• General

    • 382. Accounts To Give A Fair Representation

      (1) The directors of a company must not approve accounts for the purposes of this Chapter unless they are satisfied that they give a fair representation of the assets, liabilities, financial position and profit or loss–
      (a) in the case of the company’s individual accounts, of the company,
      (b) in the case of the company’s group accounts, of the undertakings included in the consolidation as a whole, so far as concerns members of the company.
      (2) The following provisions apply to the directors of a company which qualifies as a micro-entity in relation to a financial year (see sections 373 (companies qualifying as micro-entities) and 374 (companies excluded from being treated as micro-entities)) in their consideration of whether the individual accounts of the company for that year give a fair representation as required by subsection (1)(a)–
      (a) where the accounts comprise only micro-entity minimum accounting items, the directors must disregard any provision of an accounting standard which would require the accounts to contain information additional to those items,
      (b) in relation to a micro-entity minimum accounting item contained in the accounts, the directors must disregard any provision of an accounting standard which would require the accounts to contain further information in relation to that item, and
      (c) where the accounts contain an item of information additional to the micro-entity minimum accounting items, the directors must have regard to any provision of an accounting standard which relates to that item.
      (3) The auditor of a company in carrying out his functions under these Regulations in relation to the company’s annual accounts must have regard to the directors’ duty under subsection (1).

    • 383. Duty To Prepare Individual Accounts

      (1) The directors of every company must prepare accounts for the company for each of its financial years unless the company is exempt from that requirement under section 384 (individual accounts: exemption for dormant subsidiaries).
      (2) The directors of every restricted scope company must prepare accounts for the company under the small companies regime for each of its financial years (whether or not such company would otherwise qualify as small under Chapter 1 of this Part), unless the company is exempt from that requirement under section 384 (individual accounts: exemption for dormant subsidiaries).
      (3) Accounts prepared pursuant to this section are referred to as the company’s “individual accounts”.

    • 384. Individual Accounts: Exemption For Dormant Subsidiaries

      (1) A company that is otherwise required to prepare individual accounts is exempt from this requirement for a financial year if–
      (a) it is itself a subsidiary undertaking, and
      (b) it has been dormant throughout the whole of that year,
      (2) Exemption is conditional upon compliance with all of the following conditions–
      (a) all members of the company must agree to the exemption in respect of the financial year in question,
      (b) the parent undertaking must give a guarantee under section 386 (parent undertaking declaration of guarantee) in respect of that year,
      (c) the company must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking,
      (d) the parent undertaking must disclose in the notes to the consolidated accounts that the company is exempt from the requirement to prepare individual accounts by virtue of this section, and
      (e) the directors of the company must deliver to the Registrar within the period for filing the company’s accounts and reports for that year–
      (i) a written notice of the agreement referred to in subsection (2)(a),
      (ii) the statement referred to in section 386(1) (parent undertaking declaration of guarantee),
      (iii) a copy of the consolidated accounts referred to in subsection (2)(c),
      (iv) a copy of the auditor’s report on those accounts, and
      (v) a copy of the consolidated annual report drawn up by the parent undertaking.

    • 385. Companies Excluded From The Dormant Subsidiaries Exemption

      A company is not entitled to the exemption conferred by section 384 (individual accounts: exemption for dormant subsidiaries) if it was at any time within the financial year in question–
      (a) is a public interest entity, or
      (b) is a financial institution, or
      (c) a member of an ineligible group (as defined in section 371(2) (companies excluded from the small companies regime))

    • 386. Dormant Subsidiaries Exemption: Parent Undertaking Declaration Of Guarantee

      (1) A guarantee is given by a parent undertaking under this section when the directors of the subsidiary company deliver to the Registrar a statement by the parent undertaking that it guarantees the subsidiary company under this section.
      (2) The statement under subsection (1) must be authenticated by the parent undertaking and must specify–
      (a) the name of the parent undertaking,
      (b) if the parent undertaking is incorporated in the Abu Dhabi Global Market, its registered number (if any),
      (c) if the parent undertaking is incorporated outside the Abu Dhabi Global Market and registered in the country in which it is incorporated, the identity of the register on which it is registered and the number with which it is so registered,
      (d) the name and registered number of the subsidiary company in respect of which the guarantee is being given,
      (e) the date of the statement, and
      (f) the financial year to which the guarantee relates.
      (3) A guarantee given under this section has the effect that–
      (a) the parent undertaking guarantees all outstanding liabilities to which the subsidiary company is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and
      (b) the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary company is liable in respect of those liabilities.

