Audited Financial Report 31.3.2025

We have audited the financial statements of Millennium Housing Developers PLC ("the Company") and the consolidated financial statements of the Company and its subsidiaries ("the Group"), which comprise the statement of financial position as at 31stMarch 2025, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policies and other explanatory information.

In our opinion, the accompanying financial statements of the Company and the Group give a true and fair view of the financial position of the Company and the Group as of 31stMarch 2025, and of their financial performances and their cash flows for the year then ended in accordance with Sri Lanka Accounting Standards.

We conducted our audit in accordance with Sri Lanka Auditing Standards (SLAuSs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics for professional Accountants issued by CA Sri Lanka (Code of Ethics), and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We draw attention to Note 34 of the financial statements, which indicates that the Company's current liabilities have exceeded its current assets by Rs. 72,075,726/-and reported accumulated losses of Rs. 121,171,219/- as at 31stMarch 2025. Further, as stated in Note 22 the Group has not been able to comply with loan covenants for which recovery actions were undertaken by lender. In addition, the subsidiaries have not engaged in any continuing revenue-generating projects during the year ended 31stMarch 2025 and the subsequent period up to the date of signing these financial statements. As stated in Note 34, these events or conditions, along with other matters as set forth in Note 35, indicate that a material uncertainty exists that may cast significant doubt on the Company's and the Group's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

KPMG, a Sri Lankan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

C. P. Jayatilake FCA Ms. S. Joseph FCA

R.M.D.B. Rajapakse FCA

M.N.M. Shameel FCA

Ms. P.M.K. Sumanasekara FCA

T. J. S. Rajakarier FCA

W. K. D. C. Abeyrathne FCA Ms. B.K.D.T.N. Rodrigo FCA Ms. C.T.K.N. Perera ACA

R. G. H. Raddella ACA

W. W. J. C. Perera FCA

G. A. U. Karunaratne FCA

R. H. Rajan FCA

A.M.R.P. Alahakoon ACA

Principals: S.R.I. Perera FCMA (UK), LLB, Attorney-at-Law, H.S. Goonewardene ACA, Ms. F.R Ziyard FCMA (UK), FCIT,

K. Somasundaram ACMA (UK), Ms. D Corea Dharmaratne

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company financial statements and the Consolidated financial statements of the current period. These matters were addressed in the context of our audit of the Company financial statements and the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor's report thereon. The annual report is expected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's and the Group's financial reporting process.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SLAuSs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SLAuSs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company and the Group's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

As required by section 163 (2) of the Companies Act No. 07 of 2007, we have obtained all the information and explanations that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the Company.

CA Sri Lanka membership number of the engagement partner responsible for signing this independent Auditor's Report is 3544.

Colombo, Sri Lanka 29thAugust 2025

For the year ended 31st March 2025 2024 2025 2024

Related tax on re-measurement of defined benefit liability

Net change in fair value of financial assets - FVOCI

The notes form an integral part of these financial statements. Figures in brackets indicate deductions

It is certified that the Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 7 of 2007.

The Board of Directors is responsible for the preparation and presentation of these Financial Statements.

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Chairman

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Director

For the year ended 31st March 2025

The notes form an integral part of these financial statements. Figures in brackets indicate deductions

5

The Notes to the Financial Statements form an integral part of these Financial Statements. Figures in brackets indicate deductions.

1. Corporate Information
   1. Domicile and legal form

      Millennium Housing Developers PLC (the Company) is a public listed company incorporated and domiciled in Sri Lanka. The registered office and principal place of business of the Company and the subsidiaries is situated at No. 66/9B, Green Path, Colombo 7.

      The Consolidated Financial Statements of Millennium Housing Developers PLC for the year ended 31stMarch 2025 comprises the Company and its subsidiaries (together referred to as "Group").All the subsidiaries of the Group are limited liability companies, incorporated and domiciled in Sri Lanka.

   2. Principal activities and nature of operation

      The principal activities of the Company and its subsidiaries are construction and sale of constructed houses, land sales and selling apartments.

