Reliance IT Building, 99 E. Rodriguez Jr. Ave, EXPLORE A WORLD Brgy. Ugong Pasig City +632 8667 0848 OF POSSIBILITIES: www.convergeict.com #ExperienceBetter Annual Report 2020

EXPLORE A WORLD OF POSSIBILITIES: 1 #EXPERIENCEBETTER

About the Cover Contents

A world of possibilities lies just right at our 2 Message from the Chairman fingertips, waiting to be explored. Seemingly infinite opportunities to be created, potentials 4 Message from the CEO to be unleashed, and relations to be nurtured are 8 Message from the President within reach. We at Converge believe that these 12 Experience Better should be within reach. Our Company was founded 12 Who We Are with the vision of empowering Filipinos, especially the unserved and underserved, to explore their 13 Vision, Mission, Values possibilities using connectivity as a tool. Through 14 History of Converge our world-class fiber optic technology, we equip 15 Organizational Structure individuals to uplift themselves. We enable 16 enterprises to pursue efficiency and growth. Fiber Internet Technology We help establish the Philippines as a globally 18 Onwards to the Future: Envisioning Connectivity for all Filipinos competitive nation. We provide Filipinos the better 20 Experience Excellence digital experience they deserve. 20 Financial Highlights

The new paradigm created by the pandemic 21 Key Consolidated Financial Highlights has placed us in a crucial position to support the 22 Operational Highlights nation in further embracing and adapting to the 28 Experience Superior new—and increasingly digital—normal. Cognizant 29 Go National of this pivotal role, Converge moves forward with an intensified commitment to provide world-class, 30 Products and Services fast and reliable internet services, and technology 32 Innovations solutions to every Filipino. 34 World-Class Partnerships 36 Awards and Recognition 38 Experience Commitment 44 Experience Fulfillment 44 Sustainability 46 COVID-19 Response 50 Corporate Governance 52 Risk Management 54 Board of Directors 60 Key Officers 64 Financial Statements 76 Corporate Information

Please refer to our 2020 SEC 17A Report for the Notes to the Financial Statements (https://corporate.convergeict.com/wp-content/uploads/2020/10/CNVRG_FY20_17A_vF.pdf) 2 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 3 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Message from the Chairman

DEAR FELLOW SHAREHOLDERS, reach over 6.1 million Filipino homes across the country, representing a quarter of total Philippine households. Your Company, Converge ICT Solutions, Inc., responds This brings the company closer to its target of reaching to our country’s urgent need for a world-class digital 55% of the population with world-class fiber internet highway providing connectivity to our nation and people service by 2025. in this digital age. Using the latest fiber optic technology In November 2020, your Company reached a milestone of to deliver broadband services, your Company has having one million residential subscribers. Our subscriber committed itself to delivering the best quality and most base grew two-fold to 1.04 million at the end of 2020 reliable internet service to the largest number of Filipinos. compared to its year-ago level. Amid the pandemic, this commitment has become With the completion of its submarine cable laying to the even more critical as more people have had to rely on Visayas and Mindanao in the first half of 2021, connecting their home broadband connectivity for remote work the other major islands in central and southern Philippines arrangements, online classes for students and teachers, JOSE P. DE JESUS to its national fiber backbone, Converge expects to start and entertainment through the lockdowns and quarantine commercially launching its services in key cities and Chairman restrictions. The internet has also been our lifeline provinces in these regions by the second half of the year. connecting us to our friends and family, in lieu of in-person gatherings, and facilitating the delivery of vital services To support its fast-growing customer base, your Company and activities such as tele-medicine, e-commerce, and has also tripled its customer support workforce and COVID-19 news updates and information. added hundreds of service vehicles for install and repair FIBER-FAST BROADBAND teams since the quarantine restrictions were put in place in March 2020. As the only pure play, end-to-end fiber broadband network in the country, your Company has been able to provide the MOST COMMITTED TEAM fastest and most reliable internet service to our customers. Amid the pandemic, our own frontliners – our linemen and customer service personnel – are working tirelessly Global testing leader Ookla has validated that Converge to install and connect new subscribers and respond to offers the most consistent fixed internet performance in customers’ concerns to deliver the reliable high-speed Metro Manila, Central Luzon, Calabarzon (Cavite-Laguna- fiber broadband that they need. Batangas-Rizal-Quezon), Ilocos Region, and the Cordillera Administrative Region (“CAR”) for the first quarter of On behalf of the Board of Directors and Management, 2021, with consistent average download speeds of up to we would like to thank you, our Shareholders, for your 42.93 Mbps provided to our customers. continued support and inspiring confidence to your Company! We are grateful to you for taking this journey Converge has also been consistently topping the Philippine with us to deliver world-class fiber connectivity to our ISP Leaderboard of leading online streaming platform people. Netflix. In its latest March 2021 report, Converge again led the Netflix ISP Speed Index among all Philippine internet service providers.

MASSIVE EXPANSION To bring its fiber-fast broadband services to more people across the country, Converge more than doubled its fiber backbone and distribution network to over 55,000 JOSE P. DE JESUS kilometers at the end of 2020 from its year-ago level to Chairman of the Board 4 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 5 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Message from the CEO

DEAR FELLOW SHAREHOLDERS, from putting in place the government-mandated health and safety protocols, we also purchased our Without a doubt, 2020 is a year to be remembered own antigen testing machines for the regular testing throughout history. A global pandemic brought of our frontliners and all employees needed for widespread disruption and sweeping changes to critical operations. At the height of the community every facet of our lives. In a matter of months, people, quarantine regulations, we provided transportation businesses, industries, and governments had to service to our skeleton staff. For those who live in relearn a new way of living and functioning while the far-flung areas, we provided lodging facilities within threat of COVID-19 persists. the vicinity of the offices. Meanwhile, we continued to encourage work from home arrangements whenever For us in the Philippine fixed broadband industry, possible. We are also procuring vaccines for our it meant an explosion in demand as most Filipinos employees and their immediate family members. required reliable internet connection at home which DENNIS ANTHONY H. UY became their office, classroom, and entertainment Converge was also among the first to respond to CEO and Co-Founder center amid the community lockdowns. the needs of our immediate communities when the pandemic left millions of Filipinos jobless. We donated While Converge has been aggressively expanding its thousands of sets of personal protective equipment all-fiber network since 2019, the sudden surge in new for healthcare workers to more than a dozen cities installations and the resulting doubling of customer and municipalities in Pampanga and Tarlac. We have base prompted our Company to accelerate plans and continue to distribute relief goods, mostly rice to immediately serve the connectivity needs of our packs, to the most vulnerable barangays in the areas subscribers despite the mobility restrictions. where we operate. We also provide fiber connection for various COVID-related facilities, including the QUICK CRISIS RESPONSE latest one for the Kamia Residence Hall in UP Diliman Through our own construction company, Metroworks which has been converted into a quarantine facility ICT Construction Inc., we were able to intensify fiber through a partnership with the Philippine Red Cross. optic roll-out activities in areas where high-speed In 2020, we also augmented the government’s broadband is needed the most. With our micro- response against COVID-19 by providing the Inter- trenching and horizontal drilling technology, we were Agency Task Force for Emerging Infectious Diseases able to quickly penetrate even the densest cities with fiber-fast broadband that allowed them to work with minimum disruption to the community. We were and disseminate important information to the public also able to scale up our technical teams for new more efficiently. connections and repairs and add hundreds of service vehicles to our fleet. Our customer service agents BRIDGING THE DIGITAL DIVIDE tripled from since the start of the pandemic. As a product of the public school system, I am overjoyed to see our Company helping bridge the With the same urgency, we had to protect our digital divide in education by making online learning employees, especially our frontliners such as the possible for our public school students through installers and front desks in our business centers, a partnership with the Department of Education so that we can also keep our customers safe. Aside (DepEd). With the support of local governments, we are giving access to the learning portals of the DepEd through our fiber broadband. 6 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 7 ANNUAL REPORT 2020 #EXPERIENCEBETTER

“The pandemic is not yet over and the emerging new normal is pointing towards greater digitalization that can only be supported by a reliable, high quality broadband infrastructure.”

We also donated recently digital learning tools to partnership with the Keppel Telecommunications and With sheer grit and determination, we were able to that our pure, end-to-end fiber optic broadband is the Aeta nursery students through a partnership with the Transportation Inc. of Singapore. Alcatel Submarine branch out from our roots in Pampanga to the capital most superior technology that can deliver the world- Clark Development Corp. (“CDC”) under the CDC-OB Networks recently announced that they have started Metro Manila and the rest of Luzon. In 2019, we were class quality internet connection which a digitalized Montessori Pagsasarili Family Care Program. Earlier, construction of the Trans-Pacific submarine cable able to deepen our presence in these areas as we nation needs. we enabled Wi-Fi connectivity for my alma mater, system that is jointly owned by Keppel, Telin of embraced an equity investor, leading global private Holy Angels University in Angeles City. Indonesia, and Facebook. When completed in 2024, equity firm Warburg Pincus, who infused $225 million We thank our shareholders for believing in our fiber it will be the first international cable to directly link into the company. technology and dreaming with us in building a fiber- PASSION FOR TECHNOLOGY Singapore to the US, with the Philippines in the powered nation! Trained as an engineer, I have always been interested middle through a landing station in Davao. We will In the middle of the pandemic in October 2020, our in technology and innovation. Thus, it has been my continue to add international capacity as we gear up Company went public with an offering size of P25 dream to fiber-power the country with world-class to be a data hub in the southeast Asian region. billion in the Philippines’ largest initial public offering broadband connectivity so that our people can reap (“IPO”) in recent history. The net proceeds from the the benefits of a digitalized nation. Just before 2020 ended, we also established a third IPO will be used for capital expenditure requirements core backbone node that enabled a robust and to accelerate our nationwide fiber network rollout We are moving closer to the realization of that dream redundant traffic routing in our network, making it to achieve our goal of reaching 55% of Filipino as we connect the whole archipelago to our domestic more fault tolerant, to make our customers’ internet households by 2025. fiber backbone. In April 2021, we were able to land experience better. our submarine cables to the Visayas through San The pandemic is not yet over and the emerging new DENNIS ANTHONY H. UY Remigio in Cebu and to Mindanao through Bonbon in FASTEST GROWING normal is pointing towards greater digitalization that Chief Executive Officer and Co-Founder Cagayan de Oro. I am still fascinated when I realize how our small can only be supported by a reliable, high quality technology company at the back of the Holiday Inn broadband infrastructure. At Converge, we believe At the same time, we are futureproofing our network Hotel in Clark has matured to become one of the with the addition of international capacity through fastest growing companies in the country. our entry into the Bifrost Cable System under a 8 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 9 ANNUAL REPORT 2020 #EXPERIENCEBETTER

MESSAGE FROM THE PRESIDENT

DEAR FELLOW SHAREHOLDERS, income after tax margins from 21.3% in 2019 to 21.6% in 2020. 2020 has been a pivotal year where we saw a shift in the lifestyle of Filipinos, as the country entered a With disciplined deployment of capital, the Company’s series of regional and nationwide lockdowns due to ROIC was at 20% in 2020. Our blended port utilization the global pandemic. Even now, the different parts rates were at 30% by December 2020, higher than of the Philippines are in some form of quarantine the 26% the year prior. This contributed significantly lockdown. Under quarantine, fast and reliable internet to our ROIC despite the significant additions of 1.5 services emerged as a necessity – with growing million new FTTH ports to our network during the demand for connectivity for work-from-home, year. education, entertainment, and e-commerce, among others. KEY OPERATIONAL HIGHLIGHTS

MARIA GRACE Y. UY We, in Converge, continue to be firm on our mission of Innovative Fiber Backbone Technology President, Chief Resources Officer, providing high-speed internet access to the Filipino In July 2020, the Company has activated the and Co-Founder people. If anything, this pandemic strengthened that country’s first 400Gb Dense Wavelength Division commitment of giving reliable fast-speed internet Multiplexing (“DWDM”) metro backbone, which service to our existing and potential new customers. allows us to increase our data traffic capacity and data transfer speed without significant additional capital FISCAL PERFORMANCE expenditure. The advanced DWDM technology allows With strong residential subscriber growth and solid us to maximize the capacity of each optical fiber enterprise business performance, the Company was through the use of different wavelengths of laser light able to achieve industry leading consolidated revenue to transmit digital data.l. growth of 71%, EBITDA margin of 52.5%, and ROIC of 20% for the full year 2020. Nationwide Expansion and Network Improvements Converge continued to accelerate the nationwide Consolidated revenue grew to P15,652 million in rollout of its fiber network under the “Go National” 2020. Revenues from our residential business almost Strategy, in which the Company aims to expand doubled to P12,628 million on the back of strong coverage areas across the Philippine archipelago. subscriber growth. We doubled our 2019 residential This will allow Converge to enter new markets in subscriber base while maintaining our blended Visayas and Mindanao. Our fiber cables have landed average revenue per user. On the other hand, our in Cebu province (Visayas) and Cagayan de Oro enterprise business was able to grow revenues by (Mindanao) last April 2021. We are now connecting 9% despite the challenges faced by the Philippine the other islands in the Visayas region to the national enterprise market, with the pick-up of demand from backbone. This network backbone connection is on small-to-medium enterprise clients during the second track to be completed during the first half of 2021. half of the year and the new wholesale contracts we We can then launch our services to the new areas in entered into with the government and international Visayas and Mindanao. carriers. Our mid-term goal of reaching approximately 55% Our EBITDA grew by 76% from 2019, reaching P8,218 nationwide household coverage by 2025 is on-track million, with prudent cost management. Net income with both the “Go National” and “Go Deep” Strategies, after tax increased 74%, resulting to higher Net the latter of which is where we continuously branch 10 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 11 ANNUAL REPORT 2020 #EXPERIENCEBETTER

“With strong residential subscriber growth and solid enterprise business performance, the Consolidated EBITDA Margin ROIC Company was able to achieve industry leading Revenue Growth consolidated revenue growth of 71%, EBITDA margin of 52.5%, and ROIC of 20% for the full 71% 52.5% 20% year 2020.”

