2007 - Ceylon Petroleum Corporation

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The Secretary to the Audit Committee
is the Manager of internal audit. All
key managers may attend the Audit
Committee meetings by invitation.
In order to assure that a sound system
of internal controls is maintained, the
Audit Committee ensures that the
Annual Audit Programme, covering the
Head Office and all operational areas, is
prepared on an annual basis. Internal and
external audit reports are reviewed by the
Audit Committee on a regular basis and
recommendations are made to the Board
of the Corporation on the appropriate
action to be taken on various issues.
Management Committee
The Management Committee sits once
a month to discuss current issues,
especially in relation to functional
areas. The Committee is headed by two
Directors who assist the Chairman of the
Committee. In this Committee, issues
are discussed in detail and decisions
taken are forwarded to the Board of
Directors for final approval.
Financial Disclosure
The Board of Directors is responsible
for presenting Financial Statements
that provide a true and fair view of the
operations of the Corporation. These
statements are prepared in accordance
with the requirements of Sri Lanka
Accounting Standards, the Finance Act
and the Corporations Act.
Internal Controls
The Board of Directors is responsible for
maintaining a sound system of internal
controls and reviewing its effectiveness.
The system is intended to safeguard the
assets of the Corporation and to ensure
that proper records are maintained
and reliable information is produced.
This responsibility covers all types of
controls, including financial, operational
and compliance controls as well as risk
management. It is vital to state, however,
that any system of internal control can
ensure only reasonable and not absolute
assurance that errors and irregularities
will be presented or detected within a
reasonable period of time.
The Internal Audit Department of
the Corporation is responsible for
ensuring the adequacy of internal
control procedures, and makes regular
recommendations on improvements.
Internal Audit
In order to enhance the objectivity
and performance of the internal audit
function, the Corporation has created
a direct reporting line from the internal
auditors to the Chairman/Managing
Director, the Audit Committee and the
Board of Directors.
The internal audit function has
established its annual risk-based audit
programme for identifying, assessing,
monitoring and managing material
risk-based activities throughout the
Corporation. Under the programme, the
risk management system is reviewed
regularly, in order to fulfil the objectives
stated in the Audit Plan. Financial and
operational risks based on audits and
reviews of compliance and control
procedures as well as assessments of
the effectiveness of all mechanisms
established to improve efficiency of the
Corporation, are all reviewed as part of
the risk management system.
The main focus of the internal audit is to
provide independent assurance on the
overall system of internal controls, risk
management and governance processes
by evaluating the adequacy, integrity
and effectiveness of the internal controls
established by the Corporation.
In its annual audit plan the internal
auditors included plans to carry out
audit investigations relating to stock
losses at terminals and bulk depots.
The Chairman/Managing Director
established the Stock Control Loss Steering
Committee (SCLSC) for identifying,
assessing, monitoring and recommending
stock-related risks and losses.
The SCLSC comprises members
with professional qualifications in
diverse fields such as engineering and
ANNUAL REPORT 2007 | CEYLON PETROLEUM CORPORATION