Ceylinco Life Insurance Limited
INTEGRATED ANNUAL REPORT 2016

STEWARDSHIP

Corporate Governance

Corporate governance is the structure and relationships among various participants that determine the strategic direction and the performance of the Company. It sets up the relationship with the shareholders and more broadly with the society. Good governance encourages the companies to be responsible, accountable, transparent and fair not only to its shareholders but also to all the stakeholders.

Corporate Governance Model of Ceylinco Life Insurance Limited (CLIL) depicts the framework used by the Board of Directors to discharge its leadership with prudent and effective controls, enabling the risk of the Company to be assessed and managed.


Key initiatives taken during the year 2016

  • Forming the Related Party Transaction Review Committee
  • Forming the Nomination Committee of the Company
  • Compiling a comprehensive Risk Register for the Company with the assistance of Ernst & Young Advisory Services
  • Implementation of CAMMS Risk Manager system for identifying, recording, analysing and monitoring the risks of the Company.
  • The Board of Directors

    The Board of Directors is the highest and central governance body of CLIL. It is considered at CLIL that, the relationship between Board of Directors and other primary participants, mainly shareholders and the management, is critical. The way the Company is governed certainly have implications on all other stakeholders such as employees, customers, suppliers and creditors. Legal, regulatory, institutional and ethical environment in turn impact the governance framework and Board of Directors has taken due cognisance of such requirements.

    The Board of Directors acts as the custodians of the Company’s Vision, Purpose and Values. They carry the burden of directing the Company to its desired goals by making an accurate assessment of the Company’s position, taking strategic decisions, holding regular meetings of the Board and Board Sub-Committees, ensuring good governance and overseeing the risk management of the Company.

    Composition of the Board

    The Board of Directors of CLIL comprises 15 members of whom 5 are Executive Directors and 10 are Non-Executive Directors.

    The composition of Board of Directors as at 31 December 2016 was as follows –

      Name of Director Executive/Non-Executive Independent/Non-Independent
    1. R Renganathan Executive Director Non-Independent
    2. E T L Ranasinghe Executive Director Non-Independent
    3. P D M Cooray Executive Director Non-Independent
    4. Palitha Jayawardena Executive Director Non-Independent
    5. Ranga Abeynayake Executive Director Non-Independent
    6. J Godwin Perera Non-Executive Director Non-Independent
    7. D H J Gunawardena Non-Executive Director Non-Independent
    8. Gen. C S Weerasooriya (Retired) Non-Executive Director Non-Independent
    9. R S W Senanayake Non-Executive Director Non-Independent
    10. J A Setukavalar Non-Executive Director Independent
    11. Prof. Mohan de Silva Non-Executive Director Independent
    12. Dr. B G S de Silva Non-Executive Director Independent
    13. J Wickramasinghe Non-Executive Director Independent
    14. Sugath Caldera Non-Executive Director Independent
    15. Ms. A K Seneviratne Non-Executive Director Independent

    Brief profiles of the Board of Directors are given on pages 22 to 24.

    Composition as to the age and the gender of the Board of Directors are given below:



    Role of the Non-Executive Directors

    The Non-Executive Directors provide considerable depth of knowledge collectively gained from their experience whilst serving in a variety of public and private companies in various industries.

    Submission of Independence Declaration

    As per the criteria set out in the Code of Best Practice on Corporate Governance issued jointly by the Securities and Exchange Commission of Sri Lanka (SEC) and the CA Sri Lanka and based on the declarations submitted by the Non-Executive Directors, the Board has determined that Six out of Fifteen are ‘Independent’ Directors.

    The Board considers that the composition and expertise of the Board is sufficient to meet the present needs of the Group, but will continue to review the composition and the mix of skills and expertise on an ongoing basis to align it to the business needs and complexity of the Company’s operations.

    Financial Acumen of the Board

    The Board includes six professionally qualified Accountants, four of whom are fellow Chartered Accountants and two are CIMA qualified Accountants. They provide the Board with the requisite financial acumen and knowledge on financial matters.

    Chairman and Managing Director

    The Chairman of the Company is a Non-Executive Director who provides leadership to the Board, for the efficient organisation and conduct of the Board’s function and to ensure the integrity and effectiveness of the relationship between the Non-Executive and Executive Directors. The Managing Director/CEO implements policies and strategies approved by the Board and develops and recommends to the Board the business plans and budgets that support the Group’s long term strategy and vision that would lead to the maximisation of shareholder value.

    The functions of the Chairman and the Managing Director are separate with a clear distinction drawn between responsibilities, which ensures balance of power and authority. Mr J Godwin Perera serves as the Chairman and Mr R Renganathan serves as the Managing Director/CEO. Brief Profiles are given on pages 22 to 24.

    Tenure, Retirement and Re-election of Directors

    In accordance with the Company’s Articles of Association, one-third of the Directors (excluding the Managing Director and the Executive Directors) are subject to retirement and reappointment by rotation at every Annual General Meeting (AGM). The Directors who retire by rotation are those who have been longest in office since their appointment/reappointment. The Directors retiring by rotation and eligible for re-election this year are mentioned in the Notice of the AGM on page 297.

    In terms of Section 210 of the Companies Act No. 07 of 2007, Directors reaching the age of 70 years are recommended for re-election by way of an ordinary resolution by the shareholder. The details of the said Directors who are subject to re-election at the forthcoming AGM, are given in the Notice of the AGM on page 297.

    Board Meetings

    The Board meets once in two months, and wherever necessary Special Meetings of the Board are held. The Board meetings for each year are scheduled in advance to enable the Directors and management to plan accordingly and fit the year’s Board meetings into their respective calendars. The Board’s annual meeting calendar (including Board meetings and Board Sub-Committee meetings) is prepared with the consensus of all Directors and is tabled at the Board meeting in the last Board meeting for the year or in the first meeting in the year. To ensure that Board meetings are conducted effectively and efficiently, the time allocation for each agenda item is determined in advance. Members of the management and external advisors are invited as and when required to attend Board meetings to present proposals and provide further clarity to the Board. During the year ended 31 December 2016, Six (06) meetings of the Board were held.

