Autistic Young People’s Training Apartment in Warsaw. Appeal for your support.


Nie Z Tej Bajki” in Warsaw established 2 years ago the first vocational school for autistic young people in Poland. We plan to a training apartment to the School from next September. We have been granted a favorable lease right near the School. However, renovating this will require a large financial commitment.

The parents alone can’t do it without your help. Please use the bank details in the letter and kindly help. The information will enable you to help from Poland or from abroad.

Many thanks in anticipation of your support.

Prosba o wsparcie osób z autyzmem Nie z tej bajki- mieszkanie

Happy “Niú” Year!


祝您新春快乐,牛年大吉!
Zhù nín xīnchūn kuàilè, niú nián dàjí!

Happy year of the Ox!

Afrikaaner breed grazing in Transkei

I am not a literal believer in horoscopes of any kind, either Western or Eastern ones, taken literally they are a form of the occult and not for Christians or anyone else who desires not to be led astray by them.

I do however recognise that the naming of years, months, days and other parts of life have a pagan origin, also in the West, and that for most of us these are not taken literally. We don’t baulk at the idea that our weekdays are named after planets which in turn are named for pagan deities, so likewise we accept that for Chinese people saying that the year we are now entering by their calendar is the year of the Ox is also part of the culture and to be valued as such, but any auguries made on that basis are to be taken with a pinch of salt.

Nevertheless, I like oxen, and having a year named for them is not a bad thing, really. When you consider all the benefits we have from cattle, in terms of dairy products, meat products, leather, fertiliser and traction. 


The Bible moreover has a great deal to say about oxen. I would like to take one verse of the BIble and make it in a sense a “verse of the year” for this Year of the Ox.

1 Timothy 5v18 says:


“For the scripture saith, Thou shalt not muzzle the ox that treadeth out the corn. And, The labourer is worthy of his reward.” (KJV)

“λέγει γὰρ ἡ γραφή Βοῦν ἀλοῶντα οὐ φιμώσεις καί Ἄξιος ὁ ἐργάτης τοῦ μισθοῦ αὐτοῦ” (TR)

I have a couple of points to draw out of this verse:

  1. the immediate context is that of the people who have as it were offices in the Church, in this case elders or Presbyters, should make a living, and in says in the preceding verse “a double honour”. I take this to mean that the personal income of a faithful minister in the Gospel, if it’s double the average wages of the people in the congregation, isn’t excessive. Note (and this is for Brother Copeland and other rather richer pastors especially those where their own flock is not wealthy) it doesn’t say “quadruple honour” in that preceding verse, or “tenfold honour” but “double”. Those who keep their minister in poverty are mean and niggardly, those who keep him in luxury are fools and they all are poor witnesses.

  2. In a broader context, the Old Testament allowed oxen to eat as they worked. In the modern context we have people working on matters and being allowed no fringe benefits whatsoever from what they work on. OK I get the controls in diamond mines, you cannot go smuggling out small diamonds under your fingernails because you were paid for the work to get them and that’s what you are paid to deliver, where the value is. But the pay must be fair. More broadly, if you work with food all day it’s not fair if you have that food in front of you and cannot at least taste a bit, or have first dibs on the leftovers. Sitting next to a photocopier all day and breathing its ozone, but not being able now and again to use it for something your kid needs for school is also not normal. If we are to treat oxen as having a small share in the value they are creating, then for sure this ought to be a standard for humans also.


    May 2021 be a year where people are more able to have a fair share of the value they co-create than they have been in previous times. I am no socialist, and I don’t wait this imposed on us by Big Government. I would prefer to have owners of businesses think again on their own accord and consider that an equitable, partnerly mindset that seeks to be fair to all the stakeholders, including Bob Cratchett, is the most satisfying and sustainable way of doing business and the only way in which a Christian business owner can give a worthy witness.

    In the Greek original, which I gave above, we see emphasised in orange the word ox as Bos in Greek (Boun is accusative, for your information). In English we have the term Boss with an additional -s as the word for a chief in business, but not only the chief is an ox, everyone in the team is also a Bos and it’s no yoke if they are not muzzled and not treated fairly. He who would be master must be servant of all of his people.

 

What actually happens if we adopt the Vegan arguments?


Human built area pushes into the green area. On piece of land rarely has a mujtiple purpose in that regard
We’re pushing the forest back one way or another

Let us do a small thought experiment.

