Annual Report 2024/2025

ANNUAL REPORT 2024/2025

1. Management Discussion and Analysis 03

2. Profile of the Board of Directors 04

3. Risk Management 08

4. Annual Report of The Board of Directors on The Affairs of The Company 11

5. Corporate Governance 16

6. Audit Committee Report 25

7. Remuneration Committee Report 26

8. Related Party Transactions Review Committee Report 27

9. Nomination And Government Committee Report 29

10. Statement of Directors' Responsibility 31

11. Independent Auditors' Report 32

12. Statement of Financial Position 36

13. Statement of Profit or Loss and Other Comprehensive Income 37

14. Statement of Changes in Equity 38

15. Statement of Cash Flow 39

16. Notes to the Financial Statements 40

17. Shareholders and Investor Information 69

18. Real Estate Portfolio 71

19. Corporate Information 72

20. Notice of Meeting 73

21. Instructions to Participate at the Annual General Meeting (AGM) 74

22. Form of Request 75

23. Note 76

24. Circular to Shareholders 78

25. Form of Proxy 79

MANAGEMENT DISCUSSION AND

We are pleased to present to you the highlights of the Annual Report and Financial Statements of Bansei Royal Resorts Hikkaduwa PLC for the year ended 31 March 2025.

Coral Rock by Bansei, in Hikkaduwa, Sri Lanka is a popular destination down-south, for both local, and international guests. We have 14 Deluxe, and 2 Supper Deluxe rooms overlooking the Hikkaduwa beach. We have 14 Standard rooms with delightful views of the city. Our full-length swimming pool; complete with a pool side bar, is just steps away from the beautiful beach, extending out towards the ocean. Our restaurant serves the best of regional culinary delights. At Coral Rock by Bansei, we offer a unique hospitality experience, giving you the opportunity to experience the contemporary best of a star classed hotel, in Hikkaduwa, Sri Lanka.

The Company recorded a strong growth in performance, driven by both an increase in occupancy and room rates on the back of an increase in tourist arrivals to the country. Revenue per available room (RevPAR) noted an improvement against the comparative period in line with the growth in occupancies.

For the financial year ended 31st March 2025, revenue grew by 20% to LKR 140 million, while profit from operations increased by 30% to LKR 20 million. Most notably, net profit was LKR 21 million. These achievements are a testament to the discipline of our leadership, the energy of our teams, and the loyalty of our guests and partners.

Bansei Royal Resorts Hikkaduwa PLC continued its steady recovery, building on the strong foundation laid in the previous year, and moving ahead with renewed purpose and confidence.

THE GLOBAL ECONOMY

The year 2024 was characterized by cautious growth, declining inflation, and regional divergences. The global economy's ability to navigate these challenges will set the stage for future economic trends and the overall health of the world's financial systems.

The world economy experienced a growth rate of approximately 2.8%, slightly lower than the previous year's 3.0%, as reported by the World Economic Outlook published by the IMF. This modest growth was unevenly distributed across regions, with advanced economies facing more significant hurdles compared to emerging markets and developing economies.

GLOBAL TOURISM

The year has been marked by a strong recovery trajectory for global tourism, driven by consumer confidence and the reopening of borders. The industry's adaptability

to changing travel patterns and its response to global challenges will continue to shape its success in the forthcoming years. As we look ahead, the full recovery of global tourism appears within reach, promising renewed opportunities for destinations worldwide.

SRI LANKA ECONOMY

The Sri Lankan economy demonstrated a stronger-than-anticipated recovery in 2024, underpinned by robust macroeconomic performance and improved fundamentals that support a sustained growth trajectory.

The Central Bank of Sri Lanka adopted a single policy interest rate framework, enhancing transparency and policy effectiveness. As inflationary pressures eased, interest rates were gradually lowered, which helped stimulate credit growth and investment without destabilizing the economy.

SRI LANKAN TOURISM

Tourism continues to be a key driver of Sri Lanka's macroeconomic recovery and highest foreign exchange earners and a key employment generator, the sector stands to benefit from supportive domestic policies and favourable global travel trends.

A key opportunity for Sri Lanka lies in the robust economic expansion in India, which is expected to drive outbound travel, supported by the country's geographic proximity and increasing flight connectivity to Sri Lanka. Additionally, tourist arrivals from Middle Eastern markets continue to show encouraging growth momentum.

