COVER SHEET · 13. The aggregate market value of the voting stock held by non-affiliates of the...
Transcript of COVER SHEET · 13. The aggregate market value of the voting stock held by non-affiliates of the...
COVER SHEET
0 0 0 0 0 4 8 9 0 9
S.E.C. Registration Number
L O R E N Z O S H I P P I N G
C O R P O R A T I O N
(Company's Full Name)
2 0 T H F L O O R , T I M E S P L A Z A B L D G . ,
U N I T E D N A T I O N S A V E N U E ,
E R M I T A , M A N I L A
(Business Address: No. Street City / Town / Province)
AGNES N. DOMINGO 8527-5555
Contact Person Company Telephone Number
1 2 3 1 2 0 1 9 1 7 A 0 9 0 8 2 0 2 0
Month Day Year FORM TYPE Month Day Year
Fiscal Year Annual Meeting
Secondary License Type, If Applicable
Dept. Requiring this Doc. Amended Articles Number/Section
Total Amount of Borrowings
Php 903.26 million
Total no. of Stockholders Domestic Foreign
To be accomplished by SEC Personnel concerned
File Number LCU
Document I.D. Cashier
S T A M P S
Remarks = please use black ink for scanning purposes
SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A
ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141
OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the year ended: December 31, 2019
2. SEC Identification Number: 48909 3. BIR Tax Identification No.: 000-628-958-000 4. Exact name of issuer as specified in its charter: LORENZO SHIPPING CORPORATION
5. Province/Country of Incorporation/Organization: Philippines
6. Industry Classification Code: ____________
7. Address of Principal Office: 20th Floor, Times Plaza Building, United Nations Avenue, Ermita,
Manila Postal Code: 1000 8. Registrant’s telephone number, including area code: (632) 8567 2171 to 80 9. Former name, former address and former fiscal year, if changed since last report: N/A
10. Securities registered pursuant to Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt
Outstanding
Authorized Capital Stock (Common Shares) 991,183,999 No. of shares of common stock outstanding (Class U), net of treasury shares
554,642,251
11. Are any or all of these securities listed on a Stock Exchange? Yes (x) No ( ) If yes, state the name of such stock exchange and the classes of securities listed therein: Philippine Stock Exchange Common Stock – Class U
12. Check whether the issuer:
a) Has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 hereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports): Yes (x) No ( )
b) Has been subject to such filing requirements for the past ninety (90) days: Yes (x) No ( )
13. The aggregate market value of the voting stock held by non-affiliates of the registrant is P45.884M as of December 31, 2009.
DOCUMENTS INCORPORATED BY REFERENCE
14. If any of the following documents are incorporated by reference, briefly describe them and identify the part of SEC Form 17-A into which the document is incorporated.
N/A
PART 1 – BUSINESS AND GENERAL INFORMATION
ITEM 1 - BUSINESS Description of Business A. Business Development
1. Form and year of organization
Lorenzo Shipping Corporation (LSC) was incorporated on 17 October 1972 by the Go Family headed by Jose D. Go, Sr., primarily to engage in domestic inter-island cargo handling business. The Company has been an active participant in containerized cargo business and has played a significant role in the domestic shipping industry.
2. The Company has no record of any bankruptcy, receivership or similar proceedings during the
past three years.
3. Material reclassification, merger or purchase or sale of significant amount of assets. The Company has not undergone any material reclassification, merger, consolidation nor purchase nor sale of a significant amount of its assets that are not in the ordinary course of business.
B. Business of Issuer
1. Description of Registrant
i. Lorenzo Shipping Corporation was founded and incorporated in 1972. The Company owns and operates vessels with which it provides domestic inter-island cargo liner services to the general public. The Company’s business focus has evolved from that of being a break-bulk cargo carrier to a fully containerized cargo shipping company.
Lorenzo Shipping Corporation owns a fleet of five (5) vessels and four (4) vessels under a transport service contract deployed to the key ports in Manila, Visayas and Mindanao. The Company’s vessels have a capacity ranging from 300 TEUs to 797 TEUs with speeds of 11 knots to 15 knots. LSC owns various equipment and facilities to efficiently handle customers’ cargoes including a) land-based equipment such as forklifts, top lifts and trucks and b) container yards and warehouses in its branches and agencies.
ii. The Company is engaged solely in domestic inter-island cargo liner services, thus, the
foreign sales requirement is not applicable.
iii. Lorenzo Shipping Corporation markets its services through a network of branches and agencies nationwide. The network is comprised of six branches: Cebu, Davao, General Santos, Cotabato, Iloilo, Cagayan de Oro and three agencies: Zamboanga, Dumaguete and Bacolod. Manila operations, under the Corporate Office, handles all inbound and outbound volume in Manila.
LSC provides 20-foot and 40-foot dry containers to its customers in which they can load their cargoes to various ports. LSC also carries rolling cargoes such as heavy equipment, trucks and vehicles as well as non-containerized cargoes such as steel products and bridging materials.
iv. Competitive business conditions and the registrant’s competitive position in the industry
and methods of competition:
LSC is one of the key players in the domestic containerized cargo shipping industry. It operates in the major ports of the country and deploys a fleet of nine (9) vessels. LSC prides itself as a reliable transport provider and through its various affiliate companies, is also able to offer door-to-door shipping services. LSC considers other containerized cargo shipping companies as its competitors such as 2GO Group, Inc. (2GO), Philippine Span Asia Carrier Corp. (PSACC), Solid Shipping Lines, Inc. and Oceanic Container Lines, Inc. among others. 2GO caters to both passenger and cargo market while the rest are cargo carriers. Competition among domestic lines is intense, given the overcapacity of vessels aggravated by new entrants in the industry. The industry is also governed by the rules and regulations of the Maritime Industry Authority (MARINA). LSC is a member of the Philippine Liner Shipping Association (PLSA) whose members account for around 80% of the total containerized volumes nationwide.
v. Sources and availability of raw materials and the names of principal suppliers:
Major suppliers of fuel, spare parts, container vans and others.
Name of Supplier Items Supplied
Marine Fuels Philippines Fuel and lubricants
Manila North Harbour Port, Inc. Terminal operator/ cargo handler
NMC Container Lines, Inc. Vessel slot provider
Roadlink Solutions, Inc. Hauling services
Transpartner Trucking Services Hauling services
Northern Star Energy Corp Fuel
Keppel Subic Shipyard, Inc. Vessel Repair
Oroport Cargo Handling Services Inc. Cargo handler
Pioneer Insurance & Surety Corp. Insurance
Central Inter-Transport Logistics, Inc. Cargo handler
Man Energy Solutions Phil. Vessel repair and parts
Cebu Integrated Arrastre Craneage Services
DKL Shipping Agency Agency commission and hauling services
Prinz Dennis Trucking Services Hauling services
D.M. Baldazo Trucking Hauling services
Oroport Cargo Handling Services, Inc. Cargo handler
Magsaysay Shipmanagement, Inc. Service fees
Lubri-Chem Philippines Distributors, Inc. Lubricants
Asiaport Equipment and Logistics., Inc Lift on/off and shifting services
Mindanao International Container Terminal Cargo handler
vi. Major customers/clients of LSC
Top 20 Customers Nestle Philippines, Inc, Lamsan, Inc. Coca-Cola Beverage Philippines, Inc. Pacific Roadlink Logistics Inc. URC Group 2Go Group Inc. Del Monte Philippines, Inc Century Pacific Food, Inc. One Stop Logistics Solutions Inc. Procter and Gamble Phil., Inc. Pepsi- Cola Products Philippines Inc. Deco Arts Marketing, Inc. Icebox Logistics Services, Inc. Danny Julian Tanduay Distillers, Inc. Philmico Foods Corporation Catsen/Ila Express ES Marketing Ocean Network Express PTE.LTD Taiheiyo Cement Phil., Inc. The business is not dependent upon a single customer or a few customers, the loss of any or more of which will not have material adverse effect on the company.
vii. The business of the company is not in any way dependent on related parties’ transactions.
viii. Licenses, Concessions, Labor contracts, including duration;
a) With Maritime Industry Authority (Marina) registration
LSC vessels are duly registered with MARINA and subjected to regular MARINA survey and ISM audits to ascertain its adherence to vessel and manning safety standards. The Company has been granted a company Certificate of Public Convenience (CPC) for the five (5) vessels under RA 9295 valid for 25 years from June 7, 2005 to June 7, 2030 by the MARINA to service domestic ports of call. For the transport service contract with NMCCLI, vessels are duly registered with MARINA and subjected to regular MARINA survey and ISM audits to ascertain to adherence to vessel and manning safety standards. The Company has been granted a company Certificate of Public Convenience (CPC) for the four (4) vessels under RA 9295 valid for 15 years from October 2015 to June 7, 2030 by the MARINA to service domestic ports of call.
b) Labor contracts
For the sea-based employees, the Collective Bargaining Agreement shall be in full force and effect until 31 August 2020 for licensed crewmembers, and until 15 September 2020 for unlicensed crewmembers. For the land-based employees, the Collective Bargaining Agreement (CBA) shall be in full force and effect until 15 February 2022.
c) Licenses and Franchises
For licenses and franchises of vessels, while principal terms are anchored solely on seaworthiness of the vessel (of which registrant is already ISM-Certified by regulatory authority) only the following expiration dates are disclosed:
M/V LORCON MANILA
Certificates and Licenses Date Issued Date Expiry
Status
Certificate of Ownership (CO) 11/08/10 Permanent
Certificate of Vessel Registry (CVR) 11/08/10 Permanent
Certificate of Public Convenience (CPC) 06/07/05 06/07/30 Valid
Cargo Ship Safety Certificate
01/17/19
09/06/20
Valid
Coastwise License (CWL) 10/24/18 10/23/20 Valid
Radio Station License (RSL) 10/27/17 10/25/21 Valid
Coastwise Loadline Certificate (CLLC) 01/27/17 01/04/22 Valid
M/V LORCON GENERAL SANTOS
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Ownership (CO) 10/01/13 Permanent
Certificate of Vessel Registry (CVR) 08/13/12 Permanent
Certificate of Public Convenience (CPC) 06/07/05 06/07/30 Valid
Cargo Ship Safety Certificate 1/16/2020
7/18/20
Valid
Coastwise License (CWL) 08/14/19 08/15/20 Valid
Radio Station License (RSL) 08/16/18 08/16/20 Valid
Coastwise Loadline Certificate (CLLC) 09/29/15 09/22/20 Valid
M/V LORCON DUMAGUETE
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Ownership (CO) 05/14/10 Permanent
Certificate of Vessel Registry (CVR) 05/14/10 Permanent
Certificate of Public Convenience (CPC) 06/07/05 06/07/30 Valid
Cargo Ship Safety Certificate 07/27/19 06/13/20 Valid
Coastwise License (CWL) 04/22/20
05/13/21
Valid
Radio Station License (RSL) 07//26/18 05/16/20 Valid
Coastwise Loadline Certificate (CLLC) 07/28/15 03/19/20 Valid
M/V LORCON BACOLOD
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Ownership (CO) 06/10/14 Permanent
Certificate of Vessel Registry (CVR) 06/10/14 Permanent
Certificate of Public Convenience (CPC) 06/07/05 06/07/30 Valid
Cargo Ship Safety Certificate 05/15/18
11/21/20
Valid
Coastwise License (CWL) 06/10/18 06/9/21 Valid
Radio Station License (RSL) 07/09/18 07/31/20 Valid
Coastwise Loadline Certificate (CLLC) 03/18/15 01/17/24 Valid
M/V LORCON ILOILO
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Ownership (CO) 05/07/15 Permanent
Certificate of Vessel Registry (CVR) 05/07/15 Permanent
Certificate of Public Convenience (CPC) 06/07/05 06/07/30 Valid
Cargo Ship Safety Certificate 03/26/20
6/30/20
Valid
Coastwise License (CWL) 4/29/20 5/13/21 Valid
Radio Station License (RSL) 05/11/18 05/14/20 Valid
Coastwise Loadline Certificate (CLLC) 05/19/15 01/09/19 Valid
M/V GENERAL NATIVIDAD
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Public Convenience (CPC) 12/12/18 11/1/2021 Valid
Cargo Ship Safety Certificate 02/14/20
02/06/21
Valid
Coastwise License (CWL) 06/11/19 07/29/20 Valid
Radio Station License (RSL) 13/11/18 07/16/20 Valid
Coastwise Loadline Certificate (CLLC) 02/14/20 01/09/19 Valid
M/V GENERAL EVANGELISTA
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Public Convenience (CPC) 12/12/18 11/1/2021 Valid
Cargo Ship Safety Certificate 10/10/19
07/12/20
Valid
Coastwise License (CWL) 10/30/19 12/18/20 Valid
Radio Station License (RSL) 11/29/19 11/21/21 Valid
Coastwise Loadline Certificate (CLLC) 10/26/17 10/8/22 Valid
M/V GENERAL ROMULO
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Public Convenience (CPC) 12/12/18 11/1/2021 Valid
Cargo Ship Safety Certificate 12/16/19
11/12/20
Valid
Coastwise License (CWL) 12/17/19 12/21/21 Valid
Radio Station License (RSL) 11/29/19 11/21/21 Valid
Coastwise Loadline Certificate (CLLC) 02/09/18 01/21/23 Valid
M/V RASALAS
Certificates and Licenses Date Issued Date Expiry Status
Certificate of Public Convenience (CPC) 12/12/18 11/1/2021 Valid
Cargo Ship Safety Certificate 03/21/19
07/18/20
Valid
Coastwise License (CWL) 05/27/19 06/14/21 Valid
Radio Station License (RSL) 11/08/19 11/21/21 Valid
Coastwise Loadline Certificate (CLLC) 02/09/18 01/21/23 Valid
ix. The Company has no pending request for approval from any government body.
x. There is no record of cost incurred for research and development.
xi. Costs and effects of compliance with environmental laws The Company complies with the Anti-Pollution Act, which requires the control of smoke emission coming from the vessels and disallows spilling or dumping of oil into the sea. The Company complies with such regulations through the effective utilization of equipment such as bridge sludge tank. However, the cost of such equipment is not separately accounted for in the company’s books. The cost of compliance is not significant in amount.
xii. Total number of employees and number of full time employees
As of 31 December 2019, the total sea-based manpower is 59 and the total land-based manpower is 84. The registrant does not anticipate increasing its manpower for the ensuing year.
ITEM 2 - PROPERTIES
The description, ownership and limitation on ownership, of the principal properties of the company are
shown below.
A. Vessel in Operations:
VESSEL/YEAR BUILT OWNER
SHIP STATUS
GRT & DWT IN METRIC
TON
CAPACITY IN
TEUs/LIEN SERVICE ROUTE
LORCON MANILA 199
6
COMPANY
OWNED 4,328
5,998.30
426 MORTGAG
ED
MNL/CEB/CGY/MNL
LORCON GENERAL SANTOS
2000
COMPANY
OWNED 4,962 7,209
510
CGY/CEB/ILO/BCD/CGY
LORCON ILOILO 200
3
COMPANY
OWNED 4,462 5,550
505 MORTGAG
ED
MNL/BCD/ILO/MNL
LORCON BACOLOD 199
9
COMPANY
OWNED 4,450 5,607
431 MORTGAG
ED
MNL/CEB/CGY/MNL
MNL/DVO/ZAM/GES/CBO/CEB/MNL
LORCON DUMAGUETE
1999
COMPANY
OWNED 7,970 9,822
797 MORTGAG
ED MNL/DVO/ZAM/MNL
GENERAL. NATIVIDAD 199
9 CHARTE
R 4,450 5,603 275 MNL/CGY/CEB/MNL
GENERAL ROMULO 199
7 CHARTE
R 4,028 5,111 276 MNL/CEB/CGY/DGT/MNL
GENERAL EVANGELISTA
1998
CHARTER
5,025 5,450 271 MNL/CGY/CEB/MNL
RASALAS 200
2 CHARTE
R 7,016 9,131 383
MNL/DVO/GES/CBO/CEB/MNL
The limitations are those which are usual to ordinary mortgage of chattel and real properties.
