Balik-Baterya Program held atAcacia Hotel last January 31, 2017. ICTSI has beendonating its used lead-acid batteries (ULABs) to theProgram since 2011. This Program promotesrecycling and enhances support to corporate socialresponsibility.

Balik Baterya Program involves collection of usedlead-acid batteries (ULABs) for proper recycling andproduction of new automotive and industrialbatteries. As incentives to company-users of leadacid batteries, the number of their donated usedbatteries corresponds to a peso value and uponaccumulation, the amount can be utilized to fundvarious education, health and environment CSRprojects and programs.

Bantay LangisICTSI entered into an agreement with ABS-CBN’sLingkod Kapamilya Foundation for the hauling ofICTSI’s used oil. The monetary value of the collectedused oil from ICTSI will be used in theimplementation of Lingkod Kapamilya’s projects forthe conservation and preservation of theenvironment.

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Policy Activities

As a certified organization, we arerequired to maintain our IMS toISO 9001:2008 and to ISO14001:2004 standards and tocomply with CI’s conditions ofcertification.

Communityinteraction

Please see Annual Report onCorporate Citizenship

Community InteractionOn its 4th year, ICTSI Foundation through the ParolaSolid Waste Management Project continues toengage MICT’s host community in Manila. In 2016,the following activities were done:

I. List of activities:

1) Team Building for 78 Parola ecopatrolsThe Parola Solid Waste ManagementProject is the avenue for all ParolaVolunteer Ecopatrols to strengthen teamrapport, improve communication, and,forge stronger relationship, team spirit andcohesiveness. Last year, Parola ecopatrolswere gathered in a follow-through 2-dayTeam Building seminar at GK EnchantedFarm facilitated by a third-party facilitator.Gawad Kalinga Enchanted Farm is a socialenterprise that employs Gawad Kalingabeneficiaries who are from poor families. Afarm tour and community interaction wasorganized to inspire the ecopatrols and bebacked recharged in their duties.

2) IEC Awareness Seminars on RA 9003 at theback of Gates 1-10, 17, 20, and , Area F andthe 27 sweepers of Barangay 275The Training and Capacity Building Teamconducted 14 half-day IEC awarenessseminars which benefitted 595 residents inBarangay 20 and 27 sweepers in Barangay275.

The training modules on proper solid wastemanagement, segregation, and, recyclingwere translated into Filipino for the Parolaresidents.

3) Business Orientation Seminar for Parolaecopatrols courtesy of Philippine Businessfor Social ProgressIn partnership with Philippine Business forSocial Progress, the 2-day workshopcapacitated all ecopatrols with basicentrepreneurial skills necessary to succeedin business, a capability buildingcomponent of the Parola Solid WasteManagement Program, which intends to

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Policy Activities

provide livelihood assistance usingtechnologies on the utilization andprocessing of household wastes and otherresources, initially for Parola ecopatrols,and, possibly, for the residents of Barangays20 and 275.

4) Waste Material Recycling CompetitionThe Search for Most Innovative HouseholdItem from Recycled Trash was launched lastJuly 2016. A total of 26 entries weresubmitted and judged. The panel of judgeswas composed of representatives from theDepartment of Social Welfare andDevelopment-NCR office, ICTSI PublicRelations Department and ICTSI Foundationwere invited. Entries were judged based onthe following criteria: 40% for originalityand creativity, 40% for innovativeness andusability and 20% for replicability andmarketability.

5) Ecopatrols’ Wall Gardening InitiativesBarangay 20 and 275 ecopatrols initiatedwall gardening initatives in their respectiveareas along South Access Road. Ecopatrolswere impressed of the Urban GardeningProjects during their Team Building at GKEnchanted Farm and some of them decidedto set-up their own wall gardening bycollecting recyclable containers paintedmostly with red and orange. These areplanted with various ornaments and hangthem along South Access Road.

These activities resulted to better cooperation andhigher participation rate of the residents to theproject as attested by the Parola VolunteerEcopatrols. More have been aware of the scheduleof the arrival of trucks which is their signal to takeout the garbage to South Access Road. Theseinitiatives also got for ICTSI Foundation a Gold AnvilAward under the category Public RelationsPrograms: On a Sustained Basis Environment/Science and Technology at the recent Anvil Awardsheld on March 10, 2017 in Makati Shangri-La.

Through the ICTSI Employee Volunteerism Programand the Christmas Outreach Program, ICTSIFoundation also reached out to several DSWD-accredited residential institutions taking care of theabandoned elderly, abandoned and abusedchildren, and persons with disabilities in Manila,Bauan, Batangas, Olongapo City, Misamis Oriental,General Santos City, and Davao City.

ICTSI Foundation also provided free medical and

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Policy Activities

dental services to indigent residents of its hostcommunities in Manila and the local subsidiariesthrough its annual Medical and Dental Mission.

Anti-corruptionprograms andprocedures

ICTSI strictly prohibits andpenalizes the acts of receivingand/or soliciting or exactingmonetary consideration fromport users, company clients orthe public in consideration ofwork.

Constant apprehension by the Security Group ofpolicy violators. Apprehension is not limited toemployees but also extends to those who voluntarilygive gifts and other monetaryconsideration. Outside truck drivers who violatethe policy are banned within ICTSI premises.

To show its strong commitment against corruption,ICTSI even went into filing administrative chargesagainst its erring employees. Employees caughtreceiving and/or exacting monetary considerationfrom port users are suspended fromemployment. Recidivists are meted with theultimate penalty of dismissal from employmentafter observance of the required due process. Theimposition of these penalties serves as a deterrentto other possible violators.

Safeguardingcreditors' rights

The Group manages its liquidityprofile to be able to finance itsworking capital and capitalexpenditure requirementsincluding the timely servicing ofdebt, payment to suppliers andother corporate payables. As partof the liquidity risk management,the Group maintains strict controlof its cash and ensures thatexcess cash held by subsidiariesare up streamed timely to theParent Company. In line with thisobjective, the subsidiaries areallowed to maintain cash at amaximum equivalent to itsworking capital requirement only.The Group monitors receivablesand payables to ensure positiveposition at optimal levels. Inaddition, it regularly evaluates itsprojected versus actual cash flowinformation and continuallyassesses the conditions in thedomestic, regional, andinternational financial markets topursue fund raising initiativeswhen needed. These initiativesmay include accessing bank loans,project finance facilities, debtcapital markets and equitymarket.

The Group regularly monitors its

[ICTSI monitors and maintains a level of cash andcash equivalents and bank credit facilities deemedadequate to finance the Group’s operations, ensurecontinuity of funding and to mitigate the effects offluctuations in cash flows.]

Liquidity Management

1. Implemented the CS Lucas TreasuryManagement System – Money MarketModule which is a database for the Group’sinvestments that aids in the monitoring andproper recording of the transactions.

2. Implemented the Citi Treasury Vision, aplatform that allows head office fullvisibility of all bank accounts of the Group,including subsidiaries in different countries.

3. Cash repatriation to Parent forms a majorcomponent of the subsidiaries’ KPIs.

4. A daily Parent cash position report permajor currency wherein the Parent’s cashholdings and upcoming materialspayments, especially loan interest andprincipal payments, are indicated.

5. Utilizes the cash management system ofCiti, HSBC and Deutsche Bank for moreefficient transfer of funds, includingpayment of loans and bonds.

6. Leverage ratios and liquidity ratios aremonitored an dprojected. All pertinentratios are computed every end of financialquarter and every time there is a financialtransaction that impacts the capitalstructure and the debt covenant of the

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Policy Activities

funding strategy and capitalstructure optimization plans inorder to support managementinitiatives such as acquisition andexpansion as well as financialcrisis management. It is critical tofollow debt capacity allocationsand restrictions, if any, in order tofund growth, ensure timelyservicing of debt and meet setleverage ratios.

Group. Compliance certificates aresubmitted quarterly to creditors viaappointed facility agents. Debt covenantcomputations are monitored by Auditors.

7. Implemented the CS Lucas TreasuryManagement System – Term Loan Modulewhich is a database for the Group’s bankloans that aids in the monitoring and timelypayment of bank debts.

8. A Director and an Assistant Manager areassigned the task of managing relationshipwith banks, compliance with BSPreportorial/monitoring requirements withrespect to foreign loans, and compliancewith debt covenants

9. Conducts regular discussions with creditrisk officers of relationship banks to ensureupdated and accurate internal credit ratingand to solidify the bank’s confidence for theICTSI account.

10. Loan/bond agreements, terms andconditions contain covenants,undertakings, representations andwarranties, and events of default thatsafeguards the position of creditors.

2) Does the company have a separate corporate responsibility (CR) report/section or sustainability report/section?Yes, please see SEC 17 – A, glossy Annual Report and company website.

3) Performance-enhancing mechanisms for employee participation.

(a) What are the company’s policy for its employees’ safety, health, and welfare?

HEALTH AND WELFARE

ICTSI ensures that every employee is annually provided with proper Personal Protective Equipment while onduty. These include hard hats, uniforms with integrated and reflectorized safety vests and safety shoes. Gasmasks are also provided to employees assigned to handle hazardous cargoes i.e. toxic cargoes and perishablegoods which could produce pungent and foul smell. To ensure that employees wear their protectiveequipment, ICTSI crafted a policy on the proper wearing of uniforms and protective equipment religiouslyimplements the same.

