Sampath Bank Annual Report 2023-24

The BTC supported the Bank's strategic growth initiatives throughout the year, demonstrating exceptional expertise and precision in navigating a dynamic market environment, while providing guidance to the capitalisation of opportunities presented by the appreciation of Sri Lankan Rupee against a basket of global currencies.

Hiran Cabraal

Chairman

Regular attendees to the Committee meetings by invitation:

Members of the Treasury Department
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.

FORMATION OF THE COMMITTEE

The Board Treasury Committee (BTC) was established on 31st May 2012 to guide the Treasury Department in fulfilling its responsibilities aligned with the Bank's goals of performance, profitability and growth. The BTC is responsible for assessing market developments and the country's economic outlook, ensuring informed decision-making by monitoring various market risk factors.

COMMITTEE MEMBERSHIP DURING THE YEAR 2024

Board Member	Directorship Status	Membership Status	Attendance (Attended/Eligible to Attend)
Mr Hiran Cabraal	Independent/Non-Executive	Chairman (w.e.f 1st June 2024)	5/5
Mr Dilip de S Wijeyeratne	Independent/Non-Executive	Member (Chairman until 31st May 2024)	5/5
Ms Aroshi Nanayakkara	Independent/Non-Executive	Member	5/5
Mr Vajira Kulatilaka	Independent/Non-Executive	Member	5/5
Mr Vinod Hirdaramani	Independent/Non-Executive	Member	3/5
Mrs Ayodhya Iddawela Perera	Executive	Member	5/5

w.e.f - with effect from

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

KEY ACTIVITIES IN 2024

Liquidity Management: Maintained robust liquidity buffers, ensuring compliance with regulatory requirements and safeguarding financial stability.
Interest Rate Risk Management: Successfully navigated a volatile interest rate environment, leveraging on strategies to minimise risks.
Investment Performance: Achieved above budget returns on the Bank's investment portfolio, balancing risk and return in alignment with the Bank's objectives.
Cost of Funds: Reduced funding costs through effective market positioning and relationship management with key financial partners.
Foreign Exchange Risk Management: Delivered significant profits by proactively managing currency exposures amid an appreciating Sri Lankan Rupee, leveraging on market opportunities and robust risk management strategies.
Adoption of the BIS FX Global Code: Successfully implemented the globally recognised framework, strengthening transparency, ethics and best practices in the Bank's foreign exchange operations.
Initiation of the ALM/FTP System: Launched the implementation of an advanced Asset-Liability Management and Funds Transfer Pricing system, addressing a critical long-term requirement to enhance balance sheet management.

KEY RESPONSIBILITIES OF THE COMMITTEE

Reviewing the Bank's Treasury Policy and ensuring it meets with industry's best practices and recommend the same to Board of Directors.
Reviewing and recommending the market and liquidity risk limits requested by the Treasury, to the Board of Directors for their approval and ensure that these limits support the Bank's objectives, business strategies and risk appetite.
Reviewing and recommending the proposals relating to Treasury investments for the consideration and approval of the Board of Directors.

Undertaking an independent effectiveness study of Treasury Front Office (TFO) as deemed necessary to establish if the function has competent personnel, systems and processes to function adequately and efficiently.
Reviewing and approving the Treasury KPIs for the Treasury function and its key personnel.
Reviewing Business Contingency Plans related to the TFO and ensure that these plans are tested frequently and in place.
Reviewing the ALCO minutes and ensure that Treasury related initiatives and risks are properly addressed and discussed.
Ensuring that the Treasury Middle and Back Offices are independent and no conflict of interest exists.
Ensuring all regulatory breaches reported in the CBSL inspection reports and internal control lapses that have been highlighted in the External Auditors/Internal Audit reports have been satisfactorily resolved on a timely basis.
Reviewing and ensuring that the Bank's Liquidity Contingency Plan is in place and is satisfactory.
Reviewing and approving market risk limit breaches after seeking management explanations and confirmations that these have been rectified subsequently.
Performing any other activity within the scope of BTC related activities that is deemed by the members of the Committee to be required to enhance the Treasury function's effectiveness and efficiency.
Reviewing the Terms of Reference of the Committee periodically and ensuring that it reflects the best practices of the industry at all times.

REPORTING TO THE BOARD

The minutes of the Committee meetings were tabled at Board meetings, thereby providing the 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 Treasury Committee,

HIRAN CABRAAL

Chairman - Board Treasury Committee

17th February 2025

Board Treasury Committee Report