Board Committees

 

AUDIT COMMITTEE   COMPENSATION COMMITTEE
         
Chairman Benjamin I. Espiritu   Chairman Martin P. Lorenzo
Member Martin P. Lorenzo   Member Fernan Victor P. Lukban
Member Fernan Victor P. Lukban   Member Renato B. Padilla
         
         
NOMINATIONS COMMITTEE   EXECUTIVE COMMITTEE
         
Chairman Fernando C. Cojuangco   Chairman Martin P. Lorenzo
Member Fernan Victor P. Lukban   Member Fernando C. Cojuangco
Member Renato B. Padilla   Member Fernan Victor P. Lukban

 

 

AUDIT COMMITTEE CHARTER

INTRODUCTION

This document, the Audit Committee Charter, provides for the roles, responsibilities and authority of the Audit Committee (“AudCom”) of the Corporation. Functions of the Committee which shall be approved by the Board of Directors shall also be provided.

The Charter must be reviewed annually by the AudCom and approved by the Board of Directors must be obtained if there will be any revisions.

Purpose

The purpose of the AudCom is to assist the Board in fulfilling its oversight responsibilities of the Corporation’s corporate governance process relating to:

 1.     Ensure the integrity of the financial reporting process which includes the reports and  other information provided by the Company;

 2.    Ensure adequacy and effectiveness of the Company’s internal control system and governance process;

 3.     Ensure the Company’s compliance with laws and regulations;

 4.     Review the performance of the Company’s internal Audit function;

 5.     Review the independent audit on Company’s financial statements;

Functions

The AudCom shall be responsible for the following oversight function

1. Financial Reporting and Disclosures

1.1. The AudCom shall assist the Board in the financial reporting process, system of internal control, audit process, and monitoring of compliance with applicable laws, rules and regulation.

1.2. The AudCom shall monitor and evaluate adequacy and effectives of the company’s internal control system, including financial reporting control and information technology security.

1.3. The AudCom shall review reports submitted by the internal and external auditors.

1.4. The AudCom shall review the quarterly, half-year and annual financial statements before their submission to the Board, with particular focus on the following matters:

a.      Any change/s in accounting policies and practices.

b.      Major judgmental areas.

c.       Significant adjustments resulting from the audit.

d.      Going concern assumptions.

e.      Compliance with accounting standards.

f.        Compliance with tax, legal and regulatory requirements.

2. Risk Management and Internal Control

2.1   The AudCom shall oversee the Management’s activities in managing credit, market liquidity, operational, legal and other risks of the corporation, including regular receipt from the Management of information on risk exposures and risk management activities.

2.2  The AudCom shall coordinate, monitor and facilitate compliance with laws, rules and regulations.      

3. Management

3.1     The Committee must evaluate the competence of the management in carrying out financial reporting responsibilities.

3.2  The Audit Committee and management shall have regular communication regarding the credit, market, liquidity, operational, legal and other risks of the corporation

4. Internal Audit

4.1   The AudCom must organize an internal audit department and consider the appointment of an independent internal auditor and the terms and conditions of its engagement and removal.

4.2  The AudCom must also establish and identify the reporting line of the Internal Auditor to enable him to properlu fulfil his duties and responsibilities. The Internal Auditor must functionally report directly to the AudCom.

4.3  The AudCom shall ensure that internal auditors act independently from the external auditor.

4.4 The AudCom must consider the qualifications of the Internal Auditor in his appointment.

4.5  The AudCom must ensure that the Internal Auditors are given unlimited access in all the reports.

4.6 The AudCom must also review and approve the internal audit plan to ensure its conformity with the objectives of the Company,, which shall include the audit scope, resources and budget necessary to implement it.

4.7  The Audcom must review the reports submitted by the internal auditors.

5. External Audit

5.1    The AudCom shall ensure that the internal and external auditors act independently of each other.

5.2  The AudCom must, prior to the commencement of the audit, discuss with the external auditor the nature, scope and expenses of the audit and ensure proper coordination if more than one audit firm is involved in the activity to secure proper coverage and minimize duplication of efforts.

5.3  The AudCom shall ensure that the auditor is given unlimited access in all the reports.

5.4  The AudCom must evaluate the performance of the external auditor

5.5  The AudCom must review the reports submitted by the external auditors.

5.6  The AudCom must evaluate and determine the non-audit work, if any, of the external auditor, and review periodically the non-audit fees paid to the external auditor in relation to their significance to the total annual income of the external auditor and to the corporation’s overall consultancy expenses.

