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case – the financial assistance (e.g a loan) has been approved first by the shareholders
by way of a special resolution (which either names a specific recipient or a specific
class of recipients in general, and which was adopted or adopted within the previous
2 years by the shareholders), and the specific recipient falls within that category, and
that immediately after providing the finanical assistance, the board is satisfied that
the solvency and liquidity test will be met, as well as a confirmation that the terms are
fair and reasonable to the company, and that any specific conditions or restrictions
respecting the granting of financial assistance set out in the company’s MOI have been
satisfied.

The Amendment Act introduces a provision whereby the special resolution requirement
will not apply where a company gives financial assistance to its own subsidiary, which
eases the burden of companies providing financial assistance to their own subsidiaries
and having to apply all the requirements of this Section.

FINANCIAL YEAR, ACCOUNTING RECORDS,
FINANCIAL STATEMENTS AND AUDITS

Section 27: Financial Year
A company’s financial year end is set in its incorporation documents, and the first
financial year begins on the date of registration of the company. A company can change
its year end only once per annum. It is also not allowed to backdate a year end change
(the newly established year end must be later than the date on which the notice to
change is filed). After the change, the following year end should not be more than 15
months after year end of the preceding financial year.
Section 28: Maintaining and Keeping of Accounting Records
It is the duty of directors to ensure that the company keeps accurate and complete
accounting records in one of the official languages of RSA at its registered office.
The accounting records must be kept in the prescribed manner and form and must
provide adequate information to enable the company to satisfy all reporting requirements
applicable to it and to provide for:
■ The compilation of financial statements
■ The proper conduct of an audit or independent review of its annual financial
statements (where applicable).

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