2 minute read
Report of the Related Party Transaction Review Committee
Report of
the Related Party Transaction Review Committee
Advertisement
The Related Party Transaction Review Committee (RPTRC) was constituted by the board of directors on 01st January 2016 further to the provisions contained in Section 9 of the Listing Rules of the Colombo Stock Exchange (CSE).
Composition of the Committee
The Committee comprised of the following members & they met 04 times during the year under review,
Mr. S. A. Wickramapala (Chairman) – Non Executive / Independent Director
Mr. G. V. P. G. Amarasinghe – Executive Director / Chief Executive Officer
Purpose of the Committee
The purpose of the Committee is to assist the Board in meeting its oversight responsibilities to ensure that the interest of shareholders as a whole, are taken into account when entering into related party transactions.
The RPTRC reviews all the Related Party Transactions of the Group and where the Committee decides that the approval of the Board of Directors of the respective companies is necessary to approve a Related Party Transaction, such Board approval is obtained prior to entering into the relevant Related Party Transaction.
When reviewing a transaction, the RPTRC would decide whether the proposed transaction is carried out on an arm’s length basis irrespective of whether recurrent or non-recurrent in nature.
Reviewing and approval would be either by meeting of members (subject to quorum being present) or by circulation.
In determining whether to obtain the approval of the Board of Directors for a Related Party Transaction, the RPTRC will take into account, among other factors it deems appropriate, whether the proposed RPTs pose a conflict of interest to the Directors.
The self-declarations from the Directors and Key Management Personnel are obtained for the purpose of identifying parties related to them. Further, the guidelines which senior management must follow in routing Related Party Transactions to the relevant forum, including transaction threshold values and pricing where applicable, have been documented even in the case of once approved recurrent transactions which are of operational nature, which as per the RPT code need not be repeatedly approved if within the broad thresholds.
The RPTRC in discharging its function has introduced processes and periodic reporting by the relevant entities with a view to ensuring that:
² There is compliance with the Code; ² Shareholder interests are protected; and ² Fairness and transparency are maintained.
The Committee has criteria for designating Group Key Management Personnel (KMP). Further, processes have been introduced to obtain annual disclosures from all KMPs so designated.
The Related Party Transactions of the Company for the period 1st April 2017 to 31st March 2018 have been reviewed by the Members of the RPTRC and the comments and observations of the Committee have been communicated to the Board of Directors of the Company.
Meetings
The committee meetings were held four times during the year under review on 30th May 2017, 17th August 2017, 30th November 2017 and 27th February 2018.
Disclosures
A detailed disclosure of all the related party transactions including Recurrent and Non Recurrent related party transactions which are required to be disclosed under section 9.3.2 of the listing rules of the Colombo Stock Exchange has been made in Page 69.
S. A. Wickramapala
Chairman – Related Party Transactions Review Committee 30 July 2018
