BHA - Presentation

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Presentation on Private Companies

Transcript of BHA - Presentation

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Presentation on Private Companies

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Content

• What does the Companies Act 71 of 2008 say about Financial Reporting?

• More than Financial Reporting/Financial Management.

• Service we provide to ensure your company is operating effectively and in conformity with relevant legislation.

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Financial Reporting in terms of the Companies Act 71 of 2008• Section 28 of the Companies Act deals with the accounting records

of a company. In this section we learn that a company must keep accurate and complete accounting records and these records must be kept at the registered office of the company.

• Section 30 of the Companies Act deals with Annual Financial Statements of the company and permits the following:

i. All companies should prepare financial statements within 6 months after the financial year end of the company, in terms of the financial reporting standards as set out in Regulation 27 of the Act.

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Should the Annual Financial Statement of a company be audited?• All public and state-owned companies must be audited.

• Private companies are required to be audited in the following circumstances:

1) If it is required by the company’s Memorandum of Incorporation (MOI).

2) If the company holds assets in a fiduciary capacity of more that 5 million Rand.

3) If the company’s Public Interest Score is more than 350.

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What happens if a private company does not have to be audited?• If a private company is ‘’owner managed’’ (each shareholder is a

director) the company is exempt from an audit in terms of section 30 (2) (A). This means that the company is only obligated in terms of the Act to prepare Annual Financial Statements in conformity with the respective Financial Reporting Standards.

• If the private company is not ‘’owner managed’’ then it may be required to have an Independent Review. This is usually the case if the company has a Public Interest Score of between 100 and 349.

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How is the Public Interest Score calculated?

• The public interest score of a company is calculated as follows:

1) One point for every million Rand or part of a million Rand of turnover for the financial year under review.

2) One point for every employee that worked for the company during the financial year under review.

3) One point for every million Rand or part of a million Rand owed to third parties.

4) One point for every person that has a beneficial interest in the company.

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Illustration of how the public interest score works.

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More than financial reporting?

• When we look at financial reporting, we should ask the question; are annual financial statements enough for the company to be successful?

• From our perspective the answer is no, due to the following reason:

1) Annual financial statements are compiled once a year. Thus reflecting the company’s financial history for the past 12 months. For this reason we would like finance to be more than just looking at financial statements once a year. As we can not change history.

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More than financial reporting – Financial Management• We would urge every business to do financial management on a

monthly basis.

• We like to think of financial management as being the owners eyes in the company.

• As every owner wants a good strong balance sheet and fat profits.

• Financial management is analyzing the company’s financial performance, profitability and cash flow on a monthly basis. To use this analysis for sound decision making that will result in greater performance, probability and cash flow.

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More than financial reporting – Financial Management• Have you ever wondered why your company shows a big profit, but

yet there is no money in the bank account?

• This goes back to the saying – Turnover is vanity, profit is sanity but cash flow is reality.

• Financial management is a critical aspect of any successful business.

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Services that we provide to ensure your company is operating effectively• Our services can be broken down as follows:

1) Financial statements and other statutory work

2) Taxation

3) Consulting and financial management

4) Accounting records

5) Other services

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1. Financial statements and other statutory work comprise of:• Compilation of Annual Financial Statements

• Independent Review of Annual Financial Statement

• Secretarial work for the company to ensure that it is in conformity with the Companies Act 71 of 2008.

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2. Taxation comprise of:

• Company tax returns

• Individual tax returns

• Trust tax returns

• Provisional tax returns

• VAT and Payroll taxes

• SARS audits and all correspondence with SARS

• Payment arrangements with SARS and debt compromise

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3. Consulting and financial management comprise of:

• Preparation of monthly management accounts, with detailed analysis of financial information, like the company’s financial performance, profitability and cash flow.

• Costing of products.

• Tax planning.

• Forecast and budgets.

• Designing sound internal controls to safeguard assets.

• Advisory on new projects and relevant costing.

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4. Accounting records comprise of:

• Monthly bookkeeping.

• Monthly payroll services

• Submission of monthly VAT

• Submission of monthly payroll taxes

• Submission of bi yearly payroll recons

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5. Other services comprise of:

• Valuation of companies.

• Company registrations.

• Trust formations.

• Wills and estates planning.

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What do we stand for?

• We see our self as an asset for any client, we strive to be our clients eyes in their finance.

• We want our client to excel in their market place and to be as profitable and efficient as possible.

• We ensure our clients are in conformity with all relevant legislation.

• We come along side our client to ensure efficient and effective business operations.

• We perform all our duties with integrity, objectivity and transparency.