The publication of financial results by companies listed on the Nairobi Securities Exchange (NSE) is a regulatory requirement designed to promote transparency, accountability and informed investment decisions. These disclosures provide shareholders and potential investors with information on a company’s financial performance, position and operations, while ensuring that market participants have access to material information.
In Kenya, the Capital Markets Authority (CMA) regulates the capital markets and oversees compliance with disclosure requirements. Regulation 63(7) of the Capital Markets (Licensing Requirements) (General) Regulations, 2002 provides for the submission of annual financial results by listed companies. Interim reporting requirements also apply, with the CMA requiring listed companies to submit half year financial reports to the regulator, the NSE and the public within 60 days of the interim reporting date.
This reporting schedule explains why many companies publish their half year results around August, following the June reporting period. However, reporting dates vary depending on a company’s financial year. For instance, companies whose financial years begin in April follow a different reporting calendar from those operating on a January to December financial year.
Financial statements must also follow recognized accounting standards. Kenya requires listed companies to prepare their financial statements using International Financial Reporting Standards (IFRS), which are also incorporated into the NSE listing requirements. This standardization allows investors to assess companies using a consistent accounting framework, making it easier to examine revenue, expenses, assets, liabilities and profitability across reporting periods and within industries.
Beyond regulatory compliance, the disclosures provide investors with information needed to evaluate a company’s financial health and future prospects. Annual and interim reports help shareholders assess whether a business is growing, managing its costs, controlling debt and generating sustainable earnings. They also give potential investors a basis for evaluating the risks and opportunities associated with buying or holding its shares.
The timing of these disclosures is equally important. Under Regulation 89(4) of the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023, material information must be disclosed simultaneously to the CMA, the relevant securities exchange and the public, within 24 hours of the event and during non trading hours. The requirement is intended to give investors equal access to information before trading resumes.
Failure to meet reporting obligations can attract regulatory action. The CMA has powers to impose financial penalties, issue directions requiring companies to address breaches, and suspend or cancel the listing of securities where necessary to protect investors. In the 2017/2018 financial year, the Authority imposed approximately Kshs 113.48 million in financial penalties on various individuals and entities for breaches of the capital markets regulatory framework. More recently, its enforcement reports have continued to identify failure to publish annual and interim financial statements as a compliance issue.
However, reporting requirements can accommodate exceptional circumstances through regulatory approval. In 2020, for example, the CMA allowed certain state controlled listed companies to publish unaudited interim financial statements following delays linked to the vacancy in the Auditor General’s office. The reports were to be identified as unaudited, with subsequent auditing still required.
To improve predictability, the CMA and NSE introduced a joint initiative requiring listed companies to prepare forward looking calendars of corporate announcements. These calendars include anticipated dates for financial results, dividend announcements and other corporate events, helping investors plan around important disclosures.
Ultimately, publishing financial results is more than an administrative obligation. It is a key part of corporate accountability and market transparency. Timely, standardized disclosures help investors evaluate business performance, identify financial risks and make decisions using information that is available to the wider market.
