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Corporate Governance Report

2018 Corporate Governance Highlights

GT Capital Holdings, Inc. (“GT Capital” or the “Corporation”, and together with its subsidiaries, the “Group”) aims to achieve a solid track record in corporate governance in the Philippines and in the Association of Southeast Asian Nations ("ASEAN") Region. In pursuit of its goal and in order to maintain the trust and respect of its stakeholders, GT Capital gives utmost importance to its policies and practices that implement and imbibe the spirit of the principles outlined in the SEC Revised Code of Corporate Governance, the G20/OECD Principles of Corporate Governance, Association of Southeast Asian Nations (“ASEAN”) Corporate Governance Scorecard, and the Philippine Stock Exchange, Inc. (“PSE”) Corporate Governance Guidelines.

GT Capital’s efforts and commitment to raise its level of corporate governance has garnered recognition in the investment community. This affirms the Corporation’s standing as one of the top 50 publicly-listed companies (“PLCs”) in corporate governance in the ASEAN region and one of the two most improved PLCs in the Philippines awarded by the ASEAN Capital Markets Forum in 2015.

As part of its ongoing improvement in corporate governance, GT Capital initiated the following best practices in 2018:

1.  Engagement of a third-party assessor to evaluate GT Capital's officers and employees to assume more challenging roles in the Corporation pursuant to the Corporation's succession planning initiative;

2.  Establishment of a mentoring program for junior officers in relation to the Corporation's succession planning initiative;

3.  Launch of Sustainability Reporting Initiative and holding of sustainability Workshop for GT Capital officers, employees, and representatives from subsidiaries and affiliates;

4.  Creation of Working Technical Group on Sutainability Reporting that met regularly to discuss the Corporation's Sustainability Report Initiative;

5.  Conduct of stakeholder consultation process pursuant to GT Capitla's Sustainability  Reporting Initiative;

6.  Improvement of President's Assessment Form amd Director, Board and Committee Self-Assessment Forms;

7.  Establishment of materiality threshold for related party transactions;

8.  Ensuring compliance with the Data Privacy ACt including registration of its data processing systems and creation of a Data Privacy Manual based on the results of the Privacy Impact Assessment; and

9. Inclusion in the board agenda of reports of committees with critical issues.

 

2018 Compliance

GT Capital is fully compliant with the Revised Code of Corporate Governance as well as with all pertinent laws, rules and regulations imposed in the conduct of its business.

As a PLC, GT Capital acknowledges its duty and responsibility to provide timely and accurate information to the investing public. To this end, GT Capital strictly complies with all reportorial and disclosure requirements imposed by regulatory agencies such as the Securities and Exchange Commission (“SEC”), the Philippine Stock Exchange (“PSE”), and the Philippine Dealing and Exchange Corporation. GT Capital likewise ensures the posting of all reportorial and disclosure requirements onto GT Capital’s website: www.gtcapital.com.ph.

 

Corporate Governance Policies and Practices

Good corporate governance practices are expected at all levels of the organization. In order to ensure good corporate governance and to further cultivate and inculcate a culture of compliance within the Corporation, GT Capital established the following policies as part of its corporate governance framework.

Manual on Corporate Governance

GT Capital adopted a Manual on Corporate Governance ("CG Manual") to institutionalize the principles of good corporate governance in the entire Corporation. This is line with the belief of its Board, Management, employees and shareholders that corporate governance is a necessary component of what constitutes sound strategic business management. As such, every efforts necessaru is undertaken to create awareness of the CG Manual wihthin the Corporation and ensure compliance with the same. the charters of the Corporation's committees are attached as annexes to the CG Manual, and these are reviewed annually and if necessary, amended to reflect corporate governance best practices adopted by the Corporation.

Code of Ethics 

The Code of Ethics exemplifies GT Capital's culture of good governance serves as a guide to ensure that GT Capital’s directors, officers, and employees adhere to the highest ethical standards in the conduct of its business, keeping in mind GT Capital’s corporate core values of integrity, excellence, respect, entrepreneurial spirit, and commitment to value creation.

The Code of Ethics is implemented through the Manual on Corporate Governance (“CG Manual”), Whistleblowing Policy, Code of Discipline of Employees, and the Policies and Procedures Manual of each department. The Whistleblowing Policy and Code of Discipline of Employees were distributed to all directors, officers and employees while the  Policies and Procedures Manual ("PPM") of each department are desseminated to all the employees of such departments. All these documents are also readily available for access of all directors, officers, and employees through the website, by request form the Legal and Compliance Deparment, and through the Human Resources ("HR") and Administration department, and are reviewed on an annual basis in the context of evolving best practices and changing regulations.

GT Capital’s HR and Administration Department, in coordination with the relevant heads of other departments, is tasked with implementing and ensuring compliance with the provisions of the Code of Ethics as well as the policies and code implementing the Code of Ethics. Its responsibilities include, among others, ensuring that the contents of the Code are communicated to all existing and new officers and employees. This is done by providing officers and employees handbook, requiring each officer and employee to sign annually a "Code of Conduct Acknowledgment Form", and conducting an annual orientation on the Corporation's policies. Its activities also include investigating reported violations of the Code and, if necessary, imposing the appropriate disciplinary action. In addition, each department is audited by GT Capital's Internal Audit Department to further verify observance of the relevant policies.

Code of Discipline and Anti-corruption Programs

The Code of Discipline which has been distributed to all employees of GT Capital and is available on GT Capital’s website, ensures that employees of GT Capital conduct themselves in a manner befitting their respective positions in the Company by espousing the general principles of professionalism, high ethical standards, discipline, integrity, and honesty. It likewise promotes efficient, orderly and safe conduct of the Corporation's operations, as well as fairness uniformity in implementation of any disciplinary action on its employees.

The Corporation's anti-corruption program is integrated in the Code of Discipline which considers bribery and offering or accepting anything of value for personal gain in the conduct of official business a serious offense, with a penalty of dismissal.

The HR and Administration Department is responsible for monitoring and implementing the Code of Discipline. It regularly conducts seminars for its employees, including an onboarding seminar for nem employees, tackling the policies and procedures of GT Capital including the Corporation's Code of Discipline and Anti-Corruption Program. Since its adoption in 2013, there have been no major violations of the code of Discipline.

Whistleblowing Policy

GT Capital’s Whistleblowing Policy was adopted to further strengthen GT Capital’s Corporate Governance framework. It reflects GT Capital commitment to maintains the highest standards of transparency, probity and accountability., consistent with its stature as a PLC.

The Whistleblowing Policy strictly prohibits fraudulent practices and unethical conduct by any of its board members, officers and employees. It defines who qualifies as a whistleblower and provides the procedure to be followed by such whistleblower to report in good faith acts or omissions which he or she reasonably believes violates a law, rule or regulation or constitutes ubethical conduct or fraudulent accounting practices.

Whistleblower are protected by the confidentiality and non-retaliation provisions in the Whistleblowing Policy. The former ensures that the Corporation maintains the anonymity of the whistleblower, during the review and investigation process and provides sanctions to be imposed on any party who reveals the identity of whistleblower without his consent. The non-retaliation policy prohibits retaliation or reprisal tactics against employee whistleblowers, such as punitive transfers, withholding of professional promotion or training, loss of seniority rights or benefits, among others, and provides that disciplinary action shall be taken against an officer or employee who engages in such conduct.

Reports by stakeholders, including employees, may be submitted by e-mail to governance@gtcapital.com.ph or directly in writing to the Chief Audit Executive (“CAE”). The CAE may then investigate the report, appoint an investigating officer, create a special Task Force (internal or outsourced) to investigate the matter independently, or elevate the report to the Discipline, Ethics and Values Committee composed of the CAE and the respective heads of the Human Relation and Administration Department and Legal and Compliance Department. Investigations shall be completed within sixty (60) calendar days from receipt of the report by the CAE.

Enterprise Risk Management

GT Capital has adopted an Enterprise Risk Management (“ERM”) Policy and Framework for the promotion of increased awareness of risks, minimization of the company’s exposure to financial losses, and strengthening of shareholders’ confidence. GT Capital seeks to maintain an effective risk management process, designed to meet the requirements of generally accepted good corporate governance.

The goal of the enterprise risk management process is to apply a consistent methodology to assess and manage business risks across GT Capital. GT Capital undertakes an annual assessment of its risks using a methodology aligned with global risk management standards - ISO31000 and COSO Framework.

Risk Governance Structure

GT Capital’s risk governance structure ensures that risk management is not the sole responsibility of one individual but rather occurs and is supported at all levels in the Corporation. The effectiveness of the risk governance structure and process is supported by well-defined risk management roles and responsibilities and periodic review conducted by the Internal Audit Department.

