Related party transactions review committee report

The Board appointed Related Party Transactions Review Committee ensures the strict compliance with the rules and regulations governing related party transactions.

Composition and committee meetings

As at 31 March 2020, the Related Party Transactions Review Committee comprised three Non-Executive Directors of whom two are Independent Directors.

During the Financial year 2019/20 and prior to the reconstitution of the Board with effect 19 February 2020, the Committee held two meetings. Pending reconstitution of the Board in December 2019 and due to island-wide curfew imposed by the Government pursuant to the threat of the spread of the COVID-19 virus, the Committee could not convene a meeting in December 2019 and could not convene the meeting scheduled to be held on 16 March 2020.

The Chief Executive Officer/GM of the Company attended Committee meetings by invitation of the Committee and the members of the Senior Management were invited to participate in the meetings as and when required. The proceedings of the Committee were duly reported to the Board.

Mr Rohan Pathirage was appointed to the Committee with effect from 25 October 2019.

Attendance at meetings during the financial year

Name of Director	Board status	Membership	Meeting attendance
Mr Pradeep Amirthanayagam	Non-Executive Independent Director	Chairman	2/2
Mr Johnson Fernando	Non-Executive Non-Independent Director	Member	0/2
Mr M A M Rizwan	Non-Executive Independent Director	Member	2/2
Mr Rohan Pathirage	Non-Executive Non-Independent Director	Member	1/1

With the reconstitution of the Board of the Company with effect from 19 February 2020, the Related Party Transactions Review Committee was reconstituted, and the members of the Related Party Transactions Review Committee as of 31 March 2020 are as follows:

Name of Director	Board Status	Membership
Mr Chanura Jayanta Wijetillake	Non-Executive Independent Director	Chairman
Mr Sudarshan Ahangama	Non-Executive Non-Independent Director	Member
Mr Upul Lakshman Asoka Wickramasinghe Bandara	Non-Executive Independent Director	Member

Brief profiles of the members of the Related Party Transactions Review Committee as at 31 March 2020 are given on pages 122 and 123 of this Annual Report.

Key highlights of year 2019/20

• Recommendation of revised Related Party Transactions (RPT) Guide and Manual for related party transactions
• Reviewed the related party transactions

Scope of the Committee

Mandate

The Board approved Terms of Reference (TOR) of the Committee sets out the purpose of the Committee, which is to review in advance all proposed related party transactions other than those transactions explicitly exempted in the TOR which are in conformity with the Listing Rules of the Colombo Exchange.

The functions of the Committee include

• Reviewing in advance all proposed related party transactions of the Company except those explicitly exempted by the TOR.
• Adopting policies and procedures to review related party transactions of the Company and overseeing existing policies and procedures.
• Determining whether related party transactions that are to be entered into by the Company require the approval of the Board or the Shareholders of the Company.
• Establishing guidelines to be followed by the senior management in respect of ongoing related party transactions;
• Ensuring that no Director of the Company shall participate in any discussion of a proposed related party transaction for which he or she is a related party, unless such Director is requested to do so by the Committee for the express purpose of providing information thereon to the Committee;
• Ensuring that immediate market disclosures and disclosures in the Annual Report as required by the applicable rules/regulations are made in a timely and detailed manner.

Authority

The Committee is authorised by the Board to discuss the matters falling within its purview to make decisions and report the recommendations to the Board and enable the Board to take final decisions on the matters. The Board has authorised the Committee to obtain professional advice as and when required.

Policies and Procedures on Related Party Transactions

Policy

The Board approved Related Party Transactions Policy defines the categories of persons who shall be considered as “related parties”.

Self-declarations are obtained from each Director and Key Management Personnel of the Company under the RPT policy to identify the parties related to them.

The Code of Business Conduct and Ethics of the Company requires each member of the Board to determine whether he/she has a potential or actual conflict of interest arising from personal relationships, external associations and interest in material matters which may have a bearing on his/her independent judgement. Directors who have such potential or actual conflict of interest are required to immediately disclose such conflict to the Board of Directors as soon as he/she becomes aware of it.

Procedures

The Company has implemented an on-line preventive system to ensure that no favourable treatment is accorded to related parties. This system also enables the Company to monitor and report related party transactions and retrieves data thereof throughout the Company’s network.

Related Party Transactions during 2019/20

Details of all transactions with the related parties during the year 2019/20 were reviewed by the Committee. There were no non-recurrent transactions that exceeded the threshold during the financial year 2019/20.

The details of the recurrent transactions that exceeded the threshold during the financial year 2019/20 are disclosed under “Note 58 – Related Party Disclosure” of the Financial Statements.

Details of related party transactions are disclosed under Note 58 on pages 257 to 262 of the Financial Statements.

Declaration

The declaration by the Board of Directors that no related party transaction other than the recurrent transactions that exceeded the threshold during the Financial year 2019/20 as disclosed under “Note 58 – Related Party Disclosure” of the Financial Statements is contained in the Annual Report of the Board of Directors on the Affairs of the Company on pages 112 to 117.

 

Chanura Wijetillake
Chairman
Related Party Transactions Review Committee

8 July 2020

Colombo