Annual Report - 2024/2025

Annual Report 2024/2025

ESTD: 1941

TH E SWA D ES H I IND U ST RIAL WO R KS P LC .

(Manufacturer and Marketer of Personal Care and Fabric Care Products)

Our Vision

To be the most sought after Sri Lankan Company providing preferred solutions for personal care and cleaning needs of customers in both local and selected international markets.

Notice of Meeting

NOTICE IS HEREBY given that the Annual General Meeting of The Swadeshi Industrial Works PLC will be held at Havelock City Club House, No. 324, Havelock Road, Colombo 6, on Friday the 12th September 2025 at 3.00 p.m. for the following purposes: -

1. To resolve to receive and consider the Report of the Directors, the Audited Financial Statements for the year ended 31st March 2025 and the Report of the Auditors thereon;

2. To resolve to declare that the age limit stipulated in Section 210 of the Companies Act No. 07 of 2007 shall not apply to Ms. Amari Mandika Wijewardene who has attained the retirement age stipulated in Section 210 of the said Act and who has attained the age of 75 years and that her re-appointment for another one year in terms of Section 211 of the said Act be approved and to Resolve to re-elect her as a Director of the Company in terms of the said Section 211;

3. To resolve to re-elect Mr. Maria Innasimuthu An-thoney Manievannan who retires by rotation at the Annual General Meeting and has offered himself to be re-elected, as a Director;

4. To resolve to re-elect Mr. Hugh Kavinda Dias Abeyesinghe who retires by rotation at the Annual General Meeting and has offered himself to be re-elected, as a Director;

5. To resolve to re-appoint M/s. Ernst & Young, Chartered Accountants as the Auditors of the Company and to authorize the Board of Directors to determine their remuneration;

6. To resolve to declare a first and final Dividend of Rs. 1.50 per share as recommended by the Board of Directors on 04th August 2025; and

7. To consider any other business of which due notice has been given.

By order of the Board for and on behalf of

THE SWADESHI INDUSTRIAL WORKS PLC

M & A Company Secretaries (Private) Limited Secretaries to the Company

No. 28 (Level 2),

W.A.D. Ramanayake Mawatha, Colombo 02.

04th August 2025

Corporate Information

The Swadeshi Industrial Works PLC

A Quoted Public Company

with limited liability incorporated in Sri Lanka in 1941

The ordinary shares of the Company are listed on the Colombo Stock Exchange of Sri Lanka.

No 57,

Colombo Road Kandana

No 57,

Colombo Road Kandana

No. 28(Level 2)

W.A.D Ramanayake Mawatha, Colombo 02

Messrs Ernst & Young Chartered Accountants Rotunda Towers

No. 109, Galle Road,

P.O. BOX 101

Colombo 03

Messrs D L & F De Saram Attorney- at Law & Notaries Public No 47, Alexandra Place

Colombo 07

Peoples Bank

Commercial Bank of Ceylon PLC Nations Trust Bank PLC

DFCC Bank PLC

Hatton National Bank PLC National Development Bank PLC. Union Bank of Ceylon PLC.

Directors' Profile

Board of Director

Ms. A.M. Wijewardene has over 40 years of experience in Commercial, Genaral Management and export businesses.

Mrs. Samarasinghe holds a BA Honours Degree and a Masters Degree from the University of Hull United Kingdom. She has more than 25 years of experience in General Management and Supply Chain Management and functions as Managing Director/ Deputy Chairperson of the Swadeshi Industrial Works PLC and its subsidiaries

Mr. Samarasinghe has over 36 years of professional and commercial experience and serves on the Board of Directors of several publicly listed and unlisted corporates. Mr. Samarasinghe was the Past Chairman of the Sri Lanka Institute of Directors, Employers' Federation of Ceylon, Industrial Association of Sri Lanka, Condominium Developers Association of Sri Lanka and EFC Affiliated Group of Companies. He was the Past President of the Chartered Institute of Management Accountants Sri Lanka Division and former Council Member, CIMA (UK). He served as a Board member of the Ceylon Chamber of Commerce and Sri Lanka Accounting and Auditing Standards Monitoring Board.

