• CHAPTER 9 CHAPTER 9 REVISION OF DEFECTIVE ACCOUNTS AND REPORTS

    • Voluntary revision

      • 428. Voluntary revision of accounts etc.

        (1) If it appears to the directors of a company that—
        (a) the company's annual accounts, or
        (b) the directors' report,
        did not comply with the requirements of these Regulations, they may prepare revised accounts or a revised report or statement.
        (2) Where copies of the previous accounts or report have been sent out to members, delivered to the Registrar or (in the case of a public company) laid before the company in general meeting, the revisions must be confined to—
        (a) the correction of those respects in which the previous accounts or report did not comply with the requirements of these Regulations, and
        (b) the making of any necessary consequential alterations.
        (3) The Board may make rules as to the application of the provisions of these Regulations in relation to—
        (a) revised annual accounts, or
        (b) a revised directors' report,
        (4) The rules may, in particular—
        (a) make different provision according to whether the previous accounts or report are replaced or are supplemented by a document indicating the corrections to be made,
        (b) make provision with respect to the functions of the company's auditor in relation to the revised accounts or report,
        (c) require the directors to take such steps as may be specified in the rules where the previous accounts or report have been—
        (i) sent out to members and others under section 405 (duty to circulate copies of annual accounts and reports),
        (ii) laid before the company in general meeting, or
        (iii) delivered to the Registrar,
        (d) apply the provisions of these Regulations (including those imposing fines for contraventions of these Regulations) subject to such additions, exceptions and modifications as are specified in the rules;
        (e) make provision for the manner in which this Chapter applies to restricted scope companies.

      • 429. Registrar's notice in respect of accounts or reports

        (1) This section applies where—
        (a) copies of a company's annual accounts or directors' report have been sent out under section 405 (duty to circulate copies of annual accounts and reports), or
        (b) a copy of a company's annual accounts or directors' report has been delivered to the Registrar or (in the case of a public company) laid before the company in general meeting,
        and it appears to the Registrar that there is, or may be, a question whether the accounts or report comply with the requirements of these Regulations.
        (2) The Registrar may give notice to the directors of the company indicating the respects in which it appears that such a question arises or may arise.
        (3) The notice must specify a period of not less than one month for the directors to give an explanation of the accounts or report or prepare revised accounts or a revised report.
        (4) If at the end of the specified period, or such longer period as the Registrar may allow, it appears to the Registrar that the directors have not—
        (a) given a satisfactory explanation of the accounts or report, or
        (b) revised the accounts or report so as to comply with the requirements of these Regulations,
        the Registrar may apply to the Court.
        (5) The provisions of this section apply equally to revised annual accounts and revised directors' reports, in which case they have effect as if the references to revised accounts or reports were references to further revised accounts or reports.

    • Application to Court

      • 430. Application to Court in respect of defective accounts or reports

        (1) An application may be made to the Court—
        (a) by the Registrar, after having complied with section 429 (Registrar's notice in respect of accounts or reports), or
        (b) by a person authorised by the Registrar for the purposes of this section,
        for a declaration that the annual accounts of a company do not comply, or a directors' report does not comply, with the requirements of these Regulations and for an order requiring the directors of the company to prepare revised accounts or a revised report.
        (2) Notice of the application, together with a general statement of the matters at issue in the proceedings, shall be given by the applicant to the Registrar for registration.
        (3) If the Court orders the preparation of revised accounts, it may give directions as to—
        (a) the auditing of the accounts,
        (b) the revision of any directors' report, and
        (c) the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous accounts,
        and such other matters as the Court thinks fit.
        (4) If the Court orders the preparation of a revised directors' report it may give directions as to—
        (a) the review of the report by the auditors,
        (b) the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous report, and
        (c) such other matters as the Court thinks fit.
        (5) If the Court finds that the accounts or report did not comply with the requirements of these Regulations it may order that all or part of—
        (a) the costs of and incidental to the application, and
        (b) any reasonable expenses incurred by the company in connection with or in consequence of the preparation of revised accounts or a revised report,
        (c) are to be borne by such of the directors as were party to the approval of the defective accounts or report.
        For this purpose every director of the company at the time of the approval of the accounts or report shall be taken to have been a party to the approval unless he shows that he took all reasonable steps to prevent that approval.
        (6) Where the Court makes an order under subsection (5) it shall have regard to whether the directors party to the approval of the defective accounts or report knew or ought to have known that the accounts or report did not comply with the requirements of these Regulations, and it may exclude one or more directors from the order or order the payment of different amounts by different directors.
        (7) On the conclusion of proceedings on an application under this section, the applicant must send to the Registrar for registration a copy of the Court order or, as the case may be, give notice to the Registrar that the application has failed or been withdrawn.
        (8) The provisions of this section apply equally to revised annual accounts and revised directors' reports, in which case they have effect as if the references to revised accounts or reports were references to further revised accounts or reports.

