Company History

Best known for its internationally distributed beer, San Miguel Corporation can
only be described in superlatives. It is Southeast Asias oldest and largest brewer. It also
ranks as the Philippines largest and one of its most consistently profitable companies.
San Miguels flagship beer utterly dominates the Filipino market, with a 90 percent
market share. A 1988 brief in the Economist noted that Filipino order beer at bars and
restaurants, knowing that they will receive a San Miguel. But San Miguel did not make
it to the top of the regional heap on good beer alone. It also makes agricultural feeds,
processed and fresh meats, dairy products, coconut products, hard liquor, nonalcoholic
beverages, and packaging products such as glass containers, corrugated cartons,
aluminum cans, and metal crowns and caps. Through wholly or majority-owned
subsidiaries, san Miguel holds dominating market shares in several food and beverages
sectors in the Philippines. 90 percent of carbonated beverages, 58 percent of powdered
juice, 56 percent of hard liquor, and more than 80 percent of margarine and butter. By
the early 2000s, beer and other alcoholic beverages constituted only about one-third of
san Miguels annual turnover. In fact, the conglomerate had, by 2001, grown over the
course of its more than 110 years in business to generate 3.6 percent of its home
countrys gross domestic product and 4.5 percent of government tax revenue.
San Miguel grew to its commanding position in the Southeast Asian market in
spite of political upheaval, infrastructure glitches, and high taxes. It achieved its status
through aggressive competitive strategies and shrewd long-range planning over the
decades. Having diversifies into agribusiness, foods, and packaging in the mis-20 th
century, the conglomerate dominated its domestic markets by the early 1980s. At that
time, San Miguel undertook an aggressive program of international expansion that
came to fruition in the mid-to-late 1990s.

