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OWER SECTORy fi

ASSETS & LIABILITIESMANAGEMENT ORPPRATION

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION

MANUAL ON CORPORATE GOVERNANCE

Table of Contents

1. Objectives ........................................................................................................................... 3

2. Definitions and Interpretation .......................................................................................3

3. The Board of Directors .....................................................................................................7

3. 1. Responsibilities of the Board of Directors ...........................................................7

3. 2. Charter of Expectations ..............................................................................................10

3. 3. List of Disclosures ..........................................................................................................10

3. 4. Responsibility on the Financial Statements ..........................................................10

3. 5. Head of Agency ........................................................................................................11

3. 6. Composition ..............................................................................................................11

3. 7. Ex- Officio Alternates ..............................................................................................11

3. 8. Board Meetings and Quorum Requirements .....................................................11

3. 9. Board Committees ...................................................................................................12

3. 9. 1. Board Review Committee ..............................................................................12

3. 9. 1. 1 Functions of the Board Review Committee .................................................12

3. 9. 2. Board Audit Committee .................................................. 13

3. 9. 2. 1 Functions of Board Audit Committee ............................................................13

3. 10. Board Officers ........................................................... 13

3. 10. 1. The Chairman ...................................................................................................14

3. 10. 2. The Vice-Chairman ..........................................................................................14

3. 10. 3. The Corporate Secretary ...............................................................................14

3. 10. 4. The Compliance Officer .................................................................................16

3. 11. Annual Performance Evaluation of the Board ...............................................17

4. PSALM Management ........................................................................................................17

4. 1. Management Responsibility ...................................................................................17

4. 2. Primary Accountability of Management to the Board ....................................18

4. 3. The President ft CEO and PSALM Management ................................................18

4. 3. 1. Powers of the President £t CEO .................................................................... 18

5. Internal Audit ................................................................................................................... 20

PSALM Manual of Corporate Governance of 40

5. 1. Internal Audit Department ....................................................................................20

5. 2. IAD Department Head .............................................................................................21

6. External Audit ................................................................................................................ 212

6. 1. The Commission on Audit ....................................................................................212

6. 2. Reporting Standards ..............................................................................................212

7. Corporate Social Responsibility ( CSR) and Relations with Stakeholders ...............25

7. 1 Duty to be Responsive to Stakeholders .....................................................................25

7. 2 CSR Principles .................................................................................................................25

7. 3 Formal Recognition of Stakeholders .........................................................................26

7. 4 Employees ........................................................................................................................26

7. 5 Customers .......................................................................................................................27

7. 6 Suppliers .........................................................................................................................27

7. 7 Health and Safety ..........................................................................................................28

7. 8 Environment ...................................................................................................................28

8. Disclosure and Transparency Requirements ...........................................................298

8. 1. Board Commitment ............................................................................................... 298

8. 2. Disclosure Policy ....................................................................................................299

9. Monitoring and Implementation .................................................................................309

10. Communication Process .................................................................................................30

10. 1. Inspection of Manual ...............................................................................................30

10. 2. Dissemination of Manual ........................................................................................30

10. 2. 1. Role of Directors and Officers ......................................................................30

10. 3. Communication and Education Programs ..........................................................31

11. Non- Compliance with the Manual ........................................................................... 31

11. 1. Penalties ................................................................................................................31

11. 2. Complaints .............................................................................................................31

11. 3. Due Process Requirement .................................................................................31

APPENDICES

Annex A: Format Charter of Expectations of Each Director .................... 34

Annex B: Statement of Directors' Responsibility .................................................39

PSALM Monual of Corporate Governance of 40

POWER SECTt RASSETS & LIABILITIESMANAGEMENT CORPORATIbN

POWER SECTOR ASSETS t LIABILITIES MANAGEMENT CORPORATION

MANUAL ON' CORPORATE GOVERNANCE

This Manual on Corporate Governance was approved and adopted by the Boardof Directors of the Power Sector Assets t Liabilities Management Corporation

PSALM") on 27 December 2013. The Board of Directors, Management,

Officers and employees of PSALM hereby commit themselves to the principlesof best practices contained in this Manual, and acknowled e that the same

shall guide the attainment of their corporate goals.

1. Objectives

This Manual shall institutionalize the principles of good corporate governance

in the entire Corporation.

2. Definitions and Interpretation

The following terms are used in this Manual with the respective meaningsascribed to such terms below, unless the context otherwise requires:

Act refers to Republic Act No. 10149, and officially

named the " GOCC Governance Act of 2011."

BAC refers to the Board Audit Committee.

Board means the Board of Directors of the Corporation

as constituted from time to time; or the collegiat

body that exercises the corporate powers,

conducts all business and controls or holds all

properties of PSALM.

BRC refers to the Board Review Committee.

Per GCG' s recommendation, the Code is renamed as " PSALM Manual on Corporate

Governonce" instead of " PSALM Manual of Corporote Governance".


CEO means the Chief Executive Officer of the

Corporation.

COA refers to the Commission on Audit.

Code refers to the Code of Corporate Governance for

GOCCs as set forth under GCG Memorandum

Circular No. 2012- 07.

Commission/ GCG refers to the Governance Commission for GOCCs.

Confidential refers to all non- public information entrusted to

Information or obtained by a member of the Board or Officerby reason of his/ her position as such with

PSALM. It includes, but is not limited to, non-

public information that might be of use to

competitors or harmful to the Corporation or its

customers/ stakeholders if disclosed, such as: ( 1)

non- public information about the PSALM's

financial condition, prospects or plans, its

marketing and sales programs and research anddevelopment information, as well as information

relating to mergers, acquisitions, divestitures,

stock splits and similar transactions; ( 2) non-

public information concerning possible

transactions or ventures with other companies,

or information about suppliers, joint venture

partners, or any information that PSALM is underobligation to keep confidential; and ( 3) non-

pubtic information about internal discussions,

deliberations and decisions, between and amongDirectors and Officers.

Corporation refers to the Power Sector Assets Liabilities

Management Corporation.

DBM refers to the Department of Budget and

Management.

DOE refers to the Department of Energy.


DOF refers to the Department of Finance.

DOJ refers to the Department of Justice.

DTI refers to the Department of Trade and Industry.

Employees refers to those plantilla personnel of the

Corporation who do not belong to Management.

Ex- Officio Member refers to any individual who sits or acts as amember of the Board of Directors by virtue ofone's title to another office, and without further

warrant or appointment.

GOCC means a government-owned or - controlled

corporation; or any agency organized as a stockor non- stock corporation, vested with functions

relating to public needs, whether governmentalor proprietary in nature and owned by theGovernment of the Republic of the Philippines,

directly or through its instrumentalities, either

wholly or, where appticable, as in the case of

stock corporations, to the extent of at least a

majority of its outstanding capital stock. The

term includes Government Instrumentalities with

Corporate Powers (" GICP"), Government

Corporate Entities (" GCE") and Government

Financial Institutions (" GFI"). The term also

inctudes a Subsidiary of a GOCC.

