GOVERNANCE
AUDIT COMMITTEE
Chairman
Carlo L. Katigbak
Member
Anthony T. Huang
Member
Bienvenido V. Tantoco III
NOMINATION COMMITTEE
Chairman
Zenaida R. Tantoco
Member
Anthony T. Huang
Member
Edgardo Luis Pedro T. Pineda
Member
Arthur R. Tan
REMUNERATION COMMITTEE
Chairman
Zenaida R. Tantoco
Member
Anthony T. Huang
Member
Carlo L. Katigbak
SSI GROUP, INC.
AUDIT AND RISK MANAGEMENT COMMITTEE CHARTER
The Audit and Risk Management Committee (the “Audit Committee”) shall assist the Board of Directors (the “Board”) in the performance of its oversight capability over the Corporation’s financial reporting, internal control system, internal and external audit processes, and compliance with applicable laws and regulations
1. COMPOSITION
The Audit Committee shall consist of at least three (3) appropriately qualified directors, one of whom shall be an independent director and another with audit experience.
The Chairman of the Audit Committee should not be the Chairman of the Board and should be an independent director.
2. QUALIFICATIONS
The following shall be the qualifications of a member of the Audit Committee:
- He/she shall have the qualifications and none of the disqualifications of a Director, as set out in the Corporation’s Manual of Corporate Governance;
- He/she shall have accounting, audit, and finance backgrounds; and
- He/she shall have adequate understanding at least or competence at most of the Corporation’s financial management systems and environment.
3. ACCESS TO RECORDS
The Audit Committee shall have full access to the Corporation’s financial records for the purpose of performance of its duties and responsibilities hereunder. Should the Audit Committee members need further information or assistance from external advisors or consultants, they may request for such through the Corporate Secretary or Management of the Corporation.
4. GENERAL RESPONSIBILITIES
The duties and responsibilities of the Audit Committee are as follows:
- Recommend the approval the Internal Audit Charter (IA Charter), which formally defines the role of Internal Audit and the audit plan as well as oversees the implementation of the IA Charter;
- Through the Internal Audit (IA) Department, 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. Well-designed internal control procedures and processes that will provide a system of checks and balances should be in place in order to (i) safeguard the Corporation’s resources and ensure their effective utilization, (ii) prevent occurrence of fraud and other irregularities, (iii) protect the accuracy and reliability of the Corporation’s financial data, and (iv) ensure compliance with applicable laws and regulations;
- Oversee the IA Department, and recommend the appointment and/or grounds for approval of an internal audit head or Chief Audit Executive (CAE). The Audit Committee should also approve the terms and conditions for outsourcing internal audit services;
- Establish and identify the reporting line of the internal auditor/s to enable the latter to properly fulfill its/their duties and responsibilities. For this purpose, the internal auditor should directly report to the Audit Committee;
- Review and monitor Management’s responsiveness to the internal auditor’s findings and recommendations;
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Review and approve the Interim and Annual Financial Statements before their submission to the Board with particular focus on the following matters:
- Any change/s in accounting policies and practices
- Areas where a significant amount of judgment has been exercised
- Significant adjustments resulting from the audit
- Going concern assumptions
- Compliance with accounting standards
- Compliance with tax, legal and regulatory requirements;
- Perform oversight functions over the Corporation’s internal auditors. It ensures the independence of internal auditors and that the auditor is given unrestricted access to all records, properties and personnel to enable tit to perform their respective audit functions;
- Meet with the Board at least every quarter without the presence of the Chief Executive Officer or other management team members, and
- Coordinate, monitor, and facilitate compliance with laws, rules and regulations;
5. RESPONSIBILITIES IN RELATION TO THE EXTERNAL AUDITOR
The Audit Committee shall have the following functions, in relation to the external auditor:
- Formulate a robust process and be primarily responsible for recommending to the Board the appointment, reappointment, removal, and fees of the external auditor, duly accredited by the SEC, who undertakes an independent audit of the Corporation, and provides an objective assurance on the manner by which the financial statements should be prepared and presented to the stockholders;
- Performs oversight functions over the Corporation's external auditors. It should ensure the independence of the external auditors and unrestricted access to all records, properties and personnel to enable the external auditors to perform their audit functions;
- Prior to the commencement of the external 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;
- Review the reports submitted by the external auditors and review the disposition of the recommendations in the external auditor's management letter;
- Evaluate the non-audit work, if any, of the external auditors, 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 the Corporation’s overall consultancy expenses. The Audit Committee shall disallow any non-audit work that will conflict with this duties as an external auditor or may pose a threat to his independence. The non-audit work, if allowed, should be disclosed in the Corporation’s annual report.