Early History
Don Enrique Ma Barretto de Ycaza established the brewery, Southeast Asias
first, in 1890 as La Fabrica de Cerveza de san Miguel. He named the company after the
section of Manila in which he lived and worked. He was soon joined by Don Pedro
Pablo Roxas, who brought with him a German brewmaster. San Miguels brew won its
first major at 1895s Philippines Regional Exposition, and led its imported competitors
by a five-to-one margin by the turn of the 20 th century. The company was incorporated in
1913 following the death of Don Pedro Roxas.
By that time, San Miguel was exporting its namesake brew to Hongkong,
Shanghai and Guam. Andrs Soriano y Roxas joined San Miguel in 1918, beginning a
multigeneration(albeit interrupted) reign of Sorianos. In 1990, San Miguels Beer bulletin
noted that Beer was the heart of San Miguels business, and the soul from which
emanated all its other businesses. Andrs Soriano initiated the companys
diversification, which processed rather logically via vertical integration. The experience
cultivating barley naturally evolved into other agricultural businesses, for example. San
Miguel gathered steam in the 1920s, when the company expanded into nonalcoholic
beverages with the creation of the Royal Soft Drinks Plant in 1922. San Miguel entered
the frozen foods market in 1925 with the creation og Magnolia Ice Cream Plant. By the
early 1990s, Magnolia held four-fifths of the frozen dessert market. Soriano created the
first non-US National Coca-Cola bottling and distribution franchise in 1927. The
Philippine company owned 70 percent of the joint venture, which grew to become
Cokes sixth largest operation. By the early 1990s, San Miguel had captured over two-
thirds of the domestic soft drink market.
Although World War II interrupted San Miguels brewing business, the company
got back on the growth track in the postwar era, acquiring production facilities in Hong
Kong in 1948. The company also resumed its program of vertical integration, even
building its own power plant so that it would not be dependent on the Philippines
notoriously poor infrastructure. San Miguel also built a liquid carbon dioxide plant, glass
bottle manufacturing facilities, and a cartoon plant during the post war period.
The company shortened its name to San Miguel Corporation in 1963, and Andrs
Soriano Jr., advanced to the companys presidency upon his fathers 1964 death. He
has been credited with instituting modern management theory, including
decentralization along product lines. Soriano Jr., continued to diversify the food
business during the early 1980s, expanding into poultry production in 1982, building an
ice cream plant in 1983, and adding shrimp processing and freezing in 1984.
Over the decades, San Miguel earned a formidable reputation as a fierce
competitor. The company used all the tools at its disposal. When it could not beat a rival
through traditional means, it acquired and intimidated upstarts into submission. The
Filipino governments complicity did not hurt, either. Long protected by high tariffs, San
Miguel encountered its first major competitor in beer market in the late 1970s. That was
when Asia Brewery entered the segment. The rivalry between Asia Brewery and San
Miguel came to a head in 1988, when Asia Brewery cannily introduced a bargain-priced
brand called, simply, Beer. The imported product looked and tasted like its primary
competitor, playing upon the fact that in the Philippines, the San Miguel brand was
synonymous with beer. It was a creative counter to San Miguels notoriously
aggressive and sometimes cutthroat competitive strategy, which had reportedly included
attempts to sabotage[Asia Brewerys] sales network and smash its empty bottles. Asia
Brewery, whose owner was reputedly connected to Marcos sympathizers, even hired
away San Miguels brewmaster.
Although San Miguel enjoyed virtual monopolies in its markets, that status did not
shield it from the political machinations of the Philippines. The dictatorial reign of
Ferdinand Marcos brought this element into sharp focus in the 1980s, when an intra-
familial proxy fight at San Miguel turned political. The dispute was instigated in 1983 by
Enrique Zobel, a wealthy cousin of the Sorianos who owned the Ayala banking and real
estate group and sided with the Marcos government. Unable to execute a takeover on
his own, Zobel sold his 19.5 percent stake to Eduardo Cojuangco Jr.(known in some
circles as the coconut king). Although Cojuangco was a cousin of Marcos opponent
Corazon Aquino, he too sided with Marcos. Cojuangcos Coconut Industry Investment
Fund(a.k.a., United Coconut Planters Bank)accumulated an additional 32 percent of
San Miguel, giving him effective control of the conglomerate and leaving the Soriano
family with a mere 3 percent. Cojuangco scooped up the chairmanship in 1984, when
Andrs Soriano Jr., died of cancer. However, his reign over San Miguel lasted only two
years. When Marcos lost the 1986 election to Aquino amidst the people power
revolution, Cojuangco and many other Marcos backers fled the country. (In fact, Marcos
and Cojuangco left in the same helicopter.)
 Andrs Soriano III resumed San Miguels chairmanship and launched a
campaign to reclaim the family legacy that year. But when the new chairman tried to but
back the abandoned shares, he was blocked by unexpected agency; the Aquino
administrations Presidential Commission on Good Government(PCGG) assumed
control (but not legal ownership) of the 51.4 percent stake and refused to relinquish.
The government asserted that that stake had been illegally obtained. In the 1970s
Marcos had imposed a tax on the production of coconuts, a major Philippine cash crop,
with the proceeds supposed to fund that industrys development. It was alleged,
however, that the money was funneled into the Cojuangco-controlled United Coconut
Planters Bank, and that Cojuangco then used much of the funds to help him purchase
his controlling stake in San Miguel. The controlling interest carried nine of San Miguels
15 directors seats with it. The PCGG continued to tend its San Miguel stake into the
early 1990s, but it acceded de facto control of the conglomerate to Andrs Soriano III
via a management contract with his A. Soriano Corp.
Soriano III was characterized by Business Weeks Maria Shao as an introverted,
almost reclusive leader. Schooled at the University of Pennsylvannias prestigious
Wharton School, Soriano III had dabbled in investment banking in New York City before
returning to the Philippines. Soriano tried everything from legal machinations to joint-
venture buyout schemes to wrest control of San Miguel from the PCGG, but to no avail.
At the same time, Soriano III continued the companys program of expansion,
acquiring majority control of La Tondea Distillers, Inc., the leading producer of hard
liquor in the Philippines, in 1987and adding beef and pork production to the companys
food operations in 1988.
In 1990 San Miguel threw a five-month party to celebrate its centenary. President
Corazon Aquino called San Miguel the best showcase of a Filipino company, a shining
example of creative management and commitment to its public. The Economist
contrastingly called San Miguel a showcase for much that it is wrong with business in
the Philippines. The latter assertion was substantiated that same year, when
Cojuangco returned to the Philippines (the Journal of Commerce noted that he
sneaked back into the country[in 1990] despite a ban on his return) to lay claim to his
holdings. Notwithstanding the circumstances of his repatriation, a November 1992
article in Asian Business noted that Cojuangco [was] expected to win evenetually. All
the same, Soriano III continued to hold the chairmanship. (Cojuangco, meantime,
unsuccessfully ran for the Philippine presidency in 1992).

