Corporate Governance

Enterprise Governance

Working on an integrated approach for applying governance throughout the organization, Melstacorp practices the key principle of infusing the tenet that everyone is responsible for the performance of the Group, the management of risk and value creation.

We strongly recommend and commit ourselves to ensuring that Enterprise Governance operates through people, processes, policy, procedure, culture and ethics.

The principles of governance are applied effectively by the Board of Directors and are seen in the consistent growth performance of the Group, while also improving the long term return to stakeholders.

Beyond the Board, the application of governance methodologies and the integration of governance into other organizational functions, we strongly believe that it has significantly benefited the long term performance of Melstacorp.

To further augment our effective governance strategies, we have implemented the following:

  • Strive to achieve corporate objectives of managing strategy, risk and compliance to ensure long term returns to stakeholders.
  • Oversee business objectives including management of IT, sustainability, finance and project portfolio management to ensure sustainable consistent results.
  • Board of Directors remain emphatic on due diligence to ensure accountability, transparency and sincerity of action.
  • Implemented an environment of responsible and balanced corporate governance that enhances integrity and respect for the Company and ensures the Company’s stewardship and stability in the industry and market.
  • Introduced a culture in which the entire organization takes ownership for risk, compliance and performance.

We infuse governance tenets that continue to hold us in high esteem and as a spearhead among our shareholders, stakeholders and peers. This is further augmented with our Board’s adherence to the highest standard of corporate behaviour and ethics at all times. To remain at the helm of Sri Lanka’s corporate landscape, we realize that we must incorporate new dimensions into our core decision-making processes and practice due diligence to protect the interests of our shareholders, while maintaining an unrelenting focus on the expectations of other stakeholder segments.

Melstacorp has a strong and sound foundation of sustainability principles that remain the overarching fundamentals in instituting and maintaining uncompromising governance practices and principles. The section of the report details the guidelines Melstacorp has adopted governance structure and the practices in ensuring that we remain within the parameters of the numerous regulatory and authorized bodies that govern the industry and the Company. We stringently adhere to and comply with the mandates of the Colombo Stock Exchange and Securities & Exchange Commission of Sri Lanka, NATA, Excise Department, Central Bank of Sri Lanka and the Government Treasury, Institute of Chartered Accountants of Sri Lanka, Telecommunication Regulatory Commission of Sri Lanka, Insurance Board of Sri Lanka, Central Environmental Authority, relevant Ministry and Departmental authorizations and regulations, and numerous Codes introduced by Professional Associations and the Chamber of Commerce from time to time.

Composition of the Board and Independence

The Board of Directors of Melstacorp comprises the Chairman two Executive Directors, two Non-Independent Non-Executive Directors and three Independent Non-Executive Directors.
The Board considers that three Non-Executive Directors are independent in accordance with the criteria detailed within the Listing Rules of the CSE and have submitted signed confirmations in this regard.

The Board constructed that N. de S. Deva Aditya who has served on the Board continuously for a period exceeding nine (9) years, is determined as an Independent Director after taking into consideration all the relevant circumstances, including the fact that he resides overseas and he is not directly or indirectly involved in the day-to-day management of the Company or any of its subsidiaries, and the Board believes the independence of N. de S. Deva Aditya is not compromised by virtue of him being a Director of Distilleries Company of Sri Lanka PLC, a subsidiary of the Company and a Director of Aitken Spence PLC, an Associate of the Company.

Board Committees

Certain responsibilities of the Board have been delegated to the following sub-committees;

Audit Committee

The Audit Committee comprises three independent Non-Executive Directors and one Non-Independent Non-Executive Director as follows;
Mr. R. Seevaratnam – Chairman
Dr. A. N. Balasuriya
Mr. N. de S. Deva Aditya
Mr. D. Hasitha S. Jayawardena

Remuneration Committee

The Remuneration Committee has two Independent Non- Executive Directors and one Non-Independent Non-Executive Director as follows;
Dr. A. N. Balasuriya - Chairman
Mr. N. de S. Deva Aditya
Mr. D. Hasitha S. Jayawardena

Related Party Transactions Review Committee

The Related Party Transactions Review Committee is responsible to the Board of Directors comprises of two Independent Non-Executive Directors and one Non-Independent Non-Executive Director follows;
R. Seevaratnam - Chairman
A. N. Balasuriya
D. Hasitha S. Jayawardena

Investor Relations

One of the prime fundamentals that are prevalent and identified with the Group’s sustained success and growth has been the close rapport in investor relations. Given that we are mandated to safeguard and create shareholder wealth and are duty bound to share all Company information with our shareholders at all times in order to nurture sustainable relationships with our stakeholders, we foster effective dialogue and engagement with the relevant stakeholders and the financial community.
We strongly believe that it is our strategic management responsibility to maintain an open line of communication with shareholders and address any concerns or issues that may require discussion or resolution. The designated investor relations officers regularly meet shareholders and fund managers to fuel these long term relationships, providing information and answering any queries.
Further, the Group possesses performance measurement tools to ensure that these objectives are met.
Apart from personal interaction with stakeholders, our quarterly financial statements and the Annual Report offer a comprehensive canvas of the Group’s performance, constituting the principal means of communication with shareholders.

Internal Controls

The Board instills and maintains a strong set of internal controls to safeguard shareholder wealth.

The responsibility of the Board has been clearly stated as one where it is in charge of the Group’s internal control systems and will regularly review if they are adequately safeguarding the Company and shareholder assets while supplying precise and timely information for informed decision making.

The responsibility of the Board covers financial, operational and compliance related activities and risk management.

The main companies in the Group have established internal audit divisions that are controlled by the annual internal audit plans approved by the respective Boards.

The Audit Committee reviews and monitors the activities and the findings of the internal audit divisions at regular intervals.

Going Concern

After an extensive review of the Group’s corporate plan, budgets, capital expenditure requirements and future cash flows, the Board has taken a decision to apply the Going Concern principle. Further, the Board is satisfied that the Group possesses the necessary funds for adequate liquidity and to sustain its operations for the foreseeable future.