In 2024, Sri Lanka's tourism sector experienced a strong resurgence, marking a significant milestone in its post-crisis recovery. The country welcomed approximately 2.1 million international tourists, reflecting a 38% increase compared to 2023. This growth was driven by improved global travel conditions, strategic marketing campaigns, and enhanced air connectivity.

CONCLUSION

We truly believe we have the opportunity to shape a future for tourism in Sri Lanka that is not only economically empowering for our nation and its people, but also deeply respectful of our natural heritage and cultural identity.

We also wish to convey our appreciation to our management team, to all our stakeholders including our tour partners and staff for their untiring effort, commitment and drive.

Chairman Independent/Non-Executive Director

Deputy Chairman Non-Executive Director

Mr. Warnakulasooriya holds a degree in Management Information Systems with a minor in Computer Science from the University of Alabama, USA. He is also a Graduate of the Sri Lanka Institute of Directors.

He began his career in IT, in the United States, where he gained valuable experience before returning to Sri Lanka after seven years to assume the role of Managing Director at Midaya Ceramic Company Pvt. Ltd.

Over the past 20 years, Mr. Warnakulasooriya has played a pivotal role in redefining Midaya's business strategy, shifting the focus from mass production of medium-value ceramics to the creation of high-value, handmade ceramics targeting niche export markets. His visionary leadership has been instrumental in the company's transformation and success.

In addition to his role at Midaya, Mr. Warnakulasooriya is the Managing Director of MYS Lanka Pvt. Ltd., a company he founded 12 years ago, specializing in the printing and export of ceramic transfers. He also serves as a Director at Midaya Packaging Industries Pvt. Ltd., a manufacturer of corrugated cardboard and gift boxes. He also serves as the President of the National Chamber of Commerce in Sri Lanka. He is the immediate Past President of the Sri Lanka Ceramics and Glass Council and the past chairman of the Advisory Committee for the Ceramics, Porcelain, Tile & Granite Industry Sector under the Ministry of Industries.

An active Rotarian, Mr. Warnakulasooriya is a past president of the Rotary Club of Colombo Regency, where he continues to contribute to the community.

Mr. Toyohiko Murakami is the Chief Executive of Bansei Group Japan. Mr. Murakami has over 37 years of experience in managing various business fields consisting of Securities, Finance, Insurance, and Real Estate. Mr. Murakami has a degree in Bachelor of Law from Kyoto University, Japan. Mr. Murakami joined Bansei Securities Co. Ltd. in November 2005.

He was appointed to Executive Vice President in February 2006 and to President and C.E.O of the Company in June 2009. He is also the CEO of Bansei Holdings Co., Bansei Hoken (Insurance) Community Co. Ltd, Bansei Ayuryveda Co. Ltd, Bansei Research Institute Co. Ltd, Bansei Sho Co. Ltd., Ceylontime Co. Ltd in Bansei Group Japan.Formerly Mr. Murakami was Advisor with Zenkoku Hosho Co., Ltd from November 2005 to February 2006 and Director of H.

S. Securities Co., Ltd from June 2002 to August 2005.In Sri Lanka, Mr. Murakami serves as a Director of Bansei Holding LK (Pvt) Ltd, Bansei Securities Capital (Pvt) Ltd, Bentota Club Villa (Pvt) Ltd.

Mr. Murakami was appointed to the Board on 30th June 2013.

Mr. H. Ota

Director/Chief Executive Officer

Mr. N. Hobo

Non-Independent/Non-Executive Director

Mr. Ota is the Managing Director of Bansei Securities Co. Ltd., and counts over 37 years of experience in finance business (Commercial Banking, Trust Banking, Lease Finance, Securities Business). Mr. Ota has a Bachelor of Law from Kyoto University, Japan.

He joined Bansei Securities Co. as a Managing Director in November 2014. He has supported Mr. Toyohiko Murakami who is the Chief Executive of Bansei Group to transfer the Company to be strong and profitable. He is a director of Pan Asia Banking Corporation. He is known as the man who has bridged Sri Lanka and Japan in Financial Business.

Formerly he worked for The Long-Term Credit Bank of Japan (April 1982- September 2000) and Sumitomo Trust & Banking Co. Ltd (October 2000 - September 2011) and Ricoh Co. Ltd (October 2011-October 2014).