International Expansion: 1980s-90s

Soriano III led the company to a new era of dramatic growth based on
internationalization. This move was motivated by a number of factors. First, San Miguel
had developed its core Philippine and Hong Kong market to maturity and was faced with
relatively slow growth there. Soriano hoped to expand into other countries and thereby
mitigate the effects of the Philippines unstable economy. Finally, the leader wanted to
head off encroaching competition from the worlds biggest breweries, namely Anheuser-
Busch and Miller of the United States, Kirin of Japan and BSN of France. In an interview
with Asian Business Michael Selwyn, San Miguel President Francisco C. Eizmendi, Jr.,
said that what we are aiming to do is be a David among the Goliaths of international
business, without losing our grip on the local market.
 Having determined that overseas growth was imperative, Soriano allocated a $1
billion to a five-year strategic internationalization program that focused on shaping up
domestic operations, then progressing to licensing and exporting, overseas production,
and finally to distribution of non-beer products. San Miguels plant modernization plan
involved sweeping improvements, from computerization to quality circles. These efforts
laid the groundwork that would enable the company to compete with the worlds food
and beverage multinationals. A subsequent decentralization created a holding company
structure with the 18 non-beer operations positioned as subsidiaries. This corporate
reorganization freed the spun-off businesses from the bureaucratic shackles of a large
conglomerate. In the course of this multifaceted effort to attain optimum efficiency, San
Miguel reduced its workforce by more than 16 percent, from a 1989 high of 39, 138 to
32, 832 by 1993. Asian Business noted that these programs helped increase profit per
employee by 56 percent in 1991 alone.
With its domestic ducks in a row, San Miguel turned to the next stage in its
internationalization, beer licensing, and exporting initiative. Although the company had
exported beer for most of its history, this effort was intensified dramatically in the late
1980s. San Miguels beer exports grew by 150 percent from 1985 to 1989 alone, and
the brand was soon exported to 24 countries, including all of Asias key markets as well
as the United States, Australia, and the Middle East. Once the core brand was
established in a particular market, San Miguel would begin to create production
facilities, sometimes on an independent basis and sometimes in concert with an
indigenous joint-venture partner. By 1995, San Miguel had a manufacturing plants in
Hong Kong, China, Indonesia, Vietnam, Taiwan and Guam.
Thus, in spite of the overarching quarrel regarding San Miguels ownership (not
to mention other problems endemic to operating in the Philippines), the companys
sales quintupled from P12.23 billion in 1986 to P68.43 billion by 1994. Net income
increase twice as fast, from P1.11 billion to P11.86 billion over the same period,
although San Miguels overseas operations (as a whole) were not yet profitable.
In 1996 San Miguel purchased full control of its Hong Kong arm, San Miguel
Brewery Hong Kong Limited. In April of the following year, San Miguels domestic soft-
drink bottling unit, Coca-Cola Bottlers Philippines, Inc.,was emerged into the Australia-
based Coca-Cola Amatil Limited (CCA). In effect, San Miguel exchanged its 70 percent
interest in a Philippine-only operation for a 25 percent stake in CCA, which had
operations in 17 countriesboth in the Asia-Pacific region and in Eastern Europe. CCA
soon demerged the latter operations into a U.K- based firm called Coca-Cola Beverages
plc (resulting in a reduction of San Miguels stake in CCA to 33 percent). Seeking to
maintain its focus on the Asia-Pacific region, San Miguel sold its stake in the new U.K.
entity in mid-1998.
From 1995 through 1997, San Miguel suffered from a downturn in its main
domestic businesses, while overseas operations were still in the red. Profits plummeted.
In response, a major restructuring of the companys loss-making food businesses was
undertaken. San Miguels ice cream and pasteurized milk business was merged with
operations of Nestl to form Nestl Philippines, Inc., and late in 1998 San Miguels
stake in this business was sold off. San Miguel also exited from ready-to-eat meal
sector and curtailed the operations of its shrimp farming business.
 By late 1997the company was also beginning to feel the effects of the exploding
Asian economic crisis. In addition, the price of its stock was declining. At this point, a
Hong Kong- based conglomerate, First Pacific, stepped inti the picture, acquiring a 2
percent stake in San Miguel and entering into negotiations to pay as much as $1.3
billion for the two government-sequestered stakes that remained the subject of lengthy
litigation. First Pacific abandoned its takeover bid early in 1998, however, when the
negotiationswhich required a resolution of the status of the disputed stakesran afoul
of Philippine election-year politics.

