SEC MEMORANDUM CIRCULAR NO.

_____
Series of 2002
CODE OF CORPORATE GOVERNANCE

In accordance with the States o!ic" to acti#e!" ro$ote cororate
%o#ernance refor$s ai$ed to raise in#estor confidence& de#e!o caita! $ar'et and
he! achie#e hi%h s(stained %rowth for the cororate sector and the econo$"& the
Co$$ission& in its Reso!(tion No.)*+& Series of 2002 dated Ari! 0, 2002& aro#ed
the ro$(!%ation and i$!e$entation of this Code& which sha!! -e a!ica-!e to
cororations whose sec(rities are re%istered or !isted& cororations which are
%rantees of er$its.!icenses and secondar" franchise fro$ the Co$$ission and
(-!ic co$anies. /his Code a!so a!ies to -ranches or s(-sidiaries of forei%n
cororations oeratin% in the 0hi!iines whose sec(rities are re%istered or !isted.

I. Definitions
A. Board of Directors refers to the co!!e%ia! -od" that e1ercises the
cororate owers of a!! cororations for$ed (nder the Cororation Code. It
cond(cts a!! -(siness and contro!s or ho!ds a!! roert" of s(ch
cororations.
2. Corporate Governance refers to a s"ste$ where-" shareho!ders&
creditors and other sta'eho!ders of a cororation ens(re that $ana%e$ent
enhances the #a!(e of the cororation as it co$etes in an increasin%!"
%!o-a! $ar'et !ace.
C. Independent Director 3 refers to a erson other than an officer or
e$!o"ee of the cororation& its arent or s(-sidiaries& or an" other
indi#id(a! ha#in% an" re!ationshi with the cororation& which wo(!d
interfere with the e1ercise of indeendent 4(d%$ent in carr"in% o(t the
resonsi-i!ities of a director. /his $eans that aart fro$ the directors fees
and shareho!din%s& he sho(!d -e indeendent of $ana%e$ent and free
fro$ an" -(siness or other re!ationshi which co(!d $ateria!!" interfere
with the e1ercise of his indeendent 4(d%$ent.
D. Public Company 3 refers to an" cororation with a c!ass of e5(it"
sec(rities !isted in an E1chan%e or with assets in e1cess of 6ift" Mi!!ion
0esos 70+0&000&000.008 and ha#in% two h(ndred 72008 or $ore
stoc'ho!ders each ho!din% at !east one h(ndred 7)008 shares of a c!ass of
its sec(rities.
E. Management refers to the -od" %i#en the a(thorit" to i$!e$ent the
o!icies deter$ined -" the 2oard in directin% the co(rse.-(siness
acti#it".ies of the cororation.
6. Executive Director refers to a director who is at the sa$e ti$e aointed
to head a deart$ent.(nit within the cororate or%ani9ation.
:. Nonexecutive director refers to a 2oard $e$-er with non;e1ec(ti#e
f(nctions.
<. Nonaudit !or" refers to other ser#ices offered -" the e1terna! a(ditor to
a cororation that are not direct!" re!ated and re!e#ant to its stat(tor" a(dit
)
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f(nction. E1a$!es inc!(de acco(ntin%& a"ro!!& -oo''eein%&
reconci!iation& co$(ter ro4ect $ana%e$ent& data rocessin% or
infor$ation techno!o%" o(tso(rcin% ser#ices& interna! a(ditin%& and
ser#ices that $a" co$ro$ise the indeendence and o-4ecti#it" of the
e1terna! a(dit.
I. Internal control 3 refers to the rocess effected -" a co$an"s 2oard of
Directors& $ana%e$ent and other ersonne!& desi%ned to ro#ide
reasona-!e ass(rance re%ardin% the achie#e$ent of o-4ecti#es in the
effecti#eness and efficienc" of oerations& the re!ia-i!it" of financia!
reortin%& and co$!iance with a!ica-!e !aws& re%(!ations& and interna!
o!icies.
=. Internal control environment 3 refers to the fra$ewor' (nder which interna!
contro!s are de#e!oed& i$!e$ented& a!one or in concert with other
o!icies or roced(res& to $ana%e and contro! a artic(!ar ris' or -(siness
acti#it"& or co$-ination of ris's or -(siness acti#ities& to which the
co$an" is e1osed.
>. Internal auditing 3 refers to an indeendent& o-4ecti#e ass(rance and
cons(!tin% acti#it" desi%ned to add #a!(e and i$ro#e an or%ani9ations
oerations. It he!s an or%ani9ation acco$!ish its o-4ecti#es -" -rin%in% a
s"ste$atic& disci!ined aroach to e#a!(ate and i$ro#e the
effecti#eness of ris' $ana%e$ent& contro!& and %o#ernance rocesses.
L. Internal audit department 3 refers to a deart$ent& di#ision& tea$ of
cons(!tants& or other ractitioner7s8 that ro#ide indeendent& o-4ecti#e
ass(rance and cons(!tin% ser#ices desi%ned to add #a!(e and i$ro#e an
or%ani9ations oerations.
M. C#ief $udit Executive 3 refers to the to osition within the or%ani9ation
resonsi-!e for interna! a(dit acti#ities. In a traditiona! interna! a(dit
acti#it"& this wo(!d -e the interna! a(dit director. In the case where interna!
a(dit acti#ities are o-tained fro$ o(tside ser#ice ro#iders& the chief a(dit
e1ec(ti#e is the erson resonsi-!e for o#erseein% the ser#ice contract
and the o#era!! 5(a!it" ass(rance of these acti#ities& and fo!!ow;( of
en%a%e$ent res(!ts. /he ter$ a!so inc!(des s(ch tit!es as %enera! a(ditor&
chief interna! a(ditor& and insector %enera!.
N. Independence refers to that en#iron$ent which a!!ows the erson to
carr" o(t his.her wor' free!" and o-4ecti#e!".
O. %b&ectivity 3 refers to (n-iased $enta! attit(de that re5(ires the erson to
carr" o(t his.her wor' in s(ch a $anner that he.she has an honest -e!ief in
his.her wor' rod(ct and that no si%nificant 5(a!it" co$ro$ises are
$ade. O-4ecti#it" re5(ires the erson not to s(-ordinate his.her 4(d%$ent
to that of others.
P' (tandards for t#e Professional Practice of Internal $uditing )(PPI$* 3
refers to the criteria -" which the oerations of an interna! a(ditin%
deart$ent are e#a!(ated and $eas(red. /he" are intended to reresent
the ractice of interna! a(ditin% as it sho(!d -e& ro#ide a fra$ewor' for
erfor$in% and ro$otin% a -road ran%e of #a!(e;added interna! a(dit
acti#ities and foster i$ro#ed or%ani9ationa! rocesses and oerations.
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II. The Board Governance
/he 2oard of Directors 72oard8 is ri$ari!" resonsi-!e for the %o#ernance of
the cororation. It needs to -e str(ct(red so that it ro#ides an indeendent chec'
on $ana%e$ent. As s(ch& it is #ita!!" i$ortant that a n($-er of -oard $e$-ers -e
indeendent fro$ $ana%e$ent.
