ADVOKS GLOBAL · KENYA
The Companies (General) Regulations
34. Provisions applicable to company that is, or if its subsidiary undertaking, is a bank
Edition: 2022-12-31 · In force
34. Provisions applicable to company that is, or if its subsidiary undertaking, is a bank
(1)If a company is a bank, the notes to the financial statement of the company for a financial year are required to include a statement showing the amounts calculated in accordance with paragraph (2).(2)The amounts referred in paragraph (1) are to be calculated by adding together the following amounts at the end of the company's financial year:(a)the amount outstanding, in respect of the principal and interest or otherwise, on all loans and quasi-loans made by the company to, and all credit transactions entered into by the company as a creditor for, persons each of whom was, at any time during the financial year—(i)a director of the company or of its holding company;(ii)a controlled body corporate of such a director; or(iii)in the case of a specified company, a connected entity of such a director; and(b)the amount representing the maximum liability that may be incurred under all guarantees given, and all security provided, by the company in connection with all loans and quasi-loans made to and all credit transactions entered into for, the persons referred to in subparagraph (a).(3)If, at different times during the financial year, the aggregates of the amounts referred to in paragraph (2)(a) and (b) are different), the amount to be shown in the notes to the company's statement is the greater of those aggregates.(4)If a subsidiary undertaking of a company is a bank the notes to the financial statements of the company for a financial year are required to contain a statement showing the amount calculated in accordance with paragraph (5).(5)For the purposes of paragraph (4), the amount is to be calculated by adding together the aggregate of the following amounts at the end of the financial year:(a)the amount outstanding, in respect of the principal and interest or otherwise, on all loans and quasi-loans made by the bank to, and all credit transactions entered into by the bank as a creditor for, persons each of whom was, at any time during the financial year, a director of the company; and(b)the amount representing the maximum liability that may be incurred under all guarantees given, and all security provided, by the bank in connection with all loans and quasi-loans made to, and all credit transactions entered into for, the persons referred to in subparapraph (a).(6)If, at different times during the financial year, the aggregates of the amounts referred to in paragraph (5)(a) and (b) are different) the amount to be shown in the statement is the greater of those aggregates.(7)In the case of a transaction entered into for any person by a company that is, or a company's subsidiary undertaking that is, a bank, the information prescribed by regulation 32 does not need to be included in the financial statements of the company for a financial year if—(a)the value of the transaction is not greater, and the terms of it are not more favourable, than what is reasonable to expect the bank to have offered to a person of the same financial standing but unconnected with the bank; or(b)in any other case, the aggregate of the amounts specified in paragraph (8) does not exceed KSh 100,000,000 or an amount equivalent to 10 per cent of the paid up capital and reserves of the bank, whichever is the lower.(8)The following are the amounts referred to in paragraph (8)(b):(a)the amount outstanding, in respect of the principal and interest or otherwise, during the financial year on all loans and quasi-loans (except those falling within paragraph (7)(a)) made by the bank to, and all credit transactions (except those falling within that paragraph) entered into by the bank as a creditor for, that person or, if, at different times during the financial year, the amounts so outstanding are different, the greater of those amounts; and(b)the amount representing the maximum liability that may be incurred during the financial year under all guarantees (except those falling within paragraph (7)(a)) given, and all security (except those falling within that paragraph) provided, by the bank in connection with all loans and quasi-loans made to, and all credit transactions entered into for, that person or, if, at different times during the financial year, the amounts representing the maximum liability that may be so incurred are different, the greater of those amounts.