Camelot Preliminary Prospectus 27sep2017 (Final Clean)

The information in this Preliminary Prospectus is subject to completion and amendment in the final prospectus.
No offer or invitation shall be made or
PRELIMINARY PROSPECTUS STRICTLY CONFIDENTIAL
Cirtek Holdings Philippines Corporation

received, and no agreement shall be made, on the basis of this document, to purchase or subscribe for any Offer Shares.
(incorporated in the Republic of the Philippines)
Primary Offer of up to 120,000,000 Preferred B-2 Shares,

with an oversubscription option of up to 80,000,000 Preferred B-2 Shares
at an Offer Price of US$1.00 per Share
to be listed and traded on the Main Board of The Philippine Stock Exchange, Inc.
Sole Issue Manager and Bookrunner
Joint Lead Underwriters
Selling Agents
Trading Participants of The Philippine Stock Exchange, Inc. that are Eligible Brokers
The date of this Preliminary Prospectus is 27 September 2017
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE

SECURITIES OR DETERMINED IF THIS PRELIMINARY PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE AND SHOULD BE REPORTED IMMEDIATELY TO THE
SECURITIES AND EXCHANGE COMMISSION.
116 East Main Avenue, Phase V-SEZ
Laguna Technopark
Bian, Laguna
Tel.nos. +632 729 6206 and +6349 541 2317
Corporate Website: www.cirtekholdings.com
This Preliminary Prospectus relates to the offer and sale, of up to 200,000,000 cumulative, non-voting, non-
participating, non-convertible, redeemable preferred shares (the Preferred B-2 Shares), with a par value
of PHP1.00 per preferred share (the Offer), of Cirtek Holdings Philippines Corporation, a corporation
organized and existing under the laws of the Philippines (the Company or the Issuer), to be listed and
traded on the Main Board of the Philippine Stock Exchange (the PSE).
The Preferred B-2 Shares are being offered for subscription solely in the Philippines through BPI Capital
Corporation (BPI Capital or the Sole Issue Manager) and RCBC Capital Corporation (RCBC Capital
and together with BPI Capital, the (Joint Lead Underwriters) and the Selling agents named herein at an
offer price of US$1.00 per Offer Share (the Offer Price). The determination of the Offer Price is further
discussed on page 81 of this Preliminary Prospectus.
The Offer is for a total of up to 200,000,000 Preferred B-2 Shares (the Offer Shares) with a base offer of
up to 120,000,000 Preferred B-2 Shares (the Firm Shares). In the event of oversubscription, the Joint
Lead Underwriters, in consultation with the Company, reserve the right, but not the obligation, to increase
the Offer size by up to an additional 80,000,000 Preferred B-2 Shares (the Oversubscription Option,
and the Preferred B-2 Shares pertaining to such option, the Oversubscription Option Shares), subject
to the registration requirements of the Securities and Exchange Commission (SEC). The specific terms
and conditions of the Offer are set out in the relevant sections of this Preliminary Prospectus. Upon listing
with the PSE, the Preferred B-2 Shares (or the Offer Shares which are subject of the Offer) will be traded
under the symbol [].
On May 26, 2017, the Companys stockholders approved the increase in the authorized capital stock of the
Company from 520,000,000 to 2,000,000,000 divided into the following shares: (i) from 520,000,000
to 1,400,000,000 worth of common shares (Common Shares); (ii) from 40,000,000 to 140,000,000
worth of preferred shares with a par value of 0.10 per share (the Preferred A Shares); and (iii) the
creation of new preferred shares amounting to 460,000,000 with a par value of 1.00 per share (the
Preferred B Shares, and together with the Preferred A Shares, the Preferred Shares). The
stockholders delegated to the board of directors (the Board) the power and authority to: (i) implement the
proposed increase in the Companys authorized capital stock, and (ii) fix the terms and conditions of the
Preferred B Shares as they may be issued in tranches and series. Pursuant to such delegated authority to
the Board, on September 8, the Board partially implemented the increase in authorized capital stock to
860,000,000 and fixed the general terms and conditions of the Preferred B Shares as discussed on page
36 of this Preliminary Prospectus.
As of the date of this Preliminary Prospectus and subject to the approval of the SEC of the pending
application for increase of authorized capital stock, the Company has an authorized capital stock of
860,000,000 divided into: (i) 520,000,000 Common Shares with a par value of 1.00 per share and
340,000,000 worth of Preferred Shares classified into: (i) 70,000,000 worth of Preferred A Shares divided
into 700,000,000 Preferred A Shares with a par value of 0.10 per share, and (ii) 270,000,000 worth of
Preferred B Shares with a par value of 1.00 per share. The Preferred B Shares are further classified into
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the following series: (i) 70,000,000 worth of Preferred B-1 Shares, and (ii) 200,000,000 worth of
Preferred B-2 Shares, both having a par value of 1.00 per share. Following the Offer and with the full
exercise of the Oversubscription Option, the Company will have an outstanding capital stock of (i)
419,063,353 Common Shares, (ii) 300,000,000 Preferred A Shares, (iii) 70,000,000 Preferred B-1 Shares,
and (iv) up to 200,000,000 Preferred B-2 Shares.
The total gross proceeds to be raised by the Company from the sale of the Firm Shares will be US$120.0
million. The estimated net proceeds to be raised by the Company from the sale of the Firm Shares after
deducting fees and expenses payable by the Company of approximately US$945,000 will be approximately
US$ 119.0 million. In the event the Oversubscription Option is exercised in full, the total gross proceeds to
be raised by the Company from the sale of the Offer Shares will be US$200 million and the estimated net
proceeds to be raised by the Company from the sale of Option Shares (after deducting fees and expenses
payable of approximately US$1.5 million) will be approximately US$198.5 million. The Company intends to
use the net proceeds it receives from the Offer for (1) payment of financial obligations, (2) to fund strategic
acquisitions, (3) for working capital requirements, (4) for capital expenditures, and (5) for research and
development. For a more detailed discussion on the Companys proposed use of proceeds, please see
Use of Proceeds beginning on page 74 of this Preliminary Prospectus.
The underwriting and selling fees to be paid by the Company in relation to the Offer shall be equivalent to
[0.50%] of the gross proceeds of the Offer. This shall be inclusive of fees paid to BPI Capital and RCBC
Capital, in their capacities as the Joint Lead Underwriters, and inclusive of commissions to be paid to the
Trading Participants of the PSE (i.e. The Selling Agents). The commission payable to a Selling Agent shall
be equivalent to []% of the total proceeds of the sale of the Offer Shares by such Trading Participant.
Please see Plan of Distribution on page 78 of this Preliminary Prospectus.
The determination of the dividend rate of the Preferred B-2 Shares shall be through a book-building process,
as well as discussions between the Company and the Joint Lead Underwriters.
As and if cash dividends are declared by the Board of Directors of the Company, cash dividends on the
Preferred B-2 Shares shall be at a fixed rate per annum calculated in respect of each Preferred B-2 Share
by reference to the Offer Price thereof in respect of each Dividend Period. See Description of the Preferred
B-2 Shares on page 49 of this Prospectus and the Terms and Conditions of the Offer on page 36 of this
Preliminary Prospectus.
The Preferred B-2 Shares shall bear cumulative, non-participating cash dividends payable on [] as the
first dividend payment date, and thereafter every [],[],[] of each year (each, a Dividend Payment
Date), being the last day of each 3-month period (each, a Dividend Period) following the date of issue
of such Preferred B-2 Shares (the Issue Date). If the Dividend Payment Date is not a Business Day,
dividends will be paid on the next succeeding Business Day, without adjustments as to the amount of
dividends to be paid. See Description of the Preferred B-2 Shares on page 49 of this Preliminary
Prospectus and the Terms and Conditions of the Offer on page 36 of this Prospectus.
The dividends on the Preferred B-2 Shares will be calculated on a 30/360-day basis for each Dividend
Period.
As and if declared by its Board and subject to the requirements of applicable laws and regulations, the
Issuer may redeem the Preferred B-2 Shares in whole and not in part without the consent of the holder(s)
of such Preferred B-2 Shares, after giving not less than 30 nor more than 60 days written notice prior to the
intended date of redemption:
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a) on the fifth anniversary from the Issue Date or on any Dividend Payment Date thereafter (each, an
Optional Redemption Date); or
b) at any time, if an Accounting Event, Tax Event or a Change of Control Event (each as defined
under the Terms and Conditions of the Offer on page 36 of this Preliminary Prospectus) has
occurred and is continuing (the Early Redemption Date).
See Description of the Preferred B-2 Shares on page 49 of this Preliminary Prospectus and the Terms
and Conditions of the Offer on page 36 of this Preliminary Prospectus for a more detailed discussion on
redemption of the Preferred B-2 Shares.
The Issuer plans to issue the Preferred B-2 Shares to institutional and retail investors in the Philippines
through a public offering to be conducted by the Joint Lead Underwriters. The detailed plan of distribution
and underwriting arrangements shall be as set out under Plan of Distribution on page 78 of this Preliminary
Prospectus.
After Listing Date, the Issuer may purchase the Preferred B-2 Shares at any time in the open market or by
public tender or by private contract at any price through the PSE. The Preferred B-2 Shares so purchased
may either be redeemed (pursuant to the terms and conditions of redemption as set out in this Preliminary
Prospectus) and cancelled or kept as treasury shares.
All of the Preferred B-2 Shares to be sold pursuant to the Offer have identical rights and privileges. Any
person or entity, regardless of citizenship or nationality, may own the Preferred B-2 Shares. The Philippine
Constitution and related statutes set forth restrictions on foreign ownership for companies engaged in
certain activities. The Issuer reserves the right to issue additional preferred shares which shall rank at least
pari passu in all respects with the Preferred B-2 Shares.
No dealer, salesman, or any other person has been authorized to give any information or to make any
representation not contained in this Preliminary Prospectus. If given or made, any such information or
representation must not be relied upon as having been authorized by the Company or the Joint Lead
Underwriters. The distribution of this Preliminary Prospectus and the offer and sale of the Shares may, in
certain jurisdictions, be restricted by law. The Company and the Joint Lead Underwriters require persons
into whose possession this Preliminary Prospectus comes, to inform themselves of and observe all such
restrictions. This Preliminary Prospectus does not constitute an offer of any securities, or any offer to sell,
or a solicitation of any offer to buy any securities of the Company in any jurisdiction, to or from any person
to whom it is unlawful to make such offer in such jurisdiction.
The information contained in this Preliminary Prospectus relating to the Company and its operations has
been supplied by the Company, unless otherwise stated herein. To the best of its knowledge and belief,
the Company, which has taken reasonable care to ensure that such is the case, confirms that the
information contained in this Preliminary Prospectus relating to it and its operations is correct, and that
there is no material misstatement or omission of fact which would make any statement in this Preliminary
Prospectus misleading in any material respect and that the Company hereby accepts full and sole
responsibility for the accuracy of the information contained in this Prospectus with respect to the same.
Unless otherwise indicated, all information in this Preliminary Prospectus is as of the date of this Preliminary
Prospectus. Neither the delivery of this Preliminary Prospectus nor any sale made pursuant to this
Preliminary Prospectus shall, under any circumstance, create any implication that the information contained
herein is correct as of any date subsequent to the date hereof or that there has been no change in the
affairs of the Company since such date.
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Each person contemplating an investment in the Shares should make his own investigation and analysis
of the creditworthiness of the Company and his own determination of the suitability of any such investment.
Before making an investment decision, investors should carefully consider the risks associated with an
investment in the Preferred B-2 Shares. These risks include:
risks relating to the Companys business,

risks relating to countries where the Company operates (including the Philippines),
risks relating to the Offer and the Offer Shares, and
risks relating to certain statistical information in this Prospectus.
Please refer to the section entitled Risk Factors beginning on page 58 of this Preliminary Prospectus,
which, while not intended to be an exhaustive enumeration of all risks, must be considered in connection
with a purchase of the Offer Shares.
The Company filed an application with the SEC to register the Preferred B-2 Shares under the provisions
of the Securities Regulation Code of the Philippines (Republic Act No. 8799 or the SRC) and its
implementing regulations (the SRC Rules). [The SEC is expected to issue an order rendering the
Registration Statement filed by the Company effective and a corresponding permit to offer securities for
sale covering the Offer.]
An application filed by the Company with the PSE for the listing of the Preferred B-2 Shares on the Main
Board of the PSE was approved on []. An approval for listing is permissive only and does not constitute a
recommendation or endorsement by the PSE or the SEC of the Preferred B-2 Shares. The PSE assumes
no responsibility for the correctness of any of the statements made or opinions expressed on this
Preliminary Prospectus. Furthermore, the PSE makes no representation as to the completeness and
expressly disclaims any liability whatsoever for any loss arising from or in reliance upon the whole or any
part of the contents of the Preliminary Prospectus.
On November 10, 2016, the SEC approved the PSE Rules on Dollar Denominated Securities (the PSE
DDS Rules). The PSE officially released the final PSE DDS Rules on December 2, 2016. The PSE DDS
Rules shall govern the listing, trading and settlement of Dollar Denominated Securities (DDS), such as
the Preferred B-2 Shares. DDS are securities denominated in U.S. dollars which are listed and traded on
the PSE. The PSE DDS Rules shall be read in conjunction with the SRC and the SRC Rules, Bangko
Sentral ng Pilipinas (BSP) regulations, and other relevant laws, rules and regulations and shall form part
of all rules of the PSE. All rules of the PSE, the Securities Clearing Corporation of the Philippines (SCCP)
and the Capital Markets Integrity Corporation (CMIC) not inconsistent with the PSE DDS Rules shall apply
to the DDS.
The Company has filed an application to the BSP requesting for approval on the issuance of the Preferred
B-2 Shares.
The Offer Shares are offered subject to receipt and acceptance of any order by the Company and subject
to its right to reject any order in whole or in part. It is expected that the Offer Shares will be delivered in
book-entry form against payment to the Philippine Depository and Trust Corporation (the PDTC).
A REGISTRATION STATEMENT RELATING TO THE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BEEN DECLARED EFFECTIVE. NO
OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE
CAN BE RECEIVED UNTIL THE REGISTRATION STATEMENT HAS BECOME EFFECTIVE THEREBY,
AND ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR
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COMMITMENT OF ANY KIND, AT ANY TIME PRIOR TO NOTICE OF ITS ACCEPTANCE. AN
INDICATION OF INTEREST IN RESPONSE HERETO INVOLVES NO OBLIGATION OR COMMITMENT
OF ANY KIND. THIS PRELIMINARY PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR BE CONSIDERED A SOLICITATION OF AN OFFER TO BUY ANY PREFERRED B-2 SHARES.
By:
(originally signed)
[Name]
[Position]
Republic of the Philippines)
City of Makati) s.s.
Before me, a notary public in and for the city named above, personally appeared with [ID details] issued at
[Location] on [Date], who was identified by me through competent evidence of identity to be the same
person who presented the foregoing instrument and signed the instrument in my presence, and who took
an oath before me as to such instrument.
Witness my hand and seal this ___day of _______ 2017 at [Location],
Doc No. _________:

Book No. ________:
Page No. ________:
Series of 2017
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No representation or warranty, express or implied, is made by the Company and the Joint Lead
Underwriters regarding the legality of an investment in the Offer Shares under any legal, investment, or
similar laws or regulations. No representation or warranty, express or implied, is made by the Joint Lead
Underwriters as to the accuracy or completeness of the information herein and nothing contained in this
Preliminary Prospectus is, or shall be relied upon as, a promise or representation by the Joint Lead
Underwriters. The contents of this Preliminary Prospectus are not investment, legal, or tax advice.
Prospective investors should consult their own counsel, accountant, and other advisors as to legal, tax,
business, financial, and related aspects of a purchase of the Offer Shares. In making any investment
decision regarding the Offer Shares, prospective investors must rely on their own examination of the
Company and the terms of the Offer, including the merits and risks involved. Any reproduction or distribution
of this Preliminary Prospectus, in whole or in part, and any disclosure of its contents or use of any
information herein for any purpose other than considering an investment in the Offer Shares is prohibited.
THE OFFER SHARES ARE BEING OFFERED IN THE PHILIPPINES ON THE BASIS OF THIS
PRELIMINARY PROSPECTUS ONLY. ANY DECISION TO PURCHASE THE OFFER SHARES IN THE
PHILIPPINES MUST BE BASED ONLY ON THE INFORMATION CONTAINED HEREIN.
No person has been authorized to give any information or to make any representations other than those
contained in this Preliminary Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company and the Joint Lead Underwriters. This
Preliminary Prospectus does not constitute an offer to sell or the solicitation of an offer to purchase any
securities other than the Offer Shares or an offer to sell or the solicitation of an offer to purchase such
securities by any person in any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this Preliminary Prospectus nor any sale of the Offer Shares offered hereby shall, under any
circumstances, create any implication that there has been no change in the affairs of the Company since
the date hereof or that the information contained herein is correct as of any time subsequent to the date
hereof.
Market data used throughout this Preliminary Prospectus has been obtained from market research, reports
and studies, publicly available information and industry publications. Industry publications generally state
that the information that they contain has been obtained from sources believed to be reliable but that the
accuracy and completeness of that information is not guaranteed. Similarly, industry forecasts, market
research, and the underlying economic assumptions relied upon therein, while believed to be reliable, have
not been independently verified, and neither the Company nor the Joint Lead Underwriters make any
representation as to the accuracy of that information.
The operating information used throughout this Preliminary Prospectus has been calculated by the
Company on the basis of certain assumptions made by it. As a result, this operating information may not
be comparable to similar operating information reported by other companies.
The distribution of this Preliminary Prospectus and the offer and sale of the Offer Shares in certain
jurisdictions may be restricted by law. The Company and the Joint Lead Underwriters require persons into
whose possession this Preliminary Prospectus comes to inform themselves about and to observe any such
restrictions. This Preliminary Prospectus does not constitute an offer of, or an invitation to purchase, any of
the Offer Shares in any jurisdiction in which such offer or invitation would be unlawful. Each prospective
purchaser of the Offer Shares must comply with all applicable laws and regulations in force in any
jurisdiction in which it purchases, offers, sells, or resells the Offer Shares or possesses and distributes this
Preliminary Prospectus and must obtain any consent, approval, or permission required for the purchase,
offer, sale, or resale by it of the Offer Shares under the laws, rules and regulations in force in any jurisdiction
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to which it is subject or in which it makes such purchases, offers, sales, or resales, and neither the Company
nor the Joint Lead Underwriters shall have any responsibility therefor.
The Company reserves the right to withdraw the offer and sale of Offer Shares at any time, and the Joint
Lead Underwriters reserve the right to reject any commitment to subscribe for the Offer Shares in whole or
in part and to allot to any prospective purchaser less than the full amount of the Offer Shares sought by
such purchaser. If the Offer is withdrawn or discontinued, the Company shall subsequently notify the SEC
and the PSE. The Joint Lead Underwriters and certain related entities may acquire for their own account a
portion of the Offer Shares.
Each offeree of the Offer Shares, by accepting delivery of this Preliminary Prospectus, agrees to the
foregoing.
Conventions which apply to this Preliminary Prospectus
In this Preliminary Prospectus, unless otherwise specified or the context otherwise requires, all references
to the Company or "Cirtek Group" are to Cirtek Holdings Philippines Corporation and its Subsidiaries on
a consolidated basis and all references to the Parent Company are to Cirtek Holdings Philippines
Corporation. All references to the Philippines are references to the Republic of the Philippines. All
references to the Government are to the national government of the Philippines. All references to United
States or U.S. are to the United States of America. All references to Taiwan are to the Republic of
China. All references to China are to the Peoples Republic of China and, for the purpose of this
Preliminary Prospectus only, excluding Hong Kong, the Macau Special Administrative Region and Taiwan.
All references to Philippine Peso, Pesos and are to the lawful currency of the Philippines, and all
references to U.S. dollars and US$ are to the lawful currency of the United States. The Company
publishes its financial statements in U.S. dollars.
The items expressed in the Glossary of Terms may be defined otherwise by appropriate government
agencies or regulations from time to time, or by conventional or industry usage.
Presentation of Financial Information
The Companys financial statements are reported in U.S. dollars and are prepared based on its accounting
policies, which are in accordance with the Philippine Financial Reporting Standards (PFRS) issued by the
Financial Reporting Standards Council of the Philippines.
The financial information of the Company as of 30 June 2017 and for the six months ended 30 June 2016,
and as of 31 December 2016 and 2015 and for each of the three years in the period ended 31 December
2016 represent the accounts of the Company on a consolidated basis. Unless otherwise stated, all financial
information relating to the Company contained herein is stated in accordance with PFRS. In this Preliminary
Prospectus, references to 2016 and 2015 refer to the years ended 31 December 2016 and 31 December
2015.
The Companys fiscal year begins on 1 January and ends on 31 December of each year.
SyCipGorresVelayo Co. (SGV & Co.), a member firm of Ernst & Young Global Limited, has audited and
rendered an unqualified audit report on the Companys consolidated financial statements as of 31
December 2016 and 2015 and for each of the three years in the period ended 31 December 2016.
The unaudited interim condensed consolidated financial statements as of 30 June 2017 and for the six
months ended 30 June 2016 and 2015 prepared in accordance with PFRS were reviewed by SGV & Co.
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in accordance with Philippine Standards on Review Engagements 2410, Review of Interim Financial
Information Performed By Independent Auditor of the Entity (PSRE 2410). A review conducted in
accordance with PSRE 2410 is substantially less in scope than an audit conducted in accordance with
Philippine Standards on Auditing and, as stated in its review report included in this Preliminary Prospectus,
SGV & Co. did not audit and does not express any opinion on such unaudited interim condensed
consolidated financial statements. Accordingly, the degree of reliance on its review report on such
information should be restricted in light of the limited nature of the review procedures applied.
The unaudited pro forma condensed consolidated financial information of The Company as at 30 June 2017
and 31 December 2016 and for the six months ended 30 June 2017 and year ended 31 December 2016
have been reviewed by SGV & Co, independent auditors, in accordance with Philippine Standards on
Assurance Engagements 3000, Assurance Engagements Other than Audits or Reviews of Historical
Financial Information (PSAE 3000) and Philippine Securities and Exchange Commission Memorandum
Circular No. 2, Series of 2008, Guidelines on Reporting and Attestation of Pro Forma Financial Information
Securities and Regulation Code Rule 68, as amended, as set forth in their report thereon appearing
elsewhere in this Prospectus.
Figures in this Preliminary Prospectus have been subject to rounding adjustments. Accordingly, figures
shown in the same item of information may vary, and figures which are totals may not be an arithmetic
aggregate of their components.
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TABLE OF CONTENTS
FORWARD LOOKING STATEMENTS ....................................................................................................... 11

GLOSSARY OF TERMS ............................................................................................................................. 13
EXECUTIVE SUMMARY ............................................................................................................................ 20
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION ................................................................ 25
SUMMARY OF UNAUDITED PRO FORMA CONSOLIDATED FINANCIALINFORMATION .................... 29
TERMS AND CONDITIONS OF THE OFFER ............................................................................................ 36
DESCRIPTION OF THE PREFERRED B-2 SHARES ............................................................................... 49
RISK FACTORS .......................................................................................................................................... 58
USE OF PROCEEDS .................................................................................................................................. 74
PLAN OF DISTRIBUTION .......................................................................................................................... 78
DETERMINATION OF OFFER PRICE ....................................................................................................... 81
DIVIDENDS AND DIVIDEND POLICY ....................................................................................................... 82
CAPITALIZATION AND INDEBTEDNESS ................................................................................................. 84
DILUTION.................................................................................................................................................... 85
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS ............................................................................................................................................. 86
COMPANY DESCRIPTION ...................................................................................................................... 107
REGULATORY AND ENVIRONMENTAL MATTERS .............................................................................. 139
BOARD OF DIRECTORS AND SENIOR MANAGEMENT ....................................................................... 144
OWNERSHIP ............................................................................................................................................ 150
RELATED PARTY TRANSACTIONS ....................................................................................................... 152
PHILIPPINE TAXATION ........................................................................................................................... 156
THE PHILIPPINE STOCK MARKET ......................................................................................................... 162
LEGAL MATTERS .................................................................................................................................... 171
INDEPENDENT AUDITORS ..................................................................................................................... 172
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS ..................................................... 174
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FORWARD LOOKING STATEMENTS
This Preliminary Prospectus contains forward-looking statements that are, by their nature, subject to
significant risks and uncertainties. These forward-looking statements include, without limitation, statements
relating to:
known and unknown risks,

uncertainties and other factors that may cause the Companys actual results, performance or
achievements to be materially different from expected future results, and
performance or achievements expressed or implied by forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding the Companys present
and future business strategies and the environment in which the Company will operate in the future.
Important factors that could cause some or all of the assumptions not to occur or cause actual results,
performance or achievements to differ materially from those in the forward-looking statements include,
among other things:
the Companys ability to successfully manage its activities,

the Companys ability to successfully implement its current and future strategies,
the Companys ability to successfully manage aggressive growth,
changes in the Philippine electronics manufacturing, assembly and test services market and
the demand for the Companys electronic products and services,
the Companys ability to maintain its reputation for safety-driven and quality products ,
the Companys ability to develop products and provide services without delays due to
regulatory or other causes,
the Companys ability to successfully manage its future business, financial condition, results of
operations, and cash flow,
general political, social, and economic conditions and changes in the countries where the
Company operates,
any future political instability in the countries where the Company operates,
changes in interest rates, inflation rates, and the value of the Peso against the U.S. dollar and
other currencies,
changes in the laws, including tax laws, regulations, policies and licenses applicable to or
affecting the Company,
the Companys subsidiaries continued enjoyment of tax incentives, such as its current income
tax holiday with respect to its operations,
competition in the electronics manufacturing, assembly and test services industry,
legal or regulatory proceedings in which the Company is or may become involved, and
uncontrollable events, such as war, civil unrest or acts of international or domestic terrorism,
the outbreak of contagious diseases, accidents and natural disasters.
Additional factors that could cause the Companys actual results, performance or achievements to differ
materially from forward-looking statements include, but are not limited to, those disclosed under Risk
Factors and elsewhere in this Preliminary Prospectus. These forward-looking statements speak only as of
the date of this Preliminary Prospectus. The Company and the Joint Lead Underwriters expressly disclaim
any obligation or undertaking to release, publicly or otherwise, any updates or revisions to any forward-
looking statement contained herein to reflect any change in the Companys expectations with regard thereto
or any change in events, conditions, assumptions, or circumstances on which any statement is based.
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This Preliminary Prospectus includes statements regarding the Companys expectations and projections
for future operating performance and business prospects. The words believe, plan, expect, anticipate,
estimate, project, intend, seek, target, aim, may, might, will, would, could, and similar
words identify forward-looking statements. In addition, all statements other than statements of historical
facts included in this Preliminary Prospectus are forward-looking statements. Statements in this Preliminary
Prospectus as to the opinions, beliefs and intentions of the Company accurately reflect in all material
respects the opinions, beliefs and intentions of its management as to such matters as of the date of this
Preliminary Prospectus, although the Company gives no assurance that such opinions or beliefs will prove
to be correct or that such intentions will not change. This Preliminary Prospectus discloses, under the
section Risk Factors and elsewhere, important factors that could cause actual results to differ materially
from the Companys expectations. All subsequent written and oral forward-looking statements attributable
to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by the
above cautionary statements.
The Company and the Joint Lead Underwriters have exercised due diligence in ascertaining that all material
representations contained in the prospectus and any amendments and supplements are true and correct,
and that no material information was omitted, which was necessary in order to make the statements
contained in said documents not misleading.
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GLOSSARY OF TERMS
In this Prospectus, unless the context otherwise requires, the following terms shall have the meanings set
forth below.
AOI Automatic Optical Inspection
Application the documents to purchase or subscribe to the Offer Shares
Articles the Articles of Incorporation of the Company
Banking Day or a day on which commercial banks are open for business in
Business Day Makati City, Metro Manila and Laguna
BER Bit Error Rate
BIR Bureau of Internal Revenue
Board of the Board of Directors of the Company

Directors or
Board
BOI Board of Investments, the lead investments promotion agency of the Philippines
Box-Build the electromechanical assembly process involving enclosure fabrication, installation of

sub-assemblies and components, and installation and routing of cabling or wire
harnesses
BPSK Binary Phase Shift Keying
BSP Bangko Sentral ng Pilipinas, the Central Bank of the Philippines
By-Laws the By-Laws of the Company
CAGR Compound annual growth rate
Camerton Camerton, Inc., the principal shareholder of the Company
CATSI Cirtek Advanced Technologies and Solutions, Inc.
Cayon Cayon Holdings, Inc.
CEC Cirtek Electronics Corporation, a Philippine company
CEIC Cirtek Electronics International Corporation, a British Virgin Islands company
Charmview Charmview Enterprises, Ltd, ,
CHI Cirtek Holdings, Inc.
CLC Cirtek Land Corporation
Common Shares common shares of the Company with a par value of P1.00 per share
13
CHPC or Cirtek Cirtek Holdings Philippines Corporation, a corporation incorporated in the Philippines;
or Cirtek Group references to the Company include references to its Subsidiaries, unless the context
or Company otherwise requires
Issuer or
Company or
TECH
COA Commission on Audit
Congress the Congress of the Philippines, which comprises the House of Representatives
and the Senate
CTT code name for RBWIs 2nd generation radio (after MRI)
DDS securities denominated in U.S. dollars which are listed and traded on the PSE
Debt-to-Equity the Companys total bank borrowings divided by its total equity attributable to the
Ratio equity holders of the Parent Company as described in the Consolidated Financial
Statements included in this Preliminary Prospectus
DENR Department of Environment and Natural Resources
DENR-EMB Department of Natural Resources, Environmental Management Bureau
DFN Dual flat leadless package
Director(s) the director(s) of the Company
DOLE Department of Labor and Employment
EBITDA earnings before interest, taxes, depreciation and amortization
ECC Environmental Compliance Certificate
EDGE Electronic Disclosure Generation Technology
EIS Environmental Impact Statement
Eligible Brokers Trading Participants of the PSE eligible to trade DDS
Eligible Applicants who are qualified to subscribe to the Offer Shares

Investors
EMB Environmental Management Bureau
EMS Electronics Manufacturing Services
FCC certifies that the electromagnetic interference from the device is under limits approved
Certification by the Federal Communications Commission
Government the national government of the Republic of the Philippines
IC Integrated Circuits
IDM Integrated Device Manufacturer
14
IPP Investment Priorities Plan, an annual publication by the BOI that defines the
areas of business that it intends to promote
IRFU Indoor Radio Frequency Unit
IRRs Implementing Rules and Regulations of the SRC, as amended
ISO9001 the international standard that specifies requirements for a quality management
system (QMS)
ISO14001 the international standard that specifies requirements for environmental management
system (EMS)
Joint Lead BPI Capital Corporation, RCBC Capital Corporation and []

Underwriters
LGU Local Government Unit
LLDA Laguna Lake Development Authority
LMC Labor Management Council
MIC Monolithic Integrated Circuit
microwave region of the electromagnetic spectrum which corresponds to radio band frequencies
of 300 MHz to 300 GHz
millimeter wave region of the electromagnetic spectrum corresponds to radio band frequencies of 30
GHz to 300 GHz
MPO minimum public ownership
MTBF Mean Time Between Failure. It is a way of measuring how good an equipment is,
usually in hours between failure.
NPI New Product Information
ODFN Optical Dual Flat No lead. It is a DFN package that uses clear or transparent mold
compound.
ODM Original Design Manufacturer
ODU Out Door Unit
OEMs Original Equipment Manufacturers
Offer the offer and sale of the Offer Shares
Offer Price US$1.00 per Offer Share
Offer Shares the Preferred B-2 Shares
OIPR Outdoor Internet Protocol Radio
OSAT Outsourced Semiconductor Assembly & Test
15
Oversubscription The right of the Joint Lead Underwriters, with the consent of the Company, to increase
Option the size of the Offer by up to 80,000,000 Preferred B-2 Shares in case of an
oversubscription
Oversubscription Up to 80,000,000 Preferred B-2 Shares subject of the Oversubscription Option

Option Shares
PCBA Printed Circuit Board Assembly
PDIP Plastic Dual-In-Line Package
PDTC the Philippine Depositary & Trust Corporation
Pesos, the legal currency of the Republic of the Philippines

Philippine
Pesos, and
Philippine
currency
PEZA Philippine Economic Zone Authority
PFRS Philippine Financial Reporting Standards
Philhealth Philippine Health Insurance Corporation
Philippine also known as the 1987 Constitution, the supreme law of the Republic of the
Constitution Philippines
Philippine Batas Pambansa Blg. 68, also known as the Corporation Code of the Philippines
Corporation
Code
Philippine The term shall mean any of the following: (1) a citizen of the Philippines; or (2) a
Nationals domestic partnership or association wholly owned by citizens of the Philippines; or (3)
a corporation organized under the laws of the Philippines of which at least 60% of the
capital stock outstanding and entitled to vote is owned and held by citizens of the
Philippines; or (4) a corporation organized abroad and registered as doing business in
the Philippines under the Corporation Code of which 100% of the capital stock
outstanding and entitled to vote is wholly owned by Filipinos or (5) a trustee of funds
for pension or other employee retirement or separation benefits, where the trustee is
a Philippine national and at least 60% of the fund will accrue to the benefit of the
Philippine nationals. Where a corporation and its non-Filipino stockholders own
stocks in an SEC- registered enterprise, at least 60% of the capital stock outstanding
and entitled to vote of both corporations must be owned and held by citizens of the
Philippines and at least 60% of the members of the Board of Directors of both
Philippines, in order that the corporations shall be considered a Philippine national
corporations must be citizens of the Philippines.
PQFN Power Quad Flat No leads
Preferred A the 70,000,000 worth of Preferred Shares divided into 700,000,000 Preferred Shares
Shares with a par value of 0.10 per share, which have full voting rights, entitled to non-
cumulative cash dividends at the rate of one per cent (1%) of their par value per year,
and with no participation in further cash or stock dividends which may be declared and
paid to the common shares or any other class or series of shares, as stated in the
Companys Articles of Incorporation.
16
Preferred B-1 The 70,000,000 worth of Preferred Shares divided into 70,000,000 Preferred Shares
Shares with a par value of 1.00 per share which shall have the rights, preferences and
privileges embodied in the enabling resolutions dated [].
Preferred B-2 the up to 200,000,000 worth of Preferred Shares divided into up to 200,000,000 Offer
Shares Shares which shall have the rights, preferences and privileges embodied in the
enabling resolutions dated [] and in the Terms and Conditions of the Offer on page
Principal Camerton, Inc.

Shareholder
Prospectus This Preliminary Prospectus together with all its annexes, appendices and
amendments, if any
PSA Philippine Standards on Auditing
PSE The Philippine Stock Exchange, Inc.
PSE DDS Rules PSE Rules on Dollar Denominated Securities
PSE Trading the trading participants of the PSE in the Philippines

Participants
PSRE Philippine Standards on Review Engagements
QFN Quad flat pack leadless package
QIB a qualified institutional buyer, refers to any of the following: (i) banks, (ii) registered
investment houses, (iii) insurance companies, (iv) pension funds or retirement plans
maintained by the Government or any political subdivision thereof or managed by a
bank or other persons authorized by the BSP to engage in trust functions; (v)
investment companies; or (vi) such other persons as the SEC may by rule determine
as qualified buyers on the basis of such factors such as financial sophistication, net
worth, knowledge and experience in financial and business matters, or amount of
assets under management.
To be considered a qualified buyer, the person (natural or judicial) must register as

such with an authorized registrar, and submit proof evidencing the following: (a) total
portfolio of securities; (b) annual gross income; (c) their net worth; and (d) threshold
risk (low, medium, high risk).
A natural person must possess the following qualifications: (a) has an annual gross
income of at least PHP 10 million at least two years prior to registration, or a total
portfolio investment in securities registered with the SEC of at least PHP 10 million, or
a total personal net worth of not less than PHP 30 million; and (b) has been engaged
in securities trading personally or through a fund manager for a minimum period of one
year, or has held for at least two years a position of responsibility in any professional
business entity that requires knowledge or expertise in securities trading, such as,
legal consultant, financial adviser, sales person, or associated person of a broker-
dealer, bank finance or treasury officer, trust officer or other similar executive officers.
If the buyer is a juridical person, it must, at the time of registration with an authorized
registrar, possess the following: (a) have gross assets of at least PHP 100 million; or
(b) a total portfolio investment in securities registered with the SEC or financial
instruments issued by the government of at least PHP 60 million.
17
QS9000 a company level certification based on quality system requirements related specifically
to the automotive industry
Quintel Quintel Cayman Ltd. and its subsidiaries, Quintel Technology Ltd. and Quintel USA,
Inc.
Quintel Quintel Technology Ltd. and Quintel USA, Inc.

Solutions
R.A. Republic Act, which refers to a statute enacted by the Senate or the House of
Representatives
RBWI REMEC Broadband Wireless International, Inc.
Receiving Agent BDO Unibank, Inc. Trust and Investments Group
REMEC REMEC Broadband Wireless Holdings, Inc.
RF Radio frequency
SBFZ Subic Bay Freeport Zone
SCCP Securities Clearing Corporation of the Philippines
SEC the Philippine Securities and Exchange Commission
Senate the Senate of the Philippines, one of the two branches of the Congress
Selling Agents PSE Trading Participants
SOIC Small-outline integrated circuit
Sole Issue BPI Capital Corporation

Manager
SRC R.A. No. 8799, also known as the Securities Regulation Code of the Philippines
SSS the Republic of the Philippines' Social Security System
Stock Transfer BDO Unibank, Inc. Trust and Investments Group

Agent
Subsidiaries Cirtek Electronics Corporation, Cirtek Electronics International Corporation,

Cirtek Advanced Technologies and Solutions, Inc. and/or Quintel
TS16949 the ISO technical specification aimed at the development of a quality management
system that emphasizes defect prevention and the reduction of variation and waste in
the automotive industry supply chain
TUV TV SUD Philippines Inc.
TUV Product certification by TUV indicating that a manufacturer's products have met
Safety applicable safety requirements and quality standards
Certification
UHA Ultra High Availability
18
Underwriting The agreement entered into by and between the Company and the Joint Lead
Agreement Underwriters, indicating the terms and conditions of the Offer and providing that the
Offer shall be fully underwritten by the Joint Lead Underwriters
Unrestricted the undistributed earnings of a corporation which have not been allocated for any
Retained managerial, contractual, or legal purpose and which are free for distribution to the
Earnings shareholders as dividends, see Dividends and Dividend Policy Limitations and
Requirements on page 82 of this Preliminary Prospectus
VAT Value Added Tax
19
EXECUTIVE SUMMARY
The following summary is qualified in its entirety by the more detailed information and consolidated financial
statements and notes thereto appearing elsewhere in this Preliminary Prospectus. Because it is a summary,
it does not contain all of the information that a prospective purchaser should consider before investing.
Prospective investors should read the entire Preliminary Prospectus carefully, including the section entitled
Risk Factors and Other Considerations and the consolidated financial statements and the related notes
to those statements included in this Preliminary Prospectus.
Company Overview
Cirtek Holdings Philippines Corporation is a fully integrated global technology company focused on wireless
communication. It is the holding company of Cirtek Electronics Corporation (CEC) and Cirtek Electronics
International Corporation (CEIC), (collectively the Cirtek Group). The Companys principal office is
located at 116 East Main Avenue, Phase V-SEZ, Laguna Technopark, Bian, Laguna.
Through its subsidiaries, the Company is primarily engaged in three major activities:
1) The design, development, and delivery of the wireless industrys most advanced high-efficiency,
high-performance antenna solutions;
2) The manufacture of value-added, highly integrated technology products; and
3) The manufacture and sales of semiconductor packages as an independent subcontractor for
outsourced semiconductor assembly, test and packaging services, and
Quintel Solutions is a leading provider of advanced high-efficiency, high-performance antenna solutions for
wireless cellular networks. Quintel is a pioneer of multi-port, multi-frequency wireless tower antennas.
These antennas support more frequencies and deliver greater bandwidth, thereby improving customer
experience and creating cost-efficiencies and quicker roll-out for mobile operators.
CEIC sells integrated circuits principally in the US and assigns the production of the same to CEC. CEIC
acquired Remec Broadband Wireless Inc. (RBWI) in 30 July 2014, renamed Cirtek Advanced
Technologies and Solutions, Inc, (CATSI), a proven Philippine-based manufacturer of value added, highly
integrated technology products. CATSI offers complete "box build" turnkey manufacturing solutions to RF,
microwave, and millimeterwave products used in the wireless industry such as telecommunication, satellite,
aerospace and defense, and automotive wireless devices.
CEC provides turnkey solutions that include package design and development, wafer probing, wafer back
grinding, assembly and packaging, final testing of semiconductor devices, and delivery and shipment to its
customers end users. CEC has over 64 regular customers spread out in Europe, the US and Asia.
CHPC, through its subsidiaries, harnesses more than 54 years of combined operating track record. The
Companys products cover a wide range of applications and industries, including communications,
consumer electronics, power devices, computing, automotive, and industrial.
Beginning in 1984 with only three customers, the Cirtek Group has significantly grown its customer base to
over 70 major and regular customers across Europe, U.S. and Asia, with the bulk of revenues contributed
by customers located in Europe and the U.S.
20
The Cirtek Group has earned a strong reputation with its customers for its high-quality products, production
flexibility, competitive costing, and capability to work with customers to develop application and customer
specific packages. Members of the Cirtek Group has been accredited and certified by several international
quality institutions, namely TD SD Management Service GmbH, TV Product Service Asia Ltd., Taiwan
Branch, Defense Supply Center & British Approval Board Telecom, for the latest quality system standards,
which include ISO9001, ISO14001, and QS9000/TS16949, TUV Product Safety Certification, and FCC
certification.
The Company was listed in the PSE on 18 November 2011. In 2015, the Company had a follow on offering
of common shares which was 1.5 times oversubscribed and raised 2.2 billion. Its market capitalization
has grown by approximately fifteen times from 1.1 billion in 2011 to 15.97 billion as of [22 September
2017].
From 2014 to 2016, Cirtek Groups revenues grew from US$51.8 million to US$74.3 at a CAGR of 19.8%
while net income grew from US$5.8 million to US$7.6 million at a CAGR of 14.1%. For the six months
ended 30 June 2017, the Cirtek Group reported revenues and net income of US$42.2 million and US$4.4
million at a year-on-year growth of 29.9% and 25.5%, respectively. As of 30 June 2017, the Cirtek Group
had total assets of US$145.5 million and total liabilities of US$83.9 million.
Corporate History
For more than three decades, the Company has provided turnkey solutions to its roster of clients who have
remained loyal since the companys inception in 1984. The milestones charted by its subsidiaries attest to
this:
Cirtek Electronics Corporation
May 31, 1984 was when Cirtek Electronics Corporation (CEC) was officially incorporated with the Securities
and Exchange Commission, primarily to engage in the business as independent subcontractor for
semiconductor assembly, test and packaging services.
CEC was registered as a Philippine Export Zone Authority (PEZA) company on March 24, 1998. As a
registered PEZA enterprise, CEC is entitled to certain tax and non-tax incentives provided for in Republic
Act No. 8748.
Cirtek Electronics International Corporation
CEIC was incorporated under the International Business Companies Act of the British Virgin Islands on
April 4, 1995. CEIC primarily sells integrated circuits principally to the United States of America, and
subcontracts the production of the same to CEC.
CEIC, through its acquisition of the production facility of Remec Broadband Wireless, Inc.(RBWI)
manufactures complex systems and subsystems. modules and submodules, used in wireless
communication and satellite applications,
RBWI, renamed to Cirtek Advanced Technology and Solutions, Inc., (CATSI), is a PEZA-registered
company which entitles it to tax and non-tax incentives
21
The Acquisition of the Quintel business
Last July 31, 2017, CHPC and Trillium International I, GP, as shareholder representative of Quintel
Cayman, Ltd. (Quintel Cayman) announced the signing of a definitive agreement under which CHPC,
through its subsidiaries, acquired 100% of Quintel, a leading provider of advanced high- efficiency, high-
performance antenna solutions. The acquisition immediately gave CHPC a significant presence in the large
and rapidly growing base station antenna market, estimated to be more than US$14 billion by 2020.
Established in 2002, Quintel designs, develops and delivers advanced high-efficiency, high-performance
antenna solutions that help mobile operators to increase efficiency, enhance quality-of-service, slash costs
and accelerate returns. Quintels current customers are AT&T and Verizon, and large telecommunication
corporations operating in North America and Puerto Rico. Quintels world headquarters is located in
Rochester, New York while the research and development office and sales offices are located in San Jose,
California and Buckinghamshire, United Kingdom, respectively.
The following are Quintels antenna product lines:
1. MultiServ - Single Antenna - Multiple Frequency Bands
Under the MultiServ brand, Quintel sells Multi-Band/ Multi-Port Antennas which are designed to maximize
site utilization without compromising site design and network optimization freedoms. This product offers
independent tilt for different bands for different arrays while supporting up to 4x4 MIMO at high-bands. The
technology of Multiserv also minimizes Passive Intermodulation interference and supports different access
technologies (4G, LTE, 3G, 2G).
2. SONWav - Directional Antenna Passive Real-Time Beamforming
Through its SONWav brand, Quintel provides Passive Real-Time Elevation Beamforming Antennas which
increases throughput and spectral efficiency at low spectrum bands in a single slimline antenna. This
product also offers route to double MIMO freedoms.
Quintel recently expanded its industry-leading MultiServ Slimline Antennas portfolio. In addition to the
12-Port Multiband Antenna, Quintel now has 10 Port antennas, both of which come in 4, 6 and 8 foot
lengths. This latest Slimline Antenna utilizes the same 12/300mm wide form factor that all Quintel antennas
use providing the industrys only One Size Fits All portfolio of 6, 8, 10 and 12-Port antennas in the same
single form factor.
The Company believes that Quintel's cutting edge R&D and product capabilities significantly add to and
complement the Cirtek Groups growing portfolio in wireless communication, and is aligned with its business
focus on high-growth market segments. Further, being the strategic manufacturing partner of Quintel
products places the Company in a unique situation to achieve significant synergies through value
engineering, research and development collaboration as well as cost reduction, resulting in high-quality,
reliable and cost-competitive products.
22
Corporate Structure
The chart below sets out Cirtek Groups corporate structure as of the date of this Preliminary Prospectus.
Competitive Strengths
The Company believes that with its existing operations, it has strong leverage to exceed its competitors.
Cirtek believes that its principal strengths are the following:
Industry-leading Technology
Reputation for High-Quality, Innovative Products
Offers a Complete Range of Turnkey Solutions and Vertically Integrated Services
Significant Proprietary IP
Global and Diversified Customer Footprint
Strong Financial Track Record
Highly Experienced Management Team
Proven Execution Track Record
Key Strategies
The Companys key strategies are designed to allow the Cirtek Group to achieve its mid-term and long-
term goals through an efficient mix of organic growth through expanding product lines/ more sales teams
and mergers and acquisitions. In line with this, shown below are the Companys key strategies for its
strategic business units (SBU).
23
For Quintel
Expand to new geographic markets as the global market for muti-port, multi-frequency base station
antennas is expanding rapidly
Expand Cirtek / Quintels product portfolio through new product introduction, licensing and white
label branding
Improvement in gross margin through lower BOM cost, more efficient outbound logistics, better
yield and better quality
For CEC
Focus on further expanding the semiconductor business

o Improve on customer- and application- specific packages
o Introduce new products/packages that meet customers needs
Strengthen presence in high-growth market segments such as wireless communication, consumer
electronics, automotive sectors
Expand sales network in key markets such as Europe, US and Asia
For CATSI
Aggressive growth for RF/Microwave/Millimeterwave Business by at least 45% year on year

Expand customer base RF/Microwave/Millimeterwave Business
Risks of Investing
Before making an investment decision, investors should carefully consider the risks associated with an
investment in the Offer Shares. These risks include:
risks relating to the Companys business,

risks relating to countries where the Company operates (including the Philippines),
risks relating to the Offer and the Offer Shares, and
risks relating to certain statistical information in this Preliminary Prospectus.
Please refer to the section entitled Risk Factors on page 58 which, while not intended to be an exhaustive
enumeration of all risks, must be considered in connection with a purchase of the Offer Shares.
24
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
The following tables set forth the summary consolidated financial information for the Company and should
be read in conjunction with the auditors reports, the Companys consolidated financial statements including
the notes thereto included elsewhere in this Prospectus, and the section entitled Managements Discussion
& Analysis of Financial Conditions and Results of Operations. The selected financial information set forth
in the following table has been derived from the Company's consolidated financial statements as of 31
December 2016 and 2015 and for each of the three years in the period ended 31 December 2016, including
the related notes, as examined and audited by SGV & Co. in accordance with Philippine Standards on
Auditing. All these information should be read in conjunction with the financial statements and notes thereto
found on [Appendix A] of this Prospectus.
Also detailed below is a comparison of the six (6) months ended 30 June 2017 and 2016 derived from the
unaudited interim condensed consolidated financial statements of the Company, including notes thereto,
which are found as [Appendix B] of this Preliminary Prospectus. These financial statements, including the
related notes, have been reviewed by SGV & Co. in accordance with Philippine Standard on Review
Engagements.
The summary of financial information set out below does not purport to project the results of operations or
financial condition of the Company for any future period or date. All figures are in thousands of US$ except
per share figures, and where otherwise indicated.
Consolidated Statements of Comprehensive Income
For the six months ended

For the years ended 31 December
30 June
(In US$) 2014 2015 2016 2017 2016
NET SALES 51,792,081 59,548,534 74,322,312 42,181,565 32,480,987
COST OF SALES (44,251,335) (49,981,847) (61,566,107) (34,302,155) (26,479,919)
GROSS PROFIT 7,540,746 9,566,687 12,756,205 7,879,410 6,001,068
OPERATING EXPENSES (3,328,456) (3,820,676) (4,353,603) (2,248,495) (2,121,066)

FINANCIAL INCOME
(EXPENSES)
Interest income 42,563 385,973 380,095 44,522 226,511
Interest expense (565,460) (1,327,413) (1,375,227) (1,052,548) (520,109)
(522,897) (941,440) (995,132) (1,008,026) (293,598)
OTHER INCOME 2,361,516 831,945 747,890 (35,170) 67,603
INCOME BEFORE INCOME TAX 6,050,909 5,636,516 8,155,360 4,587,719 3,654,007

PROVISION FOR (BENEFIT
FROM) INCOME TAX
Current 202,011 475,638 559,457 172,935 125,453
Deferred 4,814 39,998 (12,125) - -
25
For the six months ended
For the years ended 31 December
30 June
206,825 515,636 547,332 172,935 125,453
NET INCOME 5,844,084 5,120,880 7,608,028 4,414,784 3,528,554

OTHER COMPREHENSIVE
INCOME (LOSS)
Other comprehensive income not

to be reclassified to profit or loss
in subsequent periods:
Remeasurement gains (losses)
on retirement benefit, net of
deferred tax 383,993 208,841 (486,091) - -
TOTAL COMPREHENSIVE
INCOME 6,228,077 5,329,721 7,121,937 4,414,784 3,528,554
Consolidated Balance Sheets
As at 30
As at 31 December
June
(In US$) 2014 2015 2016 2017
ASSETS
Current Assets
Cash and cash equivalents 12,602,322 29,776,866 24,511,493 20,112,901
Trade and other receivables 14,927,504 13,749,783 23,172,423 36,163,695
Inventories 10,768,681 5,737,068 15,281,893 13,741,197
Amounts owed by related parties 5,123,078 10,606,752 12,436,575 18,326,446
Held-to-maturity (HTM) investments 113,880 521,215 371,520 -

Financial assets at fair value through profit
or loss (FVPL) 701,747 19,447,248 503 503
Other current assets 1,871,111 2,534,181 2,618,370 2,354,245
46,108,323 82,373,113 78,392,777 90,698,987
Noncurrent assets held for sale 11,408,611 11,408,611 11,408,611 11,408,611
Total Current Assets 57,516,934 93,781,724 89,801,388 102,107,598
Noncurrent Assets
Property, plant and equipment 17,015,168 23,841,532 28,675,910 29,379,168
Available-for-sale (AFS) financial asset - 1,667,000 1,667,000 1,667,000
HTM investments 985,362 368,574 - 487,030
Deferred income tax assets - net 172,487 135,555 174,578 174,578

26
As at 30
As at 31 December
June
Other noncurrent assets 962,504 893,853 2,170,859 11,654,695
Total Noncurrent Assets 19,135,521 26,906,514 32,688,347 43,362,471
TOTAL ASSETS 76,652,455 120,688,238 122,489,735 145,470,069
LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 10,029,206 13,385,642 19,135,593 14,500,851
Short-term loans 2,100,000 10,835,088 31,625,945 27,020,945
Current portion of long-term debt 3,399,432 5,303,642 6,882,126 4,889,882
Amounts owed to related parties 470,147 495,686 520,152 531,786
Income tax payable 349,237 123,794 327,656 179,693
Total Current Liabilities 16,348,022 30,143,852 58,491,472 47,123,157

Noncurrent Liabilities
Long-term debt - net of current portion 23,700,379 17,912,779 36,977,845 35,026,266
Retirement benefit obligation 1,645,787 1,357,811 1,807,847 1,770,547
Deferred income tax liabilities - net - - 3,373 3,373
Total Noncurrent Liabilities 25,346,166 19,270,590 38,789,065 36,800,186
Total Liabilities 41,694,188 49,414,442 97,280,537 83,923,343

Equity
Common stock 7,893,134 9,594,321 9,594,321 9,594,321
Preferred stock - 221,239 221,239 221,239
Additional paid-in capital 4,733,511 35,896,893 35,896,893 35,896,893
Equity reserve 4,138,375 4,138,375 4,138,375 1,452,863
Other comprehensive income 317,579 526,420 40,329 40,329
Retained earnings 17,875,668 20,896,548 24,884,576 27,877,598
34,958,267 71,273,796 74,775,733 75,083,243

Parent Company shares held by a
subsidiary - - (49,566,535) (13,536,517)
Total Equity 34,958,267 71,273,796 25,209,198 61,546,726
TOTAL LIABILITIES AND EQUITY 76,652,455 120,688,238 122,489,735 145,470,069
27
Consolidated Statement of Cash Flows
For the years For the six

ended 31 months ended
December 30 June
(In US$) 2014 2015 2016 2017 2016
Net cash from (used in)
operating activities 3,851,078 16,995,888 (1,582,034) (9,070,249) 7,750,195
Net cash from (used in)
investing activities (1,642,197) (28,899,735) 11,389,527 (11,792,135) (2,793,772)
Net cash from (used in) (14,915,525

financing activities 3,320,556 29,018,585 ) 16,371,185 (4,083,559)
EFFECT OF
EXCHANGE RATE
CHANGES ON CASH
AND CASH
EQUIVALENTS 49,138 59,806 (157,341) 92,607 -
NET INCREASE
(DECREASE) IN CASH
AND CASH
EQUIVALENTS 5,578,575 17,174,544 (5,265,373) (4,398,592) 872,864
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR 7,023,747 12,602,322 29,776,866 24,511,493 29,776,866
CASH AND CASH
EQUIVALENTS AT
END OF YEAR 12,602,322 29,776,866 24,511,493 20,112,901 30,649,730
Key Performance Indicators
Amounts in thousands US$, 2014 2015 2016 Jan-June 2017

except ratios and where indicated
EBITDA 9,474 8,768 11,862 7,169
EBITDA Margin 18% 15% 16% 17%
Sales Growth 18% 15% 25% 30%
Current Ratio (x) 3.5x 3.1x 1.5x 2.2x
Earnings per share (US$) 0.017 0.013 0.018 0.011
28
SUMMARY OF UNAUDITED PRO FORMA CONSOLIDATED
FINANCIALINFORMATION
The unaudited pro forma condensed consolidated financial information of the Company with the
consolidation of Quintel under Cirtek Holdings Philippines Corporation consists of the pro forma balance
sheets as at 31 December 2016 and 30 June 2017, and the pro forma consolidated statements of income
for the year ended 31 December 2016, and the six-month period ended 30 June 2017 (the Unaudited Pro
Forma Financial Information). The Unaudited Pro Forma Financial Information of the Company has been
prepared for illustrative purposes only and is based on certain assumptions, after making certain
adjustments.
Consolidated Balance Sheets 30 June 2017
Pro Forma Adjustments

(Unaudited)
Cirtek
Holdings Acquisition of Eliminating
Philippines Quintel Entries and
Corporation Cayman, Ltd. Other Pro
and and Forma Pro Forma
Subsidiaries Subsidiaries Adjustments Balances
(Unaudited) (Unaudited)
ASSETS
Current Assets
Cash $20,112,901 $ ($17,000,000) $3,112,901
Trade and other receivables 36,163,695 2,960,851 (19,859,774) 19,264,772
Inventories 13,741,197 9,146,418 22,887,615
Amounts owed by related parties 18,326,446 18,326,446
Financial assets at fair value through profit or loss 503 503
(FVPL)
Other current assets 2,354,245 330,071 2,684,316
90,698,987 12,437,340 (36,859,774) 66,276,553
Noncurrent assets held for sale 11,408,611 11,408,611
Total Current Assets 102,107,598 12,437,340 (36,859,774) 77,685,164
Noncurrent Assets
Property, plant and equipment 29,379,168 489,992 29,869,160
Intangible assets 31,200,000 31,200,000
Goodwill 56,191,679 56,191,679
Available-for-sale (AFS) financial asset 1,667,000 1,667,000
Held-to-maturity (HTM) investments 487,030 487,030
Deferred income tax assets - net 174,578 174,578
Other noncurrent assets 11,654,695 11,654,695
Total Noncurrent Assets 43,362,471 87,881,671 131,244,142
TOTAL ASSETS $145,470,069 $100,319,011 ($36,859,774) $208,929,306

Current Liabilities
Trade and other payables $14,500,851 $17,621,095 ($14,859,774) $17,262,172
Short-term loans 27,020,945 55,000,000 82,020,945
Current portion of long-term debt 4,889,882 4,889,882
Amounts owed to related parties 531,786 531,786
Due to stockholders 77,000,000 (77,000,000)
Income tax payable 179,693 179,693
Total Current Liabilities 47,123,157 94,621,095 (36,859,774) 104,884,478
29
Long-term debt - net of current portion 35,026,266 1,454,616 36,480,882
Retirement benefit obligation 1,770,547 1,770,547
Deferred income tax liabilities - net 3,373 4,243,300 4,246,673
Total Noncurrent Liabilities 36,800,186 5,697,916 42,498,102
Total Liabilities 83,923,343 100,319,011 (36,859,774) 147,382,580
Equity
Common stock 9,594,321 9,594,321
Preferred stock 221,239 221,239
Additional paid-in capital 35,896,893 35,896,893
Equity reserve 1,452,863 1,452,863
Other comprehensive income 40,329 40,329
Retained earnings 27,877,598 27,877,598
75,083,243 75,083,243
Parent company shares held by a subsidiary (13,536,517) (13,536,517)
Total Equity 61,546,726 61,546,726
TOTAL LIABILITIES AND EQUITY $145,470,069 $100,319,011 ($36,859,774) $208,929,306
Consolidated Statement of Income 30 June 2017

(Unaudited)
Cirtek
NET SALES $42,181,565 $22,393,746 ($17,369,175) $47,206,136
COST OF SALES (34,302,155) (20,659,225) 15,905,748 (39,055,632)
GROSS PROFIT 7,879,410 1,734,521 (1,463,427) 8,150,504
OPERATING EXPENSES (2,248,495) (6,330,488) (400,000) (8,978,983)
FINANCIAL INCOME (EXPENSES)

Interest income 44,522 16 44,538
Interest expense (1,052,548) (1,981,515) (1,100,000) (4,134,063)
(1,008,026) (1,981,499) (1,100,000) (4,089,525)
OTHER INCOME (CHARGES) - Net (35,170) 223,630 188,460
INCOME (LOSS) BEFORE INCOME TAX 4,587,719 (6,353,836) (2,963,427) (4,729,544)
PROVISION FOR (BENEFIT FROM)

INCOME TAX
Current 172,935 19,427 192,362
Deferred (140,000) (140,000)
172,935 19,427 (140,000) 52,362
NET INCOME (LOSS) 4,414,784 (6,373,263) (2,823,427) (4,781,906)
OTHER COMPREHENSIVE INCOME (LOSS)

30
Other comprehensive income not to be reclassified
to profit or loss in subsequent periods:
Remeasurement gains (losses) on retirement

benefit, net of deferred tax
TOTAL COMPREHENSIVE INCOME (LOSS) $4,414,784 ($6,373,263) ($2,823,427) ($4,781,906)
Basic/Diluted Earnings (Loss) Per Share $0.011 ($0.011)
Consolidated Statements of Cash Flows 30 June 2017

(Unaudited)
Cirtek
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income tax $4,587,719 ($6,353,836) ($2,963,427) ($4,729,544)
Adjustments for:
Depreciation and amortization 1,573,474 100,557 400,000 2,074,031
Interest expense 1,052,548 1,981,515 1,100,000 4,134,063
Interest income (44,522) (16) (44,538)
Movement in net retirement benefit obligation (37,300) (37,300)
Deferred grant (520,000) (520,000)
Net unrealized foreign exchange gains (107,356) 223,630 116,274
Operating income (loss) before working capital
changes 7,024,563 (4,568,150) (1,463,427) 992,986
Decrease (increase) in:
Inventories 1,540,696 459,288 1,463,427 3,463,411
Trade and other receivables (13,077,161) (305,956) (13,383,117)
Other current assets 275,244 (170,995) 104,249
Decrease in trade and other payables (4,643,104) (1,841,889) (6,484,993)
Net cash used in operations (8,879,762) (6,427,702) (15,307,464)
Interest received 130,411 16 130,427
Income taxes paid (320,898) (320,898)
Net cash used in operating activities (9,070,249) (6,427,686) (15,497,935)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Quintel Group (Note 1) (72,000,000) (72,000,000)
Acquisitions of property, plant and equipment (2,221,029) (2,221,029)
Investment in HTM investments (487,030) (487,030)
Proceeds from disposal of HTM investments 371,520 371,520
Decrease (increase) in other noncurrent assets (9,455,596) 52,826 (9,402,770)
Net cash from (used in) investing activities ($11,792,135) $52,826 ($72,000,000) ($83,739,309)
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from:
31
Availment of short-term loans $10,000,000 $3,000,000 $55,000,000 $68,000,000
Availment of long-term debt 5,854,616 5,854,616
Sale of Parent Company shares held by a
subsidiary 33,344,506 33,344,506
Payments of:
Cash dividends (1,421,762) (1,421,762)
Interest (1,068,322) (179,996) (1,248,318)
Long-term debts (4,000,000) (4,000,000)
Short-term loans (14,605,000) (300,000) (14,905,000)
Closing cash to Quintels previous
stockholders (2,578,162) (2,578,162)
Net movement in amounts owed by and owed to
related parties (5,878,237) (5,878,237)
Net cash from financing activities 16,371,185 5,796,458 55,000,000 77,167,643
EFFECT OF EXCHANGE RATE CHANGES
ON CASH 92,607 (223,630) (131,023)
NET DECREASE IN CASH (4,398,592) (802,032) (17,000,000) (22,200,624)
CASH AT BEGINNING OF PERIOD 24,511,493 802,032 25,313,525
CASH AT END OF PERIOD $20,112,901 $ ($17,000,000) $3,112,901
Consolidated Balance Sheet 31 December 2016

(Unaudited)
Cirtek
(Audited) (Unaudited)
ASSETS
Current Assets
Cash $24,511,493 $ ($22,000,000) $2,511,493
Trade and other receivables 23,172,423 2,960,851 (10,974,829) 15,158,445
Inventories 15,281,893 9,146,418 24,428,311
Held-to-maturity (HTM) investments 371,520 371,520
Financial assets at fair value through profit or loss 503
(FVPL) 503
Other current assets 2,618,370 330,071 2,948,441
78,392,777 12,437,340 (32,974,829) 57,855,288
Noncurrent assets held for sale 11,408,611 11,408,611
Total Current Assets 89,801,388 12,437,340 (32,974,829) 69,263,899
Noncurrent Assets
Property, plant and equipment 28,675,910 489,992 29,165,902
Intangible assets 31,200,000 31,200,000
Goodwill 56,191,679 56,191,679
Available-for-sale (AFS) financial asset 1,667,000 1,667,000
Total Noncurrent Assets 32,688,347 87,881,671 120,570,018
TOTAL ASSETS $122,489,735 $100,319,011 ($32,974,829) $189,833,917
32
Current Liabilities
Trade and other payables $19,135,593 $17,621,095 ($10,974,829) $25,781,859
Short-term loans 31,625,945 55,000,000 86,625,945
Current portion of long-term debt 6,882,126 6,882,126
Due to stockholders 77,000,000 (77,000,000)
Total Current Liabilities 58,491,472 94,621,095 (32,974,829) 120,137,738
Long-term debt - net of current portion, including
accrued interest 36,977,845 1,454,616 38,432,461
Retirement benefit obligation 1,807,847 1,807,847
Deferred income tax liabilities - net 3,373 4,243,300 4,246,673
Total Noncurrent Liabilities 38,789,065 5,697,916 44,486,981
Total Liabilities 97,280,537 100,319,011 (32,974,829) 164,624,719
Equity
Common stock 9,594,321 9,594,321
Equity reserve 4,138,375 4,138,375
Retained earnings (deficit) 24,884,576 24,884,576
74,775,733 74,775,733
Total Equity 25,209,198 25,209,198
TOTAL LIABILITIES AND EQUITY $122,489,735 $100,319,011 ($32,974,829) $189,833,917
Consolidated Statement of Income 31 December 2016

(Unaudited)
Cirtek
NET SALES $74,322,312 $34,821,182 ($19,387,242) $89,756,252
COST OF SALES (61,566,107) (33,443,297) 17,850,329 (77,159,075)
GROSS PROFIT 12,756,205 1,377,885 (1,536,913) 12,597,177
OPERATING EXPENSES (Note 19) (4,353,603) (10,602,947) (800,000) (15,756,550)

Interest income 380,095 39 380,134
Interest expense (1,375,227) (3,971,044) (2,200,000) (7,546,271)
(995,132) (3,971,005) (2,200,000) (7,166,137)
OTHER INCOME (LOSS) - Net 747,890 (1,215,833) (467,943)
33
INCOME (LOSS) BEFORE INCOME TAX 8,155,360 (14,411,900) (4,536,913) (10,793,453)

INCOME TAX
Current 559,457 559,457
Deferred (12,125) (7,780) (280,000) (299,905)
547,332 (7,780) (280,000) 259,552
NET INCOME (LOSS) 7,608,028 (14,404,120) (4,256,913) (11,053,005)

Remeasurement losses on retirement benefit, net

of deferred tax (486,091) (486,091)
TOTAL COMPREHENSIVE INCOME (LOSS) $7,121,937 ($14,404,120) ($4,256,913) ($11,539,096)
Basic/Diluted Earnings (Loss) Per Share $0.018 ($0.026)
Consolidated Statements of Cash Flows 31 December 2016

(Unaudited)
Cirtek
Income (loss) before income tax $8,155,360 ($14,411,900) ($4,536,913) ($10,793,453)
Adjustments for:
Depreciation and amortization 2,711,632 453,214 800,000 3,964,846
Interest expense 1,375,227 3,971,044 2,200,000 7,546,271
Interest income (380,095) (39) (380,134)
Gain on disposal of financial assets at FVPL (262,332) (262,332)
Movement in net retirement benefit obligation 34,812 34,812
Net unrealized foreign exchange gains (19,282) (19,282)
Loan forgiveness (300,000) (300,000)
Operating income (loss) before working capital
changes 11,615,322 (10,287,681) (1,536,913) (209,272)
Inventories (9,544,825) (5,646,731) 1,536,913 (13,654,643)
Trade and other receivables (9,508,529) (254,054) (9,762,583)
Other current assets (79,881) 6,589 (73,292)
Increase in trade and other payables 5,823,431 13,978,931 19,802,362
Cash used in operations (1,694,482) (2,202,946) (3,897,428)
Interest received 465,984 39 466,023
Net cash used in operating activities (1,582,034) (2,202,907) (3,784,941)
Acquisition of Quintel Group (Note 1) (77,000,000) (77,000,000)
34
(Unaudited)
Cirtek
Acquisitions of property, plant and equipment (7,546,010) (223,765) (7,769,775)
Proceeds from disposal of financial assets at FVPL 19,709,049 19,709,049
Redemption of HTM investments 518,269 518,269
Decrease in other noncurrent assets (1,291,781) (1,291,781)
Net cash from (used in) investing activities 11,389,527 (223,765) (77,000,000) (65,834,238)

Proceeds from availment of:
Short-term loans $22,080,857 $ $55,000,000 $77,080,857
Long-term debt 30,000,000 30,000,000
Payments of:
Cash dividends (3,620,000) (3,620,000)
Interest (1,271,687) (303,171) (1,574,858)
Long-term debts (9,121,198) (21,252) (9,142,450)
Short-term loans (1,290,000) (1,290,000)
Debt issuance costs (321,605) (321,605)
Closing cash to Quintels previous
stockholders (802,032) (802,032)
Acquisition by subsidiary of the Parent Companys
shares (49,566,535) (49,566,535)
related parties (1,805,357) 5,000,000 3,194,643
Stock options exercised 2,723 2,723
Net cash from (used in) financing activities (14,915,525) 3,876,268 55,000,000 43,960,743
ON CASH (157,341) (1,995,379) (2,152,720)
NET INCREASE (DECREASE) IN CASH (5,265,373) (545,783) (22,000,000) (27,811,156)
CASH AT BEGINNING OF YEAR 29,776,866 545,783 30,322,649
CASH AT END OF YEAR $24,511,493 $ ($22,000,000) $2,511,493
35
TERMS AND CONDITIONS OF THE OFFER
The following does not purport to be a complete listing of all the rights, obligations and privileges attaching
to or arising from the offer of the Preferred B-2 Shares. Prospective shareholders are enjoined to perform
their own independent investigation and analysis of the Company and the Preferred B-2 Shares. Each
prospective shareholder must rely on its own appraisal of the Company and the proposed equity raising
and its own independent verification of the information contained herein and any other investigation it may
deem appropriate for the purpose of determining whether to participate in the proposed equity raising and
must not rely solely on any statement or the significance, adequacy or accuracy of any information
contained herein. The information and data contained herein are not a substitute for the prospective
shareholders independent evaluation and analysis.
Issuer Cirtek Holdings Philippines Corporation (Cirtek, the Company, or the

Issuer).
Offer Cumulative, non-voting, non-participating, non-convertible, redeemable

Preferred B-2 Shares (the Preferred B-2 Shares or the Offer Shares)
Issue Size Primary offer of up to US$120.0 million consisting of 120,000,000 Preferred B-

2 Shares (the Firm Shares), with an oversubscription option of up to US$80.0
million consisting of 80,000,000 additional Preferred B-2 Shares (the
Oversubscription Option Shares), for an aggregate issue size of up to
US$200.0 million (the Offer).
Of the 120,000,000 Offer Shares to be offered, 80% or 96,000,000 Offer

