1.

Executive Summary
a. Introduction
IGG is a rapidly growing developer and publisher of mobile online
games with a global presence and international customer base.
Summary
i. Summary of Selected Transfer Pricing Methods
The selected Transfer Pricing Methods used in the analysis
are:
Comparable Uncontrolled Price Method (CUP)
Resale Price Method (RPM)
Cost Plus Method (CPM)
Transactional Net Margin Method (TNMM)
Profit Split Method (PSM)
ii. Summary of Economic Analysis

b. Basis for Opinion

c. Report Contents
1 / 53

In addition to the Executive Summary, this transfer pricing study

contains Company Overview (Section 2), Characteristics or Nature
of IGG (Section 3), Functions Assets and Risk Analysis (Section 4),
Selection of Transfer Pricing Method (Section 5), Economic Analysis
(Section 6), Selection of Tested Party (Section 7), List of
Comparables (Section 8), Comparability Analysis (Section 9),
Conclusions (Section 10) and Appendices (Section 11).
2. Company Overview
a. Company Background and Organization
The Group has its headquarters in Singapore with regional offices in
the United States, China, Canada and the Philippines, and customers from
over 180 countries around the world.
As at end of June 2014, IGG has been operating about 40 games in 15
different languages, among which 80% were developed in-house, all the
games are free-to-download with in-app purchase function. Most of the
development personnel are based in China to tap the large talent pool there
and to leverage cost advantages. This has enabled the Group to produce
games more cost-effectively.

As at 30 June 2014, the player community of the Group consisted of

over 160 million player accounts around the world, including a total MAU of
approximately 16.7 million. During the first half of 2014, approximately
39.8%, 28.9% and 25.2% of the total revenue of the Group was generated
from players with IP addresses in North America, Asia and Europe,
respectively, and the revenue from mobile games accounted for 83% of total
revenue.
As of the second quarter ended 30 June 2014, according to
Distimo.com, an independent third party provider of mobile application
analytics, the Group ranked among top five in 22 countries and top ten in 46
countries in terms of quarterly gross sales generated via Google Play.
2 / 53

In addition to the Apple App Store and Google Play, the Group will
make greater efforts to strengthen long-term partnerships with more than
100 game promotion platforms worldwide, to execute its global marketing
strategy in an effective manner.
3. Characteristics or Nature of IGG Philippines
The primary purpose of the corporation is to engage in providing
outsourced contact services or business process outsourcing such as, but not
limited

to,

providing

enhancement
information

and

and

back

office,

human

management

communications

services,

resources

solutions,

operation,

technology-enabled

support,

services

talent
and

through

various means and media, including web-based applications; providing or

furnishing any and all forms or types of services, data and facilities in
support thereof; and to perform any and all acts connected with the business
aforementioned or arising therefore and or incidental thereto.
4. Functions, Assets and Risk Analysis

5. Selection of Transfer Pricing Methods

3 / 53

COMPARABLE UNCONROL METHOD (CUP)

The comparable price method is the simplest way of determining the
arms-length nature of intercompany based on the price in comparable
uncontrolled transactions. It requires that there be similar transactions
between unrelated parties to use for comparison. The method requires that
the goods subject of the transfer pricing analysis be standard enough to be
old on an open market.
A comparability analysis under the CUP Method shall take into account
the following:
1. Product characteristics such as physical features and quality;
2. If the product is in the form of services, the nature and extent of such
services provided;
3. Whether the goods sold are compared at the same points in the supply
of production chain;
4. Product differentiation in the form of patented features such as
trademarks, design, etc.;
5. Volume of sales if it has an effect of price;
6. Timing of sale if it is affected by seasonal fluctuations or other changes
in market conditions;
7. Whether cost of transport , packaging, marketing, advertising, and
warranty are included in the deal;
8. Whether the products are solid in places where the economic
conditions are the same and
9. Whether a business strategy is adopted in the controlled transactions.
RESALE PRICE METHOD (RPM)
The resale price method begins with the price at which a product that
has been purchased from an associated enterprise is resold to an
independent enterprise. It compares the gross profit margin earned in the
controlled transaction to the gross profit margin realized in comparable
uncontrolled transactions.
COST PLUS METHOD (CPM)
4 / 53

The cost plus method compares a selling price using cost + overhead
+ profits method arrived at in dealing with an arms length party to the
actual cost + overhead to arrive at the mark-up %. The mark-up so
calculated plus total actual transfer cost will result in the transfer price.
In computing for the arms length price using the Cost Plus Method
(CPM), first to consider is the cost incurred by the supplier goods or services
in the controlled transaction. A reasonable amount is then added to the cost
considering the functions performed and the market conditions prevalent
during the transaction. After adding the cost plus mark up, the cost is most
useful for the sale of semi-finished goods between associated parties with
long-term supply contracts provision of services.
TRANSACTIONAL PROFIT METHODS (TPM)
The two methods under the transactional profit methods are:
A. Transactional Net margin Method (TNMM)
B. Profit Split Method (PSM), further divided into:
a. Residual Profit Split
b. Contribution Profit Split
This method examinees the profits arising from the controlled transaction or
transaction between associated enterprises.
A. Transactional Net Margin Method (TNMM)
The transactional net margin method (TNMM) examines the profit
margin relative to an appropriate base (e.g. costs, sales, assets) that a
taxpayer realizes from a controlled transaction (or transaction that are
appropriate

to

aggregate

under

the

principles

of

Chapter.

Thus,

transactional net margin method operates in a manner similar to the cost

plus and resale price methods. This similarly means that in order to be
applied reliably, the transactional net margin method must be applied in a
manner consistent with the manner which the resale price of cost plus
5 / 53

method is applied. This means in a particular that the net margin of the
taxpayer from the controlled transaction should ideally be established by
reference to the net margin that the same taxpayer earns in comparable
uncontrolled transactions.
B. Profit Split Method (PSM)
The profit split method is generally used to remove the effect of special
conditions imposed or present in the transactions between related or
associated enterprise by comparing the division

of

profits

between

uncontrolled or independent enterprise engaging on similar transactions or

business activities. The first step is to identify the combined profits to be split
from the controlled transactions in which the associated enterprises are
engaged. It then splits those profits between the associated enterprises on
an economically valid basis that approximates the division of profits that
would have been anticipated and reflected in an agreement made at arms
length.
One strength of the profit split method is that it generally does not rely
directly on closely comparable transactions, and it can therefore be used in
cases when no such transactions between independent enterprises can be
identified. Another strength is that under the profit split method, it is likely
that either party to the controlled transaction will be left with an extreme and
improbable profit result, since both parties to the transaction are evaluated.
a. Residual Profit Split
In the residual profit split, the combined profits are split in two
ways:
Each associated

enterprise

is

allocated

in

arms

length

remuneration for its non-unique contributions in relation to the

controlled transactions in which it is engaged.
The initial remuneration is determined by applying one of the
traditional transaction methods or a transactional net margin

6 / 53

method

by

reference

to

the

remuneration

of

comparable

transactions between independent enterprises.

Any residual profit (or loss) remaining after the first stage division is
allocated based on the analysis of facts and circumstances taking
into consideration the unique contribution of each participant to the
business transactions.
b. Contribution Profit Split
The combined profits coming from the profits of associated
enterprises in their controlled transactions, are split or divided
between associated enterprises based on their contribution to the
profit or the functions performed in the controlled transactions,
which should be substantiated by external market information
showing how independent enterprises would have divided profits in
similar circumstances.
COMPARABLES:
a. Financial Information of Comparables
(1)
Name of Company: A+B EXPEDIO INTEGRATED MARKETING COMMUNICATIONS,
INC.
Address: 5/F Magnitude II Bldg., E. Rodriguez Jr. Avenue, Bagumbayan, Quezon City.
Kind of Business or Service: Carry on the business of advertising and other related services.
Gross Profit:
14.6%
ROCE:
22%
Operating Profit:
3%
Net Margin:
2.16%
Total Assets:
12,654,446
Total Liabilities:
1,444,375
Total Equity:
11,210,072
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation

7 / 53

2012
91,737,310
81,961,656
9,775,653
8,265,135
122,851

2013
82,990,189
70,829,226
12,160,964
9,588,916
87,037

Average
87,363,749.50
76,395,441
10,968,308.5
8,927,025.5
104,944

Operating Profit
Interest Expense
Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2,572,047
-

2,041,282.5
-

5,665,704
667,606
1,409,638

2013
6,994,583
696,293
11,210,072

Average
6,330,143.5
681,949.5
6,309,855

9,409,327
-

11,958,153
-

10,683,740
-

8,668,294
8,667,294
8,667,294

2013
1,444,375
1,444,375
1,444,375

Average
5,056,334.5
5,055,834.5
5,055,834.5

2012

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

1,510,518
-

2012

(2)

Name of Company: ARINSO INTERNATIONAL PHILIPPINES, INC.

