directors - Colombo Stock Exchange

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goVernance report e n t e r p r i s e g ov e r n a n C e Composition of the Audit Committee The Board of Directors appoints members to the Audit Committee. The present Committee consists of three Independent Non-Executive Directors and one Non-Executive Director. The Chairman of the Audit Committee is Mr. R. Seevaratnam, an experienced Chartered Accountant who is also the Senior Independent Director. The composition of the Audit Committee meets the requirements of the CSE Listing Rules. The composition of the Audit Committee is available in the table appearing on page 107. Mr. H.M.A. Jayesinghe, who has previously served on the Board and as the Chairman of the Audit Committee functions as an Independent Consultant to the Committee offering valuable insight. The Chairman/Managing Director/CEO, Deputy Chief Executive Officer and the Director-in-charge of the finance function attend Audit Committee meetings, unless otherwise determined by the Audit Committee. Any member of the Board may attend the Committee meetings by invitation. Committee meetings and the attendance of members is given in the table appearing on page 107. The report of the Audit Committee is available on page 121. D.4. Code of Business Conduct and Ethics Principle: Companies must adopt a Code of Business Conduct and Ethics for Directors and members of the senior management team and must promptly disclose any waivers of the Code for Directors or others. The Company has a Code of Ethics applicable to all employees of the Company. The areas covered in the Code of Ethics include proprietary information, conflict of interest, benefits from third parties, accurate books of account, usage of Company property for personal use, illegal acquisition of competitor information, insider trading, protection of environment and natural resources and gender equity. D.5. Corporate Governance Disclosures Principle: Directors should be required to disclose the extent to which the Company adheres to established principles and practices of good Corporate Governance. This report contains the extent to which established principals of good Corporate Governance has been adhered to and the requirements of Code of Best Practices on Corporate Governance issued by the SEC and ICASL has been complied with. The Company has implemented the regulations of the Section 7.10 of the Listing Rules of CSE on Corporate Governance. Mr. R. Seevaratnam, Dr. H. Cabral and Dr. U.P. Liyanage satisfy the criteria of an Independent Director as prescribed by the aforesaid section and have submitted the requisite declaration based on which the Board has determined that they are Independent Directors. 114 ANNUAL REPORT 2009/10 DIESEL & MOTOR ENGINEERING PLC SECTION 2: THE SHAREHOLDERS INSTITUTIONAL INVESTORS E.1. Shareholder Voting Principle: Institutional shareholders have a responsibility to make considered use of their votes and should be encouraged to ensure their voting intentions are translated into practice. The Annual General Meeting provides a forum for shareholders to raise any queries. The Chairmen of the Audit, Remuneration and Nomination Committees are usually present at the Annual General Meeting. All Directors were present at the last AGM of the Company. The Chairman ensures that any views expressed by investors to him personally or at General Meetings are discussed with the Board. The Directors consider it important to understand the views of shareholders and, in particular, any issues which concern them. The shareholders are encouraged to participate at General Meetings and cast their votes. E.2. Evaluation of Governance Disclosures Principle: When evaluating Companies’ governance arrangements, particularly those relating to Board structure and composition, institutional investors should be encouraged to give due weight to all relevant factors drawn to their attention. The Annual Report contains an Enterprise Governance Report that covers the Company’s Governance arrangements. The Annual Report provides a comprehensive review of the Company’s performance and prospects. This is supplemented by quarterly reports and other circulars, where necessary. Economic Performance 70 Environmental Performance 74 Social Performance 84 Standard Disclosure G3 Index & Report Application Level 94
DIESEL & MOTOR ENGINEERING PLC ANNUAL REPORT 2009/10 OTHER INVESTORS F.1. Investing/Divesting Decision Principle: Individual shareholders, investing directly in shares of companies should be encouraged to carry out adequate analysis or seek independent advice in investing or divesting decisions. Corporate Governance Compliance Table The Company’s communications with the shareholders, including the Annual Report provides information that enables shareholders to make informed judgments or to seek advice on their investment decisions. The extensive nature of the information given would facilitate the shareholders in carrying out adequate analysis when making their decisions. F.2. Shareholder Voting CSE Listing Rule No. Subject Applicable Requirement Compliance Status 7.10.1 Non-Executive Directors At least two or one third of the Directors, whichever is higher, should be Non- Executive Directors 7.10.2 (a) Independent Directors Two or one-third of Non-Executive Directors, whichever is higher should be independent. 7.10.2 (b) Independent Directors Each Non-Executive Directors should submit a declaration of independence/ non-independence. 7.10.3 (a) Disclosures relating to Directors 7.10.3 (b) Independent Directors The Board shall make a determination annually as to the independent or compliant non-independence of each Non-Executive Director. 