DEAR STAKEHOLDER,

It is with great pride and a strong sense of responsibility that I present the seventh Sustainability Report of South Asia Gateway Terminals (Private) Limited (SAGT) to you, as we reflect on the financial year 2025/26 and advance through our 27th year of operations at the Port of Colombo. This report provides a transparent and comprehensive account of our past performance, priorities and progress across key environmental, social and governance dimensions, all whilst demonstrating how sustainability considerations are integrated into our long-term strategy and daily operational decision-making. This includes our commitment to decarbonising operations, having a diverse workforce and upholding principles of corporate governance.

Over the past two and a half decades, SAGT has remained a cornerstone of Sri Lanka’s maritime and trade infrastructure. Since commencing operations in 1999, the Company has played a pivotal role in shaping the Port of Colombo into a globally recognised transshipment hub widely known for operational efficiency, reliability and connectivity. Today, as the external environment continues to evolve with increasing complexity, the principles of sustainability, resilience and responsible leadership have never been more central to our role as a terminal operator. This Sustainability Report is intended as a meaningful channel of engagement with our stakeholders including customers, employees, contractors, regulators, shareholders, lenders, communities and partners.

Through this report, we seek to communicate our approach to managing risk, capturing opportunity and creating long-term value in a manner that balances economic performance with social responsibility and environmental stewardship.

THE STRATEGIC ROLE OF THE PORT OF COLOMBO AND SAGT

The Port of Colombo (PoC) continues to serve as Sri Lanka’s primary maritime gateway and a critical transshipment hub for South Asia and the wider Indian Ocean region. Its strategic location astride the EastWest Main Sea Route offers shipping lines minimal deviation between Asia, the Middle East and Europe, which assists in reinforcing Colombo’s competitiveness in the region. This strategic positioning has enabled the Port of Colombo to deliver consistent, high-volume performance despite ongoing periods of global economic uncertainty and regional disruption.

The Port of Colombo is Sri Lanka’s economic lifeline driving the country’s trade and foreign exchange earnings. For local importers and exporters, the Port of Colombo's connectivity delivers exceptional value, providing efficient routes to international markets via direct services, reducing costs and, CO₂ emissions.

GLOBAL TRADE DYNAMICS AND EVOLVING OPPORTUNITIES

The global maritime industry continued to operate under heightened volatility during the reporting period. Geopolitical tensions, inflationary pressures, climate-related risks, regulatory transitions, and realignments in global supply chains have collectively reshaped trade flows and shipping networks. One of the most significant influences on container shipping in recent years has been the ongoing conflict in the Middle East and the associated security challenges in the Red Sea and Suez Canal region.

As a consequence of these disruptions, vessels have continued to divert via the Cape of Good Hope, adding 10-15 days to typical voyage times between Asia and Europe. While this has increased transit times and costs for shipping lines and cargo owners, it has also resulted in higher vessel deployment, increased inventory in transit and greater reliance on intermediate hubs capable of supporting complex network adjustments.

The ongoing escalation of geopolitical tensions in the Middle East, particularly the recent hostilities involving Iran, Israel and the United States, continues to contribute to heightened uncertainty in global trade and energy markets. These developments have had a material influence on maritime supply chains, including increased security risks across critical waterways, volatility in fuel prices, and prolonged disruptions to established East-West trade routes.

For the container shipping industry, these dynamics have reinforced the trend of vessels avoiding high-risk zones and operating on longer routes, which increases operating costs and planning complexity for terminal operators. At the same time, such conditions underscore the strategic importance of stable, secure, and wellconnected transshipment hubs such as the Port of Colombo.

As a terminal operating within this ecosystem, SAGT closely monitors geopolitical developments and their potential impacts on vessel deployment, schedule reliability, fuel cost exposure and demand patterns. At the same time, the continuation of geopolitical disruptions has further highlighted Colombo’s value as a resilient and geographically advantaged transshipment hub, capable of supporting global shipping networks during periods of heightened uncertainty. SAGT remains focused on maintaining operational flexibility, cost discipline and service reliability in order to support our customers and stakeholders while navigating the impacts of geopolitical instability.