    The attendance of the Directors at the Board Meetings were as follows:

    No. Name of the Directors No. of Meetings Attendance
    1. R Renganathan 6 6/6
    2. E T L Ranasinghe 6 6/6
    3. P D M Cooray 6 5/6
    4. Palitha Jayawardena 6 6/6
    5. Ranga Abeynayake 6 4/6
    6. J Godwin Perera 6 6/6
    7. D H J Gunawardena 6 6/6
    8. Gen. C S Weerasooriya (Retired) 6 6/6
    9. R S W Senanayake 6 6/6
    10. J A Setukavalar 6 6/6
    11. Prof. Mohan de Silva 6 3/6
    12. Dr. B G S de Silva 6 5/6
    13. J Wickramasinghe 6 6/6
    14. Sugath Caldera 6 5/6
    15. Ms. A K Seneviratne 6 3/6

    The attendance of the Directors at the Sub-Committee Meetings were as follows:

    No. Board Sub-Committees Members No. of Meetings Attendance
    1. Remuneration Committee Prof. Mohan de Silva (Chairman) Independent Non-Executive Director 1 1/1
      D H J Gunawardena Non-Executive Director 1 1/1
      R S W Senanayake Non-Executive Director 1 1/1
    2. Audit Committee J A Setukavalar (Chairman) Independent Non-Executive Director 4 4/4
        D H J Gunawardena Non-Executive Director 4 4/4
        J Wickramasinghe Independent Non-Executive Director 4 4/4
    3. Nomination Committee Dr. B G S de Silva (Chairman) Independent Non-Executive Director 1 1/1
      J Wickramasinghe Independent Non-Executive Director 1 1/1
      R Renganathan Executive Director – MD/CEO 1 1/1
    4. Related Party Transaction Review Committee D H J Gunawardena (Chairman) Non-Executive Director 4 4/4
      R S W Senanayake Non-Executive Director 4 4/4
      Palitha Jayawardena Executive Director – CFO 4 4/4
    5. Risk Committee Ms. A K Seneviratne (Chairperson) Independent Non-Executive Director 4 4/4
        J Wickramasinghe Independent Non-Executive Director 4 3/4
        R S W Senanayake Non-Executive Director 4 4/4

    Access to Information

    To enable the Board to make informed decisions, the Board is supplied with complete and adequate information in advance of each meeting, which includes an agenda, minutes, Board papers with background or explanatory information, financial and operational performance reports. The Board also receives regular review reports and presentations on business development, risk profiles and regulatory updates. Any additional information may be requested by any Director as and when required.

    The Board has separate and independent access to the Group’s Senior Management. All Directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures and applicable rules and regulations are complied with. The Directors, especially Non-Executive Directors, have access to independent professional advice in the course of fulfilling their responsibilities, at the Company’s expense.

    Further, Board Papers, Minutes, Reports and other documents to be tabled at Board meetings are sent to members of the Board well in advance, giving adequate time for Directors to study the said documents and prepare for a meaningful discussion at respective Board meetings. Also, when the Board finds that the information provided is insufficient or not clear, they call for additional information.

    The minutes, agenda and other Board papers are circulated among the members of the Board one week before the scheduled date of the meeting.

    Internal Control

    The Board of Directors recognises and acknowledges its responsibility for the Company’s system of internal control and for reviewing its effectiveness on a continuous basis. The Board discharged its advisory and supervisory duties through the Board Sub-Committees such as the Audit Committee, Remuneration Committee, Nomination Committee, Related Party Transactions Review Committee (RPTR) and Risk Committee.

    The internal control systems manage the risk of the Company’s business activities/operations and other affairs and ensure that the financial information based on which business decisions are made and published, is reliable.

    PROFESSIONAL DEVELOPMENT AND PERFORMANCE EVALUATION

    The Nomination and Remuneration Committees are responsible for evaluating the Board’s performance and decides how the Board’s performance may be evaluated and also proposes the objective criteria.

    The extent of compliance with the requirements in the Code of Best Practice on Corporate Governance issued jointly by CA Sri Lanka and the Securities and Exchange Commission of Sri Lanka is given below:

    Section The Company
    Section 01  
    A A.1 Directors The Board
    Principle A.1 Every public company should be headed by an effective Board. The top most policy making body of CLIL is its Board of Directors. The Board of Directors are the custodian of the Company’s vision, purpose and values. They are responsible to the shareholder, regulatory and statutory bodies and all other stakeholders of the Company, to ensure that the Company is growing sustainable while establishing a strong Corporate Governance Framework, in order to ensure transparency and confidence.
        Composition of the BoardThe CLIL’s Board of Directors comprises 15 members of whom five are Executive Directors and 10 are Non-Executive Directors. Brief profiles of the members of the Board of Directors are given on pages 22 to 24. All 15 Directors bring a strong and in-depth mix of knowledge, business skills and experience to the Board. Composition as to age and gender of the Board of Directors are given on page 134.
        Board AppointmentsCLIL recognises the importance of having a Board equipped with the skills and experience necessary for the proper discharge of its responsibilities in order to ensure the continued effective oversight of the Company’s operations as well as for effective and timely decision-making. Thereby the Company maintains proper and transparent procedure for new Board appointments as per the Articles of Association of the Company and applicable laws and regulations.

    The Company always takes in to consideration the professional qualifications, business experience and personal qualities which require to govern amidst a highly dynamic operating environment.
    A.1.1 The Board should meet regularly. The Board of Directors of CLIL met six times during the year to discharge their duties, responsibilities towards the Company. Attendance of the Directors are given on pages 135 and 136.
    A.1.2 The Board’s role is to provide entrepreneurial leadership of the Company within a framework of prudent and effective controls which enables risk to be assessed and managed. Corporate Governance Model of CLIL depicts (page 133) the framework used by the Board to discharges its entrepreneur leadership with prudent and effective controls enabling the risk of the Company to be assessed and managed.
      The formulation and implementation of a sound business strategy; The Board of Directors contributes to the Company by providing strategic direction to the management to develop short, medium and long term corporate business strategies besides reviewing and providing necessary guidance on corporate governance, statutory compliance, assisting internal audit and integrated risk management and also approving and reviewing major and substantial investments, which ensures the sustainable development of the Company.
      The Chief Executive Officer (CEO) and the management team possess the skills, experience and knowledge to implement the strategy; The Board has taken into consideration, the necessity of having and maintaining a mix of skills and professional experience, as appropriate to the Company's strategy. Strategic Business Planning Committee (SBPC) of CLIL which consists of the highest ranked corporate managers oversee the strategic planning process of the Company.
      The adoption of an effective CEO and Key Management Personnel succession strategy; Managing Director/CEO of the Company who has over 30 years of experience in the Insurance Industry acts as the CEO and the Deputy CEO follows him. KMP succession is considered vital in the Company. The Company conducted a leadership training and assessment for the senior management as part of the Company’s succession planning agenda during the year under review. For more details refer page 19 of Review of the Managing Director/CEO.
      The effective systems to secure integrity of information, internal control, business continuity and risk management; The Board of Directors recognises and acknowledges its responsibility for the Company’s system of internal control and for reviewing its effectiveness on a continuous basis. The Board discharged its advisory and supervisory duties through the Board Sub-Committees such as the Audit Committee, Remuneration Committee, Risk Committee. Nomination Committee and RPTR Committee. Refer ‘The Board’s Statement on Internal Control’ on page 180.