Address: 4F Bldg. 1, Eton Cyberpod Corinthian, Ortigas Ave. corner EDSA, Quezon City.
Kind of Business or Service: Focusing on full range human resource transactions, business
consulting, operations and integration services and other business related processes using
IT-enabled-facilities for international clients and importation of machinery, equipment,
tools, goods, wares, articles, or merchandise.
Gross Profit:
17%
ROCE:
78.53%
Operating Profit:
9%
Net Margin:
6.54%
Total Assets:
399,056,582
Total Liabilities:
338,388,300
Total Equity:
60,688,282
Income Statement
Sales

8 / 53

2012
898,069,447

2013
1,167,451,143

Average
1,032,760,295

Cost of Goods Sold/Services

Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

850,886,885
47,182,562
203,456,446
22,973,939
(156,273,884)
15,338,833

959,602,716
207,848,427
116,358,962
30,711,450
91,489,465
10,841,393

905,244,800.5
127,515,494.5
159,907,704
26,842,694.5
(32,392,209.5)
13,090,113

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
17,604,757
42,904,727
60,001,851
(412,397,676)

2013
23,328,278
39,159,146
59,134,798
60,668,282

Average
20,466,517.5
41,031,936.5
59,568,324.5
(175,864,697)

272,552,106
248,810,609

399,056,582
377,952,102

335,804,344
313,381,355.5

2012
684,949,782
664,669,315
110,400,349

2013
338,388,300
322,975,851
156,942,465

Average
511,669,041
493,822,583
133,671,407

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

(3)

Name of Company: NEXUS TECHNOLOGIES, INC. AND SUBSIDIARIES

Address: G/F, Don Pablo Building, 114 Amorsolo St., Legaspi Village, Makati City.
Kind of Business or Service: Information Technology (IT) solutions catering to various
industries including but not limited to the sale of hardware, packaged software and
services.
Gross Profit:
11%
ROCE:
3.4%
Operating Profit:
Net Margin:
1.95%
Total Assets:
2,472,888,756
Total Liabilities:
1,792,835,071
Total Equity:
680,053,685
Income Statement

9 / 53

2012

2013

Average

Sales
Cost of Goods Sold/Services

4,171,189,161
3,778,131,470

4,788,447,062
4,353,989,939

486,246,820
15,342,039
61,787,151
(27,254,797)

559,735,235
24,736,701
77,489,369
(40,800,906)

4,479,818,111.50
4,066,060,704.5
0
522,991,027.50
20,039,370
69,638,260
(34,027,851.5)

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
101,637,348
523,283,204
1,041,572,395
256,124,080
3,183,336
621,762,190

2013
112,344,948
403,494,937
1,213,278,745
266,777,928
3,424,493
680,053,685

Average
106,991,148
463,389,070.50
1,127,425,570
261,451,004
3,303,914.50
650,907,937.50

Total Assets

2,208,954,229

2,472,888,756

Operating Assets

2,132,324,919

2,224,950,810

2,340,921,492.5
0
2,178,637,864.5
0

Selected Liabilities
Total Liabilities
Current Liabilities

2012
1,587,192,039
1,434,529,146

2013
1,792,835,071
1,689,440,297

563,432,978

728,105,690

Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

Accounts Payable

Average
1,690,013,555
1,561,984,721.5
0
645,769,334

(4)

Name of Company: POINTS BUSINESS AND INDUSTRIAL SERVICES, INC.

Address: Room 1840 RG Bldg., E. Rodriguez sr., Ave., Cubao, Quezon City.
Kind of Business or Service: Manpower services.
Gross Profit:
10%
ROCE:
15%
Operating Profit:
6%
Net Margin:
0.6%
Total Assets:
36,652,365
10 / 53

Total Liabilities:
Total Equity:

38,541,559
(1,422,853)

Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
11,400,000
10,159,225
1,240,775
1,233,310
255,000
7,466
500

2013
11,063,286
9,956,958
1,106,329
417,460
255,000
688,869
-

Average
11,231,643
10,058,091.5
1,173,552
825,385
255,000
348,167.5
500

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
11,548
16,545,542
17,118,202

2013
259,701
17,940,582
16,863,202

Average
135,624.5
17,243,062
16,990,702

(1,905,061)

(1,422,853)

(1,663,957)

34,189,723
34,189,723

36,652,365
36,652,365

35,421,044
35,421,044

2012
36,094,784
16,817,620
16,817,620

2013
38,541,559
19,264,394
19,264,394

Average
37,318,171.5
18,041,007
18,041,007

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

(5)

Name of Company: POINTWEST TECHNOLOGIES CORPORATION

Address: 12th Floor Citibank Center, 8741 Paseo de Roxas, Makati City.
Kind of Business or Service: Developing, designing and marketing all kinds of information
technology (IT) systems, or parts thereof, including but not limited to hardware and
software products.
Gross Profit:
17%
11 / 53

ROCE:
1.34%
Operating Profit:
7%
Net Margin:
3.27%
Total Assets:
10,928,060
Total Liabilities:
7,167,754
Total Equity:
3,760,306
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
$11,125,365
$9,520,342
$1,605,023
$794,257
$55,157
$810,766
338

2013
$11,751,936
$9,658,818
$2,093,118
1,262,882
$70,772
$830,236
$10,565

Average
11,438,650.5
9,589,580
1,849,070.5
1,028,569.5
62,964.5
820,501
5,451.50

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
$4,001,340
5,940,664
125,586
983,580
6,196,082

2013
$2,805,810
5,683,745
122,876
983,580
3,760,306

Average
3,403,575
5,812,204.5
124,231
983,580
4,978,194

$13,514,683
11,771,995

$10,928,060
8,813,702

12,221,371.5
10,292,848

2013
7,167,754
5,576,913
2,726,274

Average
7,243,177.5
5,666,824.5
2,649,228

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

2012
7,318,601
5,756,136
$2,572,182

(6)

Name of Company: ROYAL 168 SERVICES INC.

Address: NGA Building Villa Adelina II Subdivision Pulo, Cabuyao Laguna
Kind of Business or Service: Offer, provide, and perform management, administrative, and
technical services to business, commercial, and manufacturing establishments without
12 / 53

engaging in the management of funds, securities portfolio and similar assets of the engaged
entity
Gross Profit:
16%
ROCE:
3.3%
Operating Profit:
4.9%
Net Margin:
3.4%
Total Assets:
13,508,556.28
Total Liabilities:
2,494,489.48
Total Equity:
11,014,066.80
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
28,377,483.33
24,004,340.88
4,373,142.45
2,440,271.45
219,990
1,932,871
-

2013
28,826,719.05
24,205,559.53
4,621,159.52
3,202,612.45
219,990
1,418,547.07
138,000

Average
28,602,101.19
24,104,950.21
4,497,150.99
2,821,441.95
219,990
1,675,709.04
138,000

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
3,298,268.23
5,740,818.35
1,120,040
10,021,093.85

2013
5,068,315
7,104,961.13
900,050
11,014,066.80

Average
4,183,291.62
6,422,889.74
1,010,045
10,517,580.33

Total Assets
Operating Assets

10,796,822.54
10,796,822.54

13,508,556.28
13,508,556.28

12,152,689.41
12,152,689.41

Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

2012
775,728.69
775,728.69
195,867.26

2013
2,494,489.48
2,494,489.48
68,925.36

Average
1,635,109.09
1,635,109.09
132,396.31

(7)

Name of Company: SEMANTRIX, INC.

Address: From: Suites 709 Medical Towers, 103 Herrera St., Legaspi Village Makati City
13 / 53

To: Room 205, 2nd Floor, Diplomat Condominium, Corner Russel Street, Pasay City.
Kind of Business or Service: Corporate services, job contracting business, providing
advisory and consultative services and providing expert guidance and directions.
Gross Profit:
15%
ROCE:
70%
Operating Profit:
Net Margin:
-1.1%
Total Assets:
4,654,747
Total Liabilities:
4,639,851
Total Equity: 4,654,747
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2014

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2014

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

(8)

14 / 53

9,230,066
7,822,917
1,407,149
(106,932)
252,325
(106,932)
-

2013
9,194,379
7,876,147
1,318,232
(443,844)
307,744
(443,844)
-

Average
9,212,222.50
7,849,532
1,362,690.50
(275,388)
280,034.50
(550,776)
-

1,044,994
3,168,836
296,625
(1,340)
14,896

2013
206,032
1,786,199
547,610
(167,675)
121,828

Average
625,513
2,477,517.50
422,117.50
(84,507.5)
68,362

4,654,747
4,594,747

2,618,720
2,558,720

3,636,733.50
3,576,733.50

4,639,851
489,742
4,150,109

2013
2,496,892
240,145
2,256,747

Average
3,568,371.50
364,943.50
3,203,428

2014

Name of Company: SHELLSOFT TECHNOLOGY CORPORATION

Address: 3F Megastate Building, Araneta Avenue cor Agno St., Quezon City.
Kind of Business or Service: Buying, selling, distributing, marketing at wholesale and retail
in so far as may be permitted by law, all kinds of goods, commodities, wares and
merchandise of every kind and description; to enter into all kinds of contracts for the
export, import, purchase, acquisition, sale at wholesale or retail and other disposition for
its own account as principal or in representative capacity as manufacturers representative,
merchandise broker, indenters, commission merchant, factors or agents.
Gross Profit:
16%
ROCE:
5.2%
Operating Profit:
10%
Net Margin:
6.56%
Total Assets:
375,945,583
Total Liabilities:
104,842,019
Total Equity:
91,250,893
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
597,480,979
511,412,672
89,806,871
57,451,854
2,428,173
-

2013
693,553,158
580,257,715
117,638,768
72,107,998
3,675,743
-

Average
645,517,068.50
545,835,193.50
103,722,819.50
64,779,926
3,051,958
-

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
72,631,512
460,586
93,118,144
16,019,377
93,784,704

