Pregunta 1

Keeping of accounting records. Cap. 13. 163. (1) In lieu of the requirements of articles 13 to 18 of the

Commercial Code a company shall be required to keep proper accounting records with respect to -

(a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place;

(b) the assets and liabilities of the company;

(c) if the company’s business involves dealing in goods: (i) statements of stocks held by the company at the

end of each accounting period of the company; (ii) all statements of stocktakings from which any

such statement of stocks as is mentioned in sub- paragraph (i) has been or is to be prepared; and (iii) except in the case of goods sold by way of

ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.

(2) For the purposes of subarticle (1), proper accounting records shall be deemed to have been kept with respect to the matters aforesaid if such records are sufficient to show and explain the company’s transactions and are such as to -

financial position of the company at that time; and (b) enable the directors to ensure that any balance sheet

and profit and loss account prepared under this Chapter complies with the requirements of this Act. (3) The accounting records shall be kept at the registered office of the company or at such other place as the directors think fit, and shall be at all times open to inspection by the officers of the company:

Provided that if accounting records are kept at a place outside Malta there shall be sent to, and kept at a place in Malta and at all times be open to the inspection of the officers of the company such accounts and returns with respect to the business dealt with in the accounting records so kept as will disclose with reasonable accuracy the financial position of that business at intervals not exceeding six months and will enable to be prepared, in accordance with this Act, the company’s balance sheet and its profit and loss account.

(4) A parent company which has a subsidiary undertaking, in relation to which the above requirements do not apply, shall take reasonable steps to secure that the subsidiary undertaking keeps such accounting records as to enable the directors of the parent company to ensure that any balance sheet and profit and loss account prepared complies with the requirements of this Act.

Cap. 13.

(5) Notwithstanding the provisions of article 26 of the

Commercial Code, the accounting records of the company shall be kept for a period of ten years:

Provided that where the accounting records are kept in a bound or unified form, the ten years shall commence to run from the date of the last entry made therein.

(6) If a company fails to comply with any provision of

subarticles (1) to (4), every officer of the company who is in default shall be guilty of an offence and liable on conviction to a fine (multa) of not more than five thousand liri, unless he shows that he acted diligently and that, in the circumstances in which the company’s business was carried on, the default was excusable.

(7) If a company fails to comply with the provisions of

subarticle (5), every officer of the company who is in default shall be liable to a penalty.

Accounting reference period and accounting reference date.

164. (1) A company’s accounting periods are determined by reference to its accounting reference date.

(2) A company may give notice in the prescribed form to the Re gistrar specify ing a date in the calendar year as being its accounting reference date:

Provided that no such notice shall have effect unless it is given before the end of nine months beginning with the date of the company’s registration; and, failing such notice, the company’s accounting reference date shall be the thirty-first of December.

period ending with its accounting reference date as begins on the date of its registration and is a period of not less than six months and not more than eighteen months; and each successive period of twelve months beginning after the end of the first accounting reference period and ending with the accounting reference date shall also be an accounting reference period of the company.

(4) A company’s first accounting period shall commence on the first day of its first accounting reference period and shall end on a date not more than seven days before or after the end of that accounting reference period as the directors may determine. S u b s e q u e n t a c c o u n t i n g p e r i o d s s h a l l c o m m e n c e o n t h e d a y immediately following the company’s previous accounting period and shall end on a date not more than seven days before or after the end of the next accounting reference period as the directors may determine.

(5) The directors of a parent company shall secure that, except where there are good reasons against it, the accounting period of each of its subsidiary undertakings shall coincide with the parent company’s own accounting period.

Alteration of accounting reference period.

Amended by: IV. 2003.70.

165. (1) At any time during a period which is an accounting reference period of a company by virtue of article 164 or 166 the company may give notice in the prescribed form to the Registrar specifying a date in the cale ndar year (" th e new accoun ting reference date") on which that accounting reference period ("the c u r r e n t a c c o u n t i n g r e f e r e n c e p e r i o d " ) a n d e a c h s u b s e q u e n t accounting reference period of the company is to be treated as coming to an end or, as the case may require, as having come to an end.

(2) At any time after the end of a period which was an

accounting reference period of a company by virtue of article 164 or 166 the company may give notice in the prescribed form to the R e g i s t r a r s p e c i f y i n g a d a t e i n t h e c a l e n d a r y e a r (" t h e n e w accounting reference date") on which that accounting reference period ("the previous accounting reference period") and each subsequent accounting reference period of the company is to be treated as coming or, as the case may require, as having come to an end.