IAD refers to the Internal Audit Department of the

Corporation.

Management refers to the body given the authority to

implement the policies determined by the Boardin directing the course and business activities ofPSALM. It also pertains to personnel with a rank

of supervisor or higher.


Manual refers to this Manual of Corporate Governance as

adopted by the Corporation.

Material means any information about or involving theInformation Corporation' s affairs, events and conditions that

has a significant impact on the Corporation' s

operations which, when brought to the attention

of the public, is reasonably expected to induceor otherwise materially affect the decisions ofstakeholders.

NEDA refers to the National Economic and

Development Authority.

Stakeholders refers to any individual or entity for whosebenefit the Corporation has been constituted, or

whose life, occupation, business or well- being isdirectly affected, whether favorably or

adversely, by the regular transactions,

operations or pursuit of business or social

enterprise for which the Corporation has been

constituted, and which would include a

stockholder or investor in the Corporation,

management, employees, supply creditors, or

the community in which the Corporation

operates.

PSALM Manual of Corporate 6overnance of 40

3. The Board of Directors

The Corporation shall be administered, and its powers and functions are

vested in and exercised by the Board of Directors. In the pursuit of the

Corporation' s objectives and its mandate, the Board shall have the followingpowers and functions laid down below.

3. 1. Responsibilities of the Board of Directors

The Board shall perform the following responsibilities:

a. ensure that they elect and/ or employ only Officers who arefit and proper to hold such offices with due regard to their

qualifications, competence, experience and integrity. The

Board is therefore obliged to provide an independent check

on Management.

b. provide policy directions, as well as monitor and oversee

Management as articulated in its Charter and other relevant

legislation, rules and regulations.

c. provide the corporate leadership of the Corporation subjectto the rule of law, and the objectives set by the NationalGovernment through the proper supervising agencies and theCommission;

d. establish, or update as may be necessary, the Corporation' s

vision and mission, strategic objectives, policies and

procedures, as well as defining or redefining the

Corporation' s values and standards through:

Mission Statements;

Road Maps; and

Other control mechanism mandated by bestbusiness practices;


e. determine important policies that bear on the character of

the Corporation to foster its lon- term success, ensure its

long- term viability and strength, and secure its sustained

competitiveness;

f. determine the organizational structure of the Corporation,

define the duties and responsibilities of its Officers and

employees and adopt a compensation and benefit scheme

that is consistent with the GOCC Compensation and Position

Classification System ( CPCS) developed by the Commissionand formally approved by the President of the Philippines;

g. ensure that personnel selection and promotion shall be on the

basis of inerit and fitness, and that all personnel action shall

be in pursuit of the applicable laws, rules and regulations;

h. provide sound written policies and strategic guidelines on the

Corporation' s operating budget and major capital

expenditures, and prepare the annual and supplemental

budgets of the Corporation;

i. comply with all reportorial requirements, as required byapplicable laws, rules and regulations;

j. formally adopt and conduct annually the mandated

Performance Evaluation System ( PES) and the Performance

Scorecard and timely and accurately report the results to theCommission; and

k. ensure the fair and equitable treatment of alt Stakeholders

and enhance the Corporation' s relations with its Stakeholders.

meet regularly, ideally at least once every month, to

properly discharge its responsibilities, with independent

views expressed during such meetings being given due

consideration, and that all such meetings shall be properlydocumented or minuted;

m. determine the Corporation' s purpose and value, as well as

adopt strategies and policies, including risk management


policies and programs, in order to ensure that the

Corporation survives and thrives despite financial crises and

that its assets and reputation are adequately protected;

n. monitor and evaluate on a regular basis the implementation

of corporate strategies and policies, business plans and

operating budgets, as well as Management's over-all

performance to ensure optimum results;

o. adopt a competitive selection and promotion process, a

professional development program, as well as a succession

plan' to ensure that the Officers of the Corporation have the

necessary motivation, integrity, competence and

professionalism;

p. monitor and manage potentiat conflicts of interest of

Directors, Mana ement, and stakeholders, includin misuse of

corporate assets and abuse in related party transactions;

q. adopt a system of internal checks and balances, which may

be applied in the first instance to the Board; and ensure that

such systems are reviewed and updated on a regular basis;

r. ensure the integrity of the Corporation' s accounting andfinancial reporting systems, including independent audit, andthat appropriate systems of control are in place, in

particular, systems for risk mana ement, financial and

operational control, and compliance with the law and

relevant standards;

s. identify and monitor, and provide appropriate technology andsystems for the identification and monitoring of key risks andperformance areas;

t. adopt, implement and oversee the process of disclosure and

communications;

u. constitute a Review Committee, an Audit Committee and

such other specialized committees as may be necessary, orrequired by applicable regulations, to assist the Board in

discharging its functions; and


v. conduct and maintain the affairs of the Corporation within

the scope of its authority, as prescribed by applicable laws, rules and regulations.

3. 2 Charter of Expectations2

The Board recognizes its duties and adopts a formal Charter of

Expectations as a general statement of its expectations as to how it will

discharge its duties. Copy of the Formal Charter of Expectations isattached to this Manual as Annex " A ". The Charter will also serve as a

tool in assessin the Board' s performance and that of individual

directors.

3. 3 List of Disclosures to be made bvDirectors3

1) Extent of business interest with PSALM and stakeholders;

2) Compensation package, including travel, representation,

transportation and any allowance and form of expenses;

3) Attendance record of each Board member in Board and

Committee meetings; and

4) Other disclosures required by existin laws, rules and

regulations.

3. 4 Responsibilitv on the Financial Statements4

The Board of Directors shall issue a statement confirming the truth andfairness of the Corporation' s financial statements and/ or annuat

reports upon completion of audit and issuance of the corresponding

Z In accordance with Section 42 of GCG Memorandum Circular No. 2012- 07, PSALM' s CorporateGovernance Manual should include the Formal Charter of Expectations that each Director shall

si n. In line with this, PSALM adopted and copied verbatim the provision on Formal Charter of

Expectations from another GOCC' s Manual on Corporate Governance, specifically those ofPNOC EC' s and NEA' s.

GCG Code of Corporate Governance, Section 42 ( c)

41bid., Section 42 ( d)


financial reports by COA. Copy of the Statement of Directors'

responsibility is attached to this Manual as Annex " 8".

3. 5 Head of Agency

For legat purposes, the Chairman of the Board of Directors5 shall be

considered as the 'Head of A ency" of the Corporation.

3. 6 Composition

The Board of Directors shall be composed of the following: ( a) the

Secretary of the DOF as Chairman, and ( b) the Secretary of the DOE, ( c)

the Secretary of the DBM, ( d) the Director-General of the NEDA, ( e) the

Secretary of the DOJ, and ( f) the Secretary of the DTI, as ex-officio

members and ( g) the President of the Corporation as an appointive

member thereofb.

3. 7 Ex- Officio Alternates

Ex- Officio Directors may designate their respective alternates, who

ideally should be the officials' next- in- rank, and whose acts shall be

considered the acts of their principals.

