Factors Affecting Public Interest Score for CIPC Filing

The Companies Act 2008 established the concept of a Public Interest Score (PI score), which helps the company determine various critical aspects, including:-

  • The financial reporting standards a company must use.
  • Whether a company requires an independent audit and has its financial statements independently reviewed.
  • Whether a company is required to appoint a Social and Ethics Committee.

How is the PI Score Calculated?

PI Score is calculated based on certain financial and non-financial parameters, which helps understand the interest of the public and investors in a company.

What Does the PI Score Mean for Your Company?

If you have a:-

  • PI score of 350 or more – You must have their financial statements audited.
  • PI score between 100 and 349 points – Your financial statements must only be audited if they are internally compiled.
  • PI score of 100 or less – Your company will be exempted from review and audit. However, you must prepare and submit the financial statements to CIPC.
  • PI score of more than 500 points – You must appoint a social and ethics committee.

Certain factors affect the calculation of a company’s Public Interest Score for CIPC filing. Let’s discover what these are and the impact these factors have on the PI score of a company.


What Affects the Public Interest Score of a Company?

CIPC requires every company to calculate its PI score for each financial year. The factors that need to be calculated and affect the PI score include:-

  • Average Number of Employees


According to Labour Relations Act 1995, an employee is

  • “Any person, excluding an independent contractor, who works for another person or the State and who receives, or is entitled to receive, any remuneration; and
  • Any other person who assists in carrying on or conducting the business of an employer, and ‘employed’ and ‘employment’ have meanings corresponding to that of ‘employee’.”


Source: https://www.worklaw.co.za/SearchDirectory/Codes_Of_Good_Practice/staff.asp

Keeping in mind the above-stated definition of an employee given in LRA, the employee average for a company is calculated during the 12 months making up a financial year. This method accurately indicates the employee base throughout the year. A change in employee base can bring fluctuations in the PI score of the company.


  • Third-Party Liability

At the financial year-end, one point is assigned for every R1 million (or portion thereof) in third-party liability of the company. There is no set definition of third-party liabilities in the act. The conservative view suggests including all the liabilities and provisions with any related parties in calculating the PI score. However, another view suggests including only those liabilities that are payable to an identified third party.


  • Turnover

One point is assigned for every R1 million (or portion thereof) in the company’s turnover during the financial year. Turnover calculates how quickly a business conducts its operations by collecting cash from accounts receivables or selling its inventories. A variation in the annual turnover results in a change in the PI score of the company.


  • Beneficial Interest

The beneficial interest is a person’s right concerning a company’s security through ownership, relationship, or agreement. How does it affect the public interest score? In a profit company, one point is allocated to every individual with a direct or indirect beneficial interest in any of the company’s securities. Whereas, in a non-profit company, one point is allocated to every member or a member of an association that is a member of the company.


The XBRL Road Ahead

Many factors can affect the PI score of a company. Therefore, calculating this score requires sound judgment and expertise. In the event of any uncertainty in calculating the PI score, you must obtain professional guidance.

To learn more about calculating your company’s PI score for CIPC filing, speak to a DataTracks expert at +27-10-446-9061 or visit their website.

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