PHILEX PETROLEUM

CORPORATION

27th March 2013

MS. JANET A. ENCARNACION

Head, Disclosures Department
Philippine Stock Exchange, Inc.
3rd Floor, Philippine Stock Exchange Plaza
Ayala Triangle, Ayala Avenue
Makati City

Re: Corporate Governance Disclosure Su.rvey

Dear Ms. Encarnacion,

In compliance with PSE Memorandum CN-No. 2013-0007, attached is Philex Petroleum

Corporation's Corporate Governance Guidelines Disclosure Survey for the year 2012.

Very truly yours,

~ ~-~
......
CARLO S. PABLO
President & COO

20130327 PSE Corp GoVel1lallce Guideiines

/aby

Philex Building, 27 Brixton cor. FairJane Streets, Pasig City, 1600, Philippines
Tel.: (632) 63 1-1381 1088 . Fax: (632) 633-3242

- ------


THE PHILIPPINE STOCK

EXCHANGE, INC.

Corporate Governance Guidelines

for

Listed Companies
Disclosure Template

FORFY2012
CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

COMPLY EXPLAIN
GuidelineNo.1:

DEVELOPSANDEXECUTESASOUNDBUSINESSSTRATEGY
1.1 Haveaclearlydefinedvision,missionandcorevalues.
1.2 Haveawelldevelopedbusinessstrategy.
1.3 Haveastrategyexecutionprocessthatfacilitateseffectiveperformance
management,andisattunedtothecompanysbusinessenvironment,management
styleandculture.
1.4 Haveitsboardcontinuallyengagedindiscussionsofstrategicbusinessissues.
GuidelineNo.2:

ESTABLISHESAWELLSTRUCTUREDANDFUNCTIONINGBOARD
2.1. Haveaboardcomposedofdirectorsofprovencompetenceandintegrity.
2.2. Beleadbyachairmanwhoshallensurethattheboardfunctionsinaneffectiveand

collegialmanner.
Twooutofnine directorsoftheCompanyare
independentdirectors.TheCompanyiscompliant
withSection38oftheSecuritiesRegulationCode,
2.3 Haveatleastthree(3)ofthirtypercent(30%)ofitsdirectorsasindependent whichrequiresthatcoveredcorporationshaveat

directors. leasttwo(2)independentdirectorsorsuch
independentdirectorsshallconstituteatleast
twentypercent(20%)ofthemembersofsuch
board,whicheveristhelesser.
PhilexPetroleumsharesservicesandadoptsthe
2.4 Haveinplacewrittenmanuals,guidelinesandissuancesthatoutlineproceduresand
manuals,guidelinesandissuancesofitsparent
processes.
company,PhilexMiningCorporation.
TheCompanyhasAudit,Nominations,
Compensation,FinanceandReserves
Committees.TheAuditCommitteesmandate
includestheassessmentandmanagementof
2.5 HaveAudit,Risk,GovernanceandNomination&ElectionCommitteesoftheboard.
enterpriserisks.TheComplianceOfficerandthe
CorporateSecretaryareresponsiblefor
governancematters,whichareregularly
discussedattheBoardlevel.
UnderSec.3.5oftheCompanysCGManual,the
2.6 HaveitsChairmanandCEOpositionsheldseparatelybyindividualswhoarenot
X rolesofChairmanandChiefExecutiveOfficer
relatedtoeachother.
shall,asmuchaspracticablebeseparate.Atthe

CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

moment,suchseparationofpersonalitiesisnot
practicableand,inaccordancewiththeByLaws,
theChairmanistheChiefExecutiveOfficer.
2.7 Haveadirectornominationandelectionprocessthatensuresthatallshareholders
aregiventheopportunitytonominateandelectdirectorsindividuallybasedonthe
numberofsharesvoted.
ThemembersoftheCompanysBoardare
seasoneddirectorswithextensivebusiness
experience.Aformalboardanddirector
2.8 Haveinplaceaformalboardanddirectordevelopmentprogram. developmentprogramisnotseenasnecessaryor
appropriate.Newdirectorsarebriefedand
orientedregardingtheCompanysbusinessand
itsparticularconcerns.
2.9 Haveacorporatesecretary.
2.10 Havenoshareholderagreements,bylawsprovisions,orotherarrangementsthat

constrainsthedirectorsabilitytovoteindependently.
GuidelineNo.3:

