Disclosure & Transparency
Abu Dhabi Securities Exchange has been
a pioneer in the area of disclosure and transparency. Listed companies used
to disclose only their annual statements, and only during a particular period
of each year. Recognizing the importance of disclosed data , however, the
Market redoubled its efforts in this direction to ensure flow of financial
data four times during each year. The benefits of such data and information
may be summarized as follows:
1) Provision of financial information to investors covering five periods for
each year. Companies used to provide shareholders with financial statements
during the first four months of each year. Abu Dhabi Securities Exchange now
make financial data available on quarterly basis. These data contribute to a
healthy trading environment wherein investors may make rational investment
decisions. Moreover, these reports play a significant role in stimulating
trading and curbing rumors and misleading information, and reflect positively
on valuation of shares.
2) Promotion of confidence amongst dealers.
This is achieved by regularly monitoring companies balance sheets,
effectively supervising media activities and reporting, and ensuring that
only sound information and data are passed to the investing public. The
Market is particularly keen on checking financial data and ensuring their
conformity with established rules and regulations before authorizing release
for publication in local newspapers.
3) Financial statements are considered a major source of information for
various categories of individuals and agencies outside the company. These
agencies include current and future shareholders, lenders, government and
regulatory authorities, stockbrokers and researchers, who use such data for
their various purposes and interests. The absence of disclosure standards is
likely to undermine the capabilities of these agencies. It may cause
investments to head into the wrong directions, and create an environment of
uncertainty which may adversely reflect on many aspects of life.
4) Fair valuation of share prices. The absence of reliable information breads
rumors and lead to damaging speculation which, together, formed the major cause
for many of the crisis that hit financial markets in the past.
5) Companies may rely on Abu Dhabi Securities Exchange channels in
publicizing and highlighting important events. The Market's role goes beyond
publication of periodical financial data to include publication of any
important events or productive developments related to the company.
Circulation of such news to the public is likely to contribute to an increase
in value of its stock.
As per the Market's established rules and regulations, listed companies are
obliged to provide the Market with their annual financial statements,
including its annual report, within three months of the end of the financial
year and its quarterly statements within thirty days of the end of the quarter.
These data should be prepared in accordance with international accounting
standards, and submitted in a hard or soft copies, and should at least
include the following:
1- Board of Directors report or summary.
2- Balance sheet.
3- Income Statement.
4- Cash Flow Statement
5- Shareholders Equity Statement.
6- Basic earning per share.
7- General Explanatory Notes.