Mr. Samarasinghe is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and Chartered Institute of Management Accountants UK and holds a Master's Degree in Business Administration.

Mr. Wijemanna obtained the Bachelor of Laws degree (LLB) with first class Hons from the University of Colombo and Master of Laws Degree (LLM) from the University of London. He is an Attorney-at-Law, Notary Public and a Commonwealth and Chevening scholar of the United Kingdom. He is a Fellow of the Institute of Advance Legal studies, London, a Governing Board Member, of the Ocean University of Sri Lanka and a Director of Sanasa Development Bank. Formerly, he was General Counsel of DFCC Bank, Legal Adviser to the Ministry of Foreign Affairs in Colombo and Director General of SAARC Arbitration Council in Islamabad. He was also Chairman of the National Institute of Business Management (NIBM) and President of Association of Corporate Lawyers, Sri Lanka. He counts over forty years of experience as a Lawyer, Administrator and Banker.

Mr. Abeyesinghe is an Honours Graduate in Law from the University of Hull, England, a Barrister of the Middle Temple, England and an Attorney-at-Law. Holds a Master's Degree in International Relations from the University of Colombo. A Senior Counsel with over 31 years of experience in Civil Litigation in the original and Appellate Courts of Sri Lanka who specialises in Banking and Commercial Law.

Mr. Manievannan is the Managing Partner of Manievannan & Co., and Elizinn & Co., (Chartered Accountants) established in 2003 and 2006 respectively. He is the Precedent Partner of S. Saverimuttu & Co., a pioneering Firm of Chartered Accountants established in 1932. He is an Associate of the Institute of Chartered Accountants of Sri Lanka and the Institute of Certified Management Accountants of Sri Lanka. Having commenced his accounting and auditing career in 1994 with M/s. Kreston MNS & Co., (Chartered Accountants), he counts over 26 years of experience in finance and accounting. Presently he provides advisory services in Auditing, Tax planning, Business re-structuring, Outsourcing and Compliance.

Chairperson's Review

It is with pleasure that I present the Annual Report and Audited Financial Statements of The Swadeshi lndustrial Works PLC for the year ended 31st March 2025. Please find below a brief review of the commercial environment in which the Company operated and the performance of the Group during the period under review.

The economic landscape in Sri Lanka during the past year has been challenging, characterized fluctuating consumer spending, supply chain disruptions, and inflationary pressures. Despite these hurdles, Sri Lanka's gradual economic recovery has been supported by considerable agricultural output, foreign remittances and a rebound in the tourism sector, which together provided some relief to the broader economy.

The group turnover decreased by 5.7% to record Rs 4,473 Mn for the year ended 31st March 2025. This turnover decline was primarily due to a significant decrease in household consumption caused by a depletion of disposable income and price reductions. The group recorded an operating profit of Rs 43 million for 2024/2025, compared to Rs 240 million in the prior year. The Profitability decreased mainly due to the lower turnover and increased operating expenses during the year. The group profit before tax decreased to Rs 3.2 million for 2024/2025, compaired to Rs. 189 million in 2023/2024.

Looking ahead, we remain cautiously optimistic about the future. While we anticipate continued economic challenges, we are confident in our ability to adapt and thrive. Our focus will remain on expanding our product portfolio, innovating our existing product range, enhancing our distribution network, and deepening our engagement with consumers. Our strategic priorities will include exploring new growth avenues, both locally and internationally, while maintaining our commitment to operational excellence and ethical business practices.

I extend my sincere appreciation to our valued customers and business partners for their continued loyalty, support and cooperation.

I wish to thank the members of the Board and Management team for their contribution and the Shareholders for the display of confidence.

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A.M Wijewardene (Ms) Chairperson

04th August 2025

Risk Management Report

STRUCTURE

Board of Directors

Audit Committee

Group Management Committee

Head of Departments

Employees

Risk arises in all our business activities. Risk, in our context, is the component, which has the potential to negatively affect business or an organization. Its' significance is measured in terms of the probability of occurrence.Therefore, an integrated risk management framework has become a mandatory existence, which provides the guideline for managing risks. Managing risk is a key aspect of the Board's stewardship obligations and a component of the 'performance' dimension of Enterprise Governance.