The Company policy provides for disciplinary action for those caught not wearing the same. The policy isstrictly implemented to avoid accidents or at the very least to lessen injuries in case of any unforeseen eventswhile on duty. The Safety Section likewise religiously conducts Safety Training and Development as well asAccident Prevention Seminars not just for ICTSI employees but for all port users to instill in them safe workinghabits.

ICTSI further adheres to the importance of a safe, secure and healthful environment and it recognizes theneed to sustain a drug and alcohol free workplace. In line with this, ICTSI strengthened its policy against theuse of prohibited drugs. Any employee found positive for prohibited drugs, both in the initial and confirmatorytesting, during the annual random drug testing shall immediately be processed for dismissal fromemployment on the ground of serious misconduct.

Instead they are given another chance to rectify their mistake by allowing themselves to submit to an outpatient rehabilitation conducted by the Dangerous Drugs Board. After six (6) months of rehabilitation and

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favorable evaluation and recommendation from the DDB, they are again allowed to work with theundertaking that they will completely refrain from using prohibited drugs.

ICTSI makes certain that its employees are adequately rested. If exigencies of the operation require longerworking hours or working on a designated rest day or holiday, the employees are paid the correspondingovertime pay, rest day or holiday premium, as the case may be, conformably with the provision of the CBA. Inaddition, every employee is entitled to at least sixteen (16) days of sick leave and sixteen (16) days of vacationleave after a year of service.

The sick leave benefit was enhanced by paying a health bonus at the end of the year to encourage employeesto stay healthy. Every employee is also enrolled under the company’s Group Hospitalization Plan whichprovides a maximum of Php60,000.00 hospitalization benefits per illness in a year. The same is extended tohis/her dependents.

Last April 25, 2014, ICTSI and NMPI-NAFLU, the certified bargaining agent for its rank and file employees,concluded a new five (5) year CBA. The CBA provides for better benefits such as guaranteed wage increasesfor its employees for the next five (5) years. It also provides for other employee welfare benefits such as sickand vacation leave credits, increase in medical and dental benefits, increase in the hospitalization benefits foremployees and their dependents, enrolment of employees to health insurance to cover both outpatient andinpatient medical benefits and services, annual physical examination for employees, increase in insurancecoverage for life and accidental death, increase in burial assistance to legal heirs of deceased employees,significant increase in funding for the union’s welfare, educational and calamity programs and increase inloyalty bonus for retiring employees.

SAFETY TRAINING AND DEVELOPMENT

Developed programs and policies for year 2016:

Full implementation of Personal Protective Equipment (PPE) Policy to all- Zero Tolerance New uniform with high visibility marks both upper garments and working pants were distributed

for operation employees. Conducted trainings and drills on Fire Prevention and Suppression; Fire Explosion; First Aid with

Basic Life Support; Earthquake Preparedness; Chemical Safety; and Port Safety and HealthStandards.

Intensified monitoring and strict implementation of “No Rider Policy”

Intensified “No loitering” policy inside the yard

Other Programs:

Intensified terminal inspections with single ingress and egress for all employees and other portusers

Enhance monitoring of traffic flow and movements of port equipment in the terminal Thorough inspection of all cargo gears of vessels at anchorage basin Ensure safety of visitors & port users during terminal visits, tours and orientations Intensified follow-up inspections Intensified training for ERT members Intensified coordination between Safety and Operations Officers and Staff. Upgrade of

research and development methods Handling of Dangerous Good Course. Specialized training course on the proper identification,

related legislative regulations and other specifications for dangerous goods handled in theport.

Ensures compliance to the requirements of ISO 9001:2008 & 1400:2004 standards, PPA, DENR,DOLE-BWC and the BFP

Refresher course to ICTSI equipment operators (Dock work Safety and Health Course).

Accident Prevention: Intensified tool box meeting in different sections, reminded/reoriented Terminal guidelines

and procedures as well as safe working habits. Intensified mobility and visibility of Safety Officers

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Intensified yard inspections and Safety Visibility; Regular roving inspection and monitoring of the Terminal is being conducted daily to ensure

that safety is properly implemented and exercised. Regular monitoring of the container stacking at the container yard. Ensuring that the terminal guidelines are properly implemented Enhance outside truck drivers orientation; Regular inspection of firefighting equipment Regular inspection of building, equipment and facilities. Ensuring safety of dockworkers while on board vessels. Maintaining proper housekeeping inside the MICT premises; and Strict implementation of personal protective equipment for Employees, Port Users,

Contractors and Visitors.

ICTSI is committed to provide a safe and healthful place of work accordance with industry standards and incompliance with government requirements:

To meet this commitment, we will abide by the following principles:

Place the highest priority on the health and safety of all employees and port users; Provide health and safety training to employees to empower or incident prevention program; Encourage employees to perform their jobs properly in accordance with established procedures and

work practices; Ensure the Company’s operation and other activities comply with applicable government

regulations. Provide full cooperation to clients, statutory authorities and local communities; Communicate and consult with employees to be able to continually improve work procedures and

maintain safe practices in the performance of their jobs; and Monitor performance and conduct regular audits to ensure health and safety management system

is up to date and continually improved.

Through these principles, we believe that:

Accident loss can be controlled through good management combined with active employeeinvolvement;

Safety is the direct responsibility of all managers, supervisors, employees, contractors and port users; All employees will be aware of their statutory duty to take reasonable care of the health and safety

of themselves and others who may be affected by their actions; and Health and safety for the company, in general will be steered towards a higher education.

(b) Show data relating to health, safety and welfare of its employees.

HEALTH AND WELFARE

ICTSI maintains its own medical and dental facilities for the use of its employees and their dependents.Medical Services include medical check-ups, consultations, treatments, minor surgeries, issuance of medicalcertificates and approval of sick leave applications. Further, all regular employees and their immediatedependents are provided access to clinic medicines (i.e., antibiotics, maintenance medicines, over-the-counter (OTC) medicines, etc.) Annual drug test for all employees during Company’s scheduled APE andRandom Drug Test per month for minimum of 100 employees is also conducted. ICTSI also provides free ChestX-Ray for dependents with suspected Pulmonary Tuberculosis.

This also includes services of duly licensed nurses whose duties are to assist the doctor in the treatment ofemployees and/or their dependent/s, dispense medicine to patients based on the doctor’s prescription, filemedical records of employees and/or their dependents, apply first aid and/or other immediate/necessarytreatment to employees especially in cases of injuries sustained in accidents or incidents occurring within thecompany premises in the absence of a doctor, assist in transporting employee patients to accredited hospitalsin case of emergencies, and conduct home visits to absent employees upon the written request fromauthorized representative/officer of ICTSI.

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Dental Services are performed by duly licensed dentists whose duties include oral check-ups, oralprophylaxis, tooth filing, and tooth extraction.

Medical practitioners are present at the clinic at the below schedules:

1. Doctors – One (1) doctor from 7:00a.m. to 7:00p.m., Mondays thru Fridays and one (1) doctor from7:00a.m. to 3:00p.m. on Saturdays and Sundays excluding nonworking holiday.

2. Dentists – One (1) dentist from 8:00a.m. to 12:00noon and one (1) dentist from 1:00p.m. to 5:00p.m.Mondays thru Fridays excluding nonworking holidays.

3. Nurses – One (1) nurse from Mondays to Saturdays from 7:00a.m. to 3:00p.m. for the first shift andone (1) nurse from 3:00p.m. to 7:00a.m. of the following day for the second shift. Another one (1)nurse from 7:00a.m. to 4:00p.m. from Mondays to Fridays. The reliever nurse reports for duty from7:00a.m. on Sundays to 7:00a.m. on Mondays.

ICTSI’s medical and dental facilities provide round the clock services for employees and their dependents. Wealso maintain our own ambulance to address emergency medical cases. A fire truck is always on stand-bywithin the terminal premises to provide immediate service and assistance in cases of fire and othercatastrophes.

In May 2014, the hospitalization benefits of employees was increased from Php30,000.00 toPhp60,000.00. This is primarily to cope with the increasing cost of medical services. Aside from the grouphospitalization benefits made available to employees and their dependents, regular employees in exemptpositions are also given Annual Medical and Dental Reimbursement benefit.

ICTSI provides them with a pre-designated annual maximum amount to pay for the cost of their and theirdependents’ Medical Insurance Premiums. They may likewise reimburse other medical and dental expensesincurred not covered by their medical insurance i.e. medicines and other doctor’s fees.

ICTSI also makes use of Service Providers with deep expertise in their industries and in the local market toadminister our hospitalization, group life and group accident insurance as well as travel insurancebenefits. These providers’ expertise helps us in the following areas:

a.) Facilitate enrollment in plans, transactions, reporting and processing of premium paymentsand claims;

b.) Ensure proper benefits accounting, recordkeeping and reconciliation;c.) Gain access to right information to make the most informed and most cost-effective decisions

on health and insurance providers;d.) Provide a panel or network of health care providers based on explicit standards for selecting

providers;e.) Evaluate, shortlist and recommend cost-effective providers;f.) Reduce costs by negotiating favorable fees from providers; andg.) Review and manage utilization of providers i.e. evaluate appropriateness, medical needs and

efficiency of health care procedures and facilities and manage health care cases.

ICTSI also introduced the ICTSI HEALTH INSURANCE PLAN (IHIP). The IHIP provides employees access tomedical insurance coverage for their Out-Patient and In-Patient (hospitalization, consultation, laboratory, etc)medical needs. It is provided through an approved Health Care Provider and offers a choice of Employee IHIPPrograms that vary by maximum amount limits. Employee also has the option to use his/her medical anddental reimbursement (MDR) benefit to enroll his/her dependents in any of our available DependentPrograms. This MDR benefit may also be used for the order and free delivery of medicines via MEDEXPRESS,a delivery service drugstore.

