Disclosure standards upheld

AUCKLAND: NZXlisted companies maintained high disclosure standards while the NZX and the Financial Markets Authority cut them some slack to recognise the impact Covid19 would have on preparing their accounts, PwC’s chief risk officer, Karen Shires, says.

The exchange gave companies a onemonth extension to report results as the country adopted lockdowns and border closures to try to halt the spread of the pandemic.

Equity and debt issuers were given an additional 30 days to prepare and release results announcements and an additional two months to prepare and release annual reports.

The NZX also temporarily relaxed the rules around capitalraisings to enable entities to raise funds quickly

— generally from wholesale or institutional investors.

Ms Shires said that a PwC analysis on the impact of Covid on those stocks with March and May balance dates showed high standards of disclosure were applied.

Most companies who were recipients of the Government’s Covid19 wage subsidy had treated it as ‘‘other income’’ and Ms Shires said all had clearly articulated the role the subsidy had played.

‘‘It’s true that some companies’ profits have been boosted by the wage subsidy,’’ she said.

PwC tracked 14 NZX companies with March or May balance dates.

‘‘They have taken on board the commentary from the NZX and the FMA, who said in April that it was very important to articulate what happened.

‘‘We have generally seen that. Of the 14 reports, 10 had very detailed notes around the impact of Covid19.’’

Ms Shires said Z Energy led the way in terms of the depth of disclosure in its result for the year to March, which she said set a benchmark.

Company accounts over March, April and May bore the brunt of Covid19.

Asset impairments came into sharper focus, and Ms Shires said companies went the extra distance to explain where the sensitivities lay.

She said auditors were attuned to the possibility companies could use Covid19 as a cloak to obscure other problems.

The property companies, in their valuation reports, have highlighted that there was less transactional activity in the market and therefore a lot more uncertainty in their valuations, she said. — The New Zealand Herald