The Board of Directors, through the Risk Oversight Committee, has the ultimate oversight role over the Corporation’s risk management activities, and approves risk management related policies, procedures, and parameters that govern the management of risks.

The Board of Directors, with guidance from the Executive Committee, determines the strategic direction of GT Capital and creates the environment and the structures to properly align risk management with strategic objectives.

The CRO is the Corporation’s risk advocate who facilitates the execution of the ERM process. His primary responsibility is to own, develop, implement, and continuously improve the ERM process. He is assisted by a full-time risk management officer.

The Risk Steering Committee members are the risk owners, and are responsible for the identification, assessment, and monitoring of key risks, and the establishment of countermeasures based on the key risks as identified by the Committee.

In accordance with the Risk Charter, the risk management system is subjected to regular internal audits to identify any gaps in the performance of the process. The audit results are reported to the Audit Committee, Risk Oversight Committee and Senior Management, and are addressed accordingly.

Key Business Risks and Controls

In 2018, individual interviews and group workshops were conducted for the Annual ERM Reassessment. A total of 31 risks were identified and assessed using the agreed upon Risk Ranking Criteria. Risk Treatment Action Plans were developed for each Key Risk. A Risk Dashboard containing key risk indicators for each identified risk was developed and monitored to assess on an ongoing basis that the risks are effectively managed. Key Risks for GT Capital and component companies include market risk, operational risk, regulatory compliance risk, financial reporting risk, and portfolio management risk.

Market Risk

GT Capital component companies are engaged in various sectors, namely banking, automotive assembly and distribution, property development, insurance, and infrastructure and utilities. GT Capital component companies may be adversely affected by market and other macroeconomic factors such as movements in interest rates, foreign exchange rates, inflation, and other economic variables. Political policies, directions, and uncertainties may also impinge the market demand for Component Company products and services.

To mitigate this risk, GT Capital and its component companies continuously monitor key risk indicators, conduct sensitivity analyses, and adjust their business strategies accordingly.

Operational Risk

GT Capital component companies are exposed to risks in the conduct of its operations which includes fraud and information security. Incidents in this category may lead to disruption in operations, reputational damage or financial losses.

To mitigate this risk, GT Capital and its component companies maintain robust operational policies, procedures and controls. Regular internal audits and third-party checks, as necessary, are conducted to identify and address gaps in the performance of various functions.

Regulatory Compliance Risk

 GT Capital component companies are regulated by the Bangko Sentral ng Pilipinas, Insurance Commission, Housing and Land Use Regulatory Board, SEC, Bureau of Internal Revenue, and other regulatory bodies. Rules and implementing guidelines are always evolving and GT Capital should always be up to date with these new developments.

 To mitigate this risk, GT Capital component companies have their own legal and compliance departments to ensure proper compliance with relevant regulations. In addition, the internal audit department of each component company reports any material noncompliance to their respective Audit Committees.

Financial Reporting Risk

It is of utmost importance to GT Capital and its component companies to be transparent to its shareholders, in terms of financial reporting.

To achieve this, each of GT Capital’s component companies has engaged SGV & Co. as their external auditor. In addition, GT Capital conducts its own review of the submitted financial reports for consolidation. Afterwards, the consolidated financial statements at the GT Capital level are then subject to another external audit by SGV & Co.

Portfolio Management Risk

As a holding company, GT Capital aims to have a diversified portfolio that maximizes profitability and creates shareholder value.

To achieve this, GT Capital management meets on a periodic basis to monitor and review the performance of the portfolio and accordingly recommends the adjustment of business strategies to the Executive Committee and the Board.

Environmental and Social Risks

GT Capital component companies are exposed to non-financial risks such as environmental and social impacts in the conduct of its operations. Environmental risks may be brought about by noncompliance with relevant laws and regulations and contribution of climate change. Social risk primarily arises from the component companies’ interaction with its stakeholders such as employees, suppliers, customers and other participants in the value chain.

To mitigate this risk, GT Capital component companies are actively engaging key stakeholders to improve its response to environmental and social risks. In addition, the component companies ensure compliance with all relevant laws and regulations which provide protection to the environment, and to participants of its supply chain.

Other Risks

In addition to the key risks discussed above, there are other risks which were identified by GT Capital management during the 2018 Enterprise Risk Management Annual Reassessment. Each risk has corresponding key risk indicators that are monitoredon a periodic basis and serve as an early warning signal for GT Capital, in case an emerging risk was to transpire. These indicators are reported to the Board of Directors, through the Risk Oversight Committee on a quarterly basis.

Policy on Conflicts of Interest

Under GT Capital’s CG Manual, directors must observe the conduct of fair business transactions with the Corporation and ensure that his personal interest does not conflict with the interests of the Corporation, and should not use his position for profit or to gain some benefit or advantage for himself and/or his related interests. GT Capital’s directors should likewise avoid situations that may compromise their impartiality. When actual or potential conflict of interest exists, the conflicted director is required to fully and immediately disclose the same and abstain from participating in the Board discussion of that item on the agenda.

As part of its evaluation of nominees for directorship, the CG Manual provides that the Nominations Committee should consider possible conflicts of interest.

Policies on Insider Trading

Consistent with the Securities Regulation Code and other pertinent laws and issuances, GT Capital’s policies ensures that its directors, officers, and employees keep secure and confidential all material non-public information which they may acquire or learn by reason of their position. To this end, the directors, officers and employees are prohibited from dealing in GT Capital shares from the time they receive or become aware of material non-public information up to two (2) full trading days after its disclosure to the investing public (the “Blackout Period”). The Corporation considers insider trading as a very serious offense and prohibits the continued service of any director, officer, or employee who has been convicted by a court of competent jurisdiction of insider trading. Accordingly, subject to procedures required under the policies of the Corporation, director convicted of insider trading shall be removed from his position while officers and employees shall be subject to dismissal.

Outside the Blackout Period, GT Capital requires its directors, officers, and principal stockholder (Grand Titan Capital Holdings, Inc.) to report to the Corporation all dealings and transactions in GT Capital shares within three (3) business days after the transaction. This ensures that GT Capital complies with PSE’s Revised Disclosure Rules and the Implementing Rules and Regulations of the Securities Regulation Code. The appropriate disclosures are submitted to the PSE and SEC (through SEC Form 23-B) before therelevant information is posted on GT Capital’s website.

In 2018, GT Capital submitted details on alltransactions made by insiders and has not been penalized for any violation of applicable laws, rules, and regulations in relation to insider trading.

Procurement Policies

The Human Resources and Administration Policies and Procedures Manual outlines the procurement policies of GT Capital, which ensures that risk exposure due to unreasonable and exorbitant spending is eliminated.

All purchases require review and approval of the requesting department head and GT Capital’s Chief Financial Officer (“CFO”) before they are processed. Transactions are then assessed in order to determine if there is a need to comply with the policies and procedures prescribed by the Bids and Awards Committee (BAC). Purchases not subject to formal
bidding process shall undergo the informal bidding process in which at least three (3) bids/quotations shall be obtained from different suppliers. The HRAD Department oversees all procurements, while the Accounting and Financial Control Department is responsible for payment processing of all obligations arising from procurements.

The Corporation maintains a list of accredited suppliers for office supplies and equipment which have been pre-screened to provide competitive prices. Contracts for availment of crucial services are reviewed and approved by the Bids and Awards Committee or the Executive Committee for extraordinary service engagements.

Board of Directors and Management

GT Capital’s Board of Directors is primarily responsible for the governance of the Corporation and ensures its compliance with the principles of good governance by providing an independent check on management. By setting policies for the accomplishment of GT Capital’s corporate objectives, the Board of Directors fosters the long-term success, sustained growth and competitiveness of the Corporation in a manner consistent with its fiduciary responsibility towards both the Corporation and its stakeholders.

Board Composition

The Nominations Committee shall annually prescreen and shortlist all candidates nominated to become a member of the Board of Directors. GT Capital’s stockholders elect annually the Board of Directors from a final list of candidates prepared by the Nominations Committee. The Corporation availed of the Board Director Sourcing services of the Institute of Corporate Directors when searching for candidates for the Board. The experience of the members of the
Board encompasses a wide range of experience in business, finance, and law, as well as expertise in industries in which its component companies are involved.

As of May 09, 2018, four (4) members of GT Capital’s Board are Independent Directors. In addition to having all the qualifications and none of the disqualifications as embodied in relevant SEC regulations and in the by-laws of the Corporation, an Independent Director is a person who, apart from his fees and shareholdings, is independent of management and substantial shareholders, and free from any business or other relationship which could, or could reasonably be perceived to materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director.

