Chapter Ten Company's Accounts

التاريخ

2004-01-21

Article (184)	Observance of Accounting Principles
	A-	A Public Shareholding Company shall organize its accounts and keep its registers and books in accordance with the recognized international accounting and auditing standards.
	B-	The Minister in coordination with the specialized professional entities shall issue the necessary instructions to insure the application of international accounting standards and their recognized principles in a manner that realizes the objectives of this Law, and safeguards the rights of the Company and its shareholders.
	C-	1.	The specialized professional entities shall adopt recognized international accounting and auditing standards and rules.
		2.	For the purposes of this Law the phrase “recognized international accounting and auditing standards and rules” shall apply to any phrase that may implicitly or explicitly refer to the application of the accounting and auditing principles and standards and rules or what may be related to same.

Article (185)	The Company's Fiscal Year
	A-	The fiscal year of a Public Shareholding Company shall start on the first of January of each year and shall end on the thirty first of December of the same year, unless the Company's Memorandum of Association provides otherwise.
	B-	Should the Company commence its business during the first half of the year, then its fiscal year shall end on the thirty first of December of the same year. However, if the Company commences its business in the second half of the year, then its first fiscal year shall end on the thirty first of December of the following year.

Article (186)	Distribution of Profit and Compulsory Reserve
	A-	The Public Shareholding Company may not distribute any dividends to its shareholders except from its profits, and after settling the rotated losses of the previous years. The Company shall deduct an amount equivalent to 10% of its annual net profit for the compulsory reserve account. No profits shall be distributed to shareholders before the deduction of such an amount. These deductions may not cease before the total amount accumulated in the account of the statutory reserve has become equal to one quarter of the Company subscribed capital. However, the Company may, with the approval of the General Assembly continue to deduct this annual ratio until this reserve equals the subscribed capital of the Company in full.
	B-	A Public Shareholding Company may not distribute its compulsory reserve amongst its shareholders. However, the Company may use the said reserve to secure the minimum limit of profits as required by the agreement of Companies having concessions, for any year, where their profits at the said year cannot secure that minimum limit. The Company's Board of Directors must return to that reserve the amounts which have already been deducted there from whenever the profits of the Company allow that in the following years. The Council of Ministers may, shall the need arise, partially use the compulsory reserve of the Company, as the case may be, to cover its payments for the purpose of settling surplus profits realized for the government that are in excess of the profit stipulated in accordance with the concession agreement in which it is a party provided that such reserve is returned in accordance with the provisions of paragraph (a) of this Article.

Article (187)	Voluntary Reserve and its Use, and the Special Reserve
	A-	The General Assembly of a Public Shareholding Company may upon the suggestion of its Board of Directors, decide to annually deduct 20% of its annual net profits for the account of the voluntary reserve.
	B-	The voluntary reserve of a Public Shareholding Company shall be used for the purposes decided upon by its Board of Directors. The General Assembly shall have the right to distribute that reserve in full or in part as profits to shareholders, if it has not been used for those purposes.
	C-	The General Assembly of the Public Shareholding Company may, upon the submission of its Board of Directors, decide to annually deduct not more than 20% of its net profits for that year as a special reserve to be used for emergency, expansion purposes, or for enhancing the financial position of the Company and facing the risks which it may encounter.

Article (188)	Cancelled

Article (189)	Net Profit Calculation
	In order to achieve the intended purposes of Articles (186), (187) and (188) of this Law, the net profits of a Public Shareholding Company represent the difference between the total realized revenues in any fiscal year, on the one hand, and the sum of expenses and depreciation in that year, on the other hand, before deducting the allocations for income and social service taxes.

Article (190)	Employees Saving Funds
	The Company may set up a savings fund for its employees, which shall enjoy an independent corporate identity, in pursuance to a special regulation issued by the Company's Board of Directors and approved by the official competent authorities in accordance with provisions of the legislation in force. This regulation shall include insurance that the fund shall be administratively and financially independent from the Company's administration.

Article (191)	Profits, the method for Distribution, and the Forms Necessary for the Preparation and Presentation of the Account Statements
	A-	The rights of a shareholder to the annual profits of a public shareholding company evolve pursuant to a decision by the General Assembly regarding the distribution of dividends.
	B-	The right of the shareholder to receive profits from the Company shall be on the date of the meeting of the General Assembly whereby it decides to distribute profits. The Company's Board of Directors shall announce this in at least two daily newspapers, and through other means of media within one week at most from the date of the issuance of the General Assembly’s decision. The Company shall notify the Controller and the Market of that decision.
	C-	The Company is obligated to pay the dividends determined for distribution to the shareholders within forty-five days from the date of the General Assembly’s meeting. In case of default, the Company shall pay interest to the shareholder at the prevailing interest rate on time deposits during the delay period, provided that the delay period for payment of dividends shall not exceed six months from the date of maturity thereof.
	D-	The Minister shall, in cooperation with competent authorities, issue the forms which are necessary for preparing and presenting the statements of accounts and for issuing the accounting policies related to Public Shareholding Companies except for banks, financial institutions and insurance companies where the financial statements thereof shall be made in coordination with the Central Bank, the Securities Commission and Insurance Regulatory Commission, as the case may be.

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