SUPPLEMENTARY SCHEDULES · Corporation 27,494 213,556 Non-interest bearing and to be settled within one year Operational advances Interest income Filinvest Land, Inc. Share in expenses

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FILINVEST DEVELOPMENT CORPORATIONINDEX TO CONSOLIDATED FINANCIAL STATEMENTSAND SUPPLEMENTARY SCHEDULES

SUPPLEMENTARY SCHEDULES

Independent Auditor’s Report on Supplementary Schedules

Group Supplementary Information and Disclosures Required on SRC Rule 68 and 68.1, as Amended (2011)

Schedule of All Effective Standards and Interpretations under PFRS as of December 31, 2016

Group Unappropriated Retained Earnings Available for Dividend Distribution

Financial Soundness Indicators

Group Structure

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INDEPENDENT AUDITORS’ REPORTON SUPPLEMENTARY SCHEDULES

The Stockholders and the Board of DirectorsFilinvest Development CorporationThe Beaufort, 5th Avenue corner 23rd StreetBonifacio Global City, Taguig City

We have audited in accordance with Philippine Standards on Auditing, the consolidated financialstatements of Filinvest Development Corporation (FDC or the Parent Company) and its subsidiaries(collectively referred to as “the Group”) as at December 31, 2016 and 2015 and for each of the threeyears in the period ended December 31, 2016 included in this SEC Form17-A and have issued ourreport thereon dated February 22, 2017. Our audits were made for the purpose of forming an opinionon the basic consolidated financial statements taken as a whole. The schedules listed in the Index toConsolidated Financial Statements and Supplementary Schedules are the responsibility of the Group’smanagement. These schedules are presented for purposes of complying with the Securities RegulationCode Rule 68, as Amended (2011), and are not part of the basic consolidated financial statements.These schedules have been subjected to the auditing procedures applied in the audit of the basicconsolidated financial statements and, in our opinion, fairly state in all material respects, the financialdata required to be set forth therein in relation to the basic consolidated financial statements taken as awhole.

SYCIP GORRES VELAYO & CO.

Dhonabee B. SeñeresPartnerCPA Certificate No. 97133SEC Accreditation No. 1196-AR-1 (Group A), June 30, 2015, valid until June 29, 2018Tax Identification No. 201-959-816BIR Accreditation No. 08-001998-98-2015, January 5, 2015, valid until January 4, 2018PTR No. 5908762, January 3, 2017, Makati City

February 22, 2017

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph

BOA/PRC Reg. No. 0001, December 14, 2015, valid until December 31, 2018SEC Accreditation No. 0012-FR-4 (Group A), November 10, 2015, valid until November 9, 2018

A member firm of Ernst & Young Global Limited

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FILINVEST DEVELOPMENT CORPORATION AND SUBSIDIARIESSUPPLEMENTARY INFORMATION AND DISCLOSURES REQUIREDON SRC RULE 68 AND 68.1 AS AMENDEDDECEMBER 31, 2016

Philippine Securities and Exchange Commission (SEC) issued the amended Securities RegulationCode Rule SRC Rule 68 and 68.1 which consolidates the two separate rules and labeled in theamendment as “Part I” and “Part II”, respectively. It also prescribes the additional information andschedule requirements for issuers of securities to the public.

Below are the additional information and schedules required by SRC Rule 68 and 68.1 as amendedthat are relevant to the Group. This information is presented for purposes of filing with the SEC and isnot required part of the basic financial statements.

Schedule A. Financial Assets in Equity SecuritiesBelow is the schedule of financial assets in equity securities of the Group as of December 31, 2016:

Name of Issuing entity and associationof each issue

Number ofShares/Principal

Amount ofBonds and Notes

Amount Shownin the Statement

of Financial Position

Value Basedon Market

Quotation atend of year

IncomeReceived and

Accrued(In Thousands)

Financial assets at FVTPLDebt securities

SM Investment Corp 2,262,707 P=2,336,235 P=2,336,235 P=84,797Security Bank Corporation 692,053 719,756 719,756 27,615PSALM 562,880 641,957 641,957 36,882Energy Development Corporation 536,976 594,744 594,744 18,066Rizal Banking Corporation 407,306 437,284 437,284 21,710Republic of the Philippines 296,804 294,568 294,568 101,101Rizal Commercial Banking Corporation 149,160 155,270 155,270 19,190First Pacific Company Limited 15,513 16,709 16,709 4,760Ayala Corporation 2,200 2,153 2,153 39Manila Electric Company 500 490 490 19Ayala Lands, Inc. 430 431 431 1,475Bureau of Treasury 423 414 414 11SM Prime Holdings, Inc. 150 150 150 58Republic of Indonesia − − − 12,582US Treasury Notes − − − 9,724State of Qatar − − − 4,609Pertamina (Pertij) − − − 2,641Petron Corp − − − 13Development Bank of the Philippines − − − 1,761State Bank of India − − − 1,696Banco De Oro − − − 53National Power Corporation − − − 6

ROP warrantsCitibank Manila 2,378 33,934 33,934 −Credit Suisse 3,643 23,212 23,212 −

5,257,307 5,257,307 348,808Equity Securities: LGU Guarantee Corporation 50 10,213 10,213 −

Victoria Milling Corporation 50 230 230 −10,443 10,443 −

P=5,267,750 P=5,267,750 P=348,808

(Forward)

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Name of Issuing entity and associationof each issue

Number ofShares/Principal

Amount ofBonds and Notes

Amount Shownin the Statement

of Financial Position

Value Basedon Market

Quotation atend of year

IncomeReceived and

Accrued(In Thousands)

Financial assets at FVTOCIQuoted:

The Palms Country Club 160 P=126,337 P=126,337 P=−Manila Golf 2 84,000 84,000 −Manila Polo Club 1 13,300 13,300 −Sta Elena Properties Inc. 2 6,400 6,400 −Cebu Country Club 1 6,065 6,065 −Alabang Country Club 2,000 2,200 2,200 −Manila Electric Company 156,000 1,557 1,557 −PLDT 46,100 914 914 −Roxas Holdings, Inc. 914,290 498 498 −Valle Verde 1 340 340 −Empire East Land Holdings, Inc. 3 3 3 −

241,614 241,614 −Unquoted: The Palms Country Club 2,486 148,683 148,683 −

H.B. Fuller 1,903,767 15,500 15,500 −Manila Electric Company (MERALCO) 1,153,694 6,198 6,198 −Riviera Golf 1 4,500 4,500 −Kewalram Realty, Inc. 1,500 150 150 −KRL Land, Inc. 1,500 150 150 −Pacesetter Homes Dev’t Corp. 1 25 25 −Discovery Homes Realty 1 25 25 −Pilipino Telephone Corp. 1,800 8 8 −Others − 4,872 4,872 −

180,111 180,111 −P=421,725 P=421,725 P=−

Investment Securities at Amortized CostUS Treasury Notes 1,491,600 P=1,411,555 P=1,366,679 P=3,688Republic of the Philippines 1,170,531 1,121,014 1,160,550 28,289Power Sector Asset and Liabilities

Management (PSALM) 1,137,625 1,384,863 1,355,641 24,331NTPC India Limited 894,960 891,333 895,676 30,171Republic of Indonesia 745,800 731,847 769,828 48,014Bank of China 517,583 517,014 516,525 19,590China National Offshore Oil

Corporation (CNOOC) 497,200 494,626 501,486 16,494Credit Suisse 497,200 473,216 485,809 16,613ICICI Bank 497,200 496,116 490,023 14,536State Bank of Qatar 497,200 492,290 480,574 9,298Union Bank of Switzerland (UBS) 497,200 496,359 504,409 16,159Verizon Communication Inc. 497,200 519,186 517,794 15,022Pertamina Persero (PERTIJ) 482,284 470,009 482,467 31,161Bharti Airtel International 298,320 325,020 311,703 5,333Bharat Petroleum Corp Ltd. 248,600 248,183 243,854 12,829Mexican Global Bonds 248,600 249,632 247,357 8,842State Bank of India 248,600 267,150 263,407 8,513Bank of America Corp. 149,160 151,357 151,168 4,649JP Morgan Chase Bank 149,160 154,547 153,333 4,415Power Grid Corp. of India 125,792 131,654 126,194 1,880Philippine Power Trust I 103,512 102,538 102,477 7,744National Power Corporation − − − 105,646Perusahan Gas Negara − − − 17,604

P=11,129,509 P=11,126,954 P=450,821

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Schedule B. Amounts Receivable from Directors, Officers, Employees, Related Partiesand Principal Stockholders (other than related parties)

The Group has no advances to employees with balances above P=100,000 as of December 31, 2016.

This excludes all the amounts receivable from such persons for purchases subject to usual terms, forordinary travel and expense advances and for other such items arising in the ordinary course ofbusiness.

Schedule C. Amounts Receivable from Related Parties which are Eliminated Duringthe Consolidation of Financial Statements

Below is the schedule of receivables (payables) with related parties which are eliminated in theconsolidated financial statements as of December 31, 2016 (amounts in thousands):

Volume of Transactions Receivable Terms

FDC Forex CorporationDividend incomeShare in expenses 149,032 1,830,411

Non-interest bearingand to be settledwithin one year

Filinvest Alabang, Inc.

Share in expensesManagement feeDividend income 698,546 799,980

Non-interest bearingand to be settled

within one year exceptfor sale of lots*

FDC Utilities, Inc.Share in expensesOperational advances 342,574 464,969


Pacific Sugar Holdings Corp. 351,772

Non-interest bearingand to be settledwithin one yearShare in expenses 118,486

FDC Misamis PowerCorporation 27,494 213,556


Operational advancesInterest income

Filinvest Land, Inc.Share in expensesDividend income 920,382 87,850


Mactan Seascapes Service, Inc. 46,092 45,822


Share in expensesRental income

Filinvest HospitalityCorporation Share in expenses 15,657 28,611


Festival Supermall, Inc. Share in expenses – 168


Filinvest Development CaymanIslands Forex gain/loss 315,251 (4,929,015)


East West Banking Corporation Share in expenses (360) (5,601,850)

Non-interest bearingand to be settled

within one year exceptfor loan**

2,633,154 (6,707,726) *Interest-bearing receivable from sale of lots to FAI that is due within six years. ** Interest-bearing loan with interest rate per annum equivalent to 4.059% Fixed (inclusive of GRT) payable semi-annually. Principal is due on March 31, 2020.

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Balance atbeginningof period

Additions/Reclassifications

Collections/Reclassification

Balance atend of period

FDC Forex Corporation 1,831,127 149,032 (149,748) 1,830,411Filinvest Alabang, Inc. 254,955 698,546 (153,521) 799,980FDC Utilities, Inc. 142,644 342,574 (20,249) 464,969Pacific Sugar Holdings, Corp. 951,772 118,486 (718,486) 351,772FDC Misamis Power Corporation 289,153 27,494 (103,091) 213,556Filinvest Land, Inc. 96,508 920,382 (929,040) 87,850Mactan Seascapes Services, Inc. 139,975 112,677 (206,830) 45,822Filinvest Hospitality Corporation 4,412 220,686 (196,487) 28,611Festival Supermall, Inc. 168 – – 168Filinvest Development Cayman Islands (5,280,266) 351,251 – (4,929,015)East West Banking Corporation (5,601,490) – (360) (5,601,850)

(7,171,042) 2,941,128 (2,477,812) (6,707,726)

The intercompany transactions between FDC and the subsidiaries pertain to share in expenses, rentalcharges and management fee. There were no amounts written off during the year and all amounts areexpected to be settled within the year except for; (a) FAI, which is inclusive of receivables from saleof lots that are due within nine years, with interest of 90-day PDS-Treasury Reference Rate 2 (PDST-R2) plus 1% spread, subject to quarterly repricing; and (b) EWBC, which pertains to interest-bearingloans with interest rate per annum equivalent to 4.059% fixed (inclusive of GRT) payable semi-annually. Principal is due on March 31, 2020.

Related Party TransactionsDue from related partiesBelow is the list of outstanding receivables from related parties of the Group presented in theconsolidated statements of financial position as of December 31, 2016 (amount in thousands):

Relationship NatureBalance at

end of periodChroma Hospitality, Inc. Joint Venture A, C P=4,660A.L. Gotianun, Inc. Parent Company A 2,065The Palms Country Club Affiliate A 638Andrew Gotianun Foundation Affliate A 161Others Affiliate A 6,213

P=13,737

Nature of intercompany transactions

The nature of the intercompany transactions with the related parties is described below:

(a) Expenses – these pertain to the share of the Group’s related parties in various common sellingand marketing and general and administrative expenses.

(b) Advances – these pertain to temporary advances to/from related parties for working capitalrequirements

(c) Management fee

The outstanding balances of intercompany transactions are due and demandable as of December 31,2016.

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Schedule D. Intangible AssetsAs of December 31, 2016, the Group’s intangible assets consist of goodwill and other intangibleassets. Intangible assets in the Group’s consolidated statements of financial position follow (amountsin thousands):

Balance atbeginningof period Additions

Charged tocost and

expensesBalance at

end of periodGoodwill:

PSHC P=10,083,310 P=– P=− P=10,083,310SCB Philippines’ retail banking

business, PSPI and ASIA – 2,424,205 – 2,424,205GBI 373,996 – – 373,996CPI 326,553 – – 326,553East West Rural Bank 23,478 – – 23,478Other bank acquisitions 919,254 – – 919,254

P=11,726,591 P=2,424,205 P=− P=14,150,796

IPP Administrator rights P=8,255,117 P=– (P=1,141,675) P=7,113,442Other assets:

Branch license P=2,167,600 P=– P=– P=2,167,600BTO rights 1,452,184 409,388 (14,824) 1,846,748Capitalized software 831,707 259,319 (170,351) 920,675Customer relationship 125,165 − (4,311) 120,854Core deposits 12,805 − (4,043) 8,762

P=4,589,461 P=668,707 (P=193,529) P=5,064,639

Schedule E. Long-term DebtBelow is the schedule of long-term debt of the Group:

Amount Current Noncurrent(In Thousands)

Parent Company LoansUnsecured fixed-rate 10-year bonds due in 2024 with aggregate principal

amount of P=8,800.0 million issued on January 24, 2014 with interest rateof 6.1% per annum, payable quarterly in arrears. P=8,735,408 P=– P=8,735,408

Unsecured fixed-rate 5-year loan obtained in October 2015 with interestrate of 4.5% per annum (inclusive of GRT) payable quarterly in arrears. 2,958,555 – 2,958,555

Unsecured fixed-rate 5-year loan obtained in April 2016 with interest rateof 4.3% per annum (inclusive of GRT) payable quarterly in arrears. 1,493,527 – 1,493,527

Unsecured fixed-rate 5-year loan obtained in October 2015 with interestrate of 4.7% per annum (inclusive of GRT) payable quarterly in arears. 996,141 – 996,141

Unsecured fixed-rate 5-year loan obtained in June 2016 with interest rateof 4.5% per annum (inclusive of GRT) payable quarterly in arrears. 995,453 – 995,453

Unsecured fixed-rate 5-year loan obtained in September 2016 with interestrate of 4.3% per annum (inclusive of GRT) payable quarterly in arrears. 796,240 – 796,240

15,975,324 – 15,975,324Subsidiaries’ LoansEWBCLower tier-2 unsecured subordinated notes due January 4, 2025. Interest rate is at 5.5% per annum. 4,969,460 – 4,969,460

(Forward)

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FLIFixed-rate bonds with aggregate principal amount of P=8.0 billion issued

on August 20, 2015. This is comprised of P=7.0 billion, 7-year fixed-rate bonds due in 2022 with interest rate of 5.4% per annum, andP=1.0 billion, 10-year fixed-rate bonds due in 2025 with interest rate of5.7% per annum. P=7,927,775 P= P=7,927,775

Fixed-rate 7-year bonds with principal amount of P=7.0 billion issued on June 8,2012 with interest rate of 6.3% per annum, payable quarterly in arrears. 6,967,401 – 6,967,401

Fixed-rate bonds with aggregate principal amount of P=7.0 billion issuedon November 8, 2013. This is comprised of P=4.3 billion 7-year bondsdue in 2020 with interest rate of 4.9% per annum, and P=2.7 billion 10-year bonds due in 2023 with interest rate of 5.4% per annum. 6,954,086 – 6,954,086

Fixed-rate bonds with aggregate principal amount of P=7.0 billion issued onDecember 4, 2014. This is comprised of P=5.3 billion, 7-year bondsdue in 2021 with interest rate of 5.4% per annum, and P=1.70 billion,10-year bonds due in 2024 with interest rate of 5.6% per annum. 6,946,789 – 6,946,789

Unsecured loan obtained in July 2013 with interest rate equal to PDS TreasuryFixing (PDST-F) plus 1% per annum plus GRT five years (fixed rate)5.1%, payable quarterly in arrears. The principal is payable at maturity inJuly 2018. 1,497,945 – 1,497,945

Unsecured loan obtained in October 2016 with interest rate equal to PDST-R2of 4.2% per annum (fixed for 7 years), payable quarterly in arrears. Thefifty percent (50%) of principal is payable in twenty (20) equal quarterlyamortizations to commence on January 2019 and fifty percent (50%) ispayable at maturity in October 2023. 1,294,058 – 1,294,058

Unsecured loan obtained in February 2015 with interest rate equal to 4.5% perannum, payable quarterly in arrears. The principal is payable at maturityin February 2020. 996,784 – 996,784

Unsecured loan obtained in May 2016 with interest rate equal to BSPovernight reverse repurchased agreement plus 1% per annum (fixed rate of4.5% per annum), payable quarterly in arrears. The principal is payable atmaturity in May 2021. 995,580 – 995,580

Unsecured loan obtained in June 2016 with interest rate equal to PDST-F of4.1% per annum (fixed for 5 years), payable quarterly in arrears. Theprincipal is payable at maturity in June 2021. 995,495 – 995,495

Unsecured loan obtained in October 2016 with interest rate equal to 4.3% perannum inclusive of GRT (fixed for 5 years), payable quarterly in arrears.The principal is payable at maturity on October 2021. 995,212 – 995,212

Unsecured loan obtained in February 2015 with interest rate equal toPDST-F of 5.0% per annum (fixed for 5 years), payable quarterly inarrears. The principal is payable in annual amortizations for 5 years andthe 20% of principal is payable in 4 equal quarterly amortizations tocommence on February 2016, and 80% is payable at maturity on February2020. 946,944 49,162 897,782

Unsecured loan obtained in August 2013 with interest rate equal to PDST-Fplus 1% per annum GRT five years (fixed rate) 4.46%, payable quarterlyin arrears. The 50% of principal is payable in twenty (20) equal quarterlyinstallments starting November 2015 up to May 2020 and the remaining50% balance is payable in August 2020. 872,720 98,356 774,364

Unsecured loan obtained in April 2015 with interest rate equal to 91-dayPDST-F rate plus a spread of up to 1% per annum, payable quarterly inarrears. The principal is payable in twelve (12) equal quarterlyinstallments starting July 2017 to January 2020. 800,000 133,333 666,667