). Co$osition of the 2oard
/he 2oard sha!! -e co$osed of at !east fi#e 7+8 -(t not $ore than
fifteen 7)+8 $e$-ers e!ected -" shareho!ders. 0(-!ic co$anies sha!!
ha#e at !east two 728 indeendent directors or s(ch indeendent directors
sha!! constit(te at !east twent" ercent 720?8 of the $e$-ers of s(ch
2oard& whiche#er is the !esser. A!! other co$anies are enco(ra%ed to
ha#e indeendent directors as we!!.
/he 2oard $a" inc!(de a -a!ance of e1ec(ti#e and non;e1ec(ti#e
directors 7inc!(din% indeendent non;e1ec(ti#es8& ha#in% a c!ear di#ision of
resonsi-i!ities s(ch that no indi#id(a! or s$a!! %ro( of indi#id(a!s can
do$inate the 2oards decision $a'in%.
/he non;e1ec(ti#e directors sho(!d -e of s(fficient 5(a!ifications&
stat(re and n($-er to carr" si%nificant wei%ht in the 2oards decisions.
Non;e1ec(ti#e directors considered -" the 2oard to -e indeendent sha!!
-e identified in the ann(a! reort.
2. M(!ti!e 2oard Seats
/he 2oard $a" consider %(ide!ines on the n($-er of directorshis
for its $e$-ers. /he oti$($ n($-er is re!ated to the caacit" of a
director to erfor$ his d(ties di!i%ent!" in %enera!. /he Chief E1ec(ti#e
Officer and other e1ec(ti#e directors $a" s(-$it the$se!#es to a !ow
indicati#e !i$it on $e$-ershi in other cororate 2oards. /he sa$e !ow
!i$it $a" a!" to indeendent& non;e1ec(ti#e directors who ser#e as f(!!;
ti$e e1ec(ti#es in other cororations. In an" case& the caacit" of
directors to ser#e with di!i%ence sha!! not -e co$ro$ised.
*. /he Chair$an and the Chief E1ec(ti#e Officer
/he ro!es of the Chair$an and the Chief E1ec(ti#e Officer 7@CEOA8
$a" -e searate to ens(re an aroriate -a!ance of ower& increased
acco(nta-i!it" and %reater caacit" of the 2oard for indeendent decision;
$a'in%. /he co$an" sha!! disc!ose the re!ationshi -etween the
Chair$an and the CEO (on their e!ection.
Bhere -oth ositions of the Chair$an and CEO are (nified& there is
c!ear!" one !eader to ro#ide a sin%!e #ision and $ission. In this instance&
chec's and -a!ances sho(!d -e c!ear!" ro#ided to he! ens(re that
indeendent& o(tside #iews& ersecti#es& and 4(d%$ents are %i#en roer
hearin% in the 2oard.
/he Chair$ans resonsi-i!ities $a" inc!(deC
a. sched(!e $eetin%s to ena-!e the 2oard to erfor$ its d(ties
resonsi-!" whi!e not interferin% with the f!ow of the co$an"s
oerations
*
-. reare $eetin% a%enda in cons(!tation with the CEOD
c. e1ercise contro! o#er 5(a!it"& 5(antit" and ti$e!iness of the f!ow of
infor$ation -etween Mana%e$ent and the 2oardD and
d. assist in ens(rin% co$!iance with co$an"s %(ide!ines on cororate
%o#ernance.
/he resonsi-i!ities set o(t in the a-o#e %(ide!ines $a" ertain on!"
to the Chair$ans ro!e in resect to the 2oard roceedin%s. It sho(!d not
-e ta'en as a co$rehensi#e !ist of a!! the d(ties and resonsi-i!ities of a
Chair$an.
,. E(a!ifications of Directors
E#er" director sha!! own at !east one 7)8 share of the caita! stoc' of
the cororation of which he is a director& which share sha!! stand in his
na$e in the -oo's of the cororation.
/he 2oard $a" ro#ide for additiona! 5(a!ifications of a director s(ch
as& -(t not !i$ited to& the fo!!owin%C
a. Ed(cationa! attain$ent
-. Ade5(ate co$etenc" and (nderstandin% of -(siness
c. A%e re5(ire$ent
d. Inte%rit".ro-it"
e. Assid(o(sness
+. Dis5(a!ification of Directors
/he fo!!owin% sha!! -e %ro(nds for the dis5(a!ification of a directorC
a. An" erson who has -een fina!!" con#icted -" a co$etent 4(dicia!
or ad$inistrati#e -od" of the fo!!owin%C 7i8 an" cri$e in#o!#in% the
(rchase or sa!e of sec(rities& e.%.& rorietar" or non;rorietar"
$e$-ershi certificate& co$$odit" f(t(res contract& or interest in a
co$$on tr(st f(nd& re;need !an& ension !an or !ife !anD 7ii8 an"
cri$e arisin% o(t of the ersons cond(ct as an (nderwriter& -ro'er&
dea!er& in#est$ent co$an"& in#est$ent ad#iser& rincia! distri-(tor&
$(t(a! f(nd dea!er& f(t(res co$$ission $erchant& co$$odit" tradin%
ad#isor& f!oor -ro'erD and 7iii8 an" cri$e arisin% o(t of his re!ationshi
with a -an'& 5(asi;-an'& tr(st co$an"& in#est$ent ho(se or as an
affi!iated erson of an" of the$.
-. An" erson who& -" reason of an" $iscond(ct& after hearin% or
tria!& is er$anent!" or te$orari!" en4oined -" order& 4(d%$ent or
decree of the Co$$ission or an" co(rt or other ad$inistrati#e -od" of
co$etent 4(risdiction fro$C 7i8 actin% as an (nderwriter& -ro'er& dea!er&
in#est$ent ad#iser& rincia! distri-(tor& $(t(a! f(nd dea!er& f(t(res
co$$ission $erchant& co$$odit" tradin% ad#isor& or a f!oor -ro'erD 7ii8
actin% as a director or officer of a -an'& 5(asi;-an'& tr(st co$an"&
in#est$ent ho(se& in#est$ent co$an" or an affi!iated erson of an" of
the$D 7iii8 en%a%in% in or contin(in% an" cond(ct or ractice in
connection with an" s(ch acti#it" or wi!!f(!!" #io!atin% !aws %o#ernin%
sec(rities& and -an'in% acti#ities. S(ch dis5(a!ification sha!! a!so a!"
when s(ch erson is c(rrent!" s(-4ect to an effecti#e order of the
Co$$ission or an" co(rt or other ad$inistrati#e -od" ref(sin%&
re#o'in% or s(sendin% an" re%istration& !icense or er$it iss(ed (nder
,
the Cororation Code& Sec(rities Re%(!ation Code& or an" other !aw
ad$inistered -" the Co$$ission or 2an%'o Sentra! n% 0i!iinas& or
(nder an" r(!e or re%(!ation ro$(!%ated -" the Co$$ission or
2an%'o Sentra! n% 0i!iinas& or otherwise restrained to en%a%e in an"
acti#it" in#o!#in% sec(rities and -an'in%. S(ch erson is a!so
dis5(a!ified when he is c(rrent!" s(-4ect to an effecti#e order of a se!f;
re%(!ator" or%ani9ation s(sendin% or e1e!!in% hi$ fro$ $e$-ershi
or articiation or fro$ associatin% with a $e$-er or articiant of the
or%ani9ation.
c. An" erson fina!!" con#icted 4(dicia!!" or ad$inistrati#e!" of an
offense in#o!#in% $ora! t(rit(de& fra(d& e$-e99!e$ent& theft& estafa&
co(nterfeitin%& $isaroriation& for%er"& -ri-er"& fa!se oath& er4(r" or
other fra(d(!ent act or trans%ressions.