MAINTAINSAROBUSTINTERNALAUDITANDCONTROLSYSTEM
3.1 Establishtheinternalauditfunctionasaseparateunitinthecompanywhichwould
beoverseenattheBoardlevel.
PhilexPetroleumsharesservicesandadoptsthe
3.2 Haveacomprehensiveenterprisewidecomplianceprogramthatisannually
manuals,guidelinesandissuancesofitsparent
reviewed.
company,PhilexMiningCorporation.
3.3 Institutionalizequalityserviceprogramsfortheinternalauditfunction.
3.4 Haveinplaceamechanismthatallowsemployees,suppliersandotherstakeholders

toraisevalidissues.
3.5 HavetheChiefExecutiveOfficerandChiefAuditExecutiveattestinwriting,atleast
annually,thatasoundinternalaudit,controlandcompliancesystemisinplaceand
workingeffectively.
GuidelineNo.4:

RECOGNIZESANDMANAGESITSENTERPRISERISKS
4.1 Haveitsboardoverseethecompanysriskmanagementfunction.
4.2 Haveaformalriskmanagementpolicythatguidesthecompanysriskmanagement

andcomplianceprocessesandprocedures.
4.3 DesignandundertakeitsEnterpriseRiskManagement(ERM)activitiesonthebasis

of,orinaccordancewith,internationallyrecognizedframeworkssuchasbutnot

CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

limitedto,COSO,(TheCommitteeofSponsoringOrganizationsoftheTreadway
Commission)IandII.
PhilexPetroleumsharesservicesandadoptsthe
4.4 Haveaunitatthemanagementlevel,headedbyaRiskManagementOfficer(RMO). manuals,guidelinesandissuancesofitsparent
company,PhilexMiningCorporation.
4.5 Disclosesufficientinformationaboutitsriskmanagementproceduresandprocesses
aswellasthekeyrisksthecompanyiscurrentlyfacingincludinghowthesearebeing
managed.
4.6 Seekexternaltechnicalsupportinriskmanagementwhensuchcompetenceisnot

availableinternally.
GuidelineNo.5:
ENSURESTHEINTEGRITYOFFINANCIALREPORTSASWELLASITSEXTERNAL
AUDITINGFUNCTION
5.1 HavetheboardAuditCommitteeapproveallnonauditservicesconductedbythe
externalauditor.TheCommitteeshouldensurethatthenonauditfeesdonot
outweighthefeesearnedfromtheexternalaudit.
5.2 Ensurethattheexternalauditoriscredible,competent,andshouldhavetheability
tounderstandcomplexrelatedpartytransactions,itscounterparties,andvaluations
ofsuchtransactions.
5.3 Ensurethattheexternalauditorhasadequatequalitycontrolprocedures.
5.4 Discloserelevantinformationontheexternalauditors.
5.5 Ensuresthattheexternalauditfirmisselectedonthebasisofafairandtransparent

tenderprocess.
5.6 Haveitsauditcommitteeconductregularmeetingsanddialogueswiththeexternal
auditteamwithoutanyonefrommanagementpresent.
5.7HavethefinancialreportsattestedtobytheChiefExecutiveOfficer andChief

FinancialOfficer.
5.8 Haveapolicyofrotatingtheleadauditpartner everyfiveyears.
GuidelineNo.6:
RESPECTSANDPROTECTSTHERIGHTSOFITSSHAREHOLDERS,

PARTICULARLYTHOSETHATBELONGTOTHEMINORITYORNON
CONTROLLINGGROUP
6.1 Adopttheprincipleofoneshare,onevote.

6.2 Ensurethatallshareholdersofthesameclassaretreatedequallywithrespectto

votingrights,subscriptionrightsandtransferrights.

CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

6.3 Haveaneffective,secureandefficientvotingsystem.
TheCompanyrecognizesandrespectstherights
6.4 Haveeffectiveshareholdervotingmechanismssuchassupermajorityormajorityof
ofallshareholders,asprovidedintherelevant
minorityrequirementstoprotectminorityshareholdersagainstactionsof
laws,rulesandjurisprudence,includingtheright
controllingshareholders.
ofcumulativevoting.
6.5 Provideallshareholderswiththenoticeandagendaoftheannualgeneralmeeting
(AGM)atleastthirty(30)daysbeforearegularmeetingandtwenty(20)daysbefore
aspecialmeeting.
TheCGManualprovidesthattheBoardshould
giveminorityshareholderswherefeasibleor
6.6 Allowshareholderstocallaspecialshareholdersmeeting,submitaproposalfor
practicabletherighttoproposetheholdingof
considerationattheAGMorthespecialmeeting,andensuretheattendanceofthe
meetingsandtheitemsfordiscussiononthe
externalauditorandotherrelevantindividualstoanswershareholderquestionsin
agendathatrelatedirectlytothebusinessofthe
suchmeetings.
businessofthecorporation(Section6.3,CG
Manual).
6.7 EnsurethatallrelevantquestionsduringtheAGMareanswered.
6.8 Haveclearlyarticulatedandenforceablepolicieswithrespecttotreatmentof