Unsecured loan obtained in September 2016 with interest rate equal to PDST-R2 of 4.1% per annum (fixed for 5 years), payable quarterly in arrears.The 50% of principal is payable in 11 equal quarterly amortizations tocommence on December 2018 and 50% is payable at maturity onSeptember 2021. 796,255 – 796,255

(Forward)

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Unsecured loan obtained in October 2016 with interest rate equal to4.3% per annum inclusive of GRT (fixed for 7 years), payable quarterlyin arrears. The 50% of principal is payable in 20 equal quarterlyamortizations to commence in January 2019 and 50% is payable atmaturity in October 2023. P=696,810 P=– P=696,810

Unsecured loan obtained in July 2014 with interest rate equal toPDST-F plus 1% per annum (fixed rate) 4.3% per annum, payablequarterly in arrears. The 50% of principal is payable in 20 equalquarterly amortizations to commence in October 2016 and 50% ispayable at maturity in July 2021. 682,500 70,000 612,500

Unsecured loan obtained in December 2013 with interest rate equal to PDST-F plus 1% per annum (fixed rate of 4.6% per annum), payable quarterly inarrears. The 50% of principal is payable in 20 equal quarterlyamortizations to commence in December 2015 and 50% is payable atmaturity in December 2020. 612,500 70,000 542,500

Unsecured loan obtained in September 2015 with interest rate equal toPDST-F 1 (fixed rate) 4.9%, payable quarterly in arrears. The principalis payable at maturity in September 2020. 600,000 – 600,000

Unsecured loan obtained in July 2014 with interest rate equal to PDST-F plus1% per annum (fixed rate) 4.9% per annum, payable quarterly in arrears.The 50% of principal is payable in 20 equal quarterly amortizations tocommence in October 2016 and 50% is payable at maturity in July 2021. 585,000 60,000 525,000

Unsecured loan obtained in June 2013 with a fixed interest rate of 5.0%per annum inclusive of GRT, payable quarterly in arrears. The principalis payable in twelve (12) equal quarterly installments starting September2015 up to June 2018. 573,519 382,431 191,088

Unsecured loan obtained in September 2015 with interest rate equal to4.7% per annum, payable over a 5-year period inclusive of 2-yeargrace period. The 50% of principal balance is payable in 12 equalquarterly amortization to commence in September 2017 and 50% ispayable at maturity in September 2020. 500,000 20,833 479,167

Unsecured loan obtained in May 2015 with interest rate equal to 4.8%per annum, payable quarterly in arrears. The principal is payableover a 5-year period, inclusive of 2-year grace period. The 50% of

principal payable in 12 equal quarterly amortization to commence inMay 2017and 50% is payable at maturity in May 2020. 500,000 41,667 458,333

Unsecured loan obtained in December 2016 with interest rate equal to5.5% per annum (fixed rate for 7 years), payable quarterly in arrears. The50% of principal is payable in 14 equal quarterly amortization tocommence in March 2020 and 50% is payable at maturity in December2023 500,000 – 500,000

Unsecured loan obtained in November 2014 with interest rate equal toPDST-F plus 1% per annum (fixed rate) 4.8% per annum, payablequarterly in arrears. The principal is payable upon maturity inNovember 2019. 500,000 – 500,000

Unsecured loan obtained in June 2016 with interest rate equal toPDST-R2 of 4.1% per annum (fixed for 5 years), payable quarterly inarrears. The 50% of principal is payable in 12 equal installmentsstarting September 2018 and the remaining 50% balance is payable inJune 2021. 500,000 – 500,000

Unsecured loan obtained in June 2016 with interest at 3% per annum,payable monthly in arrears. The principal is payable upon maturityin August 2017. 499,920 499,920 –

Unsecured loan obtained in September 2015 with interest rate equal to4.5% per annum, payable quarterly in arrears. The principal ispayable over a 5-year period inclusive of 2-year grace period; 50%of principal is payable in 12 equal quarterly amortization tocommence in July 2017 and 50% is payable at maturity inApril 2020. 498,440 41,216 457,224

(Forward)

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Unsecured loan obtained in November 2016 with interest rate equal to5.3% per annum for the first 2 years and 5.5% per annum for theremaining years until maturity, payable quarterly in arrears. The50% of principal is payable in 16 equal quarterly amortization tocommence in February 2020 and 50% is payable at maturity inNovember 2023. P=497,610 P=– P=497,610

Unsecured loan obtained in December 2016 with interest rate equal to5.2% per annum (fixed for 7 years), payable quarterly in arrears.The principal is payable at maturity in December 2021. 497,510 – 497,510

Unsecured loan obtained in October 2013 with interest rate equal toPDST-F plus 1% per annum (fixed rate of 4.2% per annum), payablequarterly in arrears. The 50% of principal is payable in 20 equalquarterly amortization to commence in January 2016 and 50% ispayable at maturity in October 2020 490,930 72,054 418,876

Unsecured loan obtained in August 2013 with interest rate equal toPDST-F plus 1% per annum (fixed rate of 4.3% per annum for 5years) payable quarterly in arrears. The 50% balance of principal ispayable in 20 equal quarterly installments starting November 2015 upto May 2020 and the remaining 50% balance is payable in August2020. 437,500 50,000 387,500

Unsecured loan obtained in March 2014 with interest rate equal toPDST-F plus 1% per annum (fixed rate of 4.3% per annum), payablequarterly in arrears. The 50% of principal payable in 20 equalquarterly amortization to commence in June 2016 and 50% is payableat maturity in August 2020. 431,818 136,364 295,454

Unsecured loan obtained in August 2015 with interest rate equal to 5.4% perannum (fixed rate for 5 years). The principal is payable at maturity inAugust 2020. 430,000 – 430,000

Unsecured loan obtained in November 2016 with interest rate equal to4.8% per annum (fixed rate for 7 years), payable quarterly in arrears.The 50% of principal is payable in 16 equal quarterly amortization tocommence in February 2020 and 50% is payable at maturity inNovember 2023. 400,000 – 400,000

Unsecured loan obtained in May 2016 with interest rate equal to 4.6% perannum (fixed rate for 5 years). The 50% of principal is payable in 12 equalamortization to commence in August 2018 and 50% is payable at maturityin May 2021. 400,000 – 400,000

Unsecured loan obtained in July 2016 with interest rate equal to 4.0% perannum, payable quarterly in arrears. The 50% of principal is payable in12 equal quarterly amortization to commence in October 2018 and 50% ispayable at maturity in July 2021. 350,000 – 350,000

Unsecured loan obtained in February 2013 with interest at prevailing marketrate, payable quarterly in arrears. The principal is payable in twelve (12)equal quarterly installments starting May 2015 to February 2018. 312,218 249,786 62,432

Unsecured loan obtained in May 2015 with interest rate equal to 4.7% perannum (fixed rate for 5 years), payable quarterly in arrears. The 50% ofprincipal is payable in 12 equal quarterly amortizations to commence inAugust 2017 and 50% is payable at maturity in May 2020. 300,000 25,000 275,000

Unsecured loan obtained in January 2015 with interest rate equal to 4.5% perannum (fixed rate for 3 years), payable quarterly in arrears. The 50% ofprincipal is payable in 12 equal quarterly amortizations to commence inJanuary 2017 and 50% is payable at maturity in January 2020. 300,000 50,000 250,000

Unsecured loan obtained in May 2015 with interest rate equal to 4.5% perannum (fixed rate for 5 years), payable quarterly in arrears. The 50% ofprincipal is payable in 12 equal quarterly amortizations to commence inMay 2017 and 50% is payable at maturity in May 2020. 270,000 36,818 233,182

(Forward)

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Unsecured loan obtained in May 17, 2012 with interest at prevailing marketrate, subject to repricing and payable quarterly in arrears. The loan has aterm of 7 years, inclusive of 2-year grace period on principal repayment,50% principal balance is payable in 20 equal quarterly installments tocommence in August 2014 and 50% is payable at maturity in May 2019. P=225,000 P=30,000 P=195,000

Unsecured loan obtained in December 2016 with interest rate equal to5.5% per annum (fixed rate for 7 years), payable quarterly in arrears.The 50% of the principal is payable in 16 equal quarterly amortizationto commence in March 2020 and 50% is payable at maturity inDecember 2023. 200,000 – 200,000

Unsecured loan obtained in March 2016 with interest rate equal to5.8% per annum (fixed rate for 7 years). The 50% of principal balanceis payable in 20 equal quarterly amortization to commence in June2018 and 50% is payable at maturity in March 2023. 200,000 – 200,000

Unsecured loan obtained in December 2016 with interest rate equal to5.9% per annum, payable quarterly in arrears. The 50% of theprincipal is payable in 20 equal quarterly amortization to commencein March 2019. The remaining 50% is to be settled upon maturity inDecember 2023. 200,000 – 200,000

Unsecured loan obtained in February 2016 with interest rate equal to5.4% per annum (fixed rate for 5 years). The 50% of principal balanceis payable in 12 equal quarterly amortization to commence in May2018 and 50% is payable at maturity in February 2021. 200,000 – 200,000

Unsecured loan obtained in May 2013 with interest rate equal to BSPovernight reverse repurchase agreement plus 1% per annum (fixedrate of 4.7% per annum), payable quarterly in arrears. The principal ispayable in 12 equal quarterly installments starting August 2015 up toMay 2018. 150,000 100,000 50,000

Unsecured loan obtained in December 2016 with interest rate equal to4.9% per annum inclusive of GRT (fixed for 5 years), payablequarterly in arrears. The principal is payable at maturity inDecember 2021. 149,256 – 149,256

Unsecured loan granted in November 10, 2011 with a term of 7 yearswith 2 years grace period on principal repayment. Interest is basedon prevailing market rate, subject to quarterly repricing and payablequarterly in arrears. 50% of principal is payable in 12 quarterlyamortization commencing on February 10, 2014 and 50% is payableon maturity. 140,000 20,000 120,000

Unsecured loan obtained in June 2013 with a fixed interest rate of 5.0%per annum inclusive of GRT, payable quarterly in arrears.The principal is payable in 12 equal quarterly installments startingSeptember 2015 up to June 2018. 124,866 83,223 41,643

Unsecured loan obtained in May 2015 with interest rate equal to 4.5%per annum (fixed rate for 5 years), payable quarterly in arrears. The50% of principal payable in 12 equal quarterly amortization tocommence in May 2017 and 50% is payable at maturity in May 2020. 95,000 11,875 83,125

Unsecured loan granted in December 2012 with a term of 5 years with50% of principal payable in 20 equal quarterly amortization tocommence in March 2013 and 50% payable at maturity inDecember 2017. The loan carries interest at prevailing market rate. 90,000 90,000 –

Unsecured loan obtained in September 2016 with interest rate equal to4.0% per annum (fixed rate for 5 years). The 50% ofprincipal balance is payable in 20 equal quarterly amortization tocommence in December 2016 and 50% is payable at maturity inSeptember 2021. 75,000 – 75,000

(Forward)

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Unsecured loan obtained in August 2015 with interest rate equal to5.4% per annum (fixed rate for 5 years). The 50% of principal ispayable in 12 equal quarterly amortization to commence in November2017 and 50% is payable at maturity in August 2020. P=50,000 P=2,083 P=47,917

Unsecured loan obtained in February 2013 with interest rate equal to 91-day PDST-F rate plus a spread of up to1% per annum, payablequarterly in arrears. The principal is payable in 12 equal quarterlyinstallments starting May 2015 to February 2018 208 167 41

53,252,649 2,424,288 50,828,361FAIFixed-rate 5-year term loan granted on August 3, 2015 to mature on August 3,

2020 and interest is fixed at 5.00% per annum and is payable quarterly inarrears. 850,000 – 850,000

Fixed-rate 5-year term loan granted on September 28, 2015 to mature onSeptember 28, 2020. Fifty percent (50%) of the loan is payable in equalquarterly amortizations to commence at the end of 2-year grace periodand fifty percent (50%) is payable at maturity. 500,000 20,833 479,167

Fixed-rate 5-year term loan granted on July 28, 2016 with interest rate of 3.8%per annum, payable quarterly in arrears. Fifty percent (50%) of the loan ispayable in equal quarterly amortizations to commence at the end of the 2-year grace period and fifty percent (50%) is payable at maturity. 450,000 – 450,000

Fixed-rate 7-year term loan granted on September 5, 2013 subject to floatinginterest set every 90 days and payable in arrears. Fifty percent (50%) ofthe loan is payable in twenty equal quarterly amortizations and theremaining fifty percent (50%) is payable at maturity. 437,500 50,000 387,500

Fixed-rate 5-year term granted on June 28, 2016 with interest rate of 3.9% perannum, payable quarterly in arrears. Fifty percent (50%) of the loan ispayable in equal quarterly amortizations to commence at the end of thesecond year and fifty percent (50%) payable at maturity. 400,000 – 400,000

Fixed-rate 5-year term loan granted on February 18, 2016 with interest rate of4.6% per annum, payable quarterly in arrears. Fifty percent (50%) of theloan is payable in equal quarterly amortizations to commence at the endof the second year and fifty percent (50%) payable at maturity. 300,000 – 300,000

5-year term loan granted on July 23, 2012 subject to floating interest rate setevery 90 days payable in arrears. 250,000 250,000 –

7-year loan granted on November 10, 2011 subject to floating interest rate setevery 90 days, payable in arrears. Fifty percent (50%) of the loan ispayable in twenty (20) equal quarterly amortizations to commence at theend of the 2-year grace period and the remaining fifty percent (50%) ispayable at maturity. 210,000 30,000 180,000

Fixed-rate 5-year term loan granted on March 3, 2015 with interest rate of4.3% per annum, payable quarterly in arrears. Fifty percent (50%) of theloan is payable in equal quarterly amortizations to commence at the endof the 2-year grace period and fifty percent (50%) is payable at maturity. 200,000 33,333 166,666

Fixed-rate 5-year term loan granted on December 15, 2014 with interest rate of4.5% per annum, payable in arrears. Fifty percent (50%) of the loan ispayable in equal quarterly amortizations to commence at the end of the 2-year grace period and fifty percent (50%) is payable at maturity. 191,667 33,333 158,334

5-year term loan granted on February 12, 2013, subject to floating interest rateset every 90 days, payable in arrears. Principal is payable in twenty (20)equal quarterly installments at the end of the 2-year grace period 104,166 83,334 20,833

7-year loan granted on March 30, 2012, subject to floating interest rate setevery 90 days, payable in arrears. Fifty percent (50%) of the loan ispayable in equal quarterly amortizations to commence at the end of the 2-year grace period and fifty percent (50%) is payable at maturity. 145,000 20,000 125,000

(Forward)

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7-year term loan granted on December 27, 2011 subject to floating interest rateset every 90 days, payable in arrears. Fifty percent (50%) of the loan ispayable in equal quarterly amortizations to commence at the end of the 2-year grace period and the fifty percent(50%) is payable at maturity. P=105,000 P=15,000 P=90,000

4,143,333 535,833 3,607,500FDCUILoans granted by a local bank amounting to P=934 million,

P=1,727 million, P=1,891 million, P=1,595 million, P=1,351 million andP=483 million on September 26, 2014, December 1, 2014, March 2, 2015,June 1, 2015, September 1, 2015 and December 1, 2015, respectively. 8,960,592 – 8,960,592

Loans granted by a local bank amounting to P=643 million,P=1,190 million, P=1,303 million, P=1,099 million, P=931 million andP=332 million on September 26, 2014, December 1, 2014, March 2, 2015,June 1, 2015, September 1, 2015 and December 1, 2015, respectively. 6,172,849 – 6,172,849

Loans granted by a local bank amounting to P=2,500 million andP=1,250 million on August 12, 2015 and December 1, 2015, respectively. 4,976,870 – 4,976,870

Loans granted by a local bank amounting to P=480 million,P=720 million and P=1,200 million on March 18, 2016, July 1, 2016 andOctober 3, 2016, respectively. 2,388,296 – 2,388,296

22,498,607 – 22,498,607PSHCLoan obtained on September 28, 2016 amounting to P=600.0 million with fixed

interest rate of 4.6% per annum payable quarterly in arrears. 600,000 – 600,000Loan of P=1.0 million granted on February 12, 2013, payable in twelve (12)

quarterly amortizations to start at the end of the 9th quarter from the dateof the loan release. Interest rate is 4.5% per annum, payable quarterly inarrears. 418 333 85

600,418 333 600,085FHCTerm loan of P=1,000.0 million granted on December 27, 2016 with interest rate

of 5.5% per annum fixed for seven (7) years. The fifty (50%) is payablein 36 equal quarterly amortization to start on the 13th quarter from initialdrawdown and 50% is payable on maturity. 1,000,000 – 1,000,000

12-year term loans of P=160.0 million, P=60.0 million, P=270.0 million andP=165.0 million granted on June 28, 2016, July 21, 2016, August 24, 2016,and December 14, 2016, respectively. These loans bear interest rates of4.3% per annum (floating), 4.3% per annum (fixed for 5 years), 4.1% perannum (fixed for 5 years) and 5.5% per annum (fixed for 7 years), in thesame order as above. The fifty (50%) is payable in 36 equal quarterlyamortization to start on the 13th quarter from initial drawdown and fifty(50%) is payable on maturity. 655,000 – 655,000

12-year loans of P=180.0 million granted on December 27, 2016 with interestrate of 5.5% fixed for seven (7) years. The fifty (50%) is payable in 36equal quarterly amortization to start on the 13th quarter from initialdrawdown and fifty (50%) is payable on maturity. 180,000 – 180,000

1,835,000 – 1,835,000FDCIFixed-rate 7-year bonds with principal amount of US$286.5 million issued on

April 2, 2013 with interest rate of 4.3% per annum. 14,161,166 – 14,161,16614,161,166 – 14,161,166

P=117,435,957 P=2,960,454 P=114,475,503

Amounts are presented net of unamortized deferred costs.

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Schedule F. Indebtedness to Related PartiesDue from related partiesBelow is the list of outstanding payable to related parties of the Group presented in the consolidatedstatements of financial position as of December 31, 2016 (amount in thousands):

Relationship NatureBalance at

end of periodA.L. Gotianun, Inc. Parent Company Advance P=2,047,762Others Affiliate Expenses 16,232

P=2,063,994

Schedule G. Guarantees of Securities of Other IssuersThe Group does not have guarantees of securities of other issuers as of December 31, 2016.

Schedule H. Capital Stock

Title of issue

Number ofshares

authorized

Number ofshares issued

andoutstanding

as shownunder relatedbalance sheet

caption

Number ofShares

reserved foroptions,

warrants,conversion

and otherrights

Number ofshares held

by relatedparties

Directors,Officers and

Employees Others(In Thousands)

Common Shares 15,000,000 9,317,474 − 8,280,770 97,758 938,945

Preferred Shares 2,000,000 − − − − −

Schedule of Bonds Issuances

On January 24, 2014, FDC issued and listed Php8,800.0 million unsecured fixed-rate peso retail bondsdue 2024 with annual coupon rate of 6.1458%. Interest is payable quarterly in arrears starting April24, 2014.

