IS YOUR CORPORATE RETURNS BEING READ?

In recent months, Henates has received annual reports and unaudited results from many public quoted companies especially from Kenya and Nigeria and has come to the conclusion that not many of the companies can categorically if their returns are being read.

Or perhaps, not many want it to be tead and understood because this gives birth to troublesome questions during annual and extraordinariy general meetings of shareholders, the kind of pains in the neck that some board chairmen prefer to give some handshake to avoid.

But the point still remains that returns are made mandatory so that stakeholders, particularly, shareholders can have a true and fair view of the state of their company and how it is being run. Such returns too should help new investors  decide if they should invest.

Unfortunately, even Henates, with up to three decades of studying and interpreting corporate financials, still finds it difficult at times to look through some reports and below are some of the reasons why.

First, the size of some of these reports could be quite intimidating. Volumes and volumes of words and words with sprinkles of data and maintains of explanations.

Some even come in fine prints, mass of fine prints and of the kind that usually made it difficult to read some insurance and entertainment contracts before appending signatures.

Of course, most of that is because disclosure requirements now demand for so many things to be touched on. Find time to really read them and you could come away with good knowledge but then, how much time do we all have these days of social media and e-many things? 

Besides, aside from the time, how many in this part of the world are equipped to read and digest them?

Secondly, some still deliberately want you to put scattered figures together in order to get the true picture.

For example, the Kenyan banks and some Nigerian ones do not give lump sum gross earnings and even at times stop short of giving total interest income,breaking it down to types of interest then run with the net figure.

Some insurance companies too bury total income in different levels or terms. Yet, no harm in stating the total figure  then breaking it down or netting out.

When there is a rash or harvest of results, of course, Henates can not review all at once so he resorts to finding out those he can easily take a bite from.

Thirdly, some reports pay too much attention to making a relatively poor period look good by down playing the negatives and drumming the positives.

Whereas it would be better to recognise both and let stakeholders know why they occurred and steps being taken to minimise the negatives.

Lastly, some of these reports do no recognise that interpretation demands comparison with different but related time frames. For example, in a half year report, they mingle group and parent company figures, and even put previous period figures further from the current, so you have to align the figures and periods before you can compare.

So, do you want your annual returns to be read and digested more? You may have to consider how to make it easier for ill equipped people with limited interests and daunting socio economic challenges like unreliable power supply, to read and digest.