FORM AND CONTENT OF ACCOUNTS
.The Financial statements will include a balance sheet (Statement of Financial Position) as at the year end and a profit and loss statement (Income Statement)for the period ending the at the balance sheet date.
The financial statements shall, in the case of companies which are required to comply with the International Accounting Standards, also include:
- a statement of changes in equity between its last two balance sheet dates;
- a cash flow statement.
And in the case of a company not trading for profit, be an income and expenditure statement for the company in relation to the accounting period ending at the financial statement date;
BOOKS OF ACCOUNT
The accounting records shall contain:
- receipts and expenses with their accounting documents;
- a record of the assets and liabilities of the company;
- where the company‟s business involves dealing in goods:
- a record of bought and sold goods, those who bought them and related invoices;
- a record of stock held and its variation;
- where the company‟s business involves providing services, a record of services provided and relevant invoices
The Board of Directors of every company shall ensure that, within three (3) months following the end of a financial year, a set of audited accounts shall be submitted to the ORG.
For groups of companies consolidated statements must be prepared in addition to the individual statements. For companies which are required to meet International Accounting Standards, must comprise a consolidated balance sheet and a consolidated income statement.
The Board of Directors of every company shall, within six (6) months after the company’s financial statement date, prepare an annual report on the affairs of the company during the accounting period ending on that date.
A copy of the annual report shall be sent to every shareholder of the company not less than fifteen (15) days before the date fixed for holding the annual meeting of the shareholders.
The annual report for a company shall be in writing and be dated and shall:
- describe the state of the company’s affairs and give details especially of any change during the accounting period in:
- the nature of the business of the company or any of its subsidiaries;
- the classes of business in which the company has an interest, whether as a shareholder of another company or otherwise;
- include financial statements for the accounting period and any group financial statements for the accounting period completed and signed
- include the auditor’s report where this is required
- state particulars of entries in the interests register made during the accounting period;
- state the amount which represents the total of the remuneration and benefits by:
- executive directors of the company
- the non-executive directors of the company;
- state the total amount of donations made by the company and other subsidiaries during the accounting period;
- state the names of the persons holding office as directors of the company as at the end of the accounting period and the names of any persons who ceased to hold office as directors of the company during the accounting period;
- state the amounts payable by the company to the person or firm holding office as auditor of the company as audit fees and, as a separate item, fees payable by the company for other services provided by that person or firm;
- be signed on behalf of the Board of Directors by two directors of the company or, where the company has only one director, by that director;
- disclose related party transactions and full information about the nature and extent of the conflict of interest;
The auditor of a company shall prepare an auditing report and submit it to the company’s shareholders.
It shall state the following:
- the work done by the auditor;
- the scope and limitations of the audit;
- the proof that there is no relationship, no interests and debt which the auditor has in the company;
- whether the auditor has obtained all information and explanations he/she needed;
- whether, proper accounting records have been well kept by the company;
- whether, in the auditor’s opinion, the financial statements give a true and fair view of the matters to which they relate, and where they do not, shortcomings are identified;
- whether, the financial statements comply with the international accounting standards;
- the auditor‟s opinion and problems that are linked with the company’s management;
- the auditor makes recommendations with regard to the identified problems.
INVESTIGATION BY THE REGISTRAR GENERAL
An investigation can be called where the Minister in charge of companies is satisfied that:
- for the protection of the public, the shareholders or creditors of a company, it is desirable that the affairs of a company should be investigated;
- it is in the public interest that the affairs of a company should be investigated;
- in the case of a foreign company, the appropriate authority of another country had requested that an investigation be made under this article in respect of the company;
He/she shall inform the Registrar General of the recommendation that there should be an investigation into the business of a local company or of a foreign company having its branch in Rwanda.
The Registrar General may without recommendation from the Minister of companies institute an investigation:
- in the case of a company having a share capital, on the application of:
- one shareholder or a group of shareholders holding at least one-tenth (1/10) of the issued shares;
- debenture holders holding not less than one-fifth (1/5) in nominal value of the issued debentures;
- in the case of a company limited by guarantee, on the application of not less than onefifth (1/5) in number of the persons on the share register;
- where he/she considers that the appointment of an inspector is necessary to safeguard the interests of shareholders or debenture shareholders or is necessary in the public interest, require an inspector to investigate the affairs of a company or such aspects of the affairs of a company as are specified in the instrument of appointment and in the case of a debenture agency deed, the conduct of the debenture holders’ representative, and to make a report on his/her investigation in such form and manner as the Registrar General may direct.
APPOINTMENT AND POWERS OF INSPECTORS
An inspector of the business of a company shall be appointed by the Registrar General.
The powers of an inspector shall extend to the investigation of any circumstances which suggest the existence of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to the purposes of his/her investigation. See Article 286
Every person concerned shall give to the inspector all assistance in connection with the investigation which he/she is reasonably able to give for the investigation to be smoothly carried out.
A copy of the inspector’s report shall be forwarded to the Registrar General, to the registered office of the company and to those who requested for it.
The Registrar General may, where he/she is of the opinion that it is necessary in the public interest to do so, ask the body that requested the investigation to cause the report to be published.
Where an inspector’s report suggests that any qualified auditor :
- has been guilty of misconduct;
- has conducted an audit in a manner that is not appropriate;
the Registrar General shall refer that matter to competent authorities for necessary action.