2013
71,287,946
200,613
94,843,840
15,492,946
91,250,893

Average
71,959,738
330,599.50
93,980,992
15,756,161.50
92,517,798.50

194,487,173
193,764,241

196,092,913
195,345,616

195,290,043
194,554,928.50

2012
100,702,469
8,047,254
92,655,215

2013
104,842,019
7,136,904
97,705,115

Average
102,772,244
7,592,079
95,180,165

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

15 / 53

(9)

Name of Company: STRATEGICSYNERGY, INC. AND SUBSIDIARY

Address: 7th Floor, 5600 Sergio Osmea Highway, Makati City.
Kind of Business or Service: Traders, distributors and resellers of information technology
products, in connection with its business of acting as systems integrator, and process agent
for its principals and partners and also to engage in software development.
Gross Profit:
8%
ROCE:
9.3%
Operating Profit:
- 2%
Net Margin:
-2.1%
Total Assets:
244,010,284
Total Liabilities:
136,440,340
Total Equity:
107,569,944
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
415,705,098
(367,432,392)
48,272,706
(38,692,188)
2,087,838
9,976,821
474,000

2013
451,660,786
(413,004,069)
38,656,717
(49,565,475)
3,639,210
(9,521,141)
-

Average
433,682,942
(390,218,230.5)
43,464,711.5
(44,128,831.5)
2,863,524
9,748,981
474,000

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
43,539,418
12,804,397
9,693,347
7,705,513
1,924,590
120,960,597

2013
70,226,732
6,494,343
5,379,490
6,525,255
7,384,194
107,569,944

Average
56,883,075
9,649,370
7,536,418.5
7,115,384
4,654,392
114,265,270.5

226,693,089
222,255,922

244,010,284
28,914,749

235,351,686
125,585,335.50

2012
105,732492
97,837,872
97,837,872

2013
136,440,340
124,092,402
124,092,402

Average
121,084,416
110,965,137
110,965,137

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

16 / 53

(10)

Name of Company: STRATEGIC SYNERGY, INC.

Address: 7th Floor, 5600 Sergio Osmea Highway, Makati City.
Kind of Business or Service: Traders, distributors and resellers of information technology
products, in connection with its business of acting as systems integrator, and process agent
for its principals and partners and also to engage in software development.
Gross Profit:
11%
ROCE:
1.2%
Operating Profit:
2%
Net Margin:
2.77%
Total Assets:
254,215,478
Total Liabilities:
131,957,739
Total Equity:
122,257,739
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
397,368,748
288,281,981
42,544,205
(32,059,620)
1,764,996
10,484,585
747,000

2013
397,755,437
285,212,047
48,881,610
(37,862,914)
2,740,302
11,018,696
-

Average
397,562,092.5
286,747,014
45,712,907.5
(34,961,267)
2,252,649
10,751,640.5
747,000

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
35,517,086
12,804,397
120,638,246
6,146,868
12,000,000
113,542,471

2013
68,480,922
6,494,343
131,925,851
4,898,278
12,000,000
122,257,739

Average
51,999,004
9,649,370
126,282,048.5
5,522,573
12,000,000
117,900,105

216,487,502
200,410,291

254,215,478
237,633,777

235,351,490
219,022,034

2012
216,487,502
95,438,396
95,438,396

2013
254,215,478
121,696,275
121,696,275

Average
235,351,490
108,567,335.5
108,567,335.5

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

17 / 53

(11)

Name of Company: SUBIC NEXUS TECHNOLOGIES INC.

Address: Area 11-A, 11/2 Argonaut Hi-way, Boton Area, Subic Bay Freeport Zone,
Zambales
Kind of Business or Service: Information Technology solutions, services and products, such
as, but not limited to, business activities as systems integrator, distributor, importer,
exporter, lessor, agent, commercial broker and manufacturers representative for
computers and maintenance.
Gross Profit:
11%
ROCE:
2.1%
Operating Profit:
6%
Net Margin:
7%
Total Assets:
208,833,707
Total Liabilities:
159,224,831
Total Equity:
49,608,876
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
656,014,940
589,452,874
66,562,066
(22,032,491)
1,639,548
45,855,740
1,744,547

2013
749,578,107
701,638,039
92,940,068
(35,093,599)
1,957,194
56,233,113
2,094,419

Average
702,796,523.5
645,545,456.5
79,751,067
(28,563,045)
1,798,371
51,044,426.50
1,919,483

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
8,845,885
13,499,000
164,718,262
4,351,427
57,055,277

2013
5,327,884
9,172,066
189,799,853
4,082,884
49,608,876

Average
7,086,884.5
11,335,533
177,259,075.5
4,217,155.5
53,332,076.5

191,792,371
191,792,371

208,833,707
208,833,707

200,313,039
200,313,039

2012
134,737,094

2013
159,224,831

Average
146,980,962.5

Total Assets
Operating Assets
Selected Liabilities
Total Liabilities

18 / 53

Current Liabilities
Accounts Payable

134,737,094
68,327,056

159,224,831
107,274,945

146,980,962.5
87,801,000.5

(12)

Name of Company: TREND MICRO INCORPORATED

Address: 8th Floor, Tower 2, The Rockwell Business Center, Ortigas Avenue
Kind of Business or Service: Antivirus research, execute red alerts, to provide support services to
Head office and its customers and software development,
Gross Profit:
5%
ROCE:
6.2%
Operating Profit:
4%
Net Margin:
3%
Total Assets:
715,504,628
Total Liabilities: 408,554,601
Total Equity:
306,950,027
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
1,357,610,130
1,291,668,000
65,942,130
(91,240,062)
166,354,829
(25,297,932)

2013
1,347,667
1,275,296,920
72,370,699
(26,445,970)
145,908,672
45,924,729

Average
679,478,898.5
638,294,294
69,156,414.5
(58,843016)
156,131,750.5
(35,611,330.5)

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012
49,255,134
227,091,354
263,497,524
3,389,148
254,152,622

2013
63,876,402
429,578,109
158,986,721
3,389,148
306,950,027

Average
56,565,768
328,334,731.5
211,242,122.5
3,389,148
280,551,324.5

610,634,677
564,164,831

715,504,628
674,868,052

663,069,652.5
619,516,441.5

Total Assets
Operating Assets
Selected Liabilities

19 / 53

2012

2013

Average

Total Liabilities
Current Liabilities
Accounts Payable

356,482,045
270,808,182
66,142,962

408,554,601
315,876,383
78,090,433

382,518,323
293,342,282.5
72,116,697.5

(13)

Name of Company:THREATTRACK SECURITY PHILIPPINES, INC.

Address: 5TH FLOOR, ONE WORLD SQUARE BLDG. #10 UPPER McKINLEY ROAD,
McKINLEY TOWN CENTER, FORT BONIFACIO, TAGUIG CITY
Kind of Business or Service: To provide security solutions for complex spyware, viruses, and
malware, and to make and carry out contacts of every kind and character that may be necessary
or conducive to the accomplishment of the purpose of the Corporation.
Gross Profit:
6%
ROCE:
15.7%
Operating Profit:
4%
Net Margin:
3.8%
Total Assets:
48,132,827
Total Liabilities:
13,488,787
Total Equity:
34,644,040
Income Statement
Sales
Cost of Goods Sold/Services
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense

2012
137,764,359
109,363,616
28,400,743
17,700,577
8,991,898
10,715,101
-

Assets
Cash & Equivalents
Inventories
Accounts Receivable
Plant, Property & Equipment
Investments
Equity

2012

Total Assets

20 / 53

2013
150,961,042
140,662,370
10,298,672
4,148,334
11,874,328
6,267,061
-

Average
144,362,700.5
125,012,993
19,349,707.5
10,924,455.5
10,433,113
8,491,081
-

2,383,144
12,608,350
18,273,102
29,600,000

2013
4,168,635
18,045,701
19,228,005
29,600,000

Average
3,275,889.5
15,327,025.5
18,750,553.5
29,600,000

40,809,250

48,132,827

44,471,038.5

Operating Assets
Selected Liabilities
Total Liabilities
Current Liabilities
Accounts Payable

40,682,631

47,944,218

44,313,424.5

2012
11,962,900
8,306,301
3,744,640

2013
13,488,787
9,741,003
6,234,655

Average
12,725,843.5
9,023,652
4,989,647.5

LEGAL ENVIRONMENT:

PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA)

is a government agency in the Philippines under the Department of
Trade and Industry created to help promote investments in the exportoriented manufacturing industry into the country by assisting investors in
registering and facilitating their business operations and providing tax
incentives.
The PEZA is governed by the R.A 7916 but some of its provisions were
amended by the R.A 8748.
Fiscal Incentives to PEZA-Registered Economic Zone Enterprises
Information Technology Enterprise:

Income Tax Holiday (ITH) 100% exemption from corporate income

tax:
o 4 years ITH for Non-pioneer project
o 6 years ITH for Pioneer project
ITH Extension year may be granted if Project complies with the
following criteria (one criterion is equivalent to one ITH
extension year,), provided that the total ITH entitlement period
shall not exceed eight (8) years:

21 / 53

> The average net foreign exchange earnings of the project for
the first three (3) years of operations is at least US$500,000.00
and,
> The capital equipment to labor ratio of the project does not
exceed US$10,000.00 to 1 for the year immediately preceding
the ITH extension year being applied for.
o 3 years ITH for Expansion project (ITH applies to incremental
sales)

Upon expiry of the Income Tax Holiday - 5% Special Tax on

Gross Income and excemption from all national and local taxes. (Gross
Income refers to gross sales or gross revenues derived from the
registered activity , net of sales discounts, sales returns and
allowances and minus cost of sales or direct costs but before any
deduction is made for administrative expenses or incidental losses
during a given taxable period)

Tax and duty free importation of equipment and parts.

