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COVER SHEET S.E.C. Registration No A 2 0 0 1 I 7 7 0 8 x U R P A S I N c 7 F c A M B R I D G E c E N T R E B L D G 1 0 8 T o R D E S I L L A S S T S A L c E D o V I L L A G E M A K A T I c I T Y MARK S. GORRICETA Contact Person l\ilonth Day Fiscal Year (Company's Full Name) (Business Address : No. Street City / Town / Provine ) SEC FORM 17-A N/A Secondary License Type. lf Applicable (632) 889-6467 Company Telephone Number 2nd Week of May Month Day Annual Meeting N/A Amended Articles Number/Section Total Amount of N/A Domestic Foreign Dept. Requiring this Doc. Total No. of Stockholders 1 2 3 1 To be accomplished by SEC Personnel mncerned LCU File Number STAMPS Document l.D Cashier FORM TYPE [[[ ffi tlT[ N/A

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COVER SHEET

S.E.C. Registration No

A 2 0 0 1 I 7 7 0 8

x U R P A S I N c

7 F c A M B R I D G E c E N T R E B L D G

1 0 8 T o R D E S I L L A S S T S A L c E D oV I L L A G E M A K A T I c I T Y

MARK S. GORRICETA

Contact Person

l\ilonth Day

Fiscal Year

(Company's Full Name)

(Business Address : No. Street City / Town / Provine )

SEC FORM 17-A

N/A

Secondary License Type. lf Applicable

(632) 889-6467

Company Telephone Number

2nd Week of May

Month Day

Annual Meeting

N/A

Amended Articles Number/Section

Total Amount of

N/A

Domestic Foreign

Dept. Requiring this Doc.

Total No. of Stockholders

1 2 3 1

To be accomplished by SEC Personnel mncerned

LCUFile Number

STAMPS

Document l.D Cashier

FORM TYPE

[[[ ffi

tlT[N/A

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Xurpas Inc. 2016 Annual Report

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SECURITIES AND EXCHANGE COMMISSION

SEC FORM 17-A, AS AMENDED

ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141

OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended December 31, 2016

2. SEC Identification Number _A200117708_ 3. BIR Tax Identification No. _219-934-330-000_ 4. Exact name of issuer as specified in its charter XURPAS INC. 5. PHILIPPINES 6. (SEC Use Only) Province, Country or other jurisdiction of

incorporation or organization Industry Classification Code:

7. 7th Floor, Cambridge Centre 108 Tordesillas St.

Salcedo Village, Makati City 1227 1227 Address of principal office Postal Code 8. (632) 889-6467 / fax (632) 889-6426 Issuer's telephone number, including area code 9. _Not Applicable________________________________________________________________ Former name, former address, and former fiscal year, if changed since last report. 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock

Outstanding Common Shares 1,856,952,746 As of December 31, 2016, 31% of Xurpas Inc.’s common shares are owned by the public. 11. Are any or all of these securities listed in the Philippine Stock Exchange. Yes [X] No [ ]

A total of 1,797,700,660 common shares are listed in the Philippine Stock Exchange as of December 31, 2016.

12. Check whether the issuer:

(a.) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports);

Yes [ X ] No [ ]

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(b.) has been subject to such filing requirements for the past ninety (90) days. Yes [ X ] No [ ] 13. Aggregate market value of the voting stock held by non-affiliates as of December 31, 2016

amounted to P=4,573,884,904. The price used for this computation is the closing price as of December 31, 2016 is P=7.99.

APPLICABLE ONLY TO ISSUERS INVOLVED IN

INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

14. Check whether the issuer has filed all documents and reports required to be filed by Section 17 of

the Code subsequent to the distribution of securities under a plan confirmed by a court or the Commission.

Yes [X] No [ ]

DOCUMENTS INCORPORATED BY REFERENCE

15. If any of the following documents are incorporated by reference, briefly describe them and identify the part of SEC Form 17-A into which the document is incorporated: (a) Any annual report to security holders; (b) Any information statement filed pursuant to SRC Rule 20;

(c) Any prospectus filed pursuant to SRC Rule 8.1.

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TABLE OF CONTENTS

PART I BUSINESS AND GENERAL INFORMATION Item 1 Business Item 2 Properties Item 3 Legal Proceedings Item 4 Submission of Matters to a Vote of Security Holders PART II OPERATIONAL AND FINANCIAL INFORMATION Item 5 Market for Registrant’s Common Equity and Related Stockholder Matters Item 6 Management’s Discussion and Analysis or Plan of Operations Item 7 Financial Statements and Supplementary Schedules Item 8 Changes in and Disagreements with Accountants on Accounting and Financial

Disclosures PART III CONTROL AND COMPENSATION INFORMATION Item 9 Directors and Executive Officers of the Registrant Item 10 Executive Compensation Item 11 Security Ownership of Certain Beneficial Owners and Management Item 12 Certain Relationships and Related Transactions PART IV CORPORATE GOVERNANCE Item 13 Corporate Governance PART V EXHIBITS AND SCHEDULES Item 14 Exhibits

Reports on SEC Form 17-C (Current Report)

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES INDEX TO EXHIBITS SIGNATURES

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PART I - BUSINESS AND GENERAL INFORMATION ITEM 1. Business Xurpas Inc. (“Xurpas” or the “Company”) is a technology company specializing in the creation and development of digital products and services for mobile end-users, as well as the creation, development, and management of proprietary platforms for mobile operators. Xurpas provides mobile marketing and advertising solutions integrated in these consumer digital products and platforms for the consumption of mobile users. The Company is also engaged in platform development and customization, system integration, mobile platform consultancy services, management of off-the-shelf application and social media related services. This includes information technology (IT) staff augmentation and various enterprise solutions-based services to Telcos and other companies for network and applications development. Today, the Company’s main business units comprise of: 1) Mobile consumer products and services; 2) Enterprise solutions; and 3) Other services (HR technology services). In 2005, the Company acquired a 65% controlling stake in Fluxion, Inc. (currently registered as Xeleb Technologies Inc., referred herein as “Fluxion” or “Xeleb Tech”) to expand its product and service portfolio. Fluxion, originally an iAyala wholly-owned subsidiary, had been organized to engage in mobile and internet systems design and the development of programming languages, usability and social media. Through Fluxion, the Company developed mobile platform solutions for the benefit of its client Telcos, which were used (and are still being used) by millions of mobile subscribers at any given time. On November 12, 2014, the Philippine Stock Exchange (“PSE”) approved the initial public offering of the Company and offer of 344.00 million common shares at an offer price of P=3.97 per share. On December 2, 2014, the common shares of Xurpas were listed in the PSE. In 2015, Xurpas acquired several companies to expand its portfolio of mobile technology products and services, enterprise services, and invest in companies that will aid in the distribution of the aforementioned products and services. In February 2015, the Company acquired a 51% controlling stake in Storm Flex Systems, Inc. (currently registered as Storm Technologies Inc., referred herein as “Storm”), to enable Xurpas to expand beyond telecommunication networks and into corporations through offering human resource (“HR”) technology solutions. As of date, Xurpas owns 56% controlling stake in Storm. In June 2015, Xurpas acquired 70% controlling stake in Seer Technologies Inc. (“Seer”), a company engaged in software consultancy, design, development and managed services focused on mobile, cloud and data technologies. In the same month, the Company created Xeleb, a 67%-owned subsidiary, to engage in the development, design, sale and distribution of celebrity-branded games and applications. In September 2015, the Company acquired 51% controlling stake in Yondu Inc. (“Yondu”), originally a Globe Telecom wholly-owned subsidiary which is presently engaged in the development and creation of wireless products and services accessible through telephones or other forms of communication devices and media networks. It also provides internet and mobile value added services, and information technology and technical services including software development and related services. In March 2016, the Company incorporated Xurpas Enterprise Inc. to primarily engage in the business of software development including designing, upgrading, and marketing all kinds of information technology systems to corporate clients. In the same month, the Company acquired 23.53% ownership in Micro Benefits Limited (“Micro Benefits”), a company registered in Hong Kong. Micro Benefits is

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engaged in the business of providing employee benefits to Chinese workers through its operating company, Micro Benefits Financial Consulting (Suzhou) Co. Ltd, China. On April 26, 2016, Xurpas conducted an overnight placement with partial top up (“Overnight Top Up Placement”) wherein three shareholders sold an aggregate of 155,400,000 common shares and accordingly, subscribed to 77,700,000 common shares (“Subscription Shares”) from the Company’s authorized capital stock. The Company raised an aggregate of P=1.2 billion gross proceeds from issuance of the Subscription Shares, which was intended to support its growth strategy and fund its capital expenditure program. On October 6, 2016, Xurpas acquired 100% stake in Art of Click Pte. Ltd (“AOC”), a company registered under the laws of Singapore and engaged in the business of mobile media advertising that offers a marketing platform for advertisers. On October 7, 2016, the Board approved the application for Initial Public Offering of its subsidiary, Xeleb Tech. Xeleb Tech is currently in the process of securing approval from the Securities and Exchange Commission and the PSE for the registration and listing of up to 1,479,748,562 common shares (which includes the 296,000,000 offer shares). The list of the companies on which Xurpas has control as of December 31, 2016 and 2015 are as follows: Percentage of Voting Interest 2016 2015 Xeleb Technologies Inc. (formerly Fluxion, Inc.) 67.0% 65.0% Storm Technologies, Inc. (formerly Storm Flex Systems, Inc.) 56.6% 51.1% Xeleb Inc. 67.0% 67.0% Seer Technologies Inc. 70.0% 70.0% Yondu Inc. 51.0% 51.0% Xurpas Enterprise Inc. 100.0% - Art of Click Pte. Ltd. 100.0% - PT Sembilan Digital Investama 49.0% 49.0% MatchMe Pte. Ltd. 28.6% 31.5% Micro Benefits limited 23.5% - Altitude Games Pte. Ltd 21.8% 21.8% Altitude Games Inc. 21.2% 21.2% Zowdow, Inc. (formerly Quick.ly Inc.) 4.2% 4.8% PRODUCTS AND SERVICES Mobile Consumer Services Mobile Consumer Services includes airtime management, content development and management, and marketing and advertising solutions. The Company creates and develops mobile consumer content and other value-added services for mobile phone subscribers such as online casual games, info-on-demand services (e.g., news, social and other entertainment information), chat and messaging applications (e.g., mobile stickers), ringtones, licensed or unlicensed content such as music, videos, as well as mobile marketing and advertising solutions. In addition, for its online casual games (e.g. Grab-a-Gold, GlobeGameswithFriends and PlaySmart) and mobile casual game applications (e.g. Run Super V and Anne Galing!), each of which has been tailored to an internet and online consumer base, the Company develops and maintains its own platforms that host and enable mobile subscribers to access or use such products. The provision of these products and services for end-users is performed by the Company’s mobile consumer content and services segment.

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Content Provider Agreements with Telcos As of December 31, 2016, the Company is a party to content provider agreements with all three of the Philippines leading Telcos, namely, Smart Communications, Inc., Globe Telecom Inc. and Sun Cellular. Under these arrangements, the Company is primarily responsible for conceptualizing, designing, sourcing, generating, and maintaining (including, where necessary, de-bugging) mobile consumer content and services that its client Telco may avail of for distribution to or access, subscription or use by its mobile phone subscribers. On the other hand, the client Telco shall be responsible for all costs incurred in maintaining and operating its telecommunications network, as well as the billing and collection of the fees prescribed by the Telco for access, subscription or use of the mobile consumer content and services paid for by the Telco’s mobile phone subscribers. Access or subscription fees payable for access or subscription to the Company’s mobile consumer content are paid exclusively through a mobile subscriber’s outstanding mobile airtime credits, and payment of such fees is made by a subscriber by crediting a short code (which is a specific network access code assigned by the Telco to the Company) with the corresponding amount of mobile airtime credit. For instance, a mobile subscriber who wishes to subscribe to a news service offered by the Company, subscription to which is available for a price of P=2.50, will need to send an instruction by SMS to the Telco through the short code (in the form of brief text commands) to debit his or her outstanding mobile airtime credit with the amount of P=2.50. All access or subscription fees paid (or deemed paid) by the mobile subscriber are received and collected by the Telco. In consideration for providing mobile consumer content and services (or access to such content, as for example, licensed content such as music or videos) to the client Telco, the Company receives a share in the revenues derived by the Telco from the fees paid by its mobile phone subscribers to the Telco to access, subscribe to or use such mobile consumer content and services. This share may vary depending on the type of content or service provided by the Company, but is typically equivalent to at least 50% of such access, subscription or usage fees, and is distributed to the Company by the Telco on a monthly basis. For the year ended December 31, 2016, the Group’s total revenue and net income from its mobile consumer products business were P=1,239.92 million and P=285.63 million, respectively, while total revenue and net income from its mobile consumer products business for the year ended December 31, 2015 amounted P=576 million and P=217 million, respectively. Enterprise Services The Company develops, on its own or in close collaboration with other technology companies, mobile platform solutions for the benefit of clients such as Telcos, government agencies, and other top-tiered companies. These products, which are tailored to a client’s particular requirements and are used by millions of mobile subscribers at any given time, comprise the Company’s enterprise services segment and include mission-critical applications such as customized call/SMS/data bundles, peer-to-peer mobile airtime credit transfers and various forms of mobile commerce. The Company, through its subsidiaries, develops and customizes information technology platforms, provides system integration, mobile platform consultancy, manages off-the-shelf application and social media-related services. Enterprise Services also includes information technology staff augmentation and various enterprise solutions-based services to Telcos and other companies for network and applications development. For the year ended December 31, 2016, the Company’s total revenue and net income from its enterprise business were P=653.14 million and P=76.47 million, respectively, while total revenue and

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net income from its enterprise business were P=243.45 million and P=41.51 million, respectively, for the year ended December 31, 2015. Other Services The Company, through its subsidiary Storm, provides HR technology solutions to its clients. Storm developed a proprietary online platform which allows employees of any company that has signed with Storm to exchange his or her current employee benefits and transform them into products and services such as mobile phones, gadgets, or financial training services, called ‘Flex Ben.' Storm also offers the same service for employees who are rewarded with points for accomplishing set milestones or objectives by their employer, called ‘Kudos.’ The Company’s subsidiary designs, develops, and customizes the HR technology platforms and streamlines the logistical requirements for product and service fulfillment. For the year ended December 31, 2016, the Company’s total revenue and net loss from its other services were P=54.07 million and P=36.49 million, respectively. While for the year ended December 31, 2015, the Company’s total revenue and net loss from its other services were P=78.87 million and P=28.81 million. Competition For its mobile consumer content development business, the Company competes with over 100 mobile consumer content providers. However, the Company believes that its primary competitors comprise the internal mobile consumer content development divisions of its own client Telcos and other companies such as Information Gateway, Inc., Chikka Philippines, Inc., ABS-CBN Mobile, GMA New Media, Inc., G-Gateway, Zed, Wolfpac and Rising Tide. Chikka Philippines, Inc. is the mobile consumer content development division of Smart Communications and generates and provides the latter with mobile consumer content and services. On the other hand, ABS-CBN Mobile and GMA New Media, Inc. primarily provide access or subscription to licensed or unlicensed content such as music, videos and other content of similar nature associated with, produced or distributed by their affiliated mass media networks. For its mobile marketing and advertising solutions business, the Company considers the following as competitors: TradeMob, Fiksu, Mobvista, Glispa, and Avazu. For its enterprise development business, which now includes Seer and Yondu, the Company considers Stratpoint, Pointwest, and Novare, as its main competitors, providing outsourced web and mobile applications development services or cloud services for their clients. Primary competitors of Yondu's Information Technology (IT) staffing solutions business segment are 77 Global, K-Force, Tech Mahindra, Amdocs, Sysgen and other medium-scale IT companies. For the Company’s other services, which refers to the flexible benefits and performance benefits business of Storm, the main competitor is Takatack Rewards. INTELLECTUAL PROPERTY As the Company creates, develops and maintains substantially all of its mobile consumer content, the Company owns and holds exclusive rights to its entire product portfolio, excluding mobile consumer content in the form of licensed content such as music, videos and other content of a similar nature, which it licenses through third party licensors and which represent only 1% of its business. Platforms Key intellectual property of the Company includes the Griffin SMS Gateway program, which is a proprietary platform developed by the Company through which the Company deploys mobile applications through any telecommunications network protocol. The Griffin SMS Gateway program is built on a modular architecture and is written in Java, an industry standard programming language that

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allows the program to be deployed using most common operating systems, with the following key features:

• The Griffin SMS Gateway allows the Company to connect to any of its client Telco’s SMS center, which represents the heart of any Telco’s wireless network handling all SMS operations, such as routing, forwarding and storing SMS messages, using popular protocols.