I. ProceedsGross proceeds P=8,800.0Net proceeds 8,754.9

II. UtilizationRefinancing of debt obligations 4,877.1Capital expenditures for:

Hotel projectsPower project

321.53,556.3

III. Balance as of December 31, 2016 P=−

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Standards adopted by the Group

Below is the list of all effective Philippine Financial Reporting Standards (PFRS), PhilippineAccounting Standards (PAS) and Philippine Interpretations of International Financial ReportingInterpretations Committee (IFRIC) as of December 31, 2016 that were adopted and not applicable tothe Group:

PHILIPPINE FINANCIAL REPORTING STANDARDS ANDINTERPRETATIONS

Adopted NotAdopted

NotApplicable

Framework for the Preparation and Presentation of FinancialStatementsConceptual Framework Phase A: Objectives and qualitativecharacteristics

2

PFRSs Practice Statement Management Commentary 2

Philippine Financial Reporting Standards

PFRS 1(Revised)

First-time Adoption of Philippine FinancialReporting Standards 2

Amendments to PFRS 1 and PAS 27: Cost of anInvestment in a Subsidiary, Jointly ControlledEntity or Associate

2

Amendments to PFRS 1: Additional Exemptionsfor First-time Adopters 2

Amendment to PFRS 1: Limited Exemption fromComparative PFRS 7 Disclosures for First-timeAdopters

2

Amendments to PFRS 1: Severe Hyperinflation andRemoval of Fixed Date for First-time Adopters 2

Amendments to PFRS 1: Government Loans 2

Amendments to PFRS 1: Borrowing Costs 2

Amendments to PFRS 1: Meaning of “EffectivePFRSs’ 2

PFRS 2

Share-based Payment 2

Amendments to PFRS 2: Vesting Conditions andCancellations 2

Amendments to PFRS 2: Group Cash-settled Share-based Payment Transactions 2

Amendments to PFRS 2: Definition of VestingCondition 2

Amendments to PFRS 2: Share-based Payment,Classification and Measurement of Share-basedPayment Transactions

2

PFRS 3(Revised)

Business Combinations 2

Amendments to PFRS 3: Accounting forContingent Consideration in a BusinessCombination

2

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Adopted NotAdopted

NotApplicable

Amendments to PFRS 3: Scope Exceptions forJoint Arrangements 2

PFRS 4

Insurance Contracts 2

Amendments to PAS 39 and PFRS 4: InsuranceContracts Applying PFRS 9, Financial Instruments,with PFRS 4

2

Amendments to PAS 39 and PFRS 4: FinancialGuarantee Contracts 2

PFRS 5

Non-current Assets Held for Sale and DiscontinuedOperations 2

Amendments to PFRS 5: Changes in Methods ofDisposal 2

PFRS 6 Exploration for and Evaluation of MineralResources 2

PFRS 7

Financial Instruments: Disclosures 2

Amendments to PFRS 7: Transition 2

Amendments to PAS 39 and PFRS 7:Reclassification of Financial Assets 2

Amendments to PAS 39 and PFRS 7:Reclassification of Financial Assets - EffectiveDate and Transition

2

Amendments to PFRS 7: Improving Disclosuresabout Financial Instruments 2

Amendments to PFRS 7: Disclosures - Transfers ofFinancial Assets 2

Amendments to PFRS 7: Disclosures - OffsettingFinancial Assets and Financial Liabilities 2

Amendments to PFRS 7: Disclosures - ServicingContracts

2

Applicability of the Amendments to PFRS 7 toCondensed Interim Financial Statements

2

PFRS 8 Operating Segments 2

Amendments to PFRS 8: Aggregation of OperatingSegments and Reconciliation of the Total of theReportable Segments’ Assets to the Entity’s Assets

2

PFRS 9 Financial Instruments 2

PFRS 10Consolidated Financial Statements 2

Amendments to PFRS 10, Investment Entities:Applying the Consolidation Exception 2

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Adopted NotAdopted

NotApplicable

PFRS 11(Amended)

Joint Arrangements 2

Amendments to PFRS 11: Accounting forAcquisitions of Interests in Joint Operations 2

PFRS 12Disclosure of Interests in Other Entities 2

Amendments to PFRS 12: Investment Entities:Applying the Consolidation Exception 2

PFRS 13

Fair Value Measurement 2

Amendments to PFRS 13: Short-term receivableand payables 2

Amendments to PFRS 13: Portfolio Exception 2

PFRS 14 Regulatory Deferral Accounts 2

Philippine Accounting Standards

PAS 1(Revised)

Presentation of Financial Statements 2

Amendment to PAS 1: Capital Disclosures 2

Amendments to PAS 32 and PAS 1: PuttableFinancial Instruments and Obligations Arising onLiquidation

2

Amendments to PAS 1: Presentation of Items ofOther Comprehensive Income

2

Amendments to PAS 1: Clarification of therequirements for comparative information

2

Presentation of Financial Statements - DisclosureInitiative

2

PAS 2 Inventories 2

PAS 7 Statement of Cash Flows 2

PAS 8 Accounting Policies, Changes in AccountingEstimates and Errors 2

PAS 10 Events after the Reporting Period 2

PAS 11 Construction Contracts 2

PAS 12

Income Taxes 2

Amendment to PAS 12 - Deferred Tax: Recoveryof Underlying Assets 2

Amendments to PAS 12: Income Taxes,Recognition of Deferred Tax Assets for UnrealizedLosses

2

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Adopted NotAdopted

NotApplicable

PAS 16

Property, Plant and Equipment 2

Amendment to PAS 16: Classification of servicingequipment 2

Amendment to PAS 16: Revaluation Method -Proportionate Restatement of AccumulatedDepreciation and Amortization

2

Amendments to PAS 16 and PAS 38: Clarificationof Acceptable Methods of Depreciation andAmortization

2

Amendments to PAS 16 and PAS 41: Bearer Plants 2

PAS 17 Leases 2

PAS 18 Revenue 2

PAS 19(Amended)

Employee Benefits 2

Amendments to PAS 19: Actuarial Gains andLosses, Group Plans and Disclosures 2

Amendments to PAS 19: Defined Benefit Plans:Employee Contributions 2

Amendments to PAS 19: Discount Rate: RegionalMarket Issue 2

PAS 20 Accounting for Government Grants and Disclosureof Government Assistance 2

PAS 21The Effects of Changes in Foreign Exchange Rates 2

Amendment: Net Investment in a ForeignOperation 2

PAS 23 Borrowing Costs 2

PAS 24 Related Party Disclosures 2

Amendments to PAS 24: Key ManagementPersonnel 2

PAS 26 Accounting and Reporting by Retirement BenefitPlans 2

PAS 27(Amended)

Separate Financial Statements 2

Amendments to PAS 27: Equity Method inSeparate Financial Statements 2

PAS 28(Amended)

Investments in Associates and Joint Ventures 2

Amendments to PAS 28: Investment Entities:Applying the Consolidation Exception 2

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Adopted NotAdopted

NotApplicable

Amendments to PAS 28: Measuring an Associateor Joint Venture at Fair Value (Part of AnnualImprovements to PFRSs 2014 - 2016 Cycle)

2

PAS 29 Financial Reporting in HyperinflationaryEconomies 2

PAS 31 Interests in Joint Ventures 2

PAS 32

Financial Instruments: Disclosure and Presentation 2

Amendments to PAS 32 and PAS 1: PuttableFinancial Instruments and Obligations Arising onLiquidation

2

Amendment to PAS 32: Classification of RightsIssues 2

Amendments to PAS 32: Tax effect of Distributionto Holders of Equity Instruments 2

Amendments to PAS 32: Offsetting FinancialAssets and Financial Liabilities 2

PAS 33 Earnings per Share 2

PAS 34

Interim Financial Reporting 2

Amendment to PAS 34: Interim FinancialReporting and Segment Information for TotalAssets and Liabilities

Not Early Adopted

Amendments to PAS 34: Disclosure of Information‘Elsewhere in the Interim Financial Report’

PAS 36Impairment of Assets 2

Amendments to PAS 36: Recoverable AmountDisclosures for Non-Financial Assets 2

PAS 37 Provisions, Contingent Liabilities and ContingentAssets 2

PAS 38

Intangible Assets 2

Amendments to PAS 38: Revaluation Method -Proportionate Restatement of AccumulatedDepreciation and Amortization

2

Amendments to PAS 16 and PAS 38: Clarificationof Acceptable Methods of Depreciation andAmortization

2

PAS 39 Financial Instruments: Recognition andMeasurement 2

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Adopted NotAdopted

NotApplicable

Amendments to PAS 39: Transition and InitialRecognition of Financial Assets and FinancialLiabilities

2

Amendments to PAS 39: Cash Flow HedgeAccounting of Forecast Intragroup Transactions 2

Amendments to PAS 39: The Fair Value Option 2

Amendments to PAS 39 and PFRS 4: FinancialGuarantee Contracts 2

Amendments to PAS 39 and PFRS 7:Reclassification of Financial Assets 2

Amendments to PAS 39 and PFRS 7:Reclassification of Financial Assets - EffectiveDate and Transition

2

Amendments to Philippine Interpretation IFRIC 9and PAS 39: Embedded Derivatives 2

Amendment to PAS 39: Eligible Hedged Items 2

Amendment to PAS 39: Novation of Derivativesand Continuation of Hedge Accounting 2

PAS 40

Investment Property 2

Amendment to PAS 40: Interrelationship betweenPFRS 3 and PAS 40 2

Amendment to PAS 40: Investment Property,Transfers of Investment Property 2

PAS 41Agriculture 2

Amendment to PAS 41: Agriculture: Bearer Plants 2

Philippine Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restorationand Similar Liabilities 2

IFRIC 2 Members' Share in Co-operative Entities andSimilar Instruments 2

IFRIC 4 Determining Whether an Arrangement Contains aLease 2

IFRIC 5Rights to Interests arising from Decommissioning,Restoration and Environmental RehabilitationFunds

2

IFRIC 6Liabilities arising from Participating in a SpecificMarket - Waste Electrical and ElectronicEquipment

2

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Adopted NotAdopted

NotApplicable

IFRIC 7Applying the Restatement Approach under PAS 29Financial Reporting in HyperinflationaryEconomies

2

IFRIC 8 Scope of PFRS 2 2

IFRIC 9Reassessment of Embedded Derivatives 2

Amendments to Philippine Interpretation IFRIC 9and PAS 39: Embedded Derivatives 2

IFRIC 10 Interim Financial Reporting and Impairment 2

IFRIC 11 PFRS 2- Group and Treasury Share Transactions 2

IFRIC 12 Service Concession Arrangements 2

IFRIC 13 Customer Loyalty Programmes 2

IFRIC 14

The Limit on a Defined Benefit Asset, MinimumFunding Requirements and their Interaction 2

Amendments to Philippine Interpretations IFRIC14, Prepayments of a Minimum FundingRequirement

2

IFRIC 15 Agreements for the Construction of Real Estate 2

IFRIC 16 Hedges of a Net Investment in a Foreign Operation 2

IFRIC 17 Distributions of Non-cash Assets to Owners 2

IFRIC 18 Transfers of Assets from Customers 2

IFRIC 19 Extinguishing Financial Liabilities with EquityInstruments 2

IFRIC 20 Stripping Costs in the Production Phase of aSurface Mine 2

IFRIC 21 Levies 2

SIC-7 Introduction of the Euro 2

SIC-10 Government Assistance - No Specific Relation toOperating Activities 2

SIC-12Consolidation - Special Purpose Entities 2

Amendment to SIC - 12: Scope of SIC 12 2

SIC-13 Jointly Controlled Entities - Non-MonetaryContributions by Venturers 2

SIC-15 Operating Leases - Incentives 2

SIC-25 Income Taxes - Changes in the Tax Status of anEntity or its Shareholders 2

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Adopted NotAdopted

NotApplicable

SIC-27 Evaluating the Substance of Transactions Involvingthe Legal Form of a Lease 2

SIC-29 Service Concession Arrangements: Disclosures. 2

SIC-31 Revenue - Barter Transactions InvolvingAdvertising Services 2

SIC-32 Intangible Assets - Web Site Costs 2

Standards tagged as “Not applicable” have been adopted by the Group but have no significant coveredtransactions for the period ended December 31, 2016.

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FILINVEST DEVELOPMENT CORPORATIONUNAPPROPRIATED RETAINED EARNINGS AVAILABLE FORDIVIDEND DISTRIBUTION(Amounts in Thousands of Pesos)

Unappropriated Retained Earnings, beginning P=50,850,546

Adjustments:Equity in net income of subsidiaries and joint venture (44,222,701)Reclassification of revaluation reserve on land at deemed cost (46,331)Deferred tax assets recognized in prior years (454,096)

Unappropriated Retained Earnings as adjusted, beginning 6,127,418

Net income actually earned/realized during the year5,502,727

Net income during the year closed to Retained Earnings

Less: Non-actual/unrealized income, net of taxEquity in net income of subsidiaries and joint venture (4,076,353)Unrealized foreign exchange gain - netUnrealized actuarial gainFair value adjustment (M2M gains)Fair value adjustment of Investment Property resulting

to gainAdjustment due to deviation from PFRS/GAAP - gainOther unrealized gains or adjustments to the retained

earnings as a result of certain transactions accountedfor under the PFRS

Movements in deferred tax assets 162,534Add: Non-actual losses

Depreciation on revaluation increment (after tax)Adjustment due to deviation from PFRS/GAAP - lossLoss on fair value adjustment of investment property

(after tax)1,588,908

Less: Dividend declarations during the year (480,713)Cash dividends

Total Unappropriated Retained Earnings Available For DividendDistribution, December 31, 2016 P=7,235,613

*SGVFS022055*

Financial Soundness Indicator

Below are the financial ratios that are relevant to the Group as of and for the years ended December31, 2016 and 2015.

As of and for the yearended December 31, 2016

As of and for the yearended December 31, 2015Performance Indicators

Earnings per share

Net Income Attributable toEquity Holders

Weighted Average Number ofOutstanding Shares 0.591 /share 0.469 /share

Price Earnings RatioClosing Price (1)

Earnings Per Share 13.94 Times 9.38 Times

Return on RevenuesNet Income

Total Revenues 14% 14%

Return on Equity (average)Net Income

Average Equity 8% 8%

Long-term Debt to Equity RatioLong-term Debt

Total Stockholders’ Equity 1.13 : 1 1.04 : 1

Total Liabilities to Equity RatioTotal Liabilities (2)

Total Stockholders’ Equity 1.57 : 1 1.50 : 1

EBITDA to Total Interest ExpenseEBITDA

Total Interest Expense 7.62 Times 8.56 Times

Current Ratioa. Including EWBC

Current AssetsCurrent Liabilities (3) 1.39 :1 0.98 :1

b. Excluding EWBCCurrent Assets

Current Liabilities (3) 3.05 :1 2.98 :1

Quick Ratio - Excluding EWBCCurrent Asset - Inventories

Current Liabilities (3) 1.22 :1 1.23 :1

Asset to Equity RatioTotal AssetsTotal Equity 4.80 :1 4.32 :1

(1) Closing price at December 29, 2016 and December 29, 2015.(2) Excluding deposit liabilities, bills and acceptances payable, and liability on IPP Administrator contract.(3) Excluding current portion of liability on IPP Administrator contract.

*SGVFS022055*

Group StructureBelow is a map showing the relationship between and among the Group and its ultimate parent company, subsidiaries, and associates as of December 31, 2016:

CONSOLIDATED CHANGES IN THE ACGR FOR 2016

SECURITIES AND EXCHANGE COMMISSION

SEC FORM – ACGR

ANNUAL CORPORATE GOVERNANCE REPORT

GENERAL INSTRUCTIONS

(A) Use of Form ACGR

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

(B) Preparation of Report

These general instructions are not to be filed with the report. The instructions to the various captions of the form shall not beomitted from the report as filed. The report shall contain the numbers and captions of all items. If any item is inapplicable orthe answer thereto is in the negative, an appropriate statement to that effect shall be made. Provide an explanation on whythe item does not apply to the company or on how the company’s practice differs from the Code.

(C) Signature and Filing of the Report

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

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

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

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

(A) Filing an Amendment

Any material change in the facts set forth in the report occurring within the year shall be reported through SEC Form 17-C. Thecover page for the SEC Form 17-C shall indicate “Amendment to the ACGR”.

1

SECURITIES AND EXCHANGE COMMISSION

SEC FORM – ACGR

ANNUAL CORPORATE GOVERNANCE REPORT

1. Report is Filed for the Year: 2016

2. Exact Name of Registrant as Specified in its Charter FILINVEST DEVELOPMENT CORPORATION

3. The Beaufort 5 th Avenue corner 23 rd Street, Bonifacio, Global City, Taguig City 1630

Address of Principal Office Postal Code

4. SEC Identification Number 51048 5. (SEC Use Only)

Industry Classification Code

6. BIR Tax Identification Number: 000-053-167

7. (02) 918-8188/798-3959 Issuer’s Telephone number, including area code

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

2

TABLE OF CONTENTS

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

1) BOARD OF DIRECTORS(A.1.a) Composition of the Board…………………………….………………………………….……........….5(A.1.b) Directorship in Other Companies…………………........……………………………………………6(A.1.c) Shareholding in the Company……................….…………...........................................8

2) CHAIRMAN AND CEO………………...............................……………………………………………….…………....................83) OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS……........................………….............94) CHANGES IN THE BOARD OF DIRECTORS…………………………....…………...…………………………….......................105) ORIENTATION AND EDUCATION PROGRAM………………………….……….......……………………………....................15

B. CODE OF BUSINESS CONDUCT & ETHICS…………………………………………...………………….............………..........................15

1) POLICIES…………………………………………….....................………………....………………………………...........................162) DISSEMINATION OF CODE……………………………………………………………….....................….………......................183) COMPLIANCE WITH CODE…………………………………………………………………...............…………….......................184) RELATED PARTY TRANSACTIONS……………………………………………………………………….………............................18

(B.4.a) Policies and Procedures………………...…………….......................................……………...18(B.4.b) Conflict of Interest…………………………..........……………………………………………..………..18

5) FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS……………...........……………….…............…...............196) ALTERNATIVE DISPUTE RESOLUTION……………………………………………………………….......................................19

C. BOARD MEETINGS & ATTENDANCE………………..……………………………………………………....……….…….............................20

1) SCHEDULE OF MEETINGS………………………………..................……………………......…………………........................202) DETAILS OF ATTENDANCE OF DIRECTORS……………………...........……………………....…………….........................203) SEPARATE MEETING OF NON-EXECUTIVE DIRECTORS……………………………………........………....................….204) ACCESS TO INFORMATION……………………………….……………………………………………………….............................205) EXTERNAL ADVICE………………………….………………………………………………………....…………….............................216) CHANGES IN EXISTING POLICIES…………………………………………………………...........…………........................…..21

D. REMUNERATION MATTERS………………………………………………………..……………………………......………..............................21

1) REMUNERATION PROCESS……………………………………………………………………………………….............................222) REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS…………………………………............................…..223) AGGREGATE REMUNERATION ……………………….......………………………………………………..…….........................224) STOCK RIGHTS, OPTIONS AND WARRANTS…………………………………………………………….....….......................235) REMUNERATION OF MANAGEMENT………………………....……………………………………......…….....................….23

