Annual Report 2024/25

ANNUAL REPORT | 2024/25

Contents

OVERVIEW

Our Vision Our Mission | 2 Philosophy and Values | 3

About Browns Hotels and Resorts | 4 Financial Highlights - Group | 5

LEADERSHIP

Chairman's Review | 7 CEO's Review | 9 Board of Directors | 12

MANAGEMENT DISCUSSION AND ANALYSIS

Operational Review | 15

STEWARDSHIP

Risk Management | 20 Corporate Governance | 24

Annual Report of the Board of Directors | 30

Directors' Disclosures in Terms of Section 9.10.4 (E) | 33 The Related Party Transactions Review Committee | 35 Remuneration Committee | 37

Report of the Audit Committee | 38

Report of The Nomination and Governance Committee | 40

FINANCIAL STATEMENTS

Statement of Directors' Responsibility in Relation to Preparing Financial Statements | 44 Independent Auditor's Report | 45

Statement of Financial Position | 50 Statement of Profit or Loss | 51 Statement of Comprehensive Income | 52

Statement of Changes in Equity - Group | 53 Statement of Changes in Equity - Company | 54 Statement of Cash Flows | 55

Notes to the Financial Statements | 56

SUPPLEMENTARY INFORMATION

Ten Year Financial Review | 116 Investor Information | 117

Notice of Annual General Meeting | 121 NOTES | 123

Form of Proxy - Voting shareholders | 127 Form of Proxy- Non Voting shareholders | 129 Stakeholder Feedback Form | 133 Stakeholder Feedback Form | 134

Corporate Information | IBC

ANNUAL REPOR T

2024/25

OVERVIEW

Our Vision and Mission

OUR VISION

"To be one of the top three contributors to the development of the hospitality industry in Sri Lanka and be the benchmark for guest service, F&B standards and management of Human Capital"

OUR MISSION

Our Guests

» To create experiences to write home about by exceeding the expectations of our guests at

all times

Our Customers

» To be the most trusted hotel partner, delivering consistently superior value at all

times

Our People

» To create an environment that will inspire our people to work with pride, happiness

and passion which will reflect in service excellences thus delighting our guests

Our Community

» To develop our community and protect our environment by adopting and implementing

sustainable tourism initiatives

Our Shareholders

» To deliver superior returns to our shareholders through sustained performance excellence

Overview

2 SERENDIB HOTELS PLC Annual Report 2024/25

Philosophy and Values

To reflect our engagement with our stakeholders and our passion to elevate the Serendib Hotels to the pinnacle of service excellence. Our decade-long experience in hospitality and pursuit of achieving 100% customer satisfaction drives all our operations.

OUR VALUES

We Think Boldly

» We take pride in big ideas. And we believe that each and every one of us should have an input into the future of

the Company

We Lead Change

» Never content with maintaining the status quo. We always embrace change, relishing the chance to meet

the shifting needs of the world around us.

We Thrive On Creativity

» It doesn't matter where you come from or what your background is - we judge each other on our ability to

look at things differently and find novel solutions to complex puzzles.

We Evolve With Our Customers

» We foster a dynamic culture that inspires total confidence and evolves based on the changing demands

of all our stakeholders

We Personalise Experiences

» For our career journeys as well as for our customers, we believe in catering to the individual rather than to the

masses

We Keep Learning

» We constantly strive to be the best we can be. And when we get there, we strive to be even better never stopping

or resting on our laurels

Annual Report 2024/25 SERENDIB HOTELS PLC 3

About Browns Hotels and Resorts

One of the leading hotel groups in Sri Lanka, Browns Hotels and Resorts Group has built a sound reputation as a renowned operator of some of the most unique hotel and villa brands in the island, underscored by a sustainable tourism philosophy.

The Browns Hotels and Resorts Group's hospitality offerings encompass the island's key attractions: beach, jungle and lagoon. Each property known for its stunning architecture, strategic locations and excellent service.

Thaala Bentota Resort Club Hotel Dolphin and Hotel Sigiriya are popular holiday destinations and patronised by a multi-cultural clientele hailing from different parts of the world.

The boutique hotel and villa portfolio, Reveal, includes Lantern Boutique Hotel, Ubuntu Beach Villa and The Beach House, all remarkable spaces providing guests with an intimate and personalised tropical vacation.

Browns Hotels and Resorts and villas are nationally and internationally acclaimed for their skilled culinary teams and extremely professional service staff that go the extra mile to make guests feel special and cared for.

Financial Highlights - Group

Rs. 13 Mn

Net Interest Cost

Rs. 597Mn

Profit Before Tax

Rs. 7,886 Mn

Net Assets

Market price Per Share

Rs.

20

Net Assets Per Share

Rs.

25

Earning Per Share

Rs.

2

1

20

15 0

15 -1

10

10 -2

5 -3

5

-4

20/21

21/22

22/23

23/24

24/25

20/21

21/22

22/23

23/24

24/25

20/21

21/22

22/23

23/24

24/25

0 0 -5

LEADERSHIP

Chairman's Review

"LEADING HOSPITALITY WITH PURPOSE AND PASSION"

Dear Stakeholders,

On behalf of the Board, it is my pleasure to present the Annual Report and Financial Statements of Serendib Hotels PLC for the year ended 31st March 2025.

THE GLOBAL TOURISM INDUSTRY IN 2024/25

The global tourism sector witnessed a dynamic phase during 2024/25, marked by a robust rebound fuelled by pent-up travel demand and easing pandemic-related restrictions. Travellers demonstrated a

strong appetite for both leisure and business travel, driving a surge in international arrivals across key markets. Innovations in travel technology and sustainability practices gained momentum, reshaping how destinations and service providers engage with visitors.