      • 431. Other persons authorised to apply to the Court

        (1) The Registrar may authorise for the purposes of section 430 (application to Court in respect of defective accounts or reports) (a "section 430 authorisation") any person appearing to it—
        (a) to have an interest in, and to have satisfactory procedures directed to securing, compliance by companies with the requirements of these Regulations relating to accounts and directors' reports,
        (b) to have satisfactory procedures for receiving and investigating complaints about companies' annual accounts and directors' reports, and
        (c) otherwise to be a fit and proper person to be authorised.
        (2) A person may be authorised generally or in respect of particular classes of case, and different persons may be authorised in respect of different classes of case.
        (3) The Registrar may refuse to authorise a person if it considers that his authorisation is unnecessary having regard to the fact that there are one or more other persons who have been or are likely to be authorised.
        (4) If the authorised person is an unincorporated association, proceedings brought in, or in connection with, the exercise of any function by the association as an authorised person may be brought by or against the association in the name of a body corporate whose constitution provides for the establishment of the association.
        (5) A section 430 authorisation may contain such requirements or other provisions relating to the exercise of functions by the authorised person as appear to the Registrar to be appropriate.

        No such authorisation is to be made unless it appears to the Registrar that the person would, if authorised, exercise his functions as an authorised person in accordance with the provisions proposed.
        (6) Where authorisation is revoked, the Registrar may make such provision as it thinks fit with respect to pending proceedings.

    • Power of authorised person to require documents etc.

      • 432. Power of authorised person to require documents, information and explanations

        (1) This section applies where it appears to a person who is authorised under section 431 (other persons authorised to apply to the Court) that there is, or may be, a question whether a company's annual accounts or directors' report complies with the requirements of these Regulations.
        (2) The authorised person may require any of the persons mentioned in subsection (3) to produce any document, or to provide him with any information or explanations, that he may reasonably require for the purpose of—
        (a) discovering whether there are grounds for an application to the Court under section 430 (application to Court in respect of defective accounts or reports), or
        (b) deciding whether to make such an application.
        (3) Those persons are—
        (a) the company,
        (b) any officer, employee, or auditor of the company,
        (c) any persons who fell within subsection (3)(b) at a time to which the document or information required by the authorised person relates.
        (4) If a person fails to comply with such a requirement, the authorised person may apply to the Court.
        (5) If it appears to the Court that the person has failed to comply with a requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.
        (6) Nothing in this section compels any person to disclose documents or information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.
        (7) In this section "document" includes information recorded in any form.

      • 433. Restrictions on disclosure of information obtained under compulsory powers

        (1) This section applies to information (in whatever form) obtained in pursuance of a requirement or order under section 432 (power of authorised person to require documents etc.) that relates to the private affairs of an individual or to any particular business.
        (2) No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.
        (3) This does not apply—
        (a) to disclosure permitted by section 434 (permitted disclosure of information obtained under compulsory powers), or
        (b) to the disclosure of information that is or has been available to the public from another source.
        (4) A person who discloses information in contravention of this section commits a contravention of these Regulations, unless—
        (a) he did not know, and had no reason to suspect, that the information had been disclosed under section 432 (power of authorised person to require documents, information and explanations), or
        (b) he took all reasonable steps and exercised all due diligence to avoid the commission of the contravention.
        (5) A person who commits the contravention referred to in subsection (4) shall be liable to a level 3 fine.
        (6) Where a contravention under this section is committed by a body corporate, every officer of the body who is in default also commits the contravention. For this purpose—
        (a) any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and
        (b) if the body is a company, any shadow director is treated as an officer of the company.