GT Capital’s CG Manual provides that no director shall simultaneously hold more than five (5) board seats in publicly listed companies, while an executive director shall not serve on more than two (2) boards of publicly listed companies outside the group. No director of the Corporation serves on more than five (5) boards of publicly listed companies, and no executive director serves on more than two (2) boards of listed companies outside of the group.

The roles of the Chairman and the President areseparate, to ensure an appropriate balance of power, increase accountability, and improve the Board’s capacity for making decisions separately and independently from Management. Among others, the Chairman ensures that meetings of the Board are in accordance with the By-laws, listens and addresses governance-related issues that may be raised by non-executive or Independent Directors and ensures that the Board exercises strong oversight over the Corporation and its Management. On the other hand, the President, among other responsibilities, plans,develops, and implements the Corporation’s policies and goals, interfaces with the Chairman to revise objectives and plans in accordance with current conditions, and communicates clearly and directly with employees concerning performance expectations, productivity, and accountability. Arthur Vy Ty has served as Chairman of GT Capital since his election on May 11, 2016. Carmelo Maria Luza Bautista has served as President since GT Capital’s listing in April 2012.

Duties and Responsibilities of the Board

The duties and responsibilities of the Board, which meets at least six (6) times during the year, include implementing a process for the selection of directors who can contribute independent judgment to the formulation of sound corporate strategies and policies; providing guidelines and insights on major investments and capital expenditures; ensuring the Corporation’s compliance with all relevant laws, regulations and best business practices; establishing and maintain an Investor Relations Program to keep stockholders apprised of important developments; identifying the stakeholders in the community and formulating a clear policy of communication with them; adopting a system of check and balance with the Board; identifying key risks and performance indicators and monitor the same; formulating and implementing policies and procedures that would ensure the integrity and transparency of related party transactions; establishing and maintaining an alternative dispute resolution system in GT Capital; constituting committees it deems necessary to assistit in the performance of its functions; and performing such other duties and responsibilities as may be required under the relevant rules and regulations.

Board Attendance

To ensure attendance of directors, the dates of the six (6) regular Board meetings of GT Capital are set before the beginning of the fiscal year to coincide with the Annual Stockholders’ meeting on the second Wednesday of May and with the financial reports and disclosures during the year (March, June, August, November and December). The quorum requirement for instances when important matters are to be discussed in the agenda, such as issues that will have a significant impact on the character of the Corporation, is two thirds (2/3) of all the directors. However, the Board Secretariat endeavors to ensure the attendance of at least two thirds (2/3) of all the directors for each meeting, regardless of the agenda. For the year 2018, the Board met eight (8) times, as provided below:

 

Name and Position

No. of Meetings Attended

  George S.K. Ty

  Group Chairman; no longer a member as of May 09, 2018

1/2 (50%)

  Arthur Vy Ty

  Chairman

7/8 (87.5%)

  Alfred Vy Ty

  Co-Vice Chairman

6/8 (75%)

  Francisco C. Sebastian

  Co-Vice Chairman

7/8 (87.5%)

  Carmelo Maria Luza Bautista

  President and Director

7/7 (100%)

  David T. Go

  Director

7/8 (87.5%)

  Pascual M. Garcia III

  Director; member as of May 09, 2018

6/6 (100%)

  Regis V. Puno

  Director; member as of May 09, 2018

6/6 (100%)

  Roderico V. Puno

  Director; no longer a member as of May 09, 2018

1/2 (50%)

  Jaime Miguel G. Belmonte

  Independent Director

8/8 (100%)

  Renato C. Valencia

  Lead Independent Director

8/8 (100%)

  Wilfredo A. Paras

  Independent Director

8/8 (100%)

  Rene J. Buenaventura

  Director; member as of May 09, 2018

 6/6 (100%)

The non-executive directors of the company met separately at least once during the year without any executives present. During this meeting, the director, board, and committee self-assessments were distributed, and the President’s assessment was discussed.

Director, Board, and Committee Self-Assessment

The Board, Committee and Individual Director’s Self- Assessment Forms were adopted as a tool for the Corporation to evaluate the performance of its Board, Committees and individual directors and to assess the efficiency of its processes. These enable Board and Management to identify areas for improvement and determine the value and contribution of the Board and each individual director towards the growth and improvement of the Corporation. The Self-Assessment forms are distributed annually and tabulated by Board secretariat so that results may be reported to and acted upon by the Board, Management, and/or appropriate committee, as necessary.

The criteria for the Self-Assessment of the Board, the Committees, and individual directors are as follows:

 

Board Self-Assessment Criteria
• Enablers of Board and Committee Performance
• Board Function
• Board Practices
• Executive Performance
Director Self-Assessment Criteria
• Foundational
• Board and Committee Citizenship
• Director Responsibilities
• Vision, Goals and Strategies
• Finances
• Board Meetings
• Overall Performance
Committee Self-Assessment Criteria
• Charter
• Composition and Quality
• Meetings
• Duties and Responsibilities
• Performance as a Member

Questions may be answered with a “yes” or “no” response or on a scale ranging from “strongly disagree” to “strongly agree”, and comments and suggestions are solicited on recommended areas of focus and on how to improve the Corporation’s performance. The 2018 Board Self-Assessment Form was modified to include a portion on Strengths, Weaknesses, Opportunities and Threats Analysis of the Corporation from the perspective of each Director.

Performance Assessment of President by the Board

The President’s Assessment Questionnaire is a tool used to evaluate the performance of the President of GT Capital and to identify areas of improvement. It is distributed annually to the Board and the results are provided to the President. The Questionnaire is divided into the following sub-sections: leadership, strategy formulation, strategy execution, financial planning/performance, relationship with the Board, personal qualities, transparency/effective communication, and integrity. The Board rated the President on a scale of one (1) as the lowest to five (5) as the highest. The Assessment also includes a portion on the President’s development needs where the directors can identify the President’s strengths, suggest key result areas for the coming year, and suggest areas for the President’s personal development for the coming year.

Board Committees

The Board exercises authority over specific aspects of GT Capital’s business through its Committees, which aids in complying with the principles of good corporate governance. Each Committee is governed by its own Charter, which serves as a guide on its composition, frequency of meetings and exercise of its powers, duties and responsibilities. The latest version of each Committee Charter may be downloaded from the GT Capital website.

Executive Committee

GT Capital’s Executive Committee exercises powers and authority of the Board when the Board is not in session, or when it is impractical for the Board to meet. The Executive Committee reports all its actions to the Board, which may revise or alter the same, provided that no rights or acts of third parties are prejudiced. The Executive Committee also guides Management in the evaluation of the acts or courses of action to be taken prior to its endorsement to the Board, if required under the CG Manual and Amended By-laws of GT Capital. 

 

Member

Position Held in Committee

Meetings Attended

  Arthur Vy Ty

Chairman (Non-executive Director)

27/29

  Alfred Vy Ty

Vice-Chairman (Non-executive Director)

26/29

  Francisco C. Sebastian

Member (Non-executive Director)

27/29

  Carmelo Maria Luza Bautista

Member (Executive Director)

29/29

  Mary Vy Ty

Adviser (Non-executive)

25/29

Compensation Committee

The Compensation Committee is tasked to implement formal and transparent policies and procedures to ensure that compensation of directors and key officers of GT Capital is consistent with the Corporation’s culture, strategy, long-term interests and the business environment in which it operates. 

 

Member

Position Held in Committee

Meetings Attended

  Jaime Miguel G. Belmonte

Chairman (Independent Director)

1/1

  Alfred Vy Ty

Member (Non-executive Director)

1/1

  Renato C. Valencia

Member (Independent Director)

1/1

Nominations Committee

The Nominations Committee defines and assesses Board membership criteria and identifies and develops highly-qualified individuals to take on key Board and Board Committee positions when vacancies occur. The Committee pre screens and shortlists candidates nominated to become a member of the Board of Directors of GT Capital and other positions requiring the Board’s appointment. It ensures that all nominees possess all of the qualifications and none of the disqualifications provided under existing laws, rules, and regulations, and promotes the Corporation’s policy on diversity, such that no discrimination is made based on gender, age, ethnicity, nationality or background, whether social, cultural, political or religious.

The Committee considers the Corporation’s vision, mission, corporate objectives, and strategic direction as well as gaps in the skills and competencies of the currently serving directors. In determining whether there are gaps, the Committee also considers the sectors that GT Capital and its component companies are in. The Committee has the option to use an external search agency or external databases in identifying qualified candidates to the Board.

As of May 09, 2018, the Nominations Committee is composed of a majority of Independent Directors.

