1. PURPOSE

1.1       The Committee is established by the Board to enhance the Board's oversight capability over the Corporation's financial reporting, internal control system, internal and external audit processes, and compliance with applicable laws and regulations, as well as oversight over the Corporation's enterprise risk management system to ensure its functionality and effectiveness.  The Committee is accountable to the Board for its performance.

2. MEMBERSHIP AND QUALIFICATIONS

2.1       Composition. The Committee shall be composed of at least three (3) members of the Board, all of whom shall be non-executive directors and the majority of whom shall be independent directors. The Chairperson shall be an independent director and should not be the Chairman of the Board or the chairperson of any other Committee.
2.2       Qualifications. Each member shall have the qualifications and none of the disqualifications of a director as set out in the MCG.  Members shall have relevant background, knowledge, skills, and/or experience in the areas of accounting, auditing, and finance. At least one (1) member shall have relevant knowledge and experience on risk and risk management.
2.3       Appointment. The Chairperson and members shall be appointed by a majority vote of the Board at the Organizational Board Meeting or, if there is a vacancy, during any Board meeting.  Membership shall be reviewed every year after election of the Board by the stockholders.
2.4       Resignation / Removal. A member's resignation shall become effective upon acceptance by the Board. The Chairperson or any member may be removed from office by action of the Board.

3. STRUCTURE AND OPERATIONS

3.1       Meetings. The Committee shall meet at least four (4) times per year — at minimum once each quarter and at such other times and places as it considers appropriate.  The Chairperson of the Committee, any Committee member, or the Corporate Secretary may call a meeting of the Committee.
3.2       Quorum. Attendance of at least a majority of all the Committee members shall constitute a quorum. The Committee shall act only on the affirmative vote of at least a majority of the members present at a meeting at which there is a quorum.
3.3       Chairperson. The Chairperson of the Committee shall preside in all meetings. In the absence of the Chairperson, the Committee members present shall elect one of their members to preside.
3.4       Secretary of the Meeting. The Corporation's Corporate Secretary shall be the secretary of the Committee.
3.5       Notice of the Meeting. A notice of each meeting setting out the date, time, venue, and agenda shall be sent to each member at least two (2) working days prior to the date of the meeting.
3.6       Record of Meetings. Full minutes of the proceedings and resolutions made during Committee meetings shall be kept by the Corporate Secretary. Notices, minutes, agenda, and materials presented during meetings shall be made available to any Committee member upon request.
3.7       Other Attendees. As necessary, the Committee may invite members of management or other persons to attend its meetings to provide relevant information or data.
3.8       Access to Resources. The Committee shall have full access to management, personnel, and records of the Corporation for the purpose of performing its duties. The Committee may also obtain external legal counsel or independent professional advice if it deems necessary.
3.9       Authority. The Committee shall have the authority to conduct or order an investigation into any matter within its scope of responsibility.  All directors, officers, and employees are enjoined to cooperate as requested by the Committee.

4. DUTIES AND RESPONSIBILITIES

4.1       The Committee is responsible for overseeing management in establishing and maintaining an adequate, effective, and efficient internal control framework and a functional ERM system.  The Committee shall:

1. recommend the approval of the Internal Audit Charter, which formally defines the role of Internal Audit and the audit plan, and oversee its implementation;
2. enhance the oversight capability of the Board over financial reporting, the internal control system, internal and external audit processes, and compliance with applicable laws and regulations;
3. discuss with the external auditor, prior to the commencement of the audit, the nature, scope, and audit resources, and ensure proper coordination if more than one (1) audit firm is involved;
4. have a robust process for recommending the appointment, reappointment, removal, and fees of the external auditor accredited by the SEC, who undertakes an independent audit of the Corporation;
5. assess the integrity and independence of the external auditor and exercise effective oversight to review and monitor the external auditor's independence and objectivity;
6. perform oversight functions with respect to the internal and external auditors, ensuring their independence, freedom from interference, and unrestricted access to records, properties, and personnel;
7. establish and identify the reporting line of the Internal Audit Group Head to enable proper fulfillment of duties; the Internal Audit Group Head shall directly report to the Committee;
8. monitor and evaluate the adequacy and effectiveness of the Corporation's internal control system, integrity of financial reporting, and security of physical and information assets;
9. review and approve all interim and annual financial statements before submission to the Board, with particular focus on changes in accounting policies, significant judgments, significant audit adjustments, going concern assumptions, and compliance with applicable standards;
10. review the disposition of the recommendations in the external auditor's management letter;
11. coordinate, monitor, and facilitate compliance with applicable laws, rules, and regulations;
12. advise the Board on its risk appetite levels and risk tolerance limits, and review these at least annually;
13. oversee management's activities in managing credit, market, liquidity, operational, legal, and other risk exposures of the Corporation; and
14. perform other activities which the Committee deems appropriate or which the Board may assign from time to time.

5. REPORTING PROCESS

5.1       Report of Meetings Convened. The Chairperson of the Committee shall report to the Board on the decisions and recommendations made during each Committee meeting at the next scheduled Board meeting.
5.2       Other Reports. The Committee shall prepare such reports as may be required to document its activities. Such reports shall be included in the annual report and other corporate disclosures as required by the SEC and/or the PSE.
5.3       Report on Critical Issues. The Committee shall render the necessary reports to the Board and issue such certifications as it may deem appropriate on critical compliance issues, including but not limited to those relating to material errors, fraud, and sufficiency of risk controls.

6. PERFORMANCE EVALUATION

6.1       Periodic Assessment. The Committee shall assess its effectiveness periodically to ensure that its performance accords with best practice. Such assessment shall compare performance with the requirements of this Charter and the Manual on Corporate Governance.
6.2       Annual Review. This Charter shall be reviewed annually, updated as required, and copies shall be made available to any requesting party upon written request to the Corporate Secretary.

7. AMENDMENT

7.1       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.