A New Cojuangco Era: Late 1990s and Early 2000s

In April 1998the anti-graft court handling the case of the disputed San Miguel
stakes ruled that Cojuangco was entitled to vote 20 percent of the shares, although he
was not given ownership of the shares. This enabled Cojuangco to install three new
directors on the company board. Then in May, Joseph Estrada won the Philippine
presidential election. Cojuangco had been the main financial backer of Estrada, a
former movie actor who had been Cojuangcos vice-presidential running mate during
their unsuccessful 1992 campaign, and Cojuangco also became a chairman of
Estradas political party following Estradas electoral victory. By early July 1998, Soriano
III had resigned from his position as chairman of San Miguel, and the board of directors,
which included seven government-controlled (and hence Estrada-controlled) seats,
voted to return Cojuangco to the chairmanship. This marked an amazing comeback for
the once-disgraced Cojuangco, and also left many observers worried about a possible
return to the crony capitalism of the Marcos era.
Cojuangco moved quickly to turn around the fortunes of the foundering company.
Restructuring moves included a flattening of management layers to speed up decision-
making and make the company more responsive to the market place. Overseas, the
international headquarters were moved from high- priced Hong Kong to low-priced
Manila as part of a larger cost-cutting initiative. The company also raised its domestic
beer prices to make up for revenue lost from higher taxes on beverages and liquor. San
Miguel increased its share of the domestic bottled water market by acquiring Metro
Bottled Water Corporation, maker of Wilkins Distilled Water, in July 1999. Later in 1999
San Miguel announced that it would sell its minority stake in CCA through a stock
offering, but these plans were soon abandoned when CCAs stock price declined
sharply. Income from operations for San Miguel rose slightly in 1998 before surging 63
percent in 1999.
Using a huge hoard of cash built through the recent asset sales, Cojuangco
completed a series of acquisitions from 2000 to early 2002. During 2000, San Miguel
purchased J. Boag& Son Limited, an Australian brewer, for about P2.4 billion ($856
million), as well as Sugarland Multi-Food Corporation, a Philippine juice maker, for P2.9
billion. The latter firmrenamed Sugarland Beverage Corporationwas jointly acquired
by San Miguel and its majority-owned subsidiary, La Tondea Distillers. Two major
acquisitions of Philippine firms were then completed in 2001. Pure Foods Corporation
was acquired for P7.02 billion. Renamed San Miguel Pure Foods Company, Inc., the
acquired company was a market leader in both processed meats and flour. The deal
thereby expanded San Miguels processed meat portfolio and also marked its foray into
the flour industry. In July 2001 San Miguel joined forces with the Coca-Cola Company
to reacquire Coca-Cola Bottlers Philippines, with San Miguel taking a 65 percent stake
and Coca-Cola the remaining 35 percent. As part of the deal, San Miguel sold its shares
in CCA back to that company. Later in 2001,San Miguel sold its bottled water and juice
businesses, now amalgamated as Philippine Beverage Partners, Inc., to Coca-Cola
Bottlers Philippines. Finally, in February 2002, San Miguel completed the acquisition of
an 83 percent stake in Cosmos Bottling Corporation in a P15 billion ($282 million) deal
completed through Coca-Cola Bottlers Philippines. Cosmos specialized in low-priced
soft drinks and held the number two position in the Philippine market. The combination
of Coca-Cola Bottlers Philippines and Cosmos gave San Miguel control of more than 90
percent of the Philippines soft-drink industry.
During and following this period of acquisitiveness, the questioned of who owned
San Miguel remained unresolved. Estrada became embroiled in a corruption scandal
and was then forced from power in January 2001 in a popular uprising backed by the
military. Replacing Estrada as president was Gloria Macapagal-Arroyo,who almost
immediately began maneuvering to oust Cojuangco from the chairmanship of San
Miguel as part of her campaign to rid the country of corruption. Arroyo sought to replace
five directors appointed by Estrada, but a technicality prevented her from doing so prior
to the May 2001 annual meeting. Cojuangco was thus able to retain his position as
chairman. Then in December 2001 the Philippine Supreme Court ruled that Arroyo
could in fact replace the five directors. Simultaneously, however, Cojuangco arranged a
deal with the Japanese brewer Kirin Brewery Company, Limited whereby Kirin would
invest P27.88 billion ($544 million) for a 15 percent stake in San Miguel. Kirin finalized
its investment in February 2002, gaining two board seats that Cojuangco could now
count on to help him remain in power. By this time, Cojuangco had also gained
popularity among investors for turning around the company and making it one of the
most profitable in the countrydespite a prolonged economic downswing; the
government recognized this support by reaching a deal with Cojuangco in early 2002.
Cojuangco could remain in control of the conglomerate until the anti-graft court
determined the true ownership of the disputed shareholdings; in return the government
would gain representation on important management committees and on the boards of
13 company subsidiaries.
San Miguel thus stood in the early 2000s as one of the most respected
corporation in the Philippines, while at the same time facing an uncertain future because
of the long-unresolved ownership dispute. In addition, there was a potential
complication: Cojuangco was reportedly considering another run at the Philippine
presidency for the May 2004 election

Mission Statement
San Miguel Corporation, Inc. is committed to the empowerment of San Miguel
host communities and various stockholders by harnessing corporate social
responsibility among the various san Miguel businesses in pursuing mutually beneficial
program that lead to self-reliance and sustainability.

