Corporate Governance

Manual of Corporate Governance

The Board of Directors (the “Board”), officers, and employees of Radius Telecoms, Inc. (the “Company”) hereby commit themselves to the fundamental principles of sound corporate governance provided in this Manual of Corporate Governance (“Manual”) and acknowledge that the same are necessary components of sound strategic business management that will enhance the value of the Company to all its stakeholders.

DECLARATION OF CORPORATE PRINCIPLES
The Company adheres to the principles of fairness, accountability, integrity, transparency, and honesty to develop and uphold an ethical culture that will protect and promote the best interest of the Company for the common benefit of the Company’s stockholders and other stakeholders. The Company likewise adheres to the laws enfranchising its corporate existence and utility operations.

As the Company progresses, this Manual shall be kept under constant review and revision to meet the emerging standards of good corporate governance practices.

DEFINITION OF TERMS
A. Corporate Governance – the system of stewardship and control to guide organizations in fulfilling their long-term economic, moral, legal, and social obligations towards their stakeholders.

Corporate governance is a system of direction, feedback, and control using regulations, performance standards, and ethical guidelines to hold the Board and Management accountable for ensuring ethical behavior-reconciling long-term customer satisfaction with shareholder value-to the benefit of all stakeholders and society.

Its purpose is to maximize the organization’s long-term success, creating sustainable value for its shareholders, stakeholders, and the nation;

B. Board of Directors – the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts all its business, and controls its properties;

C. Management – the body given the authority by the Board to implement the policies it has laid down in the conduct of the business of the Company;

D. Independent director – a person who, apart from his fees and shareholdings, is independent of Management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director;

E. Executive director – a director who has executive responsibility of day-to-day operations of a part or the whole of the organization;

F. Non-executive director – a director who has no executive responsibility and does not perform any work related to the operations of the corporation;

G. Non-audit work – the other services offered by an external auditor to a corporation that are not directly related and relevant to its statutory audit functions, such as, accounting, payroll, bookkeeping, reconciliation, computer project management, data processing, or information technology outsourcing services, internal audit, and other services that may compromise the independence and objectivity of an external auditor;

H. Internal control – a process designed and effected by the Board, Management, and all levels of personnel to provide reasonable assurance on the achievement of objectives through efficient and effective operations; reliable, complete and timely financial and management information; and compliance with applicable laws, regulations, and the organization’s policies and procedures.

I. Internal control system – the framework under which internal controls are developed and implemented (alone or in concert with other policies or procedures) to manage and control a particular risk or business activity, or combination of risks or business activities, to which the Company is exposed;

J. Internal audit – an independent and objective assurance activity designed to add value to and improve the Company’s operations, and help it accomplish its objectives by providing a systematic and disciplined approach in the evaluation and improvement of the effectiveness of risk management, control and governance processes

K. Internal audit department – a department or unit of the Company and its consultants, if any, that provide independent and objective assurance services in order to add value to and improve the Company’s operations;

L. Chief Audit Executive – the highest position in the Company responsible for internal audit activities. For this purpose, the Chief Audit Executive of Manila Electric Company (“MERALCO”) shall act as such for the Company;

M. Enterprise Risk Management – a process, effected by an entity’s Board, Management and other personnel, applied in strategy setting and across the enterprise that is designed to identify potential events that may affect the entity, manage risks to be within its risk appetite, and provide reasonable assurance regarding the achievement of entity objectives;

N. Conglomerate – a group of corporations that has diversified business activities in varied industries, whereby the operations of such businesses are controlled and managed by a parent corporate entity;

O. Related Party – shall cover MERALCO, itssubsidiaries, as well as affiliates and any party (including their subsidiaries, affiliates and special purpose entities), that the Company exerts direct or indirect control over or that exerts direct or indirect control over the company; the company’s directors; officers; shareholders and related interests (“DOSRI”), and their close family members, as well as corresponding persons in affiliated companies. This shall also include such other person or juridical entity whose interest may pose a potential conflict with the interest of the Company.

P. Related Party Transactions (“RPT”) – a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. It should be interpreted broadly to include not only transactions that are entered into with related parties, but also outstanding transactions that are entered into with an unrelated party that subsequently becomes a related party.

Q. Stakeholders – any individual, organization or society at large who can either affect and/or be affected by the Company’s strategies, policies, business decisions and operations, in general. This includes, among others, customers, creditors, employees, suppliers, investors, as well as the government and community in which it operates.

I. CORPORATE GOVERNANCE RULES & PRINCIPLES

BOARD GOVERNANCE
Section 1.0 Composition of the Board
1.1 The Board consists of seven (7) directors (or a number in accordance with the Articles of Incorporation and By-Laws of the Company) who shall be elected by the stockholders at a regular or special meeting in accordance with the Amended By-Laws of the Company.

1.2 The Board shall have a policy on board diversity. To avoid groupthink and ensure that optimal decision making is achieved, said policy must endeavor to achieve a board composition that is diverse in gender, skills, competence, knowledge, experience and expertise.

Section 2.0 Independent Directors
2.1 The Company shall have, as far as practicable, such number of independent directors as may be required by law or applicable rules and regulations.

2.2 An Independent Director refers to a person who, ideally:
a. Is not, or has not been a senior officer or employee of the Company unless there has been a change in the controlling ownership of the Company;

b. Is not, and has not been in the three years immediately preceding the election, a director of the Company; a director, officer, employee of the Company’s subsidiaries, affiliates or related companies, if any; or a director, officer, employee of the Company’s substantial shareholders and its related companies;

c. Has not been appointed in the Company, its subsidiaries, affiliates or related companies, if any, as Chairman “Emeritus,” “Ex-Officio” Director/ Officer or Member of any Advisory Board, or otherwise appointed in a capacity to assist the Board in the performance of its duties and responsibilities within three (3) years immediately preceding his election;

d. Is not an owner of more than two percent (2%) of the outstanding shares of the Company, its subsidiaries, affiliates or related companies, if any;

e. Is not a relative of a director, officer, or substantial shareholder of the Company or any of its related companies or of any of its related companies or of any of its substantial shareholders. For this purpose, relatives include spouse, parent, child, brother, sister and the spouse of such child, brother or sister;

f. Is not acting as nominee or representative of any director of the Company or any of its related companies;

g. Is not a securities broker-dealer of listed companies and registered issuers of securities. “Securities broker-dealer” refers to any person holding any office of trust and responsibility in a broker-dealer firm, which includes, among others, a director, officer, principal stockholder, nominee of the firm to the Exchange, an associated person or salesman, and an authorized clerk of the broker or dealer;

h. Is not retained, either in his personal capacity or through a firm, as a professional adviser, auditor, consultant, agent or counsel of the Company, any of its related companies or substantial shareholder, or is otherwise independent of Management and free from any business or other relationship within the three years immediately preceding the date of his election;

i. Does not engage or has not been engaged, whether by himself or with other persons or through a firm of which he is a partner, director or substantial shareholder, in any transaction with the Company or any of its related companies or substantial shareholders;

j. Is not affiliated with any non-profit organization that receives significant funding from the Company or any of its related companies or substantial shareholders; and

k. Is not employed as an executive officer of another company where any of the Company’s executives serve as directors.

Related companies, as used in this section, refer to (a) the Company’s holding/ parent company; (b) its subsidiaries; and (c) subsidiaries of its holding/ parent company.

2.3 As a rule, independent directors may serve for a maximum of nine (9) consecutive years making sure however that the shareholders’ legal right to vote and be voted directors remains inviolable. If the Company wants to retain an independent director who has served for nine (9) consecutive years, the Board should provide meritorious justification and advise the shareholders of such justification during the annual shareholders’ meeting.

Section 3.0 Multiple Board Seats
The Board may consider the adoption of guidelines on the number of directorships that its members can hold in other corporations to ensure diligent and efficient performance of their responsibilities to the Company.

Section 4.0 Duties and Responsibilities of the Board
4.1 General Responsibility
It is the Board’s responsibility to foster the long-term success of the Company, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the best interest of its stockholders and other stakeholders.

a. The Board is primarily responsible for the governance of the Company. Corollary to setting the policies for the accomplishment of the corporate objectives, it shall provide an independent check on Management.

b. The Board should establish the Company’s vision, mission, strategic objectives, policies and procedures that shall guide its activities, including the mechanisms for effective monitoring of Management’s performance.

c. A director’s office is one of trust and confidence. He shall act in a manner characterized by fairness, accountability, integrity, transparency, and honesty.

4.2 Specific Duties and Functions
To ensure a high standard of best practice for the Company, its stockholders and other stakeholders, the Board shall:

a. Adopt a process of selection that encourages diversity and ensures a mix of competent directors and officers, without regard to gender, race, or religion;

b. Oversee the implementation of compensation plans and professional development programs for officers and succession planning for Management;

c. Oversee Management’s formulation and implementation of sound strategic policies and guidelines on major capital expenditures, business strategies, plans and policies and periodically evaluate Management’s overall performance;

d. Ensure that the Company complies with all relevant laws, regulations and endeavor to adopt best business practices;

e. Identify the Company’s stakeholders in the community in which it operates or are directly affected by its operations and oversee Management’s formulation and implementation of the Company’s policy on communicating or relating with them through an effective investor relations program and other appropriate communication programs;

f. Adopt a system of check and balance within the Board, which should be regularly reviewed for effectiveness;

g. Provide oversight with regard to enterprise risk management;

h. Identify key risk areas and key performance indicators and monitor these factors with due diligence;

i. Ensure that the Company establishes appropriate policies and procedures in accordance with this Manual and applicable laws and regulations, including, but not limited to, conflict of interest and related party transactions;

j. Constitute Committees, that it deems necessary to assist the Board in the performance of its duties and responsibilities;

l. Consider the creation and maintenance of an alternative dispute resolution system in the Company that can amicably settle differences or conflicts between the Company and its stockholders, if applicable; and

l. Keep Board authority within the powers of the institution as prescribed in the Articles of Incorporation, By-Laws and in existing law, rules and regulation

4.3 The positions of Chairman of the Board and Chief Executive Officer (“CEO”) should, as far as practicable, be held by separate individuals and each should have clearly defined responsibilities.

4.4 All directors shall undergo relevant and continuing training for a duration equal to or longer than what is required by law and regulations. First time directorsshall undergo an orientation program covering Securities and Exchange Commission (“SEC”-) mandated topics on corporate governance and an introduction to the Company’s business, Articles of Incorporation, and Code of Conduct. It should be able to meet the specific needs of the Company and the individual directors and aid any new director in effectively performing his or her functions.

The annual continuing training program, on the other hand, makes certain that the directors are continuously informed of the developments in the business and regulatory environments, including emerging risks relevant to the Company.

4.5 Chairman of the Board
In addition to the duties provided in the By-Laws of the Company, the responsibilities of the Chairman in relation to the Board shall include the following:

a. Makes certain that the meeting agenda focuses on strategic matters, including the over-all risk appetite of the Company, considering the developments in the business and regulatory environments, key governance concerns, and contentious issues that will significantly affect operations

b. Guarantees that the Board receives accurate, timely, relevant, insightful, concise, and clear information to enable it to make sound decisions;

c. Facilitates discussions on key issues by fostering an environment conducive for constructive debate and leveraging on the skills and expertise of individual directors;

d. Ensures that the Board sufficiently challenges and inquires on reports submitted and representations made by Management;e. Assures the availability of proper orientation for first time directors and continuing training opportunities for all directors; and

f. Makes sure that performance of the Board is evaluated at least once a year and discussed/ followed up on.

4.6 Board Assessment
The Board shall conduct an annual self-assessment of its performance, including the performance of the Chairman, individual members and Committees. The Nomination, Governance, and Compensation Committee shall oversee the assessment/evaluation process.

Every three (3) years, as far as practicable, the assessment may be supported by an external facilitator. The external facilitator can be any independent third party such as, but not limited to, a consulting firm, academic institution or professional organization appointed by the Board.

The Board assessment system shall provide a criteria and process to determine the performance of the Board, individual directors and Committees. The system shall allow for a feedback mechanism from shareholders.

4.7 The Board shall adopt a formal and transparent Board nomination and election policy that should include how it accepts nominations from minority shareholders and reviews nominated candidates. The policy should also include an assessment of the effectiveness of the Board’s processes and procedures in the nomination, election, or replacement of a director. Its process of identifying the quality of directors should all be aligned with the strategic direction of the Company.

In addition, the policy shall set forth the following procedures and safeguards in the director selection process:

a. The Nomination, Governance, and Compensation Committee (“Committee”) shall receive all letters nominating candidates for election as directors/independent directors from stockholders.

b. The Committee shall evaluate and screen nominees for directors vis-à-vis the applicable qualifications and disqualifications as set forth in the Company’s Manual on Corporate Governance, By-Laws and other applicable policy, law or regulations while ensuring that said qualifications are in line with the strategic objectives of the Company.

c. For nominees for independent directors, the Committee shall determine whether or not the nominees meet the independence criteria set forth in the Company’s Manual on Corporate Governance, By-Laws and other applicable policy, law or regulation.

d. The Committee shall also consider other relevant factors, such as any conflict of interest and directorships and/or positions in other corporations, which may compromise their capacity to diligently and effectively serve and perform their duties to the Board, the Company and its stakeholders, when elected.

e. With the assistance of an executive search firm, if necessary, the Committee shall develop a list of nominees to be recommended to the Board, ensuring thereby that:

i. the composition of the Board is an effective and balanced mix of knowledge, expertise, experience, complementary skills and talents that are mutually enforcing and promotes diversity in terms of gender and ethnicity, among others; and

ii. the selection of directors and independent directors is aligned and consistent with the Company’s mission, vision, and strategic directions and the Board’s duties and responsibilities. Whenever applicable, the Committee shall undertake the following procedures:

ii.i Identification of the necessary skills and qualifications that are aligned and will promote the achievement of the Company’s mission, vision, and strategic objectives.

ii.ii Assessment of the existing Board’s composition which entails cataloging member’s skills and experience;

ii.iii Comparison of the existing Board’s inventory of qualifications with the list of desired skills and experience to develop a clear picture of gaps, if any. The Committee may also identify potential upcoming vacancies owing to retirement or resignation in order to account for potential required skills and qualifications.

ii.iv The gaps, if any, should function as the driving criteria for the specified qualifications which the Committee shall assemble upon which the nominees shall be measured against.

f. Nominees for independent directors who accept the nomination are requested to submit to the Committee a Certification of Independent Director stating his/ her qualification and a list of affiliations and positions that may directly or indirectly give rise to conflict of interest or may contravene applicable regulations.

g. The Committee shall submit to the Board its recommended list of final nominees.

h. The nominees approved by the Board are recommended for election as directors at the meeting of the stockholders or the Board, as the case may be.

In the search of potential nominees, the Committee may use external sources, such as professional search firms, director databases and/or other reputable external sources to further enhance the search for and widen the base of potential nominees.

4.8 The Board shall adopt a Code of Business Conduct and Ethics, to provide standards for professional and ethical behavior as well as articulate acceptable and unacceptable conduct and practices in internal and external dealings. The Code shall be properly disseminated to the Board, Management, and employees. It shall be disclosed and made available to the public through the Company website. The Board shall ensure the proper and efficient implementation and monitoring of compliance with the Code of Business Conduct and Ethics and internal policies.

Effective communication channels must be provided to aid and encourage employees, customers, suppliers and creditors to raise concerns on potential unethical/unlawful behavior without fear of retribution. The Company’s ethics policy shall be made effective and inculcated in the Company culture through communication and awareness campaigns, continuous training to reinforce the Code, strict monitoring and implementation.

Section 5.0 Strengthening the Internal Control System and Enterprise Risk Management Framework
The Company shall have an adequate and effective internal control system and enterprise risk management framework.

Internal Controls Responsibilities of the Company
a. The control environment of the Company consists of:

i. The Board which ensures that the Company is properly managed and effectively supervised;

ii. Management that actively manages and operates the Company in a sound and prudent manner;

iii. The organizational and procedural controls supported by effective management information and risk management reporting systems; and

iv. An independent audit mechanism to monitor the adequacy and effectiveness of the Company’s financial reporting, governance, operations, and information systems, including the reliability and integrity of financial and operational information, the effectiveness and efficiency of operations, the safeguarding of assets, confidential information, and compliance with laws, rules, regulations and contracts.

b. The Board’s internal control mechanisms for the Board’s oversight responsibility may include:

i. Definition of the duties and responsibilities of the CEO who is ultimately accountable for the Company’s organizational and operational controls;

ii. Selection of a CEO who possesses the ability, integrity and expertise essential for the position;

iii. Establishment by the Company of an internal audit system that can reasonably assure the Board, Management, and stockholders that the Company’s key organizational and operational controls are appropriate, adequate, effective, and complied with;

iv. Selection and appointment of proposed senior management officers; and

v. Review of the Company’s personnel and human resource policies and sufficiency, conflict of interest situations, changes in the compensation plan for employees and succession plan for officers and Management.

5.1 The Company shall have in place an independent internal audit function that provides independent and objective assurance, and consulting services designed to add value and improve the Company’s operations. The following are the functions of the internal audit group among others:

a. Provides an independent risk-based assurance service to the Board, Audit and Risk Management Committee, and Management, focusing on reviewing the effectiveness of governance and control processes in (1) promoting the right value and ethics; (2) ensuring effective performance management and accounting in the organization; (3) communicating risk and control information; and (4) coordinating the activities and information among the Board, external and internal auditors, and Management;

b. Performs regular and special audit as contained in the annual audit plan and/or based on the Company’s risk assessment;

c. Performs consulting and advisory services related to governance and control as appropriate for the organization;

d. Performs compliance and audit of relevant laws, rules and regulations, contractual obligations and other commitments, which could have a significant impact on the organization;

e. Reviews, audits and assesses the efficiency and effectiveness of the internal control system of all areas of the Company;

f. Evaluates operations or programs to ascertain whether results are consistent with established objectives and goals, and whether the operations or programs are being carried out as planned;

g. Evaluates specific operations at the request of the Board or Management, as appropriate; and

h. Monitors and evaluates governance processes.