Nonetheless, the industry faced ongoing challenges such as fluctuating fuel prices, geopolitical uncertainties, and evolving traveller expectations. Despite these hurdles, the global tourism landscape displayed resilience and adaptability, underscoring the sector's critical role in economic recovery and job creation worldwide.

FUTURE OUTLOOK OF THE TOURISM INDUSTRY 2025/26

Looking ahead to 2025/26, the tourism industry is poised to experience measured growth amid a complex global environment. Emerging trends point to a greater emphasis on responsible tourism, with consumers increasingly seeking authentic and environmentally conscious travel experiences.

Digital transformation will continue to drive personalised guest experiences and operational efficiencies.

However, industry stakeholders must remain vigilant to risks such as climate change

impacts, labour market constraints, and regulatory shifts. Strategic investments in infrastructure, talent development, and

sustainable practices will be vital to capitalise on the opportunities ahead and ensure longterm sector viability.

SRI LANKA TOURISM INDUSTRY

Sri Lanka's tourism sector is on an encouraging trajectory after overcoming recent challenges. The island's rich cultural heritage, biodiversity, and warm hospitality continue to captivate visitors, contributing to steady growth in tourist arrivals throughout 2024/25.

Government initiatives aimed at enhancing connectivity, easing visa processes, and promoting diverse tourism products have played a pivotal role in revitalising the industry. As the sector recovers, efforts to balance growth with sustainable resource management will be essential to preserve Sri Lanka's unique appeal and foster inclusive development.

Sri Lanka is actively driving tourism growth through targeted strategic efforts. With a strong emphasis on upgrading infrastructure, ensuring high safety standards, and championing sustainable tourism, the country is positioning itself as a premier travel destination. Investments in environmentally conscious resorts and the promotion of

lesser-known locales are creating unique and authentic experiences for visitors seeking something beyond the traditional.

COMPANY & GROUP FINANCIAL PERFORMANCE

The year under review marked a period of steady financial growth and operational improvement for the Company. Net Revenue reached Rs. 859.4 million, reflecting a commendable increase from Rs. 746.3 million in the previous year. This performance demonstrates the continued recovery of the hospitality sector and the Company's ability to adapt to changing market dynamics.

Operational profitability also saw a notable improvement, with the Company recording

a positive EBIT of Rs. 172.7 million, an encouraging rise from Rs. 114.8 million reported in the 2023/24 fiscal year. This growth reflects enhanced cost discipline, stronger revenue generation, and the impact of targeted strategic measures implemented across the portfolio.

The Consolidated Financial Statements capture the financial performance of Serendib Hotels PLC and its subsidiaries, including Hotel Sigiriya PLC, Dolphin Hotels PLC, Frontier Capital Lanka (Pvt) Limited, and Serendib Leisure Management (Pvt) Limited. During the financial year, the Group delivered a strong performance, achieving a net revenue of Rs. 3.4 billion compared to the Rs. 2.9 billion recorded in the previous year. This growth reflects the Group's continued recovery and resilience, driven by improved occupancy levels, enhanced operational efficiency, and a rebound in tourist arrivals.

In a significant turnaround, the Group reported a positive Earnings Before Interest and Taxes (EBIT) of Rs. 609.9 million, a improvement from the EBIT of Rs. 602.5 million in the prior year. This underscores the effectiveness of strategic initiatives implemented across the portfolio, including cost rationalisation, service enhancements,

and targeted marketing efforts aimed at both domestic and international markets.

STRATEGIC PLANNING FOR SUSTAINED GROWTH

In response to the continuously evolving dynamics of the global tourism industry, the Company has formulated a robust and adaptable strategic framework to ensure sustained growth and long-term resilience.

This comprehensive plan integrates both short-term tactical initiatives and long-term strategic objectives, carefully aligned with market trends, consumer behaviour shifts, and macroeconomic indicators.

Key focus areas include expanding into high-potential markets, accelerating digital

transformation across customer touchpoints, enhancing operational efficiency, and

Chairman's Review

strengthening risk management protocols. These strategies are designed not only to capitalise on the resurgence of travel demand but also to future-proof the business against volatility and external disruptions.

By adopting a data-driven approach and fostering cross-functional collaboration, the Company is well-positioned to navigate industry uncertainties, unlock new revenue streams, and deliver consistent value to stakeholders as the market continues to recover and evolve.

APPRECIATION

On behalf of the Board of Directors, I wish to extend my heartfelt gratitude to all stakeholders, our valued guests, loyal shareholders, dedicated employees, and business partners for their unwavering support and trust during the year.

A special note of appreciation is due to our management and staff, whose resilience, professionalism, and passion have been the backbone of our continued progress. As we move forward, I am confident that our collective commitment to excellence will enable us to seize new opportunities and navigate future challenges with determination.

We remain steadfast in our vision to deliver exceptional guest experiences while contributing meaningfully to the growth of the Sri Lankan tourism sector.

W.D.K Jayawardena

Chairman

SERENDIB HOTELS PLC

15 August 2025

"DELIVERING EXPERIENTIAL HOSPITALITY THROUGH PERFORMANCE EXCELLENCE"

Dear Stakeholders,

It is my pleasure to present the Annual Report and Financial Statements of Serendib Hotels PLC for the year ended 31st March 2025. This year has been marked by renewed momentum, global recognition, and a strengthened commitment to sustainable hospitality across our portfolio.