The Company has no intention to acquire properties not in the ordinary course of business in the next twelve months.
B. The Company leases the following properties in its operations:
The Company leases from various entities the following properties for its operations, to wit:
1) A warehouse/office in Salimbao, Sultan Kudarat, Maguindanao, consisting of an area of 4,470 square meters for a monthly rental of Php 21,000.00. The lease commenced on 09 December 2016 and is valid as such until 08 December 2019.
2) A container yard with office covering an area of 30,000 square meters located at Phividec Estate of Misamis Oriental (PIE-MO), Municipalities of Tagaloan and Villanueva, Province of Misamis Oriental at a rate of Php 150 per sqm. Contract is valid for a period of ten (10) years commencing September 1, 2018 and ending on 31 August 2028 with escalation of 5% per annum to be applied every 3 years
3) A parcel of land with a building consisting of approximately 2,907 square meters, more or less,
located at P.I. Compound, Barangay Labangal, General Santos City, for a monthly rental of Php72,675.00. Contract is valid for a period of five (5) years commencing 01 March 2016 until 28 February 2021 with escalation of 5% per annum.
4) One door commercial building – Door 119, with an area of approximately 150 square meters
located at Lapuz Sur, Iloilo City, for a monthly rental of Php31,136.00 commencing 01 April 2019 until 31 March 2020, inclusive of EVAT.
5) A container yard with an area of 10,000 square meters located at Brgy. Progresso, Lapuz, Lapaz,
Iloilo City for a monthly of Php600,000.00 inclusive of VAT. Contract is valid from February 1, 2018 until August 31, 2019.
6) A container yard with an area of 7,000 square meters located at Brgy. Balabago, Jaro, Iloilo City
for a monthly of Php 490,000 inclusive of VAT. Contract is valid for a priod of five (5) years commencing September 1, 2019 until August 31, 2024.
7) In Zamboanga, a container yard covering an area of 4,800 square meters located at Governor
Ramos, San Roque, Zamboanga City with a monthly rental of Php 205,371.94 inclusive of VAT . Contract is valid for a period of three (3) years commencing 01 January 2019 until 31 December 2021.
8) An additional area in Governor Ramos, San Roque, Zambonga City, covering an area of 2,000 square meters was also utilized as container yard, with a monthly rental of Php 69,457.48 inclusive of VAT. Contract is valid for a period of three (3) years commencing 01 January 2019 until 31 December 2021.
9) A container yard located at Bacong, Negros Oriental covering an area of 8,832 sqm with a monthly rental of Php 99,000.00. Contract is valid for five (5) years commencing 01 January 2018 until 31 December 2022 with escalation every year.
10) A container yard and a container office, with an area of 6,500 square meters located at #15 Old Airport Road, Km. 9, Sasa, Davao City, and a monthly rental of Php 218,400. Contract is for five (5) years from 01 April 2014 until 31 March 2019 with escalation of 7% per annum.
11) A container yard and a container office, with an area of 13,000 square meters located at #15 Old
Airport Road, Km. 9, Sasa, Davao City, and a monthly rental of Php 546,941.20. Contract is for five (5) years from 01 April 2019 until 31 March 2024 with escalation of 7% per annum.
12) A container yard and a container office covering an area of 4,824 square meters located at 510 Honorio Lopez Blvd., Balut, Tondo, Manila. Contract commenced 01 August 2017 until 14 October 2020 with rate of Php 175.00 per square meter with annual escalation of 5% per annum.
13) A 2-unit office space are with 25 square meters per unit at Manila North Harbor, Tondo Manila.
Contract commenced March 1, 2018 until February 29, 2019 with rate of Php 37,044 per month inclusive of VAT with annual escalation of 5% per annum.
14) A 4-unit office space are with 25 square meters per unit at Manila North Harbor, Tondo Manila. Contract commenced March 1, 2019 until February 29, 2020 with rate of Php 95,200 per month inclusive of VAT with annual escalation of 5% per annum.
15) A container yard and office covering 13,731.58 square meters addressed at North Bay NBBS,
Navotas City. Contract commenced May 1, 2019 until 31 January 2022 with the initial rate of Php 157.50 for the 11,731.58 square meter (open area) and Php 157.00 for 2,000 square meter (warehouse/covered area). The annual escalation is 5% per annum.
ITEM 3 – LEGAL PROCEEDINGS
The Company is the defendant in several pending legal cases involving claims for damages arising from the ordinary course of business and trade and those arising from its relationship with its employees as the latter’s employer. The management opines, however, that the ultimate liability which may result from these lawsuits and claims, if any would not impinge on the financial position and operating results of the Company. The Company has a pending case with the Court of Tax Appeals (CTA) involving alleged deficiency taxes
for the taxable year 2008 amounting to P2.01 Billion, inclusive of penalties, interest and surcharges.
On June 28, 2018, the CTA 3rd Division issued a Decision favorable to the Company thereby cancelling
and declaring the Php 2.01 Billion assessment as null and void. As anticipated, the Commissioner of
Internal Revenue (CIR) filed a Motion for Reconsideration which, however, was later on denied by the
CTA 3rd Division on October 29, 2018. From this adverse Resolution, the CIR accordingly filed a Petition
for Review with the CTA En Banc on November 27, 2018. The Company filed its Comment & Opposition
to Petitioner’s Petition for Review.
The Dy, Soriano and Gatchalian Law Offices (DSG Law Offices) was appointed as legal representatives for
defending the position of the Company.
ITEM 4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE
PART II – OPERATIONAL AND FINANCIAL INFORMATION
ITEM 5 – MARKET FOR ISSUER’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
A. Market Information
The Company’s common shares are traded at the Philippine Stock Exchange. The quarterly high and low share prices of LSC during the last three (3) calendar years and interim periods are as follows:
QUARTER ENDING IN PHP
HIGH LOW
March 2017 1.35 1.02 June 2017 1.34 1.01 September 2017 1.30 1.03 December 2017 1.10 0.87
QUARTER ENDING IN PHP
HIGH LOW
March 2018 1.04 0.98 June 2018 1.04 1.02 September 2018 0.97 0.93 December 2018 0.78 0.76
QUARTER ENDING IN PHP
HIGH LOW
March 2019 0.99 0.93 June 2019 0.82 0.80 September 2019 0.94 0.90 December 2019 March 2020
0.90 0.68
0.83 0.61
B. Holders
As of March 31, 2020, the Company has 907 stockholders and the top twenty (20) shareholders of the Company as of said date are the following:
Name of Stockholders Citizenship No. of Shares
Held % Over Total Outstanding
1 National Marine Corporation Filipino 276,520,756 49.765%
2 PCD Nominee Corporation (Filipino) Filipino 243,193,186 43.767%
3 Professional Marketing Insights, Inc. Filipino 11,500,000 2.070%
4 Oscar Y. Go Filipino 6,637,157 1.194%
5 Jose Go, Jr. Filipino 6,208,500 1.117%
6 Julio D. Sy, Jr. Filipino 2,187,500 0.394%
7 PCD Nominee Corporation (Non-Filipino) Other Alien 728,021 0.131%
8 Jonathan D. Sy Filipino 312,500 0.056%
9 Emerging Market Capital Holdings Filipino 250,000 0.045% Johnny S. Lim Filipino 250,000 0.045%
Lilian So Lim Filipino 250,000 0.045% Francisco Lim Lao Filipino 250,000 0.045% Jose Juan Pou Filipino 250,000 0.045%
10 Willington Chua Filipino 237,500 0.043%
11 Michael Escaler Filipino 231,250 0.042%
12 Diana F. Malig Filipino 214,456 0.039%
13 RCBC Securities, Inc. Filipino 193,750 0.035%
14 Century Sports Phils., Inc. Filipino 187,500 0.034%
15 Pac Sally C. Ong Filipino 175,000 0.031%
16 Luis M. Camus Filipino 125,000 0.022% Siewngan Philip Low Filipino 125,000 0.022% Reginaldo A. Oben Filipino 125,000 0.022% Walfrido R. Patawaran Filipino 125,000 0.022% Phiek Lian Go So Filipino 125,000 0.022% Tego Holdings, Inc. Filipino 125,000 0.022%
17 Jacinto V. Rosales, Jr. Filipino 100,000 0.018%
18 R.J. Del Pan & Co. Filipino 81,250 0.015%
19 Vicky L. Chan Filipino 75,000 0.013%
20 Carmen C. Alabada Filipino 62,500 0.011% Florante A. Co Filipino 62,500 0.011% Angelita B. Flores Filipino 62,500 0.011% Angelita B. Flores Filipino 62,500 0.011% Gerardo R. Flores Filipino 62,500 0.011% Gerardo R. Flores Filipino 62,500 0.011% House of Investments, Inc. Filipino 62,500 0.011% Julieta R. Ofilada Filipino 62,500 0.011% Julieta R. Ofilada Filipino 62,500 0.011% Renato Reyes Filipino 62,500 0.011% Elaine Villar Revilla Filipino 62,500 0.011% Sun Hung Kai Sec. (Phils), Inc. Filipino 62,500 0.011% Felisa Y. Tan Filipino 62,500 0.011%
B. Dividends
On April 30, 2015, the Board of Directors has declared and issued in favour of common shareholders of record as of May 25, 2015 cash dividends amounting to two centavos (P0.02) per share, or an aggregate amount of P11,092,845.
C. Recent Sales of Unregistered Securities
Within the past three (3) years, there has been no sale of the Company’s Securities which were not registered under the Securities Regulations Code.
D. Description of Registrant’s Securities
Capital Stock
Since 2006, the Company’s authorized capital stock consists of common stock and maintains no other class or type of share capital. The occurrence and amount of cash dividends issued to its common stockholders is determined by the BOD. Common shareholders have voting rights and appraisal rights, subject to and pursuant to the provisions of the Corporation Code. Under the law and the Company’s Articles of Incorporation, foreign ownership is restricted to forty percent (40%). It provides that no transfer of shares or interest, which will render the ownership of the Filipino citizens to less than the required percentage of the capital stock as provided by existing law, shall be allowed or permitted to be recorded in the books of the company.
ITEM 6 - MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
CALENDAR YEAR 2019 Results of Operations Lorenzo Shipping Corporation (“LSC”) recorded P2.97 Billion in total freight revenues in 2019, at 51% or P1 Billion higher than the P1.97 Billion revenues in 2018. Total operating expense is P2.91 Billion, an increase of 53% from last year of P1.92 Billion. The increase in freight revenue and direct cost were due to the Sea Transport service agreement for the 4 vessels of NMC Container Lines Inc.(NMCCLI), which effectively added the trading capacity of LSC. The Company ended with a Gross Profit of P30.93 Million, which decreased by 35% from 2018 at P47.41 Million. General and Administrative expenses likewise decrease by P50.9 Million from P174.3 Million on 2018 to P123.5 Million on 2019 due to decrease provision for bad debts. Net Finance Costs amounted to P88.9 Million which is higher by 5% or P4.3 Million versus last year due to increase in interest rates. Net Other Income was lower by 49% in 2019 at P36.3 Million compared to P70.8 Million in 2018. The company’s Other Income in 2018 included proceeds from insurance and service recoveries. LSC’s Net Loss After Tax increased by 20% from P146.1 Million in 2018 to P174.5 Million in 2019. This translated to a loss per share of P0.31 and P0.26 in 2019 and 2018, respectively. Financial Condition Total resources of the Company stood at P3.30 Billion as at December 31, 2019, or P410 Million higher than P 2.89 Billion as at 31 December 2018. Current assets amounted to P1.328 Billion and P1.03 Billion in 2019 and 2018, respectively. The decrease in current assets was due to the following:
Significant increase of Cash and cash equivalent from P87.8Million to P204.9 Million
Increase of P131 Million in Trade and Other Receivables and Contract Assets from P876 Million in 2018 to P1.007 Billion in 2019 due to increase in revenue.
Increase in inventories from P24.6 Million to P 32.88Million. Also increase in Prepayments and other current assets from P15Million to P37.8 Million due to increase in prepaid expenses
Total Non-Current Assets increased in 2019 to P1.968Million from P1.858 Billion in 2018. The Company Property and Equipment at cost increased due to recognition of Right of Use Asset in 2019 while the revalued land assets decreased from P324.9 Million 2018 to P150.8 Million due to sale of property. Other Non-Current Assets increased to P96 Million from P313 Million in 2018 to P409 Million due to accumulated creditable withholding taxes. Total Liabilities increased by 2.8 Billion this year from P2.3 Billion the previous year. Total bank loans as of 31 December 2019 amounted to P902.6 Million (Short term/current – P709 Million; Long term – P193 Million) and P1.1 Billion (Short term/current – P769.9 Million; Long term – P314.2 Million) in December 2018. There was an availment of a P190 Million Short-Term Loan and no new availment of Long-Term Loan in 2019. The Company settled P182 Million in principal repayments during 2019, broken down into P119 Million and P63 Million in Long-Term (LT) and Short-Term (ST) borrowings, respectively compared to P174 Million in principal repayments during 2018, broken down into P137 Million and P37 Million in Long-Term (LT) and Short-Term (ST) borrowings. Obligation under Finance Lease was reclassified to Lease Liability under new accounting standards (PFRS16), Current is P113 Million and Non-Current is Php101 Million. Accounts Payable and Accrued Expenses increased to P1.6 Billion in 2019 from P1.07 Billion in 2018 due to increased operating costs, while retirement benefit obligation decreased due to payment of benefits to eligible employees who availed of retirement in 2019. The negative operating results of the Company in the current period and the adoption of new standards PFRS 16 resulted to a deficit of P551.3 Million in 2019 versus deficit of P578.5 Million in 2018. Revaluation Surplus decreased to Php111.9 million due to sale of property. LSC is adequately capitalized at P1.015 Billion, thus despite the deficit, the Company still reflected a stockholders’ equity of P484 Million in 2019. Current Ratio as at end of 2019 stood at 0.55 while 0.71 at 2018. Debt-to-Equity ratio was posted at 5.81 and 4.02 in 2019 and 2018, respectively, on the account of operating losses incurred in the current year. The creditor banks of the Company requiring maintenance of certain financial ratios provided a waiver on the breach of debt covenants for the period ending 31 December 2019. Book value per share this period declined to P0.87 versus P1.04 in the prior period. Top Five Performance Indicators LSC’s financial performance is determined by the following key results: 1. Current Ratio – this represents the ratio between current assets and current liabilities which
measures liquidity and efficiency of LSC’s ability to pay off its short term liabilities with its current assets.
2. Debt-to-Equity Ratio – measures financial leverage of LSC, how much debt is used to finance assets relative to the amount of value represented in shareholders’ equity.
3. Net Revenues – mainly composed of freight services recognized based on cargo loaded during the
year, taking into account all direct costs related to the cargo as well as capacity costs incurred during the year.
