SEC FORM – I-ACGR
INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT
1. For the fiscal year ended: December 31, 2020
2. SEC Identification Number: CS200716094 3. BIR Tax Identification No. 006-895-049
4. Exact name of issuer as specified in its charter CONVERGE ICT SOLUTIONS, INC.
5. Metro Manila, Philippines 6. (SEC Use Only) Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization
7. New Street Bldg., Mc Arthur Highway, Balibago, Angeles City, Pampanga 2009 Address of principal office Postal Code
8. (02) 8667-0888 Issuer's telephone number, including area code
9. N/A Former name, former address, and former fiscal year, if changed since last report.
INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT COMPLIANT/ ADDITIONAL INFORMATION EXPLANATION NON- COMPLIANT The Board’s Governance Responsibilities Principle 1: The company should be headed by a competent, working board to foster the long- term success of the corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the long- term best interests of its shareholders and other stakeholders. Recommendation 1.1 1. Board is composed of directors with The Board of Directors is composed collective working knowledge, experience of highly skilled and capable or expertise that is relevant to the individuals, having expertise and company’s industry/sector. competencies in multiple industries 2. Board has an appropriate mix of that enable them to respond to the competence and expertise. needs of the organization and act for Compliant 3. Directors remain qualified for their positions the best interest of the company.
individually and collectively to enable them to fulfill their roles and responsibilities References: and respond to the needs of the SEC Annual Report 17A Pages (56-57) organization. https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 1.2 1. Board is composed of a majority of non- Compliant The Board is composed of 7 directors, executive directors. a majority (5) of which are non- executive directors.
References:
SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 1.3
SEC Form – I-ACGR * Updated 21Dec2017 Page 2 of 91 1. Company provides in its Board Charter Non- The training and orientation programs for and Manual on Corporate Governance a compliant directors are indicated in the Manual on policy on training of directors. Corporate Governance Page 16, Items 13 (a-d). For FY2021, the Company’s Board Charter will indicate said trainings.
References: Manual on Corporate Governance: https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf
2. Company has an orientation program for Non- The training and orientation programs for first time directors. compliant directors are indicated in the Manual on Corporate Governance Page 16, Items 13 (a-d). For FY2021, the Company’s Board Charter will indicate said trainings.
References: Manual on Corporate Governance: https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf
3. Company has relevant annual continuing Non- The Company became a publicly listed training for all directors. compliant company in October 26, 2020. There were no trainings conducted in FY 2020 but for FY 2021, the directors will undergo the following trainings for all directors and key officers:
June 18, 2021 – Basic Corporate Governance Course (4 hours) SEC Form – I-ACGR * Updated 21Dec2017 Page 3 of 91 June 25, 2021 – Advanced Courses in Corporate Governance i.e. Strategic IT Governance and Digital Transformation (4 hours) Recommendation 1.4
1. Board has a policy on board diversity. Non- For FY2021, the Company will adopt a compliant formal policy on board diversity in accordance with its Manual on Corporate Governance, Page 3, Item 3(A).
A brief proof of board diversity are reflected as follows:
Age Ranges: 40-60 years old: 3 directors 61-70 years old: 3 directors 71 years old and up: 1 director
Gender: 6 Male 1 Female
Skills / Sectors: Business Information Technology Public Administration Accounting and Finance Economics Environment Education Media and Entertainment Real estate Infrastructure Public Health Transportation SEC Form – I-ACGR * Updated 21Dec2017 Page 4 of 91
References: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscViewer .do?edge_no=6631ccb980c04d7a5d542a f6f1e997b9
Manual on Corporate Governance, Page 3 https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf Optional: Recommendation 1.4 1. Company has a policy on and discloses Non- For FY2021, the Company will adopt a measurable objectives for implementing its compliant formal policy on board diversity in board diversity and reports on progress in accordance with its Manual on Corporate achieving its objectives. Governance, Page 3, Item 3(A).
References https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf Recommendation 1.5 1. Board is assisted by a Corporate Secretary. Compliant The Board has appointed a 2. Corporate Secretary is a separate Compliant Corporate Secretary – Atty. Elvira C. individual from the Compliance Officer. Oquendo 3. Corporate Secretary is not a member of Compliant the Board of Directors. References:
Qualification- SEC Annual Report 17A Page 60 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 SEC Form – I-ACGR * Updated 21Dec2017 Page 5 of 91
Duties and functions- Manual on Corporate Governance, Page 9-10, Item 5(A-L).
References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
The Corporate Secretary is a separate individual form the organization’s Compliance Officer.
Corporate Secretary: Atty. Elvira C. Oquendo 4. Corporate Secretary attends training/s on Non- The Company became a Publicly Listed corporate governance. compliant Company (PLC) on October 26, 2020.
The Corporate Governance training where the Corporate Secretary is a participant is scheduled on June 18 and 25, 2021. Directors and Principal Officers are expected to attend. Optional: Recommendation 1.5 1. Corporate Secretary distributes materials Compliant The Corporate Secretary provides for board meetings at least five business materials at least five business days days before scheduled meeting. before scheduled meeting via email. Recommendation 1.6 1. Board is assisted by a Compliance Officer. Compliant The Company has appointed Atty. 2. Compliance Officer has a rank of Senior Compliant Laurice Esteban -Tuason (2021) as its Vice President or an equivalent position Corporate Compliance Officer. Atty. with adequate stature and authority in the Esteban-Tuason was preceded by corporation. Atty. Maria Grace De Jesus and was
SEC Form – I-ACGR * Updated 21Dec2017 Page 6 of 91 3. Compliance Officer is not a member of Compliant recorded in the Company’s SEC the board. Form 17A as its Compliance Officer for FY 2020.
The Compliance Officer is not a member of the Board.
References: Position, duties, and responsibilities: Manual on Corporate Governance, Page 10-11, Item 6(A-I). https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Background and qualifications of Atty. Maria Grace De Jesus: SEC Annual Report 17A Page (60 -61) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Appointment of Atty. Esteban-Tuason on Definitive Information Statement, Page 22: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf 4. Compliance Officer attends training/s on Non- The Company became a Publicly Listed corporate governance. compliant Company (PLC) last October 26, 2020.
The Corporate Governance training where the Compliance Officer is a SEC Form – I-ACGR * Updated 21Dec2017 Page 7 of 91 participant is scheduled on June 18 and 25 , 2021. Directors and Principal Officers are expected to attend.
Principle 2: The fiduciary roles, responsibilities and accountabilities of the Board as provided under the law, the company’s articles and by-laws, and other legal pronouncements and guidelines should be clearly made known to all directors as well as to stockholders and other stakeholders. Recommendation 2.1 1. Directors act on a fully informed basis, in Compliant The Directors are engaged in good faith, with due diligence and care, pursuing the best course of strategic and in the best interest of the company. action to add value to the organization.
References: Manual on Corporate Governance, Page 4, Item D (2): https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
SEC Annual Report 17A Pages 4 and 66 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 2.2 1. Board oversees the development, review Compliant The Board oversees the and approval of the company’s business development, review and approval objectives and strategy. of the Company’s business 2. Board oversees and monitors the Compliant objectives and strategy, as well as its implementation of the company’s business implementation. objectives and strategy. The Company’s budget, business plan and strategy map were presented and approved by the
SEC Form – I-ACGR * Updated 21Dec2017 Page 8 of 91 Board. Shareholders may request for copies of the minutes may be requested through the Office of the Corporate Secretary.
References: Manual on Corporate Governance, Page 4, Item D (2): https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Supplement to Recommendation 2.2 1. Board has a clearly defined and updated Compliant The Board has a well-established vision, mission and core values. vision, mission, and core value statements.
The Founders established Converge with the vision of building a business focused on providing highspeed fixed broadband to millions of unserved and underserved households and businesses across the Philippines.
References: SEC Annual Report 17A Page (5) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. Board has a strategy execution process Compliant The Company’s strategic that facilitates effective management management decisions are aligned performance and is attuned to the with the overall climate of the company’s business environment, and industry, and demographics. The culture. Board reviewed and approved the Company’s strategic initiatives. SEC Form – I-ACGR * Updated 21Dec2017 Page 9 of 91 Copies of the minutes of these decisions are lodged with the Office of the Corporate Secretary.
References: SEC Annual Report 17A Pages 9-22 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 2.3 1. Board is headed by a competent and Compliant The Chairman of the Board is Mr. Jose qualified Chairperson. Pamintuan de Jesus. He possesses all the qualifications and performs all the duties under the Revised Manual on Corporate Governance.
References:
Website https://corporate.convergeict.com/ board-executives/
SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Duties and responsibilities: Manual on Corporate Governance, Page 3-4, Item 3(C). https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 10 of 91 Recommendation 2.4 1. Board ensures and adopts an effective Non- The Company only adopts the DOLE succession planning program for directors, compliant provisions for Retirement Benefits. key officers and management. The Company is conducting benchmarking initiatives across peer- 2. Board adopts a policy on the retirement Non- companies of similar industries. for directors and key officers. compliant The Talent Management function will be established. Under the new HR Operating Model, the Talent Management Center of Excellence has been put in place which will own the Talent Review Process and Policy which will result in the development of Talent Pools and Succession Plans.
The Company will initiate action plans to craft retirement and succession policies for eventual compliance. Recommendation 2.5 1. Board aligns the remuneration of key Compliant The Board has approved the officers and board members with long- Employee Stock Option Plan (ESOP) term interests of the company. for employees of the Company. Likewise, the Company has a performance assessment matrix which is linked to the merits of the employee, as reflected in his/her performance evaluation.
References: Please see attached Annex “F” for the performance evaluation framework. 2. Board adopts a policy specifying the Non- The Company has been observing a relationship between remuneration and compliant performance-based/merit-based performance. SEC Form – I-ACGR * Updated 21Dec2017 Page 11 of 91 incentive for remuneration, bonuses and merit increases.
For FY2021, the Company’s Human Resources Department will present to the Board the formal remuneration policy of the Company for approval. 3. Directors do not participate in discussions Compliant The compensation of the directors or deliberations involving his/her own was determined by the Founders and remuneration. Coherent Cloud Investments B.V. The directors did not participate in the discussions and deliberations of their own remuneration.
SEC Annual Report 17A Pages (61-62) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Optional: Recommendation 2.5 1. Board approves the remuneration of senior Non- For FY2021, the Company’s Human executives. compliant Resources Department will present to the Board the formal remuneration policy of the Company for approval. 2. Company has measurable standards to Compliant The Board has approved the align the performance-based Employee Stock Option Plan (ESOP) remuneration of the executive directors for employees of the Company. and senior executives with long-term Likewise, the Company has a interest, such as claw back provision and performance assessment matrix deferred bonuses. which is linked to the merits of the employee, as reflected in his/her performance evaluation.
References: Performance Evaluation Framework (Annex “F”)
SEC Form – I-ACGR * Updated 21Dec2017 Page 12 of 91 Recommendation 2.6 1. Board has a formal and transparent board For FY2021, the Board will adopt a nomination and election policy. nomination and election policy, in accordance with the Company’s Manual 2. Board nomination and election policy is on Corporate Governance. disclosed in the company’s Manual on Corporate Governance. The nomination and election policy shall state that all nominations are accepted from shareholders regardless of the 3. Board nomination and election policy number of shareholdings. The screening includes how the company accepted and shortlisting of candidates is provided. nominations from minority shareholders. The assessment process is indicated in the policy. 4. Board nomination and election policy includes how the board shortlists The qualities of the nominees are vetted candidates. vis-à-vis the strategic direction of the Non- Company. 5. Board nomination and election policy compliant includes an assessment of the The Nomination and Election Policy shall effectiveness of the Board’s processes in include a mechanism where in the nomination, election or replacement professional search firms or other external of a director. sources of candidates will be utilized in searching for candidates to the Board of 6. Board has a process for identifying the Directors. quality of directors that is aligned with the strategic direction of the company. References: Manual on Corporate Governance Page 9 https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf Optional: Recommendation to 2.6 1. Company uses professional search firms or Compliant For FY2020, the selection process of other external sources of candidates (such the candidates for the board SEC Form – I-ACGR * Updated 21Dec2017 Page 13 of 91 as director databases set up by director or included, among others, obtaining a shareholder bodies) when searching for list from an extensive global network candidates to the board of directors. of executives and advisors. The candidates were further narrowed down and external firms were used to check the background of candidates.
References:
The background of our directors are listed in SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 2.7 1. Board has overall responsibility in ensuring Compliant The Manual on Corporate that there is a group-wide policy and Governance and the Related Party system governing related party Transactions Policy states that the transactions (RPTs) and other unusual or Board shall have this overall infrequently occurring transactions. responsibility.