E. BOARD COMMITTEES………………………......……………………………………………...……………………………................................24

1) NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES…………........…………………………...................242) COMMITTEE MEMBERS……………………………………………………………………………………………............................263) CHANGES IN COMMITTEE MEMBERS………………………………………………....……………………….........................284) WORK DONE AND ISSUES ADDRESSED…………………...……………………....…………………………..........................285) COMMITTEE PROGRAM…………………………………………………………………………………………………............…………29

F. RISK MANAGEMENT SYSTEM…………………………..........………………………………....…………………….…….............................29

1) STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM……………………………......................……..292) RISK POLICY……………………………....................……………………………………………………………...............................293) CONTROL SYSTEM…………………………………………………………….................................……………........................30

G. INTERNAL AUDIT AND CONTROL……………………………………………......………...……………………………….............................32

1) STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM…………...........………....……....................322) INTERNAL AUDIT

(G.2.a) Role, Scope and Internal Audit Function………………….................................………….32(G.2.b) Appointment/Removal of Internal Auditor………………….………………………………………32(G.2.c) Reporting Relationship with the Audit Committee………….……………........................32(G.2.d) Resignation, Re-assignment and Reasons………………….........……………………………...…32

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(G.2.e) Progress against Plans, Issues, Findings and Examination Trends................................33(G.2.f) Audit Control Policies and Procedures……………………………………….........................……..33(G.2.g) Mechanisms and Safeguards………...............…………………….........……………...…...............33

H. RIGHTS OF STOCKHOLDERS……………………………………………………………………….......................……......................................38

1) RIGHT TO PARTICIPATE EFFECTIVELY IN STOCKHOLDERS’ MEETINGS…………………................….........................382) TREATMENT OF MINORITY STOCKHOLDERS……………………………………………........................…............................44

I. INVESTORS RELATIONS PROGRAM……………………………........................………………………………………...................................44

J. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES……………………......................……………………………................................45

K. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL………………………………………...............…………..............................46

L. INTERNAL BREACHES AND SANCTIONS…………………………………..................................……………………...............................47

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A. BOARD MATTERS

1) Board of Directors

Number of Directors per Articles of Incorporation 7

Actual number of Directors for the year 2015 7

(a) Composition of the Board

Complete the table with information on the Board of Directors:

Director’s Name

Type[Executiv

e (ED),Non-

Executive(NED) orIndepend

entDirector

(ID)]

If nominee,identify the

principal

Nominator inthe last election(if ID, state the

relationshipwith the

nominator)

Datefirst

elected(*)

Date lastelected(if ID,

state thenumber of

years servedas ID)1

Electedwhen

(Annual /Special

Meeting)

No. ofyears

served asdirector

Jonathan T. Gotianun NEDALG HoldingsCorporation

(“ALG”)ALG 07/09/93

04/29/2016Annual 22

Mercedes T. Gotianun NED ALG ALG

04/27/73 04/29/16 Annual 42

L. Josephine G. Yap ED ALGALG

03/30/90 04/29/16 Annual 25

Andrew T. Gotianun, Jr. NED ALGALG

03/31/89 04/29/16 Annual 26

Jesus N. Alcordo NED ALGALG

05/27/11 04/29/16 Annual 3

Lamberto U. Ocampo*** ID** NA NA NA NA NA NA

Val Antonio B. Suarez ID**

Luis T. Fernandez – no relation to ID

05/30/14 04/29/16 Annual 2

Virginia T. Obcena****

ID

Luis T. Fernandez – no relation to ID

04/29/16 04/29/168

months

(*) Chairman Emeritus(**) For this purpose, all previous terms served by the Company’s existing independent directors prior to the issuance of SECMemorandum Circular No. 09, Series of 2011, which took effect on January 2, 2012, shall not be included in the application ofthe term limits.

(***) The term of Mr. Lamberto U. Ocampo as independent director of the Company expired on April 29, 2016. From January1, 2016 to April 29, 2016, the Board of Directors conducted 3 meetings.

(****) Ms. Virginia T. Obcena was elected as an independent director of the Company on April 29, 2016. From April 29, 2016to December 31, 2016, the Board of Directors conducted 3 meetings.

Provide a brief summary of the corporate governance policy that the board of directors has adopted. Please emphasize thepolicy/ies relative to the treatment of all shareholders, respect for the rights of minority shareholders and of other stakeholders, dis -closure duties, and board responsibilities.

Recognizing the significance of good corporate governance in creating sustainable relationships and interests among all stake -holders, the Board of Directors has formulated the Company’s Corporate Governance (CG) manual to institutionalize the princi -ples of good corporate governance in the entire organization. The latest CG manual fully conforms to the guidelines issued by theSecurities & Exchange Commission the “Commission”.

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

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(a) How often does the Board review and approve the vision and mission? Every three (3) years.

(b) Directorship in Other Companies

(i) Directorship in the Company’s Group2

Identify, as and if applicable, the members of the company’s Board of Directors who hold the office of director in other companies within its Group:

Director’s NameCorporate Name of the

Group Company

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

director is also the Chairman.

L. Josephine G. Yap

FLI, Cotabato Sugar Central Company,Inc. (CSCC), High Yield Sugar FarmsCorporation (High Yield), PropertyMaximizer Corp. (PROMAX), PropertySpecialist Resources, Inc. (PSRI), LeisurePro, Inc. (LPI), Filinvest Asia Corp. (FAC),Cyberzone Philippines, Inc. (CPI),Filinvest All Philippines, Inc. (FAPI),Filinvest Alabamg, Inc. (FAI), FestivalSupermall, Inc. (FSI), FSM Cinemas, Inc.(FSM), Proplus, Inc.(Proplus), Pro ExcelProperty Managers, Inc (Pro Excel),Mactan Seascapes Services, Inc. (MSSI),FDC Utilities, Inc. (FDCUI), FDC Danao,FDC Misamis, FDC Camarines, FDCCasecnan, FDC RES, FDC Negros,Filinvest Hospitality Corporation (FHC),Chroma Hospitality, Inc. (CHI), FCGCCorporation (FCGC), Filinvest BCDAClark, Inc. (FBCI), Filinvest Mimosa, Inc.(FMI), Mimosa Cityscapes, Inc. (MCI),Countrywide Water Services, Inc.(CWSI)

ED

Jonathan T. Gotianun

PSHC, CSCC, High Yield, DSCC, FITI, FLI,PROMAX, Homepro Realty Marketing,Inc.(HMI), LPI, CPI, FAI, FSI, Proplus,MSSI, FDCUI, FDC Misamis, FDC RES,FHC, MCI, CWSI

NED (Chairman)

Mercedes T. Gotianun

PSHC, CSCC, High Yield, DSCC, FITI, FDCForex,FLI, FAI, MSSI, FDCUI, FDC Danao,FDC Misamis, FDC Camarines, FDCCasecnan, FDC RES, FDC Negros, FDCDanao Del Norte, FHC

NED

Andrew T. Gotianun, Jr.

PSHC, DSCC, FDC FOREX, FLI, PROMAX,HMI, PSRI, LPI, CPI, FAI, FSI, FSM,Proplus, SRI, FDCUI, FDC Danao, FDCMisamis, FDC Camarines, FDCCasecnan, FDC RES, FDC Negros, FDCDanao Del Norte, FHC, FMI, MCI, FCGC,CWSI

NED

Jesus N. Alcordo

FDCUI, FDCUI, FDC Danao, FDCMisamis, FDC Camarines, FDCCasecnan, FDC RES, FDC Negros, FDCDanao Del Norte, CWSI

NED

Val Antonio B. Suarez FLI IDVirginia T. Obcena Not Applicable Not Applicable

(ii) Directorship in Other Listed Companies

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

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

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The Company’s directors are not directors of publicly-listed companies outside of the Group.

Director’s Name Name of Listed CompanyType of Directorship (Executive, Non-Executive, Independent). Indicate if

director is also the Chairman.

Val Antonio B. SuarezLepanto Consolidated Mining Company Independent

(iii) Relationship within the Company and its Group

Provide details, as and if applicable, of any relation among the members of the Board of Directors, which links themto significant shareholders in the company and/or in its group:

Mrs. Mercedes T. Gotianun is the mother of Mr. Andrew T. Gotianun, Jr., Mr. Jonathan T. Gotianun and Mrs. Josephine G. Yap. Allof them are members of the Board.

Director’s NameName of the

Significant ShareholderDescription of the relationship

Not Applicable

(iv)Has the company set a limit on the number of board seats in other companies (publicly listed, ordinary andcompanies with secondary license) that an individual director or CEO may hold simultaneously? No. In particular, isthe limit of five board seats in other publicly listed companies imposed and observed? If yes, briefly describe otherguidelines:

GuidelinesMaximum Number of Directorships in

other companiesExecutive Director Under the Company’s Revised Manual on

Corporate Governance, the ExecutiveDirectors shall submit themselves to a lowindicative limit on membership in othercorporate Boards. In any case, the capacityof directors to serve with diligence shall notbe comprised.

Under the Company’s Revised Manual onCorporate Governance, the ExecutiveDirectors shall submit themselves to a lowindicative limit on membership in othercorporate Boards. In any case, the capacityof directors to serve with diligence shall notbe comprised.

Non-Executive Director Under the Company’s Revised Manual onCorporate Governance, the same low limitfor Executive Directors shall apply to Non-Executive Directors.

Under the Company’s Revised Manual onCorporate Governance, the same low limitfor Executive Directors shall apply to Non-Executive Directors.

CEO Under the Company’s Revised Manual onCorporate Governance, the same low limit shall apply to the CEO. In any case, thecapacity of directors to serve with diligenceshall not be comprised.

Under the Company’s Revised Manual onCorporate Governance, the same low limit shall apply to the CEO. In any case, thecapacity of directors to serve with diligenceshall not be comprised.

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(c) Shareholding in the Company

Complete the following table on the members of the company’s Board of Directors who directly and indirectly own sharesin the company:

Name of DirectorNumber of Direct

shares (*)

Number ofIndirect shares (*) /Through (name of

record owner)

% of Capital Stock

Jonathan T. Gotianun 12

33,704 (throughBerit Holdings

Corp.)

63,000 (throughJabberwock

Holdings, Inc.)

116,000 (throughChriszen Holdings,

Inc.)

Negligible

L. Josephine G. Yap 2,817,323** 7,191,022*** 0.11%

Mercedes T. Gotianun 3,796,472 0.04%

Andrew T. Gotianun, Jr 1,916 Negligible

Andrew L. Gotianun, Sr. and/or Mercedes T. Gotianun 33,697,190 0.36%

Virginia T. Obcena 1 Negligible

Val Antonio B. Suarez 1 Negligible

Jesus N. Alcordo 1 2,885,688 0.03%

TOTAL 40,312,916 10,289,414 0.54%

(*) As of November 30, 2016(**) 12 shares are under the name of Josephine G. Yap and 2,817,311 shares are under the name of Joseph &/or Josephine Yap(***) The 7,191,022 indirect shares are under the name of Joseph &/or Josephine Yap.

1) Chairman and CEO

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

views.

Yes X No (i)

Identify the Chair and CEO:

Chairman of the Board Jonathan T. Gotianun

CEO/President L. Josephine G. Yap

(b) Roles, Accountabilities and Deliverables

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

ChairmanChief Executive Officer

Role The Company’s By-Laws provide thatthe Chairman of the Board shallpreside at all meetings ofstockholders and of the Board ofDirectors.

The President & CEO shall havegeneral and active care, supervisionand direction of the business affairs ofthe Corporation. He shall also presideat all meetings of the stockholders andthe Board of Directors in the absence

8

or inability of Chairman of the Boardto preside in such meeting.

Accountabilities

Being members of the Board of Directors, the Chairman and the ChiefExecutive Officer are primarily accountable to stockholders.

Pursuant to the Company’s Revised Manual on Corporate Governance, the rolesof the Chairman and the CEO, as much as practicable, shall be separate to fosteran appropriate balance of power, increased accountability and better capacityfor independent decision-making by the Board. If the positions of the Chairmanand CEO are unified, the proper checks and balances should be laid down toensure that the Board gets benefit of independent views and perspectives.

Deliverables

The deliverables of the Chairman asprovided in the Revised Manual ofCorporate Governance include,among others, the following : (i) toensure that the meetings of theBoard are held in accordance with theBy-Laws or as the Chairman maydeem necessary; (ii) Supervise thepreparation of the agenda of themeeting in coordination with theCorporate Secretary taking intoconsideration the suggestions of theCEO, Management and the directors;and (iii) maintain qualitative andtimely lines of communication andinformation between the Board andthe Management.

The President & CEO’s deliverablesincludes : (i) sign with the Secretary orAssistant Secretary, any or all stockcertificates of the Corporation; (ii)appoint& discharge, subject to theapproval of the Board, employees oragents of the Corporation and fix theircompensation; (iii) see that the books,reports, statements andcertificates required by law areproperly kept, made and filedaccording to law; and (iv) and ingeneral, shall perform all dutiesincident to the office of the Presidentand such duties as may from time totime be assigned to him by the Boardof Directors as prescribed by thecompany’s By-Laws.

L. Explain how the board of directors plan for the succession of the CEO/Managing Director/President and thetop key management positions?

The Board of Directors discuss and deliberate on succession plans for the President & CEO and top key man -agement positions to ensure continuity and consistency with the Company’s strategic plans as well as to ac -commodate its growth.

M. Other Executive, Non-Executive and Independent Directors

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

The Company considers it appropriate that the directors in the Board are composed of competent, ethical andprofessional individuals who are knowledgeable, experienced, and skillful in diverse fields relevant to the con -duct of business of the Company and its subsidiaries.

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

The Company ensures that at least one NED has experience in the sector or industry it belongs. The current structure of the Board is appropriate for the Company’s business since all the members are knowledgeable, experienced, skillful in retail & property development, banking & power generation, and conforms to the principles of good governance.

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

Executive/Non-Executive/Independent Director

Role

As mandated in the Company’s Revised Manual on Corporate Governance, a director’s office isone of trust and confidence. A director should act in the best interest of the Company in a mannercharacterized by transparency, accountability and fairness. He should also exercise leadership,prudence and integrity in directing the Company towards sustained progress.

Accountabilities As provided in the Company’s Revised Manual on Corporate Governance, the directors, asmembers of the Board, are primarily accountable to stockholders. The Board should providestockholders with a balanced and comprehensive assessment of the Company’s performance,

9

position and prospects on a quarterly basis, including interim and other reports that couldadversely affect the business, as well as reports to regulators that are required by law.

Deliverables

A director should observe the following deliverables: (i) Conduct fair business transactions withthe Company, and ensure that his personal interest does not conflict with the interest of theCompany; (ii) Devote the time and attention necessary to properly and effectively perform hisduties and responsibilities; (iii) Act judiciously; (iv) Exercise independent judgment; (v) Have aworking knowledge of the statutory and regulatory requirements that affect the Company,including its articles of incorporations and by-laws, the rules and regulations of the Commissionand, where applicable, the requirements of relevant regulatory agencies; and (vi) Observeconfidentiality.

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

The Company defines an “independent” director to mean a person who, apart from his fees and shareholdings, is independent ofmanagement and free from any business or other relationship which could, or could reasonably be perceived to, materiallyinterfere with his exercise of independent judgment in carrying out his responsibilities as a director. The Company complies withthe aforesaid definition.

Does the company have a term limit of five consecutive years for independent directors? If after two years, the company wishes tobring back an independent director who had served for five years, does it limit the term for no more than four additional years?Please explain.

The Company complies with the term limits under SEC’s Memorandum Circular No.09, Series of 2011 which took effect onJanuary 2, 2012. The Circular provides that independent directors can serve as such for five (5) consecutive years, provided thatservice for a period of at least six (6) months shall be equivalent to one (1) year, regardless of the manner by which theindependent director position was relinquished or terminated. After completion of the five-year service period, an independentdirector shall be ineligible for election as such in the same company unless the independent director has undergone “cooling off”period of two (2) years, provided, that during such period, the independent director concerned has not engaged in any activitythat under existing rules disqualifies a person from being elected as independent director in the same company. An independentdirector re-elected as such after the “cooling off” period can serve for another five (5) consecutive years

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

(a) Resignation/Death/Removal

Indicate any changes in the composition of the Board of Directors that happened during the period (2016):

Name Position Date of Cessation Reason

Lamberto U. Ocampo Independent Director 04/29/16 Expiry of term

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

Describe the procedures for the selection/appointment, re-election, disqualification, removal, reinstatement andsuspension of the members of the Board of Directors. Provide details of the processes adopted (including the frequencyof election) and the criteria employed in each procedure:

Procedure Process Adopted Criteria

a. Selection/Appointment

Executive Directors Nominations of Directors must followthe procedures set out in the Com-pany’s By- Laws, Revised Manual onCorporate Governance and other perti-nent regulations and shall be precededby the appropriate favorable report bythe Nomination Committee.

1. The directors of the Company areelected at the annual stockholders‘meeting to hold office until their respec-tive successors have been duly ap-pointed or elected and qualified. Pur-suant to the Company’s Revised Man-ual on Corporate Governance, the

The Nomination Committee shall ensurethat the nominees for directors shallpossess all of the qualifications and noneof the disqualifications set forth in theRevised Manual on CorporateGovernance and Section 3 theCompany’s By-Laws.

10

membership of the Board may be acombination of executive and non-exec-utive directors in order that no directoror small group of directors can domi-nate the decision-making process. Thenon-executive directors should possesssuch qualifications and stature thatwould enable them to effectively partic-ipate in the deliberations of the Board.

2. The stockholders of the Companymay nominate individuals to bemembers of the Board of Directors. Allnominations for directors shall beforwarded to the NominationCommittee and signed by thenominating stockholder together withthe acceptance and conformity by thenominees.

3. Nominations for directors shouldinclude (i) the curriculum vitae of thenominee, (ii) a statement that thenominee has all the qualifications andnone of the disqualifications, (iii)information on the relationship of thenominee to the stockholder submittingthe nomination, and (iv) all relevantinformation about the nominee’squalifications.

4.The Nomination Committee createdunder the Company’s Revised Manualon Corporate Governance shall endorsethe nominees for reelection in thestockholders’ meeting, in accordancewith the qualifications anddisqualifications set forth in the RevisedManual on Corporate Governance.

5. The person receiving the highestnumber of the stockholders present inperson or by proxy and entitled to voteshall be the directors.

Non-Executive Directors

(iii) Independent Directors Conformably with the Company’s By-Laws and the Revised Code onCorporate Governance, the processadopted for the nomination andelection of independent directors shallbe as follows:

a. Nominations for directors shouldinclude (i) the curriculum vitae of thenominee, (ii) a statement that thenominee has all the qualifications andnone of the disqualifications, (iii)information on the relationship of thenominee to the stockholder submittingthe nomination, and (iv) all relevant

The Nomination Committee shall ensurethat the nominee for independent direc-tor shall be in accordance with the quali-fications and disqualifications set forthin the Revised Manual on CorporateGovernance. In addition to thereto, theindependent director must meet the re-quirements of section 17.2 of the Securi-ties and Regulation Code.