4. Net Income Before Tax – a quick indicator of the financial health of LSC.
5. Accounts Receivable (A/R) turnover – measures how efficiently LSC is collecting its receivables. The table below represents the key performance indicators of LSC over the last three (3) years:
Performance Indicators Full Year
2019 2018 2017
Current ratio 0.55 0.71 0.71 Debt-to-equity ratio 5.81 4.02 3.59 Net revenues P2.944 billion P1.971 billion P2.182 billion Net income (loss) before tax (P145.1 million) (P140.6 million) (P167 million) A/R turnover 3.20 2.26 2.31
i. LSC is not aware of any event that will trigger direct nor contingent financial obligations that is
material to LSC, including any default nor acceleration of an obligation.
ii. LSC is not aware of any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of LSC with unconsolidated entities nor other persons created during the reporting period.
iii. LSC is not aware of any material commitments for Capital Expenditures.
iv. LSC is not aware of any known trends, events nor uncertainties that have had or that are
reasonably expected to have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.
v. LSC is not aware of any significant elements of income nor loss that did not arise from the
registrant’s continuing operations.
vi. LSC is not aware of any seasonal aspects that had a material effect on the financial condition nor results of operations.
Plan of Operation
The Company’s turnaround plans are already starting to reap benefits as noted in the significant improvement in its Direct Costs. EBITDA is declining because of the reduction in average freight revenue which is still due to overcapacity in the market. There are ongoing efforts at revenue recovery in the form of bunker recovery, excise tax recovery, and arrastre recovery charges. The same plans shall be carried through up to the succeeding year.
1. Improvement in vessel and service reliability remains to be the Company’s top priority. Partnership with selected carriers will be enhanced for utmost flexibility especially in cases when there are excess volumes and/or service disruptions.
2. Emphasis is given on maximizing vessel capacity especially northbound and inter-port volumes
using optimized pricing schemes.
3. Significant reduction of operating costs such as trucking, fuel, terminal, and cargo handling has been given priority through a focused and flexible organizational structure and appropriate system-enhancement.
4. Implementation is now underway for programs to manage profit leakage, focusing largely on claims reduction, improved billing and collection cycle, and operations process streamlining through people, process, and technology intervention.
5. Depending on market condition, any excess capacity and non-profitable routes are being closely monitored and rationalized as necessary.
CALENDAR YEAR 2018
Results of Operations Lorenzo Shipping Corporation (“LSC”) recorded P1.97 Billion in total freight revenues in 2018, at 10% or P211 Million lower than the P2.18 Billion revenues in 2017. The decline in freight revenue was due to competitive pressure on freight base as a result of increased industry vessel capacity. To compensate for the decrease in average freight revenue, LSC focused on regaining old accounts and developing new ones especially for northbound cargoes. The Company also had fewer vessel trips compared to the previous year owing to extended dry-docking and unscheduled downtime of vessels. Notwithstanding these challenges, LSC continued to focus on improving vessel reliability and operational efficiencies which resulted to an improvement of P223 Million in direct cost. Efforts were also made to maximize vessel utilization and load factor. The Company ended with a Gross Profit of P47.4 Million, which is an improvement from 2017 at P34.6 Million or 37% General and Administrative expenses likewise improved by P9.9 Million compared to the previous year. Net Finance Costs amounted to P84.5 Million which is higher by 36% or P22.5 Million versus last year due to increase in interest rate. Net Other Income was higher by 57% in 2018 at P70 Million compared to P44 Million in 2017. The company’s Other Income in 2018 included proceeds from insurance and service recoveries as well as a one-off debit item such as a loss on sale of property amounting to P39 Million. LSC’s Net Loss After Tax went down by 15% from P171.8 Million in 2017 to P146.1 Million in 2018. This translated to a loss per share of P0.26 and P0.31 in 2018 and 2017, respectively.
Financial Condition Total resources of the Company stood at P2.887 Billion as at December 31, 2018, or P182 Million lower than P3.069 Billion as at 31 December 2017. Current assets amounted to P1.330 Billion and P1.386 Billion in 2018 and 2017, respectively. The decrease in current assets was due to the following:
Significant decrease of P82 Million in Trade and Other Receivables and Contact Assets from P982 Million in 2017 to P901 Million in 2018.
Improved collection helped sustain the operating cash requirement of the Company in 2018 and also augmented principal repayments of bank loans and interest. Cash balance slightly went down to P87.8 Million in 2018 from P89.6 million in 2017.
On the other hand, repayments and other current assets increased from P287 Million to P317 Million or a 10% increase due to accumulated creditable withholding taxes as the Company remained on a taxable loss position. Likewise, total Noncurrent Assets decreased in 2018 to P1.557 Billion from P1.683 Billion in 2017 substantially due to a sale of property. The Company revalued its land assets in 2018 which resulted to an increase in land value by P66.21 Million. This brought the balance of property and equipment to P1.220 Billion in the current year from P1.293 Billion in the prior year. Other Noncurrent Assets declined as well to P11.7 million from P21.8 million as deferred input VAT went down to P8 Million from P15 Million. Total liabilities reduced by P2.312 Billion this year from P2.400 Billion the previous year. Total bank loans as of 31 December 2018 amounted to P1.084 Billion (Short term/current – P769.88 Million; Long term – P314.17 Million) and P1.243 Billion (Short term/current – P960.78 Million; Long term – P282.18 Million) in December 2017. Short term loan proceeds amounting to P15 Million were used in operating expenses. There was no availment of a term loan in 2018. The Company settled P174 Million in principal repayments during 2018, broken down into P137 Million and P37 Million in long term (LT) and short term (ST) borrowings, respectively compared to P182 Million in principal repayments during 2017 broken down into P162 Million and P20 Million in long term (LT) and short term (ST) borrowings Obligation under finance lease also decreased from P62 Million in 2017 to P52 Million in 2018 due to payment of amortization of P35 Million while a new lease obligation has been availed amounting to P25 Million. Accounts Payable and Accrued Expenses increased to P1.070 Billion in 2018 from P956 Million in 2017 due to increased operating costs, while retirement benefit obligation decreased due to payment of benefits to eligible employees who availed of retirement in 2018. The negative operating results of the Company in the current period and the adoption of new standards (PFRS 9 & 15) resulted to a deficit of P578.5 Million versus deficit of P495.8 Million as at 31 December 2017. LSC is adequately capitalized at P1.015 Billion, thus despite the deficit, the Company still reflected a stockholders’ equity of P575 Million in 2018. Current ratio as at end of 2018 stood at 0.71 same with 2017. Debt to Equity ratio was posted at 4.02 and 3.59 in 2018 and 2017, respectively, on the account of operating losses incurred in the current year. The creditor banks of the Company requiring maintenance of certain financial ratios provided a waiver on the breach of debt covenants for the period ending 31 December 2018.
Book value per share this period declined to P1.04 versus P1.21 in the prior period. Top Five Performance Indicators LSC’s financial performance is determined by the following key results:
1. .Current ratio – this represents the ratio between current assets and current liabilities which measures liquidity and efficiency of LSC’s ability to pay off its short term liabilities with its current assets.
2. Debt to equity ratio – measures financial leverage of LSC, how much debt is used to finance
assets relative to the amount of value represented in shareholders’ equity.
3. Net revenues – mainly composed of freight services recognized based on cargo loaded during the year, taking into account all direct costs related to the cargo as well as capacity costs incurred during the year.
4. Net income before tax – a quick indicator of the financial health of LSC.
5. Accounts receivables (A/R) turnover – measures how efficiently LSC is collecting its
receivables. The table below represents the key performance indicators of LSC over the last three (3) years:
Performance Indicators Full Year
2018 2017 2016
Current ratio 0.71 0.71 0.79 Debt-to-equity ratio 4.02 3.59 3.55 Net revenues P1.971 billion P2.182 billion P2.253 billion Net income (loss) before tax (P140.6 million) (P167 million) (P362 million) A/R turnover 2.26 2.31 2.50
vii. LSC is not aware of any event that will trigger direct or contingent financial obligations that is
material to LSC, including any default or acceleration of an obligation.
viii. LSC is not aware of any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of LSC with unconsolidated entities or other persons created during the reporting period.
ix. LSC is not aware of any material commitments for capital expenditures.
x. LSC is not aware of any known trends, events or uncertainties that have had or that are
reasonably expected to have a material favourable or unfavourable impact on net sales or revenues or income from continuing operations.
xi. LSC is not aware of any significant elements of income or loss that did not arise from the
registrant’s continuing operations.
xii. LSC is not aware of any seasonal aspects that had a material effect on the financial condition or results of operations.
Plan of Operation
The Company’s turnaround plans are already starting to reap benefits as noted in the significant improvement in its Direct Costs. EBITDA is declining because of the reduction in average freight revenue which is still due to overcapacity in the market. There are ongoing efforts at revenue recovery in the form of bunker recovery, excise tax recovery, and arrastre recovery charges. The same plans shall be carried through up to the end of 2018.
1 Improvement in vessel and service reliability remains to be the Company’s top priority. Partnership with selected carriers will be enhanced for utmost flexibility especially in cases when there are excess volumes and/or service disruptions.
2 Emphasis is given on maximizing vessel capacity especially northbound volumes using enhanced
pricing schemes.
3 Significant reduction of operating costs such as trucking, terminal, and cargo handling has been given priority through a focused and flexible organizational structure and appropriate technology.
4 Implementation is now underway for programs to manage profit leakage, focusing largely on claims reduction, improved billing and collection cycle, and operations process streamlining through people, process, and technology intervention.
5 Depending on the market condition, any excess capacity and non-profitable routes are being closely monitored and rationalized as necessary.
xiii. LSC is not aware of any seasonal aspects that had a material effect on the financial condition nor results of operations.
Plan of Operation
The Company’s turnaround plans are already starting to reap benefits as noted in the significant improvement in its Direct Costs. EBITDA is declining because of the reduction in average freight revenue which is still due to overcapacity in the market. There are ongoing efforts at revenue recovery in the form of fuel surcharge, excise tax recovery, and arrastre recovery charge. The same plans shall be carried through up to the end of 2018.
1 Improvement in vessel and service reliability remains to be the Company’s top priority. Partnership with selected carriers will be enhanced for utmost flexibility especially in cases when there are excess volumes and/or service disruptions.
2 Emphasis is given on maximizing vessel capacity especially northbound volumes using enhanced
pricing schemes.
3 Significant reduction of operating costs such as trucking, terminal, and cargo handling has been given priority through a focused and flexible organizational structure and appropriate technology.
4 Implementation is now underway for programs to manage profit leakage, focusing largely on claims reduction and improved billing and collection cycle through people, process, and technology intervention.
5 Depending on the market condition, any excess capacity and non-profitable routes are being closely monitored and rationalized as necessary.
CALENDAR YEAR 2017 Results of Operations In 2017, Lorenzo Shipping Corporation (LSC or the “Company”) continued to focus on improving vessel reliability and operational efficiencies which resulted to an improvement of P100 Million in direct cost. Vessel’s performance improved with the various maintenance and crew-related initiatives done in the past year. Efforts were made to maximize vessel’s utilization and reduce fixed costs. This was evident with the 9% increase in volumes, despite the retirement of M/L Lorcon Visayas in October 2017. General and administrative expenses likewise improved by P25 Million. LSC’s total freight revenue for 2017 however went down by P71 Million due to pressure on freight base as a result of the vessel capacity. To compensate for the losses in average freight revenue, LSC focused on regaining old accounts and developing new ones especially for northbound cargoes. The Company ended with a gross profit of P35 Million which is a significant improvement from 2016 which amounts to P5 Million. Net other income were higher by 146% this year to P45million compared to P96 million net other charges last year. “One-off” items such as settlement of certain tax delinquency assessments for prior years amounting to P64 million and book loss of P64 million from sale of an old vessel were included. In 2017, the company’s other income includes proceeds from insurance and service recoveries. LSC’s net loss before tax in 2017 went down by 54% from P362 Million in 2016 to P167 Million in 2017. This translate to a loss per share of P0.31 and P0.66 in 2017 and 2016, respectively. Financial Condition
Total resources of the Company stands at P3.069 billion as at December 31, 2017, or P54 million higher than P3.015 billion as at December 31, 2016. Current assets amounted to P1.382 billion and P1.290 billion in 2017 and 2016, respectively. The increase in current assets was due to the following:
The improved collection helped sustain the operating cash requirement of the Company in 2017 including principal repayment of bank loans and interest. Cash balance went down to P90 million in 2017 from P105 million in 2016.
Increase in trade and other receivables for 2017 is P80 Million from P902 Million in 2016.
Fuel inventory increased this period due to higher fuel prices.
Prepayments and other current assets increased from P262 Million to P284 Million or 8% increase due to increase of deferred input VAT and accumulated creditable withholding taxes as the Company remained on a taxable loss position.
The Company revalued its land assets in 2017 which resulted to an increase in land value by P273 million. Total land assets is valued at P369 million in 2017 from P96 million in 2016. However, there is a decrease in the value of vessels and vessel related assets by P136 million, substantially due to the sale of M/V Lorcon Visayas. Other noncurrent assets went down by P12 million mainly due to decrease in deferred input VAT. Total Noncurrent Assets, on the other hand, went down by P40 million or 2% from P1.7 million in 2016. Total liabilities increased to P2.381 billion this year from P2.354 billion last year. Total bank loans as at December 31, 2017 amounted to P1.244 billion (Short term/current – P673 million; Long term – P571 million) and P1.252 billion (Short term/current – P519 million; Long term – P734 million) in December 2017. Short term loan proceeds amounting to P174 million were used in operating expenses. There was no availment of term loan in 2017. The Company settled P182 million in principal repayment during 2017 broken down into P162 million and P20 million in long term (LT) and short term (ST) borrowings, respectively compared to P325 million in principal repayment during 2016 broken down into P197 million and P128 million in long term (LT) and short term (ST) borrowings Obligation under finance lease also decreased from P95 million in 2016 to P62 million in 2017 due to payment of amortization of P32 million. Accounts payable and accrued expenses increased to P978 million in 2017 from P920 million in 2016 due to higher cost to operate. While, retirement benefit obligation increased in 2017. The negative operating results of the Company in the current period resulted to a deficit of P496 million versus retained earnings of P324 million as at December 31, 2016. LSC is adequately capitalized at P1.016 billion, thus despite the deficit, it still shows a stockholders’ equity of P668 million in 2017. Current ratio as at end of 2017 stood at 0.71:1.00 versus 0.79 in 2016, the reduction was due to higher current liabilities 2017. While debt to equity ratio was posted at 3.588 and 3.55 in 2017 and 2016, respectively on the account of operating loss incurred in the current year. The creditor bank of the Company requiring maintenance of certain financial ratios provided a waiver on the breach of debt covenants for the period ending December 31, 2017. Book value per share this period decline to P0.31 versus P0.66 in prior period. Top Five Performance Indicators
LSC’s financial performance is determined by the following key results:
1 Current ratio – this represents the ratio between current assets and current liabilities which measures liquidity and efficiency of LSC’s ability to pay off its short term liabilities with its current assets.
2 Debt to equity ratio – measures financial leverage of LSC, how much debt is used to finance assets relative to the amount of value represented in shareholders’ equity.
3 Net revenues – mainly composed of freight services recognized based on cargo loaded during
the year, taking into account all direct costs related to the cargo as well as capacity costs incurred during the year.
4 Net income before tax – a quick indicator of the financial health of LSC. 5 Accounts receivables (A/R) turnover – measures how efficiently LSC is collecting its receivables.