3. 8 Board Meetings and Quorum Requirements

5 Per GCG' s evaluation, the Choirmon of the Board of Directors should be considered as theHead of the Agency" and not the Boord of Directors, as earlier worded.

6

According to GCG' s comment contained in its letter to PSALM dated 14 March 2014, viz.:

The statement in the Section 3. 3 ( now Section 3. 6) that' ( g) the President of theCorporation' as being part of the ` ex-officio members' of the PSALM Board is nowinconsistent with the governance reforms introduced in R. A. No. 10149, in that

Sec. 3( i) thereof defines an ' Ex Officio Board Member' to ' any individual who sitsor acts member of the Board of DirectorslTrustees by virtue of one' s title toanother office, and without further warrant or appointment,' in relation to

Section 18, which provides that the CEO provided in the charter of a GOCC ` shallbe e( ected annua( ly by the members of the Board from among its ranks.'

In other words, notwithstanding any provision in PSALM' s Charter to the contrary, R. A. 10149 now provides that the nominated-President must first be appointed to

the PSALM Board by the President of the Philippines pursuant to a short( istprovided by the GCG ( Section 15, R. A. 10149), and once qualified as an Appointive

Director, he shall then be nominated and elected by the Board as the CEO... "

PSALM Manual of Corporate GovernancePage I1 of 40

The Board of Directors shall meet regularly and as frequently as may benecessary to enable it to discharge its functions and responsibilities. The presence at a meetin of four ( 4) members shall constitute a

quorum, and the decision of at least three ( 3) members present at a

meeting where there is quorum shatl be the decision of the Board ofDirectors. All meetings shall be properly documented and minuted.

3. 9 Board Committees

There shall be two ( 2) Board Committees which shall directly report tothe Board, namely a Board Review Committee and a Board AuditCommittee.

3. 9. 1 Board Review Committee

The Board Review Committee (" BRC") shall be composed of the

respective Representatives or alternates of the members of the

Board.

3. 9. 1. 1 Functions of the BRC

The BRC shall perform the following functions:

a. It shall have the primary function of prior review of allsubmissions of PSALM Management to the Board.

b. It shall perform the functions of a risk- management

committee by developing and overseeing the

Corporation' s Risk Management Program.

c. It shall oversee the system of limits to discretionaryauthority that the Board delegates to PSALM

Management.

d. It shalt ensure that the system remains effective, that

the limits are observed and that immediate corrective

actions are taken whenever limits are breached.


e. It shall assume the functions of a selection committee

such that all recommendations for the selection,

appointment and removal of any of PSALM' s VicePresidents and the personnel in the Office of the

Corporate Secretary shall be passed upon by the BRC.

3. 9. 2 Board Audit Committee

The Board Audit Committee shall be composed of the respective

Representatives or alternates of the members of the Board.

3. 9. 2. 1 Functions of the Board Audit Committee

The Board Audit Committee shall perform the followingfunctions:

a. advise the Board on all matters relating to

management controls and operational audits;

b. establish internal controls within the Corporation in

relation to management and operations performance

on the Corporation' s functions, programs, projects,

activities with outputs;

c. review and appraise systems and

procedures/ processes, organizational structures,

assets management practices, financial and

management records, reports, and performance

standards of the PSALM functional groups, departments

and divisions; and

d. analyze and evaluate management deficiencies and

assist top management by realistic courses of actionfor existin and potential control gaps/ deficiencies.

3. 10 Board Officers

The Board Officers of the Corporation are the Chairman, the Vice-

Chairman, the Corporate Secretary and the Compliance Officer, who

must all be Filipino citizens.


3. 10. 1 The Chairman

The Chairman shall, when present, preside at alt meetings of the

Board. The Chairman' s responsibilities may include:

a. calling meetings to enable the Board to perform itsduties and responsibilities;

b. approving meeting agenda in consultation with thePresident t CEO and the Corporate Secretary;

c. exercising control over quality, quantity and timelinessof the flow of information between Management and

the Board; and

d. assisting in ensuring compliance with the GOCC' s

guidelines on corporate governance.

The responsibilities set out above may pertain only to theChairman' s role in respect to the Board proceedings, and shall

not be taken as a comprehensive list of all the duties and

responsibilities of a Chairman.

3. 10. 2 The Vice- Chairman

In the absence of the Chairman of the Board, the Vice- Chairmanshall preside at the meetings of the Board.

3. 10. 3 The Corporate Secretary

The Corporate Secretary need not be a member of the Board. Ideally, the Corporate Secretary must possess organizational andinterpersonal skills.

The Corporate Secretary shall have the following functions:

a. serve as an adviser to the Board Members on their

responsibilities and obligations;


b. keep the minutes of ineetings of the Board and theother Board Committees in a book or books kept for

that purpose, and furnish copies thereof to the

Chairman, the President &t CEO and other members of

the Board as appropriate;

c. maintain and keep in safe custody the seal of theCorporation and ensure that the seal or a facsimile

thereof is affixed on all documents the execution of

which, on behalf of the Corporation under its seal, is

duly authorized in accordance with the provisions ofapplicable laws, rules and regulations;

d. attend to the giving and serving of notices of Board;

e. be fully informed and be part of the schedulin process

of other activities of the Board;

f. receive instructions from the Chairman on the

preparation of an annual schedule, the calling of Boardmeetings, the preparation of regular agenda for

meetings, and notifying the Board of such agenda atevery meeting;

g. oversee the adequate flow of information to the Board

prior to meetings;

h. ensure fulfillment of disclosure requirements to

regulatory bodies;

i. authenticate the validity and effectivity of resolutionsas may be requested by external parties, creditor

banks and financing institutions;

j. certify the authenticity of signatures of the corporateofficers and those authorized to transact business on

behalf of the Corporation;


k. exercise general

personnel of the

and

supervision over the activities and

Office of the Corporate Secretary;

l. act as liaison between the Board and Management and

external offices.

The Corporate Secretary shall have such other responsibilities asmay be inherent to such position and such other duties that theBoard may impose upon him. The Board shall have separate andindependent access to the Corporate Secretary.

3. 10. 4 The Compliance Officer

The Board shall appoint a Compliance Officer who shall report

directly to the Chairman. In the absence of a duly appointedCompliance Officer, the Corporate Secretary, who is preferably alawyer, shall act as Compliance Officer. The Compliance Officer

shall perform the following duties:

a. monitor compliance by the Corporation of the

requirements under the Act, the Code, the rules and

re ulations of the appropriate government agencies

and, if any violations are found, report the matter to

the Board;

b. appear before the Commission when summoned in

relation to compliance with the Code or other

compliance issues; and

c. issue a certification every 30 May of the year on theextent of the Corporation' s compliance with the

government corporate standards governing GOCCs forthe period beginning 01 July of the immediatelypreceding calendar year and, if there are any

deviations, explain the reason for such deviation.


The appointment of a Compliance Officer shall not relieve the

Board of its primary responsibility vis- a- vis the State, acting

through the Commission, to ensure that the Corporation has

complied with all its reportorial, monitoring and compliance

obligations.