    The internal control systems manage the risk of the Company’s business activities/operations and other affairs and ensures that the financial information, based on which business decisions are made and published, is reliable.
      The compliance with laws, regulations and ethical standards; The Audit Committee reviewed the legal and regulatory compliance on a quarterly basis with the compliance report, prepared and submitted by the Senior Manager – Internal Audit.
      The all stakeholder interests are considered in corporate decisions; Also the Committee reviewed the accounting policies in line with the new developments in the industry and with the changes in the business and regulatory environment.

    The CFO/Director Finance submitted the Compliance Report at each Board Meeting for the information of the Directors.

    SBP Committee brings all the stakeholder concerns to the overview of the Executive Directors who thereby inform the Board to consider all the stakeholder interests at corporate decisions.
      Sustainable business development in Corporate Strategy, decisions and activities; The Company declared the Company’s theme for 2016 as ‘Go Green’ and all the strategies and objectives are molded in to the sustainable development.
      The Company’s values and standards are set with emphasis on adopting appropriate accounting policies and fostering compliance with financial regulations. The Board is fully satisfied with the integrity and accuracy of financial information published and effectiveness of the financial controls and systems of risk management of the Company. Refer the Board’s Statement on Internal Control on page 180.
      Fulfiling Board functions that are vital, given the scale, nature and complexity of the business concerned. The Board fulfils functions that are vital and complex, given the nature of the Life Insurance Business with the assistance of the Company Secretary.
    A.1.3 The Board collectively and Directors individually, must act in accordance with the laws of the country. Members of the Board collectively and the Directors individually, act in accordance with the laws of the country, as applicable and the Board obtains professional advice from external independent parties at the expense of the Company.

    During the year under review, the Company sought advice on various matters regarding actuarial valuation, marketing, legal, tax and accounting aspects etc. The Company obtained professional expertises of Ernst & Young, External Auditors to improve the Risk Registry for each and every department.
    A.1.4 All Directors should have access to the advice and services of the Company Secretary. Every member of the Board has the access to advice and services of the Company Secretary for matters relating to Board procedures and any clarification on applicable rules and regulations. The Board was provided with all necessary and timely information by way of Board papers and reports, in order to exercise decision-making responsibilities in a more efficient and effective manner.
    A.1.5 All Directors should bring independent judgement to bear on issues of strategy, performance, resources. The Board of Directors promotes an environment, whereby challenging contributions and Non-Executive and Independent Non-Executive Directors are encouraged and welcomed with their independent analysis and opinion based on professional knowledge and experience.
         
    A.1.6 Every Director should dedicate adequate time and effort to matters of the Board and the Company. The Board met once in every two months to discharge its duties, subsequent to the receipt of the License from IBSL and in addition to attending the Board meetings, Directors contribute by attending Audit Committee, Remuneration Committee, Risk Committee, Nomination Committee and RPTR Committee meetings. Refer ‘The Board’s Statement on Internal Control’ on page 180.

    The Board has appointed the said Sub-Committees to assist in the discharge of their collective duties and the delegation of authority to provide effective operation. Details of the members of the said Committees, Board meetings, Sub-Committee meetings and attendance are given on page 136.
    A.1.7 Every Director should receive appropriate training when first appointed to the Board of a company, and subsequently as necessary. The Company believes that training is an investment in people. All Executive Directors including the Managing Director/CEO went through an extensive training program during the year under review. More details are given on page 19 under the Review of the Managing Director/CEO.
    A.2 Chairman and Chief Executive Officer  
    Principle A.2 There are two key tasks at the top of every public company – conducting of the business of the Board and facilitating executive responsibility for management of the Company’s business. There should be a clear division of responsibilities at the head of the Company, which will ensure a balance of power and authority, such that no one individual has unfettered powers of decision. The Company maintains a clear division of authority in managing the Board and in executing the executive responsibilities by offering the Chairman and the Managing Director/CEO positions to two individuals.
    A.2.1 Chairman and CEO in one person The Chairman of the Board is a Non-Executive Director, who is responsible for providing leadership to the Board.

    The Managing Director/CEO is responsible for the operations of the Company’s business, including implementation of strategies approved by the Board, developing and recommending corporate strategies to the Board, developing the business plans, budget proposals etc... Managing Director/CEO is accountable to the Board of Directors.
    A.3 Chairman's Role  
    Principle A.3 The Chairman should preserve order and facilitate the effective discharge of Board functions. The Non-Executive Chairman of the Board ensures that proper order and effective discharge of Board functions are carried out at all times by the Board members.
         
    A.3.1 The Chairman should conduct Board proceedings in a proper manner and ensure, inter-alia, that: Chairman's responsibilities are conducted in the most professional manner as per the rules and guidelines available. He provides leadership to the Board and ensures that all the Directors contribute to the decision-making process. Further he maintains the balance of power among Executive and Non-Executive Directors. His responsibilities includes:
    • chairing the Board and Shareholder meetings
    • ensuring all and relevant issues are discussed
    • taking appropriate steps to maintain effective communication with the shareholder
    • ensuring good corporate governance practices are practiced.
      The effective participation of both Executive and Non-Executive Directors is secured;
      All Directors are encouraged to make an effective contribution, within their respective capabilities, for the benefit of the Company;
      A balance of power between Executive and Non-Executive Directors is maintained;
      The views of Directors on issues under consideration are ascertained; and
      The Board is in complete control of the Company’s affairs and alert to its obligations to all shareholders and other stakeholders.
    A.4 Financial Acumen
    Principle A.4 The Board should ensure the availability within it of those with sufficient financial acumen and knowledge to offer guidance on matters of finance. The Board comprises 4 (four) senior Chartered Accountants including the Managing Director/CEO himself and 2 (two) Chartered Management Accountants, who provide guidance on financial matters. The Board also comprises a qualified Actuary.
    A.5 Board Balance
    Principle A.5 It is preferable for the Board to have a balance of Executive and Non-Executive Directors such that no individual or small group of individuals can dominate the Board’s decision-taking. The CLIL’s Board of Directors comprises 15 members of whom five are Executive Directors and 10 are Non-Executive Directors. Brief profiles of the members of the Board of Directors are given in page 22 to 24. This ensures that the views of Non-Executive Directors carry a significant weight in the decisions made by the Board.
    A.5.1 The Board should include Non-Executive Directors of sufficient calibre and number for their views to carry significant weight in the Board’s decisions. The Board comprises of 10 Non-Executive Directors who brings mix of experience to the Board. Brief profiles of the members of the Board of Directors are given on page 22 to 24.