The table below represents the key performance indicators of LSC over the last three (3) years:
Performance Indicators Full Year
2017 2016 2015
Current ratio 0.71 0.79 1.04 Debt-to-equity ratio 3.56 3.55 2.30 Net revenues P2.182 billion P2.253 billion P2.283 billion Net income (loss) before tax (P167 million) (P362 million) (P222 million) A/R turnover 2.31 2.50 2.54
xiv. LSC is not aware of any event that will trigger direct or contingent financial obligations that is
material to LSC, including any default nor acceleration of an obligation.
xv. LSC is not aware of any material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of LSC with unconsolidated entities nor other persons created during the reporting period.
xvi. LSC is not aware of any material commitments for capital expenditures.
xvii. LSC is not aware of any known trends, events or uncertainties that have had nor that are
reasonably expected to have a material favourable or unfavourable impact on net sales nor revenues or income from continuing operations.
xviii. LSC is not aware of any significant elements of income nor loss that did not arise from the
registrant’s continuing operations.
xix. LSC is not aware of any seasonal aspects that had a material effect on the financial condition nor results of operations.
Plan of Operations
The Company’s turnaround plans are already starting to reap benefits as can be noted in the significant improvement in its EBITDA. The same plans shall be carried through in 2018.
1 Improvement in vessel and service reliability remains to be the Company’s top priority. Partnership with selected carriers will be enhanced for utmost flexibility especially in cases when there are excess volumes and/or service disruptions.
2 Emphasis will be given on maximizing vessel capacity especially northbound volumes through
enhanced pricing scheme.
3 Significant reduction of operating costs such as trucking, terminal, and cargo handling will be given priority thru a focused and flexible organization structure and appropriate technology.
4 Implementation profit leakage management programs, focusing on claims reduction and improved billing and collection cycle through people, process, and technology intervention.
5 Depending on the market condition, any excess capacity and non-profitable routes shall be dropped.
6 Improvement in collection to be able to reduce bank loans.
ITEM 7 – FINANCIAL STATEMENTS (FS) AND OTHER DOCUMENTS REQUIRED TO BE FILED WITH THE FS
UNDER SRC RULE 68, AS AMENDED
Please see Exhibit B
ITEM 8 – INFORMATION ON INDEPENDENT ACCOUNTANT AND OTHER RELATED MATTERS
SGV & Co. was the Company’s independent auditor since 2006 until the present.
A. External Audit Fees and Services
Audit and Audit Related Fees – The aggregate fees billed for professional services rendered by the
external auditors amounted to P 1.150 million in 2018 and P 1.225 million in 2019 plus Value Added
Tax.
B. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
There was no event in the past where SGV & Co. has any disagreement with the Company with
regard to any matter relating to accounting principles or practices or financial statement disclosure
or auditing scope or procedure.
PART III – CONTROL AND COMPENSATION INFORMATION ITEM 9 – DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER
A. Directors, Executive Officers, Promoters and Control Persons
1) Directors and Executive Officers
The term of office of the Company’s director is for a period of one (1) year until the election and qualification of their successors. The incumbent directors of the Company with their corresponding business experience and directorship held for at least the past five (5) years are the following:
Summary of Term of Office of Directors:
Doris Magsaysay-Ho – director since June 2005 up to present Antony Louis Marden – director since June 2005 up to present Julio O. Sy – director since 1996 up to June 2019 Michael L. Escaler – director from 2002 up to present Deogracias N. Vistan – independent director from 2002 up to present Rene J. Buenaventura – independent director from 2017 up to present
Virgilio L. Peña – independent director from May 2019 up to present Reynold John B. Madamba – director from 2018 up to present
BOARD OF DIRECTORS DORIS MAGSAYSAY HO, 68 Filipino Chairperson of the Board
Doris Magsaysay Ho is the President and CEO of A. Magsaysay, Inc. which has its roots in ship-owning serving the international markets since 1948. Driven by a commitment to make an impact on the development of the Philippines, the company expanded its ship-owning activities to serve the Philippine coastal container and oil trades. The company today also offers its customers transport solutions in a complex supply chain system that includes end to end logistics services including trucking and warehousing
These ship-owning activities gave Magsaysay the opportunity to become talent solutions partners of global companies, sourcing and developing people for shipping and cruise companies and expanding to other industry sectors that require human resources from the Philippines, Indonesia, Eastern Europe, South Africa, Nepal and other countries. Magsaysay has invested heavily in education, training and development of people to ensure the long term sustainability of a robust talent pipeline to support its customers’ needs.
Ms. Ho has also been honored with awards: Lloyd’s List Asia Lifetime Achievement Award 2011; Global Filipino Executive of the Year in 2012; Seatrade Personality of the Year Award in 2018, MVP Grand Bossing Award 2018, and Shero of the Year by the Asia CEO Awards in 2019. In November, 2015, the Office of the President of the Philippines conferred upon Ms. Ho the Order of Gawad Mabini with the rank of Commander.”
ANTONY LOUIS MARDEN, 70, British, Vice Chairman of the Board, Member of the Audit Committee
Antony Louis Marden has been the Vice Chairman of the Board and Executive Committee. He is also Chairman of the Nomination Committee since June 2006, and a member of the Audit Committee since June 2005. He is the President of FIM Limited and a Director in the following corporations: G.E. Marden & Co., Ltd., Fenwick Shipping Services, Ltd., Clean Oil (HK) Limited, National Marine Corporation, and the NMC Group of Companies. Mr. Marden studied Chinese & Politics at Leeds University and has worked in the shipping business for almost 40 years.
JULIO O. SY, SR., 88, Filipino – Director ( up to June 2019) Mr. Sy was the Chairman of the Board from 1996 to 2006 and Director of the Company since 1996 to present. He fulfils the same role in a number of other corporations, including: Dumaguete Coconut Oil Mill, Cebu International Finance Corporation and Dumaguete City Development Bank. He also takes on further responsibilities as President of BUSCO Sugar Milling Co., Inc., HIDECO Sugar Milling Co., Inc., Jurong Engineering (Phils.) Inc., New Bian Yek Commercial Inc., July Development Corp., and July Lighterage Corp., as Director of Victorias Quality Packaging Corporation; and as EVP of Makati Agro Trading Inc., and Bayview Park Hotel. Outside the professional realm, he has been actively involved in various civic organizations attesting to a wide and diverse field of interest and expertise. Attending Siliman University from elementary to college, he was awarded Outstanding Silimanian in Business. Other honors to his name include Outstanding National Citizen Award of the Philippines, Philippine National Red Cross Award, National YMCA award, Negrense Awardee and Horace Silliman Awardee.
MICHAEL L. ESCALER, 69, Filipino - Director and Member of the Audit and and Corporate Governance Committees Michael L. Escaler is the President and CEO of All Asian Countertrade Inc. known as the largest sugar trader in the Philippines, founded in 1994 in partnership with Louis Dreyfus and Nissho-Iwai. He is also the Chairman, President and CEO of Pampanga Sugar Development Co. Inc. (PASUDECO), President and CEO of San Fernando Electric Company (SFELAPCO), Chairman and CEO of Sweet Crystals Integrated Mill Corp and Okeelanta Corporation, Chairman of Balibago Waterworks System Inc., JSY Transport, Aldrew and Gray Transport, Silver Dragon Transport and Metro Clark Waste Management Inc. He served as Independent Director of Lorenzo Shipping Corporation, PowerSource Philippines Inc., Empire Insurance Co., Trinity Insurance Co., Trinity Healthcare Services Inc., Marcventures Holdings Inc., and Leyte AgriCorp. A sugar trader in New York and London from 1974 to 1993. He began his career at Nissho-Iwai of America for two years and left for ACLI International, one of the largest privately held trading company. Later on, he transferred to Philipp Brothers as Vice-President to head the white sugar trading afterwards he started his own trading company in the Philippines. A Hall of Fame Sprinter for Ateneo de Manila University, where he graduated Cum Laude in Bachelor of Arts in Economics, he obtained his Master in Business Administration in International Marketing in New York University.
A Philanthropist, he supports various charities including Habitat for Humanity, Coca Cola Foundation, PGH Medical Foundation, Mano Amiga Academy and Productive Internships in Dynamic Enterprise (PRIDE).
DEOGRACIAS N. VISTAN, 75, Filipino - Lead Independent Director, Chairman of the Audit Committee and Corporate Governance Committees Mr. Vistan became a Director of the Company in 2002. He is a respected veteran banker whose last major stint was as President and CEO of Equitable PCI Bank Corporation in 2001-2002. He distinguished himself in the same position in Solidbank Corporation from 1992 to 2000 and as President and Vice-Chairman of the Land Bank of the Philippines from 1986 to 1992. Before that, he occupied various senior management positions in Citibank (Manila) where he started his banking career. Presently, he is an Independent Director of Philippine National Bank, PNB Capital & Investment Corporation and U-Bix Corporation. He serves as Chairman of the U.S.-based PNB International Investments Corporation, PinoyME Foundation and V & A Foods Corporation. He is also a member of the Board of Trustees of the Ramon Magsaysay Award Foundation and the Executive Advisory Council of Mitsubishi Motors Philippines Corporation. He graduated with a double degree in Business Administration and Humanities from the De La Salle University and finished his Master in Business Administration at the Wharton Graduate School of the University of Pennsylvania.
RENE BUENAVENTURA, Filipino, Independent Director and Member of Audit Committee Mr. Rene J. Buenaventura has been the Vice Chairman of the Equicom Group of Companies since
2007. The Equicom Group includes various companies in healthcare, banking and finance and
information technology. He is Vice Chairman of Equicom Savings Bank and Algo Leasing and Finance
Inc., Director and Executive Committee Member of Maxicare Healthcare Corporation and Director of
Equicom Information Technology Inc. He is a member of the Board of Trustees of the Equitable
Foundation.
He is also an Independent Director of UBS Investment Phils Inc and of AIG Insurance Phils Inc. and is
a Director of Strategic Equities Corporation. He was the former President of Equitable PCI Bank. He
attended the Advance Management Program for Overseas Bankers in Wharton School, University of
Pennsylvania. He finished his MBA and AB-BSC in De La Salle University. He is a Certified Public
Accountant.
VIRGILIO L. PENA, Filipino, Independent Director and Member of Audit Committee (effective June 2019) Mr. Virgilio L. Peña is presently the Chairman of Altius Phils, Inc. and President of Mano Amiga Academy- school committed to providing high quality K to 12 education to less privileged families. He continues to serve in the Board of Everest Academy Manila – a Catholic international school in the Bonifacio Global City owned by the Regnum Christi and the Legionaries of Christ.
He is a member of the Board of Trustees and Assistant Treasurer of the Philippine Cancer Society
and the Chairman of 3Peas in a Pod, Inc. – a family owned business in the food industry.
REYNOLD JOHN B. MADAMBA, 45, Filipino – Director, President and Chief Operating Officer Mr. RJ Madamba was elected as President and Chief Operating Officer of the Company in 2018. He is
also Head of Liner for Magsaysay Shipping and Logistics, serving as Chief Operating Officer of NMC
Container Lines, Inc. and Roadlink Solutions, Inc. He is also a member of the Executive Committee of
Pacific Roadlink Logistics, Inc. He previously served as Vice President and Chief Operating Officer of
Orca Cold Chain Division under ISOC Holdings, Inc. from 2017 to 2018. Prior to that, he was the
General Manager of Icebox Logistics Services, Inc. from 2011 to 2017. He was also Secretary and
Director of the Cold Chain Association of the Philippines from 2015 to 2018. He started his career at
American President Lines (APL) from 1996 until 2011 where his last stint was Davao and General
Santos Branch Manager.
Mr. Madamba graduated in 1996 with a degree in Management Economics at the Ateneo de Manila
University. He completed a course in Perishables Transport at the University of California-Davis in
2001. He also took up some MBA units at the University of the Philippines’ College of Business
Administration from 2001 to 2002. He also successfully completed Carrier-Transicold’s Technical
Service Training in 2009. In 2010, Mr. Madamba was a delegate of the Rotary Club’s Group Study
Exchange Program in British Columbia, Canada. He graduated class valedictorian of the Dale
Carnegie Leadership Training for Managers in 2012.
Mr. Madamba brings with him more than 23 years of experience in domestic and international
container liner shipping which includes branch management, freight forwarding, customer service,
reefer sales, container yard operations, equipment maintenance and repair, vessel operations,
trucking, finance, and customer relationship management (CRM).
ARSENIO C. CABRERA, JR., 59, Filipino - Corporate Secretary and Corporate Information Officer ( up to June 8, 2020) Atty. Cabrera was elected as Corporate Secretary of the Company in 1996. He is a Managing Partner of Herrera Teehankee & Cabrera Law Offices. He is currently General Counsel of STI Education Services Group, Inc. He also serves as Corporate Secretary of Araval, Inc., BOIE Drug, Inc., BOIE, Incorporated, BOIE Prime, Inc., Bountiful Geomines, Inc., Calatagan Bay Realty, Inc., Canlubang Golf and Country Club, Inc., Capital Managers and Advisors, Inc., Classic Finance, Inc., Coinage, Inc., DLS-STI Colleges, Inc., GEOGEN Corporation, GEOGRACE Resources Philippines, Inc., Maestro Holdings, Inc., Masbate13 Philippines, Inc., Mina Tierra Gracia, Inc., NiHAO Mineral Resources International, Inc., Oregalore, Inc., Philippine American Drug Company, Philippine First Condominium Corporation, Philippines First Insurance Co., Inc., Philippine Life Assurance Financial Corporation, Philhealthcare, Inc., Philplans First, Inc., Renaissance Condominium Corporation, Rosehills Memorial Management Philippines, Inc. Sonak Holdings, Inc., STI Education Systems Holdings, Inc., STI West Negros University, Inc., Total Consolidated Asset Management, Inc., Trend Developers, Inc., Villa Development Corporation and WVC Development Corporation.
Atty. Cabrera holds a Bachelor of Laws (Second Honors) and a Bachelor of Science in Legal Management from the Ateneo De Manila University. ANA CARMINA S. HERRERA, 45, Filipino - Assistant Corporate Secretary ( up to June 8, 2020) Atty. Herrera is a Senior Associate of Herrera Teehankee and Cabrera Law Offices. She also performs the role of Corporate Secretary of Dunes and Eagle Land Development Corporation, STI College Batangas, Inc., STI College of Kalookan, Inc., STI Dagupan, Inc., STI Diamond College, Inc. and STI Tuguegarao, Inc. She also serves as Assistant Corporate Secretary in a number of other corporations: Amica Corporation, Banclife Insurance Co., Inc., Coastal Bay Chemicals, Inc., Palisades Condominium Corporation, Philhealthcare, Inc., Philippines First Insurance Co., Inc., Philippine First Condominium Corporation, Philippine Life Financial Assurance Corporation, STI Education Systems Holdings, Inc., and Venture Securities, Inc. Atty. Herrera received her Bachelor of Laws degree from the University of the Philippines in 2000.
Marie Christine Enciso-Villegas, Filipino – Corporate Secretary (effective June 8, 2020) Atty. Enciso-Villegas is Corporate Secretary of the Company elected in 2020. She is Chief Legal Counsel for A. Magsaysay, Inc., heading the corporate legal department, and managing the legal and regulatory affairs of the Magsaysay Group of Companies. She provides legal counsel to the Board of Directors, the Chairman of the Board, the CEO, and other senior management leaders.
She started in government at the Office of the Chief Presidential Legal Counsel and Office of the Ombudsman under the Arroyo administration before moving to private practice with the law firm De Borja, Medialdea, Bello and Guevarra, and then with Gerodias Suchianco Estrella Law Firm. She specializes in litigation, labor, taxation, corporate and securities law, and has acted as in-house counsel for private multinational corporations.