Annual Physical Exam is also conducted religiously in order to promote health awareness and early detectionof illnesses. Standard exams include Physical Examination of the doctor, Electrocardigram (ECG), X-ray,Complete Blood Count, Urinalysis, Fecalysis and Visual Acuity Screening. During the APE event, our partnerhealthcare professionals also provides Cardiometabolic Workplace Wellness program which includes

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Biometric Tests (Blood Sugar, Cholesterol, Blood Pressure screening, Body Mass Index (BMI /Obesity screeningand Foot Doppler test) which helps us in profiling our employees and assessing their overall cardiometabolichealth status thus, helping us further to reduce rates of illnesses like Hypertension, Diabetes, Dyslipidemia,etc. Also, from the baseline workforce profiling gathered during APE, we design and provide a customizedwellness program like prevention of lifestyle-related diseases, Smoking Cessation campaign among others.

Employees with adverse finding after the above exams shall be directed to consult a specialist for furtherexamination and medication. We have also tapped the services of different medical groups to provide uswith seminars and briefing on diseases and medical conditions most common to our employees.

SAFETY

1. Safety Orientations

Three Thousand Four Hundred Fifty Six (3,456) truck drivers were oriented about the Terminal TrafficRules and Regulations. Eight Hundred Sixty Eight (868) truck drivers from ACTOO, Two Thousand FiveHundred Forty Nine (2,549) truck drivers from CTAP and Four (4) truck drivers from HTI were issuedCertificate of Attendance.

Three Hundred Sixty One (361) Tool Box meetings were conducted at different sections and werereminded/ reoriented on the Terminal guidelines and procedures as well as on the safe working habits.

One Hundred Eight One (181) Newly Hired employees were oriented about the Safety Rules andRegulations of the Company.

Conducted Terminal Traffic Rules and Regulations to all contractors.

2. Conducted Seminars and Trainings for ERT members and employees

Port Safety and health standards - A total of Thirty One (31) employees participated the events onseparate dates February 16, 2016, April 19, 2016, June 21, 2016 and October 27, 2016.

ERT Fire Fighting Exercise/Drill - was successfully completed on the following dates of April 05, 2016 andDecember 22, 2016 at block Central Papa and Admin Building, participated by Emergency Response Teammembers and assisted by the Bureau of Fire Protection Headed by Chief Insp. Marvin Carbonel.

First Aide and Basic Life Support - CPR – Basic course was also conducted by the Phil. Red Cross TrainingOfficers, Manila Chapter held on May 17 to 18, 2016.

The Earthquake Preparedness Seminar and Training / Drill - was held last July 20, 2016. Resource speakerswere from the Office of Civil Defense NCR – NDRRMC : Amy Daura Gumboc, BFP FO1 Ryan Zaldy Abreraand Roberto Tiglao from PHIVOLCS. The team structured an earthquake simulator aassisted andparticipated by ERT and different office representative/s from ICTSI departments.

Handling of Dangerous Goods Course - The three Day Course on Handling of Dangerous Goods wasconducted last October 17 to 19, 2016 from various sections of the Terminal Operations Department. Theseminar was held at the PPA Training Institute Bldg. Gate 4, R. Oca St., South Harbor, Port Area Manila.Resource speakers were Engr. Noli Villanueva (PPA Senior Safety Specialist, POSD), Engr. Arvin Dadulo(Acting Division Manager, PPATI) and Kriselle Maika Padul (Training Specialist 2, PPATI).

3. Other Safety Activities

a. Regular roving inspection and monitoring of the Terminal conducted daily to ensure that safety isproperly implemented and exercised:

Forty Five (45) Protruding Angle Bar, Twenty (20) Protruding Trench Guard and Forty Two (42)Panzer Belt were Inspected/Rectified.

Ninety Eight (98) Potholes were inspected/rectified. All Fenders, Bollards and Bow Mark were Inspected/Rectified.

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b. Regular monitoring of the container stacking at Container Yard Two Thousand Nineteen (2,019) Improper Stacking (per location) were inspected and rectified

and Three Hundred Seventy Nine (379) were not rectified with a total of Two Thousand ThreeHundred Eighteen (2,318) for the year 2016.

c. Annual Inspection/Certification of Lifting Gears conducted last September 2016.

d. Issuance of Clearance/Hot Work Permit Pursuant to Article X Section 5.1 of the PPA Orange book that allemergency minor hot-works and/or repairs conducted at piers/wharves or within the port zone shallobtain the clearance from the Authority.

e. Compliance to DOLE & PPA requirement

Monthly submission of Accident/Incident Reports of all Cargo Handling Operators particularlyRule 1053 “Report Requirements” of the Occupational Safety and Health Standards of DOLE.

Annual submission of work accident/Illness exposure data report pursuant toDOLE/BWC/OHSD/IP-6b

Monthly submission of incident report to PPA based on Article V of PPA Dockwork Safety andHealth Standards.

Quarterly submission of report to PPA on Safety, Environment and Health accomplishments

f. Environmental Compliance

Quarterly submission of Self-Monitoring Report (SMR) and Semi- annual report CMR. Annual environmental testing i.e. Ambient Air Quality, Surface Marine Water, Smoke

stack emission of the 10 units stand by Diesel Generator Set and the Water quality ofthe 8 outfall stations.

Management of Port-Generated Solid Wastes in accordance with RA 9003 (EcologicalSolid Waste Management Act of 2000).

g. Environmental Initiatives

Regular Conduct of Terminal Cleaning (Main terminal & Berth 6). Tree Planting - A total of 22 Palm Trees were planted at Berth 6 Riprap area

last September 26, 2016. Riprap Cleaning Activity – September 22 to 29, 2016

h. Compliance with the Fire Safety and Protection requirements of RA 9514 otherwise known asFire Code of the Philippines of 2008 and its Implementing Rules and Regulations.

Fire Safety Inspection Certificate obtained

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

Part of ICTSI’s objectives is to impart basic knowledge and skills to new employees and to assist existingemployees to function more effectively by keeping them abreast of recent developments and concepts whichthey could use in their respective fields.

In 2016, ICTSI implemented the following programs:

1.) Behavioral trainings which are initiated by the company as part of organization development.These include:

a. 7 Habits of Highly Effective People;b. Team building;c. Interaction Management;d. Basic Management Programs and Leadership trainings;e. Ports Operation and Strategy;

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f. Ports Planning and Design;g. Work Attitude and Values Enhancement Seminar / Tatak ICTSI;h. Customer Service Training;i. Employee Discipline Workshop;j. People Management Conference;k. Labor and Employee Relations Summit;l. PSQI Leadership Training;m. Team Building Sessions; andn. STAR Program for Supervisors.

2.) Company Orientation Programs which include:

a. Operations for Non-Operations;b. Orientation for newly hired employees;c. Orientation re: government mandated benefits;d. Orientation for HMI;e. Orientation for Retiring Employees;f. Operations for Non-Operations;g. Counterfeit Detection;h. Ugnayan sa Pantalan;i. Claims for Non-Claims;j. ISO Workshop; andk. CFS Warehousing.

3.) Technical training programs for skills enhancement

a. Reach Stackers, Quay Cranes, Rubber Tired Gantries, Sidelifterb. Hatch Clerk Trainingc. Crossby Rigging Trainingd. PISM Purchasing & Supply Chain Trainingse. NIAT Bookkeeper Certificationf. Certified Management Accountant Programg. Digital Communication & Brandingh. CISCO CCNA Switching & Routing Coursei. Basic Non-Life Insurance

(d) State the company’s reward/compensation policy that accounts for the performance of the company beyondshort-term financial measures

ICTSI has a reward program that accounts for its performance beyond short-term financial measures, as it isbased on company’s improvement of its efficiency and productivity.

The company has a Productivity Incentive Program in place for its employees with the following objectives:

1. Motivate operators to meet the productivity target;2. Reward and recognize good performance;3. Address personnel turn-over (resignations due to job offer abroad) in Operations; and4. Upgrade the level of service and skills of ICTSI Operators.

The program was designed to be progressive while anchored on the involvement of all 4 major operationalfunctions (QC, RTG, Prime Movers and Stacker Equipment) in the terminal with equal incentive pay out attarget. The company believes that this would foster better coordination and teamwork among the said majorfunctions.

The Incentive Guidelines are:

1. The program is open to all operators - Quay Crane, RTG, Prime Movers and Stacker Equipment;

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2. All participants must comply with the dispatch list or as ordered by the Supervisor;

3. All participants must have no accidents and disciplinary action for the month to qualify;

4. All participants must meet the targeted moves required per month;

5. A monthly cash incentive shall be given for previous month’s performance; and

Those who will consistently meet or exceed the targets set will receive a Year End Productivity Incentivepayable the following year. Management continuously evaluates and revises the guidelines andimplementation of the above program, based on business exigency.

4) What are the company’s procedures for handling complaints by employees concerning illegal (includingcorruption) and unethical behaviour? Explain how employees are protected from retaliation.

Just like any other administrative case, the complaint shall be taken cognizance of and due process shall be strictlyobserved giving the respondent every opportunity to explain his side and adduce evidence on his behalf. If theperson being complained of is an employee, substantive and procedural due process shall be strictly observedprior to issuance of any disciplinary action.

