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  Corporate Governance

One of the key facets of our social responsibility system is the corporate governance structure. Our system of corporate governance is based on transparency, equity and efficiency focusing on the need for consistent progress of the Company, and with a view to laying a solid foundation for management and oversight.

Although government intervention in the form of prescriptive legislation has not been forthcoming, the Company has endeavoured to build a corporate governance practice based on OECD guidelines, the Code of Best Practice on corporate governance by the Insititute of Chartered Accountants of Sri Lanka, and the combined code on Corporate Governance, UK.

The environment in which our Company has to operate today is increasingly international, complex and pressured. Under the circumstances SLT’s objective has been to put in place an effective system of checks and balances that govern the relationship between the shareholders and the Board of Directors on the one hand and the executive management and the Board of Directors on the other.

The Board
The Board of Directors consists of one Executive Director who is the CEO and nine Non-Executive Directors. The Board assumes responsibility for the stewardship of SLT and is fully accountable to the shareholders. The profiles of the Directors are given on page 4 and 5 of this Report. Board responsibilities are discharged directly or through the various committees. There have been eight regular meetings of the Board during 2003.

The Board procedures have been established to deal with matters which often have to be dealt with urgency, often between regular Board meetings. Telephone conference meetings are held in which as many Directors as possible could participate.

Matters reserved for the Board, a precedent to good governance is firmly laid down and closely followed by the Board. All Directors are subject to election by the shareholders at the first Annual General Meeting except CEO and the Chairman, after their appointment, and to re-election thereafter at intervals of no more than three years. The Directors receive accurate, timely and clear information. The Management provides such information and wherever necessary Directors seek clarification or amplification.

The positions of Chairman and CEO are separate providing for greater transparency in decision making. The CEO enjoys a clear remit and specific responsibilities. With a view to allowing flexibility, which is an important need considering the pressured environment the Company has to operate, the Board wherever necessary delegates authority to the CEO.

The Annual Business Plan which includes the capital expenditure budgets are approved by the Board in advance and reviewed periodically for necessary corrective action.The Board ensures the presentation of balanced and understandable assessment in all interim and other price sensitive and public reports to the regulators as well as information required to be presented in accordance with statutory requirements.

The Board has adopted systems to ensure checks and controls. It also ensures that the requisite technology, systems, procedures, and strategic planning are in place. Considerable care is taken to make sure that proper audit controls, both internal and external are in place and that these are controlled by persons who are independent and competent.

Corporate Management Team
The day-to-day operations are carried out by a Corporate Management Team headed by the Chief Executive Officer. While the Board frames the policy and strategic objectives, autonomy is extended to the Management Team which operates within the broad parameters in accordance with the highest professional standards.

Board Committees
The Remuneration Committee comprises of the Chairman and the CEO who decides on the remuneration of the Senior Management which is performance related.

Investor Relations
The Company maintains a healthy dialogue with major shareholders, analysts and brokers through regular meetings in order to develop an understanding of the views of the major shareholders about the Company.