7-Eleven AR 2018 - As of 071519 - Optimized PDF

TABLE OF CONTENTS
Vision, Mission, Core Values 01

Financial Highlights 02
Letter to Shareholders 04
Review of Operations 06
2018 Milestones 08
Back to Basics 10
Innovating Forward 12
Corporate Social Responsibility Highlights 14
Board of Directors and Corporate Officers 16
Management Team 20
Corporate Governance 22
Audit and Risk Committee Report 37
Excerpts of Financial Statements 38
7-Eleven Stores Worldwide 40
Corporate Information 41
ABOUT THE COVER

Back to Basics, Innovating Forward
In its stunning clarity and simplicity, our cover
perfectly reflects our 2018 strategy - honing
our focus on our core capabilities, resulting
in a stellar turnaround from the challenge of
2017. This reestablished firm footing further
supported our constant forward momentum,
as we continue to enrich and redefine the
meaning of modern convenience.
VISION Our vision is to be the best retailer of
convenience for emerging markets.
MISSION To make daily life easier by providing

modern convenience.
CORE Teamwork
VALUES
Reliability
Customer focus
Data-driven
Integrity
ANNUAL REPORT 2018

1 1
1
2018 ANNUAL REPORT
FINANCIAL HIGHLIGHTS
COMPARATIVE FINANCIAL HIGHLIGHTS
FOR THE YEAR 2018 2017 2016
System-wide Sales 46,128,724 37,530,753 31,756,480
Revenues 43,770,478 35,391,848 31,269,129

EBITDA 4,220,311 3,580,214 3,110,253
Net Income 1,531,756 1,317,870 1,175,470
Return on Average Equity (%) 23.38% 23.81% 25.67%
AT YEAR-END 2018 2017 2016
Stores in Operation Revenues 2,550 2,285 1,995
Total Assets 17,402,648 14,359,857 12,351,256
Total Liabilities 10,327,782 8,332,357 7,309,624
Stockholder's Equity 7,074,865 6,027,499 5,041,632
Current Ratio (x) 0.97 0.91 0.83
Debt-to-Equity Ratio 1.46 1.38 1.45
PER SHARE DATA 2018 2017 2016
2.03 1.74 1.55
9.35 7.97 6.67
FINANCIAL RATIOS STOCK PRICE
2 BACK TO BASICS, INNOVATING FORWARD

BALANCE SHEET HIGHLIGHTS 2018 vs 2017 2017 vs 2016
Current Assets 8,988,630 39.4% 20.0%
Noncurrent Assets 8,414,018 6.4% 13.4%
Total Assets 17,402,648 21.2% 16.3%
Current Liabilities 9,252,672 30.1% 9.8%
Total Liabilities 10,327,782 23.9% 14.0%
Stockholder's Equity 7,074,865 17.4% 19.6%
Book Value Per Share 9.35 17.4% 19.6%
7,074,865 6,027,499 5,041,632
2018 17,402,648 2017 14,359,857 2016
10,327,782 8,332,357 7,309,624 12,351,256
Total Total Stockholder's

Assets Liabilities Equity
INCOME STATEMENT HIGHLIGHTS

2018
2018 vs 2017 2017 vs 2016 System-Wide Sales 46,128,724
Stores in Operation 2,550 11.6% 14.5% Revenues 43,770,478
Gross Profit 15,859,295

System-Wide Sales 46,128,724 22.9% 18.2%
Net Income 1,531,756
Revenues 43,770,478 23.7% 13.2%

2017
Cost of sales 27,911,183 24.9% 10.4% System-Wide Sales 37,530,753
Revenues 35,391,848
Gross Profit 15,859,295 21.5% 18.4% Gross Profit 13,048,410

Operating Expense 13,652,609 21.6% 19.6%
Income Before Income Tax 2,213,308 15.5% 12.0% 2016

System-Wide Sales 31,756,480
Net Income 1,531,756 16.2% 12.1% Revenues 31,269,129
Gross Profit 11,023,476

Earnings Per Share ( ) 2.03 16.2% 12.1%
ANNUAL REPORT 2018 3

LETTER TO
SHAREHOLDERS
To Our Valued Shareholders,

The year 2018 was marked by several
accomplishments by your Company, bringing us closer
to fulfilling our vision of becoming the best retailer
of convenience for emerging markets. It is with great
pleasure that I share them with all of you.
We opened 265 new 7-Eleven stores, ending 2018

with 2,550 stores in the Philippines. At the end of
the year, there were 1,027 stores in Luzon, 938 are in
Metro Manila, 365 in Visayas and 220 in Mindanao.
We shall continue to execute our market development
plan as we take advantage of the improving economy
and the growing customer preference towards
innovation and convenience.
The country’s GDP grew 6.2% and firmed up its

standing as one of the fastest-growing economies in
Asia. This was made evident by the retained stability
of the economic outlook even after the passage of the
tax reform law, which is intended to fund the massive
infrastructure project of the government. The tax
reform lowered personal income tax while imposing
new excise tax on sugar-sweetened beverages. In our
view, the excise tax, which is applied evenly, benefitted
sales as this narrowed the relative price difference
between mass-market and premium products which
we are known for.
4
We owe much of our success to our customers who welcomed Moving on to the other aspects of the business, the Company
our 7-Eleven stores as we expanded into new markets in has exerted significant effort to improve its Corporate
the country. We continued to roll-out our freshly brewed Governance (CG) processes. This has been done to create
coffee, City Blends, and launched Crunch Time, our very own sound and stable internal business practices that adhere to the
hot and crispy fried chicken. These new brands aim to drive principles of fairness, accountability and transparency in good
the frequency of customer visits and emphasize our value governance. This initiative originates from the tone at the top
proposition of providing modern convenience. view as the Company’s Board sets the direction and oversees
the formulation and implementation of policies aimed towards
We continued to capitalize on our first mover advantage and strengthening CG practices. In 2018, PSC was ranked among
economies of scale in widening our lead against competition. the top 5 publicly listed companies in the services sector and
The capacity-building investments on logistics assets and was acknowledged by the Institute of Corporate Directors
enhancing organizational capability have produced favorable for its improving CG rating based from the ASEAN Corporate
results. The focus shall be further expanding our footprint as Governance Scorecard.
we see the emergence of new alternatives to the products and
services that we offer. We believe that the market will continue PSC also remains devoted to its corporate social responsibility
to grow, and we remain to be in the best position to take program through PhilSeven Foundation, Inc. (PFI). Once again,
advantage of this opportunity. the foundation was a recipient of the Salamat Po Award given
by the Department of Social Welfare and Development. This is
The financial performance of your Company exceeded in recognition of the valuable contributions of PFI as a corporate
expectations as it registered an increase of 16.2% in net income partner of the government in carrying out its social welfare
surpassing the 12.1% growth reported in 2017. Full-year earnings objectives.
in 2018 stood at PHP1.53 billion compared with PHP1.32 billion
the year prior. This was largely driven by the 8.8% growth in Aside from this, we forged several alliances with the various local
same-store sales, the highest level in 5 years. government units for our Gulong ng Karunungan project, which
is a mobile day-care program that provides alternative education
Our stock price is pegged at PHP112 per share by the end of to children, and for Every Day! Play, which aims to promote
the year, while the trading volume reached almost 30 million healthy communities by increasing access to public playgrounds.
shares, exceeding the 16 million shares traded in 2017. Further,
we continued with our commitment to deliver shareholder value Furthermore, the foundation also reached out to aid employees
by returning 43 centavos per share in cash dividends totaling to of the Company who aspired to complete their college
PHP325 million. The dividends paid correspond to 25% of the education. Fifteen employees of PSC became part of the
previous year’s earnings, which is consistent with our policy. second batch of the 7-Eleven Scholarship Program. This is in
partnership with the PUP-Open University, which facilitated the
Our achievements did not go unnoticed by our peers as our very certificate course on retail management.
own President and CEO, Mr. Jose Victor Paterno, was named
as the Asian Convenience Retail Leader of the Year by the To conclude, we are immensely grateful to the Board of
National Association of Convenience Stores (NACS). The award Directors for their continued guidance and invaluable advice.
was presented during the NACS Convenience Summit Asia I would like to thank our management and employees for
held in Shanghai, China. The award recognizes and honors the their loyalty, dedication, and hard work. I would also like to
contribution of the most successful and influential convenience express my sincerest gratitude to our franchisees and business
industry leader in the Asian region. Victor was recognized for partners for their unwavering support. Finally, my appreciation
navigating Philippine Seven through the execution of one of the and thanks go to our valued customers and shareholders for
most complicated supply-chain networks in Asia. PSC operates your trust, and we shall be looking forward to your continued
13 warehouses nationwide and overcomes the country’s island patronage.
geography to deliver daily to 2,550 stores across an archipelago
of more than 7,100 islands. Thank you very much,
Moreover, our global licensor, 7-Eleven, Inc. (SEI), has also

awarded your Company with the highest same-store sales
growth achievement in 2018, besting the other 18 7-Eleven
licensees. The award was presented during the Annual
Licensees Global Learning Event held in Tokyo, Japan. It was JOSE T. PARDO
indeed a very successful year and we are looking forward to
attaining greater heights this year. Chairman of the Board
and Independent Director

REVIEW OF
OPERATIONS
Dear Fellow Shareholders,

2018 was one of the company’s better years. Same store Coffee
sales increased 8.8%, the highest in 5 years, which drove Our coffee program, City Blends, was rolled out to an additional
an increase in net income from the core convenience store 500 stores on top of the existing 1,350 stores. Investment
business in excess of 20%. Losses from high potential in the City Blends brand, particularly with regard to increasing
but early stage, non-core strategic businesses reduced net consumption frequency, resulted in a 31.6% increase in overall
income growth to 16.2%. sales. We will be rolling out City Blends to all stores this year,
taking the view that it differentiates us and results in increased
TRAIN visit frequency as proven in other markets.
As expected, the Tax Reform for Acceleration and Inclusion Fried Food
Law (TRAIN) was the biggest driver of sales growth in 2018. We scaled up our fried program significantly this year, expanding
Effective January 1, a PHP10/liter tax on sugar-sweetened from 322 stores to 835 stores, including Visayas and Mindanao,
beverages took effect, as did reduced income taxes for the supported by 15 kitchens. The increased scale enabled brand
lower middle class, a segment where we over-index. As a spend as we rebranded from Crisp Bites to Crunch Time. To
result, same store sales grew 12.9% in the first quarter. our knowledge, we are the only convenience chain globally
that delivers freshly fried chicken to its stores, enabling us
A sales lift due to increased taxation is not only to match the popular fried offering of our competitors more
counterintuitive, but breaks with patterns in more efficiently by not having to invest in equipment, space, and
developed markets, such as Mexico, where a tax half ours complex processes in each store. Going forward, we are testing
reduced sales by 3%. Such a phenomenon provides some partnerships with on demand delivery players to reduce store
insight into the unique industry structure of the Philippine delivery costs and improve product freshness.
market, and is worth delving into.
EXPANSION
A per liter excise tax, because it is flat, results in higher
price increases (as a percentage) for value beverages and Our store count increased by 265 stores, expanding store
lesser increases for premium beverages. Because we base by 12%. This lags openings in prior years, partly due to
skew towards the latter, and the traditional trade skews a deliberate decision to defer openings in trade areas that
toward the former, our value proposition improves relative were premature in light of decreased competition. New store
to theirs. More significantly, there are switching effects sales were in fact the highest to date. It is also due in smaller
to beverages not covered by the tax but with marginal part due to executional lapses driven by one-time changes in
representation in the traditional channel, such as water management structure that we expect will pay off in the longer
and dairy. Finally, it is worth noting that last year’s sales term. Going forward, we expect openings to accelerate as
growth was the highest since 2013, when the excise tax on we improve execution and adopt a more aggressive stance as
tobacco had similar effects (a significant increase in this tax competition from the emerging minimart channel increases.
is pending in legislation in 2019).
With economic growth becoming more decentralized across the
SALES INITIATIVES archipelago, we opened 104 stores in Visayas and Mindanao. We
entered two new islands, Mindoro and Leyte, which are being
Optimized Assortment served by Distribution Centers (DCs) from the nearest island
Loyalty data and our previous experience increasing until we are confident these markets can support their own DCs.
the number of products we carry led us to initiate more
thoughtful and more data-driven approaches to determining In total, we now operate 12 DCs, opening 1 DC in 2018, as well
what products should be present in a given category. We as 36 commissaries. The challenge of archipelago logistics for
successfully tested approaches that grow category sales by convenience stores is unique to our market, and we will continue
removing relatively redundant items and replacing them to build on our innovations to increase competitive advantage.
with relatively unique ones, enabling us to serve a wider
range of customer needs without investing in increased
space. These approaches will be scaled up in 2019.

DIGITAL
We invested in our digital infrastructure over the years with

the view that our stores had the potential to serve as physical
gateways to the virtual world of goods and services, and were
rewarded this year with a commanding share of payments from
fintech players, most notably e-wallets. This contributed to a
more than doubling of commission income versus last year.
We sharply increased investment in this digital infrastructure

in 2018, weaving together payments and loyalty into an
ecosystem that includes two new businesses, e-commerce
and our own e-wallet. The ecosystem is intended to not only
create a more seamless experience for customers, but also
allow synergies in customer acquisition. For example, payments
customers are encouraged to become loyalty members when
they use our kiosk, and the points they earn can be spent
through the wallet; wallet users in turn are especially targeted for
e-commerce offers.
While both the wallet and e-commerce businesses are expected

to directly contribute to the business directly in the future,
they also serve as proof of concept to entice other wallet
and e-commerce businesses to partner with us more closely,
providing revenue and further growing the ecosystem. We do
realize, however, that these are early days in a fluid space, and
moved to reduce spend while preserving optionality in the latter
part of the year.
In summary, though regulatory tailwinds blew in the industry’s

favor, we outperformed our competition by rolling out proven
winners that differentiate us further from competition and that
are difficult for others without our scale to emulate. We also
invested in initiatives that we hope will become the next set of
proven winners to be rolled out over a store network we intend
to grow more aggressively.
In closing, we would like to thank all our stakeholders for their

support - our suppliers, for their trust and commitment to
mutual growth, our franchisees, for their belief in our brand and
systems, our employees, for their hard work and dedication, and
our shareholders for their trust and continued confidence. With
everyone’s support, we continue reaching for our vision to be the
best retailer of convenience for emerging markets.
Very truly yours,
JOSE VICTOR P. PATERNO

President and CEO

MILESTONES
2018
7-Eleven opens in Region II,
MIMAROPA, and CARAGA
7-Eleven steps up its regional
expansion efforts by opening stores
in Mindoro and Puerto Galera in April,
Isabela in August, and Surigao del Sur
and Samal Island in December.
Third-generation stores
7-Eleven opens three new concept

stores to debut its upgraded store look.
7-Eleven launches
Crunch Time
7-Eleven launches its fried product line,
Crunch Time, rolling out the program to
834 stores in 2018.