She graduated Bachelor of Arts in Political Science and Juris Doctor from the Ateneo de Manila University, and is a Member of the Integrated Bar of the Philippines and Member and Arbitrator of the Philippine Dispute Resolution Center, Inc.
Marisse D. Aldeza, Filipino, Assistant Corporate Secretary (effective June 8, 2020)
Atty. Aldeza is Assistant Corporate Secretary of the Company elected in 2020. She is Deputy Legal Counsel for the Magsaysay Group of Companies. She assists in handling the corporate legal affairs as well as monitoring regulatory compliance of companies within the group.
Atty. Aldeza received her degree of Bachelor of Arts in Economics from the University of Santo Tomas and Juris Doctor from the Ateneo Law School.
KEY EXECUTIVE OFFICERS ROLANDO J. PORTES, 50, Filipino – Vice President for Operations (up to August 30, 2019) Mr. Portes was appointed Vice President for Operations of LSC effective 23 June 2016. He is also the overall in-charge of operations of Liner Shipping Cluster of Magsaysay Shipping and Logistics Group (MSL) since January 2016. Prior to his appointment as Operations Head, he was the General Manager of Sun Cruises, Inc. (a Magsaysay Company) from 2009 to 2015. He started his career with Magsaysay Maritime Corporation in 1993 as a Technical Assistant until 1996 and moved to become the Head of Operations and Chartering of Islas Tankers Shipping Corp until 2002. He became the Operations and Marketing Manager – LCL Department of NMC Container Lines from 2002 to 2004 then held the position of Senior Logistics Manager of One Stop Logistics Solutions, Inc. from 2004 to 2008. He is a licensed Mechanical Engineer. Mr. Portes graduated from Technological Institute of the Philippines, Quezon City with a degree in Bachelor of Science in Mechanical Engineering in 1991 and a degree in Bachelor of Business Management from Pamantasan ng Lungsod ng Maynila in 1999, where he also completed his Masteral Degree in Business Administration in 2001. CELESTE A. VILLA-REAL, 41, Filipino – Head of Operations ( effective September 2020)
Ms. Villa-Real was appointed Head of Operations of LSC effective 16 July 2019. Prior to her appointment as Head of Operations, she was the Operations Planning Manager of LSC from Year 2007 to 2019. She started her career with LSC in 2000 as a Marketing Executive and moved to become Marketing Manager in 2005. Before joining LSC, she worked as Senior Marketing Assistant under the customer service and sales team of Maxicare Healthcare Corporation.
Ms. Villa-Real graduated from the De La Salle University, Manila with a degree in Bachelor of Science in Commerce major in Business Management in 1998.
ANNABELLE R. LOPEZ, 42 , Filipino – Head of Marketing Ms. Lopez joined Lorenzo Shipping Corporation as Business Development Manager in 2018 and was later promoted as Sales & Marketing Head effective March 18, 2019. Prior her post, she was the Sales Manager of One Stop Logistics Solutions, Inc. (a Magsaysay & Shipping Logistics SBU) from 2014 to 2018. She started her career in the shipping industry with Aboitiz Transport System Corp. (2GO Group) in 2002, managing special accounts in Manila and later on moved to Cagayan de Oro as Area Sales Manager for Northern Mindanao & eventually appointed as Branch Manager handling both sales & operations. After spending 10 years in the shipping world, she transitioned to the FMCG industry – Unilever RFM Ice Cream, handling Cabinet Management Unit from 2012-2014. She graduated with a degree in Commerce Major in Business Administration from University of Santo Tomas in 1999 where she also took up some MBA units from 2003-2006.
AGNES N. DOMINGO, 50 FILIPINO – Chief Financial Officer Ms. Domingo is the Chief Audit Executive effective January 1, 2017. She also holds the position of Assistant Vice President and Chief Audit Executive at A. Magsaysay, Inc. and its subsidiaries including global offices in Jakarta and Bali Indonesia, New York USA among others. She is a Certified Public Accountant (CPA), Certified Internal Auditor (CIA) and Certified Fraud Examiner(CFE). She finished her graduate studies, Master in Business Administration Degree, in March 2012. She has 20 years of Internal Audit experience. She gained experience from various industries such as shipping and logistics services, commercial banking and financial institutions, international manning, school and training centers, insurance, ship management, independent power producer, food and restaurant, travel agency, among others. She has active professional affiliation in the Institute of Internal Auditors – Philippine and votes as one of the Board of Trustees for the year 2016 to 2017. Attended as one of the Philippine delegates in Sydney, Australia International Auditors Conference in 2017 and Dubai, UAE International Auditors Conference in 2018. She is also an active member of Phi. Institute of CPA and Association of Certified Fraud Examiner Texas, USA.
ATTY. ERIC ROJAS CORTES, 46 FILIPINO – Compliance Officer (up to June 18, 2020)
Atty. Cortes graduated magna cum laude from the University of the Philippines, Diliman with a degree of Bachelor of Arts major in Philosophy. He likewise obtained his Bachelor of Laws degree from the University of the Philippines College of Law in 1999 and took his oath as a lawyer in 2000.
Atty. Cortes has had a multi-faceted legal career, putting up his body of work both in government and the private sector. Beginning with his stint as Court Attorney in the Court of Appeals and later in the Supreme Court at the office of then Associate Justice Conchita Carpio Morales (now Ombudsman Morales) from CY 1999 to 2004, Atty. Cortes also worked briefly at the Philippine Deposit Insurance Corporation (PDIC) before transitioning to private employment. He became Legal Department Head of FG Financial Company where he gained substantial experience in litigation and extensively practiced Corporate Law, Labor Law, Criminal Law and Civil Law in the service of that company.
He also taught part-time at the College of Saint Benilde-De La Salle University from CY 2000 up to CY 2010, handling business law subjects such as ‘Sales, Agency and Credit Transactions’, ‘Partnership and Corporation Law’, ‘Legal Basis for Exports’, ‘Legal Aspects of the Hospitality Industry’, ‘Income Taxation’ and ‘Business Taxation’. As an offshoot of his teaching experience, he started to render lectures and conduct training seminars for clientele of Creative Training & Management (CFS) on such topics as ‘Law on Employment Termination and Discipline’, ‘Labor Standards Law’, ‘Credit and Collection’ and ‘Paralegal Training’.
During his foray into solo practice of law, Atty. Cortes served as a legal consultant at the Department of Agrarian Reform (DAR) as well as a retainer of Siccion Holdings, Inc. and Gomeco Metal Corporation. A holder of the Career Service Executive Eligibility (CSEE) from the Civil Service Commission, he was, from August 2013 up to April 2018, AVP for Legal and Admin and Corporate Secretary to the Governing Board of the DBP Leasing Corporation, a wholly owned subsidiary of the Development Bank of the Philippines or DBP.
Atty. Cortes is presently Deputy Legal Counsel of the Magsaysay Group of Companies.
2) Significant Employees No person, who is not a director or an executive officer, is expected to make a significant contribution to the business of the Company. Neither is the business highly dependent on the services of key personnel.
3) Family Relationships All the other above named directors and/or executive officers of the Company are not related, either by consanguinity or affinity up to the fourth civil degree.
4) Involvement in Certain Legal Proceedings To the knowledge and/or information of the Company, the above named directors and executive officers of the Company are not, presently or during the last five (5) years, involved or have been involved in any material legal proceeding affecting/involving themselves and/or their property before any court of law or administrative body in the Philippines or elsewhere. To the knowledge and/or information of the Company, the said persons have not been convicted by final judgment of any offense punishable by the laws of the Republic of the Philippines or of the laws of any other nation/country.
ITEM 10 – EXECUTIVE COMPENSATION A. Executive Compensation
The aggregate total compensation for directors, the President and the top five officers of the Company is shown below.
Top five (5) officers
Compensation YEAR Compensation (Bonuses) 2020 Php 2.11M(est) Php0.26M(est) 2019 Php 1.89M
Php 0.24M
Compensation YEAR Compensation (Bonuses)
2018 Php 1.80M Php 0.24M
Mr. Edralin Manapsal, VP – Sales and Marketing
Top five (5) officers
Compensation YEAR Compensation (Bonuses)
2017 Php 3.4M
Php 0.23M
Mr. Edralin Manapsal, VP- Sales and Marketing
1) All officers and directors Year Compensation Bonuses as a group unnamed 2019 Php 4.00M Php0.24M 2018 Php 3.76M Php0.24M 2017 Php 5.02M Php 0.23M
2) Compensation of Directors Year Compensation Bonuses 2019 Php 1.698M Php - M 2018 Php 1.958M Php -M 2017 Php 0.90M Php - M
3) Employment Contracts and Termination of Employment and Change-in-Control Arrangements.
There are no employment contracts between the Company and a named executive officer, and any compensatory plan or arrangement, including payments to be received from the Company, with respect to a named executive officer, which plan or arrangement results or will result from the resignation, retirement or any other termination of such executive officer's employment with the Company and its subsidiaries or from a change-in-control of the Company or a change in the named executive officer's responsibilities following a change-in-control and the amount involved, including all periodic payments or instalments, which exceeds Php2,500,000.
ITEM 11 - SECURITY OF CERTAIN RECORD/BENEFICIAL OWNERS AND MANAGEMENT A. Security Ownership of Certain Record/Beneficial Owners as of March 31, 2020 As of March 31, 2020, the following stockholders are the only owners of more than 5% of the Company’s voting capital stock, whether directly or indirectly, as record owner or beneficial owner:
Title of Class
Name, Address of Record Owner and Relationship with
Issuer
Name of Beneficial Owner and
Relationship with Record Owner
Citizenship No. of
Shares Held Percent
Common
National Marine Corporation 21/F Times Plaza, U.N. Ave. cor. Taft Ave., Ermita, Manila
Doris Magsaysay Ho, the President of National Marine Corporation, and Antony Louis Marden, a director of National Marine Corporation, are authorized to vote for the shares of National Marine Corporation in the Company
Filipino
Direct
276,520,756
Indirect 102,628,805
49.86%
18.50%
Title of Class
Name, Address of Record Owner and Relationship with Issuer
Name of Beneficial Owner and Relationship with Record Owner
Citizenship No. of Shares Held
Percent
Common
Pioneer Insurance & Surety Corp. (“Pioneer) 108 Paseo de Roxas, Makati City Pioneer is the Company’s insurer for its seven (7) vessels
Pioneer is the beneficial owner of the shares. Mr. David Coyukiat, the President of Pioneer, is duly authorized to vote for the shares of Pioneer in the Company.
Filipino
Indirect
73,832,800
13.31%
Common
Julio O. Sy, Sr.
Filipino
Indirect
42,744,511
7.71%
B. Security Ownership of Management as of March 31, 2020 The following table sets forth as of March 31, 2020, the beneficial ownership of each director and executive officer of the Company:
Title of Class Name of Beneficial Owner Amount & Nature of
Citizenship Percent of
Beneficial Ownership Class
Common Doris Magsaysay Ho 1 Record Filipino 0.00% Common Antony Louis Marden 1 Record British 0.00% Common Michael L. Escaler 241,250 Record Filipino 0.04% Common Deogracias N. Vistan 3,750 Record Filipino 0.00% Common Rene Buenaventura 1,000 Record Filipino 0.00% Common Virgilio L. Pena 1,000 Record Filipino 0.00% Common Reynold John B. Madamba 1,000 Record Filipino 0.00% Common Atty. Arsenio C. Cabrera, Jr. 30,000 Record Filipino 0.01% Common Directors & Officers as a Group 278,002 Record 0.05%
C. Voting Trust Holders of 5% or More NMC and Pioneer entered into a Voting Trust Agreement whereby Pioneer transferred and delivered stock certificates covering 75,193,750 shares of the Company or approximately 13.53% of the Company’s outstanding capital stock to NMC as the Trustee. The Agreement provided that NMC, as the Trustee, was entitled to exercise all the rights and powers of an absolute owner of said shares of stock, including the right to vote for every corporate purpose in accordance with its best judgment. Under the terms of the Voting Trust Agreement, NMC is obliged to deliver proper certificates of the equivalent amount of shares in the Company to Pioneer in July 2006 or in any period that may be subsequently agreed upon by the parties. D. Changes in Control There is no existing arrangement which may result in a change of control in the Company. ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Transactions between related parties are accounted for at arms’ length prices or on terms similar to those offered to non-related entities in an economically comparable market. The following are the list of transactions during the past two (2) years to which the Company is a party, and in which certain persons or group have a direct or indirect material interest. 1. NMC Container Lines, Inc. (NMCCLI) – related party
A wholly owned subsidiary of NMC, NMCCLI has a Transport Service Contract with the Company. The parties engage the sevices of the Vessels for the transport of cargo in the course of its trade or business of transporting and carrying various freight and goods.
2. Asiaport Equipment and Logistics Corporation – related party
On 01 September 2008, LSC signed a cargo-handling contract with Asiaport Equipment and Logistics Corporation for the handling of its containers at LSC’s container yard at Pier 16 in Manila.
On 31 May 2016, LSC and Asiaport once more entered into a Container Handling Contract for the yard handling operations of Asiaport in Cebu. A separate contract was made on the same date, but this time for Asiaport’s Cagayan De Oro operations, under the same terms and conditions as the documentation for Cebu.
Asiaport is 30 percent owned by National Marine Corporation.
3. Roadlink Solutions, Inc. (RSI) – related party
A wholly owned subsidiary of NMC, RSI provides logistical support to the Company by providing logistics services, cargo handling, and cargo trucking, among other services.
4. Magsaysay Houlder Insurance Brokers, Inc. (MHIBI) – related party
MHIBI handles the marine cargo insurance and FGI requirements of the Company. 5. Magsaysay Shipmanagement Inc. (MSI) – related party
MSI is an associate company of NMC. It provides technical services to the company’s vessels, ensuring that all vessels are in seaworthy condition and in accordance with the standards set by the Company. MSI also handles the management of the vessel crew.
6. Dumaguete Coconut Mills – related party
Dumaguete Coconut Mills is a corporation substantially owned by Mr. Julio Sy Sr., shareholder, director of the Company. The Company entered into a Contract of Lease with Dumaguete Coconut Mills for the rental of a parcel of land located at Bacong, Negros Oriental.
7. Pioneer Insurance & Surety Corp. (Pioneer), Shareholder
Pioneer is the Company’s provider of protection and indemnity and of hull & machinery insurances for its six (6) vessels.
8. Marine Fuels Philippines, Inc. (MFPI) – related party
A wholly owned subsidiary of NMC, MFPI supplies LSC’s fuel requirement. 9. Pacific Roadlink Logistics, Inc. (PRLI) – related party
NMC owns 50% of PRLI, a joint venture with IHTC. PRLI provides trucking services to the company. The following customers are majority owned by directors or shareholders:
Customers Director/Shareholder All Asian Countertrade Majority owned by Mr. Michael Escaler, director Oceanic Container Lines, Inc. Majority owned by Mr. Jose Go Jr., shareholder
PART IV – CORPORATE GOVERNANCE
ITEM 12 – CORPORATE GOVERNANCE Please refer to the 2019 Integrated Annual Corporate Governance Report (SEC Form – I-ACGR) of LSC, which shall be filed with the SEC and posted in the Company’s corporate website www.lorenzoshipping.com, on or before July 30, 2020 in compliance with SEC Notice dated 22 April 2020.