d. An" erson fina!!" fo(nd -" the Co$$ission or a co(rt or other
ad$inistrati#e -od" to ha#e wi!!f(!!" #io!ated& or wi!!f(!!" aided& a-etted&
co(nse!ed& ind(ced or roc(red the #io!ation of& an" ro#ision of the
Sec(rities Re%(!ation Code& the Cororation Code& or an" other !aw
ad$inistered -" the Co$$ission or 2an%'o Sentra! n% 0i!iinas& or an"
r(!e& re%(!ation or order of the Co$$ission or 2an%'o Sentra! n%
0i!iinas& or who has fi!ed a $ateria!!" fa!se or $is!eadin% a!ication&
reort or re%istration state$ent re5(ired -" the Co$$ission& or an"
r(!e& re%(!ation or order of the Co$$ission.
e. An" erson 4(dicia!!" dec!ared to -e inso!#ent.
f. An" erson fina!!" fo(nd %(i!t" -" a forei%n co(rt or e5(i#a!ent
financia! re%(!ator" a(thorit" of acts& #io!ations or $iscond(ct si$i!ar to
an" of the acts& #io!ations or $iscond(ct !isted in ara%rahs 7a8 to 7e8
hereof.
%. An" affi!iated erson who is ine!i%i-!e& -" reason of ara%rahs 7a8
to 7e8 hereof to ser#e or act in the caacities !isted in those ara%rahs.
h. Con#iction -" fina! 4(d%$ent of an offense (nisha-!e -"
i$rison$ent for a eriod e1ceedin% si1 7F8 "ears& or a #io!ation of the
Cororation Code& co$$itted within fi#e 7+8 "ears rior to the date of
his e!ection or aoint$ent.
/he 2oard $a" a!so ro#ide for the te$orar" dis5(a!ification of a
director for the fo!!owin% reasonsC
a. Ref(sa! to f(!!" disc!ose the e1tent of his -(siness interest as
re5(ired (nder the Sec(rities Re%(!ation Code and its I$!e$entin%
R(!es and Re%(!ations. /his dis5(a!ification sha!! -e in effect as !on%
as his ref(sa! ersists.
-. A-sence or non;articiation for whate#er reason.s for $ore
than fift" ercent 7+0?8 of a!! $eetin%s& -oth re%(!ar and secia!& of the
2oard of directors d(rin% his inc($-enc"& or an" twe!#e 7)28 $onth
eriod d(rin% said inc($-enc". /his dis5(a!ification a!ies for
(roses of the s(cceedin% e!ection.
c. Dis$issa!.ter$ination fro$ directorshi in another !isted
cororation for ca(se. /his dis5(a!ification sha!! -e in effect (nti! he has
c!eared hi$se!f of an" in#o!#e$ent in the a!!e%ed irre%(!arit".
+
d. 2ein% (nder re#enti#e s(sension -" the cororation.
e. If the indeendent director -eco$es an officer or e$!o"ee
of the sa$e cororation he sha!! -e a(to$atica!!" dis5(a!ified fro$
-ein% an indeendent director.
f. If the -eneficia! sec(rit" ownershi of an indeendent
director in the co$an" or in its re!ated co$anies sha!! e1ceed the
)0? !i$it.
%. Con#iction that has not "et -eco$e fina! referred to in the
%ro(nds for the dis5(a!ification of directors.
F. D(ties& 6(nctions and Resonsi-i!ities
It is the 2oards resonsi-i!it" to foster the !on%;ter$ s(ccess of the
cororation and sec(re its s(stained co$etiti#eness in a $anner
consistent with its fid(ciar" resonsi-i!it"& which it sho(!d e1ercise in the
-est interest of the cororation and its shareho!ders.
a. :enera! Resonsi-i!it"
A directors office is one of tr(st and confidence. <e sho(!d act in
the -est interest of the cororation in a $anner characteri9ed -"
transarenc"& acco(nta-i!it" and fairness. <e sho(!d e1ercise
!eadershi& r(dence and inte%rit" in directin% the cororation towards
s(stained ro%ress o#er the !on% ter$. A director ass($es certain
resonsi-i!ities to different constit(encies or sta'eho!ders& who ha#e
the ri%ht to e1ect that the instit(tion is -ein% r(n in a r(dent and
so(nd $anner.
/o ens(re %ood %o#ernance of the cororation& the 2oard
sho(!d esta-!ish the cororations #ision and $ission& strate%ic
o-4ecti#es& o!icies and roced(res that $a" %(ide and direct the
acti#ities of the co$an" and the $eans to attain the sa$e as we!! as
the $echanis$ for $onitorin% $ana%e$ents erfor$ance. Bhi!e the
$ana%e$ent of the da";to;da" affairs of the instit(tion is the
resonsi-i!it" of the $ana%e$ent tea$& the 2oard is& howe#er&
resonsi-!e for $onitorin% and o#erseein% $ana%e$ent action.
-. D(ties and 6(nctions
/o ins(re a hi%h standard of -est ractice for the co$an" and its
sta'eho!ders& the 2oard sho(!d cond(ct itse!f with (t$ost honest" and
inte%rit" in the dischar%e of its d(ties& f(nctions and resonsi-i!ities
which inc!(de& a$on% others& the fo!!owin%C
i. Insta!! a rocess of se!ection to ens(re a $i1 of co$etent
directors& each of who$ can add #a!(e and contri-(te
indeendent 4(d%$ent to the for$(!ation of so(nd cororate
strate%ies and o!icies. Se!ect and aoint the CEO and other
senior officers& who $(st ha#e the $oti#ation& inte%rit"&
co$etence and rofessiona!is$ at a #er" hi%h !e#e!. Adot a
rofessiona! de#e!o$ent ro%ra$ for e$!o"ees and officers&
and s(ccession !annin% for senior $ana%e$ent.
F
ii. Deter$ine the cororations (rose and #a!(e as we!! as
strate%ies and %enera! o!icies to ens(re that it s(r#i#es and
thri#es desite financia! crises and its assets and re(tation are
ade5(ate!" rotected. 0ro#ide so(nd written o!icies and strate%ic
%(ide!ines to the cororation that wi!! he! decide on $a4or caita!
e1endit(res. Deter$ine i$ortant o!icies that -ear on the
character of the cororation with a #iew towards ens(rin% its !on%;
ter$ #ia-i!it" and stren%th. It $(st eriodica!!" e#a!(ate and
$onitor i$!e$entation of s(ch strate%ies and o!icies& -(siness
!ans and oeratin% -(d%ets as we!! as $ana%e$ents o#er;a!!
erfor$ance to ens(re oti$($ res(!ts.
iii. Ens(re that the cororation co$!ies with a!! re!e#ant !aws&
re%(!ations and codes of -est -(siness ractices.
i#. Identif" the cororations $a4or and other sta'eho!ders and
for$(!ate a c!ear o!ic" on co$$(nicatin% or re!atin% with the$
acc(rate!"& effecti#e!" and s(fficient!". /here $(st -e an
acco(ntin% rendered to the$ re%(!ar!" in order to ser#e their
!e%iti$ate interests.
Li'ewise& an in#estor re!ations ro%ra$ that reaches o(t to a!!
shareho!ders and f(!!" infor$s the$ of cororate acti#ities sho(!d
-e de#e!oed. As a -est ractice& the chief financia! officer or
CEO sho(!d ha#e o#ersi%ht of this ro%ra$ and sho(!d acti#e!"
articiate in (-!ic acti#ities
#. Adot a s"ste$ of interna! chec's and -a!ances& which $a" -e
a!ied in the first instance to the 2oard. A re%(!ar re#iew of the
effecti#eness of s(ch s"ste$ $(st -e cond(cted so that the
decision;$a'in% caa-i!it" and the inte%rit" of cororate
oerations and reortin% s"ste$s are $aintained at a hi%h !e#e! at
a!! ti$es.
#i. Endea#or to ro#ide aroriate techno!o%" and s"ste$s ratin% to
acco(nt for a#ai!a-!e reso(rces to ens(re a osition of a stron%
and $eanin%f(! co$etitor. Identif" 'e" ris' areas and 'e"
erfor$ance indicators and $onitor these factors with d(e
di!i%ence.
#ii. Constit(te an A(dit and Co$!iance Co$$ittee.
#iii. 0roer!" dischar%e 2oard f(nctions -" $eetin% re%(!ar!".
Indeendent #iews d(rin% 2oard $eetin%s sho(!d -e %i#en d(e
consideration and a!! s(ch $eetin%s sho(!d -e d(!" $in(ted.
i1. >ee 2oard a(thorit" within the owers of the instit(tion as
rescri-ed in the artic!es of incororation& -";!aws and in e1istin%
!aws& r(!es and re%(!ation. Cond(ct and $aintain the affairs of the
instit(tion within the scoe of its a(thorit" as rescri-ed in its
charter and in e1istin% !aws& r(!es and re%(!ations.
c. Secific D(ties and Resonsi-i!ities of a Director
G
i. To conduct fair business transactions ith the cor!oration
and to ensure that !ersona" interest does not bias Board
decisions. /he -asic rinci!e to -e o-ser#ed is that a director
sho(!d not (se his osition to $a'e rofit or to ac5(ire -enefit or
ad#anta%e for hi$se!f and.or his re!ated interests. <e sho(!d a#oid
sit(ations that $a" co$ro$ise his i$artia!it". If an act(a! or
otentia! conf!ict of interest sho(!d arise on the art of directors or
senior e1ec(ti#es& it sho(!d -e f(!!" disc!osed and the concerned
director sho(!d not articiate in the decision $a'in%. A director
who has a contin(in% conf!ict of interest of a $ateria! nat(re
sho(!d consider resi%nin%.
ii. To devote ti#e and attention necessar$ to !ro!er"$ dischar%e
his duties and res!onsibi"ities. A director sho(!d de#ote
s(fficient ti$e to fa$i!iari9e hi$se!f with the instit(tions -(siness.
<e sho(!d -e constant!" aware of the instit(tions condition and -e
'now!ed%ea-!e eno(%h to contri-(te $eanin%f(!!" to the 2oards
wor'. <e sho(!d attend and acti#e!" articiate in 2oard and
co$$ittee $eetin%s& re5(est and re#iew $eetin% $ateria!s& as'
5(estions& and re5(est e1!anations.
iii. To act &udicious"$. 2efore decidin% on an" $atter -ro(%ht
-efore the 2oard of directors& e#er" director sho(!d thoro(%h!"
e#a!(ate the iss(es& as' 5(estions and see' c!arifications when
necessar".
i#. To e'ercise inde!endent &ud%#ent. A director sho(!d #iew
each ro-!e$.sit(ation o-4ecti#e!". Bhen a disa%ree$ent with
others occ(rs& he sho(!d caref(!!" e#a!(ate the sit(ation and state
his osition. <e sho(!d not -e afraid to ta'e a osition e#en
tho(%h it $i%ht -e (no(!ar. Coro!!ari!"& he sho(!d s(ort !ans
and ideas that he thin's are -eneficia! to the cororation.
#. To have a or(in% (no"ed%e of the statutor$ and re%u"ator$
re)uire#ents affectin% the cor!oration* inc"udin% the
contents of its artic"es of incor!oration and b$+"as* the
re)uire#ents of the Co##ission* and here a!!"icab"e* the
re)uire#ents of other re%u"ator$ a%encies. A director sho(!d
a!so 'ee hi$se!f infor$ed of ind(str" de#e!o$ents and
-(siness trends in order to safe%(ard the cororations
co$etiti#eness.
#i. To observe confidentia"it$. A director sho(!d o-ser#e the
confidentia!it" of non;(-!ic infor$ation ac5(ired -" reason of his
osition as director. <e sho(!d not disc!ose an" infor$ation to an"
other erson witho(t the a(thorit" of the 2oard.
#ii. To ensure the continuin% soundness* effectiveness and
ade)uac$ of the co#!an$,s contro" environ#ent.
d. Interna! Contro! Resonsi-i!ities of the 2oard
/he contro! en#iron$ent is co$osed ofC 7a8 the 2oard which
ens(res that the co$an" is aroriate!" and effecti#e!" $ana%ed
and contro!!ed& 7-8 a $ana%e$ent that acti#e!" $ana%es and oerates
H
the co$an" in a so(nd and r(dent $anner& 7c8 the or%ani9ationa!
and roced(ra! contro!s s(orted -" an effecti#e $ana%e$ent
infor$ation s"ste$ and ris' $ana%e$ent reortin% s"ste$& and 7d8 the
indeendent a(dit $echanis$s to $onitor the ade5(ac" and
effecti#eness of the or%ani9ations %o#ernance& oerations& infor$ation
s"ste$s& to inc!(de re!ia-i!it" and inte%rit" of financia! and oerationa!
infor$ation& effecti#eness and efficienc" of oerations& safe%(ardin% of
assets& and co$!iance with !aws& r(!es& re%(!ations& and contracts.
i. /he $ini$($ interna! contro! $echanis$s for the 2oards
o#ersi%ht resonsi-i!it" $a" inc!(deC
Definin% the d(ties and resonsi-i!ities of the CEOD
Se!ectin% or aro#in% an indi#id(a! with aroriate a-i!it"&
inte%rit"& e1erience to fi!! the CEO ro!eD
Re#iewin% roosed senior $ana%e$ent aoint$entsD
Ens(rin% the se!ection& aoint$ent and retention of 5(a!ified
and co$etent $ana%e$entD
Re#iewin% the co$an"s ersonne! and h($an reso(rce
o!icies and s(fficienc"& conf!ict of interest sit(ations& chan%es
to the co$ensation !an for e$!o"ees and officers and
$ana%e$ent s(ccession !an.
ii. /he $ini$($ interna! contro! $echanis$s for $ana%e$ents
oerationa! resonsi-i!it" wo(!d center on the CEO& -ein%
(!ti$ate!" acco(nta-!e for the co$an"s or%ani9ationa! and
roced(ra! contro!s.
iii. /he scoe and artic(!ars of a s"ste$ of effecti#e or%ani9ationa!
and roced(ra! contro!s $a" differ a$on% co$anies deendin%
on factors s(ch asC the nat(re and co$!e1it" of -(siness and the
-(siness c(!t(reD the #o!($e& si9e and co$!e1it" of transactionsD
the de%ree of ris'D the de%ree of centra!i9ation and de!e%ation of
a(thorit"D the e1tent and effecti#eness of infor$ation techno!o%"D
and the e1tent of re%(!ator" co$!iance.
i#. Each co$an" $a" ha#e in !ace an indeendent a(dit f(nction&
thro(%h which the co$an"s 2oard& senior $ana%e$ent& and
stoc'ho!ders $a" -e ro#ided with reasona-!e ass(rance that its
'e" or%ani9ationa! and roced(ra! contro!s are effecti#e&
aroriate& and co$!ied with. /he 2oard $a" aoint a chief
a(dit e1ec(ti#e to carr" o(t the a(dit f(nction& and $a" re5(ire the
chief a(dit e1ec(ti#e to reort to a !e#e! within the or%ani9ation
that a!!ows the interna! a(dit acti#it" to f(!fi!! its resonsi-i!ities.
