THE COMPANIES ORDINANCE, 1972

Accounts

139.—(1) Every company shall cause to be kept in the English language proper books of account 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.

(2) For the purposes of the foregoing subsection, proper books of account shall not be deemed to be kept with respect to the matters aforesaid if there are not kept such books as are necessary to give a true and fair view of the state of the company's affairs and to explain its transactions.

(3)  The books of account shall be kept at the registered office of the company or at such other place as the directors think fit, and shall at all times be open to inspection by the directors :

Provided that if books of account are kept at a place outside Seychelles there shall be sent to, and kept at a place in, Seychelles, and be at all times open to inspection by the directors, such accounts and returns with respect to the business dealt with in the books of accounts so kept as will disclose with reasonable accuracy the financial position of that business at intervals not exceedng six months, and will enable to be prepared in accordance with this Ordinance the company's balance sheet, its profit and loss account, and any document annexed to any of those documents giving information which is required by this Ordinance and is thereby allowed to be so given.

(4)  If any person being a director of a company fails to secure compliance by the company with the requirements of this section, or has by his own act been the cause of any default by the company thereunder, he shall in respect of each offence, be punishable by a fine not exceeding ten thousand rupees or by imprisonment for not more than two years, or by both such fine and imprisonment :

Provided that—

(a)   in any proceedings against a person in respect of an offence under this section consisting of a failure to secure compliance by the company with the requirements of this section, it shall be a defence to prove that he had reasonable ground to believe, and did believe, that a competent and reliable person was charged with the duty of seeing that those requirements were complied with and ,was in a position to discharge that duty; and

(b)   a person shall not be sentenced to imprisonment for an offence under this section unless, in the opinion of the court dealing with the case, the offence was committed wilfully.

140.—(1) The directors of every company shall lay before each annual general meeting of the company a profit and loss account for the period, in the case of the first account, since the incorporation of the company, and, in any other case, since the preceding account, made up to a date earlier than the date of the meeting by no more than nine months, or, in the case of a company carrying on business or having interests outside Seychelles, by no more than twelve months :

Provided that the Registrar, if for any special reason he thinks fit so to do, may, in the case of any company with respect to any year extend the periods of nine and twelve months aforesaid.

(2)  The directors shall cause to be made out and to be laid before each annual general meeting, a balance sheet as at the date to which the profit and loss account is made up.

(3)  If a company fails to comply with the provisions of this section, every director of the company shall, in respect of each offence be punishable by a fine not exceeding ten thousand rupees or by imprisonment for not more than two years, or by both such fine and imprisonment :

Provided that a director shall not be sentenced to imprisonment for such an offence unless, in the opinion of the court dealing with the case, the offence was committed wilfully.

(4)  In this Ordinance a reference to a profit and loss account shall, in the case of a company not trading for profit, be construed as a reference to a revenue and expenditure account.

141.—(1) The memorandum or articles of a company may provide that it need not hold an annual general meeting in any year if copies of its balance sheet, profit and loss account, group accounts (if any) and directors' annual report and auditors' report are sent to every shareholder and every debenture holder at least four weeks before the latest date by which the company is required by section 119(1) to hold an annual general meeting, and no shareholder or debenture holder has at least eight weeks before that date served a written notice on the company requiring it to hold an annual general meeting.

(2) This section shall not apply if : —

(a) the auditor's report on any of the said accounts is qualified in any respect, or contains any statements or corrections of statements required to be made in the directors' annual report; or

(b)   the directors' annual report or any of the said accounts shov/s that the company has suffered a loss in the period to which the accounts relate, or that the fixed dividend in respect of any of the company's preference shares will not be paid in full for that period, or that the dividends recommended by the drector; in respect of all classes of the company's shares for that period together with al! interim dividends declared during that period exceed the amount of the company's profits for that period ; or

(c)   any members of the company give notice under section 126(1) of their intention to move a resolution at the annual general meeting ; or

(d)   an auditor of the company gives notice to it in writing that he is unwilling to be re-appointed as auditor.

(3)  If a company which avails itself of subsection (1) of this section has bearer share certificates or bearer debentures issued and outstanding, it shall at least four weeks before the latest date by which it is required by section 119(1) to hold an annual general meeting publish in a daily newspaper circulating in Seychelles an advertisement containing the accounts and reports copies of which are required to be sent to shareholders and debenture holders, and the publication of that advertisement shall be deemed to be the sending of copies of those accounts and reports to the holders of such bearer share certificates and bearer debentures.