GLOBAL TOURISM INDUSTRY - 2025

As we look ahead to 2025, the global tourism industry is poised for transformative growth driven by technological innovation,

sustainability, and shifting traveler behaviours. Advances in digital connectivity, artificial intelligence, and personalised experiences

will redefine how travellers plan and enjoy their journeys, creating new opportunities for engagement and efficiency within the hospitality sector. Moreover, a heightened global awareness of environmental and social responsibility is steering the industry toward more sustainable practices, with an emphasis on minimising carbon footprints and supporting local communities. Despite geopolitical uncertainties and economic fluctuations, the outlook remains optimistic as demand for authentic, immersive experiences continues to rise across emerging and established markets alike.

Our company is strategically positioned to capitalise on these trends, reinforcing our commitment to innovation, guest satisfaction, and sustainable growth in the evolving landscape of global tourism.

SRI LANKA TOURISM INDUSTRY - 2025

Sri Lanka made a confident return to the global tourism spotlight in 2024, welcoming over two million international visitors-the highest recorded since 2018. The country

earned multiple accolades, including "Most Desirable Island in the World" at the 2024 Wanderlust Reader Travel Awards, ninth place on BBC Travel's "25 Best Places to Travel in 2025," and "Most Family-Friendly Destination for 2025" by Condé Nast Traveller.

Europe remained the leading source region for inbound arrivals, accounting for a 38% increase in visitor numbers in 2024 compared to 2023. With improved air connectivity, focused destination marketing, and growing interest in wellness, culture, and responsible travel, Sri Lanka is on track to reclaim its position as South Asia's most experiential destination. The government's renewed commitment to infrastructure development, combined with innovative marketing strategies and improved connectivity, is facilitating greater access and convenience for visitors. As global travellers increasingly prioritise safety, wellness, and meaningful engagement, Sri Lanka is uniquely positioned to meet these demands while fostering community empowerment and environmental stewardship. Our company remains dedicated to supporting this renaissance by delivering exceptional hospitality services that highlight the best of what Sri Lanka has to offer, contributing to the nation's tourism growth and long-term sustainability.

DESTINATION HIGHLIGHTS

The properties under Serendib Hotels PLC are situated in some of Sri Lanka's most sought-after destinations, each offering distinct experiences that celebrate the island's cultural richness, biodiversity, and natural beauty.

In Negombo, Club Hotel Dolphin serves as a vibrant gateway to the charismatic coastal town of Negombo-recently ranked 16th on The New York Times' "52 Places to Go in 2024." With its labyrinth of canals, scenic

lagoon, and diverse cultural fabric, Negombo continues to attract international stopovers and local families seeking a relaxed seaside retreat just minutes from the airport.

Further down the coast, Thaala Bentota immerses travellers in the essence of tropical Sri Lanka-where design, landscape, and local culture converge. The resort was originally designed by legendary architect Geoffrey Bawa, reflecting his signature

tropical modernist style that harmonises with its beachfront setting. With easy access to Bevis Bawa's Brief Garden, the iconic Madu River boat safari, turtle hatcheries, and the famed Ambalangoda mask museums, Thaala Bentota serves as a gateway to coastal art, heritage, and nature. In 2024, Bentota Beach was named one of Tripadvisor's Best Beaches in Asia, reinforcing its status as a top-tier destination for sun and sea.

In the south, the Reveal Collection in Mirissa places guests at the heart of a tropical playground known for its Instagrammable landmarks-Coconut Tree Hill, Parrot Rock, and golden surfing beaches. With its laid-back luxury, proximity to whale watching, and vibrant coastal energy, Reveal Mirissa offers an experience where nature, comfort, and purpose converge.

Moving inland, Sigiriya-home to Hotel Sigiriya-stands as one of Sri Lanka's most iconic cultural and archaeological landmarks. Often referred to as the "Lion Rock," this 5th-century fortress rises dramatically from the jungle canopy, revealing ancient frescoes, the famed Mirror Wall, and sophisticated water gardens carved into stone. In a testament

to its welcoming spirit and enduring appeal, Sigiriya was named the Most Welcoming City in the World by Booking.com in 2024, highlighting its unique blend of heritage, natural beauty, and heartfelt hospitality.

OUR MARKET OUTREACH

Over the past year, Serendib Hotels significantly expanded its guest reach through an integrated strategy that combined digital presence, trade engagement, and ground-level activations.

Our digital campaigns were underpinned by a robust mix of SEO, Meta, and Google advertising, designed to drive high-intent traffic to our booking engines while telling authentic, experience-led stories across platforms. User-generated content (UGC) became a core driver of visibility and

credibility, with guest experiences organically amplifying our reach across Instagram and TikTok. These efforts not only helped us build top-of-mind awareness but also created meaningful engagement among our core markets.

CEO's Review

Our properties have continued to strengthen their presence across key online travel agencies, with year-on-year improvements in OTA rankings. All Serendib Hotels PLC properties received the Tripadvisor Travelers'

Choice Awards and Booking.com Guest Review Awards in 2024. Notably, Club Hotel Dolphin was honored with the HolidayCheck 2025 Award as one of the world's most popular hotels and was named Top Hotel Partner 2025 by Schauinsland Reisen. Additionally, Thaala Bentota and Hotel Sigiriya both secured Agoda Gold Circle Awards, while the Reveal Collection in Mirissa earned recognition through the Kayak Awards.

In 2024, Club Hotel Dolphin celebrated two major industry accolades: South Asia's Leading All-Inclusive Resort at the South Asian Travel Awards and Sri Lanka's Best Four-Star Resort at the Sri Lanka Tourism Awards (SLimitedA).

