129. Accounting Records of Companies

(1) Every Company must keep Accounting Records that are sufficient to show and explain its transactions so as to:

1. (a) disclose with reasonable accuracy the financial position of the Company at any time; and
2. (b) enable the Directors to ensure that any accounts prepared by the Company under this Part comply with the requirements of these Regulations and the Rules.

(2) A Company must ensure that its Accounting Records are:

1. (a) kept at the place that the Directors consider appropriate, except so far as the Rules otherwise require; and
2. (b) preserved by the Company for at least 6 years after the day they are created or, if the Rules prescribe another period, the other period; and
3. (c) open to inspection by an Officer or Auditor of the Company at all reasonable times; and
4. (d) otherwise kept and maintained as required by the Rules.

(2-1) If a Company, for whatever reason, ceases to exist or ceases to be a Company within the meaning of these Regulations, the Directors immediately before the Company ceases to exist or ceases to be a Company shall ensure that its Accounting Records are preserved for at least 6 years from the date of cessation.

(3) If a Public Company keeps its Accounting Records outside of the AIFC, the Public Company must keep in the AIFC its returns in relation to the business it conducts in or from the AIFC.

(4) Contravention of this section is punishable by a fine.

130. Financial years

(1) The first financial year of a Company starts on the day it is incorporated and lasts for a period not exceeding 18 months decided by the Directors.

(2) However, if a Foreign Company has become a Company under section 151 (Transfer of incorporation to AIFC), the first financial year of the Company under these Regulations may, at the option of the Directors, be taken to have started at the end of the previous financial year of the Company in the jurisdiction from which it was continued as a Company. If the Directors exercise that option, the first financial year of the Company under these Regulations is the period of 12 months from the date it is taken to have started.

(3) The second or any subsequent financial year of a Company starts at the end of the Company’s previous financial year and lasts for 12 months or some other period, which is within 7 days either shorter or longer than the 12 months, as may be decided by the Directors.

131. Accounts

(1) The Directors of every Company must ensure that accounts are prepared in relation to each financial year of the Company and that the accounts comply with the requirements in this section.

(2) The accounts must:

1. (a) be prepared in accordance with accounting principles or standards prescribed by the Rules or otherwise approved by the Registrar; and
2. (b) show a true and fair view of the profit or loss of the Company for the period and of the state of the Company’s affairs at the end of the period; and
3. (c) comply with any other requirements of these Regulations and the Rules.

(3) The Directors of a Company must approve the Company’s accounts and must ensure that they are signed on their behalf by at least 1 Director.

(4) The Directors of a Company must ensure that, within 6 months after the end of each financial year of the Company, the accounts for that year are:

1. (a) prepared and approved by the Directors; and
2. (b) examined and reported upon by an Auditor; and
3. (c) if the Company is a Public Company—laid before a General Meeting, together with a copy of the Auditor’s report and Directors’ report, for discussion and, if considered appropriate, approval by the Shareholders; and
4. (d) for all Companies—sent, together with (if applicable) a copy of the Auditor’s report or Directors’ report (or both), to every Shareholder, other than a Shareholder for whom the Company does not have a current postal address.

(5) A Company must file with the Registrar, within 14 days after the day subsection (4)(d) is complied with in relation to a financial year, a copy of the accounts and the Auditor’s report for the financial year and, if the Company is a Public Company, a copy of the Directors’ report prepared under section 133 (Directors’ reports for Public Companies) for the financial year.

(6) Unless otherwise provided in its Articles of Association, a Private Company and its Directors are not required to comply with subsections (4)(b) and (5) if the Company has:

1. (a) an annual turnover of not more than U.S. $5,000,000.

(7) However, the Shareholders representing not less than 10% of the nominal value of the share capital of a Private Company to which subsection (6) applies may, by Written notice given to the Company no earlier than the start of any financial year and no later than 1 month before the end of the financial year, require the Company to obtain an audit of its accounts for financial year. The Directors of the Company must ensure that the request is complied with.

(8) If a provision of this section requires the Directors of a Company to do something, each of the Directors are severally liable if the thing is not done as required by this section.

(9) Contravention of this section is punishable by a fine.

132. Provision of copy of accounts to Shareholders

(1) Any Shareholder of a Company is entitled, on Written request made by the Shareholder to the Company and without charge, to be given:

• (a) a copy of the Company’s latest accounts, if section 131(6) (Accounts) applies; or
• (b) in all other cases, the latest audited accounts and Auditor’s report.

(2) A Company must comply with a request under subsection (1) within 7 days after the day it receives the request.

(3) Contravention of subsection (2) is punishable by a fine.

133. Directors’ report for Public Companies

(1) The Directors of a Public Company must prepare a Directors’ report for each financial year of the Company.

(2) The Directors’ report for a financial year must:

• (a) state the names of the persons who, at any time during the financial year, were Directors; and
• (b) state the principal activities of the Company during the financial year; and
• (c) state the amount (if any) that the Directors recommend should be paid by way of dividend or other Distribution; and
• (d) include a business review containing:

(i) a fair view of the Company’s business; and

(ii) a description of the risks and uncertainties facing the Company; and

(iii) an analysis of the development, performance and position of the Company’s business; and

(iv) the other information necessary for an understanding of the development, performance and position of the Company’s business; and

• (e) state that the Directors are not aware of any relevant audit information of which the Company’s Auditor is not aware, and that they have taken all reasonable steps to become aware of such relevant audit information; and
• (f) include the other matters prescribed by the Rules.

(3) The Directors’ report must be signed on behalf of the Directors by a Director or the Secretary of the Company.

(4) Each Director of a Company must ensure that the requirements of this section are complied with in relation to the Company in relation to each financial year of the Company.

(5) Contravention of subsection (4) is punishable by a fine.