Mr. Ota was appointed to the Board on 12th March 2015.

Mr. Hobo is a non-executive director of Bansei Holdings with extensive experience in foreign affairs. He currently serves as a Senior Fellow at the GRIPS Alliance, National Graduate Institute for Policy Studies (GRIPS), and has been a professor at GRIPS since 2015.

Before joining GRIPS, Mr. Hobo was Japan's Ambassador to Sri Lanka (2011 - 2015). His previous posts include Senior Vice-President of the Japan International Cooperation Agency (JICA, 2010 - 2011) and Consul-General of Japan in Sydney, Australia (2007 - 2010). He has also held several senior positions within the Ministry of Foreign Affairs of Japan.

In 2015, Mr. Hobo was awarded the Order of the Sacred Treasure, Gold Rays with Neck Ribbon, for his distinguished public service.

He holds a degree in forestry from Hokkaido University, Japan.

Mr. R. S. V. Dharmapala

Independent/ Non-Executive Director

Vipula Dharmapala is the Co-Founder and CEO of InsureMe Sri Lanka, the country's leading insurance aggregator. He also serves as Co-Founder of Digital Services Global (Pvt) Ltd (Digis), a technology company delivering innovative digital solutions to organizations in Sri Lanka and across international markets. In addition, Vipula is a Director at Smiles Global (Pvt) Ltd, an actuarial and financial consulting firm providing specialized advisory services.

In his previous roles, Vipula served as the Chief Financial Officer (CFO) at HNB Assurance PLC and HNB General Insurance Ltd. Before taking on these leadership positions, he gained extensive experience as a Manager in Audit and Assurance at Ernst & Young, working across both Sri Lanka and Singapore.

A Chartered Accountant and member of CA Sri Lanka, Vipula holds a Bachelor's degree in Business Administration (Hons) from the University of Sri Jayewardenepura, Sri Lanka.

Mr. C. L. Godamanna

Independent/Non-Executive Director

With his early education at Royal College, Colombo, Mr. Chamika Godamanna is an accomplished entrepreneur, CIMA (Chartered Institute of Management Accountancy, UK) qualified, holds a MSc in Information Technology from Keele University, UK, and has completed executive education in Data Science and Analytics at the University of California Berkeley Haas School of Business.

Beginning his career with Ninehearts Group, where he continues to serve as Managing Director, he has since founded and led multiple successful companies, covering the areas of digital printing, document imaging, software development, retail, and mobile device value chain solutions.

Beyond his professional pursuits, Chamika has been actively involved in voluntary roles, serving as the Asia Pacific Chairman and International Secretary for Round Table International, as Executive Committee Member of the Sri Lanka Association of Printers and currently serves as the Honorary Treasurer of The National Chamber of Commerce of Sri Lanka.

Dr. R. D. R. Perera

Independent/Non-Executive Director

Dr. Dhanushka Perera is a quantitative policy researcher and senior public sector professional with over a decade of experience in economic policy, public finance, and international development. He holds a Ph.D. in Advanced Policy Studies from the National Graduate Institute for Policy Studies (GRIPS) in Tokyo, Japan, where he developed expertise in data-driven policy analysis and institutional reform. Currently, serving as the Director in charge of Air Cargo at Sri Lanka Customs, he leads strategic initiatives to streamline operations, improve compliance, and enhance revenue generation. His previous roles include managing agricultural budgeting at the Department of National Budget and serving as the Treasury Representative on the Board of Directors of Mathurata Plantation Company.

Moreover, Dr. Dhanushka is proficient in Power BI, STATA, and ArcGIS, reflecting his strong analytical orientation. He has served as a Researcher at GRIPS and volunteered as a teacher in Kudanshita, Japan. His earlier experience includes coordinating Japan-funded ODA programs and performing key administrative functions at the Department of External Resources. He also has teaching experience in social science research methods and foundational exposure to banking. His career reflects a unique blend of academic rigour and operational leadership, supporting effective transformation in the public sector.

The Company's risk management strategy is integrated with its sustainability management framework, enabling a holistic approach towards the identification, management and mitigation of risk. Risk Management therefore extends beyond managing the operational and financial risks faced by the Company, to incorporate broader environmental, community, employee, value chain and other non-financial risks related to the triple bottom-line approach of the Company, providing a foundation for productive engagements with internal and external stakeholders.