City Blends coffee program
expansion
PSC continues to roll out its coffee
program, adding 500 City Blends stores
and ending the year with 1,850 stores
selling City Blends coffee.
CLiQQ app hits over 1M

downloads
The CLiQQ mobile app earns 1.3 million
downloads in 2018 as it launched efforts
to increase user engagement.
PSC wins big at 7-Eleven

International Summit
Global licensor 7-Eleven, Inc. (SEI)
honors PSC with the award for Highest
Same Store Sales Growth in 2018.

BACK TO BASICS
Back to Basics, Exceeding Expectations
Philippine Seven Corporation (PSC) not only met, but surpassed the challenge posed by the dip in our sales in 2017, compared to
the previous election year. Although we retained our first-mover advantage and our position as the leader in convenience retailing,
we took the setback very seriously indeed, re-examining our core business, focusing on key product lines, and seeking ways to
improve operational excellence. These efforts gratifyingly resulted in optimized processes and even international acclaim for our sales
performance in 2018.
As part of our mission

Expansion Highlights to give customers what
they want, we tested
We opened 265 stores, ending the year with a total of 2,550 the feasibility of offering
stores nationwide. We continued with our strategy to expand lechon in 10 stores.
aggressively into new territories in regional areas, particularly Much to our customers’
Region II and MIMAROPA in Luzon - where we opened 15 and delight, we partnered with
3 stores, respectively - and CARAGA in Mindanao , where we Zubuchon.
opened 6 stores.
The product was well
As part of our logistics support initiatives, we opened a new received and these stores
Frontier Distribution Center (FDC), a small warehouse which were able to sell 7 units
carries limited SKUs, to serve our still growing market in per store per day (UPSD),
Dumaguete. We also upgraded our existing FDC warehouses in nearly doubling our target and even drawing buzz online from
Batangas and Cagayan de Oro to Regional Distribution Centers customers and media outlets alike.
(RDCs) which are now capable of carrying all SKUs to support
our expansion in the said areas. In 2019, we intend to rollout Crunch Time to 400 more stores
across Luzon (Rizal, Laguna, Cavite), Visayas (Iloilo, Bacolod,
Dumaguete, Lapu-Lapu), and Mindanao (General Santos and
Cagayan de Oro). We also plan to construct at least 13 additional
satellite kitchens to serve more neighborhoods.
Toward expanding our core products, we are looking at rolling out

products such as chicken fillet, chicken leg quarter, and chicken
poppers to give budget-conscious customers even more value
for money. To further broaden our range of offerings, we plan to
roll out chicken neck, which will complement beer sales; lechon
pork belly, hash brown bites, widening our snack offerings; and
Flavorites, flavor pouches that customers can add on to spice up
their Crunch Time experience.
Key Programs
Our fried chicken and coffee programs remain to be key traffic City Blends
drivers, bringing customers into our stores and encouraging
them to purchase complementary items as well. Mindful of this, Our coffee program, City Blends,
we continue to enhance the quality, appeal, and accessibility of continues to deliver on its promise
these products. of fresh, real coffee that is affordable
and available in more locations.
Crunch Time In 2018, we focused on product
improvement and continuous
We rebranded our fried product line from Crisp Bites to Crunch expansion. We added 500 City
Time in November 2018. The brand is strongly supported with Blends stores, ending 2018 with
marketing efforts and is currently endorsed by Brandon Vera. 1,850 stores serving coffee.
Our hero product, Crunch Time fried chicken, is freshly-cooked
and delivered to stores in multiple batches daily, ensuring that Efforts to beef up sales and improve
our customers enjoy that delicious crunchiness without the coffee quality should support plans
hassle of lining up in a QSR. Aside from fried chicken, Crunch to raise gross profit for the category.
Time also offers on-the-go crunchy treats such as chicken Further strategies moving forward
nuggets and fried bread. We ended the year with 15 active include brand building and rolling
kitchens and 834 stores serving Crunch Time. out City Blends to all 7-Eleven
stores, as well as, excitingly, plans to
launch a City Blends cafe in 2019, to
strengthen the brand even more.
City Blends Prima Profitability Support Program
Targeted at central business districts, our City Blends Prima is Piloted in 2016 and finally rolled out nationwide in 2018, the
made from Brazilian Arabica beans - compared to the local Profitability Support Program promotes collaborative forecasting
Arabica used in our standard City Blends - which should fulfill between Area Managers and Store Managers. It encourages
the demand for premium coffee from our more exacting Store Managers to order more SKUs - reducing opportunity
customers. loss - while empowering Area Managers with Bad Merchandise
subsidy, to offset incremental expenses due to the additional
ordering of stores.
On-Shelf Availability
To ensure a focused approach to category management at
the store level, a category clerk is assigned per shelf to follow
the correct arrangement of products, as well as ensure proper
ordering and timely replenishment of products.
Digital: Launch of Workplace at PSC

Rolling out to an additional 50 stores, we doubled our store Recognizing the need for faster and better collaboration,
count in 2018, ending the year with 100 stores offering City especially in light of our aggressive expansion, we looked for
Blends Prima. We sold 53 cups of coffee per store per day, more a communication tool to serve this purpose. We launched
than doubling our target of 20, indicating consumers’ positive Workplace by Facebook, a platform that functions exactly
response to the product itself, the roll-out, and the additional like Facebook but tailor-made for companies to use. This
options when we offered both City Blends and Prima together dedicated platform enables the creation of groups, sharing of
in the same store. documents, creation of and participation in polls, and more,
therefore allowing real-time collaboration, smooth cascading of
With such an encouraging reception, we plan to formally launch information, and a quick response network for operations.
City Blends Prima in 2019, and intend to expand to more stores.
Workplace helps facilitate better teamwork. We have already
seen very positive outcomes from our Operations Division’s Best
Assortment Practices Workplace group, where members share successful
case studies for other stores to learn from, bringing about
7-Eleven is committed to offering quality products our notable augmentation in project management, cross-functional
customers want and need, 24/7. We continued to deliver on collaboration, crowdsourcing and feedback, monitoring of
this promise and took steps to review and update our processes, newly-opened stores, and process improvements.
constantly finding ways to innovate and optimize assortment.
These 2018 efforts culminated in PSC receiving the prestigious
award for Highest Same Store Sales Growth for 2018 from our
New and Improved global licensor, 7-Eleven, Inc. (SEI). Despite being the leader of
Ordering System convenience retailing, we could not simply rest on our laurels.
Though we have first mover advantage, the challenge posed
After years of having our by 2017 drove us to revisit our core business to ensure that we
stores order products continue to grow sales and deliver value to our customers. We
manually, we developed made sure to focus on opportunities such as key products with
a new ordering system, to high growth potential to drive the business. We focused on
ensure consistent on- fundamentals, improving our operational execution to ensure
shelf availability of the top we have the systems in place to support our growth as we
10 SKUs in our Walk-In continue to expand aggressively and strategically. To achieve our
Chillers (WIC), thereby objectives, we have built a good foundation, a strong core, while
boosting the sales and also leaving us room to innovate the business in the future.
gross profit of our WIC and
chilled, foodservice SKUs.
The project saw a 6.2%

increase in sales versus
the prior year, indicating a
significant improvement in our ordering system, and certainly
underscores the importance of data-driven forecasting and
inventory management in the mindset of our Store Managers.
The successful launch of this initiative also led the way to

the introduction of a new ordering methodology, under the
Profitability Support Program.

INNOVATING
FORWARD
Evolving to Anticipate Our Customers
Our market is ever-changing, especially as we continue to expand into new territories and our existing customers grow and transform.
Mindful of this, we strive to foresee and fulfill their emerging needs and preferences, providing truly modern convenience. In 2018,
this constant endeavor was enacted through the roll-out of tailor-fit concept stores, ongoing digital improvement, and adaptive
promos that both used and amassed data to further enhance our ability to serve our customers.
Store of the Future
As our customers’ lifestyles evolve, we continue to evolve with them, our store design included. The new standard look that we intend
to roll out store-wide is designed to cater to millennials - the Philippine population’s largest age group - as well as the growing Gen Z
segment, which is now dining out more often.
Our new store look showcases contemporary interiors and vibrant colors. Special features include attractive, cozy dining areas and a
dedicated e-commerce display, since online shopping is popular among the target market.
As part of the development process, we designed three concept stores located in Aseana City, Monarch Parksuites, and Ayala the
30th. Our goal was to test out these stores and determine which features we would integrate into our new store look. Customers can
expect to see and experience this updated look in new 7-Eleven stores.

CLiQQ Points-to-Peso
Four years ago, we launched our CLiQQ app, upgrading June 2018 saw the introduction of our points-to-peso
our loyalty program from the typical physical card to the conversion feature, enabling CLiQQ users to transform their
unparalleled convenience of a mobile application. CLiQQ earned points into e-wallet credits, so they can now purchase
enables users to: products in-store, carrying nothing more than their mobile
phones. The launch was a success, with 43% of our CLiQQ app
• Earn points when they buy, by having their unique barcodes users converting their points to wallet credit.
scanned on their phones,
• Enjoy cashless transactions through our CLiQQ Pay e-wallet
service, and
• Pay bills, load up their cell phones, and more, at our one-
stop CLiQQ kiosks. We increased CLiQQ’s capacities even
more in 2018, further transforming every 7-Eleven store into
a physical gateway to the digital realm for our customers.
Piso Hotdog
To encourage downloads and continuous use of CLiQQ, we sent
a promo code via SMS to lapsed Big Bite customers, allowing
them to redeem a hotdog for just one peso. The campaign went
viral, was picked up by multiple online sites, and achieved one
million downloads, becoming the most downloaded app for
several days on both iOS and Android platforms.
PSC believes we serve our stakeholders, not only by focusing on

what we do best, but constantly seeking ways to do even better,
anticipating the evolution of our market and their lifestyles.
This constant innovation brings every customer, everywhere,
complete convenience - around the corner, in the digital realm
where we are consistent pioneers, and at their fingertips.

CORPORATE SOCIAL RESPONSIBILITY
HIGHLIGHTS
The vision of the CSR arm of PSC, PhilSeven Foundation,
Inc. (PFI) is to offer services which improve the quality of life,
presently and in the long term, in communities served by
7-Eleven.
A Firm Foundation for the Future
Our corporate social responsibility arm, PhilSeven Foundation, Inc. (PFI), advocates for and enables education for the young and
helps ensure that communities across the country not only survive, but thrive both through school and play. In 2018, we facilitated
schooling for children in Pampanga and Bacolod, along with learning opportunities through play. We also supported tree planting
activities and relief operations as part of its social responsibility to the environment.
Gulong ng Karunungan On February 5, two more GNK mobile units were turned over in
San Fernando, Pampanga. These will be deployed in Barangay
7-Eleven believes in the importance of education for children Del Pilar and Barangay Northville, addressing the prior absence
and the youth, to equip them for a better life and give them of early childhood care and development centers in the city.
a chance to move out of poverty. Our Gulong ng Karunungan
(GNK) CSR initiative is a mobile school project that offers
marginalized youth, especially street children, an alternative
avenue for learning. GNK provides basic education under
the Department of Education’s Alternative Learning System
standards, along with the building blocks of values formation
and good hygiene practices.
On January 30, 2018, two GNK mobile units were turned over
to Bacolod City Mayor Evelio Leonardia. This both nurtures
and shows gratitude for our healthy patronage in the area -
there are 46 7-Eleven stores in Negros province, 27 of which
are in Bacolod City.
Every Day! Play
As children are drawn to outdoor play, PFI developed the

concept of building suitable playground parks in various
communities where such facilities were lacking, promoting child-
friendly, healthy communities. This initiative reinforces the value
of play in children’s foundational years, as according to various
research studies, learning through play in their early years will
prepare them for positive and progressive adult life.

Since 2007, PFI has been working with various sectors, Recognition
volunteers, and local officials to construct convenient
playground structures across metro locations and nearby On March 8, we proudly received the Salamat Po award
provinces, in order for kids to enjoy quality play time together from the Department of Social Welfare and Development,
with their families. recognizing 7-Eleven as a partner in serving the Filipino people,
improving the lives of children and their families.
In 2018, PFI turned over two community playgrounds: in
Barangay Sindalan, San Fernando, Pampanga on September 28; PFI also received our renewal of accreditation from the
and Barangay Mojon, Malolos City, Bulacan on November 29. Philippine Council for NGO Certification last August 10.
To date, there are already five 7-Eleven Every Day! Play learning
playgrounds in the country.
Relief Work
Tree Planting
PFI helped repack food for Mayon Volcano evacuees from March
As has become our custom over the last three years, we 7 to April 25, and for Typhoon Ompong victims from September
celebrated 7-Eleven Day with a company tree-planting activity, 20 to 28.
in cooperation with Philippine Business for Social Progress
(PBSP). In keeping with 7-Eleven Inc.’s (SEI) Global Climate As wholehearted members of our communities, we at 7-Eleven,
Change campaign, we are deeply committed to strengthening through PFI, are honored to serve and support our neighbors,
both the local ecosystem and livelihoods, by preserving and across the nation. Together, going back to basics while
augmenting the Philippines’ life-giving forestry. innovating forward, we are building a firm foundation for the
future.
7-Eleven personnel planted 1,550 fruit-bearing trees at

Barangay Calawis, Antipolo City, benefiting Tulungan Sa
Kabuhayan ng Calawis, Inc. (TSKC), a local farmers’ organization
that operates in Mount Purro, in the forest-critical area of the
Marikina Watershed.
This endeavor further supported the Go Green initiative of PSC,

PFI, and the Department of Environment and Natural Resources.

