Responsibility for the Report

Annual Report of the Board of Directors on the affairs of the Company

The Directors are pleased to present this 52nd Annual Report of your Company together with the Audited Financial Statements of Sunshine Holdings PLC (the “Company”), and the Audited Consolidated Financial Statements of the Group for the year ended 31 March 2025 and the Independent Auditors’ Report conforming to all relevant statutory requirements.

The details set out herein provide information required by Section 168 of the Companies Act No. 07 of 2007 (‘Companies Act’) to be set out in the Annual Report of the Board of Directors on the Affairs of the Company and are guided by the Code of Best Practice on Corporate Governance 2023.

Review of business

[Section 168 (1) (a)]

The nature of the business of the Company and its subsidiaries together with any change thereof during the accounting period.

– Vision, Mission and Corporate Conduct

The Company’s vision and mission are provided on page 12. The Company’s business activities have been carried out within the framework of the vision and mission statement, which reflects our commitment to the highest ethical standards and integrity as set out in the Code of Business Conduct and Ethics, and in conformity with the corporate culture and the values of the Company stated on page 12 of this Report.

– Principal business activities

The Principal activities of the Group are categorised into different business sectors. i.e. Healthcare, Agriculture, Consumer, 11 and others. The main activities of the sectors are described in the Portfolio Review pages on 13 to 16 of this Report.

There were no material changes in the nature of the business of the Company and the Group during the financial year. The Directors to the best of their knowledge and belief, confirm that the Company and the Group has not engaged in any activity that contravene laws and regulations.

– Group structure

The details of the Group structure have been given on page 127 of this Annual Report.

– Review of operations of the Company and the Group

The Group’s businesses and their performance during the year, with comments on financial results, as well as future business developments are appraised in the Reflection from the Chairman (pages 18 to 19) and portfolio review (pages 13 to 16) of this Report. Those also provide an overall assessment of the state of affairs of the Group and the Company with details of important events that took place during the period.

– Future developments

An overview of the future developments of the Company is presented in the Message from Board of Directors (pages 65 to 76) Reflections from our Group Chief Executive Officer (pages 20 to 21) and Performance and Value Creation (pages 31 to 66).

Financial statements

[Section 168 (1) (b)]

Completed and signed Financial Statements of the Company and the Group.

The Financial Statements of the Company and the Group for the year ended 31 March 2025 have been prepared in accordance with the requirements of the Sri Lanka Accounting Standards (SLFRSs and LKASs) and comply with the requirements of the Companies Act No. 07 of 2007 and were duly certified by the Group Chief Financial Officer (the person responsible for the preparation of the financial statements) and were approved by two members of the Board as appearing on page 117. form an integral part of this Report.

– Directors’ responsibility for financial reporting

In terms of Sections 150 (1), 151, 152 and 153 (1) and (2) of the Companies Act, the Board of Directors is responsible for the preparation of the Financial Statements of the Company and the Group, which reflect a true and fair view of the financial position and performance of the Company and the Group. In this regard, the Board of Directors wishes to confirm that the Consolidated Financial Statements appearing on pages 117 to 235 have been prepared in conformity with the requirements of the Sri Lanka Accounting Standards as mandated by the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995 and the Companies Act. There were no changes to the accounting policies adopted in the previous year for the Company and the Group, other than those stated.

The Financial Statements of the Company and the Group for the year ended 31 March 2025, including comparatives for 2023/24, were approved and authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 28 May 2025. The appropriate number of copies of the Annual Report will be submitted to the CSE and to the Sri Lanka Accounting and Auditing Standards Monitoring Board within the statutory deadlines.

External auditors and their independence

[Section 168 (1) (c)(i) and (j)]

Auditors report on Financial Statements of the Company with a separate disclosure on amounts payable by the Company to Auditors as audit fees and fees for other services rendered during the accounting period and Auditors’ relationship or any interest with the Company.

The External Auditors, Messrs KPMG, who were appointed in accordance with a resolution passed at the 51 AGM, have expressed their opinion on pages 112 to 116. Details of their remuneration are given in Note 12 on page 142 to the Financial Statements. As far as the Directors are aware, the Auditors do not have any other relationship or any interest in contracts with the Company or the Group.

Board of directors

[Sections 168 (1) (e), (f), (h)]

The Directors of the Company, as at 31 March 2025, and their brief profiles are given on page 24. The names of all the Directors who held office anytime during the reporting year are given on page 80. The names of Directors who will retire and those who will seek reappointment at the forthcoming Annual General Meeting (AGM) are given in the Notice of Meeting on page 243.

– Appraisal of Board performance

The method used to appraise the performance of the Board of Directors is presented in the “Corporate Governance” section on page 79 and Performance Evaluations were obtained from the Board.

– Directors’ interests in contracts and proposed contracts

Except as stated in Note 41.1 to the Financial Statements, during and at the end of the financial year 2024/25, none of the Directors were directly or indirectly interested in contracts or proposed contracts connected with the Company or the Group’s business.

– Directors’ shareholdings

Information of other directorships/significant positions of the present Directors of the Company are given in their profiles presented on page 24 .

– Directors’ interests and the Interests Register

The relevant interests of each Director in the share capital of the Company have been notified by the Directors to the CSE in accordance with Section 7.8 of the Listing Rules and, accordingly, the relevant entries have been made in the Company’s Interests Register which has been maintained as required by the Companies Act. This Annual Report also contains particulars of entries made in the Interests Registers of subsidiaries which are public companies or private companies that have not dispensed with the requirement to maintain an Interests Register as permitted by Section 30 of the Companies Act.