Participation at international travel trade fairs including WTM London, ITB Berlin, and SATTE Delhi enabled direct engagement with travel agents and DMCs, strengthening long-term partnerships and opening new business pipelines. Locally, above-the-line campaigns were activated during peak travel windows-especially during Avurudu and holiday weekends-driving brand recall and occupancy among domestic travellers, families, and corporates.

FINANCIAL PERFORMANCE

In 2024/25, both the Company and the Group delivered a strong performance, reflecting resilience and renewed momentum in the tourism sector. Revenue rose to Rs. 859.4 million at the Company level and Rs. 3.4 billion for the Group, compared to Rs. 746.3 million and Rs. 2.9 billion in the prior year.

Profitability also strengthened, with the Company reporting EBIT of Rs. 172.7 million and the Group reaching Rs. 609.9 million-clear evidence of effective cost management and the continued recovery of core operations.

The Company and the Group reported a profit before tax of Rs.71.3 Mn and Rs. 596.8 Mn respectively for the year under review.

These results not only reinforce the strength of our financial foundation but also position us to build confidently for the future. Guided by a clear strategy, we will continue to harness industry recovery, enhance guest experiences, and unlock long-term value for all stakeholders.

SUSTAINABILITY INITIATIVES

Serendib Hotels reaffirmed its leadership in sustainability with impactful initiatives that bridged ecological responsibility, education, and community engagement across regions.

Club Hotel Dolphin emerged as a leader in ecosystem conservation through the launch of the Nipa Palm Conservation Project, initiated in collaboration with Wayamba University and the Wildlife & Nature Protection Society. Over 500 Nipa Palm seeds were cultivated in an in-house nursery and planted along the Gin Oya riverbanks, following biodiversity surveys led by subject matter experts. The first ceremonial transplanting took place on 4th February 2025, aligning

with World Wetlands Day and Sri Lanka's Independence Day.

Thaala Bentota Resort placed a strong focus on youth-led environmental education through its '500 Jack Trees Project', carried

out in collaboration with the Nature Societies of local schools. By March 2025, a total

of 502 jackfruit trees had been planted across multiple educational institutions in the Bentota region. The resort also led the Rathamilla Mangrove Conservation Project, focusing on preserving a critically

endangered mangrove species found in the Bentota estuarine ecosystem. Community education sessions and interpretive signage helped amplify the initiative's reach with the Department of Wildlife, which was honoured with a Gold Award in Conservation and Wildlife at the Green Apple Environment Awards 2024 (UK).

Hotel Sigiriya celebrated World Wildlife Day 2025 by engaging students from Sigiriya Central College in an art competition centred on human-elephant conflict. The programme, supported by the Department of Wildlife Conservation, aimed to encourage awareness and empathy around the complexities of

coexistence. Hotel Sigiriya pioneered a sustainable bee honey farming project aimed at strengthening community engagement and promoting local agricultural livelihoods. Led by experienced Agriculture Instructor, the initiative equips participants with bee boxes, colonies, and ongoing technical support to ensure successful beekeeping practices.

To enhance impact, Hotel Sigiriya commits to purchasing the harvested honey from the local comunity, integrating it into their culinary and wellness offerings.

Frontier Capital/Reveal the Collection in Mirissa continued to operate the only sea turtle hatchery in Kamburugamuwa, with over 40,000 eggs protected and released to date. The hatchery marked a milestone with its 80th batch of hatchlings released in early 2025. This long-standing initiative plays a vital role in marine conservation and environmental education. A notable

milestone was the awarding of the Good Travel Seal for Responsible Tourism to Frontier Capital Partners by Travelife, recognising

our continued commitment to sustainable operations and transparent practices across the Group.

Across the Group, Earth Day 2025 was commemorated through tree planting drives, educational workshops, and coastal cleanups. Earth Hour, observed on 22nd March, saw symbolic energy-saving activities carried

out at all hotels, reinforcing Browns Hotels & Resorts' continued support for climate action.

HUMAN RESOURCE CAPITAL

At Serendib Hotels, we recognise that exceptional service begins with exceptional people. In 2024/25, we strengthened internal capabilities through structured training, skill-building, and leadership development.

Our Hotel Trainee Program provided real-time exposure to hospitality operations, while

the Management Trainee Program, which graduated its latest cohort in January 2024, continued preparing future leaders for the industry. The FutureKey initiative created structured pathways into hospitality for school leavers in surrounding communities, bridging skill gaps and creating meaningful impact.

Special focus was placed on food and beverage innovation training, introducing specialised wine and tea education programmes, and culinary workshops aligned with our renewed concepts. These

sessions were rolled out across all properties, empowering staff to deliver elevated guest dining experiences with confidence and knowledge.

Recognition and reward remain central to our culture, with performance-linked bonuses and the annual staff trip allowing team members and their families to relax and reconnect at a Browns property of their choice.

APPRECIATION

I extend my heartfelt gratitude to the Chairman and Board of Directors of Serendib Hotels PLC, as well as our valued shareholders, for their continued trust and confidence in my leadership. The milestones we have reached over the past year are a testament to the unwavering support and collaboration of all our stakeholders.

I also express my sincere appreciation to our loyal guests, dedicated business partners, and the corporate management team for their ongoing commitment. Most importantly, I commend our exceptional staff and their families for their resilience, dedication, and tireless efforts in delivering outstanding service, even during the most challenging times. Their contribution remains the cornerstone of our success.