For the Port of Colombo, these developments present a significant strategic opportunity. Colombo’s geographic position, including its connectivity and ability to support hub-and-spoke operations, has made it an increasingly important transshipment hub port in the region. While the majority of container volumes handled at Colombo continue to originate from South and Southeast Asia, particularly India and Bangladesh, the rerouting of services connecting the Middle East and Europe has also influenced vessel deployment and port call patterns. These dynamics reinforce Colombo’s relevance as a transshipment hub during periods of global disruption, underlining the Port’s potential to capture incremental volumes as trade routes evolve.

As shipping lines continue to reassess network design in response to geopolitical uncertainty, Colombo’s reliability, deep-draft capability and feeder connectivity position it well to benefit from longer-term shifts in global trade patterns. SAGT remains committed to supporting this value proposition through operational excellence, infrastructure readiness and customer-focused service delivery

SAGT PERFORMANCE AND OPERATIONAL RESILIENCE

Against this broader backdrop, SAGT’s operational performance during the reporting period reflects resilience, adaptability and strong long-term orientation. In the reporting period 2025/26, SAGT handled 1.8 million TEUs, representing a modest decline compared to the previous year. This outcome must be viewed within the context of significant infrastructure enhancement project involving the replacement of quay crane rails, which was considered an essential investment to ensure the long-term safety, reliability and performance of terminal assets.

The quay crane rail replacement project, which was executed between October 2025 and March 2026, required the terminal to operate on a reduced two-berth configuration for part of the year. While this constrained throughput temporarily, it significantly strengthened the foundations for future operations and equipment upgrades. Importantly, even under these constrained conditions, SAGT’s throughput remained significantly above its original design capacity of 1.1 million TEUs, reaffirming the strength of our planning, systems, processes, and people.

The commencement of operations at the Colombo West International Terminal (CWIT) marked a longawaited expansion of handling capacity at the Port of Colombo. As new capacity came online, volumes were redistributed across terminals, which resulted in a short-term adjustment period.

As capacity expansions at the Port of Colombo reach greater operational maturity, we remain confident that volumes will continue to grow in line with the Port’s historical pattern of capacity-led expansion, which I believe will be directly supported by regional trade growth and Colombo’s strategic positioning.

SUSTAINABILITY AS AN INTEGRATED BUSINESS IMPERATIVE

Sustainability at SAGT is not treated as a standalone initiative but as an integral component of our business model and long-term value creation strategy. Our Sustainability Management Framework is structured around four interconnected pillars, namely: Environmental Stewardship, Social Responsibility, Governance and an Enabling Work Environment – focusing on safety, security, health and wellbeing, ensuring that sustainability considerations are embedded across strategic planning, capital allocation, operational execution and stakeholder engagement.

ENVIRONMENTAL STEWARDSHIP AND DECARBONISATION

The maritime and logistics sector remains a significant contributor to global greenhouse gas emissions, and as a container terminal connecting sea and land transport, SAGT has a responsibility to minimise the environmental footprint of its operations. Our decarbonisation strategy is aligned with the ambitions of our customers, global best practices and the pathway established by the International Maritime Organisation (IMO) towards net-zero emissions by 2050.

Nevertheless, it is important to acknowledge that certain core terminal operations, which include RTGs, prime movers and inter-terminal transfer (ITT) trucks, remain dependent on diesel fuel. As such, fuel price volatility continues to represent a material operating cost consideration. However, as our sustainability initiatives progress through hybridisation, electrification, route optimisation, and reduced idle time, the relative impact of fuel price increases on our overall cost base is expected to diminish. This transition strengthens SAGT’s long-term cost resilience while supporting our decarbonisation objectives.

During the year, SAGT commissioned its 460 kW rooftop solar system. During the FY 2025/26, SAGT’s roof top solar system generated 391,585 kWh, which amounts to 5% of the total electricity usage. We are actively assessing opportunities to extend solar installations to gatehouse rooftops, to establish renewable energy-powered “green gates” within the Port of Colombo.

In parallel to this, SAGT also continues investing in electric and energyefficient equipment to decarbonize operations. As an initial step, two electric forklifts and an electric inspection vehicle for the Health, Safety and Environment team. These initiatives reduce emissions, lower operating costs and contribute to quieter and safer working environments. Looking ahead, SAGT plans to electrify 30 trucks from its fleet of Prime Movers, which will contribute further towards our decarbonisation journey.

Water stewardship also remained a priority during the year. Through systematic identification and repair of underground leaks and sustained awareness campaigns, SAGT achieved a 16% reduction in water withdrawal. Looking ahead, the planned installation of an Effluent Treatment Plant, subject to site approvals, will most likely enable the reuse of treated wastewater for selected operations, potentially offsetting approximately up to 50% of current daily water usage and further strengthening water resilience.

