Submission of Audited Financial Statements and Annual Report of Management to Stockholders

MEMORANDUM Series of 2004

To: All Banks and Non-Bank Financial Institutions with Quasi-Banking Functions (NBQBs)

Subject : Submission of Audited Financial Statements and Annual Report of Management to Stockholders

Subsections X164.1 and X426.2 of the Manual of Regulations for Banks (MORB) and Section 4172Q of the Manual of Regulations for Non-Bank Financial (MORNBFI) require that an annual financial audit af the bank/non-bank with quasi-banking functions [Bank/NBQB Proper (Regular and FCDU) and the Trust Department] be conducted by an external independent auditor not later than thirty (30) calendar days after the close of the calendar year or the fiscal year adopted by the bank. Reports of such audits shall be made and submitted to the Board of directors and the appropriate supervising and examining department of the BSP not later than ninety (90) calendar days after the start of such audit.

In consonance with the aforementioned regulations, banks and NBQBs are to be guided with the checklist of Bangko Sentral requirements in the submission of AFS and Annual Report as shown in Annex A.

Delayed submission of certification of the external auditor, schedules/attachments and amendments in the required reports shall be considered late reporting, subject to the penalties under Subsection X162.2b, MORB and Subsection 4162Q3.b, MORNBFf, as follows:

Type of Bank

Penalty/Business Day

Universal/Commercial Bank

P 240.00

Thrift Bank

P 120.00

Rural Bank

P   60.00

NBQB

P 120.00

This Memorandum shall tak,e effect after fifteen (15) days following its publication either in the Qfficial Gazette or in a newspaper of general circulation and shall apply to audited financial statements and annual report for the calendar year ended 31 December 2004 or the fiscal year ended after the effectivity of this Memorandum.

ALBERTO V. REYES Deputy Governor