 

Member

Position Held in Committee

Meetings Attended

  Renato C. Valencia

Chairman (Lead Independent Director)

3/3

  Wilfredo A. Paras

Member (Independent Director)

3/3

  Jaime Miguel G. Belmonte

Member (Independent Director); no longer a member as of May 09, 2018

2/2

  Rene J. Buenaventura

Member (Independent Director); member as of May 09, 2018

1/1

  Carmelo Maria Luza Bautista

Adviser (Executive Director)

1/1


Audit Committee

The Audit Committee exercises oversight responsibility over the financial reporting process, system of internal control, audit process, and the monitoring of compliance with applicable laws, rules, and regulations. It oversees the Corporation’s external and internal auditors and is reviews the audit and nonaudit fees paid to external auditors.

 

Statement of the Audit and Risk Oversight Committees on Adequacy of GT Capital’s Internal Controls and Risk Management System

In compliance with GT Capital’s Manual on Corporate Governance and PSE’s Corporate Governance Guidelines for publicly listed companies, the Audit Committee and the Risk Oversight Committee jointly certify, on behalf of the Board of Directors, the adequacy and effectiveness of the Corporation’s internal controls and risk management system, and hereby attest that the Parent Corporation’s governance, risk management, and control processes are adequately designed and operating effectively relative to its business objectives.

Mr. Wilfredo A. Paras
Chairman, Audit Committee

Mr. Renato C. Valencia
Chairman, Risk Oversight Committee


Member

Position Held in Committee

Meetings Attended

  Wilfredo A. Paras

Chairman (Independent Director)

5/5

  Renato C. Valencia

Member (Independent Director)

5/5

  Jaime Miguel G. Belmonte

Member (Independent Director); no longer a member as of May 09, 2018

2/2

  Rene J. Buenaventura

Member (Independent Director); member as of May 09, 2018

3/3

  Regis V. Puno

Member (Non-executive Director); member as of May 09, 2018

2/3

  Pascual M. Garcia III

Member (Non-executive Director); member as of May 09, 2018

3/5

At least one (1) independent director of the Audit Committee has accounting expertise. Mr. Rene J. Buenaventura is certified public accountant.

Risk Oversight Committee

The Risk Oversight Committee (“ROC”) is responsible for ensuring the creation and implementation of a robust and effective system of identifying, assessing, monitoring, and managing all material and relevant risks to the Company and its shareholders. GT Capital’s ROC is also responsible for institutionalizing and overseeing the Company’s risk management program and for monitoring the risk management policies and procedures of GT Capital’s subsidiaries in relation to its own. Its powers, duties and responsibilities include, among others, identifying, assessing and prioritizing business risks, developing risk management strategies, overseeing the implementation as well as reviewing and revising GT Capital’s Risk Management Plan, recommending to the Board policies and guidelines to address unforeseen risks and creating and promoting a risk culture that requires the highest standards of ethical behavior among all personnel.

Member

Position Held in Committee

Meetings Attended

  Rene J. Buenaventura

Chairman (Independent Director); member as of May 09, 2018

3/3

  Renato C. Valencia

Member (Lead Independent Director)

4/4

  Wilfredo A. Paras

Member (Independent Director)

4/4

  David T. Go

Member (Non-executive Director)

3/4

Corporate Governance and Related Party Transactions Committee

The Corporate Governance and Related Party Transactions Committee was created as a board-level committee in order to aid the Board in its primary responsibility for good corporate governance. It is tasked with ensuring the Board’s effective and due observance of corporate governance principles and guidelines. The Committee is also responsible for passing upon and providing clearance for transactions with Related Parties which involves disbursementsof funds exceeding the amount provided in the Corporate Governance and Related Party Transactions Committee Charter. In all cases, the Committee shall make its decision taking into consideration the best interest of the Corporation and its shareholders.

The policies which guide the Corporate Governance and Related Party Transactions Committee are found in the Corporate Governance and Related Party Transactions Committee Charter.

One of the policies outlined in the Corporate Governance and Related Party Transactions Committee Charter is the Corporation’s policy prohibiting loans to directors except when the following conditions are present: (a) Management has, based on the judgment of the Board, sufficiently justified the loan or assistance
to the related party; (b) The loan or assistance shall be provided on arm’s length basis; and (c) the terms and conditions of the loan do not deviate substantially from market terms and conditions and do not jeopardize the
best interest of the company.

Member

Position Held in Committee

Meetings Attended

  Renato C. Valencia

Chairman (Independent Director)

6/6

  Wilfredo A. Paras

Member (Independent Director)

6/6

  Jaime Miguel G. Belmonte

Member (Independent Director)

6/6

  Anjanette Ty Dy Buncio

Adviser; as of May09, 2018

3/3

In 2018, all RPTs were conducted fairly and at an arm’s length basis. Further discussion on the RPTs of the Corporation can be found under Note 27 of the Corporation’s Audited Financial Statements.

Board and Committee Support

GT Capital’s Corporate Secretary, Atty. Antonio V. Viray, has extensive experience in legal and company secretarial practices, and plays a significant role in supporting the Board by ensuring the efficient flow of information among the Board, Management, stockholders and stakeholders. He ensures that directors have reasonable access to any information they might need to deliberate on all matters on the Board’s agenda and receive the requisite board materials at least five (5) business days before all scheduled Board meetings.

By keeping abreast with relevant laws, rules and regulations and industry developments necessary for the performance of his duties and responsibilities, he effectively advises the Board on significant issues as they arise. In monitoring regulatory compliance, he may take appropriate corrective measures to address all regulatory issues and concerns.

Director and Executive Compensation

GT Capital’s Compensation Committee is tasked with ensuring that competitive remuneration is offered to attract and retain the services of qualified and competent directors and officers. Annual compensation of directors and corporate officers of the Board are determined prior to the start of their term. The HR and Administration Department implements policies on compensation and benefits of employees found in its Policies and Procedures Manual, which sets forth benefits offered by the Corporation as well as the employees entitled to such benefits.

In 2018, GT Capital directors received aggregate
remuneration as follows:

 

Remuneration

Executive Directors

PhP 2.00 million

Non-Executive Directors

(other than IDs)

PhP 19.46 million

Independent Directors

PhP 8.47 million

Remuneration of directors (including Independent and Non-Executive Directors) consists of per diem and transportation allowances as well as a year-end bonus which is not dependent on performance. Directors do not receive any remuneration in the nature of options or performance shares.

The aggregate remuneration paid to the five most highly compensated members of GT Capital’s Senior Management in 2018 is as follows:

Remuneration Item

Amount

(a) Salary

PhP 49.13 million

(b) Bonuses

PhP 20.47 million

Total

PhP 69.60 million

Orientation and Continuing Education Initiatives

The Corporation’s CG Manual requires incumbent and newly-elected directors to attend a seminar on corporate governance. New directors of GT Capital are oriented regarding GT Capital’s core businesses in order to provide the director with a better understanding of the Group. A budget is also in place for continuous professional education of all directors, to ensure the continuous effective performance of their functions and to keep them updated on relevant and latest developments. In 2018, directors of the Corporation attended on the following programs on corporate governance.

 

Name of Director/Officer

Date held

Program

  Arthur Vy Ty

October 19, 2018

Digital Trade-Offs, Anti-Money Laundering Act and Environmental, Social and Governance

  Alfred Vy Ty

October 19, 2018

Digital Trade-Offs, Anti-Money Laundering Act and Environmental, Social and Governance

  Francisco C. Sebastian

July 25, 2018

Advanced Corporate Governance Training Program

 

   Carmelo Maria Luza Bautista

  

February 02, 2018

Seminar on Corporate Governance and Related Matters

July 25, 2018

Advanced Corporate Governance Training Program

   Renato C. Valencia

July 25, 2018

Advanced  Corporate Governance Training Program

  Jaime Miguel G. Belmonte

July 25, 2018

Advanced  Corporate Governance Training Program

  Wilfredo A. Paras

September 11, 2018

Distinguished Corporate Governance Speaker Series

  Rene J. Buenaventura

July 25, 2018

Advanced  Corporate Governance Training Program

  David T. Go

February 02, 2018

Seminar on Corporate Governance and Related Matters

   Pascual M. Garcia III

July 25, 2018

Advanced  Corporate Governance Training Program

   Regis V. Puno

October 19, 2018

Digital Trade-Offs, Anti-Money Laundering Act and Environmental, Social and Governance


Audit and Accounting

Internal Audit

The Internal Audit function of GT Capital is under the responsibility of its Chief Audit Executive (the “CAE”), Leo Paul C. Maagma(1). Prior to the start of the year, a risk-based audit plan is prepared and approved by the Audit Committee. Progress of the plan as well as significant audit findings are reported quarterly to the Audit Committee and Board of Directors.

The CAE also ensures that risk-based audit plans are prepared at the component company level. Progress of these plans and significant audit findings meeting the Group’s escalation criteria are reported by each component company’s Internal Audit Head to the CAE on a quarterly basis. These reports are consolidated and reported to GT Capital’s Management and Audit Committee.

