QUESTION $1$

$(10$ MARKS $18$ MINUTES$)$

You are a member of the aukit team workerg or the $31$ March $2024$ audit of Mithandemi $($FFy$)$ Ld$,$ an importfexport company Zim Dolar Lid owns $70\%$ of Mehandeni $($Ply$)$ Ltd $\text{'}$s issued share capital, and $100\%$ of the issued share capital of Gatyeni $($Pty$)$ Lid $($this interest was purchased on $31$ July $2023)$

You hove been assigned to the aurlt of statudory matters and as part of your audit procedures, you have extracted the following matters for consideration:

$1$ A loan of Ra milion made by Hthandent $($Pty$)$ Hd to Zemi Dollar Led early in August $2023)$ Zim Dollar used monery to pay the previous shareholders of Gatyeni $($Ply$)$ Ltd $($for the shares it acquired in July $2023).$ The loan is adequately secured and subject to market$-$related terms.

$2$ In October $2023,$ Mthandeni $($Pty$)$ Lid, on instructon by $2m$ Dollar Lid, revalued certain of its non$-$current assets upward by R$5$ million, and then distrituted this amount as a dividend.

YOU ARE REQUIRED TO

Discuss the legalify of tre loan made by Mthandeni $($Ply$)$ Ltd to Zim Dolar Lid in terms of the Companies Act

Discuss the legality of the dividend distributed by Mihandeni $($PYy$)$ Lid