PROCESSES

Identify, Evaluate, Treat and Monitor

Risk Appetite

Oversight Review

Measurement Feedback

Feedback

The risk management framework illustrates our approach to risk management, reflecting the risk management process, the structure in place to administer the process and sources of comfort with regard o its effectiveness.

Independent Audit

Internal Control

A risk cannot be viewed in isolation as it is interconnected, and one aspect might give rise to various other factors. The Swadeshi Industrial Works PLC group has a structured risk management process to address different risk categories: Strategic, Operational, Compliance and Financial. The Board is responsible for ensuring effective risk management and recognizes that the proper management of risk is a core leadership function that must be practiced throughout the Organization. Internal Audit process coordinates the identification and documentation of control risk areas throughout the Group, enhancing the risk management system and monitoring its effectiveness at regular intervals.

ASSURANCE

Internal Audit

In addition, during the year-end, the External Auditor issues a Management Letter and informs the Group Management Committee, Audit Committee and the Board of Directors of the outcome of these evaluations. These outcomes are taken into account in the continuing enhancement of our risk management system. Further the Audit Committee constantly evaluates risk, its impact and measures taken to manage risk. The principal aim of the Group's risk management governance structure and system of Internal Control is to manage business and operational risks, with a view to enhancing the value of shareholders' investments and safeguarding assets.We have put in place a number of key policies, processes and independent controls to provide assurance to the Board on the integrity of our reporting and effectiveness of our systems of Internal Control and risk management.

Corporate Governance

The Board of Directors of Swadeshi Industrial Works PLC is committed to maintain high standards of Corporate Governance.

The Directors recognize Corporate Governance as the systems employed to manage the business and affairs of the Company towards enhancing the objective of realizing Shareholder value, whilst taking into account the interest of all Stakeholders. This statement sets out the Corporate Governance policies, practices and processes adopted by the Board.

The Board of Directors of The Swadeshi Industrial Works PLC comprise six Directors. The Chairperson and the Managing Director are Executive Directors of the Company. The other four Directors are Non-Executive Directors of whom two are Independent Directors. Non-Executive Directors of the Company have made declarations of their independency or non-independency.

During the year the Board met on 12 occasions. Prior to each meeting, the Directors were provided with all relevant management information and background material relevant to the Agenda to enable informed decisions. Board Papers are submitted in advance on group performance, capital Investments, working capital and other issues which require specific Board approval.

In compliance with the requirement of the CSE Listing Rules, the Board has delegated responsibilities to four Board Sub Committees which operate within clearly defined terms of reference.

The Audit Committee comprises of three Directors namely Mr. M.I.A Manievannan, Mr. Hugh Kavinda Dias Abeyesinghe, Mr. Pravir Samarasinghe and two of its members i.e. Mr. Hugh Kavinda Dias Abeyesinghe and Mr. M.I.A Manievannan are Independent Directors. The Managing Director, Chief Executive Officer and the Finance Manager attend meetings on invitation.

The Audit Committee Report at page 11 describes the activities carried out by the Committee during the financial year.

Corporate Governance

The members of the Remuneration Committee comprises of three Non-Executive Directors namely, Mr. Thusantha Wijemanna and Mr. Hugh Kavinda Dias Abeyesinghe and Mr. P.D Samarasinghe which of its one member is independent.

The Report of the Remuneration Committee is on page 13 which highlights its main activities.

Samarasinghe and two of its members i.e. Mr. Hugh Kavinda Dias Abeyesinghe and Mr. M.I.A Manievannan are Independent Directors. The Managing Director and Chief Executive Officer attend meetings on invitation. Nomination and Governance Committee Report on

page 15 describes the activities carried out by the Committee during the financial year.

its members i.e. Mr. Hugh Kavinda Dias Abeyesinghe and Mr. M.I.A Manievannan are Independent Directors. The Managing Director and Finance Manager attend meetings on invitation.The Related Party Transactions Review Committee Report on page14 describes

activities carried out by the committee during the year .