As mandated by the Internal Audit Charter, to maintain the independence of the internal audit process, the CAE functionally reports to the Audit Committee and administratively to the President. The Audit Committee is thus responsible for the appointment, performance evaluation, and removal of the CAE.

In March 2018, independent auditing firm, KPMG, confirmed to Senior Management, Audit Committee and the Board of Directors that the Internal Audit Division “generally conforms” (the highest classification on conformity) to the requirements of the International Standards for Professional Practice of Internal Auditing (ISPPIA) and the Code of Ethics based on their external quality assessment review.


(1) Mr. Leo Paul C. Maagma has been the CAE of GT Capital since April 16, 2018, replacing Richel D. Mendoza.

Independent Public Accountants

Sycip, Gorres, Velayo & Company (“SGV”) was the external auditor for the calendar year 2018. GT Capital is compliant with SRC Rule 68, Paragraph 3 (b) (ix) (Rotation of External Auditors), which states that the independent auditors, or in the case of an audit firm, the signing partner, shall be rotated after every five (5) years of engagement, with a two-year cooling off period to be observed in the re-engagement of the same signing partner or individual auditor. In compliance with this rule, the signing partner was subject to rotation in 2018. The following SGV partners were engaged by GT Capital since its listing in 2012.

 

Year

SGV partner engaged

2012

Aris C. Malantic

2013

Vicky Lee Salas

2014

Vicky Lee Salas

2015

Vicky Lee Salas

2016

Vicky Lee Salas

2017

Vicky Lee Salas

2018

Miguel U. Ballelos, Jr.

The following table sets out the aggregate fees for audit and audit-related services rendered by SGV to GT Capital, inclusive of out-of-pocket expenses and value-added-tax for each of the years ended December 31, 2017 and 2018:

 

 

2017

2018

Audit and Audit-Related Services 

2.30

2.21

Non-Audit Services 

0.04

0.32

Total 

2.34

2.53

Audit services rendered include the audit of the financial statements and supplementary schedules for submission to SEC, and review of annual income tax returns. Non-audit services were also provided by SGV & Co. for validation of stockholders’ votes during Stockholders’ Meeting. Tax consultancy services were also secured for the purchase of Toyota Motor Corporation shares.

The Audit Committee has the primary responsibility of recommending to the Board of Directors the appointment, re-appointment or removal of the external auditor and the fixing of the audit fees. The Board of Directors and stockholders approve the Audit Committee’s recommendation.

Appointment of Independent Party

There was no appointment of an independent party to evaluate the fairness of any transaction price in relation to any mergers, acquisitions, and/or takeovers which require stockholders’ approval. For the year 2018, GT Capital was not involved in any mergers, acquisitions and/or takeovers which required stockholders’ approval.

Financial Reporting

GT Capital’s financial statements comply with Philippine Accounting Standards and Philippine Financial Reporting Standards and are submitted and disclosed in compliance with the applicable laws, rules and regulations. GT Capital did not revise its financial statements in 2018.

Ownership Structure

Stockholders holding more than 5% of outstanding shares

As of December 31, 2018, the following are the owners of GT Capital’s common stock in excess of 5% of its total outstanding shares:

 

Record Owner

No. of Shares Held

Percentage ( % )

Grand Titan Capital Holdings, Inc.

111,494,128

55.932%

PCD Nominee Corp. (Non-Filipino)

61,696,894

30.951%

PCD Nominee Corp. (Filipino)

25,512,240

12.799%

No director or officer has shareholdings in GT Capital amounting to 5% or more of its outstanding capital stock and there are no cross or pyramid shareholdings.

Direct and Indirect Shareholdings of Major Shareholder, Directors and Senior Officers

GT Capital reports quarterly to the PSE the direct and indirect shareholdings of its major shareholder, Grand Titan Capital Holdings, Inc., GT Capital’s directors, and its senior officers. Their direct and indirect common shareholdings for the year 2018 are as follows:

 

Name

Nature of

Relationship

to GT Capital

Number of Shares Directly Owned

(As of

January  1, 2018)

Number of Shares Indirectly Owned

(As of

January 1, 2018)

Number of Shares Directly Owned

(As of

December 31, 2018)

Number of Shares Indirectly Owned

(As of

December 31, 2018)

Grand Titan Capital Holdings, Inc.

Principal Shareholder

89,427,110

(46.43%)

18,296,685

(9.50%)

111,494,128

(55.932)

0

(0.0000%)

Arthur V. Ty

Chairman

100,000

(0.052%)

2,100

(0.0010%)

103,500

(0.052%)

12,174

(0.006%)

Alfred V. Ty

Co-Vice Chairman

100,000

(0.052%)

2,100

 (0.0010%)

103,500

(0.052%)

12,174

(0.006%)

Francisco C. Sebastian

Co-Vice Chairman

100

(0.0000%)

50,000

(0.026%)

104

(0.0000%)

93,150

(0.047%)

Anjanette T. Dy Buncio

Treasurer

0

(0.0000%)

46,547

(0.024%)

0

(0.0000%)

50,504

(0.025%)

Carmelo Maria Luza Bautista

President and Executive Director

1000

(0.0005%)

12,000 (0.006%)

1,035

(0.0005%)

12,420 (0.006%)

Alesandra T. Ty

Assistant Treasurer

0

(0.0000%)

1,700

(0.0008%)

0

(0.0000%)

17,865

(0.0009%)

Francisco H. Suarez, Jr.

Executive Vice President and Chief Finance Officer

0

(0.0000%)

5,000

(0.0025%)

0

(0.0000%)

5,175

(0.0025%)

Renato C. Valencia

Lead Independent Director

1,000

(0.0005%)

0

(0.0000%)

1,035

(0.0005%)

0

(0.0000%)

Jaime Miguel G. Belmonte

Independent Director

1,000

(0.0005%)

0

(0.0000%)

1,035

(0.0005%)

0

(0.0000%)

Wilfredo A. Paras

Independent Director

1,000

(0.0005%)

0

(0.0000%)

1,035

(0.0005%)

0

(0.0000%)

Renato C. Valencia

Lead Independent Director

1,000

(0.0005%)

0

(0.0000%)

1,000

(0.0005%)

0

(0.0000)

Farrah Lyra Q. De Ala

(Appointed on November
13, 2018)

Assistant Vice
President

0

(0.0000%)

(As of date of
appointment)

 287

(0.0000%)

(As of date of
appointment)

0

(0.0000%)

 

 287

(0.0000%)

 

Winston Andrew L. Peckson

First Vice President and Chief Risk Officer

0

(0.0000%)

271

(0.0000%)

0

(0.0000%)

281

(0.0000%)

Reyna Rose P. Manon-Og

First Vice President and Controller

0

(0.0000%)

0

(0.0000%)

0

(0.0000%)

204

(0.0000%)

David T. Go

Non-Executive Director

100

(0.0000%)

0

(0.0000%)

104

(0.0000%)

0

(0.0000%)

Rene J. Buenaventura

(Appointed on May 09,
2018

Independent Director

100

(0.0000%)

(As of date of
appointment)

0

(0.0000%)

(As of date of
appointment)

104

(0.0000%)

0

(0.0000%)

Pascual M. Garcia III

(Appointed on May 09,
2018

Non-Executive Director

100

(0.0000%)

(As of date of
appointment)

0

(0.0000%)

(As of date of
appointment)

104

(0.0000%)

0

(0.0000%)

Regis V. Puno

(Appointed on May 09,
2018

Non-Executive Director

100

(0.0000%)

(As of date of
appointment)

0

(0.0000%)

(As of date of
appointment)

104

(0.0000%)

0

(0.0000%)

Renee Lynn Miciano-Atienza

Vice President and Head, Legal &
Compliance

0

(0.0000%)

45

(0.0000%)

0

(0.0000%)

47

(0.0000%)

Antonio V. Viray

Corporate Secretary

0

(0.0000%)

0

(0.0000%)

0

(0.0000%)

0

(0.0000%)

Jocelyn Y. Kho

Assistant Corporate Secretary

0

(0.0000%)

0

(0.0000%)

0

(0.0000%)

0

(0.0000%)

Antonio P.A. Zara III

(Appointed on August 30,
2018

Senior Vice President

0

(0.0000%)

(As of date of
appointment)

0

(0.0000%)

(As of date of
appointment)

0

(0.0000%)

0

(0.0000%)

Jose B. Crisol, Jr.

