Compliance with Best Practices on Corporate Governance

For the year 2018, FDC fully complied with the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC) regulatory requirements. It is also in compliance with its Revised Manual for Corporate Governance. In particular, FDC wishes to highlight the following:

a) the election of two (2) independent directors to the Board;
b) the appointment of the members of the Audit and Risk Management Oversight, Nomination, Compensation, Related-Party Transaction and Corporate Governance committees;
c) the conduct of regular quarterly board meetings and special meetings, the faithful attendance of the directors at these meetings, and their proper discharge of duties and responsibilities as such directors;
d) the timely and accurate submission to the SEC and the PSE of reports and disclosures required under the Securities Regulation Code;
e) FDC’s adherence to national and local laws pertaining to its operations;
f) the observance of applicable accounting standards by FDC;
g) the adoption of the ASEAN Corporate Governance Report (ACGR) in Corporate Governance Reporting; and
e) the enhancement of FDC’s website to provide our shareholders and stakeholders with quicker reference to our corporate governance policies.

On July 31, 2014, the Company filed a Revised Manual on Corporate Governance in compliance with the directive of the SEC, and to reflect current best practices.

Pursuant to SEC Memorandum Circular No. 19, Series of 2016, the Company submitted to the SEC its Revised Manual on Corporate Governance on 31 May 2017.

In order to keep abreast of best practices in corporate governance, the members of the Board and key officers participated in the joint Annual Corporate Governance Training Program conducted by the Institute of Corporate Directors on 27 November 2018.

FDC, through its Board of Directors and in coordination with the Management, reviews its Corporate Governance practices annually and welcomes proposals, especially from institutions and entities such as the SEC, PSE and the Institute of Corporate Directors.

Board of Directors

Leading the practice of good corporate governance is the Board of Directors. FDC’s Board of Directors is firmly committed to the adoption of and compliance with the best practices in Corporate Governance as well as the observance of all relevant laws, regulations and ethical business practices.

Nominations and Voting for the Board of Directors

The members of the Board are elected during the annual stockholders’ meeting. The stockholders of FDC may nominate individuals to be members of the Board of Directors.

The Nomination Committee receives nominations for independent directors as may be submitted by the stockholders. After the deadline for the submission thereof, the Nomination Committee meets to consider the qualifications as well as grounds for disqualification, if any, of the nominees based on the criteria set forth in FDC’s Revised Manual on Corporate Governance and the Securities Regulation Code. All nominations shall be signed by the nominating stockholders together with the acceptance and conformity by the would be nominees. The Nomination Committee shall then prepare a final list of candidates enumerating the nominees who passed the screening. The name of the person or group of persons who recommends nominees as independent directors shall be disclosed along with his or their relationship with such nominees.

Only nominees whose names appear on the final list of candidates shall be eligible for election as independent directors. No other nomination shall be entertained after the final list of candidates shall have been prepared. No further nomination shall be entertained or allowed on the floor during the annual meeting.

The conduct of the election of independent directors shall be in accordance with FDC’s Manual on Corporate Governance. In 2008, FDC filed with the SEC its application for the amendment of the by-laws to include the procedure that will govern the nomination and election of independent directors. This procedure is consistent with FDC’s Revised Manual on Corporate Governance and Rule 38 of the Securities Regulation Code. The approval by the SEC on said application was issued on April 8, 2009. The power of the Board to amend the By-Laws has been delegated by the stockholders representing two-thirds (2/3) of FDC’s outstanding capital stock in an annual meeting of said stockholders on May 27, 1994.

It shall be the responsibility of the Chairman of the annual meeting to inform all stockholders in attendance of the mandatory requirement of electing independent directors. He shall ensure that independent directors are elected during the annual meeting. Specific slots for independent directors shall not be filled up by unqualified nominees. In case of failure of election for independent directors, the Chairman of the meeting shall call a separate election during the same meeting to fill up the vacancy.