The Board is responsible for instituting effective Internal control systems to safeguard the assets of the Company, and ensure that accurate and complete records are maintained from which reliable information is generated. The system includes controls including financial, operational and risk management.

Internal Audits are carried out by external Chartered Accountancy firms to ensure control systems are appropriately maintained. The findings are reviewed first by the Audit Committee and significant issues are thereafter reported to the Board of Directors.

A budgetary control system is in place, in which annual budgets identifying the critical parameters and functional objectives, are prepared and approved by the Board at the commencement of a financial year, and its achievement monitored through a monthly management reporting system.

The financial statements of the Group are prepared in compliance with the guidelines of the Sri Lanka Accounting Standards and other statutory regulations. Financial statements are published quarterly in line with the Listing Rules of the Colombo Stock Exchange through which all significant developments are reported to Shareholders quarterly. The Board of Directors, to the best of their knowledge and belief are satisfied that all statutory payments have been made up to date.

The Directors have continued to use the 'Going Concern' basis in the preparation of the financial statements. After careful review of the financial position and cash flow status of the Group, the Board of Directors believe that the Group has adequate resources to continue in operation for the foreseeable future.

Corporate Governance

Mr. M.I.A Manievannan was appointed to the Board as a Director with effective from 29th July 2024, upon the resignation of Mr. V.M.J.A. Perera who had served on the Board for 29 Years.

Corporate Governance

Number of Board Meetings during the year

The Company had 12 Board Meetings during the financial year

Number of Audit Committee Meetings

The Company had 4 Audit Committee Meetings during the year

Mr. M.I.A Manievannan was appointed to the Committee as Chairman and Mr. Thusantha Wijemanna resigned from the Committee with effective from 29th July 2024.

Number of Nomination and Governance Committee Meetings

The Company had a Nomination and Governance Committee Meeting during the year

Number of Related Party Transactions Review Committee Meetings

The Company had 4 RPTRC Meetings during the year

Mr. M.I.A Manievannan was appointed to the Committee and Mr. P.D. Samarasinghe resigned from the Committee with effective from 29th July 2024.

Number of Remuneration Committee Meetings

The Company had a Remuneration Committee Meeting during the year

Report of the Audit Committee

The Audit Committee Comprises of the following members :

Mr. M.I.A Manievannan - Chairman / Non Executive Independent Director

Mr.Hugh Kavinda Dias Abeyesinghe - Member / Non Executive Independent Director

Mr.Pravir Samarasinghe - Member / Non Executive Director

The Chairman of the Committee is an Associate of Institute of Chartered Accountants of Sri Lanka (ACA) and the Institute of Certified Management Accountants of Sri Lanka. Mr Pravir Samarasinghe is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and Chartered Institute of Management Accountants, United Kingdom.

The Managing Director, Chief Executive Officer and Finance Manager are invited, if deemed necessary, for Audit Committee meetings.

The purpose of the Audit Committee is to assist the Board in fulfilling its overall responsibilities for the financial reporting process, the system of internal control over financial reporting, the audit process and the Company's processes for monitoring compliance with laws and regulations.

The principal activities of the Committee during the year are detailed below.

The Audit Committee conducted four meetings during the year under review.

The Committee reviewed the Quarterly & Annual Financial Statements and Annual Report prior to publication to ensure such Statements are prepared in accordance with the Sri Lanka Accounting Standards and other provisions.

The Internal Audit program were reviewed by the Committee to ensure that an effective Internal Control System is in place to safeguard the Company's Assets and the reliability of the Company's Financial Statements. These Internal Audit programs were

implemented through external Chartered Accountancy firms and the Internal Audit Reports were reviewed and explanations obtained from the Management.

Working capital and treasury management were monitored.