References:
Manual on Corporate Governance (p.5) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Related Party Transactions Policy, Page 4 https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- SEC Form – I-ACGR * Updated 21Dec2017 Page 14 of 91 4.24.2021-Related-Party-Transactions- Policy-1.pdf 2. RPT policy includes appropriate review Compliant The Company adheres and and approval of material RPTs, which guarantees the fairness and guarantee fairness and transparency of transparency of its transactions with the transactions. related parties.
References: Related Party Transactions Policy, Page 4 https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1.pdf 3. RPT policy encompasses all entities within Compliant The Corporation’s RPT policy covers the group, taking into account their size, all entities within the group. structure, risk profile and complexity of operations. References: Related Party Transactions Policy, Page 4 https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1.pdf Supplement to Recommendations 2.7 1. Board clearly defines the threshold for Compliant These thresholds and categories are disclosure and approval of RPTs and defined in the Company’s RPT policy categorizes such transactions according and in the Annual report, to those that are considered de minimis or respectively. transactions that need not be reported or announced, those that need to be References: disclosed, and those that need prior Related Party Transactions Policy shareholder approval. The aggregate https://corporate.convergeict.com/ amount of RPTs within any twelve (12) wp-content/uploads/2021/05/FINAL- month period should be considered for 4.24.2021-Related-Party-Transactions- Policy-1.pdf SEC Form – I-ACGR * Updated 21Dec2017 Page 15 of 91 purposes of applying the thresholds for disclosure and approval. SEC Annual Report 17A Pages 121- 127 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. Board establishes a voting system whereby Compliant The RPT policy provides that should a majority of non-related party the majority vote of the independent shareholders approve specific types of directors is not obtained, the 2/3 of related party transactions during shareholders may ratify the RPT. shareholders’ meetings. Related Party Transactions Policy https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1.pdf Recommendation 2.8 1. Board is primarily responsible for approving Compliant The Board acknowledges its the selection of Management led by the responsibility in the approval and Chief Executive Officer (CEO) and the selection of management heads, as heads of the other control functions (Chief evidenced by page 6, item 3 Risk Officer, Chief Compliance Officer and ((D)(2)(p)) of Manual on Corporate Chief Audit Executive). Governance.
References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
The Board has selected capable and esteemed C-level management officers to lead and pursue the best interests of the Company.
References: SEC Form – I-ACGR * Updated 21Dec2017 Page 16 of 91 SEC Annual Report 17A Pages (58-60) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-executives/
2. Board is primarily responsible for assessing Compliant The Board adheres to its responsibility the performance of Management led by of assessing the performance of its the Chief Executive Officer (CEO) and the management, as evidenced in heads of the other control functions (Chief page 7, item 3 ((D)(4)(a-e)) of its Risk Officer, Chief Compliance Officer and Manual on Corporate Governance. Chief Audit Executive). References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Recommendation 2.9 1. Board establishes an effective Compliant The Board adheres to its responsibility performance management framework of assessing the performance of that ensures that Management’s management as evidenced in page performance is at par with the standards 7, item 3 ((D)(4)(a-e)) of its Manual set by the Board and Senior Management. on Corporate Governance. References: 2. Board establishes an effective Compliant https://corporate.convergeict.com/ performance management framework wp-content/uploads/2020/10/CICT- that ensures that personnel’s performance Manual-on-Corporate-Governance- is at par with the standards set by the 15-JUNE-2020.pdf Board and Senior Management. A performance evaluation framework for personnel has been established.
SEC Form – I-ACGR * Updated 21Dec2017 Page 17 of 91 References: Please see attached Annex “F” for the performance evaluation framework. Recommendation 2.10 1. Board oversees that an appropriate Compliant The Board oversees that an internal control system is in place. appropriate internal control system is in place. The Company has an Internal Audit Department. Conflicts 2. The internal control system includes a Compliant of interest are disclosed. mechanism for monitoring and managing potential conflict of interest of the References: Management, members and shareholders. Manual on Corporate Governance Pages 6, 11-13 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Conflict of Interest Policy: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Conflicts-of-Interest-Policy.pdf 3. Board approves the Internal Audit Charter. Non- For FY 2021, the Board’s Audit Committee compliant has approved the Internal Audit Charter on May 5, 2021.
Internal Audit Charter: Please see Annex “A” Recommendation 2.11 1. Board oversees that the company has in Non- A formal ERM framework and strategy is place a sound enterprise risk management compliant being formulated by the Company (ERM) framework to effectively identify, monitor, assess and manage key business For the IPO in FY2020, the Company risks. undertook an initial enterprise-wide risk
SEC Form – I-ACGR * Updated 21Dec2017 Page 18 of 91 2. The risk management framework guides Non- assessment. The major risk factors and risk the board in identifying units/business lines compliant management were disclosed in our and enterprise-level risk exposures, as well Annual Report. as the effectiveness of risk management strategies. SEC Annual Report 17A Pages (22-32) https://edge.pse.com.ph/openDiscViewer .do?edge_no=6631ccb980c04d7a5d542a f6f1e997b9 Recommendation 2.12 1. Board has a Board Charter that formalizes For FY 2021, the Board will adopt a Board and clearly states its roles, responsibilities Charter that clearly states the and accountabilities in carrying out its responsibilities and functions of directors. fiduciary role. 2. Board Charter serves as a guide to the Once approved, the Board Charter will be Non- directors in the performance of their uploaded in the Company’s website. compliant functions.
3. Board Charter is publicly available and posted on the company’s website.
Additional Recommendation to Principle 2 1. Board has a clear insider trading policy. Non- The Company became a publicly listed compliant company in October 26, 2020. For FY2020, there was no insider trading policy.
For FY2021, the Board and the Company have formally adopted an Insider Trading Policy.
References: https://corporate.convergeict.com/wp- content/uploads/2021/05/FINAL-VERSION- Insider-Trading-Policy.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 19 of 91 Optional: Principle 2 1. Company has a policy on granting loans Non- The Company will look into developing a to directors, either forbidding the practice compliant formal policy on not allowing or limiting or ensuring that the transaction is granting of loans to directors. conducted at arm’s length basis and at market rates. 2. Company discloses the types of decision Compliant All decisions involving the businesses requiring board of directors’ approval. and properties of the Company require board approval or are delegated to key officers.
References: Article III Section 1 of the Company's Amended By-Laws https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf Material transactions approved by the board are disclosed to the SEC and PSE through 17-C.
Principle 3: Board committees should be set up to the extent possible to support the effective performance of the Board’s functions, particularly with respect to audit, risk management, related party transactions, and other key corporate governance concerns, such as nomination and remuneration. The composition, functions and responsibilities of all committees established should be contained in a publicly available Committee Charter. Recommendation 3.1 1. Board establishes board committees that Compliant The Board has established 5 focus on specific board functions to aid in committees, namely: the optimal performance of its roles and responsibilities. 1. Executive Committee 2. Audit and Related Party Transactions Committee
SEC Form – I-ACGR * Updated 21Dec2017 Page 20 of 91 3. Corporate Governance Committee 4. Board Risk Oversight Committee 5. Nominations and Remunerations Committee
References: SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Manual on Corporate Governance Pages 8-9, Item No. 4 (A-D) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Website https://corporate.convergeict.com/ board-committees/ Recommendation 3.2 1. Board establishes an Audit Committee to Compliant The Board has established an Audit enhance its oversight capability over the Committee to perform the duties company’s financial reporting, internal required for corporate governance. control system, internal and external audit processes, and compliance with References: applicable laws and regulations. Manual on Corporate Governance, Pages 8-9, Item No. 4 (A) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 21 of 91
SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-committees/
Audit Committee Charter: Please see Annex “B” 2. Audit Committee is composed of at least Compliant The Audit Committee is composed of three appropriately qualified non- the following: executive directors, the majority of whom, 1. Roman Felipe S. Reyes including the Chairman is independent. (Chairman) 2. Jose Pamintuan De Jesus (member) 3. Amando M. Tetangco Jr. (member) 4. Maria Grace Y. Uy (member) 5. Saurabh N. Agarwal (member)
References: SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-committees/
SEC Form – I-ACGR * Updated 21Dec2017 Page 22 of 91 Qualifications and type of directorship: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 3. All the members of the committee have Compliant The members of the audit committee relevant background, knowledge, skills, have backgrounds in accounting, and/or experience in the areas of audit and finance. accounting, auditing and finance. Qualifications and background of Audit Committee: SEC Annual Report 17A Pages (56-57, 67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 4. The Chairman of the Audit Committee is Compliant The Chairman of the Audit not the Chairman of the Board or of any Committee is not the Chairman of other committee. the Board or of any other committee.
References: SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-committees/ Supplement to Recommendation 3.2 1. Audit Committee approves all non-audit Compliant The Audit Committee approves all services conducted by the external audit and non-audit services auditor. conducted by its external auditor, Isla Lipana & Co. (member firm of the PwC Network) SEC Form – I-ACGR * Updated 21Dec2017 Page 23 of 91
References: Definitive Information Statement, Page 9, Item 9 and Page 24, Item 7: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Audit Committee Charter: Please see Annex “B” 2. Audit Committee conducts regular Non- The Company became a Publicly Listed meetings and dialogues with the external compliant Company (PLC) last October 26, 2020. audit team without anyone from management present. In FY2020, the Audit Committee was not able to conduct meetings with the external audit team without anyone from management present. However, in FY 2021, the Audit Committee will endeavor to hold such meetings. Optional: Recommendation 3.2 1. Audit Committee meet at least four times Non- The Company became a Publicly Listed during the year. compliant Company (PLC) on October 26, 2020.
In FY2020, the present Audit Committee was formed after the Company’s IPO in October 2020. After the IPO in October, the Audit Committee met once given the limited time. However, for FY2021, the Audit Committee has already met 3 times. It likewise adopted the minimum number of meetings in its Audit Committee Charter.
Audit Committee Charter: SEC Form – I-ACGR * Updated 21Dec2017 Page 24 of 91 Please see Annex “B” 2. Audit Committee approves the Non- For FY 2020, the Audit Committee did not appointment and removal of the internal compliant appoint an internal auditor. auditor. For FY 2021, Mr. Anthony Vergel Velasco was appointed as Internal Audit Director.
The Audit Committee Charter (please see Annex “B”) also indicates that the Audit Committee shall approve the appointment and removal of the internal auditor. Recommendation 3.3
1. Board establishes a Corporate Compliant The Board has established a Governance Committee tasked to assist Corporate Governance Committee. the Board in the performance of its corporate governance responsibilities, References: including the functions that were formerly assigned to a Nomination and Corporate Governance Functions Remuneration Committee. and members: Manual on Corporate Governance, Pages 9, Item No. 4 (B) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-committees/ SEC Form – I-ACGR * Updated 21Dec2017 Page 25 of 91 2. Corporate Governance Committee is Non- For FY2020, the Corporate Governance composed of at least three members, all compliant Committee was composed of the of whom should be independent directors. following: 1. Amando M. Tetangco, Jr. (Chairman, Independent Director) 2. Roman Felipe S. Reyes (member, Independent Director) 3. Francisco Ed Lim (member, Non- executive director)
References: Committee composition: SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscViewer .do?edge_no=6631ccb980c04d7a5d542a f6f1e997b9
Qualifications and background of Corporate Governance Committee: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscViewer .do?edge_no=6631ccb980c04d7a5d542a f6f1e997b9
For FY2021, the Corporate Governance Committee is now composed of the following members to make its composition compliant with the IACGR, having at least 3 members all of whom are independent directors: 1. Jose Pamintuan de Jesus (Chairman, Independent Director) 2. Amando M. Tetangco, Jr. (Member, Independent Director) 3. Roman Felipe S. Reyes (member, Independent Director) SEC Form – I-ACGR * Updated 21Dec2017 Page 26 of 91 4. Francisco Ed Lim (member, Non- executive director) 3. Chairman of the Corporate Governance Compliant For FY2020, the Corporate Committee is an independent director. Governance Committee Chairman is an independent director.