Vision Statement
 To be constantly aware of the aspiration of the people and of nation, and to
ensure that san Miguel continues to make a major contribution toward the achievement
of these aspiration. To manufacture, distribute and sell throughout the Philippines food
products, beverages, product and animal feeds, being ready at all time to add, modify or
discontinue product in accordance with changes in the market. To diversity into fields
which will ensure optimum utilization of management resource and substantial
contribution to corporate profit. To seek and developed export markets for new product
as well as for those already being produce by the corporation. To generate a return on
funds employed sufficient to ensure an adequate rate of growth for the corporation, and
to provide satisfactory returns to stockholders. To provide an environment which is
conductive to the development of the individual and which encourage employees to
realized their full capabilities.

Companys Policies

Whistle Blowing Policy

The Corporation has an established whistle-blowing policy aimed at encouraging
employees to speak out and call the attention of management to any suspected
wrongdoing which is contrary to the principles of the Code of Ethics and violations of the
Corporations rules and regulations. The policy aims to protect the whistleblower from
retribution or retaliation, and provides a disincentives to passively allowing the
commission of wrongful conduct. The whistleblowing policy provides for procedures for
interested parties to communicate, even anonymously, concerns regarding accounting,
internal accounting, auditing or financial reporting matters directly to the SMC Audit
Committee through the Office of the General Counsel.
The policy was adopted by the company on November 16, 2006.

Conflict of Interest Policy

Directors, Officers and Employees are required to disclose the extent of their
business interests in order to determine any possible conflicts of interest. Failure to
disclose fully is a ground for temporary disqualification as a director. In accordance with
the Policy on Conflict of Interest, a full Business Interest Disclosure Form is required to
be submitted upon their appointment.
Employees of the corporation are expected to give due time and attention to the
Corporation. In carrying out their duties and responsibilities. The basic expectation is
that the employees actions are made in the best interest of the Corporation. The
Corporation, however, acknowledges that employees may pursue outside financial ,
business or other activities as long as these activities are legal and do not conflict with
the regular and conscientious performance of their Company obligations and do not
result in damage to or misuse of Company reputation, property, products, confidential
information, influence of other resources.
The Corporation also acknowledges that it has the right to protect itself from
possible conflicts pf interest on the part of its employees, which might affect its financial
and business viability. Conflict of interest arises if a Company officer, employee or close
relative of an officer or employees has any financial or business interest in the
enterprise of ny supplier, competitor, customer or any organization which may benefit
from decisions or actions made by the officer or the employee in the execution of
Company responsibilities, and the officer or employees knowledge of the Companys
confidential information, actions or future plans.
A conflict of interest may also arise when the interest of an officer or an employee
of the Corporation in an outside organization takes a significant amount of time and
attention such that it adversely affects the performance of his or her duties and
responsibilities in the Corporation.
Consistent when the Corporations outlook ad approach on employee
discipline, the Corporation lays the accountability in the hands of the officers and
employees to disclose possible conflicts of interest. Any possible conflict of interest
must be disclosed by the officer or employee involved to his or her immediate superior
who will, in return, review and resolve the conflict situation based on guidelines and in
consultation with management.
The policy was adopted on July 11, 2003.