Shares are being offered through the Joint Lead Underwriters for subscription
and sale to institutional buyers and the general public. The final amount of the
commitments of the Joint Lead Underwriters will be determined at the end of
the book-building period. The Company plans to make available 20% of the
Offer Shares or 24,000,000 Offer Shares for distribution to the respective
clients of the Philippine Stock Exchange Inc. (the PSE) Trading Participants
(the Trading Participants) that are Eligible Brokers, acting as Selling Agents.
The Company and the Joint Lead Underwriters will not allocate any Offer
Shares for Local Small Investors.
Any Offer Shares not taken up by the Trading Participants shall be distributed
by the Joint Lead Underwriters directly to their respective clients and the
general public. All Offer Shares (except the Oversubscription Option Shares)
not taken up by the Eligible Brokers, general public and the Joint Lead
Underwriters clients shall be purchased by the Joint Lead Underwriters
pursuant to the terms and conditions of the Underwriting Agreement dated []
by and among the Company and the Joint Lead Underwriters (the
Underwriting Agreement).
Sole Issue Manager BPI Capital Corporation (BPI Capital)

and Bookrunner
36
Joint Lead BPI Capital, RCBC Capital Corporation (RCBC Capital), and []
Underwriters
Registration and Listing To be registered with the SEC and listed on the PSE. The Offer Shares are
expected to be listed on the PSE Main Board under the symbol [].
Offer Period The Offer Period shall commence at 9:00 a.m. on [] and end at 5:00 p.m. on
[]. The Issuer and the Joint Lead Underwriters reserve the right to extend or
terminate the Offer Period with the approval of the SEC and the PSE (as
applicable).
Issue Date []
Listing Date []
Use of Proceeds Proceeds from the Offer will be used by the Company for (1) payment of
financial obligations, (2) to fund strategic acquisitions, (3) for working capital
requirements, (4) for capital expenditures, and (5) for research and
development.
Par Value The Preferred B-2 Shares shall have a par value of PHP1.00 per share
Offer Price The Preferred B-2 Shares shall be offered at a price of US$1.00 per share.
Minimum Subscription Each application to subscribe to the Preferred B-2 Shares shall be for a
minimum of 1,000 Preferred B-2 Shares, and thereafter, in multiples of 100
Preferred B-2 Shares. No application for multiples of any other number of
Preferred B-2 Shares will be considered.
Dividend Payment The Offer Shares shall, subject to the conditions for the declaration and
Dates and Dividend payment of dividends, bear cumulative, non-participating cash dividends
Periods based on the Offer Price, at the Dividend Rate per annum from the Issue Date,
payable on [] as the first dividend payment date, and thereafter every [],[],
[] of each year (each, a Dividend Payment Date), being the last day of each
3-month period (each, a Dividend Period) following the Issue Date. The
dividends on the Offer Shares will be calculated on a 30/360-day basis for
each Dividend Period.
If the Dividend Payment Date is not a Business Day, dividends will be paid on
the next succeeding Business Day, without adjustments as to the amount of
dividends to be paid. A Business Day means a day other than a Saturday or
Sunday on which banks in Metro Manila are generally open for normal banking
business.
Dividend Rate The term Dividend Rate means (a) from the Issue Date up to the Step Up
Date, the Initial Dividend Rate, and (b) from the Step Up Date, the Initial
Dividend Rate adjusted by adding a Step Up Spread, the Step Up Rate.
37
Initial Dividend Rate The Dividend Rate applicable from the Issue Date up to the Step Up Date shall
be the fixed rate of [%] per annum.
Step Up Rate Unless the Preferred B-2 Shares shall have been redeemed by the Issuer on
the 5th anniversary of the listing date (the Step Up Date), the Dividend Rate
shall be adjusted by adding a Step-Up Spread of 300 basis points to the Initial
Dividend Rate (the Step Up Rate).
Conditions on The declaration and payment of cash dividends for each Dividend Period will
Declaration and be subject to the sole and absolute discretion of the Board of the Issuer, to the
Payment of Cash extent permitted by applicable laws and regulations, and the covenants
Dividends (financial or otherwise) in the agreements to which the Issuer is a party. The
Board will not declare and pay dividends for any Dividend Period where
payment of the Dividend would cause the Issuer to breach any of its financial
covenants.
If the profits available to distribute as dividends are, in the Boards opinion, not
sufficient to enable the Issuer to pay in full, on the same date, both dividends
on the Preferred B-2 Shares and the dividends on other shares that are
scheduled to be paid on or before the same date as the dividends on the
Preferred B-2 Shares and have an equal right to dividends as the Preferred B-
2 Shares, the Issuer is required: first, to pay in full, or to set aside an amount
equal to, all dividends scheduled to be paid on or before that dividend payment
date on any shares with a right to dividends ranking in priority to that of the
Preferred B-2 Shares; and second, to pay dividends on the Preferred B-2
Shares and any other shares ranking equally with the Preferred B-2 Shares
as to participation in profits, pro rata to the amount of the cash dividends
scheduled to be paid to them. The amount scheduled to be paid will include
the amount of any dividends payable on that date and any arrears on past
cumulative dividends on any shares ranking equal in the right to dividends with
the Preferred B-2 Shares.
The profits available for distribution are, in general and with some adjustments,
equal to the Issuers accumulated, realized profits less accumulated, realized
loss.
Cumulative Dividends on the Preferred B-2 Shares shall be cumulative. If for any reason
the Issuers Board does not declare a dividend on the Preferred B-2 Shares
for a Dividend Period, the Issuer will not pay a dividend for that Dividend
Period. However, on any future Dividend Payment Date on which dividends
are declared, holders of the Preferred B-2 Shares must receive the dividends
due them on such Dividend Payment Date as well as all dividends accrued
and unpaid to the holders of the Preferred B-2 Shares prior to such Dividend
Period.
Holders of Preferred B-2 Shares shall not be entitled to participate in any other
or further dividends beyond the dividends specifically payable on the Preferred
B-2 Shares.
38
The Issuer will covenant that, in the event (a) any dividends due with respect
to any Preferred B-2 Shares then outstanding for any period are not declared
and paid in full when due, or (b) any other amounts payable in respect of the
Preferred B-2 Shares are not paid in full when due for any reason, the Issuer
will not:
(i) declare or pay any dividends or other distributions in respect of, or
repurchase or redeem, securities ranking junior to Preferred B-2
Shares; or
(ii) contribute any moneys to a sinking fund for the redemption of any
securities ranking junior to Preferred B-2 Shares.
Subject to legal requirements, the Issuer will procure that no subsidiary over
which the Issuer has a Controlling Participation will pay any discretionary
dividends or other discretionary distributions on, or at the Issuer's discretion
repurchase or redeem, any security ranking senior to the respective
subsidiary's common shares other than those senior securities held by the
Issuer or a wholly-owned subsidiary thereof (or contribute any moneys to a
sinking fund for the purposes of any such redemption).
Controlling Participation shall refer to the possession, directly or indirectly, of

the power to direct or cause the direction of the affairs or management of the
corporation, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the ownership,
directly or indirectly, of securities having the power to elect a majority of the
board of directors or similar body governing the affairs of the corporation.
Optional Redemption As and if approved by its Board of Directors , the Issuer may redeem, in whole
and not in part, on the 5th anniversary from the listing date of the Preferred B-
2 Shares or on any Dividend Payment Date thereafter, after giving not less
than 30 nor more than 60 days written notice prior to the intended date of
redemption, at a redemption price (the Redemption Price) equal to the Offer
Price of the Preferred B-2 Shares plus all dividends due them on the actual
date of redemption as well as all accumulated dividends due and payable, or
dividends in which the declaration and/or payment have been deferred, in
respect of prior Dividend Periods. Such notice to redeem shall be deemed
irrevocable upon issuance thereof.
Redemption Due to an The Issuer may also redeem the Preferred B-2 Shares, in whole and not in
Accounting Event, Tax part, at any time if an Accounting Event, Tax Event or Change of Control (each
Event or Change of as defined below) has occurred and is continuing, having given not less than
Control 30 nor more than 60 days written notice prior to the intended date of
redemption, such notice to be deemed irrevocable upon issuance thereof.
Accounting Event An accounting event (Accounting Event) shall occur if an opinion of a

recognized accountancy firm authorized to perform auditing services in the
Republic of the Philippines has been delivered to the Issuer stating that the
Preferred B-2 Shares may no longer be recorded as equity in the audited
39
consolidated financial statements of the Issuer prepared in accordance with
PFRS, or such other accounting standards which succeed PFRS as adopted
by the Issuer for the preparation of its audited consolidated financial
statements for the relevant financial year and such event cannot be avoided
by the Issuer taking reasonable measures available to it.
Tax Event A tax event (Tax Event) shall occur if payments on the Preferred B-2 Shares
become subject to additional or higher withholding tax or any new tax
(including a higher rate of an existing tax) as a result of certain changes in law,
rule or regulation, or in the interpretation thereof, and such tax cannot be
avoided by use of reasonable measures available to the Issuer.
Change of Control Change in Control shall be deemed to have occurred if any person or persons
(CoC Event) acting in concert or any third person or persons acting on behalf of such
person(s) at any time acquire(s) directly or indirectly a Controlling Participation
in the Issuer pursuant to the Philippine laws.
The Dividend Rate will be increased by [400] basis points commencing and
including the day falling [180] days after the day on which a CoC Event has
occurred. If a Change of Control has occurred, the Issuer may at any time
redeem the Preferred B-2 Shares (in whole, not in part) at the Redemption
Price, which shall include dividends computed on the applicable Dividend
Rate, plus the additional [400] basis points, commencing and including on the
day on which a CoC Event has occurred.
No Sinking Fund The Issuer is not legally required, has not established, and currently has no
plans to establish, a sinking fund for the redemption of the Preferred B-2
Shares.
Purchase of the Upon listing on the PSE, the Issuer may purchase the Preferred B-2 Shares
Preferred B-2 Shares at any time in the open market or by public tender or by private contract at any
price through the PSE, without any obligation to purchase or redeem the other
Preferred B-2 Shares. The Preferred B-2 Shares so purchased may either be
redeemed (pursuant to the terms and conditions of the Preferred B-2 Shares)
and cancelled or kept as treasury shares, as applicable.
No Voting Rights Holders of the Preferred B-2 Shares shall not be entitled to vote at the Issuers
stockholders meetings, except as otherwise provided by law.
Non-Participating Holders of the Preferred B-2 Shares shall not be entitled to participate in any
other or future dividends beyond the dividends specifically payable on the
Preferred B-2 Shares.
Non-Convertible Holders of the Preferred B-2 Shares shall have no right to convert the Offer
Shares to any other preferred shares or common shares of the Issuer.
40
No Pre-emptive Rights Holders of the Preferred B-2 Shares shall have no pre-emptive rights to
subscribe to any shares (including, without limitation, treasury shares) that will
be issued or sold by the Issuer.
Liquidation Rights In the event of liquidation, dissolution, bankruptcy, or winding up of the affairs
of the Issuer, the holders of the Preferred B-2 Shares shall enjoy preference
in the payment, in full or, if the remaining assets of the Issuer are insufficient,
on a pro-rata basis as among all holders of outstanding Preferred B-2 Shares,
of the offer price of their shares plus any previously declared and unpaid
dividends, before any asset of the Issuer is paid or distributed to the holders
of common shares and other securities junior to the Preferred B-2 Shares.
Taxation All payments in respect of the Preferred B-2 Shares are to be made free and
clear of any deductions or withholding for or on account of any present or
future taxes or duties imposed by or on behalf of the Republic of the
Philippines, including, but not limited to, stamp, issue, registration,
documentary, value-added or any similar tax or other taxes and duties,
including interest and penalties. If such taxes or duties are imposed, the Issuer
will pay additional amounts so that holders of the Preferred B-2 Shares will
receive the full amount of the relevant payment which otherwise would have
been due and payable. Provided, however, that the Issuer shall not be liable
for, and the foregoing payment undertaking of the Issuer shall not apply to:
1. any withholding tax applicable to dividends earned by or any amounts

payable to the holders of the Preferred B-2 Shares;
2. any income tax (whether or not subject to withholding), percentage tax
(such as stock transaction tax), documentary stamp tax or other
applicable taxes on the redemption (or receipt of the redemption price)
of the Preferred B-2 Shares or on the liquidating distributions as may
be received by a holder of Preferred B-2 Shares;
3. any expanded value-added tax which may be payable by any holder
of the Preferred B-2 Shares on any amount to be received from the
Issuer under the terms and conditions of the Preferred B-2 Shares;
4. any withholding tax on any amount payable to any holder of Preferred
B-2 Shares or any entity which is a non-resident foreign corporation;
and
5. any applicable taxes on any subsequent sale or transfer of the
Preferred B-2 Shares by any holder of the Preferred B-2 Shares which
shall be for the account of the said holder (or the buyer in case such
buyer shall have agreed to be responsible for the payment of such
taxes).
All sums payable by the Issuer to tax-exempt entities shall be paid in full
without deductions for taxes, duties, assessments or governmental charges
provided said entities present sufficient proof of such tax-exempt status from
the tax authorities.
41
Documentary stamp tax for the primary issue of the Preferred B-2 Shares and
the documentation, if any, shall be for the account of the Issuer.
Form, Title and The Preferred B-2 Shares will be lodged with PDTC as Depository Agent at
Registration of the least two trading days prior to Listing Date through PSE Trading Participants
Preferred B-2 Shares nominated by the accepted Applicants. The nominated Trading Participants
must be Eligible Brokers.
As discussed below under Appointment of an Eligible Broker, applicants shall

indicate in the proper space provided for in the Application to Purchase to be
issued and circulated in connection with the Offer (together with the required
documents, the Application) the name of the Trading Participants under
whose name their Preferred B-2 Shares will be registered. Such Trading
Participant should be an Eligible Broker.
After Listing Date, holders of the Preferred B-2 Shares (the Shareholders)
may request to receive stock certificates evidencing their investment in the
Preferred B-2 Shares through their nominated Eligible Brokers. Any expense
that will be incurred in relation to such registration or issuance shall be for the
account of the requesting Shareholder.
Applicants will be required to give their consent to their nominated Eligible

Broker for the collection, processing and sharing of their personal information
with the PDTC, which the latter will use to set up the applicants Name on
Central Depository (NOCD) sub-accounts. Under NOCD facility, the
recording of the applicants DDS holdings, such as the Offer Shares, will be at
the beneficial owner level, under segregated sub-accounts in the applicants
names.
Selling and Transfer Initial placement and subsequent transfers of interests in the Preferred B-2
Restrictions Shares shall be subject to normal selling restrictions for listed securities as
may prevail in the Philippines from time to time and the additional requirements
under the PSE DDS Rules for the trading and settlement of the Preferred B-2
Shares.
Eligible Investors The Offer Shares may be owned or subscribed to by any person, partnership,
association, corporation, trust account, fund or entity regardless of nationality.
In addition, under certain circumstances, the Issuer may reject an application
or reduce the number of Offer Shares applied for subscription or purchase.
Law may restrict subscription to the Preferred B-2 Shares in certain

jurisdictions. Foreign investors interested in subscribing for or purchasing the
Preferred B-2 Shares should inform themselves of the applicable legal
requirements under the laws and regulations of the countries of their
nationality, residence or domicile, and as to any relevant tax or foreign
exchange control laws and regulations affecting them personally. Foreign
investors, both corporate and individual, shall warrant that their purchase of
42
the Preferred B-2 Shares will not violate the laws of their jurisdiction and that
they are allowed to acquire, purchase and hold the Preferred B-2 Shares.
Investors are required to give their consent to the disclosure of their names to
the SEC if said information is requested by the SEC in the course of a possible
violation of the SRC, SRC Rules, and other orders and issuances of the SEC,
examination, official inquiry or as part of surveillance procedure, and/or in
compliance with pertinent laws.
Procedure for Applications to Purchase for the subscription of Offer Shares may be obtained
Application from any of the Joint Lead Underwriters or Selling Agents. All Applications
shall be evidenced by the Application to Purchase, duly executed in each case
by an authorized signatory of the applicant and accompanied by two
completed signature cards, the corresponding payment for the Offer Shares
covered by the Application to Purchase and all other required documents. The
duly executed Application to Purchase and required documents should be
submitted to the Joint Lead Underwriters or Selling Agents on or prior to the
set deadlines for submission of Applications to Underwriters and Selling
Agents, respectively.
If the applicant is a corporation, partnership or trust or institutional account,

the Application must be accompanied by the following documents:
a. a certified true copy of the applicants latest articles of incorporation

and by-laws and other constitutive documents, each as amended to
date, duly certified by the corporate secretary (or equivalent officer);
b. a certified true copy of the applicants SEC certificate of registration,
duly certified by the corporate secretary (or equivalent officer);
c. a duly executed and notarized corporate secretarys certificate setting
forth the resolution of the applicants board of directors or equivalent
body authorizing (i) the purchase and subscription of the Offer Shares
indicated in the Application and (ii) the designated signatories for the
purpose, including their respective specimen signatures;
d. two (2) specimen signature cards fully completed and signed by the
applicants authorized signatory/ies, and certified by the applicants
corporate secretary (or equivalent officer);
e. copy of two (2) valid government-issued identification cards of the
applicants authorized signatory/ies (certified as a true copy by the
Selling Agent or Joint Lead Underwriter that forwarded the
Application).
If the applicant is a natural person, the Application must be accompanied by

the following documents:
a. two (2) duly accomplished signature cards containing the specimen

signature of the applicant, validated/signed by the Joint Lead
Underwriters or the Selling Agents authorized signatory/ies, whose
43
authority/ies have been submitted to [] in its capacity as the Stock
Transfer Agent;
b. copy of two (2) valid government-issued identification cards of the
applicant, certified as a true copy by the Selling Agent or Joint Lead
Underwriter that forwarded the Application; and
c. such other documents as may be reasonably require by the Selling
Agent or Joint Lead Underwriter(s) in implementation of its internal
policies regarding know your customer and anti-money laundering.
Foreign corporate and institutional applicants who qualify as Eligible Investors,

in addition to the documents listed above as applicable, are required to submit
in quadruplicate, a representation and warranty stating that their Application
will not violate the laws of their jurisdictions of incorporation or organization,
and that they are allowed to acquire, purchase and hold the Offer Shares.
Proof of remittance or credit to the Receiving Agents account or, as

applicable, the relevant Joint Lead Underwriters account of an amount
equivalent to the full purchase price of the Offer Shares subscribed for shall
be submitted together with the Application.
Please also see above the discussion under Eligible Investors on the consent
that must be given by an applicant to the disclosure of such applicants names
to the SEC.
Appointment of an Applicants shall indicate in the proper space provided for in the Application to
Eligible Broker Purchase to be issued and circulated in connection with the Offer the name of
the Trading Participants under whose name their Preferred B-2 Shares will be
registered. Such Trading Participant should be an Eligible Broker.
The PSE DDS Rules provide the following requirements for a Trading
Participant to qualify as an Eligible Broker to engage in dollar denominated
trades:
1. A Trading Participant must have attended a DDS training session or

seminar conducted by the PSE and must be operationally ready to
trade DDS, and shall issue a sworn certification to the PSE attesting
to its operational readiness. Notwithstanding the said certification, the
PSE has the option to assess the operational readiness of a Trading
Participant.
2. A Trading Participant shall have a US dollar deposit account with any

universal or commercial bank and a separate US dollar cash
settlement account with the designated settlement bank.
3. A Trading Participant shall also open a separate cash collateral

deposit account for dollar-denominated securities trading with the
44
designated settlement bank for the required cash collateral in US
dollars.
4. A Trading Participant shall also obtain the consent of its clients to the
disclosure of their names to the SEC, if said information is requested
by the SEC in the course of an investigation of a possible violation of
the SRC and its implementing rules and regulations and other orders
and issuances of the SEC, examination, official inquiry or as part of
surveillance procedures, and/or in compliance with other pertinent
laws.
5. A Trading Participant shall comply with any other requirements as

may be imposed by other regulatory agencies such as, but not limited
to, the BSP and SEC.
Pursuant to the PSE DDS rules, the PSE shall restrict Trading Participants
that fail to comply with such requirements from trading the DDS.
Payment for the Offer The Offer Shares must be paid for in full in US Dollars upon submission of
Shares application to purchase shares. Payment shall be through (1) remittance
through the Philippine Domestic Dollar Transfer System (PDDTS), or (2)
same bank transfer, in same day U.S. Dollar funds, to the bank account of the
Receiving Agent or the relevant Joint Lead Underwriter receiving the
application. All bank charges shall be for the account of the applicant.
Acceptance/Rejection The actual number of Offer Shares that an applicant will be allowed to
of Applications subscribe for is subject to the confirmation of the Joint Lead Underwriters. The
Issuer reserves the right to accept or reject, in whole or in part, or to reduce
any Application due to any grounds specified in the Underwriting Agreement.
Applications which were unpaid or where payments were insufficient and
those that do not comply with the terms of the Offer shall be rejected. Likewise,
receipt by the Receiving Agent or an Joint Lead Underwriter of an amount less
than the full purchase price of the Offer Shares subscribed for by an applicant
(whether because the deduction was a result of bank charges collected or for
any other reason), or receipt by the Receiving Agent or an Joint Lead
Underwriter of the purchase price beyond the cut-off time indicated above,
may be a ground for rejection of the Application.
Moreover, any acceptance or receipt of payment pursuant to the Application

does not constitute as approval or acceptance by the Issuer of the Application.
An Application, when accepted, shall constitute an agreement between the

applicant and the Issuer for the subscription to the Offer Shares at the time, in
the manner and subject to terms and conditions set forth in the Application to
Purchase and those described in the Preliminary Prospectus. Notwithstanding
the acceptance of any Application by the Issuer, the actual subscription by the
applicant for the Offer Shares will become effective only upon listing of the
45
Offer Shares on the PSE and upon the obligations of the Joint Lead
Underwriters under the Underwriting Agreement becoming unconditional and
not being suspended, terminated or cancelled, on or before the Listing Date,
in accordance with the provision of the said agreement. If such conditions have
not been fulfilled on or before the periods provided above, all Application
payments will be returned to the applicants without interest.
Refunds for Rejected In the event that the number of Offer Shares to be allotted to an applicant, as
Applications confirmed by a Joint Lead Underwriter, is less than the number covered by its
Application, or if an Application is wholly or partially rejected by the Issuer,
then the Company, through the Receiving Agent or the Joint Lead Underwriter
through which the applicant filed the application, shall refund, without interest,
within five (5) Business Days from the end of the Offer Period, all or the portion
of the payment corresponding to the number of Offer Shares wholly or partially
rejected.
For purposes of refunds for rejection of Applications, an applicant shall

indicate in the Application to Purchase the manner by which any refund shall
be made by choosing any one of the following options:
1. refund by crediting the Foreign Currency Deposit Unit (FCDU)

Account in the name of the Selling Agent/Trading Participant with
whom the applicant has filed the Application, which FCDU account
should be an account maintained with [];
2. refund by coursing through the Joint Lead Underwriter with whom the
applicant has filed the Application;
3. refund by crediting the FCDU Account in the name of the applicant,
whether such FCDU Account is maintained with [] or another bank;
or
4. refund by issuance of a dollar demand draft in the name of the
applicant, which dollar demand draft shall be delivered to the Joint
Lead Underwriter or Selling Agent through which the Application was
filed. In choosing this mode, the applicant is deemed to acknowledge
that it is aware that the bank draft shall be subject to the clearing
period of the shareholders depository bank.
All bank charges in relation to any of the modes of refund indicated above shall
be for the account of the applicant, and for this purpose, the amount to be
refunded may be reduced by the amount of such bank charges such that the
amount that the applicant will eventually receive by way of refund will be less
than the amount it remitted during the application process. However, if the
reason for the rejection is due to oversubscription of the Offer, all bank charges
in relation to any of the modes of refund indicated above shall be for the
account of the Issuer.
Refunds to be made through the Joint Lead Underwriters or the Selling Agent
with whom the applicant has filed the Application, or through the issuance of
a dollar demand draft, shall be at the applicants risk.
46
Rejected Applications to Purchase shall be made available for pick-up at the
office of the Receiving Agent or the Joint Lead Underwriter to which an
applicant has filed an Application.
Trading and Settlement Trading and settlement of the Preferred B-2 Shares shall be governed by the
PSE DDS Rules which are to be read in conjunction with the SRC, existing
BSP regulations, and other relevant laws, rules and regulations and to form
part of all rules of the PSE. Moreover, pursuant to the DDS Rules, all rules of
the PSE, Securities Clearing Corporation of the Philippines and CMIC not
inconsistent with the PSE DDS Rules are to apply to the DDS. Please refer to
Parts C and D of the PSE DDS Rules for the rules on the trading and
settlement of DDS in general.
Investors intending to buy securities on or after Listing Date will have to

appoint an Eligible Broker and comply with the applicable requirements of
such Eligible Broker.
Governing Law The Preferred B-2 Shares will be issued pursuant to the laws of the Republic
of the Philippines.
Offer Period The Offer Period shall commence at 9:00 a.m. on [] and end at 5:00 p.m. on
[]. The Issuer and the Joint Bookrunners and Joint Lead Underwriters reserve
the right to extend or terminate the Offer Period with the approval of the SEC
and the PSE.
Selling Agents Trading Participants of the Philippine Stock Exchange that qualify as Eligible
Brokers
Registrar / Stock BDO Unibank, Inc. Trust and Investments Group

Transfer Agent
Receiving Agent BDO Unibank, Inc. Trust and Investments Group
Depository Agent Philippine Depository & Trust Corp.
47
Expected Timetable The timetable of the Offer is as follows:
Dividend Rate Setting []

Notice of Final Offer Price to the []
SEC and PSE
Offer Period []
Deadline for Trading Participants []

Firm Commitment
PSE Trading Participants Allocation []
Deadline for General Publics 12:00 noon
Submission of Application []
Issue Date, Listing Date and []
Commencement of Trading on the
PSE
Any change in the dates included above may be subject to approval of the
SEC and PSE and other conditions.
48
DESCRIPTION OF THE PREFERRED B-2 SHARES
Set forth below is information relating to the Preferred B-2 Shares. This description is only a summary and
is qualified by reference to Philippine law and the Articles of Incorporation and By-laws of the Company, as
may be amended from time to time.
Share Capital
A Philippine corporation may issue common or preferred shares, or such other classes of shares with such
rights, privileges or restrictions as may be provided for in the articles of incorporation and the by-laws of the
corporation.
On May 26, 2017, the Companys stockholders approved the increase in the authorized capital stock of the
Company from 520,000,000 to 2,000,000,000 divided into the following shares: (i) from 520,000,000
to 1,400,000,000 worth of common shares (Common Shares); (ii) from 40,000,000 to 140,000,000
worth of preferred shares with a par value of 0.10 per share (the Preferred A Shares); and (iii) the
creation of new preferred shares amounting to 460,000,000 with a par value of 1.00 per share (the
Preferred B Shares, and together with the Preferred A Shares, the Preferred Shares). The
stockholders delegated to the board of directors (the Board) the power and authority to: (i) implement the
proposed increase in the Companys authorized capital stock, and (ii) fix the terms and conditions of the
Preferred B Shares as they may be issued in tranches and series. Pursuant to such delegated authority to
the Board, on September 8, the Board partially implemented the increase in authorized capital stock to
860,000,000 and fixed the general terms and conditions of the Preferred B Shares as discussed on page
As of the date of this Preliminary Prospectus and subject to the approval of the SEC of the pending
application for increase of authorized capital stock, the Company has an authorized capital stock of
860,000,000 divided into: (i) 520,000,000 Common Shares with a par value of 1.00 per share and
340,000,000 worth of Preferred Shares classified into: (i) 70,000,000 worth of Preferred A Shares divided
into 700,000,000 Preferred A Shares with a par value of 0.10 per share, and (ii) 270,000,000 worth of
Preferred B Shares with a par value of 1.00 per share. The Preferred B Shares are further classified into
the following series: (i) 70,000,000 worth of Preferred B-1 Shares, and (ii) 200,000,000 worth of
Preferred B-2 Shares, both having a par value of 1.00 per share.
The Preferred B-2 Shares
The Articles of the Company provides that the Preferred B-2 Shares shall have and be subject to such
rights, privileges, restrictions, conditions and subject to such limitation thereof as may be determined by the
Board, and be issued in such series as the Board may, from time to time, by resolution of directors,
determine.
The discussion below sets out the rights, privileges, restrictions and conditions of the Preferred B-2 Shares
as set out in the Articles and otherwise as approved by the Board and by the officers so authorized.
Registration and Listing
49
The Preferred B-2 Shares consisting in the aggregate of up to 200,000,000 cumulative, non-voting, non-
participating, non-convertible, redeemable U.S. dollar-denominated preferred shares shall be registered
with the SEC and listed on the PSE upon issuance by the SEC of an Order declaring effective the
Registration Statement and the Permit to Sell Securities, and approval by the PSE of the listing application.
The Preferred B-2 Shares are expected to be listed on the PSE Main Board under the symbol [].
Offer Price
The Offer Price of the Preferred B-2 Shares shall be U.S.$1.00 per Offer Share.
Par Value
The par value of the Preferred B-2 Shares shall be PHP1.00 per Offer Share.
Dividend Payment Dates, Dividend Periods and Dividend Rates
The Preferred B-2 Shares shall, subject to the conditions for the declaration and payment of dividends, bear
cumulative, non-participating cash dividends based on the Offer Price, at the Dividend Rate per annum
from the Issue Date, payable on the Dividend Payment Dates, being the last day of each 3-month / 90-day
Dividend Period following the Issue Date.
The dividends on the Preferred B-2 Shares will be calculated on a 30/360-day basis for each Dividend
Period. If the Dividend Payment Date is not a Business Day, dividends will be paid on the next succeeding
Business Day, without adjustments as to the amount of dividends to be paid.
The dividends on the Preferred B-2 Shares shall be computed at the Dividend Rate, which means (a) from
the Issue Date up to the Step Up Date, the Initial Dividend Rate, and (b) from the Step Up Date, the Initial
Dividend Rate adjusted by adding a Step Up Spread, the Step Up Rate.
(a) The Dividend Rate applicable from the Issue Date up to the Step Up Date shall be at the fixed
rate per annum identified as the Initial Dividend Rate.
(b) If the Preferred B-2 Shares shall not have been redeemed by the Company on the Step Up
Date, the Initial Dividend Rate shall be adjusted on the Step Up Date to the fixed rate per
annum identified as the Step Up Rate.
Conditions on Declaration and Payment of Dividends
The declaration and payment of cash dividends for each Dividend Period will be subject to the sole and
absolute discretion of the Board of the Issuer, to the extent permitted by applicable laws and regulations,
and the covenants (financial or otherwise) in the agreements to which the Issuer is a party. The Board will
not declare and pay dividends for any Dividend Period where payment of the Dividend would cause the
Issuer to breach any of its financial covenants. Please also see discussion under Dividends and Dividend
Policy on page 82 of this Preliminary Prospectus.
If the profits available to distribute as dividends are, in the Boards opinion, not sufficient to enable the
Issuer to pay in full, on the same date, both dividends on the Preferred B-2 Shares and the dividends on
other shares that are scheduled to be paid on or before the same date as the dividends on the Preferred
B-2 Shares and have an equal right to dividends as the Preferred B-2 Shares, the Issuer is required: first,
to pay in full, or to set aside an amount equal to, all dividends scheduled to be paid on or before that
dividend payment date on any shares with a right to dividends ranking in priority to that of the Preferred B-
2 Shares; and second, to pay dividends on the Preferred B-2 Shares and any other shares ranking equally
50
with the Preferred B-2 Shares as to participation in profits, pro rata to the amount of the cash dividends
scheduled to be paid to them. The amount scheduled to be paid will include the amount of any dividends
payable on that date and any arrears on past cumulative dividends on any shares ranking equal in the right
to dividends with the Preferred B-2 Shares.
The profits available for distribution are, in general and with some adjustments, equal to the Issuers
accumulated, realized profits less accumulated, realized loss.
Cumulative
Cash dividends on the Preferred B-2 Shares will be cumulative. If for any reason, the Board does not
declare cash dividends on the Preferred B-2 Shares for a Dividend Period, the Company shall not pay
dividend on the Dividend Payment Date for such Dividend Period. However, on any future Dividend
Payment Date, on which cash dividends are declared, holders of the Preferred B-2 Shares shall receive
the dividends due them on such Dividend Payment Date as well as all dividends accrued and unpaid to the
holders of the Preferred B-2 Shares prior to such Dividend Period.
Holders of Preferred B-2 Shares shall not be entitled to participate in any other or further dividends beyond
the dividends specifically payable on the Preferred B-2 Shares.
The Company covenants that, in the event (for any reason):
(a) any dividends due with respect to any Preferred B-2 Shares then outstanding for any period
are not declared and paid in full when due; or
(b) any other amounts payable under the Preferred B-2 Share terms and conditions are not paid
in full when due for any reason,
then the Company will not declare or pay any dividends or other distributions in respect of, or repurchase
or redeem, securities ranking junior to Preferred B-2 Shares (or contribute any moneys to a sinking fund for
the redemption of any securities ranking junior to Preferred B-2 Shares)until any and all amounts described
in (a) and (b) have been paid to the holders of the Preferred B-2 Shares.
Subject to legal requirements, the Issuer will procure that no subsidiary over which the Issuer has a
Controlling Participation will pay any discretionary dividends or other discretionary distributions on, or at the
Issuer's discretion repurchase or redeem, any security ranking senior to the respective subsidiary's
common shares other than those senior securities held by the Issuer or a wholly-owned subsidiary thereof
(or contribute any moneys to a sinking fund for the purposes of any such redemption).
Procedures for Payment of Cash Dividend Declarations
Please also see Terms and Conditions of the Offer - Procedures for Payment of Cash Dividend
Declarations as set out on page 36 of this Preliminary Prospectus for a detailed discussion on the
procedure for the payment of cash dividend declarations.
Optional Redemption and Purchase
51
As and if declared by its Board of Directors and subject to the requirements of applicable laws and
regulations, the Company may redeem the Preferred B-2 Shares in whole and not in part without the
consent of the holder(s) of the Preferred B-2 Shares:
(a) on an Optional Redemption Date, which is the fifth anniversary from the Issue Date or on any
Dividend Payment Date thereafter; or
(b) at the Early Redemption Date, which is at any time prior to the first Optional Redemption Date,
if an Accounting Event, a Tax Event, or a Change of Control Event (each as defined below)
has occurred and is continuing.
An Accounting Event shall occur if an opinion of a recognized person authorized to provide auditing services
has stated that there is more than an insubstantial risk that the funds raised through the issuance of the
Preferred B-2 Shares may no longer be recorded as equity pursuant to the International Financial
Reporting Standards issued by the IFRS, or such other accounting standards, or such other accounting
standards which succeed IFRS, applied by the Company for drawing up its consolidated financial
statements for the relevant financial year.
However, if there is available to the Company the opportunity to eliminate an Accounting Event by pursuing
some reasonable measure that will not have an adverse effect on the Company or the holders of the
Preferred B-2 Shares, and will not involve any material cost to the Company or the holders of the Preferred
B-2 Shares, the Company shall pursue such measure in lieu of redemption [prior] to the occurrence of an
Accounting Event.
A Tax Event shall occur if any payment to be made by the Company to the holders of the Preferred B-2
Shares becomes subject to any new tax, which makes such payment more burdensome to the Company,
as a result of changes in any applicable law, rule or regulation, or in the interpretation thereof, and such tax
cannot be avoided by use of reasonable measures available to the Company.
Any redemption of shares (other than by reason of a Change of Control Event which shall be governed by
the provisions set out below):
(i) may only occur on one of the Optional Redemption Dates or on the Early Redemption Date;
(ii) may only occur if the Company has provided the holders of the Preferred B-2 Shares with not
less than 30 nor more than 60 calendar days written notice of the redemption, such notice to
include an explanation of the authority under which the redemption is to be made; and
(iii) shall be at the Preferred Redemption Price, which is equal to the aggregate of (1) the Offer
Price and (2) any accrued and unpaid dividends in respect of such Preference Share for the
period commencing from (and including) the Issue Date and ending on (but excluding) the
relevant redemption date. For the avoidance of doubt, the Preferred Redemption Price shall
include all Dividends in Arrears.
With respect to any redemption of Preferred B-2 Shares made on the basis of a Tax Event having occurred,
prior to the delivery of any notice of redemption pursuant to item (ii) of the immediately preceding paragraph,
the Company shall deliver to the Companys registrar and transfer agent: (1) a certificate signed by [two
directors] of the Company stating that the Company is entitled to effect such redemption; and (2) an opinion
of counsel or advisor to the Company experienced in such matters to the effect that a Tax Event has
occurred. The delivery of such opinion shall constitute conclusive evidence of the occurrence of a Tax
Event for all purposes.
52
With respect to any redemption of Preferred B-2 Shares made on the basis of an Accounting Event having
occurred, prior to the delivery of any notice of redemption pursuant to item (ii) above, the Company shall
deliver to the Companys registrar and transfer agent: (1) a certificate signed by [two directors of the
Company] stating that the Company is entitled to effect such redemption; and (2) an opinion of counsel or
advisor to the Company experienced in such matters to the effect that an Accounting Event has occurred.
The delivery of such opinion shall constitute conclusive evidence of the occurrence of an Accounting Event
for all purposes.
Change of Control: Step Up and Optional Redemption and Purchase
Change of control or a CoC Event shall be deemed to have occurred if any person or persons acting in
concert or any third person or persons acting on behalf of such person(s) at any time acquire(s) directly or
indirectly a controlling participation in the Company. For purposes of this paragraph, the word controlling
participation means ownership of at least 51% of the total issued and outstanding voting capital stock, or
the right to elect at least 51% of the total number of the members of the Board of Directors of the Company.
In the event of the occurrence of a CoC Event, the Dividend Rate will be increased by [400] basis points
commencing and including the day falling 180 days after the day on which a CoC Event has occurred.
If a CoC Event has occurred and as and if declared by its Board of Directors and subject to the requirements
of applicable laws and regulations, the Company may at any time redeem the Preferred B-2 Shares in
whole (not in part) without the consent of the holders of such Preferred B-2 Shares, at the CoC Preferred
Redemption Price equal to the aggregate of the (1) Offer Price, and (2) (i) any accrued and unpaid dividends
computed on the applicable Dividend Rate in respect of such Preference Share for the period commencing
from (and including) the Issue Date and ending on (but excluding) the redemption date, and (ii) in case the
redemption is made on the 180th day after the day on which a CoC Event has occurred or at any time after
the said 180th day, the additional [400] basis points commencing from (and including) the day falling 180
days after the day on which a CoC Event has occurred and ending on (but excluding) the redemption date.
For the avoidance of doubt, the CoC Preferred Redemption Price shall include all Dividends in Arrears.
Any redemption by reason of a CoC Event may only occur if the Company has provided the holders of the
Preferred B-2 Shares with not less than 30 nor more than 60 Business Days written notice of the
redemption, such notice to include an explanation of the authority under which the redemption is to be
made. Prior to the delivery of any notice of redemption pursuant to the preceding statement, the Company
shall deliver to the Companys registrar and transfer agent: (1) a certificate signed by [two directors of the
Company] stating that the Company is entitled to effect such redemption; and (2) an opinion of counsel or
advisor to the Company experienced in such matters to the effect that a CoC Event has occurred. The
delivery of such opinion shall constitute conclusive evidence of the occurrence of a CoC Event for all
purposes.
General Provisions Applicable to all Events of Optional Redemption
With effect from the date upon which the redemption of Preferred B-2 Shares occurs (the Redemption
Date), the holders of the Preferred B-2 Shares concerned shall cease to be entitled to any rights in respect
of the redeemed Preferred B-2 Shares, except for the right to receive, to the extent not received yet, the
Preferred Redemption Price or the CoC Preferred Redemption Price (as applicable).
The Preferred Redemption Price or the CoC Preferred Redemption Price shall be paid within 10 Business
Days of the redemption date. The payment of the Preferred Redemption Price or the CoC Preferred
Redemption Price, which shall be in priority to the payment of any distributions or other payments to any
53
holder of Ordinary Shares, shall extinguish any claim the former holder of the Preferred B-2 Shares has
against the Company for the Preferred Redemption Price or the CoC Preferred Redemption Price and any
dividends on the Preferred B-2 Shares.
Any Preferred B-2 Shares redeemed pursuant to the foregoing shall be cancelled, but shall remain part of
the Companys authorized capital and shall be available to be reissued by resolution of the directors.
Purchases by the Company of Preferred B-2 Shares
After Listing Date, the Company may purchase the Preferred B-2 Shares at any time in the open market or
by public tender or by private contract at any price through the PSE. The Preferred B-2 Shares so purchased
may either be redeemed (pursuant to the terms and conditions of redemption as set out in this Preliminary
Prospectus) and cancelled or kept as treasury shares.
Status
The Preferred B-2 Shares will constitute the direct and unsecured subordinated obligations of the Company
ranking at least paripassu in all respects and ratably without preference of priority among themselves.
The Preferred B-2 Shares shall rank as regards participation in the Companys profits that are legally
available for distribution as dividends, if, as, and when declared by the Board of Directors, paripassu with
all other shares in the capital of the Company to the extent that they are expressed to rank paripassu
therewith and in priority to the common shares.
Voting Rights
The holders of the Preferred B-2 Shares shall have no voting right except as specifically provided by law.
Thus, holders of the Preferred B-2 Shares shall not be eligible, for example, to elect the Companys Board
of Directors and to vote for or against the issuance of stock dividends. However, the holders of Preferred
B-2 Shares shall have the right to attend, speak and vote on matters which the Corporation Code considers
significant corporate acts that may be implemented only with the approval of shareholders including those
holding shares denominated as non-voting in the articles of incorporation. These acts, which require the
approval of shareholders representing at least two-thirds of the issued and outstanding capital stock of the
Company in a meeting duly convened for the purpose, are as follows:
(a) Amendment of the articles of incorporation (including any increase or decrease in capital stock)
(b) Adoption and amendment of by-laws;
(c) Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of the
corporate property;
(d) Incurring, creating or increasing bonded indebtedness;
(e) Increase or decrease of capital stock;
(f) Merger or consolidation of the Company with another corporation or other corporations;
(g) Investment of corporate funds in another corporation or business in accordance with this Code;
and
(h) Dissolution of the corporation.
Further, the holders of Preferred B-2 Shares shall have the right to attend, speak and to vote at any general
meeting of the Company convened when the dividend on the Preferred B-2 Shares has been duly declared
by the Board and has not been paid in full when due and remains unpaid for at least six months.
Appraisal Rights
54
Philippine law recognizes the right of a shareholder to institute, under certain circumstances, proceedings
on behalf of the corporation in a derivative action in circumstances where the corporation itself is unable or
unwilling to institute the necessary proceedings to redress wrongs committed against the corporation or to
vindicate corporate rights, as for example, where the directors themselves are the male factors.
In addition, the Corporation Code grants a shareholder a right of appraisal in certain circumstances where
he has dissented and voted against a proposed corporate action, including:
(a) any amendment of the articles of incorporation which has the effect of adversely affecting the
rights attached to his 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;
(b) the sale, lease, exchange, transfer, mortgage, pledge or other disposal of all or substantially
all the assets of the corporation;
(c) the investment of corporate funds in another corporation or business or for any purpose other
than the primary purpose for which the corporation was organized; and
(d) A merger or consolidation.
In these circumstances, the dissenting shareholder may require the corporation to purchase his shares at
a fair value thereof as of the day prior to the date on which the vote was taken, excluding any appreciation
or depreciation in anticipation of such corporate action.
If within a period of sixty (60) days from the date the corporate action was approved by the shareholders,
the withdrawing shareholder and the corporation cannot agree on the fair value of the shares, it shall be
determined and appraised by three (3) disinterested persons, one of whom shall be named by the
shareholder, another by the corporation, and the third by the two thus chosen. The findings of the majority
of the appraisers shall be final, and their award shall be paid by the corporation within thirty (30) days after
such award is made.
The SEC will, in the event of a dispute, determine any question about whether a dissenting shareholder is
entitled to this right of appraisal. No payment shall be made to any dissenting shareholder unless the
corporation has unrestricted retained earnings in its books to cover such payment. Upon payment by the
corporation of the agreed or awarded price, the shareholder shall forthwith transfer his shares to the
corporation.
Notice of Meeting
Notices of the annual or special meeting of the shareholders shall be sent out by the Corporate Secretary
at least fifteen (15) business days prior to the date of the meeting to each shareholder of record at his last
known address. The notice shall state the place, date and hour of the meeting, and the purpose or purposes
for which the meeting is called.
Non-Participating
Holders of the Preferred B-2 Shares shall not be entitled to participate in any other or future dividends
beyond the dividends specifically payable on the Preferred B-2 Shares.
Non-Convertible
Holders of the Preferred B-2 Shares shall have no right to convert the Preferred B-2 Shares to any other
preferred shares or common shares of the Company.
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No Pre-emptive Rights
Holders of the Preferred B-2 Shares shall have no pre-emptive rights to subscribe to any shares (including,
without limitation, treasury shares) that will be issued by the Company.
Liquidation Rights
In the event of any liquidation, dissolution or winding up (whether voluntarily or involuntarily), the holders of
the Preferred B-2 Shares at the time outstanding will be entitled to receive, in U.S. dollars, out of the
Companys assets available for distribution to shareholders, together with other holders of any of the
Companys shares ranking, as regards repayment of capital in the aforesaid events, paripassu with the
Preferred B-2 Shares and before any distribution of assets is made to holders of any class of the Companys
shares ranking after the Preferred B-2 Shares as regards repayment of capital in the aforesaid events, an
amount equal to the Offer Price, plus an amount equal to any dividends declared but unpaid in respect of
the previous Dividend Period to (including) the date of commencement of the Companys liquidation,
dissolution or winding up (Liquidation Distribution).
If, upon any return of capital in the Companys liquidation, dissolution or winding up, the amount payable
with respect to the Preferred B-2 Shares and any other of the Companys shares ranking as to any such
distribution pari passu with the Preferred B-2 Shares are not paid in full, the holders of the Preferred B-2
Shares and Preferred B-1 Shares will share ratably in any such distribution of the Companys assets in
proportion to the full respective preferential amounts to which they are entitled.
After payment of the full amount of the Liquidation Distribution to which they are entitled, the holders of the
Preferred B-2 Shares will have no right or claim to any of the Companys remaining assets and will not be
entitled to any further participation or return of capital in such liquidation, dissolution or winding up.
Taxes
Please see Philippine Taxation on page 156 of this Preliminary Prospectus for the tax consequences of
investing in the Preferred B-2 Shares.
Form, Title and Registration of the Preferred B-2 Shares
The Preferred B-2 Shares will be lodged with PDTC as Depository Agent at least two trading days prior to
Listing Date through PSE Trading Participants nominated by the accepted Applicants. The nominated
Trading Participants must be Eligible Brokers.
After the Listing Date, the Shareholders may request to receive the stock certificates evidencing their
investment in the Preferred B-2 Shares through their nominated Eligible Brokers. Any expense that will be
incurred in relation to such issuance shall be for the account of the requesting shareholder.
Applicants will be required to give their consent to their nominated Eligible Broker for the collection,
processing and sharing of their personal information with the PDTC, which the latter will use to set up the
applicants Name on Central Depository (NOCD) sub-accounts. Under NOCD facility, the recording of the
applicants DDS holdings, such as the Offer Shares, will be at the beneficial owner level, under segregated
sub-accounts in the applicants names.
Please see sections on The Philippine Stock Market Amended Rule of Lodgment of Securities and
Issuance of Stock Certificates for Certificated Shares of this Preliminary Prospectus for additional
conditions.
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Selling and Transfer Restrictions
Initial placement of the Preferred B-2 Shares and subsequent transfers of interests in the Preferred B-2
Shares shall be subject to normal selling restrictions for listed securities as may prevail in the Philippines
from time to time and the additional requirements under the PSE DDS Rules for the trading and settlement
of the Preferred B-2 Shares.
Minimum Subscription to the Preferred B-2 Shares
Each Application shall be for a minimum of [1,000] Preferred B-2 Shares, and thereafter, in multiples of
[100] Preferred B-2 Shares. No Application for multiples of any other number of Preferred B-2 Shares will
be considered.
Stock Transfer Agent
The Companys stock transfer agent for its shares is BDO Unibank, Inc. Trust and Investments Group
with address at 15th Floor, South Tower, BDO Corporate Center, 7899 Makati Avenue, Makati City.
Rights of Inspection
Philippine stock corporations are required to file copies of their annual financial statements with the SEC.
Corporations whose shares are listed on the PSE are also required to file quarterly and annual reports with
the SEC and the PSE. Shareholders are entitled to request copies of the most recent financial statements
of the corporation which include a balance sheet as of the end of the most recent tax year and a profit and
loss statement for that year. Shareholders are also entitled to inspect and examine the books and records
that the corporation is required by law to maintain.
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RISK FACTORS
An investment in the Offer Shares involves a number of risks. The price of securities can and do fluctuate,
and any individual security may experience upward or downward movement, and may even become
valueless. There is an inherent risk that losses may be incurred rather than profit made as a result of buying
and selling securities. Past performance is not a guide to future performance. There is an extra risk of losing
money when securities are bought from smaller companies. There may be a big difference between the
buying price and the selling price of the securities. An investor deals in a range of investments, each of
which may carry a different level of risk. Investors should carefully consider all the information contained in
this Preliminary Prospectus, including the risk factors described below, before deciding to invest in the Offer
Shares. The occurrence of any of the following events, or other events not currently anticipated, could have
material adverse effect on the Companys business, financial condition and results of operations and cause
the market price of the Offer Shares to decline. All or part of an investment in the Offer Shares could be
lost.
The means by which the Company intends to address the risk factors discussed herein are principally
presented under the captions Business, Managements Discussion and Analysis of Financial Condition
and Results of Operations, Industry, and Board of Directors and Senior ManagementCorporate
Governance of this Preliminary Prospectus. This risk disclosure does not purport to disclose all of the risks
and other significant aspects of investing in the securities. An investor should undertake his/ her own
research and study on the trading of securities before commencing any trading activities. An investor should
seek professional advice if he/ she is uncertain of, or has not understood any aspect of the securities to
invest in or the nature of risks involved in the trading of securities specially those high risk securities. He/
she may request information on the securities and issuer thereof from the Commission which are available
to the public.
RISKS RELATING TO THE COMPANYS BUSINESS
The Cirtek Group's business is highly dependent on an industry that is characterized by rapid
technological changes, such that it must be able to adapt to new technologies and be flexible to
customer needs in order to remain competitive.
The pace of innovation in the electronics and communications industries is high. In order to remain
competitive, the Cirtek Group must adapt to new technologies required by their customers. They must have
the engineering capability for product development to meet their clients needs.
The demand for the Companys solutions is derived from the demand of end customers particularly for end-
use applications in the computing, communications, consumer automotive, and industrial electronics
industries. These industries have historically been characterized by rapid technological change, evolving
industry standards, and changing customer needs. There can be no assurance that the Company will be
successful in responding to these industry demands. New services or technologies may also render the
Companys existing services or technologies less competitive. If the Company does not promptly make
measures to respond to technological developments and industry standard changes, the eventual
integration of new technology or industry standards or the eventual upgrading of its facilities and production
capabilities may require substantial time, effort, and capital investment.
Thus, the Cirtek Group is focused on continuous R&D, new product development, technical innovation and
re-engineering. This is done to ensure a strong and consistent pipeline of new products, enhance process
58
capability and to reduce production cost. They have successfully collaborated with their customers in a
number of projects, co-developing new technologies that are customer specific, thereby ensuring long-term
partnership with customers.
The Cirtek Group develops its own technology, and product roadmaps. The Cirtek Group ensures that it
has the skills necessary to meet its customers needs through training and hiring.
Risks on the acquisition of Quintel Cayman, Ltd. and its subsidiaries
The Company is exposed to several risks due to their recent acquisition of Quintel Cayman, Ltd. and its
subsidiaries, Quintel Technology, Ltd. and Quintel USA.
The Company may have potential difficulties in integrating the new business to their existing business
model, as their new product offerings may require different marketing and operational strategies. There is
also the risk pertaining to the existing customer base of Quintel, as Cirtek may lack knowledge of Quintels
customers behavior.
There is commercial risk if the Company is unable to turnaround the business of Quintel and make it
profitable. Cirtek may be not be able maintain Quintels existing product licenses, while Quintels R&D may
be unable to produce new projects in its pipeline or create new tech or innovations to satisfy their customers.
As a result, the Company would not be able to meet their projected level of sales or return of investment
for their new business.
To manage these risks, Cirtek, in its acquisition of Quintel, carried out extensive due diligence covering
operations, accounting and tax, legal, and Intellectual Property. The Company also commissioned third
party studies to validate Quintel's technologies, current products, future product offerings, and Quintel's
industry position in the base station antenna market in North America.
Cirtek is also investing in the key areas of sales and marketing and R&D. Cirtek, identified and signed up
the key senior management, R&D, and sales and marketing personnel in Quintel, offering incentive and
retentions programs. Quintel will also be hiring additional sales representatives to focus on the North
American market and to build presence in new markets such as South America and Asia. Quintel will
also increase its R&D personnel to support and fast-track the introduction of new products to the market.
Quintel also introduced Cirtek to its key customers, AT&T and Verizon, who positively received the news
of Cirtek assuming ownership of Quintel.
The Company believes the acquisition of Quintel will create significant synergies. Cirtek, being the sole
contract manufacturer of Quintel, understands the Quintel antennas. The Company foresees significant
benefits through collaborative value engineering, R&D, and cost reduction. Cirtek has begun
implementing cost-reduction program to improve gross margins. This would include lower material costs,
lower labor hours, and lower inbound and outbound logistics costs.
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Some of the Cirtek Groups customers have the contractual right to place orders in quantities less
than the agreed minimum. The customers also require that the latter maintain certain key
certifications and meet technical audit standards in order to be an accredited assembly and testing
subcontractor.
The Company is required to maintain certain certifications, which include among others, ISO9001,
ISO14001, QS9000/TS16949, Defense Supply Center of Columbus, and British Approval Board Telecom,
TUV Product Safety Certification, and FCC certification. In addition, the Company must pass annual audits
conducted by its customers, in order to maintain its status as an accredited assembly and testing
subcontractor. The failure by the Company to maintain any of its key accreditations could have a material
adverse effect on the Cirtek Groups financial condition, or results of operation.
The Company has managed to consistently obtain all customary international accreditations certifying to its
world-class standards of process and manufacturing from quality institutions such as TUV, Defense Supply
Center of Columbus, and British Approval Board Telecom. This allows it to meet various industry
requirements and standards. The Company continually monitors industry requirements and standards
issued by applicable international accreditation bodies and implements the changes or adjustments
necessary to remain compliant with the levels of standard imposed on competitive industry members.
The Company may be exposed to risk of inventory obsolescence and working capital tied up in
inventories.
The Company may be exposed to a risk of inventory obsolescence because of rapidly changing technology
and customer requirements. Inventory obsolescence may require it to make adjustments to write down
inventory to the lower of cost or net realizable value, and its operating results could be adversely affected.
The Company is cognizant of these risks and accordingly exercises due diligence in materials planning.
The Company also provisions in its inventory systems and planning a reasonable amount for obsolescence.
It works with key suppliers to establish supplier-managed inventory arrangements that will mutually reduce
the risk. In addition, the Company often negotiates buy back arrangements with customers where, in the
event the customers purchase orders are delayed, canceled, or enter in the end-of-life phase, the
customers assumes the risk and compensates the Company for the excess inventory.
The Cirtek Group may be exposed to liquidity risk from delayed payments of customers, as well as
credit risks on its receivables from clients.
The Cirtek Group may encounter difficulty with cash inflows due to delayed payments of customers, which
in turn may affect their working capital cycle.
The Company is also exposed to credit risk if its customers are unable to fully settle amounts due for
services and products delivered, as well as other claims owed to the Company.
That said, the Company believes it has been highly efficient in its collection of accounts receivables. It
likewise believes it has a solid financial position which should mitigate liquidity risk that may result from
delayed payment of customers.
Meanwhile, credit risk is managed in accordance with the Companys credit risk policy, which requires the
evaluation of the creditworthiness of each customer. Cirtek requires new customers to undergo an initial
evaluation period of six months, to pay cash upon delivery of products or services. Existing customers are
given a credit term of between 30 to 45 days, which the Company strictly implements.
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The Company carries out the necessary due diligence customary for the business prior to booking orders
from new customers, and it also strictly enforces its collection policies to all customers. The Company has
not made any significant write-off of receivables in its operating history.
CEC and CATSI are required to maintain governmental approvals
As PEZA-registered entities, the Subsidiaries are required to submit certain periodic reports to PEZA such
as annual reports, quarterly reports, and audited financial statements. They are also required to submit
quarterly, semi-annual, and annual reports to the Department of Energy and Natural Resources as part of
its Environmental Compliance Certificate requirements. CECs and CATSIs failure to comply with these
reports and with any other requirements or regulations of these government agencies could expose them
to penalties and the revocation of the registrations.
CEC and CATSI ensure compliance with these requirements by assigning dedicated personnel to monitor,
prepare the necessary filings, and liaise with the relevant government agencies.
The Companys industry is dependent on the continuous growth of outsourcing by OEMs
The Company belongs to an industry that is dependent on the strong and continuous growth of outsourcing
in the computing, communications, consumer automotive, and industrial electronics industries where
customers choose to outsource production of certain components and parts, as well as functions in the
production process. A customers decision to outsource is affected by its ability and capacity for internal
manufacturing and the competitive advantages of outsourcing.
The Companys industry depends on the continuing trend of increased outsourcing by its customers. Future
growth in its revenue depends on new outsourcing opportunities in which it assumes additional
manufacturing and supply chain management responsibilities from its customers. To the extent that these
opportunities do not materialize, either because the customers decide to perform these functions internally
or because they use other providers of these services, the Companys future growth could be limited.
The Company believes that its global footprint, with sales reach in Asia, Europe, the U.S., Africa, and South
America1, its global supply chain systems and capabilities, and its design services will continue to provide
strategic advantages for customers to outsource parts of their product development and manufacturing
processes to the Company.
The RF, Microwave and Millimeterwave segment of the wireless communication industry is competitive and
characterized by rapid technological changes
The Company operates in a highly competitive industry. As a result of the rapid technological changes,
regulation and changing customer needs, there can be no assurance that the Company will be successful
in responding to these industry demands.
The Company offers full turnkey solutions at very competitive price points. The Company also has unique
and strong manufacturing capabilities to build components, modules, up to system level.
1Allof Cirtek Groups invoiced customers are based in three main regions, namely, Asia, Europe, and the
United States. These customers deploy Cirteks products to other regions such as Africa and South
America.
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The Company is exposed to the cyclical nature of the semiconductor industry
The semiconductor industrys growth is largely driven by end markets in communications, data processing,
consumer electronics, the automotive industry, and the industrial sector for which semiconductors are
critical components. The industry has historically been cyclical, and affected by economic downturns. The
Company currently derives 35% of its sales and operating profits from the assembly and testing services it
provides other semiconductor companies worldwide. During periods of weak demand or excess capacity,
the Cirtek Groups customers may opt not to continue with, or cancel, existing orders. These events would
have a material adverse effect on the Companys business, financial condition and results of operations.
To mitigate this risk, the Cirtek Group continually monitors its direct costs such as raw materials, spare
parts, and direct and indirect labor and customers provide order forecasts that enable them to properly plan
direct material purchases. They have also implemented an internal reporting system, which allows senior
management to monitor profitability for each of the products on a weekly basis. The Cirtek Group believes
that these measures allow it to respond quickly and make the necessary adjustments, which has proven
crucial in maintaining its competitiveness.
In addition, the products have diverse end-user applications in different industries, which allow it to cope
with upswings and downswings in demand. Customers are also geographically dispersed among Europe,
U.S. and Asia. Thus, because of this diversity, the Cirtek Group is not dependent on a single market. In
2016, 40% of Cirtek's revenue came from the U.S., 40% from Europe, and 20% from Asia.
Significant competition in the assembly and testing segment of the semiconductor industry could
adversely affect the Companys business.
The assembly and testing segment of the semiconductor industry is highly competitive. Cirtek competes
with both local and foreign firms to provide these back-end processes to semiconductor manufacturers.
The Companys competitors include Integrated Device Manufacturers (IDM) with their own in-house
assembly and testing capabilities, and similar independent semiconductor assembly and test
subcontractors. In order to remain competitive, the Company has to price its services and products
reasonably, as well as maintain the quality in its manufacturing processes and deliver its products on a
timely basis. Discussion on the Companys competitors is found on page 107 of this Prospectus. A
discussion on the semiconductor industry is found on page 107 of this Prospectus.
The Company has in place, strict procedures to ensure the quality of its products. Through the Quality
Assurance division of its subsidiary CEC, the Company ascertains its processes and products are compliant
with its clients requirements, and conducts regular audits of manufacturing procedures. The Company
believes it has a dedicated and experienced management team that understands the industrys
requirements and technology trends that allows the Company to be highly competitive.
At least 65% of the Companys product portfolio pertains to customer specific applications, which cannot
be easily replicated by competitors. Moreover, accreditation of a qualified supplier normally takes a
minimum of nine months. Hence, once its requirements are met, it is not easy for a customer to transfer to
a competitor.
As a PEZA-registered entity, CEC enjoys certain incentives like preferential 5% gross income tax, duty free
importation of materials, and reduced power rate vis-a-vis non-registered entities which enables it to price
62
its products competitively. It likewise continually monitors its direct costs such as raw materials, spare parts,
and direct and indirect labor.
The volatility in the price of raw materials and the availability of supply used by the Company in its
production process could affect its profitability.
A significant increase in the price of or a significant reduction in the supply of raw materials could adversely
affect the cost of sales and other expenses. For certain products, raw materials such as gold and copper
can account for up to 40% of cost of goods sold.
While these risks are uncontrollable, the Company's practice has been to bill its customers for any price
adjustments whenever the cost of direct materials such as gold increases. In order to ascertain access to
raw materials at all times, the Company as a policy, maintains at least three to four suppliers for each of
the raw materials it uses for production. The Company also has clients who provide certain raw materials
to them for exclusive use in these clients products, which serve to reduce the production costs.
Customers are required to submit order forecasts ranging from three to six months, which the Company
uses to project its supply requirements.
The Company is exposed to foreign exchange risk
The Company uses the US$ as its functional currency and is therefore exposed to foreign exchange
movements, primarily in the Philippine Peso currency. Its expenses denominated in Philippine Peso are
local expenses such as labor, utilities, and local content and comprise around 40% of the Companys total
expense.
The Company follows a policy to manage its currency risk by closely monitoring its cash flow position and
by providing forecast on all other exposures in non-US$ currencies. To further manage foreign exchange
risk, the Company from time to time enters into currency swaps and forward contracts.
The Company is exposed to the risk of industrial or labor disputes
The Company has maintained a harmonious relationship between management and staff. Cirtek provides
employee benefits and complies with labor standards. The Company is not unionized; however, to foster
better employee-management relations, there is a labor management council composed of committees with
representatives from both labor and management. Labor management councils are established to enable
the workers to participate in policy and decision-making processes, in so far as said processes will directly
affect their rights, benefits and welfare, except those which are covered by collective bargaining agreement
or are traditional areas of bargaining. The scope of the council/committees functions consists of information
sharing, discussion, consultation, formulation, or establishment of programs or projects affecting the
employees in general or the management.
More than half of the Group's workforce consists of contractual employees. These are the direct employees
of the Group's subcontractors who perform specific services or certain aspects of the manufacturing
process. Such arrangements involve a "trilateral relationship" among: (i) the Group, as the principal who
decides to farm out the job, work or service to a contractor; (ii) the contractor who has the capacity to
independently undertake the performance of the service; and (iii) the contractual workers engaged by the
contractor to accomplish the job, work, or service for the Group.
Under the Labor Code of the Philippines, the Cirtek Group, as principal in the contracting relationship, is
liable as an indirect employer to the contractual employees, in the same manner and extent that it is liable
63
to its own employees. Such liability is to the extent of the work performed under the contract and arises
when the contractor fails to pay the wages of its employees or violates any provision of the Labor Code.
The principal can then seek reimbursement from the contractor/agency.
To date, there are no pending labor-related claims filed by any contractual employee against any member
of the Group.
The Cirtek Group nevertheless continues to be exposed to the risk of industrial or labor disputes. The
occurrence of such events could have a material adverse effect on the Companys business, financial
condition, or results of operation. Regardless of the outcome, these disputes may lead to legal or other
proceedings and may result in substantial costs, delays in the subsidiaries' development schedule, and the
diversion of resources and managements attention
Risk on the separation of key employees
The Cirtek Group relies on the continued employment of, and its ability to attract, qualified engineers, key
managers, and technical personnel to ensure its continued success. The competition for such skilled
workforce is strong, as seen in aggressive head hunting of employees.
The Cirtek Group gives attractive compensation packages that combine standard remuneration and
performance incentives. The Cirtek Group provides continuous training and development to managers and
direct employees. These training sessions include technical and managerial courses.
Key employees are also bound by employment contracts which have standard confidentiality, non-compete
and non-solicitation clauses.
RISKS RELATING TO COUNTRIES WHERE THE COMPANY OPERATES (INCLUDING THE