5.2 The Chief Audit Executive (“CAE”) of MERALCO shall oversee and be responsible for the internal audit activity of the Company.

The following are the responsibilities of the CAE among others:
a. Periodically reviews the internal audit charter and presents it to Management and the Audit and Risk Management Committee for Approval;

b. Establishes a risk-based internal audit plan, including policies and procedures, to determine the priorities of the internal audit activity, consistent with the organization’s goals;

c. Communicates the internal audit activity’s plans, resource requirements and impact of resource limitations, as well as significant interim changes, to Management and the Audit and Risk Management Committee for review and approval;

d. Spearheads the performance of the internal audit activity to ensure it adds value to the organization;

e. Reports periodically to the Audit and Risk Management Committee on the internal audit activity’s performance relative to its plan; and

f. Presents findings and recommendations to the Audit and Risk Management Committee and gives advice to Management and the Board on how to improve internal processes.

5.3 The Company shall have a separate risk management function to identify, assess and monitor key risk exposures.

The risk management function involves the following activities, among others:

a. Defining a risk management strategy;

b. Identifying and analyzing key risk exposures relating to economic, environmental, social and governance (“EESG”) factors and the achievement of the organization’s strategic objectives;

c. Evaluating and categorizing each identified risk using the Company’s predefined risk categories and parameters;

d. Establishing a risk register with clearly defined, prioritized and residual risks;

e. Developing a risk mitigation plan for the most important risks to the Company, as defined by the risk management strategy;

f. Communicating and reporting significant risk exposures including business risks (e.g. strategic, compliance, operational, financial and reputational risks), control issues and risk mitigation plan to the Audit and Risk Management Committee or other Committee performing the risk management functions; and

g. Monitoring and evaluating the effectiveness of the organization’s risk management processes.

Section 6.0 Qualifications of Directors
6.1 Every director shall own at least one (1) share of the capital stock of the Company of which he is a director, which share shall stand in his name in the books of the Company. He must have all the qualifications and none of the disqualifications of a director. The following are the qualifications:

a. Possesses the skills needed to effectively carry out his functions as director;

b. Possesses integrity/ probity;

c. Has strong adherence to legal and moral principles and

a. Have a practical understanding of business in general and of the business of the Company, in particular.

6.2 The Nomination, Governance, and Compensation Committee may consider and recommend to the Board such other qualifications which are now or may hereafter be provided under existing laws and regulations or any amendments thereto.

Section 7.0 Disqualification of a Director
7.1 Permanent Disqualification
a. Any person convicted or adjudged guilty of any of the offenses or crimes specified below in a final and executory judgment, decree or order issued by a judicial or an administrative body having competent jurisdiction or the SEC;

i. an offense involving moral turpitude, fraud, embezzlement, theft, estafa, counterfeiting, misappropriation, forgery, bribery, false affirmation, perjury or other fraudulent acts;

ii. any crime that (1) involves the purchase or sale of securities, as defined in the Securities Regulation Code; (2) arises out of the person’s conduct as an underwriter, broker, dealer, investment adviser, principal, distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or floor broker; or (3) arises out of his fiduciary relationship with a bank, quasi-bank, trust company, investment house, or as an affiliated person of any of them; or

iii. having willfully violated, or willfully aided, abetted, counselled, induced or procured the violation of any provision of the Securities Regulation Code, the Corporation Code, or any other law administered by the SEC or BSP, or any rule, regulation, or order of the SEC or BSP;

b. Any person who, by reason of misconduct, after hearing, is permanently enjoined by a final judgment or order of the SEC or any court or administrative body of competent jurisdiction from:

i. acting as underwriter, broker, dealer, investment adviser, principal distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or floor broker;

ii. acting as director, or officer of a bank, quasi-bank, trust company, investment house, or investment company;

iii. engaging in or continuing any conduct or practice in any of the capacities mentioned in sub-paragraphs (1) and (2) above.

The disqualification shall also apply if such person: (1) is currently the subject of an order of the SEC or any court or administrative body denying, revoking or suspending any registration, license or permit issued to him under the Corporation Code, Securities Regulation Code or any other law administered by the SEC or BSP, or under any rule or regulation issued by the SEC or BSP; or (2) has otherwise been restrained to engage in any activity involving securities and banking or (3) is currently the subject or an effective order of a self-regulatory organization suspending or expelling him from membership, participation or association with a member or participant of the said organization.

c. Any person found guilty by final judgment or order of a foreign court or equivalent financial regulatory authority of acts, violations or misconduct similar to any of the acts, violations or misconduct enumerated in paragraphs (a) and (b) above;

d. Any person convicted by final judgment of an offense punishable by imprisonment for more than six (6) years, or a violation of the Corporation Code committed within five (5) years prior to the date of his election or appointment; and

e. Any person judicially declared as insolvent

7.2 Temporary Disqualification
The Nomination, Governance, and Compensation Committee may consider and recommend to the Board temporary disqualification of a director based on any of the following grounds:

a. Refusal to fully disclose the extent of his business interest as required by existing laws or Company rules and regulations. The disqualification shall be in effect as long as the refusal persists.

b. Absence in more than fifty percent (50%) of all regular and special meetings of the Board during his incumbency, or any twelve-month period during the said incumbency, unless the absence is due to illness, death in the immediate family or serious accident. The disqualification shall apply for purposes of the succeeding election.

c. Dismissal or termination for a cause as director of any corporation covered by the Governance Code. This disqualification shall be in effect until he has cleared himself of any involvement in the cause that gave rise to his dismissal or termination.

d. If any of the judgments or orders cited in the grounds for permanent disqualification has not yet become final.

Any temporary disqualification of a director recommended by the Nomination, Governance, and Compensation Committee to be valid and effective must be approved by the Board, as well as, comply with the requirements of applicable laws, rules and regulations.

A temporary disqualified director shall, within such period prescribed by the Board, but in no case less than sixty (60) business days from such disqualification, take the appropriate action to remedy or correct the disqualification. If he fails or refuses to do so for unjustified reasons, the disqualification shall become permanent.

If an independent director becomes an officer or employee of the Company, his designation as independent director is automatically terminated and he shall be disqualified as an independent director.

The Nomination, Governance, and Compensation Committee may consider and recommend to the Board other grounds for disqualifications which are now or may hereafter be provided under existing laws and regulations or any amendments thereto.

7.3 Duties and Responsibilities of a Director
A director shall have the following duties and responsibilities:

a. To conduct fair business transactions with the Company and ensure that his personal interest does not conflict with the interest of the Company;

b. To devote time and attention necessary to properly discharge and effectively perform his duties and responsibilities;

c. To act judiciously;

d. To exercise independent judgment;

e. The non-executive directors of the Board should concurrently serve as directors to an optimum number of publicly listed companies to ensure that they have sufficient time to fully prepare for meetings, challenge Management’s proposals/views, and oversee the long-term strategy of the Company.

In this regard, a Director should notify the Board before accepting a directorship in another company

f. To have a working knowledge of the statutory and regulatory requirements affecting the Company, including the contents of its Articles of Incorporation and By-Laws, the requirements of the SEC, and where applicable, the requirements of other regulatory agencies;

g. To observe confidentiality of information; and

h. To ensure the continuing soundness, effectiveness and adequacy of the Company’s control environment.

Section 8.0 Compensation of Directors
Directors, as such, shall not receive any compensation unless approved by the stockholders or provided in the By-Laws of the Company. No Director should participate in the approval of his compensation. However, the Board may, from time to time, approve a reasonable per diem that a Director may receive for attendance in Board and Committee meetings.

Section 9.0 Board Committees
The Board shall form Committees to aid in ensuring compliance with the principles of good corporate governance. The members of such Committees shall be appointed by the Board annually.

All established Committees shall have Committee Charters stating in plain terms their respective purposes, memberships, structures, operations, reporting processes, resources and other relevant information. The Charters should provide the standards for evaluating the performance of the Committees. It should be fully disclosed on the Company’s website.

9.1 Nomination, Governance, and Compensation Committee
a. The Nomination, Governance, and Compensation Committee shall be composed of at least three (3) directors. As far as practicable, one of the members, preferably the Chairman, must be an independent director.

b. The Nomination, Governance, and Compensation Committee shall have the following duties and responsibilities:

With respect to nomination:
1. Determine the nomination and election process for the Company’s directors.

2. Screen and shortlist qualified individuals in order to ensure that all nominations are fair and transparent and in accordance with applicable laws, regulations, listing rules and the Company’s policies.

3. 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 applicable laws and regulations.

With respect to governance:
4. Review and monitor the structure, size and composition of the Board and make recommendations to ensure that the Board has the required number of Independent Directors, when applicable, with the qualifications and none of the disqualifications as provided in applicable laws, regulations, listing rules and the Company’s policies. The Committee shall ensure that the Board has an appropriate mix of expertise, experience, independence, and skills that would encourage critical discussion and promote a balanced decision in the attainment of the Company’s strategic objectives and sustainable development.

5. Review with the Board on an annual basis the appropriate skills and characteristics required on the Board in the context of the strategic direction of the Company.

6. Review and endorse to the Board recommendations of the Compliance Officer to address possible violations of provisions and requirements of the Manual of Corporate Governance and other corporate governance rules applicable to the Company including the Company’s Manual on Corporate Governance.

7. Recommend Committee assignments, including Committee Chairmanships, to the full Board for approval upon advice from the Chairman of the Board and CEO.

8. In consultation with the concerned Committees, annually Review the Charters of all Committees and recommend revisions for the Board’s appropriate action.

9. Recommend to the Board the development of corporate governance principles, structures, best practices and rules.

10. Oversee the implementation of the corporate governance framework and periodically review the said framework to ensure that it remains appropriate in light of material changes to the Company’s size, complexity and business strategy, as well as its business and regulatory environments.

11. Design an orientation program for new Directors and related continuing education programs for existing Directors.

12. Review annually the prescribed Full Business Interest Disclosures of all incoming Directors and officers.

13. Assess the effectiveness of the Board’s processes and procedures in the election or replacement of Directors.

14. Oversee the periodic performance evaluation of the Board and its Committees as well as the CEO, and conduct an annual self-evaluation of its performance, including the engagement of an external facilitator to assess Board effectiveness every three (3) years.

With respect to compensation:
15. Provide guidance to the Board in the formulation and development of a remuneration philosophy and programs consistent with the Company’s culture, strategy, and business environment in which it operates; and recommend approval thereof by the Board;

16. Exercise functional oversight over the development and administration of:

a. Remuneration programs, including but not limited to retirement plans and long-term incentive plans to ensure alignment with overall philosophy and strategy; and

b. Leadership development and succession planning and retention programs for officers.

17. Review and endorse for Board ratification all promotions as officers of the Company, except the President and/or CEO, Chief Operating Officer (“COO”), and Chief Finance Officer (“CFO”).

18. Perform such other functions as may be delegated by the Board.

9.2 Audit and Risk Management Committee
a. The Audit and Risk Management Committee shall be composed of at least three (3) directors, preferably with relevant background, knowledge, skills, and/or experience in the areas of accounting and finance and another with audit experience. As far as practicable, one of the members, preferably the Chairman, must be an independent director. Each member shall have adequate understanding at least or competence at most of the Company’s financial management systems and environment.

The Audit and Risk Management Committee shall have the following duties and responsibilities:

i. Perform oversight functions over the Company’s internal and external auditors. It should ensure that internal and external auditors act independently from each other and that both auditors are given unrestricted access to all records, properties, and personnel to enable them to perform their respective audit functions;

Approve and Recommend the appointment, reappointment, removal, and fees of the external auditor. The appointment, reappointment, removal, and fees of the external auditor should be recommended by the Audit and Risk Management Committee, approved by the Board and ratified by the shareholders. For removal of the external auditor, the reasons for removal or change should be disclosed to the regulators and the public through the Company website and required disclosures.

Review and assess the integrity and independence of external auditors and exercising 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. The review and monitoring of the external auditor’s suitability and effectiveness shall be done on an annual basis.

ii. Review and approve the annual internal audit plan to support the attainment of the objectives of the Company. The plan shall include the audit scope, resources, and budget necessary to implement it;

iii. Prior to commencement of the audit, discuss with the external auditor the nature, scope, and expenses of the audit, and ensure proper coordination if more than one (1) audit firm is involved in the activity to secure proper coverage and minimize duplication of efforts;.v. Monitor and evaluate the adequacy and effectiveness of the Company’s internal control system, including financial reporting control and information technology security;

vi. Review the reports submitted by the internal and external auditors;

vii. Review the completeness, accuracy, and fairness of the quarterly, half-year, and annual financial statements before their submission to the Board or regulators with particular focus on the following matters:

vii.i Any change/s in accounting principles and practices

vii.ii Major judgmental areas

vii.iii Significant adjustments resulting from audit

vii.iv Going concern assumptions

vii.v Compliance with accounting standards

vii.vi Compliance with tax, legal, and regulatory requirements.

viii. Coordinate, monitor, and facilitate compliance with laws, rules, and regulations;

ix. Evaluate and determine the non-audit work, if any, of the external auditor, 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 to the Company’s overall consultancy expenses.

The Audit and Risk Management Committee shall disallow any non-audit work that will conflict with his duties as an external auditor or may pose a threat to his independence. The non-audit work, if allowed, should be disclosed in the Company’s annual report;

x. Establish and identify the reporting line of the Internal Auditor to enable him to properly fulfill his duties and responsibilities. The Audit and Risk Management Committee shall ensure that, in the performance of the work of the Internal Auditor, he shall be free from interference by outside parties;

xi. Elevate to international standards the accounting and auditing processes, practices and methodologies; and

xii. Such other duties and responsibilities as may be provided in the Audit and Risk Management Committee Charter.

xiii. The Audit and Risk Management Committee shall meet quarterly and as often as may be necessary.

xiv. Develops a formal enterprise risk management plan which contains the following elements: (a) common language or register of risks, (b) well-defined risk management goals, objectives and oversight, (c) uniform processes of assessing risks and developing strategies to manage prioritized risks, (d) designing and implementing risk management strategies and (e) continuing assessments to improve risk strategies, and (e) continuing assessments to improve risk strategies, processes and measures;

Oversees the implementation of the enterprise risk management

xv. Evaluates the risk management plan to ensure its continued relevance, comprehensiveness and effectiveness. The Committee revisits defined risk management strategies, looks for emerging or changing material exposures, and stays abreast of significant developments that seriously impact the likelihood of harm or loss;

xvi. Advises the Board on its risk appetite levels and risk tolerance limits;

xvii. Reviews at least annually the Company’s risk appetite levels and risk tolerance limits based on changes and developments in the business, the regulatory framework, the external economic and business environment, and when major events occur that are considered to have major impacts on the Company;

xviii. Assesses the probability of each identified risk becoming a reality and estimates its possible significant financial impact and likelihood of occurrence. Priority areas of concern are those risks that are the most likely to occur and to impact the performance and stability of the Company and its stakeholders;

xix. Provides oversight over Management’s activities in managing credit, market, liquidity Reports to the Board on a regular basis, or as deemed necessary, the Company’s material risk exposures, the actions taken to reduce the risks, and recommends further action or plans, as necessary.

iv. Organize an internal audit department and consider the appointment of an independent internal auditor as well as consider an independent external auditor, and the terms and conditions of their engagement and removal;

9.3 Finance Committee
a. The Finance Committee shall be composed of at least three (3) directors with the Chief Finance Officer as ex-officio member. As far as practicable, one of the members, preferably the Chairman, must be an independent director.

b. The Finance Committee is in charge of reviewing the financial operations of the Company and matters regarding the acquisitions of or investments in companies, business or projects. It endorses recommendations to the Board as deemed appropriate or approved actions within its delegated authority.

c. The Finance Committee shall review, advise and recommend approval, decision or action on financial matters, including but not limited to the following:

i. Establishment of and changes to financial, accounting and treasury policies;

ii. All major financing transactions of the Company;

iii. Issuance of shares and shares repurchases, valuation of shares, and other such activities involving existing shares;

iv. The Company’s corporate plans and budgets;

v. Major contracts and variations;

vi. Proposals for dividends and transfers to reserve;

vii. Financing guarantees and indemnities and mortgaging of the Company’s assets;

viii. Any actual, or potential, major exception or occurrence which has, or may have, a major financial impact on the Company;

ix. Guarantees, financial support, undertakings and indemnities concerning investments or liabilities of subsidiary or associated companies, other than those which are the subject of an existing general or specific Board or Committee approval;

x. Capitalization of subsidiaries or associated companies, other than that which is subject of an existing general or specific Board or Committee approval;

xi. Proposed principal agreements with Government, Joint Venture and Shareholders’ Agreements, Major Acquisitions, Divestment and Property Redevelopment; and

xii. Such other duties and responsibilities as may be provided in the Finance Committee Charter.

d. Evaluates on an ongoing-basis existing relations between and among businesses and counterparties to ensure that all related parties are continuously identified, RPTs are monitored, and subsequent changes in relationships with counterparties (from nonrelated to related and vice versa) are captured. Related parties, RPTs and changes in relationships should be reflected in the relevant reports to the Board and regulators/supervisors;

e. Evaluates all material RPTs to ensure that these are not undertaken on more favorable economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such related parties than similar transactions with non-related parties under similar circumstances and that no corporate or business resources of the Company are misappropriated or misapplied, and to determine any potential reputational risk issues that may arise as a result of or in connection with the transactions. In evaluating RPTs, the Committee takes into account, among others, the following:

i. The related party’s relationship to the Company and interest in the transaction;

ii. The material facts of the proposed RPT, including the proposed aggregate value of such transaction

iii. The benefits to the Company of the proposed RPT;

iv. The availability of other sources of comparable products or services; and

v. An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances. The Company should have an effective price discovery system in place and exercise due diligence in determining a fair price for RPTs.

f. Ensures that appropriate disclosure is made, and/or information is provided to regulating and supervising authorities relating to the Company’s RPT exposures, and policies on conflicts of interest or potential conflicts of interest that are inconsistent with such policies, and conflicts that could arise as a result of the Company’s affiliation or transactions with other related parties;

g. Reports to the Board on a regular basis, the status and aggregate exposures to each related party, as well as the total amount of exposures to all related parties;

h. Ensures that transactions with related parties, including write-off of exposures are subject to a periodic independent review or audit process; and

i. Oversees the implementation of the system for identifying, monitoring, measuring, controlling, and reporting RPTs, including a periodic review of RPT policies and procedures.

