CNIX Railway, Inc.

Abon, Cyndi R.

Balbalcal, Angelica L.

Castro, Kristine M.

De Belen, Kesia G.

Diamante, Nicha Mae T.

Parcia, Jesharelle T.

August 24, 2023

Introduction

Palawan spans a considerable distance of roughly 260 miles. Traveling from El Nido in
the north to Bataraza in the south by bus currently entails a journey of around 13 hours.
Therefore, envisioning a transportation system that could cover the entirety of Palawan
within just one or two hours is undeniably groundbreaking. This aspiration aligns with
the objectives of the CNIX system, which seeks to establish a high-speed train network
capable of profoundly transforming the daily lives of Palaweños.

CNIX is dedicated to provide a quality transportation service within the province of

Palawan, which values efficiency, connectivity, and the central role that the people,
places, and experiences are bound. CNIX Railway or also known as Central Nexus
Integrated Xpress Railway represents a transportation system that serves as the central
nexus connecting various municipalities in Palawan through an express railway
network. The “Xpress” element underscores the swift and timely nature of the service,
promising passengers a convenient and expedited travel experience.

The pronunciation of CNIX as "scenics" suggests a relationship to Palawan's

world-famous natural beauty. This is related to the notion of utilizing Palawan's
captivating natural beauty to improve the local and tourist experience. CNIX Railway
provides its customers with a relaxing and beautiful ride that enables them to view
Palawan from a fresh, new and alluring perspective.

The heart of CNIX is its advanced bullet train sourced from Japan, a nation renowned for
its engineering excellence and high-speed rail accomplishments. Inspired by Japan's
iconic Shinkansen, our cutting-edge bullet train represents the fusion of progressive
design and meticulous craftsmanship. Operating at speeds of up to 200 mph, this
exceptional train is poised to redefine travel within Palawan. Given the expanse of 260
miles to traverse across the province, a one-way journey via the bullet train is
anticipated to span approximately one to two hours. This engineering feat, not only
underscores our commitment to efficient travel but also operates with sustainability. We
incorporate modern technologies for eco-friendly practices, minimizing our carbon
footprint while delivering a forward-looking travel experience.
Train stations are strategically positioned in each municipality to enhance travel
convenience for both residents and visitors. The CNIX railway system is particularly
proud of its cost-effectiveness when contrasted with other transportation alternatives in
Palawan. The combined advantages of a high-speed train are projected to bring about a
significant transformation in Palawan. Among the domains that will experience
particularly positive effects from this advancement is the tourism sector, alongside its
contribution to bolstering local enterprises. This, in turn, serves as motivation for the
local population to initiate more businesses, consequently generating additional
employment opportunities. All of these elements collectively contribute to an upsurge in
Palawan's economy, thereby leading to an improved quality of life for all Palawenos.

SECTION 1:

Preamble

CNIX Railway, Inc. established on the foundation of steadfast corporate governance

where accountability, integrity, and transparency are highly valued for the company’s
success. It creates dedication and commitment to a culture of corporate governance and
establishes higher benchmarks for excellence and ethical business conduct.
Furthermore, CNIX Railway, Inc., seeks to improve along with time to give better services
to the customers.

Adhering to corporate governance is ingrained in every aspect of our company’s

operations, including engagement with stakeholders and decision-making processes.
Understanding that working in the transportation industry, our duties go beyond tracks.
Making sure that our actions conform to the strictest industry standards and regulatory
requirements which operate under a solid governance system.

Accountability: Our choices, commitments, and results are all under our control. In
order to ensure that everyone in the company is aware of their obligations, we develop a
chain of responsibility through well-defined structures and procedures. By taking
ownership of their decisions, our leaders serve as role models and encourage a culture
of accountability throughout the organization
Integrity: CNIX Railway, Inc. maintains the strictest moral principles. When doing our
tasks and interacting with others, whether internally or outside, ethics and morals are
highly valued. Our zero-tolerance policy towards unethical behavior fosters
collaboration and encourages the growth of trust.

Transparency: Transparency and open communication are significant. With each of our
stakeholders—staff, customers, and partners—we always communicate in a timely,
precise, and correct manner. We encourage a sense of unity and a sense of shared
purpose by being transparent with stakeholders about our objectives, strategies, and
performance.

Supervisory Board: The Board of Directors monitors corporate governance

procedures, making sure that long-term interests are taken into account when making
strategic decisions and encouraging a balanced strategy that takes both business
success and societal effect into account.

Stakeholder Engagement: In order to have a beneficial impact on society and the

environment, corporate governance requires working with stakeholders, communities,
governments, regulators, and other organizations.

Risk Management: We take proactive steps to identify, evaluate, and reduce risks that
could have an effect on our operations, reputation, or stakeholders. We make sure our
company is stable and resilient in the face of adversities by upholding a watchful risk
management plan.

Board members, management, and staff all recognize that they are jointly responsible
for the implementation of this manual's requirements.

Vision

To become one of the best sustainable and reliable transportation companies in the
Philippines with the focus on enhancing the movement of goods and people while
minimizing the environmental impact.
Mission

To provide safe, efficient , reliable, fast, accessible, convenient, and affordable train
services along with the journey and to contribute to the development and connectivity
of the places in Palawan.
Core Values (I-RAISE)
● Integrity
● Reliability
● Accountability
● Innovation
● Sustainability
● Excellence

The corporate governance framework for the CNIX Railway Inc. shall be governed by
the following principles:

1. The CNIX Railway will ensure the satisfaction for every journey of the passenger by
giving exceptional customer services.

2. CNIX Railway operates at a higher standard of safety, ensuring that every

passenger's journey is not only comfortable but also safe. Passengers will not only
experience excellent services but also have the opportunity to enjoy the scenic
beauty of Palawan.