out and increase our distribution reach and last mile during business hours under work-from-home This serves as a convenient channel for our subscribers in Davao, Philippines, allowing us to increase our network within existing coverage areas. arrangements can upgrade their service for those to review and pay their bills and log tickets online. speeds and network diversity. In total, we expect to times for an additional fee. This product is available spend approximately U.S.$100 million for the entire Apart from the expansion of our network, we are to both residential and enterprise customers and We have ongoing improvements to our customers’ project. The completion of this proposed transaction also dedicated to improving the quality and ensuring aims to provide better value to address the evolving digital life platform using new technologies for is subject to negotiation and execution of definitive reliability of our services. We have invested in need of the market. innovation to ensure that we can serve our customers agreements, and relevant regulatory approvals. hardening our network through the completion of fully and conveniently. a third core network backbone node in December. One Million Residential Subscribers As we move forward towards our vision of providing Our end-to-end pure fiber network has become Converge was able to reach the milestone of one In August 2020, we entered into an agreement with highspeed fixed broadband to the unserved and more resilient with more efficient network traffic million residential subscribers in November 2020, Telstra International Limited to purchase international underserved in the Philippines, we are also committed distribution and better ability to address outages. ending the year with approximately 1,038,000. We bandwidth capacity of up to 5Tbps at attractive to ensuring that our subscribers #ExperienceBetter celebrated this milestone with all of our residential cost to the Company. This capacity is comparably with Converge. International Bandwidth Capacity Investments subscribers by providing free permanent speed lower than our current average leased line costs. In In our efforts to improve shareholder value through upgrades of up to 300Mbps. These new upgraded September of the same year, we started drawing effectively managing our costs, Converge has entered plans are extended to our new subscribers, as wel down from this capacity, effectively reducing our into two agreements to purchase international need for short-term leased line capacity. bandwidth capacity through long-term Indefeasible Enhancing Customer Experience through Omni- Right of Use (“IRU”). Channel Initiatives Last April 2021, we have signed a binding term We have always been committed to providing quality sheet with Keppel Midgard Holdings Pte Ltd Launched New Innovative Products customer experience for all of our subscribers. We (“KMH”), a wholly owned subsidiary of Keppel Given the growing demand for more bandwidth from doubled our installation teams and increased the Telecommunications & Transportation, granting both our residential subscribers and enterprise clients, number of our contact agents to meet the growing Converge an IRU for one fiber pair on the main the Company has officially launched innovative number and demand of our subscribers. trunk of the Bifrost Cable System. This cable line will MARIA GRACE Y. UY product plans during the first quarter of 2021. One of directly connect Singapore to North America once President, Chief Resources Officer, and these is the “Time of Day,” which provides the option Aside from improving real-person customer care, it’s completed by 2024. Co-Founder to customize and adjust the speed available to them we also launched our mobile application Converge in accordance with their usage at a given time. For Xperience App during the third quarter of last year. In addition, KMH and Converge will develop a example, subscribers who require more bandwidth branch on the Bifrost Cable System that will land 12 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 13 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Experience better The origins of Converge and our journey to provide Filipinos a better internet experience

Who We are Vision Values

Converge Information and Communications Technology residential and enterprise customers. Our fiber internet World class ICT organization that empowers EXCELLENCE Solutions, Inc. (PSE: CNVRG) is the fastest-growing technology allows for greater speed and bandwidth people, businesses & nation to be their best. Delivering the best possible quality experience at fiber internet services provider in the Philippines today. that cannot be matched by legacy broadband and any given time, at any given opportunity We are the only pure-play high-speed fixed broadband wireless technologies. provider, with an exclusive focus on serving the Mission INTEGRITY Philippines with industry leading optical fiber-based We want to be known as the brand with superior Ensuring honesty and transparency at the connectivity services. products offering the best value. We are the simple, forefront, with nothing but premium service Delighting our customers by taking care of our fast, and reliable choice: simple in the sense that delivery at the core own. We own and operate the fastest-growing, end-to- our straightforward and uncomplicated products end fiber network in the Philippines, which is also and processes are designed to provide what the CUSTOMER-FOCUS one of the newest in the country. With over 55,000 market truly requires; fast in terms of core products, Takes pride in putting the customers’ needs and delivery of service, and response time; and reliable by kilometers of fiber as of December 31, 2020, our wants as the main driver in all efforts network is among the most extensive in the country. consistently delivering the best possible service. Our network is comprised of a fiber backbone VELOCITY that stretches from the northernmost tip of Luzon Our commitment is to reach the underserved and Being able to deliver exceeded expectations with Island to its southernmost end, as well as a fiber unserved areas in the country and upgrade the timeliness as a consideration distribution and last-mile network that covers more Filipino online experience by giving them the world- than 300 cities and municipalities across Luzon class connectivity they deserve. We want Filipinos to (including Metro Manila), as of December 31, 2020. #ExperienceBetter. TEAMWORK Acknowledges that delivering standard- With our fiber-powered network, we provide the redefining service to the Filipinos, will take absolute premium digital experience for both our everyone’s collective high-quality efforts

EMPOWERMENT Committed to powering the nation with the connectivity they need to uplift their lives 14 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 15 ANNUAL REPORT 2020 #EXPERIENCEBETTER

History of Converge

In less than a decade, we have evolved into becoming leading optical solutions from a United States-based the fastest-growing high-speed fixed broadband networking systems, services, and software company. operator in the Philippines. We have significant This deployment provides us with a programmable, presence in Luzon and have connected our nationwide dynamic setup of connections that increases backbone to Visayas and Mindanao in April 2021 adaptability and resiliency. In 2020, we debuted on the Philippine Stock Exchange with a total offering In 2019, we executed an agreement with a leading size of around =P25 billion. With this infusion of capital, global private equity firm Warburg Pincus for a we are well-placed to further expand nationwide, U.S.$225 million primary investment (through reach the unserved and underserved, and create Coherent Cloud) into our Company to accelerate our long-term value for all. nationwide network expansion plans. With unwavering commitment, Converge pushes In July 2020, we activated the Philippines’ first forward to realize our aspiration to bring world-class 400Gbps metro backbone utilizing industry- internet connectivity to the Filipino nation. Organizational Structure As of December 31, 2020

Pentastar Holding Co. Inc. Converge was born out of an advocacy to change In 2007, ComClark evolved into Converge as it is a status quo. Seeing the nation’s collective dismay known today; our primary purpose is to provide 100% 100% 20% with regards to internet connectivity, we entered the broadband internet and other connectivity services KGU Pyrite Holdings Co., Inc. Pacific Kabelnet Holdings Co. Inc. market with our sights set on becoming a challenger to residential and enterprise customers nationwide. Cloud Gateway brand that promises high-speed pure fiber internet 50% Limited service delivering the best possible experience at the In 2009, by virtue of Republic Act No. 9707, we ComClark Network & most affordable price. Technology Corp. earned our franchise to construct, install, establish, 20.43% 15.83% operate and maintain our telecommunications Public 63.74% Converge traces its roots to Communications Clark systems throughout the Philippines for a term of 25 Coherent Cloud Ownership Investments B.V (“ComClark”), a Pampanga-based cable TV provider. years. We then obtained a Provisional Authority from Converge Information and Communications In 1996, Mr. Dennis Anthony Uy founded ComClark the National Telecommunications Commission to Technology Solutions Inc. and built the first fiber link between Angeles City install, operate and maintain a nationwide broadband and the Clark Special Economic Zone. The company internet network in 2011. 100% 99% evolved over the years, introducing new services and expanding to adjacent provinces such as Bulacan, By 2012, we have commenced our fixed broadband Converge ICT Solutions Pentagon Holding Co. Inc. (Global) Limited (Formerly: Pentagon Real Bataan, and Zambales. Through his journey, Mr. Uy saw internet operations. The following year, we launched (Incorporated in Hong Kong) Properties Unlimited. Inc.) a need which he aimed to address—the Philippines’ fixed broadband services in Metro Manila. Our lagging internet speed. subsidiary, Metroworks ICT Construction Inc., was incorporated in 2013 to manage the network rollout. Metroworks ICT 100% Construction Inc. 16 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 17 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Fiber Internet Technology

Converge is the pioneer in fiber optic installation optic cables so customers can enjoy consistently fast in the Philippines. The company’s state-of-the-art Internet speeds. technology delivers end-to-end pure fiber optic connections to homes and businesses, providing a Fiber optic technology is considered the future of fast and seamless internet experience. data transmission. It offers the most potential for high-speed data transmission and is the clear solution The technology uses fiber-optic cables, which can for customers’ ever-growing demand for bandwidth. send data at a rate of around 70% the speed of light. With this, data can travel almost instantaneously to a As a pioneer in Fiber optic installations, Converge has distance of 80 to 100 kilometers. dedicated its experience and expertise to ensuring that customers receive the best in networking Fiber-optic cables are lightweight, durable, and infrastructure, facilities management, broadband non-flammable and are therefore not as susceptible implementation and full telecommunication to severe weather conditions as other traditional infrastructure and support. cables used for internet connections. This helps in minimizing physical and electrical interference thus Through pure end-to-end fiber internet, Converge is resulting in very little downtime. able to bring to fruition the vision of co-founder Dennis Anthony H. Uy to provide first-world connectivity A fiber connection also allows symmetric connectivity experience to Filipinos. which lets you download and upload files at the same time without a loss in bandwidth. There is no data congestion so data is delivered instantly. Data also does not degrade when it passes through fiber- 18 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 19 ANNUAL REPORT 2020 #EXPERIENCEBETTER

ONWARD TO THE FUTURE: ENVISIONING CONNECTIVITY FOR ALL FILIPINOS

The strength of a fixed broadband service is anchored the Viasayas and Mindanao. This expansion includes Mr. Uy realizes that although DepEd already has enhances public service nationwide through faster largely on the extent of its network. With this in mind, the laying down of 1,800 kilometers of submarine the platform and the educational content readily and more reliable access to information and national Converge CEO and co-founder Dennis Anthony H. sea cables, connecting over 20 landing stations available, it does not have the digital infrastructure to databases. Uy set a goal to ensure that the Converge network, throughout the country. bring such content to those who need it most---the which was initially set up in Luzon, would eventually public school students. And this is what his plan aims Converge envisions to be a major player in this national cover the whole of the Philippines. Converge’s national backbone is expected to be to address. broadband program by providing the highest level of completed within the first half of 2021 with a service technology that will allow national connectivity to This grand vision has guided Converge to begin work launch in select regions in Visayas and Mindanao in “A free and reliable fiber-optic connection would happen. In line with this, Converge was able to win a on extending its fiber footprint to areas yet to be the second half of the year. definitely help in uplifting the country’s public bidding that will allow the company to work with the covered by fiber internet technology. education system,” Mr. Uy reveals. “Although this DICT and participate in Phase 1 of the NBP. CONNECTING PUBLIC SCHOOL STUDENTS may take some time, this is what I envision for the CREATING A NATIONAL FIBER BACKBONE One of Mr. Uy’s long-term plans is to be able to Philippines.” “Our long-term aspiration is to bring to the Philippines In order to achieve this lofty goal, Converge has to provide a free, stable, and reliable internet connection the newest available technology that will benefit the build a national backbone that would connect the to public school students, on the road to making the ENVISIONING A NATIONAL BROADBAND entire country,” Mr. Uy shares. three main island groups of the country--Luzon, country’s public school system digital-ready. A national broadband infrastructure is key to any Visayas, and Mindanao. This became the objective developing economy. Knowing this, the Department behind the creation of Converge’s “Go National” Although Mr. Uy admits that this plan would take of Information and Communications Technology initiative. quite some time to complete, Mr. Uy and Converge (“DICT”) has come up with the National Broadband have begun striking up partnerships with the Program (“NBP”) with the prime objective of deploying Through the “Go-National” strategy, Converge has most important stakeholders of this project--the fiber-optic cables and wireless technologies across been working to expand its domestic backbone Department of Education (“DepEd”) and local the country to provide broader, faster, and more to reach millions of households and businesses in government units. affordable access to the internet for Filipinos. The regions previously unserved or underserved, such as program also empowers government agencies and 20 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 21 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Experience Excellence

Driving growth and serving more, anchored by a culture of excellence Financial AND Operational Highlights Key Consolidated Financial Highlights

ANNUAL REVENUES ANNUAL EBITDA ANNUAL EBITDA MARGIN 2018 2019 2020 (In Million Pesos) (In Million Pesos)

Income Statement Data (in Million Pesos) 16,000 15,652 10,000 55 Revenues 5,055 9,140 15,652 14,000 50 3,024 8,000 Cost of Services (2,329) (4,441) (7,065) 12,000 52.5%

9,140 51.0% 50.4% 10,000 6,000 8,218 45 12,628 Gross Profit 2,726 4,699 8,588 8,000 General and administrative expenses (913) (1,415) (2,772) 40 5,055 2,786 4,000 6,000 Provision for impairment of trade and other receivables (125) (530) (721) 4,000 4,665 6,354 2,000 35 Unrealized fair value loss on financial asset at FVTPL - - (27) 1,904 2,000 Other income, net 52 18 360 2,549 3,151 3,151 0 0 30 2018 2019 2020 2018 2019 2020 2018 2019 2020 Profit from operations 1,740 2,772 5,429 Residential Enterprise Finance costs 71 275 550 PROFIT AFTER INCOME TAX RESIDENTIAL SUBSCRIBERS/ ENTERPRISE CUSTOMERS (In Million Pesos; after proforma adjustments) CUSTOMERS Profit before income tax 1,669 2,497 4,879 Income tax expense (428) (593) (1,491) 3,500 1,200 12,000

3,000 1,000 10,000 Profit for the year 1,242 1,905 3,388 3,388 2,000 Net income margin 24.6% 20.8% 21.6% 800 8,000 11,090 1,038,321

2,500 10,083 600 6,000 1,500 Profit for the year after proforma adjustments 1,000 1,942 3,388 1,942 400 4,000 6,539 1,000

529,629 EBITDA 2,549 4,665 8,218 500 200 2,000

1,000 EBITDA margin 50.4% 51.0% 52.5% 0 0 264,865 0

2018 2019 2020 2018 2019 2020 2018 2019 2020 HOUSEHOLD COVERAGE PORTS DEPLOYED RETURN ON INVESTED CAPITAL Balance Sheet Data (in Million Pesos) (In Million Units) Total Assets 12,720 31,159 56,712

25 4 25 Total Debt 2,725 7,950 11,314 Total Stockholders’ Equity 4,609 12,168 27,775 20 20 24.5% 3 3.5 20%

15 15 20.3% 19.70% Cash Flows Data (in Million Pesos) 2 Net cash flow from operating activities 2,032 1,685 7,299 10 10 2.0

13.0% Net cash flow used in investing activities (4,089) (7,381) (14,507) 1 5 5 Net cash flow from financing activities 2,114 11,474 13,872 1.1 5.8% 0 0 0 Net increase in cash and cash equivalent 56 5,778 6,663 2018 2019 2020 2018 2019 2020 2018 2019 2020 22 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 23 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Operational Highlights

HIGH CAPACITY BACKBONE We activated the Philippines’ first 400Gb DWDM metro backbone last July 2020, utilizing industry- leading optical solutions from a United States- based networking systems, services, and software company. This deployment provides us with a programmable, dynamic setup of connections that increases adaptability and resiliency.

The DWDM technology is triple redundant, thereby ensuring high levels of reliability and in line with our design philosophy.

RAPID NATIONWIDE EXPANSION OF CONVERGE’S LEADING FIBER OPTICAL NETWORK The Company continued to accelerate the nationwide rollout of its leading fiber network throughout 2020. More than 28,300 kilometers of fiber optic cables were added during the year, In FY2020, Converge’s expansion to the Visayas network became stronger and more resilient with expanding our backbone and distribution network and Mindanao regions has been progressing as a more efficient network traffic distribution and by 106% from about 26,700 kilometers laid down at planned and we plan to substantially complete our better ability to address outages. the end of 2019 to approximately 55,000 kilometers backbone in these new regions in 1H2021, allowing at the end of 2020. We started 2020 covering us to fully commercially launch services by 2H2021. With the improvements we are implementing 167 cities and municipalities. With our network to our systems, Converge strives to ensure that expansion, we were able to extend our coverage to Apart from the regional expansion of our network, subscribers can enjoy the benefits of quality additional 149 cities and municipalities by end of Converge is dedicated to improving the quality internet services, including video streaming. the year. of services it provides to the existing coverage Converge again ranked first in Netflix’s ISP Speed areas. The Company has invested in hardening Index for the Philippines in December 2020, which The Company was able to install its highest number the network to increase redundancy and network ranks internet service providers in terms of prime- of ports in a year during 2020, with almost 1.5 quality. Previously, the main network backbone time Netflix performance. “Netflix’s stories are best million ports installed, 97% of which being FTTH of Converge was connected to two core nodes delivered on a strong internet network, which is ports. With our total 3.5 million deployed ports, located in Metro Manila and Pampanga. With the not only about speed but also about latency, jitter our network coverage reached 25% of nationwide completion of a third core network backbone node and packet loss.” said Converge Chief Operations households. The Company continues to be on track last December, the Converge end-to-end pure fiber Officer Jesus “Boboy” Romero. to achieve its target of reaching approximately 55% of total households in the country by 2025.

