Report of the Audit and Governance Committee
to the Board of Directors For the year ended December 31, 2015
The Audit & Governance Committee’s roles, responsibilities and authority are defined in the Audit and Governance Committee Charter approved by the Board of Directors. The Committee
provides assistance to the Board of Directors in fulfilling their oversight responsibility to the shareholders relating to the:
- integrity of the Manila Water Company, Inc.’s (“Company’s”) financial statements and the financial reporting process;
- appointment, remuneration, independence and performance of internal audit and of the independent auditors, and integrity of the audit process
- effectiveness of the systems of internal controls and enterprise risk management process
- compliance with applicable legal and regulatory requirements and other reporting standards
- performance and leadership of the internal control function
- preparation of a year-end report of the Committee for approval of the Board and to be included in the annual report.
In compliance with the Audit and Governance Committee Charter, the Committee confirms that:
- An independent director chairs the Audit and Governance Committee. The Committee has three out of four members who are independent directors;
- The Committee had four meetings during the year with the following attendance rate:
|Directors||No. of Meetings Attended/Held||Percent Present|
|Oscar S. Reyes||5/5||100%|
|Jose L. Cuisia, Jr.||4/5||80%|
|Jaime C. Laya||4/5||80%|
|Victoria P. Garchitorena||5/5||100%|
- The Committee reviewed and approved the quarterly unaudited consolidated financial statements and the annual Audited Consolidated Financial Statements of Manila Water Company, Inc. and subsidiaries, including Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the year ended December 31, 2015, with the Company’s Management, internal auditors, and SGV& Co. These activities were conducted in the following context:
- That, Management has the primary responsibility for the financial statements and the reporting process
- That, SGV & Co. is responsible for expressing an opinion on the conformity of the Company’s audited consolidated financial statements with the Philippine Financial Reporting Standards.
- The Committee reviewed and approved the Management representation letter before submission to the Company’s independent external auditors.
- The Committee recommended to the Board of Directors the re-appointment of SGV & Co. as independent external auditors for 2015 based on its review of SGV’s performance and qualifications, including consideration of Management’s recommendation.
- The Committee reviewed and approved all audit and auditrelated services provided by SGV & Co. to the Company and the related fees for such services.
- The Committee discussed and approved the overall scope and the respective audit plans of the Company’s internal auditors and of SGV & Co., the results of their audits and their assessment of the Company’s internal controls, and the overall quality of the financial reporting process.
- The Committee discussed the reports of the internal auditors, and ensured that Management is taking appropriate actions in a timely manner, including addressing internal control and compliance issues. All the activities performed by Internal Audit were conducted in conformance with the International Standards for the Professional Practice of Internal Auditing.
- The Audit and Governance Committee, through the audits conducted by SGV & Company and Internal Audit, has reviewed Management’s system of internal controls and the Committee found the internal control system to be adequate and effective.
- The Committee discussed with Management the adequacy and effectiveness of the Enterprise Risk Management process, including significant risk exposures, the related risk-mitigation efforts and initiatives, and the status of the mitigation plans. The review was undertaken in the context that Management is primarily responsible for the risk management process.
- The Committee reviewed and confirmed that the existing Audit and Governance and Internal Audit Charters are sufficient to accomplish the Committee’s and Internal Audit’s objectives. The A&GC Charter is in compliance with the Securities and Exchange Commission Memo Circular No. 04 (2012).
- The Committee conducted a self-assessment of its performance to confirm that the Committee continues to meet the expectations of the Board, Management and shareholders.
Based on the reviews and discussions undertaken, and subject to the limitations on our roles and responsibilities referred to above, the Audit and Governance Committee recommended to the Board of Directors the inclusion of the Company’s audited consolidated financial statements in the Company’s Annual Report to the Stockholders for the year ended December 31, 2015 and the filing thereof with the Securities and Exchange Commission.
February 24, 2016
OSCAR S. REYES
Chairman, Audit &
JOSE L. CUISIA JR
JAIME C. LAYA
VICTORIA P. GARCHITORENA