3. Being a responsible transportation company by reducing the carbon footprint to

protect the environment.

4. The company will value the dedicated workplace for every worker. By fostering a
culture of inclusivity, respect, and growth, we aim to empower our employees to
deliver excellence in their roles.

5. The CNIX Railway will have an unwavering commitment to promote safety,

reliability and affordable cost for passengers.
SECTION 2: GOVERNANCE STRUCTURE

2.1 Board of Directors

The Board of Directors of Central Nexus Integrated Xpress Railway (CNIX) is entrusted
with the paramount responsibility of upholding and implementing the principles of
good corporate governance as outlined in this Manual. The Board serves as the
custodian of corporate powers, oversees business operations, and manages the assets of
the Company in alignment with the corporate governance principles established herein.
It is incumbent upon the Board to ensure the Company's long-term success, sustained
competitiveness, profitability, and the best interests of all stakeholders.

2.1.1 Composition

(a) The Board shall consist of thirteen (13) Directors, as specified in the Company's
Articles of Incorporation, elected in accordance with the provisions of the By-Laws, the
Corporation Code, and the Securities Regulation Code.

(b) To foster objectivity and independent judgment in all corporate matters and to
instate effective checks and balances, the majority of the Board shall be composed of
Non-Executive Directors. Among these, a minimum of three (3) Independent Directors
shall be appointed, representing at least twenty percent (20%) of the total Board
membership. The Board shall periodically assess the need to increase the number of
Independent Directors to one-third or more of the total Board membership, in order to
enhance overall Board performance and uphold the interests of CNIX and its
shareholders.

(c) Emphasizing optimal decision-making through a blend of expertise, knowledge,

skills, gender, age, ethnicity, and culture, the Board shall adopt a policy on Board
diversity.

2.1.2 Term of office

(a) Directors elected during the annual stockholders' meeting shall serve a one-year
term and continue in office until the election and qualification of their successors. In the
event a Director is appointed by the Board to fill a vacancy, their term shall only span the
remaining period of their predecessor's tenure.

(b) As a general guideline, an Independent Director's tenure shall not exceed nine (9)
consecutive years starting from 2012 (the "Term Limit"). Should shareholders wish to
re-elect an Independent Director beyond the Term Limit due to justifiable reasons, the
Company shall honor their right. However, the Company shall transparently
communicate the reasons for retaining an Independent Director beyond the Term Limit
during the annual stockholders' meeting.
2.1.3 Qualifications for or Disqualifications from Directorship

(a) The minimum qualifications for directorship in CNIX shall adhere to Annex A, subject
to amendments that incorporate additional qualifications mandated by changes in the
Corporation Code, Securities Regulation Code, Governance Code, and other relevant
laws and regulations. The Board may approve supplementary qualifications that are
incorporated into the By-Laws.

(b) Grounds for disqualification from directorship shall be consistent with Annex B,
adjusted to encompass additional disqualification factors arising from amendments to
the Corporation Code, Securities Regulation Code, Governance Code, and other relevant
laws and regulations. The Board may endorse further grounds for disqualification,
integrated into the By-Laws.

(c) Supplementary criteria for Independent Director Qualification may be considered,

drawing from Annex C. These criteria shall evolve in tandem with modifications to the
Corporation Code, Securities Regulation Code, Governance Code, and other applicable
legal frameworks.

(d) CNIX's director nomination and election process, encompassing the scrutiny and
evaluation of director-nominees, are documented in the Guidelines on the Search,
Screening, and Selection of Directors. A summary of the key provisions is presented in
Annex D.

2.1.4 Duties and Responsibilities of the Board

In pursuance of the highest standards of governance and safeguarding the Company's

interest, shareholders' rights, and stakeholders' concerns, the Board shall conduct itself
with transparency, integrity, and accountability. The Board shall:

GOVERNANCE FRAMEWORK

(a) Establish the corporate governance framework and policies of CNIX, overseeing their
implementation across the organization.

(b) Employ a rigorous selection process for Directors, ensuring diverse expertise and
representation among Independent, Non-Executive, and Executive Directors. This
guarantees that each Director contributes impartial judgment to formulating robust
corporate strategies and policies.

(c) Establish essential Board Committees that assist in fulfilling the Board's obligations,
such as the Audit Committee, Governance and Nomination Committee, Risk Committee,
Executive Compensation Committee, and Technology Strategy Committee.

(d) Conduct regular meetings, considering diverse viewpoints, to ensure thorough

decision-making processes and the integrity of Board deliberations.
STRATEGIC DIRECTION AND CORPORATE PERFORMANCE

(e) Collaborate with Management in defining CNIX's vision, mission, and strategic
objectives.

(f) Set performance benchmarks and oversee their implementation, ensuring alignment
with corporate objectives and performance reviews.

MANAGEMENT OVERSIGHT

(g) Select and appoint the Chief Executive Officer (CEO) and other Officers, evaluating
their performance based on criteria defined by the Board and Management that
resonate with the Company's strategic objectives.

(h) Monitor Management's execution of business strategies, plans, policies, and budgets.

(i) Oversee the formulation of human resources policies, including compensation

structures, professional development initiatives for Officers, and a comprehensive
succession plan for Management.

FINANCIAL REPORTING, INTERNAL CONTROLS, AND INDEPENDENT AUDIT

(j) Ensure the establishment and maintenance of robust financial reporting and internal
control systems by Management.

(k) Mandate the existence of a credible internal audit mechanism that provides
reasonable assurance to the Board and Management regarding adherence to critical
organizational and operational controls. The Internal Audit Charter shall be approved by
the Board.

(l) Establish a mechanism for independent audits to thoroughly review the Company's
financial statements, thereby ensuring accountability and transparency.

