Companies Amendment Act

30 April 1999 No. 51j. I 30 April 1999 It is hereby notified that the President has assented to the following Act which is hereby pllblished for general information:— Hierby \vord bekend gemaak dat ciie P r e s i d e n t sy goed- keuring geh~g het aan d i e onderstaande Wet w~t hierby ter ~llgemene inllgting gepLlbliseer word:— No. 37 of 1999: Companies Amendment Act. 1999. I No. 37 \an 1999: hlaatskappywysigingswct. 1999. .\L.t \(). 37. 1Y9L) (’()\ ll’\sl F,s }\\ I1-xl)71t:N”l” ,-\(’”1’. 190~) GENERAL EXPLAN.4T0R}’ NOTE: [ 1 \vord\ in i}o]d type in square brackets indica(et)lllissi(lns Irom existing cn;}ctrnents. \Vords underlined ~ith ~ solid line existing enactments indicate insertions in ACT To amend the Companies Act, 1973, so as to provide for a company to acquire its own shares; to provide for the disclosure of a beneficial interest in securities; to provide for the mandatory appointment of a secretary for a publjc company; to further provide for the disclosure of directors’ emoluments, pension and details in penalties; and to respect of their service contracts; and to provide for certain provide for matters connected therewith. B E IT ENACTED by the Parliament of the Republic of follows:— South Africa, as Amendment of “Arrangement of Act” of Act 61 of 1973, as amended by section 1 of Act 78 of 1989

1. The “Arrangement of Act’. of the Companies Act, 1973 (hereinafter referred [o as 5 the principal Act). is hereby amended- (CJ) by the substitution opposite “CHApTER V.’ for the words “Reduction of Capital” of the words “Acquisition by Companies of own shares”: and (/>) by the insertion after ‘CHAPTER IX” of the following expression: “CHAPTER lXA Secretary for Public Companies . . 268A–2681”. 10 Amendment of section 1 of Act 61 of 1973, as amended by section 1 of Act 76 of 1974, section 1 of Act 64 of 1977, section 26 of Proclamation 234 of 1978, section 1 of Act 84 of 1980, section 1 of Act 83 of 1981, section 1 of Act 29 of 1982, section 1 of Act 31 of 1986, section 1 of Act 82 of 1992 and section 1 of Act 35 of 1998

2. Section 1 of the principal Act is hereby amended by the substitutic~n in subsection 15 (1) for the definition of “oficer’. of the following definition: ,. ‘ officer’, in relation to a company. includes any managing director. manager or secretary thereof [but excludes a secretary which is a body corporate];”. 4 Amendment of section 38 of Act 61 of 1973

3. Section 38 of the principal Act is hereby amended by the insertion of “or” at the 20 end of paragraph (c) of subsection (2) and the addition of the following paragr~ph: 4 No. [9983 Act No. 37.1999 GO\ ’ERX\lE~T GAZE~E. 30 APRIL 1999 CO\ fP.+NIES AMENDN4ENT ACT. 1999 “(d) the provision of financial assistance for the acquisition of shares in a company by the compan>’ or its subsidiary in accordance with the provisions of section 85 for the acquisition of such shares.”. Amendment of section 39 of Act 61 of 1973, as.amended by section 3 of Act 76 of 1974 5

4. Section 39 of the principal Act is hereby amended— (a) by the substitution for subsection (1) of the following subsection: “(1 ) Save as is provided in subsection (2). if shares in a company are acquired in accordance with section 89 by its subsidiary, for so long as such shares are held by the subsidiary— (a) no voting rights attaching to such shares maybe exercised; and (b) the percentage of votes able to be cast at any meeting of shareholders shall be reduced by the number of shares held by the subsidiary: Provided that this subsection shall not apply where the shares are acquired in a subsidiary of the holding company which is also a subsidi ary of the acquiring company.”. 10 15 (b) by the deletion of subsections (3) and (4). Amendment of heading to Chapter V of Act 61 of 1973

5. The heading to Chapter V of the principal Act is hereby amended by the 20 substitution for the words “Reduction of Capital” of the words “Acquisition by Companies of own Shares”. Amendment of section 76 of Act 61 of 1973, as amended by section 5 of Act 76 of 1974 and section 3 of Act 82 of 1992