E.C. Wijeratne

Chief Executive Officer - Browns Hotels and Resorts Limited

15 August 2025

Board of Directors

Mr. Jayawardena was appointed to the Board w.e.f. 11th February 2021. Considering his wealth of experience in local and international fields of Banking and Investment Banking, Mr. Kapila Jayawardena has earned a solid reputation as a captain of industry and a dynamic leader who relishes challenges. He joined LOLC Holdings PLC in the year 2007 as the Group Managing Director/CEO and has since steered the Group from strength to

strength, while implementing its ambitious expansion in 25 countries in Asia and Africa.

Prior to coming on-board the LOLC Group, Mr. Kapila Jayawardena served as Country Head and CEO (Sri Lanka and Maldives) of Citibank NA from 1998

to 2007, along with being tasked with short assignments for Citibank in New York and Manila (Philippines). He has also served as Chairman of the Sri Lanka Banks' Association (SLBA) in 2003/04; President of the American Chamber of Commerce in Sri Lanka in 2006/07; Member of the Financial Sector Reforms Committee (FSRC); Member of the National Council of

Economic Development (NCED) and as Board Member of the United States -Sri Lanka Fulbright Commission.

He holds an MBA in Financial Management and is a fellow member of the Institute of Bankers and an Associate Member of the Institute of Cost and Executive Accountants, London, UK.

Mr. Amarasekera was appointed to the Board w.e.f. 11 th February 2021. He is a member of the Institute of Chartered Accountants of Sri Lanka and is an Attorney- at-Law of the Supreme Court of Sri Lanka. He also holds a degree in Business Administration from the University of Sri Jayewardenepura and began his career in the year 1998. Mr. Amarasekera is an eminent Tax Consultant and the Senior Tax and Legal Partner of M/s. Amarasekera & Company, a leading tax consultancy firm in the country. In addition to his directorship in this company, his other key appointments are: Non Executive Director - , Madulsima Plantations PLC, Ceylon Hotels Corporation PLC, Palm Garden Hotels PLC, Serendib Hotels PLC, Dolphin Hotels PLC, Hotel Sigiriya PLC, Udapussellawa Plantations PLC, Three Tips Ella (Private) Limited and Independent Director of Eden Hotel Lanka PLC & Palm Garden Hotels PLC and several other subsidiaries of Browns Investments Group.

Dr. J M Swaminathan was appointed to the Board w.e.f. 11th February 2021. He is an Attorney-at-Law with over 60 years in 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 was a Member of the Company Law Advisory Commission and The Intellectual Property Law Advisory Commission and a Member of the Board of Management of the Superior Court Complex. He is the Chairman of the Board of Studies of the Council of Legal Education and was also a Consultant at the Institute of Advanced Legal Studies of

the Council of Legal Education. He also serves on the Boards of several public and private companies.

Mrs. Amarasinghe was appointed to the Board on 11th February 2021. She holds an Honours Degree in Economics and has an outstanding vision for investments. She serves on the Boards of subsidiaries of Browns Group of Companies and L O L C Holdings PLC.

Executive Director

• LOLC Holdings PLC

  Director

• Palm Garden Hotels PLC

• Eden Hotel Lanka PLC

• Hotel Sigiriya PLC

• Brown & Co. PLC

• Browns Investments PLC

• Green Paradise (Private) Limited

• Browns Holdings Limited

• Danya Capital (Private) Limited

• LOLC Global (Private) Limited

• Ultimate Sports (Private) Limited

• P L Resorts (Private) Limited

• Melana Capital (Private) Limited

• Three Tips Ella (Private) Limited

• LOLC General Insurance PLC

Board of Directors

Mr. Chojnacki was appointed to the Board on 25th January 2017 and is the Chief Commercial Officer and General Counsel of Minor International PCL. Mr. Chojnacki holds degrees in economics, foreign affairs and law from the University of Virginia, USA. Mr. Chojnacki is based in Bangkok and has worked for Minor International for 17 years, across Minor's hotel, food and distribution businesses. Mr. Chojnacki is a practicing lawyer admitted to the New York Bar. Prior to joining Minor International, Mr. Chojnacki worked for Linklaters, a large global law firm, in their New York, Hong- Kong and Bangkok offices.

Mr. Rajakarier was appointed to the Board on 26th May 2010. He is the Group Chief Executive Officer of Minor International Public Company Limited and the Chief Executive Officer of the Minor Hotels Group. He has also served as the Deputy Chief Financial Officer of Orient-Express Hotels, Trains & Cruises and as the Group Financial Controller of Easi Solutions PLC.

Mr. Rajakarier has a Masters' Degree in Business Administration, from the UK and is also a Member of UK Institute of Management Information Systems. He is also an Associate Member of the British Association of Hotel Accountants, a Member of the Association of Computer Professionals, a Member of the Association of Business & Administrative Computing, UK, and a Member of the Institute of Directors.

Mr. Wijesinghe was appointed to the Board w.e.f. 28th July 2016. He has three bachelors' degrees in Engineering, Economics and Business Administration from Cornell University, USA.

Having commenced his career as a Senior Management Consultant at Price Waterhouse Coopers, Colombo, Mr. Wijesinghe co-founded

Asia Capital PLC, which became Sri Lanka's largest investment bank in terms of market capitalisation. In late 1995 Mr. Wijesinghe exited his shareholding in Asia Capital to become the youngest ever Chairman/ Director General of the Board of Investment of Sri Lanka. During his 5 year tenure, he directed several pioneering privatisation and Public-Private Partnership (PPP) transactions in large scale infrastructure projects. Mr. Wijesinghe is also a co-founder and Board member for life of the Sri Lanka Institute of Information Technology, which has become Sri Lanka's largest IT and engineering University.