The Board of Directors bear responsibility for managing risk and have put in place a framework for managing risk. The Audit Committee has oversight responsibility for risk management and report on the same to the Board. The Audit Committee reviews the risk assessments and reports to the Board on matters relating to risk management.

The risk reviews are also a key input into the Company's strategic planning and budgeting processes to ensure alignment

with the forecast risk environment and effective management of resources.

RISK MANAGEMENT FRAMEWORK

Our risk management processes are summarised below

PRINCIPAL RISKS IN 2024/25

The principal risks are those which are assessed to significantly and negatively impact our ability to create value in the short, medium and long term. These risks are identified through the Risk Prio-iritisation and Assessment step of the risk management process, taking in to account the severity of impact and likelihood of occurrence of identified risks. The significant risk areas impacting the company's strategic business objectives and the measures taken to address these risks are discussed below.

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON

THE AFFAIRS

OF THE COMPANY

The Directors of Bansei Royal Resorts Hikkaduwa PLC, present their report together with the Audited Financial Statements for the year ended 31st March 2025.

The Report contains pertinent information and disclosures required under the Companies Act No.07 of 2007, the Listing Rules of the Colombo Stock Exchange, recommended Best Practices of Corporate Governance and the requirements of the Sri Lanka Accounting Standards.

REVIEW OF OPERATIONS & PERFORMANCE

The Annual Review provides an overall assessment of the Company's Operations and Performance during the financial year under review on Pages 03

PRINCIPAL ACTIVITIES

The Company is engaged in the Hotel Industry.

FINANCIAL STATEMENTS

The Financial Statements of the Company are given on Pages 36-39 in the Annual Report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The Directors Responsibilities in compliance with the requirements in preparation of Financial Statements are set out in Page 31

AUDITOR'S REPORT

The Auditor's Report on the Financial Statements is giv-

DIRECTOR'S REMUNERATION

The remuneration paid to the Executive and Non-Executive Directors during the financial year under review is given in Note 23.2 (a) to the Financial Statements.

DIRECTORS & CEO's SHAREHOLDING

The Directors and CEO's Shareholdings at the beginning and end of the Financial year under review are set out below

INTERESTS REGISTER

An interest Register is maintained, in compliance with the Companies act No.07 of 2007. The particulars of the entries made in connection with the General Disclosure in term of Section 192(2) of the Companies act No.07 of 2007 are given in Note 23 under Related Party Transaction.

AUDITORS

The accounts for the year have been audited by M/s. Ernst & Young, Chartered Accountants, who retire and are eligible for re-appointment. The Directors recommend their re-appointment. As far as the Board is aware the Auditors do not have any relationship with the Company other than carrying out the External Audit.

PROPERTY, PLANT AND EQUIPMENT

An analysis of the property, plant and equipment of the Company, additions and disposals made during the year and depreciation charged during the year are set out in Note 06 of the Financial Statement.

Extent, Locations, number of buildings and Valuation of the properties are given in the Statement of Value of Real State on Page 71

DIRECTORATE

The Members of the Board during the financial year under

review were as follows :-

Mr. A Y M Warnakulasooriya - Independent / Non-

Executive Director Mr. T Murakami - Non-Executive Director Mr. H Ota - Executive Director

Dr. R D R Perera - Independent / Non-Executive

Direcotr

Mr. N Hobo - Non-Independent/ Non-Executive Director

Mr. C L Godamanna - Independent/ Non-Executive

Director

Mr. R S V Dharmapala - Independent/ Non-Executive

Director

Mr. T de Zoysa - (Resigned w.e.f 30.09.2024) Mr. G C A De Silva - (Resigned w.e.f 23.09.2024) Mr.J V W Malawana - (Resigned w.e.f 23.09.2024) Mr. C S J Perera - (Resigned w.e.f 30.09.2024)

The Profile of the Board of Directors of the Company are

given in Page 04 to 07

APPOINTMENT OF DIRECTORS

Mr. A Y M Warnakulasooriya and Dr. R D R Perera, were appointed as Independent / Non-Executive Directors of the Company with effect from 30th September 2024 and Mr. A Y M Warnakulasooriya was designated as the Chairman of the Company.

