Report of the Audit Committee

The Audit Committee comprises four (4) members, including one Senior Chartered Accountant. The Committee is chaired by Mr A D B Talwatte, with Corporate Services (Private) Limited serving as the Secretaries to the Committee. The Group Managing Director and Managing Director attend meetings by invitation, while the Group Chief Financial Officer and Sector Financial Controllers attend as required. The Committee’s Charter adheres to international best practices and undergoes an annual review to incorporate current developments and other necessary considerations.

Composition

Mr A D B Talwatte (Chairman) Independent Non-Executive

Mr A Cabraal (Member) Independent Non-Executive

Mr S Shishoo (Member) Independent Non-Executive

Mr S Renganathan (Member) Independent Non-Executive

Meetings

The Audit Committee met five (05) times during the year. Attendance of the Committee members at each of these meetings is as follows.

Attendance

	Meetings
Mr A D B Talwatte (Chairman) Independent Non-Executive	05 of 05
Mr A Cabraal (Member) Independent Non-Executive	05 of 05
Mr S Shishoo (Member) Independent Non-Executive	03 of 05
Mr S Renganathan (Member) Independent Non-Executive	05 of 05

Responsibilities of the Audit Committee

The primary objectives of the Audit Committee include:

• Ensuring the Company's Financial Statements present a true and fair view
• Complying with applicable financial reporting standards and relevant laws and regulations
• Maintaining an effective system of internal controls and risk management, and overseeing an independent external audit process

The Audit Committee receives representations from the Group Chief Financial Officer concerning compliance with laws and regulations, the adequacy and effectiveness of internal control systems, any incidents of fraud, and the Company's going concern status. The Committee reviews the published Financial Statements, assesses regulatory compliance, evaluates the impact of risks, fraud, and errors, reviews internal audit reports and external audit findings, and recommends the appointment and remuneration of the external auditors.

The Report of the Audit Committee to the Board of Directors of Sunshine Holdings PLC

The Committee reviewed the financial reporting system adopted by the Group in the preparation of its quarterly and annual Financial Statements to ensure reliability of the processes and consistency of the accounting policies and methods adopted and their compliance with the Sri Lanka Financial Reporting Standards. The methodology included obtaining statements of compliance from Heads of Finance of the operating units. The Committee recommended the Financial Statements to the Board for its deliberations and issuance. The Committee, in its evaluation of the financial reporting system, also recognised the adequacy of the content and quality of routine management information reports forwarded to its members periodically.

To fulfill its obligations the Audit Committee carried out the following activities

• Reviewed and discussed the consolidated Financial Statements for the financial year ending 31st March 2024 with management and the independent auditors
• Ensured the consolidated Financial Statements comply with Sri Lanka Financial Reporting Standards and accurately represent the Company's operations and financial position
• Coordinated with the Risk Committee to review procedures for identifying and managing business risks
• Assessed the operational effectiveness of internal controls
• Discussed and reviewed information system security measures implemented by management
• Reviewed compliance reports from Senior Management to monitor adherence to laws and regulations
• Evaluated the Company's ability to continue as a going concern based on the audited Financial Statements
• Reviewed and discussed annual and quarterly Financial Statements prior to their release, ensuring compliance with Sri Lanka Financial Reporting Standards and the Companies Act, No. 7 of 2007
• Examined internal audit reports and external audit findings to support the integrity of reported results
• Reviewed procedures established by management for regulatory compliance
• Recommended to the Board the approval of non-audit services to be granted to the external auditors
• Obtained a confirmation of independence from the external auditors and recommended KPMG Chartered Accountants as the independent auditors to audit and report on the annual consolidated Financial Statements

External Auditor

The Committee is satisfied that the independence of the External Auditors has not been impaired by any event or service that gives rise to a conflict of interest. Due consideration has been given to the nature of the services provided by the Auditors and the level of audit and non-audit fees received by the Auditors from Sunshine Holdings PLC and its subsidiaries. The Committee also reviewed the arrangements made by the Auditors to maintain their independence and confirmation has been received from the Auditors of their compliance with the independence guidance given in the Code of Ethics of the Institute of Chartered Accountants of Sri Lanka. The Committee also met the External Auditors without management being present, prior to the finalization of the Financial Statements.

The Committee is independent from External Auditors and Internal Auditors of the Company and the Group.

Conclusion

The Committee believes that adequate controls and procedures are in place to provide reasonable assurance that the Company's assets are safeguarded and that the reported financial results present a true and fair view. The Audit Committee concurs that the adoption of the going concern premise in the preparation of the Financial Statements is appropriate. The Audit Committee recommended to the Board of Directors that the Financial Statements as submitted be approved.

On behalf of the Audit Committee.

A D B Talwatte
Chairman
Audit Committee
30 May 2024