minorityshareholders.
6.9 Avoidantitakeovermeasuresorsimilardevicesthatmayentrenchmanagementor

theexistingcontrollingshareholdergroup.
6.10 Provideallshareholderswithaccurateandtimelyinformationregardingthenumber

ofsharesofallclassesheldbycontrollingshareholdersandtheiraffiliates.
6.11 Haveacommunicationsstrategytopromoteeffectivecommunicationwith

shareholders.
As ofDec.31,2012,thepublicfloatis18.37%,and
6.12 Haveatleastthirtypercent(30%)publicfloattoincreaseliquidityinthemarket. X theCompanyiscompliantwiththePSEsruleon
theminimumpublicfloat
TheCompanyhasnotyetadoptedaformal
dividendpolicy.TheBylawsprovidethat
dividendsshallbedeclaredandpaidoutofthe
unrestrictedretainedearningswhichshallbe
6.13 Haveatransparentdividendpolicy. payableincash,propertyorstocktoall
shareholdersonthebasisofoutstandingstock
heldbythem,asoftenandatsuchtimesasthe
Boardmaydetermineandinaccordancewithlaw
andapplicablerulesandregulations.
GuidelineNo.7:

CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

ADOPTSANDIMPLEMENTSANINTERNATIONALLYACCEPTEDDISCLOSURE
ANDTRANSPARENCYREGIME
7.1 HavewrittenpoliciesandproceduresdesignedtoensurecompliancewiththePSE
andSECdisclosurerules,aswellasotherdisclosurerequirementsunderexisting
lawsandregulations.
7.2 Disclosetheexistence,justification,anddetailsonshareholdersagreements,voting
trustagreements,confidentialityagreements,andsuchotheragreementsthatmay
impactonthecontrol,ownership,andstrategicdirectionofthecompany.
7.3 Discloseitsdirectorandexecutivecompensationpolicy.
7.4 Disclosenamesofgroupsorindividualswhohold5%ormoreownershipinterestin
thecompany,significantcrossshareholdingrelationshipandcrossguarantees,as

wellasthenatureofthecompanysothercompaniesifitbelongstoacorporate
group.
7.5 Discloseannualandquarterlyconsolidatedreports,cash flowstatementsandspecial
auditrevisions.Consolidatedfinancialstatementsshallbepublishedwithin90days

fromtheendofthefinancialyear,whileinterimreportsshallbepublishedwithin45
daysfromtheendofthereportingperiod.
7.6 DisclosetoshareholdersandtheExchangeanychangestoitscorporategovernance
manualandpractices,andtheextenttowhichsuchpracticesconformtotheSEC
andPSECGGuidelines.
7.7 Publishand/ordelivertoitsshareholdersinatimelyfashion allinformationand

materialsrelevanttocorporateactionsthatrequireshareholderapproval.
7.8 Disclosethetradingofthecorporationssharesbydirectors,officers(orpersons
performingsimilarfunctions)andcontrollingshareholders.Thisshallalsoincludethe

disclosureofthecompanyspurchaseofitssharesfromthemarket(e.gsharebuy
backprogram).
7.9 Discloseinitsannualreporttheprincipalriskstominorityshareholdersassociated
withtheidentityofthecompanyscontrollingshareholders;thedegreeof
ownershipconcentration;crossholdingsamongcompanyaffiliates;andany
imbalancesbetweenthecontrollingshareholdersvotingpowerandoverallequity
positioninthecompany.
GuidelineNo.8:
RESPECTSANDPROTECTSTHERIGHTSANDINTERESTSOFEMPLOYEES,
COMMUNITY,ENVIRONMENT,ANDOTHERSTAKEHOLDERS
8.1 Establishanddiscloseaclearpolicystatementthatarticulatesthecompanys

recognitionandprotectionoftherightsandinterestsofkeystakeholdersspecifically

CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

itsemployees,suppliers&customers,creditors,aswellthecommunity,
environmentandotherkeystakeholdergroups.
8.2 Haveinplaceaworkplacedevelopmentprogram.
8.3 Haveinplaceameritbasedperformanceincentivemechanismsuchasanemployee ThePhilexMiningStockOptionPlanincludes
stockoptionplan(ESOP)oranysuchschemethatawardsandincentivizes subsidiariessuchastheCompany.
employees,atthesametimealignstheirinterestswiththoseoftheshareholders.
8.4 Haveinplaceacommunityinvolvementprogram.
8.5 Haveinplaceanenvironmentrelatedprogram.
8.6 Haveclearpoliciesthatguidethecompanyinitsdealingwithitssuppliers,

