ASIAN HOTELS AND PROPERTIES PLC AnnuAl RepoRt 2012/13

eport of the audit committeePASSIONASIAN HOTELS AND PROPERTIES PLCAnnual Report 2012 /13122Role of the CommitteeThe role of the Audit Committee is toassist the Board in fulfilling its oversightresponsibilities for the integrity of thefinancial statements of the Company,the internal control and risk managementsystems of the Company and itscompliance with legal and regulatoryrequirements, the external auditors’performance, qualifications andindependence and the adequacy andperformance of the internal audit function,which at John Keells is termed GroupBusiness Process Review Division (GroupBPR). This is detailed in the terms ofreference of the Committee which has beenapproved by the Board.Composition of the Committee andMeetingsThe Audit Committee comprised of threeNon-Executive Independent Directors.The Chairman of the Audit Committee andanother member of the Committee areChartered Accountants while the othermember of the Committee has a specialistfinancial background. The Director Financeof the Hotel sector served as the Secretaryto the Audit Committee.The President of the Property Groupof John Keells Holdings, CEO of theCompany’s Property Division, The GeneralManager of Cinnamon Grand, SectorFinancial Controllers of Property and HotelsSectors together with the Head of GroupBusiness Process Review of John KeellsHoldings PLC, attend audit committeemeetings by invitation. Outsourced InternalAuditors, Pricewaterhouse Coopers (Pvt)Ltd., and Independent External AuditorsKPMG are required to attend meetings on aregular basis.The Audit Committee held four (4) meetingsduring the financial year. Information on theattendance at these meetings is given underCorporate Governance on page 40. Theeffectiveness of the Committee is evaluatedannually by each member of the Committeeand the results are communicated to theBoard.The activities and views of the Committeehave been communicated to the Boardof Directors quarterly through verbalbriefings and by tabling the minutes of theCommittee’s meeting.Financial ReportingThe Audit Committee has reviewed anddiscussed the Company’s quarterlyand annual financial statements prior topublication with the management andexternal auditors, including the extent ofcompliance with Sri Lanka AccountingStandards and the adequacy of disclosuresrequired by other applicable laws, rulesand guidelines. The Committee has alsoregularly discussed the operations ofthe Company and its future prospectswith management and is satisfied thatall relevant matters have been taken intoaccount in the preparation of the financialstatements.This is the first year for which the financialstatements have been presented incompliance with the new Sri LankaAccounting Standards (SLFRS/LKAS),which have materially converged with theInternational Financial Reporting Standards(IFRS). Considerable effort and planning hasgone into ensuring that this transition hastaken place efficiently.The External Auditors were engaged toperform a special purpose audit of theCompany interim financial statements forthe six months ended 30th September2012, with special focus on compliancewith the new accounting standards,including the reporting requirements forfirst time adoption. The results of the auditwere discussed with the management andauditors.Internal Audit, Risks and ControlsPricewaterhouse Coopers (Pvt) Ltdcontinued to serve as the OutsourcedInternal Auditors of the Company, andthe audit plans and scope of work wereformulated in consultation with the JohnKeells Group Business Process Review(Group BPR) Division and approved by theCommittee.The main focus of the Internal Audit wasto provide independent assurance onthe overall system of internal controls,risk management and governance, byevaluating the adequacy and effectivenessof internal controls, and compliance withlaws and regulations and establishedpolicies and procedures of the company.During the year, reports were receivedby the Committee from the OutsourcedInternal Auditors, which were reviewedand discussed with management, theOutsourced Internal Auditors and theJohn Keells Group BPR Division. Therecommendations of the Internal Auditorshave been followed up and are beingimplemented.The Audit Committee has also reviewedthe processes for the identification,evaluation and management of all significantoperational risks faced by the Company.The most significant operational risksand the remedial measures taken tomitigate them have been reviewed withthe management and the John KeellsGroup Sustainability and Enterprise RiskManagement division.Formal confirmations and assurances havebeen received from senior management ona quarterly basis regarding the efficacy and