BOARD OF
DIRECTORS AND CORPORATE OFFICERS
Jose T. Pardo
Chairman of the Board and Independent Director
Filipino, 79, Chairman of the Board and Independent Director since 2015. He chairs PSC’s Executive
Committee and Corporate Governance Committee. He is also a member of PSC’s Audit and Risk
Committee. He is also the Chairman and Independent Director of Philippine Stock Exchange, Philippine
Savings Bank, Securities Clearing Corporation of the Philippines, and Bank of Commerce. He is also
the Chairman of Philippine Business Center, Inc. (non-profit). He serves as Independent Director of
JG Summit Holdings, Inc., ZNN Radio Veritas, Monte Oro Grid Resources Corporation, Araneta Hotels,
Inc., National Grid Corporation of the Philippines, League One Finance and Leasing Corporation, and
Del Monte Philippines, Inc. He sits as Chairman of Synergy Grid and Development Philippines, Inc.
(non-operating). Among his awards are The Outstanding Filipino (TOFIL) Award, La Sallian “Masters”
Award and Distinguished La Sallian from De La Salle University-Manila, Outstanding Alumnus Awardee
from vDe La Salle University Graduate of School of Business, Man of the Year Awardee 2000 by
Catholic Educators Association of the Philippines, Productivity Excellence in Leadership-Industry
Sector by Asian Productivity Organization Society of the Philippines, Papal Knight of St. Sylvester,
Honorary Fellow of Asian Productivity Organization of Tokyo, Japan, The Outstanding Young Men
(TOYM) Awardee, President Roxas Memorial Award, Founding Fellow of Development Academy of
the Philippines (DAP), Citation as Monetary Board Member by Central Bank of the Philippines, and
Outstanding Rotarian Award from Rotary Club District 380. Mr. Pardo earned the degree of Bachelor of
Science in Commerce from De La Salle University-Manila, his Master of Business Administration (MBA)
as First Graduate under the Harvard-DLSU Advisory Program from De La Salle University-Manila and
Doctor of Humanities (Honoris Causa) from Gregoria Araneta University Foundation. He was given an
Observation Grant to France on Promotion and Financing of Small and Medium Scale Enterprises and a
Fellowship Grant to the United States on the Development of Small Medium Scale Industries.
Jui-Tang Chen
Vice Chairman and Director
R.O.C., 60, Director of PSC since 2012. He was elected as Vice-Chairman on July 19, 2018. He is the
Chairman and President of Ren-Hui Investments Corp. He is the Chairman of President Lanyang Art
Corporation, President Transnet Corp., President Collect Services Co.Ltd., Retail Support International
Corp., Uni-President Superior Commissary Corp., President Chain Store (Shanghai) Ltd., Uni-Wonder
Corporation, President (Shanghai) Health Product Trading Company Ltd., President Chain Store
(Zhejiang)Ltd., and Beauty Wonder (Zhejiang)Trading Co.,Ltd. He is a Director of Uni-President
Enterprises Corp., President Chain Store Corporation (PCSC), President Drugstore Business Corp.,
President Being Corp., President Pharmaceutical Corp., Uni-President Department Store Corp., 21
Century Enterprise Co., Ltd., Uni-President Cold-Chain Corp., Shan Dong President Yinzuo Commercial
Limited, President Chain Store(BVI) Holdings Ltd., PCSC (China) Drugstore Limited, President Chain
Store (Labuan) Holdings, Ltd., President Chain Store (Hong Kong) Holdings Ltd., Uni-President Logistics
(BVI) Holdings, Ltd., Uni-President Development Corp., President International Development Corp.,
Nanlien International Corp. and President Fair Development Corp. He holds a Bachelor’s Degree in
Economics from the Department of Economics of the National Taiwan University.
Jose Victor P. Paterno

President, CEO, and Director
Filipino, 51, Director of PSC since 2005. He served as Vice-President for Operations prior to
being appointed as President and CEO of PSC. He is a member of the Executive, Audit and Risk,
Compensation, and Corporate Governance Committees of PSC. He is also the Chairman and President
of Convenience Distribution, Inc. (CDI) and Store Sites Holding, Inc. (SSHI) and Chairman and Trustee of
PhilSeven Foundation, Inc. (PFI), all are subsidiaries/affiliates of PSC. He chairs Supply Chain Networks,
Inc. He is also the President of First MFI Network, Inc., and Director of Electronic Commerce Payment
(EC-Pay) Network, Inc., and The Straits Wine Company, Inc. He serves as Board Co- Chair (Retailer)
of ECR Philippines and as Vice President for National Chapter Development of Philippine Franchise
Association. He is a member of the Management Association of the Philippines, Makati Business Club,
Young Presidents Organization, and Coca- Cola Retailing Research Council. He was a Management
Associate of Nestle USA from 1990 to 1993. He received the 2013 CEO Excel Award from International
Association of Business Communicators (IABC). He was also awarded as the 2012 Master Entrepreneur
by Ernst & Young. He holds a Bachelor of Science in Mechanical Engineering, (Magna Cum Laude), from
Lehigh University, Bethlehem Pennsylvania, U.S.A.

Jorge L. Araneta
Director
Filipino, 82, Director of PSC since 1988. He serves as Consul Ad Honorem of the Embassy of the Republic
of Colombia. He also serves as the Chairman and CEO of Araneta Group. He is the Chairman of the
Board of Araneta Center Inc., Progressive Development Corporation, Uniprom Inc., and Philippine Pizza
Inc. He also serves as a Director of Wendy’s Philippines. Among his awards are 2016 People of the Year
Award from People Asia Magazine, President’s Award as Pioneer of Retail Entertainment by Philippine
Retailers Association, UP College of Business Administration 2005 Distinguished Alumni Awardee,
Franchisee Awardee of the Year for Philippine Pizza, Inc., Top 5 Best Employer in Asia/Philippines by
Hewitt Associates/Wall Street Journal/MAP, David Novak YUM Award, Plaque of Merit from Quezon
City Chamber of Commerce and Industry, Inc. as Recognized Business Leader of Quezon City, Plaque
of Appreciation for Outstanding Contribution from the Consular Corps and Diplomatic Corps of the
Philippines, and Plaque of Appreciation from De La Salle University on the occasion of the establishment
of the Don J. Amado Araneta Distinguished Chair of Financial Management. He holds a degree in Bachelor
of Science in Business Administration from the University of the Philippines.
Maria Cristina P. Paterno

Director
Filipino, 48, Director of PSC since 2015. She served as Marketing Assistant of Advertising and Promotions
in Philippine Seven Corporation prior to her election as Director. She is the President of International
Council on Monuments and Sites - Philippines and T. Paterno Conservation, Inc. She is also the Executive
Director of San Sebastian Basilica Conservation and Development Foundation, Inc. She was also an
Independent Consultant for Building and Art Restoration at The Cloisters, Metropolitan Museum of
Art in New York, Sta. Ana Church in Manila, and 929-933, Broadway, New York. She holds a Degree in
B.A. Humanities from Ateneo de Manila University and M.S. Historic Preservation from University of
Pennsylvania, U.S.A. She also completed the Intensive Spanish Language Program of the Universidad
Complutense, Madrid.
Antonio Jose U. Periquet, Jr.

Independent Director
Filipino, 57, Independent Director of PSC since 2010. He sits as Chairman of the Audit and Risk
Committee and Member of the Executive Committee of PSC. He is the Chairman of Pacific Main
Holdings, Inc., Campden Hill Group, Inc., Campden Hill Advisors and BPI Asset Management and Trust
Corporation. He is also an Independent Director of Ayala Corporation, DMCI Holdings, Inc., Bank of the
Philippine Islands, ABS-CBN Holdings Corp./ABS-CBN Corporation, Max’s Group, Inc., BPI Capital,BPI
Family Bank, and Albizia ASEAN Tenggara Fund. He is a Director of The Straits Wine Company, Inc. and
a Trustee of the Lyceum University of the Philippines. He holds a degree in AB Economics from the
Ateneo De Manila University, MSc Economics from Oxford University, and an MBA from the University
of Virginia.
Michael B. Zalamea
Filipino, 54, Independent Director of PSC since 2005. He is a Member of the Executive, Audit and
Risk, Compensation, and Corporate Governance Committees of PSC. He serves as a Director of
Campden Hill Advisors, Inc., Wespac Holdings, Inc., The Straits Wine Company, Inc., Vertere Global
Solutions, Inc., and Vertere Venture Capital Inc. He is also a Trustee of The Beacon Academy. He
is the former Portfolio Manager of Global Fund of American International Group, Inc. He holds a
Bachelor of Science in Finance from the Fordham University U.S.A and an MBA from the University
of Virginia.

Lien-Tang Hsieh
Director
R.O.C., 58, Director of PSC since 2012. He is the Marketing Group Chief Officer of PCSC and the
Chairman of Mister Donut Taiwan Corp and Duskin Serve Taiwan Co. He is also a Director of President
Chain Store Tokyo Marketing Corporation, Uni-President Superior Commissary Corp., Books.com. Co.
Ltd., Ren-Hui Investment Corp., ICASH Corp., President Transnet Corp., President Collect Services
Co. Ltd.,PCSC Restaurant (Cayman) Holdings Limited., Uni-President Cold-Chain Corp., President
Chain Store Good Neighbor Foundation, President Chain Store (Zhejiang) Ltd., and RenHui Holding
Co., Ltd. He holds a Bachelor’s Degree in Business Administration from the Department of Business
Administration of the Chinese Culture University.
Jui-Tien Huang
Director
R.O.C., 55, Director of PSC since 2017. He is the President and Director of PCSC and the Chairman
of iCASH Corp., Capital Marketing Consultant Corp., and Tait Marketing & Distribution Co., Ltd.
He is the President and Director of President Pharmaceutical Corp., President Pharmaceutical
(Hong Kong) Holdings Limited. He is also a Director of President Information Corp, President
International Development Corp., Retail Support International Corp., Uni-President Cold-Chain
Corp., Shan Dong President Yinzuo Commercial Ltd., RenHui Holding Co., Ltd., Books.com
Co.,Ltd., RenHui Investment Corp., Uni-Wonder Corporation, President Chain Store (Shanghai)
Ltd., President Chain Store (Zhejiang) Ltd., President Chain Store (Hong Kong) Holdings Ltd.,
PCSC (China) Drugstore Ltd., Zhongshan President Enterprises Co., Ltd. Uni-President Foodstuff
(BVI) Holdings Ltd.; Dr. C.Y. Kao’s Non-Profit Foundation of Culture & Education (In Memory of
His Mother); Changjiagang President Nisshin Food Co., Ltd.; President Nisshin Corp.; Shanghai
Songjiang President Enterprises Co., and Taiwan Millenium Health Foundation. He is also the
President of Tung-Ren Pharmaceutical Corporation. He holds a Master’s Degree in Marketing
from National Kaohsiung First University of Science and Technology and a Bachelor’s Degree in
Economics from Soochow University.
Chi-Chang Lin
Director
R.O.C., 58, Director of PSC since 2015. He is a Vice President of PCSC. He is also the Chairman of Cold
Stone Creamery Taiwan Ltd., President Chain Store Good Neighbor Foundation, and President Chain
Store Corporation Insurance Brokers Co. Ltd. He is a Director in Capital Marketing Consultant Corp, and
iCASH Corp. He is also a Supervisor in Uni-President Cold Chain Corp. He holds a Bachelor’s Degree in
Social Work from the Department of Social Work from Soochow University, Taiwan
Wen-Chi Wu
Director
R.O.C., 49, Director of PSC since 2008. She is a Director and the Chief Financial Officer of PCSC.
She is also a Director of PCSC (Cayman) Restaurant Limited. She is the Supervisor of Books.com.
Co., Ltd., RenHui Investment Corp., President Collect Services Co., Ltd., President Transnet Corp.,
and Uni-Wonder Corporation. She holds a Bachelor’s Degree in Accountancy from the School of
Accountancy in University of Missouri in Columbia.

Jun-Ya Liu
Treasurer and CFO Director
R.O.C., 38, Treasurer and CFO of PSC since July 19, 2018. He was PCSC’s Head of Financial Planning from
2012 to 2018, Specialist of Financial Planning from 2010 to 2012, and Specialist of Long-Term Investment
Management from 2006 to 2010. He holds a Bachelor of International Trade degree from the University
of Shih Chien, Taipei, Taiwan and a Master of Science in Finance and Management from the University of
Exeter, UK.
Ying-Jung Lee
Vice-President for Supply Chain
R.O.C., 44, Vice-President for Supply Chain of PSC since August 8, 2014. He has been with PSC since
2010. He is a Non-voting Member of the Compensation Committee and a Member of the Executive
Committee of PSC. He is a Director in Convenience Distribution, Inc., a subsidiary of PSC. He was the
Leader of the E-Service Team of Marketing Department of President Chain Store Corporation. He
obtained his Bachelor’s Degree in Cooperative Economic at Feng-Chia University, Taiwan.
Ping-Hung Chen
Vice-President for Administration
R.O.C., 44, Vice-President for Administration since August 8, 2014 and was PSC’s Treasurer and CFO from
Nov. 2012 to July 2018. He is a Non-voting Member of the Compensation Committee and a Member of the
Executive Committee of PSC. He is a Director of SSHI and a Trustee of PFI, all are subsidiaries/affiliates of
PSC. He was PCSC’s Head of Investment Management from 2011 to 2012 and Investor Relations from 2011
to 2012 and was a Financial Planning Specialist from 2000 to 2005. He holds a degree in Economics from
TungHai University and an MBA from National Kaoshiung First University of Science and Technology.
Evelyn Sadsad-Enriquez
Corporate Secretary
Filipino, 55, Corporate Secretary of PSC since 2005. She is a Non-voting Member of the
Corporate Governance Committee. She is also the Compliance Officer, Head of Legal and
Corporate Services Division and Data Protection Officer. She is Corporate Secretary of CDI,
Director and Corporate Secretary of SSHI, and Trustee and Corporate Secretary of PFI, all are
subsidiaries/affiliates of PSC. She is the President and Director of Columbia Owners’ Association
Inc. and Trustee and Treasurer of Good Governance Advocates and Practitioners of the Philippines
(GGAPP). She is also Director and Corporate Secretary of Sterling Fluid Systems Enterprises,
Inc. (SFSEI), and Ferguson Park Tower Condominium Corporation (FPTCC). She completed
the Professional Directors Program under the Institute of Corporate Directors (ICD), Certified
Franchise Executive (CFE) by The Institute of Certified Franchise Executives, USA and Philippine
Franchise Association and Certified DPO ACE Level 1 and 2 by National Privacy Commission. She
holds a degree in BSC Major in Economics from the University of Santo Tomas and Bachelor of
Laws (Cum Laude) from the University of Santo Tomas.