PHILIPPINES)
The Company conducts business in various jurisdictions, exposing it to business, political,

operational, financial, and economic risks due to its operations in these jurisdictions
There is no assurance that there will be no occurrence of an economic slowdown in the countries where
the Company operates, including the Philippines. Factors that may adversely affect an economy include
but are not limited to:
decreases in business, industrial, manufacturing, or financial activity in the Philippines or in the

global market,
scarcity of credit or other financing, resulting in lower demand for products and services,
the sovereign credit ratings of the country,
exchange rate fluctuations,
a prolonged period of inflation or increase in interest rates,
changes in the relevant government's taxation policies,
natural disasters, including typhoons, earthquakes, fires, floods, and similar events,
political instability, terrorism, or military conflict, and
other regulatory, political, or economic developments in or affecting the Company
Notwithstanding the foregoing, the global operations, marketing, and distribution of the Companys products
inherently integrate the impact of any economic downturn affecting a single country where the Company
operates, and enables the Company to shift the focus of its operations to other jurisdictions.
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Changes in law including unexpected changes in regulatory requirements, affect the Companys business
plans, such as those relating to labor, environmental compliance, and product safety. Delays or difficulties,
burdens, and costs of compliance with a variety of foreign laws, including often conflicting and highly
proscriptive regulations also directly affect the Companys business plans and operations, cross-border
arrangements, and the inter-company systems.
Increases in duties and taxation and a potential reversal of current tax or other currently favorable policies
encouraging foreign investment or foreign trade by host countries may lead to the imposition of government
controls, changes in tariffs, or trade restrictions on component or assembled products. This, in turn, may
result to adverse tax consequences, including tax consequences which may arise in connection with inter-
company pricing for transactions between separate legal entities within a group operating in different tax
jurisdictions, as well as increases in cost of duties and taxation.
Actions which may be taken by foreign governments pursuant to any trade restrictions, such as most
favored nation status and trade preferences, as well as potential foreign exchange and repatriation controls
on foreign earnings, exchange rate fluctuations, and currency conversion restrictions may adversely affect
the Companys business and financial condition.
Under existing foreign exchange controls in the Philippines, as a general rule, Philippine residents may
freely dispose of their foreign exchange receipts and foreign exchange may be freely sold and purchased
outside the Philippine banking system. Restrictions exist on the sale and purchase of foreign exchange in
the Philippine banking system. In the past, the Government has instituted restrictions on the ability of foreign
companies to use foreign exchange revenues or to convert Philippine pesos into foreign currencies to
satisfy foreign currency- denominated obligations, and no assurance can be given that the Government will
not institute such or other restrictive exchange policies in the future.
Environmental laws applicable to the Companys projects could have a material adverse effect on
its business, financial condition or results of operations.
The Company cannot predict what environmental legislation or regulations will be amended or enacted in
the future, how existing or future laws or regulations will be enforced, administered, or interpreted, or the
amount of future expenditures that may be required to comply with these environmental laws or regulations
or to respond to environmental claims. The introduction or inconsistent application of, or changes in, laws
and regulations applicable to the Companys business could have a material adverse effect on its business,
financial condition and results of operations.
There can be no assurance that current or future environmental laws and regulations applicable to the
Company will not increase the costs of conducting its business above currently projected levels or require
future capital expenditures. In addition, if a violation of any environmental law or regulation occurs or if
environmental hazards on land where the Companys projects are located cause damage or injury to buyers
or any third party, the Company may be required to pay a fine, to incur costs in order to cure the violation
and to compensate its buyers and any affected third parties.
Any political instability in the Philippines and the countries where the Company operates may
adversely affect the business operations, plans, and prospects of the Company.
The Philippines has from time to time experienced political, social, and military instability. In the past
decade, there has been political instability in the Philippines, including alleged extrajudicial killings, alleged
electoral fraud, impeachment proceedings against two (2) former presidents and the chief justice of the
Supreme Court of the Philippines, and public and military protests arising from alleged misconduct by
65
previous administrations. In addition, a number of current and past officials of the Philippine government
are currently under investigation on corruption charges stemming from allegations of misuse of public funds,
extortion, and bribery. An unstable political environment may also arise from the imposition of emergency
executive rule, martial law or widespread popular demonstrations or rioting.
There can be no assurance that acts of political violence will not occur in the future and any such events
could negatively impact the Philippine economy. Likewise, no assurance can be given that the future
political or social environment in the Philippines will be stable or that current and future governments will
adopt economic policies conducive for sustaining economic growth.
Further, in May 2016, the Philippines elected Rodrigo M. Duterte as its new president, winning 38.5% of
the votes cast. The 2016 elections had a record voter turnout of 81%, the highest in the countrys three
automated elections. The Duterte administration has unveiled a 10 point plan which has committed,
among others, to continue and maintain current macroeconomic policies, including fiscal, monetary, and
trade policies. As of the last quarter of 2016, President Dutertes approval and trust ratings remained high.
The new leadership is currently focused on executing its reform agenda. There is no assurance that current
or future Government administrations will adopt economic policies conducive to sustaining economic
growth.
In general, political or social instability in the Philippines could negatively affect the general economic
conditions and business environment in the Philippines, which could have a material adverse effect on the
business, operations, and financial position of the Company.
Territorial disputes involving the Philippines and its neighboring countries may adversely affect its
economy and business environment
Competing and overlapping territorial claims by the Philippines, China and several Southeast Asian nations
(such as Vietnam, Brunei, Malaysia) over certain islands and features in the West Philippine Sea (South
China Sea) have for decades been a source of tension and conflicts. The South China Sea covers more
than three million square kilometers in terms of area and is home to some of the biggest coral reefs of the
world. It is also believed that under the seabed lies vast unexploited oil and natural gas deposits. China
claims historic rights to nearly all of the West Philippine Sea based on its so-called nine-dash line and in
recent years dramatically expanded its military presence in the sea which has raised tensions in the region
among the claimant countries. In 2013, the Philippines became the first claimant country to file a case
before the Permanent Court of Arbitration, the international arbitration tribunal based at the Hague,
Netherlands to legally challenge claims of China in the West Philippine Sea and to resolve the dispute
under the principles of international law as provided for under the United Nations Convention on the Law
of the Sea (UNCLOS). In July 2016, the tribunal rendered a decision stating that the Philippines has
exclusive sovereign rights over the West Philippine Sea (in the South China Sea) and that the nine-dash
line claim of China is invalid. The Philippine government, under the Duterte administration, and China have
taken meaningful action to de-escalate tensions concerning their territorial disputes.
There is no guarantee that the territorial dispute between the Philippines and other countries, including
China, would end or that any existing tension will not escalate further, as China has repeatedly announced
that it will not honor said ruling. In such event, the Philippine economy may be disrupted and its business
and financial standing may be adversely affected.
Macro-economic conditions of different countries where the company operates may adversely
affect the Companys business and prospects.
66
Historically, the Philippines sovereign debt has been rated relatively low by international credit rating
agencies. Although the Philippines long-term foreign currency-denominated debt was recently upgraded
by each of Standard & Poors, Fitch Ratings and Moodys to investment-grade, no assurance can be given
that such international credit rating agencies will not subsequently downgrade the credit ratings of the
Government in the future and, therefore, Philippine companies. Any such downgrade could have an
adverse impact on the liquidity in the Philippine financial markets, the ability of the Government and
Philippine companies, including the Parent Company, to raise additional financing and the interest rates
and other commercial terms at which such additional financing is available.
On an as-need basis, the Company seeks the help of consultants and subject matter experts for changes
in laws and regulations that may have a significant impact on the Companys business operations. It also
maintains good relationship with local government, customs, and tax authorities through business
transparency and compliance and/or payment of all government-related assessments in a timely manner.
The Company has been able to overcome major crises brought about by economic and political factors
affecting the countries where it operates. The strong corporate governance structure of the Company and
its prudent management team are the foundations for its continued success. The Company also constantly
monitors its macroeconomic risk exposure, identifies unwanted risk concentration, and modifies its business
policies and activities to navigate such risks. Severe macroeconomic contractions may conceivably lead
the Company to tweak or modify its investment decisions to meet the downturn. As a holding company, the
Company affirms the principles of fiscal prudence and efficiency in the operations to its subsidiaries
operating in various countries.
The Company faces risks of international expansion and operation in multiple jurisdictions
The Company has an international customer base which requires worldwide service and support. The
Company may expand its operations internationally and enter additional markets, which will require
significant management attention. Any such expansion may cause a strain in existing management
resources.
The distances between the Company, the customers, and the suppliers globally, create a number of
logistical and communications challenges, including managing operations across multiple time zones,
directing the manufacture and delivery of products across significant distances, coordinating the
procurement of raw materials and their delivery to multiple locations, and coordinating the activities and
decisions of the Companys management team, the members of which are spread out internationally.
The Company aggressively pursues hiring of experienced international managers and staff globally. This
enables the Company to ensure that it has sufficient manpower complement possessed with the required
skills and experience to work with customers, vendors, and other partners in and out of the relevant country
where it operates.
Natural or other catastrophes, including severe weather conditions and epidemics, that may
materially disrupt the Companys operations, affect its ability to complete projects and result in
losses not covered by its insurance.
The Philippines has experienced a number of major natural catastrophes over the years, including
typhoons, droughts, volcanic eruptions and earthquakes. In October 2013, a 7.2 magnitude earthquake
affected Cebu and the island of Bohol, and in November 2013, Super Typhoon Haiyan (called Yolanda in
the Philippines) caused destruction, devastation, and casualties of unprecedented levels in Tacloban,
certain parts of Samar, and certain parts of Cebu, all of which are located in the Visayas, the southern part
of the Philippines.
67
Similarly, the United States of America, where Quintels head office is located, has also experienced a
number of major natural catastrophes including hurricanes, floods, earthquakes and droughts. In August
2005, Hurricane Katrina made landfall in New Orleans Louisana killing more than a thousand people and
destroying more than 800,000 housing units. The estimated cost of the damages caused by Hurricane
Katrina was estimated over US$81 billion.
There can be no assurance that the occurrence of such natural catastrophes will not materially disrupt the
Companys operations. These factors, which are not within the Companys control, could potentially have
significant effects on the Companys manufacturing facilities. As a result, the occurrence of natural or other
catastrophes or severe weather conditions may adversely affect the Companys business, financial
condition and results of operations.
Any escalation in these events or similar future events may disrupt the Companys operations and the
operations of the Companys customers and suppliers, and may affect the availability of materials needed
for the Companys manufacturing services. Such events may also disrupt the transportation of materials to
the Companys manufacturing facilities and finished products to the Companys customers.
There can be no assurance that the Company is fully capable to deal with these situations and that the
insurance coverage it maintains will fully compensate it for all the damages and economic losses resulting
from these catastrophes.
RISKS RELATING TO THE OFFER AND THE OFFER SHARES
There can be no guarantee that the Offer Shares will be registered with the SEC and listed on the
PSE, or that there will be no other regulatory action that could delay or affect the Offer.
Purchasers of Offer Shares will be required to pay for such Offer Shares on the Settlement Date, which is
expected to be on []. Although the PSE has approved the Companys application to list the Offer Shares,
there can be no guarantee that listing will occur on the anticipated Listing Date or at all because the Listing
Date is scheduled to occur after the Settlement Date. Furthermore, there is a risk that there may be other
regulatory action that may be taken to delay or affect the Offer. Delays in the listing of the Offer Shares for
any reason, or any action on the part of the BIR as aforesaid, may adversely affect the market for the Offer
Shares. Delays in the commencement of trading in shares on the PSE have occurred in the past. If the
SEC does not maintain the registration of the Offer Shares and the PSE does not admit the Offer Shares
onto the PSE, the market for the Offer Shares would be illiquid and shareholders may not be able to trade
the Offer Shares. This may materially and adversely affect the value of the Offer Shares.
There may be a limited market for the Preferred Shares, so there may be no liquidity in the market
for the Offer Shares and the price of the Offer Shares may fall.
The Preferred B-2 Shares will be listed on the PSE. Trading volumes on the PSE have historically been
significantly smaller than on major securities markets in more developed countries and have also been
highly volatile. As there may be limited liquidity in the Preferred B-2 Shares, there can be no assurance that
an active market for the Offer Shares will develop following the Offer or, if developed, that such market will
be sustained. Consequently, an investor may be required to hold his Preferred B-2 Shares for an indefinite
period of time or sell them for an amount less than the Offer Price.
The Offer Shares may not be a suitable investment for all investors
68
Each prospective investor in the Offer Shares must determine the suitability of that investment in light of its
own circumstances. In particular, each prospective investor should:
have sufficient knowledge and experience to make a meaningful evaluation of the Company
and its businesses, the merits and risks of investing in the Offer Shares and the information
contained in this Preliminary Prospectus,
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Offer Shares and the impact the Offer Shares
will have on its overall investment portfolio,
have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Offer Shares, including where the currency for purchasing and receiving dividends on the Offer
Shares is different from the potential investors currency,
understand and be familiar with the behavior of any relevant financial markets, and
be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for
economic, interest rate, and other factors that may affect its investment and its ability to bear
the applicable risks.
The market price of the Preferred B-2 Shares may be volatile, which could cause the value of investors
investments in the Company to decline
The market price of securities can and does fluctuate, and it is impossible to predict whether the price of
the Preferred B-2 Shares will rise or fall or even lose all of its value. The market price of Preferred B-2
Shares could be affected by several factors, including:
general market, political, and economic conditions,

changes in earnings estimates and recommendations by financial analysts,
changes in market valuations of listed shares in general and other retail shares in particular,
the market value of the assets of the Company,
changes to Government policy, legislation, or regulations, and general operational and
business risks.
In addition, many of the risks described elsewhere in this Preliminary Prospectus could materially and
adversely affect the market price of the Preferred B-2 Shares.
In part as a result of the global economic downturn, the global equity markets have experienced price and
volume volatility that has affected the share prices of many companies. Share prices for many companies
have experienced wide fluctuations that have often been unrelated to the operating performance of those
companies. Fluctuations such as these may adversely affect the market price of the Preferred B-2 Shares.
Future sales of Preferred B-2 Shares in the public market could adversely affect the prevailing market price
of the Preferred B-2 Shares and shareholders may experience dilution in their holdings
In order to finance the expansion of the Companys business and operations, the Board may consider other
funding options available to the Company at that time, which may include the sale of additional Preferred
B from the treasury or the issuance of new Preferred B-2 Shares. If additional funds are raised through the
sale or issuance of new equity or equity-linked securities by the Company other than on a pro rata basis to
existing shareholders, the percentage ownership of the shareholders may be reduced, shareholders may
experience subsequent dilution and/or such securities may have rights, preferences, and privileges senior
to those of the Offer Shares. Further, the market price of the Preferred B-2 Shares could decline as a result
of future sales of substantial amounts of Preferred B-2 Shares in the public market or the issuance of new
69
Preferred B-2 Shares, or the perception that such sales, transfers, or issuances may occur. This could also
materially and adversely affect the prevailing market price of the Preferred B-2 Shares or the Companys
ability to raise capital in the future at a time and at a price it deems appropriate.
Shareholders may be subject to limitations on minority shareholders rights.
The obligation under Philippine law of majority shareholders and directors with respect to minority
shareholders may be more limited than those in certain other countries such as the United States or United
Kingdom. Consequently, minority shareholders may not be able to protect their interests under current
Philippine law to the same extent as in certain other countries. There can be no assurance that legal rights
or remedies of minority shareholders will be the same, or as extensive, as those available in other
jurisdictions or sufficient to protect the interests of minority shareholders.
The Philippine Corporation Code, however, provides for certain protective rights to minority shareholders
by requiring a vote by the shareholders representing at least two-thirds of the Companys outstanding
capital stock for certain corporate acts.
The Company may be unable to pay dividends on the Preferred B-2 Shares
Dividends declared by the Company on its shares of stock are payable in cash or in additional shares of
stock. On 28 April 2011, the Companys Board approved an annual dividend payment ratio of approximately
30% of its consolidated net income from the preceding fiscal year, subject to the requirements of the
applicable laws and regulations and the absence of circumstances which may restrict the payment of
dividends. The payment of dividends in the future will depend upon the Companys: 1) future results of
operations and general financial condition; (2) capital requirements; (3) its ability to receive dividends and
other distributions and payments from its Subsidiaries; (4) foreign exchange rates; (5) legal, regulatory, and
contractual restrictions; (6) loan obligations and loan covenants, including loan obligations and loan
covenants of its Subsidiaries; (7) and other factors plans of the Company. Largely, the payout of dividends
is hinged on the profitability of the Company. As such, in cases of low profitability, the Company may be
unable to pay dividends to shareholders for a particular time period, which would result in dividend
payments accumulating and carrying over to the next scheduled payout date, leading to more pressure on
the Company to handle future debt obligations.
Declaration of cash dividends by the Company requires the approval of the Board, while the declaration of
stock dividends by the Company requires the approval of its Board and the approval of stockholders
representing at least 2/3 of the outstanding capital stock. There must be unrestricted retained earnings to
support any dividend declaration.
Redemption at the option of the Company
The Preferred B-2 Shares have no fixed final maturity date. Investors have no right to require the Company
to redeem the Preferred B-2 Shares at any time and they can only be disposed of by sale in the secondary
market. Holders who wish to sell their Preferred B-2 Shares may be unable to do so at a price at or above
the amount they have paid for them, or at all, if insufficient liquidity exists in the market for the Preferred B-
2 Shares. Therefore, investors should be aware that they may be required to bear the financial risks of an
investment in the Preferred B-2 Shares for an indefinite period of time.
70
Since the Redemption Price is equal to the relevant Offer Price of the Preferred B-2 Shares plus any
accrued and unpaid cash dividends due them on such Dividend Payment Date as well as all arrears of
dividends outstanding, there is a risk that holders of the Preferred B-2 Shares who may have purchased
the same at price a higher than the Redemption Price would recognize a loss. BIR Revenue Regulation
No. 6-2008 discusses treatment of capital gain or loss treatment applied to the redemption of shares. Under
said regulation, the tax consequences of the redemption will depend on the purpose of the issuer, to wit:
(a) If the redemption of shares is for cancellation or retirement, the difference between the redemption price
and the original cost of the preferred shares shall be treated as capital gain or capital loss, and shall be
subject to the regular income tax rates imposed under the Tax Code or (b) If the redemption of shares is to
be held in treasury, the stock transaction tax shall apply (if the shares are listed and transferred through the
trading system and/or facilities of the PSE; otherwise, the transaction shall be subject to the 5% and 10%
net capital gains tax). Redemption will be coursed through the facilities of the PSE, if, for any reason, the
redemption is not done through the PSE, then the holder of the Preferred B-2 Shares will, in addition to the
exposure to capital gains tax, be exposed to documentary stamp tax like any sale of shares done outside
the PSE. Redemption of the preferred shares, if below listed price, may expose the holders of the Preferred
Shares to the donor's tax. See Philippine Taxation on page 156.
Subordination to other indebtedness
The obligations of the Company under the Preferred B-2 Shares are unsecured and are subordinated
obligations to all of the indebtedness of the Company. The rights and claims of holders of the Preferred B-
2 Shares will (subject to the extent permitted by law) rank senior to the holders of the Common Shares of
the Company. In the event of the winding-up of the Company, the Preferred B-2 Shares rank junior in right
of payment to all indebtedness of the Company and junior in right of payment to securities of, or claims
against, the Company which rank or are expressed to rank senior to the Preferred B-2 Shares. There is a
substantial risk that an investor in the Preferred B-2 Shares will not receive any return of the principal
amount or any unpaid amounts due under the terms of the Offer unless the Company can satisfy in full all
of its other obligations ranking senior to the Preferred B-2 Shares. There are no terms in the Preferred B-2
Shares that limit the ability of the Company to incur additional indebtedness, including indebtedness that
ranks senior to or paripassu with the Preferred B-2 Shares.
Limited voting rights
Holders of Preferred B-2 Shares will not be entitled to elect the Board of Directors of the Company. Except
as specifically set forth in the Amended Articles of Incorporation and as provided by Philippine law, holders
of Preferred B-2 Shares will have no voting rights (see Description of the Preferred Shares).
Contractual limitations of the Company
The Company has and will continue to have a certain amount of outstanding indebtedness. The current
terms of the financing agreements of entities in the Cirtek Group contain provisions that could limit the
ability of the Company to make payments on the Preferred B-2 Shares. Also, the Company may in the
future, directly or indirectly through its subsidiaries, enter in to other financing agreements which may
restrict or prohibit the ability of the Company to make payments on the Preferred B-2 Shares. There can be
no assurance that existing or future financing arrangements will not adversely affect the ability of the
Company to make payments on the Preferred B-2 Shares.
71
Exchange rate risks
The Company will pay amounts in respect of the Preferred B-2 Shares in U.S. dollars. This presents certain
risks relating to currency conversions if an investor's financial activities are denominated principally in a
currency other than U.S. dollars, such as for instance, Philippine Peso. These include the risk that exchange
rates may significantly change (including changes due to appreciation of the Philippine Peso relative to the
U.S. dollars or appreciation of U.S. dollars relative to Philippine Peso). An appreciation in the value of the
Philippine Peso relative to U.S. dollars would decrease (i) the Philippine Peso equivalent yield on the
Preferred B-2 Shares, (ii) the Philippine Peso equivalent value of the amount payable, including any
redemption price payment, in respect of the Preferred B-2 Shares, and (iii) the Philippine Peso equivalent
market value of the Preferred B-2 Shares.
Reinvestment risk
On the Optional Redemption Date or at any time redemption occurs, the Company may redeem the
Preferred B-2 Shares at the Redemption Price, as described in Description of the Preferred Shares of this
Preliminary Prospectus. At the time of redemption, interest rates may be lower than at the time of the
issuance of the Preferred B-2 Shares and, consequently, the holders of the Preferred B-2 Shares may not
be able to reinvest the proceeds at a comparable interest rate or purchase securities otherwise comparable
to the Preferred B-2 Shares.
Since the Preferred-B2 Shares will only be the second U.S. dollar-denominated equity securities to
be listed on the PSE, the procedure for trading and settlement is new and may be susceptible to
possible disruptions.
The Preferred-B2 Shares will be the second U.S. dollar-denominated equity securities to be listed and
traded on the PSE. On 10 November 2016, the SEC approved the PSE DDS Rules. The PSE officially
released the final PSE DDS Rules on 2 December 2016. The PSE DDS Rules shall govern the listing,
trading and settlement of the DDS. The Preferred-B2 Shares will be the second equity securities to be
traded on the PSE pursuant to the said new rules.
While the trading will be executed through the PSETrade XTS system of the PSE which is also used for
peso trades and the clearing and settlement process will be done through the Securities Clearing
Corporation of the Philippines (SCCP), there is no guarantee that the trading, clearing and settlement
process will run smoothly, at least during the initial period after the offer.
Given that the procedure is relatively new and because there is only one Philippine precedent, it is possible
that events may occur in the trading, clearing and settlement process which may or may not result in delay
or disruption in the delivery of the payments for the trades and/or securities. Although SCCP will act as the
central counterparty of the Eligible Brokers in their trades involving the Preferred-B2 Shares and standard
measures applied in case of failed trades will be adopted, there is no guarantee that such delay or disruption
will not occur. Moreover, as of [07 September 2017], there are only [12] Eligible Brokers accredited by the
PSE to carry out dollar-denominated trades.
There is no certainty that more Eligible Brokers will be accredited in the future. While the intention is to
largely adopt the standard procedure for dividend payment applicable to peso equity securities traded on
the PSE, there are certain unavoidable differences in such standard procedure applicable to peso equity
securities traded on the PSE and the procedure to be adopted for the Preferred B-2 Shares.
72
For instance, while dividends in respect of peso equity securities may be paid out, in respect of certificated
shares, by the Stock Transfer Agent to the shareholder, through the issuance of checks drawn against
banks within Metro Manila and subject to three-day clearing only, the Stock Transfer Agent may have to
cause the issuance of U.S. dollar denominated bank drafts for the amount of dividends, which bank drafts
are subject to a longer clearing period (e.g. 20 days).
All bank charges in relation to the remittance, transfer or turnover of the dividends to the investor shall be
for the account of such investor. By way of illustration, if an investors Foreign Currency Deposit Unit
account is maintained with a bank other than [], then the bank charges that its nominated Trading
Participant will incur arising from the transfer of the dividends from the Trading Participants Foreign
Currency Deposit Unit Account to such investors Foreign Currency Deposit Unit account maintained with
another bank will be for the account of the investor, unless a different arrangement is agreed in writing
between the investor and such Trading Participant. By way of another illustration, if the investor does not
maintain a Foreign Currency Deposit Unit account and the Trading Participant is constrained to arrange for
the issuance of a dollar demand draft in the name of the investor, all bank charges in relation to the issuance
of such draft will be for the account of the investor, unless a different arrangement is agreed in writing
between the investor and such Trading Participant.
RISKS RELATING TO CERTAIN STATISTICAL INFORMATION IN THIS PRELIMINARY PROSPECTUS
Certain information contained herein is derived from unofficial publications
Certain information in this Preliminary Prospectus relating to the Philippines, the industries in which the
Company competes, and the markets in where the Company operates, including statistics relating to market
size, are derived from various Government and private publications. This Preliminary Prospectus also
contains industry information which was prepared from publicly available third-party sources. Industry
publications generally state that the information they contain has been obtained from sources believed to
be reliable but that the accuracy and completeness of that information is not guaranteed. The information
contained in the Industry section may not be consistent with other information. Similarly, industry forecasts
and other market research data, including those contained or extracted herein, have not been
independently verified by the Company, the Joint Lead Underwriters, nor any of their respective affiliates
or advisors, and may not be accurate, complete, up-to-date, or consistent with other information compiled
within or outside the Philippines. Prospective investors are cautioned accordingly.
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USE OF PROCEEDS
The Company intends to use the proceeds it receives from this Offer to pay for (1) financial obligations, (2)
fund strategic acquisitions, (3) working capital requirements, (4) capital expenditures, and (5) research and
development.
Based on the Offer Price of US$1.00 per Offer Share, the total proceeds from this Offer, the estimated total
expenses and the estimated net proceeds from this Offer will be:
Firm Offer only Firm Offer + OS
PHP USD PHP USD

Gross Proceeds
6,103,200,000 120,000,000 10,172,000,000 200,000,000
Estimated Offer Expenses

Underwriting and other professional fees 38,630,323 759,602 60,503,871 1,189,710
Taxes to be paid by the Company 600,000 11,798 1,000,000 19,663
SEC Registration, filling, and research fees 2,111,562 41,520 3,138,853 61,720
PSE Registration and Listing Fees
6,158,720 121,101 10,227,200 201,101
Others[1] 600,000 11,798 600,000 11,798
Total Est. Fees & Expenses 48,100,604 945,820 75,469,924 1,483,993

Estimated Net Proceeds
6,055,099,396 119,054,180 10,096,530,076 198,516,007
Notes:
(1) Others include expenses for printing of the Prospectus, roadshows and miscellaneous expenses
(2) Assumed FX rate is 1 USD = 50.86 PHP as of September 22, 2017
The Net Proceeds from the sale of the Firm Offer are intended to be used as follows:
Estimated
Timing of
Use of Proceeds Estimated Amount in PHP Estimated Amount in USD Percentage Disbursement
Payment of Financial Obligations 2,018,366,465 39,684,727 33% 2017-2018
Fund Strategic Acquisition 2,018,366,465 39,684,727 33% 2017-2018
Working Capital Requirements 787,162,921 15,477,043 13% 2017-2018
Capital Expenditures 787,162,921 15,477,043 13% 2018
Research & Development 444,040,622 8,730,640 7% 2017
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Total 6,055,099,396 119,054,180 100%
Assuming full exercise of the Oversubscription Option in the amount of US$80.0 million, the proposed use
of proceeds will be as follows:
Estimated
Timing of
Disbursement
Use of Proceeds Estimated Amount in PHP Estimated Amount in USD Percentage
Payment of Financial Obligations
3,365,510,025 66,172,002 33% 2017-2018
Fund Strategic Acquisition
3,365,510,025 66,172,002 33% 2017-2018
Working Capital Requirements
1,312,548,910 25,807,081 13% 2017-2018
Capital Expenditures
1,312,548,910 25,807,081 13% 2018
Research & Development
740,412,206 14,557,841 7% 2017
Total
10,096,530,076 198,516,007 100%
Payment of Financial Obligations
The Company intends to use a portion of the net proceeds up to US$66 million as partial payment of
outstanding short- and long-term financial obligations to various banks. The reduction in debt will improve
the Company's capital structure and will give the Company better financial flexibility in its capital
deployment.
Research and Development
The Company plans to build on its legacy of innovation and on its worldwide portfolio of patents and patent
applications by continuing to invest in research and development. Technology innovation such as the
Company's multi-band, multi-frequency base station antenna technology, new generation antennas for 5G,
RF radios and access points allow the Company to maintain its competitive advantage by providing
innovative, high-performance wireless infrastructure.
Capital Expenditures
The Company will use a portion of the net proceeds to fund the expansion of its fourth manufacturing plant
in Laguna Technopark. Approximately US$10 million is going to be allocated for the construction of a three-
storey building with a total floor area of about 8,175 square meters, which will be used for CEC and CATSI.
Another US$10 million of the net proceeds shall be allocated for the purchase of manufacturing equipment
for CEC and CATSI. The equipment that will be purchased for CEC include backgrinders, wafer saw
machines, die attach machines, wire bond machines, molding systems, DTFS systems, water jet deflash
machines, electroplating machines, and test handlers. For CATSI, equipment to be purchased shall include
pick & place, screen printers, reflow ovens, feeders and inline inspection systems for additional SMT lines,
auto bonders, millimeter wave and microwave test stations, among others.
75
Working Capital Requirements
The Company anticipates a need for additional working capital to fund its receivables and inventory
requirements as a result of the expected increase in revenues to be generated from new and existing
customers. Up to US$25 million will be allocated to fund this.
To the extent that the net proceeds from the Offer are not immediately applied to the above purposes, the
Company will invest the net proceeds in short-term demand deposits and/or money market placements.
Fund Strategic Acquisitions
The Companys acquisition strategy is to focus on leading technologies, which would generate higher
margins and help accelerate the Companys growth. The Companys target acquisitions must have a
strategic fit with its current operations and opportunities for the Company to explore other business
segments and add value to the new businesses using its existing competitive strengths. Some of these
target acquisitions may include, but are not limited to companies that develop and sell wireless mobility
products and solutions.
No amount of the proceeds will be used to reimburse any officer, director, employee or shareholder for
services rendered, assets previously transferred, money loaned or advanced, or otherwise.
Adjustments in the Use of Proceeds
In the event that the actual expenses are more than the estimates, or the actual net proceeds are less than
the projected net proceeds, the Company will utilize said net proceeds as set out in this Preliminary
Prospectus and will use internally generated funds and/or bank loans to finance the shortfall, or delay or
abandon one or more of the components of its plans. It is possible that a shortfall will occur if, due to market
conditions or other factors, any of the Preferred B-2 Shares are not sold during the OfferPeriod.
In the event of any material deviation or adjustment in the planned use of proceeds, the Company shall
inform its shareholders, the SEC and the PSE in writing at least 30 days before such deviation or adjustment
is implemented. Any material or substantial adjustments to the use of proceeds, as indicated above, will be
approved by the Companys Board of Directors and disclosed to the SEC and the PSE. In addition, the
Company shall submit via the PSE EDGE the following disclosures to ensure transparency in the use of
proceeds:
(i) any disbursements made in connection with the planned use of proceeds from this Offer;
(ii) Quarterly Progress Report on the application of the proceeds from this Offer on or before the
first 15 days of the following quarter; the Quarterly Progress Report should be certified by the
Companys Chief Financial Officer or Treasurer and external auditor;
(iii) annual summary of the application of the proceeds on or before January 31 of the following
year; the annual summary report should be certified by the Companys Chief Financial Officer
or Treasurer and external auditor;
(iv) approval by the Companys Board of Directors of any reallocation on the planned use of
proceeds, or of any change in the work program; the disbursement or implementation of such
reallocation must be disclosed by the Company at least 30 days prior to the actual
disbursement or implementation; and
(v) a comprehensive report on the progress of its business plans on or before the first 15 days of
the following quarter.
76
The quarterly and annual reports required in items (ii) and (iii) above must include a detailed explanation of
any material variances between the actual disbursements and the planned use of proceeds in the work
program or the Prospectus, if any. The detailed explanation must also state that the Companys Board of
Directors has given its approval as required in item (iv) above.
The Company shall submit an external auditors certification on the accuracy of the information reported by
the Company to the PSE in the Companys quarterly and annual reports as required in items (ii) and (iii)
above.
77
PLAN OF DISTRIBUTION
The Company plans to issue the Offer Shares to institutional and retail investors through a public offering
to be conducted through the Joint Lead Underwriters.
THE UNDERWRITERS
BPI Capital and RCBC Capital have agreed to distribute and sell the Offer Shares at the Offer Price,
pursuant to an Underwriting Agreement dated [] 2017 by and among the Company and the Joint Lead
Underwriters (the Underwriting Agreement). Subject to the fulfillment of the conditions provided in the
Underwriting Agreement, the Joint Lead Underwriters have committed to underwrite the following amounts
on a firm basis, subject to agreement on any clawback, clawforward or other such mechanism:
Joint Lead Underwriters Underwriting Commitment

BPI Capital Corporation []
RCBC Capital Corporation []
[] []
TOTAL 120,000,000
The Underwriting Agreement may be terminated in certain circumstances prior to payment being made to
the Company of the net proceeds of the Offer Shares.
The underwriting and selling fees to be paid by the Company in relation to this Offer shall be equivalent to
[0.50]% of the gross proceeds of this Offer. This shall be inclusive of fees to be paid to the Joint Lead
Underwriters and inclusive of commissions to be paid to the Trading Participants of the PSE (i.e., the Selling
Agents). The commission payable to a Selling Agent shall be equivalent to []% of the total proceeds of the
sale of Offer Shares by such Trading Participant.
The Joint Lead Underwriters are duly licensed by the SEC to engage in the underwriting or distribution of
the Offer Shares. The Joint Lead Underwriters may, from time to time, engage in transactions with and
perform services in the ordinary course of their respective business for the Company or any of the
Companys subsidiaries.
The Joint Lead Underwriters have no direct relations with the Company in terms of ownership by either of
their respective major stockholder/s, and have no right to designate or nominate any member of the Board
of Directors of the Company.
The Joint Lead Underwriters have no contract or other arrangement with the Company by which they may
return to the Issuer any unsold Offer Shares.
BPI Capital Corporation (BPI Capital) offers investment banking services in the areas of financial advisory,
mergers and acquisitions, debt and equity underwriting, private placements, project finance and loan
syndication. Founded in December of 1994, BPI Capital Corporation is duly licensed by the SEC to engage
in the underwriting and distribution of securities. As of March 31, 2017, BPI Capital had total assets of
P6.238 billion and total capital funds of P5.463 billion. The firm operates as a wholly-owned subsidiary of
the Bank of the Philippine Islands.
RCBC Capital is a licensed investment house providing a complete range of capital-raising and financial
advisory services. Established in 1974, RCBC Capital has over 40 years of experience in the underwriting
78
of equity, quasi-equity and debt securities, as well as in managing and arranging the syndication of loans,
and in financial advisory. RCBC Capital is a wholly-owned subsidiary of the Rizal Commercial Banking
Corporation and a part of the Yuchengco Group of Companies, one of the countrys largest fully integrated
financial services conglomerates.
SALE AND DISTRIBUTION
The distribution and sale of the Offer Shares shall be undertaken by the Joint Lead Underwriters who shall
sell and distribute the Offer Shares to third party buyers/investors. The Joint Lead Underwriters are
authorized to organize a syndicate of sub-underwriters, soliciting dealers and/or selling agents for the
purpose of this Offer.
Of the 120,000,000 Offer Shares to be offered, 80% or 96,000,000 Offer Shares are being offered through
the Joint Lead Underwriters for subscription and sale to institutional buyers and the general public. The
Company plans to make available 20% or 24,000,000 Offer Shares for distribution to the respective clients
of the Eligible Brokers, acting as Selling Agents, subject to reallocation as may be determined by the Joint
Lead Underwriters. The Company has identified for purposes of this Offer and as of [], 2017, the following
Trading Participants as the Eligible Brokers: (1) [] and (2) [].
However, any Trading Participant that becomes an Eligible Broker anytime within the Offer Period as may
be announced by the PSE shall be entitled to an allocation of the Offer Shares.
Eligible Brokers may undertake to purchase more than their allocation. Any requests for shares in excess
of their allocation may be satisfied via the reallocation of any Offer Shares not taken up by other Eligible
Brokers. The Implementing Guidelines for the Reservation and Allocation of Cirtek Holdings Philippines
Corporations U.S. Dollar-Denominated Preferred B-2 Shares through the Joint Lead Underwriters will be
circulated among the Trading Participants, and Trading Participants are enjoined to carefully consider and
review the procedure set out in such guidelines.
The Company and the Joint Lead Underwriters will not allocate any Offer Shares for Local Small Investors
as such is only applicable to initial public offerings.
Any Offer Shares (excluding the Oversubscription Option Shares) not taken up by the Eligible Brokers shall
be distributed by the Joint Lead Underwriters directly to their respective clients and the general public. All
Offer Shares (excluding the Oversubscription Option Shares) not taken up by the Eligible Brokers, general
public and the Joint Lead Underwriters clients shall be purchased by the Joint Lead Underwriters pursuant
to the terms and conditions of the Underwriting Agreement.
TERM OF APPOINTMENT
The engagement of the Joint Lead Underwriters shall subsist so long as the SEC Permit to Sell remains
valid, unless otherwise terminated pursuant to the Underwriting Agreement.
MANNER OF DISTRIBUTION
The Joint Lead Underwriters shall, at their discretion, determine the manner by which proposals for
subscriptions to, and issuances of, the Offer Shares shall be solicited, with the primary sale of the Offer
Shares to be effected only through the Joint Lead Underwriters. The Joint Lead Underwriters may appoint
other entities, including other underwriters or Trading Participants, to sell on their behalf. No shares are
designated to be sold to specific persons.
79
EXPENSES
All out-of-pocket expenses, including, but not limited to, registration with the SEC, printing, publication,
communication and signing expenses incurred by the Sole Issue Manager and the Joint Lead Underwriters
in the negotiation, and execution of the transaction will be for the Companys account, irrespective of
whether this Offer is completed. Such expenses are to be reimbursed upon presentation of a composite
statement of account. See Use of Proceeds on page 74 of this Preliminary Prospectus for details of
expenses.
80
DETERMINATION OF OFFER PRICE
The Offer Price was arrived at by dividing the desired gross proceeds of US$200 million by the amount of
Preferred B-2 Shares allocated for this offering.
81
DIVIDENDS AND DIVIDEND POLICY
Limitations and Requirements
Under Philippine law, dividends may be declared out of a corporations Unrestricted Retained Earnings
which shall be payable in cash, in property, or in stock to all stockholders on the basis of outstanding stock
held by them. The amount of retained earnings available for declaration as dividends may be determined
pursuant to regulations issued by the SEC. The approval of the Board of Directors is generally sufficient to
approve the distribution of dividends, except in the case of stock dividends which requires the approval of
stockholders representing not less than two-thirds of the outstanding capital stock at a regular or special
meeting duly called for the purpose. From time to time, the Company may reallocate capital among its
Subsidiaries depending on its business requirements.
The Philippine Corporation Code generally requires a Philippine corporation with retained earnings in
excess of 100% of its paid-in capital to declare and distribute as dividends the amount of such surplus.
Notwithstanding this general requirement, a Philippine corporation may retain all or any portion of such
surplus in the following cases: (1) when justified by definite expansion plans approved by the board of
directors of the corporation; (2) when the required consent of any financing institution or creditor to such
distribution has not been secured; (3) when retention is necessary under special circumstances, such as
when there is a need for special reserves for probable contingencies; or (4) when the non-distribution of
dividends is consistent with the policy or requirement of a government office.
Record Date
Pursuant to existing SEC rules, cash dividends declared by the Company must have a record date not less
than 10 nor more than 30 days from the date of declaration. In case no record date is specified, the same
is deemed to be fixed at 15 days from such declaration. However, companies that are obliged to pay
dividends may have a single declaration for several cash dividends within a year, subject to the condition
that their record and payment dates are also explicitly provided.
For stock dividends, the record date should not be less than 10 nor more than 30 days from the date of the
shareholders approval, provided however, that the set record date is not less than 10 trading days from
receipt by the PSE of the notice of declaration of stock dividend. In the event that a stock dividend is
declared in connection with an increase in authorized capital stock, the corresponding record date is to be
fixed by the SEC.
Dividend Policy
On 28 April 2011, the Companys Board approved an annual dividend payment ratio of approximately 30%
of its consolidated net income from the preceding fiscal year, subject to the requirements of the applicable
laws and regulations and the absence of circumstances which may restrict the payment of dividends
including, but not limited to, when the Company undertakes major projects and developments requiring
substantial cash expenditures or when it is restricted from paying cash dividends by its loan covenants. The
Companys Board may, at any time, modify such dividend payout ratio depending upon the results of
operations and future projects and plans of the Company.
The subsidiaries have no defined dividend policy; nevertheless the subsidiaries, in declaring and paying
dividends, take into consideration the interests of their shareholders as well as their working capital, capital
expenditures and debt servicing requirements, and tax regimes.
82
Dividend History
The dividend history of the Company from 2014 to 2017 is provided below:
Stock Dividends
Class Declaration Date Percent Record Date Payment Date

Common 11-Jul-14 10% 25-Jul-14 20-Aug-14
Common 12-May-15 10% 26-May-15 18-Jun-15
Cash Dividend
Class Declaration Date Rate/Share Record Date Payment Date

Common 29-Jan-14 US$0.00428 13-Feb-14 25-Feb-14
Common 30-May-14 US$0.00214 16-Jun-14 7-Jul-14
Common 23-Feb-15 US$0.003893 10-Mar-15 27-Mar-15
Common 10-Aug-15 US$0.002628 25-Aug-15 28-Aug-15
Preferred 28-Jan-16 US$0.000021 12-Feb-16 29-Feb-16
Common 9-Jun-16 US$0.003620 23-Jun-17 7-Jul-16
Preferred 9-Jun-16 US$0.000001 23-Jun-17 7-Jul-16
Preferred 23-Jan-17 US$0.000021 6-Feb-17 22-Feb-17
Common 15-Sep-17 US$0.004629 29-Sep-17 6-Oct-17
83
CAPITALIZATION AND INDEBTEDNESS
The following table sets out the Companys debt, shareholders equity and capitalization as at 30 June
2017, and as adjusted to reflect (i) any material changes to the Companys capitalization since end of the
reported period and (ii) the sale of the Firm Shares at the Offer Price of US$1.00 per Preferred B-2 Share
(Amounts in US$).
Six Months ended Preferred B-2 Share Six Months ended 30

30 June 2017 Offering June 2017
(Pre-Offer) Adjustments (Post-Offer)
Liabilities
Current Liabilities 47,123,157 47,123,157
Noncurrent Liabilities 36,800,186 36,800,186
Total Liabilities 83,923,343 - 83,923,343

Equity
Capital Stock 9,594,321 9,594,321
Preferred Stock 221,239 120,000,000 120,221,239
Equity Reserve 1,452,863 1,452,863

Retained Earnings 27,877,598 27,877,598
Parent Company shares held by
subsidiary (13,536,517) (13,536,517)
Total Equity 61,546,726 120,000,000 181,546,726
Total Liabilities and Equity 145,470,069 120,000,000 265,470,069
84
DILUTION
The Preferred B-2 Shares will not have any dilutive effect on the rights of the holders of the Common Shares
of the Company as the Preferred B-2 Shares are non-voting, nonconvertible, and non-participating except
with regard to the acts, which require the approval of shareholders, including the Preferred B-2 Shares,
representing at least two-thirds of the issued and outstanding capital stock of the Company in a meeting
duly convened for the purpose, as follows:
(a) Amendment of the articles of incorporation (including any increase or decrease in capital
stock)
(b) Adoption and amendment of by-laws;
(c) Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of
the corporate property;
(d) Incurring, creating or increasing bonded indebtedness;
(e) Increase or decrease of capital stock;
(f) Merger or consolidation of the Company with another corporation or other corporations;
(g) Investment of corporate funds in another corporation or business in accordance with this
Code; and
(h) Dissolution of the corporation.
85
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This section should be read in conjunction with the Companys consolidated financial statements and
related notes. See the cautionary statement regarding forward-looking statements on page 11 of this
Preliminary Prospectus for a description of important factors that could cause actual results to differ from
expected results.
This section also includes discussion of financial ratios. These financial ratios are unaudited and are not
measurements of profitability in accordance with Philippine Financial Reporting Standards (PFRS) and
should not be considered as an alternative to net income or any other measure of performance which are
in accordance with PFRS.
For the six months ended 30 June 2017 compared to the six months ended 30 June 2016
Revenue
The Company recorded consolidated revenues of US$42.2 million in the six months ended June 30, 2017,
and increase of 30% from US$32.5 million for the same period in 2016. The increase was mainly accounted
for by the growth of the Companys Antenna Systems business which grew 2.8 times from the same period
in 2016. In terms of revenue contribution per major business segment, Cirtek Advanced Technologies and
Solutions, Inc., accounted for 49% of consolidated revenue for the first 6 months of 2017, compared to 37%
for the same period in 2016.
IN US$ 000 For the six months ended June 30

2017 2016 % INC / (DEC)
CEC
Discrete 6,555 6,283 4
Multichip 5,060 4,464 13
IC 3,819 3,970 (4)
QFN 2,661 2,351 13
New Products 2,419 2,754 (12)
Hermetics 992 760 31
CATSI
Cougar 121 179 (32)
Outdoor Unit 1,655 4,301 (62)
Indoor Unit 295 980 (70)
Bridgewave 534 943 (43)
Quintel 17,193 4,570 276
RMS 878 926 (5)
Total 42,182 32,481 30
86
Cost of Sales and Gross Margin
The Companys cost of sales (COS) is composed of raw materials, spare parts, suppliers, direct salaries,
wages and employees benefits, depreciation and amortization, utility expenses directly attributable to
production, freight and duties and changes in finished goods and work in process inventories. The
Companys cost of sales increased by 30% to US$34.3million for the six months ended June 30, 2017 from
US$26.5 million for the same period in 2016. The increase was mainly due to the rise in raw material costs
as a result of higher unit sales, higher salaries and wages, increase in utility costs, increase in depreciation,
and increase in inward freight and duties.
- Raw materials, spare parts, supplies and other inventories increased by 34% to US$24 million
for the six months ended June 30, 2017 from US$17.9 million for the same period in 2016
- Salaries, wages and employees benefits decreased by 25% to US$3.6 million for the six
months ended June 30, 2017, from US$4.7 million for the same period in 2016.
- Utility costs for the six months ended June 30, 2017 increased by 135% to US$4.0 million from
US$1.7 million for the same period in 2016.
- Freight and duties increased by 47% to US$785 thousand for the six months ended June 30,
2017 from US$ 535 thousand for the same period in 2016.
The Companys gross margin was 19% for the six months ended June 30, 2017, one percentage point
higher than the 18% gross margin recorded for the same period in 2016.
Operating Expenses
The Companys operating expenses for the six months ended June 30, 2017 amounted to US$2.2 million,
6% higher compared to the US$2.1 million recorded during the same period in 2016.
Income Before Income Tax
For the six months ended June 30, 2017, the Company recorded a net income before income tax of US$4.6
million, an increase of 25% compared with US$3.6 million recorded for the same period in 2016.
Provision for Income Tax
Provision for income tax for the six months ended June 30, 2017 amounted to US$173 thousand compared
with US$ 125 thousand for the same period in 2016, an increase of 38%.
Net Income
The Companys net income for the six months ended June 30, 2017 amounted to US$4.4million, an
increase of 25% compared with US$3.5 million for the same period in 2016.
As of June 30, 2017 compared to December 31, 2016
Assets
The Companys cash as of June 30, 2017 amounted to US$20.1 million, compared with the US$24.5 as of
December 31, 2016, a decrease of US$4.4 million or 17.9%. The decrease was mainly due to increase in
accounts payable, investments in marketable securities, acquisition of PPE, interest payments, principal
payments of short- and long- term loans, plus proceeds from short-term loan and sale of parent company
shares held by a subsidiary.
87
Trade and other receivables as of June 30, 2017 amounted to US$36.2 million, compared with US$23.2 as
of December 31, 2016, a 56% increase.
Inventory levels as of June 30, 2017 amounted to US$13.7 million, 10% lower compared with US$15.3
million as of December 31, 2016.
Non-current assets, comprised of PPE, Available-for-sale (AFS) financial assets, deferred income taxes
and other noncurrent assets for the six months as of June 30, 2017 amounted to US$43.4 million compared
with US$32.7 as of December 31, 2016, an increase of 33%.
Liabilities
The Companys current liabilities is comprised of trade and other payables, long-term debt current portion,
short-term loan, amounts owed to related parties, and income tax payable. As of June 30, 2017, current
liabilities were at US$47.1 million compared with US$58.5 million as of December 31, 2016, a 19%
decrease. This can be mainly attributed to a decrease in trade and other payables and reduction in short-
term loans.
As of June 30, 2017, the Companys non-current liabilities comprised of long-term debt net of current
portion, deferred income tax liabilities and retirement benefit obligation amounting to US$36.8 million, a 5%
decrease compared to December 31, 2016.
Equity
The Companys shareholders equity as of June 30, 2017 amounted to US$61.5million compared with
US$25.2 million as of December 31, 2016, a 144% increase. The increase in equity was due to the sale of
parent shares held by a subsidiary to certain institutional investors.
Liquidity and Capital Resources
As of June 30, 2017 the Companys principal sources of liquidity were cash from sales of its products, bank
credit facilities, proceeds from its 5-year corporate notes issuance, and proceeds from its follow-on offering.
The Company expects to meet its working capital, capital expenditure and dividend payment and
investment requirements for the next 12 months primarily from the proceeds of the Companys corporate
notes issuance, short-term facilities and cash flows from operations. It may also be from time to time seek
other sources of funding, which may include debt or equity financings, including dollar and peso-
denominated loans from Philippine Banks, depending on its financing needs and market conditions.
For the next 12 months, the Company plans to increase its production further by increasing volume
deliveries to the existing customers, entering into new production agreements, and expanding its customer
base by intensifying its sales and marketing activities.
The following table sets out the Companys cash flows for the six months ended June 30, 2017 and the
same period 2016:
In US$ 000 For the six months ended June 30

2017 (Unaudited) 2016 (Unaudited)
Net cash flows provided by/(used for) operating (9,070) 7,750
activities
Net cash flows used for investing activities (11,792) (2,794)
88
Net cash flows provided by/(used for) financing 16,371 (4,084)
activities
Effect of exchange rate changes on cash and 93 -
cash equivalents
Net increase (decrease) in cash equivalents (4,399) 873
Net Cash Flows from Operating Activities
Net cash flow provided by operating activities was negative US$9.1 million for the six months ended June
30, 2017, compared with US$7.8 million for the same period in 2016.
For the six months ended June 30, 2017, net income before tax was US$4.6million. After adjustments for
depreciation, interest income/-expense, movement in net retirement benefit obligation, and net unrealized
foreign exchange gain, operating income before change in working capital was US$7million. After
adjustments, net cash flows from operating activities was negative US$9.1million. This was mainly due to
increase in receivables and increase in inventories.
Investing Activities
Net cash used in investing activities amounted to negative US$11.7 million for the six months endedJune
30, 2017. Investing activities in 2017 mainly involved investment in marketable securities, acquisition of
PPE, and increase in other non-current assets. For the same period in 2016, major investing activities
involved investment in financial assets at FVPL and acquisition of PPE.
Financing Activities
Net cash inflow from financing activities for the six months ended June 30, 2017 amounted to US$16.4
million. Major financing activities involved payment of cash dividends, payment of short-term and long-term
loans, interest payments, and net movement in amounts owed by and owed to related parties, proceeds
from short-term loan and sales of parent company shares held by subsidiary. For the same period in 2016
net cash outflow from financing activities amounted to US$4.4 million and mainly involved payment of cash
dividends, payment of short-term loans and long term debt, interest payments, net movement in amounts
owed by and owned to related parties, and proceeds from short term loan.
Material Changes to the Companys Unaudited Consolidated Statement of Comprehensive Income

for the six months ended June 30, 2017 compared to the Unaudited Consolidated Statement of
Comprehensive Income for the six months ended June 30, 2016 (increase/decrease of 5% or more)
30% increase in net sales
Sales growth from CATSI and CEC
30% increase in cost of sales
Increase in net sales
243% increase in net financial expenses
Increase in short- and long-term debt
89
26% increase in income before income tax
Increase in net sales and gross profit
38% increase in provision for income tax
Increase in taxable income
25% increase in Net Income After Tax
Higher net sales, gross profit and income before tax
Material Changes to the Companys Unaudited Consolidated Balance Sheet as of June 30, 2017
compared to the Unaudited Consolidated Balance Sheet as of December 31, 2016
(increase/decrease of 5% or more)
17.9% decrease in Cash
Mainly due to increase in accounts receivable and investment in marketable securities
56% increase in Trade and Other Receivables
Timing of collection falls after June 30, 2017
24% decrease in trade and other payables
Payment to suppliers over the past six months
15% decrease in short-term loan
Reduction in short-term liabilities
29% decrease in current portion of long-term debt
Decrease in long-term debt
12% increase in retained earnings
Profit from the six months ended June 30, 2017
144% increase in equity
Sale of parent company shares held by a subsidiary
KEY PERFORMANCE INDICATORS
The Companys top five (5) key performance indicators are listed below:
90
Amounts in thousands US$, 2015 2016 Jan-June 2017
except ratios and where indicated
EBITDA 8,7688 11,862 7,169
EBITDA Margin 15% 16% 17%
Sales Growth 15% 25% 30%
Current Ratio (x) 3.1x 1.5x 2.2x
Earnings per share (US$) 0.013 0.018 0.011
Note: Earnings per Share was calculated using CHPCs average outstanding common shares for the years
2015, 2016 and 2017
EBITDA and EBITDA Margin
EBITDA provides an indication of the rate of earnings growth achieved.
The EBITDA margin shows earnings before interest, tax, depreciation and amortization as a percentage
of revenue. It is a measure of how efficiently revenue is converted into EBITDA.
EBITDA and EBITDA Margin are not measures of performance under PFRS, and investors should not
consider EBITDA and EBITDA Margin in isolation or as alternatives to net income as an indicator of
our Companys operating performance or to cash flow from operating, investing and financing activities
as a measure of liquidity, or any other measure of performance under PFRS. Because these are various
EBITDA and EBITDA Margin calculation methods, the Companys presentation of these measures may
not be comparable to similarly titled measures used by other companies.
The following table sets out the Companys EBITDA after consolidation entries.
For years ended December 31 For six months ended
In US$ 000 2015 2016 2017

Net Income 5,121 7,608 4,415
Add back:
Interest expense/income-net 941 995 1,008
Provision for income tax 516 547 173
Depreciation and amortization 2,190 2,712 1,573
EBITDA 8,768 11,862 7,169
91
The table sets forth a reconciliation of the Companys consolidated EBITDA to consolidated net
income.
For years ended December For six months

31 ended
In US$ 000 2015 2016 2017

EBITDA 8,768 11,862 7,169
Deduct:
Interest expense/income-net (941) (995) (1,008)
Provision for income tax (516) (547) (173)
Depreciation and
amortization (2,190) (2,712) (1,573)
Net Income 5,121 7,608 4,415
Sales growth
Sales growth is a key indicator of the Companys ability to grow the business.
Current ratio
Current Ratio measures a companys short-term liquidity, i.e. its ability to pay its debt that are due within
the next 12 months. It is expressed as the ratio between current assets and current liabilities
Earnings per share
Earnings per share show the Companys attributable profit earned per share. At constant outstanding
number of shares, as the Companys earnings increase, the earnings per share correspondingly
increase.
For the 12 months ended December 31, 2016 compared to the 12 months ended December 31, 2015
Revenue
The Company recorded consolidated revenues of US$74.3 million for the 12 months ended December 31,
2016, an increase of 25% from US$59.5 million for the same period in 2015. The increase was accounted
for by the growth of both the Companys semiconductor and Antenna Systems businesses.
Sales per division
92
IN US$ 000 For the 12 months ended December 31
2016 2015 % Inc / (Dec)
CEC
Discrete 12,486 11,296 11
Multichip 9,681 10,163 (5)
IC 9,818 8,119 21
QFN 4,937 5,143 (4)
New Products 5,273 5,415 (3)
Hermetics 1,488 2,083 (29)
CATSI
Cougar 241 329 (27)
Outdoor Unit 6,488 10,200 (36)
Indoor Unit - 1,691 (100)
Bridgewave 3,024 2,332 30
IRFU 1,372 2,493 (45)
RMS 127 285 (53)
Antenna System 19,387 - -
Total 74,322 59,549 25%
The Companys COS is composed of: raw materials, spare parts, supplies; direct salaries, wages and
employees benefits; depreciation and amortization; utility expenses directly attributable to production,
freight and duties; and changes in finished goods and work in process inventories. The Companys COS
increased by 23% to US$61.6 million in the 12 months ended December 31, 2016 from US$50 million for
the same period in 2015. The increase was mainly due to the rise in raw materials costs as a result of
higher unit sales, higher salaries and wages, depreciation, and increase in inward freight and duties.
- Rent materials, spare parts, supplies and other inventories grew by 38% to US$42.2 million for
the 12 months ended December 31, 2016 from US$30.7 million for the same period in 2015.
- Salaries, wages and employees benefits increased by 28% to US$10.5 million for the 12
months ended December 31, 2016, from US$8.2 million for the same period in 2015.
93
- Utility expenses amounted to US$3.5 million for the 12 months ended December 31, 2016,
from US$3.7 million for the same period in 2015, a decrease of 6%
- Depreciation and amortization increased by 24% to US$2.6 million for the 12 months ended
December 31 2016, from US$2.1 million for the same period in 2015.
- Freight and duties increased by 176% to US$2.5 million for the 12 months ended December
31, 2016 from US$899 thousand for the same period in 2015.
- Change in finished good and work in process inventories for the 12 months ended 2016
amounted to US$57 thousand, compared to US$4.3 million for the same period in 2015, a 99%
decrease.
The Companys gross margin was 17% for the 12 months ended December 31, 2016, seven percentage
point higher than the gross margin recorded for the same period in 2015.
Operating Expenses
The Companys operating expenses for the 12 months ended December 31, 2016 amounted to US$4.4
million, 14% higher compared to the US$3.8 million recorded during the same period in 2015.
For the 12 months ended December 31, 2016, the Company recorded a net income before income tax of
US$8.2 million, anincrease of 45% compared with US$5.6 million recorded for the same period in 2015.
Provision for income tax for the 12 months ended December 31, 2016 amounted to US$547 thousand
compared with US$516 thousand for the same period in 2015, an increase of 6%.
Net Income
The Companys net income for the 12 months ended December 31, 2016 amounted to US$7.6 million, an
increase of 49% compared with US$5.1 million for the same period in 2015
Total Comprehensive Income
The Company's total comprehensive income for the 12 months ended December 31, 2016 amounted to
US$7.1 million, compared to US$5.3 million for the same period in 2015, a 34% increase.
As of December 31, 2016 compared to December 31, 2015
Assets
The Companys cash and cash equivalent as December 31, 2016 amounted to US$24.5 million, compared
with US$29.8 million as of December 31, 2015, a decrease of US$5.3 million or 18%.The decrease was
mainly due to the increase in trade receivables and inventories.
Trade and other receivables as of December 31, 2016 amounted to US$23.2 million, compared with
US$13.7 million as of December 31, 2015, a 69% increase. The increase was mainly due to increase in
sales and longer AR days for certain key customers.
94
Inventory levels as of December 31, 2016 amounted to US$15.3 million, 166% higher compared with
US$5.7 million as of December 31, 2015. The increase was mainly due to longer lead times for certain
major raw materials and ramp up of product volume runners.
Financial assets at fair value through profit and loss refer to short-term investments of the Company. As of
December 31, 2016, the Company sold its short-term investments in UITF and RCBC senior notes.
The Company's HTM investments pertain to government bonds which were purchased by the Philippine
Branch of CATSI in compliance with the Corporation Code for foreign companies to maintain securities with
the SEC. Other current assets as of December 31, 2016 totaled US$2.6 million, compared with US$2.5
million as of December 31 2015, an increase of 3%. The change was mainly due to advances to suppliers.
Noncurrent assets held for sale pertain to the Company's Carmelray property which is being actively
marketed for sale.
Noncurrent assets, comprised of PPE, AFS financial asset, deferred income taxes and other noncurrent
assets as of December 31, 2016 amounted to US$32.7million compared with US$26.9 million as of
December 31, 2015, an increase of 21%.The increase was mainly due to increase in PPE and non-current
assets.
Liabilities
The Companys current liabilities is comprised of trade and other payables, short-term loans, long-term debt
current portion, amounts owed to related parties and, income tax payable. As of December 31, 2016,
current liabilities were at US$58.5 million compared with US$30.1 million as of December 31, 2015, a 94%
increase. This can be mainly attributed to increase in trade and other receivables, short-term loan, current
portion of long-term debt, income tax payable, and provision for warranty.
As of December 31, 2016, the Companys non-current liabilities, comprised of long-term debt net of
current portion, retirement benefit obligation, and deferred income tax liability amounting to US$38.8 million,
a 101% increase compared to US$19.3 million as of December 31, 2015. The increase was mainly due to
increase in long-term debt and increase in retirement benefit obligation.
Equity
The Companys shareholders equity as of December 31, 2016 amounted to US$25.2 million compared
with US$71.3 million as of December 31, 2015, a 65% decrease. The decrease in equity was due to
acquisition of parent company shares by a subsidiary.
As of ending December 31, 2015, the Companys principal sources of liquidity were cash from sales of its
products, IPO proceeds, bank credit facilities, proceeds from its 5-year corporate notes issuance, and
proceeds from its follow-on offering. The Company expects to meet its working capital, capital expenditure,
dividend payment and investment requirements for the next 12 months primarily from the proceeds of the
Companys IPO, proceeds of the Companys corporate notes issuance, short-term credit facilities and cash
flows from operations. It may also from time to time seek other sources of funding, which may include debt
or equity financings, including dollar and peso-denominated loans from Philippine banks, depending on its
financing needs and market conditions.
95
deliveries to existing customers, entering into new production agreements, and expanding its customer
The following table sets out the Companys cash flows for the 12 months ended December 31, 2015 and
the same period 2014 (in US$ thousands):
For the 12 months ended

In US$ 000 December 31
2016 2015
Net cash flows provided by/ (used for) operating activities (1,582) 16,996
Net cash flows used for investing activities 11,390 (28,900)
Net cash flows provided by/ (used for) financing activities (14,916) 29,019
Effect of exchange rate changes on cash and cash (157) 60
equivalents
Net increase (decrease) in cash equivalents (5,265) 17,175
Net cash flow used for operating activities was US$1.6 million for the 12 months ended December 31, 2016,
compared with US$17.0 million for the same period in 2015.
For the 12 months ended December 31, 2016, net income before tax was US$8.2 million. After adjustments
for depreciation, unrealized foreign exchange gain/losses, interest income/expense, and excess of the fair
value of net assets acquired over the aggregate consideration transferred, operating income before change
in working capital was US$11.6 million. Changes in working capital decreased operating income to US$1.7
million. This was mainly due to increase in inventories and receivables, and increase in trade and other
payables.
Net cash from investing activities amounted to US$11.4 million for the 12 months ended December 31,
2016. Investing activities in 2016 mainly involved disposal of financial assets at FVPL, increase in PPE,
and increase in other noncurrent assets. For the same period in 2015, major investing activities involved
investment in financial asset at FVPL, acquisition of PPE and AFS financial asset.
Net cash flow used in financing activities for the 12 months ended December 31, 2016 amounted to
US$14.9 million. Major financing activities include availment of short-term loans, issuance of corporate
notes, less payment of cash dividends, payment of short-term and long-term loans, interest, acquisition by
a subsidiary of Parent Company Shares, stock issue cost, and net movement in amounts owed by and
owed to related parties. For the same period in 2015 financing activities amounted to US$29 million and
mainly involved proceed from short-term loans, proceeds from the follow on offering, less payment of cash
dividends, interest payments, payments of short term and long term loan and net movement in amounts
owed by and owed to related parties.
96
Material Changes to the Companys Audited Consolidated Statement of Comprehensive Income for
the year ended December 31, 2016 compared to the Audited Consolidated Statement of
Comprehensive Income for the year ended December 31, 2015 (increase/decrease of 5% or more)

Sales growth for both CEC and CATSI

14% increase in operating expenses
Higher operating expenses to support expansion of operations
45% increase in Net Income Before Tax
Higher sales, higher gross margins, higher operating margins
6% increase in Provision for Income Tax
Higher taxable income for CEC and CATSI
49% increase in Net Income After Tax
Increase in sales, gross profit, and operating income before tax
Material Changes to the Companys Audited Consolidated Balance Sheet as of December 31, 2016
compared to the Audited Consolidated Balance Sheet as of December 31, 2015 (increase/decrease
of 5% or more)
18% decrease in Cash and Cash Equivalent
Increase in working capital, investments in PPE, investment, purchase by subsidiary of parent

company shares
69% increase in Trade and Other Receivables
Longer payment term for certain key customers
166% increase in inventories
Longer lead times for certain raw materials
100% decrease in Financial assets at FVPL
Sale of Financial assets at FVPL
21% increase in Noncurrent Assets
Increase in PPE and other noncurrent assets
101% increase in Current Liabilities
97
Increase in trade and other payable, short-term loans, current portion of long-term debt, income
tax payable, provision for warranty
101% increase Noncurrent Liabilities
Increase in long-term debt and retirement benefit obligation
65% decrease in Total Equity
Investment by a subsidiary in parent company shares
The Companys top five (5) key performance indicators are listed below (Amounts in US$ thousands, except
ratios, and where indicated):
Amounts in thousands US$, except 2014 2015 2016

ratios and where indicated
EBITDA 9,474 8,768 11,862

Current Ratio (x) 3.5x 3.1x 1.5x
Note: Earnings per share was calculated using CHPCs average outstanding common shares for the years
2014, 2015 and 2016
Earnings before interest, tax, depreciation and amortization (EBITDA) provides an indication of the
rate of earnings growth achieved.
The EBITDA margin shows earnings before interest, tax, depreciation and amortization as a
percentage of revenue. It is a measure of how efficiently revenue is converted into EBITDA.
EBITDA and EBITDA Margin are not measures of performance under PFRS, and investors should
not consider EBITDA and EBITDA Margin in isolation or as alternatives to net income as an
indicator of our Companys operating performance or to cash flow from operating, investing and
financing activities as a measure of liquidity, or any other measures of performance under PFRS.
Because there are various EBITDA and EBITDA Margin calculation methods, the Companys
presentation of these measures may not be comparable to similarly titled measures used by other
companies.
For the years ended December 31

98
In US$ 000 2014 2015 2016
Net income 5,844 5,121 7,608
Add back:
Interest expense/income-net 523 941 995
EBITDA 9,474 8,768 11,862
income.

In US$ 000 2014 2015 2016
EBITDA 9,474 8,768 11,862
Deduct:
Interest expense/(income) (523) (941) (995)
Depreciation and amortization (2,901) (2,190) (2,712)
Net Income 5,844 5,121 7,608
Sales growth
Sales growth is a key indicator of the Companys ability to grow the business
Current ratio
Current ratio measures a companys short-term liquidity, i.e. its ability to pay its debts that are due
within the next 12 months. It is expressed as the ratio between current assets and current liabilities.
Earnings per share
Earnings per share show the Companys attributable profit earned per share. At constant
outstanding number of shares, as the Company's earnings increase, the earnings per share
correspondingly increase.
For the 12-month period ended December 31, 2015 compared to the 12-month period ended
December 31, 2014
Revenue
The Company recorded consolidated revenues of US$59.5 million for the 12 months ended December 31,
2015, an increase of 15% from US$51.8 million for the same period in 2014. The increase was accounted
for by the growth of both the Companys semiconductor and RF/microwave/millimeterwave businesses.
Sales per division
99
IN US$ 000 For the 12 months ended December 31
2015 2014 % Inc / (Dec)
CEC
Discrete 11,296 10,800 5
Multichip 10,163 9,629 6
IC 8,119 8,556 (5)
QFN 5,143 3,848 34
New Products 5,415 5,221 4
Hermetics 2,083 2,008 4
CATSI
Cougar 329 150 119
Outdoor Unit 10,200 8,003 27
Indoor Unit 1,691 - -
Bridgewave 2,332 1,534 52
IRFU 2,493 1,009 147
RMS 285 1,034 (72)
Total 59,549 51,792 15%
The Companys COS is composed of: raw materials, spare parts, supplies; direct salaries, wages and
employees benefits; depreciation and amortization; utility expenses directly attributable to production,
freight and duties; and changes in finished goods and work in process inventories. The Companys cost of
sales increased by 13% to US$50.0 million in the 12 months ended December 31, 2015 from US$44.3
million for the same period in 2014. The increase was mainly due to the rise in raw materials cost, higher
salaries and wages, depreciation, and increase in inward freight and duties.
- Raw materials, spare parts, supplies and other inventories grew by 8% to US$30.7 million for
the 12 months ended December 31, 2015 from US$28.4 million for the same period in 2014.
- Salaries, wages and employees benefits increased by 5% to US$8.2 million for the 12 months
ended December 31, 2015, from US$7.8 million for the same period in 2014.
100
- Freight and duties increased by 30% to US$899 thousand for the 12 months ended December
31, 2015 from US$2.4 million for the same period in 2014.
- Other costs of sales increased by 65% to US$845 thousand for the 12 months ended
December 31, 2015 from US$513 thousand for the same period in 2014.
The Companys gross margin was 16% for the 12 months ended December 31, 2015, one percentage point
higher than the gross margin recorded for the same period in 2014.
Operating Expenses
The Companys operating expenses for the 12 months ended December 31, 2015 amounted to US$3.8
million, 15% higher compared to the US$3.3 million recorded during the same period in 2014.
For the 12 months ended December 31, 2015, the Company recorded a net income before income tax of
US$5.6 million, a decrease of 7% compared with US$6.1 million recorded for the same period in 2014. In
2014, the Company recognized a gain from the excess of the fair market value of net assets over the
acquisition cost (RBW acquisition) amount to US$2.6 million. In terms of core income (i.e. excluding
negative goodwill) the Company registered a gain of 35%, with core income at US$5.1 million for the 12
months ended December 31, 2015, compared to US$3.8 million for the same period in 2014.
Provision for income tax for the 12 months ended December 31, 2015 amounted to US$516 thousand
compared with US$207 thousand for the same period in 2014, an increase of 149%. This was mainly a
result of higher sales generated by CEC and CATSI.
Net Income
The Companys net income for the 12 months ended December 31, 2015 amounted to US$5.1 million, a
decrease of 12% compared with US$5.8 million for the same period in 2014.
As of December 31, 2015 compared to December 31, 2014
Assets
The Companys cash and cash equivalent as of December 31, 2015 amounted to US$29.8 million,
compared with US$12.6 million as of December 31, 2014, an increase of US$17.2 million or 136%. The
increase was mainly due to the proceeds from the follow-on offering completed by the Company in
November 2014.
Trade and other receivables as of December 31, 2015 amounted to US$13.8 million, compared with
US$14.9 million as of December 31, 2014,a 8% decline. The decrease, despite an increase in the
Companys consolidated sales, is indicative of more efficient collection of receivables in 2015.
Inventory levels as of December 31, 2015 amounted to US$5.7 million, 47% lower compared with US$10.8
million as of December 31, 2014. The decrease was mainly due to reduction in work in process inventory.
101
Financial assets at fair value through profit and loss refer to short-term investments of the Company. As of
December 31, 2015, short term investments amount to US$19.4 million compared with US$702 thousand
as of December 31, 2014, an increase of 26.7x. The increase was due to certain portion of proceeds from
the Companys follow on offering placed in short-term investments until the funds are utilized.
Other current assets as of December 31, 2015 totaled US$2.5 million, compared with US$1.9 million as of
December 31, 2014, an increase of 35%. The change was mainly due to advances to suppliers and loans
to employees.
Non-current assets, comprised of PPE, Available-for-sale (AFS) financial asset, deferred income taxes and
other noncurrent assets as of December 31, 2015 amounted to US$26.9 million compared with US$19.1
as of December 31, 2014, an increase of 41% The increase was mainly due to increase in PPE and AFS
financial assets.
Liabilities
The Companys current liabilities is comprised of trade and other payables, short-term loans, long-term debt
current portion, amounts owed to related parties and income tax payable. As of December 31, 2015,
current liabilities were at US$30.1 million compared with US$16.3 million as of December 31, 2014, an 84%
increase. This can be mainly attributed to increase in trade and other receivables, short-term loan, current
portion of long-term debt.
As of December 31, 2015, the Companys non-current liabilities, comprised of long-term debt net of
current portion and deferred financing costs and retirement benefit obligation, amounted to US$19.3 million,
a 24% decrease compared to US25.3 million as of December 31, 2014. The decrease was mainly due to
the decrease in long-term debt and retirement benefit obligation.
Equity
The Companys shareholders equity as of December 31, 2015 amounted to US$71.2 million compared
with US$35.0 million as of December 31, 2014, a 104% increase. The increase in equity was due to
additional paid-in capital and profits recorded by the Company in 2015, less cash dividends paid out during
the year.
As of December 31, 2015, the Companys principal sources of liquidity were cash from sales of its products,
IPO proceeds, bank credit facilities, proceeds from its 5-year corporate notes issuance, and proceeds from
its follow-on offering. The Company expects to meet its working capital, capital expenditure, dividend
payment and investment requirements for the next 12 months primarily from the proceeds of the Companys
IPO, proceeds of the Companys corporate notes issuance, short-term credit facilities and cash flows from
operations. It may also from time to time seek other sources of funding, which may include debt or equity
financings, including dollar and peso-denominated loans from Philippine banks, depending on its financing
needs and market conditions.
deliveries to existing customers, entering into new production agreements, and expanding its customer
The following table sets out the Companys cash flows for the 12 months ended December 31, 2015 and
the same period 2014 (in US$ thousands):
102
For the 12 months ended
In US$ 000 December 31
2015 2014
Net cash flows provided by/ (used for) operating activities 16,996 3,851
Net cash flows used for investing activities (28,900) (1,642)
Net cash flows provided by/ (used for) financing activities 29,019 3,321
Effect of exchange rate changes on cash and cash 60 49
equivalents
Net increase (decrease) in cash equivalents 17,175 5,579
Net cash flow provided by operating activities was US$17 million for the 12 months ended December 31,
2015, compared with US$3.9 million for the same period in 2014.
For the 12 months ended December 31, 2015, net income before tax was US$5.6 million. After adjustments
for depreciation, unrealized foreign exchange gain/losses, interest income/expense, and excess of the fair
value of net assets acquired over the aggregate consideration transferred, operating income before change
in working capital was US$8.4 million. Changes in working capital decreased operating income to US$17.5
million. This was mainly due to increase in inventories and receivables, and increase in trade and other
payables.
Net cash from investing activities amounted to US$28.9 million for the 12 months ended December 31,
2015. Investing activities in 2015 mainly involved disposal of financial assets at FVPL, AFS financial asset,
acquisition of PPE. For the same period in 2014, major investing activities involved investment in financial
asset at FVPL, acquisition of PPE and AFS financial asset.
Net cash flow used in financing activities for the 12 months ended December 31, 2015 amounted to
US$29.0 million. Major financing activities include availment of short-term loans, issuance of common stock
and preferred stock, less payment of cash dividends, payment of short-term and long-term loans, interest,
stock issue cost, and net movement in amounts owed by and owed to related parties. For the same period
in 2014 financing activities amounted to US$3.3 million and mainly include proceeds from short-term loans
and long-term debt, less payment of cash dividends, interest payments, payments of short term and long
term loan and net movement in amounts owed by and owed to related parties.
Material Changes to the Companys Audited Consolidated Statement of Comprehensive Income for
the year ended December 31, 2015 compared to the Audited Consolidated Statement of
Comprehensive Income for the year ended December 31, 2014 (increase/decrease of 5% or more)

Sales growth for both CEC and CATSI

103
15% increase in operating expenses
Full-year consolidation of CATSI operating expenses
7% decrease in Net Income Before Tax

Net Income for 2014 was significantly boosted by negative goodwill (gain from the excess of
the fair market value of net assets over the acquisition cost [Remic acquisition])
149% increase in Provision for Income Tax

Higher taxable income for CEC and CATSI
12% decrease in Net Income After Tax

Net Income for 2014 was significantly boosted by negative goodwill (gain from the excess of
the fair market value of net assets over the acquisition cost [Remic acquisition]).
Material Changes to the Companys Audited Consolidated Balance Sheet as of December 31, 2015
compared to the Audited Consolidated Balance Sheet as of December 31, 2014 (increase/decrease
of 5% or more)
136% increase in Cash and Cash Equivalent

Proceeds from the Companys follow-on offering
8% decrease in Trade and Other Receivables

Improved collection efficiency
47% decrease in inventories

Reduction in work in process inventory
26.7x increase in Financial assets at fair value through profit or loss

Certain portion of proceeds from the Companys follow on offering placed in short-term
investments until funds were utilized
41% increase in Noncurrent Assets

Increase in PPE and AFS financial assets
84% increase in Current Liabilities

Increase in trade and other receivables, short-term loans, current portion of long-term debt
24% decrease in Non-current Liabilities

Decrease in long-term debt and retirement benefit obligation
104% increase in Total Equity

Additional paid-in capital and profits recorded by the Company in 2015, less cash dividends
paid out during the year
The Companys top five (5) key performance indicators are listed below (Amounts in US$ thousands, except
ratios, and where indicated):
104
Amounts in thousands US$, except 2013 2014 2015
ratios and where indicated
EBITDA 7,492 9,474 8,768

Current Ratio (x) 5x 3.5x 3.1 x
Note: Earnings per share was calculated using CHPCs average outstanding common shares for the years
2013, 2014 and 2015
Earnings before interest, tax, depreciation and amortization (EBITDA) provides an indication of the
rate of earnings growth achieved.
The EBITDA margin shows earnings before interest, tax, depreciation and amortization as a
percentage of revenue. It is a measure of how efficiently revenue is converted into EBITDA.
EBITDA and EBITDA Margin are not measures of performance under PFRS, and investors should
not consider EBITDA and EBITDA Margin in isolation or as alternatives to net income as an
indicator of our Companys operating performance or to cash flow from operating, investing and
financing activities as a measure of liquidity, or any other measures of performance under PFRS.
Because there are various EBITDA and EBITDA Margin calculation methods, the Companys
presentation of these measures may not be comparable to similarly titled measures used by other
companies.

In US$ 000 2013 2014 2015
Net income 4,637 5,844 5,121
Add back:
Interest expense/income-net 285 523 941
EBITDA 7,492 9,474 8,768
income.