6. Section 76 of the principal Act is hereby amended by the insertion of “or” at the 25 end of paragraph (c) of subsection (3) and the addition of the following paragraph: “(d) for the payment of the premium over tbe par value in the case of an acquisition of shares in accordance with section 85.”. Substitution of heading before section 83 of Act 61 of 1973

7. The following heading is hereby substituted for the heading before section 83 of the 30 principal Act: “Acquisition by Companies of ott’n Shares”. Repeal of sections 83 and 84 of Act 61 of 1973

8. Sections 83 and 84 of the principal Act are hereby repealed. Substitution of section 85 of Act 61 of 1973 35

9. The following section is hereby substituted for section 85 of the principal Act: “Company may under certain circumstances acquire shares issued by it 85. (1) Subject to the provisions of this section and any other applicable “ law, a company may by special resolution of the company, if authorized thereto by its articles, approve the acquisition of shares issued by the company. (2) The approval by special resolution may be a general approval or a 40 specific approval for a particular acquisition. (3) If the approval is a general approval, it shall be valid only until the next annual general meeting of the company, but it may be varied or 45 (1 K(, 1998.7 Act No. 37.1999 GOVERNMENT GAZETTE, 30 APRIL 1999 CO\[P.\NIES AhlENDMENT ACT. 1999 revoked by special resolution by any general meeting of the company at any time prior to such annual general meeting. (4) A company shall not make any payment in whatever form to acquire any share issued by the company if there are reasonable grounds for believing that— (a) the company is. or would after the payment be, unable to pay its debts as they become due in the ordinary course of business; or (b) the consolidated assets of the company fairly valued would after the payment be less than the consolidated liabilities of the company. (5) In the case of the acquisition of par value shares issued by the company. the issued capital shall be decreased by an amount equal to the par value of the shares so acquired. (6) In the case of the acquisition of no par value shares issued by the company, the stated capital of the class of shares so acquired shall be decreased by an amount derived by multiplying the number of shares of that class so acquired with the amount arrived at by dividing the stated capital contributed by issued shares of that class by the number of issued shares of that class. (7) If par value shares are acquired at a premium over the par value, the premium may be paid out of reserves, including statutory non-distributable reserves. (8) Shares issued by a company and acquired under this section shall be cancelled as issued shares and restored to the status of authorized shares forthwith. (9) Shares in the capital of a company may not be acquired under this section if, as a result of such acquisition, there would no longer be any shares in issue other than convertible or redeemable shares.”. 5 10 15 20 25 Substitution of section 86 of Act 61 of 1973

10. The following section is hereby substituted for section 86 of the principal Act: “Liability of directors and shareholders under certain circumstances 30 8~to the provisions of section 85(4), allow the company to acquire any share issued by it, are jointly and severally liable to restore to the company any amount so paid and not otherwise recovered by the company, subject to any relief granted by the Court under section 248. (2) A director who is liable under subsection (1) may apply to the Court for an order compelling a shareholder or former shareholder to pay to the company any money that was paid to such shareholder contrary to section 85(4). 35 (3) Where the acquisition by the company of shares issued by it is in 40 contravention of the provisions of section 85(4), any creditor who was a creditor at the time of the acquisition, or who is a creditor by reason of a cause of debt which arose before such acquisition, or any shareholder, may apply to the Court for an order, and the Court may, if it finds it equitable to do S* (a) order a shareholder or former shareholder to pay to the company any money or return any consideration that was paid or given by the company to acquire the shares; order the company to issue an equivalent number of shares to the shareholder or former shareholder; make such other order as it thinks fit. (b) (c) 45 50 4 s x(>. 199s.~ GO\”ERXhlENT GAZETTE, 30 APRIL 1999 .4ct No. 37, 1999 CO\l P\NIES AklEh’DMENT .ACT. 1999 (4) An action to enforce a liability imposed by this section must be instituted within three years after the date of completion of the acquisition. (5) Nothing contained in this section shall limit or diminish any liability which any person may incur under this Act or any other law, or the common law, (6) For the purposes of this section and section 89 ‘director of a companj 7’ includes any director of a holdin~ company of such companv.’.. 5 Substitution of section 87 of Act 61 of 1973

