By Kingsley Ighomwenghian
Faced with having to sanction 108 companies listed on its main board, for not meeting with the deadline for quoted companies to submit their financials at the year of their financial year, the management of the Nigerian Stock Exchange (NSE), last Thursday, announced an extension of filing dates for the companies.
According to the post-listing rules quoted firms agree to uphold, they have a 90-day period to present their audited account to investors through the exchange at the year of each financial year, in line with appendix 111 of the listing rules.
Available data on the NSE website on Thursday when the market closed for the Easter break, shows that at the close of trading on that date, only 10, or 8.47 per cent of the 118 quoted companies with December 31, as financial year had submitted their results.
They include early filers such as Pharma-Deko; Nestle Nigeria, which has currently has the highest price per unit on the bourse; Nigerian Breweries, the largest by market capitalisation with a worth of N1.233 trillion, behind Dangote Cement (N2.543 trillion), whose financials are being expected.
Other companies that have filed their audited accounts at the close of trading on Thursday were: Cement Company of Northern Nigeria, Forte Oil, Ecobank Transnational Incorporated, Cadbury Nigeria, Julius Berger, and Courteville Business Solutions.
This means that only one of the NSE’s top 30 companies by capitalisation, met the requirement.
Usually, companies whose report miss the deadline, should have been tagged “BLS” (Below Listing Standard) by the NSE from when trading resumes tomorrow, for not meeting the minimum listing standard in terms of timely disclosure of their annual financial performance.
The NSE, had in its Thursday statement cited challenges experienced by quoted companies who now have to report to more regulators, and to enable them meet their regulatory periodic obligations, the NSE management.
A statement by Ms. Tinu Awe, General Manager, Legal and Regulation Division of The NSE, said “the new announcement offers a fresh assurance to businesses and advisors affected by the early adoption of International Financial Reporting Standards (IFRS) and levels of regulatory approvals which now includes Financial Reporting Council (FRC).
“The Exchange is in consultation with FRC and other Primary Regulators. While we believe that the timely disclosure of financial information is critical to stakeholders in the capital market as well as investors, the challenges which the entities are facing are germane”.
Awe assured that during this period, the NSE will not apply the tag “Below Listings Standard” (BLS) beside the names of entities on the X-Compliance Report which is published on the website.
This is in addition to the exchange forbearing from imposing sanctions in terms of financial penalties.
It will be recalled that the Nigerian bourse introduced the X-Compliance Report in mid-2011 as a transparency initiative of The Exchange designed to maintain market integrity and protect the investors by providing compliance related information on all listed companies.
Companies listed on The Exchange are required to adhere to high disclosure standards which are prescribed in the Listing Rules of The NSE. Financial information, which is periodic disclosure and on-going material events disclosure are also to be released to The Exchange in a timely manner to enable it efficiently perform its function of maintaining an orderly market.