3. 11 Annual Performance Evaluation of the Board

The performance of the members of the PSALM Board shall be

evaluated based on the criteria set forth under the GCG Memorandum

Circular No. 2014- 03 jPerformance Evaluation for Directors ( PED) in the

GOCC Sectorl and subsequent amendments thereto, if any. The resultsof the PED shall serve as bases for the GCG in determininQ the

Appointive Board members' eli ibility for appointment.

4. PSALM Management

The Management of the Corporation stands as the center of decision- makingfor the day- to- day affairs of the Corporation. It shall determine the

Corporation' s activities by putting the targets set by the Board in concreteterms and by implementing basic strategies for achieving those targets.

It shall be composed of a President, who shall serve as the Corporation' s CEO,

and such other subordinate officials as may be appointed by the Board.

4. 1. Management Responsibility

Management is responsible to the Board for implementing the

infrastructure for the Corporation' s success through the following

mechanisms in its organization as set by the Board:

Organizational structures that work effectively and efficiently inattaining the goals of the Corporation;

Useful planning, control, and risk management systems that

assess risks on an integrated cross- functional approach;

Information systems that are defined and aligned with an

information technology strategy and the business goals of theCorporation; and


A plan of succession that formalizes the process of identifying,

training and selection of successors in key positions in theCorporation.

4. 2. Primary Accountability of Management to the Board

Management is primarily accountabte to the Board for the operations ofthe Corporation. As part of its accountability, Mana ement shall

provide all members of the Board with a balanced and understandabte

account of the Corporation's performance, position and prospects on a

regular basis. This responsibility shall extend to interim and other pricesensitive public reports and reports to regulators.

4. 3. The President t CEO and PSALM Management

The President shall be the Chief Executive Officer (" CEO") of PSALM.

He shall then be nominated and elected annually by the Board as the

CEO'. He shall be the highest executive officer of the Corporation and

is subject to the disciptinary powers of the Board.

4. 3. 1. Powers of the President £ CEO

The PSALM President shall be the Chief Executive Officer of

PSALM and shall have the followin powers and duties:

a. exercise general supervision and authority over the

regular course of business, affairs, and property of theCorporation, and over its employees and officers;

b. see to it that all orders and resolutions of the Board

are carried into effect;

Section 15, R. A. 10149. Previously, the same has been worded as " shall be appointed by thePresident of the Philippines"; however, by virtue of R. A. 10149 the nominated- President mustfirst be appointed to the PSALM Board by the President of the Philippines, and once qualifiedas an Appointive Director, he shatl then be nominated and elected by the Board as the CEO.


5. Internal Audit

c. report to the Board from time to time all matters

which the interest of the Corporation may require tobe brought to its notice;

d. execute and administer the policies and measures

approved by the Board, and take responsibility for theefficient discharge of management functions;

e. oversee the preparation of the budget of PSALM;

f. direct and supervise the operation and internal

administration of PSALM and for this purpose, may

delegate some or any of his administrative

responsibilities and duties to other officers of PSALM;

subject to guidelines and policies set up by the Board, to appoint and fix the number and compensation of

subordinate officials and emptoyees of PSALM, and to

remove, suspend, or otherwise discipline, for cause,

any subordinate employee of PSALM;

h. submit an annual report to the Board on the activities

and achievements of PSALM at the close of each year

and upon approval thereof, submit a copy to thePresident of the Philippines and to such other agencies

as may be required by law and the rules;

i. represent PSALM in all dealings and transactions with

other offices, agencies and instrumentalities of the

National Government and with all persons and other

entities, private or public, domestic or foreign;

j. sign and execute contracts, agreements, instruments

and other documents the execution of which has been

expressly designated to the President CEO; and

k. exercise such other powers and duties as may bevested in him by the Board from time to time.

PSALM Monual of Corporate Governance of 40

The Corporation shall have in place an internal audit system whereby aninternat audit organization conducts independent and objective internal audit

activities designed to add value to and improve the Company' s operations andto help it accomplish its objectives by providing a systematic and disciplinedapproach in the evaluation and improvement of the effectiveness of risk

management, control and governance processes through which the Board and

Management shall be provided with reasonable assurance that the

Corporation' s key organizational and procedural controls are appropriate, adequate, effective and complied with.

5. 1. Internal Audit Department

The Internal Audit Department shall primarily ensure that the internalaudit system and the activities designed by the Corporation are put inplace within the organization of the Corporation. Furthermore, it shall:

a. advice the Board of Directors, through the Board Audit

Committee, on all matters relating to management controlsand operations audits;

b. conduct management and operations performance audits of

the Corporation' s functions, programs, projects, activities

with outputs, determine their degree of compliance with the

policies, established objectives, systems and

procedures/ processes, contractual obligations as well as

government laws and regulations, and assess whether the

Corporation' s mandate are attained;

c. review and appraise systems and procedures/ processes,

organizational structures, assets management practices,

financial and management records, reports, and performance

standards of the PSALM functional groups, departments and

divisions;

d. analyze and evatuate management deficiencies and assist topmana ement in pursuing realistic courses of action for

existing and potential control gaps/ deficiencies; and

e. perform such other related duties and responsibilities as maybe assigned or delegated by the Board through the BoardAudit Committee as may be required by law.


5. 2. IAD Department Head

The head of the IAD shall be primarily responsible for ensuring that theinternal audit procedures are properly put in place in the Corporation. The head of the IAD shall have the following functions:

a. ensure the efficient and effective operation of the internal

audit function;

b. develop strong professional relationships with the Board andBoard Audit Committee, and other key stakeholders;

c. lead the development of the internal audit strategic plan and

annual work plan that outlines the objectives, priorities and

proposed internal audit coverage; and

d. liaise with other external monitoring and evaluation bodies indeveloping internal audit plans for the review and approval ofthe Board/ BAC.

6. External Audit

6. 1. The Commission on Audit

The 1987 Philippine Constitution mandates that COA shall have the

power, authority, and duty to examine, audit, and settle all accountspertaining to the revenue and receipts of, and expenditures or uses offunds and property, owned or held in trust by, or pertaining to theCorporation, as a government - owned or - controlled corporation.

The COA shall have exclusive authority, subject to the limitations

provided by law, to define the scope of its audit and examination,

establish the techniques and methods required therefor, and

promulgate accounting and auditing rules and regulations, includingthose for the prevention and disallowance of irregular, unnecessary,

excessive, extrava ant, or unconscionable expenditures, or uses of

government funds and properties.

6. 2. Reporting Standards


6. 2. 1. Audit reports shall be dated, signed manually and shall beissued and distributed in the manner provided byregulations of the Commission.

6. 2. 2. Audit reports shall contain basically the transmittal

statement, scope and objectives of the audit and time

period examined highlights, financial information,

findings, recommendations and conclusions as well as

other data that may provide the management of theaudited agency with the necessary input for the decision- making process. Tables, charts, graphs and other data todetail the conditions and facts shall be used in proper

cases.

