Section 40: Audit committee

40. Audit committee (1) Every bank and non-bank deposit taking institution incorporated in Mauritius shall, by resolution of its board of directors, establish an audit committee which shall, subject to subsection (2), comprise only independent directors who shall not be less than 3 in number. (2) The central bank may, having regard to the scope of the activities undertaken by the bank, require that the audit committee be composed of such number of non-executive directors where the bank is a subsidiary or an associate of a foreign banking group of companies, as the central bank may direct. (3) The audit committee of a bank or the non-bank deposit taking institution shall— (a) review the audited financial statements of the bank or the nonbank deposit taking institution before they are approved by the directors; (b) require management of the bank or the non-bank deposit taking institution to implement and maintain appropriate accounting, internal control and financial disclosure procedures and review, evaluate and approve such procedures; continued on page B3 – 33 [Issue 9] B3 – 32 (4) Revised Laws of Mauritius (c) review the transactions that may adversely affect the sound financial condition of the bank or the non-bank deposit taking institution as the auditors or any officer of the bank or the nonbank deposit taking institution may bring to the attention of the committee or as may otherwise come to its attention; (d) perform such additional duties as may be assigned to it by the board of directors; and (e) report to the directors on the conduct of its responsibilities, with particular reference to section 39. (4) (a) The internal auditor of the bank or the non-bank deposit taking institution shall report to the audit committee. (b) Subject to paragraph (c), the internal auditor and the external auditor shall be available to the audit committee to attend its meetings. (c) The audit committee shall meet the internal auditor and the external auditor at least once annually. (5) Every member of the audit committee shall keep confidential, and not disclose, any information obtained in the course of its functions to third parties, save as otherwise provided for under this Act. (6) The central bank may require such other financial institution licensed under this Act to comply with this section. [S. 40 amended by s. 3 (g) of Act 10 of 2010 w.e.f. 24 December 2010]