References: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-executives/
For 2021, the Corporate Governance Committee Chairman is an independent director. Optional: Recommendation 3.3. 1. Corporate Governance Committee meet Non- In FY2020, the Corporate Governance at least twice during the year. compliant Committee was formed after the Company’s IPO in October 2020and there were no meetings held by said Committee for said year. However, for FY2021, the Corporate Governance Committee has already met twice, with more meetings to be scheduled during the year. This principle will likewise be incorporated in the CG Committee Charter. Recommendation 3.4 1. Board establishes a separate Board Risk Compliant The Board has established a Board Oversight Committee (BROC) that should Risk Oversight Committee (BROC). be responsible for the oversight of a
SEC Form – I-ACGR * Updated 21Dec2017 Page 27 of 91 company’s Enterprise Risk Management References: system to ensure its functionality and BROC information and functions: effectiveness. Manual on Corporate Governance, Pages 9, Item No. 4 (C) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Website https://corporate.convergeict.com/ board-committees/ 2. BROC is composed of at least three Compliant The Board Risk Oversight Committee members, the majority of whom should be (BROC) is composed of the following: independent directors, including the 1. Amando M. Tetangco, Jr. Chairman. (Chairman, Independent Director) 2. Roman Felipe S. Reyes (member, Independent Director) 3. Francisco Ed. Lim (members, Non-executive director)
References: Composition of BROC: SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Qualifications and background of BROC Committee: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 SEC Form – I-ACGR * Updated 21Dec2017 Page 28 of 91
Website https://corporate.convergeict.com/ board-committees/ 3. The Chairman of the BROC is not the Non- For FY2020, the Chairman of the BROC, Chairman of the Board or of any other compliant Gov. Amando M. Tetangco, Jr. was also committee. the Chairman of the Corporate Governance Committee .
However, for FY 2021, the Company is already compliant as Gov. Amando M. Tetangco, Jr. is now only Chairman of the BROC and not of the Board and any other committee.
Results of the ASM and Organizational Meeting of the Board of Directors: Please see Annex “D” 4. At least one member of the BROC has Compliant The BROC members are amongst the relevant thorough knowledge and leading figures in their industries of experience on risk and risk management. expertise. They have unparalleled experience and knowledge in risk management.
Qualifications and background of BROC members: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
BROC information and functions: Manual on Corporate Governance, Pages 9, Item No. 4 (C) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- SEC Form – I-ACGR * Updated 21Dec2017 Page 29 of 91 Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Website https://corporate.convergeict.com/ board-committees/ Recommendation 3.5 1. Board establishes a Related Party Compliant The Board has established a RPT Transactions (RPT) Committee, which is Committee and the same functions tasked with reviewing all material related in conjunction with the Audit party transactions of the company. Committee to review breaches in materiality threshold.
References: Composition of RPT Committee: SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-committees/ 2. RPT Committee is composed of at least Compliant The RPT Committee is composed of three non-executive directors, two of the following: whom should be independent, including 1. Roman Felipe S. Reyes the Chairman. (Chairman) 2. Jose Pamintuan De Jesus (member) 3. Amando M. Tetangco Jr. (member) 4. Maria Grace Y. Uy (member) 5. Saurabh N. Agarwal (member)
References: SEC Form – I-ACGR * Updated 21Dec2017 Page 30 of 91 SEC Annual Report 17A Pages (66-67) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Website https://corporate.convergeict.com/ board-committees/
Qualifications and type of directorship: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 3.6 1. All established committees have a For FY2020, the Board Committees did not Committee Charter stating in plain terms have said committee charters. their respective purposes, memberships, structures, operations, reporting process, For FY2021, the Board Committees are resources and other relevant information. putting in place their respective charters Non- which will state their individual purposes, 2. Committee Charters provide standards for compliant membership, structure, operations, evaluating the performance of the reporting process, resources, and relevant Committees. information, with standards for evaluation. For FY2021, these Committee Charters will 3. Committee Charters were fully disclosed be fully disclosed on the Company’s on the company’s website. website.
Principle 4: To show full commitment to the company, the directors should devote the time and attention necessary to properly and effectively perform their duties and responsibilities, including sufficient time to be familiar with the corporation’s business.
Recommendation 4.1
SEC Form – I-ACGR * Updated 21Dec2017 Page 31 of 91 1. The Directors attend and actively Compliant The directors attend and actively participate in all meetings of the Board, participate in all meetings of the Committees and shareholders in person or Board. through tele-/videoconferencing conducted in accordance with the rules References: and regulations of the Commission. Minutes of the Board Meeting in the Definitive Information Statement: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Copies of the minutes of these decisions with the Office of the Corporate Secretary. 2. The directors review meeting materials for Compliant All members of the Board were given all Board and Committee meetings. relevant meeting materials.
References: Minutes of the Board Meeting in the Definitive Information Statement: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Copies of the minutes of these decisions with the Office of the Corporate Secretary. 3. The directors ask the necessary questions Compliant The directors attend and actively or seek clarifications and explanations participate in all meetings of the during the Board and Committee Board. meetings. References: SEC Form – I-ACGR * Updated 21Dec2017 Page 32 of 91 Minutes of the Board Meeting in the Definitive Information Statement: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Copies of the minutes of these decisions with the Office of the Corporate Secretary. Recommendation 4.2 1. Non-executive directors concurrently serve Compliant The non-executive directors do not in a maximum of five publicly-listed hold directorship positions in more companies to ensure that they have than five publicly listed companies. sufficient time to fully prepare for minutes, challenge Management’s References: proposals/views, and oversee the long- term strategy of the company. SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 4.3 1. The directors notify the company’s board Compliant The directors disclosed their before accepting a directorship in another directorships in another PLCs through company. their disclosure statements in relation to the IPO, as filed with the SEC and PSE.
Optional: Principle 4 1. Company does not have any executive Compliant The Company’s executive directors directors who serve in more than two namely, Dennis Anthony H. Uy and boards of listed companies outside of the Maria Grace Y. Uy, do not serve in group.
SEC Form – I-ACGR * Updated 21Dec2017 Page 33 of 91 any publicly-listed company outside the group.
References:
SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. Company schedules board of directors’ Compliant The meetings of the board of meetings before the start of the financial directors are scheduled and held year. every second Tuesday of every other month.
Copies of the minutes of these decisions with the Office of the Corporate Secretary. 3. Board of directors meet at least six times Compliant The Board of Directors met 8 times during the year. prior to the IPO on October 26, 2020. Thereafter, when the Company became a publicly listed company in October 2020 the Board had two (2) meetings.
References: SEC Annual Report 17A Page 66 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 4. Company requires as minimum quorum of Non- The Company observes the quorum and at least 2/3 for board decisions. compliant voting requirements under the Revised Corporation Code. A quorum consists of a majority of the entire membership of the Board, under Article III Section 8 of the Amended By-Laws of the Company.
SEC Form – I-ACGR * Updated 21Dec2017 Page 34 of 91 References: Amended By-Laws https://corporate.convergeict.com/wp- content/uploads/2021/05/CONVERGE- Amended-By-Laws-28-SEPT-2020.pdf
However, for mandatory matters, the Company requires 2/3 quorum and voting members. (i.e. for RPT)
Related Party Transactions Policy: https://corporate.convergeict.com/wp- content/uploads/2021/05/FINAL-4.24.2021- Related-Party-Transactions-Policy-1-1.pdf
Principle 5: The board should endeavor to exercise an objective and independent judgment on all corporate affairs Recommendation 5.1 1. The Board has at least 3 independent Compliant The Board has at least 3 independent directors or such number as to constitute directors: one-third of the board, whichever is higher. 1. Jose Pamintuan de Jesus (Chairman of the Board, Independent Director) 2. Amando M. Tetangco, Jr. (Independent Director) 3. Roman Felipe S. Reyes (Independent Director)
The Company likewise abides with the provisions of the Revised Corporation Code (RCC), as evidenced in its Annual report.
References:
SEC Form – I-ACGR * Updated 21Dec2017 Page 35 of 91 SEC Annual Report 17A Page (66), Item 13 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 5.2 1. The independent directors possess all the Compliant Mr. De Jesus, Mr. Tetangco Jr., and qualifications and none of the Mr. Reyes, our independent directors disqualifications to hold the positions. possess all the qualifications and none of the disqualifications to become independent directors.
References:
Qualifications and background of Independent directors: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Certifications Annexes C-1, C-2, and C-3 in the Definitive Information Statement: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf Supplement to Recommendation 5.2 1. Company has no shareholder agreements, Compliant There are no such agreements, by- by-laws provisions, or other arrangements laws provisions or other arrangements that constrain the directors’ ability to vote that constrain the directors’ ability to independently. vote independently.
References: SEC Form – I-ACGR * Updated 21Dec2017 Page 36 of 91 https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf Recommendation 5.3 1. The independent directors serve for a Our independent directors started to cumulative term of nine years (reckoned serve in the Company as of June 2020. from 2012). 2. The company bars an independent This term limit will be included in the Board director from serving in such capacity after Charter for FY2021. the term limit of nine years. Non- 3. In the instance that the company retains compliant an independent director in the same capacity after nine years, the board provides meritorious justification and seeks shareholders’ approval during the annual shareholders’ meeting.
Recommendation 5.4 1. The positions of Chairman of the Board Compliant The Chairman of the Board is Mr. Jose and Chief Executive Officer are held by Pamintuan de Jesus while the Chief separate individuals. Executive Officer is Mr. Dennis Anthony H. Uy.
References: Separation of Chairman and CEO: Manual on Corporate Governance, Page 3-4, Item 3 (C): https://corporate.convergeict.com/ wp-content/uploads/2021/05/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 37 of 91 Position and background of Chairman and CEO: SEC Annual Report 17A Pages (56-57) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. The Chairman of the Board and Chief Compliant The Chairman and the CEO have Executive Officer have clearly defined clearly defined responsibilities. responsibilities. References: Manual on Corporate Governance pages 3-4, item 3 (C) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Recommendation 5.5 1. If the Chairman of the Board is not an Compliant Mr. de Jesus is the Chairman of the independent director, the board Board and an Independent Director, designates a lead director among the and performs his duties as such in independent directors. accordance with the Revised Manual on Corporate Governance.
References: Certifications Annex C-1 of the Definitive Information Statement https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Manual on Corporate Governance pages 3-4, item 3 (C)
SEC Form – I-ACGR * Updated 21Dec2017 Page 38 of 91 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Recommendation 5.6 1. Directors with material interest in a Compliant Directors with material interest transaction affecting the corporation adhere to the principle to abstain abstain from taking part in the from taking part on transaction deliberations on the transaction. deliberations.
This was further embodied in the RPT policy:
References:
RPT Policy Pages 7-8, Item 5 (5.1.2 and 5.1.5) https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1.pdf Recommendation 5.7 1. The non-executive directors (NEDs) have Non- The Company had its IPO in October 2020, separate periodic meetings with the compliant which necessitated to hold board external auditor and heads of the internal meetings with complete attendance. audit, compliance and risk functions, without any executive present. For FY2021, the Board will hold its NED 2. The meetings are chaired by the lead Non- meetings. independent director. compliant Optional: Principle 5 1. None of the directors is a former CEO of Compliant Mr. Dennis Anthony H. Uy presently the company in the past 2 years. serves as the Company’s CEO and held the same position for more than 2 years. There were no former CEOs
SEC Form – I-ACGR * Updated 21Dec2017 Page 39 of 91 in the past 2 years holding a board seat.
Principle 6: The best measure of the Board’s effectiveness is through an assessment process. The Board should regularly carry out evaluations to appraise its performance as a body, and assess whether it possesses the right mix of backgrounds and competencies. Recommendation 6.1 1. Board conducts an annual self-assessment The Company became a Publicly Listed of its performance as a whole. Company (PLC) last October 26, 2020. 2. The Chairman conducts a self-assessment For FY2020, the Board did not yet conduct of his performance. such self-assessment after the IPO.
Non- 3. The individual members conduct a self- For FY2021, the Board will institute and compliant assessment of their performance. conduct a self-assessment process.
4. Each committee conducts a self- assessment of its performance.
5. Every three years, the assessments are Compliant This principle is included in the supported by an external facilitator. Revised Manual on Corporate Governance and will be implemented every 3 years starting from 2020. The Company plans to have this assessment facilitated by an external facilitator in 2023.
References: Manual on Corporate Governance https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Recommendation 6.2 1. Board has in place a system that provides, Non- The Company became a Publicly Listed at the minimum, criteria and process to compliant Company (PLC) last October 26, 2020.
SEC Form – I-ACGR * Updated 21Dec2017 Page 40 of 91 determine the performance of the Board, For FY2020, the Board did not yet conduct individual directors and committees. such self-assessment after the IPO.
For FY2021, the Board will institute and 2. The system allows for a feedback conduct a self-assessment process. This mechanism from the shareholders. self-assessment process will allow a feedback mechanism from the shareholders.