First Vice President and Head,
Investor Relations, Strategic Planning, and Corporate Communication

0

(0.0000%)

 

0

(0.0000%)

 

0

(0.0000%)

 

0

(0.0000%)

 

Leo Paul C. Maagma

(Appointed on March 16,
2018

Vice President and Chief Audit
Executive
 

0

(0.0000%)

(As of date of
appointment)

 

0

(0.0000%)

(As of date of
appointment)

 

0

(0.0000%)

 

0

(0.0000%)

 Susan E. Cornelio Vice President and Head, Human
Resources and Administration
 

0

(0.0000%)

 

0

(0.0000%)

 

0

(0.0000%)

 

0

(0.0000%)

 Elsie D. Paras Vice President
Deputy CFO
 

0

(0.0000%)

 

0

(0.0000%)

 

0

(0.0000%)

 

0

(0.0000%)

Stakeholder Relations

Employee Relations

Inculcated in all GT Capital employees is a culture of excellence and professionalism. GT Capital recognizes and values the efforts and contributions of all employees, recognizing that these contribute to the over-all success of the Corporation. Policies on employee health, safety, welfare, discipline and training are stated in the Employee Handbook, which is provided to all employees of GT Capital upon hiring.

Policies and Practices on Health, Safety, and Welfare of Employees

To promote good health of its employees, GT Capital provides non-contributory medical and dental coverage for all its employees and eligible dependents, which includes comprehensive in-patient and outpatient hospitalization benefits. First-aid and over-thecounter medicines are available when needed.

Other benefits for regular employees include allowances, leave benefits, bonuses, emergency loans, car plan, housing assistance, retirement benefits, burial assistance, and group life insurance.

Further, in compliance with general labor standards and occupational safety and health standards, GT Capital has incorporated in its Employee Handbook the following policies and programs for the benefit of its employees:

1.  Drug-free Workplace Policy & Program; 

2.  Hepatitis B Workplace Policy & Program;

3.  HIV AIDS Workplace Policy & Program; and

4.  TB Workplace Policy & Programs.

To date, GT Capital continues to fully comply with the labor standards and occupational safety and health standards required by law. It also promotes health, safety and welfare of employees with activities such as annual medical and dental check-ups, as well as safety, fire, and earthquake drills.

The annual safety, fire, and earthquake drills as well as seminars on emergency response are conducted in coordination with the Makati Fire Station and the GT Tower building administration to better equip employees with basic and necessary skills in case of emergencies. Emergency grab bags have also been distributed to each employee.

Employees participated in the following activities in the year 2018:

 

Activity

Dependents

  Annual Executive Check-up

2

  Annual Check-up

22

  Dental Check-up

4

  Safety, fire, and earthquake drill

29

  Emergency grab bags

36

  Human Capital Development Initiatives

24 (average)

  2017 PSE Bull Run

10

  Flu Vaccination

5


Training and Developmental Programs for Employees

Recognizing the need for continuing education and development of its Senior Management and employees, GT Capital’s HR and Administration Department identifies programs and allocates a budget for employees to acquire and enhance technical and behavioral competencies. These programs address competency gaps and expose them to the latest concepts, information and techniques in their respective fields as well as to further build their competencies in preparation for higher responsibilities in the future. These training and development programs supplement the mentoring provided by each Department Head and the President to the officers of GT Capital.

In 2018, the following training programs were attended by GT Capital’s Senior Management and other employees:

Senior Management Training

 

Name of employee

Date

Program

Francisco H. Suarez, Jr.

January 10-12, 2018

DBS Vickers/FirstMetroSec Pulse of Asia Conference in Singapore

 

January 22-23, 2018

JP Morgan Philippines Conference

 

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

February 28, 2018 to
March 1, 2018

UBS Conference

 

July 25, 2018

Advanced Corporate Governance Training Program

 

August 27-29, 2018

Macquarie Capital Securities Philippines ASEAN Conference - Singapore

 

August 30-31, 2018

UBS Securities Philippines Roadshow in Hong Kong

 

October 3-4, 2018

Deutsche Bank dbAccess Philippines Conference 2018

Jose B. Crisol, Jr.

January 10-12, 2018

DBS Vickers/FirstMetroSec Pulse of Asia Conference in Singapore

 

January 22-23, 2018

JP Morgan Philippines Conference

 

February 28, 2018 to
March 1, 2018

UBS Philippines CEO/CFO Forum Conference

 

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

July 19-21, 2018

First International Mentoring Conference

 

July 25, 2018

Advanced Corporate Governance Training Program

 

August 27-29, 2018

Macquarie Capital Securities Philippines ASEAN Conference - Singapore

 

August 30-31, 2018

UBS Securities Philippines Roadshow in Hong Kong

 

October 3-4, 2018

Deutsche Bank dbAccess Philippines Conference 2018

 

December 11, 2018

Human Rights Seminar

Winston Andrew L. Peckson

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

June 5, 2018

Distinguished Corporate Governance

 

July 25, 2018

Advanced Corporate Governance Training Program

Reyna Rose P. Manon-Og

January 25, 2018

Regulators Forum 2018

 

July 25, 2018

Advanced Corporate Governance Training Program

 

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

December 7, 2018

Executive Presence and Leadership Branding Seminar

 

2017-2018

UA&P Strategic Business Economic Program

Susan E. Cornelio

April 11-12, 2018

Career Advancement Planning Advancement

 

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

May 23, 2018

Asia HR Summit 2018

 

June 19-20, 2018

1st HR Compliance and Conference

 

July 19-21, 2018

First International Mentoring Conference

 

July 25, 2018

Advanced Corporate Governance Training Program

 

September 11, 2018

Distinguished Corporate Governance Speaker Series

 

December 7, 2018

Executive Presence and Leadership Branding Seminar

 

December 11, 2018

Human Rights Seminar

Elsie D. Paras

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

July 25, 2018

Advanced Corporate Governance Training Program

 

December 7, 2018

Executive Presence and Leadership Branding Seminar

 

December 11, 2018

Human Rights Seminar

Leo Paul C. Maagma

May 18, 2018

BusinessWorld Economic Forum 2018: Disruptor or Disrupted?

 

July 25, 2018

Advanced Corporate Governance Training Program

 

December 7, 2018

Executive Presence and Leadership Branding Seminar

 

December 11, 2018

Human Rights Seminar

Renee Lynn Miciano-Atienza

March 12, 2018

Cryptocurrency “The Truth and the Myths”

 

July 18, 2018

ASEAN Corporate Governance Scorecard Version 2 Workshop

 

July 25, 2018

Advanced Corporate Governance Training Program

  September 26, 2018 Understanding Federalism and its Implications
  2018-2019 UA&P Strategic Business Economic Program
Farrah Lyra Q. De Ala January 25, 2018 Regulators Forum 2018
  August 14, 2018 Retirement Plans PAS 19R
  August 28, 2018 Strengthening Internal Control
  August 31, 2018 Ethical Decision Making
  September 28, 2018 People Management
  December 7, 2018 Executive Presence and Leadership Branding Seminar
  December 11, 201 Human Rights Seminar

Employee Training

GT Capital employees are encouraged to improve and expand their knowledge base by participating in training programs relevant to their fields of expertise. In 2018, GT Capital employees attended the following training programs:

 

Chartered Financial Analyst Review Class

PROGRAM

Transition to Management

Professional Presence and Excellence

Business Valuation Seminar

2018 Midyear Economic Briefing

Distinguished Corporate Governance

5th SEC-PSE Corporate Governance Forum

Best Practices in Corporate Housekeeping

ASEAN Corporate Governance Scorecard Version 2 Workshop

Mandatory Continuing Legal Education (MCLE) 7th Lecture Series

Mandatory Continuing Legal Education (MCLE) 14th Lecture Series

Understanding Federalism and its Implications

Effective Communications and Human Relations

 Chartered Financial Analyst Review Class
 Regulators Forum 2018

Effective and Assertive Workshop Communication

Time Management

Master of Business Administration (MBA) Program

Retirement Plans and PAS 19R

PFRS 9, 15 and 16

Business Taxation; VAT and Percentage Taxes

Mastering Withholding Tax

CISCO 2
Safe-T Cyber Security Round Table
Data Management Compliance and Cybersecurity
1st HR Compliance and Conference
How to Optimize Talent Data for the Business
CISCO 3
7 Habits of Highly Effective People

Executive Presence and Leadership Branding Seminar

Human Rights Seminar

Succession Planning

Pursuant to GT Capital’s succession planning policy, in March 2018 GT Capital engaged a third party assessor to evaluate its officers and employees to assume more challenging roles in the Corporation. The assessment focused on the competence and effectiveness of each individual’s performance in 2017.

Creditor Protection

The Policies and Procedures Manual of the Accounting and Financial Control Department outlines GT Capital’s policies on creditor protection, which ensure timely payment and compliance with loan covenants, such as the maintenance of various financial ratios. These policies were applied in the review of GT Capital’s loan agreements in 2018. The prospectus of each of GT Capital’s existing corporate fixed rate bonds also includes provisions for the protection of bondholders, including the appointment of a trustee bank to act in their behalf. In addition, GT Capital’s loan agreements include provisions on the disclosure of information to lenders, including the Corporation’s financial statements.