- Disclose to the regulators and the public through the company website and required disclosures the reasons for removal or change of the external auditor;
- Assess the integrity and independence of external auditors and exercise effective oversight to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant Philippine professional and regulatory requirements;
- Review and monitor the external auditor's suitability and effectiveness on an annual basis;
- Disclose the nature of non-audit services performed by its external auditor in the Annual Report to deal with the potential conflict of interest; and
- Be alert for any potential conflict of interest situations, given the guidelines or policies on non- audit services, which could be viewed as impairing the external auditor's objectivity.
6. INDEPENDENT ADVICE
The Audit Committee, in furtherance of their duties and responsibilities, shall have access to independent professional advice at the Corporation's expense.
7. ANNUAL SELF-ASSESSMENT
The Audit Committee shall conduct an annual self-assessment of its performance, including the performance of its Chairman, individual members and committees.
The Audit Committee shall likewise revisit this Audit Committee Charter on a yearly basis to evaluate new standards in best governance practices. All proposed changes and amendments to this Audit Committee Charter shall require approval of the Board.
This Audit Committee Charter is issued for information and guidance of all concerned.
Approved by the Board of Directors on [•].
SSI GROUP, INC.
COMPENSATION AND REMUNERATION COMMITTEE CHARTER
The Compensation and Remuneration Committee (the “Compensation Committee”) shall assist the Board of Directors (the “Board”) in establishing a formal and transparent procedure for developing a policy on remuneration of directors and officers to ensure that their compensation is consistent with the Corporation’s culture, strategy and the business environment in which it operates.
1. COMPOSITION
The Compensation Committee shall consist of at least three (3) appropriately qualified directors, one of whom shall be an independent director.
2. QUALIFICATIONS
Each member of the Compensation Committee shall have the qualifications and none of the disqualifications of a Director, as set out in the Corporation’s Manual of Corporate Governance.
3. MEETINGS
The Compensation Committee shall meet upon determination of the Board of Directors.
4. ACCESS TO RECORDS
The Compensation Committee shall have full access to management, personnel and records for the purpose of performance of its duties and responsibilities hereunder. Should the Compensation Committee members need further information or assistance from external advisors or consultants, they may request for such through the Corporate Secretary or Management of the Corporation.
5. DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Compensation Committee are as follows:
- Establish a formal and transparent procedure for developing a policy on remuneration of directors and officers to ensure that their compensation is consistent with the Corporation's culture, strategy and the business environment in which it operates;
- Use the following criteria in determining proper compensation: (i) the level of remuneration is commensurate to the responsibilities of the role; (ii) no director should participate in deciding on his remuneration; and (iii) remuneration pay-out schedules should be sensitive to risk outcomes over a multi-year horizon;
- Ensure that for employees in control functions (e.g., risk, compliance and internal audit), their remuneration shall be determined independently of any business line being overseen, and performance measures shall be based principally on the achievement of their objectives so as not to compromise their independence;
- Provide in the Corporation’s annual reports and information and proxy statements, a clear, concise and understandable disclosure of all fixed and variable compensation of directors and management for the preceding year, including termination and remuneration provisions, consistent with the disclosure requirements under applicable laws and rules and regulations of the Securities and Exchange Commission;
- Provide oversight over remuneration of senior management and other key personnel, ensuring that compensation is consistent with the Corporation’s culture, strategy and control environment;
- Develop a form on full business interest disclosure as part of the pre-employment requirements for all incoming officers, which among others, compel all officers to declare under the penalty of perjury, all their existing business interests or shareholdings that may directly or indirectly conflict in their performance of duties once hired;
- Disallow any director to decide his or her own remuneration; and
- Review of the human resources development or personnel handbook, if any, to strengthen provisions on conflict of interest, salaries and benefit policies, promotion and career advancement directives, and compliance of personnel concerned with all statutory requirements that must be periodically met in their respective posts, or in the absence of such human resources development or personnel handbook, cause the development of such, covering the same parameters of governance as stated above.