Principle 7: Members of the Board are duty-bound to apply high ethical standards, taking into account the interests of all stakeholders. Recommendation 7.1 1. Board adopts a Code of Business Conduct Compliant The Board adopts a well-established and Ethics, which provide standards for Code of Business Conduct and professional and ethical behavior, as well Ethics. as articulate acceptable and unacceptable conduct and practices in References: internal and external dealings of the https://corporate.convergeict.com/ company. wp-content/uploads/2021/05/FINAL- CODE-OF-BUSINESS-ETHICS- POLICY_V2.pdf 2. The Code is properly disseminated to the Compliant The Code was made available to the Board, senior management and Board, senior management, and employees. employees through the corporate website and internal email communications. Trainings on the Code are being conducted for new hires and all employees are required to confirm their knowledge and acceptance of the Code.
References: Website https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL-
SEC Form – I-ACGR * Updated 21Dec2017 Page 41 of 91 CODE-OF-BUSINESS-ETHICS- POLICY_V2.pdf
3. The Code is disclosed and made available Compliant The Code is uploaded in the to the public through the company Company’s website. website. Reference: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- CODE-OF-BUSINESS-ETHICS- POLICY_V2.pdf Supplement to Recommendation 7.1 1. Company has clear and stringent policies Compliant The Company has well-established and procedures on curbing and penalizing policies and programs that combat company involvement in offering, paying any form of bribery and corruption. and receiving bribes. The Code was made available to the Board, senior management, and employees through the corporate website and internal email communications. Trainings on these policies are being conducted for new hires and all employees are required to confirm their knowledge and acceptance of these policies.
References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- ABAC-Policy.pdf
Sustainability Report attached to our Annual Report (pages 188-190) https://corporate.convergeict.com/ wp-
SEC Form – I-ACGR * Updated 21Dec2017 Page 42 of 91 content/uploads/2020/10/CNVRG_FY 20_17A_vF.pdf Recommendation 7.2 1. Board ensures the proper and efficient Compliant Compliance with Key Policies are implementation and monitoring of evidenced by the Annual Key compliance with the Code of Business Compliance Policies Confirmation roll Conduct and Ethics. out. Th Company has likewise 2. Board ensures the proper and efficient Compliant instituted its whistleblowing process implementation and monitoring of on violations of the Code and compliance with company internal ensures that a thorough investigation policies. is done on these reports.
Sustainability Report attached to our Annual Report (pages 188-190) https://corporate.convergeict.com/ wp- content/uploads/2020/10/CNVRG_FY 20_17A_vF.pdf Disclosure and Transparency Principle 8: The company should establish corporate disclosure policies and procedures that are practical and in accordance with best practices and regulatory expectations. Recommendation 8.1 1. Board establishes corporate disclosure Compliant The Board adopts the disclosure rules policies and procedures to ensure a of the Philippine Stock Exchange and comprehensive, accurate, reliable and Securities and Exchange Commission timely report to shareholders and other and which is also now embodied in stakeholders that gives a fair and the Insider Trading Policy. For FY2020, complete picture of a company’s financial the Company has made material condition, results and business operations. information disclosures.
References:
SEC Annual Report 17-A (p. 68 on the list of disclosures for FY2020)
SEC Form – I-ACGR * Updated 21Dec2017 Page 43 of 91 https://corporate.convergeict.com/ wp- content/uploads/2020/10/CNVRG_FY 20_17A_vF.pdf
Insider Trading Policy: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- VERSION-Insider-Trading-Policy-1.pdf Supplement to Recommendations 8.1 1. Company distributes or makes available Compliant The Company has made available its annual and quarterly consolidated reports, annual and quarterly consolidated cash flow statements, and special audit reports, cash flow statements, and revisions. Consolidated financial special audit revisions, as well as the statements are published within ninety (90) timely reporting of its consolidated days from the end of the fiscal year, while financial statements. interim reports are published within forty- five (45) days from the end of the reporting Our 17-A and 17-Q are published period. within 90 days and 45 days respectively after the end of the reporting period.
References: SEC Annual Report 17A for FY 2020 (Financial – pages 35-54; 71-179) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Third Quarter Report (FY2020) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=c2f11274e8cfb34 c0de8473cebbd6407
First Quarter Report (FY2021)
SEC Form – I-ACGR * Updated 21Dec2017 Page 44 of 91 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=c9a83dcfab4291 165d542af6f1e997b9
Reports and Statements Website: https://corporate.convergeict.com/i nvestor-relations/#sec-pse-disclosure- anchor 2. Company discloses in its annual report the Compliant The Company’s Annual Report principal risks associated with the identity provides exhaustive explanations on of the company’s controlling shareholders; risks that might affect the business the degree of ownership concentration; and shareholders. cross-holdings among company affiliates; and any imbalances between the References: controlling shareholders’ voting power and SEC Annual Report 17A, Page 22-33 overall equity position in the company. https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 8.2 1. Company has a policy requiring all Compliant For FY2020, the directors were directors to disclose/report to the required to disclose their dealings in company any dealings in the company’s company’s shares for the filing of shares within three business days. their respective SEC Form 23-A. 2. Company has a policy requiring all officers Compliant to disclose/report to the company any For FY2021, the Company has an dealings in the company’s shares within Insider Trading Policy that requires three business days. directors and officers to disclose/report to the Company any dealings in the company’s shares within three business days.
References: Insider Trading Policy:
SEC Form – I-ACGR * Updated 21Dec2017 Page 45 of 91 https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- VERSION-Insider-Trading-Policy-1.pdf Supplement to Recommendation 8.2 1. Company discloses the trading of the Compliant The Company discloses the trading corporation’s shares by directors, officers of the corporation’s shares by (or persons performing similar functions) directors, officers (or persons and controlling shareholders. This includes performing similar functions) and the disclosure of the company's purchase controlling shareholders through: of its shares from the market (e.g. share buy-back program). Statement of Changes in Beneficial Ownership of Securities (Form 23-B). Note that as of date, only the Form 23-A has been published, there being no succeeding trades. https://corporate.convergeict.com/ wp-content/uploads/2021/02/001- FORM-23-A-OWEN-KIEFFER-OCAMPO- IRO.pdf
Public Ownership Report, https://corporate.convergeict.com/ wp-content/uploads/2021/02/005- Amend-1Public-Ownership- Report.pdf
List of Top 100 Stockholders – 31 Dec 2020 https://corporate.convergeict.com/ wp-content/uploads/2021/02/002- 01.08.21-Top100-stockholders-as-of- Dec-2020-rev.pdf
List of Top 100 Stockholders – 30 April 2021, Annex D of the Definitive Information Statement -Page 22 SEC Form – I-ACGR * Updated 21Dec2017 Page 46 of 91 https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Discussions on beneficial ownership of securities SEC Annual Report 17A, Page 62-63 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Conglomerate Map as of 31 December 2020 SEC Annual Report 17A, Page 179 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 8.3 1. Board fully discloses all relevant and Compliant The individual board members’ material information on individual board experiences and qualifications, and members to evaluate their experience assessment of any potential conflicts and qualifications, and assess any of interest, are fully disclosed. potential conflicts of interest that might affect their judgment. References: SEC Annual Report 17A, Pages 56-58, 62-63 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Definitive Information Statement Pages 17-20 https://corporate.convergeict.com/ wp- SEC Form – I-ACGR * Updated 21Dec2017 Page 47 of 91 content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Conflict of Interest Policy: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Conflicts-of-Interest-Policy.pdf
Conflicts of Interest declarations will also be sent to the Board members for FY2021. 2. Board fully discloses all relevant and Compliant The individual key executives’ material information on key executives to experiences and qualifications, and evaluate their experience and assessment of any potential conflicts qualifications, and assess any potential of interest, are fully disclosed. conflicts of interest that might affect their Likewise, these key executives have judgment. executed conflicts of interest disclosure forms.
References: SEC Annual Report 17A, Pages 58-61 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Definitive Information Statement Pages 17-20 https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Conflict of Interest Policy:
SEC Form – I-ACGR * Updated 21Dec2017 Page 48 of 91 https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Conflicts-of-Interest-Policy.pdf Recommendation 8.4 1. Company provides a clear disclosure of its Each board director receives a set policies and procedure for setting Board amount of P50,000 per board remuneration, including the level and mix meeting and P30,000 per committee of the same. meeting attended.
References: SEC Annual Report 17A, Pages 61-62, https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d Compliant 7a5d542af6f1e997b9
Amended By-Laws Article III, Section 10 https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf 2. Company provides a clear disclosure of its Non- HR is currently developing a formal policies and procedure for setting compliant remuneration policy, consistent with executive remuneration, including the IACGR recommendations, for eventual level and mix of the same. compliance.
Remunerations of the Board and executives are available in the Company’s 17-A.
References: SEC Annual Report 17A, Pages 61-62 https://edge.pse.com.ph/openDiscViewer .do?edge_no=6631ccb980c04d7a5d542a f6f1e997b9 SEC Form – I-ACGR * Updated 21Dec2017 Page 49 of 91 3. Company discloses the remuneration on Non- The directors’ compensation is disclosed an individual basis, including termination compliant on an individual basis in the Annual Report and retirement provisions. but not the termination and retirement provisions.
References: SEC Annual Report 17A, Pages 61-62, https://edge.pse.com.ph/openDiscViewer .do?edge_no=6631ccb980c04d7a5d542a f6f1e997b9 Recommendation 8.5 1. Company discloses its policies governing Compliant The Company has its Conflict of Related Party Transactions (RPTs) and other Interest Policy in FY2020 and RPT unusual or infrequently occurring Policy in FY2021. transactions in their Manual on Corporate Governance. Directors with conflict of interest abide with the provisions of the RPT policy and Conflict of Interest Policy.
References:
Website – Conflict of Interest Policy: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Conflicts-of-Interest-Policy.pdf
Website – RPT Policy: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1-1.pdf
SEC Annual Report 17A Pages 65, 121-127 (Note 17)
SEC Form – I-ACGR * Updated 21Dec2017 Page 50 of 91 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. Company discloses material or significant Compliant The Company provides disclosures on RPTs reviewed and approved during the related party transactions. year. SEC Annual Report 17A Pages 65, 121-127 (Note 17) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Supplement to Recommendation 8.5 1. Company requires directors to disclose Compliant Directors with conflict of interest their interests in transactions or any other abide with the provisions of the RPT conflict of interests. policy and Conflict of Interest Policy.
References: SEC Annual Report 17A Pages 65, 121-127 (Note 17) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
RPT Policy: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1-1.pdf
Conflict of Interest Policy: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Conflicts-of-Interest-Policy.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 51 of 91 Optional : Recommendation 8.5 1. Company discloses that RPTs are Compliant RPTs always form part of the annual conducted in such a way to ensure that audited financial statements (See they are fair and at arms’ length. Note 17 of the Annual Report) to ensure that they are fair and at arms’ length.
References: SEC Annual Report 17A Pages 65, 121-127 (Note 17) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
RPT Policy: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1-1.pdf Recommendation 8.6 1. Company makes a full, fair, accurate and Compliant The Company adopts the PSE timely disclosure to the public of every disclosure rules and submit full, fair, material fact or event that occur, accurate and timely disclosure of particularly on the acquisition or disposal every material fact or even that of significant assets, which could adversely occur. affect the viability or the interest of its shareholders and other stakeholders. References:
SEC Annual Report 17-A (p. 68 on the list of disclosures for FY2020) https://corporate.convergeict.com/ wp- content/uploads/2020/10/CNVRG_FY 20_17A_vF.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 52 of 91 For FY2021, the board has also put in place its RPT Policy and adopted a provision on disclosures regarding material transactions.
References: RPT Policy: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- 4.24.2021-Related-Party-Transactions- Policy-1-1.pdf
SEC Annual Report 17A Pages 65, 121-127 (Note 17) https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
PSE Edge:
https://edge.pse.com.ph/companyD isclosures/form.do?cmpy_id=680 2. Board appoints an independent party to Compliant There were no acquisition or disposal evaluate the fairness of the transaction of assets made in FY2020. price on the acquisition or disposal of assets. Moreover, the Board, in its RPT policy provides that an independent party shall evaluate the fairness of the transaction price on the acquisition or disposal of assets to related parties.