• The Griffin SMS Gateway contains a “Multi-Function Middleware” feature that allows the Company to interface with its client Telco’s “Intelligent Network”, which is the network that allows a Telco to offer value-added services to its mobile subscribers on top of its standard services (voice and call services) through UCIP or Diameter, MMSCs via MM7, or billing systems via proprietary SOAP-XML or other proprietary HTTP-based protocols.

• The Java API of the Griffin SMS Gateway allows the Company’s application developers to write code that can easily be integrated or deployed across multiple carriers that may have different systems.

Key Intellectual Property of Yondu includes Mobile360 SMS, which is a proprietary platform developed through which it delivers mobile services through various telecommunications connectivities. The Mobile360 SMS platform is built on a modular architecture and is written using industry standard programming languages with the following key features:

• The Mobile360 SMS platform allows the Company to create, process, and analyze SMS services through connectivities with partner Telcos’ wireless network.

• The Mobile360 SMS platform allows the Company to provide SMS connectivity to third-

party independent developers, software development houses, solutions integrators, and content providers through APIs that can be incorporated into their codes.

• The Do-It-Yourself feature of the Mobile360 SMS platform allows the Company to enable its clients to gain control over their SMS campaigns and services in terms of content, schedule and customer reach.

Trademarks The Company likewise owns exclusive rights to its corporate name, as well as various brand names and marks that are used for its operations. Provided below is the summary of all marks registered in the name of the Company or any of its subsidiaries:

Holder Mark Registration Number

Date Filed Date Registered

Xurpas Inc. XUPERGAMES 42016004317 April 25, 2016 October 10, 2016 Xurpas Inc. SELFIE.PH 42014009255 July 25, 2014 June 25, 2015 Xurpas Inc. #HAPPYTUMMY 42014009263 July 25, 2014 May 28, 2015 Xurpas Inc. #OOTD 42014014894 December 32, 2014 April 9, 2015 Xurpas Inc. #NOMNOMNOM 42014009262 July 24, 2014 December 12, 2015 Xurpas Inc. #SWAG 42014009261 July 25, 2014 February 2, 2015 Xurpas Inc. GRAB-A-GOLD 42014009260 July 25, 2014 December 11, 2014 Xurpas Inc. FLUXION 42014009259 July 25, 2014 December 11, 2014 Xurpas Inc. PLAYSMART 42014009254 July 25, 2014 December 11, 2014 Xurpas Inc. #TBT 42014009258 July 25, 2014 December 11, 2014 Xurpas Inc. #FOODPORN 42014009256 July 25, 2014 December 11, 2014 Xurpas Inc. #SELFIE 42014009257 July 25, 2014 December 11, 2014 Xurpas Inc. CRAZYWIRELESS 42007004775 May 11, 2007 October 8, 2008 Xurpas Inc. Xurpas 42007004775 May 11, 2007 October 8, 2007

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Xeleb Technologies Inc.

Xeleb 42015005359 May 19, 2015 October 19, 2015

Xeleb Technologies Inc.

Trivia Time with Kuya Kim

42016004316 April 25, 2016 December 22, 2016

Xeleb Inc. Trip ni Belle 42016004318 April 25, 2016 October 20, 2016 Xeleb Inc. Adventures of Kuya

Kim 42015005361 May 19, 2015 February 25, 2016

Xeleb Inc. Market Master 42015005362 May 19, 2015 November 19, 2015 Xeleb Inc. Anne-Galing 42015005360 May 19, 2015 November 19, 2015 REGULATION AND KEY LICENSES The Company’s primary business, that is, the development and delivery of mobile consumer content to its client Telcos, is considered as a form of value-added services regulated by the NTC under the Public Telecommunications Policy Act and related implementing regulations issued by the NTC. While a value-added services provider (unlike other entities regulated under the Public Telecommunications Policy Act) is not required to obtain a franchise to operate, the NTC requires that any such provider obtain and maintain a Value-Added Services (VAS) License, which shall expressly indicate the value-added services that such provider is authorized to provide. Under existing regulations, the following services may be rendered by a holder of a VAS License:

• SMS and MMS Content Provider (cute texts, news, jokes, forwardable quotes, horoscopes, tips, chat, trivia, twitter and stickers)

• Mobile Tones (true tones, ringback tones, and text tones) • Games (GrabaGold, Games with Friends, Let’s Playsmart, Anne Galing, Market Master

Erwann, Trip ni Belle, Sarah G Popsters, Adventure of Kuya Kim, Aldub You) • Mobile Promotions and Services for Consumer Brands and Third Party Corporate Clients

The Company holds a VAS License issued by the NTC valid until January 3, 2021, pursuant to which the Company is authorized to engage in all of the foregoing value-added services. The Company believes that its relationship with its employees is generally good and, since the start of its operations, the Company has not experienced a work stoppage as a result of any labor or labor-related disagreements. None of the Company’s employees belong to a union. The table below sets forth the breakdown of the Company’s labor complement, grouped according to function, as of December 31, 2016:

Executives ............................................................................................................................................... 7 Accounting, Finance, Human Resources and Administrative ................................................................ 13 Marketing ................................................................................................................................................ 20 Technical Staff ........................................................................................................................................ 60

Total ........................................................................................................................................................ 100

The Company has adopted a rewards and recognition policy that is competitive with industry standards in the Philippines. Salaries and benefits are reviewed periodically and adjusted to retain current employees and attract new talents. Tied to these is a performance management system that calls for the alignment of individual key results, competencies, and development plans with the Company’s overall business targets and strategy. Performance is reviewed periodically and employees are rewarded based on the attainment of pre-defined objectives. The Company also maintains programs for its employees’ professional, technical and personal development.

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As the Company intends to expand its operations both within the Philippines and the Southeast Asia Region, the Company expects to grow its labor complement and engage additional personnel to accommodate its expanded operations. PLANS AND PROSPECTS The Company intends to grow its mobile consumer content and services by: (i) integrating the products and services of its investments and acquisitions to enhance its current mobile consumer offerings and to create content platforms, (ii) implementing strategic acquisitions of existing mobile consumer content, enterprise and applications developers and proprietary technologies, and (iii) expanding operations within the Southeast Asia region to grow its sales of mobile consumer content to a broader range of customers, including Telcos within the region. The Company made two substantial acquisitions in 2016, Micro Benefits Limited (“Micro Benefits”) and Art of Click Pte. Ltd. (“AOC”):

Micro Benefits Limited – Xurpas acquired a 23.53% stake in Micro Benefits at a price of USD10 million. Micro Benefits is a Hong-Kong based company providing innovative mobile HR solutions to Fortune 500 companies in China, through its wholly-owned subsidiary, Micro Benefits Financial Consulting (Su Zhou) Co. Ltd. Art of Click Pte. Ltd. – Xurpas acquired 100% stake in AOC, a company registered under the laws of Singapore and engaged in the business of mobile media agency that offers a marketing platform for advertisers.

On March 23, 2016, Xurpas Enterprise Inc. (“XEI”), a wholly owned subsidiary of Xurpas, was incorporated to ensure that Xurpas has a team dedicated on the growth of its enterprise business. 2016 was Xurpas’ signal to evolve from being a product-focused to being a platform-centric company. Through its acquisitions, it has entered markets in Asia and Southeast Asia. The Company intends to integrate into one platform all of its products and services to offer to its clients and to the public. Integrating content from investments to become platform-focused The Company continues to create its own mobile consumer products, and at the same time, enhances its offerings for the mobile consumer segment by integrating them with the products and services of its investments and acquisitions. The Company is focused on creating and launching new mobile consumer content, particularly casual games, regularly. These activities may require hiring more talent and developers who can ensure that these deliverables are met and released on time. While the Company is currently monetizing on their own products and services, it plans to create content platforms and partner with other third party content providers. Enhancement of content creation capabilities and enterprise solutions Depending on the opportunities presented, the Company will continue to make meaningful investments and partnerships intended to create and provide proprietary technologies and content to improve its ability to create, develop and distribute content within the Philippines and the Asian Region and to expand its existing product and services portfolio. For this purpose, the Company aims to work with, invest in, or acquire other local or international technology companies with content, capabilities, and technologies consistent with the Company’s over-all market strategy. Regional expansion of points of distribution

The Company intends to expand its ability to distribute its existing and new mobile consumer content

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to emerging markets in the Southeast Asia region, which represent a mobile subscriber population of over one billion, excluding the Philippines. These markets present conditions similar to the Philippine mobile market, as these markets feature rising internet and smartphone penetration and its mobile subscriber populations are predominantly under prepaid arrangements. Among other strategies, the Company plans to establish content provider arrangements with Telcos operating within the Southeast Asia region to offer, develop, distribute and market its mobile products and services to such Telcos’ mobile subscribers.

As the Company’s mobile products and services have passed the highest standards of Philippine Telcos and its mobile enterprise platforms and applications are widely considered as network or carrier-grade, the Company believes that it is in a strong position to expand its operations outside the Philippines and to offer its existing portfolio to Telcos within the Southeast Asia region. To do so, the Company intends to undertake operations within the Southeast Asia region by opening regional offices or, depending on prevailing market conditions and the regulatory and business environments, by implementing strategic acquisitions of existing mobile consumer content developers with an established presence or relationship with major Telcos in the region.

As the Company’s new HR technology and IT outsourcing businesses from acquired companies started contributing to total revenues, the Company plans to expand their ability to distribute their products and services to new customers in Southeast Asia and East Asia to reach new corporate customers. To do this, the Company intends to undertake operations within Southeast Asia and East Asia region. Through key partnerships with existing or new investments, the Company may reach new markets that operate in similar conditions to the Philippine HR and IT outsourcing market. ITEM 2. Properties The Company does not hold any real property of material value. As of December 31, 2016, the Company has transportation, office equipment, IT equipment, furniture and fixtures, leasehold improvements and leased assets with a net book value of P=80.53 million. As the manpower complement increases in the next 12 months, IT and office equipment are expected to increase correspondingly. The Company’s offices are presently located at the 4th and 7th Floors, Cambridge Centre, 108 Tordesillas St., Salcedo Village, Makati City, Philippines, which is leased by the Company from Gervel, Inc. Operating Lease Commitments

a. The Parent Company entered into a lease contract with Gervel, Inc. for an office space (7th Floor Cambridge Centre Building) for a period of three years commencing on April 1, 2014 and expiring on March 31, 2017. The lease contract may be renewed in writing by mutual agreement of the parties. The applicable rate per month is P=0.20 million and a corresponding increase of 5% on the third year of the lease.

b. The Parent Company executed another agreement with Gervel, Inc. to lease the 4th Floor of Cambridge Centre Building commencing October 1, 2015 to March 31, 2017. The contract can be renewed in writing upon mutual agreement by the parties. The applicable rate per month is P=0.20 million and a corresponding increase of 5% on the third year of the lease.

ITEM 3. Legal Proceedings There are no material pending legal proceedings (including any bankruptcy, receivership or similar proceedings) to which the Company or any of its subsidiaries is a party or to which any of their material assets are subject.

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ITEM 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during the fourth quarter of the calendar year covered by this report.

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PART II - OPERATIONAL AND FINANCIAL INFORMATION ITEM 5. Market for Issuer's Common Equity and Related Stockholder Matters Market Information Principal market where the registrant’s common equity is traded. Xurpas’ common shares were listed with the Philippine Stock Exchange, Inc. on December 2, 2014. The high and low stock prices for 2015 and 2016 and the 1st quarter of 2017 are indicated below:

High Low 2017 1st Quarter 10.50 7.09 2016 4th Quarter 15.12 7.11 3rd Quarter 18.18 13.38 2nd Quarter 20.00 14.80 1st Quarter 18.90 11.40 2015 4th Quarter 17.24 14.10 3rd Quarter 14.46 8.93 2nd Quarter 11.20 8.40 1st Quarter 12.60 9.30

The market capitalization of the Company’s common shares as of end-2016, based on the closing price of P=7.99/share, was approximately P=14.85 billion versus P=26.18 billion the previous year.1 The price information of Xurpas’ common shares as of the close of the latest practicable trading date, April 11, 2017, is P=10.28. Holders There are eighteen (18) registered holders of common shares, as of March 31, 2017 (based on number of accounts registered with the Stock Transfer Agent).2

Stockholder’s Name Number of shares Percentage to total Nationality PCD Nominee Corp. (Filipino)3

1,203,379,579 64.21 Filipino

PCD Nominee Corp. (Non-Filipino)

316,043,283 17.14 Others

Raymond Gerard S. Racaza 174,100,010 9.32 Filipino Fernando Jude F. Garcia 174,100,010 9.32 Filipino Rogina C. Guda 6,000 0 Filipino Aquilina V. Redo 5,000 0 Filipino Dahlia C. Aspillera 2,900 0 Filipino

1 Xurpas has 1,856,952,746 outstanding common shares as of March 31, 2017. 2 Based on the list of stockholders issued by BDO Unibank Inc. Stock and Investment Group, list includes PCD Nominees. 3 PCD Nominee Corp. (Filipino) includes: a) Xurpas (10,687,400) [treasury shares]); b) Mr. Nico Jose S. Nolledo (415,765,950); c) Raymond Gerard S. Racaza (241,665,950); d) Fernando Jude F. Garcia (241,665,950)

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Mercedita S. Nolledo 1,060 0 Filipino Wilfredo O. Racaza 1,060 0 Filipino Joselito C. Herrera 500 0 Filipino Frederick D. Go 500 0 Filipino Dondi Ron R. Limgenco 111 0 Filipino Philip &/or Elnora Turner 99 0 British-Indian Nico Jose S. Nolledo 10 0 Filipino Jonathan Gerard A. Gurango 10 0 Filipino Alvin D. Lao 10 0 Filipino Owen Nathaniel S. AUITF: Li Marcus Au

3 0 Filipino

Joselito T. Bautista 1 0 Filipino Total 1,867,640,146 100% Filipino

Dividends and Dividend Policy Information on the Company’s declaration of dividends follow: Parent Company Per Share Total Amount Record Date Payable Date

Cash dividend declared on: May 10, 2016 0.048 86.27 million May 31, 2016 June 23, 2016 April 29, 2015 0.40 68.80 million May 14, 2015 June 2, 2015 September 20, 2014 0.56 36.00 million June 30, 2014 September 30, 2014 June 5, 2014 0.47 30.25 million December 31, 2013 June 30, 2014 November 18, 2013 5.13 16.67 million September 30, 2013 November 29, 2013 July 22, 2013 1.03 3.33 million June 30, 2013 July 31, 2013 May 6 2013 0.83 2.70 million December 31, 2012 May 31, 2013 March 13, 2013 3.08 10.00 million December 31, 2012 March 31, 2013

Stock dividend declared on: July 10, 2014 0.95 shares 61.25 million September 20, 2014 September 20, 2014 May 5, 2014 18.85 shares 61.25 million May 5, 2014 May 5, 2014 The Company has adopted a dividend policy pursuant to which stockholders may be entitled to receive, upon declaration by the Company’s Board of Directors and subject to the availability of the unrestricted retained earnings, dividends equivalent to at least 30% of the prior year’s net income after tax based on the Company’s audited consolidated financial statements as of such year, except when: (i) justified by definite corporate expansion projects or programs approved by the Board; or (ii) when the Company is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or (iii) when it can be clearly shown that retention of earnings is necessary under special circumstances obtaining in the Company, such as when there is a need for special reserves for probable contingencies. The Company cannot provide assurance that it will pay any dividends in the future. In making a decision to declare dividends, the Board may consider various factors including the Company’s cash, gearing, return on equity and retained earnings, the results of its operations or the Company’s financial condition at the end of the year and such other factors as the Board may deem appropriate. The Company's Board may, at any time, modify such dividend payout ratio depending upon the results of operations and future projects and plans of the Company.

