Annual Report 2024/2025

CAPITAL ALLIANCE PLC

ANNUAL REPORT 2024 - 2025

JUST AS SOUND WAVES MOVE WITH RHYTHM AND ENERGY, BREAKING THROUGH BARRIERS AND GAINING STRENGTH, OUR PERFORMANCE THIS YEAR PUSHED BEYOND CONVENTIONAL BOUNDARIES. EVERY DECISION

AND INNOVATION CARRIED INTENT, EXPANDING REACH AND DEEPENING VALUE ACROSS SRI LANKA’S CAPITAL MARKETS.

AT CAPITAL ALLIANCE PLC, WE DID NOT SETTLE FOR EXPECTATIONS. WE MOVED PAST THEM. BACKED BY A YOUNG, AGILE TEAM AND GUIDED BY TECHNOLOGY, WE INTRODUCED INCLUSIVE FINANCIAL STRATEGIES THAT CONNECTED WITH A WIDE SPECTRUM OF INVESTORS.

OUR EFFORTS WITH THE CENTRAL BANK TO PROMOTE FINANCIAL LITERACY CREATED WIDER AWARENESS AND TRUST, MAKING CAPITAL MARKET ACCESS A RIGHT FOR ALL. THROUGH FORESIGHT AND ETHICAL CONDUCT, WE TURNED CHALLENGES INTO OPPORTUNITIES AND INSIGHT INTO LASTING IMPACT.

THIS REPORT IS A RECORD OF PROGRESS SHAPED BY PURPOSE AND POWERED BY CLARITY. IT REFLECTS A FUTURE WE ARE NOT JUST APPROACHING BUT ACTIVELY SHAPING. WE ARE NOT FOLLOWING THE CURVE. WE ARE REDEFINING IT.

INTRODUCTION TO THE REPORT

GRI 2-1, 2-2, 2-3

The Annual Report includes the Independent Auditors’ Report on the Financial Statements, confirming compliance with all applicable statutory requirements. The Company's Financial Statements were duly certified by the Manager - Finance and endorsed for submission to the Board of Directors by the Board Audit Committee. Subsequently, the Board of Directors approved the financial statements on 29th July 2025.

This report outlines our achievements, challenges, and strategic direction for sustainable growth. As we navigate the evolving business landscape, we remain dedicated to

balancing profitability with purpose, ensuring that our success benefits our investors, employees, communities, and the environment.

We invite all stakeholders to explore our journey over the past year and our aspirations for the future.

We are pleased to present our 4th Annual Report for the period from 1 April 2024 to 31 March 2025, showcasing our commitment to transparency, accountability, and sustainable value creation. This report is prepared in accordance with the principles of Integrated Reporting (IR), providing a comprehensive view of our financial and nonfinancial performance. By integrating financial results with

Environmental, Social, and Governance (ESG) considerations, we aim to demonstrate how our strategy, governance, and business model contribute to long-term value creation for all our stakeholders.

Sustainability remains a key pillar of our operations, and our ESG Reporting highlights our continued efforts to drive environmental responsibility, foster positive social impact, and uphold strong governance practices. Our focus areas include climate action, resource efficiency, social inclusion, ethical business conduct, and regulatory compliance. We

align our initiatives with global frameworks such as the United Nations Sustainable Development Goals (SDGs), reinforcing our commitment to building a resilient and responsible organization.

REPORTING PERIOD AND BOUNDARY GRI 2-3

The report covers the operations of Capital Alliance PLC, hereinafter referred to as the “CALT”. It encompasses the 12-month period from 1 April 2024 to 31 March 2025, aligning with our standard annual reporting cycle. There are

no significant changes in the scope or boundaries compared to previous reporting periods. Any reclassified or restated comparative financial information has been disclosed and explained in the relevant sections.

The Company does not have any subsidiaries, associates, joint ventures, overseas operations, or other business entities. Comprehensive details regarding the Company’s shareholding structure and operations can be found on pages 201-205 and 8-9. Unless explicitly stated otherwise, all discussions of key financial and non-financial aspects pertain solely to the Company.

Digital View

The Annual Report is available on our official website,

https://www.cal.lk

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REPORTING FRAMEWORK

FINANCIAL REPORTING

• The Sri Lanka Financial Reporting Standards (SLFRS) and Sri Lanka Accounting Standards (LKAS) issued by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka)

• Companies Act No. 7 of 2007 and amendments thereto

• Financial Transactions Reporting Act No. 6 of 2006 (FTRA)

• Listing Rules of the Colombo Stock Exchange (CSE)

GOVERNANCE, COMPLIANCE

& RISK REPORTING

• Listing Rules of the Colombo Stock Exchange (CSE) and subsequent revisions to date.

• Securities and Exchange Commission of Sri Lanka (SEC) Act No. 19 of 2021 including Directives and Circulars.

• Code of Best Practices on Corporate Governance (2023) issued by CA

Sri Lanka.

• Guidelines for Presentation of Annual Reports 2025 issued by CA Sri Lanka.

• IFRS Foundation’s International Framework

• A Preparer's Guide to Integrated Corporate Reporting issued by CA Sri Lanka and the Integrated Reporting Council of Sri Lanka (IRCSL).

• Non-Financial Reporting Guidelines issued by CA Sri Lanka.

NARRATIVE REPORTING

• CSE Sustainability Reporting Guide.

• SLFRS S1 - General Requirements for Disclosure of Sustainability-related Financial Information.

• SLFRS S2 - Climate-related Disclosures.

• Sustainable Development Goals (SDGs)

  - The UN initiative with 17 aspirational "Global Goals".

• Gender Parity Reporting Framework issued by CA Sri Lanka.

• The Non-Financial Reporting (NFR) Guidelines issued by CA Sri Lanka

• IFRS Foundation’s International

  Framework

• Consolidated Set of Global Reporting Initiative Sustainability Reporting Standards

SUSTAINABILITY REPORTING

CAPITAL ALLIANCE PLC

INTRODUCTION TO THE REPORT

COMPLIANCE

The presentation of both financial and non-financial information in this report complies with all relevant regulations and guidelines, including those issued by the Central Bank of Sri Lanka, the Companies Act No. 07 of 2007, the Listing Rules of the Colombo Stock Exchange, the Inland Revenue Act of No. 24 of 2017, CA Sri Lanka and all Directives issued by the Securities and Exchange Commission of Sri Lanka.

MATERIALITY

At CALT, we adopt a double materiality approach to assess key financial and non-financial factors impacting our business and the broader economic, social, and environmental landscape. This ensures a comprehensive view of our strategic priorities, risks, and opportunities while reinforcing our commitment to responsible investing and sustainable financial practices.

Our assessment focuses on Financial Materiality, which identifies the factors affecting value creation, such as market volatility, regulatory changes, and financial performance and on the Impact Materiality, which evaluates how our investment decisions and operations influence the environment, communities, and society. By integrating both perspectives, we enhance resilience, transparency, and alignment with stakeholder expectations.

Our structured process includes stakeholder engagement, internal assessments, and compliance with global reporting standards to ensure meaningful and transparent disclosures. Further details on our materiality process and key topics can be found in the Material Matters section on pages 56-63 of this report.

INDEPENDENT ASSURANCE

The Board is responsible for ensuring the integrity of this Annual Report. The Board is of the opinion that the Annual Report comprehensively covers all material issues and presents a balanced and fair account of the Company's performance throughout the financial year.

A combined assurance model is used to provide assurance regarding information acquired from both management and other internal and external sources. The Compliance and Risk Function consistently furnishes the Board with internal

assurance, based on the due diligence procedures conducted to appraise the Company's financial, operational, compliance, risk, and governance controls.

The Company has engaged Messrs. KPMG to obtain an independent assurance in respect of their audit opinion on the financials (Page 150 - 152), Limited Assurance on Integrated Reporting by Messrs. KPMG, Chartered Accountants (Page 208) and Limited Assurance on the specific Sustainability Indicators in the Integrated Annual Report by Messrs. KPMG, Chartered Accountants (page 213) of this Annual Report.

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FORWARD-LOOKING STATEMENTS

Prospective strategies are discussed in pertinent sections of the report, reflecting the Company's perspectives and beliefs at the time of its creation. However, considering the

Company operates within a dynamic environment, where the uncertainties or evolving developments may result in deviations from the actual outcomes or actions outlined in these forward-looking statements, readers are cautioned against regarding such statements as a definitive guarantee of results or the course to be followed.

FEEDBACK AND ENQUIRIES

The Company welcomes your comments, suggestions, and enquiries on this Report.

CONTACT US

Mr. Nishantha Adhikari Vice President - Finance Capital Alliance PLC

Level 5, ‘Millennium House’, 46/58, Nawam Mawatha, Colombo 02,

Sri Lanka.

Tel : (94) 11 2317777

Fax : (94) 11 2317788

E-mail : nishanthaa@cal.lk Web : https://www.cal.lk

NAVIGATING THIS REPORT

The strategic direction and oversight that guide our operations. It features insights from our Chairman and Chief Executive Officer, highlighting our performance, market positioning,

and long-term vision. It also outlines our robust governance framework, Board composition, committee structures, and ethical standards that ensure integrity, accountability, and regulatory compliance in all our dealings as a licensed Primary Dealer. Through strong leadership and sound governance,

we remain committed to creating sustainable value for all stakeholders.

ANNUAL REPORT 2024 | 2025

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In-depth view of our operational and financial performance, risk management practices, and strategic initiatives. It reflects how management navigated market dynamics and regulatory challenges to drive sustainable value creation.

Outlines our commitment to responsible and ethical business practices. It highlights our approach to environmental,

social, and governance (ESG) priorities, and how we contribute to sustainable economic growth while upholding our responsibilities to stakeholders and the wider financial ecosystem.

The audited financial statements and accompanying notes, prepared in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS). It provides a transparent and comprehensive view of our financial position, performance, and compliance for the year

under review.

Our approach to managing financial, human, intellectual, and technological capital. It highlights how we allocate resources, optimize returns, and maintain capital adequacy to support stability, growth, and long-term value creation as a Primary Dealer.

Comprehensive understanding of our operations. It comprises regulatory disclosures, corporate information, a glossary of terms,

and other reference material for stakeholders.

CAPITAL ALLIANCE PLC 6

TABLE OF CONTENTS

Introduction to the Report 2

Navigating this Report 5

About CALT 8

Strategic Journey 10

Awards and Accolades 11

Management Structure 14

Financial Highlights 16

Economic Value-Added Statement 18

Business Model 46

Snapshot of Our Capital Position

and Strategic Outcomes 48

Stakeholder Engagement 51

Materiality Assessment 56

Operating Context and Our Responses 64

Our Strategy and Strategic Imperatives 66

Strategy and Resource Allocation 68

Our Approach towards

Sustainable Development 74

Value Creation Supported by

Our ESG Framework 78

Operating Landscape 80

Financial Capital 84

Manufactured Capital 87

Intellectual Capital 89

Human Capital 93

Social and Relationship Capital 99

Natural Capital 102

Chairman’s Message 20

Chief Executive Officer’s Review22

Board of Directors 24

Heads of Departments 29

Risk Management 32

Risk Management Matrix 37

Annual Report of the Board of Directors 41

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ANNUAL REPORT 2024 | 2025

Audit Committee Report

Related Party Transactions Review Committee Report

Risk Committee Report 143

Nomination & Governance Committee Report 144

Remuneration Committee Report 145

Statement of Directors’

Responsibility 146

Responsibility Statement of Chairman, Chief Executive Officer

and Manager Finance 147

Statement of Cash Flows 156

Notes to the Financial

Statements 157

Sustainability Reporting 213

Basis of Ratios 216

Glossary of Financial

Terminology 217

Alphabetical Index 221

Notice of Meetings 222

Form of Proxy 223

Corporate Information IBC

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CAPITAL ALLIANCE PLC

ABOUT CALT

Capital Alliance PLC (CALT) began its journey as a debt dealer in 2000 and was recognized as an Authorized Primary Dealer by the Central Bank of Sri Lanka in 2003. On 15th December 2021, CALT achieved a significant milestone by being officially listed on the Colombo Stock Exchange (CSE).

Leveraging 24 years of expertise, Capital Alliance Holdings Group (CAL Group) has established itself as a premier Investment Banking Group in Sri Lanka. CALT operates as a subsidiary of Capital Alliance Holdings PLC (CAL Group).

CALT forms the government securities trading function of the Group and is acknowledged by the Central Bank of Sri Lanka as one of the five non-bank Primary Dealers in the country. CALT primarily focuses on trading government securities, with its business activities regulated by the Central Bank of Sri Lanka. Its operations are strictly limited to those specified in Schedule III of the Registered Stock and Securities (Primary Dealers) Regulations No. 01 of 2009, as amended from time to time.

PRIMARY DEALING IN GOVERNMENT SECURITIES

• Treasury Bills

• Treasury Bonds

  SECONDARY MARKET TRADING IN GOVERNMENT SECURITIES

• Treasury Bills

• Treasury Bonds

• Repurchase and Reverse Repurchase Agreements on Government Securities

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ANNUAL REPORT 2024 | 2025

DYNAMISM

TEAMWORK

MISSION

"To foster the development of capital markets as an efficient alternative to fulfil the banking needs of our customers"

VISION

"To be the leading capital markets solutions provider in frontier markets"

INTEGRITY

FAIRNESS

We hire for attitude and reward performance

We only sell to our clients what we would sell to our family

We are a star team, not a team of stars.

We are always only two years from irrelevance.

CAPITAL ALLIANCE PLC 10

STRATEGIC JOURNEY

Over the past 24 years, CALT has grown from a visionary startup into a leading force in the investment banking sector. Our journey has been defined by resilience, innovation, and an unwavering commitment to excellence-shaping the financial landscape and creating lasting value for our clients and stakeholders. Founded in October 2000 as an institutional fixed-income dealer, CALT

has grown into a leading non-banking primary dealer in the country. In December 2021, CALT was listed on the Colombo Stock Exchange.

MILESTONES THAT DEFINE US

Started operations as 'Capital Markets Ltd.' Subsidiary of Asia Capital Limited for secondary dealing in Government Securities.

Appointed as a Primary Dealer for Government Securities by the Central Bank of Sri Lanka.

Name changed to 'Capital Alliance Limited'

Successfully navigated through Covid without a single day's downtime across all operations

Completion of 20 years in the market

Listed on the Colombo Stock Exchange in

December 2021.

Launched the new CAL brand identity.

Achieved the largest fixed income securities portfolio size to date, surpassing LKR 100 Bn, reflecting strong market positioning and

strategic portfolio growth.

Achieved the highest ever PAT of LKR 13.9 Bn. and Total Assets of LKR 61 Bn.

Market capitalization of LKR 17 Bn.

A FUTURE OF ENDLESS POSSIBILITIES

As CALT celebrates this remarkable milestone, we remain committed to innovation, sustainable growth, and financial excellence. With a strong foundation built over twenty-four years, we are poised to lead the industry into the future - creating new opportunities, empowering businesses, and driving economic progress. Our journey is far from over, and we look forward to the next chapter of success with our clients, partners, and stakeholders by our side.