References: RPT Policy: https://corporate.convergeict.com/ wp-content/uploads/2021/05/FINAL- SEC Form – I-ACGR * Updated 21Dec2017 Page 53 of 91 4.24.2021-Related-Party-Transactions- Policy-1-1.pdf Supplement to Recommendation 8.6 1. Company discloses the existence, Compliant The Company adopts the PSE justification and details on shareholder disclosure rules and submit full, fair, agreements, voting trust agreements, accurate and timely disclosure of confidentiality agreements, and such every material fact or even that other agreements that may impact on occur. the control, ownership, and strategic direction of the company. https://corporate.convergeict.com/i nvestor-relations/#sec-pse-disclosure- anchor
For FY2020, the list of disclosures made are in page 68 of the Annual Report. https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
PSE Edge:
https://edge.pse.com.ph/companyD isclosures/form.do?cmpy_id=680 Recommendation 8.7 1. Company’s corporate governance Compliant The Company has a sound Manual policies, programs and procedures are on Corporate Governance published contained in its Manual on Corporate and is likewise available for the Governance (MCG). public’s reference through the corporate website. 2. Company’s MCG is submitted to the SEC Compliant and PSE. The MCG was submitted to the SEC and PSE in June 2020 3. Company’s MCG is posted on its company Compliant website. References:
SEC Form – I-ACGR * Updated 21Dec2017 Page 54 of 91 Website: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Supplement to Recommendation 8.7 1. Company submits to the SEC and PSE an Compliant There are no formally approved updated MCG to disclose any changes in changes or updates to the MCG as its corporate governance practices. of date of submission of this IACGR. Any amendment will be submitted to the SEC and PSE.
References: Website: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Optional: Principle 8 1. Does the company’s Annual Report Compliant The Company discloses all relevant disclose the following information: information pertaining to the enumerations set forth by the IACGR. a. Corporate Objectives Compliant Corporate Objectives – page 5 b. Financial performance indicators Compliant (VMV)
c. Non-financial performance indicators Compliant Financial performance indicators – pages 35-54; 71-179 d. Dividend Policy Compliant Non-financial performance indicators e. Biographical details (at least age, Compliant – excerpts in pages 35-54 academic qualifications, date of first appointment, relevant experience, Dividend policy – pages 35, 113 and other directorships in listed companies) of all directors Biographical details – pages 56-58
SEC Form – I-ACGR * Updated 21Dec2017 Page 55 of 91
f. Attendance details of each director in Compliant Attendance details – page 66 all directors meetings held during the year Total remuneration of each director– pages 61-62 g. Total remuneration of each member of Compliant the board of directors References: SEC Annual Report 17A https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. The Annual Report contains a statement Compliant The Company’s Annual Report confirming the company’s full compliance contains a statement confirming the with the Code of Corporate Governance Company’s full compliance with the and where there is non-compliance, Code of Corporate Governance and identifies and explains reason for each where there is non-compliance, such issue. identifies and explains reason for each such issue.
References: SEC Annual Report 17A, Page 66 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Manual on Corporate Governance Pages 16-17: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf 3. The Annual Report/Annual CG Report Non- The Annual Report for FY2021 will contain discloses that the board of directors compliant a statement on the adequacy of the conducted a review of the company's Company’s internal controls/risk material controls (including operational, management systems.
SEC Form – I-ACGR * Updated 21Dec2017 Page 56 of 91 financial and compliance controls) and risk management systems. 4. The Annual Report/Annual CG Report Non- The Audit Committee Report will be contains a statement from the board of compliant formulated for FY2021, which will state the directors or Audit Committee commenting adequacy of the Company’s internal on the adequacy of the company's controls/risk management systems. Said internal controls/risk management systems. report will be attached to the SEC 17-A for 2021. 5. The company discloses in the Annual Compliant The Annual report of the Company Report the key risks to which the company discloses key risks that to which the is materially exposed to (i.e. financial, Company is/potentially exposed to. operational including IT, environmental, social, economic). References: SEC Annual Report 17A, Page 22-33 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Principle 9: The company should establish standards for the appropriate selection of an external auditor, and exercise effective oversight of the same to strengthen the external auditor’s independence and enhance audit quality. Recommendation 9.1 1. Audit Committee has a robust process for Compliant The Audit Committee oversees this approving and recommending the process. appointment, reappointment, removal, and fees of the external auditors. For FY2021, the Audit Committee has 2. The appointment, reappointment, Compliant formally embodied in its charter the removal, and fees of the external auditor is process for approving and recommended by the Audit Committee, recommending the appointment, approved by the Board and ratified by the reappointment, removal, and fees of shareholders. the external auditors.
3. For removal of the external auditor, the Compliant References: reasons for removal or change are Audit Committee Charter: disclosed to the regulators and the public Please see Annex “B”
SEC Form – I-ACGR * Updated 21Dec2017 Page 57 of 91 through the company website and required disclosures. Supplement to Recommendation 9.1 1. Company has a policy of rotating the lead Compliant Manual on Corporate Governance audit partner every five years. states the policy of rotating the lead audit partner every five years.
The present audit partner – Jan Michael Reyes was appointed as engagement partner for FY2020.
References: Manual on Corporate Governance Page 11, Item 7 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Audit Committee Charter: Please see Annex “B” Recommendation 9.2 1. Audit Committee Charter includes the Compliant These responsibilities have been Audit Committee’s responsibility on: embraced by the Audit Committee since its inception and are now i. assessing the integrity and embodied in the Audit Committee independence of external auditors; Charter for FY2021. ii. exercising effective oversight to review and monitor the external References: auditor’s independence and Audit Committee Charter: objectivity; and Please see Annex “B” iii. exercising effective oversight to review and monitor the effectiveness of the audit process, taking into consideration relevant
SEC Form – I-ACGR * Updated 21Dec2017 Page 58 of 91 Philippine professional and regulatory requirements.
2. Audit Committee Charter contains the Compliant For FY2020, the Audit Committee was Committee’s responsibility on reviewing formed to enhance the Board’s and monitoring the external auditor’s oversight capability over the suitability and effectiveness on an annual Company’s financial reporting, basis. internal control system, internal and external audit processes, and compliance with applicable laws and regulations.
Manual on Corporate Governance (p.9) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
For FY2021, the Audit Committee Charter presently provides that the Committee shall obtain reasonable assurance with respect to work of the external assurance providers.
References: Audit Committee Charter: Please see Annex “B” Supplement to Recommendations 9.2 1. Audit Committee ensures that the external Compliant The MCG and Audit Committee auditor is credible, competent and has the Charter provides that the Committee ability to understand complex related shall obtain reasonable assurance party transactions, its counterparties, and with respect to work of the external valuations of such transactions. assurance providers.
References: SEC Form – I-ACGR * Updated 21Dec2017 Page 59 of 91 Manual on Corporate Governance Page 11, Item 7 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Audit Committee Charter:
Please see Annex “B” 2. Audit Committee ensures that the external Compliant For FY2020, the Audit Committee was auditor has adequate quality control formed to enhance the Board’s procedures. oversight capability over the Company’s financial reporting, internal control system, internal and external audit processes, and compliance with applicable laws and regulations.
Manual on Corporate Governance (p.9) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
The Audit Committee Charter now provides that the Committee shall obtain reasonable assurance with respect to work of the external assurance providers.
References:
SEC Form – I-ACGR * Updated 21Dec2017 Page 60 of 91 Manual on Corporate Governance Page 11, Item 7 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Audit Committee Charter: Please see Annex “B” Recommendation 9.3 1. Company discloses the nature of non- Compliant The non-audit services performed in audit services performed by its external FY2020 by the external auditor was auditor in the Annual Report to deal with disclosed. the potential conflict of interest. References: Definitive Information Statement, Page 24: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf 2. Audit Committee stays alert for any Compliant The Audit Committee stays alert for potential conflict of interest situations, any potential conflict of interest by given the guidelines or policies on non- obtaining statement from the audit services, which could be viewed as external auditor about their impairing the external auditor’s objectivity. relationships with the Company, including the non-audit services performed in the past, and discuss the information with the external auditors to review and confirm their independence.
References:
SEC Form – I-ACGR * Updated 21Dec2017 Page 61 of 91 Manual on Corporate Governance (p.9) https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Audit Committee Charter Please see Annex “B” Supplement to Recommendation 9.3 1. Fees paid for non-audit services do not Compliant Fees paid to Isla Lipana & Co. in 2020 outweigh the fees paid for audit services. were as follows: Php2,500,000 for audit services and USD$60,000 for non-audit services (only in relation to IPO).
References: Definitive Information Statement, Page 24: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf Additional Recommendation to Principle 9 1. Company’s external auditor is duly Compliant Isla, Lipana & Co. is duly accredited accredited by the SEC under Group A by the SEC under the Group A category. category with SEC Accreditation No. 0142-SEC (Group A)
References: Please see attached Certificate of Accreditation as Annex “C” 2. Company’s external auditor agreed to be Compliant Isla Lipana and Co. was subjected to subjected to the SEC Oversight Assurance SOAR in 2019.
SEC Form – I-ACGR * Updated 21Dec2017 Page 62 of 91 Review (SOAR) Inspection Program 1. Year it was subjected to conducted by the SEC’s Office of the SOAR, if subjected – 2019 General Accountant (OGA). 2. Name of the Audit Firm – Isla Lipana & Co. 3. Members of the engagement team inspected by SEC – The names of the members of the engagement team were provided to the SEC during the SOAR inspection.
Principle 10: The company should ensure that the material and reportable non-financial and sustainability issues are disclosed. Recommendation 10.1 1. Board has a clear and focused policy on Compliant The Board has a clear and focused the disclosure of non-financial information, policy on the disclosure of non- with emphasis on the management of financial information. economic, environmental, social and governance (EESG) issues of its business, References: which underpin sustainability. SEC Annual Report 17A, Pages 180- 219 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 2. Company adopts a globally recognized Compliant The Company has adopted the GRI standard/framework in reporting framework. sustainability and non-financial issues. References: SEC Annual Report 17A, Sustainability Report in Pages 180-219 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Principle 11: The company should maintain a comprehensive and cost-efficient communication channel for disseminating relevant information. This channel is crucial for informed decision-making by investors, stakeholders and other interested users.
SEC Form – I-ACGR * Updated 21Dec2017 Page 63 of 91 Recommendation 11.1 1. Company has media and analysts’ Compliant The Company has media and briefings as channels of communication to analysts’ briefings which provide ensure the timely and accurate timely and accurate dissemination of dissemination of public, material and public, material and relevant relevant information to its shareholders information to its shareholders and and other investors. investors.
References: https://corporate.convergeict.com/n ews/ Supplemental to Principle 11 1. Company has a website disclosing up-to- Compliant The Company discloses the following date information on the following: up-to-date information:
a. Financial statements/reports (latest Compliant a. Financial statements report – quarterly) SEC Annual Report 17A https://edge.pse.com.ph/openDiscVi b. Materials provided in briefings to Compliant ewer.do?edge_no=6631ccb980c04d analysts and media 7a5d542af6f1e997b9
c. Downloadable annual report Compliant b. Materials provided in briefings to analysts and media – d. Notice of ASM and/or SSM Compliant https://corporate.convergeict.com/ wp- e. Minutes of ASM and/or SSM Compliant content/uploads/2021/02/CONVERG E-1Q2021-Investors-Briefing- f. Company’s Articles of Incorporation Compliant Presentation-vF-1.pdf and By-Laws c. Downloadable Annual Report - https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
d. Notice of ASM and/or SSM, Pages 2-3 – SEC Form – I-ACGR * Updated 21Dec2017 Page 64 of 91 https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
e. Minutes of ASM, Annex B – https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
f. Articles of Incorporation and By- Laws - https://corporate.convergeict.com/ wp- content/uploads/2020/10/CONVERG E-Amended-Articles-of-Incorporation- 28-SEPT-2020.pdf
https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf Additional Recommendation to Principle 11 1. Company complies with SEC-prescribed Compliant Main website: website template. https://corporate.convergeict.com/
Corporate Governance: https://corporate.convergeict.com/ corporate-governance/
Investor Relations:
SEC Form – I-ACGR * Updated 21Dec2017 Page 65 of 91 https://corporate.convergeict.com/i nvestor-relations/ Internal Control System and Risk Management Framework Principle 12: To ensure the integrity, transparency and proper governance in the conduct of its affairs, the company should have a strong and effective internal control system and enterprise risk management framework. Recommendation 12.1 1. Company has an adequate and effective Compliant Management has established a internal control system in the conduct of its system of internal controls business. embedded within the Company’s business processes, to provide reasonable assurance of the achievement of objectives related to operating effectiveness, financial reporting reliability, and compliance with applicable laws and regulations. A risk-based review of the internal control system is conducted by Internal Audit. To embody this principle, the Internal Audit Charter was adopted:
References: Internal Audit Charter – please see Annex “A” 2. Company has an adequate and effective Non- The Company became a Publicly Listed enterprise risk management framework in compliant Company (PLC) last October 26, 2020 and the conduct of its business. had an initial assessment of risk relating to the Company.