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Recent sales of unregistered or exempt securities including recent issuance of securities constituting an exempt transaction 1. Overnight Top-up Placement – April 26, 2016

On April 26, 2016, the Board of Directors of Xurpas approved the holding of a Placing and Subscription Transaction (“the Overnight Top-up Placement”) wherein Messrs. Nico Jose S. Nolledo, Raymond Gerard S. Racaza and Fernando Jude F. Garcia (the “Selling Shareholders”) sold an aggregate of 155,400,000 common shares (the "Offer Shares") to investors (the “Placing tranche”) and the Selling Shareholders subscribed to an aggregate of 77,700,000 common shares (the "Subscription Shares") or 4.32% of the new issued and outstanding capital shares of the Company (“Subscription tranche”). The first part of the Overnight Top-up Placement consists of the offer and sale of the Offer Shares by the Selling Shareholders to (i) Qualified institutional investors in the Philippines qualified as an exempt transaction in reliance on Section 10.1(c) and 10.1(l) of the Philippine Securities Regulation Code (the “SRC”); (ii) outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”); and (iii) within the United States to “qualified institutional buyers” as defined in, and in reliance on, Rule 144A under the Securities Act. SB Capital Investment Corporation and Decker & Co., LLC are the Joint Global Coordinators and led the selling syndicate in placing the Offer Shares with investors. The second part of the Overnight Top-up Placement consists of the subscription by each Selling Shareholder to 1.4% of the Company’s total issued and outstanding capital shares, in the form of new shares issued out of the authorized capital stock of the Company at a subscription price equivalent to the Offer Price. Xurpas claimed exemption from registration under Section 10.1(e) and (k) of the Securities and Regulation Code.

2. Acquisition of Art of Click Pte. Ltd (“AOC”) – October 6, 2016

On October 6, 2016, Xurpas signed a Share Purchase Agreement with Emmanuel Michel Jean Allix and Wavemaker Labs Pte. Ltd. (the "Sellers") for the acquisition of 100% stake in AOC, a company registered under the laws of Singapore and engaged in the business of mobile media advertising that offers a marketing platform for advertisers. The aggregate consideration to be paid by Xurpas is approximately US$45 million. The consideration consists of both cash and common shares of Xurpas (“Xurpas Shares”). The consideration is further broken down as follows:

First Tranche: On October 6, 2016, upon signing of the Share Purchase Agreement, Xurpas shall pay: A) Emmanuel Michel Jean Allix US$2,797,106 in cash and US$14,823,436 worth of Xurpas

Shares B) Wavemaker Labs Pte. Ltd US$4,628,303 worth of Xurpas Shares C) Art of Click Pte. Ltd. US$2,202,894 in cash Second Tranche: One year after signing of the Share Purchase Agreement, Xurpas shall pay: Emmanuel Michel Jean Allix US$1,696,467 worth of Xurpas Shares Wavemaker Labs Pte. Ltd. US$384,130 worth of Xurpas Shares. Third Tranche: Two years after signing of the Share Purchase Agreement, Xurpas shall pay: Emmanuel Michel Jean Allix US$1,130,978 worth of Xurpas Shares Wavemaker Labs Pte. Ltd US$256,087 worth of Xurpas Shares. Fourth Tranche

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Three years after signing of the Share Purchase Agreement, Xurpas shall pay: Emmanuel Michel Jean Allix US$1,696,467 worth of Xurpas Shares Wavemaker Labs Pte. Ltd US$384,130 worth of Xurpas Shares

The number of shares to be issued shall be computed on a 30-day weighted average according to terms of payment provided above. The 30-day weighted average shall be based on the average market value of Xurpas shares 15 days before and 15 days after Closing Date, October 6, 2016. The number of shares to be issued and applied for listing for the second, third and fourth tranches shall be computed based on the average market value of Xurpas shares 15 days before and 15 days after the date corresponding to the 4th month prior to the applicable commitment dates below:

Release / Commitment

Dates Computation of 30-day weighted average

Second Tranche October 6, 2017 Market value of X shares 15 days before and 15 days

after June 6, 2017 (4th month prior to October 6, 2017)

Third Tranche October 6, 2018 Market value of X shares 15 days before and 15 days after June 6, 2018 (4th month prior to October 6, 2018)

Fourth Tranche October 6, 2019 Market value of X shares 15 days before and 15 days after June 6, 2019 (4th month prior to October 6, 2019)

The Company has filed an Application for confirmation of availability of exemption for 69,939,486 common shares. Xurpas is claiming exemption under Section 10.1 (k) of the Securities and Regulation Code because the issuance of said common shares to the Sellers constitutes sale of securities by an issuer to fewer than 20 persons in the Philippines. ITEM 6. Management's Discussion and Analysis or Plan of Operation. Summary

In ! Millions Years ended December 31 Increase (2016 vs 2014)

2016 2015 2014 % Revenues 1,969.89 921.22 392.22 402% Gross Profit 829.26 536.71 278.35 198% Income before Income Tax 426.92 331.10 239.14 79% Net Income 304.89 229.62 190.72 60% Revenues Mobile Consumer Services 1,239.92 576.06 309.37 301% Enterprise Services 653.14 243.45 68.95 847%

For fiscal year 2014 versus fiscal year 2016, total revenues of the Group grew 402% from !392.22 million in 2014 versus !1.969.89 million in 2016. Likewise, revenues from the major segments – mobile consumer services, and enterprise services – increased by 301% and 847%, respectively. Gross profit increased by 198% over the same period from !278.35 million in 2014 to !829.26 in 2016. Income before income taxes increased by 79% and net income grew by 60%.

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For the year ended December 31, 2016 compared with the year ended December 31, 2015

Amount Percentage Amount Percentage

Mobile consumer services 1,239,924 63% 576,055 63% 663,869 115%Enterprise services 653,143 33% 243,451 26% 409,692 168%Other services 54,071 3% 78,868 9% (24,797) -31%Interest income 3,025 0% 9,435 1% (6,409) -68%Other income 19,730 1% 13,409 1% 6,321 47%Total Revenues 1,969,894 100% 921,218 100% 1,048,676 114%

Cost of Services 1,098,820 56% 314,695 34% 784,126 249%Cost of Goods Sold 41,818 2% 69,812 8% (27,993) -40%Gross Profit 829,256 42% 536,712 58% 292,544 55%General and Administrative Expenses 368,435 19% 196,132 21% 172,303 88%Equity in Net Loss of Associate 33,902 2% 9,479 1% 24,423 258%Income Before Income Tax 426,918 22% 331,101 36% 95,818 29%Provision for Income Tax 122,025 6% 101,483 11% 20,542 20%Net Income 304,893 15% 229,618 25% 75,275 33%

Core Net Income 329,837 17% 229,618 25% 100,219 44%EBITDA 485,492 25% 351,047 38% 134,445 38%

Total Assets 2,500,230 74%Total Liabilities 249,750 14%Total Equity 2,250,480 144%

In PhP ThousandsRevenues

Key Financial Data 2016 2015

3,814,231 1,563,752

Amount Change % Increase

For the 12 months ended December 31

December 31, 2016Amount

5,894,603 2,080,372

December 31, 2015Amount

3,394,373 1,830,622

% IncreaseAmount Change

The net income of the Group for the twelve-month period ended December 31, 2016, increased by 33% (from !229.62 million in year ended 2015 to !304.89 million in 2016). Core net income over the same period increased by 44%. EBITDA increased by 38% to !485.49 million in 2016 from !351.05 million the previous year. The Group’s revenues were mainly driven by mobile consumer services, comprising 63% of 2016 revenues. In 2015, the Group acquired and invested in a number of companies at different periods of the year. Its largest acquisition in 2015 was Yondu Inc. at !900.00 million, which was completed on September 15, 2015. In October 6, 2016, Xurpas disclosed that it acquired 100% of Art of Click Pte. Ltd at an aggregate consideration of approximately US$45.00 million. The ramp-up of expenses during the full year of 2016 was due to the Group’s various investments, acquisitions, and on-going product and platform development. While the Group’s business increased as of December 31, 2016, the full accretive value of its investments in 2015 and 2016 have not yet materialized in that year, thus its net income did not grow at the same pace as service revenue. Total revenues increased by !1,048.68 million or 114% for the comparable period, from !921.22 million in 2015 to !1,969.89 million in 2016. Partial effects of new revenue segments from investments and acquisitions in 2015 were realized in 2016. These new revenue segments refer to enterprise solutions and services from Yondu and Seer, and to the HR technologies services of Storm. The Group’s total cost of services increased by 249% from !314.70 million for year ended 2015 to !1,098.82 million for the comparable period in 2016. Cost of goods sold attributable to other services was !41.82 million for year ended December 31, 2016 compared to !69.81 million in 2015, a decrease of 40% or !27.99 million. Gross profit margins on total revenues, for the twelve month

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period ended December 31, 2016 was at 42%, a decrease from the same period last year at 58%. However, in absolute amount, gross profit increased by 55% from !536.71 million for the year ended 2015 to !829.26 million for the same period in the year ended 2016. General and administrative expenses increased by 88%, from !196.13 million for the year ended 2015 to !368.44 million for the same period in 2016. Overall, the increase was mainly due to the costs related to the Group’s expansion: (i) absorption of operating expenses of acquired subsidiaries made in 2015 and 2016, (ii) increase in salaries and wages due to organizational build-up of the parent company and acquired subsidiaries, and (iii) investment and acquisition-related costs and legal fees, the latter being non-recurring. Included in the general and administrative expenses were increase in non-cash expenses such as depreciation and amortization related to capitalization costs, as well as non-cash interest expenses related to the recognition of liability for a written put option. The Company also shares in the recorded net loss of the associate companies it has invested in, which amounted to !33.90 million for the period ended December 31, 2016. Provision for taxes during the year ended 2016 was !122.03 million or 20% higher than the same period in 2015 at !101.48 million; due which is attributed to the higher income before tax. Overall, the net income for the Group increased from !229.62 million for the year ended 2015 to !304.89 million over the same period in 2016 reflecting an increase of 33%. Core net income which excludes the non-recurring expenses amounting to !35.63 million, was at !329.84 million or an increase of 44% over the previous period. Consolidated total assets as of December 31, 2016 amounted to !5,894.60 million, an increase of 74% from !3,394.37 million as of December 31, 2015 which is attributed to the overnight top-up placement of the Parent Company's common shares in April 26, 2016. The net increase of !2,500.23 million in total assets was mainly brought by the !1,350.74 million increase in intangible assets, !431.72 million increase in investment in associates, !255.60 million increase in financial assets at FVPL and !222.58 million in Accounts and other receivables. Consolidated total liabilities increased by 14% from !1,830.62 million as of December 31, 2015 to !2,080.37 million in December 31, 2016, due mainly to the recognition of written put option contingent liability in 2016. Consolidated total equity increased by 144% over the same period, from !1,563.75 million to !3,814.23 million, which was mainly a result of the additional paid-in capital from the overnight top-up placement. Segment Financial Performance As of December 31, 2016 In !

Mobile Consumer Services

Enterprise Services

Other Services

Intersegment Adjustments Consolidated

Revenue from services 1,326,703,575 658,468,960 3,392,600 (92,105,104) 1,896,460,031 Revenue from sale of goods - - 50,678,833 50,678,833 Equity in net loss of associates (33,902,387) - - (33,902,387)

Operating expenses (911,506,522) (562,014,463)

(102,935,274) 67,382,472 (1,509,073,787)

Operating profit 381,294,666 96,454,497 (48,863,841) (24,722,632) 404,162,690 Interest and Other income 26,575,356 8,006,762 486,078 (12,312,667) 22,755,529 Provision for income tax (113,643,698) (27,994,957) 11,890,178 7,723,493 (122,024,984) Net Income 294,226,324 76,466,302 (36,487,585) (29,311,806) 304,893,235 As of December 31, 2016 prior to intersegment adjustments, mobile consumer services’ revenues, operating profit and net income prior to eliminations were !1,326.70 million, !381.29 million and !294.23 million, respectively. These translated to 29% operating profit margin and 22% net income margin. Enterprise services had operating profit of !96.45 million (operating profit margin of 15%) and net income of !76.47 million (net income margin of 11%) from revenues of !658.47 million. The other services segment has yet to yield a positive contribution to the Group. Profitability

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For the year ended December 31, 2016 compared with the year ended December 31, 2015 Revenues The consolidated revenues of the Group for the period ended December 31, 2016 amounted to !1,969.89 million, an increase of 114% from !921.22 million the same period of the previous year. The service income component of total revenues is comprised of the following segments:

Segment Description Subsidiaries Mobile consumer services

Revenues ultimately derived from providing Mobile consumer services via the Telcos, as well as mobile marketing and advertising solutions integrated in mobile casual games and platforms

• Xurpas Parent Company • Xeleb Inc. • Yondu Inc. • Art of Click Pte. Ltd.

Enterprise services Revenues derived from the provision of mobile platform solutions to corporate and government clients, information technology (IT) staff augmentation and consultancy services, various enterprise solutions-based services to Telcos and other companies for network, platform and applications development

• Xeleb Technologies Inc. • Seer Technologies Inc. • Yondu Inc.

Other services Revenues derived from services related to the proprietary platform called “Flex Benefits System” and “Kudos” which allows employees to convert their employee benefits to other benefits which includes sale of goods

• Storm Technologies Inc.

Revenues from the mobile consumer services segment for the year ended December 31, 2016 amounted to !1,239.92 million, an increase of 115% from the previous year’s same period level of !576.06 million. This segment accounts for 63% of the total revenues. On the other hand, revenues from enterprise services (which accounts for 33% of total revenues) increased by 168% in December 31, 2016, to !653.14 million from !243.45 million in December 31, 2015. Other services booked revenues of !54.07 million in December 31, 2016, lower by 31% from the previous level at !78.87 million over the same period last year. The decrease in revenues from Storm was due to the longer-than-expected sales cycle, which has resulted in delayed implementation and revenue generation. Interest income as of December 31, 2016 amounted to !3.03 million or 68% lower vis-à-vis the !9.44 million from the same period in 2015. Interest income was derived from the interest generated by the Group from its cash deposits in banks and cash equivalents. Other income which includes placements on financial assets at FVPL as of December 31, 2016 amounted to !19.73 million or 47% higher vis-à-vis the !13.41 million from the same period in 2015.