(4)  If a company avails itself of subsection (1) of this section and satisfies the conditions therein contained, sections 119, 125, 127 to 133 inclusive, 137 and 140 and 159(2) and (4) shall not apply in respect of the annual general meeting or the accounts and reports which this Ordinance requires to be laid before the annual general meeting for the year in question.

(5)   In this Ordinance references to a company's annual accounts shall mean its balance sheet, its profit and loss account and its group accounts laid or to be laid before an annual general meeting or, if the company avails itself of this section, circulated to its shareholders and debenture holders and (where applicable) advertised under subsection (3) of this section ; and references to a company's annual accounts and reports shall likewise mean such accounts and the reports of the company's auditor and directors laid or to be laid before an annual general meeting, or if the company avails itself of this section, circulated and (where applicable) advertised as aforesaid.

142.—(1) Every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of its financial year, and every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year, or if the company does not trade for profit, of its revenue and expenditure for the financial year.

(2)  A company's balance sheet and profit and loss account shall comply with the requirements of the Sixth Schedule to this Ordinance, so far as applicable thereto.

(3)  Save as expressly provided in the following provisions of this section, the requirements of subsection (2) and the said Sixth Schedule shall be without prejudice either to the general requirements of subsection (1) of this section or to any other requirements of this Ordinance.

(4)  The Registrar, on the application or with the consent of a company's directors, may modify in relation to that company any of the requirements of this Ordinance as to the matters to be stated in a company's balance sheet or profit and loss account (except the requirements of subsection (1)) for the purpose of adapting them to the circumstances of the company.

(5)  If in respect of any accounts laid before the company at an annual general meeting, or in respect of any accounts circulated to shareholders and debenture holders or published under section 141, a company fails to comply with the provisions of this section and with the other requirements of this Ordinance as to the matters to be stated in accounts, every director of the company shall be guilty of an offence punishable by a fine not exceeding ten thousand rupees or by imprisonment for not more than two years, or by both such fine and such imprisonment :

Provided that a director shall not be sentenced to imprisonment for any such offence unless, in the opinion of the court dealing with the case, the offence was committed wilfully.

(6)  For the purposes of this section and the following provisions of this Ordinance, except where the context otherwise requires, any reference to a balance sheet or profit and loss account shall include any notes thereon or document annexed thereto giving information which is required by this Ordinance and is thereby allowed to be so given.

(7)  The Governor in Council may by regulations supplement, amend or rescind any of the requirements of the Sixth Schedule to this Ordinance, and it shall then take effect subject to the modifications made by such regulations.

143.—(1) Where at the end of its financial year a company has subsidiaries, accounts or statements (in this Ordinance referred to as "group accounts") dealing as hereinafter mentioned with the state of affairs and profit or loss of the company and the subsidiaries shall, subject to the next following subsection, be laid before the company in annual general meeting or, if the company avails itself of section 141, be circulated to its members and registered debenture holders and (where applicable) advertised under section 141(3), when the company's own balance sheet and profit and loss account are so laid or circulated.

(2) Notwithstanding anything in the foregoing subsection—

(a)   group accounts shall not be required where the company is at the end of its financial year the wholly-owned subsidiary of another company or body corporate incorporated in Seychelles ; and

(b)   group accounts need not deal with a subsidiary of the company if the company's directors are of opinion that—

(i) it is impracticable, or would be of no real value to members of the company, in view of the insignificant amounts involved, or would involve expense or delay out of proportion to the value to members of the company; or

(ii) the result would be misleading, or harmful to the business of the company or any of its subsidiaries; or

(iii) the business of the holding company and that of the subsidiary are so different that they can-not reasonably be treated as a single undertaking ;

and the Registrar consents to the omission, of the assets and liabilities and the profit or loss of the subsidiary from the company's group accounts, or, if the Registrar is willing to give such a consent in respect of all the company's subsidiaries, the Registrar consents to the company not laying or circulating group accounts.

(3)  If any company fails to comply with the provisions of this section, every director of the company shall, in respect of each default be guilty of an offence punishable by a fine not exceeding ten thousand rupees or to imprisonment for not more than two years, or to both such fine and imprisonment :

Provided that a director shall not be sentenced to imprisonment for an offence under this section unless, in the opinion of the court dealing with the case, the offence was committed wilfully.

(4)  For the purposes of this Ordinance a company shall be deemed to be the wholly-owned subsidiary of another company or body corporate if it has no members, shareholders or debenture holders except that other and that other's wholly-owned subsidiaries and its or their nominees.

(5)  This section and sections 144 and 145 shall not come into operation until a date appointed by the Governor in Council by notice in the Gazette.