MANAGEMENT
TEAM
Top Row (from left to right)

Ping-Hung Chen Ying-Jung Lee Min-Chieh Lai Chao-Shun Tseng Jose Victor P. Paterno
Vice President for Vice President for Marketing Director Corporate Planning Head President and CEO
Administration Supply Chain
Bottom Row (from left to right)

Vincent Angelo A. Dela Cruz Maria Celina D. De Guzman Violeta B. Apolinario Armi A. Cagasan
Marketing Communications Internal Audit Human Resources and Strategic Merchandise
Division Head Division Head Administration Division Head
Division Head

Top Row (from left to right)
Jun-Ya Liu Eduardo P. Bataclan Liwayway T. Fernandez Atty. Evelyn S. Enriquez Lawrence M. De Leon
Treasurer and Procurement Operations Director Legal and Corporate Services Finance and Accounting
CFO Division Head Division Head, Division Head,
Compliance Officer Investor Relations Officer
Bottom Row (from left to right)

Jose C. Ang, Jr. Jason Jan G. Ngo Francis S. Medina Ulysses V. Borral Gil M. Abad
General Merchandise Information Technology Visayas Regional Business Development Mindanao Regional
Division Head Division Head Business Unit Head Division Head Business Unit Head

CORPORATE GOVERNANCE
PSC commits itself to the fundamental principles of sound
corporate governance contained in its Manual of Corporate
Governance (Manual), and acknowledges that the same shall
guide it in the attainment of corporate goals.
The core values of teamwork, reliability, customer-focus, and

data driven are PSC’s guiding principles in its efforts to create
corporate governance awareness within the organization.
Keeping pace with the developments on corporate governance,

PSC strives to improve its CG Practices in accordance with
industry standards. In 2018, PSC was recognized as one of
the Top Performing Publicly-Listed Companies (PLCs) in the
Philippines based on the 2017 ASEAN Corporate Governance
Scorecard (ACGS).
PSC seeks to meet the needs of its customers and maintain a

leadership position in the convenience store industry by taking
advantage of economies of scale, technology, people, and a
widely recognized brand. We keep focus on our vision to be the
best retailer of convenience for emerging markets.
I. THE BOARD’S GOVERNANCE RESPONSIBILITIES

The Board of Directors is primarily responsible for the governance of the Corporation. Corollary to setting the policies for the
accomplishment of the corporate objectives, it shall provide an independent check on Management.
The Corporation should be headed by a competent, working board to foster the long-term success of the corporation and to sustain
its competitiveness and profitability in a manner consistent with its corporate objectives and the long-term best interests of its
shareholders and other stakeholders.The Board of Directors must conduct themselves in line with the principles of good corporate
governance, ensuring that the corporation’s vision, mission, and goals are attained and realized.
PSC’s Corporate Governance Framework
BOARD COMPOSITION & QUALIFICATION Non-Executive Independent Executive

Directors Directors Director
For 2018, PSC’s Board of Directors is composed of 11 directors, (NED) (ID) (ED)
majority of whom are non-executive directors
7 3 1

PSC set its qualification standards for selection of its directors through its Corporate Governance Committee (CG Com) which reviews
the qualifications of nominees as disclosed in the Manual, CG Com Charter, and Definitive IS.
The Board of Directors has collective qualifications, work and professional experience, expertise and relevant trainings on retail and
consumer business finance, accounting, investment, IT, property development, marketing and corporate management.
Majority of the Board of Directors are NEDs who possess the necessary qualifications to effectively participate and help secure
objective, independent judgment on corporate affairs and to substantiate proper checks and balances.
All directors were elected by the stockholders during the Annual Stockholders’ Meeting (ASM) to serve for a period of one year from
election and until their respective successors have been elected and qualified.
BOARD TRAINING BOARD SECRETARY

Integrated in PSC’s CG Manual and Board Charter, is its policy The Board is assisted in its duties by a Corporate Secretary, who
on training directors. It provides a training/orientation program is not a member of the Board of Directors, and annually attends
for first-time directors and annual continuing training to all trainings on corporate governance. The Corporate Secretary is
directors. It conducts a business overview and provides exposure a Filipino citizen and a resident of the Philippines, is an officer
tour of 7-Eleven stores and trade check of other retail business of the Corporation, and has among others, the following
formats. It also provides recent trade analysis or industry responsibilities:
benchmarking together with recent industry surveys.
a. Assists the Board and the board committees in the conduct
PSC provides yearly training on Corporate Governance to its of their meetings, including preparing an annual schedule of
directors and key officers. For 2018, PSC provided its directors and board and committee meetings and the annual board calendar,
key officers a 4-hour training on Sustainability Reporting and Insight and assisting the Chair of the Board and its committees to set
agendas for those meetings;
on Data Privacy conducted by Sycip Gorres & Velayo (SGV).
b. Safekeeps and preserves the integrity of the minutes of the
meetings of the Board and its committees, as well as other
BOARD DIVERSITY POLICY official records of the corporation
c. Keeps abreast on relevant laws, regulations, all governance
PSC values the importance of board diversity that encourages issuances, relevant industry developments and operations of
its members to have an active role in providing an optimal the corporation, and advises the Board and the Chairman on all
decision- making and in the formulation of corporate rules, relevant issues as they arise;
regulations and policies. It shall embrace board diversity, as d. Works fairly and objectively with the Board, Management
much as practicable, which is not limited in terms of age, gender, and stockholders and contributes to the flow of information
culture, skills, competence, and knowledge. The directors of between the Board and management, the Board and its
PSC also have diversified business experience in retail, finance, committees, and the Board and its stakeholders, including
banking, property, IT and Communications. The Board’s current shareholders;
composition is set out in the following chart: e. Advises on the establishment of board committees and their
terms of reference;
12
f. Informs members of the Board, in accordance with the
Female Below
by-laws, of the agenda of their meetings at least five (5)
10
(2) 50 working days in advance, and ensure that the members have
8 Filipino
(2) them accurate information that will enable them to arrive at
NED
(7)
(6) intelligent decisions on matters that require their approval;
6 g. Attends all Board meetings, except when justifiable causes,
Male Above such as illness, death in the immediate family and serious
4 (9) 50 accidents, prevent him/her from doing so;
Non- (9)
ID
Filipino
h. Performs required administrative function;
2 (3)
(5) i. Oversees the drafting of the by-laws and ensures that they
ED (1) conform with regulatory requirements; and
0
j. Performs such other duties and responsibilities as may be
Gender Designation Ethnicity Age Group
provided by laws and regulations.
COMPLIANCE OFFICER
The Board is assisted in its duties by a Compliance Officer, with adequate stature and authority in the Corporation. The Board
appointed a Compliance Officer, who is not a member of the Board and annually attends trainings on corporate governance and has,
among others, the following duties and responsibilities:
a. Ensures proper on-boarding of new directors (i.e., orientation on the Company’s business, charter, articles of incorporation and by-laws,
among others);
b. Monitors, reviews, evaluates and ensures the compliance by the Corporation, its officers and directors with the relevant laws, the Manual,
rules and regulations, and all governance issuances of regulatory agencies;
c. Reports the matter to the Board if violations are found and recommends the imposition of appropriate disciplinary action;
d. Ensures the integrity and accuracy of all documentary submissions to regulators;
e. Appears before the Securities and Exchange Commission (SEC) when summoned in relation to compliance with the Manual;
f. Collaborates with other departments to properly address compliance issues, which may be subject to investigation;
g. Identifies possible areas of compliance issues and works towards the resolution of the same;
h. Ensures the attendance of board members and key officers to relevant trainings; and
i. Performs such other duties and responsibilities as may be provided by the laws and regulations.

SUCCESSION PLANNING or the Executive Committee. Additional directors’ fee (gratuity)
shall be given upon the occurrence of any of the following: a)
PSC’s CG Manual and Board Charter provides that the Board End of term of office and not accepting reappointment (except
shall ensure the adoption of an effective succession planning due to removal); b) Incapacity; c) Resignation due to any of the
program for directors, key officers and management to above; d) Death, which shall be equivalent to one month of the
ensure growth and promote dynamism in the corporation and Chairman’s prevailing monthly directors’ fee for every year or
continued increase in the shareholders’ value. term in office.
PSC has started in 2012 a Leadership Academy and Mentor’s The Company updated its policy on for director’s fee for
Leadership Training Program which has the objective to Independent Directors. As a director and member of the Board,
train and develop management and officers in line with the the Independent Director shall be entitled to an annual director’s
Corporation’s succession planning program. Leadership and fee of PHP 200,000.00. Also, if he is a Chairman of any Board
business management trainings are also provided each year to Committees, the Independent Director shall be entitled to an
build competency of management team and officers in strategic annual director’s fee of PHP 200, 000.00, and if a member
decisions, business modeling, and effective execution. Succession of any Board Committees, the Independent Director shall be
planning principle adhered to provides for each Division to hone entitled to an annual director’s fee of PHP 100,000.00.
at least 2 section managers lined up as potential next in line
successors and provided training/exposure. In addition to per diem, profit sharing is provided in the Code
of By-laws in an amount not exceeding 15% of the net profit
of the Corporation (after tax), which shall be distributed to the
members of the Board of Directors and Executive Committee
Division Head Division Head members and officers of the Corporation in such amounts and
manner as the Board may determine. Profit share not exceeding
Section Manager Section Manager 15% of net profits after tax of the Corporation shall be submitted
to stockholders for approval. The last profit sharing in 1996 was
set at 5% of net income after tax thereon. The directors and the
Section Manager Section
SectionManager
Manager executive officers did not receive any profit sharing in the years
after 1996. In 2009, target incentive and annual performance
bonus were granted to management, the officers and support
Retirement policy for key officers and management team personnel based on achievement of the target rate for pre-
(PO-HRD-PAS-044) pursuant to Republic Act 7641 or The tax income for the year as set in the annual plan and budget.
Retirement Pay is covered by a Retirement Plan duly registered These are provided to regular employees and executive officers,
with the Bureau of Internal Revenue (BIR) with the funds held part of the management team of the Corporation. During the
and managed under a trust agreement with a reputable bank. Corporation’s Initial Public Offering (IPO) on February 4, 1998,
it offered an Employee Stock Purchase Plan (ESPP) for its
employees to buy stocks equivalent of 1 to 3 months of their
REMUNERATION salary payable in installment without interest for 24 months.
The levels of remuneration of the Corporation should be
There are no existing options, warrants or stock plan
sufficient to be able to attract and retain the services of
arrangements and none are held by the directors, executive and
qualified and competent directors and officers. A portion of
corporate officers of the Corporation.
the remuneration of executive directors may be structured or
be based on corporate and individual performance. The Board
shall look into the alignment of remuneration of key officers and NOMINATION AND ELECTION OF DIRECTORS
board members with the long-term interest of the Corporation.
No director shall participate in the approval of his compensation. Election of directors are held annually during the stockholders
Directors shall not receive any compensation unless provided in meeting and conducted in a manner provided by the
the by-laws of the Corporation or approved by the stockholders Corporation Code. Each director will hold office until the annual
as may be required in its by-laws. However, the Board may, meeting held next after his election and until his successor shall
from time to time, approve a reasonable per diem that a director have been duly chosen and qualified, or until he has resigned.
may receive for attendance in Board and Board Committee
meetings. With the passing of the Revised Corporation Code PSC set its qualification standards for selection of its directors
on February 20, 2019, the corporation will align its CG Manual, through its Corporate Governance Committee (CG Com) which
policies and by-laws to the requirements of the law. reviews the qualifications of nominees.
The Company has certain standard arrangements with respect The qualifications of directors require among others: that
to compensation and profit sharing. Member of the Board the director shall be at least a college education graduate or
of Directors, board and advisory committees, designated must have sufficient experience in managing the business;
corporate/executive officers, and adviser/consultants are practical understanding of the business or of the Corporation;
given a per diem of PHP 15,000.00 (as may be fixed from membership in good standing in relevant industry, business or
time to time) are given to each of the members of the Board of professional organizations and; previous business experience
Directors, for all meetings actually attended. or shall be proven to possess the appropriate level of skill
in line with strategic plans and goals of the Corporation. No
The Compensation Committee approved the policy on Directors person shall qualify or be eligible for nomination or election to
Fee and Gratuity for the office of the Chairman of the Board the Board of Directors of the Corporation if he is engaged in a
effective February 1, 2015. The Chairman of the Board is entitled business which directly competes with or antagonistic to that of
to a monthly director’s fee, as concurred by the Board and/ the Corporation as provided in PSC Code of By-Laws.

