CIS INTERNATIONAL QUALIFYING

BOARD EXAMINATION
OCTOBER 2009

Corporate Secretaryship
Date:

23 October 2009

Time:

09:00 12:00

Duration:

3 hours

Marks:

100

Memorandum
All references to the Act = The Companies Act 61 of 1973
All references to the CC Act = The Close Corporations Act 69 of 1984
All references to ICSA notes = ICSA Corporate Secretaryship study material
All references to CBA = South African Corporate Business Administration by Juta

Page 1 of 14

QUESTION 1 (ICSA notes Chapter 2 2.1, CBA 18.18)

Answer in memorandum format

Check articles whether casual vacancy can be filled by directors.
Resignation letter from Mr Schoeman. Board to confirm/note in meeting or by written
resolution Mr Schoemans resignation and consider the appointment of Mrs Coltman.
Possible extra marks CV of director should be submitted for consideration by the board.
Checking that director is not disqualified and listing disqualifications.
The secretary writes to the newly appointed director confirming her appointment by the board as
follows:
o Requesting personal details which are required to complete Form CM27, specifically name,
residential address, date of birth, nationality business occupation and other directorships within
the past five years director must return it to the company in writing within 28 days of
appointment [section 216 (1)(a)];
o Requesting signature on the consent section of Form CM27;
o Obtaining a specimen signature to be lodged at the companys bank if the director is to sign
cheques on the companys behalf;
o Informing the director of the obligation to disclose any interests in the shares or debentures of
the company and to provide any necessary information regarding these interests so as to make
the relevant entry in the register of directors interests in shares and debentures;
o Inviting the director to give the appropriate notice of interests in any of the companys contracts
and any other external directorate appointments and shareholdings;
o Obtain details of the bank account into which the directors fees should be paid, if any.
King II report recommends that the company secretary arrange induction for new directors.
o Provide director with general information on the company M&A, latest annual report, copy of
last 3 sets of minutes, copy of the code of ethics and any other key policies, information on the
companies directors and officers insurance cover, organograms, key personnel, committee
details, also information on delegation of authority / signatories, schedule of key dates and
forthcoming board meetings. Maximum
o Possibly arrange visits to different offices / branches / divisions of the company.
o Arrange training if necessary on duties and responsibilities of a director or at least provide the
director with applicable sections from the Companies Act, copy of King II report or code.
Maximum
Secretary updates the necessary entries in the register of directors and officers (CM29) and in the
register of directors share and debenture interests.
Submit the completed Form CM29 specifying both the resignation and new appointment to the
Registrar of Companies within 14 days [section 216 (2)].
The company stationery / letterheads which show the names of directors must be amended [section
171].
Other possibilities, but not exceeding max 2 marks: New Director amend signing authority resolution.
Advise shareholders, key creditors and suppliers. Resigning and making herself available for reelection at next AGM. Include in annual report.

Possible extra mark if clarified that in this case not applicable, but would be to a listed
company:
If a listed company, JSE Limited and investors should be notified of the appointment by means of a
SENS notice placed by the end of the business day following the decision to appoint the director. The
fit and proper, Schedule 21, must be completed, signed and sent to the JSE Listings Department.
[20 marks]

QUESTION 2 (ICSA notes Chapter 10: 23 24)

Answer question in report format

With the written consent of all members, a Close Corporation may be converted into a private or
public company if every member becomes a shareholder.
Section 29C of the Companies Act applies.
The Registrar must:
o Register a Memorandum and Articles in accordance with Section 63 of the Companies Act;
o Satisfy himself that the registration of the founding statement of the Close Corporation is
cancelled.
The application must be accompanied by:
o A statement of paid-up capital: any excess of assets over paid-up capital = distributable reserves;
A certificate from the Accounting Officer: stating he is not aware of any contravention by the Close
Corporation or its members of the Close Corporations Act.
All forms and documents which the Registrar would require before registering any company for the
first time. (extra marks not given for more forms / listing all just to be clear that it was understood)
The shareholding ratio of the company need not be in the proportion of members interests (of the
CC) as specified in the founding statement.
The Registrar must give notice of the conversion in the Government Gazette. [Section 29C(5)]
The Company is the successor in title and inherits all the assets and liabilities of the Close
Corporation.
Financial year end: In the first year, the financial year end shall be the same as the CC would have
been.