NATIONWIDE BACKBONE EXPANSION as of December 31, 2020 24 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 25 ANNUAL REPORT 2020 #EXPERIENCEBETTER

INTERNATIONAL BANDWIDTH CAPACITY LAUNCH OF NEW INNOVATIVE PRODUCTS bandwidth intensive entertainment content such 2020, the Company had approximately 1,038,000 INVESTMENTS The Company recognized the need of our enterprise as online games and video streaming at night. We residential subscribers, which is almost double the In August 2020, we entered into an agreement with customers for flexibility in connectivity speeds offer Day Plan or Night Plan, which similarly boosts 2019 residential subscriber base of almost 530,000. Telstra International Limited to purchase 5Tbps of during certain periods of the day. To address their speed to twice of their subscribed plan during In the last quarter we added a total of 176,944 new international bandwidth capacity, providing a 15- this requirement for flexibility, we launched our their chosen time of day. residential subscribers (gross adds), representing year IRU on two major intra-Asia networks for an Dedicated Internet Access Time of Day product a 120% increase compared to the total gross attractive cost. This 5Tbps of bandwidth capacity is in February 2021. This provides our enterprise “Right now, for our customers to better adjust to subscriber additions in the fourth quarter of 2019. equivalent to approximately seven times our current customers with customized internet options with the changing norms, they need a tool that adjusts In the fourth quarter of 2020, more than 95% of leased bandwidth capacity, and has been priced at double their subscribed bandwidth during their to them, as well. By introducing our Converge Time these newly connected subscribers continue to be an aggregate unit cost that is meaningfully lower chosen preset period, without having to double of Day products, we aim to provide our subscribers first time fixed broadband users, highlighting the compared to our average contracted lease costs at their monthly subscription fee. Likewise, our SME from all segments custom internet options, giving unserved and underserved state of the broadband present. This IRU is subject to certain conditions. customers can now avail of the FlexiBiz plan where them more bandwidth when needed and, equally market in the Philippines. internet speeds are doubled during peak working important, enabling them to save on costs.” Mr. We drew down on this capacity starting September hours of the day (7:00AM – 6:59PM). Romero said. Converge CEO Mr. Dennis Anthony Uy noted that, 2020, which resulted to lower bandwidth costs “As the home became both office and classroom during the fourth quarter of the year. This We also launched the Converge FiberX Time of RESIDENTIAL SUBSCRIBER BASE amid the global pandemic, we further accelerated transaction is consistent with our strategy of Day plan for our residential subscribers, to give our DOUBLED IN 2020 our fiber network rollout to deliver high-speed forming partnerships with global carriers to secure customers the option to avail of higher bandwidth In November 2020, Converge reached the important broadband connectivity to more Filipinos, reaching proprietary access to bandwidth capacity on during the period of their choosing. Households milestone of one million residential subscribers underserved and unserved areas in the country.” certain key international network routes. can opt for higher bandwidth for work from home and celebrated by providing free speed increases and online schooling requirements during the day, to its subscribers of up to 300Mbps. By end of or alternatively, select seamless consumption of 26 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 27 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Converge’s monthly residential churn rate was “We have always been focused on giving our 4Q2020. In December 2020, Converge installed 86% engagement channel. Converge also onboarded approximately 1.35% during the last three months customers the best possible experience. Thus, of new NCR subscribers within seven days and 64% around 350 new outsourced contact center agents of 2020, down from 1.63% in the third quarter of the we have doubled our customer contact agents, within one day of application, respectively. These in FY2020, to respond to customer queries, leading same year. The low rate of voluntary churn (c. 5% bringing our answer call rate to nearly 90% in the augmentations, combined with improvements in to reduced drop call rates for both our customer of total churn) reflects Converge’s ability to meet fourth quarter of last year. At the same time, we the customer onboarding and installation process, care and service desk teams. By the fourth quarter or exceed its customers’ expectations on product are continuously scaling up our installation and will allow us to further increase rapid conversion of 2020, our Answer Call Rate stood at an average quality, value for money and customer service. repair teams. All these initiatives are supported from application to installation. of 87%, up from 76% in the third quarter of the year. by sustained investments in our customer digital ENHANCING CUSTOMER EXPERIENCE THROUGH infrastructure to further improve customer During the third quarter, the Company rolled out OMNI-CHANNEL INITIATIVES experience,” said Converge President and Chief its mobile application Converge Xperience App, The Company continues to commit to providing a Resources Officer Grace Uy. which offers a convenient channel for its customers quality customer experience for both existing and to review and pay their bills, and also allows potential new subscribers. Converge continues To be able to service the surge in demand for our customers to log tickets online. As of December to be highly focused on enhancing the overall products throughout 2020, the Company more 2020, our Converge Xperience App has been customer experience by strengthening its customer than doubled the number of installation teams as downloaded more than 348,000 times, allowing us care functions and digitizing the journey of our compared to before the ECQ lockdown, enabling us to communicate with approximately one third of our customers. to substantially reduce the backlog of installation in subscriber base through this new mobile customer 28 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 29 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Experience Superior Go National Giving Filipinos the quality connectivity they need and deserve

Converge’s expansion efforts are anchored on our terms of broadband services by other operators “Go National” strategy which focuses on our plan to which was why they are seen as attractive markets expand into new coverage areas in the Philippines. for Converge to expand into. We expect that most of the new subscribers in these areas to be first- When we initiated the “Go National” strategy in time high-speed fixed broadband subscribers. 2019, the plan was to expand beyond Luzon. We kicked off this strategy with the construction of our In 2020, our “Go National” expansion strategy nationwide domestic backbone that will connect moved forward despite the mobility restrictions Luzon with Visayas and Mindanao. caused by the COVID-19 pandemic.

The initial plan was to first expand to Cebu City Work continued as we entered the first quarter while strategically entering other new markets and of 2021. Bold Maverick, our main cable lay vessel, sub-markets in both the Visayas and Mindanao as commenced cable-laying operations in March we complete our nationwide backbone. of 2021. Moreover, the construction of our cable landing stations was substantially completed. Following the same disciplined and purposeful approach to our expansion in new locations in the With all these, we were able to connect the Visayas past, we ventured into new areas by performing and Mindanao regions to our nationwide backbone data-driven capital efficiency analyses to determine in April 2021. We are aiming for commercial launch whether we will meet our internal ROIC hurdles if we by the second half of the year. expand our network into the cities we are eyeing.

There are currently hundreds of attractive pockets of demand in the Visayas and Mindanao, including Cebu City and Davao City, which are the second and third largest cities in the Philippines, respectively. These areas have been largely under-served in 30 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 31 ANNUAL REPORT 2020 #EXPERIENCEBETTER

products and services

Converge offers high-speed fixed broadband internet download speed of 300Mbps and has a price of iBiz/flexiBiz Plans services to residential customers and high-speed P4,500 a month, while FiberXtreme 7000 has a Our iBiz Plans are FTTP broadband internet plans fixed broadband internet services, private data download speed of 500Mbps at P7,000 per month. designed for our SME customers. The iBiz plans network solutions, cloud and colocation services and provide subscribers with a dedicated IP address, 24- other connectivity solutions to enterprise customers We also launched the Converge FiberX Time of hour service desk and support teams, and certain of varying sizes, industries and types. Day plan for our residential subscribers, to give our guaranteed service level agreements (“SLAs”). The customers the option to avail of higher bandwidth flexiBiz plan allows the SME customer the option of RESIDENTIAL SERVICES during the period of their choosing. Households boosting the speed at a certain specified period of the can opt for higher bandwidth for work from home day. FiberX, FiberXtreme, and FiberX Time of Day and online schooling requirements during the day, FiberX and FiberXtreme are residential broadband or alternatively, select seamless consumption of Direct Internet Access services via an FTTH connection. Our flagship product bandwidth intensive entertainment content such as Our Direct Internet Access (“DIA”) services is FiberX1500, an affordable entry-level plan aimed at online games and video streaming at night. We offer are dedicated, ultra-high-performance internet the middle-income market which is the core of our Day Plan or Night Plan, which similarly boosts their connectivity solutions tailored for our large enterprise clouds privately, as if these were part of their own customer base. It has a download speed of 25Mbps speed to twice of their subscribed plan during their and corporate customers. We offer multiple variations wide-area network. This service caters specifically to with no data caps and, as it name suggests, is offered chosen time of day. of the DIA service, all of which are provided with our large enterprise and corporate customers. at a price of P1,500 per month. enterprise-grade SLAs, 24-hour all in-source support Air Internet teams and 24-hour service desk and restoration team Colocation Service We also have the FiberX 2500 and FiberX 3500 plans Our Air Internet brand provides home broadband service. We also offer DIA-Time of Day, which allows Suited for large enterprise and corporate customers, that cater to the mass-affluent households. FiberX services via hybrid fiber coaxial (“HFC”) connection, boosted speed during their chosen preset period. our colocation service offers a reliable data center 2500 has a download speed of 75Mbps with no data mainly in Central Luzon. Air Internet has plans that environment for storing data and applications. caps and is priced at P2,500 per month. FiberX 3500 have a fixed monthly fee ranging from P1,000 to Local Private Data Network Solutions It allows customers to benefit from reduced IT has a download speed of 150Mbps with no data caps P1,350 for maximum download speeds ranging from Our local private data network solutions cater to our infrastructure and management costs, reliability, and is offered at a price of P3,500 per month. 5Mbps to 15Mbps, with no data caps. large enterprise, corporate, and wholesale customers. access to various telecommunication requirements, These solutions provide point-to-point connectivity security, required bandwidth at reasonable rates, and Our two FiberXtreme plans target the more affluent In line with our plans to focus exclusively on our FTTH between two or more sites within the Philippines. They 24/7 dedicated support. homes in the country. FiberXtreme 4500 has a rollout, we are discontinuing our HFC rollout although come with enterprise-grade SLAs as well as dedicated we will continue to maintain our existing HFC 24-hour service desk (hotline) and support teams. network. As such, we will be migrating a significant number of our Air Internet subscribers to FTTH plans International Private Data Network Solutions as we continue our FTTH rollout and market FTTH Catering primarily to our large enterprise, corporate, upgrades to these subscribers. and wholesale customers, our International Private Data Network Solutions provide point-to-point ENTERPRISE BUSINESS connectivity between two or more local and Our Enterprise Business offers high-speed broadband international sites and come with enterprise-grade internet services and other connectivity solutions to SLAs, as well as dedicated 24-hour service desk and enterprise customers. Our enterprise solutions are support teams. delivered through end-to-end fiber networks via fiber- to-the-premise (“FTTP”) technology. Our Enterprise Ethernet-Cloud Direct Connect Service Service caters to four target customer groups--large This service provides a private, dedicated and enterprises, corporates, small- and medium-scale high-throughput network connection between an enterprises (“SMEs”), and wholesale customers--and enterprise private network and public cloud service has six variants. providers, allowing businesses to interact with these 32 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 33 ANNUAL REPORT 2020 #EXPERIENCEBETTER

innovations

Converge is currently the largest and fastest- capabilities of WiFi 6 allow consumers to enjoy an In the latter part of 2020, the “Time of Day” product backbone to be capable of being scaled to a higher growing high-speed fixed broadband operator in improved online experience in their homes. was launched for both residential and enterprise 800Gbps capacity to support future growth. the Philippines, with a 25% household coverage customers. With this product, subscribers who across the Philippines and 43% household coverage The service is delivered through the Velop MX5300 require more bandwidth during business hours DIA UPLOAD: ENTERPRISE-SPECIFIC in Luzon. The company’s leading position in the WiFi 6 Mesh system, which comes with the next- under their work-from-home (“WFH”) arrangements INNOVATION fixed broadband industry, however, was made generation orthogonal frequency-division multiple or during school hours under online schooling Converge also introduced an innovation that caters possible by the innovations it has introduced since access (“OFDMA”) technology which decreases arrangements can upgrade their service for those specifically to its enterprise customers. Dubbed the its inception. The year 2020 was no different as latency in high-density environments to deliver high- particular times for an additional fee. DIA Upload, this service provides higher upload Converge launched several innovative products and speed WiFi to multiple devices simultaneously. The bandwidth than download bandwidth, which is services. Velop MX5300 pre-order exclusive was launched in Converge launched this innovation to address the best for customer sites where the outbound traffic October 2020. specific needs of its customer base, particularly is higher than inbound bandwidth. This upload- ACTIVATION OF A 400GBPS METRO BACKBONE during the pandemic when mobility restrictions priority service is best for servers that host websites Converge’s key innovations in 2020 include the During the year, Converge also launched the “10-for- have forced workers and students to do most or locations performing regular backup to the cloud activation in July of the first 400Gbps metro 99” add-on as a regular product that FiberX 1500 of their work at home, using their broadband via an Internet connection. backbone which utilizes industry-leading optical subscribers can avail anytime. This product allows connection at specific times of the day. solutions from a United States-based networking the company’s existing FiberX 1500 customers to MORE INNOVATIONS AHEAD systems, services, and software company. enjoy additional 10 Mbps for an additional service This innovation provides Converge with a With the constant growth in demand for broadband fee of P99 per month. The bandwidth upgrade programmable, dynamic setup of connections that access and bandwidth, Converge continually INDUSTRY FIRSTS: ADDRESSING THE NEEDS OF was originally launched for a limited time and, due increases adaptability and resiliency. Knowing the finds ways to enhance its services through future THE CUSTOMERS to the success of the initial offering period, was continuous growth of demands in broadband in innovations that will make its fixed broadband Converge, in partnership with Linksys, was the first relaunched in 2019 to address customer demand the Philippines, Converge ensured that this metro service even faster and more reliable. to offer to its subscribers WiFi 6, a long-awaited for faster speeds. backbone is future-proof and designed the metro innovation in wireless technology. The expanded 34 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 35 ANNUAL REPORT 2020 #EXPERIENCEBETTER

world class partnerships INTERNATIONAL TRANS-PACIFIC BANDWIDTH INVESTMENT: “BIFROST”