Policy on Dealings in Securities

The Directors, Officers and employees of san Miguel Corporation(the Company)
should exercise extreme caution when dealing in the Companys securities and ensure
that such dealings comply with this policy and the requirements under the securities
Regulation Code(SRC).
This policy statement sets out the conditions and rules under which the directors,
officers and employees pf the Company(the relevant persons) shall deal in securities of
the Company.
A. Definitions
(a) dealing includes subject to paragraph (f) below, any direct or indirect
acquisition, disposal or transfer of, or offer to acquire, dispose of or transfer,
or creation of pledge, charge or any other security interest in, any securities of
the Company or any entity whose assets solely or substantially comprise
securities of the Company, and the grant, acceptance, acquisition, disposal,
transfer, exercise or discharge of any option (whether call, put or both) or
other right or obligation, present or future, conditional or unconditional, to
acquire, dispose of or transfer securities, or any interest in securities. Of the
Company or any such entity, in each case whether or not for consideration,
and any agreements to do any of the foregoing, provided that advising,
procuring or encouraging another person to buy, sell or otherwise deal in the
Companys securities or passing on information to any other person, if the
Relevant person knows or ought to reasonably know that such other person
may use the information to buy, sell or deal in (or procure another person to
buy, sell or deal in) the Companys securities shall likewise be considered as
dealing, and deal shall be construed accordingly;
(b) associates includes the Relevant persons spouse or relatives by affinity or
consanguinity within the second degree, legitimate or common law, or any
person controlled by the Relevant person;
(c) beneficiary includes any discretionary object of a discretionary trust(where
the Relevant Person is aware of the arrangement) and any beneficiary of a
non-discretionary trust;
 (d) securities means the securities defined in Section 3.1 of the SRC, as
amended from time to time, issued by the Company;
(e) material non-public information refers to information relating to the Company
that (a) has not been generally disclosed to the public and would likely affect
the market price of the Companys securities after being disseminated to the
public and the lapse of a reasonable time for the market to absorb such
information; or (b) would be considered by a reasonable person as important
under the circumstances or influence persons who commonly invest in the
Companys securities in determining whether to buy, sell or hold the
companys securities.
(f) Notwithstanding the definition of dealing in paragraph (a) above, the
following dealings are not subject to the provisions of the Code;
(i) Taking up of entitlements under a rights issue, bonus issue,
capitalization issue or other offer made by the Company to holders
of its securities(including an offer of shares in lieu of a cash
dividend) but, for the avoidance of doubt, applying for excess
shares in a rights issue or applying shares in excess of an assured
allotment in an open offer is a dealing;
(ii) taking up of an offer made by the Company under its employee
stock purchase plan or long term incentive plan for stock options;
(iii) allowing entitlements to lapse under a rights issue or other offer
made by the Company to holders of its securities (including an offer
of shares in lieu of a cash dividend);
(iv) exercise of share options or warrants or acceptance of an offer for
shares pursuant to an agreement entered into by the Relevant
Person and the Company before a period during which the
Relevant Person is prohibited from dealing under this policy and/or
the SRC at the predetermined exercise price, being a fixed
monetary amount determined at the time of grant of the share
option or warrant or acceptance of an offer for shares;
(v) undertakings to accept, or the acceptance of, a mandatory tender
offer for shares in the Company made to shareholders; and
(vi) an acquisition of qualification shares by a director where, under
applicable law and/or the Companys constitutional documents, the
final date for acquiring such shares falls within a period during
which the director is prohibited from dealing under this policy and/or
SRC and the director cannot acquire such shares at another time.
For purposes of this policy, the grant to a Relevant Person of an option to
subscribe or purchase the Companys securities shall be regarded as a
dealing by him at the time of the grant, if the price at which such option
may be exercised is fixed at the time of such grant. If, however, an option
is granted to a Relevant Person on terms whereby the price at which such
option may be exercised is to be fixed at the time of exercise, the dealing
is to be regarded as taking place at the time of exercise.

B. Prohibitions
(a) A Relevant Person must not deal in any of the securities of the Company at any
time when he has knowledge or is in possession of material non-public
information, unless the Relevant Person
(a) Proves that the information was not gained from his relationship with
the Company, subject to paragraph B. 2 below; or (b) if the other party
selling to or buying from the Relevant Person (or his agent) is
identified, the Relevant Person proves (i) that he disclosed the
information to the other party, or (ii) that he had reason to believe that
the other party otherwise is also in possession of the information.
(b) A Relevant Person must not deal in the securities of the Company
when by virtue of his position as a director of another listed company,
he is in possession of material non-public information in relation to the
Companys securities.
(c) Relevant Persons who have knowledge or are in possession of
material non-public information are prohibited from dealing in the
Companys securities during the following periods (each a Blockout
Period);
(i) 10 business days before and 5 business days after the deadline
for the Company to make a structured disclosure or any
disclosure of its financial results for any year, half-year, quarterly
or any other interim period; and
(ii) 5 business days before and 5 business days after any non-
structured disclosure of any material information other than
financial results.
(d) Relevant Persons who have knowledge or are in possession of
material non-public information shall be prohibited from liquidating their
options or selling their shares in the Company granted under the long
term incentive plan for stock options or acquired under the employee
stock purchase program, as the case may be, during Blockout Periods.
Where a Relevant Person is a sole trustee, the provisions of this
policy will apply to all dealings of the trust as if he were dealing on his own
account (unless the Relevant Person is a bare trustee and neither he nor
any of his associates is a beneficiary of the trust, in which case the
provisions of this policy will not apply).
(e) Where a Relevant Person deals in the securities of the Company in his
capacity as co-trustee and he has not participated in or influenced the
decision to deal in the securities and is not, and none of his associates
is, a beneficiary of the trust, dealings by the trust will not be regarded
as his dealings.
(f) When a Relevant Person places investment funds comprising
securities of the Company under professional management,
discretionary or otherwise. The managers must nonetheless be made
subject to the same restrictions and procedures as the Relevant
Person himself in respect of any proposed dealings in the Companys
securities.
 (g) The prohibitions on dealings in the Companys securities under this
policy apply to the Relevant Persons associates who have knowledge
or are in possession of material non-public information.