Let’s imagine that the meat and dairy industries are cancelled, that everyone is convinced of the vegan arguments. Which of the following scenarios is then more likely?

a) the fields where the pastures for cattle were are allowed to continue as pastures full of natural biodiversity, with cover for birds and butterflies and wild flowers of all sorts have their haven there, grazed by cattle who now live until they are 22 years old, and die natral deaths, unbothered by humans. The original aurochs gradually reappears because the races of cattle interbreed and these majestic buffalo like beasts are viewed in huge herds at a distance by our great grandchildren. Occasionally we grow a field of crops on a field naturally fertilised by their natural grazing activities.

or

b) since we cannot use the cattle we don’t keep them and cattle as well as other farm animals with the possible exception of ducks and geese are threatened with extinction. We use the pasture land which has no sense without animals on it for crops (food or energy) and since these are monocultures it stresses to extinction several species of bird, many plants and insects which only survived till now because we had pasture for meat and dairy industries. Organic farming has no sense as there are no animals to provide the dung, so we keep on using agrochemicals and reach peak phosphorus and peak potassium faster. There is then a massive famine during which two to three billions simply starve to death, and a further several million from diseases aggravated by malnutrition, or food wars.

I you answered A, I may say you’re a dreamer, and by far and away not the only one. And that, for now, is a very big problem.

Certainly Bible prophecy shows a vegan or at least vegetarian heaven – Jesus ate fish after the resurrection so probably that is still going to take place – but we are not equipped for that now any more than we can run and not be weary, or walk through locked doors, or fly up into the sky by our own mere volition. These things go hand in hand and we need to wait for them, if we are looking for them as believing Christians.

For now the task is to use the animals but to treat them as well as we can, to increase the standard of care for each species, to take te reforms made in this direction over the last 25 years as a good start, and build on them.

We are also going to have to address the population issue, as there is not any answer to the issue of agriculture and the limit on yields other than the control of population.

The “solution” of taking animals out is not a solution when they are on land not classed as arable. We cannot eat wild grasses or scrub. A goat eats the scrub, we milk the goat. That’s how we do it.

The nineteenth century was all about obtaining more and more farmed land. In the twentieth century we had to slow that process right down as a limit was reached on how much forest we can take and still have a future.

The twentieth century was all about mechanisation, innovation, agrochemicals, management methods, new varities like Borlaug’s dwarf wheat or cattle with hyperplasia.

Welcome to the C21st, where we are now relatively out of ideas, out of somewhere to go to keep food production ahead of the curve in population. So the only thing left to do is to work on the popuation. And with that comes a lot of Government intervention, probably very unwelcome Government intervention.

The profit and loss account, and why it looks the way it does


All those of us who have studied double entry bookkeeping will remember their earliest lessons, in which we are told how the balances of the various accounts in the general ledger are taken to one of two statements at the end of the reporting period.  One of these is the balance sheet, which (we were told in lesson one) is like a family photo, a snapshot of your business at one particular point in time, and therefore is “na dzien”, and the other statement is the profit and loss account, which is a story of how the family developed and what happened to them between the last photo, and the current photo.  Put simply, a profit and loss account is the story of how you get from one balance sheet to another.  There are in fact other ways in which balance sheet items can change which don’t involve things passing through the profit and loss account, but international standards of accounting seem to prefer it when as much as possible going on between an opening and closing balance sheet for a reporting period (usually a year) is reflected to the maximum degree possible in the profit and loss account, or as it is now fashionably known, the statement of income and expenditure.

What I wanted to talk about in this article is to let us think I’m at about the order in which things appear in a typical profit and loss account.  This is worth doing as there are many different layouts for the balance sheet as you go around the world (the Americans have theirs, the British have theirs, the continental Europeans have theirs and each of the above look somewhat different) but there is a lot more uniformity as you go around the world in the order in which things are set out in the profit and loss account, or statement of income and expenditure.

Invariably the first thing that it deals with is the issue of turnover.  In most countries which have VAT, but by no means all, the turnover figure in published accounts is shown net of VAT.  That is how it is done in Poland and that is the way in which international standards would also have us do it.  Similarly the expenses, where VAT applies which can be reclaimed by the entity, are shown net.  (This of course is different to the balance sheet, where debtors and creditors are shown gross of VAT and the difference which you would have in the profit and loss account if those items were shown gross ends up in the VAT control account).

The first question that our profit and loss account seek to answer is whether the business is making a profit or loss regardless of how it is financed or tax.  It is also good to show items which are likely to be normal recurring items, and not one-off or extraordinary items in the first part of the profit and loss account.