North America Japan New synergies for greater connectivity and accessibility

Our aspiration to elevate the internet connectivity of Upon completion in 2024, the Bifrost Cable System Filipinos has propelled us forward. And it continues to will bring increased speeds and greater reliability that guide us as we grow our presence across the country. will significantly elevate our digital experiences. With We take this aspiration and aim to create a cycle of the advent of change in the way we live—becoming Taiwan superior online experiences for customers. increasingly dominated by interconnectivity, we Hong Kong leverage on this world-class advantage in terms of To realize this, we constantly enhance and expand our capacity and resilience to meet demands, serve more capabilities—innovating and fostering both national users, and deliver the high-speed connection Filipinos Philippines and global partnerships that complement our mission deserve. Guam INTERNATIONAL NETWORK and would enable us to advance our goals. INNOVATING EDUCATION A WORLD-CLASS ADVANTAGE Like all sectors, the pandemic triggered a change in At Converge, we are always looking ahead. We plan the education system. As schools are forced to adopt Singapore forward, thinking about the future; how we can further a virtual learning environment, we join hands with the propel our goals, and how we can deliver the promise we Department of Education (“DepEd”) along with our Indonesia set out at the beginning. Supporting our commitment, affiliate, Pacific Kable Net to ensure the delivery of we partnered with Keppel Telecommunications & digital learning materials. Transportation; securing Converge a crucial internet greater internet accessibility in the country, Converge socio-economic opportunities driven by a seamless capacity through its Bifrost Cable System project. Signing a tripartite Memorandum of Agreement, we takes part in the Department’s Free Wi-Fi for All internet connection. commit to supporting the public education sector Program as a service provider. Paramount particularly The Bifrost Cable System is a 15,000-km trans- transform as it responds to the challenges underlined at this time when internet access has become a key ENHANCED PAYMENT CONVENIENCE pacific undersea cable project that would directly by the sudden shift to online learning. Through component of our day-to-day, we fast-tracked and Our commitment to superior experiences extends connect Singapore to North America in the shortest this agreement, we provide DepEd access to our have completed the building of Wi-Fi infrastructure beyond connectivity. It is a 360-degree commitment possible route via Indonesia, Philippines, and Guam. fiber connectivity and cable channel. This will aid in the areas that DICT has contracted us for. that includes how we serve customers. And as part Furthermore, Bifrost is set to be the largest capacity the agency in making its digital learning platforms of our continuing efforts to improve the end-to-end high-speed transmission cable across the Pacific such as DepEd TV, DepEd Commons, Learning Through public bidding, we were awarded a total customer experience, we have partnered with leading Ocean. Management System, and Learning Resources Portal more accessible for learners, especially for of 186 sites including key areas of Manila, Pasay payment kiosk operator BTI Payments to provide City, and Quezon City. Among the department’s our subscribers a quick and easy additional payment Entering into a binding term sheet, Converge gains an the disadvantaged and marginalized. Additionally, we empower DepEd as it pushes forward the Public contracted suppliers, we are the first to fulfill its method. Indefeasible Right of Use for one fiber pair on the main service requirements. Following the completion of trunk of the cable system. This will allow us to activate Education Network intended to provide connectivity our public wireless broadband infrastructure in those With over 500 self-service Pay & Go kiosks—some up to 15 Tbps of internet capacity. Additionally, to all DepEd offices and public schools, particularly areas, users would be able to access the internet in operating 24/7—subscribers can settle their bills in we commit to joint development of a branch of the those in remote areas. strategically mapped public spaces including parks, more locations, with shorter queues, and at any time Bifrost cable system in the Philippines with Davao as schools, government hospitals, healthcare centers, convenient to them. Moreover, as these kiosks process a landing station. Consequently, Converge will have an Together, we establish a digital education network train stations, as well as national and local government payments in real time, customers can guarantee that IRU of the entire Davao branch. Thereby earning us a that will not only ensure educational continuity offices among others. their payments will go through without delay. top-notch advantage as an internet service provider. during these times but, more importantly, innovate Complemented by our own nationwide undersea education, particularly in public schools. Not only will this undertaking aid the nation towards cable system, we would be able to freely distribute our Focusing on our customers’ needs, we continue to digitalization but it will also help bridge the evident capacity all over the country. A CONNECTED NATION align ourselves in excellence. From first-rate products disparity among Filipinos’ internet connectivity. By Sharing the Department of Information and to utmost service convenience, Converge brings about improving accessibility, we help empower the public— Communications Technology’s (“DICT”) endeavor for a seamless holistic customer experience. enabling them to stay connected as well as seize 36 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 37 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Awards and recognition

As we grow fast, so do we swiftly push our rise to the top. Converge maintains a culture of excellence that enables us to power through. ‘GROWTH CHAMPION’ by consumer data firmStatista , For his exemplary leadership and acumen as a business leader, our Chief Executive Officer Mr. Dennis Uy together with international publications Financial Times and bagged a couple of the most prestigious awards for entrepreneurs in Asia-Pacific. Converge also claimed Nikkei Asia, and the Philippine Daily Inquirer. The survey which several accolades as local and international organizations recognized our rapid growth. This included covered 2016 to 2019 revenue growth reported Converge as Fastest Growing Fibre Internet Service Provider from the 2020 International Finance Awards—which was the third fastest-growing company in the country. This landed conferred to the Company for the second time in a row. Converge on the 135th spot in Statista’s annual ‘500 High Growth Companies’ list in the whole of Asia.

AWARDS AND RECOGNITIONS (others)

2020 ENTREPRENEUR 2020 MASTER ENTREPRENEUR OF THE YEAR AWARD AWARD 11th Asia CEO Awards 2020 Asia-Pacific Enterprise Awards AWARDS AND RECOGNITIONS (others)

GROWTH BUSINESS PARTNER OF THE FINALIST - YEAR BEST BRAND EXPERIENCE INTERNATIONAL FINANCE AWARDS 2020

This is to certify that Nordic Chamber of Commerce FINALIST - CIRCLE OF EXCELLENCE– Converge ICT Solutions FASTEST GROWING FIBRE INTERNET Technology Company of the Year Has been awarded SERVICE PROVIDER of the Philippines BEST SOCIAL MEDIA EXPERIENCE Fastest Growing Fibre Internet Service Provider Philippines PHILIPPINES HONORARY MENTION - International Finance Sunil Bhat, Director Publications Ltd. International Finance The Nordic Chamber of Commerce of VBEST CONTACT CENTRE the Philippines also lauded Converge at FINALIST – Best Brand Experience FINALIST – Best Social Media Experience the 2021 Nordic Sustainability Awards HONORARYAsia Excellence MENTION – BestAwards Contact 2020 Centre CIRCLE OF EXCELLENCE– last March. Converge was named the FASTEST GROWING FIBRE INTERNET TECHNOLOGY COMPANY Technology Company of the Year chamber’s Growth Business Partner of the SERVICE PROVIDER OF THE YEAR 2020 International Finance Awards Year, owing to the company’s momentous revenue and employment growth FINALIST – Best Brand Experience Asia Circle of Excellence “Fastest GrowingFINALIST Fiber – BestInternet Social MediaService Experience HONORARY MENTION – Best Contact Centre Provider” in the 2020 International Finance Awards 38 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 39 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Experience COMMITMENT Empowering our customers, our people, and our nation

CUSTOMERS the advantages of choosing Converge as internet To complete the simplified and enhanced customer Meanwhile, we recognize the specific requirements We are all about transforming our subscribers’ provider. According to a Residential Survey by The experience, we launched the Converge Xperience of our Enterprise clients, and have organized digital experience—from acquisition to retention, we Nielsen Company, 58% of our current subscribers App, a self-service mobile application with three core ourselves to be as responsive as possible. We have fully commit to ensuring customer satisfaction on learned about Converge via word of mouth. The functions: billing, status monitoring, and aftersales. dedicated teams of key account managers for Large our products and services. survey also revealed that 84% of our customers are The billing function allows our subscribers to Enterprises and sales agents for SMEs to address likely to recommend Converge to others. conveniently view their bills and payment postings, their specific connectivity needs, empowering them We believe the Better Experience starts from the near-real-time. Status monitoring can check the and their businesses to achieve their goals. The customer acquisition stage. We introduce our In 2020, we conducted several webinars and online number of connected devices, conduct in-app Senior Management, including our CEO, directly services to potential clients through a variety events catered specifically to our business segments. speed tests, and check the status of modems in real- and actively initiate and build relationships with our of avenues, including on-the-ground marketing These allowed us to connect with both potential time. The app also serves as a channel for aftersales largest and most strategic accounts. activities. We do door-to-door and set up booths and existing clients and clearly communicate our support functions such as service relocation and in new rollout locations. We also deploy Marketing products’ innovations and upgrades. reactivation requests, upgrade requests, request When the pandemic compelled many to adapt to Service Agents and Marketing Service Providers fulfillment tracker, and other value-added services. remote working and learning setups, demand for who run their own on-the-ground campaigns. We continuously strive to improve customer service. Approximately one-third of our total residential our products surged. People needed fast internet, In 2020, we onboarded 350 new contact center subscriber base enjoy the app, as indicated by its installed fast. We deployed twice the number of our In a roundabout way, the better experience we agents to answer customer queries, pushing our 384,000 total downloads. pre-ECQ installation teams, enabling us to serve new strive to bring actually benefits us, as we leverage Answer Call Rate to 87% in the last quarter of the customers and substantially reduce our installation on word-of-mouth advocacy as another acquisition year. This is a significant jump from 76% in the backlog. In December 2020, we installed 86% of new strategy. Our existing customers, including preceding quarter. NCR subscribers within seven days and 64% within influencers, provide testimonials that highlight one day of application, respectively. 40 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 41 ANNUAL REPORT 2020 #EXPERIENCEBETTER

OUR PEOPLE COVID-19 in the deployment of our training We foster a harmonious working relationship between infrastructure construction) and back-end (office- We demonstrate our commitment to our almost programs, our Human Resources department the management and employees by practicing an based) personnel as they perform their duties. Our 3,000 employees by creating an environment recorded more than 2,600 training hours for our open-door policy. Prior to the pandemic, we used employees enjoy consultations, first aid treatment where they are rightfully compensated and given employees in 2020, excluding any informal coaching to conduct regular town hall meetings to update the and other health-related activities, and health opportunities to grow, with their physical, mental, and training received within their respective work employees on business performance and activities maintenance organization (“HMO”) coverage for emotional, and social well-being prioritized. groups. Our mandatory training includes sessions on and give them a platform for their concerns. In early regular employees. New Hire Orientation, Compliance Policies Training 2021, we launched an intranet portal which now We attract the best talent through fair compensation on Business Ethics and Data Privacy, and Anti- serves as their avenue to voice out their concerns COVID-19 policies and benefits. Among others, this includes an Bribery and Corrupt Practices Act. and interact with the management and other In light of the pandemic, we immediately Employee Share Option Plan that incentivizes employees. This portal also gives convenient access implemented measures and drew up policies to be the performance of deserving executive officers, We open opportunities to our employees who wish to important announcements, events, websites, and proactive in ensuring our people’s health and safety. employees, and other eligible participants. The to pursue certification programs relevant to their internal systems that are frequently used. maximum number of share options that may be roles. Moreover, our different departments conduct To reduce the risk of workplace infection, granted is anticipated to be around 0.85% of the specialized training sessions on skills specific to their We put a premium on workplace diversity and telecommuting and flexible working hours were Company’s total issued shares. Starting late 2020, positions. These include a comprehensive Converge inclusion. From hiring to promotions to retirement, introduced from March 16—immediately after the we have developed a corporate performance Learning Academy, fiber-technology training, and we assess our people based on their competence, government’s enforcement of the community management system to ensure that outstanding project management and presentation skills. Going without prejudice to their background. While we are quarantine—until the end of 2020. The skeletal employees are rewarded accordingly. into 2021, we expect our Learning & Development still formalizing relevant processes and policies, we workforce who still needed to report to the office programs to develop further with the onboarding have already appointed a Champion for Diversity were required to undergo antigen testing shouldered Moreover, we do not stop at just acquiring talent—we of an L&D Manager who would be responsible for and Inclusivity. by the Company. As they serve as the Company’s develop them further. We invest in our employees’ improving our record keeping and formalizing our front liners, we provided them, on a case-to- training and development to nurture their technical L&D curricula and syllabi. Occupational safety and health safeguards are case basis, with food, transportation, and living and interpersonal skills. Despite the impact of always available to our front- (cable installation and arrangements. Work and operating sites are kept 42 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 43 ANNUAL REPORT 2020 #EXPERIENCEBETTER

well-ventilated and safety protocols such as wearing Thus, in April 2021, we and our affiliate company of face masks and shields, frequent disinfection, and Pacific KabelNet signed a tripartite agreement with physical distancing were strictly observed. the Department of Education designed to innovate the delivery of educational materials and enable In April 2021, Converge and its affiliate Pacific The fiber optic connection in all the We also outlined home quarantine, isolation, and local students to adapt to distance learning. Under the KabelNet, entered into a tripartite partnership households of public school students government reporting procedures for employees agreement, Converge and Pacific KabelNet will with the Department of Education (DepEd) in living in San Juan is a realization of our who may have been exposed or are suspected to provide fiber connectivity and cable channels, boosting the public education system’s access Smart City Initiative and has gained more be infected. We enhanced our contact tracing respectively, to public schools free of charge. to learning materials. Through a Memorandum significance amidst the pandemic. We capabilities. Additionally, we developed a Daily Students will then enjoy access to DepEd’s online of Agreement, Converge will establish the thank Converge ICT Solutions for taking Health Checker application to track our employees’ learning platforms such as DepEd Commons, DepEd digital highway to connect thousands of on this challenge. I am elated because health and wellness. Recognizing that the pandemic TV, DepEd Learning Management System, and public school students to the DepEd’s digital our students and teachers can now safely has not only affected physical well-being, we held Learning Resources Portal. platforms to cope with distance learning. meet and communicate in the safety of company-wide lectures on mental health as well. their respective homes with fast, fiber San Juan Local Government Unit Even before the pandemic, the DepEd already optic connection to better facilitate their As of early 2021, we have begun surveying employees Still in line with Converge’s efforts toward making knew we needed to tap technology to nurture classes and for the children to better our students. We know the demand to access and gathering relevant information to start our education more accessible, we inked a partnership understand their lessons. This is at no new knowledge is too huge - pandemic or procurement of vaccines. with the San Juan Local Government Unit’s Learn cost to the students and teachers as the no pandemic. Education experts from other from Home project. city government will be shoulding the countries, years ago, would tell me their NATION BUILDING subscription cost. schools were already connected. I thought it We contribute to the nation by providing Filipinos Through the program, Converge provided fiber was a dream for us. How can we, at our level of quality connectivity as an instrument to reach their connection while the LGU supplied tablets and development, do that with 61,000 schools? full potential. As the pandemic hit, necessitating the laptops to all young San Juanenos enrolled in San shift to an internet-dependent new normal, Converge Juan public schools. This covers around 6,000 FRANCIS ZAMORA But this partnership gives us hope that it is took major steps in realizing its mission and filled the households—with over 12,000 students—around the San Juan City Mayor possible for us; that I may interact with any gaps to serve the unserved and underserved. city. While the program was officially launched on student in any classroom in any part of the May 2021, installation of the internet lines started country using technology. I believe Converge Department of Education as early as 2020. The program was awarded with will be in the position to do this with us. Thank The pandemic revealed a gap in our education the Digital Governance Award 2020 in the eGOV you for sharing with us your technology, for the system—the country was unequipped to roll Customer Empowerment category. future of our country and our young people. I’m out distance learning as we were riddled with sure your organization will make an important connectivity issues. This digital divide, most apparent The fast and reliable internet service would enable contribution to education, even beyond the in disadvantaged and marginalized communities, students to keep up with their online classes, pandemic. had to be bridged immediately lest students get left ensuring that no one gets left behind. behind, further aggravating their woes.

