Annual Corporate Governance Report

March 20, 2013 SEC MEMORANDUM CIRCULAR NO. 05-13 TO : Listed Companies SUBJECT : Annual Corporate Governance Report The Commission, pursuant to its regulatory and supervisory power under Section 5 of the Securities Regulation Code, mandates all listed companies to submit an Annual Corporate Governance Report subject to the following Guidelines: I. Three copies of a fully accomplished ACGR shall be submitted on May 30, 2013 and every five (5) years thereafter; II. On the second (2nd) to fourth (4th) year from the effectivity of this Circular, only changes or updates shall be required to be indicated; III. A basic penalty of P20,000.00 shall be imposed for the late filing of the Report. Continuous failure of the company to comply shall subject it to a monthly penalty of P2,000.00 shall be imposed until the said report is filed; IV. The submission of following Certifications shall be discontinued: 1) Certifications of Attendance of Directors in Board meetings; and 2) Certification of Compliance with the Manual of Corporate Governance. V. The Corporate Governance section in the Annual Report (SEC Form 17-A) shall be deleted. This Circular shall take effect fifteen (15) days from publication in a newspaper of general circulation in the Philippines. HIESTA Signed this 20th day of March 2013, Mandaluyong City, Philippines. For the Commission: (SGD.) TERESITA J. HERBOSA Chairperson ATTACHMENT SEC FORM ACGR ANNUAL CORPORATE GOVERNANCE REPORT GENERAL INSTRUCTIONS (A) Use of Form ACGR This SEC Form shall be used to meet the requirements of the Revised Code of Corporate Governance. (B) Preparation of Report These general instructions are not to be filed with the report. The instructions to the various captions of the form shall not be omitted from the report as filed. The report shall contain the numbers and captions of all items. If any item is inapplicable or the answer thereto is in the negative , an appropriate statement to that effect shall be made. Provide an explanation on why the item does not apply to the company or on how the company's practice differs from the Code. (C) Signature and Filing of the Report A. Three (3) complete set of the report shall be filed with the Main Office of the Commission. B. At least one complete copy of the report filed with the Commission shall be manually signed. C. All reports shall comply with the full disclosure requirements of the Securities Regulation Code. TIAEac D. This report is required to be filed annually together with the company's annual report. (D) Filing an Amendment Any material change in the facts set forth in the report occurring within the year shall be reported through SEC Form 17-C. The cover page for the SEC Form 17-C shall indicate "Amendment to the ACGR". Table of Contents A. Board Matters 1) BOARD OF DIRECTORS (a) Composition of the Board (b) Directorship in Other Companies (c) Shareholding in the Company 2) CHAIRMAN AND CEO 3) OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS 4) CHANGES IN THE BOARD OF DIRECTORS 5) ORIENTATION AND EDUCATION PROGRAM B. Code of Business Conduct & Ethics 1) POLICIES 2) DISSEMINATION OF CODE 3) COMPLIANCE WITH CODE EIAaDC 4) RELATED PARTY TRANSACTIONS (a) Policies and Procedures (b) Conflict of Interest 5) FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS 6) ALTERNATIVE DISPUTE RESOLUTION C. Board Meetings & Attendance 1) SCHEDULE OF MEETINGS 2) DETAILS OF ATTENDANCE OF DIRECTORS 3) SEPARATE MEETING OF NON-EXECUTIVE AND DIRECTORS 4) ACCESS TO INFORMATION 5) EXTERNAL ADVICE 6) CHANGES IN EXISTING POLICIES D. Remuneration Matters 1) REMUNERATION PROCESS 2) REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS 3) AGGREGATE REMUNERATION 4) STOCK RIGHTS, OPTIONS AND WARRANTS 5) REMUNERATION OF MANAGEMENT E. Board Committees 1) NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES 2) COMMITTEE MEMBERS cIETHa 3) CHANGES IN COMMITTEE MEMBERS 4) WORK DONE AND ISSUES ADDRESSED 5) COMMITTEE PROGRAM F. Risk Management System 1) STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM 2) RISK POLICY 3) CONTROL SYSTEM G. Internal Audit and Control 1) STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM 2) INTERNAL AUDIT (a) Role, Scope and Internal Audit Function (b) Appointment/Removal of Internal Auditor (c) Reporting Relationship with the Audit Committee (d) Resignation, Re-assignment and Reasons (e) Progress against Plans, Issues, Findings and Examination Trends aDcTHE (f) Audit Control Policies and Procedures (g) Mechanisms and Safeguards H. Rights of Stockholders 1) RIGHT TO PARTICIPATE EFFECTIVELY IN STOCKHOLDERS' MEETINGS 2) TREATMENT OF MINORITY STOCKHOLDERS I. Investors Relations Program J. Corporate Social Responsibility Initiatives K. Board, Director, Committee and CEO Appraisal L. Internal Breaches and Sanctions A. Board Matters 1) Board of Directors ICDcEA Number of Directors per Articles of Incorporation ____________ Actual number of Directors for the year ____________ (a) Composition of the Board Complete the table with information on the Board of Directors: Director's Type [Executive If Nominator in Date Date last Elected No. of Name (ED), Non- nominee, the last election first elected (if ID, when years Executive identify (if ID, state the elected state the (Annual/ served (NED) or the relationship with number of Special as Independent principal the nominator) years served Meeting) director Director (ID)] as ID) 1 _______ ___________ _______ __________ ________ __________ _______ _____ _______ ___________ _______ __________ ________ __________ _______ _____ _______ ___________ _______ __________ ________ __________ _______ _____ _______ ___________ _______ __________ ________ __________ _______ _____ _______ ___________ _______ __________ ________ __________ _______ _____ _______ ___________ _______ __________ ________ __________ _______ _____ _______ ___________ _______ __________ ________ __________ _______ _____ (b) Provide a brief summary of the corporate governance policy that the board of directors has adopted. Please emphasize the policy/ies relative to the treatment of all shareholders, respect for the rights of minority shareholders and of other stakeholders, disclosure duties, and board responsibilities. (c) How often does the Board review and approve the vision and mission? (d) Directorship in Other Companies (i) Directorship in the Company's Group 2 Identify, as and if applicable, the members of the company's Board of Directors who hold the office of director in other companies within its Group: Director's Name Corporate