(Any 6, at least two must be from each comparison )

Advantages and disadvantages CC compared to company
Advantages
Disadvantages
Simplicity of management.
Close Corporations accounting practice is
uncertain.
Simplicity of decision making structure.
In a Close Corporation: all members sign the
annual financial statements.
A Close Corporation may give assistance to a
Every member is an agent of a Close
member to acquire interest.
Corporation.
A Close Corporation may acquire a members
interest.
Transfers of members interests are not subject to Legal system: Magistrates Court orders:
transfer duty.
i) not always reported;
ii) precedent system more difficult;
iii) because of the relative size of Close
Corporations few points of law will go to AD,
so uncertainty will exist (i.e. AD actions are
expensive and time consuming).
Fewer returns to the Registrar.
A Close Corporation can hold shares in a
If a Close Corporation is deregistered while
Company but a Company cannot hold shares in a having outstanding liabilities, the members at
Close Corporation.
the time of deregistration are jointly and
severally liable for such liabilities [Section
26(5)].
No directors or auditors reports required.
Duties of Accounting Officer: not clear.

Advantages and disadvantages company compared to CC

Advantages
Disadvantages
Easier access to funding from banks, especially
Additional requirements for listed companies
when listed.
King II, listing requirements can be an
Option of listing and thereby having access to
administrative burden and very expensive.
equity funding.
Companies, especially listed ones, are also
Employees will likely expect higher salaries /
generally able to attract a higher calibre of staff,
bonuses / share options etc.
because they are able to pay higher salaries, have
incentive / share schemes etc.
Increased governance i.e. audited financials,
Increased requirements can also be an
directors reports etc can be an advantage for
administrative burden and very expensive.
shareholders.
Any other sensible advantages / disadvantages.
Recommendation on the best course of action and rational reasons given.
[20 marks]

QUESTION 3 (ICSA notes Chapter 8: 1, 3.6, 4)

Answer in memorandum format
Section 286 : Duty to prepare annual financial statements and lay them before the annual
general meeting (AGM)
AGM notice 21 clear days
Issued Share Capital (Section 140A(8)(a)): A company must publish in its annual financial
statements a list of persons and their interests which are in excess of 5% of the issued share capital
issued by a listed company.
Loans to directors (Section 295 and 296): Any loans to directors (save for housing loans to
executive directors, if part of a scheme for executives) shall be disclosed, regardless of whether or not
such loan has been repaid. The declaration should provide details of the interest rate payable, the
opening balance and the closing balance of all loans.
Disclosure of directors emoluments (Section 297): Is a breakdown given (in total for executive and
non-executive directors) of basic remuneration, share incentives, retirement and medical contributions
and other benefits?
Directors report - Section 299 (Any 4 for 2 )
Schedule 4, part III, to the Companies Act sets out the matters to be specified in the directors report,
which includes, but is not restricted to the following:
Nature of business.
Changes in share capital.
Major changes in assets.
Amount of dividends paid and proposed.
Whether the company or any part of the group has been managed by a third party.
Names of company secretary and directors and the business and postal address of the
former.
The name of the companys holding and ultimate holding company.

Auditors report + description i.e opinion on going concern, no discrepancies.