The company has adopted an enterprise risk management methodology to assess the potential risk exposure to each of the Group Companies. (Please refer note No.26 to the Financial Statements on the risk management objectives and policies)

During its Meetings, the Committee reviewed the effectiveness of the internal control systems and the Group's exposure to business and financial risks. Processes are in place to safeguard the assets of the organization and to ensure that the financial reporting system can be relied upon in the preparation and presentation of financial statements. A Budgetary control and monitoring system is implemented.

The Committee having given due consideration to the nature of the services provided by the Auditors and the level of audit services provided by the Auditors to The Swadeshi Industrial Works PLC and the audit fees charged by them, are satisfied of the Independence of the External Auditors. The Committee also noted that the External Auditors have no conflict of interest that had arisen during the year ended 31st March 2025 and hence the independence of the External Auditors has not been impaired. The fees paid to the Auditors are shown under page No 20.

As far as the Directors are aware, the Auditors do not have any relationship (other than that of an Auditor) with the Company or any of its subsidiaries. The Auditors also do not have any interest in the Company or its subsidiaries as required by Section 168 (1) (j) of the Companies Act No. 7 of 2007.

The Committee also noted the arrangements made by the Auditors to maintain their independence.

Annual Report 2024 - 2025 The Swadeshi Industrial Works PLC

Report of the Audit Committee

The Audit Committee recommended to the Board of Directors that M/s Ernst & Young, Chartered Accountants be re-appointed as auditors of the Company for the financial year ending 31st March 2025, subject to the approval of the shareholders at the Annual General Meeting. The recommendation was made upon the confirmation obtained from the Auditors on their compliance with the independent guidance given in the Code of Ethics of the Institute of Chartered Accountants of Sri Lanka.

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Mr. M.I.A Manievannan - Director Chairman

04th August 2025

Report of the Remuneration Committee

The Remuneration Committee comprises of three Non-Executive Director's namely, Mr. P.D. Samarasinghe, Mr. Thusantha Wijemanna and Mr. Hugh Kavinda Dias Abeyesinghe out of which one member is independent. The Committee is responsible for recommending the policy of remuneration for the Executive Directors and Senior Management.

The Committee took into consideration the Company, Group and employee performance in determining the overall remuneration policy.

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Mr. H.K.D. Abeyesinghe Chairman

04th August 2025

Report of the Related Party Transactions Review Committee (RPTRC)

The Related Party Transactions Review Committee (RPTRC) comprises of the following members;

Mr. Hugh Kavinda Dias Abeyesinghe - Chairman / Non Executive Independent Director

Mr.Thusantha Wijemanna - Member / Non Executive Director

Mr. M.I.A Manievannan - Member / Non Executive Independent Director

The Chairman of the Committee is a Barrister and an Attorney at Law. Mr.Thusantha Wijemanna is an Attorney-at-Law. Mr. M.I.A Manievannan is an Associate of the Institute of Chartered Accountants of Sri Lanka and Institute of Certified Management Accountants of Sri Lanka.

The Managing Director & Finance Manager are invited if deemed necessary for Related Party Transactions Review Committee meetings.

The objective of the Committee is to ensure that the interests of shareholders as a whole are taken into account by the Company when entering into Related Party Transactions, in compliance with the provisions of the Code of Best Practice and Listing Rules. Further the Committee takes certain measures to prevent Directors, Chief Executive Officers or substantial Shareholders taking advantage of their positions.

The mandate of the Committee is derived from the Code of Best Practice and the Listing Rules and includes mainly the following:

• Developing and maintaining a related party transactions policy consistent with the provisions of the Code of Best Practices and the Listing Rules.

• Reviewing all proposed Related Party Transactions ("RPT") to ensure compliance with the provisions of the Code of Best Practice and the Listing Rules.

• Advising the Board of Directors on making immediate market disclosures and disclosures in the Annual Report

  where necessary, in relation to non-recurrent and recurrent related party transactions.

• Setting guidelines for senior management to follow in such circumstances.