Section 10.0 The Management
The Management is represented by a Management Committee (“Mancom”) composed of corporate officers and executives formed and headed by the CEO and/or the President. All principal policies and directions governing the organization, management and operation of the Company as well as its subsidiaries shall be formulated and implemented by this Committee, subject to Board approval when required by existing laws. The Committee shall regularly report to the Board at its regular Board meeting, or during special meeting whenever necessary or requested by the Board, through the CEO and/or the President, on all matters concerning the Company's operation as well as significant events or occurrences affecting the Company.

Section 11.0 Duties and Responsibilities of the CEO
The following are roles and responsibilities of the CEO among others:

a. Determines the Company’s strategic direction and formulates and implements its strategic plan on the direction of the business;

b. Communicates and implements the Company’s’s vision, mission, values and overall strategy and promotes any organization or stakeholder change in relation to the same;

c. Oversees the operations of the Company and manages human and financial resources in accordance with the strategic plan;

d. Has a good working knowledge of the Company’s industry and market and keeps up to date with its core business purpose;

e. Directs, evaluates and guides the work of the key officers of the Company;

f. Manages the Company’s resources prudently and ensures a proper balance of the same;

g. Provides the Board with timely information and interfaces between the Board and the employees;

h. Builds the corporate culture and motivates the employees of the Company; and

i. Serves as the link between internal operations and external stakeholders.

Section 12.0 The Corporate Secretary
The Corporate Secretary is an officer of the Company and is expected to observe the highest degree of professionalism, integrity, and diligence. The Corporate Secretary should not be a member of the Board and should annually attend a training on Corporate Governance.

12.1 Qualifications of the Corporate Secretary
The Corporate Secretary is primarily responsible to the Company and its shareholders, and not to the Chairman or President of the Company and has, among others, the following duties and responsibilities:

a. Assists the Board and the Committees in the conduct of their meetings, including preparing an annual schedule of Board and Committee meetings and the annual board calendar, and assisting the chairs of the Board and its Committeesto set agendasfor those meetings;

b. Safe keeps and preserves the integrity of the minutes of the meetings of the Board and its Committees, as well as other official records of the Company;

c. Keeps abreast on relevant laws, regulations, all governance issuances, relevant industry developments and operations of the Company, and advises the Board and the Chairman on all relevant issues as they arise;

d. Works fairly and objectively with the Board, Management and stockholders and contributes to the flow of information between the Board and Management, the Board and its Committees, and the Board and its stakeholders, including shareholders;

e. Advises on the establishment of Committees and their terms of reference;

f. Informs members of the Board, in accordance with the by-laws, of the agenda of their meetings, at least five working days in advance, and ensures that the members have before them accurate information that will enable them to arrive at intelligent decisions on matters that require their approval;

g. Attends all Board meetings, except when justifiable causes, such as illness, death in the immediate family and serious accidents, prevent him/her from doing so;

h. Performs required administrative functions;

i. Oversees the drafting of the by-laws and ensures that they conform with regulatory requirements; and

j. Performs such other duties and responsibilities as may be provided by the SEC.

Section 13.0 Compliance Officer
13.1 The Board should ensure that it is assisted in its duties by a Compliance Officer, who should have a position with adequate stature and authority in the Company. The Compliance Officer should not be a member of the Board of Directors and should annually attend a training on corporate governance.

The Compliance Officer is a member of the Company’s management team in charge of the compliance function. He/she is primarily liable to the Company and its shareholders, and not to the Chairman or President of the Company. He/she has, among others, the following duties and responsibilities;

a. Ensures proper on boarding of new directors (i.e., orientation on the Company’s business, charter, articles of incorporation and by-laws, among others);

b. Monitors, reviews, evaluates and ensures the compliance by the Company, its officers and directors with the relevant laws, rules and regulations and all governance issuances of regulatory agencies;

c. Reports violations of the aforementioned rules to the Board and recommends the imposition of appropriate disciplinary action;

f. Ensures the integrity and accuracy of all documentary submissions to regulators;

g. Appears before the SEC when summoned in relation to compliance with the Code;

h. Collaborates with other departments to properly address compliance issues; which may be subject to investigation;

i. Identifies possible areas of compliance issues and works towards the resolution of the same;

j. Ensures the attendance of Board members and key officers to relevant trainings; and

k. Performs such other duties and responsibilities as may be provided by the SEC.

Section 14.0 External Auditor
14.1 The Board, after consultations with the Audit and Risk Management Committee, shall recommend to the stockholders an external auditor duly accredited by the SEC who shall undertake an independent audit of the Company, and shall provide an objective assurance on the manner by which the financial statements shall be prepared and presented to the stockholders.

14.2 The external auditor of the Company should not at the same time provide the services of an internal auditor.

14.3 The Company’s external auditor should be rotated, or the handling partner should be changed every five (5) years or earlier.

14.4 The reason(s) for the resignation, dismissal or cessation from service of an external auditor and the date thereof shall be reported in the Company’s annual and current reports. Said report should include a discussion of any disagreement with said former external auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

14.5 If an external auditor believes that the statements made in the Company’s annual report, information statement or proxy statement filed during his engagement is incorrect or incomplete, he shall present his views in said reports.

II. SUPPLY OF INFORMATION
All Directors should be provided with complete, adequate and timely information about the matters to be taken up in their meetings and which would enable them to discharge their duties.

A. Management is responsible for providing the Board with appropriate and timely information. If the information provided by Management is insufficient, the Board will make further inquiries where necessary to which the persons responsible will respond as fully and promptly as possible.

B. The Directors, either individually or as a group, in the performance of their duties may seek independent professional advice within the guidelines set by the Board.

C. Full agenda and comprehensive Board papers are to be circulated to all directors well in advance of each Board meeting.

D. Full Board minutes of each Board meeting are kept by the Corporate Secretary and are available for inspection by any director during office hours.

III. DISCLOSURE AND TRANSPARENCY
Company Disclosure Policies and Procedures

The Board shall establish corporate disclosure policies and procedures to ensure a comprehensive, accurate, reliable and timely report to the shareholders and other stakeholders that gives a fair and complete picture of a Company’s financial condition, results and business operations in accordance with the disclosure and reporting requirements of the SEC and other regulators.

The Company shall fully disclose all relevant and material information on individual Board members and key executives to evaluate their experience and qualifications and assess any potential conflicts of interest that might affect their judgment. This includes directors and key officers’ qualifications, membership in other boards, other executive positions, and corporate governance trainings attended.

The Company shall provide a clear disclosure of its policies and procedure for setting Board and executive remuneration, as well as the level and mix of the same. Remuneration shall as much as practicable be on an individual basis, including termination and retirement provisions.

The Company shall disclose its policies governing Related Party Transactions (“RPT”) and other unusual or infrequently occurring transactions.

The Board shall have a clear and focused policy on the disclosure of non-financial information, with emphasis on the management of EESG issues of its business, which underpin sustainability. The Company shall adopt a globally recognized standard/framework in reporting sustainability and non-financial issues.

IV. ACCOUNTABILITY AND AUDIT
A. The Board shall ensure that stockholders are provided with a balanced and comprehensible assessment of the Company’s performance, position and prospects on a quarterly basis, including interim and other reports that could adversely affect its business, as well as reports to regulators that are required by law.

B. Management should formulate the rules, procedures on internal controls, and financial operations for presentation to the Audit and Risk Management Committee in accordance with the following guidelines:

i. The extent of its responsibility in the preparation of the financial statements of the Company, with the corresponding delineation of the responsibilities that pertain to the external auditor, should be clearly explained;

ii. An effective system of internal control that will ensure the integrity of the financial reports and protection of the assets of the Company should be maintained for the benefit of all stockholders and other stakeholders;

iii. On the basis of the approved audit plans, internal audit examinations should cover, at the minimum, the evaluation of the adequacy and effectiveness of controls that cover the Company’s financial reporting, governance, operations and information systems, including the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, protection of assets, and compliance with contracts, laws, rules and regulations; and

iv. The Company should consistently comply with the financial reporting requirements of the SEC.

V. INVESTORS’ RIGHTS AND PROTECTION
Shareholders’ Rights and Protection
The Board commits to treat all shareholders fairly and equitably, and also recognize, protect and facilitate the exercise of their rights. These rights relate to the following among others:

Section 1.0 Voting Right
1.1 Stockholders shall have the right to elect, remove and replace directors and vote on certain corporate acts in accordance with the Corporation Code.

1.2 Cumulative voting shall be used in the election of directors.

Section 2.0 Pre-emptive Right
Unless otherwise stated in the Articles of the Incorporation or the Corporation Code of the Philippines, all stockholders shall enjoy pre-emptive right to subscribe to all issues or disposition of shares in proportion to their respective shareholdings

Section 3.0 Right of Inspection
Any stockholder who desires to exercise his right to inspect corporate books and records of the Company must make a written request addressed to the Corporate Secretary and stating the specific reason(s) or purpose(s) for the inspection. The exercise of such right may be denied if:

(i) the requesting stockholder improperly used information obtained from prior examination; or,

(ii) is not acting in good faith; or,

(iii) there is a reasonable ground to safeguard the interests of the Company, such as when the subject of inspection contains confidential or proprietary information or covered by a confidentiality or nondisclosure obligation which will be violated by the Company if inspection were allowed. In no case shall the stockholder be allowed to take corporate books and other records out of the principal office of the Company for the purpose of inspecting them. The Corporate Secretary may elevate the request for inspection for the information, approval, or other appropriate action by the Board. This Manual shall be available for inspection by any stockholder of the Company at reasonable hours on business days.

Section 4.0 Right to Information
Stockholders shall be provided, upon request, with periodic reports filed by the Company with the SEC (e.g., proxy statement/information statement and annual report) which disclose personal or professional information about the Directors and Officers such as their educational and business background, holdings of the Company’s shares, material transactions with the Company, relationship with other Directors and Officers and the aggregate compensation of Directors and Officers.

Section 5.0 Right to Dividends
5.1 Stockholders shall have the right to receive declared dividends subject to the procedures prescribed by the Board.

5.2 The Company shall be compelled to declare dividends when its retained earnings exceed 100% of its paid-in capital stock, except:

a. when justified by definite corporate expansion projects or programs approved by the Board; or

b. when the Company is prohibited under any loan agreement with any financial institution or creditor, whether local or foreign, from declaring dividends without its consent, and such consent has not been secured; or

c. when it can be clearly shown that such retention is necessary under special circumstances obtaining in the Company, such as when there is a need for special reserve for probable contingencies.

Section 6.0 Appraisal Right
The stockholders shall have appraisal right under any of the following circumstances:

a. In case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any aspect superior to those of outstanding shares of any class, or of extending or reducing the term of corporate existence;

b. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the property and assets of the Company;

c. In case of merger or consolidation; and

d. Investment of funds in any other corporation or business or for any purpose other than the primary purpose for which the Company was organized.

Section 7.0 Right to Transparent and Fair Conduct of Stockholders’ Meeting
The Board shall afford stockholders the right to propose the holding of meetings and to include agenda items ahead of the scheduled Annual and Special Shareholders’ Meeting. The Board shall also adopt appropriate measures to ensure that stockholders’ meetings are conducted in a fair and transparent manner.

The Board shall encourage active shareholders’ participation by sending the Notice of Annual and Special Shareholders’ Meeting with sufficient and relevant information at least 28 working days before the meeting. Shareholders unable to personally attend such meetings, should be advised ahead of time of their right to appoint a proxy on their behalf.

Subject to the requirements of law, rules and regulations, the By-Laws of the Company and the rules approved by the Board, the validity of a proxy should be resolved in favor of the stockholder. It shall be the duty of the directors to promote stockholder rights, remove impediments to the exercise of stockholders’ rights and allow possibilities to seek redress for violation of their rights. The directors shall envisage the exercise of stockholders’ voting rights and the solution of problems through appropriate mechanisms. They shall be instrumental in removing excessive costs and other administrative or practical impediments to stockholders participating in meetings and/or voting in person.

The Board shall encourage active shareholder participation by making the result of the votes taken during the most recent Annual or Special Shareholders’ Meeting publicly available the next working day. In addition, the Minutes of the Annual and Special Shareholders’ Meeting shall be available on the Company website within five business days from the end of the meeting.

The Board shall adopt and make available at the option of a shareholder, an established Alternative Dispute Resolution (“ADR”) mechanism to resolve intra-corporate disputes in an amicable and effective manner.

The Board shall establish an Investor Relations Office (“IRO”) to ensure constant engagement with its shareholders.

VI. RESPECT FOR STAKEHOLDERS’ RIGHTS AND EFFECTIVE REDRESS FOR VIOLATIONS THEREOF
The Board shall identify the Company’s various stakeholders and promote cooperation between them and the Company in creating wealth, growth and sustainability.

The Board shall establish clear policies and programs to provide a mechanism on the fair treatment and protection of stakeholders.

The Board shall adopt a transparent framework and process that allows stakeholders to communicate with the Company and to obtain redress for the violation of their rights. Stakeholder engagement touch points in the Company such as the Investor Relations Office, Office of the Corporate Secretary, Customer Relations Office, and Corporate Communications Group shall be strengthened.

The Board shall establish policies, programs and procedures that encourage employees to actively participate in the realization of the Company’s goals and in its governance.

The Board shall adopt an anti-corruption policy (encompassing corrupt practices such as, but not limited to, bribery, fraud, extortion, collusion, conflict of interest and money laundering) and program in its Code of Conduct. This shall be disseminated to employees across the organization.

The Board shall establish a suitable framework for whistleblowing that allows employees to freely communicate their concerns about illegal or unethical practices, without fear of retaliation and to have direct access to an independent member of the Board or a unit created to handle whistleblowing concerns. The Board shall conscientiously supervise and ensure enforcement of the framework.

Section 1.0 Communication and Training Process
1.1 All Company directors and executives are tasked to ensure the thorough dissemination of this Manual to all employees and related third parties, and to likewise enjoin compliance in the process.

1.2 An adequate number of printed copies of this Manual must be reproduced and distributed to each department of the Company.

1.3 Funds will be allocated by the Company for the purpose of conducting an orientation program or workshop to operationalize this Manual.

1.4 A director shall, before his assumption of duty, be required to attend a seminar on corporate governance which shall be conducted by a recognized and reputable training provider.

Section 2.0 Governance Rating System
The Board shall develop a rating system to measure the performance of the Board and
Management in accordance with the criteria provided in this Manual and other rules and
regulations on good corporate governance.

Section 3.0 Penalties for Non-Compliance with Manual
3.1 The Compliance Officer shall be specifically tasked with the responsibility of ensuring compliance with the Manual.

3.2 The Compliance Officer shall, after proper investigation, notice and hearing, determine and recommend to the Board, the imposition of appropriate disciplinary action on the responsible parties and the adoption of measures to prevent repetition of the violation.

VIII. SEPARABILITY CLAUSE
The Board endeavors to comply at all times with the principles set out in this Manual. In case of conflict between the Code of Corporate Governance issued by the SEC and this Manual, the Code shall prevail. If the conflict is such that the affected provision of this Manual is rendered invalid, the rest of the revisions of this Manual shall remain valid.

IX. EFFECTIVITY
It shall be published in the Website of the Company and shall take effect upon approval of the Board.

Approved by the Board on the 26th day of March 2021.

Management Control Policy

I. INTRODUCTION
This Policy defines the roles and responsibilities of Management, Internal Audit, and the Audit and Risk Management Committee related to controls over the organization’s processes. It also describes the responsibility for a system of checks and balances and emphasizes the importance of internal control processes. Internal control is an integral part of Company’s governance system and risk management

II. STATEMENT OF POLICY
Management is charged with the responsibility for establishing a network of processes with the objective of controlling the operations of the Company in a manner which provides the Board of Directors reasonable assurance that:

A. Data and information published either internally or externally is accurate, reliable and timely;

B. The actions of directors, officers and employees are in compliance with the organization’s policies, standards, plans and procedures, and all relevant laws and regulations;

C. The organization’s resources (including its people, systems, data/information bases, and customer goodwill) are adequately protected against loss, fraud, misuse, and damage;

D. Resources are acquired economically and employed profitably; quality business processes and continuous improvement are emphasized; and

E. The organization’s pans, programs, goals, and objectives are achieved.

III. INTERNAL CONTROL RESPONSIBILITIES OF THE COMPANY
A. Controlling is a function of management and is an integral part of the overall process of managing operations. As such, it is the responsibility of managers at all levels of the organization to:

1. Identify and evaluate the exposure to loss which relate to their particular sphere of operations.

2. Specify and establish policies, plans and operating standards, procedures, systems, and other disciplines to be used to minimize, mitigate, and/or limit the risks associated with the exposures identified.

