Annual Report 2011 - Colombo Stock Exchange

10 Annual Report 2011Corporate GovernanceThe Board of Directors (“the Board”) is responsible for the governance of the Company whilst the Shareholders’ role ingovernance is to appoint the Directors and the Auditors and to satisfy themselves that an appropriate governance structureis in place.Compliance with Code of Best PracticeHaving given due consideration to the Code of Best Practice for Corporate Governance issued by the Institute of CharteredAccountants of Sri Lanka, the Board is pleased to note that several key areas of the code are already being complied with.Accordingly, the Board confirms that the following aspects of the Code are currently being complied with.Board of DirectorsThe Board, towards the end of the financial year 2011, comprised five non-executive directors. The names of the Directorsare set out on page 14 to this Annual Report. In terms of the Articles of Association, all Directors are required to be electedby Shareholders at the first Annual General Meeting after their appointment and furthermore one-third of the Directorsshall retire by rotation every year but are eligible for re-election at the Annual General Meeting. The Board has assessedthe independence of the directors against the criteria set out in the Corporate Governance Rules of the Colombo StockExchange and determined that two directors are independent as indicated below although one of whom has served on theboard for more than nine consecutive years:-Name of Director Executive Non-Executive IndependentAriel P Vera - √ -See Hock Lye Eddy - √ -Chong Kim Seng Paul - √ -Mahinda P. Haradasa - √ √Kaliappapillai Soundararajan - √ √Audit CommitteeThe Audit Committee comprises 3 non-executive directors, Mr. See Hock Lye Eddy (Chairman), Mr. Mahinda P. Haradasa andMr. Kaliappapillai Soundararajan. However, no Audit Committee meetings were held during the financial year under review asthere were no material transactions in view of the fact that the Company was inactive during the preceding as well as financialyear 2011.The Audit Committee shall act as an effective forum in assisting the Board of Director to discharge their responsibilities withregard to internal control, internal and external audits, addressing environmental and business risks, business ethics, statutoryrequirements compliance etc. In doing so, the Audit Committee is empowered to examine and review any activity in relationto the financial affairs of the Company. A firm of Chartered Accountants will be engaged to conduct Internal Audits periodicallyto supplement the process.The Audit Committee is satisfied with the independence of the external auditors and recommends their re-appointment forthe ensuing financial year.The Chairman of the Audit Committee has not presented a separate report as there have been no Audit Committee meetingsheld during the year.Remuneration CommitteeThe Remuneration Committee comprises 3 non-executive directors, Mr. See Hock Lye Eddy (Chairman), Mr. Mahinda P.Haradasa and Mr. Kaliappapillai Soundararajan. However, no Remuneration Committee meetings were held during thefinancial year under review in view of the fact that the Company has not appointed a Chief Executive Officer (“CEO”) orExecutive Director as it has been inactive during the preceding as well as financial year 2011. There was no remunerationpayable to any Director of the Company.The function of the Remuneration Committee is to recommend the remuneration payable to the Executive Director andCEO of the Company upon such appointment.