Name of the Type of Directorship Group Company (Executive, Non-Executive, Independent). Indicate if director is also the Chairman. _____________ _________________ ________________________ _____________ _________________ ________________________ _____________ _________________ ________________________ _____________ _________________ ________________________ (ii) Directorship in Other Listed Companies Identify, as and if applicable, the members of the company's Board of Directors who are also directors of publicly-listed companies outside of its Group: DEICTS Director's Name Name of Type of Directorship Listed Company (Executive, Non-Executive, Independent). Indicate if director is also the Chairman. _____________ _________________ ________________________ _____________ _________________ ________________________ _____________ _________________ ________________________ (iii) Relationship within the Company and its Group Provide details, as and if applicable, of any relation among the members of the Board of Directors, which links them to significant shareholders in the company and/or in its group: Director's Name Name of the Significant Description of the Shareholder relationship ______________ ___________________ _________________ ______________ ___________________ _________________ ______________ ___________________ _________________ ______________ ___________________ _________________ (iv) Has the company set a limit on the number of board seats in other companies (publicly listed, ordinary and companies with secondary license) that an individual director or CEO may hold simultaneously? In particular, is the limit of five board seats in other publicly listed companies imposed and observed? If yes, briefly describe other guidelines: Guidelines Maximum Number of Directorships in other companies Executive Director __________ ___________________ Non-Executive Director __________ ___________________ CEO __________ ___________________ (e) Shareholding in the Company Complete the following table on the members of the company's Board of Directors who directly and indirectly own shares in the company: Name of Director Number of Number of % of Direct shares Indirect shares/Through Capital (name of record owner) Stock ______________ __________ __________________ ________ ______________ __________ __________________ ________ ______________ __________ __________________ ________ ______________ __________ __________________ ________ TOTAL __________ __________________ ________ 2) Chairman and CEO (a) Do different persons assume the role of Chairman of the Board of Directors and CEO? If no, describe the checks and balances laid down to ensure that the Board gets the benefit of independent views. TECIHD Yes [ ] No [ ] Identify the Chair and CEO: Chairman of the Board ___________________ CEO/President ___________________ (b) Roles, Accountabilities and Deliverables Define and clarify the roles, accountabilities and deliverables of the Chairman and CEO. TaDAIS Chairman Chief Executive Officer Role _____________ ___________________ Accountabilities _____________ ___________________ Deliverables _____________ ___________________ 3) Explain how the board of directors plan for the succession of the CEO/Managing Director/President and the top key management positions? 4) Other Executive, Non-Executive and Independent Directors Does the company have a policy of ensuring diversity of experience and background of directors in the board? Please explain. Does it ensure that at least one non-executive director has an experience in the sector or industry the company belongs to? Please explain. Define and clarify the roles, accountabilities and deliverables of the Executive, Non-Executive and Independent Directors: Executive Non-Executive Independent Director Role ___________ _____________ __________________ Accountabilities ___________ _____________ __________________ Deliverables ___________ _____________ __________________ Provide the company's definition of "independence" and describe the company's compliance to the definition. Does the company have a term limit of five consecutive years for independent directors? If after two years, the company wishes to bring back an independent director who had served for five years, does it limit the term for no more than four additional years? Please explain. 5) Changes in the Board of Directors (Executive, Non-Executive and Independent Directors) (a) Resignation/Death/Removal aASDTE Indicate any changes in the composition of the Board of Directors that happened during the period: Name Position Date of Cessation Reason ____________ __________ ________________ __________ ____________ __________ ________________ __________ (b) Selection/Appointment, Re-election, Disqualification, Removal, Reinstatement and Suspension Describe the procedures for the selection/appointment, re-election, disqualification, removal, reinstatement and suspension of the members of the Board of Directors. Provide details of the processes adopted (including the frequency of election) and the criteria employed in each procedure: Procedure Process Adopted Criteria a. Selection/Appointment (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ b. Re-appointment (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ c. Permanent Disqualification (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ d. Temporary Disqualification (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ e. Removal (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ f. Reinstatement (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ g. Suspension (i) Executive Directors _______________ ____________ (ii) Non-Executive Directors _______________ ____________ (iii) Independent Directors _______________ ____________ Voting Result of the last Annual General Meeting Name of Director Votes Received _____________________ ______________________ _____________________ ______________________ 6) Orientation and Education Program TacADE (a) Disclose details of the company's orientation program for new directors, if any. (b) State any in-house training and external courses attended by Directors and Senior Management 3 for the past three (3) years. (c) Continuing education programs for directors: programs and seminars and roundtables attended during the year. Name of Date of Training Program Name of Training Director/Officer Institution _________________ ______________ ___________ _____________ _________________ ______________ ___________ _____________ _________________ ______________ ___________ _____________ B. Code