The Treasury and Finance Officer monitors all loan provisions to ensure timely payment of interest and/ or principal and works in close coordination with the Legal and Compliance Officer to monitor the Corporation’s compliance with its loan covenants.

Sustainability Reporting

In this annual report, GT Capital presents its maiden Sustainability Report (see page 92) with information for the reporting period January 1 to December 31, 2018, adopting the Global Reporting Initiative (“GRI”) Standards, an internationally recognized framework for sustainability.

The Sustainability Report covers the thirteen (13) material topics under the GRI Standards:
• Economic Performance
• Indirect Economic Impacts
• Anti-corruption
• Anti-competitive Behavior
• Energy
• Environmental Compliance
• Employment
• Labor/Management
• Training and Education
• Diversity and Equality
• Non-discrimination
• Human Rights Assessment
• Supplier Social Assessment

The Sustainability Report presents globally comparable information affecting its triple bottom line, a vital component of stakeholder relations. Moreover, the focus on sustainability allows GT Capital to identify potential opportunities or trends or evaluate emerging risks, making the endeavor a risk management and strategic initiative for the Corporation.

Download Sustainability Report

Customer Welfare and Safety, Environment-Friendly Value Chain, and Interaction with Communities

GT Capital monitors its subsidiaries regarding their respective policies and practices on the welfare, health and safety of end-customers, supplier/contractor selection procedures, interaction with communities, and their initiatives which ensure an environmentally friendly value chain and promote sustainable development.

Toyota Motor Philippines Corporation

 

Toyota Motor Philippines Corporation (“TMP”), together with its stakeholders in the value chain – suppliers, dealers and Team Members in partnership with communities and the government, continuously exert efforts to contribute to the attainment of the Toyota Environmental Challenge (TEC) 2050 goals. Among the projects implemented in 2018 were the following:

1. Installation of TMP’s 1-Megawatt Solar Array Facility – comprised of 2,640 pieces photovoltaic (“PV”) panels with 22 units of Huawei Inverters, a project under Joint Crediting Mechanism (“JCM”) which aims to lessen CO2 emissions by around 790 tons CO2;
 
2. Car Donation Project - Toyota Motor Corporation (“TMC”) through TMP donated a brand new Hilux to Conservation International (“CI”) Philippines to support its conservation efforts related to Verde Island Passage, which is known as the “Center of the Center of Marine Shorefish Biodiversity in the World”; and
 
3. All-Toyota Green Wave Project, year-round mangrove/ tree planting and river/coastal clean-up activity participated in by TMP’s value chain where 875 trees were planted and 190 kg of waste was collected.
 
High environmental performance and sustainable practices of dealers are ensured through Dealer Environment Risk Assessment Program (“DERAP”) that paved the way for the ISO14001:2015 certification of 20 Dealerships to date. Also, as part of greening the supply chain, suppliers are enjoined to strictly follow the Toyota Green Purchasing Guidelines which promote activities related to ISO 14001 Certification, CO2 emission and water consumption reduction, recycling, SoC-free chemicals management and CSR activities.
 
To achieve the established objectives concerning environmental protection, strict compliance with the requirements of the Department of Environment and Natural Resources, Laguna Lake Development Authority and other regional and local government agencies is ensured. Recently, TMP has also been recertified with the 2015 version of ISO14001 standard by AJA Registrars.
 
TMP actively promotes environmental awareness among its value chain through the celebration of Toyota Global Environment Month held every June. As part of the celebration, TMP launched CO2 Fair, ECO Ride/Prius Test Drive, Energy and Fuel Saving Seminar, Tree Planting, River Clean-Up, Toyota – Barangay ECO Science Tour (“BEST”), and Slogan Making and Social Media Contest.
 
As regards workplace safety and health programs, TMP’s occupational safety and health policies and programs cover not only its team members, contractual employees and services providers. It is also responsible for all visitors, customers and other personnel entering its premises, ensuring everyone will be free from harm and ill effects of an accident or illness.
 
TMP provides the appropriate safety education for all to ensure that everyone is aware of safety rules and is equipped with the correct safety mindset that will make them recognize hazards in the workplace and understand the various risks associated with it. This ability is called internally in TMP as “Kiken Yochi” (“KY”) or the ability to predict a dangerous situation.
 
TMP implements a work permit system, confirmation of workers certification to perform hazardous jobs, daily safety patrol, monthly safety patrol with Top Management, lock out, tag-out and try out, safety audits and inspection of tools and equipment to manage the risks brought by the hazards in the workplace.
 
Regular monitoring of the quality of TMP’s work environment through work environment measurement was established to ensure that a safe and healthful workplace is provided for all personnel inside TMP.
 
The newly constructed Toyota Activity Center (“TAC”) provides the appropriate facilities needed by Team Members to maintain a sound physical and mental well-being. Team Members can play their favorite sports in our basketball, volleyball and badminton courts and a mini football field. Exercise areas, weight lifting stations, darts, billiards, a function hall are some of the amenities that can be found inside the TAC. TMP

Toyota Manila Bay Corporation

Toyota Manila Bay Corporation (“TMBC”) has a high regard for environmental awareness, safety and health, which is visible in the firm’s mission statement to contribute to the growth of the city, society and the automotive industry.

To address all stakeholders’ welfare, health and safety, TMBC provides:

a. Safe and secure facility which is compliant to Department of Labor and Employment (“DOLE”) and National Building Code standards such as, among others, the availability of lactation room, customer lounge, CCTV cameras, 24/7 security and housekeeping team, fire protection system, exhaust blowers, fresh air fans, and pressurization blower.

b. To save on water consumption, most of TMBC’s facilities operate a zero-discharge water treatment facility where recycled water are being used for flushing of water closets.

c. Variable Refrigerant Volume (“VRF”) are also being used as air-condition system to precisely regulate temperature within the building and is proven to be energy efficient.

Policies rolled-out to ensure that the above were met, are:

1. Energy conservation program
2. ISO 14001-2015 for TAS and TDM and on-going application for TMB, TMK and TCI which is set to be accomplished sometime in June 2019.
3. 5S patrol
4. Accreditation policy where TMBC can only engage with the accredited suppliers/vendors. Accreditation process requires compliance to all legal and policies of both LGU and NGU.
5. The human resources team also launches activities through Purple Heart’s club that will support communities where the dealerships are located, such as, among others;
a. Brigada Eskwela
b. Donation of Used Oil
c. Blood donation
d. Paru-paru festival in Dasmarinas, Cavite City
6. TMBC, through Environment Safety and Health section, conducts annual facility audit of the transporter/treater of used oil and filters. This is to ensure that the third-party vendor complies to LLDA and DENRS implementing rules and regulations.

Property Company of Friends, Inc. 

With the foundation for greater sustainability in place, Property Company of Friends, Inc. (“PROFRIENDS”) increased awareness for and support from its stakeholders in practices that promote care for the environment and the underprivileged.

 

PRO-FRIENDS recognizes that the growing population and continuous development of its flagship project, Lancaster New City requires awareness of environmental care among homeowners and LNC stakeholders. With the assistance of the Culture Development Group, an organic unit within the PRO-FRIENDS organization, the LNC Ecology Club for homeowners was formed in 2018. The Club actively mobilized linkages in the community – students and teachers at St. Edward School, homeowners, members of Parish of the Holy Family - to conduct sessions on urban gardening, waste segregation, and ecobricking, among others, that residents can practice in their respective backyards. Lancaster New City Cavite now has over 31,000 trees after over 5,000 seedlings were planted in 2018. Its nursery also was a source of seedlings for the company’s other projects in Cavite and Iloilo.

Opportunities to serve the underprivileged sectors was given to PRO-FRIENDS employees who participated in feeding and wellness programs in barangays surrounding PRO-FRIENDS’ projects, visits to home care facilities for the sick, children with special needs and the elderly, and sending help to victims of calamities in the provinces. A total of 750 children and elders from 37 barangays benefited from companyinitiated activities for 2018 with 150 employees volunteering their personal time.

Federal Land, Inc. 

Federal Land, Inc.’s (“FLI”) programs and practices that support the safety, health and welfare of its customers are guided by its core values. Each of these programs and practices are reviewed regularly to ensure that they continue to remain relevant and beneficial.

In the design and operations of every project FLI consciously looks to provide systems infrastructure, amenities, facilities and services to provide all of the elements necessary for our customers’ well-being. These include all technical safety aspects such as structural systems, fire protection, air quality and noise abatement. FLI also looks to provide services such as repairs and maintenance, insurance, security and sanitation. Furthermore, FLI finds opportunities to provide amenities for health and wellness as well as support facilities such as convenience shops, healthcare, banking and other services where possible.