The identity of the employee – informant shall be treated with confidentiality. Rights of the employee – informantwill be protected based on applicable policies and local laws.

I. DISCLOSURE AND TRANSPARENCY

1) Ownership Structure as of March 31, 2017

(a) Holding 5% shareholding or moreThe following are known to the registrant to be directly or indirectly the record or beneficial ownerof the more than five (5) percent of registrant’s voting securities as of March 31, 2017:

Title ofClass

Name, Address ofRecord Owner andRelationship withIssuer

Name of Beneficial Ownerand Relationship withRecord Owner

Citizenship No. of SharesHeld

Percentage*

Common PCD NomineeCorporation (Non-Filipino)Makati StockExchange Bldg.,AyalaAvenue, Makati City1200

Deutsche Bank Manila -Clients’ Acct. - 23/F AyalaTower One Ayala Triangle,Makati City 1200Represented by Carlos DelaTorre, Head of Securitiesand Custody Operations,only holds legal title ascustodian in favor ofvarious clients, and is notthe beneficial owner of thelodged shares.

Foreign 357,294,658(Lodged with

PCD)Indirect

13.10%

Common PCD NomineeCorporation (Non-Filipino)Makati StockExchange Bldg.,AyalaAvenue, Makati City1200

The Hongkong & ShanghaiBanking Corp. Ltd. –Clients’ Acct. - 7/F HSBCCentre 3058 Fifth AvenueWest Bonifacio Global CityTaguig 1634Represented by MarisFlores, Senior VicePresident and Head of

Foreign 274,176,200(Lodged with

PCD)Indirect

10.05%

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HSBC Securities Services;and Kathy Dela Torre,Senior Vice President ofClient Services, only holdsa legal title as custodian,and is not the beneficialowner of the lodgedshares.

Common Bravo InternationalPort Holdings, Inc.104 H.V. dela CostaSt., 17-19 FloorsLiberty CenterSalcedo Village,Makati City 1200

Bravo International PortHoldings, Inc.Represented by Enrique K.Razon, Jr., its President

Filipino 279,675,000 10.25%

Common PCD NomineeCorporation (Filipino)Makati StockExchange Bldg.,AyalaAvenue, Makati City1200

AB Capital Securities, Inc.,Units 1401-1403, 14thFloor, Tower One, AyalaTriangle, Ayala Avenue,Makati City 1200Represented by LambertoM. Santos, Jr. President;and Ericsson C. Wee, FirstVice President, only holdsa legal title as custodianand is not the beneficialowner of the lodgedshares

Filipino 502,354,496(Lodged with

PCD)Indirect

18.42%

Preferred B Achillion Holdings,Inc.104 H.V. dela CostaSt., 17-19 FloorsLiberty CenterSalcedo Village,Makati City 1200

Achillion Holdings, Inc.

Represented by Enrique K.Razon, Jr.

Filipino 700,000,000 25.66%

* Percentage ownerships were computed using total number of issued and outstanding common shares, preferred B voting shares and preferredA non-voting shares of 2,727,763,543 (which excludes treasury shares) as of March 31, 2017.

(b) Security Ownership of Management as of March 31, 2017

Title of Class Name Number of shares and nature ofbeneficial ownership Citizenship Percentage1

Common andPreferred B Enrique K. Razon, Jr.2 1,678,105,057 Direct and Indirect Filipino 61.52%3

Common Andres Soriano III 9,150,481 Direct and Indirect American 0.34%Common Stephen A. Paradies 4,087,573 Direct Filipino 0.15%Common Jose C. Ibazeta 3,008,560 Direct Filipino 0.11%Common Martin L. O’Neil 683,635 Direct American 0.03%Common Silverio Benny J. Tan 478,000 Direct and Indirect Filipino 0.02%Common Octavio Victor R. Espiritu 300,000 Direct Filipino 0.01%Common Vivien F. Miñana 165,925 Direct Filipino 0.01%Common Joseph R. Higdon 156,000 Direct American 0.01%Common Jon Ramon M. Aboitiz 135,000 Direct Filipino 0.00%Common Jose Joel M. Sebastian 113,593 Direct Filipino 0.00%Common Rafael D. Consing, Jr. 35,003 Direct Filipino 0.00%

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Common Rafael T. Durian 1,000 Direct Filipino 0.00%Common Benjamin M. Gorospe III - Filipino 0.00%

1 Percentage ownerships were computed using total number of issued and outstanding common shares, preferred B voting shares andpreferred A non-voting shares of 2,727,763,543 (which excludes treasury shares) as of March 31, 2017.

2 Shares in the name of Enrique K. Razon, Jr. and Razon Group.3 The percentage ownership of Enrique K. Razon, Jr. and the Razon Group is at 61.61% if based on the total number of issued and

outstanding common shares and preferred B voting shares of 2,723,963,543 (which excludes treasury shares and preferred A non-votingshares) as of March 31, 2017.

(b) Security Ownership of Management as of April 20, 2017

Title of Class Name Number of shares and nature ofbeneficial ownership Citizenship Percentage1

Common andPreferred B Enrique K. Razon, Jr.2 1,678,105,057 Direct and Indirect Filipino 61.52%3

Common Andres Soriano III 9,150,481 Direct and Indirect American 0.34%Common Stephen A. Paradies 4,087,573 Direct Filipino 0.15%Common Jose C. Ibazeta 3,008,560 Direct Filipino 0.11%Common Martin L. O’Neil 683,635 Direct American 0.03%Common Silverio Benny J. Tan 478,000 Direct and Indirect Filipino 0.02%Common Octavio Victor R. Espiritu 300,000 Direct Filipino 0.01%Common Vivien F. Miñana 165,925 Direct Filipino 0.01%Common Joseph R. Higdon 156,000 Direct American 0.01%Common Jon Ramon M. Aboitiz 135,000 Direct Filipino 0.00%Common Jose Joel M. Sebastian 103,593 Direct Filipino 0.00%Common Rafael D. Consing, Jr. 35,003 Direct Filipino 0.00%Common Rafael T. Durian 1,000 Direct Filipino 0.00%Common Benjamin M. Gorospe III - Filipino 0.00%

1 Percentage ownerships were computed using total number of issued and outstanding common shares, preferred B voting shares andpreferred A non-voting shares of 2,727,763,543 (which excludes treasury shares) as of March 31, 2017.

2 Shares in the name of Enrique K. Razon, Jr. and Razon Group.3 The percentage ownership of Enrique K. Razon, Jr. and the Razon Group is at 61.61% if based on the total number of issued and

outstanding common shares and preferred B voting shares of 2,723,963,543 (which excludes treasury shares and preferred A non-votingshares) as of March 31, 2017.

Does the Annual Report disclose the following:

Key risks YESCorporate objectives YESFinancial performance indicators YES

Non-financial performance indicators YES

Dividend policy YESDetails of whistle-blowing policy YESBiographical details (at least age, qualifications, date of first appointment, relevantexperience, and any other directorships of listed companies) ofdirectors/commissioners

YES

Training and/or continuing education programme attended by eachdirector/commissioner

YES

Number of board of directors/commissioners meetings held during the year YES

Attendance details of each director/commissioner in respect of meetings held YES

Details of remuneration of the CEO and each member of the board ofdirectors/commissioners YES

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Dividend Policy - The Company's Dividends and Dividend Policy was clearly stated in the 2017 Notice of AnnualStockholders' Meeting. ICTSI has a track record of shareholder returns. Since 2013 to 2017, ICTSI was able todeclare dividends from PhP 0.75 - PhP 2.47, which is based on the company's unrestricted retained earnings.Dividends are payable to all common stockholders, on the basis of outstanding shares held by them, each sharebeing entitled to the same unit of dividend as any other share. Dividends are payable to stockholders whose namesare recorded in the stock and transfer book as of the record date fixed by the Board. Preferred A shareholders areentitled to dividends at rates fixed by the Board.

2) External Auditor’s fee

ICTSI paid its external auditors the following fees (in thousands) for the last three years for professional servicesrendered:

2014 2015 2016Audit Fees US$939.3 US$1,057.8 US$1,070.2Non-Audit Fees

Audit-Related Fees – 880.4 379.1Tax Fees 92.0 295.6 72.9Other Fees 14.8 73.1 151.1

2014 2015 2016

Audit Fees US$939.3 US$1,057.8 US$1,070.2

Non-Audit Fees

Audit-Related Fees – 880.4 379.1

Tax Fees 92.0 295.6 72.9

Other Fees 14.8 73.1 151.1

Audit Fees include the audit of the Group’s annual financial statements. The consolidated audit fees increased in2015 and 2016 as a result of new operating terminals and start-up companies.

Audited-Related Fees include the review of interim financial statements and issuance of comfort letters for thecapital market raising transactions of the Group. The amount in 2015 pertains to the issuances of three comfortletters as a result of the capital market raising transaction of the Group and project financing in one of thesubsidiaries while the amount in 2016 pertains to the issuance of a comfort letter relating to the Group’s liabilitymanagement exercise.

Tax fees paid to SGV & Co./Ernst & Young are for tax compliance, tax advisory services and transfer-pricingstudies. In 2015, the amount increased mainly due to the transfer-pricing studies and tax advisory on tax planningfor the restructuring of our subsidiaries in Latin America.

Other fees mainly include due diligence services related to business development and other various one-timeengagements. Details on the external auditor, audit and non-audit fees were discussed under Item 8.2 of SEC Form17-A.

