MIDTERM EXAMINATION

1. The Securities Exchange Commission (SEC) in a meeting held on June 18, 2009 approved the promulgation of the
Revised Corporate Governance.

2. The governing body elected by the stockholders that exercises the corporate poweres of a corporation, conducts all
its business and controls its properties. ( Board of Directors)

3. 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. (independent director)

4. A director who is also the head of a department or unit of the corporation or performs any work related to its
operation. ( Executive director) (1)

5. A director who is not the head of a department or unit of the corporation nor performs any work related to its
operation. ( Non-executive director)

6. The other services by an external auditor to a coporation that not directly related and relevant to its statutory audit
functions, such as, accounting, payroll bookeeping, reconcilliation, computer project, etc. (non-audit work)

7. The framework under which internal controls are developmed and implemented ( alone or in concert with other
policies or procedures) to manage and control a particular risk or business activity. (internal control system)

8. The highest position in the corporation responsible for internal audit activities. (Internal auditor)

9. The Board shall be composed of at least five (5), but not more than fifteen (15) members who are elected by the
stockholders.

10. A nomination and compensation committee, which may be composed of at least _____________members and one
of whom should be an independent director.

TEST II

Article 3 (B) MULTIPLE BOARD SEATS

1. The Board may consider the adoption of guidelines on the number of directorships that its members can hold in stock
and non-stock corporations. The Chief Executive Officers and other executive directors may be covered by a lower
indicative limit for membership in other boards.

2. Article 3 (C) THE CHAIR AND CHIEF EXECUTIVE OFFICER

The roles of Chair and CEO should, as much as practicable, be separate to foster an appropriate balance of power,
increased accountability and better capacity for independent-decision making by the Board.

3. DUTIES AND RESPONSIBILITY OF THE CHAIR

Ensure the meetings of the Board are held in accordance with the by-laws or as the Chair may deem necessary.

4. Article 3 (D) QUALIFICATIONS OF DIRECTORS

In addition to the qualification for membership in the Board provided for in the Corporation Code, the Board may
provide additional qualifications such as College education or equivalent academic degree.
5. RESPONSIBILITIES, DUTIES AND FUNCTIONS OF THE BOARD

The board’s responsibility is to foster the long-term success of the corporation, and to sustain the competitiveness and
profitabligy in a menner consistent with the objectives of the corporation and the best interests of its stockholders.

6. RESPONSIBILITIES, DUTIES AND FUNCTIONS OF THE BOARD

Implement a process for hte selection of directors who can add value and contribute independent judgment to the
formulation of sound corporate strategies and policies. Appoint competent, professional, honest and highly-motviated
management officers.

7. Ensure the corporation’s faithful compliance with all applicable laws, regulations and best business practices.

8. Identify the sectors in the community in which the corporation operates or are directly affected by its operations, and
formulate a clear policy of accurate, timely and effective communication with them.

9. SPECIFIC DUTIES AND RESPONSIBILITIES OF A DIRECTOR

Conduct fair business transactions with the corporation, and ensure that his personal interest does not conflict with the
interests of the corporation.

10. Act Judiciously

11. Observe Confidentiality

12. Exercise independent judgment.

13. Have a working knowledge of the statutory and regulatory requirements that affect the corporation, including its
articles of incorporation and by-laws, the rules and regulations of the Commission and, where applicable, the
requirements of relevant regulatory agencies.

14. INTERNAL CONTROL RESPONSIBILITIES OF THE BOARD (i)

Selection and appointment qualified and competent management officers.

Review of the corporation’s human resource policies, conflict of interest situations, compensation program for
employees, and management succession plan.

BOARD MEETINGS AND QUORUM REQUIREMENT

The members of the Board should attend its regulat and special meetings in person or through teleconferencing
conducted in accordance with the rules and regulations of the Commission

RENUMERATION OF DIRECTORS AND OFFICERS

Corporation may establish formal and transparent procedures for the development of a policy on executive
reneumeration or determination of remuneration levels for individual direcors and officers depending on the particular
needs of the corporation. No director should participate in deciding on his renumeration.

To protect the funds of a corporation, the Commission may, in exceptional cases, e.g. when a corporation is under
receivership or rehabilitation, regulate the payment of the compensation, allowances, fees and fringe benefits to its
directors and officers.
FUNCTIONS OF AUDIT COMMITTEE
Assists the Board in the performance of its oversight responsibility for the financial reporting process, system of internal
control, audit process, and monitong compliance with applicable laws.

Perform oversight functions over the corporation’s internal and external auditors. It should ensure that the 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.

Monitor the adequacy and effectiveness of the corporation;s internal control system, including financial reporting
control and information technology security;

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

Reviw the reports submitted by the internal and external auditors.

Review the quarterly, half-year and annual financial statements before their submission to the Board.

NOMINATION COMMITTEE

A committee composed of at least three(3) members and one of whom should be an independent director, to review
and evaluate the qualifications of all persons nominated to theBoard and other appointments that require Board
approval.

COMPENSATION OR RENUMERATION COMMITTEE

A committee function is to establish a formal and transparent procedure for developing a policy on renumeration of
directors and officers to ensure that their compensation is consistent with the corporation’s culture, strategy and the
business environment in which it operates.

FUNCTIONS OF A CORPORATE SECRETARY

Responsible for the safekeeping and preservation of the integrity of the minutes of the meetings of the Board and its
committees, as well as the other official records of the corporation

Have a working knowledge of the operations of the corporation.

Have appropriate administrative and interpersonal skills.

Loyal to the mission, viision and objectives of the corporation.

Work fairly and objectively with the Board, Management and stockholders.

Attend all board meetings, except when justifiable causes, such as illness, death in the immediate family and serious
accidents, prevent him from doing so.

Ensure that all Board procedures, rules and regulations are strictly followed by the members.

DUTIES AND RESPONSIBILITIES OF THE COMPLIANCE OFFICER

Appear before the Commission when summoned in relation to compliance with the Corporate Code.

Issue a certification every January 30th of the year on the extent of the corporation’s compliance with this Code for the
completed year and, if there any deviations, explain the reason for such deviation.

ADEQUATELY AND TIMELY INFORMATION

To enable the members of the Board to properly fulfill their duties and responsibilities, Management should provide
them with complete, adequate and timely information about maaters to be taken in their meetings.

ACCOUNTABILITY AND AUDIT GUIDELINES

The extent of its responsibility in the preparation ofthe financial statements of the corporation, with the corresponding
delineation of the responsibilities that pertain to the external auditor.

The corporation should consistenly comply with the financial reporting requirements of the Commission.

An effective system of internal control that will ensure the integrity of the financial reports and protection of the assests
of the corporation should be maintained.