A stockholder may vote such number of shares for as many persons as there are directors to be elected. He may cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares, or he may distribute them on the same principle among as many candidates as he shall see fit. Provided, that the total number of votes cast by him shall not exceed the number of shares owned by him as shown in the books of FDC multiplied by the whole number of directors to be elected.

The directors of FDC are elected at the annual stockholders’ meeting, to hold office until their respective successors have been duly appointed or elected and qualified. Vacancies in the Board occurring midterm are filled as provided in the Corporation Code and FDC’s Revised Manual on Corporate Governance. Committee members are appointed or elected by the Board of Directors typically at its first meeting following the annual stockholders’ meeting, each to hold office until his successor shall have been duly elected or appointed and qualified.

Independent Directors

Before the annual meeting, a stockholder of FDC may nominate individuals to be independent directors, taking into account the following guidelines:

1. “Independent director” means a person who, apart from his fees and shareholdings, is independent of management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgement in carrying out his responsibilities as director in any corporation that meets the requirements of Section 17.2 of the Securities Regulation Code and includes, among others, any person who:

   1. Is not a director or officer or substantial stockholder of FDC or of its related companies or any of its substantial shareholders (other than as an independent director of any of the foregoing);
   2. Is not a relative of any director, officer or substantial stockholder of FDC, any of its related companies or any of its substantial shareholders. For this purpose, “relative” includes spouse, parent, child, brother, sister, and the spouse of such child, brother or sister;
   3. Is not acting as a nominee or representative of a substantial shareholder of FDC, any of its related companies or any of its substantial shareholders;
   4. Has not been employed in an executive capacity by FDC, any of its related companies or any of its substantial shareholders within the last two (2) years;
   5. Is not related as a professional adviser of FDC, any of its related companies or any of its substantial shareholders within the last two (2) years, either personally or through his firm;
   6. Has not engaged and does not engage in any transaction with FDC or any of its related companies or any of its substantial shareholders, whether by himself or with other persons or through a firm of which he is a partner or a company of which he is a director or substantial shareholder, other than transactions which are conducted at arms-length and are immaterial or insignificant.

2. When used in relation to FDC subject to the requirements above:

   1. “Related company” means another company which is: (a) its holding company, (b) its subsidiary, or (c) a subsidiary of its holding company; and
   2. “Substantial shareholder” means any person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of its equity security.

3. An independent director of FDC shall have the following qualifications:

   1. He shall have at least one (1) share of stock of FDC;
   2. He shall be at least a college graduate or he shall have been engaged in or exposed to the business of FDC for at least five (5) years;
   3. He shall possess integrity/probity; and
   4. He shall be assiduous.

4. No person enumerated under Section II (5) of the Revised Manual of Corporate Governance shall qualify as an independent director. He shall likewise be disqualified during his tenure under the following instances or causes:

   1. He becomes an officer or employee of FDC, or becomes any of the persons enumerated under items (A) hereof:
   2. His beneficial security ownership exceeds 10% of the outstanding capital stock of FDC;
   3. He fails, without any justifiable cause, to attend at least 50% of the total number of board meetings during his incumbency unless such absences are due to grave illness or death of an immediate family member;
   4. If he becomes disqualified under any of the grounds stated in FDC’s Revised Manual on Corporate Governance.

5. Pursuant to SEC Memorandum Circular No. 09, Series of 2011, which took effect on January 2, 2012, the following additional guidelines shall be observed in the qualification of individuals to serve as independent directors:

   1. There shall be no limit in the number of covered companies that a person may be elected as independent director, except in business conglomerates where an independent director can be elected to only five (5) companies of its conglomerate, i.e., parent company, subsidiary or affiliate;
   2. Independent directors can serve for five (5) consecutive years, provided that service for a period of at least six (6) months shall be equivalent to one (1) year, regardless of the manner by which the independent director position was relinquished or terminated;
   3. After completion of the five-year service period, an independent director shall be ineligible for election as such in the same company unless the independent director has undergone a “cooling off” period of two (2) years, provided, that during such period, the independent director concerned has not engaged in any activity that under existing rules disqualifies a person from being elected as independent director in the same company;
   4. An independent director re-elected as such in the same company after the “cooling off” period can serve for another five (5) consecutive years under the conditions mentioned in paragraph (ii) above;
   5. After serving as independent director for ten (10) years, the independent director shall be perpetually barred from being elected as such in the same company, without prejudice to being elected as an independent director in other companies outside the business conglomerate;
   6. All previous terms served by existing independent directors shall not be included in the application of the term limits.