6. 2. 3. Audit reports shall meet the following reporting criteria:

a) Factual matter must be accurately, completely and

fairly presented.

b) Findings must be presented objectively and in

language as clear and simple as the subject matter

permits.

c) Findings must be adequately supported by evidence inthe audit working papers.

d) Reports must be concise yet complete enough to be

readily understood by the users.

e) Information on underlying causes of problems must beincluded so as to assist in implementing or devisingcorrective actions.

6. 2. 4. Audit reports shall:

a) put primary emphasis on improvement; critical

comments shall be presented in balanced perspective,

recognizing unusual difficulties or circumstances facedby officials concerned.

PSALM Manual of Corporote Governance of 40

b) identify and explain issues and questions needingfurther study and consideration by the auditor, the

agency or others.

c) include recognition or noteworthy accomplishmentsparticularly when management improvements in onearea or activity may be applied elsewhere.

d) include recognition of the views of responsibte officiats

of the agency audited on the auditors' findings,

conclusions and recommendations. Except where the

possibility of fraud or other compelling reason mayrequire different treatment, the auditor's tentative

findings and conclusions should be reviewed with the

officials. When possible, without undue delay, their

view should be obtained in writing and objectivelyconsidered and presented in the final report.

e) state whether any significant pertinent informationhas been omitted because it is deemed confidential.

The nature of such information should be described

and the law or other basis under which it is withheld

should be stated.

6. 2. 5. Audit reports accompanying financial reports shall:

a) state whether the audit was made in accordance with

generally accepted auditing standards, and shall

disclose the omission of any auditing procedure

generally recognized as normal or deemed necessaryby COA under the circumstances of a particular case, as well as the reasons for the omission. Nothing in thissection, however, shall be construed to imply authorityfor the omission of any procedure which auditorswould ordinarily employ in the course of audit.

b) express the auditor's opinion with respect to:

i. whether the financial report have been

presented fairly in accordance with applicablelaws and regulations and the generally acceptedaccounting principles applied on a consistentbasis.


ii. material changes in accounting principles andpractices and their effect on the financial

reports.

c) identify any matter to which COA takes exception andshall specifically and clearly state its exceptions

together with a statement on the effect thereof, to

the extent practicable, on the related financial report.

d) contain appropriate supplementary explanatoryinformation about the contents of the financial report

as may be necessary for full and informative disclosureabout the financial operations of the agency audited.

e) explain violations of legal or other regulatory

requirements, including instances of non- compliance.

7. Corporate Social Responsibility ( CSR) and Relations with Stakeholders8

Stakeholders Nature Interests

External

1. Government • Comply with the mandate under the EPIRAa. Congress • Comply with applicable rules andb. Oversight Agencies regulations

C. Local government units • Meet reportorial requirements in a timelyd. Regulators and transparent manner, with credibility

and competence

2. Privatization Investors/ Successor • Ensure integrity in the bidding processGenerating Companies/ IPPAs/ TransCo • Foster harmonious and collaborative

Concessionaire partnership

3. Power Customers and UC Collecting • Provide secure and reliable power supplyEntities ( DUs, ECs, Industrial

Customer, Self- Generating Facilities, etc.)

8 Code of Corporate Governance for GOCCs, Chapter VII, Sections 33- 40.


Stakeholders Nature Interests

4. Suppliers, contractors, IPP/ OMSC/ • Meet contractual obligations

NPC ( Plant operators) Timely payment of feesEarly resolution of disputes

5. General Public/ Media • Timely provide comprehensive but easy tounderstand information on PSALM' s

operations and programs, particularly

those affecting power ratesMinimize universal charge in the power bill

Internal

6. Board Members • Perform the corporate mandate and meet

Board- approved targets and objectives

7. PSALM Employees • Maintain/ sustain a competent, reliable,

healthy and highly motivated humanresource with competitive compensation

package

7. 1. Duty to be Responsive to Stakeholders.

Every Director and Officer accepts the position fully aware that heassumes certain responsibilities not only to PSALM, but also with its

Stakeholders, who have the right to expect that PSALM is being run in aprudent manner and with due regard to the interests of all

Stakeholders.

Consequently, members of the Board and Officers shall deal fairly withPSALM' s employees and other Stakeholders. No member of the Board or

Officer may take unfair advantage of the PSALM' s employees and otherStakeholders through manipulation, concealment, abuse of confidential

or privile ed information, misrepresentation of material facts, or anyother unfair-dealin practice.

7. 2 CSR Principles

As an integral part of the National Government, PSALM shalt be

inherently mandated to be socially responsible, to act and operate asgood corporate citizens. The Board of Directors shall recognize and

perform the obligations the PSALM has towards the National


Government, its major and other Stakeholders, together with the

management, employees, and the communities in which it operates.

The Directors, Officers and all its employees are required to abide byethical policies as mandated by the GCG. The protection of the

reputation and goodwill of PSALM is of fundamental importance, and

Directors, Officers and employees should be aware of the disciplinaryimplications of breaches of policy.

Every member of PSALM is encouraged to promptly report any

potentially illegal, improper and/ or unethical conduct that theybecome aware of at their workplace or in connection with their work.

PSALM shall have an environment that enables its people to raise

genuine and tegitimate concerns internally. However, in the event thatthe people of PSALM believe their reporting to management may resultin harassment, or undue distress, they may contact the GCG support toreport such matters. The GCG provides for an opportunity for concernsto be investigated and ensures appropriate action is taken to resolve

the matter effectively.

7. 3 Formal Recognition of Stakeholders

PSALM recognizes the followin as its Stakeholders:

7. 3. 1 External

1. Government

a. Congress

b. Oversight Agencies

c. Local government units

d. Regulators

2. Privatization Investors/ Successor Generating Companies/ IPPAs/ TransCo Concessionaire

3. Power Customers and UC Collecting Entities ( DUs, ECs, Industrial Customer, Self-Generating Facilities, etc.)

4. Suppliers, contractors, IPP/ OMSC/ NPC ( Plant operators)

5. General Public/ Media


7. 3. 21nternal

1. Board Members

2. PSALM Employees

7. 4 Employees

Every employee of PSALM is encouraged to:

a)

b)

c)

d)

e)

f)

h)

i)

J)

Remember that the biggest stakeholder is the Government;

Share the vision of the Corporation;

Be accountable to the public;

Listen and learn from his/ her co- employees;

Think and act as a team;

Focus on the customers and strive for customer satisfaction;

Respect others;

Communicate with Stakeholders and customers:

Deliver results and cetebrate success; and

Protect the reputation of the PSALM.

There should be employee development and structured training

programs for continuing personal and professional development foremployees.

