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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 2 : Formation, Administration and Dissolution of Companies

Part C : Transparency, accountability and integrity of companies

29. Financial statements

 

 

1) If a company provides any financial statements, including any annual financial statements, to any person for any reason, those statements must—
a) satisfy the financial reporting standards as to form and content, if any such standards are prescribed;
b) present fairly the state of affairs and business of the company, and explain the transactions and financial position of the business of the company;
c) show the company’s assets, liabilities and equity, as well as its income and expenses, and any other prescribed information;
d) set out the date on which the statements were published, and the accounting period to which the statements apply; and
e) bear, on the first page of the statements, a prominent notice indicating—
i) whether the statements—
aa) have been audited in compliance with any applicable requirements of this Act;
bb) if not audited, have been independently reviewed in compliance with any applicable requirements of this Act; or
cc) have not been audited or independently reviewed; and
ii) the name, and professional designation, if any, of the individual who prepared, or supervised the preparation of, those statements.

 

2) Any financial statements prepared by a company, including any annual financial statements of a company as contemplated in section 30, must not be—
a) false or misleading in any material respect; or
b) incomplete in any material particular, subject only to subsection (3).

 

3) A company may provide any person with a summary of any particular financial statements, but—
a) any such summary must comply with any prescribed requirements; and
b) the first page of the summary must bear a prominent notice—
i) stating that it is a summary of particular financial statements prepared by the company, and setting out the date of those statements;
ii) stating whether the financial statements that it summarises have been audited, independently reviewed, or are unaudited, as contemplated in subsection (1)(e);
iii) stating the name, and professional designation, if any, of the individual who prepared, or supervised the preparation of, the financial statements that it summarises; and
iv) setting out the steps required to obtain a copy of the financial statements that it summarises.

 

4) Subject to subsection (5), the Minister, after consulting the Council, may make regulations prescribing—
a) financial reporting standards contemplated in this Part; or
b) form and content requirements for summaries contemplated in subsection (3).

 

5) Any regulations contemplated in subsection (4)—
a) must promote sound and consistent accounting practices;
b) in the case of financial reporting standards for public companies, must be in accordance with the International Financial Reporting Standards of the International Accounting Standards Board or its successor body; and
c) may establish different standards applicable to—
i) profit and non-profit companies; and
ii) different categories of profit companies.

 

6) Subject to section 214(2), a person is guilty of an offence if the person is a party to the preparation, approval, dissemination or publication of—
a) any financial statements, including any annual financial statements contemplated in section 30, knowing that those statements—
i) fail in a material way to comply with the requirements of subsection (1); or
ii) are materially false or misleading, as contemplated in subsection (2); or
b) a summary of any financial statements, knowing that—
i) the statements that it summarises do not comply with the requirements of subsection (1), or are materially false or misleading, as contemplated in subsection (2); or
ii) the summary does not comply with the requirements of subsection (3), or is materially false or misleading.