Draft Memorandum Circular on Annual Corporate Governance Report for Public Companies and Registered Issuers

June 25, 2021 SEC NOTICE TO : All Interested Parties SUBJECT : Draft Memorandum Circular on Annual Corporate Governance Report for Public Companies and Registered Issuers The public is invited to submit their comments, feedbacks and inputs on the draft Memorandum Circular on Annual Corporate Governance Report for Public Companies and Registered Issuers on or before 09 July 2021 (Friday) . It is requested that comments/inputs be emailed to [emailprotected] using the template provided. Issued on June 25, 2021. ATTACHMENTS SEC MEMORANDUM CIRCULAR NO. ___ Series of 2021 TO : PUBLIC COMPANIES AND REGISTERED ISSUERS SUBJECT : ANNUAL CORPORATE GOVERNANCE REPORT (SEC FORM-ACGR (FOR PC/RI) To facilitate the disclosure of public companies' (PCs) and registered issuers' (RIs) compliance/non-compliance with the recommendations provided under SEC Memorandum Circular No. 24, Series of 2019 (Code of Corporate Governance for PCs and RIs), the Commission, pursuant to its regulatory power under Section 179 (d) of Republic Act No. 11232 otherwise known as the Revised Corporation Code of the Philippines, mandates all covered companies to submit an Annual Corporate Governance Report (ACGR) subject to the following guidelines: 1. Three (3) copies of a fully accomplished SEC Form-ACGR (for PC/RI) shall be filed with the SEC Head Office or any of its Extension Offices, on or before May 30 of the following year for every year that the company qualifies as a PC or RI . The ACGR shall cover all relevant information from January to December of the given year regardless of registration date. The ACGR for the covered period January to December 2021 shall be due for submission on or before 30 May 2022 . 2. At least one (1) complete copy of the ACGR filed with the Commission shall be duly notarized and shall bear original and manual signatures of the following required signatories: a. Chairman of the Board; b. Chief Executive Officer or President; c. All Independent Directors; d. Compliance Officer; and e. Corporate Secretary. 3. Newly-registered companies shall be follow the guidelines below: a. PCs registered or have qualified as such from July to December of a given year shall be allowed to indicate "newly-registered" in the Explanation portion of the ACGR for their first submission. The same shall not be considered as sufficient explanation if the PC fails to indicate the date of its registration/when it has qualified as such. b. RIs registered from July to December of a given year shall be allowed to indicate "newly-registered" in the Explanation portion of the ACGR for their first submission. The same shall not be considered as sufficient explanation if the RI fails to indicate the date of the effectivity of its Registration Statement. c. In addition to the submission of the ACGR, newly-registered PCs and RIs must file their Manual on Corporate Governance in accordance with SEC Memorandum Circular No. 24, Series of 2019 and SEC Memorandum Circular No. 19, Series of 2020. 4. The imposable penalties are as follows: VIOLATION BASIC PENALTY MONTHLY PENALTY Non/Late Submission Php20,000.00 Php2,000.00 Disclosure(s) a. Incomplete ( i.e. , no explanation provided; no alternative practices to achieve over-all principle) Php10,000.00 Php1,000.00 b. Misrepresentation/Misinformation Php50,000.00 Php5,000.00 Signatory(ies) a. Incomplete Php5,000.00 Php500.00 b. Incorrect The monthly penalty shall continue to accrue until the company has complied with the requirement. 5. The General Instructions in answering the ACGR-PCs/RIs are indicated in the attached SEC Form-ACGR . 6. PCs and RIs that are listed in the Philippine Stock Exchange are excluded from the coverage of this Memorandum Circular. Publicly-listed PCs and RIs shall instead submit an Integrated Annual Corporate Governance Report, in accordance with SEC Memorandum Circular No. 15, Series of 2017. 7. PCs and RIs shall no longer be required to comply with Sections 15 and 16 of SEC Memorandum Circular No. 3, Series of 2007 for the covered period January-December 2021. Orders, Issuances and Circulars which are inconsistent with the provisions of this Circular are hereby repealed accordingly. This Memorandum Circular shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation. Pasay City, Philippines, _______________ 2021. For the Commission: EMILIO B. AQUINO Chairperson SEC Form-ACGR (for PC/RI) Draft Memorandum Circular on ACGR for PCs and RIs