I. STATEMENT OF POLICY

ISOC Cold Chain Logistics, Inc.’s (the “Corporation”) is committed to achieving and maintaining the highest standard for transparency, accountability and openness. Employees are expected to conduct themselves with integrity, impartiality and honesty. It is every employee’s responsibility to ensure that any inappropriate behavior that may compromise the interest of the Corporation and its stakeholders does not occur. To this end, the Corporation shall implement this Whistleblowing Policy.

II. PURPOSE

This Policy provides the Whistleblower with reporting channels and guidance on whistleblowing. For this purpose, “Whistleblowing” shall refer to a situation where an employee decides to report serious concerns about suspected misconduct, malpractice or irregularities which he has become aware of or genuinely suspects that the Corporation has been or may become involved in. The purpose of this Policy is to encourage employees to disclose any malpractice, misconduct or violation of existing laws, rules and regulations, as well as the Corporation’s corporate governance manual and internal policies that the employee(“Whistleblower”) may become aware of and to provide protection to said employee and his or her witnesses.

It is the management’s responsibility to secure the confidentiality of the Whistleblower and his or her witnesses.

III. SCOPE AND LIMITATIONS

This Policy is intended to assist employees, regardless of status, to disclose information relevant to the misconduct, malpractice or violation through a confidential reporting channel. This does not in any way further any personal dispute, question financial or business decision nor reconsider any staff matters which may be addressed to some other channels in place. 

Whistleblowing matters may include but not limited to:

a. Malpractice, impropriety or fraud relating to internal controls, accounting, auditing and financial matters;

b. Violation of the rules and regulations of the Corporation or the Code of Business Conduct and Ethics of the Corporation;

c. Improper conduct of unethical behavior likely to prejudice the reputation of the Corporation;

d. Breach of legal or regulatory rules and regulations;

e. Criminal offense, breach or miscarriage of justice;

f. Deliberate concealment of any of the aforementioned.

V. PROCESS

An employee who has a legitimate misconduct or malpractice concern can raise the matter directly to the Office of the Corporate Committee, through the Compliance Officer. The Compliance Officer shall review the complaint and decide whether an investigation should proceed. 

Disclosures should in writing containing the following material information:

a. Name of those involved, if any;

b. Details of the concerns;

c. Reasons for the concerns; and

d. Supporting documents, if any, to support the claim

A whistleblower may or may not disclose his personal details. In the event of disclosure, the Office of the Governance Committee shall safeguard his or her personal details and shall treat them as confidential. 

The investigation will vary depending on the nature and particular circumstances of each disclosure. The matter may be investigated internally, be referred to an External Auditor; or form the subject of an independent inquiry. 

After investigation, the Compliance Officer may pursue the following actions:

a. Dismiss the whistleblowing report for want of palpable merit;

b. Submit recommendation to the appropriate department for the discipline of the respondent, upon approval of the Governance Committee;

c. Endorse the whistleblowing report to the Office of the Governance Committee when the concern is about a director, or office of the Corporation;

d. Endorse, upon approval of the Governance Committee, to the proper government agency the pursuit of criminal or administrative processes against the respondent;

e. Enjoin the management to take corrective measures to address the matters raised in the disclosure; and

f. Consider the whistleblowing report closed and terminated if the response of the respondent is found to be adequate. 

VI. MISCELLANEUS

Protection Against Retaliation

The Corporation shall ensure that the Whistleblower who submits the whistleblowing reports in good faith shall be protected and that no retaliation acts against him or her shall be tolerated. The Corporation shall extend all possible assistance to the whistleblower under the law and given the circumstances. 

Effectivity

This Code was approved by the Board of Directors on _____________ and shall take immediately. 

MICHAEL C. COSIQUIEN

Chairman of the Board of Directors

YERIK C. COSIQUIEN

President

ATTY. OLIVIA TAGANAS

Compliance Officer

In compliance with the Securities and Exchange Commission’s (SEC”) rules and regulations, the Board of Directors of ISOC Cold Chain Logistics, Inc. (the “Corporation”) hereby adopts this Conflict-of-Interest Policy, subject to the provisions of the Corporate Governance Code, Securities Regulations Code, Philippine Exchange Disclosure Rules, Corporation Code of the Philippines and all applicable laws of the Philippines.

I. STATEMENT OF POLICY

Transactions which may or may have a potential of being deemed as Conflict-of-Interest transactions are discourage and must be avoided. All business decisions of the Corporation, its directors, officers and employees must be based on the best interest of the Corporation and its verticals. No personal considerations and other relationships must interest with their independent judgment. 

The purpose of this Policy is to protect the integrity of the Corporation’s decision-making process, to enable the stakeholders to have confidence in its integrity and to protect the integrity and reputation of the Corporation and its personnel in general.

II. APPLICABILITY

This Policy shall apply to all directors, officers and employees of the Corporation when a Conflict-of-Interest transactions comes across their duties and responsibilities as such of the Corporation. Conflict of Interest applies when any of the Corporations directors, officers or employees’ objectivity in reaching a decision is affected by factors other than the Corporation’s best interests.

Thus, Conflict of Interest may arise in the relation to the directors, officers or employees with third parties in any of the following:

1. Family members, business or professional associates, friends and other employees;
2. Persons or entities supplying goods or services to the Corporation and any its affiliates; 
3. Persons or entities with whom the Corporation or any of its affiliates are dealing with or will be dealing with, in connection with purchase or sale of securities, shares of stocks or other personal and real properties which are material in amount;
4. Competing entities of the Corporation or any its affiliates;
5. Agencies, associations or entities which affects the business operation of the Corporation or any of its affiliates.

III. ROLES AND RESPONSIBILITIES

Directors, officers or employees have the responsibility to maintain the highest possible integrity in their service to the Corporation. Any actual or possible conflict of interest must be disclosed to the Corporation through the Compliance Officer. The Audit and Risk Committee must be alerted for any potential conflict of interest situations especially if it concerns any member of the Board or its officers. 

The Audit and Risk Committee must ensure that all employees of the Corporation are properly informed and that they understood the provisions of this Policy. Upon receiving regarding an actual or possible conflict of interest, the Audit and Risk Committee shall conduct an investigation. In the event that conflict of interest is determined to be present, the Audit and Risk Committee has the responsibility to resolve the same and provide guidance in managing the conflict of interests.

V. PROCESS OF HANDLING CONFLICT OF INTEREST

Reporting 

All directors, officers, or employees are to be oriented about this Policy and must submit a Disclosure Statement on any actual and possible conflict of interest that said director, officer or employee have or may have. This Disclosure Statement must be updated annually thereafter. 

Should there be any change on the circumstances of the director, officer or employee within the year, after submission of the Disclosure Statement, which is determined to be an actual or possible conflict of interest, the director, officer or employee must resubmit and update the Disclosure Statement within thirty (30) days after confirmation of the presence of the conflict of interest. Disclosure Statement of the officers and employees shall be course through the Human Resource Department, while Directors shall submit directly to the Audit and Risk Committee. 

The Board of Directors, through the Audit and Risk Committee, shall timely establish guidelines and polices on the reporting of a Conflict-of-Interest Transaction to the shareholders.

Investigation and Resolution of Conflict of Interest

Should conflict of interest be raised upon review of the Disclosure Statements of the officers and employees, the Human Resource Department shall refer the matter to the Audit and Risk Committee. The Audit and Risk Committee may establish an investigating committee to do an investigation and shall submit a report to the Audit and Risk Committee, who will in turn issue a final resolution.

Any director, officer or employee found to be in violation of this Policy shall be dealt with in accordance with the Corporation’s Code of Business Conduct and Ethics and the Employee Code of Discipline.

VI. MISCELLANEUS

Amendment of this Policy

This Policy shall not be amended, altered or varied unless such statement, alteration or variation shall have been approved by resolutions of the Board of Directors. 

Effectivity

This Code was approved by the Board of Directors on _____________ and shall take immediately. 

MICHAEL C. COSIQUIEN

Chairman of the Board of Directors

YERIK C. COSIQUIEN

President

ATTY. OLIVIA TAGANAS

Compliance Officer

To ensure proper compliance with regulations and regulations prescribed under the Securities Regulations Code (“SRC”), the Board of Directors of ISOC Cold Chain Logistics, Inc. (the “Corporation”) hereby adopts this Insider Trading Policy.

I. STATEMENT OF POLICY

The Corporation shall abide with the provisions of laws, rules and regulations prescribed in the SRC and shall implement policies and procedures to prevent unauthorized disclosure or misuse of material, non-public information in securities trading.