PART V – EXHIBITS AND SCHEDULES ITEM 13 - EXHIBITS AND REPORTS ON SEC FORM 17-C A. Exhibits
Exhibits Description
A Sustainability Report
B Financial Statements Statement of Management’s Responsibility for Financial
Statements Report of Independent Accountants Balance Sheets as of December 31, 2018 and 2017 Statements of Income for each of the three years ended
December 31, 2018, 2017 and 2016 Statements of Comprehensive Income for each of the three
years ended December 31, 2018, 2017 and 2016 Statements of Changes in Stockholders’ Equity for each of the
three years ended December 31, 2018, 2017 and 2016 Statements of Cash Flows for each of the three years ended
December 31, 2018, 2017 and 2016 Notes to Financial Statements Index to Financial Statements and Supplementary Schedules
Schedule A – Financial Assets Schedule B – Amounts Receivables from Directors, Officers,
Employees, Related Parties and Principal Stockholders (Other than Related Parties)
Schedule C – Amounts Receivable from Related Parties Which Are Eliminated During Consolidation
Schedule D – Intangible Assets – Other Assets Schedule E – Long Term Debt Schedule F – Indebtedness to Related Parties (Long-term
loans from Related Companies) Schedule G – Guarantees of Securities of Other Issuers Schedule H – Capital Stock
B. Reports on SEC Form 17-C State whether any reports on SEC Form 17-C were filed during the last twelve month period covered by this report, listing the items reported, any financial statements filed and the dates of such.
Report Date Item
6 February 2019
The following were the change in Directors and/or Officers: a). Election or Appointment 1. Agnes N. Domingo – Chief Finance Officer
02 May 2019 Nominations for Election of Board of Directors
The following individuals were pre-screened and determined to possess the qualifications required and none of the disqualifications provided for by law, relevant rules and regulations and the Company’s Manual on Corporate Governance to become members of the Company’s Board of Directors for 2019:
1. Doris Magsaysay Ho 2. Antony Louis Marden 3. Reynold John B. Madamba 4. Michael L. Escaler
Independent Directors:
5. Deogracias N. Vistan 6. Rene J. Buenaventura 7. Virgilio Pena
02 July 2019 Results of Annual Stockholders’ Meeting
a) Election of Directors List of elected directors for the ensuing year and until the election and qualification of their successors: 1. Doris Magsaysay Ho 2. Antony Louis Marden 3. Reynold John B. Madamba 4. Michael L. Escaler
Independent Directors: 5. Deogracias N. Vistan 6. Rene J. Buenaventura
7. Virgilio Pena
b) Appointment of External Auditor The stockholders also appointed SyCip Gorres Velayo & Company as the Corporation’s external auditor for the year 2019..
02 July 2019 Results of 2019 Organizational Meeting of the Board of Directors
a) List of elected officers for the ensuing year and until the election and qualification of their successors: Doris Magsaysay Ho – Chairperson Antony Louis Marden – Vice Chairman Reynold John B. Madamba - President Agnes N. Domingo – Chief Finance Officer Roland J. Portes – Vice President for Operations Deogracias N. Vistan – Lead Independent Director Eric R. Cortes – Compliance Officer Arsenio C. Cabrera, Jr. – Corporate Secretary and Corporate Information Officer Anna Carmina S. Herrera – Assistant Corporate Secretary
b) List of Committees and Membership Executive Committee Doris Magsaysay Ho – Chairperson Antony Louis Marden – Member Reynold John B. Madamba – Member Audit Committee Deogracias N. Vistan – Chairman Antony Louis Marden – Member Michael L. Escaler – Member Rene J. Buenaventura- Member Virgilio L. Pena - Member Corporate Governance Committee Rene J. Buenaventura – Chairman Antony Louis Marden – Member Michael L. Escaler – Member Deogracias N. Vistan – Member Virgilio L. Pena - Member Related Party Transactions Committee Virgilio L. Pena – Chairperson Antony Louis Marden – Member Deogracias N. Vistan – Member Rene J. Buenaventura – Member Michael L. Escaler – Member
Board Risk Oversight Committee Michael L. Escaler – Chairperson Antony Louis Marden – Member Deogracias N. Vistan – Member Rene J. Buenaventura – Member Virgilio L. Pena - Member
04 Oct 2019 Change of Corporate Contact Details and/or Website Updating of telephone number – (632)8567-2180
EXHIBIT B
SCHEDULE V
LORENZO SHIPPING CORPORATION
SCHEDULE A
FINANCIAL ASSETS
December 31, 2019
Name of issuing entity and
association of each issue
Number of shares or
principal amount of
bonds and notes
Amount shown in the
balance sheet
Value based on market
quotation at balance
sheet date
Income received and
accrued
Cash P=– P=204,913,480 P=– P=
Trade and other receivables:
Trade – 905,946,792 – –
Contract assets 45,614,484
Non-trade – 18,955,244 – –
Advances – 9,895,361 – –
Insurance claims – – – –
Receivables from officers
and employees – 1,954,016 – –
Other receivables – 2,000,195 – –
Loan receivable – – – –
Others – 3,658,923 – –
Total P=– 1,192,947,703P= P=– P=
SCHEDULE B
AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES AND
PRINCIPAL STOCKHOLDERS (OTHER THAN RELATED PARTIES)
December 31, 2019
Deduction
Name and designation of debtor
Balance at beginning of period Additions Amounts collected Amounts written off Current Not current
Balance at end of period
Virginia M. Latonero 250,000 – – – – – 250,000
Total P=250,000 P=– P=– P=– P=– P=– P=250,000
No other receivables are above P=100,000.
LORENZO SHIPPING CORPORATION
SCHEDULE C
AMOUNTS RECEIVABLE FROM RELATED PARTIES WHICH ARE ELIMINATED
DURING CONSOLIDATION
December 31, 2019
(Amounts in Thousands)
Name and designation of debtor
Balance at
beginning of
period Additions
Amounts
collected
Forex
adjustment Current
Not
current
Balance at
end of period
NOT APPLICABLE
LORENZO SHIPPING CORPORATION
SCHEDULE D
INTANGIBLE ASSETS - OTHER ASSETS
December 31, 2019
Deduction (3) Other
Changes Additions
(Deductions)
Description (1) January 01,
2019 Additions at cost (2)
Charged to Costs and Expenses
Charged to Other
Accounts December 31,
2019
NOT APPLICABLE
LORENZO SHIPPING CORPORATION
SCHEDULE E
LONG TERM DEBT
December 31, 2019
Title of issue and type
of obligation
Amount authorized by
indenture
Amount shown under
caption "Current portion
of long-term debt"
Amount shown
caption "Long-term
debt" Notes
China Banking
Corporation
P=111,111,111 P=22,222,222 P=88,888,891 Annual interest rate is equal to PDST-R2 plus 1.25%
inclusive of Gross Receipts Tax rate (GRT) and BSP
overnight borrowing rate plus spread of 0.125% inclusive
of GRT whichever is higher, subject to quarterly repricing.
The loan is payable quarterly in 36 equal quarterly
installments. China Banking
Corporation
127,777,778 22,222,222 105,555,556 Annual interest rate is equal to 90-day PDST-R2 plus
1.25% inclusive of GRT and BSP overnight borrowing rate
plus spread of 0.125% inclusive of GRT whichever is
higher, subject to quarterly repricing. The loan is payable
quarterly in 36 equal quarterly installment. Banco de Oro 50,000,000 50,000,000 - Annual interest rate is equal to the PDST-R2 plus 1.20%
spread plus 1.00% GRT or BSP overnight borrowing rate
plus 0.25% and 1.00% GRT whichever is higher, subject
to quarterly repricing. Principal and interest are payable
quarterly. Banco de Oro 26,400,000 26,400,000 - Annual interest rate is equal to 3-month PDST R-2 plus 120
bps (inclusive of GRT) with floor rate of BSP overnight
rate. The loan is payable quarterly in 20 equal installments.
Total P=315,288,889 P=120,844,444 P=194,444,445
LORENZO SHIPPING CORPORATION
SCHEDULE F
INDEBTEDNESS TO RELATED PARTIES (LONG - TERM LOANS FROM RELATED COMPANIES)
December 31, 2019
Name of the Related Party Balance at beginning of period Balance at end of period
NOT APPLICABLE
LORENZO SHIPPING CORPORATION
SCHEDULE G
GUARANTEES OF SECURITIES OF OTHER ISSUERS
December 31, 2019
Name of the issuing entity of securities
guaranteed by the company for which the
statement is filed
Title of issue of each class
of securities guaranteed
Total amount
guaranteed and
outstanding
Amount owned by
person for which
statement is lifted
Nature of
guarantee
NOT APPLICABLE
LORENZO SHIPPING CORPORATION
SCHEDULE H
CAPITAL STOCK
December 31, 2019
Title of
Issue
Number of Shares
Authorized
Number of shares
issued and outstanding
and shown under
related balance sheet
caption
Number of shares
reserved for
options, warrants,
conversion and
other rights
Number of shares held by related parties
Treasury
shares Affiliates
Directors,
officers and
employees Others
Common 991,183,999 555,652,251 – 379,149,561 278,002 73,862,800 1,010,000
Exhibit C
1
Contextual Information Company Details
Name of Organization Lorenzo Shipping Corporation
Location of Headquarters 20th Floor, Times Plaza Bldg. U.N. Ave. cor. Taft Ave. Ermita, Manila
Location of Operations Davao, Gen. Santos, Iloilo, Cebu, Dumaguete, Cotabato, Cagayan De Oro, Zamboanga, Bacolod
Report Boundary: Legal entities (e.g. subsidiaries) included in this report*
This Report covers activities of the company in its Manila office as
well as its branch offices.
Business Model, including Primary Activities, Brands, Products, and Services
Lorenzo Shipping Corporation (“LSC”) is engaged in the business of operation of coastwise trade vessel and containerized shipping. It provides transport solutions across the country.
Reporting Period 01 January 2019 – 31 December 2019
Highest Ranking Person responsible for this report
Reynold John B. Madamba, President Jay R. Olivarez, Compliance Officer
Lorenzo Shipping Sustainability Report 2019
Our Vision Preferred liner company offering competitive, reliable, quality and safe shipping services. Our Mission WORKING TOGETHER FOR EXCELLENCE” We are fully committed to exceeding the expectations of our stakeholders: Our Customers: We offer our customers a great customer journey. We understand our customers’ goals and needs, and as partners, offer innovative solutions to help them succeed. Employees: We provide a great place to work. We reward creativity and outstanding performance and embrace our values. Shareholders: We will generate a return of investment that will progressively increase the organization’s value. Suppliers and Service Providers: We will maintain lasting and mutually beneficial professional relationships. Society: We will ensure that our actions will benefit the larger community we serve and protect the environment where we live and work. Our Values Excellence, Integrity, Enthusiasm, Accountability, Innovation, and WE CARE.
2
Our Sustainability Vision
Everything Matters when we act and work with purpose to give enduring value to our customers, our people and to Society highly committed to the highest standards of safety and sustainability.
Sustainability is our corporate commitment to the balanced integration of economic, environmental and social factors into our everyday business operations.
EVERYTHING MATTERS.
Message from the President
Welcome to Lorenzo Shipping’s Sustainability Report 2019
We are driven by our mission to serve the needs of our customers and the communities they serve with essential shipping services bringing goods from producers to markets, propelled by an entrepreneurial spirit, inspired by living with purpose and guided by a culture of integrity.
As we face the years of disruption and change, never before has sustainability been more important to ensure we protect the interests of our stakeholders: the shareholders, our customers and suppliers, our employees and their families and the companies as a whole.
Each and every one must adhere to strong principles, rules and regulations, local and international laws, in order to ensure the company’s long-term success.
Our Company values are the foundation of our core belief systems: excellence, integrity, enthusiasm, accountability, innovation and WE CARE.
Our Brand Promise is that “Everything Matters” so everything we do, big or small is important.
We hope that this report will show our uncompromising commitment to the balanced integration of economic, environmental and social factors into our everyday business operations which will allow us to achieve our contribution to society and to our planet.
Corporate Governance We are grateful for the active engagement of the Board of Directors who meet regularly to guide and approve our strategy. Doris Magsaysay Ho- Chair Antony Marden- Vice Chair R. J. Madamba – President Michael Escaler - Director Deogracias Vistan- Independent Director Ver Pena- Independent Director Rene Buenaventure- Independent Director
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The Audit Committee is comprised of Non-Executive Directors who oversee the internal controls, risk
management, compliance and overall business conduct.
The Governance Committee
The Risk Committee
MATERIALITY PROCESS
In preparing the Lorenzo Shipping Sustainability Plan and Reporting, our Management team identified the areas that matter most and stand out as being most likely to bring about the severity of such impacts judged by their scale and gravity. These risks of adverse impact were analyzed according to those potentially caused by our own undertaking in our operations, or those by our suppliers and subcontractors. Even if our brand promise is “Everything Matters”, we were compelled to understand what really matters to the success of the business, and to rate how much something matters so that we can allocate resources to guide strategy and objectives. Moving forward, LSC commits itself to the continuous identification of the impacts and risks of its operations and ensure that these are monitored, reported and managed.
ECONOMIC
ECONOMIC PERFORMANCE
Direct Economic Value Generated and Distributed
Disclosure Amount Units
Direct economic value generated (revenue) 2,972,631,261 PhP
Direct economic value distributed:
a. Operating costs 2,941,697,678.49 PhP
b. Employee wages and benefits 118,110,039.29 PhP
c. Payments to suppliers, other operating costs 138,120,395.59 Php
d. Dividends given to stockholders and interest payments to loan providers
n/a PhP
e. Taxes given to government 14,912,982.17 PhP
f. Investments to community (e.g. donations, CSR) n/a PhP
Impact Which stakeholders are affected? Management Approach
LSC is one of 12 main
liner shipping
Stakeholders affected large and small businesses that need to get
The Management of LSC, with the support of its incumbent Board of Directors (“Governing Board”),
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companies engaged in
the business of
transport of
containerized cargoes
being shipped to and
from main ports in the
Philippines.
LSC serves as one of
the country’s
connections between
ports or islands of
origin and destination
in order to link sources
of goods to their
consumers who are the
end-users. As an
archipelago with
thousands of islands,
regular, cost efficient
essential shipping
services ensures that
the continuous flow of
food, medicines, raw
material are brought to
markets in a
dependable way to
support large
companies to MSMEs
that us LSCs less than
container loads
services.
LSC also offers door to
door services
extending beyond the
ports of origin and
destination to the off-
dock containers yards,
to the shippers’ and
consignees’ facilities,
warehouses, and
distribution centers.
Aside from the impact
it makes, LSC
contributes to the
country’s economy in
their goods to markets, service providers that manage and maintain the ships, seafarers and employees. The economic performance of LSC certainly also impacts aspects of growth of its own shareholders, investors and creditors.
always strives to improve its processes and ways of doing business to achieve cost efficiency, safe operations, profitability while maintaining competitiveness in the industry. Likewise, LSC is committed to comply with governmental rules, promptly paying its taxes to the Bureau of Internal Revenue and other government agencies. It also values it relationship to its suppliers in order to contribute to the sustainability of all parties .
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terms of its procuring
goods and services for
ships maintenance and
repair, compensation
paid to its employees,
fees paid to its service
providers and taxes
remitted to the
government and the
different sectors.
Because the ships
need to have just in
time supplier support,
the impact of delay in
spare parts coming
from overseas can
cause massive
operational stoppages.
The impact of fines,
penalties from bad
governance is also an
issue that matters
greatly .
Risks Which stakeholders are affected? Management Approach
1) Fluctuations of cargo volumes, oversupply and Freight Rates.