3) Medium of Communication

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

a. Print materials, such as:Annual Report;company newsletter/magazine;newspaper of general circulationThrough press releasesThrough corporate disclosure with regulatory agencies

b. Company websitec. Email

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d. Face to face meetings with key investors and analystse. Investment conferences arranged by banks/investment housesf. Site visits by stakeholdersg. Quarterly Investors’ briefing conference calls

The latest investors’/analysts’/media briefing conference was for the First Quarter 2017 held last May9, 2017, at 5:00pm through an international dial in facility with available lines in the Philippines, HongKong, Singapore, United Kingdom, United States and Australia.

The recording of the conference call was made available last May 9-May 11, 2017 and the presentationused may be viewed/downloaded from the ICTSI website.

4) Date of release of audited financial report: March 13, 2017 (date of posting in the company website of the mostrecent AFS)

5) Company Website

Does the company have a website disclosing up-to-date information about the following?

Business operations

Yes(Operations tab)http://www.ictsi.com/operations/

Financial statements/reports (current and prioryears)

Yes(Disclosures [SEC Filings] under Investor Relations’tab)

http://www.ictsi.com/content/investor-relations/disclosures

Materials provided in briefings to analysts andmedia

Yes(IR Presentation and Program [Investor RelationsBriefing and Presentation] under Investor Relations’tab)

http://www.ictsi.com/content/investor-relations/ir-presentation--program/

Shareholding structure

Yes(i.e. Shareholdings Structure under About Us, Top 20Stockholders under Share Information of InvestorRelations’ tab and List Top 100 stockholders quarterly,under Disclosures of Investor Relations’ tab [OtherDisclosures to SEC, PSE and Other Pertinent Agencies]http://www.ictsi.com/content/about-us/shareholdings-structure/

http://www.ictsi.com/content/investor-relations/disclosures/

Group corporate structure

YesGlobal Organizational Chart under CorporateGovernance of Investor Relations. It is also part of thedownloadable SEC Form 17-A under Disclosures ofInvestor Relations’ tabhttp://www.ictsi.com/content/about-us/global-organizational-chart/

http://www.ictsi.com/content/investor-

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relations/disclosures/

Downloadable annual report

Yes(Annual Reports under Investor Relations’ tab and SECForm 17-A under Disclosures of Investor Relations’ tab)

http://www.ictsi.com/content/investor-relations/annual-reports/

Notice of AGM and/or EGM

Yes(Disclosures [Notice of Annual Stockholders’ Meeting]under Investor Relations’ tab)

http://www.ictsi.com/content/investor-relations/disclosures/

Company's constitution (company's by-laws,memorandum and articles of association)

Yes(Articles of Incorporation and By-Laws under CorporateGovernance of Investor Relations tab)

http://www.ictsi.com/content/about-us/articles-of-incorporation-and-by-laws/

Should any of the foregoing information be not disclosed, please indicate the reason thereto.N/A because all information are duly disclosed.

6) Disclosure of RPT

Transactions with Related Parties

The table below summarizes transactions with related parties for the last three years, as disclosed in theaccompanying consolidated financial statements:

2014 2015 2016

Related Party Relationship Nature of Transaction Amount

OutstandingReceivable

(Payable)Balance Amount




(Payable)Balance

(In Millions)ICBVSPIA Joint venture Interest-bearing loans and

interests US$64.73 US$115.12 US$94.77 US$209.90 US$66.58 US$276.48Parent CompanyYRDICTL/YICTYPH Non-

controllingshareholder

Port fees (i)

1.46 – 1.10 – 1.77 –Trade transaction (ii) 0.37 (0.01) 0.09 (0.01) – –Management fees (iii) – – 0.23 – 0.22 –Interest-bearing loans (iv) – – – – 21.60 (21.60)Interests on loans (iv) – – – – 0.07 (0.03)

YPG Commonshareholder

Port fees (i)

3.02 (0.77) 3.72 (0.29) 2.36 (0.14)Trade transaction (ii) 1.80 (0.13) 2.09 (0.32) 1.87 (0.02)Purchase of equipment – – 2.58 – – –

DP World Non-controllingshareholder

Management fees (iii)

– – 0.19 – 0.17 –

TecplataNPSA Purchase of additional shares 6.00 – – – – –SCIPSIAsian Terminals,

Inc.Non-


Management fees

0.17 (0.01) 0.16 (0.02) 0.20 (0.03)AGCTLuka Rijeka D.D.

(Luka Rijeka)Non-


Provision of services (v)

0.27 – 0.29 (0.03) 0.37 (0.02)

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2014 2015 2016

Related Party Relationship Nature of Transaction Amount






(Payable)Balance

(In Millions)PICTPremier

MercantileServices(Private)Limited

CommonShareholder

Stevedoring and storagecharges (vi) 3.62 (0.68) 4.47 (0.52) 5.17 (0.03)

Premier Software(Private)Limited

Commonshareholder

Software maintenancecharges 0.01 – 0.01 – 0.01 –

Marine Services(Private)Limited,PortlinkInternational(Private)Limited, andAMI Pakistan(Private)Limited

Commonshareholder

Container handlingrevenue(vii) 0.81 0.08 0.57 0.04 0.52 0.03

LGICTNCT

TransnationalCorp.

Non-controllingshareholder Management fees – – 0.16 (0.16) 0.41 (0.04)

Maintenance and repairs – – 0.04 (0.04) 0.09 (0.02)BIPIAtlantic Gulf and

Pacific Co. ofManila, Inc.(AG&P)

Commonshareholder Rent expense 0.06 – 0.07 (0.01) 0.05 (0.02)

Revenues 2.09 0.03 0.42 0.25 – –Utilities – – – – 0.03 –

(i) YICT is authorized under the Joint Venture Agreement to collect port charges levied on cargoes; port construction fees and facility security fee in accordance withgovernment regulations. Port fees remitted by YICT for YPH /YPG are presented as part of “Port authorities’ share in gross revenues” in the consolidatedstatements of income. Outstanding payable to YPH/YPG related to these port charges are presented under “Accounts payable and other current liabilities”account in the consolidated balance sheets.

(ii) Trade transactions include utilities, rental and other transactions paid by YICT to YPG and YPH.(iii) The BOD of YICT approved a management fee of RMB6.1 million and RMB5.7 million in 2015 and 2016, respectively, allocated among the shareholders namely:

ICTSI, DP World and YPH.(iv) On December 5, 2016, YICT obtained a US$21.6 million (RMB150.0 million) short-term loan from YPH at an interest rate of 4.35 percent per annum and maturity

date of January 25, 2017. The loan was used to refinance YICT’s maturing loan with ABC (see Note 16.2.4).(v) AGCT has entered into agreements with Luka Rijeka, a non-controlling shareholder, for the latter’s provision of services such as equipment maintenance, power

and fuel and supply of manpower, among others. Total expenses incurred by AGCT in relation to these agreements were recognized and presented in theconsolidated income statement as part of Manpower costs, Equipment and facilities-related expenses and Administrative and other operating expenses.

(vi) PICT has entered into an agreement with Premier Mercantile Services (Private) Limited for the latter to render stevedoring and other services,which are settled on a monthly basis.

(vii) Marine Services (Private) Limited, Portlink International (Private) Limited, and AMI Pakistan (Private) Limited are customers of PICT.

The outstanding balances arising from these related party transactions are current and payable without the need fordemand.

Outstanding balances at year-end are unsecured and interest free and settlement occurs in cash. There have been noguarantees provided or received for any related party receivables or payables. For the years ended December 31,2013, 2014 and 2015, the Group has not recorded any impairment of receivables relating to amounts owed by relatedparties. This assessment is undertaken each financial year through examining the financial position of the related partyand the market in which the related party operates.

Aside from the transactions described above, ICTSI does not have any other transactions with its directors,executive officers, security holders or members of their immediate family .

When RPTs are involved, what processes are in place to address them in the manner that will safeguard the interestof the company and in particular of its minority shareholders and other stakeholders?

Although, the Company does not have any other transactions with its Directors, executive officers, security holdersor members of their immediate family Director conflicts of interest, ICTSI ensures that if a Director has an interest ina matter under consideration by the Board, then the Director should not participate in those discussions and the Boardshould follow any further appropriate processes. Individual Directors are reminded through the Revised Manual onCorporate Governance that they should be conscious of shareholder and public perceptions and seek to avoidsituations where there might be an appearance of a conflict of interest.

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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 itsBy-laws.

Quorum Required

Section 5, Article I: At all meeting ofstockholders, annual or special, other thanmeetings a quorum at which is fixed by law, inorder to constitute a quorum there shall bepresent either in person or by proxy holders ofrecord of a majority of the shares of thesubscribed capital stock of the Corporationentitled to vote.

(b) System Used to Approve Corporate Acts

Explain the system used to approve corporate acts.

System Used System used is the one indicated in the By – laws and the Corporation Code

Description

The Company follows its By Laws and provisions of the Corporation Coderelevant to the approval of corporate acts.

In the Company’s By – Laws, it is stated that:

“ARTICLE IIIBOARD OF DIRECTORS

Section 1. The corporate powers, business and property of theCorporation shall be exercised, conducted and controlled by the Board ofDirectors elected annually at the regular meeting of the stockholders and byofficers elected by the Board. [As amended on 25 January 2007 by the Boardof Directors and approved by the Stockholders on 19 April 2007].xxxSection 3. The Board of Directors shall hold regular meetings on thethird week of each month at such time on such dates and at such places asthe Board may prescribe, except that the organizational meeting of the Boardof Directors shall be held immediately after the adjournment of the annualmeeting of stockholders, and at such meeting the Board may elect andappoint officers of the Corporation. No notice shall be required for regularmeetings of the Board.