The purpose of this Policy is to provide guidelines for compliance relating to prohibition of fraud, manipulation and insider trading, and to maintain the confidence and trust of stakeholders by preserving the Corporation’s integrity and ethics business conduct.

II. APPLICABILITY

This Policy shall apply to the Corporation, its subsidiaries and affiliates. It shall apply to all transactions in the Corporation’s securities and shall cover all directors, officers and employees in the organization who receive, have access to or in possession of material, non-public information about the company including advisors, agents consultants and other stakeholders and related parties. 

III. DEFINITION OF TERMS

Blackout Period – means the duration of time wherein the Insider or Covered Persons who are privy to inside information are restricted to trade the Corporation’s securities. The period depends whether the disclosure is Structured or Unstructured, as defined by the PSE’s Revised Disclosure Rules, Penalties and Fines Implementing Guidelines. 

For Structured Disclosure, Blackout Period shall be within ten (10) days before and two (2) trading days after the disclosure of structured reports; For Unstructured Disclosures, the period shall be two (2) trading days after disclosure of any material information other than the structured reports. 

Insider (or Covered Person) – shall cover any of the following persons in the Corporation and its subsidiaries:

1. All members of the Board of Directors;;
2. All Key Officers as specified in  the Corporation’s and its subsidiaries’ By-Laws and other similar corporate documents;
3. All heads and members of the management team;
4. Consultants and advisers of the Corporation;
5. All other employees of the Corporation or its subsidiaries with regular access to material non-public information;
6. Relatives of the above persons who are living in the same household with them.

Material non-public information – refers to any information which (a) has not been generally disclosed to the public and would likely to affect the market price of the security after being disseminated to the public and the lapse of a reasonable time for the market to absorb the information; (b) would be considered by a reasonable person important under the circumstances in determining his course of action whether to buy, sell or hold the security. Such material information include, but not be limited to:

1. Financial results
2. Projections of future earnings or losses
3. Financial liquidity problems
4. News of a pending or prosed merger
5. Change in the corporate structure such as re-organization
6. Acquisition, divesture, or joint venture
7. Dividend declaration and changes in dividend policy
8. Stock splits
9. Stock buy-backs
10. New significant equity investments or debt offerings
11. Significant litigation exposure
12. Major changes in key senior management positions
13. Public or private sale of company securities and other assets

Relatives -relatives up to the third degree, by consanguinity, affinity or legal adoption, including spouse, parents, children (and their spouses), siblings (and their spouses), nieces, nephews (limited to children of brothers and sisters, and their spouse), grandparents, and aunts and uncles (limited to brothers and sisters); and domestic partners and his relatives up to third degree, by consanguinity, affinity or legal adoption.

Securities  – are shares, participation or interests in a corporation or a in a commercial enterprise or profit-making venture and evidence by a certificate, conract, instrument, whether written or electronic in character. They may refer to:

1. Shares of socks, bonds, debentures, notes, evidences of indebtedness, asset-back securities;
2. Investment contracts, certificates of interest or participation in a profit-sharing agreement, certificates of deposit for a future subscription; 
3. Derivates like option and warrants;
4. Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or similar instruments;
5. Proprietary or non-proprietary membership certificates in corporation; and
6. Others instruments that may in the future be determined by the SEC.

V. GUIDELINES

Blackout Periods

An Insider or Covered Person is prohibited from buying ,selling, directly or indirectly, listed and publicly traded shares of the Corporation within the Blackout Period. The Compliance Officer is tasked to announce or disseminate Blackout Period at least one (1) week prior to the release of structured reports or one (1) trading day for the unstructured reports. All persons covered by this Policy are responsible for relaying the Blackout Period announcement to their relatives for their guidance. When in doubt, Insider or Covered Person may consult with the Corporation’s Compliance Officer about any plan  to trade securities to ensure compliance with this Policy. 

Exception to this rule is in case of personal emergency or exceptional situation where the Insider or Covered Person is constrained to trade his shares within the Blackout Period. In this case, the following rules shall be observed:

1. Insider or Covered Person shall ask permission in writing addressed to the Corporation’s President, or Chairman of the Board, in case of the Insider or Covered Person is the President;
2. Written permission shall clearly state the date when trading is allowed.