    • 387. Individual Accounts: Applicable Accounting Framework

      (1) A company’s individual accounts shall be prepared in accordance with international accounting standards (“IAS individual accounts”).
      (2) The Board may make rules prescribing (i) the circumstances in which other accounting standards may be adopted for the purpose of preparing a company’s individual accounts and (ii) the other accounting standards which may be so adopted.

    • 388. Option To Prepare Group Accounts

      If at the end of a financial year a company subject to the small companies regime is a parent company the directors, as well as preparing individual accounts for the year, may prepare group accounts for the year.

    • 389. Duty To Prepare Group Accounts

      (1) This section applies to companies that are not subject to the small companies regime.
      (2) If at the end of a financial year the company is a parent company the directors, as well as preparing individual accounts for the year, must prepare group accounts for the year unless the company is exempt from that requirement.
      (3) Group accounts prepared in accordance with this section shall be prepared in accordance with international accounting standards (“IAS group accounts”).
      (4) The Board may make rules prescribing other accounting standards which may be adopted for the purpose of preparing group accounts.
      (5) There are exemptions to the requirements of this section under section 390 (exemption for company included in group accounts of larger group).
      (6) A company to which this section applies but which is exempt from the requirement to prepare group accounts, may do so.

    • 390. Exemption For Company Included In Group Accounts Of Larger Group

      (1) A company is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking, in the following cases–
      (a) where the company is a wholly-owned subsidiary,
      (b) where its parent undertaking holds more than 50% of the shares in the company and notice requesting the preparation of group accounts has not been served on the company by shareholders holding in aggregate–
      (i) more than half of the remaining shares in the company (excluding treasury shares), or
      (ii) 5% of the total shares in the company (excluding treasury shares).
         Such notice must be served not later than six months after the end of the financial year before that to which it relates.
      (2) Exemption is conditional upon compliance with all of the following conditions–
      (a) the company and all of its subsidiary undertakings must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking,
      (b) those accounts and, where appropriate, the group’s annual report, must be drawn up in accordance with the requirements of these Regulations with respect to such accounts and reports or otherwise in a manner equivalent to consolidated accounts and consolidated annual reports so drawn up,
      (c) the group accounts must be audited by one or more persons authorised to audit accounts under the law under which the parent undertaking which draws them up is established,
      (d) the company must disclose in its individual accounts that it is exempt from the obligation to prepare and deliver group accounts,
      (e) the company must state in its individual accounts the name of the parent undertaking which draws up the group accounts referred to above and–
      (i) if it is incorporated outside the Abu Dhabi Global Market, the country in which it is incorporated, or
      (ii) if it is unincorporated, the address of its principal place of business,
      (f) the company must deliver to the Registrar, within the period for filing its accounts and reports for the financial year in question, copies of–
      (i) the group accounts, and
      (ii) where appropriate, the consolidated annual report,
      (iii) together with the auditor’s report on them,
      (g) any requirement of Part 31 of these Regulations as to the delivery to the Registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with subsection (2)(f).
      (3) For the purposes of subsection (1)(b), shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, are attributed to the parent undertaking.
      (4) Shares held by directors of a company for the purpose of complying with any share qualification requirement shall be disregarded in determining for the purposes of this section whether the company is a wholly-owned subsidiary.

    • 391. Consistency Of Financial Reporting Within Group

      (1) The directors of a parent company must secure that the individual accounts of–
      (a) the parent company, and
      (b) each of its subsidiary undertakings,
      are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.
      (2) Subsection (1) does not apply if the directors do not prepare group accounts for the parent company.
      (3) Subsection (1) only applies to accounts of subsidiary undertakings that are required to be prepared under this Part.
      (4) Subsection (1)(a) does not apply where the directors of a parent company prepare IAS group accounts and IAS individual accounts.

    • 392. Individual Profit And Loss Account Where Group Accounts Prepared

      (1) This section applies where–
      (a) a company prepares group accounts in accordance with these Regulations, and
      (b) the notes to the company’s individual balance sheet show the company’s profit or loss for the financial year determined in accordance with these Regulations.
      (2) The company’s individual profit and loss account need not contain the information specified in section 396 (information about employee numbers and costs).
      (3) The company’s individual profit and loss account must be approved in accordance with section 399(1) (approval by directors) but may be omitted from the company’s annual accounts for the purposes of the other provisions of these Regulations.