    This ensures that the views of Non-Executive Directors carry a significant weight in the decisions made by the Board.
    A.5.2 Two or one-third of Non-Executive Directors appointed to the Board of Directors whichever is higher should be ‘Independent’. Out of the ten Non-Executives, Six are Independent Directors.
    A.5.3 For a Director to be deemed ‘Independent’ such Director should be independent of management and free of any business or other relationship. All Independent Non-Executive Directors are independent of management and free of any business or other interest that could materially interfere with or could reasonably be perceived to materially interfere with the exercise of their unfettered and independent judgement.
         
    A.5.4 Non-Executive Director should submit a signed and dated declaration annually of his/her independence or Non-Independence. Each Non-Executive Director submits a signed declaration of Independence/Non-Independence, against specified criteria.
    A.5.5 The Board should make a determination annually as to the independence or Non-Independence of each Non-Executive Director based on such a declaration made of decided criteria and other information available to the Board. Not applicable.
    A.5.6 If an alternate Director is appointed by a Non-Executive Director such alternate Director should not be an executive of the Company. An Alternate Director has been appointed by an Independent Non-Executive Director and the person so appointed satisfies the criteria of independence and the appointment of Alternate Director is in compliance with the provision on minimum number of Independent Directors.
    A.5.7 Executive Directors to be the ‘Senior Independent Director’ (SID) and disclose this appointment in the Annual Report. As the positions of Chairman and CEO are separated, the need to appoint a Senior Independent Director has not arisen.
    A.5.8 The Senior Independent Director should make himself available for confidential discussions with other Directors who may have concerns which they believe have not been properly considered by the Board as a whole and which pertain to significant issues that are detrimental to the Company. Not applicable.
    A.5.9 The Chairman should hold meetings with the Non-Executive Directors only, without the Executive Directors being present, as necessary and at least once each year. If a need arises, Non-Executive Directors shall meet without the presence of the Executive Directors.
    A.5.10 Where Directors have concerns about the matters of the Company which cannot be unanimously resolved, they should ensure their concerns are recorded in the Board minutes. The Company has made provisions to record in the minute book, any issue that could not be unanimously resolved.
    A.6 Supply of Information
    Principle A.6 The Board should be provided with timely information in a form and of a quality appropriate to enable it to discharge its duties. Board is provided with timely information as to the below mentioned method enabling them to discharge their duties.
    A.6.1 Management has an obligation to provide the Board with appropriate and timely information, but information volunteered by management may not be enough in all circumstances and Directors should make further inquiries where necessary. Board papers, minutes, reports and other documents to be tabled at Board meetings are sent to members of the Board well in advance, giving adequate time for Directors to study the said documents and prepare for a meaningful discussion at respective Board meetings. Also, when the Board finds that the information provided is insufficient or not clear, they call for additional information.
    A.6.2 The minutes, agenda and papers required for a Board meeting should ordinarily be provided to Directors at least seven (7) days before the meeting, to facilitate its effective conduct. The minutes, agenda and other Board papers are circulated within the Board of Directors one week before the meeting to be held.
         
    A.7 Appointments to the Board
    Principle A.7 There should be a formal and transparent procedure for the appointment of new Directors to the Board.  
    A.7.1 A Nomination Committee should be established to make recommendations to the Board on all new Board appointments. The Nomination Committee of CLIL authorised to make recommendations to the Board on all new Board appointments if any arises. Details on the Nomination Committee is given on page 165 for the year 2016 there were no new appointments.
    A.7.2 The Nomination Committee should assess Board compositions to ascertain whether the combined knowledge and experience of the Board matches the strategic demands facing the Company. The Nomination Committee met once for the year 2016 and assessed the Board composition to ascertain whether the combined knowledge and experience of the Board matches the strategic demands facing the Company. Details are given in the Nomination Committee Report on page 165.
    A.7.3 Upon the appointment of a new Director to the Board, the Company should forthwith disclose to shareholders:
    • a brief résume of the Director;
    • the nature of his expertise in relevant functional areas;
    • the names of companies in which the Director holds Directorships or memberships in Board Committees; and
    • whether such Director can be considered ‘Independent’.
    Not applicable as no new Directors were appointed.
    A.8 Re-election
    Principle A.8 All Directors should be required to submit themselves for re-election at regular intervals and at least once in every three years.  
    A.8.1 Non-Executive Directors should be appointed for specified terms subject to re-election and to the provisions in the Companies Act relating to the removal of a Director, and their reappointment should not be automatic. As per the Company’s Articles of Association, Non-Executive Directors are subject to retirement by rotation.
    A.8.2 All Directors including the Chairman of the Board, should be subject to election by shareholders at the first opportunity after their appointment and to re-elect thereafter at intervals of no more than three years. All Directors including the Chairman of the Board was re-elected by the shareholder at the last AGM held on 30 March 2016.
    In terms of Section 210 of the Companies Act No. 07 of 2007, Directors reaching the age of 70 years are recommended for re-election by way of an ordinary resolution by the shareholder. The details of the said Directors who are subject to re-election at the forthcoming AGM, are given in the Notice of the AGM on page 297.
         
    A.9 Appraisal of Board Performance
    Principle A.9 Boards should periodically appraise their own performance in order to ensure that Board responsibilities are satisfactorily discharged.  
    A.9.1 The Board should annually appraise itself on its performance in the discharge of its key responsibilities. Although there is no formal procedure, Board evaluates their performances regularly and also through the Nomination and Remuneration Committees.
    A.9.2 The Board should also undertake an annual self-evaluation of its own performance and that of its Committees.
    A.9.3 The Board should state how such performance evaluations have been conducted, in the Annual Report. Through these evaluations done by the Sub-Committees mentioned above, Board of Directors are satisfied that the composition of the Board matched with the requirements.
    A.10 Disclosure of Information in-respect of Directors
    Principle A.10 Shareholders should be kept advised of relevant details in respect of Directors.  
    A.10.1 The Annual Report of the Company should set out the following information in relation to each Director: Following information in relation to Directors is disclosed in this Annual Report:
      Name, qualifications and brief profile; The nature of his/her expertise in relevant functional areas; Name, qualification, nature and extent of the experience are given in the brief profiles of the Board of Directors on pages 22 to 24.
      Immediate family and/or material business relationships with other Directors of the Company; Provisions have been made for the Directors to declare their interests on the transactions of the Company. The interest register is maintained and the Directors interest in contracts are given in page 160.
      Whether Executive, Non-Executive and/or Independent Director; Executive/Non-Executive/Independent status of the Directors are given on page 134.
      Names of listed companies in Sri Lanka in which the Director concerned serves as a Director; Refer page 155 for Total number of Board seats held by each Director indicating listed/unlisted and Executive/Non-Executive status.
      Names of other companies in which the Director concerned serves as a Director, provided that where he/she holds directorships in companies within a Group of which the Company is a part, their names need not be disclosed; it is sufficient to state that he/she holds other Directorships in such companies;
      Number/percentage of Board meetings of the Company attended during the year; Number of Board meetings held and attendance are given on page No. 135.
      The total number of Board seats held by each Director indicating listed and unlisted Companies and whether in an executive or Non-Executive capacity. Total number of Board seats held by each Director indicating listed/unlisted and Executive/Non-Executive status.
      Names of Board Committees in which the Director serves as Chairman or a member; and Memberships of Board Sub-Committees are given on pages 162 to 163.
      Number/percentage of Committee meetings attended during the year. Number of Board Sub-Committee meetings held and attendance are given on page 136.
         
