Report of the Audit Committee

Report of the

Audit Committee

In keeping with the Code of Best Practice on Corporate Governance and the requirements of the Securities and Exchange Commission for Public Limited Companies, Raigam Wayamba Salterns PLC has established an Audit Committee whose functions, authority and duties have been clearly identified in the Audit Committee Charter. This Charter integrates all the requirements of the Securities and Exchange Commission and Code of Best Practice on Corporate Governance.

The Role of the Audit Committee is to oversee the financial reporting systems of the Company with a view of safeguarding the interests of all the stakeholders and ensuring that it has been extended to its subsidiaries. This includes selecting and applying appropriate accounting policies for the purpose of financial reporting, ensuring sound internal control principles and its effective implementation, ensuring the integrity of Financial Statements and maintaining an appropriate independent relationship with the Company’s Auditors.

Formation and Composition of the Committee

The Audit Committee was established by the Board with a formal and transparent arrangement and the Committee comprises of three Independent NonExecutive Directors.

Mr. T. Dharmarajah (Chairman)

Snr. Prof. S. P. P. Amaratunge

Mr. W. A. Upali Gunawardena

The Chairman of the Audit Committee is Mr. T. Dharmarajah, who is an Independent NonExecutive Director, a fellow member of The Institute of Chartered Accountants of Sri Lanka and a Senior Partner of Messrs Amerasekera and Company, a well-recognized firm of Chartered Accountants in Sri Lanka, with expert knowledge in Accounting and Finance.

Duties and Responsibilities

In brief, the duties and responsibilities performed by the Audit Committee are as follows

² Recommending the appointment of external auditors of Raigam Wayamba

Salterns PLC for each financial year.

² Examine any non-audit work performed by the Auditors and the fees thereon to ensure that their objectivity and independence is not impaired.

² Reviewing the scope and result of the audit and its effectiveness.

² Discussing with the External Auditors before commencement of the audit and at the conclusion of the audit, in relation to audit plan, key audit issues and their resolution, management responses and recommending to the

Board and the remuneration of the auditors.

² Reviewing the extent of compliance with the laws of the country,

Governmental regulations, listing rules and established policies of the

Company.

² Ensuring that the company’s internal controls and risk management practices are adequate to meet the requirements of the Sri Lanka Auditing Standard, and are being duly performed.

² Reviewing and discussing the business risk management processes and procedures adopted by the Group to manage and mitigate the effects of such risks and measures taken to minimize the impact of such risks.

² Monitoring the policies and practices related to risk management.

² Ensuring proper standardized updated systems for financial reporting.

² Holding of meetings with the Head of Finance to ensure proper controls and segregation of duties to minimize risks.

² Reviewing Company’s quarterly unaudited and annual Audited Financial

Statements and making recommendations to the Board for their approval and release.

Meetings

The Audit Committee held four meetings during the year under review. The proceedings of the Audit Committee are regularly reported to the Board of Directors. The Chairman of the Audit Committee has been empowered to convene regular meetings with the Director Finance, sectional heads and Company’s external auditors, separately and periodically as deemed necessary. The Board reviews and updates the Committee Charter annually according to the changes in business operations of the organization. The minutes of the meetings and reports from the Audit Committee are submitted to the Board of Directors.

Appointment of External Auditors

The Audit Committee has recommended to the Board of Directors that Messrs. Ernst & Young continues as Auditors for the financial year ending 31 March 2020.

Conclusion

The Audit Committee is satisfied that the control environment adopted in the organization provides reasonable, but not absolute assurance that the financial position of the company is satisfactory and that systems are in place to minimize the impact of identifiable risks and that the Listing Rules of the Colombo Stock Exchange have been met.

T. Dharmarajah

Chairman - Audit Committee 23 August 2019