    • 393. Information About Related Undertakings

      (1) The Board may make rules requiring information about related undertakings to be given in notes to a company’s annual accounts.
      (2) The rules–
      (a) may make different provision according to whether or not the company prepares group accounts, and
      (b) may specify the descriptions of undertaking in relation to which it applies, and make different provision in relation to different descriptions of related undertaking.
      (3) The rules may provide that information need not be disclosed with respect to an undertaking that–
      (a) is established under the law of a jurisdiction outside the Abu Dhabi Global Market, or
      (b) carries on business outside the Abu Dhabi Global Market, if the following conditions are met.
      (4) The conditions are–
      (a) that in the opinion of the directors of the company the disclosure would be seriously prejudicial to the business of–
      (i) that undertaking,
      (ii) the company,
      (iii) any of the company’s subsidiary undertakings, or
      (iv) any other undertaking which is included in the consolidation, and
      (b) that the Registrar agrees that the information need not be disclosed.
      (5) Where advantage is taken of any such exemption, that fact must be stated in a note to the company’s annual accounts.

    • 394. Information About Related Undertakings: Alternative Compliance

      (1) This section applies where the directors of a company are of the opinion that the number of undertakings in respect of which the company is required to disclose information under any provision of a rule made under section 393 (information about related undertakings) is such that compliance with that provision would result in information of excessive length being given in notes to the company’s annual accounts.
      (2) The information need only be given in respect of the undertakings whose results or financial position, in the opinion of the directors, principally affected the figures shown in the company’s annual accounts.
      (3) If advantage is taken of subsection (2)–
      (a) there must be included in the notes to the company’s annual accounts a statement that the information is given only with respect to such undertakings as are mentioned in that subsection, and
      (b) the full information (both that which is disclosed in the notes to the accounts and that which is not) must be annexed to the company’s nextconfirmation statement.
      For this purpose the “nextconfirmation statement” means that next delivered to the Registrar after the accounts in question have been approved under section 399 (approval and signing of accounts).
      (4) If a company fails to comply with subsection (3)(b), a contravention of these Regulations is committed by–
      (a) the company, and
      (b) every officer of the company who is in default.
      (5) A person who commits the contravention referred to in subsection (4) shall be liable to a level 3 fine.

    • 395. Information About Off-Balance Sheet Arrangements

      (1) In the case of a company that is not subject to the small companies regime, if in any financial year–
      (a) the company is or has been party to arrangements that are not reflected in its balance sheet, and
      (b) at the balance sheet date the risks or benefits arising from those arrangements are material,
      (c) the information required by this section must be given in notes to the company’s annual accounts.
      (2) The information required is–
      (a) the nature and business purpose of the arrangements, and
      (b) the financial impact of the arrangements on the company.
      (3) The information need only be given to the extent necessary for enabling the financial position of the company to be assessed.
      (4) If the company qualifies as medium-sized in relation to the financial year (see sections 438 (companies qualifying as medium-sized: general) to 440 (companies excluded from being treated as medium-sized)) it need not comply with subsection (2)(b).
      (5) This section applies in relation to group accounts as if the undertakings included in the consolidation were a single company.

    • 396. Information About Employee Numbers And Costs

      (1) In the case of a company not subject to the small companies regime, the following information with respect to the employees of the company must be given in notes to the company’s annual accounts–
      (a) the average number of persons employed by the company in the financial year, and
      (b) the average number of persons so employed within each category of persons employed by the company.
      (2) The categories by reference to which the number required to be disclosed by subsection (1)(b) is to be determined must be such as the directors may select having regard to the manner in which the company’s activities are organised.
      (3) The average number required by subsection (1)(a) or (b) is determined by dividing the relevant annual number by the number of months in the financial year.
      (4) The relevant annual number is determined by ascertaining for each month in the financial year–
      (a) for the purposes of subsection (1)(a), the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),
      (b) for the purposes of subsection (1)(b), the number of persons in the category in question of persons so employed,
      (c) and adding together all the monthly numbers.
      (5) In respect of all persons employed by the company during the financial year who are taken into account in determining the relevant annual number for the purposes of subsection (1)(a) there must also be stated the aggregate amounts respectively of–
      (a) wages and salaries paid or payable in respect of that year to those persons,
      (b) social security costs incurred by the company on their behalf, and
      (c) other pension costs so incurred.
      This does not apply in so far as those amounts, or any of them, are stated elsewhere in the company’s accounts.
      (6) In subsection (5)–
      “pension costs” includes any costs incurred by the company in respect of–
      (a) any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the company,
      (b) any sums set aside for the future payment of pensions or sums due in respect of employees’ end-of service gratuity entitlements directly by the company to current or former employees, and
      (c) any pensions or end-of service gratuity payments paid directly to such persons without having first been set aside,
      “social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.
      (7) This section applies in relation to group accounts as if the undertakings included in the consolidation were a single company.