Exemption from wharfage dues on import shipments of

equipment.

VAT zero-rating of local purchases of goods and services,

including land-based telecommunications, electrical power, water bills,
and lease on the building, subject to compliance with Bureau of
Internal Revenues and PEZA requirements

Exemption from payment of any and all local government

imposts, fees, licenses or taxes. However, while under Income Tax
Holiday, no exemption from real estate tax, but machineries installed
and operated in the economic zone for manufacturing, processing or
for industrial purposes shall not be subject to payment of real estate
taxes for the first three (3) years of operation of such machineries.
Production equipment not attached to the real estate shall be exempt
from real property taxes.

Exemption from expanded withholding tax.

Non-Fiscal Incentives to PEZA-Registered Economic Zone

Enterprises

22 / 53

Simplified Import Export Procedures (Electronic Import Permit

System and Automated Export Documentation System).

Non-resident Foreign Nationals may be employed by PEZA-registered

Economic Zone Enterprises in supervisory, technical or advisory
positions.

Special Non-Immigrant Visa with Multiple Entry Privileges for the

following non-resident Foreign Nationals in a PEZA-registered Economic
Zone Enterprise : Investor/s, officers, and employees in supervisory,
technical or advisory position, and their spouses and unmarried
children under twenty-one years of age. PEZA extends Visa
Facilitation Assistance to foreign nationals their spouses and
dependents.

BASIC PHILIPPINE LABOR LAWS AND REGULATIONS

Employers, including small businesses, may implement policies and
impose terms and conditions of employment as they deem fit given their
operating and profitability requirements. These policies and employment
terms and conditions however must be consistent with mandated labor
policies set forth in the Labor Code of the Philippines or P.D 442.
Under the Labor Code, employees are entitled to compensation or
wages, overtime pay, holiday and premium pay, service charges and tips in
service businesses, SSS, service incentive leaves, and retirement pay.
MINIMUM WAGE
Coverage
All covered employees are entitled to receive minimum wages regardless
of the following:
a. their positions
b. designations
c. employment status; and
d. the method by which their wages are paid
The Minimum Wage Structure
The new minimum wage structure, incorporating the P10 increase as
mandated by Wage Order No. NCR-18 is as follows:
23 / 53

DAILY MINIMUM WAGE RATES

National Capital Region (NCR)
Per Wage Order No. NCR-18
(Effective: 4 October 2013)
Upon Effectivity:
Sector/Industry

Non-Agriculture
Agriculture (Plantation
and Non Plantation)
Private Hospitals with
bed capacity of 100 or
less
Retail/Service
Establishments
employing 15 workers
or less
Manufacturing
Establishments
regularly employing
less than 10 worker

Basic
Wage

New Basic
Wage

COLA

P 426.00
P 389.00

Basic
Wage
Increase
P10.00
P10.00

P436.00
P399.00

P30.00
P30.00

New
Wage
Rates
P 466.00
P 429.00

P 389.00

P10.00

P399.00

P30.00

P 429.00

P 389.00

P10.00

P399.00

P30.00

P 429.00

P 389.00

P10.00

P399.00

P30.00

P 429.00

COLA
Integratio
n
Effective
01
January
2014

Basic Wage
After
Integration

COLA

P 436.00
P 399.00

P15.00
P15.00

P 451.00
P 414.00

P15.00
P15.00

New
Minimum
Wage
Rates
Effective
01
January
2014
P 466.00
P 429.00

P 399.00

P15.00

P 414.00

P15.00

P 429.00

P 399.00

P15.00

P 414.00

P15.00

P 429.00

Effective 01 January 2014:

Sector/Industry
New
Basic
Wage

Non-Agriculture
Agriculture (Plantation
and Non Plantation)
Private Hospitals with
bed capacity of 100 or
less
Retail/Service
Establishments

24 / 53

employing 15 workers
or less
Manufacturing
Establishments
regularly employing
less than 10 workers

P 399.00

P15.00

P 414.00

P15.00

National Capital Region (NRC) covers the Cities of Caloocan, Las Pias,
Makati, Malabon, Mandaluyong, Manila, Marikina, Muntinlupa, Paraaque,
Pasay, Pasig, Quezon, San Juan, Taguig, and Valenzuela and Municipalities of
Navotas and Pateros.
Grants the following to all minimum wage workers in the private sector in the
region:

Upon effectivity: P10.00 per day basic wage increase

Effective January 2014: Integration of P15.00 COLA from the P30.00
COLA under W.O. No. NCR-17
Wage Order was issued September 6, 2013, published at Philippine Star on
September 19, 2013 and is effective October 4, 2013.
Coverage

Wage rates per day prescribed in this wage order shall apply to all
minimum wage earners in the private sector in the Region regardless of
their position, designation or status of employment and irrespective of the
method by which they are paid.

The wage order does not cover household or domestic helpers; persons
in their personal service of another, including family drivers, and workers
of duly registered Barangay Micro Business Enterprises (BMBEs) with
Certificate of Authority pursuant to Republic Act 9178.
Exemptions
Upon application with and as determined by the Board, based on the
documentation and other requirements in accordance with applicable rules
and regulations issued by the NWPC, the following may be exempted from
the applicability of the wage order:

Distressed establishments;
Retail/Service establishments regularly employing not more than Ten
(10) workers;

Establishments whose total assets (ETA) including those arising from

loans but exclusive of land on which particular business entitys office,
plant and equipment are situated, are not more than P3 million; and

Establishments adversely affected by natural calamities

Within one year, from the grant of exemption to a qualified ETA, said ETA is
encouraged to register as BMBE.
25 / 53

P 429.00

Other Important Matters

Private educational institution which have not increased their tuition

fees for the school year 2013-2014 may defer compliance until the
beginning of school year 2014-2015

Increase granted by employer within 3 months prior to the effectivity

of the wage order shall be credited as compliance provided forged
between the party or a CBA allowing creditability.

Entities should correct any wage structure distortion (meaning in

higher level of employees were close to minimum wage, then an increase
to them would be effected)

See other relevant provision of the Wage Order No. NCR-18, Click Here.
Basis for Minimum Wage
The normal working hours which shall not be more than eight (8) hours a
day shall be the basis for the minimum wage rates prescribed by law.
Workers Paid by Result
All workers paid by results, including those who are paid on piecework,
takay, pakyaw, or task basis, shall receive not less than the applicable
statutory minimum wage rates prescribed under the Act for normal
working hours which shall not exceed eight (8) hours a day, or a
proportion thereof for work of less than the normal working hours.

Effect of Wage Distortion

Wage distortion is a situation where an increase in prescribed wage rates
results in the elimination of severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups
in an establishment

Effect of the Reduction of Workdays on Wages

In situations where the reduction in the number of regular working days is
resorted to by the employer to prevent serious losses due to causes
beyond his control such as when there is a substantial slump in the
demand for his goods or services or when there is lack of raw materials,
the employer may deduct the wages corresponding to the days
taken off from the workweek, consistent with the principle of no

26 / 53

work, no pay. This is, of course, without prejudice to an agreement or

policy which provides otherwise.
PREMIUM PAY
Premium pay refers to the additional compensation required by law for work
performed within eight (8) hours on non-working days such as rest days and
special days.
Premium Pay Rates
The minimum statutory premium pay rates are as follows
Plus 30% of the daily rate of 100% or a total of 130% for work performed
on rest days or on special days
Plus 50% of the daily rate of 100% or a total of 150% for work performed
on a rest day which is also a special day
Plus 100% of the daily rate of 100% or a total of 200% plus 30% thereof
or a total of 260% for work performed on a regular holiday which is also
the employees rest day

OVERTIME PAY
Overtime pay refers to additional compensation for work performed beyond
eight (8) hours a day.
NIGHT SHIFT PAY
Every employee is entitled to a minimum night shift pay of not less than ten
(10) percent of their regular wage for each hour of work performed between
10 oclock in the evening and 6 oclock in the morning.
If overtime work (or work in excess of 8 hours fall within the aforesaid period,
premiums for overtime work should first be integrated into the regular hourly
rate of the employees before computing night shift pay.
HOLIDAY PAY
The Holiday Pay Rule stipulates that an employee is entitled to at least 100%
of his basic wage even if he did not report for work, provided he/she is
present or is on leave of absence with pay on the work day immediately
preceding the holiday. Moreover, when the holiday falls on the scheduled
workday of the employee, work performed on that said day merits an
additional 30% of the employees regular holiday rate of 200% or a total of
260%.

27 / 53

There are now eleven (11) regular holidays as provided under EO 203
(incorporated in EO 292) as amended by R.A. 9492 approved on July 25,
2007, An Act Rationalizing the Celebration of national Holidays
amending for the purpose Section 26, Chapter 7, Book 1 of
Executive Order No.292, as amended, otherwise known as the
Administrative Code of 1987.

