The Nigerian Stock Exchange Deadline Report

Business update as ahead of tomorrow’s deadline for quoted companies to submit their audited reports and accounts for the past business year, several companies are making last-minute efforts to meet the deadline and avoid the poor corporate governance tag and sanction of the Nigerian Stock Exchange (NSE).

Post-listing rules at the NSE require quoted companies to submit their earnings reports, not

later than three months after the expiration of the 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. The business year thus terminates on December 31.

NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year ended December 31, 2015 is tomorrow, Thursday, March 31.

The Nation’s check at the close of the market at the yesterday indicated that less than 30 per cent of affected companies had submitted their earnings reports. Companies that have submitted their annual report included Forte Oil, Nigerian Breweries, Nestle Nigeria, Unilever Nigeria, GlaxoSmithKline Consumer Nigeria, Dangote Sugar Refinery, Access Bank, Zenith Bank International, Guaranty Trust Bank, United Bank for Africa (UBA), Sterling Bank, AXA Mansard Insurance, Africa Prudential Registrars, United Capital, Dangote Cement, Lafarge Africa, Ashaka Cement, Seplat Petroleum Development Company and Transcorp Hotels.

Market sources said several companies were finalising arrangements to submit their reports before the close of work tomorrow to beat the close-of-business deadline.

Notwithstanding the expected rush tomorrow, there are indications that some 70 per cent of the affected companies may miss the earnings deadline.

Market sources said they expected the momentum of submission to be high between today and tomorrow, since compliance within deadline is generally regarded as a measure of good corporate governance. Besides, companies that failed to meet the earnings deadline will also be sanctioned by the Exchange. They are liable to monetary fines and naming-and-shaming publication of their names.

However, the NSE can grant waiver and extension to companies due to special consideration such as companies awaiting regulatory approval.

A source in the know at the NSE said some companies have filed for extension of the earnings deadline to enable them finalise their annual report.

Stanbic IBTC Holdings at the weekend indicated it has applied for extension of the earnings deadline to enable the company complete the audit of its accounts.

NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. Under the corporate governance and rules compliance assessment report known as X-Compliance Report, NSE identified four different kinds of tags or symbols to alert investors about the status of each quoted company. These include below listings standard (BLS), the first degree alert level indicating a company that has not complied with post listing rules such as late submission of financial statements, unauthorised publication, management failures among others.

Also, financial services companies such as bank and insurance companies awaiting regulatory approval will carry the appropriate symbol of awaiting regulatory approval (ARA). Companies that are undergoing a capital reconstruction exercise including supplementary issue, share buyback, split, share reconstruction among others will be tagged with capital reconstruction exercise (CRE) while companies that have indicated that they will be delisting or companies that are being delisted at the instance of the regulator would be flagged with delisting in process (DIP) symbol.