(m) Commit to legal compliance, adopt best practices, and institute policies and
procedures in accordance with this Manual, the Governance Code, and other pertinent
laws, regulations, and guidelines.

(n) Create and enforce policies and procedures, as stipulated by this Manual and the
Governance Code, including those concerning conflicts of interest, related party
transactions, and the disclosure of material reportable financial and non-financial
information.

ENTERPRISE RISK MANAGEMENT

(o) Oversee the deployment of an effective risk management framework by
Management, focused on identifying, monitoring, and managing key risk areas. Evaluate
Management's reports on significant risk exposures, along with the steps taken to
mitigate, control, or manage these risks.

STAKEHOLDER ENGAGEMENT AND CORPORATE SOCIAL RESPONSIBILITY

(p) Institute an effective investor relations program that keeps stockholders and
investors informed of significant developments within CNIX.

(q) Uphold the rights of stockholders and promote respectful engagement.

(r) Recognize and engage with stakeholders directly affected by CNIX's operations,
maintaining open lines of communication and cooperation.

2.1.5 Duties and Responsibilities of a Director

Adhering to the tripartite duties of fidelity, diligence, and loyalty to the corporation, each
Director shall:

(a) Operate within the parameters of the Company's authority, as outlined in the Articles
of Incorporation, By-Laws, legislative franchise, and pertinent laws and regulations.

(b) Approach decisions with due diligence, transparency, and integrity.

(c) Act in the best interests of CNIX, its shareholders, and stakeholders, while
conducting themselves on the basis of good faith and informed judgment.

Pursuant to these principles, each Director shall:

(a) Embrace integrity, transparency, accountability, and fairness in all actions.

(b) Possess a comprehensive understanding of legal and regulatory requirements

applicable to CNIX, which includes the Company's Articles of Incorporation, By-Laws,
legislative franchise, regulatory standards, and relevant industry developments.

(c) Dedicate adequate time and attention to fulfill their fiduciary obligations and
responsibilities, supplemented by a strong familiarity with CNIX's operations.

(d) Approach decisions during Board meetings with critical analysis, ensuring thorough
deliberation before arriving at conclusions.

(e) Demonstrate independent judgment, separating personal interests from the

Company's welfare.

(f) Guard against conflicts of interest that might influence personal judgment or Board
decisions.
(g) Preserve the confidentiality of non-public information garnered through their
directorial position.

2.1.6 Board Meetings

(a) The Board shall organize and conduct regular meetings as per the Company's
By-Laws. Special meetings shall be arranged as necessitated by business exigencies. All
meeting notices, agendas, and relevant materials shall be dispatched to Directors no less
than five (5) business days ahead of each meeting, with all deliberations accurately
minuted.

(b) Every Director is expected to be present at each scheduled Board meeting. In cases
of justifiable circumstances preventing attendance, such as serious illness, death in the
immediate family, or severe accidents, absence is excused.

(c) An Independent Director's presence is imperative during Board meetings to

reinforce transparency. However, unless the By-Laws dictate otherwise, an Independent
Director's absence shall not affect the quorum requirement.

(d) The Board shall convene executive sessions annually with Independent and
Non-Executive Directors, excluding Executive Directors. Chaired by the Chairman of the
Governance and Nomination Committee (or, if an Executive Director, by a designated
Independent or Non-Executive Director), these sessions foster candid discussions.

2.1.7 Compensation of Directors

Directors shall not receive compensation beyond reasonable per diems, unless specified
in the By-Laws or ratified by a majority vote of shareholders representing at least half of
the outstanding capital stock. The Board is barred from determining its compensation,
excepting per diems.

2.1.8 Directorships in Other Corporations

(a) The Board may contemplate the introduction of guidelines limiting a Director's
participation in directorships of other corporations, while weighing factors that
influence this limit. Such considerations comprise a Director's ability to conscientiously
execute duties and responsibilities as a CNIX Director. However, these limitations cannot
infringe upon shareholders' legal right to vote for and be elected as Directors.

(b) Directors are obliged to notify the Board before accepting directorships in other
corporations.

2.1.9 Training and Access to Professional Advice

(a) CNIX shall institute a continuous training regimen for Directors, encompassing an
annual training session to ensure Directors remain well-informed regarding business
developments, regulatory updates, and emerging risks.

(b) A comprehensive orientation program shall be organized for new Directors,

familiarizing them with their duties and responsibilities before they commence their
tenure.

(c) Directors are entitled to acquire independent professional advice at the Company's
expense, facilitating access to Management whenever necessary to execute their duties.

2.1.10 Performance Evaluation

(a) The Board shall engage in an annual self-assessment to evaluate the performance of
both the Board and individual Directors. This process involves evaluating the
effectiveness of Board Committees.

(b) To maintain objectivity, external facilitators will guide this assessment every three
years. A mechanism for stockholders' feedback shall be established.

2.5 Corporate Secretary and Assistant Corporate Secretary

(xi) ensure that the Company's corporate records are maintained and accurately
updated, including maintaining the Company's stock and transfer book; and (xii) act as
the Company's liaison officer with regulatory authorities, including the Philippine Stock
Exchange, and ensure that the Company complies with all necessary reportorial
requirements and disclosure obligations.

(c) The Corporate Secretary and Assistant Corporate Secretary shall attend all meetings
of the Board and its Committees, except when justifiable causes prevent their
attendance.

2.6 Ownership Structure and Related Party Transactions

(a) The Company shall comply with the SEC's Reportorial Requirements on Beneficial
Ownership and Beneficial Ownership Report (BOR) Issuance.

(b) In compliance with the Revised Corporation Code, the Company shall maintain a
Record of Beneficial Ownership.