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Expenses

Amount Percentage Amount PercentageExpenses

Cost of Services 1,098,820 73% 314,695 54% 784,125 249%Cost of Goods Sold 41,818 3% 69,812 12% (27,994) -40%General and Administrative Expenses 368,435 24% 196,132 34% 172,303 88%Total Expenses 1,509,074 100% 580,639 100% 928,435 160%

In PhP Thousands 2016 2015 Amount Change % Increase

For the 12 months ended December 31

As of the full year of 2015, Xurpas had as subsidiaries: Fluxion, Inc. (now registered with SEC as Xeleb Technologies Inc.), Storm Technologies Inc. (formerly Storm Flex Systems, Inc.), Xeleb Inc., Seer Technologies Inc. and Yondu Inc. In contrast, the full year of 2016 now also includes Art of Click. The Group’s consolidated expenses during the period ended December 31, 2016 amounted to !1,509.07 million, a 160% increase from the same period of the previous year at !580.64 million. For the full year of 2016, cost of services accounted for the bulk of expenses, totaling !1,098.82 million or 73% of the Group’s consolidated expenses. For the same period in 2015, cost of services amounted to !314.70 million or 54% of overall expenses of !580.64 million. Cost of Services

Amount % Amount %Cost of Services

Salaries, wages and employee benefits 486,897 44% 164,988 52% 321,910 195%Outsourced services 368,534 34% 36,539 12% 331,995 909%Segment fee and network costs 97,065 9% 55,100 18% 41,966 76%Others 146,323 13% 58,068 18% 88,255 152%Total Expenses 1,098,820 100% 314,695 100% 784,126 249%

For the 12 months ended December 31In PhP Thousands 2016 2015 Amount

Change% Increase

Cost of services totaling !1,098.82 million for the full year of 2016, was mainly driven by expenses relating to (1) Salaries, wages, and employee benefits, (2) Outsourced services, and (3) Segment fee and network costs, which accounted for 44%, 34%, and 9%, respectively. These costs were directly borne from rendering mobile consumer services, enterprise services, and other services to the Group’s clients for the full year of 2016. Of the total cost of services for the period, 77% is attributable to new subsidiaries. Of the outsourced services in 2016, 84% was attributable to AoC. In comparison, as at the full year of 2015 cost of services (!314.70 million) was broken down into 52% salaries, wages, and employee benefits, 12% outsourced services, and 18% segment fee and network costs. Cost of Goods Sold For the period ended December 31, 2016, cost of goods sold took up 3% of the Group’s consolidated expenses, amounting to !41.82 million. This figure was a decrease of 40% from its level at !69.81 million in December 31, 2015. The decrease in cost of goods sold was directly attributable to the decrease in revenues of Storm Technologies Inc. Costs related to the sale of goods from its flexible benefits and performance programs were appropriated as cost of goods sold. General and Administrative Expenses

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Amount Percentage Amount PercentageGeneral and Administrative Expenses

Salaries, wages and employee and benefits 126,488 34% 66,933 34% 59,554 89%Professional fees 43,307 12% 19,253 10% 24,053 125%Repairs and maintenance 6,925 2% 9,202 5% (2,276) -25%Rent 30,630 8% 10,739 5% 19,891 185%Others 161,086 44% 90,006 46% 71,081 79%Total Expenses 368,435 100% 196,132 100% 172,303 88%

For the 12 months ended December 31In PhP Thousands 2016 2015 Amount

Change % Increase

General and administrative expenses relating to the Group’s operations, for full year ended December 31, 2016 amounted to !368.44 million, higher by 88% compared to previous year’s same period level of !196.13 million. Salaries, wages, and employee benefits was !126.49 million or 34% of the total general and administrative expenses (GAEX). The same expenses amounted to !66.93 million for the same period in 2015. The next biggest cost component in December 31, 2016 was professional fees amounting to !43.31 million or 12% of total GAEX. The increase in the GAEX was primarily brought about by the consolidation of operational expenses from newly acquired subsidiaries, which contributed 52% of the total. Equity in Net Loss of Associates The equity of the Group in the net loss of its associate companies for the full year ended December 31, 2016, amounted to !33.90 million. These companies are still in their testing phase or are in the process of ramping up or commercializing their operations. Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA)

In ! thousands

For the 12 months ended December 31

2016 2015 Amount Change

% Increase

Income before tax 426,918 331,101 95,818 29% Depreciation and amortization 45,556 14,334 31,222 218% Interest expense 13,018 5,612 7,406 132%

485,492 351,047 134,563 38%

The Group’s EBITDA increased by 38% in December 31, 2016 to !485.49 million from !351.05 million the same period of the previous year. Depreciation and amortization of property and office equipment and intangible assets amounted to !45.56 million as at December 31, 2016 from !14.33 million as at December 31, 2015. Of the net increase of !31.22 million, !29.20 million was from the depreciation of IT equipment and amortization of developed software. Interest expense increased by 132% from !5.61 million for the full year of 2015 to !13.02 million for the full year of 2016. Of this amount, !11.52 million was non-cash interest expense from the liability for a written put option. Income before Income Tax The Group’s net income before taxes for year ended December 31, 2016 was 22% of total revenues or a figure of !426.92 million. The net income before taxes for the Group grew 29% from the same period ended December 31, 2015, which posted a figure of !331.10 million.

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Provision for Income Tax Provision for income tax during the year ended December 31, 2016 amounted to !122.03 million, compared to the same period in 2015, where provision for income tax was !101.48 million; a 20% increase. Net Income The Group posted a consolidated net income of !304.89 million for the full year of 2016, an increase of 33% from the previous year’s same period at !229.62 million. Despite the Group’s continuing organizational build-up, acquisition, investment-related expenses during this period versus that on December 31, 2015 the robust revenues generated a net income margin of 15% for the full year of 2016. Core Net Income As of December 31, 2016, core net income which excludes the non-recurring expenses amounting to !35.63 million, was at !329.84 million or an increase of 44% over the previous period. Financial Position As of December 31, 2016 compared to December 31, 2015 Assets Cash and Cash Equivalents The Group’s consolidated cash and cash equivalents amounted to !428.52 million for the year ended December 31, 2016, a net increase of 40% or !122.63 million from consolidated cash and cash equivalents of !305.89 million as at December 31, 2015. On April 2016, the Parent Company’s overnight top-up placement raised !1,243.20 million in equity funds. Accounts Receivable The Group’s consolidated accounts receivable amounted to !956.90 million and !734.32 million as at December 31, 2016 and December 31, 2015, respectively, representing an increase of 30% or !222.58 million. In December 31, 2016, trade receivables were valued at !933.66 million, whereby Yondu Inc. and AoC accounted for !419.60 million (45% of the total) and !330.62 million (35% of the total), respectively. Financial Assets at Fair Value through Profit or Loss The total Net Asset Value (NAV) and fair value of the Fund as at December 31, 2016 and December 31, 2015 was !335.92 million and !80.32 million, respectively. Part of the funds raised by the Parent Company after the overnight top-up placement was placed in the SB Money Market Fund while waiting for the appropriate use of the proceeds. The SB Money Market Fund was invested in a diversified portfolio of primarily short-term fixed income instruments. Available for Sale Financial Assets

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As of December 31, 2016, the Group’s available for sale financial assets amounted to !108.43 million. As of December 31, 2016, the Group’s investment in convertible bonds issued by Einsights Pte. Ltd., Pico Candy Pte. Ltd, MatchMe, and Altitude Games were at !23.48 million, !3.60 million, !52.50 million and !28.86 million, respectively. Other Current Assets The Group’s consolidated other current assets totaled !52.63 million, an increase of !8.33 million or 19% from its previous level on December 31, 2015 at !44.30 million. Prepaid expenses and Input VAT comprised majority of other current assets. Available for Sale Financial Assets-net of current portion As of December 31, 2016, the Group’s available for sale financial assets amounted to !44.54 million, which decreased by !23.42 million from its previous level on December 31, 2015. These are the investments in Zowdow, Inc. (formerly Quick.ly Inc) at !44.24 million and Club Punta Fuego at !0.30 million. The decrease in 2016 was attributable to the convertible bonds issued by Einsights Pte. Ltd (!23.48 million) that was reclassified to Available for Sale Financial Assets current portion. Investment in Associates As of December 31, 2016, the Group’s consolidated Investment in Associates amounted to !534.53 million, a 420% increase from its figure of !102.81 million in December 31, 2015. The breakdown of the carrying amounts of these investments are: Altitude Games Pte. Ltd. (!27.84 million), Altitude Games Inc. (!0.35 million), MatchMe Pte. Ltd. (!56.19 million), PT Sembilan Digital Investama (!8.20 million), and Micro Benefits Limited (!441.95 million). Property and Equipment The Group’s consolidated Property and Equipment was !80.53 million in December 31, 2016 vis-à-vis !58.18 million in December 31, 2015, or an increase of 38%. This was a result of adding !50.30 million worth of said assets in the period ended December 31, 2016. Depreciation expense amounted to !26.28 million in the full year ended December 31, 2016. Property and Equipment mainly consisted of leasehold improvements, information technology equipment, furniture and fixtures, and leased assets. Intangible Assets Intangible assets of !3,239.02 million as at December 31, 2016 were recognized in relation to the Group’s acquisitions and investments. The amortized amount was !19.28 million or 1.02% of the December 31, 2015 figure at !1,888.28 million. The major components are customer relationship, goodwill, developed software, and leasehold rights. • Goodwill pertains to excess of the acquisition cost over the fair value of the identifiable assets and

liabilities of companies acquired by the Group. As of December 31, 2016, goodwill is at !2,043.38 million.

• Customer relationship pertains to Yondu Inc.’s non-contractual and contractual agreements with Globe Telecom, Inc., its major customer which are expected to generate revenues for the Group in subsequent periods. As of December 31, 2016, customer relationship is valued at !1,077.81 million.

• Developed software pertains to telecommunications equipment software licenses, corporate application software and licenses and other VAS software applications that are not integral to the hardware or equipment. As of December 31, 2016, developed software net book value is at

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!104.78 million. Amortization of developed software for the year ended December 31, 2016 amounted to !16.80 million.

• Leasehold rights pertain to cost savings arising from lower than market rate rental in the lease contracts acquired through business combination. As of December 31, 2016, leasehold rights net book value is at !13.75 million. Amortization of Leasehold rights for the year ended December 31, 2016 amounted to !2.48 million.

Pension Asset The Group’s recorded pension asset as of December 31, 2016 was at !2.39 million, compared to the previous year at nil. Deferred Tax Assets – Net The Group’s consolidated net deferred tax assets level amounted to !55.44 million as at December 31, 2016, higher by 30% vis-à-vis its December 31, 2015 level at !42.52 million. Other Noncurrent Assets Other Noncurrent Assets amounted to !55.76 million As of December 31, 2016. This figure is 7% higher than the value posted as of December 31, 2015 at !52.13 million. This is advances to affiliates and primarily rental deposits amounting to !22.08 million and !20.04 million, respectively. Liabilities Accounts and Other Payables The Group’s consolidated accounts and other payables valued at !413.73 million as of December 31, 2016 was a 77% increase from its December 31, 2015 figure of !233.50 million. The Group’s accounts and other payables consisted mainly of trade payables at !257.61 million (!189.02 million from Art of Click Pte. Ltd.), deferred trade output VAT at !55.60 million (!45.05 million from Yondu Inc.), and accrued expenses at !37.79 million (!35.15 million from Yondu Inc.). Loans Payable – current portion The Group’s loans payable is attributable to the Group’s local bank loans amounting to !3.00 million as of December 31, 2016 compared to !14.00 million in 2015. These interest-bearing, short-term loans are payable in 60 days. Income Tax Payable The Group’s consolidated income tax payable as of December 31, 2016 amounted to !64.44 million, an increase of 64% from the December 31, 2015 figure of !39.24 million. Liability for Written Put Option Based on PAS 32, Financial Instruments: Presentation, “…a contract that contains an obligation for an entity to purchase its own equity instruments for cash or another financial asset gives rise to a financial liability for the present value of the redemption amount.” As such, a liability for the written put option is recognized which is equal to the present value of the amount payable upon exercise of

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the option is to be recognized. This amounts to !864.71 million and !853.18 million, as of December 31, 2016 and December 31, 2015, respectively.

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Contingent Liability The Group recorded !216.40 million in contingent liability as at December 31, 2016 compared to nil the previous year. Other Current Liabilities The Group’s other current liabilities amounted to !127.72 million in December 31, 2016 compared to !289.24 million in 2015, a decrease of 56%. The decrease of !161.52 million was mostly from the decrease in dividends payable (!69.00 million from Yondu Inc. from a carrying amount of !116.49 million in 2016). Loans Payable – non-current portion The Group recorded !14.00 million in non-current loans in December 31, 2016 and 2015. This is attributable to the loans of Seer Technologies Inc. which are interest-bearing, long-term (more than 360-days), and collateralized against Seer Technologies Inc.’s trade receivables. Deferred Tax Liability As of December 31, 2016, the deferred tax liability (net) was at !346.32 million, a decrease of 4% or !14.27 million from !360.59 million as of December 31, 2015. This is primarily the deferred tax liability on fair value adjustment on intangible assets. Finance Lease- net of current portion The Group entered into a lease agreement with BPI Leasing Corporation for the use of IT and transportation equipment with a lease term three (3) and five (5) years, respectively. Effective monthly interest rates range from 0.83% to 1.12%. The Group’s finance lease net of current portion is !1.16 million in December 31, 2016 compared to nil in 2015. Pension Liability The accrued pension of the Group is at !28.91 million, which was a 29% or !11.97 million decrease from December 31, 2015 levels at !40.87 million. The decrease in pension liability was a result of Yondu Inc.’s pension contribution to its retirement plan fund during the month of April 2016 and from organizational restructuring that Xeleb Technologies Inc. (formerly Fluxion, Inc.) undertook, which lessened the amount of pension accrued. Equity Total Equity The Group’s total equity As of December 31, 2016 was at !3,814.23 million, a 144% increase from its December 31, 2015 level at !1,563.75 million. On April 29, 2016, the Parent Company issued and subscribed 77.70 million shares with par value of !0.10 for a total consideration of P=1,243.20 million or P=16.00 per share. The excess of subscription price over paid-up capital was recognized as additional paid-in capital. The net increase in total equity was a result of additional paid-in capital of !3,343.12 million, increase of !169.07 million in retained earnings, and increase of !14.76 million in capital stock as of December 31, 2016. Likewise, As of December 31, 2016, equity reserve of

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!892.22 million was recorded pertaining to the liability for written option. On November 14, 2016, the Parent Company commenced its share buyback program following its Board approval for the allotment of !170.00 million on November 9, 2016. As at December 31, 2016, treasury stocks acquired totaled to 8,532,900 shares which amounted to !71.51 million. Non-controlling interests were at !830.17 million in December 31, 2016, an 8% increase from its figure in December 31, 2015 at !771.52 million. Liquidity and Capital Resources The Group’s liquidity is primarily driven by Cash Flows from Operating Activities and cash reserves. The Group knows of no demands, commitments, events, or uncertainties that are reasonably likely to result in a material increase or decrease in liquidity. The Group is current on all of its accounts. The Group has minimal bank debt through Seer Technologies Inc. which is short term in nature. The Group does not anticipate having any cash flow or liquidity problems over the next 12 months. The Group is not in breach or default on any loan or other form of indebtedness. Cash Flows

In ! For the 12 months ended December 31 Key Financial Data 2016 2015 Net cash used in Operating Activities (4,888,447) (7,933,530) Net cash used in Investing Activities (887,019,435) (559,675,619) Net cash provided by (used in) Financing Activities 1,009,409,732 (84,178,026) Effect of foreign currency exchange rate changes 5,130,801 (245,051) Net increase in cash 122,632,651 (652,032,226) Cash at beginning of period 305,885,002 957,917,228 Cash at end of period 428,517,653 305,885,002

Cash Flows Provided by Operating Activities For the full year of 2016, operating income of !511.40 million was coupled with the corresponding increase in account receivables and the decrease in account payables for a resulting !153.31 million net cash generated from operations. Together with interest received and income taxes paid, this resulted in a net cash used for operating activities of !4.89 million. Cash Flows Used in Investing Activities The Group’s consolidated cash flows used in investing activities for subsidiaries and associates for the full year of 2016 was !887.02 million compared to !559.68 million in the same period of 2015. The cash used in investing activities were mostly from the purchase of investment in associate, specifically Micro Benefits Limited in 2016. The investment in Micro Benefits Limited together with its other fees amounted to !469.78 million. Cash Flows Used in Financing Activities The Group’s consolidated net cash flow provided by financing activities for the full year ended December 31, 2016 was !1,009.41 million, compared to !84.18 million net cash flow used as of December 31, 2015. For the year 2016, consolidated net cash flow provided by financing activities was attributable mainly to the issuance of new common shares worth !1,243.20 million, net loan availments amounting to !3.00 million, and dividends paid amounting to !86.78 million.

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Capital Expenditure The Group’s capital expenditures through business combinations and regular means, for the year ended December 31, 2016 and the year ended December 31, 2015 amounted to !50.93 million and !57.77 million, respectively.

December 31, 2016

Additions December 31, 2015

Additions Key Financial Data

(!) Business Combination Regular Business

Combination Regular

Office Equipment 0.05 2.33 0.53 1.63 IT Equipment 0.51 15.06 16.06 6.51 Furniture and Fixtures 0.07 7.12 1.00 1.74 Leasehold Improvements - 23.98 23.94 3.43 Leased Asset - 1.81 2.86 - Transportation Equipment - - 0.08 - Total 0.63 50.30 44.46 13.31

Commitments and Contingent Liabilities The Group recorded contingent liabilities at !216.40 million as at December 31, 2016 and nil for the previous year. On acquisition of investment, the excess of the cost of investment over the investor’s share in the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities is accounted for as goodwill and included in the carrying amount of the investment and not amortized. Key Performance Indicators The following are the key performance indicators of the Group and its majority-owned subsidiaries:

2016 2015 2014Liquidity Ratios

Current Ratio 119% 83% 1242%Quick Ratio 115% 80% 1238%

Asset-to-Equity Ratio 198% 428% 111%Profitability Ratios

Net Income Margin 13% 25% 49%Gross Margin 41% 57% 71%Operating Margin 25% 39% 61%Return on Total Assets 6% 9% 12%Return on Equity 14% 19% 13%

In Percentage

For the years ended December 31

Current Ratios Current Ratio and Quick Ratios in December 31, 2016 were 119% and 115%, respectively, an increase from their respective 83% and 80% figures during the full year of 2015. The increase in both ratios was primarily from the significant increase in current assets of the Group for that period vis-à-vis the increase in current liabilities.