(3) A notice under subarticle (2), shall, however -

(a) have no effect unless the company is a subsidiary undertaking or parent company of another company and the new accounting reference date coincides with the accounting reference date of that other company; and

(b) have no effect if the period allowed under article 182 for delivery of the annual accounts in relation to the previous accounting period to be laid before the company in general meeting has already expired at the time when the notice is given.

(4) A notice under this article shall state whether the current or previous accounting reference period of the company -

(a) is to be treated as shortened, so as to come to an end or, as the case may require, be treated as having come to an end on the new accounting reference date on the first occasion on which that date falls or fell after the beginning of that accounting reference period; or (b) is to be treated as extended, so as to come to an end or,

as the case may require, be treated as having come to an end on the new accounting reference date on the second occasion on which that date falls or fell after the beginning of that accounting reference period.

(5) A notice which states that the current or previous

accounting reference period is to be extended shall have no effect if the current or previous accounting reference period, as extended in accordance with the notice, would exceed eighteen months.

(6) Subject to any direction given by the Registrar under subarticle (7), a notice which states that the current or previous accounting reference period is to be extended shall have no effect unless -

(a) no earlier accounting reference period of the company has been extended by virtue of a previous notice given by the company under this article; or

(b) the notice is given not less than five years after the date on which any earlier accounting reference period of the company which was so extended came to an end; or

(c) the company is a subsidiary undertaking or parent company of another undertaking and the new accounting reference date coincides with the accounting reference date of that other undertaking. (7) The Registrar may, if he thinks fit, direct that the provisions of subarticle (6) shall not apply to a notice already given by a company under this article or, as the case may be, in relation to a notice which may be so given.

Consequence of giving notice under article 165.

166. (1) Where a company has given notice with effect in accordance with article 165 and that notice has not been superseded by a subsequent notice by the company which has such effect, the new date specified in the notice shall be the company’s accounting reference date in substitution for that which, by virtue of article 165 or this article, was its accounting reference date at the time when the notice was given.

(2) Where by virtue of a notice as is referred to in subarticle (1) one date is substituted for another as the accounting reference date of a company -

(a) the current or previous accounting reference period, shortened or extended, as the case may be, in accordance with the notice; and

(b) each successive period of twelve months beginning after the end of that accounting reference period, as so shortened or extended, and ending with the new

accounting reference date,

shall be treated as having been an accounting reference period of the company, instead of any period which would have been an accounting reference period of the company if the notice had not been given.

(3) The provisions of article 165 and the provisions of this article shall not affect any accounting reference period of the company which -

(a) in the case of a notice under article 165(1) is earlier than the current accounting reference period; or (b) in the case of a notice under article 165(2) is earlier

than the previous accounting reference period.

General provisions as to content and form of individual accounts. Amended by: IV. 2003.71.

167. (1) The directors of every company shall prepare for each accounting period individual accounts comprising the balance sheet as at the last day of the accounting period to which they refer, the profit and loss account for that period, the notes to the accounts and any other financial statements which may be required by generally accepted accounting principles and practice. These documents shall constitute a composite whole.

(2) The individual accounts shall be drawn up clearly and in accordance with the provisions of this Act and with generally accepted accounting principles and practice:

Provided that in the event that a provision of this Act is in conflict or is not compatible with generally accepted accounting principles and practice, the accounts shall be drawn up so as to give a true and fair view in terms of the requirements established under subarticle (3).

(3) The individual accounts shall give a true and fair view of the company’s assets, liabilities, financial position and profit or loss.

(4) The individual accounts shall comply with the requirements of the Third Schedule as to the form and content of the balance sheet and profit and loss account and as to additional information to be provided by way of notes to the accounts.

(5) Where the application of the provisions of this Act would not be sufficient to give a true and fair view within the meaning of subarticle (3), additional information shall be given.

(6) Where in exceptional cases the application of a provision of this Act is incompatible with the obligation for the individual accounts to give a true and fair view, that provision shall be departed from in order to give a true and fair view. Any such departure shall be disclosed in the notes to the accounts together with an explanation of the reasons for it and a statement of its effect on the assets, liabilities, financial position and profit or loss.