5.7  The AudCom shall disallow any non-audit work that will conflict with the duties as an external auditor or may pose a threat to their independence. If there are non-audit work, the same should be disclose in the Company’s annual report.

Power

The Audcom shall have the following powers:

1.       The Aud shall have powers as delegated by the Board subject to limitation as the Board may determine

2.      It shall have access to resources and authority to discharge its functions.

3.      It is also granted the power to investigate any matter brought to its attention with full access to books and records.

Membership

The Audcom shall be composed of at least three (3) Board members, preferably with accounting and finance background, one of whom shall be an independent director and another should have related audit experience. However, the Company shall not be precluded from setting higher standards.

The Chairman and the Members of the AudCom shall be appointed by the Board. They may only be removed by the Board.

The Chairman of this AudCom should be an independent director

Each member shall have an adequate understanding of accounting and auditing principles in general and of the Corporation’s financial management systems and environment in particular.

The following are the qualifications to be a member of the AudCom:

1.       Each Member must be financially literate and the Chairman must have accounting or related financial management expertise, as such qualifications are interpreted by the Board in its business judgment.

2.      Each Member shall be a Philippine citizen if so required under applicable Philippine laws and regulations and/or the By-Laws.

Meetings and Other Activities

1.       The AudCom shall agree on an annual schedule of activities that shall determine the agenda for each meeting subject to adjustments and/or revisions as needed.

2.      Meetings of the AudCom shall be convened by the Chairman when he considers it appropriate or upon the request of the majority of the Members.

3.      Notice must be given to the members at least three (3) days prior to the scheduled meeting which must specify must specify the place, date, time, and matter to be discussed.

4.      There is a quorum when at least majority of the members are present throughout the meeting.

5.      Procedure in voting:

5.1   Each member, including the Chairman of the Committee shall have one (1) vote;

5.2  A resolution in writing signed by all Members shall be as valid and effective for all purposes as a resolution of the Committee passed at a meeting of the Committee duly convened. Held and constituted.

6.      In cases where its decisions or recommendations should be ratified by the Board, the AudCom must immediately refer it to the Board.

Minutes and Records

1.       The AudCom shall appoint a Secretary who shall prepare minutes of meetings of the AudCom and keep records of the AudCom.

2.      Any such records shall be open for inspection by any Member or Advisor upon reasonable prior notice during usual office hours of the Company.

Remuneration of Members

Members and Advisors of the AudCom shall not accept fees or other remuneration with respect to their attendance in meetings of the AudCom except those authorized and approved by the Board. Members and Advisors shall also not accept fees or compensation whether directly or indirectly for consultancy services rendered to the Company.

Members’ Interest

In cases wherein the Member is interested in a contract or any dealings with the Company, he/she shall declare the nature of his/her interest. General notice given by the Member of the Committee stating that he/she is a director or stockholder of another company and the he/she is interested in any contract or arrangement that may be entered into with that Company is deemed sufficient disclosure of interest.

Performance and Evaluation

To ensure that the AudCom fulfils its responsibilities in accordance with global best practices and in compliance with the Manual of Corporate Governance and other relecant regulatory requirements, the AudCom shall conduct an assessment of its performance at least annually. The AudCom shall obtain and subject itself to an independent assessment by the Board of Directors relative to its performance in accordance with expectations set out in this Charter.

Amendment

This Charter shall not be amended, altered or varied unless such amendment, alteration or variation shall have been approved by a resolution of the Board.

Approved by the Board of Directors during the Regular Meeting held on 11 February 2014 at Makati City.

 

         
 

Jose Cojuangco Jr.

   

Ernesto G. Teopaco

  Chairman of the Board     Director
         

 

 Marie Therese C. Reyes-Mc Murray

 

 

 Jose Manuel C. Lopa

   Director      Director and Member of Audit Committee
     

 

 Fernando C. Cojuangco

 

 

 Kristina Bernadette C. Aquino

  Director and Member of Audit Committee     Director
         
 

Renato B. Padilla

   

Benjamin I. Espiritu

  Independent Director     Independent Director and Chairman of Audit Committee