The Committee held meetings every quarter and reviewed all Related Party Transactions of the Company in order to ensure that those transactions have taken place in accordance with the guidelines established by the Committee in compliance with the Code of Best Practice and Listing rules. The Committee was satisfied that the transactions are on normal commercial terms and are not prejudicial to the interests of the entity and its minority shareholders. The minutes of the meetings are tabled at Board meetings.

It was noted that, during the financial year there were no Non-Recurrent Related Party Transactions where the aggregate value exceeds 10% of the equity or 5% of the total assets, whichever is lower. Recurrent Related Party Transactions where the aggregate value exceeds 10% of the gross revenue income is given in Note.24 to the Audited Financial Statements for the year ended 31st March 2025. Thus, shareholder approval by way of a Special Resolution or immediate disclosure was not required.

The Board of Directors confirmed that the related party transactions are in compliance with the Code of Best Practices and the Listing Rules.

All related party transactions for the year ended 31st March 2025 are disclosed in the Financial Statements.

……………………………….

Mr. Hugh Kavinda Dias Abeyesinghe Chairman

04th August 2025

Report of the Nomination and Governance Committee

The Nomination and Governance Committee

comprises of the following members;

Mr. Hugh Kavinda Dias Abeyesinghe - Chairman / Non Executive Independent Director

Mr. M.I.A Manievannan - Member / Non Executive Independent Director

Mr.Pravir Samarasinghe - Member / Non Executive Director

The Chairman of the Committee is a Barrister and an Attorney at Law. Mr. M.I.A Manievannan is an Associate of the Institute of Chartered Accountants of Sri Lanka. Mr Pravir Samarasinghe is a Fellow Member of the Institute of Chartered Accountants of Sri Lanka and Chartered Institute of Management Accountants United Kingdom.

Managing Director & Chief Executive Officer are invited if deemed necessary for Nomination and Governance Committee meetings.

The objective of the Committee is to establish and maintain a formal procedure for the appointment of new Directors and re-election of Directors to the Board through the Nominations and Governance Committee, in compliance with the provisions of the Code of Best Practice and Listing Rules.

The mandate of the Committee is derived from the Code of Best Practice and the Listing Rules and includes mainly the following:

• Evaluate the appointment of Directors to the Board of Directors and its Committees, ensuring the required expertise and succession.

• Consider and recommend (or not recommend) the re-appointment/ re-election of current Directors based on the combined knowledge, experience, performance and contribution made by the Director to meet the strategic demands of the Company, the discharge of the Board's overall responsibilities and the number of directorships held by the Director in other listed and unlisted companies and other principal commitments.

• Establish and maintain a formal and transparent procedure to evaluate, select and appoint/ re-appoint Directors of the Company.

• Establish and maintain a set of criteria for selection of Directors such as the academic/ professional qualifications, skills, experience, and key attributes required for eligibility, taking into consideration the nature of the business of the Company and industry specific Requirements.

• Establish and maintain a suitable process for the periodic evaluation of the performance of the Board of Directors and the CEO of the Company to ensure that their responsibilities are satisfactorily discharged

• Develop a succession plan for the Board of Directors and Key Management Personnel of the Company.

• Review the structure, size and composition of the Board and Board Committees with regard to effective discharge of duties and responsibilities.

• Review and recommend the overall corporate governance framework of the Company taking into account the Listing Rules of the Exchange, other applicable regulatory requirements and industry/ international best practices.

• Periodically review and update the corporate Governance Policies / Framework of the Company in line with the regulatory and legal developments relating to same, as a best practice.

The Committee held a meeting and reviewed all Related Nomination & Governance of the Company in order to ensure that those are in compliance with the guidelines established by the Committee & with the Code of Best Practice and The Listing rules. The Committee reviewed the Audit Committee Chairperson's qualification as per the requirements of Rule 9.13.3 of the Listing Rules of the Colombo Stock Exchange and recommended accordingly. The minutes of the meetings are tabled at Board meetings.

.

All appropriate Nomination and Governance requirements for the year ended 31st March 2025 are disclosed in the Financial Statements.

……………………………….