144.—(1) The group accounts laid before an annual general meeting of a holding company or, if a holding company avails itself of section 141, the group accounts circulated to the shareholders and debenture holders of the holding company and (where applicable) advertised under section 141(3) shall be consolidated accounts comprising : —

(a)   a consolidated balance sheet dealing with the state of affairs of the company and all the subsidiaries to be dealt with in group accounts;

(b)   a consolidated profit and loss accewht dealing with the profit and loss of the company and those subsidiaries.

(2)  The group accounts laid before a company shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with thereby as a whole, so far as concerns shareholders and debenture holders of the company.

(3)  Where the financial year of a subsidiary does not coincide with that of the holding company, the group accounts shall, unless the Registrar on the application or with the consent of the holding company's directors otherwise directs, deal with the subsidiary's state of affairs as at the end of its financial year ending with, or last before, that of the holding company, and with the subsidiary's profit or loss for that financial year.

(4)  Without prejudice to subsection (2) of this section, the group accounts shall comply with the requirements of the Sixth Schedule to this Ordinance (as modified by any regulations made under section 142(7) and for the time being in force) so far as such requirements are applicable thereto :

Provided that the Registrar may, on the application or with the consent of a company's directors, modify the said requirements in relation to that company for the purpose of adapting them to the circumstances of the company.

145.—(1) A holding company's directors shall secure that the financial year of each of its subsidiaries shall coincide with the company's own financial year, but if the financial year of a subsidiary has not previously coincided with the holding company's financial year, the Registrar may permit such an arrangement to continue if the company satisfies him either : —

(a) that disproportionate expense would be incurred if the subsidiary's financial year were to be changed ; or

(b) that a true and fair view of the matters mentioned in section 144(2) will be given by the group accounts even though the subsidiary's financial year does not coincide with that of the holding company ; but the Registrar may at any time withdraw permission given by him under this subsection if, after affording the holding company an opportunity to submit representations to him in writing and considering any such representations submitted by it, he is of the opinion that neither paragraph (a) nor (b) of this subsection continues to be satisfied.

(2) Where it appears to the Registrar desirable for a holding company or a holding company's subsidiary to extend its financial year so that the subsidiarys financial year may end with that of the holding company, and for that purpose to postpone the submission of the relevant accounts to a general meeting from one calendar year to the next, the Registrar may on the application or with the consent of die directors of the company whose financial year is to be extended direct that, in the case of that company, the submission of accounts to a general meeting, the holding of an annual general meeting or the making of an annual return shall not be required in the earlier of the said calendar years.

146.—(1) In the annual accounts of a company, or in a statement annexed thereto, there shall, subject to and in accordance with the provisions of this section, be shown : —

{a) the amount of each director's emoluments ;

(b)   the amount of each director's and each past director's pensions ; and

(c)   the amount of any compensation paid to or received by each director and each past director in respect of loss of oflice.

(2) the amount to be shown under paragraph (a) of subsection (1) of this section—

(a)   shall include emoluments paid to, or receivable by, a person in respect of his services as a director of the company, or in respect of his services, while a director of the company, as a director of a company belonging to the same group of companies as the company, or otherwise in connection with the management of the affairs of the company or a company belonging to the same group of companies as the company; and

(b)   shall distinguish between emoluments in respect of services as a director, whether of the company or of a company belonging to the same group of companies as the company, and other emoluments, and between emoluments paid or payable by the company and other emoluments ;

and for the purposes of this section the expression "emoluments", in relation to a director, includes fees, commissions, shares or percentages of the profits of the company or of a company belonging to the same group of companies as the company, any sums paid by way of expenses allowance, any contribution paid in respect of him under any pension scheme and the estimated money value of any other benefits received or receivable by him otherwise than in cash.

(3)  The amount to be shown under paragraph (b) of the said subsection (1) : —

(a)   shall not include any pension paid or receivable under a pension scheme if the scheme is such that the contributions thereunder are substantially adequate for the maintenance of the scheme, but save as aforesaid, shall include any pension paid or receivable in respect of any such services of a director or past director of the company as are mentioned in the last foregoing subsection, whether to or by him or, on his nomination or by virtue of dependence on or other connection with him, to or by any other person ; and

(b)   shall distinguish between pensions in respect of services as a director, whether of the company or of a company belonging to the same group of companies as the company, and other pensions, and between pensions paid or payable by the company and other pensions ;

and for the purposes of this section the expression "pension" includes any superannuation annuity, superannuation allowance, superannuation gratuity or similar payment, and the expression "pension scheme" means a scheme for the provision of pensions in respect of services as a director or otherwise which is maintained in whole or in part by means of contributions, and the expression "contribution" in relation to a pension scheme means any payment (including an insurance premium) paid for the purposes of the scheme by or in respect,of persons rendering services in respect of which pensions will or may become payable under the scheme.

