a. The Independence of Directors
For a Director to be considered independent, the Board must be satisfied that the Director does not have any direct or indirect material relationship with the Company. In determining the independence of Directors, the Board follows the requirement set out in the CSE Listing Rules on Corporate Governance as well as the Code of Best Practice on Corporate Governance issued by the ICASL. Consequent to the induction of SLT’s new shareholder GTH, the Company’s policies and procedures are being reviewed in order to adhere to best practices and achieve common objectives.
b. The Composition of the Board
In terms of the Articles of Association of the Company the Board of Directors consists of ten (10) seats. Any Director shall be selected by resolution passed by a simple majority of the votes cast at a general meeting by the holders of shares present in person or proxy.
According to the shareholding of major shareholders, GOSL is entitled to 05 seats in relation to its 49.50% equity holding and GTH to 04 seats in relation to its holding of 44.98% while 01 seat is reserved in respect of the minority shareholders who together hold 5.52% of equity.
Shareholders are thus responsible for the appointment of Directors to fill even casual vacancies. The Chairperson of the Board is a Director nominated by GOSL and is appointed as per the Articles of Association of the Company.
The NTT appointed nominee Director functioned as the CEO until the GTH takeover in April 2008.
In the absence of a CEO, the Chairperson together with the members of the Board managed the business with the support of the senior management and staff of SLT.
c. Core Duties of the Board
The Board provides strategic direction to the Company through the medium of the Annual Business Plan. The Annual Business Plan is reviewed by the Board quarterly or by mid-year. In consideration of the latest developments taking place in the business environment, technology and other key areas, the existing systems and processes are being reviewed. Proposals are implemented by the Board as per Corporate Governance rules and SEC guidelines.
d. Board Meetings and Attendance of Directors
During the year 2008, the Board convened 15 meetings. The chart appearing below illustrates details of attendance of each of the Directors.
| Name of Director |
No. of meetings
attended |
| Mrs. B.L.N. de Silva Chandrasena, Chairperson |
15 |
| Mr. P. Asoka W. de Silva (Resigned w.e.f. 22.02.08) |
3 |
| Mr. Shoji Takahashi, CEO (Resigned w.e.f. 04.04.08) |
7 |
| Mr. Shuhei Anan (Resigned w.e.f. 04.04.08) |
1 |
| Mr. S.N. Kumar (Resigned w.e.f. 26.11.08) |
12 |
| Mr. Sumith Wijesinghe |
15 |
| Mr. P.A. Abeysekara (Resgined w.e.f. 03.12.08) |
13 |
| Mr. Sidath Fernando (Appointed w.e.f. 04.03.08) |
8 |
| Mr. Sandip Das (Appointed w.e.f. 05.06.08) |
6 |
| Mr. Chan Chee Beng (Appointed w.e.f. 05.06.08) |
5 |
| Mr. Jeffrey Jay Blatt (Appointed w.e.f. 05.06.08) |
5 |
| Mr. Geoffrey William Shelley (Resigned w.e.f. 20.01.09) |
4 |
| Mr. Yoga Perera (Appointed w.e.f. 26.11.08) |
2 |
e. Appointment of Members and their Re-Election
In terms of the Articles of Association of the Company, the shareholders are entitled to appoint the Directors. The details of the duly appointed Board of Directors and any changes thereto are disclosed via the Directors' Report appearing in the Company’s Annual Report on page 64.
In conformity with the Company’s Articles of Association, members comprising a third of the Board of Directors, except the Chairman and the CEO, retire from office by rotation at every Annual General Meeting.
A retiring Director is eligible for re-appointment by
the shareholders.
f. The Accountability of the Board
The Board is responsible for directing the strategic objectives of the Company and overseeing the management of the business. Directors are charged with the task of promoting the success of the Company and making decisions in the best interest of the Company. The Annual Report and interim financial statements which are principal tools of communications with shareholders present the Company’s financial position and operating results in comprehensive detail, often far exceeding statutory and regulatory obligations. These reports and statements are published and circulated to shareholders within the duly stipulated time frames. The statutory accounts comply with the requirements of the Sri Lanka Accounting Standards, the requirements of the CSE and the Companies Act.
g. Role of the Company Secretary
The Company Secretary attends Board meetings, maintains minutes of all such meetings and the Board decisions resulting therefrom whilst liaising with the Directors on all matters in relation to the Board. The Company Secretary is expected to adhere to proper Board processes and is tasked with the timely preparation and dissemination of requisite material such as Agendas for Board Meetings in consultation with the Chairperson and Board Committees. The Board through the Company Secretary ensures that all regulatory requirements including those pertaining to capital markets, are complied with and disclosures made in a timely, understandable, full and fair manner. In consultation with the Chairperson, the Company Secretary advises the Board on corporate governance developments relating to the Company.
h. Board Committees and their Composition
The Board has two sub-committees; an Audit Committee and a Remuneration Committee. The Board also delegates its authority to other ad hoc committees as and when required.
Audit Committee
The Audit Committee is responsible for monitoring the integrity of financial statements of the Company. In addition to the review of financial information of the Company, the Audit Committee also oversees the relationship between the Company and the Auditor and reviews the Company’s financial reporting system, internal audit policy, internal control and risk management procedures. The Committee also leads the regularisation of processes where necessary, pursuant to recommendations from the external auditors.
The decisions of the Audit Committee are recommended to the Board for approval.
The Audit Committee comprises four Directors; two nominee Directors of the GOSL and two nominee Directors of GTH. The CFO and Internal Auditor regularly attend the Audit Committee meetings by invitation.
The Audit Committee consists of
Mr. Sidath Fernando - Chairman
Mr. Sandip Das - Member
Mr. Sumith Wijesinghe - Member
Mr. Chan Chee Beng - Member
Mr. Chan Che Beng is a Fellow of the Institute of Chartered Accountants in England and Wales.
The Audit Committee held 04 meetings in the year 2008.
| Name of Director |
No. of meetings attended |
| Mr. Sidath Fernando |
03 |
| Mr. Sandip Das |
03 |
| Mr. Sumith Wijesinghe |
03 |
| Mr. Chan Chee Beng |
03 |
Remuneration Committee
The Company has in place a remuneration policy which is formulated by the Remuneration Committee and approved by the Board. The Remuneration Committee comprises two independent non-executive Directors, to oversee the remuneration policy of the Company in respect of non-executive Directors as well as the remuneration policy and incentive schemes pertaining to the Company’s senior management. The decisions of the Remuneration Committee are recommended to the Directors for their approval.
The Remuneration Committee during the year in review comprised:
• Mr. Sidath Fernando
• Mr. Sandip Das |