11. The following section is hereby substituted for section 87 of the principal Act: “Procedure of acquisition of certiin shares by company 10 87. ( 1 ) Save as is provided in subsection (2), a company that proposes to acquire shares issued by it shall— (a) deliver or mail a copy of the written offering circular in the prescribed form. to each registered shtieholder on record as at the date of the offer in such manner as may be provided in the articles of the company for the sending of any notice of a meeting of shareholders, stating the number and the class or kind of its issued shares which the company proposes to acquire, and specifying the terms and reasons for the offer; (17) lodge a copy of the offering circular with the Registrar within 15 days of the date that it is delivered or mailed to the shareholders of the company. (2) The provisions of subsection (1) shall not apply- (a) if, and to the extent that, the shares are acquired in terms of the special resolution passed in terms of section 85(3); (b) in the case of a company whose shares are listed on a stock exchange within the Republic. to the acquisition by that company of shares in terms of transactions effected on such stock exchange in accordance with the rules and listing requirements of that exchange. (3) The provisions of sections 160, 161, 162 and 163 shall apply mutatis mutandis to all documents issued in terms of subsection (1). (4) Where in response to any offer to acquire shares, the shareholders propose to dispose of a greater number of shares than the company offered to acquire, the company shall acquire from all of the shareholders who offered to sell, pro rata as nearly as possible disregarding fractions: Provided that this subsection shall not apply to the acquisition of shares in terms of transactions effected on a stock exchange within the Republic. (5) A company that acquires shares issued by it shall notify the Registrar within 30 days of the date of the acquisition in the prescribed form of the date, number and class of shares that it has acquired. (6) A stock exchange within the Republic may, in addition to any requirements contained in this Act, determine further requirements with which a company whose shares are listed on such exchange shall comply prior to such company acquiring its own shares.”. 15 20 25 30 35 40 Substitution of section 88 of Act 61 of 1973

12. The following section is hereby substituted for section 88 of the principal Act: 45 “Enforceability of contrac~ for acquisition by company of cerbin shares l 88. (1) A contract with a company providing for the acquisition of shares I () No. 199X3 Act No. 37, 1999 GOVERXNIENT GAZETTE. 30 APRIL 199[) COh4PANIES AhlENDh4ENT ACT. 199Y issued by it is enforceable against the company, except if the company cannot execute the contract without being in breach of section 85(4). (2) In an action brought on a contract referred to in subsection (1), the company has the burden of proving that execution thereof is or will be in breach of section 85(4). (3) Until the company has fully performed its obligations in terms of a contract referred to in subsection (1), shareholders who dispose of their shares retain the status of claimants entitled to be paid as soon as the company is lawfully able to do so or, on liquidation, to be ranked subordinate to creditors and shareholders whose claims are in priority to the claims of the class of shares which they disposed of to the company, but in priority to the claims of the other shareholders.”. Substitution of section 89 of Act 61 of 1973

13. The following section is hereby substituted for section 89 of the principal Act: “Subsidiaries may acquire certain shares in holding company

89. Subsidiary companies may mutatis mutandis in accordance with sections 85, 86, 87 and 88, acquire shares in their holding company to a maximum of 10 per cent in the aggregate of the number of issued shares of the holding company: Provided that this section shall not apply to the acquisition of shares by a holding company in a subsidi~ of itself.”. Substitution of section 90 of Act 61 of 1973

14. The following section is hereby substituted for section 90 of the principal Act: “payments to shareholders 5 10 15 20 90. (1) A company may make payments to its shareholders subject to the provisions of this section and if authorized thereto by its articles. (2) A company shall not make any payment in ‘whatever form to its shareholders if there are reasonable grounds for believing that— (a) the company is, or would after the payment be, unable to pay its debts ] 25 as they become due in the ordinary course of business; or (b) the consolidated assets of the company fairly valued would after the payment be less than the consolidated liabilities of the company. (3) For the purposes of this section ‘payment’ includes any direct or indirect payment or transfer of money or other property to a shareholder of the company by virtue of the shareholder’s shareholding in the company, but excludes an acquisition of shares in terms of section 85, a redemption of redeemable preference shares in terms of section 98, any acquisition of shares in terms of an order of Court and the issue of capitalisation shares in the company. (4) A shareholder shall be liable to the company for any payment received contrary to the provisions of subsection (2).”. 30 35 40 Amendment of section 98 of Act 61 of 1973, as amended by section 4 of Act 64 of 1977, section 15 of Act 69 of 1989 and section 6 of Act 35 of 1998