DR. LEONOR MAGTOLIS BRIONES Department of Education Secretary 44 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 45 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Experience Fulfillment Making a difference by upholding responsible corporate citizenship

Second, our usage of fiber optic cables eradicates the Our company had also supported the My Dream in a SUSTAINABILITY need for copper cables. Copper is also a limited resource Shoebox project that was organized by the IT and Business which is quickly running out, and may have an impact Process Association of the Philippines and TeamAsia. on the environment when mined. On the other hand, Through this project, shoeboxes filled with school supplies fiber optic strands are made of silica which is a natural were distributed to underprivileged Filipino children in a compound of silicon and oxygen, two of the earth’s most fun-filled gift-giving day. abundant materials. In the middle of the pandemic, Converge partnered with Finally, fiber optic cables require less frequent repair as it Clark Development Corp. (“CDC”) to provide digital is hardly susceptible to degradation caused by moisture, learning tools for Aeta nursery students under the CDC- and electrical interference. Fewer repairs mean lower OB Montessori Pagsasarili Family Care Program. Sixty material consumption and greenhouse gas emissions. learning tablets were distributed to select students and nine Large Format Displays (LFDs) were donated to the AIDING COMMUNITIES school. When Taal Volcano erupted in January 2020, Converge donated P5 million worth of relief goods to the victims SUSTAINABILITY GOALS through the Batangas provincial government. The In 2020, we published our first Sustainability Report that company also provided P1 million worth of potable identified the areas which we believe impact the most drinking water to 20,000 households affected by the on our sustainability as a company. From these material eruption. Aside from the relief donation, Converge economic, environmental, social, and governance factors, provided internet connectivity in command centers and we have seen that our company will be able to contribute critical sites that required close monitoring for more to the following UN Sustainable Development Goals (SDG): efficient relief operations and allowed the displaced families to communicate with relatives outside of the SDG 1: No Poverty – End poverty in all its forms everywhere. affected areas. SDG 4: Quality Education – Ensure inclusive and In February 2020, in its efforts to contribute to the equitable quality education and promote lifelong learning improvement of health care, Converge adopted a opportunities for all. surgical ward at the Oriental Mindoro Provincial Hospital in Calapan City. The donation allowed the hospital SDG 8: Decent Work and Economic Growth – Promote to procure the necessary equipment to aid in the sustained, inclusive and sustainable economic growth, full improvement of their operations. Earlier, the company and productive employment and decent work for all. also supported the rehabilitation of the Ospital ng Angeles in Pampanga, the province which it first served SDG 9: Industry, Innovation and Infrastructure – Build Embedded into our fiber is the commitment to support has far less impact on the environment than copper or with broadband connectivity, with a P5 million donation. resilient infrastructure, promote inclusive and sustainable the communities where we operate in and protect the coaxial cable networks. industrialization and foster innovation. environment to ensure the sustainability of our operations SUPPORTING EDUCATION and create better experiences for the Filipino people. First, fiber optic cables consume less energy. Studies In October 2020, Converge helped improve WiFi Guided by these goals, we will prioritize activities that showed that fiber optic technology only uses 1 watt to connection in Holy Angel University (HAU) in Angeles will further improve the well-being of our company GREEN TECHNOLOGY transmit light pulses over 100 meters while coaxial cables City, Pampanga through the donation of 30 access and our employees, support the economic growth and Fiber optics is said to be among the most sustainable take up to 3.5 watts to do this. Less power consumption points to boost the accessibility of its network. A total development of our country, and protect the environment. materials currently being used for data transmission. As means reduced carbon emission and heat generation of the latest 30 Huawei WiFi6 modems were turned over the country’s only pure play, end-to-end fiber broadband which would result in the elimination of the need for the school. provider, Converge promotes this green technology that cooling systems. 46 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 47 ANNUAL REPORT 2020 #EXPERIENCEBETTER

COVID-19 Response

The year 2020 was a year like no other. The disruption caused by the COVID-19 pandemic not only changed the way people lived and interacted, it changed the way companies did their business. Most importantly, it caused unprecedented challenges in the country’s economy and health care system.

When the World Health Organization (“WHO”) declared the COVID-19 outbreak as a pandemic on March 11, 2020, the Philippine government immediately responded by implementing measures and regulations to mitigate the transmission of the disease. The different regions in the country, including the National Capital Region (“NCR”), were placed under what was referred to as the “Enhanced Community Quarantine” (“ECQ”), which imposed strict stay-at-home orders for all individuals except those who are involved in essential activities such as food and health services. Throughout the year, the government updated the quarantine classifications to allow or disallow certain activities, depending on the current infection rate in the regions at the time. WFH arrangements for employees and remote requirement. All our broadband plans do not have of the COVID-19 virus within the workplace, which The quarantine restrictions have forced many learning for students became part of the new normal a data cap, allowing our subscribers to access the includes outlining home quarantine, isolation, and companies to implement work-from-home (“WFH”) as people started to get used to these over time. In internet without worrying about being throttled or local government reporting procedures for employees arrangements and all schools were required to go fact, over 80% of respondents in a Nielsen Company disconnected. who may have been exposed to the coronavirus or are into distance learning. Thus, the demand for fixed Enterprise Survey believed that WFH arrangements suspected to be infected. To cope with the surge in demand in 2020, Converge broadband further accelerated during the pandemic. would continue to be important even after the lifting more than doubled the number of installation teams as In terms of the company’s business operations, we And this created a seemingly permanent paradigm of mandatory stay-at-home orders. Moreover, over compared to pre-community quarantine imposition. As diversified the work locations of our contact center staff shift in connectivity requirements, according to a study 70% of businesses surveyed were willing to subsidize of December 2020, Converge installed nearly 90% of to ensure business continuity in case of disruptions. by leading regional consulting firm Media Partners their employees’ home broadband expenses in light of new subscribers in Metro Manila within seven days and We also enabled many of our staffers to work from Asia (“MPA”). these remote arrangements. over 60% within one day of application. home depending on the needs of our operations and their specific tasks. We introduced telecommuting and The MPA estimated that an average household could This was confirmed by a study conducted by Nielsen To support the expanding subscriber base, Converge flexible working hours. potentially require up to 480Gb of internet data per Company (Philippines). In its 2020 Residential Survey, it tripled its customer service personnel and ramped-up month to function optimally and that the requirement showed that approximately two-thirds of respondents its install and repair teams with the addition of over 400 All our business centers strictly enforced health and reported an increase of over 30% in home internet of a typical household can only be met through high- service vehicles since the start of the pandemic. safety protocols with no-touch temperature checks usage, and around 70% of respondents indicated that speed broadband with a minimum speed of 25Mbps. done before entry and social distancing measures they have or are likely to increase internet spending by PROTECTING OUR OWN implemented inside. Our guests are also required to 10% or more. MEETING THE INCREASED DEMAND For our employees, we focused on creating specific accomplish health forms and wear face masks and face Our entry-level unlimited fiber plan FiberX 1500 with health and safety protocols to contain the spread shields. speed of 35Mbps is well positioned to meet this 48 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 49 ANNUAL REPORT 2020 #EXPERIENCEBETTER

For those who needed to be at the office, we provided We have piloted this program in San Juan City where Floridablanca, Guagua, Lubao, and Sta. Rita. Converge announced this partnership, our CEO Dennis Anthony service vehicles and also lodging arrangements for Converge provided fiber-powered connection to its also donated 300 PPEs to the province of Tarlac. Uy explained, “We understand and empathize the those who live far away from the workplace. We also 12,000 public school students and teachers. Through importance of the timely and fast dissemination of purchased our own antigen testing kits so that our our high-speed broadband, students and teachers Our Company also continuously donates relief goods COVID-19 information for the government during employees and frontliners, especially those who face are able to interact in a virtual classroom and they to various barangays, mainly in Pampanga, to help the this critical period. A stable and reliable internet our customers, would be regularly tested. also have access to the learning management system most vulnerable sectors of the community amid the connection is necessary for the success of our of the city. adverse impact of the pandemic and the quarantine pandemic response and no agency needs it more We acknowledge that vaccination for COVID-19 is restrictions to their jobs and livelihood. than the IATF. Converge provided this support in an important way to ensure the health and safety of SUPPORTING OUR COMMUNITIES order to help them fulfill their mandate to keep the our workforce. As such, we began planning for the Converge was among the first to respond to the PARTNERING WITH RESPONSE TEAMS public informed, healthy, and safe.” procurement of COVID-19 vaccines for our employees needs of our immediate communities to help combat We have also partnered with the Philippine Red Cross and their loved ones early on. An information VACCINE EDUCATION the spread of COVID-19. (PRC) to provide fiber connectivity at the Kamia campaign about vaccines had also been launched Residence Hall in the University of the Philippines Converge is also collaborating with the Philippine Foundation for Vaccination in its mission to to keep our employees informed about vaccines and PPE AND RELIEF GOODS DONATION Diliman which has been converted into a quarantine increase acceptability within the company. communicate the benefits of disease prevention At the onset of the pandemic, the country’s facility. Aside from our own antigen testing activity, through vaccination. This fully supports the healthcare system faced a massive shortage in critical we also coordinate with the PRC for needed Reverse government’s efforts in preventing and controlling AIDING REMOTE LEARNING protective equipment against the virus. Quick to Transcription-Polymerase Chain Reaction (“RT-PCR”) vaccine preventable diseases in the country. With all classes now being done remotely, Converge action, Converge addressed the shortfall for PPEs, tests for those who tested positive in our antigen has partnered with the Department of Education particularly for under-resourced provincial hospitals. testing. (DepEd) to enable online learning for public schools Our Company is supporting the Foundation’s Vaccinology Training Course that covers the basic across the country. Through the support of local In April 2020, Converge donated PPEs to the cities Converge also provided the Inter-Agency Task Force principles of vaccination, vaccine storage and governments, we are providing fiber connectivity to of Angeles, Mabalacat, San Fernando, Porac, and for Emerging Infectious Diseases (“IATF-EID”) with handling, vaccine safety and managing adverse public school teachers and students so that they can towns of Apalit, Mexico, Bacolor, Magalang, Arayat, fast end-to-end fiber internet connection to help events, and communication on vaccine hesitancy. access DepEd’s digital learning resources such as the Sta. Ana, Candaba, San Luis, Macabebe, San Simon, the agency manage its communication channels and DepEd Commons. data transmissions better. In a statement when we 50 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 51 ANNUAL REPORT 2020 #EXPERIENCEBETTER

CORPORATE GOVERNANCE

In compliance with pertinent regulations, the the Management. The Board is mandated to hold its of such board, the Company’s Board of Directors Corporate Governance Committee Integrated Annual Corporate Governance Report regular and special meetings in person or through includes 3 independent directors (representing Chairman Amando M. Tetangco, Jr. (“iACGR”) will replace the Corporate Governance teleconferencing. almost 43% of total board representation), all of Members Roman Felipe S. Reyes section of this Report, the previous SEC Form whom have the necessary qualifications and without Francisco Ed Lim ACGR and PSE’s CGR-1, and shall be submitted by In adopting the Manual, we understand the any disqualifications. The Board is composed the Company to pertinent regulatory agencies on responsibilities of the Board and its members, of experienced individuals with different and Board Risk Oversight Committee or before May 30 of every year. The iACGR will be in governing the conduct of our business, the complementing skills, experiences, perspectives, and Chairman Amando M. Tetangco, Jr. available in the Company website upon completion Board Committees, in focusing on specific board backgrounds. Members Roman Felipe S. Reyes and submission to the regulatory agencies. functions to aid in the optimal performance of Francisco Ed Lim its roles and responsibilities, and the officers, in BOARD COMMITTEES On June 15, 2020, the Board has adopted the Manual ensuring adherence to corporate principles and best The Board has established board committees that Nominations and Remuneration Committee on Corporate Governance (“Manual”), in compliance practices. The Manual establishes, among others, the focus on specific board functions to aid in the optimal Chairman Dennis Anthony H. Uy with SEC Memorandum Circular No. 19, Series of composition of the board committees, and principles performance of its roles and responsibilities: Members Saurabh N. Agarwal 2016, which institutionalizes the principles of good on adequate and timely information, accountability Maria Grace Y. Uy corporate governance in the entire organization. We and audit, stockholders’ rights and protection of Jose P. de Jesus believe that it is a necessary component of sound minority stockholders’ interests, communication Audit and Related Party Transactions Committee Francisco Ed Lim strategic business management, hence, we undertake process, training, disclosures, self-assessment, and Chairman Roman Felipe S. Reyes efforts to create awareness within the organization. sustainability. Members Jose P. de Jesus BOARD ASSESSMENT Amando M. Tetangco, Jr. We are in the process of formulating an internal self- rating system that can measure the performance of The Manual provides that it is the Board that has In compliance with Section 22 of Republic Act No. Maria Grace Y. Uy Board and Management in accordance with the criteria the primary responsibility for the governance of 11232 or the Revised Corporation Code, which Saurabh N. Agarwal provided for in the Manual. The formal assessment the corporation. In addition to setting the policies requires, among others, that the board of corporations process and its summary will be disclosed in the for the accomplishment of corporate objectives, it vested with public interest shall have independent subsequent Annual Report. has the duty to provide an independent check on directors constituting at least twenty percent (20%) 52 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 53 ANNUAL REPORT 2020 #EXPERIENCEBETTER

RISK MANAGEMENT

Enterprise Risk Management. We formally disclosed the key risks related to our business in our Prospectus Management Approach dated October 8, 2020. These and other risks are regularly discussed and reviewed by our management. With our listing on the Philippine Stock Exchange, it was agreed that a more formal Enterprise Risk Management We have documented policies and internal controls to reasonably ensure that we are able to manage process- (“ERM”) program was required, in compliance with the SEC’s Code of Corporate Governance. In early 2021, level risks. In addition, at an enterprise and project levels, we have adopted the following management approach: we initiated a project to build an ERM capability. Our ERM Strategy aims to embed risk awareness within our company culture and effectively communicate to the board and management the risks that Converge could potentially face. We also plan to look into potential ESG-related risks and assess how these could Board Committees. The establishment and maintenance of the various Board Committees is an integral part of be incorporated into our ERM framework and eventually formalized in our applicable business processes, our risk management. The Board of Directors created several committees to assist in managing and mitigating metrics and targets. the risks surrounding Converge. These bodies are also deeply involved in the overall governance matters of the company. These include the Board Risk Oversight Committee, the Audit and Related Party Transactions Our President is responsible for the development, implementation, maintenance, and improvement of risk Committee, the Corporate Governance Committee, the Nominations and Remuneration Committee, and the management policies, processes, and documentation. We are in the process of setting up a dedicated ERM Executive Committee. team reporting to the President.