(c) The Company shall adopt a Policy on Related Party Transactions (RPTs) that
complies with applicable laws, rules, regulations and governance standards.
(d) The Company shall create an RPT Committee that is responsible for ensuring that
RPTs are transparent, fair, arm's-length and in the best interests of the Company and its
stakeholders.

2.7. Risk Management and Internal Control

(a) The Company shall maintain an effective risk management and internal control
system to manage and mitigate risks that the Company is exposed to in the course of its
business operations.

(b) The Board shall establish a Risk Committee that is responsible for assisting the
Board in the fulfillment of its risk oversight responsibilities.

(c) The Risk Committee shall ensure that an effective risk management framework is in
place, including clear processes for identifying, assessing, managing and monitoring key
risks.

(d) The Company shall disclose in its annual report the risk management framework it
has adopted and the processes it has put in place to manage and mitigate risks.

2.8 Corporate Social Responsibility (CSR) and Sustainability

(a) The Company shall adopt a CSR policy that sets out the Company's commitment to
contributing to the social and economic development of the Philippines.

(b) The Company shall establish a CSR Committee responsible for ensuring that the
Company complies with its CSR commitments.

(c) The CSR Committee shall integrate CSR initiatives into the Company's business
operations and report on the Company's CSR efforts and initiatives in its annual report.

Enterprise Risk Management (ERM)

2.8.1 ERM Function

Given the intricate and dynamic nature of CNIX's business operations, the Company
shall establish a dedicated risk management function tasked with identifying, assessing,
and monitoring key risk exposures. The Enterprise Risk Management (ERM) function's
responsibilities encompass the following:

(a) Develop a comprehensive risk management strategy tailored to CNIX's unique

business landscape.
(b) Conduct in-depth analysis of risk exposures spanning economic, environmental,
social, and governance (EESG) factors, all of which can impact the attainment of CNIX's
strategic goals.

(c) Categorize and evaluate each identified risk, employing predefined risk categories
and parameters that align with CNIX's business priorities.

(d) Maintain a meticulously curated risk register, documenting identified risks, their
prioritization, and residual risk levels.

(e) Devise and execute risk mitigation plans, prioritizing those risks that significantly
influence CNIX's operations, as defined by the risk management strategy.

(f) Communicate and report substantial risk exposures, including but not limited to
business risks such as strategic, compliance, operational, financial, and reputational
risks, as well as control-related issues and corresponding risk mitigation plans, to the
Risk Committee.

(g) Continuously monitor and assess the effectiveness of CNIX's risk management
processes, ensuring they remain aligned with the evolving business environment.

2.8.2 ERM Officer

CNIX shall appoint a seasoned Group Enterprise Risk Management Officer (GRMO) to
lead the risk management function. The GRMO shall shoulder the following duties and
responsibilities:

(a) Oversee the entire ERM process, spearheading the development, implementation,
maintenance, and ongoing enhancement of ERM processes and related documentation.

(b) Effectively communicate top risk concerns and the status of risk management
strategies and action plans to the Risk Committee.

(c) Collaborate closely with the CEO in updating and making informed
recommendations to the Risk Committee, thus fostering a unified risk management
approach.

(d) Propose pertinent ERM policies and relevant guidance as necessary, ensuring the
alignment of such initiatives with CNIX's strategic goals.

(e) Offer insights into the effectiveness of risk management processes, validate the
continuous review of reported risk measures by risk owners, and verify compliance
with established risk policies and procedures.
The GRMO shall establish clear lines of communication between the Risk Committee
and the risk management function, ensuring robust collaboration and synergy in
addressing risk-related matters.

2.9 Chief Governance Officer

Given CNIX's commitment to sound corporate governance principles that align with its
unique nature, the Board shall designate a Chief Governance Officer. This individual shall
hold a position of at least a Vice President or its equivalent within CNIX's organizational
structure. The Chief Governance Officer shall report directly to the Chairman and
assume the following crucial governance compliance functions:

(a) Vigilantly monitor adherence to the provisions and requisites outlined in this
Manual, the Governance Code, and other relevant circulars, rules, and regulations
(collectively referred to as the "CG Rules").

(b) Promptly report any violations of provisions within this Manual, the Governance
Code, and the CG Rules to the Chairman and Governance and Nomination Committee.
The Chief Governance Officer shall also recommend appropriate disciplinary actions for
such violations and propose measures to prevent their recurrence, subject to further
review and approval by the Board.

(c) Act as a representative of CNIX when summoned by regulatory authorities,

particularly in matters related to compliance with the Governance Code.

(d) Collaborate with the Board and the Governance and Nomination Committee,
contributing to the performance of their governance functions. This encompasses the
implementation of corporate governance policies and rules, effective onboarding of new
directors, and the execution of corporate governance training initiatives for both
Directors and Officers.

(e) Establish productive collaborations with other relevant departments within CNIX.
This collaboration shall encompass efforts to monitor, review, evaluate, and ensure
compliance with pertinent laws and regulations. Furthermore, the Chief Governance
Officer shall uphold the integrity and accuracy of documentary submissions to
regulatory agencies and proactively address compliance issues.
SECTION 3. GOVERNANCE POLICIES AND PROCESSES

3.1 Stakeholder Engagement

Acknowledging the significance of CNIX's diverse stakeholders, including stockholders,

customers, employees, suppliers, investors, creditors, the local community, and
regulatory bodies, the Company shall uphold the rights and interests of each group. In
shaping CNIX's strategic decisions and operational initiatives, careful consideration shall
be given to the multifaceted needs of stakeholders. To embody this commitment, CNIX
shall establish and implement policies and programs that ensure equitable treatment
and safeguard the well-being of its stakeholders. Moreover, CNIX shall foster
collaborative relationships between the organization and its stakeholders, striving to
create mutual value, sustainable growth, and prosperity. The Company shall facilitate
transparent and open channels of communication through dedicated stakeholder
engagement touch points, which include the Public Affairs Group, Corporate
Communications, Investor Relations Office, Customer Care Services, and the Office of the
Corporate Secretary.