C. Notification

(a) Any Relevant Person of the Company who acts as trustee of a trust must
ensure that his co-trustees are aware of the identity of any company of which
he is a Relevant Person so as to enable them to anticipate possible
difficulties. A Relevant Person having funds under management must likewise
advise the investment manager.
(b) Any Relevant Person who is a beneficiary, but not a trustee, of a trust which
deals in securities of the Company must endeavor to ensure that the trustees
notify him after they have dealt in such securities on behalf of the trust, in
order that he in turn may notify the Company. For this purpose, he must
ensure that the trustees are aware of the companies of which he is a
Relevant Person.
(c) The directors of the Company must as a board and individually endeavor to
ensure that any employee of the Company, or director or employee of a
subsidiary of the Company who, because of such office or employment, is
likely to be in possession of material non-public information in relation to the
Companys securities, does not deal in those securities at a time when he
would be prohibited from dealing by this policy and/or the SRC.

D. Disclosure

(a) Relevant Persons shall comply with the disclosure requirements under the SRC
in respect of their dealings with the Companys securities.
(b) The Company shall also disclose in its annual or current reports, having made
specific enquiry of all directors and officers, whether its directors and officers,
whether its directors and officers have complied with, or whether there has been
any non-compliance with, the required standards set out in this policy and SRC;
and in the event of any non-compliance and an explanation of the remedial steps
taken by the Company to address such non-compliance.

E. Dealing in shares of other companies

Where a Relevant Person obtains material non-public information relating
to a company other than the Company in the course of performing their duties in the
Company, the foregoing prohibitions apply in respect of the securities of such other
company. Moreover, Relevant Persons are also bound by a duty of confidentiality in
relation to information obtained in the course of their duties in respect of third
parties.

F. Consequences for breach of policy

Breach of this policy or the SRC in respect of dealings in the Companys
securities by the Relevant Persons may expose them to criminal and civil liability.
 Breach of this policy or the SRC in relation will also be regarded by the Company as
serious misconduct which may lead to disciplinary action and/or dismissal.

G. Additional Information
Questions arising from the Companys securities dealing policy or securities
dealing requirements under the SRC may be raised with the Relevant Persons
senior officer, Companys Secretary or General Counsel. A relevant Person should
consult/clarify with the foregoing persons before trading in any securities which may
be affected by the policy or SRC in the event of doubt as to its application to the
circumstances of such Relevant Person.
The policy on dealings in securities was adopted on May 22,2008.

Related Party Transactions Policy

The Corporation, in certain subsidiaries and their shareholders, and associates in
the normal course of business, purchase product and services from one another.
Transactions with related parties are made at normal market prices and terms. An
assessment is undertaken at each financial year by examining the financial position of
the related party and market in which the related party operates. All related party
transactions must be done on an arms length basis to safeguard the interests of the
Corporation as well as the minority shareholders and other stakeholders.
As provided under Article Iii, Section 9 of the Corporations By-Laws, the vote of
two thirds (2/3) of the Board of Directors constituting a quorum shall be required to
approve the following:
A. Contracts between the Corporation and one or more of its directors or officers or
their affiliates provided further that: (a) the presence of such director in the board
meeting in which the said contracts were approved shall not be considered for
determining a quorum for such meeting; (b) that such director shall not vote for
the approval of the contract; (c) that the contract is fair and reasonable under the
circumstances; and (d) that full disclosure of the interest of the director, officer
and/or affiliate involved, must be made at such meeting or if the interest is
acquired subsequently, at the first meeting thereafter.

An affiliate for purposes of these By-Laws shall refer to an entity linked directly or
indirectly to said directors or officers by means of their ownership, control or
power to vote ten percent (10%) or more of the outstanding capital stock thereof.