Mr. Hugh Kavinda Dias Abeyesinghe Chairman

04th August 2025

Group Chief Executive Officer's and Group Finance Manager's Rensponsibility Statement

The Consolidated Financial Statements of The Swadeshi Industrial Works PLC are prepared in compliance with Sri Lanka Financial Reporting Standards/SLFRS issued by the Institute of Chartered Accountants of Sri Lanka, The Companies Act No 07 of 2007, Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995, and the Listing Rules of the Colombo Stock Exchange. The Accounting Policies used in the preparation of the Consolidated Financial Statements are appropriate and are consistently applied by the Company (material deviations, if any, have been disclosed and explained in the Notes to the Consolidated Financial Statements). There are no deviations from the prescribed Accounting Standards in their adoption. Comparative information has been reclassified wherever necessary to comply with the current presentation.

The significant accounting policies and estimates that involve a high degree of judgment and complexity were discussed with our External Auditors and the Audit Committee. The Board of Directors, the Audit Committee and the Group Finance Manager of the Company accept responsibility for the integrity and objectivity of these Consolidated Financial Statements. The estimates and judgments relating to the consolidated Financial Statements were made on a prudent and

were audited by Messrs, Ernst & Young, Chartered Accountants and their report is given at page 22 of this Annual Report. The Audit Committee of the Company meets periodically with the Internal Audit team and the External Auditors to review. their audit plans, assess the manner in which these Auditors are performing their responsibilities and to discuss their reports on internal controls and financial reporting issues. To ensure complete independence, the External Auditors and the Internal Auditors have full and free access to the members of the Audit Committee to discuss any matters of substance. The Audit Committee pre-approves the audit and non-audit services provided by our External Auditors Messrs, Ernst & Young in order to ensure that the provision of such services does not impair the External Auditor's independence. We confirm that the Company has complied with all applicable laws and regulations and guidelines and that there are no material litigation that is pending against the Company other than those disclosed in the Financial Statements in this Annual Report.

reasonable basis, in order that the Consolidated Financial Statements reflect in a true and fair manner, the forms and substance of transactions and that the Company's state of affairs is reasonably presented. To ensure this, the Company has taken proper and sufficient care in installing a system of internal control and accounting records, for safeguarding assets and for preventing and detecting frauds as well as other irregularities, which is reviewed, evaluated and updated on an ongoing basis. Our Subsidiaries' Internal Auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed. However, there are inherent limitations that should be recognized in weighing the assurance provided by any system of internal controls and accounting. The Consolidated Financial Statements of the Company

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Mr. Iraj Ambegoda Group Finance Manager 04th August 2025

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Mr. Amila Udawatte Group Chief Executive Officer 04th August 2025

Annual Report of the Board of Directors

The Board of Directors of The Swadeshi Industrial Works PLC take pleasure in presenting the Annual Report together with the audited financial statements of the Group and the Company, for the year ended 31st March 2025.

The Swadeshi Industrial Works PLC is a Public Company with limited liability incorporated on 18th December 1941 under the Company's ordinance No. 51 of 1938 and re-registered on 23rd April 2008 under the provisions of the Companies Act No. 7 of 2007 and assigned the Company re-registration number PQ 133. The Company shares are listed in the stock exchange since the year 1970. At present the company shares are listed in the Diri Savi Board.

The principal activities of the Company continue to be manufacturing and marketing of toilet soap, laundry soap and personal care products during the year under review (as required by Section of the Companies Act 168 (1) (a). There have been no material changes to the activities of the Company or any of its subsidiaries during the period under review.

The Chairperson's review at page 05 describes the year's activities and future developments of the Company.

The Group intends to further strengthen its distribution and marketing activities and to enhance the product range to improve turnover and profitability.

The gross turnover of the Group was Rs. 4,473 Mn. Trade between Group Companies is conducted at fair market prices.

Capital expenditure on Property, Plant, Equipment and work-in-progress incurred during the year under review is disclosed under Note 12 to the financial statements. The value of property stated in the financial statements is not in excess of its current market values.

The corporate income tax rate applicable to the Company was 30%. Details of the Group's exposure to taxation are disclosed in Note 10 to the financial statements.

