THE Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX) have said listed firms can now submit unaudited half-year results starting January 1, 2024, amid delays by companies to submit audited financials.
Previously, companies were required to submit their audited results to ZSE and VFEX which saw some firms requesting extensions because auditors had not completed their work.
“Issuers are now required to submit their unaudited half-year interim reports directly to the VFEX without the need for review by external auditors,” the VFEX said, in a statement on Monday.
“However, if an issuer elects to have their half-year interim reports reviewed by external auditors in accordance with section 37(1), they must adhere to the requirements prescribed in that section. This waiver will remain in effect for a period of two years from the effective date."
VFEX is a foreign currency-only bourse.
Similarly, ZSE said effective January 1, 2024, the requirement for review by the listed company's external auditors of unaudited half-year interim reports had been waived.
“Issuers are now required to submit their unaudited half-year interim reports directly to the ZSE without the need for review by external auditors,” ZSE said, in a separate statement on Monday.
“However, if an issuer elects to have their half-year interim reports reviewed by external auditors in accordance with section 38 (1)(a), they must adhere to the requirements prescribed in that section. This waiver will remain in effect for a period of two years from the effective date.”
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Section 37(1) refers to a section found in Statutory Instrument (SI) 134 of 2019, titled “Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules 2019”.
Under this section, it states:
“Where an issuer fails to publish interim financial statements by the day following the due date of issue of the listed company’s interim or preliminary report, the issuer will be granted a period of one month from the due date to issue its interim or preliminary report, failing which the company’s listing will be suspended in terms of section 7 (unilateral suspension).”
Under 37(2), it states:
“Failing compliance within the time stated in subsection (1), the ZSE will publish a Press announcement informing shareholders that the listed company has not issued its interim or preliminary report and cautioning security holders that the listing of the company’s securities is under risk of suspension and possible termination.”
On the date of publication of the announcement, in terms of subsection (2), the next section states that the issuer’s listing will be annotated on the ZSE Data Portal to indicate that “it has failed to submit its interim, final or preliminary report on time”.
Meanwhile, section 38(1)(a) of SI 134 of 2019 states that all unaudited — half-year interim reports and preliminary reports must be reviewed by the listed company’s external auditors.
Delays in publishing financial results have been associated with several different reasons.
These include the company’s inability to finish the report on time typically caused by audits taking longer than anticipated, inexperienced officers, or the company losing all or part of its financial data.
In recent years, delays in publishing results timeously also have to do with the inflationary environment as firms need to constantly rejig their results-based inflation in line with international reporting regulations.
Financial results that are published late can affect the value of a company’s shares.
In Zimbabwe, listed companies typically file financials for their half and full year periods as well as trading updates based on their quarterly performance.