• The Board Risk Oversight Committee oversees handling the various risks that the company could face Identified risks under the proposed ERM framework will go through four phases: as we try to achieve our strategic goals. The Committee regularly reviews the current risk management Analysis processes to identify areas of weakness and points of improvement to be addressed. • - This refers to the initial planning of how Converge will identify risks and then execute the fact- finding process. • The Audit and Related Party Transactions Committee is responsible for enhancing the Board’s oversight • Evaluation - Risks are assessed and assigned to the appropriate bodies based on their urgency, importance, capability over the financial reporting, internal control system, internal and external audit processes, and and relevance. compliance with applicable laws and regulations of Converge. It also reviews and evaluates related party • Treatment - Developing action plans for mitigating and combating these risks. transactions to enhance corporate transparency and promote fair transactions. • Reporting - Risks are disclosed and the process is evaluated to monitor its effectiveness. • The Corporate Governance Committee has the duty and responsibility to assist the Board in the In 2020, our management has also established an Environment, Social and Governance (“ESG”) Committee, performance of its corporate governance responsibilities. a cross-functional working group responsible for determining risks and opportunities related to ESG and the implementation of our ESG and other sustainability-related initiatives. This committee also governs our • The Nominations and Remuneration Committee is responsible for reviewing the structure, size, and Corporate Social Responsibility (“CSR”) Team that ensures CSR activities are being planned, implemented, composition of the Board. It reviews and evaluates the qualifications of the persons nominated to the and measured. Currently, the key focus areas of our CSR activities include the provision of: (1) basic needs in response to COVID-19 and natural disasters, (2) support to enhance local health facilities, and (3) digital Board and to other positions requiring appointment by the Board. It also reviews succession plans for learning tools and internet access to local communities. the Board and makes recommendations to the Board on the policy and structure of Converge for all remuneration of the Directors and senior management. Project Risk Management. Project risk management processes are embedded in all of our key strategic and operational initiatives. We require each new major project to have a formal project risk assessment and • The Executive Committee possesses the powers of the Board and has the right to use them in managing mitigation plan. Risks and issues are part of regular status reporting. the business and affairs of Converge when the Board is not in session, except for certain actions and decisions. 54 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 55 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Board of directors

FROM LEFT: DENNIS ANTHONY H. UY AMANDO M. TETANGCO, JR. FRANCISCO ED. LIM CEO, Co-Founder and Executive Director Independent Non-Executive Director Non-Executive Director JOSE P. DE JESUS Chairman, Independent Non-Executive Director MARIA GRACE Y. UY ROMAN FELIPE S. REYES SAURABH NARAYAN AGARWAL President, Chief Resources Officer, Co-Founder and Independent Non-Executive Director Non-Executive Director Executive Director 56 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 57 ANNUAL REPORT 2020 #EXPERIENCEBETTER

3 CONVERGE ICT SOLUTIONS INC. 3 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 4 EXPLORE A WORLD OF POSSIBILITIES: 4 ANNUAL REPORT 2020 ANNUAL REPORT 2020 #EXPERIENCEBETTER #EXPERIENCEBETTER

JOSEJOSE PAMINTUAN P. DE JESUS DE JESUS DENNIS ANTHONY H.JOSE UY PAMINTUAN DE JESUS DENNIS ANTHONY ANTHONY H. H. UY UY MARIA GRACE GRACE UY Y. UY MARIA GRACE UY IndependentChairman of theNon-Executive Board, Director Founder and Chief ExecutiveIndependent Officer Non-Executive Director FounderCEO, Co-Founder and Chief and Executive Executive Officer Director President,Co-Founder Chief & President Resources Officer, Co-Founder and Co-Founder & President Independent Non-Executive Director ExecutiveChief Resource Director Officer Chief Resource Officer

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Angeles CityPreviously, Cable Televisionshe was the Technology Corp, and the Angeles City Cable Television Corp.,diversified Private Philippine Infra Development conglomerate Corp., San SMC Miguel Skyway Corporation Corp., Pampanga-basedCorp. cablediversified tv solutions Philippine provider conglomerateinto the only San Miguel Corporation WithPresidentPampanga-based Converge and CEO hitting cable of itsComClark tv stride solutions in Network2016 provider and and seeing into Technology the only ChiefNetwork. Finance OfficerWith and Converge Executive hitting Vice its stridePresident in 2016 of and seeing Network. and SMCserves SLEX in multiple Inc. He boards.also sits Throughout as a member his of executive the Board of pure-play high-speed fixedand serves broadband in multiple operator boards. in the Throughout his executive momentousCorp.,pure-play Metroworks high-speed growth ICT since, fixed Construction Mr. broadband Uy is set Inc., to operatorAngeles bring the inCity the Cable ComClark Network andmomentous Technology growth Corp andsince, the Mr. Angeles Uy is set to bring the Trusteescareer Mr. of Jesus Kapampangan held senior Developmentpositions in Manila Foundation, Waterworks Holy PhilippinesIn the private over sector, the span hecareer ofserved 25 Mr. years. Jesusas President held senior and positionsCOO at in Manila Waterworks companyTVPhilippines Network, to over new Central the heights span Luzon asof it 25Cable completes years. TV Network, a nationwide Comstech CityHaving Cable notched Television the 16th companyNetwork. place in to theShe new Certified also heights served Publicas itas completes CFO a nationwide Having notched the 16th place in the Certified Public Angel& Sewerage University, System and (MWSS) the Automobile , Philippine AssociationLong Distance of the Manila Electric Co., President& Sewerage at Manila System North (MWSS) Tollways , Philippine Corp., Long Distance rolloutIntegration of the Alliance domestic Inc., fiber and Fortisbackbone Technologies. in 2021, to realize andAccountant VP at Savers(CPA) LicensureMallrollout Group Board of of the Companies. Examination domestic fiber She in 1989, startedbackbone in 2021, to realize Accountant (CPA) Licensure Board Examination in 1989, Philippines.Telephone Co. (PLDT) , Manila North Tollways Corporation, Mr.and Uy EVP started at PLDT. in the Among cableTelephone thebusiness awards Co. with (PLDT) he Angeles received , Manila City were North the Tollways Corporation, hisMr. visionUy started to bring in the world-class cable business broadband with Angeles services City to herMs. Uycareer secured with aIBM management Philippineshis vision role towhere bringat IBM she world-class Philippines eventually broadband held services to Ms. Uy secured a management role at IBM Philippines and MERALCO (Manila Electric Company), to name a few. CableCEO Excel Television Awards Network, in andLeadership the MERALCO first tvCommunication (Manilaservice Electricprovider by Company),in the to name a few. averageHeCable also Television Filipinos.serves Network, as Chairman the first of tvInformation service provider Broadcast in managerialshortly after. roles in accountingaverage Filipinos.and finance. She earned her shortly after. He was a cabinet member in two administrations, serving as theInternational city. Dennis, Association alongside hisof wife Business Mary Grace, Communicators/ soon after Unlimitedthe city. Dennis, Inc. and alongside Fortune his Hong wife MaryKong Grace, Seafood soon Inc., after and Bachelor of Science in Accountancy degree from the De La SecretaryMr. de Jesus of broughtthe then hisDepartment expertise inof strategicGeneral Servicesmanagement from beganPhilippines, acquiring the Lux other in DominoMr.cable de tvJesus (Most providers brought Outstanding in Pampangahis expertise Alumnus) by in strategic management Presidentbegan acquiring of Hi Tech other Cable cable TV tv Inc., providers U5 Food in Inc.,Pampanga The Legend by SalleAlready University with a foot and in notched the IT industry, the 16th Ms.place Uy infounded the Certified Already with a foot in the IT industry, Ms. Uy founded 1987to government to 1988, Secretary when he ofwas the appointed Department to the of Publichelm of Works virtueAward of from the strengthAteneo De ofto their Manilagovernment service University, innovations. when andhe was the appointedUlirang to the helm of Seafoodvirtue of theRestaurant strength Inc. of theirand Caféservice de innovations.Azur Inc. He also has PublicComClark Accountant Network and(CPA) Technology Licensure Corp. Board in ExaminationPampanga in ComClark Network and Technology Corp. in Pampanga andtwo majorHighways agencies, from 1990the Department to 1993 and of Secretary Public Works of the then Ama Award in the fieldtwo ofmajor Business agencies, and Industrythe Department in 2019. of Public Works interests in several other companies in technology, food, 1989.with her husband and Converge CEO Dennis Anthony Uy. with her husband and Converge CEO Dennis Anthony Uy. Departmentand Highways of (1990-1993), Transportation and theand Department Communications of from WithMr. de an Jesuseye for completed the futureand and hisHighways agraduate mind (1990-1993), for studiesinnovation, in and Human Mr. the Department of powerWith an utility, eye for and the real future estate. and Duea mind to forhis innovation,strong leadership Mr. Together. The couple gradually scaled up ComClark from Together. The couple gradually scaled up ComClark from 2010Transportation to 2011. Otherand Communications government positions (2010-2011). he heldPrior were UyDevelopment ventured into from fiber the Transportation opticUniversity technology of and Chicago, withCommunications ComClark and holds (2010-2011). Prior thatUy ventured propelled into the fiber robust optic growth technology of Converge, with Mr.ComClark Uy earned providing cable television requirements to delivering ICT providing cable television requirements to delivering ICT Cabinetto this, his Secretary government during service the includedadministration leading of the President Networka Master’s and Degree Technology in toSociology this,Corporation, his governmentfrom which Ateneo gradually service De Manila included leading the severalNetwork managementand Technology and Corporation, leadership which awards, gradually including and broadcast solutions. and broadcast solutions. CorazonDevelopment Aquino, Academy Undersecretary of the Philippines of the thenand serving Department as expandedUniversity, itswhere customer he alsoDevelopment base, obtained its suite his Academy of BA services in Economics. of andthe Philippines and serving as theexpanded Master its Entrepreneur customer base, Award its suite at the of services2020 Asia and Pacific ofCabinet Education, Secretary Culture during and the Sports, administration Executive of CorazonDirector of its expertise in the IT industry.Cabinet GoingSecretary from during strength the to administration of Corazon Enterpriseits expertise Awards in the IT(APEA), industry. and Going the from Entrepreneur strength to of the With ComClark having evolved into Converge ICT With ComClark having evolved into Converge ICT Aquino. strength, Dennis and MaryAquino. Grace Uy evolved ComClark into Yearstrength, Award Dennis handed and out Mary at theGrace 11th Uy Asia evolved CEO AwardsComClark (ACA). into Solutions Inc. in 2007, Ms. Uy now leads and manages all Solutions Inc. in 2007, Ms. Uy now leads and manages all Converge ICT Solutions Inc., and incorporated the company Converge ICT Solutions Inc., and incorporated the company aspects of financial planning and resource allocation as aspects of financial planning and resource allocation as As a leading business personality, Mr. de Jesus holds in 2007 As a leading business personality, Mr. de Jesus holds Hein 2007 earned his degree in BS Electrical Engineering from the Chief Resource Officer. Together with her husband, Ms. Chief Resource Officer. Together with her husband, Ms. directorships in several corporations including Petron directorships in several corporations including Petron Holy Angel University. Uy steers the overall strategic direction of the company Uy steers the overall strategic direction of the company Corporation and SMC Skyway Corporation. In recognition Mr. Uy’s dream for digitalCorporation transformation and SMC may Skyway have began Corporation. In recognition Mr. Uy’s dream for digital transformation may have began as it progressively expands its reach into the broadband as it progressively expands its reach into the broadband of his leadership and management excellence, Mr. de in Central Luzon, but itof took his offleadership in Metro and Manila. management In 2013, excellence, Mr. de in Central Luzon, but it took off in Metro Manila. In 2013, industry. industry. Jesus has received the CEO Excel Awards in Leadership Converge launched theJesus Fiber-to-the-Home has received the (FTTH) CEO Excelfixed Awards in Leadership Converge launched the Fiber-to-the-Home (FTTH) fixed Communication, and the Lux in Domino (Most Outstanding broadband services andCommunication, entered Metro Manila,and the the Lux nation’s in Domino (Most Outstanding broadband services and entered Metro Manila, the nation’s Ms. Uy is a graduate of De La Salle University, earning her Ms. Uy is a graduate of De La Salle University, earning her Alumnus) Award from alma mater Ateneo De Manila capital. From there, Mr.Alumnus) Uy focused Award his efforts from alma on buildingmater Ateneo De Manila capital. From there, Mr. Uy focused his efforts on building Bachelor of Science in Accountancy in 1988. Bachelor of Science in Accountancy in 1988. University. He was most recently awarded the Ulirang Ama up Converge’s fiber network,University. while He competitors was most recently were awarded the Ulirang Ama up Converge’s fiber network, while competitors were Award in the field of Business & Industry in 2019. battling it out in other technologyAward in the spaces field suchof Business as wireless & Industry in 2019. battling it out in other technology spaces such as wireless broadband or DSL. broadband or DSL. Mr. de Jesus completed his graduate studies in Human Mr. de Jesus completed his graduate studies in Human Development from the University of Chicago, and holds The robust fiber networkDevelopment infrastructure from is theenvisioned University to of Chicago, and holds The robust fiber network infrastructure is envisioned to a Master’s Degree in Sociology from Ateneo De Manila be ready for any digitala transformationMaster’s Degree of in the Sociology companies’ from Ateneo De Manila be ready for any digital transformation of the companies’ University, where he also obtained his BA in Economics. University, where he also obtained his BA in Economics. 58 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 59 ANNUAL REPORT 2020 #EXPERIENCEBETTER

5 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 6 ANNUAL REPORT 2020 #EXPERIENCEBETTER

AMANDO M.M. TETANGCO TETANGCO JR. JR. ROMAN FELIPEFELIPE S. S.REYES REYES FRANCISCO ED. ED. LIM LIM SAURABH NARAYAN NARAYAN AGARWAL AGARWAL IndependentIndependent Non-ExecutiveNon-Executive Director IndependentIndependent Non-ExecutiveNon-Executive Director Non-ExecutiveIndependent Non-Executive Director Director Non-ExecutiveIndependent Non-Executive Director Director