2) Port and Road
Congestions 3) Fluctuations of
Fuel Price
4) Disruptions to Vessel Operations
5) Fluctuations of Interest Rates
6) Natural Disasters
7) Lack of Spares
Customers, Shareholders,
Employees, Suppliers
The management of LSC is committed to address
sustainability issues by focusing on efficiency, safe
and reliable transport services.
The Management also has a Vendor Management
Policy
The Board, the Audit Committee and Management
focuses on the Governance Policy and the Code of
Ethics and Conduct to ensure the highest standard of
integrity.
The management of LSC has put in place an anti-
corruption and anti-bribery policy that applies to both
its personnel as well as to its counter-parties in the
Company’s regular dealings or transactions with
various entities.
As the management understands that the matter is a
sensitive issue, LSC also implemented a
‘Whistleblowing Policy” including its procedures that
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and supplies
8) Fines and Penalties from Bad Governance and Corruption
9) Negative Impact reputation, goodwill and the Brand
10) Judicial sanctions
against LSC.
create a non-hostile environment which is conducive
to reporting such incidents with the end goal of
curbing, if not totally averting acts constituting
corruption or bribery.
For more information, please refer to Company’s policy
on Anti-Corruption and Bribery and its Code of Business
Conduct and Ethics:
https://www.lorenzoshipping.com/en/PDF/LSC_May2019_Up
dates/Corporate_Governance/Company_Policies/LSC_Anti-
Corruption_and_Bribery_Policy.pdf
https://www.lorenzoshipping.com/en/PDF/LSC_May2019_U
pdates/LEGAL/LSC_Code_of_Business_Conduct_and_Ethics.
Opportunities Which stakeholders are affected? Management Approach
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SAFE OPERATIONS
TARGET ACTIONS METRICS
Pursuing Safe Operations
Achieve “Zero Harm“
Zero Harm to People
Zero Harm to Ship
Zero Harm to Cargo
Zero Harm to the Sea and Marine Life
Zero Fatality
Zero Lost Time Incident LTI
Zero Serious Marine Accidents
Zero Cargo damage
Zero Oil Pollution
Zero waste Pollution
Vessel Continuous Operations
Operational stoppage Number of Accidents due to Human Error
Number of days stoppage due to operational issues
Number of days/hours delay due to Port congestions
Vessels Safety Management Manual
Training and Development of shore-based and ship board crew
SMS Orientation – 3hrs
ISM Internal Audit – once a year
Masters Review – every 6months
Company Management Review – once a year
100% Compliance
Safety Culture Development
Continuous Culture development of organic and sub-contractual teams
Accident/Incident Reporting Procedure - No Blame Culture
Safety Response System
Digitalization to track Typhoons and congestion
24 hours support
Emergency Response Procedure
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CUSTOMER CENTRIC PROGRAMS
TARGET ACTIONS METRICS
Customer Satisfaction Surveys
Regularly engage Customers in surveys to identify Customer Painpoints and needs
Survey rating of at least 4 out of 5.
Customer Journey Digitalization Programs
Engage Customers in the process simplification initiatives meant to reduce cycle time from booking to delivery.
Provide Customers with platform to book, and monitor shipments online.
Customer Data Privacy
Cybersecurity Protection
Customer privacy
Disclosure Quantity Units
No. of substantiated complaints on customer privacy* 0 #
No. of complaints addressed N/A #
No. of customers, users and account holders whose information is used for secondary purposes
N/A #
*Substantiated complaints include complaints from customers that went through the organization’s formal communication
channels and grievance mechanisms as well as complaints that were lodged to and acted upon by government agencies.
Data Security Disclosure Quantity Units
No. of data breaches, including leaks, thefts and losses of data
0 #
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PROCUREMENT POLICIES
TARGET ACTIONS METRICS
Build Relationships with suppliers that stock locally
Strict accreditation system with Dun and Bradstreet for local and international suppliers
Digital Supplier List through Shipserv.com
At least 5 suppliers for items in locations around the country
92.36 percent of all purchases are from suppliers located in the Philippines
Vendor Management System
Approval Processes and Authorizations only from Accredited suppliers through SAP
Suppliers sign LSC Integrity Pact, Conflict of Interest, Data Privacy, Anti-Corruption, Forced and Child Labor, Non-Compliance to Environmental Policies / Safety and violations of Human Rights before being accepted as an accredited vendor.
Supplier Diversity Green Procurement Policy
Women owned Businesses
Accuracy of Purchase of Spares
Training and Development of Buyers
Planned Maintenance System through Spectec
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For Forced Labor and Child Labor, all suppliers and contractors being engaged by the company are
properly evaluated and are required to provide documents that they are legitimate companies, no legal
issues, and approved to operate by their local government. A vendor audit on the respective
supplier/contractor location is being made to check if there are any untoward business practices such as
forced and child labor incidents in their offices or location of doing business. As part of the audit
activity, an audit checklist and ocular evaluation form is being crafted based on the operational and
business standards of the company which includes the manpower and organizational resources of the
company.
For Environmental Performance and Human Rights, SPU has started profiling several suppliers and
contractors who support any Green Initiatives, and Women Empowerment programs, for human rights
and equality. Criteria has been developed to qualify those suppliers and contractors that fall into these
categories, and as of 2019, LSC has engaged 5% of the total suppliers/contractors that fall in to these
categories of green procurement and women empowered companies.
As part of the Supplier Accreditation/Registration process, Anti-Bribery and Anti-Corruption is being
emphasized to the applicants, whereas such documents like, Conflict of Interest, Integrity Pact, Data
Privacy & Performance Checking, are being asked to be signed by the applicant before they could be
registered to the company. This is to ensure that the suppliers and contractors understand that those
unethical business practices will not be condoned in LSC and corresponding penalty will be imposed if
such activities happen. A regular monitoring of transactions is being made regularly to see if there are
unusual trend on awarding of transactions to suppliers/contractors that may raise a suspicion that
bribery and corruption is taking place. Any suspicion that certain transactions that can be categorized to
fall under bribery and corruption, an immediate report and investigation is being requested for the
management and audit team to mobilize.
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GOVERNANCE AND CODE OF CONDUCT
TARGET ACTIONS METRICS
Governance Policy Regular Meetings of the following:
- Board - Executive Committee - Audit Committee - Corporate Governance Committee - Risk Committee - Nominations and Compensation
Committee
Assessment of Board Effectiveness
Regular Training of the Independent Board Members
Code of Ethics and Conduct
Strict adherence to the established standards.
Adoption of Whistleblowing Policy.
Development of the value of Integrity.
Anti-Sexual Harassment Policy
Strict adherence to the established standards.
ANTI-CORRUPTION
Training on Anti-corruption Policies and Procedures
Disclosure Quantity Units
Percentage of employees to whom the organization’s anti-corruption policies and procedures have been communicated to
100 %
Percentage of business partners to whom the organization’s anti-corruption policies and procedures have been communicated to
100 %
Percentage of directors and management that have received anti-corruption training
0 %
Percentage of employees that have received anti-corruption training
0 %
Incidents of Corruption
Disclosure Quantity Units
Number of incidents in which directors were removed or disciplined for corruption
0 #
Number of incidents in which employees were dismissed or disciplined for corruption
0 #
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Number of incidents when contracts with business partners were terminated due to incidents of corruption
0 #
ENVIRONMENT Impact Which stakeholders are
affected?
Management Approach
For Ships
Although CO2 emissions from
ships are extremely small in
comparison to other transport
systems, a container ship can
cause marine pollution from oil
spill that can result from
careless ship to ship bunkering,
or damage to the hull causing a
leak of oil into the ocean.
Careless navigation or an idle
ship can also cause damage to
coral reefs, fish farms and
others that potentially destroy
livelihood and tourism.
For Trucks
Impact is confined to CO2
emission especially when trucks
are left in a poor state and trip
not properly planned.
Shareholders, Employees
and the Community
LSC, through its Ship Management
Team, will manage the risks to the
environment for its vessel operations.
It will be strengthened and improved
continually though the proper
implementation of Safety
Management System which is vetted
by the Flag State and vessel
Classification Societies which are
members of IACS (International
Association of Classification Society).
Promote use of improved parts
technology (e.g. low friction paints on
hull) that will reduce frictional force
there by improving speed and
indirectly reduce consumption and/or
emission.
LSC is proactively engaging its
truckers in programs meant to
improve efficient operations (e.g. use
of GPS) and protection of the
environment (e.g. “Balik Baterya”
Program and proper waste disposal).
Risks Which stakeholders are
affected?
1) Risk to Suit by communities
2) Risk to reputation
3) Penalties and Fines
Company, Shareholders,
Employees
Opportunities Which stakeholders are
affected?
Management Approach
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TARGET ACTIONS METRICS
Prevention of Marine Pollution
From ships Oil Sludge/Oily Water Disposals
We strictly adhere to the Preventive Maintenance of the ships to ensure that all machineries are in good running condition; no leaks or defects that can generate oily water wastes. Training of Sea-based personnel to MARPOL Annex 1 and 5. Waste Disposal Implementation of 3R’s (Reduce, Reuse, Recycle) and waste segregation. Establish a Garbage Management Plan where plastic garbage is prohibited to be disposed at sea. Garbage will be suitably segregated and dispose at convenient ports. Save Bunker Fuel Slow steaming with an average of 10 knots whenever possible No Single Use Plastic Policy Policy is included in the Waste Prevention and Management Guideline From Shore-based Facilities near along the sea and river Cleaning of Facilities Policy
Volume of oil sludge and oily water disposal (tons); Target reduction to be set once baselining is completed.
Volume of waste generated
Target reduction to be set once baselining is completed.
5% reduction vs. normal speed
Volume of waste generated.
Target reduction to be set once baselining is completed.
Once a year coastal clean-up in collaboration with Philippine Coast Guard
Reduce Green House Gas
Slow Steaming
Reduce emissions from ships by slow steaming to an average of 10 knots.
Use of diesel oil instead of bunker fuel oil.
Target reduction to be set once baselining is completed.
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Truck Planned Maintenance System to reduce emissions
GPS to ensure minimized hours on the road
Reduce time travel by 10%.
Measures to Mitigate Climate Change
Optimize efficiency by using the shortest route
Collaborate with industry to have a culture of caring for the environment
Response to Environmental Regulations
The MARINA has not yet required Philippine domestic vessels from IMO 2020 reducing Sulphur content in the fuel that ships burn to reduce air pollution to .05 percent. Since low Sulphur fuel supply is limited and ships too small and uneconomical to fit scrubbers, Lorenzo has shifted its fuel to diesel oil.
Safety-First over Business Policy
No sail during typhoons
Disposal of Ships and Containers
Ship and Container Recycling Policy
Protection of Marine Areas and Marine Life
Training of Crew in Navigation
Deck Officers:
Training on Ships Handling and Maneuvering
Engine Officers:
Training on Engine Room Simulator with Engine Resource Management
Deck Rating:
Training on Deck Watch-keeping for Rating
Engine Rating:
Training on Engine Watch-keeping for Rating
Annual Target:
Deck Officers – 35hrs
Engine Officers – 40hrs
Deck Rating – 42hrs
Engine Rating – 42hrs
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Dangerous and Prohibited Cargo
Adoption of Know Your Customer (KYC) Policy
Zero acceptance of prohibited cargo
Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas
Compliance to Local Government Units (LGU) and DENR’s Environmental Protection Program.
Zero non-compliance
Habitats protected or restored
Not applicable
IUCN1 Red List species and national conservation list species with habitats in areas affected by operations
Not applicable
Energy reduction initiatives
We are currently baselining and will measure reduction by a certain number of percent.
Promoting the use of LED lights on offices and vessels.
Education and learning regarding energy consumption
RESOURCE MANAGEMENT
Energy consumption within the organization: 1
Disclosure2 Quantity Units
Energy consumption (renewable sources) No data available GJ
Energy consumption (gasoline) N/A GJ
Energy consumption (LPG) N/A GJ
Energy consumption (diesel) 9,320,000 L
Energy consumption (electricity) 6,700kWHh from built-in generators on board vessels and 2000kWH from
kWh
1 International Union for Conservation of Nature
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portable generators 1Carbon footprint = ((L of fuel x 2.68 kgCO2pL)/1000 = MTCO2) = 24,977.6 2 Different emission sources come from CO2 emission from vessel-generated consumption with a combined 20 million liters of IFO 180 for bunker and ADO (diesel); Vessels, Land-Based equipment (LBEs), company vehicles, portable generation sets, HVAC systems in all offices.
Reduction of energy consumption1
Disclosure Quantity Units
Energy reduction (gasoline) No data available GJ
Energy reduction (LPG) No data available GJ
Energy reduction (diesel) No data available GJ
Energy reduction (electricity) No data available kWh
Energy reduction (gasoline) No data available GJ 1In 2019, LSC implemented a policy to reduce twenty percent (20%) in corporate air travel as part of its cost
rationalization.
Water consumption within the organization
Disclosure Quantity Units
Water withdrawal No data available Cubic meters
Water consumption 71,289 Cubic meters
Water recycled and reused1 No data available Cubic meters
1 LSC only has a disposal policy that covers used oil disposal which is outsourced with used oil
contractor.
Materials used by the organization
Disclosure Quantity Units
Materials used by weight or volume
Renewable No data available kg/liters
non-renewable No data available kg/liters
Percentage of recycled input materials used to manufacture the organization’s primary products and services
Not applicable %
Effluents
Disclosure Quantity Units
Total volume of water discharges 71,289 Cubic meters
Percent of waste water recycled 11.28 %
Impact Which stakeholders are affected? Management Approach
LSC uses and sources its water Employees, Customers, As there is no explicit
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from water utility companies
operating in the areas of its
operation.
Similar with energy
consumption, higher water
consumption entails higher
operation expenses.
Community, LSC company policy on water
usage yet, the Management
treats and factors water
consumption in its
operational costs and
ensures that consumption is
minimize through proper
training and information
dissemination to its
personnel including those
working in the office
premises and involved in
transportation and logistics
operations.
Risks Which stakeholders are affected? Management Approach
Employees and other personnel’s
tendencies to consume water
inefficiently.
Employees, Management,
Community, LSC
LSC is conducting awareness
campaign on efficient water
and energy consumption.
Opportunities Which stakeholders are affected? Management Approach
LSC to employ and improve its
water efficiency and utilization
rate and consider adopting more
sustainable way of consumption
of water.
Employees, Management,
Community, LSC, Shareholders
Government
LSC to explore options and
sustainable avenues for using
and recycling water which may
include the use of rainwater,
waste water treatment etc.
Ecosystems and biodiversity (whether in upland/watershed or coastal/marine) Disclosure Quantity Units
n/a
n/a ha
n/a
Impact Which stakeholders are
affected?
Management Approach
LSC’s operations includes coast
wide transportation where coastal
and marine navigation is
considered key part of its operation
Community, Employees,
Management,
Government
LSC ensures that it complies with all
government mandated rules and
secures the necessary permit and
licenses in MARINA and other relevant
agencies in conducting its operations.
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Risks Which stakeholders are
affected?
Management Approach
Risk may involve collision during
inter-island operations
Community, Employees,
Management,
Government
LSC ensure that it holds itself
accountable should there be any
instances to such effect. The
Management also ensures that it only
contracts vessels that are compliant
with the government mandates rules
on coast wide and inter-island
shipment.
Opportunities Which stakeholders are
affected?
Management Approach
LSC to continue reviewing and
improving its operational manual
especially on the possible effect
to marine biodiversity in the
conduct of its operations.
Employees, Management,
LSC
Periodic review of its operational manual
and ensure that compliance with
government rules and emerging global
standards in protecting marine
biodiversity are being practiced by the
company in its operations.