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Asset-to-Equity Ratio The decrease in the asset-to-equity ratio from 428% in December 31, 2015 to 198% in December 31, 2016 resulted from the large increase in equity, particularly additional paid-in capital and retained earnings. The increase in additional paid-in capital was a result of the April 2016 issuance and subscription of shares. Profitability Ratios Profitability margins decreased from December 31, 2015, as a result of business combination and expenses related to the Group’s investments and acquisitions. The decrease in Gross Profit Margin (41%), Net Income Margin (13%), Operating Margin (25%), Return on Total Assets (6%) and Return on Equity (14%) was a result of the increase in overall expenses as a direct result of the Parent Company’s expansion and acquisitions: the absorption of operational expenses of the acquired subsidiaries, expansion of operations offshore, salaries and wages paid to the Group’s new employees for its organizational build-up program; and payment of professional and legal fees incurred from investments and acquisitions. The manner by which the Company calculates the foregoing indicators is as follows:

Current Ratios 1. Current ratio Current assets

Current liabilities

2. Quick ratio Current assets – Other current assets Current liabilities Asset-to-equity Ratio Total assets Total equity attributable to Parent Company Profitability Ratios

1. Net income ratio Net income attributable to Parent Company Service income

2. Gross margin Service income - Cost of services Service income

3. Operating margin Earnings before interest, tax, depreciation and amortization

Service income

4. Return on total assets Net income attributable to Parent Company Average total assets

5. Return on total equity Net income attributable to Parent Company

Average total equity attributable to the Parent Company

Other Disclosures:

i. Liquidity. There are no known trends, events, or uncertainties that will result in the Group’s liquidity increasing or decreased in a material way.

ii. Events that will trigger Direct or Contingent Financial Obligation. There are no events that will trigger direct or contingent financial obligations that are material to the Group, including and default or acceleration of an obligation.

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iii. Material Off-balance sheet Transactions, Arrangements, Obligations. Likewise, there were no materials off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the group with unconsolidated entities or other persons created during the reporting period.

iv. Material Commitments for Capital Expenditure. There are no material commitments for capital expenditures.

v. Material Events/ Uncertainties. There are no known trends, events, or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on the Group’s revenues from continuing operations.

vi. Results of Operations. There were no significant elements of income or loss that did not arise from continuing operations.

vii. Seasonality. The effects of seasonality or cyclicality on the operations of the Group’s business are non-material.

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Financial Performance For the year ended December 31, 2015 compared with the year ended December 31, 2014

Summary The net income of the Group for the year ended December 31, 2015, increased by 20% (from !190.72 million in 2014 to !229.62 million in 2015). Core net income (which excludes non-recurring expenses) over the same period increased by 32%. Although group revenues were expected to sustain its increasing trend in 2015 vis-à-vis 2014, net income was not expected to grow at the same pace because of the i) greater expenses as a result of expansion and organizational build-up of the parent company and its other subsidiaries ii) the parent company absorbing its share of the net losses of the technology companies it invested in, many of which are either in their beta testing phase or are in the stage of ramping up their operations iii) market expansion to Indonesia, and iv) higher effective tax rate with the expiration of the income tax holiday of the parent company. Total revenues increased by !529.00 million or 135% for the comparable period, from !392.22 million in 2014 to !921.22 million in 2015. Of the incremental increase in revenues, !266.69 million or 50% was contributed by the mobile consumer services of the Parent Company and Yondu Inc.; !174.50 million or 33% of the net increase was from enterprise services, and !78.87 million or 15% was from other services. The revenue was enhanced by the introduction of new revenue segments as a result of the acquisitions over the past 12 months. These were enterprise services of Yondu Inc. and other services, which refer to the flexible benefits revenues of Storm Technologies Inc. (formerly Storm Flex Systems Inc.) The blended cost of services (aggregating the subsidiaries’ costs) increased by 176% from !113.86 million for the year ended December 31, 2014 to !314.70 million over the same period ended December 31, 2015. Cost of goods sold attributable to other services and benefits rendered from the sale of goods was !69.81 million for the year ended December 31, 2015. Gross profit margins for the year ended December 31, 2015 was at 58%, a decrease from the same period last year at 71%.

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However, in absolute amount, gross profit increased by 93% from !278.35 million for the period ended December 31, 2014 to !536.71 million for the same period in 2015. General and administrative expenses increased by 400%, from !39.21 million for the year ended December 31, 2014 to !196.13 million for the same period in 2015. Overall, the increase was mainly attributed to the costs related to expansion: (i) absorption of the operating expenses of acquired subsidiaries, a number of which are just ramping up their operations, (ii) increase in salaries and wages due to organizational build-up of the parent company and acquired subsidiaries, and (iii) investment and acquisition-related costs and legal fees, the latter being non-recurring. The Company also shares in the net loss of the associate companies it has invested in, which amounted to !9.48 million for full year 2015. Taxes paid for the year ended December 31, 2015 resulted from a full income tax imposed (30%), as the income tax holiday of the Parent Company expired in July 2014. Provision for taxes during the period of 2015 were !101.48 million or 110% higher than the same period in 2014 at !48.42 million. Overall, the net income for the Group increased from !190.72 million for the full year 2015 to !229.62 million over the same period in 2015; an increase of 20%; notwithstanding the expected increase in expenses due to organizational build-up and acquisitions and the full imposition of the 30% corporate income tax. As of December 31, 2015, core net income which excludes the non-recurring expenses amounting to !30.26 million, was at !250.80 million or an increase of 32% over the previous period. Consolidated total assets as of December 31, 2015 amounted to !3,394.37 million, an increase of 105% from !1,654.46 million as of December 31, 2014. The increase was mainly brought about by the intangible assets and goodwill recognized from the Company’s acquisitions. Consolidated total liabilities increased by 1,017% from !163.90 million as of December 31, 2014 to !1,830.62 million as of December 31, 2015, due mainly to the recognition of liabilities arising from Xurpas’ put option pertinent to the acquisition of Yondu Inc. Consolidated total equity increased by 5% over the same period, from !1,490.56 million to !1,563.75 million. Segment Financial Performance As of December 31, 2015 In !000

Mobile Consumer Services

Enterprise Services

Other Services

Intersegment Adjustments Consolidated

Revenues 583,199 243,456 78,868 (7,148) 898,374 Equity in net loss of associates (9,479) - - (9,479) Operating expenses (276,342) (190,411) (117,904) 4,019 (580,638) Operating profit 297,378 53,045 (39,036) (3,129) 308,257 Interest and Other income 33,254 4,939 1,397 (16,745) 22,844 Provision for income tax (96,780) (16,471) 8,834 2,935 (101,482) Net Income 233,852 41,513 (28,805) (16,939) 229,618 As of December 31, 2015, mobile consumer services’ revenue, operating profit and net income prior to eliminations were !583.20 million, !297.38 million, and !233.85 million, respectively. These translated to 51% operating margin and 40% net income margin. Enterprise services had operating profit of !53.05 million (operating profit margin of 22%) and net income of !41.51 million (net income margin of 17%) from revenues of !243.46 million. The other services segment has yet to yield a positive contribution to the Group.

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Profitability For the year ended December 31, 2015 compared with the year ended December 31, 2014 Revenues The consolidated revenues of the Group for the year ended December 31, 2015 amounted to !921.22 million, 135% higher than the previous year’s same period level of !392.22 million. Service Income comprised of the following segments:

Segment Description Mobile consumer services Revenues ultimately derived from providing Mobile consumer services

via the Telcos Enterprise services Revenues derived from the provision of mobile platform solutions to

corporate and government clients, including revenues derived from various enterprise solutions-based services to Telcos and other companies for network, platform and applications development

Other services Revenues derived from services related to the proprietary platform called “Flex Benefits System,” which allows employees to convert their employee benefits to other benefits which includes sale of goods

Amount Percentage Amount Percentage

Mobile consumer services 576,055 63% 309,368 79% 266,687 86% Enterprise services 243,451 26% 68,947 18% 174,504 253%Other services 78,868 7% - 0% 78,868 n.a.Interest income 9,435 1% 1,188 0% 8,247 694%Other income 13,409 2% 12,716 3% 693 5%Total Revenues 921,218 100% 392,219 100% 528,999 135%

% Increase

For the year ended December 31

Revenues

In PhP Thousands 2015 2014 Amount Change

Majority of the service income is still the Mobile Consumer Services segment, which accounted for 63% of the total revenues (!921.22 million) for the full year 2015. Growth of this segment year on year is 86%, from !309.37 million in 2014 to !576.05 million. Enterprise services comprised 26% (!243.45 million) of total revenues in 2016. The other components of service income –enterprise services and other services – contributed !91.51 million (or 10%) and !78.87 million (or 9%), respectively, to total revenues. The enterprise services segment grew by 33%. The incremental revenue is still mainly from the mobile consumer segment which accounted for 50% or !266.69 million of total incremental revenue of !529.00 million. Knowledge process outsourcing (KPO) services contributed !151.95 million or 29% of the net revenue increase. Interest income as of December 31, 2015 amounted to !9.43 million or 694% higher vis-à-vis the !1.19 million from the same period in 2014. Interest income was derived from the interest generated by the Group from its cash deposits in banks and cash equivalents. Other income which includes financial assets at FVPL as of December 31, 2015 amounted to !13.41 million or 5% higher vis-à-vis the !12.72 million from the same period in 2014. Expenses The Group’s consolidated expenses during the year ended December 31, 2015 amounted to !580.64 million, a 279% increase from the same period of the previous year at !153.08 million. The increase in overall expenses can be seen as a direct result of the Parent Company’s expansion and acquisitions:

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• the absorption of operational expenses of the acquired subsidiaries, • salaries and wages paid to the Group’s new employees for its organizational build-up

program; • market expansion to Indonesia; and • payment of professional and legal fees incurred from investments and acquisitions.

It should be noted that part of this period’s acquisition-related costs was non-recurring, resulting from transactions related to the Group’s expansion. For the year ended December 31, 2015, cost of services accounted for the bulk of expenses, totaling !314.70 million or 54% of the Group’s consolidated expenses at !580.64 million. For the same period in 2014, cost of services amounted to !113.87 million or 74% of overall expenses of !153.08 million.

Amount Percentage Amount Percentage Amount Percentage

Cost of Services 314,695 54% 113,865 74% 200,830 47% 176%Cost of Goods Sold 69,812 12% - 0% 69,812 16% n.a.General and Administrative Expenses 196,132 34% 39,214 26% 156,919 37% 400%Total Expenses 580,639 100% 153,078 100% 427,560 100% 279%

For the year ended December 31 2014-2015 % Increase2015 2014 Incremental

In PhP ThousandsExpenses

Cost of Services As shown in the table below, cost of services totaling !314.70 million for the year ended December 31, 2015, were mainly driven by expenses relating to (1) salaries, wages, and employee benefits, (2) Segment fee and network costs, and (3) Outsourced services, which accounted for 52%, 18%, and 12%, respectively, for the year ended December 31, 2015. These costs were borne from rendering mobile consumer services, enterprise services, and knowledge process outsourcing services to the Group’s clients for the year ended 2015. In comparison, the year ended December 31, 2014 cost of services (!113.87 million) was broken down into 37% salaries, wages, and employee benefits, 32% outsourced services, and 15% segment fee and network costs. The termination of the agreement with DSI and the compensation given to the DSI officers absorbed by the Group and managing director/ founder (who is now receiving a regular salary) accounted for a significant portion of the change in composition of the cost of services.

Amount Percentage Amount Percentage Amount Percentage

Salaries, wages and employee benefits 164,988 52% 42,248 37% 122,740 61% 291%Segment fee and network costs 55,100 18% 16,586 15% 38,513 19% 232%Outsourced services 36,539 12% 36,192 32% 347 0% 1%Others 58,068 18% 18,839 17% 39,229 20% 208%

314,695 100% 113,865 100% 200,830 100% 176%

For the year ended December 31 2014-2015 % Increase2015 2014 Incremental

In PhP ThousandsCost of Service

Cost of Goods Sold For the year ended December 31, 2015, Cost of goods sold took up 12% of the Group’s consolidated expenses, amounting to !69.81 million. Cost of goods sold was taken entirely from Storm which was acquired by the Parent Company in end of February 2015. Costs related to the sale of goods from its ‘Flexible Benefits’ programs were appropriated as cost of goods sold. General and Administrative Expenses General and administrative expenses relating to the Group’s day-to-day operations, for the year ended December 31, 2015 amounted to !196.13 million, higher by 400% compared to previous year’s same period level of !39.21 million. Salaries, wages, and employee benefits was !66.93 million or 34% of

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the total general and administrative expenses (GAEX). The same expenses amounted to !11.06 million for the same period in 2014. The next biggest cost component in 2015 was professional fees amounting to !19.25 million or 10% of total GAEX. The increase in the GAEX was primarily brought about by the consolidation of operational expenses from acquired subsidiaries, salaries and wages paid to the Group’s new employees from its organizational build-up program, market expansion to Indonesia, and other expenses related to securing viable acquisitions and investments for the Group, majority of which are legal and tax advisory fees.

Amount Percentage Amount Percentage Amount Percentage

Salaries, wages and employee benefits 66,933 34% 11,057 28% 55,876 36% 505%Professional fees 19,253 10% 7,690 20% 11,563 7% 150%Marketing and promotions 13,527 7% 1,350 3% 12,177 8% 902%Advertising 10,331 5% 1,793 5% 8,538 5% 476%Others 86,088 44% 17,324 44% 68,764 44% 397%

196,132 100% 39,214 100% 156,919 100% 400%

General and Administrative

For the year ended December 31 2014-2015 % Increase2015 2014 Incremental

In PhP Thousands

Equity in Net Loss of Associates The equity of the Group in the net loss of its associate companies, namely: Altitude Games, MatchMe, and SDI, for the year ended December 31, 2015, amounted to !9.48 million. These companies are still in their beta testing stage or are in the process of ramping up their operations. Income before Income Tax The Group’s net income before taxes for the year ended December 31, 2015 was 36% of total revenues or a figure of !331.10 million. The net income before taxes for the Group grew 38% from the same period ended December 31, 2014, which posted a figure of !239.14 million. Provision for Income Tax Provision for income tax during the year ended December 31, 2015 amounted to !101.48 million, compared to 2014, where provision for income tax was !48.42 million; a 110% increase. This significant increase partially resulted from a full income tax imposed (30%) for the period ended December 31, 2015, as the income tax holiday of the Parent Company expired in July 2014. Net Income The Group posted a consolidated net income of !229.62 million for the year ended December 31, 2015, an increase of 20% from the previous year’s same period at !190.72 million. Despite the Group’s continuing organizational build-up, acquisition, investment-related expenses during this period versus that on December 31, 2014 the robust revenues generated a healthy net income margin of 25% for the year ended December 31, 2015. Core Net Income As of December 31, 2015, core net income which excludes the non-recurring expenses amounting to !30.26 million, was at !250.80 million or an increase of 32% over the previous period.