15. Section 98 of the principal Act is hereby amended by the substitution for subsection (4) of the following subsection: “(4) The capital redemption reserve fund may, notwithstanding anything in this 45 section contained, be applied by the company in paying up unissued shares of the 12 S,l 199s3 GOVERNMENT GAZETTE. 30 APRIL 19YY :ict No. 37.1999 CO\ fP.ANIES AMENDMENT ACT, 1 Y99 company to be issued to members of the company as fully paid-up capitalization shares or for the payment of the premium over the par value in the case of an acquisition of shares in terms of section 85.’”. Insertion of section 140A in Act 61 of 1973

16. The following section is hereby inserted after section 140 of the principal Act: 5 “Disclosure of beneficial interest in securities 140A. (1) In this section, unless the context otherwise indicates— ‘beneficial interest’, in relation to a security, means— (a) the right or entitlement to receive any dividend or interest payable in respect of that security; or (b) the right to exercise or cause to be exercised, in the ordinary course, any or all of the voting, conversion, redemption or other rights attaching to such security, but does not include any interest held by a person in a unit trust or collective investment scheme in terms of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981); ‘exchange’ means a stock exchange in the Republic licensed in terms of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), or a financial market in the Republic licensed in terms of the Financial Markets Control Act, 1989 (Act NO. 55 of 1989); ‘security’ means— (a) any listed security as defined in section 1 of the Stock Exchanges Control Act, 1985; and (b) any financial instrument which confers the right to convert such instrument into a listed security referred to in paragraph (a). (2) A person is deemed to have a beneficial interest in a security if— (a) (b) (c) (d) the ‘spouse of the person married in community of propert~ or the minor children of that person have a beneficial interest in such security; that person acts in terms of an agreement with another person holding a beneficial interest and the agreement is in respect of the co-operation between them for the acquisition, disposal or any other matter relating to a beneficial interest in such security; it is the holding company of a company that has a beneficial interest in such security; a body corporate or trust has a beneficial interest in such security and— (i) the body corporate or its directors or the trustees are accustomed to act in accordance with the directions or instructions of that person; or (ii) that person is entitled to exercise or control the exercise of the majority of the voting rights at general meetings of the body corporate or trust; or 10 15 20 25 30 35 40 (e) the security is held nomine oficii by another person on that person’s behalf. 45 (3) Where securitie$ of an issuer are registered in the name of a person, and that person (’the registered shareholder’ ) is not the holder of the beneficial interest in all of the securities held by the registered shareholder, the registered shareholder shall, at the end of every three month period after 30 June 1999, disclose to the issuer the identity of each person on whose behalf the registered shareholder holds securities and the number and class of securities issued by that issuer held on behalf of each such person. (4) The information required in terms of subsection (3) shall be furnished 50 14 N(). 19Y83 Act No. 37, 1999 GOVERNhiENT GAZEnE. 30 APRIL 199Y CONIP,%NIES AMENDMENT ACT. I Y99 in writing within seven days of the end of the three month period referred to in that subsection. (5) (u) An issuer may by notice in writing require a person who is a registered shareholder of, or whom the issuer knows or has reasonable cause to believe to have a beneficial interest in, securities issued by that issuer, ‘to confirm or deny whether or not such person holds a beneficial interest in such securities, and if the security is held for another person, the person to whom the request is made shall disclose to the issuer the identity of the person on whose behalf that security is held. (b) The registered shareholder may levy such fee for the furnishing of information requested as may be prescribed by the Minister from time to time. (6) A notice under subsection (5) may, in addition, require the addressee to give particulars of the extent of the beneficial interest held during the three years preceding the date of the notice. (7) The information required in terms of subsections (5) and (6) shall be furnished within a reasonable time specified in the notice, but not later than 14 days from the date of receipt of the notice, (8) (a) All issuers of securities shall establish and maintain a register of the disclosures made in terms of this section and shall publish in their annual financial statements a list of the persons who hold beneficial interests equal to or in excess of five per cent of the totrd number of securities of that class issued by the issuer together with the extent of those beneficial interests. 5 10 15 20 (b) Such register shall be open to inspection mutatis mutandis as if it 25 were a register contemplated in section 113. (9) A person who fails to comply with any provision of this section or to make a disclosure as required by this section or who makes a false disclosure, shall be guilty of an offence. ”. Amendment of section 227 of Act 61 of 1973, as amended by section 7 of Act 82 of 30 1992