   3. Parent company and ultimate parent company

      The Company does not have an identifiable parent on its own. The Company is the ultimate parent of the Group. Ceyoka (Pvt) Limited holds more than 28% of stated capital.

2. Basis of preparation
   1. Statement of compliance

      The consolidated financial statements and the separate financial statements comprise the statements of profit or loss and other comprehensive income, financial position, changes in equity, and cash flows, together with the accounting policies and notes to the financial statements. The financial statements have been prepared in accordance with the Sri Lanka Accounting Standards (herein referred to as LKASs and SLFRSs), laid down by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and in compliance with the requirements of the Companies Act No. 07 of 2007.

   2. Responsibility of financial statements

      The Board of Directors is responsible for the preparation and presentation of these financial statements of the Group as per the provisions of the Companies Act No.07 of 2007 and the Sri Lanka Accounting Standards (SLFRSs and LKASs).

   3. Approval of Financial Statements by Directors

      The consolidated financial statements for the year ended 31stMarch 2025 were authorized for issue by the Directors on 29thAugust 2025.

   4. Basis of measurement

      The Financial Statements of the Group/Company are prepared and presented on the historical cost basis except for the following material items in the Statement of Financial Position.

      • Employee defined benefit obligation is measured based on actuarial valuation in accordance with LKAS 19.

      • Financial assets and financial liabilities that have been measured at fair value in accordance with SLFRS 9.

1. Basis of preparation (continued)
   1. Basis of measurement (continued)

      • Investment property that has been measured at fair value in accordance with LKAS 40.

   2. Functional and presentation currency

      The Consolidated Financial Statements are presented in Sri Lankan Rupees, which is the currency of the primary economic environment in which the reporting entity operates. Each entry of the Group/Company uses the currency of the primary economic environment in which it operates as its functional currency.

   3. Accounting judgements, estimates and assumptions.

      The preparation of the Financial Statements of the Group/Company in conformity with Sri Lanka Accounting Standards (SLFRS and LKAS) requires Management to make judgements, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

      Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the Financial Statements are included in the respective Notes.

      Judgements, estimates, and assumptions made by Management in preparing of these Financial Statements are described in following Notes:

      Accounting policies Note

      Revenue recognition 3.10.1

      Impairment of financial assets 3.2

      Current tax and deferred tax 3.10.6

      Useful time of property, plant and equipment Investment property

      3.4.4

      3.6

      Intangible assets 3.5

      Employee benefits Going concern Impairment of inventory

      3.8

      34

      3.7

   4. Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/noncurrent classification.

An asset is current when it is expected to be realized or intended to be sold or consumed in the normal operating cycle and held primarily for the purpose of trading.

Or

1. Basis of preparation (Continued)
   1. Current versus non-current classification (Continued)

      Is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

      All other assets are classified as non-current.

      A liability is current when it is expected to be settled in the normal operating cycle and is held primarily for the purpose of trading and is due to be settled within twelve months after the reporting period.

      Or

      There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

      The Group classifies all other liabilities as non-current.

   2. Use of materiality and aggregation

      Each material class of similar items is presented separately in the financial statements. Items of dissimilar nature or function are presented separately unless they are immaterial as permitted by the Sri Lanka Accounting Standard - LKAS 1 on 'Presentation of Financial Statements'.

      Notes to the financial statements are presented in a systematic manner which ensures the understandability and comparability.

      of financial statements of the Group and the Company. Understandability of the financial statement is not compromised by obscuring material information with immaterial information or by aggregating material items that have different natures or functions.

   3. Fair value measurement

"Fair value" is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group/ Company has access at that date. The fair value of a liability reflects its non- performance risk.

The Group/Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted pricing in an active market, then the Group/Company uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. The fair value of an asset or a liability is measured using the assumptions that market participants would use the fair value hierarchy when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Group/Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred. A fair value measurement of a nonfinancial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. External professional valuers are involved for valuation of

1. Basis of preparation (continued) 2.9 Fair value measurement (continued)

   significant assets such as investment property. An analysis of fair value measurement of financial and non-financial assets and liabilities is provided in 16.