    • 397. Information About Directors’ Benefits: Remuneration

      (1) The Board may make rules requiring information to be given in notes to a company’s annual accounts about directors’ remuneration.
      (2) The matters about which information may be required include–
      (a) gains made by directors on the exercise of share options,
      (b) benefits received or receivable by directors under long-term incentive schemes,
      (c) payments for loss of office (as defined in section 203 (payments for loss of office)) and entitlements to end-of-service gratuity payments,
      (d) benefits receivable, and contributions for the purpose of providing benefits, in respect of past services of a person as director or in any other capacity while director,
      (e) consideration paid to or receivable by third parties for making available the services of a person as director or in any other capacity while director.
      (3) For the purposes of this section, and rules made under it, amounts paid to or receivable by–
      (a) a person connected with a director, or
      (b) a body corporate controlled by a director, are treated as paid to or receivable by the director.
      The expressions “connected with” and “controlled by” in this subsection have the same meaning as in Part 10 (company directors).
      (4) It is the duty of–
      (a) any director of a company, and
      (b) any person who is or has at any time in the preceding five years been a director of the company,
      to give notice to the company of such matters relating to himself as may be necessary for the purposes of rules under this section.
      (5) A person who makes default in complying with subsection (4) commits a contravention of these Regulations and shall be liable to a level 3 fine.

    • 398. Information About Directors’ Benefits: Advances, Credit And Guarantees

      (1) In the case of a company that does not prepare group accounts, details of–
      (a) advances and credits granted by the company to its directors, and
      (b) guarantees of any kind entered into by the company on behalf of its directors, must be shown in the notes to its individual accounts.
      (2) In the case of a parent company that prepares group accounts, details of–
      (a) advances and credits granted to the directors of the parent company, by that company or by any of its subsidiary undertakings, and
      (b) guarantees of any kind entered into on behalf of the directors of the parent company, by that company or by any of its subsidiary undertakings,
      must be shown in the notes to the group accounts.
      (3) The details required of an advance or credit are–
      (a) its amount,
      (b) an indication of the interest rate,
      (c) its main conditions, and
      (d) any amounts repaid.
      (4) The details required of a guarantee are–
      (a) its main terms,
      (b) the amount of the maximum liability that may be incurred by the company (or its subsidiary), and
      (c) any amount paid and any liability incurred by the company (or its subsidiary) for the purpose of fulfilling the guarantee (including any loss incurred by reason of enforcement of the guarantee).
      (5) There must also be stated in the notes to the accounts the totals–
      (a) of amounts stated under subsection (3)(a),
      (b) of amounts stated under subsection (3)(d),
      (c) of amounts stated under subsection (4)(b), and
      (d) of amounts stated under subsection (4)(c).
      (6) References in this section to the directors of a company are to the persons who were a director at any time in the financial year to which the accounts relate.
      (7) The requirements of this section apply in relation to every advance, credit or guarantee subsisting at any time in the financial year to which the accounts relate–
      (a) whenever it was entered into,
      (b) whether or not the person concerned was a director of the company in question at the time it was entered into, and
      (c) in the case of an advance, credit or guarantee involving a subsidiary undertaking of that company, whether or not that undertaking was such a subsidiary undertaking at the time it was entered into.
      (8) Financial institutions need only state the details required by subsection (5)(a) and (c).

    • 399. Approval And Signing Of Accounts

      (1) A company’s annual accounts must be approved by the board of directors and signed on behalf of the board by a director of the company.
      (2) The signature must be on the company’s balance sheet.
      (3) If the accounts are prepared in accordance with the small companies regime, the balance sheet must contain, in a prominent position above the signature:
      (a) in the case of individual accounts prepared in accordance with the micro-entity provisions, a statement to that effect, or
      (b) in the case of accounts not prepared as mentioned in subsection (3)(a), a statement to the effect that the accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
      (4) If annual accounts are approved that do not comply with the requirements of these Regulations, every director of the company who–
      (a) knew that they did not comply, or was reckless as to whether they complied, and
      (b) failed to take reasonable steps to secure compliance with those requirements or, as the case may be, to prevent the accounts from being approved,
      (c) commits a contravention of these Regulations.
      (5) A person who commits the contravention referred to in subsection (4) shall be liable to a fine of up to level 5.