17. Section 227 of the principal Act is hereby amended by the substitution for paragraph (c) of subsection (1) of the following paragraph: “(c) by way of such compensation, consideration or other reason in connection with any [tike-over scheme referred to in section 314] scheme or transaction 35 which constitutes an affected transaction as contemplated in Chapter XVA (hereinafter in this section referred to as a take-over offeror take-over scheme),”. Insertion of Chapter IXA in Act 61 of 1973

18. The principal Act is hereby amended by the insertion after section 268 of the following chapter: 40 I [) NL). 19983 Act No. 37. 1YY9 GOlrERh’MENT GAZETTE. 30 APRIL 1999 CONIP.%NIES AMENDMENT ACT. 1999 ‘CHAPTER IXA SECRETARY FOR PUBLIC COMPANIES Mandatory appointment of secretary

268A. The directors of any public company having a share capital, excluding a share block company as defined in section 1 of the Share Blocks Control Act, 1980 (Act No. 59 of 1980), shall appoint a secretary who is perrnanentlv resident in the Republic and who, in the opinion of the directors, has the requisite knowledge and experience to carry out the duties of a secretary of a public company. First appointment of secretiry

268B. The majority of the subscribers to the memorandum of a public company or its directors shall appoint the first secretary of that company and the provisions of sections 269(l), (2), (4) and (5) shall apply muratis mutandis to such first appointment. Filling of casual vacancy of secretary 5 10 15 268C. (1 ) A casual vacancy in the office of secret~ shall be filled by the directors of the public company within 90 days of the vacancy occurring. (2) The public company shall and any director may, if the directors fail to appoint a secretary in terms of subsection (l), within seven days after the expiration of the 90 day period, lodge with the Registrm a notice to that 20 effect. (3) The directors of a public company who knowingly fail to comply with subsection (1) and a public company which fails to comply with subsection (2), shall be guilty of an offence. (4) During any period that the office of secretary is vacant, the directors may generally or specifically authorize any officer of the company to carry out certain or all of the secretary’s duties. (5) If the directors fail to appoint a secretary within the 90 day period, the Registrar or the Court, upon application by a member or director, may order the public company and its directors to appoint a secretary. (6) If a public company and its directors knowingly fail to appoint a secretary within two months of being ordered to do so by the Registra or the Court in terms of subsection (5), the company and its directors shall be guilty of an offence. Body corporate or partnership may be appointed secretary 25 30 35 268D. (1) A body corporate or partnership maybe appointed to hold the office of secret~ of a public company provided that at least one person in the employment of that body corporate or partnership complies with the requirements referred to in section 268A. (2) A change in the membership of a body corporate which holds office as secretary shall not constitute a casual vacancy in the office of secretary, I provided that the body corporate continues to have at least one person in its employment who complies with the requirements referred to in section ~ 268A. 40 (3) A change in the composition of a partnership which holds ofice as secretary shall not constitute a casual vacancy in the office of secretary provided that the new partnership continues to have as a partner or employee at least one person who complies with the requirements referred to in section 268A. (4) A body corporate or partnership which holds office as secretary shall immediately upon the services of the last remaining person who complies with the requirements referred to in section 268A no longer being available, notify the directors of the public company thereof and that notification shall 45 50 * lx No. } 99 X.3 GOVERNMENT GAZE~E. 30 APRIL 1999 Act No. 37, 1999 COk4P.ANIES AhlENDMENT ACT. 1999 be deemed to be a resignation of the secretary by which a casual vacancy I shall have been constituted. Consent to act as secretary, entries in register of directors and officers and lodging of returns 268E. (1) A person who accepts an appointment as secretary shall sign 5 and lodge with the company the prescribed form referred to in section 211 confirming such person’s consent to act as secretary, or if a partnership or body corporate is appointed as secretary, the written consent of the partners or the directors of such partnership or body corporate to so act. (2) No person shall act as secretary and no appointment of secretary shall have legal force for the purposes of this Act or any other law, unless the prescribed form of consent has been lodged with the company and the company has complied with the provisions of sections 215 and 216. (3) The provisions of section 214 shall apply mutatis rnutandis to the appointment of a secretary. Disqualification for appointment as secretiry