Corporate Governance Requirements - Content of the Annual Report (Maximum 10 )

Mission: Detail shall be provided of the Mission, Policies and Objectives for performance
measurement within the company.
Ethics: Detail shall be provided on the implementation of the Code of Ethics of the company.
Risk Management: Steps taken by the company in addressing operational and financial risk.
The Environment: Is the company taking every possible step to minimise the effect of its business on
the environment?
Health and Safety: What is the state of health and safety matters within the company?
Internal Controls: Is the board satisfied as to the effectiveness of internal controls?
The Audit Committee: The report to state:
o The name of the Chairperson (preferably non-executive).
o The names of the members of this committee.
o Do non-executive directors constitute the majority of members? [The King Report requires the
majority of the audit committee to consist of non-executive directors.]
o Are internal and external auditors given unrestricted access to the Audit Committee?
o Does the Committee report to the Board?
o Does the internal audit function examine, evaluate and report on operational and financial
systems and adherence to procedures (if these exist)?
Accounting Standards/GAAP: Does the company comply with GAAP/IFRS and if not, why not?
Accounting Policies: Are accounting policies clearly set out?
The Remuneration Committee:
o The name of the Chairperson (preferably non-executive).

The names of the members of the committee.

Do non-executive directors constitute the majority of members?
Does the Committee report to the Board?
Affirmative Action: Does an affirmative action strategy exist and how does overall performance
compare to goals?
Going Concern: All companies should report that there is no reason to believe that the business will
not be a going concern in the year ahead; and that an effective system of internal control exists and is
being maintained.
Directors: All changes in directors should be reported, as well as the names of directors to be
appointed or re-appointed, together with abbreviated curriculum vitae of all candidates for
appointment as directors.
Corporate Governance Compliant: A statement that the company has complied with the principles
of corporate governance as set out in the King II Report is necessary.
o
o
o

Any other important section or best practice consideration, i.e. Removal of Company Secretary:
Section 268 I(2) of the Companies Act provides that a company secretary who is removed during the
year may require his or her statement of the circumstances surrounding his or her removal to be
published in the annual report. each / depending on complexity, possibly
Internal and external parties
The financial statements, which include the directors report, shall be signed by two
directors - Section 298.
Auditors report to be signed by the auditor - Section 301.
The company secretary shall sign the certificate required by Section 268G(d) of the
Companies Act.
Submission
Public companies are required to lodge annual financial statements with the Registrar of
Companies on a form CM34.
Annual return to be explained properly i.e. not necessarily submission after year-end,
but might be.
[20 marks]

QUESTION 4 (ICSA notes Chapter 11: 1-2, 3.3, 3.4)

4.1

21 days clear notice required for AGM only 21 days available, not 21 clear days,
thus normal notice not possible.
Options:

Arrange the meeting with a shorter period of notice than prescribed: a majority of
members who hold 95% of the voting rights is required to agree [Section 186(2)(a)].

Hold a meeting with no notice: 100% of members are required to agree before, or at the
meeting to waive the notice period [Section 186(2)(b)].

Deal with the business of the AGM by means of a resolution of members pursuant to
section 179 (7) of the Act all members would have to agree in writing. The resolution
must be signed by all members prior to / on the date that the AGM shouldve been held
the effective date is the date that the last signature is affixed. The company only has 7
members and therefore it is a feasible option. If the company had a large number of
members this would not likely be feasible.

If the option is still available to the company, apply for an extension for the holding of
the AGM. Section 179(3) and Section 179(6) of the Act give the Registrar of
Companies the power to extend the date of an Annual General Meeting for a period of up
to 3 months submit form CM17 to CIPRO and pay R100 fee.

Section 179(5) provides that if a company fails to hold an Annual General Meeting, all the
directors and officers who are knowingly a party to that failure have committed an offence. The
company shall, in accordance with section 179 (6) be liable to pay the Registrar additional fees
of R50 for every day during which the default continues, but not exceeding a maximum of
R1000.