In US$ 000 2013 2014 2015
EBITDA 7,492 9,474 8,768
Deduct:
105
In US$ 000 2013 2014 2015
Interest expense/(income) (285) (523) (941)
Depreciation and amortization (2,310) (2,901) (2,190)
Net Income 4,637 5,844 5,121
Sales growth
Sales growth is a key indicator of the Companys ability to grow the business
Current ratio
Current ratio measures a companys short-term liquidity, i.e. its ability to pay its debts that are due
within the next 12 months. It is expressed as the ratio between current assets and current liabilities.
Earnings per share
Earnings per share show the Companys attributable profit earned per share. At constant
outstanding number of shares, as the Company's earnings increase, the earnings per share
correspondingly increase.
106
COMPANY DESCRIPTION
Company Overview
Cirtek Holdings Philippines Corporation is a fully integrated global technology company focused on wireless
communication. It is the holding company of Cirtek Electronics Corporation (CEC) and Cirtek Electronics
International Corporation (CEIC), (collectively the Cirtek Group). The Companys principal office is
located at 116 East Main Avenue, Phase V-SEZ, Laguna Technopark, Bian, Laguna.
The Company was registered in the SEC on 10 February 2011 and listed in the PSE on 18 November 2011.
In 2015, the Company then proceeded with a follow on offering of common shares which was 1.5 times
oversubscribed and raised 2.2 billion. Currently, market capitalization has grown by approximately fifteen
times from 1.10 billion in 2011 to 15.97 billion as of 22 September 2017.
The Cirtek Group harnesses more than 54 years of combined operating track record. The Companys
products cover a wide range of applications and industries, including communications, consumer
electronics, power devices, computing, automotive, and industrial.
Through its subsidiaries, the Company is primarily engaged in three (3) major activities:
1) the design, development and delivery of the wireless industrys most advanced high-efficiency,
high-performance antenna solutions
2) the manufacture of value-added, highly integrated technology products, and
3) the manufacture and sales of semiconductor packages as an independent subcontractor for
outsourced semiconductor assembly, test and packaging services
Quintel Solutions is a leading provider of advanced high-efficiency, high-performance antenna solutions for
wireless cellular networks. Quintel is a pioneer of multi-port, multi-frequency wireless tower antennas.
These antennas support more frequencies and deliver greater bandwidth, thereby improving customer
experience and creating cost-efficiencies and quicker roll-out for mobile operators.
CEIC sells integrated circuits principally in the US and assigns the production of the same to CEC. CEIC
acquired Remec Broadband Wireless Inc. (RBWI) in 30 July 2014, renamed Cirtek Advanced
Technologies and Solutions, Inc, (CATSI), a proven Philippine-based manufacturer of value added, highly
integrated technology products. CATSI offers complete "box build" turnkey manufacturing solutions to RF,
microwave, and millimeterwave products used in the wireless industry such as telecommunication, satellite,
aerospace and defense, and automotive wireless devices.
CEC provides turnkey solutions that include package design and development, wafer probing, wafer back
grinding, assembly and packaging, final testing of semiconductor devices, and delivery and shipment to its
customers end users. CEC has over 64 regular customers spread out in Europe, the US and Asia.
Beginning in 1984 with only three customers, the Cirtek Group has significantly grown its customer base to
over 70 major and regular customers across Europe, U.S. and Asia, with the bulk of revenues contributed
by customers located in Europe and the U.S.
The Cirtek Group has earned a strong reputation with its customers for its high-quality products, production
flexibility, competitive costing, and capability to work with customers to develop application and customer
specific packages. The Cirtek Group has been accredited and certified by several international quality
107
institutions, namely TD SD Management Service GmbH, TV Product Service Asia Ltd., Taiwan Branch,
Defense Supply Center & British Approval Board Telecom, for the latest quality system standards, which
include ISO9001, ISO14001, and QS9000/TS16949, TUV Product Safety Certification, and FCC
certification.
From 2014 to 2016, Cirtek Groups consolidated revenues grew from US$51.8 million to US$74.3 at a
CAGR of 19.8% while consolidated net income grew from US$5.8 million to US$7.6 million at a CAGR of
14.1%. For the six months ended 30 June 2017, the Cirtek Group reported consolidated revenues and
consolidated net income of US$42.2 million and US$4.7 million at a year-on-year growth of 29.9% and
25.1%, respectively. As of 30 June 2017, the Cirtek Group had total consolidated assets of US$145.5 million
and total consolidated liabilities of US$83.9 million.
Corporate Structure
As of the date of the Preliminary Prospectus, the corporate structure of the Company and its Subsidiaries
are as follows:
All of the Companys subsidiaries are wholly owned. As of 30 June 2017, details of these subsidiaries are
as follows:
Percentage of Ownership
Subsidiaries Country of incorporation Direct Indirect
CEC Philippines 100 -
Cirtek Delaware United States of America - 100
Quintel Cayman Cayaman Islands - 100
108
Quintel Technology, Ltd. United States of America - 100
Quintel USA United States of America - 100
CEIC British Virgin Islands (BVI) 100 -
Cirtek Business & Technology Solutions* Philippines - 100
CATSI (formerly known as RBWI) Philippines - 100
CATSI (Phil. Branch) Philippines - 100
Remee Broadband Wireless Real Property Philippines - 100
CloudMondo Philippines 11 -
*Shares of Cirtek Business & Technology Solutions is still in the process of being transferred to CEIC
Competitive Strengths
The Company believes that its principal strengths are the following:
Industry-leading Technology
The Company, through Quintel, designs, develops and delivers advanced high-efficiency, high-
performance antenna solutions that help mobile operators to increase efficiency, enhance quality-of-
service, slash costs and accelerate ROI.
Quintel is radically transforming wireless infrastructure with feature-rich antenna technologies that make
networks more efficient and more profitable. An innovator in low-impact and high-output solutions, Quintel
simplifies rollout complexity with practical antenna solutions that quickly boost capacity and coverage
Reputation for High-Quality, Innovative Products
The Cirtek Group has a strong reputation for producing and delivering high-quality, innovative products to
the market.
Significant Proprietary IP
The Company's proven record of innovation and over 60 years of combined experience in manufacturing
and developing robust technology products are supported by 21 patent families, over 50 approved patents
and patent applications worldwide.
Offers a Complete Range of Turnkey Solutions and Vertically Integrated Services
The Company, through its subsidiaries, provides a full range of turnkey solutions. For the semiconductor
business, these would include package design and development, wafer probing, wafer back grinding,
assembly and packaging, final testing of semiconductor devices, and delivery and shipment to its
customers end users. CATSI also offers full turnkey solutions, including product and process design and
development, transition from R&D to full scale manufacturing, integrated manufacturing processes, and
delivery to end customers.
Of particular importance to the Company, however, is its ability to adapt and adjust to the specific needs
and demands of its customers through its technical capabilities. The Companys customers are given the
flexibility to contract for the entire process flow, or just a portion thereof. In addition, the Company also
works with its customers to develop application and customer specific packages. These have given Cirtek
the ability to adapt to its customers needs, which in turn, helps build a stronger relationship with its
customers.
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Furthermore, the Companys vertically integrated manufacturing solutions enable it to shorten lead times.
This results in savings for Cirteks customers for non-essential product costs and faster time to market for
their products.
Global and Diversified Customer Footprint
Cirtek Groups products have multiple end-user applications that serve a diverse range of industries
including telecommunications, automotive, consumer electronics, industrial, medical, satellite
communication, and aerospace and defense. The table below illustrates the breakdown of the Companys
revenues by industry for the year ended December 31, 2016:
Industry Revenue
Contribution (%)
Communication 58
Computing 14
Consumer Electronics 13
Industrial 10
Automotive 5
Total 100
Since its incorporation, the Cirtek Group has slowly built a global customer base of over 70 customers
based in three major regions in the world, namely, Asia, Europe and the U.S. The table below shows the
breakdown of revenue contribution of its customers per region for the year ended December 31, 2016:
Revenue
Contribution (%)
U.S. 70%
Europe 20%
Asia 10%
Total 100%
Because of the diversified revenue base of the Cirtek Group, it is not dependent on a single market and is
able to cope with upswings and downswings in demand.
Strong Financial Track Record
Cirtek, through its subsidiaries, has consistently proven its ability to grow the business. Cirtek has grown
its consolidated revenues from US$24 million in 2009 to US$74 million in 2016, a 13% CAGR.
The Cirtek Groups ability to create shareholder value is seen in the consistent rise in its profits and EBITDA
over the years. As a result, market capitalization has grown by approximately fifteen times since its IPO in
November 2011 to 15.97 billion as of 22 September 2017.
Highly Experienced Management Team
The Companys senior management is composed of highly experienced individuals from various
semiconductor, OSAT, and RF and microwave companies. It has over 200 years of combined management
and engineering expertise. It believes that because of managements extensive experience in the industry,
the Company is highly equipped in dealing with, responding, and adapting to customer needs, as well as
changes in the industry landscape.
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Proven Execution Track Record
The Company, through its subsidiaries, harnesses more than 54 years of combined operating track record.
It has a well-established reputation in both the assembly and testing segment of the semiconductor industry
and in providing complete "box build" turnkey manufacturing solutions to RF, microwave, and
millimeterwave products.
CEC is known for its high-quality products, production flexibility, competitive costing, and capability to work
with customers to develop applications. It continues to be the preferred supplier of customer- and
application-specific semiconductor packages. It has been in business with most of its customers for more
than ten years. Moreover, its existing customer base has grown since 1984 from only three customers to
over 60 customers to date.
RBWI, now known as CATSI, has over 18 years of experience in producing high quality niche PCBA and
Box-build in low/medium/high volume and high-mix products for industrial and consumer applications, such
as RF/microwave, emerging products of OEMs and ODMs for commercial, industrial, military and
telecommunications applications, and providing related repair services. These unique capabilities and
extensive experience in RF and microwave manufacturing and engineering services offer a versatile
competitiveness in this field.
Quintel is a market leader in the design, development and delivery of advanced high efficiency, high
performance antenna solutions that allow mobile operators to increase efficiency, enhance quality-of-
service and reduce costs. The companys core technology, QTilt, which provides variable linear phase
slope across the antenna array and as such, increases site output without expanding the site footprint.
The Company has over the years developed excellence in manufacturing. Cirteks manufacturing practices
are designed to be compliant with industry requirements and to exceed customer expectations. This is
evidenced by latest quality system standards obtained by the Company, through its subsidiaries, namely
TD SD Management Service GmbH, TV Product Service Asia Ltd., Taiwan Branch, Defense Supply
Center & British Approval Board Telecom, for the latest quality system standards, which include ISO9001,
ISO14001, and QS9000/TS16949, TUV Product Safety Certification, and FCC certification.
The Companys quality system has evolved from direct dealings with customers, benchmarking and
learning from their experiences, and incorporating their best practices into the Companys own quality
system. All these have enabled the company to garner several recognition awards from its major customers
as presented in Awards and Recognition on page 129.
Key Strategies
FOR QUINTEL
Expand to new geographic markets as the global market for muti-port, multi-frequency base station
antennas is expanding rapidly
At present, Quintel is concentrated in North America, in particular the US as its main customers are AT&T
and Verizon, the two largest telecom companies in the world.
With the sale of multiband base station antennas rising worldwide, Quintel as a pioneer and leading provider
of multi-port and multi-band antenna systems, is moving to expand its presence outside the US and in
markets where available frequencies matches Quintel's product frequencies.
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Expand Cirtek / Quintels product portfolio through new product introduction, licensing and white
label branding
To continue being a market leader, Quintel will continue to introduce new, innovative technologies and
products to address current and emerging market opportunities as well as requirements from its customer.
Quintel will also consider strategic partnerships such as licensing and white label branding. Such strategies
will generate revenue, brand recognition and expand the product and services offerings of Quintel
Improvement in gross margin through lower BOM cost, more efficient outbound logistics, better
yield and better quality
Quintel is aggressively pursuing cost reduction initiatives to improve margins and give the Company pricing
flexibility in price-sensitive markets. Key areas for cost reduction include lower BOM costs by expanding
its supplier base, and lower logistic costs through optimal use of air and sea freight.
FOR CEC
Focus on further expanding the semiconductor business
Improve on customer- and application- specific packages
The Company intends to constantly review and make innovations in its production and assembly techniques
and capabilities to improve productivity and efficiency in its use of resources. In addition to that, it plans to
continue to work closely with its current and potential customers to understand technology and industry
trends that may have an impact on customers products. Together with the customer, the Company will
evaluate how its customers product can evolve to meet new requirements and standards in order to stay
competitive.
Furthermore, the Company will continue to aggressively offer dedicated or captive line models for assembly
and test services. This involves dedicating certain capacity to fulfill a customers mature and stable products
with competitive volume break incentives. This arrangement allows customers to increase capacity quickly
and minimize the need for additional capital expenditures.
Introduce new products/packages that meet customers needs
The Company plans to continue to co-develop new technologies with its customers. It will tap into the
expertise and strengths of customers in areas where developing it solely would be costly and time
consuming. The cooperation with customers assures the availability of a ready market and a faster-to-
market introduction of products.
Strengthen presence in high-growth market segments such as wireless communication, consumer

electronics, automotive sectors
The Company plans to actively pursue business opportunities in high-growth market segments such as
wireless communication, consumer electronics and automotive. Demand for smart phones, tablets and
gadgets remain strong. In automotive, demand is being driven by the growing number of cars, as well as
the higher electronic content in vehicles as result of enhancements to, convenience and safety features,
and environmental concerns. The internet of things (the ability to connect remote and mobile things or
machines or assets to the Internet or corporate Intranets through the use of wireless communications
and low-cost sensors/computing/storage) will significantly drive the consumer electronics market.
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Expand sales network in key markets such as Europe, US and Asia
The Company is increasing its international sales force and sales representatives to establish greater
geographic presence and increase its end-customer base.
FOR CATSI
Aggressive growth for RF/Microwave/Millimeterwave Business by at least 45% year on year
The Company expects the demand for its RF/Microwave/Millimeterwave business to grow at a rapid rate
as a result of the explosive growth in wireless data traffic and growing application of millimeterwave in
imaging, telecommunication, consumer markets, defense and security.
Expand customer base RF/Microwave/Milimeterwave Business
Since it started operations, CATSI has shipped over 1.4 million products worldwide. The Company has
produced the most number of millimeter wave radio links among independent manufacturers worldwide.
CATSI is aggressively pursuing new customers as demand for microwave and millimeter wave in the upper
frequencies increase. The Company is also in the process of increasing its sales coverage by signing up
sales representatives in the US and Europe. The Asian market is covered by an in-house team.
Subsidiaries
Cirtek Electronics Corporation
CEC was incorporated with the SEC on 31 May 1984, primarily to engage as an independent subcontractor
for semiconductor assembly, test and packaging services.
Prior to the Companys acquisition of CEC in 2011, CEC was majority-owned by Charmview Enterprises,
Ltd. (Charmview), a holding company incorporated in the British Virgin Islands on 1 November 1994 and
is owned by the Liu family, wherein the US$50,000 authorized capital stock is divided equally among Jerry
Liu, Nelia Liu, Michael Liu, Justin Liu, and Brian Gregory Liu.
On 24 March 2008, Charmview and CHI entered into a Share Swap Agreement whereby Charmview
transferred all of its interest in CEC, constituting 155,511,959 common shares, to CHI in exchange for
50,000 common shares of stock of CHI. As a result of the share swap, CEC became a subsidiary of CHI.
On 1 March 2011, CHI and the Company executed the Deed of Absolute Sale of Shares wherein CHI
transferred all of its 155,511,959 shares in CEC in favor of the Company for and in consideration of
P130,000,000.00, making CEC a wholly-owned subsidiary of the Company.
CEC owns the manufacturing plants in Technopark as well as machinery such as bonder, auto test handler,
optical inspection system, wafer back grinder, mold set, and other machinery necessary for the
manufacture, assembly, and testing of semiconductors.
CEC was previously registered with the Board of Investments (BOI) under Presidential Decree No. 1789,
as amended by Batas Pambansa Blg. 391, as a preferred pioneer enterprise for the manufacture and export
of integrated circuits. As a registered enterprise, CEC was entitled to certain tax and nontax incentives
provided for in PD 1789.
On 24 March 1998, the Philippine Economic Zone Authority (PEZA) approved CECs registration as an
ecozone export enterprise at the Laguna Technopark for the manufacture of standard integrated circuits,
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discrete, hybrid, and potential new packages. Beginning 30 October 2002, the manufacture and export of
integrated circuits, discrete and hybrid transferred to PEZA from BOI. Since its income tax holiday incentive
expired in 2003, CEC is subject to tax at the preferential rate of 5% of its gross income in accordance with
Republic Act No. 7916, the law creating the PEZA. In order to maximize the incentives granted under
Republic Act No. 7916, CEC applied for the registration of its new products and was granted income tax
holiday therefor from 2003 to 2005.
On 27 April 2011, PEZA approved CECs application for the registration of a new project involving the
manufacture of devices which will be used as components for smart phones, automotive sensor
applications, battery chargers, and industrial applications.
CEC offers a broad range of products that go into various applications. The end application covers a diverse
range of industries from consumer products to high reliability industrial and military products. The following
are CEC's product lines:
1. Protection products - These products are designed to protect electronic devices from damaging voltage
or current spikes. These are in multi-chip Small-outline Integrated Circuit (SOIC) packages, with up to 32
diodes in a single unit.
2. Light sensors - These optical devices sense the intensity of light and trigger the automatic switching on
and off of headlights and the automatic adjustment of air conditioning settings in cars. The package is a
transparent custom-body Quad Flat Pack Leadless Package (QFN).
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3. Real time clock - These are precision time keeping devices which contain features like calendars, time
of day, trickle charger and memory functions. These devices come with tuning fork cylindrical crystals and
are packaged in 16/20L SOIC 300mil body version.
4. Voltage control oscillators (VCO) - This is an electronic oscillator that is designed to be controlled in
oscillation frequency by a DC voltage input. Signals may also be fed into the VCO to cause frequency
modulation or phase modulation.
5. Electronic Relays - These are opto relays that are used in controlling high voltage and high power
equipment. The control is achieved through the physical isolation of high voltage output and the low voltage
input side of the device protecting the circuit components and the users. These are packaged in Plastic
Dual-in-line Package (PDIP) with an LED and a driver IC coupled together, without electrical connection
between them.
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6. Power management devices - These devices are used in a wide range of power management
applications from telecommunications, industrial equipment, portable devices, computers, and networks.
These are packaged in SOIC with the die pad exposed.
CEC Manufacturing Process Flow
The Company, through its subsidiary CEC, assembles and tests semiconductor devices at its
manufacturing complex located on a 12,740 square meter property in Bian, Laguna. CEC currently leases
the property from Cirtek Land Corporation and Cayon Holdings, Inc., both of which are majority owned by
one of the Companys directors, Nelia T. Liu. CECs manufacturing facility is composed of two buildings,
with a total floor area of 152,000 square feet.
Process Flow
The figure below illustrates the typical manufacturing process for the back-end production of semiconductor
products:
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The back end semiconductor operation starts with package design and development. The design phase
pertains to a) the determination of the type of package to be used that conforms to industry standards, b)
the substrates that will match the intended package, and c) the material set that will be used to meet
customer specifications. This is followed by tooling selection and ordering.
The development process follows a systematic approach which takes into account the standards required
by the end user product. Advanced quality planning is made part of the process to ensure that the critical
quality characteristics are fully understood, characterized and tested. Customers are involved as they have
to approve the design and any changes that will happen later in the development stage.
The development is only deemed complete once critical processes are proven capable and qualification
units and lots are produced and tested for reliability internally and or by the customers.
The fundamental package assembly process starts after the Company receives the wafer silicon from
customers. Pre-assembly, the wafers are back grinded to the desired thickness, probed for electrical
performance and then sawn to dice the wafers to its individual chip size following customer requirements.
The individually sawn dies are then mounted on a copper substrate typically using epoxy adhesives. Other
packages made by the Company however, may require other mounting adhesives for enhanced functional
performance. Examples of these include, E0201 dual flat leadless package (DFN) (used in smart phones)
which requires a gold eutectic process or the Power Quad Flat No leads (PQFN) (used in charges) which
requires solder paste.
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The interconnection between die to leads is normally done using gold fine wire. Power packages however
use copper clips for higher electrical conductivity. The parts are then encapsulated by an epoxy moulding
compound, which are usually opaque.
The parts are then electroplated for protection of the metal leads, trimmed and formed into its final shape
or sawn into its final dimensions in the case of 0201 DFN, Optical Dual Flat No lead (ODFN) and PQFN.
These assembled units are electrically tested for functional screening. The good parts are then packed per
customer specifications and shipped to its intended destination.
Customers may opt to contract for the entire process flow or for portions thereof, as well require changes,
subject to mutual consent to suit the customers product needs.
CEC Customers
Beginning in 1984 with 3 customers, the Cirtek Group has significantly grown its customer base to over 50
regular customers as of 30 June 2017. Cirtek, through CEC, aims to broaden its existing customer base,
as well as its geographic coverage to mitigate the volatility in the semiconductor industry. The figure below
lists the CECs major customers:
The table below illustrates the geographic distribution of customers by revenue contribution per region, for
the years 2014, 2015, and 2016.
2014 2015 2016

Asia 21% 24% 20%
Europe 33% 40% 40%
U.S. 46% 36% 40%
The Company is not dependent upon a single customer or a few customers or industry, the loss of any of
which would have a material adverse effect on the Company. The Company has no single customer
contributing more than 20% of the Companys total revenues in the last three years of operation. The top
customer accounts for only 12% of total revenue while the top 10 customers collectively account for less
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than 70% of total revenue. Neither is the Company reliant on any specific industry since its products have
varied applications in different industries.
Most of the Cirtek Groups customers have been clients of the company for more than 10 years. For most
of these clients, no formal supply or manufacturing contract is executed, and the orders are governed by
purchase orders which provide the specification of the products to be sold, delivery schedule and terms of
payment, among others. Customers are required to submit order forecasts ranging from 3-6 months, which
the Company uses to project its supply requirements. Depending on the relationship with the particular
customers, payment terms can be on a cash-on-delivery basis or credit term of between 30 to 45 days.
CEC Competition
The assembly and testing segment of the semiconductor industry is highly competitive. The Companys
competitors in the semiconductor space include IDMs with their own in-house assembly and testing
capabilities, and similar independent semiconductor assembly and test subcontractors, located in the
Philippines and in the Asia-Pacific region. Among the Companys competitors are Amkor Technology in
Korea and in the Philippines; Advanced Semiconductor Engineering, Inc. or ASE, a Taiwanese company
and one of the largest OSAT companies in the world, with branches in Korea and China; Orient
Semiconductor Electronics, Ltd. and Siliconware Precision Industries Co. Ltd. in Taiwan; Unisem and
Carsem Semiconductor in Malaysia; Hana Microelectronics in Thailand; STATS Chip Pac Ltd. in Singapore,
and other Chinese subcontractors such as Diodes, Inc. and Chiang Jiang Electronic Technology or JCET.
Aside from Cirtek Group, there are two (2) active companies in the semiconductor industry that are listed
in the PSE. These are Integrated Micro-Electronics, Inc. (IMI) and SFA Semicon Philippines Corporation
(SSP). The table below presents a side by side comparison between and among Cirtek, PSPC and IMI of
each ones relative size and financial performance (As of and for the year ended 31 December 2016,
Amounts in US$ thousands unless as indicated):
TECH SSP IMI

Market Capitalization (PHP millions) 15,966.00 6,018.767 36,395.24
Revenue 74,322.31 171,817.95 842,966.42
EBITDA 11,862.00 28,373.71 64,966.92
Net Income 7,608.03 6,422.77 28,115.89
Total Assets 122,489.73 165,497.86 645,908.89
Total Liabilities 97,280.54 59,075.88 398,041.76
Total Stockholders' Equity 74,775.73 106,421.98 237,867.13
Note: Market Capitalization is as of 22 September 2017
The principal areas of competition are pricing and product quality. The Company believes however, that it
has an advantage over its competitors not only in the above-mentioned areas but also because of the
following reasons: advanced packaging technology in multiple component products; retooling and
configuration capabilities that focus on jointly developed application-specific packages; dedicated line
services; and quick turnaround time on customer requirements.
Cirtek Electronics International Corporation
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CEIC was incorporated under the International Business Companies Act of the British Virgin Islands on 4
April 1995. CEIC was incorporated with the primary purpose of selling integrated circuits principally in the
U.S. CEIC subcontracts the production of the same to CEC.
Beginning 8 June 1995, CEIC, after securing the sales from its customers abroad, would subcontract the
assembly, testing, and/or packaging of the devices to CEC, pursuant to a Master Subcontractor Agreement.
Under said agreement, CEIC issues purchase orders to CEC stating therein the type of product it will
require, the quantity, delivery date, and destination, together with such other instructions the former may
have. In consideration for its services, CEC is paid a service fee depending on the services contracted for
a particular purchase order.
Prior to the Companys acquisition of CEIC in 2011, CEIC was majority-owned by Charmview. On 24 March
2008, Charmview and CHI entered into a Share Swap Agreement whereby Charmview transferred all of its
interest in CEIC, constituting 50,000 common shares, to CHI in exchange for 50,000 common shares of
stock of CHI. As a result of the share swap, CEIC became a subsidiary of CHI.
On 1 March 2011, CHI and the Company executed the Deed of Absolute Sale of Shares wherein CHI
transferred all of its 50,000,000 shares in CEIC in favor of the Company for and in consideration of
P130,000,000.00, making CEIC a wholly-owned subsidiary of the Company.
Acquisition of Remec Broadband Wireless International, Inc.
On 30 July 2014, CEIC entered into a sale and purchase agreement with REMEC Broadband Wireless
Holdings (REMEC), for the purchase of 100% of the shares of REMECs manufacturing division, REMEC
Broadband Wireless International, Inc. (RBWI), a Philippine-based manufacturer of value added, highly
integrated technology products. Based on the terms of the sale: (i) REMEC and its remaining subsidiaries
will continue to design and market its top-of-class telecommunications products globally under its REMEC
brand; and (ii) REMEC will enter into a manufacturing agreement with Cirtek to manufacture REMECs
products under a long term contract manufacturing relationship. CEIC acquired RBWI for a consideration
of $7.5 million. CHPC funded the acquisition through a combination of available cash on hand and proceeds
from a corporate notes issuance.
At the time of the acquisition, RBWI had over 18 years of experience in producing high quality niche PCBA
and Box-build in low/medium/high volume and high mix products for industrial and consumer applications,
such as RF/microwave, emerging products of OEMs and ODMs for commercial, industrial, military, and
telecommunications applications, and providing related repair services. These unique capabilities and
extensive experience in RF and microwave manufacturing and engineering services offer a versatile
competitiveness in this field.
RBWIs contract manufacturing capabilities range from component level (transceivers, synthesizers,
oscillators, mixers, filters switches, microwave devices), sub-system and module level (power amps,
transceivers, filters, diplexers, mixers, mixed signal, PCBA), system level (spread spectrum radios, power
amplifiers, repeaters, modem, Outdoor RF Radios (ODU, IP Radio), 6GHz to 42GHz, broadband radios -
60GHz to 80GHz , and indoor RF Radios (IRFU, IDU).
RBWI has shipped more than 1,000,000 finished products (ODUs, IP radios, transceivers and amplifiers)
with field-proven MTBF of over 100 years, to over 30 customers globally. RBWI is also PEZA-registered
with Pioneer Status, and owns a world-class manufacturing facility (ISO 9001 and 14001 certified) located
in Carmelray Industrial Park 1, Laguna. RBWI has received numerous awards from top global microwave
OEMs, and recorded sales revenues worth $43 million for fiscal year 2013.
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CEICs acquisition of RBWI allows the Cirtek Group to expand its existing manufacturing capacity and
capability into the high-growth wireless segment via a proven player with a strong customer base. It also
allows Cirtek Group to provide customers with vertically integrated solutions that offer the Company higher
margins and the customer more flexibility.
Through RBWI, the Cirtek Group will be able to cater to the strong demand for electronic products and
applications, such as smartphones and media streaming in the telecommunications industry, wireless
health monitors in the medical industry, and connectivity applications in the automotive industry, among
others.
RBWI was renamed to Cirtek Advanced Technology Solutions, Inc. (CATSI) on 21 November 2014 in the
British Virgin Islands. On 18 February 2015, the Philippine SEC approved the change in corporate name.
Acquisition of Quintel Cayman Ltd. and its subsidiaries.
On July 31, 2017, Cirtek Holdings Philippines Corporation (CHPC) and Trillium International I, GP, as
shareholder representative of Quintel Cayman, Ltd. announced the signing of a definitive agreement under
which CHPC, through its subsidiary CEIC, will acquire 100% of Quintel, a leading provider of advanced
high-efficiency, high-performance antenna solutions. Upon closing, the transaction will immediately give
CHPC a significant presence in the large and rapidly growing base station antenna market, estimated to be
more than US$14 billion by 2020.
Quintel is a leading innovator of spectrum and space-efficient base station antennas for wireless networks.
Among Quintel's major customers include two of the top 5 telecom carriers in North America.
Quintel recently expanded its industry-leading MultiServ Slimline Antennas portfolio. In addition to the
12-Port Multiband Antenna, Quintel now has 10 Port antennas, both of which come in 4, 6 and 8 foot
lengths. This latest Slimline Antenna utilizes the same 12/300mm wide form factor that all Quintel antennas
use providing the industrys only One Size Fits All portfolio of 6, 8, 10 and 12-Port antennas in the same
single form factor.
The acquisition of Quintel is consistent with the Cirtek Group's positioning to expand its business portfolio
vertically and to compete in high-growth market segments, such as wireless communication. By moving up
the value chain, the Company will be able to accelerate its revenue trajectory and improve profit margins.
The transaction also complements the Group's wireless product portfolio since Cirtek's subsidiary, CATSI,
is already a leading independent global manufacturer of RF, microwave, and millimeterwave radio systems,
deploying over 1.5 million radio units and systems worldwide.
With the Cirtek Group as the sole Contract Manufacturer of Quintel, the acquisition will bring about
significant synergies through value engineering, research and development collaboration as well as cost
reduction, resulting in high-quality, reliable and cost-competitive products.
Cirtek Advanced Technologies and Solutions, Inc.
CATSI offers a broad range of microwave products that go into various applications. The end application
covers microwave/wireless solutions for carrier and private data networks catering mobile backhaul, service
provider, education, enterprise, government/municipalities and healthcare.
The following are CATSI' microwave products:
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1. CTT Out Door Unit (ODU) - The CTTH ODU is available in 6L, 6U, 7GHz, 8GHz, 11GHz, 13GHz,
15GHz, 18GHz, 23GHz, 26GHz, 28GHz, 32GHz and 38GHz. The CTT ODU supports QPSK to 256QAM
modulation and 7MHz to 56MHz channel bandwidth.
2. Indoor Radio Frequency Unit (IRFU) - The IRFU is available in L6, U6, 7GHz, 8GHz, and 11GHz
frequency bands. The channel spacing supported for North American ANSI rates is between 3.75 MHz and
60 MHz. The channel spacing supported for ETSI rates is between 7 MHz and 56 MHz.
3. Outdoor Internet Protocol Radio (OIPR) - The OIPR is available in 6L, 6U, 7GHz, 8GHz, 11GHz, 13GHz,
15GHz, 18GHz, 23GHz, 26GHz, 28GHz, 32GHz and 38GHz. The supported modulation is QPSK to
256QAM. The channel spacings supported for North American ANSI rates is between 10MHz and 50 MHz.
The channel spacings supported for ETSI rates are 7MHz, 14MHz, 28-30MHz, 40MHz and 56MHz.
4. FLEX4G-Ultra High Availability (UHA) - Flex4G-UHA-UHA operates in the 71-76/81-86 GHz frequency
range in compliance with ECC/REC 05/07 Recommendations and is subject to use based on each EU
member countrys individual regulations for operation in this band. The FLEX4G-UHA uses Binary Phase
Shift Keying (BPSK) modulation and supports a maximum data rate of 1,000 Mbps in a 1,250 MHz
channel.
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CATSI Manufacturing Process Flow
CATSI assembles and tests microwave products at its manufacturing complex located on a 12,740 square
meters property in Bian, Laguna. It currently leases the property from Cirtek Land Corporation and Cayon
Holdings, Inc., both of which are majority owned by one of the Companys directors, Nelia T. Liu. The
manufacturing facility is composed of two buildings, with a total floor area of 152,000 square feet.
The figure below illustrates the typical manufacturing process flow for the production of microwave products:
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The manufacturing process starts with business and product development. The business development
pertains to a) Request for Quote (RFQ) from customer; and b) customer approval. Once the customer
approves the quote, product development proceeds. The product development pertains to a) New Product
Introduction (NPI) and b) bill of materials selection. During NPI, the factory will qualify the product and the
process (to manufacture the product). The NPI process is considered completed once critical processes
are proven capable and qualification units are produced and tested for reliability internally and or by the
customers. If NPI is successful, the bill of materials is finalized. This includes the product BOM, fixtures and
packaging. Mass production follows.
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The fundamental assembly process starts with a Printed Circuit Board Assembly (PCBA). Solder paste is
applied to the Printed Circuit Board (PCB), followed by placement of components during SMT pick and
place. The populated board is then loaded to the reflow oven for solder paste curing. After the oven reflow,
the board undergoes Automatic Optical Inspection (AOI). All boards with reject (assembly rejects, i.e.
missing components, wrong part mounted, tombstone, insufficient solder, mis-oriented, tilted, etc.) during
AOI are reworked. All boards without rejects proceed to 2nd operation or manual soldering (if required).
Some modules/sub-assembly boards from PCBA undergo Microwave Integrated Circuit process (MIC).
During this process, a component (MMIC) is attached or mounted to the board with epoxy, either manually
or automated. The board is then cured to the required temperature depending on the type of epoxy used.
Wirebond/gapweld is performed depending on the required assembly drawing. Inspection follows to ensure
conformance to the assembly drawing.
The modules/sub-assembly boards will then undergo test and tune (if required). All passing modules are
then integrated to form the ODU (final product) during Top level assembly. System level testing follows
(Calibration and Parametric test, Bit Error Rate (BER) Test, etc.). The ODUs should conform to the
specifications set by the customer.
Finished products are then packed per customer specifications and shipped to the intended destination.
The figure below illustrates the typical manufacturing process for the production of multiport antennas:
CATSI Customers
CATSIs major customer is REMEC, which contributes approximately 95% of its revenues. REMEC holds
the relationship with the large names in the industry, which carry the demand for CATSIs products and
technology. In order to reduce the concentration risk of a single major customer, CATSI has been actively
seeking business opportunities with new potential customers.
Most of the Cirtek Groups customers have been clients of the company for more than 10 years. For most
of these clients, no formal supply or manufacturing contract is executed, and the orders are governed by
purchase orders which provide the specification of the products to be sold, delivery schedule and terms of
payment, among others. Customers are required to submit order forecasts ranging from 3-6 months, which
the Company uses to project its supply requirements. Depending on the relationship with the particular
customers, payment terms can be on a cash-on-delivery basis or credit term of between 30 to 45 days.
CATSI Competition
The Company's competitors in the RF/Satcom EMS space include large OEMs with international presence
such as Benchmark Electronics, Plexus, Flextronics, and MTI Electronics. Among the Company's local
competitors for certain product lines are Ionics and IMI.
The Company believes is competitive strength lies in its ability to provide complete turnkey solutions for
complex, box build electronic and microwave products. The Company also believes it has unique
RF/microwave expertise to deliver vertically integrated products from components to modules and system
levels.
Quintel Corporation
Founded in 2007, Quintel designs, develops and delivers advanced high efficiency, high performance
antenna solutions that allow mobile operators to increase efficiency, enhance quality-of-service and reduce
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costs. The companys core technology, QTilt, which provides variable linear phase slope across the
antenna array and as such, increases site output without expanding the site footprint. The company
corporate offices in Rochester and New York and San Jose California and its sales office is located
Bukinghamshire in the United Kingdom.Quintels team of seasoned professionals understand tower tops
better than anyone else in the industry and have pioneered some of the most advanced solutions in the
marketplace today. Quintel delivers tremendous value to the industrys leading operators and OEMs, as
well as a robust ecosystem of technology and channel partners, across the globe
Quintel is radically transforming wireless infrastructure with feature-rich antenna technologies that make
networks more efficient and more profitable. An innovator in low-impact and high-output solutions, Quintel
simplifies rollout complexity with practical antenna solutions that quickly boost capacity and coverage within
diverse heterogeneous networks. Quintels innovative MultiServ and SONwav product lines enable mobile
operators to quickly and easily grow their networks and not their budgets.
The following are Quintels antenna products lines:
1. MultiServ - Single Antenna - Multiple Frequency Bands
Under the MultiServ brand, Quintel sells Multi-Band/ Multi-Port Antennas which are designed to maximize
site utilization without compromising site design and network optimization freedoms. This product offers
independent tilt for different bands for different arrays while supporting up to 4x4 MIMO at high-bands. The
technology of Multiserv also minimizes Passive Intermodulation interference and supports different access
technologies (4G, LTE, 3G, 2G).
Space Efficient Tower Solutions

PIM Efficient Solutions
Key Highlights of MultiServ product line:
Smallest form factor (12 wide x 4 / 6 / 8 lengths)

Advanced aerodynamic design reduces wind loading
Field proven best-in-class azimuthal roll-off (C/I) RF performance
Independent tilt-per-band eliminates band combiners
Most reliable / all internal Direct Connect Remote Electrical Tilt (RET) design
Highest quality in the industry used at both tier-1 U.S. carriers nationally
AISG over RF capability
Broad portfolio with Hexports and Octoports in 65 and 45 and 10 / 12 port antennas
Worlds only 12 port antenna 12 wide x 72 or 96 length with 6 high-band arrays
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2. SONWav - Directional Antenna Passive Real-Time Beamforming
Through its SONWav brand, Quintel provides Passive Real-Time Elevation Beamforming Antennas which
increases throughput and spectral efficiency at low spectrum bands in a single slimline antenna. This
product also offers route to double MIMO freedoms.
Spectrally Efficient Tower Solutions
Key Highlights of MultiServ product line:
SONWav technique designed for Low-Band Serice 700, 800, 850MHz

Allows Downlink to be Tilt optimized with Power Limited Uplink Services (VolTE)
Mitigates Uplink Interference when using IRC in Baseband
Maximizes Uplink MCS, SINR, CQI and Throughput
SonWav also has 4x1695-2400MHz Ports (as 2x independent Tilts)
Optimized Azimuth Patters as per MultiServe Family
Optimized Rodome&Windload as MultiServe Family
Quintel Manufacturing Process Flow
Cirtek assembles and tests antenna products at its manufacturing complex located in Laguna Technopark
in Bian, Laguna. The manufacturing facility is composed of three buildings, with a total floor area of 22,300
square feet.
The figure below illustrates the typical manufacturing process flow for the production of antenna products:
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Quintel Customers
Quintels current customers are AT&T and Verizon, large telecommunication corporations operating in
North America. In order to reduce the concentration risk of a few major customer, Quintel has been actively
seeking business opportunities with new potential customers wherein the initial focus will be on large
customers in North America and Europe. The company eventually wants to penetrate the Asian market and
provide its products to telecommunication companies in countries such as Singapore and the Philippines.
Quintel Competition
Quintels competitors in the Antenna space are made of up of a number of well-know companies, most of
which sell multiple products directly or indirectly to carriers. These competitors are either diversified telecom
infrastructure and service companies, telecom system and component vendors or pure-play antenna
makers. Below is a diagram of the competitive landscape of the industry:
Quintel Product Development (Research and Development)
The figure below illustrates the New Product Development process within Quintel:
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Risks related to CEIC,CATSI and Quintel
For a more detailed discussion of the major risks pertaining to CEIC,CATSI and Quintel, please refer to the
section on Risk Factors.
Awards and recognition
The Cirtek Group has been presented with several awards by its customers. The table below lists some of
the awards and certifications garnered by the Cirtek Group in recent years:
Award Awarding Body Year

For Cirtek Electronics Corporation
Semiconductor Assembly and Test Supplier of the Year Bourns, Inc 2016
Best New Product Introduction Cambridge Semiconductor (Camsemi) 2013
Plaque of Appreciation
Success on New Product Introduction Camsemi 2012
Technology Partner Award Camsemi 2010
Most Improved Subcontractor Award Supertex, Inc. 2009
Top Ranking Subcontractor Triquit Semiconductor 2008
Excellent Partner Award Sunpower Corp. 2008
Excellence in Delivery and
Service Award WJ Communications 2008
Delivery and Service Award International Rectifier 2006
For CATSI
Silver Core Partner Award Huawei Technologies Co. Ltd 2011
Gold Core Partner Award Huawei Technologies Co. Ltd 2010
Silver Core Partner Award Huawei Technologies Co. Ltd 2009
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Marketing
The Company appoints exclusive and non-exclusive sales agents around the globe to promote its products
and services. These agents help promote and maintain strong relationships by working closely with
customers to address and resolve quality issues and communicate timely responses to specific
requirements and delivery issues. The Company through its subsidiaries currently maintains a sales
director in the USA and sales agents in the USA, Europe and Asia.
Cirtek also performs marketing research for technology development by working closely with its customers
through collaboration, conducting surveys and gathering market trends to keep the Company abreast of
new packaging techniques and product introductions.
Suppliers
Direct materials used by the Company in the manufacturing process are leadframes, molding compound,
wires (gold and copper) and epoxy adhesives. Silicon wafers are provided by Cirteks customers.
These direct materials are sourced abroad, mainly from Hongkong, Singapore, Malaysia and Korea.
Shipment is mostly by air, except for the molding compound, which is by sea because of its weight. In order
to mitigate the risk of shortage of these direct materials, the Company has at least two suppliers for each
material. The table below lists the Companys major suppliers for each direct material as of the date of the
Preliminary Prospectus:
CEC
Direct Material Major Suppliers

Lead frames -Rokko Leadframes Pte Ltd
-ASM Technology Singapore Pte Ltd., Singapore
-Poongsan Microtec Philippines.
-PSMC Co. Ltd. , Korea
-Dai Nippon Printing Co. Ltd
-Dongguan Possehl SEG Elec. Co. Ltd.,China
-QPL Limited, Hongkong.
Moulding Compound -Sumitomo Bakelite Singapore Pte.Ltd, Singapore.
-Panasonic Electric Works Electronic Materials
-Shinetsu
-Hitachi Chemical Asia Pacific Pte. Ltd, Singapore
Epoxy -Ablestik ( Shanghai) Ltd, China
-Henkel Corporation, USA
-Sumitomo, Japan
Wires -Hereaus Oriental Hitec Co. Ltd, Korea.
-Heraeus Materials Malaysia SdnBhd
CATSI
Items Major Supplier
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Adaptor / Conectors for Changzhou Amphenol
PIM source
Radome support -- UBB 8 New-First Plastics, Co., Ltd.
Port; U-Pin rail; Motor
assembly cover
Dual high-band diplexer; Pivotone Communication Technologies
BRKT (LTE700/Cellular
850
Mounting kit; lightning rod; Suzhou Dingshan Precision Mfg Co., Ltd.
connector plate; M6
fixings, UBB, BIA
Material Agreements
The financing and credit facility agreements discussed below are subject to representations and
warranties, covenants and events of default standard for similar agreements.
1. Note Facility Agreement with Metropolitan Bank & Trust Company
On December 18, 2014, the Company entered into a Note Facility Agreement with Metropolitan Bank &
Trust Company (Metrobank) as Initial Noteholder, Metropolitan Bank & Trust Company Trust Banking
Group as Facility Agent and Paying Agent, and First Metro Investment Corporation as Arranger. The
Company was authorized to constitute and issue corporate notes in the aggregate principal amount of
US$10 million (the Notes). The Company used the net proceeds of the issuance of the Notes to finance
future strategic acquisitions and for general corporate requirements. The Notes were first issued on
December 22, 2014 or such other date as may be agreed upon in writing (the Issue Date), while the
maturity date is the day following the 5th anniversary of the issue date (the Maturity Date). The Company
will repay 30% of the loan in 12 equal consecutive quarterly installments in the amount equivalent to 2.5%
of the loan, commencing at the end of the 5th quarter until the end of the 16th quarter from the Issue Date.
The Company will repay the remaining 70% of the loan in four equal consecutive quarterly installments in
the amount equivalent to 17.5% of the loan commencing at the end of the 17th quarter from the Issue Date
until the Maturity Date.
2. Note Facility Agreement with BPI
On September 20, 2016, the Company entered into a Note Facility Agreement with Bank of the Philippine
Islands as Initial Noteholder, Bank of the Philippine Islands Asset Management and Trust Group as
Facility Agent and Paying Agent, and BPI Capital Corporation as Arranger. The Company was authorized
to constitute and issue corporate notes in the aggregate principal amount of US$30 million (the Notes).
The net proceeds of the issuance of the Notes will be used by the Company for capital expenditures,
including the expansion of the Issuers production facilities, to refinance existing debt obligations and for
working capital requirements. The Issue Date is on September 21, 2016 or such other date as may be
agreed upon in writing, while the Maturity Date is the day following the 5 th anniversary of the Issue Date.
The Company will repay 30% of the loan in 12 equal consecutive quarterly installments in the amount
equivalent to 2.5% of the Loan, commencing at the end of the 5th quarter until the end of the 16th quarter
from the Issue Date. The Company will repay the remaining 70% of the loan in four equal consecutive
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quarterly installments in the amount equivalent to 17.5% of the loan commencing at the end of the 17th
quarter from the Issue Date until the Maturity Date.
3. Credit Facility and Bridge Funding with BPI
On May 17, 2017, the Company entered into a revolving promissory note line with BPI amount to 305
million. The term of the loan is one year.
On July 31, 2017, BPI extended bridge funding in the amount of US$20 million, with a term of one year, to
be used by the Company in the acquisition of Quintel. On or before maturity, the loan will be converted to
a corporate notes facility.
4. Credit Facility with Security Bank Corporation
On November 7, 2016, Security Bank Corporation (Security Bank) approved the renewal of the
Companys credit facilities as follows: loan line of US$10 million, domestic bills purchase line of US$10
million, settlement risk line of US$400,000 and pre-settlement risk line of US$300,000.
On August 4 and 9, 2016, the Company executed two Promissory Notes in favor of Security Bank for the
amount of US$3 million. Under the terms of the Promissory Notes, the Company will pay in equal monthly
principal payments amounting to 750,000 starting November 2, 2016 until January 26, 2017 for the first
loan, and November 7, 2016 until February 3, 2017 for the second loan, with interest per annum payable
periodically as determined by Security Bank.
The Company executed another Promissory Note on August 11, 2016, for the amount of US$4 million. The
Company will pay in equal monthly principal payments amounting to 1 million starting November 9, 2016
until December 9, 2016 and full payment on January 6, 2017 with interest per annum payable periodically
as determined by Security Bank.
In case certain stipulations under the Promissory Notes are not met by the Company, a past due interest
will be charged at the prevailing rate in addition to a penalty fee of 24% per annum.
5. Credit Facility with Union Bank of the Philippines
On July 31, 2017, the Company executed a Promissory Note in favor of Union Bank of the Philippines
(Union Bank) in the aggregate amount of US$42.75 million, with an interest rate per annum adjustable
every 30 days, which will mature on October 30, 2017.
6. Credit Facility with RCBC
On September 4, 2017, RCBC approved the renewal of the credit facilities for the Company, CEC and
CATSI as follows: loan line of US$30 billion, clean term loan of US$30 million, omnibus line of US$25, clean
loan line (bridge facility) of US$4.643 million, clean term loan of US$4.643 million, FX settlement line of
US$10 million, FX pre-settlement risk line of US$10 million, and corporate credit card line of 5 million.
7. Credit Facility with China Banking Corporation
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On April 4, 2017, China Banking Corporation (China Bank) approved an omnibus line and domestic bill
purchase Line in favor of the Company, CEC and CATSI. The lines shall be effective until March 31, 2018.
The omnibus line consists of a loan line, LCTR line, and a pre-settlement risk line totaling US$10 million.
Each of the Company, CEC and CATSI will sign as co-maker or co-borrower on all availments under the
credit facility. The domestic bills purchase line, with a total amount of 50 million, shall be available to CEC
and CATSI.
8. Quintel Acquisition Agreement and Plan of Merger
On July 31, 2017, the Company entered into an Agreement and Plan of Merger under which the Company,
through its subsidiary CEIC and the latters subsidiary Cirtek Corporation, a Delaware corporation (Cirtek
Delaware), will acquire 100% of Quintel Cayman Ltd. (Quintel Cayman).
The transaction was structured as a reverse triangle merger whereby the Company established Cirtek
Cayman Ltd. to merge with Quintel Cayman, with the latter as the surviving corporation. Pursuant to the
transaction, all outstanding shares, warrants, and stock options in Quintel Cayman were converted to a
right to receive the consideration from the Company and Cirtek Delaware. As a result of the merger, Quintel
Cayman will be a wholly-owned subsidiary of Cirtek Delaware. The memorandum of association and articles
of association of Quintel Cayman as surviving company shall be amended to conform to the organizational
documents of Cirtek Cayman Ltd.
The Company acquired Quintel for at least USD 77 million, subject to the adjustments in the pre- and post-
closing statements, setting forth the different amounts comprising the total consideration, prepared by
Quintel Cayman and the Company, which statements will be finalized within 60 to 90 days from July 31,
2017.
On August 4, 2017, the Assistant Registrar of Companies for the Cayman Islands issued a Certificate of
Merger stating that the companies have merged effective on said date.
Employees
As of 30 June 2017, the Cirtek Groups manpower complement numbered at 2,822.
Position Total
Managers and Executives 55
Engineers 92
Administration 83
Other Support Groups 402
Rank and File 692
Agency/Contractual 1,498
Total 2,822
Contractual employees of the Company are primarily involved in mechanical functions in the production
lines. Employees holding critical or highly technical functions such as management and oversight of the
production process, which include engineers and key managers, are regular employees of the Company.
133
The Company does not expect to significantly increase its manpower requirements in the next twelve
months.
Management-Employee Relations
The Cirtek Group is not unionized. However, to foster better employee-management relations, the Cirtek
Group has a Labor Management Council (LMC) composed of committees with representatives from both
labor and management. These committees include the committee on employee welfare and benefit,
employee cooperative committee, employee discipline committee and sports and recreation committee,
among others.
LMCs are established to enable the workers to participate in policy and decision-making processes in
establishment, in so far as said processes will directly affect their rights, benefits, and welfare, except those
which are covered by collective bargaining agreement or are traditional areas of bargaining. The scope of
the council/committees functions consists of information sharing, discussion, consultation, formulation, or
establishment of programs or projects affecting the employees in general or the management.
There is an existing agreement between CEC and the United Cirtek Employees Association, entitled
"Collective Bargaining Agreement", pertaining to minimum salary, benefits, emoluments, security of tenure,
and other terms and conditions of employment. CATSI does not have a similar agreement with its
employees.
Contractual Employees
Approximately 53% of the Cirtek Group's workforce consists of contractual employees (direct employees
of the Group's contractors).
The 696 contractual employees (as of 30 June 2015) are entitled to all the statutory employment rights and
privileges vis--vis their direct employer, the contractor/agency.
Properties
The Company, through its subsidiary, owns the manufacturing plants in the Laguna Technopark as well as
machinery such as bonder, auto test handler, optical inspection system, wafer back grinder, mold set, SMT
equipment, MIC epoxy dispense, die attach, high-speed wire bonders, automated test stations, and other
machinery necessary for the manufacture, assembly and testing of semiconductors and broadband
wireless products. All of these properties are free and clear of liens, encumbrances, and other charges, and
are not subject of any mortgage or other security arrangement.
CHPC does not own land. Thus, it entered into a lease arrangement with CLC and Cayon to lease the land
where the manufacturing facility is located. The manufacturing facility is composed of two buildings, with a
total floor area of 152,000 square feet and is shared by CEC and CATSI.
The leases with CLC and Cayon will expire on 2021 but are renewable upon mutual agreement of the
parties. The Company does not anticipate any issues with the lease renewals.
The Company does not expect to acquire new properties or enter into new leases in the next twelve months.
Please refer to the related discussion on the leases under Related Party Transactions - Transactions with
CLC and Cayon on page 152 of the Prospectus.
134
Intellectual Property and Trademarks
Through its subsidiary Quintel, the Company has an Intellectual Property and Trademark Portfolios a
summary of which can be seen below:
Intellectual Property
Trademarks Registered
Trademark Description
Quintel Registered Trademark (USA and European Community)
Multiserv Trademark of Quintel Technology Limited
QTilt Trademark of Quintel Technology Limited
SONWav Trademark of Quintel Technology Limited
New Dimensions in Wireless Trademark of Quintel Technology Limited
Research and Development
135
Research and development work is performed by a team of over 100 experienced engineers with skills
developed internally and learned from previous work experiences. Skills are brought in through hiring when
necessary while training is a continuing concern to hone the skills of the technical staff.
The Company, through CEC and CATSI, has successfully cooperated with customers on many projects,
co-developing with them new technology that are customer specific that will ensure continuing engagement
by the customers. This approach ties up customer with the Company over a long period of time generating
revenues from a captive market.
The Companys technology roadmap covers material development and process improvement to improve
on cost and to help maintain the margins. The latest materials are identified to meet ever increasing
demand for higher quality and lower cost. These are product-application specific that are jointly co-
developed with the customers bringing benefits to both parties.
Although the Company engages in research and development activities, the expenses incurred by the
Company incurred in connection with these activities are not material.
Government Approval and Permits
All government approvals and permits issued by the appropriate government agencies or bodies which are
material and necessary to conduct the business and operations of the Company, were obtained by the
Company and are in full force and effect.
The list of the permits and licenses of the Company and its subsidiaries are set out below:
Title of Permit Date of Validity/

Issuing Agency Status/Remarks
/License Issuance Expiration Date
For Cirtek Holdings Philippines Corporation
SEC Certificate of 10 February Valid for the Valid and subsisting.
Incorporation 2011 entire corporate
term
LGU of Binan, Business Permit 21 January 31 December Valid and subsisting.
Laguna 2017 2017
BIR Certificate of 11 March None stated Valid and subsisting.
Registration 2011
For Cirtek Electronics Corporation
SEC Certificate of 31 May 1984 Valid for the Valid and subsisting.
Incorporation entire corporate
term
BIR Certificate of 23 October None stated Valid and subsisting.
Registration 2002
PEZA Certificate of 24 March None stated Valid and subsisting.
Registration 1998
PEZA Certification 9 January 31 December This lists down
2017 2017 CECs incentives
under PEZA. Valid
and subsisting.
LGU of Binan, Business Permit 21 January 31 December Valid and subsisting.
Laguna 2017 2017
136
DOLE Approved Application 04 February None stated Valid and subsisting.
for Registration 2003
SSS Certificate of 20 January None stated Valid and subsisting.
Membership 1999
PhilHealth Certificate of 11 March None sated Valid and subsisting.
Registration 2011
HDMF Certificate 24 March None stated Valid and subsisting.
2011
DENR-EMB Environmental 15 March None stated Valid and subsisting.
Regional Office Compliance Certificate 2017
IV
LLDA Clearance for 9 June 2017 None stated Valid and subsisting.
Development Plan/
Program/Project in the
Laguna de Bay
Region
LLDA Discharge Permit 3 January 15 January 2020 Valid and subsisting.
2017
Bureau of Certificate of 7 August 8 August 2017 Valid and subsisting
Customs Registration 2017
Permit to Operate Air 17 October 29 October 2021 Valid and subsisting
DENR-EMB Pollution Source and 2016
Control Installations
For Cirtek Advanced Technologies and Solutions, Inc.
18 February None stated.
SEC Amended License Valid and subsisting.
2015
Certificate of Filing of None stated.
18 February
SEC Substitution of Valid and subsisting.
2015
Resident Agent
Certificate of None stated
BIR 11 May 2015 Valid and subsisting.
Registration
Certificate of 16 March None stated
PEZA Valid and subsisting.
Registration 2015
20 February 31 December
Certifications (Nos.
2017/ 17 2017
PEZA 2017-1083, Valid and subsisting.
February
2017/1801)
2017
LGU of Binan, 20 January 31 December
Business Permit 2017 Valid and subsisting.
Laguna 2017
DOLE Regional Registry of None stated
22 May 2015 Valid and subsisting.
Office IV-A Establishment
Certificate of 27 August None stated Valid and subsisting
SSS
Registration 2015
137
Examined
Certificate on
Registration No. 04-
0988479-1, vis--vis
Employer Data
Change Request to
change name from
Remec Broadband
Wireless
International to
CATSI
Certificate of None stated
PhilHealth 30 April 2015 Valid and subsisting.
Registration
13 March None stated
HDMF Certification Valid and subsisting.
2015
Clearance for None stated
Development Plan/
LLDA Program/Project in the 13 June 2012 Valid and subsisting.
Laguna de Bay
Region
Permit to Operate Air
17 October
DENR-EMB Pollution Source and 25 October 2021 Valid and subsisting.
2016
Control Installations
Legal Proceedings
There are no pending legal cases against the Company, its subsidiaries, and their respective management
that will have immediate material effect on the financial position and operating results of the Company.
138
REGULATORY AND ENVIRONMENTAL MATTERS
Philippine Economic Zone Authority
The PEZA is an attached agency to the Department of Trade and Industry and is tasked to promote
investments, extend assistance, register, grant incentives to, and facilitate the business operations of
investors in export-oriented manufacturing and service facilities located inside selected areas throughout
the country proclaimed by the President of the Philippines as PEZA Special Economic Zones. It oversees
and administers incentives to developers/operators and locators in Special Economic Zones.
Entities registered with the PEZA are entitled to fiscal and non-fiscal incentives. Fiscal Incentives include
income tax holiday; tax and duty free importation of raw materials, capital equipment, machineries and
spare parts; VAT zero rating; exemption from payment of local government imposts, fees, licenses, and
taxes; and exemption from expanded withholding tax. Non-fiscal incentives include simplified import-export
procedures; and special non-immigrant visa with multiple entry privileges for certain officers and employees.
PEZA also extends visa facilitation assistance to foreign nationals and their spouses and dependents.
PEZA registered entities are required to maintain distinct and separate books for its operations inside the
Special Economic Zones and are mandated to submit financial and other reports/documents to PEZA.
Below are some of the periodic reports/documents required to be submitted to PEZA and their respective
due dates:
Types of Report Due Date

Quarterly Reports 45 days after the end of the
quarter
Annual Report (For Developer/Operator Enterprises) 90 days after the end of the
accounting period
Audited Financial Statements (For Developer/Operator Enterprises) 30 days after filing with BIR
Quarterly Income Tax Returns(For Developer/Operator Enterprises) 15 days after filing with BIR
Annual Income Tax Returns (ITR) (For Developer/Operator Enterprises) 30 days after filing with BIR
Breakdown/Schedule of Sales per Activity Together with AFS & Annual
ITR
Breakdown/Schedule of Other Income Together with AFS & Annual
ITR
Data on Revenues and Taxes Paid Together with AFS & Annual
ITR
Commission on Audit (COA) Annual Audit Report Audit Certificate (For After the end of the year
Developer/Operator owned by the Government)
Change of Corporate Name & Equity Ownership 30 days after the said
change
As PEZA-registered entities, CEC and CATSI are required to submit the periodic reports described above
to PEZA. They are also required to submit quarterly, semi-annual and annual reports to the DENR as part
of their ECC requirements. The failure to comply with these reports and with any other requirements or
regulations of these government agencies could expose CEC and CATSI to penalties and the revocation
of their respective registrations.
CEC and CATSI ensure compliance with these requirements by assigning dedicated personnel to monitor,
prepare the necessary filings and liaise with the relevant government agencies.
139
Environmental Laws
Presidential Decree No. 1586 established the Environmental Impact Statement (EIS) System which is
concerned primarily with assessing the direct and indirect impacts of a project or undertaking to the quality
of the environment and ensures that these impacts are addressed by appropriate environmental protection
and enhancement measures. The EIS system successfully culminates in the issuance of an Environmental
Compliance Certificate (ECC).
The ECC serves as a government certification based on the representations of the proponent that: (i) the
proposed project or undertaking will not cause a significant negative environmental impact; (ii) that the
proponent has complied with all the requirements of the EIS system and; (iii) that the proponent is
committed to implement its approved environmental management plan in the EIS or, Initial Environmental
Examination (IEE). The ECC also contains specific measures and conditions that a project proponent
must undertake before, during, and in some cases, at the abandonment of a project.
Development projects that are classified by law as environmentally critical or projects within statutorily
defined environmentally critical areas are required to obtain an ECC prior to commencement. The DENR,
through its regional offices or through the Environmental Management Bureau (the EMB), determines
whether a project is environmentally critical or located in an environmentally critical area. As a pre-requisite
for the issuance of an ECC, an environmentally critical project must submit an EIS to the EMB while a
project in an environmentally critical area is generally required to submit an IEE to the proper DENR regional
office. In the case of an environmentally critical project within an environmentally critical area, an EIS is
required. The construction of major roads and bridges are considered environmentally critical projects for
which EIS and ECC are mandatory.
The EIS refers to both the document and the study of a projects environmental impact, including a
discussion of the direct and indirect consequences to human welfare and the ecological as well as
environmental integrity. The Initial Environmental Examination refers to the document and the study
describing the environmental impact, including mitigation and enhancement measures, for projects in
environmentally critical areas.
While the terms and conditions of an EIS or an IEE may vary from project to project, as a minimum it
contains all relevant information regarding the projects environmental effects. The entire process of
organization, administration, and assessment of the effects of any project on the quality of the physical,
biological, and socio-economic environment as well as the design of appropriate preventive, mitigating, and
enhancement measures is known as the EIS System. The EIS System successfully culminates in the
issuance of an ECC. The issuance of an ECC is a Government certification that the proposed project or
undertaking will not cause a significant negative environmental impact; that the proponent has complied
with all the requirements of the EIS System; and that the proponent is committed to implementing its
approved Environmental Management Plan in the EIS or, if an IEE was required, that it shall comply with
the mitigation measures provided therein.
Project proponents that prepare an EIS are required to establish an Environmental Guarantee Fund when
the ECC is issued for projects determined by the DENR to pose a significant public risk to life, health,
property, and the environment or where the project requires rehabilitation or restoration. The Environmental
Guarantee Fund is intended to meet any damage caused by such a project as well as any rehabilitation
and restoration measures. Project proponents that prepare an EIS are required to include a commitment to
establish an Environmental Monitoring Fund when an ECC is eventually issued. In any case, the
establishment of an Environmental Monitoring Fund must not occur later than the initial construction phase
140
of the project. The Environmental Monitoring Fund must be used to support the activities of a multi-partite
monitoring team, which will be organized to monitor compliance with the ECC and applicable laws, rules
and regulations.
CEC and CATSI incur expenses for the purposes of complying with environmental laws that consist
primarily of payments for Government regulatory fees. Such fees are standard in the industry and are
minimal.
CEC is required to obtain the following environmental certifications and permits from the Department of
Environment and Natural Resources Environmental Management Bureau for its operations:
Permit Issuance Expiration

Environmental Clearance Certificate (ECC) 2 Mar. 15, 2017 N/A
Permit to Operate (Air Pollution Source & Control Installations) Oct. 17 2016 Oct. 29, 2021
CATSI is required to obtain the following environmental permits for its operations:
Permit Issuance Expiration

Environmental Clearance Certificate (ECC) Oct. 11, 2011 N/A
Permit to Operate (Air Pollution Source & Control Installations) Oct 17, 2016 Oct. 25, 2021
All development projects, installations, and activities that discharge liquid waste into and pose a threat to
the environment of the Laguna de Bay region are also required to obtain a discharge permit from the Laguna
Lake Development Authority (LLDA). CEC's current discharge permit will be valid until July 20, 2016.
Nationality Restrictions
The Philippine Constitution limits ownership of land in the Philippines to Filipino citizens or to corporations
the outstanding capital stock of which is at least 60% owned by Philippine Nationals. While the Philippine
Constitution prescribes nationality restrictions on land ownership, there is generally no prohibition against
foreigners owning buildings and other permanent structures. However, with respect to condominium
developments, the foreign ownership of units in such developments is limited to 40%.
Republic Act No. 7042, as amended, otherwise known as the Foreign Investments Act of 1991, and the
Tenth Regular Foreign Investment Negative List, provide that certain activities are nationalized or partly-
nationalized, such that the operation and/or ownership thereof are wholly or partially reserved for Filipinos.
Under these regulations, and in accordance with the Philippine Constitution, ownership of private lands is
partly-nationalized and thus, landholding companies may only have a maximum of 40% foreign equity.
The Company does not currently own real estate. However, if the Company acquires real estate in the
future, it would be subject to nationality restrictions found under the Philippine Constitution and other laws
limiting land ownership to Philippine Nationals. The term Philippine National as defined under the R.A.
2An Environmental Clearance Certificate (ECC) expressly states that it is a planning tool and not a permit.
It remains in effect provided the company complies with conditions stipulated under the ECC, and therefor
has no expiration date. The DENR/EMB monitors the company/project periodically to ensure compliance
with stipulations in the ECC.
141
No. 7042, as amended, shall mean a citizen of the Philippines, a domestic partnership or association wholly-
owned by citizens of the Philippines or a corporation organized under the laws of the Philippines of which
at least 60% of the capital stock outstanding and entitled to vote is owned and held by citizens of the
Philippines, or a corporation organized abroad and registered to do business in the Philippines under the
Philippine Corporation Code of which 60% of the capital stock outstanding and entitled to vote is wholly-
owned by Filipinos or a trustee of funds for pension or other employee retirement or separation benefits,
where the trustee is a Philippine National and at least 60% of the fund will accrue to the benefit of Philippine
Nationals.
Labor Code
The Labor Code recognizes subcontracting arrangements, whereby a principal (i.e. CEC or CATSI, as the
case may be) puts out or farms out with a contractor the performance or completion of a specific job, work
or service within a definite or predetermined period, regardless of whether such job, work or service is to
be performed or completed within or outside the premises of the principal. Such arrangements involve a
"trilateral relationship" among: (i) the principal who decides to farm out a job, work or service to a contractor;
(ii) the contractor who has the capacity to independently undertake the performance of the job, work, or
service; and (iii) the contractual workers engaged by the contractor to accomplish the job, work, or service.
On March 16, 2017, the Department of Labor and Employment (DOLE) issued DOLE Department Order
No. 174-17 or Rules Implementing Articles 106 to 109 of the Labor Code, As Amended (D.O. No 174-17),
under the principle that non-permissible forms of contracting and subcontracting arrangements undermine
the constitutional and statutory right to security of tenure of workers. D.O. No 174-17 empowered the
Secretary of Labor and Employment to regulate contracting and subcontracting arrangement by absolutely
prohibiting labor-only contracting, and restricting job contracting allowed under the provisions of the Labor
Code. Labor-only contracting refers to arrangement where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job or work for a principal, and the contractor or subcontractor does
not have substantial capital, or the contractor or subcontractor does not exercise the right to control over
the performance of the work of the employee.
The Department Order provides that in the event that there is a finding that the contractor or subcontractor
is engaged in labor-only contracting and other illicit forms of employment arrangements, the principal shall
be deemed the direct employer of the contractor's or subcontractor's employees. Further, in the event of
violation of any provision of the Labor Code, including the failure to pay wages, there exists a solidary
liability on the part of the principal and the contractor for purposes of enforcing the provisions of the Labor
Code and other social legislations, to the extent of the work performed under the employment contract.
The Philippine Labor Code and other statutory enactments provide the minimum benefits that employers
must grant to their employees, which include certain social security benefits, such as benefits mandated by
the Social Security Act of 1997 (R.A. No. 8282), the National Health Insurance Act of 1995 (R.A. No. 7875),
as amended, and the Home Development Fund Law of 2009 (R.A. No. 9679).
Under the Social Security Act of 1997, social security coverage is compulsory for all employees under 60
years of age. An employer is obligated to deduct and withhold from each employee's monthly salary, wage,
compensation or earnings, the employee's contribution, and the employer, for its part, makes a counterpart
contribution for the employee, and remits both amounts to the Social Security System (SSS). This enables
the employees to claim their pension, death benefits, permanent disability benefits, funeral benefits,
sickness benefits, and maternity-leave benefits. The Social Security Act of 1997 imposes penal sanctions
142
if an employer fails to remit the contributions to the SSS. For corporate employers, the penalty is imposed
on its president and members of the board of directors.
The National Health Insurance Act created the National Health Insurance Program (NHIP) to provide
health insurance coverage and ensure affordable and accessible health care services to all Filipino citizens.
Under the law, all members of the SSS are automatically members of the NHIP. pThe NHIP will then
subsidize personal health services required by the employee subject to certain terms and conditions under
the law. The National Health Insurance Act likewise imposes penal sanctions if an employer does not remit
the contributions to PhilHealth. For corporate employers, the penalty is imposed on its president and
members of the board of directors.
The Home Development Fund Law (R.A. No. 9679) or the Pag-IBIG Fund Law, created the Home
Development Mutual Fund (HDMF), a national savings program as well as a fund to provide for affordable
shelter financing to Filipino workers. Coverage under the HDMF is compulsory for all SSS members and
their employers. Under the law, an employer must deduct and withhold 2% of the employee's monthly
compensation, up to a maximum of 5,000.00, and likewise make a counterpart contribution of 2% of the
employee's monthly compensation, and remit the contributions to the HDMF. The Pag-IBIG Fund Law also
imposes penal sanctions if the employer does not remit the contributions to the HDMF.
Philippine Competition Act
R.A. No. 10667, or the Philippine Competition Act (PCA), is the primary competition policy of the
Philippines. It aims to enhance economic efficiency and promote free and fair competition in trade, industry
and all commercial economic activities.
The PCA prohibits and imposes sanctions on:
1. Anti-competitive agreements between or among competitors, which restrict competition as to price,

or other terms of trade and those fixing price at an auction or in any form of bidding including cover
bidding, bid suppression, bid rotation and market allocation and other analogous practices of bid
manipulation; and those which have the object or effect of substantially preventing, restricting or
lessening competition;
2. Practices which are regarded as abuse of dominant position, by engaging in conduct that would
substantially prevent, restrictor lessen competition; and
3. Merger or acquisitions which substantially prevent, restrict or lessen competition in the relevant
market or in the market for goods or services.
Moreover, the parties to a merger, acquisition or joint venture are required to comply with the compulsory
notification requirements of the Philippine Competition Commission (PCC), the agency responsible for the
implementation of the PCA, before consummating the transaction where:
1. In a merger or acquisition of assets, the value of the transaction exceeds One Billion Pesos
(l,000,000,000.00), and the gross revenue and assets of the ultimate parent entity of one of the
parties to the transaction exceeds(Pl,000,000,000.00); or
2. As a result of a proposed acquisition of voting shares of a corporation or of an interest in a non-
143
corporate entity, the acquiring entity, together with its affiliates, would own thirty-five percent (35%)
of the voting shares or shares entitled to profits, or increase the said shareholdings to fifty percent
(50%);
3. In a notifiable joint venture transaction, if either (i) the aggregate value of the assets that will be
combined in the Philippines or contributed into the proposed joint venture exceeds One Billion
Pesos (l,000,000,000.00) or (ii) the gross revenues generated in the Philippines by assets to be
combined in the Philippines or contributed into the proposed joint venture exceed One Billion Pesos
(l,000,000,000.00).
An agreement consummated in violation of the compulsory notification requirement shall be considered

void, and shall subject the parties to an administrative fine of one percent (1%) to five percent (5%) of the
value of the transaction.
Laws on Importation
Republic Act No. 1937 (R.A. No. 1937) or the Tariff and Customs Code of the Philippines provides that all
articles, when imported from any foreign country into the Philippines, shall be subject to duty upon each
importation, even though previously exported from the Philippines, except as otherwise specifically
provided for in this Code or in other laws.
In 2014, the Department of Finance issued DO No. 12-2014 requiring importers to secure an Importer
Clearance Certificate (ICC) from the BIR as a pre-requisite for accreditation with the Bureau of Customs
(BOC). This is the first stage of the accreditation process that will enable the importers to import and
transact business with the BOC. Importers will then present the BIR ICC to the BOC as a final requirement
for accreditation and to be able to enter the customs premises.
The BIR then issued Revenue Memorandum Order No. 10-2014 (RMO 10-2014), which provides for the
requirements and guidelines for ICC applicants, and required ICC applicants to establish a physical and
legitimate presence in the Philippines and to demonstrate compliance with existing tax laws and regulations.
Under BOC Memorandum Order No. 14-2015, or the Revised Regulations for BOC Accreditation of PEZA
Locators, all PEZA locators that have already been registered and approved by PEZA through the Client
Profile Registration System (CPRS) shall be activated immediately by the BOC-Management Information
System and Technology Group (MISTG) after payment of an activation fee of 1,000 and presentation of
the corresponding official receipt and copy of the CPRS Certificate of Registration to MISTG. The
memorandum order was issued with the objective of promoting an effective and efficient customs
management by streamlining and simplifying the BOC accreditation procedure for PEZA locators, thereby
creating a more business and investor-friendly environment.
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
144
The incumbent Directors and Executive Officers of the Company are as follows:
Position Name Age Citizenship

Chairman Jerry Liu 69 Taiwanese
Vice Chairman and President Roberto Juanchito T. Dispo 52 Filipino
Director and Vice President Justin Liu 35 Filipino
Director, Treasurer, Chief Financial
Officer and Compliance Officer Anthony S. Buyawe 49 Filipino
Director Michael Stephen Liu 32 Filipino
Director and Assistant Corporate
Secretary Brian Gregory T. Liu 30 Filipino
Independent Director Ernest Fritz Server 73 Filipino
Independent Director Eduardo Lizares 60 Filipino
Independent Director Hector Villanueva 81 Filipino
Corporate Secretary Tadeo F. Hilado 65 Filipino
Board of Directors and Executive Officers of the Issuer
The overall management and supervision of the Company is vested in its Board of Directors. The
Companys officers and management team cooperate with its Board by preparing relevant information and
documents concerning the Companys business operations, financial conditions and results of operations
for its review and action. At present, the Board consists of nine members, including three independent
directors in accordance with the requirements of the SRC and the SECs New Code of Corporate
Governance for Publicly Listed Companies. All the Directors of the Company were elected at the
Companys annual stockholders meeting held on 26 May 2017 and will continue to hold office until the
next succeeding annual meeting and until their respective successors have been appointed or elected and
qualified.
The Officers were elected by the Board of Directors at the organizational meeting of the Board on 26 May
2017. The Board also elected during the said meeting the chairman and members of the Audit Committee,
the Nominations Committee, and the Compensation Committee.
The following are the business experience/s of the companys Directors for the last Five (5) years (or more):
Jerry Liu, 69 years old was elected as the Companys Chairman and President on February 17, 2011. He
is concurrently President/CEO of CEC, Director of Cirtek Land and Cayon Holdings, Inc. and Chairman of
Silicon Link, Inc., Mr, Liu holds a Bachelor of Science degree in Physics from Chung Yuan University of
Taiwan and an MBA from the University of the East.
Roberto Juanchito T. Dispo, 52 years old was elected Vice Chairman and Director of the Company on
January 4, 2016. Mr. Dispo is also Vice Chairman of Cosco Capital, and sits on the Board of PB Com Bank
and Axa Philippines. Prior to joining the Company, Mr. Dispo was President and Director of First Metro
Investment Corporation. Mr. Dispo holds BSC Economics and Business Management from San Sebastian
College and Pamantasan ng Lungsod ng Maynila, respectively. He also completed Masters in Business
Administration and Masters in Business Economics from Pamantasan ng Lungsod ng Maynila and the
University of Asia & the Pacific, respectively.
145
Justin T. Liu, 35 years old is President and Director of Figaro Coffee Systems, Inc. Mr. Liu graduated from
the De La Salle University with a Bachelor of Science in Business Management and earned his Masters in
Finance from the University of San Francisco in 2006.
Anthony Buyawe, 49 years old was elected as the Companys Treasurer and Chief Financial Officer on
February 17, 2011. He is concurrently the CFO of CEC, CEIC and the Figaro Coffee Company. Prior to
joining the Company, Mr. Buyawe was CFO of ITP Technologies (2003 2005) and SMEDC (2008-2009)
and Senior Director of Ernst and Young (2005-2008). Mr. Buyawe obtained his BA degree from the
University of the Philippines and his MBA from the Asian Institute of Management.
Michael Stephen Liu, 32 years old, was first elected as Director on May 11, 2015. He is currently the
General Manager of CATSI. Mr. Liu obtained his degree in Electronics and Communications Engineering
from De La Salle University in 2007 and is a licensed Electrical Engineer.
Brian Gregory T. Liu, 30 years old, has been the Assistant Corporate Secretary of the Company since
March 2011. He is concurrently a stockholder in CEC, Cirtek Land Corporation, and Turborg Trading. Mr.
Liu trained as an Operations Trainee in Dominos Pizza from 2001 to 2002, then as an Analyst in Evergreen
Stockbrokerage & Securities Inc. from 2003 to 2005. He obtained his degree in Management in Financial
Institutions from De La Salle University in 2009.
Ernest Fritz Server, 73 years old, was elected as an Independent Director of the Company on February
17, 2011 and shall serve as such for one year or until his successor is elected and qualified. Mr. Server
serves as the President of Multimedia Telephony Inc., Vice Chairman of RFM Corporation and a director
of Philippine Township, Inc. Previously, Mr. Server served as Vice Chairman of the Commercial Bank of
Manila, Consumer Bank and Cosmos Bottling Company and President of Philippine Home Cable Holdings,
Inc. and Philam Fund. Mr. Server graduated from the Ateneo de Manila University in 1963 with degree in
Bachelor of Arts degree in Economics and holds an MBA Major in Banking and Finance from the University
of Pennsylvania, Wharton Graduate School.
Eduardo Lizares, 60 years old, was elected as an Independent Director of the Company on May 26, 2017.
He is currently a partner at Padilla Law Office and a Professional Lecturer on Constitutional Law at the
University of the Philippines. He holds a Bachelor of Arts degree for De La Salle University, Bachelor of
Laws degree from the University of the Philippines, and a Master of Laws degree from Harvard Law School,
Harvard University.
Hector Villanueva, 81 years old, was elected as an Independent Director of the Company on May 26,
2017.He held senior positions in both private and public sectors. He was Chairman of the Board of First
Metro Philippine Equity Exchange Traded Fund, Inc., Postmaster General and CEO of Philippine Postal
Corporation, Member of the Advisory Board, First Metro Investment Corporation, and Publisher and Editor-
in-Chief, Sun Star Manila, among others. Mr. Villanueva was also Cabinet Secretary from 1995-1998. Mr.
Villanueva obtained a Bachelor of Science degree in Economics from the London School of Economics and
Political Science, and post-graduate studies from Royal Institute of Bankers, United Kingdom.
Key Officers
Tadeo Hilado, 65 years old, was elected as the Companys Corporate Secretary on February 17, 2011.
Atty. Tadeo is a senior partner at the Angara Abello Concepcion Regala & Cruz law offices. He also serves
as director and corporate secretary of several companies including Cocoa Specialties, Inc., Nissan Motor
Philippines, Inc., Nissan Autoparts Manufacturing Corporation, Sumisetsu Philippines, Inc., and Samsonite
Philippines, Inc., among others. Atty. Tadeo holds a Bachelor of Arts degree from the De La Salle University,
146
Bachelor of Laws degree from the University of the Philippines and a Master of Laws degree from the
University of Michigan.
Family Relationships
As of the date of this Prospectus, family relationships (by consanguinity or affinity within the fourth civil
degree) between Directors and members of the Companys officers are as follows:
Jerry Liu, President, Chief Executive Officer, and Chairman of the Board of Directors, is the father of Justin
T. Liu, Director and Vice-President, Michael Stephen T. Liu, Director, and Brian Gregory T. Liu, Director
and Assistant Corporate Secretary of the Company. Apart from the foregoing, there are no other family
relationships up to the fourth civil degree either by consanguinity or affinity among the directors or officers
of the Company.
Executive Compensation
The aggregate compensation during the last fiscal year and to be paid in the ensuing fiscal year to the
companys 4 most highly compensated officers and to its officers and directors as a Cirtek Group unnamed
is as follows:
Name & Position Year Salary Bonus