of Business Conduct & Ethics 1) Discuss briefly the company's policies on the following business conduct or ethics affecting directors, senior management and employees: Business Conduct & Directors Senior Management Employees Ethics (a) Conflict of Interest _________ ______________ ___________ (b) Conduct of Business and Fair Dealings _________ ______________ ___________ (c) Receipt of gifts from third parties _________ ______________ ___________ (d) Compliance with Laws & Regulations _________ ______________ ___________ (e) Respect for Trade Secrets/Use of Non- public Information _________ ______________ ___________ (f) Use of Company Funds, Assets and Information _________ ______________ ___________ (g) Employment & Labor Laws & Policies _________ ______________ ___________ (h) Disciplinary action _________ ______________ ___________ (i) Whistle Blower _________ ______________ ___________ (j) Conflict Resolution _________ ______________ ___________ 2) Has the code of ethics or conduct been disseminated to all directors, senior management and employees? CaTcSA 3) Discuss how the company implements and monitors compliance with the code of ethics or conduct. 4) Related Party Transactions (a) Policies and Procedures Describe the company's policies and procedures for the review, approval or ratification, monitoring and recording of related party transactions between and among the company and its parent, joint ventures, subsidiaries, associates, affiliates, substantial stockholders, officers and directors, including their spouses, children and dependent siblings and parents and of interlocking director relationships of members of the Board. Related Party Transactions Policies and Procedures (1) Parent Company ___________________________ (2) Joint Ventures ___________________________ (3) Subsidiaries ___________________________ (4) Entities Under Common Control ___________________________ (5) Substantial Stockholders ___________________________ (6) Officers including spouse/ children/siblings/parents ___________________________ (7) Directors including spouse/ children/siblings/parents ___________________________ (8) Interlocking director relationship of Board of Directors ___________________________ (b) Conflict of Interest (i) Directors/Officers and 5% or more Shareholders Identify any actual or probable conflict of interest to which directors/officers/5% or more shareholders may be involved. Details of Conflict of Interest (Actual or Probable) Name of Director/s __________________________ Name of Officer/s __________________________ Name of Significant Shareholders __________________________ (ii) Mechanism Describe the mechanism laid down to detect, determine and resolve any possible conflict of interest between the company and/or its group and their directors, officers and significant shareholders. Directors/Officers/Significant Shareholders Company ___________________________________ Group ___________________________________ 5) Family, Commercial and Contractual Relations (a) Indicate, if applicable, any relation of a family, 4 commercial, contractual or business nature that exists between the holders of significant equity (5% or more), to the extent that they are known to the company: DAETHc Names of Related Type of Relationship Brief Description of the Significant Shareholders Relationship ______________________ _________________ ___________________ ______________________ _________________ ___________________ ______________________ _________________ ___________________ ______________________ _________________ ___________________ (b) Indicate, if applicable, any relation of a commercial, contractual or business nature that exists between the holders of significant equity (5% or more) and the company: Names of Related Type of Relationship Brief Description Significant Shareholders ______________________ _________________ ___________________ ______________________ _________________ ___________________ ______________________ _________________ ___________________ ______________________ _________________ ___________________ (c) Indicate any shareholder agreements that may impact on the control, ownership and strategic direction of the company: Names of Shareholders % of Capital Stock Brief Description of the affected (Parties) Transaction ______________________ _________________ ___________________ ______________________ _________________ ___________________ 6) Alternative Dispute Resolution HSTaEC Describe the alternative dispute resolution system adopted by the company for the last three (3) years in amicably settling conflicts or differences between the corporation and its stockholders, and the corporation and third parties, including regulatory authorities. Alternative Dispute Resolution System Corporation & Stockholders _________________________________ Corporation & Third Parties _________________________________ Corporation & Regulatory Authorities _________________________________ C. Board Meetings & Attendance 1) Are Board of Directors' meetings scheduled before or at the beginning of the year? 2) Attendance of Directors Board Name Date of No. of No. of % Election Meetings Held Meetings during the Attended year Chairman ______________ _________ __________ _________ _____ Member ______________ _________ __________ _________ _____ Member ______________ _________ __________ _________ _____ Member ______________ _________ __________ _________ _____ Member ______________ _________ __________ _________ _____ Member ______________ _________ __________ _________ _____ Member ______________ _________ __________ _________ _____ Independent ______________ _________ __________ _________ _____ Independent ______________ _________ __________ _________ _____ 3) Do non-executive directors have a separate meeting during the year without the presence of any executive? If yes, how many times? caITAC 4) Is the minimum quorum requirement for Board decisions set at two-thirds of board members? Please explain. 