Page 36 - Profmark_2024_Directors Guide

Audit and Independent Review
Directors are obliged to comply with Sections 28–30 of the Act. They have a duty to
ensure that the company has an effective and independent audit committee (where
applicable).
Section 30 provides that all companies must produce AFS each year within six months
after the end of their financial year, and must determine whether it must be audited. AFS
of all public companies and state-owned companies must be audited.
In the case of any other profit or non-profit company:
■ AFS must be audited if so required by the regulations made in terms of
sub-section 7, taking into account inter alia whether it is desirable in the
public interest, having regard to the economic or social significance of the company
as indicated by any relevant factors including its annual turnover, the size of its
workforce and the nature and extent of its activities
■ AFS can be either audited voluntarily if the company’s MOI or a shareholders’
resolution so requires or if the company’s board has so determined, or independently
reviewed in terms of sub-section 7.
Regulation 26(1)(d) relating to “Independent Review”, states the minimum requirement
for a professional person to conduct an independent review.
Regulation 26 sets out the criteria for determining the Public Interest Score (PIS) which
must be calculated at the end of the financial year by every company. The PIS of a
company determines the financial reporting standards that must be adopted and also
determines whether the company is required to appoint a Social and Ethics Committee
(whether or not that company is listed).
Section 30(3) Auditors Report, Directors Report and Disclosure of
Remuneration
The AFS must include an auditors report if the statements are audited, and a report by
the directors with respect to the state of affairs, the business and profit or loss of the
company or group of companies (if the company is part of a group) including any matter
considered material in enabling the share holders to appreciate the company’s state
of affairs, and any prescribed information, and be approved by the board and signed
by an authorised director, and be presented to the first shareholders meeting after the
statements have been approved by the board. If required to be audited, the AFS must
include particulars regarding remuneration and benefits received by each director or
individual holding any prescribed office, amount of any pensions or compensation paid
out and the number and class of securities issued to a director or prescribed officer
and consideration paid for them, as well as details of all director or prescribed officer’s
service contracts.

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