The Company will establish a sound enterprise risk management framework, compliant with existing laws and regulations, IACGR recommendations, and globally accepted risk management standards for FY2021.
SEC Form – I-ACGR * Updated 21Dec2017 Page 66 of 91
Our President is responsible for the development, implementation, maintenance, and improvement of risk management policies, processes, and documentation. We are in the process of setting up a dedicated ERM team reporting to the President.
Sustainability Report – pages 186-187 of the Annual Report https://corporate.convergeict.com/wp- content/uploads/2020/10/CNVRG_FY20_1 7A_vF.pdf
The Board appointed the Company’s President, Ms. Grace Uy as Chief Risk Officer in its FY2021 Organizational Meeting.
Results of ASM and Organizational Meeting for FY 2021 attached as Annex “D”.
The Company also hired a Risk Management Director to join in July 2021. He shall perform his duties in accordance with the Manual on Corporate Governance and all other applicable charters. Supplement to Recommendations 12.1 1. Company has a formal comprehensive Compliant The Company has established a enterprise-wide compliance program comprehensive compliance covering compliance with laws and program that covers both regulatory relevant regulations that is annually
SEC Form – I-ACGR * Updated 21Dec2017 Page 67 of 91 reviewed. The program includes and corporate governance aspects appropriate training and awareness of compliance. initiatives to facilitate understanding, acceptance and compliance with the The Compliance program is being said issuances. revisited annually for appropriate calibration and adherence to current compliance standards.
The Company’s compliance program is being led by the Corporate Compliance Officer, Atty. Laurice Esteban-Tuason.
Reference: The Compliance Program is attached as Annex “G” Optional: Recommendation 12.1 1. Company has a governance process on IT Compliant The Company has established an IT issues including disruption, cyber security, governance process to address and disaster recovery, to ensure that all issues related to disruption, cyber key risks are identified, managed and security, and disaster recovery. reported to the board. The Company has appointed a Chief Information Officer – Mr. Ulysses Naguit. Recommendation 12.2 1. Company has in place an independent Compliant The Company has in place an internal audit function that provides an independent audit function. independent and objective assurance, and consulting services designed to add References: value and improve the company’s Internal Audit Charter – Annex “A” operations. Recommendation 12.3 1. Company has a qualified Chief Audit Non- The Internal Auditor Director was hired in Executive (CAE) appointed by the Board. compliant 2021 and formally appointed by the Board
SEC Form – I-ACGR * Updated 21Dec2017 Page 68 of 91 of Directors during its organizational meeting on May 28, 2021.
His responsibilities will be stated in his board appointment and in the MCG.
References: Manual on Corporate Governance Item 8, Page 12: https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf
Results of the ASM and Organizational Meeting – Annex “D” 2. CAE oversees and is responsible for the Compliant The Internal Audit Director leads the internal audit activity of the organization, Company in overseeing the internal including that portion that is outsourced to audit activity of the organization. a third party service provider. References: Manual on Corporate Governance Item 8, Page 12: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Internal Audit Charter: Please see Annex “A” 3. In case of a fully outsourced internal audit Compliant The Company’s Internal Audit is not activity, a qualified independent outsourced either fully or partially. executive or senior management personnel is assigned the responsibility for managing the fully outsourced internal audit activity. SEC Form – I-ACGR * Updated 21Dec2017 Page 69 of 91 Recommendation 12.4 1. Company has a separate risk Non- The Company will establish a formal management function to identify, assess compliant enterprise risk management framework, and monitor key risk exposures. compliant with existing laws and regulations, IACGR recommendations, and globally accepted risk management standards for FY2021.
Our President is responsible for the development, implementation, maintenance, and improvement of risk management policies, processes, and documentation. We are in the process of setting up a dedicated ERM team reporting to the President.
Sustainability Report – pages 186-187 of the Annual Report https://corporate.convergeict.com/wp- content/uploads/2020/10/CNVRG_FY20_1 7A_vF.pdf
The Board appointed the Company’s President, Ms. Grace Uy as Chief Risk Officer in its FY2021 Organizational Meeting.
Results of ASM and Organizational Meeting for FY 2021 attached as Annex “D”.
The Company also hired a Risk Management Director to join in July 2021. He shall perform his duties in accordance with the Manual on Corporate
SEC Form – I-ACGR * Updated 21Dec2017 Page 70 of 91 Governance and all other applicable charters. Supplement to Recommendation 12.4 1. Company seeks external technical Non- The Company will establish a sound support in risk management when such compliant enterprise risk management framework, competence is not available internally. compliant with existing laws and regulations, IACGR recommendations, and globally accepted risk management standards for FY2021.
The Company also hired a Risk Officer to join in July 2021. He shall perform his duties in accordance with the Manual on Corporate Governance and all other applicable charters. Recommendation 12.5 1. In managing the company’s Risk Non- The Company will establish a sound Management System, the company has a compliant enterprise risk management framework, Chief Risk Officer (CRO), who is the compliant with existing laws and ultimate champion of Enterprise Risk regulations, IACGR recommendations, Management (ERM). and globally accepted risk management standards for FY2021.
Our President is responsible for the development, implementation, maintenance, and improvement of risk management policies, processes, and documentation. We are in the process of setting up a dedicated ERM team reporting to the President.
Sustainability Report – pages 186-187 of the Annual Report https://corporate.convergeict.com/wp- content/uploads/2020/10/CNVRG_FY20_1 7A_vF.pdf SEC Form – I-ACGR * Updated 21Dec2017 Page 71 of 91
The Board appointed the Company’s President, Ms. Grace Uy as Chief Risk Officer in its FY2021 Organizational Meeting.
Results of ASM and Organizational Meeting for FY 2021 attached as Annex “D”.
The Company also hired a Risk Management Director to join in July 2021. He shall perform his duties in accordance with the Manual on Corporate Governance and all other applicable charters. 2. CRO has adequate authority, stature, Non- The Company will establish a sound resources and support to fulfill his/her compliant enterprise risk management framework, responsibilities. compliant with existing laws and regulations, IACGR recommendations, and globally accepted risk management standards for FY2021.
Our President is responsible for the development, implementation, maintenance, and improvement of risk management policies, processes, and documentation. We are in the process of setting up a dedicated ERM team reporting to the President.
Sustainability Report – pages 186-187 of the Annual Report https://corporate.convergeict.com/wp- content/uploads/2020/10/CNVRG_FY20_1 7A_vF.pdf SEC Form – I-ACGR * Updated 21Dec2017 Page 72 of 91
The Board appointed the Company’s President, Ms. Grace Uy as Chief Risk Officer in its FY2021 Organizational Meeting.
Results of ASM and Organizational Meeting for FY 2021 attached as Annex “D”.
The Company also hired a Risk Management Director to join in July 2021. He shall perform his duties in accordance with the Manual on Corporate Governance and all other applicable charters. Additional Recommendation to Principle 12 1. Company’s Chief Executive Officer and Non- There is no joint attestation for FY2020. Chief Audit Executive attest in writing, at compliant However, for FY2021, the CEO and the least annually, that a sound internal audit, Internal Audit Director will attest that a control and compliance system is in place sound internal audit, control and and working effectively. compliance system is in place and working effectively. Cultivating a Synergic Relationship with Shareholders Principle 13: The company should treat all shareholders fairly and equitably, and also recognize, protect and facilitate the exercise of their rights. Recommendation 13.1 1. Board ensures that basic shareholder rights Compliant The Company’s Manual on are disclosed in the Manual on Corporate Corporate Governance is compliant Governance. in disclosing the basic rights of its shareholders.
References: Manual on Corporate Governance Item 11, Pages 14-16:
SEC Form – I-ACGR * Updated 21Dec2017 Page 73 of 91 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf 2. Board ensures that basic shareholder rights Compliant The Company’s Manual on are disclosed on the company’s website. Corporate Governance is compliant in disclosing the basic rights of its shareholders and which is disclosed in the website.
References: Manual on Corporate Governance Item 11, Pages 14-16: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Supplement to Recommendation 13.1 1. Company’s common share has one vote Compliant The Company’s common share has for one share. one vote for one share.
References:
Amended By-Laws: https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf
Definitive Information Statement, Page 21: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG
SEC Form – I-ACGR * Updated 21Dec2017 Page 74 of 91 E-5.7.2021-Definitive-Information- Statement.pdf 2. Board ensures that all shareholders of the Compliant All shareholders of the same class are same class are treated equally with treated equally. respect to voting rights, subscription rights and transfer rights. References: Definitive Information Statement, Page 21: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Amended By-Laws: https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf 3. Board has an effective, secure, and Compliant Voting process is reflected in the efficient voting system. Definitive Information Statement.
References: Definitive Information Statement, Page 26-27: https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf
Amended By-Laws: https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG SEC Form – I-ACGR * Updated 21Dec2017 Page 75 of 91 E-Amended-By-Laws-28-SEPT- 2020.pdf
4. Board has an effective shareholder voting Compliant The Company is compliant with the mechanisms such as supermajority or Revised Corporation Code of the “majority of minority” requirements to Philippines and the By-Laws of the protect minority shareholders against Company require only a majority actions of controlling shareholders. vote, or 2/3 vote in certain reserved matters, for corporate actions.
This is intended to protect the rights of the minority shareholders.
Manual on Corporate Governance Page 15, Item 11 (A)(1): https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf 5. Board allows shareholders to call a special Compliant Special meetings may be held upon shareholders’ meeting and submit a written call signed by the proposal for consideration or agenda item shareholders of record. at the AGM or special meeting. Reference: Manual on Corporate Governance Page 14, Item 11 (A)(4): https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf 6. Board clearly articulates and enforces Compliant Minority shareholders have similar policies with respect to treatment of rights to all other shareholders and minority shareholders. are given the right to nominate directors.
SEC Form – I-ACGR * Updated 21Dec2017 Page 76 of 91 Reference: Manual on Corporate Governance Page 14-16, Item 11: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf 7. Company has a transparent and specific Compliant The Company’s Annual Report dividend policy. provides discussions on the Company’s Dividend Policy and dividend declarations.
References: Dividend Policy: SEC Annual Report 17A, Page 35 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Declaration of dividends: SEC Annual Report 17A, Audited Financial Report for FY2020 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Optional: Recommendation 13.1 1. Company appoints an independent party Non- The Company became a publicly-listed to count and/or validate the votes at the compliant company on October 26, 2020. Prior to Annual Shareholders’ Meeting. that date, the Company already conducted a shareholders’ meeting.
The Company has already appointed and independent party to validate the votes at the 2021 ASM.
References: SEC Form – I-ACGR * Updated 21Dec2017 Page 77 of 91 Definitive Information Statement, Page 26, Item 14: https://corporate.convergeict.com/wp- content/uploads/2021/02/CONVERGE- 5.7.2021-Definitive-Information- Statement.pdf Recommendation 13.2 1. Board encourages active shareholder Non- For FY2021, the Company has distributed participation by sending the Notice of compliant its DIS within 21 days from the date of ASM Annual and Special Shareholders’ which is what is mandated under the Meeting with sufficient and relevant Revised Corporation Code. information at least 28 days before the meeting. For 2022 ASM, the Company shall endeavor to distribute within the 28 day notice recommendation of the Code of Corporate Governance of PLCs.
References: Definitive Information Statement, Pages 2- 9 https://corporate.convergeict.com/wp- content/uploads/2021/02/CONVERGE- 5.7.2021-Definitive-Information- Statement.pdf Supplemental to Recommendation 13.2 1. Company’s Notice of Annual Compliant The Company’s Annual Stockholders Stockholders’ Meeting contains the Meeting Notice and Agenda following information: contains the following:
a. The profiles of directors (i.e., age, Director Profile – Pages 17-19 academic qualifications, date of first Re-appointment of auditor – Page 9, appointment, experience, and Item 9 directorships in other listed companies) Proxy documents – Pages 10-11
SEC Form – I-ACGR * Updated 21Dec2017 Page 78 of 91 b. Auditors seeking appointment/re- References: appointment Definitive Information Statement https://corporate.convergeict.com/ c. Proxy documents wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf Optional: Recommendation 13.2 1. Company provides rationale for the Compliant Agenda rationale for the ASM is agenda items for the annual stockholders reflected in the Definitive Information meeting Statement.
References: Definitive Information Statement. Pages 7-9 https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf Recommendation 13.3 1. Board encourages active shareholder Compliant The Results of the Annual participation by making the result of the Stockholders Meeting and Results of votes taken during the most recent the Organizational Meeting are Annual or Special Shareholders’ Meeting disclosed with the PSE on the same publicly available the next working day. day as the ASM.
