Quoted companies that have not submitted their yearly reports and financial statements must do so to the Nigerian Stock Exchange (NSE) in the next five days to avoid poor corporate governance tag and sanctions that may range from N100,000 to about N100 million.
Regulatory filing calendar of the NSE at the weekend indicated that most of the quoted companies are required to submit their reports and accounts by the close of work on Friday, March 31.
Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period.The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.
Most quoted companies, including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of annual report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.
The NSE, in a response to enquiries by The Nation, at the weekend indicated that the March 31 deadline remained unchanged for quoted companies.
“The Exchange is not granting general extension to issuers to file their audited accounts,” the NSE stated.
Authorities at the Exchange, however, said they would consider request for extension of the deadline by companies with peculiar challenges in line with NSE’s rules.
NSE’s Rule 2.1.1 for Filing of Accounts and Treatment of Default Filing says: “Where an issuer has a reasonable belief that it will not be able to file its accounts by the relevant due date, the issuer may before the due date submit an application for an extension of time, supported by compelling reasons and evidence in support of its inability to file its accounts by the due date”.
Official tally provided by the Exchange at the weekend showed that more than 95 companies, more than 70 per cent of the relevant companies, are expected to rush through the five-day deadline to submit their earnings report.
Less than 30 per cent of quoted companies have submitted their annual reports by the weekend. Those that have submitted included Access Bank, Africa Prudential Registrar, Continental Reinsurance, Dangote Cement, Forte Oil, Guaranty Trust Bank, Nestle Nigeria, Nigerian Breweries, Total Nigeria, Transcorp Hotel, Transnational Corporation of Nigeria, United Capital, Zenith Bank, Unilever Nigeria, Stanbic IBTC Holdings, Lafarge Africa, Cadbury Nigeria.
However, few companies including FBN Holdings Plc, International Energy Insurance and RT Briscoe have been granted waiver to extend their submission period by a month. Several companies have also indicated they have held the concluding board meeting on the report and may submit their reports within the next five days.
NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. The Exchange had on January 1, 2017 launched its new sanction regime for delay in submission of companies’ results. Under the new sanction regime, companies may pay fines that range from N100, 000 to more than N100 million as penalties for delay in the submission of their corporate earnings reports.
Companies that also delayed their financial statements and accounts face threats of suspension and delisting in addition to the monetary fines.
Under the sanction regime, sanctions for delay in filing of corporate earnings report for certain inveterate companies are within N5 million. Many companies have been known to delay the submission of their corporate earnings reports for upwards of six to 12 months and beyond. The new rules seek to strengthen existing rules on timely corporate earnings disclosure and set out clear processes for proper disclosure as well as stronger deterrence to non-compliance.
Under the new rules, quoted companies will be required to file their unaudited quarterly accounts with the NSE not later than 30 calendar days after the relevant quarter, and publish it within five business days after the date of filing, in at least two national daily newspapers, and post it on the company’s website, with the web address disclosed in the newspaper publication. Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the newspaper publication. Where the company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter.