Annual Report 2023/2024

Chairman's Review

On behalf of the Board, I take pleasure in welcoming all the shareholders to the Fortieth Annual General Meeting of the Company and presenting the Annual Report and Audited Financial Statements of the Company for the year ended 31st March, 2024.

The Sri Lankan economy is indicating signs of improved macroeconomic stability with the slight appreciation of the currency, declining inflation, and downward adjustment in market interest rates. The All Share Price Index (ASPI) remained low at the beginning of the financial year and gained nearly 22% by the end of July 2023. This significant gain reinforced by bullish investor sentiment remained till September 2023 and stabilized in the range of 10,500 points thereafter. ASPI ended the year at 11,444.38 (31.03.2023 - 9,301.09), gaining 23.04% in comparison with the previous financial year. It is anticipated that the significant recovery in the economic sector and low interest regime will positively impact the equity market elevating the value of the portfolio of the Company.

During the year under review, the Company recorded a revenue of Rs. 70.3 Million. The Revenue has increased by 38.2% in comparison to the previous year's revenue of Rs. 50.8 Million. This is mainly due to the increase in dividends received by the Company during the year. The profit prior to the fair value adjustment on Financial Assets was Rs. 66.29 Million in comparison to Rs. 36.09 Million in the preceding year.

The Net Asset Value of your Company was Rs.

233.89 per share as against Rs. 203.75 per share in the comparative year. The fair value of quoted investments as at 31st March, 2024 and 31st March, 2023 were Rs. 2.00 Billion and Rs. 1.78 Billion respectively.

V.S.& Associates who will be retiring at the end of this AGM, were appointed as the Auditors on 1st November, 1984 and continued for nearly four decades. On behalf of the Board of Directors I wish to thank them for the valuable views, advice and insight shared with us during this period.

It is with profound regret that I record the demise of Mr. Alagarajah Rajaratnam who served on the Board for nearly three decades. He was appointed to the Board in 1995 and served as Chairman from 2011. He provided leadership and made an enormous contribution to the growth of the Company. We shall all miss his wise counsel, judgement and leadership.

I take this opportunity to thank all the Shareholders for the continued confidence placed in the Company and my colleagues on the Board for their valuable recommendations.

S.D.R. Arupragasam

Chairman

06th August, 2024

Board of Directors

S.D.R.Arudpragasam - Chairman

FCMA (UK)

Mr.S.D.R.Arudpragasam is a Fellow member of the Chartered Institute of Management Accountants (UK). He was appointed to the Board as Deputy Chairman on 12th August, 2011. Having held the position of Deputy Chairman until 31st August, 2023, he was appointed as Chairman of the Company on 1st September, 2023. Further he was appointed Chairman of The Colombo Fort Land & Building PLC (CFLB) with effect from 1st July, 2022. He also holds the position of Chairman of Lankem Ceylon PLC and Chairman / Managing Director of E. B. Creasy & Company PLC in addition to serving on the Boards of other companies within the CFLB Group.

S.Shanmugalingam - Director

Mr.S.Shanmugalingam was appointed to the Board on 01st January, 2004. He has over 27 years experience in Share Trading and the Capital Market and has worked for many years as a Senior Stock broker. He currently functions as an Adviser. He holds a Higher Diploma in Information Technology.

A.M.de S.Jayaratne - Director

B.Sc. (Econ.), FCA

Mr.A.M.de S.Jayaratne was appointed to the Board on 15th July, 2005. He has graduated in Economics and is a Chartered Accountant by profession. He was the former Chairman of Forbes & Walker Ltd., Colombo Stock Exchange, Ceylon Chamber of Commerce and The Finance Commission. He also served as Sri Lanka's High Commissioner in Singapore. He is a Director of several public listed companies.

S.Rajaratnam - Director

B.Sc., CA

Mr.S.Rajaratnam was appointed to the Board on 01st October, 2008. He holds a Bachelor of Science Degree in Business Administration from Boston College, USA and is a Member of the Institute of Chartered Accountants in Australia. He has been associated with overseas companies in the field of finance and currently holds the position of Joint Managing Director of E.B. Creasy & Company PLC amongst other Directorships.