New Years Day

Maundy Thursday
Good Friday
Araw ng Kagitingan
Labor Day
Independence Day
National Heroes Day
Bonifacio Day
EidulFitr
Christmas Day
Rizal Day

January 1
Movable Date
Movable Date
Monday nearest April 9
Monday nearest May 1
Monday nearest June 12
Last Monday of August
Monday nearest November 30
Movable Date
December 25
Monday nearest December 30

Special Days
The principle of no work, no pay applies in case of Special NonWorking Holidays provided hereunder as well as on other special days
proclaimed as such by the President.

Nationwide Special
Holidays
Ninoy Aquino
Day
All Saints Day
Last Day of the Year

Monday nearest August 21

November 1
December 31

In addition to these three national special days, two special days were
also declared for the province--- Jose Abad Santos Day every 7th day of
May and Pampanga Day every 11th day of December.
13th MONTH PAY
The 13th month pay required by Presidential Decree 851 is additional income
based on wage but not part of the wage. It is 1/12 of the total basic salary
28 / 53

earned by an employee within calendar year. All rank-and-file employees

regardless of their designation or employment status and irrespective of the
method, by which their wages are paid, are entitled to this benefit, provided
that they have worked for at least one month during the calendar year. If the
employee worked for only a portion of the year, the 13th month pay is
computed pro rata.
The basic salary of an employee for the purpose of computing the 13th
month pay shall include all remuneration or earnings paid by the employer
for services rendered. However, this does not include allowances and
monetary benefits which are considered or integrated as part of the regular
or basic salary, such as cash equivalent of unused vacation and sick leave
credits, overtime, premium, night differential and holiday pay, and cost-ofliving allowances. However, those salary-related benefits may be included as
part of the basic salary in the computation of the 13th month pay if by
individual or collective agreement, company practice or policy, the same are
treated as part of the basic salary of an employee.
Time of Payment
The required 13th month pay shall be paid not later than
December 14 of each year. An employer, however, may give to his
employees one half () of the required 13th pay before the opening of
the regular school year and the other half on or before the 24th of
December of every year. The frequency of payment of this monetary
benefit may be the subject of agreement between the employer and the
recognized/collective bargaining agent of the employees.

SERVICE INCENTIVE LEAVE

Every employee who has rendered at least one (1) year of service is entitled
to a yearly service incentive leave of five (5) days with pay. The service
incentive leave may be
PATERNITY LEAVE
Paternity Leave refers to leave credits granted to all married male employees
to allow him to earn compensation for seven (7) working days without
reporting for work, provided that his spouse has delivered a child or had a
miscarriage or an abortion for the purpose of lending support to his wife
during her period of recovery and/or the nursing of the newly born child.
MATERNITY BENEFITS

29 / 53

1. Every pregnant woman in the private sector, whether married or

unmarried is entitled to the daily maternity benefit of 100% of the
average daily salary credit for a compensable for the following periods:
Sixty (60) days in case of normal delivery, abortion or miscarriage;
Seventy-eight (78) days in case of cesarean delivery
2. To be entitled to the maternity benefit, the employee:
must be an SSS member employed at the time of delivery, miscarriage
or abortion;
must have given the required notification to the SSS thru her
employers; and
her employers must have paid at least three (3) months of maternity
contributions within the twelve-month period immediately before the
date of contingency.
PAG-IBIG FUND or HOUSING DEVELOPMENT MUTUAL FUND
The coverage of the Pag-IBIG Fund or Housing Development Mutual Fund
(HDMF) shall be mandatory upon all employees covered by the Social
Security System (SSS) and/or the Government Service Insurance System
(GSIS), and their respective employers. However, the coverage of the
employees whose monthly compensation is less than four thousand
pesos (P4,000) shall be voluntary.
Upon membership, employers and employees shall contribute an amount
according to the following percentages but not exceeding one hundred pesos
(P100):
a. Employees earning not more than one thousand five hundred pesos
(P1,500) per month shall contribute one percent (1%)
b. Employees earning more than one thousand five hundred pesos
(P1,500) per month shall contribute two percent (2%)
c. All employers --- two percent (2%) of the monthly compensation of the
covered employees.
TERMINATION PAY
30 / 53

The amount of separation pay an employee is by law entitled to receive

depends on the reason and grounds for the termination of his services.
One (1) or One Half (1/2) month Pay Per Year of Service
An employee is entitled to receive as termination pay the equivalent of
one (1) or one-half (1/2) month pay for every year of service, a fraction of
at least six (6) months being considered as one whole year, if his
separation from service is due to any of the following causes:

RETIREMENT PAY
Coverage
All employees regardless of their position, designation or status and
irrespective of the method by which their wages are paid are entitled to
retirement benefits provided under Republic Act 7641 upon compulsory
retirement at the age of sixty-five (65) or upon optional retirement at sixty
(60) or more but not 65.
This benefit does not apply to the following:
a. Government Employees
b. Domestic helpers and persons in the personal service of another
c. Employees of retail, service and agricultural establishments or
operations regularly employing not more than ten (10) employees
d. Other benefits that may be agreed upon by employer and employee
for inclusion
Minimum Retirement Pay= No. Of Years in service x One Half Month
salary
For covered employees who are paid by result, the basis for computing
their salary for fifteen days shall be their Average Daily Salary (ADS). The
ADS may be derived by dividing the total salary or earnings for the last 12
months by the number of actual working days.
Compulsory
In the absence of a retirement plan or applicable agreement in an
establishment, an employee shall be retired upon reaching the age of
sixty five (65) an shall be entitled to the retirement pay illustrated above.
Optional
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An employee below sixty five (65) years of age may retire and shall be
entitled to retirement pay under RA 7641 if:
a. there is no retirement plan or applicable agreement on retirement
benefits in an establishment
b. he has reached sixty (60) years or more; and
c. if he has served for at least five (5) years in the said establishment
from the employer is less, the employer shall pay the deficiency.
EMPLOYMENT STATUS
Regular Employment
Article 280 of the Labor Code on Regular and Casual Employment
specifies that the provisions of a written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer. An exception is when the
employment has been fixed for a specific project or undertaking the
completion of which has been determined at the time of the engagement
of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
Casual Employment
An employment is deemed to be casual if it is not covered by the
preceding paragraph: Provided, that, any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such
activity exists.
What determines regularity or casualness is not the employment
contract, written or otherwise, but the nature of the job.
Probationary Employment
Article 281 of the Labor Code stipulates that probationary employment
shall not exceed six (6) months from the date the employee started
working unless it is covered by an apprenticeship agreement stipulating a
longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he/she
fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of
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his engagement. An employee who is allowed to work after a

probationary period shall be considered a regular employee.
TERMINATION
Termination by Employer
Grounds for Termination
An employer may terminate an employment for any of the following
causes:
a. Serious misconduct or willful disobedience by employee of the lawful
orders of his employer or representative in connection with his/her
work;
b. Gross and habitual neglect by the employee of his duties;
c. Fraud or willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative;
d. Commission of a crime or offense by the employee against the person
of his employer or any immediate member of his family or his duly
authorized representative; and
e. Other causes analogous to the foregoing.
f.
Preventive Suspension
Preventive suspension is justified where the employees continued
employment poses a serious and imminent threat to the life of property of
the employer or of his/her co-workers.
The suspension may last for thirty (30) days; beyond that, the suspension
may continue but the employee becomes entitled to his pay and
benefits.
Closure of the establishment and Reduction of Personnel
The employer may also terminate the employment of any employee due
to the following:
a. Installation of labor saving devices;
b. Redundancy;
c. Retrenchment to prevent losses; or
d. the closing or cessation of operation of operation of the establishment
or undertaking unless the closing is for the purpose of circumventing
the above provisions.
The employer must serve a written notice on the worker and the
Department of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of
labor saving devices or redundancy, the worker affected thereby shall be
33 / 53

entitled to a separation pay equivalent to at least one (1) month pay or to

at least one (1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in case of closure or
cessation of operations of establishment or undertaking not due to serious
losses or financial reverses, the separation pay shall be equivalent to one
(1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year.
Disease as Ground for Termination
An employer may terminate the services of an employee who has been
found to be suffering from any disease and whose continued employment
is prohibited by law or is prejudicial to his health as well as to the health
of his co-employees: Provided, that he is paid a separation pay equivalent
to at least one (1) month salary or to one-half (1/2) month salary for every
year of service, whichever is greater, a fraction of at least six (6) months
being considered as one (1) whole year.
Termination by Employee
Termination with a just cause
An employee may terminate the employer-employee relationship with
just cause by serving a written notice to the employer at least one (1)
month in advance. The employer upon whom no such notice was
served may hold the employee liable for damages.
Termination without a just cause
An employee may put an end to the relationship without serving any
notice on the employer for any of the following just causes:
a. Serious insult by the employer or his representative on the honor
and person of the employee;
b. Inhuman and unbearable treatment accorded the employee by the
employer or his representative;
c. Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the
immediate members of his family; and
d. Other causes analogous to the foregoing.
When employment is not deemed terminated
The bona fide suspension of the operation of a business or undertaking for
a period not exceeding six (6) months, or the fulfillment by the employee
of a military or civic duty shall not terminate employment. In all such
cases, the employer shall reinstate the employee to his former position
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without loss of seniority rights if he indicates his desire to resume his work
not later than one (1) month from the resumption of operations of his
employer or from his relief from the military or civic duty.
CONTRACTING AND SUB-CONTRACTING (DEPARTMENT ORDER 182002)
Contracting and subcontracting arrangements are expressly allowed by law,
but may be subject to regulations consistent with the promotion of
employment, protection of workers welfare, and enhancement of industrial
peace and the rights of the workers to self-organization and collective
bargaining.
Contractors and subcontractors as well as other employees, are entitled to
all the rights and privileges, and are subject to all the duties and
responsibilities which the Labor Code, as amended, attaches to every
employee-employer relationship.

