The Audit Committee, appointed by and responsible to the Board of Directors was reconstituted in December 2008 and comprise of three Independent Non-Executive Directors as follows,

• Mr. C. F. Fernando- Chairman
• Mr. N. de S. Deva Aditya
• Dr. A.N. Balasuriya

The Group Chief Executive Officer, the Group Head of Audit and Compliance, Group Financial Controller, Head of Finance and Chief Internal Auditor also attend the meetings of the Audit committee by invitation.

Terms of Reference
The Audit Committee Charter clearly sets out the specific terms of reference governing the Audit Committee ensuring highest compliance with the Corporate Governance Rules applicable to listed Companies.

Activities and Responsibilities

Financial Reporting
The Committee reviews and discusses the financial reporting system adopted by the Group in the preparation of its quarterly and annual Financial Statements with the Management and the External Auditors to ensure reliability of the processes and the consistency of the Accounting Policies adopted and its compliance with the Sri Lanka Accounting Standards and the provisions of the Companies Act No. 7 of 2007.

Risks and Controls
The Committee obtains and reviews the major business risks and mitigatory action taken or contemplated for each business sector of the Group.

Internal Audit
The internal audit function of the company is carried out by the Internal Audit Division supported by the Group Management Division. The Committee reviews the effectiveness of the internal audit plan to ensure that it has been designed to provide reasonable assurance that the financial reporting system adopted by the Group can be relied on the preparation and presentation of the financial statements. The Committee also reviews the findings of the Internal Auditors and their recommendations together with the management responses and regularly follows up the progress of the implementation of such recommendations in order to enhance the overall control environment.

External Audit
The Audit Committee meets with the External Auditors to discuss the scope and the audit strategy including the coordination of the Group Audit. The Committee also reviews and discusses the report of the auditors and Management Letters issued by them with and without the management on separate occasions to ensure that no limitations have been placed on their scope of work and conduct of the audit.

The Committee carries out an annual evaluation of the External Auditors to establish their independence and objectivity and also obtains a written declaration from the Auditors in this regard. The Committee has stipulated that the Lead Audit Partner is rotated every five years.

Compliance with Laws and Regulations

The Committee reviews the quarterly compliance reports submitted by the compliance officer to ensure that the Company has complied with all statutory requirements.

The Remuneration Committee which was constituted in December 2008 is responsible for determining the remuneration package of the Chairman / Managing Director and the Executive Directors. The primary objective of the Committee is to formulate and implement policies to attract, retain and motivate qualified and experienced Executive Directors.

The Remuneration Charter of the Company ensures that the compensation packages of the Directors are in line with market trends and commensurate with their expertise and contribution to the organization. The Chairman / Managing Director assists the Committee by providing relevant information and participating in its deliberations except when his own compensation package is reviewed.

The Remuneration Committee consists of the three Independent Non-Executive Directors namely,

• Dr. A.N. Balasuriya – Chairman
• Mr. C.F. Fernando
• Mr. N. de S. Deva Aditya