Trading of Directors and Key Officers of the Corporation

As provided in Section 23 of the SRC, every person who is directly or indirectly the beneficial owner of more than ten per centum (10%) of any class of any equity security of a company which satisfies the requirements of subsection 17.2, or who is a director or an officer of the issuer of such security, shall:

a. within ten (10) days after the effective date of the registration statement for that security, or within ten (10) days after he becomes such beneficial owner, director or officer, subsequent to the effective date of the registration statement, whichever is earlier, file a statement with the Commission, and with an Exchange if the security is listed on that Exchange, on Form 23-A indicating the amount of all equity securities of such issuer of which he is the beneficial owner;

b. within ten (10) days after the close of each calendar month thereafter, if there has been any change in such ownership during the month, file a statement with the Commission, and with an Exchange if the security is listed on that Exchange, on Form 23-B indicating his ownership at the close of the calendar month and such changes in his ownership as have occurred during that calendar month; and

c. Notify the Commission if his direct or indirect beneficial ownership of equity securities falls below ten percent (10%), or if he ceases to be an officer or director of the issuer. After filing such notification, he shall no longer be required to file a Form 23-B.

Section 17.2 provides for:

(a) An issuer which has sold a class of its securities pursuant to a registration under section 12 hereof: Provided however, That the obligation of such issuer to file reports shall be suspended for any fiscal year after the year such registration became effective if such issuer, as of the first day of any such fiscal year, has less than one hundred (100) holder of such class securities or such other number as the Commission shall prescribe and it notifies the Commission of such;

(b) An issuer with a class of securities listed for trading on an Exchange; and

(c) An issuer with assets of at least Fifty million pesos (50,000,000.00) or such other amount as the Commission shall prescribe, and having two hundred (200) or more holder each holding at least one hundred (100) share of a class of its equity securities: Provided, however, That the obligation of such issuer to file report shall be terminate ninety (90) days after notification to the Commission by the issuer that the number of its holders holding at least one hundred (100) share reduced to less than one hundred (100).

Section 13.1 of the PSE’s Revised Disclosure Rules requires Issuers must disclose to the Exchange the direct and indirect ownership of its directors and principal officers in its securities within five (5) Trading Days after:

a. The Issuer’s securities are first admitted in the Official Registry of the Exchange;

b. a Director is first elected or an Officer is appointed; 

c. any acquisition, disposal, or change in the shareholdings of the Directors and Officers

A Director or a Principal Officer of an Issuer must not deal in the Issuer’s securities during the period within which a material nonpublic information is obtained and up to two (2) full Trading Days after the price sensitive information is disclosed.

Concerned director, or officer of the Corporation shall immediately accomplish a Statement of Changes in Beneficial Ownership and submit the same to the Compliance Officer within one (1) trading day after the occurrence of the event. The Compliance Officer shall ensure that the accomplished Statement shall be submitted within two (2) trading days after the event occurrence. 

Penalties

Violation of this Policy shall be subject to disciplinary action in accordance with the SRC rules, PSE Disclosure Rules, Corporation’s Code of Business Ethics and Conduct, and the Employee Code of Discipline, without prejudice to any civil or criminal action which may be filed against the violator.

VI. MISCELLANEUS

Amendment of this Policy

This Policy shall not be amended, altered or varied unless such statement, alteration or variation shall have been approved by resolutions of the Board of Directors.

Effectivity

This Code was approved by the Board of Directors on _____________ and shall take immediately. 

MICHAEL C. COSIQUIEN

Chairman of the Board of Directors

YERIK C. COSIQUIEN

President

ATTY. OLIVIA TAGANAS

Compliance Officer

I. STATEMENT OF POLICY

It is the policy of ISOC Cold Chain Logistics, Inc.’s (the “Corporation”) that all transactions between the Corporation and Related Parties are done in “fair and at arms length” terms and inures to the benefit and best interest of the Corporation and its shareholders as a whole, considering relevant circumstances. All transactions with Related Parties shall be conducted in accordance with the principles of transparency and fairness and shall be properly approved and disclosed in accordance with this Policy.

II. DEFINITION OF TERMS

Related Party  – a person or entity that is related to the entity that is preparing its financial statements (in this policy referred to as the “Reporting Entity”). 

