New Zealand Securities Commission - The Bulletin: July 2005

Some issuers "could do better" in financial reporting

The Securities Commission reviewed the audited fullyear financial reports of 40 companies with balance dates from 31 March to 31 July 2004. The review also covered some other parts of the annual reports, financial information in prospectuses, substantial security holder information, and continuous disclosure notices.

This review is the first cycle of the Commission's ongoing financial reporting surveillance programme.

The selected 40 issuers reviewed were made up of:

28 companies listed on the NZX;

8 companies listed on the NZAX; and

4 companies with shares traded on the unlisted securities market.

Forty per cent of the financial reports reviewed were found to have some shortcomings that needed to be addressed. We wrote to 15 issuers for clarification of some matters, and/or asking them to address specific shortcomings when preparing their next financial reports. One matter was referred to the Commission's enforcement staff.

Although it was pleasing that few serious problems were identified, the review indicated that a number of issuers need to do more to raise the standard of their financial reporting.

"The aim is to encourage New Zealand issuers to improve the quality of their financial reporting," Chairman Jane Diplock said. "This will enable investors to have confidence in the credibility of financial information provided by issuers, and contribute to the integrity of New Zealand's securities markets."

A report of the Cycle 1 review will be published shortly.

New Commission Members

The Minister of Commerce has announced the appointments of David Jackson and Neville Todd to the Securities Commission.

David Jackson

David Jackson has extensive experience with major national and international companies operating in export-focused agribusiness, retail, forestry and manufacturing.

His experience includes corporate governance, audit and risk management, mergers and acquisitions, due diligence and divestment. He is a director of Pumpkin Patch Limited, CanWest MediaWorks Limited and The New Zealand Refining Company Limited. Prior to June 2005 he was a senior audit partner with Ernst Young.

Neville Todd

Neville Todd is an executive director of Milford Asset Management. A former member of the New Zealand Stock Exchange, he has worked as an equity adviser to both private and institutional clients. He has advised various global institutions in the United Kingdom, the United States, Australia and Asia on New Zealand equities. He has also been the managing director of Salomon Smith Barney in New Zealand, providing stock broking and investment banking services to New Zealand institutions and companies.

David and Neville replace former Members Falcon Clouston and Rodger Spiller.

Falcon Clouston left the Commission in April 2005 after 10 years' service and Rodger Spiller completed a four year term with the Commission in May 2005.

The range of experience and understanding of the securities markets brought by Falcon and Rodger were of considerable benefit to the Commission. We are grateful for their very significant contributions.


		Some issuers "could do better" in financial reporting The Securities Commission reviewed the audited fullyear financial reports of 40 companies with balance dates from 31 March to 31 July 2004. The review also covered some other parts of the annual reports, financial information in prospectuses, substantial security holder information, and continuous disclosure notices. This review is the first cycle of the Commission's ongoing financial reporting surveillance programme. The selected 40 issuers reviewed were made up of: 28 companies listed on the NZX; 8 companies listed on the NZAX; and 4 companies with shares traded on the unlisted securities market. Forty per cent of the financial reports reviewed were found to have some shortcomings that needed to be addressed. We wrote to 15 issuers for clarification of some matters, and/or asking them to address specific shortcomings when preparing their next financial reports. One matter was referred to the Commission's enforcement staff. Although it was pleasing that few serious problems were identified, the review indicated that a number of issuers need to do more to raise the standard of their financial reporting. "The aim is to encourage New Zealand issuers to improve the quality of their financial reporting," Chairman Jane Diplock said. "This will enable investors to have confidence in the credibility of financial information provided by issuers, and contribute to the integrity of New Zealand's securities markets." A report of the Cycle 1 review will be published shortly. ALSO IN THIS ISSUE: Tranz Rail settlement Property developers and securities law Young people and investment www.sharescams.org.nz		New Commission Members The Minister of Commerce has announced the appointments of David Jackson and Neville Todd to the Securities Commission. David Jackson David Jackson has extensive experience with major national and international companies operating in export-focused agribusiness, retail, forestry and manufacturing. His experience includes corporate governance, audit and risk management, mergers and acquisitions, due diligence and divestment. He is a director of Pumpkin Patch Limited, CanWest MediaWorks Limited and The New Zealand Refining Company Limited. Prior to June 2005 he was a senior audit partner with Ernst Young. Neville Todd Neville Todd is an executive director of Milford Asset Management. A former member of the New Zealand Stock Exchange, he has worked as an equity adviser to both private and institutional clients. He has advised various global institutions in the United Kingdom, the United States, Australia and Asia on New Zealand equities. He has also been the managing director of Salomon Smith Barney in New Zealand, providing stock broking and investment banking services to New Zealand institutions and companies. David and Neville replace former Members Falcon Clouston and Rodger Spiller. Falcon Clouston left the Commission in April 2005 after 10 years' service and Rodger Spiller completed a four year term with the Commission in May 2005. The range of experience and understanding of the securities markets brought by Falcon and Rodger were of considerable benefit to the Commission. We are grateful for their very significant contributions.