3. Establish practical controlling processes that require and encourage officers and employees to carry out their duties and responsibilities in a manner that achieves the five control objectives outlined in Section 1 of the preceding paragraph.

4. Maintain the effectiveness of the controlling processes that have been established and foster continuous improvement to these processes

B. The internal auditing function is charged with the responsibility for ascertaining that the ongoing processes for controlling operations throughout the organization are adequately designed and are functioning in an effective manner, Internal Audit is also responsible for reporting to the Audit and Risk Management Committee and the President and Chief Executive Officer (“CEO”) on the adequacy and effectiveness of the organization’s systems of internal control, together with the ideas, counsel and recommendations to improve the systems.

C. The Audit and Risk Management Committee is responsible for monitoring, overseeing, and evaluating the duties and responsibilities of management the internal audit activity, and the external auditors as those duties and responsibilities relate to the organization’s processes for controlling its operations. The Audit and Risk Management Committee is also responsible for determining that all major issues reported by Internal Audit, the external auditor, and other outside advisors have been satisfactorily resolved.

Approved by the Board on the 26th day of March 2021.

Related Party Transactions

I. POLICY STATEMENT
In line with the governance principles of honesty, transparency and fairness, the Company undertakes to ensure that all Related Party Transactions (“RPT”) are done in “fair and at arm’slength” terms in order to manage and monitor any underlying potential conflict of interest that could compromise the best interests of a company and its shareholders as a whole. Accordingly, all RPTs shall be properly approved and disclosed in accordance with this Policy and Guidelines and must always inure to the benefit and best interest of the Company and its shareholders.

II. DEFINITION OF TERMS
For the purpose of this Policy and Guidelines, the following definition of terms shall apply:

A. Related Party – a person or entity that is related to the reporting entity. A person or a close member of that person’s family is related to a reporting entity if that person has control, joint control, or significant influence over the entity or is a member of its key management personnel. (In this Policy, the entity that is preparing its financial statements is referred to as the ‘reporting entity’ or ‘the Company’).

The Company’s Related Party includes Manila Electric Company (“MERALCO”) and its subsidiaries as well as affiliates and any party (including their subsidiaries, affiliates and special purpose entities), that the company exerts direct or indirect control over or that exerts direct or indirect control over the company; the Company’s directors; officers; shareholders and related interests (“DOSRI”), and their spouses and relatives within the fourth civil degree of consanguinity or affinity, legitimate or common-law, as well as corresponding persons in affiliated companies. This shall also include such other person or juridical entity whose interest may pose a potential conflict with the interest of the Company. Refer to Annex A on page 8 for instances of a related party.

B. Related Party Transaction (RPT) – a transfer of resources, services or goods between a reporting entity and a related party, regardless of whether a price is charged. It should be interpreted broadly to include not only transactions that are entered into with related parties, but also outstanding transactions that are entered into with an unrelated party that subsequently becomes a related party.

C. Close members of the family of a person – family members who may be expected to influence, or be influenced by, that person in his dealings with the entity.

D. Associate – an entity over which an investor has significant influence.

E. Control of an investee – an investor controls an investee when the investor is `exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.


F. Joint control – the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

G. Significant influence – the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

H. Parent – an entity that controls one or more entities.

I. Subsidiary – an entity that is controlled by another entity.

J. Affiliate – an entity linked directly or indirectly to the reporting PLC through any one or a combination of any of the following:

▪ Ownership, control or power to vote, whether by permanent or temporary proxy or voting trust, or other similar contracts, by a company of at least ten percent (10%) or more of the outstanding voting stock of the Company, or vice-versa;

▪ Interlocking directorship or officership, except in cases involving independent directors as defined under existing regulations;

▪ Common stockholders owning at least ten percent (10%) of the outstanding voting stock of the Company and the entity; or

▪ Management contract or any arrangement granting power to the Company to direct or cause the direction of management and policies of the entity, or vice versa.

K. Joint Venture – a contractual arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.

L. The term “fair and at arm’s-length” refers to transactions in an open and unrestricted market and between willing parties who are knowledgeable, informed, and who act independently of and without regard to any relationship with each other.

M. Key Management Personnel – persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

III. GENERAL PRINCIPLES
A. The Company shall at all times observe and adhere to the provisions of the Corporation Code of the Philippines, its Articles of Incorporation and By-laws, and all other relevant and laws, rules and regulations, as may be applicable, in the review, approval and disclosure of RPTs, always taking into consideration the rights of the Company’s shareholders, minority and majority alike.


B. All RPTs shall be reviewed and approved by an appropriate RPT Approving Authority to ensure that they are on terms and conditions that are at arm’s-length. This RPT review and approval shall encompass potential and existing RPTs entered or to be entered by any group or business responsibility unit of the Company, taking into account its size, structure, risk profile and complexity of operations.

C. Directors and key management personnelshall disclose their interest in transactions and any other conflicts of interest, including details of all their other directorships and any shareholdings owned by them. Directors are required to notify the Company’s Board of Directors (“Board”) before accepting a directorship in another publicly-listed company. Changes in their interest must be promptly disclosed to the Board through the Company’s Corporate Secretary.

D. Directors and key management personnel shall abstain and/or inhibit themselves from participating in discussions on a particular agenda when they are conflicted.

E. The Company shall ensure that RPTs carried out by its subsidiaries are conducted in accordance with this Policy.

F. Subject to the recommendation of the RPT Review Team, any unusual or infrequently occurring transaction constituting RPT may likewise be made subject to review and approval in accordance with this Policy and Guidelines.

IV. REVIEW AND APPROVAL OF RPTs
A. Each RPT Approving Authority shall ensure that RPTs are for the best interest of the Company. In evaluating RPTs, all the relevant facts and circumstances available shall be considered, including but not limited to the following:

1. The related party’s relationship to the Company and interest in the transaction;
2. The material facts of the proposed RPT, including the proposed aggregate value of such
transaction;
3. The purpose and timing of the proposed RPT;
4. The benefits to the Company of the proposed RPT;
5. The availability of other sources of comparable products or services; and
6. An assessment of whether the proposed RPT is on terms and conditions that are comparable to the terms generally available to an unrelated party under similar circumstances.

B. The Company should have an effective price discovery system in place and exercise due diligence in determining a fair price for RPTs. The price discovery mechanism may include, but is not limited to, acquiring the services of an external expert, opening the transaction to a bidding process, or publication of available property for sale.

C. The Board may appoint an independent party to evaluate the fairness of the terms of the material RPTs. The independent evaluation of the fairness of the transparent price ensures the protection of the rights of shareholders and other stakeholders.

D. The RPT shall be considered material/significant if determined by the RPT Review Team to be potentially or actually significant to the Company. The aggregate amount of RPT under consideration, within the preceding 12-month period, shall be among the aspects to be considered in determining the materiality of such:



E. Material/significant RPTs shall be evaluated by the RPT Review Team to ensure that these are not undertaken on more favorable economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such related parties than similar transactions with nonrelated parties under similar circumstances and that no corporate or business resources of the Company are misappropriated or misapplied, and to determine any potential reputational risk issues that may arise as a result of or in connection with the transactions.

F. After review, the RPT Review Team shall report the material/significant RPTs to the Finance Committee (Approving Committee) for its evaluation, approval and/or endorsement to the Board.

G. Significant RPTs shall require the approval of the Approving Committee while material RPTs shall require endorsement of the Approving Committee and approval by the Board.

H. De Minimis RPTs entered in the ordinary course of business shall neither require review by the Approving Committee nor approval by, and reporting to, the Board.

I. All individual RPTs within a twelve (12)-month period that amount to at least ten percent (10%) of the Company’s total assets shall be approved by at least two-thirds (2/3) vote of the Board, with at least a majority of the independent directors voting to approve the RPT. In case that a majority of the independent directors’ vote is not secured, the said RPT may be ratified by the vote of stockholders representing at least two-thirds of the outstanding capital stock. For aggregate RPTs within a twelve (12) month period that breaches the materiality threshold of ten percent (10%) of the company’s total assets, the same board approval would be required for the transaction/s that meets and exceeds the materiality threshold covering the same related party.

Directors with personal interest in the transaction should abstain from participating in discussions and voting on the same. In case they refuse to abstain, their attendance shall not be counted for purposes of assessing the quorum and their votes shall not be counted for purposes of determining approval.

J. Regardless of the amount of the transaction or contract, RPTs entered into by a director or corporate officer in his/her personal capacity must be approved by the Board. These RPTsshall be voidable at the option of the Company, except when all the following conditions are present:

1. The presence of the Director in the board meeting in which the contract or transaction was approved was not necessary to constitute a quorum for such meeting;

2. The vote of such Director was not necessary for the approval of the contract;

3. The transactions are fair, and on terms comparable to those that could be obtained at arm’s length dealings with an unrelated third party, or can be justified on a legitimate business case basis; and

4. In the case of a Corporate Officer, the contract has been previously authorized by the Board.

However, that when conditions J.1 and J.2 are absent in the case of a transaction or contract with a Director, such RPT may be ratified either by the vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock of the Company or by the vote of the stockholders representing majority of the outstanding capital stock of the Company excluding that of the affected Director, whichever is lower.

K. All recurring RPT contracts that have a term that exceeds one (1) year must be reviewed and approved on an annual basis to determine whether to continue/renew the same.

V. EXEMPT RPTs
The following are considered Exempt Related Party Transactions (“Exempt RPTs”) which shall not require RPT Committee review and approval, but may require regular reporting to the Board:

A. De minimis transactions which are unusual and non-recurring;

B. Compensation of directors and employment of executive officers approved by the Board;

C. Transfer of resources or transactions between the Company and its wholly-owned subsidiaries in connection with the funding of operations of the Company's business units and projects, or other transactions with the objective of providing shared services or for other services for operational efficiency of a common parent company;

D. Transactions between two (2) or more wholly owned subsidiaries or affiliates of the Company with the objective of providing shared services or for other services for operational efficiency of the Company;

E. Share transactions such as dividends, repurchase, rights offerings, available to all shareholders on a pro-rata ownership basis;

F. Any transaction with a Related Party involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority

G. Transactions with similar terms available to all employees generally.

VI. PROHIBITED RPTs
Notwithstanding any provision of this Policy to the contrary, the following RPTs shall not be allowed:

A. Loans and/or financial assistance to a Director;

B. Loans and/or financial assistance to the Executive Officers, except when allowed pursuant to an established company benefit or plan.

VII. DISCLOSURE AND REPORTING
A. A Related Party or the Company or any of its subsidiaries or affiliates, as the case may be, shall disclose material/significant RPT to the RPT Review Team prior to entering into the transaction except when the transaction is considered exempt under this Policy. RPTs involving directors, officers or employees shall likewise be disclosed in the Full Business Interest Disclosure or Conflict of Interest Forms and submitted to the Compliance Officer not later than January 31 of every year.

B. The Company’s CFO shall ensure that the financial officers or controllers of the group or business responsibility units and employees who are responsible for identification and monitoring of existing and potential RPTs are reporting the RPTs to the CFO.

C. The Material RPTs shall be disclosed in the Company’s financial statements, and other applicable filings in accordance with the relevant rules and issuances of the Securities and Exchange Commission (SEC) and other regulatory bodies.

VIII. SANCTIONS
A. Any officer or employee of the Company who has knowledge of any violation of this Policy shall report the same to the Office of the Compliance Officer.

B. The Compliance Officer shall report to the Approving Committee or to the Board all violations of this Policy and sanctions imposed in accordance with the Code of Ethics, Code of Conduct and other applicable policies of the Company.

C. The RPT Committee shall have the authority to recommend to the Board the invalidation of the transaction.

D. Pursuant to Section 26 and 27 of the Revised Corporation Code, an interested director or officer of a corporation shall be disqualified from being a director, trustee or officer of any other corporation on the basis of a successful claim of shareholders against the interested director or officer for abusive material RPTs. The disqualification shall be for a period of at least one (1) year or more, as may be determined by the Commission.

E. This Policy shall be without prejudice to the provisions of the Company’s Manual of Corporate Governance and all related and relevant policies of the Company which shall be observed and shall apply to the fullest extent possible.

IX. REVIEW AND AMENDMENTS
This Policy shall be regularly reviewed and updated to conform to the requirements of applicable law, rules and regulations.

X. EFFECTIVITY
This Related Party Transactions Policy and Guidelines will take effect fifteen (15) days from date of the approval of this Policy.

All existing policies, systems, practices, and related implementing guidelines concerning the same matters covered by this Policy are deemed revoked and superseded by this Policy insofar as inconsistent with the provisions hereof.

ANNEX A
IAS 24 DEFINITIONS AND EXAMPLES OF RPTs
A related party is:

a. A person or a close member of that person’s family is related to a reporting entity if that person:
i. has control or joint control over the reporting entity;
ii. has significant influence over the reporting entity; or
iii. is a member of the key management personnel of the reporting entity or
of a parent of the reporting entity.

b. An entity isrelated to a reporting entity if any of the following conditions applies:
i. The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
ii. One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
iii. Both entities are joint ventures of the same third party.
iv. One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
v. The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
vi. The entity is controlled or jointly controlled by a person defined in (a).
vii. A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

The following are considered as RPTs when performed with a Related Party:
a. Purchases or sales of goods.
b. Purchases or sales of property and other assets
c. Rendering or receiving of services
d. Lease
e. Transfers of research and development
f. Transfers under license agreements
g. Transfers under finance arrangements (including loans and equity contributions in cash or in kind)
h. Provisions of advances, donations, guarantees or collateral
i. Settlement of liabilities on behalf of the entity or by the entity on behalf of that related party

Close members of the family of a person include:
a. that person’s children and spouse or domestic partner;
b. children of that person’s spouse or domestic partner; and
c. dependents of that person or that person’s spouse or domestic partner.

Approved by the Board on the 26th day of March 2021.

 

MANAGEMENT CONTROL POLICY

I. INTRODUCTION
This Policy defines the roles and responsibilities of Management, Internal Audit, and the Audit and
Risk Management Committee related to controls over the organization’s processes. It also describes the responsibility for a system of checks and balances and emphasizes the importance of internal control processes. Internal control is an integral part of Company’s governance system and risk management.

II. STATEMENT OF POLICY
Management is charged with the responsibility for establishing a network of processes with the
objective of controlling the operations of the Company in a manner which provides the Board of
Directors reasonable assurance that:

A. Data and information published either internally or externally is accurate, reliable and timely;

B. The actions of directors, officers and employees are in compliance with the organization’s policies, standards, plans and procedures, and all relevant laws and regulations;

C. The organization’s resources (including its people, systems, data/information bases, and customer goodwill) are adequately protected against loss, fraud, misuse, and damage;

D. Resources are acquired economically and employed profitably; quality business processes and
continuous improvement are emphasized; and

E. The organization’s pans, programs, goals, and objectives are achieved.

III. INTERNAL CONTROL RESPONSIBILITIES OF THE COMPANY
A. Controlling is a function of management and is an integral part of the overall process of managing operations. As such, it is the responsibility of managers at all levels of the organization to:

1. Identify and evaluate the exposure to loss which relate to their particular sphere of
operations.

2. Specify and establish policies, plans and operating standards, procedures, systems, and other
disciplines to be used to minimize, mitigate, and/or limit the risks associated with the
exposures identified.

3. Establish practical controlling processes that require and encourage officers and employees
to carry out their duties and responsibilities in a manner that achieves the five control
objectives outlined in Section 1 of the preceding paragraph.

4. Maintain the effectiveness of the controlling processes that have been established and foster continuous improvement to these processes

B. The internal auditing function is charged with the responsibility for ascertaining that the ongoing processes for controlling operations throughout the organization are adequately designed and are functioning in an effective manner, Internal Audit is also responsible for reporting to the Audit and Risk Management Committee and the President and Chief Executive Officer (“CEO”) on the adequacy and effectiveness of the organization’s systems of internal control, together with the ideas, counsel and recommendations to improve the systems.

C. The Audit and Risk Management Committee is responsible for monitoring, overseeing, and
evaluating the duties and responsibilities of management the internal audit activity, and the
external auditors as those duties and responsibilities relate to the organization’s processes for
controlling its operations. The Audit and Risk Management Committee is also responsible for
determining that all major issues reported by Internal Audit, the external auditor, and other
outside advisors have been satisfactorily resolved.

Anti-Bribery and Corruption

I. POLICY STATEMENT
Gift-giving is part of the Filipino culture of doing business to enhance good business relationships. However, when done in bad faith or in violation of law, corporate gift-giving may expose the Company to serious reputational risk and regulatory penalties and its directors, officers, employees and consultants to resulting legal liabilities.

Accordingly, corporate gift-giving to public and private individuals or entities is prohibited when it constitutes bribery or corruption as defined herein.

Corollary, corporate gift-giving is allowed if made for legitimate purpose, is respectful of the gifts policy of the receiver and is in strict compliance with the procedures herein set forth.

II. COVERAGE
This Policy sets out clear limitations and guidelines in the gift-giving activities of the Company, its directors, officers, employees and consultants so as to prevent the commission of bribery and corruption.

