The Board Selection and Nomination Committee (BS & NC) carried out its activities during the year within the scope of its Terms of Reference in conformity with the directions of Banking Act Direction No. 12 of 2007 on Corporate Governance for Licensed Specialized Banks in Sri Lanka (as amended) and the Code of Best Practices on Corporate Governance (2017) jointly issued by the Securities and Exchange Commission of Sri Lanka (SEC) and The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka).

Composition of the BS & NC

The Board Selection and Nomination Committee comprises four (04) Non- Executive, Independent Directors appointed by the Board of Directors of the Bank. During the year, 2022 the following Directors served on the BS & NC:

• Ms Dinithi Ratnayake – Chairperson (BS & NC), Independent, Non-Executive Director
• Prof Sampath Amaratunge – Independent, Non-Executive Director
• Mr Chaaminda Kumarasiri – Independent, Non-Executive Director
• Mr Thusantha Wijemanna - Independent, Non-Executive Director

Mr Lakshman Abeysekera – Independent, Non-Executive Director served as the Chairman of the BS&NC until retired from the Board on 29.04.2022.

The Company Secretary functions as the Secretary to the BS & NC.

Primary Objectives of the BS & NC

The BS & NC was established to assist the Board of Directors in fulfilling its role and responsibilities with regard to the selection and appointment of Independent Directors, election and re-election of Non- Independent Directors, and appointment of Chief Executive Officer and other Key Management Personnel of the Bank.

Responsibilities of the BS & NC

The BS & NC is responsible for reviewing the composition of the Board and Board Subcommittees with a view to ensuring that they are properly constituted and well-balanced in terms of experience, expertise, skills, and diversity. Further, the BS & NC is mandated:

• To ensure the implementation of the Board approved policy and procedure in the selection and nominations of new Directors and Key Management Personnel of the Bank and to make recommendations regarding such appointments.
• To recommend the re-appointment/ re-election of current Directors considering the performance and contribution made by such Directors towards the overall discharge of responsibilities of the Board.
• To review and determine the criteria such as qualifications, experience, and key attributes, required for the eligibility for appointment of CEO and appointment/promotion for other Key Management Positions.
• To ensure that the Directors, CEO, and other Key Management Personnel are fit and proper persons to hold such positions as required by the Banking Act and applicable statutes.
• To consider from time to time the requirement of additional/ new skills and expertise at the Board level and make a suitable recommendation to the Board, to mobilize such skills and expertise.
• To put in place a proper succession plan for retiring Directors and Key Management Personnel with a view to ensuring the uninterrupted and smooth functioning of all aspects of the Bank’s operations and decision-making process in the long run and business continuing in unforeseen situations.

The Terms of Reference of the Board Selection and Nomination Committee was adopted by the Board in 2012 and it was further reviewed and refined in 2022.

Meetings of the BS & NC and Its Effectiveness

The Committee met twelve (12) times during the year under review and it focused mainly on the following:

• Board composition – Identified the skills required and recommended the appointment of three new Directors with expertise in Finance, Banking, Credit, , IT, and Management aspects.
• Re-election of Directors – The Board Selection and Nomination Committee assessed the contribution made by the Directors who were retiring by rotation and made its recommendation to the Board to be submitted for re-election, by the shareholders at the AGM. Board Selection and Nomination Committee also recommended suitable Directors to fill the vacancies in place of retiring Directors.
• Filling the skills gaps in the Key Management Team – The Board Selection and Nomination Committee continuously reviewed the required skills and experience at the Top Management level and made recommendations to the Board with regard to the appointment of Key Management Personnel.
• Recruitments/ Service confirmation - During the period under review, BS&NC made recommendation to the Board to recruit, DGM-Finance & Planning /CFO and CEO and also service confirmations of DCEO, CIO and CISO.
• Succession Plan – BS&NC proposed the Management to identify on Critical Role and Succession Plan. During the year under review BS&NC examined and made recommendation to the Board on Critical Role & Succession Plan.
• Job grading – Parallel to the job evaluation and grading exercise carried out, the Board Selection and Nomination Committee reviewed position of Head of Recoveries and made recommendations to the Board that Head of Recoveries be promoted to the grade of Chief Manager. BS&NC made recommendation to the Board, for Head of Branch Operation be promoted AGM grade and designate him as Head of Branch Banking.

For and on behalf of the Board Selection and Nomination Committee,

Dinithi Ratnayake
Chairperson
Board Selection and Nomination Committee

12 April 2023
Colombo, Sri Lanka