Records storage essential says Metrofile
Published:2011/09/26 07:43:12 AM
LISTED document storage company Metrofile warned on Friday that directors of local businesses needed to ensure they fully complied with the latest record-keeping regulations in terms of the new Companies Act.
This was necessary in order to avoid potential legal action and, in some cases, imprisonment and business closure, the company said.
Metrofile’s business is focused on the management of information and records storage.
Richard Buttle, the chief financial officer of Metrofile Holdings , said the new Companies Act clearly stipulated that local businesses needed to securely store and manage select, key company records for up to seven years, highlighting the importance of good records management practices.
In terms of the act, companies are required to keep documents such as reports presented at annual general meetings, annual financial statements, accounting records, notices, minutes and resolutions of all shareholder meetings. They also have to keep any documents made available by the company to the holders of the securities in relation to such resolutions.
Also, the act required that records be kept in written form or a format in which they could be easily retrieved and converted into written form within a reasonable time, he said.
"Businesses need to realise that company information and records are assets and should begin to treat these documents as such," said Mr Buttle.
Natasha Bouwman, legal specialist at the Institute of Directors in Southern Africa, said it was "vitally important" for all directors to ensure they complied with the act by conducting a detailed compliance review, as well as seeking expert advice from internal or external legal advisers.
"Compliance software programs can also be utilised to measure compliance with the new Companies Act, but care should be taken that these programs sufficiently cover the entire act’s provisions," she said
Mr Buttle said the act required certain company records to be accessible to shareholders or members, and must be open to inspection at all times.
"Due to the complexity of retention periods paired with the need for instant accessibility, storage space and data back-up requirements, an effective record management system must be implemented to ensure that compliance with the new act’s regulations are met," he said.
This month, Metrofile reported a 38,2% increase in headline earnings per share to 18,1c for the year to June. Revenue was up 12,4% to R460,5m. The company said there was still a demand for paper storage despite the growth of electronic record keeping. Paper storage grew 10%-12%.
Metrofile is expanding its business operations into Nigeria and Ghana, with some key countries in East Africa such as Kenya likely to be next