Many financial reports 'sub-standard'

Forty per cent of 2004 financial reports reviewed by the Securities Commission had shortcomings that needed to be addressed, the commission said today.

The commission reviewed the audited full-year financial reports of 40 companies with balance dates from 31 March to 31 July 2004. The review also covered prospectuses, substantial security holder information, and continuous disclosure notices.

Commission chairman Jane Diplock said there were few serious problems identified.

"However, the review indicates that a number of issuers need to do more to raise the standard of their financial reporting," she said

Fifteen companies have been asked to address specific shortcomings when preparing their next financial reports and one matter has been referred to the commission's enforcement staff.

Some of the matters of concern included: valuation of property, plant and equipment and intangibles; lack of actual versus prospective financial comparisons and explanation; undated financial statements; and unusual differences in the dates of reports.

The review also identified some instances of incompleteness and poor timing of continuous disclosure notices, and incompleteness and inaccuracy of substantial security holder disclosures.

The commission said it would follow up these issues with the companies and, where applicable with the NZX.

The 40 issuers reviewed were made up of 28 companies listed on the NZX; eight companies listed on the alternative exchange, the NZAX; and four companies with shares traded on the Unlisted securities market.

- NZPA