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AWARDS AND ACCOLADES

ANNUAL REPORT 2024 | 2025

As we celebrate 24 years of excellence in the financial sector, we take immense pride in the recognition we have received for our unwavering commitment to innovation, integrity, and customer-centric solutions. Our dedication to setting industry benchmarks has been acknowledged through numerous prestigious awards over the years, reinforcing our position as a leading investment bank.

These accolades stand as a testament to the hard work and dedication of our team, the trust of our clients, and our unwavering pursuit of excellence. As we move forward, we remain committed to setting new industry standards and driving sustainable growth in the financial sector.

HIGHLIGHTS OF FY 2024/25:

• Most Respected Entities in Sri Lanka for Sector Winner –Investment Banking from LMD

• Great Place to Work – March 2024 to March 2025

  CAPITAL ALLIANCE PLC 12

  AWARDS AND ACCOLADES

• Silver Partner for 2024/2025 by CFA Society Sri Lanka

• AAT Affiliated Training Partner Recognition ⚫ Certificate of Recognition from LankaPay

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  PAST RECOGNITIONS:

• AICPA & CIMA Training Partner ⚫ Top 20 Employers for 2022 by CFA Society Sri Lanka

  ANNUAL REPORT AWARDS

• 2022 - Emerging Listed Companies Compliance Award (Capital Alliance PLC)

  BRAND FINANCE - THE MOST VALUABLE AND STRONGEST SRI LANKAN BRANDS 2023

• Top 100 most valuable Sri Lankan brands

CAPITAL ALLIANCE PLC 14

CAPITAL ALLIANCE PLC

BOARD OF DIRECTORS

Mr. L. H. S. L. Silva

Treasury

Senior Vice President -Head of Treasury**

Mr. A. D. Rayen

Fixed Income Sales

Vice President -Head of Fixed Income Sales

Mr. W. A. T. Fernando Capital Alliance PLC CEO*/ Director

AUDIT COMMITTEE

NOMINATION & GOVERNANCE COMMITTEE

MANAGEMENT STRUCTURE

* w.e.f. 11th April 2025, Mr. W. A. T. Fernando had stepped down as Chief Executive Officer and continues to serve on the Board.

** w.e.f. 11th April 2025, Mr. L. H. S. L. Silva was appointed as the CEO of the Company.

RISK COMMITTEE

REMUNERATION COMMITTEE

RELATED PARTY TRANSACTIONS REVIEW COMMITTEE

Ms. H. M. S. Perera

Compliance & Risk

Chief Risk & Compliance Officer

Mr. A. M. N. Adhikari

Finance

Vice President - Finance

Ms. S. C. Goonesekera

Finance

Manager - Finance

Mr. H. A. T. Migara

Operations

Senior Manager - Operations

Ms. A. Jayasinghe

Human Resources

Chief Human Resources Officer

Mr. T. Kulasinghe

Group IT/ Finnovation

Chief Information Officer

Mr. R. M. L. R. Rathnayake

Customer Support

Manager - Customer Experience Centre

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Net Interest Income

Rs. Mn 4,000

Net Gain/ (Loss) on Trading

Rs. Mn 20,000

Profit After Tax

Rs. Mn 14,000

3,500

12,000

3,000

15,000

10,000

2,500

2,000

1,500

1,000

10,000

5,000

8,000

6,000

4,000

500

0

2024 2025

0

2024 2025

2,000

0

2024 2025

Total Assets

Rs. Mn 120,000

Total Liabilities

Rs. Mn 100,000

Total Equity

Rs. Mn 20,000

100,000

80,000

80,000

60,000

15,000

60,000 10,000

40,000

40,000

20,000

20,000

5,000

0

2024 2025

0

2024 2025

0

2024 2025

CAPITAL ALLIANCE PLC 18

ECONOMIC VALUE-ADDED STATEMENT

Economic value-added statement is provided with the aim of disclosing value creation and value distribution of the Company among its key stakeholders.

Distribution of Value Added

Rs. Mn

Retained for the Future

To Society To Employees To Shareholders To Operations To Clients

To Government Total Value Created

-5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000