2. Material accounting policies

   The Group has consistently applied the following accounting policies to all periods presented in these financial statements.

   1. Financial instruments
      1. Recognition and initial measurement

         A financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instrument of another entity.

         Trade receivables issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provision of the instrument.

         A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

      2. Classification and subsequent measurement Financial assets

         On initial recognition, the financial assets are classified as measured at; amortized cost; FVOCI -debt investment; FVOCI - equity investment; or FVTPL.

         The Group/Company measures a financial asset at amortised cost if it meets both conditions required by the standard. The initial recognition of an equity investment that is not held for trading, the Group/Company may irrevocably elect to present subsequent changes in the investment fair value in OCI. This election is made on an investment-by-investment basis.

         All financial assets that are not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivatives financial assets.

         On initial recognition, the Group/Company may irrevocably designate the financial assets that otherwise mean to mix the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

         1. Material accounting policies (Continued)
            1. Financial instruments (Continued)
      3. Derecognition Financial liability

      Financial liabilities are recognized when, and only when the Company becomes a party to the contractual provisions of financial instrument. Financial liabilities are recognized initially at fair value net of transaction cost that are directly attributable to the issue of the financial liability, which are not at fair value through profit or loss.

      Financial liabilities are classified as measured at amortized cost or FVTPL. Financial liability is classified as FVTPL if it is classified as held for trading, is a derivative or it is designated as such on initial recognition.

      Financial assets

      The Group/Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred or in which the Group/ Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain Control of the financial assets. The Group/Company enters into transactions whereby it transfers assets recognized in its Statement of Financial Position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

      Financial liability

      The Group/Company derecognizes the financial liability when its contractual obligation is discharged or cancelled or expired. The Group also derecognizes financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified term is recognized at fair value.On derecognition of a financial liability, the difference between the carrying amount extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

      1. Impairment
         1. Non-derivative financial assets

            The Group recognises loss allowances for ECLs on:

            • financial assets measured at amortised cost;

              The Group measures loss allowance at an amount equal to lifetime ECLs, except for the following, which is measured at 12-months ECLs:

            • debt securities that are determined to have low credit risk at the reporting date; and

              3. Material accounting policies (Continued)
   2. Impairment (Continued)
      1. Non-derivative financial assets (Continued)

         • other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.Loss allowance for trade receivables is always measured at an amount equals to lifetime ECLs.

           When determining whether the credit risk of a financial has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and informed credit assessment and including forward- looking information.

           The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

           The Group considers a financial asset to be in default when:

         • the borrower is unlikely to pay its credit obligation to the Group in full, without recourse by the Group to actions such as realizing security (if any is held); or

         • The financial asset is more than 90 days past due.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference betweeN the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at FVOCI are credit impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

1. Material accounting policies (Continued)
   1. Impairment (Continued)
      1. Non-derivative financial assets (Continued)

         Evidence that a financial asset is credit-impaired includes the following observable data

         • significant financial difficulty of the borrower or issuer;

         • a breach of contract such as default or being more than 90 days past due;

         • the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;

         • it is probable that the borrower will enter bankruptcy or other financial reorganisation; or

         • the disappearance of an active market for a security because of financial difficulties.

           Presentation of allowance for ECL in the statement of financial positionLoss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

           Write-off

           The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group's procedures for recovery of amounts due.

      2. Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indicator exists, then the asset's recoverable amount is estimated. Goodwill is tested annually for impairment.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks-specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present

An item of property, plant and equipment that qualifies for recognition as an asset is initially measured at its cost. Cost includes expenditure that is directly attributable to the acquisition of the asset and subsequent costs (excluding the costs of day-to-day servicing) as explained below. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and the costs of dismantling and removing the items and restoring the site on which they are located and capitalized borrowing costs. Purchased software which is integral to the functionality of the related equipment is capitalized as part of computer equipment.

Inventories are valued at the lower of cost and net realizable value. Costs incurred in bringing each product to its present location and condition and are accounted for as follows:

• All inventory items, except manufactured inventories and work-in-progress are measured at weighted average directly attributable cost.