Hayleys PLC I Annual Report 2020/21

1 Hayleys PLC I Annual Report 2020/21 . EXCEPTIONAL. In the midst of a complex environment lled with turbulence and uncertainty, we are proud to Report that your Company emerged triumphant continuing steadily along an exceptional journey of resilience and growth that rst began over 143. years ago. Over the years, we navigated a formidable course relying on perfectly crafted structures, systems and strategies that enabled us to thrive in the face of overwhelming odds. That's how, despite the debilitating impacts of the year under review, we remained unwavering, confronting the seemingly impossible with a powerful strength and resilience that is distinctive to us. The pages that follow explore our strong track record of success in the face of impossible odds, while paying tribute to the characteristics and the unyielding strength that enabled us to display a truly spectacular performance during the year under review.

2 We're rising above the storm to face the future with con dence; delivering a legacy of exceptional value both today, and in the years to come. The bar-headed goose is known for its iconic high altitude migration, making a journey across challenging conditions for 1,500km over the Himalayas the world's longest and tallest land mass. Its ability to survive extreme weather conditions and potential threats is a result of years of evolution and strategic thinking - undertaking a unique path that maximises progress through sheer energy and determination. 2. CONTENTS. 1 2 3. We are the Hayleys Group Leadership & Governance Strategies to Unlock Value 13 Year at a glance 30 Chairman/CEO's Message 70 Value Creation Model 14 We are the Hayleys Group 40 Board of Directors 72 Stakeholder engagement 16 Our Portfolio 46 Group Management Committee 74 Material Matters 18 Performance Highlights 50 Corporate Governance 77 Asset Allocation 20 Evolution of our Annual Report 78 Unlocking Value 21 Our Impacts 80 Sustainability at Hayleys 22 Hayleys response to COVID-19 82 Commitment to the Sustainable 24 Our Story Continues Development Goals (SDG).

3 26 Investment Case 85 Risks & Opportunities 28 Country-by-Country Reporting We are the Hayleys Group / Leadership & Governance / Strategies to Unlock Value / Portfolio Review / Integrated Performance / Financial Statements 3. 4 5 6. Portfolio Review Integrated Performance Financial Statements 96 The Operating Environment 172 Consolidated Statement of Financial 246 Independent Auditor's Report 98 Sector Review - Eco Solutions Performance 250 Statement of Pro t or Loss 104 Sector Review - Hand Protection 174 Financial Capital 251 Statement of Comprehensive Income 110 Sector Review - Puri cation 182 Manufactured Capital 252 Statement of Financial Position 116 Sector Review - Textiles 185 Consolidated Statement of Social 254 Statement of Changes in Equity 122 Sector Review - Construction Performance 259 Statement of Cash Flows Materials 186 Human Capital 261 Notes to the Financial Statements 128 Sector

4 Review - Plantations 195 Social and Relationship Capital 370 Ten Year Summary 134 Sector Review - Agriculture 205 Intellectual Capital 371 Indicative US Dollar Financial 140 Sector Review - Consumer & Retail 212 Consolidated Statement of Statements 146 Sector Review - Leisure Environmental Performance 374 Value of Real Estate 152 Sector Review - Industry Inputs, 213 Natural Capital 378 Quarterly Analysis Power & Energy 226 Consolidated Statement of 379 Share Information 158 Sector Review - Transportation & Economic Performance 381 History of Dividends and Scrip Issues Logistics 228 Annual Report of the Board of 383 Country Report 164 Sector Review - Others Directors 385 Group Companies 170 An Evolving Portfolio 237 Chairman/Chief Executive's and 387 Group Value Addition And Group Chief Financial Officer's Distribution Responsibility Statement 388 Awards and recognition 238 Directors' Statement on Internal 389 Glossary of Financial Terms Controls 391 Independent Limited Assurance 239 Nomination Committee Report Report - GRI