5) Access to Information: (a) How many days in advance are board papers 5 for board of directors meetings provided to the board? (b) Do board members have independent access to Management and the Corporate Secretary? (c) State the policy of the role of the company secretary. Does such role include assisting the Chairman in preparing the board agenda, facilitating training of directors, keeping directors updated regarding any relevant statutory and regulatory changes, etc.? (d) Is the company secretary trained in legal, accountancy or company secretarial practices? Please explain should the answer be in the negative. (e) Committee Procedures Disclose whether there is a procedure that Directors can avail of to enable them to get information necessary to be able to prepare in advance for the meetings of different committees: Yes [ ] No [ ] Committee Details of the procedures Executive ___________________________ Audit ___________________________ Nomination ___________________________ Remuneration ___________________________ Others (specify) ___________________________ 6) External Advice Indicate whether or not a procedure exists whereby directors can receive external advice and, if so, provide details: EcHaAC Procedures Details ______________________ ___________________________ ______________________ ___________________________ ______________________ ___________________________ ______________________ ___________________________ 7) Change/s in existing policies Indicate, if applicable, any change/s introduced by the Board of Directors (during its most recent term) on existing policies that may have an effect on the business of the company and the reason/s for the change: Existing Policies Changes Reason __________________ _________________ ________________ __________________ _________________ ________________ __________________ _________________ ________________ __________________ _________________ ________________ __________________ _________________ ________________ D. Remuneration Matters 1) Remuneration Process Disclose the process used for determining the remuneration of the CEO and the four (4) most highly compensated management officers: Process CEO Top 4 Highest Paid Management Officers (1) Fixed remuneration ________________ _____________________ (2) Variable remuneration ________________ _____________________ (3) Per diem allowance ________________ _____________________ (4) Bonus ________________ _____________________ (5) Stock Options and other financial instruments ________________ _____________________ (6) Others (specify) ________________ _____________________ 2) Remuneration Policy and Structure for Executive and Non-Executive Directors Disclose the company's policy on remuneration and the structure of its compensation package. Explain how the compensation of Executive and Non-Executive Directors is calculated. Remuneration Structure of How Policy Compensation Compensation is Packages Calculated Executive Directors ____________ ______________ ____________ Non-Executive Directors ____________ ______________ ____________ Do stockholders have the opportunity to approve the decision on total remuneration (fees, allowances, benefits-in-kind and other emoluments) of board of directors? Provide details for the last three (3) years. Remuneration Scheme Date of Stockholders' Approval _______________________ ____________________________ _______________________ ____________________________ _______________________ ____________________________ 3) Aggregate Remuneration Complete the following table on the aggregate remuneration accrued during the most recent year: SECIcT Remuneration Item Executive Non-Executive Directors Independent Directors (other than independent Directors directors) (a) Fixed Remuneration ___________ ___________________ ____________ (b) Variable Remuneration ___________ ___________________ ____________ (c) Per diem Allowance ___________ ___________________ ____________ (d) Bonuses ___________ ___________________ ____________ (e) Stock Options and/or other financial instruments ___________ ___________________ ____________ (f) Others (Specify) ___________ ___________________ ____________ Total ___________ ___________________ ____________ Other Benefits Executive Non-Executive Director Independent Directors (other than independent Directors directors) 1) Advances ___________ ___________________ ____________ 2) Credit granted ___________ ___________________ ____________ 3) Pension Plan/s Contributions ___________ ___________________ ____________ (d) Pension Plans, Obligations incurred ___________ ___________________ ____________ (e) Life Insurance Premium ___________ ___________________ ____________ (f) Hospitalization Plan ___________ ___________________ ____________ (g) Car Plan ___________ ___________________ ____________ (h) Others (Specify) ___________ ___________________ ____________ Total ___________ ___________________ ____________ 4) Stock Rights, Options and Warrants (a) Board of Directors Complete the following table, on the members of the company's Board of Directors who own or are entitled to stock rights, options or warrants over the company's shares: Director's Name Name of Direct Number of Number of Total % from Option/Rights/ Indirect Equivalent Capital Stock Warrants Option/Rights/ Shares Warrants ______________ _____________ ____________ ____________ ____________ ______________ _____________ ____________ ____________ ____________ ______________ _____________ ____________ ____________ ____________ ______________ _____________ ____________ ____________ ____________ ______________ _____________ ____________ ____________ ____________ (b) Amendments of Incentive Programs Indicate any amendments and discontinuation of any incentive programs introduced, including the criteria used in the creation of the program. Disclose whether these are subject to approval during the Annual Stockholders' Meeting: AcICHD Incentive Program Amendments Date of Stockholder's Approval _________________ ______________ _____________________ _________________ ______________ _____________________ _________________ ______________ _____________________ 5) Remuneration of Management Identify the five (5) members of management who are not at the same time executive directors and indicate the total remuneration received during the financial year: Name of Officer/Position Total Remuneration _________________________ _________________________ _________________________ _________________________ _________________________ E. Board Committees 1) Number of Members, Functions and Responsibilities Provide details on the number of members of each committee, its functions, key responsibilities and the power/authority delegated to it by the Board: CacEID No. of Members Committee Executive Non- Independent Committee Functions Key Power Director executive Director Charter Responsibilities (ED) Director (ID) (NED) Executive _______ _______ _________ ________ ________ _________ _______ Audit _______ _______ _________ ________ ________ _________ _______ Nomination _______ _______ _________ ________ ________ _________ _______ Remuneration _______ _______ _________ ________ ________ _________ _______ Others (specify) _______ _______ _________ ________ ________ _________ _______ 2) Committee Members (a) Executive Committee Office Name Date of No. of No. of % Length of Appointment Meetings Meetings Service in Held Attended the Committee Chairman _______________ __________ ________ ________ ______ ________ Member (ED) _______________ __________ ________ ________ ______ ________ Member (NED) _______________ __________ ________ ________ ______ ________ Member (lD) _______________ __________ ________ ________ ______ ________ Member _______________ __________ ________ ________ ______ ________ (b) Audit Committee Office Name Date of No. of No. of % Length of Appointment Meetings Meetings Service in Held Attended the Committee Chairman _______________ __________ ________ ________ ______ ________ Member (ED) _______________ __________ ________ ________ ______ ________ Member (NED) _______________ __________ ________ ________ ______ ________ Member (lD) _______________ __________ ________ ________ ______ ________ Member _______________ __________ ________ ________ ______ ________ Disclose the profile or qualifications of the Audit Committee members. Describe the Audit Committee's responsibility relative to the external auditor. (c) Nomination Committee Office Name Date of No. of No. of % Length of Appointment Meetings Meetings Service in Held Attended the Committee Chairman _______________ __________ ________ ________ ______ ________ Member (ED) _______________ __________ ________ ________ ______ ________ Member (NED) _______________ __________ ________ ________ ______ ________ Member (lD) _______________ __________ ________ ________ ______ ________ Member _______________ __________ ________ ________ ______ ________ (d) Remuneration Committee Office Name Date of No. of No. of % Length of Appointment Meetings Meetings Service in Held Attended the Committee Chairman _______________ __________ ________ ________ ______ ________ Member (ED) _______________ __________ ________ ________ ______ ________ Member (NED) _______________ __________ ________ ________ ______ ________ Member (lD) _______________ __________ ________ ________ ______ ________ Member _______________ __________ ________ ________ ______ ________ (e) Others (Specify) Provide the same information on all other committees constituted by the Board of Directors: TASCEc Office Name Date of No. of No. of % Length of Appointment Meetings Meetings Service in Held Attended the Committee Chairman _______________ __________ ________ ________ ______ ________ Member (ED) _______________ __________ ________ ________ ______ ________ Member (NED) _______________ __________ ________ ________ ______ ________ Member (lD) _______________ __________ ________ ________ ______ ________ Member _______________ __________ ________ ________ ______ ________ 3) Changes in Committee Members Indicate any changes in committee membership that occurred during the year and the reason for the changes: Name of Committee Name Reason Executive ____________________ _________________ Audit ____________________ _________________ Nomination ____________________ _________________ Remuneration ____________________ _________________ Others (specify) ____________________ _________________ 4) Work Done and Issues Addressed Describe the work done by each committee and the significant issues addressed during the year. Name of Committee Name Reason Executive ____________________ _________________ Audit ____________________ _________________ Nomination ____________________ _________________ Remuneration ____________________ _________________ Others (specify) ____________________ _________________ 5) Committee Program Provide a list of programs that each committee plans to undertake to address relevant issues in the improvement or enforcement of effective governance for the coming year. SEAHcT Name of Committee Name Reason Executive ____________________ _________________ Audit ____________________ _________________ Nomination ____________________ _________________ Remuneration ____________________ _________________ Others (specify) ____________________ _________________ F. Risk Management System 1) Disclose the following: (a) Overall risk management philosophy of the company; (b) A statement that the directors have reviewed the effectiveness of the risk management system and commenting on the adequacy thereof; (c) Period covered by the review; (d) How often the risk management system is reviewed and the directors' criteria for assessing its effectiveness; and (e) Where no review was conducted during the year, an explanation why not. 2) Risk Policy (a) Company Give a general description of the company's risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along with the objective behind the policy for each kind of risk: IEcaHS Risk Exposure Risk Management Policy Objective _____________ ____________________ ___________ _____________ ____________________ ___________ _____________ ____________________ ___________ _____________ ____________________ ___________ _____________ ____________________ ___________ (b) Group Give a general description of the Group's risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along with the objective behind the policy for each kind of risk: Risk Exposure Risk Management Policy Objective _____________ ____________________ ___________ _____________ ____________________ ___________ _____________ ____________________ ___________ _____________ ____________________ ___________ _____________ ____________________ ___________ (c) Minority Shareholders Indicate the principal risk of the exercise of controlling shareholders' voting power. ASETHC Risk to Minority Shareholders __________________________________________ __________________________________________ __________________________________________ 3) Control System Set Up (a) Company Briefly describe the control systems set up to assess, manage and control the main issue/s faced by the company: Risk Exposure Risk Assessment Risk Management and Control (Monitoring and (Structures, Procedures, Measurement Process) Actions Taken) ____________ ___________________ _____________________ ____________ ___________________ _____________________ ____________ ___________________ _____________________ ____________ ___________________ _____________________ ____________ ___________________ _____________________ (b) Group Briefly describe the control systems set up to assess, manage and control the main issue/s faced by the company: DcSACE Risk Exposure Risk Assessment Risk Management