7.10.3 (c) Disclosures relating to Directors 7.10.3 (d) Appointment of new Directors 7.10.5 Remuneration Committee 7.10.5 (a) Composition Remuneration Committee 7.10.5 (b) Function of Remunerations Committee 7.10.5 (c) Disclosure in the Annual Report relating to Remuneration Committee Principle: Individual shareholder should be encouraged to participate in General Meetings of companies and exercise their voting rights. The shareholders are encouraged to participate at General Meetings and cast their votes. Instructions with regard to appointing a proxy and the manner in which a Proxy Form should be completed are available in the proxy form circulated with the Annual Report. Details Names of independent Directors should be disclosed in the Annual Report. Compliant Please refer page 14 A brief resumé of each Director should be included in the Annual Report including the area of Expertise. Provide brief resumé of any new Director appointed to the Board. N/A N/A Compliant Four out of Eleven Directors are Non-Executive Directors. Compliant Three of the Four Non-Executive Directors are independent. Compliant Non-Executive Directors have submitted the declaration in the prescribed format. Compliant The Board has carried out the determination as stated in the enterprise governance report. Please refer page 109. (Board independence) Compliant Please refer page 14 A listed company shall have a Remuneration Committee. Compliant Name of members of the Remuneration Committee is available on page 107. Shall comprise Non-Executive Directors, a majority of whom shall be independent. The Remuneration Committee shall recommend the remuneration of the Chief Executive Officer and the Executive Directors. The Annual Report should set out; Compliant Remuneration Committee consists of four Non-Executive Directors of which three are independent. Chairman of Remuneration Committee is a Non-Executive Independent Director. Compliant Please refer the Remuneration Committee Report on page 122. a. Names of Directors comprising the Remuneration Committee. Compliant Please refer on page 107 b. Statement of Remuneration Policy Compliant Please refer the Remuneration Committee report on page 122 For a brief statement of policy. c. Aggregate Remuneration paid to Executive and Non-Executive Directors. Compliant Please refer on page 149 7.10.6 Audit Committee A listed company shall have an Audit Committee. Compliant Names of the members of the Audit Committee are available on page 107. 7.10.6 (a) Composition of Audit Committee 7.10.6 (b) Function of Audit Committee 7.10.6 (c) Disclosure in the Annual Report relating to Audit Committee Shall comprise Non-Executive Directors, a majority of whom can be independent. Chief Executive Officer and the Chief Financial Officer should attend Audit Committee meetings. The Chairman of the Audit Committee or one member should be a member of a professional accounting body. Compliant Audit Committee consists of four Non-Executive Directors of which three are independent. Chairman of Audit Committee is a Non-Executive Independent Director. Compliant Chief Executive Officer and Chief Financial Officer attend by invitation. Compliant Chairman of Audit Committee is a member of a professional accounting body. Should be a outlined in the Section 7.10 of the Listing Rules. Compliant The terms of reference of the Audit Committee adopted by the Board on 20th June 2007 cover the areas outlined. a. Names of Directors comprising the Audit Committee Compliant Please refer on pages 107 b. The Audit Committee shall make a determination of the independence of the Auditors and disclose the basis for such determination. c. The Annual Report shall contain a report of the Audit Committee setting out the manner of compliance of functions. e n t e r p r i s e g ov e r n a n C e goVernance report Compliant Please refer Audit Committee report on pages 121 Compliant Please refer Audit Committee report on pages 121 Independent Assurance Statement 100 Enterprise Governance 104 Chairman & CEO’s and CFO’s Responsibility Statement 116 Enterprise Risk Management 117 115
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Annual Report 2009/10 DIESEL & MOTO
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Vision To be the leader in all the
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Contents Overview Financial Highlig
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oVerView operational hIGhLIGhTS Har
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oVerView CHairMan & Ceo’s REvIEW
Page 12 and 13: oVerView 12 C H a i r M a n & Ceo
Page 14 and 15: Overview Board of DIRECTORS ANNUAL
Page 16 and 17: Overview Group ManaGeMent COMMITTEE
Page 18 and 19: ManageMent report Business PERFORMA
Page 22 and 23: ManageMent report The performance o
Page 24 and 25: ManageMent report Tata Commercial V
Page 28 and 29: ManageMent report We continue to ex
Page 32 and 33: ManageMent report A Year of Importa
Page 36 and 37: ManageMent report Performance Dimo
Page 40 and 41: ManageMent report The Business unit
Page 42 and 43: ManageMent report The division has
Page 44 and 45: ManageMent report FinanCial REvIEW
Page 46 and 47: ManageMent report Finance Expenses*
Page 48 and 49: ManageMent report Working Capital T
Page 50 and 51: ManageMent report Segment Performan
Page 52 and 53: goVernance report enterprise GOvERN
Page 54 and 55: goVernance report SECTION 1: THE CO
Page 56 and 57: goVernance report The Company Secre
Page 58 and 59: goVernance report The Committee con
Page 60 and 61: goVernance report RELATIONS WITH SH
Page 64 and 65: goVernance report CHairMan & Ceo’
Page 66 and 67: goVernance report Risk Management A
Page 68 and 69: goVernance report Industry Trends D
Page 70 and 71: goVernance report tHe reMuneration
Page 72 and 73: goVernance report group STRUCTURE 1
Page 74 and 75: FINANCIAL CALENDAR Interim Financia
Page 76 and 77: annual RepoRt oF the boaRd oF diRec
Page 78 and 79: annual RepoRt oF the boaRd oF diRec
Page 80 and 81: statement oF diRectoRs’ RespoNsIb
Page 82 and 83: income stAteMeNts 136 Consolidated
Page 84 and 85: statements oF ChANGes IN eqUIty 138
Page 86 and 87: cash Flow statements Reconciliation
Page 88 and 89: notes to the Financial statements 3
Page 90 and 91: notes to the Financial statements T
Page 92 and 93: notes to the Financial statements A
Page 100 and 101: notes to the Financial statements N
Page 102 and 103: notes to the Financial statements T
Page 108 and 109: notes to the Financial statements F
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Share INFORMATION 1. Stock Exchange
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S h a r e I n f o r m aT I o n 9. T
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neTwork of BRANCHES, WORKSHOPS & SH
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h I STo r I c a l n oT e The key at
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k eY p r I n c I pa l S Principals
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co u n T rY r e p o rT Sectoral Com
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co u n T rY r e p o rT Expectation
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GloSSarY of FINANCIAL TERMS Account
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corporaTe INFORMATION Name of the C
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The creative approach we adopted fo
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f o r m o f p rox Y Instructions as
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