NOMINATION PROCEDURE
PSC’s Board established the Executive Committee, Audit and
The CG Committee shall meet at least once a year to oversee Risk Committee, Corporate Governance Committee, and
the development and implementation of corporate governance Compensation Committee which assist the Board to oversee
principles, policies and structures provided in the CG Manual and the development and achievement of corporate objectives and
relevant laws. It adheres to the following nomination procedures: strategy, risk management, business plan, targets and budgets,
monitor performance to create optimal value to the Company.
1. A stockholder may recommend the nomination of a Each Committee has its own charter, which defines its purpose,
director to the Corporate Governance Committee; roles, responsibilities and authority, including the rules and
2. The nominating stockholder shall submit his proposed procedures that shall guide the function of the committee.
nomination in writing to the Corporate Governance Composition of Board Committees is provided below and on
Committee, together with the acceptance and conformity page 26 of this Annual Report Book.
of the would-be nominee;
3. The Corporate Governance Committee shall screen the COMMITTEES COMPOSITION, FUNCTIONS
nominations of directors in accordance with existing laws
and regulations and Corporation policies prior to the
AND ATTENDANCE TO MEETINGS
stockholders’ meeting and come up with the Final List of
Executive Committee
Candidates.
4. Only nominees whose names appear in the Final List of Name Position Attendance
Candidates shall be eligible for election as an Independent Jose T. Pardo Chairman of the Board and the Executive 2/2
Director. Committee and Independent Director
Jose Victor P. Paterno Member and President/CEO 2/2

The Committee is composed of 4 directors as voting members,
3 of whom are independent directors. It also has 1 non-voting Antonio Jose U. Periquet, Jr. Member and Independent Director 2/2
member. A Committee meeting shall convene upon notice in
Michael B. Zalamea Member and Independent Director 1/2
writing at least 3 days prior.
Jun-Ya Liu* Member and Treasurer/ CFO 1/1
VOTING PROCEDURE
Ping-Hung Chen** Member and Vice President for 1/1
Administration
All voting matters, except in cases where the by-laws provides
otherwise, shall be decided by the plurality vote of stockholders Ying-Jung Lee Member and Vce President for 2/2
Administration
present in person or by proxy and entitled to vote thereat, a
quorum being present. *elected/appointed as of July 19, 2018, **Member until July 19, 2018
Election of directors shall be by ballot unless otherwise agreed Acts on specific matters as may be delegated to it by the Board, except with
respect to: (1) approval of any action for which shareholders’ approval is also
upon that a viva voce vote shall be made. A shareholder may required; (2) the filling of vacancies in the Board; (3) the amendment or repeal of
vote such number of shares for as many persons as there are any resolution of the Board which by its express terms is not so amendable or
directors to be elected or he may cumulate said shares and vote repealable. All matters passed and acted upon by the Executive Committee in the
exercise of its powers and functions as provided herein, have the same force and
to one candidate as many votes as the number of directors to effect for all intents and purposes, as if passed by the Board itself.
be elected multiplied by the number of his shares, or he may
distribute them on the same principle to as many candidates he
deemed fit. Audit and Risk Committee
Name Position Attendance

Unless required by law, or demanded by a stockholder present
Antonio Jose U. Periquet, Jr. Chairman of the Audit and Risk 2/2
in person or by proxy at any meeting, and entitled to vote Committee
thereat, the vote on any question need not be by ballot. On a and Independent Director
vote by ballot, each ballot shall be signed by the stockholder
Jose T. Pardo Member, Chairman of the Board and 2/2
voting, or in his name or by his proxy, if there be such proxy, and Independent Director
shall state the number of shares voted by him. The counting
thereof shall be supervised by the external auditors or the stock Michael B. Zalamea Member and Independent Director 1/2
transfer agent and within 5 days from ASM, minutes of the ASM Jose Victor P. Paterno Member and President/CEO 1/2
are uploaded in PSC’s website.
Assists the Board in the performance of its oversight responsibility for

BOARD COMMITTEES the financial reporting process, system of internal control, audit process, and
monitoring of compliance with applicable laws, rules and regulations. It also
Board committees shall be set up to the extent possible to provides oversight over Management’s activities in managing credit, market,
support the effective performance of the Board’s functions, liquidity, operational, legal and other risks of the Corporation; and performs
oversight functions over the Corporation’s internal and external auditors.
particularly with respect to audit, risk management, related
party transactions, and other key corporate governance Adhering to the Principle of Proportionality, PSC combines the functions of a Board
concerns, such as nomination and remuneration. The type of Risk Oversight Committee (BROC) and Related Party Transactions Committee
(RPTC) in its Audit and Risk Committee to achieve functional and cost efficiency.
board committees to be established would depend on the
Corporation’s size, risk profile and complexity of operations.
However, if the committees are not established, the functions of
these committees may be carried out by the whole board or by
any other committee.

Corporate Governance Committee Compensation Committee
Name Position Attendance Name Position Attendance
Jose T. Pardo Chairman of the Board and the 1/1 Wen-Chi Wu Chairperson of the Compensation 1/1
Corporate Governance Committee and Committee and Director
Jun-Ya Liu Non-voting member and Treasurer/CFO 1/1
Evelyn S. Enriquez Non-voting member and Corporate 1/1
Secretary Ying-Jung Lee Non-voting member and Vice President 1/1
for Supply Chain
It reviews and evaluates the qualifications of all persons nominated to the
Board that require Board approval and to assess the effectiveness of the Board’s Establishes formal and transparent procedures for developing a policy on
processes and procedures in the election or replacement of directors. It also remuneration of directors and officers to ensure that their compensation is
oversees the development and implementation of corporate governance consistent with the Corporation’s culture, strategy, and the business environment
principles and policies as part of its governance functions. in which it operates.
BOARD CHARTER
PSC’s Board adopted a Board Charter during its March 2018 meeting. The Board Charter formalizes and clearly states the Board’s
roles, responsibilities, and accountabilities in carrying out its fiduciary role.
BOARD MEETINGS AND ATTENDANCE

The directors shall, as a rule, attend and actively participate in all meetings of the Board, Committees, and shareholders in person
through tele-/video conferencing conducted in accordance with the rules and regulations of SEC, except when justifiable causes,
such as illness, death in the immediate family and serious accidents, prevent them from doing so. In board and committee meetings,
the director should review meeting materials and if called for, ask the necessary questions or seek clarifications and explanations. All
directors complied with the attendance requirement of at least 50% of all board meetings for the year. All directors attended 75% of
the meetings held in 2018.
July 19
March 22 November 6
Director Position (Regular Board PM (Regular Board
AM (Regular
Mtg) ASM (Org’l Mtg)
Board Mtg)
Board Mtg)
Jose T. Pardo Chairman/

Wen-Chi Wu Director
Jose Victor P. Paterno President/ Director
Jorge L. Araneta Director
Maria Cristina P. Paterno Director
Jui-Tang Chen Director
Lien-Tang Hsieh Director
Chi-Chang Lin Director
Jui-Tien Huang Director
Antonio Jose U. Periquet, Jr. Independent Director
Michael B. Zalamea Independent Director
BOARD QUORUM
As provided in Section 16 of PSC’s Amended By-Laws, a quorum at any meeting of the Board of Directors shall consist of a majority of
the Directors as fixed in the Articles of Incorporation and every decision of such quorum duly assembled as a board shall be valid as a
corporate act.
DIRECTORSHIPS
PSC recognizes and considers the affiliation of directors to ensure that they are able to render quality participation in PSC’s Board. PSC
looks at the capacity of the directors to diligently and efficiently perform their duties and responsibilities and the nature and kind of
corporations he/she may be a director of.

INDEPENDENT DIRECTORS
Mr. Antonio Jose U. Periquet, Jr., Mr. Michael B. Zalamea, and Mr. Jose T. Pardo have been re- elected as independent directors (ID).
They possess all the qualifications and none of the disqualifications found in Section 17.2 of the Securities Regulations Code (SRC) and
other relevant laws, rules and regulations, as well as those outlined in the CG Manual. They are not officers or substantial shareholders
of PSC, nor are they the directors or officers of its related companies. None of the independent directors own more than 2% of the
outstanding capital stock as shown in the table on Shareholding of Directors and Key Officers.
As provided in PSC’s CG Manual, IDs may serve for a maximum of nine consecutive years, reckoned from 2012, ensuring that the
shareholders’ legal right to vote and be elected as directors remains inviolable. If the corporation wants to retain an ID who has served
for nine consecutive years, the Board should provide meritorious justifications and advise the shareholders of such justifications during
the annual stockholders’ meeting.
CHAIRMAN OF THE BOARD AND THE CEO

The Chairman and the Chief Executive Officer have a separate leadership structure to ensure Board independence. This is to foster the
principle of balanced power and better capacity in terms of decision-making. They assume divergent key roles wherein each requires
an appropriate level of accountability from the Board, stakeholders, and shareholders.
Mr. Jose T. Pardo serves as the Chairman of the Board and Independent Director and Mr. Jose Victor P. Paterno serves as PSC’s
President and Chief Executive Officer. Their respective roles and responsibilities are provided below:
President and CEO Chairman of the Board
• Determines the corporation’s strategic direction and formulates • Makes certain that the meeting agenda focuses on strategic
and implements its strategic plan on the direction of the business; matters, including the overall risk appetite of the corporation,
• Communicates and implements the corporation’s vision, mission, considering the developments in the business and regulatory
values and overall strategy and promotes any organization or environments, key governance concerns, and contentious issues
stakeholder change in relation to the same; that will significantly affect operations;
• Oversees the operations of the corporation and manages human • Guarantees that the Board receives accurate, timely, relevant
and financial resources in accordance with the strategic plan; insightful, concise, and clear information to enable it to make
• Has a good working knowledge of the corporation’s industry and sound decisions;
market and keeps up- to-date with its core business purpose; • Facilitates discussions on key issues by fostering an environment
• Directs, evaluate and guides the work of the key officers of the conducive for constructive debate and leveraging on the skills and
corporation; expertise of individual directors;
• Manages the corporation’s resources prudently and ensures a • Ensures that the Board sufficiently challenges and inquires on
proper balance of the same; reports submitted and representation made by Management;
• Provides the Board with timely information and interfaces • Assures the availability of proper orientation for first time
between the Board and the employees; directors and continuing training opportunities for all directors;
• Builds the corporate culture and motivates the employees of the and
corporation; and • Makes sure that performance of the Board is evaluated at least
• Serves as the link between internal operations and external once a year and discussed/ followed up on.
stakeholders.
BOARD EVALUATION Board Committee Assessment
Directors and Board Assessment A self-assessment worksheet in accordance with the Audit and
Risk Committee Charter is accomplished every January of each
PSC’s Board conducts and accomplishes self-rating surveys year by its members to evaluate their performance and is collated
annually. The assessments are utilized as a vital tool for by the Corporate Secretary. The basis of evaluation is provided
maximizing their effectiveness, which will aid the Company in under the Code, which provides their assessment based on
identifying key issues necessary to facilitate the development their respective responsibilities such as: 1) setting of committee
and monitor the performance of the Company. The results of structure, 2) oversight on financial reporting and disclosures, which
the assessment are compiled by the Compliance Officer and are provides responsibility for the financial reporting process, system
reported during the Corporate Governance Committee meeting. of internal control, audit process, and monitoring of compliance
with applicable laws; 3) oversight on risk management and internal
The Board’s performance is measured through a rating scale controls, which provides for managing credit, market liquidity,
of 1 to 5, where 1 is Not Performing and 5 is Outstanding operational, and legal and other risk exposure; 4) oversight on
Performance. They are asked to evaluate the Board’s meeting management and internal audit, which provides a review for
procedures, preparation for meetings, monitoring of Company the annual audit plan in conformity with the objectives of the
performance and key issues/trends affecting the Company, Company; and 5) oversight on external audit, which ensures proper
among others. Meanwhile, Directors also assess their individual coordination if more than one audit firm is involved in the activity
performance by answering a self-assessment survey with 31 to secure proper coverage and minimize duplication of efforts.
questions. In this assessment, directors must answer
SA - Strongly Agree, A - Agree, N - Neither Agree Nor Disagree,
D – Disagree and SD - Strongly Disagree
Code of Conduct and Business Ethics
PSC’s Code of Conduct and Business Ethics strengthens its commitment towards Corporate Governance and provides thorough
guidelines for the actions of employees. PSC remains devoted in providing excellent customer service in all of its business endeavors.
PSC believes that transparency is the key to the fulfillment of its goals and retains the trust and confidence of its stakeholders. PSC
employees are purpose-driven. Their actions are in the best interest of the Company as they work towards their goal to achieve PSC’s
vision and mission. The Code of Conduct and Business Ethics is disseminated to the Board, senior management, and employees. It is
part of the module of new directors and discussed to new employees upon hiring. The Board, senior management, and employees
can also access it through the Corporation’s intranet. The Code can also be downloaded from PSC’s website www.7-eleven.com.ph.
II. DISCLOSURE AND TRANSPARENCY

PSC values disclosure and transparency as an essential part of its full commitment to maintain good corporate governance, being
that this is a key factor in the success of corporations. The Company is keen to provide up-to-date information about their corporate
disclosures that are relevant or important to the public, shareholders, and stakeholders.
For proper implementation of the said disclosures and transparency, PSC established the Reportorial Compliance Policy. It seeks
to ensure that reportorial compliance reports required by the SEC, Philippine Stock Exchange (PSE), and other regulatory agencies
are submitted on-time for eventual disclosure, for the benefit of the investing public. It establishes, among others, a mechanism for
close coordination between concerned departments in the preparation, publication, and submission of the said reports and other
disclosures of vital corporate information.
TRANSPARENT OWNERSHIP STRUCTURE
In conformity with SEC requirements, PSC discloses through its website the following: 1) Annual Reports, 2) Quarterly Reports, 3)
Current Reports, 4) Information Statements, 5) Beneficial Ownership Reports, and 6) GIS for the fulfillment of its obligation for
transparency and fairness in the dissemination of information for the benefit of the public.
The following stockholders directly own more than 5% of PSC’s shares as of 2018:
Relationships of Amount and

Percent of
the record owner’s Outstanding
Name and Address of Record/ Nature of
Title of Class Citizenship representative Common
Beneficial Owner Record/ Beneficial
with the issuer Ownership Stock as of
and said owner April 30, 2018
President Chain Store (Labuan) Holding,

Common Ltd.1, 7(E), Main Tower, Financial Park, Malaysian Stockholder 394,970,516 (R) 52.22%
Labuan, Malaysia
Arisaig Asia Consumer Fund Limited4

Common Craigmuir Chambers, P.O. Box 71 Road BVI Stockholder 79,233,591 10.47%
Town, Tortola, British Virgin Islands
Jose Victor P. Paterno3 and siblings, 7th President/ 16,472,569 (R) 2.18%
Common Floor, The Columbia Tower, Ortigas Filipino CEO/Director/ 39,484,334 (B) 5.22%
Avenue, Mandaluyong City
Stockholder 55,956,903 7.40%
Asian Holdings Corporation 2, 4th Floor,

Uni-Oil Bldg., Commerce Ave. cor.
Common Acacia St., Madrigal Business Park, Ayala
Filipino Stockholder 48,933,972 (R) 6.47%
Alabang, Muntinlupa City
Footnotes:
1
Mr. Jui-Tang Chen of President Chain Store (Labuan) Holding, Ltd. has the voting power on behalf of the Corporation
2
Ms. Elizabeth Orbeta or Ms. Diana Pardo-Aguilar has the voting power in behalf of Asian Holdings Corporation
3
Mr. Jose Victor P. Paterno has the power of attorney to vote the 39,484,334-shares of his siblings: Maria Cristina Paterno-13,200,074; Paz Pilar P. Benares – 8,182,368; Ma.
Elena P. Locsin- 11,488,181; Ma. Teresa P. Dickinson – 6,613,711
4
Ms. Rebecca Lewis of Arisaig Asia Consumer Fund Limited has the voting power on behalf of the Corporation