and Control (Monitoring and (Structures, Procedures, Measurement Process) Actions Taken) ____________ ___________________ _____________________ ____________ ___________________ _____________________ ____________ ___________________ _____________________ ____________ ___________________ _____________________ ____________ ___________________ _____________________ (c) Committee Identify the committee or any other body of corporate governance in charge of laying down and supervising these control mechanisms, and give details of its functions: Committee/Unit Control Mechanism Details of its Functions ____________ ___________________ _____________________ ____________ ___________________ _____________________ G. Internal Audit and Control 1) Internal Control System Disclose the following information pertaining to the internal control system of the company: (a) Explain how the internal control system is defined for the company; (b) A statement that the directors have reviewed the effectiveness of the internal control system and whether they consider them effective and adequate; (c) Period covered by the review; (d) How often internal controls are reviewed and the directors' criteria for assessing the effectiveness of the internal control system; and (e) Where no review was conducted during the year, an explanation why not. EHCaDS 2) Internal Audit (a) Role, Scope and Internal Audit Function Give a general description of the role, scope of internal audit work and other details of the internal audit function. Role Scope Indicate whether Name of Chief Reporting In-house or Internal process Outsource Auditor/Auditing Internal Audit Firm Function _________ ___________ ____________ ________________ _____________ _________ ___________ ____________ ________________ _____________ (b) Do the appointment and/or removal of the Internal Auditor or the accounting/auditing firm or corporation to which the internal audit function is outsourced require the approval of the audit committee? (c) Discuss the internal auditor's reporting relationship with the audit committee. Does the internal auditor have direct and unfettered access to the board of directors and the audit committee and to all records, properties and personnel? (d) Resignation, Re-assignment and Reasons Disclose any resignation/s or re-assignment of the internal audit staff (including those employed by the third-party auditing firm) and the reason/s for them. EHSIcT Name of Audit Staff Reason ___________________ ___________________________ ___________________ ___________________________ ___________________ ___________________________ (e) Progress against Plans, Issues, Findings and Examination Trends State the internal audit's progress against plans, significant issues, significant findings and examination trends. Progress Against Plans _________________________ Issues 6 _________________________ Findings 7 _________________________ Examination Trends _________________________ [The relationship among progress, plans, issues and findings should be viewed as an internal control review cycle which involves the following step-by-step activities: 1) Preparation of an audit plan inclusive of a timeline and milestones; 2) Conduct of examination based on the plan; 3) Evaluation of the progress in the implementation of the plan; 4) Documentation of issues and findings as a result of the examination; 5) Determination of the pervasive issues and findings ("examination trends") based on single year result and/or year-to-year results; 6) Conduct of the foregoing procedures on a regular basis.] (f) Audit Control Policies and Procedures HEaCcD Disclose all internal audit controls, policies and procedures that have been established by the company and the result of an assessment as to whether the established controls, policies and procedures have been implemented under the column "Implementation." Policies & Procedures Implementation ______________________ ________________________ ______________________ ________________________ ______________________ ________________________ (g) Mechanism and Safeguards State the mechanism established by the company to safeguard the independence of the auditors, financial analysts, investment banks and rating agencies (example, restrictions on trading in the company's shares and imposition of internal approval procedures for these transactions, limitation on the non-audit services that an external auditor may provide to the company): Auditors Financial Analysts Investment Banks Rating Agencies (Internal and External) _________________ _______________ _____________ _____________ _________________ _______________ _____________ _____________ (h) State the officers (preferably the Chairman and the CEO) who will have to attest to the company's full compliance with the SEC Code of Corporate Governance. Such confirmation must state that all directors, officers and employees of the company have been given proper instruction on their respective duties as mandated by the Code and that internal mechanisms are in place to ensure that compliance. aIcDCA H. Role of Stakeholders 1) Disclose the company's policy and activities relative to the following: Policy Activities Customers' welfare ________________ ______________ Supplier/contractor selection practice ________________ ______________ Environmentally friendly value-chain ________________ ______________ Community interaction ________________ ______________ Anti-corruption programmes and procedures? ________________ ______________ Safeguarding creditors' rights ________________ ______________ 2) Does the company have a separate corporate responsibility (CR) report/section or sustainability report/section? 3) Performance-enhancing mechanisms for employee participation. (a) What are the company's policy for its employees' safety, health, and welfare? (b) Show data relating to health, safety and welfare of its employees. (c) State the company's training and development programmes for its employees. Show the data. (d) State the company's reward/compensation policy that accounts for the performance of the company beyond short-term financial measures. 