11

information about the nominee’s

b. The nomination of independentdirectors shall be conducted by theCommittee before the stockholders'meeting. All recommendations shall besigned by the nominating stockholderstogether with the acceptance andconformity by the would-be nominees.

c. The Committee shall pre-screen thequalifications and prepare a final list ofall candidates and put in placescreening policies and parameters toenable it to effectively review thequalifications of the nominees forindependent directors as set forth inthe Company's Manual on CorporateGovernance.

d. After the nomination, the Committeeshall prepare a Final List of Candidateswhich shall contain all the informationabout all the nominees for independentdirectors, as required under Part IV (A)and (C) of Annex “C” of SRC Rule 12,which list, shall be made available tothe Commission and to all stockholdersthrough the filing and distribution ofthe Information Statement, inaccordance with SRC Rule 20, or in suchother reports the company is requiredto submit to the Commission. Thename of the person or group ofpersons who recommended thenomination of the independent directorshall be identified in such reportincluding any relationship with thenominee.

e. Only nominees whose names appearon the Final List of Candidates shall beeligible for election as IndependentDirector. No other nominations shall beentertained after the Final List ofCandidates shall have been prepared.No further nominations shall beentertained or allowed on the floorduring the actual annual stockholders'meeting.

b. Re-appointment

(i) Executive Directors

The directors are elected annually andshall hold office until the annual meet-ing held next after his election. The di-rectors may be re-elected for anotherterm. As with selection, the re-appoint-ment of directors must be preceded bythe corresponding evaluation by theNomination Committee.

(ii) Non-Executive Directors

(iii) Independent Directors Subject to the tenure limitation underSEC Memorandum Circular No. 09, anindependent director may be re-electedafter his nomination has been passedupon by the Nomination Committee.

Please refer our explanation in (a)

12

As with selection, the re-appointmentof an independent director must bepreceded by an evaluation by theNomination Committee and shouldcomply with the process for selection ofan independent director as explainedearlier.

c. Permanent Disqualification


The relevant provision in the By-Lawson the removal of a director may beused to disqualify the said director.

The Company’s Revised Manual onCorporate Governance sets forth theguidelines/criteria for permanentdisqualification of directors.


(iii) Independent Directors

d. Temporary Disqualification

(i) Executive DirectorsThe relevant provision in the By-Lawson the removal of a director may beused to disqualify the said director.

The Company’s Revised Manual onCorporate Governance sets forth theguidelines/criteria for the temporarydisqualification of executive directors.



e. Removal


The Company’s By Laws provides thatany director may be removed, eitherwith or without cause, at any time, bythe affirmative vote of the stockholdersholding 2/3 of the subscribed capitalentitled to vote at a regular meeting orat a special meeting of the stockholderscalled for the purpose and held afterdue notice. The vacancy in the Boardcaused by such removal may be filledby the stockholders at such meeting.

Any vacancy occurring in the Board ofDirectors, other than by removal by thestockholders or expiration of term, maybe filled by the vote of at least amajority of the remaining directors, ifstill constituting a quorum; otherwise,the vacancy must be filed by thestockholders at a regular or at anyspecial meeting of stockholders calledfor the purpose. A director so electedto fill a vacancy shall be elected only forthe unexpired term of his predecessorin office.

The vacancy resulting from the removalof a director by the

stockholders in the manner providedby law may be filed by election at thesame meeting of stockholders.

The Company’s Revised Manual onCorporate Governance & By-Law setsforth the guidelines/criteria for thetemporary and permanentdisqualification of directors.


(iii) Independent Directors The Board of Directors shall not pro-pose the removal of any independentdirector prior to the end of the By Law-

13

mandated term, unless there are duegrounds therefore acknowledged bythe Board after receiving the reportfrom the Nomination Committee.

f. Re-instatement


The By-Laws does not provide for theprocess or mechanism on thereinstatement of a director.

However, the director may benominated anew and re-elected foranother term provided at the time ofhis nomination, he possesses all of thequalifications and none of thedisqualifications under the RevisedManual on Corporate Governance. Theelection of a director must be precededby the corresponding evaluation of theNomination Committee.

The Company’s Revised Manual onCorporate Governance and By Laws setsforth the guidelines/criteria for thetemporary and permanentdisqualification of directors



g. Suspension


The By-Laws does not provide for theprocess or mechanism to suspend anexecutive, non-executive orindependent director. The directormay however be removed pursuant tothe relevant provision in the Company’sBy-Laws.



Voting Result of the last Annual General Meeting held on April 29, 2016

Name of Director / Independent Director Votes FOR AGAINST Votes ABSTAIN Votes

Mercedes T. Gotianun 8,329,518,636 4,842,640 0

Andrew T. Gotianun, Jr. 8,329,518,636 4,842,640 0

Jonathan T. Gotianun 8,329,518,636 4,842,640 0

Lourdes Josephine Gotianun Yap 8,334,061,276 300,000 0

Jesus N. Alcordo 8,329,818,636 4,542,640 0

Val Antonio B. Suarez 8,334,361,276 0 0

Virginia T. Obcena 8,334,361,276 0 0

14

O. Orientation and Education Program

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

The Company may arrange a meeting to introduce the new director to existing directors and key executives of the Com-pany. An orientation will be made for a better understanding of his role in the organization and to present Company’sbusiness, including among others, the Company’s goals, vision, and strategies; organizational structure; summary ofbusiness performance, recent projects, and projects under construction to provide the new director with adequate ba -sic information to perform his duties.

O.a.ii. State any in-house training and external courses attended by Directors and Senior Management3 for the past three (3) years:

O.a.iii. Continuing education programs for directors: programs and seminars and roundtables attended during the year.

Name of Director/Officer Date of Training Program Name of Training Institution

Jonathan T. Gotianun 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum

Securities and Exchange Commission and Philippine Stock Exchange

L. Josephine Gotianun Yap 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Andrew T. Gotianun, Jr. 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Val Antonio B. Suarez 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Virginia T. Obcena 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Nelson M. Bona 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Daniel L. Ang Tan Chai 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Elma Christine R. Leogardo 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Sharon P. Pagaling-Refuerzo 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


Ana Regina Santillan 22 November 2016 3rd Annual SEC-PSE Corporate Governance Forum


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

15

B. CODE OF BUSINESS CONDUCT & ETHICS

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

Business Conduct & Ethics Directors Senior Management Employees

(a) Conflict of Interest

The By Laws provides thatno person shall qualify tothe Board of Directors ifhe is engaged in any busi-ness which competes withor is antagonistic to thatof the Corporation.

In addition, the RevisedCorporate GovernanceManual provides that, ifan actual or potential con-flict of interest may arise,he should fully and imme-diately disclose it andshould not participate inthe decision-makingprocess. A director whohas a continuing materialconflict of interest shouldconsider resigning fromhis position.

The Company’s Employee Manual (“Employee Manual”)provides that no employee shall act for the Company inany transaction involving persons or firms where he is,his family or dependents have any significant connectionor financial interest. For this reason, the Code of Disci-pline considers as serious offenses the engagement inany business that is directly or indirectly in competitionwith that of the Company, or engage directly in moneylending or indirectly in any conduct prejudicial to theinterest of the Company or to the performance of his jobor work assignments. The acceptance of outside em-ployment on part or full time without prior written no-tice to and approval of Management is classified as aserious offense.

(b) Conduct of Business and Fair Dealings

The Company operatesunder the basic principlethat the director shouldnot use his position toprofit or gain somebenefit or advantage forhimself and/or his relatedinterests. He should avoidsituations that maycompromise hisimpartiality.

The Employee Manual provides that employees shallaward orders, contracts and commitments to supplierswithout favoritism. Business must be conducted strictlyon the basis of merit.

(c) Receipt of gifts from third parties

Under the Revised Manualon Corporate Governance,the basic principle to beobserved is that thedirector should not use hisposition to profit or gainsome benefit oradvantage for himselfand/or his relatedinterest.

The Employee Manual provides that no employee shallaccept gifts or lavish entertainment from customers orsuppliers either for himself or his family. It furtherprohibits employees from soliciting or acceptingpersonal benefits such as fees or commission from anycustomer of the Company or any individual ororganization doing or seeking business with theCompany. For this reason, bribery, accepting bribes; orunofficial solicitation of gifts and loans from customers,contractors and suppliers are considered serious offensesunder the Company’s Code of Discipline.

(d) Compliance with Laws & Regulations

Under the Revised Manualon Corporate Governance,a director should keepabreast with industrydevelopments andbusiness trends in order topromote the Company’scompetitiveness. TheCompliance Officermonitors and assessesthe Board’s compliancewith laws and regulations.

Employees are expected to keep abreast with industrydevelopments and business trends in order to promotethe Company’s competitiveness. They are also requiredto comply with existing laws and regulations.

16

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

The Revised Manual onCorporate Governanceprovides that a directorshould keep secure andconfidential all non-publicinformation he may acquireor learn by reason of hisposition as director. Heshould not revealconfidential information tounauthorized personswithout the authority of theBoard

Employees are expected to respect the Company’s tradesecrets and any disclosure thereof to the public is strictlyprohibited Company trade secrets and confidentialinformation shall not be used for personal benefit.

(f) Use of Company Funds,Assets and Information

Pursuant to the RevisedManual on CorporateGovernance, a directorshould keep secure andconfidential all non-publicinformation he mayacquire or learn by reasonof his position as director.He should not revealconfidential informationto unauthorized personswithout the authority ofthe Board.

The Employee Manual provides that no employee shalltake an opportunity that rightly belongs to the Company.It is also inappropriate for an employee to use to use theCompany’s name or his connection with the Company forpersonal or job related purposes. No employee shall usecompany assets for personal use.

For this reason, the Code of Discipline consider thefollowing acts as serious offenses: (i) disclosure, givingaway confidential information or using restricted orclassified Company information without properauthorization; (ii)Unauthorized possession, use or taking/bringing out ofCompany property, records, supplies, equipment, tools,etc.; (iii) unauthorized substitution of Companymaterials, supplies, tools, or equipment with another;and (iv) Stealing, misappropriating, or embezzlingCompany funds or property, those of co-employees andclients, guests and visitors.

(g) Employment &Labor Laws & Policies

The Company keeps theactivities and decisions ofthe Board within itsauthority under thearticles of incorporationand by-laws, and inaccordance with existinglaws, rules andregulations, includingemployment and laborlaws.

All employee-related policies including but not limited tobenefits, work hours and employee discipline areconsolidated in the Employee Manual and the Code ofDiscipline. These policies are compliant with existinglabor laws and regulations. .

(h) Disciplinary action

The By-Laws provides forthe mechanism on theremoval of the anymember of the Board ofDirectors.

The Code of Discipline provides for the procedure on thedisciplinary action of erring employees.

(i) Whistle Blower

There are mechanisms or procedures to review and investigate complaints orinformation by complaining employees and/or “whistle blowers” to ensure that theyare duly protected from retaliation and can fully trust and have confidence in theprocess.

(j) Conflict Resolution

The Company has not formally manualized / operationalized into a policy a conflictresolution system that can amicably settle conflicts or differences between theCompany, its directors, stockholder, employees and third parties. However, theCompany complies with applicable laws, rules and regulations on the matter ofalternative dispute resolution, whenever circumstances warrant its application. Conflicts with respect to breaches of the Code of Discipline are resolved via themechanism provided under the said Code.

17

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

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

The Company implements and monitors compliance with the Code of Conduct primarily through its Human Relations Groupwho regularly coordinates with Legal Department, Internal Audit, business and support units to ensure that erringemployees are properly investigated, undergo due process and subjected to disciplinary action, whenever the circumstanceswarrants its application.

3) Related Party Transactions

(a) Policies and Procedures

Describe the company’s policies and procedures for the review, approval or ratification, monitoring and recording ofrelated party transactions between and among the company and its parent, joint ventures, subsidiaries, associates,affiliates, substantial stockholders, officers and directors, including their spouses, children and dependent siblings andparents and of interlocking director relationships of members of the Board.

Related Party Transactions Policies and Procedures(1) Parent Company The Company and its subsidiaries, entities under common control and

substantial stockholders, in their normal course of business, have certainrelated party transactions (RPT). Any RPT shall be conducted at arms-length and shall follow the general business procedures asspecified and approved by the Board, based on transparency and fairnessin the same way as ordinary transactions undertaken with outsiders,taking into account the best interests of the Company.

(2) Joint Ventures (3) Subsidiaries (4) Entities Under Common Control (5) Substantial Stockholders (6) Officers including spouse/children/siblings/parents

The Employee Manual prohibits an employee to act for the Company inany transaction involving persons or firms where he, his family ordependents have any significant connection or financial interest.

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

The By Laws provides that no person shall qualify to the Board of Direc-tors if he is engaged in any business which competes with or is antago-nistic to that of the Corporation.

In addition, the Revised Corporate Governance Manual provides that, ifan actual or potential conflict of interest may arise, he should fully andimmediately disclose it and should not participate in the decision-makingprocess. A director who has a continuing material conflict of interestshould consider resigning from his position.

(8) Interlocking director relationship of Board of Directors

Interlocking

(b) Conflict of Interest(i) Directors/Officers and 5% or more Shareholders

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

The Company is unaware of any actual or probable conflict of interest to which directors/officers or 5% ormore shareholders may be involved. If a conflict of interest transaction is unavoidable, such transactionshall be conducted at arms-length and shall follow the general business procedures as specified and ap-proved by the Board, based on transparency and fairness in the same way as ordinary transactions under-taken with outsiders, taking into account the best interests of the Company. Any party involved in a con -flict of interest transaction must not take part in the consideration of such transaction.

Details of Conflict of Interest (Actual or Probable)

Name of Director/s Not ApplicableName of Officer/s Name of Significant Shareholders

18

(ii) MechanismDescribe the mechanism laid down to detect, determine and resolve any possible conflict of interest between thecompany and/or its group and their directors, officers and significant shareholders.

Directors/Officers/Significant Shareholders

Company

All Board members are required to make prior disclosure on matters thatmay result to conflict of interest upon being appointed.

The Revised Manual on Corporate Governance and the internal Code ofDiscipline regulate, if not, prohibits transactions by employees that mayresult to potential conflicts of interest.

Group

1) Family, Commercial and Contractual Relations

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

There do not exist, or the Company is unaware of any relation of a family, commercial, contractual or business nature among the holders of significant equity.

Names of Related Significant Shareholders

Type of Relationship Brief Description of the Relationship

Not Applicable

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

There were no commercial, contractual or business transaction during the year or any proposed transaction, between holders of significant equity and the Company.

Names of RelatedSignificant Shareholders

Type of Relationship Brief Description

Not Applicable

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

There is no shareholder agreement that may materially impact on the control, ownership and strategic direction of the Company.

Name of Shareholders% of Capital Stock affected

(Parties)Brief Description of the Transaction

Not Applicable

1) Alternative Dispute Resolution

Describe the alternative dispute resolution system adopted by the company for the last three (3) years in amicably settlingconflicts or differences between the corporation and its stockholders, and the corporation and third parties, includingregulatory authorities.

Alternative Dispute Resolution System

Corporation & Stockholders

The Company encourages and promotes the amicably settlement ofdisputes or differences between the Company and stockholders, thirdparties and regulatory authorities. If the conflict is material orsubstantial in nature, it is referred by the Corporate Secretary to theBoard of Directors .

Corporation & Third Parties Corporation & Regulatory Authorities

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

19

B. BOARD MEETINGS& ATTENDANCE

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

2) Attendance of Directors (for the year 2016)

Board Name Date ofElection

No. of MeetingsHeld during the

year

No. ofMeetingsAttended

%

Chairman Jonathan T. Gotianun 04/29/16 6 6 100.00%

Member Josephine G. Yap 04/29/16 6 5 83.00%

Member Mercedes T. Gotianun 04/29/16 6 5 83.00%

Member Andrew T. Gotianun, Jr. 04/29/16 6 6 100.00%

Member Jesus N. Alcordo 04/29/16 6 5 83.00%

Independent Lamberto U. Ocampo* 04/29/16 3 3 100.00%

Independent Val Antonio B. Suarez 04/29/16 6 6 100.00%

Independent Virginia T. Obcena** 04/29/16 3 3 100.00%

* The term of Mr. Lamberto U. Ocampo as independent director of the Company expired on April 29, 2016. For the periodJanuary 1, 2016 to April 29, 2016, the Board of Directors conducted 3 meetings.** Ms. Virginia T. Obcena was elected independent director of the Company on April 29, 2016. For the period April 29, 2016 to December 31, 2016, the Board of Directors conducted 3 meetings.

3) Do non-executive directors have a separate meeting during the year without the presence of any executive? If yes, how manytimes? No. The non-executive directors do not have a separate meeting.

4) Is the minimum quorum requirement for Board decisions set at two-thirds of board members? Please explain.No, pursuant to its By-Laws, the quorum requirement for a Board decision is a majority of the elected directors.

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

The Company endeavors to provide board papers to its directors three (3) days prior to the board meeting.

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

Yes.

(c) State the policy of the role of the Company Secretary. Does such role include assisting the Chairman in preparing theboard agenda, facilitating training of directors, keeping directors updated regarding any relevant statutory and regulatorychanges, etc?

The Corporate Secretary is an officer of the Company. His loyalty to the mission, vision and specific business objectivesof the corporate entity comes with his duties. Considering his varied functions and duties, he must possessadministrative and interpersonal skills, and if he is not the general counsel, then he must have some legal skills. He mustalso have some financial and accounting skills.

The Corporate Secretary, who should be a Filipino citizen and a resident of the Philippines, shall perform the followingduties and responsibilities:

1. Gather and analyze all documents, records and other information essential to the conduct of his dutiesand responsibilities to the Company.

2. As to agenda, assist the Chairman in preparing the Board agenda, get a complete schedule thereof at leastfor the current year, and put the Board on notice before every meeting.

3. Assist the Board in making business judgment in good faith and in the performance of their responsibilitiesand obligations.

4. Attend all Board meetings and maintain record of the same.5. Ensure that all Board procedures, rules and regulations are strictly followed by themembers. He shall likewise facilitate the training of directors and keep the directors updatedregarding any relevant statutory and regulatory changes, etc.

5Board papers consist of complete and adequate information about the matters to be taken in the board meeting.Information includes the background or explanation on matters brought before the Board, disclosures, budgets,forecasts and internal financial documents.

20

6. Be responsible for the safekeeping and preservation of the integrity of the minutes of themeetings of the Board and its committees, as well as the other official records of the Company.7. Work fairly and objectively within the Board, Management and stockholders.8. Have a working knowledge of the operations of the Company.

(a) Is the company secretary trained in legal, accountancy or company secretarial practices? Yes. Please explain should the

answer be in the negative.

(b) Committee Procedures

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

Yes x No

Committee Details of the proceduresExecutive The director may request the Corporate Secretary for copies of materials to

prepare in advance for the Executive, Audit, Nomination and RemunerationCommittee meetings.

Audit Nomination Remuneration

4) External Advice

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

Procedures Details

Directors may seek external advise when it isbeneficial to the interest of the Company and itssubsidiaries, subject to the policy on confidentialityand transparency.