7. 5 Customers

Integrity and honesty in dealings with customers is necessary for asuccessful and sustained business relationship. PSALM shall operate a

highly effective and efficient organization, focused on

customer objectives with the aim of providing services whichvalue and consistent quality, reliability and safety in returnprice paid for the same. The Corporation shall operate pc

continuous improvement, of both processes and the skills of t

to take best advantage of advances in all aspect of society inensure that it continues to add value to its customers' business.

meetinggive fair

for the

licies of

e staff,

order to

PSALM shall have clear and strong lines of communication which allowit to respond quickly and efficiently to customer and market

requirements, as welt as the public needs, and for the customers to


receive consistent service in order to successfully and consistentlydeliver what the Company is mandated to do.

7. 6. Suppliers

As with other relationships with the stakeholders, PSALM shall aim to

develop relationships and improve networking with business partnersand suppliers based on mutual trust. The Corporation shall aim to offer,

through partnership with its supptiers, the best combination of state- of-the-art technology and world- class service, strong customer relationsand deep industry knowledge and experience, together with the

capacity to implement and deliver value- added solutions on time andwithin budget.

7. 7 Health and Safety

PSALM shall aim to ensure a safe and healthy workin environment for

all its employees, outside contractors and visitors. The Authority shallcomply with all relevant local legislation or regulations, and best

practice guidelines recommended by national health and safety

authorities. The staff shall be informed regarding the policies andpractices of PSALM in order to maintain a healthy, safe and enjoyableenvironment.

7. 8 Environment

It shall be the goal of the Corporation to minimize harmful effects andconsider the development and imptementation of environmental

standards to achieve this to be of great importance.

In the course of the operations of PSALM, it shall identify opportunitiesto reduce consumption of energy, water and other natural resources. PSALM shall also strive to re- use and recycle where possible and dispose

of non- recyclable items responsibly, thereby minimizing its impact onthe environment.


8. Disclosure and Transparency Requirements

The Corporation recognizes that the essence of corporate governance is

transparency such that the more transparent the internat workings of theCorporation are, the more difficult it will be for the Board and/ or

Management to mismanage the Corporation or to misappropriate its assets.

The Corporation hereby agrees to disclose available material information tothe government and the public at all times and in the proper venue, medium

or forum, subject to such limitations as may be prescribed by taw.

8. 1 Board Commitment

The Board commits to cause the disclosure of available material information

and/ or transactions that are required to be disclosed pursuant to relevant

laws, rules and regulations and issuances by the Commission and othersupervising or regulatory agency.

The Board shall cause the filing with the Commission of all written disclosuresor reports on material information and/ or transactions in accordance with

applicable laws.

8. 2 Disclosure Policy

It is a general policy of the Corporation that it, its Directors, Officers and

employees shall not communicate material non- public and confidential

information about and involving the Corporation, including any act,

transaction, development or event unless the Corporation is ready tosimultaneously disclose the material non- public and confidential informationto the Commission or other supervising agencies.

Disclosure may be made, however, on the following instances:

a. Disclosure is made to a person who is bound by a duty to maintain trustand confidence to the Corporation such as but not limited to the

Company' s consultants, auditors, legal counsels, investment bankers,

financial advisers; and

b. The disclosure is made to them upon agreeing in writin to maintain in

strict confidence the disclosed material non- public and confidential

information and will not take advantage of it for his personal gain.


The Corporation shatl formally adopt its Disclosure Policy within the

Corporation and ensure its full advertisement to its stakeholders and likewise

ensure its strict implementation by a particular set of rules.

9. Monitoring and Implementation

9. 1 Each Board Committee shall report regularly to the Board ofDirectors.

9. 2 The Compliance Officer appointed, or in his absence the

Corporate Secretary, shall have the primary task to ensurecompliance of this Manual. The Compliance Officer or Corporate

Secretary shall establish an evaluation system to determine andmeasure compliance with this Manual. Any violation shall subjectthe responsible officer or employee to appropriate penalties

prescribed in this Manual.

9. 3 The performance evaluation system established must be

approved by the Board and accordingly disclosed in the

Corporation' s annual report.

9. 4 This Manuat shall be subject to review and amendment as may

be prescribed by the Board.

9. 5 All business processes and practices being performed within anydepartment or division of the Corporation that are inconsistent

with any portion of this Manual shall be modified in order to becompliant with this Manual.

10. Communication Process

10. 1 Inspection of Manual

This Manual shall be avaitable for inspection by any of the identifiedstakeholders of

PSALM9

during reasonable hours on business days.

9 GCG' s comment is as follows:

The provisions of Section 9. 1. ( now Section 10. 1) that ` This Manual shall be

available for inspection of any director, officer or employee or the public duringreasonable hours on business days' is rather ( imiting in nature ( i. e. directors,


10. 2 Dissemination of Manual

This Manual shatt be disseminated to all the Directors, Officers, and

Employees for their information and compliance. It shall be recorded inan adequate number of printed copies under the supervision of theHuman Resource Division and, at least one ( 1) hard copy of this Manualshall be furnished to every department or division of the Corporation.

10. 2. 1 Role of Directors and Officers

All directors, execufives, division and department heads are

tasked to ensure the thorough dissemination of this Manual to allemployees and related third parties, and to enjoin compliance

with its provisions.

10. 3 Communication and Education Programs

The Corporation shall initially implement the appropriate

communication and training program for the Directors, Officers and

Employees to ensure the effective implementation of this Manual.

11. Non-Compliance with the Manual

To enwre strict observance and implementation of the provisions of thisManual, appropriate penalties shall be imposed, after due process and without

prejudice to civil service laws, on the Corporation' s directors, officers, staff, subsidiaries, affiliates and their respecfive directors, officers and staff in case

of violation of any of the provisions of this Manual.

11. 1 Penalties

Any person, except a member of the Board of Directors, found to haveviolated any provision of this Manual shall be subject to the foltowingpenalties:

officers and emptoyees should be given copies of the Manua(), ond requirement of

Section 42 of the Code of Corporote Governance ( GCG Memorandum Circu(nr No. 2013-07) for inspection ot reosonable business hours refers only to Stakeholders. n

any event, Section 43. 4 thereof requires the Manuol to be up(oaded into PSALM' swebsite.

PSALM Manual of Corporate Govemonce of4a

a. For the first violation, reprimand;

b. For the second violafion, wspension from office for at least one ( 1)

day up to thirty ( 30) days. The duration of the suspension shall

depend on the gravity of the violation.

c. For the third violation, removal from office.

11. 2 Complaints

The Corporate Secretary shall, motu propio or upon complaint, bring tothe Board' s attention any violation of this Manual.

11. 3 Due Process Requirement

An ad hoc committee comprising of three ( 3) independent members -- a

direct,or, an officer and an employee, shall be created, to hear and

determine whether there was a violation of this Manual. it shall

recommend to the Board the imposable penalty subject to the approvalof the Board.

APPROVED this15th

day of September 2015.

Si ned:

CESAR V. PURISIMA

SecretaryDepartment of Finance

Vy a - 1,.,,

MA. TERESA S. HABITAN

Assistant SecretaryDepartment of Finance

CARLOS JERICHO L. PETILLA

SecretaryDepartment of Energy

JOSE RAYMUND A. ACOL

Assistant SecretaryDepartment of Energy

PSALM Manual of Corporate Governance of40

a. For the first vialation, reprimand;

b. For the second violation, suspension from office for at least one ( 1)

day up to thirty ( 30) days. The duration of the suspension shall

depend on the gravity of the violation.

c. For the third violation, removal from office.

