The Iceland Stock Exchange (ICEX) has decided to issue a public reprimand to Hekla hf. due to a violation of ICEX´s Rules. ICEX is of the opinion that Hekla has violated Sections 4.3.1, 4.3.4 and 4.3.6 of the Rules for Issuers of Securities Listed on the Iceland Stock Exchange Ltd. The circumstances of the case are that on 31 August of this year, Hekla hf. published its interim financial statements for the six months ending June 2005 in the ICEX News System. The Notes to the interim financial statements were lacking, although the auditor’s endorsement stated that Notes had been included in the interim statements. It was stated in the Report from the Board of Directors and the CEO that the interim financial statements had been prepared in accordance with the Financial Statements Act and the Regulation on the Presentation and Contents of Financial Statements and Consolidated Financial Statements. Following several reminders from ICEX the interim financial statements, together with Notes, were published on 13 September. That same day ICEX made a written request for an explanation as to why the company did not include the Notes when submitting its interim financial statements for publication in the ICEX News System on 31 August this year, as provided for by Sections 4.3.1, 4.3.4 and 4.3.6 of the Rules for Issuers of Securities Listed on the Iceland Stock Exchange. A reply was received from Hekla hf. on 21 September.

 

Hekla hf. is an issuer of bonds listed on ICEX and as such is required to comply with ICEX's Rules concerning information disclosure. ICEX is of the opinion that Hekla hf. should have sent the Notes accompanying its interim financial statements when they were submitted for publication in the ICEX News System on 31 August this year. Section 4.3.1 states that an issuer shall publish the results of its 6M interim financial statements no later than two months following the conclusion of the reporting period. According to Section 4.3.4, an issuer must make a news announcement concerning statements and according to Section 4.3.6 the 6M interim financial statements are to be accompanied by a news announcement. Hekla hf. must be regarded as having failed to fulfil its obligation to publish its 6M interim financial statements no later than two months following the conclusion of the reporting period, since the Notes accompanying the statements were lacking and the company is thus not regarded as having fulfilled its obligation until 13 September, when the interim statements were published complete with the Notes.

 

It should also be borne in mind in this instance that the Notes were missing from the company’s annual financial statements published 16 February of this year; two days later the annual financial statements were published complete with Notes following reminders from ICEX. On that occasion it was pointed out to the company that the Notes were to be included when the news announcement was sent for publication, that ICEX was not authorised to grant exceptions from the publication of the Notes to its annual financial statements, and that Act No. 144/1994, on Annual Financial Statements, requires Notes to accompany annual financial statements.

 

The decision to issue a public reprimand has been taken on the basis of the contract concluded between Hekla hf. and ICEX upon the listing of the latter’s bonds on ICEX, cf. Section 7.3 of the Rules for Issuers of Securities Listed on the Iceland Stock Exchange Ltd., which states, inter alia, that in cases of violations of ICEX Rules, ICEX may issue a public statement concerning the matter in question.