Jerry Liu (Chairman) FY P 42.0 million P8.4 million
Roberto Juanchito Dispo (President) 2017(estimated)
Anthony Buyawe (CFO)
Rolando Enriquez (Vice President CATSI)
Jorge Aguilar (President CEC)
Jerry Liu (Chairman) FY 2016 P 40.0 million P 8.0 million
Roberto Juanchito Dispo
Anthony Buyawe (CFO)
Rolando Enriquez (Vice President CATSI)
Jorge Aguilar (President CEC)
Aggregate compensation paid to all officers P48 million P12.0 million

and directors as a group unnamed
Aggregate compensation paid to all officers FY 2015 P 45.0 million P 10.0 million
and directors as a group unnamed
Compensation of Directors
Under the By-Laws of the Company, by resolution of the Board, each director, shall receive a reasonable
per diem allowance for his attendance at each meeting of the Board. As compensation, the Board shall
receive and allocate an amount of not more than ten percent (10%) of the net income before income tax of
the corporation during the preceding year. Such compensation shall be determined and apportioned among
directors in such manner as the Board may deem proper, subject to the approval of stockholders
representing at least majority of the outstanding capital stock at a regular or special meeting of the
stockholders.
147
Standard Arrangements and Other Arrangements
There are no other arrangements for compensation either by way of payments for committee participation
or special assignments.
There are no other arrangements for compensation either by way of payments for committee participation
or special assignments other than reasonable per diem. There are also no outstanding warrants or options
held by the Companys Chief Executive Officer, other officers and/or directors.
Employment Contracts, Termination of Employment, Change-in-Control Arrangements
The Cirtek Group has executed employment contract with some of its key officers. Such contracts provide
the customary provision on job description, benefits, confidentiality, non-compete, and non-solicitation
clauses. There are no special retirement plans for executives. There is also no existing arrangement for
compensation to be received by any executive officer from the Company in the event of change in control
of the Company.
Warrants and Options
There are no outstanding warrants and options held by any of the Companys directors and executive
officers.
Involvement in Certain Legal Proceedings of Directors and Executive Officers
None of the Companys directors, nominees for election as director, or executive officers have, in the five
year period prior to the date of this Prospectus: (1) had any petition filed by or against any business of
which such person was a general partner or executive officer either at the time of the bankruptcy or within
a two-year period of that time, (2) have been convicted by final judgment in a criminal proceeding, domestic
or foreign, or have been subjected to a pending judicial proceeding of a criminal nature, domestic or foreign,
excluding traffic violations and other minor offenses, (3) have been the subject of any order, judgment, or
decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, domestic
or foreign, permanently or temporarily enjoining, barring, suspending, or otherwise limiting their involvement
in any type of business, securities, commodities or banking activities, or (4) have been found by a domestic
or foreign court of competent jurisdiction (in a civil action), the SEC or comparable foreign body, or a
domestic or foreign exchange or other organized trading market or self-regulatory organization, to have
violated a securities or commodities law or regulation, such judgment having not been reversed,
suspended, or vacated.
Corporate Governance
The Company has a Manual on Corporate Governance (Manual) which was approved and adopted by
the Board on 28 April 2011 and further revised in 30 May 2017 in compliance with the Code of Corporate
Governance for Publicly-Listed Companies SEC Memorandum Circular No. 19Series of 2016.
The Company's policy on corporate governance is based on its Manual. The Manual lays down the
principles of good corporate governance in the entire organization. The Manual provides that it is the
Boards responsibility to initiate compliance with the principles of good corporate governance, to foster the
148
long-term success of the Company and to secure its sustained competitiveness in a manner consistent with
its fiduciary responsibility, which it shall exercise in the best interest of the Company, its shareholders and
other stakeholders.
The Corporation is committed to the ideals of good corporate governance. In compliance with the SEC
requirement, the Corporation is studying best practices in good corporate governance to further improve
the current corporate governance practices of the Corporation and to develop an efficient and effective
evaluation system to measure or determine the level of compliance of the Board of Directors and top level
management with its Manual of Corporate Governance.
Corporate governance rules/principles were established to ensure that the interest of stakeholders are
always taken into account; that directors, officers, and employees are conducting business in a safe and
sound manner; and that transactions entered into between the Corporation and related interests are
conducted at arms length basis and in the regular course of business. There are no incidences of deviation
from the Corporations Manual of Corporate Governance.
The Corporation has sufficient number of independent directors that gives the assurance of independent
views and perspective.
149
OWNERSHIP
Members of the Liu family, through their control of Camerton, Inc., a private holding company incorporated
in the Philippines, are the majority shareholders of and effectively control the Company. As of 30 June
2017, Camerton, Inc. holds or owns 49.85% of the outstanding common shares and []% of the outstanding
voting Preferred A Shares of the Company.
As of 30 June 2017, Cirteks other principal shareholders was PCD Nominee Corporation at 47.76%. The
following are the top 20 registered holders of the Companys securities as of 30 June 2017:
Nationalit
Stockholder's Name No. of Common Shares % of Total y
1. Camerton, Inc. 208,888,558 49.85% Filipino
2. PCD Nominee Filipino 200,128,327 47.76% Filipino
3. PCD Nominee Non-Filipino 9,865,810 2.35% Others
4. Ambrosio J. Makalintal, Jr. or Maripi
A. Makalintal 94,089 0.02% Filipino
5. Beant Singh Grewal 37,000 0.01% Indian
6. Anna Loraine M. Mendoza 17,500 0.00% Filipino
7. Pio Ma. Victor H. Garayblas 15,000 0.00% Filipino
8. Raymond Alvin M Mendoza 13,100 0.00% Filipino
9. Myra P. Villanueva 2,000 0.00% Filipino
10. Eduardo P. Lizares 1,001 0.00% Filipino
11. Stephen G. Soliven 389 0.00% Filipino
12. Stephen G. Soliven 146 0.00% Filipino
13. Julius Victor Emmanuel D
Sanvictores 145 0.00% Filipino
14. Owen Nathaniel S. Au Itf Li Marcus
Au 106 0.00% Filipino
15. Joselito C. Herrera 100 0.00% Filipino
16. Jesus San Luis Valencia 62 0.00% Filipino
17. Dondi Ron R. Limgenco 11 0.00% Filipino
18. Anthony S. Buyawe 1 0.00% Filipino
19. Roberto Juanchito T. Dispo 1 0.00% Filipino
20. Rafael G. Estrada 1 0.00% Filipino
Security Ownership of Directors and Management
As of 30 June 2017, the following table sets forth security ownership of the Companys Directors and
Officers:
Title of Class Name of Beneficial Owner Direct Indirect Total shares %

Common Jerry Liu 1 208,888,558 208,888,559 49.85%
Common Roberto Juanchito T. Dispo 1 Nil 1 0.00%
Common Justin T. Liu 1 Nil 1 0.00%
Common Anthony S. Buyawe 1 Nil 1 0.00%
Common Michael Stephen Liu 1 Nil 1 0.00%
150
Title of Class Name of Beneficial Owner Direct Indirect Total shares %
Common Brian Gregory T. Liu 1 Nil 1 0.00%
Common Ernest Fritz Server 1 Nil 1 0.00%
Common Eduardo P. Lizares 1,001 Nil 1 0.00%
Common Hector Villanueva 1 Nil 1 0.00%
There is no director or key officer of the Company that directly owns at least 10% of its issued and
outstanding shares of common stock.
Voting Trust Holders of 5% or More
There is no voting trust arrangement executed among the holders of 5% or more of the issued and
outstanding shares of common stock of the Company.
Change in Control
As of the date of this Prospectus, there are no arrangements which may result in a change in control of the
Company.
151
RELATED PARTY TRANSACTIONS
In the normal course of business, the Group has entered into transactions with affiliates. The significant
transactions consist of the following:
a. Advances for operating requirements of CHI, former parent of CEC and CEIC;
b. Rental of land and lease deposit with Cirtek Land Corporation (CLC), an affiliate, where the
manufacturing building 1 and administrative building is situated;
c. Payments and /or reimbursements of expenses made or in behalf of the affiliates; and
d. Rental of land with Cayon Holdings, Inc. (Cayon), an affiliate, where the building 2 of the Group is
situated
The interim consolidated balance sheets and interim consolidated statements of comprehensive income
include the following significant account balances resulting from the above transactions with related parties:
a. Amounts owed to related parties
Transactions Balances as of
Six Months Ended June

30
June 30, December
(Unaudited) 2017 31, 2016
2017 2016 (Unaudited) (Audited) Terms Conditions
Other related parties
CLC Rental US$6,095 US$6,489 US $453,065 US $446,970 Due on Unsecured

demand
; non
interest-
bearing
Cayon Rental 5,539 5,885 78,721 73,182 Due on Unsecured

demand
; non
interest
-
bearing
US$12,37
US$11,634 4 US$531,786 US$520,152
152
b. Amounts owed by related parties
Six Months Ended June 30

December 31,
(Unaudited) June 30, 2017 2016
Camerton Reimbursement US$ US$ US$111,994 US$111,994 Due on Unsecured;

of expenses demand; no
noninterest impairment
-bearing
collection of
proceeds from 4,401,827 4,401,827
sale of stocks
CHI Advances for 1,809,256 1,809,256 Due on Unsecured;

working capital demand; no
non- impairment
interest -
bearing
Cayon Reimbursement 388,044 594,328 206,284 Due on Unsecured;

-bearing
Jerry Liu Reimbursement 1,100,000 857,446 15,810,868 10,309,041 Due on Unsecured;

-bearing
US$5,889,873 US$857,446 US$18,326,446 US$12,436,575
c. Rental deposit
Six Months Ended June

30
June 30, December
(Unaudited) 2017 31, 2016
153
CLC US$ US$ US$1,131,399 US$1,131,399 Due on
Unsecured;
demand;
no
noninterest-
impairment
bearing
The above related parties, except Jerry Liu, are entities under common control of the ultimate parent
company. Jerry Liu is a stockholder and the chairman of the Parent Companys BOD.
Transactions with CHI, Charmview Enterprises Ltd (CEL) and officer
The amount owed by an officer amounting to US$7.7 million as of December 31, 2010 was transferred in
2011 to CEL, the former ultimate parent of CEC and CEIC. CEL now owns 40% interest in Camerton, the
parent of CHPC.
The amounts owed by and to CHI as of December 31, 2010 represent advances for working capital in the
normal course of business when CEC and CEIC were then still subsidiaries of CHI.
For purposes of settling outstanding balances with the Group and as part of corporate restructuring in
preparation for the planned Initial Public Offering (IPO) of the Parent Company, on
March 17, 2011, CHI, CEL and the officer, with the consent of the Group, entered into assignment
agreements whereby CHI absorbed the amounts owed by CEL and by the officer as of
March 17, 2011 amounting to US$7.7 million and US$0.8 million, respectively.
The Group, with the consent of the related parties, entered into assignment agreements whereby the Parent
Company absorbed the amount owed by CEIC to CHI totaling US$3.6 million representing unpaid advances
of US$2.3 million and dividends of US$1.3 million as of March 17, 2011.
Thereafter, on March 18, 2011, the Parent Company and CHI, in view of being creditors and debtors to
each other as a result of the assignment agreements above, entered into a set-off agreement for the value
of the Groups liability aggregating US$6.8 million. The amount represents the above mentioned total
liability of US$3.6 million and the balance outstanding from the Parent Companys purchase of CEC and
CEIC amounting to US US$3.2 million, as revalued from the effect of foreign exchange rate.
The amount owed by CHI as of June 30, 2017 and December 31, 2016 pertains to the outstanding
receivable arising from the assignments and set-off agreements as discussed above.
Transactions with Camerton
Camerton is the majority shareholder of the Parent Company. Amounts owed by Camerton as of June 30,
2017 pertain mainly to proceeds from sale of CHPCs shares collected on behalf of CEC amount to US$4.4
million. Camerton remitted such proceeds to the Group in August 2017 to pay for the Quintel Acquisition.
Amounts owed by Camerton as of December 31, 2016 pertain mainly to working capital advances and
advances for incorporation expenses of Camerton.
Transactions with CLC and Cayon
CLC is an entity under common control of the ultimate parent company. CEC had a lease agreement on
the land where its manufacturing plant (Building 1) is located with CLC for a period of 50 years starting
January 1, 1999. The lease was renewable for another 25 years at the option of CEC. The lease agreement
provided for an annual rental of US$151,682, subject to periodic adjustments upon mutual agreement of
both parties.
154
On January 1, 2005, CEC terminated the lease agreement with CLC but has continued to occupy the said
land for no consideration with CLCs consent. With the termination of the lease agreement, the Group has
classified the rental deposit amounting to US$1.1 million as current asset as the deposit has become due
and demandable anytime from CLC (see Note 7).
On January 1, 2011, CEC entered into an agreement with CLC to lease the land where CECs Building 1
is located. The agreement calls for a P
= 640,704 rent per annum for a period of 10 years and renewable
thereafter by mutual agreement of the parties subject to such new terms and conditions as they may then
be mutually agreed-upon. Total rent expense charged to operations amounted to US$6,096 and US$6,489
for the six months ended June 30, 2017and 2016, respectively.
CEC also entered into an agreement with Cayon starting January 1, 2011 to lease the land where CECs
Building 2 is located. The agreement calls for an annual rental of P
= 582,144 for a period of 10 years and
renewable thereafter. Total rent expense charged to operations amounted to US$5,539 and US$5,885 for
the six months ended June 30, 2017 and 2016, respectively.
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PHILIPPINE TAXATION
The following is a discussion of the material Philippine tax consequences of the acquisition, ownership and
disposition of the Preferred B-2 Shares. This general description does not purport to be a comprehensive
description of the Philippine tax aspects of the Preferred B-2 Shares and no information is provided
regarding the tax aspects of acquiring, owning, holding or disposing of the Preferred B-2 Shares under
applicable tax laws of other applicable jurisdictions and the specific Philippine tax consequence in light of
particular situations of acquiring, owning, holding and disposing of the Preferred B-2 Shares in such other
jurisdictions. This discussion is based upon laws, regulations, rulings, and income tax conventions or
treaties in effect at the date of this Prospectus. The tax treatment applicable to a holder of the Preferred B-
2 Shares may vary depending upon such holders particular situation, and certain holders may be subject
to special rules not discussed below. This summary does not purport to address all tax aspects that may
be important to a holder of the Preferred B-2 Shares. Prospective investors of the Preferred B-2 Shares are
urged to consult their own tax advisors as to the particular tax consequences of the ownership and
disposition of the Preferred B-2 Shares, including the applicability and effect of any local or foreign tax laws.
As used in this section, the term resident alien refers to an individual whose residence is within the
Philippines and who is not a citizen of the Philippines, a non-resident alien is an individual whose
residence is not within the Philippines and who is not a citizen of the Philippines. A non-resident alien who
is actually within the Philippines for an aggregate period of more than 180 days during any calendar year
is considered a non-resident alien doing business in the Philippines. A non-resident alien who is actually
within the Philippines for an aggregate period of 180 days or less during any calendar year is considered a
non-resident alien not doing business in the Philippines. A resident foreign corporation is a non-
Philippine corporation engaged in trade or business within the Philippines, and a non-resident foreign
corporation is a non-Philippine corporation not engaged in trade or business within the Philippines. The
term dividends under this section refers to cash or property dividends. Tax Code means the Philippine
National Internal Revenue of 1997, as amended.
Taxes on Dividends on the Shares
Individual Philippine citizens and resident aliens are subject to a final tax on dividends derived from the
Preferred B-2 Shares at the rate of 10%, which tax shall be withheld by the Company.
Non-resident alien individuals engaged in trade or business in the Philippines are subject to a final
withholding tax on dividends derived from the Preferred B-2 Shares at the rate of 20% on the gross amount
thereof, subject to applicable preferential tax rates under tax treaties in force between the Philippines and
the country of domicile or residence of such non-resident alien individual. A non-resident alien individual
not engaged in trade or business in the Philippines is subject to a final withholding tax on dividends derived
from the Preferred B-2 Shares at the rate of 25% of the gross amount, subject to applicable preferential tax
rates under tax treaties in force between the Philippines and the country of domicile or residence of such
non-resident alien individual.
The term non-resident holder means a holder of the Preferred B-2 Shares:
who is an individual who is neither a citizen nor a resident of the Philippines or an entity which is a
foreign corporation not engaged in trade or business in the Philippines, and
should a tax treaty be applicable, whose ownership of the Preferred B-2 Shares is not effectively
connected with a fixed base or a permanent establishment in the Philippines.
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Dividends derived by domestic corporations (i.e. corporations created or organized in the Philippines or
under its laws) and resident foreign corporations from the Preferred B-2 Shares shall not be subject to tax.
Dividends received from a domestic corporation by a non-resident foreign corporation are generally subject
to final withholding tax at the rate of 30%, subject to applicable preferential tax rates under tax treaties in
force between the Philippines and the country of domicile of such non-resident foreign corporation. The
30% rate for dividends paid to non-resident foreign corporations with countries of domicile having no tax
treaty with the Philippines may be reduced to a special 15% rate if:
the country in which the non-resident foreign corporation is domiciled imposes no taxes on foreign
sourced dividends, or
the country in which the non-resident foreign corporation is domiciled allows a credit against the
tax due from the non-resident foreign corporation for taxes deemed to have been paid in the
Philippines equivalent to 15%.
To avail of tax treaty relief on dividend income, a non-resident holder of the Preferred B-2 Shares must
follow the special procedure prescribed by the BIR for the purpose. The non-resident holder must submit
a duly-accomplished Certificate of Residence for Tax Treaty Relief (CORTT) Form to the Company before
the dividend is paid/credited. The CORTT Form must be submitted every 2 years (unless the non-resident
holder of the Preferred B-2 Shares uses a tax residency certificate, in which case, the validity period of
such certificate will apply). The submission of a CORTT Form will entitle the Company to withhold using
the applicable treaty rate. The Company should then submit original copies of the CORTT to the
International Tax Affairs Division (ITAD) and Revenue District Office (RDO) 39 within thirty (30) days
from the initial payment of withholding taxes due. Each time a subsequent payment is made within the
coverage of the originally filed CORTT Form, the Company must submit an updated Part II of the CORTT
Form to ITAD and RDO 39 within thirty (30) days from each subsequent payment of the withholding tax
due.
The CORTT Form must be accompanied primarily by a proof of tax residence in the country that is a party
to the tax treaty, which must be in the form of a consularized certification from the tax authority of the country
of residence of the non-resident holder of Preferred B-2 Shares which states that the non-resident holder
is a tax resident of such country under the applicable tax treaty.
Stock dividends distributed pro rata to any holder of shares are not subject to Philippine income tax. Similar
to the taxation of sale, exchange or disposition of the Preferred B-2 Shares, the subsequent sale, exchange
or disposition of shares received as stock dividends by the holder is subject to either capital gains tax and
documentary stamp tax or stock transaction tax, depending on whether or not the sale is made through the
PSE.
Tax on Sale, Exchange or Disposition of Shares
Capital gains tax, if sale was made outside the PSE
Net capital gains realized by a resident or non-resident other than a dealer in securities during each taxable
year from the sale, exchange or disposition of shares outside the facilities of the PSE, unless an applicable
treaty exempts such gains from tax or provides for preferential rates, are subject to tax as follows: 5% on
gains not exceeding 100,000.00 and 10% on gains over 100,000.00. A non-resident alien or non-resident
corporation, however, may avail of capital gains tax exemption under an applicable tax treaty.
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The following table lists some of the countries with which the Philippines has tax treaties and the tax rates
currently applicable to non-resident holders who are residents of those countries:
Capital Gains Tax
Due on Disposition
Country Dividends of Preferred B-2
Shares Outside the
PSE
(%) (%)
Canada 25(1) Exempt(8)
............................................................................................
France
............................................................................................ 15(2) Exempt(8)
Germany
............................................................................................ 15(3) Exempt(9)
Japan
............................................................................................ 15(4) Exempt(8)
Singapore
............................................................................................ 25(5) Exempt(10)
United
Kingdom
............................................................................................ 25(6) Exempt(11)
United
States 25(7) Exempt(12)
............................................................................................
Notes:
(1) 15% if the recipient company controls at least 10% of the voting power of the company paying the dividends.
(2) 10% if the recipient company (excluding a partnership) holds directly at least 10% of the voting shares of the
company paying the dividends.
(3) 5% if the recipient company (excluding a partnership) owns directly at least 70% of the capital of the company
paying the dividends; 10% if the recipient company (excluding a partnership) owns directly at least 25% of the
capital of the company paying the dividends.
(4) 10% if the recipient company holds directly at least 10% of either the voting shares of the company paying the
dividends or of the total shares issued by that company during the period of six months immediately preceding
the date of payment of the dividends.
(5) 15% if during the part of the paying companys taxable year which precedes the date of payment of dividends
and during the whole of its prior taxable year at least 15% of the outstanding shares of the voting shares of
the paying company were owned by the recipient company.
(6) 15% if the recipient company is a company which controls directly or indirectly at least 10% of the voting power
of the company paying the dividends.
(7) 20% if during the part of the paying corporations taxable year which precedes the date of payment of dividends
and during the whole of its prior taxable year, at least 10% of the outstanding shares of the voting shares of
the paying corporation were owned by the recipient corporation. Notwithstanding the rates provided under the
Republic of the Philippines-United States Treaty, residents of the United States may avail of the 15%
withholding tax rate under the tax-sparing clause of the Tax Code provided certain conditions are met.
(8 Capital gains are taxable only in the country where the seller is a resident, provided the shares are not those
of a corporation, the assets of which consist principally of real property situated in the Philippines, in which
case the sale is subject to Philippine taxes.
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(9) Capital gains are taxable only in the country where the seller is a resident, provided the shares are not those
of a corporation, the assets of which consist directly or indirectly principally of real property situated in the
Philippines, in which case the sale is subject to Philippine taxes.
(10) Capital gains are taxable only in the country where the seller is a resident, provided the shares are not those
of a corporation, the assets of which consist principally of real property situated in the Philippines, in which
case the sale is subject to Philippine taxes.
(11) Under the tax treaty between the Philippines and the United Kingdom, capital gains on the sale of the shares
of Philippine corporations are subject to tax only in the country where the seller is a resident, irrespective of
the nature of the assets of the Philippine corporation.
(12) Under the Reservation Clause of the tax treaty between the Philippines and the United States, capital gains
on the sale of the shares of Philippine corporations are taxable in the Philippines if its assets consist principally
of real property interest located in the Philippines.
Pursuant to BIR issuances, in order for an exemption under a tax treaty to be recognized, an application
for tax treaty relief on capital gains tax on the sale of shares must be filed by the income recipient before
the deadline for the filing of the documentary stamp tax return, which is the fifth day from the end of the
month when the document transferring ownership was executed. However, on 19 August 2013, the
Philippine Supreme Court in Deutsche Bank AG Manila Branch v. CIR, G.R. No. 188550, ruled that the
period of application for the availment of tax treaty relief should not operate to divest entitlement to the relief
as it would constitute a violation of the duty required by good faith in complying with a tax treaty. Thus, the
application for a tax treaty relief to be filed with the BIR should merely operate to confirm the entitlement of
the taxpayer to such relief.
The requirements for a tax treaty relief application in respect of capital gains tax on the sale of shares are
set out in BIR Form No. 0901-C. Among the requirements is proof of residence which consists of a
consularized certification from the tax authority of the country of residence of the seller of shares that the
said seller is a resident of said country whose tax treaty is invoked. If the seller is a juridical entity,
authenticated certified true copies of its articles of incorporation or association issued by the proper
government authority should also be submitted to the BIR in addition to the certification of its residence
from the tax authority of its country of residence.
The transfer of shares shall not be recorded in the books of the Company unless the BIR certifies that the
all corresponding taxes on the transaction, subject to applicable tax treaty exemptions, have been paid.
Taxes on transfer of shares listed and traded at the PSE
A sale or other disposition of shares through the facilities of the PSE by a resident or a non-resident holder,
other than a dealer in securities, is subject to a stock transaction tax at the rate of 0.5% of the gross selling
price or gross value in money of the shares sold or otherwise disposed, unless an applicable treaty exempts
such sale from said tax. This tax is required to be collected by and remitted to the BIR by the selling
stockbroker on behalf of its client. The stock transaction tax is classified as a percentage tax in lieu of a
capital gains tax. Under certain tax treaties, the exemptions from capital gains tax discussed herein may
not be applicable to stock transaction tax. In addition, value added tax of 12.0% is imposed on the
commission earned by the PSE-registered broker, and is generally passed on to the client.
On 7 November 2012, the BIR issued Revenue Regulations No. 16-2012 which provides that the sale,
barter, transfer, and/or assignment of shares of listed companies that fail to meet the minimum public
ownership (MPO) requirement after 31 December 2012 will be subject to capital gains tax and
documentary stamp tax. It also requires publicly listed companies to submit public ownership reports to the
BIR within 15 days after the end of each quarter.
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On 31 December 2012, the PSE shall impose a trading suspension for a period of not more than six months,
on shares of a listed company who has not complied with the Rule on MPO which requires listed companies
to maintain a minimum percentage of listed securities held by the public at 10% of the listed companies'
issued and outstanding shares at all times. Companies which do not comply with the MPO after the lapse
of the trading suspension shall be automatically delisted.
The sale of such listed company's shares during the trading suspension may be effected only outside the
trading system of the PSE and shall be subject to capital gains tax and documentary stamp tax.
Furthermore, if the adjusted/fair market value of the shares of stock sold is greater than the consideration
or the selling price, the amount by which the adjusted/fair market value of the shares exceeds the selling
price shall be deemed a gift that is subject to donor's tax under Section 100 of the Tax Code.
Documentary Stamp Taxes on Shares
The original issue of shares is subject to documentary stamp tax of 1.00 on each 200.00 par value, or
fraction thereof, of the shares issued. The sale, barter or exchange of Preferred B-2 Shares listed and
traded through the PSE are exempt from documentary stamp tax. However, if the transfer/sale is done
outside of the facilities of the PSE, the transfer of shares is subject to a documentary stamp tax at a rate of
0.75 on each 200.00, or fractional part thereof, of the par value of the Preferred B-2 Shares. The
documentary stamp tax is imposed on the person making, signing, issuing, accepting or transferring the
document and is thus payable either by the vendor or the purchaser of the Preferred B-2 Shares.
Estate and Gift Taxes
The transfer of the Preferred B-2 Shares upon the death of a registered holder to his heirs by way of
succession, whether such an individual was a citizen of the Philippines or an alien, regardless of residence,
will be subject to Philippine estate tax at progressive rates ranging from 5% to 20% if the net estate is over
200,000.00.
The transfer of shares by gift or donation to a stranger (i.e. a person who is not a brother, sister, spouse,
ancestor, lineal descendant or relative by consanguinity within the fourth degree of relationship) will be
subject to a donors tax at a flat rate of 30.0%. Gifts or donations to non-strangers, however, will be subject
to progressive rates ranging from 2.0% to 15.0%, if the net gifts during the calendar year exceed
100,000.00, otherwise, such transfer will not be subject to donors tax. Corporate registered holders are
also liable for Philippine donors tax on such transfers, but the rate of tax with respect to net gifts made by
corporate registered holders is always at a flat rate of 30.0%.
Estate and gift taxes will not be collected in respect of intangible personal property, such as shares, (1) if
the deceased at the time of death, or the donor at the time of donation, was a citizen and resident of a
foreign country which at the time of his death or donation did not impose a transfer tax of any character in
respect of intangible personal property of citizens of the Philippines not residing in that foreign country, or
(2) if the laws of the foreign country of which the deceased or the donor was a citizen and resident at the
time of his death or donation allow a similar exemption from transfer or death taxes of every character or
description in respect of intangible personal property owned by citizens of the Philippines not residing in
that foreign country.
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Corporate Income Tax
As a general rule, a domestic corporation is subject to corporate income tax of 30.0% on its taxable income 3
from all sources within or without the Philippines. The exception, among others, would be (i) gross interest
income from Philippine currency bank deposits and yields from deposit substitutes, trust funds and similar
arrangements, and royalties, which are subject to a final withholding tax rate of 20.0% of the gross amount
of such income, (ii) interest income from a depository bank under the expanded foreign currency deposit
system which is subject to a final 7.5% tax on the gross amount of such income.
Further, in computing the corporate income tax, effective July 6, 2008, companies are given a choice to
claim itemized deductions or the optional standard deduction (OSD), with the former being presumed
unless specific election of OSD is signified in the tax return. The OSD election is irrevocable for the taxable
year for which the tax return is made. The OSD is equivalent to an amount not exceeding 40.0% of the
companys gross income. For this purpose, "Gross Income" means all income derived from whatever
source, including, but not limited to, compensation for service, gross income derived from the conduct of
trade or business or exercise of profession, gains derived from dealings in property, interests, rent, royalties,
dividends, annuities, prizes and winnings.
A minimum corporate income tax (MCIT) of 2.0% of gross income would likewise be applicable to the
Issuer, beginning on the fourth taxable year from commencement of business operations, whenever the
MCIT is greater that the ordinary corporate income tax. For this purpose, "Gross Income" means gross
sales less sales returns, discounts and allowances and cost of goods sold. Passive income, such as interest
on bank deposits and royalties subject to final withholding tax, shall not form part of gross income for
purposes of MCIT.
Nevertheless, any excess of the MCIT over the ordinary corporate income tax may be carried forward and
credited against the latter for the three immediately succeeding taxable years. Further, subject to certain
conditions, the MCIT may be suspended with respect to a corporation which suffers losses on account of a
prolonged labor dispute, or because of force majeure, or because of legitimate business reverses.
THE COMMENTS ABOVE ARE OF A GENERAL NATURE AND, A SUMMARY OF CERTAIN

PHILIPPINE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF THE
SHARES. THEY ARE NOT INTENDED TO BE AND DO NOT CONSTITUTE LEGAL OR TAX ADVICE.
EACH PROSPECTIVE HOLDER SHOULD CONSULT WITH HIS OWN TAX ADVISER AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF PURCHASING, OWNING AND
DISPOSING OF THE PREFERRED B-2 SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF
ANY STATE, LOCAL AND NATIONAL TAX LAWS.
3 Taxable income refers to the pertinent items of gross income specified in the Na tional Internal
Revenue Code of 1997, as amended (the "Tax Code") less the deductions and/or personal and
additional exemptions, if any, authorized for such types of income by the Tax Code or other special laws.
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THE PHILIPPINE STOCK MARKET
The information presented in this section has been extracted from publicly available documents which have
not been prepared or independently verified by the Company and the Underwriters or any of their respective
subsidiaries, affiliates or advisors in connection with the Offer.
The Exchange
The PSE is the only stock exchange in the Philippines. It is one of the oldest stock exchanges in Asia,
having been in continuous operation since the establishment of the Manila Stock Exchange in 1927. It
currently maintains two trading floors, one at the PSE Centre (Tektite), Ortigas Center in Pasig City, and
another at its principal office at the Ayala Tower One in Makati Citys Central Business District. The PSE is
composed of a 15-man Board of Directors with Jose T. Pardo as Chairman.
Trading in the PSE is a continuous session from 9:30AM to 3:30PM daily with a recess from 12:00PM to
1:30PM.
Brief History
The Philippines initially had two stock exchanges, the Manila Stock Exchange, which was organized in
1927, and the Makati Stock Exchange, which began operations in 1963. Each exchange was self-
regulating, governed by its respective Board of Governors elected annually by its members.
Several steps initiated by the Philippine government have resulted in the unification of the two bourses into
the PSE. The PSE was incorporated in 1992 by officers of both the Makati and the Manila Stock Exchanges.
In March 1994, the licenses of the two exchanges were revoked. While the PSE maintains two trading
floors, one in Makati City and the other in Pasig City, these floors are linked by an automated trading system,
which integrates all bid and ask quotations from the bourses.
In June 1998, the SEC granted the PSE a "Self-Regulatory Organization" (SRO) status, which meant that
the bourse can implement its own rules and establish penalties on erring trading participants and listed
companies. In 2011, Capital Market Integrity Corporation (CMIC) was incorporated to function as the
independent audit, surveillance and compliance arm of PSE. The mandate of CMIC is to ensure that trading
participants adhere to all pertinent rules, regulations, and code of conduct of CMIC and PSE, as well as all
related legislative and regulatory requirements.
In 2001, one year after the enactment of the SRC, the PSE was transformed from a non-profit, non-stock,
member-governed organization into a shareholder-based, revenue-earning corporation headed by a
president and a board of directors. The PSE eventually listed its own shares on the exchange (traded under
the ticker symbol PSE) by way of introduction on 15 December 2003.
Classified into financial, industrial, holding firms, property, services, and mining and oil sectors, companies
are listed either on the PSEs Main Board or the Small, Medium and Emerging Board. Previously, the PSE
allowed listing on the First Board, Second Board or the Small, Medium and Enterprises Board. With the
issuance by the PSE of Memorandum No. CN-No. 2013-0023 dated 6 June 2013, revisions to the PSE
Listing Rules were made, among which changes are the removal of the Second Board listing and the
requirement that lock-up rules be embodied in the articles of the incorporation of the issuer.
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With the increasing calls for good corporate governance, the PSE has adopted an online daily disclosure
system to improve the transparency of listed companies and to protect the investing public.
The main index for PSE is the PSEi, which is a capitalization-weighted index composed of stocks
representative of the Industrial, Properties, Services, Holding Firms, Financial and Mining & Oil Sectors of
the PSE. It measures the relative changes in the free float-adjusted market capitalization of the 30 largest
and most active common stocks listed at the PSE. The selection of companies in the PSEi is based on a
specific set of public float, liquidity and market capitalization criteria. There are also six sector-based indices
as well as a broader all shares index.
The table below sets out movements in the composite index from 1995 to 30 June 2015, and shows the
number of listed companies, market capitalization, and value of shares traded for the same period:
Year Composite Number of Aggregate Market Combined Value

Index at Listed Capitalization of Turnover
Closing Companies (in billions) (in billions)
1995 2,594.2 205 1,545.7 379.0
1996 3,170.6 216 2,121.1 668.9
1997 1,869.2 221 1,261.3 588.0
1998 1,968.8 221 1,373.7 378.9
1999 2,142.9 223 1,936.5 668.8
2000 1,494.5 226 2,576.5 58.61
2001 1,168.1 228 2,143.3 407.2
2002 1,014.4 232 2,083.2 780.9
2003 1,442.4 235 2,973.8 357.6
2004 1,822.8 236 4,766.2 206.6
2005 2,096.0 237 5,948.4 383.5
2006 2,982.5 240 4,277.8 1,145.3
2007 3,621.6 244 7,977.6 1,338.3
2008 1,872.9 246 4,069.2 763.9
2009 3,052.7 248 6,029.1 994.2
2010 4,201.1 253 8,866.1 1,207.4
2011 4,372.0 253 8,697.0 1,422.6
2012 5,812.7 268 10,850 1,420
2013 5,889.8 257 11,931.3 2,546.3
2014 7,230.6 263 14,251.7 2,130.1
2015 6,952.1 216 13,465.1 2,172.5
2016 7,796.2 264 15,253.5 931.7
As of Jun. 30, 2017 7,843.2 268 13,970.8 631.8
Source: Philippine Stock Exchange, Inc.
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Trading
Trading: In General
The PSE is a double auction market. Buyers and sellers are each represented by stockbrokers. To trade,
bid or ask prices are posted on the PSEs electronic trading system. A buy (or sell) order that matches the
lowest asked (or highest bid) price is automatically executed. Buy and sell orders received by one broker
at the same price are crossed at the PSE at the indicated price. Payment of purchases of listed securities
must be made by the buyer on or before the third trading day (the settlement date) after the trade.
Beginning 2 January 2012, trading on the PSE starts at 9:30 a.m. until 12:00 p.m., when there will be a one
and a half hour lunch break. In the afternoon, trading resumes at 1:30 p.m. and ends at 3:30 p.m., inclusive
of a 10-minute period during which transactions may be conducted, provided that they are executed at the
last traded price and are only for the purpose of completing unfinished orders. Trading days are Monday to
Friday, except legal holidays and days when the BSP clearing house is closed.
Minimum trading lots range from 5 to 1,000,000 shares depending on the price range and nature of the
security traded. Odd-sized lots are traded by brokers on a board specifically designed for odd-lot trading.
To maintain stability in the stock market, daily price swings are monitored and regulated. Under current
PSE regulations, when the price of a listed security moves up by 50% or down by 50% in one day (based
on the previous closing price or last posted bid price, whichever is higher), the price of that security is
automatically frozen by the PSE, unless there is an official statement from the company or a government
agency justifying such price fluctuation, in which case the affected security can still be traded but only at
the frozen price. If the issuer fails to submit such explanation, a trading halt is imposed by the PSE on the
listed security the following day. Resumption of trading shall be allowed only when the disclosure of the
company is disseminated, subject again to the trading ban.
Trading DDS
On 10 November 2016, the SEC approved the PSE DDS Rules. The PSE officially released the final PSE
DDS Rules on 2 December 2016. The PSE DDS Rules shall govern the listing, trading and settlement of
DDS or securities denominated in U.S. dollars which are listed and traded on the PSE. Please refer to Parts
C and D of the PSE DDS Rules for the rules on the trading and settlement of DDS in general. The PSE
DDS Rules shall be read in conjunction with the SRC and the SRC Rules, existing BSP regulations, and
other relevant laws, rules and regulations and shall form part of all rules of the PSE. All rules of the PSE,
SCCP and CMIC not inconsistent with the PSE DDS Rules shall apply to the DDS.
As the Preferred B-2 Shares are being applied for listing with the PSE, the PSE DDS Rules will be applicable
to such securities.
Requirements for Trading Participants to be Eligible to Trade the Offer Shares; Nominating a
Trading Participant which are Eligible Brokers
An applicant subscribing for the Preferred B-2 Shares, or an investor intending to invest in such shares, is
required to appoint an Eligible Broker in whose name the shares will be registered.
[The PSE DDS Rules provide the following requirements for a Trading Participant to qualify as an Eligible
Broker to engage in dollar denominated trades:
164
1. A Trading Participant must have attended a DDS training session or seminar conducted by the
PSE and must be operationally ready to trade DDS, and shall issue a sworn certification to the PSE attesting
to its operational readiness. Notwithstanding the said certification, the PSE has the option to assess the
operational readiness of a Trading Participant.
2. A Trading Participant shall have a US dollar deposit account with any universal or commercial bank
and a separate US dollar cash settlement account with the designated settlement bank.
3. A Trading Participant shall also open a separate cash collateral deposit account for dollar-
denominated securities trading with the designated settlement bank for the required cash collateral in US
dollars.
4. A Trading Participant shall also obtain the consent of its clients to the disclosure of their names to
the SEC, if said information is requested by the SEC in the course of an investigation of a possible violation
of the SRC and the SRC Rules and other orders and issuances of the SEC, examination, official inquiry or
as part of surveillance procedures, and/or in compliance with other pertinent laws.
5. A Trading Participant shall comply with any other requirements as may be imposed by other
regulatory agencies such as, but not limited to, the BSP and SEC.
Pursuant to the PSE DDS rules, the PSE shall restrict Trading Participants that fail to comply with such
requirements from trading the dollar-denominated securities.
In view of the foregoing, the Issuer has identified for purposes of the Offer and as of the date of this
Preliminary Prospectus, the following Trading Participants as the Eligible Brokers for DDS, who will then
be eligible to trade the Preferred B-2 Shares subject of the Offer (the Offer Shares) (in alphabetical order):
1. AP Securities Incorporated
2. Armstrong Securities, Inc.
3. Astra Securities Corporation
4. BA Securities, Inc.
5. BDO Securities Corporation
6. First Metro Securities Brokerage Corporation
7. Mandarin Securities Corporation
8. Philippine Equity Partners, Inc.
9. Sunsecurities, Inc.
10. Venture Securities, Inc.
11. The First Resources Management and Securities Corporation
12. Wealth Securities, Inc.
An applicant shall appoint any of the named Eligible Brokers as its broker for the trading of the Offer Shares.
Even after the commencement of the Offer Period and after Listing Date but subject to applicable laws and
regulations and compliance thereof by the relevant Trading Participant, any Trading Participant may apply
to the PSE to be named as an Eligible Broker. In other words, there will be a continuing accreditation of
Trading Participants as Eligible Brokers for DDS, who will then be eligible to trade the Preferred B-2 Shares.
Notwithstanding the foregoing, neither the Issuer nor any of the Underwriters make any guarantee that
additional Trading Participants will be named as Eligible Brokers after the Listing Date or that the Eligible
Brokers named above will continue to act as such in respect of the Offer Shares. The PSE DDS Rules,
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however, currently require as a continuing listing requirement that the Issuer should ensure the availability
of at least two Eligible Brokers to trade the DDS.
Non-Resident Transactions
When the purchase/sale of Philippine shares involves a non-resident, whether the transaction is effected
in the domestic or foreign market, it will be the responsibility of the securities dealer/broker to register the
transaction with the BSP. The local securities dealer/broker shall file with the BSP, within three Business
Days from the transaction date, an application in the prescribed registration form. After compliance with
other required undertakings, the BSP shall issue a Certificate of Registration. Inward foreign investments
in PSE-listed securities are registered with the investors designated custodian bank on behalf of the BSP.
Under BSP rules, all registered foreign investments in securities including profits and dividends, net of taxes
and charges, may be repatriated.
Settlement
Settlement - In General
The SCCP is a wholly-owned subsidiary of the PSE, and was organized primarily as a clearance and
settlement agency for SCCP-eligible trades executed through the facilities of the PSE. SCCP received its
permanent license to operate on 17 January 2002. It is responsible for:
synchronizing the settlement of funds and the transfer of securities through Delivery versus
Payment clearing and settlement of transactions of Clearing Members, who are also Trading
Participants of the PSE;
guaranteeing the settlement of trades in the event of a Trading Participants default through the
implementation of its Fails Management System and administration of the Clearing and Trade
Guaranty Fund; and
performance of Risk Management and Monitoring to ensure final and irrevocable settlement.
SCCP settles PSE trades on a three-day rolling settlement environment, which means that settlement of
trades takes place three trading days after transaction date (T+3). The deadline for settlement of trades
is 12:00 n.n. of T+3. Securities sold should be in scripless form and lodged under the book-entry system of
the PDTC. Each PSE Broker maintains a Cash Settlement Account with one of the five existing Settlement
Banks of SCCP, which are BDO Unibank, Inc., Rizal Commercial Banking Corporation, Metropolitan Bank
and Trust Company, Deutsche Bank and Unionbank of the Philippines. Payment for securities bought
should be in good, cleared funds and should be final and irrevocable. Settlement is presently on a broker
level.
SCCP implemented its Central Clearing and Central Settlement system on 29 May 2006. CCCS employs
multilateral netting, whereby the system automatically offsets buy and sell transactions on a per issue
and a per flag basis to arrive at a net receipt or a net delivery security position for each Clearing Member.
All cash debits and credits are also netted into a single net cash position for each Clearing Member.
Novation of the original PSE trade contracts occurs, and SCCP stands between the original trading parties
and becomes the Central Counterparty to each PSE-eligible trade cleared through it.
Settlement - DDS
166
The two immediately preceding paragraphs are specifically applicable to peso-denominated equity
securities listed with the PSE. In respect of DDS, trading and settlement shall be governed by the PSE DDS
Rules which are to be read in conjunction with the SRC and the SRC Rules, existing BSP regulations, and
other relevant laws, rules and regulations and are to form part of all rules of the PSE. Moreover, all rules of
the PSE, SCCP and CMIC not inconsistent with the PSE DDS Rules shall apply to the DDS. Please refer
to Parts C and D of the PSE DDS Rules for the rules on the trading and settlement of DDS in general.
As the Preferred B-2 Shares are being applied for listing with the PSE, the PSE DDS Rules will be applicable
to such securities.
As of the date of this Prospectus, there are only [11] Eligible Brokers for DDS who are eligible to trade the
Preferred B-2 Shares. Such Eligible Brokers maintain a Cash Settlement Account with the lone settlement
bank for DDS, which is [BDO].
Please see discussion under Requirements for Trading Participants to be Eligible to Trade the Offer
Shares; Nominating a Trading Participant which are Eligible Brokers in this Preliminary Prospectus for
additional information.
Scripless Trading
In 1995, the PDTC (formerly the Philippine Central Depository, Inc.), was organized to establish a central
depository in the Philippines and introduce scripless or book-entry trading in the Philippines. On December
16, 1996, the PDTC was granted a provisional license by the SEC to act as a central securities depository.
All listed securities at the PSE have been converted into book-entry settlement in the PDTC. The depository
service of the PDTC provides the infrastructure for lodgment (deposit) and upliftment (withdrawal) of
securities, pledge of securities, securities lending and borrowing and corporate actions including
shareholders meetings, dividend declarations and rights offerings. The PDTC also provides depository and
settlement services for non-PSE trades of listed equity securities. For transactions on the PSE, the security
element of the trade will be settled through the book-entry system, while the cash element will be settled
through the current settlement banks, BDO Unibank, Inc., Rizal Commercial Banking Corporation,
Metropolitan Bank and Trust Company, Deutsche Bank and Unionbank of the Philippines.
In order to benefit from the book-entry system, securities must be immobilized into the PDTC system
through a process called lodgment. Lodgment is the process by which shareholders transfer legal title (but
not beneficial title) over their shares in favor of the PCD Nominee Corporation (PCD Nominee), a
corporation wholly-owned by the PDTC, whose sole purpose is to act as nominee and legal title holder of
all shares lodged in the PDTC. Immobilization is the process by which the warrant or share certificates of
lodging holders are cancelled by the transfer agent and the corresponding transfer of beneficial ownership
of the immobilized shares in the account of the PCD Nominee through the PDTC Participant will be recorded
in the issuing corporations registry. This trust arrangement between the participants and PDTC through
the PCD Nominee is established by and explained in the PDTC Rules and Operating Procedures approved
by the SEC. No consideration is paid for the transfer of legal title to the PCD Nominee. Once lodged,
transfers of beneficial title of the securities are accomplished via book-entry settlement.
Under the current PDTC System, only participants (e.g. brokers and custodians) will be recognized by the
PDTC as the beneficial owners of the lodged equity securities. Thus, each beneficial owner of shares,
through his participant, will be the beneficial owner to the extent of the number of shares held by such
participant in the records of the PCD Nominee. All lodgments, trades and uplifts on these shares will have
to be coursed through a participant. Ownership and transfers of beneficial interests in the shares will be
167
reflected, with respect to the participants aggregate holdings, in the PDTC system, and with respect to
each beneficial owners holdings, in the records of the participants. Beneficial owners are thus advised that
in order to exercise their rights as beneficial owners of the lodged shares, they must rely on their participant-
brokers and/or participant-custodians.
Any beneficial owner of shares who wishes to trade his interests in the shares must course the trade through
a participant. The participant can execute PSE trades and non-PSE trades of lodged equity securities
through the PDTC System. All matched transactions in the PSE trading system will be fed through the
SCCP, and into the PDTC System. Once it is determined on the settlement date (T+3) that there are
adequate securities in the securities settlement account of the participant-seller and adequate cleared funds
in the settlement bank account of the participant-buyer, the PSE trades are automatically settled in the
SCCP Central Clearing and Central Settlement system, in accordance with the SCCP and PDTC Rules
and Operating Procedures. Once settled, the beneficial ownership of the securities is transferred from the
participant-seller to the participant-buyer without the physical transfer of stock certificates covering the
traded securities. In respect of DDS, the foregoing is subject to the PSE DDS Rules. Moreover, please see
discussion under Requirements for Trading Participants to be Eligible to Trade the Offer Shares;
Nominating a Trading Participant which are Eligible Brokers on page 36 under Terms and Conditions of
the Offer.
The difference between the depository and the registry would be on the recording of ownership of the
shares in the issuing corporations books. In the depository set-up, shares are simply immobilized, wherein
customers certificates are cancelled and a confirmation advice is issued in the name of PCD Nominee to
confirm new balances of the shares lodged with the PDTC. Transfers among/between broker and/or
custodian accounts, as the case may be, will only be made within the book-entry system of the PDTC.
However, as far as the issuing corporation is concerned, the underlying certificates are in the PCD
Nominees name. In the registry set-up, settlement and recording of ownership of traded securities will
already be directly made in the corresponding issuing companys transfer agents books or system.
Likewise, recording will already be at the beneficiary level (whether it be a client or a registered custodian
holding securities for its clients), thereby removing from the broker its current de facto custodianship role.
Amended Rule on Lodgment of Securities
On 24 June 2009, the PSE apprised all listed companies and market participants through Memorandum
No. 2009-0320 that commencing on 1 July 2009, as a condition for the listing and trading of the securities
of an applicant company, the applicant company shall electronically lodge its registered securities with the
PDTC or any other entity duly authorized by the SEC, without any jumbo or mother certificate in compliance
with the requirements of Section 43 of the SRC. In compliance with the foregoing requirement, actual listing
and trading of securities on the scheduled listing date shall take effect only after submission by the applicant
company of the documentary requirements stated in the amended rule on Lodgment of Securities of the
PSE.
Pursuant to the said amendment, the PDTC issued implementing procedural rules:
For a new company to be listed at the PSE as of 1 July 2009, the usual procedure will be
observed but the transfer agent of the company shall no longer issue a certificate to PCD
Nominee but shall issue a Registry Confirmation Advice, which shall be the basis for the PDTC
to credit the holdings of the depository participants on the listing date.
On the other hand, for an existing listed company, the PDTC shall wait for the advice of the
transfer agent that it is ready to accept surrender of PCD Nominee jumbo certificates and upon
168
such advice the PDTC shall surrender all PCD Nominee jumbo certificates to the transfer agent
for cancellation. The transfer agent shall issue a Registry Confirmation Advice to PDTC
evidencing the total number of shares registered in the name of PCD Nominee in the listed
companys registry as of confirmation date.
Issuance of Stock Certificates for Certificated Shares
On or after the listing of the shares on the PSE, any beneficial owner of the shares may apply with PDTC
through his broker or custodian-participant for a withdrawal from the book-entry system and return to the
conventional paper-based settlement. If a shareholder wishes to withdraw his shareholdings from the PDTC
System, the PDTC has a procedure of upliftment under which PCD Nominee will transfer back to the
shareholder the legal title to the shares lodged. The uplifting shareholder shall follow the Rules and
Operating Procedures of the PDTC for the uplifting of the shares lodged under the name of the PCD
Nominee. The transfer agent shall prepare and send a Registry Confirmation Advice to the PDTC covering
the new number of shares lodged under PCD Nominee. The expenses for upliftment are on the account of
the uplifting shareholder.
Upon the issuance of stock certificates for the shares in the name of the person applying for upliftment,
such shares shall be deemed to be withdrawn from the PDTC book-entry settlement system, and trading
on such shares will follow the normal process for settlement of certificated securities. The expenses for
upliftment of the shares into certificated securities will be charged to the person applying for upliftment.
Pending completion of the upliftment process, the beneficial interest in the shares covered by the
application for upliftment is frozen and no trading and book-entry settlement will be permitted until the
relevant stock certificates in the name of the person applying for upliftment shall have been issued by the
relevant companys transfer agent.
Amended Rule on Minimum Public Ownership
Under the amended rules on minimum public ownership promulgated by the PSE and approved by the
SEC, listed companies are required at all times to maintain a minimum percentage of listed securities held
by the public of 10% of the listed companies issued and outstanding shares, exclusive of any treasury
shares, or as such percentage as may be prescribed by the PSE. The determination of whether
shareholdings are considered public or non-public is based on: (a) the amount of shareholdings and its
significance to the total outstanding shares; (b) purpose of investment; and (c) extent of involvement in the
management of the company.
The shares held by the following are generally considered as held by the public: (i) individuals whose shares
are not of significant size and which are non-strategic in nature; (ii) PSE trading participants (such as
brokers) whose shareholdings are non-strategic in nature; (iii) investment funds and mutual funds; (iv)
pension funds which hold shares in companies other than the employing company or its affiliates; (v) PCD
Nominee provided that none of the beneficial owners of the shares has significant holdings (i.e.,
shareholdings by an owner of 10% or more are excluded and considered non-public); and (vi) Social
Security funds.
If an investment in a listed company is meant to partake of sizable shares for the purpose of gaining
substantial influence on how the company is being managed, then the shareholdings of such investor are
considered non-public. Ownership of 10% or more of the total issued and outstanding shares of a listed
company is considered significant holding and therefore non-public.
169
Listed companies which become non-compliant with the minimum public ownership requirement will be
suspended from trading for a period of not more than six months and will be automatically delisted if it
remains non-compliant with the said requirement after the lapse of the suspension period.
On May 31, 2017, the SEC issued the draft rules and regulations proposing to increase the public float of
publicly listed companies, for public comment.
Under the proposal, companies filing a registration statement pursuant to Sections 8 and 22 of the SRC
and with intention to list their shares for trading in an exchange shall apply for registration with a public float
of at least 20% of the companies issued and outstanding shares. On the other hand, companies with
existing registration statements filed with the SEC and whose shares are listed and traded in an exchange
shall increase their public float to at least 15% on or before the end of 2018, to be further increased to 20%
on or before the end of 2020. The requirement of minimum public ownership shall also form part of the
requirement for the registration of securities. Non-compliance with these requirements shall subject publicly
listed companies to administrative sanctions, including suspension and revocation of their registration with
the SEC.
170
LEGAL MATTERS
Certain legal matters as to the Philippine Law relating to the Offer will be passed upon by Angara Abello
Concepcion Regala & Cruz, legal counsel to the Company, and Sycip Salazar Hernandez & Gatmaitan,
legal counsel to the Underwriters.
Each of the foregoing legal counsel has neither shareholdings in the Company nor any right, whether legally
enforceable or not, to nominate persons or to subscribe for securities in the Company. None of the legal
counsel will receive any direct or indirect interest in the Company or in any securities thereof (including
options, warrants, or rights thereto) pursuant to or in connection with the Offer. Other than the appointment
of Atty. Tadeo Hilado of Angara Abello Concepcion Regala & Cruz Law Offices, none of the aforementioned
counsels has acted or will act as promoter, underwriter, voting trustee, officer, or employee of the Company.
171
INDEPENDENT AUDITORS
The audited consolidated financial statements of the Company as at 31 December 2016 and 2015 and for
each of the three years in the period ended 31 December 2016 have been audited by SGV & Co.,
independent auditors, in accordance with Philippine Standards on Auditing as set forth in their report
thereon appearing elsewhere in this Prospectus. The unaudited interim condensed consolidated financial
statements as at 30 June 2017 and for the six-month periods ended 30 June 2017 and 2016 have been
reviewed by SGV & Co. in accordance with Philippine Standard on Review Engagements 2410, Review of
Interim Financial Information Performed by the Independent Auditor of the Entity, as set forth in their report
thereon appearing elsewhere in this Prospectus. A review is substantially less in scope than an audit
conducted in accordance with the Philippine Standards on Auditing. Consequently, it does not enable the
independent auditors to obtain assurance that they would become aware of all significant matters that might
be identified in an audit. Accordingly, they do not express an audit opinion on the unaudited interim
condensed financial statements.
The pro forma condensed consolidated financial information of the Company as at 30 June 2017 and 31
December 2016 and for the six-month period ended 30 June 2017 and year ended 31 December 2016,
have been reviewed by SGV & Co., independent auditors, in accordance with Philippine Standard on
Assurance Engagements 3000, Assurance Engagements Other than Audits or Reviews of Historical
Financial Information (PSAE 3000) and Philippine Securities and Exchange Commission Memorandum
Circular No. 2, Series of 2008, Guidelines on Reporting and Attestation of Pro Forma Financial Information
Securities Regulation Code Rule 68, as amended, as set forth in their report thereon appearing elsewhere
in this Prospectus.
The Companys fiscal year begins on 1 January and ends on 31 December of each year.
SGV & Co. has acted as the Companys independent auditors since inception. Kristopher S. Catalan is the
current audit partner and has served the Company since 2016. The Company has not had any material
disagreements on accounting and financial disclosures with its current independent auditors for the same
periods or any subsequent interim period. SGV & Co. has neither shareholdings in the Company nor any
right, whether legally enforceable or not, to nominate persons or to subscribe for the securities of the
Company. SGV & Co. will not receive any direct or indirect interest in the Company or its securities
(including options, warrants or rights thereto) pursuant to or in connection with the Offer. The foregoing is
in accordance with the Code of Ethics for Professional Accountants in the Philippines set by the Board of
Accountancy and approved by the Professional Regulation Commission.
The following table sets out the aggregate fees billed for each of the last two years for professional services
rendered by SGV & Co., excluding fees directly related to the Offer.
In P
= 2016 2015 2014
Audit and Audit-related Feesa 2,372,244.00 9,950,169.51 1,725,095.00
All Other Feesb 458,000.00 1,104,847.25 689,488.50
Total 2,830,244.00 11,055,016.76 2,414,583.50
172
a Audit and Audit-Related Fees. This category includes the audit of annual financial statements and services that are normally provided
by the independent auditor in connection with statutory and regulatory filings or engagements for those calendar years. This is
exclusive of out-of-pocket expenses incidental to the independent auditors work.
b All Other Fees. This category includes other services rendered by SGV & Co. such as agreed upon procedures and tax compliance
services.
In relation to the audit of the Companys annual financial statements, the Companys Corporate Governance
Manual, which was approved by the Board of Directors on 15 December 2010 (revised on 31 July 2014),
provides that the audit committee shall, among other activities, (i) evaluate significant issues reported by
the independent auditors in relation to the adequacy, efficiency, and effectiveness of policies, controls,
processes, and activities of the Company, (ii) ensure that other non-audit work provided by the independent
auditors are not in conflict with their functions as independent auditors, and (iii) ensure the compliance of
the Company with acceptable auditing and accounting standards and regulations.
173
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following pages set forth the Companys financial information as of 31 December 2016 and 2015 and
for the years ended 31 December 2016, 2015, 2014 (audited), and as of 30 June 2017 and for the six
months ended 30 June 2017 and 2016 (unaudited).
174
COVER SHEET
for
AUDITED FINANCIAL STATEMENTS
SEC Registration Number
C S 2 0 1 1 0 2 1 3 7
COMPANY NAME
C I R T E K H O L D I N G S P H I L I P P I N E S
C O R P O R A T I O N A N D S U B S I D I A R I E S
PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province )
1 1 6 E a s t M a i n A v e n u e , P h a s e V -
S E Z , L a g u n a T e c h n o p a r k , B i a n ,
L a g u n a
Form Type Department requiring the report Secondary License Type, If Applicable
A A F S C R M D N / A
COMPANY INFORMATION
Companys Email Address Companys Telephone Number Mobile Number
N/A 729-6205 N/A
No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)
25 05/31 12/31
CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number
Anthony Albert S. Buyawe as.buyawe@cirtek.ph N/A N/A
CONTACT PERSONs ADDRESS
116 East Main Avenue, Phase V-SEZ, Laguna Technopark, Bian, Laguna
NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission
within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporations records with the Commission
and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.
*SGVFS022305*
SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 819 0872 December 14, 2015, valid until December 31, 2018
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-4 (Group A),
Philippines November 10, 2015, valid until November 9, 2018
INDEPENDENT AUDITORS REPORT
The Board of Directors and Stockholders

116 East Main Avenue
Phase V-SEZ
Laguna Technopark
Binan, Laguna
Opinion
We have audited the consolidated financial statements of Cirtek Holdings Philippines Corporation and its
subsidiaries (the Group), which comprise the consolidated balance sheets as at December 31, 2016 and
2015, and the consolidated statements of comprehensive income, consolidated statements of changes in
equity and consolidated statements of cash flows for each of the three years in the period ended
December 31, 2016, and notes to the consolidated financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2016 and 2015, and its consolidated
financial performance and its consolidated cash flows for each of the three years in the period ended
December 31, 2016 in accordance with Philippine Financial Reporting Standards (PFRSs).
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditors Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics)
together with the ethical requirements that are relevant to our audit of the consolidated financial
statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditors Responsibilities for the Audit of the
Consolidated Financial Statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our assessment of
the risks of material misstatement of the consolidated financial statements. The results of our audit
*SGVFS022305*
A member firm of Ernst & Young Global Limited
-2-
procedures, including the procedures performed to address the matter below, provide the basis for our
audit opinion on the accompanying consolidated financial statements.
Presentation and Valuation of Noncurrent Assets Held for Sale
Land, building and related improvements valued at $11.41 million as of December 31, 2016 have been
classified as held for sale since 2014, as disclosed in Note 11 to the consolidated financial statements.
Assessing whether noncurrent assets may continue to be classified as held for sale even if such assets
were not sold during the initial one-year period involves managements judgment and requires
management to provide evidence that they are committed to selling the assets.
Noncurrent assets held for sale are stated at the lower of carrying amount and fair value less costs to sell.
Estimating fair value requires the assistance of an external appraiser whose calculations involve certain
assumptions, such as sales price and adjustments to sales price based on internal and external factors.
Determining fair value and related costs to sell requires management to make judgments regarding the
appropriate valuation methodology and involves estimation based on available inputs.
Audit response
We inquired from management the circumstances that caused the delay of the sale of the assets, as well as
actions taken by management to respond to these circumstances. We also obtained relevant information
from managements property consultants that supports managements commitment to its plan to sell these
assets. For the assessment of the lower of carrying amount and fair value less costs to sell, we tested the
calculation performed by management. For the fair value, we involved our internal specialist in the review
of the methodology and assumptions used by an external appraiser in determining the fair value. We
evaluated the competence, capabilities and objectivity of the external appraiser. We compared the
assumptions used, specifically the sales price of comparable properties, against relevant external
information. We inquired from the external appraiser the basis of adjustments made to the sales price. For
the related costs to sell, such as marketing expenses, brokerage fees and relevant taxes, we evaluated the
basis of the estimated costs.
Other Information
Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report
for the year ended December 31, 2016, but does not include the consolidated financial statements and our
auditors report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and
Annual Report for the year ended December 31, 2016 are expected to be made available to us after the
date of this auditors report.
Our opinion on the consolidated financial statements does not cover the other information and we will not
express any form of assurance conclusion thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audits, or otherwise appears to be materially misstated.
*SGVFS022305*
-3-
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with PFRSs, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Groups
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Groups financial reporting process.
Auditors Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Groups internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Groups ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditors
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
*SGVFS022305*
-4-
the date of our auditors report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditors report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors report is Kristopher S.
Catalan.
SYCIP GORRES VELAYO & CO.
Kristopher S. Catalan
Partner
CPA Certificate No. 109712
SEC Accreditation No. 1509-A (Group A),
October 1, 2015, valid until September 30, 2018
Tax Identification No. 233-299-245
BIR Accreditation No. 08-001998-109-2015
March 4, 2015, valid until March 3, 2018
PTR No. 5908679, January 3, 2017, Makati City
April 12, 2017
*SGVFS022305*
CIRTEK HOLDINGS PHILIPPINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31
2016 2015
ASSETS
Current Assets
Cash and cash equivalents (Note 5) $24,511,493 $29,776,866
Trade and other receivables (Note 6) 23,172,423 13,749,783
Inventories (Note 7) 15,281,893 5,737,068
Amounts owed by related parties (Note 17) 12,436,575 10,606,752
Held-to-maturity (HTM) investments (Note 10) 371,520 521,215
Financial assets at fair value through profit or loss (FVPL) (Note 8) 503 19,447,248
Other current assets (Note 9) 2,618,370 2,534,181
78,392,777 82,373,113
Noncurrent assets held for sale (Note 11) 11,408,611 11,408,611
Total Current Assets 89,801,388 93,781,724
Noncurrent Assets
Property, plant and equipment (Note 11) 28,675,910 23,841,532
Available-for-sale (AFS) financial asset (Note 12) 1,667,000 1,667,000
HTM investments (Note 10) 368,574
Deferred income tax assets - net (Note 23) 174,578 135,555
Other noncurrent assets (Note 13) 2,170,859 893,853
Total Noncurrent Assets 32,688,347 26,906,514
TOTAL ASSETS $122,489,735 $120,688,238

Current Liabilities
Trade and other payables (Note 14) $19,135,593 $13,385,642
Short-term loans (Note 15) 31,625,945 10,835,088
Current portion of long-term debt (Note 16) 6,882,126 5,303,642
Amounts owed to related parties (Note 17) 520,152 495,686
Income tax payable (Note 23) 327,656 123,794
Total Current Liabilities 58,491,472 30,143,852
Long-term debt - net of current portion (Note 16) 36,977,845 17,912,779
Retirement benefit obligation (Note 21) 1,807,847 1,357,811
Deferred income tax liabilities - net (Note 23) 3,373
Total Noncurrent Liabilities 38,789,065 19,270,590
Total Liabilities 97,280,537 49,414,442
Equity
Common stock (Note 28) 9,594,321 9,594,321
Preferred stock (Note 28) 221,239 221,239
Equity reserve 4,138,375 4,138,375
Retained earnings (Note 28) 24,884,576 20,896,548
74,775,733 71,273,796
Parent Company shares held by a subsidiary (Note 28) (49,566,535)
Total Equity 25,209,198 71,273,796
TOTAL LIABILITIES AND EQUITY $122,489,735 $120,688,238
See accompanying Notes to Consolidated Financial Statements.
*SGVFS022305*
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31

2016 2015 2014
NET SALES $74,322,312 $59,548,534 $51,792,081
COST OF SALES (Note 18) (61,566,107) (49,981,847) (44,251,335)
GROSS PROFIT 12,756,205 9,566,687 7,540,746
OPERATING EXPENSES (Note 19) (4,353,603) (3,820,676) (3,328,456)

Interest income (Notes 5, 8 and 10) 380,095 385,973 42,563
Interest expense (Notes 15 and 16) (1,375,227) (1,327,413) (565,460)
(995,132) (941,440) (522,897)
OTHER INCOME - Net (Note 22) 747,890 831,945 2,361,516
INCOME BEFORE INCOME TAX 8,155,360 5,636,516 6,050,909

INCOME TAX (Note 23)
Current 559,457 475,638 202,011
Deferred (12,125) 39,998 4,814
547,332 515,636 206,825
NET INCOME 7,608,028 5,120,880 5,844,084

Remeasurement gains (losses) on retirement
benefit, net of deferred tax (Note 21) (486,091) 208,841 383,993
TOTAL COMPREHENSIVE INCOME $7,121,937 $5,329,721 $6,228,077
Basic/Diluted Earnings Per Share (Note 24) $0.018 $0.013 $0.017
*SGVFS022305*
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
Common Stock Additional Other Parent Company

Undistributed Preferred Paid-in Equity Comprehensive Retained Shares Held by a
Issued Stock Dividends Stock Capital Reserve Income (Loss) Earnings Subsidiary Total
BALANCES AT DECEMBER 31, 2013 $6,559,066 $ $ $4,733,511 $4,138,375 ($66,414) $15,165,652 $ $30,530,190
Net income for the year, as previously
reported 6,541,692 6,541,692
Restatement due to finalization of purchase
price allocation (Note 4) (697,608) (697,608)
Net income for the year, as restated 5,844,084 5,844,084
Total comprehensive income 383,993 5,844,084 6,228,077
Cash dividends declared and paid at $0.00428
per share (1,200,000) (1,200,000)
Declaration of stock dividends 644,803 689,265 (1,334,068)
Cash dividends declared at $0.00214 per
share (600,000) (600,000)
BALANCES AT DECEMBER 31, 2014 7,203,869 689,265 4,733,511 4,138,375 317,579 17,875,668 34,958,267
Net income for the year 5,120,880 5,120,880
Total comprehensive income 208,841 5,120,880 5,329,721
Issuance of additional capital stock:
Common stock (Note 28) 1,701,187 32,322,545 34,023,732
Preferred stock (Note 28) 221,239 221,239
Stock issue costs (Note 28) (1,159,163) (1,159,163)
Issuance of stock dividends (Note 28) 689,265 (689,265)
Cash dividends declared at $0.003893 per
common stock (Note 28) (1,200,000) (1,200,000)
Cash dividends declared at $0.002628 and
$0.000022 per common and preferred
stock, respectively (Note 28) (900,000) (900,000)
BALANCES AT DECEMBER 31, 2015 $9,594,321 $ $221,239 $35,896,893 $4,138,375 $526,420 $20,896,548 $ $71,273,796
(Forward)
*SGVFS022305*
-2-
Common Stock Additional Other Parent Company

Undistributed Preferred Paid-in Equity Comprehensive Retained Shares Held by a
Issued Stock Dividends Stock Capital Reserve Income (Loss) Earnings Subsidiary Total
Net income for the year $ $ $ $ $ $ $7,608,028 $ $7,608,028
Other comprehensive income (486,091) (486,091)
Total comprehensive income (486,091) 7,608,028 7,121,937
stock, respectively (Note 28) (2,100,000) (2,100,000)
stock, respectively (Note 28) (1,520,000) (1,520,000)
Acquisition by subsidiary of the
Parent Companys shares (Note 28) (49,566,535) (49,566,535)
BALANCES AT DECEMBER 31, 2016 $9,594,321 $ $221,239 $35,896,893 $4,138,375 $40,329 $24,884,576 ($49,566,535) $25,209,198
*SGVFS022305*
CONSOLIDATED STATEMENTS OF CASH FLOWS

2016 2015 2014
Income before income tax $8,155,360 $5,636,516 $6,050,909
Adjustments for:
Depreciation and amortization (Note 11) 2,711,632 2,190,004 2,900,520
Interest expense (Notes 15 and 16) 1,375,227 1,327,413 565,460
Interest income (Notes 5, 8 and 10) (380,095) (385,973) (42,563)
Change in fair value of financial assets at FVPL
(Notes 8 and 22) (293,349) 184,985
Gain on disposal of financial assets at FVPL (Note 22) (262,332)
Movement in net retirement benefit obligation
(Note 21) 34,812 6,561 179,765
Excess of the fair value of net assets acquired over the
aggregate consideration transferred (Note 4) (2,041,059)
Net unrealized foreign exchange gains (19,282) (78,835) (28,054)
Operating income before working capital changes 11,615,322 8,402,337 7,769,963
Inventories (9,544,825) 5,031,613 3,414,890
Trade and other receivables (9,508,529) 1,080,734 (7,312,607)
Other current assets (79,881) (663,070) 107,565
Increase (decrease) in trade and other payables 5,823,431 3,631,226 (138,433)
Cash generated from (used in) operations (1,694,482) 17,482,840 3,841,378
Interest received 465,984 228,187 31,704
Income taxes paid (353,536) (715,139) (22,004)
Net cash from (used in) operating activities (1,582,034) 16,995,888 3,851,078
Acquisitions of:
Property, plant and equipment (Note 11) (7,546,010) (9,016,368) (1,860,794)
Financial assets at FVPL (18,494,471) 7,353,292
AFS financial asset (1,667,000)
Proceeds from disposal of financial assets at FVPL 19,709,049
Redemption of HTM investments 518,269 209,453
Decrease in other noncurrent assets (1,291,781) 68,651 39,231
Net payment for the acquisition of REMEC entities
(Note 4) (7,173,926)
Net cash from (used in) investing activities $11,389,527 ($28,899,735) ($1,642,197)
(Forward)
*SGVFS022305*
-2-