SOCIAL SECURITY SYSTEM

The following are the persons mentioned in the R.A 1161 or known as
Social Security Law that are compulsorily to be a member of SSS.
A)
SSS shall be compulsory upon all employees not over sixty years
of age and their employers: Provided, That any benefit already earned by
employees under private benefit plans existing at the time of the approval of
this Act shall not be discontinued, reduced or otherwise impaired: Provided,
further, That private plans which are existing and in force at the time of
compulsory coverage shall be integrated with the plan of the SSS in such a
way where the employer's contribution to his private plan is more that that
required of him.
B)
Filipinos recruited in the Philippines by foreign-based employers
for employment abroad may be covered by the SSS on a voluntary basis.
C)
SSS shall also be compulsory upon all self-employed persons
earning P1,800 or more per annum: Provided, That the effectivity of
coverage of certain groups of self-employed shall be determined by the
Commission under such rules and regulations it may prescribe: Provided,
further, That the effectivity of the coverage of the following self-employed
persons shall be in accordance with section ten (b) hereof:
1. All self-employed professionals licensed by the Professional
Regulations Commission or those licensed to practice law.

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2. Partners and single proprietors of businesses.

3. Actors and actresses, directors, scriptwriters and news
correspondents who do not fall within the definition of the term
"employee" in section eight (d) of this Act.
4. Professionals athletes, coaches, trainers licensed by the Games and
Amusement Board as well as jockeys and trainers licensed by the
Philippine Racing Commission.
SSS Registration
You are also required to enroll your employees under the Social
Security System (SSS) program, which provides insurance and
protection for private-sector employees, including resident foreign
employees. SSS benefits include disability pension, retirement,funeral
benefit, sickness allowance, maternity and paternity leave and loans.
If you are the owner of a single proprietorship business, you should
accomplish and submit SSS Forms R-1 (Employer's Data Record) and R1A (Initial or Subsequent List of Employees). If your business is a
partnership or a corporation, you also need to submit your articles of
partnership or incorporation.
You should also require your employees to secure an SS number and
that that they are reported for coverage under the SSS;
You must report all employees for SS coverage within thirty (30) days
from the date of employment by submitting an accomplished SSS Form
R-1A (Employment Report) at the nearest SSS office. You are also
required to deduct from your employees salaries the monthly SS
contributions based on the schedule of contributions and remit these
contributions to any SSS-accredited bank/SSS Head Office/ SSS
selected branches on or before the 10th day following the month when
said contributions are due and applicable.

SSS Benefits
The Social Security System (SSS) provides insurance and protection for
private-sector employees, including resident foreign employees. SSS
benefits include disability pension, retirement, funeral benefit, sickness
allowance, maternity and paternity leave and loans.
36 / 53

PAG IBIG FUND

Pag-IBIG is an acronym which stands
for PagtutulungansaKinabukasan: Ikaw, Bangko, Industria at Gobyerno. In
effect, Pag-IBIG harnesses these four sectors of our society to provide its
members with adequate housing through as effective savings scheme.
Coverage
These guidelines shall cover the development and construction of low cost
housing units in Metro Manila and highly urbanized cities, and socialized
housing units in the provinces by Pag-IBIG Fund.
Objectives
1. To provide low-cost and socialized house and lot
packages/condominium units either for rent or for sale to low income
Pag-IBIG members who cannot afford the housing packages available
in the market.
2. To enable Pag-IBIG Fund to perform its mandate by using its funds to
provide decent and affordable condominium units as well as house and
lot packages for sale to eligible Pag-IBIG Fund members nationwide.
3. To stimulate competition that will bring about better housing packages
in terms of price and development that will redound to the benefit not
only of Pag-IBIG Fund members but also of the public in general.
4. To help solve the housing backlog by generating further demand for
housing through the provision of affordable condominium units and
house and lot packages.
5. To equitably distribute nationwide economic opportunities generated
from housing production, and in the process, stimulate stability
brought about by economic development.
6. To provide an opportunity for Local Government Units (LGUs) to comply
with R.A. 7279 by identifying and providing land for socialized housing.

37 / 53

7. To simplify and facilitate the processing of end-user financing for

eligible Pag-IBIG Fund members, given that the projects are owned by
Pag-IBIG Fund.
8. To develop further sense of ownership, pride and confidence among
members of the Fund, knowing fully well that the projects being
constructed are direct investments made from their savings with the
institution.
9. To generate more membership to Pag-IBIG Fund.
10.

To develop and dispose acquired properties of the Fund.

PHILHEALTH
The National Health Insurance Program was established to provide
health insurance coverage and ensure affordable, acceptable, available and
accessible health care services for all citizens of the Philippines. It shall serve
as the means for the healthy to help pay for the care of the sick and for
those who can afford medical care to subsidize those who cannot. It shall
initially consist of Programs I and II or Medicare and be expanded
progressively to constitute one universal health insurance program for the
entire population. The program shall include a sustainable system of funds
constitution, collection, management and disbursement for financing the
availment of a basic minimum package and other supplementary packages
of health insurance benefits by a progressively expanding proportion of the
population. The program shall be limited to paying for the utilization of
health services by covered beneficiaries. It shall be prohibited from providing
health care directly, from buying and dispensing drugs and pharmaceuticals,
from employing physicians and other professionals for the purpose of directly
rendering care, and from owning or investing in health care facilities. (Article
III, Section 5 of RA 7875 as amended)
Powers And Functions
PhilHealth is a tax-exempt Government Corporation attached to the
Department of Health for policy coordination and guidance. (Article IV,
Section 15 of RA 7875 as amended). It shall have the following powers and
functions (Article IV, Section 16 of RA 7875 as amended by RA 10606):
a) To administer the National Health Insurance Program;

38 / 53

b) To formulate and promulgate policies for the sound administration of the

Program;
c) To supervise the provision of health benefits and to set standards, rules
and regulations necessary to ensure quality of care, appropriate utilization of
services, fund viability, member satisfaction, and overall accomplishment of
Program objectives;
d) To formulate and implement guidelines on contributions and benefits;
portability of benefits, cost containment and quality assurance; and health
care provider arrangements, payment, methods, and referral systems;
e) To establish branch offices as mandated in Article V of this Act;
f) To receive and manage grants, donations, and other forms of assistance;
g) To sue and be sued in court;
h) To acquire property, real and personal, which may be necessary or
expedient for the attainment of the purposes of this Act;
i) To collect, deposit, invest, administer, and disburse the National Health
Insurance Fund in accordance with the provisions of this Act;
j) To negotiate and enter into contracts with health care institutions,
professionals, and other persons, juridical or natural, regarding the pricing,
payment mechanisms, design and implementation of administrative and
operating systems and procedures, financing, and delivery of health services
in behalf of its members;
k) To authorize Local Health Insurance Offices to negotiate and enter into
contracts in the name and on behalf of the Corporation with any accredited
government or private sector health provider organization, including but not
limited to health maintenance organizations, cooperatives and medical
foundations, for the provision of at least the minimum package of personal
health services prescribed by the Corporation;
l) To determine requirements and issue guidelines for the accreditation of
health care providers for the Program in accordance with this Act;
m) To visit, enter and inspect facilities of health care providers and
employers during office hours, unless there is reason to believe that
inspection has to be done beyond office hours, and where applicable, secure
copies of their medical, financial, and other records and data pertinent to the
claims, accreditation, premium contribution, and that of their patients or
employees, who are members of the Program;
39 / 53

n) To organize its office, fix the compensation of and appoint personnel as

may be deemed necessary and upon the recommendation of the president of
the Corporation;
o) To submit to the President of the Philippines and to both Houses of
Congress its Annual Report which shall contain the status of the National
Health Insurance Fund, its total disbursements, reserves, average costing to
beneficiaries, any request for additional appropriation, and other data
pertinent to the implementation of the Program and publish a synopsis of
such report in two (2) newspapers of general circulation;
p) To keep records of the operations of the Corporation and investments of
the National Health Insurance Fund;
q) To establish and maintain an electronic database of all its members and
ensure its security to facilitate efficient and effective services;
r) To invest in the acceleration of the Corporations information technology
systems;
s) To conduct information campaign on the principles of the NHIP to the
public and to accredited health care providers. This campaign must include
the current benefit packages provided by the Corporation, the mechanisms
to avail of the current benefit packages, the list of accredited and
disaccredited health care providers, and the list of offices/branches where
members can pay or check the status of paid health premiums;
t) To conduct post audit on the quality of services rendered by health care
providers;
u) To establish an office, or where it is not feasible, designate a focal person
in every Philippine Consular Office in all countries where there are Filipino
citizens. The office or the focal person shall, among others, process, review
and pay the claims of the overseas Filipino workers (OFWs);
v) Notwithstanding the provisions of any law to the contrary, to impose
interest and/or surcharges of not exceeding three percent (3%) per month,
as may be fixed by the Corporation, in case of any delay in the remittance of
contributions which are due within the prescribed period by an employer,
whether public or private. Notwithstanding the provisions of any law to the
contrary, the Corporation may also compromise, waive or release, in whole
or in part, such interest or surcharges imposed upon employers regardless of
the amount involved under such valid terms and conditions it may prescribe;
w) To endeavour to support the use of technology in the delivery of health
care services especially in farflung areas such as, but not limited to,
40 / 53