    A.11 Appraisal of CEO
    Principle A.11 The Board should be required, at least annually, to assess the performance of the CEO.  
    A.11.1 At the commencement of every fiscal year, the Board in consultation with the CEO, should set, in line with the short, medium and long term objectives of the Company, reasonable financial and non-financial targets that should be met by the CEO during the year. The Board, with the assistance of the with MD/ CEO decides financial and non-financial short, medium and long term objectives for the Company at the beginning of the year. These Objectives were reviewed by the Board continuously during the year under review. For more details, refer Our corporate strategy under page 42.
    A.11.2 The performance of the CEO should be evaluated by the Board at the end of each fiscal year to ascertain whether the targets set by the Board have been achieved and if not, whether the failure to meet such targets was reasonable in the circumstances. The Board monitored the achievement of these targets throughout the year and provided guidance to MD/CEO where necessary.
    B Director’s Remuneration  
    B.1 Remuneration Procedure  
    Principle B.1 Companies should establish a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors.  
    B.1.1 To avoid potential conflicts of interest, the Board of Directors should set up a Remuneration Committee to make recommendations to the Board, within agreed Terms of Reference, on the Company’s framework of remunerating Executive Directors. The Board of Directors of CLIL has set up a Remuneration Committee and the Committee acts according to the Board approved Terms of Reference. The Remuneration Committee makes recommendations to the Board on the remuneration payable to the Directors.

    The Board makes the final determination, having considered the recommendations of the Committee and individual performance.
    B.1.2 Remuneration Committees should consist exclusively of Non-Executive Directors and should have a Chairman, who should be appointed by the Board. The Remuneration Committee comprises three (3) Non-Executive Directors, out of which the Chairman of the Committee is an Independent Non-Executive Director appointed by the Board.
    B.1.3 The Chairman and members of the Remuneration Committee should be listed in the Annual Report each year. Details on the members of the Committee are given under the Report of Remuneration Committee on page 164.
    B.1.4 The Board as a whole, or where required by the Articles of Association the shareholders, should determine the remuneration of Non-Executive Directors, including members of the Remuneration Committee, within the limits set in the Articles of Association. Non-Executive Directors are remunerated in line with market practices.
    B.1.5 The Remuneration Committee should consult the Chairman and/or CEO about its proposals relating to the remuneration of other Executive Directors and have access to professional advice from within and outside the Company, in discharging their responsibilities. The Remuneration Committee consults the Chairman or MD/CEO, where necessary and has access to professional advice from within and outside the Company to effective discharge of their duties.
         
    B.2 The Level and Make up of Remuneration
    Principle B.2 Levels of remuneration of both Executive and Non-Executive Directors should be sufficient to attract and retain the Directors needed to run the Company successfully.  
    B.2.1 The Remuneration Committee should provide the packages needed to attract, retain and motivate Executive Directors of the quality required but should avoid paying more than is necessary for this purpose. Directors’ remuneration, in respect of the Company for the year 2016, is given in Note 43 on page 272 Also the Remuneration Committee of the Company and the Board ensures that the MD/CEO and other four Executive Directors are provided with an appropriate remuneration package.
    B.2.2 The Remuneration Committee should judge where to position levels of remuneration of the Company, relative to other companies. The Remuneration Committee compares the remuneration levels of the Company with such packages of comparable companies in the industry.
    B.2.3 The Remuneration Committee should be sensitive to remuneration and employment conditions elsewhere in the Company or Group of which it is a part, especially when determining annual salary increases. The Remuneration Committee also considers remuneration levels of the parent company, when deciding the remuneration packages.
    B.2.4 The performance-related elements of remuneration of Executive Directors should be designed and tailored to align their interests with those of the Company and main stakeholders and to give these Directors appropriate incentives to perform at the highest levels. When the financial performance of the Company are analysed on quarterly basis, each supervisory Executive Director’s performance in respective ares are also anlaysed.
    B.2.5 Executive share options should not be offered at a discount (i.e. less than market price prevailing at the time the exercise price is determined), save as permitted by the Listing Rules of the Stock Exchange. Not applicable.
    B.2.6 In designing schemes of performance related remuneration, the Remuneration Committee should follow the provisions set out in Schedule E. Not applicable
    B.2.7 Remuneration Committee should consider what compensation commitments (including pension contributions) their Directors’ contracts of service, if any, entail in the event of early termination. There are no compensation commitments in employment contracts for early terminations and there were no instances of early termination during the year under review that required compensation.
    B.2.8 Where the initial contract does not explicitly provide for compensation commitments, Remuneration Committee should, within legal constraints, tailor their approach in early termination cases to the relevant circumstances.

    The broad aim should be, to avoid rewarding poor performance while dealing fairly with cases where departure is not due to poor performance
         
    B.2.9 Levels of remuneration for Non-Executive Directors should reflect the time commitment and responsibilities of their role, taking into consideration market practices.

    Remuneration for Non-Executive Directors should not normally include share options. If exceptionally options are granted, shareholder approval should be sought in advance and any shares acquired by exercise of the options should be held until at least one year after the Non-Executive Director leaves the Board.
    Non-Executive Directors are remunerated in line with market practices.  