A Related Party is:

a. A person or a close member of that person’s family is related to a Reporting Entity if that person is:

i. Has control or joint control over the Reporting Entity;

ii. Has significant influence over the Reporting Entity; or

iii. Is a member of the key management personnel of the Reporting Entity or a parent of the Reporting Entity.

b. An entity is related to a Reporting Entity if any of the following conditions applies:

i. The entity is related to a Reporting Entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

ii. One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

iii. Both entities are joint venture of the same third party;

iv. One entity is a joint venture of a third party and the other party is an associate of the third party;

v. The entity is a post-employment benefit plan for the benefit of employees of either the Reporting Entity or an entity related to the Reporting Entity. If the Reporting Entity is itself such a plan, the sponsoring employers are also related to the Reporting Entity;

vi. The entity is controlled or jointly controlled by a person defined in (a);

vii. A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

Related Party Transaction (RPT) – refers toa transfer of resources, services or goods between a Reporting Entity and a Related Party, regardless of whether a price is charged. This includes outstanding transactions entered into with an unrelated party that subsequently becomes a Related Party.

The following are considered RPTs when performed with a Related Party:

a. Purchases or sales of goods

b. Purchases or sales of property and other assets

c. Rendering or receiving of services

d. Lease

e. Transfers of research and development 

f. Transfers under license agreements

g. Transfers under finance agreements, including loans and equity contributions in case or in kind

h. Provisions of advances, donations, guarantees or collateral

i. Settlement of liabilities on behalf of the entity or by the entity on behalf of that Related Party

Material or Significant Related Party Transaction – any transaction, as defined above, done either individually or in aggregate over a twelve (12) month period with the same Related Party, amounting to ten percent (10%) or higher of the Corporation’s total assets based on its latest audited financial statements.

Abusive Material RPTs – refers to material RPT that are not entered into at arm’s length and unduly favors a Related Party. 

Materiality Threshold – shall be at ten percent (10%) of the Corporation’s total assets based on its latest audited financial statement. The total assets shall pertain to its total consolidated assets. 

Related Party Registry – refers to a record of the organizational and structural composition, including any change thereon, of the Corporation and its related parties. 

Substantial Stockholder – refers to any person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of its equity security. 

Control – an person or entity controls the enterprise when the former is exposed, or has rights, to variable returns from tis involvement with the enterprise and has the ability to affect those returns through its power over the enterprise.

Joint control  – the contractually agreed sharing of control of an arrangement, which exists only when decision about the relevant activities require the unanimous consent of the parties sharing control.

Significant influence –  the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies

Parent – an entity which has control over another corporation directly or indirectly through one (1) or more intermediaries. 

Subsidiary – an entity with more than fifty percent (50%) of the outstanding voting stock of which is directly or indirectly owned, controlled or held with power to vote by its parent corporation. 

Associate – an entity over the Corporation holds twenty percent (20%) or more of the voting power, directly or indirectly, or which the Corporation has significant influence. . 

Affiliate – refers to an entity linked directly or indirectly to the Corporation through any one or a combination of any of the following:

a. Ownership, control or power to vote, whether by permanent or temporary proxy or voting trust, or other similar contracts, by a company of at least ten percent (10%) or more of the outstanding voting stock of the Corporation or vice versa;

b. Interlocking directorship or officer ship except in cases involving independent directors as defined as existing regulations;

c. Common stockholders owning at least ten percent (10%) of the outstanding voting stock of the Corporation and the entity; or 

d. Management contract or any arrangement granting power to the Corporation to direct or cause the direction of management and policies of the entity or vice-versa.

Joint Venture – a contractual arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. 

“Fair and at Arm’s Length” – refers to transactions in an open and unrestricted market and between willing parties who are knowledgeable, informed, and who act independently of and without regard to any relationship with each other.

Key Management Personnel – persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director, whether executive or otherwise, of that entity.

Conflict of Interest  – a breach of an obligation to the Corporation that has an effect or intention of advancing one’s own interest or the interest of others that is grossly disadvantageous to the interest or potentially harmful to the Corporation. 

III. BOARD AND SENIOR MANAGEMENT OVERSIGHT

A. Board of Directors

The Board of Directors shall be responsible to review and approve all material or significant RPTs to ensure fairness and transparency of transactions. They shall have overall responsibility in ensuring that transactions with Related Parties are handled in a sound and prudent manner, with integrity and in compliance with existing laws, rules and regulations to protect the interest of all stakeholders. For this purpose, the Board of Directors shall:

1. Adopt policies and procedures that provide mechanism for the proper and timely disclosure of all RPTs to ensure that all RPTs are conducted at Fair and Arm’s Length basis and that no stakeholder r is unduly advantaged.