The Stated Capital of the Company as at 31st March 2025 was Rs. 150,634,670/-. Details of the Stated Capital is given under Note 19 to the financial statements.

The financial statements which include the statement of comprehensive income, statement of financial position, statement of changes in equity, cash flow statements and notes to financial statements are given at pages 26 to 30 and have been prepared in conformity with the Sri Lanka Accounting Standards and the requirement of Section 168(1) (b) of the Companies Act No 7 of 2007 and the listing rules of the Colombo stock exchange. The directors approved the financial statements on 04th August 2025

The financial statements for the period under review were audited by Messrs Ernst & young, Chartered Accountants, for the year ended 31st March 2025 and the Independent Auditor's report issued thereon appears at page 22 of this Annual Report as required by section 168(1) (c) of the Companies act No. 7 of 2007.

Annual Report of the Board of Directors

Key Management Personnel (KMP) of the company comprise the Board of Directors. Directors' fees and emoluments, in respect of the Group for the financial year ended 31st March 2025 is as follows,

Directors' Fees and 105,726,922 81,368,535 Emoluments

This is being disclosed as required by Section 168(1)

(f) of the Companies Act No. 7 of 2007.

The Company maintains an Interest Register as required by Section 168(1) (e) the Companies' Act No. 07 of 2007. Information pertaining to Directors' Interest in contracts and decisions on emoluments are disclosed in the Interest Register.

Directors' interest in contracts in relation to transactions with related entities, transactions with key management personnel and other related disclosures are stated in Note 24 (Related Party Disclosures) to the financial statements. In addition, the Company carried out transactions in the ordinary course of business with Group Entities having one or more Directors in common. The Directors have no direct or indirect interest in any other contracts.

The Company and its subsidiaries carried out transactions in the ordinary course of its business at commercial terms with the following entities during the year.

The names and profile of the Directors of the Company who served on the Board during the financial year are shown at page 04. There was a new appointment and a resignation to the Board during the financial year under review. This has been disclosed as required by section 168(1) (h) of the Companies Act No. 7 of 2007 at the page No.09.

Mr. Hugh Kavinda Dias Abeyesinghe and Mr. M.I.A Manievannan, directors who retire by rotation being eligible, are recommended for re-election.

In accordance with Section 211 of the Companies Act No.07 of 2007 Ms. Amari Mandika Wijewardene who has attained 75 years of age and being eligible, offers herself for re-election.

Annual Report of the Board of Directors

The shareholding of the Directors as at the end of the year is given below.

The Board has appointed four Sub-Committees namely, the Audit Committee, the Remuneration Committee, Nomination and Governance Committee and Related Party Transactions Review Committee (RPTRC). Their composition and report are given at pages 10 to 15 of the annual report.

During the financial year, the Company has not made any donations. This is being disclosed as required by Section 168(1) (g) of the Companies Act No. 7 of 2007.

There have not been any material events that have occurred subsequent to the balance sheet date that require disclosure or adjustments to the financial statements, other than those disclosed, if any, under Note 28 to the financial statements.

The Directors acknowledge their responsibility for the Group's corporate governance and the system of internal control. The practices implemented by the Company in relation to internal controls are explained in the report of corporate governance at Page 07 to 10 of this report. the Board is satisfied with the effectiveness of the system of internal control for the period up to date of signing the financial statements.

The Group has not engaged in any activity contravening the laws and regulations applicable in Sri Lanka. Financial statements are published quarterly and is in line with the listing rules of the Colombo Stock Exchange through which all significant developments are reported to shareholders on a quarterly basis.

The Company's employment policy is totally non-discriminatory and equal opportunities are given to all employees irrespective of ethnic, race, origin, religion, political opinion, gender or marital status. The Company applies 'equal opportunity policy' ensuring that all decisions are based on merit and qualification. Further the employment policies are designed to attract talent, train and develop required skills and retain such persons for the benefit of the Group, Salaries are usually adjusted to reflect the Company and employee performance.

The employees are always encouraged to discuss issues relating to operations and to make suggestions to improve performance.