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Uganda Securities Exchange gives green light over AGMs

The delay and postponement of 2020 AGMs means that the final dividend payment may not be paid on time

Kampala, Uganda | ISAAC KHISA | Now Uganda’s listed companies have until July.30 to hold their Annual General Meetings and determine their future growth, according to Paul Bwiso, the Uganda Securities Exchange boss.

Bwiso in a notice issued on May.26, said following the government’s decision to ease the lockdown amidst the coronavirus pandemic, the listed companies should immediately submit to the Exchange a contingency plan for holding their AGM in the event that the current circumstances prevail up to latest date of holding their 2020 AGM.

“In formulating the said contingency plan, issuers are advised to consider their own individual circumstances, particularly their Articles of Association and any other relevant matters,” he said.

“Where an Issuer proposes to convene a virtual AGM, they shall prior to the issuance of their AGM Notice submit to the Exchange their virtual AGM execution plan and obtain a “No Objection from the Exchange…the Exchange shall (also) provide guidelines providing minimum standards to be met by an Issuer who proposes to hold a virtual AGM.”

Bwiso also noted that companies which seek to hold virtual AGMs shall ensure that their Articles of Association permit them to do so to avoid future legal suits.

This comes more than a month since USE suspended all the AGMs on April.17, in the wake of government’s move to limit large gatherings in the ongoing efforts to contain the spread of coronavirus that has ravaged more than 180 countries around the world. Uganda had as of May.26 confirmed 198 cases of coronavirus, with 65 recoveries, and no death.

The delay and postponement of 2020 AGMs means that the final dividends may have to be paid beyond the stipulated timeframe.

However, the companies that intends to pay their final dividend prior to their AGM, should ensure that they are in conformity with the requirements of the articles of Association and or dividend payout. Bwiso said.

“Issuers who have been directed by their Industry regulators to defer dividend payments are required to obtain regulatory approval from their Industry regulator prior to payment of the dividend,” he added.

Section 138 of the Companies Act, 2012, provides that a public company shall in each year hold an AGM in addition to any other meetings in that year and shall specify the meeting as general meeting in the notices calling it and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next. Executives of companies that fail to hold an AGM are fined up to Shs 500,000. Uganda has 16 companies listed on USE with eight cross-listed from Kenya.

So far, public companies that have released their financial results and had announce  dates for their AGMs include; Stanbic Bank that recorded 20% growth in net profits to Shs259bn, dfcu that  recorded a 21% growth profit to Shs73.4bn and electricity distributor, Umeme that recorded a 5% growth in net profit to Shs 139bn, last year.

Others are British America Tobacco Uganda Ltd that recorded an increase in net profit from Shs 13.7bn to Shs 15.68bn and Bank of Baroda that recorded a 38% drop in net profit to 45.3bn during the same period under review.



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