Full integrated annual report - African Bank - Investoreports

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Notice of annual general meeting continued
in connection with any matter, including any general repurchase of ABIL shares by ABIL or any subsidiary
of the company. Such authority shall not extend to permitting the company to provide any such fi nancial
assistance for the purposes of or in connection with any other subscription of any option, or any securities,
issued or to be issued by the company or a related or inter-related company, or for the purchase of any
securities of the company or a related or inter-related company unless it relates to any general repurchase
of ABIL shares by ABIL or any subsidiary of ABIL or the shareholders have provided the company with the
necessary authority to do so by virtue of a separate authorising resolution.
Percentage of voting rights required to pass this resolution: 75% of the voting rights exercised.
Motivation for special resolution 9
Prior to the 2008 Companies Act becoming effective, ABIL, acting through its board, was entitled without
shareholder permission, to make inter-company loans, grant fi nancial assistance to group companies and
further was entitled to provide fi nancial assistance, should the directors deem it appropriate, in connection
with the acquisition of shares and debentures of its subsidiaries.
However, sections 44 and 45 of the 2008 Companies Act limit this ability. These sections provide, amongst
others, that the particular fi nancial assistance must be provided only pursuant to a special resolution of
the shareholders, adopted within the previous two years, which approves such assistance either for the
specifi c recipient, or generally for a category of potential recipients, and the specifi c recipient falls within
that category and the board of directors must be satisfi ed that:
immediately after providing the fi nancial assistance, the company would satisfy the solvency and
liquidity test; and
the terms under which the fi nancial assistance is proposed to be given are fair and reasonable to the
company.
ABIL would like the ability to provide fi nancial assistance to its related or inter-related companies, if
necessary, and also to provide such fi nancial assistance, in accordance with section 45 of the 2008
Companies Act in connection with any general repurchase of ABIL shares by a subsidiary of ABIL in terms
of the permission sought in special resolution 11 below. In order, amongst other things, to ensure that ABIL
subsidiaries and other related and inter-related companies and corporations have access to fi nancing
and/or fi nancial backing from ABIL to the extent necessary to enable them to carry on their business
activities, it is necessary to obtain the approval of shareholders as set out in the special resolution above.
16. Special resolution 10 – specific authority to provide financial assistance to BEE companies
RESOLVED THAT, to the extent required by section 44 of the 2008 Companies Act, the board of directors
of the company may, subject to compliance with the requirements of the 2008 Companies Act, authorise
the company to provide direct or indirect fi nancial assistance to either or both of Eyomhlaba Investment
Holdings Limited (Eyomhlaba) and Hlumisa Investment Holdings Limited (“Hlumisa”), being the companies
through which ABIL’s fi rst and second black economic empowerment programmes are operated. Any
such fi nancial assistance will be on terms no less favourable to the ABIL group than the following terms:
16.1 the borrower will be either or both of Eyomhlaba and Hlumisa;
16.2 the lender of the funding will be ABIL and/or any of its wholly owned subsidiaries;
16.3 the funding will be in the form of a loan and/or preference share funding;
16.4 the maximum repayment period for any such funding will be fi ve years;
16.5 the maximum amount of any funding will be R500 million in the case of Eyomhlaba and R250 million
in the case of Hlumisa;
Integrated report 2011 | African Bank Investments Limited