SEC gives Covid-hit firms FS extension


THE Securities and Exchange Commission is giving corporations affected by the outbreak of the coronavirus disease 2019 (Covid-19) until the end of June to file their annual report, more than two months  from the previous deadline.

Corporations whose preparation of financial statements or completion of statutory audits are not affected by Covid-19 are required to file their annual reports and annual financial statements for the year ended December 31, 2019 within the periods prescribed under existing rules and regulations.

“The new coronavirus disease, Covid-19, has posed specific challenges to some Philippine companies in complying with certain reportorial requirements,” SEC Chairman Emilio B. Aquino said.

The Bureau of Internal Revenue, however, is not extending its deadline of submission of financial statements, where the submission of  financial statements of all companies are based, on April 15. The filing period for the quarterly reports of publicly listed companies and registered issuers of securities for 2020 will also adjust, the SEC said.

The agency still has to decide on the matter.

As a rule, publicly listed companies must report on their financials within 45 days after the quarter.

“For one, the travel restrictions, suspension of business operations and other measures implemented to contain the spread of Covid-19 have kept companies, particularly those with operations in China and other affected territories, from gathering all information or documents necessary in the preparation and the subsequent audit of their annual financial statements,” the SEC said.

To request for more time to submit its reports, a publicly listed corporation is required to submit a written request to the SEC, through the Markets and Securities Regulation Department, at least five days before the deadline of filing.

The submission shall include a sworn certification signed by the company’s president and treasurer to confirm that its financial year ended December 31, 2019 and that it has significant business operations or subsidiaries in China and other affected territories, including the Philippines.

The corporation must confirm that the completion of statutory audit of its financial statements as of December 31, 2019 has been affected by travel restrictions, suspension of business operations and other measures imposed by authorities or by the corporation in response to the Covid-19 outbreak.

The company is  also required to submit a sworn certification by its external auditor confirming its operations in China and other affected territories, as well as the impact of the Covid-19 outbreak on the auditing of its financial statements, the SEC said.

Given the impact of the delayed release of the annual reports, the corporation must also submit to the SEC an indicative date for its annual stockholders’ meeting.

Meanwhile, the corporation must observe its disclosure obligations under  the Securities Regulation Code, and Philippine Stock Exchange’s Consolidated Listing and Disclosure Rules.

In the case of a non-publicly listed corporation, the written request should include sworn certifications signed by its president and treasurer, and by its external auditor.

“The SEC will continue to assess the impact of Covid-19 on the preparation of financial statements and on the completion of the statutory audits of companies. It may issue appropriate rules and regulations to address the concerns that may further arise,” the agency said.

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