Amando “Say”Tetangco Maglalang Jr., Tetangco68 years Jr. old,is an IndependentFilipino, is an Roman “Manny”Felipe S. FelipeReyes, S.69 Reyes years joined old, Filipino, Converge has ICTbeen an FranciscoAtty. Francisco Ed. Lim Ed. was Lim,appointed 66 years as Non-Executive old, Filipino, was Saurabh N.Agarwal, Agarwal 40 is yearsa Non-Executive old, Indian, Director has been of a Non- IndependentDirector of Converge Non-Executive ICT Solutions Director Inc., ofand Converge was elected since to IndependentSolutions Inc.’s Non-Executive Board on 8 June Director 2020. ofMr. the Felipe Board is the since Directorappointed of asthe Non-Executive Company on 17 Director June 2020. in June 2020. He ConvergeExecutive ICTDirector Solutions, of Converge Inc., having since been August appointed 2019. to He Junethe Board 2020. on He 8 Junealso 2020.holds Hedirectorships also holds directorshipsin Toyota Motors in JuneFounder 2020. and Hethe ispresent the Founding Chairman Partner of Reyes and Tacandong Chairman is a Senior Partner at leading law firm Angara Abello theis a BoardPartner on at19 Augustthe global 2019. private equity firm Warburg Corp.Toyota and Motors Belle Corporation Corporation. and Mr. Belle Tetangco Corporation. served as the of& Co Reyes (RT&Co), Tacandong considered & Co. one Prior of the to fastest founding growing his own Mr.Concepcion Lim, highly Regala regarded & Cruz as Lawan expert Offices in commercial (ACCRALAW). law He Pincus. He also holds corporate directorship and Board third Governor of the Bangko Sentral ng Pilipinas and holds professional services firmcompany, in the he country. was with Director Sycip GorresReyes’ andis also dispute a professional resolution, lecturer is the Senior and the Partner Vice atChair leading of the Mr.membership Agarwal is in a various Partner firms at the such global as privateCircles equityAsia Pte. firm, Ltd. theMr. Tetangcodistinction served of being as the the third first Governor to be appointedof the Bangko for two Velayoextensive & Co, experience the Philippine in the practice accounting of Ernst profession & Young spans Global lawCommercial firm Angara Law AbelloDepartment Concepcion at the Regala Philippine & Cruz Judicial Law Warburg(a digital Pincus.telecommunications He also holds companycorporate that directorship originated in consecutiveSentral ng Pilipinas terms (July and holds2005 the- July distinction 2017). During of being his theterm, first Limitedover 40 years,(EY Philippines), marked by afor storied 25 years career where in auditing he served OfficesAcademy (ACCRALAW).(PHILJA), and Hea islaw also professor a professional at the lecturer Ateneo andSingapore), Board membership Clean Max Enviroin various Solutions, firms such MoMo as PaymentCircles theto be Philippines appointed enjoyed for two a consecutive predictable terms inflation (July environment, 2005 - July asgiant Senior Sycip Partner Gorres andVelayo Vice & CoChairman (SGV) wherefor Client he held Services key andLaw theSchool Vice andChair the of Santhe CommercialBeda College Law Graduate Department School AsiaServices Pte. andLtd. Techcombank.(a digital telecommunications company a2017). robust During banking his system,term, the and Philippines a vibrant investmentenjoyed a predictable climate as andmanagement Accounts, positions Head of includingthe Japan Senior Business Partner Services, and Vice and atof theLaw. Philippine He holds Judicial directorships Academy in other(PHILJA), companies and a law such that originated in Singapore), Clean Max Enviro reflectedinflation environment,by successive a robustupgrades banking in the system,country’s and sovereign a vibrant ChairmanPresident. of the Winning Clients Committee. Mr. Reyes professoras Alphaland at the Corp., Ateneo Energy Law School Development and the San Corp., Beda and Solutions,Prior to joining MoMo WarburgPayment Pincus,Services Mr. and Agarwal Techcombank. worked at debtinvestment rating. climate He has asconsistently reflected beenby successive named asupgrades one of thein the is also currently a member of the Board of Directors in CollegeProducers Graduate Savings School Bank. ofAtty. Law. Lim was the President and McKinsey & Company in New Jersey and New Delhi, and world’scountry’s best sovereign central debtbankers rating. by financial publication Global Philippine Geothermal Production Company, Pakistan CEO of the Philippine Stock Exchange from 2004-2010 Mr. Felipe obtained his Bachelor’s Degree in Commerce, PriorTemasek to joining Holdings Warburg in Mumbai. Pincus, Mr. Mr. Agarwal Agarwal hasworked a wealth at Finance, having earned an “A” rating in its Central Bank MajorInternational in Accounting Container from Terminal San Beda Limited, College RPN which 9, FF Cruz during which he also held several senior management of experience in investment management, particularly in ReportPrior to Cardshis appointment for 2006, to2007, the top and position,Mr. 2011-2016. Tetangco As central & Co. Inc., Pasudeco, Premium Leisure Corp., and All-Asian positionsA prominent at iconSecurities in corporate Clearing circles, Corporation Mr. Lim was namedof the McKinsey & Company in New Jersey and New Delhi, and has spent over three decades at country’s central monetary later recognized him as an Outstanding Alumnus. He President and CEO of the Philippine Stock Exchange Temasekthe energy Holdings sector inin Mumbai. the Asia-Pacific. He obtained both bank chief, he also concurrently served as the Chairman earnedCountertrade. his Master’s He is alsoDegree a member in Business of the Administration, Board of Trustees Philippines, the Capital Market Development Center, his Bachelor’s Degree in Electrical Engineering and his ofauthority, the Anti-Money rising through Laundering the ranks sinceCouncil he joined (AMLC), the the in San Beda University in Manila and San Beda College Inc.,from the2004-2010 Philippine during Stock which Exchange he also Foundation, held several Inc., senior the institution in 1974. concentration in Finance, from the University of Detroit. management positions at Securities Clearing Corporation Master’s in Technology (Microelectronics) from the India Financial Stability Coordination Council, and the Philippine Alabang. Mr. Reyes is a Certified Public Accountant. He Philippine Dealing and Exchange Corporation, and the InstituteMr. Agarwal of hasTechnology. a wealth ofHe experience completed in investmenthis MBA from International Convention Center. Prior to his appointment earned his Bachelor’s degree in Commerce, major in Securitiesof the Philippines, Investors the Protection Capital Market Fund. Atty.Development Lim also served management, particularly in the energy sector in the A pillar in the banking industry, in government, and in Harvard University, USA. as Governor, Mr. Tetangco has spent over three decades Accounting,Other awards from to Mr. San Felipe’s Beda name College include and the received his inCenter, an extensive Inc., the Philippinecapacity inStock the ExchangeSupreme CourtFoundation, through Asia-Pacific. He obtained both his Bachelor’s Degree in business circles, Mr. Tetangco has consistently been named at the central monetary authority, rising through the ranks Master’sOutstanding degree Bulakeno in Business Dangal Administration, ng Lipi, Most concentrationDistinguished membershipInc., the Philippine in several Dealing sub-committees, and Exchange Corporation,taking part in Electrical Engineering and his Master’s in Technology as one of the world’s best central bankers by financial since he joined the institution in 1974.For his contribution inBedan Finance Awardee, from theHuwarang University Anak of ng Detroit, Bulakan Michigan, in the USA. theand thecreation Securities of a Investorsnumber ofProtection Rules of Fund. Court pertaining (Microelectronics) from the India Institute of Technology. publication Global Finance, having earned an “A” rating in its to national development, Mr. Tetangco was conferred with Hefield was of anBanking Asia Pacific and Finance, Entrepreneurship and the Asia Awardee Pacific to commerce and corporate restructuring. Atty. Lim In 2009, Mr. Agarwal completed his MBA from Harvard Central Bank Report Cards for 2006, 2007, and 2011-2016. the Order of Lakandula, with the Rank of Bayani in 2009 by Entrepreneurship Awards in the field of Professional and Givenobtained his avaluable double voiceBachelor’s in legal Degree matters, in Arts Mr. Lim(Cum served Laude) University. the President of the Philippines. In 2019, he also received Business Services. Director Felipe, in the service of his inand an in extensive Philosophy capacity (Magna in Cum the SupremeLaude) from Court the through University For his contribution to national development, Mr. Tetangco in the field of Professional and Business Services in 2016. the Order of the Rising Sun, Gold and Silver Star from province, also engaged in civic activities, and became membershipof Santo Tomas. in several He earned sub-committees, his Bachelor thereby of Laws taking degree was conferred with the Order of Lakandula, with the Rank of With his active participation in his home province of the Emperor of Japan for promoting closer cooperation President of the Bulacan Kaunlaran Foundation and the partfrom inthe the Ateneo creation de of Manilaa number University of Rules and of Court received his Bayan in 2009. BulacanBulacan, Chapterhe received of Philippine numerous Institute awards offrom Certified the province Public between the Philippines and Japan in the financial sector. including the Huwarang Anak ng Bulakan (Model Son pertainingMaster’s Degree to commerce in the same and corporate field from restructuring. the University of Prior to joining the central bank, he was with auditing firm Accountants. Pennsylvania. During his governorship, he also concurrently served as the of Bulacan Award) in the fields of banking and finance Sycip Gorres Velayo (SGV) and Co. Mr. Tetangco obtained Chairman of the Anti-Money Laundering Council (AMLC), the in 2015. He also received the Most Distinguished Bedan Mr. Lim holds directorships in several other companies his Bachelor’s Degree in Economics (Cum Laude) from Financial Stability Coordination Council, and the Philippine AwardMr. Felipe from also the holds San BedaBoard Alumni membership Association in 6 other in 2004. apart from Converge, such as Alphaland Corporation the Ateneo de Manila University where he also took up an International Convention Center companies Energy Development Corporation, Producers Savings MBA. He then completed a Master’s in Public Policy and Bank Corporation, to name a few. AdministrationPrior to his renowned Concentration career at inthe Development BSP, Mr. Tetangco Economics was fromconnected the University to auditing of Wisconsin,firm Sycip USA.Gorres Velayo (SGV) and Atty. Lim obtained a double Bachelor’s Degree in Arts Co. (cum laude) and in Philosophy (Magna Cum Laude) from the University of Santo Tomas. After which, he Mr. Tetangco obtained his Bachelor’s Degree in Economics pursued his Bachelor of Laws from the Ateneo de Manila (Cum Laude) from the Ateneo de Manila University where University, and received his Master’s Degree in the same he also completed his MBA. He further pursued an Master’s field from the University of Pennsylvania. in Public Policy and Administration Concentration in Development Economics from the University of Wisconsin. 60 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 61 ANNUAL REPORT 2020 #EXPERIENCEBETTER

Key Officers

FROM LEFT: JESUS C. ROMERO RONALD G. BRUSOLA ALBERTO L. SANTOS Chief Operations Officer Chief Technology Officer Chief Customer Experience Officer DENNIS ANTHONY H. UY Chief Executive Officer and Co-Founder BENJAMIN REX EMILIO B. AZADA ULYSSES C. NAGUIT CHRISTINE RENEE R. BLABAGNO Chief Strategy Officer Chief Information Officer Treasurer (Appointed March 10, 2021) MARIA GRACE Y. UY President, Chief Resources Officer, and Co-Founder 62 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 63 ANNUAL REPORT 2020 #EXPERIENCEBETTER

ATTY. MARIA GRACE C. DE JESUS Compliance Officer OWEN KIEFFER D. OCAMPO SUBSIDIARIES: (until April 12, 2021) Investor Relations Officer (Appointed January 11, 2021) MILES TONN C. CHUA ATTY. LAURICE P. ESTEBAN-TUASON President and Chief Operations Officer, Compliance Officer ATTY. ELVIRA C. OQUENDO Metroworks ICT Solutions Inc. (Appointed April 12, 2021) Corporate Secretary MATTHIAS VUKOVICH Chief Financial Office Adviser, Director of Converge ICT Solutions (Global) 64 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 65 ANNUAL REPORT 2020 #EXPERIENCEBETTER

STATEMENT OF MANAGEMENT’S Financial RESPONSIBILITY FOR FINANCIAL STATEMENTS

Statements The management of CONVERGE INFORMATION & COMMUNICATIONS TECHNOLOGY, INC. & SUBSIDIARIES (the “Group”) is responsible for the preparation and fair presentation of the consolidated financial statements including the schedules attached therein, as at and for the years ended December 31, 2020 and 2019, in accordance with the prescribed financial reporting framework indicated therein, and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Group’s financial reporting process.

The Board of Directors reviews and approves the consolidated financial statements including the schedules attached therein, and submits the same to the stockholders.

Isla Lipana & Co., the independent auditor appointed by the stockholders, has audited the consolidated financial statements of the Group in accordance with Philippines Standards on Auditing, and in its report to the stockholders, has expressed its opinion on the fairness of presentation upon completion of such audit.

JOSE P. DE JESUS Chairman of the Board

DENNIS ANTHONY H. UY CHRISTINE RENEE R. BLABAGNO Chief Executive Officer Deputy Chief Financial Officer 66 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 67 ANNUAL REPORT 2020 #EXPERIENCEBETTER

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors and Shareholders of We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the Converge Information and Communications Technology Solutions, Inc. consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and New Street Bldg., Mc Arthur Highway, controls, and the industry in which the Group operates. Balibago, Angeles City, Pampanga Key Audit Matters

Report on the Audits of the Consolidated Financial Statements Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the Our Opinion consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Converge Information and Communications Technology Solutions, Inc. (the “Parent Company”) and Key audit matter identified in our audit is revenue recognition. its subsidiaries (together, the “Group”) as at December 31, 2020 and 2019, and their consolidated financial performance and their consolidated cash flows for each of the three years in the period ended December 31, 2020 in accordance with Revenue recognition How the matter was addressed in our audit Philippine Financial Reporting Standards (PFRS).

What we have audited Refer to Note 12 and accounting policies in Note 23.19 Our audit procedures to address relevant assertions over to the consolidated financial statements. revenue recognition included the following: The consolidated financial statements of the Group comprise: The Group recognized revenues amounting to P15,652 • We obtained an understanding of the revenue recognition million for the year ended December 31, 2020. The policy in accordance with PFRS 15 and the related business • the consolidated statements of financial position as at December 31, 2020 and 2019; Group’s revenue comprises primarily income from processes, including an understanding of the related • the consolidated statements of total comprehensive income for each of the three years in the period ended fixed broadband services. Information and Technology (IT) environment. December 31, 2020; • the consolidated statements of changes in equity for each of the three years in the period ended December 31, 2020; • With the assistance of our IT specialists, we evaluated Revenue recognition has been identified as a key the design and tested the operating effectiveness of the • the consolidated statements of cash flows for each of the three years in the period ended December 31, 2020; and audit matter primarily due to the large volume of data controls surrounding the relevant IT systems, as well as the • the notes to the consolidated financial statements, which include a summary of significant accounting policies. and transactions processed through various complex related application controls over the capture and recording systems. of the revenue transactions. Basis for Opinion • We tested the operating effectiveness of key controls We conducted our audits in accordance with Philippine Standards on Auditing (PSA). Our responsibilities under those with particular emphasis on the capture and recording standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements of revenue transactions, initiation and authorization of section of our report. rate changes, introduction of new plans and calculating amounts billed to customers. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. • We tested reconciliation of revenue recognized in the business support systems to the general ledger and Independence assessed whether the reconciling items were properly supported by underlying documentation, on a sample We are independent of the Group in accordance with the Code of Ethics for Professional Accountants in the Philippines basis. (Code of Ethics), together with the ethical requirements that are relevant to our audit of the consolidated financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these requirements • We assessed on a sample basis, the accuracy of customer and the Code of Ethics. bills for existing plans as well as for new plans introduced in the year. Our Audit Approach • We performed substantive procedures to gain comfort over residential and enterprise service revenues. As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the • We evaluated journal entries posted to revenue accounts, consolidated financial statements. In particular, we considered where management made subjective judgements; for on a specific risk-based sample basis, and compared the example, in respect of significant accounting estimates that involved making assumptions and considering future events details of these journal entries with relevant underlying that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, documentation. including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. 68 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 69 ANNUAL REPORT 2020 #EXPERIENCEBETTER

INDEPENDENT AUDITOR’S REPORT

Other Information • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Management is responsible for the other information. The other information comprises the information included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A, but does not include the consolidated financial statements • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on and our auditor’s report thereon. The SEC Form 20-IS (Definitive Information Statement) and SEC Form 17-A are expected the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast to be made available to us after the date of this auditor’s report. significant doubt on the ability of each entity within the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Our opinion on the consolidated financial statements does not cover the other information and we will not express any consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are form of assurance conclusion thereon. based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause an entity within the Group to cease to continue as a going concern. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a materially misstated. manner that achieves fair presentation.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance audit. with PFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be In preparing the consolidated financial statements, management is responsible for assessing the ability of each entity thought to bear on our independence, and where applicable, related safeguards. within the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate or to cease operations of an entity within From the matters communicated with those charged with governance, we determine those matters that were of most the Group, or has no realistic alternative but to do so. significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the Those charged with governance are responsible for overseeing the Group’s financial reporting process. matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements such communication.