4) What are the company's procedures for handling complaints by employees concerning illegal (including corruption) and unethical behaviour? Explain how employees are protected from retaliation. IDEScC I. Disclosure and Transparency 1) Ownership Structure (a) Holding 5% shareholding or more Shareholder Number of Shares Percent Beneficial Owner ______________ ________________ ___________ _________________ ______________ ________________ ___________ _________________ Name of Senior Number of Direct Number of % of Management shares Indirect shares/Through Capital (name of record owner) Stock _____________ _____________ __________________ ___________ _____________ _____________ __________________ ___________ _____________ _____________ __________________ ___________ _____________ _____________ __________________ ___________ Total _____________ __________________ ___________ 2) Does the Annual Report disclose the following: Key risks ___________ Corporate objectives ___________ Financial performance indicators ___________ Non-financial performance indicators ___________ Dividend policy ___________ Details of whistle-blowing policy ___________ Biographical details (at least age, qualifications, date of first appointment, relevant experience, and any other directorships of listed companies) of directors/ commissioners ___________ Training and/or continuing education programme attended by each director/commissioner ___________ Number of board of directors/commissioners meetings held during the year ___________ Attendance details of each director/commissioner in respect of meetings held ___________ Details of remuneration of the CEO and each member of the board of directors/commissioners ___________ Should the Annual Report not disclose any of the above, please indicate the reason for the non-disclosure. IASCTD 3) External Auditor's fee Name of auditor Audit Fee Non-audit Fee ________________ _____________ _______________ ________________ _____________ _______________ 4) Medium of Communication List down the mode/s of communication that the company is using for disseminating information. 5) Date of release of audited financial report: 6) Company Website Does the company have a website disclosing up-to-date information about the following? Business operations ___________ Financial statements/reports (current and prior years) ___________ Materials provided in briefings to analysts and media ___________ Shareholding structure ___________ Group corporate structure ___________ Downloadable annual report ___________ Notice of AGM and/or EGM ___________ Company's constitution (company's by-laws, memorandum and articles of association) ___________ Should any of the foregoing information be not disclosed, please indicate the reason thereto. 7) Disclosure of RPT RPT Relationship Nature Value _________________ ____________ ____________ _____________ _________________ ____________ ____________ _____________ When RPTs are involved, what processes are in place to address them in the manner that will safeguard the interest of the company and in particular of its minority shareholders and other stakeholders? J. Rights of Stockholders 1) Right to participate effectively in and vote in Annual/Special Stockholders' Meetings (a) Quorum Give details on the quorum required to convene the Annual/Special Stockholders' Meeting as set forth in its By-laws. Quorum Required ____________________ (b) System Used to Approve Corporate Acts Explain the system used to approve corporate acts. System Used _______________________________ Description _______________________________ (c) Stockholders' Rights List any Stockholders' Rights concerning Annual/Special Stockholders' Meeting that differ from those laid down in the Corporation Code. CHIEDS Stockholders' Rights under Stockholders' Rights not in The Corporation Code The Corporation Code _______________________ _________________________ _______________________ _________________________ _______________________ _________________________ Dividends Declaration Date Record Date Payment Date _______________ ______________ _______________ (d) Stockholders' Participation 1. State, if any, the measures adopted to promote stockholder participation in the Annual/Special Stockholders' Meeting, including the procedure on how stockholders and other parties interested may communicate directly with the Chairman of the Board, individual directors or board committees. Include in the discussion the steps the Board has taken to solicit and understand the views of the stockholders as well as procedures for putting forward proposals at stockholders' meetings. 2. Measures Adopted 3. Communication Procedure 4. ______________________ 5. ________________________ 6. ______________________ 7. ________________________ 8. State the company policy of asking shareholders to actively participate in corporate decisions regarding: ESCTaA a. Amendments to the company's constitution b. Authorization of additional shares c. Transfer of all or substantially all assets, which in effect results in the sale of the company 9. Does the company observe a minimum of 21 business days for giving out of notices to the AGM where items to be resolved by shareholders are taken up? a. Date of sending out notices: b. Date of the Annual/Special Stockholders' Meeting: 10. State, if any, questions and answers during the Annual/Special Stockholders' Meeting. 11. Result of Annual/Special Stockholders' Meeting's Resolutions 12. Resolution 13. Approving 14. Dissenting 15. Abstaining 16. __________ 17. __________ 18. __________ 19. __________ 20. __________ 21. __________ 22. __________ 23. __________ 24. Date of publishing of the result of the votes taken during the most recent AGM for all resolutions: _______________________ (e) Modifications State, if any, the modifications made in the Annual/Special Stockholders' Meeting regulations during the most recent year and the reason for such modification: Modifications Reason for Modification ______________________ _________________________________ ______________________ _________________________________ ______________________ _________________________________ (f) Stockholders' Attendance (i) Details of Attendance in the Annual/Special Stockholders' Meeting Held: Type of Names of Board Date of Voting Procedure % of SH % of Total % of SH Meeting members/ Meeting (by poll, show of Attending SH in attendance Officers present hands, etc.) in Person Proxy Annual ____________ ________ ____________ _________ _______ __________ Special ____________ ________ ____________ _________ _______ __________ (ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes at the ASM/SSMs? DISTcH (iii) Do the company's common shares carry one vote for one share? If not, disclose and give reasons for any divergence to this standard. Where the company has more than one class of shares, describe the voting rights attached to each class of shares. (g) Proxy Voting Policies State the policies followed by the company regarding proxy voting