Dr.J.M.Swaminathan - Director

Attorney-at-Law, LLB (Ceylon), LLM, M.Phil.

(Colombo), and LLD (Honoris Causa)

Dr. J.M.Swaminathan was appointed to the Board on 16th October, 2009. He is an Attorney-at-Law with over 60 years of practice and has been appointed a Senior Instructing Attorney-at-Law by His Excellency, the President. He was the former Senior Partner of Messrs. Julius & Creasy. He was a Member of the Office for Reparations Sri Lanka. He has served as a Member of the Law Commission of Sri Lanka and Member of the Council of Legal Education and the Council of the University of Colombo. He is also a Member of the Company Law Advisory Commission and the Intellectual Property Law Advisory Commission. He is the Chairman of the Studies of the Council of Legal Education and also a Consultant at the Institute of Advanced Legal Studies of the Council of Legal Education. He is a Member of the Visiting Faculty of the LLM Course of the University of Colombo. He also serves on the Boards of several public and private companies.

Board of Directors

Amrit Rajaratnam - Director

LLB (Notts.), Barrister-at-Law

Mr. Amrit Rajaratnam was appointed to the Board on 25th March, 2022. He holds a Bachelor's Degree in Law from the University of Nottingham and is a Barrister-at-Law (Lincoln's Inn). He began his career at the Law Firm Julius & Creasy and later joined Lankem Ceylon PLC.

Anushman Rajaratnam - Director

B.Sc. (Hons.), CPA, MBA

Mr. Anushman Rajaratnam was appointed to the Board of Directors of Colombo Fort Investments PLC on 09th June, 2022. He is at present the Group Managing Director of The Colombo Fort Land & Building PLC (CFLB). In addition, he serves on the Board of several subsidiary companies of the CFLB Group. Prior to joining the CFLB Group, he worked overseas for a leading global Accountancy Firm.

P.M.A. Sirimane - Director

FCA, MBA

Mr.P.M.A.Sirimane was appointed to the Board on 07th October, 2022. He is a Fellow of the Institute of Chartered Accountants of Sri Lanka and also holds a Masters in Business Administration from the University of Swinburne, Victoria, Australia. Mr.Sirimane serves on the Board of The Colombo Fort Land

• Building PLC (CFLB) and also serves on the Boards of several subsidiary companies in the CFLB Group. Amongst other senior positions he has functioned as Managing Director/CEO of Mercantile Leasing Ltd., Group Finance Director of United Tractor & Equipment Ltd., Chief
  Finance Officer of Sri Lanka Telecom Ltd., and
  Director of SLT Hong Kong Ltd. He has served as a Member of several Committees of the Institute of Chartered Accountants of Sri Lanka and was an ex-officio member of the International
  Leasing Association.

Colombo Fort Investments PLC is committed to a policy of maintaining the highest standard of accountability in all its business and other activities.

The Company firmly believes that good governance adopted and implemented will strengthen the confidence and trust of all stakeholders.

Board Composition

Currently the Board of Colombo Fort Investments PLC comprises of Eight Non-Executive Directors, of whom three are Independent.

These Directors are named below and their profiles appear on pages 02 and 03.

These Directors have submitted declarations of their Independence or Non-Independence to the Board of Directors.

Mr.A.M.de S.Jayaratne and Dr.J.M.Swaminathan are on Boards of other listed companies, in which a majority of the Directors of the Company are Directors and also serve on the Boards of other listed entities which have significant shareholdings in the Company. Mr.A.M.de S.Jayaratne and Dr. J.M.Swaminathan have served for over a period of nine years on the Board of the Company and are over seventy years of age. However, the Directors having considered the fact that the said Directors are not involved in the Management of the

Company and having taken into consideration all other circumstances listed in the Colombo Stock Exchange Listing Rules pertaining to the "Criteria for Defining Independence" is, of the opinion that Mr. A.M.de S.Jayaratne and Dr.J.M.Swaminathan to be nevertheless Independent.

Mr. P.M.A.Sirimane serves on the Board of other listed companies in which a majority of the Directors of the Company are Directors and also serves on the Board of other listed entities which have significant shareholdings in the Company. Nevertheless having considered the fact that the said Director is not involved in the Management of the Company and having taken into consideration all other circumstances listed in the Colombo Stock Exchange Listing Rules pertaining to the "Criteria for Defining Independence"the Directors are of the opinion that Mr. Sirimane is Independent.

Decision Making of the Board

During the year the Board has met on four occasions. In addition to Board Meetings, matters are referred to the Board and decided by Resolutions in writing.

The attendance at Board meetings had been as follows:

The Directors have made themselves aware of applicable laws, rules and regulations and are aware of changes particularly to the Listing Rules and applicable Capital Market provisions.

Corporate Governance

Fit & Proper Assessment

The Company's fit and proper assessment for Directors is in line with the guidelines set out in the Listing Rules and include criteria on honesty, integrity and reputation, competence and capability and financial soundness. The Chairman and Directors satisfy the fit and proper assessment criteria stipulated in the Listing Rules of the CSE.

Appointment and Re-election of Directors

The Board as a whole decides on the appointment of Directors in accordance with the Articles of Association of the Company and in compliance with the Rules on Governance.

In terms of the Articles of Association a Director appointed by the Board holds office until the next Annual General Meeting, at which he seeks re-election by the shareholders. The Articles require that one of the Directors in office to retire at each Annual General Meeting. The Director to retire, is he who has been longest in office since his last election. A retiring Director is eligible for re-election.

Financial Acumen

The Directors are from varied business and professional backgrounds and have vast experience and proven ability in the field of investment, management and trading in securities. Their expertise enables them to exercise independent judgement and their views carry substantial weight in decision making. The Board includes five finance professionals who possess the necessary knowledge to offer guidance on matters of finance.

If necessary, professional advice is obtained from external independent parties.

The Board is responsible for the proper management of the Company along with monitoring an effective system of internal control covering the financial matters.

Directors - Other Directorships

The details pertaining to the names of the companies (in Sri Lanka) in which the Directors serve as a Director or Key Management Personnel are presented on pages 23 to 29.

Remuneration Committee

The Company does not have any employees nor Executive Directors. The Board comprises of only Non Executive Directors to whom a Director's fee is paid. The fees of the Managers

• Secretaries are approved by the Board of Directors. Consequently the appointment of a Remuneration Committee does not arise.

Audit Committee

The Audit Committee comprises of Mr. A.M.de S. Jayaratne - Chairman (Independent / Non-Executive Director), Dr. J.M.Swaminathan (Independent / Non- Executive Director) and Mr. S. Rajaratnam (Non- Executive Director). The Audit Committee Report is given on pages 37 and 38 of this Report.

Related Party Transactions Review Committee

The Committee comprises of Mr. A.M.de S. Jayaratne

• Chairman (Independent / Non-Executive Director), Dr. J.M.Swaminathan (Independent / Non-Executive
  Director) and Mr. S. Rajaratnam (Non-Executive
  Director). The Related Party Transactions Review Committee Report is given on page 39 of this report.

Managers & Secretaries

The Directors may seek advice from Corporate Managers & Secretaries (Private) Limited, (CMSL) who are qualified to act as Secretaries as per the provisions of the Companies Act No. 07 of 2007. The Company does not employ any staff and all accounting services are provided by CMSL. Proper internal control procedures are adopted within CMSL.

Annual General Meeting / General Meetings

The Board considers the Annual General Meeting / General Meetings an opportunity to communicate with shareholders and encourage their participation.

Compliance with Legal Requirements

The Board strives to ensure that the Company complies with the Laws and Regulations of the country.

Corporate Social Responsibility

Corporate decisions are made with due consideration taking into account the rights and claims of all Non-shareholder Groups.