As a show of disregard towards regulatory norms, a majority of the listed companies are least bothered about conducting annual general meetings and submitting their quarterly reports on time.
Among the 229 listed companies that had to submit their second quarter financials to the Securities Board of Nepal (Sebon), only 104 did so within time, while 60 companies submitted their reports after the deadline. Likewise, only 145 companies have conducted their AGMs in the stipulated time.
Only 23 among the 29 commercial banks, 39 among 89 development banks, 23 among finance companies, eight among 22 insurance companies, three hydropower companies, four manufacturing companies and one telecommunication company have submitted their financials on time.
The listed companies are required to submit their unaudited financial reports to Sebon within 30 days of the end of each quarter, that is mid-February, according to regulations. Furthermore, Sebon’s regulation requires listed companies to hold their AGMs within six months.
The movements of the capital market are very much dependent on information flow and the regulator has to make sure that companies are disseminating sensitive information to investors on time.
The listed companies comply with the regulations of their respective regulators such as Nepal Rastra Bank and Insurance Board but fail to follow Sebon’s requirements.
In the capital market dominated by financial institutions, there are 179 listed banks and financial institutions that need to report to the monetary authority of Nepal — Nepal Rastra Bank (NRB). These financial institutions always submit their financials within the specified time-period to the central bank, else NRB takes stringent action against them.
However, Sebon does not exercise its authority on the companies for failure to report on time.
For public companies, an AGM is the perfect platform for minority stakeholders allowing them to voice their opinions regarding the company’s decisions and workings. Companies are required to publish the audited financial report and detailed balance sheet including long-form audit reflecting the institutions’ actual health. The annual event also elects a new board of directors and is a forum to inform shareholders of future and previous activities.
“The late AGM means shareholders do not get adequate information regarding the companies they have invested in on time,” pointed out acting president of Nepal Investors’ Forum Raj Kumar Timilsina. “The stale information and statistics are of no use to investors in investment related decision making,” he added.
Moreover, there is an absence of uniform regulation and the industry regulations clash with the ones spelt out by the capital market regulator. Although Sebon’s regulation requires listed companies to hold the AGM within six months, NRB’s regulations require the financial institutions to conduct the AGM within five months of the completion of the fiscal year. However, if they place a request for extension of deadline, the central bank allows them three more months.
In addition, the Insurance Board (IB) — insurance sector regulator — requires insurance companies to submit their audited balance sheet to IB within 10 months from the date expiration of each fiscal year. IB then examines and approves the audited balance sheet and the companies
have to hold an AGM within 60 days from the day the balance sheet is approved.
source:the himalayan times,23 march 2014
LINK
Among the 229 listed companies that had to submit their second quarter financials to the Securities Board of Nepal (Sebon), only 104 did so within time, while 60 companies submitted their reports after the deadline. Likewise, only 145 companies have conducted their AGMs in the stipulated time.
Only 23 among the 29 commercial banks, 39 among 89 development banks, 23 among finance companies, eight among 22 insurance companies, three hydropower companies, four manufacturing companies and one telecommunication company have submitted their financials on time.
The listed companies are required to submit their unaudited financial reports to Sebon within 30 days of the end of each quarter, that is mid-February, according to regulations. Furthermore, Sebon’s regulation requires listed companies to hold their AGMs within six months.
The movements of the capital market are very much dependent on information flow and the regulator has to make sure that companies are disseminating sensitive information to investors on time.
The listed companies comply with the regulations of their respective regulators such as Nepal Rastra Bank and Insurance Board but fail to follow Sebon’s requirements.
In the capital market dominated by financial institutions, there are 179 listed banks and financial institutions that need to report to the monetary authority of Nepal — Nepal Rastra Bank (NRB). These financial institutions always submit their financials within the specified time-period to the central bank, else NRB takes stringent action against them.
However, Sebon does not exercise its authority on the companies for failure to report on time.
For public companies, an AGM is the perfect platform for minority stakeholders allowing them to voice their opinions regarding the company’s decisions and workings. Companies are required to publish the audited financial report and detailed balance sheet including long-form audit reflecting the institutions’ actual health. The annual event also elects a new board of directors and is a forum to inform shareholders of future and previous activities.
“The late AGM means shareholders do not get adequate information regarding the companies they have invested in on time,” pointed out acting president of Nepal Investors’ Forum Raj Kumar Timilsina. “The stale information and statistics are of no use to investors in investment related decision making,” he added.
Moreover, there is an absence of uniform regulation and the industry regulations clash with the ones spelt out by the capital market regulator. Although Sebon’s regulation requires listed companies to hold the AGM within six months, NRB’s regulations require the financial institutions to conduct the AGM within five months of the completion of the fiscal year. However, if they place a request for extension of deadline, the central bank allows them three more months.
In addition, the Insurance Board (IB) — insurance sector regulator — requires insurance companies to submit their audited balance sheet to IB within 10 months from the date expiration of each fiscal year. IB then examines and approves the audited balance sheet and the companies
have to hold an AGM within 60 days from the day the balance sheet is approved.
source:the himalayan times,23 march 2014
LINK
Comments
Post a Comment