DIPPED PRODUCTS PLC / ANNUAL REPORT 2008—2009

Corporate Governance
Major transactions
There have been no transactions during the year under review which fall within the definition of “Major Transactions” in terms of
the Companies Act.
Communication with shareholders
Shareholders are provided with quarterly Financial Statements and the Annual Report, which the company considers as its
principal communication with them and other stakeholders. These reports are also provided to the Colombo Stock Exchange.
Shareholders may bring up concerns they have, either with the Managing Director or the Group’s Secretarial Department as
appropriate.
Price sensitive information
Due care is exercised with respect to share price sensitive information.
Shareholder value and return
The Board constantly strives to enhance the shareholder value and provide a total return in excess of the market. It has been the
policy of the Board to distribute a reasonable dividend rate to the shareholders whilst allowing for capital requirements.
Accountability and Audit
Financial reporting
The Board places great emphasis on complete disclosure of financial and non-financial information within the bounds of
commercial reality, and on the adoption of sound reporting practices. Financial information is disclosed in accordance with the Sri
Lanka Accounting Standards. Revisions to existing accounting standards and adoption of new standards are carefully monitored.
The Annual Report includes descriptive, non-financial content through which an attempt is made to provide stakeholders with
information to assist them make more informed decisions.
The Statement of Directors’ Responsibilities for the Financial Statements is given on page 37 in this report.
Management Report
The Managing Director’s Review (pages 8 to 15) in this report provides an analysis of the Group’s performance during the
financial year.
The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks. This process has been
in place through the year under review. The potential risks, both internal as well as external, faced by the Company and actions
instituted for mitigating the same are reported in the Managing Director’s review.
Going concern
The Directors, after making necessary inquiries and reviews including reviews of the company budget for the ensuing year, capital
expenditure requirements, future prospects and risks, cash flows and borrowing facilities, have a reasonable expectation that the
Company has adequate resources to continue in operational existence for the foreseeable future. Therefore the going concern
basis has been adopted in the preparation of the Financial Statements.
Internal control
The Directors are responsible for the Group’s system of internal financial controls. The system is designed to safeguard assets
against unauthorised use or disposition and to ensure that accurate records are maintained and reliable financial information is
generated. However, there are limits to which any system can ensure that errors and irregularities are prevented or detected
within a reasonable period.
The important procedures in place to discharge this responsibility are as follows:
the Directors are responsible for the establishment and monitoring of financial controls appropriate for the operation
within the overall Group policies.
the Board reviews the strategies of the divisions and constituent companies.
annual budgeting and regular forecasting processes are in place and the Directors review performance.
the Board has established policies in areas of investment and treasury management and does not permit employment of
complex risk management mechanism.
the Group is subjected to regular internal audits and system reviews.
the Audit Committee reviews the plans and activities of the internal audits and the management letters of External Auditors.
the Group carefully selects and trains employees and provides appropriate channels of communication to foster a control
conscious environment.
34
D I P P E D P R O D U C T S P L C A N N U A L R E P O R T 2 0 0 8 – 2 0 0 9