It covers corporate gifts given government offices, officials and employees and private third parties and their respective directors, officers, employees or consultants. Personal gifts given by virtue of kinship or relationship are not covered by this policy.

For the purpose of this Policy, a gift may refer to may be a right or thing of value, like cash or cash equivalent, loan, fee, reward, commission, allowance, employment, travel and benefits.

III. GUIDELINES
A. Under this Policy, bribery and corruption is committed by offering or receiving an undue reward by, or to, any government office, officer or employee or to any director, officer or employee of a private entity with which the Company has potential or existing business transaction, designed to influence him/her in the exercise of his/her duty, or to induce him/her to act contrary to law or to accepted standards of fairness, integrity and honesty, or to secure any improper business advantage.

B. Acts defined under applicable laws1 as bribery or corruption are likewise covered by this Policy.


C. The offering or giving of gifts, including cash or cash equivalents, is permitted under the Company’s Corporate Social Responsibility (CSR) programs, provided that the same undertaken by or under the control of One Meralco Foundation (OMF) and subject to the applicable policies and work procedures manual.

D. The offering or giving of gifts, not otherwise intended for the Company’s Corporate Social Responsibility programs, is permitted in certain instances, subject to the following conditions:

1. The gift must not exceed the nominal value and must not be in cash or cash equivalents, unless otherwise previously authorized by the President or his authorized representative.

2. Only unsolicited gifts or tokens of nominal or insignificant value offered or given as a mere ordinary token of gratitude or friendship according to local customs or usage in accordance with Section 14 or Republic Act No. 3019 and Section 3(d) and 7(d) of Republic Act No. 6713 may be offered or given to government offices, officials or employees, subject to the government-prescribed limits on the amount of such gifts or tokens of nominal or insignificant value.

3. The offering or giving of gifts must respect the policies on gifts of the receiver.

E. Other forms of gifts not intended for Corporate Social Responsibility (CSR) Programs or as corporate giveaways must be supported by prior approval by the organizational head or the next superior level who shall ensure compliance with this Policy.

F. Corporate giveaways intended for revenue-generation, marketing or promotional events, and other events sponsored by the Company, as well as those intended for special occasions such as Christmas gifts to be given by the Company, its directors, officers, employees and consultants must conform to this policy and other applicable Company policies and procedures and as far as practicable, must bear the name and/or logo of the Company.

IV. RESPONSIBILITIES
A. The Nomination, Governance, and Compensation Committee shall review and endorse for approval of the Board, the implementation of this Policy.

B. The Organizational Heads and Next Level Superiors (Approving Authority) shall monitor, ensure compliance to, and enforcement of this policy within their area of jurisdiction.

C. All Directors, Officers, and Employees of the Company shall abide by the provisions of this policy and must report any observed violations of the same to their respective superior.

D. Internal Audit shall audit the compliance of directors, officers and employees of the company to this Policy and recommend appropriate measures to further improve the Policy.

E. The Compliance Office or any such office performing governance functions shall monitor the implementation and compliance of organizations and recommends appropriate improvements to this policy

V. CONSEQUENCES OF VIOLATIONS
Any director, officer or employee who fails to comply with this Policy shall be subject to applicable penalties and sanctions under the Company’s Code of Employee Discipline.

Any consultant who fails to comply with this Policy shall be subject to applicable penalties and sanctions as may be stated in his/her corresponding contract.

VI. EFFECTIVITY:
This Anti-Bribery and Corruption Policy shall take effect upon approval of the Board.

VIII. AMENDMENT OR ALTERATION OF THIS POLICY
This Policy shall not be amended, altered, or varied unless such amendment, alteration, or variation shall have been approved by resolutions of the Board of Directors

Approved by the Board on the 26th day of March 2021.

Conflict of Interest

I. POLICY STATEMENT
The Company strongly adheres to the observance of honesty, justice, and good faith in its obligations, dealings, or relationships with its various stakeholders. In the pursuit of this timehonored commitment, the Directors, Officers, or Employees of the Company are always required to observe the highest degree of fairness, accountability, integrity, transparency and honesty in the performance of their duties and responsibilities to the Company, free from any form of conflict or contradiction with their own personal interest.

As such, transactions which are or may have the potential of being deemed as Conflict of Interest situations are discouraged and must be avoided. All business decisions of the Directors, Officers, and Employees of the Company must be based on the best interest of the Company and must not be motivated by personal considerations and other relationships that can interfere with their independent judgment.

II. DEFINITION OF TERMS
A. Affiliated Party refers to any person, natural or juridical, other than the Company, with which a director, employee, or officer of the Company has a financial, professional or personal relationship or interest. This includes, among others:

1. Relatives as defined in this Policy;

2. Corporations or firms other than the Company where a Director, Officer, Employee and/or his relative holds a position as director, officer, executive, employee or consultant;

3. Corporations, other than the Company, owned by the Directors, Officers, or Employees of the Company, or their relatives, which hold, either singly or collectively, more than ten percent (10%) of the subscribed capital or equity of such corporations;

4. Partnerships in which a Director, Officer, Employee or an Affiliated Party is a partner;

5. Co-ownership wherein a Director, Officer, Employee, or his affiliated Party is a part owner of the property sold, assigned or leased to the Company; and

6. Relationship by reason of wedding, baptismal or sponsorship (i.e. the godparents; goddaughter; godson; or “kumpare/kumare”) of the Employee or of his spouse or children.

Business dealings or transactions of an Officer or Employee in behalf of the Affiliates or Subsidiaries of the Company are excluded from the definition of Affiliated Party.

B. Board refers to the Board of Directors of the Company.

C. Clearance or Approving Authority refers to the individual or office who/which exercises the duties and responsibilities enumerated under Section (VI) Compliance and Enforcement. This includes the Group Head, Organization/BRU Head of the employee, President or CEO or his representative, and the Nomination, Governance, and Compensation Committee (the “Committee”), as the case may be.

D. Company refers to the Radius Telecoms, Inc.

E. Confidential or Proprietary Information shall include, but shall not be limited to, any and all trade secrets and any other information, methods, processes, formulae, systems, business, technical, marketing, computer and administrative records, including customer lists, plans, software and other data developed, created, acquired or maintained by the Company.

F. Conflict of Interest Situation refers to a situation where financial or business interest, professional, or other personal considerations or interests may influence, jeopardize or compromise, or have the appearance, tendency or propensity of influencing, jeopardizing or compromising, the ability of directors, officers or employees to effectively and impartially or objectively exercise independent judgment in the performance of their duties, responsibilities or professional activities in the Company.

G. Consultancy refers to the act of providing professional or expert advice, for a consideration, in a particular field like management, energy services and technology.

H. Director refers to a member of the Board of Directors of the Company.

I. Employees refer to all persons under the employ and in the active payroll of the Company

J. Gifts may be a right, privilege, or a thing of value, like cash or cash equivalent, loan, fee, reward, commission, allowance, employment, travel and any other form of benefit."

K. Committee refers to the Nomination, Governance, and Compensation Committee of the Company.

L. Officer refers to an officer of the Company as defined in its By-laws.

M. Relatives refer to persons related up to the third degree, by consanguinity, affinity or legal adoption, including the spouse, parents, children (and their spouses) siblings, (and their spouses), nieces and nephews (limited to children of brothers or sisters) [and their spouses], grandparents, and aunts and uncles (limited to sisters or brothers of parents); and the common-law spouse and/or his relatives of up to the third degree, by consanguinity, affinity or legal adoption. For purposes hereof, Relatives shall include first cousins.

N. Third Party refers to any person, natural or juridical, that has existing and/or expected business dealings with the Company, including, but not limited to, prospective or existing suppliers, contractors, buyers, customers, government agencies, or all other business partners who are or may be similarly situated.

III. COVERAGE
This Policy covers all possible conflicts of interest between the financial, professional or personal interests or activities of i) Directors, Officers, or Employees; or ii) Affiliated Party, and the business interest of the Company.

IV. CONFLICT OF INTEREST SITUATIONS
The following are situations or events which may give rise to or result in a Conflict of Interest Situation. Other situations not described herein shall be evaluated on a case to case basis by the Clearance Authority within the context of this Policy.

A. Corporate Opportunity and Outside Investment
1. Having a part in recommending, decision-making or approving; or in influencing decisions in the granting of awards; or in selling or leasing Company property; or in establishing prices, customer deposits, and discounts; or in disseminating information about the availability of service and Company property, with respect to, or in favor any of his Affiliated Parties.
 

2. Soliciting personal business from customers or suppliers/vendors of the Company.

3. Using the Company’s resources for personal or non-Company activities or for purposes outside of the Company's corporate mission/vision.

4. Using the Company’s non-public, confidential or proprietary information for his or another person’s gain or advantage, including the purchase or sale of securities of the Company and/or in a business the Company is interested in acquiring, selling, establishing or terminating business relations with.

5. Using the Company’s name, trademark and other intellectual properties or data, facilities and resources in connection with, among others, the following instances:

a. Sponsoring, recommending or promoting any commercial service or product, unless such is at the request of the Company or is part of the Director, Officer, or Employee's Company duties or responsibilities;

b. Granting Third Parties access to Company facilities or services for purposes outside of the Company's mission, or offering favors to said Third Parties to gain favors for one’s self or for any of his Affiliated Party;

c. Granting unauthorized access of confidential or proprietary information to others; and

d. Providing preferential access to the Company's resources and facilities, or giving preferential treatment or advantage, to Third Parties for personal gain or in exchange for a Gift in favor of any of a Director’s, Officer’s or Employee’s Affiliated Party.

B. Relationships
Additional instances or events that may give rise to a Conflict of Interest Situation under this Section are as follows:

1. When Directors, Officers or Employees take part in decisions to transact business with an Affiliated Party. These include, but shall not be limited to:

a. The execution of any contract between the Affiliated Party and the Company for the procurement of supplies or services, and lease or sale of property.

b. The valuation, recommendation and/or approval of business, project proposals, or transactions of the Company with an Affiliated Party.

2. Exerting pressure/influence with respect to the hiring by the Company of an Affiliated Party.

3. Personal relationships at work, when such can influence or compromise a Director’s, Officer’s, or Employee’s decisions or actions involving his subordinate, or which could affect hiring, job responsibilities, work duties, promotions, performance evaluations, and/or compensation.

C. Gifts
Soliciting or accepting gifts, in any form, from a Third Party with existing or intended business dealings with the Company, in consideration of any act or omission affecting, or transaction involving the Company.

D. Outside Employment and Other Services
A Director, Officer, or Employee shall avoid accepting a position or employment, or carrying out work outside of the Company and/or its subsidiaries where a Conflict of Interest or loyalty may arise and which may significantly affect the Director's, Officer's, or Employee's efficiency in the performance of duties and obligations or otherwise adversely affects one’s work.

E. Personal Loans
The Company shall not, directly or indirectly, including through any Subsidiary or Affiliate, grant or arrange for any credit (or extensions thereof) in the form of personal loans to any Director or officer, unless allowed by applicable laws and regulations.

V. DISCLOSURE AND APPROVAL
Directors, Officers and Employees of the Company are expected to conduct themselves at all times with the highest ethical standards. They must seek guidance from the Clearance Authority before embarking on activities where potential Conflict of Interest Situations may be present. Actual or potential Conflict of Interest Situations must be avoided and should be disclosed immediately.

A copy of the duly signed and approved Potential Conflict of Interest Disclosure Form (Annex “A”) shall be forwarded to the Office of the Compliance Officer for monitoring and safekeeping within fifteen (15) days from approval.

A Registry shall be created containing the Full Business Interest Disclosure Forms of all Directors and Officers, and Conflict of Interest Disclosure Forms of all Employees. These Forms shall be annually updated not later than January 31st to reflect all existing COI situations of the affected Director, Officer or Employee.

VI. DUTY TO DISCLOSE AND SEEK CLEARANCE OF ACTUAL OR POTENTIAL CONFLICT OF INTEREST SITUATIONS
1. As soon as a Director, Officer, or Employee becomes aware of an actual or potential conflict of interest situation where he is involved in, he must disclose this in writing to the appropriate Clearance Authority to seek clearance or advice.

He shall likewise inhibit from being involved at any stage of the transaction and cannot sign any document related to the transaction.

2. All Directors, Officers and Employees shall annually sign and submit a Conflict of Interest Disclosure Statement not later than January 31 of each year.

3. It shall be the responsibility of every Director, Officer, and Employee to take immediate and appropriate action when they become aware of any violations or potential violations of other Directors, Officers or Employees, and to disclose the same to the Clearance Authority for appropriate action.

VII. DISCLOSURE/APPROVAL GUIDE
Conflict of Interest Situations shall be approved or cleared by the Clearance Authority in the levels provided below:



VIII. EFFECTIVITY
This policy shall take effect immediately. All existing Administrative Orders and System Practices, and related implementing guidelines concerning the same matters covered by this policy are deemed superseded. In the event of any inconsistency between the policy and guidelines contained herein and the terms of other existing policies, system practices and related implementing guidelines, the policy and guidelines contained herein shall prevail.

IX. AMENDMENT OR ALTERATION OF THIS POLICY
This Policy shall not be amended, altered, or varied unless such amendment, alteration, or variation shall have been approved by resolutions of the Board of Directors.

Approved by the Board on the 26th day of March 2021.

Gifts Policy

I. POLICY STATEMENT
Gift-giving is part of the Filipino culture of doing business to enhance good business relationships. However, Directors, Officers, and Employees as well as Consultants must be aware that the ThirdParty Business Partners of Radius Telecoms, Inc. (the “Company”) may use this custom of gift-giving as means to gain favors or influence their objectivity. Thus, there is a need to properly regulate the receiving of gifts without prejudice to maintaining efficient, friendly, and cordial relations with Third-Party Business Partners.

As such, Directors, Officers, Employees, and Consultants must refrain from putting themselves in situations or acting in a manner that could significantly affect the fair, objective, independent, and/or effective performance of their duties and responsibilities in the Company while transacting with third parties. Accordingly, Directors, Officers, Employees, and Consultants must not solicit and/or accept gifts from Third-Party Business Partners.

In cases when solicitation and acceptance of gifts cannot be avoided, handling of such cases should conform to the rules and procedures prescribed in this Policy which is also in accordance with the corporate governance principles of fairness, accountability, integrity, and transparency.

II. DEFINITIONS
A. Bribe – includes any money, fee, commission, credit, gift, gratuity, thing of value, compensation, personal business and the like, benefits or advantage of any kind that is, directly or indirectly, provided to or received by anyone in his personal capacity for the purpose of obtaining favorable treatment in connection with a business transaction.

B. Consultants – includes professional consultants, advisors, firms, partnerships, counsels, or such other professional entities or individuals rendering professional or specialized expert services to Radius as well as advisors of the Company who may be appointed by the Board of Directors or management.

C. Customers – individuals or entities with existing contracts with and avail, or intending to avail of services, from Radius.

D. Employees – all persons other than Officers, under the employ and in active payroll of Radius, including probationary employees and on-the-job trainees.

E. Gifts – may be a right or thing of value, like cash or cash equivalent, loan, fee, reward, commission, allowance, employment, travel and benefits.

Following are examples of gifts referred to on this document:
1. Entertainment – any form of hospitality such as meals for Directors, Officers, Employees, or Consultants given by Third-Party Business Partners. It also covers spectator and participative activities (i.e., parties, shows, concert, golf, fishing, and other similar activities).

2. Expensive Gifts – gifts with equivalent money value or market price above the nominal value.

3. Perishable Gift – items such as food, flowers, or other similar items subject to decay, spoilage, and expiration within a month.

4. Non-perishable Gift – includes non-food or non-beverage item, as well as any food or beverage that does not fall under the scope of perishable gifts, such as, but not limited to, gift baskets with bottled/preserved food, packed biscuits/cookies, canned goods or liquor.

5. Personal Gift – gifts solicited or received from friends, relatives, co-employees, and entities with no existing or expected transactions with the receiver and are not considered Third-Party Business Partners of the Company.

6. Sponsored Travel – any travel, accommodation and/or attendance/ participation in conferences, conventions, seminar, trainings, international or domestic, whether for personal or business purposes, the costs of which are fully or partially paid for by Third Party Business Partners.

7. Token Gifts – gifts of nominal value (regardless of whether it is perishable or non-perishable).

F. Giver – a person or entity giving the gift.

G. Nominal Value – equivalent money value or market price of a gift when purchased. It is the price limit set by management for a gift to be considered acceptable. Gifts with nominal value shall be referred in this Policy as Nominal Gifts.

H. Officers – employees with the rank of Vice President and up who are recognized by the Board of Directors of Radius.

I. Approving Authority – immediate Organizational Head or Next Level Superior of the receiver, i.e., Chairman of the Board in case of Directors; President and CEO in case of Officers; Organizational Head or Next Level Superior in case in case of Employees and Consultants.

J. Receiver – a Radius director, officer, employee or consultant who receives the gift.

K. Relatives – relatives of up to fourth degree, by consanguinity, affinity, or legal adoption, including, the receiver’s spouse, parents, children (and their spouses), siblings (and their spouses), nieces and nephews (limited to children of a brother or sister) [and their spouses], grandparents, and aunts and uncles (limited to brothers or sisters of a parent); and a domestic partner and his relatives of up to the third degree, by consanguinity or affinity or legal adoption.

L. Third-Party Business Partners – individuals, entities, organizations and/or their representatives, including MERALCO and its subsidiaries or affiliates, that have existing and/or intended business dealings with Radius. This shall include but not limited to prospective or existing suppliers, contractors, buyers, government agencies, content providers, media, agencies, dealers, customers, or all other business partners who are or may be similarly situated.

