http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.98Change: -0.10
R/$ = 13.33Change: -0.03
Au 1127.57 $/ozChange: -7.28
Pt 1001.00 $/ozChange: -19.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Nov 05, 2010

Generating praise and concern

Back
Deloitte accounting and auditing senior manager Dr Johan Erasmus discussing benefits and concerns in the new Companies Act.
 
 
 
Consulting|Environment
Consulting|Environment
consulting-company|environment
© Reuse this



Despite the concerns surrounding the new Companies Act, No 71 of 2008, and the lengthy period to finalise it, the aim of the Act is to make business proceedings easier, says global accounting and consulting firm Deloitte accounting and auditing senior manager Dr Johan Erasmus.

He says that most companies will find it easier to work through and comply with the new Act, as opposed to the current Act, as much of the red tape has been removed.

Public hearings for the Draft Companies Amendment Bill 2010 will take place in Parliament on November 9 and 10, and November 17. The Department of Trade and Industry indicated that the new Companies Act will be effective from April 1, 2011.

One of the improvements includes the alterations to the existing share capital regime, which will replace par value shares with ordinary shares. However, the process and regulations governing the conversion of par value shares into ordinary shares are yet to be finalised. Share premium accounts, which were not mentioned in the draft regulations, will have to be done away with if par value shares are no longer in use, he says. He believes that this will bring the country in line with most other jurisdictions.

The Act prescribes the composition of a Financial Reporting Standards Council, which will consist of experts on the financial reporting environment and which Erasmus believes will be bene- ficial. Financial reporting standards have been removed from the Companies Act and will be published in the regulations, which will be published in consultation with the Financial Reporting Standards Council.

He believes that the Act will support foreign investment as it allows foreign companies that want to operate in the country, to be domesticated and then to comply with the provisions of the Companies Act. The Act also allows for electronic participation in meetings, specifically shareholder meetings for public and State-owned companies and records can be stored electronically. He believes that this assists in bringing corporate law into the twenty-first century.

Although the new Act currently allows six months for financial statements to be prepared after the financial year-end, the Department of Trade and Industry (DTI) has indicated that it may change this period to a year, he says. Further, only one director needs to sign the financial statements (currently, two directors need to sign) and a copy need not be sent to every shareholder. Rather, shareholders must receive a summary of the annual financial statements and then have access to the full set of financial statements, which may be kept electronically.

Key provisions of the Act will be effective immediately, parti-cularly relating to issues such as shareholder rights and director liability. In most other instances, if there is a clash between the Act and the company's memorandum and articles, the memorandum and articles will prevail for a period of two years. This allows a company two years within which to amend its memorandum and articles and to bring it in line with the Act. Once the new memorandum of incorporation is filed with the Companies Intellectual Properties Commission, the grace period is up.

Concerns and Clarification
However, there is concern over the length of time given to businesses to prepare for the implementation of the Act, besides other concerns.

One example relates to the auditing requirement. The current Act requires all companies to be audited, while the new Act allows certain companies to have their statements independently reviewed, rather than undergo a full audit. The transitional arrangements in this respect are unclear. “If a company’s financial year-end is February or March, and it has not fulfilled the audit requirement under the current Act before April, would it still be required to undergo an audit once the new Act is effective, even if that particular company is only required in terms of the new Act to have its statements independently reviewed?” he questions.

He hopes that the DTI will clarify the transitional arrangements and specify exactly when the Act’s requirements will apply and when a company would be in breach of the Act. He suggests that companies familiarise themselves with the Act, but not make significant changes until the promulgation of the Companies Amendment Bill and the Regulations.

Edited by: Brindaveni Naidoo
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Economy News
Updated 2 hours 19 minutes ago Steel producer ArcelorMittal South Africa (AMSA) announced on Monday that processes had been initiated “with immediate effect” that could result in the retrenchment of 400 people at the Vereeniging meltshop and the forge, in southern Gauteng. An “industrial footprint...
Updated 2 hours 44 minutes ago South Africa's mining industry, unions and the government signed a broad plan on Monday to stem a wave of job losses triggered by falling commodity prices and soaring costs. The document of the blue print seen by Reuters last week included boosting platinum by...
Updated 5 hours ago South Africa's rand traded weaker against the dollar early on Monday after the Federal Reserve's vice chairman suggested over the weekend that the US may raise rates in September. At 0630 GMT the rand eased 0.14% to 13.3275 per dollar, extending losses to a third...
Article contains comments
More
 
 
Latest News
Updated 11 minutes ago JSE-listed construction company Afrimat intends to repurchase a four-million Afrimat shares for an aggregate consideration not exceeding R74-million. Its majority owned subsidiary Infrasors would also enter into a share buy-back programme of three-million shares for...
Updated 24 minutes ago Three formal bids have been received by the practitioners presiding over the business rescue of steel producer Evraz Highveld Steel and Vanadium and a preferred bidder could be named by as early as Wednesday. Business rescue practitioner Piers Marsden told...
Updated 24 minutes ago The high court in Pretoria has struck another blow to the technology company that is trying to hold on to the lucrative contract to operate the electronic national administration traffic information system (eNaTIS). Judge Wendy Hughes on Friday last week approved the...
More
 
 
Recent Research Reports
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Training company The Intelligence Transfer Centre will host the fourth yearly Environmental Crimes Conference at the Indaba Hotel, in Fourways, Johannesburg between September 9 and 10. Confirmed key regulatory bodies that will attend the event include the Department...
The government of Egypt has said it is ready to provide technical assistance to Malawi in the development of the Shire–Zambezi waterway, which is designed to link landlocked Malawi to the Indian Ocean by opening the two rivers for navigation. Egyptian ambassador to...
Kenya is finally set to start building a new multipurpose petroleum pipeline, after securing a $350-loan from a consortium of banks, including South Africa's Rand Merchant Bank. The other banks in the consortium are the Cooperative Bank of Kenya, Citibank's Kenya...
MARAIS VAN HEERDEN The owner/operator should be able to view the overall project design and progress made at any time
Three-dimensional (3D) engineering design models can now be viewed on tablets, which enable stakeholders to view the design without having to buy the design software used to create it, says engineering design firm 3DDraughting executive Marais van Heerden. The...
Ford’s newest offering in a long list of newcomers to the local market in the last two years is the B-Max multi-activity vehicle (MAV). The B-Max will play in the so called B-MAV segment, or the small MAV segment, currently dominated by Toyota’s Avanza, which sells...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96