3.1.1 Stockholders

(a) CNIX shall uphold principles of fairness and equity, irrespective of nationality,
shareholding extent, or personal circumstances, when engaging with its stockholders.
The Company shall champion and respect the rights of stockholders as stipulated in the
Corporation Code, as well as the Articles of Incorporation, By-Laws, and resolutions
sanctioned by the Board that define classes or series of shares (collectively referred to
as the "Constitutive Documents"). These rights encompass:

(i) The right to vote on all matters necessitating stockholder approval, adhering to
applicable provisions in the Corporation Code and Constitutive Documents. During
director elections, voting stockholders are entitled to cumulative voting as outlined in
the By-Laws. The procedure for director nomination and election is detailed in Annex D.

(ii) The pre-emptive right, enabling stockholders to subscribe to or purchase unissued

Company shares offered for subscription or purchase. However, this right is subject to
exceptions stipulated in the Articles of Incorporation and the Corporation Code,
allowing for certain circumstances where pre-emptive rights do not extend to specific
shares.

(iii) The right to inspect corporate records, encompassing minutes of Board meetings
and stock registries. This right may be restricted by the Board under specific conditions,
such as concerns about improper use of information or a lack of legitimate purpose.

(iv) The right to receive pertinent information mandated by the Corporation Code or the
Securities Regulation Code.
(v) The right to dividends, in line with Corporation Code and Constitutive Document
stipulations.

(vi) The right to invoke the appraisal right, which entails dissenting and demanding
payment of the fair value of shares under defined scenarios in the Corporation Code,
such as alterations to articles of incorporation.

Stockholders have the prerogative to seek remedies for violations of their rights in
accordance with prevailing laws.

(b) CNIX shall adhere to relevant laws and regulations when addressing intra-corporate
disputes with stockholders. The Company shall also embrace alternative dispute
mechanisms when resolving such disputes, emphasizing a cooperative and efficient
approach.

(c) The Board shall conduct annual and special stockholders' meetings with
transparency and fairness. These meetings shall adhere to a guideline where notice and
agenda are provided to stockholders at least twenty-eight (28) days ahead of the
meeting, either by direct correspondence or via the Company's official website. The
Board shall encourage personal attendance at meetings and inform stockholders of their
right to appoint a proxy in case of their absence. The proxy process shall be facilitated
without undue restrictions, and any ambiguities regarding proxy validity shall be
resolved in favor of stockholders, abiding by applicable laws, regulations, and By-Laws.

(d) CNIX shall proactively streamline procedures and minimize administrative obstacles
that might impede stockholder participation in meetings, whether in person or by proxy.
The Company shall ensure that pertinent and timely information is available to
stockholders, enabling informed decision-making on presented matters.

(e) Stockholders seeking to discuss concerns directly linked to CNIX's business

operations can initially direct their matters or inquiries to: (i) the Corporate Secretary;
(ii) the Investor Relations Office; (iii) Management; or (iv) the Board.

(f) To uphold transparency and accurate information dissemination, CNIX shall host
media and analyst briefings. These platforms shall serve as vehicles for timely, reliable,
and relevant information sharing with stockholders and other investors.

3.1.2 OTHER STAKEHOLDERS

a) Communication with Investors and Stakeholders

To ensure transparent communication and informed decision-making, CNIX shall

establish a dedicated communication channel for the dissemination of pertinent
information essential for investors and other stakeholders. This channel shall serve as a
reliable source of updates on matters influencing their engagement with the Company.
b) Employee Engagement

Recognizing that employees play a pivotal role in the realization of CNIX's objectives and
governance, the Company shall formulate policies, programs, and procedures that
encourage active employee participation in advancing both the Company's goals and its
governance

principles. This encompasses initiatives related to health, safety, welfare, training,

development, and fair compensation for employees.

c) Community Engagement

CNIX shall uphold its social responsibility in interactions with the communities in which
it operates. The Company shall approach its involvement with the community in a
manner that contributes positively and progressively to both the community and
stakeholders, aligning its actions with sustainable and socially beneficial practices.

3.2 DISCLOSURES

3.2.1 Disclosure of Material Information

a) Full, Accurate, and Timely Disclosure

CNIX shall uphold the commitment to full, accurate, and timely disclosure of all material
information and transactions that could potentially impact the market price of the
Company's shares or have implications for the interests of stockholders and other
stakeholders. This encompasses not only financial matters but also extends to
reportable non-financial and sustainability issues, including economic, environmental,
social, and governance factors that underpin the Company's sustainability.

b) Regulatory Compliance

The Company shall adhere to the requirements of the Securities Regulation Code, its
Implementing Rules and Regulations, as well as the mechanisms and procedures
established by the relevant regulatory bodies such as the Commission and the Exchange.
CNIX shall ensure that all written disclosures or reports concerning material
information and transactions are filed as mandated, catering to the interests of
stockholders and other stakeholders.

c) Controlled Communication of Material Non-Public Information

CNIX shall enforce rigorous control over the communication of material non-public
information concerning the Company. Such information shall only be communicated
when the Company is ready to simultaneously disclose it to regulatory bodies, including
the Commission, Exchange, and other applicable entities. Exceptions to this rule shall be
limited to those bound by confidentiality obligations or with written agreements to
maintain strict confidence.