Hence the top of most people’s profit and loss accounts as you go around the world deals with the question of ordinary sales income and the costs incurred to get to that sales income, giving a basic idea of profit.  Before you add in the cost of selling an administration, while you are still looking at a cost of goods sold or the cost of providing the services of is a service company, the profit figure achieved is known as gross profit.  Exactly what costs and what revenues make up that gross profit actually do differ quite significantly from one firm to another firm depending on the business, and the principles of management accounting have quite a lot to say in how we will classify the costs and revenues going into the gross profit line.

Once we’ve subtracted from the gross profit other operating costs such as the selling and administration costs, we come down to something called profit on ordinary operating activities.  After that it might be a good time to look at the extraordinary activities that happened which were still operational, or “other” activities which are not core, such as sales of fixed assets or unusual write downs, and this gives you the operating profit.

The next question that the profit and loss account will seek to answer is the cost of financing the business.  We are still well before the point at which tax is applied, as finance charges such as interest on business loans are usually tax allowable.  We look in this section of the profit and loss account at the interest received and take off the interest paid.  In Poland we have just about any foreign exchange differences also appearing in this section, where as in most western countries it would be considered correct to examine foreign exchange differences to see whether they really appeared on financing decisions or an operational decisions, and put them in the correct part of the profit and loss account depending on the answer to that question.  In Poland they are automatically considered to be part of the financing decision, which is not always true and therefore sometimes leads to misleading ratio analysis unless this is taken into account by the analyst.

At this point the profit and loss account will show us the profit on all the ordinary activities, and the next question that it starts to answer is what the tax is on that.  If a company is applying deferred tax, then the tax figure shown in the profit and loss account will be normalised tax on the profits to that point.  It takes account of timing differences between operational treatments of transactions and there tax treatments.  This means it probably won’t be the same as the figure on the tax return for the year.  The difference between the figure in the profit and loss account and the figure on the tax return for the year is usually going to be the amount added to or subtracted from the deferred tax assets and liabilities and the balance sheet.

In Poland that is usually the end of the line for the profit and loss account, however in some groups the profit and loss account goes on to answer the question ‘how about minority interest?’ which comes after the tax question because tax falls regardless of who the minorities are, and then questions about dividends are dealt with in the profit and loss account in many countries, but not generally so in Poland.

In order not to get confused the questions which the profit and loss account is trying to answer, it is important to observe the order of information, and also to consider whether an item is needed in order to help is to say the very important question of whether the underlying business is profitable or not, and the more the answer to that is yes, the higher up in the profit and loss account you should show it or expect to find it.

 

What do you want out of business?


The picture shows the typical stakeholders of ...
Some stakeholders, yesterday

Governance and strategy are what this blog is all about, but governance and strategy themselves are actually all about making sure that business delivers its intended objectives.  Objectives, in their turn, derive or ought to derive, from the mission statement of the organisation.  The mission statement is supposed to say what the stakeholders want out of the business.  Therefore even though this may seem to be a post on a lighter note than some of the posts in this blog, nevertheless I believe that this question really gets into the heart of what strategy and governance are actually all about.  Strategy and governance are all about making sure that we want out of the business, we get.

Therefore the starting point needs to be to ask ourselves the question, what is it that we actually want from business? This is a question which I’d like to ask today to anybody who is a stakeholder, please note I didn’t say “shareholder” but “stakeholder” in any business.  Please consider the businesses in which you are a stakeholder, please identify the one which has the greatest importance to you of those businesses, and with regard to that particular business, please put into the poll below all of the answers which you see as being things that you want out of that business.  Things that you are looking for from your stake as a stakeholder in that business.

Hopefully this will show a nice cross-section of the different things which stakeholders are actually looking for from businesses, but if you can see in the list something which you are particularly looking for from your business please feel free to add it in the comments afterwards.

Many thanks for taking part in the poll.

Domain names scam – what to do if affected


World Map Politic 2005 with ccTLDs - LQ version
CCTLD map from Wikipedia

You may have received e-mail (especially from Chinese and Hong Kong companies relating to .cn domains bearing your name if you didn’t register in China, but now more commonly in East Europe also) which says that if you use these people’s services they can prevent your name’s domain in that country from getting blocked.

