The Philippines is still struggling to win the battle against Covid-19. After almost two (2) months of putting the whole country under quarantine measures, the government has taken gradual steps to open the essential businesses as well as government offices to cope with the declining economy.
Philippine Securities and Exchange Commission (SEC) together with other government offices has extended the submission of reports such as the Audited Financial Statements (AFS) to ensure the overall welfare of the public during this challenging pandemic period. With the lifting of the Enhanced Community Quarantine (ECQ) on May 16, 2020, the SEC through Memorandum Circular (MC) No. 18 Series of 2020 issued last May 11, 2020 provided guidelines on the manner and deadlines of submission of the AFS.
What is the highlight of MC 18-2020?
To protect SEC employees from Covid-19, all satellite offices in the Philippines shall be temporarily closed for receiving reports. AFS should be filed through SEC Express Nationwide Submission (SENS) and shall be delivered to the SEC Head Office, Ground Floor, Secretariat Building, PICC Complex, Pasay City BY THE PHILPOST and/or ANY CHOSEN COURIER. The accustomed way of face to face submission and stamping of the AFS in SEC offices has been eliminated through this circular to avoid physical contacts.
How to file through SENS?
- Filer download the SEC Express Nationwide Submission Checklist and Undertaking Form (SENS Form) for accomplishment and signature.
- Attach checklist with a signed undertaking to each report submitted.
- Enclose the documents (AFS and related required attachments) and documents in item #2 in an envelope.
- Proceed to the chosen courier provider for the offsite submission and pay the service fee and courier fee.
- Wait for the delivery of the receiving copy based on the agreed timeline with the courier.
Who are covered by SEC MC 18-2020?
The said guidelines should be followed by the following Philippine registered entities:
- Branch Offices;
- Representative Offices;
- Regional Headquarters; and,
- Regional Operating Headquarters.
When should filing be made?
All SEC registered entities may file the AFS on or before June 29, 2020. However, starting June 29, 2020 Philippine entities shall file their AFS based on the last numerical digit or license number on the following schedule:
- June 29,30,July 1,2,3,6,7,8,9 and 10 : 1 and 2
- July 13,14,15,16,17 : 3 and 4
- July 20,21,22,23,24 : 5 and 6
- July 27, 28,29,30: 7 and 8
- August 3,4,5,6,7 : 9 and 10
What happens when entities failed to file on the above dates prescribed?
All SEC registered entities in the Philippines who fail to file the AFS in accordance with the schedule above may file starting August 10, 2020 subject to the prescribed penalties which shall be computed from the last day of filing schedule stated.
What are the required documents to accompany the Audited Financial Statements?
- SEC prescribed cover sheet
- Statement of Management’s Responsibilities (SMR) for Financial Statements based on the format provided on SRC Rule 68, as amended
- BIR stamped received or Authorized Agent Bank (AAB) stamped received annual financial statements
- Independent Auditor’s Report or duly Notarized Treasurer’s Certification
Independent Auditor’s Report is attached if:
a. A stock corporation has total assets or total liabilities of Six Hundred Thousand Pesos (P600,000) or more as prescribed under the Revised Corporation Code of the Philippines (Revised Corporation Code) and any of its subsequent revision or such amount as may be subsequently prescribed;
b. A non-stock corporation has total assets or total liabilities of Six Hundred Thousand Pesos (P600,000) or more as prescribed under the Revised Corporation Code and any of its subsequent revisions or such amount as may be subsequently prescribed;
c. A branch office/representative office of stock foreign corporations has assigned capital in the equivalent amount of One Million Pesos (P1 Million) or more;
d. A branch office/representative office of non-stock foreign corporations has total assets in the equivalent amount of One Million Pesos (P1 Million) or more; and,
e. A regional operating headquarters of foreign corporations with total revenues in the equivalent amount of One Million Pesos (P1 Million) or more.
Notarized Treasurers Certification is attached if the SEC registered entity does not meet the threshold stated.