III. COVERAGE
This Policy applies to and shall be implemented by, all members of the Board of Directors (each a “Director” and collectively, the “Directors”), Officers (each, an “Officer” and collectively, the “Officers”), Employees (each, an “Employee” and collectively, the “Employees”), and Consultants (each, an “Consultant” and collectively, the “Consultants”) of Radius Telecoms, Inc. (the “Company” (“Radius” or the “Company”).

This Policy covers solicitation or acceptance of gifts from Third-Party Business Partners. Covered gifts include, but are not limited to, the following:
1. Cash, check, gift certificates, other cash equivalents or items that can be easily converted to cash of any amount, regardless of the occasion or situation.

2. Receipt of Gifts as part of any purchases made by the Company.

3. Gifts solicited or received from Third Party.

Personal gifts are not covered by this Policy.

VI. GUIDELINES
Solicitation of gifts from Third-Party Business Partners shall be avoided while acceptance of thereof shall be made in behalf of and surrendered to the Company, subject to the following guidelines:

A. PROHIBITED GIFTS
Solicitation and/or acceptance of cash, check, gift certificates, other cash equivalents or items that can be easily converted to cash of any amount, free membership or subscription (e.g. sport or other clubs), and any Gifts, except as otherwise provided for in the succeeding paragraphs, from Third-Party Business Partners regardless of the occasion or situation even if given on occasions of rejoicing or celebration such as Company parties, birthdays, anniversaries, or Christmas, is prohibited.

B. GIFTS FOR PERSONAL USE
1. Solicitation and/or acceptance of gifts from Third-Party Business Partners shall be avoided unless it falls under the exception cases below:

a. Gifts received from unknown giver.

b. Gifts offered out of courtesy and when giver is insistent.

c. Token gifts, i.e., nominal gifts, given during seminars, conventions, or on occasions of rejoicing or celebrations like Christmas or birthdays. Also included are nominal gifts or tokens of appreciation given to a Director, Officer, Employee, or Consultant for participating as speaker, facilitator, or reactor in conferences or seminars sponsored or organized by Third-Party Business Partners; provided, however, that the other speakers, facilitators and/or reactors are also given similar gifts or tokens of appreciation by said Third-Party Business Partners.

d. Courtesy discounts given to Directors, Officers, Employees, or Consultants by ThirdParty Business Partners due to personal purchases of products and services from Third-Party Business Partners; provided, that such discounted purchases are made openly, and the same terms are made available to all other buyers or customers.

e. Raffle tickets (or prizes won from such raffle tickets) and other promotional items, regardless of the value, given to the Directors, Officers, Employees, or Consultants for their attendance to certain events (including but l not be limited to athletic or social events, or Christmas parties and the like), conferences, seminars, or product presentations of Third-Party Business Partners; provided, however, that the other participants are likewise entitled to such raffle tickets and given equal opportunity to win prizes.

2. Due regard to the frequency of gifts received, the accumulated value which should not exceed the nominal value, and benefit for the Company shall be considered at all times.

3. Directors, Officers, Employees and Consultants shall not be eligible to receive gifts as part of any purchase made by the Company.

4. The direct or indirect offer, payment, solicitation and/or acceptance of bribes in any form by a Director, Officer, Employee or Consultant from a Third-Party Business Partner or any other person or entity and vice-versa, is prohibited.

C. GIFTS FOR COMPANY USE
1. It is acceptable for the Company to solicit or accept gifts or donations for Corporate Social Responsibility (CSR) programs or initiatives, including outreach or charitable works of the Company’s officially recognized employee organizations, such as medicines for medical missions, food and supplies for calamities, and materials for community development, provided that the solicitation or acceptance shall be through the Corporate Social Responsibility Office/ One Meralco Foundation.

2. However, if the Company will only accept or solicit donations from selected Third-Party Business Partners, the conditions for such selection shall be disclosed to all including other relevant Third-Party Business Partners.

3. Solicitations for company use other than CSR programs must be justified and approved by the President or his authorized representative.

D. ENTERTAINMENT
1. Directors, Officers, Employees, and Consultants shall refrain from requesting for or soliciting any form of entertainment from a Third-Party Business Partner, including sponsorship for Company activities, non-Company supported charitable works, and/or personal events such as birthdays, weddings, baptisms, and the like or from accepting such entertainment where such acceptance could impair their objectivity in the performance of their duties and obligations to the Company.

2. Meals during business meetings are acceptable. However, business meetings in locations that do not conform to accepted standards of propriety and are not conducive for business purposes shall be avoided.

3. Acceptance of invitations to theater, concerts or social or sporting events are permissible; provided, however, that such invitations are generally available to others in the same community, category or industry. Further, due regard to the frequency of attendance and benefit for the Company shall be considered at all times.

4. Directors, Officers, Employees and Consultants shall not use property belonging to ThirdParty Business Partner, their employees, agents and/or representatives such as, but not limited to, vehicles, beach houses, resorts, and vacation houses whether for their personal benefit or as Company representative(s) for entertainment purposes.

5. Directors, Officers, Employees and Consultants shall use their best judgment in determining the propriety and frequency of accepting various forms of Entertainment offered by Third-Party Business Partner.

E. SPONSORED TRAVEL
1. It is the Company that sponsors its Director, Officer, Employee, or Consultant’s attendance in conferences, conventions, and exhibits, which may include travel, accommodation and/or registration expenses.

2. Directors, Officers, Employees and Consultants are obliged to refuse offers of free travel and/or accommodation to conferences, conventions, exhibits, product presentations or other similar events from Third-Party Business Partners. Attendance at such conferences, conventions, exhibits, product presentations or other similar events shall be allowed only if:

a. It will benefit the Company;

b. It is approved by the appropriate approving authority and

c. The Company pays for all expenses associated with such travel.

3. However, in exceptional and justified cases as may be determined in writing by the Approving Authority, Directors, Officers, Employees or Consultants may be allowed to accept Sponsored Travel to conferences, conventions, and such events from Third-Party Business Partners.

4. The following exceptions are allowed:
a. Travels sponsored by industry/professional organizations not associated with any Third-Party Business Partners are acceptable.

b. Complimentary travel and accommodation for trainings from Third-Party Business Partners if these are part of an approved/existing contract and are deemed to benefit the Company.

c. Sponsored Travel to Directors, Officers, Employees, or Consultants to local and/or international business/industrial site intended to demonstrate actual performance of their products/systems. Acceptance of such sponsored invitation should be justified by the following:

i. The purpose of the travel should be business in nature and has a direct benefit to the future performance and business of the Company.

ii. Knowledge of Directors, Officers, Employees, or Consultants assigned/chosen for the travel would be valuable to the evaluation of the system and directly related to their job function.

d. Other exceptional and justified cases as may be approved by the Approving Authority, allowing Directors, Officers, Employees, or Consultants to accept Sponsored travel to conferences, conventions, and such events from Third-Party Business Partners. The Compliance Office or any such office performing governance function for the Company should be provided with a copy of the approved documents for reference purposes.

VII. RESPONSIBILITIES
A. Nomination, Governance, and Compensation Committee reviews and approves the implementation of this Policy.

B. The Approving Authority is tasked to monitor, ensure, and enforce compliance to this Policy within their area of jurisdiction. They are also responsible for classifying or categorizing, and recording the gifts received.

C. All Directors, Officers, Employees, and Consultants of the Company are responsible to have full knowledge of and must agree to abide by the provisions of this Policy. They must also report any observed violations of this Policy to their respective superior

D. Corporate Social Responsibility Office (CSRO)/ One MERALCO Foundation (OMF) - shall take custody of all gifts turned-over by the organizations/offices. They shall also handle the receipt and disposition of these gifts in accordance with their charter or the rules approved by Management.

E. Internal Audit shall perform a random or surprise audit on compliance of offices, directors, officers, employees, and consultants of the Company to this Policy and recommend appropriate measures to further improve the Policy.

F. Compliance Office or any such organization performing governance function for the Company monitors the implementation and compliance of organizations and recommends appropriate improvements to this Policy.

VIII. IMPLEMENTING RULES AND REGULATIONS
A. Classification and Categorization of Gifts
1. It is the duty of a Director, Officer, Employee, or Consultant who is offered or receives a Gift to immediately disclose the offer or receipt thereof to the Approving Authority for appropriate direction/instruction and proper handling. (Refer to Disclosure Guide)

2. The nominal amount will be defined and approved by the President and CEO subject to the conditions stated in this Policy and will be reviewed whenever appropriate.

3. The Approving Authority will classify or categorize the gifts received by their office as follows:

i. Gift Classification (Token, Perishable, Non-Perishable, Entertainment, Sponsored Travel)

ii. Gift Value – assess the gift value based on prevailing market price and determine if it is nominal or expensive.

B. Gift Registry
A. Gifts received must be disclosed in a Gift Registry Facility to be submitted to and approved by the Approving Authority. The table below shows the required timing of disclosure within the year.

B. Gifts disclosed to the Organization Head must be recorded in the Gift Registry of the Office immediately upon disclosure. The Gift Registry must be made available for audit at any time. (Please refer to Appendix A for the Gift Registry Form)



C. Disclosure Guide



D. Gift Disposition
1. The following rules shall be applied in disposing the received gifts:




2. Gifts turned over to the Corporate Social Responsibility Office/ One Meralco will be disposed of in accordance with the Work Procedures Manual on the Disposition of Donations Received for Corporate Social Responsibility (CSR) Programs and similar policies.

IX. CONSEQUENCES OF VIOLATIONS
A. Any Director, Officer, or Employee who fails to comply with this Policy, shall, upon due process, be subjected to applicable penalties and sanctions as stated in the Company’s code of conduct.

B. Any Consultant who fails to comply with this Policy, shall, upon due process, be subjected to applicable penalties and sanctions as stated in the contract which may include the termination thereof.

X. IMPLEMENTING GUIDELINES
Appropriate implementation guidelines and monitoring and measuring systems shall be developed by the Human Resources (HR) Group. The President and CEO may reassess the ceiling price of the Token Gifts and baseline price of the Expensive Gifts annually but must ensure that the ceiling be not more than that being observed in MERALCO. If exigencies so warrant, a written directive from the President and CEO shall be issued to adjust these prices; Provided, that such adjustment of prices shall not be made more than once a year.

XI. EFFECTIVITY
This Policy shall take effect immediately.

XII. AMENDMENT OR ALTERATION OF THIS POLICY
This Policy shall not be amended, altered or varied unless such amendment, alteration or variation shall have been approved by resolutions of the Board of Directors.

Approved by the Board on the 26th day of March 2021.

Code of Business Conduct and Ethics

I. POLICY STATEMENT
Pursuant to the commitment of the Company to promote a culture of good corporate governance
and to uphold the fundamental corporate governance principles of fairness, accountability,
integrity, transparency, and honesty in the conduct of its business, the Company enjoins all its
Directors, Officers, and Employees to adhere to the Company’s Code of Business Conduct and
Ethics in their decisions, transactions and interactions when performing their respective duties
and responsibilities to the Company and in their relationships among themselves, or with the
Company’s customers, suppliers, business partners, competitors, government, regulators,
creditors, stockholders and the general public.

Consistent with this, the Company necessarily expects its Suppliers to commit to high standards
of business ethicsin their transactions with the Company. Aptly, the Company shall only engage
the services of Suppliers who shall adhere to the governance policies and ethical principles
espoused by the Company including those embodied in this Suppliers’ Code of Business Conduct
and Ethics (“Code”).

II. PURPOSE AND SCOPE
This Code shall serve as a general guide to acceptable and appropriate conduct and behavior
expected from Suppliers of the Company.

The term Suppliers is used in its generic sense and shall include suppliers and vendors providing
services and goods to the Company, consultants, advisors, financial institutions, and any person
or institution who has potential or existing business transactions with the Company.

III. DEFINITION OF TERMS
For the purpose of this Policy, the following definition of terms shall be used:

A. Affiliated Party refers to any person, natural or juridical, other than the Company, with
which a director, employee, or officer of the Company has a financial, professional or
personal relationship or interest. This includes, among others:

1. Relatives as defined in this Policy;
2. Corporations or firms other than the Company where a Director, Officer, Employee and/or his relative holds a position as director, officer, executive, employee or consultant;
3. Corporations, other than the Company, owned by the Directors, Officers, or Employees of the Company, or their relatives, which hold, either singly or collectively, more than ten percent (10%) of the subscribed capital or equity of such corporations.
4. Partnerships in which a Director, Officer, Employee or an Affiliated Party is a partner;
5. Co-ownership wherein a Director, Officer, Employee, or his affiliated Party is a part owner of
the property sold, assigned or leased to the Company; and
6. Relationship by reason of wedding, baptismal or sponsorship (i.e. the godparents; goddaughter; godson; or “kumpare/kumare”) of the Employee or of his spouse or children.

B. Company premises means all landholdings, buildings and all other properties owned by or rented by the Company. It also covers the working area occupied by employees assigned on the field including Company vehicles.

C. Confidential Information refers to all non-public information that might be useful to competitors or harmful to the Company or its customers if disclosed. This includes but is not limited to business plans, products, technical data, specifications, documentation, rules and procedures, contracts, presentations, know-how, product plans, business methods, product functionality, services, data (including customer and employee data), markets, competitive analysis, databases, formats, methodologies, applications, developments, inventions, processes, payment, delivery and inspection procedures, designs, drawings, algorithms, formulas, or information related to engineering, marketing, or finance and any other information that may be reasonably construed as confidential to the Company.

D. Conflict of Interest Situation refers to a situation where financial or business interest,
professional, or other personal considerations or interests may influence, jeopardize or
compromise, or have the appearance, tendency or propensity of influencing, jeopardizing or
compromising, the ability of directors, officers or employees to effectively and impartially or
objectively exercise independent judgment in the performance of their duties, responsibilities
or professional activities in the Company.

E. Gifts may be a right or thing of value, like cash or cash equivalent, loan, fee, reward,
commission, allowance, employment, travel, accommodation, sponsorship to conferences,
seminars or trainings, among others.

F. Material Information means information that a reasonable investor would consider important
in making an investment decision.

G. Supplier refers to an entity or individual who provides the needed goods or services to the
Company, which may be a consultant, vendor, contractor or financial institution. This includes
existing and prospective suppliers.

H. Weapon is a firearm, ammunition, explosive, or any other device or object that can be used to cause physical injuries or death to persons and/or damage to property.

IV. PRINCIPLES AND STANDARDS
A. ENVIRONMENT, SAFETY AND HEALTH

1. Safety at the Workplace
The Company strives to provide each employee, officer and other stakeholders with a safe and healthy environment. As such, the Suppliers are expected to perform their companyrelated work in a safe manner, free from the influence of alcohol, illegal drug controlled substance and to help and encourage others to work safely, and always put safety first.

Towards this end, all Suppliers shall at all times ensure:

Compliance with all applicable environmental and workplace safety and health rules and regulations, by:

a. Immediately reporting to the Company business contact all accidents, occupational injuries and illnesses, and any unsafe equipment, practices or conditions that it cannot conditionally correct.

b. Being mentally and physically fit to perform the services expected of them.

c. Non-toleration of any kind of violence including threatening behavior and prohibiting the bringing in, possessing, storing or using of any type of weapon or prohibited drugs or controlled substances within the Company premises or Company assigned work areas.

2. Safety of the Environment
Suppliers are committed to conduct its business in an environmentally responsible manner and comply fully with all the applicable environmental laws and regulations.

3. Emergency Prevention, Preparedness, and Response
Whenever applicable, Suppliers shall anticipate, identify, and assess emergency situations and events and minimize their impact by implementing emergency plans and response procedures, including emergency reporting, worker notification and evacuation procedures, worker training and drills, appropriate first-aid supplies, appropriate fire detection and suppression equipment, adequate exit facilities, and recovery plans. Suppliers that support the Company’s real-time operation and financial functions shall have its Business Continuity plans in advance and regularly tested to sustain the supply and/or delivery of its services despite the occurrence of an emergency, crisis situation, natural disaster or security related event. Suppliers may be asked to provide the Company with copies of their plans, exercise and training records

B. BUSINESS ETHICS
1. Anti-bribery Corruption
Corruption, extortion and embezzlement, in any form or manner, are strictly prohibited. Suppliers shall comply at all times with all applicable anti-bribery and anti-corruption laws. Suppliers shall not offer, accept, promise, pay, permit or authorize bribes and kickbacks, which include giving gifts to the Company’s Directors, Officers, Employees, or Consultants or other means to obtain an undue or improper advantage.

Suppliers shall ensure that their business records including all requests for payments, fully and accurately reflect transactions, expenditures and/or services performed.

2. Giving Gifts
Suppliers are prohibited from giving gifts to Directors, Officers, Employees, or Consultants of the Company

Tokens like corporate giveaways as customary business courtesies may be allowed on exception cases but should be governed by the Company’s Policy on Solicitation and Acceptance of Gifts (Gifts Policy). Gifts of cash or cash equivalents, such as gift cards, are prohibited.

Immediate disclosure to Company’s Compliance Officer is required in case the Supplier
insists on providing gifts of any value to the Company’s Directors, Officers, Employees, or
Consultants.

Suppliers shall seek clearance from their business contacts in the Company or the
Company’s Compliance Officer, prior to undertaking actions that are covered by or have
implications on the provisions of Gift Policy in order to avoid violations.