References: SEC Annual Report 17A https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
Results of ASM and Organizational Meeting: Please see Annex “D” SEC Form – I-ACGR * Updated 21Dec2017 Page 79 of 91
For the FY2021 ASM, the disclosure was made on the same day, May 28, 2021, with the PSE. 2. Minutes of the Annual and Special Non- The Company became a publicly listed Shareholders’ Meetings were available on compliant company on October 26, 2020. the company website within five business days from the end of the meeting. The Minutes of the Stockholders’ Meeting dated September 24, 2020 were not made available in the website within 5 business days but were attached to the DIS.
References: Definitive Information Statement. Pages 28-32 https://corporate.convergeict.com/wp- content/uploads/2021/02/CONVERGE- 5.7.2021-Definitive-Information- Statement.pdf The Minutes of the Annual Stockholders’ Meeting dated May 28, 2021 will be uploaded in the website within 5 business days. He 1. Board ensures the attendance of the Compliant Relevant individuals attended the external auditor and other relevant ASM, as evidenced by the Minutes of individuals to answer shareholders the Meeting. questions during the ASM and SSM. References: Definitive Information Statement. Pages 28-32 https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG
SEC Form – I-ACGR * Updated 21Dec2017 Page 80 of 91 E-5.7.2021-Definitive-Information- Statement.pdf Recommendation 13.4 1. Board makes available, at the option of a Non- The Company recognizes the right of shareholder, an alternative dispute compliant shareholders as embodied in its Manual mechanism to resolve intra-corporate on Corporate Governance and provides disputes in an amicable and effective for protection of minority stockholders’ manner. interests.
Manual on Corporate Governance (pp. 15-16) https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf
The Board will make available, at the option of a shareholder, an alternative dispute mechanism to resolve intra- corporate disputes in an amicable and effective manner. 2. The alternative dispute mechanism is Non- The Company recognizes the right of included in the company’s Manual on compliant shareholders as embodied in its Manual Corporate Governance. on Corporate Governance and provides for protection of minority stockholders’ interests.
Manual on Corporate Governance (pp. 15-16) https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf
The Board will make available, at the option of a shareholder, an alternative SEC Form – I-ACGR * Updated 21Dec2017 Page 81 of 91 dispute mechanism to resolve intra- corporate disputes in an amicable and effective manner. Recommendation 13.5 1. Board establishes an Investor Relations Compliant Mr. Owen Kieffer D. Ocampo is the Office (IRO) to ensure constant appointed Investor Relations Officer. engagement with its shareholders. [email protected] [email protected] 09328912603
References: Definitive Information Statement, Page 22 https://corporate.convergeict.com/ wp- content/uploads/2021/02/CONVERG E-5.7.2021-Definitive-Information- Statement.pdf 2. IRO is present at every shareholder’s Non- The Company became a publicly listed meeting. Compliant company on October 26, 2020. There was no IRO present at the shareholders’ meeting for FY2020. The IRO was present at the shareholder’s meeting dated May 28, 2021 (FY2021). Supplemental Recommendations to Principle 13 1. Board avoids anti-takeover measures or Compliant The Company's By-Laws contain no similar devices that may entrench anti-takeover provisions. ineffective management or the existing controlling shareholder group Amended By-Laws https://corporate.convergeict.com/ wp- content/uploads/2021/05/CONVERG E-Amended-By-Laws-28-SEPT- 2020.pdf
SEC Form – I-ACGR * Updated 21Dec2017 Page 82 of 91 2. Company has at least thirty percent (30%) Non- The Company became a publicly listed public float to increase liquidity in the compliant company on October 26, 2020. Presently, market. the Company’s public float is currently at 20.43%. It is projected that by June 2024, the public float would reach 30%. Optional: Principle 13 1. Company has policies and practices to Compliant The Company encourages encourage shareholders to engage with shareholders engagement. the company beyond the Annual Stockholders’ Meeting References: Manual on Corporate Governance Page 18, Item 18: https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf
Investor Relations briefings: https://corporate.convergeict.com/i nvestor-relations/ 2. Company practices secure electronic Non- The Company became a publicly-listed voting in absentia at the Annual compliant company on October 26, 2020 and it Shareholders’ Meeting. already held its 2020 stockholders’ meeting prior to that date.
For FY 2021, the Company adopts electronic voting in absentia for stockholders’ meeting.
References: Definitive Information Statement, Page 7 (v) https://corporate.convergeict.com/wp- content/uploads/2021/02/CONVERGE- 5.7.2021-Definitive-Information- Statement.pdf SEC Form – I-ACGR * Updated 21Dec2017 Page 83 of 91 Duties to Stakeholders Principle 14: The rights of stakeholders established by law, by contractual relations and through voluntary commitments must be respected. Where stakeholders’ rights and/or interests are at stake, stakeholders should have the opportunity to obtain prompt effective redress for the violation of their rights. Recommendation 14.1 1. Board identifies the company’s various Compliant The Company was able to report stakeholders and promotes cooperation information on the Company’s between them and the company in policies and programs for its creating wealth, growth and sustainability. stakeholders.
References: SEC Annual Report 17A, Pages 180- 219 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Recommendation 14.2 1. Board establishes clear policies and Compliant The Company treats and protects programs to provide a mechanism on the stakeholders fairly. fair treatment and protection of stakeholders. References: Website: https://corporate.convergeict.com/i nvestor-relations/
Manual on Corporate Governance, Page 18, Item 18 https://corporate.convergeict.com/ wp-content/uploads/2020/10/CICT- Manual-on-Corporate-Governance- 15-JUNE-2020.pdf Recommendation 14.3 1. Board adopts a transparent framework Compliant The Company has a framework that and process that allow stakeholders to allows stakeholders to communicate communicate with the company and to with the Company and to obtain
SEC Form – I-ACGR * Updated 21Dec2017 Page 84 of 91 obtain redress for the violation of their redress for the violation of their rights rights. through the Whistleblower Policy.
References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Whistleblower-Policy.pdf Supplement to Recommendation 14.3 1. Company establishes an alternative Non- The Company may establish alternative dispute resolution system so that conflicts compliant mechanisms in the future. The same and differences with key stakeholders is mechanism is likewise mentioned in the settled in a fair and expeditious manner. Company’s MCG.
References: Manual on Corporate Governance, Page 18, Item 18: https://corporate.convergeict.com/wp- content/uploads/2020/10/CICT-Manual- on-Corporate-Governance-15-JUNE- 2020.pdf Additional Recommendations to Principle 14 1. Company does not seek any exemption Compliant The Company did not have any from the application of a law, rule or requests for exemption for FY2020. regulation especially when it refers to a corporate governance issue. If an exemption was sought, the company discloses the reason for such action, as well as presents the specific steps being taken to finally comply with the applicable law, rule or regulation.
2. Company respects intellectual property Compliant The Company has disclosed with the rights. PSE and SEC its efforts to combat piracy and violation of its intellectual property rights.
SEC Form – I-ACGR * Updated 21Dec2017 Page 85 of 91
References: SEC Annual Report 17A, Pages 19-21 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9 Optional: Principle 14 1. Company discloses its policies and Compliant The Company has policies and practices that address customers’ welfare programs focused on the satisfaction and welfare of its customers.
References: https://sites.google.com/convergeict .com/cxp-btsg- hub/yoda?authuser=0 2. Company discloses its policies and Compliant The Company has a practices that address supplier/contractor supplier/contractor selection process selection procedures. embodied in its procedure for accreditation.
Reference: External Service Provider Accreditation as Annex “H”
Principle 15: A mechanism for employee participation should be developed to create a symbiotic environment, realize the company’s goals and participate in its corporate governance processes. Recommendation 15.1 1. Board establishes policies, programs and Compliant The Company engages its procedures that encourage employees to employees in participating with actively participate in the realization of the Corporate Governance activities. company’s goals and in its governance. References: SEC Annual Report 17A, Page 66 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
SEC Form – I-ACGR * Updated 21Dec2017 Page 86 of 91 Supplement to Recommendation 15.1 1. Company has a reward/compensation Compliant The Board has approved the policy that accounts for the performance Employee Stock Option Plan (ESOP) of the company beyond short-term for employees of the Company. financial measures. Likewise, the Company has a performance assessment matrix which is linked to the merits of the employee, as reflected in his/her performance evaluation. 2. Company has policies and practices on Compliant The Company has sound policies health, safety and welfare of its and practices on health, safety and employees. welfare of its employees.
References: Website: https://corporate.convergeict.com/ wp-content/uploads/2021/05/Health- and-Safety-Manual-and-COVID19- Prevention-and-Control-Policy-1.pdf 3. Company has policies and practices on Compliant The Company has policies and training and development of its practices on the training and employees. development of its employees. It has established a Learning and Development department and Learning Management System, to empower employees to be more competitive in their respective fields. Recommendation 15.2 1. Board sets the tone and makes a stand Compliant The Company has a well-established against corrupt practices by adopting an Anti-Bribery and Anti-Corruption anti-corruption policy and program in its Policy, which was approved by the Code of Conduct. Board on June 10, 2019.
References:
SEC Form – I-ACGR * Updated 21Dec2017 Page 87 of 91 Anti-Bribery and Anti-Corruption Policy: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- ABAC-Policy.pdf 2. Board disseminates the policy and Compliant The Company cascades the Code of program to employees across the Conduct/Business Ethics and Anti- organization through trainings to embed Bribery and Anti-Corruption policies them in the company’s culture. through:
1. Internal email dissemination 2. New hires onboarding orientation 3. Policy specific trainings 4. Corporate website Supplement to Recommendation 15.2 1. Company has clear and stringent policies Compliant The Company has a well-established and procedures on curbing and penalizing Anti-Bribery and Anti-Corruption employee involvement in offering, paying Policy. and receiving bribes. References: Anti-Bribery and Anti-Corruption Policy: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- ABAC-Policy.pdf Recommendation 15.3 1. Board establishes a suitable framework for Compliant The Company has a Whistleblowing whistleblowing that allows employees to Policy, and a formal Whistleblowing freely communicate their concerns about Committee shall be established in the illegal or unethical practices, without fear future. of retaliation References:
SEC Form – I-ACGR * Updated 21Dec2017 Page 88 of 91 https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Whistleblower-Policy.pdf 2. Board establishes a suitable framework for Compliant The Company has a Whistleblowing whistleblowing that allows employees to Policy which provides that any have direct access to an independent redress or complaint, without fear of member of the Board or a unit created to retaliation, may be brought to handle whistleblowing concerns. Human Resources, Ethics Committee and CICT Legal – the units who handle whistleblowing concerns.
The Whistleblowing Policy will further be strengthened to provide access to an independent director.
References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Whistleblower-Policy.pdf
3. Board supervises and ensures the Compliant The Company has a Whistleblowing enforcement of the whistleblowing Policy which promotes involvement framework. of the board and the management.
References: https://corporate.convergeict.com/ wp-content/uploads/2020/10/FINAL- Whistleblower-Policy.pdf
Principle 16: The company should be socially responsible in all its dealings with the communities where it operates. It should ensure that its interactions serve its environment and stakeholders in a positive and progressive manner that is fully supportive of its comprehensive and balanced development. Recommendation 16.1
SEC Form – I-ACGR * Updated 21Dec2017 Page 89 of 91 1. Company recognizes and places Compliant The Company fosters a healthy importance on the interdependence interaction with communities in which between business and society, and it operates. promotes a mutually beneficial relationship that allows the company to References: grow its business, while contributing to the SEC Annual Report 17A, Page184, advancement of the society where it 187 operates. https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
CSR logs: Please see Annex “E” Optional: Principle 16 1. Company ensures that its value chain is Compliant The Company has enacted multiple - environmentally friendly or is consistent policies that work toward improving with promoting sustainable development its value chain and sustainability.
References: Occupational Safety and Health: https://corporate.convergeict.com/ wp-content/uploads/2021/05/Health- and-Safety-Manual-and-COVID19- Prevention-and-Control-Policy-1.pdf
Code of Business Ethics: https://corporate.convergeict.com/ wp-content/uploads/2021/04/FINAL- CODE-OF-BUSINESS-ETHICS- POLICY_V2.pdf
Sustainability Report: SEC Annual Report 17A, Pages 180- 219
SEC Form – I-ACGR * Updated 21Dec2017 Page 90 of 91 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
2. Company exerts effort to interact positively Compliant The Company fosters a healthy with the communities in which it operates interaction with communities in which it operates.
