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| RISK
MANAGEMENT AND INTERNAL CONTROL
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RISK MANAGEMENT
SYSTEM
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Audit Committee's function already includes the assessment and management
of enterprise risks. As provided for in Section 16.3 of Code
of Corporate Governance for the GOCC sector, it does not preclude
the Governing Board of the GOCC from combining the functions of
the committees into such combinations that will best serve the interest
of the GOCC.
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Risk Policy
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main risk arising from the Company's financial instruments is liquidity
risk. The Board of Directors and Management review and approve
the polices for managing this risk.
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Control System Setup
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The Audit
and Finance Committees is in charge of laying down and supervising
the control mechanism:
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INTERNAL
AUDIT AND CONTROL
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Internal Control System
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While
policies are set by the Board, Management is primarily responsible
for the implementation and maintenance of the internal control
system of the company. The Board through its Audit Committee oversees
the actions of Management and monitors the effectiveness of the
Internal Control System put in place. Recommendations are
provided by Management and/or the Board, and in some cases by
the External Auditor - Commission on Audit (COA) to address certain
issues and concerns of the company.
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The
Board established an internal control audit system that can reasonably
assure the Board, Management and stockholders that the company's
key organizational and operational controls are faithfully complied
with, effective and adequate.
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Internal Audit
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Role
Provides reliable and timely analysis, appraisals, recommendations
and pertinent comments on the conformance / compliance of financial
and business operations to established laws, norms, controls,
rules and regulations to determine their integrity, effectivity
and efficiency.
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Scope
Compliance
with established prevailing government policies, plans, procedures,
rules and regulation
Corporate
assets and other resources
Reliability and integrity of the financial anf operating information
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Reporting Process
Submits report to the Audit Committee
for their review and recommends resolution
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The appointment
and/or removal of the Internal Auditor require the approval of
the Audit Committee.
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The
Board has established and identified the reporting line of the
Internal Auditor to enable him to properly fulfill his duties
and responsibilities. He shall functionally report directly to
the Audit Committee. The Audit Committee shall ensure that, in
the performance of the work of the Internal Auditor, he shall
be free from interference by outside parties.
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Mechanisms and Safeguards
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As
a GOCC, the financial statements of the Company is statutorily
mandated to be audited by Commission on Audit. The Company does
not engage the service of Financial Analysts and Investment Banks.
No restrictions on trading of the Company's shares in the Philippine
Stock Exchange has been implemented because trading of shares
has been suspended since May 2008.
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Chairman
Herculano C. Co, Jr. and President and CEO Miguel E. Umali are
the officers who will have to attest to the Company's full compliance
with the SEC Code of Corporate Governance.
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