Beyond the terminal boundary, SAGT continues to invest in ecosystem restoration as part of its broader climate strategy. Our long-standing partnership with the Centre for Sustainability of the University of Sri Jayewardenepura progressed further during the year through advancement of the Benthara River Mangrove restoration project at Ittapana. These projects contribute to carbon sequestration, biodiversity enhancement and sustainable livelihoods for surrounding communities all whilst reinforcing environmental awareness among our employees through volunteering opportunities.

PEOPLE, SAFETY, AND SOCIAL RESPONSIBILITY

Our people are central to SAGT’s success and sustainability. The terminal operating environment is inherently high-risk, and ensuring the safety, health and well-being of employees, contractors and visitors remain embedded in our core values.

During the reporting period, SAGT continued to strengthen its safety culture through training, systems and the application of Digital Safety Management System that consolidates permits, incident reporting and inspections which was implemented in FY 2024/2025. A mandatory safety refresher training was carried out for all employees and contractors, complemented by specialised training for emergency response teams and employees working in high-risk roles.

Beyond safety, we continued to invest in human capital development amid accelerating digitisation and automation. During the financial year, SAGT continued training programmes across technical, leadership and safety disciplines. Compared to 2024/25, the 20% reduction in training hours in 2025/26 was due to a shift to needsbased training for skills upgrade and knowledge onboarding. Nevertheless, employee upskilling, training and development remained a key priority for SAGT in 2025/26.

During the year, SAGT continued the adoption of organisation-wide LEAN management principles under the guidance of the APM Terminals Global LEAN Academy. LEAN level 1 training was conducted for all employees with the intention of continuing the LEAN level 2 program for selected employees in the coming year. These initiatives empower employees to identify inefficiencies, drive process improvements and contribute to continuous operational excellence.

Advancing diversity and inclusion remains a cornerstone of our social agenda. The global port industry has long been male-dominated, with shift-based operational roles rarely accessible to women due to regulatory and cultural norms. Having secured approval in September 2024 to employ women in selected operational shift-based roles, SAGT has since onboarded 13 women into shift positions, pioneering a more inclusive workforce model in Sri Lanka's port sector and lifting our overall female representation to 6.84% as of FY 2025/26.

GOVERNANCE AND ETHICAL LEADERSHIP

Strong governance underpins SAGT’s operations and sustainability journey. The Company operates under a robust governance framework aligned with global best practices, with a fully non-executive Board providing strategic oversight. Policies such as the Code of Conduct, Supplier Code of Conduct, Whistleblowing Policy and policies addressing harassment and discrimination guide ethical behaviour across the organisation and its value chain.

LOOKING AHEAD

Looking to the future, we remain optimistic about the long-term prospects of SAGT and the Port of Colombo. Capacity expansion at the Port, sustained trade growth in South Asia and continued investment in technology, decarbonisation and people, position us well to navigate uncertainty and capture emerging opportunities.

Consistent with global port industry trends, digitalisation and automation stayed at the core of SAGT’s operational strategy during the reporting period. Steady progress was made on gate and quayside automation infrastructure, supported by the rollout of Optical Character Recognition (OCR) technology. OCR will enable fully automated gate operations and partially automated quayside processes by accurately capturing container numbers, damage status, and vehicle information, reducing manual intervention, enhancing data accuracy, and improving safety.

SAGT has also advanced its Vehicle Booking System (VBS) for trucks, which assigns time slots and quotas to spread gate transactions evenly throughout the day. Supported by a dedicated mobile app for drivers, the system is expected to reduce congestion, improve truck turnaround times, minimize empty trips, and enhance overall gate efficiency across the port ecosystem. Addition to that, four new STS cranes that will have remote operation capability will be implemented by the end of 2027.

ACKNOWLEDGEMENTS

I extend my sincere appreciation to our customers for their continued confidence, to our employees and contractor partners for their dedication and professionalism, to the Board of Directors and Senior Management Team for their guidance, to trade unions for their responsible partnership and to our suppliers, regulators and community partners for their steadfast support.

As a vital component of Sri Lanka’s trade and logistics infrastructure, SAGT will continue to lead with responsibility, resilience and purpose, creating sustainable value for our stakeholders today while safeguarding the future for generations to come.