SECTION 4. MONITORING AND IMPLEMENTATION

4.1 Compliance and Evaluation Framework

The Governance and Nomination Committee of CNIX shall establish a comprehensive

evaluation system tailored to monitor and assess the Company's adherence to this
Manual and the pertinent provisions of the Governance Code. This evaluation system
shall encompass the Company's activities, the performance of the Board, and the
practices of Management.

4.2 Reporting of Breaches

CNIX's Chief Governance Officer shall assume responsibility for promptly reporting any
detected violations of this Manual to the Chairman and the Governance and Nomination
Committee. Upon receiving such reports, the Committee shall conduct a thorough
investigation, affording due process to the involved parties. Following the investigation,
the Governance and Nomination Committee shall propose an appropriate penalty for
the breach, which the Chairman of the Board shall review before seeking approval from
the full Board.

4.3 Accessibility

CNIX shall make this Manual accessible for inspection by any Company stockholder
during reasonable business hours on workdays, while keeping in line with any
limitations as provided by the Corporation Code, relevant laws, circulars, rules, and
regulations.

4.4 Dissemination and Distribution

To ensure awareness and compliance, CNIX shall distribute this Manual to all Directors,
Officers, Executives, and employees, facilitating their understanding and adherence to
its provisions. Additionally, each department and division shall receive at least one hard
copy of the Manual.

4.5 Communication and Learning Initiatives

CNIX shall carry out a robust communication and training initiative targeting Directors,
Officers, Executives, and employees. This comprehensive program shall include
corporate governance education specifically designed for the Board. The goal is to
ensure a thorough understanding and effective implementation of the guidelines
established in this Manual.

4.6 Subsidiaries' Adherence

CNIX shall guide and encourage its subsidiaries in the adoption of a Corporate
Governance Manual that aligns with their unique business environments. This guidance
aims to ensure consistent corporate governance practices across the entire corporate
group.

4.7 Commitment to Continuous Enhancement

CNIX shall demonstrate an unwavering commitment to elevating its corporate

governance standards. The Company shall actively seek opportunities for improvement,
benchmark against recognized best practices, and evaluate the feasibility and value of
adopting recommended best practices that serve the best interests of CNIX's
stakeholders, encompassing stockholders, employees, and the wider community.

SECTION 5. CUSTOMER ENGAGEMENT, PRICING, AND SAFETY

At CNIX, our commitment to excellence extends beyond our internal operations and
reaches our valued customers. We acknowledge that our customers play a crucial role in
our success, and therefore, we hold their interests, safety, and satisfaction as paramount.
This section outlines our policies and practices concerning customer engagement,
pricing transparency, and ensuring the safety of our customers.

5.1 Customer Engagement

We recognize that fostering strong relationships with our customers is essential to our
long-term success. We pledge to provide transparent, honest, and accurate information
about our products and services. Our approach to customer engagement is guided by
the following principles:

a) Transparency: We are dedicated to ensuring clear and accurate communication with

our customers. This involves providing comprehensive information about our products,
services, terms, and conditions. We will not engage in deceptive or misleading practices.

b) Responsiveness: We are committed to promptly addressing our customers' inquiries,

feedback, and concerns. Our Customer Care Services are designed to provide efficient
and effective support to ensure a positive customer experience.

c) Privacy: We respect the privacy of our customers and safeguard their personal
information in accordance with applicable data protection laws. Our commitment to
data security underscores our dedication to protecting our customers' sensitive
information.
d) Accessibility: We aim to enhance accessibility for all customers, including those with
disabilities. We continually work to improve the accessibility of our digital platforms
and physical facilities to ensure that all customers can engage with us seamlessly.

5.2 Pricing Transparency

Transparent pricing is fundamental to building trust with our customers. CNIX is

committed to providing accurate and comprehensive pricing information for our
products and services. Our pricing practices are guided by these principles:

a) Fairness: We endeavor to set prices that are fair, reasonable, and reflective of the
value our customers receive from our offerings.

b) Disclosure: We provide clear and complete pricing information, including any

associated costs, fees, and charges. Our pricing information is easily accessible to enable
customers to make informed purchasing decisions.

c) Updates: We keep our customers informed about any changes to pricing, fees, or
charges well in advance, allowing them ample time to adjust or make decisions.

5.3 Customer Safety

CNIX is unwavering in our commitment to prioritize the safety of our customers. We

take diligent steps to ensure that our products and services meet the highest safety
standards. Our approach to customer safety encompasses the following:

a) Product Safety: We are dedicated to providing products that are safe and free from
defects. Our products undergo rigorous testing and quality control processes to mitigate
potential risks to our customers.

b) Service Safety: In delivering our services, we prioritize the safety of our customers
and adhere to industry best practices. This includes employing safety measures in our
operations and interactions to minimize risks to customers.

c) Data Security: We place great emphasis on safeguarding our customers' data. Our
cyber security measures are designed to protect customer information from
unauthorized access, breaches, and cyber threats.

At CNIX, our relationship with our customers is based on trust, integrity, and mutual
respect. We are committed to upholding these principles in all our customer
interactions, pricing practices, and safety protocols. By prioritizing our customers'
interests, we aim to contribute to their well-being and the sustained success of
I. ACCOUNTING POLICIES

To establish a comprehensive accounting policy for the railway company, outlining

procedures and practices that ensure accurate financial reporting, transparency, and
compliance with accounting standards.

Basis of Accounting
Creating financial statements involves Management's use of judgments, estimates, and
assumptions that impact policy application and reported values of assets, liabilities,
income, and expenses. These are derived from Management's assessment of pertinent
facts as of the financial statement date and actual results may vary.