Section 4. Special meetings of the Board of Directors may be called bythe Chairman or by the President. The Secretary shall call special meeting ofthe Board of Directors when requested in writing to do so by any fourmembers thereof.

xxx

Section 6. At any meetings of the Board of Directors, regular or special,majority of the directors provided in this By-Laws shall continue a quorum forthe transaction of the business.”

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(c) Stockholders’ Rights

List any Stockholders’ Rights concerning Annual/Special Stockholders’ Meeting that differ from those laiddown in the Corporation Code.

Stockholders’ Rights underThe Corporation Code

Stockholders’ Rights not inThe Corporation Code

None None

Dividends

Declaration Date Record Date Payment Date(Most recent)April 20, 2017 May 5, 2017 May 17, 2017

ICTSI has a track record of shareholder returns. Since 2013 to 2017, ICTSI was able to declare dividendsfrom PhP 0.75 - PhP 2.47, which is based on the company's unrestricted retained earnings. Dividends arepayable to all common stockholders, on the basis of outstanding shares held by them, each share beingentitled to the same unit of dividend as any other share. Dividends are payable to stockholders whosenames are recorded in the stock and transfer book as of the record date fixed by the Board. Preferred Ashareholders are entitled to dividends at rates fixed by the Board.

Stockholders’ Participation

1. State, if any, the measures adopted to promote stockholder participation in the Annual/SpecialStockholders’ Meeting, including the procedure on how stockholders and other parties interested maycommunicate directly with the Chairman of the Board, individual directors or board committees. Includein the discussion the steps the Board has taken to solicit and understand the views of the stockholders aswell as procedures for putting forward proposals at stockholders’ meetings.

Measures Adopted Communication Procedure

Stockholders are encouraged to address or askquestions to the Chairman and President or anymember of the Board. In fact, there is always anopen forum every ASM.

Stockholders may directly address/ communicatewith the Board and Executive Officers for anyconcern.

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

The Company’s policy is in accordance with the Corporation Code as well as applicable laws andregulations.

3. Does the company observe a minimum of 21 business days for giving out of notices to the AGM whereitems to be resolved by shareholders are taken up?

a. Date of sending out notices: March 24, 2017 (for the most recent ASM, as disclosed in the PSE andposted in the website)

b. Date of the Annual/Special Stockholders’ Meeting: April 20, 2017 (for the most recent ASM)

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4. State, if any, questions and answers during the Annual/Special Stockholders’ Meeting.

The Chairman opened the floor and gave the stockholders the opportunity to raise questions/issues.

A stockholder, Ms. Nora Borja, congratulated the Chairman and the Board of Directors for a very profitableyear. She suggested that stockholders may be given free shuttle service from Mall of Asia to Solaire Resort &Casino and vice versa during special and annual meeting of the Company. She further suggested that few daysbefore the meeting, the free shuttle service may be posted in the website. The Chairman responded that theywill take note of the suggestion and they will look into that right away.

Another stockholder, Mrs. Cardino, inquired the effect of the protectionist policy of the United States on ICTSIoperations. The Chairman responded that it is too early to see the impact of the campaign. However, if thecampaign of Mr. Trump will be successful, it will be something bad to the rest of the world. Nevertheless, hementioned that it is too early to tell its impact on ICTSI operations.

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

Resolution Approving Dissenting AbstainingApproval of theMinutes of the AnnualStockholders’ Meetingheld on 21 April 2016.

2,282,864,625 None None

Approval of theChairman’s Report (asdelivered by theChairman)

2,282,225,625 639,000 None

Approval of the 2015Audited FinancialStatements

2,282,225,625 639,000 None

Approval/Ratificationof Acts, Contracts,Investments andResolutions of theBoard of Directors andManagement sincethe last AnnualStockholders’Meeting.

2,282,225,625 639,000 None

Election of the Board See table below See table below See table below

Amendment of theSeventh Article of theArticles ofIncorporation

2,100,879,689 171,488,954 10,495,982

Amendment of theEighth Article of theArticles ofIncorporation

2,249,303,089 23,065,554 10,495,982

Appointment of theExternal Auditor 2,281,619,795 944,180 300,650

Results of Election of the Board of Directors:

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In favor Against Abstain Total SharesVoting

Enrique K. Razon, Jr. 2,249,431,940 31,628,405 1,804,280 2,282,864,625Jose C. Ibazeta 2,018,161,293 264,703,332 - 2,282,864,625

Stephen A. Paradies 1,980,863,577 302,001,048 - 2,282,864,625Andres Soriano III 2,004,386,224 278,478,401 - 2,282,864,625Jon Ramon Aboitiz 1,975,568,787 307,295,838 - 2,282,864,625

Octavio Victor R. Espiritu 2,130,708,106 152,156,519 - 2,282,864,625Joseph R. Higdon 2,281,871,305 993,320 - 2,282,864,625

The proxy votes were validated by ICTSI’s stock and transfer agent, an independent third party.

6. Date of publishing of the result of the votes taken during the most recent AGM for all resolutions:Results are published on the same day as the ASM. For the most recent ASM, date of publication was April21, 2017.

(d) Modifications

State, if any, the modifications made in the Annual/Special Stockholders’ Meeting regulations during the mostrecent year and the reason for such modification:

Modifications Reason for Modification

None None

(e) Stockholders’ Attendance

(i) Details of Attendance in the Annual/Special Stockholders’ Meeting Held:

Type ofMeeting

Names of Boardmembers / Officers

present

Date ofMeeting

VotingProcedure (bypoll, show ofhands, etc.)

% of SHAttendingin Person

% of SHin Proxy

Total % ofSH

attendance

Annual

Name of Director/sEnrique K. Razon, Jr.Stephen A. ParadiesOctavio Victor R.EspirituAndres Soriano IIIJose C. Ibazeta

Name of OfficersMartin O’NeilRafael D. Consing JrJose Joel M.SebastianBenjamin M.Gorospe IIISilverio Benny TanLisa Marie EscalerJose Manuel M. DeJesusGuillaume Lucci

April 20,2017

A motion wasmade (whichwas approvedwith noobjection fromanyone) thatsince there wereonly 7 nomineesfor the 7available seats,the corporatesecretary bedirected to castthe votes for the7 nominees(except for theproxies withspecificinstructions),and they bedeclared dulyelected.

2.81% 83.64% 86.45%

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Special None N/A N/A N/A N/A N/A

(ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes at theASM/SSMs?

The votes were counted by the stock transfer agent, an independent party, during the proxy validation lastApril 11, 2017. These formed part of the stockholders' votes on every resolution during the AGM.

(iii) Do the company’s common shares carry one vote for one share? If not, disclose and give reasons for anydivergence to this standard. Where the company has more than one class of shares, describe the voting rightsattached to each class of shares.

Yes, common shares carry “one share one vote”. Only common shares have voting rights. Preferred A and Bhave no voting rights.

(f) 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 ofproxiesNotarySubmission of ProxySeveral ProxiesValidity of ProxyProxies executed abroadInvalidated ProxyValidation of ProxyViolation of Proxy

Proxy submission (to the Corporate Secretary) shall not be laterthan ten (10) days prior to date of stockholders’ meeting (SECMemorandum Circular No. 5, series of 1996)

The deadline of proxy submission is indicated in the notice andagenda (Notice and Agenda must be submitted to PSE at least ten(10) trading days prior to the record date fixed by ICTSI (Section 7of the 2003 PSE Disclosure Rules).

For ASM 2017, deadline of submission forshareholders under PCD was on April 7, 2017; and

Shares lodged under PCD should secure acertification from their respective brokers.

Proxy validation should not be less than 5 days prior to annualstockholders’ meeting (SEC Memorandum Circular No. 5, series of1996)

The Corporate Secretary and the transfer agent (STSI) will validatethe proxies received.

Proxy validation was held at the Harbor Lounge, 4FICTSI Admin. Bldg on April 11, 2017.

It is ICTSI’s policy that:

The Board promotes shareholder rights in accordance with law,remove impediments to the exercise of shareholders rights. Theexercise of shareholders’ voting rights and solution of collectiveact on problems through appropriate mechanisms areencouraged in accordance with applicable law.

Excessive and other administrative or practical impediments toshareholders participation in meetings and/or voting in person

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are removed.

(g) Sending of Notices

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

Policies Procedure

ICTSI By-laws states that notice of annual meetingof stockholders shall be sent at least ten (10) daysbefore meeting date.

Distribution of Definitive Information Statementtogether with all other soliciting materials to allstockholders of record date must at least be fifteen(15) business days prior to the scheduled date ofthe stockholders’ meeting (SRC Rule 20(4)(f) / SRCRule 17.1(b)(3)(b)).

The SEC Form 20-IS or DIS and the audited FS arein CD format while the notice and agenda andproxy form are in hard copies. These are sent viacourier. In the printed notice, it states that astockholder can request, free of charge, for ahardcopy through written request addressed tothe Corporate Secretary and send via email or fax.

