Rules Prescribing the Penalties for Non-Filing or Late Filing of Annual Financial Statements (As Amended)

April 24, 1970 RULES PRESCRIBING THE PENALTIES FOR NON-FILING OR LATE FILING OF ANNUAL FINANCIAL STATEMENTS (AS AMENDED) Under and by virtue of the powers vested in this Commission under existing laws, particularly Section 1(b) of Republic Act No. 1143, the following schedule of fines for non-filing or late filing of annual financial statements required under the "Rules Requiring the Keeping of Accounting Records and Filing of Annual Financial Statements by Stock Corporation", is hereby promulgated: llcd * I. For non-filing or late filing within the prescribed period as specified hereunder in III (A and B) of annual financial statements of corporations whose securities are not registered under the Securities Act: A. First violation Fine of P25.00 and an additional P10.00 per day for each day of default. B. Second violation Fine of P50.00 and an additional P20.00 per day for each day of default. C. Third and subsequent violations . Fine of P100.00 each and an additional P30.00 per day for each day of default. * II. For non-filing or late filing within the prescribed period of annual financial statements of corporations whose securities are registered under the Securities Act: A. First violation . Fine of P50.00 and an additional P20.00 per day for each day of default. B. Second violation . Fine of P100.00 and an additional P40.00 per day for each day of default. C. Third violation . fine of P200.00, and an additional P60.00 per day for each day of default. ** III. The deadlines for the filing with the Commission of the annual financial statements by corporations are as follows: A. For corporations whose securities are not registered under the Revised Securities Act one hundred twenty (120) days from the end of the Fiscal Year of the corporation. A copy of the annual financial statements, duly stamped "Received" by the Bureau of Internal Revenue (BIR), must also be submitted. B. For corporations whose securities are registered under the Revised Securities Act including commercial paper issuers one hundred five (105) days from the end of the fiscal year of the corporation. In additional, written consent by the corporation allowing the SEC to obtain a copy of the annual financial statements filed with the Bureau of Internal Revenue (BIR) must be submitted. C. For securities brokers sixty (600 days from the end of the fiscal year of the corporation. IV. An application for extension of time of not exceeding thirty (30) days to file the annual financial statements may be entertained if presented before the due date, and upon payment of a compromise penalty of P50.00 for non-listed securities, and P100.00 for listed issues. V. SEC Memorandum Circular No. 2, dated March 19, 1962, is hereby repealed. prcd VI. The foregoing rules shall take effect immediately after the publication thereof in the Official Gazette and in one newspaper of general circulation. (SGD.) ARCADIO E. YABYABIN Deputy Securities and Exchange Commissioner Approved: April 27, 1970 (SGD.) ERNESTO M. MACEDA Secretary of Commerce and Industry Footnotes * Revised by SEC Memorandum Circular No. 4 (Monitoring Series 1986) dated March 26, 1986 re: Revised Scale of Fines, pp. 352-357. ** As amended on July 9, 1982. ATTACHMENT SEC CIRCULAR NO. 2 TO : All Corporations Required to File Financial Statements SUBJECT : Issuance of Confirmation Receipt and Deficiency Report for Acceptable and Non-Acceptable Financial Statements, respectively. It has been observed that certain financial reports filed with this Commission in compliance with existing rules are so materially deficient that the Financial Statement negates the purpose of its filing. In order to curb such practice and to enable this Commission and the general public to properly evaluate the financial condition and operating results of a corporation, the following procedures are hereby adopted: 1. Financial Statements submitted to this Office shall be time stamped to indicate actual receipt only. A confirmation receipt shall be issued by this Commission after a financial statement has been reviewed and found to be in substantial compliance with generally accepted principles of accounting. Only after a confirmation receipt has been issued shall a financial report be considered filed in compliance with the rules, which shall retroact to the date of actual receipt. 2. In cases where deficiencies are noted, the corporation jointly with its external auditors shall be notified in writing through an Examiner's Deficiency Report, a copy of which shall be furnished the company. Such deficiencies in audit standards must be corrected and a supplementary report on the additional audit procedures taken, shall be submitted within a period of thirty (30) days from receipt of the deficiency report. For this purpose, the complete mailing address of the corporation and its external auditors should be indicated in the financial report. 3. All audit reports accompanying financial statements should adhere strictly to STANDARDS OF REPORTING as stated in generally accepted AUDITING STANDARDS. 4. Failure on the part of the corporation to submit the supplementary report as corrected together with all supplementary notes thereto, would subject it to the penalties provided in the rules as if no financial report was actually received. For strict compliance of all concerned. Manila, Philippines, February 19, 1973. ARCADIO E. YABYABIN Securities and Exchange Commissioner