2016 2015 2014
Proceeds from availment of:
Short-term loans (Note 15) $22,080,857 $11,135,088 $3,300,000
Long-term debt (Note 16) 30,000,000 10,000,000
Proceeds from issuance of:
Common stock 34,023,732
Preferred stock 221,239
Payments of:
Cash dividends (3,620,000) (2,100,000) (1,800,000)
Interest (1,271,687) (1,499,983) (415,198)
Long-term debts (9,121,198) (3,761,921) (3,495,131)
Short-term loans (1,290,000) (2,400,000) (1,100,000)
Debt issuance costs (Note 16) (321,605)
Stock issue costs (1,141,435)
Acquisition by subsidiary of the Parent Companys shares
(Note 28) (49,566,535)
related parties (1,805,357) (5,458,135) (3,169,115)
Net cash from (used in) financing activities (14,915,525) 29,018,585 3,320,556
ON CASH AND CASH EQUIVALENTS (157,341) 59,806 49,138
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (5,265,373) 17,174,544 5,578,575
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 29,776,866 12,602,322 7,023,747
CASH AND CASH EQUIVALENTS AT
END OF YEAR (Note 5) $24,511,493 $29,776,866 $12,602,322
*SGVFS022305*
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
Cirtek Holdings Philippines Corporation (CHPC or the Parent Company) was incorporated
under the laws of the Republic of the Philippines on February 10, 2011 to invest in, purchase or
acquire personal property of every kind, including shares of stocks, bonds, debentures, notes,
evidences of indebtedness, and other securities.
The Parent Company was listed in the Philippine Stock Exchange on November 18, 2011.
Prior to the listing, the Parent Company had undergone a corporate reorganization on
March 1, 2011 which includes an acquisition from Cirtek Holdings, Inc. (CHI) of 155,511,952
common shares of Cirtek Electronics Corporation (CEC), and 50,000 shares of Cirtek Electronics
International Corporation (CEIC), representing 100% of the outstanding capital stock of both
companies. The above transaction was treated as a business combination of entities under
common control and was accounted for similar to pooling-of-interests method.
Camerton Inc. (Camerton) is the immediate parent of CHPC, while Carmetheus Holdings, Inc. is
the ultimate parent company of CHPC and its subsidiaries (the Group).
The Group is primarily engaged in the manufacture and sale of semiconductor packages as an
independent subcontractor for outsourced semiconductor assembly, test and packaging services.
CEC manufactures standard integrated circuits, discrete, hybrid and potential new packages and
provides complete turnkey solutions that include wafer probing, wafer back grinding, assembly
and packaging and final testing of semiconductor devices with majority of its client base located in
United States of America (USA). CEIC sells integrated circuits principally in the USA and
assigns the production of the same to CEC. The Parent Companys registered address is 116 East
Main Avenue, Phase V-SEZ, Laguna Technopark, Bian, Laguna.
Business Acquisition
On July 30, 2014, CEIC entered into a sale and purchase agreement with REMEC Broadband
Wireless Holdings (REMEC), for the purchase of 100% shares of REMECs manufacturing
division, REMEC Broadband Wireless International, Inc. (RBWI), a Philippine-based
manufacturer of value-added, highly integrated technology products. Based on the terms of the
sale, REMEC and its remaining subsidiaries will continue to design and market its top-of-class
telecommunications products globally under its REMEC brand, and, REMEC will enter into a
manufacturing agreement with RBWI to manufacture REMECs products under a long-term
contract manufacturing relationship. CEIC acquired RBWI for a consideration of $7.5 million.
CHPC funded the acquisition through a combination of available cash on hand and proceeds from
a corporate notes issuance.
The closing date of the transaction is effective July 30, 2014 (see Note 4).
RBWI is primarily engaged in the manufacture, fabrication and design of microwave components
and subsystems primarily for export. RBWI was renamed to Cirtek Advanced Technologies and
Solutions, Inc. (CATS) on November 21, 2014 at the British Virgin Islands and on
February 18, 2015 at the Philippine Securities and Exchange Commission (SEC).
*SGVFS022305*
-2-
Authorization and issuance of consolidated financial statements

The consolidated financial statements of the Group as at December 31, 2016 and 2015 and for
each of the three years ended December 31, 2016 were approved and authorized for issuance by
the Board of Directors (BOD) on April 12, 2017.
2. Basis of Presentation, Statement of Compliance, Basis of Consolidation and Summary of

Significant Accounting Policies
Basis of Preparation
The consolidated financial statements of the Group are prepared on a historical cost basis except
for financial assets at FVPL which are carried at fair value. The consolidated financial statements
are presented in United States (US) dollars ($), which is the Parent Companys functional and
presentation currency. All amounts are rounded off to the nearest US dollar except when
otherwise indicated.
Statement of Compliance
The consolidated financial statements of the Group have been prepared in accordance with
Philippine Financial Reporting Standards (PFRS) as issued by the Financial Reporting Standards
Council (FRSC). PFRS includes statements named PFRS, Philippine Accounting Standards
(PAS) and Philippine Interpretations based on International Financial Reporting Interpretations
Committee (IFRIC) Interpretations issued by the Philippine Interpretations Committee.
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Parent Company
and its subsidiaries as of December 31, 2016 and 2015 (see Notes 1 and 4):
Country of 2016 2015
Incorporation Direct Indirect Direct Indirect
CEC Philippines 100 100
CEIC British Virgin Islands (BVI) 100 100
CATS (formerly known as
RBWI) BVI 100 100
CATS - Philippine Branch Philippines 100 100
Remec Broadband Wireless
Real Property (RBWRP) Philippines 100 100
Specifically, the Group controls an investee if, and only if, the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
*SGVFS022305*
-3-
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements;
The Groups voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the statement of comprehensive income from the date
the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the Parent Company and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance. When necessary, adjustments are made to
the stand-alone financial statements of subsidiaries to bring their accounting policies into line with
the Groups accounting policies. All intra-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction. If the Group loses control over a subsidiary, it:
Derecognizes the assets (including goodwill) and liabilities of the subsidiary;

Derecognizes the carrying amount of any non-controlling interests;
Derecognizes the cumulative translation differences recorded in equity;
Recognizes the fair value of the consideration received;
Recognizes the fair value of any investment retained;
Recognizes any surplus or deficit in profit or loss; and
Reclassifies the parents share of components previously recognized in OCI to profit or loss or
retained earnings, as appropriate, as would be required if the Group had directly disposed of
the related assets or liabilities.
Common control business combinations
Where there are group reorganizations and business combinations in which all the combining
entities within the Group are ultimately controlled by the same ultimate parent (i.e., controlling
shareholders) before and after the business combination and the control is not transitory (business
combinations under common control), the Group accounts for such group reorganizations and
business combinations similar to a pooling-of-interests method. The assets and liabilities of the
acquired entities and that of the Company are reflected at their carrying values at the stand-alone
financial statements of the investee companies. The difference in the amount recognized and the
fair value of the consideration given is accounted for as an equity transaction, i.e., as either a
contribution or distribution of equity. Further, when a subsidiary is disposed in a common control
transaction without loss of control, the difference in the amount recognized and the fair value of
consideration received is also accounted for as an equity transaction.
The Group records the difference as equity reserve and is presented as a separate component of
equity in the consolidated balance sheet. Comparatives shall be restated to include balances and
transactions as if the entities have been acquired at the beginning of the earliest period presented in
the consolidated financial statements, regardless of the actual date of the combination.
*SGVFS022305*
-4-
Changes in Accounting Policies and Disclosures

The accounting policies adopted are consistent with those of the previous financial year, except
that the Group has adopted the following new accounting pronouncements starting
January 1, 2016. These pronouncements are either not applicable to the Group or their adoption
did not have a significant impact on the Groups financial position or performance.
Amendments to PFRS 10, Consolidated Financial Statements, PFRS 12, Disclosure of

Interests in Other Entities, and PAS 28, Investments in Associates and Joint Ventures,
Investment Entities: Applying the Consolidation Exception
These amendments clarify that the exemption in PFRS 10 from presenting consolidated
financial statements applies to a parent entity that is a subsidiary of an investment entity that
measures all of its subsidiaries at fair value. They also clarify that only a subsidiary of an
investment entity that is not an investment entity itself and that provides support services to
the investment entity parent is consolidated. The amendments also allow an investor (that is
not an investment entity and has an investment entity associate or joint venture) to retain the
fair value measurement applied by the investment entity associate or joint venture to its
interests in subsidiaries when applying the equity method.
Amendments to PFRS 11, Joint Arrangements, Accounting for Acquisitions of Interests in

Joint Operations
The amendments to PFRS 11 require a joint operator that is accounting for the acquisition of
an interest in a joint operation, in which the activity of the joint operation constitutes a
business (as defined by PFRS 3, Business Combinations), to apply the relevant PFRS 3
principles for business combinations accounting. The amendments also clarify that a
previously held interest in a joint operation is not remeasured on the acquisition of an
additional interest in the same joint operation while joint control is retained. In addition, a
scope exclusion has been added to PFRS 11 to specify that the amendments do not apply when
the parties sharing joint control, including the reporting entity, are under common control of
the same ultimate controlling party.
The amendments apply to both the acquisition of the initial interest in a joint operation and the
acquisition of any additional interests in the same joint operation.
PFRS 14, Regulatory Deferral Accounts
PFRS 14 is an optional standard that allows an entity, whose activities are subject to rate-
regulation, to continue applying most of its existing accounting policies for regulatory deferral
account balances upon its first-time adoption of PFRS. Entities that adopt PFRS 14 must
present the regulatory deferral accounts as separate line items on the statement of financial
position and present movements in these account balances as separate line items in the
statement of income and other comprehensive income. The standard requires disclosures on
the nature of, and risks associated with, the entitys rate-regulation and the effects of that rate-
regulation on its consolidated financial statements.
*SGVFS022305*
-5-
Amendments to PAS 1, Presentation of Financial Statements, Disclosure Initiative
The amendments are intended to assist entities in applying judgment when meeting the
presentation and disclosure requirements in PFRSs. They clarify the following:
That entities shall not reduce the understandability of their financial statements by either
obscuring material information with immaterial information; or aggregating material items
that have different natures or functions
That specific line items in the statement of income and other comprehensive income and
the statement of financial position may be disaggregated
That entities have flexibility as to the order in which they present the notes to financial
statements
That the share of other comprehensive income of associates and joint ventures accounted
for using the equity method must be presented in aggregate as a single line item, and
classified between those items that will or will not be subsequently reclassified to profit or
loss.
Amendments to PAS 16, Property, Plant and Equipment and PAS 38, Intangible Assets,
Clarification of Acceptable Methods of Depreciation and Amortization
The amendments clarify the principle in PAS 16 and PAS 38 that revenue reflects a pattern of
economic benefits that are generated from operating a business (of which the asset is part)
rather than the economic benefits that are consumed through use of the asset. As a result, a
revenue-based method cannot be used to depreciate property, plant and equipment and may
only be used in very limited circumstances to amortize intangible assets.
Amendments to PAS 16 and PAS 41, Agriculture: Bearer Plants
The amendments change the accounting requirements for biological assets that meet the
definition of bearer plants. Under the amendments, biological assets that meet the definition of
bearer plants will no longer be within the scope of PAS 41. Instead, PAS 16 will apply. After
initial recognition, bearer plants will be measured under PAS 16 at accumulated cost (before
maturity) and using either the cost model or revaluation model (after maturity). The
amendments also require that produce that grows on bearer plants will remain in the scope of
PAS 41 measured at fair value less costs to sell. For government grants related to bearer
plants, PAS 20, Accounting for Government Grants and Disclosure of Government Assistance,
will apply.
Amendments to PAS 27, Separate Financial Statements, Equity Method in Separate Financial
Statements
The amendments allow entities to use the equity method to account for investments in
subsidiaries, joint ventures and associates in their separate financial statements. Entities
already applying PFRS and electing to change to the equity method in its separate financial
statements will have to apply that change retrospectively.
*SGVFS022305*
-6-
Annual Improvements to PFRSs 2012 - 2014 Cycle
Amendment to PFRS 5, Non-current Assets Held for Sale and Discontinued Operations,
Changes in Methods of Disposal
The amendment is applied prospectively and clarifies that changing from a disposal
through sale to a disposal through distribution to owners and vice-versa should not be
considered to be a new plan of disposal, rather it is a continuation of the original plan.
There is, therefore, no interruption of the application of the requirements in PFRS 5. The
amendment also clarifies that changing the disposal method does not change the date of
classification.
Amendment to PFRS 7, Financial Instruments: Disclosures, Servicing Contracts
PFRS 7 requires an entity to provide disclosures for any continuing involvement in a

transferred asset that is derecognized in its entirety. The amendment clarifies that a
servicing contract that includes a fee can constitute continuing involvement in a financial
asset. An entity must assess the nature of the fee and arrangement against the guidance for
continuing involvement in PFRS 7 in order to assess whether the disclosures are required.
The amendment is to be applied such that the assessment of which servicing contracts
constitute continuing involvement will need to be done retrospectively. However,
comparative disclosures are not required to be provided for any period beginning before
the annual period in which the entity first applies the amendments.
Amendment to PFRS 7, Applicability of the Amendments to PFRS 7 to Condensed Interim

This amendment is applied retrospectively and clarifies that the disclosures on offsetting
of financial assets and financial liabilities are not required in the condensed interim
financial report unless they provide a significant update to the information reported in the
most recent annual report.
Amendment to PAS 19, Employee Benefits, Discount Rate: Regional Market Issue
This amendment is applied prospectively and clarifies that market depth of high quality
corporate bonds is assessed based on the currency in which the obligation is denominated,
rather than the country where the obligation is located. When there is no deep market for
high quality corporate bonds in that currency, government bond rates must be used.
Amendment to PAS 34, Interim Financial Reporting, Disclosure of Information

Elsewhere in the Interim Financial Report
The amendment is applied retrospectively and clarifies that the required interim
disclosures must either be in the interim financial statements or incorporated by cross-
reference between the interim financial statements and wherever they are included within
the greater interim financial report (e.g., in the management commentary or risk report).
*SGVFS022305*
-7-
Pronouncements issued but not yet effective are listed below. Unless otherwise indicated, the
Group does not expect that the future adoption of the said pronouncements to have a significant
impact on its consolidated financial statements. The Group intends to adopt the following
pronouncements when they become effective.
Effective beginning on or after January 1, 2017
Amendment to PFRS 12, Clarification of the Scope of the Standard (Part of Annual
Improvements to PFRSs 2014 - 2016 Cycle)
The amendments clarify that the disclosure requirements in PFRS 12, other than those relating
to summarized financial information, apply to an entitys interest in a subsidiary, a joint
venture or an associate (or a portion of its interest in a joint venture or an associate) that is
classified (or included in a disposal group that is classified) as held for sale.
The amendments do not have any impact on the Groups financial position and results of
operation. The Group will include the required disclosures in its 2017 consolidated financial
statements.
Amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative
The amendments to PAS 7 require an entity to provide disclosures that enable users of
financial statements to evaluate changes in liabilities arising from financing activities,
including both changes arising from cash flows and non-cash changes (such as foreign
exchange gains or losses). On initial application of the amendments, entities are not required
to provide comparative information for preceding periods. Early application of the
amendments is permitted.
The amendments do not have any impact on the Groups financial position and results of
operation. The Group will include the required disclosures in its 2017 consolidated financial
statements.
Amendments to PAS 12, Income Taxes, Recognition of Deferred Tax Assets for Unrealized
Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources
of taxable profits against which it may make deductions on the reversal of that deductible
temporary difference. Furthermore, the amendments provide guidance on how an entity should
determine future taxable profits and explain the circumstances in which taxable profit may
include the recovery of some assets for more than their carrying amount.
Entities are required to apply the amendments retrospectively. However, on initial application
of the amendments, the change in the opening equity of the earliest comparative period may
be recognized in opening retained earnings (or in another component of equity, as
appropriate), without allocating the change between opening retained earnings and other
components of equity. Entities applying this relief must disclose that fact. Early application of
the amendments is permitted.
These amendments are not expected to have any impact on the Group.
*SGVFS022305*
-8-
Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-

based Payment Transactions
The amendments to PFRS 2 address three main areas: the effects of vesting conditions on the
measurement of a cash-settled share-based payment transaction; the classification of a share-
based payment transaction with net settlement features for withholding tax obligations; and
the accounting where a modification to the terms and conditions of a share-based payment
transaction changes its classification from cash settled to equity settled.
On adoption, entities are required to apply the amendments without restating prior periods, but
retrospective application is permitted if elected for all three amendments and if other criteria
are met. Early application of the amendments is permitted.
These amendments are not applicable to the Group.
Amendments to PFRS 4, Insurance Contracts, Applying PFRS 9, Financial Instruments, with

PFRS 4
The amendments address concerns arising from implementing PFRS 9, the new financial
instruments standard before implementing the forthcoming insurance contracts standard. They
allow entities to choose between the overlay approach and the deferral approach to deal with
the transitional challenges. The overlay approach gives all entities that issue insurance
contracts the option to recognize in other comprehensive income, rather than profit or loss, the
volatility that could arise when PFRS 9 is applied before the new insurance contracts standard
is issued. On the other hand, the deferral approach gives entities whose activities are
predominantly connected with insurance an optional temporary exemption from applying
PFRS 9 until the earlier of application of the forthcoming insurance contracts standard or
January 1, 2021.
The overlay approach and the deferral approach will only be available to an entity if it has not
previously applied PFRS 9.
The amendments are not applicable to the Group since none of the entities within the Group
have activities that are predominantly connected with insurance or issue insurance contracts.
PFRS 15, Revenue from Contracts with Customers
PFRS 15 establishes a new five-step model that will apply to revenue arising from contracts
with customers. Under PFRS 15, revenue is recognized at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods or
services to a customer. The principles in PFRS 15 provide a more structured approach to
measuring and recognizing revenue.
The new revenue standard is applicable to all entities and will supersede all current revenue
recognition requirements under PFRSs. Either a full or modified retrospective application is
required for annual periods beginning on or after January 1, 2018. The Group is currently
assessing the impact of PFRS 15.
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PFRS 9, Financial Instruments
PFRS 9 reflects all phases of the financial instruments project and replaces PAS 39, Financial
Instruments: Recognition and Measurement, and all previous versions of PFRS 9. The
standard introduces new requirements for classification and measurement, impairment, and
hedge accounting. PFRS 9 is effective for annual periods beginning on or after
January 1, 2018, with early application permitted. Retrospective application is required, but
providing comparative information is not compulsory. For hedge accounting, the requirements
are generally applied prospectively, with some limited exceptions.
The adoption of PFRS 9 will have an effect on the classification and measurement of the
Groups financial assets and impairment methodology for financial assets, but will have no
impact on the classification and measurement of the Groups financial liabilities. The adoption
will also have an effect on the Groups application of hedge accounting and on the amount of
its credit losses. The Group is currently assessing the impact of adopting this standard.
Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value (Part of
Annual Improvements to PFRSs 2014 - 2016 Cycle)
The amendments clarify that an entity that is a venture capital organization, or other qualifying
entity, may elect, at initial recognition on an investment-by-investment basis, to measure its
investments in associates and joint ventures at fair value through profit or loss. They also
clarify that if an entity that is not itself an investment entity has an interest in an associate or
joint venture that is an investment entity, the entity may, when applying the equity method,
elect to retain the fair value measurement applied by that investment entity associate or joint
venture to the investment entity associates or joint ventures interests in subsidiaries. This
election is made separately for each investment entity associate or joint venture, at the later of
the date on which (a) the investment entity associate or joint venture is initially recognized; (b)
the associate or joint venture becomes an investment entity; and (c) the investment entity
associate or joint venture first becomes a parent. The amendments should be applied
retrospectively, with earlier application permitted.
Amendments to PAS 40, Investment Property, Transfers of Investment Property
The amendments clarify when an entity should transfer property, including property under
construction or development into, or out of investment property. The amendments state that a
change in use occurs when the property meets, or ceases to meet, the definition of investment
property and there is evidence of the change in use. A mere change in managements
intentions for the use of a property does not provide evidence of a change in use. The
amendments should be applied prospectively to changes in use that occur on or after the
beginning of the annual reporting period in which the entity first applies the amendments.
Retrospective application is only permitted if this is possible without the use of hindsight.
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Philippine Interpretation on IFRIC 22, Foreign Currency Transactions and Advance

Consideration
The interpretation clarifies that in determining the spot exchange rate to use on initial
recognition of the related asset, expense or income (or part of it) on the derecognition of a
non-monetary asset or non-monetary liability relating to advance consideration, the date of the
transaction is the date on which an entity initially recognizes the nonmonetary asset or non-
monetary liability arising from the advance consideration. If there are multiple payments or
receipts in advance, then the entity must determine a date of the transactions for each payment
or receipt of advance consideration. The interpretation may be applied on a fully retrospective
basis. Entities may apply the interpretation prospectively to all assets, expenses and income in
its scope that are initially recognized on or after the beginning of the reporting period in which
the entity first applies the interpretation or the beginning of a prior reporting period presented
as comparative information in the financial statements of the reporting period in which the
entity first applies the interpretation.
The adoption of the interpretation is not expected to have any significant impact on the
consolidated financial statements.
PFRS 16, Leases
Under the new standard, lessees will no longer classify their leases as either operating or
finance leases in accordance with PAS 17, Leases. Rather, lessees will apply the single-asset
model. Under this model, lessees will recognize the assets and related liabilities for most
leases on their balance sheets, and subsequently, will depreciate the lease assets and recognize
interest on the lease liabilities in their profit or loss. Leases with a term of 12 months or less or
for which the underlying asset is of low value are exempted from these requirements.
The accounting by lessors is substantially unchanged as the new standard carries forward the
principles of lessor accounting under PAS 17. Lessors, however, will be required to disclose
more information in their financial statements, particularly on the risk exposure to residual
value.
Entities may early adopt PFRS 16 but only if they have also adopted PFRS 15. When
adopting PFRS 16, an entity is permitted to use either a full retrospective or a modified
retrospective approach, with options to use certain transition reliefs.
The Group is currently assessing the impact of adopting PFRS 16.
Deferred effectivity
Amendments to PFRS 10 and PAS 28, Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of
control of a subsidiary that is sold or contributed to an associate or joint venture. The
amendments clarify that a full gain or loss is recognized when a transfer to an associate or
joint venture involves a business as defined in PFRS 3, Business Combinations. Any gain or
loss resulting from the sale or contribution of assets that does not constitute a business,
however, is recognized only to the extent of unrelated investors interests in the associate or
joint venture.
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On January 13, 2016, the FRSC postponed the original effective date of January 1, 2016 of the
said amendments until the International Accounting Standards Board has completed its
broader review of the research project on equity accounting that may result in the
simplification of accounting for such transactions and of other aspects of accounting for
associates and joint ventures.
Summary of Significant Accounting Policies
Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
In the principal market for the asset or liability, or

In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Group. The fair value of
an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participants ability
to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognized in the consolidated financial statements on a recurring
basis, the Group determines whether transfers have occurred between Levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained above.
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Cash and Cash Equivalents

Cash includes cash on hand and in banks. Cash in banks earn interest at the respective bank
deposit rates. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash with original maturities of three months or less from dates
of acquisition and that are subject to an insignificant risk of change in value.
Financial Instruments
Financial assets
Initial recognition
Financial assets within the scope of PAS 39 are classified as either financial assets at FVPL, loans
and receivables, HTM investments, AFS financial assets, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. The Group determines the classification of its
financial assets at initial recognition and, where allowed and appropriate, re-evaluates such
classifications at every reporting date.
Financial assets are recognized initially at fair value plus, in the case of investments not at FVPL,
directly attributable transaction costs.
Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the marketplace (regular way purchases) are recognized on the
trade date, i.e., the date that the Group commits to purchase or sell the asset.
The Groups financial assets include cash and cash equivalents, trade and other receivables,
financial assets at FVPL, HTM investments, AFS financial asset, amounts owed by related parties,
loans to employees (reported as part of Other current assets and Other noncurrent assets in the
consolidated balance sheet) and deposits (reported as part of Other current assets and Other
noncurrent assets in the consolidated balance sheet).
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at FVPL

Financial assets at FVPL include financial assets held for trading and financial assets designated
upon initial recognition as at FVPL. Financial assets are classified as held for trading if they are
acquired for the purpose of selling in the near term. Derivatives, including separated embedded
derivatives, are also classified as held for trading unless they are designated as effective hedging
instruments. Financial assets at FVPL are carried in the consolidated balance sheet at fair value
with gains or losses recognized in profit or loss.
Derivatives embedded in host contracts are accounted for as separate derivatives when their risks
and characteristics are not closely related to those of the host contracts and the host contracts are
not held for trading or designated at FVPL. These embedded derivatives are measured at fair
value with gains or losses arising from changes in fair value recognized in profit or loss.
Reassessment only occurs if there is a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required or a reclassification of a financial asset
out of FVPL.
Financial assets designated as FVPL are designated by management on initial recognition when
any of the following criteria are met:
The designation eliminates or significantly reduces the inconsistent treatment that would
otherwise arise from measuring the assets or liabilities or recognizing gains or losses on them
on a different basis; or
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The assets and liabilities are part of a group of financial assets, financial liabilities or both
which are managed and their performance evaluated on a fair value basis, in accordance with
a documented risk management or investment strategy; or
The financial instrument contains an embedded derivative, unless the embedded derivative
does not significantly modify the cash flows or it is clear, with little or no analysis, that it
would not be separately recorded.
As of December 31, 2016 and 2015, the Group designated its investments in Unit Investment
Trust Fund (UITF) and Rizal Commercial Banking Corporation (RCBC) Senior Notes as financial
assets at FVPL.
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Such financial assets are carried at amortized cost using the
effective interest rate (EIR) method, less impairment. This method uses an EIR that exactly
discounts estimated cash receipts through the expected life of the financial assets to the net
carrying amount of the financial asset. Gains and losses are recognized in profit or loss when the
loans and receivables are derecognized or impaired, as well as through the amortization process.
Assets in this category are included in current assets except for maturities greater than 12 months
after the end of the reporting period, which are classified as noncurrent assets.
As of December 31, 2016 and 2015, the Group has designated as loans and receivables its cash in
banks and cash equivalents, trade and other receivables, amounts owed by related parties, security
deposit, loans to employees (reported as part of Other current assets and Other noncurrent
assets in the consolidated balance sheet) and deposits (reported as part of Other current assets
and Other noncurrent assets in the consolidated balance sheet).
HTM investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are
classified as HTM when the Group has the positive intention and ability to hold it to maturity.
After initial measurement, HTM investments are measured at amortized cost using the EIR
method, less impairment. Amortized cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are integral part of the EIR. Gains and losses are
recognized in profit or loss when the investments are derecognized or impaired, as well as through
the amortization process.
As of December 31, 2016 and 2015, the Group has HTM investments in Philippine government
securities.
AFS financial assets

AFS financial assets are non-derivative financial assets that are designated as AFS or are not
classified in any of the three preceding categories. They are purchased and held indefinitely, and
may be sold in response to liquidity requirements or change in market conditions. After initial
measurement, AFS financial assets are measured at fair value with unrealized gains or losses
recognized directly in equity until the investment is derecognized, at which time the cumulative
gain or loss recorded in equity is recognized in profit or loss, or determined to be impaired, at
which time the cumulative loss recorded in equity is recognized in profit or loss.
As of December 31, 2016 and 2015, the Groups AFS financial asset pertains to unquoted equity
shares of CloudMondo, Ltd.
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Financial liabilities
Initial recognition
Financial liabilities within the scope of PAS 39 are classified as financial liabilities at FVPL, other
financial liabilities, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate. The Group determines the classification of its financial liabilities at initial
recognition and, where allowed and appropriate, re-evaluates such designation at every financial
reporting date.
Financial liabilities are recognized initially at fair value and, in the case of financial liabilities not
at FVPL, net of directly attributable transaction costs.
The Groups financial liabilities include trade and other payables, short-term loans, long-term debt
and amounts owed to related parties.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at FVPL
Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities
designated upon initial recognition at FVPL.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling
in the near term. This category includes derivative financial instruments entered into by the Group
that do not meet the hedge accounting criteria as defined by PAS 39.
Gains and losses on liabilities held for trading are recognized in profit or loss.
The Group does not have a financial liability at FVPL as of December 31, 2016 and 2015.
Other financial liabilities
Other financial liabilities are initially recognized at fair value of the consideration received, less
directly attributable transaction costs. After initial recognition, other financial liabilities are
measured at amortized cost using the EIR method. Amortized cost is calculated by taking into
account any related issue costs, discount or premium. Gains and losses are recognized in profit or
loss when the liabilities are derecognized, as well as through the amortization process.
As of December 31, 2016 and 2015, the Groups other financial liabilities includes trade and other
payables, short-term loans, amount owed to related parties and long-term debt.
Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated
balance sheet if there is a currently enforceable legal right to offset the recognized amounts and
there is intention to settle on a net basis, or to realize the asset and settle the liability
simultaneously. The Group assesses that it has a currently enforceable right of offset if the right is
not contingent on a future event, and is legally enforceable in the normal course of business, event
of default, and event of insolvency or bankruptcy of the Group and all of the counterparties.
Day 1 difference
Where the transaction price in a non-active market is different from the fair value of other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Group recognizes the difference
between the transaction price and fair value (a Day 1 difference) in profit or loss unless it
*SGVFS022305*
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qualifies for recognition as some other type of asset. In cases where use is made of data which is
not observable, the difference between the transaction price and model value is only recognized in
the profit or loss when the inputs become observable or when the instrument is derecognized. For
each transaction, the Group determines the appropriate method of recognizing the Day 1
difference amount.
Classification of Financial Instruments between Debt and Equity

A financial instrument is classified as debt if it provides for a contractual obligation to:
deliver cash or another financial asset to another entity; or

exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Group; or
satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.
If the Group does not have an unconditional right to avoid delivering cash or another financial
asset to settle its contractual obligation, the obligation meets the definition of a financial liability.
The components of issued financial instruments that contain both liability and equity elements are
accounted for separately, with the equity component being assigned the residual amount after
deducting from the instrument as a whole the amount separately determined as the fair value of the
liability component on the date of issue.
Impairment of Financial Assets

The Group assesses, at each balance sheet date, whether there is any objective evidence that a
financial asset or a group of financial assets is impaired. A financial asset or a group of financial
assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a
result of one or more events that has occurred after the initial recognition of the asset (an incurred
loss event) and that loss event (or events) has an impact on the estimated future cash flows of the
financial asset or the group of financial assets that can be reliably estimated. Objective evidence
of impairment may include indications that the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency in interest or principal payments, the
probability that they will enter bankruptcy or other financial reorganization and where observable
data indicate that there is a measurable decrease in the estimated future cash flows, such as
changes in arrears or economic conditions that correlate with defaults. If such evidence exists, any
impairment loss is recognized in profit or loss.
Financial assets carried at amortized cost

The Group first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant, or collectively for financial assets that are not
individually significant. If it is determined that no objective evidence of impairment exists for an
individually assessed financial asset, whether significant or not, the asset is included in a group of
financial assets with similar credit risk characteristics and that group of financial assets is
collectively assessed for impairment. Assets that are individually assessed for impairment and for
which an impairment loss is or continues to be recognized are not included in a collective
assessment of impairment.
If there is objective evidence that an impairment loss on loans and receivables carried at amortized
cost has been incurred, the amount of the loss is measured as the difference between the assets
carrying amount and the present value of estimated future cash flows (excluding future credit
losses that have not been incurred) discounted at the financial assets original EIR (i.e., the EIR
computed at initial recognition). The carrying amount of the asset shall be reduced either directly
or through the use of an allowance account. The amount of the loss shall be recognized in profit
*SGVFS022305*
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or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease
can be related objectively to an event occurring after the impairment was recognized, the
previously recognized impairment loss is reversed. Any subsequent reversal of an impairment
loss is recognized in profit or loss, to the extent that the carrying value of the asset does not exceed
its amortized cost at the reversal date.
Financial assets carried at cost

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not
carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that
is linked to and must be settled by delivery of such an unquoted equity instrument has been
incurred, the amount of the loss is measured as the difference between the assets carrying amount
and the present value of estimated future cash flows discounted at the current market rate of return
for a similar financial asset.
Derecognition of Financial Instruments

Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognized where:
the rights to receive cash flows from the asset have expired;
the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
pass-through arrangement; and
either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b)
the Group has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
Where the Group has transferred its rights to receive cash flows from an asset or has entered into
pass through arrangement and has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the
Groups continuing involvement in the asset. In this case the Group also recognizes an associated
liability. The transferred asset and the associated liability are measured on a basis that reflects the
rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
When continuing involvement takes the form of a written and/or purchased option (including a
cash settled option or similar provision) on the transferred asset, the extent of the Groups
continuing involvement is the amount of the transferred asset that the Group may repurchase,
except that in the case of a written put option (including a cash settled option or similar provision)
on an asset measured at fair value, the extent of the Groups continuing involvement is limited to
the lower of the fair value of the transferred asset and the option exercise price.
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expired.
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When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognized in profit or loss.
Inventories
Inventories are valued at the lower of cost and net realizable value (NRV). Costs incurred in
bringing each inventory to its present location and condition are accounted for as follows:
Raw materials, spare parts, - purchase cost on a first-in, first-out basis (FIFO);
supplies and others
Finished goods and work-in- - cost of direct materials and labor and a proportion of
process inventories manufacturing overhead cost. Costs are determined on a
standard cost basis. Standard costs take into account
normal levels of materials and supplies, labor, efficiency
and capacity utilization. They are regularly reviewed and,
if necessary, revised in light of current conditions.
NRV of finished goods and work-in-process inventories is the estimated selling price in the
ordinary course of business, less estimated costs of completion and the estimated costs necessary
to make the sale. NRV of raw materials, supplies, spare parts and others is the current
replacement cost.
Property, Plant and Equipment

Property, plant and equipment, except land, are stated at cost and costs of day-to-day servicing,
less accumulated depreciation and any accumulated impairment in value. Such cost includes the
cost of replacing part of such property, plant and equipment and borrowing cost when that cost is
incurred and if the recognition criteria are met. Repairs and maintenance are recognized in profit
or loss as incurred. Land is carried at cost less any impairment in value.
Depreciation commences when an asset is in its location and condition and capable of being
operated in the manner intended by management. Depreciation is calculated on a straight-line
method over the estimated useful lives of the property, plant and equipment as follows:
Category Number of Years

Machinery and equipment 10-15
Buildings and improvements 5-25
Facility and production tools 5-8
Furniture, fixtures and equipment 2-5
Transportation equipment 5-7
The property, plant and equipments residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each balance sheet date.
When each major inspection is performed, its cost is recognized in the carrying amount of the
property, plant and equipment as a replacement if the recognition criteria are satisfied.
Construction in progress represents property under construction and is stated at cost. This
includes costs of construction and other direct costs. Construction in progress is not depreciated
until such time that the relevant assets are completed and put into operational use.
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Fully depreciated assets are retained in the accounts until these are no longer in use. When assets
are retired or otherwise disposed of, both the cost and related accumulated depreciation and any
allowance for impairment losses are removed from the accounts and any resulting gain or loss is
credited or charged to current operations.
An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and carrying amount of
the asset) is included in profit or loss in the year the asset is derecognized.
Noncurrent Assets Held for Sale

Property, plant and equipment are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction expected to be completed within one year from the
date of classification, rather than through continuing use. Property, plant and equipment held for
sale are stated at the lower of carrying amount and fair value less costs to sell.
The criteria for held for sale classification is regarded as met only when the sale or distribution is
highly probable and the asset or disposal group is available for immediate sale in its present
condition. Actions required to complete the sale should indicate that it is unlikely that significant
changes to the sale will be made or that the sale will be withdrawn. Management must be
committed to the sale expected within one year from the date of the classification, unless the delay
is caused by events or circumstances beyond the Groups control and there is sufficient evidence
that the Group remains committed to its plan to sell the assets.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest and other costs that the Group incurs in
connection with the borrowing of funds. Foreign currency exchange differences are included in
the determination of borrowing costs to be capitalized, but only to the extent that they are an
adjustment to the interest cost on the borrowing.
Research and Development Costs

Research costs are expensed as incurred. Development expenditures on an individual project are
recognized as an intangible asset when the Group can demonstrate:
the technical feasibility of completing the intangible asset so that the asset will be available for
use or sale;
its intention to complete and its ability to use or sell the asset;
how the asset will generate future economic benefits;
the availability of resources to complete the asset; and
the ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost
less any accumulated amortization and accumulated impairment losses. Amortization of the asset
begins when development is complete and the asset is available for use. It is amortized over the
period of expected future benefit, which is estimated to be five (5) to ten (10) years. Amortization
is recorded in cost of sales. During the period of development, the asset is tested for impairment
annually.
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Business Combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration transferred measured at acquisition date fair
value and the amount of any non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the non-controlling interests in the acquiree at
fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition-related
costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as of the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured
at its acquisition date fair value and any resulting gain or loss is recognized in the consolidated
statement of comprehensive income.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at
the acquisition date. Contingent consideration classified as an asset or liability that is a financial
instrument and within the scope of PAS 39 is measured at fair value with changes in fair value
recognized either in the consolidated statement of comprehensive income or as a change to OCI.
If the contingent consideration is not within the scope of PAS 39, it is measured in accordance
with the appropriate PFRS. Contingent consideration that is classified as equity is not remeasured
and subsequent settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interests, and any previous interest held,
over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets
acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it
has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the
procedures used to measure the amounts to be recognized at the acquisition date. If the
reassessment still results in an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Groups cash-generating units (CGUs) that are expected
to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.
Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed
of, the goodwill associated with the disposed operation is included in the carrying amount of the
operation when determining the gain or loss on disposal. Goodwill disposed in these
circumstances is measured based on the relative values of the disposed operation and the portion
of the CGU retained.
Impairment of Nonfinancial Assets

The Group assesses at each reporting date whether there is an indication that a nonfinancial asset
may be impaired. The Group has designated as nonfinancial assets its prepaid expenses, advances
to suppliers, property, plant and equipment, and other assets. If any such indication exists, or
when annual impairment testing for a nonfinancial asset is required, the Group makes an estimate
of the nonfinancial assets recoverable amount. A nonfinancial assets estimated recoverable
*SGVFS022305*
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amount is the higher of a nonfinancial assets or CGUs fair value less costs to sell and its value in
use (VIU) and is determined for an individual asset, unless the nonfinancial asset does not
generate cash inflows that are largely independent of those from other nonfinancial assets or
groups of nonfinancial assets. Where the carrying amount of a nonfinancial asset exceeds its
estimated recoverable amount, the nonfinancial asset is considered impaired and is written down
to its estimated recoverable amount. In assessing VIU, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the nonfinancial asset. In
determining fair value less costs to sell, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded
subsidiaries or other available fair value indicators.
For nonfinancial assets excluding goodwill, an assessment is made at each reporting date as to
whether there is any indication that previously recognized impairment losses may no longer exist
or may have decreased. If such indication exists, the Group makes an estimate of recoverable
amount. A previously recognized impairment loss is reversed only if there has been a change in
the estimates used to determine the nonfinancial assets recoverable amount since the last
impairment loss was recognized. If that is the case the carrying amount of the nonfinancial asset is
increased to its recoverable amount. That increased amount cannot exceed the carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognized for
the non-financial asset in prior years. Such reversal is recognized in profit or loss.
Capital Stock
Capital stock is measured at par value for all shares issued. Subscriptions receivable are
accounted for as a deduction from equity. Proceeds and/or fair value of consideration received in
excess of par value, if any, are recognized as additional paid-in capital (APIC).
Retained Earnings
The amount included in retained earnings includes profit or loss attributable to the Groups equity
holders and reduced by dividends on capital stock. Retained earnings may also include effect of
changes in accounting policies as may be required by the standards transitional provisions.
The Group may pay dividends in cash or by the issuance of shares of stock. Cash and property
dividends are subject to the approval of the BOD, while stock dividends are subject to approval by
the BOD, at least two-thirds of the outstanding capital stock of the shareholders at a shareholders
meeting called for such purpose, and by the Philippine SEC. Cash and property dividends on
preferred and common stocks are recognized as liability and deducted from equity when declared.
Stock dividends are treated as transfers from retained earnings to paid-in capital.
Equity Reserve
Equity reserve represents the effect of the application of the pooling-of-interests method.
Parent Company Shares Held by a Subsidiary

These shares represent the Parent Companys common shares acquired by its subsidiary. No gain
or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of these equity
instruments. Any difference between the carrying amount and the consideration, if reissued, is
charged or credited to APIC.
Other Comprehensive Income

Other comprehensive income comprises items of income and expenses that are not recognized in
profit or loss for the year in accordance with PFRS. Other comprehensive income pertains to
*SGVFS022305*
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remeasurements of the Groups retirement benefit obligation and changes in fair value of AFS
financial asset.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured, regardless of when the payment is being made.
Revenue is measured at the fair value of the consideration received or receivable, taking into
account contractually defined terms of payment and excluding discounts, returns, rebates and other
sales taxes or duties. The Group assesses its revenue arrangement against specific criteria in order
to determine if it is acting as principal or agent. The Group has concluded that it is acting as a
principal in all of its revenue arrangements.
The following specific recognition criteria must also be met before revenue is recognized:
Sale of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership
of the goods have passed to the buyer, usually on delivery of the goods, net of discounts and
returns. Discounts and returns are not significant to the Group.
Interest income
Interest income is recognized as it accrues using the EIR method.
Deferred revenues
Deferred revenues pertain to the unearned income arising from the sale of goods wherein no actual
shipment or transfer of risks and rewards to customers has occurred yet. No amortization is done
to recognize the earned revenue since the Group will make subsequent reversals upon shipment of
the goods to customers.
Costs and Expenses Recognition

Costs and expenses are recognized in the consolidated statement of comprehensive income when a
decrease in future economic benefits related to a decrease in an asset or an increase in a liability
has arisen that can be measured reliably.
Cost of sales
Cost of sales is recognized when the related sale has met the criteria for recognition.
Operating expenses
Operating expenses are recognized in the period in which they are incurred.
Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of
the arrangement at the inception date and requires an assessment of whether the fulfillment of the
arrangements is dependent on the use of a specific asset or assets or the arrangement conveys a
right to use the asset. A reassessment is made after the inception of the lease only if one of the
following applies:
a. There is a change in contractual terms, other than a renewal or extension of the arrangement;
b. A renewal option is exercised and extension granted, unless the term of the renewal or
extension was initially included in the lease term;
c. There is a change in the determination of whether fulfillment is dependent on a specified asset;
or
d. There is a substantial change to the asset.
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When a reassessment is made, lease accounting shall commence or cease from the date when the
change in circumstances give rise to the reassessment for scenarios (a), (c) or (d) and at the date of
renewal or extension period for scenario (b).
The Group as a lessee

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Operating lease payments are recognized as expense in the
consolidated statement of comprehensive income on a straight-line basis over the lease term.
Retirement Benefits Costs

The Group is covered by a noncontributory defined benefit retirement plan. The net defined
benefit liability or asset is the aggregate of the present value of the defined benefit obligation at the
end of the reporting period reduced by the fair value of plan assets, adjusted for any effect of
limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the present value of
any economic benefits available in the form of refunds from the plan or reductions in future
contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Defined benefit costs comprise the following:

Service cost
Net interest on the net defined benefit liability or asset
Remeasurements of net defined benefit liability or asset.
Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognized as expense in the consolidated statement of comprehensive
income. Past service costs are recognized when plan amendment or curtailment occurs.
Net interest on the net defined benefit liability or asset is the change during the period in the net
defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on high quality corporate bonds to the net defined benefit liability
or asset. Net interest on the net defined benefit liability or asset is recognized as expense or
income in profit or loss.
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized
immediately in other comprehensive income in the period in which they arise. Remeasurements
are not reclassified to profit or loss in subsequent periods. These are retained in other
comprehensive income until full settlement of the obligation.
The past service cost is recognized as an expense on a straight-line basis over the average period
until the benefits become vested. If the benefits are already vested immediately following the
introduction of, or changes to, a pension plan, past service cost is recognized immediately.
Plan assets are assets that are held by a long-term employee benefit fund. Plan assets are not
available to the creditors of the Group, nor can they be paid directly to the Group. The fair value
of plan assets is based on market price information.
When no market price is available, the fair value of plan assets is estimated by discounting
expected future cash flows using a discount rate that reflects both the risk associated with the plan
assets and the maturity or expected disposal date of those assets (or, if they have no maturity, the
*SGVFS022305*
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expected period until the settlement of the related obligations). If the fair value of the plan assets
is higher than the present value of the defined benefit obligation, the measurement of the resulting
defined benefit asset is limited to the present value of economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan.
The Groups right to be reimbursed of some or all the expenditure required to settle a defined
benefit obligation is recognized as a separate asset at fair value and when, and only when,
reimbursement is virtually certain.
Foreign Currency-denominated Transactions

The consolidated financial statements are presented in US dollars, which is the Groups functional
and presentation currency. Transactions in foreign currencies are initially recorded at the
functional currency spot rate ruling at the date of the transaction. Outstanding monetary assets and
liabilities denominated in foreign currencies are retranslated at the functional currency rate of
exchange ruling at the balance sheet date.
All differences are taken to the consolidated statement of comprehensive income. Nonmonetary
items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates as of the dates of the initial transactions.
Income Taxes
Current tax
Current tax liabilities for the current and prior periods are measured at the amount expected to be
paid to the taxation authority. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the financial reporting date.
Deferred tax
Deferred income tax is provided using the balance sheet liability method on temporary differences
at the financial reporting date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
where the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries and
interests in joint ventures, where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
Deferred income tax assets are recognized for all deductible temporary differences, carryforward
of unused tax credits from excess minimum corporate income tax (MCIT) over regular corporate
income tax (RCIT) and unused net operating loss carryover (NOLCO) to the extent that it is
probable that taxable profit will be available against which the deductible temporary difference,
and the carryforward of unused tax credits from excess MCIT and unused NOLCO can be utilized,
except:
where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; and
*SGVFS022305*
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in respect of deductible temporary differences associated with investments in subsidiaries and

interests in joint ventures, deferred income tax assets are recognized only to the extent that it is
probable that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilized. Unrecognized deferred income tax assets
are reassessed at each balance sheet date and are recognized to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or the liability is settled, based on tax laws that have been
enacted or substantively enacted at the reporting date.
Deferred income tax relating to items recognized directly in equity is recognized directly in equity
and not in profit or loss. Deferred tax items are recognized in correlation to the underlying
transaction either in other comprehensive income or directly in equity.
Deferred income tax assets and deferred income tax liabilities are offset if, and only if, a legally
enforceable right exists to offset current tax assets against current tax liabilities exist and the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities which intend to either settle current tax
liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of deferred income tax assets or liabilities are
expected to be settled or recovered. Subsidiaries operating in the Philippines file income tax
returns on an individual basis. Thus, the deferred income tax assets and deferred income tax
liabilities are offset on a per entity basis.
Earnings Per Share (EPS)

Basic EPS is calculated by dividing the net income for the year attributable to common
shareholders by the weighted average number of common shares outstanding during the year, with
retroactive adjustments for any stock dividends and stock split.
For the purpose of calculating diluted earnings per share, the net income and the weighted average
number of shares outstanding are adjusted for the effects of all dilutive potential common shares.
Segment Reporting
For management purposes, the Group has determined that it is operating as one operating segment.
Sales are reported internally per division, however, profit or loss, assets and liabilities are reported
on an entity-wide basis. These information are measured using the same accounting policies and
estimates as the Groups consolidated financial statements (see Note 25).
Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Where the Group expects some or all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the
statement of comprehensive income, net of any reimbursement. If the effect of the time value of
money is material, provisions are determined by discounting the expected future cash flows at a
*SGVFS022305*
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pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognized as an interest expense.
Contingencies
Contingent liabilities are not recognized but are disclosed in the notes to consolidated financial
statements unless the possibility of an outflow of resources embodying economic benefit is
remote. Contingent assets are not recognized but are disclosed in the notes to consolidated
financial statements when an inflow of economic benefit is probable.
Events After the Balance Sheet Date

Post year-end events that provide additional information about the Groups position at the balance
sheet date (adjusting events) are reflected in the consolidated financial statements. Post year-end
events that are not adjusting events are disclosed in the notes to consolidated financial statements
when material.
3. Significant Judgments, Accounting Estimates and Assumptions
The preparation of the Groups consolidated financial statements in accordance with PFRS
requires management to make judgments, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at
the reporting date. However, uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amount of the asset or liability
affected in the future.
Judgments
In the process of applying the Groups accounting policies, management has made the following
judgments, apart from those involving estimations, which has the most significant effect on the
amounts recognized in the consolidated financial statements:
Determination of functional currency

The functional currencies of the entities under the Group are the currencies of the primary
economic environment in which the entity operates. It is the currency that mainly influences the
sales prices of goods and cost of goods sold. Based on the economic substance of the underlying
circumstances, the functional currency of the Parent Company and its subsidiaries is the US dollar.
Determination of operating segment

The Group has determined that it is operating as one operating segment. Based on managements
assessment, no part or component of the business of the Group meets the qualifications of an
operating segment as defined in PFRS 8, Operating Segments.
Classification of noncurrent assets held for sale

When CEIC acquired CATS and RBWRP, the manufacturing activities of CATS had been
transferred to CECs facility for operational efficiency measures. As a result, the land and
building improvements owned by CATS and RBWRP became idle; thus, on December 9, 2014,
the BOD approved the plan to sell and dispose the said aforementioned assets to interested buyers.
PFRS 5 requires entities to classify a noncurrent asset as held for sale if its carrying amount will
be recovered mainly through sale rather than through continued use. The Group has made a
judgment that the noncurrent assets are held for sale since management is committed to selling the
assets and are active in looking for interested buyers. Furthermore, the assets are available for
*SGVFS022305*
- 26 -
immediate sale in their present condition. As of December 31, 2016, the Parent Companys
management expects that sale will be completed in 2017.
Classification of financial instruments

The Group classifies a financial instrument, or its component, on initial recognition as a financial
asset, a financial liability or an equity instrument in accordance with the substance of the
contractual arrangement and the definitions of a financial asset, a financial liability or an equity
instrument. The substance of a financial instrument, rather than its legal form, governs its
classification in the consolidated balance sheets. The classification of the Companys financial
instruments is disclosed in Note 26.
Deferred income tax liability on a subsidiarys undistributed profits

CEIC has undistributed profits as of December 31, 2016 and 2015 that become taxable when
distributed to the Parent Company. PAS 12 requires the recognition of deferred income tax
liability on taxable temporary difference associated with investments in subsidiaries and interests
in joint ventures, unless the Group has the ability to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable
future. The Group has made a judgment that it is probable that the temporary difference will not
reverse in the foreseeable future based on managements plan that the Group will not be declaring
dividends from CEIC in the foreseeable future. Accordingly, the Parent Company did not
recognize deferred income tax liability on CEICs undistributed earnings amounting to $6,786,090
and $6,262,423 as of December 31, 2016 and 2015, respectively.
Impairment of nonfinancial assets

The Group assesses impairment on assets whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The factors that the Group considers
important which could trigger an impairment review include the following:
Significant underperformance relative to expected historical or projected future operating

results;
Significant changes in the manner of use of the acquired assets or the strategy for overall
business; and
Significant negative industry or economic trends.
An impairment loss is recognized whenever the carrying amount of an asset exceeds its estimated
recoverable amount which is the higher of an assets fair value less costs to sell and VIU. For
purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows.
Based on managements evaluation, no indication of impairment was noted in the Groups

nonfinancial assets as of December 31, 2016 and 2015 (see Notes 9, 11 and 13).
Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
Estimation of fair value of identifiable net assets of an acquiree in a business combination

In accounting for business combinations, the purchase consideration is allocated to the identifiable
assets, liabilities and contingent liabilities (identifiable net assets) on the basis of fair value at the
date of acquisition. The determination of fair values requires estimates of economic conditions
and other factors. The fair values of identifiable net assets are in Note 4 to the consolidated
financial statements.
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- 27 -
Estimation of fair value less cost to sell of noncurrent assets held for sale
The determination of the fair value less cost to sell of noncurrent assets held for sale is made with
reference to the selling price of the asset in the market and other factors such as the local market
conditions and the asking price of the potential buyers. As of December 31, 2016 and 2015, the
Group carries its noncurrent assets held for sale at lower of carrying amount and fair value less
cost to sell amounting to $11,408,611 (see Note 11).
Fair values of financial instruments

The fair values of financial instruments that are not quoted in active markets are determined using
valuation techniques. Where valuation techniques are used to determine fair values, fair values are
validated and periodically reviewed by qualified independent personnel. All models are reviewed
before they are used, and models are calibrated to ensure that outputs reflect actual data and
comparative market prices. To the extent practicable, models use only observable data; however,
areas such as credit risk (both own and counterparty), volatilities and correlations require
management to make estimates. Changes in assumptions about these factors could affect reported
fair value of financial instruments. The fair values of the financial instruments of the Group are
disclosed in Note 27 to the consolidated financial statements.
Estimating useful lives of property, plant and equipment

The Group estimates the useful lives of its property, plant and equipment based on the period over
which the assets are expected to be available for use. The Group reviews annually the estimated
useful lives of property and equipment based on factors that include asset utilization, internal
technical evaluation, technological changes, environmental and anticipated use of the assets
tempered by related industry benchmark information. It is possible that future results of operation
could be materially affected by changes in these estimates brought about by changes in factors
mentioned. A reduction in the estimated useful lives of property and equipment would increase
depreciation expense and decrease noncurrent assets.
In 2015, the Groups review indicated that the estimated useful lives of machinery and equipment
should be extended from 6 to 12 years to 10 to 15 years and facility and production tools from 3 to
5 years to 5 to 8 years from January 1, 2015 based on the Groups reassessment of the expected
period over which the Group will benefit from the use of these assets. There were no changes in
the useful lives of property, plant and equipment in 2016.
Estimated impact on future annual depreciation expense is as follows:
Years Ended December 31 Increase (Decrease)

2015 ($1,338,607)
2016 to 2020 (2,233,408)
2021 to 2025 3,572,015
Depreciation charged in the consolidated statements of comprehensive income amounted to

$2,711,632, $2,190,004 and $2,900,520 in 2016, 2015 and 2014, respectively. As of
December 31, 2016 and 2015, the Groups property, plant and equipment have a net book value of
$28,675,910 and $23,841,532, respectively (see Note 11).
Estimating allowance for inventory obsolescence

The Group recognizes allowance for inventory obsolescence when the inventory items are no
longer marketable and diminishes in value. Obsolescence is based on the physical and internal
condition of inventory items. The Group reviews on a monthly basis the condition of its stocks.
The assessment of the condition of the inventory goods either increase or decrease the expenses or
total inventory.
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- 28 -
The estimated allowance for inventory obsolescence amounted $96,884 as of December 31, 2016
and 2015. The carrying amounts of inventories, net of allowance for inventory obsolescence,
amounted to $15,281,893 and $5,737,068 as of December 31, 2016 and 2015, respectively
(see Note 7).
Estimating impairment of loans and receivables

The Group maintains allowance for impairment at a level considered adequate to provide for
potential uncollectible receivables. The level of this impairment allowance is evaluated by
management on the basis of factors that affect the collectibility of the accounts. These factors
include, but are not limited to, the length of the Groups relationship with debtors, their payment
behavior and known market factors. The Group reviews the age and status of receivable, and
identifies accounts that are to be provided with allowance on a continuous basis either individually
or collectively. The amount and timing of recorded expenses for any period would differ if the
Group made different judgment or utilized different estimates. An increase in the Groups
allowance for impairment would increase the Groups recorded expenses and decrease current
assets.
The Group determines allowance for each significant receivable on an individual basis. Among
the items that the Group considers in assessing the impairment is the inability to collect from the
counterparty based on the contractual terms of the receivables.
For collective assessment, allowances are assessed for receivables that are not individually
significant and for individually significant receivables where there is not yet objective evidence of
individual impairment. Impairment losses are estimated by taking into consideration the age of
the receivables, past collection experience and other factors that may affect collectability.
As of December 31, 2016 and 2015, the Group has not provided any impairment allowance since
receivables were assessed to be fully collectible. The carrying amount of loans and receivables,
which include cash in banks and cash equivalents, trade and other receivables, amounts owed by
related parties, security deposit, loans to employees and deposits amounted to $62,000,208 and
$55,834,400 as of December 31, 2016 and 2015, respectively (see Notes 5, 6, 9 and 13).
Estimating retirement benefit cost and liability

The determination of the obligation for retirement benefits is dependent on the selection by
management of certain assumptions used by actuaries in calculating such amounts. Those
assumptions are described in Note 21 and include among others, discount rate and salary increase
rate. Actual results that differ from the Groups assumptions are accumulated and amortized over
future periods and therefore, generally affect the recognized expense and recorded obligation in
such future periods. While management believes that the Groups assumptions are reasonable and
appropriate, significant differences in actual experience or significant changes in assumptions may
materially affect the Groups retirement obligation.
The Groups retirement benefits costs amounted to $216,687, $233,513 and $242,529 in 2016,
2015 and 2014, respectively. As of December 31, 2016 and 2015, the Groups retirement benefit
obligation amounted to $1,807,847 and $1,357,811, respectively (see Note 21).
Estimating useful life of software costs and capitalized product development costs
The estimated useful lives of amortizing software costs and capitalized product development cost
were determined on the basis of managements assessment of the period within which the benefits
of these costs are expected to be realized by the Group.
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As of December 31, 2016 and 2015, software with a total cost of $39,278 has been fully
amortized. The carrying amount of capitalized development costs amounted to $922,220 and
$569,942 as of December 31, 2016 and 2015, respectively. The amortization of capitalized
development cost amounted to $194,888, $96,355 and $72,940 in 2016, 2015 and 2014,
respectively (see Note 13).
Recoverability of deferred income tax assets

The Group reviews the carrying amounts of deferred income tax assets at each balance sheet date
and reduces deferred income tax assets to the extent that it is no longer probable that sufficient
income will be available to allow all or part of the deferred income tax assets to be utilized. The
Group has recognized deferred income tax assets amounting to $223,779 and $274,903 as of
December 31, 2016 and 2015, respectively (see Note 23).
The Parent Company did not recognize deferred income tax assets on the carryforward benefit of
NOLCO and unrealized foreign exchange losses amounting to $3,496,061 and $2,784,422 as of
December 31, 2016 and 2015, respectively.
Determining provision for warranty

The Group estimates the total warranty reserve to be recognized on the total internal and external
sales for the period using a predetermined percentage rate. Assumptions made by the Group such
as percentage used is based on their cumulative and industry experience on approximate inventory
returns made by the customers.
The provision for warranty amounted to $1,419,257 and $130,300 as of December 31, 2016 and
2015, respectively.
Legal contingencies
The estimate of probable costs for the resolution of possible claims has been developed in
consultation with outside counsels handling the Groups defense in these matters and is based
upon analysis of potential claims.
Management, in consultation with these counsels, believes that the likely outcome of these legal
proceedings will not have a material adverse effect on the Groups financial position and operating
results. However, it is possible that the future results of operations could be materially affected on
changes in estimates or in the effectiveness of the strategies relating to these litigations and claims.
No provision for probable losses arising from legal contingencies was recognized in 2016 and 2015.
4. Business Combination
As discussed in Note 1, the Company acquired the ordinary shares of RBWHIs manufacturing
division, CATS (formerly known as RBWI) on July 23, 2014. The authorized capital stock of
CATS consists of 50,000 shares with a par value of US$1.00 per share, of which 5,000 shares are
issued and outstanding. CEIC bought all of the 5,000 ordinary shares issued representing 100%
ownership in the acquired entity.
The acquisition of CATS allows the Group to expand its manufacturing capacity and capability
into the high-growth wireless segment via a proven player with a strong customer base.
The amount of consideration transferred for the acquisition was $7,465,105.
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- 30 -
As of July 30, 2015, the Group valuation was completed and the acquisition date fair value of the
HTM investments, long-term debt, retirement benefit obligation and the related deferred income
tax assets amounted to $1,156,722, $10,933,214, $691,855, and $113,593, respectively, a net
decrease of $532,778 over the provisional fair value of net assets. The 2014 comparative
information was restated to reflect the adjustment to the provisional amounts of assets and
liabilities. Correspondingly, the amortization of HTM investment and long-term debt from
August to December 2014 have been adjusted by $164,994. As a result, there was a
corresponding reduction in the retained earnings amounting to $697,608 as of December 31, 2014.
Excess of the fair value of net assets acquired over the aggregate consideration transferred
amounted $2,041,059 and is presented under Other income - net account in the consolidated
statements of comprehensive income (see Note 22).
From the date of acquisition, CATS contributed $11,729,914 of revenue and $1,349,426 to profit
before tax from continuing operations of the Group for the year ended December 31, 2014. If the
combination had taken place at the beginning of 2014, the Groups revenue from continuing
operations would have been $67,890,213 and the profit before tax from continuing operations
would have been $9,715,181.
The table below shows the analysis of cash flow on acquisition:
Cash consideration transferred $7,465,105

Net cash acquired with the subsidiary (291,179)
Net cash flow on acquisition $7,173,926
Transaction costs of $30,253 were expensed and are included in administrative expenses.
5. Cash and Cash Equivalents
2016 2015
Cash on hand and in banks $24,511,493 $14,792,686
Cash equivalents 14,984,180
$24,511,493 $29,776,866
Cash in banks earns interest at prevailing bank deposit rates. Cash equivalents are made for
varying periods of between one (1) day and three (3) months depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates.
Interest income earned from cash in banks and cash equivalents amounted to $172,196, $19,469
and $23,524 in 2016, 2015 and 2014, respectively.
6. Trade and Other Receivables
2016 2015
Trade $22,688,485 $13,615,734
Others 483,938 134,049
$23,172,423 $13,749,783
Trade receivables are noninterest-bearing and are generally on 30-120 days terms.
*SGVFS022305*
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Others include accrued interest receivable from short-term deposits and nontrade receivable from
suppliers which are expected to be collected within one year.
7. Inventories
2016 2015
At cost:
Raw materials $13,692,165 $4,197,113
Work-in-process 408,986 519,595
Finished goods 178,958 105,852
Spare parts and others 643,244 556,485
14,923,353 5,379,045
At NRV:
Supplies and others 358,540 358,023
Total inventories at lower of cost and NRV $15,281,893 $5,737,068
Certain inventories have been provided with allowance to reflect valuation for non-movement and
obsolescence.
The allowance for inventory obsolescence of supplies and other inventories as of December 31, 2016
and 2015 amounted to $96,884.
The cost of inventories recognized as cost of sales amounted to $42,377,215, $30,689,257 and
$28,352,936 in 2016, 2015 and 2014, respectively (see Note 18).
8. Financial Assets at FVPL
The reconciliation of the carrying amounts of financial assets at FVPL as of December 31 follows:
2016 2015
Beginning balance $19,447,248 $701,747
Disposals (19,709,049)
Gain on disposal (Note 22) 262,332
Acquisition 18,494,471
Fair value gains (Note 22) 293,349
Foreign currency translation (28) (42,319)
Ending balance $503 $19,447,248
UITF
On November 23, 2015, the Group acquired additional $9,994,471 investment in UITF from
Security Bank Corporation (SBC). The fair values for the investment in UITF are determined
through the Net Asset Valuation of each investee as of 2016 and 2015.
In 2015 and 2014, the Group recognized fair value gains amounting to $25,769 and $184,985,
respectively, in the consolidated statement of comprehensive income. The balance of investment
in UITF amounted to $10,679,668 as of December 31, 2015.
*SGVFS022305*
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In 2016, the investment in UITF was sold for $10,847,799. Gain on disposal recognized in
consolidated statement of comprehensive income amounted to $168,662 in 2016.
Investment in RCBC Senior Note

On January 21, 2015, the Parent Company acquired $8.5 million of the USD Senior Unsecured
Fixed Rate Notes offered by the RCBC via a drawdown off its $1 billion Medium Term Note
Programme maturing on January 22, 2020. The senior note earns 4.25 % fixed rate per annum,
payable semi-annually commencing July 21, 2015. The senior note is listed and actively traded in
Singapore Exchange Securities Trading Limited (SGX). The senior note is designated as financial
asset at FVPL as of December 31, 2016 and 2015. The fair values for the investment in RCBC
Senior Notes have been determined directly by reference to published prices quoted in an active
market.
In 2015, the Group recognized fair value gains amounting to $267,580 in the consolidated
statement of comprehensive income. The balance of the investment in RCBC Senior Notes
amounted to $8,767,580 as of December 31, 2015.
On July 18, 2016, the investment in RCBC Senior Notes was sold for $8,861,250. Gain on
disposal recognized in consolidated statement of comprehensive income amounted to $93,670 in
2016.
Interest income recognized on these notes amounted to $199,537 and $339,174 in 2016 and 2015,
respectively.
9. Other Current Assets
2016 2015
Rental deposit (Note 17) $1,131,399 $1,131,399
Advances to suppliers 953,821 773,277
Loans to employees 239,823 252,871
Security deposit 180,387 180,387
Prepaid expenses 80,488 102,079
Others 32,452 94,168
$2,618,370 $2,534,181
Advances to suppliers pertain mainly to down payments for production materials and services that
are still to be delivered.
10. HTM Investments
As of December 31, 2016 and 2015, the details of HTM investments are as follows (see Note 4):
2016 2015
Current portion $371,520 $521,215
Noncurrent portion 368,574
$371,520 $889,789
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In compliance with the Corporation Code of the Philippines, foreign corporations doing business
in the Philippines are required to deposit with the Philippine SEC securities worth at least $2,300
(P
=100,000) and additional securities with market values equivalent to a certain percentage of the
amount by which CATS - Philippine Branchs gross income exceeds $0.10 million (P =5.0 million).
The Philippine SEC shall also require a deposit of additional securities if the actual market values
of the securities in deposit decreases by at least 10% of their actual market values at the time they
were deposited.
The Groups HTM investments pertain to government bonds which were purchased by the
Philippine Branch of CATS in compliance with above regulation. The bonds have maturity dates
which range from 2015-2017 and bear an average effective interest rate of 1.97% to 4.63% per
annum.
In May 2015, one of the HTM bonds with a face value of $111,632 (P
=5.0 million) matured and as
a result, CATS received cash amounting to $115,478.
Interest income in 2016, 2015 and 2014 amounting to $8,362, $27,330, and $34,717, respectively,
are presented as part of Interest income account in the consolidated statements of
comprehensive income.
11. Property, Plant and Equipment and Noncurrent Assets Held for Sale
Property, plant and equipment
December 31, 2016

Machinery Facility and Furniture,
and Buildings and Production Fixtures and Transportation Construction
Equipment Improvements Tools Equipment Equipment in progress Total
Cost:
Beginning balances $41,492,558 $8,091,561 $6,727,316 $1,107,269 $171,177 $3,830,811 $61,420,692
Additions 3,256,285 107,859 955,606 135,473 3,090,787 7,546,010
Disposal and other
adjustments
Reclassification 6,412,476 509,122 (6,921,598)
Ending balances 51,161,319 8,199,420 8,192,044 1,242,742 171,177 68,966,702
Accumulated depreciation:
Beginning balances 27,840,187 4,399,021 4,341,626 923,784 74,542 37,579,160
Depreciation (Notes 18
and 19) 1,604,772 430,488 500,649 150,741 24,982 2,711,632
Ending balances 29,444,959 4,829,509 4,842,275 1,074,525 99,524 40,290,792
Net book values $21,716,360 $3,369,911 $3,349,769 $168,217 $71,653 $ $28,675,910
*SGVFS022305*
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December 31, 2015
Machinery Facility and Furniture,

and Buildings and Production Fixtures and Transportation Construction in
Equipment Improvements Tools Equipment Equipment progress Total
Cost:
Beginning balances $38,385,288 $7,071,084 $5,994,069 $1,058,977 $104,365 $ $52,613,783
Additions 3,254,022 1,049,796 733,247 63,192 85,300 3,830,811 9,016,368
Disposal and other
adjustments (146,752) (29,319) (14,900) (18,488) (209,459)
Ending balances 41,492,558 8,091,561 6,727,316 1,107,269 171,177 3,830,811 61,420,692
Accumulated depreciation:
Beginning balances 26,587,628 4,154,904 3,958,418 818,862 78,803 35,598,615
Depreciation (Notes 18
and 19) 1,404,291 267,753 383,208 120,678 14,074 2,190,004
Disposal and other
adjustments (151,732) (23,636) (15,756) (18,335) (209,459)
Ending balances 27,840,187 4,399,021 4,341,626 923,784 74,542 37,579,160
Net book values $13,652,371 $3,692,540 $2,385,690 $183,485 $96,635 $3,830,811 $23,841,532
Additions to construction in progress amounting to $3,090,787 and $3,830,811 in 2016 and 2015,
respectively, represent construction costs incurred for the new production facility of CATS -
Philippine Branchs new product venture. Construction was completed in 2016.
Land and building owned by RBWRP with carrying value of $8,768,248 as of December 31, 2016
and 2015 were used as collateral for an interest-bearing loan with a local commercial bank.
The Group prepaid the balance of the loan in 2016 (see Note 16).
The cost of fully depreciated property, plant and equipment still used in operations amounted to
$18,780,185 and $18,394,022 as of December 31, 2016 and 2015, respectively.

