The report below covers the company’s extent of adoption of the Code of Corporate Governance jointly issued by

the Securities and Exchange Commission of Pakistan (SECP) and Karachi and Lahore Stock Exchange.


Corporate Goveranance PrincipleAdoption Status AGTL’s Extent of Adoption

Effective representation of independent non-executive directors, including those representing minority groups

Adopted

The company encourages minority groups to contest director election by giving adequate notice of the election.

Executive directors are not more than 75% of the elected directors

Adopted

Only two of the eight Directors are executive directors (including the CEO). Chairman’s and CEO’s roles are not vested in one person.
Signed declaration of awareness of duties and powers Adopted All directors of the company have made written declaration as to their awareness of duties and powers.
Eligibility to act as a director Adopted All directors file a declaration that they are qualified and eligible to act as director of the company, based on the principles laid down by the SECP.
Stock Broker not to be appointed as a director Adopted No director or their spouse is engaged in the business of stock brokerage.
Tenure of office of directors Adopted Directors are appointed for a period of three years. The next Board election is schedule for December 2011. No casual vacancy arouse during 2010.
Code of ethics and business practices Adopted The company has developed a code of business conduct and ethics for all employees and directors, which addresses conflict of interest, corporate opportunities, confidentiality of information, fair dealing, protecting and proper use of the company’s assets, compliance with laws and regulations and encouraging the reporting of any illegal or unethical behaviour etc. The code is signed by the directors and employees annually.
Board responsibilities Adopted The Board of Directors has collective responsibility for the success of the company. The Board formulates strategy and ensures the implementation of same by the management, led by the CEO. The CEO is directly responsible for business operations and supported by the management of the company. The non-executive directors are responsible for bringing independent judgment and scrutiny to decisions taken by the Board. Through the above process the Board ensures that the integrity of fi nancial information, fi nancial controls and systems of risk management are robust and the company complies with all applicable laws and regulations.
Internal control system Adopted The Board is responsible for establishing a sound framework of internal controls and monitoring its effectiveness on a continuous basis. Through such an effective framework, the company manages business risks and ensures that the fi nancial information on which business decisions are made and published is reliable. The system of internal control is evaluated by the Audit Committee. In the year 2010, the Board of Directors expressed satisfaction with the effectiveness of the system of internal controls in all reviews of the Committee.
Division of responsibilities of the Chairman and CEO Adopted The Chairman of the company is a non-executive director. The functions of the Chairman and CEO are clearly separated in order to ensure a balance of power and authority, such that no individual has unfettered powers of the decision. The roles and responsibilities of the Chairman and CEO are clearly defined in writing as a policy.
Chairman of the Board to preside over meetings of the Board Adopted All meetings of the company are presided by the non-executive Chairman.
Meetings of the Board to be held at least every quarter Adopted During the year five Board meetings were held, ensuring that at least one meeting was held in every quarter of the financial year.
Adequate time for Board meetings Adopted The Board papers were sent to the directors at least a week before the respective Board meeting, giving adequate time for directors to study the related papers and prepare for a meaningful discussion at the meeting.
Circulation of the minutes of the meetings of the Board Adopted Minutes of the meetings of the Board are circulated to all directors within 14 days of the meeting.
Information placed before the Board of Directors Adopted The Board was provided with timely and appropriate information by the management by way of Board papers and proposals. The Board sought additional information as and when necessary. Information placed before the Board during 2010 include:
• annual forecast, cash fl ow projections, capital budget;
• annual and quarterly results;
• management letter issued by the external auditors;
• status of legal cases;
• minutes of management committee meetings;
• promulgation and amendments in laws and regulations
Related party transactions Adopted All related party transactions are placed before the Board and the Audit Committee. The management ensures that all transactions are at arm’s length. The company maintains party wise record of transactions entered into with related parties.
Training for Directors Adopted Directors recognize the need for continuous training and expansion of knowledge and undertake such professional development as they consider necessary in assisting them to carry out their duties as Directors. During the year, directors attended a training course related to the applicable laws and regulations in Pakistan.
Certification of directors under “the Board Development Series” Adopted The CEO and Company Secretary had undertaken the course on Board Development Series in 2009 and have been qualified as “Certified Directors”.
Appointment of CFO, Company Secretary and Head of Internal Audit Adopted The appointment, remuneration and conditions of employment of CFO, Company Secretary and Head of Internal Audit are determined by the CEO and approved by the Board of Directors.
Qualification of CFO Adopted The CFO of the Company, is a fellow member of the Institute of Chartered Accountants of Pakistan (ICAP)
Qualification of Company Secretary Adopted The Company Secretary of the company, is an associate member of the Institute of Chartered Accountants of Pakistan and is a Certified Director from PICG.
CFO and Company Secretary to attend Board meetings Adopted The CFO and Company Secretary attend meetings of the Board of Directors. The CFO is an elected director on the Board and is therefore entitled to cast a vote at the meeting.
Directors’ report to the shareholders Adopted The Directors’ report given on pages 38 to 40 of this annual report covers all areas of this section.
Trading in shares by directors, CEO, CFO, Company Secretary Adopted The directors, CEO, CFO, Company Secretary and their spouses and minor children did not trade in the share of the company.