ENVIRONMENTAL IMPACT MANAGEMENT
Air Emissions
GHG
Disclosure Quantity Units
Direct (Scope 1) GHG Emissions No data available Tonnes CO2e
Energy indirect (Scope 2) GHG Emissions No data available Tonnes CO2e
Emissions of ozone-depleting substances (ODS) No data available Tonnes
Air pollutants
Disclosure Quantity Units
NOx Not applicable kg
SOx Not applicable kg
Persistent organic pollutants (POPs) No data available kg
Volatile organic compounds (VOCs) No data available kg
Hazardous air pollutants (HAPs) No data available kg
Particulate matter (PM) No data available kg
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Impact Which stakeholders are
affected?
Management Approach
Air emissions from its
transportation operations
contributes to air pollution.
Community,
Government,
Management
LSC to continuously train and educate
its directors, officers, and employees
on reduction of GHG emissions by
participating in seminars and trainings
by the SEC, DENR, and other
accredited training institutions.
Thereafter, LSC will initiate efforts to
utilize and transition to a more
sustainable way of doing business by
reducing its GHG emissions and through
conscious and smart energy
consumption.
Risks Which stakeholders are
affected?
Higher air emissions contribute to
higher carbon emissions of the
company
Community, LSC,
Government,
Opportunities Which stakeholders are
affected?
LSC to continuously implement
reduction of energy consumption
and improvement of energy
utilization in areas of its
operations.
SOLID AND HAZARDOUS WASTES Solid Waste
Disclosure Quantity Units
Total solid waste generated1 2,333 kg
Reusable No data available kg
Recyclable No data available kg
Composted No data available kg
Incinerated No data available kg
Residuals/Landfilled No data available kg 1 In 2019, LSC has not implemented yet a mechanism to determine what amount of its wastes are being
incinerated nor composted. Data of non-hazardous waste is also not available which LSC sourced out from a local
garbage collector.
Hazardous Waste
Disclosure Quantity Units
Total weight of hazardous waste generated 50.02 Tons
Total weight of hazardous waste transported 50.02 Tons
Impact Which stakeholders are
affected?
Management Approach
LSC, in its office premises and as Employees, Community, LSC Management to consider
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well as in its operations facility
produce solid waste materials.
LSC contracting or sourcing disposal
facility that recycles its waste
generated from its premises.
HSES Team of the company will
monitor and implement the
management of waste disposal of the
organization, including its branch
offices and agencies
Risks Which stakeholders are
affected?
Improper waste disposal and poor
solid waste management system
may contribute to flooding and
may cause negative effects on
health of the people within the
community where it operates
Employees, Community,
LSC
Opportunities Which stakeholders are
affected?
Management Approach
LSC to start promoting use of
recyclable materials and containers
as well as promoting circular way
of living instead of linear within the
organization
Employees, Management,
Community
HSES Team of the company will educate
its employees (shore and sea based),
service providers, and stakeholders on
3R’s (Reduce, Reuse, Recycle)
ENVIRONMENTAL COMPLIANCE Non-compliance with Environmental Laws and Regulations
Disclosure Quantity Units
Total amount of monetary fines for non-compliance with environmental laws and/or regulations
0 PhP
No. of non-monetary sanctions for non-compliance with environmental laws and/or regulations
0 #
No. of cases resolved through dispute resolution mechanism 0 #
Impact Which stakeholders are
affected?
Management Approach
Compliance with environmental
regulations are of paramount
interest of the company
considering the nature of its
operation.
Employees, Management,
Partners, LSC,
Government
LSC, through its Compliance team, shall
ensure that the management is adept
with current environmental regulations
and ensure that the same are being
complied with.
Risks Which stakeholders are
affected?
Non-compliance to environmental
laws and regulations may result to
Management, LSC,
Stockholders,
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additional expenses to the
company
Government, Community
Opportunities Which stakeholders are
affected?
Management Approach
LSC’s awareness on current
environmental policies will result to
a better governance system and at
the same time benefitting the
environment and the community
where it operates.
Employees, Management,
Partners, LSC,
Government
LSC to continuously train and educate its
directors, officers, and employees on
current environmental regulations,
particularly those involved in operations
within a certain local government.
Climate-related risks and opportunities2
Governance and Strategy
As LSC begins to understand the materiality of assessing its climate-related risks and
opportunities in its governance, and such assessment’s contribution to the overall economic
performance of the company, the organization is committed in the integration of these kinds of
risks and opportunities in its financial objective for year 2020 and onwards. The management of
LSC has also begun conceptualizing a framework that can address climate-related risks and
opportunities and will work with the Board Risk Oversight Committee (BROC) to include these
kinds of risks in its assessment and report to its Governing Board for management’s appropriate
actions.
Risk Management
As the management of LSC is in transition from its current risk assessment strategies to the
integration of climate-related risks in its decision-making and financial projections, the
management currently deals with these kinds of risks on a case-to-case basis in the same way
that management assesses some of the other newly-identified risks surrounding the operations
of LSC. This method will then be replaced with a more systematic risk management approach
once all the surrounding factors are identified and assessed.
2 Adopted from the Recommendations of the Task Force on Climate-Related Financial Disclosures. The TCFD Recommendations apply to non-financial companies and financial-sector organizations, including banks, insurance companies, asset managers and asset owners.
22
Metrics and Targets
As LSC has no current formal climated-related risk management system, the current enterprise
risk management program of the company will govern in the interim such that any identified
climate-related risk will be evaluated by the BROC and Chief Risk Officer on a per case basis in
order to recommend proper management action to the Board.
SOCIAL EMPLOYEE MANGEMENT
Impact Management Approach
The impact that the management, staff, crew and
workforce have on the sustainability of LSC cannot
be measured:
Many of the Company’s management team have
been key pillars in the growth of the Company.
The Management is transforming its people
strategy to be more performance based to
motivate good team members to be aligned
with company goals.
The human resource transformation strategy
includes very targeted leadership and skills
development and training, with transparent
succession plans to motivate our people.
Risks Management Approach
Like any other entity, LSC faces the risk of its people
getting pirated by other competing businesses that
could lead to loss of key personnel.
LSC has for the most part observed the best
practices in retention of employees as well as
providing them adequate benefits that are not
only monetary to make them feel that they are
vital part of the organization.
LSC to continuously adapt to the changes in
working arrangement of employees without
prejudice on delivering quality performance
and to promote work-life balance among its
employees
Opportunities Management Approach
TARGET ACTIONS METRICS
Performance Management System
Establish Annual Operating Plans clearly outlining Key Strategic Initiatives and deliverables.
KPIs
23
Employee data and Benefits
Learning and Development
Digital Learning System to manage individual learning programs
Retention Programs Establish Career Development Programs
100% of top performers
Compensation, Benefits and Wellness
Periodic review to ensure that we provide competitive compensation package.
Once a year review
Labor Relations Adherence to Labor Laws and constant engagement with employees
Zero labor case
Digitalization of the Workplace and WFH
Microsoft 365 Teams and Sharepoint
To provide the virtual workplace
All employees trained
Occupational Health and Safety
Corporate Doctor and Tracking of Health
Continuous training in the Ten Life Saving Rules
Training of Shipboard and truckers on health and safety
Family Management and Leadership Program
To develop the capacity of the workforce how to manage the home so that women can play a more dynamic role in management
Employee engagement and Communications
Internal communication programs to keep employees and the workforce engaged
Loans and Assistance The Company is part of an employee cooperative that makes loans available at reasonable rates.
Emergency Preparedness
Data Privacy
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Total number of employees3
a. Number of female employees 43 #
b. Number of male employees 56 #
Attrition rate4 rate
Ratio of lowest paid employee against minimum wage ratio
List of Benefits Y/N % of female employees who availed for the year
% of male employees who availed for the year
SSS Y 100% 100%
PhilHealth Y 100% 100%
Pag-ibig Y 100% 100%
Parental leaves Y
Vacation leaves Y 100% 100%
Sick leaves Y 100% 100%
Medical benefits (aside from PhilHealth))
Y
Housing assistance (aside from Pag-ibig)
N
Retirement fund (aside from SSS) N
Further education support N
Company stock options N Not Applicable Not Applicable
Telecommuting Y
Flexible-working Hours Y 100% 100%
(Others) - - -
Employee Training and Development
Disclosure Quantity Units
Total training hours provided to employees
a. Female employees hours
b. Male employees hours
Average training hours provided to employees
a. Female employees hours/employee
b. Male employees hours/employee
Labor-Management Relations
Disclosure Units
% of employees covered with Collective Bargaining Agreements
10% - Land-based 95% - Sea-based
Number of consultations conducted with employees concerning employee-related policies
LSC’s performance appraisal are being done two times a month (mid-year and
3 Employees are individuals who are in an employment relationship with the organization, according to national law or its application (GRI
Standards 2016 Glossary) 4 Attrition are = (no. of new hires – no. of turnover)/(average of total no. of employees of previous year and total no. of employees of current year)
25
end-year).
Management regularly conducts a General Assembly quarterly, and sometimes, as often as necessary, especially during times of crisis.
Diversity and Equal Opportunity
Disclosure Quantity Percentage
% of female workers in the workforce 45 48%
% of male workers in the workforce 49 52%
Number of employees from indigenous communities and/or vulnerable sector*
0
*Vulnerable sector includes, elderly, persons with disabilities, vulnerable women, refugees, migrants,
internally displaced persons, people living with HIV and other diseases, solo parents, and the poor or the
base of the pyramid (BOP; Class D and E).
Workplace Conditions, Labor Standards, and Human Rights
Occupational Health and Safety
Disclosure Quantity Units
Safe Man-Hours Sea-based: 1,178,280 Shore-based: 212,460
Man-hours
No. of work-related injuries Sea-based: 1 Shore-based: 0
#
No. of work-related fatalities Sea-based: 0 Shore-based: 0
#
No. of work related ill-health Sea-based: 0 Shore-based: 0
#
No. of safety drills Sea-based: 240 Shore-based: 5
#
Labor Laws and Human Rights
Disclosure Quantity Units
No. of legal actions or employee grievances involving forced or child labor
0 #
26
Do you have policies that explicitly disallows violations of labor laws and human rights (e.g. harassment,
bullying) in the workplace?
Topic Y/N If Yes, cite reference in the company policy
Forced labor1 Y The Code of Business Conduct and Ethics of the company provides the company’s value-driven policy and approach in addressing these concerns. For reference, you may see the policy as uploaded in the company’s website:
https://www.lorenzoshipping.com/en/PDF/LSC_May2019_Updates/LEGAL/LSC_Code_of_Business_Conduct_and_Ethics.pdf
Child labor1 Y
Human Rights2 Y
Relationship with Community
Significant Impacts on Local Communities
Operations with significant (positive or negative) impacts on local communities (exclude CSR projects; this has to be business operations)
Location Vulnerable groups (if applicable)*
Does the particular operation have impacts on indigenous people (Y/N)?
Collective or individual rights that have been identified that or particular concern for the community
Mitigating measures (if negative) or enhancement measures (if positive)
LSC employs local residents in its various locations without regard to the age, gender or marital status of the applicants
Nationwide PWDs, Elderly, Solo Parents
N Equal opportunity for employment
Homer Foundation
Children’s Chorale young talented children selected from very poor families in the community
Donation of food products/goods from claims to
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the local communities
Donation of used containers to cultural and indigenous communities
*Vulnerable sector includes children and youth, elderly, persons with disabilities, vulnerable women,
refugees, migrants, internally displaced persons, people living with HIV and other diseases, solo parents,
and the poor or the base of the pyramid (BOP; Class D and E)
For operations that are affecting IPs, indicate the total number of Free and Prior Informed Consent
(FPIC) undergoing consultations and Certification Preconditions (CPs) secured and still operational and
provide a copy or link to the certificates if available: N/A
Certificates Quantity Units
FPIC process is still undergoing N/A #
CP secured N/A #
UN SUSTAINABLE DEVELOPMENT GOALS
Product or Service Contribution to UN SDGs Key products and services and its contribution to sustainable development.
Key Products and Services
Societal Value / Contribution to UN SDGs
Potential Negative Impact of Contribution
Management Approach to Negative Impact
Port-to-Port and Door-to-Door Solutions
Through its operations, LSC provides access and solutions to businesses and individuals in fulfilling their transportation needs nationwide. It provides equal opportunity employment in the locations that it operates in.
The GHG emissions from sea transportation operations may potentially have a negative impact on the environment.
The Company holds itself accountable continues to monitor any potential negative impact of its operations to the environment. As a mitigating action, the Company ensures collaboration with national and local government agencies and units that are in charge of the protection of the environment, seeks any recommendations they
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may have and secures the necessary permits and licenses from them.
SEC Form 17-LC (H1 2020)
1
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-LC
(COVID 19)
NOTIFICATION OF INABILITY TO FILE
SEC FORM 17-A OR 17-Q
Check One:
Form 17-A [ X ] Form 17-Q [ ]
Period-Ended Date of required filing..............................................June 30, 2020
Date of this report...................................................June 29, 2020
Nothing in this Form shall be construed to imply that the Commission has verified any information
contained herein.
If this notification relates to a portion or portions of the filing checked above, identify the item(s) to which
the notification relates:.................................................................................................
1. SEC Identification Number ................48909 2. BIR Tax Identification No. ..........000-628-958-000
3. LORENZO SHIPPING CORPORATION
Exact name of issuer as specified in its charter
4. PHILIPPINES
Province, country or other jurisdiction of incorporation
5. Industry Classification Code: (SEC Use Only)
6. 20th Floor, Times Plaza Building, United Nations Avenue, Ermita, Manila 1000
Address of principal office Postal Code
7. (632) 8567-2180
Issuer’s telephone number, including area code
8. ................................................................................................................................................
Former name, former address, and former fiscal year, if changed since last report.
9. Are any of the issuer’s securities listed on a Stock Exchange?
Yes [ X ] No [ ]
If yes, disclose the name of such Stock Exchange and the class of securities listed therein:
Philippine Stock Exchange Common Stock
554,642,251
SEC Form 17-LC (H1 2020)
2
Part I - Representations
If the subject report could not be filed due to COVID19 and the issuer seeks relief pursuant to SRC Rule
17-1, the following should be completed. (Check box if appropriate)
(a) The operation of the Company is [ √ ] Domestic Only [ ] Domestic and Foreign.
(b) The subject annual report on SEC Form 17-A [ √ ], and/or the subject quarterly report
on SEC Form 17-Q [ ], will be filed within the period prescribed in SEC MC 5, series of 2020 or in
any amendment thereto.
Part II - Other Information
(a) Name, address and telephone number, including area code, and position/title of person to contact in
regard to this notification
AGNES N. DOMINGO
Chief Financial Officer
20th Floor Times Plaza Bldg.
United Nations Avenue, Ermita, Manila
Telephone Number: +632 8527.5555
Fax Number: n/a
(b) Have all other periodic reports required under Section 17 of the Code and under Sections 26 and 141
of the Corporation Code of the Philippines during the preceding 12 months, or for such shorter period that
the issuer was required to file such report(s), been filed? If the answer is no, identify the report(s).
Yes [ X ] No [] Reports:
(c) The indicative date the company would convene the Annual Stockholders’ Meeting: 08
September 2020. Please provide reason if company could not provide an indicative date.
SIGNATURE
Pursuant to the requirements of the SRC Rule 17-1, the issuer has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
LORENZO SHIPPING CORPORATION
Registrant's full name as contained in charter
REYNOLD JOHN B. MADAMBA
President
Date 29 June 2020