ETHIOPIA Law and Practice Contributed by: Sisay Habte, Tibebe Zewdu, Michael Mengistu and Helina Bezabih, TBeST Law LLP
prior to dispatching notices for the annual gen - eral meeting. Furthermore, it is mandated that the balance sheet and profit and loss statement be prepared annually in the same format as in prior years, unless variations are approved by the general meeting upon the recommendation of the audi - tors. For a holding company, the accounts of its sub - sidiaries must be presented at the annual general meeting simultaneously and in the same manner as its own accounts, alongside the preparation of a consolidated balance sheet and profit and loss statement. In circumstances where the board of directors deems it impractical or burdensome to prepare such documents, or if it may be detrimental to the company or its subsidiaries, they have the option to seek exemption from these obligations, subject to approval by the Ministry of Trade and Regional Integration or other relevant govern - ment authority. In addition, any self-regulatory organisation par - ticipating in capital markets is required to submit audited financial statements to the Capital Mar - kets Authority within four months after the end of every financial year. The Authority is yet to issue Directives providing the specifics of the audited financial statements that must be disclosed by issuers of public offerings and listed companies. 6.2 Disclosure of Corporate Governance Arrangements Under the Ethiopian Commercial Code, the board of directors is responsible to ensure that the company’s governance arrangements are such as to ensure the proper monitoring of the company’s financial statements and positions.
Moreover, directors have the obligation of sub - mitting an annual report of the company’s opera - tions including a report on the company’s activi - ties and affairs over the previous financial year to the general meetings of shareholders, auditors and the Ministry of Trade and Regional Integra - tion. These responsibilities show the obligation to disclose the corporate governance arrange - ments in the reports. However, there are no specific corporate governance codes that are required to be adhered to in these reports. In addition, any self-regulatory organisation par - ticipating in capital markets is required to submit a report on its corporate governance policy and practices along with its annual report to be sub - mitted to the Capital Markets Authority within four months after the end of every financial year. 6.3 Companies Registry Filings In Ethiopia, it is the Ministry of Trade and Region - al Integration that establishes and administers a Federal Commercial Register, having a nation - wide application. Companies are required to make several filings with this Ministry, including: • the submission of the inventory, balance sheet, profit and loss account, and directors’ report; • detailed information on related-party transac - tions involving conflicts of interest; • details regarding a more than 5% reciprocal holding of shares between two companies; • details by non-wholly-owned subsidiaries on whether their management is directed by the parent company; • notification of change of business address; • notification of any alternation or amendment on commercial registration such as company name, general manager, capital, additional business, etc;
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