AUDIT COMMITTEE REPORT

Committee Composition during 2023

1

 

  Mr A C Manilka Fernando * 

Chairman/ Independent Non-Executive 
Director

2

  Mr Harsha Wijayawardana** 

Member/ Independent Non-Executive 
Director

3

  Mr R M Priyantha Rathnayake  

Member/ Non-Independent Non-
Executive Ex-officio Director

4

  Major General (Rtd.) 

G A Chandrasiri VSV 
Member/ Independent Non-Executive 
Director

Note:
*  Ceased to be a Director w.e.f. 

21 April 2023

**  Ceased to be a Director w.e.f. 

13 January 2023

Pursuant to the reconstitution of the Board in 
May 2023, the following Directors constituted 
the Audit Committee w.e.f. 05 May 2023:

1

 

  Mr Naresh Abeyesekera 

Chairman/ Independent Non-Executive 
Director

2

 

  Mr R M Priyantha Rathnayake  

Member/ Non-Independent Non-
Executive Ex-Officio Director

3

  Major General (Rtd.) 

G A Chandrasiri VSV *** 
Member/ Independent Non-Executive 
Director

Note:
*** Ceased to be a Director w.e.f. 07 January 

2024.

Pursuant to the reconstitution of the Board 
in February 2024, the following Directors 
constituted the Audit Committee w.e.f.  
19 February 2024:

1

 

  Mr Naresh Abeyesekera 

Chairman/ Independent Non-Executive 
Director

2

  Mr R M Priyantha Rathnayake  

Member/ Non-Independent Non-
Executive Ex-Officio Director

3

  Prof. Kithsiri M Liyanage 

Member/ Independent Non-Executive 
Director

Secretary to the Committee

The Secretary, Bank of Ceylon/Secretary 
to the Board, Janaki S Siriwardane who is 
an Attorney-at-Law and a Senior Deputy 
General Manager, functions as the 
Secretary to the Committee.

Regular participants

• 

Chief Internal Auditor

• 

Chief Risk Officer

• 

Chief Financial Officer

• 

Deputy General Manager (Finance and 
Planning)

• 

Deputy General Manager (Compliance)

• 

Assistant General Manager 
(Operational Audit)

• 

Assistant General Manager 
(Investigations)

• 

Assistant General Manager (Credit 
Audit)

• 

Assistant General Manager (Information 
Systems Audit)

• 

Internal Auditor

• 

Representative of the Auditor 
General (The External Auditor of the 
Bank)

Attend upon invitation

• 

General Manager

• 

Any other member of Corporate or 
Executive Management/ Any other 
Staff Member

Meetings held in 2023: 10 
(Attendance given on page 116 of this 
Report)

Quorum:

members

or majority of the members whichever is 
higher.

ROLE OF COMMITTEE

Audit Committee Charter

The Terms of Reference of the Audit 
Committee are governed by the Audit 
Committee Charter, approved and 
adopted by the Board.

The Committee also ensures that the 
scope and coverage of its functions 
addresses the requirements of the 
Banking Act Direction No. 11 of 2007 
on “Corporate Governance for Licensed 
Commercial Banks in Sri Lanka” and its 
subsequent amendments issued by the 
Central Bank of Sri Lanka.

Principal Focus

The Audit Committee primarily focuses 
on assisting the Board in fulfilling its 
duties by providing an independent and 
objective review of the Bank’s financial 
reporting process.

Medium of Reporting

The proceedings of the Audit Committee 
meetings are tabled and ratified at the 
Board meetings, where all key issues, 
concerns, actions taken, outcomes 
achieved or pending, and follow-up 
initiated, are clarified, discussed and 
Board approval obtained thereof.

AREAS OF FOCUS AND 

ACTIVITIES IN 2023

Financial Reporting
• 

Reviewed the monthly, quarterly and 
annual unaudited/audited Financial 
Statements to ensure that they are 
prepared and published in accordance 
with the requirements prescribed 
by the supervisory and regulatory 
authorities and applicable Accounting 
Standards.

• 

Reviewed the liquidity management, 
capital adequacy and foreign currency 
management.

Regulatory Compliance

• 

Reviewed compliance with mandatory 
banking and other statutory 
requirements.

• 

Reviewed the progress of action 
taken in relation to the findings of the 
statutory examinations carried out by 
regulators.

Internal Controls

• 

Reviewed the adequacy and 
effectiveness of the internal control 
mechanism of the Bank in line with 
Section 3(8) (ii)(b) of the Banking Act 
Direction No.11 of 2007 through the 
Internal Control Matrix updated for 
2023.

• 

On a regular basis and when 
specific events or cases warranted, 
conducted root cause analysis and 
made improvements to the systems, 
procedures and internal controls.

Internal Audit

• 

Reviewed the independence, 
objectivity, and performance of the 
internal audit function as well as 
the adequacy of the Department’s 
resources.

• 

Approved the Internal Audit Plan 
and reviewed the effectiveness of 
the implementation of the Plan 
throughout the year.

• 

Monitored the progress of the 
initiatives taken by the Internal Audit 
Department to improve Internal 
Control Monitoring Process. 

• 

Monitored the compliance with the 
Banking Act Direction No. 11 of 2007 
on Corporate Governance issued 
by Central Bank of Sri Lanka, Audit 
Charter and Audit Committee Charter.

• 

Reviewed the implementation 
process of the COBIT (IT Governance 
Framework)

• 

Improved the Whistle Blowing System 
of the Bank, enabling the complaints 
to be submitted directly through the 
online web portal of Bank of Ceylon 
under Whistle Blowing category of 
the feedback section which is directly 
accessible to the Chief Internal 
Auditor of Bank of Ceylon. 

• 

Reviewed and amended the Internal 
Audit Department organisation 
structure with a view to achieving the 
objective of Internal Audit Charter and 
matching the structure to the present 
context. Accordingly, recommended 
to recruit new professional staff.

• 

Evaluated the quality of the 
credit portfolio of the Bank and 
recommended necessary initiatives to 
improve the credit quality.

• 

Monitored the progress of the Internal 
Audit function of the subsidiaries.

• 

Special reviews were done on 
Expected Credit Loss Models, Cyber 
Security, Loans granted on Donor 
Agency Funding.  

External Audit

• 

The external audit of the Bank is 
carried out by the Auditor General 
in terms of the Constitution of the 
country. This year the Auditor General 
was assisted by M/s. Ernst & Young, 
Chartered Accountants in the audit 
of the Bank. The Committee ensured 
that the external audit is carried out 
effectively and independently and 
maintained a continuous rapport with 
the representatives of the Auditor 
General in relation to the audit 
approach and procedure.

• 

Conducted close door meetings with 
external auditors.

WAY FORWARD

The Audit Committee will foster a 
positive and effective internal control 
environment by committing to achieve 
the objectives set out in the Audit 
Committee Charter during 2024 and 
beyond.

The Committee wishes to place on 
record an appreciation for 
Mr A C Manilka Fernando (Chairman), 
Mr Harsha Wijayawardana and Major 
General (Rtd.) G A Chandrasiri VSV, 
members of the Committee for the 
invaluable contribution made to the 
Committee. 

On behalf of the Audit Committee.

Mr Naresh Abeyesekera
Chairman,
Audit Committee

19 February 2024

Note : With the appointment of new members 

to the Board, Mr Jehaan Ismail, Independent 
Non-Executive Director, has been appointed as a 
member of the Committee.