Revenue Recognition
Revenues are measured at the fair value of the consideration received and represent
receivables for service in the normal course of business.

a) Operations
CNIX uses the cash basis of accounting for its revenues from rail operations, and
non-rail revenues generated from rental of commercial and advertising spaces.
b) Interest Income
Interest income is accrued on a time proportion basis, by reference to the
principal amount outstanding and at the interest rates applicable.
c) Subsidy
In accordance with existing accounting and auditing laws, rules and regulations,
subsidies received from the National Government to fund railway projects, as
well as budgetary support for import duties and taxes, are recognized as Subsidy
Income.

Property, Plant and Equipment

Property, Plant and Equipment that qualifies for recognition as an Asset measured at
cost less accumulated depreciation. The initial cost of fixed assets consists of its
purchase price including import duties and non-refundable purchase taxes and any
costs directly attributable in bringing the asset to its working condition and location for
its intended use

Construction-in-Progress
Construction-in-Progress is stated at cost. This includes the cost of construction, plant
and equipment and other direct costs. Depreciation is taken up when the relevant assets
are completed and put into operational use.
Foreign Currency Transaction
Monetary assets and liabilities denominated in foreign currencies are restated using the
Philippine Dealing and Exchange Corporation System (PDEx). The resulting gains or
losses arising from the exchange differences are recognized in the Statement of
Comprehensive Income.

Borrowing Costs
Borrowing costs include interest charges, guarantee fees and other costs incurred in
connection with the loans used to finance the projects. It is generally expensed as
incurred. However, borrowing costs are capitalized if they are directly attributable to the
acquisition, construction or production of a qualifying asset and prior to the
commencement of operation.

Cash and Cash Equivalents

Cash includes cash on hand and in banks. CNIX considers all highly liquid instruments
that are readily convertible to known amounts of cash with original maturities of three
months or less from the date of acquisition as cash equivalents. Those that are intended
for various projects are presented under the Other Assets account.

Receivables
Receivables are stated at face value, net of allowance for doubtful accounts. Allowance
for Impairment-Receivables is established as a certain percentage of age of receivables,
as shown below

Inventories
Inventories are stated at cost, which include acquisition cost of inventories purchased.

Contingencies
Contingent assets are not recognized but disclosed when an inflow of economic benefits
is probable.

Depreciation
The land is not depreciated. The cost of improvements on leasehold properties is
amortized over the expected lease term or the estimated useful life of the improvements
to the Group, whichever is shorter. Depreciation on other assets is calculated using the
straight-line method to allocate their cost.

II. INTERNAL CONTROL FRAMEWORK POLICY

The Company’s internal control system is designed to provide reasonable assurance that
CNIX will achieve its goals. CNIX’s internal control system leverages the most up-to-date
organizational and methodological framework and best international and national
professional practices, operating in full compliance with the ethical standards applied
by the internal audit and control functions in the local and global business communities.

CNIX’s Board of Directors and its Audit and Risk Committee determine the overall
concept of the internal control system, review its performance assessment results, and
analyze its actual state subject to the nature, scale and conditions of CNIX Railways’
operations.

The main objectives of the internal control system are:

a) to ensure the efficiency and robustness of business operations;

b) to safeguard assets and use resources in a cost effective manner;
c) to identify and manage risks;
d) to ensure the accuracy and completeness of financial (accounting) and other
types of statements;
e) to ensure compliance with the laws and regulations and by-laws of CNIX
Railways.

III. GUIDING PRINCIPLES AND INTERNAL CONTROL STANDARDS

A. Guiding Principles
The internal control mechanism of the Company is shaped by its focal points and
internal control frameworks. This mechanism is centered around the operational
aspects of CNIX Railways' divisions and the business procedures of the Company.

Entities responsible for governance, including the Board of Directors and its Audit and
Risk Committee, the Chief Executive Officer who also serves as the Chairman of the
Management Board of CNIX Railways, pertinent deputies of the Chief Executive Officer,
and the Director for Internal Control and Audit, assume the responsibility of
implementing internal controls at the corporate level:

a) heads of branches, departments, divisions and units are responsible for putting
internal controls in place and ensuring their smooth running at the operational
level;
b) employees are responsible for the timely and efficient execution of the existing
internal control procedures;
c) in addition to implementing internal controls and ensuring their smooth running
in relevant business units, certain departments and divisions are also responsible
for exercising functional internal control within the given terms of reference in
relation to end-to-end processes;
The CNIX Internal Control Centre Responsibilities:

a) to organize and conduct follow-up internal control focused on promoting the

economic stability and financial transparency, including follow-up control
procedures and audits of financial and business operations of the Company’s
business units, its subsidiaries and affiliates as required, as well as other
companies, including non-commercial entities of CNIX Railways;
b) to provide Company management with timely information on business and
financial performance; violations and gaps; tax, financial and other risks
identified at business units, subsidiaries, affiliates and other entities of the
Company, as required, for management decision-making purposes;
c) to ensure timely elimination of violations and gaps in the operations of the
Company’s business units and other entities identified by the Centre.

B. INTERNAL CONTROLS STANDARDS

Efficiency and Robustness of Business Operations:

The system aims to optimize the effectiveness and resilience of CNIX's day-to-day
operations. It ensures that processes are streamlined and resource utilization is
optimized to enhance overall efficiency.

Asset Safeguarding and Cost-Effective Resource Utilization:

The system's focus is on protecting assets from misuse or unauthorized access. It also
ensures that resources are utilized economically, minimizing waste and unnecessary
expenditures.

Risk Identification and Management:

One of the system's key purposes is to pinpoint potential risks that could impact CNIX's
operations. By identifying these risks, the company can implement strategies to mitigate
and manage them effectively.

Accuracy and Completeness of Financial and Other Statements:

The internal control system ensures that financial and other relevant statements are
accurate and comprehensive. This includes maintaining accurate financial records and
ensuring that all pertinent information is included in statements.