Mr. Wijesinghe was the former Managing Director of Forbes & Walker Group and headed Sri Lanka's two largest listed property companies, Asian Hotels Properties PLC and Overseas Realty PLC. He continues as a Board member of MJF Leisure and is a co-founder and Director of the award winning Ceylon Tea Trails Resort. He was also a co-founder/ Director of Wow.lk, which was sold to Dialog Axiata.

Mr. Wijesinghe currently is the Chairman & CEO of TWC Holdings, a company he founded 13 years ago specialising in investment banking, including Private Equity and Public Private Partnerships. Mr. Wijesinghe also sits on the boards of several other public and private companies in Sri Lanka, India and Maldives

Mr. Dharmarajah was appointed to the Board w.e.f. 01st October 2024. He is the Managing Partner of M/s Amerasekera & Company and presently serves as a Director of Raigam Wayamba Salterns PLC, Raigam Southern Salterns (Private) Limited, Hapugastenne Plantations PLC, Udapussellawa Plantations PLC, Renuka City Hotels PLC, Management Applications (Pvt) Limited, Lanka Industrial Estates Limited and DHS Medical Group (Private) Limited.

He is a Member of the Council of University of the Visual and Performing Arts, Postgraduate Institute of Indigenous Medicine, and a member

of the Standing Committee on Management Studies of the University Grant Commission. Dharmarajah is a member of a Committee appointed by Ministry of Education for five-year institutional review of Degree Awarding Non-State Higher Education Institutes. He was a director

of DFCC Bank PLC, DFCC Vardhana Bank, TKS Finance Limited & TKS Securities Limited. He also was a Member of the Board of Management Postgraduate Institute of Management and Curriculum Development Committee of the National Institute of Education, a Member of the Council of the Institute of Chartered Accountants of Sri Lanka and University of Sri Jayewardenepura. He was also a former president of the Association of Accounting Technicians of Sri Lanka.

T Dharmarajah holds a BSc. Management (Sp) Degree of the University of Sri Jayewardenepura and a Fellow Member of the Institute of Chartered Accountants of Sri Lanka, Association of Accounting

Technicians of Sri Lanka, and Institute of Public Finance & Development Accountancy. He is a resource person in Capacity Development Training Program on Sri Lanka Public Sector Accounting Standards funded by USAID Program. He is an author of number of books in Accounting Standards for the students who are reading for G.C.E. (Advanced Level) and Professional Accounting Examination. Dharmarajah is an all Island Justice of Peace.

MANAGEMENT DISCUSSION AND ANALYSIS

Operational Review 15-18

SERENDIB HOTELS PLC

The Management Discussion and Analysis (MD&A) presents a comprehensive review of Serendib Hotels PLC's performance for the financial year 2024/25. It highlights the Company's/Group's key developments, the broader industry context, and the strategic priorities as we move forward in an evolving global tourism landscape.

GLOBAL TOURISM INDUSTRY OVERVIEW

The global tourism industry saw a full resurgence in 2024, reaching approximately

1.4 billion international arrivals, equivalent to 99% of pre-pandemic (2019) levels, as reported by the UNWTO. This rebound was driven by lifted travel restrictions, strong pent-up demand, and renewed outbound travel from leading markets including China, the USA, and Europe.

Tourism's role in the global economy was firmly re-established, with the World Travel & Tourism Council (WTTC) estimating the

sector's total contribution at USD 11.1 trillion, or 9.2% of global GDP. Employment in the sector also rebounded to support 348 million jobs, underscoring tourism's extensive value chain and its positive impact on related industries such as aviation, hospitality, and transport.

The Asia-Pacific, The Asia-Pacific, Europe and the middle east, surpassed pre-COVID visitor volumes. However, the resurgence also intensified concerns over sustainability, prompting regulatory responses such as the EU's Green Claims Directive aimed at increasing accountability and fostering responsible tourism development.

SRI LANKAN TOURISM INDUSTRY PERFORMANCE

Sri Lanka experienced a strong recovery in 2024, recording 2 million international tourist arrivals, a 38% increase year-on-year-the highest since 2019. This growth reflects the country's regained positioning as a desirable global destination, with renewed interest in its rich cultural heritage, scenic landscapes, and eco-diverse offerings.

Tourism earnings reached an estimated USD 3.17 billion, supported by, extended visitor stays, focused marketing efforts, global economic recovery and higher travel spending, strategic outreach to high-value source markets.

Demand was notably strong from India, Russia, the UK, and China, while the Gulf region demonstrated a marked rebound, aided by improved connectivity and visa policy enhancements.

The government's proactive policy environment significantly influenced sectoral growth. A notable initiative was the 30-day visa-free entry programme for selected countries introduced in late 2024, which helped lower barriers to travel and diversify arrival streams. Infrastructure improvements-including airport and road

upgrades-and continued tourism promotions further improved the travel experience and destination visibility.

In parallel, investment incentives revitalised the hospitality sector, encouraging refurbishment and capacity expansion across the accommodation landscape.

These developments have firmly repositioned Sri Lanka on the global tourism map and laid the groundwork for sustainable growth in 2025/26 and beyond, with a focus on high-value, experience-driven, and eco-conscious travel.

Please refer the table below for the new key trends in the tourism industry:

Key Focus Area

Key Development

Impact

Sustainability and Responsible Travel Globally, destinations are enforcing limits on visitor Consumer Behaviour: Travellers are willing to pay a

(Sustainability has moved from a niche concern to a mainstream imperative.

Stakeholders across the tourism value chain-governments, investors, consumers, and businesses-are

prioritising environmental stewardship, social responsibility, and economic

numbers to prevent over-tourism and degradation of natural and cultural sites. For example, UNESCO World Heritage sites have started imposing stricter visitor caps.