Among others, external advice on legal and technical matters.

5) Change/s in existing policies

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

The Company continues to update its policies from time to time to keep abreast of changes in the law and theindustry. For this year however, no existing policy was modified or changed.

Existing Policies Changes Reason

Not Applicable

B. REMUNERATION MATTERS

1) Remuneration Process

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

Process CEO Top 4 Highest Paid Management Officers

(1) Fixed remuneration

The Board of Directors, uponrecommendation of theRemuneration Committee,shall fix the salaries andbonuses of all officersincluding the CEO.

The Board of Directors, uponrecommendation of the RemunerationCommittee, shall fix the salaries and bonusesof all officers, including the top 4 highestpaid management officers of the Company.

(2) Variable remuneration

21

(3) Bonus

(4) Per diem allowance

Currently, each directorreceives a per diemallowance of Php 50,000.00per meeting.

Currently, each director receives a per diemallowance of Php 50,000.00 per meeting.

(5) Stock Options and other financial instruments

Currently, the Company doesnot provide for stock options.

Currently, the Company does not provide forstock options.

(6) Others (specify)

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

Disclose the company’s policy on remuneration and the structure of its compensation package. Explain how the compensationof Executive and Non-Executive Directors is calculated.

As provided in the Company’s Information Statement, except for a per diem of PhP 50,000.00 being paid to eachdirector for every meeting attended, there are no other arrangements for the payment of compensation orremuneration to the directors in their capacity as such.

RemunerationPolicy

Structure ofCompensation Packages

How Compensation isCalculated

Executive Directors Not Applicable Not Applicable Not Applicable

Non-Executive Directors Not Applicable Not Applicable Not Applicable

Do stockholders have the opportunity to approve the decision on total remuneration (fees, allowances, benefits-in-kind andother emoluments) of board of directors? No. Provide details for the last three (3) years.

Remuneration SchemeDate of

Stockholders’ Approval

Not Applicable Not Applicable

3) Aggregate Remuneration

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

As previously explained, except for a per diem of Php 50,000.00 being paid to each director for every meetingattended, there are no other arrangements for the payment of compensation or remuneration to the directors intheir capacity as such. The Revised Manual on Corporate Governance however provides that remuneration paid todirectors and officers shall be at a level sufficient to be able to attract and retain the services of qualified andcompetent directors and officers.

Remuneration ItemExecutiveDirectors

Non-ExecutiveDirectors (other than

independentdirectors)

Independent Directors

(a) Fixed Remuneration Not Applicable

(b) Variable Remuneration Not Applicable

(c) Per diem Allowance Php 50,000.00

/ meeting

(d) Bonuses Not Applicable

(e) Stock Options and/or other financial instruments

Not Applicable

Not Applicable Not Applicable

(f) Others (Specify)

22

Total

During the annual meeting of the stockholders held on April 29, 2016, no action was taken with respect to anybonus, profit sharing or other compensation plan, contract or arrangement, and pension or retirement plan, inwhich any director (whether executive, non-executive or independent) of the Company will participate.

Other Benefits Executive DirectorsNon-Executive Director

(other than independentdirectors)

IndependentDirectors

1) Advances Not Applicable Not Applicable Not Applicable

2) Credit granted NA NA NA

3) Pension Plan/s Contributions NA NA NA

(d) Pension Plans, Obligations incurred

NA NA NA

(e) Life Insurance Premium NA NA NA

(f) Hospitalization Plan NA NA NA

(g) Car Plan NA NA NA

(h) Others (Specify)

Total

1) Stock Rights, Options and Warrants

(a) Board of Directors

Complete the following table, on the members of the company’s Board of Directors who own or are entitled to stockrights, options or warrants over the company’s shares:

The Company does not have an existing stock option plan.

Director’s NameNumber of Direct

Option/Rights/Warrants

Number of IndirectOption/Rights/

Warrants

Number ofEquivalent

Shares

Total % from CapitalStock

Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

(b) Amendments of Incentive Programs

Indicate any amendments and discontinuation of any incentive programs introduced, including the criteria used in thecreation of the program. Disclose whether these are subject to approval during the Annual Stockholders’ Meeting: There were no amendments and/or discontinuation of any incentive program.

Incentive Program AmendmentsDate of

Stockholders’ Approval

Not Applicable Not Applicable Not Applicable

1) Remuneration of Management

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

23

(*) Since some of these senior officers also render services to subsidiaries, a portion of this amount has been charged/allocated by the Company to the relevant subsidiary/ies.

B. BOARD COMMITTEES

1) Number of Members, Functions and Responsibilities

Provide details on the number of members of each committee, its functions, key responsibilities and the power/authoritydelegated to it by the Board:

Committee

No. of Members CommitteeCharter

Functions/Key Responsibilities PowerExecutiveDirector

(ED)

Non-executiv

eDirector

(NED)

Independen

tDirect

or(ID)

Executive

2 4

0 The functions, duties, and responsibilities ofthe Board of Directors may be delegated, tothe fullest extent permitted by law, to anExecutive Committee to be established by theBoard of Directors.

The Executive Committee may act on suchspecific matters within the competence of theBoard of Directors as may be delegated to itby a majority of the Board of Directors, exceptwith respect to: (i) approval of any action forwhich shareholders’ approval is also required;(ii) the filing of vacancies in the Board ofDirectors; (iii) the amendment or repeal ofthese By-Laws or the adoption of new By-Laws; (iv) amendment or repeal of anyresolution of the Board of Directors which byits express terms is not so amendable orrepealable; and (v) the distribution of cashdividends to shareholders.

The Executive Committee exercisespowers in the management of thebusiness and affairs of theCompany as may be delegated to itby the Board of Directors, inaccordance with Article V of the By-Laws.

Audit 0 2

2

The Revised Manual of Corporate Governanceestablishes the functions of the AuditCommittee as follows:

1 Assist the Board in the performance of itsoversight responsibility for the financialreporting process, system of internal control,audit process, and monitoring of compliancewith applicable laws, rules and regulations.

2. Provide oversight over Management’sactivities in managing credit, market, liquidity,operational, legal and other risks of theCompany.3. Perform oversight functions over theCompany’s internal and external auditors.

The Audit Committee exercisespowers delegated to it by theBoard of Directors, in accordancewith Article V of the By-Laws. TheAudit Committee has the powerand authority to carry out itsfunctions under the RevisedManual on Corporate Governance.

24

Year Salary Bonus

Other AnnualCompensation TOTALName and Principal Position

Josephine G. Yap (President /CEO) Jonathan T. Gotianun (Chairman) Jesus N. Alcordo (Director) Eleuterio D. Coronel (EVP/COO) Daniel Ang Tan Chai (SVP/Deputy CFO)

CEO and top four (4) highest compensatedofficers

2016-Estimated P54.7M P6.7M - P61.4M2015 P52.1M P6.4M - P58.5M2014 P33.0M P5.3M - P38.3M

All officers and directors as a group unnamed

2016-Estimated P68.3M P8.5M - P76.8M2015 P65.1M P8.1M - P73.2M2014 P44.5M P7.1M - P51.6M

3. Review and approve audit scope andfrequency, and the annual internal audit plan.4. Discuss with the external auditor before theaudit commences the nature and scope of theaudit, and ensure coordination where morethan one (1) audit firm is involved.5. Organize an internal audit department andconsider the appointment of an independentauditor and the terms and conditions of itsengagement and removal.6. Monitor and evaluate the adequacy andeffectiveness of the Company’s internalcontrol system, including financial reportingcontrol and information technology security.7. Review the reports submitted by theinternal and external auditors.8. Review the quarterly, half-year and annualfinancial statements before submission to theBoard with particular focus on the followingmatters:a. Any change/s in accounting policies andpracticesb. Major judgmental areas c. Significant adjustments resulting from theauditd. Going concern assumptionse. Compliance with accounting standards

f. Compliance with tax, legal and regulatoryrequirements9. Coordinate, monitor and facilitatecompliance with existing laws, rules andregulations.10. Evaluate and determine non-audit workby external and keep under review the non-audit fees paid to the external auditor both inrelation to their significance to the auditorand in relation to the Company’s totalexpenditure on consultancy. The non-auditwork should be disclosed in the AnnualReport.11. Establish and identify the reporting line ofthe Internal Auditor to enable him to properlyfulfill his duties and responsibilities. The AuditCommittee shall ensure that, in theperformance of the work of the internalauditor, he shall be free from interference byoutside parties.

Nomination

2 1 1

The Revised Manual on CorporateGovernance provides for the functions of theNomination Committee which is to review andevaluate the qualifications (anddisqualifications) of all persons nominated tothe Board and other appointments thatrequire Board approval, and to assess theeffectiveness of the Board’s process andprocedures in the election or replacement ofdirectors.

The Nomination Committeeexercises powers delegated to it bythe Board of Directors, inaccordance with Article V of the By-Laws. Under the Revised Manualon Corporate Governance, it hasthe power and authority to reviewand evaluate nominees to theBoard.

Remuneration

2 2 1

Establish a formal and transparent procedurefor developing a policy on remuneration ofdirectors and officers to ensure that theircompensation is consistent with theCompany’s culture, strategy and businessenvironment in which it operates.

The Remuneration Committeeexercises powers delegated to it bythe Board of Directors, inaccordance with Article V of the By-Laws. Under the Revised Manualon Corporate Governance, theRemuneration Committee has beenauthorized to develop theremuneration of directors andofficers.

Others (specify)

1

2) Committee Members(a) Executive Committee

25

Office NameDate of

Appointment

No. ofMeetings

Held


%

Length ofService in

theCommitte

e (*)

Chairman Jonathan T. Gotianun 04/29/2016 7 5 71.00% 1

Member (ED) Josephine G. Yap 04/29/16 7 7 100.00% 1

Member (NED)Mercedes T. Gotianun

04/29/16 7 5 71.00%

Member (NED) Andrew T. Gotianun, Jr. 04/29/16 7 6 86.00%

111

Member (ID)Member (ED) Michael Edward T. Gotianun 04/29/16 7 5 71.00% 1Member (NED) Jesus N. Alcordo** 04/29/16 6 5 86.00%

(*) The Committee members are elected annually.(**) Mr. Jesus N. Alcordo was appointed as a member of the Executive Committee on April 29, 2016. For the period April 29, 2016to December 31, 2016, the Executive Committee conducted 6 meetings.

(b) Audit Committee

Office NameDate of

Appointment

No. ofMeetings

Held


%Length of

Service in theCommittee (*)

Chairman (ID) Virginia T. Obcena** 04/29/16 2** 2 100.00% 1

Member (ED) Josephine G. Yap** 04/29/16 2** 1 50.00% 1

Member (NED)

Member (NED) Jonathan T. Gotianun 04/29/16 3 2 67.00% 1

Member (ID) Val Antonio B. Suarez 04/29/16 3 3 100.00% 1

(*) The Committee members are elected annually.(**) Ms. Virginia T. Obcena and Ms. Josephine G. Yap were appointed members of the Audit Committee on April 29, 2016.

For the period April 29, 2016 to December 31, 2016, the Audit Committee conducted 2 meetings.

Disclose the profile or qualifications of the Audit Committee members.

Consistent with the Revised Manual on Corporate Governance, the Audit Committee is composed of at leastthree (3) directors, who shall preferably have accounting and finance backgrounds, one of whom shall be anindependent director and another with audit experience. The chair of the Audit Committee should be anindependent director.

Ms. Virginia T. Obcena, 68, Filipino, is presently an independent director, Chair of the AuditCommittee and member of the Nominations Committee of Capital Markets Integrity Corporation(CMIC), an independent unit of the Philippine Stock Exchange for the audit, surveillance andenforcement of the Securities Law, rules and regulations of the Securities and Exchange Commission,the Philippine Stock Exchange, CMIC and other relevant regulators on the trading participants,principally the stock brokers. She is also a director and nominal shareholder in 168 DevelopmentCorporation, and member of the Panel of Conciliators of the International Centre for Settlement ofInvestment Disputes (ICSID) of the World Bank. She was a former partner of Sycip Gorres Velayo &Co. and she also worked in the Accounting and Auditing Standards Group of Deloitte and Touche,New York. She obtained her Bachelor of Science in Business Administration degree, Magna cumLaude, in the University of the East and her Master in Business Administration degree in theUniversity of the Philippines. She was first elected as an independent director of the Company onApril 29, 2016.

Atty. Val Antonio B. Suarez, 57, Filipino, is an independent director of FDC, having been first elected onMay 30, 2014. He is the Managing Partner of the Suarez & Reyes Law Offices and was the former

26

President and Chief Executive Officer of The Philippine Stock Exchange. Mr. Suarez is also anindependent director of Lepanto Consolidated Mining Company, a publicly-listed company, and amember of the Integrated Bar of the Philippines (Makati Chapter) and New York Bar. He obtained hisBachelor of Laws degree from the Ateneo de Manila University Law School and a Master of Lawsdegree from Georgetown University Law Center.

Mr. Jonathan T. Gotianun, 62, Filipino, was first elected as Director of FDC on July 9, 1993. He alsoserves as Chairman of the Board and Director of FLI and EWBC, both publicly-listed compnaies. He isthe President of Davao Sugar Central Co., Inc. and Cotabato Sugar Central Co., Inc., and a Director andChairman of the Executive Committee of FDCUI and some of its subsidiary power companies. Heserved as Director and Senior Vice President of Family Bank & Trust Co. (“Family Bank”) until 1984. Heobtained his Master’s Degree in Business Administration from Northwestern University in 1976. Hehas been a Director of the Company for more than five (5) years.

Mrs. Josephine G. Yap, 60, Filipino, was first elected as Director of FDC on March 30, 1990. She is alsoa Director, President and Chief Executive Officer of FLI, President of Filinvest Alabang, Inc. (“FAI”), anda Director in FDCUI. She is currently a Director in three (3) publicly-listed companies: FDC, FLI andEWBC. She obtained her Master’s Degree in Business Administration from the University of Chicago in1977. She has been President of the Company since 2000.

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

Conformably with the Revised Manual on Corporate Governance, the Audit Committee performs oversightfunctions over the Company’s external auditor. The Committee also ensures that the internal and external auditorsact independently from each other, and that both auditors are given unrestricted access to all records, propertiesand personnel to enable them to perform their respective audit functions.

(c) Nomination Committee

Office NameDate of

Appointment

No. ofMeetings

Held


%

Length ofService in

theCommittee

(*)Chairman Mercedes T. Gotianun 04/29/16 1 1 100% 1 yearMember (ED) Josephine G. Yap 04/29/16 1 1 100% 1 yearMember (NED) Jonathan T. Gotianun** 04/29/16 NA NA NA 1 yearMember (ID) Val Antonio B. Suarez** 04/29/16 NA NA NA 1 yearMember (Ex officio) Rizalangela L. Reyes 04/29/16 1 1 100% 1 year

(*) The Committee members are elected annually.(**) Mr. Jonathan T. Gotianun and Atty. Val Antonio B. Suarez were appointed members of the Nomination Committee on April 29, 2016. For the period April 29, 2016 to December 31, 2016, the Nomination Committee did not conduct any meeting.

(d) Remuneration Committee

Office NameDate of

Appointment

No. ofMeetings

Held

No. ofMeeting

sAttende

d

%

Length ofService in

theCommittee

(*)Chairman Mercedes T. Gotianun 04/29/16 1 1 100% 1 year Member (ED) Josephine G. Yap 04/29/16 1 1 100% 1 yearMember (NED) Jonathan T. Gotianun 04/29/16 1 1 100% 1 yearMember (ID) Val Antonio B. Suarez 04/29/16 NA NA NA 1 year(*) The Committee members are elected annually.(**) Atty. Val Antonio B. Suarez was appointed as a member of the Remuneration Committee on April 29, 2016. For the period April29, 2016 to December 31, 2016, the Remuneration Committee did not conduct any meeting.

(e) Others (Specify)

27

Provide the same information on all other committees constituted by the Board of Directors: Not Applicable

Office NameDate of

Appointment

No. ofMeetings

Held


%

Length ofService in

theCommittee

Chairman Not ApplicableMember (ED)Member (NED)Member (ID)Member

3) Changes in Committee Members

Indicate any changes in committee membership that occurred during the year (2014) and the reason for the changes:

Name of Committee Name Reason

Executive Not Applicable

Audit Not Applicable

Nomination Not Applicable

Remuneration Not Applicable

Others (specify)

4) Work Done and Issues Addressed

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

Name of Committee Work Done Issues Addressed

Executive The Executive Committee adoptedresolutions and acted on the businessaffairs of the Corporation which havebeen delegated to it by the Board ofDirectors.

The Executive Committee has addressedall business and operational issues raisedby Management.

Audit

The Audit Committee was able to carryout its functions and responsibilitiesunder the Revised Manual on CorporateGovernance.

The Audit Committee has addressedissues relative to its functions.

Nomination

The Nomination Committee was able tocarry out its functions andresponsibilities under the RevisedManual on Corporate Governance.

The Nomination Committee hasaddressed issues relative to its functions.

Remuneration

The Remuneration Committee was ableto carry out its functions andresponsibilities under the RevisedManual on Corporate Governance.

The Remuneration Committee hasaddressed issues relative to its functions.

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Others (specify)

5) Committee Program

Provide a list of programs that each committee plans to undertake to address relevant issues in the improvement orenforcement of effective governance for the coming year.

The committees plan to embark on developing programs to improve and/or enforce effective governance for the coming year.

Name of Committee Planned Programs Issues to be Addressed

Executive

Audit

Nomination

Remuneration

Others (specify)

B. RISK MANAGEMENT SYSTEM

1) Disclose the following:

(a) Overall risk management philosophy of the company;

The Company, as a holding company, has adopted a risk management framework that identifies key risk areas relating to theGroup’s real estate, banking, sugar and power generation businesses.

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

adequacy thereof;

The directors of the respective companies within the Group have reviewed the effectiveness of their respective riskmanagement systems and the adequacy thereof.

(c) Period covered by the review; 2012 however with respect to the Group’s banking business, the review covered the Bank’srisk and capital management performance for the year 2012, plus a 5-year forward looking view.

(d) How often the risk management system is reviewed and the directors’ criteria for assessing its effectiveness andThe Group’s risk management system is reviewed yearly.

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

2) Risk Policy

(a) Company

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

As the holding company of the Filinvest Group, the Company oversees the risk management system of the Group.Please refer to the succeeding item for an explanation of the Group’s risk management policy.

Risk Exposure Risk Management Policy Objective

Please refer to ourexplanation in thesucceeding item (GroupRisk Exposure)

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(b) GroupGive a general description of the Group’s risk management policy, setting out and assessing the risk/s covered by thesystem (ranked according to priority), along with the objective behind the policy for each kind of risk:

The Group has adopted a risk management framework that identifies the key risk areas relating to the Group’sreal estate, banking, sugar and power generation businesses. The Board of Directors of the respective compa-nies regularly review their risk management system to ensure that the system is properly and efficiently oper-ating.

Risk Exposure Risk Management Policy Objective

The Group’s bankingbusiness is subject tocredit, market, foreigncurrency, operational andliquidity risk which mayhave an adverse effect onits credit ratings and itscost of funds.