3. Conflict of Interest
It has always been and continues to be the intent of the Company that its Suppliers maintain the highest ethical standards in the conduct of its business. The Company expects its Suppliers to conduct its business with the highest degree of integrity, fairness and transparency, in accordance with all applicable rules and regulations and in a manner that excludes consideration of personal advantage. Suppliers are required to declare any material/personal interest which may affect or be seen to affect the work they are contracted to perform. Strict adherence to this Policy will protect the Company and Suppliers from criticism, litigation or embarrassment that might result from alleged or real conflicts of interest or unethical practices.

4. Disclosure of Information
Suppliers shall accurately record and disclose information regarding their business activities, structure, financial situation and performance in accordance with applicable laws and regulations and prevailing industry practices.

5. Whistleblower Protection and Anonymous Complaints
Suppliers shall create appropriate program/s that will protect and ensure the confidentiality of whistleblowers and prevent retaliation against those who participate in such programs. Suppliers shall provide an anonymous complaint mechanism to report workplace grievances in accordance with local laws and regulations.

6. Customer Relations
The Company values the satisfaction and loyalty of its customers. Suppliers charged with serving these customers shall ensure that services rendered are delivered timely, adequately and with the highest degree of quality. Proper decorum and good customer relations are to be observed at all times.

7. Labor and Human Rights
Suppliers shall provide equal opportunity in all aspects of employment and shall not tolerate any illegal discrimination or harassment based on color, race, religion, nationality, origin, age, gender, marital status, sexual orientation, disability, or political affiliation.

8. Legal Compliance
All Suppliers shall respect and comply with all applicable laws, rules, regulations and local ordinances, including those relating to taxation, employment, human rights, the environment, health and safety where they operate.

C. USE OF THE COMPANY’S ASSETS
The Company’s assets such as computers, telephones and cell phones, fax machines, copy machines, conference rooms, vehicles, construction equipment, tools, and similar assets, which are within the disposal of the Supplier, shall be used solely and exclusively for the Company’s business.

1. Computer and System Security
Suppliers who have access to the Company’s information systems are fully responsible and accountable for the security of those systems and shall strictly comply with the Company’s information security policies and standards. (Please refer to Exhibit A for the Information Security Policies for External Parties)

2. Confidential Information
Suppliers shall not be given access to proprietary and/or confidential information of the Company unless authorized under a non-disclosure agreement, as such Suppliers are prohibited from copying, sharing, disseminating or using these information to discredit the Company or to gain personal advantage or benefit. For this reason, Suppliers with authorized access shall:

a. Maintain the confidentiality of information entrusted to them and on the Company’s customers, except when disclosure is properly authorized or legally mandated. This includes any information about a specific customer such as but not limited to the customer’s name, address, Social Security number, phone numbers, contact names, and billing data.

b. Not share confidential information with Affiliates, related parties or other entities without appropriate approval from the Company

c. Not disclose non-public Material Information acquired while working with the Company that can be used in making investment decisions concerning the Company’s securities. The Company’s Insider Trading (Black Out) Policy prohibits trading while in possession of material nonpublic information and prohibits sharing this information with others to enable them to trade.

d. Be subject to the Company’s right to access, monitor and review usage of resources including but not limited to Company-issue devices, e-mail accounts, and other electronic or internet resources.

Supplier’s commitment on the treatment of the Company’s confidential information shall be binding even after the termination or expiration of Suppliers’ engagement with the Company.


3. Company Records and Disclosures
Accurate records and disclosures are critical to the Company in meeting its legal, financial, regulatory, and management obligations. Suppliers shall ensure that all records, disclosures, and communications to the Company are full, fair, accurate, timely and understandable.

Suppliers shall not hide, alter, falsify, or disguise the true nature of any transaction, nor forge endorsements, approvals, or authorizing signatures for any payment. If a record or disclosure is known to be misleading or false, this shall not be submitted, encoded, possessed, or approved and shall be reported immediately to its business contact in the Company.

4. Retention of Records
Suppliers shall implement document retention periods as may be reasonably prescribed by the Company.

5. Endorsements
Suppliers shall not use the Company’s name or trademarks in advertising, publicity, articles, catalogs, testimonials or product endorsements unless duly authorized in writing by the Company.

6. News Media Inquiries
Suppliers shall not make any representation or statement to the media or to anyone on behalf of the Company unless they are expressly authorized to do so by the Company. All inquiries from media or anybody shall be referred to Corporate Communication or Corporate Marketing Office of the Company.

D. PRODUCTS AND SERVICE STANDARDS
Suppliers that seek to do business with the Company shall demonstrate the ability to add
value, and provide high-quality goods and services that are competitively priced, reliable,
and aligned with its superior level of service.

Suppliers shall abide with the following:

1. Comply with all rules, regulations and statutory requirements relating to the provision of the products/services to the Company;

2. Not act in collusion or connivance with any other suppliers or agents when participating in a bid;

3. Supply only the products that are certified to be of good quality;

4. Possess the necessary capabilities, equipment and suitable place of business to perform its obligations

5. Not contract out, subcontract or outsource any portion of the products or services except with prior written consent of the Company;

6. Maintain the highest standards of integrity and quality of work at all times;

7. Supports fair competition based on quality, service and price.

V. RAISING CONCERNS
The standards of conduct described in this Policy are critical for the success of the Company’s business relationship with its Suppliers. Suppliers are encouraged to report to the Company through its Compliance Officer any violations, breach or questionable activities that may prejudice the Company.

VI. COMPLIANCE AND ENFORCEMENT
A. Suppliers shall be responsible and accountable for providing accurate, complete and updated information required in the SBCC Form (Please see Exhibit B) and shall comply with the relevant disclosure requirements prescribed by the Company.

B. The Compliance Officer or any such office performing governance functions shall oversee compliance of this Policy. The Compliance Officer shall oversee compliance of the different organizations, review and recommend amendment to this Policy whenever necessary

C. Procurement Office, Finance (for Financial Institutions) and Human Resources (for Consultants) shall be responsible for:

1) Informing Suppliers of the Company of the SBC and ensure their commitment by facilitating the signing of the appropriate commitment form;
2) Administration of the Suppliers’ Conflict of Interest Disclosure Form;
3) Reviewing and validating the accuracy of the disclosed information by the Supplier;
4) Random checking if Suppliers’ compliance to SBC.
5) Recommendation of appropriate disciplinary action, without prejudice to any civil or criminal action which the Company may pursue, against the responsible parties who violate the SBC Policy; and
6) Adoption of measures to prevent recurrence of such violation.

D. Supply Chain and Logistics Management shall develop the implementing rules and regulations of this Policy; recommend appropriate sanctions to those found violating it. It also recommends improvements in risk mitigation and internal control procedures to this Policy.

VII. EFFECTIVITY
This SBC shall take effect upon approval of the Board. In the event of inconsistencies of this Policy with other existing Company policies, this Policy shall prevail.

All existing Suppliers will be given a copy of the policy and will take effect upon renewal of existing contract.

1. RADIUS INFORMATION
In the course of its engagement with Radius Telecoms, Inc. ("Radius"), Contractor may receive or have access to the personal information, assets, infrastructure and operational processes of Radius, its directors, officers, agents, stockholders, customers, consultants, and/or employees (hereinafter collectively referred to as “Radius Information”).

2. STANDARD CARE
Contractor shall take and apply reasonable security measures in collecting, receiving, transmitting, storing and disposing Radius Information. Contractor shall be responsible for any unauthorized collection, receipt, transmission, storage, disposal, use and disclosure of personal information, assets, infrastructure and operational processes under its control or in its possession. Contractor shall also be responsible for and remain liable to Radius for the actions and omissions of its subcontractors, agents, employees, officers and authorized persons as if they were Contractor's own actions and omissions.

Contractor acknowledges that Radius might face significant financial and reputational harm due to a security breach or unauthorized use of Radius Information, and undertakes to:

a. keep and maintain all Radius Information in strict confidence using such degree of care as is appropriate to avoid unauthorized access, use or disclosure;

b. use and disclose Radius Information solely and exclusively for the purposes for which such information, or access to it, is provided pursuant to the terms and conditions of this Agreement, and not use, sell, rent, transfer, distribute, or otherwise disclose or make available Radius Information for Contractor's own purposes or for the benefit of anyone other than Radius without Radius' prior written consent; and

c. not, directly or indirectly, disclose Radius Information to any person other than authorized employees including subcontractors, agents, outsourcers without express written consent from Radius but strictly in accordance with the terms of the Agreement.

A violation of any of the above obligations by Contractor shall be deemed a “Security Breach”.

3. SECURITY BREACH
In cases of a Security Breach,

a. Upon detection thereof, Contractor shall:
(i) provide Radius with the name and contact information of its employee or personnel, if other than the Vendor Coordinator (Project Manager of the project at Radius), who shall serve as Radius' primary security contact and shall be available to assist Radius twenty-four (24) hours per day, seven (7) days per week as a contact in resolving obligations associated with a Security Breach;
(ii) notify Radius of the Security Breach within (1) hour, and a formal report that is no later than twenty-four (24) hours after Contractor becomes aware of it; and
(iii) notify Radius of any Security Breaches by calling or e-mailing only Radius' designated contact persons, which will be communicated by Radius to Contractor upon signature of the Agreement.

b. The formal report shall include, at a minimum, the following details of the Security Breach:
(i) a description of the nature and other facts surrounding the security breach;
(ii) the type of information involved;
(iii) who may have obtained the information;
(iv) the effect of such security breach;
(v) what steps the Contractor has taken or shall take to investigate the Security Breach;
(vi) what steps the Contractor has taken or shall take to mitigate any negative effect of the
Security Breach; and

c. Contractor shall coordinate with Radius to investigate the Security Breach. Contractor agrees to fully cooperate with Radius in Radius' handling of the matter, including, without limitation:
(i) assisting with any investigation;
(ii) providing Radius with physical access to the facilities and operations affected;
(iii) facilitating interviews with Contractor's employees and others involved in the matter; and
(iv) making available all relevant records, logs, files, data reporting and other materials required
to comply with applicable law, regulation, industry standards or as otherwise required by
Radius.

d. Each day thereafter until the investigation is complete, the Contractor shall provide Radius Information Technology Group and Meralco Cyber Security Group with a status update regarding the investigation and the following additional information as it becomes available:
(i) known or suspected group or individuals to have gained unauthorized access to Radius
Information;
(ii) any information or indication that Radius Information has been abused or compromised;
(iii) additional steps the Contractor has taken or shall take to investigate the Security Breach;
(iv) the corrective action(s) the Contractor has taken or shall take to prevent future similar
unauthorized use or disclosure.

e. Contractor shall undertake best efforts to remedy any Security Breach as soon as reasonably practicable and to prevent any further Security Breach at Contractor's expense in accordance with applicable privacy rights, laws, regulations and standards.

f. Radius reserves the right to conduct an independent investigation of any Security Breach and should Radius decides to do so, Contractor shall cooperate by making resources, personnel, and systems access fully available to Radius and its authorized representative(s).

g. Contractor agrees that it shall not inform any third party of any Security Breach without first obtaining Radius' prior written consent, other than to inform a complainant that the matter has been forwarded to Radius. Further, Contractor agrees that Radius shall have the sole right to determine:
(i) whether notice of the Security Breach is to be provided to any individuals, regulators, law enforcement agencies, consumer reporting agencies or others as required by law or regulation, or otherwise in Radius' discretion; and
(ii) the contents of such notice, whether any type of remediation may be offered to affected persons, and the nature and extent of any such remediation.

h. Contractor agrees to fully cooperate at its own expense with Radius in any litigation or other formal action deemed necessary by Radius to protect its rights relating to the use, disclosure, protection and maintenance of Radius Information.

i. Contractor shall promptly use its best efforts to prevent a recurrence of any such Security Breach.

4. INFORMATION SECURITY
a. Contractor represents and warrants that its collection, access, use, storage, disposal and disclosure of Radius Information does and shall strictly comply with all applicable privacy and data protection laws, as well as all other applicable regulations and directives.

b. Contractor shall implement administrative, physical and technical safeguards to protect Radius Information that are no less rigorous than International Organization for Standardization’s standard ISO/IEC 27001:2017 and the Information Technology Library (ITIL), and shall ensure that all such safeguards, including the manner in which Information is collected, accessed, used, stored, processed, disposed of and disclosed, comply with applicable data protection and privacy laws, as well as the terms and conditions of this Agreement.

c. Contractor shall ensure that Radius Information that has come to its possession are processed fairly and lawfully, and are retained only for as long as necessary for the fulfillment of the purposes for which they were obtained or for the establishment, exercise or defense of legal claims, or for legitimate business purposes, or as provided by law;

d. Contractor's safeguards for the protection of Radius Information shall be as follows:
(i) limiting access of Information to its Authorized Representatives. For purposes hereof, “Authorized Representatives” shall refer to Contractor’s directors, officers, employees and agents who NEED TO KNOW, ACCESS or USE the Radius Information but solely for purposes of fulfilling Contractor’s obligations to Radius;
(ii) separating distinct and conflicting duties and areas of responsibilities to critical operational functions among its Authorized Representatives to prevent harm or damage to systems or services and to ensure that a proper check and balance is in place when completing a process and avoid any conflict of interest;
(iii) maintaining and implementing comprehensive information security policies and best practices as well as risk assessment policies, that have been disseminated to all their concerned parties;
(iv) securing business facilities, data centers, paper files, servers, back-up systems and computing equipment, including, but not limited to all mobile devices and other equipment with information storage capability;
(v) implementing network, device application, database and platform security;
(vi) securing information transmission, storage and disposal;
(vii) implementing authentication and access controls within media, applications, operating
systems and equipment;
(viii) encrypting and securing from malware Radius Information stored on authorized mobile
media;
(ix) encrypting Radius Information transmitted over public or wired or wireless networks;
(x) strictly segregating Radius Information from information of Contractor and its other clients’ information so that information is not commingled with any other types of information;
(xi) implementing appropriate personnel security and integrity procedures and practices, including, but not limited to, conducting background checks consistent with applicable law; and
(xii) providing appropriate privacy and information security training to its Authorized Representatives.

e. During the term of each Authorized Representative’s engagement with Contractor, Contractor shall at all times cause such Authorized Representatives to abide strictly by Contractor's obligations under this Agreement and Contractor’s standard policies and procedures. Contractor further agrees that it shall maintain a disciplinary process to address any unauthorized access, use or disclosure of Radius Information by any of its Representatives. Upon Radius' written request, Contractor shall promptly identify for Radius in writing all Authorized Representatives as of the date of such request. The Authorized Representatives’ obligations of confidentiality under this Section 4 shall survive the termination of their engagement with Contractor in perpetuity.

f. Upon Radius' written request, Contractor shall provide Radius with a network and/or system diagram that outlines Contractor's information technology network infrastructure and/or all systems used in relation to fulfill its obligations under this Agreement, including, without limitation:
(i) connectivity to Radius and all third parties who may access Contractor's network to the
extent the network contains Radius Information;
(ii) all network connections including remote access services and wireless connectivity;
(iii) all access control devices (for example, firewall, packet filters, intrusion detection and
access-list routers);
(iv) all back-up or redundant servers;
(v) permitted access through each network connection;
(vi) network traffic and data flow diagram; and
(vii) certifications and policies and relevant or applicable hardware and/or software
configurations.

g. Radius Information Technology Group will conduct a third-party information security due diligence at least once a year. Timeline for the remediation of the security findings and/or vulnerabilities are as follows: In the event that these cannot be followed, appropriate containment and/or alternate security controls must be in place the soonest possible time.

(i) For Systems in Production:
a. Critical Risks: within 7 business days
b. High Risks: within 15 business days
c. Medium Risks: within 30 business days
d. Low Risks – within 45 business days

(ii) For Systems in Project Stage:
a. Critical Risks: Before Go Live
b. High Risks: Before Go Live
c. Medium Risks: 30 business days after Go Live
d. Low Risks – 45 business days after Go Live

5. RETURN OR DESTRUCTION OF INFORMATION
At any time during the term of the Contractor’s engagement with Radius or upon the termination or expiration of such engagement, at Radius' request for any reason, Contractor shall, and shall instruct all Authorized Representatives to, promptly return to Radius all copies, whether in written, electronic or other forms or media, of Radius Information in its possession or the possession of such Authorized Representatives, or securely dispose of all such copies, and certify in writing to Radius that such information has been returned to Radius or disposed of securely. Contractor shall comply with all directions provided by Radius with respect to the return or disposal of Radius Information.

In the event that Radius approves destruction as an alternative to returning Radius Information, Contractor shall certify in writing the destruction as rendering the said information non-retrievable and unrecoverable. Contractor shall completely destroy all copies of Radius Information at all locations and all systems where the information is stored. Such information shall be destroyed following an industry standard procedure for complete destruction such as NIST Publication 800-88, Guidelines for Media Sanitization, or using a manufacturer-recommended degaussing product for the system affected.

6. EQUITABLE RELIEF
Contractor agrees to indemnify, defend, and hold harmless Radius and its Authorized Representatives against any direct losses, damages, liabilities, assessments, costs, charges, or claims, including reasonable attorneys’ fees, arising out of a breach of this Policy by Contactor or any of its Authorized Representatives.

Contractor acknowledges that any breach of its covenants or obligations set forth herein may cause Radius irreparable harm for which monetary damages would not be adequate compensation and agrees that, in the event of such breach or threatened breach, Radius is entitled to seek equitable relief, including a restraining order, injunctive relief, specific performance and any other relief that may be available from any court, in addition to any other remedy to which Radius may be entitled at law or in equity. Such remedies shall not be deemed to be exclusive but shall be in addition to all other remedies available at law or in equity.