(h) Definitive Information Statements and Management Report

Number of Stockholders entitled to receiveDefinitive Information Statements andManagement Report and Other Materials

1,424 stockholders as of record dateMarch 17, 2017

Date of Actual Distribution of DefinitiveInformation Statement and Management Reportand Other Materials held by marketparticipants/certain beneficial owners

March 14, 2017

Date of Actual Distribution of DefinitiveInformation Statement and Management Reportand Other Materials held by stockholders

March 24, 2017

State whether CD format or hard copies weredistributed

CD format with 1 hard copy of the notice andagenda of the meeting and the Proxy Form

If yes, indicate whether requesting stockholderswere provided hard copies

Yes, stockholders, who prefer hardcopies, wereable to request for the same.

(i) 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 forelection/re-election.

Yes

The auditors to be appointed or re-appointed. Yes

An explanation of the dividend policy, if any dividend is to be declared. Yes

The amount payable for final dividends.No, actual amount

was announcedduring the ASM

Documents required for proxy vote.Yes

Proxy form attachedto the Notice

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

The final amount of the dividends is determined and approved by the Board during their meeting immediatelypreceding the ASM. Final amount of dividends payable was announced during the ASM.

2) Treatment of Minority Stockholders

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

Policies Implementation

The Company respects and values its minorityshareholders. The Company recognizes cumulative voting.

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

Yes, the company’s articles and by – laws as well as the nomination committee charter allow minority stockholdersto nominate candidate for board of directors. Please see Section 10, Article I of ICTSI’s By-Laws(http://www.ictsi.com/admin/images/download/07292014083218Amended%20By-Laws%20June%202010.pdf#page=4)

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 thisresponsibility, if it has been assigned to a committee.

Major company announcements are reviewed by the Investor Relations Office and Corporate Legal Department.The approval would depend in the nature of the announcement.

2) Describe the company’s investor relations program including its communications strategy to promote effectivecommunication 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 The objective of ICTSI’s investor relations program is to buildunderstanding and relationships of trust with financial media,analysts and shareholders, increase transparency and toachieve an appropriate valuation of ICTSI’s stock and liabilitiesin the capital market

(2) Principles We work toward our objectives through continuous, open andtargeted dialog with all capital market participants. With regardto capital market professionals, the focus is on fund managers,investment fund, pension fund and insurance analysts, as wellas banks/brokers and their sales and research teams. Naturallywe also maintain contacts with our private investors.

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(3) Modes of Communications The company communicates through various methods:Company announcements Through press releases Through corporate disclosure with regulatory agencies

Company website Updated archive of historical financial and operational

information Uploading of major company announcements

Meetings Face to face meetings with key investors and analysts Investment conferences arranged by banks/investment

houses Site visits by stakeholders Quarterly Investor briefing conference calls

The latest investors’/analysts’/media briefing conference was forthe First Quarter 2017 held last May 9, 2017, at 5:00pm throughan international dial in facility with available lines in thePhilippines, Hong Kong, Singapore, United Kingdom, UnitedStates and Australia.

The recording of the conference call was made available last May9-May 11, 2017 and the presentation used may beviewed/downloaded from the ICTSI website.

(4) Investors Relations Officer Rafael D. Consing, Jr.Senior Vice President & Chief Financial Officer, andCompliance Officer3/F ICTSI Administration BuildingManila International Container TerminalMICT South Access Road1012 Manila, PhilippinesTelephone: 632 / 247 8221Facsimile: 632 / 247 8035Email: [email protected]

Arthur R. TabuenaDirector – Treasury and Investor Relations3/F ICTSI Administration BuildingManila International Container TerminalMICT South Access Road1012 Manila, PhilippinesTelephone: 632 / 245 2255Facsimile: 632 / 247 8035, 632/ 245 2595Email: [email protected]

Maricel Laud-BatallerTreasury Officer3/F ICTSI Administration BuildingManila International Container TerminalMICT South Access Road1012 Manila, PhilippinesTelephone: 632 / 247 8215Facsimile: 632 / 247 8035

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3) What are the company’s rules and procedures governing the acquisition of corporate control in the capitalmarkets, and extraordinary transactions such as mergers, and sales of substantial portions of corporate assets?

Extraordinary transactions such as capital market transactions, mergers, and sales of substantial portions ofcorporate assets are elevated to the Board for their approval.

Name of the independent party the board of directors of the company appointed to evaluate the fairness of thetransaction price.

The independent party appointed by the Board to evaluate the fairness of the transaction price may vary pertransaction. For instance, the most recent equity transaction which was the sale of treasury shares in May 2013was evaluated by UBS and CLSA Limited and UBS AG. The latest capital market transactions which were two (2)Liability Management Exercises (LME) in January 2015 to reduce funding cost, lengthen duration of outstandingdebt and optimize capital structure were evaluated by Citibank and HSBC.

L. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

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

CSR initiatives are undertaken by both ICTSI, the parent company, and ICTSI Foundation, Inc.

The ICTSI Foundation, Inc. implements programs and projects under three (3) development pillars: Education,Community Welfare Assistance and Sports Development.

The priority areas of its operation are the public schools and host communities of the seven (7) ICTSI ports inManila, Subic, Bauan, Batangas, General Santos, Davao and Misamis Oriental. But, as Special Projects, theFoundation also undertakes projects outside these areas, in response to requests for assistance.

The implementing partners of ICTSI Foundation are: DSWD, Department of Education (DepEd), DENR, concernedbarangay councils of ICTSI’s host communities and PBSP, among others.

2016 Accomplished Projects/Activities

DEVELOPMENT PILLAR/PROJECT TYPE

PROJECT NAME AREA/ACTIVITIES BENEFICIARIES

Community WelfareAssistance

Parola Solid Waste ManagementProject

Description:Now on its 4th year, this Project isa community-based solid wastemanagement program inpartnership with the DENR,DSWD, Barangay Councils ofBarangays 20 and 275, PBSP andDepartment of Public Services ofthe City of Manila.

The objective is to address theindiscriminate garbage litteringand dumping in the two (2)Parola communities whichendanger the health and safetyof the residents and theenvironment, as well. Throughthe convergence of the efforts ofthe project partners and the

Manila

Teambuilding forthe ParolaVolunteerEcopatrols

IEC AwarenessSeminars

BusinessOrientationSeminars

Waste MaterialRecyclingCompetition

Wall gardeninginitiated by theEcopatrols

Directbeneficiaries: 78Parola VolunteerEcopatrols

595 Parolaresidents attendedinformation,educationcommunication(IEC) seminars onRA 9003.

99

organization and deployment ofcommunity-based Volunteer EcoPatrols, the establishment of aneffective solid wastemanagement system is aimed incompliance with Republic Act9003.

Livelihood Manual from HouseholdWastes

Description: ICTSI Foundationcontracted the services of thePhilippine Business for SocialProgress to create a manual ofproducts from household wastesthat can be made and sold toprovide an additional source ofincome among the ParolaVolunteer Ecopatrols

Manila Parola Community

Medical Missions

Description:This project aims to provideimmediate medical services(check-up, referrals andmedicines) in communitieswhere ICTSI operates inpartnership with Local HealthUnits / Municipal Health Offices.

Manila 364 Parola and IslaPuting BatoCommunity

Bauan, Batangas 450 Residents ofBrgy. Aplaya inBauan, Batangas.

Misamis Oriental 405 Residents ofBrgy.Sugbongcogon,Tagoloan MisamisOriental

General Santos 300 Residents ofBrgy. Labangal,General SantosCity

Christmas Outreach Program

Description:

An Annual Gift-Giving to selectedinstitutions and homes for theabandoned elderly, persons withdisability, or children in ICTSI’sareas of operations

Manila 1,441 children inParola day carecenters andselectedcharitableinstitutions inMetro Manila

Olongapo City 75 residents atPREDA Foundation

Bauan, Batangas 250 indigentSenior Citizens inBrgy. San Roque,Bauan, Batangas

Misamis Oriental 240 day carechildren in Brgy.Sta. Ana,Tagoloan, MisamisOriental

Davao City 46 Aeta-Manobo

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tribe familiesGeneral Santos City 28 residents at St.

Vincent StrambiHome for theAged

ICTSI Employee VolunteerismProgram

Description:ICTSI Foundation’s Program topromote altruism and volunteerismamong ICTSI employees

Manila 227 ICTSIEmployees andfamiliesparticipated in 8volunteeringactivities

Potable Water System Project San Martin, Bamban, Tarlac 300 households inSan Martin,Bamban, Tarlac

Potable Water System Project Sitio Cogunan, San Miguel,Bulacan

400 residents ofSitio Cogunan

Safe Motherhood Caravan

Description:

A seminar for women whichcovered topics on responsibleparenthood, family budgeting, andfamily planning

Manila 379 Women ofreproductive ageresiding in Parolaand Isla PutingBato

Marikina Watershed ReforestationProject

Description:

This covers reforestation of 2hectares with native trees and theenhancement of a 3-hectare areaof agro-forestry with fruit bearingtrees in Brgy. Calawis, Antipolo City

Marikina 30 farmers withinMarikinaWatershedcommunities

TESDA Scholarships for dependentsof ICTSI Maintenance and SecurityGroup

Manila 10 immediatedependents ofICTSI security andmaintenancegroup

Construction of a dormitory at theBataan Treatment andRehabilitation Center

Bataan 120 residentsseeking treatmentat the BataanTreatment andRehabilitationCenter

Support to Philippine DisasterResilience Foundation

Donation ofPhp12M for theconstruction of aDisasterCommand Centerin Clark,Pampanga

Assistance to Typhoon LawinVictims

Cagayan Province 500 residents inTuao, Enrile, andAmulung in

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Description: Provision of shelterkits to families affected by TyphoonLawin. Assistance was coursedthrough the Philippine Business forSocial Progress

Cagayan Province

Renovation of the DelpanCommunity Precinct Station 2

Manila

Scholarship ProgramLocal Scholarship Program:

Fund provision for dailyallowance (meals andtransportation), uniforms,shoes, socks, school supplies,authorized school fees/tuitionfees, books, school projects andother miscellaneous expenses.