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are The engagement partner on the audit resulting in this independent auditor’s report is Jan Michael L. Reyes. free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with PSA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered Isla Lipana & Co. material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with PSA, we exercise professional judgment and maintain professional skepticism Jan Michael L. Reyes throughout the audit. We also: Partner CPA Cert. No. 104972 • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud PTR No. 0011393, issued on January 5, 2021, Makati City or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient SEC A.N. (individual) as general auditors 1484-AR-1, Category A; effective until July 4, 2021 and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting SEC A.N. (firm) as general auditors 0142-SEC, Category A; from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, valid to audit 2020 to 2024 financial statements misrepresentations, or the override of internal control. TIN 215-692-059 BIR A.N. 08-000745-122-2019, issued on September 18, 2019; effective until September 17, 2022 • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are BOA/PRC Reg. No. 0142, effective until January 21, 2023 appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Makati City March 9, 2021 70 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 71 ANNUAL REPORT 2020 #EXPERIENCEBETTER

CONSOLIDATED STATEMENTS OF CONSOLIDATED STATEMENTS OF FINANCIAL POSITION TOTAL COMPREHENSIVE INCOME As at December 31, 2020 and 2019 For each of the three years in the period ended December 31, 2020 (All amounts in Philippine Peso) (All amounts in Philippine Peso)

December 31, December 31, January 1, Notes 2020 2019 2018 Notes 2020 2019 2019 Revenues 12 15,652,332,331 9,139,488,571 5,054,584,471

ASSETS Cost of services 13 (7,064,620,829) (4,440,734,408) (2,328,496,703) Current assets Gross profit 8,587,711,502 4,698,754,163 2,726,087,768 Cash and cash equivalents 2 12,957,408,688 6,233,043,005 476,652,551 Trade and other receivables, net 3 2,172,669,790 2,105,517,180 918,010,088 General and administrative expenses 14 (2,772,068,574) (1,414,843,269) (912,662,382) Due from related parties, current portion 17 1,408,259,424 586,606,839 474,441,542 Network materials and supplies, net 4 2,031,358,171 963,409,462 1,158,728,413 Deferred contract costs, current portion 12 1,109,716,644 489,441,350 176,729,005 Provision for impairment of trade and other receivables 3 (720,474,218) (529,944,733) (124,913,466) Other current assets 5 1,591,424,876 475,483,492 141,588,478 Total current assets 21,270,837,593 10,853,501,328 3,346,150,077 Unrealized fair value loss on financial asset at FVTPL 22.1 (26,489,855) – – Non-current assets Property, plant and equipment, net 6 28,127,033,243 15,939,903,622 8,047,931,391 Advances to fixed assets suppliers 5 2,507,879,161 1,213,869,929 336,269,516 Other income, net 15 360,342,042 18,339,988 51,141,607 Right-of-use assets, net 18 1,859,298,827 1,638,441,692 191,796,785 Profit from operations 5,429,020,897 2,772,306,149 1,739,653,527 Intangible assets, net 7 1,154,646,550 669,869,002 537,265,790 Deferred contract costs, net of current portion 12 543,161,211 229,286,221 80,311,626 Finance costs 9,18 (550,310,967) (275,051,087) (70,555,628) Deferred input value-added tax, net of current portion 5 138,911,552 75,484,851 104,881,765 Profit before income tax Deferred income tax assets, net 16 788,364,030 539,129,762 56,801,788 4,878,709,930 2,497,255,062 1,669,097,899 Due from related parties, net of current portion 17 163,422,374 - - Financial asset at fair value through profit or loss (FVTPL) 22.1 71,904,900 - 18,749,900 Income tax expense 16 (1,490,881,430) (592,522,061) (427,475,338) Other non-current assets 5 86,623,893 - - Profit for the year 3,387,828,500 1,904,733,001 1,241,622,561 Total non-current assets 35,441,245,741 20,305,985,079 9,374,008,561 Total assets 56,712,083,334 31,159,486,407 12,720,158,638 Other comprehensive income

LIABILITIES AND EQUITY Item that will not be reclassified to profit or loss Remeasurement (loss) gain on retirement benefit Current liabilities obligation, net of tax 10 (47,110,560) 45,167,798 8,463,140 Trade and other current liabilities 8 13,252,779,907 7,175,641,361 4,342,087,170 Total comprehensive income for the year 3,340,717,940 1,949,900,799 1,250,085,701 Loans payable, current portion 9 731,214,286 1,098,250,000 1,521,464,954 Lease liabilities, current portion 18 325,737,209 355,097,271 84,443,057 Due to related parties 17 217,976,119 166,816,540 422,642,935 Profit attributable to: Deferred revenue, current portion 12 463,619,256 199,477,561 105,226,020 Owners of the Parent Company 3,387,828,500 1,960,019,346 1,257,116,045 Income tax payable 393,924,516 357,559,511 155,064,024 Non-controlling interest – (55,286,345) (15,493,484) Dividends payable 11 - 807,651,604 - Total current liabilities 15,385,251,293 10,160,493,848 6,630,928,160 3,387,828,500 1,904,733,001 1,241,622,561 Non-current liabilities Deferred revenue, net of current portion 12 205,105,237 81,955,912 47,067,265 Total comprehensive income attributable to: Loans payable, net of current portion 9 10,582,607,143 6,851,625,000 1,203,208,334 Owners of the Parent Company 3,340,717,940 2,005,187,144 1,265,579,185 Lease liabilities, net of current portion 18 1,507,853,434 1,374,860,357 70,927,569 Non-controlling interest – (55,286,345) (15,493,484) Retirement benefit obligation 10 123,146,658 30,940,684 64,915,090 Subscribers’ deposits, net of current portion 8 1,132,965,276 491,831,373 94,604,975 3,340,717,940 1,949,900,799 1,250,085,701 Total non-current liabilities 13,551,677,748 8,831,213,326 1,480,723,233 Total liabilities 28,936,929,041 18,991,707,174 8,111,651,393 Earnings per share 19 Equity Attributable to owners of the Parent Company Basic 0.61 0.31 0.25 Share capital 11 Diluted 0.48 0.31 0.25 Common shares 1,881,573,615 1,250,000,000 1,250,000,000 Convertible preferred shares - 306,818,180 - Please refer to our 2020 SEC 17A Report for the Notes to the Financial Statements Additional paid-in capital 11 18,746,088,245 6,541,191,820 - (https://corporate.convergeict.com/wp-content/uploads/2020/10/CNVRG_FY20_17A_vF.pdf) Retained earnings 11 Appropriated - 2,200,000,000 2,200,000,000 Unappropriated 7,139,049,614 1,814,215,854 1,028,202,624 Reserve for remeasurements of retirement benefit obligation, net of tax 10 8,130,319 55,240,879 10,073,081 Other reserves 1.7, 11 - - 83,000,000 27,774,841,793 12,167,466,733 4,571,275,705 Non-controlling interest 23.7.4 312,500 312,500 37,231,540 Total equity 27,775,154,293 12,167,779,233 4,608,507,245 Total liabilities and equity 56,712,083,334 31,159,486,407 12,720,158,638

Please refer to our 2020 SEC 17A Report for the Notes to the Financial Statements (https://corporate.convergeict.com/wp-content/uploads/2020/10/CNVRG_FY20_17A_vF.pdf) 72 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 73 ANNUAL REPORT 2020 #EXPERIENCEBETTER

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For each of the three years in the period ended December 31, 2020 (All amounts in Philippine Peso)

Reserve for remeasurements Share capital (Note 11) of retirement benefit obligation, Other Convertible Additional Retained earnings (Note 11) net of tax equity Non-controlling Common shares preferred shares paid-in capital Appropriated Unappropriated (Note 10) reserves interest Total Balances at January 1, 2018 1,250,000,000 - - - 1,971,086,579 1,609,941 - 3,725,024 3,226,421,544 Transactions with owners Acquisition of a subsidiary (Notes 1.7, 11) ------83,000,000 - 83,000,000 Non-controlling interest on acquisition of subsidiaries (Note 1.7) ------49,000,000 49,000,000 Total transactions with owners for the year ------83,000,000 49,000,000 132,000,000 Comprehensive income Profit for the year - - - - 1,257,116,045 - - (15,493,484) 1,241,622,561 Other comprehensive income for the year - - - - - 8,463,140 - - 8,463,140 Total comprehensive income for the year - - - - 1,257,116,045 8,463,140 - (15,493,484) 1,250,085,701 Appropriation of retained earnings (Note 11) - - - 2,200,000,000 (2,200,000,000) - - - - Balances at December 31, 2018 1,250,000,000 - - 2,200,000,000 1,028,202,624 10,073,081 83,000,000 37,231,540 4,608,507,245 Transactions with owners Direct investment in a subsidiary (Note 1.7) ------(83,000,000) - (83,000,000) Disposal of subsidiaries (Note 1.8) - - - - (213,795,663) - - 18,367,305 (195,428,358) Issuance of shares (Note 11) - 306,818,180 6,541,191,820 - - - - - 6,848,010,000 Declaration of dividends (Note 11) - - - - (960,210,453) - - - (960,210,453) Total transactions with owners for the year - 306,818,180 6,541,191,820 - (1,174,006,116) - (83,000,000) 18,367,305 5,609,371,189 Comprehensive income Profit for the year - - - - 1,960,019,346 - - (55,286,345) 1,904,733,001 Other comprehensive income for the year - - - - - 45,167,798 - - 45,167,798 Total comprehensive income for the year - - - - 1,960,019,346 45,167,798 - (55,286,345) 1,949,900,799 Balances at December 31, 2019 1,250,000,000 306,818,180 6,541,191,820 2,200,000,000 1,814,215,854 55,240,879 - 312,500 12,167,779,233 Balances at January 1, 2020 1,250,000,000 306,818,180 6,541,191,820 2,200,000,000 1,814,215,854 55,240,879 - 312,500 12,167,779,233 Transactions with owners Issuance of shares (Note 11) 120,209,985 204,545,450 12,204,896,425 - - - - - 12,529,651,860 Conversion of preferred shares (Note 11) 511,363,630 (511,363,630) ------Declaration of dividends by Pentagon (Note 11) - - - - (262,994,740) - - - (262,994,740) Total transactions with owners for the year 631,573,615 (306,818,180) 12,204,896,425 - (262,994,740) - - - 12,266,657,120 Comprehensive income Profit for the year - - - - 3,387,828,500 - - - 3,387,828,500 Other comprehensive loss for the year - - - - - (47,110,560) - - (47,110,560) Total comprehensive income for the year - - - - 3,387,828,500 (47,110,560) - - 3,340,717,940 Release of appropriation of retained earnings (Note 11) - - - (2,200,000,000) 2,200,000,000 - - - - Balances at December 31, 2020 1,881,573,615 - 18,746,088,245 - 7,139,049,614 8,130,319 - 312,500 27,775,154,293

Please refer to our 2020 SEC 17A Report for the Notes to the Financial Statements (https://corporate.convergeict.com/wp-content/uploads/2020/10/CNVRG_FY20_17A_vF.pdf) 74 CONVERGE ICT SOLUTIONS INC. EXPLORE A WORLD OF POSSIBILITIES: 75 ANNUAL REPORT 2020 #EXPERIENCEBETTER

CONSOLIDATED STATEMENTS OF CASH FLOWS For each of the three years in the period ended December 31, 2020 (All amounts in Philippine Peso)

Notes 2020 2019 2018 Notes 2020 2019 2018 Cash flows from operating activities Cash flows from investing activities Profit before income tax 4,878,709,930 2,497,255,062 1,669,097,899 Acquisitions of property plant, and equipment 6 (13,597,488,927) (6,770,861,062) (3,918,133,275) Adjustments for: Acquisitions of intangible assets 7 (672,925,662) (510,833,563) (170,797,621) Depreciation and amortization 13,14 2,459,439,570 1,666,356,774 976,357,520 Acquisitions of right-of-use assets 18 (126,991,800) – – Amortization of deferred contract costs 12 826,710,561 355,363,899 129,127,968 Acquisition of investment in financial asset at FVTPL 22.1 (104,510,000) – – Provision for impairment of trade and other receivables 3 720,474,218 529,944,733 124,913,466 Acquisition of investment in short-term government Finance costs 9,18 550,310,967 275,051,087 70,555,628 securities 5 (5,500,000) – – Provision for contingencies 14 110,925,384 – – Acquisition of investment in a subsidiary 1.7 – (83,000,000) – Loss on disposal of property, plant and equipment 15 50,887,121 – – Net cash outflow from disposal of subsidiaries 1.8 – (16,375,116) – Unrealized loss on FVTPL 22.1 26,489,855 – – Net cash used in investing activities (14,507,416,389) (7,381,069,741) (4,088,930,896) Retirement benefit expense 13,14 23,292,511 23,532,149 20,895,159 Cash flows from financing activities Provision for inventory obsolescence 13 2,049,102 27,716,510 – Proceeds from issuance of common shares 11 8,078,111,008 – – Unrealized foreign exchange gain, net 20 (231,668,353) (1,289,198) (3,766,967) Proceeds from issuance of convertible preferred shares 11 4,567,949,670 7,056,450,000 – Interest income on cash and cash equivalents 15 (35,912,375) (4,352,743) (918,101) Payment of share issuance costs 11 (116,408,818) (208,440,000) – Interest income on finance lease receivable 15 (10,414,835) – – Proceeds from loans payable 9 5,462,196,429 6,788,971,272 2,706,821,623 Interest income on financial asset at FVTPL 15 (2,034,258) – – Payments of loans payable 9 (2,098,250,000) (1,563,769,559) (608,523,335) Loss on disposal of financial asset at FVTPL 15 – 18,749,900 – Payment of dividends 11 (1,088,307,791) (134,897,402) – Loss on direct write-off of receivables 14 – – 29,494,445 Interest paid on loans payable 9 (568,800,065) (272,564,640) (61,834,194) Loss on direct write-off of network materials and Payments on lease liabilities 18 (249,480,556) (155,924,039) – supplies 15 – – 4,889,322 Interest paid on lease liabilities 18 (115,173,554) (35,810,288) – Gain on sale of property, plant and equipment 15 – – (511,444) Proceeds from issuance of subsidiaries’ interest to NCI 1.7 – – 49,000,000 Gain on reversal of provision for contingencies 15 – – (8,250,269) Proceeds from capital infusion 1.7 – – 83,000,000 Operating income before changes in assets and liabilities 9,369,259,398 5,388,328,173 3,011,884,626 Payments on finance leases 18 – – (49,763,689) (Increase) decrease in assets: Interest paid on finance leases 18 – – (5,112,896) Trade and other receivables (787,626,828) (2,335,748,385) (601,068,074) Net cash from financing activities 13,871,836,323 11,474,015,344 2,113,587,509 Due from related parties (806,523,552) (105,984,062) (434,003,113) Net increase in cash and cash equivalents 6,662,958,439 5,777,760,255 56,259,887 Network materials and supplies (2,720,770,791) (1,386,425,328) (1,516,178,300) Cash and cash equivalents, beginning 6,233,043,005 476,652,551 420,518,826 Deferred contract costs (1,760,860,845) (817,050,839) (288,055,253) Effects of exchange rate changes in cash and Other current assets and non-current assets (1,197,065,277) (357,537,352) (108,171,801) cash equivalents 61,407,244 (21,369,801) (126,162) Deferred input valued-added tax (63,426,701) 29,396,914 (97,907,369) Cash and cash equivalents, ending 2 12,957,408,688 6,233,043,005 476,652,551 Increase (decrease) in liabilities: Please refer to our 2020 SEC 17A Report for the Notes to the Financial Statements Trade and other current liabilities 5,833,616,677 1,854,992,995 1,865,042,270 (https://corporate.convergeict.com/wp-content/uploads/2020/10/CNVRG_FY20_17A_vF.pdf) Subscribers deposits 641,133,903 397,226,398 58,458,551 Due to related parties 51,159,579 (255,826,395) 393,007,779 Deferred revenue 387,291,020 129,140,189 106,070,345 Provision for contingencies – – (32,017,834) Cash from operations 8,946,186,583 2,540,512,308 2,357,061,827 Interest received 35,912,375 4,352,743 918,101 Income taxes paid (1,683,560,453) (859,780,599) (325,876,654) Retirement benefits paid 10 – (269,800) (500,000) Net cash from operating activities 7,298,538,505 1,684,814,652 2,031,603,274 (Forward) 76 CONVERGE ICT SOLUTIONS INC. ANNUAL REPORT 2020

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TRANSFER AGENT Philippine National Bank PNB Financial Center, Diosdado Macapagal Blvd.,Pasay City