Regulatory frameworks like the European Union's

premium for eco-friendly options and are actively seeking out destinations and experiences that align with their values.

Destination Management: Destinations are

viability. This shift is driven by mounting Green Claims Directive require tourism businesses implementing sustainable practices to attract

evidence of tourism's impact on ecosystems, communities, and cultural heritage.)

to substantiate their environmental claims with transparent, verifiable data, combatting greenwashing and ensuring consumer trust.

eco-conscious tourists and preserve their natural resources.

Key Focus Area

Key Development

Impact

Wellness and Experiential Travel

(Wellness tourism and experiential travel are driving a paradigm shift from passive sightseeing to active, meaningful engagement. Travellers increasingly seek experiences that promote physical, mental, and spiritual

well-being, as well as authentic cultural immersion.)

Many hotels and resorts are adopting science-based targets to reduce carbon emissions, integrate renewable energy, and enhance water conservation. Certifications such as Global Sustainable Tourism Council (GSTC) and LEED accreditation have gained prominence.

Communities are demanding greater involvement in tourism planning and revenue-sharing to ensure benefits are equitably distributed and cultural integrity is preserved.

The global wellness tourism market is projected to reach USD 2.1 trillion by 2030, with wellness travellers spending 35-130% more than average tourists. This includes demand for spas, yoga retreats, Ayurveda treatments, and nature-based healing.

Experiential travel encompasses participation in local traditions, culinary experiences, craft workshops, and slow tourism-where travellers

sustainability must be embedded not just in marketing, but in operations-from energy management and waste reduction to community engagement and supply chain choices. Adopting credible certifications and transparent reporting will build trust among environmentally conscious

travellers and partners, while mitigating risks related to regulatory non-compliance and reputational damage.

Wellness and experiential travel broaden the range of products and services a destination can offer. Instead of focusing solely on traditional sightseeing, destinations now provide holistic wellness experiences-such as spa retreats, yoga, meditation, and holistic healing-and immersive cultural activities like local cooking classes, nature exploration, and community-based tourism. This

diversification attracts new visitors and encourages longer stays.

Travellers seeking wellness and authentic experiences often have a higher willingness to spend on premium services, including boutique

spend longer in fewer places to deeply connect with accommodations, personalised wellness treatments,

the culture and environment.

Destinations that curate wellness and cultural experiences holistically, such as Bali's integration of spirituality and ecotourism or Japan's focus on traditional wellness rituals, have seen increased visitor loyalty and premium pricing.

guided experiential tours, and local artisan products. This increased spending supports local businesses and generates higher economic returns for the destination.

Destinations that successfully integrate wellness and experiential offerings often position themselves as forward-thinking, health-conscious, and culturally rich. This strengthens their brand appeal globally and differentiates them from competitors, attracting niche markets such as wellness seekers, adventure travellers, and culturally curious visitors.

Key Focus Area

Key Development

Impact

Smart Tourism and Digital Integration The rise of contactless technologies, mobile apps, Smart tourism leverages digital technologies such as

Technology adoption continues to

AI-driven chatbots, and biometric identification has mobile apps, virtual reality (VR), augmented reality

transform the tourism landscape by enhancing operational efficiency,

personalising guest experiences, and improving destination management.

accelerated post-pandemic, making travel safer and more convenient.

Big data and IoT devices enable smart destinations to monitor tourist flows in real time, optimise resource allocation, and minimise congestion at popular attractions, thereby improving the overall visitor experience.

(AR), and AI-powered chatbots to provide travellers with personalised, seamless, and interactive experiences. From virtual tours and real-time information to personalised recommendations, digital integration helps tourists navigate destinations effortlessly and enriches their overall journey.

Digital tools enable tourism businesses and destinations to streamline their operations. Online booking systems, digital payment gateways, and automated check-ins reduce wait times and improve service delivery. Data analytics help in managing resources effectively, optimising staff deployment, and enhancing maintenance schedules, leading to better operational performance.

Virtual reality (VR) and augmented reality (AR) tools Smart tourism relies heavily on data collection and are used for immersive pre-trip planning and onsite analytics. By analysing visitor behaviour, preferences,

engagement, appealing to tech-savvy travellers.

Digital marketing strategies, including influencer partnerships and user-generated content, play

a significant role in shaping travel decisions and brand perception

and feedback, stakeholders can make informed decisions about marketing, product development, and resource allocation. This leads to more targeted promotions, better demand forecasting, and the ability to quickly respond to emerging trends.

Digital platforms such as social media, travel blogs, and online travel agencies (OTAs) allow destinations and businesses to reach global audiences

more effectively. Interactive content, influencer collaborations, and targeted advertising boost engagement, driving higher tourist arrivals and brand loyalty.

SERENDIB HOTELS PLC AND SERENDIB GROUP.

No Name of the Company

Nature of operations Principal place

of business

Please refer the below table for the nature of operations and the principal place of business of the subsidiaries, which are consolidating at Serendib Hotels PLC level.

1. Serendib Hotels PLC Operating Hotel Bentota

2. Dolphin Hotels PLC Operating Hotel Waikkala

3. Hotel Sigiriya PLC Operating Hotel Sigiriya 04 Frontier Capital Lanka (Private) Limited Operating Hotel Mirrisa

IMPACT ASSESSMENT OF SERENDIB HOTELS PLC

» Economic Impact

The Company/Group generated substantial foreign exchange earnings and contributed to national revenue through taxation and tourism-related spending. The post-pandemic rebound in occupancy and service income also helped stabilise the Group's/Company's earnings, while supporting employment across multiple regions.