6. Pursuant to SEC Memorandum Circular No. 04, Series of 2017, which took effect on March 2017, the following additional guidelines amending the rules on the term limit of independent directors, shall be observed in the qualification of individuals to serve as independent directors:

   1. The independent director shall serve for a maximum cumulative term of nine (9) years;
   2. After which, the independent director shall be perpetually barred from re-election as such in the same company, but may continue to qualify as non-independent director;
   3. In the instance that a company wants to retain an independent director who has served for nine (9) years, the Board should provide meritorious justification/s and seek shareholders’ approval during the annual shareholders’ meeting; and
   4. The reckoning of the cumulative nine-year term is from 2012.

Members of the Board of Directors, Attendance and Committee Memberships
The following table lists down the members of the Board of Directors and their attendance in Board Meetings in 2018.

The following table lists down the attendance of the Board of Directors during the May 4, 2018 Annual Stockholders’ Meeting and their memberships in the different committees

Duties and Responsibilities of the Different Board Committees

Executive Committee

(*) The Committee members are elected annually.
ED - Executive Director
NED - Non-Executive Director

The functions, duties and responsibilities of the Board of Directors may be delegated, to the fullest extent permitted by law, to an Executive Committee to be established by the Board of Directors. The Executive Committee shall consist of five (5) members, and at least three (3) of whom shall be members of the Board of Directors. All members of the Executive Committee shall be appointed by and under the control of the Board of Directors.

The Executive Committee may act on such specific matters within the competence of the Board of Directors as may be delegated to it by a majority vote of the Board of Directors, except with respect to:

(i) approval of any action for which shareholders’ approval is also required;
(ii) the filing of vacancies in the Board of Directors;
(iii) the amendment or repeal of these By-Laws or the adoption of new by-laws;
(iv) the amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable; and
(v) the distribution of cash dividends to shareholders.

The act of the Executive Committee on any matter within its competence shall be valid if (i) it is approved by the majority vote of all its members in attendance at a meeting duly called where a quorum is present and acting throughout, or (ii) it bears the written approval or conformity of all its incumbent members without necessity for a formal meeting.

The Executive Committee shall hold its regular meeting at least once a month or as often as it may determine, in the principal office of the Corporation or at such other place as may be designated in the notice. Any member of the Executive Committee may, likewise, call a meeting of the Executive Committee at any time. Notice of any meeting of the Executive Committee shall be given at least seven (7) business days prior to the meeting or such shorter notice period as may be mutually agreed. The notice shall be accompanied by (i) a proposed agenda or statement of purpose and (ii) where possible, copies of all documents, agreements and information to be considered at such meeting.

Audit and Risk Management Committee

(*) The Committee members are elected annually.

The Board shall constitute an Audit and Risk Management Oversight Committee to be composed of at least three (3) Director-members, with accounting and financial background, one of which shall be an independent director and another should have related audit experience.

The Chairman of this committee should be an independent director. He should be responsible for inculcating in the minds of the Board members the importance of management responsibilities in maintaining a sound system of internal control and the Board’s oversight responsibility.