CONFLICT OF INTEREST POLICY
To safeguard transparency and fairness in all its corporate dealings, and at the same time to see to it that all transactions uphold the best
interest of the Company, all employees are required to dissociate themselves from any engagements that may compromise the Company’s
interests and should there be any appearance of conflicting interests, to disclose the same to the proper authorities in the Company.
DIRECTORS AND OFFICERS DEALING IN SHARES OF THE COMPANY

Insider Trading (Trading Block-outs)
PSC observes the insider-trading policy, which prohibits directors, officers, and employees from divulging material non-public
information to the damage of the Company and the investing public. The information is considered material if it will influence the
decision of a reasonable investor in deciding whether to buy, sell or hold the security. Covered persons are prohibited from trading
within five trading days before and within three trading days after the submission of structured and unstructured disclosures. Any
transaction done involving corporate shares must be reported to the Corporate Secretary within three calendar days from the
transaction day.
Shareholding of Directors and Key Officers as of December 31, 2018:
Beginning Indirect % to Total

Name Acquired2 Disposed2 Ending Balance3 Direct Holdings3
Balance1 Holdings3 Shares3
Mr. Jose T. Pardo 2 - - 2 2 0 0.00%
Mr. Jose Victor P. Paterno 16,472,569 - - 16,472,569 16,255,252 217,317 2.18%
Wen-Chi Wu 2 - - 2 2 0 0.00%
Jui-Tang Chen 2 - - 2 2 0 0.00%
Chi-Chang Lin 2 - - 2 2 0 0.00%
Lien-Tang Hsieh 2 - - 2 2 0 0.00%
Jui-Tien Huang 2 - - 2 2 0 0.00%
Maria Cristina P. Paterno 13,200,074 - - 13,200,074 13,200,074 0 1.74%
Jorge L. Araneta 2 - - 2 2 0 0.00%
Michael B. Zalamea 2 - - 2 2 0 0.00%
Antonio Jose U. Periquet, Jr. 1,650,012 500,000 150,010 2,000,002 2 2,000,000 0.26%
Atty. Evelyn S. Enriquez 5,895 - - 5,895 5,895 0 0.00%
TOTAL 31,328,566 500,000 150,010 31,678,556 29,461,239 2,217,317 4.19%
1
Based on Public Ownership Report submitted to PSE as of Dec. 31, 2017
2
Based on Beneficial Ownership Reports/Changes in Directors Shareholdings submitted to PSE/SEC as of Dec. 31, 2018
3
Based on Beneficial Ownership Reports/Changes in Directors Shareholdings submitted to PSE/SEC as of Dec. 31, 2018
RELATED PARTY TRANSACTION Corporate Governance Manual
The policy on RPTs ensures that all Company dealings are done The CG Manual of PSC provides for the Company’s overview of
at arm’s length basis, that is, these transactions are priced in such its governance structure to enhance the Company’s profitability
a manner similar to what independent parties would normally and sustainability for the benefit of its shareholders and
agree to. All transactions involving related parties require stakeholders in achieving its corporate mission. It aims to
disclosure in the audited financial statement. On the other hand, institutionalize the principles of corporate governance across all
all related suppliers are mandated to undergo accreditation and levels of the organization.
approval by the Procurement Resources Division. The Audit
and Risk Committee, chaired by an Independent Director, PSC’s framework of governance, responsibilities of the Board
assists the Board in reviewing RPTs to make sure that they are and the Company employees towards its shareholders, guided
consummated with only the best interest of the Company in by the principle of transparency, are outlined in the Manual.
mind.
External Auditors/ Non-Audit Services
Related Party Transactions, including transactions between
the parent company and its subsidiaries, between or among The CG Manual provides that external auditors are disallowed from
subsidiaries of a common parent, an enterprise or trust for the any non-audit work that will conflict with its duties and functions
benefit of employees, and between reporting enterprises and or that may pose a threat to its independence. The External
any or all of its principal owners are publicly disclosed in the Auditor should be rotated or changed every five years or earlier
Annual Report,Information Statement and the Audited Financial to maintain independence from the Company and must be duly
Statements, pursuant to the provision for Disclosure and accredited by the SEC, who shall undertake an independent audit
Transparency indicated in the Manual of Corporate Governance. of the Company and shall not provide any internal audit services.
Resignation or dismissal of the External Auditor must be reported in
the Company’s annual and current reports.

The Audit & Risk Committee also approves non-audit incidental expenses. The non-audit fees do not exceed the audit
engagements that will be taken by the firm to prevent conflicts services fees. The fees presented above include out-of-pocket
that will affect commercial interests. The Audit & Risk Comittee expenses incidental to PSC’s independent auditors’ work.
oversees the performance of its external auditor because they
remain to be an integral part of corporate governance that Increasing Focus on Non-Financial and Sustainability Reporting
makes management accountable to shareholders.
As provided in item 10 and 10.1 of the PSC’s CG Manual, the
During the years 2018 and 2017, the Company engaged the Corporation shall ensure that the material and reportable
professional services of SGV & Co. The Company incurred and non-financial and sustainability issues are disclosed. The
accrued an aggregate audit fee of P4.50 million in 2018 for the Corporation may set a policy on the disclosure of non-financial
said engagement. This covers the examination of the Company’s information, with emphasis on the management of economic,
financial statements in accordance with the Philippine Standards environmental, social and governance (EESG) issues of its
on Auditing (PSA). The auditors also provided a discussion of business, which underpin sustainability.
findings and recommendations that will further improve the
Company’s accounting and reporting practices. Further, SGV Economic
also provided updates on recent pronouncements made by the
BIR and the SEC. At the end of 2018, we have 2,550 7-Eleven convenience
stores, mainly in Metro Manila and in major towns and cities
External Auditors/ Non-Audit Services in Luzon. We penetrated the Visayas thru Cebu City in the
middle of 2012 and attained our long-term goal of serving
The CG Manual provides that external auditors are disallowed our customers in Mindanao via Davao City. At the end of the
from any non-audit work that will conflict with its duties and year, there were 1,965 7-Eleven stores in Luzon, 938 of which
functions or that may pose a threat to its independence. The are in Metro Manila, 365 in Visayas and 220 in Mindanao. Our
External Auditor should be rotated or changed every five years market development plan shall focus in the different parts of
or earlier to maintain independence from the Company and the country as we recognize the growing customer preference
must be duly accredited by the SEC, who shall undertake an towards innovation and convenience.
independent audit of the Company and shall not provide any
internal audit services. Resignation or dismissal of the External PSC considers the benefit of its shareholders as one of its
Auditor must be reported in the Company’s annual and current priority management policies. It aims to sustain revenue stream
reports. and progressive growth to further enhance shareholder value.
PSC shall continue to return capital to shareholders through
The Audit & Risk Committee also approves non-audit a sustainable dividend policy. The Company intends to pay at
engagements that will be taken by the firm to prevent conflicts least 20% of annual net profits by way of cash dividends. This
that will affect commercial interests. The Audit & Risk Comittee considers future capital requirements and potential growth
oversees the performance of its external auditor because they opportunities. The Board regularly reviews the dividend policy,
remain to be an integral part of corporate governance that including the frequency of distribution, taking into account all of
makes management accountable to shareholders. the above.
During the years 2018 and 2017, the Company engaged the Environment
professional services of SGV & Co. The Company incurred
and accrued an aggregate audit fee of PHP 4.50 million in To minimize its environmental footprint, PSC has taken steps
2018 for the said engagement. This covers the examination to employ materials and equipment contributing to energy
of the Company’s financial statements in accordance with conservation, water and waste disposal management. 7-Eleven
the Philippine Standards on Auditing (PSA). The auditors also stores use a combination of T5 and T8 LED lights and inverter
provided a discussion of findings and recommendations that air-conditioning units. The stores turn off the lights of its
will further improve the Company’s accounting and reporting signages at 6AM. Signages are then turned on automatically
practices. Further, SGV also provided updates on recent by sensors at 6PM. Aircon units are pre-set at 24-25 degrees
pronouncements made by the BIR and the SEC. Celsius and only 1 of the 2 units are used during the graveyard
shift. PSC also collaborates with utilities providers to achieve
External Auditor’s Fees better energy efficiency based on each store’s requirements.
Water provided for Postmix and bubbler machines are filtered
using UltraViolet (UV) Water Purification Systems to ensure that
2018 2017
(in millions) (in millions) the water used for its products are clean and safe. The stores
have a target minimum power and water consumption key
Audit Fees
₱ 4.50 ₱ 3.90 performance indicator to incentivize store personnel to practice
Tax Fees conservation.
1.09 1.37
All Other Fees Compliant with regulations, PSC uses paper bags and
1.17 .78
biodegradable plastics as containers for items that customers
Total purchase from the store. In addition, the containers of its food
₱ 6.76 ₱ 6.05
service products are made using food-grade and biodegradable
Tax fees as reflected above refers to tax compliance, advisory materials. PSC also encourages the segregation of waste as
services and assistance on BIR examination rendered by tax biodegradable and non-biodegradable by providing labeled
lawyers and consultancy firm. All Other Fees consists primarily trash bins.
of fees for consultations and special engagements relating to
the issuance of long-form audit report and securing documents, PSC also has a non-smoking policy and posted No Smoking
which are required for the payment of dividends and other signs inside its stores to ensure air quality within its premises.
PSC also fully complied with the requirements of Executive

Order 26 and extended its non-smoking policy to the area outside its premises as defined by the EO and posted “No Smoking” signs
outside the store. Stores have also removed all cigarette receptacles from its trash bins located outside the stores.
Social
PSC has also been active in its global environment campaign through its CSR arm, PhilSeven Foundation Inc. (PFI). PFI cooperated
with the Philippine Business for Social Progress to hold simultaneous tree planting activities in Luzon and Visayas. This project
promotes both reforestation and livelihood and is aligned with PSC’s Go Green initiative. Marking the 3rd year of PSC’s partnership
with Philippine Business for Social Projects (PBSP), a total of 84 employees planted 1,000 trees in the Marikina Watershed last July 13,
2018.The stores also participate in Earth Hour and turns off its signage lights for one hour. Other environmental and social programs
of PSC are discussed under the CSR section of this Annual Report Book.
PSC is always pushing for voter awareness during national elections.For the past two national elections, it has been running its
7-Election promotion. This campaign promotes voter awareness and encourages its customers to vote. The promotion allows for an
informal poll where customers can “vote” for the president of their choice by buying GULP cups featuring the presidential candidates.
Through this campaign, PSC was able to engage and bring the community together, with a total of 2.79 million GULP votes cast. Aside
from being well-received and covered by different media channels, 7-Election received four awards from various advertising award
entities.
PSC is also active in hosting events that promote health and wellness such as 7-Eleven Run 2018 held last February 4, 2018 and
7-Eleven Trail 2018 held last February 18, 2018.
MEDIA ANALYST AND BRIEFINGS

Company Website
In compliance with SEC Memorandum Circular 11-2014, PSC through its website provides links of all disclosures submitted to SEC
and PSE along with information that is vital to investors, shareholders, and stakeholders. To constantly develop consciousness in the
conduct of the Company’s best governance practices, a separate link is provided for Corporate Governance, Company Disclosures, and
Investor Relations.
Company Website Links
Information
Business Operation
http://www.7-eleven.com.ph/about/
Financial Statements
https://www.7-eleven.com.ph/corporate/company-disclosures/sec-filings/annual-reports/
Shareholding Structure
https://www.7-eleven.com.ph/corporate/our-company/shareholding-structure/
Group Corporate Structure

https://www.7-eleven.com.ph/corporate/our-company/conglomerate-map/
Downloadable Annual Reports

https://www.7-eleven.com.ph/corporate/company-disclosures/sec-filings/annual-reports/
Notice of ASM
https://www.7-eleven.com.ph/corporate/company-disclosures/notice-of-annual-or-special-stockholders-meetings/
Minutes of ASM
https://www.7-eleven.com.ph/corporate/company-disclosures/minutes-of-annual-meeting-of-stockholders/
Company’s By-Laws and Articles of

Incorporation https://www.7-eleven.com.ph/corporate/our-company/articles-of-incorporation-and-by-laws/
III. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

INTERNAL CONTROL SYSTEM
Internal Audit group is governed by its Internal Audit Charter, which is in line with the functions and responsibilities as stated in
the CG Manual and the Audit and Risk Committee Charter. Internal Audit reports functionally to the Audit and Risk Committee,
and administratively, to the President. Based on the Internal Audit plans and scope, the audit activities conducted is reviewed and
submitted regularly by the Internal Audit group to the Audit and Risk Committee during Audit and Risk Committee meetings. The
internal control system is reviewed annually.
As stated in the Report of the Audit and Risk Committee to the Board of Directors, “the Audit and Risk Committee oversees the
Company’s financial reporting process on behalf of the Board of Directors. The Company’s management has the primary responsibility
for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of
internal control over financial reporting.”