Particulars of entries in the Interests Register include interests in contracts. The Directors have all made a general disclosure to the Board as required by Section 192 (2) of the Companies Act and no additional interests have been disclosed by any Director.

– Loans to Directors

The Company has not granted any loans to the Directors.

– Remuneration to Directors

The details of Directors’ fees and Directors’ emoluments paid during the year are given on page 227.

– Directors’ meetings

Details of Directors’ meetings are presented on page 81.

Donations and CSR

[Section 168 (1) (g)]

During the year under review, the Company made donations amounting to Rs. 11.2 Mn. (2024 – Rs. 10.2 Mn.) in terms of the Resolution passed at the last Annual General Meeting. The Corporate Social Responsibility initiatives of the Company are presented in ‘Social and Relationship Capital’ on page 75.

Corporate Governance

[Code of Best Practice D.1, D.1.1, D.1.4, D.4], [G.1, G.2, G.3]

The Board of Directors have placed emphasis on conforming to the best corporate governance practices and procedures. Accordingly, the Board has provided the necessary resources and installed appropriate processes and procedures in compliance with the relevant codes of best practice issued by the regulatory and professional bodies. The Board has ensured that the Company complied with the Code of Best Practice on Corporate Governance (2023). The measures taken in this regard and information to fulfil disclosure requirements of the above code, Directions and the Listing Rules of the Colombo Stock Exchange (‘CSE’) are set out on pages 92 to 95 of this Annual Report.

Further, the Directors declare that:

• The Company has not engaged in any activity which contravenes laws and regulations.
• All material interests in contracts involving the Company have been declared by the Directors and they have refrained from voting on matters in which they were materially interested.
• The Company has made all endeavours to ensure the equitable treatment of shareholders.
• The business is a going concern.
• A review, of internal controls covering Financial, Operational and Compliance Controls and Risk Management, has been conducted and the Directors have obtained reasonable assurance of their effectiveness and successful adherence.

Internet of things

Group IT policies by which the Company is governed, comprehensively covers the process to identify connections to the Company’s network, Cyber Security Risk Identification and effectiveness of Cyber Security Risk Management. Related information is set out in the Corporate Governance Section on page 89.

Dividend

The Directors recommend that a final cash dividend of Rs. 1,180.7 Mn. equivalent to Rs. 0.60 per ordinary share (post the split of ordinary shares) and Interim dividend of Rs. 737.9 Mn. equivalent to Rs. 1.50 per ordinary share (pre-split of ordinary share) for the financial year 2024/25 (FY 2023/24 Rs. 1,475.9 Mn., equivalent to Rs. 3.00 per ordinary share) be paid to those on the register of shareholders at the close of business on the ex-dividend date. Prior to recommending the dividend and in accordance with Sections 56 (2) and (3) of the Companies Act, the Board signed a certificate stating that, in their opinion, based on available information, the Company will satisfy the solvency test immediately after the distribution is made and have obtained a certificate from the Auditors in terms of Section 57 of the Companies Act. Shareholder approval will be sought on the day of the AGM to declare and pay the final dividend as recommended.

Statutory payments

The Directors, to the best of their knowledge and belief, are satisfied that all statutory payments to the Government, other regulatory institutions, and related to employees have been made on time or have been provided for.

Going concern basis

The Board of Directors reviewed the business plans of the Company and the Group and is satisfied with the adequacy of resources to continue operations in the foreseeable future. Accordingly, the Financial Statements of the Company and the Group have been prepared on a going concern basis.

Related party transactions

The Company’s transactions with related parties in respect of the Company and the Group, for the financial year ended 31 March 2025, are given in Note 41.2 to the Financial Statements on page 228 of the Annual Report and have complied with Rule 9.3.2 of the Listing Rules and the Code of Best Practices on Related Party Transactions under the Securities and Exchange Commission Directive issued under Section 13 (c) of the Securities and Exchange Commission of Sri Lanka Act No. 36 of 1987.

Internal control

The Board, through the involvement of the Group Executive Committee, takes steps to gain assurances on the effectiveness of control systems in place. The Audit Committee receives regular reports on the adequacy and effectiveness of internal controls in the Group, compliance with laws and regulations, and established policies and procedures of the Group. The Board has direct access to the Chairman of the Audit Committee. This Committee reviews reports of the Internal Auditors too.

Compliance with laws and regulations

The Company has not engaged in any activity which is harmful to the environment and society. The Company has complied with statutory requirements and law of Sri Lanka in carrying out business operations.

Sustainability

The Group pursues its business goals under a stakeholder model of business governance. As per this model, the Group has taken specific steps, particularly in ensuring the conservation of its natural resources and the environment as well as addressing material issues highlighted by stakeholders.

Employment

The Group has an equal opportunity policy and these principles are enshrined in specific selection, training, development and promotion policies, ensuring that all decisions are based on merit. The Group practices equality of opportunity for all employees irrespective of ethnic origin, religion, political opinion, gender, marital status, or physical disability.

Annual general meeting

The Annual General Meeting will be held at Sunshine Holdings PLC via audio and visual technology, on 27 June 2025 at 09.00 a.m. The Notice of the Meeting relating to the 52nd Annual General Meeting is given on page 243.

Acknowledgement of the contents of the report

[Section 168 (1) (k)]

The Board of Directors do hereby acknowledge the contents of this Annual Report.

S Sathasivam
Executive Director/
Group Chief Executive Officer

Aruna Deepthikumara
Executive Director/
Group Chief Financial Officer

Corporate Services (Private) Limited
Secretaries and Registrars
28 May 2025