    Not applicable.
    B.3 Disclosure of Remuneration  
    Principle B.3 The Company’s Annual Report should contain a Statement of Remuneration Policy and details of remuneration of the Board as a whole. Refer Schedule D for Specimen Remuneration Committee Report. The aggregate remuneration paid to MD/CEO, Executive and Non-Executive Directors are shown on page 270.
    B.3.1 The Annual Report should set out the names of Directors (or persons in the parent company’s committee in the case of a Group company) comprising the Remuneration Committee, contain a Statement of Remuneration Policy and set out the aggregate remuneration paid to Executive and Non-Executive Directors. Details on the members of the Remuneration Committee are given on the Remuneration Committee Report on page 164.
    C Relations with Shareholders  
    C.1 Constructive use of the AGM and Conduct of General Meetings
    Principle C.1 Boards should use the AGM to communicate with shareholders and should encourage their participation. The Company is a 100% owned subsidiary of Ceylinco Insurance PLC. The Company, solicits the holding Company’s views, in promoting a healthy dialogue. The Company held its Second AGM on 30 March 2016.
    C.1.1 Companies should count all proxy votes and should indicate the level of proxies lodged on each resolution and the balance for and against the resolution and withheld, after it has been dealt with on a show of hands, except where a poll is called. The Sole shareholder appointed a proxy who attended the meeting and all the resolutions proposed was carried out unanimously.
    C.1.2 Companies should propose a separate resolution at the AGM on each substantially separate issue and should in particular propose a resolution at the AGM relating to the adoption of the report and accounts. Each substantially different issue is proposed as a separate resolution at the AGM. The adoption of the Annual Report of the Board of Directors, on the Affairs of the Company and Financial Statements with Independent Auditors’ Report thereon, is also proposed as a separate resolution.
    C.1.3 The Chairman of the Board should arrange for the Chairmen of the Audit, Remuneration and Nomination Committees to be available to answer questions at the AGM if so requested by the Chairman. The Chairmen of the Audit, Remuneration and Risk Committees were present at the last AGM to answer any question or query.
    C.1.4 Companies should arrange for the Notice of the AGM and related papers to be sent to shareholders as determined by statute, before the meeting. The Company has given more than 15 working days notice as per the Companies Act No. 07 of 2007 and the Articles of Association of the Company. A summary of the procedures governing voting at the AGM is given on the Proxy Form.
    C.1.5 Companies should circulate with every Notice of General Meeting, a summary of the procedures governing voting at General Meetings. The said summary of the procedure governing the voting is circulated with the proxy form.
         
    C.2 Communication with Shareholders  
    Principle C.2 The Board should implement effective communication with shareholders The Company, maintains a healthy dialogue with the sole Shareholder at all times.
    C.2.1 There should be a channel to reach all shareholders of the Company in order to disseminate timely information. Currently, the Company has only one shareholder and the said shareholder is informed of the channels to reach the Company for timely information.
    C.2.2 The Company should disclose the policy and methodology for communication with shareholders. No such policy documents at the moment, but the Company has facilitates its sole shareholder with effective communication.
    C.2.3 The Company should disclose how they implement the above policy and methodology.  
    C.2.4 The Company should disclose the contact person for such communication. The Contact person is disclosed in the AR for the shareholders to contact on page 7.
    C.2.5 There should be a process to make all Directors aware of major issues and concerns of shareholders and this process has to be disclosed by the Company. If there is any concern raised by the shareholder and that will be brought to notice of the Board at the subsequent Board meeting or if it is an urgent issue immediately.
    C.2.6 The Company should decide the person to contact in relation to shareholders’ matters. The relevant person with statutory responsibilities to contact in relation to shareholders’ matters is the Company Secretary or in his/her absence should be a member of the Board of Directors. The Company Secretary is available anytime for the shareholder in order to communicate the issues.
    C.2.7 The process for responding to shareholder matters should be formulated by the Board and disclosed. If there is any concern bought to the notice of the Company Secretary it will be informed to the Board of Directors.
    C.3 Major and Material Transactions  
    Principle C.3 Further to complying with the requirements under the Companies Act, Securities and Exchange Commission law and Colombo Stock Exchange regulations; as applicable, Directors should disclose to shareholders all proposed material transactions, which if entered into, would materially alter/vary the Company’s net assets base or in the case of a Company with subsidiaries, the consolidated group net asset base. If necessary the Company will take appropriate action to inform the shareholder accordingly.
    C.3.1 Prior to a Company engaging in or committing to a ‘Major related party transaction’ with a related party, involving the acquisition, sale or disposition of greater than one-third of the value of the Company’s assets or that of a subsidiary which has a material bearing on the Company and/or consolidated net assets of the Company, or a transaction which has or is likely to have the effect of the Company acquiring obligations and liabilities, of greater than one-third of the value of the Company’s assets, Directors should disclose to shareholders the purpose and all material facts of such transaction and obtain shareholders’ approval by ordinary resolution at an extraordinary general meeting. RPTR Committee is appointed to review the related party transactions and if there is a major related party transaction as specified in the code the Company will sort the necessary acts required by the Companies act.
         
    D Accountability and Audit  
    D.1 Financial Reporting  
    Principle D.1 The Board should present a balanced and understandable assessment of the Company’s financial position, performance and prospects. CLIL Board has taken all steps to present a balanced and understandable assessment of the Company's financial position, performance and prospects.
    D.1.1 The Board’s responsibility to present a balanced and understandable assessment extends to interim and other price-sensitive public reports and reports to regulators, as well as to information required to be presented by statutory requirements. CLIL Board assumes the responsibility to present such balanced and understandable assessment and that they extend it to interim and other price-sensitive public reports and reports to regulators as well as to information to be presented by statutory requirements. More details are given in the Statement of Directors Responsibility to financial reporting on page 178.
    D.1.2 The Annual Report of the Directors Refer the Annual Report of the Directors’ on page 156.
    D.1.3 The Annual Report should contain a statement setting out the responsibilities of the Board for the preparation and presentation of Financial Statements, together with a statement by the Auditors about their reporting responsibilities. Directors assume responsibility for preparation of the Financial Statements for the year under review in the Annual Report of the Directors on page 156. The Independent External Auditors report on page 186 states that their responsibility towards the Auditing of the said Financial Statements. Further, ‘‘The Board’s Statement on Internal Control’’ on page 180 makes an integral part of the Report.
    D.1.4 The Annual Report should contain a ‘Management Discussion and Analysis’, Refer Management Discussion and Analysis on pages 60 to 113. The Report discusses Seven main capitals, Financial, Investor, Employee, Business partners, Customer, Institutional and Social & Environment. Main capitals; Financial, Human Resources, Social and Operational.
    D.1.5 The Directors should report that the business is a going concern, with supporting assumptions or qualifications as necessary. More details are given in the Statement of Directors Responsibility to Financial Reporting on page 178.
    D.1.6 In the event the net assets of the Company fall below 50% of the value of the Company’s shareholders’ funds, the Directors shall forthwith summon an extraordinary General Meeting of the Company to notify shareholders of the position and of remedial action being taken. In an event the net asset value fall below 50% of the Shareholders Funds, the Directors shall take steps to call an EGM to notify shareholders of the position and will discuss remedial action to be taken.
    D.1.7 The Board should adequately and accurately disclose the related party transactions in its Annual Report: Refer the report on Related Party Transaction review Committee on page 168.
      There should be a process to capture related parties and related party transactions. The Board appointed RPTR Committee overlooks the area of RPTs. The Committee has discussed a process to capture such transactions and has defined the transactions that should be considered by the Committee. They are bound by the code of best practices on RPTs and the Company Secretary maintains a register in soft form for the purpose. More details are given in “Report on RPTR Committee”on page 168.
         
