Stock Exchange set to penalise Coys over late submission of 2015 financials

Except for the companies whose results need clarification before the Financial Reporting Council of Nigeria (FRC), the axe of the Nigerian Stock Exchange (NSE) may be dangling over the heads of 100 listed firms which failed to submit their full year 2015 audited results by the March 31 deadline.

The implication of this is that more than half of the companies, which are yet to comply, will be making provision of N100,000 per day for the first 90 days of non-compliance which started last week Friday.

Also, N200,000 per day will be the fine for the next 90 days of non-compliance and N400,000 per day thereafter, until the date of submission.

As at last Friday, only about 40 companies’ performance scorecards, out of the over 184 were released into the market, while the market awaits results of many other listed corporates.

A market source told INVESTOR that the Exchange may be giving a grace period for some companies whose audited full year results were not submitted as at that date, due to regulatory delays –like the Financial Reporting Council (FRC) approval.

The Financial Reporting Council provision requires auditors of public companies to sign off their full year account statements, as well as state their registration numbers.

Aside these, the revised draft rules on financial disclosure, as approved by the National Council of the Exchange, provides that audited year-end accounts must be filed with the Exchange not later than 90 days after the relevant year-end.

It also provides that the results must be sent to all shareholders, or published in at least two national daily newspapers and posted on the company’s website with the web address disclosed in the newspaper publications.

Also, the rules provide that evidence of the audited full year financial disclosure publication must be filed with the Exchange, within two business days of the publication.

Many of these companies had rushed to beat the March 31 deadline, knowing very well that sanctions of that magnitude could deplete returns accruable to shareholders.

There is an agreement between the Nigerian Stock Exchange and Financial Reporting Council (FRC) which also serves as a window of grace. “There will be a kind of consideration (grace period) for some companies that fall into this category –that had earlier informed the NSE,” our source said.

“If our rules say that you must submit your audited year end results by March 31, for companies that have not done so, what it implies is that sanctions apply,” he added.

The rules for filing of accounts and treatment of default filing at the NSE state that no later than two business days after the deadline for filing accounts (quarterly or year-end) has passed, the exchange shall send a filing deficiency notification to every issuer that has not filed its accounts and each affected issuer’s name shall be published in the exchange’s x-compliance report as operating “below listing standard”.

In addition, the Issuer’s securities’ symbol published on any of the Exchange’s systems or media shall be annotated with the words, Below Listing Standard (BLS) or any other sign to indicate that it has failed to submit its accounts timely, for as long as the issuer fails to file its accounts.

Within three calendar days of the date of the Filing Deficiency Notification, the Issuer shall be required to take all of the following steps: Issue a press release, of not less than half a page, in at least two national daily newspapers and posted on the Issuer’s website disclosing the following: that the relevant accounts have not been filed by the due date; a detailed explanation of the reason(s) for the delay; and the anticipated filing date; or its inability to indicate the anticipated filing date, and reasons for the inability to indicate the anticipated filing date.  Evidence of publication must be filed with the Exchange within two business days of the publication.