11. 2 Complaints

The Corporate Secretary shall, motu propio or upon complaint, bring tothe Board' s attention any violation of this Manual.

11. 3 Due Process Requirement

An ad hoc committee comprising of three ( 3) independent members -- a

director, an officer and an emptoyee, shall be created, to hear and

determine whether there was a violation of this Manual. It shall

recommend to the Board the imposable penalty subject to the approvalof the Board.

APPROVED this15th

day of September 2015.

Signed:

CESAR V. PURISIMA


Ny,,p.c.. a - t..,



CARLOS JERICHO L. PETILLA

SecretaryDepartment of Energy

JOSE Y

Assi i

Depa

PSALM Mon

A. ACOL

Energy

e Governance

Page 32 of40

JOSE F. JUSTINIANO

UndersecretaryDepartment of Justice

HEIDDI VENECIA R. BARROZO

Director

Department of Justice

FLORENCIO B. ABAD

SecretaryDepartment of Budget and

Management

LORENZO C. DRAPETE

Director, Bureau F

Department of Bud et and

Management

ARSENIO M. BALISACAN

Director Generat

National Economic Development

Authority

RUBEN S. REINOSO, JR.

Director General


Authority

GREGORY L. DOMINGO

SecretaryDepartment of Trade and Industry

RAUL V. ANGELES

Executive Director

Board of Investments, Department of

Trade and Industry

LO RDES g. AL NA

esident &t O

P ALM Corporation

PSALM Manuol of Corporote GovernancePoge 33 of 40

JOSE F. JUSTINIANO



Director General


Authority

HEIDDI VENECIA R. BARROZO S. REINO O, JR.

Director irector-Ge ral

Department of Justice National Economic evelopment

Authority

FLORENCIO B. ABAD


Mana ement

LORENZO C. DRAPETE

Director, Bureau F

Department of Budget and

Management

GREGORY L. DOMINGO


RAUL V. ANGELES

Executive Di rector


Trade and Industry

LO RDES S. AL NA

P/ esident £t EO

PgALM Corporation

PSALM Manuo! of CorporaYe GovernancePage 33 of40

JOSE F. JUSTINIANO



Di rector


FLORENCIO B. ABAD


Management

LORENZO . DRAPETE

Director, Bureau F


Management

ARSENIO M. BALISACANDirector General


Authority


Director General


Authority

GREGORY L. DOMINGO


RAUL V. ANGELES

Executive Di rector


Trade and Industry

LO RDES g. AL NA

re ident t EO

P ALM Corporation

PSALM Manua/ of Corporate GovernancePage 33 of40

U

JOSE . STINIANO

U ecretaryDepa ment of Justice

HEIDD! VENECIA R,

Di rector

Department of

BARROZO

Justice

FLORENCIO B. ABAD


Management

LORENZO C. DRAPETE

Director, Bureau F


Management


Director General


Authority


Director General


Authority

GREGORY L. DOMINGO


RAUL V. ANGELES

Executive Di rector


Trade and Industry

LO RDES g. AL NA

resident £t EO

P ALM Corporation

PSALM Manual of Corporate GovernancePage 33 of40

JOSE F. JUSTINIANO


HEIDD! VENECIA R. BARROZO

Director


FLORENCIO B. ABAD


Management

LORENZO C. DRAPETE

Director, Bureau F


Management


Qirector General


Authority


Director General


Authority

GREGORY L. DOMINGO


UL V. ANGELES

xecutive Director

Board f Investments, Department of

Trade and Industry

LO RDES AL NA

Prresident t EO

PSALM Corporation

PSALM Manual of Corporote GovernancePage 33 of 40

ANNEX " A"

Formal Charter of Expectations of Each Director

Statement of Principtes

A. PSALM is an active partner of the Government in nationat development.

PSALM acknowled es that its corporate or anization is essential to theperformance of its functions as an active partner of the qov ernment in

national development. Such functions include the sale, privatization or

disposition of NPC assets and IPP contracts and/ or their ener y outputbased on wch terms and conditions that will optimize the value and sale

prices of these assets; liquidation of NPC' s stranded contract costs usin

proceeds from sales and other properties, includin proceeds from the

Universal Char e; restructurin of existin loans of NPC; and collection,

administration and application of the NPC portion of the Universal Char e.

B. Govemin principles of good corporate governance of PSALM.

PSALM's co rate governance framework shall be overned bv the

followin principler

a. PSALM shall promote transparency, accountability and fairness, andits business shall be conducted strictly in accordance with the ruleof law and shall be supportive of the primary goals and objecfives ofthe government.

b. Timely and accurate disclosure shall be made on all materialaspects and development regarding the Corporation, including itsfinancial condifion, perfoRnance, ownership, and governance.

c. The strategic guidance of PSALM shall be in accord with theobjectives set by the government, the effective monitoring ofManagement by the Board, and the Board's accountability to theCorporafion and its stakeholders.

PSALM Monual of Corporate GovemoncePoge 34 of40

d. Activ e cooperafion betvueen the Corporation and its stakeholders in

creating wealth, jobs, and the sustainability of a financially soundenterprise shall be encouraged.

C. Commitment to institutionalize the Principles of Corporate Govemance.

PSALM is committed to institutionalize the principles of ood corporate

overnance in the entire or anization. The PSALM Board of Directors,

to$ether with Mana$ement and Employees, commit to the principles

contained in the Manual of Corporate Governance and acknowled e that

this Manual wilt serve as a guide in the achievement of corporate goals.

D. Promotion of Corporate Governance.

The Board of Directors, together with Mana ement and Employees, betieve

that good corporate ov ernance is an integral component of sound

strategic business management and of transparency and accountability in

public corporate $ overnance, and will therefore undertake every effortnecessary to create awareness within the Corporation.

E. Care, Dili ence and Skill in the Conduct of the Business of the Corporation.

The members of the Board must exercise extraordinary dili ence in theconduct of business and in dealing with the properties of the Corporation. Such de ree of diligence requires usin the utmost ditigence of very

cautious person with due regard for all circumstances.

Expectations of Directors

As members of the PSALM Board of Directors, we assume a position of trust

and confidence and as such we must act in the best interest of PSALM. Our

actions must be characterized by transparency, accountability, faimess andresponsibitity and we must exercise leadership, prudence, and inte rity in

directing PSALM towards sustained rogress over the long term. In this regard, in addition to the duties and responsibilities of the Board, we shall observe

the followin:

1. Remain fit and proper for the position for the duration of our term.

2. Conduct fair business transaction with PSALM and ensure that our

personat interests do not compromise Board decisions. We shall not

PSALM Manuol of Corporate GovernancePage 35 of40

use our position to make profit or acquire benefit or advantage for

ourselves and/ or ou related interest. We should avoid situations

that may compromise our impartiality.