The Group’s banking business has aRisk Management unit whichidentifies, measures and monitors thecredit, market, liquidity andoperational risks that may arise fromits business activities. It also ensuresthat all units adhere strictly to thepolicies and procedures which areestablished to mitigate or managethese risks. In coordination with therespective business units, it is alsoresponsible for risk policydevelopment, risk analysis,implementation of risk methodologiesand risk reporting to seniormanagement and the various riskcommittees. The Bank’s Board ofDirectors, through its RiskManagement Committee oversees itsrisk management activities. The RiskManagement Committee is alsoresponsible for periodically reviewingrisk management policies andprocedures relating to credit, market,liquidity and operational risks.

The Group’s banking business has aRisk of its loan portfolio bycontinuing to (i) improve its creditpolicies and credit approvalprocedures, (ii) implement riskmanagement control tools, including,among others, a centralized creditmanagement information system thatallows it to standardize credit riskdetection, quantification andmanagement and (iii) strengtheninternal controls and legal complianceby standardizing internal policies andprocedures in accordance with legaland regulatory requirements with aview to establish a comprehensiveinternal control system.N.B. For more information on theBank’s risk policy, procedures, riskassessment monitoring andmeasurement, the Commission mayrefer to the Bank’s Annual CorporateGovernance Report.

The Group’s banking business seeks toinstitute an efficient and appropriaterisk management process that can beevaluated, monitored, and managedfor key risks. The Bank is broadly directed by thefollowing guidelines:

- align risk appetite with its busines plan and strategies

- proactive risk management

- reduce surprises of unexpected losses

-identify and manage all material risks

-optimize use of capital

The Group’s real estate,sugar, hotel and powergenerations businesses aresubject to interest, liquidity,credit and market whichmay have an adverse effect

Interest Rate Risk Policy. The Group’sexposure to the risk for changes inmarket interest rates relates primarilyto the Group’s long-term debtobligations with a floating interestrate. The Group’s interest rate

The Group’s real estate,sugar, hotel and power generationsbusinesses seeks to institute anefficient and appropriate riskmanagement process that can be

30

to the business, to wit:

The Group’spower business faces risksrelating to its future powergenerationprojects, including risksrelating to project cost,completion time frameand development rights. The Group’s realestate business is exposedto risks associated withtheir in-house financingproject including the risk ofcustomer default,operation of theirinvestment properties andthe development of theiroffice space and retailleasing business, etc. The Group’ssugar business is exposedto risks, including the riskof price fluctuations,adverse weatherconditions and pricecompetition.

exposure management policy centerson reducing the Group’s overallinterest expense and exposure tochanges in interest rates. The

Group’s policy is to manage itsinterest cost using a mix of fixedfloating interest-rate debts.

Liquidity Risk Policy. As part of itsliquidity management, the Groupregularly evaluates its projected andactual cash flows. It also continuouslyassesses conditions in the financialmarkets for opportunities to pursuefund raising activities which mayinclude bank loans and capital marketissues.

Credit Risk Policy. It is the Group’spolicy that buyers who wish to availthe in-house financing scheme aresubject to credit verificationprocedures. Receivable balances arebeing monitored on a regular basisand subjected to appropriate actionsto manage credit risk. With respect tocredit risk arising from the otherfinancial assets of the Group, whichcomprise cash and cash equivalents,AFS financial assets and HTMinvestments, the Group’s exposure tocredit risk arises from default of thecounterparty, with a maximumexposure equal to the carryingamount of these instruments.

evaluated, monitored, and managedfor key risks.

With regard to the Group’s financial risk management, the main objectivesare as follows:· To identify and monitor such risks on an ongoing basis;· To minimize and mitigate such risks; andTo provide a degree of certainty aboutcosts.

The Group seeks to manage its liquid-ity profile to be able to finance capitalexpenditures and service maturing debts.

The Group’s fundingrequirements are designed to keepan appropriate balance betweenequity and debt, to give financingflexibility while continuouslyenhancing the Group’s businesses.

(a) Minority Shareholders

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

Risk to Minority Shareholders

The exercise by the majority or controlling shareholders of their voting power prevails over the votes ofminority shareholders. This is the risk that minority shareholders would have to live with. The Companyhowever respects the rights of minority shareholders by inviting them to the Annual Shareholders Meeting andallowing them to ask questions relating to the Company’s business operations. Minority shareholders are alsogiven the opportunity to propose or nominate qualified persons for selection as directors.

1) Control System Set Up

(a) Company

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

Please refer to explanation in F (2)(c)

Risk ExposureRisk Assessment

(Monitoring and MeasurementProcess)

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

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(b) Group

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

Risk ExposureRisk Assessment

(Monitoring and MeasurementProcess)

Risk Management and Control(Structures, Procedures, Actions

Taken)Please refer to our reply in F (2) (b)

(c) Committee

Identify the committee or any other body of corporate governance in charge of laying down and supervising these controlmechanisms, and give details of its functions:

The Company's risk management officer is Ms. Virginia T. Cayanga.

Committee/Unit Control Mechanism Details of its Functions

Risk Management Committee (forthe Group’s Banking Business)

Please refer to our explanation inthe preceding item, F (2)(c)

Please refer to our explanation inthe preceding item, F (2)(c)

B. INTERNAL AUDIT AND CONTROL

1) Internal Control System

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

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

The internal control system is defined through the formulation of Operating Manual Systems (OMS) for the various operatingsections of the company. OMS for a particular section is formulated through the review of the business processes within thesection by a team normally comprised of the Systems Department, the personnel operating within the section andrepresentatives from all other affected units. A draft of the OMS is prepared by the System Department, who then securesthe concurrence of all team members before submission to the President for final approval.

(b) A statement that the directors have reviewed the effectiveness of the internal control system and whether theyconsider them effective and adequate;(c) Period covered by the review;(d) How often internal controls are reviewed and the directors’ criteria for assessing the effectiveness of the internalcontrol system; and

External Auditors – Review of internal controls is part of an audit engagement and the results are presented to theAudit Committee after the release of the audited financial statements.Internal Auditors – Review of specific internal controls is done regularly based on an annual plan prepared at thebeginning of the year. Additional reviews are made based on the requests of Management and other Departmentsduring the year. Results are presented in audit reports addressed to the President.

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

2) Internal Audit

(a) Role, Scope and Internal Audit Function

Give a general description of the role, scope of internal audit work and other details of the internal audit function.

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Role Scope

Indicate whether In-house or Outsource

Internal AuditFunction

Name of ChiefInternal

Auditor/AuditingFirm

Reporting process

Provide Managementwith regular appraisal ofthe internal controlswithin the Company

Includes audit reviewof financial records,compliance to policies& procedures andevaluation of theefficiencies of theoperationalprocesses.

In-house

Edgardo C.Raymundo

Audit reports areaddressed to thePresident

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

The external auditor to be appointed need to be approved by the Audit Committee while the appointment and/orremoval of Internal Auditors is done through the standard Company hiring procedures.

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

The internal auditors are reporting directly to the Audit Committee and the President. The internal auditors are given afree hand in determining the auditable units and in prioritizing/scheduling the audit reviews subject to the final approvalof the President/Committee.

(d) Resignation, Re-assignment and Reasons

Disclose any resignation/s or re-assignment of the internal audit staff (including those employed by the third-party audit-ing firm)and the reason/s for them.

Name of Audit Staff Reason

Ms. Maria Isabel Trinidad Transferred to a Supervisory position in Project Finance Dept.

Ms. Rowena Labrador Transferred to a Supervisory position in Accounting Department

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

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

Progress Against Plans Substantially Complied With

Issues61. Unidentified buyers’ foreign remittances2. Recoverability of Receivables from Homeowners’Association

Findings7Unrecorded bank reconciling items Discrepancybetween General and Subsidiary Ledgers of theInstallment Contract Receivables

Examination Trends

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

1) Preparation of an audit plan inclusive of a timeline and milestones;2) Conduct of examination based on the plan;3) Evaluation of the progress in the implementation of the plan;4) Documentation of issues and findings as a result of the examination;5) Determination of the pervasive issues and findings (“examination trends”) based on single year result and/or

year-to-year results;6) Conduct of the foregoing procedures on a regular basis.]

6“Issues” are compliance matters that arise from adopting different interpretations.

7“Findings” are those with concrete basis under the company’s policies and rules.

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(a) Audit Control Policies and ProceduresDisclose all internal audit controls, policies and procedures that have been established by the company and the result of anassessment as to whether the established controls, policies and procedures have been implemented under the column“Implementation.”

Policies & Procedures Implementation

1. Details of foreign remittances should be requiredfrom the buyers and remitting banks.

Continuously educate the buyers on the importance ofdeclaring the details of the remittances. Coordinatewith the banks in requiring the buyers to indicatecomplete details.

2. Regularly monitor receivables from HOA to ensurethat the outstanding balance as of reporting date isrecoverable.

No allowance for doubtful accounts has been set up yetsince the balance may be offset from our outstandingdues to HOA. Reconciliation will be done uponturnover.

3. Reconciling bank recon items should be reviewed forappropriate adjustment in the books.

Subsequent adjustments in the year-end balances havealready been made. Continuing efforts are beingexerted to clear the remaining balances.

4. Reconciliation of the ICR general and subsidiaryledgers should be regularly done.

The discrepancy is mostly due to upload issues from theold computer system to the new one. Review of theupload process is still on-going.

(b) Mechanism and Safeguards

State the mechanism established by the company to safeguard the independence of the auditors, financial analysts,investment banks and rating agencies (example, restrictions on trading in the company’s shares and imposition of internalapproval procedures for these transactions, limitation on the non-audit services that an external auditor may provide tothe company):

Auditors(Internal and External)

Financial Analysts, Investment Banks & Rating Agencies

The Revised Manual onCorporate Governanceprovides that : (i) shallnot, at the same time,provide internal auditservices to the Company.Non-audit work nay begiven to the externalauditor, provided it doesnot conflict with hisduties as an independentauditor, or not pose as athreat to hisindependence; and (ii) theexternal auditor shouldbe rotated or changesevery five (5) years orearlier, or the signingpartner of the externalauditing firm assigned tothe Company, should bechanged with the samefrequency;

FLI only hires reputable financial advisors, investment banks and rating agencies thatare ranked among the top in the industry. These firms must be accredited andviewed with high-esteem by both government and non-government financialregulatory bodies/authorities such as the SEC, BSP and the PSE.None of the people engaged in providing financial services to FLI, directly orindirectly, has dealings with FLI or has transactions involving FLI or connected to oraffiliated with individuals under FLI’s employ or doing business with FLI. Hiring of financial analysts, investment banks and rating agencies are subject tocareful scrutiny by management and subject to final Board approval.Work process analysts, investment banks and rating agencies are directly supervised/ handled by senior officers with broad experience and understanding of finance and related work.

(h) State the officers (preferably the Chairman and the CEO) who will have to attest to the company’s full compliance with theSEC Code of Corporate Governance. Such confirmation must state that all directors, officers and employees of the companyhave been given proper instruction on their respective duties as mandated by the Code and that internal mechanisms are inplace to ensure that compliance. The CEO attests to the Company’s full compliance with the SEC Code of CorporateGovernance. The CEO confirms that all directors, officers and employees of the Company have been given proper instructionon their respective duties as mandated by the Code and that internal mechanisms are in place to ensure that compliance.

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B. ROLE OF STAKEHOLDERS

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

Policy & Activities

Customers' welfare

As a holding company, the Company has no policy or activities on customers’ wel-fare. However, the Company’s banking and real estate businesses have establishedcustomer service units tasked to address customer complaints or suggestions, con-duct customer satisfaction surveys and communicate with customers via effectivechannels.

Supplier/contractor selection practice Contractors and suppliers are subject to the Company’s rules on pre-qualificationand bidding.

Environmentally friendly value-chain

The Company follows the policy of environmental conservation, in parallel witheconomic and social efforts, in line with its management strategy. The main focusis to reduce operating expenses through energy conservation and paper recy-cling.

Community interactionPlease refer to the relevant portion of this Report on the Group’s Corporate SocialResponsibility policy and activities.

Anti-corruption programmes and pro-cedures

The Company’s procedures for handling employee complaints, including thoseconcerning illegal and unethical behavior are embodied in the Employee Manualand Code of Discipline.

Safeguarding creditors' rights

The Company respects agreements with creditors, manages loans according tolending objectives, ensure timely repayment of loans and interests, honor loancovenants and conditions and competently operate the business to assure credi-tors about the Company’s financial standing and loan repayment capabilities.

2) Does the company have a separate corporate responsibility (CR) report/section or sustainability report/section? No.

3) Performance-enhancing mechanisms for employee participation.

(B.3.a) What are the company’s policy for its employees’ safety, health, and welfare?

The Company’s employee’s safety, health and welfare policies are embodied in a Safety Manual which is madeavailable to new employees. This Manual includes policies on occupational, safety and health programs, safety &discipline, drugs and alcohol-free workplace and sexual harassment, as well as emergency action plan, fire safety& prevention and incident reporting & investigation mechanisms.

Attached hereto are copies of the following manuals of the Company:

i. Safety Manual;

ii. Emergency Procedures and Individual Security Practices Handbook; and

iii. Emergency Disaster Plan.

(B.3.b) Show data relating to health, safety and welfare of its employees.

The Company maintains data relating to health, safety and welfare of its employees.

(B.3.c) State the company’s training and development programmes for its employees. Show the data.

The Company’s employees may avail of external training programmes or seminars relevant to the performance of theirduties. The employees may also avail of seminars conducted by the Company’s subsidiaries which includes theorientation of new employees, Work, Attitude and Value Enhancement (WAVE), and skills improvement to improvework efficiency.

Attached hereto are following:

i. Trainings conducted by the Company for the year 2014; and

ii. Description of the trainings conducted by the Company.

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(B.3.d) State the company’s reward/compensation policy that accounts for the performance of the company beyondshort-term financial measures.

The Company conducts a yearly performance appraisal of its employees and grants merit increases depending on theresults of their performance appraisal.

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

The Company’s procedures for handling employee complaints concerning illegal and unethical behavior are embodied in theEmployee Manual and Code of Discipline. The Company’s Human Resources Department is responsible for reviewing andinvestigating complaints or information, and determines procedures to deal with such situations with transparency and ac -countability to ensure that complaining employees or “whistleblowers” are duly protected from retaliation and can fullytrust and have confidence in the process.

C. DISCLOSURE AND TRANSPARENCY

1) Ownership Structure (As of September 30, 2016)

(C.1.a) Holding 5% shareholding or more

Shareholder Number of Shares Percent Beneficial Owner

ALG HoldingsCorporation

8219373035 (Direct)61274417 (Indirect)

88.21%0.66%

Stockholders are thebeneficial owners

PCD NomineeCorporation(Filipino)

892571458 9.58% No single shareholderbeneficially owns at least 5%of the total shares

Name of Senior ManagementNumber of Direct

shares

Number ofIndirect shares / Through(name of record owner)

% ofCapitalStock

No senior officer holds 5%shareholding in the Company

TOTAL

2) Does the Annual Report disclose the following:

Key risks Yes

Corporate objectives Yes

Financial performance indicators Yes

Non-financial performance indicators Yes

Dividend policy Yes

Details of whistle-blowing policy No

Biographical details (at least age, qualifications, date of first appointment, relevant experience, and any other directorships of listed companies) of directors/commissioners

Yes

Training and/or continuing education programme attended by each director/commissioner Yes

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

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

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

Should the Annual Report not disclose any of the above, please indicate the reason for the non-disclosure.

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3) External Auditor’s fee (for the year 2015)

Name of auditor Audit Fee Non-audit Fee

SGV & Company P 7.5 Million Not applicable

4) Medium of Communication

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

The Company utilizes various forms of communications to effectively reach out to the public. As a logical starting point,the Company uses the website which contains information on the historical background of the Company, its major share-holders and the relevant qualifications of its key operating officers, financial statements and such relevant financial infoon dividend declarations, the company's annual report etc., and all of these are constantly updated to reflect the cur-rent data on the Company. In addition, the Company may conduct one on one meetings, make conference calls, sendsemails as well as do office visits as may be requested by minority stockholders, potential investors, investment researchpersonnel and the investing public in general. The company likewise issues press releases and conducts periodic briefingson significant developments of the Company.

5) Date of release of audited financial report: February 23, 2016 for calendar year 2015

6) Company Website

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

Business operations Yes

Financial statements/reports (current and prior years) Yes

Materials provided in briefings to analysts and media Yes

Shareholding structure Yes

Group corporate structure Yes

Downloadable annual report Yes

Notice of AGM and/or EGM Yes

Company's constitution (company's by-laws, memorandum and articles of association) Yes

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

7) Disclosure of RPT

RPT Relationship Nature Value

The Company and itssubsidiaries in their normalcourse of business, havecertain related partytransactions (RPTs). RPTsamong members of theGroup are disclosedunder the Note 23 of theNotes to the AuditedConsolidated FinancialStatements for the yearended December 31, 2015,a copy of which was filedwith the Commission.

When RPTs are involved, what processes are in place to address them in the manner that will safeguard the interest of thecompany and in particular of its minority shareholders and other stakeholders?

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D. RIGHTS OF STOCKHOLDERS

1) Right to participate effectively in and vote in Annual/Special Stockholders’ Meetings

(a) Quorum

Give details on the quorum required to convene the Annual/Special Stockholders’ Meeting as set forth in its By-laws.

The quorum required for the Stockholders Meeting, as laid down in the Company By Laws, is the same as that laid down in the Corporation Code.

Quorum Required Majority

(b) System Used to Approve Corporate Acts

Explain the system used to approve corporate acts.

System UsedConsistent with Company By Laws, all election and questions are decided by theplurality of vote of stockholders present in person or by proxy.

DescriptionThe vote on a question need not be by ballot unless required by law or demanded bythe stockholder. On a vote by ballot, such ballot shall be signed by the stockholdervoting in his name or by his proxy, and shall state the number of shares voted by him.

(c) Stockholders’ Rights

List any Stockholders’ Rights concerning Annual/Special Stockholders’ Meeting that differ from those laid down in theCorporation Code.

Stockholders’ Rights underThe Corporation Code

Stockholders’ Rights not inThe Corporation Code

There are no Shareholder’s rights with regard toshareholders meetings which are differentfrom those provided under the CorporationCode. Stockholders’ rights include the rightto vote, right to inspect corporate books andrecords, right to information, right todividends, appraisal right, right to approvecertain corporate acts, right to adopt andamend or repeal the by-laws or adopt newby-laws, right to compel the calling ofmeetings when for any cause there is noauthorized person to call such a meeting,right to issuance of certificate or stocks orother evidence of stock ownership and beregistered as a stockholder, etc.

Dividends

Declaration Date Record Date Payment Date

May 25, 2012 June 22, 2012 July 16, 2012

May 31, 2013 June 27, 2013 July 17, 2013

05/30/14 06/26/14 07/16/14

05/15/15 06/10/15 07/02/15

04/29/16 05/27/16 06/21/16

(d) Stockholders’ Participation

1. State, if any, the measures adopted to promote stockholder participation in the Annual/Special Stockholders’ Meeting, in-cluding the procedure on how stockholders and other parties interested may communicate directly with the Chairman of

38

the Board, individual directors or board committees. Include in the discussion the steps the Board has taken to solicit andunderstand the views of the stockholders as well as procedures for putting forward proposals at stockholders’ meetings.