INTERNAL AUDIT It establishes, among others, a mechanism for close
coordination between concerned departments in the
The purpose of PSC’s Internal Audit is to provide independent preparation, publication, and submission of the said reports and
and objective assurance and consulting services designed to add other disclosures of vital corporate information. The Compliance
value and improve the Company’s operations. The mission of Policy is reviewed on an annual basis.
Internal Audit is to enhance and protect organizational value by
providing risk-based and objective assurance, advice, and insight. COMPLIANCE WITH THE DATA PRIVACY ACT
The internal audit activity helps PSC accomplish its objectives by
bringing a systematic and disciplined approach to evaluate and Republic Act No. 10173, also known as the Data Privacy Act of
improve the effectiveness of governance, risk management, and 2012 (DPA) and its implementing rules and regulations, aims
control processes. to protect personal data information and communications
systems against natural accident dangers such as accidental
RISK MANAGEMENT loss or destruction, and human dangers such as unlawful
access, fraudulent misuse, unlawful destruction, alteration, and
Risk Management is institutionalized for the Corporation contamination.
to promote good corporate governance and fulfill its long-
term success by addressing risks that could affect corporate In compliance with the law, PSC shall ensure that the required
sustainability. PSC manages the economic, environmental, and organizational, physical, and technical measures are in place to
social risks by establishing risk management processes and comply with the requirements of the law.
frameworks to effectively handle such risks in order to improve
overall organizational performance. IV. CULTIVATING A SYNERGIC RELATIONSHIP
The top risks in the retail industry to which PSC belongs WITH SHAREHOLDERS
include increased competition, brand reputation, and business
operations/supply chain continuity. Meanwhile, the main risks BASIC SHAREHOLDER’S RIGHT
arising from the Company’s financial instruments are credit risk,
liquidity risk, and interest rate risk. The Audit Committee ensures Right to Dividends
the integrity of internal control activities, develops, oversees,
checks, and pre-approves financial management functions and Dividend Policy
systems in the areas of credit, market, liquidity, operational,
legal and other risks, and crisis management. The Internal Audit PSC considers the benefit of its shareholders as one of its
Division and the External Auditor directly report to the Audit & priority management policies. It aims to sustain revenue stream
Risk Committee regarding the direction, scope, and coordination and progressive growth to further enhance shareholder value.
of audit and any related activities. PSC shall continue to return capital to shareholders through
a sustainable dividend policy. Effective 2015, the Company
The PSC Board of Directors or Executive Committee, via the intends to pay at least 20% of annual net profits by way of
Audit and Risk Committee, oversee the establishment and cash dividends. This considers future capital requirements and
implementation of the risk management system and annually potential growth opportunities. The Board regularly reviews the
reviews the effectiveness of the system. In particular, the Audit dividend policy, including the frequency of distribution, taking
and Risk Committee considers on a regular basis whether: into account all of the above. Payment of cash dividends were
• PSC’s ongoing risk management program identifies all made within 30 days from the date of declaration and approval
material and critical areas of risk by stockholders of record. Below is a table summarizing the
• Adequate risk mitigation strategies have been designed and dividends declared and paid for the last two years.
implemented by PSC to manage all material and critical
identified risks A cash dividend of PHP 0.43 per share was declared and
• PSC undertakes a regular program of audits (Internal approved during the Board of Directors Meeting last July 19,
Audit, Compliance Audit and External Audit) to test the 2018. Stockholders of record as of August 7, 2018 were entitled
effectiveness of internal controls and compliance with PSC’s to said cash dividend and the corresponding cash payments
prescribed policies were paid to stockholders on the payment date last August 17,
• Timely remedial action is undertaken to redress areas of 2018, or within 30 days from cash dividend declaration.
weakness
Total outstanding capital stock of the Corporation is 756,418,283.
The Audit and Risk Committee also reviews and approves PSC’s Likewise, there was no sale of any unregistered securities. There
risk management policy. is no restriction that limits the ability of the Company to pay
dividends on common equity. Below is the summary of cash and
COMPLIANCE WITH RECENT RULES AND stock dividend declaration of the Corporation.
REGULATIONS 2018 and 2017 Cash Dividend Declarations
DECLARATION DATE OF
PSC values transparency and fully discloses to its shareholders DATE PAYMENT
CASH AMOUNT
and other stakeholders valuable information relevant to
July 19, 2018 August 7, 2018 0.43 325,259,862.00
the Corporation’s financial condition, results and business
operations, as well as its compliance with ethical and legal June 16, 2017 July 14, 2017 0.65 297,982,960.00
standards. Thus, PSC’s Board established the Reportorial
2017 Stock Dividend Declaration
Compliance Policy. It seeks to ensure that reportorial compliance
reports required by the SEC, PSE, and other regulatory agencies DECLARATION DATE OF
CASH AMOUNT
are submitted on-time for eventual disclosure for the benefit of DATE PAYMENT
the investing public. June 16, 2017 December 14, 2017 65% 297,982,960

Right to Participate in Decisions b. In case of sale, lease, exchange, transfer, mortgage,
pledge or other disposition of all or substantially all of the
PSC upholds the rights of its shareholders to approve matters corporate property and assets as provided in this Code.
requiring stockholders’ action, as provided for by law. In addition,
Section 48 of PSC’s amended By-laws provide that the approval c. In case of merger or consolidation.
of the Board of Directors by at least a two-thirds vote of the
number of directors, as fixed in the Articles of Incorporation d. In case of investment of corporate funds for any purpose
of the Corporation and the approval of the stockholders of other than the primary purpose of the corporation.
the corporation, representing two-thirds of the issued and
outstanding capital stock of the Corporation shall be required for The dissenting stockholder who votes against a proposed
the following corporate acts: corporate action may exercise the right of appraisal by making
1. Revision and amendment and/or repeal of any of the a written demand to the Corporation for the payment of the
provisions of the Area Service and License Agreement fair value of shares held within 30 days from the date on which
(ASLA) between the Corporation and The Southland the vote was taken, provided, that failure to make the demand
Corporation within such period shall be deemed a waiver of the appraisal
2. Shortening of the term, cancellation or termination of the right.
ASLA, or the assignment, transfer or conveyance thereof
3. Engaging in business other than the Corporation’s basic business If the proposed corporate action is implemented, the
of convenience stores operation, which would generate more Corporation shall pay the stockholder, upon surrender of the
than 30% of the Corporation’s revenue and income certificate or certificates of stock representing the stockholder’s
4. Change in external auditors shares, the fair value thereof as of the day before the vote was
taken, excluding any appreciation or depreciation in anticipation
Right to Participate Effectively and Vote of such corporate action.
The Company facilitates involvement of shareholders to actively If, within 60 days from the approval of the corporate action
participate during the ASM, which includes nomination and by the stockholders, the withdrawing stockholder and the
voting procedures. corporation cannot agree on the fair value of the shares, it shall
be determined and appraised by three disinterested persons,
For the election of directors, shareholders entitled to vote shall one of whom shall be named by the stockholder, another by
vote cumulatively to elect the 11 Directors of PSC,and each share the corporation, and the third by the two. The findings of the
shall be entitled to 11 votes. Holders of the Company’s stock as majority of the appraisers shall be final, and their award shall
of the close of business on record date of June 6, 2018, acting be paid by the Corporation within 30 days after such award
in person or by proxy, were entitled to notice and to vote during is made; Provided, that no payment shall be made to any
the Annual Meeting held last July 19, 2018. As such, there were dissenting stockholder unless the Corporation has unrestricted
756, 418, 283 shares of PSC’s common stock entitled to vote for retained earnings in its books to cover such payment; Provided,
the election of directors. further, that upon payment by the Corporation of the agreed or
awarded price, the stockholder shall forthwith transfer the shares
The shareholders entitled to vote were entitled to one vote for to the corporation.
each share, for the purpose of approving other matters set forth
in the Agenda of the Annual Meeting. Pre-emptive Right
Shareholders are likewise entitled to vote for the following: All stockholders have the pre-emptive right to subscribe to all
1) Election of Directors, 2) Approval of Minutes of the Last issues or disposition of shares of any class, in proportion to their
Stockholders’ Meeting, 3) Approval of the Annual Report and respective shareholdings, unless such a right is denied by the
Audited Financial Statements, 4) Ratification of All Corporate articles of incorporation or an amendment thereto.
Acts, and 5) Appointment of the external auditor.
Right to Information
Right of Appraisal
Accurate and timely information should be made available to the
The stockholders of the Company may exercise their right of stockholders to enable them to make a sound judgment on all
appraisal against any proposed corporate action, which qualifies matters brought to their attention for consideration or approval.
as an instance under Section 80 of the Revised Corporation
Code, which gives rise to the exercise of such appraisal rights Right to inspect corporate books and records
pursuant to, and in the manner provided in Section 81 of the
Revised Corporation Code. The records of all business transactions, stock and transfer
books, and minutes of any meetings shall be open to inspection
Any stockholder of a corporation shall have the right to by any stockholder of the Corporation at reasonable hours on
dissent and demand payment of the fair value of the shares in business days and he/she may demand, in writing, for a copy of
the following instances: excerpts from said records or minutes, at his/her expense.
a. In case an amendment to the articles of incorporation

has the effect of changing or restricting the rights of any
stockholder 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.

ANNUAL STOCKHOLDERS MEETING Treatment of Minority Shareholders
Notice of ASM PSC values its minority shareholders. Thus, it is the duty of
the Board to promote the rights of the shareholders, remove
The CG Manual provides that the Board must be transparent impediments to the exercise of those rights, and provide an
and fair in the conduct of the annual and special stockholders’ adequate avenue for them to seek timely redress when there is
meetings. Notices were provided containing the date, time, a breach of their rights. Accurate and timely information should
venue, agenda, and explanation of agenda items. Notices were be made available to enable them to make a sound judgment
given to shareholders through PSE EDGE on June 13, 2018, or at on all matters brought to their attention for consideration or
least 36 business days prior to the holding of the ASM on July 19, approval.
2018.
PSC’s corporate governance framework ensures that minority
Stockholders are encouraged to personally attend. However, if shareholders are accorded with equitable treatment. A minority
they cannot attend, they should be appraised ahead of time of shareholder’s rights are safeguarded by the Board through
their right to appoint a proxy, subject to the requirements of the effective means of redress in the event of a breach or violation
by-laws. The exercise of that right shall not be unduly restricted of their rights arises. The Board is to provide a transparent,
and any doubt to the validity of a proxy should be resolved in credible, and timely reporting of the business management to
the stockholder’s favor. such stockholders.
Minutes of the Meeting V. DUTIES TO STAKEHOLDERS
The following are the resolutions adopted during the 2018 It is PSC’s commitment to support and enhance long-term
Annual Stockholders’ Meeting: 1. Approval of Minutes of the sustainability for its stakeholders, recognizing their crucial role
last Annual Stockholders Meeting; 2. Approval of 2017 Audited to strengthen the Company. Thus, PSC integrates governance
Financial Statements; 3. Ratification of Actions Taken by the policies to fulfill their duties and responsibilities to their
Board of Directors, Executive Committee, Board Committees, stakeholders. PSC abides by the mandatory laws, rules, and
and Management since the last Annual Stockholders Meeting; 4. policies that will govern them in the fulfillment of their duties
Election of the Board of Directors for 2018; and 5. Appointment and responsibility to its stakeholders.
of External Auditor.
CUSTOMERS
Investor Relations
Customer loyalty is a vital component to sustain the
PSC gives importance to nurturing the relations between the business,this is why PSC is committed to deliver quality and
Company and its market participants, thus, PSC established excellent customer service. In maintaining a stable long-term
the Investor Relations Program. This provides an effective tool relationship with its customers, the Company continuously
to communicate the latest developments and information innovates its in-house brands and products by being responsive
regarding the Company’s performance in relation to the capital to customer needs and latest trends.
markets and its relevance to PSC’s investors and their advisors.
For 2018, PSC introduced an assortment of new products
The program is guided by the external and internal including the new Fundae flavors (Halo-halo and Ube) and
communication policies, developed and approved by the rebranded the chicken meals as “Crunch Time”. It had several
Executive Committee. These policies are reviewed regularly or promotions such as the rock back to school combo and the
when the need for such arises. Moneygayang Pasko promo. In furtherance of the digital
strategy, PSC also introduced promos to expand the base of its
PSC’s Investor Relations Officer (IRO), Mr. Lawrence M. De Leon, CLIQQ and E-Wallet users.
Head of Finance and Accounting Services Division, is duty
bound to constantly communicate with investors regarding Customer concerns may relay their questions, concerns or
developments in the Company’s business. The Company comments through PSC’s customer service hotline, e-mail
conducts various meetings with shareholders, aside from address which is customercare@7-eleven.com.ph or its website
communications through conferences and e-mails, which www.7-eleven.com.ph
is done on a regular basis. An external public relations firm
is likewise committed to communicate other aspects of the PSC’s policy on rendering customer service requires all store
business. employees to provide customer service based on the standards
set in the store operations manual. The policy provides for
To further boost the communication process to shareholders sanction and disciplinary actions in case an employee does not
and investors, PSC’s website includes updates on all necessary comply with the requirements in the manual.
information, disclosures, and reports required by SEC to
strengthen integrity, teamwork, and reliability, and to maintain To improve its service, PSC also utilizes the services of a third
the trust and confidence of its shareholders and investors. party to conduct a “mystery shopper” survey to evaluate its
Contact details of the IRO are provided on the website to allow performance in different areas including Customer Service.
for immediate response to inquiries or questions.
PSC’s efforts to improve its customer service did not go
PSC regularly conducts an investor’s briefing through unnoticed. In 2018, PSC Stores became the recipient of the
teleconference. A presentation on financial performance is Department of Trade & Industry’s (DTI) Golden Seal “Bagwis”
discussed, followed by a Question and Answer session. Awards. DTI Bagwis is a “Certified Establishment Program (Bagwis
Awards) that aims to promote and foster the highest level of
business ethics and uphold a fair and honest marketplace through
voluntary self-regulation and service excellence.“
CREDITORS
Acknowledging the role of creditors in the growth and development of PSC, the Company and its employees are required to equip
themselves with integrity in all their business dealings as provided in the Code of Conduct and Business Ethics and Core Values.
With utmost respect to the rights of its creditors, PSC upholds transparency in all its disclosures and gives full compliance with all
agreements.
PSC maintains a credit line with banks and suppliers which we do not fully utilize as our Capital Expenditure (CAPEX) is supported
mainly through internally generated funds.
To further protect its creditors, PSC also maintains transparency regarding its corporate acts through timely disclosures to regulatory
bodies. Through its Reportorial Compliance Policy which took effect last January 1, 2014, PSC ensures that reportorial compliance
reports required by the Securities and Exchange Commission, Philippine Stock Exchange (PSE) and other regulatory agencies are
submitted on time for eventual disclosure for the benefit of the investing public. It establishes among others a mechanism for close
coordination between concerned departments in the preparation, publication and submission of the said reports and other disclosures
of vital corporate information.
SUPPLIERS
PSC gives high importance towards its relationship to its business partners. Through their good practices in business dealings, the
Company was able to expand and continuously expanding around the country.
Trade and non-trade suppliers may submit accreditation requirements based on the guidelines provided in its website.PSC takes into
consideration the qualifications of its suppliers and other trading counterparts in accordance to the policy guidelines of the Company
under its accreditation process and trading terms agreements. All contracts with suppliers provide a clause for observance of no
conflict of interest.
To ensure that only the best and quality products are offered, products regularly undergo quality assessment. A standard selection
process is implemented, such as accreditation valid for one year, to determine that the suppliers are aligned with PSC’s strategic
goals and objectives. PSC conducts ocular inspections and certification of PSC of suppliers’ production process and facilities with
the quality assurance guidelines set by the Food and Drug Administration of the Philippines. Its commissaries comply with the Good
Manufacturing Practices (GMP) standards, while some are even ISO certified.
EMPLOYEES
Employees can protect their individual rights and interests as well as those of the Company, as governed by the Employees Code
of Discipline relating to their job conduct. Violations thereof shall be dealt with accordingly. In addition, a Whistle Blowing Policy
was created as a channel to report incidences of misconduct which could lead to future damage to the Company. Reports are then
investigated to validate their authenticity.
THE COMMUNITY
Operating the largest convenience store network in the country, PSC has the capability to help in sustaining communities in the
Philippines. Corporate Social Responsibility (CSR) became part of PSC’s corporate culture once the Company achieved accounting
profitability in 1989 through the institution of Philseven Foundation Inc., (PFI). The initial beneficiaries of PFI were barangays where its
stores are located, giving back to the community where it operates. PSC, through PFI, aims to make a difference in these communities
through various programs as provided below.
2018 PFI Projects
Initiative Beneficiary
1. Gulong ng Karunungan Project, a learning school on wheels that