Mr. N Hobo was appointed as a Non-Independent / Non-

Executive Director of the Company with effect from 15th

October 2024

Mr. C L Godamanna was appointed as an Independent / Non-Executive Director of the Company with effect from 31st October 2024

Mr. R S V Dharmapala was appointed as an Independent / Non-Executive Director of the Company with effect from 15th January 2025

RESIGNATION OF DIRECTORS

Mr. G C A De Silva and Mr. J V W Malawana, Non-Executive Directors of the Company resigned from the Board with effect from 23rd September 2024.

Mr. T De Zoysa and Mr. C S J Perera, Independent/ Non-Executive, Directors of the Company resigned from the Board with effect from 30th September 2024.

The Board wishes to place on record their appreciation for the valuable contributions made by the aforesaid Directors during their tenure in office.

RETIREMENT OF DIRECTORS AND THEIR REELECTION

Mr. T Murakami, retires by rotation, in accordance with Article 24(6) of the Articles of Association of the Company, and he is eligible for re-election.

Mr. A Y M Warnakulasooriya, Dr. R D R Perera, Mr. N Hobo, Mr. C L Godamanna and Mr. R S V Dharmapala retire in accordance with Article 24(2) of the Articles of Association of the Company, and are eligible for election.

DECLARATIONS BY INDEPENDENT/NON EXECUTIVE DIRECTORS

Non - Executive/ Independent Directors have submitted signed declarations confirming their independent status in compliance with Rules 7.10.3 of the Colombo stock Exchange.

The Company has complied with the Corporate Governance Rules of the Colombo Stock Exchange.

TURNOVER

The Gross Income of the Company after deducting Turnover Tax and Defense levy was Rs.139,550,469.

ENVIRONMENTAL PROTECTION

The Board of Directors has taken adequate precautions to ensure that the Company does not engage in any activities which could be detrimental to the environment and contravenes Laws and regulations.

TAXATION

The Tax position of the Company is given in Note 18 to the Financial Statements.

STOCK MARKET INFORMATION

Information relating to earnings, dividends, net assets per share and trading price are given on page 01

CORPORATE GOVERNANCE

The Board of Directors place great emphasis on good Corporate Governance practices and principles and ensures that the Company adheres with the codes of Best Practice on Corporate Governance. The compliance of Corporate Governance by the Company is set out on Page 16-24

GOING CONCERN

The Board of Directors of the Company are satisfied that the Company has adequate resources to continue its operations in the foreseeable future. Therefore, the Company continues to adopt a going concern concept in preparing the accounts of the Company

STATED CAPITAL

The Stated Capital of the Company as at 31st March 2025 was Rs.272,280,000/- representing 53,728,000 Ordinary Shares. The structure of the Stated Capital is given in Note

19.2 of the Financial Statement.

CONTRIBUTIONS TO CHARITIES

Charities and the Donations by the Company amounted to Rs.45,000/- No charities were paid to the Organizations approved by the Government.

SHAREHOLDING & PUBLIC HOLDING

As at 28.03.2025 there were 742 Registered Shareholders. The distribution, categories and location of Shareholders are indicated on Page 63 The Public Holding as at the said date was 10% representing 707 Shareholders.

The Company complies with the Minimum Public Holding Requirement Rule 7.13.1 (b) under Option 2 as at 31stMarch 2025 as per the details set out below;

Float Adjusted Market Capitalization - Rs.92,949,440/-Market Capitalization - Rs 929,494,400/-

Public Holding Percentage - 10%

Total Number of Public Shareholders - 707

MAJOR SHAREHOLDINGS

The 20 major Shareholders of the Company as at 31st March 2024 and 31st March 2025 are listed on Page 69

MATERIAL ISSUES PERTAINING TO

EMPLOYEES & INDUSTRIAL RELATIONS

There were no material issues relating to Employees and Industrial Relations during the year ended 31st March 2025.

STATUTORY PAYMENTS

The Directors, to the best of their knowledge and belief are satisfied that all statutory payments have been made up to date or provided for same.

EQUITABLE TREATMENT TO SHAREHOLDERS

The Company has at all times ensured that all Shareholders are treated equitably.

RISK MANAGEMENT

The Board of Directors has structured proper systems and controls to identify probable risk. These systems are periodically evaluated and reviewed by the Board to ensure smooth functioning. Remedial measures also have been implemented to mitigate risk.

