Elvis Onuora & Co (Chartered Accountants)
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CORPORATE GOVERNANCE ISSUES

We wish to highlight some of the Corporate Governance issues that many Nigerian Companies may have relegated to the background in the conduct of their businesses. It is therefore important to bring them to the front burners as they are still in our Companies Act.
 
General Meetings: 

Section 213(1) of Companies and Allied Matters Act CAP C20 LFN 2004 provides thus: “Every Company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in the year and shall specify the meeting as such in the notice calling it; and not more than 15 months shall elapse between the date of one annual meeting of a Company and that of the next. S213(5) says that “ if default is made in holding a meeting of the company in accordance with S213(1) or in complying with any directions of the Commission in S213(2) thereof, the Company and every officer of the Company who is in default shall be guilty of an offence and be liable to a fine of N500 and if default is made in complying with S213(4), the Company and every officer of the Company which is in default shall be liable to a fine of N25”
 
Extraordinary General Meeting:
 
S215(1) empowers the Board of Directors of Companies to convene Extraordinary General Meeting for special businesses. Notices of general meetings shall not be less than 21 days or any other shorter time as would have been agreed. S221(1) says that “ failure to give notice of any meeting to persons entitled to receive it shall invalidate the meeting unless such failure is an accidental ommission on the part of the person giving the notice”. However subsection 2, warned that misrepresentation or misinterpretation of the provisions of the Act shall not amount to accidental ommission. 
 
Resolutions: 
 
In line with S233, a resolution shall be an ordinary resolution when it has been passed by a simple majority of votes cast by such members of the Company as, being entitled to do so vote in person or proxy at a general meeting. In the case of a special resolution, such resolution shall not be effective unless notice for such resolution was duly circulated not less than 28 day before the special meeting (S236). Such special resolution shall within 15day of passing it, be filed with the Commission( S237).
 
International Financial Reporting Standard (IFRS) represent a single set of high quality, globally accepted accounting standards that can enhance comparability of financial reporting across the globe. The adoption of IFRS at country level indicated that countries that adopted IFRS experienced huge increases in direct foreign investment (DFI) flows across the country;
 
Key Differences between NG-GAAP and IFRS 
 
Nigerian public listed entities are required to present their financial reports in accordance with IFRS beginning January 2012. Until then, all Nigeria firms prepared their financial statements in accordance with local standards issued by the Nigeria Accounting Standard Board. The principal differences between Nigerian Accounting Standards (NG-GAAP) and IFRS are stated below; 

TOPIC
NG-GAAP
IFRS
Financial statement Presentation
Income statement Balance sheet, cash flow statement Value added statement Accounting policies Notes
- Statement of comprehensive income (including income statement)
- Statement of financial position (balance sheet) 
- Statement of changes in equity
- Statement of cash flows
- Accounting policies
- Notes - Significant management estimates and judgements
Property plant and Equipment
Measured using cost model
Measured using cost model with detailed guidance regarding: 
- Componentization
- Useful lives 
- Residual values
- Impairment calculations and identifying cash generating units.
Related parties
Limited disclosure but expected
Detailed guidance on identification of related parties and detailed disclosure of related parties and transactions.
Segment reporting
More on geography
- Operation segments based on management’s view. 
- Threshold for reportable segments is results or assets of an Individual segment should be 10% or more of all segments. 
- If the aggregate revenue of all reported segments on this basis is less than 75% of total, then more segments required is until 75% threshold is reached.
IFRS 1 - First time Adoption of IFRS
Not applicable
Provides guidance and requirements on the transition to IFRS. 
Also provides relief for certain items in the preparation of the opening balance sheet.
Financial gurantee
Disclosed as contingent Liabilities
Required financial gurantees to be recognized at their fair value
Employee benefits
General expense and Disclosures on pension
- Complex criteria of accounting
- Recognize the undiscounted amount of short-term employee Benefits 
Risk management Disclosure
Limited disclosure of foreign exchange and credit risk
Disclosure required for:
- Credit risk and 
- Liquidity risk 
- Price risk 
- Capital risk management 
- Risk management 
Impairments
No specific standard
- Carry out impairment test based on trigger event 
- IFRS 36 - impairment on non - financial assets 
- IAS 39 - impairment on financial assets
Financial asset Classification and Valuation
Classification include:
- Cost 
- Amortized cost
Classification include:
- Amortized cost 
- Fair value This is driven by the business model and nature of the instrument.