Annual accounts of banks and financial institutions. Amended by: XVII.1998.70; IV. 2003.72. Cap. 371. Cap. 376. Cap. 290.

168. (1) Notwithstanding the provisions of article 167(4) and of article 171(4), banks governed by the Banking Act, financial institutions governed by the Financial Institutions Act, and insurance companies governed by the Insurance Business Act* need not apply the provisions of the Third and Fourth Schedules.

Cap. 371. Cap. 376.

(2) Banks and financial institutions shall follow the directives issued by the relevant competent authority under the Banking Act, and the Financial Institutions Act, respectively, in relation to the form and content of their annual accounts or if no such directives have been issued they shall follow any guidelines issued by such competent authority in this regard.

Cap. 403.

(3) Insurance companies shall comply with regulations made under the Insurance Business Act in respect of the form and content of their annual accounts or if no such regulations have been made they shall follow any directives issued by the competent authority in this regard.

(4) Special provisions may be prescribed by the Minister by n o t i c e i n t h e G a z e t t e f o r t h e a n n u a l a c c o u n t s o f i n v e s t m e n t co mpa nies w ith fix ed sh are c apita l and of finan cial ho ld ing companies in lieu of the provisio ns of th e Third and Fourth Schedules. Accounts of investment company with variable capital. Amended by: IV. 2003.73.

169. (1) Notwithstanding the provisions of article 167(4) in so far as they relate to the application of the Third Schedule for the individual accounts of companies, an investment company with variable share capital shall prepare its individual accounts in accordance with the format set out in the Fifth Schedule.

(2) The director’s report of an investment company with

variable share capital shall provide information sufficient to enable investors to make an informed judgment on the development of the company’s activities and its financial performance.

(3) In all other respects, the annual accounts and director’s report of an investment company with variable share capital shall be prepared in accordance with the provisions applicable to companies generally to the extent that they are not inconsistent with the provisions of the preceding subarticles of this article and the Fifth Schedule.

Duty to prepare consolidated accounts.

170. (1) If at the end of an accounting period a company is a parent company the directors sh all, as well as preparin g the individual accounts for that company, also prepare consolidated accounts.

(2) A parent company and all of its subsidiary undertakings shall be undertakings to be consolidated regardless of where the r e g i s t e r e d o f f i c e s o r p r i n c i p a l o f f i c e s o f s u c h s u b s i d i a r y undertakings are situated.

(3) A subsidiary undertaking may be excluded from

consolidation if its inclusion is not material for the purpose of g i v i n g a t r u e a n d f a i r v i e w ; b u t t w o o r m o r e s u b s i d i a r y undertakings may be excluded only if their inclusion is not material when taken together.

(4) A subsidiary undertaking may be excluded from

consolidation where -

(a) severe long-term restrictions substantially hinder the exercise of the rights of the parent company over the assets or management of that undertaking; or

(b) the interest of the parent company is held exclusively with a view to subsequent resale and the undertaking has not previously been included in consolidated accounts prepared by the parent company.

The reference in paragraph (a) to the rights of the parent company and the reference in paragraph (b) to the interest of the parent company are, respectively, to rights and interests held by or attributed to the company for the purposes of article 2(2) in the absence of which it would not be the parent company.

(5) Where the activities of one or more subsidiary undertakings are so different from those of other undertakings to be included in the consolidation that their inclusion would be incompatible with the obligation to give a true and fair view, those undertakings shall be excluded from consolidation. This subarticle shall not apply merely because some of the undertakings are industrial, some commercial and some provide services, or because they carry on industrial or commercial activities involving different products or because they provide different services.

(6) Where all the subsidiary undertakings of a parent company fall within the above exclusions, no consolidated accounts shall be required.

(7) Where the undertaking excluded from the consolidation pursuant to subarticle (5) is an undertaking not established in Malta its ind ividual accounts shall be attached to the consolidated accounts of the parent company translated into English or Maltese, where the original is not in one of these languages.

(8) The requirements specified in subarticle (7) shall be subject to the following qualifications -

(a) an undertaking is not required to prepare for the purposes of this article accounts which would not otherwise be prepared, and if no accounts satisfying the said requirements are prepared, none need be attached;

(b) a document need not be appended if it would not otherwise be required to be published, or made available for public inspection, anywhere in the world, but in that case the reason for not attaching it shall be