Measures relating to the Instruction on Material Related Party Transactions for Listed Companies and Public Companies with More than One Hundred Shareholders Instruction No. (3/2020)

Domestic Regulations
sr. Para measures mode remarks
1 3 (j)

Material Related Party Transactions mean any related party transaction/s, either each transaction or total of all transactions over a twelve (12) month period, amounting to or more of five percent (.5 %) of a company's total assets as per the last audited annual financial statements of the company or one hundred (100) million Kyats, whichever is higher.

Mode 3 Domestic Regulations
2 4

When RPTs meet materiality threshold, they shall be considered material related party transactions subject to requirements of this Instruction.

Mode 3 Domestic Regulations
3 5

Any material RPTs should be approved by Board of directors. Related parties interested in the transaction shall not participate in any discussions about whether or not to approve the related party transaction, decision making regarding the transaction and deliberations on how the company should manage the transaction after a decision.

Mode 3 Domestic Regulations
4 6

The Board of directors shall have the overall responsibility in ensuring that transactions with related parties are handled in a sound and prudent manner with integrity, at arm's length and are reasonable in the circumstances, and in compliance with applicable laws and regulations to protect the interests of company's shareholders and other stakeholders. To this end, the Board shall:

i) Approve material related party transactions. For aggregate RPT transactions within a twelve (12)-month period that breaches the materiality threshold, Board approval would be required for the transaction(s) that meets and exceeds the materiality threshold;

ii) Ensure that management and relevant employees are adequately trained so that they can identify and report the related party transactions to the Board and authorized Executive Officers;

iii) To develop a properly articulated and transparent delegation of authority framework for the review and approval of RPTs below the materiality threshold mandated by SECM in section 3 (i) of this Instruction;

iv) Appoint and oversee the authorized officer responsible for identification and disclosure, if required, of related party transactions.

Mode 3 Domestic Regulations
5 7

The Board of directors shall adopt a material RPT policy. The material RPT policy shall include the following:

i) Identification of related parties: The policy shall clearly identify persons and companies that are considered as the company's related parties.

ii) Materiality thresholds: The policy shall include a materiality threshold that shall in no case exceed the threshold mandated by SECM in section 3 fi) of this Instruction.

iii) Approval of transactions below the materiality threshold: Each company shall set up a procedure on how the transactions below materiality threshold are reviewed and approved.

iv) Identification of conflicts of interest: The policy shall cover the identification and prevention or management of potential or actual conflicts of interest which may arise out of or in connection with the RPTs. Directors, Executive Officers and substantial shareholders with personal interest in the transaction shall abstain from the discussion, approval and management of such transaction or matter affecting the company;

v) Disclosure requirements: The members of the Board, Executive Officers and substantial shareholders shall fully disclose to the Board of directors all material facts related to material RPTs as well as their direct and indirect financial interest in any transaction or matter that may affect or is affecting the company.

Mode 3 Domestic Regulations
6 8

Each company shall maintain the register of related party transactions at its registered office in the form specified in Annex 1 to this Instruction.

Mode 3 Domestic Regulations
7 9

Each company shall publish the material related party policy at its website.

Mode 3 Domestic Regulations
8 10

Each company shall submit Material RPT Disclosure Report (as stated in Annex 2) to SECM within 5 (five) business days after closure of the relevant material RPT. In addition, listed companies shall publicly disclose this Material RPT Disclosure Report within 3 (three) calendar days after the closure of the transaction.

Mode 3 Domestic Regulations
9 11

Each company shall report to its shareholders in its annual report on its material related party transactions. At a minimum, the annual reports should include:

i) Complete name of the related party;

ii) Relationship between the company and the party;

iii) Transaction date:

iv) Type and nature of transaction as well as a description of the assets involved;

v) Amount or contract price:

vi) Terms and conditions of the transaction;

vii) Rationale for entering into the transaction; ancl

viii) The required approvals (i.e., names of the Board of directors' approving/ abstaining/voting against).

Mode 3 Domestic Regulations
10 13

No requirements of the Instruction should be interpreted to relieve companies from their obligations to comply with applicable Myanmar accounting standards.

Mode 3 Domestic Regulations