SOUTH AFRICA Law and Practice Contributed by: Professor Michael Katz, Matthew Morrison, Madison Liebmann and Sinovuyo Damane, ENS
5.2 Corporate Governance Arrangement Disclosure Position Under the Listings Requirements In addition to the requirements discussed in 5.1 Financial Reporting Requirements , the Listings Requirements impose ongoing obligations on public companies in areas such as periodic financial informa - tion, price-sensitive information, profit forecasts and major company activities. As per King V, good govern - ance is attained through its “apply-and-explain” dis - closure framework, requiring a company to apply the recommended practices proportionally and provide a descriptive account of that implementation, together with a concluding statement on whether the applica - tion has realised value for the organisation (see 1.3 Companies With Publicly Traded Shares for further details). This account, together with the company’s AFS, code of conduct, ethical codes and integrated reports, should be published on the company’s web - site. 5.3 Incorporation and Registration All companies (including external companies and close corporations) must file annual returns with the CIPC within 30 business days after the anniversary of their registration date. The GLAA amendments require companies to include a copy of their AFS and securities registers in annual returns and, for affected companies, a copy of the register of disclosure of ben - eficial interest. If annual returns are not filed within the specified timeframe, the CIPC may deregister the company, terminating its juristic personality. All enti - ties must also file taxable returns with the South Afri - can Revenue Services. 5.4 Global Anti-Money Laundering AML Reporting Requirements The Financial Intelligence Centre Act, No 38 of 2001 (FICA) imposes comprehensive reporting obligations on accountable institutions (entities the Minister rea - sonably believes are used or likely to be used for money laundering, such as banks, legal practition - ers, long-term insurers and company service provid - ers). Accountable institutions must report suspicious or unusual transactions to the Financial Intelligence Centre where they know or suspect that funds are proceeds of unlawful activities or where transactions have no apparent business or lawful purpose. There is
ership registers, and require reporting of material dis - crepancies in beneficial ownership information. Listings Requirements The Listings Requirements mandate issuers to dis - close: • shareholdings of 5% or more in their annual report and circulars; • all directors’ interests in securities; and • beneficial interests in securities and requires issuers to establish and maintain a register of the disclosures made in terms of Section 56 of the Companies Act. 5. Corporate Reporting and Disclosures 5.1 Financial Reporting Requirements On an annual basis, a company must prepare AFS within six months after the end of its financial year, or within such shorter period as may be appropriate in accordance with the Companies Act. The Companies Act provides that the AFS of a public company must be audited and, in the case of profit and non-profit companies, the AFS may be: • audited if it is in the public interest to do so under the Regulations; • audited voluntarily if the company’s MOI so pro - vides; or • independently reviewed in a manner required by the Companies Act. The AFS must be approved by the Board and be presented to the first shareholders’ meeting after the AFS have been approved by the Board and generally include the following information: • a director’s report detailing the state of the com - pany; and • an auditor’s report. The AFS must satisfy financial reporting standards as to form and content if such standards are prescribed.
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