INTERNAL CONTROL SYSTEMS

The Board has overall responsibility for the Company's Systems of Internal Control. The Company's internal control and check systems have been designed to provide the Directors with reasonable assurance that the Assets are protected, safeguarded and transactions are authorized thereby ensuring that errors and irregularities are either prevented or detected within a timely period, whilst ensuring that Corporate Governance is properly practiced and adhered to.

DIVIDENDS

The Board of Directors recommends a First & Final Dividend of Rs. 0.30 Per share for the Financial Year 2024/2025. The Directors are confident that the Company would meet the Solvency Test requirement under Section 56(2) of the Companies Act No.07 of 2007, immediately after the proposed Dividend distribution.

POST - BALANCE SHEET EVENTS

Subsequent to the date of the Balance Sheet no circumstance has arisen which require adjustments to the accounts.

ANNUAL GENERAL MEETING

The Annual General Meeting is scheduled to be held on 07th of August, 2025 via virtual link at 11 a.m. The Notice of the meeting is given on Page 73

BY ORDER OF THE BOARD

……………..……………...............

……………..……………...............

Mr. H Ota

Director/ CEO

Mr. A Y M Warnakulasooriya

Director

……………..……………...............

Corporate Arcade Ltd

Company Secretaries

17 July 2025

Bansei Royal Resorts Hikkaduwa PLC (BBRH) continues to be committed to conducting the Company's business ethically and in accordance with high standards of good Corporate Governance.

Set out below is the Corporate Governance practices adopted and practiced by BRRH PLC, against the background of the code of Best Practice on Corporate Governance issued by the Institute of Chartered Accountants of Sri Lanka and the Listing Rules of the Colombo Stock Exchange.

BOARD OF DIRECTORS

Executive Director

Mr. H Ota

Non-Executive Directors

Mr. T Murakami

Non-Executive, Independent Directors

Mr. A Y M Warnakulasooriya Dr. R D R Perera

Mr. R S V Dharmapala Mr. C L Godamanna

Non-Independent Non-Executive, Directors

Mr. N Hobo

RESPONSIBILITIES

The Directors of the Company are responsible for the formulation of Company policy and overall business strategy. The implementation of policy and strategy is done in a framework that requires compliance with applicable laws and regulations as well as establishing best practices in dealing with employees, customers, suppliers and the community at large.

The annual capital expenditure budgets, non-budgeted capital expenditure, the annual budgetd operating statements require Board approval.

COMPANY SECRETARIES

Corporate Arcade Limited functions as Secretaries to the Board.

They ensure that appropriate Board processes are adopted, Board procedures and applicable rules and regulations adhered to and a proper record of all proceedings of Board meetings is maintained.

FINANCIAL REPORTING

The Board of Directors confirm the Financial Statements for the year ended 31st March 2025, of Bansei Royal Resort Hikkaduwa PLC have been prepared in accordance with the Sri Lanka Financial Reporting Standards and the Companies Act No.07 of 2007. The Company has duly complied with all the reporting requirements prescribed by the regulatory authorities including the Colombo Stock Exchange and the Registrar of Companies. Financial Statements of the Company were audited by M/s. Ernst & Young, Chartered Accountants. The Independent Auditors' Report on the Financial Statements for the year ended 31st March 2025 is presented on Page 36-39 of this Annual Report.

SUPPLY OF INFORMATION

Directors are provided with quarterly reports on performance and such other reports and documents as are necessary.

REMUNERATION COMMITTEE

The Remuneration Committee was reconstituted consequent to the change of Directorate. As at the date of this Report, the Committee comprised of Dr. R D Ravilal Perera, Mr. Anura Y M Warnakulasooriya and Mr.C L Godamanna of whom Dr. R D Ravilal Perera functions as the Chairman of the Committee.

The Committee is responsible for evaluating and recommending to the Board the Remuneration Policy and Practices that supports the strategic direction and the objectives of the Company. The remuneration policy of the Company is to attract, motivate and retain high quality executive talent by reference to the corporate goals and objectives resolved by the Board of Directors from time to time.

During the period under review, the Committee continued its responsibility of formulating and recommending to the Board, Remuneration Policy which helped the organization to attract, retain and to motivate its staff taking into consideration Industrial norms.

The Committee is responsible for determining the

Compensation of all the Management Staff.

The Board meets regularly to review performance and forecasts against budgets so as to take decisions in the best interest of the Company.

