IN THE COMPANIES TRIBUNAL REPUBLIC OF SOUTH AFRICA
Case No: CT02171/ADJ/2024
Ex Parte Application of:
HOEDSPRUIT WILD LIFE ESTATE NPC APPLICANT
(REGISTRATION NO. 2004/010767/08)
Presiding Member: Nomagcisa Cawe
Date of the decision: 20 February 2026
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DECISION (Reasons and order)
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A INTRODUCTION
[1] The Applicant is HOEDSPRUIT WILDLIFE ESTATE NPC, a non- profit
company incorporated and registered in terms of South African company laws,
with its registered address at Stand 722 Portion 1, Hoedspruit Wildlife Estate,
Hoedspruit, Limpopo. This application is brought on behalf of the Applicant by
its financial director, Mr. Jan Adriaan Smith (“Smith”).
[2] This is an application for the Applicant to be exempted from establishing a
Social and Ethics Committee (SEC) in terms of section 72(5) of the
Companies Act 71 of 2008 (“the Act”).
B APPLICANT'S ASSERTIONS
[3] The Applicant is a non- profit company that operates as a Home Owners
Association. It manages a Wildlife Estate which consists of 511 registered
units/residences. It also purchases electricity from Eskom and resells it to
those who own houses within the Wildlife Estate and surrounding businesses
in the area. It derives 35% of its income from levies and 65% from purchasing
electricity. The Applicant’s turnover in the 2023 financial year was R 30 840
913.
[4] The Applicant employs twenty-one (21) employees, nine (9) directors ( one of
whom is an executive director) , and one (1) Company Secretary. The
Applicant states that based on the nature and extent of its activities, it is not
reasonably necessary in the public interest for it to be required to have a
Social and Ethics Committee.
C LEGAL FRAMEWORK
[5] Section 72(1) of the Companies Act provides that:
‘Except to the extent that the Memorandum of Incorporation of a company
provides otherwise, the board of a company may — (a) appoint any number of
committees of directors’.
[6] The Social and Ethics Committee is one of the committees that certain
prescribed companies are obliged to establish. In terms of section 72(4) of the
Companies Act:
‘The Minister, by regulation, may prescribe—
(a) a category of companies that must each have a social and ethics
committee, if it is desirable in the public interest, having regard to—
(i) annual turnover;
(ii) workforce size; or
(iii) the nature and extent of the activities of such companies;
(b) the functions to be performed by social and ethics committees required by
this subsection; and
(c) rules governing the composition and conduct of social and ethics
committees’.
[7] Not every company is obliged to establish a Social and Ethics Committee. The
need to establish this committee will be dictated by whether it is desirable in
the public interest for the company to have such a committee. This is
determined having regard to its annual revenue, the number of employees
and the type of activities carried out by the company.
[8] In terms of Regulation 43(a) – (c) of the 2011 Companies Regulations, every
state-owned company, every listed company and any other company that has
in the previous five years scored above 500 points in their Public Interest
Score, at least on two occasions, must have a Social and Ethics Committee.
[9] In terms of Regulation 26(2) of the Companies Regulations, 2011, companies
that, among others, are required to establish Social and Ethics Committees
are obliged to calculate their P ublic Interest Score at the end of each financial
year calculated as the sum of the following:
(a) ‘a number of points equal to the average number of employees of the company
during the financial year;
(b) one point for every R 1 million (or portion thereof) in third party liability of the
company, at the financial year end;
(c) one point for every R 1 million (or portion thereof) in turnover during the financial
year; and
(d) one point for every individual who, at the end of the financial year, is known by the
company—(i) in the case of a profit company, to directly or indirectly have a
beneficial interest in any of the company’s issued securities; or (ii) in the case of a
non-profit company, to be a member of the company, or a member of an
association that is a member of the company’.
[10] Companies that are required to establish Social and Ethics Committees are
entitled to approach the Tribunal for an exemption from setting up these
committees. In terms of section 72(5) of the Act, the Tribunal can only exempt
these companies from establishing Social and Ethics Committees when one
of the two requirements is met.
[10.1] First, the company seeking to be exempt from establishing a Social and
Ethics Committee should demonstrate that it has some formal
mechanism within its structures , sanctioned by legislation, that
substantially performs functions that ought to be performed by the
Social and Ethics Committee.
[10.2] Secondly, when the Tribunal is satisfied that it is not reasonably
necessary in the public interest to require the company to have a Social
and Ethics Committee, considering the nature and extent of its
activities.
The Applicant seeks to rely on this ground as the basis for the instant
application.
[11] In terms of Regulation 43(2):
‘[a] company to which this regulation applies must appoint a social and ethics
committee unless—
(a) it is a subsidiary of another company that has a social and ethics committee, and
the social and ethics committee of that other company will perform the functions
required by this regulation on behalf of that subsidiary company; or
(b) it has been exempted by the Tribunal in accordance with section 72 (5) and (6)’.
[12] Regulation 43(5) provides a variety of functions that the Social and Ethics
Committee is required to perform.
D EVALUATION and FINDINGS
[13] The ground upon which the Applicant seeks to be exempted is that it is not
reasonably necessary in the public interest to be required to have a Social
and Ethics Committee, considering the nature and extent of its activities. In his
Affidavit Smith directs the Tribunal to the company’s Memorandum of
Incorporation (the MOI) . Although he is not specific about the relevant
provisions of the MOI that he relies on , I have taken the liberty to read the
MOI and am therefore familiar with its contents.
[14] In clause 6 the MOI sets out the main objectives of the company as follows:-
6.1.5 to manage the common property, fauna and flora including the game on
sound environmental practices in terms of the Conditions of Establishment,
ROD and the EMP…
[15] Clause 6.2 states that the ancillary objects of the company shall be –
6.2.1 to promote and conserve wildlife, fauna and flora on the property as a
sanctuary for wildlife fauna and flora.
6.2.2 to implement any Environmental Management Plan based on universal
principles of sound, integrated environmental management and in terms of the
EIA.
[16] Although not specifically stated, it is clear from the statements that appear in
paragraph 15 above that the Applicant has in place a formal and effective
mechanism that deals with the responsibilities that would otherwise have been
carried out by a SEC, in terms of the Act and the regulations.
[17] In view of the aforegoing I am satisfied that the Applicant has complied with
the requirements of Section 72(5)( b) of the Act, and considering the public
interest rationale of the SEC requirement, it is not reasonably necessary in the
public interest to require the Applicant to establish a SEC.
ORDER
[18] In the results, I make the following order:
The Applicant is exempted from establishing a Social and Ethics Committee
for five (5) years.
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N CAWE: MEMBER OF THE COMPANIES TRIBUNAL