Board Related Party Transactions Review Committee Report

The Committee reviewed the related party transactions of the Bank to facilitate compliance with regulatory requirements, safeguarding the interests of the Bank and its stakeholders.

Vajira Kulatilaka

Chairperson

Regular attendees to the Committee meetings by invitation:
  • Managing Director
  • Chief Compliance Officer
  • Any other officer/s required by the Committee

The Company Secretary functioned as the Secretary to the Committee and in his absence, a nominee appointed by the Company Secretary functioned as the Secretary to the Committee during the year under review.

REGULATIONS/RULES RELEVANT TO THE FUNCTIONS OF THE COMMITTEE

The role, functions and the composition of the Board Related Party Transactions Review Committee (BRPTRC) are defined by the provisions of the:

  • Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks issued by the Central Bank of Sri Lanka (Direction 2007);
  • Banking Act Direction No. 05 of 2024 on Corporate Governance for Licensed Banks issued by the Central Bank of Sri Lanka (Direction 2024);
  • Section 9.14 of Listing Rules of the Colombo Stock Exchange (CSE Rules);
  • Code of Best Practice on Corporate Governance 2023 issued by the Institute of Chartered Accountants of Sri Lanka (Code 2023).
COMMITTEE MEMBERSHIP DURING THE YEAR 2024
Board Member Directorship Status Membership Status Attendance (Attended/Eligible to Attend)
Mr Vajira Kulatilaka Independent/Non-Executive Chairman 4/4
Mr Hiran Cabraal Independent/Non-Executive Member 3/4
Mr Dilip de S Wijeyeratne (w.e.f 1st June 2024) Independent/Non-Executive Member 2/2
Mrs Keshini Jayawardena (Until 31st May 2024) Independent/Non-Executive Member 2/2

w.e.f - with effect from

Refer pages 186 to 189 for the profiles of the committee members.

KEY ACTIVITIES IN 2024

The Committee enhanced their procedures and processes to comply with the enhanced rules and regulations implemented by the Central Bank of Sri Lanka, the CSE Rules and the Code 2023 during the year. Accordingly, the scope of related party transactions reviewed was expanded.

KEY RESPONSIBILITIES OF THE COMMITTEE
  • Taking all necessary steps to avoid any conflicts of interest that may arise from any transaction of the Bank with any category which shall be considered as “Related Parties” as authorised by the Board.
  • Ensuring that the transaction with related parties are identified by the respective authorities in line with the regulatory requirements.
  • Maintaining the Board's standard which is to ensure that the Bank does not engage in transactions with related parties in a manner that would grant such parties a “More Favourable Treatment” than that accorded to other constituents of the Bank carrying on the same business.
  • Ensuring that the Bank shall not grant any accommodation to any of its Directors or to a close relation of such Director or to any concern in which the person has a substantial interest unless such accommodation is sanctioned at a meeting of its Board of Directors, with not less than two-thirds of the number of Directors other than the Director concerned, voting in favour of such accommodation and to ensure all regulations pertaining to such accommodations are followed.
  • Ensuring that there is an adequately effective and efficient system in place to capture information which is relevant to its review function.
  • Obtaining professional and expert advice from qualified persons, where such advice is necessary for the performance of the review function.
  • Reviewing the Terms of Reference of the Committee periodically and ensure that it reflects the best practices of the industry at all times.
  • Assessing the performance of the Committee annually.
  • Recommend to the Board such amendments to its scope as may, in its view be applicable, to achieve better compliance with regulatory requirements.
DECLARATION BY THE COMMITTEE

The Bank has already complied with the requirements stipulated under the Banking Act Direction No. 05 of 2024 on Corporate Governance for Licensed Banks issued by the Central Bank of Sri Lanka, which is effective from 1st January 2025 as appropriate. Further, the Bank will ensure overall compliance with the aforementioned regulation in accordance with the timelines specified therein.

REPORTING TO THE BOARD

The minutes of the Committee meetings were tabled at Board meetings, thereby providing Board members with access to the deliberations of the Committee.

PERFORMANCE EVALUATION OF THE COMMITTEE

The annual self-evaluation of the Committee was conducted at the year- end by the members of the Committee. The results were discussed at the Committee with, where necessary, areas for improvement being identified and the plans for improvement being communicated to the Board.

On behalf of the Board Related Party Transactions Review Committee,

VAJIRA KULATILAKA

Chairman - Board Related Party Transactions Review Committee

17th February 2025

Colombo, Sri Lanka

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