Any special resolution may be considered, subject to compliance with all the specified
requirements (including, but not restricted to, period and detail of notice and quorum, as set out
in Section 199 of the Act).
The meeting shall commence with a resolution to take the notice, the Directors Report and the
Auditors Report as read, failing unanimous (100 % of those present) agreement, the Auditors
Report shall be read. [Section 301(3) of the Act]
The Directors Report and Financial Statements shall then be adopted.
Re-appointment or appointment of the auditors.
Election / re-election of directors. Each director shall be voted separately, unless the meeting
first resolves to simultaneously elect more than one director - Section 210 of the Act. Subject to
the provisions of the Articles of Association, this means the re-election of not less than one third
of the directors, which shall start with directors which the board appointed to fill casual
vacancies during the period since the previous AGM and continue with the directors who have
served for the longest period, since their last appointment by members.
Authority for the board to allot authorised but unissued share capital shall be renewed by an
ordinary resolution at each annual general meeting.

4.2

Any 1
In certain companies the Articles require directors and auditors fees to be set by the Annual
General Meeting.
This might be required by the Articles, is the requirement that the AGM shall set the final
dividend.

Section 85 of the Act provides that a company may by special resolution, if authorised by its
Articles, authorise its directors to buy back the companys shares. The special resolution may
only be effective until the next AGM, when another special resolution must be passed.
Directors remuneration / fees.
Any members resolutions proposed. Section 185 of the Act provides that the following may
place an item of business on the agenda for the forthcoming AGM:
o one or more shareholders holding at least 5% of the fully paid up voting capital; or
o not less than 100 shareholders holding shares.
The resolution may be accompanied by a statement of not more than 1,000 words. The
requisition must be lodged not less than 6 weeks before the date set for the meeting, but if the
meeting is subsequently set for sooner, the requisition is deemed to have been validly served.
The procedure is to deposit the signed requisition(s) (stating the object(s) or including any
supporting statement) at the registered office of the company. In most circumstances the board
of the company will not agree with the members resolution, and it is therefore usual for the
board to provide their view on the members resolution in a statement together with a
recommendation to vote for or against that particular resolution. Directors are also at liberty, if
they wish, to add a further resolution in response to the requisitioned business. Section 185
provides that the cost of circulating the members resolution is at the requisitionists expense.
This does not, however, give the requisitionist freedom to circulate a statement without due
regard to its content. Section 185(5) states that a company is not obliged to circulate a members
resolution if, on application to court, the court is satisfied that the process is being abused by the
shareholder to secure needless publicity for defamatory matter. Clear / concise summary, to be
provided indicating proper understanding.
[20 marks]

QUESTION 5.1 (ICSA notes Chapter 12: 4.1, sample wording 12.3)
VALDOS (PTY) LIMITED
[Registered Number 1980/000000/00]
(for above and below noted details)
Agenda
Meeting of the board of directors to be held in the Boardroom, Valdos House,
Johannesburg on 15 November 2009 at 11:00
1. Incorporation and Commencement of Business
1.1 Table the certificate of incorporation and a print of the Memorandum and Articles of Association
as registered.
1.2 Table the Articles of Association signed by the subscribers to the Memorandum of Association,
determining the number of the directors as not less than two or more than five.
2. Directorate
2.1 Note that the first directors of the company named by the subscribers in the statement delivered
to the Registrar of Companies with the Memorandum are ....................................
2.2 Submit declarations of interest in terms of section 234, 235 and 237 of the Companies Act
1973
3. Chairman
To RESOLVE that ................................................... be and is hereby elected chairman of the board.
4. Quorum
5.1 In terms of Article 75 of the companys Articles of Association the quorum necessary for the
transaction of the business of the directors, may be fixed by the directors, and unless so fixed
shall be: 2 if the number of directors does not exceed 3, if no additional directors are appointed earlier in
agenda, thus both members should be present.
Three whilst the number of directors exceeds three, if additional director had been appointed
earlier in the agenda (to add up to maximum of 5 set in articles).
5.2 Declare the meeting duly constituted.
5. Registered office and postal address
Table a copy of the form CM22 reflecting the registered and postal address as:
or
To RESOLVE that situation of the registered office and postal address of the company, namely
................................... , shown in the statement delivered with the Memorandum to the Registrar of Companies,
be confirmed.
6. Auditors
To consider and RESOLVE that .................... be appointed auditors of the company to hold office until the
conclusion of the first general meeting at which accounts are laid before the company.
7. Allotment of shares
By virtue of being subscribers to the Memorandum of Association of the company, to be RESOLVED that the
under-mentioned share certificates drawn in respect of subscribers shares be approved:
No. 1 .................... 50 shares numbered from 1 to 50 inclusive
No. 2 .................... 50 shares numbered from 51 to 100 inclusive
8. Any other business
9. Dates for future board meetings
10. Closure