G. 2oard Meetin%s and E(or($ Re5(ire$ent
Me$-ers of the 2oard sho(!d attend re%(!ar and secia! $eetin%s of
the 2oard in erson. In #iew of $odern techno!o%"& howe#er& attendance
at 2oard $eetin%s thro(%h te!econference $a" -e a!!owed.
An indeendent director sho(!d a!wa"s -e in attendance. <owe#er&
the a-sence of an indeendent director $a" not affect the 5(or($
re5(ire$ents if he is d(!" notified of the $eetin% -(t de!i-erate!" and
witho(t 4(stifia-!e ca(se fai!s to attend the $eetin%. =(stifia-!e ca(ses
I
$a" on!" inc!(de %ra#e i!!ness or death of i$$ediate fa$i!" and serio(s
accidents.
/o $onitor co$!iance with the a-o#e re5(ire$ent& cororations
$a"& at the end of e#er" fisca! "ear& ro#ide the Co$$ission with a sworn
certification that the fore%oin% re5(ire$ent has -een co$!ied with. /he
said certification $a" -e s(-$itted with the co$an"s c(rrent reort 7SEC
6or$ )G;)8 or on a searate fi!in%.
H. Re$(neration of the Me$-ers of the 2oard and Officers
Le#e!s of re$(neration sha!! -e s(fficient to attract and retain the
directors& if an"& and officers needed to r(n the co$an" s(ccessf(!!".
Cororations& howe#er& sho(!d a#oid a"in% $ore than what is necessar"
for this (rose. A roortion of e1ec(ti#e directors re$(neration $a" -e
str(ct(red so as to !in' rewards to cororate and indi#id(a! erfor$ance.
Cororations $a" esta-!ish a for$a! and transarent roced(re for
de#e!oin% a o!ic" on e1ec(ti#e re$(neration and for fi1in% the
re$(neration ac'a%es of indi#id(a! directors& if an"& and officers. No
director sho(!d -e in#o!#ed in decidin% his or her own re$(neration.
/he cororations ann(a! reorts& infor$ation and ro1" state$ents
sha!! inc!(de a c!ear& concise and (nderstanda-!e disc!os(re of a!! !an
and non;!an co$ensation awarded to& earned -"& aid to& or esti$ated
to -e aid to& direct!" or indirect!" to a!! indi#id(a!s ser#in% as the CEO or
actin% in a si$i!ar caacit" d(rin% the !ast co$!eted fisca! "ear&
re%ard!ess of the co$ensation !e#e! and the cororations fo(r 7,8 $ost
hi%h!" co$ensated e1ec(ti#e officers other than the CEO who were
ser#in% as e1ec(ti#e officers at the end of the !ast co$!eted "ear.
/o rotect the f(nds of the cororation& the Co$$ission $a" re%(!ate
the a"$ent -" the cororation to directors and officers of co$ensation&
a!!owance& fees and frin%e -enefits in #er" e1cetiona! cases& e.%.& when
a cororation is (nder recei#ershi or reha-i!itation.
I. 2oard Co$$ittees
/he 2oard sha!! constit(te Co$$ittees in aid of %ood cororate
%o#ernance.
A. /he A(dit Co$$ittee sha!! -e co$osed of at !east three 7*8 2oard
$e$-ers& refera-!" with acco(ntin% and finance -ac'%ro(nd& one of
who$ sha!! -e an indeendent director and another sho(!d ha#e re!ated
a(dit e1erience. It sha!! ha#e the fo!!owin% secific f(nctionsC
a. 0ro#ide o#ersi%ht o#er the senior $ana%e$ents acti#ities in $ana%in%
credit& $ar'et& !i5(idit"& oerationa!& !e%a! and other ris's of the
cororation. /his f(nction sha!! inc!(de recei#in% fro$ senior
$ana%e$ent eriodic infor$ation on ris' e1os(res and ris'
$ana%e$ent acti#ities. <owe#er& in consideration of the ris' rofi!e of
the cororation& the 2oard $a" constit(te a searate Ris'
Mana%e$ent Co$$ittee to foc(s on carr"in% o(t this o#ersi%ht ro!e
o#er ris' $ana%e$entD
)0
-. 0ro#ide o#ersi%ht of the cororations interna! and e1terna! a(ditorsD
c. Re#iew and aro#e a(dit scoe and fre5(enc"& and the ann(a!
interna! a(dit !anD
d. Disc(ss with the e1terna! a(ditor -efore the a(dit co$$ences the
nat(re and scoe of the a(dit& and ens(re coordination where $ore
than one a(dit fir$ is in#o!#edD
e. Resonsi-!e for the settin%;( of an interna! a(dit deart$ent and
consider the aoint$ent of an interna! a(ditor as we!! as an
indeendent e1terna! a(ditor& the a(dit fee and an" 5(estion of
resi%nation or dis$issa!D
f. Monitor and e#a!(ate the ade5(ac" and effecti#eness of the
cororations interna! contro! s"ste$D
%. Recei#e and re#iew reorts of interna! and e1terna! a(ditors and
re%(!ator" a%encies& where a!ica-!e and ens(re that $ana%e$ent is
ta'in% aroriate correcti#e actions& in a ti$e!" $anner in addressin%
contro! and co$!iance f(nctions with re%(!ator" a%enciesD
h. Re#iew the 5(arter!"& ha!f;"ear and ann(a! financia! state$ents -efore
s(-$ission to the 2oard& foc(sin% artic(!ar!" onC
An" chan%e.s in acco(ntin% o!icies and ractices
Ma4or 4(d%$enta! areas
Si%nificant ad4(st$ents res(!tin% fro$ the a(dit
:oin% concern ass($tion
Co$!iance with acco(ntin% standards
Co$!iance with ta1& !e%a!& and stoc' e1chan%e re5(ire$ents
i. Resonsi-!e for coordinatin%& $onitorin% and faci!itatin% co$!iance
with e1istin% !aws& r(!es and re%(!ations. It $a" a!so constit(te a
Co$!iance Unit for this (rose.
4. E#a!(ate and deter$ine non;a(dit wor' -" e1terna! a(ditor and 'ee
(nder re#iew the non;a(dit fees aid to the e1terna! a(ditor -oth in
re!ation to their si%nificance to the a(ditor and in re!ation to the
co$an"s tota! e1endit(re on cons(!tanc". /he non;a(dit wor'
sho(!d -e disc!osed in the ann(a! reort.