(4)  The amount to be shown under paagraph (c) of the said subsection (1)—

(a) shall include any sums paid to or receivable by a director or past director by way of compensation for the loss of office as a director of the company or for the loss, while a director of the company or on or in connection with his ceasing to be a director of the company, of any other office in connection with the management of the company's affairs, or of any office as a director or otherwise in connection with the management of the affairs of a company belonging to the same group of companies as the company ; and

(b) shall distinguish between compensation in respect of the office of director, whether of the company or of a company belonging to the same group of companies as the company, and compensation in respect of other offices, and between compensation paid or payable by the company and other compensation ;

and for the purposes of this section references to compensation for loss of office shall include sums paid as consideration for or in connection with a person's retirement from office.

(5)  The amounts to be shown under this section for any financial year shall be the sums receivable in respect of that year, whenever paid, or, in the case of sums not receivable in respect of a period, the sums paid during ihat year.

(6)  Where it is necessary so to do for the purpose of making any distinction required by this section in any amount to be shown thereunder, the directors may apportion any payments between the matters in respect of which they have been paid or are receivable in such manner as they think appropriate.

(7)  If in the ease of any accounts the requirements of this section are not complied with, it shall be the duty of the auditors of the company by whom the accounts are examined to include in their report thereon, or to give by way of note, so far as they are reasonably able to do so, a statement giving the required particulars.

(8)  In this section any reference to a company belonging to the same group of companies as the company shall for the purposes of subsections (2) and (3) be taken as referring to such a company at the time the services were rendered, and for the purposes of subsection (4) be taken as referring to such a company immediately before the loss of office as director of the company.

147. In the annual accounts of a company, or in a statement annexed thereto, there shall be shown : —

(a)   the number of directors who have waived rights to receive emoluments which, but for the waiver, would have fallen to be included in the amount shown in those accounts under paragraph (a) of section 146(1);

(b)  the aggregate amount of the said emoluments.

(2)  For the purposes of this section-

(a) it shall be assumed that a sum not receivable in respect of a period would have been paid at the time at which it was due to be paid ;

(b) a sum not so receivable that was payable only on demand, being a sum the riijht to receive which has been waived, shall be deemed to have been due for payment at the time of the waiver.

(3)  Section 146(7) shall apply to the matters required by this section to be included in the annual accounts of a company.

148.—(1) The annual accounts of a company, or a statement annexed thereto, shall, subject to the provisions of this section, contain particulars showing-fa) the amount of any loans made during the company's financial year to : —

(i) any officer of the company ; or

(ii) any person who, after the making of the loan, became during that year an officer of the company ; by the company or by a company belonging to the same group of companies as the company, or by any other person under a guarantee from or on a security provided by the company or such another company (including any such loans which were repaid during that year); and

(b) the amount of any loans made in manner aforesaid to any such officer or person as aforesaid at any time before the company's financial year and outstanding at the expiration thereof.

(2) The foregoing subsection shall nor require the inclusion in accounts of particulars of —

(a) a loan made in the ordinary course of its business by the company or a company belonging to the same group of companies as the company, where the ordinary business of the company or, as the case may be, the other company, includes the lending of money ; or

(b) a loan made by the company or such another company to an employee of the company or the other company, as the case may be, if the loan does not exceed five thousand rupees or such greater sum as may be prescribed by regulations made under this Ordinance and is certified by the directors of the company or tho other company, as the case may be, to have been made in accordance with any practice adopted or about to be adopted by the company or the other company with respect to loans to its employees ; not being, in either case, a loan made by the company under a guarantee from or on a security provided by a company belonging to the same group of companies as the company, or a loan made by a company belonging to the same group of companies as the company under a guarantee from or on a security provided by the company or another company belonging to the said group.

(3)  Section 146(7) shall apply to the matters required by this section to be included in the annual accounts of a company.

(4)  References in this section to a company belonging to the same group of companies as the company shall be taken as referring to such a company at the end of the company's financial year (whether or not such a company at the date of the loan).

149.—(1) Subject to the provisions of this section, where, at the end of its financial year, a company has subsidiaries, there shall, in the case of each subsidiary, be stated in, or in a statement annexed to, the annual accounts of a company : —

(a)   the subsidiary's name ;

(b)   the country (if other than Seychelles) in which it is incorporated ; and

(c)   in relation to shares of each class of the subsidiary held by the company or by nominees for it, the identity of the class and the proportion of the issued and outstanding shares of that class represented by the shares so held.