As may be observed, the differences appearing in financial statement presentation such as change in equity, income statement and significant management estimates and judgments are concepts that are not addressed in the local standards. There are also significant differences in property, plant and equipment, related parties, segment reporting, leases, impairment and risk management disclosure. Finally significant differences are also found in other areas such as financial guarantees, scope of consolidation and employee benefits. 
 
Benefit of Converting to IFRS:
 
The potential benefits that Nigeria stands to gain after IFRS adoption are seen in the light of: 
 
(i) Promotion of the compilation of meaningful data on the performance of various reporting entity both public and private levels in Nigeria thereby encouraging comparability, transparency, efficiency and reliability of financial reporting in Nigeria. 
 
(ii) Assurance of useful and meaningful decisions on investment portfolio in Nigeria. Investors can easily compare financial results of corporation and make investment decisions. 
 
(iii) Attraction of direct foreign investment and assurance of easier access to external capital for local companies. 
 
(iv) Additional and better quality financial information for shareholders and supervisory authorities.
 
Conclusions and Recommendations
 
IFRS is driving the revolutionary world of accounting with over 120 countries either requiring or permitting its use. Nigeria has cut over to IFRS in phases since 2012. Your company is expected to have converted to IFRS from January 2014, as the 2014 financial statements should be in IFRS. Please get the right professional to guide you in the conversion process.

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HEALTH WISE

HIGH BLOOD PRESSURE
Blood pressure is the measure of the force of blood pushing against blood vessel walls. The heart pumps blood into the arteries (blood vessels), which carry the blood throughout the body. High blood pressure, also called hypertension, is dangerous because it makes the heart work harder to pump blood to the body and contributes to hardening of the arteries, or atherosclerosis, and to the development of heart failure. 
 
What Is "Normal" Blood Pressure? 
 
A blood pressure reading has a top number (systolic) and bottom number (diastolic). The ranges are: 
 Normal: Less than 120 over 80 (120/80) 
 Prehypertension: 120-139 over 80-89 
 Stage 1 high blood pressure: 140-159 over 90-99 
  Stage 2 high blood pressure: 160 and above over 100 and above 
 High blood pressure in people over age 60: 150 and above over 90 and above.
People whose blood pressure is above the normal range should consult their doctor about steps to take to lower it.
 
What Causes High Blood Pressure?
 
The exact causes of high blood pressure are not known, but several factors and conditions  may play a role in its development, including: 
 Smoking 
 Being overweight or obese 
 Lack of physical activity 
 Too much salt in the diet 
 Too much alcohol consumption (more than 1 to 2 drinks per day) 
 Stress
 Older age 
 
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PREVENTING HIGH BLOOD PRESSURE: HEALTHY LIVING HABITS
By living a healthy lifestyle, you can help keep your blood pressure in a healthy range and lower your risk for heart disease and stroke. 
A healthy lifestyle includes: 
 Eating a healthy diet. 
 Maintaining a healthy weight. 
 Getting enough physical activity. 
 Not smoking. 
 Limiting alcohol use.

Healthy Diet
Choosing healthful meal and snack options can help you avoid high blood pressure and its complications. Be sure to eat plenty of fresh fruits and vegetables.

Healthy Weight
Being overweight or obese increases your risk for high blood pressure. To determine if your weight is in a healthy range, doctors often calculate your body mass index (BMI). If you know your weight and height, you can calculate your BMI at CDC's Assessing Your Weight Web site. Doctors sometimes also use waist and hip measurements to measure excess body fat.

Physical Activity
Physical activity can help you maintain a healthy weight and lower your blood pressure. For adults, the Surgeon General recommends 2 hours and 30 minutes of moderate intensity exercise, like brisk walking or bicycling, every week. Children and adolescents should get 1 hour of physical activity every day. 

No Smoking
Cigarette smoking raises your blood pressure and puts you at higher risk for heart attack and stroke. If you do not smoke, do not start. If you do smoke, quitting will lower your risk for heart disease. Your doctor can suggest ways to help you quit.

For more information, please contact us at 39, king George V. Road, Onikan, Lagos. Tel: 08023204138, 09093626035 Email:elvisonuoraandco@gmail.com Visit our websitewww.elvisonuora.com.ng
 
 
 

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