7. MATERIAL BREACH
Contractor’s failure to comply with any of the provisions of these terms and conditions is a material breach of Contractor’s Agreement with Radius. In such event, Radius may terminate the Agreement effective immediately upon written notice to the Contractor without further liability or obligation to Radius without prejudice to other remedies available to Radius under the law.

8. SECURITY COMPLIANCE
a. Customer Audit
Upon Radius' request to confirm Contractor’s compliance with the Agreement regulation or applicable law, Contractor grants Radius or, upon the Parties’ agreement, a third party on Radius' behalf, permission to perform an assessment, audit, examination or review of all controls in Contractor’s physical and/or technical environment in relation to all Radius Information being handled by Contractor pursuant to the Agreement. Contractor shall cooperate with such assessment by providing access to knowledgeable personnel, physical premises, documentation, infrastructure and application software that processes, stores or transports Radius Information for Radius. In addition, upon Radius' written request, Contractor shall provide Radius with the results of any audit or risk assessment performed by a reputable 3rd party that assesses the effectiveness of Contractor’s information security program as relevant to the security and confidentiality of Radius Information.

b. Contractor Audit
At least once per year based on an agreed schedule with Radius, Contractor shall conduct site audits of the information technology and information security controls for all facilities used in complying with its obligations under the Agreement, including obtaining a network-level vulnerability assessment based on the recognized industry best practices. When such assessment cannot be fulfilled by the Contractor or its authorized third-party partner, Radius shall conduct the assessment for all relevant components of the infrastructure related to this Agreement for that particular period to ensure that regular checking and testing are conducted. Upon Radius' written request, Contractor shall make available to Radius for review updated certifications and audit findings such as ISO/ICE 27001:2017 certification. Radius shall treat such audit reports as Contractor’s Confidential Information under the Agreement. Any exceptions noted audit reports will be promptly addressed with the development and implementation of a corrective action plan by Contractor’s management.

c. Questionnaire provided by Radius
Upon the Radius’ written request, to confirm compliance with this Agreement, as well as any applicable laws and industry standards, Contractor shall promptly and accurately complete a written information security questionnaire provided by Radius or its Authorized Representative regarding Contractor’s business practices and information technology environment in relation to all Radius Information. Contractor shall fully cooperate with such inquiries. Radius shall treat the information provided by Contractor in the security questionnaire as Contractor’s confidential information.

9. SURVIVAL OF CONFIDENTIAL OBLIGATION
The obligations of strict confidentiality provided herein shall survive the termination of the Agreement in perpetuity.

Approved by the Board on the 26th day of March 2021.

Whistleblowing Policy

I. POLICY STATEMENT
The Company aims to maintain the highest ethical, moral and legal standards in keeping with good corporate governance principles of Fairness, Accountability, Integrity, Transparency, and Honesty. As such, Directors, Officers and Employees are expected to conduct themselves with integrity, impartiality and honesty.

Towards this end, the Company supports all employees and other stakeholders and encourages them to raise concerns and report misconduct without fear of reprisals in order that inappropriate behavior that compromise the interest of the stockholders, investors, customers and all other stakeholders is prevented and if committed, appropriately penalized.

In this light, the Company treats all disclosures in a confidential and sensitive manner. The identity of the individual employee making genuine and appropriate allegation under this Policy are assured of fair treatment.

Through this Policy, the Company maintains internal corporate justice and provides all stakeholders with effective channels for reporting of illegal, fraudulent or unethical activities of Officers and Employees and lays down clearly defined procedures for investigating and resolving whistleblowing reports. Also, this Policy seeks to provide protection for whistleblowers and their witnesses, who report allegations of such malpractice or misconduct.

II. DEFINITIONS
A. Whistleblowing — disclosure or filing of a report by any person who, in good faith, believes that the Company or any of its Directors, Officers and/or Employees is engaging or has engaged in an improper course of illegal or unethical conduct or conduct that violates the CG Rules, or constitutes a Questionable Accounting or Auditing Matter. Such person must be able to disclose such conduct free from fear of intimidation or reprisal.

B. Corporate Governance Rules (CG Rules) — refer to the Company’s Manual on Corporate Governance, Code of Business Conduct and Ethics, Conflict of Interest Policy, Supplier’s Business Conduct, other Company policies, and applicable laws, rules, and regulations relating to corporate governance, as may be issued from time to time by the Company or any governmental or regulatory body.

C. Questionable Accounting Matters — any serious violation of generally accepted accounting principles and standards applicable to the Company.

D. Questionable Auditing Matters — any serious violation or override of the Company's internal controls.

E. Whistleblower — referring to any person who files a Whistleblowing report.

F. Report — disclosure or filing made by a whistleblower in accordance with this Policy.

G. Retaliation — an act of reprisal, discrimination, harassment, intimidation, or adverse personnel action by Company directors, officers, or employees against a Whistleblower and/or their respective witnesses

H. Witness — a person other than the Whistleblower who can attest to the veracity of the Whistleblowing report

I. Preliminary Investigating Authority – Compliance Office or any such organization as shall later be assigned to perform governance function for the Company.

J. Assisting Investigating Unit (AIU) — organization or office, with specific specializations on cases reported, responsible for conducting investigation and providing initial recommendations on the appropriate sanctions and penalties

K. Formal Investigating Authority – officer, organization, or committee to which the Whistleblowing Report was referred for formal investigation and resolution

L. Officer — employees with the rank of Vice-President and up as stated in the Company's By-Laws

III. COVERAGE
A. This Policy applies to and shall be implemented by, all members of the Board of Directors (each a “Director" and collectively, the "Directors'), Officers (each, an “Officer’ and collectively, the “Officers"), Employees (each, an “Employee" and collectively, the “Employees") of the Company.

B. This Policy covers any act or omission committed by a Director, Officer, and/or Employee of the Company that may be considered as Violation of Corporate Governance Rules (“CG Rules”). Specifically:

1. Violation of the Corporate Governance Policies and Principles, including but not limited to the following:
a. Granting a supplier undue favors
b. Collusion with a supplier to ensure award of a contract
c. Unauthorized disclosure of confidential information
d. Knowingly destroying company files which are the subject of government
investigation
e. Failure to disclose related party transactions
f. Solicitations of money or gifts from contractors of the Company
g. Violation of Conflict of Interest Policy

2. Violation of the Code of Ethics or other similar codes;

3. Financial malfeasance including those relating to financial fraud and questionable accounting and auditing matters, examples of which are provide below:

a. Questionable Accounting Matters
i. Significant overstatement or understatement of account balances
ii. Non-recording of transactions in a complete or timely manner
iii. Gross violation of generally accepted accounting principle(s)
iv. Misclassification of accounts
v. Inaccurate or non-disclosure of significant information relevant to proper
interpretation of the financial statements
vi. Lack of underlying transactions to support accounting entries
vii. Lack of proper documents to support accounting entries

b. Questionable Auditing Matters
i. Misappropriation of funds
ii. Misuse or abuse of Company assets and facilities
iii. Circumvention of or disregard of audit policies

C. The following are not covered by this Policy:
1. Individual employee grievances and complaints regarding terms and conditions of employment which will continue to be reviewed under the applicable personnel policies or collective bargaining agreement.

2. Violations of the Company's Code of Conduct initiated by a superior against a subordinate by way of a disciplinary action which shall be subject to existing processes on disciplinary action.

III. GENERAL PRINCIPLES, GUIDELINES, AND PROCEDURES
A. Reporting
1. Every Director, Officer and Employee of the Company is obliged to report any activity that appears to be fraudulent or illegal or otherwise in violation of applicable Company rules and regulations to his/her immediate Organizational Head.

2. The Preliminary Investigating Authority shall serve as the default office in the event that reporting to Organizational Head is not feasible. The Whistleblower may file a report to the Preliminary Investigating Authority through the different media/ communication channels:

3. Whistleblowers are encouraged to file their Reports using the REPORT ON CORPORATE GOVERNANCE VIOLATION FORM (ANNEX “A”). However, Reports filed using other forms shall be received, evaluated, and resolved in the same manner and to the same extent as those filed using the standard Form.

4. Reports must be made in good faith. Any information or allegation must be substantially true and must not be intended primarily and solely for one's personal gain. When a report is done in good faith and later on is found unmeritorious, no adverse action that will be taken against the Whistleblower.

5. Adverse action will be taken in case of malicious reporting or when the Whistleblower is also found to have been involved in the violation. Similarly, an individual who has been proven to have made a Whistleblowing Report with knowledge that it is false shall be penalized accordingly.

6. The identity of the Whistleblower and his/her contact information should, as much as possible, be disclosed to the appropriate authorities or concerned offices who will investigate and handle the report. This will aid in clarifying or securing additional information that may be required. This will also be used in providing updates to the Whistleblower on the development or status of the report. Nonetheless, anonymous reports shall be acted upon in the same manner and to the same extent as those with identified Whistleblower.

7. For reports involving wrongdoing, fraudulent or illegal acts, it is advisable that the Whistleblower provide a Witness who is willing to cooperate and participate in the investigation or proceedings pertaining to the report.

B. Receipt and Disposition of Reports
1. All reports, even anonymous, shall be received, considered and evaluated. The Whistleblower should be provided with feedback within thirty (30) working days.

2. The Whistleblowing Report should be referred to the Preliminary Investigating Authority for the conduct of preliminary review of the Report to determine if the Report pertains to any of the following violations of Corporate Governance Rules (“CG Rules”):
a. Violation of the Corporate Governance Policies;
b. Violation of the Code of Ethics or other similar codes; and
c. Financial malfeasance including those relating to financial fraud and questionable
accounting and auditing matters.

3. If the Report does not involve the foregoing, the Preliminary Investigating Authority shall endorse the same to the responsible organization in the Company (e.g. customer billing complaints to be endorsed to the appropriate business center)

4. If the report constitutes Whistleblowing, the Preliminary Investigating Authority shall conduct preliminary investigation to ascertain whether there is probable cause to proceed with formal investigation, considering the following criteria:
a. The nature of the Report;
b. The seriousness of the issues raised;
c. The extent to which the allegation can be confirmed or corroborated by attributable
sources; and
d. The magnitude of the possible impact of the issues to the Company's interest.

5. If the Preliminary Investigating Authority finds probable cause to proceed with a formal
investigation, the Preliminary Investigating Authority shall endorse the same to the
Immediate Organizational Head and the responsible Assisting Investigating Unit (AIU) as
defined below for formal investigation:



6. Depending on the circumstances, the Preliminary Investigating Authority may consider nominating an appropriate investigating officer or organization or set up a special committee to investigate the matter independently.

7. The Preliminary Investigating Authority may be deputized by the Board to investigate, within the prescribed period, reports involving a director or advisor of the Board, and submit its findings to the Board.

8. All organizations, i.e., Investigating Authority, Assisting Investigation Unit, Organizational Head, Independent Investigating Officer, Office or Committee, are required to act expeditiously on the reports referred to them and accordingly conduct immediate investigation of the report, impose appropriate penalties/sanctions once proven, and provide feedback to the Whistleblower, if known. Resolution of the report shall be within a 60-day period from receipt thereof.

9. In the event however that a longer period is needed to resolve a case due to its complexity, the concerned organization shall notify the Investigating Authority in writing citing the justification for the extension not later than three days before the expiration of the 60- day period within which to resolve the report.

10. The Preliminary Investigating Authority shall communicate with the Whistleblower from receipt of the report until the resolution of the same, by taking into consideration the processing time required for acknowledgement, feedback and resolution of reports.

C. Formal Investigation
1. With the assistance of the appropriate Assisting Investigation Unit (AIU), the immediate Organizational Head of the Respondent shall initiate the necessary investigation on the Report and gather the appropriate supporting documents/pieces of evidence to facilitate the investigation.

2. The immediate Organizational Head shall exercise judgment in determining the appropriate office to seek assistance aside from those AIU listed above.

3. The Preliminary Investigating Authority shall coordinate with the immediate Organizational Head of Respondent to inform the Respondent in writing of charges imputed to him and to require him to answer such charges.

4. The immediate Organizational Head ensure that in case the Respondent resigns pending the completion of the investigation or final resolution of the case against him, he shall inform the Respondent that the resignation shall be without prejudice to the results of the investigation or the final resolution of the case, and that any benefits due him, if any, shall be withheld pending final resolution of the case.

5. If the violation is related to a breach in financial internal controls, the Internal Audit shall, prior to formal investigation, immediately inform the President or Chief Financial Officer (“CFO”) of the alleged violation. The said Officer, in turn, should carefully discern, considering materiality and/or severity, if the matter has to be elevated or merely transmitted as information to the relevant Board Committee or its Chairman.

6. The President shall determine if there is a need for convening the Management Disciplinary Committee or designate a Company official to conduct a full investigation. The President, in addition to the internal investigation, may allow such designated body or official to engage the services of external auditors or lawyers, or some other external investigating body. This Investigating Committee shall also handle reports where the respondents are directors and officers.

7. The Assisting Investigation Unit shall recommend the appropriate disciplinary action to be meted out to the Respondent, without prejudice to other criminal and civil remedies that the Company may opt to pursue. It shall report to the Compliance Officer the final action, disposition, or recommendation made on the reports. 

8. The immediate Organizational Head shall inform the Respondent in writing of the results of the investigation and/or disposition of the Report filed against him and implement the appropriate disciplinary action. The immediate Organizational Head shall report to the Preliminary Investigating Authority his decision and/or the imposition of the disciplinary action on respondent in accordance with Company policy.

D. Report Monitoring
1. The Preliminary Investigating Authority shall act as administrator of all Whistleblowing Reports. It shall ensure that receipt and processing procedures are available to properly guide their personnel. These should include how reports are received, processed, and resolved until its closure or turn-over to another office. It should also include the assignment of unique number for each report received to facilitate tracking and monitoring.

2. The Preliminary Investigating Authority shall monitor and maintain records of the receipt, disposition and resolution of all reports and ensure the appropriate monthly reporting thereof to the Board through the Audit Committee or appropriate Board Committee or the Audit Committee in case of Questionable Practices by Internal Audit.

3. The Preliminary Investigating Authority will report quarterly to the Board through the appropriate Committee any progress in compliance with the handling of reports, following the prescribed form.

E. Confidentiality of Identities and Information
1. The concerned offices shall ensure the confidentiality of the identities of the Whistleblower, the witnesses and the information disclosed, except under any of the following:
a. the Whistleblower waives his right to confidentiality, or
b. identification is required by law or when essential to an investigation.

In either case, the Company shall inform the Whistleblower or the witnesses of the need to reveal their identities and/or information.

2. Unauthorized disclosure of data or information by any Officer or Employee will be penalized based on the disciplinary rules prescribed by the Company.

F. Protection of the Reporting Person and/or Witness from Retaliation
1. The Company shall provide appropriate protection from retaliation. Retaliation is prohibited and will be dealt with in accordance with the pertinent Company policies, rules and applicable laws. It shall be considered a serious misconduct if perpetrated by an Officer or Employee.

2. In the event of retaliation, the Whistleblower or witness shall report to the Preliminary Investigating Authority by filling out the Retaliation Protection Report Form.

3. The report for protection from retaliation must be supported by an accomplished Retaliation Protection Report Form (ANNEX “B”) to be submitted to the Preliminary Investigating Authority.

4. Protection from retaliation will be granted, upon endorsement of Preliminary Investigating Authority, reviewed by the Management Disciplinary Committee or the relevant Board Committee for approval of the CEO, his designated representative or the Chairman of the Board, as the case may be. These Reports shall be processed expeditiously.

5. In case of an unauthorized disclosure of the identity of the Whistleblower or witness, appropriate disciplinary action shall be enforced on the responsible employee in accordance with the Code on Employee Conduct.

G. Recommending/Approving Authorities for Penalties
1. The Preliminary Investigating Authority, with the assistance of AIU, shall recommend the appropriate penalty as a result of a violation of this Policy, if applicable.

2. The recommended penalty shall be reviewed and approved by the following approving authority:



H. Appeals / Request for Reconsideration
1. Any party desiring to appeal from a decision rendered herein may file a motion for reconsideration within ten (10) calendar days from receipt thereof. Should the motion be denied, an appeal may be filed with the Office of the President and CEO within ten (10) calendar days from receipt of the order denying the motion. Appellants must be ready to present additional evidence that would validate the merits of such an appeal

2. Appeals from decisions concerning a member of the Board, the President and CEO, the CFO, or the Compliance Officer must be filed directly with the Board through its Chairman.

3. The appeal must be resolved within thirty (30) working days and motion for reconsideration must be resolved within fifteen (15) days from receipt thereof.

VIII. SANCTIONS
A. Any officer or employee of the Company who has knowledge of any violation of this Policy shall report the same to the Office of the Compliance Officer.

B. The Compliance Officer shall report to the Board all violations of this Policy and sanctions imposed in accordance with the Code of Ethics, Code of Conduct and other applicable policies of the Company.

C. This Policy shall be without prejudice to the provisions of the Company’s Manual of Corporate Governance and all related and relevant policies of the Company which shall be observed and shall apply to the fullest extent possible.

IX. REVIEW AND AMENDMENTS
This Policy shall be regularly reviewed and updated to conform to the requirements of applicable law, rules and regulations

X. EFFECTIVITY
This Policy shall take effect fifteen (15) days from date of the approval of this Policy.

All existing policies, systems, practices, and related implementing guidelines concerning the same matters covered by this Policy are deemed revoked and superseded by this Policy in so far as inconsistent with the provisions hereof.

Approved by the Board on the 26th day of March 2021.