(2)  Subsection (1) of this section shall not require the disclosure of information with respect to a company which is the subsidiary of another and is incorporated outside Seychelles or, being incorporated in Seychelles, carries on business outside Seychelles, if the disclosure would, in the opinion of the directors of the subsidiary's holding company, be harmful to the business of that holding company or of any of its subsidiaries, and the Registrar consents to the information not being disclosed.

(3)  Section 146(7) shall apply to the matters required by this section to be included in the annual accounts of a company.

150.—(1) Subject to the provisions of this section, if, at the end of its financial year, a company holds shares of any class in another company which is its associated company but not its subsidiary, there shall be stated in, or in a statement annexed to, the annual accounts of the first-mentioned company the name of that other company and the country (if other than Seychelles) in which it is incorporated, and the identity of each class of shares of that other company held by the first mentioned company or its nominees, and the proportion of the issued and outstanding shares of that class represented by the shares so held.

(2) Section 146(7) shall apply to the matters required by this section to be included in the annual accounts of a company.

151.—(1) Subject to subsection (2), where, at the end of its financial year, a company is the subsidiary of another company or body corporate, there shall be stated in, or in a note on, or statement annexed to, the annual accounts of the iirst-mentioned company the name of the company or body corporate regarded by the directors as being the first-mentioned company's ultimate holding company and, if known to them, the country in which it is incorporated.

(2) The foregoing subsection shall not require the disclosure by a company which carries on business outside Seychelles of information with respect to the company or body corporate regarded by the directors as being the ultimate holding company of the first-mentioned company if the disclosure would, in their opinion, be harmful to the business of that holding company or of the first-mentioned company or any other of that holding company's subsidiaries, and the Registrar consents to the information not being disclosed.

(3) In this section "ultimate holding company" means a holding company of the company to whose annual accounts this section applies, being a holding company which is not itself a subsidiary of any other company or body corporate.

152.- (1) It shall be the duty of every company which is the subsidiary, holding company, or subsidiary of the holding company, of another company within one month of the expiration of the financial year of that orher company to notify it in writing of all the matters relating to the affairs of the company giving the notice which are required to be included in the annual accounts of that other company or in a statement annexed thereto, by sections 146 to 151 inclusive.

(2)  It shall be the duty of every director of every company which is required to give a written notification to another company under the last foregoing subsection, and It shall also be the duty of every director of. that other company, within one month of the expiration of the financial yeai of that other company to notify it in writing of all the matters relating to him personally which are required to be included in the other company's annual accounts, or in a statement annexed thereto, by sections 146 to 148 inclusive :

Provided that if any part of a director's emoluments is calculated by reference to the profits or gross receipts of any company or companies for a financial year thereof, or any class of stich profits or gross receipts, the director shall be deemed to have complied with this subsection in respect of those emoluments if he notifies the manner in which the emoluments are so calculated and the amount received on account thereof during the financial year of the company to which the notification is given, and further notifies the amount thereof within one month after the annual accounts of the first mentioned company or each of those companies are approved by its directors under section 159(1).

(3)  It shall be the duty of a compaiy in which another company holds shares in circumstances which make it necessary for that other company to include particulars of its shareholding in its annual accounts under section 150, to notify that other company, within one month after it makes a written request in that behalf, of the number and nominal value of each class of its shares issued and outstanding on the date specified by the other company in its request, being the last day of its financial year.

(4)  If : —

(a)   a company fails to include in its annual accounts any matter required to be included therein by sections 146 to 151 ; or

(b)   a company fails to make any of the notifications required to be made by it under subsections (1) and (3) within the time thereby limited, or makes a notification which is false, deceptive, misleading or incomplete ;

every director of the company who is in default shall be guilty of an offence punishable by a fine not exceeding ten thousand rupees or by imprisonment for not more than two years, or by both such fine and such imprisonment.

(5)  If a director fails to make any of the notifications required to be made by him under subsection (2) within the time thereby limited, or makes a notification which is false, deceptive, misleading or incomplete, he shall be guilty of an offence punishable in like manner as an offence under subsection (4).

(6)  A director shall not be sentenced to imprisonment for an offence under this section unless, in the opinion of the court dealing with the case, the offence was committed wilfully.

(7)  References in this section to matters required to be included in a company's annual accounts or in a statement annexed thereto shall be construed as references to matters which are required to be shown separately therein, and to matters which are required to be, or which may be, shown in combination with other matters.