• Requirement for audited accounts

    • 447. Requirement for audited accounts and public interest entities and financial institutions

      (1) A company's annual accounts for a financial year must be audited in accordance with this Part unless the company is exempt from audit under—

      section 449 (small companies),

      section 452 (subsidiary companies),

      or section 455 (dormant companies).
      (2) A company is not entitled to any such exemption unless its balance sheet contains a statement by the directors to that effect.
      (3) A company is not entitled to exemption under any of the provisions mentioned in subsection (1) unless its balance sheet contains a statement by the directors to the effect that—
      (a) the members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 448 (right of members to require audit), and
      (b) the directors acknowledge their responsibilities for complying with the requirements of these Regulations with respect to accounting records and the preparation of accounts.
      (4) The statement required by subsection (2) or (3) must appear on the balance sheet above the signature required by section 399 (approval and signing of accounts).
      (5) In this Part, "public interest entity" and "financial institution" shall have the meaning given to them in section 372 (public interest entities and financial institutions).
      (6) This Part does not apply to restricted scope companies who shall be exempt from audit for the purposes of these Regulations.

    • 448. Right of members to require audit

      (1) The members of a company that would otherwise be entitled to exemption from audit under any of the provisions mentioned in section 447(1) (exemptions from audit of annual accounts) may by notice under this section require it to obtain an audit of its accounts for a financial year.
      (2) The notice must be given by—
      (a) members holding shares representing not less in total than 10% of the total number of shares or any class of shares issued by the company, or
      (b) if the company does not have a share capital, not less than 10% in number of the members of the company.
      (3) The notice may not be given before the financial year to which it relates and must be given not later than one month before the end of that year.

    • 449. Small companies: conditions for exemption from audit

      (1) A company that qualifies as a small company in relation to a financial year is exempt from the requirements of these Regulations relating to the audit of accounts for that year.

      For the purposes of this section whether a company qualifies as a small company shall be determined in accordance with section 369 (companies qualifying as small).
      (2) This section has effect subject to—

      section 447 (2) and (3) (requirements as to statements to be contained in balance sheet),

      section 448 (right of members to require audit),

      section 450 (companies excluded from small companies exemption), and

      section 451 (availability of small companies exemption in case of group company).

    • 450. Companies excluded from small companies exemption

      A company is not entitled to the exemption conferred by section 449 (small companies) if it was at any time within the financial year in question—

      (a) a public interest entity, or
      (b) a financial institution.

    • 451. Availability of small companies exemption in case of group company

      (1) A company is not entitled to the exemption conferred by section 449 (small companies) in respect of a financial year during any part of which it was a group company unless—
      (a) the group—
      (i) qualifies as a small group in relation to that financial year, and
      (ii) was not at any time in that year an ineligible group, or
      (b) subsection (2) applies.
      (2) A company is not excluded by subsection (1) if, throughout the whole of the period or periods during the financial year when it was a group company, it was both a subsidiary undertaking and dormant.
      (3) In this section—
      (a) "group company" means a company that is a parent company or a subsidiary undertaking, and
      (b) "the group", in relation to a group company, means that company together with all its associated undertakings.
      For this purpose undertakings are associated if one is a subsidiary undertaking of the other or both are subsidiary undertakings of a third undertaking.
      (4) For the purposes of this section—
      (a) whether a group qualifies as small shall be determined in accordance with section 370 (companies qualifying as small: parent companies), and
      (b) "ineligible group" has the meaning given by section 371 (2) and Error! Reference source not found. (companies excluded from the small companies regime)
      (5) The provisions mentioned in subsection (4) apply for the purposes of this section as if all the bodies corporate in the group were companies.

    • 452. Subsidiary companies: conditions for exemption from audit

      (1) A company is exempt from the requirements of these Regulations relating to the audit of individual accounts for a financial year if—
      (a) it is itself a subsidiary undertaking, and
      (b) its parent undertaking is established under the law of the Abu Dhabi Global Market.
      (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 454 (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 in accordance with international accounting standards,
      (d) the parent undertaking must disclose in the notes to the consolidated accounts that the company is exempt from the requirements of these Regulations relating to the audit of individual accounts by virtue of this section, and
      (e) the directors of the company must deliver to the Registrar on or before the date that they file the accounts for that year—
      (i) a written notice of the agreement referred to in subsection (2)(a),
      (ii) the statement referred to in section 454 (1),
      (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.
      (3) This section has effect subject to—

      section 447(2) and (3) (requirements as to statements contained in balance sheet), and

      section 448 (right of members to require audit).

    • 453. Companies excluded from the subsidiary companies audit exemption

      A company is not entitled to the exemption conferred by section 452 (subsidiary companies) if it was at any time within the financial year in question—

      (a) a company listed on a recognised investment exchange, or
      (b) a financial institution.

    • 454. Subsidiary companies audit 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 and its registered number,
      (b) the name and registered number of the subsidiary company in respect of which the guarantee is being given,
      (c) the date of the statement, and
      (d) 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.

    • 455. Dormant companies: conditions for exemption from audit

      (1) A company is exempt from the requirements of these Regulations relating to the audit of accounts in respect of a financial year if—
      (a) it has been dormant since its formation, or
      (b) it has been dormant since the end of the previous financial year and the following conditions are met.
      (2) The conditions are that the company—
      (a) as regards its individual accounts for the financial year in question—
      (i) is entitled to prepare accounts in accordance with the small companies regime (see sections 368 (companies subject to the small companies regime) to 371 (companies excluded from the small companies regime)), and
      (ii) is not required to prepare group accounts for that year.
      (3) This section has effect subject to—

      section 447(2) and (3) (requirements as to statements to be contained in balance sheet),

      section 448 (right of members to require audit), and

      section 456 (companies excluded from dormant companies exemption).

    • 456. Companies excluded from dormant companies exemption

      A company is not entitled to the exemption conferred by section 455 (dormant companies) if it was at any time within the financial year in question licensed under the Commercial Licensing Regulations 2015 as a financial institution.