On December 9, 2014, the Parent Companys BOD approved the plan to sell and dispose certain
assets such as land, building and other improvements, and building plant and machinery of CATS
and RBWRP to any interested buyers as these are excess assets from the acquisition and are no
longer needed in CATS - Philippine Branchs operations. An independent valuation was obtained
to determine the fair values of property, plant and equipment which were based on recent
transactions for similar assets within the same industry. Property, plant and equipment with
carrying value of $11,408,611 were classified as noncurrent assets held for sale in the consolidated
balance sheets effective December 31, 2014. The Parent Companys management is committed to
selling the assets which are available for immediate sale and is active in looking for interested
buyers. During the one-year period from the date the assets were classified as held for sale,
circumstances arose that were previously considered unlikely and, as a result, the noncurrent
assets held for sale were not sold by the end of the one-year period. Management took necessary
actions to respond to the change in circumstances and ensured that the noncurrent assets are being
actively marketed at a price that is reasonable, given the change in circumstances.
12. AFS Financial Asset
The Groups AFS financial asset pertains to the unquoted investment in CloudMondo, Ltd. which
is acquired at a cost of $1,667,000 in 2015.
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13. Other Noncurrent Assets
2016 2015
Advances to suppliers $1,066,014 $55,644
Product development costs 922,220 569,942
Miscellaneous deposits 135,559 136,168
Others 39,177 44,112
$2,170,859 $893,853
Advances to suppliers pertain to down payments for the acquisition of software and building
expansion.
Product development costs pertain to the capitalized cost of developing certain packages or products
for specific customers. The development costs met the requirements of PAS 38 for capitalization.
The product development costs that were capitalized in 2016, 2015 and 2014 amounted to $547,166,
$105,365, and $163,907, respectively. Amortization of product development cost charged to the
consolidated statements of comprehensive income amounted to $194,888, $96,355, and $72,940 in
2016, 2015 and 2014, respectively, as these are available for use.
Miscellaneous deposits pertain to refundable deposits with MERALCO for the installation of
CECs electrical meters and bill deposit equivalent to one month energy consumption.
As of December 31, 2016 and 2015, CEC has software with a total cost of $39,278 which are fully
amortized but are still used in operations.
14. Trade and Other Payables
2016 2015
Trade $13,192,707 $8,569,122
Accruals:
Utilities 442,112 453,145
Payroll 404,116 259,583
Interest (Notes 15 and 16) 172,419 155,235
Others 337,454 285,966
Advances from customers 2,833,791 2,884,311
Provision for warranty 1,419,257 130,300
Others 333,737 647,980
$19,135,593 $13,385,642
Trade payables are noninterest-bearing and are generally on 60-90 days terms.
Accruals comprise mainly of accruals for electricity, water, communication, security, shuttle
services and professional services.
Advances from customers pertain mainly to downpayments for sales orders.
Provision for warranty pertains to the Groups estimate of the cost to repair or replace defective
products in accordance with agreed specifications. The increase in provision for warranty is due
to the introduction of new products for its new customer (see Note 29). Provision for (reversal of)
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warranty in 2016 and 2015 amounted to $1,288,957 and ($18,654), respectively, and is presented
as part of Cost of sales account in the consolidated statements of comprehensive income.
Other payables pertain to statutory liabilities and are generally payable within 12 months from the
balance sheet date.
15. Short-term Loans
The Group has the following loan facilities:
2016 2015
Banks:
SBC (a) $10,000,000 $900,000
Bank of the Philippine Island (BPI) (b) 5,435,088 5,435,088
RCBC (c) 16,190,857 4,500,000
$31,625,945 $10,835,088
a. Revolving loan facilities with the SBC which have payment terms ranging from 90 to 180
days. The facility is unsecured and charged interest of 1.95% to 2.10% per annum in 2016
and 2015.
b. Revolving loan facilities with the BPI which have payment terms of 180 days. The facility is
unsecured and charged interest of 1.80% per annum in 2016 and 2015.
c. Revolving loan facilities with the RCBC which have payment terms ranging from 60 to 167
days. The facility is unsecured and charged interest of 2.25% per annum in 2016 and 2015.
Interest expense incurred from these short-term loan facilities amounted to $153,247, $95,423, and
$181,636 in 2016, 2015 and 2014, respectively.
16. Long-term Debt
As of December 31, 2016 and 2015, the details of long-term debts are as follow:
2016 2015
Principal $44,250,000 $23,371,201
Less deferred financing costs 390,029 154,780
$43,859,971 23,216,421
Less:
Current portion - net of deferred financing costs
amounting to $272,155 and $71,699 in 2016
and 2015, respectively 6,882,126 5,290,995
Subsequent adjustments in PPA 12,647
6,882,126 5,303,642
$36,977,845 $17,912,779
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Movement in deferred financing costs follow:
2016 2015
Beginning of year $154,780 $130,122
Transaction costs recognized during the year 321,605 146,127
Less amortization 86,356 121,469
End of year $390,029 $154,780
CHPC
On July 25, 2012, the Parent Company entered into a $10.0 million Notes Facility Agreement
(NFA) with Metropolitan Bank & Trust Company (Initial Noteholder), Metropolitan Bank & Trust
Company - Trust Banking Group (Facility and Paying Agent) and First Metro Investment
Corporation (Arranger). The NFA provided for the issuance of 5-year fixed rate corporate note
which bears interest of 3.6% per annum payable quarterly. On July 27, 2012 (Issue Date), the
Parent Company drew $10.0 million from the facility. The net proceeds from the issuance of the
Notes shall be used to finance the Groups strategic acquisitions and for general corporate purposes.
Under the NFA, the Parent Company shall pay 30% of the loan outstanding on issue date in
12 equal consecutive quarterly installments in the amount equivalent to 2.5% of loan outstanding
on issue date commencing on the end of the 5th quarter until end of the 16th quarter from the Issue
Date. The remaining 70% of the loan outstanding on issue date is payable in four (4) equal
consecutive quarterly installments in the amount equivalent to 17.5% of the loan outstanding on
issue date commencing on the 17th quarter from the issue date until the maturity date, provided
that each such date shall coincide with an interest payment date, and that the last installment shall
be in an amount sufficient to fully pay the loan.
The NFA contained an embedded derivative arising from voluntary prepayment option where the
Parent Company may redeem in whole but not in part, the relevant outstanding notes beginning on
and after the third anniversary of the issue date, by paying the amount that is equivalent to 102% of
the unpaid principal amount together with any and all accrued interest up to the date of prepayment.
The Parent Company assessed that the embedded derivative in the NFA is closely related to the host
contract, thus was not bifurcated from the host contract based on the provisions of PAS 39.
In accordance with the NFA, the following financial ratios must be maintained:
debt to equity ratio shall not, at any time, exceed 2:1;
debt service coverage ratio shall not, as of relevant testing date, be less than 1.5; and
current ratio shall not, at any time, be less than 1:1, provided however, this ratio shall not
apply after the fourth anniversary of the issue date.
Equity is defined in the agreement as the aggregate of outstanding capital stock, additional paid-in
capital stock, equity reserve and retained earnings at any date and as shown in the latest
consolidated balance sheet of the Parent Company. Debt, on the other hand, is defined in the
agreement as the aggregate of all obligations (whether actual or contingent) of the Issuer and its
subsidiaries to pay or repay money.
On December 18, 2014, the Parent Company entered into another $10.0 million Notes Facility
Agreement with Metropolitan Bank & Trust Company (Initial Noteholder), Metropolitan Bank &
Trust Company - Trust Banking Group (Facility and Paying Agent) and First Metro Investment
Corporation (Arranger). The Notes Facility bears interest of 3.14% per annum payable quarterly.
The net proceeds of the issuance of the Notes shall be used to finance the Groups strategic
acquisitions and for general corporate purposes.
*SGVFS022305*
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Under the NFA, the Parent Company shall pay 30% of the loan outstanding on issue date in 12
equal consecutive quarterly installments in the amount equivalent to 2.5% of loan outstanding on
issue date commencing on the end of the 5th quarter until end of the 16th quarter from the Issue
date. The remaining 70% of the loan outstanding on issue date is payable in 4 equal consecutive
quarterly installments in the amount equivalent to 17.5% of the loan outstanding on issue date
commencing on the 17th quarter from the issue date until the maturity date, provided that each
such date shall coincide with an interest payment date, and that the last installment shall be in an
amount sufficient to fully pay the loan.
and after the third anniversary of the issue date, by paying the amount that is equivalent to 102%
of the unpaid principal amount together with any and all accrued interest up to the date of
redemption at the applicable rate. The Parent Company assessed that the embedded derivative in
the NFA is closely related to the host contract, thus was not bifurcated from the host contract
based on the provisions of PAS 39.
Under this agreement, the following financial ratios must be maintained:

current ratio shall not at any time be less than 1:1, provided however, this ratio shall not apply
after the fourth anniversary of the issue date.
Equity is defined in the agreement the aggregate of outstanding capital stock, additional paid-in
On September 20, 2016, the Parent Company entered into a $30.0 million NFA with BPI (Initial
Note holder), BPI Asset Management and Trust Group (Facility and Paying Agent) and BPI
Capital Corporation (Arranger). The NFA provided for the issuance of 5-year fixed rate corporate
note which bears interest of 4.0% per annum payable quarterly. The net proceeds from the
issuance of the Notes shall be used for capital expenditures, including production facilities and to
refinance existing debt obligation and for working capital requirement.
Under the NFA, the Parent Company shall pay the 30% of the loan outstanding on issue date in 12
issue date commencing on the end of the 5th quarter until the end of the 16th quarter from the issue
date. The remaining 70% of the loan outstanding on issue date in four (4) equal consecutive
commencing on the 17th quarter from the issue date until the maturity date, provided that each such
date shall coincide with an interest payment date, and that the last installment shall be in an amount
sufficient to fully pay the loan.
Parent Company may redeem in whole or in part, equivalent to an amount not less than $100,000,
the relevant outstanding notes on any interest payment date beginning on the third anniversary of
the issue date, by paying the amount that is equivalent to the higher of (i) 102% of the unpaid
principal amount together with any and all accrued interest up to the date of redemption at the
applicable rate, and (ii) 100% of the unpaid principal amount of the loans together with any and all
*SGVFS022305*
- 39 -
accrued interest up to date of redemption at the applicable rate and any related breakage costs (net
of any breakage gains). The Parent Company assessed that the embedded derivative in the NFA is
closely related to the host contract, thus was not bifurcated from the host contract based on the
provisions of PAS 39.

The Parent Company is in compliance with the debt covenants as of December 31, 2016 and 2015.
Total interest expense (including amortization of deferred financing costs) recognized in the
consolidated statements of comprehensive income amounted to $1,134,962, $757,709, and
$188,302 in 2016, 2015 and 2014, respectively.
CATS
In 2012, CATS obtained a secured interest-bearing loan from a local commercial bank amounting
to $13.0 million. The principal is payable in 28 quarterly payments of $464,286 until 2018 and
bears annual interest rate of 3.0% plus three month London inter-bank offer rate (LIBOR). This
bank loan was specifically borrowed to refinance the parcel of land with improvements located
along Innovation Drive, Carmelray Industrial Park 1, Brgy. Canlubang, Calamba City, Laguna and
registered in the name of RBWRP. The Group assumed the loan upon acquisition of REMECs
manufacturing division in 2014. As of December 31, 2015, the land and building owned by
RBWRP were used as collateral for the secured interest-bearing loan (see Note 11).
The loan contract gives the Group an option to prepay the loan in part or in full, subject to the
Group giving the creditor at least 30 days advance notice of its intention to make such prepayment
counted from the date of receipt by the creditor of such written notice.
On September 26, 2016, the Group prepaid the balance of the loan, including accrued interest, for
$4,684,319. Interest expense charged to operations in 2016, 2015 and 2014 amounted to $87,018,
$474,281 and $154,856, respectively.
Carrying values of long-term debt held by the Parent Company and CATS - Philippine Branch
follow:
2016 2015
Parent Company $43,859,971 $17,595,220
CATS - Philippine Branch 5,621,201
$43,859,971 $23,216,421
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17. Related Party Disclosures
Related party relationship exists when the party has the ability to control, directly or indirectly
through one or more intermediaries, or exercise significant influence over the other party in
making financial and operating decisions. Such relationships also exist between and/or among
entities which are under common control with the reporting entity and its key management
personnel, directors or stockholders. In considering each possible related party relationship,
attention is directed to the substance of the relationships.
In the normal course of business, the Group has entered into transactions with affiliates. The
significant transactions consist of the following:
d. Rental of land with Cayon Holdings, Inc. (Cayon), an affiliate, where the building 2 of the
Group is situated
The consolidated balance sheets and consolidated statements of comprehensive income include the
following significant account balances resulting from the above transactions with related parties:

2016 2015 2016 2015 Terms Conditions
CLC Rental $12,776 $13,515 $446,970 $434,194 Due on demand; Unsecured
non-interest
bearing
Cayon Rental 11,690 12,025 73,182 61,492 Due on demand; Unsecured
non-interest
bearing
$520,152 $495,686

Camerton Reimbursement $78,833 $ $111,994 $33,161 Due on demand; Unsecured; no
of expenses non-interest impairment
bearing
CHI Advances for 1,809,256 1,809,256 Due on demand; Unsecured; no
working capital non-interest impairment
bearing
Cayon Reimbursement 206,284 206,284 Due on demand; Unsecured; no
of expenses non-interest impairment
bearing
Jerry Liu Advances 1,750,990 5,483,674 10,309,041 8,558,051 Due on demand; Unsecured; no
non-interest impairment
bearing
$12,436,575 $10,606,752
c. Rental deposit
CLC $ $ $1,131,399 $1,131,399 Due on demand;
Unsecured; no
non-interest
impairment
bearing
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The above related parties, except Jerry Liu, are entities under common control of the ultimate
parent company. Jerry Liu is a stockholder and the chairman of the Parent Companys BOD.

The amount owed by an officer amounting to $7.7 million as of December 31, 2010 was
transferred in 2011 to CEL, the former ultimate parent of CEC and CEIC. CEL now owns 40%
interest in Camerton, the parent of CHPC.
The amounts owed by and to CHI as of December 31, 2010 represent advances for working capital
in the normal course of business when CEC and CEIC were then still subsidiaries of CHI.
For purposes of settling outstanding balances with the Group and as part of corporate restructuring
in preparation for the planned Initial Public Offering (IPO) of the Parent Company, on
March 17, 2011 amounting to $7.7 million and $0.8 million, respectively.
The Group, with the consent of the related parties, entered into assignment agreements whereby
the Parent Company absorbed the amount owed by CEIC to CHI totaling $3.6 million representing
unpaid advances of $2.3 million and dividends of $1.3 million as of March 17, 2011 (see Note 28).
Thereafter, on March 18, 2011, the Parent Company and CHI, in view of being creditors and
debtors to each other as a result of the assignment agreements above, entered into a set-off
agreement for the value of the Groups liability aggregating $6.8 million. The amount represents
the above mentioned total liability of $3.6 million and the balance outstanding from the Parent
Companys purchase of CEC and CEIC amounting to $3.2 million, as revalued from the effect of
foreign exchange rate.
The amount owed by CHI as of December 31, 2016 and 2015 pertains to the outstanding

Camerton is the majority shareholder of the Parent Company. Amounts owed by Camerton as of
December 31, 2016 and 2015 pertain mainly to working capital advances and advances for
incorporation expenses of Camerton.

CLC is an entity under common control of the ultimate parent company. CEC had a lease
agreement on the land where its manufacturing plant (Building 1) is located with CLC for a period
of 50 years starting January 1, 1999. The lease was renewable for another 25 years at the option
of CEC. The lease agreement provided for an annual rental of $151,682, subject to periodic
adjustments upon mutual agreement of both parties.
On January 1, 2005, CEC terminated the lease agreement with CLC but has continued to occupy
the said land for no consideration with CLCs consent. With the termination of the lease
agreement, the Group has classified the rental deposit amounting to $1.1 million as current asset as
the deposit has become due and demandable anytime from CLC (see Note 9).
On January 1, 2011, CEC entered into an agreement with CLC to lease the land where CECs
Building 1 is located. The agreement calls for a P
=640,704 rent per annum for a period of 10 years
and renewable thereafter by mutual agreement of the parties subject to such new terms and
conditions as they may then be mutually agreed-upon. Total rent expense charged to operations
amounted to $12,777, $13,515 and $14,434 in 2016, 2015 and 2014, respectively.
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CEC also entered into an agreement with Cayon starting January 1, 2011 to lease the land where
CECs Building 2 is located. The agreement calls for an annual rental of =
P582,144 for a period of
10 years and renewable thereafter. Total rent expense charged to operations amounted to $11,690,
$12,025 and $13,114 in 2016, 2015 and 2014, respectively.
The compensation of key management personnel of the Group are as follows:
2016 2015 2014

Salaries and wages $1,716,534 $520,374 $953,896
Employee benefits 246,575 275,117 246,477
$1,963,109 $795,491 $1,200,373
18. Cost of Sales
2016 2015 2014

Raw materials, spare parts, supplies and
other inventories used, and changes
in inventories (Note 7) $42,434,652 $35,035,653 $27,679,587
Salaries, wages and employees benefits
(Note 20) 10,535,487 8,234,391 7,821,742
Utilities 3,490,477 3,696,519 3,556,257
Depreciation (Note 11) 2,626,749 2,116,293 2,838,858
Inward freight and duties and others 2,478,742 898,991 2,354,891
$61,566,107 $49,981,847 $44,251,335
19. Operating Expenses
2016 2015 2014

(Note 20) $2,563,292 $2,035,832 $1,594,075
Utilities 349,377 505,530 290,845
Transportation and travel 304,568 356,524 284,608
Entertainment, amusement and recreation 192,109 208,554 168,981
Professional fees 191,305 264,495 132,542
Commissions 152,020 57,660 159,935
Depreciation (Note 11) 84,883 73,711 61,662
Taxes and licenses 84,242 163,242 47,792
Insurance premiums 71,871 12,497 31,191
Office supplies 47,688 27,210 27,815
Others 312,248 115,421 529,010
$4,353,603 $3,820,676 $3,328,456
Others mainly consist of receivables directly written off and other charges.
*SGVFS022305*
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20. Salaries and Wages and Employees Benefits
2016 2015 2014

Salaries and wages $10,480,573 $8,597,053 $7,771,711
Other employees benefits 2,401,519 1,439,657 1,401,577
Retirement benefits costs (Note 21) 216,687 233,513 242,529
$13,098,779 $10,270,223 $9,415,817
Other employees benefits consist of allowances and mandatory contributions.
21. Retirement Benefit Obligation
The Group has a funded, noncontributory defined benefit retirement plan based on the normal
retirement benefits equivalent to the minimum retirement benefit as provided by Republic Act
(R.A.) No. 7641, otherwise known as the Retirement Pay Law, covering all of its regular
employees. Retirement benefits costs are determined in accordance with an actuarial study and
are based on the employees years of service and monthly basic salary.
Under the existing regulatory framework, R.A. No. 7641 requires a provision for retirement pay to
qualified private sector employees in the absence of any retirement plan in the entity, provided,
however, that the employees retirement benefits under any collective bargaining and other
agreements shall not be less than those provided under the law. The law does not require
minimum funding of the plan.
Retirement benefits costs recognized in the consolidated statements of comprehensive income are
as follows:
2016 2015 2014

Current service cost $148,313 $160,009 $140,308
Interest cost 68,374 73,504 102,221
$216,687 $233,513 $242,529
The amounts recognized in the consolidated balance sheets as retirement benefit obligation are as
follows:
2016 2015
Present value of obligations $2,080,282 $1,610,657
Fair value of plan assets (272,435) (252,846)
$1,807,847 $1,357,811
Changes in the present value of the defined benefit obligations are as follows:
2016 2015
Opening present value defined benefit obligation $1,610,657 $1,780,923
Current service cost 148,313 160,009
Interest cost 77,974 79,667
Remeasurement losses (gains) 392,006 (203,202)
Benefits paid (34,875) (121,045)
Translation difference (113,793) (85,695)
$2,080,282 $1,610,657
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Changes in the fair value of plan assets are as follows:
2016 2015
Opening fair value of plan assets $252,846 $135,136
Contributions 147,002 105,907
Interest income included in net interest costs 9,600 6,163
Remeasurement gains (losses) on plan assets (121,918) 16,630
$272,435 $252,846
Movements in the net retirement plan liabilities follow:
2016 2015
Beginning of year $1,357,811 $1,645,787
Retirement benefits costs 216,687 233,513
Contributions (147,002) (105,907)
Remeasurement losses (gains) recognized in other
comprehensive income 513,924 (219,832)
Benefits paid (34,875) (121,045)
End of year $1,807,847 $1,357,811
The details of the remeasurement losses (gains) in other comprehensive income as of December 31
follow:
2016 2015 2014

Remeasurement losses (gains) on defined
benefits obligation arising from changes in:
Experience adjustments $145,529 ($174,143) ($128,760)
Changes in assumptions 246,477 (29,059) (272,601)
Remeasurement losses (gains) on plan assets 121,918 (16,630) 9,723
$513,924 ($219,832) ($391,638)
As a result of the business combination, the Group recognized an additional present value of the
defined benefit obligations of $1,878,867 for the year ended December 31, 2014.
The principal actuarial assumptions used to determine retirement obligations for the Groups
retirement plan are as follows:
2016 2015 2014

Discount rate 5.43% - 5.55% 4.35 - 5.08% 4.64%
Salary increase rate 3.50% - 2% 2.00% 2.00%
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The sensitivity analysis below has been determined based on reasonably possible changes of each
significant assumption on the pension obligations as of December 31, 2016 and 2015, assuming all
other assumptions were held constant:
Effect on Present Value

of Defined Benefit Obligation
Increase (Decrease) 2016 2015
Discount rate +1% ($187,575) ($155,646)
-1% 225,665 185,184
Future salary increase rate +1% 220,431 197,098

-1% (186,465) (167,737)
There were no changes from the previous period in the methods and assumptions used in
preparing sensitivity analysis.
The latest actuarial valuation report of the Group is as of December 31, 2016. The average
duration of the defined benefit obligation at the end of the reporting date ranges from 19 to
22 years. Shown below is the maturity analysis of the undiscounted benefit payments:
2016 2015
1 year or less $349,863 $125,072
More than 1 year to 5 years 470,458 672,062
More than 5 years 11,251,717 7,548,519
22. Other Income - Net

2016 2015 2014
Sale of scrap $231,552 $320,199 $259,819
Gain on disposal of financial assets at
FVPL (Note 8) 262,332
Foreign exchange gains (losses) - net (3,222) 178,986 (67,297)
Mark-to-market gain (Note 8) 293,349 184,985
Excess of the fair value of net assets
acquired over the aggregate
consideration transferred (Note 4) 2,041,059
Others - net 257,228 39,411 (57,050)
$747,890 $831,945 $2,361,516
Other non-operating income pertains to the miscellaneous receipts from customers in prior
periods.
23. Income Taxes
CEC
On March 24, 1998, the Philippine Economic Zone Authority (PEZA) approved CECs
registration as an ecozone export enterprise at the Laguna Technopark for the manufacture of
standard integrated circuits, discrete, hybrid and potential new packages.
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Beginning October 30, 2002, the manufacture and export of integrated circuits, discrete and hybrid
transferred to PEZA from Board of Investments (where originally registered) and became subject
to the 5% gross income tax incentive, as defined under R.A. No. 7916, the law creating the PEZA.
CATS - Philippine Branch

CATS - Philippine Branch was registered with PEZA as an Ecozone Export Enterprise to engage
in the manufacture, fabrication and design of millimeterwave components and subsystems in a
special economic zone to be known as the Carmelray Industrial Park I - Special Economic Zone
(CIP I-SEZ) and Laguna Technopark in accordance with the project study, representations,
commitments and proposals set forth in its application forming integral parts, subject to the terms
and conditions provided in its registration.
As a PEZA-registered activity, CATS - Philippine Branch is entitled to tax incentives equivalent

to 5% of the gross income earned on its registered activities after the income tax holiday (ITH) of
four years.
Details of provision for (benefit from) income tax are as follows:
2016 2015 2014

Current $559,457 $475,638 $202,011
Deferred (12,125) 39,998 4,814
$547,332 $515,636 $206,825
The provision for current income tax in 2016, 2015 and 2014 pertains to the special rate of 5% on
taxable gross income of CEC and CATS - Philippine Branch.
Based on the National Internal Revenue Code Sec. 27, MCIT of two percent (2%) of the gross
income as of the end of taxable year is imposed on corporation beginning on the fourth taxable
year immediately following the year in which such corporation started its commercial operation
when the MCIT is greater than the regular corporate income computed for the taxable year. The
Parent Company is subject to MCIT beginning 2015.
A reconciliation of provision for income tax computed at the statutory income tax rate to provision
for income tax shown in the consolidated statements of comprehensive income follows:

2016 2015 2014
Income tax at applicable statutory rate $637,810 $478,334 $377,037
Additions to (reduction in) income tax:
Nontaxable income (139,433) (82,272) (128,692)
Nondeductible expenses 34,930 97,041 13,071
Income subject to higher tax rate 33,356 86,046
Taxable income subject to ITH (19,665) (68,042) (53,519)
Movement of temporary differences (12,125) (60,008)
Interest income subject to final tax (283)
Translation difference and others 12,459 4,529 59,219
Provision for income tax $547,332 $515,636 $206,825
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In 2016, 2015 and 2014, CATS - Philippine Branch and CEC have availed ITH for certain product
lines. Total gross income for the registered activities of CEC in 2015 and 2014 amounted to
$480,477 and $1,070,379, respectively. Total gross income for the registered activities of CATS -
Philippine Branch in 2016 and 2015 amounted to $393,300 and $810,345, respectively.
The components of the net deferred income tax assets of the Group are as follows:
2016 2015
Deferred income tax assets recognized in profit or loss:
Fair value adjustment on nonfinancial assets $127,849 $127,849
Retirement benefit obligation 98,648 92,452
HTM investments 1,408 1,408
NOLCO 80,274
227,905 301,983
Deferred income tax liabilities recognized in profit or loss:
Effect of foreign exchange differences
between tax base and financial reporting base (7,502) (8,819)
Fair value adjustment on long-term debt (14,932) (14,932)
Unrealized foreign exchange gains (30,140) (25,849)
Unrealized gain on financial assets at FVPL (88,938)
(52,574) (138,538)
Deferred income tax liability related to retirement benefit
obligation recognized under other comprehensive
income (4,126) (27,890)
Net deferred income tax assets $171,205 $135,555
The net deferred income tax assets as and liabilities as reflected in the consolidated balance sheets
are as follows:
2016 2015
Net deferred income tax assets $174,578 $135,555
Net deferred income tax liabilities $3,373
The following are the Parent Companys deductible temporary differences for which no deferred
income tax assets have been recognized as management believes that it may not be probable that
sufficient future taxable profit will be available against which the deferred income tax assets can
be utilized:
2016 2015
NOLCO $3,352,472 $2,741,201
Unrealized foreign exchange losses 143,589 43,221
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As of December 31, 2016 and 2015, the Parent Company incurred NOLCO that can be claimed as
deduction from future taxable income as follows:
Balance as of
Year December 31, Available
incurred Amount Addition Expired 2016 Tax effect until
2013 $782,210 $ $782,210 $ $ 2016
2014 952,273 952,273 285,682 2017
2015 1,006,718 1,006,718 302,015 2018
2016 1,393,481 1,393,481 418,044 2019
$2,741,201 $1,393,481 $782,210 $3,352,472 $1,005,741
In 2015, the Parent Company recognized deferred income tax asset on the carryforward benefit of
its NOLCO amounting to $80,274. CEIC and CATS are exempt from income tax under the tax
privileged status as a BVI business company under the BVI Business Companies Act.
24. Earnings Per Share (EPS)
The following table presents information necessary to calculate EPS on net income.
2016 2015 2014

Net income attributable to common
shareholders of the Parent Company* $7,596,228 $5,112,080 $5,844,084
Weighted average number of common
shares outstanding 416,859,291 383,220,650 336,261,197
Basic and diluted EPS $0.018 $0.013 $0.017
*Net of dividends declared on preferred shares
As of December 31, 2016, 2015 and 2014, the Parent Company has no potential dilutive common
shares.
The weighted average number of common shares outstanding used in the calculation of EPS is
based on the outstanding shares of the Parent Company. The additional shares from stock
dividends during the period, including the unissued stock dividends and stock dividends declared
after the reporting period but before the approval of the financial statements, were reflected in the
calculation of the EPS as if these shares have been issued in all earlier periods presented.
25. Operating Segments
operating segment as defined by PFRS 8. More specifically:
There is no significant or obvious distinction among the products assembled by the Group.
The assembly process is likewise similar;
The Groups production facility and head office is located in the Philippines;
Although production of goods is divided into thirteen divisions, the commercial, technical,
operating, marketing and selling matters are made at the executive committee level and not at
the division levels. The role of the respective division managers is to ensure that production is
on track in meeting its volume forecasts, and that quality standards are consistently met.
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Sales are reported internally per division, but profit or loss, assets and liabilities are reported on an
entity-wide basis. Information is measured using the same accounting policies and estimates as
the Groups consolidated financial statements.
Sales from external customers per division as reported internally are as follows (amounts in
thousands):
2016 2015 2014

Sales to Quintel $19,371 $ $
Discrete 12,487 11,296 10,800
Integrated Circuits 9,818 8,119 8,556
Multichip 9,681 10,163 9,629
New Products 5,273 5,415 5,221
Quad-Flat No-Leads 4,938 5,143 3,848
Outdoor Unit 4,903 7,519 2,008
Bridgewave Ems 3,024 2,368 2,969
Hermetics 1,488 2,083 2,008
Indoor Radio Frequency Unit 1,373 2,493 5,073
Cougar 241 329 94
Remec Manufacturing Services 125 272 124
Indoor Unit 1,691 562
$72,722 $56,891 $50,892
CATS - Philippine Branchs service income amounted to $1.6 million and $2.2 million in 2016
and 2015, respectively. In 2016, service income pertains to sales and production of ODR, EMS
and IRFU and billings to customers for inventory variances. In 2015, service income is primarily
related to the sales and production of IRFU.
Below are customers contributing at least 10% of the Groups total sales for each year. Sales to
these customers are as follows (amounts in thousands):
2016 2015 2014

Major Customer A* $19,371 $ $
Major Customer B 10,060 12,728 10,778
Major Customer C 7,728 8,858 10,495
*After the acquisition of CATS, the Groups revenue grew from a single major customer
The Groups customers are located in various countries, with the bulk of revenues contributed by
customers located in Europe and the USA. Following shows the revenue distribution of customers
by revenue contribution (amounts in thousands):
2016 2015 2014

USA $41,144 $32,436 $23,880
Europe 19,390 16,941 17,238
Asia 13,788 10,172 10,674
$74,322 $59,549 $51,792
There are no sales made to entities under common control with the Group.
*SGVFS022305*
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26. Financial Risk Management Objectives and Policies
The Groups principal financial instruments comprise of cash and cash equivalents, short term
loans and long-term debt. The main purpose of these financial instruments is to support the
Groups operations. The Group has various other financial instruments such as trade and other
receivables, amounts owed by related parties, rental deposits and loans to employees (presented as
part of other current assets), miscellaneous deposits (presented under other noncurrent assets),
trade and other payables, amounts owed to related parties and derivative liability which generally
arise directly from its operations.
Risk Management Structure

The BOD is mainly responsible for the overall risk management approach and for the approval of
risk strategies and principles of the Group.
The main risks arising from the financial instruments of the Group are credit risk, liquidity risk
and foreign currency risk. The Groups management reviews and approves policies for managing
each of these risks and they are summarized below.
Credit risk
Credit risk is the risk that the Group will incur a loss because its customers or counterparties failed
to discharge their contractual obligations.
The Group trades only with recognized, creditworthy third parties. It is the Groups policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Groups
exposure to bad debts is not significant.
The table below shows the maximum exposure to credit risk of the Groups financial assets. The
maximum exposure is shown net of impairment losses, if any:
2016 2015
Cash and cash equivalents* $24,511,243 $29,776,426
Trade and other receivables 23,172,423 13,749,783
Financial assets at FVPL 503 19,447,248
Other current assets
Rental deposit 1,131,399 1,131,399
AFS financial asset 1,667,000 1,667,000
Other noncurrent assets
Total credit risk exposure $63,854,321 $77,838,437
*Excluding cash on hand as of December 31, 2016 and 2015 amounting to $250 and $440, respectively.
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The aging analyses per class of financial assets that are past due but not yet impaired are as
follows:
December 31, 2016

Neither Past Impaired
Due nor Past Due but not Impaired Financial
Impaired < 30 days 30< 60 days 60-90 days > 90 days Assets Total
Cash and cash
equivalents* $24,511,243 $ $ $ $ $ $24,511,243
Trade and other
receivables 17,226,175 2,031,535 601,105 3,286,553 27,055 23,172,423
Financial assets at FVPL 503 503
Amounts owed by
related parties 12,436,575 12,436,575
Rental deposit 1,131,399 1,131,399
$57,727,686 $2,031,535 $601,105 $3,286,553 $207,442 $ $63,854,321
*Excluding cash on hand amounting to $250.
December 31, 2015

Neither Impaired
Past Due Past Due but not Impaired Financial
nor Impaired < 30 days 30< 60 days 60-90 days > 90 days Assets Total
Cash and cash
equivalents* $29,776,426 $ $ $ $ $ $29,776,426
Trade and other
receivables 9,318,862 1,838,198 190,185 98,815 2,344,735 13,790,795
Financial assets at FVPL 19,447,248 19,447,248
Amounts owed by
related parties 10,606,082 10,606,082
Rental deposit 1,131,399 1,131,399
$73,226,460 $1,838,198 $190,185 $98,815 $2,525,122 $ $77,878,780
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The tables below summarize the credit quality per class of the Groups financial assets that are
neither past due nor impaired:
December 31, 2016

Neither Past Due nor Impaired
High Grade Medium Grade Low Grade Total
Cash and cash equivalents* $24,511,243 $ $ $24,511,243
Trade and other receivables 17,194,529 31,646 17,226,175
Rental deposit 1,131,399 1,131,399
$57,696,040 $31,646 $ $57,727,686
December 31, 2015

Cash and cash equivalents* $29,776,426 $ $ $29,776,426
Financial assets at FVPL 19,447,248 19,447,248
Rental deposit 1,131,399 1,131,399
$73,102,589 $123,871 $ $73,226,460
* Excluding cash on hand.
High grade - These are receivables which have a high probability of collection (the counterparty
has the apparent ability to satisfy its obligation and the security on the receivables are readily
enforceable).
Medium grade - These are receivables where collections are probable due to the reputation and the
financial ability of the counterparty to pay and that have history of sliding beyond the credit terms
but pay within 60 days.
Low grade - These are receivables where the counterpartys capability of honoring its financial
obligation is doubtful.
Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulties in raising funds to meet
commitments from financial instruments. Liquidity risk may result from a counterpartys failure
on repayment of a contractual obligation or inability to generate cash inflows as anticipated.
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The Group maintains sufficient cash to finance its operations and major capital expenditures and
satisfy its maturing obligations. It may also from time to time seek other sources of funding,
which may include debt or equity financings, including dollar and peso-denominated loans from
Philippine banks, depending on its financing needs and market conditions.
The tables below summarize the maturity analysis of the Groups financial assets used for
liquidity management and financial liabilities based on contractual undiscounted payments:
December 31, 2016

Less than
On demand 1 year 1 to 2 years > 2 to 5 years Total
Financial Assets
Cash and cash equivalents $24,511,493 $ $ $ $24,511,493
Trade and other receivables 17,743,459 5,428,964 23,172,423
$54,683,621 $5,428,964 $ $ $60,112,585
Financial Liabilities
Trade and other payables
Trade payables $13,192,707 $ $ $ $13,192,707
Accrued expenses* 1,328,378 1,328,378
Short-term loans 31,625,945 31,625,945
Long-term debts** 8,504,914 16,579,760 24,450,000 49,534,674
$13,520,043 $41,459,237 $16,579,760 $24,450,000 $96,009,040
*Excluding statutory liabilities
**Includes future interest payments
December 31, 2015

Less than
Financial Assets
Cash and cash equivalents $29,776,866 $ $ $ $29,776,866
Trade and other receivables 4,430,921 4,881,011 6,930 9,318,862
$44,832,869 $4,881,011 $6,930 $ $49,720,810
Trade payables $8,569,122 $ $ $ $8,569,122
Short-term loans 10,835,088 10,835,088
Long-term debts 9,636,827 7,953,550 7,163,975 24,754,352
$9,064,808 $21,625,844 $7,953,550 $7,163,975 $45,808,177
Foreign currency risk

The Group uses the US dollar as its functional currency and is therefore exposed to foreign
exchange movements, primarily in Philippine Peso currency. The Group follows a policy to
manage its currency risk by closely monitoring its cash flow position and by providing forecast on
all other exposures in non-US dollar currencies.
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The following table demonstrates the sensitivity to a reasonably possible change in the foreign
exchange rate, with all other variables held constant, of the Groups income before income tax as
of December 31, 2016 and 2015:
December 31, 2016

Original
Currency in Total Dollar
Php1 Equivalent
Financial Assets
Cash and cash equivalents P
=48,683,931 $979,162
HTM investments 18,238,638 371,520
Other current assets 38,988,542 784,162
Total Financial Assets 671,478,783 13,509,898
Financial Liability
Trade and other payables 80,312,280 1,615,291
Net Financial Assets P
=591,166,503 $11,894,607
1
P
= 1 = $.0201
December 31, 2015

Original
Currency in Total Dollar
1
Php Equivalent
Financial Assets
Cash and cash equivalents =113,436,344
P $2,410,462
Trade and other receivables 5,760,369 122,405
Financial asset at FVPL 502,585,192 10,679,668
HTM investments 41,652,610 885,096
Amounts owed by related parties 38,025,000 808,011
Other current assets 2,144,234 45,564
Other noncurrent assets 6,408,057 136,168
Total Financial Assets 710,011,806 15,087,374
Trade and other payables 47,709,773 1,013,807
Amounts owed to related parties 374,513,357 7,958,210
Total Financial Liabilities 422,223,130 8,972,017
Net Financial Assets =287,788,676
P $6,115,357
1
P
= 1 = $.0213
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December 31, 2016

Foreign
Currency Effect on Foreign Effect on
Appreciates Income Currency Income
by Before Tax Depreciates by Before tax
Peso denominated assets +6% ($810,594) -6% $810,594
Peso denominated liabilities +6% 96,917 -6% (96,917)
($713,677) ($713,677)
December 31, 2015

Foreign
Currency Effect on Foreign Effect on
Appreciates Income Currency Income
by Before Tax Depreciates by Before tax
Peso denominated assets +5% ($758,836) -5% $758,836
Peso denominated liabilities +5% 314,054 -5% (314,054)
($444,782) $444,782
The change in currency rate is based on the Groups best estimate of its expected change
considering the historical trends and experiences. There is no other effect on the Groups equity
other than those already affecting income before tax.
Capital Management
The primary objective of the Groups capital management is to ensure that it maintains a strong
credit rating and healthy capital ratios in order to support its business and maximize shareholder
value.
The Groups manages its capital structure, which pertains to its equity as shown in the balance
sheet, and makes adjustments to it in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares. No changes were made to the objectives, policies or
processes in 2016 and 2015.
The Company considers the following as capital:
2016 2015
Common stock $9,594,321 $9,594,321
Equity reserve 4,138,375 4,138,375
$74,735,404 $70,747,376
As of December 31, 2016, the Group is subject to externally imposed capital requirements.
As of December 31, 2016, the Group was able to meet its capital requirements and management
objectives.
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27. Fair Value Measurement
As of December 31, 2016 and 2015, the carrying values of the Groups financial assets and
liabilities approximate their respective fair values, except for the following financial instruments:
2016 2015
Carrying Carrying
Amount Fair Value Amount Fair Value
Financial assets
Financial assets at FVPL $503 $503 $19,447,248 $19,447,248
HTM investments 371,520 71,520 889,789 965,286
$372,023 $372,023 $20,337,037 $20,412,534
Other financial liabilities
Long-term debts $43,859,971 $43,859,971 $23,216,421 $24,516,928
Fair value is defined as the amount at which the financial instrument could be exchanged in a
current transaction between knowledgeable willing parties in an arms length transaction, other
than in a forced liquidation or sale.
Cash and cash equivalents, trade and other receivables, loans to employees, trade and other
payables, short-term loans, amounts owed by and owed to related parties and deposits
The carrying amounts approximate fair value since these are mostly short-term in nature or a due
and demandable.
Financial assets at FVPL - UITF

The investments in Unit Investment Trust Fund classified as financial asset at FVPL are stated at
their fair value based on lowest level input (Level 2).
Financial assets at FVPL - RCBC Senior Notes

The investment in RCBC Senior Notes classified as financial asset at FVPL is stated at its fair
values based on the quoted prices in an active market (Level 1).
HTM Investments
The fair value of HTM investments that are actively traded in organized financial markets is
determined by reference to quoted market bid prices, at the close of business on the reporting date
or last trading day as applicable (Level 1).
Miscellaneous deposits
The miscellaneous deposits are carried at cost since the timing and related amounts of future cash
flows cannot be reasonably and reliably estimated for purposes of establishing its fair value using
an alternative valuation technique.
Long-term debt
The fair value of long-term debt is based on the discounted value of future cash flows using the
applicable rates for similar types of loans. Discounts rates used range from 3.63% to 3.70% in
2016.
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Fair Value Hierarchy

The Group held the following financial assets and liabilities measured at fair value or at cost, but
for which fair values are disclosed and their corresponding level in fair value hierarchy:
2016
Total Level 1 Level 2 Level 3
Financial assets measured at
fair value
Financial assets at FVPL $503 $503 $ $
Financial assets and liabilities
measured at amortized cost
but for which fair values are
disclosed
Long-term debt 36,977,844 36,977,844
2015
fair value
Financial assets at FVPL $19,447,248 $8,767,580 $10,679,668 $
measured at amortized cost
but for which fair values are
disclosed
Long-term debt 24,516,928 24,516,928
28. Equity
a. Common Shares
The rollforward of the capital stock of the Parent Company follows:
2016 2015
Number of shares
Authorized - common shares (P =1.00 par value) 520,000,000 520,000,000
Issued
Beginning of year 419,063,353 308,239,419
Stock dividend - issued and distributed
(see Note 15c) 30,823,934
Issuance of stock 80,000,000
End of year 419,063,353 419,063,353
Amount
Issued - shares 419,063,353 in 2016 and 2015 $9,594,321 $9,594,321
On November 18, 2011, the Parent Company listed with the PSE its common stock, wherein it
offered 42,163,000 shares to the public at issue price of =
P7 per share. The total proceeds with
issuance of new shares amounted to P =295.1 million ($6.8 million). The Parent Company
incurred transaction costs incidental to the IPO amounting to P=47.3 million ($1.1 million),
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which is charged against Additional paid-in capital in 2011. As of December 31, 2011, the
Parent Companys has 162,163,000 issued common shares.
On May 25, 2012, the BOD declared a twenty percent (20%) stock dividend to stockholders.
On the same date, the stockholders approved and ratified to stock dividend payable to
stockholders as of record as of June 8, 2012, distributed on June 29, 2012.
On September 14, 2012, the BOD declared a twenty percent (20%) stock dividend to
stockholders of record as of December 21, 2012, distributed on January 10, 2013. On
December 7, 2012, the stockholders approved the twenty percent (20%) stock dividend.
On January 16, 2013, the BOD declared a twenty percent (20%) stock dividend to
stockholders. On the same date, the stockholders approved the stock dividend payable to
stockholders of record as of March 15, 2013, distributed on April 5, 2013.
On January 29, 2014, the BOD also declared a ten (10%) stock dividend. During the special
stockholders meeting dated July 11, 2014, the shareholders approved and ratified the
declaration of 10% stock dividend payable to stockholders of record as of July 25, 2014 and
payment date of August 20, 2014.
On March 24, 2015, the BOD also declared a ten (10%) stock dividend. On May 12, 2015,
the shareholders approved and ratified the declaration of 10% stock dividend payable to
stockholders of record as of May 26, 2015 and payment date of June 18, 2015.
On March 24, 2015, the Parent Companys BOD, by majority vote, and shareholders
representing two-thirds of the outstanding capital stock thereof approved the amendment of
the articles of incorporation to increase the Parent Companys authorized capital stock by
P
=160,000,000 or from P =400,000,000 divided into 400,000,000 common shares with a par
value of =P1.00 per share, to =
P560,000,000 divided into 520,000,000 common shares with a par
value of =P1.00 per share and 400,000,000 preferred shares with a par value of P
=0.10 per share.
The BOD also authorized the Parent Company to offer 120,000,000 shares for sale or
subscription through a follow-on offering (FOO).
On July 22, 2015, the Philippine SEC approved the Companys application to increase its
authorized capital stock.
On November 4, 2015, the Parent Companys FOO was completed. The Parent Company
issued 80,000,000 new shares at issue price of P
=20 per share for a total amount of
$34.2 million. The Parent Company incurred transactions costs incidental to FOO amounting
to $1.2 million which is charged against Additional paid-in capital in the 2015 consolidated
balance sheet.
On October 24, 2016, the Parent Companys BOD approved by majority vote the amendment
of the articles of incorporation to increase the Parent Companys authorized capital stock by
P
=1,440,000,000 or from = P560,000,000 divided into 520,000,000 common shares with a par
value of =P1.00 per share and 400,000,000 preferred shares with a par value of P =0.10 per share
(Preferred A shares), to =P2,000,000,000 divided into 1,400,000,000 common shares with a
par value of =P1.00 per share and 600,000,000 preferred shares classified into P =140,000,000
Preferred A with a par value of = P1.00 per share, and =
P460,000,000 worth of new preferred
shares, the par values, series, classes, preferences, convertibility voting rights and other
*SGVFS022305*
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features of which shall be determined by the Parent Companys BOD. The stockholders have
yet to vote on these matters as of April 12, 2017.

On December 23, 2016, CEC acquired a total of 112,018,659 common shares of the Parent
Company for P=2.3 billion ($49.6 million). The shares purchased were recorded at cost and
deducted from equity in the consolidated balance sheet.
As of December 31, 2016 and 2015, the Parent Company has a total number of 25 and 19
stockholders, respectively.
b. Preferred Shares
2016 2015
Number of shares
Authorized (P
=0.10 par value) 400,000,000 400,000,000
Subscribed 400,000,000 400,000,000
Amount
Subscribed - 400,000,000 shares (net of
subscriptions receivable amounting to
$663,717) $221,239 $221,239
In 2015, the 400,000,000 preferred shares at par value of P

=0.10 were subscribed by Camerton,
a principal shareholder of the Parent Company. As of December 31, 2016 and 2015, unpaid
subscriptions amounted to $663,717.
The features of the preferred shares are (i) full voting rights, one vote for each share;
(ii) preferred non-cumulative cash dividends at the rate of 1% of their par value per year, with
no participation in further cash dividends which may be declared and paid to the common
shares or any other class or series of shares; and (iii) the same stock dividends which may be
declared and paid to the common shares or any other class or series of shares.
c. Retained Earnings
On February 23, 2015, the Parent Companys BOD approved the declaration of cash dividends
of $1,200,000 or $0.003893 per share, payable on March 27, 2015 to stockholders of record as
of March 10, 2015. The cash dividend shall be paid in Philippine Peso at Bangko Sentral ng
Pilipinas (BSP) exchange rate one day before payment date.
On August 10, 2015, the Parent Companys BOD approved the declaration of cash dividends
of $891,200 or $0.002628 per share for each of 339,063,353 fully paid and issued common
shares and $8,800 or $0.000022 per share for each of the 400,000,000 outstanding preferred
shares, amounting to an aggregate sum of $900,000, for payment and distribution on
August 28, 2015 to shareholders of record of August 25, 2015. The cash dividend shall be
paid in Philippine Peso at the BSP exchange rate one day prior to payment date.
On January 28, 2016, the Parent Companys BOD approved the declaration of cash dividends
of $0.0050 per share for each of 419,063,353 fully paid and issued common shares and
$0.000021 per share for each of the 400,000,000 outstanding preferred shares, amounting to
an aggregate sum of $2,100,000, for payment and distribution on February 29, 2016 to
*SGVFS022305*
- 60 -
shareholders of record of February 12, 2016. The cash dividend shall be paid in Philippine
Peso at the BSP exchange rate one day prior to payment date.
On June 9, 2016, the Parent Companys BOD approved the declaration of cash dividends of
$0.00362 per share for each of 419,063,353 fully paid and issued common shares and
an aggregate sum of $1,520,000, for payment and distribution on July 7, 2016 to shareholders
of record of June 23, 2016. The cash dividend shall be paid in Philippine Peso at the BSP
exchange rate one day prior to payment date.
29. Commitments
The following are the significant commitments and contingencies involving the Group:
Outsourcing Manufacturing Agreement (OMA)

On July 30, 2014, CATS entered into an OMA (herein referred to as the Agreement) with
RBWHI in conjunction with the Share Purchase Agreement (SPA) entered into between CEIC and
RBWHI. CATS will perform manufacturing services to RBWHI in accordance with the
production files and specifications as provided in the Agreement. The contract term is for ten (10)
years with automatic renewal of additional one (1) year period. All payments to CATS shall be
made in US Dollars and shall be paid sixty (60) days after the receipt of the invoice.
Master Service Agreement (MSA)

CATS entered into an MSA with RBWHI on July 30, 2014 where CATS will provide to RBWHI
the services of selected employees and consultants (or Business Services) of CATS. CATS
shall be responsible for and shall timely pay any and all compensation and benefits payable to the
employees of and consultants of CATS who perform Business Services. MSA has a ten (10) year
term with automatic renewal of additional one year period.
Manufacturing Services Agreement (MSA)

On October 20, 2015, CATS, the Seller, entered into a manufacturing service agreement with a
customer, whereas the customer desires to purchase the products defined in the agreement
specifically for its latest range of mm-Wave converter products. The term of the agreement is 3
years from the effective date subject to automatic renewal for one year every year thereafter.
On November 4, 2015, CATS and Quintel Technology Ltd. entered into a master supply
agreement that covers the manufacturing of specific antennas and other Quintel products set forth
in individual purchase order agreements. The initial term for this agreement shall be for a period
of 3 years. CATS shall also provide support services for the following: New Product Introduction,
Production experiments, and Mass volume production. All payments to CATS shall be placed
within 90 days following the end of the month after receipt of invoice.
On April 20, 2016, the contract was amended to extend the contract term, from a period of 3 years
to a period of 5 years from the commencement date of the original agreement.
*SGVFS022305*
- 61 -
30. Note to Statement of Cash Flows
The Group has noncash investing activity representing the transfer of ownership over the assets
and liabilities assumed related to the acquisition of CATS entities in 2014, as discussed in Note 4
to the consolidated financial statements. This transaction has resulted to an increase in certain
assets and liabilities as enumerated in Note 4.
31. Other Matters
CEC is a defendant in certain legal cases which are currently pending before the courts and other
government bodies. In the opinion of management and CECs legal counsel, any adverse decision
on these cases would not materially affect the consolidated financial position as of
December 31, 2016 and 2015 and results of operations for the years ended December 31, 2016,
2015 and 2014.
*SGVFS022305*

ON SUPPLEMENTARY SCHEDULES
The Board of Directors and Stockholders

Phase V-SEZ
Laguna Technopark
Bian, Laguna
We have audited the accompanying consolidated financial statements of Cirtek Holdings Philippines
Corporation and its Subsidiaries (the Group) as at December 31, 2016 and 2015 and for each of the
three years in the period ended December 31, 2016 in accordance with Philippine Standards on
Auditing, and have issued our report thereon dated April 12, 2017. Our audits were made for the
purpose of forming an opinion on the basic financial statements taken as a whole. Schedules I to IV
and A to H listed in the Index to the Consolidated Financial Statements and Supplementary Schedules
are the responsibility of the Groups management. These schedules are presented for the purpose of
complying with the Securities Regulation Code Rule 68, As Amended (2011), and are not part of the
basic financial statements. These schedules have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, fairly state, in all material respects, the
information required to be set forth therein in relation to the basic financial statements taken as a
whole.
Partner
BIR Accreditation No. 08-001998-109-2015,
April 12, 2017
*SGVFS022305*
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY SCHEDULES
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2016
Schedule Contents
Index to the Consolidated Financial Statements
I Map Showing the Relationships Between and Among the Companies in the
Group, its Ultimate Parent Company and Co-subsidiaries
II Schedule of All Effective Standards and Interpretations Under Philippine
Financial Reporting Standards
III Reconciliation of Retained Earnings Available for Dividend Declaration
IV Financial Soundness Indicators
Supplementary Schedules
A Financial Assets
Amounts Receivable from Directors, Officers, Employees, Related

B
Parties, and Principal Stockholders (Other than Related parties)
Amounts Receivable from Related Parties and Amounts Payable to Related

C Parties which are Eliminated during the Consolidation of Financial
Statements
D Intangible Assets - Other Assets
E Long-Term Debt
F Indebtedness to Related Parties
G Guarantees of Securities of Other Issuers
H Capital Stock
*SGVFS022305*
MAP SHOWING THE RELATIONSHIPS BETWEEN AND AMONG THE
COMPANIES IN THE GROUP, ITS ULTIMATE PARENT COMPANY AND CO-
SUBSIDIARIES
DECEMBER 31, 2016
Carmetheus Holdings, Inc.
60.0%
Camerton Inc.
49.96% 50.04%
CHPC Public
100% 100%
CEC CEIC
100%
CATS
CATS- Phil. Branch
100%
RBWRP
*SGVFS022305*
SCHEDULE OF EFFECTIVE STANDARDS AND INTERPRETATIONS
DECEMBER 31, 2016
PHILIPPINE FINANCIAL REPORTING STANDARDS

Not Not
AND INTERPRETATIONS Adopted
Adopted Applicable
Effective as at December 31, 2016
Framework for the Preparation and Presentation of
Conceptual Framework Phase A: Objectives and qualitative
characteristics
PFRS Practice Statement Management Commentary
Philippine Financial Reporting Standards
PFRS 1 First-time Adoption of Philippine Financial
(Revised) Reporting Standards
Amendments to PFRS 1 and PAS 27: Cost of an
Investment in a Subsidiary, Jointly Controlled
Entity or Associate
Amendments to PFRS 1: Additional
Exemptions for First-time Adopters
Amendment to PFRS 1: Limited Exemption
from Comparative PFRS 7 Disclosures for
First-time Adopters
Amendments to PFRS 1: Severe Hyperinflation
and Removal of Fixed Date for First-time
Adopters
Amendments to PFRS 1: Government Loans
PFRS 2 Share-based Payment
Amendments to PFRS 2: Vesting Conditions
and Cancellations
Amendments to PFRS 2: Group Cash-settled
Share-based Payment Transactions
Amendments to PFRS 2: Definition of Vesting
Condition
Amendments to PFRS 2: Classification and
Measurement of Share-based Payment
Transactions*
PFRS 3 Business Combinations
(Revised)
Amendments to PFRS 3 : Accounting for
Contingent Consideration in a Business
Combination
Amendments to PFRS 3 : Scope Exceptions for
Joint Arrangements
*These standards, interpretations and amendments to existing standards will become effective subsequent to
December 31, 2016. The Parent Company did not early adopt these standards, interpretations and amendments.
*SGVFS022305*
2

Not Not
Adopted Applicable
PFRS 4 Insurance Contracts
Amendments to PAS 39 and PFRS 4: Financial
Guarantee Contracts
Amendments to PFRS 4: Applying PFRS 9,
Financial Instruments, with PFRS 4*
PFRS 5 Non-current Assets Held for Sale and
Discontinued Operations
Changes in Method of Disposal
PFRS 6 Exploration for and Evaluation of Mineral
Resources
PFRS 7 Financial Instruments Disclosures
Amendments to PFRS 7: Transition
Amendments to PAS 39 and PFRS 7:
Reclassification of Financial Assets
Reclassification of Financial Assets - Effective
Date and Transition
Amendments to PFRS 7: Improving
Disclosures about Financial Instruments
Amendments to PFRS 7: Disclosures -
Transfers of Financial Assets
Offsetting Financial Assets and Financial
Liabilities
Amendments to PFRS 7: Mandatory Effective
Date of PFRS 9 and Transition Disclosures
Amendments to PFRS 7: Applicability of the
Amendments to PFRS 7 to Condensed Interim
Amendments to PFRS 7: Servicing Contracts
PFRS 8 Operating Segments
Amendments to PFRS 8 : Aggregation of
Operating Segments and Reconciliation of the
Total of the Reportable Segments Assets to the
Entitys Asset
PFRS 9 Financial Instruments*
*SGVFS022305*
3

Not Not
Adopted Applicable
PFRS 10 Consolidated Financial Statements
Amendments to PFRS 10: Transition Guidance
Amendments to PFRS 10, PFRS 12 and PAS
27: Investment Entities
Amendments to PFRS 10, PFRS 12 and
PAS 28, Investment Entities: Applying the
Consolidation Exception
Amendments to PFRS 10 and PAS 28: Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture*
PFRS 11 Joint Arrangements
Amendments to PFRS 11: Accounting for
Acquisitions of Interests in Joint Operations
PFRS 12 Disclosure of Interests in Other Entities
PAS 27: Investment Entities
Clarification of the Scope of the Standard*
PFRS 13 Fair Value Measurement
Amendments to PFRS 13 : Portfolio Exception
PFRS 14 Regulatory Deferral Accounts
PFRS 15 Revenue from Contracts with Customers*
PFRS 16 Leases*
Philippine Accounting Standards
PAS 1 Presentation of Financial Statements
(Revised)
Amendment to PAS 1: Capital Disclosures
Amendments to PAS 32 and PAS 1: Puttable
Financial Instruments and Obligations Arising
on Liquidation
Amendments to PAS 1: Presentation of Items of

Amendments to PAS 1, Disclosure Initiative
*SGVFS022305*
4

Not Not
Adopted Applicable
PAS 2 Inventories
PAS 7 Statement of Cash Flows
Amendments to PAS 7: Disclosure Initiative*
PAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors
PAS 10 Events after the Reporting Period
PAS 11 Construction Contracts
PAS 12 Income Taxes
Amendment to PAS 12 : Deferred Tax:
Recovery of Underlying Assets
Amendments to PAS 12: Recognition of
Deferred Tax Assets for Unrealized Losses*
PAS 16 Property, Plant and Equipment
Amendments to PAS 16 and PAS 38:
Clarification of Acceptable Methods of
Depreciation and Amortization
Amendments to PAS 16 and 38: Proportionate
Restatement of Accumulated Amortization
Amendments to PAS 16 and PAS 41: Bearer
Plants
PAS 17 Leases 2
PAS 18 Revenue 2
PAS 19 Employee Benefits 2
(Revised)
Amendments to PAS 19: Actuarial Gains and
Losses, Group Plans and Disclosures 2
Regional Market Issue Regarding Discount
Rate
Amendments to PAS 19: Defined Benefit Plans:
Employee Contributions
PAS 20 Accounting for Government Grants and
Disclosure of Government Assistance
PAS 21 The Effects of Changes in Foreign Exchange
Rates
Amendment: Net Investment in a Foreign
Operation
*SGVFS022305*
5

Not Not
Adopted Applicable
PAS 23 Borrowing Costs
(Revised)
PAS 24 Related Party Disclosures
(Revised)
Key Management Personnel
PAS 26 Accounting and Reporting by Retirement
Benefit Plans
PAS 27 Separate Financial Statements
(Amended)
Amendment: Equity Method in Separate
PAS 28 Investments in Associates and Joint Ventures
(Amended)
28, Investment Entities: Applying the
Amendments to PAS 28: Measuring an
Associate or Joint Venture at Fair Value*
PAS 29 Financial Reporting in Hyperinflationary
Economies
PAS 32 Financial Instruments: Disclosure and
Presentation
on Liquidation
Amendment to PAS 32: Classification of Rights
Issues
Amendments to PAS 32: Offsetting Financial
Assets and Financial Liabilities
PAS 33 Earnings per Share
PAS 34 Interim Financial Reporting
Disclosure of Information Elsewhere in the
Interim Financial Report
PAS 36 Impairment of Assets
Amendment to PAS 36: Impairment of
Assets - Recoverable Amount Disclosures for
Non-Financial Assets
*SGVFS022305*
6

Not Not
Adopted Applicable
PAS 37 Provisions, Contingent Liabilities and
Contingent Assets
PAS 38 Intangible Assets
PAS 39 Financial Instruments: Recognition and
Measurement
Amendments to PAS 39: Transition and Initial
Recognition of Financial Assets and Financial
Liabilities
Amendments to PAS 39: Cash Flow Hedge
Accounting of Forecast Intragroup Transactions
Amendments to PAS 39: The Fair Value Option
Guarantee Contracts
Date and Transition
Amendments to Philippine Interpretation
IFRIC-9 and PAS 39: Embedded Derivatives
Amendment to PAS 39: Eligible Hedged Items
Amendment to PAS 39: Novation of
Derivatives and Continuation of Hedge
Accounting
PAS 40 Investment Property
Interrelationship between PFRS 3 and PAS 40
Amendments to PAS 40: Transfers of
Investment Property*
PAS 41 Agriculture
Philippine Interpretations
IFRIC 1 Changes in Existing Decommissioning,
Restoration and Similar Liabilities
IFRIC 2 Members Share in Co-operative Entities and
Similar Instruments
*SGVFS022305*
7

Not Not
Adopted Applicable
IFRIC 4 Determining Whether an Arrangement Contains
a Lease
IFRIC 5 Rights to Interests arising from
Decommissioning, Restoration and
Environmental Rehabilitation Funds
IFRIC 6 Liabilities arising from Participating in a
Specific Market - Waste Electrical and
Electronic Equipment
IFRIC 7 Applying the Restatement Approach under
PAS 29 Financial Reporting in
Hyperinflationary Economies
IFRIC 8 Scope of PFRS 2
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC - 9 and PAS 39: Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11 PFRS 2- Group and Treasury Share
Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their
Interaction
Amendments to Philippine Interpretations
IFRIC- 14, Prepayments of a Minimum
Funding Requirement
IFRIC 15 Agreements for the Construction of Real
Estate*
IFRIC 16 Hedges of a Net Investment in a Foreign
Operation
IFRIC 17 Distributions of Non-cash Assets to Owners
IFRIC 18 Transfers of Assets from Customers
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments
IFRIC 20 Stripping Costs in the Production Phase of a
Surface Mine
IFRIC 21 Levies
*SGVFS022305*
8

Not Not
Adopted Applicable
IFRIC 22 Foreign Currency Transactions and Advance
Consideration*
SIC-7 Introduction of the Euro
SIC-10 Government Assistance - No Specific Relation
to Operating Activities
SIC-15 Operating Leases - Incentives
SIC-25 Income Taxes - Changes in the Tax Status of an
Entity or its Shareholders
SIC-27 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease
SIC-29 Service Concession Arrangements: Disclosures
SIC-31 Revenue - Barter Transactions Involving
Advertising Services
SIC-32 Intangible Assets - Web Site Costs
*SGVFS022305*
CIRTEK HOLDINGS PHILIPPINES CORPORATION
RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR
DIVIDEND DECLARATION
DECEMBER 31, 2016
Unappropriated retained earnings, as adjusted, beginning $405,556

Add: Net income actually earned/realized during the period
Net income during the period closed to retained earnings $3,670,480
Add: Non-actual losses
Less: Non-actual/unrealized income net of tax
Net income actually earned during the period 3,670,480
Unappropriated retained earnings, as adjusted, ending 4,076,036
Less: Cash dividends declared (3,620,000)
Retained earnings available for dividend declaration $456,036
*SGVFS022305*
FINANCIAL SOUNDNESS INDICATORS
DECEMBER 31, 2016
December 31, December 31,

Ratios Formula 2016 2015
Current Assets/Current
(i) Current Ratio Liabilities 1.54 3.11
(ii) Debt/Equity Ratio Bank Debts/ Total Equity 2.99 0.48
(iii) Net Debt/Equity
Ratio Bank Debts-Cash & 2.02 0.06
Equivalents/Total Equity
(iii) Asset to Equity
Ratio Total Assets/Total Equity 4.86 1.69
(iv) Interest Cover
Ratio EBITDA/Interest Expense 8.90 6.90
(v) Profitability
Ratios
GP Margin Gross Profit/Revenues 0.17 0.16
Net Profit Margin Net Income/Revenues 0.10 0.09
EBITDA Margin EBITDA/Revenues 0.16 0.15
Return on Assets Net Income/Total Assets 0.06 0.04
Return on Equity Net Income/Total Equity 0.30 0.07
*SGVFS022305*
SCHEDULE A

SUPPLEMENTARY SCHEDULE OF FINANCIAL ASSETS
Name of Valued based on

Issuing entity market quotation at Income
and association Amount shown in the end of reporting received or
of each issue the balance sheet period accrued
Cash and cash equivalents N/A $24,511,493 $24,511,493 $172,196
Trade and other receivables N/A 23,172,423 23,172,423
Financial asset at FVPL N/A 503 503 199,537
Amounts owed by related
parties N/A 12,436,575 12,436,575
Other current assets:
Rental deposit N/A 1,131,399 1,131,399
Security deposit N/A 180,387 180,387
Loan to employees N/A 239,823 239,823
HTM investments N/A 371,520 371,520 8,362
AFS financial asset N/A 1,667,000 1,667,000
Other noncurrent assets:
Loans to employees N/A 7,889 7,889
Miscellaneous deposits N/A 135,559 135,559
$63,854,571 $63,854,571 $380,095
*SGVFS022305*
SCHEDULE B

SUPPLEMENTARY SCHEDULE OF AMOUNTS RECEIVABLE FROM
DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES, AND
PRINCIPAL STOCKHOLDERS (OTHER THAN RELATED PARTIES)
Amounts Receivable from Officers, Employees and Related Parties

Balance at
Name and designation of Balance at beginning of Amounts the end of
debtor period Additions collected Current Not Current the period
Jerry Liu (Chairman) $8,558,051 $1,750,990 $ $10,309,041 $ $10,309,041
Employees 122,062 30,306 35,866 116,502 116,502
$8,680,113 $1,781,296 $35,866 $10,425,543 $ $10,425,543
Amounts owed by Related Parties

Balance at
Name and designation of Balance at beginning of Amounts the end of
debtor period Additions collected Current Not Current the period
Cirtek Holdings, Inc. $1,809,256 $ $ $1,809,256 $ $1,809,256
Camerton, Inc. 33,161 78,833 111,994 111,994
Cayon Holdings, Inc. 206,284 206,284 206,284
$2,048,701 $78,833 $ $2,127,534 $ $2,127,534
*SGVFS022305*
SCHEDULE C

RELATED PARTIES WHICH ARE ELIMINATED DURING THE
CONSOLIDATION OF FINANCIAL STATEMENTS
AS OF AND FOR THE PERIOD ENDED DECEMBER 31, 2016
Receivables from related parties which are eliminated during the consolidation
Balance at Amount Balance
beginning of Amount written at end of
Name and designation of debtor period Additions collected off Current Noncurrent period
Cirtek Electronics Corporation $13,121,898 $61,154,767 32,474,001 $ $41,802,664 $ $41,802,664
Cirtek Electronics International
Corporation 21,851,682 20,170,548 19,006,369 23,015,861 23,015,861
Cirtek Holdings Philippines
Corporation 40,769,256 49,566,534 90,335,790 90,335,790
Cirtek Advanced Technologies
and Solutions, Inc. 4,354,635 12,641 4,367,276 4,367,276
RBW Realty and Property, Inc. 297,394 274,775 22,619 22,619
$80,394,865 $130,904,490 $51,755,145 $ $159,544,210 $ $159,544,210
Amounts owed by related parties which are eliminated during the consolidation
Balance at Amount
beginning of Amount written Balance at end
Name and designation of debtor period Additions collected off Current Not current of period
Cirtek Electronics Corporation $50,897,189 $69,737,287 $18,622,689 $ $102,011,787 $ $102,011,787
Corporation 9,000,000 1,131,522 938,706 9,192,816 9,192,816
and Solutions, Inc. 5,877,751 19,183,720 834,053 24,227,418 24,227,418
Corporation 10,265,290 41,696,069 32,023,638 19,937,721 19,937,721
RBW Realty and Property, Inc. 4,354,635 180,167 4,174,468 4,174,468
$80,394,865 $131,748,598 $52,599,253 $ $159,544,210 $ $159,544,210
*SGVFS022305*
SCHEDULE D

SUPPLEMENTARY SCHEDULE OF INTANGIBLE ASSETS - OTHER
ASSETS
AS OF DECEMBER 31, 2016
Intangible Assets - Other Assets

Other
Charged to Charged to changes
Beginning Additions cost and other additions Ending
Description Balance at cost Expenses accounts (deductions) Balance
Product development
costs $569,942 $547,166 $194,888 $ $ $922,220
*SGVFS022305*
SCHEDULE E

SUPPLEMENTARY SCHEDULE OF LONG-TERM DEBT
Long-term Debt
Amount shown
under caption Amount shown
current portion under caption
of long-term in long-term debt in
Amount authorized related balance related balance
Title of issue and type of obligation by indenture sheet sheet
Notes payable $44,250,000 $6,882,126 $36,977,845
*SGVFS022305*
SCHEDULE F

SUPPLEMENTARY SCHEDULE OF INDEBTEDNESS TO RELATED
PARTIES (LONG-TERM LOANS FROM RELATED COMPANIES)
Indebtedness to related parties (Long-term loans from related companies)

Name of related party Balance at beginning of period Balance at end of period
Not Applicable
*SGVFS022305*
SCHEDULE G

SUPPLEMENTARY SCHEDULE OF GUARANTEES OF SECURITIES OF
OTHER ISSUERS
Guarantees of Securities of Other Issuers

Name of issuing entity of Title of issue of
securities guaranteed by the each class of Total amount Amount owned by
company for which this securities guaranteed and person for which
statement is filed guaranteed outstanding statement is file Nature of guarantee
Not Applicable
*SGVFS022305*
SCHEDULE H

SUPPLEMENTARY SCHEDULE OF CAPITAL STOCK
Capital Stock
Number of shares Number of
issued and shares reserved Number of
outstanding as for options Number of shares held
Number of shown under warrants, shares held by directors,
shares related balance conversion and by related officers and
Title of Issue authorized sheet caption other rights parties employees Others
Common Stock 520,000,000 419,063,353 320,907,217 9
Preferred Stock 400,000,000
*SGVFS022305*
Corporation and Subsidiaries
Interim Condensed Consolidated

June 30, 2017 and December 31, 2016
and Six Months Ended June 30, 2017 and
2016
and
Report on Review of Interim Condensed

Consolidated Financial Statements
*SGVFS025952*
REPORT ON REVIEW OF INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS
The Stockholders and Board of Directors

We have reviewed the accompanying interim condensed consolidated financial statements of

Cirtek Holdings Philippines Corporation and its subsidiaries, which comprise the interim consolidated
balance sheet as at June 30, 2017 and the related interim consolidated statements of comprehensive
income, changes in equity and cash flows for the six months ended June 30, 2017 and 2016, and other
explanatory information. Management is responsible for the preparation and fair presentation of these
interim condensed consolidated financial statements in accordance with Philippine Accounting Standards
(PAS) 34, Interim Financial Reporting. Our responsibility is to express a conclusion on this interim
condensed consolidated financial statements based on our review.
Scope of Review
We conducted our review in accordance with Philippine Standard on Review Engagements 2410, Review
of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of
interim financial information consists of making inquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with Philippine Standards on Auditing and
consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
interim condensed consolidated financial statements are not prepared, in all material respects, in
accordance with PAS 34, Interim Financial Reporting.
Partner
September 26, 2017
*SGVFS025952*

ON INTERIM SUPPLEMENTARY SCHEDULES
The Stockholders and Board of Directors

Phase V-SEZ
Laguna Technopark
Bian, Laguna
We have reviewed in accordance with Philippine Standard on Review Engagements 2410, Review of
Interim Financial Information Performed by the Independent Auditor of the Entity, the interim condensed
consolidated financial statements of Cirtek Holdings Philippines Corporation and its subsidiaries (the
Group) as at June 30, 2017 and for the six months ended June 30, 2017 and 2016 and have issued our
report thereon dated September 26, 2017. Our review was made for the purpose of expressing a
conclusion on the interim condensed consolidated financial statements taken as a whole. The schedules
listed in the Index to the Interim Condensed Consolidated Financial Statements and Supplementary
Schedules are the responsibility of the Groups management. These schedules are presented for purposes
of complying with Securities Regulation Code Rule 68, As Amended (2011), and are not part of the
interim condensed consolidated financial statements. These schedules have been subjected to the
procedures applied in the review of the interim condensed consolidated financial statements and, based on
our review, nothing has come to our attention that causes us to believe that the information required to be
set forth therein has not been prepared, in all material respects, in relation to the interim condensed
consolidated financial statements taken as a whole.
Partner
September 26, 2017
*SGVFS025952*
INTERIM CONSOLIDATED BALANCE SHEETS
JUNE 30, 2017
(With Comparative Audited Figures as at December 31, 2016)
June 30, 2017 December 31, 2016

(Unaudited) (Audited)
ASSETS
Current Assets
Cash (Note 3) $20,112,901 $24,511,493
Trade and other receivables (Note 4) 36,163,695 23,172,423
Inventories (Note 5) 13,741,197 15,281,893
Amounts owed by related parties (Note 15) 18,326,446 12,436,575
Held-to-maturity (HTM) investments (Note 8) 371,520
Financial asset at fair value through profit or loss (FVPL) (Note 6) 503 503
Other current assets (Note 7) 2,354,245 2,618,370
90,698,987 78,392,777
Noncurrent assets held for sale (Note 9) 11,408,611 11,408,611
Total Current Assets 102,107,598 89,801,388
Noncurrent Assets
Property, plant and equipment (Note 9) 29,379,168 28,675,910
Available-for-sale (AFS) financial asset (Note 10) 1,667,000 1,667,000
Held-to-maturity investments (Note 8) 487,030
Other noncurrent assets (Note 11) 11,654,695 2,170,859
Total Noncurrent Assets 43,362,471 32,688,347
TOTAL ASSETS $145,470,069 $122,489,735

Current Liabilities
Trade and other payables (Note 12) $14,500,851 $19,135,593
Short-term loans (Note 13) 27,020,945 31,625,945
Current portion of long-term debt (Note 14) 4,889,882 6,882,126
Amounts owed to related parties (Note 15) 531,786 520,152
Total Current Liabilities 47,123,157 58,491,472
Long-term debt - net of current portion (Note 14) 35,026,266 36,977,845
Retirement benefit obligation (Note 19) 1,770,547 1,807,847
Deferred income tax liabilities - net 3,373 3,373
Total Noncurrent Liabilities 36,800,186 38,789,065
Total Liabilities 83,923,343 97,280,537
Equity (Note 26)
Common stock 9,594,321 9,594,321
Equity reserve 1,452,863 4,138,375
75,083,243 74,775,733
Total Equity 61,546,726 25,209,198
TOTAL LIABILITIES AND EQUITY $145,470,069 $122,489,735
See accompanying Notes to Unaudited Interim Condensed Consolidated Financial Statements.
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INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016
2017 2016
NET SALES $42,181,565 $32,480,987
COST OF SALES (Note 16) (34,302,155) (26,479,919)
GROSS PROFIT 7,879,410 6,001,068
OPERATING EXPENSES (Note 17) (2,248,495) (2,121,066)
FINANCIAL INCOME (EXPENSE)
Interest income (Notes 3 and 6) 44,522 226,511
Interest expense (Notes 13 and 14) (1,052,548) (520,109)
(1,008,026) (293,598)
OTHER INCOME (CHARGES) - Net (Note 20) (35,170) 67,603
INCOME BEFORE INCOME TAX 4,587,719 3,654,007
PROVISION FOR INCOME TAX (Note 21)
Current 172,935 125,453
Deferred
172,935 125,453
NET INCOME 4,414,784 3,528,554
OTHER COMPREHENSIVE INCOME
TOTAL COMPREHENSIVE INCOME $4,414,784 $3,528,554

Basic/Diluted Earnings Per Share (Note 22) $0.011 $0.008
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INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2017 (Unaudited)

