The Tourist Company of Nigeria Plc has called out to explain to the public reasons behind the delay in filing of their Annual Financial Statements (“AFS”) for the Years Ended December 31, 2020 and December 31, 2021 respectively.
According to the company, the required statutory deadlines of 31 March 2021 and 31 March 2022 respectively, were delayed due to the same unforeseen reasons of reconciling of the accounts.
Specifically, Section 8 (1)(n) of the Financial Reporting Council Act No.6, 2011, Rule 5 states that the Financial Reporting Council of Nigeria (“FRCN”) shall receive copies of all qualified reports together with detailed explanations for such qualifications from the auditors of the financial statements and that the financial statements shall not be released until all accounting issues have been resolved by the FRCN.
In the 2020 AFS, the external auditors of TCN, KPMG Professional Services (“KPMG”) issued a qualified audit opinion in respect of the audit report forming part it. The basis for the qualified opinion relates to the non-recognition of the interest expense on the shareholder and related party loans for the period March 1, 2020 to December 31, 2020, which constitutes a departure from International Financial Reporting Standards (“IFRS”s).
In addressing the matter, the company said TCN initiated a Company Voluntary Arrangement (“CVA”) as prescribed under Chapter 17 of the Companies and Allied Matters Act, 2020 (“CAMA”). The CVA process involved a proposal by the Company to effect a modification of the terms of the shareholders and related party loan agreements concerning the waiver of interest which would have accrued from 1 March 2020 until otherwise agreed by the Company and her related shareholder-.creditors and a sustainable improvement of EBITDA.
Following the CVA process, it was reported that the Federal High Court ordered that a meeting of the shareholders and a meeting of the creditors be convened to consider the proposal.
Both meetings were held on December 8, 2021. The shareholders and the creditors present at the respective meetings unanimously voted in favour of the resolutions authorizing the implementation of the CVA proposal. The CVA is now in effect and the audit opinion qualification is removed.
However, TCN is awaiting feedback from the FRCN in respect of the filing date of the 2020 AFS whereafter it will be presenting the 2020 AFS to shareholders at the Annual General Meeting (“AGM”) to be convened later this year.
For the 2021 AFS, the external auditors of TCN, KPMG, have without qualifying their opinion, included a Material Uncertainty Related to Going Concern paragraph and an Emphasis of Matter in its audit opinion in respect of the year’s financials.
The company secretary, Punuka Nominees Limited, said KPMG will be sending a copy of the 2021 AFS approved by the TCN Board together with an explanatory memorandum to the FRCN and will await feedback from the FRCN in respect of the filing date of the 2021 AFS. The 2021 AFS may only be filed after approval by the FRCN.
“The Company has fully cooperated with and timeously informed the Securities & Exchange Commission of the reasons for the delays, as set out above, in respect of the filing of the 2020 AFS, the 2021 AFS (unaudited at this juncture) and the holding of the AGM, to deal with, among others, both the 2020 AFS and the 2021 AFS. The NGX Regulation Limited has also been notified of the same” Punuka said.
In addition, it was said that there is currently no anticipated filing date for either the 2020 AFS or the 2021 AFS as the FRCN is yet to revert on the approval requests as detailed above. The Company has applied for an extension of time for the holding of the AGM, which has been granted by the Corporate Affairs Commission.