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Financial Position As of December 31, 2015 compared to December 31, 2014 Assets Cash and Cash Equivalents The Group’s consolidated cash and cash equivalents amounted to !305.89 million for the year ended December 31, 2015, a net decrease of 68% or !652.03 million from consolidated cash and cash equivalents of !957.92 million as at December 31, 2014. The decrease was due mainly to investment activities, foremost of which is the acquisition by the Parent Company of 51% of Yondu Inc. Accounts Receivable The Group’s consolidated accounts receivable amounted to !734.32 million and !138.69 million as at December 31, 2015 and December 31, 2014, respectively, representing an increase of 429% or !595.63 million. In December 31, 2015, trade receivables were valued at !717.17 million, whereby Yondu accounts for !663.35 million or 92% of the total. Of such amount, !481.05 million is due from Globe Telecom, Inc. This is expected to be partially offset against the dividends payable by Yondu Inc. to Globe Telecom Inc. amounting to !244.49 million, as of December 31, 2015. Financial Assets at Fair Value through Profit or Loss As at December 31, 2015, the total Net Asset Value (NAV) and fair value of the Fund amounted to !80.32 million. This was an 84% decrease from the 2014 level, as the !500.00 million fund (plus interest) was redeemed to partially fund the acquisition of 51% of Yondu Inc. Subsequently, the Group placed !80.00 million. The change in fair value constituted the increase in financial assets at FVPL amounting to !0.32 million. Available for Sale Financial Assets As of December 31, 2015, the Group’s available for sale financial assets amounted to !17.66 million. As of December 31, 2015, the Group’s convertible bonds invested in Pico Candy Pte. Ltd and MatchMe Pte. Ltd. were at !3.60 million and !14.06 million, respectively. Other Current Assets The Group’s consolidated other current assets totaled !44.30 million, an increase of !38.99 million or 734% from its previous level on December 31, 2014. Deferred input VAT and prepaid expenses comprised majority of other current assets. Available for Sale Financial Assets-net of current portion As of December 31, 2015, the Group’s available for sale financial assets amounted to !67.96 million; a 1,676% increase from the 2014 level of !3.83 million. These are the investments in Einsights Pte. Ltd. (!23.48 million), Zowdow Inc. (formerly Quick.ly, Inc.) (!44.24 million); and Club Punta Fuego (!0.24 million). Investment in Associates As of December 31, 2015, the Group’s consolidated Investment in Associates amounted to !102.81 million, a 209% increase from its figure of !33.22 million during December 31, 2014. The breakdown of the carrying amounts of these investments are: Altitude Games Pte. Ltd (!31.40 million), Altitude

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Games Inc. (!0.11 million), MatchMe Pte. Ltd. (!60.47 million), and PT Sembilan Digital Investama (!10.83 million). Property and Equipment The Group’s consolidated Property and Equipment was !58.18 million, a result of adding !49.27 million worth of said assets in the year ended December 31, 2015. This figure increased by 552% from December 31, 2014 levels at !8.92 million. Property and Equipment mainly consisted of transportation, office, information technology equipment, furniture, and fixtures. The increase during the period was mostly due to the consolidation of the property and equipment of Yondu Inc. which amounts to !39.60 million (net). Intangible Assets Intangible assets of !1,888.28 million were recognized in relation to the Group’s acquisitions and investments. The major components are goodwill, customer relationship, developed software, and leasehold rights. • Goodwill pertains to excess of the acquisition cost over the fair value of the identifiable assets and

liabilities of companies acquired by the Group. As of December 31, 2015, goodwill is at !687.81 million.

• Customer relationship pertains to Yondu’s non-contractual and contractual agreements with Globe Telecom, Inc. its major customer which are expected to generate revenues for the Group in subsequent periods. As of December 31, 2015, customer relationship is valued at !1,077.81 million.

• Developed software pertain to telecommunications equipment software licenses, corporate application software and licenses and other VAS software applications that are not integral to the hardware or equipment. As of December 31, 2015, developed software net book value is at !106.43 million.

• Leasehold rights pertain to cost savings arising from lower than market rate rental in the lease contracts acquired through business combination. As of December 31, 2015, leasehold rights net book value is at !16.23 million.

Deferred Tax Assets – Net The Group’s consolidated net deferred tax assets level amounted to !42.52 million as at December 31, 2015, higher by 756% vis-à-vis its December 31, 2014 level at !4.97 million. Other Noncurrent Assets Other Noncurrent Assets amounted to !52.13 million as of December 31, 2015. This figure is 4,318% higher than the value posted as of December 31, 2014 at !1.18 million. This is primarily rental deposits amounting to !16.95 million or 33% of total. Liabilities Accounts and Other Payables The Group’s consolidated accounts and other payables valued at !233.50 million as of the year ended December 31, 2015 was a 119% increase from its December 31, 2014 figure of !106.43 million. The Group’s accounts and other payables consisted mainly of trade payables at !91.02 million (of which !68.12 million is attributed to Yondu Inc.); and deferred output VAT at !74.51 million (Yondu Inc. at !63.57 million).

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Loans Payable The Group’s loans payable is attributable to Seer Technologies Inc.’s local bank loans amounting to !14.00 million as of December 31, 2015. These are interest-bearing, short-term, and collateralized by Seer Technologies Inc.’s trade receivables. Such loans are payable in 60 days, but subject to renewal. Income Tax Payable The Group’s consolidated income tax payable as of December 31, 2015 amounted to !39.24 million, an increase of 74% from the December 31, 2014 figure of !22.61 million. Of the total, !20.03 million is attributed to the Parent Company and !16.56 million is attributed to Yondu Inc. Liability for Written Put Option Based on PAS 32, Financial Instruments: Presentation, “…a contract that contains an obligation for an entity to purchase its own equity instruments for cash or another financial asset gives rise to a financial liability for the present value of the redemption amount.” As such, a liability for the written put option is recognized which is equal to the present value of the amount payable upon exercise of the option is to be recognized. This amounts to !853.18 million, as of December 31, 2015. Other Current Liabilities As of December 31, 2015, other current liabilities was at !289.24 million. This is primarily the dividend payable to the previous owner of Yondu and advances from customers of Storm which amounted to !253.49 million and !32.94 million, respectively. Deferred Tax Liability As of December 31, 2015, the deferred tax liability (net) was at !360.59 million which is a 3,810% increase from the 2014 level of !9.21 million. This is primarily the deferred tax liability on fair value adjustment on intangible assets. Pension Liability The accrued pension of the Group is at !40.87 million, which is a 59% increase from the !25.65 million recognized in 2014. In 2014, only the pension liabilities pertaining to the Parent Company and Xeleb Technologies Inc. (formerly Fluxion, Inc.) were recognized; but as of December 31, 2015, those of Seer Technologies Inc. and Yondu Inc. were included. Equity Total Equity The Group’s total equity as of December 31, 2015 was at !1,563.75 million, a 5% increase from its December 31, 2014 level at !1,490.56. The net increase in total equity was a result of the increase in retained earnings by !152.26 or 155% million in the year of December 31, 2015 from December 31, 2014. Likewise, as of December 31, 2015, equity reserve of !848.50 million was recorded pertaining to the liability for written option. Noncontrolling interests were at !771.52 million. Liquidity and Capital Resources The Group’s liquidity is primarily driven by Cash Flows from Operating Activities and cash reserves. The Group knows of no demands, commitments, events, or uncertainties that are reasonably likely to result in a material increase or decrease in liquidity. The Group is current on all of its accounts The Group has minimal bank debt through Seer Technologies Inc. which is short term in nature. The

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Group does not anticipate having any cash flow or liquidity problems over the next 12 months. The Group is not in breach or default on any loan or other form of indebtedness. Cash Flows

In ! For the 12 months ended December 31 Key Financial Data 2015 2014 Net cash provided by(used in) Operating Activities (7,933,530) 202,807,585 Net cash used in Investing Activities (559,675,619) (526,449,030) Net cash provided by (used in) Financing Activities (84,178,026) 1,195,051,562 Effect of foreign currency exchange rate changes (245,051) 4,436 Net increase in cash (652,032,226) 871,414,553 Cash at beginning of period 957,917,228 86,502,675 Cash at end of period 305,885,002 957,917,228

Cash Flows Provided by Operating Activities For the full year of 2015, a strong operating income of !355.99 million was coupled with the corresponding increase in account receivables and the decrease in account payables for a resulting !138.33 million net cash generated from operations. Together with interest received and income taxes paid, this resulted in a net cash used for operating activities of !7.93 million. Cash Flows Used in Investing Activities The Group’s consolidated cash flows used in investing activities for acquisitions and associates for the years ended December 31, 2015 and 2014 amounted to !559.68 million and !526.45 million, respectively. Cash Flows Used in Financing Activities The Group’s consolidated net cash flow used in financing activities for the years ended December 31, 2015 amounted to !84.18 million; compared to the net cash provided in 2014 of !1,195.05 million. For the year ended December 31, 2015, consolidated net cash flow used in financing activities was attributable mainly to the payment of cash dividends amounting to !77.55 million and to the principal payment Storm Technologies Inc.’s (formerly Storm Flex Systems, Inc.) loans payable amounting to !6.63 million. Capital Expenditure The Group’s capital expenditures for the years ended December 31, 2015 and December 31, 2014 amounted to !57.76 million and !7.45 million, respectively. Please note that in 2015, there were additions to capital expenditure due to business combination.

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December 31, 2014Key Financial DataIn PhP ThousandsTransportation Equipment 77 - - Office Equipment 528 1,629 1,418 IT Equipment 16,055 6,510 1,185 Furniture and Fixutres 995 1,736 488 Leasehold Improvements 23,941 3,430 4,356 Leased Asset 2,860 - - Total 44,456 13,305 7,448

Additions through business combination Additions (regular)

December 31, 2015

Additions (regular)

Commitments and Contingent Liabilities The Group has no contingent liabilities for the years ended December 31, 2015 and for the year ended December 31, 2014. Key Performance Indicators The following are the key performance indicators of the Group and its majority-owned subsidiaries:

2015 2014Liquidity Ratios

Current Ratio 83% 1242%Quick Ratio 80% 1238%

Asset-to-Equity Ratio 428% 111%Profitability Ratios

Net Income Margin 25% 48%Gross Margin 57% 70%Operating Margin 39% 64%Return on Total Assets 9% 20%Return on Equity 19% 23%

For the years ended December 31

In Percentage

Current Ratios Current Ratio and Quick Ratios in the full year of 2015 were 83% and 80%, respectively, a decrease from their respective 1242% and 1238% figures during full year of 2014. The decrease in both ratios was primarily from the increase in current liabilities of the Group for that period due to the recognition of a liability for the written put option. This was substantially greater than the net decrease of the current assets. Asset-to-Equity Ratio The increase in the asset-to-equity ratio from 111% in December 31, 2014 to 428% in December 31, 2015 resulted from the increase in equity, particularly retained earnings. The increase in net income of the Group drove the increase in retained earnings in December 31, 2015. Profitability Ratios Profitability margins decreased from December 31, 2014, as a result of business combination and expenses related to the Group’s investments and acquisitions. The decrease in Gross Profit Margin (57%), Net Income Margin (25%), Operating Margin (39%), Return on Total Assets (9%) and Return

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on Equity (19%) was a result of the increase in overall expenses as a direct result of the Parent Company’s expansion and acquisitions: the absorption of operational expenses of the acquired subsidiaries, salaries and wages paid to the Group’s new employees for its organizational build-up program; and payment of professional and legal fees incurred from investments and acquisitions. In addition, the Parent Company also shares in the net loss of the associate companies it has invested in. Finally, the income tax holiday of the Parent Company expired on July 2014, which accordingly resulted in full income corporate tax rate of 30%. The manner by which the Company calculates the foregoing indicators is as follows:

Current Ratios 1. Current ratio Current assets

Current liabilities

2. Quick ratio Current assets – Other current assets Current liabilities Asset-to-equity Ratio Total assets Total equity attributable to Parent Company Profitability Ratios

1. Net income ratio Net income attributable to Parent Company Service income

2. Gross margin Service income - Cost of services Service income

3. Operating margin Earnings before interest, tax, depreciation and amortization

Service income

4. Return on total assets Net income attributable to Parent Company Average total assets

5. Return on total equity Net income attributable to Parent Company

Average total equity attributable to the Parent Company

Other Disclosures:

i. Liquidity. There are no known trends, events, or uncertainties that will result in the Group’s liquidity increasing or decreased in a material way.

ii. Events that will trigger Direct or Contingent Financial Obligation. There are no events that will trigger direct or contingent financial obligations that are material to the Group, including and default or acceleration of an obligation.

iii. Material Off-balance sheet Transactions, Arrangements, Obligations. Likewise, there were no materials off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the group with unconsolidated entities or other persons created during the reporting period.

iv. Material Commitments for Capital Expenditure. There are no material commitments for capital expenditures.

v. Material Events/ Uncertainties. There are no known trends, events, or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on the Group’s revenues from continuing operations.

vi. Results of Operations. There were no significant elements of income or loss that did not arise from continuing operations.

Seasonality. The effects of seasonality or cyclicality on the operations of the Group’s business are non-material.

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ITEM 7. Financial Statements Please see the attached consolidated financial statements and schedules listed in the accompanying Index to Financial Statements and Supplementary Schedules. ITEM 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no changes in and disagreements with accountants on accounting and financial disclosure. Independent Public Accountants, External Audit Fees and Services The consolidated financial statements of the Group as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014 were audited by SGV & Co., independent auditors, in accordance with Philippine Standards on Auditing (PSA). SGV & Co. has acted as the Group’s independent auditors since 2008. Jessie D. Cabaluna is the current audit partner for the Group and has served as such since 2013. The Company has not had any material disagreement on accounting and financial disclosure with SGV & Co. for the periods stated above or during interim periods. SGV & Co. has neither shareholdings in the Company nor any right, whether legally enforceable or not, to nominate persons or to subscribe to the securities of the Company. 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. In relation to the audit and review of the Company’s annual consolidated financial statement, the Audit Committee shall, among other activities, (i) evaluate significant issues reported by the external 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 external auditors is not in conflict with their functions as external auditors; and (iii) ensure the compliance of the Company with acceptable auditing and accounting standards and regulation. The aggregate fees billed for each of the last two calendar years for professional services rendered by the external auditor were !880,000 and !800,000 for 2016 and 2015, respectively. The audit fees for 2017 are estimated to be at !968,000. Services rendered include the audit of the financial statements and supplementary schedules for submission to SEC, tax consultancy and assistance in the preparation of annual income tax returns. The Audit Committee recommends to the Board of Directors the appointment of the external auditor and the fixing of the audit fees. The Board of Directors and stockholders approve the Audit Committee’s recommendation.

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PART III - CONTROL AND COMPENSATION INFORMATION ITEM 9. Directors and Executive Officers of the Issuer BOARD OF DIRECTORS AND EXECUTIVE OFFICERS The overall management and supervision of the Company is undertaken by the Board. The Board is composed of seven members, two of whom are independent directors. The term of a director is one year from date of election and until their successors are elected and qualified. As of December 31, 2016, the composition of the Company’s Board is as follows:

Name Age Citizenship Position Year

Position was Assumed

Nico Jose S. Nolledo 40 Filipino Chairman and Chief Executive Officer 2001

Raymond Gerard S. Racaza 39 Filipino Director, President and Chief Operating Officer 2001

Fernando Jude F. Garcia 43 Filipino Director and Chief Technology Officer 2001

Mercedita S. Nolledo 74 Filipino Director 2001 Wilfredo Oposa Racaza 68 Filipino Director 2001 Jonathan Gerard A. Gurango 59 Filipino Independent Director 2014

Alvin D. Lao 45 Filipino Independent Director 2014 Each of the Company’s directors was elected to the Board during the Company’s annual stockholders’ meeting held on May 11, 2016. Each director shall remain in office until the next annual meeting of the stockholders of the Company or his or her removal or resignation as may be allowed under law. The table below sets forth the Company’s executive officers in addition to its executive directors listed above as of December 31, 2016:

Name Age Citizenship Position Jose Vicente T. Colayco 47 Filipino Treasurer and Chief Business

Development Officer Alfonso A. Tagaysay 43 Filipino Chief Marketing Officer Alexander D. Corpuz 50 Filipino Chief Finance Officer Mark S. Gorriceta 39 Filipino Corporate Secretary and Chief Legal

Officer The following discussion presents a brief description of the business experience of each of the Company’s directors and executive officers. Nico Jose S. Nolledo, Filipino, 40, Chief Executive Officer and Chairman of the Board since 2001 Mr. Nolledo is the Chairman and Chief Executive Officer of Xurpas Inc.4 He is also the Philippine venture partner of Wavemaker Partners, a member of the Draper Network which gives him a pulse on the latest innovations in global technology. Mr. Nolledo is the first Filipino Entrepreneur chosen by the Endeavour network. He is also the Ernst and Young’s 2015 Philippine Entrepreneur of the year and was chosen as one of the Top Outstanding Young Men (“TOYM”) in the Philippines in 2015. Mr. Nolledo holds a Bachelor of Science degree in Management from Ateneo de Manila University. 4 The largest listed consumer technology company in Southeast Asian Stock Exchange as of December 31, 2016.