B. Management Contracts
C. The appointment or contracting or any buying or selling agent whose
compensation or commission is at least 50% of the Corporations respective total
purchases or sales for the immediately preceding fiscal year; or the appointment
or contracting of any person, whether natural or juridical, as contractor,
consultant, trustee or in any other capacity, whose compensation or commission
is at least 5% of the Corporations total expenditure for that particular expense
item or items.
 Policy and Data Relating to Health, Safety and Welfare of Employees,
Including Training
As stand in the Companys Employee Manual, in acknowledgement of the
varying needs inherent in every individual, the Corporation endeavours to provide
an environment where the holistic wellness of employees is nurtured and protected.
The Corporation supports several wellness programs and maintains facilities that
take care of the employees well being. These include the gymnasium, employee
clinic, and Management Training Center. The Corporation likewise encourages its
individual business units to develop and implement employee wellness programs of
their own provided they are consistent with Corporation policies and guidelines.
The Corporation provides comprehensive health care service directed at
prevention of disease protection from health hazards and maintenance of health.
Programs are also implemented to identify personal risks to health and to detect
diseases in the early and most treatable stages. The Corporation is also committed
to improve the quality of life of its employees through healthy living and piloting of
wellness initiatives to encourage employees to maintain active and healthy lifestyles.
The Corporation also provides regular information on health to assist employees in
making better decisions regarding their health condition as well as their dependents.
The Corporation also strives to protect its employees from harassment of any
form. The Corporation actively implements mechanisms for dealing with such
occurrences and ensure that it will act justly, swiftly and decisively in addressing
such complaints. The Corporation is also committed to promote a work place that is
free from drug abuse as it is detrimental to the health, safety and work performance
of employees and poses risks to Corporation operations and product quality.
The Corporation seeks to have accident-free operations in all its offices and
production facilities worldwide. The policy on safety is derived from principles,
values, legal and regulatory requirements, and is operationalized through the
implementation of standards of performance and well-documented standard
operating procedures. These are further reinforced by regular installation audits and
proactive education of the workforce.
The following are the Corporations health care programs to protect employees
and their dependents against financial burdens that come with illness or injury:
Health and Welfare Program- this program is being maintained and administered
by the Corporation which has its own clinic and accredited third party medical
personnel. The plan provides for hospitalization and medical benefits under the plan
for qualified employees. The employee may enjoy the benefits under the plan as
long as he has accrued sick leave credits. The following are provided: free
hospitalization, medical consultation, medicines and medical services.
Health and Welfare programs for dependents, provided that the dependents are
registered with the Corporation. The plan covers hospitalization, dental, diagnostic
procedures, and out patient services. The employee and the Corporation share on a
50-50 basis the insurance premiums. The plan will answer for the room and board,
doctors fees, surgical fees and miscellaneous expenses of eligible dependents,
outpatient benefits, subject to certain limits.
 The Corporation recognizes its responsibility to shape and develop the
knowledge, skills and attitudes of its human resources in order to contribute to the
professional development of its employees and maintain its competitive position.
The Corporations training and education philosophy is defined in the following
principles:
Business Contribution Training is anchored on the needs of the business and the
impact on the Corporations bottom line. Education and training help optimize the
productivity and performance of the employees of the Corporation and enable them
to contribute to the profitability of the Corporation.

Alignment of the Needs of the Corporations framework creates an environment

where the employees have the opportunity to chart their own progress and
development so as long as these are supportive of the Corporations strategic
directions.
Holistic Development Education and training is holistic and comprehensive in
content and approach. The Corporation develops the employee not just on technical
function or functional expertise but on work support skills and
leadership/management. In terms of approach, the Corporation utilized traditional
classroom, experiential and mentoring approaches to deliver training.
Collaborative Partnership and Involvement Planning, design and delivery of
education solutions are done in partnership with clients and with accredited service
providers.
In support of the foregoing policies, the Corporation has an education benefit
which provides assistance to employees who wishes to pursue further studies. The
program covers free tuition and miscellaneous expenses as well as cost of major
books. The Corporation also extends educational loans, interest free, to meet the
educational requirements of the employees and their dependents.
The Corporation also has Management and Development Program aimed at
ensuring timely availability of the required number of employees at middle manager
level and up with the necessary or required education, experience, ambition and
personal characteristics to fulfill the short and long term needs of the organization.
The MDP involves in depth assessment and the implementation of planned
development activities to meet the skill gaps of the employees.