(12)

QUESTION 5.2 (ICSA notes Chapters 11: 12: 8, CBA 34.5, 34.7)

Opinion on acceptable or not and reasonable argument given.

Hand written minutes not typed 6 weeks later.
No strict timeline for conclusion post the meeting, as in the case of section 204 applicable to
general meetings, but best practice dictates ASAP or at least general meeting guideline (one
month) should be used as indication.
Loose leaves of paper shall not be deemed to constitute a minute book unless they are bound
together permanently, without means provided for the withdrawal or insertion of leaves and the
pages are consecutively numbered.
Possible extra mark: Section 242 (1) minutes should be in official language and kept at
Registered office.
Any company which fails to comply with the requirements of the section, and every director or
officer thereof who knowingly permits or is a party to the failure, shall be guilty of an offence.
Minutes will only be confirmed and signed by the chairman at the next meeting, thus the fact
that minutes are unsigned is not a serious concern per se (depending on the requirements in the
companys articles / standard practice). If unsigned, they should however still be placed and
kept inside the minute book to adhere to this requirement.

If it is the practice to have handwritten minutes and they are not yet the final version, they must
be amended and finalised as a matter of urgency and then pasted into bound minute book.

If the minutes are still to be typed and pasted into bound minute book, this should be done as a
matter of urgency.

(Any 2 of the below or other reasonable considerations / actions proposed)

The following requirements must be adhered to in the case of typed minutes:
o Minutes, which are not handwritten, for insertion in permanently bound minute books
shall be typewritten, lithographed or printed on only one side of the paper, on good
quality paper, with a margin of at least 40 millimetres on the left-hand side of the page.
o Where full-page size permanently bound minute books are used, the pages shall be
numbered consecutively, from the beginning of the book to the end of the book prior to
any entry being made therein.
o A single leaf of typewritten, lithographed or printed minute shall be affixed to each
numbered page of the minute book by means of adhesive paste or glue spread over the
entire surface of the reverse side of the typewritten, lithographed or printed leaf.

Where the minutes are to be inserted in stub pages of a permanently bound minute book:
o The stub pages shall be at least 50 millimetres wide and at least 10 millimetres longer
than the longest leaf on which the minutes are typed, lithographed or printed.
o The stub pages shall be numbered consecutively from the beginning of the book to the
end of the book, and each stub page shall have the same number on the front side and on
the reverse side of the page.
o The single leaf of typewritten, lithographed or printed minutes shall be affixed to each
stub page by means of adhesive paste or glue spread over the whole length of the reverse
side of the leaf to a width of at least 30 millimetres, in such manner that the number of
the stub page is clearly legible on the front side and reverse side thereof.

Any other reasonable comments / arguments.

(8)
[20 marks]

QUESTION 6 (ICSA notes Chapter 13: 2.7, 3, CBA 19)

6.1 Note: Credit given here for aspects strictly asked for inclusion in 6.2 and vice versa, as
long as not credited twice.