6. INDEPENDENT ADVICE
The Compensation Committee, in furtherance of their duties and responsibilities, shall have access to independent professional advice at the Corporation's expense.
7. ANNUAL SELF-ASSESSMENT
The Compensation Committee shall conduct an annual self-assessment of its performance, including the performance of its Chairman, individual members and committees.
The Compensation Committee shall likewise revisit this Compensation Committee Charter on a yearly basis to evaluate new standards in best governance practices. All proposed changes and amendments to this Compensation Committee Charter shall require approval of the Board.
This Compensation Committee Charter is issued for information and guidance of all concerned.
Approved by the Board of Directors on [•].
SSI GROUP, INC.
NOMINATION COMMITTEE CHARTER
The Nomination Committee (the “Nomination Committee”) shall assist the Board of Directors (the “Board”) in the providing the Corporation’s shareholders with an independent and objective evaluation and assurance that the members of the Board are competent and will foster long-term success and competitiveness. Specifically, the Nomination Committee shall review and evaluate the qualifications of all persons nominated to the Board and other appointments that require Board approval and likewise assess the effectiveness of the Board’s processes and procedures in the election or replacement of directors.
1. COMPOSITION
The Nomination Committee shall be composed of at least three (3) members, one of whom shall be an independent director.
2. QUALIFICATIONS
Each member of the Nomination Committee shall have the qualifications and none of the disqualifications of a Director, as set out in the Corporation’s Manual of Corporate Governance.
3. PROCEDURE FOR ELECTION OF DIRECTORS
All nominations for election of the directors by the stockholders shall be submitted in writing to the Board and be received at the Corporation’s principal place of business at least thirty (30) days prior to the date of the regular or special meeting of stockholders for the purpose of electing directors. Nominations which are not submitted within such nomination period shall not be valid.
4. MEETINGS
The Nomination Committee shall meet upon determination of the Board of Directors.
5. ACCESS TO RECORDS
The Nomination Committee shall have full access to management, personnel and records for the purpose of performance of its duties and responsibilities hereunder. Should the Nomination Committee members need further information or assistance from external advisors or consultants, they may request for such through the Corporate Secretary or Management of the Corporation.
6. DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Nomination Committee are as follows:
- Review and evaluate the qualifications of all persons nominated to the Board and other appointments that require Board approval;
- Screen and shortlist all candidates nominated to become a member of the Board in accordance with the qualifications and disqualifications as provided in the By-laws of the Corporation, the Corporation’s Manual of Corporate Governance, applicable laws, rules and regulations;
- Identify and recommend qualified individuals for nomination and election as additional directors or to fill Board vacancies as and when they arise. The election of such additional or replacement directors shall be done in accordance with By-laws of the Corporation, the Corporation’s Manual of Corporate Governance, applicable laws, rules and regulations;
- Ensure that the independent directors shall have all the qualifications and none of the disqualifications set forth in Section 38 of the Securities Regulation Code and its Implementing Rules and Regulations, as the same may be amended from time to time; and
- Assess the effectiveness of the Board’s processes and procedures in the election or replacement of directors.
7. INDEPENDENT ADVICE
The Nomination Committee, in furtherance of their duties and responsibilities, shall have access to independent professional advice at the Corporation's expense.
8. ANNUAL SELF-ASSESSMENT
The Nomination Committee shall conduct an annual self-assessment of its performance, including the performance of its Chairman, individual members and committees.
The Nomination Committee shall likewise revisit this Nomination Committee Charter on a yearly basis to evaluate new standards in best governance practices. All proposed changes and amendments to this Nominatio Committee Charter shall require approval of the Board.
This Nomination Committee Charter is issued for information and guidance of all concerned.
Approved by the Board of Directors on [•].