customers,creditors,analysts,marketintermediariesandothermarketparticipants.
GuidelineNo.9:
DOESNOTENGAGEINABUSIVERELATEDPARTYTRANSACTIONSANDINSIDER
TRADING
9.1 Developanddiscloseapolicygoverningthecompanystransactionswithrelated

parties.
9.2 ClearlydefinethethresholdsfordisclosureandapprovalforRPTsandcategorize
suchtransactionsaccordingtothosethatareconsidereddeminimisortransactions
thatneednotbereportedorannounced,thosethatneedtobedisclosed,andthose

thatneedpriorshareholderapproval.TheaggregateamountofRPTwithinany
twelve(12)monthperiodshouldbeconsideredforpurposesofapplyingthe
thresholdsfordisclosureandapproval.
Rulesandguidelinesareinplaceforthe
9.3 Establishavotingsystemwherebyamajorityofnonrelatedpartyshareholders avoidanceofconflictofinterestandthe

approvespecifictypesofrelatedpartytransactionsinshareholdersmeetings. protectionoftheinterestsofallpartieson
mattersthatarematerial.
9.4 Haveitsindependentdirectorsorauditcommitteeplayanimportantrolein

reviewingsignificantRPTs.
9.5 BetransparentandconsistentinreportingitsRPTs.Asummaryofsuchtransactions AuditedFinancialStatementsincludedinthe

shallbepublishedinthecompanysannualreport. annualreport
9.6 Haveaclearpolicyindealingwithmaterialnonpublicinformationbycompany ThepolicyofPMConinsidertradingappliestoall

insiders. itssubsidiaries.
9.7 Haveaclearpolicyandpracticeoffullandtimelydisclosuretoshareholdersofall
materialtransactionswithaffiliatesofthecontrollingshareholders,directorsor
management.
GuidelineNo.10:

DEVELOPSANDNURTURESACULTUREOFETHICS,COMPLIANCE,&

CORPORATEGOVERNANCEGUIDELINES:DISCLOSURESURVEY
CompanyName:______PHILEXPETROLEUMCORPORATION___________ Date:_March27,2013____

ENFORCEMENT
10.1 Formallyadoptacodeofethicsandproperconductthatguidesindividualbehavior
anddecisionmaking,clarifyresponsibilities,andinformotherstakeholdersonthe
conductexpectedfromcompanypersonnel.
10.2 Haveaformalcomprehensivecomplianceprogramcoveringcompliancewithlaws PhilexPetroleumsharesservicesandadoptsthe
andrelevantregulations.Theprogramshouldincludeappropriatetrainingand manuals,guidelinesandissuancesofitsparent

awarenessinitiativestofacilitateunderstanding,acceptanceandcompliancewith company,PhilexMiningCorporation.
thesaidissuances.
10.3 Notseekexemptionfromtheapplicationofalaw,ruleorregulationespeciallywhen
itreferstoacorporategovernanceissue.Shoulditdoso,ithastodisclosethe

reasonforsuchactionaswellpresentthespecificstepsbeingtakentofinallycomply
withtheapplicablelaw,ruleorregulation.
10.4 Haveclearandstringentpoliciesandproceduresoncurbingandpenalizingcompany

oremployeeinvolvementinoffering,payingandreceivingbribes.
10.5 Haveadesignatedofficerresponsibleforensuringcompliancewithallrelevantlaws,

rules,andregulation,aswellasallregulatoryrequirements.
10.6 Respectintellectualpropertyrights.
10.7 Establishandcommititselftoanalternativedisputeresolutionsystemsothat
conflictsanddifferencewithcounterparties,particularlywithshareholdersand
otherkeystakeholders,wouldbesettledinafairandexpeditiousmanner.

CORPORATE GOVERNANCE GUIDELINES: DISCLOSURE SURVEY

Company Name: PHILEX PETROLEUM CORPORATION Date : March 27, 2013

This is to certify that the undersigned reviewed the contents of the attached Corporate Governance Guidelines Disclosure Survey and to

the best of my knowledge and belief, the information contained and set forth in such document as true, complete and correct.

Done this March 27, 2013 in Pasig City

/Yfflrrv-t--tlV-~ -~~~- CARLO S. PABLO

DR. EMERLINDA ROMAN

Independent director President & COO