Duties and Responsibilities:

• Provide oversight financial management functions specifically in areas of managing credit, market, liquidity, operational, legal and other risks of the Corporation, and crisis management;
• Provide oversight of the Corporation’s internal and external auditors;
• Review and approve audit scope and frequency, and the annual internal audit plan;
• Discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure coordination where more than one (1) audit firm is involved;
• Set up an internal audit department and consider the appointment of an internal auditor as well as an independent external auditor, the audit fee and any question of resignation or dismissal;
• Monitor and evaluate the adequacy and effectiveness of the Corporation’s internal control system;
• Receive and review reports of internal and external auditors and regulatory agencies, where applicable, and ensure that management is taking appropriate corrective actions, in a timely manner, in addressing control and compliance functions with regulatory agencies;
• Review the quarterly, half-year and annual financial statements before submission to the Board with particular focus on the following matters:

1. Any change/s in accounting policies and practices
2. Major judgmental areas
3. Significant adjustments resulting from the audit
4. Going concern assumptions
5. Compliance with accounting standards
6. Compliance with tax, legal and regulatory requirements

• Coordinate, monitor and facilitate compliance with existing laws, rules and regulations;
• Evaluate and determine non-audit work by external auditor and keep under review the non-audit fees paid to the external auditor both in relation to their significance to the auditor and in relation to the Corporation’s total expenditure on consultancy. The non-audit work should be disclosed in the Annual Report.
• Establish and identify the reporting line of the Chief Audit Executive so that the reporting level allows the internal audit activity to fulfill its responsibilities. The Chief Audit Executive shall report directly to the Audit Committee functionally. The Audit Committee shall ensure that the internal auditors shall have free and full access to the Corporation’s records, properties and personnel relevant to the internal audit activity, and that the internal audit activity should be free from interference in determining the scope of internal auditing examinations, performing work and communicating results, and shall provide a venue for the Audit Committee to review and approve the annual internal audit plan.

   

Compensation Committee

(*) The Committee members are elected annually.

The Board may constitute a Compensation Committee composed of at least three (3) Director-members, one of whom shall be an independent director.

Duties and Responsibilities:

• Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of corporate officers, and provide oversight over remuneration of senior management and other key personnel ensuring that compensation is consistent with the Corporation’s culture, strategy and control environment.
• Designate amount of remuneration, which shall be in a sufficient level, to attract and retain officers and personnel who are needed to run the Corporation successfully.
• Establish a formal and transparent procedure for developing a policy on executive remuneration and for fixing the remuneration packages of individual directors, if any, and officers.
• Develop a form on Full Business Interest Disclosure as part of the pre-employment requirements for all incoming officers, which, among others, compel all officers to declare under the penalty of perjury all their existing business interests or shareholdings that may directly or indirectly conflict in their performance of duties once hired.
• Disallow any director to decide his or her own remuneration.
• Provide in the Corporation’s annual reports, information and proxy statements a clear, concise and understandable disclosure of compensation of its executive officers for the previous fiscal year and ensuing year.
• Review the existing Human Resources Development or Personnel Handbook, to strengthen provisions on conflict of interest, salaries and benefits policies, promotion, and career advancement directives and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts.

Nomination Committee

(*) The Committee members are elected annually.

The Board may constitute a Nomination Committee consisting of at least three (3) Director-members, one of whom shall be an independent director. The Head of the Human Resources Department shall be a nonvoting ex-officio member.

The Nomination Committee may review and evaluate the qualifications of all persons nominated to the Board, as well as those nominated to other positions requiring appointment by the Board, and provide assessment on the Board’s effectiveness in directing the process of renewing and replacing the Board’s members.

The Nomination Committee may consider the following guidelines in the determination of the number of directorships for the Board:

• The nature of the business of the Corporations in which he is a director;
• Age of the director;
• Number of directorships/active memberships and officerships in other corporations or organizations; and
• Possible conflict of interest.

The Chief Executive Officer and other executive directors shall submit themselves to a low indicative limit on membership in other corporate Boards. The same low limit shall apply to independent, non-executive directors who serve as full-time executives in other corporations. In any case, the capacity of directors to serve with diligence shall not be compromised.

The Nomination Committee may pre-screen and shortlist all candidates nominated to become a member of the Board of Directors, taking into account the qualifications and the grounds for disqualifications as set forth in FDC’s Manual of Corporate Governance and the Securities Regulation Code.

The Nomination Committee shall promulgate the guidelines or criteria to govern the conduct of the nomination for members of the Board of Directors. The same shall be properly disclosed in the Company’s information or proxy statement or such other reports required to be submitted to the Securities and Exchange Commission (SEC).