268F. The pro~’isions of section 218(l)(b), (c) and (d) and (2) and (3) shall apply mutatis mutandis to the appointment of a secretary. Duties of secre~~

268G. A secretary ‘s duties include, but are not restricted t~ (a) providing the directors of the company collectively and individually 1 (b) (c) (d) ( e) with guidance as to their duties, responsibilities and powers; makng the directors aware of all law and legislation relevant to or affecting the company and reporting at any meetings of the sharehold- ers of the company or of the company’s directors, any failure to comply with such law or legislation; ensuring that minutes of all shareholders’ meetings, directors’ meetings and the meetings of any committees of the directors are properly recorded in accordance with section 242; certifying in the annual financial statements of the company that the company has lodged with the Registrar all such returns as are required of a public company in terms of this Act and that all such returns are true, correct and up to date; ensuring that a copy of the company’s annual financial statements is sent, in accordance with section 302, to every person who is entitled thereto in terms of this Act. Name of secretiry to be stited on trade catalogues, trade circulars and business letters of company 10 15 20 25 30 35 268H. (1) The first names, or the initials thereof, and the surname of the secret ary of a public company shall be stated on every trade catalogue, trade 40 circular and business letter bearing the company’s name. (2) A company which fails to comply with the provisions of subsection (l), shall be guilty of an offence. Notice to be given of resignation or removal of secretary 2681. (1) men during any financial year the secretary of a public 45 company resigns, or is removed from office, the company shall in the prescribed form notify the Registrar thereof within 21 days of such resignation or removal. 20 NtJ. 19983 GOVERNMENT GAZETTE. 30 APRIL 199Y Act No. 37, 1999 CONIP.4NIES AhlENDMENT ACT. 1999 (2) If the secretary is removed the secretary may requjre the company, in its annual financial statements relating to that financial year, to include a statement, not exceeding a reasonable length, setting out the secretary’s contention as to the circumstances that resulted in the removal. (3) If the secretar)’ wishes to exercise the power referred to in subsection (2), the secretary shall give written notice to that effect to the company by not later than the end of the financial year in which the removal took place and such notice shall include the statement referred to in subsection (2). (4) The statement of the secretary referred to in subsection (2) shall be included in the directors’ report in the company’s annual financial statements and if no directors’ report is required in respect of the company’s annual financial statements, it shall be included under a separate heading in the company’s annual financial statements. (5) A company and its directors who knowingly fail to comply with the provisions of this section, shall be guilty of an ~ffence. ”. Amendment of section 297 of Act 61 of 1973, as amended by section 26 of Act 64 of 1977