Measures Adopted Communication Procedure

Stockholders are allowed to vote and ask questionsduring the Annual/Special Stockholders meetingregardless of the number of share they own.

The Notice of the Stockholders’ Meeting & InformationStatement are distributed to stockholders of record inCD format and printed copies are given to stockholdersprior to the conduct of the annual shareholders’meeting.

Stockholders may write the Company for theirconcerns with respect to the Company’s operations.

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

The Company’s By-Laws may be amended or repeated by the affirmative vote of at least a majority of the Board ofDirectors and the stockholders representing a majority of the outstanding capital stock at any stockholders meeting calledfor that purpose. However, the power to amend, modify, repeal or adopt new by-laws may be delegated to the Board ofDirectors by the affirmative vote of stockholders representing not less than two-thirds of the outstanding capital stockprovided, however, that such delegation of powers to the Board of Directors to amend, repeal or adopt new by-laws maybe revoked only by the vote of the stockholders representing a majority of the outstanding capital stock at a regular orspecial meeting. Transfer of all or substantially all assets, which in effect results in the sale of the company shall complywith the requirements under the Corporation Code.

3. Does the company observe a minimum of 21 business days for giving out of notices to the AGM where items to beresolved by shareholders are taken up? In compliance with existing rules and regulations, the Company observes 15business days for giving out of notices.

a. Date of sending out notices: January 27, 2016

b. Date of the Annual/Special Stockholders’ Meeting: April 29, 2016

4. State, if any, questions and answers during the Annual/Special Stockholders’ Meeting.

A stockholder expressed her deepest condolences to the bereaved family of Mr. Andrew L. Gotianun, Sr., the founderof the Company, who passed away on March 10, 2016. The passing of Mr. Gotianun, Sr. was described by thestockholder not only as a loss to the family, but also a big loss to the business community.

A stockholder observed that the growth of Bonifacio Global City (“BGC”) is faster compared to Filinvest City even if thedevelopment of the latter commenced at an earlier date. She inquired about Filinvest’s strategy on how to drive thegrowth of Filinvest City. The President replied that in any development, location is a key factor. Considering that BGC is closer to the oldercentral business districts, it is inevitable that the growth in BGC is faster than Filinvest City. The President mentionedthat two (2) game changers are expected to catalyze the growth in Filinvest City: (1) the construction of the skyway;and (2) construction of the SLEX and NLEX connector roads. She mentioned that in a year or 2, with the constructionof the Skyway and the SLEX and NLEX connector roads, those living in the northern part of Metro Manila will find iteasier to go to Filinvest City. She also emphasized that BPO centers have increased substantially in the NorthgateCyberzone area. A stockholder likewise observed that the Company has not maximized its borrowings and that she believes that theManagement can do much more to spur the growth of Filinvest City. The President replied that the Company has beenexpanding in the last three (3) years and that the stockholder’s observation is duly noted. Another stockholder inquired on the occupancy rate of the Company’s operating hotels. The President replied that theoccupancy rate varies, ranging from 70% to 85%, depending on the time of the year. In general, the hotel operation ishealthier compared to previous years.

39

A stockholder inquired if Filinvest has a subdivision project with smaller lot areas, ranging from 400 square meters to450 square meters. The President answered in the affirmative and mentioned a new subdivision project, The EnclaveAlabang.

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

(*) Annual Stockholders Meeting held last April 22, 2016

Resolution Approving Dissenting Abstaining

Approval of the Company’s Audited Financial Statements

8,334,361,276

(8,246,864,651 proxy votes + 87,496,625 votes of stockholders present in person)

0 0

Ratification of all acts and resolutions ofDirectors and Management

8,334,361,276

(8,246,864,651 proxy votes + 87,496,625 votes of stockholders present in person)

0 0

Election of the Board of DirectorsPlease see results below.

Name of Director / Independent Director Votes FOR AGAINST Votes ABSTAIN Votes

Mercedes T. Gotianun 8,329,518,636 4,842,640 0

Andrew T. Gotianun, Jr. 8,329,518,636 4,842,640 0

Jonathan T. Gotianun 8,329,518,636 4,842,640 0

Lourdes Josephine Gotianun Yap 8,334,061,276 300,000 0

Jesus N. Alcordo 8,329,818,636 4,542,640 0

Val Antonio B. Suarez 8,334,361,276 0 0

Virginia T. Obcena 8,334,361,276 0 0

6. Date of publishing of the result of the votes taken during the most recent AGM for all resolutions:

May 4, 2016

(a) Modifications

State, if any, the modifications made in the Annual/Special Stockholders’ Meeting regulations during the most recent yearand the reason for such modification:

There were no modifications made in the Annual Stockholders’ Meeting.

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Modifications Reason for Modification

Not Applicable

(b) Stockholders’ Attendance

(b.i.i) Details of Attendance in the Annual/Special Stockholders’ Meeting Held in April 29, 2016

Type ofMeetin

g

Names of Boardmembers / Officers

presentDate ofMeeting

VotingProcedure (bypoll, show ofhands, etc.)

% of SHAttendingin Person

% of SH inProxy

Total % of SHattendance

Annual

Please seeattendance reportbelow.

04/29/16

During thestockholdersmeeting, theCorporateSecretaryannounced thenames of thecandidatespre-screenedby theNominationsCommittee,includingMessrs.Lamberto U.Ocampo andVal Antonio B.Suarez as thenominees forthe boardseats allottedfor theindependentdirectors of theCompany. TheSecretaryconfirmed thatthere were noothernominationsubmittedwithin theperiod allowedunder theCompany’ By-Laws. On themotion dulymade andseconded, thestockholderselected all thecandidates asmembers ofthe Board ofDirectors.

0.94% 88.51% 89.45%

Special

No SpecialStockholders’Meeting was held in2016

(b.i.ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes at theASM/SSMs? The votes are validated by the Company’s stock transfer agent and the external auditor, both entitiesare independent from the Company.

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(b.i.iii) Do the company’s common shares carry one vote for one share? Yes. If not, disclose and give reasons forany divergence to this standard. Where the company has more than one class of shares, describe the voting rightsattached to each class of shares.

The By-Laws provides that every holder of common stock shall be entitled to one vote for each share ofCommon Stock of any class held by him. The preferred shares shall not be entitled to any voting right orprivilege, except in those cases expressly provided by law.

(c) Proxy Voting PoliciesState the policies followed by the company regarding proxy voting in the Annual/Special Stockholders’ Meeting.

Company’s Policies

Execution and acceptance of proxies

At all meetings of stockholders, a stockholder may vote in person orby proxy executed in writing by the stockholder or his dulyauthorized attorney-in-fact.

Notary The proxy is not required to be notarized.

Submission of Proxy

All proxies must be in the hands of the Corporate Secretary beforethe time set for the meeting. Such proxies filed with the Secretarymay be revoked by the stockholders either in an instrument inwriting duly presented and recorded with the Secretary prior to ascheduled meeting or by their personal presence in the meeting.

Several ProxiesProxy may cover one or several shares at the option of the shareholder.

Validity of ProxyUnless otherwise provided in the proxy, it shall be valid only for themeeting at which it has been presented to the Corporate Secretary.

Proxies executed abroad

Invalidated ProxyShareholders of invalidated proxies are informed in writing at a datewhich would give them sufficient time to address noted deficiencies before the ASM

Validation of ProxyCut-off date for validation of the proxy is indicated in the notice of meeting. Validation is done by the Corp Sec assisted by the stock andtransfer agent

Violation of Proxy Proxies are voted strictly in accordance with its term.

(d) Sending of Notices

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

Policies Procedure

The Company’s policies and procedure on the sending ofnotices of Annual/Special Stockholders’ Meeting, as re-gards the period and manner of distribution of noticesand other materials for the said meeting, shall be in ac-cordance with the rules and regulations of the Commis-sion.

Subject to approval by the Commission, notices aredistributed to stockholders in CD format within thetime period prescribed by the rules. Printed copies arealso available upon request by the stockholder.

(e) Definitive Information Statements and Management Report *

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

4254

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

April 8, 2016

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

April 8, 2016

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State whether CD format or hard copies were distributed

CD format and hard copies were distributed.

If yes, indicate whether requesting stockholders were provided hard copies

Yes, requesting stockholders were provided hardcopies.

(*) Based on the Information Statement for the 2015 Annual Shareholders’ Meeting

(f) Does the Notice of Annual/Special Stockholders’ Meeting include the following:

Each resolution to be taken up deals with only one item. Yes.

Profiles of directors (at least age, qualification, date of first appointment, experience, and directorships in other listed companies) nominated for election/re-election.

The profiles of thedirectors are included inthe Information Statementand Annual Report insteadof the Notice.

The auditors to be appointed or re-appointed. Yes.

An explanation of the dividend policy, if any dividend is to be declared. Yes

The amount payable for final dividends.

The amount payable fordividends is not included inthe Notice. It is announcedby the President during themeeting.

Documents required for proxy vote.

The documents requiredfor proxy vote is not in theNotice but thesedocuments can be obtainedfrom the CorporateSecretary or the TransferAgent.

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

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1) Treatment of Minority Stockholders

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

Policies Implementation

The Board respects the rights of the stockholders asprovided for in the Corporation Code, namely : (i) the rightto vote on all matters that require their consent orapproval; (ii) pre-emptive right to all stock issuances of theCorporation; (iii) right to inspect corporate books andrecords; (iv) right to information; (v) right to dividends; and(vi) appraisal right.

The Board should be transparent and fair in the conduct ofthe annual and special stockholders’ meetings of theCorporation. The stockholders should be encouraged topersonally attend such meetings. If they cannot attend, theyshould be apprised ahead of time of their right to appoint aproxy. Subject to the requirements of the By-Laws, theexercise of that right shall not be unduly restricted and anydoubt about the validity of the proxy should be resolved inthe stockholders’ favor.

It is the duty of the Board to promote the rights of thestockholders, remove impediments to the exercise of thoserights and provide adequate avenue for them to seek timelyredress for breach of rights.

The Board should take the appropriate steps to removeexcessive or unnecessary costs and other administrativeimpediments to the stockholders’ meaningful participationin meetings, whether in person or by proxy. Accurate andtimely information should be made available to thestockholders to enable them to make a sound judgment onall matters brought to their attention for consideration orapproval.Although the stockholders should be treated equally orwithout discrimination, the Board should give minoritystockholders the right, subject to the requirements of theCorporation Code and the Corporation’s By laws, to proposethe holding of meetings and the items for discussion in theagenda that relate directly to the business of theCorporation.

All queries during the stockholders meetingare entertained regardless of the number ofthe shares the shareholder has in theCompany. No preference is given to any of thestockholders by virtue of the number of theshares that they hold.

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

B. INVESTORS RELATIONS PROGRAM

1) Discuss the company’s external and internal communications policies and how frequently they are reviewed. Disclose who re-views and approves major company announcements. Identify the committee with this responsibility, if it has been assigned to a committee.

The Company, as a holding company, has established an investor relations unit for each of its subsidiaries that are pub -licly-listed. Cognizant of its importance, it is in the process of further establishing one for itself to manage the external rela -tion requirements of the rest of the companies in the Group notwithstanding the fact that the rest are not even pub -licly-owned. As a unit that works closely with the President as well as with the key executives including the compliance offi-cer, the investor relations group handles the informational requirements/inquiries of its various publics (the shareholders,investors, investment analysts etc.) but more importantly proacts by disseminating through various media relevant informa-tion on the activities/ developments of the Group.

2) Describe the company’s investor relations program including its communications strategy to promote effective communicationwith its stockholders, other stakeholders and the public in general. Disclose the contact details (e.g. telephone, fax and email)of the officer responsible for investor relations.

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Details

(1) Objectives

The investor relations group is tasked with the primary responsibility ofproviding timely and relevant information to its various publics on theoperational activities, financial performance, and other significant de-velopments occurring within the various companies in the Group.

(2) Principles

The Company follows the basic principle of transparency and integrity inits dealings with its publics cognizant of its duties/responsibility as apublicly-listed company.

(3) Modes of Communications The Company utilizes various forms of communications to effectivelyreach out to the public. As a logical starting point, the Company usesthe website which contains information on the historical background ofthe company, its major shareholders and the relevant qualifications ofits key operating officers, financial statements and such relevant finan-cial info on dividend declarations, the company's annual report etc., andall of these are constantly updated to reflect the current data on thecompany. In addition, the company conducts one on one meetings,make conference calls, sends emails as well as do office visits as may berequested by minority stockholders, potential investors, investment re-search personnel and the investing public in general. The company like-wise issues press releases and conducts periodic briefings on significantdevelopments of the company

(4) Investors Relations OfficerFor Filinvest Development Corporation : Ana Regina A. SantillanEmail: a [email protected]. Nos. (+63 2) 798-3955For EastWest Bank : Carlo EñanosaEmail: [email protected] No. 575-3888

3) What are the company’s rules and procedures governing the acquisition of corporate control in the capital markets, and extraordinary transactions such as mergers, and sales of substantial portions of corporate assets?

Name of the independent party the board of directors of the company appointed to evaluate the fairness of the transaction price.

B. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

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

Initiative Beneficiary

The Group donated funds to support FLI Brand Ambassador Kris Aquino’scommitment to provide five (5) “silid pangarap” units to AGAPP Foundation,whose aim is to elevate the quality of pre-school education in publicschools. The first two “silid pangarap” units were turned over to theirbeneficiaries in Muntinlupa City and Davao City.

Beneficiaries designated by the Aklat, Gabay,Aruga tungo sa Pag-angat at Pag-asa(AGAPP) Foundation

Filinvest Corporate City Foundation maintains a long-standing partnershipwith the Jesuit-managed ERDA Foundation in providing scholarships tounderprivileged but deserving students in Muntinlupa City. It has over 300scholars annually enrolled in pre-school,elementary, high school, collegeand vocational courses.

Some underprivileged but deserving studentsin Muntinlupa City

The Group continues to give annually to the Bethlehem Day CareFoundation Inc. in Talisay, Cebu for the children of families who scavenge inthe Inayawan Garbage Dumpsite.

Children of families who scavenge in theInayawan Garbage Dumpsite.

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mailto:[email protected]

mailto:[email protected]

East West Bank co-sponsored a Fun Run together with the Bank MarketingAssociation of the Philippines to promote financial literacy and savingsconsciousness among school children.Crimson Hotel and Spa Mactan hosted activities such as the Coastal Clean-up and Glow: Earth Hour.The Andrew Gotianun Foundation, Inc. (AGF) continued its scholarship andschool-building program in 2015, currently providing scholarships to 55students at Polytechnic University of the Philippines and 10 students at theManila Institute for Culinary Arts and Residential Services. AGF hasreleased P30 million for building schools, coordinating closely with theAkbay Kalinga Aruga tungo sa Pag-angat at Pag-asa Foundation. By theend of 2015, 18 schools had already been completed with 11 turned over toDepEd in the areas of Malabon, La Union, Samar, Leyte, Bohol andZamboanga del Sur.

Polytechnic University of the Philippines

Manila Institute for Culinary Arts andResidential Services

Akbay Kalinga Aruga tungo sa Pag-angat atPag-asa Foundation

Department of EducationFilinvest Run for a Child 2016 Scholars of Educational Research and

Development Assistance Foundation (ERDA)East West Bank donated paint and cleaning materials to support the Balik-Eskwela Dirve of Taguig Elementary School under the DepEd Adopt-a-Schoolproject

Taguig Elementary School

East West Bank donated textbooks and storybooks for the Kariton Klasrumproject of Taguig Elementary School

Taguig Elementary School

FDC Utilities, Inc. sponsored medical missions in Villanueva, MisamisOriental, as well as the neighboring communities of Tagoloan, Jasaan andClaveria. Indigent members of the community were also offered free socialservices such as haircut, shoe repair, civil registry, LTO registration, andlegal assistance.

Indigent members of the community ofVillanueva, Misamis Oriental, and Tagoloan,Jasaan and Claveria.

Training was conducted for 25 kindergarten teachers from severalmunicipalities in Misamis Oriental, in partnership with the NationalBookstore Foundation, Inc., Adarna Publishing House and the Departmentof Education – Misamis Oriental. More than 1,200 books were alsodonated to 17 kindergarten classes of the Villanueva District of theDepartment of Education.

25 kindergarten teachers from MisamisOriental

17 kindergarten classes of the VillanuevaDistrict of the Department of Education.

Crimson Resort and Spa Mactan partnered with Gawad Kalinga for ProjectHappy Feet, which raised funds for Bantay Bata 163 for the education ofseven scholars sponsored by Crimson.

Bantay Bata 163

Seven ScholarsWorkshops were conducted and complimentary repairs were provided forthe drivers and trisikads of the Sitio Dapdap Trisikad Drivers' Association.

The drivers and trisikads of the Sitio DapdapTrisikad Drivers' Association.

C. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL

Disclose the process followed and criteria used in assessing the annual performance of the board and its committees,individual director, and the CEO/President.

Process Criteria

Board of Directors

The assessment of the Board ofDirector’s annual performance isaccomplished by the NominationCommittee.

The assessment of the Board of Directors,Board Committees, individual directors and thePresident & CEO are based on criteria providedin the By-laws and Revised Manual onCorporate Governance.

Board Committees

The assessment of the annualperformance of the BoardCommittees is accomplished by theBoard of Directors.

Individual Directors

The assessment of the individualdirector’s annual performance isaccomplished by the NominationCommittee.

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CEO/President

The assessment of the President &CEO’s annual performance isaccomplished by the Board ofDirectors.

D. INTERNAL BREACHES AND SANCTIONS

Discuss the internal policies on sanctions imposed for any violation or breach of the corporate governance manual involving directors, officers, management and employees

Under the Company’s Revised Corporate Governance Manual, the Compliance Officer shall be responsible fordetermining violation/s through notice and hearing and shall recommend to the Chairman of the Board the imposablepenalty for such violation, for further review and approval of the Board. The Company is guided by the rules andregulations of the Securities Regulation Code in the imposition of sanctions for any violation or breach of thecorporate governance manual involving directors, officers, management and employees, as follows:

Violations Sanctions

1st violation Reprimand

2nd violation Suspension of office. The length of suspension shalldepend on the gravity of the offense.

3rd violation Removal from office.

This Consolidated Changes in ACGR for 2016 is hereby compiled and published in the Company website, in compliance with theSecurities and Exchange Commission (SEC) Memorandum No. 12, Series of 2014 released May 26, 2014 requiring all publicly listedcompanies to consolidate all the ACGR updates and changes for the year and label the consolidated changes as “ConsolidatedChanges in ACGR for (year)”.

In lieu of the notarized signature page, the Consolidated Changes in the ACGR shall be accompanied by a Secretary’s Certificate with excerpts of Board Resolution or Minutes of meetings regarding said updates and changes in the ACGR.

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