The nomination of independent directors shall be conducted by the Committee before the stockholders’ meeting. All recommendations shall be signed by the nominating stockholders together with the acceptance and conformity by the would-be nominees.

The Nomination Committee shall pre-screen the qualifications and prepare a final list of all candidates and put in place screening policies and parameters to enable it to effectively review the qualifications of the nominees for independent directors as set forth in the Company’s Manual on Corporate Governance.

After the nomination, the Committee shall prepare a Final List of Candidates which shall contain all the information about all the nominees for independent directors, which shall be made available to the SEC and all stockholders through the filing and distribution of the Information Statement, or in such reports the Company is required to submit to the SEC. The name of the person or group of persons who recommended the nomination of the independent director shall be identified in such report including any relationship with the nominee.

Compensation of the Board of Directors and Officers:

Except for per diem of Php50,000 being paid to non-executive directors of FDC for every meeting attended, there are no other arrangements to which directors are compensated, for any services provided as director, including any amounts payable for committee participation or special assignments.

Meanwhile, the aggregate compensation paid or incurred during the last two fiscal years to the non-independent Directors and top officers of FDC are as follows:

Family Relationships

Ms. Mercedes T. Gotianun is the mother of Mr. Andrew T. Gotianun Jr., Mr. Jonathan T. Gotianun, Ms. Lourdes Josephine Gotianun Yap and Mr. Michael Edward T. Gotianun.

External Auditor

The auditing firm Sycip, Gorres Velayo & Co. (SGV) is the current independent auditor of FDC. There have been no disagreements with SGV on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

FDC, in compliance with SRC Rule 68(3)(b)(iv) relative to the five-year rotation requirement of its external auditors, designated Michael C. Sabado and Dhonabee B. Seneres its engagement partner in CY2018 and CY2017, respectively. The representatives of SGV were present at the annual meeting held last May 4, 2018 to respond to appropriate questions at the meeting.

In consideration for the following professional services rendered by SGV as the independent auditor of FDC:

The aggregate fees billed to the Group for professional services rendered by the external auditor for the examination of the annual financial statements amounted to P9.3 million and P9.6 million, net of VAT in 2018 and 2017, respectively.

In 2018 and 2017, additional fees for other services of external auditor amounted to P24.0 million and P2.6 million, respectively.

The fees billed to the Group for tax services which pertained to compliance review amounted to P6.8 million and P2.7 million in 2018 and 2017, respectively.

There are no other fees billed in each of the last two (2) years for products and services provided by the external auditor, other than the services reported under items mentioned above.

1. Audit and Audit-Related Fees

1. The audit of FDC’s annual financial statements and such services normally provided by an external auditor in connection with statutory and regulatory filings or engagements for those fiscal years;
2. Other assurance and related services by SGV that are reasonably related to the performance of the audit or review of FDC’s financial statements.

The aggregate fees billed to the Group for professional services rendered by the external auditor for the examination of the annual financial statements amounted to P9.3 million and P9.6 million, net of VAT in 2018 and 2017, respectively. In 2018 and 2017, additional fees for other services of external auditor amounted to P24.0 million and P2.6 million, respectively.

2. Tax Fees

   The fees billed to the Group for tax services which pertained to compliance review amounted to P6.8 million and P2.7 million in 2018 and 2017, respectively.

3. All Other Fees
4. Approval Policies and Procedures for Independent Accountant’s Services of Management/ Audit and Risk Management Oversight Committee
5. In giving its stamp of approval to the audit services rendered by the independent accountant and the rate of the professional fees to be paid, the Audit and Risk Management Oversight Committee, with inputs from the management of FDC, makes a prior independent assessment of the quality of audit services previously rendered by the accountant, the complexity of the transactions subject of the audit, and the consistency of the work output with generally accepted accounting standards.
    

