While all Performance Standards (PSs) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts that must be managed in a manner consistent with the following PSs: PS1: Social and Environmental Assessment and Management Systems; PS2: Labor and Working Conditions; PS3: Pollution Prevention and Abatement; PS4: Community Health, Safety and Security; and PS5: Land Acquisition and Involuntary Resettlement. PS6: Biodiversity Conservation and Sustainable Natural Resource Management is not expected to be relevant as the project sites are located in modified urban or sub-urban neighborhoods and no impact on biodiversity is therefore expected. PS7: Indigenous Peoples does not apply, as no impacts on such individuals or groups are expected. PS8: Cultural Heritage is not expected to apply as there are no known cultural heritage sites or issues associated with existing premises and are not expected for future developments. TCG will review the applicability of all PSs for each proposed new development.

The project has been categorized as Category B according to IFC’s Environmental and Social Review Procedure. The nature of ASHA’s operations, which involve the provision of educational services, is such that adverse E&S impacts are minimal. Key environmental, social, health and safety impacts associated with the Project during construction and operation include: the sponsor’s system to manage E&S issues during construction and operation of schools; land acquisition issues at campus sites; labor and working conditions; community and staff occupational health and safety issues; life and fire safety design and provisions; management and minimization of air, water and solid pollutants during construction and operation; energy and water usage efficiency; and community engagement. The project may result in a limited number of specific adverse environmental and social impacts that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. ASHA will manage its environmental and social performance in accordance with applicable local laws and regulations and international standards, including IFC’s Performance Standards on Social and Environmental Sustainability and IFC's Environmental, Health and Safety General Guidelines.