6.2

Memorandum format
(7 marks any)
A rights issue is an issue of shares to the existing shareholders pro rata to their existing holdings.
Companies use rights offers to obtain additional funding from the companys shareholders,
rather than obtain working capital by borrowing from banks or other financial institutions.
Usually issued at a discount.
Can dilute shareholding or have the benefit of maintaining ratio if all shareholders exercise their
rights.
Because the offer is restricted to registered members, only an abridged prospectus is required
because the company is not having to cold-sell its shares. Thus a rights offer is not as complex
or expensive as a new issue of shares.
Letter of acceptance (LAs) are to be issued in dematerialised form for the rights offer and must
be renounceable. The JSE may in exceptional circumstances waive this requirement.
Description / definition of renounceable and share splitting.
A rights offer need not be underwritten; however, if it is underwritten, the underwriter must
satisfy the JSE that it can meet its commitments in the manner required by the JSE. If the rights
offer is not underwritten, it must not be conditional on a minimum subscription being received.
Any underwriting commission payable to a securities holder of the company affecting the rights
offer must not be greater than the current market rate payable to independent underwriters. The
applicant must present evidence to the JSE proving the reasonability of the underwriting
commission payable.
A rights offer may include the right to apply for excess securities subject to such right being
transferable upon renunciation of the LAs. In the event of a rights offer including the right to
apply for excess securities, and applications have been received for such excess securities, and
there are excess securities available for allocation, the pool of such excess securities should be
allocated equitably, taking cognisance of the number of securities held by the securities holder
just prior to such allocation, including those taken up as a result of the rights offer, and the
number of excess securities applied for by such securities holder. Non equitable allocations of
excess securities will only be allowed in instances where they are used to round holdings up to
the nearest multiple of 100 securities.
Unless circumstances are such as to warrant a concession being granted, the JSE will require the
LAs to be listed.
Forms of instruction in respect of LAs must be sent to certificated holders, in terms of which:
Form A (Instruction to Sell) and Form B (Form of Renunciation) must require the signature of
the offeree(s); Form C (Registration Application Form) must require the signature of the
renouncee(s); and Form D (Documents of Title) which must not require a signature.
Any other requirement.
(8)
The secretary must (this should be done about 120 days prior to record date)
o check the memorandum and articles to ensure that the procedure is within the powers of
the company. If not, the company must amend its memorandum through the passing of
the necessary resolutions
o draw up a timetable for the procedure

The authorised capital is too low. therefore hold a general meeting to pass a special resolution
increasing the authorised capital and authorising directors to issue additional shares (21 days
clear notice required) Section 199 of the Act applicable, 25% quorum, 75% must vote in
favour. Submit forms CM11 and CM26 to CIPRO.
Hold a meeting of the directors, attorneys, bankers, share transfer secretaries and accountants to
draft details of the offer and notice to members
Hold a board meeting to:
o approve circular to members and the offer document which must include:

date on which qualification takes place

period of closure of transfer registers (if any)

date offer closes

date on which forms of acceptance/renunciation are dispatched
The following information is required to be submitted to and approved by the JSE before
listing/transaction approval will be granted (at least 11 business days before record date):
o the circular or pre-listing statement
o the information with respect to any underwriting
o the application for listing complying with Schedule 2
o the provisional LAs - the following information must be included, inter alia, on the LA:

the salient details of the corporate action must be printed on the front page of the
LA

the instructions in respect of acceptance and payment, sale and renunciation and
registration

where excess securities are made available, the application form must be printed
in a different colour to the LA
o original copies of any exchange control approvals required
o original copies of any experts consents appearing in the circular or pre-listing statement
o the appropriate documentation and listing fee as per Section 17 of the listing
requirements
Send explanatory circular and notice of offer to members and advertise in press (good publicity)
Prepare allocation lists
Print allocation letters which are cross referenced to allocation list. Send copy to Registrar plus
R100 fee (s146A)
Post the offer documents by registered / certified mail.(This is the OFFER component of the
contract)
Open a new share issue account at the bank.
Receive applications and reconcile each to the allocation sheets. (This is the ACCEPTANCE
component of the contract and the offer is irrevocable from this point.)
Hold a board meeting to approve the allotments (signified by the chairman signing each
allotment page)
Issue letters of allotment. As this is not mandatory because there is a binding contract, the letter
is general, does not specify actual shares
List new shares
On the date the offer closes - close and update the allocation sheets with the number of shares
taken
Issue of securities. Publication of results announcement. 16 business days after record date
Send details of the share allotment (form CM15) to the Registrar. Must be within one month of
the date of approval by the board
(12)
[20 marks]