19. Section 297 of the principal Act is hereby amended— (u) by the substitution for subsection (1) of the following subsection: “(l) The annual financial statements of a company shall [in so far as the information necessary for the purpose is contained in the records of the company or is otherwise available to it] contain particulars showing— (a) the [aggregate] amount of the [directors’ emoluments] emolu- ments received by directors; (b) the [aggregate] amount of [directors’ or past directors’ pensions; and] the pensions paid or receivable by directors and past directors; (c) the [aggregate] amount of any compensation@ to directors [or] and past directors in respect of 10ss of office; @ (d) ~tils of directors’ service contracts.”; (b) by the insertion after subsection (1) of the following subsection: “(1 A) (a) The information required to be furnished in terms of this section shall in each case be furnished in two separate categories, namely, one dealing with the executive directors in the aggregate (and past directors where appropriate), and the other dealing with non- executive directors in the aggregate (and past directors where appropri- ate). 5 10 15 20 25 30 35 (b) For the purposes of this section, ‘executive director’ means a director who is involved in the day-to-day management of the company and ‘non-executive director’ means a director who has no involvement in 40 the day-to-day management of the company.”; (C) by the substitution for subsection (2) of the following subsection: “(2) The [amount to be shown] informatio~ to be disclosed under subsection (1)(a) shall show the amount of any emoluments paid to or receivable by persons in respect of— (a) [shall include anv emoluments paid to or receivable by any person in respect if his services a; a director of the company or any of its subsidiaries or in respect of services rendered in any other mpacity while director of the company or of any subsidiary or otherwise in connection with the mrrying on of 50 ‘ the affairs of the company or any such subsidiary] services rendered as directors of&e company; [shall distinguish between emoluments in respect of services as a director, whether of the company or of i~ subsidiary, and other emoluments (b) 45 55 and for the purposes of this section ‘emoluments’ in relation to a director, includes fees and percentages, salaries, any sums paid by 22 No. 19Y87 Act No. 37, 1999 GO\/ERNklENT GAZEmE.30APRll. 1999 CO\lP.ANIES AhiENDMENT ACT. 1999 way of expenses allowance, any contribution paid under any pension scheme and the estimated money value of any other material benefits received] services rendered while being directors of the company— ~ as directors of any of its subsidiaries; and (]1) othen$ise in connection with the carrying on of the affairs of 5 — the company or any of its subsidiaries.”; (d) by the insertion after subsection (2) of the following subsection: “(2A) For the purposes of this section ‘emoluments’ includes the following: (a) (ij Fees paid for services rendered as directors; and (ii) any amounts paid to a person in respect of such person’s acceptance of the office of director, which shall for the purposes of this section be deemed to be fees paid for services rendered; 10 (b) (c) (d) (e) v) (g) basic salary: bonuses and performance related payments; sums paid by way of expense allowances; the estimated monetary value of any other material benefits received; contributions paid under any pension scheme not othe~ise 20 required to be disclosed in terms of subsection (3)(a); 15 (i) gains made on the exercise of share options, the gain being the difference between the price paid for the shares and the market price of the shares on the date of exercise, and that date being the date on which the director takes ownership of the shares and is entitled to dispose of them; and (ii) the details of such gains shall be presented in tabular form, u~ess i n a p p r o p r i a t e , with e x p l a n a t o r y n o t e s w h e r e neces- ,! (e) by the substitu%f~r subsection (3) of the following subsection: “(3) The [amount to be shown] information to be disclosed under subsection (1)/b )— (a) ,,, shall include details of the amount of any pension paid or receivable in respect of any [such] services of [a director or] any directors and past [director referred to in subsection (2)] directors of the ~ whether to or by [him] such directors or past directors or on [his] any of their nomination or, by virtue of dependence on or other connmtion with [him] any of them, to or by any other person, but shall not include any pension paid or receivable under a pension scheme, if the contributions payable thereunder are substantially adequate for the maintenance thereofi and shall distin~uish between pensions in respect of services as [a director] d~rectors or othe~ise [whether] of the company or its subsidiary, and other pensions (b) [and for the purpose of this section, the expression ‘pension’ includes any superannuation allowance, superannuation gratuity or similar paymenL the expression ‘pension scheme’ means a scheme for the provision of pensions in respect of services as a director or otherwise which is maintained in whole or in part by means of contributions, and the expression ‘contribution’, in relations to a pension scheme, means any payment (including any insurance premium) paid for the purpose of the scheme by or in respect of persons rendering services in respect of which pensions will or may become payable under the scheme, but does not include any payment in respect of two or more persons if the amount paid in respect of each of them is not ascertainable].”; W) by the insefiion after subsection (3) of the following subsection: 25 30 35 40 45 50 55 . 24 N,l. 19Y83 G()\’ERNhlt3NT GAZE~E. 30 APRIL 1999 /\ct N{). 37, 1999 CONIPANIES AhlEND\lENT ACT. 1999 “.(3A ) For the puwoses of this section— (a) ‘pension. includes any superannuation allowance, superannuation (1?) (c) gratuity or similar payment; ‘pension scheme’ means a scheme for the provision of pensions in respect of services rendered as directors or otherwise which is maintained in whole or in part by means of contributions; and ‘contribution’, in relation to a pension scheme, means any payment (including any insurance premium) paid for the purposes of the scheme by or in respect of persons rendering services in respect of which pensions will or may become payable under the scheme, but does not include any payment in respect of two or more persons if the amount paid in ~e~pect of each of them is not ascertainable.”; (g) by the substitution for subsection (4) of the following subsection: “(4) The [amount] information to be [shown] disclosed under subsection ( 1 )(c)— (a) shall include any [sums] amounts paid to or receivable by [a director] directors or past [director] directors by way of compen- sation [for] in respect of— 5 10 15 (i) the loss of office as a director of the company; or (ii) [for] the loss, while [a director] being directors of the 20 compm~ or on, or in connection with, [his] ceasing to be [a director] directors of the company, or any other office in connection with the carrying on of the company’s affairs or of any ofice as director or otherwise in connection with the management of the affairs of any subsidi~y thereofi and 25 (b) shall distinguish between compensation in respect of the office of director, whether of the company or its subsidiary, and compensa- tion in respect of other offices [and for the purpose of this section ‘compensation for loss of office’ shall include sums paid as consideration for or in connection with a 30 person’s retirement from office].”. (h) by the insertion after subsection (4) of the following subsection: “(4A) For the purposes of this section ‘compensation for loss of office’ includes sums paid as consideration for or in connection with a person’s retirement from office.”. (i) by the substitution for the words preceding paragraph (u) of subsection (5) of the following words: “The [amounts to be shown] information to be disclosed under [each paragraph] paragraphs (u), (b) and (c) of subsection ( 1 )—”; (J) by the insertion after subsection (8) of the following subsection: 35 40 “(8A) The information to be disclosed under paragraph (d) of subsection (1) shall include details of— (a) directors’ service contracts with notice periods in excess of one year and with provisions for predetermined compensation on termina- tion of the contracts exceeding one year’s sal~ and benefits in 45 hnd, giving reasons for such notice period; and (b) the unexpired term of any director’s service contract of a dir~ctor proposed for election or re-election at the forthcoming annual general meeting or, if any director proposed for election or re-election does not have a director’s service contract, a statement to 50 that effect”; (k) by the substitution for subsection ( 10) of the following subsection: “(10) If in respect of any annual financial statements the requirements of this section are not complied with, the auditor of the company by whom the annual financial statements are examined, shall include in his report thereon, so far as he is reasonably able to do so, a statement giving the required particulars or, in the event that such auditor is unable to furnish the required particulars, he shall m~e a statement to that effect in his report.”. * 55 2(> No. 19983 GO\’ERNMENT G.4ZE~E. 30 APRfL 1999 Act No. 37.1999 COMP.4N1ES AMENDMENT ACT. 199Y Repeal of section 440G of Act 61 of 1973