BOARD BALANCE

The Board comprises of Seven Directors as follows;

• 04 Directors are Non-Executives / independent

• 01 Non-Executive, 01

• 01 Non-Independent / Non-Executive

• 01 Executive

Profiles of the Members of the Board reflect their caliber, the weight, and their views carry in Board deliberations.

BOARD SEATS HELD IN OTHER LISTED SRI LANKAN COMPANIES - N/A BOARD SEATS HELD IN OTHER UNLISTED SRI LANKAN COMPANIES

Mr. A Y M Warnakulasooriya (Chairman)

Midaya Ceramic Company (Pvt) Ltd,MYS Lanka (Pvt) Ltd and Midaya Packaging Industries (Pvt) Ltd.

Mr. T Murakami

Bansei Holding LK (Pvt) Ltd, Bansei Securities Capital (Pvt) Ltd and Bentota Club Villa (Pvt) Ltd.

Mr. H Ota

Bansei Holding LK (Pvt) Ltd, Bansei Securities Capital (Pvt) Ltd and Bentota Club Villa (Pvt) Ltd.

Mr. R S V Dharmapala

InsureMe Insurance Brokers (Pvt) Ltd,Digital Services Global (Pvt) Ltd and Smiles Global (Pvt) Ltd.

Mr. C L Godamanna

Ninehearts (Pvt) Ltd,Ninehearts Imaging (Pvt) Ltd,Ninehearts Color Labs (Pvt) Ltd, Stelacom (Pvt) Ltd,Auradot (Pvt) Ltd,Tradeup Solutions (Pvt) Ltd,Sayura Resorts (Pvt) Ltd and The National Chamber of Commerce of Sri Lanka.

SKILLS AND EXPERIENCE OF THE BOARD

AUDIT COMMITTEE

The Audit Committee was reconstituted consequent to the change of Directorate. As at the date of this Report, the Committee comprised of Mr. R S Vipula Dharmapala, Mr. C L Godamanna, Mr. A Y M Warnakulasooriya and Dr. R D Ravilal Perera of whom Mr. R S Vipula Dharmapala, functions as the Chairman of the Committee.

The Report of the Audit Committee is given on Page 25.

The Members of the Audit Committee decided that the CEO of the Company shall participate at the Audit Committee Meeting whenever he is in the Island and in the instances, he is not, to communicate/ update the CEO the outcome of the meeting.

RELATED PARTY TRANSACTIONS REVIEW COMMITTEE

The Related Party Transactions Review Committee was reconstituted consequent to the change of Directorate. As at the date of this Report, the Committee comprised of Dr. R D Ravilal Perera, Mr. A Y M Warnakulasooriya and Mr. C L Godamanna of whom Dr. R D Ravilal Perera, functions as the Chairman of the Committee.

The Report of the Related Party Transactions Review Committee is given on Page 27

NOMINATION & GOVERNANCE COMMITTEE

A Nomination & Governance Committee was established

w.e.f. 7th October 2024, in compliance with the CSE Listing Rules. As at the date of this Report, the Committee comprise of Dr. R D Ravilal Perera, Mr. Anura Y M Warnakulasooriya and Mr. C L Godamanna of whom Dr. R D Ravilal Perera functions as the Chairman of the

Committee.

POLICIES

The Company has adopted and has in place, in terms of Rule 9.2.1 of the Listing Rules:

1. Policy on the matters relating to the Board of Directors

2. Policy on Board Committees

3. Policy on Corporate Governance, Nominations and Reelection

4. Policy on Remuneration

5. Policy on Internal Code of Business conduct and Ethics for all Directors and employees, including policies on trading in the Entity's listed securities

6. Policy on Risk management and Internal controls

7. Policy on Relations with Shareholders and Investors

8. Policy on Environmental, Social and Governance Sustainability

9. Policy on Control and Management of Company Assets and Shareholder Investments

10. Policy on Corporate Disclosures

11. Policy on Whistleblowing

12. Policy on Anti-Bribery and Corruption

The Company has complied with all requirements in the Listing Rules with regard to the above policies including the Policy on the matters relating to the Board of Directors.

STATEMENT OF COMPLIANCE UNDER SECTION 7.6 OF THE LISTING RULES OF THE COLOMBO STOCK EXCHANGE (CSE) ON ANNUAL REPORT DISCLOSURE