International Scholarship Program:ICTSI fund provision andmanagement for scholars’tuition, miscellaneous fees,books, clothing, dormitory fees,travel and meal allowance.

IEVP Scholarship Program:ICTSI confidential employeesprovide educational support toselected children of ICTSI’s on-calland rank and file employees

Manila, Bauan, Batangas,Olongapo, MisamisOriental, General Santos,Davao

Northeastern University,Boston, USA

ICTSI Employee VolunteersProgram (IEVP) Scholarship

45 High SchoolStudents75 CollegeStudents

2 College Students

4 High SchoolStudents

Education Project AIDE (Assistance to ImproveDaycare Education):

Description:

Provides assistance to day carecenters through:

1.) Facility Improvement2.) Professional development

of day care teachers3.) Provision of reading

materials andmanipulative toys

Olongapo City 203 students in 6day care centers

Davao City 40 students in 1day care center

San Miguel Bulacan 49 students in 2day care centers inBrgy. Sibul, SanMiguel, Bulacan

Project TEACH (TeacherEnhancement and CapabilityHoning)

Description:

Provides relevant seminars andtraining programs to public schoolteachers

Manila

Topic: Character FormationSeminar

42 teachers atRosauro AlmarioElementary Schooland Raja SolimanScience andTechnology HighSchool

Bauan, Batangas

Topic: Character FormationSeminar

133 Teachers atBauan TechnicalHigh School

Misamis Oriental 30 Teachers at

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Topic: Web DevelopmentTraining

Tagoloan NationalHigh School

Olongapo City

Topic: Music andMovement, Arts and Crafts

55 Day CareTeachers and 10representativesfrom City SocialWelfareDevelopmentOffice

Technology and LivelihoodEducation Assistance

Description:

Support to DepEd’s K-12implementation through theupgrading of the public school’stechnical-vocational programs byrenovating TLE laboratories andproviding equipment and tools

Bauan, Batangas: Cookery 330 students atBauan TechnicalHS

Manila: Carpentry and CivilTechnology Works

3,960 students atRaja SolimanScience andTechnology HighSchool

General Santos City:Hospitality Services

143 studentsLabangal NationalHigh School

School Facility Improvement

Description:

Installation of floor tiles andconstruction of toilets

Calamba, Laguna 340 students atSan CristobalElementary School

Assistance to SPED DepEd

Description:

This project is ICTSI Foundation’sresponse to the needs of thespecial education programs inpublic schools

Bauan, Batangas 11 students atBauan East CentralSchool

31 students atManghinaoElementary School

My Computer Nook

Description:

This project supports theDepartment of Education’s thrustto strengthen the use of ICT inschools by way of providingcomputers, LCD projectors, andtraining on ICT-integration

Tagum City 928 students atJose TuazonNational MemorialHigh School

My Reading Nook

Description:

This project upgrades and improveslibraries of public schools by way ofrenovating existing libraries,providing storybooks and updatedreference materials. This projectalso gives storytelling workshop forelementary school teachers.

Davao City 2,000 F. BangoyElementary School

Tagum City 965 students atMadaumElementary School

General Santos City 1,400 LabangalElementary School

Olongapo City 241 students SitioKanawanIntegrated School

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Support to Alternative LearningSystems

Description:

The Alternative Learning System(ALS) Accreditation and EquivalencyProgram is an out-of-school youtheducation program designed by theDepartment of Education (DepEd)to provide better opportunities toschool drop-outs who quit schooldue to poverty and other personalreasons. ICTSI Foundation supportsthe honorarium of 3 ALS instructors

Davao City 3 instructors andaround 250 ALSlearners at F.Bangoy NationalHigh School

Training and CapacityBuilding

Environmental Sustainability andClimate Change

Description:

A seminar which covers topics onRA 9003, climate change, SupremeCourt Mandamus on Manila Bay,

Metro Manila 479 students atRosauro AlmarioElementary School

132 students at T.Paez ElementarySchool, Pasay City

120 teachers atTimoteo PaezIntegrated HighSchool, Tondo,Manila

746 students atJose Abad SantosHigh School,Manila

128 students atParanaqueNational HighSchool

112 students atTamboElementary School

Sports DevelopmentAssistance

ICTSI Amateur Golf Program 7 female amateurplayers

Manila Little League

Description:

Sponsorship of participation fees,airfare, meals, accommodations,softball equipment and materials

19-memberdelegation(athletes andcoaches) whocompeted at theAsia PacificRegionalChampionships inSingapore

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2017 Planned Projects/Activities

DEVELOPMENTPILLAR/ PROJECT

TYPEPROJECT NAME AREA BENEFICIARIES

Education

Philippine ScholarshipProgram

ManilaBauan, BatangasOlongapo CityMisamis OrientalDavao CityTagum CityGeneral Santos City

75 college scholars45 high school scholars

IEVP Scholarship Program Manila 4 high school scholarsInternational ScholarshipProgram Cohort 1

Boston, Massachusetts,USA

2 college students

International ScholarshipProgram Cohort 2

Selection to be held in:ManilaBauan, BatangasOlongapo CityMisamis OrientalDavao CityTagum CityGeneral Santos CityCaviteCebu

1 college scholarSelection to begin in August 2017

Project AIDE (Assistanceto Improve Day CareEducation)

Bauan, Batangas

Olongapo City

Davao City

4 day care centers

10 day care centers

8 day care centersTechnology andLivelihood EducationAssistance

Bauan, Batangas Bauan National Agricultural andVocational High School

Science and ResearchLaboratory ImprovementProject

Manila Raja Soliman Science andTechnology High School

My Computer Nook General Santos CityProject TEACH

Topic: CharacterEducation Seminar

Olongapo CityDavao CityTagum CityGeneral Santos CityMisamis Oriental

Public school teachers

My Reading NookOlongapo City Mabayuan Elementary SchoolCalamba, Laguna San Cristobal Elementary School

Assistance to SPED Misamis OrientalBauan, Batangas

Tagoloan Central SchoolWest Bauan Central School

Alternative LearningSystem

Davao City F. Bangoy National High School

Construction of a 2-classroom schoolbuilding

Sarangani Province Calay IP School

Community WelfareAssistance

Parola Solid WasteManagement Project

Manila Parola and Isla Puting Batocommunities

Medical Mission ManilaBauan, BatangasOlongapo CityDavao City

Host communities of ICTSI terminals

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General Santos CityMisamis Oriental

Christmas OutreachActivity

ManilaBauan, BatangasOlongapo CityDavao CityGeneral Santos CityMisamis Oriental

To be identified

Coastal Clean up Manila Manila BayPotable Water SystemProject

Tarlac 300 households at Sitio San Martin,Bamban, Tarlac

CommunityElectrification Project

Tarlac 65 households at Sitio Batchon,Sto. Nino, Bamban, Tarlac

ICTSI EmployeeVolunteerism Activities

Manila Kanlungan ni Maria, Antipolo, Rizal

Madre de Amor HospiceFoundation, Los Banos, Laguna

Brigada Eskwela 2017 (PedroGuevara Elementary School)

Other beneficiaries to be identified

CapacityDevelopment

Disaster PreparednessOrientation Course withthe Metro ManilaDevelopment Authority

Manila Target: 2,100 residents at Parolaand Isla Puting Bato

Sports DevelopmentAssistance

ICTSI Amateur GolfProgram

Philippines and abroad 8 amateur golf players

Manila Little League To compete at the 2017Pony International 18-UGirls Softball World Serieson July 24-30, 2017 atHemet, California USA.

12 players, 3 coaches

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

Board Committees

There is an annual performanceself-evaluation by the AuditCommittee (AC) as provided in theAC Charter.

ICTSI’s Revised Manual providesfor a self – evaluation system.

The AC performance evaluation isbased on its performance of itsresponsibilities listed in the ACCharter. A quantitative rating of 1 to10 is used and qualitative descriptionof each rating such as poor,satisfactory, very satisfactory andoutstanding is provided.

The evaluation of the BoardCommittees shall be based on theCommittee Charters.

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Individual Directors

Based on the Revised Manual onCorporate Governance, the Boardhas established an internal ratingand evaluation system.

In accordance with Section 2.7 ofRevised Manual on CorporateGovernance: transparency,accountability, fairness, leadership,prudence and integrity

CEO/President

Based on the Revised Manual onCorporate Governance, the Boardhas established an internal ratingand evaluation system.

In accordance with the RevisedManual on Corporate Governanceand the Amended By-Laws: generalsupervision, administration &management of the business

N. INTERNAL BREACHES AND SANCTIONS

Discuss the internal policies on sanctions imposed for any violation or breach of the corporate governance manualinvolving directors, officers, management and employees

Violations Sanctions

The Board has established an internal rating andevaluation system to determine and measurecompliance with the RMCG.

The Board provides for sanctions for willful breach ofthe RMCG depending on gravity of the violation, andthe relative importance and practicality of theprovision violated.

· 1963 and his Master´s Degree in Business Administration from the University of San ... Soriano...

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