Parent
Common Additional Other Company
Stock Preferred Paid-in Equity Comprehensive Retained Shares Held
Issued Stock Capital Reserve Income Earnings by a Subsidiary Total
Balances at January 1, 2017 $9,594,321 $221,239 $35,896,893 $4,138,375 $40,329 $24,884,576 ($49,566,535) $25,209,198
Net income 4,414,784 4,414,784
Other comprehensive income
Total comprehensive income 4,414,784 4,414,784
Cash dividends declared (Note 26) (1,421,762) (1,421,762)
Sale of parent company shares held by a subsidiary
(Note 26) (2,685,512) 36,030,018 33,344,506
Balances at June 30, 2017 $9,594,321 $221,239 $35,896,893 $1,452,863 $40,329 $27,877,598 ($13,536,517) $61,546,726
For the Six Months Ended June 30, 2016 (Unaudited)

Additional Other
Common Preferred Paid-in Equity Comprehensive Retained
Stock Stock Capital Reserve Income Earnings Total
Balances at January 1, 2016 $9,594,321 $221,239 $35,896,893 $4,138,375 $526,420 $20,896,548 $71,273,796
Net income 3,528,554 3,528,554
Other comprehensive income
Total comprehensive income 3,528,554 3,528,554
Cash dividends declared (Note 26) (3,620,000) (3,620,000)
Balances at June 30, 2016 $9,594,321 $221,239 $35,896,893 $4,138,375 $526,420 $20,805,102 $71,182,350
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INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
2017 2016

Income before income tax $4,587,719 $3,654,007
Adjustments for:
Depreciation and amortization (Notes 16 and 17) 1,573,474 1,220,525
Interest expense (Notes 13 and 14) 1,052,548 520,109
Movement in net retirement benefit obligation (Note 19) (37,300) 46,963
Net unrealized foreign exchange gains (107,356)
Interest income (44,522) (226,511)
Operating income before working capital changes 7,024,563 5,215,093
Trade and other receivables (13,077,161) (490,467)
Inventories 1,540,696 (194,230)
Other current assets 275,244 (735,585)
Increase (decrease) in trade and other payables (4,643,104) 3,865,907
Net cash generated from (used in) operations (8,879,762) 7,660,718
Interest received 130,411 226,511
Net cash flows from (used in) operating activities (9,070,249) 7,750,195

Acquisitions of property, plant and equipment (Note 9) (2,221,029) (4,256,242)
Investment in HTM investments (487,030)
Proceeds from disposal of:
Financial assets at FVPL (Note 6) 1,289,655
Increase in other noncurrent assets (9,455,596) (345,454)
Net cash flows used in investing activities (11,792,135) (2,793,772)

Proceeds from:
Availment of short-term loans (Note 13) 10,000,000 2,438,000
Sale of Parent Company shares held by a subsidiary
(Note 26) 33,344,506
Payments of:
Cash dividends (Note 26) (1,421,762) (2,100,000)
Interest (Notes 13 and 14) (1,068,322) (484,998)
Long-term debt (Note 14) (4,000,000) (1,901,511)
Short-term loans (Note 13) (14,605,000) (1,190,000)
Net movements in amounts owed by and owed to related parties (5,878,237) (845,050)
Net cash flows from (used in) financing activities 16,371,185 (4,083,559)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 92,607
NET INCREASE (DECREASE) IN CASH (4,398,592) 872,864
CASH AT BEGINNING OF PERIOD 24,511,493 29,776,866
CASH AT END OF PERIOD $20,112,901 $30,649,730
*SGVFS025952*
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. Corporate Information
Cirtek Holdings Philippines Corporation (CHPC or the Parent Company) was incorporated
under the laws of the Republic of the Philippines on February 10, 2011 to invest in, purchase or
acquire personal property of every kind, including shares of stocks, bonds, debentures, notes,
evidences of indebtedness, and other securities.
The Parent Company was listed in the Philippine Stock Exchange on November 18, 2011.
Prior to the listing, the Parent Company had undergone a corporate reorganization on
March 1, 2011 which includes an acquisition from Cirtek Holdings, Inc. (CHI) of 155,511,952
common shares of Cirtek Electronics Corporation (CEC), and 50,000 shares of Cirtek Electronics
International Corporation (CEIC), representing 100% of the outstanding capital stock of both
companies. The above transaction was treated as a business combination of entities under
common control and was accounted for similar to pooling-of-interests method.
Camerton Inc. (Camerton) is the immediate parent of CHPC, while Carmetheus Holdings, Inc. is
the ultimate parent company of CHPC and its subsidiaries (the Group).
The Group is primarily engaged in the manufacture and sale of semiconductor packages as an
independent subcontractor for outsourced semiconductor assembly, test and packaging services.
CEC manufactures standard integrated circuits, discrete, hybrid and potential new packages and
provides complete turnkey solutions that include wafer probing, wafer back grinding, assembly
and packaging and final testing of semiconductor devices with majority of its client base located in
United States of America (USA). CEIC sells integrated circuits principally in the USA and
assigns the production of the same to CEC. The Parent Companys registered address is 116 East
Main Avenue, Phase V-SEZ, Laguna Technopark, Bian, Laguna.
Business Acquisition
On July 30, 2014, CEIC entered into a sale and purchase agreement with REMEC Broadband
Wireless Holdings (REMEC), for the purchase of 100% shares of REMECs manufacturing
division, REMEC Broadband Wireless International, Inc. (RBWI), a Philippine-based
manufacturer of value-added, highly integrated technology products. Based on the terms of the
sale, REMEC and its remaining subsidiaries will continue to design and market its top-of-class
telecommunications products globally under its REMEC brand, and, REMEC will enter into a
manufacturing agreement with RBWI to manufacture REMECs products under a long-term
contract manufacturing relationship. CEIC acquired RBWI for a consideration of $7.5 million.
CHPC funded the acquisition through a combination of available cash on hand and proceeds from
a corporate notes issuance. The closing date of the transaction is effective July 30, 2014.
RBWI is primarily engaged in the manufacture, fabrication and design of microwave components
and subsystems primarily for export. RBWI was renamed to Cirtek Advanced Technologies and
Solutions, Inc. (CATS) on November 21, 2014 at the British Virgin Islands and on
February 18, 2015 at the Philippine Securities and Exchange Commission (SEC).
Issuance of financial statements

The interim consolidated financial statements of the Group as at June 30, 2017 and for the
six months ended June 30, 2017 and 2016 were approved and authorized for issue by the Board of
Directors (BOD) on September 25, 2017.
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2. Basis of Presentation, Statement of Compliance, Basis of Consolidation and Summary of

Significant Accounting Policies
Basis of Preparation
The interim condensed consolidated financial statements of the Group have been prepared on a
historical cost basis, except for financial assets at FVPL which are carried at fair value. The
interim condensed consolidated financial statements are presented in United States (US) dollars
($), which is the Parent Companys functional and presentation currency. All amounts are
rounded off to the nearest US dollar except when otherwise indicated.
The interim condensed consolidated financial statements of the Group have been prepared in
accordance with Philippine Accounting Standards (PAS) 34, Interim Financial Reporting. The
interim condensed consolidated financial statements do not include all the information and
disclosures required in the annual consolidated financial statements and should be read in
conjunction with the Groups December 31, 2016 annual consolidated financial statements.
These interim condensed consolidated financial statements have been prepared solely for inclusion
in the offering circular to be prepared by the Group for its planned offering of preferred stock.
Basis of Consolidation
The interim condensed consolidated financial statements comprise the financial statements of the
Parent Company and the following subsidiaries:
Country of June 30, 2017 December 31, 2016
Incorporation Direct Indirect Direct Indirect
CEC Philippines 100 100
CEIC British Virgin Islands (BVI) 100 100
CATS (formerly known as
RBWI) BVI 100 100
CATS - Philippine Branch Philippines 100 100
Remec Broadband Wireless
Real Property (RBWRP) Philippines 100 100
Changes in Accounting Policies and Disclosures

The accounting policies and method of computation adopted in the preparation of the interim
condensed consolidated financial statements are consistent with those followed in the preparation
of the Groups annual consolidated financial statements for the year ended December 31, 2016,
except for the adoption of new standards effective as of January 1, 2017. The Group has not early
adopted any other standard, interpretation or amendment that has been issued but is not yet
effective.
The nature and the effect of these changes are disclosed below. Although these amendments apply
for the first time in 2017, they do not have a material impact on the interim condensed
consolidated financial statements of the Group.
Amendment to Philippine Financial Reporting Standards (PFRS) 12, Clarification of the

Scope of the Standard (Part of Annual Improvements to PFRSs 2014 - 2016 Cycle)
The amendments clarify that the disclosure requirements in PFRS 12, other than those relating
to summarized financial information, apply to an entitys interest in a subsidiary, a joint
*SGVFS025952*
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venture or an associate (or a portion of its interest in a joint venture or an associate) that is
classified (or included in a disposal group that is classified) as held for sale.
Amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative
The amendments to PAS 7 require an entity to provide disclosures that enable users of
financial statements to evaluate changes in liabilities arising from financing activities,
including both changes arising from cash flows and non-cash changes (such as foreign
exchange gains or losses). On initial application of the amendments, entities are not required
to provide comparative information for preceding periods. Early application of the
amendments is permitted.
Amendments to PAS 12, Income Taxes, Recognition of Deferred Tax Assets for Unrealized
Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources
of taxable profits against which it may make deductions on the reversal of that deductible
temporary difference. Furthermore, the amendments provide guidance on how an entity
should determine future taxable profits and explain the circumstances in which taxable profit
may include the recovery of some assets for more than their carrying amount.
Entities are required to apply the amendments retrospectively. However, on initial application
of the amendments, the change in the opening equity of the earliest comparative period may
be recognized in opening retained earnings (or in another component of equity, as
appropriate), without allocating the change between opening retained earnings and other
components of equity. Entities applying this relief must disclose that fact. Early application
of the amendments is permitted.
3. Cash
December 31,
June 30, 2017 2016
Cash on hand $249 $250
Cash in banks 20,112,652 24,511,243
$20,112,901 $24,511,493
Cash in banks earn interest at prevailing bank deposit rates.
Interest income earned from cash in banks amounted to $44,522 and $53,914 for the six months
ended June 30, 2017 and 2016, respectively.
4. Trade and Other Receivables

December 31,
June 30, 2017 2016
Trade receivables $30,635,572 $22,688,485
Note receivable 5,000,000
Others 528,123 483,938
$36,163,695 $23,172,423
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Trade receivables are noninterest-bearing and are generally on 30-120 days terms.
On April 1, 2017, CATS - Philippine Branch agreed to accept an interest-bearing promissory note
payable in one year amounting to $5,000,000, subject to 15% interest, from a customer as payment
for past due receivables accumulating to that same amount (see Note 28). Interest income earned
from the note receivable amounted to $187,500 for the six months ended June 30, 2017 (presented
under Net Sales).
Others include nontrade receivable from suppliers which are expected to be collected within one
year.
5. Inventories
December 31,
June 30, 2017 2016
At cost:
Raw materials $11,612,827 $13,692,165
Work in process 595,601 408,986
Finished goods 268,489 178,958
Spare parts and others 682,631 643,244
13,159,548 14,923,353
At net realizable value (NRV):
Supplies and others 581,649 358,540
Total inventories at lower of cost and NRV $13,741,197 $15,281,893
Certain inventories have been provided with allowance to reflect valuation for non-movement and
obsolescence.
The allowance for inventory obsolescence of supplies and other inventories as of June 30, 2017 and
December 31, 2016 amounted to $96,884.
6. Financial Asset at FVPL
Financial asset at FVPL as of June 30, 2017 and December 31, 2016 represent the outstanding
Rizal Commercial Banking Corporation (RCBC) USD Senior Unsecured Fixed Rate Notes (senior
note), which earns 4.25 % fixed rate per annum, payable semi-annually commencing July 21,
2015. The senior note is listed and actively traded in Singapore Exchange Securities Trading
Limited. The investments fair value has been determined directly by reference to published
prices quoted in an active market. Interest income recognized on these notes amounted to nil and
$172,597 for the six months ended June 30, 2017 and 2016, respectively.
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7. Other Current Assets
June 30, 2017 December 31, 2016

Rental deposit (Note 15) $1,131,399 $1,131,399
Advances to suppliers 813,926 953,821
Prepaid expenses and others 30,521 112,940
$2,354,245 $2,618,370
Advances to suppliers pertain mainly to down payments for production materials and services that
are still to be delivered.
8. HTM Investments
As of June 30, 2017 and December 31, 2016, the Groups HTM investments pertain to government
bonds which were purchased by the Philippine Branch of CATS in compliance with the
requirement of the Corporation Code of the Philippines.
9. Property, Plant and Equipment and Noncurrent Assets Held for Sale
Property, plant and equipment

During the six months ended June 30, 2017 and 2016, the Group acquired assets with a cost of
$2,221,029 and $4,256,242, respectively.

On December 9, 2014, the Parent Companys BOD approved the plan to sell and dispose certain
assets such as land, building and other improvements, and building plant and machinery of CATS
and RBWRP to any interested buyers as these are excess assets from the acquisition and are no
longer needed in CATS - Philippine Branchs operations. An independent valuation was obtained
to determine the fair values of property, plant and equipment which were based on recent
transactions for similar assets within the same industry. Property, plant and equipment with
carrying value of $11,408,611 were classified as noncurrent assets held for sale in the consolidated
balance sheets effective December 31, 2014. The Parent Companys management is committed to
selling the assets which are available for immediate sale and is active in looking for interested
buyers. During the one-year period, circumstances arose that were previously considered unlikely
and, as a result, the noncurrent assets held for sale were not sold by the end of the one-year period.
Management took necessary actions to respond to the change in circumstances and ensured that
the noncurrent assets are being actively marketed at a price that is reasonable, given the change in
circumstances.
10. AFS Financial Asset
The Groups AFS financial asset pertains to the unquoted investment in CloudMondo, Ltd. which
is acquired at a cost of $1,667,000 in 2015.
*SGVFS025952*
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11. Other Noncurrent Assets
December 31,
June 30, 2017 2016
Receivables from stock brokers $9,196,157 $
Advances to suppliers 1,458,061 1,066,014
Product development costs 854,196 922,220
Others 6,508 39,177
$11,654,695 $2,170,859
Receivables from stock brokers represent funds intended to be used in acquiring quoted equity
instruments on the Groups account and are classified as noncurrent assets as of June 30, 2017 as
the Group intends to classify the quoted equity investments, once these receivables are settled, as
AFS financial assets. As of September 25, 2017, these receivables are not yet settled.
Advances to suppliers pertain to down payments for the acquisition of software and building
expansion.
Product development costs pertain to the capitalized cost of developing certain packages or products
for specific customers. The development costs met the requirements of PAS 38, Intangible Assets,
for capitalization.
Miscellaneous deposits pertain to refundable deposits with MERALCO for the installation of
CECs electrical meters and bill deposit equivalent to one month energy consumption.
As of June 30, 2017 and December 31, 2016, CEC has software with a total cost of $39,278 which
are fully amortized but are still used in operations.
12. Trade and Other Payables
December 31,
June 30, 2017 2016
Trade $8,343,890 $13,192,707
Accruals:
Payroll 817,549 404,116
Utilities 358,054 442,112
Interest 83,285 172,419
Others 428,611 337,454
Advances from customers 2,580,166 2,833,791
Provision for warranty 1,724,262 1,419,257
Others 165,034 333,737
$14,500,851 $19,135,593
Trade payables are noninterest-bearing and are generally on 60-90 days terms.
Accruals comprise mainly of accruals for electricity, water, communication, security, shuttle
services and professional services.
*SGVFS025952*
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Advances from customers pertain mainly to down payments for sales orders.
Provision for warranty pertains to the Groups estimate of the cost to repair or replace defective
products in accordance with agreed specifications.
Other payables pertain to statutory liabilities and are generally payable within 12 months from the
balance sheet date.
13. Short-term Loans
The Group has the following loan facilities:
June 30, 2017 December 31, 2016

Security Bank Corporation (SBC) (a) $10,000,000 $10,000,000
Bank of the Philippine Island (BPI) (b) 2,268,088 5,435,088
RCBC (c) 14,752,857 16,190,857
$27,020,945 $31,625,945
a. Revolving loan facilities with the SBC which have payment terms ranging from 90 to 180
days. The facility is unsecured and charged interest of 1.95% to 2.10% per annum for the six
months ended June 30, 2017 and year ended December 31, 2016.
b. Revolving loan facilities with the BPI which have payment terms of 180 days. The facility is
unsecured and charged interest of 1.80% per annum for the six months ended June 30, 2017
and year ended December 31, 2016.
c. Revolving loan facilities with the RCBC which have payment terms ranging from 60 to 167
days. The facility is unsecured and charged interest of 2.25% per annum for the six months
ended June 30, 2017 and year ended December 31, 2016.
Interest expense incurred from these short-term loan facilities amounted to $308,868 and $204,323
for the six months ended June 30, 2017 and 2016, respectively.
14. Long-term Debt
As of June 30, 2017 and December 31, 2016, the details of long-term debt are as follow:
December 31,
June 30, 2017 2016
Principal $40,250,000 $44,250,000
Less deferred financing costs 333,852 390,029
39,916,148 43,859,971
Less current portion - net of deferred financing
costs 4,889,882 6,882,126
$35,026,266 $36,977,845
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-8-
CHPC
On July 25, 2012, the Parent Company entered into a $10.0 million Notes Facility Agreement
(NFA) with Metropolitan Bank & Trust Company (Initial Noteholder), Metropolitan Bank & Trust
Company - Trust Banking Group (Facility and Paying Agent) and First Metro Investment
Corporation (Arranger). The NFA provided for the issuance of 5-year fixed rate corporate note
which bears interest of 3.6% per annum payable quarterly. On July 27, 2012 (Issue Date), the
Parent Company drew $10.0 million from the facility. The net proceeds from the issuance of the
Notes shall be used to finance the Groups strategic acquisitions and for general corporate purposes.
Under the NFA, the Parent Company shall pay 30% of the loan outstanding on issue date in
12 equal consecutive quarterly installments in the amount equivalent to 2.5% of loan outstanding
on issue date commencing on the end of the 5th quarter until end of the 16th quarter from the Issue
Date. The remaining 70% of the loan outstanding on issue date is payable in four (4) equal
consecutive quarterly installments in the amount equivalent to 17.5% of the loan outstanding on
issue date commencing on the 17th quarter from the issue date until the maturity date, provided
that each such date shall coincide with an interest payment date, and that the last installment shall
be in an amount sufficient to fully pay the loan.
and after the third anniversary of the issue date, by paying the amount that is equivalent to 102% of
the unpaid principal amount together with any and all accrued interest up to the date of prepayment.
The Parent Company assessed that the embedded derivative in the NFA is closely related to the host
contract, thus was not bifurcated from the host contract based on the provisions of PAS 39,
Financial Instruments: Recognition and Measurement.
current ratio shall not, at any time, be less than 1:1, provided however, this ratio shall not
apply after the fourth anniversary of the issue date.
consolidated balance sheet of the Parent Company.
On December 18, 2014, the Parent Company entered into another $10.0 million Notes Facility
Agreement with Metropolitan Bank & Trust Company (Initial Noteholder), Metropolitan Bank &
Trust Company - Trust Banking Group (Facility and Paying Agent) and First Metro Investment
Corporation (Arranger). The Notes Facility bears interest of 3.14% per annum payable quarterly.
The net proceeds of the issuance of the Notes shall be used to finance the Groups strategic
acquisitions and for general corporate purposes.
Under the NFA, the Parent Company shall pay 30% of the loan outstanding on issue date in 12
issue date commencing on the end of the 5th quarter until end of the 16th quarter from the Issue
date. The remaining 70% of the loan outstanding on issue date is payable in 4 equal consecutive
commencing on the 17th quarter from the issue date until the maturity date, provided that each
such date shall coincide with an interest payment date, and that the last installment shall be in an
amount sufficient to fully pay the loan.
*SGVFS025952*
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and after the third anniversary of the issue date, by paying the amount that is equivalent to 102%
of the unpaid principal amount together with any and all accrued interest up to the date of
redemption at the applicable rate. The Parent Company assessed that the embedded derivative in
the NFA is closely related to the host contract, thus was not bifurcated from the host contract
based on the provisions of PAS 39.
Under this agreement, the following financial ratios must be maintained:

On September 20, 2016, the Parent Company entered into a $30.0 million NFA with BPI (Initial
Noteholder), BPI Asset Management and Trust Group (Facility and Paying Agent) and BPI
Capital Corporation (Arranger). The NFA provided for the issuance of 5-year fixed rate corporate
note which bears interest of 4.0% per annum payable quarterly. The net proceeds from the
issuance of the Notes shall be used for capital expenditures, including production facilities and to
refinance existing debt obligation and for working capital requirement.
Under the NFA, the Parent Company shall pay the 30% of the loan outstanding on issue date in 12
issue date commencing on the end of the 5th quarter until the end of the 16th quarter from the issue
date. The remaining 70% of the loan outstanding on issue date in four (4) equal consecutive
commencing on the 17th quarter from the issue date until the maturity date, provided that each such
date shall coincide with an interest payment date, and that the last installment shall be in an amount
sufficient to fully pay the loan.
Parent Company may redeem in whole or in part, equivalent to an amount not less than $100,000,
the relevant outstanding notes on any interest payment date beginning on the third anniversary of the
issue date, by paying the amount that is equivalent to the higher of (i) 102% of the unpaid principal
amount together with any and all accrued interest up to the date of redemption at the applicable rate,
and (ii) 100% of the unpaid principal amount of the loans together with any and all accrued interest
up to date of redemption at the applicable rate and any related breakage costs (net of any breakage
gains). The Parent Company assessed that the embedded derivative in the NFA is closely related to
the host contract, thus was not bifurcated from the host contract based on the provisions of PAS 39.

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The Parent Company is in compliance with the debt covenants as of June 30, 2017 and
December 31, 2016.
Total interest expense (including amortization of deferred financing costs) recognized in the
interim condensed consolidated statements of comprehensive income amounted $743,680 and
$315,786 for the six months ended June 30, 2017 and 2016, respectively.
15. Related Party Disclosures
Related party relationship exists when the party has the ability to control, directly or indirectly
through one or more intermediaries, or exercise significant influence over the other party in
making financial and operating decisions. Such relationships also exist between and/or among
entities which are under common control with the reporting entity and its key management
personnel, directors or stockholders. In considering each possible related party relationship,
attention is directed to the substance of the relationships.
In the normal course of business, the Group has entered into transactions with affiliates. The
significant transactions consist of the following:
d. Rental of land with Cayon Holdings, Inc. (Cayon), an affiliate, where the building 2 of the
Group is situated.
The interim consolidated balance sheets and interim consolidated statements of comprehensive
income include the following significant account balances resulting from the above transactions
with related parties:
Six Months Ended June 30 June 30, December 31,
(Unaudited) 2017 2016
CLC Rental $6,095 $6,489 $453,065 $446,970 Due on demand; Unsecured
noninterest-
bearing; to be
settled in cash
Cayon Rental 5,539 5,885 78,721 73,182 Due on demand; Unsecured
noninterest-
bearing; to be
settled in cash
$11,634 $12,374 $531,786 $520,152
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Camerton Reimbursement $ $ $111,994 $111,994 Due on demand; Unsecured; no
of expenses noninterest - impairment
Collection of 4,401,827 4,401,827 bearing; to be
proceeds from settled in cash
sale of stocks
CHI Advances for 1,809,256 1,809,256 Due on demand; Unsecured; no
working capital noninterest - impairment
bearing; to be
settled in cash
Cayon Reimbursement 388,044 594,328 206,284 Due on demand; Unsecured; no
bearing; to be
settled in cash
Jerry Liu Reimbursement 1,100,000 857,446 11,409,041 10,309,041 Due on demand; Unsecured; no
bearing; to be
settled in cash
$5,889,871 $857,446 $18,326,446 $12,436,575
c. Rental deposit
CLC $ $ $1,131,399 $1,131,399 Due on demand; Unsecured; no
noninterest- impairment
bearing; to be
settled in cash
The above related parties, except Jerry Liu, are entities under common control of the ultimate
parent company. Jerry Liu is a stockholder and the chairman of the Parent Companys BOD.

The amount owed by an officer amounting to $7.7 million as of December 31, 2010 was
transferred in 2011 to CEL, the former ultimate parent of CEC and CEIC. CEL now owns 40%
interest in Camerton, the parent of CHPC.
The amounts owed by and to CHI as of December 31, 2010 represent advances for working capital
in the normal course of business when CEC and CEIC were then still subsidiaries of CHI.
For purposes of settling outstanding balances with the Group and as part of corporate restructuring
in preparation for the planned Initial Public Offering (IPO) of the Parent Company, on
March 17, 2011 amounting to $7.7 million and $0.8 million, respectively.
The Group, with the consent of the related parties, entered into assignment agreements whereby
the Parent Company absorbed the amount owed by CEIC to CHI totaling $3.6 million representing
unpaid advances of $2.3 million and dividends of $1.3 million as of March 17, 2011.
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Thereafter, on March 18, 2011, the Parent Company and CHI, in view of being creditors and
debtors to each other as a result of the assignment agreements above, entered into a set-off
agreement for the value of the Groups liability aggregating $6.8 million. The amount represents
the above mentioned total liability of $3.6 million and the balance outstanding from the Parent
Companys purchase of CEC and CEIC amounting to $3.2 million, as revalued from the effect of
foreign exchange rate.
The amount owed by CHI as of June 30, 2017 and December 31, 2016 pertains to the outstanding

Camerton is the majority shareholder of the Parent Company. Amounts owed by Camerton as of
June 30, 2017 pertain mainly to proceeds from sale of CHPCs shares collected on behalf of CEC
amounting to $4.40 million. Camerton remitted such proceeds to the Group in August 2017 to pay
for the Quintel Acquisition.
Amounts owed by Camerton as of December 31, 2016 pertain mainly to working capital advances
and advances for incorporation expenses of Camerton.

CLC is an entity under common control of the ultimate parent company. CEC had a lease
agreement on the land where its manufacturing plant (Building 1) is located with CLC for a period
of 50 years starting January 1, 1999. The lease was renewable for another 25 years at the option
of CEC. The lease agreement provided for an annual rental of $151,682, subject to periodic
adjustments upon mutual agreement of both parties.
On January 1, 2005, CEC terminated the lease agreement with CLC but has continued to occupy
the said land for no consideration with CLCs consent. With the termination of the lease
agreement, the Group has classified the rental deposit amounting to $1.1 million as current asset as
the deposit has become due and demandable anytime from CLC (see Note 7).
On January 1, 2011, CEC entered into an agreement with CLC to lease the land where CECs
Building 1 is located. The agreement calls for a P
=640,704 rent per annum for a period of 10 years
and renewable thereafter by mutual agreement of the parties subject to such new terms and
conditions as they may then be mutually agreed-upon. Total rent expense charged to operations
amounted to $6,096 and $6,489 for the six months ended June 30, 2017 and 2016, respectively.
CEC also entered into an agreement with Cayon starting January 1, 2011 to lease the land where
CECs Building 2 is located. The agreement calls for an annual rental of =
P582,144 for a period of
10 years and renewable thereafter. Total rent expense charged to operations amounted to $5,539
and $5,885 for the six months ended June 30, 2017 and 2016, respectively.
The compensation of key management personnel of the Group are as follows:

(Unaudited)
2017 2016
Salaries and wages $535,182 $884,720
Employee benefits 162,615 169,512
$697,797 $1,054,232
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16. Cost of Sales

(Unaudited)
2017 2016
Raw materials, spare parts, supplies and
other inventories used $24,097,332 $17,916,040
Utilities 3,985,720 1,746,596
(Note 18) 3,547,616 4,734,779
Depreciation and amortization 1,532,700 1,180,486
Inward freight and duties and others 784,759 534,558
Others 354,028 367,460
$34,302,155 $26,479,919
17. Operating Expenses

(Unaudited)
2017 2016
(Note 18) $1,173,347 $1,340,674
Transportation and travel 190,807 166,079
Commissions 182,592 65,974
Professional fees 182,507 45,276
Utilities 174,666 190,668
Taxes and licenses 136,826 59,521
Entertainment, amusement and
recreation 53,623 98,216
Depreciation 40,774 42,150
Office supplies 11,103 27,251
Others 102,250 85,257
$2,248,495 $2,121,066
Others mainly consist of receivables directly written off and other charges.
18. Salaries and Wages and Employees Benefits

(Unaudited)
2017 2016
Salaries and wages $3,921,408 $5,347,677
Other employees benefits 682,577 644,537
Retirement costs 116,978 83,239
$4,720,963 $6,075,453
Other employees benefits consist of allowances and mandatory contributions.
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19. Retirement Benefit Obligation
The Group has a funded, noncontributory defined benefit retirement plan based on the normal
retirement benefits equivalent to the minimum retirement benefit as provided by Republic Act
(R.A.) No. 7641, otherwise known as the Retirement Pay Law, covering all of its regular
employees. Retirement benefits costs are determined in accordance with an actuarial study and
are based on the employees years of service and monthly basic salary.
Under the existing regulatory framework, R.A. No. 7641 requires a provision for retirement pay to
qualified private sector employees in the absence of any retirement plan in the entity, provided,
however, that the employees retirement benefits under any collective bargaining and other
agreements shall not be less than those provided under the law. The law does not require
minimum funding of the plan.
20. Other Income - Net

(Unaudited)
2017 2016
Sale of scrap $41,735 $68,366
Foreign exchange losses - net (76,735) (13,170)
Others - net (170) 12,407
($35,170) $67,603
Other income pertains to the miscellaneous receipts from customers in prior periods.
21. Income Taxes
CEC
On March 24, 1998, the Philippine Economic Zone Authority (PEZA) approved CECs
registration as an ecozone export enterprise at the Laguna Technopark for the manufacture of
standard integrated circuits, discrete, hybrid and potential new packages.
Beginning October 30, 2002, the manufacture and export of integrated circuits, discrete and hybrid
transferred to PEZA from Board of Investments (where originally registered) and became subject
to the 5% gross income tax incentive, as defined under R.A. No. 7916, the law creating the PEZA.
CATS - Philippine Branch

CATS - Philippine Branch was registered with PEZA as an Ecozone Export Enterprise to engage
in the manufacture, fabrication and design of millimeterwave components and subsystems in a
special economic zone to be known as the Carmelray Industrial Park I - Special Economic Zone
(CIP I-SEZ) and Laguna Technopark in accordance with the project study, representations,
commitments and proposals set forth in its application forming integral parts, subject to the terms
and conditions provided in its registration.
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As a PEZA-registered activity, CATS - Philippine Branch is entitled to tax incentives equivalent

to 5% of the gross income earned on its registered activities after the income tax holiday (ITH) of
four years.
The provision for current income tax for the six months ended June 30, 2017 and 2016 pertains to
the special rate of 5% on taxable gross income of CEC and CATS - Philippine Branch.
22. Earnings Per Share (EPS)
The following table presents information necessary to calculate EPS on net income.

(Unaudited)
2017 2016
Net income attributable to common
shareholders of Parent Company* $4,406,384 $3,528,554
Weighted average number of common
shares outstanding 419,063,353 419,063,353
Basic and diluted EPS $0.011 $0.008
*Net of dividends declared on preferred shares
As of June 30, 2017 and 2016, the Parent Company has no potential dilutive common shares.
The weighted average number of common shares outstanding used in the calculation of EPS is
based on the outstanding shares of the Parent Company.
23. Operating Segments
operating segment as defined by PFRS 8, Operating Segments. More specifically:
There is no significant or obvious distinction among the products assembled by the Group.
The assembly process is likewise similar;
The Groups production facility and head office is located in the Philippines;
Although production of goods is divided into thirteen divisions, the commercial, technical,
operating, marketing and selling matters are made at the executive committee level and not at
the division levels. The role of the respective division managers is to ensure that production is
on track in meeting its volume forecasts, and that quality standards are consistently met.
Sales are reported internally per division, but profit or loss, assets and liabilities are reported on an
entity-wide basis. Information is measured using the same accounting policies and estimates as
the Groups consolidated financial statements.
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Sales from external customers per division as reported internally are as follows (amounts in
thousands):

(Unaudited)
2017 2016
Quintel $17,193 $4,570
Discrete 6,555 6,283
Multichip 5,060 4,464
Integrated Circuits (IC) 3,819 3,970
Quad-Flat No-Leads (QFN) 2,661 2,351
New Products 2,419 2,754
Outdoor Unit 1,655 4,301
Hermetics 992 760
Remec Manufacturing Services 878 926
Bridgewave 534 943
Indoor Radio Frequency Unit 295 980
Cougar 121 179
$42,182 $32,481
Below are customers contributing at least 10% of the Groups total sales for each period. Sales to
these customers are as follows (amounts in thousands):

(Unaudited)
2017 2016
Major Customer A $17,369 $4,570
Major Customer B 4,148 2,325
Major Customer C 3,918 5,615
The Groups customers are located in various countries, with the bulk of revenues contributed by
customers located in Europe and the USA. Following shows the revenue distribution of customers
by revenue contribution (amounts in thousands):

(Unaudited)
2017 2016
USA $25,173 $18,152
Europe 11,634 7,225
Asia 5,375 7,104
$42,182 $32,481
There are no sales made to entities under common control with the Group.
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24. Financial Risk Management Objectives and Policies
The Groups principal financial instruments comprise of cash and cash equivalents, short term
loans and long-term debt. The main purpose of these financial instruments is to support the
Groups operations. The Group has various other financial instruments such as trade and other
receivables, amounts owed by related parties, rental and security deposits and loans to employees
(presented as part of other current assets), HTM investments, miscellaneous deposits (presented
under other noncurrent assets), trade and other payables, and amounts owed to related parties,
which generally arise directly from its operations, as well as financial assets at FVPL and AFS
financial assets.
Risk Management Structure

The BOD is mainly responsible for the overall risk management approach and for the approval of
risk strategies and principles of the Group.
The main risks arising from the financial instruments of the Group are credit risk, liquidity risk
and foreign currency risk. The Groups management reviews and approves policies for managing
each of these risks and they are summarized below.
Credit risk
Credit risk is the risk that the Group will incur a loss because its customers or counterparties failed
to discharge their contractual obligations.
The Group trades only with recognized, creditworthy third parties. It is the Groups policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Groups
exposure to bad debts is not significant.
The table below shows the maximum exposure to credit risk of the Groups financial assets. The
maximum exposure is shown net of impairment losses, if any:
June 30, 2017 December 31, 2016

Cash* $20,112,652 $24,511,243
Rental deposit 1,131,399 1,131,399
Receivables from stock brokers 9,196,157
Total credit risk exposure $87,603,054 $63,854,321
*Excluding cash on hand as of June 30, 2017 and December 31, 2016 amounting to $249 and $250, respectively.
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The aging analyses per class of financial assets that are past due but not yet impaired are as
follows:
June 30, 2017 (Unaudited)

Impaired < 30 days 30-60 days 60-90 days > 90 days Assets Total
Cash* $20,112,652 $ $ $ $ $ $20,112,652
Trade and other
receivables 27,393,749 3,038,060 962,940 677,266 4,091,680 36,163,695
Amounts owed by
related parties 18,326,446 18,326,446
Rental deposit 1,131,399 1,131,399
Receivables from
stock brokers 9,196,157 9,196,157
Miscellaneous
deposits 133,548 133,548
$78,650,619 $3,038,060 $962,940 $677,266 $4,274,169 $ $87,603,054
December 31, 2016 (Audited)

Impaired < 30 days 30-60 days 60-90 days > 90 days Assets Total
Cash* $24,511,243 $ $ $ $ $ $24,511,243
Trade and other
receivables 17,226,175 2,031,535 601,105 3,286,553 27,055 23,172,423
Amounts owed by
related parties 12,436,575 12,436,575
Rental deposit 1,131,399 1,131,399
$57,727,686 $2,031,535 $601,105 $3,286,553 $207,442 $ $63,854,321
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The tables below summarize the credit quality per class of the Groups financial assets that are
neither past due nor impaired:

Cash* $20,112,652 $ $ $20,112,652
Rental deposit 1,131,399 1,131,399
Receivables from stock brokers 9,196,157 9,196,157
$73,881,673 $4,768,946 $ $78,650,619

Cash* $24,511,243 $ $ $24,511,243
Rental deposit 1,131,399 1,131,399
$57,696,040 $31,646 $ $57,727,686
High grade - These are receivables which have a high probability of collection (the counterparty
has the apparent ability to satisfy its obligation and the security on the receivables are readily
enforceable).
Medium grade - These are receivables where collections are probable due to the reputation and the
financial ability of the counterparty to pay and that have history of sliding beyond the credit terms
but pay within 60 days.
Low grade - These are receivables where the counterpartys capability of honoring its financial
obligation is doubtful.
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Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulties in raising funds to meet
commitments from financial instruments. Liquidity risk may result from a counterpartys failure
on repayment of a contractual obligation or inability to generate cash inflows as anticipated.
The Group maintains sufficient cash to finance its operations and major capital expenditures and
satisfy its maturing obligations. It may also from time to time seek other sources of funding,
which may include debt or equity financings, including dollar and peso-denominated loans from
Philippine banks, depending on its financing needs and market conditions.
The tables below summarize the maturity analysis of the Groups financial assets used for
liquidity management and financial liabilities based on contractual undiscounted payments:
Less than > 2 to 5
On demand 1 year 1 to 2 years years Total
Financial Assets
Cash $20,112,901 $ $ $ $20,112,901
$38,439,347 $36,163,695 $ $ $74,603,042
Trade payables $8,343,890 $ $ $ $8,343,890
Short-term loans 27,020,945 27,020,945
Long-term debts** 6,497,775 8,317,990 29,986,693 44,802,458
$8,875,676 $35,140,219 $8,317,990 $29,986,693 $82,320,578

Less than
Financial Assets
Cash $24,511,493 $ $ $ $24,511,493
$54,691,527 $5,428,964 $ $ $60,120,491
Trade payables $13,192,707 $ $ $ $13,192,707
Short-term loans 31,625,945 31,625,945
Long-term debts** 8,504,914 16,579,760 24,450,000 49,534,674
$13,520,043 $41,459,237 $16,579,760 $24,450,000 $96,009,040
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Foreign currency risk

The Group uses the US dollar as its functional currency and is therefore exposed to foreign
exchange movements, primarily in Philippine Peso currency. The Group follows a policy to
manage its currency risk by closely monitoring its cash flow position and by providing forecast on
all other exposures in non-US dollar currencies.
Capital Management
The primary objective of the Groups capital management is to ensure that it maintains a strong
credit rating and healthy capital ratios in order to support its business and maximize shareholder
value.
The Group manages its capital structure, which pertains to its equity as shown in the balance sheet,
and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made to the objectives, policies or processes in
2017 and 2016.
The Company considers the following as capital:
June 30, 2017 December 31, 2016

Common stock $9,594,321 $9,594,321
Equity reserve 1,452,863 4,138,375
$75,083,243 $74,775,733
As of June 30, 2017, the Group is subject to externally imposed capital requirements. As of
June 30, 2017, the Group was able to meet its capital requirements and management objectives.
25. Fair Value Measurement
As of June 30, 2017 and December 31, 2016, the carrying values of the Groups financial assets
and liabilities approximate their respective fair values.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction in the principal (or most advantageous) market at the measurement date under
current market conditions (i.e. an exit price) regardless of whether that price is directly observable
or estimated using another valuation technique.
Cash in banks, trade and other receivables, loans to employees, trade and other payables,
short-term loans, amounts owed by and owed to related parties and deposits
The carrying amounts approximate fair value since these are mostly short-term in nature or a due
and demandable.
Financial assets at FVPL - RCBC Senior Notes

The investment in RCBC Senior Notes classified as financial asset at FVPL is stated at its fair
values based on the quoted prices in an active market (Level 1).
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HTM Investments
The fair value of HTM investments that are actively traded in organized financial markets is
determined by reference to quoted market bid prices, at the close of business on the reporting date
or last trading day as applicable (Level 1).
Miscellaneous deposits
The miscellaneous deposits are carried at cost since the timing and related amounts of future cash
flows cannot be reasonably and reliably estimated for purposes of establishing its fair value using
an alternative valuation technique.
AFS financial assets

The investment in CloudMondo, Ltd. continues to be carried at cost since the shares do not have a
quoted price in an active market and its fair value cannot be reliably measured. The subject
company is a privately owned technology start-up, and the Group does not have access to relevant
information that will enable management to estimate the fair value (e.g. through discounted cash
flow analysis). The Group does not intend to dispose of this asset within twelve months after the
reporting date.
Long-term debt
The fair value of long-term debt is based on the discounted value of future cash flows using the
applicable rates for similar types of loans. Discounts rates used range from 3.63% to 3.70% in
2017 and 2016.
Fair Value Hierarchy

The Group held the following financial assets and liabilities measured at fair value or at cost, but
for which fair values are disclosed and their corresponding level in fair value hierarchy:

fair value
measured at amortized cost but
for which fair values are disclosed
Long-term debt 39,916,148 39,916,148

fair value
measured at amortized cost but for
which fair values are disclosed
Long-term debt 43,859,971 43,859,971
As at June 30, 2017 and December 31, 2016, there were no transfers between Level 1 and 2 fair
value measurements.
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26. Equity
a. Common Shares
The depreciation of the capital stock of the Parent Company follows:
June 30,
2017 December 31, 2016
Number of shares
Authorized - common shares (P
=1.00 par value) 520,000,000 520,000,000
Issued 419,063,353 419,063,353
Amount
Issued - 419,063,353 shares in 2017 and 2016 $9,594,321 $9,594,321
On November 18, 2011, the Parent Company listed with the PSE its common stock, wherein it
offered 42,163,000 shares to the public at issue price of =
P7 per share. The total proceeds with
issuance of new shares amounted to P =295.1 million ($6.8 million). The Parent Company
incurred transaction costs incidental to the IPO amounting to P=47.3 million ($1.1 million),
which is charged against Additional paid-in capital in 2011. As of December 31, 2011, the
Parent Company has 162,163,000 issued common shares.
On May 25, 2012, the BOD declared a twenty percent (20%) stock dividend to stockholders.
On the same date, the stockholders approved and ratified to stock dividend payable to
stockholders as of record as of June 8, 2012, distributed on June 29, 2012.
On September 14, 2012, the BOD declared a twenty percent (20%) stock dividend to
stockholders of record as of December 21, 2012, distributed on January 10, 2013. On
December 7, 2012, the stockholders approved the twenty percent (20%) stock dividend.
On January 16, 2013, the BOD declared a twenty percent (20%) stock dividend to
stockholders. On the same date, the stockholders approved the stock dividend payable to
stockholders of record as of March 15, 2013, distributed on April 5, 2013.
On January 29, 2014, the BOD also declared a ten percent (10%) stock dividend. During the
special stockholders meeting dated July 11, 2014, the shareholders approved and ratified the
declaration of 10% stock dividend payable to stockholders of record as of July 25, 2014 and
payment date of August 20, 2014.
On March 24, 2015, the BOD also declared a ten percent (10%) stock dividend. On May 12,
2015, the shareholders approved and ratified the declaration of 10% stock dividend payable to
stockholders of record as of May 26, 2015 and payment date of June 18, 2015.
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On March 24, 2015, the Parent Companys BOD, by majority vote, and shareholders
representing two-thirds of the outstanding capital stock thereof approved the amendment of
the articles of incorporation to increase the Parent Companys authorized capital stock by
P
=160,000,000 or from P =400,000,000 divided into 400,000,000 common shares with a par
value of =P1.00 per share, to =
P560,000,000 divided into 520,000,000 common shares with a par
value of =P1.00 per share and 400,000,000 preferred shares with a par value of P
=0.10 per share.
The BOD also authorized the Parent Company to offer 120,000,000 common shares for sale or
subscription through a follow-on offering (FOO).
On July 22, 2015, the Philippine SEC approved the Companys application to increase its
authorized capital stock.
On November 4, 2015, the Parent Companys FOO was completed. The Parent Company
issued 80,000,000 new common shares at issue price of = P20 per share for a total amount of
$34.2 million. The Parent Company incurred transactions costs incidental to FOO amounting
to $1.2 million which is charged against Additional paid-in capital in the 2015 consolidated
balance sheet.
On October 24, 2016, the Parent Companys BOD, by majority vote, approved the amendment
of the articles of incorporation to increase the Parent Companys authorized capital stock by
P
=1,440,000,000 or from = P560,000,000 divided into 520,000,000 common shares with a par
value of =P1.00 per share and 400,000,000 preferred shares with a par value of P =0.10 per share
(Preferred A shares), to =P2,000,000,000 divided into 1,400,000,000 common shares with a
par value of =P1.00 per share and 600,000,000 preferred shares classified into P =140,000,000
Preferred A with a par value of = P1.00 per share, and =
P460,000,000 worth of new preferred
shares, the par values, series, classes, preferences, convertibility voting rights and other
features of which shall be determined by the Parent Companys BOD.
On the same date, the Parent Companys BOD, by majority vote, approved the declaration of
ten percent (10%) stock dividend for each of the 419,063,353 issued and fully paid common
shares, and 400,000,000 issued and fully paid preferred shares of the Corporation. To date the
shareholders have not approved and ratified the said declaration.
On May 26, 2017, the Parent Companys shareholders representing at least two-thirds of the
outstanding capital stock thereof approved the aforementioned amendment of the articles of
incorporation as endorsed by the BOD. The shareholders also approved a resolution to
delegate to the BOD the power and authority to: (i) determine the manner (either in one or
more tranches) by which the proposed increase in the authorized capital stock of the Parent
Company will be implemented; and (ii) the manner by which the increase in the authorized
capital stock will be subscribed and paid for, such as, but not limited to, a private placement
transaction or public offering. The BOD was also granted authority to issue in one or more
series the new preferred shares and to determine the preferences, convertibility, voting rights,
features and other terms and conditions for each such series of the new preferred shares.

On December 23, 2016, CEC acquired a total of 102,018,659 common shares of the Parent
Company for P=2.3 billion ($49.6 million). The shares purchased were recorded at cost and
deducted from equity in the consolidated balance sheet.
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For the six months ended June 30, 2017, CEC sold 73,941,837 common shares for
P
=1.67 billion ($33.34 million). The difference between the proceeds from the sale of shares
held by CEC and the cost of these shares amounting to $2.69 million was offset against
Equity reserve as of June 30, 2017.
As of June 30, 2017 and December 31, 2016, the Parent Company has a total number of 25
stockholders.
b. Preferred Shares
June 30, 2017 December 31, 2016

Number of shares
Authorized (P
=0.10 par value) 400,000,000 400,000,000
Subscribed 400,000,000 400,000,000
Amount
Subscribed - 400,000,000 shares (net of
subscriptions receivable amounting to $663,717) $221,239 $221,239
In 2015, the 400,000,000 preferred shares at par value of P

=0.10 were subscribed by Camerton,
a principal shareholder of the Parent Company. As of June 30, 2017 and December 31, 2016,
unpaid subscriptions amounted to $663,717.
The features of the preferred shares are (i) full voting rights, one vote for each share;
(ii) preferred non-cumulative cash dividends at the rate of 1% of their par value per year, with
no participation in further cash dividends which may be declared and paid to the common
shares or any other class or series of shares; and (iii) the same stock dividends which may be
declared and paid to the common shares or any other class or series of shares.
c. Retained Earnings
shareholders of record of February 12, 2016. The cash dividend shall be paid in Philippine
Peso at the BSP exchange rate one day prior to payment date.
On June 9, 2016, the Parent Companys BOD approved the declaration of cash dividends of
$0.00362 per share for each of 419,063,353 fully paid and issued common shares and
an aggregate sum of $1,520,000, for payment and distribution on July 7, 2016 to shareholders
of record of June 23, 2016. The cash dividend shall be paid in Philippine Peso at the BSP
exchange rate one day prior to payment date.
shareholders of record of February 6, 2017. The cash dividend shall be paid in Philippine Peso
at the BSP exchange rate one day prior to payment date.
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27. Commitments
The following are the significant commitments and contingencies involving the Group:
Outsourcing Manufacturing Agreement (OMA)

On July 30, 2014, CATS entered into an OMA (herein referred to as the Agreement) with
REMEC in conjunction with the Share Purchase Agreement (SPA) entered into between CEIC and
REMEC. CATS will perform manufacturing services to REMEC in accordance with the
production files and specifications as provided in the Agreement. The contract term is for ten (10)
years with automatic renewal of additional one (1) year period. All payments to CATS shall be
made in US Dollars and shall be paid sixty (60) days after the receipt of the invoice.
Master Service Agreement (MSA)

CATS entered into an MSA with REMEC on July 30, 2014 where CATS will provide to REMEC
the services of selected employees and consultants (or Business Services) of CATS. CATS
shall be responsible for and shall timely pay any and all compensation and benefits payable to the
employees of and consultants of CATS who perform Business Services. MSA has a ten (10) year
term with automatic renewal of additional one year period.
Manufacturing Services Agreement (MSA)

On October 20, 2015, CATS, the Seller, entered into a manufacturing service agreement with a
customer, whereas the customer desires to purchase the products defined in the agreement
specifically for its latest range of mm-Wave converter products. The term of the agreement is 3
years from the effective date subject to automatic renewal for one year every year thereafter.
On November 4, 2015, CATS and Quintel Technology Ltd. entered into a master supply
agreement that covers the manufacturing of specific antennas and other Quintel products set forth
in individual purchase order agreements. The initial term for this agreement shall be for a period
of 3 years. CATS shall also provide support services for the following: New Product Introduction,
Production experiments, and Mass volume production. All payments to CATS shall be placed
within 90 days following the end of the month after receipt of invoice.
On April 20, 2016, the contract was amended to extend the contract term, from a period of 3 years
to a period of 5 years from the commencement date of the original agreement.
28. Events After the Reporting Period
Cirtek Corporation was incorporated on July 7, 2017 under the laws of Delaware, USA, to engage
in lawful act or activity for which corporations may be organized under the General Corporation
Law of the State of Delaware. Cirtek Corporation is a wholly owned subsidiary of CEIC.
In the same period, Cirtek Cayman Ltd. (CCL) was incorporated in the Cayman Islands. CCL is a
wholly owned subsidiary of Cirtek Corporation. CCL will be merged with and into Quintel
Cayman Ltd. (Quintel) in accordance with the Agreement and Plan of Merger.
On July 28, 2017, the Parent Companys BOD approved the acquisition of Quintel and its
subsidiaries for $77 million. Quintel is a leading innovator of spectrum and space-efficient base
station antennas for wireless networks. Upon closing, the transaction is expected to immediately
give the Group a significant presence in the large and rapidly growing base station antenna market.
*SGVFS025952*
- 27 -
In July 2017, CHPC entered into a bridge financing arrangement with several local banks to raise
$55 million for the acquisition. CHPC issued one-year promissory notes carrying interest of 4%
per annum that it expects will eventually be converted into long-term corporate notes.
The Groups notes receivable from Quintel amounting to $5,000,000 as of June 30, 2017 was
subsequently settled in accordance with the Plan of Merger.
On September 8, 2017, the Parent Companys BOD, by majority vote, approved the amendment in
the Parent Companys articles of incorporation to increase the Companys authorized capital stock
by Three Hundred Million Pesos (P =300,000,000.00), or (a) from Five Hundred Sixty Million
Pesos (P
=560,000,000.00), consisting of: (i) Five Hundred Twenty Million Pesos
(P
=520,000,000.00) worth of Common Shares divided into five hundred twenty million
(520,000,000) Common Shares with a par value of One Peso (P =1.00) per share, and (ii) Forty
Million Pesos (P=40,000,000.00) worth of Preferred Shares divided into four hundred million
(400,000,000) Preferred A Shares with a par value of Ten Centavos (P0.10) per share, (b) to Eight
Hundred Sixty Million Pesos (P =860,000,000.00), consisting of: (i) Five Hundred Twenty Million
Pesos (P=520,000,000.00) worth of Common Shares divided into five hundred twenty million
(520,000,000) Common Shares with a par value of One Peso (P =1.00) per share, (ii) Seventy
Million Pesos (P70,000,000.00) worth of Preferred A Shares divided into seven hundred million
(700,000,000) Preferred A Shares with a par value of Ten Centavos (P =0.10) per share, and (iii)
Two Hundred Seventy Million Pesos (P =270,000,000.00) worth of Preferred B Shares with a par
value of One Peso (P=1.00) per share, the preferences, convertibility, voting rights and other
features of which shall be determined by the BOD.
On September 15, 2017, the Parent Companys BOD approved the declaration of cash dividends
of $0.004629 per share for each of 419,063,353 fully paid and issued common shares amounting
to an aggregate sum of $1,940,000, for payment and distribution on October 6, 2017 to
shareholders of record of September 29, 2017. The cash dividend shall be paid in Philippine Peso
at the BSP exchange rate one day prior to payment date.
29. Other Matters
CEC is a defendant in certain legal cases which are currently pending before the courts and other
government bodies. In the opinion of management and CECs legal counsel, any adverse decision
on these cases would not materially affect the consolidated financial position as of June 30, 2017
and December 31, 2016 and results of operations for the six months ended June 30, 2017 and
2016.
Seasonality of operations
The Group does not have any seasonal aspects that had a material effect on the financial condition
or results of operations.
*SGVFS025952*
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY SCHEDULES
AS OF AND FOR THE SECOND QUARTER ENDED JUNE 30, 2017
Schedule Contents
Index to the Consolidated Financial Statements
I Map Showing the Relationships Between and Among the Companies in the
Group, its Ultimate Parent Company and Co-subsidiaries
II Schedule of All Effective Standards and Interpretations Under Philippine
Financial Reporting Standards
III Reconciliation of Retained Earnings Available for Dividend Declaration
IV Financial Soundness Indicators
Supplementary Schedules
A Financial Assets
Amounts Receivable from Directors, Officers, Employees, Related

B
Parties, and Principal Stockholders (Other than Related parties)
Amounts Receivable from Related Parties and Amounts Payable to Related

C Parties which are Eliminated during the Consolidation of Financial
Statements
D Intangible Assets - Other Assets
E Long-Term Debt
F Indebtedness to Related Parties
G Guarantees of Securities of Other Issuers
H Capital Stock
*SGVFS025952*
MAP SHOWING THE RELATIONSHIPS BETWEEN AND AMONG THE
COMPANIES IN THE GROUP, ITS ULTIMATE PARENT COMPANY AND
CO-SUBSIDIARIES
JUNE 30, 2017
Carmetheus Holdings, Inc.
60.0%
Camerton Inc.
49.96% 50.04%
CHPC Public
100% 100%
CEC CEIC
100%
CATS
CATS- Phil. Branch
100%
RBWRP
*SGVFS025952*
SCHEDULE OF EFFECTIVE STANDARDS AND INTERPRETATIONS
JUNE 30, 2017

Not Not
Adopted Applicable
Effective as at June 30, 2017
Framework for the Preparation and Presentation of
Conceptual Framework Phase A: Objectives and qualitative
characteristics
PFRS Practice Statement Management Commentary
Philippine Financial Reporting Standards
PFRS 1 First-time Adoption of Philippine Financial
(Revised) Reporting Standards
Amendments to PFRS 1 and PAS 27: Cost of an
Investment in a Subsidiary, Jointly Controlled
Entity or Associate
Amendments to PFRS 1: Additional
Exemptions for First-time Adopters
Amendment to PFRS 1: Limited Exemption
from Comparative PFRS 7 Disclosures for
First-time Adopters
Amendments to PFRS 1: Severe Hyperinflation
and Removal of Fixed Date for First-time
Adopters
Amendments to PFRS 1: Government Loans
PFRS 2 Share-based Payment
Amendments to PFRS 2: Vesting Conditions
and Cancellations
Amendments to PFRS 2: Group Cash-settled
Share-based Payment Transactions
Amendments to PFRS 2: Definition of Vesting
Condition
Amendments to PFRS 2: Classification and
Measurement of Share-based Payment
Transactions
PFRS 3 Business Combinations
(Revised)
Amendments to PFRS 3 : Accounting for
Contingent Consideration in a Business
Combination
Amendments to PFRS 3 : Scope Exceptions for
Joint Arrangements
*SGVFS025952*
2

Not Not
Adopted Applicable
PFRS 4 Insurance Contracts
Guarantee Contracts
Amendments to PFRS 4: Applying PFRS 9,
Financial Instruments, with PFRS 4
PFRS 5 Non-current Assets Held for Sale and
Discontinued Operations
Changes in Method of Disposal
PFRS 6 Exploration for and Evaluation of Mineral
Resources
PFRS 7 Financial Instruments Disclosures
Amendments to PFRS 7: Transition
Date and Transition
Amendments to PFRS 7: Improving
Disclosures about Financial Instruments
Transfers of Financial Assets
Offsetting Financial Assets and Financial
Liabilities
Amendments to PFRS 7: Mandatory Effective
Date of PFRS 9 and Transition Disclosures
Amendments to PFRS 7: Applicability of the
Amendments to PFRS 7 to Condensed Interim
Amendments to PFRS 7: Servicing Contracts
PFRS 8 Operating Segments
Amendments to PFRS 8 : Aggregation of
Operating Segments and Reconciliation of the
Total of the Reportable Segments Assets to the
Entitys Asset
PFRS 9 Financial Instruments
*SGVFS025952*
3

Not Not
Adopted Applicable
PFRS 10 Consolidated Financial Statements
Amendments to PFRS 10 and PAS 28: Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture
PFRS 11 Joint Arrangements
Amendments to PFRS 11: Accounting for
Acquisitions of Interests in Joint Operations
PFRS 12 Disclosure of Interests in Other Entities
PAS 27: Investment Entities
Clarification of the Scope of the Standard
PFRS 13 Fair Value Measurement
Amendments to PFRS 13 : Portfolio Exception
PFRS 14 Regulatory Deferral Accounts
PFRS 15 Revenue from Contracts with Customers
PFRS 16 Leases
Philippine Accounting Standards
PAS 1 Presentation of Financial Statements
(Revised)
Amendment to PAS 1: Capital Disclosures
on Liquidation
Amendments to PAS 1: Presentation of Items of

Amendments to PAS 1, Disclosure Initiative
PAS 2 Inventories
*SGVFS025952*
4

Not Not
Adopted Applicable
PAS 7 Statement of Cash Flows
Amendments to PAS 7: Disclosure Initiative
PAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors
PAS 10 Events after the Reporting Period
PAS 11 Construction Contracts
PAS 12 Income Taxes
Amendment to PAS 12 : Deferred Tax:
Recovery of Underlying Assets
Amendments to PAS 12: Recognition of
Deferred Tax Assets for Unrealized Losses
PAS 16 Property, Plant and Equipment
Amendments to PAS 16 and 38: Proportionate
Restatement of Accumulated Amortization
Amendments to PAS 16 and PAS 41: Bearer
Plants
PAS 17 Leases
PAS 18 Revenue
PAS 19 Employee Benefits
(Revised)
Amendments to PAS 19: Actuarial Gains and
Losses, Group Plans and Disclosures
Regional Market Issue Regarding Discount
Rate
Amendments to PAS 19: Defined Benefit Plans:
Employee Contributions
PAS 20 Accounting for Government Grants and
Disclosure of Government Assistance
PAS 21 The Effects of Changes in Foreign Exchange
Rates
Amendment: Net Investment in a Foreign
Operation
*SGVFS025952*
5

Not Not
Adopted Applicable
PAS 23 Borrowing Costs
(Revised)
PAS 24 Related Party Disclosures
(Revised)
Key Management Personnel
PAS 26 Accounting and Reporting by Retirement
Benefit Plans
PAS 27 Separate Financial Statements
(Amended)
Amendment: Equity Method in Separate
PAS 28 Investments in Associates and Joint Ventures
(Amended)
28, Investment Entities: Applying the
Amendments to PAS 28: Measuring an
Associate or Joint Venture at Fair Value
PAS 29 Financial Reporting in Hyperinflationary
Economies
PAS 32 Financial Instruments: Disclosure and
Presentation
on Liquidation
Amendment to PAS 32: Classification of Rights
Issues
Amendments to PAS 32: Offsetting Financial
Assets and Financial Liabilities
PAS 33 Earnings per Share
PAS 34 Interim Financial Reporting
Disclosure of Information Elsewhere in the
Interim Financial Report
PAS 36 Impairment of Assets
Amendment to PAS 36: Impairment of
Assets - Recoverable Amount Disclosures for
Non-Financial Assets
*SGVFS025952*
6

Not Not
Adopted Applicable
PAS 37 Provisions, Contingent Liabilities and
Contingent Assets
PAS 38 Intangible Assets
PAS 39 Financial Instruments: Recognition and
Measurement
Amendments to PAS 39: Transition and Initial
Recognition of Financial Assets and Financial
Liabilities
Amendments to PAS 39: Cash Flow Hedge
Accounting of Forecast Intragroup Transactions
Amendments to PAS 39: The Fair Value Option
Guarantee Contracts
Date and Transition
IFRIC-9 and PAS 39: Embedded Derivatives
Amendment to PAS 39: Eligible Hedged Items
Amendment to PAS 39: Novation of
Derivatives and Continuation of Hedge
Accounting
PAS 40 Investment Property
Interrelationship between PFRS 3 and PAS 40
Amendments to PAS 40: Transfers of
Investment Property
PAS 41 Agriculture
Philippine Interpretations
IFRIC 1 Changes in Existing Decommissioning,
Restoration and Similar Liabilities
IFRIC 2 Members Share in Co-operative Entities and
Similar Instruments
*SGVFS025952*
7

Not Not
Adopted Applicable
IFRIC 4 Determining Whether an Arrangement Contains
a Lease
IFRIC 5 Rights to Interests arising from
Decommissioning, Restoration and
Environmental Rehabilitation Funds
IFRIC 6 Liabilities arising from Participating in a
Specific Market - Waste Electrical and
Electronic Equipment
IFRIC 7 Applying the Restatement Approach under
PAS 29 Financial Reporting in
Hyperinflationary Economies
IFRIC 8 Scope of PFRS 2
IFRIC 9 Reassessment of Embedded Derivatives
IFRIC - 9 and PAS 39: Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11 PFRS 2- Group and Treasury Share
Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their
Interaction
Amendments to Philippine Interpretations
IFRIC- 14, Prepayments of a Minimum
Funding Requirement
IFRIC 15 Agreements for the Construction of Real Estate
IFRIC 16 Hedges of a Net Investment in a Foreign
Operation
IFRIC 17 Distributions of Non-cash Assets to Owners
IFRIC 18 Transfers of Assets from Customers
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments
IFRIC 20 Stripping Costs in the Production Phase of a
Surface Mine
IFRIC 21 Levies
*SGVFS025952*
8

Not Not
Adopted Applicable
IFRIC 22 Foreign Currency Transactions and Advance
Consideration
SIC-7 Introduction of the Euro
SIC-10 Government Assistance - No Specific Relation
to Operating Activities
SIC-15 Operating Leases - Incentives
SIC-25 Income Taxes - Changes in the Tax Status of an
Entity or its Shareholders
SIC-27 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease
SIC-29 Service Concession Arrangements: Disclosures
SIC-31 Revenue - Barter Transactions Involving
Advertising Services
SIC-32 Intangible Assets - Web Site Costs
*SGVFS025952*
RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR
DIVIDEND DECLARATION
JUNE 30, 2017
Unappropriated retained earnings, as adjusted, beginning $456,036

Add: Net income actually earned/realized during the
period
Net income during the period closed to retained earnings 1,746,792
Add: Non-actual losses
Less: Non-actual/unrealized income net of tax
Net income actually earned during the period 1,746,792
Unappropriated retained earnings, as adjusted, ending 2,202,828
Less: Cash dividends declared (1,820,000)
Retained earnings available for dividend declaration $382,828
*SGVFS025952*
FINANCIAL SOUNDNESS INDICATORS
JUNE 30, 2017 AND DECEMBER 31, 2016
June 30, December 31,

Ratios Formula 2017 2016
Current Assets/Current
(i) Current Ratio Liabilities 2.17 1.54
(ii) Debt/Equity Ratio Bank Debts1/ Total Equity 1.09 2.99
(iii) Net Debt/Equity Bank Debts1-Cash &
Ratio Equivalents/Total Equity 0.76 2.02
(iii) Asset to Equity
Ratio Total Assets/Total Equity 2.36 4.86
(iv) Interest Cover
Ratio EBITDA2/Interest Expense 6.86 8.90
(v) Profitability
Ratios
GP Margin Gross Profit/Revenues 0.19 0.17
Net Profit Margin Net Income/Revenues 0.11 0.10
EBITDA Margin EBITDA/Revenues 0.17 0.16
Return on Assets Net Income/Total Assets3 0.03 0.06
Return on Equity Net Income/Total Equity3 0.07 0.30
1
Sum of short-term loans and long-term debts
2
EBITDA is calculated as income before income tax plus depreciation and amortization and financial
income (expense).
3
Based on balances as at June 30, 2017 and December 31, 2016
*SGVFS025952*
SCHEDULE A

SUPPLEMENTARY SCHEDULE OF FINANCIAL ASSETS
Name of Valued based

Issuing entity on market
and Amount quotations at Income
association of shown in the end of reporting received or
each issue balance sheet period accrued
Cash N/A $20,112,901 $20,112,901 $44,522
Trade and other receivables N/A 36,163,695 36,163,695 187,500
Financial asset at fair value
through profit or loss N/A 503 503
Amounts owed by related parties N/A 18,326,446 18,326,446
Rental deposit N/A 1,131,399 1,131,399
Security deposit N/A 182,489 182,489
Loan to employees N/A 153,790 153,790
HTM investments N/A 487,030 487,030
AFS financial asset N/A 1,667,000 1,667,000
Receivables from stock
brokers N/A 9,196,157 9,196,157
Loans to employees N/A 6,225 6,225
Miscellaneous deposits N/A 133,548 133,548
$87,561,183 $87,561,183 $232,022
*SGVFS025952*
SCHEDULE B

DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES, AND
PRINCIPAL STOCKHOLDERS (OTHER THAN RELATED PARTIES)
Amounts Receivable from Officers, Employees and Related Parties under Trade and other receivables
Balance at Balance at the

Name and Designation of beginning of Amounts end of the
debtor period Additions collected Current Not Current period
Jerry Liu (Chairman) $10,309,041 $1,100,000 $ $11,409,041 $ $11,409,041
Employees 239,823 19,938 (63,851) 195,910 195,910
$10,548,864 $1,119,938 ($63,851) $11,604,951 $ $11,604,951
Amounts owed by Related Parties

Balance at Balance at the
Name and Designation of beginning of Amounts end of the
debtor period Additions collected Current Not Current period
Cirtek Holding, Inc. $1,809,256 $ $ $1,809,256 $ $1,809,256
Carmerton, Inc. 111,994 4,401,827 4,513,821 4,513,821
Cayon Holdings, Inc. 206,284 388,044 594,328 594,328
$2,127,534 $4,789,871 $ $6,917,405 $ $6,917,405
*SGVFS025952*
SCHEDULE C

RELATED PARTIES WHICH ARE ELIMINATED DURING THE
CONSOLIDATION OF FINANCIAL STATEMENTS
Receivables from related parties which are eliminated during the consolidation
(under Trade and other receivables)
Balance
Balance at at end of
beginning of Amount Amount Non
Name and designation of debtor period Additions collected written off Current current period

Corporation 23,015,861 2,257,867 3,948,394 21,325,334 21,325,334
Corporation 90,335,790 90,335,790 90,335,790

and Solutions Inc. 192,816 207,593 260,114 140,295 140,295
$155,347,131 $31,905,000 $20,291,105 $ $166,961,026 $ $166,961,026
Amounts owed by related parties which are eliminated during the consolidation
Balance at
beginning of Amount Amount Non Balance at end
Name and designation of debtor period Additions collected written off Current current of period
Corporation 9,192,816 67,298 260,114 9,000,000 9,000,000
Corporation 19,937,731 27,577,093 21,536,576 25,978,248 25,978,248
and Solutions Inc. 24,204,798 8,392,073 1,025,531 31,571,340 31,571,340
$155,347,131 $38,384,510 $26,770,614 $ $166,961,027 $ $166,961,027
*SGVFS025952*
SCHEDULE D

SUPPLEMENTARY SCHEDULE OF INTANGIBLE ASSETS - OTHER
ASSETS
AS OF JUNE 30, 2017
Intangible Assets - Other Assets

Other
Charged to Charged to changes
Beginning Additions cost and other additions Ending
Description Balance at cost expenses accounts (deductions) Balance
Product development
costs $922,220 $ ($68,024) $ $ $854,196
*SGVFS025952*
SCHEDULE E

SUPPLEMENTARY SCHEDULE OF LONG-TERM DEBT
AS OF JUNE 30, 2017
Long-term Debt
Amount shown
under caption Amount shown under
current portion of caption long-term
Amount authorized by long-term in related debt in related
Title of issue and type of obligation indenture balance sheet balance sheet
Notes payable $39,916,148 $4,889,882 $35,026,266
*SGVFS025952*
SCHEDULE F

SUPPLEMENTARY SCHEDULE OF INDEBTEDNESS TO RELATED
PARTIES (LONG-TERM LOANS FROM RELATED COMPANIES)
AS OF AS OF JUNE 30, 2017
Indebtedness to related parties (Long-term loans from related companies)

Name of related party Balance at beginning of period Balance at end of period
Not Applicable
*SGVFS025952*
SCHEDULE G

SUPPLEMENTARY SCHEDULE OF GUARANTEES OF SECURITIES OF
OTHER ISSUERS
AS OF JUNE 30, 2017
Guarantees of Securities of Other Issuers

Name of issuing entity of Title of issue of
securities guaranteed by the each class of Total amount Amount owned by
company for which this securities guaranteed and person for which
statement is filed guaranteed outstanding statement is file Nature of guarantee
Not Applicable
*SGVFS025952*
SCHEDULE H

SUPPLEMENTARY SCHEDULE OF CAPITAL STOCK
AS OF JUNE 30, 2017
Capital Stock
Number of Number of
shares issued shares reserved Number of
and outstanding for options Number of shares held
Number of as shown under warrants, shares held by directors,
shares related balance conversion and by related officers and
Title of Issue authorized sheet caption other rights parties employees Others
Common Stock 520,000,000 419,063,353 236,965,380 9
Preferred Stock 400,000,000
*SGVFS025952*

Camelot Preliminary Prospectus 27sep2017 (Final Clean)

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Camelot Preliminary Prospectus 27sep2017 (Final Clean)

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The information in this Preliminary Prospectus is subject to completion and amendment in the final prospectus.

No offer or invitation shall be made or

PRELIMINARY PROSPECTUS STRICTLY CONFIDENTIAL

Cirtek Holdings Philippines Corporation

(incorporated in the Republic of the Philippines)

Primary Offer of up to 120,000,000 Preferred B-2 Shares,

Sole Issue Manager and Bookrunner

Joint Lead Underwriters

The date of this Preliminary Prospectus is 27 September 2017

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE

risks relating to the Companys business,

Witness my hand and seal this ___day of _______ 2017 at [Location],

Doc No. _________:

Conventions which apply to this Preliminary Prospectus

Presentation of Financial Information

FORWARD LOOKING STATEMENTS ....................................................................................................... 11

known and unknown risks,

the Companys ability to successfully manage its activities,

AOI Automatic Optical Inspection

Application the documents to purchase or subscribe to the Offer Shares

Articles the Articles of Incorporation of the Company

Business Day Makati City, Metro Manila and Laguna

BER Bit Error Rate

BIR Bureau of Internal Revenue

Board of the Board of Directors of the Company

Box-Build the electromechanical assembly process involving enclosure fabrication, installation of

BPSK Binary Phase Shift Keying

BSP Bangko Sentral ng Pilipinas, the Central Bank of the Philippines

By-Laws the By-Laws of the Company

CAGR Compound annual growth rate

Camerton Camerton, Inc., the principal shareholder of the Company

CATSI Cirtek Advanced Technologies and Solutions, Inc.

Cayon Cayon Holdings, Inc.

CEC Cirtek Electronics Corporation, a Philippine company

CEIC Cirtek Electronics International Corporation, a British Virgin Islands company

Charmview Charmview Enterprises, Ltd, ,

CHI Cirtek Holdings, Inc.

CLC Cirtek Land Corporation

COA Commission on Audit

DENR Department of Environment and Natural Resources

DENR-EMB Department of Natural Resources, Environmental Management Bureau

DFN Dual flat leadless package

Director(s) the director(s) of the Company

DOLE Department of Labor and Employment

EBITDA earnings before interest, taxes, depreciation and amortization

ECC Environmental Compliance Certificate

EDGE Electronic Disclosure Generation Technology

EIS Environmental Impact Statement

Eligible Brokers Trading Participants of the PSE eligible to trade DDS

Eligible Applicants who are qualified to subscribe to the Offer Shares

EMB Environmental Management Bureau

EMS Electronics Manufacturing Services

Government the national government of the Republic of the Philippines

IDM Integrated Device Manufacturer

IRFU Indoor Radio Frequency Unit

IRRs Implementing Rules and Regulations of the SRC, as amended

Joint Lead BPI Capital Corporation, RCBC Capital Corporation and []

LGU Local Government Unit

LLDA Laguna Lake Development Authority

LMC Labor Management Council

MIC Monolithic Integrated Circuit

MPO minimum public ownership

NPI New Product Information

Witness my hand and seal this _day of _____ 2017 at [Location],