3. Devote time and attention necessary to properly and effectivelyperform our duties and responsibilifies. We should prepare for,

attend and acfively participate in Board meetings. We are expectedto devote substantial time and attention to the affairs of PSALM,

and keep ourselves informed about PSALM' s business.

4. Act honestly and in good faith, in the best interest of PSALM,

including its stakehdders. Before decidin on any matter broughtbefore the Board of Directors, we should evaluate the issues, ask

questions and seek wch clarifications, as we may deem appropriate.

5. Act judiciousty and exercise independent, competent, honest and

courageous judgment. We should decide on each problem/ situation

in utmost good faith, being reasonably informed thereon andrationalty believing the action we take is in the best interest ofPSALM and support plans and ideas which we believe are beneficialto the Corporation.

6. Have working knowledge of the statutory and regulatory

requirements affecting PSALM. This includes a firm knowledge ofthe contents of PSALM' s Articles of Incorporation and By- Laws andthe amendments thereto, and where applicable, the requirements

of other regulatory agencies.

7. Observe confidentiality. We shall observe the confidentiality of non- public information acquired by reason of our position as directors. We shoutd not dixlose any information to any other person withoutthe authority of the Board.

8. Ensure the continuing soundness, effectiveness and adequacy of

PSAUNs control environment. We are responsible for assuring thatactions taken by the Board maintain the adequacy of the controlenvironment within PSAIJN.

9. Prior to assuming office, if possible, or soon thereafter, attend aseminar on corporate governance, which shall be conducted by a

PSALM Monual ofCorporote GovemancePage 36 of40

duly recognized private or government institution. If necessary, funds shall be allocated by PSALM for this pu pose.

Done this day of _ September 2015 at Makati City.

CESAR V. PURISIMA


r.. - i¢-'1^- ,



LEILA M. DE LIMA

SecretaryDepartment of Justice

JOSE F. JUSTINIANO



Director


ZENAIDA Y. MONSADA

Officer-in-Char e, SecretaryDepartment of Energy




Director General


Authority

RUBEN S. REINOSO, JR. Director General


Authority

PSALM Manual of Corporate GovemancePoge 37 of40

L_J

duly recognized private or government institution. if necessary,

funds shall be allocated by PSALM for this purpose.


CESAR V. PURISIMA


A -



LEILA M. DE LIMA


JOS p JUSTINIANO

d t-secretaryDe rtment of Justice


Director


ZENAIDA Y. MONSADA

Officer-in-Charge, SecretaryDepartment of Energy




Director General


Authority

RUBEN S. REINOSO, JR. Director General

National Economic Devetopment

Authority

PSALM Manuo/ of Corporote GovernoncePage 37 of40

duly recognized private or government institution. If necessary,



CESAR V. PURISIMA


l¢-' i", f r



LEILA M. DE LIMA


JOSE F. JUSTINIANO



Director


ZENAIDA Y. MONSADA





Director General


Authority

REINO Q, JR. Director Gen al

National Economic vetopment

Authority

PSALM Manual of Corporote GovernoncePoge 37 of40

duly recognized private or government institution. If necessary,



CESAR V. PURISIMA


ti.^, A - f. t-



LEILA M. DE LIMA


JOSE F. JUSTINIANO



Director


ZENAIDA Y. MONSADA


JOSE MU ID A. ACOLAss s nt Eretary

Energy


Director General

Nationat Economic Development

Authority


Director General


Authority

PSALM Manuol of Corporate GovernancePage 37 of40

FLORENCIO B. ABAD


Management

LORENZO C. RAPETE

Director, Bureau F


Management

GREGORY L. DOMINGO


UL V. ANGELES

Executive Director


Trade and Industry

LO DES S. ALZO A

P esident Et CEP ALM Corporafion

PSAlM Manual of Corporate GovemancePage 38 of40

ANNEX " B"

STATEMENT OF DIRECTORS' RESPONSIBILITY

The Board of Directors of Power Sector Assets and Liabilities ManagementCorporation ( PSALM) confirms the truth and fairness of the Company'sfinancial statements ending 31 December 2014, including the additionalcomponents attached therein, in accordance with the prescribed financial

reporting framew ork indicated therein. This responsibility includes

confirmation of the truth and faimess in the design and imptementation ofintemal controls relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud

or error, selection and applicafion of appropriate accounting poticies, and

making acrnunting estimates that are reasonable in the circumstances.

APPROVED BY:

CESAR V. PURISIMA


MA. TE SA S. HABITAN


LEILA M. DE LIMA


ZENAIDA Y. MONSADA

Officer-in-Charge, SecretaryDepartment of Ener y




Director General


Authority

PSALM Manuol ofCorporate GovemancePoge 39 of40

J i

ANNEX " B"

STATEMENT OF DIRECTORS' RESPONSIBILITY

The Board of Directors of Power Sector Assets and Liabilities Management

Corporafion ( PSALM) confirms the truth and fairness of the Company'sfinancial statements ending 31 December 2014, including the additionalcomponents attached therein, in accordance with the prescribed financial

reporting framework indicated therein. This responsibility includes

confirmation of the truth and faimess in the design and imptementation ofinternal controls relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraudor error, selection and application of appropriate accountin policies, and

making accounting estimates that are reasonable in the circumstances.

APPROVED BY:

CESAR V. PURISIMA


MA. TE ESA S. HABITAN


LEILA M. DE LIMA


ZENAIDA Y. MONSADA

Officer-in-Charge, SecretaryDepartment of Ener y

JOSE YM D A. ACOL

Assis ant cretary

Depa en f Energy


Director General


Authority

PSAlM Manuol of CorporaYe GovernancePage 39 of40

JOSE F. JUSTINIANO



Director


FLORENCIO B. ABAD


Management

LORENZO C. DRAPETE

Director, Bureau F


Management


Director General


Authority

GREGORY L. DOMINGO


UL V. ANGELES

Executive Director


Trade and Industry

LO RDES ALZ NA

resident & CEO

SALM Corporation

PSALM Manuol of Corporate GovemancePage 40 of40

JOSE . USTINIANO

U dersecretaryDe ment of Justice


Director


FLORENCIO B. ABAD


Management

LORENZO C. DRAPETE

Director, Bureau F


Management

U


Director General

National Economic Devetopment

Authority

GREGORY L. DOMINGO


fi

UL V. ANGELESExecutive Director


Trade and Industry

LO RDES SALZ NA

resident &t CEO

SALM Corporation

PSALM Manual of Corporate 6overnancePage 40 of40

JOSE F. JUSTINIANO



Director


FLORENCIO B. ABAD


Management

LORENZO C. DRAPETE

Director, Bureau F


Management

J

R . EIN O, JR.

iw. irector Ge al

Nationat Economic Development

Authority

GREGORY L. DOMINGO


UL V. ANGELESExecutive Director


Trade and Industry

LO RDES S. ALZ NAresident &t CEO

PSALM Corporation

PSALM Manuol of Corporote GovernoncePage 40 of40

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