telemedicine, electronic health record, and the establishment of a

comprehensive health database;
x) To monitor compliance by the regulatory agencies with the requirements
of this Act and to carry out necessary actions to enforce compliance;
y) To mandate the national agencies and LGUs to require proof of PhilHealth
membership before doing business with a private individual or group;
z) To accredit independent pharmacies and retail drug outlets; and
aa) To perform such other acts as it may deem appropriate for the
attainment of the objectives of the Corporation and for the proper
enforcement of the provisions of this Act.
BUREAU OF INTERNAL REVENUE
The Bureau of Internal is an attached agency of Department of
Finance. BIR collects more than one-half of the total revenues of the
government.
The following are provided in the R.A 8424
Individuals engaged in business or practice of profession and
juridical entities, unless otherwise exempted, shall:
1. Pay Annual Registration Fee, if applicable;
2. Secure COR;
3. Proceed to Secondary Registration;
4. Get Ask for Receipt notice, if applicable; and
5. Attend the taxpayers initial briefing to be conducted by the
BIR district office for new registrants in order to apprise them of their
rights and duties/responsibilities. In lieu of the briefing, the BIR district
office may distribute information materials on registration to its new
applicants in CD format to be developed by the Taxpayer Assistance
Service (TAS).
Procedures and Policies on secondary registration shall be
prescribed in a separate Regulation.
PRESCRIBED PERIODS TO COMPLETE PRIMARY REGISTRATION
Every person subject to any internal revenue tax to be filed/paid
periodically shall complete its registration with the BIR as follows:
1. On or before the commencement of business
2. Before payment of any tax due
3. Before or upon filing of any applicable tax return,
statement or declaration as required by the Code,
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4. Within ten (10) days from date of employment

City Hall
Business Permits and Licensing or Mayors Permit
The business permit and licensing is one of the major tax
collection functions of the Local Government Unit. The collection on
business permits and licenses, being the primary source of the
Municipality's income lay the benchmark from which the plans and
programs is established. The tax computation is based on the gross
annual income of a business entity and some other fees. A newly
established business tax due computation is based on their capital
outlay. They can choose from annual, semi-annual and quarterly
payments of tax dues. This function is being given to the local
government code as being provided to the provisions of R.A 7160 or
known as Local Government Code.
Barangay Hall
The barangay is part of the procedure in getting business permit
and licensing. Once a person seeking to build or start business, the one
of the first thing to do is to have a business permit where you can get
it in the Municipal hall/City Hall. The barangay just became part of it
because one of the requirements is to get a barangay clearance or
permit where the area of the business will be situated or held.
SECURITIES AND EXCHANGE COMMISSION
The agency of the Government of the Philippines responsible for
regulating the securities industry in the Philippines. The SEC is an agency
within the Office of the President of the Philippines.
MAJOR FUNCTIONS OF SEC
Its major functions include registration of securities, analysis of every
registered security, and the evaluation of the financial condition and
operations of applicants for security issue.[6]
The functions of the SEC are defined in Section 5 of the Securities Regulation
Code, and include the following major areas:

Supervision over all registered business entities in the country,

including suspensions and revocations of their registrations

Policymaking with regard to the market in securities

Control over and approval of security registration statements

42 / 53

Power to investigate violations of securities laws and to impose

sanctions for such violations

Power to issue subpoenas, punish for contempt, and issue cease and
desist orders in furtherance of its law enforcement mission
1. Laws that govern the registration of companies and
partnerships at the SEC?
Securities Regulation Code (R.A. 8799)
P.D. 902-A as Amended
Corporation Code of the Philippines
Civil Code (Partnerships)
2. Entities that are registered with
IGGthe SEC?
Stock corporations (Including
foreign
corporations e.g. branch
(Cayman Islands)
offices, representative offices, regional headquarters or regional
operating headquarters)
Non-stock corporations (Foundations, associations, non-government
organization, religious organization, etc.)
100%
100%
Partnerships
(General and limited100%
partnerships)
3. Where do I go if I want to incorporate a company or
partnership?
The Company
Registration
and Monitoring Department
(CRMD)
IGG
HK
IGG Singapore
IGG USA
(Hong Kong)
(Singapore)
(USA)

100%

APPENDICES:

IGG Philippines
(Philippines)
Offshore

IGG ORGANIZATIONAL CHART:

Fuzhou Tianji
(PRC)

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Structured Contracts

Fuzhou Tianmeng
(PRC)

Fuzhou Tianjie
(PRC)

100%

Onshore

CONTRACT FOR SERVICES

THIS AGREEMENT is made on April 1, 2013

BETWEEN
1) IGG SINGAPORE PTE. LTD., a company incorporated in Singapore
with its registered office at 10 Jalanking, Sime Darby Enterprise Centre,
#07-03, Singapore 159410 (the Company);
AND
2) IGG PHILIPPINES CORP., a company incorporated in Philippines with
its registered office at Unit 2805, One corporate Center, Julia Vargas
Avenue corner, Meralco Avenue, Ortigas Center, Pasig City (the
Service Provider)
44 / 53

(Each to be referred to collectively as the Parties eand each a Party

WHEREAS:
The Company wishes to engage the Service Provider to provide the
services described herein on these terms and conditions.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires:
Operating Expenses means the total expenses including but
not limiting salary & welfare, office rental, capital expenditures etc.
reasonably incurred by the Service Providerin accordance with
Clause 4.2
1.2

References to Clauses are to clauses of this Agreement;

1.3 The headings in this Agreement are for convenience only and
shall not affect the interpretation hereof; and
1.4 Unless the context otherwise requires, references to the singular
number shall include references to the plural number and vice versa
and references to natural persons shall include bodies corporate
and the use of any gender shall include all genders.
2. ENGAGEMENT
2.1 The Company hereby agrees to engage the Service Provider to
carry out the following services (the Services)
Outsourced contact center services or business process outsourcing.
The provision of the Services will commence on April 2014 (the
Commencement Date)
2.2 The Service Provider accepts the engagement on the terms and
conditions set out in this Agreement.
2.3 The Service Provider shall perform the Services in a timely
manner.
2.4
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During the Term, the Service Provider hereby agrees to and shall:

a) Exercise all professional skill and due care and diligence in the
performance of the Services.
b) Comply with the reasonable directions and instructions of the
Company in carrying out the Services and answer all queries
by the Company in relation to the Services;
c) Conform to and comply with the Companys codes of staff and
security practice whilst performing the Services;
d) Comply with the regulations of the Company in respect of
access, restricted areas, safety and working conditions as
applicable to the designated location where the Services are
to be performed;
e) Carry out the Services at such location(s) as may be
reasonably stipulated by the Company;
f) Not make or give any warranties, guarantees, representations
or other commitments on behalf of the Company except upon
the written instructions of the Company or with the prior
written approval of the Company;
g) Not engage in any other activities or perform work for any
other party during the Term that would conflict with the
interests of the Company, except with the prior written
consent of the Company and upon full and frank disclosure to
the Company in writing, and for purposes of this sub-clause,
correspondence by email will be sufficient; and
h) Where applicable, have the necessary visas, employments
pas and/or work permit required in order for the Service
Provider and its employees to perform the Services under this
Agreement.
2.5 The Service Provider agrees to provide, at no cost to the
Company, all equipment required for the provision of the Services to
the Company and such equipment shall be covered under the
Service Providers insurance policies for the duration of this
Agreement. The Service Provider shall be responsible for all such
equipment and the Company shall have no liability to the Service
Provider for any loss or damage to such equipment unless such loss
46 / 53

or damage are caused directly by the gross negligence or willful

default of the Company.
2.6 The Service Provider acknowledges that the rights and
obligations under this Agreement are personal to the Service
Provider and the Service Provider shall not sub-contract any of the
Services or obligations under this Agreement to any other party
without the prior written consent of the Company.
3. DURATION
This Agreement shall come into force on the date of this Agreement
and shall continue in full force and effect from the Commencement
Date to Dec. 31, 2014 (the TERM), unless earlier terminated in
accordance with this Agreement.
4. MONTHLY SERVICE FEE
4.1 In consideration for the Service Providers performance of the
Services, the Company shall pay the Service Provider the monthly
service fee (the Service Fee) computed as follows:
Services Fee=Operating Expenses of the Current Monthx108%
4.2 The Company shall not pay the Service Provider any further sums
of monies for disbursement and expenses incurred by the Service
Provider in performing the Services save for such disbursements
and expenses that have been approved by the Company prior to
their incurrence by the Service Provider. Approval of expenses shall
be submitted within 15 days of the Commencement Date. All claims
by the Service Provider for any such approved expenses shall be
submitted from time to time and accompanied by original receipts
and any other supporting documentation as may be reasonably
required by the Company. Each must be submitted no later than
three (3) months from the date of the expenses incurred.
4.3 The Service Provider shall be responsible for all income taxes,
duties, levies, assessments, fees and other taxes (if any) payable by
the Service Provider in carrying out the Services. In the event that
the Company receives a request from any relevant tax authorities to
pay on behalf of the Service Provider or to withhold payments from
the Service Provider in order that the Company may pay any such
taxes, duties, levies, assessments and fees, the Service Provider
hereby authorizes the Company to comply with terms of the said
request. The Service Provider shall promptly reimburse the
47 / 53