in the Annual/Special Stockholders' Meeting. Company's Policies Execution and acceptance of proxies ______________________ Notary ______________________ Submission of Proxy ______________________ Several Proxies ______________________ Validity of Proxy ______________________ Proxies executed abroad ______________________ Invalidated Proxy ______________________ Validation of Proxy ______________________ Violation of Proxy ______________________ (h) Sending of Notices State the company's policies and procedure on the sending of notices of Annual/Special Stockholders' Meeting. Policies Procedure __________________ _____________________ __________________ _____________________ (i) Definitive Information Statements and Management Report DAHCaI Number of Stockholders entitled to receive Definitive Information Statements and Management Report and Other Materials _______________________ Date of Actual Distribution of Definitive Information Statement and Management Report and Other Materials held by market participants/certain beneficial owners _______________________ Date of Actual Distribution of Definitive Information Statement and Management Report and Other Materials held by stockholders _______________________ State whether CD format or hard copies were distributed _______________________ If yes, indicate whether requesting stockholders were provided hard copies _______________________ (j) Does the Notice of Annual/Special Stockholders' Meeting include the following: Each resolution to be taken up deals with only one item. ___________ Profiles of directors (at least age, qualification, date of first appointment, experience, and directorships in other listed companies) nominated for election/re-election. ___________ The auditors to be appointed or re-appointed. ___________ An explanation of the dividend policy, if any dividend is to be declared. ___________ The amount payable for final dividends. ___________ Documents required for proxy vote. ___________ Should any of the foregoing information be not disclosed, please indicate the reason thereto. 2) Treatment of Minority Stockholders DHEACI (a) State the company's policies with respect to the treatment of minority stockholders. Policies Implementation __________________ _________________________ __________________ _________________________ __________________ _________________________ __________________ _________________________ (b) Do minority stockholders have a right to nominate candidates for board of directors? K. Investors Relations Program 1) Discuss the company's external and internal communications policies and how frequently they are reviewed. Disclose who reviews and approves major company announcements. Identify the committee with this responsibility, if it has been assigned to a committee. 2) Describe the company's investor relations program including its communications strategy to promote effective communication with its stockholders, other stakeholders and the public in general. Disclose the contact details ( e.g. , telephone, fax and email) of the officer responsible for investor relations. Details (1) Objectives _______________________________ (2) Principles _______________________________ (3) Modes of Communications _______________________________ (4) Investors Relations Officer _______________________________ 3) What are the company's rules and procedures governing the acquisition of corporate control in the capital markets, and extraordinary transactions such as mergers, and sales of substantial portions of corporate assets? AEScHa Name of the independent party the board of directors of the company appointed to evaluate the fairness of the transaction price. L. Corporate Social Responsibility Initiatives Discuss any initiative undertaken or proposed to be undertaken by the company. Initiative Beneficiary ______________________ __________________________ ______________________ __________________________ ______________________ __________________________ ______________________ __________________________ M. Board, Director, Committee and CEO Appraisal Disclose the process followed and criteria used in assessing the annual performance of the board and its committees, individual director, and the CEO/President. Process Criteria Board of Directors ______________ ________________ Board Committees ______________ ________________ Individual Directors ______________ ________________ CEO/President ______________ ________________ N. Internal Breaches and Sanctions Discuss the internal policies on sanctions imposed for any violation or breach of the corporate governance manual involving directors, officers, management and employees. Violations Sanctions ______________________ __________________________ ______________________ __________________________ ______________________ __________________________ ______________________ __________________________ ______________________ __________________________ Pursuant to the requirement of the Securities and Exchange Commission, this Annual Corporate Governance Report is signed on behalf of the registrant by the undersigned, thereunto duly authorized, in the City of ____________________ on ______________, 20__. EHITaS Signatures (Signature over Printed Name) (Signature over Printed Name) Chairman of the Board Chief Executive Officer (Signature over Printed Name) (Signature over Printed Name) Independent Director Independent Director (Signature over Printed Name) Compliance Officer SUBSCRIBED AND SWORN to before me this _______ day of ___________ 20__, affiant(s) exhibiting to me their _______________, as follows: Name/No. Date of Issue Place of Issue ______________ ___________________ __________________ NOTARY PUBLIC Doc No. __________ Page No. _________ Book No. ________ Series of _________ Footnotes 1. Reckoned from the election immediately following January 2, 2012. 2. The Group is composed of the parent, subsidiaries, associates and joint ventures of the company. 3. Senior Management refers to the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company. 4. Family relationship up to the fourth civil degree either by consanguinity or affinity. 5. Board papers consist of complete and adequate information about the matters to be taken in the board meeting. Information includes the background or explanation on matters brought before the Board, disclosures, budgets, forecasts and internal financial documents. 6. "Issues" are compliance matters that arise from adopting different interpretations. 7. "Findings" are those with concrete basis under the company's policies and rules.