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Raymond Gerard S. Racaza, Filipino, 39, President, Chief Operating Officer and Director of the Company since 2001. Mr. Racaza is a co-founder and currently the President and Chief Operating Officer of the Company. He is also the Chairman, President and Chief Executive Officer of Xeleb Technologies Inc. He is responsible for the overall business operations of the Company, such as carrier-relationship management, marketing, product design, and other core Company services. Before founding the Company, he was a Senior Solutions Consultant of Wireless Internet Solutions, Inc. and was part of the original development team of iAyala that built the first Wireless Application Protocol (WAP) site in the Philippines. In 2016, Mr. Racaza was recognized as Executive of the Year in the consumer non-durables category of the International Business Awards. Mr. Racaza holds a Bachelor of Science degree in Computer Science, Major in Information Technology from De La Salle University. Fernando Jude F. Garcia, Filipino, 43, Chief Technology Officer and Director of the Company since 2001. Mr. Garcia is a co-founder of the Company and has been its Chief Technology Officer since 2001. He served as Corporate Secretary of the Company until December 2014. He created the Company’s Griffin Platform, the mobile consumer content gateway and platform for all of the Company’s mobile consumer content products and services. He also created the Company’s modular middleware system that can easily integrate with any modern billing gateway. He is the chief engineer responsible for the Company’s software architecture and systems integration. Examples of such systems and protocols are the following: SMS (CIMD2/EMI-UCP/SMPP), MMS (EIAF/MM7), Voice Services (SIP), Billing/IN (Diameter/UCIP/ParlayX2.1), Security (IPSEC), Publish-subscribe Systems and Video Streaming (RTMP/HLS). He is also responsible for architecting the Company’s fully Cloud-based system infrastructure. Before founding the Company, he was a software developer in iAyala. Mr. Garcia holds a Bachelor of Science degree in Applied Physics from the University of the Philippines in Diliman, Quezon City. Wilfredo O. Racaza, Filipino, 68, Director of the Company since 2001. Mr. Racaza has 45 years of marketing and finance experience under his belt. He was the head of New Business Development in Mobil Oil Philippines for 15 years. He is currently an insurance executive in Manulife Financial Philippines for the last 29 years up to present. He has garnered numerous accolades and awards such as multiple Branch of the Year awards and consistent agency sales awards. He has been a consistent awardee in the General Agents and Managers Association (GAMA) of the Philippines from 2003 to 2014. Mr. Racaza holds a Bachelor of Science in Commerce Degree Major in Accountancy from Xavier University in Cagayan de Oro City. Mercedita S. Nolledo, Filipino, 74, Director of the Company since 2001. Atty. Nolledo is currently a director of Bank of the Philippine Islands, BPI Family Savings Bank and BPI Capital Corporation, Anvaya Golf and Nature Club, Inc., Honda Cars Makati, Inc., Automotive Isuzu Dealership, Iconic Dealership, Inc. and Ayala Automotive Holdings. She is the Chairman of BPI Investment Management Corporation. She is currently an independent director of D&L Industries, Inc. She is a member of the Board of Trustees of Ayala Foundation, Inc. and BPI Foundation, Inc. She has served as a director of Cebu Holdings, Inc. from 1993 to 2006 and of Ayala Corporation from 2004 to 2010. Atty. Nolledo was formerly Corporate Secretary and General Counsel of the Ayala Group of Companies and the Senior Managing Director of the Ayala Corporation. She served as Executive Vice President, director and Corporate Secretary of Ayala Land, Inc. and as the firm’s Treasurer. Atty. Nolledo placed second in the Certified Public Accountant exams in 1960 and also placed second in the 1965 bar exams. She holds a Bachelor of Science degree in Business Administration, magna cum

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laude, from the University of Philippines. Atty. Nolledo holds a Bachelor of Laws degree, cum laude, from the University of the Philippines. Jonathan Gerard A. Gurango, Filipino, 59, Independent Director of the Company since 2014. Mr. Gurango has a solid track record in forming and running successful software companies. He founded Match Data Systems (MDS) in Seattle, USA in 1987, MDS Philippines in 1991, and MDS Australia in 1996. In 1999, he sold MDS to Great Plains Software, which was acquired by Microsoft in 2001. Mr. Gurango served as the Asia Pacific Regional Director for Microsoft Business Solutions, before he left in 2003 to form Gurango Software. In 2007, he was inducted into the Hall of Fame for Microsoft's Most Valuable Professionals, in recognition of his mastery of software technology and business. In 2006, the Philippine Center for Entrepreneurship acknowledged him as one of the country's Ten Most Inspiring Technopreneurs. In addition to leading Gurango Software as the most successful Microsoft Dynamics partner in the Philippines, he has co-founded several other software start-ups such as SPRING.ph, and is currently the President of the Philippine Software Industry Association. Mr. Gurango studied Industrial Engineering at the University of the Philippines, Diliman, Quezon City. He also studied Electrical Engineering at the University of Washington, Seattle, Washington, USA. Alvin D. Lao, Filipino, 45, Independent Director since 2014. Mr. Lao is the President and the Chief Executive Officer of D&L Industries, Inc. He is currently an Independent Director of Xeleb Technologies Inc. He is also the Chief Financial Officer and Treasurer of Chemrez Technologies Inc. He serves as Director of Axis REIT, a real estate investment trust listed in Malaysia and as a Vice President of the Technology Club of the Philippines (Philippine alumni of the Massachusetts Institute of Technology), and is a past president and current member of the Entrepreneurs Organization (EO, Philippine Chapter). He is also a member of the Financial Executives Institute of the Philippines (FINEX) and the Wallace Business Forum. He is a director of Enderun Colleges, Gurango Software Corporation, First in Colours, Incorporated, D&L Polymer and Colours, Incorporated, FIC Tankers Corporation, Ecozone Properties, Inc., Anonas LRT Property and Dev’t Corp., and Hotel Acropolis, Inc. He graduated from the University of Western Australia with a Bachelor of Science degree in Information Technology (Honours) and Statistics. He also holds a Masters degree in Business Administration from the MIT Sloan School of Management. Jose Vicente T. Colayco, Filipino, 47, Chief Business Development Officer of the Company since 2014 and Treasurer of the Company since 2016. Mr. Colayco is currently the Chief Operating Officer of Xeleb Technologies Inc. Before joining the Company, Mr. Colayco was the co-founder and co-managing director of Digital Storm, Inc., a developer of online casual game platforms. He was the President of 888 Creative Studios (a subsidiary of Information Gateway, Inc.) from 2004 to 2010, during which time he led the management of relationships with foreign and local licensors from the music, motion picture and game industries. He also served as Managing Director for EMI Music Philippines and Marketing Director for Sony Music Philippines. He holds a Bachelor of Arts degree in Philosophy and Religious Studies from Brown University, Magna Cum Laude. He obtained his Masters in Business Administration from Harvard Business School in Boston, Massachusetts. Alfonso A. Tagaysay, Filipino, 43, Chief Marketing Officer of the Company since 2014. Mr. Tagaysay has 16 years of experience in the mobile consumer content industry, managing mobile companies operating in various South East Asian markets: Philippines, Indonesia, Malaysia and Bangladesh. Before joining the Company, he was the co-founder and co-managing director of Digital Storm, Inc. From 2004 to 2010, he was a Managing Director of Information Gateway, Inc. From 2000-2004, he was with Globe Telecom as a Director. Prior to mobile, he worked in advertising with

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McCann Erickson from 1997 to 2000. Mr. Tagaysay holds a Bachelor of Arts, Management Economics degree from Ateneo de Manila University. Mark S. Gorriceta, Filipino, 39, Corporate Secretary, Chief Legal Officer and Assistant Chief Compliance Officer of the Company since 2014. Atty. Gorriceta has been in the practice of law for thirteen years. He acts as legal counsel to several other listed companies, its subsidiaries or affiliates, such as the Metro Pacific Tollways Group. Atty. Gorriceta also serves as Chief Legal Counsel and/or Corporate Secretary to several leading tech companies in the Philippines such as Audiowav Media Inc. (currently applying to list in the PSE), Xeleb Technologies Inc. (currently applying to list in the PSE), Storm Flex Systems, Inc, Seer Technologies, Inc., Yondu Inc., Altitude Games Inc., Xeleb Inc. and Xurpas Enterprise Inc. He heads the Corporate Department of Gorriceta Africa Cauton & Saavedra. He was formerly connected with the Law Firm of Quiason Makalintal Barot Torres & Ibarra. He is also a member of the Tax Management Association of the Philippines (TMAP), Financial Executives Institute of the Philippines (FINEX) and International Project Finance Association (IPFA). A member of the Philippine Bar since 2005, he holds a Bachelor of Arts, Political Science degree from the Ateneo de Manila University. He also attended certificate courses in Finance at the Asian Institute of Management in Makati City. Atty. Gorriceta is currently enrolled in Harvard University’s certificate program in Corporate Finance. Alexander D. Corpuz, Filipino, 50, Chief Finance Officer, Chief Information Officer and Chief Compliance Officer of the Company since 2014. Mr. Corpuz has 26 years of experience in the field of finance, nine years of which was in investment and commercial banking. He is currently the Chief Finance Officer of Xeleb Technologies Inc. He is also a Director in Yondu Inc., Seer Technologies, Inc. and Pawnhero Pawnshop Philippines Inc. He was Vice President of Bank of America in 2001, before serving as CFO for Liberty Telecoms, Information Gateway, Mañosa Group of Companies and Hatchd Inc. Mr. Corpuz holds a Bachelor of Science in Business Administration degree from University of the Philippines, Diliman, Cum Laude. He obtained his Masters in Business Management from the Asian Institute of Management, Makati City. He is a member of the Financial Executives Institute of the Philippines (FINEX). Significant Employees While the Company values the contribution of each executive and non-executive employee, there is no non-executive employee that the resignation or loss of whom would have a significant adverse effect on the business of the Company. Other than standard employment contracts, there are no arrangements with non-executive employees that will assure the continued stay of these employees with the Company. Family Relationships Mr. Nico Jose S. Nolledo, Chairman ,and Chief Executive Officer, is the son of Atty. Mercedita S. Nolledo, a director. Mr. Raymond Gerard S. Racaza, President and Chief Operating Officer, is the son of Mr. Wilfredo O. Racaza, also a director of the Company. There are no family relationships between the current members of the Board and the key officers other than the above. Involvement in Certain Legal Proceedings There are no material legal proceedings, bankruptcy petition, conviction by final judgment, order, judgment or decree or any violation of a securities or commodities law for the past five years to which

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the Company or any of its subsidiaries or affiliates or its directors or executive officers is a party or of which any of its material properties is subject in any court or administrative government agency. As of this report, the Company is not a party to any litigation or arbitration proceedings of material importance, which could be expected to have a material adverse effect on the Company or on the results of its operations. No litigation or claim of material importance is known to be pending or threated against the Company or any of its properties. ITEM 10. Executive Compensation Since its incorporation in 2001, the Company’s directors (other than reasonable per diem for nonexecutive directors as discussed below) have not received any salary or compensation for their services as directors. The following table summarizes the aggregate compensation received by the top five executive officers of the Company for the past five (5) years: Estimated Salary Bonus Other Total Name Position Nico Jose S. Nolledo Chairman & Chief Executive Officer Fernando Jude F. Garcia Chief Technology Officer Raymond Gerard S. Racaza

President & Chief Operating Officer

Jose Vicente T. Colayco Treasurer & Chief Business Development Officer

Alfonso A. Tagaysay Chief Marketing Officer Total 2017 (projected) !12,386,990.72 N/A N/A !12,386,990.72 2016 !19,878,809.86 N/A N/A !19,878,809.86 2015 29,390,786.72 N/A N/A 29,390,786.72 2014 10,351,294.00 N/A N/A 10,351,294.00 2013 N/A N/A N/A N/A 2012 N/A N/A N/A N/A

The total annual compensation consists of basic pay and other taxable income. The Company’s executive officers have no other remuneration aside from the compensation described above. Compensation of Directors Standard Arrangements The directors receive a standard per diem of P=20,000.00 for every meeting attended, which may be adjusted, as decided by the Compensation and Remuneration Committee. Non-executive directors have no compensation aside from their per diem, while directors who hold executive positions receive compensation discussed in Item 6, in addition to their per diem. Other Arrangements The Company has no other existing arrangements such as bonus, profit sharing, stock options, warrants, rights, or other compensation plans or arrangements with its directors except for the Employee Stock Option Plan, approval of which is currently pending with the Securities and Exchange Commission and the listing of such shares is pending with the Philippine Stock Exchange.

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Employment Contracts with Executive Officers The Company does not have any compensatory plan or arrangements such as bonus, profit sharing, stock options, warrants, rights or other compensation plans or arrangements that results from the resignation, retirement of employment, or any other termination of an executive officer’s employment with the Company, or from a change in control of the Company. Warrants and Options Held by the Executive Officers and Directors As of date, the Company does not have any stock options, warrants or similar plans for any of its directors or officers except the Employee Stock Option Plan, approval of which is currently pending with the Securities and Exchange Commission and the Philippine Stock Exchange. ITEM 11. Security Ownership of Certain Beneficial Owners and Management Security ownership of certain record and beneficial owners As of March 31, 2017, the Company is not aware of any person who is directly or indirectly the record or beneficial owner of more than 5% of the Company’s capital stock except as set forth below:

Title of Class

Name, Address of Record Owner and Relationship

with Issuer

Name of Beneficial Owner and

Relationship with Record

Owner

Citizenship No. of Shares and Nature of

Ownership (Direct or Indirect)

Percent of Class

Common Nico Jose S. Nolledo Urdaneta Tower, Ayala Avenue, Makati City (Chairman and Chief Executive Officer)

Nico Jose S. Nolledo

Filipino 415,765,960 (Direct)

22.39%

Common Raymond Gerard S. Racaza One Salcedo Place, Jaime Velasquez St., Salcedo Village, Makati City (President and Chief Operating Officer)

Raymond Gerard S. Racaza

Filipino 415,765,960 (Direct)

22.39%

Common Fernando Jude F. Garcia North Lane, Jem 2 Subd., Tandang Sora, Quezon City (Chief Technology Officer)

Fernando Jude F. Garcia

Filipino 415,765,960 (Direct)

22.39%

Common PCD Nominee Corp.

PCD participants acting for themselves and

Filipino 293,594,329 (Direct)

15.81%

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As of March 31, 2017, 17.02% of the outstanding shares of the Company are held by non-Filipino. Security ownership of directors and management as of March 1, 2017 As of March 31, 2017 the Company’s directors and executive officers own the following number of shares:

Voting Trust Holders of 5% or More The Company is not aware of any person holding 5% or more of the Company’s shares under a voting trust or similar agreement.

5 Each beneficial owner of shares through a PCD participant is the beneficial owner to the extent of the number of shares in his account with the PCD participant. The Company has no record relating to the power to decide how the shares held by PCD are to be voted. 6 Id.

for their customers5

Common PCD Nominee Corp.

PCD participants acting for themselves and for their customers6

Non-Filipino 316,043,283 (Direct)

17.02%

Title of Class

Name of Owner and Position Citizenship No. of Shares and Nature of

Ownership (Direct or Indirect)

Percent of Class

Common Nico Jose S. Nolledo Chairman and Chief Executive Officer

Filipino 415,765,960 (Direct)

22.39%

Common Raymond Gerard S. Racaza Director, President and Chief Operating Officer

Filipino 415,765,960 (Direct)

22.39%

Common Fernando Jude F. Garcia Director and Chief Technology Officer

Filipino 415,765,960 (Direct)

22.39%

Common Mercedita S. Nolledo Director

Filipino 2,178,338 (Direct)

0.12%

Common Wilfredo O. Racaza Director

Filipino 1,060 (Direct)

Nil

Common Alvin D. Lao Independent Director

Filipino 1,084,010 (Direct)

0.06%

Common Jonathan Gerard A. Gurango Independent Director

Filipino 169,399 (Direct)

Nil

Common Jose Vicente T. Colayco Chief Business Development Officer

Filipino 16,250,320 (Direct)

0.88%

Common Alfonso A. Tagaysay Chief Marketing Officer

Filipino 16,250,320 (Direct)

0.88%

Total (Directors and Officers as a Group) 1,283,231,327 69.10%

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Changes in Control There was no change of control in the Company during the year. There are no existing provisions in the Company’s Articles of Incorporation or By-Laws that will delay, defer, or in any manner prevent a change in control of the Company. ITEM 12. Certain Relationships and Related Transactions The Company has regularly disclosed its related party transactions such as acquisition of shares in corporations in which the Company has interlocking directors or common stockholders, with the Securities and Exchange Commission and the Philippine Stock Exchange. In the conduct of its day-to-day business, the Company engages in related party transactions such as service and licensing agreements, always at arms-length and taking into consideration the best interest of the Company.