2. Approve all material RPTs, particularly: (a) those greater than the Materiality Threshold, (b) renewal or material changes in the terms and conditions of RPTs including but not limited to, changes in the price, interest rate, maturity date, payment terms, commissions, fees, tenor and collateral requirements of RPTs; and(c) the write off of material exposures to Related Parties. 

The Board of Directors may require that an RPT approved by it be submitted to the stockholders for consideration and ratification. 

3. Establish an effective system for the identification and monitoring of Related Parties and RPTs, for the continuous review and evaluation of existing relationship between and among businesses and counterparts, and for the identification, measurement, monitoring and control of the risks arising from RPTs;

4. Ensure maintenance of adequate capital against risk associated with exposures to Related Parties and consideration of risk related to material RPTs;

5. Oversee the integrity, independence, and effectiveness of the polices and procedures for whistleblowing. 

B. Audit and Risk Committee

The Audit and Risk Committee shall assist the Board of Directors in performing its oversight function to avoid conflicts of interest with Substantial Stockholder, board members, management and other stakeholders. The Audit Committee shall be composed of at least three (3) non-executive directors, majority of whom, including the Chairman, shall be an Independent Director.

The Audit and Risk Committee shall review and approve the audited financial statements, with particular focus on Material or Significant RPTs, among others.

C. Related Party Transaction Committee

A Related Party Transaction Committee shall be establish and shall be composed of at least three (3) non-executive directors, the majority of whom, including the Chairman, shall be independent directors.

The RPT Committee shall have the following duties and responsibilities:

1. Evaluates on an ongoing basis existing relations between and among business and counterparties to ensure that all related parties are continuously identified, RPTs are monitored and subsequent changes in relationships with counterparties (from non-related to related and vice versa) are captured. Related parties, RPTs and changes in relationships shall be reflected in the relevant reports to the Board and regulators/supervisors;

2. Evaluates all material RPTs to ensure that these are not undertaken on more favorable economic terms (e.g., price, commissions, interests rates, fees, tenor collateral requirement) to such related parties than similar transactions with non-related parties under similar circumstances and that no corporate or business resources of the Corporation are misappropriated or misapplied, and to determine any potential reputational risk issues that may arise as a result of or in connection with the transactions. In evaluating RPTs, the Committee takes into account, among others, the following:

i. The related party’s relationship to the Corporation and interest in the transaction;

ii. The material facts of the proposed RPT, including the proposed aggregate value of such transactions;

iii. The benefits to the Corporation of the proposed RPT;

iv. The availability of other sources of comparable products or services; and

v. An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances. The Corporation shall have an effective price discovery system in place and exercise due diligence in determining a fair price for RPTs;

3. Ensures that appropriate disclosure is made, and /or information is provided to regulating and supervising authorities relating to the Corporation’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest. The disclosure shall include information on the approach to managing material conflicts of interest that are inconsistent with such policies, and conflicts that could arise as a result of the Corporation’s affiliation or transaction with other related parties;

4. Reports to the Board on a regular basis, the status and aggregate exposures to each related party;

5. Ensure that transactions with related parties, including write-off of exposures are subject to a periodic independent review or audit process;

6. Oversees the implementation of the system for identifying, monitoring, measuring, controlling and reporting RPTs including a periodic review of RPT policies and procedures; and

7. Performs other duties and responsibilities as the Committee may deem appropriate within the scope of tis primary functions or as may be assigned by the Board.

The Material or Significant RPTs reviewed and approved during the year shall be disclosed in the Corporation Annual Corporate Governance Report. 

IV. COVERAGE OF RPT POLICY

The following shall be considered Covered Related Parties:

a. Directors, Officers, and Substantial Stockholders;

b. Spouses and relatives of the Directors, Officers, and Substantial Stockholders within the fourth (4th) civil degree of consanguinity or affinity, if those persons have Control, Joint Control or Significant Influence over the Corporation;

c. Parent;

d. Subsidiaries;

e. Associates;

f. Affiliates;

g. Joint Ventures; and

h. Entities controlled, jointly controlled or significantly influenced or managed by a person who is a Related Party. 

In accordance with SEC rules and subject further to the Audit and Risk Committee’s endorsement to the Board for approval, the Materiality Threshold is set at ten percent (10%) of the Corporation’s total assets based on its latest audited financial statements. The total assets shall pertain to its total consolidated assets. 