In support of these programs FLI maintains a feedback system with customers to either validate the provision of services, or identify gaps in their delivery.

On supplier/contractor selection processes, Federal Land has programs in place with the intent to meet time, quality and cost expectations. These programs continuously evolve to meet changing requirements and/or regulatory updates. These include but are not limited to:


• Clear accreditation processes for new suppliers and contractors.
• Transparent procurement policies overseen by FLI’s Bidding Committee.
• Fair evaluations and ratings done on a regular basis to review and ensure the performance of our suppliers/contractors to standards.

In ensuring that the value chain is environmentfriendly and constantly promoting sustainable development, FLI designs, develops and delivers projects that promote energy and natural resource conservation. Our efforts include:

1. Compliance with the Philippine Green Building Code and local city regulations from design to construction.
2. Projects are designed to allow rain water recycling for use in the irrigation of landscaped gardens in the projects.
3. Strategic usage of “low e-glass”, LED lighting and passive cooling to promote energy efficiency.
4. Promotion of the “5S” among its employees in its offices, and implementation of paper recycling within the company, as well as the selling of scrap materials that have generated an income amounting to PhP 19.8M (corporate and joint ventures) from 207 hauling truck trips or an average of 17 trips/month.

Finally, on the interaction with communities, FLI supports the GT-Group effort on “giving back”. FLI supports socio-civic and charitable programs through its main Corporate Social Responsibility arm; “FLI M.O.V.E. Lives”, an employee volunteer program. Federal Land also conducts community outreach activities during calamities, it collaborates with
and supports affiliate companies with their own CSR programs, such as the “Bag of Blessings” and M.A.D.E. (Metrobank Arts and Design Excellence) of the Metrobank Foundation; GT Capital Foundation; and sponsorships of community-based events. With its commitment to continuously serve as a good corporate citizen, Federal Land always takes an active stance in the development of programs to strengthen its relationships with its customers, business
partners, suppliers/contractors, the local and national government, its employees and affiliate companies, and the local communities we operate in.

 

Others 

Integral to GT Capital’s business is corporate social responsibility and environmental sustainability. The Commitment of GT Capital is seen in the activities of the entire GT Capital Group, in particular, Metrobank Foundation, Inc. (“MFI”) and GT Foundation, Inc. (“GTFI”). MFI aims to contribute to achieving sustainable and developed communities while recognizing the efforts of individuals who are integral to nation-building. GTFI invests in strategic programs that advance the development of underprivileged communities. The advocacies of the GT Capital Group are discussed in the Corporate Social Responsibility section while specific activities of MFI and GTFI are discussed in the Component Company Highlights section of the Annual Report.

In 2018, GT Capital established the Purple Hearts’ Club as its corporate social responsibility arm. It aims to train and develop employees to become socially responsible leaders and is tasked with developing and implementing the corporate social responsibility programs of the Corporation.

Shareholder Meetings and Dividend Policy

The Amended By-laws of GT Capital provides for the second Wednesday of May of every year as the date of the Annual Stockholders’ Meeting (“ASM”). The notice of ASM, including the details of each agenda item, is released through a disclosure to the Philippine Stock Exchange at least twenty-eight (28) days before the date of the ASM. The notice of ASM includes the agenda, the record date, the date, time and place of the ASM and the procedure for validation of proxies. The submission of proxies must be done at least five (5) business days prior to ASM. In accordance with the provisions of the Corporation Code of the Philippines, each outstanding common and voting preferred share of stock entitles the holder as of record date to one vote.

As a policy, GT Capital has an annual target dividend payout of PhP 3.00 per share, payable out of its unrestricted retained earnings. GT Capital has consistently met this target, paying the following dividends:

 

Year

Per share

Total amount 

(in million Php)

2018

3.00

577.79

2017

5.00

871.50

2016

6.00

1,045.80

2015

3.00

522.90

2014

3.00

522.90

2013

3.00

522.90

2012

3.00

500.86

 

Other Stakeholder and Investor Relations

GT Capital recognizes and values its fiduciary duty towards its investors. Crucial to the establishment and maintenance of the trust and confidence of its investors is transparency in systems and communications. GT Capital’s Investor Relations Division aims to impart a thorough understanding of GT Capital’s strategies in creating shareholder value.

The Investor Relations Division compiles and reports relevant documents and requirements to meet the needs of the investing public, shareholders and other stakeholders of GT Capital, fully disclosing these to the local stock exchange, as well as through quarterly media and analysts briefings, one-on-one investor meetings, the ASM, road shows, investor conferences, e-mail correspondences or telephone queries, teleconferences, its annual and quarterly reports,
and GT Capital’s website. All shareholders, including institutional investors, are encouraged to attend stockholders’ meetings and other events held for their benefit.

E-mail inquiries from the investing public and shareholders are received by GT Capital’s IRSPCC Department through ir@gtcapital.com.ph. Correspondence may also be addressed to:

JOSE B. CRISOL, JR.
First Vice President
Head, Investor Relations, Strategic Planning, and Corporate Communication
T: (632) 836 4500
E: jose.crisol@gtcapital.com.ph


DAVID LOUIS AUGUSTUS B. DE JESUS
Investor Relations and Strategic Planning Officer
T: (632) 836 4500
E: david.dejesus@gtcapital.com.ph

BRUCE RICARDO O. LOPEZ, CFA
Investor Relations Officer
T: (+632) 836 4500
E: bruce.lopez@gtcapital.com.ph


Other stakeholder concerns may be sent to
governance@gtcapital.com.ph

 

The following is GT Capital’s 2018 Investor Relations Calendar of Events:

 

Date

Event

Venue

10-12 January

DBS Vickers/First Metro Securities Pulse of Asia Confere

The Fullerton Hotel, Singapore

22-23 January

JP Morgan Philippines Conference

Shangri-La Hotel Makati

4 February

GT Capital Photoshoot for Annual Report 2017

GT Tower Penthouse

28 February-01 March

UBS CEO/CFO Philippines Forum

Manila Peninsula, Makati

03 April

Full Year 2018 Briefing

Grand Hyatt Manila, Bonifacio Global City, Taguig

09 May

2018 Annual Stockholders’ Meeting

Metrobank Plaza, Makati

18 May

Sponsorship of BusinessWorld ASEAN Regional Forum

Grand Hyatt Manila, Bonifacio Global City, Taguig

25 July

2018 GT Capital In-House Corporate Governance Seminar

GT Tower International, Makati

15 August

First Half 2018 Analyst and Media Briefing

GT Tower International, Makati

 

16 August

Group Conference Call with International Institutional Investors

GT Tower International, Makati

 

27-29 August

Macquarie ASEAN Conference

Fullerton Hotel, Singapore

30-31 August

GT Capital non-deal roadshow, hosted by UBS Securities Philippines

Various locations, Hong Kong SAR, People’s Republic of China

11-25 September

Synergy Interviews with Component Company Senior Executives

Various locations, Metro Manila

3-4 October

Deutsche Bank dbAccess Conference 2018

Manila Peninsula, Makati

9 October

Sponsorship of Institute of Corporate Directors Sustainability and Corporate Governance Conference 2018

Dusit Thani Hotel, Makati

9 November

GT20 Presidential Forum

Grand Hyatt Manila, Bonifacio Global City, Taguig

9 November

Nine Months 2018 Analyst and Media Briefing

Grand Hyatt Manila, Bonifacio Global City, Taguig

16 November

Company Orientation of GT Capital Independent Director Rene J. Buenaventura

GT Tower International, Makati

21 November

Economic Briefing with Cielito Habito, PhD, Ateneo de Manila
University

GT Tower International, Makati

19-28 November

Strategic Planning Week 2018

GT Tower International, Makati

27-28 November

GT Capital 2018 Strategic Planning Plenary Conference

GT Tower Int’l, Makati (Day 1) Tagaytay, Cavite (Day 2)

1 January – 31 December

45 One-on-one meetings with investors and research analysts

Metro Manila, Philippines

1 January – 31 December

42 Conference calls with investors and research analysts

GT Tower International, Makati

1 January – 31 December

7 Total conference and roadshows participated in; met 113 institutions and 158 individuals

Metro Manila, Philippines

1 January – 31 December

8 Site visits to component companies

Lancaster New City, Cavite, Toyota Manila Bay dealership,
Metro Park, Bay Area, Pasay, Toyota Dasmarinas dealership, Dasmarinas, Cavite, Toyota Global City dealership, Bonifacio Global City, Toyota Makati dealership, Makati, Grand Hyatt Manila, Bonifacio Global City, Taguig

 

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