The First Audit Committee of CEPA was formally constituted in 2012 as a sub-committee of the Main Board, to which it is accountable. The Committee is chaired by Mr. P D Rodrigo (FCA), former Senior Partner of PricewaterhouseCoopers Sri Lanka and Non Executive Director of CEPA Board. Mr. Chandra Jayaratne (FCA), Member of CEPA and Mrs. Mano Alles, Chairperson of the CEPA Development Fund Trustees are the other members of the Audit Committee.

The Audit Committee, established for the purpose of assisting the Board in fulfilling its responsibilities relating to the integrity of financial statements, risk management, compliance with legal and regulatory requirements and review of external auditors independence and performance, has written terms of references, dealing clearly with its authority and responsibilities.

The following are the principal activities carried out by the Audit Committee during the year ended 31st December 2012.

Compliance with Financial Reporting

The Audit Committee reviewed the quarterly and annual financial statements for their integrity and the annual report for consistency of statements made therein so far as they relate to financial performance and financial position of the Company.
The review also included:

• Appropriateness and changes in Accounting Policies.
• Compliance with relevant Accounting Standards and applicable regulatory requirements.

Risk Management

The Audit Committee meets the Head of Finance and Administration and Executive Director on a quarterly basis and discusses with them the steps they have taken to have in force an effective system of internal control and to identify, assess and manage the operational risks of the Company.

Compliance with Laws and Regulations
The Audit Committee reviewed the reports submitted by the management on the state of compliance with applicable laws and regulations, and settlement of statutory payments within the required periods.

External Auditors
The Audit Committee reviewed the independence and performance of the External Auditors, Messrs Ernst & Young., Chartered Accountants.

The Audit Committee agreed with the management to call for proposals from not less than four reputed auditors for the audit of CEPA financial statements for the year to 31st December, 2013.

Meetings of Audit Committee
Five Audit Committee meetings were held during the year ended 31st December, 2012.

Deshamanya P. D. Rodrigo (FCA)
Chairman - Audit Committee