Shareholder's Right

The Corporation recognizes that the most cogent proof of good corporate governance is that which is visible to the eyes of its investors. Therefore the following provisions are issued for the guidance of all internal and external parties concerned, as governance covenant between the Corporation and all its investors:

The Board shall be committed to respect the following rights of the stockholders:

1. Voting Right

1. Shareholders shall have the right to elect, remove and replace directors and vote on certain corporate acts in accordance with the Corporation Code.
2. Cumulative voting is mandatory in the election of directors.
3. A director shall not be removed without cause if it will deny minority shareholders representation in the Board.

2. Power of Inspection

All shareholders shall be allowed to inspect corporate books and records including minutes of Board meetings and stock registries in accordance with the Corporation Code, during business hours and upon prior written notice to the Corporation and for good reason.
All Shareholders shall be furnished with annual reports, including financial statements, without cost or restrictions.

3. Right to Information

1. The Shareholders shall be provided, upon request, with periodic reports which disclose personal and professional information about the directors and officers and certain other matters such as their holdings of the Corporation’s shares, dealings with the Corporation, relationships among directors and key officers, and the aggregate compensation of directors and officers.
2. The minority shareholders shall be granted the right to propose the holding of a meeting, and the right to propose items in the agenda of the meeting, provided the items are for legitimate business purposes.
3. The minority shareholders shall have access to any and all information relating to matters for which the management is accountable for and to those relating to matters for which the management shall include such information and, if not included, then the minority shareholders shall be allowed to propose to include such matters in the agenda of stockholders’ meeting, being within the definition of “legitimate purposes”.

4. Right to Dividends

1. Shareholders shall have the right to receive dividends subject to the discretion of the Board.
2. The SEC may direct the Corporation to declare dividends when its retained earnings shall be in excess of 100% of its paid-in capital stock, except: i) when justified by definite corporate expansion projects or programs approved by the Board; or ii) when the Corporation is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or iii) when it can be clearly shown that such retention is necessary under special circumstances, such as when there is a need for special reserve for probable contingencies.

5. Appraisal Right

   The Shareholders shall have appraisal right or the right to dissent and demand payment of the fair value of their shares in the manner provided for under the Corporation Code of the Philippines, under any of the following circumstances:

   • In case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence.
   • In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets as provided in the Corporation Code; and
   • In case of merger or consolidation.

6. The Board should be transparent and fair in the conduct of the annual and special shareholders’ meetings of the corporation.

   The shareholders should be encouraged to personally attend such meetings. If they cannot attend, they should be apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the By- Laws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy should be resolved in the shareholder’s favor.

7. It shall be the duty of the directors to promote shareholder rights, remove impediments to the exercise of shareholders’ rights and allow possibilities to seek redress for violation of their rights. They shall encourage the exercise of shareholders’ voting rights and the solution of collective action problems through appropriate mechanisms. They shall be instrumental in removing excessive costs and other administrative or practical impediments to shareholders participating in meetings and/or voting in person. The directors shall pave the way for the electronic filing and distribution of shareholder information necessary to make informed decisions subject to legal constraints.
    

Dividend Policy and Dividends Paid

While the Board endeavors to declare dividends each year, the payment of cash dividends depends upon the Company’s earnings, cash flow, financial condition, capital investment requirements and other factors (including certain restrictions on dividends imposed by the terms of loan agreements).

On July 16, 2014, FDC paid cash dividends of Php0.0549 per share or a total of Php511.53 million to all shareholders on record as of June 26, 2014. This is equivalent to 12.0% of the Php4.280 billion in net income attributable to parent generated in 2013.

On July 2, 2015, FDC paid cash dividends of Php0.0500 per share or a total of Php465.9 million to all shareholders on record as of June 10, 2015. This is equivalent to 12.4% of the Php3.744 billion in net income attributable to parent generated in 2014.

On June 21, 2016, FDC paid cash dividends of Php0.0516 per share or a total of P480.78 million to all shareholders on record as of May 27, 2016. This is equivalent to 11.0% of the P4.37 billion net income attributable to parent generated in 2015.

