DIRECTOR'S GUIDE 2011

11. ENHANCED ACCOUNTABILITY, AUDIT ANDAUDIT COMMITTEES●●●●Public companies and SOC’s Ltd must also comply with additionalrequirements set out in Chapter 3 of the Act, subject to certain exemptions,as set out in Section 84(1)(a) and (b);Private companies, personal liability companies and NPC’s are not requiredto, however the Amendment Act provides that such companies may have tocomply with these additional requirements as follows:◆◆◆◆S84(1)(c)(i) – unless such company is required to comply by the Act orregulations to have its annual financial statements audited every year,provided that the provisions of Parts B (Company Secretary requirements)and D (Audit Committees) of Chapter 3 will not apply to such a company;S84(1)(c)(ii) – but otherwise only to the extent that the company’s MOIso requires, as contemplated in S34(2) i.e voluntarily.These companies are hereinafter referred to as the “relevant” companies.Chapter 3 requires the relevant companies [apart from those referred to inS84(1)(c)(i)] to:●●●●●●●●Appoint a company secretary;Appoint an auditor and establish an audit committee;King 111 recommends that all other companies should voluntarilyestablish an audit committee;Regulation 43 requires every SOC Ltd company and every listed publiccompany, and any other company that has in any two of the previousfive years, scored above 500 points in terms of Regulation 26(2), to alsoappoint a Social and Ethics Committee unless exempted (see page 26).DirectorsSection 66 – as amended per Amendment Act:●●In the case of a public company (or a non-profit company), the minimumnumber of directors required to be appointed is three, which is in additionto the minimum number of directors that the company must have to satisfyany requirement (whether in terms of the Act or the company’s MOI) toappoint an audit committee or a Social and Ethics Committee;●●Section 66(12) inserted by the Amendment Act – Any particular directormay be appointed to more than one committee of the company, and whencalculating the minimum number of directors required for the company,any such director who has been appointed to more than one committeemust be counted only once (subject to the company’s MOI or as otherwiseprovided for in the Act).Company Secretary●●Must be permanently resident in SA and have the requisite knowledge andexperience to act as such, is accountable to the Board, duties are set outin the Act.Appointment and rotation of auditor (Section 90)●●Upon its incorporation and each year at its annual meeting, relevantcompany must appoint an auditor, who must be a registered auditorand acceptable to its audit committee. Section 90(1A) inserted by theAmendment Act states that the companies voluntarily electing an audit as24