REPORT OF THE AUDIT COMMITTEE FOR THE YEAR ENDED DECEMBER 31, 2014
To Our Stockholders:
The Audit Committee (Committee) represents and assists the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial information which are provided to the shareholders and other stakeholders, the system of internal controls which management and the Board of Directors have established, the performance and selection of independent accountants, and the Company’s audit and financial reporting and risk management processes for compliance with laws and regulations. The Committee also has the primary responsibility for recommending the appointment, re-appointment, and removal of the external auditor.
The Committee operates under a written Audit Committee Charter to conform to Securities and Exchange Commission Memorandum Circular No. 4 Series of 2012 (SEC Circular No. 4), specifically on the guidelines in assessing the performance of the Audit Committee of Companies listed in the Philippine Stock Exchange. Your Committee accomplishes self-assessment on its performance based on the requirement of said circular. The results are subsequently discussed.
As of December 31, 2014, the Committee has three members: all independent directors. Your Chairman attended the last three annual general stockholders’ meetings.
The Committee had three meetings in 2014, which included separate executive sessions of the Committee with the audit engagement partner of the independent registered public accounting firm, the internal auditors and management relative to the review and approval of the independent auditor’s plan and the audited financial statements for 2014. Other meetings relate to the regulatory periodic financial filings and the conduct of the Audit Committee Members’ Performance Assessment.
In accordance with its Charter, the Committee reviewed and approved the independent auditor’s plan for the audit of Lopez Holdings’ 2014 financial statements, including the major issues related to the audit of the financial statements as presented by the audit engagement partner.
The Committee reviewed the Company’s annual audited financial statements and related disclosures, including (a) the quality as well as acceptability of the accounting principles applied in the financial statements and (b) new accounting standards, significant estimates, judgments, uncertainties and accounting policies relating to significant financial statement items, and discussed them with the independent auditors and with management, which has the primary responsibility for the financial statements.
The Company’s independent auditor is responsible for expressing an opinion on the conformity of the company’s audited financial statements with Philippine Financial Reporting Standards.
After diligent review and annual evaluation, the Committee:
• finds that the internal controls/risk management systems of the Company remain adequate;
• affirms that the audited financial statements are true and fairly present the performance of the Company; and
• endorses the reappointment of the current external auditor.
This report is respectfully submitted in behalf of the Committee of the Board, who likewise approved this report.
Cesar E. A. Virata
Chairman, Audit Committee