'. Esta-!ish and identif" the reortin% !ine of the chief a(dit e1ec(ti#e so
that the reortin% !e#e! a!!ows the interna! a(dit acti#it" to f(!fi!! its
resonsi-i!ities. /he chief a(dit e1ec(ti#e sha!! reort direct!" to the
A(dit Co$$ittee f(nctiona!!". /he A(dit Co$$ittee sha!! ens(re that
the interna! a(ditors sha!! ha#e free and f(!! access to a!! the co$an"s
records& roerties and ersonne! re!e#ant to the interna! a(dit acti#it"
and that the interna! a(dit acti#it" sho(!d -e free fro$ interference in
deter$inin% the scoe of interna! a(ditin% e1a$inations& erfor$in%
wor'& and co$$(nicatin% res(!ts& and sha!! ro#ide a #en(e for the
A(dit Co$$ittee to re#iew and aro#e the ann(a! interna! a(dit !an.
/he Chair$an of this co$$ittee sho(!d -e an indeendent director.
<e sho(!d -e resonsi-!e for inc(!catin% in the $inds of the 2oard
))
$e$-ers the i$ortance of $ana%e$ent resonsi-i!ities in $aintainin% a
so(nd s"ste$ of interna! contro! and the 2oards o#ersi%ht resonsi-i!it".
6or 0hi!iine -ranches or s(-sidiaries of forei%n cororations
co#ered -" this Code& the !oca! a(dit head for s(ch entities sho(!d -e
indeendent of the 0hi!iine oerations and sho(!d reort to the re%iona!
or cororate head5(arters.
2. /he 2oard $a" a!so constit(te the fo!!owin% co$$itteesC
a. /he No$ination Co$$ittee which $a" -e co$osed of at !east three
7*8 $e$-ers& one of who$ sho(!d -e an indeendent director $a"
re#iew and e#a!(ate the 5(a!ifications of a!! ersons no$inated to the
2oard as we!! as those no$inated to other ositions re5(irin%
aoint$ent -" the 2oard and ro#ide assess$ent on the 2oards
effecti#eness in directin% the rocess of renewin% and re!acin% 2oard
$e$-ers.
-. /he Co$ensation or Re$(neration Co$$ittee $a" -e co$osed of at
!east three 7*8 $e$-ers& one of who$ sho(!d -e an indeendent
director. It $a" esta-!ish a for$a! and transarent roced(re for
de#e!oin% a o!ic" on e1ec(ti#e re$(neration and for fi1in% the
re$(neration ac'a%es of cororate officers and directors& and
ro#ide o#ersi%ht o#er re$(neration of senior $ana%e$ent and other
'e" ersonne! ens(rin% that co$ensation is consistent with the
cororations c(!t(re& strate%" and contro! en#iron$ent.
)0. /he Cororate Secretar"
/he Cororate Secretar"& who $(st -e a 6i!iino& is an officer of the
cororation. 0erfection in erfor$ance and no s(rrises are e1ected of
hi$. Li'ewise& his !o"a!t" to the $ission& #ision and secific -(siness
o-4ecti#es of the cororate entit" co$e with his d(ties.
Li'e the CEO& he sho(!d wor' and dea! fair!" and o-4ecti#e!" with a!!
the constit(encies of the cororation& na$e!"& the 2oard& $ana%e$ent&
stoc'ho!ders and other sta'eho!ders. As s(ch& he sho(!d -e so$eone his
co!!ea%(es and these constit(encies can t(rn to& tr(st and confide with on
a re%(!ar -asis.
<e sho(!d ha#e the ad$inistrati#e s'i!!s of the chief ad$inistrati#e
officer of the cororation and the interersona! s'i!!s of the chief h($an
reso(rces officer. If the Cororate Secretar" is not the %enera! co(nse!&
then he $(st ha#e the !e%a! s'i!!s of a chief !e%a! officer. <e $(st a!so
ha#e the financia! and acco(ntin% s'i!!s of a chief financia! officer& and&
!ast!" the #ision and decisi#eness of the CEO.
Since there are different indi#id(a!s on to of #ario(s cororate
acti#ities& the Cororate Secretar" sho(!d -e f(!!" infor$ed and -e art of
the sched(!in% rocess of the different acti#ities. As to a%endas& he
sho(!d ha#e the sched(!e thereof at !east for the c(rrent "ear and sho(!d
(t the 2oard on notice -efore e#er" $eetin%. It is a #er" i$ortant
disci!ine to %et the 2oard to thin' ahead. <e sho(!d ser#e as an ad#iser
to directors resonsi-i!ities and o-!i%ations.
)2
/he Cororate Secretar" sho(!d $a'e s(re that directors ha#e -efore
the$ e#er"thin% that the" need to $a'e an infor$ed decision. Bhen the
2oard $a'es a decision& it is co#ered -" a -(siness 4(d%$ent that can -e
arri#ed at -" the $e$-ers actin% in %ood faith with the assistance of the
Cororate Secretar" who sho(!d re#iew caref(!!" the infor$ation
resented to the directors at the ti$e the" are to $a'e a decision.

III. -u!!"$ Infor#ation
In order to f(!fi!! their resonsi-i!ities& 2oard $e$-ers& sho(!d -e ro#ided
with co$!ete& ade5(ate and ti$e!" infor$ation rior to 2oard $eetin%s on an on;
%oin% -asis.
Mana%e$ent sho(!d ha#e an o-!i%ation to s(!" the 2oard with co$!ete&
ade5(ate infor$ation in a ti$e!" $anner. Re!iance (re!" on what is #o!(nteered -"
Mana%e$ent is (n!i'e!" to -e eno(%h in a!! circ($stances and f(rther in5(iries $a"
-e re5(ired if the artic(!ar director is to f(!fi!! his or her d(ties roer!". <ence& the
2oard $a" ha#e searate and indeendent access to the co$an"s senior
$ana%e$ent.
/he infor$ation $a" inc!(de the -ac'%ro(nd or e1!anator" infor$ation
re!atin% to $atters to -e -ro(%ht -efore the 2oard& coies of disc!os(re doc($ents&
-(d%ets& forecasts and $onth!" interna! financia! state$ents. Bith resect to the
-(d%et& an" #ariance -etween the ro4ections and act(a! res(!ts sho(!d a!so -e
disc!osed and e1!ained.
Directors sho(!d a!so ha#e a searate and indeendent access to the
Cororate Secretar". /he ro!e of the Cororate Secretar" sho(!d -e c!ear!" defined
and sho(!d inc!(de resonsi-i!it" for ens(rin% that 2oard roced(res are -ein%
fo!!owed and that a!ica-!e r(!es and re%(!ations are co$!ied with. /he Cororate
Secretar" sho(!d attend a!! 2oard $eetin%s.
/he 2oard sho(!d ha#e a roced(re for directors& either indi#id(a!!" or as a
%ro(& in the f(rtherance of their d(ties& to ta'e indeendent rofessiona! ad#ice& if
necessar"& at the cororations e1ense.
IV. Accountabi"it$ and Audit
). /he 2oard is ri$ari!y acco(nta-!e to the shareho!ders and Mana%e$ent is
ri$ari!" acco(nta-!e to the 2oard. /he 2oard sho(!d ro#ide the
shareho!ders with a -a!anced and (nderstanda-!e assess$ent of the
cororations erfor$ance& osition and rosects on a 5(arter!" -asis.