References: SEC Annual Report 17A, Sustainability Report - Page184, 187 https://edge.pse.com.ph/openDiscVi ewer.do?edge_no=6631ccb980c04d 7a5d542af6f1e997b9
CSR logs – Please see attached Annex “E”
SEC Form – I-ACGR * Updated 21Dec2017 Page 91 of 91
CONVERGE INFORMATION AND COMMUNICATIONS TECHNOLOGY SOLUTIONS, INC.
LIST OF ANNEXES – INTEGRATED ANNUAL CORPORATE GOVERNANCE REPORT
Annex A – Internal Audit Charter
Annex B – Audit Committee Charter
Annex C – Isla Lipana & Co. Certificate of Accreditation
Annex D – Results of the Annual Stockholders’ Meeting and Organizational Meeting for FY2021
Annex E – Corporate Social Responsibility (CSR) logs
Annex F – Performance Evaluation Framework
Annex G – Compliance Program
Annex H – External Service Provider Accreditation
Annex "A"
Annex "B"
Annex "C" Annex "D"
Annex "E" Q2 Marketing Services o Donation of 1,800 pcs PPE to different municipalities in certain areas in Tarlac and Pampanga
ANGELES CITY (April 17, 2020) Honorable Carmelo Lazatin Jr., PORAC, PAMPANGA (April 17, 2020) Representatives from the Mayor of Angeles City, and with Ms. Ic Calaguas, Executive municipality of Porac, Pampanga accepted 100 pcs. of PPE Assistant of the Angeles City Mayor accepting 200 pcs. of PPE . Q2 Marketing Services
MABALACAT, PAMPANGA (April 17, 2020) Hon. Chris Garbo, PROVINCE OF TARLAC (April 21, 2020) Honorable Susan Yap, Mayor of Mabalacat City accepted 150 pcs. PPE Governor of Tarlac Province accepted 300 pcs. of PPE and signed the deed of donation Q2 Marketing Services
SAN FERNANDO, PAMPANGA (April 21, 2020) Hon. Edwin MAGALANG, PAMPANGA (April 21, 2020) Mayor Romulo Santiago, Mayor of San Fernando Pampanga, accepted 150 pcs. of Pecson of Magalang Pampanga gladly received 50 pcs. of PPE PPE donation from Converge Q2 Marketing Services o Asean Convention Center - Provided connectivity - May 20 o Philippine Red Cross molecular laboratory in North Luzon- Provided Connectivity - May 22
CLARK, PAMPANGA (May 22, 2020) Converge ICT provides connectivity to The Philippine Red Cross Molecular Laboratory, the testing center for Central Luzon Mr Luciano Paras Jr Manager / Chapter Administrator, Philippine Red Cross Molecular Laboratory,Clark Freeport Zone, Mr Eduardo Buena Manager, PRC membership program, Mr. Marlon Pareno Converge Enterprise Unit Head CLARK, PAMPANGA (May 20, 2020)– Converge ICT provides connectivity to the Asean Convention Center, a quarantine facility for OFWs, PUIs and PUMs. In photo : Mr. Dionisio "Chito" Dychioco III - Asst. Vice President IT Q2 Marketing Services o IATF Head Quarter- Provided connectivity - May 14
QUEZON,CITY (May 14, 2020) Secretary Carlito Galvez, Chief Implementer of the National Action Plan Covid- 19 and Department of Information and Communications Technology Undersecretary Eliseo Rio, Jr Q2 Marketing Services
o Bayan ng Nasugbu- Donation of 1500 sacks of rice and Microbiz connectivity- May 29
NASUGBU, BATANGAS (May 29, 2020) Councilor Dennis Apacible and representative of Nasugbu Mayor, Tony Barcelon receive 1500 sacks of rice and broadband connectivity for the Nasugbu West Central School (DSWD temporary Office) PERFORMANCE EVALUATION FORM Annex "F" CONFIDENTIAL
Employee Name Hire Date
Position Immediate Leader
Date of Appointment to above position: Review Period
Status Date of Review
Part 1: Assessment of Objectives OBJECTIVES Target Weigthed No. Weight Achievement of Objectives Rating Specific / Measurable Completion Rating
1
2 3 4
TOTAL WEIGHT 0% Please check weights. Total must be 100%. 0.00
Comments about the employee's performance: PERFORMANCE EVALUATION FORM CONFIDENTIAL Part 2: Assessment of Core Competencies
Core No. Definition Rating Significant Events / Comments to Support the Rating Competencies
We are honest and accountable for our decisions and actions. We have the courage to do the right thing. We decide and act with the good of our stakeholders in mind. 4 - Exceeds expectations/can 1 Integrity We keep our promises and walk our talk. train others We stand by our values even in tough times. We are customers of each other.
We know our customers intimately. We build lasting relationships with the customers we value. 4 - Exceeds expectations/can 2 Customer Focus We are passionate about constantly innovating to delight our customers. train others Our customers’ experience reflect the Team Converge experience.
We are Team Converge. We are ONE. We converge, collaborate and work well together to achieve common goals. 4 - Exceeds expectations/can 3 Teamwork We treat each other with respect and embrace diversity. train others We communicate openly, honestly, and always give constructive feedback.
We share information, authority, and rewards with our people and provide the skills and resources, so they can take initiative and make decisions to achieve our common goals. 4 - Exceeds expectations/can 4 Empowerment We create a work environment where people potential can be discovered, train others developed and applied.
We strive to do and delier outstanding results in everything we do. We continuously improve ourselves and how we work to achieve superior 4 - Exceeds expectations/can 5 Excellence results. train others We are ordinary people doing extraordinary things and are rewarded well.
We are responsive and responsible in what we do. 3 - Demonstrates behavior most 6 Velocity We operate rapidly and swiftly considering other factors and risks of the time
Average Rating 3.83
Performance Evaluation Weight Weighted Rating
Part 1 Objectives 75% 0.00
Part 2 Core Competencies 25% 0.96 OVERALL PERFORMANCE RATING 0.96
Employee's Comments: Immediate Leader's Comments:
My performance evaluation was discussed with me. I have discussed this performance evaluation with the employee.
Employee's Signature over Printed Name / Date Immediate Leader's Signature over Printed Name / Date Received by HR Signed by Immediate Leader's Manager
RECEIVED BY HR: Leader to fill out if for Regularization, check the appropriate box. Recommended for regularization Not recommended for regularization INDIVIDUAL DEVELOPMENT PLAN CONFIDENTIAL
Employee Name Hire Date
Position Immediate Leader
Date of Appointment to above position: Review Period
Status Date of Review
Career Aspirations Indicate the employee's short, mid and long term aspirations and timelines. Write discussion points between the leader and employee.
Choose 1 or 2 competencies per competency type that you will develop in the coming year.
No. Core Competency Development PlanTarget Completion Status Remarks
Leadership Competencies
Technical Competencies LEADERSHIP COMPETENCIES DEFINITION Providing Motivation Support The ability to enhance others’ commitment to their work. Analytical Thinking The ability to tackle a problem by using a logical, systematic, sequential approach. Forward Thinking The ability to anticipate the implications and consequences of situations and take appropriate action to be prepared for possible contingencies. Strategic Thinking The ability to analyze the organization’s competitive position by considering market and industry trends, existing potential customers (internal and external), and strengths and weaknesses as compared to competitors. Initiative Identifying what needs to be done and doing it before being asked or before the situation requires it. Entrepreneurial Orientation The ability to look for and seize profitable business opportunities, willingness to take calculated risks to achieve business goals. Fostering Innovation The ability to develop, sponsor, or support the introduction of new and improved method, products, procedures, or technologies. Decisiveness The ability to make difficult decisions in a timely manner. Managing Change with Courage Initiates, supports, or champions organization change and supports others through the change process to successfully implement new initiatives. Decision-making and Accountability Makes rational, unambiguous and timely decisions that take into account risk and uncertainty. Critically identifies and analyzes problems, issues and opportunities to arrive at solutions in an effective and efficient and responsible manner. 5 - Significantly exceeded expectations 4 - Exceeded expectations 3 - Successfully met expectations 2 - Met most expectations / developing in role 1 - Did not meet expectations
5 - Role Model/Best Practitioner 4 - Exceeds expectations/can train others 3 - Demonstrates behavior most of the time 2 - Requires close supervision or guidance/developing 1 - Barely demonstrates the desired behavior/competence
Core Competencies Integrity Customer Focus Teamwork Empowerment Excellence Velocity
Providing Motivation Support Analytical Thinking Forward Thinking Strategic Thinking Initiative Entrepreneurial Orientation Fostering Innovation Decisiveness Managing Change with Courage Decision-making and Accountability
Annex "G''
BOARD COMPLIANCE REPORT
2020-2021
MAY 25
‘ CONVERGE ICT SOLUTIONS INC. COMPLIANCE MANAGEMENT GROUP
1
COMPLIANCE BOARD REPORT PURPOSE
This report is created to present the status and progress of the compliance programs and initiatives of Converge ICT Solutions Inc., starting from the inception of a full- fledged Compliance Department on August 2020 until present. The major areas of compliance which will be covered in this report are Sound Corporate Governance and Anti-bribery and Anti-corruption Awareness.
“We are committed in helping the Company conduct business with the highest ethical standard, in full compliance with applicable laws and regulations.” COMPLIANCE MISSION
OVERVIEW
Converge ICT Solutions Inc. launched its Annual Compliance Program last August 2020 which aims to introduce holistic approach and educate stakeholders, shift mindset towards compliance risk, and strengthen both its internal and external compliance policies. Since then, Compliance Team was able to complete 44 ABAC Trainings and 55 Compliance Orientations. During the ABAC training, Compliance Team summarized red flags shared by the participants and made a proposal to address the said red flags.
“To become a trusted strategic partner and trailblazers that ushers a culture of integrity and transparency in the service of the company.” COMPLIANCE VISION
2
TEAM
Converge ICT Solutions Inc. Compliance Team is composed of three individuals, headed by the Corporate Compliance Officer - Atty. Laurice P. Esteban-Tuason, and supported by the Business Compliance Manager - Marlyn E. Malabanan, and Business Compliance Specialist - John Michael C. Avila.
COMPLIANCE PROGRAM/POLICIES DETAILS
COMPLIANCE OWNER STATUS PROGRAMS Anti-bribery/Anti-Corruption John Michael Avila 44 Trainings (6 Trainings 2020; 38 Trainings Training and Marlyn 2021) Malabanan Compliance New-Hires John Michael Avila 55 Trainings (39 Trainings 2020; 16 Trainings Orientation and Marlyn 2021) Malabanan 1356 newly hired employees (843 Employees 2020; 513 Employees 2021) 2020 Key Compliance Marlyn Malabanan Rating: 88.26% CICT (out of 2231, 1969 Confirmation confirmed) a. Anti- Money Laundering Policy b. Anti-Bribery / Anti- Corruption Policy c. Whistleblower Policy
d. Conflict of Interest Policy
2020 Key Compliance Marlyn Malabanan Rating: 51.68% CICT (out of 2231, 1153 Confirmation confirmed) a. Code of Business Ethics V1 Policy
2021 Key Compliance Marlyn Malabanan Rating: Ongoing for 2021 Confirmation a. Anti- Money Laundering Policy b. Anti-Bribery / Anti- Corruption Policy
3
c. Whistleblower Policy
d. Conflict of Interest Policy
e. Code of Business Ethics V2 Policy Newsletter - Compliance & John Michael Avila 11 Issuances (7 Issuances 2020; 4 Issuances Ethics in Focus and Marlyn 2021) Malabanan Compliance “TEST YOUR Marlyn Malabanan 5 quiz activities were done for 2020. MIND” Quiz The goal of this quiz is to constantly engage and stimulate employees’ knowledge about Company policies. Incentives are given as reinforcement to this initiative. Compliance Project BIB John Michael Avila Completed – awaiting implementation (Business Integrity Guide) and Marlyn Malabanan Compliance Mission & Vision John Michael Avila Completed and approved by previous and Marlyn Compliance Officer. Malabanan Compliance Champions John Michael Avila On-going and Marlyn Malabanan Managing Workplace John Michael Avila Case summary and details, available upon Investigations and Marlyn request Malabanan Related Party Transactions Laurice Esteban- Completed – uploaded on Policy Tuason, Marlyn https://corporate.convergeict.com/corporate- Malabanan, and governance/#policies John Michael Avila Insider Trading Policy Laurice Esteban- Completed – uploaded on Tuason, Marlyn https://corporate.convergeict.com/corporate- Malabanan, and governance/#policies John Michael Avila
Note: Proof of programs/policies are available upon request.
4
5
Annex "H"