MORNBFI Vol. 1 - Planters Development Bank

§§ 4190Q - 4190Q.408.12.31adjusting entries reconciling the balancesin the financial statements for prudentialreporting with that in the audited annualfinancial statements.QBs as well as external auditors shallstrictly observe the requirements in thesubmission of the FAR and reports requiredto be submitted under Appendix Q-33.The reports and certifications of QBs,schedules and attachments required underthis Subsec. shall be considered CategoryB reports, delayed submission of whichshall be subject to the penalties underSubsec. 4192.Q.3.b.II.(As amended by Circular Nos. 554 dated 22 December 2006 and540 dated 09 August 2006 )§ 4190Q.1 (Reserved)§ 4190Q.2 (2008 - 4172Q.1) Postingof audited financial statements. QBs shallpost in conspicuous places in their headoffices, all their branches and other offices,as well as in their respective web-sites,their latest FAR.(As amended by Circular No. 540 dated 9 August 2006)§ 4190Q.3 (2008 - 4172Q.2)Disclosure of external auditor’s adversefindings to the Bangko Sentral; sanctiona. Findings to be disclosed. QBs shallrequire their external auditors to report tothe BSP any matter adversely affecting thecondition or soundness of the bank, suchas, but not limited to:(1) Any serious irregularity, includingthose involving fraud or dishonesty, thatmay jeopardize the interest of creditors;(2) Losses incurred which substantiallyreduce the capital funds of the QB; and(3) Inability of the auditor to confirmthat the claims of creditors are still coveredby the QB’s assets.The disclosure of information by theexternal auditor to the BSP shall not be aground for civil, criminal or disciplinaryproceedings against the former.QB management shall be presentduring discussions or at least be informedof the adverse findings in order to preservethe concerns of the supervisory authorityand external auditors regarding theconfidentiality of information.b. Sanction. The auditing firm(s) shallbe blacklisted by the Monetary Board fora period as the Board may deemappropriate for their failure to perform theirduty of reporting to the BSP any matteradversely affecting the condition orsoundness of the QB. QBs shall not beallowed to engage the services of theblacklisted auditing firm.§ 4190Q.4 (2008 - 4172Q.3) Disclosurerequirement in the notes to the auditedfinancial statements. QBs shall requiretheir external auditors to include thefollowing additional information in thenotes to financial statements:a. Basic quantitative indicators offinancial performance such as return onaverage equity, return on average assetsand net interest margin;b. Capital-to-risk assets ratio underSec. 4115Q;c. Concentration of credit as toindustry/economic sector whereconcentration is said to exist when total loanexposures to a particular industry/economic sector exceeds thirty percent(30%) of total loan portfolio (TLP);d. Breakdown of total loans as tosecured and unsecured and breakdownof secured loans as to type of security;e. Total outstanding loans to QB’sDOSRI, percent of DOSRI loans to totalloan portfolio, percent of unsecured DOSRIloans to total DOSRI loans, percent of pastdue DOSRI loans to total DOSRI loans andpercent of non-performing DOSRI loansto total DOSRI loans;f. Nature and amount ofcontingencies and commitments arisingfrom off-balance sheet items [include directQ Regulations Manual of Regulations for Non-Bank Financial InstitutionsPart I - Page 56