Transactions beyond the Materiality Threshold entered into with an unrelated party but subsequently becomes a Related party may be excluded under this Policy. However, any material changes in the terms and conditions of RPTs which give rise to potential risk to the Corporation after the unrelated party becomes a Related Party shall be dealt in accordance with this Policy. 

The imposition of penalties for Abusive RPTs shall be in accordance with the Corporation’s existing policies, SEC rules and regulations, and existing laws and regulations of the Philippines.

V. GOVERNING PRINCIPLES AND PROCESS

Procedures on Disclosures

Each director, officer, and Key Management Personnel is responsible for providing written notice to the RPT Committee of any RPT involving him, her or his or her immediate family member. 

a. Such director, officer of Key Management Personnel shall provide all relevant information about the transaction, including such other information that may requested, that will enable the RPT Committee to effectively perform its functions under this Policy. 

b. In dealing with the shares of the Corporation, the director, officer or Key Management Personnel shall likewise report and disclose the same to the Board, the RPT Committee or the Compliance Officer of the Corporation. 

Disclosure of an RPT shall include information about the value of the transaction, outstanding balance, if any, major terms and conditions and guarantees, if any, and any other information as may be requested by the RPT Committee to determine any conflict of interest and potential effect of the relationship. 

Approval Process of RPTs

Each Business Unit must be responsible for the determination, full disclosure and reporting of the Corporation’s dealing with a Related Party. They are likewise responsible for securing the approval or endorsement of the RPTs from the respective board committees with delegated authority and for submitting the same proposal to the RPT Committee. 

The RPT Committee shall review, approve and endorse to the Board of Directors for final approval all Material RPTs. The Corporate Secretary shall provide the members of the RPT Committee Committee a copy of the agenda to verify whether there are RPTs requiring the RPT Committee Committee’s review/approval/endorsement. 

The approval, award, processing and payment of RPT shall follow the same procedures as the other transactions of the Corporation. No unusual privilege shall be accorded to a Related Party.

All Material RPTs, individually or in aggregate within the twelve (12) month period shall be approved by at least two-thirds (2/3) vote of the Board of Directors, with at least majority of the Independent Directors voting to approve the RPT. In case a majority of the Independent Directors is not acquired, the Material RPT may be ratified by the vote of the stockholders representing at least 2/3 vote of the outstanding capital stock.

Directors with personal interests in the transaction should abstain from participating in the discussion and from voting on the said transaction. Their votes shall not be counted for purposes of determining the approval of the transaction. 

All Material RPTs approved by the Board, including the nature, terms and conditions, original, outstanding and aggregate balances, justification and other details pertaining to the RPT must be disclosed during the stockholder’s meeting and duly reflected on the Board and Stockholder’s Meeting Minutes.

RPT Reporting

The Business Unit seeking approval of an RPT transaction shall submit to the RPT Committee its proposal. The RPT Committee shall thereafter review, approval and endorse the same to the Board.

Upon approval by the Board, but prior to the execution of the RPT, the Business Unit shall report the matter to the Corporate Secretary. Within three (3) days from execute date, the Corporate Secretary must file an Advisement Report with the SEC of the said Material RPT.

Material RPTs shall be disclosed by the Corporate Secretary through the Corporation’s Annual Corporate Governance Report to be submitted every 30th of May of each year. 

VI. SANCTIONS

RPTs entered into in violation of any provisions of the Policy, any applicable law or relevant rules and regulations may be nullified or revoked. A director, officer, employee or Related Party concerned shall be dealt accordingly in accordance with the Corporation’s Code of Business Conduct and Ethics. 

VII. MISCELLANEOUS

Assessment and Monitoring

The RPT Committee shall review this Policy every three (3) years or as may be needed. Amendment to this Policy must be approved by resolution of the Board. 

The Internal Audit shall conduct a periodic review of the effectiveness of the Corporation’s systems and internal controls governing Material RPTs. The resulting audit reports including excerptions or breaches in limits, shall be communicated to the Audit and Risk Committee. 

Effectivity

This Code was approved by the Board of Directors on _____________ and shall take immediately.

MICHAEL C. COSIQUIEN

Chairman of the Board of Directors

YERIK C. COSIQUIEN

President

ATTY. OLIVIA TAGANAS

Compliance Officer