On June 21, 2017, FDC paid cash dividends of Php0.059 per share or a total of Php550.27 million to all stockholders on record as of May 28, 2017. This is equivalent to 10.0% of the Php5.50 billion net income attributable to parent generated in 2016.

On June 28, 2018, FDC paid cash dividends of Php0.0765 per share or a total of Php661.6 million to all stockholders on record as of June 3, 2018. This is equivalent to 10.0% of the Php6.6 billion net income attributable to parent generated in 2017.

Annual Stockholders’ Meeting and Procedures

Notice of Annual Stockholders’ Meeting

Stockholders on record as of March 9, 2018 were entitled to attend and vote at the May 4, 2018 Annual Stockholders’ Meeting.

Stockholders were informed that the Annual Stockholders’ Meeting for 2018 would be held at 9:00 am at Ballrooms 1 & 2, Crimson Hotel Filinvest City, Manila, Entrata Urban Complex, 2609 Civic Drive, Filinvest City, Alabang, Muntinlupa City.

On February 28, 2018, FDC disclosed to the Philippine Stock Exchange that its Board of Directors had fixed the date of the Annual Stockholders’ Meeting on May 4, 2018 with the record date set on March 9, 2018.

Procedures During the Annual Stockholders’ Meeting

The following was the agenda of the Annual Stockholders’ Meeting last May 4, 2018:

1. Call to Order
2. Proof of Notice of Meeting
3. Certification of Quorum
4. Approval of the Minutes of the Annual Stockholders’ Meeting held on 28 April 2017
5. Presentation of the President’s Report
6. Approval of the Audited Financial Statements for the year ended 31 December 2017
7. Ratification of the Acts and Resolutions of the Board of Directors and Management for the year 2017
8. Election of the Members of the Board of Directors, including two (2) Independent Directors for 2018-2019
9. Appointment of the External Auditor Other Matters
10. Adjournment

Only stockholders of record as of March 9, 2018 were entitled to attend and vote in the said meeting.

On the same day, right after the stockholders’ meeting, FDC disclosed to the Philippine Stock Exchange the results of the annual stockholders’ meeting which included the following:

1. Approval of the Minutes of the Annual Stockholders’ Meeting held on April 28, 2017;
2. Ratification of the Audited Financial Statements for the year ended December 31, 2017;
3. Declaration of cash dividends in the amount of P0.0765 per share to all stockholders of record as of June 3, 2018, with payment date on June 28, 2018;
4. Ratification of all the acts, resolutions and proceedings of the Board of Directors, Board Committees and Management from the date of the last annual stockholders’ meeting up to May 4, 2018; and
5. Approval to delegate to the Board of Directors the authority to select, designate and appoint the independent external auditor of FDC for the year 2018.

Likewise, the following were elected as directors of FDC to serve for the period 2018-2019 and until their successors shall have been duly elected and qualified:

1. Mercedes T. Gotianun
2. Andrew T. Gotianun, Jr.
3. Jonathan T. Gotianun
4. L. Josephine Gotianun-Yap
5. Michael Edward T. Gotianun
6. Val Antonio B. Suarez (as Independent Director)
7. Virginia T. Obcena (as Independent Director)

FDC also made another disclosure to the Philippine Stock Exchange regarding the declaration of the Board of Directors of a cash dividend for all stockholders on record as of June 3, 2018 in the amount of Php0.0765 per share. The payment date was set on June 28, 2018.

Statutory Compliance

FDC fully complied with the Philippine Stock Exchange (PSE) and Securities and Exchange Commission (SEC) regulatory requirements. Below is the Company’s Reportorial Compliance Report:

Investor Relations

FDC’s website, www.filinvestgroup.com, makes available to the public, current information on the Company, including details of its operations.

The Investor Relations section of the website provides information on financial statements, press releases on financial and operating highlights, declaration of dividends, ownership structure and any changes in the ownership of major shareholders and officers, notice of analysts’ briefings, if any, and other reportorial requirements by the Philippine Stock Exchange.

The contact details of the Investor Relations Department are available in the website.