QUESTION 7 (ICSA notes Chapter 7.2 7.4, CBA 10.3.1, 10.3.2)

Max of 3 :
JSE Listing requirements.
Companies Act 61 of 1973 (if not full name, only )
Securities Services Act 36 of 2004 (if not full name, only )
King II (if not full name, only )

Shares are traded through STRATE Share Transfers Totally Electronic which allows
simultaneous payment and transfer on shares.

Max of 3 (if no description of role, only ):

Sponsor a merchant bank, lawyers, accountants or brokers. The sponsors role includes
sponsoring capital issues and the sale of securities to the public generally. They will advise on
the form that the issue should take, the timing and any capital reorganization that may be
required and the issue price. They will also be responsible for the accuracy of the information
provided in the listing particulars.
Transfer secretaries
CSDP
Brokers
Underwriters

Listed company notices are required to be published on SENS (Securities Exchange News
Service) and certain notices are also required to be published in the press.

Continuing obligations is the term used for the regulations and obligations with which a listed
company must comply following the listing of its securities. The continuing obligations are set
out in Section 3 of the JSE Listings Requirements and are designed to ensure a fair market, with
equal access to information by all parties and easy entry to and exit from the market. The
continuing obligations also reinforce the importance of a properly regulated market and help to
increase investor confidence. Companies must submit announcements to SENS to disseminate
regulatory information to the market. No one person or section of the population may receive the
information ahead of any other.
Continuing obligations require a company to notify the investors of the following (any 8)
o Any information on new developments which could lead to a substantial movement in
the price of its listed securities. For example, if the company had been awarded a major
or lucrative contract.
o Any change in the companys expected performance which is materially different from
the expectation of the market. This could include a profit warning/trading statement
which specifies the extent that the level of profit is expected to differ from previous
results or estimates.
o Alterations to capital.
o Changes in class rights.
o Any major acquisitions or disposals.
o The companys annual results and half-year interim results. Listed companies are not
currently obliged to produce quarterly results, but if they do, these too should be released
on SENS.
o The boards decisions on dividends.
o Any change in directors.

o All notices and circulars except those of a very routine nature, such as the appointment
of a director or a notification of a directors dealing in the companys shares, should be
submitted by the sponsor to the JSE for prior approval.
o The continuing obligations provide that a listed company which has not distributed
annual financial statements within three months of its financial year-end shall distribute
to the holders of securities (and publish on SENS) provisional annual financial results.
Should the provisional financial results, in the case of the financial year-end, and interim
financial results, in the case of the half-year period, not be distributed and published on
SENS within three months of the financial period, a procedure will be followed which
includes: 14 days after notice is given of marking the share with RE, followed by the
suspension of the listing.

The freedom of directors and certain employees of listed companies to deal in their companys
securities is restricted in a number of ways by the requirement of the Listings Requirements that
require directors and officers to comply with a code of dealing in securities/shares. This
requirement imposes restrictions beyond those that are imposed by law.
A director of a company should not buy or sell any securities in the company without first
giving a written notification of the intention to the chairman of the board, or other director
designated for this purpose, and receiving clearance for the deal.
Directors should not be given clearance to buy or sell securities in the company during a closed
period, that is, the period between the end of the financial year or half-year and the results being
made public or while the directors concerned possess price sensitive information.
Within 24 hours of having dealt in securities the director concerned shall notify the company
secretary, in writing, of any share dealing including details of the number of securities traded
and the price obtained. The company secretary shall then, within 24 hours, place a notice on
SENS.
Any other reasonable critical aspects (additional marks if 8 marks not already obtained under
continuing obligations).
[20 marks]

END OF MEMORANDUM