Annual report and audit

(1) Every local licensee shall appoint annually an approved auditor whose duties shall be to make a report upon the annual balance sheet, profit and loss accounts and statement of cash flows in respect of his international banking business, and in every such report the auditor shall state whether, in his opinion, proper books and records of account have been kept, whether the balance sheet and other accounts and financial statements are in agreement with the licensee’s books and records, and whether the balance sheet, profit and loss accounts and statement of cash flows are complete and fair and properly drawn up and whether it exhibits a true and correct statement of the financial condition and affairs of the licensee, and in any case in which the auditor has called for explanation or information from the officers or agents of the licensee, whether the same was found to be satisfactory. 42 (2) The report of an approved auditor under sub-section (1), along with copies of the balance sheet, profit and loss accounts, statement of cash flows, supplementary notes and management letter, shall be sent by the licensee to the Central Bank within four months after the close of the licensee’s financial year, or such longer period as the Central Bank may in writing approve. (3) In the case of a foreign licensee, the consolidated audit report and financial statements of the foreign bank as stipulated in sub-section (2) shall be sent to the Central Bank within the time stipulated therein. (4) Every licensee who fails to comply with the requirements of sub-section (2) or (3) shall be liable, upon being called upon in writing by the Central Bank to do so, to pay a penalty of five thousand dollars for each day of such failure to comply except where an extension to the period has been granted in writing by the Central Bank. (5) A copy of the report of the auditor shall bear on its face the certificate of the auditor and shall be displayed by every licensee in a conspicuous place in his business office in Belize. (6) No person having an interest in any local licensee other than as a depositor, and no director, officer or agent of the licensee or of an affiliate of the licensee shall be eligible for appointment as an approved auditor for that licensee; and any person appointed as such auditor to any licensee who subsequently acquires such interest or becomes a director, officer or agent of that licensee shall cease to be auditor. (7) If the Central Bank, on reasonable grounds, is not satisfied with the annual report of an auditor appointed by a local licensee, it may appoint another auditor to make an independent audit report, and in every such case the Central Bank shall fix the remuneration to be paid by the licensee to such auditor appointed under this sub-section. 43 (8) If a licensee fails to appoint an approved auditor under this section, the Central Bank may appoint an auditor who shall have all the powers and duties of an auditor appointed by the licensee to carry out an audit. The Central Bank shall fix the remuneration to be paid by that licensee to such auditor appointed under this sub-section. (9) If the auditor appointed under this section becomes aware, during the course of his examination of the licensee or at any other time, that the licensee is conducting his affairs in an unsafe and unsound manner, is insolvent or may soon become insolvent, is in contravention of this Act or any terms and conditions that may be attached to his licence, is involved in or is aiding or abetting fraudulent or criminal activity, he shall forthwith report such findings to the Central Bank. Any auditor making such report shall not be legally liable for such disclosure if he acts in good faith. (10) Any auditor who fails to report his findings to the Central Bank as required under sub-section (9) commits an offence and shall be liable on summary conviction to a fine not exceeding ten thousand dollars. (11) For the purpose of this section, an approved auditor is an auditor who is a member of one of the professional bodies for the time being declared by the Central Bank by notice in the Gazette to be approved for such purposes. (12) A licensee shall forthwith give notice to the Central Bank if the licensee– (a) proposes to give special notice to its shareholders of an ordinary resolution removing an auditor before the expiration of his engagement; or (b) gives notice to its shareholders of an ordinary resolution replacing an auditor at the expiration of his engagement with a different 44 auditor, or if a person ceases to be an auditor of the institution otherwise than in consequence of such a resolution. (13) An auditor or a licensee appointed under this section shall forthwith give written notice to the Central Bank if he– (a) resigns before the expiration of his engagement; (b) does not seek to be re-appointed, or (c) decides to include in his report on the licensee’s accounts any qualification that indicates that the licensee may be carrying on its business in a manner detrimental to the interests of its depositors or of its creditors, or may have insufficient assets to satisfy its liabilities as they mature or become due, or may be contravening any of the provisions of this Act. (14) A licensee or auditor who fails to comply with this section commits an offence and shall be liable on summary conviction to a fine not exceeding fifty thousand dollars or to imprisonment for a term not exceeding twelve months, or to both such fine and imprisonment. (15) No duty to which an auditor may be subject shall be regarded as contravened by reasons of his communicating in good faith to the Central Bank, whether or not in response to a request made by it, any information about a licensee or opinion pursuant to an obligation of the auditor under this Act. (16) This section applies to any matter of which an auditor becomes aware in his capacity as auditor and which relates to the business or affairs of the licensee or any affiliate of the 45