BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
The company shall keep a copy of this list, and the original shall be sent to the Ministry of Industry and Commerce, accompanied by the annual report pre - pared by the board of directors, the company’s bal - ance sheet and the profit and loss account. The board of directors of a public shareholding com - pany is required to publish the balance sheet, the profit and loss account, an executive summary of the annual report and the full text of the auditor’s report in a local daily newspaper, published in Arabic, at least 15 days before the general meeting. Failure to publish the summary gives rise to liability, which may extend to personal liability, and will render the invitation inva - lid and the general meeting voidable. The Ministry of Industry and Commerce may, among other things, inspect accounts, suspend or delete commercial reg - istrations, and impose administrative fines. 5.4 Global Anti-Money Laundering The CCL does not contain specific provisions deal - ing with global or international AML reporting require - ments. However, as per the Rulebook (eg, for bank licensees) issued by the CBB, financial groups must implement group-wide programmes including poli - cies for sharing information within the group for AML/ CFT purposes; this is applicable to all branches and subsidiaries. 6. Audit, Risk and Internal Controls 6.1 External Auditors The board of a joint stock company is required to ensure the integrity of the financial statements sub - mitted to shareholders through the appointment of external auditors. The general assembly meeting of joint stock com - panies shall appoint one or more auditors for the company and determine their fees according to the proposal of the board of directors. The auditor shall, among other things: • monitor the company’s business; • give opinions on the validity of the company’s financial statements and request adjustments as necessary; and
• verify the company’s ownership of assets and legality of obligations. Most importantly, auditors attend the general assem - bly meetings, read their report to the shareholders, and answers questions and queries regarding the year-end financial statements. 6.2 Risk Management and Internal Controls The CCL does not specifically address geopolitical risk or international sanctions oversight. However, the CBB Rulebook (eg, for bank licensees) requires the board to approve and oversee a risk manage - ment framework covering all material risks, includ - ing country/geographic risk. Licensees must assess country risk factors such as jurisdictions subject to UN sanctions or with weak AML regimes. Regarding sanctions, licensees must comply with United Nations Security Council Resolutions (UNSCRs), freeze des - ignated assets without delay and report sanctioned holdings to the CBB’s Compliance Directorate. Board- approved AML/CFT systems must be reviewed annu - ally. Companies with environment-related activities are subject to the rules and regulations governing this sector and are required to adhere to the laws on Envi - ronment and Public Health, as well as the regulations and standards of the Supreme Council for Environ - ment. Ensuring compliance with the law is considered good governance and is the responsibility of the com - pany and its board of directors. Social responsibility is one of the principles of corpo - rate governance detailed in 1.1 Sources of Corporate Governance Requirements . Companies are consid - ered to have social responsibility, and the board of directors is expected to have a code in place that sets out the social responsibilities of the company. A report on activities undertaken in this respect shall be included in the company’s annual report. 7. Environmental, Social and Governance 7.1 ESG Requirements
25 CHAMBERS.COM
Powered by FlippingBook