20. Section 440G of the principal Act is hereby repealed. Amendment of section 441 of Act 61 of 1973, as substituted by section 5 of Act 78 of 1989, and amended by section 7 of Act 69 of 1990, section 14 of Act 82 of 1992 and section 19 of Act 35 of 1998 5

21. Section 441 of the principal Act is hereby amended— (a) by the substitution for paragraph (d) of subsection (1) of the following paragraph: “(d) in section 37, ~ 143, 145, 145A, 146, 146A, 147(2)(u), 148, 149, 153(4), 156.162, 169, 218, 219, 255, 256(5), 260, 284,424 or 440D(3) 10 or (4), to a fine or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment;”; (b) by the substitution for paragraph (g) of subsection (1) of the following paragraph: “(g) in section 242, 268C, 2681 or 287, to a fine or to imprisonment not 15 exceeding a oeriod of three months or to both such fine and impnsonmenc”; L (c) by the substitution for paragraph (h) of subsection (1) of the following paragraph: “(h) in section 168, 185, 256(6), 312(4), [or] 331(1) or333(l), to a fine;” 20 and (d) by the substitution for paragraph (m) of subsection (1) of the. following paragraph: “(m) in section 171, 200(5), 268Hor311, to a fine;”. Short title and commencement 25

22. This Act shall be called the Companies Amendment Act, 1999, and shall come into operation on 30 June 1999.