      A record/register either in hard or soft form on related party and related party transaction should be maintained by the Company;  
    D.2 Internal Control  
    Principle D.2 The Board should have a process of risk management and a sound system of internal control to safeguard shareholders’ investments and the Company’s assets. The Board of Directors, through the involvement of the Board Risk Committee and Departmental Risk Committees, has taken all necessary measures and steps to ensure that the systems designed to safeguard the Company’s assets, maintain proper and accurate accounting records, as per prevailing Accounting Standards and provide management information, are in place and are functioning transparently, in accordance with the required standards.
    D.2.1 The Directors should, at least annually, conduct a review of the risks facing the Company and the effectiveness of the system of internal controls, so as to be able to report to shareholders as required in D.1.3. This could be made the responsibility of the Audit Committee. The Company conducts regular reviews of risks faced by the Company and the effectiveness of risk management and internal control. A system has introduced at the operations level to capture all the risks that the Company facing. More details are given in the Risk Management Report.
    D.2.2 Companies should have an internal audit function. The internal audit function of the Company is monitored by the Internal Audit Department of the Company, subject to the direct supervision of the Audit Committee Department.
    D.2.3 The Board should require the Audit Committee to carry out reviews of the process and effectiveness of risk management and internal controls and to document to the Board and Board takes the responsibility for the disclosures on internal controls. The Audit Committee also assesses the efficiency and effectiveness of the risk review process and systems of internal control on a regular basis. Further, the Audit Committee reviews the compliance system of the Company on a quarterly basis.
    D.2.4 The Schedule K to this document contains guidance on the responsibilities of Directors in maintaining a sound system of internal control and the contents of the Statement of Internal Control. Refer the Board’s Statement of Internal Control on page 180.
    D.3 Audit Committee  
    Principle D.3 The Board should establish formal and transparent arrangements for considering how they should select and apply accounting policies, financial reporting and internal control principles and maintaining an appropriate relationship with the Company’s Auditors. The broad purposes of the Committee are to oversee the preparation, presentation and adequacy of the disclosure of information in Financial Statements, in accordance with prevailing Accounting Standards and all other statutory requirements.

    The Audit Committee also ensures the Company’s internal control system is up to the industrial/international standards. The Committee monitors the compliance of statutory requirements by the management. The Committee also assesses the independence and performance of the Company’s Auditors.

    Full detailed Report on the Audit Committee, Names of the members of the Committee are disclosed on pages 166 and 167 under 'The Report of the Audit Committee'.
    D.3.1 The Audit Committee should be comprised of a minimum of two Independent Non-Executive Directors (in instances where a Company has only two Directors on its Board) or exclusively by Non-Executive Directors, a majority of whom should be independent, whichever is higher. The Chairman of the Committee should be a Non-Executive Director, appointed by the Board. The Audit Committee comprises three Non-Executive Directors, two of whom are Independent Directors. The Chairman of the Audit Committee is a Non-Executive Director appointed by the Board.
    D.3.2 The duties of the Audit Committee should include keeping under review the scope and results of the audit and its effectiveness and the independence and objectivity of the Auditors. The Audit Committee Charter adopted by the Board include keeping under review the scope and results of the audits effectiveness and the independence and objectivity of the Auditors as main objectives.
    D.3.3 The Audit Committee should have a written Terms of Reference. The Audit Committee Charter recommended and approved by the Board is adopted by the Company. More details are given on pages 166 and 167 under ‘Audit Committee Report’
    D.3.4 The names of Directors (persons in the Parent Company’s Committee in the case of a Group Company) comprising the Audit Committee should be disclosed in the Annual Report. Refer ‘Audit Committee Report’ on page 166 and 167.
    D.4 Code of Business Conduct and Ethics  
    Principle D.4 Companies must adopt a Code of Business Conduct and Ethics for Directors, and Key Management Personnel and must promptly disclose any waivers of the Code for Directors or others The Company practices a Code of Best Business Conduct and Ethics, requiring all employees to exercise honesty, objectivity and due diligence in performing their duties, maintain confidentiality of commercial and price-sensitive information, work within applicable laws and regulation, safeguard the Company’s assets and avoid conduct which will badly reflect on them or the Company’s image. The said Code of Conduct and Ethics, addresses issues relating to conflict of interest situations, bribery and corruption, entertainment and gifts, accurate accounting and record keeping, corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, compliance with laws and regulations and encouraging the reporting of any illegal or unethical behavior.
    D.4.1 All Companies must disclose whether they have a Code of Business Conduct and Ethics for Directors and Key Management Personnel and if they have such a Code, make an affirmative declaration in the Annual Report that all Directors and Key Management Personnel have declared compliance with such Code and if unable to make that declaration, state why they are unable to do so. Each Company may determine its own policies in the formulation of such a Code, but all Companies should address the following important topics in their respective Codes:  
    D.4.2 The Chairman must affirm in the Company’s Annual Report that he is not aware of any violation of any of the provisions of the Code of Business Conduct and Ethics Refer message from the Chairman on pages 11 to 13.
         
    D.5 Corporate Governance Disclosures  
    Principle D.5 Directors should be required to disclose the extent to which the Company adheres to established principles and practices of Good Corporate Governance. Board o f Directors of CLIL has taken steps within their full power to sure that the Company has complied with the Corporate Governance principles and practices.
    D.5.1 The Directors should include in the Company’s Annual Report a Corporate Governance Report. The Corporate Governance report is included in the Annual Report on pages 133 to 161.
    Section 02 Shareholders  
    E Institutional Investors  
    E.1 Shareholder Voting  
    Principle E.1 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. Not applicable as the Company is not listed yet.
    E.1.1 A listed company should conduct a regular and structured dialogue with shareholders, based on a mutual understanding of objectives. Not applicable.
    E.2 Evaluation of Governance Disclosures  
    Principle E.2 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. Refer Corporate Governance report on pages 133 to 161.
    F Other Investors  
    F.1 Investing/Divesting Decision  
    Principle F.1 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. Not applicable as the Company is not listed yet.
    F.2 Shareholder Voting  
    Principle F.2 Individual shareholders should be encouraged to participate in General Meetings of companies and exercise their voting rights. The Company is a 100% owned subsidiary of Ceylinco Insurance PLC.
    G Sustainability Reporting  
    G.1 Principle of Sustainability Reporting  
    G.1.1 Principle 1 – Economic sustainability
    The principle of economic sustainability governance recognises how organisations take responsibility for impacts of their strategies, decisions and activities on economic performance and corporate citizenship in their sphere of influence (including geographic) and how this is integrated throughout the organisation.
    Refer ‘Operating Environment’ on pages 36 to 41.
         