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with host country laws and regulations, IFC’s Social and Environmental Performance Standards, and Environmental, Health and Safety General Guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow. PS1: Social and Environmental Assessment and Management Systems: Social and Environmental Assessment: The existing facilities of ASHA are below the threshold stipulated by the Department of Environment and Natural Resources Administrative Order 96 – 37 and so do not require an Environmental Clearance Certificate (ECC). However, ASHA performs an informal social and environmental assessment during site selection and prior to opening each new school and will secure ECCs as required. Management Program: TCG has a very strong environmental ethos. The Group and the CEO, Annie Guerrero, have won a number of awards, particularly for waste management, and they have achieved widespread recognition of the “Cravings” brand, including ASHA, as a leader in waste management and environmental awareness raising in the community. In April 2010, the Group environmental management system, which is implemented by ASHA, was relaunched as Cravings Group Goes Green (CG3). The Group is in the process of applying for ISO 14001 certification of CG3. Organizational Capacity: The CG3 organization chart is very clear: four committees focus on Education, Enforcement, Engineering and Entrepreneurship, with direct links from representative departments in each business line, including ASHA, through the Pollution Control Officer (PCO) to the President and CEO. A number of activities have been undertaken by each group to reduce waste, minimize resource use and raise awareness amongst the staff. Training: The group organizes regular training programs on the CG3 initiatives, involving all levels of employees across the group, including ASHA. The CG3 includes a Super Green Me Reward System which is an in-house competition among employees and students. The scheme encourages awareness through monthly activities, contests, submitting EMS suggestions and observing best practices. Selected staff also receives external training, for example, on greening the supply chain and environmental management systems. Construction Management: Construction of the new schools will be undertaken by contractors. TCG has agreed to incorporate IFC PS compliant environmental, health and safety requirements in contracts for construction of new facilities and to ensure adequate oversight and management on construction sites. Monitoring: In 2011, ASHA intends to implement the Group resource use and waste monitoring program. Monitoring of environmental compliance will be carried out on a daily basis and reported weekly. PS2: Labor and Working Conditions: Working Conditions and Management of Workers Relationship: ASHA employs 45 staff (64% women). There is a detailed corporate employee’s handbook and code of discipline. The HR policies outline general management and staff rules, including recruitment procedures, probation periods, working conditions, wages and benefits, disciplinary procedures as well as non-discrimination and equal opportunity policies. There is a clear and recorded grievance handling mechanism. The company confirms that it strictly follows national labor laws. To date retrenchment has not been an issue; however the company intends to introduce a retrenchment policy in 2011 that is compliant with both local regulations and IFC PS2. Occupational Health and Safety (OHS): The OHS policies and procedures include a pre-employment and annual physical examinations for all staff; pre-enrollment medical exams for students, drug tests and wellness talks as well as first aid training. The number of OHS incidents is recorded and relate primarily to minor student accidents in the kitchen laboratories such as minor burns and cuts. OHS hazards have been identified and steps taken to avoid future accidents. PS3: Pollution Prevention and Abatement: The Company intends to carry out an assessment of environmental impacts at each school in 2011and will develop a program to work with its suppliers to monitor their environmental impacts. ASHA practices a number of energy savings initiatives, including ‘lights out’ for one hour over lunch, and end of day check that all lights and air conditioners are switched off. The company is also diligent about its preventative maintenance of appliances and uses energy efficient lighting. Refrigerants in use in air conditioners are R22. These will be replaced in 2011. The refrigerant in all fridges and freezers is R134. All waste is segregated and 80% is reused or recycled with 15% going to landfill. Organic waste from the ASHA kitchen laboratories is composted. The architect employed by TCG to prepare the design of future new build developments is a leading advocate of green architecture in the Philippines. The design of the Antipolo campus has been prepared and incorporates a range of energy and water saving features, such as rainwater harvesting and use of a three chamber septic tank with reed bed and sewage treatment plant that feeds the grey water system for toilet flushing and garden watering. The building has been orientated to minimize direct sunlight and maximize airflow. It is planned that the same architectural firm will design the other new buildings on behalf of TCG, to the same environmental standards. All new campuses will have their own sewage treatment systems and will operate within local and IFC limits. Green House Emissions: In 2010, ASHA used around 80,000 kWh of electricity and around 1700 m3 water in four of its five schools. In the fifth school, water and electricity are incorporated in the rent. PS4: Community Health, Safety and Security: Community Health and Safety Requirements: The Group employs a medical officer who provides services to the staff and students in Manila. One of the roles of the medical officer is to raise awareness on communicable diseases, off-campus activities of students and classes. The ASHA schools have an emergency preparedness and response plan that covers emergencies such as fire, earthquake, bomb threat and medical incidents. Life and Fire Safety: Host country regulatory requirements for educational premises in the Philippines require compliance with building codes, including life and fire safety (L&FS) codes, prior to receiving an operational license. While not directly funded by the IFC loan, TCG has a number of hotels, events places and conference centers as well as restaurants, bakeshops and cafes. Two of the hotels were visited as part of the appraisal and L&FS systems were found to be non-compliant with IFC’s L&FS guidelines. While all of TCG’s buildings are inspected annually and fire certificates provided by the Fire Department, and some upgrades are proposed in response to changing regulations, maintenance of systems appeared to be non-compliant. Notably, fire exits were used for storage, in one location lighting was not operational, and some fire extinguishers had been removed for servicing. Where the outlet is based in a mall the mall has its own fire certification process. The Group undertakes fire drills annually and is about to start quarterly inspections of fire equipment and detection systems. All kitchens/laboratories will be upgraded in 2011 to have fire suppression apparatus. To address the deficiencies in L&FS, TCG will contract a suitably qualified professional to undertake a L&FS assessment of all existing facilities in the Group with the objective of identifying life threatening and critical deficiencies together with corrective actions. Subject to reasonableness test (risk reduction vs costs vs practicality), TCG will implement all identified corrective actions in accordance with identified prioritization and schedule. For the planned new build developments and major renovations of existing facilities, at Antipolo, Quezon City, Taguig and possibly Naga and Pampanga, ASHA will commit to using an international L&FS standard such as the NFPA or equivalent. ASHA has reviewed IFC’s guidelines related to L&FS; including the requirement to develop an L&FS Master Plan for each Greenfield development and major renovation that identifies major fire risks, applicable codes, standards and regulations, and mitigation measures. The L&FS Master Plan is to be prepared by a suitably qualified professional acceptable to IFC who certifies that the design meets the requirements of IFC’s Life and Fire Safety guidelines. The qualified professional who prepares the L&FS Master Plan will undertake a review of L&FS systems of completed developments and certify that construction of these systems has been carried out in accordance with the accepted design. For new schools which are to be located in leased outlets in hotel complexes, such as at Cebu and possibly Naga and Pampanga, ASHA will contract a qualified professional to prepare a list of L&FS criteria and guidance for selection of potential premises. ASHA will use the guidance to conduct a L&FS assessment for potential premises and ensure that any required remedial actions will be implemented. PS5: Land Acquisition and Involuntary Resettlement Sites have been selected for the schools at four locations: At Antipolo, a Greenfield site is being purchased adjacent to the main road, next to residential properties. The land is vacant and being purchased on a willing seller-willing buyer basis. At Quezon City, a new school will be constructed at a currently developed site next door to existing TCG facilities; at Taguig land currently used as a car park will be leased and a new school constructed on it. At Naga, either space will be leased in a hotel complex or a vacant lot will be acquired. While there are no land acquisition issues anticipated with any of the development sites selected so far, ASHA recognizes that a proactive procedure for screening future land acquisition is needed. The Company is in the process of selecting sites for the new schools and has shared with IFC the site selection criteria. ASHA has reviewed the requirements of PS5 and will adopt a land acquisition ‘screening’ procedure in order to formally assess and document that no involuntary resettlement has occurred as a result of its expansion program, and notify IFC if there are unexpected issues concerning land acquisition on any new facilities.

Community engagement is important to ASHA. The Group has developed an open relationship with local communities aided by the accessibility of the schools, restaurants and hotels and to date there has been no call for formal community grievance handling procedures. Through TCG, ASHA engages in a program of CSR activities, including livelihood seminars held with local communities to develop skills in recycling technology, such as soap making, bag making, vinegar production, mushroom culture, handicrafts, composting, etc.

Company will disclose this ESRS and the ESAP at its website: www.tcgphil.com, as well as locally at the following address(es): TCG Main Office: 287 Katipunan Avenue, Loyola Heights, Quezon City ASHA Campuses: Barangay Sta. Cruz, Sumulong Highway, Antipolo City 28 Kamias Road, Barangay West Kamias, Quezon City Public Locations: Barangay Hall, Angeles City, Pampanga All inquiries and comments may be directed to: Marinela G. Trinidad 287 Katipunan Avenue, Loyola Heights, Quezon City (632)4261338