The Case Study - Seylan Bank

Seylan Bank PLC Annual Report 2009 1019. Approving the annual internal audit plans.10. Review Bank’s annual and interim FinancialStatements.11. Review the process of carrying out investigationswherever necessary to assist the board.Activities during the yearCommittee carried out the following activitiesduring the year under review:1. Audit CharterA new audit charter was prepared and approvedduring the year.2. Financial ReportingThe Committee discussed and reviewed thefinancial reporting process in the Bank on behalfof the board. All interim Financial Statementsand annual Financial Statements were reviewedprior to their release for compliance with statutoryand regulatory requirements including theSri Lanka Accounting Standards, the CompaniesAct No. 07 of 2007, Sri Lanka Accounting andAuditing Standards Act No. 15 of 1995, the BankingAct No. 30 of 1988 (as amended). Conformity wasalso ensured to other regulatory requirementssuch as the Listing Rules of the Colombo StockExchange and Banking Act Direction No. 11 of 2007and subsequent amendments thereto.3. Regulatory ComplianceProcedures were in place to ensure compliancewith banking and other statutory regulations.During the year, these procedures were reviewedthrough monthly/quarterly reports submitted bythe senior management to the board of directors.4. Internal Audit and InspectionBank was able to prepare an annual audit planfor the year under review. A total of 39 auditsand 90 investigations were carried out. The AuditDivision was also restructured and a new DGMwas recruited, who has an extensive industry andauditing experience. Work is currently in progressto restructure the Internal Audit Division againcombining the information systems audit functionswith the Division. The Committee reviews andmonitors the effectiveness of the internal audit andinspection functions and the performance of theInternal Audit and Inspection Department.5. External AuditThe Committee met with the External Auditors -KPMG Ford, Rhodes, Thornton & Co., duringthe year to discuss the Management letters andthe Financial Statements and also to plan outthe scope, approach and the methodology to beadopted in carrying out the annual audit.6. Audit ManualThe Committee has approved outsourcing thepreparation of a risk-based Internal Audit Manualfor the Bank to PricewaterhouseCoopers, CharteredAccountants.7. GovernanceThe Committee also ensured that good corporategovernance was practiced in conformity with theBanking Act Direction No. 11 of 2007 and subsequentamendments thereto (Central Bank Code of CorporateGovernance for licensed commercial banks), theListing Rules of the Colombo Stock Exchange andthe Code of Best Practice on Corporate Governanceissued jointly by the SEC & ICASL and the appropriateprocedures were in place to conduct independentinvestigations whenever it was needed.8. Evaluation of the CommitteeAs authorised by the board, the NominationsSubcommittee of the board through an annualevaluation, assessed the effectiveness of the AuditCommittee as satisfactory.The Audit Committee has recommended to theboard of directors that Messrs KPMG Ford, Rhodes,Thornton & Co., be re-appointed as Auditors for thefinancial year ending 31st December, 2010 subjectto the approval of shareholders at the next AnnualGeneral Meeting.Lalith WithanaChairman - Audit Committee26th January 2010