    G.1.2 Principle 2 – The Environment
    Environmental Governance of an organisation should adopt an integrated approach that takes into consideration the direct and indirect economic, social, health and environmental implications of their decisions and activities, including pollution prevention, sustainable resource use, climate change, protection of environment, biodiversity and restoration of national resources.
    Refer ‘Social and Environmental Capital’ in pages 106 to 113.
    G.1.3 Principle 3 – Labour Practice
    Labour practices governance of an organisation encompass all policies and practices relating to work performed by or on behalf of the organisation.
    Refer ‘Employee Capital’ in pages 95 to 104.
    G.1.4 Principle 4 – Society
    Society Governance encompasses support for and building a relationship with the community and striving for sustainable development including responsible public policy participation, fair competition and responsible community involvement.
    Refer ‘Social and Environmental Capital’ in pages 106 to 113.
    G.1.5 Principle 5 – Product Responsibility
    Product responsibility Governance includes manufacturing quality products and distributing them and ensuring that the products are safe for the consumers and the environment and also communicating clearly with consumers so that they can make an informed choice including factual unbiased information and fair contractual practices and consumer data protection and privacy.
    Refer ‘Institutional Capital’ in pages 71 to 74.
    G.1.6 Principle 6 – Stakeholder identification, engagement and effective communication
    Internal and external stakeholder groups should be identified in relation to the Company’s sphere of influence, impact and implication. Communications should be proactive and transparent.
    Refer ‘Operating Environment’ in pages 36 to 41.
    G.1.7 Principle 7 – Sustainable reporting and disclosure should be formalised as part of the Company’s reporting processes and take place on a regular basis. The report is done according to the GRI Guidelines. Please refer ‘Social and Environmental Capital’ for more details in pages 106 to 113.

    Board Sub-Committees

    Board has appointed the following Sub-Committees and has delegated a part of its work to ensure effective and efficient direction to the Company:

    • Audit Committee
    • Nomination Committee
    • Remuneration Committee
    • Related Party Transactions Review Committee
    • Risk Committee

    All Board Sub-Committees have written Terms of Reference approved by the Board and the Board receives reports of their proceedings and deliberations. A comprehensive outline regarding the Sub-Committees can be referred to in pages 162 and 163 .

    Audit Committee

    The Audit Committee of CLIL functions as a Sub-Committee of the Board. The Broad purposes of the Committee are to oversee the preparation, presentation and adequacy of the disclosure of information in Financial Statements, in accordance with prevailing Accounting Standards and all other statutory requirements.

    The Audit Committee ensures the Company’s internal control system is up to the industrial/international standards. The Committee monitors the compliance of statutory requirements by the management. The Committee also assesses the independence and performance of the Company’s Auditors.

    More details on the Audit Committee’s purpose, initiatives, future outlook and the names of the Directors who serve on the said Committee are given in the Audit Committee report on pages 166 and 167.

    Remuneration Committee

    A Remuneration Committee functions as a Sub-Committee of the Board. The names of the Directors who serve on the said Committee are given on page 164.

    Related Party Transactions Review Committee

    The Related Party Transactions Review Committee was appointed by the Board during the year under review. The Report of the Related Party Transactions Review Committee including the names of the Directors who serve on the said Committee, is given on page 168.

    Nomination Committee

    The Nomination Committee of CLIL authorised to make recommendations to the Board on all new Board appointments if any arises. The Nomination Committee met once for the year 2016 and assessed the Board composition to ascertain whether the combined knowledge and experience of the Board matches the strategic demands facing the Company. More details are given in the Nomination Committee Report in page 165. For the year 2016, there were no new appointments.

    Risk Committee

    Risk Management Committee functions under the guidance of three Non-Executive Directors. Ms. Amali Senviratne, Mr J Wickramasinghe and Mr R S W Senanayake. The said Board Risk Committee overlooks the risk factors of the Company at a macro level. The Executive Risk Committee functions under the Board Risk Committee which directs the strategies to the grass root level. Mr Ranga Abeynayake functions as the Compliance Officer to ensure compliance with the Regulatory and Statutory requirements and the laws and regulations.

    More details of the Company’s risk management are given on pages 124 to 132.

    Disclosure of Information in respect of Directors

    The following information, in relation to Directors is disclosed in this Annual Report:

    • Name, qualifications and brief profiles; (pages 22 to 24)
    • The nature and extent of the experience; (pages 22 to 24)
    • Directors’ interest in contracts (page 160)
    • Executive/Non-Executive/Independent Status (page 134)

    Total No. of Board seats held by each Director indicating listed/unlisted and Executive/Non-Executive status are given below:

        Board Seats
    No. Name of the Director Listed Unlisted Executive Non-Executive
    1. R Renganathan 1 9 1 9
    2. E T L Ranasinghe 1 5 4 2
    3. P D M Cooray 1 1 1 1
    4. Palitha Jayawardena 1 4 4
    5. Ranga Abeynayake 2 1 1 2
    6. J Godwin Perera 1 1
    7. D H J Gunawardena 3 3 3 3
    8. Gen. C S Weerasooriya (Retired) 1 1
    9. R S W Senanayake 9 9
    10. J A Setukavalar 1 6 6 1
    11. Prof. Mohan de Silva
    12. Dr. B G S de Silva 1 1
    13. J Wickramasinghe 1 1
    14. Sugath Caldera
    15. Ms. A K Seneviratne

    The Management

    The day-to-day operations of the Company are entrusted to the Corporate and Senior Management headed by the Managing Director/CEO. They ensure that risks and opportunities are identified and required steps are taken to achieve targets within defined time frames and budgets.

    Financial Disclosures and Transparency

    Financial Statements are prepared in accordance with the new Sri Lanka Accounting Standards, the Companies Act, the Regulation of Insurance Industry Act and the directions and rules issued thereunder. CLIL publishes its unaudited quarterly/half yearly Financial Statements and Audited Financial Statements subsequent to the Board approval in promoting transparency and good governance.

    Messrs Ernst & Young, Chartered Accountants, acts as Independent Auditors of the Company. The Auditors are allowed to act independently and without intervention from the Management or the Board of Directors to express an opinion on the Financial Statements of the Company. All the required information is provided for examination to the Auditors.

    Ethical Standards

    The Company requires that all its employees maintain the highest standards of integrity in the performance of their duties and dealings on behalf of the Company.

    The Company focuses on the training and career development of employees for the creation of an empowered and committed group of employees.

    Statutory Payments – All statutory payments due to the Government, which have fallen due, have been made or where relevant provided for.

    Accountability and Disclosure

    The members of the Board of Directors have reviewed in detail the Financial Statements in order to satisfy themselves that they present a true and fair view of the Company’s affairs.

    By Order of the Board,
    Ceylinco Life Insurance Limited

    K I Weththasinghe
    Company Secretary
    Ceylinco Life Insurance Limited

    23 February 2017
    Colombo