/he Mana%e$ent sho(!d ro#ide a!! $e$-ers of the 2oard with a
-a!anced and (nderstanda-!e acco(nt of the cororations erfor$ance&
osition and rosects on a $onth!" -asis. /his resonsi-i!it" sho(!d
e1tend to interi$ and other rice sensiti#e (-!ic reorts and reorts to
re%(!ators 7if re5(ired8. It sho(!d -e ri$ari!" resonsi-!e in $a'in%
financia! reortin% and interna! contro! in accordance with the fo!!owin%
%(ide!inesC
a. 0resent a -a!anced and (nderstanda-!e assess$ent of the co$an"s
osition and rosects. /he 2oards resonsi-i!it" to resent a
-a!anced and (nderstanda-!e assess$ent sho(!d e1tend to interi$
and other rice;sensiti#e (-!ic reorts and reorts to re%(!ators as
we!! as to infor$ation re5(ired to -e resented -" stat(tor"
re5(ire$entsD
)*
-. E1!ain their resonsi-i!it" for rearin% the acco(nts& for which there
sho(!d -e a state$ent -" the a(ditors a-o(t their reortin%
resonsi-i!itiesD
c. Reort that the -(siness is a %oin% concern& with s(ortin%
ass($tions or 5(a!ifications& if necessar"D
d. Maintain a so(nd s"ste$ of interna! contro! to safe%(ard sta'eho!ders
in#est$ent and the co$an"s assetsD
e. 2ased on the aro#ed a(dit !ans& scoe and fre5(enc" of a(dits&
ens(re that interna! a(dit e1a$inations co#er& at !east& the e#a!(ation of
ade5(ac" and effecti#eness of contro!s enco$assin% the
or%ani9ations %o#ernance& oerations& infor$ation s"ste$s& to inc!(de
re!ia-i!it" and inte%rit" of financia! and oerationa! infor$ation&
effecti#eness and efficienc" of oerations& safe%(ardin% of assets& and
co$!iance with !aws& r(!es& re%(!ations& and contracts.
f. Re5(ire the chief a(dit e1ec(ti#e to render to the A(dit Co$$ittee and
senior $ana%e$ent an ann(a! reort on the interna! a(dit deart$ents
acti#it"& (rose& a(thorit"& resonsi-i!it" and erfor$ance re!ati#e to
the a(dit !ans and strate%ies aro#ed -" the A(dit Co$$ittee of the
2oard. S(ch ann(a! reort sho(!d inc!(de si%nificant ris' e1os(res
and contro! iss(es& cororate %o#ernance iss(es& and other $atters
needed or re5(ested -" the 2oard and senior $ana%e$ent. /he chief
a(dit e1ec(ti#es ann(a! reort sha!! !i'ewise -e $ade a#ai!a-!e to the
stoc'ho!ders of the co$an". Interna! a(ditors sha!! reort that their
acti#ities are @cond(cted in accordance with the Standards for the
0rofessiona! 0ractice of Interna! A(ditin%A. Otherwise& the chief a(dit
e1ec(ti#e sha!! disc!ose to the 2oard and senior $ana%e$ent that it
has not "et achie#ed f(!! co$!iance with the standards for the
rofessiona! ractice of interna! a(ditin%.
2. Se!ection.Aoint$ent& Resi%nation& Dis$issa! or Cessation of Ser#ice of
an E1terna! A(ditor
/he 2oard& thro(%h the A(dit Co$$ittee& sha!! reco$$end to the
stoc'ho!ders a d(!" accredited e1terna! a(ditor who sha!! (nderta'e an
indeendent a(dit and sha!! ro#ide an o-4ecti#e ass(rance on the wa" in
which financia! state$ents sha!! ha#e -een reared and resented. S(ch
e1terna! a(ditor cannot at the sa$e ti$e ro#ide the ser#ices of an interna!
a(ditor to the sa$e c!ient. Other non;a(dit wor' sho(!d not -e in conf!ict
with the f(nctions of the e1terna! a(ditor.
/he e1terna! a(ditor sho(!d -e rotated e#er" fi#e 7+8 "ears or ear!ier
or the hand!in% artner sha!! -e chan%ed.
/he reason.s for the resi%nation& dis$issa! or cessation fro$ ser#ice
and the date thereof of an e1terna! a(ditor sha!! -e reorted in the
co$an"s ann(a! and c(rrent reorts. Said reort sha!! inc!(de a
disc(ssion of an" disa%ree$ent with said for$er e1terna! a(ditor on an"
$atter of acco(ntin% rinci!es or ractices& financia! state$ent disc!os(re
or a(ditin% scoe or roced(re& which if not reso!#ed to the satisfaction of
),
the for$er a(ditor& wo(!d ha#e ca(se $a'in% reference to the s(-4ect
$atter of the disa%ree$ent in connection with its reort.
If an e1terna! a(ditor -e!ie#es that the state$ents $ade in an ann(a!
reort& infor$ation state$ent or ro1" state$ent fi!ed d(rin% his
en%a%e$ent are incorrect or inco$!ete& he sha!! a!so resent his #iews in
said reorts.
V. -toc(ho"ders, Ri%hts and Protection of .inorit$ -toc(ho"ders, Interests
/he 2oard sha!! -e co$$itted to resect the fo!!owin% ri%hts of the
stoc'ho!dersC
). Jotin% Ri%ht
Shareho!ders ha#e the ri%ht to e!ect& re$o#e and re!ace directors
and #ote on certain cororate acts in accordance with the Cororation
Code.
/he Code $andates the (se of c($(!ati#e #otin% in the e!ection of
directors. A!tho(%h directors $a" -e re$o#ed with or witho(t ca(se& the
Code rohi-its re$o#a! witho(t ca(se if it wi!! den" $inorit" shareho!ders
reresentation in the 2oard. Re$o#a! of directors re5(ires an affir$ati#e
#ote of two;thirds of the o(tstandin% caita!.
2. 0re;e$ti#e Ri%ht
A!! stoc'ho!ders ha#e re;e$ti#e ri%hts& (n!ess there is a secific
denia! of this ri%ht in the artic!es of incororation or an a$end$ent thereto.
/he" sha!! ha#e the ri%ht to s(-scri-e to the caita! stoc' of the
cororation. /he Artic!es of Incororation $a" !a" down the secific ri%hts
and owers of shareho!ders with resect to the artic(!ar shares the" ho!d&
a!! of which are rotected -" !aw so !on% as the" are not in conf!ict with the
Cororation Code.
*. 0ower of Insection
/he Cororation Code $andates cororations to a!!ow shareho!ders
to insect cororate -oo's and records inc!(din% $in(tes of 2oard
$eetin%s and stoc' re%istries in accordance with the Cororation Code
and to ro#ide the$ an ann(a! reort& inc!(din% financia! state$ents&
witho(t cost or restrictions.
,. Ri%ht to Infor$ation
/he Shareho!ders sha!! -e ro#ided& (on re5(est& with eriodic
reorts which disc!ose ersona! and rofessiona! infor$ation a-o(t the
directors and officers and certain other $atters s(ch as their ho!din%s of
the co$an"s shares& dea!in%s with the co$an"& re!ationshis a$on%
directors and 'e" officers& and the a%%re%ate co$ensation of directors
and officers. /he Infor$ation State$ent.0ro1" State$ent where these are
fo(nd $(st -e distri-(ted to the shareho!ders -efore ann(a! %enera!
$eetin%s and in the Re%istration State$ent and 0rosect(s in case of
re%istration of shares for (-!ic offerin% with the Co$$ission.