Children ages 2 to 17 years old
caters to out of school children and youth
2. Every Day! Play Project , a community playground Indigent communities preferably with a large population and
(Donation of outdoor play equipment for community use) available government owned space
Deserving undergraduate PSC employees who are financially

3. Scholarship Program
constrained but wish to finish academic education

The Company intends to continue these programs with priority given to education, health, and nutrition. Beneficiaries are usually
children from poorer families, as part of PSC’s advocacy of giving back to the communities where 7-Eleven stores are located. To know
more about PFI’s activities, please refer to the Corporate Social Responsibility page of this book, “Corporate Social Responsibility
Highlights” and their website http://www.philseven.com.
Because of these efforts, PSC was honored by the Department of Social Welfare and Development (DSWD) with the Salamat
Po award, recognizing PSC as Development Partner in the Corporate Institution Category. The award was given to PSC during the
celebration of DSWD’s 67th Founding anniversary on March 8, 2018.
PFI has also been recognized with the PaNataKo sa Bayan (PANATA) Award for Best Volunteer by the DSWD for its efforts to reach out
to the community.
PFI is also the beneficiary of PSC’s annual events, 7-Eleven Run Series and 7-Eleven Trail Series, as part of the event proceeds are donated.
EFFECTIVE REDRESS OF STAKEHOLDERS’ WHISTLEBLOWING POLICY

GRIEVANCES
To uphold and promote ethical behavior and sound business
The Company provides contact details via the company’s practices, PSC directors, officers, employees, and suppliers can
website, which stakeholders can use to voice their complaints or report any perceived illegal activities through a whistle-blowing
give feedback on franchising, vendor requests, investor relations, mechanism. All whistle-blowing reports received by PSC will be
shareholder assistance and services, whistleblowing, and other reviewed for appropriate action, determining whether the Code
concerns. of Conduct and Business Ethics and other related policies and
procedures were violated. An independent committee, known as
the Committee on Conduct, is tasked to handle reports of such
PERFORMANCE-ENHANCING MECHANISMS
violations.
FOR EMPLOYEE PARTICIPATION
The policy assures that the whistle-blowers are accorded
Recognizing employees’ needs for growth, training and protection, respecting the confidentiality of the information
development programs are regularly provided by PSC across and their identities. Thus, illegal/unethical conduct shall be
all levels. For Senior Management and Officers, the Company reported in writing, either anonymously or otherwise, depending
conducts a Leadership Academy and Mentor’s Leadership on the whistle-blower’s discretion. Modes of reporting may
Training Program, in line with the Company’s succession be through a letter, e-mail, or other means established by the
planning program. In-house training on leadership skills, Company. All reports are treated with utmost confidentiality. To
products, basic negotiation, change management, retailer report an incident, any person may access the PSC Website and
initiatives, and basic operating and quality assurance procedures accomplish the form through this link: http://www.7-eleven.
are also provided by the Company to employees. These are com.ph/corporate/corporate-governance-head/whistle-
offered periodically based on the annual training calendar, blowing/. Reports may also be submitted to whistleblowing@7-
monthly or quarterly. In-house trainings are designed to eleven.com.ph. The Committee on Conduct shall review the
augment and develop the employees’ skills and competencies. report of the whistle-blower and shall evaluate the merits of
the complaint according to circumstances, time of reporting,
ANTI-CORRUPTION PROGRAMS evidence, and violation of procedures and policies. The whistle-
AND POLICIES blower shall be informed of the decision of the Committee.
Appropriate action shall be taken against the persons found to
have committed any illegal/unethical conduct. PSC provides
PSC’s Code of Business Conduct and Ethics was drafted to
appropriate protection from retaliation as provided in this policy
strengthen its commitment towards corporate governance and
and in PSC’s Employee’s Handbook.
to provide thorough guidelines for employees. In this regard, it
developed policies on the following to uphold ethics in business
dealings and transactions: 1) Limitations on Participation
in Company Sales Promotions, 2) Conflict of Interest, 3)
Employment, Placement, and Transfer of Relatives, 4) Foreign
and Local Business Travel, 5) Employee Promotion for Section
Managers and Above, and 6) Whistle-blowing. With these
policies set in place, employees are informed and required to
follow the rules and regulations, both from the government
and from the Company, and to steer clear from any covert or
overt acts of bribery. They are also advised to avoid solicitation
and acceptance of gifts of high value (usually PHP 2000 up)
from business partners and/or suppliers. Rules and guidelines
in granting travel allowance and/or reimbursement of expenses
incurred for official business trips made locally or abroad are also
provided. Promotion of employees to Section Managers and
above is also standardized. In addition, a Whistle-blowing Policy
was set up to provide channels for reporting of violations of the
Code of Conduct and Business Ethics and the mechanism for its
investigation and appropriate action. PSC is also a signatory for
the Integrity Pact and a participant in Integrity Summit Fora.

AUDIT AND RISK COMMITEE
REPORT
PHILIPPINE SEVEN CORPORATION
Report of the Audit and Risk Committee to the Board of Directors
Further to our compliance with applicable corporate governance laws and rules, we confirm for the year 2018 that:
1. An independent director chairs the Audit & Risk Committee, three (3) out of the four members of the Committee are
independent directors.
2. The Committee had two (2) meetings during the year. The meetings of the Committee are designed to facilitate
and encourage communication among the Committee, the Company, the Company’s internal audit function and the
Company’s independent auditor. The Committee in its meetings, reviewed and approved all audit and review services
provided by external auditor, SGV & Co., to PSC, and the related fees for such services;
3. According to its charter, the primary purpose of the Committee is to assist the Board of Directors in fulfilling its oversight
responsibility for the financial reporting process, the system of internal control, the maintenance of an effective audit
process, and monitoring of compliance with applicable legal and regulatory matters.
4. The Committee provides oversight over Management’s activities in managing credit, market, liquidity, operational, legal
and other risks of the Corporation. This function shall include regular receipt from Management of information on risk
exposures and risk management activities. The Committee also monitors and evaluates the adequacy and effectiveness
of the Corporation’s internal control system, including financial reporting control and information technology security.
5. The Audit & Risk Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. The
Company’s management has the primary responsibility for the financial statements, for maintaining effective internal
control over financial reporting, and for assessing the effectiveness of internal control over financial reporting.
6. The Committee discussed with SGV & Co. all the items required to be discussed by the prevailing applicable Auditing
Standard, including the required communications to the Audit and Risk Committee on the responsibilities under
Philippine Standards in Auditing, the confirmation of independence of SGV & Co. from PSC and its subsidiaries and PSC’s
management as required by the applicable Independence Standards (Statement of Independence), and fraud inquiry
which SGV & Co. confirmed that it is not aware of any matters that require communication;
7. As part of its oversight responsibilities, the Committee reviewed and discussed the audited financial statements of PSC
and the consolidated audited financial statements of PSC and its subsidiaries as of and for the year ended December
31, 2018 with the PSC’s management and with SGV. SGV has expressed its opinion on PSC’s conformity with Philippine
Financial Reporting Standards (PFRS);
8. Based on the foregoing but subject to the limitations of the Committee’s role as encompassed in our Audit & Risk
Committee Charter, the Committee recommended for approval the audited financial statements of PSC and the
consolidated audited financial statements of PSC and its subsidiaries for the year ended December 31, 2018 to the
Executive Committee and/or the Board of Directors. The Executive Committee, having authority to act during intervals of
Board meetings, approved the same.
ANTONIO JOSE U. PERIQUET, JR. JOSE T. PARDO MICHAEL B. ZALAMEA JOSE VICTOR P. PATERNO
Chairman and Member, Chairman of the Member Member
Independent Director Board and Independent and Independent Director and Director/President
Director

EXCERPTS OF
FINANCIAL STATEMENTS
PHILIPPINE SEVEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Please refer to the companion book for the complete set of the 2018 Audited Financial Statements

PHILIPPINE SEVEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Please refer to the companion book for the complete set of the 2018 Audited Financial Statements

7-ELEVEN STORES
WORLDWIDE
Stores 2018 2017 2016
7-Eleven Inc. 9,573 8,670 8,702
Hawaii 64 64 63
Mexico 1,801 1,835 1,878
North America Totals/Averages 11,438 10,569 10,648
Denmark 174 183 187
Norway 149 153 155
Sweden 146 187 183
Europe Totals/Averages 469 523 525
Australia 692 675 646
Beijing 266 247 219
Chengdu 77 87 67
Chongqing 63 47 35
Hong Kong 959 938 937
Japan 20,700 19,979 19,171
Korea 9,400 9,231 8,556
Macau 51 49 49
Malaysia 2,287 2,225 2,122
Philippines 2,550 2,285 1,995
Qingdao 67 55 38
Shanghai 118 118 102
Singapore 393 393 417
South China 1,074 920 828
Taiwan 5,369 5,221 5,107
Thailand 10,988 10,268 9,542
Tianjin 155 118 82
Asia Totals/Averages 55,209 52,856 49,913
Totals/Averages 67,116 63,948 61,086

CORPORATE
INFORMATION
CORPORATE HEADQUARTERS 7th, 11th, and 12th Floors, The Columbia Tower
Ortigas Avenue, Mandaluyong City 1550
Tel #: +632 724-4441 to 53
CEBU OFFICE 7th Floor Trends Plaza Building

F. Ramos St., Cebu City
Tel #: +6332 253-7963 loc. 109
MINDANAO OFFICE 2nd Floor, Sumo Asia Hotel

Mamay Road, Davao City
Tel #: +6382 321-2834
INVESTOR RELATIONS Lawrence M. De Leon

Email: investor-relations@7-eleven.com.ph
Tel #: +632 705-5242
PRINCIPAL BANKER Bank of the Philippine Islands
AUDITORS Sycip Gorres Velayo & Company
STOCK TRANSFER AGENT BDO Unibank, Inc. - Trust and Investments Group (BDO)
15th Floor, South Tower, BDO Corporate Center
7899 Makati Avenue, Makati City, Philippines 0726
Email: bdo-stock-transfer@bdo.com.ph
Tel # : +632 840-7000
EMAIL Shareholder Services: psc-corp@7-eleven.com.ph

Customer Care: customercare@7-eleven.com.ph
Franchise Opportunities: franchising@7-eleven.com.ph
Employment Opportunities: hrd@7-eleven.com.ph
Investor Relations: investor-relations@7-eleven.com.ph
WEBSITE www.7-eleven.com.ph
CONTACT US Customer Care: (02) 711-0-711, 0919-0-711-711

Franchise Opportunities: 0917-8711686, 0920-9508651
and 726-9968
Employment Opportunities: 705-5200 loc 270 & 272
Shareholder Services: psc-corp@7-eleven.com.ph
Investor Relations: investor-relations@7-eleven.com.ph
SOCIAL MEDIA ACCOUNTS www.facebook.com/711philippines

@711ph
@711philippines

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TABLE OF CONTENTS

Vision, Mission, Core Values 01

ABOUT THE COVER

MISSION To make daily life easier by providing

ANNUAL REPORT 2018

System-wide Sales 46,128,724 37,530,753 31,756,480

Revenues 43,770,478 35,391,848 31,269,129

AT YEAR-END 2018 2017 2016

Stores in Operation Revenues 2,550 2,285 1,995

Total Assets 17,402,648 14,359,857 12,351,256

Total Liabilities 10,327,782 8,332,357 7,309,624

Stockholder's Equity 7,074,865 6,027,499 5,041,632

Current Ratio (x) 0.97 0.91 0.83

Debt-to-Equity Ratio 1.46 1.38 1.45

PER SHARE DATA 2018 2017 2016

2.03 1.74 1.55

9.35 7.97 6.67

FINANCIAL RATIOS STOCK PRICE

2 BACK TO BASICS, INNOVATING FORWARD

Current Assets 8,988,630 39.4% 20.0%

Noncurrent Assets 8,414,018 6.4% 13.4%

Total Assets 17,402,648 21.2% 16.3%

Current Liabilities 9,252,672 30.1% 9.8%

Total Liabilities 10,327,782 23.9% 14.0%

Stockholder's Equity 7,074,865 17.4% 19.6%

Book Value Per Share 9.35 17.4% 19.6%

7,074,865 6,027,499 5,041,632

2018 17,402,648 2017 14,359,857 2016

10,327,782 8,332,357 7,309,624 12,351,256

Total Total Stockholder's

INCOME STATEMENT HIGHLIGHTS

Gross Profit 15,859,295

Revenues 43,770,478 23.7% 13.2%

Cost of sales 27,911,183 24.9% 10.4% System-Wide Sales 37,530,753

Net Income 1,317,870

Income Before Income Tax 2,213,308 15.5% 12.0% 2016

Gross Profit 11,023,476

ANNUAL REPORT 2018 3

To Our Valued Shareholders,

We opened 265 new 7-Eleven stores, ending 2018

The country’s GDP grew 6.2% and firmed up its

Moreover, our global licensor, 7-Eleven, Inc. (SEI), has also

ANNUAL REPORT 2018 5

Dear Fellow Shareholders,

6 BACK TO BASICS, INNOVATING FORWARD

We invested in our digital infrastructure over the years with

We sharply increased investment in this digital infrastructure

While both the wallet and e-commerce businesses are expected

In summary, though regulatory tailwinds blew in the industry’s

In closing, we would like to thank all our stakeholders for their

Very truly yours,

JOSE VICTOR P. PATERNO

ANNUAL REPORT 2018 7

7-Eleven opens three new concept

8 BACK TO BASICS, INNOVATING FORWARD

CLiQQ app hits over 1M

PSC wins big at 7-Eleven

ANNUAL REPORT 2018 9

As part of our mission

Toward expanding our core products, we are looking at rolling out

Digital: Launch of Workplace at PSC

The project saw a 6.2%