Company for any such payments made by the Company upon

receipt of notice of the same form the company.
4.4 The payment time of the monthly service fee shall be flexible,
therefore, the parties shall negotiate and settle the time of the
payment under this agreement.
5. CONFIDENTIALITY
6.1 The Service Provider hereby acknowledges, agrees and undertakes
the confidential nature of all information and documents supplied,
entrusted or made available to the Service Provider by the Company,
including without limitation these terms and conditions, the affairs,
operations and dealings of the Company, information and documents
concerning any person, company, agent, governmental department or
authority with whom the Company may have dealings, and information
and documents obtained by the Service Provider from any person or
company in the course of performing the Services which by their
nature, or by the circumstances of their disclosure are or could
reasonably be expected to be regarded as confidential (hereinafter
called the Confidential Information).
6.2 The Service Provider hereby agrees and undertakes
a) To hold in strictest confidence the Confidential information;
b) Not to use the Confidential Information for any purpose other
than for the purposes of the Services;
c) Not to disclose to any party, whether a person, a firm or a
corporation, any or all of the Confidential Information, without
the prior written consent of the Company;
d) To surrender and return of all of the Confidential Information and
any notes, memoranda or the like including any copies thereof to
the Company on the Companys written demand;
e) To acknowledge that the Confidential Information and all rights
therein are and shall remain the sole and exclusive property of
the Company; and
f) Not to make or publish any news releases or make any
announces or denial or confirmation in any medium concerning
this Agreement or any part of the Services, in any manner,
advertise or publish the same in the medium, without the prior
written consent of the Company.
48 / 53

6.3 The Service Provider acknowledges that if it should violate the

provisions of this Clause 5, the Company will suffer immediate and
irrevocable harm for which monetary damages would not be adequate
remedy. Accordingly, the Service Provider agrees that in the event that
it breaches or threatens to breach this Agreement, the Company shall
be entitled to the issuance in any appropriate jurisdiction of a
restraining order, whether a temporary and/or permanent injunction,
without security, restraining and enjoining the said breach or violation
by it or any other person or any other person or entity which may be
acting in concert with it of obligations under this Clause 5.
6.4 The Service Provider agrees to the Company collecting and storing
certain personal information about the Service Provider, such as;
name, any registered business details, and contact details and blank
details. This information is collected to enable the Company to
maintain a working relationship for the purposes of this Agreement and
possible future engagements. This information also allows the
Company, where relevant, to credit the Service Provider for work
completed, prepare contracts, make payments, send newsletters and
generally keep in touch.
6.5 The obligations under this Clause 5 shall continue without any limit
in time even after the expiration or termination of this Agreement.
7. WARRANTIES AND INDEMNITY
7.1 The Service Provider represents and warrants to the Company as
follows;
a) The Service Provider has the power to enter into, exercise his
rights, and perform and comply with his obligations under this
Agreement.
b) The performance of the Service Providers obligations under this
Agreement does not and will not contravene or constitute a
default under any provision contained in any contract, deed or
license by which he is bound or affected or to which he is a party;
c) The Service Providers obligations under this Agreement are
valid. Binding and enforceable in accordance with their terms;
and
d) No litigation, arbitration or administrative proceedings is current,
pending or threatened, so far as the Service Provider is aware:

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i.

To restrain the entry into, exercise of his rights, or the

performance or enforcement of or compliance with his
obligations under this Agreement; or

ii.

To have a material adverse effect on any such obligation.

7.2The Service Provider agrees and undertakes to indemnify the

Company against any action, claim, demand, expense loss, damage
and cost asserted against or incurred by the company whatsoever or
howsoever arising from or as a result of any breach or these terms and
conditions or of the warranties by the Service Provider, or any act or
omission by the Service Provider in connection with the performance of
the Services, including without limitation third party claims for breach
of contract, defamation or the infringement of any copyright or other
intellectual property rights.
8. TERMINATION
8.1 The Company shall have the right to terminate this Agreement by
giving one (1) months written notice without assigning any reasons
8.2 The Company shall be entitled to terminate this agreement
forthwith upon written notice if:
a) The Service Provider is guilty of any breach of these terms and
conditions and fails to remedy such breach within the time period
reasonably stipulated by the Company in writing;
b) The Service Provider is guilty of any breach incapable of remedy;
c) The Service Provider commits any act of theft or any criminal
acts prejudicial to the Company;
d) Any gross misconduct is committed by the Service Provider in
the performance of the Services, and for the purposes of this
provision, gross misconduct shall mean any act or omission
likely to prejudice or damage the interest or reputation of the
Company, including without limitation, any dishonesty, theft,
fraudulent, activity or defamation.
e) Any proceeding has commenced or any order is made for the
bankruptcy of the Service Provider, or if the Service Provider
enters into arrangement or composition for the benefit of its
creditors, or if a receiver or manager is appointed in respects of
his assets or undertaking or any part thereof; or
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8.3 On termination of the Agreement

a) All rights and obligations of the Parties under this Agreement
shall automatically terminate except for such rights of actions
as shall have accrued prior to such termination and any
obligations which expressly of by implication are intended to
come into or continue in force on or after such termination;
b) The Service Provider shall promptly return to the Company all
Confidential Information and any other document and
material belonging to the Company in the possession of the
Service Provider; and
c) Where applicable, the Company shall, within thirty (30) days,
pay the Service Provider for all unpaid monies accrued up to
the date of termination after making due deduction for any
sums due and owing to the Company under the terms of this
Agreement, or the Service Provider shall, within fourteen (14)
days, refund any excess payments made in advance by the
Company.
9. RELATIONSHIP WITH THE COMPANY
9.1 It is expressly agreed that the Service Provider is an independent
contractor and not an employee of the Company for any purpose
whatsoever.
9.2 Nothing in this Agreement shall create a partnership, joint venture
or agency relationship between the Company and the Service Provider.
10. NOTICES
10.1 All notices, demands or other communications required or
permitted to be given or made hereunder shall be in writing and
delivered personally or sent by prepared registered post or by telefax
addressed to the intended recipient thereof at its address or telefax
number as follows:
The Company
Address: 10 JalanKilang, Sime Darby Enterprise
Centre, 07-03 Singapore
159410
Fax No: 65-6271 7709
The Service Provider
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Address: Unit 2805, One Corporate Center, Julia

Vargas Avenue corner,
Meralco, Avenue, Ortigas Center, Pasig City
Fax No: (+632)6673476
Attention: Mr. Fang Hanling
(or to such other address or teefax number as any Party may
from time to time notify the other Party)
10.2 Any such notice, demand or communication shall be deemed to
have been duly served on and received by the addressee:
a) If delivered by hand, at the time of delivery
b) If sent by prepared registered post, within 5 days of dispatch; or
c) If transmitted by way of telefax, at the time of transmission.
In proving the giving of a notice or any other document, it shall be
sufficient to show:
i.

In the case of registered post, that the notice or other

document was contained in an envelope which was duly
addressed and posted; or

ii.

In the case of telefax that the telefax transmission was duly

transmitted from the dispatching terminal as evidence by a
transmission report generated by the transmitting equipment.

11. GOVERNING LAW AND DISPUTE RESOLUTION

This Agreement shall be governed and construed in accordance to the
laws of the Republic of the Singapore. The Parties hereby submit to the
non-exclusive jurisdiction of the Courts of the Republic of Singapore in
connection with matters concerning this Agreement.
12.

GENERAL PROVISONS

12.1 These terms and conditions embody the entire agreement

between the Parties that governs the relationship between the Parties
in relation to the engagement and supersedes any and all other
contracts, representations, and arrangements, whether oral or in
writing, heretofore made by either Party with reference to the subject
matter hereof.
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12. 2 This Agreement shall not be altered, changed, supplemented or

amended except where mutually agreed in writing by both Parties.
12.3 No delay or omission by the Company in exercising any right or
remedy under these terms and conditions shall be considered a waiver
of such right or remedy and no waiver shall be effective unless in
writing. The right of the Company to require strict performance and
observance of any obligation hereunder shall not be affected in any
way by any previous waiver, forbearance or course of dealing.
12.4 The rights and remedies in this Agreement are cumulative and not
exclusive of any other rights or remedies (whether provided by law or
otherwise).
12.5 In the event that any or any part of the provisions contained in
these terms and conditions is determined to be invalid, unlawful or
unenforceable to any extent, such provision shall be severed from the
remaining provisions which shall continue to be valid and enforceable
to the fullest extent permitted by law.
12.6 A person who is not party to these terms and conditions shall
have no right under the Contracts (Rights of Third Parties) Act (Cap.
53B) to enforce any of its terms.
12.7 The Company shall be entitled, with prior written notice to the
Service Provider, to assign and transfer its rights and obligations under
this Agreement to such entity as it deems appropriate. The Service
Provider agrees to accept the undertaking of such entity in respect of
the performance of any of the obligations of the Company under this
Agreement in substitution of the Company.
12.8 Each Party shall be responsible for its own costs and expenses in
the preparation, negotiation and execution of this Agreement and the
transactions contemplated

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