)+
/he $inorit" shareho!ders sho(!d -e %ranted the ri%ht to roose the
ho!din% of a $eetin%& and the ri%ht to roose ite$s in the a%enda of the
$eetin%& ro#ided the ite$s are for !e%iti$ate -(siness (roses.
/he $inorit" shareho!ders sho(!d ha#e access to an" and a!!
infor$ation re!atin% to $atters for which the $ana%e$ent is acco(nta-!e
for and to those re!atin% to $atters for which the $ana%e$ent sho(!d
inc!(de s(ch infor$ation and& if not inc!(ded& then the $inorit"
shareho!ders can roose to inc!(de s(ch $atters in the a%enda of
stoc'ho!ders $eetin%& -ein% within the definition of @!e%iti$ate (rosesA.
+. Ri%ht to Di#idends
Shareho!ders ha#e the ri%ht to recei#e di#idends s(-4ect to the
discretion of the 2oard. <owe#er& the Co$$ission $a" direct the
cororation to dec!are di#idends when its retained earnin%s is in e1cess of
)00? of its aid;in caita! stoc'& e1cetC a8 when 4(stified -" definite
cororate e1ansion ro4ects or ro%ra$s aro#ed -" the 2oard or -8
when the cororation is rohi-ited (nder an" !oan a%ree$ent with an"
financia! instit(tion or creditor& whether !oca! or forei%n& fro$ dec!arin%
di#idends witho(t its consent& and s(ch consent has not -een sec(redD or
c8 when it can -e c!ear!" shown that s(ch retention is necessar" (nder
secia! circ($stances o-tainin% in the cororation& s(ch as when there is
a need for secia! reser#e for ro-a-!e contin%encies.
F. Araisa! Ri%ht
/he Cororation Code a!!ows the e1ercise of the shareho!ders
araisa! ri%hts (nder the fo!!owin% circ($stancesC
a. In case an" a$end$ent to the artic!es of incororation has the effect of
chan%in% or restrictin% the ri%hts of an" stoc'ho!ders or c!ass of shares&
or of a(thori9in% references in an" resect s(erior to those of
o(tstandin% shares of an" c!ass& or of e1tendin% or shortenin% the ter$
of cororate e1istenceD
-. In case of sa!e& !ease& e1chan%e& transfer& $ort%a%e& !ed%e or other
disosition of a!! or s(-stantia!!" a!! of the cororate roert" and
assets as ro#ided in the Cororation CodeD and
c. In case of $er%er or conso!idation.
It is the d(t" of the directors to ro$ote shareho!der ri%hts& re$o#e
i$edi$ents to the e1ercise of shareho!ders ri%hts and a!!ow ossi-i!ities
to see' redress for #io!ation of their ri%hts. /he" sha!! enco(ra%e the
e1ercise of shareho!ders #otin% ri%hts and the so!(tion of co!!ecti#e action
ro-!e$s thro(%h aroriate $echanis$s. /he" sha!! -e instr($enta! in
re$o#in% e1cessi#e costs and other ad$inistrati#e or ractica!
i$edi$ents to shareho!ders articiatin% in $eetin%s and.or #otin% in
erson. /he directors sha!! a#e the wa" for the e!ectronic fi!in% and
distri-(tion of shareho!der infor$ation necessar" to $a'e infor$ed
decisions s(-4ect to !e%a! constraints.
VI. Eva"uation -$ste#s
)F
/he $ana%e$ent $a" esta-!ish a erfor$ance e#a!(ation s"ste$ to $eas(re
the erfor$ance of the 2oard and to;!e#e! $ana%e$ent of the cororation.
/he esta-!ish$ent of s(ch e#a!(ation s"ste$& inc!(din% the feat(res thereof&
$a" -e disc!osed in the co$an"s ann(a! reort 7SEC 6or$ )G;A8.

VII. Disc"osure and Trans!arenc$
A do$inant the$e in a!! iss(es re!ated to cororate %o#ernance is the #ita!
i$ortance of disc!os(re. /he $ore transarent the interna! wor'in%s of the
co$an" and cash f!ows& the $ore diffic(!t it wi!! -e for $ana%e$ent and contro!!in%
shareho!ders to $isaroriate co$an" assets or $is$ana%e the co$an".
/he $ost -asic and a!! enco$assin% disc!os(re re5(ire$ent is that a!!
$ateria! infor$ation& i.e.& an" thin% that co(!d otentia!!" affect share rice& sho(!d
-e (-!ic!" disc!osed. S(ch infor$ation wo(!d inc!(de earnin%s res(!ts& ac5(isition or
disosa! of assets& -oard chan%es& re!ated art" transactions& shareho!din%s of
directors and chan%es to ownershi. Other infor$ation that sho(!d a!wa"s -e
disc!osed inc!(des re$(neration 7inc!(din% stoc' otions8 of a!! directors and senior
$ana%e$ent cororate strate%"& and off -a!ance sheet transactions. A!! disc!osed
infor$ation sho(!d -e re!eased #ia the aro#ed stoc' e1chan%e roced(re for
co$an" anno(nce$ents as we!! as thro(%h the ann(a! reort.
/he 2oard sha!! therefore& co$$it at a!! ti$es to f(!! disc!os(re of $ateria!
infor$ation dea!in%s. It sha!! ca(se the fi!in% of a!! re5(ired infor$ation for the
interest of the sta'eho!ders.
VIII. Co##it#ent to Cor!orate Governance
Cororations sha!! ro$(!%ate and adot its cororate %o#ernance r(!es and
rinci!es in accordance with this Code. Said r(!es sha!! -e in $an(a! for$ and
a#ai!a-!e as reference -" the directors. It sha!! -e s(-$itted to the Co$$ission&
which sha!! e#a!(ate the sa$e and their co$!iance with this Code ta'in% into
acco(nt the si9e and nat(re of -(siness. /he said $an(a! sha!! -e a#ai!a-!e for
insection -" an" stoc'ho!der of the cororation at reasona-!e ho(rs on -(siness
da"s. /he Chair$an of the 2oard sha!! -e secifica!!" tas'ed with the resonsi-i!it"
of ens(rin% adherence to the cororate %o#ernance code and ractices.
Un!ess $andated -" !aw& other cororations are !i'ewise enco(ra%ed to
o-ser#e this Circ(!ar in the a-sence of an" $andated cororate %o#ernance r(!es
adoted -" other a%encies.
I/. Ad#inistrative -anction
6ai!(re to adot a $an(a! of cororate %o#ernance as secified therein sha!!
s(-4ect a cororation& after d(e notice and hearin%& to a ena!t" of 0)00&000.00.
/. Transitor$ Provision
A!! cororations affected -" this Code sha!! s(-$it their $an(a! -" =(!" )&
2002 to -e effecti#e =an(ar" )& 200*. A $ode! $an(a! wi!! -e drafted -" the
Co$$ission and wi!! -e a#ai!a-!e -" Ma" )+& 2002 in the SEC we- a%e.
/I. Effective Date
)G
/his Me$orand($ Circ(!ar sha!! ta'e effect after fifteen 7)+8 da"s fro$
(-!ication in a newsaer of %enera! circ(!ation.
Ari! +& 2002.
Manda!("on% Cit"& 0hi!iines.
0I0IA R. BA1TI-TA
Chairerson
)H