http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.31Change: 0.00
R/$ = 11.14Change: -0.06
Au 1214.35 $/ozChange: -2.68
Pt 1331.00 $/ozChange: -4.00
 
 
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 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|Deloitte|Johan Erasmus
Consulting||
consulting-company|deloitte|johan-erasmus
© 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 Macro and Micro News
South Africa's rand weakened against the dollar on Thursday, falling to a 7-month low after respected Reserve Bank Governor Gill Marcus said she would not renew her contract when her five year term ends in November. Government bonds weakened alongside the currency,...
The State-owned Industrial Development Corporation (IDC) put a brave face on a decline in financial disbursements during 2014, but acknowledged that it would not meet the R100-billion, five-year approvals target set for it by government in 2010. The development...
Henk Langenhoven
Frequent energy supply shortages and delays in the mitigation of these challenges were likely to change how South Africa was perceived as an investment destination, and would deter potential capital inflows into the country’s steel and manufacturing sectors, Steel...
More
 
 
Latest News
Updated 12 minutes ago Energy efficient commercial buildings in South Africa delivered better returns than non-energy efficient buildings, a new study by the Investment Property Databank and the Green Building Council of South Africa has shown. The study, which investigated 461 commercial...
Mogamad Sadick Davids
Updated 1 hour 53 minutes ago The Coega Development Corporation (CDC) has announced ambitious plans for the expansion of metals beneficiation initiatives and metals sector investments in South Africa through its newly unveiled 2014-2024 metals cluster strategy, which it hopes will attract...
Updated 2 hours 51 minutes ago Construction major Aveng has offloaded its wholly-owned Australia- and New Zealand-based utility, resources and infrastructure contracting business Electrix to European concern Vinco Energies for some R1.4-billion in cash. Aligned to the strategic objective of...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
MANUFACTURING CAPABILITY Reliable Transformers designs and manufactures dry-type and oil-filled power and distribution transformers up to 3.5 MVA
While Ekurhuleni-based transformer manufacturer Reliable Transformers currently designs, manufactures and tests its products according to the SANS 780 specifications for distribution transformers and other applicable transformer specifications, it is working towards...
GHAREEB SAAD Kaspersky Lab products contain strong heuristics engines that monitor suspicious file execution to detect attacks
Global endpoint security solutions company Kaspersky Lab has introduced new measures to prevent cyber criminals from accessing sensitive data, alongside its malware-signature and heuristic device analysis detection methods. Threats to mobile devices have increased...
MICHAEL FLETCHER Real-time information available to government when citizens use publicly funded Wi-Fi networks will enable it to communicate with citizens and provide services
To ensure uptake and a positive impact, Wireless Fidelity (Wi-Fi) networks in cities must be provided at schools, community centres and commercial centres to enable citizens and government to access information that will improve access to and delivery of services....
Eco-estate Monaghan Farm, located near Lanseria airport, north-west of Johannesburg, has taken a new approach to modern living and sustainability with its 517 ha development, dedicated to farm living.
Forklift and lift-truck distributor Goscor Lift Hi-Reach launched the Genie SX-180, the tallest self-propelled super boom in Africa, in Johannesburg last month. “As the official distributor of the well-known Genie range of equipment in Southern Africa, we are pleased...
 
 
 
 
 
 
 
 
 
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