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

Regulations

Companies Regulations, 2011

Chapter 4 : Offerings of Company Securities

Part C : Items required to be included in a Prospectus

79. Report by auditor of company

 

(1) Section 3, Paragraph 6 of a prospectus contemplated in regulation 56 must comprise a report by the auditor of the company with respect to—
(a) profits or losses and assets and liabilities, in accordance with sub-regulations (2) or (3), as applicable; and
(b) the rates of the dividends, if any, paid by the company in respect of each class of securities of the company in respect of each of the 3 financial years immediately preceding the issue of the prospectus, giving particulars of—
(i) each class of shares on which dividends were paid; and
(ii) the cases in which no dividends were paid in respect of a particular class of shares in respect of any of those years; and
(c) if no annual financial statements were made out by or for the company in respect of any part of the 3 years ending on a date 3 months before the issue of the prospectus, a statement of that fact.

 

(2) If the company has no subsidiary, the report—
(a) in regard to profits or losses, must deal with the profits or losses of the company in respect of each of the 3 financial years immediately preceding the issue of the prospectus; and
(b) in regard to assets and liabilities, must deal with the assets and liabilities of the company at the last date to which the annual financial statements of the company were made out.

 

(3) If the company is a holding company, the report—
(a) in regard to profits or losses, must deal separately with the company's profits or losses as provided by sub-regulation (2), and in addition, must deal—
(i) as a whole with the combined profits or losses of all subsidiaries, as far as they concern holders of the company's securities; or
(ii) individually with the profits or losses of each subsidiary, so far as they concern holders of the company's securities; or
(iii) as a whole with the consolidated profits or losses of the group of companies so far as concerns holders of the company's securities; and
(b) in regard to assets and liabilities, must deal separately with the company's assets and liabilities as provided by sub-regulation (2) and, in addition, must deal—
(i) as a whole with the combined assets and liabilities of all subsidiaries, indicating the interest therein of holders of the company's securities, other than the company; or
(ii) individually with the assets and liabilities of each subsidiary, indicating the interests therein of shareholders other than the company; or
(iii) as a whole with the consolidated assets and liabilities of the company and all subsidiaries, indicating the interests therein of shareholders other than the company;
(c) if a subsidiary incurred losses, must state the amounts of those losses and the manner in which provision was made for them.

 

(4) The auditor must include a statement in the report noting—
(a) the extent to which the auditor is satisfied that the financial statements in relation to the company and any subsidiary are correct and have been prepared on a basis consistent with the Act; and
(b) whether—
(i) the debtors and creditors include any accounts other than trade accounts;
(ii) the provisions for doubtful debts appear to be adequate;
(iii) adequate provision has been made for obsolete, damaged or defective goods, and for supplies purchased at prices in excess of current market prices;
(iv) intercompany profits in the group have been eliminated; or
(v) there have been any material changes in the assets and liabilities of the company or of any subsidiary since the date of the last annual financial statements.