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PART IV – CORPORATE GOVERNANCE

ITEM 13. Corporate Governance. Pursuant to SEC Memorandum Circular No. 20 (Series of 2016), the Annual Corporate Governance Report (ACGR) for 2016 is no longer required to be attached herein. The 2016 Annual Corporate Governance Report shall be submitted to the SEC on or before May 30, 2017.

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PART V - EXHIBITS AND SCHEDULES ITEM 14. Exhibits and Reports on SEC Form 17-C (a) Exhibits – See accompanying Index to Exhibits The other exhibits as indicated in the Exhibit Table of Revised Securities Act Forms are either not applicable to the Company or require o answer. (b) Reports on SEC Form 17-C The following reports on SEC Form 17-C were filed in 2016 and 1st quarter of 2017:

Date Filed Items Reported January 15, 2016 Business Plan Report January 20, 2016 Approval of the Company’s Proposed Employee Stock Option Plan subject to

further revisions February 16, 2016 a) Approval of Incorporation of Xurpas Enterprise Inc. and Subsequent

Subscription of its Shares of Stock; b) Approval of the holding of the 2016 Annual Stockholders’ Meeting on

May 11, 2016, 9:00 a.m. at the Main Lounge of the Manila Polo Club, Mckinley Road, Makati City; and

c) Notice and Agenda of the Annual Stockholders’ Meeting March 8, 2016 a) Acquisition of 718,333 new Series C Preferred Shares equivalent to a

23.53% (fully-diluted) stake in Micro Benefits Limited and b) Press Release: Xurpas intensifies HR technology push with its

investment in Hong Kong-based Micro Benefits Limited March 9, 2016 List of Stockholders entitled to Notice for the 2016 Annual Stockholders’

Meeting. March 29, 2016 a) Approval of 2015 audited financial statements;

b) Re-appointment of SyCip Gorres Velayo & Co. as external auditor; and

c) Press Release: “Xurpas FY2015 revenues more than doubles to P=921 million”

March 30, 2016 Amendment to reflect in the disclosure that the Starting Date for Closing of Books for the Annual Stockholders Meeting is on March 3, 2016.

March 31, 2016 Approval of the incorporation of Xurpas Enterprise Inc. by the Securities and Exchange Commission

April 15, 2016 a) List of Top 100 Stockholder; b) Public Ownership Report; c) Disbursement of Proceeds and Progress Report; and d) Business Plan Report.

April 26, 2016 The Company informed the Commission that the Board of Directors of Xurpas approved the conduct of an Overnight top-up placement.

April 27, 2016 Press Release: Xurpas successfully conducts an overnight placement with partial top-up

May 10, 2016 Submission of the Pro Forma Consolidated Financial Information pursuant to the acquisition of Micro Benefits Limited on March 8, 2016

May 12, 2016 a) Results of Meeting of Board of Directors of Xurpas: o Approval of the Consolidated Unaudited Financial Statements

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53

of the Company for the first quarter of 2016; and o Declaration of cash dividends to all stockholders of the

Company. b) Results of Annual Stockholders’ Meeting; and c) Results of Organizational Meeting of Board of Directors.

May 17, 2016 Press Release: Xurpas 1Q2016 Revenues Surge 165% to P=350 million, as Mobile Enterprise Business Grows 744%

May 20, 2016 d) The Company provided to the Commission the details of Xurpas’ cash dividend declaration.

e) The Company furnished the Commission a copy of the amendment to PSE Disclosure Form 4-25 or Results of Organizational Meeting.

July 1, 2016 The Company informed the Commission on its planned use of proceeds from the Overnight Top Up Placement.

July 15, 2016 a) List of Top 100 Stockholders; and b) Public Ownership Report.

July 20, 2016 Business Plan Report as of June 30, 2016 August 17, 2016 a) The Board approved Xurpas’ 1st Half 2016 Financial Statements; and

b) The Company furnished the Commission a copy of the notice of additional listing of 77,700,000 common shares issued by the Exchange.

August 24, 2016 a) Xurpas’ acquisition of the remaining 35% of Fluxion. b) Sale by Xurpas of its 67% stake in Xeleb to Fluxion.

September 16, 2016 The Company furnished the Commission a copy of the letter issued by the Exchange and accordingly the response of the Company in relation to Xurpas shares registered in the name of Mr. Alvin D. Lao.

September 26, 2016 The Company furnished to the Commission the additional documents that were submitted to the Exchange in relation to the transactions covering Xurpas shares registered under the name of Mr. Alvin D. Lao.

October 11, 2016 a) Acquisition of 100% of Art of Click Pte. Ltd.; and b) Approval of the Initial Public Offering of Xeleb Technologies Inc.

October 14, 2016 a) List of Top 100 Stockholders; and b) Public Ownership Report.

October 25, 2016 The Company furnished the Commission a copy of its response in relation to the query of the Exchange relating to the Xurpas shares registered in the name of Mr. Alvin D. Lao.

November 14, 2016 a) Approval of the consolidated unaudited financial statements of the Company for the first nine (9) months of 2016; and

b) Adoption by the Company of a buy-back program. November 15, 2016 The Company furnished the Commission information relating to its buy-back

program. November 15, 2016 Press Release in relation to the 2016 3rd Quarter Financials of the Company November 15, 2016 On November 11, 2016, the Company issued 69,939,486 common shares from

its unissued authorized capital stock pursuant to the Share Purchase Agreement executed on October 6, 2016 among Xurpas, Emmanuel Michael Jean Allix and Wavemaker Labs Pte. Ltd. for the acquisition of 100% stake in Art of Click Pte. Ltd.

November 22, 2016 Share Buy-Back Transactions: On November 18, 2016, the Company acquired 300,000 common shares.

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November 22, 2016 Share Buy-Back Transactions: On November 21, 2016, the Company acquired 520,000 common shares.

November 23, 2016 Share Buy-Back Transactions: On November 22, 2016, the Company acquired 320,000 common shares.

December 2, 2016 The Company informed the Commission that it received a correspondence from the Exchange covering SEC Form 23-B of Mr. Alvin D. Lao, an independent director of the Company. The Company’s response to the query of the Exchange was also attached in the submission to the Commission.

December 5, 2016 Pro Forma Condensed Consolidated Financial Information pursuant to the Company’s acquisition of Art of Click.

December 9, 2016 Share Buy-Back Transactions: On December 6, 2016, the Company acquired 50,000 common shares.

December 9, 2016 Share Buy-Back Transactions: On December 7, 2016, the Company acquired 245,000 common shares.

December 9, 2016 Share Buy-Back Transactions: On December 8, 2016, the Company acquired 120,000 common shares.

December 12, 2016 Share Buy-Back Transactions: On December 9, 2016, the Company acquired 125,000 common shares.

December 13, 2016 Share Buy-Back Transactions: On December 12, 2016, the Company acquired 173,500 common shares.

December 14, 2016 Share Buy-Back Transactions: On December 13, 2016, the Company acquired 80,000 common shares.

December 15, 2016 Share Buy-Back Transactions: On December 14, 2016, the Company acquired 270,000 common shares.

December 19, 2016 Share Buy-Back Transactions: On December 15, 2016, the Company acquired 203,300 common shares.

December 19, 2016 Share Buy-Back Transactions: On December 16, 2016, the Company acquired 50,000 common shares.

December 20, 206 Share Buy-Back Transactions: On December 19, 2016, the Company acquired 368,000 common shares.

December 21, 2016 Share Buy-Back Transactions: On December 20, 2016, the Company acquired 567,000 common shares.

December 22, 2016 Share Buy-Back Transactions: On December 21, 2016, the Company acquired 72,000 common shares.

December 23, 2016 Share Buy-Back Transactions: On December 22, 2016, the Company acquired 1,232,000 common shares.

December 27, 2016 Share Buy-Back Transactions: On December 23, 2016, the Company acquired 645,000 common shares.

December 28, 2016 Share Buy-Back Transactions: On December 27, 2016, the Company acquired 690,000 common shares.

January 3, 2017 Share Buy-Back Transactions: On December 28, 2016, the Company acquired 622,000 common shares.

January 3, 2017 Share Buy-Back Transactions: On December 29, 2016, the Company acquired 1,880,100 common shares.

January 5, 2017 List of Top 100 Stockholders of Xurpas Inc. January 11, 2017 Annual reporting on attendance of the members of the Board of Directors in

meetings. January 11, 2017 Certification on the Company’s compliance with the Manual on Corporate

Governance.

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January 17, 2017 The Company furnished the Commission a copy of the certificate of attendance of Mr. Alvin D. Lao as proof of his attendance in a corporate governance seminar for the year 2016.

January 17, 2017 Public Ownership Report as of December 31, 2016 January 18, 2017 Share Buy-Back Transactions: On January 17, 2017, the Company acquired

150,000 common shares. January 19, 2017 Share Buy-Back Transactions: On January 18, 2017, the Company acquired

200,000 common shares. January 20, 2017 Share Buy-Back Transactions: On January 19, 2017 the Company acquired

220,000 common shares. January 27, 2017 Annual Report on the Disbursement of Proceeds of the IPO February 2, 2017 Share Buy-Back Transactions: On January 31, 2017, the Company acquired

245,500 common shares. February 6, 2017 Share Buy-Back Transactions: On February 3, 2017, the Company acquired

440,000 common shares. February 9, 2017 Share Buy-Back Transactions: On February 6, 2017, the Company acquired

320,000 common shares. February 9, 2017 Share Buy-Back Transactions: On February 7, 2017, the Company acquired

304,000 common shares. February 9, 2017 Share Buy-Back Transactions: On February 8, 2017, the Company acquired

155,000 common shares. February 10, 2017 Press Release: Xurpas’ platform businesses drive tech firm’s evolution February 14, 2017 Share Buy-Back Transactions: On February 13, 2017, the Company acquired

120,000 common shares. February 14, 2017 Details of the 2017 Annual Stockholders’ Meeting February 24, 2017 The Company was directed by the Exchange to pay P=750,000 for failure to

promptly disclose the changes in the shareholdings of Mr. Alvin D. Lao (“Mr. Lao”) in one of his joint accounts and for Mr. Lao’s transactions involving Xurpas shares within the black-out period.

March 9, 2017 Attendance of the Company’s directors and officers in the corporate governance training conducted by SyCip Gorres Velayo & Co. on March 7, 2017.

March 9, 2017 List of Stockholders entitled to Notice of the 2017 Annual Stockholders Meeting (as of March 1, 2017).

March 13, 2017 Resubmission of the List of Stockholders entitled to Notice of the 2017 Annual Stockholders Meeting (as of March 1, 2017).

March 31, 2017 Results of Board Meeting held on March 27, 2017: a. Approval of the 2016 consolidated audited financial statements; b. Appointment of SyCip Gorres Velayo & Co. as the Company’s

external auditor; c. Termination of the Buy-back Program adopted by the Board on

November 9, 2016; d. Approval of the amendment of the Articles of Incorporation; and e. Approval of the amendment of the By-Laws.

March 31, 2017 Press Release: Xurpas ends FY2016 with strong record income and revenue

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INDEX TO EXHIBITS

Form 17-A

No. Page No. (3) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession *

(5) Instruments Defining the Rights of Security Holders, Including Indentures *

(8) Voting Trust Agreement *

(9) Material Contracts *

(10) Annual Report to Security Holders, Form 11-Q or Quarterly Report to Security

Holders *

(13) Letter re Change in Certifying Accountant *

(16) Report Furnished to Security Holders *

(18) Subsidiaries of the Registrant **

(19) Published Report Regarding Matters Submitted to Vote of Security Holders *

(20) Consent of Experts and Independent Counsel *

(21) Power of Attorney *

(29) Additional Exhibits *

*These Exhibits are either not applicable to the Company or require no answer. **Please refer to Note 2 of the accompanying Notes to the Consolidated Financial Statements for details.

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SIGNATURES

Pursuant to the requirements of Section 17 of the Code and Section 141 of the Corporation Code, this

ffiX1;:fippdf?t6fftthe issuer by the undersigned, thereunto duly authorized, in the city of

By

(n) <

JOSE S. YMONDChairman of the Board/ Chief Executive President/

Officer

ALEXANDER D.Chief Chief Legal

OfFrcer

A B. LABANController

12 APR 2017SUBSCRIBED AND SWORN to before me this day of

-

2017 affiant(s)cxhibiting to me their Competent Evidence of Identity. as follows:

NAMES

NICO JOSE S. NOLLEDORAYMOND GERARD S. RACAZAALEXANDER D. CORPUZMARK S. GORRICETAESI'RELITA B. LABAN

PASSPORTNO.

EB 8683342EC 2509470E89863376EC 5401039EC 842t222

,r t I "

i'.-'ri r I

DATE OFISSUANCE

July 16,2013October 23,2014December 20.2013September 19,2015July 28,2016

PLACE OFISSUANCE

DFA ManilaDFA ManilaDFA NCR EastDFA ManilaDFA NCR South

Doc. No. W,Pape No. ---77Bo;kNo.3:Series of20l7. ;$ i.IC

rU AN

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Xurpas Inc.2015 Annual Report

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xuEPas..STATEMENT OF IVTANAGEMENT'S RESPONSIBILITY FOR

CONSOLIDATED FINANCIAL STATEMENTS"

The management of XURPAS INC, A ID SIIBSIDIARIES (the "Group") is responsible fior theprepaaion eld fair presentaion of the financial statemerfs including the schedules attached lherein,for the years ended December 3 I, 2016 and 201 5, in rcordance with the prescribed financial reportingfiamework indicafed therein, and for sudr internal conllol as managemenl determines is necessary toenable the preparation offinancial $atements thd are free from material misstatement, whether due tofraud or error.

In prcparing the financial $dements! management is responsible for assessing the Gmup's ability tocontinue as a going concerr! disclosing as 4plicabte, mdters related to going concern and using thegoing concsm basis of acounting unless managem€nt either intends to liquidde the Group or to ceaseoperations, or has no reali$ic altemdive but to do so.

The Board of Drectors is responsible for overseeing the Group's financia! reporting process

The Board of Directors reviews and qproves the financial statements including the schedules *tachedthenin, and submits the sa ne to the sockholders.

SyCip Gorres Velayo & Co., the independent anditor appointed by the stockholders, has audited thefinancial stdetn€nts ofthe group in rccordance with Philippine Standards on Auditing and in its reportto the stockholders or members" has expressed its opinion on the faimess of presentation uponcomplaion of such examindion.

h\sNICO J s.NChairman of the Board./ iefExecutive C)fficer

AL ER D.Chief Financial Officer

Signed d,ol.lAR 28 20ll

7rH Floor Carb*rg€ Cfltrs Brildng, 108 ToK,€Gilas St., cq Gd€r&, Sdcedo Mlhge, MC€t Crty 122

Eu@:rffit,.d,,tre

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ACKNOWLEDGEMENT

Itlrl't'lll.l(- ()l: 'I HE PHILII']PINtIS)PASTG CITY )ss

ll I ilr( )l{l l NII'1, a Notan' Public frrr and in I)asig ( litv this 2u'r' dav of Nlatch 20l7 pcrsonalllappcrrcd:

all knorvn to me and to me knorvn to be the samc pcrsons rvho executed the foregorngStatemcnt of l\Ianagement Responsibilin consisting of nvo (2) pages, including this pageand rvho acknorvledged to mc that the same arc theh true and yoluntar- act and deed.

IN \\'l'l NlrSS \\'FILRL,O| , I harc hcrcunto sct mv hand and affixcd ml notarial scal <xr thcdate rnd phcc Frrst above rvritten.

l)<rc N<r. %b ;l):rgc N,,. ?fi :ll,r,rk N,, | ,

Scrie. .,f 2011. '

Name Competent Evidencc ofIdentity

Date/Place issued

Nico.losc S. Nolledo Passpott No. I iRti(>U3-l-12 f uh 16,2013 / DF-\ Nlanila-\lcxandcr D. Oorpus Passport No. I18986.1376 Dec. 20, 2013 / DF-\ NCR Last

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