Compliance with Laws and Regulations:

The system guarantees that CNIX Railways adheres to applicable laws, regulations, and
internal by-laws. This ensures ethical conduct, legal compliance, and reduces the risk of
legal consequences.
IV. RISK MANAGEMENT

Efficient risk management at CNIX is an ongoing and consistent procedure that

encompasses all levels within the organization. It is seamlessly incorporated into
business operations and decision-making processes to enhance the attainability of
objectives.

Internal control is an essential component of the risk management framework. The

combined risk management and internal control system (RMICS) is a fundamental
aspect of the company's governance structure, ensuring its sustainable growth even
amidst external uncertainties and fluctuations. This commitment is evident in the
established policies and guidelines, as well as the continuous enhancement of the risk
management process. The Risk Management and Internal Control Centre (the "Centre")
takes charge of overseeing and providing methodological support for the RMICS risk
management process at CNIX.

To establish a methodical and steadfast method for advancing the integrated RMICS,
CNIX Railway must execute its Risk Management and Internal Control Development
Programme. This program includes:
a) Establishing the risk management structure, encompassing regulatory and
methodological backing, process automation, and the enhancement of risk management
and internal control capabilities.
b) Ongoing supervision and reporting to governing bodies.
c) Self-evaluation.
d) Implementing the adopted approach throughout the organization.
e) Constructing and enhancing RMICS within CNIX Railways' subsidiaries using a
standardized approach to uphold the coherence of the risk management process.

KEY RISKS

Macroeconomic
a) Weaker than forecasted macroeconomic performance and lower freight volumes,
including as a result of more rigorous sanctions.
b) Higher than expected growth of prices for consumed products, including petroleum
products and electricity.

Mitigations:
Keeping in constant touch with the Government and key customers to provide them
with complete and objective information about potential adverse effects of the adopted
decisions.
Efficiency improvement initiatives, long-term contracts with suppliers.
Resolutions to provide development institutions with additional liquidity.

Regulation
a) No government resolutions on long-term financing of the railway transport
development or a failure to implement such resolutions.
b) Changes in the regulatory framework / regulations providing support to other
transport modes weakening the competitiveness of railway transport.
c) Liberalization of the railway passenger transportation market.
d) Liberalization of the railway freight transportation market.
e) Reduced public financing.

Mitigations:
Searching for alternative sources and tools of financing.
Optimizing technical solutions for capital investment projects.
Breaking down projects into stages with their subsequent implementation in the order
of priority.
Keeping in constant touch with the Government and key customers to provide them
with complete and objective information about potential adverse effects of the adopted
decisions for CNIX Railways.

Investment
a) Insufficient investment in infrastructure development
b) Failure to comply with the investment programme implementation schedule

Mitigations:
Optimizing technical solutions
Improving the investment project management framework

Management
a) Insufficient management competencies.

Mitigations:
Improving the management framework.
Sustainability risks
CNIX Railways pays particular attention to sustainability risks. CNIX Railways analyzes
international sustainability trends, reviews and improves its activity with a sustainable
perspective, which makes it possible to identify growth drivers and leverage new
sustainability opportunities in its activity balancing the opportunities for the Company
and respective risks.

Social risks
The Company addresses risks with regard to its employees and retirees as well as other
social partnership entities and personalities. Dealing with the risk of ineffective social
policy is primarily aimed at creating a sustainable working environment, and cultivating
the Company’s positive image to prevent decrease in labor productivity, staff motivation,
and performance, and avoid collective labor disputes and strikes.

The following measures are the action to mitigate this risk:

a) employee training;
b) analysis of the performance under the Collective Bargaining Agreement;
c) improvement and development of social benefits and guarantees for CNIX Railways’
employees and retirees;
d) staff monitoring, continuous information sharing and surveys through corporate
channels, implementation and development of electronic communication tools, analysis
of public appeals, participation in employee meetings, interaction with the trade union.

Health and safety risks

Production departments of the Company’s branches assessed professional risks for the
main types of hazardous occupations by conducting an integral assessment, defining the
acceptable risk levels and making lists of unacceptable and undesirable risks. The
measurement results were then evaluated and rated by the regional business units and
summarized in risk matrices for the main types of hazardous occupations.

Corruption risks
CNIX Railways’ Board of Directors will approve the risk appetite statements under
which the Company follows the principle of zero tolerance of corruption in any form or
manifestation thereof and takes all necessary actions to prevent and combat corruption,
mitigate fraud risks and build a common understanding of zero tolerance of corruption
among all stakeholders.

Climate change risks

The company places significant emphasis on assessing climate change risks, evaluating
their impact, and factoring them into operational planning. The primary concern
affecting the company's operations is the escalating instances of meteorological hazards
that pose a threat to railway activities. To counter these risks to the infrastructure, the
company employs various strengthening methods (such as anti-washout slab covers,
rock deposition, rock anchoring) and constructs protective structures to shield the track
bed from natural perils (like mudslides, landslides, avalanches, and rockfalls).

Cybersecurity risks
Information security risks are of no small importance for CNIX Railways. If they
materialize, information security threats may disrupt or suspend IT services, the
process flow and operations of the Company, including leakage of information with
restricted access.

The key information security measures implemented by CNIX Railways include:

- classification and categorisation of the Company’s information systems;

- information security threat modeling;
- proper arrangement of the information infrastructure components with due
account of information security;
- development of information protection requirements;
- design and implementation of information protection systems in the Company’s
information infrastructure;
- assessment of the system compliance with information security requirements;
- employee training in information protection;
- information security of the Company’ information systems in use;
- arrangement of the Company’ workflow with due account of information security
requirements;
- identification and handling of information security incidents;
- enhancement of the Company’s information security policies and guidelines;
- internal investigations of information security violations.