      • 434. Permitted disclosure of information obtained under compulsory powers

        (1) The prohibition in section 433 (restrictions on disclosure of information obtained under compulsory powers) of the disclosure of information obtained in pursuance of a requirement or order under section 432 (power of authorised person to require documents etc.) that relates to the private affairs of an individual or to any particular business has effect subject to the following exceptions.
        (2) It does not apply to the disclosure of information for the purpose of facilitating the carrying out by the authorised person of his functions under section 430 (application to Court in respect of defective accounts or reports).
        (3) It does not apply to disclosure to—
        (a) the Board,
        (b) the Registrar, or
        (c) the Financial Services Regulator.
        (4) It does not apply to disclosure—
        (a) for the purpose of assisting a body designated by rules to monitor auditors,
        (b) with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties,
        (c) for the purpose of enabling or assisting the Board to exercise its functions under any law or regulation applicable to the Abu Dhabi Global Market.
        (5) It does not apply to disclosure to a body exercising functions of a public nature under legislation in any jurisdiction outside the Abu Dhabi Global Market that appear to the authorised person to be similar to his functions under section 430 (application to Court in respect of defective accounts or reports) for the purpose of enabling or assisting that body to exercise those functions.
        (6) In determining whether to disclose information to a body in accordance with subsection (5), the authorised person must have regard to the following considerations—
        (a) whether the use which the body is likely to make of the information is sufficiently important to justify making the disclosure,
        (b) whether the body has adequate arrangements to prevent the information from being used or further disclosed other than—
        (i) for the purposes of carrying out the functions mentioned in that subsection, or
        (ii) for other purposes substantially similar to those for which information disclosed to the authorised person could be used or further disclosed.

      • 435. Power to amend categories of permitted disclosure

        (1) The Board may make rules amending section 434(3), (4) and (5) (permitted disclosure of information obtained under compulsory powers).
        (2) Rules under this section must not—
        (a) amend subsection (3) of that section (Abu Dhabi Global Market public authorities) by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function),
        (b) amend subsection (4) of that section (purposes for which disclosure permitted) by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature,
        (c) amend subsection (5) of that section (overseas regulatory authorities) so as to have the effect of permitting disclosures to be made to a body other than one that exercises functions of a public nature in a jurisdiction outside the Abu Dhabi Global Market.

      • 436. Liability for false or misleading statements in directors' reports

        (1) A director of a company is liable to compensate the company for any loss suffered by it as a result of—
        (a) any untrue or misleading statement in a directors' report, or
        (b) the omission from a directors' report of anything required to be included in it.
        (2) He is so liable only if—
        (a) he knew the statement to be untrue or misleading or was reckless as to whether it was untrue or misleading, or
        (b) he knew the omission to be dishonest concealment of a material fact.
        (3) No person shall be subject to any liability to a person other than the company resulting from reliance, by that person or another, on information in a report to which this section applies.
        (4) The reference in subsection (3) to a person being subject to a liability includes a reference to another person being entitled as against him to be granted any civil remedy or to rescind or repudiate an agreement.
        (5) This section does not affect liability for a contravention of these Regulations or any other Abu Dhabi Global Market regulations.

    • Accounting and reporting standards

      • 437. Accounting standards

        (1) In this Part "accounting standards" means international accounting standards or such other standard accounting practice as may be prescribed by rules made by the Board.
        (2) References in this Part to accounting standards applicable to a company's annual accounts are to such standards as are, in accordance with their terms, relevant to the company's circumstances and to the accounts.
        (3) Rules under this section may contain such transitional and other supplementary and incidental provisions as appear to the Board to be appropriate.