5 Reporting 240 Remuneration Committee 393 Independent Limited Assurance Report Report - Integrated Reporting 241 Statement of Directors' 395 GRI Content Index Tool Responsibilities 400 Corporate Information 242 Related Party Transactions Review 401 Notice of Meeting Committee Report 405 Form of Proxy 243 Audit Committee Report 407 Investor Feedback Form Hayleys PLC Annual Report 2020/21 . EXCEPTIONAL. FORM. We're built to endure the harshest environments structured to adapt to any eventuality. The bar-headed goose is structured to sustain ight at remarkably high altitudes. These birds possess stronger lungs and oxygen-rich blood; adaptations that enable them to triumph against conditions of low air density, less oxygen, and extreme cold.

6 Lungs ENERGY ENDURANCE. Our unwavering strength and vitality We're wired to weather the storms enabled us to rise above and surpass that lie ahead, as we power onwards stakeholder expectations. with a purpose. This particular species rarely glides, yet possesses the The bar headed goose can cover over 1,600km in a single stamina to travel over challenging terrain. Long periods day, with some ights being tracked at over 17 hours. They of ight are maintained by expending considerable are able to y against strong crosswinds and yet maintain energy through the constant apping of their wings. their course, utilising a v-formation to optimise their performance. We are the Hayleys Group / Leadership & Governance / Strategies to Unlock Value / Portfolio Review / Integrated Performance / Financial Statements HEIGHTS ASCENDANCY.

7 We're soaring far above the rest of We continue to push ourselves to our peers, dominating the space in transcend our limits, and achieve new which we operate. heights year on year. These birds are unmatched in terms of the sheer scale of The Himalayas grows by approximately 10mm every year. The their achievements able to reach heights above 7,000m, geese have been making their journey for millennia, pushing where every other species is barely able to survive. themselves to exceed their past performances and conquer increasing adversity. VISION. To be Sri Lanka's corporate inspiration at all times. MISSION. Delivering superior shareholder value by unleashing the full potential of our people and achieving leadership in all our domestic and global businesses.

8 We are the Hayleys Group / Leadership & Governance / Strategies to Unlock Value / Portfolio Review / Integrated Performance / Financial Statements VALUES. H - Honesty and Integrity - ethical and transparent in all our dealings. A - Accountability - holding ourselves responsible to deliver what we promise. Y - Yes, WE can! (Team Work) - working with each other and with our partners across boundaries, to make things happen. L- Love for humanity - treating everyone with respect and dignity, providing for the development of our people and rewarding them for good performance. E - Enduring customer Value - enhancing experiences for every customer , from the rural farmer to the global consumer.

9 Y - Yes, we WILL WIN! (a Will to win) - exhibiting the will to win that which is important to Hayleys and its shareholders. S- Social Responsibility as a Good Corporate Citizen - caring for the communities in which we work, actively supporting their growth and being environmentally responsible in all we do. &. I- Innovation - transforming ideas into products and services to create economic, social and environmental value in the pioneering spirit of Hayleys . A TRIBUTE TO. OUR EMPLOYEES. We are the Hayleys Group / Leadership & Governance / Strategies to Unlock Value / Portfolio Review / Integrated Performance / Financial Statements In an extraordinarily challenging year, your company demonstrated remarkable spirit and agility to deliver exceptional results.

10 Our people faced adversity head on, rallying together to propel Hayleys towards bold and transformative action and to deliver record-breaking growth and pro tability . Ensured the safety of our people through stringent measures in line with guidelines issued by relevant health authorities Increased capacity utilisation levels in key sectors without additional investments, through embracing new ways of working Factories swiftly recommenced operations Leveraged digital capabilities to facilitate remote working arrangements Full remuneration maintained for all employees across the Group THROUGH THE COMMITMENT OF OUR PEOPLE THE GROUP DELIVERED. Rs. bn Highest-ever Revenue Rs. bn Highest-ever PBT.