In keeping with Section 9 of the Listing Rules on Corporate Governance, Nawaloka Hospitals PLC has established an Audit Committee whose functions, authority and duties have been clearly identified in the Audit Committee Charter. This Charter integrates all the requirements of the Listing Rules, Companies Act No. 07 of 2007, Securities and Exchange Commission Rules and other relevant financial reporting related regulations and requirements.

The role of the Audit Committee is to oversee the financial reporting system of the Company with a view to safeguarding the interests of all the stakeholders and ensuring that it has been extended to its subsidiaries. This includes selecting and applying appropriate accounting policies for the purpose of financial reporting, ensuring sound internal control principles and its effective implementation, thus ensuring the integrity of Financial Statements.

Composition of the Committee

The Audit Committee of the Company comprises the following members;

Name of member	Non- Executive	Independent
Dr Chamara Bandara (Chairman)
Mr Chamira Wijetilleke
Mr Tissa Bandaranayake		Until 31 December 2024
Deshabandu Tilak De Zoysa		–
Mr Virann de Zoysa

Changes to the composition of the Audit Committee during the financial year 2024/25;

• Mr Tissa Bandaranayake resigned as Chairman of the Committee w.e.f 31 December 2024
• Mr D Sunil AbeyRatna resigned as Director of the Company and accordingly as member of the Committee w.e.f
  31 December 2024.
• Dr Chamara Bandara was appointed as Chairman of the Audit Committee w.e.f 31 December 2024.
• Mr Chamira Wijetilleke and Mr Virann de Zoysa were appointed as members w.e.f 31 December 2024.

The profiles of the members which detail their background and professional experience are on pages 17 to 22 of this Report.

The Company Secretary acts as the Secretary to the Committee.

Broad Purpose of the Audit Committee

The Audit Committee assisted the Board in the following manner:

• Ensuring that the preparation, presentation, and adequacy of disclosures in the Financial Statements are in accordance with LKAS/SLFRS and with the requirements in the Companies Act No. 07 of 2007 and other relevant financial reporting related regulatory requirements.
• Reviewing the appropriateness of the procedure in place for the identification, evaluation and management of business risks whilst seeing that the systems of internal control with regard to all functions are adequate and functioning properly.
• Assessing the Company’s ability to continue as a going concern in the foreseeable future and also in addition, ensuring compliance with all relevant statutory and regulatory requirements.
• Overseeing of the independence and performance of the Company’s External Auditors.

Duties and Responsibilities

In brief, the duties and responsibilities performed by the Audit Committee are as follows:

External Audit Examining any non-audit work performed by the Auditors together with the fees thereon and other relevant criteria to ensure that their objectivity and independence is not impaired. Reviewing the scope and performance of the audit and its effectiveness. Discussing with the Auditors at appropriate stages of the audit, with or without the presence of management the audit plan, key audit issues and their resolution together with management responses. Based on the above evaluation, recommending the re-appointment or otherwise of the current Auditors for the financial year ending 31 March 2026.

Internal controls and internal audit Reviewing the internal audit function which has been outsourced and following up on their recommendations. Ensuring that there are satisfactory arrangements for monitoring internal controls in keeping with delegated authorities.

Risk management Monitoring the policies and practices related to risk management. Obtaining statements of business risks, evaluating the severity, the process in place for the management of these risks and persons responsible for the management of risks within specified time frames.

Financial Statements Reviewing Company’s quarterly unaudited and annually audited Financial Statements and if approved, making recommendations to the Board for their adoption and release. Assists the Board of Directors in fulfilling its oversight responsibilities of the financial reporting process, the system of internal control over financial reporting, the audit process, risk management and the Company’s processes for monitoring compliance with financial reporting requirements, information requirements under the Corporate Governance Rules of the Colombo Stock Exchange, the Companies Act, No. 07 of 2007 and the Securities and Exchange Commission of Sri Lanka (SEC) Act No. 19 of 2021, and other relevant financial reporting related regulations.

Meetings

The Audit Committee held eight (8) meetings during the year under review. The proceedings of the Audit Committee are regularly reported to the Board of Directors. The attendance of members at these meetings is given below:

Name of member	Number of meetings attended (out of 8)
Mr Tissa K Bandaranayake (Chairman until 31 December 2024)		8/8
Deshabandu Tilak De Zoysa		7/8
Mr D Sunil AbeyRatna (Resigned on 31 December 2024)		6/8
Dr Chamara Bandara (Appointed Chairman w.e.f 31 December 2024)		1/8
Mr Chamira Wijetilleke (Appointed w.e.f 31 December 2024)		2/8
Mr Virann de Zoysa (Appointed w.e.f 31 December 2024)		1/8

The meetings were attended by the Deputy Chairman, Director/General Manager, Group Chief Financial Officer and Chief Financial Officer.

Functions and Disclosures

The Committee has provided the Chairman of the Audit Committee with all powers to convene meetings, regularly with the Chief Financial Officer, Head of IT, Internal Auditor, Sectional Heads and Company’s External Auditors, separately and periodically.

As required under Rule 9.13.5 (2) (c) and (d) of the Listing Rules of the CSE, the Audit Committee has received confirmations from the Chief Financial Officer that the Financial Statements have been prepared in accordance with the Listing Rules of the Colombo Stock Exchange, Sri Lanka Accounting Standards, information required by the Companies Act No. 07 of 2007 and the Securities and Exchange Commission of Sri Lanka therein and presented a true and fair view of the Company’s state of affairs as at that date and the Company’s activities during the year under review.

The Committee, having given due consideration to the nature of the services provided by the External Auditors to Nawaloka Hospitals PLC and the fees charged by them, is that the External Auditors have not performed non-audit services to Nawaloka Hospitals PLC and no conflict of interest arose during the year ended 31 March 2025 and hence the independence of the External Auditors, has not been impaired.

Messrs KPMG have been the External Auditors of the Company since 2007 and the engagement of the present Audit Partner commenced on 2019/20.

The fees paid to the Auditors are shown under Note 11 to the accounts.

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. 07 of 2007.

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

The Audit Committee recommended to the Board of Directors that Messrs KPMG, Chartered Accountants be reappointed as Auditors of the Company for the financial year ending 31 March 2026, 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 independence guidance given in the Code of Ethics of The Institute of Chartered Accountants of Sri Lanka

Dr Chamara Bandara
Chairman

04 September 2025