Now this email gets sent out all over the world to addresses harvested from the internet page and chats and from usenet fora by robots, and of course the people behind the email cannot really afford to block every single domain that they are fishing for.  The one sure fire way of making sure that they do block your domain is if you respond to them, whether with threats or with asking for the help, even in terms of “what it would cost”. I suggest you only do this if you don’t want the domain really and have no intention of buying it, as if you are lucky it will lead the scammers into real cash outlay which they’ll never see any return on. I highly encourage that! Maybe some of these pests will stop it if they see that enough internet users are wise to them and don’t mind leading them up a garden path…

You can always search here on EuroDNS (in the interests of transparency that affiliate link earns 10% of anything you buy after you go there, but it shouldn’t cost you more and it’s the service I use myself) and see what the status is of all of your possible combinations of your name and the country endings or generic endings, as well as check the Whois status of all these countries, both Europe and Asia, all in one place. You will probably find that nobody has blocked your domain at all, and if you are interested in owning the domain you can block it there and then. They are ethical and I never had a problem with them that the owner didn’t solve within a week. If they are not contactable one day you can usually get them the next day. Continue reading “Domain names scam – what to do if affected”

Should your Company have a pro-forma audit?


Mostrador de um relógio Foto de Jose Goncalves
Tempus fugit - is it time for your proforma audit?

For businesses which have never been audited but which are growing up quickly to meet the audit thresholds in a year or two, you may wish to consider having your first audit done while it is still voluntary to do so, and the results, if less positive than expected, can at least be kept private.

Once your business has exceeded the audit thresholds (very typically in Europe this means for a private company about 50 employees, 5 million Euros turnover and 2.5 million Euros of gross assets, and it means 2 out of those three conditions – we just stated actually the Polish ones verbatim, (with the proviso that they also state a set PLN amount to avoid subjectivity for businesses that are on the cusp), but most countries are not far off that – even the Czech Republic which really needs much smaller thresholds)

Clearly this doesn’t apply at all to public limited companies, ie. the “S.A.”, “a.s.”, UK plc or German AG style companies which must be audited regardless of size – in some jurisdictions even if they are dormant – but for private limited liability companies most jurisdictions have size criteria like the ones just given – for Slovakia about 60% of the sizes given, so please note that this is divergent from the Czech ones, which are far too high for that country and result in proportionally fewer audits, which is a bad thing for corporate governance in that country.

While you are under the limits audit is voluntary. And you can have an unofficial audit whereby the audit comes and does for you all the normal work he would do if officially appointed, but it is only pro-forma. “Pro-forma” is Latin for something like the idea of “as if” so the auditor will work and report as if they had been properly appointed, but it is really a dry run for you. You do not appoint them as statutory auditors in the minuted general meeting, you do not have to file the report as the audit was voluntary, and you get all the benefit of the audit without the risk, and on top of all of that, I can get you these pro-forma audits for only 75% of the cost of a statutory audit, because the Firms we associate with want to promote good voluntary governance practice in the economy.

If you wait for your first audit until it is an obligatory one because you’ve outgrown the size criteria – and as we come out of the recession that will happen to some of you next year hopefully sooner than you dare hope for now – then if the auditor finds something wrong then the report of the auditor could be “modified” – I’ll do a separate article on what sorts of “modifications” exist and what they mean in accountancy speak, but it’s not good if you get one.

It will not help if you need a loan, and it will probably trigger a lot of interest on the part of the tax inspector. But you’ll have to publish it anyway, if there isn’t time to do the remedial work a good auditor should outline to you in time for your statutory deadline.

Now auditors get cajoled, encouraged in a friendly way or even outright threatened by desparate managers and owners to overlook things or change to an opinion that doesn’t match the facts, and there is nothing that can be done in those circumstances. Auditors are not generally anywhere near as afraid of their client as they are of their regulator, but more than that we are educated throughout our professional lives to be independent in our outlook, and so the only way to get out of some modified opinions is to do the remedial work the auditor recommends or make the adjustments that they recommend.

There’s no point in changing to another auditor you think will be more pliable – they must write to the old auditor and ask if there are any reasons why they cannot act. The best thing to do, if you are not sure how well your company will stand up to an audit is to have your first one a year or so before you need to. Then if the audit shows up a lot to be desired, you have a whole year to put it right and nobody will ever know because auditors are bound by confidentiality – it isn’t us who even publish our reports, it’s the responsibility of the client. The report is given to its addressee, which is always the shareholder, and some other corporate governance boards if they are in existence.

So it’s well worth thinking about, especially if your business has been growing fast and maybe has outgrown its systems.

Let us know if we can help.