» Social Impact

05 Serendib leisure Management Limited Management Company

Non-Operating Company

Colombo

A strong commitment to local hiring and

upskilling programs has enabled Serendib Hotels PLC to deliver community-level economic benefits. Training initiatives and inclusive

Sanctuary Resorts Private Limited Non-Operating N/A

recruitment practices continue to strengthen our social sustainability efforts.

» Environmental Impact

In response to increasing environmental responsibilities, Serendib Hotels PLC has initiated water and energy conservation practices, waste reduction efforts, and minimised single-use plastics. Future plans include pursuing green certifications and scaling up renewable energy adoption.

» Cultural Impact

Through curated local experiences-traditional cuisine, cultural performances, and artisan collaborations-Serendib Hotels PLC continues to celebrate and preserve Sri Lankan heritage. These efforts enhance guest experiences while supporting community pride and identity.

» Strategic Partnerships

Serendib Hotels PLC has deepened collaboration with DMCs, FTOs, and travel platforms across India, Europe, and the Middle East. Marketing alliances, FAM tours, and co-branded packages have improved visibility and market penetration. The Group/Company also remains aligned with national tourism goals through participation in international trade shows and tourism board initiatives.

» Going Concern Assessment

The Board of Directors affirms the Group's/ Company's ability to continue as a going concern, with sufficient resources and no material uncertainties affecting operational continuity.

There are no intentions to liquidate or cease operations of Serendib Hotels PLC.

GOING CONCERN

The Directors have assessed the Group's/ Company's ability to continue as a Going Concern and are satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, Board is not aware of any material uncertainty that may cast a significant doubt upon the Group's/Company's ability to continue as a Going Concern, and they do not intend either to liquidate or to cease operations of the Group/ Company and subsidiaries of Serendib Group.

FINANCIAL REVIEW

During the year under review, both the Company and the Group delivered strong financial results, marked by substantial growth in net revenue. The Company recorded revenue of Rs. 859.4 million, while the Group achieved Rs. 3.4 billion-

representing a notable increase from Rs. 746.3 million and Rs. 2.9 billion, respectively, in the previous financial year. This growth reflects the ongoing recovery of the tourism sector and improved operational momentum.

Operational performance also improved significantly across both entity and group. The Company posted a EBIT of Rs. 172.7 million, compared to the EBIT of Rs. 114.8 million reported in the prior year. At the Group level, EBIT reached Rs. 609.9 million, indicating a strong recovery in core business performance and effective cost control measures.

In line with the Group's Revaluation Policy, Serendib Hotels PLC and its subsidiaries revalued land, buildings, and Right-of-Use assets as at 31st March 2025. This revaluation resulted in a surplus of Rs. 338.2 million at the Company level and Rs. 2 billion at the Group level. As a result, the Total Asset Base stood at Rs. 4.2 billion for the Company and Rs. 11.5 billion for the Group as at the reporting date, further reinforcing the strength of the balance sheet.

Outlook for 2025-26 and Beyond- Leisure and Tourism Industry

The outlook for the global leisure and tourism industry in 2025-26 and the years ahead

is broadly optimistic, supported by a full-scale post-pandemic recovery, increasing disposable incomes in emerging markets, and a continued shift in consumer preferences toward experience-driven, sustainable travel. International tourist arrivals are expected to exceed pre-pandemic levels in most regions,

with Asia-Pacific and the Middle East projected to be the fastest-growing zones due to improved air connectivity and aggressive destination marketing. The World Travel & Tourism Council (WTTC) anticipates that the industry will continue to expand its contribution to global GDP, employment, and cross-border commerce, particularly as travel becomes more accessible and inclusive.

In Sri Lanka, the industry is poised for accelerated growth, with the government targeting over 3 million tourist arrivals and USD 5 billion in revenue in 2025. Key enablers of this growth include enhanced digital visa processing, destination rebranding initiatives, expanded direct flight routes, and renewed geopolitical stability. With Sri Lanka now repositioning itself as a premium eco-cultural destination, there is strong potential to attract high-value travellers

from both mature and emerging markets. The ongoing focus on wellness tourism, heritage exploration, and sustainable eco-retreats aligns closely with global demand trends.

Technological transformation will also shape the future of the leisure industry. Artificial intelligence, virtual reality (VR), big data, are becoming integral to delivering personalised, frictionless guest experiences. Meanwhile, rising consumer consciousness about the climate crisis will pressure operators to go beyond surface-level green initiatives and adopt measurable, third-party verified ESG practices.

Regulatory bodies in the EU and other developed markets are already pushing for transparent reporting of environmental claims, making genuine sustainability credentials a prerequisite for international competitiveness.

From a business model perspective, collaboration will be critical to success. Hotels and resorts will increasingly rely on strategic alliances with online travel agencies (OTAs), destination management companies (DMCs), wellness service providers, and even local communities to curate compelling guest experiences. Co-branding, cross-promotion, and bundled offerings will grow as operators seek differentiation in a highly saturated digital marketplace.

For Serendib Hotels PLC, these trends present both challenges and opportunities. The Group/ Company must continue to build agility, strengthen its position in wellness and cultural tourism, and invest in sustainable infrastructure to meet the evolving expectations of tomorrow's traveller. With Sri Lanka gaining recognition as an upmarket destination and tourism revenues returning to growth, Serendib Hotels PLC is well-positioned to capitalise on these tailwinds by offering authentic, eco-conscious, and digitally integrated leisure experiences.

Overall, while the travel and tourism sector is set for strong recovery and growth in 2025, effectively addressing the associated challenges will be essential to maintaining this momentum and ensuring long-term success.