SEC Memorandum Circular No. 13 Series of 2021: Annual Corporate Governance Report

SEC MEMORANDUM CIRCULAR NO. ______ Series of 2021 TO : PUBLIC COMPANIES AND REGISTERED ISSUERS SUBJECT : ANNUAL CORPORATE GOVERNANCE REPORT

To facilitate the disclosure of public companies’ (PCs) and registered issuers’ (RIs) compliance or noncompliance with the recommendations provided under SEC Memorandum Circular No. 24, Series of 2019 (Code of Corporate Governance for PCs and RIs), the Securities and Exchange Commission (SEC or 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. Two (2) copies of a fully accomplished ACGR shall be submitted on or before June 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 first submission of the ACGR shall cover the period of January – December 2021.
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. Chairperson 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 subject to the following: a. PCs, which were registered or has 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 its first submission. The same shall not be considered as sufficient explanation if the PC fails to indicate the date of its registration or 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 its 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 13 Published: Philippine Daily Inquirer, 4 January 2022 Philippine Star, 4 January 2022 Filed with UP Law Center: 3 January 2022

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 shall be 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 and SEC Memorandum Circular No. 36, Series of 2020. 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, _____ December 2021. For the Commission: EMILIO B. AQUINO Chairperson 31